EN BANC [G.R. No. 138570.

October 10, 2000] BAYAN (Bagong Alyansang Makabayan), a JUNK VFA MOVEMENT, BISHOP TOMAS MILLAMENA (Iglesia Filipina Independiente), BISHOP ELMER BOLOCAN (United Church of Christ of the Phil.), DR. REYNALDO LEGASCA, MD, KILUSANG MAMBUBUKID NG PILIPINAS, KILUSANG MAYO UNO, GABRIELA, PROLABOR, and the PUBLIC INTEREST LAW CENTER, petitioners, vs. EXECUTIVE SECRETARY RONALDO ZAMORA, FOREIGN AFFAIRS SECRETARY DOMINGO SIAZON, DEFENSE SECRETARY ORLANDO MERCADO, BRIG. GEN. ALEXANDER AGUIRRE, SENATE PRESIDENT MARCELO FERNAN, SENATOR FRANKLIN DRILON, SENATOR BLAS OPLE, SENATOR RODOLFO BIAZON, and SENATOR FRANCISCO TATAD, respondents. [G.R. No. 138572. October 10, 2000] PHILIPPINE CONSTITUTION ASSOCIATION, INC.(PHILCONSA), EXEQUIEL B. GARCIA, AMADOGAT INCIONG, CAMILO L. SABIO, AND RAMON A. GONZALES, petitioners, vs. HON. RONALDO B. ZAMORA, as Executive Secretary, HON. ORLANDO MERCADO, as Secretary of National Defense, and HON. DOMINGO L. SIAZON, JR., as Secretary of Foreign Affairs, respondents. [G.R. No. 138587. October 10, 2000] TEOFISTO T. GUINGONA, JR., RAUL S. ROCO, and SERGIO R. OSMEA III, petitioners, vs. JOSEPH E. ESTRADA, RONALDO B. ZAMORA, DOMINGO L. SIAZON, JR., ORLANDO B. MERCADO, MARCELO B. FERNAN, FRANKLIN M. DRILON, BLAS F. OPLE and RODOLFO G. BIAZON, respondents. [G.R. No. 138680. October 10, 2000] INTEGRATED BAR OF THE PHILIPPINES, Represented by its National President, Jose Aguila Grapilon, petitioners, vs. JOSEPH EJERCITO ESTRADA, in his capacity as President, Republic of the Philippines, and HON. DOMINGO SIAZON, in his capacity as Secretary of Foreign Affairs, respondents. [G.R. No. 138698. October 10, 2000] JOVITO R. SALONGA, WIGBERTO TAADA, ZENAIDA QUEZON-AVENCEA, ROLANDO SIMBULAN, PABLITO V. SANIDAD, MA. SOCORRO I. DIOKNO, AGAPITO A. AQUINO, JOKER P. ARROYO, FRANCISCO C. RIVERA JR., RENE A.V. SAGUISAG, KILOSBAYAN, MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. (MABINI), petitioners, vs. THE EXECUTIVE SECRETARY, THE SECRETARY OF FOREIGN AFFAIRS, THE SECRETARY OF NATIONAL DEFENSE, SENATE PRESIDENT MARCELO B. FERNAN, SENATOR BLAS F. OPLE, SENATOR RODOLFO G. BIAZON, AND ALL OTHER PERSONS ACTING THEIR CONTROL, SUPERVISION, DIRECTION, AND INSTRUCTION IN RELATION TO THE VISITING FORCES AGREEMENT (VFA), respondents. DECISION
BUENA, J.:

Confronting the Court for resolution in the instant consolidated petitions for certiorari and prohibition are issues relating to, and borne by, an agreement forged in the turn of the last century between the Republic of the Philippines and the United States of America -the Visiting Forces Agreement. The antecedents unfold.

On March 14, 1947, the Philippines and the United States of America forged a Military Bases Agreement which formalized, among others, the use of installations in the Philippine territory by United States military personnel. To further strengthen their defense and security relationship, the Philippines and the United States entered into a Mutual Defense Treaty on August 30, 1951. Under the treaty, the parties agreed to respond to any external armed attack on their territory, armed forces, public vessels, and aircraft.i[1]

In view of the impending expiration of the RP-US Military Bases Agreement in 1991, the Philippines and the United States negotiated for a possible extension of the military bases agreement. On September 16, 1991, the Philippine Senate rejected the proposed RP-US Treaty of Friendship, Cooperation and Security which, in effect, would have extended the presence of US military bases in the Philippines.ii[2] With the expiration of the RP-US Military Bases Agreement, the periodic military exercises conducted between the two countries were held in abeyance. Notwithstanding, the defense and security relationship between the Philippines and the United States of America continued pursuant to the Mutual Defense Treaty.

On July 18, 1997, the United States panel, headed by US Defense Deputy Assistant Secretary for Asia Pacific Kurt Campbell, met with the Philippine panel, headed by Foreign Affairs Undersecretary Rodolfo Severino Jr., to exchange notes on the complementing strategic interests of the United States and the Philippines in the Asia-Pacific region. Both sides discussed, among other things, the possible elements of the Visiting Forces Agreement (VFA for brevity). Negotiations by both panels on the VFA led to a consolidated draft text, which in turn resulted to a final series of conferences and negotiationsiii[3] that culminated in Manila on January 12 and 13, 1998. Thereafter, then President Fidel V. Ramos approved the VFA, which was respectively signed by public respondent Secretary Siazon and Unites States Ambassador Thomas Hubbard on February 10, 1998.

On October 5, 1998, President Joseph E. Estrada, through respondent Secretary of Foreign Affairs, ratified the VFA.iv[4]

On October 6, 1998, the President, acting through respondent Executive Secretary Ronaldo Zamora, officially transmitted to the Senate of the Philippines,v[5] the Instrument of Ratification, the letter of the Presidentvi[6] and the VFA, for concurrence pursuant to Section 21, Article VII of the 1987 Constitution. The Senate, in turn, referred the VFA to its Committee on Foreign Relations, chaired by Senator Blas F. Ople, and its Committee on National Defense and Security, chaired by Senator Rodolfo G. Biazon, for their joint consideration and recommendation. Thereafter, joint public hearings were held by the two Committees.vii[7]

On May 3, 1999, the Committees submitted Proposed Senate Resolution No. 443viii[8] recommending the concurrence of the Senate to the VFA and the creation of a Legislative Oversight Committee to oversee its implementation. Debates then ensued.

On May 27, 1999, Proposed Senate Resolution No. 443 was approved by the Senate, by a twothirds (2/3) voteix[9] of its members. Senate Resolution No. 443 was then re-numbered as Senate Resolution No. 18.x[10] On June 1, 1999, the VFA officially entered into force after an Exchange of Notes between respondent Secretary Siazon and United States Ambassador Hubbard. The VFA, which consists of a Preamble and nine (9) Articles, provides for the mechanism for regulating the circumstances and conditions under which US Armed Forces and defense personnel may be present in the Philippines, and is quoted in its full text, hereunder: Article I Definitions As used in this Agreement, United States personnel means United States military and civilian personnel temporarily in the Philippines in connection with activities approved by the Philippine Government. Within this definition: 1. The term military personnel refers to military members of the United States Army, Navy, Marine Corps, Air Force, and Coast Guard. 2. The term civilian personnel refers to individuals who are neither nationals of, nor ordinary residents in the Philippines and who are employed by the United States armed forces or who are accompanying the United States armed forces, such as employees of the American Red Cross and the United Services Organization. Article II Respect for Law It is the duty of the United States personnel to respect the laws of the Republic of the Philippines and to abstain from any activity inconsistent with the spirit of this agreement, and, in particular, from any political activity in the Philippines. The Government of the United States shall take all measures within its authority to ensure that this is done. Article III Entry and Departure 1.The Government of the Philippines shall facilitate the admission of United States personnel and their departure from the Philippines in connection with activities covered by this agreement. 2.United States military personnel shall be exempt from passport and visa regulations upon entering and departing the Philippines. 3. The following documents only, which shall be presented on demand, shall be required in respect of United States military personnel who enter the Philippines: (a) personal identity card issued by the appropriate United States authority showing full name, date of birth, rank or grade and service number (if any), branch of service and photograph; (b) individual or collective document issued by the appropriate United States authority, authorizing the travel or visit and identifying the individual or group as United States military personnel; and (c) the commanding officer of a military aircraft or vessel shall present a declaration of health, and when required by the cognizant representative of the Government of the Philippines, shall conduct a quarantine inspection and will certify that the aircraft or vessel is free from quarantinable diseases. Any quarantine inspection of United

States aircraft or United States vessels or cargoes thereon shall be conducted by the United States commanding officer in accordance with the international health regulations as promulgated by the World Health Organization, and mutually agreed procedures. 4. United States civilian personnel shall be exempt from visa requirements but shall present, upon demand, valid passports upon entry and departure of the Philippines. 5. If the Government of the Philippines has requested the removal of any United States personnel from its territory, the United States authorities shall be responsible for receiving the person concerned within its own territory or otherwise disposing of said person outside of the Philippines. Article IV Driving and Vehicle Registration 1. Philippine authorities shall accept as valid, without test or fee, a driving permit or license issued by the appropriate United States authority to United States personnel for the operation of military or official vehicles. 2. Vehicles owned by the Government of the United States need not be registered, but shall have appropriate markings. Article V Criminal Jurisdiction 1. Subject to the provisions of this article: (a) Philippine authorities shall have jurisdiction over United States personnel with respect to offenses committed within the Philippines and punishable under the law of the Philippines. (b) United States military authorities shall have the right to exercise within the Philippines all criminal and disciplinary jurisdiction conferred on them by the military law of the United States over United States personnel in the Philippines. 2. (a) Philippine authorities exercise exclusive jurisdiction over United States personnel with respect to offenses, including offenses relating to the security of the Philippines, punishable under the laws of the Philippines, but not under the laws of the United States. (b) United States authorities exercise exclusive jurisdiction over United States personnel with respect to offenses, including offenses relating to the security of the United States, punishable under the laws of the United States, but not under the laws of the Philippines. (c) For the purposes of this paragraph and paragraph 3 of this article, an offense relating to security means: (1) treason; (2) sabotage, espionage or violation of any law relating to national defense. 3. In cases where the right to exercise jurisdiction is concurrent, the following rules shall apply: (a) Philippine authorities shall have the primary right to exercise jurisdiction over all offenses committed by United States personnel, except in cases provided for in paragraphs 1(b), 2 (b), and 3 (b) of this Article.

(b) United States military authorities shall have the primary right to exercise jurisdiction over United States personnel subject to the military law of the United States in relation to. (1) offenses solely against the property or security of the United States or offenses solely against the property or person of United States personnel; and (2) offenses arising out of any act or omission done in performance of official duty. (c) The authorities of either government may request the authorities of the other government to waive their primary right to exercise jurisdiction in a particular case. (d) Recognizing the responsibility of the United States military authorities to maintain good order and discipline among their forces, Philippine authorities will, upon request by the United States, waive their primary right to exercise jurisdiction except in cases of particular importance to the Philippines. If the Government of the Philippines determines that the case is of particular importance, it shall communicate such determination to the United States authorities within twenty (20) days after the Philippine authorities receive the United States request. (e) When the United States military commander determines that an offense charged by authorities of the Philippines against United states personnel arises out of an act or omission done in the performance of official duty, the commander will issue a certificate setting forth such determination. This certificate will be transmitted to the appropriate authorities of the Philippines and will constitute sufficient proof of performance of official duty for the purposes of paragraph 3(b)(2) of this Article. In those cases where the Government of the Philippines believes the circumstances of the case require a review of the duty certificate, United States military authorities and Philippine authorities shall consult immediately. Philippine authorities at the highest levels may also present any information bearing on its validity. United States military authorities shall take full account of the Philippine position. Where appropriate, United States military authorities will take disciplinary or other action against offenders in official duty cases, and notify the Government of the Philippines of the actions taken. (f) If the government having the primary right does not exercise jurisdiction, it shall notify the authorities of the other government as soon as possible. (g) The authorities of the Philippines and the United States shall notify each other of the disposition of all cases in which both the authorities of the Philippines and the United States have the right to exercise jurisdiction. 4. Within the scope of their legal competence, the authorities of the Philippines and United States shall assist each other in the arrest of United States personnel in the Philippines and in handling them over to authorities who are to exercise jurisdiction in accordance with the provisions of this article. 5. United States military authorities shall promptly notify Philippine authorities of the arrest or detention of United States personnel who are subject of Philippine primary or exclusive jurisdiction. Philippine authorities shall promptly notify United States military authorities of the arrest or detention of any United States personnel. 6. The custody of any United States personnel over whom the Philippines is to exercise jurisdiction shall immediately reside with United States military authorities, if they so request, from the commission of the offense until completion of all judicial proceedings. United States military authorities shall, upon formal notification by the Philippine authorities and without

delay, make such personnel available to those authorities in time for any investigative or judicial proceedings relating to the offense with which the person has been charged in extraordinary cases, the Philippine Government shall present its position to the United States Government regarding custody, which the United States Government shall take into full account. In the event Philippine judicial proceedings are not completed within one year, the United States shall be relieved of any obligations under this paragraph. The one-year period will not include the time necessary to appeal. Also, the one-year period will not include any time during which scheduled trial procedures are delayed because United States authorities, after timely notification by Philippine authorities to arrange for the presence of the accused, fail to do so. 7. Within the scope of their legal authority, United States and Philippine authorities shall assist each other in the carrying out of all necessary investigation into offenses and shall cooperate in providing for the attendance of witnesses and in the collection and production of evidence, including seizure and, in proper cases, the delivery of objects connected with an offense. 8. When United States personnel have been tried in accordance with the provisions of this Article and have been acquitted or have been convicted and are serving, or have served their sentence, or have had their sentence remitted or suspended, or have been pardoned, they may not be tried again for the same offense in the Philippines. Nothing in this paragraph, however, shall prevent United States military authorities from trying United States personnel for any violation of rules of discipline arising from the act or omission which constituted an offense for which they were tried by Philippine authorities. 9. When United States personnel are detained, taken into custody, or prosecuted by Philippine authorities, they shall be accorded all procedural safeguards established by the law of the Philippines. At the minimum, United States personnel shall be entitled: (a) To a prompt and speedy trial; (b) To be informed in advance of trial of the specific charge or charges made against them and to have reasonable time to prepare a defense; (c) To be confronted with witnesses against them and to cross examine such witnesses; (d) To present evidence in their defense and to have compulsory process for obtaining witnesses; (e) To have free and assisted legal representation of their own choice on the same basis as nationals of the Philippines; (f) To have the service of a competent interpreter; and (g) To communicate promptly with and to be visited regularly by United States authorities, and to have such authorities present at all judicial proceedings. These proceedings shall be public unless the court, in accordance with Philippine laws, excludes persons who have no role in the proceedings. 10. The confinement or detention by Philippine authorities of United States personnel shall be carried out in facilities agreed on by appropriate Philippine and United States authorities. United States Personnel serving sentences in the Philippines shall have the right to visits and material assistance. 11. United States personnel shall be subject to trial only in Philippine courts of ordinary jurisdiction, and shall not be subject to the jurisdiction of Philippine military or religious courts. Article VI

Claims 1. Except for contractual arrangements, including United States foreign military sales letters of offer and acceptance and leases of military equipment, both governments waive any and all claims against each other for damage, loss or destruction to property of each others armed forces or for death or injury to their military and civilian personnel arising from activities to which this agreement applies. 2. For claims against the United States, other than contractual claims and those to which paragraph 1 applies, the United States Government, in accordance with United States law regarding foreign claims, will pay just and reasonable compensation in settlement of meritorious claims for damage, loss, personal injury or death, caused by acts or omissions of United States personnel, or otherwise incident to the non-combat activities of the United States forces. Article VII Importation and Exportation 1. United States Government equipment, materials, supplies, and other property imported into or acquired in the Philippines by or on behalf of the United States armed forces in connection with activities to which this agreement applies, shall be free of all Philippine duties, taxes and other similar charges. Title to such property shall remain with the United States, which may remove such property from the Philippines at any time, free from export duties, taxes, and other similar charges. The exemptions provided in this paragraph shall also extend to any duty, tax, or other similar charges which would otherwise be assessed upon such property after importation into, or acquisition within, the Philippines. Such property may be removed from the Philippines, or disposed of therein, provided that disposition of such property in the Philippines to persons or entities not entitled to exemption from applicable taxes and duties shall be subject to payment of such taxes, and duties and prior approval of the Philippine Government. 2. Reasonable quantities of personal baggage, personal effects, and other property for the personal use of United States personnel may be imported into and used in the Philippines free of all duties, taxes and other similar charges during the period of their temporary stay in the Philippines. Transfers to persons or entities in the Philippines not entitled to import privileges may only be made upon prior approval of the appropriate Philippine authorities including payment by the recipient of applicable duties and taxes imposed in accordance with the laws of the Philippines. The exportation of such property and of property acquired in the Philippines by United States personnel shall be free of all Philippine duties, taxes, and other similar charges. Article VIII Movement of Vessels and Aircraft 1. Aircraft operated by or for the United States armed forces may enter the Philippines upon approval of the Government of the Philippines in accordance with procedures stipulated in implementing arrangements. 2. Vessels operated by or for the United States armed forces may enter the Philippines upon approval of the Government of the Philippines. The movement of vessels shall be in accordance with international custom and practice governing such vessels, and such agreed implementing arrangements as necessary. 3. Vehicles, vessels, and aircraft operated by or for the United States armed forces shall not be subject to the payment of landing or port fees, navigation or over flight charges, or tolls or other use charges, including light and harbor dues, while in the Philippines. Aircraft operated by or for the United States armed forces shall observe local air traffic control regulations while in the

Philippines. Vessels owned or operated by the United States solely on United States Government non-commercial service shall not be subject to compulsory pilotage at Philippine ports. Article IX Duration and Termination This agreement shall enter into force on the date on which the parties have notified each other in writing through the diplomatic channel that they have completed their constitutional requirements for entry into force. This agreement shall remain in force until the expiration of 180 days from the date on which either party gives the other party notice in writing that it desires to terminate the agreement.

Via these consolidatedxi[11] petitions for certiorari and prohibition, petitioners - as legislators, non-governmental organizations, citizens and taxpayers - assail the constitutionality of the VFA and impute to herein respondents grave abuse of discretion in ratifying the agreement. We have simplified the issues raised by the petitioners into the following: I Do petitioners have legal standing as concerned citizens, taxpayers, or legislators to question the constitutionality of the VFA? II Is the VFA governed by the provisions of Section 21, Article VII or of Section 25, Article XVIII of the Constitution? III Does the VFA constitute an abdication of Philippine sovereignty? a. Are Philippine courts deprived of their jurisdiction to hear and try offenses committed by US military personnel? b. Is the Supreme Court deprived of its jurisdiction over offenses punishable by reclusion perpetua or higher? IV Does the VFA violate: a. the equal protection clause under Section 1, Article III of the Constitution? b. the Prohibition against nuclear weapons under Article II, Section 8? c. Section 28 (4), Article VI of the Constitution granting the exemption from taxes and duties for the equipment, materials supplies and other properties imported into or acquired in the Philippines by, or on behalf, of the US Armed Forces?
LOCUS STANDI

At the outset, respondents challenge petitioners standing to sue, on the ground that the latter have not shown any interest in the case, and that petitioners failed to substantiate that they have sustained, or will sustain direct injury as a result of the operation of the VFA.xii[12] Petitioners, on the other hand, counter that the validity or invalidity of the VFA is a matter of transcendental importance which justifies their standing.xiii[13]

A party bringing a suit 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 in 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.xiv[14]

In the case before us, petitioners failed to show, to the satisfaction of this Court, that they have sustained, or are in danger of sustaining any direct injury as a result of the enforcement of the VFA. As taxpayers, petitioners have not established that the VFA involves the exercise by Congress of its taxing or spending powers.xv[15] On this point, it bears stressing that a taxpayers suit refers to a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation.xvi[16] Thus, in Bugnay Const. & Development Corp. vs. Laronxvii[17], we held: x x x it is exigent that the taxpayer-plaintiff sufficiently show that he would be benefited or injured by the judgment or entitled to the avails of the suit as a real party in interest. Before he can invoke the power of judicial review, he must specifically prove that he has sufficient interest in preventing the illegal expenditure of money raised by taxation and that he will sustain a direct injury as a result of the enforcement of the questioned statute or contract. It is not sufficient that he has merely a general interest common to all members of the public. Clearly, inasmuch as no public funds raised by taxation are involved in this case, and in the absence of any allegation by petitioners that public funds are being misspent or illegally expended, petitioners, as taxpayers, have no legal standing to assail the legality of the VFA.

Similarly, Representatives Wigberto Taada, Agapito Aquino and Joker Arroyo, as petitionerslegislators, do not possess the requisite locus standi to maintain the present suit. While this Court, in Phil. Constitution Association vs. Hon. Salvador Enriquez,xviii[18] sustained the legal standing of a member of the Senate and the House of Representatives to question the validity of a presidential veto or a condition imposed on an item in an appropriation bull, we cannot, at this instance, similarly uphold petitioners standing as members of Congress, in the absence of a clear showing of any direct injury to their person or to the institution to which they belong. Beyond this, the allegations of impairment of legislative power, such as the delegation of the power of Congress to grant tax exemptions, are more apparent than real. While it may be true that petitioners pointed to provisions of the VFA which allegedly impair their legislative powers, petitioners failed however to sufficiently show that they have in fact suffered direct injury.

In the same vein, petitioner Integrated Bar of the Philippines (IBP) is stripped of standing in these cases. As aptly observed by the Solicitor General, the IBP lacks the legal capacity to bring this suit in the absence of a board resolution from its Board of Governors authorizing its National President to commence the present action.xix[19]

Notwithstanding, in view of the paramount importance and the constitutional significance of the issues raised in the petitions, this Court, in the exercise of its sound discretion, brushes aside the procedural barrier and takes cognizance of the petitions, as we have done in the early Emergency Powers Cases,xx[20] where we had occasion to rule: x x x 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 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). (Underscoring Supplied)

This principle was reiterated in the subsequent cases of Gonzales vs. COMELEC,xxi[21] Daza vs. Singson,xxii[22] and Basco vs. Phil. Amusement and Gaming Corporation,xxiii[23] where we emphatically held: Considering however the importance to the public of the case at bar, and in keeping with the Courts duty, under the 1987 Constitution, to determine whether or not the other branches of the 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. x x x

Again, in the more recent case of Kilosbayan vs. Guingona, Jr.,xxiv[24] thisCourt ruled that in cases of transcendental importance, the Court may relax the standing requirements and allow a suit to prosper even where there is no direct injury to the party claiming the right of judicial review.

Although courts generally avoid having to decide a constitutional question based on the doctrine of separation of powers, which enjoins upon the departments of the government a becoming respect for each others acts,xxv[25] this Court nevertheless resolves to take cognizance of the instant petitions.
APPLICABLE CONSTITUTIONAL PROVISION

One focal point of inquiry in this controversy is the determination of which provision of the Constitution applies, with regard to the exercise by the senate of its constitutional power to concur with the VFA. Petitioners argue that Section 25, Article XVIII is applicable considering that the VFA has for its subject the presence of foreign military troops in the Philippines. Respondents, on the contrary, maintain that Section 21, Article VII should apply inasmuch as the VFA is not a basing arrangement but an agreement which involves merely the temporary visits of United States personnel engaged in joint military exercises. The 1987 Philippine Constitution contains two provisions requiring the concurrence of the Senate on treaties or international agreements. Section 21, Article VII, which herein respondents invoke, reads: No treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the Members of the Senate. Section 25, Article XVIII, provides: After the expiration in 1991 of the Agreement between the Republic of the Philippines and the United States of America concerning Military Bases, foreign military bases, troops, or facilities shall not be allowed in the Philippines except under a treaty duly concurred in by the senate and, when the Congress so requires, ratified by a majority of the votes cast by the people in a national referendum held for that purpose, and recognized as a treaty by the other contracting State. Section 21, Article VII deals with treatise or international agreements in general, in which case, the concurrence of at least two-thirds (2/3) of all the Members of the Senate is required to make the subject treaty, or international agreement, valid and binding on the part of the Philippines. This provision lays down the general rule on treatise or international agreements and applies to any form of treaty with a wide variety of subject matter, such as, but not limited to, extradition or tax treatise or those economic in nature. All treaties or international agreements entered into by the Philippines, regardless of subject matter, coverage, or particular designation or appellation, requires the concurrence of the Senate to be valid and effective. In contrast, Section 25, Article XVIII is a special provision that applies to treaties which involve the presence of foreign military bases, troops or facilities in the Philippines. Under this provision, the concurrence of the Senate is only one of the requisites to render compliance with the constitutional requirements and to consider the agreement binding on the Philippines. Section 25, Article XVIII further requires that foreign military bases, troops, or facilities may be allowed in the Philippines only by virtue of a treaty duly concurred in by the Senate, ratified by a majority of the votes cast in a national referendum held for that purpose if so required by Congress, and recognized as such by the other contracting state. It is our considered view that both constitutional provisions, far from contradicting each other, actually share some common ground. These constitutional provisions both embody phrases in the negative and thus, are deemed prohibitory in mandate and character. In particular, Section 21 opens with the clause No treaty x x x, and Section 25 contains the phrase shall not be allowed. Additionally, in both instances, the concurrence of the Senate is indispensable to render the treaty or international agreement valid and effective.

To our mind, the fact that the President referred the VFA to the Senate under Section 21, Article VII, and that the Senate extended its concurrence under the same provision, is immaterial. For in either case, whether under Section 21, Article VII or Section 25, Article XVIII, the fundamental law is crystalline that the concurrence of the Senate is mandatory to comply with the strict constitutional requirements. On the whole, the VFA is an agreement which defines the treatment of United States troops and personnel visiting the Philippines. It provides for the guidelines to govern such visits of military personnel, and further defines the rights of the United States and the Philippine government in the matter of criminal jurisdiction, movement of vessel and aircraft, importation and exportation of equipment, materials and supplies. Undoubtedly, Section 25, Article XVIII, which specifically deals with treaties involving foreign military bases, troops, or facilities, should apply in the instant case. To a certain extent and in a limited sense, however, the provisions of section 21, Article VII will find applicability with regard to the issue and for the sole purpose of determining the number of votes required to obtain the valid concurrence of the Senate, as will be further discussed hereunder.

It is a finely-imbedded principle in statutory construction that a special provision or law prevails over a general one. Lex specialis derogat generali. Thus, where there is in the same statute a particular enactment and also a general one which, in its most comprehensive sense, would include what is embraced in the former, the particular enactment must be operative, and the general enactment must be taken to affect only such cases within its general language which are not within the provision of the particular enactment.xxvi[26]

In Leveriza vs. Intermediate Appellate Court,xxvii[27] we enunciated: x x x that another basic principle of statutory construction mandates that general legislation must give way to a special legislation on the same subject, and generally be so interpreted as to embrace only cases in which the special provisions are not applicable (Sto. Domingo vs. de los Angeles, 96 SCRA 139), that a specific statute prevails over a general statute (De Jesus vs. People, 120 SCRA 760) and that where two statutes are of equal theoretical application to a particular case, the one designed therefor specially should prevail (Wil Wilhensen Inc. vs. Baluyot, 83 SCRA 38). Moreover, it is specious to argue that Section 25, Article XVIII is inapplicable to mere transient agreements for the reason that there is no permanent placing of structure for the establishment of a military base. On this score, the Constitution makes no distinction between transient and permanent. Certainly, we find nothing in Section 25, Article XVIII that requires foreign troops or facilities to be stationed or placed permanently in the Philippines. It is a rudiment in legal hermenuetics that when no distinction is made by law, the Court should not distinguish- Ubi lex non distinguit nec nos distinguire debemos.

In like manner, we do not subscribe to the argument that Section 25, Article XVIII is not controlling since no foreign military bases, but merely foreign troops and facilities, are involved in the VFA. Notably, a perusal of said constitutional provision reveals that the proscription covers foreign military bases, troops, or facilities. Stated differently, this prohibition is not limited to the entry of troops and facilities without any foreign bases being established. The clause does not refer to foreign military bases, troops, or facilities collectively but treats them as separate and independent subjects. The use of comma and the disjunctive word or clearly signifies disassociation and independence of one thing from the others included in the enumeration,xxviii[28] such that, the provision contemplates three different situations - a military treaty the subject of which could be either (a) foreign bases, (b) foreign troops, or (c) foreign facilities - any of the three standing alone places it under the coverage of Section 25, Article XVIII. To this end, the intention of the framers of the Charter, as manifested during the deliberations of the 1986 Constitutional Commission, is consistent with this interpretation: MR. MAAMBONG. I just want to address a question or two to Commissioner Bernas. This formulation speaks of three things: foreign military bases, troops or facilities. My first question is: If the country does enter into such kind of a treaty, must it cover the threebases, troops or facilities-or could the treaty entered into cover only one or two? FR. BERNAS. Definitely, it can cover only one. Whether it covers only one or it covers three, the requirement will be the same. MR. MAAMBONG. In other words, the Philippine government can enter into a treaty covering not bases but merely troops? FR. BERNAS. Yes. MR. MAAMBONG. I cannot find any reason why the government can enter into a treaty covering only troops.

FR. BERNAS. Why not? Probably if we stretch our imagination a little bit more, we will find some. We just want to cover everything.xxix[29] (Underscoring Supplied) Moreover, military bases established within the territory of another state is no longer viable because of the alternatives offered by new means and weapons of warfare such as nuclear weapons, guided missiles as well as huge sea vessels that can stay afloat in the sea even for months and years without returning to their home country. These military warships are actually used as substitutes for a land-home base not only of military aircraft but also of military personnel and facilities. Besides, vessels are mobile as compared to a land-based military headquarters. At this juncture, we shall then resolve the issue of whether or not the requirements of Section 25 were complied with when the Senate gave its concurrence to the VFA. Section 25, Article XVIII disallows foreign military bases, troops, or facilities in the country, unless the following conditions are sufficiently met, viz: (a) it must be under a treaty; (b) the treaty must be duly concurred in by the Senate and, when so required by congress, ratified by a majority of the votes cast by the people in a national referendum; and (c) recognized as a treaty by the other contracting state. There is no dispute as to the presence of the first two requisites in the case of the VFA. The concurrence handed by the Senate through Resolution No. 18 is in accordance with the provisions of the Constitution, whether under the general requirement in Section 21, Article VII, or the specific mandate mentioned in Section 25, Article XVIII, the provision in the latter article requiring ratification by a majority of the votes cast in a national referendum being unnecessary since Congress has not required it. As to the matter of voting, Section 21, Article VII particularly requires that a treaty or international agreement, to be valid and effective, must be concurred in by at least two-thirds of all the members of the Senate. On the other hand, Section 25, Article XVIII simply provides that the treaty be duly concurred in by the Senate. Applying the foregoing constitutional provisions, a two-thirds vote of all the members of the Senate is clearly required so that the concurrence contemplated by law may be validly obtained and deemed present. While it is true that Section 25, Article XVIII requires, among other things, that the treaty-the VFA, in the instant case-be duly concurred in by the Senate, it is very true however that said provision must be related and viewed in light of the clear mandate embodied in Section 21, Article VII, which in more specific terms, requires that the concurrence of a treaty, or international agreement, be made by a two -thirds vote of all the members of the Senate. Indeed, Section 25, Article XVIII must not be treated in isolation to section 21, Article, VII. As noted, the concurrence requirement under Section 25, Article XVIII must be construed in relation to the provisions of Section 21, Article VII. In a more particular language, the concurrence of the Senate contemplated under Section 25, Article XVIII means that at least twothirds of all the members of the Senate favorably vote to concur with the treaty-the VFA in the instant case.

Under these circumstances, the charter provides that the Senate shall be composed of twenty-four (24) Senators.xxx[30] Without a tinge of doubt, two-thirds (2/3) of this figure, or not less than sixteen (16) members, favorably acting on the proposal is an unquestionable compliance with the requisite number of votes mentioned in Section 21 of Article VII. The fact that there were actually twenty-three (23) incumbent Senators at the time the voting was made,xxxi[31] will not alter in any significant way the circumstance that more than two-thirds of the members of the Senate concurred with the proposed VFA, even if the two-thirds vote requirement is based on this figure of actual members (23). In this regard, the fundamental law is clear that two-thirds of the 24 Senators, or at least 16 favorable votes, suffice so as to render compliance with the strict constitutional mandate of giving concurrence to the subject treaty. Having resolved that the first two requisites prescribed in Section 25, Article XVIII are present, we shall now pass upon and delve on the requirement that the VFA should be recognized as a treaty by the United States of America. Petitioners content that the phrase recognized as a treaty, embodied in section 25, Article XVIII, means that the VFA should have the advice and consent of the United States Senate pursuant to its own constitutional process, and that it should not be considered merely an executive agreement by the United States. In opposition, respondents argue that the letter of United States Ambassador Hubbard stating that the VFA is binding on the United States Government is conclusive, on the point that the VFA is recognized as a treaty by the United States of America. According to respondents, the VFA, to be binding, must only be accepted as a treaty by the United States.

This Court is of the firm view that the phrase recognized as a treaty means that the other contracting party accepts or acknowledges the agreement as a treaty.xxxii[32] To require the other contracting state, the United States of America in this case, to submit the VFA to the United States Senate for concurrence pursuant to its Constitution,xxxiii[33] is to accord strict meaning to the phrase.

Well-entrenched is the principle that the words used in the Constitution are to be given their ordinary meaning except where technical terms are employed, in which case the significance thus attached to them prevails. Its language should be understood in the sense they have in common use.xxxiv[34]

Moreover, it is inconsequential whether the United States treats the VFA only as an executive agreement because, under international law, an executive agreement is as binding as a treaty.xxxv [35] To be sure, as long as the VFA possesses the elements of an agreement under international law, the said agreement is to be taken equally as a treaty.

A treaty, as defined by the Vienna Convention on the Law of Treaties, is an international instrument concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments, and whatever its particular designation.xxxvi[36] There are many other terms used for a treaty or international agreement, some of which are: act, protocol, agreement, compromis d arbitrage, concordat, convention, declaration, exchange of notes, pact, statute, charter and modus vivendi. All writers, from Hugo Grotius onward, have pointed out that the names or titles of international agreements included under the general term treaty have little or no legal significance. Certain terms are useful, but they furnish little more than mere description.xxxvii[37] Article 2(2) of the Vienna Convention provides that the provisions of paragraph 1 regarding the use of terms in the present Convention are without prejudice to the use of those terms, or to the meanings which may be given to them in the internal law of the State.

Thus, in international law, there is no difference between treaties and executive agreements in their binding effect upon states concerned, as long as the negotiating functionaries have remained within their powers.xxxviii[38] International law continues to make no distinction between treaties and executive agreements: they are equally binding obligations upon nations.xxxix[39]

In our jurisdiction, we have recognized the binding effect of executive agreements even without the concurrence of the Senate or Congress. In Commissioner of Customs vs. Eastern Sea Trading,xl[40] we had occasion to pronounce: x x x the right of the Executive to enter into binding agreements without the necessity of subsequent congressional approval has been confirmed by long usage. From the earliest days of our history we have entered into executive agreements covering such subjects as commercial and consular relations, most-favored-nation rights, patent rights, trademark and copyright protection, postal and navigation arrangements and the settlement of claims. The validity of these has never been seriously questioned by our courts. x x x x x x x x x Furthermore, the United States Supreme Court has expressly recognized the validity and constitutionality of executive agreements entered into without Senate approval. (39 Columbia Law Review, pp. 753-754) (See, also, U.S. vs. Curtis Wright Export Corporation, 299 U.S. 304, 81 L. ed. 255; U.S. vs. Belmont, 301 U.S. 324, 81 L. ed. 1134; U.S. vs. Pink, 315 U.S. 203, 86 L. ed. 796; Ozanic vs. U.S. 188 F. 2d. 288; Yale Law Journal, Vol. 15 pp. 1905-1906; California Law Review, Vol. 25, pp. 670-675; Hyde on International Law [revised Edition], Vol. 2, pp. 1405, 1416-1418; willoughby on the U.S. Constitution Law, Vol. I [2d ed.], pp. 537-540; Moore, International Law Digest, Vol. V, pp. 210-218; Hackworth, International Law Digest, Vol. V, pp. 390-407). (Italics Supplied) (Emphasis Ours) The deliberations of the Constitutional Commission which drafted the 1987 Constitution is enlightening and highly-instructive: MR. MAAMBONG. Of course it goes without saying that as far as ratification of the other state is concerned, that is entirely their concern under their own laws.

FR. BERNAS. Yes, but we will accept whatever they say. If they say that we have done everything to make it a treaty, then as far as we are concerned, we will accept it as a treaty.xli[41]

The records reveal that the United States Government, through Ambassador Thomas C. Hubbard, has stated that the United States government has fully committed to living up to the terms of the VFA.xlii[42] For as long as the united States of America accepts or acknowledges the VFA as a treaty, and binds itself further to comply with its obligations under the treaty, there is indeed marked compliance with the mandate of the Constitution. Worth stressing too, is that the ratification, by the President, of the VFA and the concurrence of the Senate should be taken as a clear an unequivocal expression of our nations consent to be bound by said treaty, with the concomitant duty to uphold the obligations and responsibilities embodied thereunder.

Ratification is generally held to be an executive act, undertaken by the head of the state or of the government, as the case may be, through which the formal acceptance of the treaty is proclaimed.xliii[43] A State may provide in its domestic legislation the process of ratification of a treaty. The consent of the State to be bound by a treaty is expressed by ratification when: (a) the treaty provides for such ratification, (b) it is otherwise established that the negotiating States agreed that ratification should be required, (c) the representative of the State has signed the treaty subject to ratification, or (d) the intention of the State to sign the treaty subject to ratification appears from the full powers of its representative, or was expressed during the negotiation.xliv[44]

In our jurisdiction, the power to ratify is vested in the President and not, as commonly believed, in the legislature. The role of the Senate is limited only to giving or withholding its consent, or concurrence, to the ratification.xlv[45]

With the ratification of the VFA, which is equivalent to final acceptance, and with the exchange of notes between the Philippines and the United States of America, it now becomes obligatory and incumbent on our part, under the principles of international law, to be bound by the terms of the agreement. Thus, no less than Section 2, Article II of the Constitution,xlvi[46] declares that the Philippines adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of peace, equality, justice, freedom, cooperation and amity with all nations.

As a member of the family of nations, the Philippines agrees to be bound by generally accepted rules for the conduct of its international relations. While the international obligation devolves upon the state and not upon any particular branch, institution, or individual member of its government, the Philippines is nonetheless responsible for violations committed by any branch or subdivision of its government or any official thereof. As an integral part of the community of nations, we are responsible to assure that our government, Constitution and laws will carry out our international obligation.xlvii[47] Hence, we cannot readily plead the Constitution as a convenient excuse for non-compliance with our obligations, duties and responsibilities under international law.

Beyond this, Article 13 of the Declaration of Rights and Duties of States adopted by the International Law Commission in 1949 provides: Every State has the duty to carry out in good faith its obligations arising from treaties and other sources of international law, and it may not invoke provisions in its constitution or its laws as an excuse for failure to perform this duty.xlviii[48]

Equally important is Article 26 of the convention which provides that Every treaty in force is binding upon the parties to it and must be performed by them in good faith. This is known as the principle of pacta sunt servanda which preserves the sanctity of treaties and have been one of the most fundamental principles of positive international law, supported by the jurisprudence of international tribunals.xlix[49]
NO GRAVE ABUSE OF DISCRETION

In the instant controversy, the President, in effect, is heavily faulted for exercising a power and performing a task conferred upon him by the Constitution-the power to enter into and ratify treaties. Through the expediency of Rule 65 of the Rules of Court, petitioners in these consolidated cases impute grave abuse of discretion on the part of the chief Executive in ratifying the VFA, and referring the same to the Senate pursuant to the provisions of Section 21, Article VII of the Constitution.

On this particular matter, grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or, when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty enjoined or to act at all in contemplation of law.l[50]

By constitutional fiat and by the intrinsic nature of his office, the President, as head of State, is the sole organ and authority in the external affairs of the country. In many ways, the President is the chief architect of the nations foreign policy; his dominance in the field of foreign relations is (then) conceded.li[51] Wielding vast powers an influence, his conduct in the external affairs of the nation, as Jefferson describes, is executive altogether."lii[52]

As regards the power to enter into treaties or international agreements, the Constitution vests the same in the President, subject only to the concurrence of at least two-thirds vote of all the members of the Senate. In this light, the negotiation of the VFA and the subsequent ratification of the agreement are exclusive acts which pertain solely to the President, in the lawful exercise of his vast executive and diplomatic powers granted him no less than by the fundamental law itself. Into the field of negotiation the Senate cannot intrude, and Congress itself is powerless to invade it.liii[53] Consequently, the acts or judgment calls of the President involving the VFA-specifically the acts of ratification and entering into a treaty and those necessary or incidental to the exercise of such principal acts - squarely fall within the sphere of his constitutional powers and thus, may not be validly struck down, much less calibrated by this Court, in the absence of clear showing of grave abuse of power or discretion. It is the Courts considered view that the President, in ratifying the VFA and in submitting the same to the Senate for concurrence, acted within the confines and limits of the powers vested in him by the Constitution. It is of no moment that the President, in the exercise of his wide latitude of discretion and in the honest belief that the VFA falls within the ambit of Section 21, Article VII of the Constitution, referred the VFA to the Senate for concurrence under the aforementioned provision. Certainly, no abuse of discretion, much less a grave, patent and whimsical abuse of judgment, may be imputed to the President in his act of ratifying the VFA and referring the same to the Senate for the purpose of complying with the concurrence requirement embodied in the fundamental law. In doing so, the President merely performed a constitutional task and exercised a prerogative that chiefly pertains to the functions of his office. Even if he erred in submitting the VFA to the Senate for concurrence under the provisions of Section 21 of Article VII, instead of Section 25 of Article XVIII of the Constitution, still, the President may not be faulted or scarred, much less be adjudged guilty of committing an abuse of discretion in some patent, gross, and capricious manner.

For while it is conceded that Article VIII, Section 1, of the Constitution has broadened the scope of judicial inquiry into areas normally left to the political departments to decide, such as those relating to national security, it has not altogether done away with political questions such as those which arise in the field of foreign relations.liv[54] The High Tribunals function, as sanctioned by Article VIII, Section 1, is merely (to) check whether or not the governmental branch or agency has gone beyond the constitutional limits of its jurisdiction, not that it erred or has a different view. In the absence of a showing (of) grave abuse of discretion amounting to lack of jurisdiction, there is no occasion for the Court to exercise its corrective powerIt has no power to look into what it thinks is apparent error.lv[55]

As to the power to concur with treaties, the constitution lodges the same with the Senate alone. Thus, once the Senatelvi[56] performs that power, or exercises its prerogative within the boundaries prescribed by the Constitution, the concurrence cannot, in like manner, be viewed to constitute an abuse of power, much less grave abuse thereof. Corollarily, the Senate, in the exercise of its discretion and acting within the limits of such power, may not be similarly faulted for having simply performed a task conferred and sanctioned by no less than the fundamental law. For the role of the Senate in relation to treaties is essentially legislative in character;lvii[57] the Senate, as an independent body possessed of its own erudite mind, has the prerogative to either accept or reject the proposed agreement, and whatever action it takes in the exercise of its wide latitude of discretion, pertains to the wisdom rather than the legality of the act. In this sense, the Senate partakes a principal, yet delicate, role in keeping the principles of separation of powers and of checks and balances alive and vigilantly ensures that these cherished rudiments remain true to their form in a democratic government such as ours. The Constitution thus animates, through this treaty-concurring power of the Senate, a healthy system of checks and balances indispensable toward our nations pursuit of political maturity and growth. True enough, rudimentary is the principle that matters pertaining to the wisdom of a legislative act are beyond the ambit and province of the courts to inquire. In fine, absent any clear showing of grave abuse of discretion on the part of respondents, this Court- as the final arbiter of legal controversies and staunch sentinel of the rights of the people is then without power to conduct an incursion and meddle with such affairs purely executive and legislative in character and nature. For the Constitution no less, maps out the distinct boundaries and limits the metes and bounds within which each of the three political branches of government may exercise the powers exclusively and essentially conferred to it by law. WHEREFORE, in light of the foregoing disquisitions, the instant petitions are hereby DISMISSED. SO ORDERED. Davide, Jr., C.J., Bellosillo, Kapunan, Quisumbing, Purisima, Pardo, Gonzaga-Reyes, YnaresSantiago, and De Leon, Jr., JJ., concur. Melo, and Vitug, JJ., join the dissent of J. Puno. Puno, J., see dissenting opinion. Mendoza, J., in the result. Panganiban, J., no part due to close personal and former professional relations with a petitioner, Sen. J.R. Salonga.

i[1] Article V. Any such armed attack and all measures taken as a result thereof shall be immediately reported to the Security Council of the United Nations. Such measures shall be terminated when the Security Council has taken the measure necessary to restore and maintain international peace and security.

ii[2] Joint Report of the Senate Committee on Foreign Relation and the Committee on National Defense and Security on the Visiting Forces Agreement.

iii[3] Joint Committee Report.

iv[4] Petition, G.R. No. 138698, Annex B, Rollo, pp. 61-62. INSTRUMENT OF RATIFICATION TO ALL TO WHOM THESE PRESENTS SHALL COME, GREETINGS: KNOW YE, that whereas, the Agreement between the government of the Republic of the Philippines and the Government of the United States of America Regarding the Treatment of the United States Armed Forces Visiting the Philippines, hereinafter referred to as VFA, was signed in Manila on 10 February 1998; WHEREAS, the VFA is essentially a framework to promote bilateral defense cooperation between the Republic of the Philippines and the United States of America and to give substance to the 1951 RP-US Mutual Defense Treaty (RP-US MDT). To fulfill the objectives of the RP-US MDT, it is necessary that regular joint military exercises are conducted between the Republic of the Philippines and the United States of America;

WHEREAS, the VFA seeks to provide a conducive setting for the successful conduct of combined military exercises between the Philippines and the United States armed forces to ensure interoperability of the RP-US MDT; WHEREAS, in particular, the VFA provides the mechanism for regulating the circumstances and conditions under which US armed forces and defense personnel may be present in the Philippines such as the following inter alia: (a) specific requirements to facilitate the admission of United States personnel and their departure from the Philippines in connection with activities covered by the agreement; (b) clear guidelines on the prosecution of offenses committed by any member of the United States armed forces while in the Philippines; (c) precise directive on the importation and exportation of United States Government equipment, materials, supplies and other property imported into or acquired in the Philippines by or on behalf of the United States armed forces in connection with activities covered by the Agreement; and (d) explicit regulations on the entry of United States vessels, aircraft, and vehicles;

WHEREAS, Article IX of the Agreement provides that it shall enter into force on the date on which the Parties have notified each other in writing, through diplomatic channels, that they have completed their constitutional requirements for its entry into force. It shall remain in force until the expiration of 180 days from the date on which either Party gives the other Party written notice to terminate the Agreement. NOW, THEREFORE, be it known that I, JOSEPH EJERCITO ESTRADA, President of the Republic of the Philippines, after having seen and considered the aforementioned Agreement between the Government of the United States of America Regarding the Treatment of the United States Armed Forces Visiting the Philippines, do hereby ratify and confirm the same and each and every Article and Clause thereof. IN TESTIMONY WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the Philippines to be affixed. GIVEN under my hand at the City of Manila, this 5th day of October, in the year of Our Lord one thousand nine hundred and ninety-eight.

v[5] Petition, G.R. No. 138587, Annex C, Rollo, p. 59. The Honorable Senate President and

Member of the Senate Senate of the Philippines Pasay City Gentlemen and Ladies of the Senate: I have the honor to transmit herewith the Instrument of Ratification duly signed by H.E. President Joseph Ejercito Estrada, his message to the Senate and a draft Senate Resolution of Concurrence in connection with the ratification of the AGREEMENT BETWEEN THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA REGARDING THE TREATMENT OF THE UNITED STATES ARMED FORCES VISITING THE PHILIPPINES. With best wishes. Very truly yours, RONALDO B. ZAMORA Executive Secretary

vi[6] Petition, G.R. No. 138698, Annex C.

vii[7] Between January 26 and March 11, 1999, the two Committees jointly held six public hearings-three in Manila and one each in General Santos, Angeles City and Cebu City.

viii[8] Petition , G.R. No. 138570, Annex C, Rollo, pp. 88-95. WHEREAS, the VFA is essentially a framework for promoting the common security interest of the two countries; and for strengthening their bilateral defense partnership under the 1951 RP-US Mutual Defense Treaty; x x x xxx xxx

WHEREAS, the VFA does not give unrestricted access or unhampered movement to US Forces in the Philippines; in fact, it recognizes the Philippine government as the sole authority to approve the conduct of any visit or activity in the country by US Forces, hence the VFA is not a derogation of Philippine sovereignty; WHEREAS, the VFA is not a basing arrangement; neither does it pave way for the restoration of the American bases and facilities in the Philippines, in contravention of the prohibition against foreign bases and permanent stationing of foreign troops under Article XVIII, Section 25 of the 1987 Constitution-because the agreement envisions only temporary visits of US personnel engaged in joint military exercises or other activities as may be approved by the Philippine Government; WHEREAS, the VFA gives Philippine courts primary jurisdiction over offenses that may be committed by US personnel within Philippine territory, with the exception of those incurred solely against the security or property of the Us or solely against the person or property of US personnel, and those committed in the performance of official duty; x x x xxx xxx

WHEREAS, by virtue of Article II of the VFA, the United States commits to respect the laws of the Republic of the Philippines, including the Constitution, which declares in Article II, Section 8 thereof, a policy of freedom from nuclear weapons consistent with the national interest; WHEREAS, the VFA shall serve as the legal mechanism to promote defense cooperation between two countries-enhancing the preparedness of the Armed Forces of the Philippines against external threats; and enabling the Philippines to bolster the stability of the Pacific area in a shared effort with its neighbor-states; WHEREAS, the VFA will enhance our political, economic and security partnership and cooperation with the United States-which has helped promote the development of our country and improved the lives of our people; WHEREAS, in accordance with the powers and functions of Senate as mandated by the Constitution, this Chamber, after holding several public hearings and deliberations, concurs in the Presidents ratification of the VFA, for the following reasons: (1) The Agreement will provide the legal mechanism to promote defense cooperation between the Philippines and the U.S. and thus enhance the tactical, strategic, and technological capabilities of our armed forces; (2) The Agreement will govern the treatment of U.S., military and defense personnel within Philippine territory, while they are engaged in activities covered by the Mutual Defense Treaty and conducted

with the prior approval of the Philippine government; and (3) The Agreement will provide the regulatory mechanism for the circumstances and conditions under which U.S. military forces may visit the Philippines; x x x x x x xxx xxx

WHEREAS, in accordance with Article IX of the VFA, the Philippine government reserves the right to terminate the agreement unilaterally once it no longer redounds to our national interest: Now, therefore, be it Resolved, that the Senate concur, as it hereby concurs, in the Ratification of the Agreement between the Government of the Republic of the Philippines and the United States of America Regarding the Treatment of United States Armed Forces visiting the Philippines. x x x

ix[9] The following voted for concurrence: (1) Senate President Marcelo Fernan, (2) Senate President Pro Tempore Blas Ople, (3) Senator Franklin Drilon, (4) Senator Rodolfo Biazon, (5) Senator Francisco Tatad, (6) Senator Renato Cayetano, (7) Senator Teresa Aquino-Oreta, (8) Senator Robert Barbers, (9) Senator Robert Jaworski, (10) Senator Ramon Magsaysay, Jr., (11) Senator John Osmea, (12) Senator Juan Flavier, (13) Senator Mirriam Defensor-Santiago, (14) Senator Juan Ponce-Enrile, (15) Senator Vicente Sotto III, (16) Senator Ramon Revilla, (17) Senator Anna Dominique Coseteng, and (18) Senator Gregorio Honasan. Only the following voted to reject the ratification of the VFA: (1) Senator Teofisto Guingona, Jr., (2) Senator Raul Roco, (3) Senator Sergio Osmena III, (4) Senator Aquilino Pimentel, Jr., and (5) Senator Loren Legarda-Leviste.

x[10] See Petition, G.R. No. 138570, Rollo, pp. 105.

xi[11] Minute Resolution dated June 8, 1999.

xii[12] See Consolidated Comment.

xiii[13] Reply to Consolidated Comment, G.R. No. 138698; G.R. No. 138587.

xiv[14] Valmonte vs. Philippine Charity Sweepstakes Office, (Res.) G.R. No. 78716, September 22, 1987, cited in Telecommunications and Broadcast Attorneys of the Philippines, Inc. vs. COMELEC, 289 SCRA 337, 343 [1998]; Valley Forge College vs. Americans United, 454 US 464, 70 L. Ed. 2d 700 [1982]; Bugnay Const. And Dev. Corp. vs. Laron, 176 SCRA 240, 251-252 [1989]; Tatad vs. Garcia, Jr. 243 SCRA 436, 473 [1995].

xv[15] See Article VI, Sections 24, 25 and 29 of the 1987 Constitution.

xvi[16] Pascual vs. Secretary of Public Works, 110 Phil. 331 [1960]; Maceda vs. Macaraig, 197 SCRA 771 [1991]; Lozada vs. COMELEC, 120 SCRA 337 [1983]; Dumlao vs. COMELEC, 95 SCRA 392 [1980]; Gonzales vs. Marcos, 65 SCRA 624 [1975].

xvii[17] 176 SCRA 240, 251-252 [1989].

xviii[18] 235 SCRA 506 [1994].

xix[19] Consolidated Memorandum, p. 11.

xx[20] Araneta vs. Dinglasan, 84 Phil. 368 [1949]; Iloilo Palay & Corn Planters Association vs. Feliciano, 121 Phil. 358 [1965]; Philippine Constitution Association vs. Gimenez, 122 Phil. 894 [1965].

xxi[21] 21 SCRA 774 [1967].

xxii[22] 180 SCRA 496, 502 [1988] cited in Kilosbayan, Inc. vs. Guingona, Jr., 232 SCRA 110 [1994].

xxiii[23] 197 SCRA 52, 60 [1991].

xxiv[24] 232 SCRA 110 [1994].

xxv[25] J. Santos vs. Northwest Orient Airlines, 210 SCRA 256, 261 [1992].

xxvi[26] Manila Railroad Co. vs. Collector of Customs, 52 Phil. 950.

xxvii[27] 157 SCRA 282 [1988] cited in Republic vs. Sandiganbayan, 173 SCRA 72, 85 [1989].

xxviii[28] Castillo-co v. Barbers, 290 SCRA 717, 723 (1998).

xxix[29] Records of the Constitutional Commission, September 18, 1986 Deliberation, p. 782.

xxx[30] 1987 Constitution, Article VI, Section 2. - the Senate shall be composed of twenty-four Senators who shall be elected at large by the qualified voters of the Philippines, as may be provided by law.

xxxi[31] The 24th member (Gloria Macapagal-Arroyo) of the Senate whose term was to expire in 2001 was elected Vice-President in the 1998 national elections.

xxxii[32] Ballentines Legal Dictionary, 1995.

xxxiii[33] Article 2, Section 2, paragraph 2 of the United States Constitution, speaking of the United States President provides: He shall have power, by and with the advice and consent of the Senate to make treaties, provided two-thirds of the senators present concur.

xxxiv[34] J.M. Tuason & Co., Inc. vs. Land Tenure Association, 31 SCRA 413 [1970].

xxxv[35] Altman Co. vs. United States, 224 US 263 [1942], cited in Coquia and Defensor-Santiago, International Law, 1998 Ed. P. 497.

xxxvi[36] Vienna Convention, Article 2.

xxxvii[37] Gerhard von Glahn, Law among Nations, an Introduction to Public International Law, 4th Ed., p. 480.

xxxviii[38] Hackworth, Digest of International Law, Vol. 5, p. 395, cited in USAFE Veterans Association Inc. vs. Treasurer of the Philippines, 105 Phil. 1030, 1037 [1959].

xxxix[39] Richard J. Erickson, The Making of Executive Agreements by the United States Department of Defense: An agenda for Progress, 13 Boston U. Intl. L.J. 58 [1995], citing Restatement [third] of Foreign Relations Law pt. III, introductory note [1987] and Paul Reuter, Introduction to the Law of Treaties 22 [Jose Mico & Peter Haggemacher trans., 1989] cited in Consolidated Memorandum, p. 32.

xl[40] 3 SCRA 351, 356-357 [1961].

xli[41] 4 Record of the Constitutional Commission 782 [Session of September 18, 1986].

xlii[42] Letter of Ambassador Hubbard to Senator Miriam Defensor-Santiago: Dear Senator Santiago: I am happy to respond to your letter of April 29, concerning the way the US Government views the Philippine-US Visiting Forces Agreement in US legal terms. You raise an important question and I believe this response will help in the Senate deliberations.

As a matter of both US and international law, an international agreement like the Visiting Forces Agreement is legally binding on the US Government, In international legal terms, such an agreement is a treaty. However, as a matter of US domestic law, an agreement like the VFA is an executive agreement, because it does not require the advice and consent of the senate under Article II, section 2 of our Constitution. The Presidents power to conclude the VFA with the Philippines, and other status of forces agreements with the other countries, derives from the Presidents responsibilities for the conduct of foreign relations (Art. II, Sec. 1) and his constitutional powers as Commander in Chief of the Armed Forces. Senate advice and consent is not needed, inter alia, because the VFA and similar agreements neither change US domestic nor require congressional appropriation of funds. It is important to note that only about five percent of the international agreement entered into by the US Governments require Senate advice and consent. However, in terms of the US Governments obligation to adhere to the terms of the VFA, there is no difference between a treaty concurred in by our Senate and an executive agreement. Background information on these points can be found in the Restatement 3rd of the Foreign Relations Law of the United States, Sec. 301, et seq. [1986]. I hope you find this answer helpful. As the Presidents representative to the Government of the Philippines, I can assure you that the United States Government is fully committed to living up to the terms of the VFA. Sincerely yours, THOMAS C. HUBBARD Ambassador

xliii[43] Gerhard von Glahn, Law Among Nations, An Introduction to Public International Law, 4th Ed., p. 486.

xliv[44] Article 14 of the Vienna Convention, cited in Coquia and Defensor-Santiago, Intenational Law, 1998 Ed., pp. 506-507.

xlv[45] Cruz, Isagani, International Law, 1985 Ed., p. 175.

xlvi[46] Sec. 2. The Philippines renounces war as an instrument of national policy, adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with all nations.

xlvii[47] Louis Henkin, Richard C. Pugh, Oscar Schachter, Hans Smit, International Law, Cases and Materials, 2nd Ed American Casebook Series, p. 136.

xlviii[48] Gerhard von Glah, supra, p. 487.

xlix[49] Harris, p. 634 cited in Coquia, International Law, supra, p. 512.

l[50] Cuison vs. CA, 289 SCRA 159 [1998]. See also Jardine vs. NLRC, G.R. No. 119268, Feb 23, 2000 citing Arroyo vs. De Venecia, 277 SCRA 268 [1997].

li[51] Cortes, The Philippine Presidency a study of Executive Power, 2nd Ed., p. 195.

lii[52] Cruz, Phil. Political Law, 1995 Ed., p. 223.

liii[53] United States vs. Curtis Wright Corp., 299 U.S. 304 (1934), per Justice Sutherland.

liv[54] Arroyo vs. De Venecia, 277 SCRA 269 [1997].

lv[55] Co vs. Electoral Tribunal of the House of Representatives, 199 SCRA 692, 701 (1991); Llamas vs. Orbos, 202 SCRA 849, 857 (1991); Lansang vs. Garcia, 42 SCRA at 480-481 [1971].

lvi[56] 1987 Constitution, Article VI, Section 1. - The legislative power shall be vested in the Congress of the Philippines which shall consist of a Senate and a House of Representatives, except to the extent reserved to the people by the provision on initiative and referendum.

lvii[57] See Akehurst, Michael: Modern Introduction to International Law, (London: George Allen and Unwin) 5th ed., p. 45; United States vs. Curtiss-Wright Export Corp., 299 U.S. 304, 319 (1936).

[G.R. No. 151445. April 11, 2002] ARTHUR D. LIM and PAULINO R. ERSANDO, petitioners, vs. HONORABLE EXECUTIVE SECRETARY as alter ego of HER EXCELLENCY GLORIA MACAPAGAL-ARROYO, and HONORABLE ANGELO REYES in his capacity as Secretary of National Defense, respondents.

SANLAKAS and PARTIDO NG MANGGAGAWA, petitioners-intervenors, vs. GLORIA MACAPAGAL-ARROYO, ALBERTO ROMULO, ANGELO REYES, respondents.

DECISION DE LEON, JR., J.: This case involves a petition for certiorari and prohibition as well as a petition-in-intervention, praying that respondents be restrained from proceeding with the so-called Balikatan 02-1 and that after due notice and hearing, that judgment be rendered issuing a permanent writ of injunction and/or prohibition against the deployment of U.S. troops in Basilan and Mindanao for being illegal and in violation of the Constitution. The facts are as follows: Beginning January of this year 2002, personnel from the armed forces of the United States of America started arriving in Mindanao to take part, in conjunction with the Philippine military, in Balikatan 021. These so-called Balikatan exercises are the largest combined training operations involving Filipino and American troops. In theory, they are a simulation of joint military maneuvers pursuant to the Mutual Defense Treaty,[1] a bilateral defense agreement entered into by the Philippines and the United States in 1951. Prior to the year 2002, the last Balikatan was held in 1995. This was due to the paucity of any formal agreement relative to the treatment of United States personnel visiting the Philippines. In the meantime, the respective governments of the two countries agreed to hold joint exercises on a reduced scale. The lack of consensus was eventually cured when the two nations concluded the Visiting Forces Agreement (VFA) in 1999. The entry of American troops into Philippine soil is proximately rooted in the international antiterrorism campaign declared by President George W. Bush in reaction to the tragic events that occurred on September 11, 2001. On that day, three (3) commercial aircrafts were hijacked, flown and smashed into the twin towers of the World Trade Center in New York City and the Pentagon building in Washington, D.C. by terrorists with alleged links to the al-Qaeda (the Base), a Muslim extremist organization headed by the infamous Osama bin Laden. Of no comparable historical parallels, these acts caused billions of dollars worth of destruction of property and incalculable loss of hundreds of lives. On February 1, 2002, petitioners Arthur D. Lim and Paulino P. Ersando filed this petition for certiorari and prohibition, attacking the constitutionality of the joint exercise.[2] They were joined subsequently by SANLAKAS and PARTIDO NG MANGGAGAWA, both party-list organizations, who filed a petition-in-intervention on February 11, 2002. Lim and Ersando filed suit in their capacities as citizens, lawyers and taxpayers. SANLAKAS and PARTIDO, on the other hand, aver that certain members of their organization are residents of Zamboanga and Sulu, and hence will be directly affected by the operations being conducted in Mindanao. They likewise pray for a relaxation on the rules relative to locus standi citing the unprecedented importance of the issue involved. On February 7, 2002 the Senate conducted a hearing on the Balikatan exercise wherein VicePresident Teofisto T. Guingona, Jr., who is concurrently Secretary of Foreign Affairs, presented the Draft Terms of Reference (TOR).[3] Five days later, he approved the TOR, which we quote hereunder: I. POLICY LEVEL 1. The Exercise shall be Consistent with the Philippine Constitution and all its activities shall be in consonance with the laws of the land and the provisions of the RP-US Visiting Forces Agreement (VFA). 2. The conduct of this training Exercise is in accordance with pertinent United Nations resolutions against global terrorism as understood by the respective parties. 3. No permanent US basing and support facilities shall be established. Temporary structures such as those for troop billeting, classroom instruction and messing may be set up for use by RP and US

Forces during the Exercise. 4. The Exercise shall be implemented jointly by RP and US Exercise Co-Directors under the authority of the Chief of Staff, AFP. In no instance will US Forces operate independently during field training exercises (FTX). AFP and US Unit Commanders will retain command over their respective forces under the overall authority of the Exercise Co-Directors. RP and US participants shall comply with operational instructions of the APP during the FTX. 5. The exercise shall be conducted and completed within a period of not more than six months, with the projected participation of 660 US personnel and 3,800 RP Forces. The Chief of Staff, AFP shall direct the Exercise Co-Directors to wind up and terminate the Exercise and other activities within the six month Exercise period. 6. The Exercise is a mutual counter-terrorism advising, assisting and training Exercise relative to Philippine efforts against the ASG, and will be conducted on the Island of Basilan. Further advising, assisting and training exercises shall be conducted in Malagutay and the Zamboanga area. Related activities in Cebu will be for support of the Exercise. 7. Only 160 US Forces organized in 12-man Special Forces Teams shall be deployed with AFP field commanders. The US teams shall remain at the Battalion Headquarters and, when approved, Company Tactical headquarters where they can observe and assess the performance of the APP Forces. 8. US exercise participants shall not engage in combat, without prejudice to their right of selfdefense. 9. These terms of Reference are for purposes of this Exercise only and do not create additional legal obligations between the US Government and the Republic of the Philippines. II. EXERCISE LEVEL 1. TRAINING a. The Exercise shall involve the conduct of mutual military assisting, advising and training of RP and US Forces with the primary objective of enhancing the operational capabilities of both forces to combat terrorism. b. At no time shall US Forces operate independently within RP territory. c. Flight plans of all aircraft involved in the exercise will comply with the local air traffic regulations. 2. ADMINISTRATION & LOGISTICS a. RP and US participants shall be given a country and area briefing at the start of the Exercise. This briefing shall acquaint US Forces on the culture and sensitivities of the Filipinos and the provisions of the VFA. The briefing shall also promote the full cooperation on the part of the RP and US participants for the successful conduct of the Exercise. b. RP and US participating forces may share, in accordance with their respective laws and regulations, in the use of their resources, equipment and other assets. They will use their respective logistics channels. c. Medical evaluation shall be jointly planned and executed utilizing RP and US assets and resources. d. Legal liaison officers from each respective party shall be appointed by the Exercise Directors. 3. PUBLIC AFFAIRS a. Combined RP-US Information Bureaus shall be established at the Exercise Directorate in Zamboanga City and at GHQ, AFP in Camp Aguinaldo, Quezon City. b. Local media relations will be the concern of the AFP and all public affairs guidelines shall be jointly developed by RP and US Forces.

c. Socio-Economic Assistance Projects shall be planned and executed jointly by RP and US Forces in accordance with their respective laws and regulations, and in consultation with community and local government officials. Contemporaneously, Assistant Secretary for American Affairs Minerva Jean A. Falcon and United States Charge d Affaires Robert Fitts signed the Agreed Minutes of the discussion between the VicePresident and Assistant Secretary Kelly.[4] Petitioners Lim and Ersando present the following arguments: I THE PHILIPPINES AND THE UNITED STATES SIGNED THE MUTUAL DEFENSE TREATY (MDT) in 1951 TO PROVIDE MUTUAL MILITARY ASSISTANCE IN ACCORDANCE WITH THE CONSTITUTIONAL PROCESSES OF EACH COUNTRY ONLY IN THE CASE OF AN ARMED ATTACK BY AN EXTERNAL AGGRESSOR, MEANING A THIRD COUNTRY AGAINST ONE OF THEM. BY NO STRETCH OF THE IMAGINATION CAN IT BE SAID THAT THE ABU SAYYAF BANDITS IN BASILAN CONSTITUTE AN EXTERNAL ARMED FORCE THAT HAS SUBJECT THE PHILIPPINES TO AN ARMED EXTERNAL ATTACK TO WARRANT U.S. MILITARY ASSISTANCE UNDER THE MDT OF 1951. II NEITHER DOES THE VFA OF 1999 AUTHORIZE AMERICAN SOLDIERS TO ENGAGE IN COMBAT OPERATIONS IN PHILIPPINE TERRITORY, NOT EVEN TO FIRE BACK IF FIRED UPON. Substantially the same points are advanced by petitioners SANLAKAS and PARTIDO. In his Comment, the Solicitor General points to infirmities in the petitions regarding, inter alia, Lim and Ersandos standing to file suit, the prematurity of the action, as well as the impropriety of availing of certiorari to ascertain a question of fact. Anent their locus standi, the Solicitor General argues that first, they may not file suit in their capacities as taxpayers inasmuch as it has not been shown that Balikatan 02-1 involves the exercise of Congress taxing or spending powers. Second, their being lawyers does not invest them with sufficient personality to initiate the case, citing our ruling in Integrated Bar of the Philippines v. Zamora.[5] Third, Lim and Ersando have failed to demonstrate the requisite showing of direct personal injury. We agree. It is also contended that the petitioners are indulging in speculation. The Solicitor General is of the view that since the Terms of Reference are clear as to the extent and duration of Balikatan 02-1, the issues raised by petitioners are premature, as they are based only on a fear of future violation of the Terms of Reference. Even petitioners resort to a special civil action for certiorari is assailed on the ground that the writ may only issue on the basis of established facts. Apart from these threshold issues, the Solicitor General claims that there is actually no question of constitutionality involved. The true object of the instant suit, it is said, is to obtain an interpretation of the VFA. The Solicitor General asks that we accord due deference to the executive determination that Balikatan 02-1 is covered by the VFA, considering the Presidents monopoly in the field of foreign relations and her role as commander-in-chief of the Philippine armed forces. Given the primordial importance of the issue involved, it will suffice to reiterate our view on this point in a related case: Notwithstanding, in view of the paramount importance and the constitutional significance of the issues raised in the petitions, this Court, in the exercise of its sound discretion, brushes aside the procedural barrier and takes cognizance of the petitions, as we have done in the early Emergency Powers Cases, where we had occasion to rule:

x x x 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 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. [citation omitted] This principle was reiterated in the subsequent cases of Gonzales vs. COMELEC, Daza vs. Singson, and Basco vs. Phil. Amusement and Gaming Corporation, where we emphatically held: Considering however the importance to the public of the case at bar, and in keeping with the Courts duty, under the 1987 Constitution, to determine whether or not the other branches of the government have kept themselves within the limits of the Constitution and the laws 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. xxx Again, in the more recent case of Kilosbayan vs. Guingona, Jr., this Court ruled that in cases of transcendental importance, the court may relax the standing requirements and allow a suit to prosper even where there is no direct injury to the party claiming the right of judicial review. Although courts generally avoid having to decide a constitutional question based on the doctrine of separation of powers, which enjoins upon the departments of the government a becoming respect for each others acts, this Court nevertheless resolves to take cognizance of the instant petitions.[6] Hence, we treat with similar dispatch the general objection to the supposed prematurity of the action. At any rate, petitioners' concerns on the lack of any specific regulation on the latitude of activity US personnel may undertake and the duration of their stay has been addressed in the Terms of Reference. The holding of Balikatan 02-1 must be studied in the framework of the treaty antecedents to which the Philippines bound itself. The first of these is the Mutual Defense Treaty (MDT, for brevity). The MDT has been described as the core of the defense relationship between the Philippines and its traditional ally, the United States. Its aim is to enhance the strategic and technological capabilities of our armed forces through joint training with its American counterparts; the Balikatan is the largest such training exercise directly supporting the MDTs objectives. It is this treaty to which the VFA adverts and the obligations thereunder which it seeks to reaffirm. The lapse of the US-Philippine Bases Agreement in 1992 and the decision not to renew it created a vacuum in US-Philippine defense relations, that is, until it was replaced by the Visiting Forces Agreement. It should be recalled that on October 10, 2000, by a vote of eleven to three, this court upheld the validity of the VFA.[7] The VFA provides the regulatory mechanism by which United States military and civilian personnel [may visit] temporarily in the Philippines in connection with activities approved by the Philippine Government. It contains provisions relative to entry and departure of American personnel, driving and vehicle registration, criminal jurisdiction, claims, importation and exportation, movement of vessels and aircraft, as well as the duration of the agreement and its termination. It is the VFA which gives continued relevance to the MDT despite the passage of years. Its primary goal is to facilitate the promotion of optimal cooperation between American and Philippine military forces in the event of an attack by a common foe. The first question that should be addressed is whether Balikatan 02-1 is covered by the Visiting Forces Agreement. To resolve this, it is necessary to refer to the VFA itself. Not much help can be had therefrom, unfortunately, since the terminology employed is itself the source of the problem. The VFA permits United States personnel to engage, on an impermanent basis, in activities, the exact meaning of which was left undefined. The expression is ambiguous, permitting a wide scope of undertakings subject only to the approval of the Philippine government.[8] The sole encumbrance placed on its

definition is couched in the negative, in that United States personnel must abstain from any activity inconsistent with the spirit of this agreement, and in particular, from any political activity.[9] All other activities, in other words, are fair game. We are not left completely unaided, however. The Vienna Convention on the Law of Treaties, which contains provisos governing interpretations of international agreements, state: SECTION 3. INTERPRETATION OF TREATIES Article 31 General rule of interpretation 1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. 2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes: (a) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty; (b) any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the party. 3. There shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relations between the parties. 4. A special meaning shall be given to a term if it is established that the parties so intended. Article 32 Supplementary means of interpretation Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable. It is clear from the foregoing that the cardinal rule of interpretation must involve an examination of the text, which is presumed to verbalize the parties intentions. The Convention likewise dictates what may be used as aids to deduce the meaning of terms, which it refers to as the context of the treaty, as well as other elements may be taken into account alongside the aforesaid context. As explained by a writer on the Convention, [t]he Commissions proposals (which were adopted virtually without change by the conference and are now reflected in Articles 31 and 32 of the Convention) were clearly based on the view that the text of a treaty must be presumed to be the authentic expression of the intentions of the parties; the Commission accordingly came down firmly in favour of the view that the starting point of interpretation is the elucidation of the meaning of the text, not an investigation ab initio into the intentions of the parties. This is not to say that the travaux prparatoires of a treaty, or the circumstances of its conclusion, are relegated to a subordinate, and wholly ineffective, role. As Professor Briggs points out, no rigid temporal prohibition on resort to travaux prparatoires of a treaty was intended by the use of the phrase supplementary means of interpretation in what is now Article 32 of the Vienna Convention.

The distinction between the general rule of interpretation and the supplementary means of interpretation is intended rather to ensure that the supplementary means do not constitute an alternative, autonomous method of interpretation divorced from the general rule.[10] The Terms of Reference rightly fall within the context of the VFA. After studied reflection, it appeared farfetched that the ambiguity surrounding the meaning of the word activities arose from accident. In our view, it was deliberately made that way to give both parties a certain leeway in negotiation. In this manner, visiting US forces may sojourn in Philippine territory for purposes other than military. As conceived, the joint exercises may include training on new techniques of patrol and surveillance to protect the nations marine resources, sea search-and-rescue operations to assist vessels in distress, disaster relief operations, civic action projects such as the building of school houses, medical and humanitarian missions, and the like. Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only logical to assume that Balikatan 02-1, a mutual anti-terrorism advising, assisting and training exercise, falls under the umbrella of sanctioned or allowable activities in the context of the agreement. Both the history and intent of the Mutual Defense Treaty and the VFA support the conclusion that combatrelated activities as opposed to combat itself such as the one subject of the instant petition, are indeed authorized. That is not the end of the matter, though. Granted that Balikatan 02-1 is permitted under the terms of the VFA, what may US forces legitimately do in furtherance of their aim to provide advice, assistance and training in the global effort against terrorism? Differently phrased, may American troops actually engage in combat in Philippine territory? The Terms of Reference are explicit enough. Paragraph 8 of section I stipulates that US exercise participants may not engage in combat except in self-defense. We wryly note that this sentiment is admirable in the abstract but difficult in implementation. The target of Balikatan 02-1, the Abu Sayyaf, cannot reasonably be expected to sit idly while the battle is brought to their very doorstep. They cannot be expected to pick and choose their targets for they will not have the luxury of doing so. We state this point if only to signify our awareness that the parties straddle a fine line, observing the honored legal maxim Nemo potest facere per alium quod non potest facere per directum.[11] The indirect violation is actually petitioners worry, that in reality, Balikatan 02-1 is actually a war principally conducted by the United States government, and that the provision on self-defense serves only as camouflage to conceal the true nature of the exercise. A clear pronouncement on this matter thereby becomes crucial. In our considered opinion, neither the MDT nor the VFA allow foreign troops to engage in an offensive war on Philippine territory. We bear in mind the salutary proscription stated in the Charter of the United Nations, to wit: Article 2 The Organization and its Members, in pursuit of the Purposes stated in Article 1, shall act in accordance with the following Principles. xxx xxx xxx xxx 4. All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state, or in any other manner inconsistent with the Purposes of the United Nations. xxx xxx xxx xxx In the same manner, both the Mutual Defense Treaty and the Visiting Forces Agreement, as in all other treaties and international agreements to which the Philippines is a party, must be read in the context of the 1987 Constitution. In particular, the Mutual Defense Treaty was concluded way before the present Charter, though it nevertheless remains in effect as a valid source of international obligation. The present Constitution contains key provisions useful in determining the extent to which foreign military

troops are allowed in Philippine territory. Thus, in the Declaration of Principles and State Policies, it is provided that: xxx xxx xxx xxx SEC. 2. The Philippines renounces war as an instrument of national policy, adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of peace, equality, justice, freedom, cooperation, and amity with all nations. xxx xxx xxx xxx SEC. 7. The State shall pursue an independent foreign policy. In its relations with other states the paramount consideration shall be national sovereignty, territorial integrity, national interest, and the right to self-determination. SEC. 8. The Philippines, consistent with the national interest, adopts and pursues a policy of freedom from nuclear weapons in the country. xxx xxx xxx xxx The Constitution also regulates the foreign relations powers of the Chief Executive when it provides that [n]o treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the members of the Senate.[12] Even more pointedly, the Transitory Provisions state: Sec. 25. After the expiration in 1991 of the Agreement between the Republic of the Philippines and the United States of America concerning Military Bases, foreign military bases, troops or facilities shall not be allowed in the Philippines except under a treaty duly concurred in by the Senate and, when the Congress so requires, ratified by a majority of the votes cast by the people in a national referendum held for that purpose, and recognized as a treaty by the other contracting state. The aforequoted provisions betray a marked antipathy towards foreign military presence in the country, or of foreign influence in general. Hence, foreign troops are allowed entry into the Philippines only by way of direct exception. Conflict arises then between the fundamental law and our obligations arising from international agreements. A rather recent formulation of the relation of international law vis--vis municipal law was expressed in Philip Morris, Inc. v. Court of Appeals,[13] to wit: xxx Withal, the fact that international law has been made part of the law of the land does not by any means imply the primacy of international law over national law in the municipal sphere. Under the doctrine of incorporation as applied in most countries, rules of international law are given a standing equal, not superior, to national legislation. This is not exactly helpful in solving the problem at hand since in trying to find a middle ground, it favors neither one law nor the other, which only leaves the hapless seeker with an unsolved dilemma. Other more traditional approaches may offer valuable insights. From the perspective of public international law, a treaty is favored over municipal law pursuant to the principle of pacta sunt servanda. Hence, [e]very treaty in force is binding upon the parties to it and must be performed by them in good faith.[14] Further, a party to a treaty is not allowed to invoke the provisions of its internal law as justification for its failure to perform a treaty.[15] Our Constitution espouses the opposing view. Witness our jurisdiction as stated in section 5 of Article VIII: The Supreme Court shall have the following powers: xxx xxx xxx xxx (2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may provide, final judgments and order of lower courts in: (A) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in

question. xxx xxx xxx xxx In Ichong v. Hernandez,[16] we ruled that the provisions of a treaty are always subject to qualification or amendment by a subsequent law, or that it is subject to the police power of the State. In Gonzales v. Hechanova,[17] xxx As regards the question whether an international agreement may be invalidated by our courts, suffice it to say that the Constitution of the Philippines has clearly settled it in the affirmative, by providing, in Section 2 of Article VIII thereof, that the Supreme Court may not be deprived of its jurisdiction to review, revise, reverse, modify, or affirm on appeal, certiorari, or writ of error as the law or the rules of court may provide, final judgments and decrees of inferior courts in (1) All cases in which the constitutionality or validity of any treaty, law, ordinance, or executive order or regulation is in question. In other words, our Constitution authorizes the nullification of a treaty, not only when it conflicts with the fundamental law, but, also, when it runs counter to an act of Congress. The foregoing premises leave us no doubt that US forces are prohibited from engaging in an offensive war on Philippine territory. Yet a nagging question remains: are American troops actively engaged in combat alongside Filipino soldiers under the guise of an alleged training and assistance exercise? Contrary to what petitioners would have us do, we cannot take judicial notice of the events transpiring down south,[18] as reported from the saturation coverage of the media. As a rule, we do not take cognizance of newspaper or electronic reports per se, not because of any issue as to their truth, accuracy, or impartiality, but for the simple reason that facts must be established in accordance with the rules of evidence. As a result, we cannot accept, in the absence of concrete proof, petitioners allegation that the Arroyo government is engaged in doublespeak in trying to pass off as a mere training exercise an offensive effort by foreign troops on native soil. The petitions invite us to speculate on what is really happening in Mindanao, to issue, make factual findings on matters well beyond our immediate perception, and this we are understandably loath to do. It is all too apparent that the determination thereof involves basically a question of fact. On this point, we must concur with the Solicitor General that the present subject matter is not a fit topic for a special civil action for certiorari. We have held in too many instances that questions of fact are not entertained in such a remedy. The sole object of the writ is to correct errors of jurisdiction or grave abuse of discretion. The phrase grave abuse of discretion has a precise meaning in law, denoting abuse of discretion too patent and gross as to amount to an evasion of a positive duty, or a virtual refusal to perform the duty enjoined or act in contemplation of law, or where the power is exercised in an arbitrary and despotic manner by reason of passion and personal hostility.[19] In this connection, it will not be amiss to add that the Supreme Court is not a trier of facts.[20] Under the expanded concept of judicial power under the Constitution, courts are charged with the duty 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.[21] From the facts obtaining, we find that the holding of Balikatan 02-1 joint military exercise has not intruded into that penumbra of error that would otherwise call for correction on our part. In other words, respondents in the case at bar have not committed grave abuse of discretion amounting to lack or excess of jurisdiction. WHEREFORE, the petition and the petition-in-intervention are hereby DISMISSED without prejudice to the filing of a new petition sufficient in form and substance in the proper Regional Trial Court. SO ORDERED.

EN BANC
SENATOR AQUILINO PIMENTEL, JR., G.R. No. 158088 REP. ETTA ROSALES, PHILIPPINE COALITION FOR THE ESTABLISHMENT OF THE INTERNATIONAL Present: CRIMINAL COURT, TASK FORCE DETAINEES OF THE PHILIPPINES, Davide, Jr., C.J., FAMILIES OF VICTIMS OF Puno, INVOLUNTARY DISAPPEARANCES, Panganiban, BIANCA HACINTHA R. ROQUE, Quisumbing, HARRISON JACOB R. ROQUE, Ynares-Santiago, AHMED PAGLINAWAN, RON P. SALO, *Sandoval-Gutierrez, LEAVIDES G. DOMINGO, EDGARDO *Carpio, CARLO VISTAN, NOEL VILLAROMAN, Austria-Martinez, CELESTE CEMBRANO, LIZA ABIERA, *Corona, JAIME ARROYO, MARWIL LLASOS, Carpio Morales, CRISTINA ATENDIDO, ISRAFEL Callejo, Sr., FAGELA, and ROMEL BAGARES, Azcuna, Petitioners, Tinga, Chico-Nazario, and - versus Garcia, JJ. OFFICE OF THE EXECUTIVE SECRETARY, represented by Promulgated: HON. ALBERTO ROMULO, and the DEPARTMENT OF FOREIGN AFFAIRS, represented by HON. BLAS OPLE, July 6, 2005 Respondents. x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION
PUNO J.:

This is a petition for mandamus filed by petitioners to compel the Office of the Executive Secretary and the Department of Foreign Affairs to transmit the signed copy of the Rome Statute of the International Criminal Court to the Senate of the Philippines for its concurrence in accordance with Section 21, Article VII of the 1987 Constitution.

The Rome Statute established the International Criminal Court which shall have the power to exercise its jurisdiction over persons for the most serious crimes of international concern xxx and shall be complementary to the national criminal jurisdictions.[1] Its jurisdiction covers the crime of genocide, crimes against humanity, war crimes and the crime of aggression as defined in the Statute.[2] The Statute was opened for signature by all states in Rome on July 17, 1998 and had remained open for signature until December 31, 2000 at the United Nations Headquarters in New York. The Philippines signed the Statute on December 28, 2000 through Charge d Affairs Enrique A. Manalo of the Philippine Mission to the United Nations.[3] Its provisions, however, require that it be subject to ratification, acceptance or approval of the signatory states. [4] Petitioners filed the instant petition to compel the respondents the Office of the Executive Secretary and the Department of Foreign Affairs to transmit the signed text of the treaty to the Senate of the Philippines for ratification.

It is the theory of the petitioners that ratification of a treaty, under both domestic law and international law, is a function of the Senate. Hence, it is the duty of the executive department to transmit the signed copy of the Rome Statute to the Senate to allow it to exercise its discretion with respect to ratification of treaties. Moreover, petitioners submit that the Philippines has a ministerial duty to ratify the Rome Statute under treaty law and customary international law. Petitioners invoke the Vienna Convention on the Law of Treaties enjoining the states to refrain from acts which would defeat the object and purpose of a treaty when they have signed the treaty prior to ratification unless they have made their intention clear not to become parties to the treaty.[5] The Office of the Solicitor General, commenting for the respondents, questioned the standing of the petitioners to file the instant suit. It also contended that the petition at bar violates the rule on hierarchy of courts. On the substantive issue raised by petitioners, respondents argue that the executive department has no duty to transmit the Rome Statute to the Senate for concurrence. A petition for mandamus may be filed when any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station.[6] We have held that to be given due course, a petition for mandamus must have been instituted by a party aggrieved by the alleged inaction of any tribunal, corporation, board or person

which unlawfully excludes said party from the enjoyment of a legal right. The petitioner in every case must therefore be an aggrieved party in the sense that he possesses a clear legal right to be enforced and a direct interest in the duty or act to be performed.[7] The Court will exercise its power of judicial review only if the case is brought before it by a party who has the legal standing to raise the constitutional or legal question. Legal standing means a personal and substantial interest in the case such that the party has sustained or will sustain direct injury as a result of the government act that is being challenged. The term interest is material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest.[8] The petition at bar was filed by Senator Aquilino Pimentel, Jr. who asserts his legal standing to file the suit as member of the Senate; Congresswoman Loretta Ann Rosales, a member of the House of Representatives and Chairperson of its Committee on Human Rights; the Philippine Coalition for the Establishment of the International Criminal Court which is composed of individuals and corporate entities dedicated to the Philippine ratification of the Rome Statute; the Task Force Detainees of the Philippines, a juridical entity with the avowed purpose of promoting the cause of human rights and human rights victims in the country; the Families of Victims of Involuntary Disappearances, a juridical entity duly organized and existing pursuant to Philippine Laws with the avowed purpose of promoting the cause of families and victims of human

rights violations in the country; Bianca Hacintha Roque and Harrison Jacob Roque, aged two (2) and one (1), respectively, at the time of filing of the instant petition, and suing under the doctrine of inter-generational rights enunciated in the case of Oposa vs. Factoran, Jr.;[9] and a group of fifth year working law students from the University of the Philippines College of Law who are suing as taxpayers. The question in standing is whether a party has 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.[10] We find that among the petitioners, only Senator Pimentel has the legal standing to file the instant suit. The other petitioners maintain their standing as advocates and

defenders of human rights, and as citizens of the country. They have not shown, however, that they have sustained or will sustain a direct injury from the non-transmittal of the signed text of the Rome Statute to the Senate. Their contention that they will be deprived of their remedies for the protection and enforcement of their rights does not persuade. The Rome Statute is intended to complement national criminal laws and courts. Sufficient remedies are available under our national laws to protect our citizens against human rights violations and petitioners can always seek redress for any abuse in our domestic courts.

As regards Senator Pimentel, it has been held that to the extent the powers of Congress are impaired, so is the power of each member thereof, since his office confers a right to participate in the exercise of the powers of that institution.[11] Thus, legislators have the standing to maintain inviolate the prerogatives, powers and privileges vested by the Constitution in their office and are allowed to sue to question the validity of any official action which they claim infringes their prerogatives as legislators. The petition at bar invokes the power of the Senate to grant or withhold its concurrence to a treaty entered into by the executive branch, in this case, the Rome Statute. The petition seeks to order the executive branch to transmit the copy of the treaty to the Senate to allow it to exercise such authority. Senator Pimentel, as member of the institution, certainly has the legal standing to assert such authority of the Senate. We now go to the substantive issue. The core issue in this petition for mandamus is whether the Executive Secretary and the Department of Foreign Affairs have a ministerial duty to transmit to the Senate the copy of the Rome Statute signed by a member of the Philippine Mission to the United Nations even without the signature of the President. We rule in the negative. In our system of government, the President, being the head of state, is regarded as the sole organ and authority in external relations and is the countrys sole representative

with foreign nations.[12] As the chief architect of foreign policy, the President acts as the countrys mouthpiece with respect to international affairs. Hence, the President is vested with the authority to deal with foreign states and governments, extend or withhold recognition, maintain diplomatic relations, enter into treaties, and otherwise transact the business of foreign relations.[13] In the realm of treaty-making, the President has the sole authority to negotiate with other states. Nonetheless, while the President has the sole authority to negotiate and enter into treaties, the Constitution provides a limitation to his power by requiring the concurrence of 2/3 of all the members of the Senate for the validity of the treaty entered into by him. Section 21, Article VII of the 1987 Constitution provides that no treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the Members of the Senate. The 1935 and the 1973 Constitution also required the concurrence by the legislature to the treaties entered into by the executive. Section 10 (7), Article VII of the 1935 Constitution provided: Sec. 10. (7) The President shall have the power, with the concurrence of two-thirds of all the Members of the Senate, to make treaties xxx.

Section 14 (1) Article VIII of the 1973 Constitution stated: Sec. 14. (1) Except as otherwise provided in this Constitution, no treaty shall be valid and effective unless concurred in by a majority of all the Members of the Batasang Pambansa.

The participation of the legislative branch in the treaty-making process was deemed essential to provide a check on the executive in the field of foreign relations. [14] By requiring the concurrence of the legislature in the treaties entered into by the President, the Constitution ensures a healthy system of checks and balance necessary in the nations pursuit of political maturity and growth.[15] In filing this petition, the petitioners interpret Section 21, Article VII of the 1987 Constitution to mean that the power to ratify treaties belongs to the Senate. We disagree. Justice Isagani Cruz, in his book on International Law, describes the treatymaking process in this wise: The usual steps in the treaty-making process are: negotiation, signature, ratification, and exchange of the instruments of ratification. The treaty may then be submitted for registration and publication under the U.N. Charter, although this step is not essential to the validity of the agreement as between the parties. Negotiation may be undertaken directly by the head of state but he now usually assigns this task to his authorized representatives. These representatives are provided with credentials known as full powers, which they exhibit to the other negotiators at the start of the formal discussions. It is standard practice for one of the parties to submit a draft of the proposed treaty which, together with the counter-proposals, becomes the basis of the subsequent negotiations. The negotiations may be brief or protracted, depending on the issues involved, and may even collapse in case the parties are unable to come to an agreement on the points under consideration. If and when the negotiators finally decide on the terms of the treaty, the same is opened for signature. This step is primarily intended as a

means of authenticating the instrument and for the purpose of symbolizing the good faith of the parties; but, significantly, it does not indicate the final consent of the state in cases where ratification of the treaty is required. The document is ordinarily signed in accordance with the alternat, that is, each of the several negotiators is allowed to sign first on the copy which he will bring home to his own state. Ratification, which is the next step, is the formal act by which a state confirms and accepts the provisions of a treaty concluded by its representatives. The purpose of ratification is to enable the contracting states to examine the treaty more closely and to give them an opportunity to refuse to be bound by it should they find it inimical to their interests. It is for this reason that most treaties are made subject to the scrutiny and consent of a department of the government other than that which negotiated them. xxx The last step in the treaty-making process is the exchange of the instruments of ratification, which usually also signifies the effectivity of the treaty unless a different date has been agreed upon by the parties. Where ratification is dispensed with and no effectivity clause is embodied in the treaty, the instrument is deemed effective upon its signature.[16] [emphasis supplied] Petitioners arguments equate the signing of the treaty by the Philippine representative with ratification. It should be underscored that the signing of the treaty and the ratification are two separate and distinct steps in the treaty-making process. As earlier discussed, the signature is primarily intended as a means of authenticating the instrument and as a symbol of the good faith of the parties. It is usually performed by the states authorized representative in the diplomatic mission. Ratification, on the other hand, is the formal act by which a state confirms and accepts the provisions of a treaty concluded by its representative. It is generally held to be an executive act, undertaken by

the head of the state or of the government.[17] Thus, Executive Order No. 459 issued by President Fidel V. Ramos on November 25, 1997 provides the guidelines in the negotiation of international agreements and its ratification. It mandates that after the treaty has been signed by the Philippine representative, the same shall be transmitted to the Department of Foreign Affairs. The Department of Foreign Affairs shall then prepare the ratification papers and forward the signed copy of the treaty to the President for ratification. After the President has ratified the treaty, the Department of Foreign Affairs shall submit the same to the Senate for concurrence. Upon receipt of the concurrence of the Senate, the Department of Foreign Affairs shall comply with the provisions of the treaty to render it effective. Section 7 of Executive Order No. 459 reads: Sec. 7. Domestic Requirements for the Entry into Force of a Treaty or an Executive Agreement. The domestic requirements for the entry into force of a treaty or an executive agreement, or any amendment thereto, shall be as follows: A. Executive Agreements.

i. All executive agreements shall be transmitted to the Department of Foreign Affairs after their signing for the preparation of the ratification papers. The transmittal shall include the highlights of the agreements and the benefits which will accrue to the Philippines arising from them. ii. The Department of Foreign Affairs, pursuant to the endorsement by the concerned agency, shall transmit the agreements to the President of the Philippines for his ratification. The original signed instrument of ratification shall then be returned to the

Department of Foreign Affairs for appropriate action. B. Treaties.

i. All treaties, regardless of their designation, shall comply with the requirements provided in subparagraph[s] 1 and 2, item A (Executive Agreements) of this Section. In addition, the Department of Foreign Affairs shall submit the treaties to the Senate of the Philippines for concurrence in the ratification by the President. A certified true copy of the treaties, in such numbers as may be required by the Senate, together with a certified true copy of the ratification instrument, shall accompany the submission of the treaties to the Senate. ii. Upon receipt of the concurrence by the Senate, the Department of Foreign Affairs shall comply with the provision of the treaties in effecting their entry into force.

Petitioners submission that the Philippines is bound under treaty law and international law to ratify the treaty which it has signed is without basis. The signature does not signify the final consent of the state to the treaty. It is the ratification that binds the state to the provisions thereof. In fact, the Rome Statute itself requires that the signature of the representatives of the states be subject to ratification, acceptance or approval of the signatory states. Ratification is the act by which the provisions of a treaty are formally confirmed and approved by a State. By ratifying a treaty signed in its behalf, a state expresses its willingness to be bound by the provisions of such treaty. After the treaty is signed by the states representative, the President, being accountable to the people, is burdened with the responsibility and the duty to carefully study the

contents of the treaty and ensure that they are not inimical to the interest of the state and its people. Thus, the President has the discretion even after the signing of the treaty by the Philippine representative whether or not to ratify the same. The Vienna Convention on the Law of Treaties does not contemplate to defeat or even restrain this power of the head of states. If that were so, the requirement of ratification of treaties would be pointless and futile. It has been held that a state has no legal or even moral duty to ratify a treaty which has been signed by its plenipotentiaries.[18] There is no legal obligation to ratify a treaty, but it goes without saying that the refusal must be based on substantial grounds and not on superficial or whimsical reasons. Otherwise, the other state would be justified in taking offense.[19] It should be emphasized that under our Constitution, the power to ratify is vested in the President, subject to the concurrence of the Senate. The role of the Senate, however, is limited only to giving or withholding its consent, or concurrence, to the ratification.[20] Hence, it is within the authority of the President to refuse to submit a treaty to the Senate or, having secured its consent for its ratification, refuse to ratify it. [21] Although the refusal of a state to ratify a treaty which has been signed in its behalf is a serious step that should not be taken lightly,[22] such decision is within the competence of the President alone, which cannot be encroached by this Court via a writ of mandamus. This Court has no jurisdiction over actions seeking to enjoin the President in the performance of his official duties.[23] The Court, therefore, cannot

issue the writ of mandamus prayed for by the petitioners as it is beyond its jurisdiction to compel the executive branch of the government to transmit the signed text of Rome Statute to the Senate. IN VIEW WHEREOF, the petition is DISMISSED. SO ORDERED.

EN BANC
SPOUSES RENATO CONSTANTINO, JR. and LOURDES CONSTANTINO and their minor children RENATO REDENTOR, ANNA MARIKA LISSA, NINA ELISSA, and ANNA KARMINA, FREEDOM FROM DEBT COALITION, and FILOMENO STA. ANA III, Petitioners , G.R. No. 106064 Present: DAVIDE, JR., CJ., PUNO, PANGANIBAN, QUISUMBING, YNARES-SANTIAGO, SANDOVAL-GUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO-MORALES, CALLEJO, SR., AZCUNA, TINGA, CHICO-NAZARIO, and GARCIA, JJ.

- versus -

HON. JOSE B. CUISIA, in his capacity as Governor of the Central Bank, HON. RAMON DEL ROSARIO, in his capacity as Secretary of Finance, HON. EMMANUEL V. PELAEZ, in his capacity as Philippine Debt Negotiating Chairman, and the NATIONAL Promulgated:

TREASURER, Respondents.

October 13, 2005

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DECISION
TINGA, J.:
The quagmire that is the foreign debt problem has especially confounded developing nations around the world for decades. It has defied easy solutions acceptable both to debtor countries and their creditors. It has also emerged as cause celebre for various political movements and grassroots activists and the wellspring of much scholarly thought and debate.

The present petition illustrates some of the ideological and functional differences between experts on how to achieve debt relief. However, this being a court of law, not an academic forum or a convention on development economics, our resolution has to hinge on the presented legal issues which center on the appreciation of the constitutional provision that empowers the President to contract and guarantee foreign loans. The ultimate choice is between a restrictive reading of the constitutional provision and an alimentative application thereof consistent with time-honored principles on executive power and the alter ego doctrine. This Petition for Certiorari, Prohibition and Mandamus assails said contracts which were entered into pursuant to the Philippine Comprehensive Financing Program for 1992 (Financing Program or Program). It seeks to enjoin respondents from executing additional debt-relief contracts pursuant thereto. It also urges the Court to issue an order compelling the Secretary of Justice to institute criminal and administrative cases against respondents for acts which circumvent or negate the provisions Art. XII of the Constitution.[1]

Parties and Facts

The petition was filed on 17 July 1992 by petitioners spouses Renato Constantino, Jr. and Lourdes Constantino and their minor children, Renato Redentor, Anna Marika Lissa, Nina Elissa, and

Anna Karmina, Filomeno Sta. Ana III, and the Freedom from Debt Coalition, a non-stock, non-profit, non-government organization that advocates a pro-people and just Philippine debt policy.[2] Named respondents were the then Governor of the Bangko Sentral ng Pilipinas, the Secretary of Finance, the National Treasurer, and the Philippine Debt Negotiation Chairman Emmanuel V. Pelaez.[3] All respondents were members of the Philippine panel tasked to negotiate with the countrys foreign creditors pursuant to the Financing Program.

The operative facts are sparse and there is little need to elaborate on them. The Financing Program was the culmination of efforts that began during the term of former President Corazon Aquino to manage the countrys external debt problem through a negotiationoriented debt strategy involving cooperation and negotiation with foreign creditors.[4] Pursuant to this strategy, the Aquino government entered into three restructuring agreements with representatives of foreign creditor governments during the period of 1986 to 1991.[5] During the same period, three similarly-oriented restructuring agreements were executed with commercial bank creditors.[6] On 28 February 1992, the Philippine Debt Negotiating Team, chaired by respondent Pelaez, negotiated an agreement with the countrys Bank Advisory Committee, representing all foreign commercial bank creditors, on the Financing Program which respondents characterized as a multioption financing

package.[7] The Program was scheduled to be executed on 24 July 1992 by respondents in behalf of the Republic. Nonetheless, petitioners alleged that even prior to the execution of the Program respondents had already implemented its buyback component when on 15 May 1992, the Philippines bought back P1.26 billion of external debts pursuant to the Program.[8] The petition sought to enjoin the ratification of the Program, but the Court did not issue any injunctive relief. Hence, it came to pass that the Program was signed in London as scheduled. The petition still has to be resolved though as petitioners seek the annulment of

any and all acts done by respondents, their subordinates and any other public officer pursuant to the agreement and program in question.[9] Even after the signing of the Program, respondents themselves acknowledged that the remaining principal objective of the petition is to set aside respondents actions.[10] Petitioners characterize the Financing Program as a package offered to the countrys foreign creditors consisting of two debt-relief options.[11] The first option was a cash buyback of portions of the Philippine foreign debt at a discount.[12] The second option allowed creditors to convert existing Philippine debt instruments into any of three kinds of bonds/securities: (1) new money bonds with a five-year grace period and 17 years final maturity, the purchase of which would allow the creditors to convert their eligible debt papers into bearer bonds with the same terms; (2) interest-reduction bonds with a maturity of 25 years; and (3) principal-collateralized interest-reduction bonds with a maturity of 25 years.[13]

On the other hand, according to respondents the Financing Program would cover about U.S. $5.3 billion of foreign commercial debts and it was expected to deal comprehensively with the commercial bank debt problem of the country and pave the way for the countrys access to capital markets.[14] They add that the Program carried three basic options from which foreign bank lenders could choose, namely: to lend money, to exchange existing restructured Philippine debts with an interest reduction bond; or to exchange the same Philippine debts with a principal collateralized interest reduction bond.

[15]
Issues for Resolution Petitioners raise several issues before this Court. First, they object to the debt-relief contracts entered into pursuant to the Financing Program as beyond the powers granted to the President under Section 20, Article VII of the Constitution.[16] The provision states that the President may contract or guarantee foreign loans in behalf of the Republic. It is claimed that the buyback and securitization/bond conversion schemes are neither loans nor guarantees, and hence beyond the power of the President

to execute.

Second, according to petitioners even assuming that the contracts under the Financing Program are constitutionally permissible, yet it is only the President who may exercise the power to enter into these contracts and such power may not be delegated to respondents.

Third, petitioners argue that the Financing Program violates several constitutional policies and that contracts executed or to be executed pursuant thereto were or will be done by respondents with grave abuse of discretion amounting to lack or excess of jurisdiction.

Petitioners contend that the Financing Program was made available for debts that were either fraudulently contracted or void. In this regard, petitioners rely on a 1992 Commission on Audit (COA) report which identified several behest loans as either contracted or guaranteed fraudulently during the Marcos regime.[17] They posit that since these and other similar debts, such as the ones pertaining to the Bataan Nuclear Power Plant,[18] were eligible for buyback or conversion under the Program, the resultant relief agreements pertaining thereto would be void for being waivers of the Republics right to repudiate the void or fraudulently contracted loans. For their part, respondents dispute the points raised by petitioners. They also question the standing of petitioners to institute the present petition and the justiciability of the issues presented. The Court shall tackle the procedural questions ahead of the substantive issues.

The Courts Rulings Standing of Petitioners

The individual petitioners are suing as citizens of the Philippines; those among them who are of age are suing in their additional capacity as taxpayers.[19] It is not indicated in what capacity the Freedom from Debt Coalition is suing.

Respondents point out that petitioners have no standing to file the present suit since the rule allowing taxpayers to assail executive or legislative acts has been applied only to cases where the constitutionality of a statute is involved. At the same time, however, they urge this Court to exercise its wide discretion and waive petitioners lack of standing. They invoke the transcendental importance of resolving the validity of the questioned debt-relief contracts and others of similar import. The recent trend on locus standi has veered towards a liberal treatment in taxpayers suits. In Tatad v. Garcia Jr.,[20] this Court reiterated that the prevailing doctrines in taxpayers suits are to allow taxpayers to question contracts entered into by the national government or government owned and controlled corporations allegedly in contravention of law.[21] A taxpayer is allowed to sue where there is a claim that public funds are illegally disbursed, or that public money is being deflected to any improper purpose, or that there is a wastage of public funds through the enforcement of an invalid or unconstitutional law.[22] Moreover, a ruling on the issues of this case will not only determine the validity or invalidity of the subject pre-termination and bond-conversion of foreign debts but also create a precedent for other debts or debt-related contracts executed or to be executed in behalf of the President of the Philippines by the Secretary of Finance. Considering the reported Philippine debt of P3.80 trillion as of November 2004, the foreign public borrowing component of which reached P1.81 trillion in November, equivalent to 47.6% of total government borrowings,[23] the importance of the issues raised and the magnitude of the public interest involved are indubitable. Thus, the Courts cognizance of this petition is also based on the consideration that the determination of the issues presented will have a bearing on the state of the countrys economy, its international financial ratings, and perhaps even the Filipinos way of life. Seen in this light, the transcendental importance of the issues herein presented cannot be doubted.

Where constitutional issues are properly raised in the context of alleged facts, procedural questions acquire a relatively minor significance.[24] We thus hold that by the very nature of the power wielded by the President, the effect of using this power on the economy, and the well-being in general of the Filipino nation, the Court must set aside the procedural barrier of standing and rule on

the justiciable issues presented by the parties.

Ripeness/Actual Case Dimension

Even as respondents concede the transcendental importance of the issues at bar, in their Rejoinder they ask this Court to dismiss the Petition. Allegedly, petitioners arguments are mere attempts at abstraction.[25] Respondents are correct to some degree. Several issues, as shall be discussed in due course, are not ripe for adjudication. The allegation that respondents waived the Philippines right to repudiate void and fraudulently contracted loans by executing the debt-relief agreements is, on many levels, not justiciable.

In the first place, records do not show whether the so-called behest loansor other allegedly void or fraudulently contracted loans for that matterwere subject of the debt-relief contracts entered into under the Financing Program. Moreover, asserting a right to repudiate void or fraudulently contracted loans begs the question of whether indeed particular loans are void or fraudulently contracted. Fraudulently contracted loans are voidable and, as such, valid and enforceable until annulled by the courts. On the other hand, void contracts that have already been fulfilled must be declared void in view of the maxim that no one is allowed to take the law in his own hands.[26] Petitioners theory depends on a prior annulment or declaration of nullity of the pre-existing loans, which thus far have not been submitted to this Court. Additionally, void contracts are unratifiable by their very nature; they are null and void ab initio. Consequently, from the viewpoint of civil law, what petitioners present as the Republics right to repudiate is yet a contingent right, one which cannot be allowed as an anticipatory basis for annulling the debt-relief contracts. Petitioners contention that the debt-relief agreements are tantamount to waivers of the Republics right to repudiate so-called behest loans is without legal foundation.

It may not be amiss to recognize that there are many advocates of the position that the Republic should renege on obligations that are considered as illegitimate. However, should the executive branch unilaterally, and possibly even without prior court determination of the validity or invalidity of these contracts, repudiate or otherwise declare to the international community its resolve not to

recognize a certain set of illegitimate loans, adverse repercussions[27] would come into play. Dr. Felipe Medalla, former Director General of the National Economic Development Authority, has warned, thus:

One way to reduce debt service is to repudiate debts, totally or selectively. Taken to its limit, however, such a strategy would put the Philippines at such odds with too many enemies. Foreign commercial banks by themselves and without the cooperation of creditor governments, especially the United States, may not be in a position to inflict much damage, but concerted sanctions from commercial banks, multilateral financial institutions and creditor governments would affect not only our sources of credit but also our access to markets for our exports and the level of development assistance. . . . [T]he country might face concerted sanctions even if debts were repudiated only selectively. The point that must be stressed is that repudiation is not an attractive alternative if net payments to creditors in the short and medium-run can be reduced through an agreement (as opposed to a unilaterally set ceiling on debt service payments) which provides for both rescheduling of principal and capitalization of interest, or its equivalent in new loans, which would make it easier for the country to pay interest.[28] Sovereign default is not new to the Philippine setting. In October 1983, the Philippines declared a moratorium on principal payments on its external debts that eventually

lasted four years,[29] that virtually closed the countrys access to new foreign money[30] and drove investors to leave the Philippine market, resulting in some devastating consequences.[31] It would appear then that this beguilingly attractive and dangerously simplistic solution deserves the utmost circumspect cogitation before it is resorted to.

In any event, the discretion on the matter lies not with the courts but with the executive. Thus, the Program was conceptualized as an offshoot of the decision made by then

President Aquino that the Philippines should recognize its sovereign debts[32] despite the controversy that engulfed many debts incurred during the Marcos era. It is a scheme whereby the Philippines restructured its debts following a negotiated approach instead of a default approach to manage the bleak Philippine debt situation.

As a final point, petitioners have no real basis to fret over a possible waiver of the right to repudiate void contracts. Even assuming that spurious loans had become the subject of debt-relief contracts, respondents unequivocally assert that the Republic did not waive any right to repudiate void or fraudulently contracted loans, it having incorporated a no-waiver clause in the agreements.[33]

Substantive Issues It is helpful to put the matter in perspective before moving on to the merits. The Financing Program extinguished portions of the countrys pre-existing loans

through either debt buyback or bond-conversion. The buyback approach essentially pre-terminated portions of public debts while the bond-conversion scheme extinguished public debts through the obtention of a new loan by virtue of a sovereign bond issuance, the proceeds of which in turn were used for terminating the original loan. First Issue: The Scope of Section 20, Article VII

For their first constitutional argument, petitioners submit that the buyback and bond-conversion schemes do not constitute the loan contract or guarantee contemplated in the Constitution and are consequently prohibited. Sec. 20, Art. VII of the Constitution provides, viz:

The President may contract or guarantee foreign loans in behalf of the Republic of the Philippines with the prior concurrence of the Monetary Board and subject to such limitations as may be provided under law. The Monetary Board shall, within thirty days from the end of every quarter of the calendar year, submit to the Congress a complete report of its decisions on applications for loans to be contracted or guaranteed by the government or government-owned and controlled corporations which would have the effect of increasing the foreign debt, and containing other matters as may be provided by law.

On Bond-conversion

Loans are transactions wherein the owner of a property allows another party to use the property and where customarily, the latter promises to return the property after a specified period with payment for its use, called interest.[34] On the other hand, bonds are interest-bearing or discounted government or corporate securities that obligate the issuer to pay the bondholder a specified sum of money, usually at specific intervals, and to repay the principal amount of the loan at maturity.[35] The word bond means contract, agreement, or guarantee. All of these terms are applicable to the securities known as bonds. An investor who purchases a bond is lending money to the issuer, and the bond represents the issuers contractual promise to pay interest and repay principal according to specific terms. A short-term bond is often called a note.[36] The language of the Constitution is simple and clear as it is broad. It allows the President to contract and guarantee foreign loans. It makes no prohibition on the issuance of certain kinds of loans or distinctions as to which kinds of debt instruments are more onerous than others. This Court may not ascribe to the Constitution meanings and restrictions that would unduly burden the powers of the President. The plain, clear and unambiguous language of the Constitution should be construed in a sense that will allow the full exercise of the power provided therein. It would be the worst kind of judicial legislation if the courts were to misconstrue and change the meaning of the organic act. The only restriction that the Constitution provides, aside from the prior concurrence of the Monetary Board, is that the loans must be subject to limitations provided by law. In this regard, we note that Republic Act (R.A.) No. 245 as amended by Pres. Decree (P.D.) No. 142, s. 1973, entitled An Act Authorizing the Secretary of Finance to Borrow to Meet Public Expenditures Authorized by Law, and for Other Purposes, allows foreign loans to be contracted in the form of, inter alia, bonds. Thus:

Sec. 1. In order to meet public expenditures authorized by law or to provide for the purchase, redemption, or refunding of any obligations, either direct or guaranteed of the Philippine Government, the Secretary of Finance, with the approval of the President of the Philippines, after consultation with the Monetary Board, is authorized to borrow from time to time on the credit of the Republic of the Philippines such sum or sums as in his judgment may be necessary, and to issue therefor evidences of indebtedness of the Philippine Government." Such evidences of indebtedness may be of the following types: ....

c. Treasury bonds, notes, securities or other evidences of indebtedness having maturities of one year or more but not exceeding twenty-five years from the date of issue. (Emphasis supplied.)

Under the foregoing provisions, sovereign bonds may be issued not only to supplement government expenditures but also to provide for the purchase,[37] redemption,[38] or refunding[39] of any obligation, either direct or guaranteed, of the Philippine Government.

Petitioners, however, point out that a supposed difference between contracting a loan and issuing bonds is that the former creates a definite creditor-debtor relationship between the parties while the latter does not.[40] They explain that a contract of loan enables the debtor to restructure or novate the loan, which benefit is lost upon the conversion of the debts to bearer bonds such that the Philippines surrenders the novatable character of a loan contract for the irrevocable and unpostponable demandability of a bearer bond.[41] Allegedly, the Constitution prohibits the President from issuing bonds which are far more onerous than loans.[42] This line of thinking is flawed to say the least. The negotiable character of the subject bonds is not mutually exclusive with the Republics freedom to negotiate with bondholders for the revision of the terms of the debt. Moreover, the securities market provides some flexibilityif the Philippines wants to pay in advance, it can buy out its bonds in the market; if interest rates go down but the Philippines does not have money to retire the bonds, it can replace the old bonds with new ones; if it defaults on the bonds, the bondholders shall organize and bring about a re-negotiation or settlement.

[43] In fact, several countries have restructured their sovereign bonds in view either of
inability and/or unwillingness to pay the indebtedness.[44] Petitioners have not presented a plausible reason that would preclude the Philippines from acting in a similar fashion, should it so opt.

This theory may even be dismissed in a perfunctory manner since petitioners are merely expecting that the Philippines would opt to restructure the bonds but with the negotiable character of the bonds, would be prevented from so doing. This is a contingency which petitioners do not assert as having come to pass or even imminent. Consummated acts of the executive cannot be struck down by this Court merely on the basis of petitioners anticipatory cavils.

On the Buyback Scheme

In their Comment, petitioners assert that the power to pay public debts lies with Congress and was deliberately

withheld by the Constitution from the President.[45] It is true that in the balance of power between the three branches of government, it is Congress that manages the countrys coffers by virtue of its taxing and spending powers. However, the law-making authority has promulgated a law ordaining an automatic appropriations provision for debt servicing[46] by virtue of which the President is empowered to execute debt payments without the need for further appropriations. Regarding these legislative enactments, this Court has held, viz:

Congress deliberates or acts on the budget proposals of the President, and Congress in the exercise of its own judgment and wisdom formulates an appropriation act precisely following the process established by the Constitution, which specifies that no money may be paid from the Treasury except in accordance with an appropriation made by law. Debt service is not included in the General Appropriation Act, since authorization therefor already exists under RA Nos. 4860 and 245, as amended, and PD 1967. Precisely in the light of this subsisting authorization as embodied in said Republic Acts and PD for debt service, Congress does not concern itself with details for implementation by the Executive, but largely with annual levels and approval thereof upon due deliberations as part of the whole obligation program for the year. Upon such approval, Congress has spoken and cannot be said to have delegated its wisdom to the Executive, on whose part lies the implementation or execution of the legislative wisdom. [47]

Specific legal authority for the buyback of loans is established under Section 2 of Republic Act (R.A.) No. 240, viz:

Sec. 2. The Secretary of Finance shall cause to be paid out of any moneys in the National Treasury not otherwise appropriated, or from any sinking funds provided for the purpose by law, any interest falling due, or accruing, on any portion of the public debt authorized by law. He shall also

cause to be paid out of any such money, or from any such sinking funds the principal amount of any obligations which have matured, or which have been called for redemption or for which redemption has been demanded in accordance with terms prescribed by him prior to date of issue: Provided, however, That he may, if he so chooses and if the holder is willing, exchange any such obligation with any other direct or guaranteed obligation or obligations of the Philippine Government of equivalent value. In the case of interest-bearing obligations, he shall pay not less than their face value; in the case of obligations issued at a discount he shall pay the face value at maturity; or, if redeemed prior to maturity, such portion of the face value as is prescribed by the terms and conditions under which such obligations were originally issued. (Emphasis supplied.) The afore-quoted provisions of law specifically allow the President to pre-terminate debts without further action from Congress.

Petitioners claim that the buyback scheme is neither a guarantee nor a loan since its underlying intent is to extinguish debts that are not yet due and demandable.[48] Thus, they suggest that contracts entered pursuant to the buyback scheme are unconstitutional for not being among those contemplated in Sec. 20, Art. VII of the Constitution. Buyback is a necessary power which springs from the grant of the foreign borrowing power. Every statute is understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its terms.[49] The President is not empowered to borrow money from foreign banks and governments on the credit of the Republic only to be left bereft of authority to implement the payment despite appropriations therefor. Even petitioners concede that [t]he Constitution, as a rule, does not enumeratelet alone enumerate allthe acts which the President (or any other public officer) may not

do,[50] and [t]he fact that the Constitution does not explicitly bar the President from exercising a power does not mean that he or she does not have that power.[51] It is inescapable from the

standpoint of reason and necessity that the authority to contract foreign loans and guarantees without restrictions on payment or manner thereof coupled with the availability of the corresponding appropriations, must include the power to effect payments or to make payments unavailing by either restructuring the loans or even refusing to make any payment altogether. More fundamentally, when taken in the context of sovereign debts, a buyback is simply the purchase by the sovereign issuer of its own debts at a discount. Clearly then, the objection to the validity of the buyback scheme is without basis.

Second Issue: Delegation of Power

Petitioners stress that unlike other powers which may be validly delegated by the President, the power to incur foreign debts is expressly reserved by the Constitution in the person of the President. They argue that the gravity by which the exercise of the power will affect the Filipino nation requires that the President alone must exercise this power. They submit that the requirement of prior concurrence of an entity specifically named by the Constitutionthe Monetary Boardreinforces the submission that not respondents but the President alone and personally can validly bind the country. Petitioners position is negated both by explicit constitutional[52] and legal[53] imprimaturs, as well as the doctrine of qualified political agency. The evident exigency of having the Secretary of Finance implement the decision of the President to execute the debt-relief contracts is made manifest by the fact that the process of establishing and executing a strategy for managing the governments debt is deep within the realm of the expertise of the Department of Finance, primed as it is to raise the required amount of funding, achieve its risk and cost objectives, and meet any other sovereign debt management goals.[54] If, as petitioners would have it, the President were to personally exercise every aspect of the foreign borrowing power, he/she would have to pause from running the country long enough to focus on a welter of time-consuming detailed activitiesthe propriety of incurring/guaranteeing loans, studying and choosing among the many methods that may be taken toward this end, meeting countless times with creditor representatives to negotiate, obtaining the concurrence of the Monetary Board, explaining and defending the negotiated deal to the public, and more often than not, flying to the agreed place of execution to sign the documents. This sort of constitutional interpretation would negate the very existence of cabinet positions and the respective expertise which the holders thereof are accorded and would unduly hamper the Presidents effectivity in running the government.

Necessity thus gave birth to the doctrine of qualified political agency, later adopted in Villena v. Secretary of the Interior[55] from American jurisprudence, viz: With reference to the Executive Department of the government, there is one purpose which is crystal-clear and is readily visible without the projection of judicial searchlight, and that is the establishment of a single, not plural, Executive. The first section of Article VII of the Constitution, dealing with the Executive Department, begins with the enunciation of the principle that "The executive power shall be vested in a President of the Philippines." This means that the President of the Philippines is the Executive of the Government of the Philippines, and no other. The heads of the executive departments occupy political positions and hold office in an advisory capacity, and, in the language of Thomas Jefferson, "should be of the President's bosom confidence" (7 Writings, Ford ed., 498), and, in the language of Attorney-General Cushing (7 Op., Attorney-General, 453), "are subject to the direction of the President." Without minimizing the importance of the heads of the various departments, their personality is in reality but the projection of that of the President. Stated otherwise, and as forcibly characterized by Chief Justice Taft of the Supreme Court of the United States, "each head of a department is, and must be, the President's alter ego in the matters of that department where the President is required by law to exercise authority" (Myers vs. United States, 47 Sup. Ct. Rep., 21 at 30; 272 U. S., 52 at 133; 71 Law. ed., 160).[56] As it was, the backdrop consisted of a major policy determination made by then President Aquino that sovereign debts have to be respected and the concomitant reality that the Philippines did not have enough funds to pay the debts. Inevitably, it fell upon the Secretary of Finance, as the alter ego of the President regarding the sound and efficient management of the financial resources of the Government,[57] to formulate a scheme for the implementation of the policy publicly expressed by the President herself.

Nevertheless, there are powers vested in the President by the Constitution which may not be delegated to or exercised by an agent or alter ego of the President. Justice Laurel, in his ponencia in Villena, makes this clear:

Withal, at first blush, the argument of ratification may seem plausible under the circumstances, it should be observed that there are certain acts which, by their very nature, cannot be validated by subsequent approval or ratification by the President. There are certain constitutional powers and prerogatives of the Chief Executive of the Nation which must be exercised by him in person and no amount of approval or ratification will validate the exercise of any of those powers by any other person. Such, for instance, in his power to suspend the writ of habeas corpus and proclaim martial law

(PAR. 3, SEC. 11, Art. VII) and the exercise by him of the benign prerogative of mercy (par. 6, sec. 11, idem).[58]

These distinctions hold true to this day. There are certain presidential powers which arise out of exceptional circumstances, and if exercised, would involve the suspension of fundamental freedoms, or at least call for the supersedence of executive prerogatives over those exercised by co-equal branches of government. The declaration of martial law, the suspension of the writ of habeas corpus, and the exercise of the pardoning power notwithstanding the judicial determination of guilt of the accused, all fall within this special class that demands the exclusive exercise by the President of the constitutionally vested power. The list is by no means exclusive, but there must be a showing that the executive power in question is of similar gravitas and exceptional import. We cannot conclude that the power of the President to contract or guarantee foreign debts falls within the same exceptional class. Indubitably, the decision to contract or guarantee foreign debts is of vital public interest, but only

akin to any contractual obligation undertaken by the sovereign, which arises not from any extraordinary incident, but from the established functions of governance.

Another important qualification must be made. The Secretary of Finance or any designated alter ego of the President is bound to secure the latters prior consent to or subsequent ratification of his acts. In the matter of contracting or guaranteeing foreign loans, the repudiation by the President of the very acts performed in this regard by the alter ego will definitely have binding effect. Had petitioners herein succeeded in demonstrating that the President actually withheld approval and/or repudiated the Financing Program, there could be a cause of action to nullify the acts of respondents. Notably though, petitioners do not assert that respondents pursued the Program without prior authorization of the President or that the terms of the contract were agreed upon without the Presidents authorization. Congruent with the avowed preference of then President Aquino to honor and restructure existing foreign debts, the lack of showing that she countermanded the acts of respondents leads us to conclude that said acts carried presidential approval.

With constitutional parameters already established, we may also note, as a source of suppletory guidance, the provisions of R.A. No. 245. The afore-quoted Section 1 thereof empowers the Secretary of Finance with the approval of the President and after consultation[59] of the Monetary Board, to borrow from time to time on the credit of the Republic of the Philippines such sum or sums as in his judgment may be necessary, and to issue therefor evidences of indebtedness of the Philippine Government. Ineluctably then, while the President wields the borrowing power it is the Secretary of Finance who normally carries out its thrusts.

In our recent rulings in Southern Cross Cement Corporation v. The Philippine Cement Manufacturers Corp.,[60] this Court had occasion to examine the authority granted by Congress to the Department of Trade and Industry (DTI) Secretary to impose safeguard measures pursuant to the Safeguard Measures Act. In doing so, the Court was impelled to construe Section 28(2), Article VI of the Constitution, which allowed Congress, by law, to authorize the President to fix within specified limits, and subject to such limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts within the framework of the national development program of the Government.[61]

While the Court refused to uphold the broad construction of the grant of power as preferred by the DTI Secretary, it nonetheless tacitly acknowledged that Congress could designate the DTI Secretary, in his capacity as alter ego of the President, to exercise the authority vested on the chief executive under Section 28(2), Article VI.[62] At the same time, the Court emphasized that since Section 28(2), Article VI authorized Congress to impose limitations and restrictions on the authority of the President to impose tariffs and imposts, the DTI Secretary was necessarily subjected to the same restrictions that Congress could impose on the President in the exercise of this taxing power.

Similarly, in the instant case, the Constitution allocates to the President the exercise of the foreign borrowing power subject to such limitations as may be provided under law. Following Southern Cross, but in line with the limitations as defined in Villena, the presidential prerogative may be exercised by the Presidents alter ego, who in this case is the Secretary of Finance.

It bears emphasis that apart from the Constitution, there is also a relevant statute, R.A. No. 245, that establishes the parameters by which the alter ego may act in behalf of the President with respect to the borrowing power. This law expressly provides that the Secretary of Finance may enter into foreign borrowing contracts. This law neither amends nor goes contrary to the Constitution but merely implements the subject provision in a manner consistent with the structure of the Executive Department and the alter ego doctine. In this regard, respondents have declared that they have followed the restrictions provided under R.A. No. 245,[63] which include the requisite presidential authorization and which, in the absence of proof and even allegation to the contrary, should be regarded in a fashion congruent with the presumption of regularity bestowed on acts done by public officials. Moreover, in praying that the acts of the respondents, especially that of the Secretary of Finance, be nullified as being in violation of a restrictive constitutional interpretation, petitioners in effect would have this Court declare R.A. No. 245 unconstitutional. We will not strike down a law or provisions thereof without so much as a direct attack thereon when simple and logical statutory construction would suffice. Petitioners also submit that the unrestricted character of the Financing Program violates the framers intent behind Section 20, Article VII to restrict the power of the President. This intent, petitioners note, is embodied in the proviso in Sec. 20, Art. VII, which states that said power is subject to such limitations as may be provided under law. However, as previously discussed, the debt-relief contracts are governed by the terms of R.A. No. 245, as amended by P.D. No. 142 s. 1973, and therefore were not developed in an unrestricted setting.

Third Issue: Grave Abuse of Discretion and Violation of Constitutional Policies

We treat the remaining issues jointly, for in view of the foregoing determination, the general allegation of grave abuse of discretion on the part of respondents would arise from the purported violation of various state policies as expressed in the Constitution.

Petitioners allege that the Financing Program violates the constitutional state policies to promote a social order that will ensure the prosperity and independence of the nation and free the people from poverty,[64] foster social justice in all phases of national development,[65] and develop a selfreliant and independent national economy effectively controlled by Filipinos;[66] thus, the contracts executed or to be executed pursuant thereto were or would be tainted by a grave abuse of discretion amounting to lack or excess of jurisdiction.

Respondents cite the following in support of the propriety of their acts:[67] (1) a Department of Finance study showing that as a result of the implementation of voluntary debt reductions schemes, the countrys debt stock was reduced by U.S. $4.4 billion as of December 1991;[68] (2) revelations made by independent individuals made in a hearing before the Senate Committee on Economic Affairs indicating that the assailed agreements would bring about substantial benefits to the country;[69] and (3) the Joint Legislative-Executive Foreign Debt Councils endorsement of the approval of the financing package containing the debt-

relief agreements and issuance of a Motion to Urge the Philippine Debt Negotiating Panel to continue with the negotiation on the aforesaid package.[70]

Even with these justifications, respondents aver that their acts are within the arena of political questions which, based on the doctrine of separation of powers,[71] the judiciary must leave without interference lest the courts substitute their judgment for that of the official concerned and decide a matter which by its nature or law is for the latter alone to decide.[72] On the other hand, in furtherance of their argument on respondents violation of constitutional policies, petitioners cite an article of Jude Esguerra, The 1992 Buyback and Securitization Agreement with Philippine Commercial Bank Creditors,[73] in illustrating a best-case scenario in entering the

subject debt-relief agreements. The computation results in a yield of $218.99 million, rather

than the $2,041.00 million claimed by the debt negotiators.[74] On the other hand, the worst-case scenario allegedly is that a net amount of $1.638 million will flow out of the country as a result of the debt package.[75] Assuming the accuracy of the foregoing for the nonce, despite the watered-down parameters of petitioners computations, we can make no conclusion other than that respondents efforts were geared towards debt-relief with marked positive results and towards achieving the constitutional policies which petitioners so hastily declare as having been violated by respondents. We recognize that as with other schemes dependent on volatile market and economic structures, the contracts entered into by respondents may possibly have a net outflow and therefore negative result. However, even petitioners call this latter event the worst-case scenario. Plans are seldom foolproof. To ask the Court to strike down debt-relief contracts, which, according to independent third party evaluations using historicallysuggested rates would result in substantial debt-relief,[76] based merely on the possibility of petitioners worst-case scenario projection, hardly seems reasonable.

Moreover, the policies set by the Constitution as litanized by petitioners are not a panacea that can annul every governmental act sought to be struck down. The gist of petitioners arguments on violation of constitutional policies and grave abuse of discretion boils down to their allegation that the debt-relief agreements entered into by respondents do not deliver the kind of debt-relief that petitioners would want. Petitioners cite the aforementioned article in stating that that the agreement achieves little that cannot be gained through less complicated means like postponing (rescheduling) principal payments,[77] thus:

[T]he price of success in putting together this debt-relief package (indicates) the possibility that a simple rescheduling agreement may well turn out to be less expensive than this comprehensive debt-relief package. This means that in the next six years the humble and simple rescheduling process may well be the lesser evil because there is that distinct possibility that less money will flow out of the country as a result.

Note must be taken that from these citations, petitioners submit that there is possibly a better way to go about debt rescheduling and, on that basis, insist that the acts of respondents must be struck down. These are rather tenuous grounds to condemn the subject agreements as violative of constitutional principles.

Conclusion

The raison d etre of the Financing Program is to manage debts incurred by the Philippines in a manner that will lessen the burden on the Filipino taxpayersthus the term debt-relief agreements. The measures objected to by petitioners were not aimed at incurring more debts but at terminating preexisting debts and were backed by the know-how of the countrys economic managers as affirmed by third party empirical analysis.

That the means employed to achieve the goal of debt-relief do not sit well with petitioners is beyond the power of this Court to remedy. The exercise of the power of judicial review is merely to checknot supplantthe Executive, or to simply ascertain whether he has gone beyond the constitutional limits of his jurisdiction but not to exercise the power vested in him or to determine the wisdom of his act.[78] In cases where the main purpose is to nullify governmental acts whether as unconstitutional or done with grave abuse of discretion, there is a strong presumption in favor of the validity of the assailed acts. The heavy onus is in on petitioners to overcome the presumption of regularity.

We find that petitioners have not sufficiently established any basis for the Court to declare the acts of respondents as unconstitutional.

WHEREFORE the petition is hereby DISMISSED. No costs. SO ORDERED. PLARIDEL M. ABAYA, G.R. No. 167919

COMMODORE PLARIDEL C. GARCIA (retired) and PMA Present: 59 FOUNDATION, INC., rep. by its President, COMMODORE CARLOS L. AGUSTIN YNARES-SANTIAGO, J. (retired), Chairperson, Petitioners, AUSTRIA-MARTINEZ, CALLEJO, SR., and CHICO-NAZARIO, JJ. - versus -

HON. SECRETARY HERMOGENES E. EBDANE, JR., in his capacity as Secretary of the DEPARTMENT OF PUBLIC WORKS and HIGHWAYS, HON. SECRETARY EMILIA T. BONCODIN, in her capacity as Secretary of the DEPARTMENT OF BUDGET and MANAGEMENT, HON. SECRETARY CESAR V. PURISIMA, in his capacity as Secretary of the DEPARTMENT OF FINANCE, HON. TREASURER NORMA

Promulgated:

February 14, 2007

L. LASALA, in her capacity as Treasurer of the Bureau of Treasury, and CHINA ROAD and BRIDGE CORPORATION, Respondents.
x------------------------------------------------------------------------------------------------------------------------------x

DECISION

CALLEJO, SR., J.:

Before the Court is the petition for certiorari and prohibition under Rule 65 of the Rules of Court seeking to set aside and nullify Resolution No. PJHL-A-04-012 dated May 7, 2004 issued by the Bids and Awards Committee (BAC) of the Department of Public Works and Highways (DPWH) and approved by then DPWH Acting Secretary Florante Soriquez. The assailed resolution recommended the award to private respondent China Road & Bridge Corporation of the contract for the implementation of civil works for Contract Package No. I (CP I), which consists of the improvement/rehabilitation of the San Andres (Codon)-Virac-Jct. Bago-Viga road, with the length of 79.818 kilometers, in the island province of Catanduanes.

The CP I project is one of the four packages comprising the project for the improvement/rehabilitation of the Catanduanes Circumferential Road, covering a total length of about 204.515 kilometers, which is the main highway in Catanduanes Province. The road section (Catanduanes Circumferential Road) is part of the Arterial Road Links Development Project (Phase IV) funded under Loan Agreement No. PH-P204 dated December 28, 1999 between the Japan Bank for International Cooperation (JBIC) and the Government of the Republic of the Philippines.

Background

Based on the Exchange of Notes dated December 27, 1999,[1] the Government of Japan and the Government of the Philippines, through their respective representatives, namely, Mr. Yoshihisa Ara, Ambassador Extraordinary and Plenipotentiary of Japan to the Republic of the Philippines, and then Secretary of Foreign Affairs Domingo L. Siazon, have reached an understanding concerning Japanese loans to be extended to the Philippines. These loans were aimed at promoting our countrys economic stabilization and development efforts.

The Exchange of Notes consisted of two documents: (1) a Letter from the Government of Japan, signed by Ambassador Ara, addressed to then Secretary of Foreign Affairs Siazon, confirming the understanding reached between the two governments concerning the loans to be extended by the Government of Japan to the Philippines; and (2) a document denominated as Records of Discussion where the salient terms of the loans as set forth by the Government of Japan, through the Japanese delegation, were reiterated and the said terms were accepted by the Philippine delegation. Both Ambassador Ara and then Secretary Siazon signed the Records of Discussion as representatives of the Government of Japan and Philippine Government, respectively.

The Exchange of Notes provided that the loans to be extended by the Government of Japan to the Philippines consisted of two loans: Loan I and Loan II. The Exchange of Notes stated in part:

1. A loan in Japanese yen up to the amount of seventy-nine billion eight hundred and sixtyone million yen (Y79,861,000,000) (hereinafter referred to as the Loan I) will be extended, in accordance with the relevant laws and regulations of Japan, to the Government of the Republic of the Philippines (hereinafter referred to as the Borrower I) by the Japan Bank for International Cooperation (hereinafter referred to as the Bank) to implement the projects enumerated in the List A attached hereto (hereinafter referred to as the List A) according to the allocation for each project as specified in the List A. 2. (1) The Loan I will be made available by loan agreements to be concluded between the Borrower I and the Bank. The terms and conditions of the Loan I as well as the procedure for its utilization will be governed by said loan agreements which will contain, inter alia, the following principles: ... (2) Each of the loan agreements mentioned in sub-paragraph (1) above will be concluded after the Bank is satisfied of the feasibility, including environmental consideration, of the project to which such loan agreement relates. 3. (1) The Loan I will be made available to cover payments to be made by the Philippine executing agencies to suppliers, contractors and/or consultants of eligible source countries under such contracts as may be entered into between them for purchases of products and/or services required for the implementation of the projects enumerated in the List A, provided that such purchases are made in such eligible source countries for products produced in and/or services supplied from those countries. (2) The scope of eligible source countries mentioned in sub-paragraph (1) above will be agreed upon between the authorities concerned of the two Governments. (3) A part of the Loan I may be used to cover eligible local currency requirements for the implementation of the projects enumerated in the List A. 4. With regard to the shipping and marine insurance of the products purchased under the Loan I, the Government of the Republic of the Philippines will refrain from imposing any restrictions that may hinder fair and free competition among the shipping and marine insurance companies.

x x x x[2]

Pertinently, List A, which specified the projects to be financed under the Loan I, includes the Arterial Road Links Development Project (Phase IV), to wit:

LIST A Maximum amount in million yen) 1. Secondary Education Development and Improvement Project 2. Rural Water Supply Project (Phase V) 3. Bohol Irrigation Project (Phase II) 4. Agrarian Reform Infrastructure Support Project (Phase II) 5. Arterial Road Links Development Project (Phase IV) 6. Cordillera Road Improvement Project

7,210 951 6,078

16,990

15,384 5,852

7. Philippines-Japan Friendship Highway Mindanao Section Rehabilitation Project (Phase II) 8. Rehabilitation and Maintenance of Bridges Along Arterial Roads Project (Phase IV) 9. Maritime Safety Improvement Project (Phase C) 10. Pinatubo Hazard Urgent Mitigation Project (Phase II) 11. Pasig-Marikina River Channel Improvement Project (Phase I)

7,434

5,068

4,714

9,013

1,167

Total

79,861[3]

The Exchange of Notes further provided that:

III xxxx 3. The Government of the Republic of the Philippines will ensure that the products and/or services mentioned in sub-paragraph (1) of paragraph 3 of Part I and sub-paragraph (1) of paragraph 4 of Part II are procured in accordance with the guidelines for procurement of the Bank, which set forth, inter alia, the procedures of international tendering to be followed except where such procedures are inapplicable or inappropriate. x x x x[4]

The Records of Discussion, which formed part of the Exchange of Notes, also stated in part, thus: xxxx 1. With reference to sub-paragraph (3) of paragraph 3 of Part I of the Exchange of Notes concerning the financing of eligible local currency requirements for the implementation of the projects mentioned in the said sub-paragraph, the representative of the Japanese delegation stated that: (1) such requirement of local currency as general administrative expenses, interest during construction, taxes and duties, expenses concerning office, remuneration to employees of the executing agencies and housing, not directly related to the implementation of the said projects, as well as purchase of land properties, compensation and the like, however, will not be considered as eligible for financing under the Loan I; and (2) the procurement of products and/or services will be made in accordance with the procedures of international competitive tendering except where such procedures are inapplicable and inappropriate. x x x x[5]

Thus, in accordance with the agreement reached by the Government of Japan and the Philippine Government, as expressed in the Exchange of Notes between the representatives of the two governments, the Philippines obtained from and was granted a loan by the JBIC. Loan Agreement No. PH-P204 dated December 28, 1999, in particular, stated as follows:

Loan Agreement No. PH-P204, dated December 28, 1999, between JAPAN BANK FOR INTERNATIONAL COOPERATION and the GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES. In the light of the contents of the Exchange of Notes between the Government of Japan and the Government of the Republic of the Philippines dated December 27, 1999, concerning Japanese loans to be extended with a view to promoting the economic stabilization and development efforts of the Republic of the Philippines. JAPAN BANK FOR INTERNATIONAL COOPERATION (hereinafter referred to as the BANK) and THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES (hereinafter referred to as the Borrower) herewith conclude the following Loan Agreement (hereinafter referred to as the Loan Agreement, which includes all agreements supplemental hereto). x x x x[6]

Under the terms and conditions of Loan Agreement No. PH-P204, JBIC agreed to lend the Philippine Government an amount not exceeding FIFTEEN BILLION THREE HUNDRED EIGHTY-FOUR MILLION Japanese Yen (Y 15,384,000,000) as principal for the implementation of the Arterial Road Links Development Project (Phase IV) on the terms and conditions set forth in the Loan Agreement and in accordance with the relevant laws and regulations of Japan.[7] The said amount shall be used for the purchase of eligible goods and services necessary for the implementation of the above-mentioned project from suppliers, contractors or consultants.

[8]
Further, it was provided under the said loan agreement that other terms and conditions generally applicable thereto shall be set forth in the General Terms and Conditions, dated November 1987, issued by the Overseas Economic Cooperation Fund (OECF) and for the purpose, reference to the OECF and Fund therein (General Terms and Conditions) shall be substituted by the JBIC and Bank, respectively.[9] Specifically, the guidelines for procurement of all goods and services to be financed out of the proceeds of the said loan shall be as stipulated in the Guidelines for Procurement under OECF Loans dated December 1997 (herein referred to as JBIC Procurement Guidelines).[10]

As mentioned earlier, the proceeds of Loan Agreement No. PH-P204 was to be used to finance the Arterial Road Links Development Project (Phase IV), of which the Catanduanes Circumferential Road was a part.

This road section, in turn, was divided into four contract packages (CP):

CP I: CP II: CP III: CP IV:

San Andres (Codon)-Virac-Jct. Bato- Viga Road - 79.818 kms Viga-Bagamanoc Road - 10.40 kms. Bagamanoc-Pandan Road - 47.50 kms. Pandan-Caramoran-Codon Road - 66.40 kms.[11]

Subsequently, the DPWH, as the government agency tasked to implement the project, caused the publication of the Invitation to Prequalify and to Bid for the implementation of the CP I project in two leading national newspapers, namely, the Manila Times and Manila Standard on November 22 and 29, and December 5, 2002.

A total of twenty-three (23) foreign and local contractors responded to the invitation by submitting their accomplished prequalification documents on January 23, 2003. In accordance with the established prequalification criteria, eight contractors were evaluated or considered eligible to bid as concurred by the JBIC. One of them, however, withdrew; thus, only seven contractors submitted their bid proposals.

The bid documents submitted by the prequalified contractors/bidders were examined to determine their compliance with the requirements as stipulated in Article 6 of the Instruction to Bidders.[12] After the lapse of the deadline for the submission of bid proposals, the opening of the bids commenced immediately. Prior to the opening of the respective bid proposals, it was announced that the Approved Budget for the Contract (ABC) was in the amount of P738,710,563.67.

The result of the bidding revealed the following three lowest bidders and their respective bids vis--vis the ABC:[13]

Name of Bidder Original Bid As Read (Pesos) As-Corrected Bid Amount (Pesos) Variance 1) China Road And Bridge Corporation P 993,183,904.98

P952,564,821.71 28.95% 2) Cavite Ideal Intl Const. Devt. Corp. P1,099,926,598.11 P1,099,926,598.11 48.90% 3) Italian Thai Devt. Public Company, Ltd. P1,125,022,075.34 P1,125,392,475.36 52.35%

The bid of private respondent China Road & Bridge Corporation was corrected from the original P993,183,904.98 (with variance of 34.45% from the ABC) to P952,564,821.71 (with variance of 28.95% from the ABC) based on their letter clarification dated April 21, 2004.[14]

After further evaluation of the bids, particularly those of the lowest three bidders, Mr. Hedifume Ezawa, Project Manager of the Catanduanes Circumferential Road Improvement Project (CCRIP), in his Contractors Bid Evaluation Report dated April 2004, recommended the award of the contract to private respondent China Road & Bridge Corporation:

In accordance with the Guidelines for the Procurements under ODA [Official Development Assistance] Loans, the Consultant hereby recommends the award of the contract for the construction of CP I, San Andres (Codon) Virac Jct. Bato Viga Section under the Arterial Road Links Development Projects, Phase IV, JBIC Loan No. PH-P204 to the Lowest Complying Bidder, China Road and Bridge Corporation, at its total corrected bid amount of Nine Hundred Fifty-Two Million Five Hundred Sixty-Four Thousand Eight Hundred Twenty-One & 71/100

Pesos.[15]

The BAC of the DPWH, with the approval of then Acting Secretary Soriquez, issued the assailed Resolution No. PJHL-A-04-012 dated May 7, 2004 recommending the award in favor of private respondent China Road & Bridge Corporation of the contract for the implementation of civil works for CP I, San Andres (Codon) Virac Jct. Bato Viga Road (Catanduanes Circumferential Road Improvement Project) of the Arterial Roads Links Development Project, Phase IV, located in Catanduanes Province, under JBIC Loan Agreement No. PH-P204.[16] On September 29, 2004, a Contract of Agreement was entered into by and between the DPWH and private respondent China Road & Bridge Corporation for the implementation of the CP I project.

The Parties

Petitioner Plaridel M. Abaya claims that he filed the instant petition as a taxpayer, former lawmaker, and a Filipino citizen. Petitioner Plaridel C. Garcia likewise claims that he filed the suit as a taxpayer, former military officer, and a Filipino citizen. Petitioner PMA 59 Foundation, Inc., on the other hand, is a non-stock, non-profit corporation organized under the existing Philippine laws. It claims that its members are all taxpayers and alumni of the Philippine Military Academy. It is represented by its President, Carlos L. Agustin.

Named as public respondents are the DPWH, as the government agency tasked with the implementation of government infrastructure projects; the Department of Budget and Management (DBM) as the government agency that authorizes the release and disbursement of public funds for the implementation of government infrastructure projects; and the Department of Finance (DOF) as the government agency that acts as the custodian and manager of all financial resources of the government. Also named as individual public respondents are Hermogenes E. Ebdane, Jr., Emilia T. Boncodin and Cesar V. Purisima in their capacities as former Secretaries of the DPWH, DBM and DOF, respectively. On the other hand, public respondent Norma L. Lasala was impleaded in her capacity as Treasurer of the Bureau of Treasury.

Private respondent China Road & Bridge Corporation is a duly organized corporation engaged in the business of construction.

The Petitioners Case

The petitioners mainly seek to nullify DPWH Resolution No. PJHL-A-04-012 dated May 7, 2004, which recommended the award to private respondent China Road & Bridge Corporation of the contract for the implementation of the civil works of CP I. They also seek to annul the contract of agreement subsequently entered into by and between the DPWH and private respondent China Road & Bridge Corporation pursuant to the said resolution.

They pose the following issues for the Courts resolution:

I. Whether or not Petitioners have standing to file the instant Petition.

II. Whether or not Petitioners are entitled to the issuance of a Writ of Certiorari reversing and setting aside DPWH Resolution No. PJHL-A-04-012, recommending the award of the Contract Agreement for the implementation of civil works for CPI, San Andres (CODON)-VIRAC-JCT BATO-VIGA ROAD (CATANDUANES CIRCUMFERENTIAL ROAD IMPROVEMENT PROJECT) of the Arterial Road Links Development Project, Phase IV, located in Catanduanes Province, under JBIC L/A No. PH-P204, to China Road & Bridge Corporation.

III. Whether or not the Contract Agreement executed by and between the Republic of the Philippines, through the Department of Public Works and Highways, and the China Road & Bridge Corporation, for the implementation of civil works for CPI, San Andres (CODON)-VIRACJCT BATO-VIGA ROAD (CATANDUANES CIRCUMFERENTIAL ROAD IMPROVEMENT PROJECT) of the Arterial Road Links Development Project, Phase IV, located in Catanduanes Province, under JBIC L/A No. PH-P204, is void ab initio.

IV. Whether or not Petitioners are entitled to the issuance of a Writ of Prohibition permanently prohibiting the implementation of DPWH Resolution No. PJHL-A-04-012 and the Contract Agreement executed by and between the Republic of the Philippines (through the Department of Public Works and Highways) and the China Road & Bridge Corporation, and the disbursement of public funds by the [D]epartment of [B]udget and [M]anagement for such purpose.

V. Whether or not Petitioners are entitled to a Preliminary Injunction and/or a Temporary Restraining Order immediately enjoining the implementation of DPWH Resolution No. PJHL-A04-012 and the Contract Agreement executed by and between the Republic of the Philippines (through the Department of Public Works and Highways) and the China Road & Bridge Corporation, and the disbursement of public funds by the Department of Budget and

Management for such purpose, during the pendency of this case.[17]

Preliminarily, the petitioners assert that they have standing or locus standi to file the instant petition. They claim that as taxpayers and concerned citizens, they have the right and duty to question the expenditure of public funds on illegal acts. They point out that the Philippine Government allocates a peso-counterpart for CP I, which amount is appropriated by Congress in the General Appropriations Act; hence, funds that are being utilized in the implementation of the questioned project also partake of taxpayers money. The present action, as a taxpayers suit, is thus allegedly proper.

They likewise characterize the instant petition as one of transcendental importance that warrants the Courts adoption of a liberal stance on the issue of standing. It cited several cases where the Court brushed aside procedural technicalities in order to resolve issues involving paramount public interest and transcendental importance.[18] Further, petitioner Abaya asserts that he possesses the requisite standing as a former member of the House of Representatives and one of the principal authors of Republic Act No. 9184 (RA 9184)[19] known as the Government Procurement Reform Act, the law allegedly violated by the public respondents.

On the substantive issues, the petitioners anchor the instant petition on the contention that the award of the contract to private respondent China Road & Bridge Corporation violates RA 9184, particularly Section 31 thereof which reads:

SEC. 31. Ceiling for Bid Prices. The ABC shall be the upper limit or ceiling for the Bid prices. Bid prices that exceed this ceiling shall be disqualified outright from further participating in the bidding. There shall be no lower limit to the amount of the award.

In relation thereto, the petitioners cite the definition of the ABC, thus:

SEC. 5. Definition of Terms. xxx (a) Approved Budget for the Contract (ABC). refers to the budget for the contract duly approved by the Head of the Procuring Entity, as provided for in the General Appropriations Act and/or continuing appropriations, in the case of National Government Agencies; the Corporate Budget for the contract approved by the governing Boards, pursuant to E.O. No. 518, series of 1979, in the case of Government-Owned and/or Controlled Corporations,

Government Financial Institutions and State Universities and Colleges; and the Budget for the contract approved by the respective Sanggunian, in the case of Local Government Units. xxx

The petitioners theorize that the foregoing provisions show the mandatory character of ceilings or upper limits of every bid. Under the above-quoted provisions of RA 9184, all bids or awards should not exceed the ceilings or upper limits; otherwise, the contract is deemed void and inexistent.

Resolution No. PJHL-A-04-012 was allegedly issued with grave abuse of discretion because it recommended the award of the contract to private respondent China Road & Bridge Corporation whose bid was more than P200 million overpriced based on the ABC. As such, the award is allegedly illegal and unconscionable.

In this connection, the petitioners opine that the contract subsequently entered into by and between the DPWH and private respondent China Road & Bridge Corporation is void ab initio for being prohibited by RA 9184. They stress that Section 31 thereof expressly provides that bid prices that exceed this ceiling shall be disqualified outright from participating in the bidding. The upper limit or ceiling is called the ABC and since the bid of private respondent China Road & Bridge Corporation exceeded the ABC for the CP I project, it should have been allegedly disqualified from the bidding process and should not, by law, have been awarded the said contract. They invoke Article 1409 of the Civil Code:

ART. 1409. The following contracts are inexistent and void from the beginning: (1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy; (2) Those which are absolutely simulated or fictitious; (3) Those whose cause or object did not exist at the time of the transaction; (4) Those whose object is outside the commerce of men; (5) Those which contemplate an impossible service; (6) Those where the intention of the parties relative to the principal object of the contract cannot be ascertained; (7) Those expressly prohibited or declared void by law.

For violating the above provision, the contract between the DPWH and private respondent China Road & Bridge Corporation is allegedly inexistent and void ab initio and can produce no effects whatsoever.

It is the contention of the petitioners that RA 9184 is applicable to both local- and foreign-funded procurement contracts. They cite the following excerpt of the deliberations of the Bicameral Conference Committee on the Disagreeing Provisions of Senate Bill No. 2248 and House Bill No. 4809:[20]

REP. ABAYA. Mr. Chairman, can we just propose additional amendments? Can we go back to Section 4, Mr. Chairman?

THE CHAIRMAN (SEN. ANGARA). Section? Section ano, Del, 4? Definition definition of terms.

REP. ABAYA. Sa House bill, it is sa scope and application.

THE CHAIRMAN (SEN. ANGARA). Okay.

REP. ABAYA. It should read as follows: This Act shall apply to the procurement of goods, supplies and materials, infrastructure projects and consulting services regardless of funding source whether local or foreign by the government.

THE CHAIRMAN (SEN. ANGARA). Okay, accepted. We accept. The Senate accepts it.[21]

xxx

xxx

xxx

THE CHAIRMAN (SEN ANGARA). Just take note of that ano. Medyo nga problematic yan eh. Now, just for the record Del, can you repeat again the justification for including foreign funded contracts within the scope para malinaw because the World Bank daw might raise some objection to it.

REP. ABAYA. Well, Mr. Chairman, we should include foreign funded projects kasi these are the big projects. To give an example, if you allow bids above government estimate, lets say take the case of 500 million project, included in that 500 million is the 20 percent profit. If you allow them to bid above government estimate, they will add another say 28 percent of (sic) 30 percent, 30 percent of 500 million is another 150 million. Ito, this is a

rich source of graft money, aregluhan na lang, 150 million, five contractors will gather, O eto 20 million, 20 million, 20 million. So, it is rigged. Yun ang practice na nangyayari. If we eliminate that, if we have a ceiling then, it will not be very tempting kasi walang extra money na pwedeng ibigay sa ibang contractor. So this promote (sic) collusion among bidders, of course, with the cooperation of irresponsible officials of some agencies. So we should have a ceiling to include foreign funded projects.[22]

The petitioners insist that Loan Agreement No. PH-P204 between the JBIC and the Philippine Government is neither a treaty, an international nor an executive agreement that would bar the application of RA 9184. They point out that to be considered a treaty, an international or an executive agreement, the parties must be two sovereigns or States whereas in the case of Loan Agreement No. PH-P204, the parties are the Philippine Government and the JBIC, a banking agency of Japan, which has a separate juridical personality from the Japanese Government.

They further insist on the applicability of RA 9184 contending that while it took effect on January 26, 2003[23] and Loan Agreement No. PH-P204 was executed prior thereto or on December 28, 1999, the actual procurement or award of the contract to private respondent China Road & Bridge Corporation was done after the effectivity of RA 9184. The said law is allegedly specific as to its application, which is on the actual procurement of infrastructure and other projects only, and not on the loan agreements attached to such projects. Thus, the petition only prays for the annulment of Resolution No. PJHL-A-04-012 as well as the contract between the DPWH and private respondent China Road & Bridge Corporation. The petitioners clarify that they do not pray for the annulment of Loan Agreement No. PH-P204. Since the subject procurement and award of the contract were done after the effectivity of RA 9184, necessarily, the procurement rules established by that law allegedly apply, and not Presidential Decree No. 1594 (PD 1594)[24] and Executive Order No. 40 (EO 40), series of 2001, [25] as contended by the respondents. The latter laws, including their implementing rules, have allegedly been repealed by RA 9184. Even RA 4860, as amended, known as the Foreign Borrowings Act, the petitioners posit, may have also been repealed or modified by RA 9184 insofar as its provisions are inconsistent with the latter.

The petitioners also argue that the Implementing Rules and Regulations (IRR) of RA 9184, Otherwise Known as the Government Procurement Reform Act, Part A (IRR-A) cited by the respondents is not applicable as these rules only govern domestically-funded procurement contracts. They aver that the implementing rules to govern foreign-funded procurement, as in the present case, have yet to be drafted and in fact, there are concurrent resolutions drafted by both houses of Congress for the Reconvening of the Joint Congressional Oversight Committee for the formulation of the IRR for foreign-funded procurements under RA 9184.

The petitioners maintain that disbursement of public funds to implement a patently void and illegal contract is itself illegal and must be enjoined. They bring to the Courts attention the fact that the works on the CP I project have already commenced as early as October 2004. They thus urge the Court to issue a writ of certiorari to set aside Resolution No. PJHL-A-04-012 as well as to declare null and void the contract entered into

between the DPWH and private respondent China Road & Bridge Corporation. They also pray for the issuance of a temporary restraining order and, eventually, a writ of prohibition to permanently enjoin the DPWH from implementing Resolution No. PJHL-A-04-012 and its contract with private respondent China Road & Bridge Corporation as well as the DBM from disbursing funds for the said purpose.

The Respondents Counter-Arguments

The public respondents, namely the DPWH, DBM and DOF, and their respective named officials, through the Office of the Solicitor General, urge the Court to dismiss the petition on grounds that the petitioners have no locus standi and, in any case, Resolution No. PJHL-A-04-012 and the contract between the DPWH and private respondent China Road & Bridge Corporation are valid.

According to the public respondents, a taxpayers locus standi was recognized in the following cases: (a) where a tax measure is assailed as unconstitutional;[26] (b) where there is a question of validity of election laws;[27] (c) where legislators questioned the validity of any official action upon the claim that it infringes on their prerogatives as legislators;[28] (d) where there is a claim of illegal disbursement or wastage of public funds through the enforcement of an invalid or unconstitutional law;[29] (e) where it involves the right of members of the Senate or House of Representatives to question the validity of a presidential veto or condition imposed on an item in an appropriation bill;[30] or (f) where it involves an invalid law, which when enforced will put the petitioner in imminent danger of sustaining some direct injury as a result thereof, or 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] None of the above considerations allegedly obtains in the present case.

It is also the view of the public respondents that the fact that petitioner Abaya was a former lawmaker would not suffice to confer locus standi on himself. Members of Congress may properly challenge the validity of an official act of any department of the government only upon showing that the assailed official act affects or impairs their rights and prerogatives as legislators.

The public respondents further assail the standing of the petitioners to file the instant suit claiming that they failed to allege any specific injury suffered nor an interest that is direct and personal to them. If at all, the interest or injuries claimed by the petitioners are allegedly merely of a general interest common to all members of the public. Their interest is allegedly too vague, highly speculative and uncertain to satisfy the requirements of locus standi.

The public respondents find it noteworthy that the petitioners do not raise issues of constitutionality but only of contract law, which the petitioners not being privies to the agreement cannot raise. This is

following the principle that a stranger to a contract cannot sue either or both the contracting parties to annul and set aside the same except when he is prejudiced on his rights and can show detriment which would positively result to him from the implementation of the contract in which he has no intervention. There being no particularized interest or elemental substantial injury necessary to confer locus standi, the public respondents implore the Court to dismiss the petition.

On the merits, the public respondents maintain that the imposition of ceilings or upper limits on bid prices in RA 9184 does not apply because the CP I project and the entire Catanduanes Circumferential Road Improvement Project, financed by Loan Agreement No. PH-P204 executed between the Philippine Government and the JBIC, is governed by the latters Procurement Guidelines which precludes the imposition of ceilings on bid prices. Section 5.06 of the JBIC Procurement Guidelines reads:

Section 5.06. Evaluation and Comparison of Bids. xxx (e) Any procedure under which bids above or below a predetermined bid value assessment are automatically disqualified is not permitted.

It was explained that other foreign banks such as the Asian Development Bank (ADB) and the World Bank (WB) similarly prohibit the bracketing or imposition of a ceiling on bid prices.

The public respondents stress that it was pursuant to Loan Agreement No. PH-P204 that the assailed Resolution No. PJHL-A-04-012 and the subsequent contract between the DPWH and private respondent China Road & Bridge Corporation materialized. They likewise aver that Loan Agreement No. PH-P204 is governed by RA 4860, as amended, or the Foreign Borrowings Act. Section 4 thereof states:

SEC. 4. In the contracting of any loan, credit or indebtedness under this Act, the President of the Philippines may, when necessary, agree to waive or modify, the application of any law granting preferences or imposing restrictions on international competitive bidding, including among others [Act No. 4239, Commonwealth Act No. 138], the provisions of [CA 541], insofar as such provisions do not pertain to constructions primarily for national defense or security purposes, [RA 5183]; Provided, however, That as far as practicable, utilization of the services of qualified domestic firms in the prosecution of projects financed under this Act shall be encouraged: Provided, further, That in case where international competitive bidding shall be conducted preference of at least fifteen per centum shall be granted in favor of articles, materials or supplies of the growth, production or manufacture of the Philippines: Provided, finally, That the method and procedure in comparison of bids shall be the subject of agreement between the Philippine Government and the lending institution.

DOJ Opinion No. 46, Series of 1987, is relied upon by the public respondents as it opined that an agreement for the exclusion of foreign assisted projects from the coverage of local bidding regulations does not contravene existing legislations because the statutory basis for foreign loan agreements is RA 4860, as amended, and under Section 4 thereof, the President is empowered to waive the application of any law imposing restrictions on the procurement of goods and services pursuant to such loans.

Memorandum Circular Nos. 104 and 108, issued by the President, to clarify RA 4860, as amended, and PD 1594, relative to the award of foreign-assisted projects, are also invoked by the public respondents, to wit:

Memorandum Circular No. 104: In view of the provisions of Section 4 of Republic Act No. 4860, as amended, otherwise known as the Foreign Borrowings Act xxx It is hereby clarified that foreign-assisted infrastructure projects may be exempted from the application for the pertinent provisions of the Implementing Rules and Regulations (IRR) of Presidential Decree (P.D.) No. 1594 relative to the method and procedure in the comparison of bids, which matter may be the subject of agreement between the infrastructure agency concerned and the lending institution. It should be made clear however that public bidding is still required and can only be waived pursuant to existing laws. Memorandum Circular No. 108: In view of the provisions of Section 4 of Republic Act No. 4860, as amended, otherwise known as the Foreign Borrowings Act, it is hereby clarified that, for projects supported in whole or in part by foreign assistance awarded through international or local competitive bidding, the government agency concerned may award the contract to the lowest evaluated bidder at his bid price consistent with the provisions of the applicable loan/grant agreement. Specifically, when the loan/grant agreement so stipulates, the government agency concerned may award the contract to the lowest bidder even if his/its bid exceeds the approved agency estimate. It is understood that the concerned government agency shall, as far as practicable, adhere closely to the implementing rules and regulations of Presidential Decree No. 1594 during loan/grant negotiation and the implementation of the projects.[32]

The public respondents characterize foreign loan agreements, including Loan Agreement No. PH-P204, as executive agreements and, as such, should be observed pursuant to the fundamental principle in international law of pacta sunt servanda.[33] They cite Section 20 of Article VII of the Constitution as giving the President the authority to contract foreign loans:

SEC. 20. The President may contract or guarantee foreign loans on behalf of the Republic of the Philippines with the prior concurrence of the Monetary Board, and subject to such limitations as may be provided by law. The Monetary Board shall, within thirty days from the end of every quarter of the calendar year, submit to the Congress a complete report of its decisions on applications for loans to be contracted or guaranteed by the Government or Government-owned and Controlled Corporations which would have the effect of increasing the foreign debt, and containing other matters as may be provided by law.

The Constitution, the public respondents emphasize, recognizes the enforceability of executive agreements in the same way that it recognizes generally accepted principles of international law as forming part of the law of the land.[34] This recognition allegedly buttresses the binding effect of executive agreements to which the Philippine Government is a signatory. It is pointed out by the public respondents that executive agreements are essentially contracts governing the rights and obligations of the parties. A contract, being the law between the parties, must be faithfully adhered to by them. Guided by the fundamental rule of pacta sunt servanda, the Philippine Government bound itself to perform in good faith its duties and obligations under Loan Agreement No. PH-P204.

The public respondents further argue against the applicability of RA 9184 stating that it was signed into law on January 10, 2003.[35] On the other hand, Loan Agreement No. PH-P204 was executed on December 28, 1999, where the laws then in force on government procurements were PD 1594 and EO 40. The latter law (EO 40), in particular, excluded from its application any existing and future government commitments with respect to the bidding and award of contracts financed partly or wholly with funds from international financing institutions as well as from bilateral and other similar foreign sources.

The applicability of EO 40, not RA 9184, is allegedly bolstered by the fact that the Invitation to Prequalify and to Bid for the implementation of the CP I project was published in two leading national newspapers, namely, the Manila Times and Manila Standard on November 22, 29 and December 5, 2002, or before the signing into law of RA 9184 on January 10, 2003. In this connection, the public respondents point to Section 77 of IRR-A, which reads: SEC. 77. Transitory Clause.

In all procurement activities, if the advertisement or invitation for bids was issued prior to the effectivity of the Act, the provisions of EO 40 and its IRR, PD 1594 and its IRR, RA 7160 and its IRR, or other applicable laws as the case may be, shall govern. In cases where the advertisements or invitations for bids were issued after the effectivity of the Act but before the effectivity of this IRR-A, procuring entities may continue adopting the procurement procedures, rules and regulations provided in EO 40 and its IRR, or other applicable laws, as the case may be.

Section 4 of RA 9184 is also invoked by the public respondents as it provides:

SEC. 4. Scope and Applications. This Act shall apply to the Procurement of Infrastructure Projects, Goods and Consulting Services, regardless of source of funds, whether local or foreign, by all branches and instrumentalities of government, its departments, offices and agencies, including government-owned and/or controlled corporations and local government units, subject to the provisions of Commonwealth Act No. 138. Any treaty or international or executive agreement affecting the subject matter of this Act to which the Philippine government is a signatory shall be observed.

It is also the position of the public respondents that even granting arguendo that Loan Agreement No. PH-P204 were an ordinary loan contract, still, RA 9184 is inapplicable under the non-impairment clause[36] of the Constitution. The said loan agreement expressly provided that the procurement of goods and services for the project financed by the same shall be governed by the Guidelines for Procurement under OECF Loans dated December 1997. Further, Section 5.06 of the JBIC Procurement Guidelines categorically provides that [a]ny procedure under which bids above or below a predetermined bid value assessment are automatically disqualified is not permitted.

The public respondents explain that since the contract is the law between the parties and Loan Agreement No. PH-P204 states that the JBIC Procurement Guidelines shall govern the parties relationship and further dictates that there be no ceiling price for the bidding, it naturally follows that any subsequent law passed contrary to the letters of the said contract would have no effect with respect to the parties rights and obligations arising therefrom.

To insist on the application of RA 9184 on the bidding for the CP I project would, notwithstanding the terms and conditions of Loan Agreement No. PH-P204, allegedly violate the constitutional provision on nonimpairment of obligations and contracts, and destroy vested rights duly acquired under the said loan agreement.

Lastly, the public respondents deny that there was illegal disbursement of public funds by the DBM. They asseverate that all the releases made by the DBM for the implementation of the entire Arterial Road Links Project Phase IV, which includes the Catanduanes Circumferential Road Improvement Project, were covered by the necessary appropriations made by law, specifically the General Appropriations Act (GAA). Further, the requirements and procedures prescribed for the release of the said funds were duly complied with.

For its part, private respondent China Road & Bridge Corporation similarly assails the standing of the petitioners, either as taxpayers or, in the case of petitioner Abaya, as a former lawmaker, to file the present suit. In addition, it is also alleged that, by filing the petition directly to this Court, the petitioners failed to observe the hierarchy of courts.

On the merits, private respondent China Road & Bridge Corporation asserts that the applicable law to govern the bidding of the CP I project was EO 40, not RA 9184, because the former was the law governing the procurement of government projects at the time that it was bidded out. EO 40 was issued by the Office of the President on October 8, 2001 and Section 1 thereof states that:

SEC. 1. Scope and Application. This Executive Order shall apply to the procurement of: (a) goods, supplies, materials and related services; (b) civil works; and (c) consulting services, by all National Government agencies, including State Universities and Colleges (SUCs), GovernmentOwned or Controlled Corporations (GOCCs) and Government Financial Institutions (GFIs), hereby referred to as the Agencies. This Executive Order shall cover the procurement process from the pre-procurement conference up to the award of contract. xxx

The Invitation to Prequalify and to Bid was first published on November 22, 2002. On the other hand, RA 9184 was signed into law only on January 10, 2003. Since the law in effect at the time the procurement process was initiated was EO 40, private respondent China Road & Bridge Corporation submits that it should be the said law which should govern the entire procurement process relative to the CP I project. EO 40 expressly recognizes as an exception from the application of the provisions thereof on approved budget ceilings, those projects financed by international financing institutions (IFIs) and foreign bilateral sources. Section 1 thereof, quoted in part earlier, further states:

SEC. 1. Scope and Application. x x x

Nothing in this Order shall negate any existing and future government commitments with respect to the bidding and award of contracts financed partly or wholly with funds from international financing institutions as well as from bilateral and other similar foreign sources.

Section 1.2 of the Implementing Rules and Regulations of EO 40 is likewise invoked as it provides:

For procurement financed wholly or partly from Official Development Assistance (ODA) funds from International Financing Institutions (IFIs), as well as from bilateral and other similar foreign sources, the corresponding loan/grant agreement governing said funds as negotiated and agreed upon by and between the Government and the concerned IFI shall be observed.

Private respondent China Road & Bridge Corporation thus postulates that following EO 40, the procurement of goods and services for the CP I project should be governed by the terms and conditions of Loan Agreement No. PH-P204 entered into between the JBIC and the Philippine Government. Pertinently, Section 5.06 of the JBIC Procurement Guidelines prohibits the setting of ceilings on bid prices.

Private respondent China Road & Bridge Corporation claims that when it submitted its bid for the CP I project, it relied in good faith on the provisions of EO 40. It was allegedly on the basis of the said law that the DPWH awarded the project to private respondent China Road & Bridge Coporation even if its bid was higher than the ABC. Under the circumstances, RA 9184 could not be applied retroactively for to do so would allegedly impair the vested rights of private respondent China Road & Bridge Corporation arising from its contract with the DPWH.

It is also contended by private respondent China Road & Bridge Corporation that even assuming arguendo that RA 9184 could be applied retroactively, it is still the terms of Loan Agreement No. PH-P204 which should govern the procurement of goods and services for the CP I project. It supports its theory by characterizing the said loan agreement, executed pursuant to the Exchange of Notes between the Government of Japan and the Philippine Government, as an executive agreement.

Private respondent China Road & Bridge Corporation, like the public respondents, cites RA 4860 as the basis for the Exchange of Notes and Loan Agreement No. PH-P204. As an international or executive agreement, the Exchange of Notes and Loan Agreement No. PH-P204 allegedly created a legally binding obligation on the parties. The following excerpt of the deliberations of the Bicameral Conference Committee on the Disagreeing Provision of Senate Bill No. 2248 and House Bill No. 4809 is cited by private respondent China Road & Bridge Corporation to support its contention that it is the intent of the lawmakers to exclude from the application of RA 9184 those foreign-funded projects:

xxx REP. MARCOS. Yes, Mr. Chairman, to respond and to put into the record, a justification for the inclusion of foreign contracts, may we just state that foreign contracts have, of course, been brought into the ambit of the law because of the Filipino counterpart for this foreign projects, they are no longer strictly foreign in nature but fall under the laws of the Philippine government. THE CHAIRMAN (SEN. ANGARA). Okay. I think thats pretty clear. I think the possible concern is that some ODA are with strings attached especially the Japanese. The Japanese are quite strict about that, that they are (sic) even provide the architect and the design, etcetera, plus, of course, the goods that will be supplied. Now, I think weve already provided that this is open to all and we will recognize our international agreements so that this bill will not also restrict the flow of foreign funding, because some countries now make it a condition that they supply both services and goods especially the Japanese. So I think we can put a sentence that we continue to honor our international obligations, di ba Laura? MR. ENCARNACION. Actually, subject to any treaty. THE CHAIRMAN (SEN. ANGARA). Yun pala eh. That should allay their anxiety and concern. Okay, buti na lang for the record para malaman nila na we are conscious sa ODA.[37]

Private respondent China Road & Bridge Corporation submits that based on the provisions of the Exchange of Notes and Loan Agreement No. PH-P204, it was rightfully and legally awarded the CP I project. It urges the Court to dismiss the petition for lack of merit.

The Courts Rulings

Petitioners, as taxpayers, possess locus standi to file the present suit

Briefly stated, locus standi is a right of appearance in a court of justice on a given question.[38] More particularly, it is a partys personal and substantial interest in a case such that he has sustained or will sustain direct injury as a result of the governmental act being challenged. It calls for more than just a generalized grievance. 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.[39] Standing or locus standi is a peculiar concept in constitutional law[40] and the rationale for requiring a party who challenges the constitutionality of a statute to allege such a personal stake in the outcome of the controversy is to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions.[41]

Locus standi, however, is merely a matter of procedure[42] and it has been recognized that in some cases, suits are not brought by parties who have been personally injured by the operation of a law or any other government act but by concerned citizens, taxpayers or voters who actually sue in the public interest.[43] Consequently, the Court, in a catena of cases,[44] has invariably adopted a liberal stance on locus standi, including those cases involving taxpayers.

The prevailing doctrine in taxpayers suits is to allow taxpayers to question contracts entered into by the national government or government- owned or controlled corporations allegedly in contravention of law.

[45]

A taxpayer is allowed to sue where there is a claim that public funds are illegally disbursed, or that public money is being deflected to any improper purpose, or that there is a wastage of public funds through the enforcement of an invalid or unconstitutional law.[46] Significantly, a taxpayer need not be a party to the contract to challenge its validity.[47]

In the present case, the petitioners are suing as taxpayers. They have sufficiently demonstrated that, notwithstanding the fact that the CP I project is primarily financed from loans obtained by the government from the JBIC, nonetheless, taxpayers money would be or is being spent on the project considering that the Philippine Government is required to allocate a peso-counterpart therefor. The public respondents themselves admit that appropriations for these foreign-assisted projects in the GAA are composed of the loan proceeds and the peso-counterpart. The counterpart funds, the Solicitor General explains, refer to the component of the project cost to be financed from government-appropriated funds, as part of the governments commitment in the implementation of the project.[48] Hence, the petitioners correctly asserted their standing since a part of the funds being utilized in the implementation of the CP I project partakes of taxpayers money.

Further, the serious legal questions raised by the petitioners, e.g., whether RA 9184 applies to the CP I project, in particular, and to foreign-funded government projects, in general, and the fact that public interest is indubitably involved considering the public expenditure of millions of pesos, warrant the Court to adopt in the present case its liberal policy on locus standi.

In any case, for reasons which will be discussed shortly, the substantive arguments raised by the petitioners fail to persuade the Court as it holds that Resolution No. PJHL-A-04-012 is valid. As a corollary, the subsequent contract entered into by and between the DPWH and private respondent China Road & Bridge Corporation is likewise valid.

History of Philippine Procurement Laws

It is necessary, at this point, to give a brief history of Philippine laws pertaining to procurement through public bidding. The United States Philippine Commission introduced the American practice of public bidding through Act No. 22, enacted on October 15, 1900, by requiring the Chief Engineer, United States Army for the Division of the Philippine Islands, acting as purchasing agent under the control of the then Military Governor, to advertise and call for a competitive bidding for the purchase of the necessary materials and lands to be used for the construction of highways and bridges in the Philippine Islands.[49] Act No. 74, enacted on January 21, 1901 by the Philippine Commission, required the General Superintendent of Public Instruction to purchase office supplies through competitive public bidding.[50] Act No. 82, approved on January 31, 1901, and Act No. 83, approved on February 6, 1901, required the municipal and provincial governments, respectively, to hold competitive public biddings in the making of contracts for public works and the purchase of office supplies.

[51]
On June 21, 1901, the Philippine Commission, through Act No. 146, created the Bureau of Supply and with its creation, public bidding became a popular policy in the purchase of supplies, materials and equipment for the use of the national government, its subdivisions and instrumentalities.[52] On February 3, 1936, then President Manuel L. Quezon issued Executive Order No. 16 declaring as a matter of general policy that government contracts for public service or for furnishing supplies, materials and equipment to the government should be subjected to public bidding.[53] The requirement of public bidding was likewise imposed for public works of construction or repair pursuant to the Revised Administrative Code of 1917.

Then President Diosdado Macapagal, in Executive Order No. 40 dated June 1, 1963, reiterated the directive that no government contract for public service or for furnishing supplies, materials and equipment to the government or any of its branches, agencies or instrumentalities, should be entered into without public bidding except for very extraordinary reasons to be determined by a Committee constituted thereunder. Then President Ferdinand Marcos issued PD 1594 prescribing guidelines for government infrastructure projects and Section 4[54] thereof stated that they should generally be undertaken by contract after competitive public bidding.

Then President Corazon Aquino issued Executive Order No. 301 (1987) prescribing guidelines for government negotiated contracts. Pertinently, Section 62 of the Administrative Code of 1987 reiterated the requirement of competitive public bidding in government projects. In 1990, Congress passed RA 6957,[55] which authorized the financing, construction, operation and maintenance of infrastructure by the private sector. RA 7160 was likewise enacted by Congress in 1991 and it contains provisions governing the procurement of goods and locally-funded civil works by the local government units.

Then President Fidel Ramos issued Executive Order No. 302 (1996), providing guidelines for the procurement of goods and supplies by the national government. Then President Joseph Ejercito Estrada issued Executive Order No. 201 (2000), providing additional guidelines in the procurement of goods and supplies by the national government. Thereafter, he issued Executive Order No. 262 (2000) amending EO 302 (1996) and EO 201 (2000).

On October 8, 2001, President Gloria Macapagal-Arroyo issued EO 40, the law mainly relied upon by the respondents, entitled Consolidating Procurement Rules and Procedures for All National Government Agencies, Government-Owned or Controlled Corporations and Government Financial Institutions, and Requiring the Use of the Government Procurement System. It accordingly repealed, amended or modified all executive issuances, orders, rules and regulations or parts thereof inconsistent therewith.[56]

On January 10, 2003, President Arroyo signed into law RA 9184. It took effect on January 26, 2004, or fifteen days after its publication in two newspapers of general circulation.[57] It expressly repealed, among others, EO 40, EO 262 (2000), EO 302(1996) and PD 1594, as amended:

SEC. 76. Repealing Clause. This law repeals Executive Order No. 40, series of 2001, entitled Consolidating Procurement Rules and Procedures for All National Government Agencies, Government Owned or Controlled Corporations and/or Government Financial Institutions, and Requiring the Use of the Government Electronic Procurement System; Executive Order No. 262, series of 1996, entitled Amending Executive Order No. 302, series of 1996, entitled Providing Policies, Guidelines, Rules and Regulations for the Procurement of Goods/Supplies by the National Government and Section 3 of Executive Order No. 201, series of 2000, entitled Providing Additional Policies and Guidelines in the Procurement of Goods/Supplies by the National Government; Executive Order No. 302, series of 1996, entitled Providing Policies, Guidelines, Rules and Regulations for the Procurement of Goods/Supplies by the National Government and Presidential Decree No. 1594 dated June 11, 1978, entitled Prescribing Policies, Guidelines, Rules and Regulations for Government Infrastructure Contracts. This law amends Title Six, Book Two of Republic Act No. 7160, otherwise known as the Local Government Code of 1991; the relevant provisions of Executive Order No. 164, series of 1987, entitled Providing Additional Guidelines in the Processing and Approval of Contracts of the National Government; and the relevant

provisions of Republic Act No. 7898 dated February 23, 1995, entitled An Act Providing for the Modernization of the Armed Forces of the Philippines and for Other Purposes. Any other law, presidential decree or issuance, executive order, letter of instruction, administrative order, proclamation, charter, rule or regulation and/or parts thereof contrary to or inconsistent with the provisions of this Act is hereby repealed, modified or amended accordingly.

In addition to these laws, RA 4860, as amended, must be mentioned as Section 4 thereof provides that [i]n the contracting of any loan, credit or indebtedness under this Act, the President of the Philippines may, when necessary, agree to waive or modify the application of any law granting preferences or imposing restrictions on international competitive bidding x x x Provided, finally, That the method and procedure in the comparison of bids shall be the subject of agreement between the Philippine Government and the lending institution.

EO 40, not RA 9184, is applicable to the procurement process undertaken for the CP I project. RA 9184 cannot be given retroactive application.

It is not disputed that with respect to the CP I project, the Invitation to Prequalify and to Bid for its implementation was published in two leading national newspapers, namely, the Manila Times and Manila Standard on November 22, 29 and December 5, 2002. At the time, the law in effect was EO 40. On the other hand, RA 9184 took effect two months later or on January 26, 2003. Further, its full implementation was even delayed as IRR-A was only approved by President Arroyo on September 18, 2003 and subsequently published on September 23, 2003 in the Manila Times and Malaya newspapers.[58]

The provisions of EO 40 apply to the procurement process pertaining to the CP I project as it is explicitly provided in Section 1 thereof that:

SEC. 1. Scope and Application. This Executive Order shall apply to see procurement of (a) goods, supplies, materials and related service; (b) civil works; and (c) consulting services, by all National Government agencies, including State Universities and Colleges (SUCs), GovernmentOwned or Controlled Corporations (GOCCs) and Government Financial Institutions (GFIs), hereby referred to as Agencies. This Executive Order shall cover the procurement process from the pre-procurement conference up to the award of the contract.

Nothing in this Order shall negate any existing and future government commitments with respect to the bidding and award of contracts financed partly or wholly with funds from international financing institutions as well as from bilateral and similar foreign sources.

The procurement process basically involves the following steps: (1) pre-procurement conference; (2) advertisement of the invitation to bid; (3) pre-bid conference; (4) eligibility check of prospective bidders; (5) submission and receipt of bids; (6) modification and withdrawal of bids; (7) bid opening and examination; (8) bid evaluation; (9) post qualification; (10) award of contract and notice to proceed.[59] Clearly then, when the Invitation to Prequalify and to Bid for the implementation of the CP I project was published on November 22, 29 and December 5, 2002, the procurement process thereof had already commenced and the application of EO 40 to the procurement process for the CP I project had already attached.

RA 9184 cannot be applied retroactively to govern the procurement process relative to the CP I project because it is well settled that a law or regulation has no retroactive application unless it expressly provides for retroactivity.[60] Indeed, Article 4 of the Civil Code is clear on the matter: [l]aws shall have no retroactive effect, unless the contrary is provided. In the absence of such categorical provision, RA 9184 will not be applied retroactively to the CP I project whose procurement process commenced even before the said law took effect.

That the legislators did not intend RA 9184 to have retroactive effect could be gleaned from the IRR-A formulated by the Joint Congressional Oversight Committee (composed of the Chairman of the Senate Committee on Constitutional Amendments and Revision of Laws, and two members thereof appointed by the Senate President and the Chairman of the House Committee on Appropriations, and two members thereof appointed by the Speaker of the House of Representatives) and the Government Procurement Policy Board (GPPB). Section 77 of the IRR-A states, thus:

SEC. 77. Transitory Clause In all procurement activities, if the advertisement or invitation for bids was issued prior to the effectivity of the Act, the provisions of E.O. 40 and its IRR, P.D. 1594 and its IRR, R.A. 7160 and its IRR, or other applicable laws, as the case may be, shall govern. In cases where the advertisements or invitations for bids were issued after the effectivity of the Act but before the effectivity of this IRR-A, procuring entities may continue adopting the procurement procedures, rules and regulations provided in E.O. 40 and its IRR, P.D. 1594 and its IRR, R.A. 7160 and its IRR, or other applicable laws, as the case may be.

In other words, under IRR-A, if the advertisement of the invitation for bids was issued prior to the effectivity of RA 9184, such as in the case of the CP I project, the provisions of EO 40 and its IRR, and PD 1594 and its IRR in the case of national government agencies, and RA 7160 and its IRR in the case of local government units, shall govern.

Admittedly, IRR-A covers only fully domestically-funded procurement activities from procurement planning up to contract implementation and that it is expressly stated that IRR-B for foreign-funded procurement activities shall be subject of a subsequent issuance.[61] Nonetheless, there is no reason why the policy behind Section 77 of IRR-A cannot be applied to foreign-funded procurement projects like the CP I project. Stated differently, the policy on the prospective or non-retroactive application of RA 9184 with respect to domestically-funded procurement projects cannot be any different with respect to foreign-funded procurement projects like the CP I project. It would be incongruous, even absurd, to provide for the prospective application of RA 9184 with respect to domestically-funded procurement projects and, on the other hand, as urged by the petitioners, apply RA 9184 retroactively with respect to foreign- funded procurement projects. To be sure, the lawmakers could not have intended such an absurdity.

Thus, in the light of Section 1 of EO 40, Section 77 of IRR-A, as well as the fundamental rule embodied in Article 4 of the Civil Code on prospectivity of laws, the Court holds that the procurement process for the implementation of the CP I project is governed by EO 40 and its IRR, not RA 9184.

Under EO 40, the award of the contract to private respondent China Road & Bridge Corporation is valid

Section 25 of EO 40 provides that [t]he approved budget of the contract shall be the upper limit or ceiling of the bid price. Bid prices which exceed this ceiling shall be disqualified outright from further participating in the bidding. There shall be no lower limit to the amount of the award. x x x It should be observed that this text is almost similar to the wording of Section 31 of RA 9184, relied upon by the petitioners in contending that since the bid price of private respondent China Road & Bridge Corporation exceeded the ABC, then it should not have been awarded the contract for the CP I project.

Nonetheless, EO 40 expressly recognizes as an exception to its scope and application those government commitments with respect to bidding and award of contracts financed partly or wholly with funds from international financing institutions as well as from bilateral and other similar foreign sources. The pertinent portion of Section 1 of EO 40 is quoted anew:

SEC. 1. Scope and Application. x x x

Nothing in this Order shall negate any existing and future government commitments with respect to the bidding and award of contracts financed partly or wholly with funds from international financing institutions as well as from bilateral and similar foreign sources.

In relation thereto, Section 4 of RA 4860, as amended, was correctly cited by the respondents as likewise authorizing the President, in the contracting of any loan, credit or indebtedness thereunder, when necessary, agree to waive or modify the application of any law granting preferences or imposing restrictions on international competitive bidding x x x. The said provision of law further provides that the method and procedure in the comparison of bids shall be the subject of agreement between the Philippine Government and the lending institution.

Consequently, in accordance with these applicable laws, the procurement of goods and services for the CP I project is governed by the corresponding loan agreement entered into by the government and the JBIC, i.e., Loan Agreement No. PH-P204. The said loan agreement stipulated that the procurement of goods and services for the Arterial Road Links Development Project (Phase IV), of which CP I is a component, is to be governed by the JBIC Procurement Guidelines. Section 5.06, Part II (International Competitive Bidding) thereof quoted earlier reads:

Section 5.06. Evaluation and Comparison of Bids xxx (e) Any procedure under which bids above or below a predetermined bid value assessment are automatically disqualified is not permitted.[62]

It is clear that the JBIC Procurement Guidelines proscribe the imposition of ceilings on bid prices. On the other hand, it enjoins the award of the contract to the bidder whose bid has been determined to be the lowest evaluated bid. The pertinent provision, quoted earlier, is reiterated, thus:

Section 5.09. Award of Contract The contract is to be awarded to the bidder whose bid has been determined to be the lowest evaluated bid and who meets the appropriate standards of capability and financial resources. A bidder shall not be required as a condition of award to undertake responsibilities or work not stipulated in the specifications or to modify the bid.[63]

Since these terms and conditions are made part of Loan Agreement No. PH-P204, the government is obliged to observe and enforce the same in the procurement of goods and services for the CP I project. As shown earlier, private respondent China Road & Bridge Corporations bid was the lowest evaluated bid, albeit 28.95% higher than the ABC. In accordance with the JBIC Procurement Guidelines, therefore, it was correctly awarded the contract for the CP I project.

Even if RA 9184 were to be applied retroactively, the terms of the Exchange of Notes dated December 27, 1999 and Loan Agreement No. PH-P204 would still govern the procurement for the CP I project

For clarity, Section 4 of RA 9184 is quoted anew, thus:

SEC. 4. Scope and Applications. This Act shall apply to the Procurement of Infrastructure Projects, Goods and Consulting Services, regardless of source of funds, whether local or foreign, by all branches and instrumentalities of government, its departments, offices and agencies, including government-owned and/or controlled corporations and local government units, subject to the provisions of Commonwealth Act No. 138. Any treaty or international or executive agreement affecting the subject matter of this Act to which the Philippine government is a signatory shall be observed.

The petitioners, in order to place the procurement process undertaken for the CP I project within the ambit of RA 9184, vigorously assert that Loan Agreement No. PH-P204 is neither a treaty, an international agreement nor an executive agreement. They cite Executive Order No. 459 dated November 25, 1997 where the three agreements are defined in this wise:

a) International agreement shall refer to a contract or understanding, regardless of nomenclature, entered into between the Philippines and another government in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments. b) Treaties international agreements entered into by the Philippines which require legislative concurrence after executive ratification. This term may include compacts like conventions, declarations, covenants and acts.

c) Executive agreements similar to treaties except that they do not require legislative concurrence.[64] The petitioners mainly argue that Loan Agreement No. PH-P204 does not fall under any of the three categories because to be any of the three, an agreement had to be one where the parties are the Philippines as a State and another State. The JBIC, the petitioners maintain, is a Japanese banking agency, which presumably has a separate juridical personality from the Japanese Government.

The petitioners arguments fail to persuade. The Court holds that Loan Agreement No. PH-P204 taken in conjunction with the Exchange of Notes dated December 27, 1999 between the Japanese Government and the Philippine Government is an executive agreement.

To recall, Loan Agreement No. PH-P204 was executed by and between the JBIC and the Philippine Government pursuant to the Exchange of Notes executed by and between Mr. Yoshihisa Ara, Ambassador Extraordinary and Plenipotentiary of Japan to the Philippines, and then Foreign Affairs Secretary Siazon, in behalf of their respective governments. The Exchange of Notes expressed that the two governments have reached an understanding concerning Japanese loans to be extended to the Philippines and that these loans were aimed at promoting our countrys economic stabilization and development efforts.

Loan Agreement No. PH-P204 was subsequently executed and it declared that it was so entered by the parties [i]n the light of the contents of the Exchange of Notes between the Government of Japan and the Government of the Republic of the Philippines dated December 27, 1999, concerning Japanese loans to be extended with a view to promoting the economic stabilization and development efforts of the Republic of the Philippines.[65] Under the circumstances, the JBIC may well be considered an adjunct of the Japanese Government. Further, Loan Agreement No. PH-P204 is indubitably an integral part of the Exchange of Notes. It forms part of the Exchange of Notes such that it cannot be properly taken independent thereof.

In this connection, it is well to understand the definition of an exchange of notes under international law. The term is defined in the United Nations Treaty Collection in this wise:

An exchange of notes is a record of a routine agreement that has many similarities with the private law contract. The agreement consists of the exchange of two documents, each of the parties being in the possession of the one signed by the representative of the other. Under the usual procedure, the accepting State repeats the text of the offering State to record its assent. The signatories of the letters may be government Ministers, diplomats or departmental heads. The technique of exchange of notes is frequently resorted to, either because of its speedy procedure, or, sometimes, to avoid the process of legislative approval.[66]

It is stated that treaties, agreements, conventions, charters, protocols, declarations, memoranda of understanding, modus vivendi and exchange of notes all refer to international instruments binding at international law.[67] It is further explained that-

Although these instruments differ from each other by title, they all have common features and international law has applied basically the same rules to all these instruments. These rules are the result of long practice among the States, which have accepted them as binding norms in their mutual relations. Therefore, they are regarded as international customary law. Since there was a general desire to codify these customary rules, two international conventions were negotiated. The 1969 Vienna Convention on the Law of Treaties (1969 Vienna Convention), which entered into force on 27 January 1980, contains rules for treaties concluded between States. The 1986 Vienna Convention on the Law of Treaties between States and International Organizations (1986 Vienna Convention), which has still not entered into force, added rules for treaties with international organizations as parties. Both the 1969 Vienna Convention and the 1986 Vienna Convention do not distinguish between the different designations of these instruments. Instead, their rules apply to all of those instruments as long as they meet the common requirements.[68]

Significantly, an exchange of notes is considered a form of an executive agreement, which becomes binding through executive action without the need of a vote by the Senate or Congress. The following disquisition by Francis B. Sayre, former United States High Commissioner to the Philippines, entitled The Constitutionality of Trade Agreement Acts, quoted in Commissioner of Customs v. Eastern Sea Trading,[69] is apropos:

Agreements concluded by the President which fall short of treaties are commonly referred to as executive agreements and are no less common in our scheme of government than are the more formal instruments treaties and conventions. They sometimes take the form of exchange of notes and at other times that of more formal documents denominated agreements or protocols. The point where ordinary correspondence between this and other governments ends and agreements whether denominated executive agreements or exchange of notes or otherwise begin, may sometimes be difficult of ready ascertainment. It would be useless to undertake to discuss here the large variety of executive agreements as such, concluded from time to time. Hundreds of executive agreements, other than those entered into under the trade-agreements act, have been negotiated with foreign governments. x x x[70]

The Exchange of Notes dated December 27, 1999, stated, inter alia, that the Government of Japan would extend loans to the Philippines with a view to promoting its economic stabilization and development efforts; Loan I in the amount of Y79,8651,000,000 would be extended by the JBIC to the Philippine Government to implement the projects in the List A (including the Arterial Road Links Development Project - Phase IV); and that such loan (Loan I) would be used to cover payments to be made by the Philippine executing agencies to suppliers, contractors and/or consultants of eligible source countries under such contracts as may be entered into between them for purchases of products and/or services required for the implementation of the projects enumerated in the List A.[71] With respect to the procurement of the goods and services for the projects, it bears reiterating that as stipulated: 3. The Government of the Republic of the Philippines will ensure that the products and/or services mentioned in sub-paragraph (1) of paragraph 3 of Part I and sub-paragraph (1) of paragraph 4 of Part II are procured in accordance with the guidelines for procurement of the Bank, which set forth, inter alia, the procedures of international tendering to be followed except where such procedures are inapplicable or inappropriate.[72]

The JBIC Procurements Guidelines, as quoted earlier, forbids any procedure under which bids above or below a predetermined bid value assessment are automatically disqualified. Succinctly put, it absolutely prohibits the imposition of ceilings on bids.

Under the fundamental principle of international law of pacta sunt servanda,[73] which is, in fact, embodied in Section 4 of RA 9184 as it provides that [a]ny treaty or international or executive agreement affecting the subject matter of this Act to which the Philippine government is a signatory shall be observed, the DPWH, as the executing agency of the projects financed by Loan Agreement No. PH-P204, rightfully awarded the contract for the implementation of civil works for the CP I project to private respondent China Road & Bridge Corporation.

WHEREFORE, premises considered, the petition is DISMISSED.

SO ORDERED. PHARMACEUTICAL and HEALTH CARE ASSOCIATION of the PHILIPPINES, Petitioner, Present: G.R. NO. 173034

PUNO, C.J. QUISUMBING, YNARES-SANTIAGO, SANDOVAL-GUTIERREZ, CARPIO, - versus AUSTRIA-MARTINEZ, CORONA, CARPIO-MORALES, AZCUNA, TINGA, CHICO-NAZARIO, GARCIA, VELASCO, JR., NACHURA, and REYES, JJ. HEALTH SECRETARY FRANCISCO T. DUQUE III; HEALTH UNDERSECRETARIES DR. ETHELYN P. NIETO, DR. MARGARITA M. GALON, ATTY. ALEXANDER A. PADILLA, & DR. JADE F. DEL MUNDO; and ASSISTANT SECRETARIES DR. MARIO C. VILLAVERDE, DR. DAVID J. LOZADA, AND DR. NEMESIO T. GAKO, Promulgated:

Respondents. October 9, 2007 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

AUSTRIA-MARTINEZ, J.: The Court and all parties involved are in agreement that the best nourishment for an infant is mother's milk. There is nothing greater than for a mother to nurture her beloved child straight from her bosom. The ideal is, of course, for each and every Filipino child to enjoy the unequaled benefits of breastmilk. be attained? But how should this end

Before the Court is a petition for certiorari under Rule 65 of the Rules of Court, seeking to nullify Administrative Order (A.O.) No. 2006-0012 entitled, Revised Implementing Rules and Regulations of Executive Order No. 51, Otherwise Known as The Milk Code, Relevant International Agreements, Penalizing Violations Thereof, and for Other Purposes (RIRR). Petitioner posits that the RIRR is not valid as it contains provisions that are not constitutional and go beyond the law it is supposed to implement.

Named as respondents are the Health Secretary, Undersecretaries, and Assistant Secretaries of the Department of Health (DOH). For purposes of herein petition, the DOH is deemed impleaded as a co-respondent since respondents issued the questioned RIRR in their capacity as officials of said executive agency.[1]

Executive Order No. 51 (Milk Code) was issued by President Corazon Aquino on October 28, 1986 by virtue of the legislative powers granted to the president under the Freedom Constitution. One of the preambular clauses of the Milk Code states that the law seeks to give effect to Article 11[2] of the International Code of Marketing of

Breastmilk Substitutes (ICMBS), a code adopted by the World Health Assembly (WHA) in 1981. From 1982 to 2006, the WHA adopted several Resolutions to the effect that breastfeeding should be supported, promoted and protected, hence, it should be ensured that nutrition and health claims are not permitted for breastmilk substitutes. In 1990, the Philippines ratified the International Convention on the Rights of the Child. Article 24 of said instrument provides that State Parties should take appropriate measures to diminish infant and child mortality, and ensure that all segments of society, specially parents and children, are informed of the advantages of breastfeeding.

On May 15, 2006, the DOH issued herein assailed RIRR which was to take effect on July 7, 2006.

However, on June 28, 2006, petitioner, representing its members that are manufacturers of breastmilk substitutes, filed the present Petition for Certiorari and Prohibition with Prayer for the Issuance of a Temporary Restraining Order (TRO) or Writ of Preliminary Injunction.

The main issue raised in the petition is whether respondents officers of the DOH acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and in violation of the provisions of the Constitution in promulgating the RIRR.[3]

On August 15, 2006, the Court issued a Resolution granting a TRO enjoining respondents from implementing the questioned RIRR.

After the Comment and Reply had been filed, the Court set the case for oral arguments on June 19, 2007. The Court issued an Advisory (Guidance for Oral Arguments) dated June 5, 2007, to wit:
The Court hereby sets the following issues:

1. Whether or not petitioner is a real party-in-interest;

2. Whether Administrative Order No. 2006-0012 or the Revised Implementing Rules and Regulations (RIRR) issued by the Department of Health (DOH) is not constitutional;

2.1 Whether the RIRR is in accord with the provisions of Executive Order No. 51 (Milk Code);

2.2 Whether pertinent international agreements1 entered into by the Philippines are part of the law of the land and may be implemented by the DOH through the RIRR; If in the affirmative, whether the RIRR is in accord with the international agreements;

2.3 Whether Sections 4, 5(w), 22, 32, 47, and 52 of the RIRR violate the due process clause and are in restraint of trade; and

2.4 Whether Section 13 of the RIRR on Total Effect provides sufficient standards. _____________
1 (1) United Nations Convention on the Rights of the Child; (2) the WHO and Unicef 2002 and Young Child Feeding; and (3) various World Health Assembly (WHA) Resolutions. Global Strategy on Infant

The parties filed their respective memoranda. The petition is partly imbued with merit.

On the issue of petitioner's standing

With regard to the issue of whether petitioner may prosecute this case as the real party-in-interest, the Court adopts the view enunciated in Executive Secretary v. Court of Appeals,[4] to wit:
The modern view is that an association has standing to complain of injuries to its members. This view fuses the legal identity of an association with that of its members. An association has standing to file suit for its workers despite its lack of direct interest if its members are affected by the action. An organization has standing to assert the concerns of its constituents.

xxxx

x x x We note that, under its Articles of Incorporation, the respondent was organized x x x to act as the representative of any individual, company, entity or association on matters related to the manpower recruitment industry, and to perform other acts and activities necessary to accomplish the purposes embodied therein. The respondent is, thus, the appropriate party to assert the rights of its members, because it and its members are in every practical sense identical. x x x The respondent [association] is but the medium through which its individual members seek to make more effective the expression of their voices and the redress of their grievances. [5] (Emphasis supplied)

which was reasserted in Purok Bagong Silang Association, Inc. v. Yuipco,[6] where the Court ruled that an association has the legal personality to represent its members because the results of the case will affect their vital interests.[7] Herein petitioner's Amended Articles of Incorporation contains a similar provision just like in Executive Secretary, that the association is formed to represent directly or through approved representatives the pharmaceutical and health care industry before the Philippine Government and any of its agencies, the medical professions and the general public.[8] Thus, as an organization, petitioner definitely

has an interest in fulfilling its avowed purpose of representing members who are part of the pharmaceutical and health care industry. Petitioner is duly authorized[9] to take the appropriate course of action to bring to the attention of government agencies and the courts any grievance suffered by its members which are directly affected by the RIRR. Petitioner, which is mandated by its Amended Articles of Incorporation to represent the entire industry, would be remiss in its duties if it fails to act on governmental action that would affect any of its industry members, no matter how few or numerous they are. Hence, petitioner, whose legal identity is deemed fused with its members, should be considered as a real party-in-interest which stands to be benefited or injured by any judgment in the present action.

On the constitutionality of the provisions of the RIRR First, the Court will determine if pertinent international instruments adverted to by respondents are part of the law of the land.

Petitioner assails the RIRR for allegedly going beyond the provisions of the Milk Code, thereby amending and expanding the coverage of said law. The defense of the DOH is that the RIRR implements not only the Milk Code but also various international instruments[10] regarding infant and young child nutrition. It is respondents' position that said international instruments are deemed part of the law of the land and therefore the DOH may implement them through the RIRR.

The Court notes that the following international instruments invoked by respondents, namely: (1) The United Nations Convention on the Rights of the Child; (2) The International Covenant on Economic, Social and Cultural Rights; and (3) the

Convention on the Elimination of All Forms of Discrimination Against Women, only provide in general terms that steps must be taken by State Parties to diminish infant and child mortality and inform society of the advantages of breastfeeding, ensure the health and well-being of families, and ensure that women are provided with services and nutrition in connection with pregnancy and lactation. Said instruments do not contain specific provisions regarding the use or marketing of breastmilk substitutes.

The international instruments that do have specific provisions regarding breastmilk substitutes are the ICMBS and various WHA Resolutions.

Under the 1987 Constitution, international law can become part of the sphere of domestic law either by transformation or incorporation.[11] The transformation method requires that an international law be transformed into a domestic law through a constitutional mechanism such as local legislation. The incorporation method applies when, by mere constitutional declaration, international law is deemed to have the force of domestic law.[12]

Treaties become part of the law of the land through transformation pursuant to Article VII, Section 21 of the Constitution which provides that [n]o treaty or international agreement shall be valid and effective unless concurred in by at least twothirds of all the members of the Senate. Thus, treaties or conventional international law must go through a process prescribed by the Constitution for it to be transformed into municipal law that can be applied to domestic conflicts.[13]

The ICMBS and WHA Resolutions are not treaties as they have not been concurred in by at least two-thirds of all members of the Senate as required under Section 21, Article VII of the 1987 Constitution.

However, the ICMBS which was adopted by the WHA in 1981 had been transformed into domestic law through local legislation, the Milk Code. Consequently, it is the Milk Code that has the force and effect of law in this jurisdiction and not the ICMBS per se.

The Milk Code is almost a verbatim reproduction of the ICMBS, but it is well to emphasize at this point that the Code did not adopt the provision in the ICMBS absolutely prohibiting advertising or other forms of promotion to the general public of products within the scope of the ICMBS. Instead, the Milk Code expressly provides that advertising, promotion, or other marketing materials may be allowed if such materials are duly authorized and approved by the Inter-Agency Committee (IAC). On the other hand, Section 2, Article II of the 1987 Constitution, to wit:
SECTION 2. The Philippines renounces war as an instrument of national policy, adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of peace, equality, justice, freedom, cooperation and amity with all nations. (Emphasis supplied)

embodies the incorporation method.[14] In Mijares v. Ranada,[15] the Court held thus:
[G]enerally accepted principles of international law, by virtue of the incorporation clause of the Constitution, form part of the laws of the land even if they do not derive from

treaty obligations. The classical formulation in international law sees those customary rules accepted as binding result from the combination [of] two elements: the established, widespread, and consistent practice on the part of States; and a psychological element known as the opinion juris sive necessitates (opinion as to law or necessity). Implicit in the latter element is a belief that the practice in question is rendered obligatory by the existence of a rule of law requiring it.[16] (Emphasis supplied)

Generally accepted principles of international law refers to norms of general or customary international law which are binding on all states,[17] i.e., renunciation of war as an instrument of national policy, the principle of sovereign immunity,[18] a person's right to life, liberty and due process,[19] and pacta sunt servanda,[20] among others. The concept of generally accepted principles of law has also been depicted in this wise:
Some legal scholars and judges look upon certain general principles of law as a primary source of international law because they have the character of jus rationale and are valid through all kinds of human societies. (Judge Tanaka in his dissenting opinion in the 1966 South West Africa Case, 1966 I.C.J. 296). O'Connell holds that certain priniciples are part of international law because they are basic to legal systems generally and hence part of the jus gentium. These principles, he believes, are established by a process of reasoning based on the common identity of all legal systems. If there should be doubt or disagreement, one must look to state practice and determine whether the municipal law principle provides a just and acceptable solution. x x x [21] (Emphasis supplied)

Fr. Joaquin G. Bernas defines customary international law as follows:

Custom or customary international law means a general and consistent practice of states followed by them from a sense of legal obligation [opinio juris]. (Restatement) This statement contains the two basic elements of custom: the material factor, that is, how states behave, and the psychological or subjective factor, that is, why they behave the way they do. xxxx The initial factor for determining the existence of custom is the actual behavior of states. This includes several elements: duration, consistency, and generality of the practice of states. The required duration can be either short or long. x x x xxxx Duration therefore is not the most important element. More important is the consistency and the generality of the practice. x x x xxxx Once the existence of state practice has been established, it becomes necessary to determine why states behave the way they do. Do states behave the way they do because they consider it obligatory to behave thus or do they do it only as a matter of courtesy?

Opinio juris, or the belief that a certain form of behavior is obligatory, is what makes practice an international rule. Without it, practice is not law.[22] (Underscoring and Emphasis supplied)

Clearly, customary international law is deemed incorporated into our domestic system.[23] WHA Resolutions have not been embodied in any local legislation. Have they attained the status of customary law and should they then be deemed incorporated as part of the law of the land? The World Health Organization (WHO) is one of the international specialized agencies allied with the United Nations (UN) by virtue of Article 57,[24] in relation to Article 63[25] of the UN Charter. Under the 1946 WHO Constitution, it is the WHA which determines the policies of the WHO,[26] and has the power to adopt regulations concerning advertising and labeling of biological, pharmaceutical and similar products moving in international commerce,[27] and to make recommendations to members with respect to any matter within the competence of the Organization.[28] The legal effect of its regulations, as opposed to recommendations, is quite different.

Regulations, along with conventions and agreements, duly adopted by the WHA bind member states thus:
Article 19. The Health Assembly shall have authority to adopt conventions or agreements with respect to any matter within the competence of the Organization. A two-thirds vote of the Health Assembly shall be required for the adoption of such conventions or agreements, which shall come into force for each Member when accepted by it in accordance with its constitutional processes. Article 20. Each Member undertakes that it will, within eighteen months after the adoption by the Health Assembly of a convention or agreement, take action relative to the acceptance of such convention or agreement. Each Member shall notify the Director-General of the action taken, and if it does not accept such convention or agreement within the time limit, it will furnish a statement of the reasons for non-acceptance. In case of acceptance, each Member

agrees to make an annual report to the Director-General in accordance with Chapter XIV.

Article 21. The Health Assembly shall have authority to adopt regulations concerning: (a) sanitary and quarantine requirements and other procedures designed to prevent the international spread of disease; (b) nomenclatures with respect to diseases, causes of death and public health practices; (c) standards with respect to diagnostic procedures for international use; (d) standards with respect to the safety, purity and potency of biological, pharmaceutical and similar products moving in international commerce; (e) advertising and labeling of biological, pharmaceutical and similar products moving in international commerce.

Article 22. Regulations adopted pursuant to Article 21 shall come into force for all Members after due notice has been given of their adoption by the Health Assembly except for such Members as may notify the Director-General of rejection or reservations within the period stated in the notice. (Emphasis supplied)

On the other hand, under Article 23, recommendations of the WHA do not come into force for members, in the same way that conventions or agreements under Article 19 and regulations under Article 21 come into force. Article 23 of the WHO Constitution reads:
Article 23. The Health Assembly shall have authority to make recommendations to Members with respect to any matter within the competence of the Organization. (Emphasis supplied)

The absence of a provision in Article 23 of any mechanism by which the recommendation would come into force for member states is conspicuous.

The former Senior Legal Officer of WHO, Sami Shubber, stated that WHA recommendations are generally not binding, but they carry moral and political weight, as they constitute the judgment on a health issue of the collective membership of the highest international body in the field of health.[29] Even the ICMBS itself was adopted as a mere recommendation, as WHA Resolution No. 34.22 states:

The Thirty-Fourth World Health Assembly x x x adopts, in the sense of Article 23 of the Constitution, the International Code of Marketing of Breastmilk Substitutes annexed to the present resolution. (Emphasis supplied)

The Introduction to the ICMBS also reads as follows:

In January 1981, the Executive Board of the World Health Organization at its sixtyseventh session, considered the fourth draft of the code, endorsed it, and unanimously recommended to the Thirty-fourth World Health Assembly the text of a resolution by which it would adopt the code in the form of a recommendation rather than a regulation. x x x

(Emphasis supplied) The legal value of WHA Resolutions as recommendations is summarized in Article 62 of the WHO Constitution, to wit:
Art. 62. Each member shall report annually on the action taken with respect to recommendations made to it by the Organization, and with respect to conventions, agreements and regulations.

Apparently, the WHA Resolution adopting the ICMBS and subsequent WHA Resolutions urging member states to implement the ICMBS are merely recommendatory and legally non-binding. Thus, unlike what has been done with the ICMBS whereby the legislature enacted most of the provisions into law which is the Milk Code, the subsequent WHA Resolutions,[30] specifically providing for exclusive breastfeeding from 0-6 months, continued breastfeeding up to 24 months, and absolutely prohibiting advertisements and promotions of breastmilk substitutes, have not been adopted as a domestic law.

It is propounded that WHA Resolutions may constitute soft law or non-binding norms, principles and practices that influence state behavior.[31]

Soft law does not fall into any of the categories of international law set forth in Article 38, Chapter III of the 1946 Statute of the International Court of Justice.[32] It is, however, an expression of non-binding norms, principles, and practices that influence state behavior.[33] Certain declarations and resolutions of the UN General Assembly fall under this category.[34] The most notable is the UN Declaration of Human Rights, which this Court has enforced in various cases, specifically, Government of Hongkong Special Administrative Region v. Olalia,[35] Mejoff v. Director of Prisons,[36] Mijares v. Raada[37] and Shangri-la International Hotel Management, Ltd. v. Developers Group of Companies, Inc..[38] The World Intellectual Property Organization (WIPO), a specialized agency

attached to the UN with the mandate to promote and protect intellectual property worldwide, has resorted to soft law as a rapid means of norm creation, in order to reflect and respond to the changing needs and demands of its constituents.[39] Other international organizations which have resorted to soft law include the International Labor Organization and the Food and Agriculture Organization (in the form of the Codex Alimentarius).[40]

WHO has resorted to soft law. This was most evident at the time of the Severe Acute Respiratory Syndrome (SARS) and Avian flu outbreaks.
Although the IHR Resolution does not create new international law binding on WHO member states, it provides an excellent example of the power of "soft law" in international relations. International lawyers typically distinguish binding rules of international law-"hard law"-from non-binding norms, principles, and practices that influence state behavior-"soft law." WHO has during its existence generated many soft law norms, creating a "soft law regime" in international governance for public health. The "soft law" SARS and IHR Resolutions represent significant steps in laying the political groundwork for improved international cooperation on infectious diseases. These resolutions clearly define WHO member states' normative duty to cooperate fully with other

countries and with WHO in connection with infectious disease surveillance and response to outbreaks. This duty is neither binding nor enforceable, but, in the wake of the SARS epidemic, the duty is powerful politically for two reasons. First, the SARS outbreak has taught the lesson that participating in, and enhancing, international cooperation on infectious disease controls is in a country's self-interest x x x if this warning is heeded, the "soft law" in the SARS and IHR Resolution could inform the development of general and consistent state practice on infectious disease surveillance and outbreak response, perhaps crystallizing eventually into customary international law on infectious disease prevention and control.[41]

In the Philippines, the executive department implemented certain measures recommended by WHO to address the outbreaks of SARS and Avian flu by issuing Executive Order (E.O.) No. 201 on April 26, 2003 and E.O. No. 280 on February 2, 2004, delegating to various departments broad powers to close down schools/establishments, conduct health surveillance and monitoring, and ban importation of poultry and agricultural products.

It must be emphasized that even under such an international emergency, the duty of a state to implement the IHR Resolution was still considered not binding or enforceable, although said resolutions had great political influence.

As previously discussed, for an international rule to be considered as customary law, it must be established that such rule is being followed by states because they consider it obligatory to comply with such rules (opinio juris). Respondents have not presented any evidence to prove that the WHA Resolutions, although signed by most of the member states, were in fact enforced or practiced by at least a majority of the member states; neither have respondents proven that any compliance by member states with said WHA Resolutions was obligatory in nature.

Respondents failed to establish that the provisions of pertinent WHA Resolutions are customary international law that may be deemed part of the law of the land.

Consequently, legislation is necessary to transform the provisions of the WHA Resolutions into domestic law. The provisions of the WHA Resolutions cannot be considered as part of the law of the land that can be implemented by executive agencies without the need of a law enacted by the legislature.

Second, the Court will determine whether the DOH may implement the provisions of the WHA Resolutions by virtue of its powers and functions under the Revised Administrative Code even in the absence of a domestic law.

Section 3, Chapter 1, Title IX of the Revised Administrative Code of 1987 provides that the DOH shall define the national health policy and implement a national health plan within the framework of the government's general policies and plans, and issue orders and regulations concerning the implementation of established health policies.

It is crucial to ascertain whether the absolute prohibition on advertising and other forms of promotion of breastmilk substitutes provided in some WHA Resolutions has been adopted as part of the national health policy.

Respondents submit that the national policy on infant and young child feeding is embodied in A.O. No. 2005-0014, dated May 23, 2005. Basically, the Administrative Order declared the following policy guidelines: (1) ideal breastfeeding practices, such as early initiation of breastfeeding, exclusive breastfeeding for the first six months,

extended breastfeeding up to two years and beyond; (2) appropriate complementary feeding, which is to start at age six months; (3) micronutrient supplementation; (4) universal salt iodization; (5) the exercise of other feeding options; and (6) feeding in exceptionally difficult circumstances. Indeed, the primacy of breastfeeding for children is emphasized as a national health policy. However, nowhere in A.O. No. 2005-0014 is it declared that as part of such health policy, the advertisement or promotion of breastmilk substitutes should be absolutely prohibited.

The national policy of protection, promotion and support of breastfeeding cannot automatically be equated with a total ban on advertising for breastmilk substitutes. In view of the enactment of the Milk Code which does not contain a total ban on the advertising and promotion of breastmilk substitutes, but instead, specifically creates an IAC which will regulate said advertising and promotion, it follows that a total ban policy could be implemented only pursuant to a law amending the Milk Code passed by the constitutionally authorized branch of government, the legislature. Thus, only the provisions of the Milk Code, but not those of subsequent WHA Resolutions, can be validly implemented by the DOH through the subject RIRR. Third, the Court will now determine whether the provisions of the RIRR are in accordance with those of the Milk Code.

In support of its claim that the RIRR is inconsistent with the Milk Code, petitioner alleges the following:

1. The Milk Code limits its coverage to children 0-12 months old, but the RIRR extended its coverage to young children or those from ages two years old and beyond:

MILK CODE RIRR WHEREAS, in order to ensure that safe and adequate nutrition for infants is provided, there is a need to protect and promote breastfeeding and to inform the public about the proper use of breastmilk substitutes and supplements and related products through adequate, consistent and objective information and appropriate regulation of the marketing and distribution of the said substitutes, supplements and related products; SECTION 4(e). Infant means a person falling within the age bracket of 0-12 months. Section 2. Purpose These Revised Rules and Regulations are hereby promulgated to ensure the provision of safe and adequate nutrition for infants and young children by the promotion, protection and support of breastfeeding and by ensuring the proper use of breastmilk substitutes, breastmilk supplements and related products when these are medically indicated and only when necessary, on the basis of adequate information and through appropriate marketing and distribution. Section 5(ff). Young Child means a person from the age of more than twelve (12) months up to the age of three (3) years (36 months).

2. The Milk Code recognizes that infant formula may be a proper and possible substitute for breastmilk in certain instances; but the RIRR provides exclusive breastfeeding for infants from 0-6 months and declares that there is no substitute nor replacement for breastmilk:

MILK CODE RIRR WHEREAS, in order to ensure that safe and adequate nutrition for infants is provided, there is a need to protect and promote breastfeeding and to inform the public about the proper use of breastmilk substitutes and supplements and related products through adequate, consistent and objective information and appropriate regulation of the marketing and distribution of the said substitutes, supplements and related

products; Section 4. Declaration of Principles The following are the underlying principles from which the revised rules and regulations are premised upon: a. Exclusive breastfeeding is for infants from 0 to six (6) months. b. There is no substitute or replacement for breastmilk.

3.

The Milk Code only regulates and does not impose unreasonable requirements for advertising and promotion; RIRR imposes an absolute ban on such activities for breastmilk substitutes intended for infants from 0-24 months old or beyond, and forbids the use of health and nutritional claims. Section 13 of the RIRR, which provides for a total effect in the promotion of products within the scope of the Code, is vague:

MILK CODE RIRR SECTION 6. The General Public and Mothers. (a) No advertising, promotion or other marketing materials, whether written, audio or visual, for products within the scope of this Code shall be printed, published, distributed, exhibited and broadcast unless such materials are duly authorized and approved by an inter-agency committee created herein pursuant to the applicable standards provided for in this Code. Section 4. Declaration of Principles The following are the underlying principles from which the revised rules and regulations are premised upon: xxxx f. Advertising, promotions, or sponsor-ships of infant formula, breastmilk substitutes and other related products are prohibited. Section 11. Prohibition No advertising, promotions, sponsorships, or marketing materials and activities for breastmilk substitutes intended for infants and young children up to twenty-four (24) months, shall be allowed, because they tend to convey or give subliminal messages or impressions that undermine breastmilk and

breastfeeding or otherwise exaggerate breastmilk substitutes and/or replacements, as well as related products covered within the scope of this Code. Section 13. Total Effect - Promotion of products within the scope of this Code must be objective and should not equate or make the product appear to be as good or equal to breastmilk or breastfeeding in the advertising concept. It must not in any case undermine breastmilk or breastfeeding. The total effect should not directly or indirectly suggest that buying their product would produce better individuals, or resulting in greater love, intelligence, ability, harmony or in any manner bring better health to the baby or other such exaggerated and unsubstantiated claim. Section 15. Content of Materials. - The following shall not be included in advertising, promotional and marketing materials: a. Texts, pictures, illustrations or information which discourage or tend to undermine the benefits or superiority of breastfeeding or which idealize the use of breastmilk substitutes and milk supplements. In this connection, no pictures of babies and children together with their mothers, fathers, siblings, grandparents, other relatives or caregivers (or yayas) shall be used in any advertisements for infant formula and breastmilk supplements; b. The term humanized, maternalized, close to mother's milk or similar words in describing breastmilk substitutes or milk supplements; c. Pictures or texts that idealize the use of infant and milk formula. Section 16. All health and nutrition claims for products within the scope of the Code are absolutely prohibited. For this purpose, any phrase or words that connotes to increase emotional, intellectual abilities of the infant and young child and other like phrases shall not be allowed.

4. The RIRR imposes additional labeling requirements not found in the Milk Code:

MILK CODE RIRR SECTION 10. Containers/Label.

(a) Containers and/or labels shall be designed to provide the necessary information about the appropriate use of the products, and in such a way as not to discourage breastfeeding. (b) Each container shall have a clear, conspicuous and easily readable and understandable message in Pilipino or English printed on it, or on a label, which message can not readily become separated from it, and which shall include the following points: (i) the words Important Notice or their equivalent; (ii) a statement of the superiority of breastfeeding; (iii) a statement that the product shall be used only on the advice of a health worker as to the need for its use and the proper methods of use; and (iv) instructions for appropriate preparation, and a warning against the health hazards of inappropriate preparation. Section 26. Content Each container/label shall contain such message, in both Filipino and English languages, and which message cannot be readily separated therefrom, relative the following points: (a) The words or phrase Important Notice or Government Warning or their equivalent; (b) A statement of the superiority of breastfeeding; (c) A statement that there is no substitute for breastmilk; (d) A statement that the product shall be used only on the advice of a health worker as to the need for its use and the proper methods of use; (e) (f) Instructions for appropriate prepara-tion, and a warning against the health hazards of inappropriate preparation; and The health hazards of unnecessary or improper use of infant formula and other related products including information that powdered infant formula may contain pathogenic microorganisms and must be prepared and used appropriately.

5. The Milk Code allows dissemination of information on infant formula to health professionals; the RIRR totally prohibits such activity:

MILK CODE RIRR SECTION 7. Health Care System. (b) No facility of the health care system shall be used for the purpose of promoting infant formula or other products within the scope of this Code. This Code does not, however, preclude the dissemination of information to health professionals as provided in Section 8(b). SECTION 8. Health Workers. -

(b) Information provided by manufacturers and distributors to health professionals regarding products within the scope of this Code shall be restricted to scientific and factual matters and such information shall not imply or create a belief that bottle-feeding is equivalent or superior to breastfeeding. It shall also include the information specified in Section 5(b). Section 22. No manufacturer, distributor, or representatives of products covered by the Code shall be allowed to conduct or be involved in any activity on breastfeeding promotion, education and production of Information, Education and Communication (IEC) materials on breastfeeding, holding of or participating as speakers in classes or seminars for women and children activities and to avoid the use of these venues to market their brands or company names. SECTION 16. All health and nutrition claims for products within the scope of the Code are absolutely prohibited. For this purpose, any phrase or words that connotes to increase emotional, intellectual abilities of the infant and young child and other like phrases shall not be allowed.

6. The Milk Code permits milk manufacturers and distributors to extend assistance in research and continuing education of health professionals; RIRR absolutely forbids the same.

MILK CODE RIRR SECTION 8. Health Workers (e) Manufacturers and distributors of products within the scope of this Code may assist in the research, scholarships and continuing education, of health professionals, in accordance with the rules and regulations promulgated by the Ministry of Health. Section 4. Declaration of Principles The following are the underlying principles from which the revised rules and regulations are premised upon: i. Milk companies, and their representatives, should not form part of any policymaking body or entity in relation to the advancement of breasfeeding. SECTION 22. No manufacturer, distributor, or representatives of products covered by the Code shall be allowed to conduct or be involved in any activity on breastfeeding promotion, education and production of Information, Education and Communication (IEC) materials on breastfeeding, holding of or participating as speakers in classes or seminars for women and children activities and to avoid the use of these venues to market their brands or company names. SECTION 32. Primary Responsibility of Health Workers - It is the primary responsibility of the health workers to promote, protect and support breastfeeding and appropriate infant and young child feeding. Part of this

responsibility is to continuously update their knowledge and skills on breastfeeding. No assistance, support, logistics or training from milk companies shall be permitted.

7. The Milk Code regulates the giving of donations; RIRR absolutely prohibits it.

MILK CODE RIRR SECTION 6. The General Public and Mothers. (f) Nothing herein contained shall prevent donations from manufacturers and distributors of products within the scope of this Code upon request by or with the approval of the Ministry of Health. Section 51. Donations Within the Scope of This Code - Donations of products, materials, defined and covered under the Milk Code and these implementing rules and regulations, shall be strictly prohibited. Section 52. Other Donations By Milk Companies Not Covered by this Code. - Donations of products, equipments, and the like, not otherwise falling within the scope of this Code or these Rules, given by milk companies and their agents, representatives, whether in kind or in cash, may only be coursed through the Inter Agency Committee (IAC), which shall determine whether such donation be accepted or otherwise.

8. The RIRR provides for administrative sanctions not imposed by the Milk Code.

MILK CODE RIRR Section 46. Administrative Sanctions. The following administrative sanctions shall be imposed upon any person, juridical or natural, found to have violated the provisions of the Code and its implementing Rules and Regulations: a) b) 1st violation Warning; 2nd violation Administrative fine of a minimum of Ten Thousand (P10,000.00) to Fifty Thousand (P50,000.00) Pesos, depending on the gravity and extent of the violation, including the recall of the offending product; 3rd violation Administrative Fine of a minimum of Sixty Thousand (P60,000.00) to One Hundred Fifty Thousand (P150,000.00) Pesos, depending on the gravity and extent of the violation, and in addition thereto, the recall of the offending product, and suspension of the Certificate of Product Registration (CPR);

c)

d)

4th violation Administrative Fine of a minimum of Two Hundred Thousand (P200,000.00) to Five Hundred (P500,000.00) Thousand Pesos, depending on the gravity and extent of the violation; and in addition thereto, the recall of the product, revocation of the CPR, suspension of the License to Operate (LTO) for one year; 5th and succeeding repeated violations Administrative Fine of One Million (P1,000,000.00) Pesos, the recall of the offending product, cancellation of the CPR, revocation of the License to Operate (LTO) of the company concerned, including the blacklisting of the company to be furnished the Department of Budget and Management (DBM) and the Department of Trade and Industry (DTI); An additional penalty of Two Thou-sand Five Hundred (P2,500.00) Pesos per day shall be made for every day the violation continues after having received the order from the IAC or other such appropriate body, notifying and penalizing the company for the infraction.

e)

f)

For purposes of determining whether or not there is repeated violation, each product violation belonging or owned by a company, including those of their subsidiaries, are deemed to be violations of the concerned milk company and shall not be based on the specific violating product alone.

9. The RIRR provides for repeal of existing laws to the contrary.

The Court shall resolve the merits of the allegations of petitioner seriatim.

1.

Petitioner is mistaken in its claim that the Milk Code's coverage is limited

only to children 0-12 months old. Section 3 of the Milk Code states:
SECTION 3. Scope of the Code The Code applies to the marketing, and practices related thereto, of the following products: breastmilk substitutes, including infant formula; other milk products, foods and beverages, including bottle-fed complementary foods, when marketed or otherwise represented to be suitable, with or without modification, for use as a partial or total replacement of breastmilk; feeding bottles and teats. It also applies to their quality and availability, and to information concerning their use.

Clearly, the coverage of the Milk Code is not dependent on the age of the child but on the kind of product being marketed to the public. The law treats infant formula,

bottle-fed complementary food, and breastmilk substitute as separate and distinct product categories.

Section 4(h) of the Milk Code defines infant formula as a breastmilk substitute x x x to satisfy the normal nutritional requirements of infants up to between four to six months of age, and adapted to their physiological characteristics; while under Section 4(b), bottle-fed complementary food refers to any food, whether manufactured or locally prepared, suitable as a complement to breastmilk or infant formula, when either becomes insufficient to satisfy the nutritional requirements of the infant. An infant under Section 4(e) is a person falling within the age bracket 0-12 months. It is the nourishment of this group of infants or children aged 0-12 months that is sought to be promoted and protected by the Milk Code. But there is another target group. Breastmilk substitute is defined under Section 4(a) as any food being marketed or otherwise presented as a partial or total replacement for breastmilk, whether or not suitable for that purpose. This section conspicuously lacks reference to any particular age-group of children. Hence, the provision of the Milk Code cannot be considered exclusive for children aged 0-12 months. In other words, breastmilk substitutes may also be intended for young children more than 12 months of age. Therefore, by regulating breastmilk substitutes, the Milk Code also intends to protect and promote the nourishment of children more than 12 months old.

Evidently, as long as what is being marketed falls within the scope of the Milk Code as provided in Section 3, then it can be subject to regulation pursuant to said law, even if the product is to be used by children aged over 12 months.

There is, therefore, nothing objectionable with Sections 2[42] and 5(ff)[43] of the RIRR.

2.

It is also incorrect for petitioner to say that the RIRR, unlike the Milk Code,

does not recognize that breastmilk substitutes may be a proper and possible substitute for breastmilk.

The entirety of the RIRR, not merely truncated portions thereof, must be considered and construed together. As held in De Luna v. Pascual,[44] [t]he particular words, clauses and phrases in the Rule should not be studied as detached and isolated expressions, but the whole and every part thereof must be considered in fixing the meaning of any of its parts and in order to produce a harmonious whole. Section 7 of the RIRR provides that when medically indicated and only when necessary, the use of breastmilk substitutes is proper if based on complete and updated information. Section 8 of the RIRR also states that information and educational materials should include information on the proper use of infant formula when the use thereof is needed.

Hence, the RIRR, just like the Milk Code, also recognizes that in certain cases, the use of breastmilk substitutes may be proper.

3.

The Court shall ascertain the merits of allegations 3[45] and 4[46] together

as they are interlinked with each other.

To resolve the question of whether the labeling requirements and advertising regulations under the RIRR are valid, it is important to deal first with the nature, purpose, and depth of the regulatory powers of the DOH, as defined in general under the 1987 Administrative Code,[47] and as delegated in particular under the Milk Code.

Health is a legitimate subject matter for regulation by the DOH (and certain other administrative agencies) in exercise of police powers delegated to it. The sheer span of jurisprudence on that matter precludes the need to further discuss it..[48] However, health information, particularly advertising materials on apparently nontoxic products like breastmilk substitutes and supplements, is a relatively new area for regulation by the DOH.[49] As early as the 1917 Revised Administrative Code of the Philippine Islands,[50] health information was already within the ambit of the regulatory powers of the predecessor of DOH.[51] Section 938 thereof charged it with the duty to protect the health of the people, and vested it with such powers as (g) the dissemination of hygienic information among the people and especially the inculcation of knowledge as to the proper care of infants and the methods of preventing and combating dangerous communicable diseases.

Seventy years later, the 1987 Administrative Code tasked respondent DOH to carry out the state policy pronounced under Section 15, Article II of the 1987 Constitution, which is to protect and promote the right to health of the people and instill health consciousness among them.[52] To that end, it was granted under Section 3 of the Administrative Code the power to (6) propagate health information and educate the population on important health, medical and environmental matters which have health implications.[53]

When it comes to information regarding nutrition of infants and young children, however, the Milk Code specifically delegated to the Ministry of Health (hereinafter referred to as DOH) the power to ensure that there is adequate, consistent and objective information on breastfeeding and use of breastmilk substitutes, supplements and related products; and the power to control such information. These are expressly provided for in Sections 12 and 5(a), to wit:

SECTION 12. Implementation and Monitoring

xxxx

(b) The Ministry of Health shall be principally responsible for the implementation and enforcement of the provisions of this Code. For this purpose, the Ministry of Health shall have the following powers and functions:

(1) To promulgate such rules and regulations as are necessary or proper for the implementation of this Code and the accomplishment of its purposes and objectives.

xxxx

(4) To exercise such other powers and functions as may be necessary for or incidental to the attainment of the purposes and objectives of this Code.

SECTION 5. Information and Education

(a) The government shall ensure that objective and consistent information is provided on infant feeding, for use by families and those involved in the field of infant

nutrition. This responsibility shall cover the planning, provision, design and dissemination of information, and the control thereof, on infant nutrition. (Emphasis supplied)

Further, DOH is authorized by the Milk Code to control the content of any information on breastmilk vis--vis breastmilk substitutes, supplement and related products, in the following manner:

SECTION 5. x x x

(b) Informational and educational materials, whether written, audio, or visual, dealing with the feeding of infants and intended to reach pregnant women and mothers of infants, shall include clear information on all the following points: (1) the benefits and superiority of breastfeeding; (2) maternal nutrition, and the preparation for and maintenance of breastfeeding; (3) the negative effect on breastfeeding of introducing partial bottlefeeding; (4) the difficulty of reversing the decision not to breastfeed; and (5) where needed, the proper use of infant formula, whether manufactured industrially or home-prepared. When such materials contain information about the use of infant formula, they shall include the social and financial implications of its use; the health hazards of inappropriate foods or feeding methods; and, in particular, the health hazards of unnecessary or improper use of infant formula and other breastmilk substitutes. Such materials shall not use any picture or text which may idealize the use of breastmilk substitutes.

SECTION 8. Health Workers

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding products within the scope of this Code shall be restricted to scientific and factual matters, and such information shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding. It shall also include the information specified in Section 5(b).

SECTION 10. Containers/Label

(a) Containers and/or labels shall be designed to provide the necessary information about the appropriate use of the products, and in such a way as not to discourage breastfeeding.

xxxx

(d) The term humanized, maternalized or similar terms shall (Emphasis supplied)

not be used.

The DOH is also authorized to control the purpose of the information and to whom such information may be disseminated under Sections 6 through 9 of the Milk Code[54] to ensure that the information that would reach pregnant women, mothers of infants, and health professionals and workers in the health care system is restricted to scientific and factual matters and shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding.

It bears emphasis, however, that the DOH's power under the Milk Code to control information regarding breastmilk vis-a-vis breastmilk substitutes is not absolute as the power to control does not encompass the power to absolutely prohibit the advertising, marketing, and promotion of breastmilk substitutes.

The following are the provisions of the Milk Code that unequivocally indicate that the control over information given to the DOH is not absolute and that absolute prohibition is not contemplated by the Code:

a) Section 2 which requires adequate information and appropriate marketing and distribution of breastmilk substitutes, to wit:
SECTION 2. Aim of the Code The aim of the Code is to contribute to the provision of safe and adequate nutrition for infants by the protection and promotion of breastfeeding and by ensuring the proper use of breastmilk substitutes and breastmilk supplements when these are necessary, on the basis of adequate information and through appropriate marketing and distribution.

b) Section 3 which specifically states that the Code applies to the marketing of and practices related to breastmilk substitutes, including infant formula, and to information concerning their use;

c) Section 5(a) which provides that the government shall ensure that objective and consistent information is provided on infant feeding;

d) Section 5(b) which provides that written, audio or visual informational and educational materials shall not use any picture or text which may idealize the use of breastmilk substitutes and should include information on the health hazards of unnecessary or improper use of said product;

e) Section 6(a) in relation to Section 12(a) which creates and empowers the IAC to review and examine advertising, promotion, and other marketing materials;

f) Section 8(b) which states that milk companies may provide information to health professionals but such information should be restricted to factual and scientific

matters and shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding; and

g) Section 10 which provides that containers or labels should not contain information that would discourage breastfeeding and idealize the use of infant formula.

It is in this context that the Court now examines the assailed provisions of the RIRR regarding labeling and advertising.

Sections 13[55] on total effect and 26[56] of Rule VII of the RIRR contain some labeling requirements, specifically: a) that there be a statement that there is no substitute to breastmilk; and b) that there be a statement that powdered infant formula may contain pathogenic microorganisms and must be prepared and used appropriately. Section 16[57] of the RIRR prohibits all health and nutrition claims for products within the scope of the Milk Code, such as claims of increased emotional and intellectual abilities of the infant and young child. These requirements and limitations are consistent with the provisions of Section 8 of the Milk Code, to wit:
SECTION 8. Health workers -

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding products within the scope of this Code shall be restricted to scientific and

factual matters, and such information shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding. It shall also include the information specified in Section 5.[58] (Emphasis supplied)

and Section 10(d)[59] which bars the use on containers and labels of the terms humanized, maternalized, or similar terms.

These provisions of the Milk Code expressly forbid information that would imply or create a belief that there is any milk product equivalent to breastmilk or which is humanized or maternalized, as such information would be inconsistent with the superiority of breastfeeding.

It may be argued that Section 8 of the Milk Code refers only to information given to health workers regarding breastmilk substitutes, not to containers and labels thereof. However, such restrictive application of Section 8(b) will result in the absurd situation in which milk companies and distributors are forbidden to claim to health workers that their products are substitutes or equivalents of breastmilk, and yet be allowed to display on the containers and labels of their products the exact opposite message. That askewed interpretation of the Milk Code is precisely what Section 5(a) thereof seeks to avoid by mandating that all information regarding breastmilk vis-a-vis breastmilk substitutes be consistent, at the same time giving the government control over planning, provision, design, and dissemination of information on infant feeding. Thus, Section 26(c) of the RIRR which requires containers and labels to state that the product offered is not a substitute for breastmilk, is a reasonable means of

enforcing Section 8(b) of the Milk Code and deterring circumvention of the protection and promotion of breastfeeding as embodied in Section 2[60] of the Milk Code.

Section 26(f)[61] of the RIRR is an equally reasonable labeling requirement. It implements Section 5(b) of the Milk Code which reads:
SECTION 5. x x x

xxxx

(b) Informational and educational materials, whether written, audio, or visual, dealing with the feeding of infants and intended to reach pregnant women and mothers of infants, shall include clear information on all the following points: x x x (5) where needed, the proper use of infant formula, whether manufactured industrially or homeprepared. When such materials contain information about the use of infant formula, they shall include the social and financial implications of its use; the health hazards of inappropriate foods or feeding methods; and, in particular, the health hazards of unnecessary or improper use of infant formula and other breastmilk substitutes. Such materials shall not use any picture or text which may idealize the use of breastmilk substitutes. (Emphasis supplied)

The label of a product contains information about said product intended for the buyers thereof. The buyers of breastmilk substitutes are mothers of infants, and Section 26 of the RIRR merely adds a fair warning about the likelihood of pathogenic microorganisms being present in infant formula and other related products when these are prepared and used inappropriately. Petitioners counsel has admitted during the hearing on June 19, 2007 that formula milk is prone to contaminations and there is as yet no technology that allows production of powdered infant formula that eliminates all forms of contamination.[62]

Ineluctably, the requirement under Section 26(f) of the RIRR for the label to contain the message regarding health hazards including the possibility of contamination with pathogenic microorganisms is in accordance with Section 5(b) of the Milk Code. The authority of DOH to control information regarding breastmilk vis-a-vis breastmilk substitutes and supplements and related products cannot be questioned. It is its intervention into the area of advertising, promotion, and marketing that is being assailed by petitioner.

In furtherance of Section 6(a) of the Milk Code, to wit:

SECTION 6. The General Public and Mothers.

(a) No advertising, promotion or other marketing materials, whether written, audio or visual, for products within the scope of this Code shall be printed, published, distributed, exhibited and broadcast unless such materials are duly authorized and approved by an interagency committee created herein pursuant to the applicable standards provided for in this Code.

the Milk Code invested regulatory authority over advertising, promotional and marketing materials to an IAC, thus:
SECTION 12. Implementation and Monitoring (a) For purposes of Section 6(a) of this Code, an inter-agency committee of the following members is hereby created: Minister of Health -------------------------------------------- Chairman Minister of Trade and Industry ---------------------------- Member Minister of Justice -------------------------------------------- Member Minister of Social Services and Development ----------- Member

composed

The members may designate their duly authorized representative to every meeting of the Committee. The Committee shall have the following powers and functions: (1) To review and examine all advertising. promotion or other marketing materials, whether written, audio or visual, on products within the scope of this Code; (2) To approve or disapprove, delete objectionable portions from and prohibit the printing, publication, distribution, exhibition and broadcast of, all advertising promotion or other marketing materials, whether written, audio or visual, on products within the scope of this Code; (3) To prescribe the internal and operational procedure for the exercise of its powers and functions as well as the performance of its duties and responsibilities; and (4) To promulgate such rules and regulations as are necessary or proper for the implementation of Section 6(a) of this Code. x x x (Emphasis supplied)

However, Section 11 of the RIRR, to wit:

SECTION 11. Prohibition No advertising, promotions, sponsorships, or marketing materials and activities for breastmilk substitutes intended for infants and young children up to twenty-four (24) months, shall be allowed, because they tend to convey or give subliminal messages or impressions that undermine breastmilk and breastfeeding or otherwise exaggerate breastmilk substitutes and/or replacements, as well as related products covered within the scope of this Code.

prohibits advertising, promotions, sponsorships or marketing materials and activities for breastmilk substitutes in line with the RIRRs declaration of principle under Section 4(f), to wit:
SECTION 4. Declaration of Principles

xxxx

(f) Advertising, promotions, or sponsorships of infant formula, breastmilk and other related products are prohibited.

substitutes

The DOH, through its co-respondents, evidently arrogated to itself not only the regulatory authority given to the IAC but also imposed absolute prohibition on advertising, promotion, and marketing.

Yet, oddly enough, Section 12 of the RIRR reiterated the requirement of the Milk Code in Section 6 thereof for prior approval by IAC of all advertising, marketing and promotional materials prior to dissemination. Even respondents, through the OSG, acknowledged the authority of IAC, and repeatedly insisted, during the oral arguments on June 19, 2007, that the prohibition under Section 11 is not actually operational, viz:

SOLICITOR GENERAL DEVANADERA:

xxxx

x x x Now, the crux of the matter that is being questioned by Petitioner is whether or not there is an absolute prohibition on advertising making AO 2006-12 unconstitutional. We maintained that what AO 2006-12 provides is not an absolute prohibition because Section 11 while it states and it is entitled prohibition it states that no advertising, promotion, sponsorship or marketing materials and activities for breast milk substitutes intended for infants and young children up to 24 months shall be allowed because this is the standard they tend to convey or give subliminal messages or impression undermine that breastmilk or breastfeeding x x x.

We have to read Section 11 together with the other Sections because the other Section, Section 12, provides for the inter agency committee that is empowered to process and evaluate

all the advertising and promotion materials.

xxxx

What AO 2006-12, what it does, it does not prohibit the sale and manufacture, it simply regulates the advertisement and the promotions of breastfeeding milk substitutes. xxxx

Now, the prohibition on advertising, Your Honor, must be taken together with the provision on the Inter-Agency Committee that processes and evaluates because there may be some information dissemination that are straight forward information dissemination. What the AO 2006 is trying to prevent is any material that will undermine the practice of breastfeeding, Your Honor.

xxxx

ASSOCIATE JUSTICE SANTIAGO:

Madam Solicitor General, under the Milk Code, which body has authority or power to promulgate Rules and Regulations regarding the Advertising, Promotion and Marketing of Breastmilk Substitutes?

SOLICITOR GENERAL DEVANADERA:

Your Honor, please, it is provided that the Inter-Agency Committee, Your Honor.

xxxx

ASSOCIATE JUSTICE SANTIAGO:

x x x Don't you think that the Department of Health overstepped its rule making authority when it totally banned advertising and promotion under Section 11 prescribed the

total effect rule as well as the content of materials under Section 13 and 15 of the rules and regulations?

SOLICITOR GENERAL DEVANADERA:

Your Honor, please, first we would like to stress that there is no total absolute ban. Second, the Inter-Agency Committee is under the Department of Health, Your Honor.

xxxx

ASSOCIATE JUSTICE NAZARIO:

x x x Did I hear you correctly, Madam Solicitor, that there is no absolute ban on advertising of breastmilk substitutes in the Revised Rules?

SOLICITOR GENERAL DEVANADERA:

Yes, your Honor.

ASSOCIATE JUSTICE NAZARIO:

But, would you nevertheless agree that there is an absolute ban on advertising of breastmilk substitutes intended for children two (2) years old and younger?

SOLICITOR GENERAL DEVANADERA:

It's not an absolute ban, Your Honor, because we have the Inter-Agency Committee that can evaluate some advertising and promotional materials, subject to the standards that we have stated earlier, which are- they should not undermine breastfeeding, Your Honor.

xxxx

x x x Section 11, while it is titled Prohibition, it must be taken in relation with the other Sections, particularly 12 and 13 and 15, Your Honor, because it is recognized that the InterAgency Committee has that power to evaluate promotional materials, Your Honor.

ASSOCIATE JUSTICE NAZARIO:

So in short, will you please clarify there's no absolute ban on advertisement regarding milk substitute regarding infants two (2) years below?

SOLICITOR GENERAL DEVANADERA:

We can proudly say that the general rule is that there is a prohibition, however, we take exceptions and standards have been set. One of which is that, the Inter-Agency Committee can allow if the advertising and promotions will not undermine breastmilk and breastfeeding, Your Honor.[63]

Sections 11 and 4(f) of the RIRR are clearly violative of the Milk Code. However, although it is the IAC which is authorized to promulgate rules and regulations for the approval or rejection of advertising, promotional, or other marketing materials under Section 12(a) of the Milk Code, said provision must be related to Section 6 thereof which in turn provides that the rules and regulations must be pursuant to the applicable standards provided for in this Code. Said standards are set forth in Sections 5(b), 8(b), and 10 of the Code, which, at the risk of being repetitious, and for easy reference, are quoted hereunder:

SECTION 5. Information and Education

xxxx

(b) Informational and educational materials, whether written, audio, or visual, dealing with the feeding of infants and intended to reach pregnant women and mothers of infants, shall include clear information on all the following points: (1) the benefits and superiority of breastfeeding; (2) maternal nutrition, and the preparation for and maintenance of breastfeeding; (3) the negative effect on breastfeeding of introducing partial bottlefeeding; (4) the difficulty of reversing the decision not to breastfeed; and (5) where needed, the proper use of infant formula, whether manufactured industrially or home-prepared. When such materials contain information about the use of infant formula, they shall include the social and financial implications of its use; the health hazards of inappropriate foods of feeding methods; and, in particular, the health hazards of unnecessary or improper use of infant formula and other breastmilk substitutes. Such materials shall not use any picture or text which may idealize the use of breastmilk substitutes.

xxxx

SECTION 8. Health Workers. xxxx (b) Information provided by manufacturers and distributors to health professionals regarding products within the scope of this Code shall be restricted to scientific and factual matters and such information shall not imply or create a belief that bottle feeding is equivalent or superior to breastfeeding. It shall also include the information specified in Section 5(b).

xxxx

SECTION 10. Containers/Label (a) Containers and/or labels shall be designed to provide the necessary information about the appropriate use of the products, and in such a way as not to discourage

breastfeeding.

(b) Each container shall have a clear, conspicuous and easily readable and understandable message in Pilipino or English printed on it, or on a label, which message can not readily become separated from it, and which shall include the following points:

(i) the words Important Notice or their equivalent; (ii) a statement of the superiority of breastfeeding; (iii) a statement that the product shall be used only on the advice of a health worker as to the need for its use and the proper methods of use; and (iv) instructions for appropriate preparation, and a the health hazards of inappropriate preparation. warning against

Section 12(b) of the Milk Code designates the DOH as the principal implementing agency for the enforcement of the provisions of the Code. In relation to such responsibility of the DOH, Section 5(a) of the Milk Code states that:
SECTION 5. Information and Education

(a) The government shall ensure that objective and consistent information is provided on infant feeding, for use by families and those involved in the field of infant nutrition. This responsibility shall cover the planning, provision, design and dissemination of information, and the control thereof, on infant nutrition. (Emphasis supplied)

Thus, the DOH has the significant responsibility to translate into operational terms the standards set forth in Sections 5, 8, and 10 of the Milk Code, by which the IAC shall screen advertising, promotional, or other marketing materials.

It is pursuant to such responsibility that the DOH correctly provided for Section 13 in the RIRR which reads as follows:
SECTION 13. Total Effect - Promotion of products within the scope of this Code must be objective and should not equate or make the product appear to be as good or equal to breastmilk or breastfeeding in the advertising concept. It must not in any case undermine breastmilk or breastfeeding. The total effect should not directly or indirectly suggest that buying their product would produce better individuals, or resulting in greater love, intelligence, ability, harmony or in any manner bring better health to the baby or other such exaggerated and unsubstantiated claim.

Such standards bind the IAC in formulating its rules and regulations on advertising, promotion, and marketing. Through that single provision, the DOH exercises control over the information content of advertising, promotional and marketing materials on breastmilk vis-a-vis breastmilk substitutes, supplements and other related products. It also sets a viable standard against which the IAC may screen such materials before they are made public.

In Equi-Asia Placement, Inc. vs. Department of Foreign Affairs,[64] the Court held:
x x x [T]his Court had, in the past, accepted as sufficient standards the following: public interest, justice and equity, public convenience and welfare, and simplicity, economy and welfare.[65]

In this case, correct information as to infant feeding and nutrition is infused with public interest and welfare.

4.

With regard to activities for dissemination of information to health

professionals, the Court also finds that there is no inconsistency between the provisions of the Milk Code and the RIRR. Section 7(b)[66] of the Milk Code, in relation to Section 8(b)[67] of the same Code, allows dissemination of information to health professionals but such information is restricted to scientific and factual matters.

Contrary to petitioner's claim, Section 22 of the RIRR does not prohibit the giving of information to health professionals on scientific and factual matters. What it prohibits is the involvement of the manufacturer and distributor of the products covered by the Code in activities for the promotion, education and production of Information, Education and Communication (IEC) materials regarding breastfeeding that are intended for women and children. restricted by the Milk Code. 5. Next, petitioner alleges that Section 8(e)[68] of the Milk Code permits milk manufacturers and distributors to extend assistance in research and in the continuing education of health professionals, while Sections 22 and 32 of the RIRR absolutely forbid the same. Petitioner also assails Section 4(i)[69] of the RIRR prohibiting milk manufacturers' and distributors' participation in any policymaking body in relation to the advancement of breastfeeding. Section 4(i) of the RIRR provides that milk companies and their representatives should not form part of any policymaking body or entity in relation to the advancement of breastfeeding. The Court finds nothing in said provisions which contravenes the Milk Code. Note that under Section 12(b) of the Milk Code, it is the DOH which shall be Said provision cannot be construed to encompass even the dissemination of information to health professionals, as

principally responsible for the implementation and enforcement of the provisions of said Code. It is entirely up to the DOH to decide which entities to call upon or allow to be part of policymaking bodies on breastfeeding. Therefore, the RIRR's prohibition on milk companies participation in any policymaking body in relation to the advancement of breastfeeding is in accord with the Milk Code. Petitioner is also mistaken in arguing that Section 22 of the RIRR prohibits milk companies from giving reasearch assistance and continuing education to health professionals. Section 22[70] of the RIRR does not pertain to research assistance to or the continuing education of health professionals; rather, it deals with breastfeeding promotion and education for women and children. Nothing in Section 22 of the RIRR prohibits milk companies from giving assistance for research or continuing education to health professionals; hence, petitioner's argument against this particular provision must be struck down. It is Sections 9[71] and 10[72] of the RIRR which govern research assistance. Said sections of the RIRR provide that research assistance for health workers and researchers may be allowed upon approval of an ethics committee, and with certain disclosure requirements imposed on the milk company and on the recipient of the research award.

The Milk Code endows the DOH with the power to determine how such research or educational assistance may be given by milk companies or under what conditions health workers may accept the assistance. Thus, Sections 9 and 10 of the RIRR imposing limitations on the kind of research done or extent of assistance given by milk companies are completely in accord with the Milk Code.

Petitioner complains that Section 32[73] of the RIRR prohibits milk companies from giving assistance, support, logistics or training to health workers. This provision is within the prerogative given to the DOH under Section 8(e)[74] of the Milk Code, which provides that manufacturers and distributors of breastmilk substitutes may assist in researches, scholarships and the continuing education, of health professionals in accordance with the rules and regulations promulgated by the Ministry of Health, now DOH.

6. As to the RIRR's prohibition on donations, said provisions are also consistent with the Milk Code. Section 6(f) of the Milk Code provides that donations may be made by manufacturers and distributors of breastmilk substitutes upon the request or with the approval of the DOH. The law does not proscribe the refusal of donations. The Milk Code leaves it purely to the discretion of the DOH whether to request or accept such donations. The DOH then appropriately exercised its discretion through Section 51[75] of the RIRR which sets forth its policy not to request or approve donations from manufacturers and distributors of breastmilk substitutes. It was within the discretion of the DOH when it provided in Section 52 of the RIRR that any donation from milk companies not covered by the Code should be coursed through the IAC which shall determine whether such donation should be accepted or refused. As reasoned out by respondents, the DOH is not mandated by the Milk Code to accept donations. For that matter, no person or entity can be forced to accept a donation. There is, therefore, no real inconsistency between the RIRR and the law because the Milk Code does not prohibit the DOH from refusing donations.

7. With regard to Section 46 of the RIRR providing for administrative sanctions that are not found in the Milk Code, the Court upholds petitioner's objection thereto.

Respondent's reliance on Civil Aeronautics Board v. Philippine Air Lines, Inc.[76] is misplaced. The glaring difference in said case and the present case before the Court is that, in the Civil Aeronautics Board, the Civil Aeronautics Administration (CAA) was expressly granted by the law (R.A. No. 776) the power to impose fines and civil penalties, while the Civil Aeronautics Board (CAB) was granted by the same law the power to review on appeal the order or decision of the CAA and to determine whether to impose, remit, mitigate, increase or compromise such fine and civil penalties. Thus, the Court upheld the CAB's Resolution imposing administrative fines.

In a more recent case, Perez v. LPG Refillers Association of the Philippines, Inc., [77] the Court upheld the Department of Energy (DOE) Circular No. 2000-06-10 implementing Batas Pambansa (B.P.) Blg. 33. The circular provided for fines for the commission of prohibited acts. The Court found that nothing in the circular contravened the law because the DOE was expressly authorized by B.P. Blg. 33 and R.A. No. 7638 to impose fines or penalties.

In the present case, neither the Milk Code nor the Revised Administrative Code grants the DOH the authority to fix or impose administrative fines. Thus, without any express grant of power to fix or impose such fines, the DOH cannot provide for those fines in the RIRR. In this regard, the DOH again exceeded its authority by providing for such fines or sanctions in Section 46 of the RIRR. Said provision is, therefore, null and void.

The DOH is not left without any means to enforce its rules and regulations. Section 12(b) (3) of the Milk Code authorizes the DOH to cause the prosecution of the violators of this Code and other pertinent laws on products covered by this Code. Section 13 of the Milk Code provides for the penalties to be imposed on violators of the provision of the Milk Code or the rules and regulations issued pursuant to it, to wit:
SECTION 13. Sanctions

(a) Any person who violates the provisions of this Code or the rules and regulations issued pursuant to this Code shall, upon conviction, be punished by a penalty of two (2) months to one (1) year imprisonment or a fine of not less than One Thousand Pesos (P1,000.00) nor more than Thirty Thousand Pesos (P30,000.00) or both. Should the offense be committed by a juridical person, the chairman of the Board of Directors, the president, general manager, or the partners and/or the persons directly responsible therefor, shall be penalized.

(b) Any license, permit or authority issued by any government agency to any health worker, distributor, manufacturer, or marketing firm or personnel for the practice of their profession or occupation, or for the pursuit of their business, may, upon recommendation of the Ministry of Health, be suspended or revoked in the event of repeated violations of this Code, or of the rules and regulations issued pursuant to this Code. (Emphasis supplied)

8. Petitioners claim that Section 57 of the RIRR repeals existing laws that are contrary to the RIRR is frivolous. Section 57 reads:
SECTION 57. Repealing Clause - All orders, issuances, and rules and regulations or parts thereof inconsistent with these revised rules and implementing regulations are hereby repealed or modified accordingly.

Section 57 of the RIRR does not provide for the repeal of laws but only orders, issuances and rules and regulations. Thus, said provision is valid as it is within the DOH's rule-making power. An administrative agency like respondent possesses quasi-legislative or rulemaking power or the power to make rules and regulations which results in delegated legislation that is within the confines of the granting statute and the Constitution, and subject to the doctrine of non-delegability and separability of powers.[78] Such express grant of rule-making power necessarily includes the power to amend, revise, alter, or repeal the same.[79] This is to allow administrative agencies flexibility in formulating and adjusting the details and manner by which they are to implement the provisions of a law,[80] in order to make it more responsive to the times. Hence, it is a standard provision in administrative rules that prior issuances of administrative agencies that are inconsistent therewith are declared repealed or modified. In fine, only Sections 4(f), 11 and 46 are ultra vires, beyond the authority of the DOH to promulgate and in contravention of the Milk Code and, therefore, null and void. The rest of the provisions of the RIRR are in consonance with the Milk Code. Lastly, petitioner makes a catch-all allegation that:
x x x [T]he questioned RIRR sought to be implemented by the Respondents is unnecessary and oppressive, and is offensive to the due process clause of the Constitution, insofar as the same is in restraint of trade and because a provision therein is inadequate to provide the public with a comprehensible basis to determine whether or not they have committed a violation.[81] (Emphasis supplied)

Petitioner refers to Sections 4(f),[82] 4(i),[83] 5(w),[84] 11,[85] 22,[86] 32,[87] 46,[88] and 52[89] as the provisions that suppress the trade of milk and, thus, violate the due

process clause of the Constitution.

The framers of the constitution were well aware that trade must be subjected to some form of regulation for the public good. Public interest must be upheld over business interests.[90] In Pest Management Association of the Philippines v. Fertilizer and Pesticide Authority,[91] it was held thus:

x x x Furthermore, as held in Association of Philippine Coconut Desiccators v. Philippine Coconut Authority, despite the fact that our present Constitution enshrines free enterprise as a policy, it nonetheless reserves to the government the power to intervene whenever necessary to promote the general welfare. There can be no question that the unregulated use or proliferation of pesticides would be hazardous to our environment. Thus, in the aforecited case, the Court declared that free enterprise does not call for removal of protective regulations. x x x It must be clearly explained and proven by competent evidence just exactly how such protective regulation would result in the restraint of trade. [Emphasis and underscoring supplied]

In this case, petitioner failed to show that the proscription of milk manufacturers participation in any policymaking body (Section 4(i)), classes and seminars for women and children (Section 22); the giving of assistance, support and logistics or training (Section 32); and the giving of donations (Section 52) would unreasonably hamper the trade of breastmilk substitutes. Petitioner has not established that the proscribed activities are indispensable to the trade of breastmilk substitutes. Petitioner failed to demonstrate that the aforementioned provisions of the RIRR are unreasonable and oppressive for being in restraint of trade. Petitioner also failed to convince the Court that Section 5(w) of the RIRR is unreasonable and oppressive. Said section provides for the definition of the term milk company, to wit:

SECTION 5 x x x. (w) Milk Company shall refer to the owner, manufacturer, distributor of infant formula, follow-up milk, milk formula, milk supplement, breastmilk substitute or replacement, or by any other description of such nature, including their representatives who promote or otherwise advance their commercial interests in marketing those products;

On the other hand, Section 4 of the Milk Code provides:

(d) Distributor means a person, corporation or any other entity in the public or private sector engaged in the business (whether directly or indirectly) of marketing at the wholesale or retail level a product within the scope of this Code. A primary distributor is a manufacturer's sales agent, representative, national distributor or broker. xxxx (j) Manufacturer means a corporation or other entity in the public or private sector engaged in the business or function (whether directly or indirectly or through an agent or and entity controlled by or under contract with it) of manufacturing a products within the scope of this Code.

Notably, the definition in the RIRR merely merged together under the term milk company the entities defined separately under the Milk Code as distributor and manufacturer. The RIRR also enumerated in Section 5(w) the products manufactured or distributed by an entity that would qualify it as a milk company, whereas in the Milk Code, what is used is the phrase products within the scope of this Code. Those are the only differences between the definitions given in the Milk Code and the definition as re-stated in the RIRR.

Since all the regulatory provisions under the Milk Code apply equally to both manufacturers and distributors, the Court sees no harm in the RIRR providing for just one term to encompass both entities. The definition of milk company in the RIRR

and the definitions of distributor and manufacturer provided for under the Milk Code are practically the same.

The Court is not convinced that the definition of milk company provided in the RIRR would bring about any change in the treatment or regulation of distributors and manufacturers of breastmilk substitutes, as defined under the Milk Code. Except Sections 4(f), 11 and 46, the rest of the provisions of the RIRR are in consonance with the objective, purpose and intent of the Milk Code, constituting reasonable regulation of an industry which affects public health and welfare and, as such, the rest of the RIRR do not constitute illegal restraint of trade nor are they violative of the due process clause of the Constitution.

WHEREFORE, the petition is PARTIALLY GRANTED. Sections 4(f), 11 and 46 of Administrative Order No. 2006-0012 dated May 12, 2006 are declared NULL and VOID for being ultra vires. The Department of Health and respondents are PROHIBITED from implementing said provisions. The Temporary Restraining Order issued on August 15, 2006 is LIFTED insofar as the rest of the provisions of Administrative Order No. 2006-0012 is concerned.

SO ORDERED.

THE PROVINCE OF NORTH COTABATO, duly represented by GOVERNOR JESUS SACDALAN and/or VICE-GOVERNOR EMMANUEL PIOL, for and in

his own behalf, Petitioners,

- versus -

THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK RYAN SULLIVAN and/or GEN. HERMOGENES ESPERON, JR., the latter in his capacity as the present and duly-appointed Presidential Adviser on the Peace Process (OPAPP) or the so-called Office of the Presidential Adviser on the Peace Process, Respondents. x--------------------------------------------x CITY GOVERNMENT OF ZAMBOANGA, as represented by HON. CELSO L. LOBREGAT, City Mayor of Zamboanga, and in his personal capacity as resident of the City of Zamboanga, Rep. MA. ISABELLE G. CLIMACO, District 1, and Rep. ERICO BASILIO A. FABIAN, District 2, City of Zamboanga, Petitioners,

- versus -

THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL (GRP), as represented by RODOLFO C. GARCIA, LEAH ARMAMENTO, SEDFREY CANDELARIA, MARK RYAN SULLIVAN and HERMOGENES ESPERON, in his capacity as the Presidential Adviser on Peace Process, Respondents. x--------------------------------------------x THE CITY OF ILIGAN, duly represented by CITY MAYOR LAWRENCE LLUCH CRUZ, Petitioner,

- versus

THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO GARCIA, ATTY. LEAH ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK RYAN SULLIVAN; GEN. HERMOGENES ESPERON, JR., in his capacity as the present and duly appointed Presidential Adviser on the Peace Process; and/or SEC. EDUARDO ERMITA, in his capacity as Executive Secretary. Respondents. x--------------------------------------------x THE PROVINCIAL GOVERNMENT OF ZAMBOANGA DEL NORTE, as represented by HON. ROLANDO E. YEBES, in his capacity as Provincial Governor, HON. FRANCIS H. OLVIS, in his capacity as Vice-Governor and Presiding Officer of the Sangguniang Panlalawigan, HON. CECILIA JALOSJOS CARREON, Congresswoman, 1st Congressional District, HON. CESAR G. JALOSJOS, Congressman, 3rd Congressional District, and Members of the Sangguniang Panlalawigan of the Province of Zamboanga del Norte, namely, HON. SETH FREDERICK P. JALOSJOS, HON. FERNANDO R. CABIGON, JR., HON. ULDARICO M. MEJORADA II, HON. EDIONAR M. ZAMORAS, HON. EDGAR J. BAGUIO, HON. CEDRIC L. ADRIATICO, HON. FELIXBERTO C. BOLANDO, HON. JOSEPH BRENDO C. AJERO, HON. NORBIDEIRI B. EDDING, HON. ANECITO S. DARUNDAY, HON. ANGELICA J. CARREON and HON. LUZVIMINDA E. TORRINO, Petitioners,

- versus -

THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL [GRP], as represented by HON. RODOLFO C. GARCIA and HON. HERMOGENES ESPERON, in his capacity as the Presidential Adviser of Peace Process, Respondents. x--------------------------------------------x ERNESTO M. MACEDA, JEJOMAR C. BINAY, and AQUILINO L. PIMENTEL III, Petitioners,

- versus -

THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL, represented by its Chairman RODOLFO C. GARCIA, and the MORO ISLAMIC LIBERATION FRONT PEACE NEGOTIATING PANEL, represented by its Chairman MOHAGHER IQBAL, Respondents. x--------------------------------------------x FRANKLIN M. DRILON and ADEL ABBAS TAMANO, Petitioners-in-Intervention. x--------------------------------------------x SEN. MANUEL A. ROXAS, Petitioners-in-Intervention. x--------------------------------------------x MUNICIPALITY OF LINAMON duly represented by its Municipal Mayor NOEL N. DEANO, Petitioners-in-Intervention, x--------------------------------------------x THE CITY OF ISABELA, BASILAN PROVINCE, represented by MAYOR CHERRYLYN P. SANTOS-AKBAR, Petitioners-in-Intervention. x--------------------------------------------x THE PROVINCE OF SULTAN KUDARAT, rep. by HON. SUHARTO T. MANGUDADATU, in his capacity as Provincial Governor and a resident of the Province of Sultan Kudarat, Petitioner-in-Intervention. x-------------------------------------------x RUY ELIAS LOPEZ, for and in his own behalf and on behalf of Indigenous Peoples in Mindanao Not Belonging to the MILF, Petitioner-in-Intervention. x--------------------------------------------x CARLO B. GOMEZ, GERARDO S. DILIG, NESARIO G. AWAT, JOSELITO C. ALISUAG and RICHALEX G. JAGMIS, as citizens and residents of Palawan, Petitioners-in-Intervention. x--------------------------------------------x

MARINO RIDAO and KISIN BUXANI, Petitioners-in-Intervention. x--------------------------------------------x MUSLIM LEGAL ASSISTANCE FOUNDATION, INC (MUSLAF), Respondent-in-Intervention. x--------------------------------------------x MUSLIM MULTI-SECTORAL MOVEMENT FOR PEACE & DEVELOPMENT (MMMPD), Respondent-in-Intervention. x--------------------------------------------x

G.R. No. 183591

Present: PUNO, C.J., QUISUMBING, YNARES-SANTIAGO, CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO MORALES, AZCUNA, TINGA, CHICO-NAZARIO, VELASCO, JR., NACHURA, REYES, LEONARDO-DE CASTRO, & BRION, JJ. Promulgated: October 14, 2008

G.R. No. 183752

G.R. No. 183893

G.R. No. 183951

G.R. No. 183962 x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION CARPIO MORALES, J.:

Subject of these consolidated cases is the extent of the powers of the President in pursuing the peace process. While the facts surrounding this controversy center on the armed conflict in Mindanao between the government and the Moro Islamic Liberation Front (MILF), the legal issue involved has a bearing on all areas in the country where there has been a long-standing armed conflict. Yet again, the Court is tasked to perform a delicate balancing act. It must uncompromisingly delineate the bounds within which the President may lawfully exercise her discretion, but it must do so in strict adherence to the Constitution, lest its ruling unduly restricts the freedom of action vested by that same Constitution in the Chief Executive precisely to enable her to pursue the peace process effectively. I. FACTUAL ANTECEDENTS OF THE PETITIONS

On August 5, 2008, the Government of the Republic of the Philippines (GRP) and the MILF, through the Chairpersons of their respective peace negotiating panels, were scheduled to sign a Memorandum of Agreement on the Ancestral Domain (MOA-AD) Aspect of the GRP-MILF Tripoli Agreement on Peace of 2001 in Kuala Lumpur, Malaysia.

The MILF is a rebel group which was established in March 1984 when, under the leadership of the late Salamat Hashim, it splintered from the Moro National Liberation Front (MNLF) then headed by Nur Misuari, on the ground, among others, of what Salamat perceived to be the manipulation of the MNLF away from an Islamic basis towards Marxist-Maoist orientations.[1]

The signing of the MOA-AD between the GRP and the MILF was not to materialize, however, for upon motion of petitioners, specifically those who filed their cases before the scheduled signing of the MOA-AD, this Court issued a Temporary

Restraining Order enjoining the GRP from signing the same.

The MOA-AD was preceded by a long process of negotiation and the concluding of several prior agreements between the two parties beginning in 1996, when the GRPMILF peace negotiations began. On July 18, 1997, the GRP and MILF Peace Panels signed the Agreement on General Cessation of Hostilities. The following year, they signed the General Framework of Agreement of Intent on August 27, 1998.

The Solicitor General, who represents respondents, summarizes the MOA-AD by stating that the same contained, among others, the commitment of the parties to pursue peace negotiations, protect and respect human rights, negotiate with sincerity in the resolution and pacific settlement of the conflict, and refrain from the use of threat or force to attain undue advantage while the peace negotiations on the substantive agenda are on-going.[2]

Early on, however, it was evident that there was not going to be any smooth sailing in the GRP-MILF peace process. Towards the end of 1999 up to early 2000, the MILF attacked a number of municipalities in Central Mindanao and, in March 2000, it took control of the town hall of Kauswagan, Lanao del Norte.[3] In response, then President Joseph Estrada declared and carried out an all-out-war against the MILF.

When President Gloria Macapagal-Arroyo assumed office, the military offensive against the MILF was suspended and the government sought a resumption of the peace talks. The MILF, according to a leading MILF member, initially responded with deep reservation, but when President Arroyo asked the Government of Malaysia through Prime Minister Mahathir Mohammad to help convince the MILF to return to the negotiating table, the MILF convened its Central Committee to seriously discuss the

matter and, eventually, decided to meet with the GRP.[4]

The parties met in Kuala Lumpur on March 24, 2001, with the talks being facilitated by the Malaysian government, the parties signing on the same date the Agreement on the General Framework for the Resumption of Peace Talks Between the GRP and the MILF. The MILF thereafter suspended all its military actions.[5]

Formal peace talks between the parties were held in Tripoli, Libya from June 2022, 2001, the outcome of which was the GRP-MILF Tripoli Agreement on Peace (Tripoli Agreement 2001) containing the basic principles and agenda on the following aspects of the negotiation: Security Aspect, Rehabilitation Aspect, and Ancestral Domain Aspect. With regard to the Ancestral Domain Aspect, the parties in Tripoli Agreement 2001 simply agreed that the same be discussed further by the Parties in their next meeting.

A second round of peace talks was held in Cyberjaya, Malaysia on August 5-7, 2001 which ended with the signing of the Implementing Guidelines on the Security Aspect of the Tripoli Agreement 2001 leading to a ceasefire status between the parties. This was followed by the Implementing Guidelines on the Humanitarian Rehabilitation and Development Aspects of the Tripoli Agreement 2001, which was signed on May 7, 2002 at Putrajaya, Malaysia. Nonetheless, there were many incidence of violence between government forces and the MILF from 2002 to 2003.

Meanwhile, then MILF Chairman Salamat Hashim passed away on July 13, 2003 and he was replaced by Al Haj Murad, who was then the chief peace negotiator of the MILF. Murads position as chief peace negotiator was taken over by Mohagher Iqbal.[6]

In 2005, several exploratory talks were held between the parties in Kuala Lumpur, eventually leading to the crafting of the draft MOA-AD in its final form, which, as mentioned, was set to be signed last August 5, 2008.

II. STATEMENT OF THE PROCEEDINGS

Before the Court is what is perhaps the most contentious consensus ever embodied in an instrument the MOA-AD which is assailed principally by the present petitions bearing docket numbers 183591, 183752, 183893, 183951 and 183962.

Commonly impleaded as respondents are the GRP Peace Panel on Ancestral Domain[7] and the Presidential Adviser on the Peace Process (PAPP) Hermogenes Esperon, Jr.

On July 23, 2008, the Province of North Cotabato[8] and Vice-Governor Emmanuel Piol filed a petition, docketed as G.R. No. 183591, for Mandamus and Prohibition with Prayer for the Issuance of Writ of Preliminary Injunction and Temporary Restraining Order.[9] Invoking the right to information on matters of public concern, petitioners seek to compel respondents to disclose and furnish them the complete and official copies of the MOA-AD including its attachments, and to prohibit the slated signing of the MOA-AD, pending the disclosure of the contents of the MOAAD and the holding of a public consultation thereon. Supplementarily, petitioners pray that the MOA-AD be declared unconstitutional.[10]

This initial petition was followed by another one, docketed as G.R. No. 183752, also for Mandamus and Prohibition[11] filed by the City of Zamboanga,[12] Mayor Celso Lobregat, Rep. Ma. Isabelle Climaco and Rep. Erico Basilio Fabian who likewise

pray for similar injunctive reliefs. Petitioners herein moreover pray that the City of Zamboanga be excluded from the Bangsamoro Homeland and/or Bangsamoro Juridical Entity and, in the alternative, that the MOA-AD be declared null and void.

By Resolution of August 4, 2008, the Court issued a Temporary Restraining Order commanding and directing public respondents and their agents to cease and desist from formally signing the MOA-AD.[13] The Court also required the Solicitor General to submit to the Court and petitioners the official copy of the final draft of the MOA-AD, [14] to which she complied.[15]

Meanwhile, the City of Iligan[16] filed a petition for Injunction and/or Declaratory Relief, docketed as G.R. No. 183893, praying that respondents be enjoined from signing the MOA-AD or, if the same had already been signed, from implementing the same, and that the MOA-AD be declared unconstitutional. Petitioners herein additionally implead Executive Secretary Eduardo Ermita as respondent.

The Province of Zamboanga del Norte,[17] Governor Rolando Yebes, ViceGovernor Francis Olvis, Rep. Cecilia Jalosjos-Carreon, Rep. Cesar Jalosjos, and the members[18] of the Sangguniang Panlalawigan of Zamboanga del Norte filed on August 15, 2008 a petition for Certiorari, Mandamus and Prohibition,[19] docketed as G.R. No. 183951. They pray, inter alia, that the MOA-AD be declared null and void and without operative effect, and that respondents be enjoined from executing the MOAAD.

On August 19, 2008, Ernesto Maceda, Jejomar Binay, and Aquilino Pimentel III filed a petition for Prohibition,[20] docketed as G.R. No. 183962, praying for a judgment prohibiting and permanently enjoining respondents from formally signing and

executing the MOA-AD and or any other agreement derived therefrom or similar thereto, and nullifying the MOA-AD for being unconstitutional and illegal. Petitioners herein additionally implead as respondent the MILF Peace Negotiating Panel represented by its Chairman Mohagher Iqbal. Various parties moved to intervene and were granted leave of court to file their petitions-/comments-in-intervention. Petitioners-in-Intervention include Senator Manuel A. Roxas, former Senate President Franklin Drilon and Atty. Adel Tamano, the City of Isabela[21] and Mayor Cherrylyn Santos-Akbar, the Province of Sultan Kudarat[22] and Gov. Suharto Mangudadatu, the Municipality of Linamon in Lanao del Norte,[23] Ruy Elias Lopez of Davao City and of the Bagobo tribe, Sangguniang Panlungsod member Marino Ridao and businessman Kisin Buxani, both of Cotabato City; and lawyers Carlo Gomez, Gerardo Dilig, Nesario Awat, Joselito Alisuag, Richalex Jagmis, all of Palawan City. The Muslim Legal Assistance Foundation, Inc. (Muslaf) and the Muslim MultiSectoral Movement for Peace and Development (MMMPD) filed their respective Comments-in-Intervention.

By subsequent Resolutions, the Court ordered the consolidation of the petitions. Respondents filed Comments on the petitions, while some of petitioners submitted their respective Replies.

Respondents, by Manifestation and Motion of August 19, 2008, stated that the Executive Department shall thoroughly review the MOA-AD and pursue further negotiations to address the issues hurled against it, and thus moved to dismiss the cases. In the succeeding exchange of pleadings, respondents motion was met with vigorous opposition from petitioners.

The cases were heard on oral argument on August 15, 22 and 29, 2008 that tackled the following principal issues:

1. Whether the petitions have become moot and academic (i) insofar as the mandamus aspect is concerned, in view of the disclosure of official copies of the final draft of the Memorandum of Agreement (MOA); and (ii) insofar as the prohibition aspect involving the Local Government Units is concerned, if it is considered that consultation has become fait accompli with the finalization of the draft; 2. Whether the constitutionality and the legality of the MOA is ripe for adjudication; 3. Whether respondent Government of the Republic of the Philippines Peace Panel committed grave abuse of discretion amounting to lack or excess of jurisdiction when it negotiated and initiated the MOA vis--vis ISSUES Nos. 4 and 5; 4. Whether there is a violation of the peoples right to information on matters of public concern (1987 Constitution, Article III, Sec. 7) under a state policy of full disclosure of all its transactions involving public interest (1987 Constitution, Article II, Sec. 28) including public consultation under Republic Act No. 7160 (LOCAL GOVERNMENT CODE OF 1991)[;] If it is in the affirmative, whether prohibition under Rule 65 of the 1997 Rules of Civil Procedure is an appropriate remedy; 5. Whether by signing the MOA, the Government of the Republic of the Philippines would be BINDING itself a) to create and recognize the Bangsamoro Juridical Entity (BJE) as a separate state, or a juridical, territorial or political subdivision not recognized by law; b) to revise or amend the Constitution and existing laws to conform to the MOA; c) to concede to or recognize the claim of the Moro Islamic Liberation Front for ancestral domain in violation of Republic Act No. 8371 (THE INDIGENOUS PEOPLES RIGHTS ACT OF 1997), particularly Section 3(g) & Chapter VII (DELINEATION, RECOGNITION OF ANCESTRAL DOMAINS)[;] If in the affirmative, whether the Executive Branch has the authority to so bind the Government of the Republic of the Philippines; 6. Whether the inclusion/exclusion of the Province of North Cotabato, Cities of Zamboanga, Iligan and Isabela, and the Municipality of Linamon, Lanao del Norte

in/from the areas covered by the projected Bangsamoro Homeland is a justiciable question; and 7. Whether desistance from signing the MOA derogates any prior valid commitments of the Government of the Republic of the Philippines.[24]

The Court, thereafter, ordered the parties to submit their respective Memoranda. Most of the parties submitted their memoranda on time.

III. OVERVIEW OF THE MOA-AD As a necessary backdrop to the consideration of the objections raised in the subject five petitions and six petitions-in-intervention against the MOA-AD, as well as the two comments-in-intervention in favor of the MOA-AD, the Court takes an overview of the MOA.

The MOA-AD identifies the Parties to it as the GRP and the MILF.

Under the heading Terms of Reference (TOR), the MOA-AD includes not only four earlier agreements between the GRP and MILF, but also two agreements between the GRP and the MNLF: the 1976 Tripoli Agreement, and the Final Peace Agreement on the Implementation of the 1976 Tripoli Agreement, signed on September 2, 1996 during the administration of President Fidel Ramos.

The MOA-AD also identifies as TOR two local statutes the organic act for the Autonomous Region in Muslim Mindanao (ARMM)[25] and the Indigenous Peoples Rights Act (IPRA),[26] and several international law instruments the ILO Convention No. 169 Concerning Indigenous and Tribal Peoples in Independent Countries in relation to the UN Declaration on the Rights of the Indigenous Peoples, and the UN Charter,

among others.

The MOA-AD includes as a final TOR the generic category of compact rights entrenchment emanating from the regime of dar-ul-muahada (or territory under compact) and dar-ul-sulh (or territory under peace agreement) that partakes the nature of a treaty device.

During the height of the Muslim Empire, early Muslim jurists tended to see the world through a simple dichotomy: there was the dar-ul-Islam (the Abode of Islam) and dar-ul-harb (the Abode of War). The first referred to those lands where Islamic laws held sway, while the second denoted those lands where Muslims were persecuted or where Muslim laws were outlawed or ineffective.[27] This way of viewing the world, however, became more complex through the centuries as the Islamic world became part of the international community of nations.

As Muslim States entered into treaties with their neighbors, even with distant States and inter-governmental organizations, the classical division of the world into darul-Islam and dar-ul-harb eventually lost its meaning. New terms were drawn up to describe novel ways of perceiving non-Muslim territories. For instance, areas like darul-muahada (land of compact) and dar-ul-sulh (land of treaty) referred to countries which, though under a secular regime, maintained peaceful and cooperative relations with Muslim States, having been bound to each other by treaty or agreement. Dar-ulaman (land of order), on the other hand, referred to countries which, though not bound by treaty with Muslim States, maintained freedom of religion for Muslims.[28]

It thus appears that the compact rights entrenchment emanating from the regime of dar-ul-muahada and dar-ul-sulh simply refers to all other agreements between the

MILF and the Philippine government the Philippines being the land of compact and peace agreement that partake of the nature of a treaty device, treaty being broadly defined as any solemn agreement in writing that sets out understandings, obligations, and benefits for both parties which provides for a framework that elaborates the principles declared in the [MOA-AD].[29]

The

MOA-AD

states

that

the

Parties

HAVE

AGREED

AND

ACKNOWLEDGED AS FOLLOWS, and starts with its main body.

The main body of the MOA-AD is divided into four strands, namely, Concepts and Principles, Territory, Resources, and Governance.

A. CONCEPTS AND PRINCIPLES This strand begins with the statement that it is the birthright of all Moros and all Indigenous peoples of Mindanao to identify themselves and be accepted as Bangsamoros. It defines Bangsamoro people as the natives or original inhabitants of Mindanao and its adjacent islands including Palawan and the Sulu archipelago at the time of conquest or colonization, and their descendants whether mixed or of full blood, including their spouses.[30]

Thus, the concept of Bangsamoro, as defined in this strand of the MOA-AD, includes not only Moros as traditionally understood even by Muslims,[31] but all indigenous peoples of Mindanao and its adjacent islands. The MOA-AD adds that the freedom of choice of indigenous peoples shall be respected. What this freedom of choice consists in has not been specifically defined.

The MOA-AD proceeds to refer to the Bangsamoro homeland, the ownership of which is vested exclusively in the Bangsamoro people by virtue of their prior rights of occupation.[32] Both parties to the MOA-AD acknowledge that ancestral domain does not form part of the public domain.[33]

The Bangsamoro people are acknowledged as having the right to self-governance, which right is said to be rooted on ancestral territoriality exercised originally under the suzerain authority of their sultanates and the Pat a Pangampong ku Ranaw. endowed with all the elements of a nation-state in the modern sense.[34] The sultanates were described as states or karajaan/kadatuan resembling a body politic

The MOA-AD thus grounds the right to self-governance of the Bangsamoro people on the past suzerain authority of the sultanates. As gathered, the territory defined as the Bangsamoro homeland was ruled by several sultanates and, specifically in the case of the Maranao, by the Pat a Pangampong ku Ranaw, a confederation of independent principalities (pangampong) each ruled by datus and sultans, none of whom was supreme over the others.[35]

The MOA-AD goes on to describe the Bangsamoro people as the First Nation with defined territory and with a system of government having entered into treaties of amity and commerce with foreign nations. The term First Nation is of Canadian origin referring to the indigenous peoples of that territory, particularly those known as Indians. In Canada, each of these indigenous peoples is equally entitled to be called First Nation, hence, all of them are usually described collectively by the plural First Nations.[36] To that extent, the MOA-AD, by identifying the Bangsamoro people as the First Nation suggesting its exclusive entitlement to that designation departs from the Canadian usage of the term.

The MOA-AD then mentions for the first time the Bangsamoro Juridical Entity (BJE) to which it grants the authority and jurisdiction over the Ancestral Domain and Ancestral Lands of the Bangsamoro.[37]

B.

TERRITORY The territory of the Bangsamoro homeland is described as the land mass as well as

the maritime, terrestrial, fluvial and alluvial domains, including the aerial domain and the atmospheric space above it, embracing the Mindanao-Sulu-Palawan geographic region.[38]

More specifically, the core of the BJE is defined as the present geographic area of the ARMM thus constituting the following areas: Lanao del Sur, Maguindanao, Sulu, Tawi-Tawi, Basilan, and Marawi City. Significantly, this core also includes certain municipalities of Lanao del Norte that voted for inclusion in the ARMM in the 2001 plebiscite.[39]

Outside of this core, the BJE is to cover other provinces, cities, municipalities and barangays, which are grouped into two categories, Category A and Category B. Each of these areas is to be subjected to a plebiscite to be held on different dates, years apart from each other. Thus, Category A areas are to be subjected to a plebiscite not later than twelve (12) months following the signing of the MOA-AD.[40] Category B areas, also called Special Intervention Areas, on the other hand, are to be subjected to a plebiscite twenty-five (25) years from the signing of a separate agreement the Comprehensive Compact.[41]

The Parties to the MOA-AD stipulate that the BJE shall have jurisdiction over all natural resources within its internal waters, defined as extending fifteen (15) kilometers from the coastline of the BJE area;[42] that the BJE shall also have territorial waters, which shall stretch beyond the BJE internal waters up to the baselines of the Republic of the Philippines (RP) south east and south west of mainland Mindanao; and that within these territorial waters, the BJE and the Central Government (used interchangeably with RP) shall exercise joint jurisdiction, authority and management over all natural resources.[43] internal waters is not similarly described as joint. Notably, the jurisdiction over the

The MOA-AD further provides for the sharing of minerals on the territorial waters between the Central Government and the BJE, in favor of the latter, through production sharing and economic cooperation agreement.[44] The activities which the Parties are allowed to conduct on the territorial waters are enumerated, among which are the exploration and utilization of natural resources, regulation of shipping and fishing activities, and the enforcement of police and safety measures.[45] There is no similar provision on the sharing of minerals and allowed activities with respect to the internal waters of the BJE. C. RESOURCES The MOA-AD states that the BJE is free to enter into any economic cooperation and trade relations with foreign countries and shall have the option to establish trade missions in those countries. Such relationships and understandings, however, are not to include aggression against the GRP. cooperation agreements.[46] The BJE may also enter into environmental

The external defense of the BJE is to remain the duty and obligation of the Central Government. The Central Government is also bound to take necessary steps to ensure the BJEs participation in international meetings and events like those of the ASEAN and the specialized agencies of the UN. The BJE is to be entitled to participate in Philippine official missions and delegations for the negotiation of border agreements or protocols for environmental protection and equitable sharing of incomes and revenues involving the bodies of water adjacent to or between the islands forming part of the ancestral domain.[47]

With regard to the right of exploring for, producing, and obtaining all potential sources of energy, petroleum, fossil fuel, mineral oil and natural gas, the jurisdiction and control thereon is to be vested in the BJE as the party having control within its territorial jurisdiction. This right carries the proviso that, in times of national emergency, when public interest so requires, the Central Government may, for a fixed period and under reasonable terms as may be agreed upon by both Parties, assume or direct the operation of such resources.[48]

The sharing between the Central Government and the BJE of total production pertaining to natural resources is to be 75:25 in favor of the BJE.[49] The MOA-AD provides that legitimate grievances of the Bangsamoro people arising from any unjust dispossession of their territorial and proprietary rights, customary land tenures, or their marginalization shall be acknowledged. Whenever restoration is no longer possible, reparation is to be in such form as mutually determined by the Parties.[50] The BJE may modify or cancel the forest concessions, timber licenses, contracts or agreements, mining concessions, Mineral Production and Sharing Agreements

(MPSA), Industrial Forest Management Agreements (IFMA), and other land tenure instruments granted by the Philippine Government, including those issued by the present ARMM.[51]

D.

GOVERNANCE

The MOA-AD binds the Parties to invite a multinational third-party to observe and monitor the implementation of the Comprehensive Compact. This compact is to embody the details for the effective enforcement and the mechanisms and modalities for the actual implementation of the MOA-AD. The MOA-AD explicitly provides that the participation of the third party shall not in any way affect the status of the relationship between the Central Government and the BJE.[52]

The associative relationship between the Central Government and the BJE

The MOA-AD describes the relationship of the Central Government and the BJE as associative, characterized by shared authority and responsibility. And it states that the structure of governance is to be based on executive, legislative, judicial, and administrative institutions with defined powers and functions in the Comprehensive Compact.

The MOA-AD provides that its provisions requiring amendments to the existing legal framework shall take effect upon signing of the Comprehensive Compact and upon effecting the aforesaid amendments, with due regard to the non-derogation of prior agreements and within the stipulated timeframe to be contained in the

Comprehensive Compact. As will be discussed later, much of the present controversy hangs on the legality of this provision. The BJE is granted the power to build, develop and maintain its own institutions inclusive of civil service, electoral, financial and banking, education, legislation, legal, economic, police and internal security force, judicial system and correctional institutions, the details of which shall be discussed in the negotiation of the comprehensive compact. As stated early on, the MOA-AD was set to be signed on August 5, 2008 by Rodolfo Garcia and Mohagher Iqbal, Chairpersons of the Peace Negotiating Panels of the GRP and the MILF, respectively. Notably, the penultimate paragraph of the MOAAD identifies the signatories as the representatives of the Parties, meaning the GRP and MILF themselves, and not merely of the negotiating panels.[53] In addition, the signature page of the MOA-AD states that it is WITNESSED BY Datuk Othman Bin Abd Razak, Special Adviser to the Prime Minister of Malaysia, ENDORSED BY Ambassador Sayed Elmasry, Adviser to Organization of the Islamic Conference (OIC) Secretary General and Special Envoy for Peace Process in Southern Philippines, and SIGNED IN THE PRESENCE OF Dr. Albert G. Romulo, Secretary of Foreign Affairs of RP and Dato Seri Utama Dr. Rais Bin Yatim, Minister of Foreign Affairs, Malaysia, all of whom were scheduled to sign the Agreement last August 5, 2008.

Annexed to the MOA-AD are two documents containing the respective lists cum maps of the provinces, municipalities, and barangays under Categories A and B earlier mentioned in the discussion on the strand on TERRITORY.

IV.

PROCEDURAL ISSUES

A.

RIPENESS

The power of judicial review is limited to actual cases or controversies.[54] Courts decline to issue advisory opinions or to resolve hypothetical or feigned problems, or mere academic questions.[55] The limitation of the power of judicial review to actual cases and controversies defines the role assigned to the judiciary in a tripartite allocation of power, to assure that the courts will not intrude into areas committed to the other branches of government.[56]

An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or dispute. There must be a contrariety of legal rights that can be interpreted and enforced on the basis of existing law and jurisprudence.[57] The Court can decide the constitutionality of an act or treaty only when a proper case between opposing parties is submitted for judicial determination.[58]

Related to the requirement of an actual case or controversy is the requirement of ripeness. A question is ripe for adjudication when the act being challenged has had a direct adverse effect on the individual challenging it.[59] For a case to be considered ripe for adjudication, it is a prerequisite that something had then been accomplished or performed by either branch before a court may come into the picture,[60] and the petitioner must allege the existence of an immediate or threatened injury to itself as a result of the challenged action.[61] He must show that he has sustained or is immediately in danger of sustaining some direct injury as a result of the act complained of.[62]

The Solicitor General argues that there is no justiciable controversy that is ripe for judicial review in the present petitions, reasoning that

The unsigned MOA-AD is simply a list of consensus points subject to further negotiations and legislative enactments as well as constitutional processes aimed at attaining a final peaceful agreement. Simply put, the MOA-AD remains to be a proposal that does not automatically create legally demandable rights and obligations until the list of operative acts required have been duly complied with. x x x xxxx In the cases at bar, it is respectfully submitted that this Honorable Court has no authority to pass upon issues based on hypothetical or feigned constitutional problems or interests with no concrete bases. Considering the preliminary character of the MOAAD, there are no concrete acts that could possibly violate petitioners and intervenors rights since the acts complained of are mere contemplated steps toward the formulation of a final peace agreement. Plainly, petitioners and intervenors perceived injury, if at all, is merely imaginary and illusory apart from being unfounded and based on mere conjectures. (Underscoring supplied)

The Solicitor General cites[63] the following provisions of the MOA-AD:

TERRITORY xxxx 2. Toward this end, the Parties enter into the following stipulations: xxxx d. Without derogating from the requirements of prior agreements, the Government stipulates to conduct and deliver, using all possible legal measures, within twelve (12) months following the signing of the MOA-AD, a plebiscite covering the areas as enumerated in the list and depicted in the map as Category A attached herein (the Annex). The Annex constitutes an integral part of this framework agreement. Toward this end, the Parties shall endeavor to complete the negotiations and resolve all outstanding issues on the Comprehensive Compact within fifteen (15) months from the signing of the MOAAD. xxxx

GOVERNANCE xxxx 7. The Parties agree that mechanisms and modalities for the actual implementation of this MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps to enable it to occur effectively. Any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into force upon the signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework with due regard to non-derogation of prior agreements and within the stipulated timeframe to be contained in the Comprehensive Compact.[64] (Underscoring supplied)

The Solicitor Generals arguments fail to persuade.

Concrete acts under the MOA-AD are not necessary to render the present controversy ripe. In Pimentel, Jr. v. Aguirre,[65] this Court held:

x x x [B]y the mere enactment of the questioned law or the approval of the challenged action, the dispute is said to have ripened into a judicial controversy even without any other overt act. Indeed, even a singular violation of the Constitution and/or the law is enough to awaken judicial duty. xxxx By the same token, when an act of the President, who in our constitutional scheme is a coequal of Congress, is seriously alleged to have infringed the Constitution and the laws x x x settling the dispute becomes the duty and the responsibility of the courts.[66]

In Santa Fe Independent School District v. Doe,[67] the United States Supreme Court held that the challenge to the constitutionality of the schools policy allowing student-led prayers and speeches before games was ripe for adjudication, even if no public prayer had yet been led under the policy, because the policy was being challenged as unconstitutional on its face.[68]

That the law or act in question is not yet effective does not negate ripeness. For example, in New York v. United States,[69] decided in 1992, the United States Supreme Court held that the action by the State of New York challenging the provisions of the Low-Level Radioactive Waste Policy Act was ripe for adjudication even if the questioned provision was not to take effect until January 1, 1996, because the parties agreed that New York had to take immediate action to avoid the provision's consequences.[70]

The present petitions pray for Certiorari,[71] Prohibition, and Mandamus. Certiorari and Prohibition are remedies granted by law when any tribunal, board or officer has acted, in the case of certiorari, or is proceeding, in the case of prohibition, without or in excess of its jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction.[72] Mandamus is a remedy granted by law when any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use or enjoyment of a right or office to which such other is entitled.[73] Certiorari, Mandamus and Prohibition are appropriate remedies to raise constitutional issues and to review and/or prohibit/nullify, when proper, acts of legislative and executive officials.[74]

The authority of the GRP Negotiating Panel is defined by Executive Order No. 3 (E.O. No. 3), issued on February 28, 2001.[75] The said executive order requires that [t]he government's policy framework for peace, including the systematic approach and the administrative structure for carrying out the comprehensive peace process x x x be governed by this Executive Order.[76]

The present petitions allege that respondents GRP Panel and PAPP Esperon drafted the terms of the MOA-AD without consulting the local government units or communities affected, nor informing them of the proceedings. As will be discussed in greater detail later, such omission, by itself, constitutes a departure by respondents from their mandate under E.O. No. 3.

Furthermore, the petitions allege that the provisions of the MOA-AD violate the Constitution. The MOA-AD provides that any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into force upon the signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework, implying an amendment of the Constitution to accommodate the MOAAD. This stipulation, in effect, guaranteed to the MILF the amendment of the Constitution. Such act constitutes another violation of its authority. Again, these points will be discussed in more detail later. As the petitions allege acts or omissions on the part of respondent that exceed their authority, by violating their duties under E.O. No. 3 and the provisions of the Constitution and statutes, the petitions make a prima facie case for Certiorari, Prohibition, and Mandamus, and an actual case or controversy ripe for adjudication exists. When an act of a branch of government is seriously alleged to have infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute.[77]

B. LOCUS STANDI

For a party to have locus standi, one must allege 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.[78]

Because constitutional cases are often public actions in which the relief sought is likely to affect other persons, a preliminary question frequently arises as to this interest in the constitutional question raised.[79]

When suing as a citizen, the person complaining must allege 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 or act complained of.[80] When the issue concerns a public right, it is sufficient that the petitioner is a citizen and has an interest in the execution of the laws.[81]

For a taxpayer, one is allowed to sue where there is an assertion that public funds are illegally disbursed or deflected to an illegal purpose, or that there is a wastage of public funds through the enforcement of an invalid or unconstitutional law.[82] The Court retains discretion whether or not to allow a taxpayers suit.[83]

In the case of a legislator or member of Congress, an act of the Executive that injures the institution of Congress causes a derivative but nonetheless substantial injury that can be questioned by legislators. A member of the House of Representatives has standing to maintain inviolate the prerogatives, powers and privileges vested by the Constitution in his office.[84]

An organization may be granted standing to assert the rights of its members,[85] but the mere invocation by the Integrated Bar of the Philippines or any member of the legal profession of the duty to preserve the rule of law does not suffice to clothe it with standing.[86]

As regards a local government unit (LGU), it can seek relief in order to protect or vindicate an interest of its own, and of the other LGUs.[87]

Intervenors, meanwhile, may be given legal standing upon showing of facts that satisfy the requirements of the law authorizing intervention,[88] such as a legal interest in the matter in litigation, or in the success of either of the parties.

In any case, the Court has discretion to relax the procedural technicality on locus standi, given the liberal attitude it has exercised, highlighted in the case of David v. Macapagal-Arroyo,[89] where technicalities of procedure were brushed aside, the constitutional issues raised being of paramount public interest or of transcendental importance deserving the attention of the Court in view of their seriousness, novelty and weight as precedents.[90] The Courts forbearing stance on locus standi on issues involving constitutional issues has for its purpose the protection of fundamental rights.

In not a few cases, the Court, in keeping with its duty under the Constitution to determine whether the other branches of government have kept themselves within the limits of the Constitution and the laws and have not abused the discretion given them, has brushed aside technical rules of procedure.[91]

In the petitions at bar, petitioners Province of North Cotabato (G.R. No. 183591) Province of Zamboanga del Norte (G.R. No. 183951), City of Iligan (G.R. No. 183893) and City of Zamboanga (G.R. No. 183752) and petitioners-in-intervention Province of Sultan Kudarat, City of Isabela and Municipality of Linamon have locus standi in view of the direct and substantial injury that they, as LGUs, would suffer as their territories, whether in whole or in part, are to be included in the intended domain

of the BJE. These petitioners allege that they did not vote for their inclusion in the ARMM which would be expanded to form the BJE territory. Petitioners legal standing is thus beyond doubt.

In G.R. No. 183962, petitioners Ernesto Maceda, Jejomar Binay and Aquilino Pimentel III would have no standing as citizens and taxpayers for their failure to specify that they would be denied some right or privilege or there would be wastage of public funds. The fact that they are a former Senator, an incumbent mayor of Makati City, and a resident of Cagayan de Oro, respectively, is of no consequence. Considering their invocation of the transcendental importance of the issues at hand, however, the Court grants them standing.

Intervenors Franklin Drilon and Adel Tamano, in alleging their standing as taxpayers, assert that government funds would be expended for the conduct of an illegal and unconstitutional plebiscite to delineate the BJE territory. On that score alone, they can be given legal standing. Their allegation that the issues involved in these petitions are of undeniable transcendental importance clothes them with added basis for their personality to intervene in these petitions.

With regard to Senator Manuel Roxas, his standing is premised on his being a member of the Senate and a citizen to enforce compliance by respondents of the publics constitutional right to be informed of the MOA-AD, as well as on a genuine legal interest in the matter in litigation, or in the success or failure of either of the parties. He thus possesses the requisite standing as an intervenor.

With respect to Intervenors Ruy Elias Lopez, as a former congressman of the 3rd district of Davao City, a taxpayer and a member of the Bagobo tribe; Carlo B. Gomez,

et al., as members of the IBP Palawan chapter, citizens and taxpayers; Marino Ridao, as taxpayer, resident and member of the Sangguniang Panlungsod of Cotabato City; and Kisin Buxani, as taxpayer, they failed to allege any proper legal interest in the present petitions. Just the same, the Court exercises its discretion to relax the procedural technicality on locus standi given the paramount public interest in the issues at hand.

Intervening respondents Muslim Multi-Sectoral Movement for Peace and Development, an advocacy group for justice and the attainment of peace and prosperity in Muslim Mindanao; and Muslim Legal Assistance Foundation Inc., a nongovernment organization of Muslim lawyers, allege that they stand to be benefited or prejudiced, as the case may be, in the resolution of the petitions concerning the MOAAD, and prays for the denial of the petitions on the grounds therein stated. Such legal interest suffices to clothe them with standing.

B. MOOTNESS

Respondents insist that the present petitions have been rendered moot with the satisfaction of all the reliefs prayed for by petitioners and the subsequent pronouncement of the Executive Secretary that [n]o matter what the Supreme Court ultimately decides[,] the government will not sign the MOA.[92]

In lending credence to this policy decision, the Solicitor General points out that the President had already disbanded the GRP Peace Panel.[93]

In David v. Macapagal-Arroyo,[94] this Court held that the moot and academic principle not being a magical formula that automatically dissuades courts in resolving a case, it will decide cases, otherwise moot and academic, if it finds that (a) there is a

grave violation of the Constitution;[95] (b) the situation is of exceptional character and paramount public interest is involved;[96] (c) the constitutional issue raised requires formulation of controlling principles to guide the bench, the bar, and the public;[97] and (d) the case is capable of repetition yet evading review.[98]

Another exclusionary circumstance that may be considered is where there is a voluntary cessation of the activity complained of by the defendant or doer. Thus, once a suit is filed and the doer voluntarily ceases the challenged conduct, it does not automatically deprive the tribunal of power to hear and determine the case and does not render the case moot especially when the plaintiff seeks damages or prays for injunctive relief against the possible recurrence of the violation.[99]

The present petitions fall squarely into these exceptions to thus thrust them into the domain of judicial review. The grounds cited above in David are just as applicable in the present cases as they were, not only in David, but also in Province of Batangas v. Romulo[100] and Manalo v. Calderon[101] where the Court similarly decided them on the merits, supervening events that would ordinarily have rendered the same moot notwithstanding.

Petitions not mooted

Contrary then to the asseverations of respondents, the non-signing of the MOAAD and the eventual dissolution of the GRP Peace Panel did not moot the present petitions. It bears emphasis that the signing of the MOA-AD did not push through due to the Courts issuance of a Temporary Restraining Order.

Contrary too to respondents position, the MOA-AD cannot be considered a mere list of consensus points, especially given its nomenclature, the need to have it signed or initialed by all the parties concerned on August 5, 2008, and the far-reaching Constitutional implications of these consensus points, foremost of which is the creation of the BJE.

In fact, as what will, in the main, be discussed, there is a commitment on the part of respondents to amend and effect necessary changes to the existing legal framework for certain provisions of the MOA-AD to take effect. Consequently, the present petitions are not confined to the terms and provisions of the MOA-AD, but to other on-going and future negotiations and agreements necessary for its realization. The petitions have not, therefore, been rendered moot and academic simply by the public disclosure of the MOA-AD,[102] the manifestation that it will not be signed as well as the disbanding of the GRP Panel not withstanding.

Petitions are imbued with paramount public interest

There is no gainsaying that the petitions are imbued with paramount public interest, involving a significant part of the countrys territory and the wide-ranging political modifications of affected LGUs. The assertion that the MOA-AD is subject to further legal enactments including possible Constitutional amendments more than ever provides impetus for the Court to formulate controlling principles to guide the bench, the bar, the public and, in this case, the government and its negotiating entity.

Respondents cite Suplico v. NEDA, et al.[103] where the Court did not pontificat[e] on issues which no longer legitimately constitute an actual case or controversy [as this] will do more harm than good to the nation as a whole.

The present petitions must be differentiated from Suplico. Primarily, in Suplico, what was assailed and eventually cancelled was a stand-alone government procurement contract for a national broadband network involving a one-time contractual relation between two partiesthe government and a private foreign corporation. As the issues therein involved specific government procurement policies and standard principles on contracts, the majority opinion in Suplico found nothing exceptional therein, the factual circumstances being peculiar only to the transactions and parties involved in the controversy. The MOA-AD is part of a series of agreements

In the present controversy, the MOA-AD is a significant part of a series of agreements necessary to carry out the Tripoli Agreement 2001. The MOA-AD which dwells on the Ancestral Domain Aspect of said Tripoli Agreement is the third such component to be undertaken following the implementation of the Security Aspect in August 2001 and the Humanitarian, Rehabilitation and Development Aspect in May 2002.

Accordingly, even if the Executive Secretary, in his Memorandum of August 28, 2008 to the Solicitor General, has stated that no matter what the Supreme Court ultimately decides[,] the government will not sign the MOA[-AD], mootness will not set in in light of the terms of the Tripoli Agreement 2001.

Need to formulate principles-guidelines

Surely, the present MOA-AD can be renegotiated or another one will be drawn up to carry out the Ancestral Domain Aspect of the Tripoli Agreement 2001, in another or in any form, which could contain similar or significantly drastic provisions. While the Court notes the word of the Executive Secretary that the government is committed to securing an agreement that is both constitutional and equitable because that is the only way that long-lasting peace can be assured, it is minded to render a decision on the merits in the present petitions to formulate controlling principles to guide the bench, the bar, the public and, most especially, the government in negotiating with the MILF regarding Ancestral Domain.

Respondents invite the Courts attention to the separate opinion of then Chief Justice Artemio Panganiban in Sanlakas v. Reyes[104] in which he stated that the doctrine of capable of repetition yet evading review can override mootness, provided the party raising it in a proper case has been and/or continue to be prejudiced or damaged as a direct result of their issuance. They contend that the Court must have jurisdiction over the subject matter for the doctrine to be invoked.

The present petitions all contain prayers for Prohibition over which this Court exercises original jurisdiction. While G.R. No. 183893 (City of Iligan v. GRP) is a petition for Injunction and Declaratory Relief, the Court will treat it as one for Prohibition as it has far reaching implications and raises questions that need to be resolved.[105] At all events, the Court has jurisdiction over most if not the rest of the petitions.

Indeed, the present petitions afford a proper venue for the Court to again apply the doctrine immediately referred to as what it had done in a number of landmark cases.

[106] There is a reasonable expectation that petitioners, particularly the Provinces of North Cotabato, Zamboanga del Norte and Sultan Kudarat, the Cities of Zamboanga, Iligan and Isabela, and the Municipality of Linamon, will again be subjected to the same problem in the future as respondents actions are capable of repetition, in another or any form.

It is with respect to the prayers for Mandamus that the petitions have become moot, respondents having, by Compliance of August 7, 2008, provided this Court and petitioners with official copies of the final draft of the MOA-AD and its annexes. Too, intervenors have been furnished, or have procured for themselves, copies of the MOAAD. V. SUBSTANTIVE ISSUES

As culled from the Petitions and Petitions-in-Intervention, there are basically two SUBSTANTIVE issues to be resolved, one relating to the manner in which the MOAAD was negotiated and finalized, the other relating to its provisions, viz:

1. Did respondents violate constitutional and statutory provisions on public consultation and the right to information when they negotiated and later initialed the MOA-AD?

2. Do the contents of the MOA-AD violate the Constitution and the laws? ON THE FIRST SUBSTANTIVE ISSUE

Petitioners invoke their constitutional right to information on matters of public concern, as provided in Section 7, Article III on the Bill of Rights:

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.[107]

As early as 1948, in Subido v. Ozaeta,[108] the Court has recognized the statutory right to examine and inspect public records, a right which was eventually accorded constitutional status.

The right of access to public documents, as enshrined in both the 1973 Constitution and the 1987 Constitution, has been recognized as a self-executory constitutional right.[109]

In the 1976 case of Baldoza v. Hon. Judge Dimaano,[110] the Court ruled that access to public records is predicated on the right of the people to acquire information on matters of public concern since, undoubtedly, in a democracy, the pubic has a legitimate interest in matters of social and political significance.

x x x The incorporation of this right in the Constitution is a recognition of the fundamental role of free exchange of information in a democracy. There can be no realistic perception by the public of the nations problems, nor a meaningful democratic decision-making if they are denied access to information of general interest. Information is needed to enable the members of society to cope with the exigencies of the times. As has been aptly observed: Maintaining the flow of such information depends on protection for both its acquisition and its dissemination since, if either process is interrupted, the flow inevitably ceases. x x x[111]

In the same way that free discussion enables members of society to cope with the exigencies of their time, access to information of general interest aids the people in

democratic decision-making by giving them a better perspective of the vital issues confronting the nation[112] so that they may be able to criticize and participate in the affairs of the government in a responsible, reasonable and effective manner. It is by ensuring an unfettered and uninhibited exchange of ideas among a well-informed public that a government remains responsive to the changes desired by the people.[113]

The MOA-AD is a matter of public concern

That the subject of the information sought in the present cases is a matter of public concern[114] faces no serious challenge. In fact, respondents admit that the MOA-AD is indeed of public concern.[115] In previous cases, the Court found that the regularity of real estate transactions entered in the Register of Deeds,[116] the need for adequate notice to the public of the various laws,[117] the civil service eligibility of a public employee,[118] the proper management of GSIS funds allegedly used to grant loans to public officials,[119] the recovery of the Marcoses alleged ill-gotten wealth, [120] and the identity of party-list nominees,[121] among others, are matters of public concern. Undoubtedly, the MOA-AD subject of the present cases is of public concern, involving as it does the sovereignty and territorial integrity of the State, which directly affects the lives of the public at large.

Matters of public concern covered by the right to information include steps and negotiations leading to the consummation of the contract. In not distinguishing as to the executory nature or commercial character of agreements, the Court has categorically ruled:

x x x [T]he 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. 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 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.[122] (Emphasis and italics in the original)

Intended as a splendid symmetry[123] to the right to information under the Bill of Rights is the policy of public disclosure under Section 28, Article II of the Constitution reading:

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.[124]

The policy of full public disclosure enunciated in above-quoted Section 28 complements the right of access to information on matters of public concern found in the Bill of Rights. The right to information guarantees the right of the people to demand information, while Section 28 recognizes the duty of officialdom to give information even if nobody demands.[125]

The policy of public disclosure establishes a concrete ethical principle for the conduct of public affairs in a genuinely open democracy, with the peoples right to know as the centerpiece. It is a mandate of the State to be accountable by following such policy.[126] These provisions are vital to the exercise of the freedom of expression and essential to hold public officials at all times accountable to the people.[127]

Whether Section 28 is self-executory, the records of the deliberations of the Constitutional Commission so disclose:

MR. SUAREZ. And since this is not self-executory, this policy will not be enunciated or will not be in force and effect until after Congress shall have provided it. MR. OPLE. I expect it to influence the climate of public ethics immediately but, of course, the implementing law will have to be enacted by Congress, Mr. Presiding Officer.[128]

The following discourse, after Commissioner Hilario Davide, Jr., sought clarification on the issue, is enlightening.

MR. DAVIDE. I would like to get some clarifications on this. Mr. Presiding Officer, did I get the Gentleman correctly as having said that this is not a self-executing provision? It would require a legislation by Congress to implement? MR. OPLE. Yes. Originally, it was going to be self-executing, but I accepted an amendment from Commissioner Regalado, so that the safeguards on national interest are modified by the clause as may be provided by law MR. DAVIDE. But as worded, does it not mean that this will immediately take effect and Congress may provide for reasonable safeguards on the sole ground national interest? MR. OPLE. Yes. I think so, Mr. Presiding Officer, I said earlier that it should immediately influence the climate of the conduct of public affairs but, of course, Congress here may no longer pass a law revoking it, or if this is approved, revoking this principle, which is inconsistent with this policy.[129] (Emphasis supplied)

Indubitably, the effectivity of the policy of public disclosure need not await the passing of a statute. As Congress cannot revoke this principle, it is merely directed to provide for reasonable safeguards. The complete and effective exercise of the right to information necessitates that its complementary provision on public disclosure derive the same self-executory nature. Since both provisions go hand-in-hand, it is absurd to

say that the broader[130] right to information on matters of public concern is already enforceable while the correlative duty of the State to disclose its transactions involving public interest is not enforceable until there is an enabling law. Respondents cannot thus point to the absence of an implementing legislation as an excuse in not effecting such policy.

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 peoples will.[131] Envisioned to be corollary to the twin rights to information and disclosure is the design for feedback mechanisms.

MS. ROSARIO BRAID. Yes. And lastly, Mr. Presiding Officer, will the people be able to participate? Will the government provide feedback mechanisms so that the people can participate and can react where the existing media facilities are not able to provide full feedback mechanisms to the government? I suppose this will be part of the government implementing operational mechanisms. MR. OPLE. Yes. I think through their elected representatives and that is how these courses take place. There is a message and a feedback, both ways. xxxx MS. ROSARIO BRAID. Mr. Presiding Officer, may I just make one last sentence? I think when we talk about the feedback network, we are not talking about public officials but also network of private business o[r] community-based organizations that will be reacting. As a matter of fact, we will put more credence or credibility on the private network of volunteers and voluntary community-based organizations. So I do not think we are afraid that there will be another OMA in the making.[132] (Emphasis supplied)

The imperative of a public consultation, as a species of the right to information, is evident in the marching orders to respondents. The mechanics for the duty to disclose information and to conduct public consultation regarding the peace agenda and process is manifestly provided by E.O. No. 3.[133] The preambulatory clause of E.O. No. 3 declares that there is a need to further enhance the contribution of civil society to the comprehensive peace process by institutionalizing the peoples participation.

One of the three underlying principles of the comprehensive peace process is that it should be community-based, reflecting the sentiments, values and principles important to all Filipinos and shall be defined not by the government alone, nor by the different contending groups only, but by all Filipinos as one community.[134] Included as a component of the comprehensive peace process is consensus-building and empowerment for peace, which includes continuing consultations on both national and local levels to build consensus for a peace agenda and process, and the mobilization and facilitation of peoples participation in the peace process.[135]

Clearly, E.O. No. 3 contemplates not just the conduct of a plebiscite to effectuate continuing consultations, contrary to respondents position that plebiscite is more than sufficient consultation.[136]

Further, E.O. No. 3 enumerates the functions and responsibilities of the PAPP, one of which is to [c]onduct regular dialogues with the National Peace Forum (NPF) and other peace partners to seek relevant information, comments, recommendations as well as to render appropriate and timely reports on the progress of the comprehensive peace process.[137] E.O. No. 3 mandates the establishment of the NPF to be the principal forum for the PAPP to consult with and seek advi[c]e from the peace advocates, peace partners and concerned sectors of society on both national and local levels, on the

implementation of the comprehensive peace process, as well as for government[-]civil society dialogue and consensus-building on peace agenda and initiatives.[138]

In fine, E.O. No. 3 establishes petitioners right to be consulted on the peace agenda, as a corollary to the constitutional right to information and disclosure.

PAPP Esperon committed grave abuse of discretion

The PAPP committed grave abuse of discretion when he failed to carry out the pertinent consultation. The furtive process by which the MOA-AD was designed and crafted runs contrary to and in excess of the legal authority, and amounts to a whimsical, capricious, oppressive, arbitrary and despotic exercise thereof.

The Court may not, of course, require the PAPP to conduct the consultation in a particular way or manner. It may, however, require him to comply with the law and discharge the functions within the authority granted by the President.[139]

Petitioners are not claiming a seat at the negotiating table, contrary to respondents retort in justifying the denial of petitioners right to be consulted. Respondents stance manifests the manner by which they treat the salient provisions of E.O. No. 3 on peoples participation. Such disregard of the express mandate of the President is not much different from superficial conduct toward token provisos that border on classic lip service.[140] It illustrates a gross evasion of positive duty and a virtual refusal to perform the duty enjoined.

As for respondents invocation of the doctrine of executive privilege, it is not tenable under the premises. The argument defies sound reason when contrasted with E.O. No. 3s explicit provisions on continuing consultation and dialogue on both national and local levels. The executive order even recognizes the exercise of the publics right even before the GRP makes its official recommendations or before the government proffers its definite propositions.[141] It bear emphasis that E.O. No. 3 seeks to elicit relevant advice, information, comments and recommendations from the people through dialogue.

AT ALL EVENTS, respondents effectively waived the defense of executive privilege in view of their unqualified disclosure of the official copies of the final draft of the MOA-AD. By unconditionally complying with the Courts August 4, 2008 Resolution, without a prayer for the documents disclosure in camera, or without a manifestation that it was complying therewith ex abundante ad cautelam.

Petitioners assertion that the Local Government Code (LGC) of 1991 declares it a State policy to require all national agencies and offices to conduct periodic consultations with appropriate local government units, non-governmental and people's organizations, and other concerned sectors of the community before any project or program is implemented in their respective jurisdictions[142] is well-taken. The LGC chapter on intergovernmental relations puts flesh into this avowed policy:

Prior Consultations Required. No project or program shall be implemented by government authorities unless the consultations mentioned in Sections 2 (c) and 26 hereof are complied with, and prior approval of the sanggunian concerned is obtained: Provided, That occupants in areas where such projects are to be implemented shall not be evicted unless appropriate relocation sites have been provided, in accordance with the provisions of the Constitution.[143] (Italics and underscoring supplied)

In Lina, Jr. v. Hon. Pao,[144] the Court held that the above-stated policy and above-quoted provision of the LGU apply only to national programs or projects which are to be implemented in a particular local community. Among the programs and projects covered are those that are critical to the environment and human ecology including those that may call for the eviction of a particular group of people residing in the locality where these will be implemented.[145] The MOA-AD is one peculiar program that unequivocally and unilaterally vests ownership of a vast territory to the Bangsamoro people,[146] which could pervasively and drastically result to the diaspora or displacement of a great number of inhabitants from their total environment.

With respect to the indigenous cultural communities/indigenous peoples (ICCs/IPs), whose interests are represented herein by petitioner Lopez and are adversely affected by the MOA-AD, the ICCs/IPs have, under the IPRA, the right to participate fully at all levels of decision-making in matters which may affect their rights, lives and destinies.[147] The MOA-AD, an instrument recognizing ancestral domain, failed to justify its non-compliance with the clear-cut mechanisms ordained in said Act,[148] which entails, among other things, the observance of the free and prior informed consent of the ICCs/IPs. Notably, the IPRA does not grant the Executive Department or any government agency the power to delineate and recognize an ancestral domain claim by mere agreement or compromise. The recognition of the ancestral domain is the raison detre of the MOA-AD, without which all other stipulations or consensus points necessarily must fail. In proceeding to make a sweeping declaration on ancestral domain, without complying with the IPRA, which is cited as one of the TOR of the MOA-AD, respondents clearly transcended the boundaries of their authority. As it seems, even the heart of the MOA-AD is still subject to necessary changes to the legal

framework. While paragraph 7 on Governance suspends the effectivity of all provisions requiring changes to the legal framework, such clause is itself invalid, as will be discussed in the following section.

Indeed, ours is an open society, with all the acts of the government subject to public scrutiny and available always to public cognizance. This has to be so if the country is to remain democratic, with sovereignty residing in the people and all government authority emanating from them.[149]

ON THE SECOND SUBSTANTIVE ISSUE With regard to the provisions of the MOA-AD, there can be no question that they cannot all be accommodated under the present Constitution and laws. Respondents have admitted as much in the oral arguments before this Court, and the MOA-AD itself recognizes the need to amend the existing legal framework to render effective at least some of its provisions. Respondents, nonetheless, counter that the MOA-AD is free of any legal infirmity because any provisions therein which are inconsistent with the present legal framework will not be effective until the necessary changes to that framework are made. The validity of this argument will be considered later. For now, the Court shall pass upon how

The MOA-AD is inconsistent with the Constitution and laws as presently worded.

In general, the objections against the MOA-AD center on the extent of the powers conceded therein to the BJE. Petitioners assert that the powers granted to the BJE

exceed those granted to any local government under present laws, and even go beyond those of the present ARMM. Before assessing some of the specific powers that would have been vested in the BJE, however, it would be useful to turn first to a general idea that serves as a unifying link to the different provisions of the MOA-AD, namely, the international law concept of association. Significantly, the MOA-AD explicitly alludes to this concept, indicating that the Parties actually framed its provisions with it in mind.

Association is referred to in paragraph 3 on TERRITORY, paragraph 11 on RESOURCES, and paragraph 4 on GOVERNANCE. relationship between the BJE and the Central Government. It is in the last mentioned provision, however, that the MOA-AD most clearly uses it to describe the envisioned

4. The relationship between the Central Government and the Bangsamoro juridical entity shall be associative characterized by shared authority and responsibility with a structure of governance based on executive, legislative, judicial and administrative institutions with defined powers and functions in the comprehensive compact. A period of transition shall be established in a comprehensive peace compact specifying the relationship between the Central Government and the BJE. (Emphasis and underscoring supplied)

The nature of the associative relationship may have been intended to be defined more precisely in the still to be forged Comprehensive Compact. Nonetheless, given that there is a concept of association in international law, and the MOA-AD by its inclusion of international law instruments in its TOR placed itself in an international legal context, that concept of association may be brought to bear in understanding the use of the term associative in the MOA-AD.

Keitner and Reisman state that

[a]n association is formed when two states of unequal power voluntarily establish durable links. In the basic model, one state, the associate, delegates certain

responsibilities to the other, the principal, while maintaining its international status as a state. Free associations represent a middle ground between integration and independence. x x x[150] (Emphasis and underscoring supplied)

For purposes of illustration, the Republic of the Marshall Islands and the Federated States of Micronesia (FSM), formerly part of the U.S.-administered Trust Territory of the Pacific Islands,[151] are associated states of the U.S. pursuant to a Compact of Free Association. The currency in these countries is the U.S. dollar, Their international legal status as states was indicating their very close ties with the U.S., yet they issue their own travel documents, which is a mark of their statehood. confirmed by the UN Security Council and by their admission to UN membership.

According to their compacts of free association, the Marshall Islands and the FSM generally have the capacity to conduct foreign affairs in their own name and right, such capacity extending to matters such as the law of the sea, marine resources, trade, banking, postal, civil aviation, and cultural relations. The U.S. government, when conducting its foreign affairs, is obligated to consult with the governments of the Marshall Islands or the FSM on matters which it (U.S. government) regards as relating to or affecting either government.

In the event of attacks or threats against the Marshall Islands or the FSM, the U.S. government has the authority and obligation to defend them as if they were part of U.S. territory. The U.S. government, moreover, has the option of establishing and using military areas and facilities within these associated states and has the right to bar the military personnel of any third country from having access to these territories for military purposes.

It bears noting that in U.S. constitutional and international practice, free association is understood as an international association between sovereigns. The Compact of Free Association is a treaty which is subordinate to the associated nations national constitution, and each party may terminate the association consistent with the right of independence. It has been said that, with the admission of the U.S.-associated states to the UN in 1990, the UN recognized that the American model of free association is actually based on an underlying status of independence.[152]

In international practice, the associated state arrangement has usually been used as a transitional device of former colonies on their way to full independence. Examples of states that have passed through the status of associated states as a transitional phase are Antigua, St. Kitts-Nevis-Anguilla, Dominica, St. Lucia, St. Vincent and Grenada. All have since become independent states.[153]

Back to the MOA-AD, it contains many provisions which are consistent with the international legal concept of association, specifically the following: the BJEs capacity to enter into economic and trade relations with foreign countries, the commitment of the Central Government to ensure the BJEs participation in meetings and events in the ASEAN and the specialized UN agencies, and the continuing responsibility of the Central Government over external defense. Moreover, the BJEs right to participate in Philippine official missions bearing on negotiation of border agreements, environmental protection, and sharing of revenues pertaining to the bodies of water adjacent to or between the islands forming part of the ancestral domain, resembles the right of the governments of FSM and the Marshall Islands to be consulted by the U.S. government on any foreign affairs matter affecting them.

These provisions of the MOA indicate, among other things, that the Parties aimed to vest in the BJE the status of an associated state or, at any rate, a status closely approximating it.

The concept of association is not recognized under the present Constitution

No province, city, or municipality, not even the ARMM, is recognized under our laws as having an associative relationship with the national government. Indeed, the concept implies powers that go beyond anything ever granted by the Constitution to any local or regional government. It also implies the recognition of the associated entity as a state. The Constitution, however, does not contemplate any state in this jurisdiction other than the Philippine State, much less does it provide for a transitory status that aims to prepare any part of Philippine territory for independence.

Even the mere concept animating many of the MOA-ADs provisions, therefore, already requires for its validity the amendment of constitutional provisions, specifically the following provisions of Article X:

SECTION 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter provided. SECTION 15. There 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.

The BJE is a far more powerful entity than the autonomous region

recognized in the Constitution

It is not merely an expanded version of the ARMM, the status of its relationship with the national government being fundamentally different from that of the ARMM. Indeed, BJE is a state in all but name as it meets the criteria of a state laid down in the Montevideo Convention,[154] namely, a permanent population, a defined territory, a government, and a capacity to enter into relations with other states.

Even assuming arguendo that the MOA-AD would not necessarily sever any portion of Philippine territory, the spirit animating it which has betrayed itself by its use of the concept of association runs counter to the national sovereignty and territorial integrity of the Republic.

The defining concept underlying the relationship between the national government and the BJE being itself contrary to the present Constitution, it is not surprising that many of the specific provisions of the MOA-AD on the formation and powers of the BJE are in conflict with the Constitution and the laws.

Article X, Section 18 of the Constitution provides that [t]he creation of the autonomous region shall be effective when approved by a 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. (Emphasis supplied)

As reflected above, the BJE is more of a state than an autonomous region. But even assuming that it is covered by the term autonomous region in the constitutional provision just quoted, the MOA-AD would still be in conflict with it. Under paragraph

2(c) on TERRITORY in relation to 2(d) and 2(e), the present geographic area of the ARMM and, in addition, the municipalities of Lanao del Norte which voted for inclusion in the ARMM during the 2001 plebiscite Baloi, Munai, Nunungan, Pantar, Tagoloan and Tangkal are automatically part of the BJE without need of another plebiscite, in contrast to the areas under Categories A and B mentioned earlier in the overview. That the present components of the ARMM and the above-mentioned municipalities voted for inclusion therein in 2001, however, does not render another plebiscite unnecessary under the Constitution, precisely because what these areas voted for then was their inclusion in the ARMM, not the BJE.

The MOA-AD, moreover, would not comply with Article X, Section 20 of the Constitution

since that provision defines the powers of autonomous regions as follows:

SECTION 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) (2) (3) (4) (5) (6) (7) (8) (9) Administrative organization; Creation of sources of revenues; Ancestral domain and natural resources; Personal, family, and property relations; Regional urban and rural planning development; Economic, social, and tourism development; Educational policies; Preservation and development of the cultural heritage; and Such other matters as may be authorized by law for the promotion of the general welfare of the people of the region. (Underscoring supplied)

Again on the premise that the BJE may be regarded as an autonomous region, the MOA-AD would require an amendment that would expand the above-quoted provision.

The mere passage of new legislation pursuant to sub-paragraph No. 9 of said constitutional provision would not suffice, since any new law that might vest in the BJE the powers found in the MOA-AD must, itself, comply with other provisions of the Constitution. It would not do, for instance, to merely pass legislation vesting the BJE with treaty-making power in order to accommodate paragraph 4 of the strand on RESOURCES which states: The BJE is free to enter into any economic cooperation and trade relations with foreign countries: provided, however, that such relationships and understandings do not include aggression against the Government of the Republic of the Philippines x x x. Under our constitutional system, it is only the President who has that power. Pimentel v. Executive Secretary[155] instructs:

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

Article II, Section 22 of the Constitution must also be amended if the scheme envisioned in the MOA-AD is to be effected. That constitutional provision states: The State recognizes and promotes the rights of indigenous cultural communities within the framework of national unity and development. (Underscoring supplied) An associative arrangement does not uphold national unity. While there may be a semblance of unity because of the associative ties between the BJE and the national government, the act of placing a portion of Philippine territory in a status which, in international practice, has generally been a preparation for independence, is certainly not conducive to national unity.

Besides being irreconcilable with the Constitution, the MOA-AD is also inconsistent with prevailing statutory law, among which are R.A. No. 9054[156] or the Organic Act of the ARMM, and the IPRA.[157]

Article X, Section 3 of the Organic Act of the ARMM is a bar to the adoption of the definition of Bangsamoro people used in the MOA-AD. Paragraph 1 on CONCEPTS AND PRINCIPLES states:
1. It is the birthright of all Moros and all Indigenous peoples of Mindanao to identify themselves and be accepted as Bangsamoros. The Bangsamoro people refers to those who are natives or original inhabitants of Mindanao and its adjacent islands including Palawan and the Sulu archipelago at the time of conquest or colonization of its descendants whether mixed or of full blood. Spouses and their descendants are classified as Bangsamoro. The freedom of choice of the Indigenous people shall be respected. (Emphasis and underscoring supplied)

This use of the term Bangsamoro sharply contrasts with that found in the Article X, Section 3 of the Organic Act, which, rather than lumping together the identities of the Bangsamoro and other indigenous peoples living in Mindanao, clearly distinguishes between Bangsamoro people and Tribal peoples, as follows:

As used in this Organic Act, the phrase indigenous cultural community refers to Filipino citizens residing in the autonomous region who are: (a) Tribal peoples. These are citizens whose social, cultural and economic conditions distinguish them from other sectors of the national community; and (b) Bangsa Moro people. These are citizens who are believers in Islam and who have retained some or all of their own social, economic, cultural, and political institutions.

Respecting the IPRA, it lays down the prevailing procedure for the delineation and recognition of ancestral domains. The MOA-ADs manner of delineating the ancestral domain of the Bangsamoro people is a clear departure from that procedure. By paragraph 1 of TERRITORY, the Parties simply agree that, subject to the delimitations in the agreed Schedules, [t]he Bangsamoro homeland and historic territory refer to the land mass as well as the maritime, terrestrial, fluvial and alluvial domains, and the aerial domain, the atmospheric space above it, embracing the Mindanao-Sulu-Palawan geographic region.

Chapter VIII of the IPRA, on the other hand, lays down a detailed procedure, as illustrated in the following provisions thereof:

SECTION 52. Delineation Process. The identification and delineation of ancestral domains shall be done in accordance with the following procedures: xxxx b) Petition for Delineation. The process of delineating a specific perimeter may be initiated by the NCIP with the consent of the ICC/IP concerned, or through a Petition for Delineation filed with the NCIP, by a majority of the members of the ICCs/IPs; c) Delineation Proper. The official delineation of ancestral domain boundaries including census of all community members therein, shall be immediately undertaken by the Ancestral Domains Office upon filing of the application by the ICCs/IPs concerned. Delineation will be done in coordination with the community concerned and shall at all times include genuine involvement and participation by the members of the communities concerned; d) Proof Required. Proof of Ancestral Domain Claims shall include the testimony of elders or community under oath, and other documents directly or indirectly attesting to the possession or occupation of the area since time immemorial by such ICCs/IPs in the concept of owners which shall be any one (1) of the following authentic documents: 1) Written accounts of the ICCs/IPs customs and traditions; 2) Written accounts of the ICCs/IPs political structure and institution;

3) Pictures showing long term occupation such as those of old improvements, burial grounds, sacred places and old villages; 4) Historical accounts, including pacts and agreements concerning boundaries entered into by the ICCs/IPs concerned with other ICCs/IPs; 5) Survey plans and sketch maps; 6) Anthropological data; 7) Genealogical surveys; 8) Pictures and descriptive histories of traditional communal forests and hunting grounds; 9) Pictures and descriptive histories of traditional landmarks such as mountains, rivers, creeks, ridges, hills, terraces and the like; and 10) Write-ups of names and places derived from the native dialect of the community. e) Preparation of Maps. On the basis of such investigation and the findings of fact based thereon, the Ancestral Domains Office of the NCIP shall prepare a perimeter map, complete with technical descriptions, and a description of the natural features and landmarks embraced therein; f) Report of Investigation and Other Documents. A complete copy of the preliminary census and a report of investigation, shall be prepared by the Ancestral Domains Office of the NCIP; g) Notice and Publication. A copy of each document, including a translation in the native language of the ICCs/IPs concerned shall be posted in a prominent place therein for at least fifteen (15) days. A copy of the document shall also be posted at the local, provincial and regional offices of the NCIP, and shall be published in a newspaper of general circulation once a week for two (2) consecutive weeks to allow other claimants to file opposition thereto within fifteen (15) days from date of such publication: Provided, That in areas where no such newspaper exists, broadcasting in a radio station will be a valid substitute: Provided, further, That mere posting shall be deemed sufficient if both newspaper and radio station are not available; h) Endorsement to NCIP. Within fifteen (15) days from publication, and of the inspection process, the Ancestral Domains Office shall prepare a report to the NCIP endorsing a favorable action upon a claim that is deemed to have sufficient proof. However, if the proof is deemed insufficient, the Ancestral Domains Office shall require the submission of additional evidence: Provided, That the Ancestral Domains Office shall reject any claim that is deemed patently false or fraudulent after inspection and verification: Provided, further, That in case of rejection, the Ancestral Domains Office shall give the applicant due notice, copy furnished all concerned, containing the grounds for denial. The denial shall be appealable to the NCIP: Provided, furthermore, That in

cases where there are conflicting claims among ICCs/IPs on the boundaries of ancestral domain claims, the Ancestral Domains Office shall cause the contending parties to meet and assist them in coming up with a preliminary resolution of the conflict, without prejudice to its full adjudication according to the section below. xxxx

To remove all doubts about the irreconcilability of the MOA-AD with the present legal system, a discussion of not only the Constitution and domestic statutes, but also of international law is in order, for

Article II, Section 2 of the Constitution states that the Philippines adopts the generally accepted principles of international law as part of the law of the land.

Applying this provision of the Constitution, the Court, in Mejoff v. Director of Prisons, [158] held that the Universal Declaration of Human Rights is part of the law of the land on account of which it ordered the release on bail of a detained alien of Russian descent whose deportation order had not been executed even after two years. Similarly, the Court in Agustin v. Edu[159] applied the aforesaid constitutional provision to the 1968 Vienna Convention on Road Signs and Signals.

International law has long recognized the right to self-determination of peoples, understood not merely as the entire population of a State but also a portion thereof. In considering the question of whether the people of Quebec had a right to unilaterally secede from Canada, the Canadian Supreme Court in REFERENCE RE SECESSION OF QUEBEC[160] had occasion to acknowledge that the right of a people to selfdetermination is now so widely recognized in international conventions that the principle has acquired a status beyond convention and is considered a general principle of international law.

Among the conventions referred to are the International Covenant on Civil and Political Rights[161] and the International Covenant on Economic, Social and Cultural Rights[162] which state, in Article 1 of both covenants, that all peoples, by virtue of the right of self-determination, freely determine their political status and freely pursue their economic, social, and cultural development.

The peoples right to self-determination should not, however, be understood as extending to a unilateral right of secession. A distinction should be made between the right of internal and external self-determination. REFERENCE RE SECESSION OF QUEBEC is again instructive:

(ii) Scope of the Right to Self-determination 126. The recognized sources of international law establish that the right to selfdetermination of a people is normally fulfilled through internal self-determination a peoples pursuit of its political, economic, social and cultural development within the framework of an existing state. A right to external self-determination (which in this case potentially takes the form of the assertion of a right to unilateral secession) arises in only the most extreme of cases and, even then, under carefully defined circumstances. x x x External self-determination can be defined as in the following statement from the Declaration on Friendly Relations, supra, as The establishment of a sovereign and independent State, the free association or integration with an independent State or the emergence into any other political status freely determined by a people constitute modes of implementing the right of self-determination by that people. (Emphasis added) 127. The international law principle of self-determination has evolved within a framework of respect for the territorial integrity of existing states. The various international documents that support the existence of a peoples right to selfdetermination also contain parallel statements supportive of the conclusion that the exercise of such a right must be sufficiently limited to prevent threats to an existing states territorial integrity or the stability of relations between sovereign states. x x x x (Emphasis, italics and underscoring supplied)

The Canadian Court went on to discuss the exceptional cases in which the right to external self-determination can arise, namely, where a people is under colonial rule, is subject to foreign domination or exploitation outside a colonial context, and less definitely but asserted by a number of commentators is blocked from the meaningful exercise of its right to internal self-determination. The Court ultimately held that the population of Quebec had no right to secession, as the same is not under colonial rule or foreign domination, nor is it being deprived of the freedom to make political choices and pursue economic, social and cultural development, citing that Quebec is equitably represented in legislative, executive and judicial institutions within Canada, even occupying prominent positions therein.

The exceptional nature of the right of secession is further exemplified in the REPORT OF THE INTERNATIONAL COMMITTEE OF JURISTS ON THE LEGAL ASPECTS OF THE AALAND ISLANDS QUESTION.[163] There, Sweden presented to the Council of the League of Nations the question of whether the inhabitants of the Aaland Islands should be authorized to determine by plebiscite if the archipelago should remain under Finnish sovereignty or be incorporated in the kingdom of Sweden. The Council, before resolving the question, appointed an International Committee composed of three jurists to submit an opinion on the preliminary issue of whether the dispute should, based on international law, be entirely left to the domestic jurisdiction of Finland. The Committee stated the rule as follows:

x x x [I]n the absence of express provisions in international treaties, the right of disposing of national territory is essentially an attribute of the sovereignty of every State. Positive International Law does not recognize the right of national groups, as such, to separate themselves from the State of which they form part by the simple expression of a wish, any more than it recognizes the right of other States to claim such a separation. Generally speaking, the grant or refusal of the right to a

portion of its population of determining its own political fate by plebiscite or by some other method, is, exclusively, an attribute of the sovereignty of every State which is definitively constituted. A dispute between two States concerning such a question, under normal conditions therefore, bears upon a question which International Law leaves entirely to the domestic jurisdiction of one of the States concerned. Any other solution would amount to an infringement of sovereign rights of a State and would involve the risk of creating difficulties and a lack of stability which would not only be contrary to the very idea embodied in term State, but would also endanger the interests of the international community. If this right is not possessed by a large or small section of a nation, neither can it be held by the State to which the national group wishes to be attached, nor by any other State. (Emphasis and underscoring supplied)

The Committee held that the dispute concerning the Aaland Islands did not refer to a question which is left by international law to the domestic jurisdiction of Finland, thereby applying the exception rather than the rule elucidated above. Its ground for departing from the general rule, however, was a very narrow one, namely, the Aaland Islands agitation originated at a time when Finland was undergoing drastic political transformation. The internal situation of Finland was, according to the Committee, so abnormal that, for a considerable time, the conditions required for the formation of a sovereign State did not exist. In the midst of revolution, anarchy, and civil war, the legitimacy of the Finnish national government was disputed by a large section of the people, and it had, in fact, been chased from the capital and forcibly prevented from carrying out its duties. The armed camps and the police were divided into two opposing forces. In light of these circumstances, Finland was not, during the relevant time period, a definitively constituted sovereign state. The Committee, therefore, found that Finland did not possess the right to withhold from a portion of its population the option to separate itself a right which sovereign nations generally have with respect to their own populations.

Turning now to the more specific category of indigenous peoples, this term has been used, in scholarship as well as international, regional, and state practices, to refer to

groups with distinct cultures, histories, and connections to land (spiritual and otherwise) that have been forcibly incorporated into a larger governing society. These groups are regarded as indigenous since they are the living descendants of pre-invasion inhabitants of lands now dominated by others. Otherwise stated, indigenous peoples, nations, or communities are culturally distinctive groups that find themselves engulfed by settler societies born of the forces of empire and conquest.[164] Examples of groups who have been regarded as indigenous peoples are the Maori of New Zealand and the aboriginal peoples of Canada.

As with the broader category of peoples, indigenous peoples situated within states do not have a general right to independence or secession from those states under international law,[165] but they do have rights amounting to what was discussed above as the right to internal self-determination.

In a historic development last September 13, 2007, the UN General Assembly adopted the United Nations Declaration on the Rights of Indigenous Peoples (UN DRIP) through General Assembly Resolution 61/295. The vote was 143 to 4, the Philippines being included among those in favor, and the four voting against being Australia, Canada, New Zealand, and the U.S. The Declaration clearly recognized the right of indigenous peoples to self-determination, encompassing the right to autonomy or selfgovernment, to wit:

Article 3 Indigenous peoples have the right to self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development. Article 4

Indigenous peoples, in exercising their right to self-determination, have the right to autonomy or self-government in matters relating to their internal and local affairs, as well as ways and means for financing their autonomous functions. Article 5 Indigenous peoples have the right to maintain and strengthen their distinct political, legal, economic, social and cultural institutions, while retaining their right to participate fully, if they so choose, in the political, economic, social and cultural life of the State.

Self-government, as used in international legal discourse pertaining to indigenous peoples, has been understood as equivalent to internal self-determination.[166] The extent of self-determination provided for in the UN DRIP is more particularly defined in its subsequent articles, some of which are quoted hereunder:
Article 8 1. 2. Indigenous peoples and individuals have the right not to be subjected to forced assimilation or destruction of their culture. States shall provide effective mechanisms for prevention of, and redress for: (a) Any action which has the aim or effect of depriving them of their integrity as distinct peoples, or of their cultural values or ethnic identities; Any action which has the aim or effect of dispossessing them of their lands, territories or resources; Any form of forced population transfer which has the aim or effect of violating or undermining any of their rights; Any form of forced assimilation or integration;

(b) (c) (d)

(e) Article 21 1.

Any form of propaganda designed to promote or incite racial or ethnic discrimination directed against them.

2.

Indigenous peoples have the right, without discrimination, to the improvement of their economic and social conditions, including, inter alia, in the areas of education, employment, vocational training and retraining, housing, sanitation, health and social security. States shall take effective measures and, where appropriate, special measures to ensure continuing improvement of their economic and social conditions. Particular attention shall be paid to the rights and special needs of indigenous elders, women, youth, children and persons with disabilities.

Article 26 1. 2. Indigenous peoples have the right to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired. Indigenous peoples have the right to own, use, develop and control the lands, territories and resources that they possess by reason of traditional ownership or other traditional occupation or use, as well as those which they have otherwise acquired. States shall give legal recognition and protection to these lands, territories and resources. Such recognition shall be conducted with due respect to the customs, traditions and land tenure systems of the indigenous peoples concerned.

3.

Article 30 1. Military activities shall not take place in the lands or territories of indigenous peoples, unless justified by a relevant public interest or otherwise freely agreed with or requested by the indigenous peoples concerned. States shall undertake effective consultations with the indigenous peoples concerned, through appropriate procedures and in particular through their representative institutions, prior to using their lands or territories for military activities.

2.

Article 32 1. Indigenous peoples have the right to determine and develop priorities and strategies for the development or use of their lands or territories and other resources. States shall consult and cooperate in good faith with the indigenous peoples concerned through their own representative institutions in order to obtain their free and informed consent prior to the approval of any project affecting their lands or territories and other resources, particularly in connection with the development, utilization or exploitation of mineral, water or other resources. States shall provide effective mechanisms for just and fair redress for any such activities, and appropriate measures shall be taken to mitigate adverse environmental, economic, social, cultural or spiritual impact.

2.

3.

Article 37 1. Indigenous peoples have the right to the recognition, observance and enforcement of treaties, agreements and other constructive arrangements concluded with States or their successors and to have States honour and respect such treaties, agreements and other constructive arrangements.

2.

Nothing in this Declaration may be interpreted as diminishing or eliminating the rights of indigenous peoples contained in treaties, agreements and other constructive arrangements.

Article 38 States in consultation and cooperation with indigenous peoples, shall take the appropriate measures, including legislative measures, to achieve the ends of this Declaration.

Assuming that the UN DRIP, like the Universal Declaration on Human Rights, must now be regarded as embodying customary international law a question which the Court need not definitively resolve here the obligations enumerated therein do not strictly require the Republic to grant the Bangsamoro people, through the instrumentality of the BJE, the particular rights and powers provided for in the MOA-AD. Even the more specific provisions of the UN DRIP are general in scope, allowing for flexibility in its application by the different States.

There is, for instance, no requirement in the UN DRIP that States now guarantee indigenous peoples their own police and internal security force. Indeed, Article 8 presupposes that it is the State which will provide protection for indigenous peoples against acts like the forced dispossession of their lands a function that is normally performed by police officers. If the protection of a right so essential to indigenous peoples identity is acknowledged to be the responsibility of the State, then surely the protection of rights less significant to them as such peoples would also be the duty of States. Nor is there in the UN DRIP an acknowledgement of the right of indigenous peoples to the aerial domain and atmospheric space. What it upholds, in Article 26 thereof, is the right of indigenous peoples to the lands, territories and resources which they have traditionally owned, occupied or otherwise used or acquired.

Moreover, the UN DRIP, while upholding the right of indigenous peoples to autonomy, does not obligate States to grant indigenous peoples the near-independent status of an associated state. All the rights recognized in that document are qualified in Article 46 as follows:

1.

Nothing in this Declaration may be interpreted as implying for any State, people, group or person any right to engage in any activity or to perform any act contrary to the Charter of the United Nations or construed as authorizing or encouraging any action which would dismember or impair, totally or in part, the territorial integrity or political unity of sovereign and independent States.

Even if the UN DRIP were considered as part of the law of the land pursuant to Article II, Section 2 of the Constitution, it would not suffice to uphold the validity of the MOA-AD so as to render its compliance with other laws unnecessary.

It is, therefore, clear that the MOA-AD contains numerous provisions that cannot be reconciled with the Constitution and the laws as presently worded. Respondents proffer, however, that the signing of the MOA-AD alone would not have entailed any violation of law or grave abuse of discretion on their part, precisely because it stipulates that the provisions thereof inconsistent with the laws shall not take effect until these laws are amended. They cite paragraph 7 of the MOA-AD strand on GOVERNANCE quoted earlier, but which is reproduced below for convenience:

7. The Parties agree that the mechanisms and modalities for the actual implementation of this MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps to enable it to occur effectively. Any provisions of the MOA-AD requiring amendments to the existing legal framework shall come into force upon signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework with due regard to non derogation of prior agreements and within the stipulated timeframe to be contained in the Comprehensive Compact.

Indeed, the foregoing stipulation keeps many controversial provisions of the MOA-AD from coming into force until the necessary changes to the legal framework are effected. While the word Constitution is not mentioned in the provision now under consideration or anywhere else in the MOA-AD, the term legal framework is certainly broad enough to include the Constitution.

Notwithstanding the suspensive clause, however, respondents, by their mere act of incorporating in the MOA-AD the provisions thereof regarding the associative relationship between the BJE and the Central Government, have already violated the Memorandum of Instructions From The President dated March 1, 2001, which states that the negotiations shall be conducted in accordance with x x x the principles of the sovereignty and territorial integrity of the Republic of the Philippines. (Emphasis supplied) Establishing an associative relationship between the BJE and the Central Government is, for the reasons already discussed, a preparation for independence, or worse, an implicit acknowledgment of an independent status already prevailing.

Even apart from the above-mentioned Memorandum, however, the MOA-AD is defective because the suspensive clause is invalid, as discussed below.

The authority of the GRP Peace Negotiating Panel to negotiate with the MILF is founded on E.O. No. 3, Section 5(c), which states that there shall be established Government Peace Negotiating Panels for negotiations with different rebel groups to be appointed by the President as her official emissaries to conduct negotiations, dialogues, and face-to-face discussions with rebel groups. These negotiating panels are to report to the President, through the PAPP on the conduct and progress of the negotiations.

It bears noting that the GRP Peace Panel, in exploring lasting solutions to the Moro Problem through its negotiations with the MILF, was not restricted by E.O. No. 3 only to those options available under the laws as they presently stand. One of the components of a comprehensive peace process, which E.O. No. 3 collectively refers to as the Paths to Peace, is the pursuit of social, economic, and political reforms which may require new legislation or even constitutional amendments. Sec. 4(a) of E.O. No. 3, which reiterates Section 3(a), of E.O. No. 125,[167] states:

SECTION 4. The Six Paths to Peace. The components of the comprehensive peace process comprise the processes known as the Paths to Peace. These component processes are interrelated and not mutually exclusive, and must therefore be pursued simultaneously in a coordinated and integrated fashion. They shall include, but may not be limited to, the following: a. PURSUIT OF SOCIAL, ECONOMIC AND POLITICAL REFORMS. This component involves the vigorous implementation of various policies, reforms, programs and projects aimed at addressing the root causes of internal armed conflicts and social unrest. This may require administrative action, new legislation or even constitutional amendments. x x x x (Emphasis supplied)

The MOA-AD, therefore, may reasonably be perceived as an attempt of respondents to address, pursuant to this provision of E.O. No. 3, the root causes of the armed conflict in Mindanao. The E.O. authorized them to think outside the box, so to speak. Hence, they negotiated and were set on signing the MOA-AD that included various social, economic, and political reforms which cannot, however, all be accommodated within the present legal framework, and which thus would require new legislation and constitutional amendments.

The inquiry on the legality of the suspensive clause, however, cannot stop here, because it must be asked

whether the President herself may exercise the power delegated to the GRP Peace Panel under E.O. No. 3, Sec. 4(a). The President cannot delegate a power that she herself does not possess. May the President, in the course of peace negotiations, agree to pursue reforms that would require new legislation and constitutional amendments, or should the reforms be restricted only to those solutions which the present laws allow? The answer to this question requires a discussion of the extent of the Presidents power to conduct peace negotiations.

That the authority of the President to conduct peace negotiations with rebel groups is not explicitly mentioned in the Constitution does not mean that she has no such authority. In Sanlakas v. Executive Secretary,[168] in issue was the authority of the President to declare a state of rebellion an authority which is not expressly provided for in the Constitution. The Court held thus:
In her ponencia in Marcos v. Manglapus, Justice Cortes put her thesis into jurisprudence. There, the Court, by a slim 8-7 margin, upheld the President's power to forbid the return of her exiled predecessor. The rationale for the majority's ruling rested on the President's . . . unstated residual powers which are implied from the grant of executive power and which are necessary for her to comply with her duties under the Constitution. The powers of the President are not limited to what are expressly enumerated in the article on the Executive Department and in scattered provisions of the Constitution. This is so, notwithstanding the avowed intent of the members of the Constitutional Commission of 1986 to limit the powers of the President as a reaction to the abuses under the regime of Mr. Marcos, for the result was a limitation of specific powers of the President, particularly those relating to the commander-in-chief clause, but not a diminution of the general grant of executive power.

Thus, the President's authority to declare a state of rebellion springs in the main from her powers as chief executive and, at the same time, draws strength from her Commander-in-Chief powers. x x x (Emphasis and underscoring supplied)

Similarly, the Presidents power to conduct peace negotiations is implicitly included in her powers as Chief Executive and Commander-in-Chief. As Chief Executive, the President has the general responsibility to promote public peace, and as Commander-in-Chief, she has the more specific duty to prevent and suppress rebellion and lawless violence.[169]

As the experience of nations which have similarly gone through internal armed conflict will show, however, peace is rarely attained by simply pursuing a military solution. Oftentimes, changes as far-reaching as a fundamental reconfiguration of the nations constitutional structure is required. The observations of Dr. Kirsti Samuels are enlightening, to wit:

x x x [T]he fact remains that a successful political and governance transition must form the core of any post-conflict peace-building mission. As we have observed in Liberia and Haiti over the last ten years, conflict cessation without modification of the political environment, even where state-building is undertaken through technical electoral assistance and institution- or capacity-building, is unlikely to succeed. On average, more than 50 percent of states emerging from conflict return to conflict. Moreover, a substantial proportion of transitions have resulted in weak or limited democracies. The design of a constitution and its constitution-making process can play an important role in the political and governance transition. Constitution-making after conflict is an opportunity to create a common vision of the future of a state and a road map on how to get there. The constitution can be partly a peace agreement and partly a framework setting up the rules by which the new democracy will operate.[170]

In the same vein, Professor Christine Bell, in her article on the nature and legal status of peace agreements, observed that the typical way that peace agreements establish or confirm mechanisms for demilitarization and demobilization is by linking them to new constitutional structures addressing governance, elections, and legal and

human rights institutions.[171]

In the Philippine experience, the link between peace agreements and constitutionmaking has been recognized by no less than the framers of the Constitution. Behind the provisions of the Constitution on autonomous regions[172] is the framers intention to implement a particular peace agreement, namely, the Tripoli Agreement of 1976 between the GRP and the MNLF, signed by then Undersecretary of National Defense Carmelo Z. Barbero and then MNLF Chairman Nur Misuari.

MR. ROMULO. There are other speakers; so, although I have some more questions, I will reserve my right to ask them if they are not covered by the other speakers. I have only two questions. I heard one of the Commissioners say that local autonomy already exists in the Muslim region; it is working very well; it has, in fact, diminished a great deal of the problems. So, my question is: since that already exists, why do we have to go into something new? MR. OPLE. May I answer that on behalf of Chairman Nolledo. Commissioner Yusup Abubakar is right that certain definite steps have been taken to implement the provisions of the Tripoli Agreement with respect to an autonomous region in Mindanao. This is a good first step, but there is no question that this is merely a partial response to the Tripoli Agreement itself and to the fuller standard of regional autonomy contemplated in that agreement, and now by state policy.[173] (Emphasis supplied)

The constitutional provisions on autonomy and the statutes enacted pursuant to them have, to the credit of their drafters, been partly successful. Nonetheless, the Filipino people are still faced with the reality of an on-going conflict between the Government and the MILF. If the President is to be expected to find means for bringing this conflict to an end and to achieve lasting peace in Mindanao, then she must be given the leeway to explore, in the course of peace negotiations, solutions that may require changes to the Constitution for their implementation. Being uniquely vested with the power to conduct peace negotiations with rebel groups, the President is in a singular

position to know the precise nature of their grievances which, if resolved, may bring an end to hostilities.

The President may not, of course, unilaterally implement the solutions that she considers viable, but she may not be prevented from submitting them as recommendations to Congress, which could then, if it is minded, act upon them pursuant to the legal procedures for constitutional amendment and revision. In particular, Congress would have the option, pursuant to Article XVII, Sections 1 and 3 of the Constitution, to propose the recommended amendments or revision to the people, call a constitutional convention, or submit to the electorate the question of calling such a convention.

While the President does not possess constituent powers as those powers may be exercised only by Congress, a Constitutional Convention, or the people through initiative and referendum she may submit proposals for constitutional change to Congress in a manner that does not involve the arrogation of constituent powers.

In Sanidad v. COMELEC,[174] in issue was the legality of then President Marcos act of directly submitting proposals for constitutional amendments to a referendum, bypassing the interim National Assembly which was the body vested by the 1973 Constitution with the power to propose such amendments. President Marcos, it will be recalled, never convened the interim National Assembly. The majority upheld the Presidents act, holding that the urges of absolute necessity compelled the President as the agent of the people to act as he did, there being no interim National Assembly to propose constitutional amendments. Against this ruling, Justices Teehankee and Muoz Palma vigorously dissented. The Courts concern at present, however, is not with regard to the point on which it was then divided in that controversial case, but on that which

was not disputed by either side.

Justice Teehankees dissent,[175] in particular, bears noting. While he disagreed that the President may directly submit proposed constitutional amendments to a referendum, implicit in his opinion is a recognition that he would have upheld the Presidents action along with the majority had the President convened the interim National Assembly and coursed his proposals through it. opined: Thus Justice Teehankee

Since the Constitution provides for the organization of the essential departments of government, defines and delimits the powers of each and prescribes the manner of the exercise of such powers, and the constituent power has not been granted to but has been withheld from the President or Prime Minister, it follows that the Presidents questioned decrees proposing and submitting constitutional amendments directly to the people (without the intervention of the interim National Assembly in whom the power is expressly vested) are devoid of constitutional and legal basis.[176] (Emphasis supplied)

From the foregoing discussion, the principle may be inferred that the President in the course of conducting peace negotiations may validly consider implementing even those policies that require changes to the Constitution, but she may not unilaterally implement them without the intervention of Congress, or act in any way as if the assent of that body were assumed as a certainty.

Since, under the present Constitution, the people also have the power to directly propose amendments through initiative and referendum, the President may also submit her recommendations to the people, not as a formal proposal to be voted on in a plebiscite similar to what President Marcos did in Sanidad, but for their independent consideration of whether these recommendations merit being formally proposed through initiative.

These recommendations, however, may amount to nothing more than the Presidents suggestions to the people, for any further involvement in the process of initiative by the Chief Executive may vitiate its character as a genuine peoples initiative. The only initiative recognized by the Constitution is that which truly proceeds from the people. As the Court stated in Lambino v. COMELEC:[177]

The Lambino Group claims that their initiative is the people's voice. However, the Lambino Group unabashedly states in ULAP Resolution No. 2006-02, in the verification of their petition with the COMELEC, that ULAP maintains its unqualified support to the agenda of Her Excellency President Gloria Macapagal-Arroyo for constitutional reforms. The Lambino Group thus admits that their people's initiative is an unqualified support to the agenda of the incumbent President to change the Constitution. This forewarns the Court to be wary of incantations of people's voice or sovereign will in the present initiative.

It will be observed that the President has authority, as stated in her oath of office, [178] only to preserve and defend the Constitution. Such presidential power does not, however, extend to allowing her to change the Constitution, but simply to recommend proposed amendments or revision. As long as she limits herself to recommending these changes and submits to the proper procedure for constitutional amendments and revision, her mere recommendation need not be construed as an unconstitutional act.

The foregoing discussion focused on the Presidents authority to propose constitutional amendments, since her authority to propose new legislation is not in controversy. It has been an accepted practice for Presidents in this jurisdiction to propose new legislation. One of the more prominent instances the practice is usually done is in the yearly State of the Nation Address of the President to Congress. Moreover, the annual general appropriations bill has always been based on the budget prepared by the President, which for all intents and purposes is a proposal for new

legislation coming from the President.[179]

The suspensive clause in the MOA-AD viewed in light of the above-discussed standards

Given the limited nature of the Presidents authority to propose constitutional amendments, she cannot guarantee to any third party that the required amendments will eventually be put in place, nor even be submitted to a plebiscite. The most she could do is submit these proposals as recommendations either to Congress or the people, in whom constituent powers are vested.

Paragraph 7 on Governance of the MOA-AD states, however, that all provisions thereof which cannot be reconciled with the present Constitution and laws shall come into force upon signing of a Comprehensive Compact and upon effecting the necessary changes to the legal framework. This stipulation does not bear the marks of a suspensive condition defined in civil law as a future and uncertain event but of a term. It is not a question of whether the necessary changes to the legal framework will be effected, but when. That there is no uncertainty being contemplated is plain from what follows, for the paragraph goes on to state that the contemplated changes shall be with due regard to non derogation of prior agreements and within the stipulated timeframe to be contained in the Comprehensive Compact.

Pursuant to this stipulation, therefore, it is mandatory for the GRP to effect the changes to the legal framework contemplated in the MOA-AD which changes would include constitutional amendments, as discussed earlier. It bears noting that,

By the time these changes are put in place, the MOA-AD itself would be counted among the prior agreements from which there could be no derogation. What remains for discussion in the Comprehensive Compact would merely be the implementing details for these consensus points and, notably, the deadline for effecting the contemplated changes to the legal framework.

Plainly, stipulation-paragraph 7 on GOVERNANCE is inconsistent with the limits of the Presidents authority to propose constitutional amendments, it being a virtual guarantee that the Constitution and the laws of the Republic of the Philippines will certainly be adjusted to conform to all the consensus points found in the MOAAD. Hence, it must be struck down as unconstitutional.

A comparison between the suspensive clause of the MOA-AD with a similar provision appearing in the 1996 final peace agreement between the MNLF and the GRP is most instructive.

As a backdrop, the parties to the 1996 Agreement stipulated that it would be implemented in two phases. Phase I covered a three-year transitional period involving the putting up of new administrative structures through Executive Order, such as the Special Zone of Peace and Development (SZOPAD) and the Southern Philippines Council for Peace and Development (SPCPD), while Phase II covered the establishment of the new regional autonomous government through amendment or repeal of R.A. No. 6734, which was then the Organic Act of the ARMM.

The stipulations on Phase II consisted of specific agreements on the structure of the expanded autonomous region envisioned by the parties. To that extent, they are

similar to the provisions of the MOA-AD. There is, however, a crucial difference between the two agreements. While the MOA-AD virtually guarantees that the necessary changes to the legal framework will be put in place, the GRP-MNLF final peace agreement states thus: Accordingly, these provisions [on Phase II] shall be recommended by the GRP to Congress for incorporation in the amendatory or repealing law.

Concerns have been raised that the MOA-AD would have given rise to a binding international law obligation on the part of the Philippines to change its Constitution in conformity thereto, on the ground that it may be considered either as a binding agreement under international law, or a unilateral declaration of the Philippine government to the international community that it would grant to the Bangsamoro people all the concessions therein stated. Neither ground finds sufficient support in international law, however.

The MOA-AD, as earlier mentioned in the overview thereof, would have included foreign dignitaries as signatories. In addition, representatives of other nations were invited to witness its signing in Kuala Lumpur. These circumstances readily lead one to surmise that the MOA-AD would have had the status of a binding international agreement had it been signed. An examination of the prevailing principles in international law, however, leads to the contrary conclusion.

The Decision on CHALLENGE TO JURISDICTION: LOM ACCORD AMNESTY[180] (the Lom Accord case) of the Special Court of Sierra Leone is enlightening. The Lom Accord was a peace agreement signed on July 7, 1999 between the Government of Sierra Leone and the Revolutionary United Front (RUF), a rebel group with which the Sierra Leone Government had been in armed conflict for around

eight years at the time of signing.

There were non-contracting signatories to the

agreement, among which were the Government of the Togolese Republic, the Economic Community of West African States, and the UN.

On January 16, 2002, after a successful negotiation between the UN SecretaryGeneral and the Sierra Leone Government, another agreement was entered into by the UN and that Government whereby the Special Court of Sierra Leone was established. The sole purpose of the Special Court, an international court, was to try persons who bore the greatest responsibility for serious violations of international humanitarian law and Sierra Leonean law committed in the territory of Sierra Leone since November 30, 1996.

Among the stipulations of the Lom Accord was a provision for the full pardon of the members of the RUF with respect to anything done by them in pursuit of their objectives as members of that organization since the conflict began.

In the Lom Accord case, the Defence argued that the Accord created an internationally binding obligation not to prosecute the beneficiaries of the amnesty provided therein, citing, among other things, the participation of foreign dignitaries and international organizations in the finalization of that agreement. The Special Court, however, rejected this argument, ruling that the Lome Accord is not a treaty and that it can only create binding obligations and rights between the parties in municipal law, not in international law. Hence, the Special Court held, it is ineffective in depriving an international court like it of jurisdiction.

37. In regard to the nature of a negotiated settlement of an internal armed conflict it is easy to assume and to argue with some degree of plausibility, as Defence counsel for the defendants seem to have done, that the mere fact that in

addition to the parties to the conflict, the document formalizing the settlement is signed by foreign heads of state or their representatives and representatives of international organizations, means the agreement of the parties is internationalized so as to create obligations in international law. xxxx 40. Almost every conflict resolution will involve the parties to the conflict and the mediator or facilitator of the settlement, or persons or bodies under whose auspices the settlement took place but who are not at all parties to the conflict, are not contracting parties and who do not claim any obligation from the contracting parties or incur any obligation from the settlement. In this case, the parties to the conflict are the lawful authority of the State and the RUF which has no status of statehood and is to all intents and purposes a faction within the state. The non-contracting signatories of the Lom Agreement were moral guarantors of the principle that, in the terms of Article XXXIV of the Agreement, this peace agreement is implemented with integrity and in good faith by both parties. The moral guarantors assumed no legal obligation. It is recalled that the UN by its representative appended, presumably for avoidance of doubt, an understanding of the extent of the agreement to be implemented as not including certain international crimes. An international agreement in the nature of a treaty must create rights and obligations regulated by international law so that a breach of its terms will be a breach determined under international law which will also provide principle means of enforcement. The Lom Agreement created neither rights nor obligations capable of being regulated by international law. An agreement such as the Lom Agreement which brings to an end an internal armed conflict no doubt creates a factual situation of restoration of peace that the international community acting through the Security Council may take note of. That, however, will not convert it to an international agreement which creates an obligation enforceable in international, as distinguished from municipal, law. A breach of the terms of such a peace agreement resulting in resumption of internal armed conflict or creating a threat to peace in the determination of the Security Council may indicate a reversal of the factual situation of peace to be visited with possible legal consequences arising from the new situation of conflict created. Such consequences such as action by the Security Council pursuant to Chapter VII arise from the situation and not from the agreement, nor from the obligation imposed by it. Such action cannot be regarded as a remedy for the breach. A peace agreement which settles an internal armed conflict cannot be ascribed the same status as one which settles an international armed conflict which, essentially, must be between two or more warring States. The Lom Agreement cannot be characterised as an international instrument. x x x (Emphasis, italics and underscoring supplied)

41.

42.

Similarly, that the MOA-AD would have been signed by representatives of States and international organizations not parties to the Agreement would not have sufficed to vest in it a binding character under international law.

In another vein, concern has been raised that the MOA-AD would amount to a unilateral declaration of the Philippine State, binding under international law, that it would comply with all the stipulations stated therein, with the result that it would have to amend its Constitution accordingly regardless of the true will of the people. Cited as authority for this view is Australia v. France,[181] also known as the Nuclear Tests Case, decided by the International Court of Justice (ICJ).

In the Nuclear Tests Case, Australia challenged before the ICJ the legality of Frances nuclear tests in the South Pacific. France refused to appear in the case, but public statements from its President, and similar statements from other French officials including its Minister of Defence, that its 1974 series of atmospheric tests would be its last, persuaded the ICJ to dismiss the case.[182] Those statements, the ICJ held, amounted to a legal undertaking addressed to the international community, which required no acceptance from other States for it to become effective.

Essential to the ICJ ruling is its finding that the French government intended to be bound to the international community in issuing its public statements, viz:

43.

It is well recognized that declarations made by way of unilateral acts, concerning legal or factual situations, may have the effect of creating legal obligations. Declarations of this kind may be, and often are, very specific. When it is the intention of the State making the declaration that it should become bound according to its terms, that intention confers on the declaration the character of a legal undertaking, the State being thenceforth legally required to follow a course of conduct consistent with the declaration. An undertaking of this kind, if given publicly, and with an intent to be bound, even though not made within the context of international negotiations, is binding. In these circumstances, nothing in

the nature of a quid pro quo nor any subsequent acceptance of the declaration, nor even any reply or reaction from other States, is required for the declaration to take effect, since such a requirement would be inconsistent with the strictly unilateral nature of the juridical act by which the pronouncement by the State was made. 44. Of course, not all unilateral acts imply obligation; but a State may choose to take up a certain position in relation to a particular matter with the intention of being boundthe intention is to be ascertained by interpretation of the act. When States make statements by which their freedom of action is to be limited, a restrictive interpretation is called for. xxxx 51. In announcing that the 1974 series of atmospheric tests would be the last, the French Government conveyed to the world at large, including the Applicant, its intention effectively to terminate these tests. It was bound to assume that other States might take note of these statements and rely on their being effective. The validity of these statements and their legal consequences must be considered within the general framework of the security of international intercourse, and the confidence and trust which are so essential in the relations among States. It is from the actual substance of these statements, and from the circumstances attending their making, that the legal implications of the unilateral act must be deduced. The objects of these statements are clear and they were addressed to the international community as a whole, and the Court holds that they constitute an undertaking possessing legal effect. The Court considers *270 that the President of the Republic, in deciding upon the effective cessation of atmospheric tests, gave an undertaking to the international community to which his words were addressed. x x x (Emphasis and underscoring supplied)

As gathered from the above-quoted ruling of the ICJ, public statements of a state representative may be construed as a unilateral declaration only when the following conditions are present: the statements were clearly addressed to the international community, the state intended to be bound to that community by its statements, and that not to give legal effect to those statements would be detrimental to the security of international intercourse. Plainly, unilateral declarations arise only in peculiar circumstances.

The limited applicability of the Nuclear Tests Case ruling was recognized in a later case decided by the ICJ entitled Burkina Faso v. Mali,[183] also known as the Case

Concerning the Frontier Dispute. The public declaration subject of that case was a statement made by the President of Mali, in an interview by a foreign press agency, that Mali would abide by the decision to be issued by a commission of the Organization of African Unity on a frontier dispute then pending between Mali and Burkina Faso. Unlike in the Nuclear Tests Case, the ICJ held that the statement of Malis President was not a unilateral act with legal implications. It clarified that its ruling in the Nuclear Tests case rested on the peculiar circumstances surrounding the French declaration subject thereof, to wit:
40. In order to assess the intentions of the author of a unilateral act, account must be taken of all the factual circumstances in which the act occurred. For example, in the Nuclear Tests cases, the Court took the view that since the applicant States were not the only ones concerned at the possible continuance of atmospheric testing by the French Government, that Government's unilateral declarations had conveyed to the world at large, including the Applicant, its intention effectively to terminate these tests (I.C.J. Reports 1974, p. 269, para. 51; p. 474, para. 53). In the particular circumstances of those cases, the French Government could not express an intention to be bound otherwise than by unilateral declarations. It is difficult to see how it could have accepted the terms of a negotiated solution with each of the applicants without thereby jeopardizing its contention that its conduct was lawful. The circumstances of the present case are radically different. Here, there was nothing to hinder the Parties from manifesting an intention to accept the binding character of the conclusions of the Organization of African Unity Mediation Commission by the normal method: a formal agreement on the basis of reciprocity. Since no agreement of this kind was concluded between the Parties, the Chamber finds that there are no grounds to interpret the declaration made by Mali's head of State on 11 April 1975 as a unilateral act with legal implications in regard to the present case. (Emphasis and underscoring supplied)

Assessing the MOA-AD in light of the above criteria, it would not have amounted to a unilateral declaration on the part of the Philippine State to the international community. The Philippine panel did not draft the same with the clear intention of being bound thereby to the international community as a whole or to any State, but only to the MILF. While there were States and international organizations involved, one way or another, in the negotiation and projected signing of the MOA-AD, they participated

merely as witnesses or, in the case of Malaysia, as facilitator. As held in the Lom Accord case, the mere fact that in addition to the parties to the conflict, the peace settlement is signed by representatives of states and international organizations does not mean that the agreement is internationalized so as to create obligations in international law.

Since the commitments in the MOA-AD were not addressed to States, not to give legal effect to such commitments would not be detrimental to the security of international intercourse to the trust and confidence essential in the relations among States.

In one important respect, the circumstances surrounding the MOA-AD are closer to that of Burkina Faso wherein, as already discussed, the Mali Presidents statement was not held to be a binding unilateral declaration by the ICJ. As in that case, there was also nothing to hinder the Philippine panel, had it really been its intention to be bound to other States, to manifest that intention by formal agreement. Here, that formal agreement would have come about by the inclusion in the MOA-AD of a clear commitment to be legally bound to the international community, not just the MILF, and by an equally clear indication that the signatures of the participating statesrepresentatives would constitute an acceptance of that commitment. Entering into such a formal agreement would not have resulted in a loss of face for the Philippine government before the international community, which was one of the difficulties that prevented the French Government from entering into a formal agreement with other countries. That the Philippine panel did not enter into such a formal agreement suggests that it had no intention to be bound to the international community. On that ground, the MOA-AD may not be considered a unilateral declaration under international law.

The MOA-AD not being a document that can bind the Philippines under international law notwithstanding, respondents almost consummated act of guaranteeing amendments to the legal framework is, by itself, sufficient to constitute grave abuse of discretion. The grave abuse lies not in the fact that they considered, as a solution to the Moro Problem, the creation of a state within a state, but in their brazen willingness to guarantee that Congress and the sovereign Filipino people would give their imprimatur to their solution. Upholding such an act would amount to authorizing a usurpation of the constituent powers vested only in Congress, a Constitutional Convention, or the people themselves through the process of initiative, for the only way that the Executive can ensure the outcome of the amendment process is through an undue influence or interference with that process.

The sovereign people may, if it so desired, go to the extent of giving up a portion of its own territory to the Moros for the sake of peace, for it can change the Constitution in any it wants, so long as the change is not inconsistent with what, in international law, is known as Jus Cogens.[184] Respondents, however, may not preempt it in that decision.

SUMMARY The petitions are ripe for adjudication. The failure of respondents to consult the local government units or communities affected constitutes a departure by respondents from their mandate under E.O. No. 3. Moreover, respondents exceeded their authority by the mere act of guaranteeing amendments to the Constitution. Any alleged violation of the Constitution by any branch of government is a proper matter for judicial review.

As the petitions involve constitutional issues which are of paramount public interest or of transcendental importance, the Court grants the petitioners, petitioners-inintervention and intervening respondents the requisite locus standi in keeping with the liberal stance adopted in David v. Macapagal-Arroyo.

Contrary to the assertion of respondents that the non-signing of the MOA-AD and the eventual dissolution of the GRP Peace Panel mooted the present petitions, the Court finds that the present petitions provide an exception to the moot and academic principle in view of (a) the grave violation of the Constitution involved; (b) the exceptional character of the situation and paramount public interest; (c) the need to formulate controlling principles to guide the bench, the bar, and the public; and (d) the fact that the case is capable of repetition yet evading review.

The MOA-AD is a significant part of a series of agreements necessary to carry out the GRP-MILF Tripoli Agreement on Peace signed by the government and the MILF back in June 2001. Hence, the present MOA-AD can be renegotiated or another one drawn up that could contain similar or significantly dissimilar provisions compared to the original.

The Court, however, finds that the prayers for mandamus have been rendered moot in view of the respondents action in providing the Court and the petitioners with the official copy of the final draft of the MOA-AD and its annexes.

The peoples right to information on matters of public concern under Sec. 7, Article III of the Constitution is in splendid symmetry with the state policy of full public disclosure of all its transactions involving public interest under Sec. 28, Article II of the Constitution. The right to information guarantees the right of the people to demand

information, while Section 28 recognizes the duty of officialdom to give information even if nobody demands. The complete and effective exercise of the right to information necessitates that its complementary provision on public disclosure derive the same self-executory nature, subject only to reasonable safeguards or limitations as may be provided by law.

The contents of the MOA-AD is a matter of paramount public concern involving public interest in the highest order. In declaring that the right to information contemplates steps and negotiations leading to the consummation of the contract, jurisprudence finds no distinction as to the executory nature or commercial character of the agreement.

An essential element of these twin freedoms is to keep a continuing dialogue or process of communication between the government and the people. Corollary to these twin rights is the design for feedback mechanisms. The right to public consultation was envisioned to be a species of these public rights.

At least three pertinent laws animate these constitutional imperatives and justify the exercise of the peoples right to be consulted on relevant matters relating to the peace agenda.

One, E.O. No. 3 itself is replete with mechanics for continuing consultations on both national and local levels and for a principal forum for consensus-building. In fact, it is the duty of the Presidential Adviser on the Peace Process to conduct regular dialogues to seek relevant information, comments, advice, and recommendations from peace partners and concerned sectors of society.

Two, Republic Act No. 7160 or the Local Government Code of 1991 requires all national offices to conduct consultations before any project or program critical to the environment and human ecology including those that may call for the eviction of a particular group of people residing in such locality, is implemented therein. The MOAAD is one peculiar program that unequivocally and unilaterally vests ownership of a vast territory to the Bangsamoro people, which could pervasively and drastically result to the diaspora or displacement of a great number of inhabitants from their total environment.

Three, Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997 provides for clear-cut procedure for the recognition and delineation of ancestral domain, which entails, among other things, the observance of the free and prior informed consent of the Indigenous Cultural Communities/Indigenous Peoples. Notably, the statute does not grant the Executive Department or any government agency the power to delineate and recognize an ancestral domain claim by mere agreement or compromise.

The invocation of the doctrine of executive privilege as a defense to the general right to information or the specific right to consultation is untenable. The various explicit legal provisions fly in the face of executive secrecy. In any event, respondents effectively waived such defense after it unconditionally disclosed the official copies of the final draft of the MOA-AD, for judicial compliance and public scrutiny.

IN SUM, the Presidential Adviser on the Peace Process committed grave abuse of discretion when he failed to carry out the pertinent consultation process, as mandated by E.O. No. 3, Republic Act No. 7160, and Republic Act No. 8371. The furtive process by which the MOA-AD was designed and crafted runs contrary to and in excess of the legal authority, and amounts to a whimsical, capricious, oppressive, arbitrary and despotic

exercise thereof. It illustrates a gross evasion of positive duty and a virtual refusal to perform the duty enjoined.

The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its specific provisions but the very concept underlying them, namely, the associative relationship envisioned between the GRP and the BJE, are unconstitutional, for the concept presupposes that the associated entity is a state and implies that the same is on its way to independence.

While there is a clause in the MOA-AD stating that the provisions thereof inconsistent with the present legal framework will not be effective until that framework is amended, the same does not cure its defect. The inclusion of provisions in the MOAAD establishing an associative relationship between the BJE and the Central Government is, itself, a violation of the Memorandum of Instructions From The President dated March 1, 2001, addressed to the government peace panel. Moreover, as the clause is worded, it virtually guarantees that the necessary amendments to the Constitution and the laws will eventually be put in place. Neither the GRP Peace Panel nor the President herself is authorized to make such a guarantee. Upholding such an act would amount to authorizing a usurpation of the constituent powers vested only in Congress, a Constitutional Convention, or the people themselves through the process of initiative, for the only way that the Executive can ensure the outcome of the amendment process is through an undue influence or interference with that process.

While the MOA-AD would not amount to an international agreement or unilateral declaration binding on the Philippines under international law, respondents act of guaranteeing amendments is, by itself, already a constitutional violation that renders the MOA-AD fatally defective.

WHEREFORE, respondents motion to dismiss is DENIED. The main and intervening petitions are GIVEN DUE COURSE and hereby GRANTED.

The Memorandum of Agreement on the Ancestral Domain Aspect of the GRPMILF Tripoli Agreement on Peace of 2001 is declared CONTRARY TO LAW AND THE CONSTITUTION.

SO ORDERED. BAYAN MUNA, as represented by Rep. SATUR OCAMPO, Rep. CRISPIN BELTRAN, and Rep. LIZA L. MAZA, Petitioner,

- versus -

ALBERTO ROMULO, in his capacity as Executive Secretary, and BLAS F. OPLE, in his capacity as Secretary of Foreign Affairs, Respondents. G.R. No. 159618

Present: CORONA, C.J., CARPIO, CARPIO MORALES, VELASCO, JR., NACHURA, LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO, ABAD, VILLARAMA, JR., PEREZ, MENDOZA, and SERENO, JJ. Promulgated: February 1, 2011 x-----------------------------------------------------------------------------------------x

DECISION VELASCO, JR., J.: The Case

This petition[1] for certiorari, mandamus and prohibition under Rule 65 assails and seeks to nullify the Non-Surrender Agreement concluded by and between the

Republic of the Philippines (RP) and the United States of America (USA).

The Facts

Petitioner Bayan Muna is a duly registered party-list group established to represent the marginalized sectors of society. Respondent Blas F. Ople, now deceased, was the Secretary of Foreign Affairs during the period material to this case. Respondent Alberto Romulo was impleaded in his capacity as then Executive Secretary. [2]

Rome Statute of the International Criminal Court

Having a key determinative bearing on this case is the Rome Statute[3] establishing the International Criminal Court (ICC) with the power to exercise its jurisdiction over persons for the most serious crimes of international concern x x x and shall be complementary to the national criminal jurisdictions.[4] The serious crimes adverted to cover those considered grave under international law, such as genocide, crimes against humanity, war crimes, and crimes of aggression.[5]

On December 28, 2000, the RP, through Charge dAffaires Enrique A. Manalo, signed the Rome Statute which, by its terms, is subject to ratification, acceptance or approval by the signatory states.[6] As of the filing of the instant petition, only 92 out of the 139 signatory countries appear to have completed the ratification, approval and concurrence process. The Philippines is not among the 92.

RP-US Non-Surrender Agreement

On May 9, 2003, then Ambassador Francis J. Ricciardone sent US Embassy Note No. 0470 to the Department of Foreign Affairs (DFA) proposing the terms of the nonsurrender bilateral agreement (Agreement, hereinafter) between the USA and the RP.

Via Exchange of Notes No. BFO-028-03[7] dated May 13, 2003 (E/N BFO-028-03, hereinafter), the RP, represented by then DFA Secretary Ople, agreed with and accepted the US proposals embodied under the US Embassy Note adverted to and put in effect the Agreement with the US government. In esse, the Agreement aims to protect what it refers to and defines as persons of the RP and US from frivolous and harassment suits that might be brought against them in international tribunals.[8] It is reflective of the increasing pace of the strategic security and defense partnership between the two countries. As of May 2, 2003, similar bilateral agreements have been effected by and between the US and 33 other countries.[9]

The Agreement pertinently provides as follows:

1. For purposes of this Agreement, persons are current or former Government officials, employees (including contractors), or military personnel or nationals of one Party. 2. Persons of one Party present in the territory of the other shall not, absent the express consent of the first Party, (a) be surrendered or transferred by any means to any international tribunal for any purpose, unless such tribunal has been established by the UN Security Council, or

(b) be surrendered or transferred by any means to any other entity or third country, or expelled to a third country, for the purpose of surrender to or transfer to any international tribunal, unless such tribunal has been established by the UN Security Council. 3. When the [US] extradites, surrenders, or otherwise transfers a person of the Philippines to a third country, the [US] will not agree to the surrender or transfer of that person by the third country to any international tribunal, unless such tribunal has been established by the UN Security Council, absent the express consent of the Government of the Republic of the Philippines [GRP]. 4. When the [GRP] extradites, surrenders, or otherwise transfers a person of the [USA] to a third country, the [GRP] will not agree to the surrender or transfer of that person by the third country to any international tribunal, unless such tribunal has been established by the UN Security Council, absent the express consent of the Government of the [US]. 5. This Agreement shall remain in force until one year after the date on which one party notifies the other of its intent to terminate the Agreement. The provisions of this Agreement shall continue to apply with respect to any act occurring, or any allegation arising, before the effective date of termination.

In response to a query of then Solicitor General Alfredo L. Benipayo on the status of the non-surrender agreement, Ambassador Ricciardone replied in his letter of October 28, 2003 that the exchange of diplomatic notes constituted a legally binding agreement under international law; and that, under US law, the said agreement did not require the advice and consent of the US Senate.[10]

In this proceeding, petitioner imputes grave abuse of discretion to respondents in concluding and ratifying the Agreement and prays that it be struck down as unconstitutional, or at least declared as without force and effect.

For their part, respondents question petitioners standing to maintain a suit and counter that the Agreement, being in the nature of an executive agreement, does not require Senate concurrence for its efficacy. And for reasons detailed in their comment, respondents assert the constitutionality of the Agreement.

The Issues

I.

WHETHER THE [RP] PRESIDENT AND THE [DFA] SECRETARY x x x GRAVELY ABUSED THEIR DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION FOR CONCLUDING THE RP-US NON SURRENDER AGREEMENT BY MEANS OF [E/N] BFO-028-03 DATED 13 MAY 2003, WHEN THE PHILIPPINE GOVERNMENT HAS ALREADY SIGNED THE ROME STATUTE OF THE [ICC] ALTHOUGH THIS IS PENDING RATIFICATION BY THE PHILIPPINE SENATE. A. Whether by entering into the x x x Agreement Respondents gravely

abused their discretion when they capriciously abandoned, waived and relinquished our only legitimate recourse through the Rome Statute of the [ICC] to prosecute and try persons as defined in the x x x Agreement, x x x or literally any conduit of American interests, who have committed crimes of genocide, crimes against humanity, war crimes and the crime of aggression, thereby abdicating Philippine Sovereignty.
B. Whether after the signing and pending ratification of the Rome Statute of

the [ICC] the [RP] President and the [DFA] Secretary x x x are obliged by the principle of good faith to refrain from doing all acts which would substantially impair the value of the undertaking as signed.
C. Whether the x x x Agreement constitutes an act which defeats the object

and purpose of the Rome Statute of the International Criminal Court and contravenes the obligation of good faith inherent in the signature of the President affixed on the Rome Statute of the International Criminal Court, and if so whether the x x x Agreement is void and unenforceable on this ground.

D. Whether the RP-US Non-Surrender Agreement is void and unenforceable

for grave abuse of discretion amounting to lack or excess of jurisdiction in connection with its execution.
II. WHETHER THE RP-US NON SURRENDER AGREEMENT IS VOID AB INITIO FOR CONTRACTING OBLIGATIONS THAT ARE EITHER IMMORAL OR OTHERWISE AT VARIANCE WITH UNIVERSALLY RECOGNIZED PRINCIPLES OF INTERNATIONAL LAW. III. WHETHER THE x x x AGREEMENT IS VALID, BINDING AND EFFECTIVE WITHOUT THE CONCURRENCE BY AT LEAST TWO-THIRDS (2/3) OF ALL THE MEMBERS OF THE SENATE x x x.

[11]

The foregoing issues may be summarized into two: first, whether or not the Agreement was contracted validly, which resolves itself into the question of whether or not respondents gravely abused their discretion in concluding it; and second, whether or not the Agreement, which has not been submitted to the Senate for concurrence, contravenes and undermines the Rome Statute and other treaties. But because respondents expectedly raised it, we shall first tackle the issue of petitioners legal standing. The Courts Ruling

This petition is bereft of merit.

Procedural Issue: Locus Standi of Petitioner

Petitioner, through its three party-list representatives, contends that the issue of the validity or invalidity of the Agreement carries with it constitutional significance and is of paramount importance that justifies its standing. Cited in this regard is what is usually referred to as the emergency powers cases,[12] in which ordinary citizens and taxpayers were accorded the personality to question the constitutionality of executive issuances.

Locus standi is a right of appearance in a court of justice on a given question.[13] Specifically, it is a partys personal and substantial interest in a case where he has sustained or will sustain direct injury as a result[14] of the act being challenged, and calls for more than just a generalized grievance.[15] The term interest refers to material interest, as distinguished from one that is merely incidental.[16] The rationale for requiring a party who challenges the validity of a law or international agreement to allege such a personal stake in the outcome of the controversy is to assure the concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions.[17]

Locus standi, however, is merely a matter of procedure and it has been recognized that, in some cases, suits are not brought by parties who have been personally injured by the operation of a law or any other government act, but by concerned citizens, taxpayers, or voters who actually sue in the public interest.[18] Consequently, in a catena of cases,[19] this Court has invariably adopted a liberal stance on locus standi.

Going by the petition, petitioners representatives pursue the instant suit primarily as concerned citizens raising issues of transcendental importance, both for the Republic and the citizenry as a whole.

When suing as a citizen to question the validity of a law or other government action, a petitioner needs to meet certain specific requirements before he can be clothed with standing. Francisco, Jr. v. Nagmamalasakit na mga Manananggol ng mga Manggagawang Pilipino, Inc.[20] expounded on this requirement, thus:

In a long line of cases, however, concerned citizens, taxpayers and legislators when specific requirements have been met have been given standing by this Court. When suing as a citizen, the interest of the petitioner assailing the constitutionality of a statute must be direct and personal. He must be able to show, not only that the law or any government act is invalid, but also that he sustained or is in imminent danger of sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby in some indefinite way. It must appear that the person complaining 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 or act complained of. In fine, when the proceeding involves the assertion of a public right, the mere fact that he is a citizen satisfies the requirement of personal interest.[21]

In the case at bar, petitioners representatives have complied with the qualifying conditions or specific requirements exacted under the locus standi rule. As citizens, their interest in the subject matter of the petition is direct and personal. At the very least, their assertions questioning the Agreement are made of a public right, i.e., to ascertain that the Agreement did not go against established national policies, practices, and obligations bearing on the States obligation to the community of nations.

At any event, the primordial importance to Filipino citizens in general of the issue at hand impels the Court to brush aside the procedural barrier posed by the traditional requirement of locus standi, as we have done in a long line of earlier cases, notably in the old but oft-cited emergency powers cases[22] and Kilosbayan v. Guingona, Jr.[23] In cases of transcendental importance, we wrote again in Bayan v. Zamora,[24] The Court may relax the standing requirements and allow a suit to prosper even where there is no direct injury to the party claiming the right of judicial review.

Moreover, bearing in mind what the Court said in Taada v. Angara, that it will not shirk, digress from or abandon its sacred duty and authority to uphold the Constitution in matters that involve grave abuse of discretion brought before it in appropriate cases, committed by any officer, agency, instrumentality or department of the government,[25] we cannot but resolve head on the issues raised before us. Indeed, where an action of any branch of government is seriously alleged to have infringed the Constitution or is done with grave abuse of discretion, it becomes not only the right but in fact the duty of the judiciary to settle it. As in this petition, issues are precisely raised putting to the fore the propriety of the Agreement pending the ratification of the Rome Statute.

Validity of the RP-US Non-Surrender Agreement

Petitioners initial challenge against the Agreement relates to form, its threshold posture being that E/N BFO-028-03 cannot be a valid medium for concluding the Agreement.

Petitioners contentionperhaps taken unaware of certain well-recognized international doctrines, practices, and jargonsis untenable. One of these is the doctrine of incorporation, as expressed in Section 2, Article II of the Constitution, wherein the Philippines adopts the generally accepted principles of international law and international jurisprudence as part of the law of the land and adheres to the policy of peace, cooperation, and amity with all nations.[26] An exchange of notes falls into the category of inter-governmental agreements,[27] which is an internationally accepted form of international agreement. The United Nations Treaty Collections (Treaty Reference Guide) defines the term as follows:

An exchange of notes is a record of a routine agreement, that has many similarities with the private law contract. The agreement consists of the exchange of two documents, each of the parties being in the possession of the one signed by the representative of the other. Under the usual procedure, the accepting State repeats the text of the offering State to record its assent. The signatories of the letters may be government Ministers, diplomats or departmental heads. The technique of exchange of notes is frequently resorted to, either because of its speedy procedure, or, sometimes, to avoid the process of legislative approval. [28]

In another perspective, the terms exchange of notes and executive agreements have been used interchangeably, exchange of notes being considered a form of executive agreement that becomes binding through executive action.[29] On the other hand, executive agreements concluded by the President sometimes take the form of exchange of notes and at other times that of more formal documents denominated agreements or protocols.[30] As former US High Commissioner to the Philippines Francis B. Sayre observed in his work, The Constitutionality of Trade Agreement Acts:
The point where ordinary correspondence between this and other governments ends and agreements whether denominated executive agreements or exchange of notes or

otherwise begin, may sometimes be difficult of ready ascertainment.[31] x x x

It is fairly clear from the foregoing disquisition that E/N BFO-028-03be it viewed as the Non-Surrender Agreement itself, or as an integral instrument of acceptance thereof or as consent to be boundis a recognized mode of concluding a legally binding international written contract among nations.

Senate Concurrence Not Required

Article 2 of the Vienna Convention on the Law of Treaties defines a treaty as an international agreement concluded between states in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation.[32] International agreements may be in the form of (1) treaties that require legislative concurrence after executive ratification; or (2) executive agreements that are similar to treaties, except that they do not require legislative concurrence and are usually less formal and deal with a narrower range of subject matters than treaties.[33]

Under international law, there is no difference between treaties and executive agreements in terms of their binding effects on the contracting states concerned,[34] as long as the negotiating functionaries have remained within their powers.[35] Neither, on the domestic sphere, can one be held valid if it violates the Constitution. [36] Authorities are, however, agreed that one is distinct from another for accepted reasons apart from the concurrence-requirement aspect.[37] As has been observed by US constitutional scholars, a treaty has greater dignity than an executive agreement, because its constitutional efficacy is beyond doubt, a treaty having behind it the

authority of the President, the Senate, and the people;[38] a ratified treaty, unlike an executive agreement, takes precedence over any prior statutory enactment.[39]

Petitioner parlays the notion that the Agreement is of dubious validity, partaking as it does of the nature of a treaty; hence, it must be duly concurred in by the Senate. Petitioner takes a cue from Commissioner of Customs v. Eastern Sea Trading, in which the Court reproduced the following observations made by US legal scholars: [I]nternational agreements involving political issues or changes of national policy and those involving international arrangements of a permanent character usually take the form of treaties [while] those embodying adjustments of detail carrying out well established national policies and traditions and those involving arrangements of a more or less temporary nature take the form of executive agreements. [40]

Pressing its point, petitioner submits that the subject of the Agreement does not fall under any of the subject-categories that are enumerated in the Eastern Sea Trading case, and that may be covered by an executive agreement, such as commercial/consular relations, most-favored nation rights, patent rights, trademark and copyright protection, postal and navigation arrangements and settlement of claims.

In addition, petitioner foists the applicability to the instant case of Adolfo v. CFI of Zambales and Merchant,[41] holding that an executive agreement through an exchange of notes cannot be used to amend a treaty.

We are not persuaded.

The categorization of subject matters that may be covered by international agreements mentioned in Eastern Sea Trading is not cast in stone. There are no hard and fast rules on the propriety of entering, on a given subject, into a treaty or an executive agreement as an instrument of international relations. The primary consideration in the choice of the form of agreement is the parties intent and desire to craft an international agreement in the form they so wish to further their respective interests. Verily, the matter of form takes a back seat when it comes to effectiveness and binding effect of the enforcement of a treaty or an executive agreement, as the parties in either international agreement each labor under the pacta sunt servanda[42] principle.

As may be noted, almost half a century has elapsed since the Court rendered its decision in Eastern Sea Trading. Since then, the conduct of foreign affairs has become more complex and the domain of international law wider, as to include such subjects as human rights, the environment, and the sea. In fact, in the US alone, the executive agreements executed by its President from 1980 to 2000 covered subjects such as defense, trade, scientific cooperation, aviation, atomic energy, environmental cooperation, peace corps, arms limitation, and nuclear safety, among others.[43] Surely, the enumeration in Eastern Sea Trading cannot circumscribe the option of each state on the matter of which the international agreement format would be convenient to serve its best interest. As Francis Sayre said in his work referred to earlier:
x x x It would be useless to undertake to discuss here the large variety of executive agreements as such concluded from time to time. Hundreds of executive agreements, other than those entered into under the trade-agreement act, have been negotiated with foreign

governments. x x x They cover such subjects as the inspection of vessels, navigation dues, income tax on shipping profits, the admission of civil air craft, custom matters and commercial relations generally, international claims, postal matters, the registration of trademarks and copyrights, etc. x x x

And lest it be overlooked, one type of executive agreement is a treatyauthorized[44] or a treaty-implementing executive agreement,[45] which necessarily would cover the same matters subject of the underlying treaty.

But over and above the foregoing considerations is the fact thatsave for the situation and matters contemplated in Sec. 25, Art. XVIII of the Constitution[46]when a treaty is required, the Constitution does not classify any subject, like that involving political issues, to be in the form of, and ratified as, a treaty. What the Constitution merely prescribes is that treaties need the concurrence of the Senate by a vote defined therein to complete the ratification process.

Petitioners reliance on Adolfo[47] is misplaced, said case being inapplicable owing to different factual milieus. There, the Court held that an executive agreement cannot be used to amend a duly ratified and existing treaty, i.e., the Bases Treaty. Indeed, an executive agreement that does not require the concurrence of the Senate for its ratification may not be used to amend a treaty that, under the Constitution, is the product of the ratifying acts of the Executive and the Senate. The presence of a treaty, purportedly being subject to amendment by an executive agreement, does not obtain under the premises.

Considering the above discussion, the Court need not belabor at length the third main issue raised, referring to the validity and effectivity of the Agreement without the concurrence by at least two-thirds of all the members of the Senate. The Court has, in Eastern Sea Trading,[48] as reiterated in Bayan,[49] given recognition to the obligatory effect of executive agreements without the concurrence of the Senate:

x x x [T]he right of the Executive to enter into binding agreements without the necessity of subsequent Congressional approval has been confirmed by long usage. From the earliest days of our history, we have entered executive agreements covering such subjects as commercial and consular relations, most favored-nation rights, patent rights, trademark and copyright protection, postal and navigation arrangements and the settlement of claims. The validity of these has never been seriously questioned by our courts.

The Agreement Not in Contravention of the Rome Statute

It is the petitioners next contention that the Agreement undermines the establishment of the ICC and is null and void insofar as it unduly restricts the ICCs jurisdiction and infringes upon the effectivity of the Rome Statute. Petitioner posits that the Agreement was constituted solely for the purpose of providing individuals or groups of individuals with immunity from the jurisdiction of the ICC; and such grant of immunity through non-surrender agreements allegedly does not legitimately fall within the scope of Art. 98 of the Rome Statute. It concludes that state parties with nonsurrender agreements are prevented from meeting their obligations under the Rome Statute, thereby constituting a breach of Arts. 27,[50] 86,[51] 89[52] and 90[53] thereof.

Petitioner stresses that the overall object and purpose of the Rome Statute is to ensure that those responsible for the worst possible crimes are brought to justice in all cases, primarily by states, but as a last resort, by the ICC; thus, any agreementlike the non-surrender agreementthat precludes the ICC from exercising its complementary function of acting when a state is unable to or unwilling to do so, defeats the object and purpose of the Rome Statute.

Petitioner would add that the President and the DFA Secretary, as representatives of a signatory of the Rome Statute, are obliged by the imperatives of good faith to refrain from performing acts that substantially devalue the purpose and object of the Statute, as signed. Adding a nullifying ingredient to the Agreement, according to petitioner, is the fact that it has an immoral purpose or is otherwise at variance with a priorly executed treaty.

Contrary to petitioners pretense, the Agreement does not contravene or undermine, nor does it differ from, the Rome Statute. Far from going against each other, one complements the other. As a matter of fact, the principle of complementarity underpins the creation of the ICC. As aptly pointed out by respondents and admitted by petitioners, the jurisdiction of the ICC is to be complementary to national criminal jurisdictions [of the signatory states].[54] Art. 1 of the Rome Statute pertinently provides:

Article 1 The Court An International Crimininal Court (the Court) is hereby established. It x x x shall have the power to exercise its jurisdiction over persons for the most serious crimes of international concern, as referred to in this Statute, and shall be complementary to national criminal jurisdictions. The jurisdiction and functioning of the Court shall be governed by the provisions of this Statute. (Emphasis ours.)

Significantly, the sixth preambular paragraph of the Rome Statute declares that it is the duty of every State to exercise its criminal jurisdiction over those responsible for international crimes. This provision indicates that primary jurisdiction over the socalled international crimes rests, at the first instance, with the state where the crime was committed; secondarily, with the ICC in appropriate situations contemplated under Art. 17, par. 1[55] of the Rome Statute.

Of particular note is the application of the principle of ne bis in idem[56] under par. 3 of Art. 20, Rome Statute, which again underscores the primacy of the jurisdiction of a state vis-a-vis that of the ICC. As far as relevant, the provision states that no person who has been tried by another court for conduct x x x [constituting crimes within its jurisdiction] shall be tried by the [International Criminal] Court with respect to the same conduct x x x.

The foregoing provisions of the Rome Statute, taken collectively, argue against the idea of jurisdictional conflict between the Philippines, as party to the nonsurrender agreement, and the ICC; or the idea of the Agreement substantially impairing the value of the RPs undertaking under the Rome Statute. Ignoring for a while the fact

that the RP signed the Rome Statute ahead of the Agreement, it is abundantly clear to us that the Rome Statute expressly recognizes the primary jurisdiction of states, like the RP, over serious crimes committed within their respective borders, the complementary jurisdiction of the ICC coming into play only when the signatory states are unwilling or unable to prosecute.

Given the above consideration, petitioners suggestionthat the RP, by entering into the Agreement, violated its duty required by the imperatives of good faith and breached its commitment under the Vienna Convention[57] to refrain from performing any act tending to impair the value of a treaty, e.g., the Rome Statutehas to be rejected outright. For nothing in the provisions of the Agreement, in relation to the Rome Statute, tends to diminish the efficacy of the Statute, let alone defeats the purpose of the ICC. Lest it be overlooked, the Rome Statute contains a proviso that enjoins the ICC from seeking the surrender of an erring person, should the process require the requested state to perform an act that would violate some international agreement it has entered into. We refer to Art. 98(2) of the Rome Statute, which reads:

Article 98 Cooperation with respect to waiver of immunity and consent to surrender xxxx 2. The Court may not proceed with a request for surrender which would require the requested State to act inconsistently with its obligations under international agreements pursuant to which the consent of a sending State is required to surrender a person of that State to the Court, unless the Court can first obtain the cooperation of the

sending State for the giving of consent for the surrender.

Moreover, under international law, there is a considerable difference between a State-Party and a signatory to a treaty. Under the Vienna Convention on the Law of Treaties, a signatory state is only obliged to refrain from acts which would defeat the object and purpose of a treaty;[58] whereas a State-Party, on the other hand, is legally obliged to follow all the provisions of a treaty in good faith.

In the instant case, it bears stressing that the Philippines is only a signatory to the Rome Statute and not a State-Party for lack of ratification by the Senate. Thus, it is only obliged to refrain from acts which would defeat the object and purpose of the Rome Statute. Any argument obliging the Philippines to follow any provision in the treaty would be premature.

As a result, petitioners argument that State-Parties with non-surrender agreements are prevented from meeting their obligations under the Rome Statute, specifically Arts. 27, 86, 89 and 90, must fail. These articles are only legally binding upon State-Parties, not signatories.

Furthermore, a careful reading of said Art. 90 would show that the Agreement is not incompatible with the Rome Statute. Specifically, Art. 90(4) provides that [i]f the requesting State is a State not Party to this Statute the requested State, if it is not under an international obligation to extradite the person to the requesting State, shall give priority to the request for surrender from the Court. x x x In applying the

provision, certain undisputed facts should be pointed out: first, the US is neither a State-Party nor a signatory to the Rome Statute; and second, there is an international agreement between the US and the Philippines regarding extradition or surrender of persons, i.e., the Agreement. Clearly, even assuming that the Philippines is a StateParty, the Rome Statute still recognizes the primacy of international agreements entered into between States, even when one of the States is not a State-Party to the Rome Statute.

Sovereignty Limited by International Agreements

Petitioner next argues that the RP has, through the Agreement, abdicated its sovereignty by bargaining away the jurisdiction of the ICC to prosecute US nationals, government officials/employees or military personnel who commit serious crimes of international concerns in the Philippines. Formulating petitioners argument a bit differently, the RP, by entering into the Agreement, does thereby abdicate its sovereignty, abdication being done by its waiving or abandoning its right to seek recourse through the Rome Statute of the ICC for erring Americans committing international crimes in the country.

We are not persuaded. As it were, the Agreement is but a form of affirmance and confirmance of the Philippines national criminal jurisdiction. National criminal jurisdiction being primary, as explained above, it is always the responsibility and within the prerogative of the RP either to prosecute criminal offenses equally covered by the Rome Statute or to accede to the jurisdiction of the ICC. Thus, the Philippines may decide to try persons of the US, as the term is understood in the Agreement, under

our national criminal justice system. Or it may opt not to exercise its criminal jurisdiction over its erring citizens or over US persons committing high crimes in the country and defer to the secondary criminal jurisdiction of the ICC over them. As to persons of the US whom the Philippines refuses to prosecute, the country would, in effect, accord discretion to the US to exercise either its national criminal jurisdiction over the person concerned or to give its consent to the referral of the matter to the ICC for trial. In the same breath, the US must extend the same privilege to the Philippines with respect to persons of the RP committing high crimes within US territorial jurisdiction.

In the context of the Constitution, there can be no serious objection to the Philippines agreeing to undertake the things set forth in the Agreement. Surely, one State can agree to waive jurisdictionto the extent agreed uponto subjects of another State due to the recognition of the principle of extraterritorial immunity. What the Court wrote in Nicolas v. Romulo[59]a case involving the implementation of the criminal jurisdiction provisions of the RP-US Visiting Forces Agreementis apropos:

Nothing in the Constitution prohibits such agreements recognizing immunity from jurisdiction or some aspects of jurisdiction (such as custody), in relation to long-recognized subjects of such immunity like Heads of State, diplomats and members of the armed forces contingents of a foreign State allowed to enter another States territory. x x x

To be sure, the nullity of the subject non-surrender agreement cannot be predicated on the postulate that some of its provisions constitute a virtual abdication of its sovereignty. Almost every time a state enters into an international agreement, it voluntarily sheds off part of its sovereignty. The Constitution, as drafted, did not envision a reclusive Philippines isolated from the rest of the world. It even adheres, as earlier stated, to the policy of cooperation and amity with all nations.[60]

By their nature, treaties and international agreements actually have a limiting effect on the otherwise encompassing and absolute nature of sovereignty. By their voluntary act, nations may decide to surrender or waive some aspects of their state power or agree to limit the exercise of their otherwise exclusive and absolute jurisdiction. The usual underlying consideration in this partial surrender may be the greater benefits derived from a pact or a reciprocal undertaking of one contracting party to grant the same privileges or immunities to the other. On the rationale that the Philippines has adopted the generally accepted principles of international law as part of the law of the land, a portion of sovereignty may be waived without violating the Constitution.[61] Such waiver does not amount to an unconstitutional diminution or deprivation of jurisdiction of Philippine courts.[62]

Agreement Not Immoral/Not at Variance with Principles of International Law

Petitioner urges that the Agreement be struck down as void ab initio for imposing immoral obligations and/or being at variance with allegedly universally

recognized principles of international law. The immoral aspect proceeds from the fact that the Agreement, as petitioner would put it, leaves criminals immune from responsibility for unimaginable atrocities that deeply shock the conscience of humanity; x x x it precludes our country from delivering an American criminal to the [ICC] x x x.[63]

The above argument is a kind of recycling of petitioners earlier position, which, as already discussed, contends that the RP, by entering into the Agreement, virtually abdicated its sovereignty and in the process undermined its treaty obligations under the Rome Statute, contrary to international law principles.[64]

The Court is not persuaded. Suffice it to state in this regard that the nonsurrender agreement, as aptly described by the Solicitor General, is an assertion by the Philippines of its desire to try and punish crimes under its national law. x x x The agreement is a recognition of the primacy and competence of the countrys judiciary to try offenses under its national criminal laws and dispense justice fairly and judiciously.

Petitioner, we believe, labors under the erroneous impression that the Agreement would allow Filipinos and Americans committing high crimes of international concern to escape criminal trial and punishment. This is manifestly incorrect. Persons who may have committed acts penalized under the Rome Statute can be prosecuted and punished in the Philippines or in the US; or with the consent of the RP or the US, before the ICC, assuming, for the nonce, that all the formalities necessary to bind both countries to the Rome Statute have been met. For perspective, what the Agreement contextually prohibits is the surrender by either party of

individuals to international tribunals, like the ICC, without the consent of the other party, which may desire to prosecute the crime under its existing laws. With the view we take of things, there is nothing immoral or violative of international law concepts in the act of the Philippines of assuming criminal jurisdiction pursuant to the nonsurrender agreement over an offense considered criminal by both Philippine laws and the Rome Statute.

No Grave Abuse of Discretion

Petitioners final point revolves around the necessity of the Senates concurrence in the Agreement. And without specifically saying so, petitioner would argue that the non-surrender agreement was executed by the President, thru the DFA Secretary, in grave abuse of discretion.

The Court need not delve on and belabor the first portion of the above posture of petitioner, the same having been discussed at length earlier on. As to the second portion, We wish to state that petitioner virtually faults the President for performing, through respondents, a task conferred the President by the Constitutionthe power to enter into international agreements.

By constitutional fiat and by the nature of his or her office, the President, as head of state and government, is the sole organ and authority in the external affairs of the country.[65] The Constitution vests in the President the power to enter into international agreements, subject, in appropriate cases, to the required concurrence

votes of the Senate. But as earlier indicated, executive agreements may be validly entered into without such concurrence. As the President wields vast powers and influence, her conduct in the external affairs of the nation is, as Bayan would put it, executive altogether. The right of the President to enter into or ratify binding executive agreements has been confirmed by long practice.[66]

In thus agreeing to conclude the Agreement thru E/N BFO-028-03, then President Gloria Macapagal-Arroyo, represented by the Secretary of Foreign Affairs, acted within the scope of the authority and discretion vested in her by the Constitution. At the end of the day, the Presidentby ratifying, thru her deputies, the non-surrender agreementdid nothing more than discharge a constitutional duty and exercise a prerogative that pertains to her office.

While the issue of ratification of the Rome Statute is not determinative of the other issues raised herein, it may perhaps be pertinent to remind all and sundry that about the time this petition was interposed, such issue of ratification was laid to rest in Pimentel, Jr. v. Office of the Executive Secretary.[67] As the Court emphasized in said case, the power to ratify a treaty, the Statute in that instance, rests with the President, subject to the concurrence of the Senate, whose role relative to the ratification of a treaty is limited merely to concurring in or withholding the ratification. And concomitant with this treaty-making power of the President is his or her prerogative to refuse to submit a treaty to the Senate; or having secured the latters consent to the ratification of the treaty, refuse to ratify it.[68] This prerogative, the Court hastened to add, is the Presidents alone and cannot be encroached upon via a writ of mandamus. Barring intervening events, then, the Philippines remains to be just a signatory to the

Rome Statute. Under Art. 125[69] thereof, the final acts required to complete the treaty process and, thus, bring it into force, insofar as the Philippines is concerned, have yet to be done.

Agreement Need Not Be in the Form of a Treaty

On December 11, 2009, then President Arroyo signed into law Republic Act No. (RA) 9851, otherwise known as the Philippine Act on Crimes Against International Humanitarian Law, Genocide, and Other Crimes Against Humanity. Sec. 17 of RA 9851, particularly the second paragraph thereof, provides:

Section 17. Jurisdiction. x x x x In the interest of justice, the relevant Philippine authorities may dispense with the investigation or prosecution of a crime punishable under this Act if another court or international tribunal is already conducting the investigation or undertaking the prosecution of such crime. Instead, the authorities may surrender or extradite suspected or accused persons in the Philippines to the appropriate international court, if any, or to another State pursuant to the applicable extradition laws and treaties. (Emphasis supplied.)

A view is advanced that the Agreement amends existing municipal laws on the States obligation in relation to grave crimes against the law of nations, i.e., genocide, crimes against humanity and war crimes. Relying on the above-quoted statutory proviso, the view posits that the Philippine is required to surrender to the proper international tribunal those persons accused of the grave crimes defined under RA 9851, if it does not exercise its primary jurisdiction to prosecute them.

The basic premise rests on the interpretation that if it does not decide to prosecute a foreign national for violations of RA 9851, the Philippines has only two options, to wit: (1) surrender the accused to the proper international tribunal; or (2) surrender the accused to another State if such surrender is pursuant to the applicable extradition laws and treaties. But the Philippines may exercise these options only in cases where another court or international tribunal is already conducting the investigation or undertaking the prosecution of such crime; otherwise, the Philippines must prosecute the crime before its own courts pursuant to RA 9851.

Posing the situation of a US national under prosecution by an international tribunal for any crime under RA 9851, the Philippines has the option to surrender such US national to the international tribunal if it decides not to prosecute such US national here. The view asserts that this option of the Philippines under Sec. 17 of RA 9851 is not subject to the consent of the US, and any derogation of Sec. 17 of RA 9851, such as requiring the consent of the US before the Philippines can exercise such option, requires an amendatory law. In line with this scenario, the view strongly argues that the Agreement prevents the Philippineswithout the consent of the USfrom surrendering to any international tribunal US nationals accused of crimes covered by RA 9851, and, thus, in effect amends Sec. 17 of RA 9851. Consequently, the view is strongly impressed that the Agreement cannot be embodied in a simple executive agreement in the form of an exchange of notes but must be implemented through an extradition law or a treaty with the corresponding formalities.

Moreover, consonant with the foregoing view, citing Sec. 2, Art. II of the Constitution, where the Philippines adopts, as a national policy, the generally accepted principles of international law as part of the law of the land, the Court is further impressed to perceive the Rome Statute as declaratory of

customary international law. In other words, the Statute embodies principles of law which constitute customary international law or custom and for which reason it assumes the status of an enforceable domestic law in the context of the aforecited constitutional provision. As a corollary, it is argued that any derogation from the Rome Statute principles cannot be undertaken via a mere executive agreement, which, as an exclusive act of the executive branch, can only implement, but cannot amend or repeal, an existing law. The Agreement, so the argument goes, seeks to frustrate the objects of the principles of law or alters customary rules embodied in the Rome Statute.

Prescinding from the foregoing premises, the view thus advanced considers the Agreement inefficacious, unless it is embodied in a treaty duly ratified with the concurrence of the Senate, the theory being that a Senate- ratified treaty partakes of the nature of a municipal law that can amend or supersede another law, in this instance Sec. 17 of RA 9851 and the status of the Rome Statute as constitutive of enforceable domestic law under Sec. 2, Art. II of the Constitution.

We are unable to lend cogency to the view thus taken. For one, we find that the Agreement does not amend or is repugnant to RA 9851. For another, the view does not clearly state what precise principles of law, if any, the Agreement alters. And for a third, it does not demonstrate in the concrete how the Agreement seeks to frustrate the objectives of the principles of law subsumed in the Rome Statute.

Far from it, as earlier explained, the Agreement does not undermine the Rome Statute as the former merely reinforces the primacy of the national jurisdiction of the US and the Philippines in prosecuting criminal offenses committed by their respective citizens and military personnel, among others. The jurisdiction of the ICC pursuant to the Rome Statute over high crimes indicated thereat is clearly and unmistakably complementary to the national criminal jurisdiction of the signatory states.

Moreover, RA 9851 clearly: (1) defines and establishes the crimes against international humanitarian law, genocide and other crimes against humanity;[70] (2) provides penal sanctions and criminal liability for their commission;[71] and (3)

establishes special courts for the prosecution of these crimes and for the State to exercise primary criminal jurisdiction.[72] Nowhere in RA 9851 is there a proviso that goes against the tenor of the Agreement.

The view makes much of the above quoted second par. of Sec. 17, RA 9851 as requiring the Philippine State to surrender to the proper international tribunal those persons accused of crimes sanctioned under said law if it does not exercise its primary jurisdiction to prosecute such persons. This view is not entirely correct, for the above quoted proviso clearly provides discretion to the Philippine State on whether to surrender or not a person accused of the crimes under RA 9851. The statutory proviso uses the word may. It is settled doctrine in statutory construction that the word may denotes discretion, and cannot be construed as having mandatory effect.[73] Thus, the pertinent second pararagraph of Sec. 17, RA 9851 is simply permissive on the part of the Philippine State.

Besides, even granting that the surrender of a person is mandatorily required when the Philippines does not exercise its primary jurisdiction in cases where another court or international tribunal is already conducting the investigation or undertaking the prosecution of such crime, still, the tenor of the Agreement is not repugnant to Sec. 17 of RA 9851. Said legal proviso aptly provides that the surrender may be made to another State pursuant to the applicable extradition laws and treaties. The Agreement can already be considered a treaty following this Courts decision in Nicolas v. Romulo[74] which cited Weinberger v. Rossi.[75] In Nicolas, We held that an executive agreement is a treaty within the meaning of that word in international law and constitutes enforceable domestic law vis--vis the United States.[76]

Likewise, the Philippines and the US already have an existing extradition treaty, i.e., RP-US Extradition Treaty, which was executed on November 13, 1994. The pertinent Philippine law, on the other hand, is Presidential Decree No. 1069, issued on January 13, 1977. Thus, the Agreement, in conjunction with the RP-US Extradition Treaty, would neither violate nor run counter to Sec. 17 of RA 9851.

The views reliance on Suplico v. Neda[77] is similarly improper. In that case, several petitions were filed questioning the power of the President to enter into foreign loan agreements. However, before the petitions could be resolved by the Court, the Office of the Solicitor General filed a Manifestation and Motion averring that the Philippine Government decided not to continue with the ZTE National Broadband Network Project, thus rendering the petition moot. In resolving the case, the Court took judicial notice of the act of the executive department of the Philippines (the President) and found the petition to be indeed moot. Accordingly, it dismissed the petitions.

In his dissent in the abovementioned case, Justice Carpio discussed the legal implications of an executive agreement. He stated that an executive agreement has the force and effect of law x x x [it] cannot amend or repeal prior laws.[78] Hence, this argument finds no application in this case seeing as RA 9851 is a subsequent law, not a prior one. Notably, this argument cannot be found in the ratio decidendi of the case, but only in the dissenting opinion.

The view further contends that the RP-US Extradition Treaty is inapplicable to RA 9851 for the reason that under par. 1, Art. 2 of the RP-US Extradition Treaty, [a]n offense shall be an extraditable offense if it is punishable under the laws in both

Contracting Parties x x x,[79] and thereby concluding that while the Philippines has criminalized under RA 9851 the acts defined in the Rome Statute as war crimes, genocide and other crimes against humanity, there is no similar legislation in the US. It is further argued that, citing U.S. v. Coolidge, in the US, a person cannot be tried in the federal courts for an international crime unless Congress adopts a law defining and punishing the offense.

This view must fail.

On the contrary, the US has already enacted legislation punishing the high crimes mentioned earlier. In fact, as early as October 2006, the US enacted a law criminalizing war crimes. Section 2441, Chapter 118, Part I, Title 18 of the United States Code Annotated (USCA) provides for the criminal offense of war crimes which is similar to the war crimes found in both the Rome Statute and RA 9851, thus:

(a) Offense Whoever, whether inside or outside the United States, commits a war crime, in any of the circumstances described in subsection (b), shall be fined under this title or imprisoned for life or any term of years, or both, and if death results to the victim, shall also be subject to the penalty of death. (b) Circumstances The circumstances referred to in subsection (a) are that the person committing such war crime or the victim of such war crime is a member of the Armed Forces of the United States or a national of the United States (as defined in Section 101 of the Immigration and Nationality Act). (c) Definition As used in this Section the term war crime means any conduct (1) Defined as a grave breach in any of the international conventions signed at Geneva 12 August 1949, or any protocol to such convention to which the United States is a party; (2) Prohibited by Article 23, 25, 27 or 28 of the Annex to the Hague Convention IV, Respecting the Laws and Customs of War on Land, signed 18 October 1907;

(3) Which constitutes a grave breach of common Article 3 (as defined in subsection [d]) when committed in the context of and in association with an armed conflict not of an international character; or (4) Of a person who, in relation to an armed conflict and contrary to the provisions of the Protocol on Prohibitions or Restrictions on the Use of Mines, Booby-Traps and Other Devices as amended at Geneva on 3 May 1996 (Protocol II as amended on 3 May 1996), when the United States is a party to such Protocol, willfully kills or causes serious injury to civilians.[80]

Similarly, in December 2009, the US adopted a law that criminalized genocide, to wit:

1091. Genocide

(a) Basic Offense Whoever, whether in the time of peace or in time of war and with specific intent to destroy, in whole or in substantial part, a national, ethnic, racial or religious group as such (1) kills members of that group; (2) causes serious bodily injury to members of that group; (3) causes the permanent impairment of the mental faculties of members of the group through drugs, torture, or similar techniques; (4) subjects the group to conditions of life that are intended to cause the physical destruction of the group in whole or in part; (5) imposes measures intended to prevent births within the group; or (6) transfers by force children of the group to another group; shall be punished as provided in subsection (b).[81]

Arguing further, another view has been advanced that the current US laws do not cover every crime listed within the jurisdiction of the ICC and that there is a gap between the definitions of the different crimes under the US laws versus the Rome

Statute. The view used a report written by Victoria K. Holt and Elisabeth W. Dallas, entitled On Trial: The US Military and the International Criminal Court, as its basis.

At the outset, it should be pointed out that the report used may not have any weight or value under international law. Article 38 of the Statute of the International Court of Justice (ICJ) lists the sources of international law, as follows: (1) international conventions, whether general or particular, establishing rules expressly recognized by the contesting states; (2) international custom, as evidence of a general practice accepted as law; (3) the general principles of law recognized by civilized nations; and (4) subject to the provisions of Article 59, judicial decisions and the teachings of the most highly qualified publicists of the various nations, as subsidiary means for the determination of rules of law. The report does not fall under any of the foregoing enumerated sources. It cannot even be considered as the teachings of highly qualified publicists. A highly qualified publicist is a scholar of public international law and the term usually refers to legal scholars or academic writers.[82] It has not been shown that the authors[83] of this report are highly qualified publicists.

Assuming arguendo that the report has weight, still, the perceived gaps in the definitions of the crimes are nonexistent. To highlight, the table below shows the definitions of genocide and war crimes under the Rome Statute vis--vis the definitions under US laws:

Rome Statute US Law Article 6 Genocide

For the purpose of this Statute, genocide means any of the following acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group, as such: (a) Killing members of the group; (b) Causing serious bodily or mental harm to members of the group; (c) Deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole or in part; (d) Imposing measures intended to prevent births within the group; (e) Forcibly transferring children of the group to another group. 1091. Genocide (a) Basic Offense Whoever, whether in the time of peace or in time of war and with specific intent to destroy, in whole or in substantial part, a national, ethnic, racial or religious group as such (1) kills members of that group; (2) causes serious bodily injury to members of that group; (3) causes the permanent impairment of the mental faculties of members of the group through drugs, torture, or similar techniques; (4) subjects the group to conditions of life that are intended to cause the physical destruction of the group in whole or in part; (5) imposes measures intended to prevent births within the group; or (6) transfers by force children of the group to another group; shall be punished as provided in subsection (b). Article 8 War Crimes 2. For the purpose of this Statute, war crimes means: (a) Grave breaches of the Geneva Conventions of 12 August 1949, namely, any of the following acts against persons or property protected under the provisions of the relevant Geneva Convention: x x x[84] (b) Other serious violations of the laws and customs applicable in international armed conflict, within the established framework of international law, namely, any of the following acts: xxxx (c) In the case of an armed conflict not of an international character, serious violations of article 3 common to the four Geneva Conventions of 12 August 1949, namely, any of the following acts committed against persons taking no active part in the hostilities, including members of armed forces who have laid down their arms and those placed hors de combat by sickness, wounds, detention or any other cause: xxxx (d) Paragraph 2 (c) applies to armed conflicts not of an international character and thus does not apply to situations of internal disturbances and tensions, such as riots, isolated and sporadic acts of violence or other acts of a similar nature. (e) Other serious violations of the laws and customs applicable in armed conflicts not of an international character, within the established framework of international law, namely, any of the following acts: x x x. (a) Definition As used in this Section the term war crime means any conduct

(1) Defined as a grave breach in any of the international conventions signed at Geneva 12 August 1949, or any protocol to such convention to which the United States is a party; (2) Prohibited by Article 23, 25, 27 or 28 of the Annex to the Hague Convention IV, Respecting the Laws and Customs of War on Land, signed 18 October 1907; (3) Which constitutes a grave breach of common Article 3 (as defined in subsection [d][85]) when committed in the context of and in association with an armed conflict not of an international character; or (4) Of a person who, in relation to an armed conflict and contrary to the provisions of the Protocol on Prohibitions or Restrictions on the Use of Mines, Booby-Traps and Other Devices as amended at Geneva on 3 May 1996 (Protocol II as amended on 3 May 1996), when the United States is a party to such Protocol, willfully kills or causes serious injury to civilians.[86]

Evidently, the gaps pointed out as to the definition of the crimes are not present. In fact, the report itself stated as much, to wit:

Few believed there were wide differences between the crimes under the jurisdiction of the Court and crimes within the Uniform Code of Military Justice that would expose US personnel to the Court. Since US military lawyers were instrumental in drafting the elements of crimes outlined in the Rome Statute, they ensured that most of the crimes were consistent with those outlined in the UCMJ and gave strength to complementarity for the US. Small areas of potential gaps between the UCMJ and the Rome Statute, military experts argued, could be addressed through existing military laws.[87] x x x

The report went on further to say that [a]ccording to those involved, the elements of crimes laid out in the Rome Statute have been part of US military doctrine for decades.[88] Thus, the argument proffered cannot stand.

Nonetheless, despite the lack of actual domestic legislation, the US notably follows the doctrine of incorporation. As early as 1900, the esteemed Justice Gray in The Paquete Habana[89] case already held international law as part of the law of the US, to wit:

International law is part of our law, and must be ascertained and administered by the
courts of justice of appropriate jurisdiction as often as questions of right depending upon it are duly presented for their determination. For this purpose, where there is no treaty and no controlling executive or legislative act or judicial decision, resort must be had to the customs and usages of civilized nations, and, as evidence of these, to the works of jurists and commentators who by years of labor, research, and experience have made themselves peculiarly well acquainted with the subjects of which they treat. Such works are resorted to by judicial tribunals, not for the speculations of their authors concerning what the law ought to be, but for the trustworthy evidence of what the law really is.[90] (Emphasis supplied.)

Thus, a person can be tried in the US for an international crime despite the lack of domestic legislation. The cited ruling in U.S. v. Coolidge,[91] which in turn is based on the holding in U.S. v. Hudson,[92] only applies to common law and not to the law of nations or international law.[93] Indeed, the Court in U.S. v. Hudson only considered the question, whether the Circuit Courts of the United States can exercise a common law jurisdiction in criminal cases.[94] Stated otherwise, there is no common law crime in the US but this is considerably different from international law.

The US doubtless recognizes international law as part of the law of the land, necessarily including international crimes, even without any local statute.[95] In fact, years later, US courts would apply international law as a source of criminal liability despite the lack of a local statute criminalizing it as such. So it was that in Ex Parte Quirin[96] the US Supreme Court noted that [f]rom the very beginning of its history this Court has recognized and applied the law of war as including that part of the law of nations which prescribes, for the conduct of war, the status, rights and duties of enemy nations as well as of enemy individuals.[97] It went on further to explain that Congress had not undertaken the task of codifying the specific offenses covered in the law of war, thus:

It is no objection that Congress in providing for the trial of such offenses has not itself undertaken to codify that branch of international law or to mark its precise boundaries, or to enumerate or define by statute all the acts which that law condemns. An Act of Congress punishing the crime of piracy as defined by the law of nations is an appropriate exercise of its constitutional authority, Art. I, s 8, cl. 10, to define and punish the offense since it has adopted by reference the sufficiently precise definition of international law. x x x Similarly by the reference in the 15th Article of War to offenders or offenses that x x x by the law of war may be triable by such military commissions. Congress has incorporated by reference, as within the jurisdiction of military commissions, all offenses which are defined as such by the law of war x x x, and which may constitutionally be included within that jurisdiction.[98] x x x (Emphasis supplied.)

This rule finds an even stronger hold in the case of crimes against humanity. It has been held that genocide, war crimes and crimes against humanity have attained the status of customary international law. Some even go so far as to state that these crimes have attained the status of jus cogens.[99]

Customary international law or international custom is a source of international law as stated in the Statute of the ICJ.[100] It is defined as the general and consistent practice of states recognized and followed by them from a sense of legal obligation.[101] In order to establish the customary status of a particular norm, two elements must concur: State practice, the objective element; and opinio juris sive necessitates, the subjective element.[102]

State practice refers to the continuous repetition of the same or similar kind of acts or norms by States.[103] It is demonstrated upon the existence of the following elements: (1) generality; (2) uniformity and consistency; and (3) duration.[104] While, opinio juris, the psychological element, requires that the state practice or norm be carried out in such a way, as to be evidence of a belief that this practice is rendered

obligatory by the existence of a rule of law requiring it.[105]

The term jus cogens means the compelling law.[106] Corollary, a jus cogens norm holds the highest hierarchical position among all other customary norms and principles.[107] As a result, jus cogens norms are deemed peremptory and nonderogable.[108] When applied to international crimes, jus cogens crimes have been deemed so fundamental to the existence of a just international legal order that states cannot derogate from them, even by agreement.[109]

These jus cogens crimes relate to the principle of universal jurisdiction, i.e., any state may exercise jurisdiction over an individual who commits certain heinous and widely condemned offenses, even when no other recognized basis for jurisdiction exists.[110] The rationale behind this principle is that the crime committed is so egregious that it is considered to be committed against all members of the international community[111] and thus granting every State jurisdiction over the crime.[112]

Therefore, even with the current lack of domestic legislation on the part of the US, it still has both the doctrine of incorporation and universal jurisdiction to try these crimes.

Consequently, no matter how hard one insists, the ICC, as an international tribunal, found in the Rome Statute is not declaratory of customary international law.

The first element of customary international law, i.e., established, widespread, and consistent practice on the part of States,[113] does not, under the premises, appear to be obtaining as reflected in this simple reality: As of October 12, 2010, only 114[114] States have ratified the Rome Statute, subsequent to its coming into force eight (8) years earlier, or on July 1, 2002. The fact that 114 States out of a total of 194[115] countries in the world, or roughly 58.76%, have ratified the Rome Statute casts doubt on whether or not the perceived principles contained in the Statute have attained the status of customary law and should be deemed as obligatory international law. The numbers even tend to argue against the urgency of establishing international criminal courts envisioned in the Rome Statute. Lest it be overlooked, the Philippines, judging by the action or inaction of its top officials, does not even feel bound by the Rome Statute. Res ipsa loquitur. More than eight (8) years have elapsed since the Philippine representative signed the Statute, but the treaty has not been transmitted to the Senate for the ratification process.
And this brings us to what Fr. Bernas, S.J. aptly said respecting the application of the concurring elements, thus:

Custom or customary international law means a general and consistent practice of states followed by them from a sense of legal obligation [opinio juris] x x x. This statement contains the two basic elements of custom: the material factor, that is how the states behave, and the psychological factor or subjective factor, that is, why they behave the way they do.

xxxx

The initial factor for determining the existence of custom is the actual behavior of states. This includes several elements: duration, consistency, and generality of the practice of states.

The required duration can be either short or long. x x x

xxxx

Duration therefore is not the most important element. More important is the consistency and the generality of the practice. x x x

xxxx

Once the existence of state practice has been established, it becomes necessary to determine why states behave the way they do. Do states behave the way they do because they consider it obligatory to behave thus or do they do it only as a matter of courtesy? Opinio juris, or the belief that a certain form of behavior is obligatory, is what makes practice an international rule. Without it, practice is not law.[116] (Emphasis added.)

Evidently, there is, as yet, no overwhelming consensus, let alone prevalent practice, among the different countries in the world that the prosecution of internationally recognized crimes of genocide, etc. should be handled by a particular international criminal court.

Absent the widespread/consistent-practice-of-states factor, the second or the psychological element must be deemed non-existent, for an inquiry on why states behave the way they do presupposes, in the first place, that they are actually behaving, as a matter of settled and consistent practice, in a certain manner. This implicitly requires belief that the practice in question is rendered obligatory by the existence of a rule of law requiring it.[117] Like the first element, the second element has likewise not been shown to be present.

Further, the Rome Statute itself rejects the concept of universal jurisdiction over the crimes enumerated therein as evidenced by it requiring State consent.[118] Even

further, the Rome Statute specifically and unequivocally requires that: This Statute is subject to ratification, acceptance or approval by signatory States.[119] These clearly negate the argument that such has already attained customary status.

More importantly, an act of the executive branch with a foreign government must be afforded great respect. The power to enter into executive agreements has long been recognized to be lodged with the President. As We held in Neri v. Senate Committee on Accountability of Public Officers and Investigations, [t]he power to enter into an executive agreement is in essence an executive power. This authority of the President to enter into executive agreements without the concurrence of the Legislature has traditionally been recognized in Philippine jurisprudence.[120] The rationale behind this principle is the inviolable doctrine of separation of powers among the legislative, executive and judicial branches of the government. Thus, absent any clear contravention of the law, courts should exercise utmost caution in declaring any executive agreement invalid.

In light of the above consideration, the position or view that the challenged RP-US Non-Surrender Agreement ought to be in the form of a treaty, to be effective, has to be rejected.

WHEREFORE, the petition for certiorari, mandamus and prohibition is hereby DISMISSED for lack of merit. No costs.

SO ORDERED. CHINA NATIONAL MACHINERY & EQUIPMENT CORP. (GROUP), Petitioner, versus HON. CESAR D. SANTAMARIA, in his official capacity as Presiding Judge of Branch 145, Regional Trial Court of Makati City, HERMINIO HARRY L. ROQUE, JR., JOEL R. BUTUYAN, ROGER R. RAYEL, ROMEL R. BAGARES, CHRISTOPHER FRANCISCO C. BOLASTIG, LEAGUE OF URBAN POOR FOR ACTION (LUPA), KILUSAN NG MARALITA SA MEYCAUAYAN (KMM-LUPA CHAPTER), DANILO M. CALDERON, VICENTE C. ALBAN, MERLYN M. VAAL, LOLITA S. QUINONES, RICARDO D. LANOZO, JR., CONCHITA G. GOZO, MA. TERESA D. ZEPEDA, JOSEFINA A. LANOZO, and SERGIO C. LEGASPI, JR., KALIPUNAN NG DAMAYANG MAHIHIRAP (KADAMAY), EDY CLERIGO, RAMMIL DINGAL, NELSON B. TERRADO, CARMEN DEUNIDA, and EDUARDO LEGSON, Respondents. G.R. No. 185572 Present: CORONA, C.J., CARPIO, VELASCO, JR., LEONARDO-DE CASTRO, BRION, PERALTA, BERSAMIN, DEL CASTILLO, ABAD, VILLARAMA, JR., PEREZ, MENDOZA, SERENO, REYES, and

PERLAS-BERNABE, JJ.

Promulgated: February 7, 2012 x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION SERENO, J.: This is a Petition for Review on Certiorari with Prayer for the Issuance of a Temporary Restraining Order (TRO) and/or Preliminary Injunction assailing the 30 September 2008 Decision and 5 December 2008 Resolution of the Court of Appeals (CA) in CAG.R. SP No. 103351.[1] On 14 September 2002, petitioner China National Machinery & Equipment Corp. (Group) (CNMEG), represented by its chairperson, Ren Hongbin, entered into a Memorandum of Understanding with the North Luzon Railways Corporation (Northrail), represented by its president, Jose L. Cortes, Jr. for the conduct of a feasibility study on a possible railway line from Manila to San Fernando, La Union (the Northrail Project).[2] On 30 August 2003, the Export Import Bank of China (EXIM Bank) and the Department of Finance of the Philippines (DOF) entered into a Memorandum of Understanding (Aug 30 MOU), wherein China agreed to extend Preferential Buyers

Credit to the Philippine government to finance the Northrail Project.[3] The Chinese government designated EXIM Bank as the lender, while the Philippine government named the DOF as the borrower.[4] Under the Aug 30 MOU, EXIM Bank agreed to extend an amount not exceeding USD 400,000,000 in favor of the DOF, payable in 20 years, with a 5-year grace period, and at the rate of 3% per annum.[5] On 1 October 2003, the Chinese Ambassador to the Philippines, Wang Chungui (Amb. Wang), wrote a letter to DOF Secretary Jose Isidro Camacho (Sec. Camacho) informing him of CNMEGs designation as the Prime Contractor for the Northrail Project.[6] On 30 December 2003, Northrail and CNMEG executed a Contract Agreement for the construction of Section I, Phase I of the North Luzon Railway System from Caloocan to Malolos on a turnkey basis (the Contract Agreement).[7] The contract price for the Northrail Project was pegged at USD 421,050,000.[8] On 26 February 2004, the Philippine government and EXIM Bank entered into a counterpart financial agreement Buyer Credit Loan Agreement No. BLA 04055 (the Loan Agreement).[9] In the Loan Agreement, EXIM Bank agreed to extend Preferential Buyers Credit in the amount of USD 400,000,000 in favor of the Philippine government in order to finance the construction of Phase I of the Northrail Project.[10] On 13 February 2006, respondents filed a Complaint for Annulment of Contract and Injunction with Urgent Motion for Summary Hearing to Determine the Existence of Facts and Circumstances Justifying the Issuance of Writs of Preliminary Prohibitory and Mandatory Injunction and/or TRO against CNMEG, the Office of the Executive Secretary, the DOF, the Department of Budget and Management, the National Economic Development Authority and Northrail.[11] The case was docketed as Civil

Case No. 06-203 before the Regional Trial Court, National Capital Judicial Region, Makati City, Branch 145 (RTC Br. 145). In the Complaint, respondents alleged that the Contract Agreement and the Loan Agreement were void for being contrary to (a) the Constitution; (b) Republic Act No. 9184 (R.A. No. 9184), otherwise known as the Government Procurement Reform Act; (c) Presidential Decree No. 1445, otherwise known as the Government Auditing Code; and (d) Executive Order No. 292, otherwise known as the Administrative Code.[12] RTC Br. 145 issued an Order dated 17 March 2006 setting the case for hearing on the issuance of injunctive reliefs.[13] On 29 March 2006, CNMEG filed an Urgent Motion for Reconsideration of this Order.[14] Before RTC Br. 145 could rule thereon, CNMEG filed a Motion to Dismiss dated 12 April 2006, arguing that the trial court did not have jurisdiction over (a) its person, as it was an agent of the Chinese government, making it immune from suit, and (b) the subject matter, as the Northrail Project was a product of an executive agreement.[15] On 15 May 2007, RTC Br. 145 issued an Omnibus Order denying CNMEGs Motion to Dismiss and setting the case for summary hearing to determine whether the injunctive reliefs prayed for should be issued.[16] CNMEG then filed a Motion for Reconsideration,[17] which was denied by the trial court in an Order dated 10 March 2008.[18] Thus, CNMEG filed before the CA a Petition for Certiorari with Prayer for the Issuance of TRO and/or Writ of Preliminary Injunction dated 4 April 2008.[19] In the assailed Decision dated 30 September 2008, the appellate court dismissed the Petition for Certiorari.[20] Subsequently, CNMEG filed a Motion for Reconsideration,[21] which was denied by the CA in a Resolution dated 5 December 2008.[22] Thus, CNMEG filed the instant Petition for Review on Certiorari dated 21

January 2009, raising the following issues: [23]

Whether or not petitioner CNMEG is an agent of the sovereign Peoples Republic of China.

Whether or not the Northrail contracts are products of an executive agreement between two sovereign states.

Whether or not the certification from the Department of Foreign Affairs is necessary under the foregoing circumstances.

Whether or not the act being undertaken by petitioner CNMEG is an act jure imperii.

Whether or not the Court of Appeals failed to avoid a procedural limbo in the lower court.

Whether or not the Northrail Project is subject to competitive public bidding.

Whether or not the Court of Appeals ignored the ruling of this Honorable Court in the Neri case.

CNMEG prays for the dismissal of Civil Case No. 06-203 before RTC Br. 145 for lack of jurisdiction. It likewise requests this Court for the issuance of a TRO and, later on, a

writ of preliminary injunction to restrain public respondent from proceeding with the disposition of Civil Case No. 06-203. The crux of this case boils down to two main issues, namely: 1. Whether CNMEG is entitled to immunity, precluding it from being sued before a local court. 2. Whether the Contract Agreement is an executive agreement, such that it cannot be questioned by or before a local court.

First issue: Whether CNMEG is entitled to immunity This Court explained the doctrine of sovereign immunity in Holy See v. Rosario,[24] to wit:
There are two conflicting concepts of sovereign immunity, each widely held and firmly established. According to the classical or absolute theory, a sovereign cannot, without its consent, be made a respondent in the courts of another sovereign. According to the newer or restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state, but not with regard to private acts or acts jure gestionis. (Emphasis supplied; citations omitted.)

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The restrictive theory came about because of the entry of sovereign states into purely commercial activities remotely connected with the discharge of governmental functions. This is particularly true with respect to the Communist states which took control of nationalized business activities and international trading.

In JUSMAG v. National Labor Relations Commission,[25] this Court affirmed the Philippines adherence to the restrictive theory as follows:
The doctrine of state immunity from suit has undergone further metamorphosis. The view evolved that the existence of a contract does not, per se, mean that sovereign states may, at all times, be sued in local courts. The complexity of relationships between sovereign states, brought about by their increasing commercial activities, mothered a more restrictive application of the doctrine.

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As it stands now, the application of the doctrine of immunity from suit has been restricted to sovereign or governmental activities (jure imperii). The mantle of state immunity cannot be extended to commercial, private and proprietary acts (jure gestionis).[26] (Emphasis supplied.)

Since the Philippines adheres to the restrictive theory, it is crucial to ascertain the legal nature of the act involved whether the entity claiming immunity performs governmental, as opposed to proprietary, functions. As held in United States of America v. Ruiz [27]
The restrictive application of State immunity is proper only when the proceedings arise out of commercial transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, a State may be said to have descended to the level of an individual and can thus be deemed to have tacitly given its consent to be sued only when it enters into business contracts. It does not apply where the contract relates to the exercise of its sovereign functions.[28]

A. CNMEG is engaged in a proprietary activity.

A threshold question that must be answered is whether CNMEG performs governmental or proprietary functions. A thorough examination of the basic facts of the case would show that CNMEG is engaged in a proprietary activity. The parties executed the Contract Agreement for the purpose of constructing the Luzon Railways, viz:[29]
WHEREAS the Employer (Northrail) desired to construct the railways form Caloocan to Malolos, section I, Phase I of Philippine North Luzon Railways Project (hereinafter referred to as THE PROJECT);

AND WHEREAS the Contractor has offered to provide the Project on Turnkey basis, including design, manufacturing, supply, construction, commissioning, and training of the Employers personnel;

AND WHEREAS the Loan Agreement of the Preferential Buyers Credit between Export-Import Bank of China and Department of Finance of Republic of the Philippines;

NOW, THEREFORE, the parties agree to sign this Contract for the Implementation of the Project.

The above-cited portion of the Contract Agreement, however, does not on its own reveal whether the construction of the Luzon railways was meant to be a proprietary endeavor. In order to fully understand the intention behind and the purpose of the entire undertaking, the Contract Agreement must not be read in isolation. Instead, it must be construed in conjunction with three other documents executed in relation to the Northrail Project, namely: (a) the Memorandum of

Understanding dated 14 September 2002 between Northrail and CNMEG;[30] (b) the letter of Amb. Wang dated 1 October 2003 addressed to Sec. Camacho;[31] and (c) the Loan Agreement.[32]

1. Memorandum of Understanding dated 14 September 2002

The Memorandum of Understanding dated 14 September 2002 shows that CNMEG sought the construction of the Luzon Railways as a proprietary venture. The relevant parts thereof read:
WHEREAS, CNMEG has the financial capability, professional competence and technical expertise to assess the state of the [Main Line North (MLN)] and recommend implementation plans as well as undertake its rehabilitation and/or modernization;

WHEREAS, CNMEG has expressed interest in the rehabilitation and/or modernization of the MLN from Metro Manila to San Fernando, La Union passing through the provinces of Bulacan, Pampanga, Tarlac, Pangasinan and La Union (the Project);

WHEREAS, the NORTHRAIL CORP. welcomes CNMEGs proposal to undertake a Feasibility Study (the Study) at no cost to NORTHRAIL CORP.;

WHEREAS, the NORTHRAIL CORP. also welcomes CNMEGs interest in undertaking the Project with Suppliers Credit and intends to employ CNMEG as the Contractor for the Project subject to compliance with Philippine and Chinese laws, rules and regulations for the selection of a contractor;

WHEREAS, the NORTHRAIL CORP. considers CNMEGs proposal advantageous to the Government of the Republic of the Philippines and has therefore agreed to assist CNMEG in the conduct of the aforesaid Study;

xxx II. APPROVAL PROCESS 2.1

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As soon as possible after completion and presentation of the Study in accordance with Paragraphs 1.3 and 1.4 above and in compliance with necessary governmental laws, rules, regulations and procedures required from both parties, the parties shall commence the preparation and negotiation of the terms and conditions of the Contract (the Contract) to be entered into between them on the implementation of the Project. The parties shall use their best endeavors to formulate and finalize a Contract with a view to signing the Contract within one hundred twenty (120) days from CNMEGs presentation of the Study.[33] (Emphasis supplied)

Clearly, it was CNMEG that initiated the undertaking, and not the Chinese government. The Feasibility Study was conducted not because of any diplomatic gratuity from or exercise of sovereign functions by the Chinese government, but was plainly a business strategy employed by CNMEG with a view to securing this commercial enterprise.

2. Letter dated 1 October 2003 That CNMEG, and not the Chinese government, initiated the Northrail Project was confirmed by Amb. Wang in his letter dated 1 October 2003, thus:
1. CNMEG has the proven competence and capability to undertake the Project as evidenced by the ranking of 42 given by the ENR among 225 global construction companies.

2. CNMEG already signed an MOU with the North Luzon Railways Corporation last September 14, 2000 during the visit of Chairman Li Peng. Such being the case, they have already established an initial working relationship with your North Luzon Railways

Corporation. This would categorize CNMEG as the state corporation within the Peoples Republic of China which initiated our Governments involvement in the Project.

3. Among the various state corporations of the Peoples Republic of China, only CNMEG has the advantage of being fully familiar with the current requirements of the Northrail Project having already accomplished a Feasibility Study which was used as inputs by the North Luzon Railways Corporation in the approvals (sic) process required by the Republic of the Philippines.[34] (Emphasis supplied.)

Thus, the desire of CNMEG to secure the Northrail Project was in the ordinary or regular course of its business as a global construction company. The implementation of the Northrail Project was intended to generate profit for CNMEG, with the Contract Agreement placing a contract price of USD 421,050,000 for the venture.[35] The use of the term state corporation to refer to CNMEG was only descriptive of its nature as a government-owned and/or -controlled corporation, and its assignment as the Primary Contractor did not imply that it was acting on behalf of China in the performance of the latters sovereign functions. To imply otherwise would result in an absurd situation, in which all Chinese corporations owned by the state would be automatically considered as performing governmental activities, even if they are clearly engaged in commercial or proprietary pursuits.

3. The Loan Agreement CNMEG claims immunity on the ground that the Aug 30 MOU on the financing of the Northrail Project was signed by the Philippine and Chinese governments, and its assignment as the Primary Contractor meant that it was bound to perform a

governmental function on behalf of China. However, the Loan Agreement, which originated from the same Aug 30 MOU, belies this reasoning, viz:
Article 11. xxx (j) Commercial Activity The execution and delivery of this Agreement by the Borrower constitute, and the Borrowers performance of and compliance with its obligations under this Agreement will constitute, private and commercial acts done and performed for commercial purposes under the laws of the Republic of the Philippines and neither the Borrower nor any of its assets is entitled to any immunity or privilege (sovereign or otherwise) from suit, execution or any other legal process with respect to its obligations under this Agreement, as the case may be, in any jurisdiction. Notwithstanding the foregoing, the Borrower does not waive any immunity with respect of its assets which are (i) used by a diplomatic or consular mission of the Borrower and (ii) assets of a military character and under control of a military authority or defense agency and (iii) located in the Philippines and dedicated to public or governmental use (as distinguished from patrimonial assets or assets dedicated to commercial use). (Emphasis supplied.)

(k) Proceedings to Enforce Agreement In any proceeding in the Republic of the Philippines to enforce this Agreement, the choice of the laws of the Peoples Republic of China as the governing law hereof will be recognized and such law will be applied. The waiver of immunity by the Borrower, the irrevocable submissions of the Borrower to the non-exclusive jurisdiction of the courts of the Peoples Republic of China and the appointment of the Borrowers Chinese Process Agent is legal, valid, binding and enforceable and any judgment obtained in the Peoples Republic of China will be if introduced, evidence for enforcement in any proceedings against the Borrower and its assets in the Republic of the Philippines provided that (a) the court rendering judgment had jurisdiction over the subject matter of the action in accordance with its jurisdictional rules, (b) the Republic had notice of the proceedings, (c) the judgment of the court was not obtained through collusion or fraud, and (d) such judgment was not based on a clear mistake of fact or law.[36]

Further, the Loan Agreement likewise contains this express waiver of immunity:
15.5 Waiver of Immunity The Borrower irrevocably and unconditionally waives, any
immunity to which it or its property may at any time be or become entitled, whether characterized as sovereign immunity or otherwise, from any suit, judgment, service of process upon it or any agent, execution on judgment, set-off, attachment prior to judgment, attachment in aid of execution to which it or its assets may be entitled in any legal action or proceedings with respect to this Agreement or any of the transactions contemplated hereby or hereunder.

Notwithstanding the foregoing, the Borrower does not waive any immunity in respect of its assets which are (i) used by a diplomatic or consular mission of the Borrower, (ii) assets of a military character and under control of a military authority or defense agency and (iii) located in the Philippines and dedicated to a public or governmental use (as distinguished from patrimonial assets or assets dedicated to commercial use).[37]

Thus, despite petitioners claim that the EXIM Bank extended financial assistance to Northrail because the bank was mandated by the Chinese government, and not because of any motivation to do business in the Philippines,[38] it is clear from the foregoing provisions that the Northrail Project was a purely commercial transaction. Admittedly, the Loan Agreement was entered into between EXIM Bank and the Philippine government, while the Contract Agreement was between Northrail and CNMEG. Although the Contract Agreement is silent on the classification of the legal nature of the transaction, the foregoing provisions of the Loan Agreement, which is an inextricable part of the entire undertaking, nonetheless reveal the intention of the parties to the Northrail Project to classify the whole venture as commercial or proprietary in character. Thus, piecing together the content and tenor of the Contract Agreement, the Memorandum of Understanding dated 14 September 2002, Amb. Wangs letter dated 1 October 2003, and the Loan Agreement would reveal the desire of CNMEG to construct the Luzon Railways in pursuit of a purely commercial activity performed in the ordinary course of its business.

B. CNMEG failed to adduce evidence that it is immune from suit under Chinese law.

Even assuming arguendo that CNMEG performs governmental functions, such claim does not automatically vest it with immunity. This view finds support in Malong v. Philippine National Railways, in which this Court held that (i)mmunity from suit is determined by the character of the objects for which the entity was organized.[39] In this regard, this Courts ruling in Deutsche Gesellschaft Fr Technische Zusammenarbeit (GTZ) v. CA[40] must be examined. In Deutsche Gesellschaft, Germany and the Philippines entered into a Technical Cooperation Agreement, pursuant to which both signed an arrangement promoting the Social Health InsuranceNetworking and Empowerment (SHINE) project. The two governments named their respective implementing organizations: the Department of Health (DOH) and the Philippine Health Insurance Corporation (PHIC) for the Philippines, and GTZ for the implementation of Germanys contributions. In ruling that GTZ was not immune from suit, this Court held:
The arguments raised by GTZ and the [Office of the Solicitor General (OSG)] are rooted in several indisputable facts. The SHINE project was implemented pursuant to the bilateral agreements between the Philippine and German governments. GTZ was tasked, under the 1991 agreement, with the implementation of the contributions of the German government. The activities performed by GTZ pertaining to the SHINE project are governmental in nature, related as they are to the promotion of health insurance in the Philippines. The fact that GTZ entered into employment contracts with the private respondents did not disqualify it from invoking immunity from suit, as held in cases such as Holy See v. Rosario, Jr., which set forth what remains valid doctrine: Certainly, the mere entering into a contract by a foreign state with a private party cannot be the ultimate test. Such an act can only be the start of the inquiry. The logical question is whether the foreign state is engaged in the activity in the regular course of business. If the foreign state is not engaged regularly in a business or trade, the particular act or transaction must then be tested by its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure imperii, especially when it is not undertaken for gain or profit.

Beyond dispute is the tenability of the comment points (sic) raised by GTZ and the OSG that GTZ was not performing proprietary functions notwithstanding its entry into the particular employment contracts. Yet there is an equally fundamental premise which GTZ and the OSG fail to address, namely: Is GTZ, by conception, able to enjoy the Federal Republics immunity from suit? The principle of state immunity from suit, whether a local state or a foreign state, is reflected in Section 9, Article XVI of the Constitution, which states that the State may not be sued without its consent. Who or what consists of the State? For one, the doctrine is available to foreign States insofar as they are sought to be sued in the courts of the local State, necessary as it is to avoid unduly vexing the peace of nations. If the instant suit had been brought directly against the Federal Republic of Germany, there would be no doubt that it is a suit brought against a State, and the only necessary inquiry is whether said State had consented to be sued. However, the present suit was brought against GTZ. It is necessary for us to understand what precisely are the parameters of the legal personality of GTZ. Counsel for GTZ characterizes GTZ as the implementing agency of the Government of the Federal Republic of Germany, a depiction similarly adopted by the OSG. Assuming that the characterization is correct, it does not automatically invest GTZ with the ability to invoke State immunity from suit. The distinction lies in whether the agency is incorporated or unincorporated.

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State immunity from suit may be waived by general or special law. The special law can take the form of the original charter of the incorporated government agency. Jurisprudence is replete with examples of incorporated government agencies which were ruled not entitled to invoke immunity from suit, owing to provisions in their charters manifesting their consent to be sued.

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It is useful to note that on the part of the Philippine government, it had designated two entities, the Department of Health and the Philippine Health Insurance Corporation (PHIC), as the implementing agencies in behalf of the Philippines. The PHIC was established under Republic Act No. 7875, Section 16 (g) of which grants the corporation the power to sue and be sued in court. Applying the previously cited jurisprudence, PHIC would not enjoy immunity from suit even in the

performance of its functions connected with SHINE, however, (sic) governmental in nature as (sic) they may be.

Is GTZ an incorporated agency of the German government? There is some mystery surrounding that question. Neither GTZ nor the OSG go beyond the claim that petitioner is the implementing agency of the Government of the Federal Republic of Germany. On the other hand, private respondents asserted before the Labor Arbiter that GTZ was a private corporation engaged in the implementation of development projects. The Labor Arbiter accepted that claim in his Order denying the Motion to Dismiss, though he was silent on that point in his Decision. Nevertheless, private respondents argue in their Comment that the finding that GTZ was a private corporation was never controverted, and is therefore deemed admitted. In its Reply, GTZ controverts that finding, saying that it is a matter of public knowledge that the status of petitioner GTZ is that of the implementing agency, and not that of a private corporation. In truth, private respondents were unable to adduce any evidence to substantiate their claim that GTZ was a private corporation, and the Labor Arbiter acted rashly in accepting such claim without explanation. But neither has GTZ supplied any evidence defining its legal nature beyond that of the bare descriptive implementing agency. There is no doubt that the 1991 Agreement designated GTZ as the implementing agency in behalf of the German government. Yet the catch is that such term has no precise definition that is responsive to our concerns. Inherently, an agent acts in behalf of a principal, and the GTZ can be said to act in behalf of the German state. But that is as far as implementing agency could take us. The term by itself does not supply whether GTZ is incorporated or unincorporated, whether it is owned by the German state or by private interests, whether it has juridical personality independent of the German government or none at all. xxx xxx xxx

Again, we are uncertain of the corresponding legal implications under German law surrounding a private company owned by the Federal Republic of Germany. Yet taking the description on face value, the apparent equivalent under Philippine law is that of a corporation organized under the Corporation Code but owned by the Philippine government, or a government-owned or controlled corporation without original charter. And it bears notice that Section 36 of the Corporate Code states that [e]very corporation incorporated under this Code has the power and capacity x x x to sue and be sued in its corporate name. It is entirely possible that under German law, an entity such as GTZ or particularly GTZ itself has not been vested or has been specifically deprived the power and capacity to sue and/or be sued. Yet in the proceedings below and before this Court, GTZ has failed to establish that under German law, it has not consented to be sued despite it being owned by the Federal

Republic of Germany. We adhere to the rule that in the absence of evidence to the contrary, foreign laws on a particular subject are presumed to be the same as those of the Philippines, and following the most intelligent assumption we can gather, GTZ is akin to a governmental owned or controlled corporation without original charter which, by virtue of the Corporation Code, has expressly consented to be sued. At the very least, like the Labor Arbiter and the Court of Appeals, this Court has no basis in fact to conclude or presume that GTZ enjoys immunity from suit.[41] (Emphasis supplied.)

Applying the foregoing ruling to the case at bar, it is readily apparent that CNMEG cannot claim immunity from suit, even if it contends that it performs governmental functions. Its designation as the Primary Contractor does not automatically grant it immunity, just as the term implementing agency has no precise definition for purposes of ascertaining whether GTZ was immune from suit. Although CNMEG claims to be a government-owned corporation, it failed to adduce evidence that it has not consented to be sued under Chinese law. Thus, following this Courts ruling in Deutsche Gesellschaft, in the absence of evidence to the contrary, CNMEG is to be presumed to be a government-owned and -controlled corporation without an original charter. As a result, it has the capacity to sue and be sued under Section 36 of the Corporation Code.

C. CNMEG failed to present a certification from the Department of Foreign Affairs.

In Holy See,[42] this Court reiterated the oft-cited doctrine that the determination by the Executive that an entity is entitled to sovereign or diplomatic immunity is a political question conclusive upon the courts, to wit:
In Public International Law, when a state or international agency wishes to plead sovereign or diplomatic immunity in a foreign court, it requests the Foreign Office of the state where it is sued to convey to the court that said defendant is entitled to immunity.

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In the Philippines, the practice is for the foreign government or the international organization to first secure an executive endorsement of its claim of sovereign or diplomatic immunity. But how the Philippine Foreign Office conveys its endorsement to the courts varies. In International Catholic Migration Commission v. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign Affairs just sent a letter directly to the Secretary of Labor and Employment, informing the latter that the respondent-employer could not be sued because it enjoyed diplomatic immunity. In World Health Organization v. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial court a telegram to that effect. In Baer v. Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked the Secretary of Foreign Affairs to request the Solicitor General to make, in behalf of the Commander of the United States Naval Base at Olongapo City, Zambales, a suggestion to respondent Judge. The Solicitor General embodied the suggestion in a Manifestation and Memorandum as amicus curiae. In the case at bench, the Department of Foreign Affairs, through the Office of Legal Affairs moved with this Court to be allowed to intervene on the side of petitioner. The Court allowed the said Department to file its memorandum in support of petitioners claim of sovereign immunity. In some cases, the defense of sovereign immunity was submitted directly to the local courts by the respondents through their private counsels (Raquiza v. Bradford, 75 Phil. 50 [1945]; Miquiabas v. Philippine-Ryukyus Command, 80 Phil. 262 [1948]; United States of America v. Guinto, 182 SCRA 644 [1990] and companion cases). In cases where the foreign states bypass the Foreign Office, the courts can inquire into the facts and make their own determination as to the nature of the acts and transactions involved.[43] (Emphasis supplied.)

The question now is whether any agency of the Executive Branch can make a determination of immunity from suit, which may be considered as conclusive upon the courts. This Court, in Department of Foreign Affairs (DFA) v. National Labor Relations Commission (NLRC),[44] emphasized the DFAs competence and authority to provide such necessary determination, to wit:
The DFAs function includes, among its other mandates, the determination of persons and institutions covered by diplomatic immunities, a determination which, when challenge, (sic) entitles it to seek relief from the court so as not to seriously impair the conduct of the country's foreign relations. The DFA must be allowed to plead its case whenever necessary or advisable to enable it to help keep the credibility of the Philippine government before the

international community. When international agreements are concluded, the parties thereto are deemed to have likewise accepted the responsibility of seeing to it that their agreements are duly regarded. In our country, this task falls principally of (sic) the DFA as being the highest executive department with the competence and authority to so act in this aspect of the international arena.[45] (Emphasis supplied.)

Further, the fact that this authority is exclusive to the DFA was also emphasized in this Courts ruling in Deutsche Gesellschaft:
It is to be recalled that the Labor Arbiter, in both of his rulings, noted that it was imperative for petitioners to secure from the Department of Foreign Affairs a certification of respondents diplomatic status and entitlement to diplomatic privileges including immunity from suits. The requirement might not necessarily be imperative. However, had GTZ obtained such certification from the DFA, it would have provided factual basis for its claim of immunity that would, at the very least, establish a disputable evidentiary presumption that the foreign party is indeed immune which the opposing party will have to overcome with its own factual evidence. We do not see why GTZ could not have secured such certification or endorsement from the DFA for purposes of this case. Certainly, it would have been highly prudential for GTZ to obtain the same after the Labor Arbiter had denied the motion to dismiss. Still, even at this juncture, we do not see any evidence that the DFA, the office of the executive branch in charge of our diplomatic relations, has indeed endorsed GTZs claim of immunity. It may be possible that GTZ tried, but failed to secure such certification, due to the same concerns that we have discussed herein. Would the fact that the Solicitor General has endorsed GTZs claim of States immunity from suit before this Court sufficiently substitute for the DFA certification? Note that the rule in public international law quoted in Holy See referred to endorsement by the Foreign Office of the State where the suit is filed, such foreign office in the Philippines being the Department of Foreign Affairs. Nowhere in the Comment of the OSG is it manifested that the DFA has endorsed GTZs claim, or that the OSG had solicited the DFAs views on the issue. The arguments raised by the OSG are virtually the same as the arguments raised by GTZ without any indication of any special and distinct perspective maintained by the Philippine government on the issue. The Comment filed by the OSG does not inspire the same degree of confidence as a certification from the DFA would have elicited.[46] (Emphasis supplied.)

In the case at bar, CNMEG offers the Certification executed by the Economic and Commercial Office of the Embassy of the Peoples Republic of China, stating that the

Northrail Project is in pursuit of a sovereign activity.[47] Surely, this is not the kind of certification that can establish CNMEGs entitlement to immunity from suit, as Holy See unequivocally refers to the determination of the Foreign Office of the state where it is sued. Further, CNMEG also claims that its immunity from suit has the executive endorsement of both the OSG and the Office of the Government Corporate Counsel (OGCC), which must be respected by the courts. However, as expressly enunciated in Deutsche Gesellschaft, this determination by the OSG, or by the OGCC for that matter, does not inspire the same degree of confidence as a DFA certification. Even with a DFA certification, however, it must be remembered that this Court is not precluded from making an inquiry into the intrinsic correctness of such certification.

An agreement to submit any dispute to arbitration may be construed as an implicit waiver of immunity from suit.
D.

In the United States, the Foreign Sovereign Immunities Act of 1976 provides for a waiver by implication of state immunity. In the said law, the agreement to submit disputes to arbitration in a foreign country is construed as an implicit waiver of immunity from suit. Although there is no similar law in the Philippines, there is reason to apply the legal reasoning behind the waiver in this case. The Conditions of Contract,[48] which is an integral part of the Contract Agreement,[49] states:
33. SETTLEMENT OF DISPUTES AND ARBITRATION

33.1. Amicable Settlement

Both parties shall attempt to amicably settle all disputes or controversies arising from this Contract before the commencement of arbitration.

33.2. Arbitration

All disputes or controversies arising from this Contract which cannot be settled between the Employer and the Contractor shall be submitted to arbitration in accordance with the UNCITRAL Arbitration Rules at present in force and as may be amended by the rest of this Clause. The appointing authority shall be Hong Kong International Arbitration Center. The place of arbitration shall be in Hong Kong at Hong Kong International Arbitration Center (HKIAC).

Under the above provisions, if any dispute arises between Northrail and CNMEG, both parties are bound to submit the matter to the HKIAC for arbitration. In case the HKIAC makes an arbitral award in favor of Northrail, its enforcement in the Philippines would be subject to the Special Rules on Alternative Dispute Resolution (Special Rules). Rule 13 thereof provides for the Recognition and Enforcement of a Foreign Arbitral Award. Under Rules 13.2 and 13.3 of the Special Rules, the party to arbitration wishing to have an arbitral award recognized and enforced in the Philippines must petition the proper regional trial court (a) where the assets to be attached or levied upon is located; (b) where the acts to be enjoined are being performed; (c) in the principal place of business in the Philippines of any of the parties; (d) if any of the parties is an individual, where any of those individuals resides; or (e) in the National Capital Judicial Region. From all the foregoing, it is clear that CNMEG has agreed that it will not be afforded immunity from suit. Thus, the courts have the competence and jurisdiction to ascertain the validity of the Contract Agreement.

Second issue: Whether the Contract Agreement is an executive agreement

Article 2(1) of the Vienna Convention on the Law of Treaties (Vienna Convention) defines a treaty as follows:
[A]n international agreement concluded between States in written form and governed by international law, whether embodied in a single instrument or in two or more related instruments and whatever its particular designation.

In Bayan Muna v. Romulo, this Court held that an executive agreement is similar to a treaty, except that the former (a) does not require legislative concurrence; (b) is usually less formal; and (c) deals with a narrower range of subject matters.[50] Despite these differences, to be considered an executive agreement, the following three requisites provided under the Vienna Convention must nevertheless concur: (a) the agreement must be between states; (b) it must be written; and (c) it must governed by international law. The first and the third requisites do not obtain in the case at bar.

A. CNMEG is neither a government nor a government agency.

The Contract Agreement was not concluded between the Philippines and China, but between Northrail and CNMEG.[51] By the terms of the Contract Agreement, Northrail is a government-owned or -controlled corporation, while CNMEG is a corporation duly organized and created under the laws of the Peoples Republic of China.

[52] Thus, both Northrail and CNMEG entered into the Contract Agreement as entities with personalities distinct and separate from the Philippine and Chinese governments, respectively. Neither can it be said that CNMEG acted as agent of the Chinese government. As previously discussed, the fact that Amb. Wang, in his letter dated 1 October 2003,[53] described CNMEG as a state corporation and declared its designation as the Primary Contractor in the Northrail Project did not mean it was to perform sovereign functions on behalf of China. That label was only descriptive of its nature as a state-owned corporation, and did not preclude it from engaging in purely commercial or proprietary ventures.

B. The Contract Agreement is to be governed by Philippine law.

Article 2 of the Conditions of Contract,[54] which under Article 1.1 of the Contract Agreement is an integral part of the latter, states:
APPLICABLE LAW AND GOVERNING LANGUAGE

The contract shall in all respects be read and construed in accordance with the laws of the Philippines.

The contract shall be written in English language. All correspondence and other documents pertaining to the Contract which are exchanged by the parties shall be written in English language.

Since the Contract Agreement explicitly provides that Philippine law shall be applicable, the parties have effectively conceded that their rights and obligations thereunder are not governed by international law. It is therefore clear from the foregoing reasons that the Contract Agreement does not partake of the nature of an executive agreement. It is merely an ordinary commercial contract that can be questioned before the local courts. WHEREFORE, the instant Petition is DENIED. Petitioner China National Machinery & Equipment Corp. (Group) is not entitled to immunity from suit, and the Contract Agreement is not an executive agreement. CNMEGs prayer for the issuance of a TRO and/or Writ of Preliminary Injunction is DENIED for being moot and academic. This case is REMANDED to the Regional Trial Court of Makati, Branch 145, for further proceedings as regards the validity of the contracts subject of Civil Case No. 06-203. No pronouncement on costs of suit. SO ORDERED.