EN BANC

PROF. RANDOLF S. DAVID, LORENZO TAADA III, RONALD LLAMAS, H. HARRY L. ROQUE, JR., JOEL RUIZ BUTUYAN, ROGER R. RAYEL, GARY S. MALLARI, ROMEL REGALADO BAGARES, CHRISTOPHER F.C. BOLASTIG, Petitioners, - versus GLORIA MACAPAGALARROYO, AS PRESIDENT AND COMMANDER-IN-CHIEF, EXECUTIVE SECRETARY EDUARDO ERMITA, HON. AVELINO CRUZ II, SECRETARY OF NATIONAL DEFENSE, GENERAL GENEROSO SENGA, CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES, DIRECTOR GENERAL ARTURO LOMIBAO, CHIEF, PHILIPPINE NATIONAL POLICE, Respondents. x-------------------------------------------------x NIEZ CACHO-OLIVARES AND TRIBUNE PUBLISHING CO., INC., Petitioners, - versus HONORABLE SECRETARY EDUARDO ERMITA AND HONORABLE DIRECTOR GENERAL ARTURO C. LOMIBAO, Respondents. x-------------------------------------------------x FRANCIS JOSEPH G. ESCUDERO, JOSEPH A. SANTIAGO, TEODORO A. CASINO, AGAPITO A. AQUINO, MARIO J. AGUJA, SATUR C. OCAMPO, MUJIV S. HATAMAN, JUAN EDGARDO ANGARA, TEOFISTO DL. GUINGONA III, G.R. No. 171396 Present: PANGANIBAN, C.J.,
*PUNO,

QUISUMBING, YNARES-SANTIAGO, SANDOVALGUTIERREZ, CARPIO, AUSTRIA-MARTINEZ, CORONA, CARPIO MORALES, CALLEJO, SR., AZCUNA, TINGA, CHICO-NAZARIO, GARCIA, and VELASCO, JJ. Promulgated: May 3, 2006 G.R. No. 171409

EMMANUEL JOSEL J. VILLANUEVA, LIZA L. MAZA, IMEE R. MARCOS, RENATO B. MAGTUBO, JUSTIN MARC SB. CHIPECO, ROILO GOLEZ, DARLENE ANTONINO-CUSTODIO, LORETTA ANN P. ROSALES, JOSEL G. VIRADOR, RAFAEL V. MARIANO, GILBERT C. REMULLA, FLORENCIO G. NOEL, ANA THERESIA HONTIVEROS-BARAQUEL, IMELDA C. NICOLAS, MARVIC M.V.F. LEONEN, NERI JAVIER COLMENARES, MOVEMENT OF CONCERNED CITIZENS FOR CIVIL LIBERTIES REPRESENTED BY AMADO GAT INCIONG, Petitioners, - versus EDUARDO R. ERMITA, EXECUTIVE SECRETARY, AVELINO J. CRUZ, JR., SECRETARY, DND RONALDO V. PUNO, SECRETARY, DILG, GENEROSO SENGA, AFP CHIEF OF STAFF, ARTURO LOMIBAO, CHIEF PNP, Respondents. x-------------------------------------------------x KILUSANG MAYO UNO, REPRESENTED BY ITS CHAIRPERSON ELMER C. LABOG AND SECRETARY GENERAL JOEL MAGLUNSOD, NATIONAL FEDERATION OF LABOR UNIONS KILUSANG MAYO UNO (NAFLU-KMU), REPRESENTED BY ITS NATIONAL PRESIDENT, JOSELITO V. USTAREZ, ANTONIO C. PASCUAL, SALVADOR T. CARRANZA, EMILIA P. DAPULANG, MARTIN CUSTODIO, JR., AND ROQUE M. TAN, Petitioners,

G.R. No. 171483

G.R. No. 171485 - versus -

HER EXCELLENCY, PRESIDENT GLORIA MACAPAGAL-ARROYO, THE HONORABLE EXECUTIVE SECRETARY, EDUARDO ERMITA, THE CHIEF OF STAFF, ARMED FORCES OF THE PHILIPPINES, GENEROSO SENGA, AND THE PNP DIRECTOR GENERAL, ARTURO LOMIBAO, Respondents. x-------------------------------------------------x ALTERNATIVE LAW GROUPS, INC. (ALG), Petitioner, - versus G.R. No. 171400 EXECUTIVE SECRETARY EDUARDO R. ERMITA, LT. GEN. GENEROSO SENGA, AND DIRECTOR GENERAL ARTURO LOMIBAO, Respondents. x-------------------------------------------------x JOSE ANSELMO I. CADIZ, FELICIANO M. BAUTISTA, ROMULO R. RIVERA, JOSE AMOR M. AMORADO, ALICIA A. RISOSVIDAL, FELIMON C. ABELITA III, MANUEL P. LEGASPI, J.B. JOVY C. BERNABE, BERNARD L. DAGCUTA, ROGELIO V. GARCIA AND INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioners, - versus HON. EXECUTIVE SECRETARY EDUARDO ERMITA, GENERAL GENEROSO SENGA, IN HIS CAPACITY AS AFP CHIEF OF STAFF, AND DIRECTOR GENERAL ARTURO LOMIBAO, IN HIS CAPACITY AS PNP CHIEF, Respondents. x-------------------------------------------------x LOREN B. LEGARDA, Petitioner,

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

G.R. No. 171424

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

DECISION SANDOVAL-GUTIERREZ, J.:

All powers need some restraint; practical adjustments rather than G.R. No. 171489 rigid formula are necessary.[1] Superior strength the use of force cannot make wrongs into rights. In this regard, the courts should be vigilant in safeguarding the constitutional rights of the citizens, specifically their liberty. Chief Justice Artemio V. Panganibans philosophy of liberty is thus most relevant. He said: In cases involving liberty, the scales of justice should weigh heavily against government and in favor of the poor, the oppressed, the marginalized, the dispossessed and the weak. Laws and actions that restrict fundamental rights come to the courts with a heavy presumption against their constitutional validity.[2]

These seven (7) consolidated petitions for certiorari and prohibition allege that in issuing Presidential Proclamation No. 1017 (PP

17, Article 12 of the Constitution do hereby declare a State of National Emergency.

1017) and General Order No. 5 (G.O. No. 5), President Gloria MacapagalArroyo committed grave abuse of discretion. Petitioners contend that respondent officials of the Government, in their professed efforts to defend and preserve democratic institutions, are actually trampling upon the very freedom guaranteed and protected by the Constitution. Hence, such issuances are void for being unconstitutional.

She cited the following facts as bases: WHEREAS, over these past months, elements in the political opposition have conspired with authoritarians of the extreme Left represented by the NDF-CPP-NPA and the extreme Right, represented by military adventurists the historical enemies of the democratic Philippine State who are now in a tactical alliance and engaged in a concerted and systematic conspiracy, over a broad front, to bring down the duly constituted Government elected in May 2004; WHEREAS, these conspirators have repeatedly tried to bring down the President; WHEREAS, the claims of these elements have been recklessly magnified by certain segments of the national media; WHEREAS, this series of actions is hurting the Philippine State by obstructing governance including hindering the growth of the economy and sabotaging the peoples confidence in government and their faith in the future of this country; WHEREAS, these actions are adversely affecting the economy; WHEREAS, these activities give totalitarian forces of both the extreme Left and extreme Right the opening to intensify their avowed aims to bring down the democratic Philippine State; WHEREAS, Article 2, Section 4 of the our Constitution makes the defense and preservation of the democratic institutions and the State the primary duty of Government; WHEREAS, the activities above-described, their consequences, ramifications and collateral effects constitute a clear and present dangerto the safety and the integrity of the Philippine State and of the Filipino people;

Once again, the Court is faced with an age-old but persistently modern problem. How does the Constitution of a free people combine the degree

of liberty, without which, law becomes tyranny, with the degree of law, without which, liberty becomes license?[3]

On February 24, 2006, as the nation celebrated the 20 th Anniversary of the Edsa People Power I, President Arroyo issued PP 1017 declaring a state of national emergency, thus: NOW, THEREFORE, I, Gloria Macapagal-Arroyo, President of the Republic of the Philippines and Commander-in-Chief of the Armed Forces of the Philippines, by virtue of the powers vested upon me by Section 18, Article 7 of the Philippine Constitution which states that: The President. . . whenever it becomes necessary, . . . may call out (the) armed forces to prevent or suppress. . .rebellion. . ., and in my capacity as their Commander-in-Chief, do hereby command the Armed Forces of the Philippines, to maintain law and order throughout the Philippines, prevent or suppress all forms of lawless violence as well as any act of insurrection or rebellion and to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or upon my direction; and as provided in Section

On the same day, the President issued G. O. No. 5 implementing PP 1017, thus: WHEREAS, over these past months, elements in the political opposition have conspired with authoritarians of the extreme Left, represented by the NDF-CPP-NPA and the extreme Right, represented by military adventurists the historical enemies of the democratic Philippine State and who are now in a tactical alliance and engaged in a concerted and systematic conspiracy, over a broad front, to bring down the duly-constituted Government elected in May 2004; WHEREAS, these conspirators have repeatedly tried to bring down our republican government; WHEREAS, the claims of these elements have been recklessly magnified by certain segments of the national media; WHEREAS, these series of actions is hurting the Philippine State by obstructing governance, including hindering the growth of the economy and sabotaging the peoples confidence in the government and their faith in the future of this country; WHEREAS, these actions are adversely affecting the economy; WHEREAS, these activities give totalitarian forces; of both the extreme Left and extreme Right the opening to intensify their avowed aims to bring down the democratic Philippine State; WHEREAS, Article 2, Section 4 of our Constitution makes the defense and preservation of the democratic institutions and the State the primary duty of Government; WHEREAS, the activities above-described, their consequences, ramifications and collateral effects constitute a clear and present danger to the safety and the integrity of the Philippine State and of the Filipino people; WHEREAS, Proclamation 1017 date February 24, 2006 has been issued declaring a State of National Emergency;

NOW, THEREFORE, I GLORIA MACAPAGALARROYO, by virtue of the powers vested in me under the Constitution as President of the Republic of the Philippines, and Commander-in-Chief of the Republic of the Philippines, and pursuant to Proclamation No. 1017 dated February 24, 2006, do hereby call upon the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP), to prevent and suppress acts of terrorism and lawless violence in the country; I hereby direct the Chief of Staff of the AFP and the Chief of the PNP, as well as the officers and men of the AFP and PNP, to immediately carry out the necessary and appropriate actions and measures to suppress and prevent acts of terrorism and lawless violence.

On March 3, 2006, exactly one week after the declaration of a state of national emergency and after all these petitions had been filed, the President lifted PP 1017. She issued Proclamation No. 1021 which reads: WHEREAS, pursuant to Section 18, Article VII and Section 17, Article XII of the Constitution, Proclamation No. 1017 dated February 24, 2006, was issued declaring a state of national emergency; WHEREAS, by virtue of General Order No.5 and No.6 dated February 24, 2006, which were issued on the basis of Proclamation No. 1017, the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP), were directed to maintain law and order throughout the Philippines, prevent and suppress all form of lawless violence as well as any act of rebellion and to undertake such action as may be necessary; WHEREAS, the AFP and PNP have effectively prevented, suppressed and quelled the acts lawless violence and rebellion; NOW, THEREFORE, I, GLORIA MACAPAGALARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by law, hereby declare that the state of national emergency has ceased to exist.

the sham regime. Let us demonstrate our disgust, not only by going to the
In their presentation of the factual bases of PP 1017 and G.O. No. 5, respondents stated that the proximate cause behind the executive issuances was the conspiracy among some military officers, leftist insurgents of the New Peoples Army (NPA), and some members of the political opposition in a plot to unseat or assassinate President Arroyo.[4] They considered the aim to On February 17, 2006, the authorities got hold of a document entitled Oplan Hackle I which detailed plans for bombings and attacks during the Philippine Military Academy Alumni Homecoming in Baguio City. The plot was to assassinate selected targets including some cabinet members and President Arroyo herself.[6] Upon the advice of her security, President Arroyo decided not to attend the Alumni Homecoming. The next During the oral arguments held on March 7, 2006, the Solicitor General specified the facts leading to the issuance of PP 1017 and No. 5. Significantly, there was no refutation from petitioners counsels. On February 21, 2006, Lt. San Juan was recaptured in a communist The Solicitor General argued that the intent of the Constitution is to give full discretionary powers to the President in determining the necessity of calling out the armed forces. He emphasized that none of the petitioners has shown that PP 1017 was without factual bases. While he explained that it is not respondents task to state the facts behind the questioned Proclamation, however, they are presenting the same, narrated hereunder, for the elucidation of the issues. On and January 17, 2006, Captain Nathaniel Rabonza On February 23, 2006, PNP Chief Arturo Lomibao intercepted information that members of the PNP- Special Action Force were planning to defect. Thus, he immediately ordered SAF Commanding General Marcelino Franco, Jr. to disavow any defection. The latter promptly obeyed and issued a public statement: All SAF units are under the effective control of safehouse in Batangas province. Found in his possession were two (2) flash disks containing minutes of the meetings between members of the Magdalo Group and the National Peoples Army (NPA), a tape recorder, audio cassette cartridges, diskettes, and copies of subversive documents. [7] Prior to his arrest, Lt. San Juan announced through DZRH that the Magdalos D-Day G.O. day, at the height of the celebration, a bomb was found and detonated at the PMA parade ground.

streets in protest, but also by wearing red bands on our left arms. [5]

oust or assassinate the President and take-over the reigns of government as a clear and present danger.

would be on February 24, 2006, the 20th Anniversary of Edsa I.

First Lieutenants Sonny Sarmiento, Lawrence San Juan and

Patricio Bumidang, members of the Magdalo Group indicted in the Oakwood mutiny, escaped their detention cell in Fort Bonifacio, Taguig City. In a public statement, they vowed to remain defiant and to elude arrest at all costs. They called upon the people to show and proclaim our displeasure at

responsible

and

trustworthy

officers

with

proven

integrity

and

unquestionable loyalty.

On the same day, at the house of former Congressman Peping Cojuangco, President Cory Aquinos brother, businessmen and mid-level government officials plotted moves to bring down the Arroyo

Arroyo regime; of rendering it to weaken and unable to rule that it will not take much longer to end it.[9]

administration. Nelly Sindayen of TIME Magazine reported that Pastor Saycon, longtime Arroyo critic, called a U.S. government official about his groups plans if President Arroyo is ousted. Saycon also phoned a man codenamed Delta. Saycon identified him as B/Gen. Danilo Lim, Commander of the Armys elite Scout Ranger. Lim said it was all systems go for the planned

On the other hand, Cesar Renerio, spokesman for the National Democratic Front (NDF) at North Central Mindanao, publicly announced: Anti-Arroyo groups within the military and police are growing rapidly,

hastened by the economic difficulties suffered by the families of AFP officers and enlisted personnel who undertake counter-insurgency operations in the field. He claimed that with the forces of the national democratic movement,
the anti-Arroyo conservative political parties, coalitions, plus the groups that

movement against Arroyo.[8]

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

have been reinforcing since June 2005, it is probable that the Presidents ouster is nearing its concluding stage in the first half of 2006.

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

President. However, Gen. Senga has remained faithful to his Commanderin-Chief and to the chain of command. He immediately took custody of B/Gen. Lim and directed Col. Querubin to return to the Philippine Marines Headquarters in Fort Bonifacio.

By midnight of February 23, 2006, the President convened her Earlier, the CPP-NPA called for intensification of political and revolutionary work within the military and the police establishments in order to forge alliances with its members and key officials. NPA spokesman Gregorio Ka Roger Rosal declared: The security advisers and several cabinet members to assess the gravity of the fermenting peace and order situation. She directed both the AFP and the PNP to account for all their men and ensure that the chain of command remains solid and undivided. To protect the young students from any possible trouble that might break loose on the streets, the President suspended classes in all levels in the entire National Capital Region.

Communist

Party

and

revolutionary movement and the entire people look forward to the possibility in the coming year of accomplishing its immediate task of bringing down the

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

During the dispersal of the rallyists along EDSA, police arrested (without warrant) petitioner Randolf S. David, a professor at the University of the Philippines and newspaper columnist. Also arrested was his

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

companion, Ronald Llamas, president of party-listAkbayan.

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

media, can already be implemented.[11]

Undeterred by the announcements that rallies and public assemblies would not be allowed, groups of protesters (members of Kilusang Mayo

were stationed outside the building.[13]

Uno [KMU] and National Federation of Labor Unions-Kilusang Mayo Uno [NAFLU-KMU]), marched from various parts of Metro Manila with the
intention of converging at the EDSA shrine. Those who were already near the EDSA site were violently dispersed by huge clusters of anti-riot police. The well-trained policemen used truncheons, big fiber glass shields, water cannons, and tear gas to stop and break up the marching groups, and scatter the massed participants. The same police action was used against the protesters marching forward to Cubao, Quezon City and to the corner of Santolan Street and EDSA. That same evening, hundreds of riot policemen broke up an EDSA celebration rally held along Ayala Avenue and Paseo de Roxas Street in Makati City.[12]

A few minutes after the search and seizure at the Daily

Tribune offices, the police surrounded the premises of another pro-opposition

paper, Malaya, and its sister publication, the tabloid Abante.

The raid, according to Presidential Chief of Staff Michael Defensor, is meant to show a strong presence, to tell media outlets not to

connive or do anything that would help the rebels in bringing down this government. The PNP warned that it would take over any media
organization that would not follow standards set by the government during

the state of national emergency. Director General Lomibao stated that if they do not follow the standards and the standards are - if they would contribute to instability in the government, or if they do not subscribe to

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

what is in General Order No. 5 and Proc. No. 1017 we will recommend a takeover. National Telecommunications Commissioner Ronald Solis urged

television and radio networks tocooperate with the government for the duration of the state of national emergency. He asked for balanced

Attempts were made to arrest Anakpawis Representative Satur Ocampo, Teodoro Representative Casio and Rafael Gabriela Mariano, Bayan Representative

MunaRepresentative
Liza Maza. Bayan

reporting from broadcasters when covering the events surrounding the coup
attempt foiled by the government. He warned that his agency will not hesitate to recommend the closure of any broadcast outfit that violates rules set out for media coverage when the national security is threatened. [14]

Muna Representative Josel Virador was arrested at the PAL Ticket Office in
Davao City. Later, he was turned over to the custody of the House of Representatives where the Batasan 5 decided to stay indefinitely.

Also, on February 25, 2006, the police arrested Congressman Crispin Beltran, representing the Anakpawis Party and Chairman of Kilusang Mayo

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

Uno (KMU), while leaving his farmhouse in Bulacan.

The police showed a

warrant for his arrest dated 1985. Beltrans lawyer explained that the warrant, which stemmed from a case of inciting to rebellion filed during the Marcos regime, had long been quashed. Beltran, however, is not a party in any of these petitions. In When members of petitioner KMU went to Camp Crame to visit Beltran, they were told they could not be admitted because of PP 1017 and G.O. No. 5. Two members were arrested and detained, while the rest were dispersed by the police. In G.R. No. 171396, petitioners Randolf S. David, et al. assailed PP the interim, these seven (7) petitions challenging the On March 3, 2006, President Arroyo issued PP 1021 declaring that the state of national emergency has ceased to exist.

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

Bayan Muna Representative Satur Ocampo eluded arrest when the

police went after him during a public forum at the Sulo Hotel in Quezon City. But his two drivers, identified as Roel and Art, were taken into custody.

1017 on the grounds that (1) it encroaches on the emergency powers of Congress; (2) it is a subterfuge to avoid the constitutional requirements for the imposition of martial law; and(3) it violates the constitutional guarantees of freedom of the press, of speech and of assembly.

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

In G.R.

No.

171409,

petitioners

Ninez

Cacho-Olivares

and Tribune Publishing Co., Inc. challenged the CIDGs act of raiding the Daily Tribune offices as a clear case of censorship or prior

restraint. They also claimed that the term emergency refers only to tsunami, typhoon, hurricane and similar occurrences, hence, there is absolutely no emergency that warrants the issuance of PP 1017.

In G.R. No. 171489, petitioners Jose Anselmo I. Cadiz et al., alleged that PP 1017 is an arbitrary and unlawful exercise by the President of her

Martial Law powers. And assuming that PP 1017 is not really a declaration
of Martial Law, petitioners argued that it amounts to an exercise by the

In G.R. No. 171485, petitioners herein are Representative Francis Joseph G. Escudero, and twenty one (21) other members of the House of Representatives, including Representatives Satur Ocampo, Rafael Mariano, Teodoro Casio, Liza Maza, and Josel Virador. They asserted that PP 1017 and G.O. No. 5 constitute usurpation of legislative powers; violation of

President of emergency powers without congressional approval. In addition,

petitioners asserted that PP 1017 goes beyond the nature and function of a

proclamation as defined under the Revised Administrative Code.

And

lastly,

in G.R.

No.

171424, petitioner Loren

B.

Legarda

freedom of expression and a declaration of martial law. They alleged that

President Arroyo gravely abused her discretion in calling out the armed

maintained that PP 1017 and G.O. No. 5 are unconstitutional for being

violative of the freedom of expression, including its cognate rights such as freedom of the press and the right to access to information on matters of public concern, all guaranteed under Article III, Section 4 of the 1987 Constitution. In this regard, she stated that these issuances prevented her

forces without clear and verifiable factual basis of the possibility of lawless violence and a showing that there is necessity to do so.

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

from fully prosecuting her election protest pending before the Presidential Electoral Tribunal.

In respondents Consolidated Comment, the Solicitor General countered that: first, the being petitions should be dismissed for

moot; second, petitioners in G.R. Nos. 171400 (ALGI), 171424

(Legarda), 171483 (KMU et al.), 171485 (Escudero et al.) and 171489 In G.R. No. 171400, petitioner Alternative Law Groups, Inc. (ALGI) alleged that PP 1017 and G.O. No. 5 are unconstitutional because they violate (a) Section 4[15] of Article II, (b) Sections 1,[16] 2,[17] and 4[18] of Article (Cadiz et al.) have no legal standing; third, it is not necessary for petitioners to implead President Arroyo as respondent; fourth, PP 1017 has

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

III, (c) Section 23[19] of Article VI, and (d) Section 17[20] of Article XII of the Constitution.

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

A.

PROCEDURAL: 1) Whether the issuance of PP 1021 renders the

courts exercise. This is the beginning and the end of the theory of judicial review.[22]

petitions moot and academic. 2) Whether Nos. petitioners in 171485 (Escudero et

But the power of judicial review does not repose upon the courts a selfstarting capacity.[23] Courts may exercise such power only when the following requisites are present: first, there must be an actual case or controversy; second, petitioners have to raise a question of

al.), G.R.

171400 (ALGI), 171483 (KMU et

al.),171489 (Cadiz et al.), and 171424 (Legarda) have legal

standing. B. SUBSTANTIVE: 1) Whether the Supreme Court can review the

constitutionality; third, the constitutional question must be raised at the earliest opportunity; and fourth, the decision of the constitutional question must be necessary to the determination of the case itself.[24]

factual bases of PP 1017. 2) Whether PP 1017 and G.O. No. 5 are a. Facial Challenge b. Constitutional Basis c. As Applied Challenge A. PROCEDURAL First, we must resolve the procedural roadblocks. Respondents maintain that the first and second requisites are absent, hence, we shall limit our discussion thereon.

unconstitutional.

An actual case or controversy involves a conflict of legal right, an opposite legal claims susceptible of judicial resolution. It is definite and concrete, legal touching the legal relations of parties having adverse

interest; a real and substantial controversy admitting of specific

I- Moot and Academic Principle

relief.[25] The Solicitor General refutes the existence of such actual case or controversy, contending that the present petitions were rendered moot and academic by President Arroyos issuance of PP 1021.

One of the greatest contributions of the American system to this country is the concept of judicial review enunciated inMarbury v. Madison.[21] This concept rests on the extraordinary simple foundation -The Constitution is the supreme law. It was ordained by the people, the ultimate source of all political authority. It confers limited powers on the national government. x x x If the government consciously or unconsciously oversteps these limitations there must be some authority competent to hold it in control, to thwart its unconstitutional attempt, and thus to vindicate and preserve inviolate the will of the people as expressed in the Constitution. This power the

Such contention lacks merit.

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

10

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

guarantees.[35] And lastly, respondents contested actions are capable of repetition. Certainly, the petitions are subject to judicial review.

In their attempt to prove the alleged mootness of this case, respondents cited Chief Justice Artemio V. Panganibans Separate Opinion in Sanlakas v. Executive Secretary.[36] However, they failed to take into account the Chief Justices very statement that an otherwise moot case may still be decided provided the party raising it in a proper case has been and/or

continues to be prejudiced or damaged as a direct result of its issuance. The

present case falls right within this exception to the mootness rule pointed out

The moot and academic principle is not a magical formula that can automatically dissuade the courts in resolving a case. Courts will decide cases, otherwise moot and academic, if: first, there is a grave violation of the Constitution;[31]

by the Chief Justice.

II- Legal Standing

second, the exceptional character of the situation and the

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

paramount public interest is involved;[32] third, when constitutional issue raised requires formulation of controlling principles to guide the bench, the bar, and the public;[33] and fourth, the case is capable of repetition yet evading review.[34]

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

All the foregoing exceptions are present here and justify this Courts assumption of jurisdiction over the instant petitions. Petitioners alleged that the issuance of PP 1017 and G.O. No. 5 violates the Constitution. There is no question that the issues being raised affect the publics interest, involving as they do the peoples basic rights to freedom of expression, of assembly and of the press. Moreover, the Court has the duty to formulate guiding and controlling constitutional precepts, doctrines or rules. It has the symbolic function of educating the bench and the bar, and in the present petitions, the military and the police, on the extent of the protection given by constitutional a given question.[37] In private suits, standing is governed by the realparties-in interest rule as contained in Section 2, Rule 3 of the 1997 Rules of Civil Procedure, as amended. It provides that every action must be prosecuted or defended in the name of the real party in

interest. Accordingly, the real-party-in interest is the party who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit.[38] Succinctly put, the plaintiffs standing is based on his own right to the relief sought.

11

The suits.

difficulty

of

determining locus

standi arises

in public

injury test in Ex

Parte

Levitt,[42] later

reaffirmed

in Tileston

v.

Here, the plaintiff who asserts a public right in assailing an

Ullman.[43]

The same Court ruled that for a private individual to invoke the

allegedly illegal official action, does so as a representative of the general public. He may be a person who is affected no differently from any other person. He could be suing as a stranger, or in the category of a citizen, or taxpayer. In either case, he has to adequately show that he is entitled to seek judicial protection. In other words, he has to make out a sufficient interest in the vindication of the public order and the securing of relief as a citizen or taxpayer.

judicial power to determine the validity of an executive or legislative action, he must show that he has sustained a direct injury as a result of that action, and it is not sufficient that he has a general interest common to all members of the public.

This

Court

adopted

the direct

injury

test in

our

jurisdiction. In People v. Vera,[44] it held that the person who impugns the validity of a statute must have a personal and substantial interest in the

Case law in most jurisdictions now allows both citizen and taxpayer standing in public actions. The distinction was first laid down

case such that he has sustained, or will sustain direct injury as a result. The Vera doctrine was upheld in a litany of cases, such as, Custodio

in Beauchamp v. Silk,[39] where it was held that the plaintiff in a taxpayers suit is in a different category from the plaintiff in a citizens suit. In the former, the plaintiff is affected by the expenditure of public funds, while in the latter, he is but the mere instrument of the public concern. As held by the New York Supreme Court in People ex rel Case v. Collins:[40] In matter of mere public right, howeverthe people are the real partiesIt is at least the right, if not the duty, of every citizen to interfere and see that a public offence be properly pursued and punished, and that a public grievance be remedied. With respect to taxpayers suits, Terr v. Jordan[41] held that the right of a citizen and a taxpayer to maintain an action in courts to restrain the unlawful use of public funds to his injury cannot be denied.

v. President of the Senate,[45]Manila Race Horse Trainers Association v. De la Fuente,[46] Pascual v. Secretary of Public Works[47] and Anti-Chinese League of the Philippines v. Felix.[48]

However, being a mere procedural technicality, the requirement of locus standi may be waived by the Court in the exercise of its discretion. This was done in the 1949 Emergency Powers Cases, Araneta

v.

Dinglasan,[49]

where the transcendental importance of the cases prompted

the Court to act liberally. Such liberality was neither a rarity nor accidental. In Aquino v. Comelec,[50] this Court resolved to pass upon the issues raised due to the far-reaching implications of the petition notwithstanding its categorical statement that petitioner therein had no

However, to prevent just about any person from seeking judicial interference in any official policy or act with which he disagreed with, and thus hinders the activities of governmental agencies engaged in public service, the United State Supreme Court laid down the more stringent direct

personality to file the suit. Indeed, there is a chain of cases where this liberal policy has been observed, allowing ordinary citizens, members of Congress, and civic organizations to prosecute actions involving the constitutionality or validity of laws, regulations and rulings.[51]

12

Thus, the Court has adopted a rule that even where the petitioners have failed to show direct injury, they have been allowed to sue under the principle of transcendental importance. Pertinent are the following cases: (1) Chavez v. Public Estates Authority,[52] where the Court ruled that the enforcement of the constitutional right to information and the equitable diffusion of natural resources are matters of transcendental importance which clothe the petitioner with locus standi;

(3)

for voters, there must be a showing of obvious interest in the validity of the election law in question;

(4)

for concerned citizens, there must be a showing that the issues raised are of transcendental importance which must be settled early; and

Zamora,[53] wherein

(2) Bagong

Alyansang

Makabayan

v.

(5)

for legislators, there must be a claim that the official action complained of infringes upon their prerogatives as legislators.

the Court held that given the transcendental importance of the issues involved, the Court may relax the standing requirements and allow the suit to prosper despite the lack of direct injury to the parties seeking judicial review of the Visiting Forces Agreement; (3) Lim v. Executive Secretary,[54] while the Court noted that the petitioners may not file suit in their capacity as taxpayers absent a showing that Balikatan 02-01 involves the exercise of Congress taxing or spending powers, it reiterated its ruling in Bagong Alyansang Makabayan v. Zamora,[55] that in cases of transcendental importance, the cases must be settled promptly and definitely and standing requirements may be relaxed.

Significantly, recent decisions show a certain toughening in the Courts attitude toward legal standing.

In Kilosbayan, Inc. v. Morato,[56] the Court ruled that the status of Kilosbayan as a peoples organization does not give it the requisite personality to question the validity of the on-line lottery contract, more so where it does not raise any issue of constitutionality. Moreover, it cannot sue as a taxpayer absent any allegation that public funds are being misused. Nor

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

can it sue as a concerned citizen as it does not allege any specific injury it has suffered.

In Telecommunications and Broadcast Attorneys of the Philippines, Inc.

v. Comelec,[57] the Court reiterated the direct injury test with respect to
(1) (2) the cases involve constitutional issues; for taxpayers, there must be a claim of illegal disbursement of public funds or that the tax measure is unconstitutional; concerned citizens cases involving constitutional issues. It held that there must be a showing that the citizen personally suffered some actual or threatened injury arising from the alleged illegal official act.

13

In Lacson

v.

Perez,[58] the

Court

ruled

that

one

of

the

bringing to the attention of the Court the alleged violations of their basic rights.

petitioners, Laban ng Demokratikong Pilipino (LDP), is not a real party-ininterest as it had not demonstrated any injury to itself or to its leaders, members or supporters.

In G.R. No. 171400, (ALGI), this Court applied the liberality rule in Philconsa v. Enriquez,[60] Kapatiran Ng Mga Naglilingkod sa Pamahalaan

In Sanlakas v. Executive Secretary,[59] the Court ruled that only the petitioners who are members of Congress have standing to sue, as they claim that the Presidents declaration of a state of rebellion is a usurpation of the emergency powers of Congress, thus impairing their legislative powers. As to petitioners Sanlakas, Partido Manggagawa, and Social Justice Society, the Court declared them to be devoid of standing, equating them with the LDP in Lacson.

ng Pilipinas, Inc. v. Tan,[61] Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform,[62] Basco v. Philippine Amusement and Gaming Corporation,[63] and Taada v. Tuvera,[64] that
when the issue concerns a public right, it is sufficient that the petitioner is a citizen and has an interest in the execution of the laws.

In G.R. No. 171483, KMUs assertion that PP 1017 and G.O. No. 5 violated its right to peaceful assembly may be deemed sufficient to give it

Now, the application of the above principles to the present petitions.

legal standing. Organizations may be granted standing to assert the rights of their members.[65] We take judicial notice of the announcement by the

The locus standi of petitioners in G.R. No. 171396, particularly David and Llamas, is beyond doubt. The same holds true with petitioners in G.R. No. 171409, Cacho-Olivares and Tribune Publishing Co. Inc. They alleged direct injury resulting from illegal arrest and unlawful search committed by police operatives pursuant to PP 1017. Rightly so, the Solicitor General does not question their legal standing.

Office of the President banning all rallies and canceling all permits for public assemblies following the issuance of PP 1017 and G.O. No. 5.

In G.R. No. 171489, petitioners, Cadiz et al., who are national officers of the Integrated Bar of the Philippines (IBP) have no legal standing, having failed to allege any direct or potential injury which the IBP as an institution or its members may suffer as a consequence of the issuance of PP

In G.R. No. 171485, the opposition Congressmen alleged there was usurpation of legislative powers. They also raised the issue of whether or not the concurrence of Congress is necessary whenever the alarming powers incident to Martial Law are used. Moreover, it is in the interest of justice that those affected by PP 1017 can be represented by their Congressmen in

No. 1017 and G.O. No. 5. In Integrated Bar of the Philippines v.

Zamora,[66] the Court held that the mere invocation by the IBP of its duty to
preserve the rule of law and nothing more, while undoubtedly true, is not sufficient to clothe it with standing in this case. This is too general an interest which is shared by other groups and the whole citizenry. However, in

14

view of the transcendental importance of the issue, this Court declares that petitioner have locus standi.

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

Incidentally, it is not proper to implead President Arroyo as In G.R. No. 171424, Loren Legarda has no personality as a taxpayer to file the instant petition as there are no allegations of illegal disbursement of public funds. The fact that she is a former Senator is of no consequence. She can no longer sue as a legislator on the allegation that her prerogatives as a lawmaker have been impaired by PP 1017 and G.O. No. 5. Her claim that she is a media personality will not likewise aid her respondent. Settled is the doctrine that the President, during his tenure of office or actual incumbency,[67] may not be sued in any civil or criminal case, and there is no need to provide for it in the Constitution or law. It will degrade the dignity of the high office of the President, the Head of State, if he can be dragged into court litigations while serving as such. Furthermore, it is important that he be freed from any form of harassment, hindrance or distraction to enable him to fully attend to the performance of his official duties and functions. Unlike the legislative and judicial branch, only one constitutes the executive branch and anything which impairs his usefulness in the discharge of the many great and important duties imposed upon him by the Constitution necessarily impairs the operation of the

because there was no showing that the enforcement of these issuances prevented her from pursuing her occupation. Her submission that she has pending electoral protest before the Presidential Electoral Tribunal is likewise of no relevance. She has not sufficiently shown that PP 1017 will affect the proceedings or result of her case. But considering once more the transcendental importance of the issue involved, this Court may relax the standing rules.

Government. However, this does not mean that the President is not accountable to anyone. Like any other official, he remains accountable to the people[68] but he may be removed from office only in the mode provided by law

It must always be borne in mind that the question of locus standi is but corollary to the bigger question of proper exercise of judicial power. This is the underlying legal tenet of the liberality doctrine on legal standing. It cannot be doubted that the validity of PP No. 1017 and G.O. No. 5 is a judicial question which is of paramount importance to the Filipino people. To paraphrase Justice Laurel, the whole of Philippine society now waits with bated breath the ruling of this Court on this very critical matter. The petitions thus call for the application of the transcendental importance doctrine, a relaxation of the standing requirements for the petitioners in the PP 1017 cases.

and that is by impeachment.[69]

B. SUBSTANTIVE

I. Review of Factual Bases

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

15

The issue of whether the Court may review the factual bases of the Presidents exercise of his Commander-in-Chief power has reached its distilled point from the indulgent days of Barcelon

government is in great peril. The President, it intoned, is answerable only to his conscience, the People, and God.[79]

v.
The Integrated Bar of the Philippines v. Zamora[80] -- a recent case most pertinent to these cases at bar -- echoed a principle similar to Lansang. While the Court considered the Presidents calling-out power as a discretionary power solely vested in his wisdom, it stressed that this does not prevent an examination of whether such power was exercised within permissible constitutional limits or whether it was exercised in a manner constituting grave abuse of discretion. This ruling is mainly a result of the

Baker[70]
of Lansang v.

and Montenegro v.

Castaneda[71]

to the volatile era

Garcia,[72] Aquino, Jr. v. Enrile,[73] and Garcia-Padilla v.

Enrile.[74]

The tug-of-war always cuts across the line defining political

questions, particularly those questions in regard to which full discretionary authority has been delegated to the legislative or executive branch of the government.[75] Barcelon and Montenegro were in unison in declaring that the authority to decide whether an exigency has arisen belongs to the President and his decision is final and conclusive on the

Courts reliance on Section 1, Article VIII of 1987 Constitution which fortifies the authority of the courts to determine in an appropriate action the validity of the acts of the political departments. Under the new definition of judicial power, the courts are authorized not only to settle actual controversies involving rights which are legally demandable and enforceable, but also to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. The latter part of the authority represents a broadening of judicial power to enable the courts of justice to review what was before a forbidden territory, to wit, the discretion of the

courts. Lansang took the opposite view. There, the members of the Court were unanimous in the conviction that the Court has the authority to inquire into the existence of factual bases in order to determine their constitutional sufficiency. From the principle of separation of powers, it shifted the focus to the system of checks and balances, under which the President is supreme, x x x only if and when he acts within the sphere allotted to him by the Basic Law, and vested in in the authority to determine whether or not he has so acted is the Judicial turn, Department, which

in this respect, is,

In 1973, the

constitutionally

supreme.[76]

unanimous Court of Lansang was divided in Aquino v. Enrile.[77] There, the Court was validity of the justiciable question.[78] almost evenly divided on the issue of whether the imposition of Martial Law is a political or Then came Garcia-Padilla v. Enrile which greatly

political departments of the government.[81] It speaks of judicial prerogative not only in terms of power but also of duty.[82]

As to how the Court may inquire into the Presidents exercise of power, Lansang adopted the test that judicial inquiry can go no further than to satisfy the Court not that the Presidents decision is correct, but that the President did not act arbitrarily. Thus, the standard laid down is not

dilutedLansang. It declared that there is a need to re-examine the latter case, ratiocinating that in times of war or national emergency, the President must be given absolute control for the very life of the nation and the

16

correctness, but arbitrariness.[83] In Integrated Bar of the Philippines, this Court further ruled that it is incumbent upon the petitioner to show that the Presidents decision is totally bereft of factual basis and that if he fails, by way of proof, to support his assertion, then this Court cannot undertake an independent investigation beyond the pleadings.

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

Doctrines of Several Political Theorists on the Power of the President in Times of Emergency

This case brings to fore a contentious subject -- the power of the President in times of emergency. A glimpse at the various political theories

Petitioners failed to show that President Arroyos exercise of the calling-out power, by issuing PP 1017, is totally bereft of factual basis. A reading of the Solicitor Generals Consolidated Comment and Memorandum shows a detailed narration of the events leading to the issuance of PP 1017, with supporting reports forming part of the records. Mentioned are the escape of the Magdalo Group, their audacious threat of the Magdalo D-Day, the defections in the military, particularly in the Philippine Marines, and the reproving statements from the communist leaders. There was also the Minutes of the Intelligence Report and Security Group of the Philippine Army showing the growing alliance between the NPA and the

relating to this subject provides an adequate backdrop for our ensuing discussion.

John Locke, describing the architecture of civil government, called upon the English doctrine of prerogative to cope with the problem of emergency. In times of danger to the nation, positive law enacted by the legislature might be inadequate or even a fatal obstacle to the promptness of action necessary to avert catastrophe. In these situations, the Crown retained a prerogative power to act according to discretion for the public good, without the proscription of the law and sometimes even against it.[84] But Locke recognized that this moral restraint might not suffice to avoid abuse of prerogative powers. Who shall judge the need for resorting to the prerogative and how may its abuse be avoided? Here, Locke readily

military. Petitioners presented nothing to refute such events. Thus, absent any contrary allegations, the Court is convinced that the President was justified in issuing PP 1017 calling for military aid.

Indeed, judging the seriousness of the incidents, President Arroyo was not expected to simply fold her arms and do nothing to prevent or suppress what she believed was lawless violence, invasion or

admitted defeat, suggesting that the people have no other remedy in this, as in all other cases where they have no judge on earth, but to appeal to Heaven.[85]

rebellion. However, the exercise of such power or duty must not stifle liberty.

17

Jean-Jacques Rousseau also assumed the need for temporary suspension of democratic processes of government in time of

Lockean theory of prerogative. He recognized and attempted to bridge this chasm in democratic political theory, thus: Now, in a well-ordered society, it should never be necessary to resort to extra constitutional measures; for although they may for a time be beneficial, yet the precedent is pernicious, for if the practice is once established for good objects, they will in a little while be disregarded under that pretext but for evil purposes. Thus, no republic will ever be perfect if she has not by law provided for everything, having a remedy for every emergency and fixed rules for applying it.[89]

emergency. According to him: The inflexibility of the laws, which prevents them from adopting themselves to circumstances, may, in certain cases, render them disastrous and make them bring about, at a time of crisis, the ruin of the State It is wrong therefore to wish to make political institutions as strong as to render it impossible to suspend their operation. Even Sparta allowed its law to lapse... If the peril is of such a kind that the paraphernalia of the laws are an obstacle to their preservation, the method is to nominate a supreme lawyer, who shall silence all the laws and suspend for a moment the sovereign authority. In such a case, there is no doubt about the general will, and it clear that the peoples first intention is that the State shall not perish.[86]

Machiavelli in contrast to Locke, Rosseau and Mill sought to incorporate into the constitution a regularized system of standby emergency powers to be invoked with suitable checks and controls in time of national danger. He attempted forthrightly to meet the problem of combining a capacious reserve of power and speed and vigor in its application in time of

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

emergency, with effective constitutional restraints.[90]

Contemporary political theorists, addressing themselves to the problem of response to emergency by constitutional democracies, have employed the doctrine of constitutional dictatorship.[91] Frederick M. Watkins saw no reason why absolutism should not be used as a means for the defense

John Stuart Mill concluded his ardent defense of representative government: I am far from condemning, in cases of extreme necessity, the assumption of absolute power in the form of a temporary dictatorship.[88]

of liberal institutions, provided it serves to protect established institutions from the danger of permanent injury in a period of temporary emergency and is followed by a prompt return to the previous forms of political life.[92] He recognized the two (2) key elements of the problem of emergency governance,

Nicollo Machiavellis view of emergency powers, as one element in the whole scheme of limited government, furnished an ironic contrast to the

as well as all constitutional governance: increasing administrative powers of the executive, while at the same time imposing limitation upon that

18

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

1) No general regime or institution of constitutional dictatorship initiated unless it is necessary indispensable to the preservation of the its constitutional order

particular should be or even State and

2) the decision to institute a constitutional dictatorship should never be in the hands of the man or men who will constitute the dictator 3) No government should initiate a constitutional dictatorship without making specific provisions for its termination 4) all uses of emergency powers and all readjustments in the organization of the government should be effected in pursuit of constitutional or legal requirements 5) no dictatorial institution should be adopted, no right invaded, no regular procedure altered any more than is absolutely necessary for the conquest of the particular crisis . . . 6) The measures adopted in the prosecution of the a constitutional dictatorship should never be permanent in character or effect 7) The dictatorship should be carried on by persons representative of every part of the citizenry interested in the defense of the existing constitutional order. . . 8) Ultimate responsibility should be maintained for every action taken under a constitutional dictatorship. . . 9) The decision to terminate a constitutional dictatorship, like the decision to institute one should never be in the hands of the man or men who constitute the dictator. . . 10) No constitutional dictatorship should extend beyond the termination of the crisis for which it was instituted

Carl J. Friedrich cast his analysis in terms similar to those of Watkins.[95] It is a problem of concentrating power in a government where power has consciously been divided to cope with situations of unprecedented magnitude and gravity. There must be a broad grant of powers, subject to equally strong limitations as to who shall exercise such powers, when, for how long, and to what end.[96] Friedrich, too, offered criteria for judging the adequacy of any of scheme of emergency powers, to wit: The emergency executive must be appointed by constitutional means i.e., he must be legitimate; he should not enjoy power to determine the existence of an emergency; emergency powers should be exercised under a strict time limitation; and last, the objective of emergency action must be the defense of the constitutional order.[97]

Clinton L. Rossiter, after surveying the history of the employment of emergency powers in Great Britain, France, Weimar, Germany and the United States, reverted to a description of a scheme of constitutional dictatorship as solution to the vexing problems presented by

emergency.[98] Like Watkins and Friedrich, he stated a priori the conditions of success of the constitutional dictatorship, thus:

19

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

Rossiter accorded to legislature a far greater role in the oversight exercise of emergency powers than did Watkins. He would secure to Congress final responsibility for declaring the existence or termination of an emergency, and he places great faith in the effectiveness of congressional investigating committees.[100]

Scott and Cotter, in analyzing the above contemporary theories in light

of recent experience, were one in saying that, the suggestion that democracies surrender the control of government to an authoritarian ruler in time of grave danger to the nation is not based upon sound constitutional theory. To appraise emergency power in terms of constitutional dictatorship serves merely to distort the problem and hinder realistic analysis. It matters not whether the term dictator is used in its normal sense (as applied to authoritarian rulers) or is employed to embrace all chief executives administering emergency powers. However used, constitutional dictatorship cannot be divorced from the implication of suspension of the processes of constitutionalism. Thus, they favored instead the concept of

that the historical and proper test of constitutionalism was the existence of adequate processes for keeping government responsible. He refused to equate constitutionalism with the enfeebling of government by an exaggerated emphasis upon separation of powers and substantive limitations on governmental power. He found that the really effective checks on despotism have consisted not in the weakening of government but, but rather in thelimiting of it; between which there is a great and very significant difference. In associating constitutionalism with limited as distinguished from weak government, McIlwain meant government limited to the orderly procedure of law as opposed to the processes of force. The two fundamental correlative elements of constitutionalism for which all lovers of liberty must yet fight are the legal limits to arbitrary power and a complete political responsibility of government to the governed.[101]

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

constitutionalism articulated by Charles H. McIlwain: A concept of constitutionalism which is less misleading in the analysis of problems of emergency powers, and which is consistent with the findings of this study, is that formulated by Charles H. McIlwain. While it does not by any means necessarily exclude some indeterminate limitations upon the substantive powers of government, full emphasis is placed upon procedural limitations, and political responsibility. McIlwain clearly recognized the need to repose adequate power in government. And in discussing the meaning of constitutionalism, he insisted

Our Constitution has fairly coped with this problem. Fresh from the fetters of a repressive regime, the 1986 Constitutional Commission, in drafting the 1987 Constitution, endeavored to create a government in the concept of Justice Jacksons balanced power structure.[102] Executive, legislative, and judicial powers are dispersed to the President, the Congress, and the Supreme Court, respectively. Each is supreme within its own sphere. But none has the monopoly of power in times of emergency. Each

20

branch is given a role to serve as limitation or check upon the other. This system does not weaken the President, it just limits his power, using the language of McIlwain. In other words, in times of emergency, our Constitution reasonably demands that we repose a certain amount of faith in the basic integrity and wisdom of the Chief Executive but, at the same time, it obliges him to operate within carefully prescribed procedural limitations. Moreover, the overbreadth doctrine is not intended for testing the validity of a law that reflects legitimate state interest in maintaining comprehensive control over harmful, constitutionally unprotected conduct. Undoubtedly, lawless violence, insurrection and rebellion are considered harmful and constitutionally unprotected conduct. In Broadrick v.

Oklahoma,[105] it was held:

It remains a matter of no little difficulty to determine when a law may properly be held void on its face and when such summary action is inappropriate. But the plain import of our cases is, at the very least, that facial overbreadth adjudication is an exception to our traditional rules of practice and that its function, a limited one at the outset, attenuates as the otherwise unprotected behavior that it forbids the State to sanction moves from pure speech toward conduct and that conduct even if expressive falls within the scope of otherwise valid criminal laws that reflect legitimate state interests in maintaining comprehensive controls over harmful, constitutionally unprotected conduct.

a. Facial Challenge

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

Thus, claims of facial overbreadth are entertained in cases involving

First and foremost, the overbreadth doctrine is an analytical tool

developed for testing on their faces statutes in free speech cases, also known under the American Law as First Amendment cases.[103]

statutes which, by their terms, seek to regulate only spoken words and again, that overbreadth claims, if entertained at all, have been curtailed when invoked against ordinary criminal laws that are sought to be applied to protected conduct.[106] Here, the incontrovertible fact remains that PP 1017

A plain reading of PP 1017 shows that it is not primarily directed to speech or even speech-related conduct. It is actually a call upon the AFP to prevent or suppress all forms of lawless violence. In United States v.

pertains to a spectrum of conduct, not free speech, which is manifestly subject to state regulation.

Salerno,[104] the US Supreme Court held that we have not recognized an

overbreadth doctrine outside the limited context of the First Amendment (freedom of speech).

Second, facial invalidation of laws is considered as manifestly strong

medicine, to be used sparingly and only as a last resort, and is generally disfavored;[107] The reason for this is obvious. Embedded in the traditional

21

rules governing constitutional adjudication is the principle that a person to whom a law may be applied will not be heard to challenge a law on the ground that it may conceivably be applied unconstitutionally to others, i.e., in other situations not before the Court.[108] A writer and scholar in Constitutional Law explains further: The most distinctive feature of the overbreadth technique is that it marks an exception to some of the usual rules of constitutional litigation. Ordinarily, a particular litigant claims that a statute is unconstitutional as applied to him or her; if the litigant prevails, the courts carve away the unconstitutional aspects of the law by invalidating its improper applications on a case to case basis. Moreover, challengers to a law are not permitted to raise the rights of third parties and can only assert their own interests. In overbreadth analysis, those rules give way; challenges are permitted to raise the rights of third parties; and the court invalidates the entire statute on its face, not merely as applied for so that the overbroad law becomes unenforceable until a properly authorized court construes it more narrowly. The factor that motivates courts to depart from the normal adjudicatory rules is the concern with the chilling; deterrent effect of the overbroad statute on third parties not courageous enough to bring suit. The Court assumes that an overbroad laws very existence may cause others not before the court to refrain from constitutionally protected speech or expression. An overbreadth ruling is designed to remove that deterrent effect on the speech of those third parties.

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

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

Petitioners likewise seek a facial review of PP 1017 on the ground of vagueness. This, too, is unwarranted.

Related to the overbreadth doctrine is the void for vagueness doctrine which holds that a law is facially invalid if men of common intelligence must necessarily guess at its meaning and differ as to its application.[110] It is subject to the same principles governing overbreadth doctrine. For one, it is also an analytical tool for testing on their

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

faces statutes in free speech cases. And like overbreadth, it is said that a litigant may challenge a statute on its face only if it is vague in all its possible applications. Again, petitioners did not even attempt to show that PP 1017 is vague in all its application. They also failed to establish that men of common intelligence cannot understand the meaning and application of PP 1017.

Harris,[109]it was held that:

22

Justice Dante O. Tinga, held that Section 18, Article VII of the Constitution reproduced as follows: b. Constitutional Basis of PP 1017 Sec. 18. The President shall be the Commander-inChief of all armed forces of the Philippines and whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, when the public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law. Within forty-eight hours from the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus, the President shall submit a report in person or in writing to the Congress. The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such proclamation or suspension, which revocation shall not be set aside by the President. Upon the initiative of the President, the Congress may, in the same manner, extend such proclamation or suspension for a period to be determined by the Congress, if the invasion or rebellion shall persist and public safety requires it. The Congress, if not in session, shall within twenty-four hours following such proclamation or suspension, convene in accordance with its rules without need of a call. The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual bases of the proclamation of martial law or the suspension of the privilege of the writ or the extension thereof, and must promulgate its decision thereon within thirty days from its filing. A state of martial law does not suspend the operation of the Constitution, nor supplant the functioning of the civil courts or legislative assemblies, nor authorize the conferment of jurisdiction on military courts and agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of the writ. The suspension of the privilege of the writ shall apply only to persons judicially charged for rebellion or offenses inherent in or directly connected with invasion.

Now on the constitutional foundation of PP 1017.

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

First provision:
by virtue of the power vested upon me by Section 18, Artilce VII do hereby command the Armed Forces of the Philippines, to maintain law and order throughout the Philippines, prevent or suppress all forms of lawless violence as well any act of insurrection or rebellion

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

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

First Provision: Calling-out Power

The first provision pertains to the Presidents calling-out

power. In Sanlakas v. Executive Secretary,[111] this Court, through Mr.

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During the suspension of the privilege of the writ, any person thus arrested or detained shall be judicially charged within three days, otherwise he shall be released.

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

grants the President, as Commander-in-Chief, a sequence of graduated powers. From the most to the least benign, these are: the calling-out power, the power to suspend the privilege of the writ of habeas corpus, and the power to declare Martial Law. CitingIntegrated Bar of the Philippines v.

provides: SEC. 4. Proclamations. Acts of the President fixing a date or declaring a status or condition of public moment or interest, upon the existence of which the operation of a specific law or regulation is made to depend, shall be promulgated in proclamations which shall have the force of an executive order.

Zamora,[112] the Court ruled that the only criterion for the exercise of the
calling-out power is that whenever it becomes necessary, the President may call the armed forces to prevent or suppress lawless violence, invasion or rebellion. Are these conditions present in the instant cases? As stated earlier, considering the circumstances then prevailing, President Arroyo found it necessary to issue PP 1017. Owing to her Offices vast intelligence network, she is in the best position to determine the actual condition of the country.

President Arroyos declaration of a state of rebellion was merely an act declaring a status or condition of public moment or interest, a declaration allowed under Section 4 cited above. Such declaration, in the words of Sanlakas, is harmless, without legal significance, and deemed not written. In these cases, PP 1017 is more than that. In declaring a state of

Under the calling-out power, the President may summon the armed forces to aid him in suppressing lawless violence, invasion and

national emergency, President Arroyo did not only rely on Section 18, Article VII of the Constitution, a provision calling on the AFP to prevent or suppress lawless violence, invasion or rebellion. She also relied on Section 17, Article XII, a provision on the States extraordinary power to take over privatelyowned public utility and business affected with public interest. Indeed, PP 1017 calls for the exercise of an awesome power. Obviously, such

rebellion. This involves ordinary police action. But every act that goes beyond the Presidents calling-out power is considered illegal or ultra

vires. For this reason, a President must be careful in the exercise of his
powers. He cannot invoke a greater power when he wishes to act under a lesser power. There lies the wisdom of our Constitution, the greater the power, the greater are the limitations.

Proclamation cannot be deemed harmless, without legal significance, or not written, as in the case of Sanlakas.

It is pertinent to state, however, that there is a distinction between the Presidents authority to declare a state of rebellion (inSanlakas) and the

Some of the petitioners vehemently maintain that PP 1017 is actually a declaration of Martial Law. It is no so. What defines the character of PP

24

1017 are its wordings. It is plain therein that what the President invoked was her calling-out power.

acts that only under a valid declaration of Martial Law can be done. Its use for any other purpose is a perversion of its nature and scope, and any act done contrary to its command is ultra vires.

The declaration of Martial Law is a warn[ing] to citizens that the military power has been called upon by the executive to assist in the maintenance of law and order, and that, while the emergency lasts, they must, upon pain of arrest and punishment, not commit any acts which will in any way render more difficult the restoration of order and the enforcement of law.[113] Justice Mendoza further stated that specifically, (a) arrests and seizures without judicial warrants; (b) ban on public assemblies; (c) take-over of news media and agencies and press censorship; and (d) issuance of Presidential Decrees, are powers which can be exercised by the President as Commanderin-Chief only where there is a valid declaration of Martial Law or suspension of the writ ofhabeas corpus. In his Statement before the Senate Committee on Justice on March 13, 2006, Mr. Justice Vicente V. Mendoza,[114] an authority in constitutional law, said that of the three powers of the President as Commander-in-Chief, the power to declare Martial Law poses the most severe threat to civil liberties. It is a strong medicine which should not be resorted to lightly. It cannot be used to stifle or persecute critics of the government. It is placed in the keeping of the President for the purpose of enabling him to secure the people from harm and to restore order so that they can enjoy their individual freedoms. In fact, Section 18, Art. VII, provides: A state of martial law does not suspend the operation of the Constitution, nor supplant the functioning of the civil courts or legislative assemblies, nor authorize the conferment of jurisdiction on military courts and agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of the writ. Based on the above disquisition, it is clear that PP 1017 is not a declaration of Martial Law. It is merely an exercise of President Arroyos calling-out power for the armed forces to assist her in preventing or suppressing lawless violence.

Second Provision: Take Care Power

The second provision pertains to the power of the President to ensure that the laws be faithfully executed. This is based on Section 17, Article VII which reads: SEC. 17. The President shall have control of all the executive departments, bureaus, and offices. He shall ensure that the laws be faithfully executed.

Justice Mendoza also stated that PP 1017 is not a declaration of Martial Law. It is no more than a call by the President to the armed forces to prevent or suppress lawless violence. As such, it cannot be used to justify

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

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

We all know that it was PP 1081 which granted President Marcos legislative power. Its enabling clause states: to enforce obedience to all the laws and decrees, orders and regulations promulgated by me personally or

Police[118] under the Department of Interior and Local Government.[119]

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

upon my direction. Upon the other hand, the enabling clause of PP 1017 issued by President Arroyo is: to enforce obedience to all the laws and to

alldecrees, orders and regulations promulgated by me personally or upon my

direction.

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

PP 1017 states

in

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

Petitioners contention is understandable. A reading of PP 1017 operative clause shows that it was lifted[120] from Former President Marcos Proclamation No. 1081, which partly reads: NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines by virtue of the powers vested upon me by Article VII, Section 10, Paragraph (2) of the

The President is granted an Ordinance Power under Chapter 2, Book III of Executive Order No. 292 (Administrative Code of 1987). She may issue any of the following: Sec. 2. Executive Orders. Acts of the President providing for rules of a general or permanent character in

26

implementation or execution of constitutional or statutory powers shall be promulgated in executive orders. Sec. 3. Administrative Orders. Acts of the President which relate to particular aspect of governmental operations in pursuance of his duties as administrative head shall be promulgated in administrative orders. Sec. 4. Proclamations. Acts of the President fixing a date or declaring a status or condition of public moment or interest, upon the existence of which the operation of a specific law or regulation is made to depend, shall be promulgated in proclamations which shall have the force of an executive order. Sec. 5. Memorandum Orders. Acts of the President on matters of administrative detail or of subordinate or temporary interest which only concern a particular officer or office of the Government shall be embodied in memorandum orders. Sec. 6. Memorandum Circulars. Acts of the President on matters relating to internal administration, which the President desires to bring to the attention of all or some of the departments, agencies, bureaus or offices of the Government, for information or compliance, shall be embodied in memorandum circulars. Sec. 7. General or Special Orders. Acts and commands of the President in his capacity as Commanderin-Chief of the Armed Forces of the Philippines shall be issued as general or special orders.

decrees. Legislative power is peculiarly within the province of the Legislature. Section 1, Article VI categorically states that [t]he legislative power shall be vested in the Congress of the Philippines which shall consist of a Senate and a House of Representatives. To be sure, neither Martial Law nor a state of rebellion nor a state of emergency can justify President Arroyos exercise of legislative power by issuing decrees.

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

As this Court stated earlier, President Arroyo has no authority to enact decrees. It follows that these decrees are void and, therefore, cannot be enforced. With respect to laws, she cannot call the military to enforce or implement certain laws, such as customs laws, laws governing family and property relations, laws on obligations and contracts and the like. She can only order the military, under PP 1017, to enforce laws pertinent to its duty to suppress lawless violence.

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

Third Provision: Power to Take Over

The pertinent provision of PP 1017 states: x x x and to enforce obedience to all the laws and to all decrees, orders, and regulations promulgated by me personally or upon my direction; and as provided in Section 17, Article XII of the Constitution do hereby declare a state of national emergency.

This Court rules that the assailed PP 1017 is unconstitutional insofar as it grants President Arroyo the authority to promulgate

27

Filipinas Orient Airways . . . for the successful prosecution by the Government of its effort to contain, solve and end the present national
The import of this provision is that President Arroyo, during the state of national emergency under PP 1017, can call the military not only to enforce obedience to all the laws and to all decrees x x x but also to act pursuant to the provision of Section 17, Article XII which reads: Sec. 17. In times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately-owned public utility or business affected with public interest. Petitioners, particularly the members of the House of Representatives, claim that President Arroyos inclusion of Section 17, Article XII in PP 1017 is an encroachment on the legislatures emergency powers.

emergency.

This is an area that needs delineation.

A distinction must be drawn between the Presidents authority

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

to declare a state of national emergency and

toexercise emergency

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

The answer is simple. During the existence of the state of national emergency, PP 1017 purports to grant the President, without any authority or delegation from Congress, to take over or direct the operation of any privately-owned public utility or business affected with public interest. Section 23, Article VI of the Constitution reads: SEC. 23. (1) The Congress, by a vote of two-thirds of both Houses in joint session assembled, voting separately, shall have the sole power to declare the existence of a state of war. (2) In times of war or other national emergency, the Congress may, by law, authorize the President, for a limited period and subject to such restrictions as it may prescribe, to exercise powers necessary and proper to carry out a declared national policy. Unless sooner withdrawn by resolution of the Congress, such powers shall cease upon the next adjournment thereof.

This provision was first introduced in the 1973 Constitution, as a product of the martial law thinking of the 1971 Constitutional

Convention.[122] In effect at the time of its approval was President Marcos Letter of Instruction No. 2 dated September 22, 1972 instructing the Secretary of National Defense to take over the management, control and

operation of the Manila Electric Company, the Philippine Long Distance Telephone Company, the National Waterworks and Sewerage Authority, the Philippine National Railways, the Philippine Air Lines, Air Manila (and)

28

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

be possible or practicable for Congress to meet and exercise its powers, the Framers of our Constitution deemed it wise to allow Congress to grant emergency powers to the President, subject to certain conditions, thus: (1) There must be a war or other emergency. (2) The delegation must be for a limited period only. (3) The delegation must be subject to such restrictions as the Congress may prescribe. (4) The emergency powers must be exercised to carry out a national policy declared by Congress.[124]

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

Section 17, Article XII must be understood as an aspect of the emergency powers clause. The taking over of private business affected with public interest is just another facet of the emergency powers generally reposed upon Congress. Thus, when Section 17 states that the the State

Courts have often said that constitutional provisions in pari

may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately owned public utility or business affected with public interest, it refers to Congress, not the President. Now, whether or not the President may exercise such power is dependent on whether Congress may delegate it to him pursuant to a law prescribing the reasonable terms thereof. Youngstown Sheet & Tube Co. et

materia are to be construed together. Otherwise stated, different clauses,

sections, and provisions of a constitution which relate to the same subject matter will be construed together and considered in the light of each other.[123] Considering that Section 17 of Article XII and Section 23 of Article VI, previously quoted, relate to national emergencies, they must be read together to determine the limitation of the exercise of emergency powers.

al. v. Sawyer,[125] held:

It is clear that if the President had authority to issue the order he did, it must be found in some provision of the Constitution. And it is not claimed that express constitutional language grants this power to the President. The contention is that presidential power should be implied from the aggregate of his powers under the Constitution. Particular reliance is placed on provisions in

Generally, Congress is the repository of emergency powers. This is evident in the tenor of Section 23 (2), Article VI authorizing it to delegate such powers to the President. Certainly, a body cannot delegate a power not reposed upon it. However, knowing that during grave emergencies, it may not

29

Article II which say that The executive Power shall be vested in a President . . . .; that he shall take Care that the Laws be faithfully executed; and that he shall be Commander-in-Chief of the Army and Navy of the United States. The order cannot properly be sustained as an exercise of the Presidents military power as Commander-inChief of the Armed Forces. The Government attempts to do so by citing a number of cases upholding broad powers in military commanders engaged in day-to-day fighting in a theater of war. Such cases need not concern us here. Even though theater of war be an expanding concept, we cannot with faithfulness to our constitutional system hold that the Commander-in-Chief of the Armed Forces has the ultimate power as such to take possession of private property in order to keep labor disputes from stopping production. This is a job for the nations lawmakers, not for its military authorities. Nor can the seizure order be sustained because of the several constitutional provisions that grant executive power to the President. In the framework of our Constitution, the Presidents power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker. The Constitution limits his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make laws which the President is to execute. The first section of the first article says that All legislative Powers herein granted shall be vested in a Congress of the United States. . .[126]

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

Emergency, as contemplated in our Constitution, is of the same breadth. It may include rebellion, economic crisis, pestilence or epidemic, typhoon, flood, or other similar catastrophe of nationwide proportions or effect.[131] This is evident in the Records of the Constitutional Commission, thus: MR. GASCON. Yes. What is the Committees definition of national emergency which appears in Section 13, page 5? It reads: When the common good so requires, the State may temporarily take over or direct the operation of any privately owned public utility or business affected with public interest. MR. VILLEGAS. What I mean is threat from external aggression, for example, calamities or natural disasters. MR. GASCON. There is a question by Commissioner de los Reyes. What about strikes and riots? MR. VILLEGAS. Strikes, no; those would not be covered by the term national emergency.

Petitioner Cacho-Olivares, et al. contends that the term emergency under typhoon, Section 17, Article XII refers to tsunami,

hurricane and similar occurrences. This is a limited view of

emergency.

30

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

MR. TINGSON. May I ask the committee if national emergency refers to military national emergency or could this be economic emergency? MR. VILLEGAS. Yes, it could refer to both military or economic dislocations. MR. TINGSON. Thank you very much.[133]

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

government, legislation is preserved for Congress all the time, not excepting periods of crisis no matter how serious. Never in the history of the United States, the basic features of whose Constitution have been copied in ours, have specific functions of the legislative branch of enacting laws been surrendered to another department unless we regard as legislating the carrying out of a legislative policy according to prescribed standards; no, not even when that Republic was fighting a total war, or when it was engaged in a life-anddeath struggle to preserve the Union. The truth is that under our concept of constitutional government, in times of extreme perils more than in normal circumstances the various branches, executive, legislative, and judicial, given the ability to act, are called upon to perform the duties and discharge the responsibilities committed to them respectively.

Following our interpretation of Section 17, Article XII, invoked by President Arroyo in issuing PP 1017, this Court rules that such Proclamation

In Araneta v. Dinglasan,[134] this Court emphasized that legislative power, through which extraordinary measures are exercised, remains in Congress even in times of crisis.

does not authorize her during the emergency to temporarily take over or direct the operation of any privately owned public utility or business affected with public interest without authority from Congress.

x x x After all the criticisms that have been made against the efficiency of the system of the separation of powers, the fact remains that the Constitution has set up this form of government, with all its defects and shortcomings, in preference to the commingling of powers in one man or group of men. The Filipino people by adopting parliamentary government have given notice that they share the faith of other democracy-loving peoples in this system, with all its faults, as the ideal. The point is, under this framework of no

Let it be emphasized that while the President alone can declare a state of national emergency, however, without legislation, he has power to take over privately-owned public utility or business with public interest. The President cannot decide whether circumstances exist warranting the take over of privatelypublic utility or business affected with public interest. Nor can determine when such exceptional circumstances have

affected

exceptional owned he

ceased. Likewise, without legislation, the President has no power to point out the types of businesses affected with public interest that should be taken

31

over. In short, the President has no absolute authority to exercise all the powers of the State under Section 17, Article VII in the absence of an emergency powers act passed by Congress.

And in G.R. No. 171483, petitioners KMU and NAFLU-KMU et

al. alleged that their members were turned away and dispersed when they
went to EDSA and later, to Ayala Avenue, to celebrate the 20 th Anniversary of People Power I.

c. AS APPLIED CHALLENGE

A perusal of the direct injuries allegedly suffered by the said petitioners shows that they resulted from the implementation, pursuant to

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

G.O. No. 5, of PP 1017.

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

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

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

opportunity for abuse in the manner of application.[136] The validity of a statute or ordinance is to be determined from its general purpose and its

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

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

In G.R.

No.

171409,

petitioners

Cacho-Olivares

and Tribune Publishing Co., Inc. claimed that on February 25, 2006, the CIDG operatives raided and ransacked without warrant their office. Three policemen were assigned to guard their office as a possible source of destabilization. Again, the basis was PP 1017.

PP 1017 allowing the police, expressly or impliedly, to conduct illegal arrest, search or violate the citizens constitutional rights.

Now, may this Court adjudge a law or ordinance unconstitutional on the ground that its implementor committed illegal acts? The answer is no. The criterion by which the validity of the statute or ordinance is to be

32

measured is the essential basis for the exercise of power, and not a mere incidental result arising from its exertion.[138] This is logical. Just imagine

amorphous and vague concept. Congress has yet to enact a law defining and punishing acts of terrorism. In fact, this definitional predicament or the absence of an agreed definition of terrorism confronts not only our country, but the

the absurdity of situations when laws maybe declared unconstitutional just because the officers implementing them have acted arbitrarily. If this were so, judging from the blunders committed by policemen in the cases passed upon by the Court, majority of the provisions of the Revised Penal Code would have been declared unconstitutional a long time ago.

international community as well. The following observations are quite apropos: In the actual unipolar context of international relations, the fight against terrorism has become one of the basic slogans when it comes to the justification of the use of force against certain states and against groups operating internationally. Lists of states sponsoring terrorism and of terrorist organizations are set up and constantly being updated according to criteria that are not always known to the public, but are clearly determined by strategic interests. The basic problem underlying all these military actions or threats of the use of force as the most recent by the United States against Iraq consists in the absence of an agreed definition of terrorism. Remarkable confusion persists in regard to the legal categorization of acts of violence either by states, by armed groups such as liberation movements, or by individuals. The dilemma can by summarized in the saying One countrys terrorist is another countrys freedom fighter. The apparent contradiction or lack of consistency in the use of the term terrorism may further be demonstrated by the historical fact that leaders of national liberation movements such as Nelson Mandela in South Africa, Habib Bourgouiba in Tunisia, or Ahmed Ben Bella in Algeria, to mention only a few, were originally labeled as terrorists by those who controlled the territory at the time, but later became internationally respected statesmen. What, then, is the defining criterion for terrorist acts the differentia specifica distinguishing those acts from eventually legitimate acts of national resistance or self-defense?

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

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

Unlike the term lawless violence which is unarguably extant in our statutes and the Constitution, and which is invariably associated with invasion, insurrection or rebellion, the phrase acts of terrorism is still an

33

Since the times of the Cold War the United Nations Organization has been trying in vain to reach a consensus on the basic issue of definition. The organization has intensified its efforts recently, but has been unable to bridge the gap between those who associate terrorism with any violent act by non-state groups against civilians, state functionaries or infrastructure or military installations, and those who believe in the concept of the legitimate use of force when resistance against foreign occupation or against systematic oppression of ethnic and/or religious groups within a state is concerned. The dilemma facing the international community can best be illustrated by reference to the contradicting categorization of organizations and movements such as Palestine Liberation Organization (PLO) which is a terrorist group for Israel and a liberation movement for Arabs and Muslims the Kashmiri resistance groups who are terrorists in the perception of India, liberation fighters in that of Pakistan the earlier Contras in Nicaragua freedom fighters for the United States, terrorists for the Socialist camp or, most drastically, the Afghani Mujahedeen (later to become the Taliban movement): during the Cold War period they were a group of freedom fighters for the West, nurtured by the United States, and a terrorist gang for the Soviet Union. One could go on and on in enumerating examples of conflicting categorizations that cannot be reconciled in any way because of opposing political interests that are at the roots of those perceptions. How, then, can those contradicting definitions and conflicting perceptions and evaluations of one and the same group and its actions be explained? In our analysis, the basic reason for these striking inconsistencies lies in the divergent interest of states. Depending on whether a state is in the position of an occupying power or in that of a rival, or adversary, of an occupying power in a given territory, the definition of terrorism will fluctuate accordingly. A state may eventually see itself as protector of the rights of a certain ethnic group outside its territory and will therefore speak of a liberation struggle, not of terrorism when acts of violence by this group are concerned, and vice-versa. The United Nations Organization has been unable to reach a decision on the definition of terrorism exactly because of these conflicting interests of sovereign states that

determine in each and every instance how a particular armed movement (i.e. a non-state actor) is labeled in regard to the terrorists-freedom fighter dichotomy. A policy of double standards on this vital issue of international affairs has been the unavoidable consequence. This definitional predicament of an organization consisting of sovereign states and not of peoples, in spite of the emphasis in the Preamble to the United Nations Charter! has become even more serious in the present global power constellation: one superpower exercises the decisive role in the Security Council, former great powers of the Cold War era as well as medium powers are increasingly being marginalized; and the problem has become even more acute since the terrorist attacks of 11 September 2001 I the United States.[141]

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

So far, the word terrorism appears only once in our criminal laws, i.e., in P.D. No. 1835 dated January 16, 1981 enacted by President Marcos during the Martial Law regime. This decree is entitled Codifying The Various Laws on Anti-Subversion and Increasing The Penalties for Membership in Subversive Organizations. The word terrorism is

mentioned in the following provision: That one who conspires with any other person for the purpose of overthrowing the Government of the

34

Philippines x x x by force, violence, terrorism, x x x shall be punished by reclusion temporal x x x. We first examine G.R. No. 171396 (David et al.)

P.D. No. 1835 was repealed by E.O. No. 167 (which outlaws the Communist Party of the Philippines) enacted by President Corazon Aquino on May 5, 1985. These two (2) laws, however, do not define acts of terrorism. Since there is no law defining acts of terrorism, it is President Arroyo alone, under G.O. No. 5, who has the discretion to determine what acts constitute terrorism. Her judgment on this aspect is absolute, without restrictions. Consequently, there can be indiscriminate arrest without warrants, breaking into offices and residences, taking over the media enterprises, prohibition and dispersal of all assemblies and gatherings unfriendly to the administration. All these can be effected in the name of G.O. No. 5. These acts go far beyond the calling-out power of the President. Certainly, they violate the due process clause of the The Constitution provides that the right of the people to be secured in their persons, houses, papers and effects against unreasonable search and seizure of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized.[142] The plain import of the language of the Constitution is that searches, seizures and arrests are normallyunreasonable unless authorized by a validly issued search warrant or warrant of arrest. Thus, the fundamental protection given by this provision is that between person and police must stand the protective authority of a magistrate clothed with power to issue or refuse to issue search warrants or warrants of arrest.[143]

Constitution. Thus, this Court declares that the acts of terrorism portion of G.O. No. 5 is unconstitutional.

In the Brief Account[144] submitted by petitioner David, certain facts are established: first, he was arrested without warrant;second, the PNP Significantly, there is nothing in G.O. No. 5 authorizing the military or police to commit acts beyond what are necessary and appropriate to suppress and prevent lawless violence, the limitation of their authority in pursuing the Order. Otherwise, such acts are considered illegal. operatives arrested him on the basis of PP 1017; third, he was brought at Camp Karingal, Quezon City where he was fingerprinted, photographed and booked like a criminal suspect; fourth, he was treated brusquely by policemen who held his head and tried to push him inside an unmarked car; fifth, he was charged with Violation of Batas Pambansa Bilang No.

35

880[145] and Inciting to Sedition; sixth, he was detained for seven (7) hours; and seventh, he was eventually released for insufficiency of evidence.

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

Section 5, Rule 113 of the Revised Rules on Criminal Procedure provides: Sec. 5. Arrest without warrant; when lawful. - A peace officer or a private person may, without a warrant, arrest a person: (a) When, in his presence, the person to be arrested has committed, is actually committing, or is attempting to commit an offense. (b) When an offense has just been committed and he has probable cause to believe based on personal knowledge of facts or circumstances that the person to be arrested has committed it; and x x x.

Section 4 of Article III guarantees: No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances.

Assembly means a right on the part of the citizens to meet peaceably for consultation in respect to public affairs. It is a necessary consequence of our republican institution and complements the right of speech. As in the case of freedom of expression, this right is not to be limited, much less denied, except on a showing of a clear and present danger of a substantive evil that Congress has a right to prevent. In other words, like

Neither of the two (2) exceptions mentioned above justifies petitioner Davids warrantless arrest. During the inquest for the charges of inciting to sedition and violation of BP was their with the

other rights embraced in the freedom of expression, the right to assemble is not subject to previous restraint or censorship. It may not be conditioned upon the prior issuance of a permit or authorization from the government authorities except, of course, if the assembly is intended to be held in a public place, a permit for the use of such place, and not for the assembly itself, may be validly required.

880, all that the arresting officers could invoke observation that some rallyists were wearing t-shirts

invective Oust Gloria Now and their erroneous assumption that petitioner David was the leader of the rally.[146] Consequently, the Inquest Prosecutor

ordered his immediate release on the ground of insufficiency of evidence. He noted that petitioner David was not wearing the subject t-shirt and even if he was wearing it, such fact is insufficient to charge him with inciting to sedition. Further, he also stated that there is insufficient evidence for the charge of violation of BP 880 as it was not even known whether petitioner David was the leader of the rally.[147]

The ringing truth here is that petitioner David, et al. were arrested while they were exercising their right to peaceful assembly. They were not committing any crime, neither was there a showing of a clear and present danger that warranted the limitation of that right. As can be gleaned from circumstances, the charges of inciting to sedition and violation of BP

36

880 were mere afterthought. Even the Solicitor General, during the oral argument, failed to justify the arresting officers conduct. In De Jonge v.

show or convince the Court that the rallyists committed acts amounting to lawless violence, invasion or rebellion. With the blanket revocation of permits, the distinction between protected and unprotected assemblies was eliminated.

Oregon,[148] it was held that peaceable assembly cannot be made a crime,

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

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

G.R. No. 171409, (Cacho-Olivares, et al.) presents another facet of freedom of speech i.e., the freedom of the press. Petitioners narration of facts, which the Solicitor General failed to refute, were established searched the

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

following: first, the Daily warrant; second, the

Tribunes offices
operatives

without for

police

seized

several

materials

publication; third, the search was conducted at about 1:00 o clock in the morning of February 25, 2006; fourth, the search was conducted in the absence of any official of the Daily Tribune except the security guard of the building; and fifth, policemen stationed themselves at the vicinity of theDaily

Tribune offices.

Thereafter, a wave of warning came from government officials. Presidential Chief of Staff Michael Defensor was quoted as saying that such raid was meant to show a strong presence, to tell media outlets not to

37

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

Not only that, the search violated petitioners freedom of the press. The best gauge of a free and democratic society rests in the degree of freedom enjoyed by its media. In the Burgos v. Chief of Staff[152] this Court held that -As heretofore stated, the premises searched were the business and printing offices of the "Metropolitan Mail" and the "We Forum newspapers. As a consequence of the search and seizure, these premises were padlocked and sealed, with the further result that the printing and publication of said newspapers were discontinued. Such closure is in the nature of previous restraint or censorship abhorrent to the freedom of the press guaranteed under the fundamental law, and constitutes a virtual denial of petitioners' freedom to express themselves in print. This state of being is patently anathematic to a democratic framework where a free, alert and even militant press is essential for the political enlightenment and growth of the citizenry.

The search is illegal. Rule 126 of The Revised Rules on Criminal Procedure lays down the steps in the conduct of search and seizure. Section 4 requires that a search warrant be issued upon probable cause in connection with one specific offence to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce. Section 8 mandates that the search of a house, room, or any other premise be made in the presence of the lawful occupant thereof or any member of his family or in the absence of the latter, in the presence of two (2) witnesses of sufficient age and discretion residing in the same locality. And Section 9 states that the warrant must direct that it be served in the daytime, unless the property is on the person or in the place ordered to be searched, in which case a direction may be inserted that it be served at any time of the day or night. All these rules were violated by the CIDG operatives. While admittedly, the Daily Tribune was not padlocked and sealed like the Metropolitan Mail and We Forum newspapers in the above case, yet it cannot be denied that the CIDG operatives exceeded their enforcement duties. The search and seizure of materials for publication, the stationing of policemen in the vicinity of the The Daily Tribune offices, and the arrogant warning of government officials to media, are plain censorship. It is that officious functionary of the repressive government who tells the citizen that he may speak only if allowed to do so, and no more and no less than what he is permitted to say on pain of punishment should he be so rash as to disobey.[153] Undoubtedly, the The Daily Tribune was subjected to these arbitrary intrusions because of its anti-government sentiments. This Court cannot tolerate the blatant disregard of a constitutional right even if it involves the most defiant of our citizens. Freedom to comment on public affairs is essential to the vitality of a representative democracy. It is the duty

38

of the courts to be watchful for the constitutional rights of the citizen, and against any stealthy encroachments thereon. The motto should always be obsta principiis.[154]

warrant? Did they become suddenly part of the evidence of rebellion or inciting to sedition or what? SOLGEN BENIPAYO:

Incidentally, during the oral arguments, the Solicitor General admitted that the search of the Tribunes offices and the seizure of its materials for publication and other papers are illegal; and that the same are inadmissible for any purpose, thus: JUSTICE CALLEJO: You made quite a mouthful of admission when you said that the policemen, when inspected the Tribune for the purpose of gathering evidence and you admitted that the policemen were able to get the clippings. Is that not in admission of the admissibility of these clippings that were taken from the Tribune? SOLICITOR GENERAL BENIPAYO: Under the law they would seem to be, if they were illegally seized, I think and I know, Your Honor, and these are inadmissible for any purpose.[155] xxx xxx xxx

Well, it was the police that did that, Your Honor. Not upon my instructions. SR. ASSO. JUSTICE PUNO: Are you saying that the act of the policeman is illegal, it is not based on any law, and it is not based on Proclamation 1017. SOLGEN BENIPAYO: It is not based on Proclamation 1017, Your Honor, because there is nothing in 1017 which says that the police could go and inspect and gather clippings from Daily Tribune or any other newspaper. SR. ASSO. JUSTICE PUNO: Is it based on any law? SOLGEN BENIPAYO: As far as I know, no, Your Honor, from the facts, no. SR. ASSO. JUSTICE PUNO: So, it has no basis, no legal basis whatsoever? SOLGEN BENIPAYO: Maybe so, Your Honor. Maybe so, that is why I said, I dont know if it is premature to say this, we do not condone this. If the people

SR. ASSO. JUSTICE PUNO: These have been published in the past issues of the Daily Tribune; all you have to do is to get those past issues. So why do you have to go there at 1 oclock in the morning and without any search

39

who have been injured by this would want to sue them, they can sue and there are remedies for this.[156]

military and the police committed acts which violate the citizens rights under the Constitution, this Court has to declare such acts unconstitutional and illegal.

Likewise, the warrantless arrests and seizures executed by the police were, according to the Solicitor General, illegal and cannot be condoned, thus: CHIEF JUSTICE PANGANIBAN: There seems to be some confusions if not contradiction in your theory. SOLICITOR GENERAL BENIPAYO: I dont know whether this will clarify. The acts, the supposed illegal or unlawful acts committed on the occasion of 1017, as I said, it cannot be condoned. You cannot blame the President for, as you said, a misapplication of the law. These are acts of the police officers, that is their responsibility.[157]

In this connection, Chief Justice Artemio V. Panganibans concurring opinion, attached hereto, is considered an integral part of this ponencia.

SUMMATION

In sum, the lifting of PP 1017 through the issuance of PP 1021 a supervening event would have normally rendered this case moot and academic. However, while PP 1017 was still operative, illegal acts were committed allegedly in pursuance thereof. Besides, there is no guarantee that PP 1017, or one similar to it, may not again be issued. Already, there have

been media reports on April 30, 2006 that allegedly PP 1017 would be reimposed if the May 1 rallies become unruly and violent. Consequently, the transcendental issues raised by the parties should not be evaded; they must now be resolved to prevent future constitutional aberration.

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

The Court finds and so holds that PP 1017 is constitutional insofar as it constitutes a call by the President for the AFP to prevent or suppress lawless violence. The proclamation is sustained by Section 18,

The

Court

has

passed upon

the

constitutionality of

these

Article VII of the Constitution and the relevant jurisprudence discussed earlier. However, PP 1017s extraneous provisions giving the President express or implied power (1) to issue decrees; (2) to direct the AFP to enforce obedience to all laws even those not related to lawless violence as well as decrees promulgated by the President; and (3) to impose standards on media

issuances. Its ratiocination has been exhaustively presented. At this point, suffice it to reiterate that PP 1017 is limited to the calling out by the President of the military to prevent or suppress lawless violence, invasion or rebellion. When in implementing its provisions, pursuant to G.O. No. 5, the

40

or

any

form

of

prior

restraint

on

the

press,

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

vires andunconstitutional. The Court also rules that under Section 17,
Article XII of the Constitution, the President, in the absence of a legislation, cannot take over privately-owned public utility and private business affected with public interest.

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

process bars this Court from making any specific pronouncement of civil, criminal or administrative liabilities.

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

Perhaps, the vital lesson that we must learn from the theorists who On the basis of the relevant and uncontested facts narrated earlier, it is also pristine clear that (1) the warrantless arrest of petitioners Randolf S. David and Ronald Llamas; (2) the dispersal of the rallies and warrantless arrest of the KMU and NAFLU-KMU members; (3) the imposition of standards on media or any prior restraint on the press; and (4) the warrantless search of theTribune offices and the whimsical seizures of some articles for publication and other materials, are not authorized by the Constitution, the law and jurisprudence. Not even by the valid provisions of PP 1017 and G.O. No. 5. WHEREFORE, the Petitions are partly granted. The Court rules that PP 1017 is CONSTITUTIONAL insofar as it constitutes a call by President Gloria Macapagal-Arroyo on the AFP to prevent or suppress lawless violence. However, the provisions of PP 1017 commanding the AFP studied the various competing political philosophies is that, it is possible to grant government the authority to cope with crises without surrendering the two vital principles of constitutionalism:the maintenance of legal limits to arbitrary power, and political responsibility of the government to the governed.[158]

41

to enforce laws not related to lawless violence, as well as decrees promulgated by the President, are declared UNCONSTITUTIONAL. In addition, the provision in PP 1017 declaring national emergency under Section 17, Article VII of the Constitution is CONSTITUTIONAL, but such declaration does not authorize the President to take over privately-owned public utility or business affected with public interest without prior legislation.

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

The warrantless arrest of Randolf S. David and Ronald Llamas; the dispersal and warrantless arrest of the KMU and NAFLU-KMU members during their rallies, in the absence of proof that these petitioners were committing acts constituting lawless violence, invasion or rebellion and violating BP 880; the imposition of standards on media or any form of prior restraint on the press, as well as the warrantless search of the Tribune offices and whimsical seizure of its articles for publication and other materials, are declaredUNCONSTITUTIONAL. No costs SO ORDERED.

42

THIRD DIVISION [G.R. No. 166006, March 14, 2008] PLANTERS PRODUCTS, INC., Petitioner, vs. FERTIPHIL CORPORATION, Respondent. DECISION REYES, R.T., J.: THE Regional Trial Courts (RTC) have the authority and jurisdiction to consider the constitutionality of statutes, executive orders, presidential decrees and other issuances. The Constitution vests that power not only in the Supreme Court but in all Regional Trial Courts. The principle is relevant in this petition for review on certiorari of the Decision[1] of the Court of Appeals (CA) affirming with modification that of the RTC in Makati City,[2]finding petitioner Planters Products, Inc. (PPI) liable to private respondent Fertiphil Corporation (Fertiphil) for the levies it paid under Letter of Instruction (LOI) No. 1465. The Facts

then remitted the amount collected to the Far East Bank and Trust Company, the depositary bank of PPI. Fertiphil paid P6,689,144 to FPA from July 8, 1985 to January 24, 1986.[6] After the 1986 Edsa Revolution, FPA voluntarily stopped the imposition of the P10 levy. With the return of democracy, Fertiphil demanded from PPI a refund of the amounts it paid under LOI No. 1465, but PPI refused to accede to the demand.[7] Fertiphil filed a complaint for collection and damages[8] against FPA and PPI with the RTC in Makati. It questioned the constitutionality of LOI No. 1465 for being unjust, unreasonable, oppressive, invalid and an unlawful imposition that amounted to a denial of due process of law.[9] Fertiphil alleged that the LOI solely favored PPI, a privately owned corporation, which used the proceeds to maintain its monopoly of the fertilizer industry. In its Answer,[10] FPA, through the Solicitor General, countered that the issuance of LOI No. 1465 was a valid exercise of the police power of the State in ensuring the stability of the fertilizer industry in the country. It also averred that Fertiphil did not sustain any damage from the LOI because the burden imposed by the levy fell on the ultimate consumer, not the seller. RTC Disposition

Petitioner PPI and private respondent Fertiphil are private corporations incorporated under Philippine laws.[3] They are both engaged in the importation and distribution of fertilizers, pesticides and agricultural chemicals. On June 3, 1985, then President Ferdinand Marcos, exercising his legislative powers, issued LOI No. 1465 which provided, among others, for the imposition of a capital recovery component (CRC) on the domestic sale of all grades of fertilizers in the Philippines.[4] The LOI provides: 3. The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital contribution component of not less than P10 per bag. This capital contribution shall be collected until adequate capital is raised to make PPI viable. Such capital contribution shall be applied by FPA to all domestic sales of fertilizers in the Philippines.[5] (Underscoring supplied)

On November 20, 1991, the RTC rendered judgment in favor of Fertiphil, disposing as follows: WHEREFORE, in view of the foregoing, the Court hereby renders judgment in favor of the plaintiff and against the defendant Planters Product, Inc., ordering the latter to pay the former: 1) the sum of P6,698,144.00 with interest at 12% from the time of judicial demand; 2) the sum of P100,000 as attorneys fees; 3) the cost of suit. SO ORDERED.[11] Ruling that the imposition of the P10 CRC was an exercise of the States inherent power of taxation, the RTC invalidated the levy for violating the basic principle that taxes can only be levied for public purpose, viz.:

Pursuant to the LOI, Fertiphil paid P10 for every bag of fertilizer it sold in the domestic market to the Fertilizer and Pesticide Authority (FPA). FPA

43

It is apparent that the imposition of P10 per fertilizer bag sold in the country by LOI 1465 is purportedly in the exercise of the power of taxation. It is a settled principle that the power of taxation by the state is plenary. Comprehensive and supreme, the principal check upon its abuse resting in the responsibility of the members of the legislature to their constituents. However, there are two kinds of limitations on the power of taxation: the inherent limitations and the constitutional limitations. One of the inherent limitations is that a tax may be levied only for public purposes: The power to tax can be resorted to only for a constitutionally valid public purpose. By the same token, taxes may not be levied for purely private purposes, for building up of private fortunes, or for the redress of private wrongs. They cannot be levied for the improvement of private property, or for the benefit, and promotion of private enterprises, except where the aid is incident to the public benefit. It is well-settled principle of constitutional law that no general tax can be levied except for the purpose of raising money which is to be expended for public use. Funds cannot be exacted under the guise of taxation to promote a purpose that is not of public interest. Without such limitation, the power to tax could be exercised or employed as an authority to destroy the economy of the people. A tax, however, is not held void on the ground of want of public interest unless the want of such interest is clear. (71 Am. Jur. pp. 371-372) In the case at bar, the plaintiff paid the amount of P6,698,144.00 to the Fertilizer and Pesticide Authority pursuant to the P10 per bag of fertilizer sold imposition under LOI 1465 which, in turn, remitted the amount to the defendant Planters Products, Inc. thru the latters depository bank, Far East Bank and Trust Co. Thus, by virtue of LOI 1465 the plaintiff, Fertiphil Corporation, which is a private domestic corporation, became poorer by the amount of P6,698,144.00 and the defendant, Planters Product, Inc., another private domestic corporation, became richer by the amount of P6,698,144.00. Tested by the standards of constitutionality as set forth in the afore-quoted jurisprudence, it is quite evident that LOI 1465 insofar as it imposes the amount of P10 per fertilizer bag sold in the country and orders that the said amount should go to the defendant Planters Product, Inc. is unlawful because it violates the mandate that a tax can be levied only for a public purpose and not to benefit, aid and promote a private enterprise such as Planters Product, Inc.[12] PPI moved for reconsideration but its motion was denied.[13] PPI then filed a notice of appeal with the RTC but it failed to pay the requisite appeal docket

fee. In a separate but related proceeding, this Court[14] allowed the appeal of PPI and remanded the case to the CA for proper disposition. CA Decision On November 28, 2003, the CA handed down its decision affirming with modification that of the RTC, with the following fallo: IN VIEW OF ALL THE FOREGOING, the decision appealed from is herebyAFFIRMED, subject to the MODIFICATION that the award of attorneys fees is hereby DELETED.[15] In affirming the RTC decision, the CA ruled that the lis mota of the complaint for collection was the constitutionality of LOI No. 1465, thus: The question then is whether it was proper for the trial court to exercise its power to judicially determine the constitutionality of the subject statute in the instant case. As a rule, where the controversy can be settled on other grounds, the courts will not resolve the constitutionality of a law (Lim v. Pacquing,240 SCRA 649 [1995]). The policy of the courts is to avoid ruling on constitutional questions and to presume that the acts of political departments are valid, absent a clear and unmistakable showing to the contrary. However, the courts are not precluded from exercising such power when the following requisites are obtaining in a controversy before it: First, there must be before the court an actual case calling for the exercise of judicial review. Second, the question must be ripe for adjudication. Third, the person challenging the validity of the act must have standing to challenge. Fourth, the question of constitutionality must have been raised at the earliest opportunity; and lastly, the issue of constitutionality must be the very lis mota of the case (Integrated Bar of the Philippines v. Zamora, 338 SCRA 81 [2000]). Indisputably, the present case was primarily instituted for collection and damages. However, a perusal of the complaint also reveals that the instant action is founded on the claim that the levy imposed was an unlawful and unconstitutional special assessment. Consequently, the requisite that the constitutionality of the law in question be the very lis mota of the case is present, making it proper for the trial court to rule on the constitutionality of LOI 1465.[16] The CA held that even on the assumption that LOI No. 1465 was issued under the police power of the state, it is still unconstitutional because it did not promote public welfare. The CA explained:

44

In declaring LOI 1465 unconstitutional, the trial court held that the levy imposed under the said law was an invalid exercise of the States power of taxation inasmuch as it violated the inherent and constitutional prescription that taxes be levied only for public purposes. It reasoned out that the amount collected under the levy was remitted to the depository bank of PPI, which the latter used to advance its private interest. On the other hand, appellant submits that the subject statutes passage was a valid exercise of police power. In addition, it disputes the court a quos findings arguing that the collections under LOI 1465 was for the benefit of Planters Foundation, Incorporated (PFI), a foundation created by law to hold in trust for millions of farmers, the stock ownership of PPI. Of the three fundamental powers of the State, the exercise of police power has been characterized as the most essential, insistent and the least limitable of powers, extending as it does to all the great public needs. It may be exercised as long as the activity or the property sought to be regulated has some relevance to public welfare (Constitutional Law, by Isagani A. Cruz, p. 38, 1995 Edition). Vast as the power is, however, it must be exercised within the limits set by the Constitution, which requires the concurrence of a lawful subject and a lawful method. Thus, our courts have laid down the test to determine the validity of a police measure as follows: (1) the interests of the public generally, as distinguished from those of a particular class, requires its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals (National Development Company v. Philippine Veterans Bank, 192 SCRA 257 [1990]). It is upon applying this established tests that We sustain the trial courts holding LOI 1465 unconstitutional. To be sure, ensuring the continued supply and distribution of fertilizer in the country is an undertaking imbued with public interest. However, the method by which LOI 1465 sought to achieve this is by no means a measure that will promote the public welfare. The governments commitment to support the successful rehabilitation and continued viability of PPI, a private corporation, is an unmistakable attempt to mask the subject statutes impartiality. There is no way to treat the selfinterest of a favored entity, like PPI, as identical with the general interest of the countrys farmers or even the Filipino people in general. Well to stress, substantive due process exacts fairness and equal protection disallows distinction where none is needed. When a statutes public purpose is spoiled

by private interest, the use of police power becomes a travesty which must be struck down for being an arbitrary exercise of government power. To rule in favor of appellant would contravene the general principle that revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit of private individuals.[17] The CA did not accept PPIs claim that the levy imposed under LOI No. 1465 was for the benefit of Planters Foundation, Inc., a foundation created to hold in trust the stock ownership of PPI. The CA stated: Appellant next claims that the collections under LOI 1465 was for the benefit of Planters Foundation, Incorporated (PFI), a foundation created by law to hold in trust for millions of farmers, the stock ownership of PFI on the strength of Letter of Undertaking (LOU) issued by then Prime Minister Cesar Virata on April 18, 1985 and affirmed by the Secretary of Justice in an Opinion dated October 12, 1987, to wit: 2. Upon the effective date of this Letter of Undertaking, the Republic shall cause FPA to include in its fertilizer pricing formula a capital recovery component, the proceeds of which will be used initially for the purpose of funding the unpaid portion of the outstanding capital stock of Planters presently held in trust by Planters Foundation, Inc. (Planters Foundation), which unpaid capital is estimated at approximately P206 million (subject to validation by Planters and Planters Foundation) (such unpaid portion of the outstanding capital stock of Planters being hereafter referred to as the Unpaid Capital), and subsequently for such capital increases as may be required for the continuing viability of Planters. The capital recovery component shall be in the minimum amount of P10 per bag, which will be added to the price of all domestic sales of fertilizer in the Philippines by any importer and/or fertilizer mother company. In this connection, the Republic hereby acknowledges that the advances by Planters to Planters Foundation which were applied to the payment of the Planters shares now held in trust by Planters Foundation, have been assigned to, among others, the Creditors. Accordingly, the Republic, through FPA, hereby agrees to deposit the proceeds of the capital recovery component in the special trust account designated in the notice dated April 2, 1985, addressed by counsel for the Creditors to Planters Foundation. Such proceeds shall be deposited by FPA on or before the 15th day of each month. The capital recovery component shall continue to be charged and collected until payment in full of (a) the Unpaid Capital and/or (b) any shortfall in the payment of the Subsidy Receivables, (c) any carrying cost accruing from the date hereof on the amounts which may be outstanding from time to time of the Unpaid Capital and/or the Subsidy Receivables and (d) the capital

45

increases contemplated in paragraph 2 hereof. For the purpose of the foregoing clause (c), the carrying cost shall be at such rate as will represent the full and reasonable cost to Planters of servicing its debts, taking into account both its peso and foreign currency-denominated obligations. (Records, pp. 42-43) Appellants proposition is open to question, to say the least. The LOU issued by then Prime Minister Virata taken together with the Justice Secretarys Opinion does not preponderantly demonstrate that the collections made were held in trust in favor of millions of farmers. Unfortunately for appellant, in the absence of sufficient evidence to establish its claims, this Court is constrained to rely on what is explicitly provided in LOI 1465 that one of the primary aims in imposing the levy is to support the successful rehabilitation and continued viability of PPI.[18] PPI moved for reconsideration but its motion was denied.[19] It then filed the present petition with this Court. Issues Petitioner PPI raises four issues for Our consideration, viz.: I THE CONSTITUTIONALITY OF LOI 1465 CANNOT BE COLLATERALLY ATTACKED AND BE DECREED VIA A DEFAULT JUDGMENT IN A CASE FILED FOR COLLECTION AND DAMAGES WHERE THE ISSUE OF CONSTITUTIONALITY IS NOT THE VERY LIS MOTA OF THE CASE.NEITHER CAN LOI 1465 BE CHALLENGED BY ANY PERSON OR ENTITY WHICH HAS NO STANDING TO DO SO. II LOI 1465, BEING A LAW IMPLEMENTED FOR THE PURPOSE OF ASSURING THE FERTILIZER SUPPLY AND DISTRIBUTION IN THE COUNTRY, AND FOR BENEFITING A FOUNDATION CREATED BY LAW TO HOLD IN TRUST FOR MILLIONS OF FARMERS THEIR STOCK OWNERSHIP IN PPI CONSTITUTES A VALID LEGISLATION PURSUANT TO THE EXERCISE OF TAXATION AND POLICE POWER FOR PUBLIC PURPOSES. III THE AMOUNT COLLECTED UNDER THE CAPITAL RECOVERY COMPONENT WAS REMITTED TO THE GOVERNMENT, AND BECAME

GOVERNMENT FUNDS PURSUANT TO AN EFFECTIVE AND VALIDLY ENACTED LAW WHICH IMPOSED DUTIES AND CONFERRED RIGHTS BY VIRTUE OF THE PRINCIPLE OF OPERATIVE FACT PRIOR TO ANY DECLARATION OF UNCONSTITUTIONALITY OF LOI 1465. IV THE PRINCIPLE OF UNJUST VEXATION (SHOULD BE ENRICHMENT) FINDS NO APPLICATION IN THE INSTANT CASE.[20] (Underscoring supplied)

Our Ruling We shall first tackle the procedural issues of locus standi and the jurisdiction of the RTC to resolve constitutional issues.

Fertiphil has locus standi because it suffered direct injury; doctrine of standing is a mere procedural technicality which may be waived.
PPI argues that Fertiphil has no locus standi to question the constitutionality of LOI No. 1465 because it does not have a personal and substantial interest in the case or will sustain direct injury as a result of its enforcement.[21] It asserts that Fertiphil did not suffer any damage from the CRC imposition because incidence of the levy fell on the ultimate consumer or the farmers themselves, not on the seller fertilizer company.[22] We cannot agree. The doctrine of locus standi or the right of appearance in a court of justice has been adequately discussed by this Court in a catena of cases. Succinctly put, the doctrine requires a litigant to have a material interest in the outcome of a case. In private suits, locus standi requires a litigant to be a real party in interest, which is defined as the party who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit.[23] In public suits, this Court recognizes the difficulty of applying the doctrine especially when plaintiff asserts a public right on behalf of the general public because of conflicting public policy issues. [24] On one end, there is the right of the ordinary citizen to petition the courts to be freed from unlawful government intrusion and illegal official action. At the other end, there is the

46

public policy precluding excessive judicial interference in official acts, which may unnecessarily hinder the delivery of basic public services. In this jurisdiction, We have adopted the direct injury test to determine locus standiin public suits. In People v. Vera,[25] it was held that a person who impugns the validity of a statute must have a personal and substantial interest in the case such that he has sustained, or will sustain direct injury as a result. The direct injury test in public suits is similar to the real party in interest rule for private suits under Section 2, Rule 3 of the 1997 Rules of Civil Procedure.[26] Recognizing that a strict application of the direct injury test may hamper public interest, this Court relaxed the requirement in cases of transcendental importance or with far reaching implications. Being a mere procedural technicality, it has also been held that locus standi may be waived in the public interest.[27] Whether or not the complaint for collection is characterized as a private or public suit, Fertiphil has locus standi to file it. Fertiphil suffered a direct injury from the enforcement of LOI No. 1465. It was required, and it did pay, the P10 levy imposed for every bag of fertilizer sold on the domestic market. It may be true that Fertiphil has passed some or all of the levy to the ultimate consumer, but that does not disqualify it from attacking the constitutionality of the LOI or from seeking a refund. As seller, it bore the ultimate burden of paying the levy. It faced the possibility of severe sanctions for failure to pay the levy. The fact of payment is sufficient injury to Fertiphil. Moreover, Fertiphil suffered harm from the enforcement of the LOI because it was compelled to factor in its product the levy. The levy certainly rendered the fertilizer products of Fertiphil and other domestic sellers much more expensive. The harm to their business consists not only in fewer clients because of the increased price, but also in adopting alternative corporate strategies to meet the demands of LOI No. 1465. Fertiphil and other fertilizer sellers may have shouldered all or part of the levy just to be competitive in the market. The harm occasioned on the business of Fertiphil is sufficient injury for purposes of locus standi. Even assuming arguendo that there is no direct injury, We find that the liberal policy consistently adopted by this Court on locus standi must apply. The issues raised by Fertiphil are of paramount public importance. It involves not only the constitutionality of a tax law but, more importantly, the

use of taxes for public purpose. Former President Marcos issued LOI No. 1465 with the intention of rehabilitating an ailing private company. This is clear from the text of the LOI. PPI is expressly named in the LOI as the direct beneficiary of the levy. Worse, the levy was made dependent and conditional upon PPI becoming financially viable. The LOI provided that the

capital contribution shall be collected until adequate capital is raised to make PPI viable.
The constitutionality of the levy is already in doubt on a plain reading of the statute. It is Our constitutional duty to squarely resolve the issue as the final arbiter of all justiciable controversies. The doctrine of standing, being a mere procedural technicality, should be waived, if at all, to adequately thresh out an important constitutional issue.

RTC may resolve constitutional issues; the constitutional issue was adequately raised in the complaint; it is the lis mota of the case.
PPI insists that the RTC and the CA erred in ruling on the constitutionality of the LOI. It asserts that the constitutionality of the LOI cannot be collaterally attacked in a complaint for collection.[28] Alternatively, the resolution of the constitutional issue is not necessary for a determination of the complaint for collection.[29] Fertiphil counters that the constitutionality of the LOI was adequately pleaded in its complaint. It claims that the constitutionality of LOI No. 1465 is the very lis mota of the case because the trial court cannot determine its claim without resolving the issue.[30] It is settled that the RTC has jurisdiction to resolve the constitutionality of a statute, presidential decree or an executive order. This is clear from Section 5, Article VIII of the 1987 Constitution, which provides: SECTION 5. The Supreme Court shall have the following powers: xxxx (2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may provide, final judgments and orders of lower courts in: (a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree,

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proclamation, order, instruction,ordinance, or regulation is in question. (Underscoring supplied) In Mirasol v. Court of Appeals,[31] this Court recognized the power of the RTC to resolve constitutional issues, thus: On the first issue. It is settled that Regional Trial Courts have the authority and jurisdiction to consider the constitutionality of a statute, presidential decree, or executive order. The Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation not only in this Court, but in all Regional Trial Courts.[32] In the recent case of Equi-Asia Placement, Inc. v. Department of Foreign Affairs,[33]this Court reiterated: There is no denying that regular courts have jurisdiction over cases involving the validity or constitutionality of a rule or regulation issued by administrative agencies. Such jurisdiction, however, is not limited to the Court of Appeals or to this Court alone for even the regional trial courts can take cognizance of actions assailing a specific rule or set of rules promulgated by administrative bodies. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts.[34] Judicial review of official acts on the ground of unconstitutionality may be sought or availed of through any of the actions cognizable by courts of justice, not necessarily in a suit for declaratory relief. Such review may be had in criminal actions, as in People v. Ferrer[35] involving the constitutionality of the now defunct Anti-Subversion law, or in ordinary actions, as in Krivenko v. Register of Deeds[36] involving the constitutionality of laws prohibiting aliens from acquiring public lands. The constitutional issue, however, (a) must be properly raised and presented in the case, and (b) its resolution is necessary to a determination of the case, i.e., the issue of constitutionality must be the very lis mota presented.[37] Contrary to PPIs claim, the constitutionality of LOI No. 1465 was properly and adequately raised in the complaint for collection filed with the RTC. The pertinent portions of the complaint allege: 6. The CRC of P10 per bag levied under LOI 1465 on domestic sales of all grades of fertilizer in the Philippines, is unlawful, unjust, uncalled for, unreasonable, inequitable and oppressive because: xxxx

(c) It favors only one private domestic corporation, i.e., defendant PPPI, and imposed at the expense and disadvantage of the other fertilizer importers/distributors who were themselves in tight business situation and were then exerting all efforts and maximizing management and marketing skills to remain viable; xxxx (e) It was a glaring example of crony capitalism, a forced program through which the PPI, having been presumptuously masqueraded as the fertilizer industry itself, was the sole and anointed beneficiary; 7. The CRC was an unlawful; and unconstitutional special assessment and its imposition is tantamount to illegal exaction amounting to a denial of due process since the persons of entities which had to bear the burden of paying the CRC derived no benefit therefrom; that on the contrary it was used by PPI in trying to regain its former despicable monopoly of the fertilizer industry to the detriment of other distributors and importers.[38] (Underscoring supplied)

The constitutionality of LOI No. 1465 is also the very lis mota of the complaint for collection. Fertiphil filed the complaint to compel PPI to refund the levies paid under the statute on the ground that the law imposing the levy is unconstitutional. The thesis is that an unconstitutional law is void. It has no legal effect. Being void, Fertiphil had no legal obligation to pay the levy. Necessarily, all levies duly paid pursuant to an unconstitutional law should be refunded under the civil code principle against unjust enrichment. The refund is a mere consequence of the law being declared unconstitutional. The RTC surely cannot order PPI to refund Fertiphil if it does not declare the LOI unconstitutional. It is the unconstitutionality of the LOI which triggers the refund. The issue of constitutionality is the very lis mota of the complaint with the RTC.

The P10 levy under LOI No. 1465 is an exercise of the power of taxation.
At any rate, the Court holds that the RTC and the CA did not err in ruling against the constitutionality of the LOI. PPI insists that LOI No. 1465 is a valid exercise either of the police power or the power of taxation. It claims that the LOI was implemented for the purpose of assuring the fertilizer supply and distribution in the country and for benefiting a foundation created by law to hold in trust for millions of farmers their stock ownership in PPI.

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Fertiphil counters that the LOI is unconstitutional because it was enacted to give benefit to a private company. The levy was imposed to pay the corporate debt of PPI. Fertiphil also argues that, even if the LOI is enacted under the police power, it is still unconstitutional because it did not promote the general welfare of the people or public interest. Police power and the power of taxation are inherent powers of the State. These powers are distinct and have different tests for validity. Police power is the power of the State to enact legislation that may interfere with personal liberty or property in order to promote the general welfare,[39] while the power of taxation is the power to levy taxes to be used for public purpose. The main purpose of police power is the regulation of a behavior or conduct, while taxation is revenue generation. The lawful subjects and lawful means tests are used to determine the validity of a law enacted under the police power.[40] The power of taxation, on the other hand, is circumscribed by inherent and constitutional limitations. We agree with the RTC that the imposition of the levy was an exercise by the State of its taxation power. While it is true that the power of taxation can be used as an implement of police power,[41] the primary purpose of the levy is revenue generation. If the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a tax.[42] In Philippine Airlines, Inc. v. Edu,[43] it was held that the imposition of a vehicle registration fee is not an exercise by the State of its police power, but of its taxation power, thus: It is clear from the provisions of Section 73 of Commonwealth Act 123 and Section 61 of the Land Transportation and Traffic Code that the legislative intent and purpose behind the law requiring owners of vehicles to pay for their registration is mainly to raise funds for the construction and maintenance of highways and to a much lesser degree, pay for the operating expenses of the administering agency. x x x Fees may be properly regarded as taxes even though they also serve as an instrument of regulation. Taxation may be made the implement of the state's police power (Lutz v. Araneta, 98 Phil. 148). If the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a tax. Such is the case of motor vehicle registration fees. The same provision appears as Section 59(b) in the Land Transportation Code. It is patent therefrom that the legislators had in mind a regulatory tax as the law

refers to the imposition on the registration, operation or ownership of a motor vehicle as a tax or fee. x x x Simply put, if the exaction under Rep. Act 4136 were merely a regulatory fee, the imposition in Rep. Act 5448 need not be an additional tax. Rep. Act 4136 also speaks of other fees such as the special permit fees for certain types of motor vehicles (Sec. 10) and additional fees for change of registration (Sec. 11). These are not to be understood as taxes because such fees are very minimal to be revenue-raising. Thus, they are not mentioned by Sec. 59(b) of the Code as taxes like the motor vehicle registration fee and chauffeurs license fee. Such fees are to go into the expenditures of the Land Transportation Commission as provided for in the last proviso of Sec. 61.[44](Underscoring supplied) The P10 levy under LOI No. 1465 is too excessive to serve a mere regulatory purpose. The levy, no doubt, was a big burden on the seller or the ultimate consumer. It increased the price of a bag of fertilizer by as much as five percent.[45] A plain reading of the LOI also supports the conclusion that the levy was for revenue generation. The LOI expressly provided that the levy was imposed until adequate capital is raised to make PPI viable.

Taxes are exacted only for a public purpose. The P10 levy is unconstitutional because it was not for a public purpose. The levy was imposed to give undue benefit to PPI.
An inherent limitation on the power of taxation is public purpose. Taxes are exacted only for a public purpose. They cannot be used for purely private purposes or for the exclusive benefit of private persons.[46] The reason for this is simple. The power to tax exists for the general welfare; hence, implicit in its power is the limitation that it should be used only for a public purpose. It would be a robbery for the State to tax its citizens and use the funds generated for a private purpose. As an old United States case bluntly put it: To lay with one hand, the power of the government on the property of the citizen, and with the other to bestow it upon favored individuals to aid private enterprises and build up private fortunes, is nonetheless a robbery because it is done under the forms of law and is called taxation.[47] The term public purpose is not defined. It is an elastic concept that can be hammered to fit modern standards. Jurisprudence states that public purpose should be given a broad interpretation. It does not only pertain to those purposes which are traditionally viewed as essentially government functions, such as building roads and delivery of basic services, but also includes those purposes designed to promote social justice. Thus, public

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money may now be used for the relocation of illegal settlers, low-cost housing and urban or agrarian reform. While the categories of what may constitute a public purpose are continually expanding in light of the expansion of government functions, the inherent requirement that taxes can only be exacted for a public purpose still stands. Public purpose is the heart of a tax law. When a tax law is only a mask to exact funds from the public when its true intent is to give undue benefit and advantage to a private enterprise, that law will not satisfy the requirement of public purpose. The purpose of a law is evident from its text or inferable from other secondary sources. Here, We agree with the RTC and that CA that the levy imposed under LOI No. 1465 was not for a public purpose.

Third, the RTC and the CA held that the levies paid under the LOI were
directly remitted and deposited by FPA to Far East Bank and Trust Company, the depositary bank of PPI.[49] This proves that PPI benefited from the LOI. It is also proves that the main purpose of the law was to give undue benefit and advantage to PPI.

Fourth, the levy was used to pay the corporate debts of PPI. A reading of the
Letter of Understanding[50] dated May 18, 1985 signed by then Prime Minister Cesar Virata reveals that PPI was in deep financial problem because of its huge corporate debts. There were pending petitions for rehabilitation against PPI before the Securities and Exchange Commission. The government guaranteed payment of PPIs debts to its foreign creditors. To fund the payment, President Marcos issued LOI No. 1465. The pertinent portions of the letter of understanding read: Republic of the Philippines Office of the Prime Minister Manila LETTER OF UNDERTAKING May 18, 1985 TO: THE BANKING AND FINANCIAL INSTITUTIONS LISTED IN ANNEX A HERETO WHICH ARE CREDITORS (COLLECTIVELY, THE CREDITORS) OF PLANTERS PRODUCTS, INC. (PLANTERS) Gentlemen: This has reference to Planters which is the principal importer and distributor of fertilizer, pesticides and agricultural chemicals in the Philippines. As regards Planters, the Philippine Government confirms its awareness of the following: (1) that Planters has outstanding obligations in foreign currency and/or pesos, to the Creditors, (2) that Planters is currently experiencing financial difficulties, and (3) that there are presently pending with the Securities and Exchange Commission of the Philippines a petition filed at Planters own behest for the suspension of payment of all its obligations, and a separate petition filed by Manufacturers Hanover Trust Company, Manila Offshore Branch for the appointment of a rehabilitation receiver for Planters. In connection with the foregoing, the Republic of the Philippines (the Republic) confirms that it considers and continues to consider Planters as a

First, the LOI expressly provided that the levy be imposed to benefit PPI, a
private company. The purpose is explicit from Clause 3 of the law, thus: 3. The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital contribution component of not less than P10 per bag. This capital contribution shall be collected until adequate capital is raised to make PPI viable. Such capital contribution shall be applied by FPA to all domestic sales of fertilizers in the Philippines.[48] (Underscoring supplied)

It is a basic rule of statutory construction that the text of a statute should be given a literal meaning. In this case, the text of the LOI is plain that the levy was imposed in order to raise capital for PPI. The framers of the LOI did not even hide the insidious purpose of the law. They were cavalier enough to name PPI as the ultimate beneficiary of the taxes levied under the LOI. We find it utterly repulsive that a tax law would expressly name a private company as the ultimate beneficiary of the taxes to be levied from the public. This is a clear case of crony capitalism.

Second, the LOI provides that the imposition of the P10 levy was conditional
and dependent upon PPI becoming financially viable. This suggests that the levy was actually imposed to benefit PPI. The LOI notably does not fix a maximum amount when PPI is deemed financially viable. Worse, the liability of Fertiphil and other domestic sellers of fertilizer to pay the levy is made indefinite. They are required to continuously pay the levy until adequate capital is raised for PPI.

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major fertilizer distributor. Accordingly, for and in consideration of your expressed willingness to consider and participate in the effort to rehabilitate Planters, the Republic hereby manifests its full and unqualified support of the successful rehabilitation and continuing viability of Planters, and to that end, hereby binds and obligates itself to the creditors and Planters, as follows: xxxx

the levy was imposed to ensure the stability of the fertilizer industry in the country. The letter of understanding and the plain text of the LOI clearly indicate that the levy was exacted for the benefit of a private corporation. All told, the RTC and the CA did not err in holding that the levy imposed under LOI No. 1465 was not for a public purpose. LOI No. 1465 failed to comply with the public purpose requirement for tax laws.

2. Upon the effective date of this Letter of Undertaking, the Republic shall cause FPA to include in its fertilizer pricing formula a capital recovery component, the proceeds of which will be used initially for the purpose of funding the unpaid portion of the outstanding capital stock of Planters presently held in trust by Planters Foundation, Inc. (Planters Foundation), which unpaid capital is estimated at approximately P206 million (subject to validation by Planters and Planters Foundation) such unpaid portion of the outstanding capital stock of Planters being hereafter referred to as the Unpaid Capital), and subsequently for such capital increases as may be required for the continuing viability of Planters. xxxx

The LOI is still unconstitutional even if enacted under the police power; it did not promote public interest.
Even if We consider LOI No. 1695 enacted under the police power of the State, it would still be invalid for failing to comply with the test of lawful subjects and lawful means. Jurisprudence states the test as follows: (1) the interest of the public generally, as distinguished from those of particular class, requires its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.[52] For the same reasons as discussed, LOI No. 1695 is invalid because it did not promote public interest. The law was enacted to give undue advantage to a private corporation. We quote with approval the CA ratiocination on this point, thus: It is upon applying this established tests that We sustain the trial courts holding LOI 1465 unconstitutional. To be sure, ensuring the continued supply and distribution of fertilizer in the country is an undertaking imbued with public interest. However, the method by which LOI 1465 sought to achieve this is by no means a measure that will promote the public welfare. The governments commitment to support the successful rehabilitation and continued viability of PPI, a private corporation, is an unmistakable attempt to mask the subject statutes impartiality. There is no way to treat the selfinterest of a favored entity, like PPI, as identical with the general interest of the countrys farmers or even the Filipino people in general. Well to stress, substantive due process exacts fairness and equal protection disallows distinction where none is needed.When a statutes public purpose is spoiled by private interest, the use of police power becomes a travesty which must be struck down for being an arbitrary exercise of government power. To rule in favor of appellant would contravene the general principle that revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit of private individuals. (Underscoring supplied)

The capital recovery component shall continue to be charged and collected until payment in full of (a) the Unpaid Capital and/or (b) any shortfall in the payment of the Subsidy Receivables, (c) any carrying cost accruing from the date hereof on the amounts which may be outstanding from time to time of the Unpaid Capital and/or the Subsidy Receivables, and (d) the capital increases contemplated in paragraph 2 hereof. For the purpose of the foregoing clause (c), the carrying cost shall be at such rate as will represent the full and reasonable cost to Planters of servicing its debts, taking into account both its peso and foreign currency-denominated obligations. REPUBLIC OF THE PHILIPPINES By: (signed) CESAR E. A. VIRATA Prime Minister and Minister of Finance[51] It is clear from the Letter of Understanding that the levy was imposed precisely to pay the corporate debts of PPI. We cannot agree with PPI that

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The general rule is that an unconstitutional law is void; the doctrine of operative fact is inapplicable.
PPI also argues that Fertiphil cannot seek a refund even if LOI No. 1465 is declared unconstitutional. It banks on the doctrine of operative fact, which provides that an unconstitutional law has an effect before being declared unconstitutional. PPI wants to retain the levies paid under LOI No. 1465 even if it is subsequently declared to be unconstitutional. We cannot agree. It is settled that no question, issue or argument will be entertained on appeal, unless it has been raised in the court a quo.[53] PPI did not raise the applicability of the doctrine of operative fact with the RTC and the CA. It cannot belatedly raise the issue with Us in order to extricate itself from the dire effects of an unconstitutional law. At any rate, We find the doctrine inapplicable. The general rule is that an unconstitutional law is void. It produces no rights, imposes no duties and affords no protection. It has no legal effect. It is, in legal contemplation, inoperative as if it has not been passed.[54] Being void, Fertiphil is not required to pay the levy. All levies paid should be refunded in accordance with the general civil code principle against unjust enrichment. The general rule is supported by Article 7 of the Civil Code, which provides: ART. 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not be excused by disuse or custom or practice to the contrary. When the courts declare a law to be inconsistent with the Constitution, the former shall be void and the latter shall govern. The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity and fair play.[55] It nullifies the effects of an unconstitutional law by recognizing that the existence of a statute prior to a determination of unconstitutionality is an operative fact and may have consequences which cannot always be ignored. The past cannot always be erased by a new judicial declaration.[56] The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who have relied on the invalid law. Thus, it was applied to a criminal case when a declaration of unconstitutionality would put the accused in double jeopardy[57] or would put in limbo the acts done by a municipality in reliance upon a law creating it.[58]

Here, We do not find anything iniquitous in ordering PPI to refund the amounts paid by Fertiphil under LOI No. 1465. It unduly benefited from the levy. It was proven during the trial that the levies paid were remitted and deposited to its bank account. Quite the reverse, it would be inequitable and unjust not to order a refund. To do so would unjustly enrich PPI at the expense of Fertiphil. Article 22 of the Civil Code explicitly provides that every person who, through an act of performance by another comes into possession of something at the expense of the latter without just or legal ground shall return the same to him. We cannot allow PPI to profit from an unconstitutional law. Justice and equity dictate that PPI must refund the amounts paid by Fertiphil. WHEREFORE, the petition is DENIED. The Court of Appeals Decision dated November 28, 2003 is AFFIRMED. SO ORDERED.

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EN BANC

[G.R. No. 158540. August 3, 2005]

SOUTHERN CROSS CEMENT CORPORATION, petitioner, vs. CEMENT MANUFACTURERS ASSOCIATION OF THE PHILIPPINES, THE SECRETARY OF THE DEPARTMENT OF TRADE AND INDUSTRY, THE SECRETARY OF THE DEPARTMENT OF FINANCE and THE COMMISSIONER OF THE BUREAU OF CUSTOMS, respondents. RESOLUTION TINGA, J.: Cement is hardly an exciting subject for litigation. Still, the parties in this case have done their best to put up a spirited advocacy of their respective positions, throwing in everything including the proverbial kitchen sink. At present, the burden of passion, if not proof, has shifted to public respondents Department of Trade and Industry (DTI) and private respondent Philippine Cement Manufacturers Corporation (Philcemcor),[1] who now seek reconsideration of our Decision dated 8 July 2004 (Decision), which granted the petition of petitioner Southern Cross Cement Corporation (Southern Cross). This case, of course, is ultimately not just about cement. For respondents, it is about love of country and the future of the domestic industry in the face of foreign competition. For this Court, it is about elementary statutory construction, constitutional limitations on the executive power to impose tariffs and similar measures, and obedience to the law. Just as much was asserted in the Decision, and the same holds true with this present Resolution. An extensive narration of facts can be found in the Decision.[2] As can well be recalled, the case centers on the interpretation of provisions of Republic Act No. 8800, the Safeguard Measures Act (SMA), which was one of the laws enacted by Congress soon after the Philippines ratified the General Agreement on Tariff and Trade (GATT) and the World Trade Organization (WTO) Agreement.[3] The SMA provides the structure and mechanics for the imposition of emergency measures, including tariffs, to protect domestic industries and producers from increased imports which inflict or could inflict serious injury on them.[4]

A brief summary as to how the present petition came to be filed by Southern Cross. Philcemcor, an association of at least eighteen (18) domestic cement manufacturers filed with the DTI a petition seeking the imposition of safeguard measures on gray Portland cement,[5] in accordance with the SMA. After the DTI issued a provisional safeguard measure, [6] the application was referred to the Tariff Commission for a formal investigation pursuant to Section 9 of the SMA and its Implementing Rules and Regulations, in order to determine whether or not to impose a definitive safeguard measure on imports of gray Portland cement. The Tariff Commission held public hearings and conducted its own investigation, then on 13 March 2002, issued its Formal Investigation Report (Report). The Report determined as follows: The elements of serious injury and imminent threat of serious injury not having been established, it is hereby recommended that no definitive general safeguard measure be imposed on the importation of gray Portland cement.[7] The DTI sought the opinion of the Secretary of Justice whether it could still impose a definitive safeguard measure notwithstanding the negative finding of the Tariff Commission. After the Secretary of Justice opined that the DTI could not do so under the SMA,[8] the DTI Secretary then promulgated a Decision[9] wherein he expressed the DTIs disagreement with the conclusions of the Tariff Commission, but at the same time, ultimately denying Philcemcors application for safeguard measures on the ground that the he was bound to do so in light of the Tariff Commissions negative findings.[10] Philcemcor challenged this Decision of the DTI Secretary by filing with Court of Appeals a Petition for Certiorari, Prohibition and Mandamus[11] seeking to set aside the DTI Decision, as well as the Tariff Commissions Report. It prayed that the Court of Appeals direct the DTI Secretary to disregard the Report and to render judgment independently of the Report. Philcemcor argued that the DTI Secretary, vested as he is under the law with the power of review, is not bound to adopt the recommendations of the Tariff Commission; and, that the Report is void, as it is predicated on a flawed framework, inconsistent inferences and erroneous methodology. [12] the The Court of Appeals Twelfth Division, in a Decision[13] penned by Court of Appeals Associate Justice Elvi John Asuncion,[14] partially granted Philcemcors petition. The appellate court ruled that it had jurisdiction over the petition for certiorari since it alleged grave abuse of discretion. While it refused to annul the findings of the Tariff Commission,[15] it also held that the DTI Secretary was not bound by the factual findings of the Tariff Commission since such findings are merely recommendatory and they fall within the ambit of the Secretarys discretionary review. It determined that the legislative intent is to grant the DTI Secretary the power to make a final decision on the Tariff Commissions recommendation.[16]

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On 23 June 2003, Southern Cross filed the present petition, arguing that the Court of Appeals has no jurisdiction over Philcemcors petition, as the proper remedy is a petition for review with the CTA conformably with the SMA, and; that the factual findings of the Tariff Commission on the existence or non-existence of conditions warranting the imposition of general safeguard measures are binding upon the DTI Secretary. Despite the fact that the Court of Appeals Decision had not yet become final, its binding force was cited by the DTI Secretary when he issued a new Decision on 25 June 2003, wherein he ruled that that in light of the appellate courts Decision, there was no longer any legal impediment to his deciding Philcemcors application for definitive safeguard measures.[17] He made a determination that, contrary to the findings of the Tariff Commission, the local cement industry had suffered serious injury as a result of the import surges.[18] Accordingly, he imposed a definitive safeguard measure on the importation of gray Portland cement, in the form of a definitive safeguard duty in the amount ofP20.60/40 kg. bag for three years on imported gray Portland Cement.[19] On 7 July 2003, Southern Cross filed with the Court a Very Urgent Application for a Temporary Restraining Order and/or A Writ of Preliminary Injunction (TRO Application), seeking to enjoin the DTI Secretary from enforcing his Decision of 25 June 2003 in view of the pending petition before this Court. Philcemcor filed an opposition, claiming, among others, that it is not this Court but the CTA that has jurisdiction over the application under the law. On 1 August 2003, Southern Cross filed with the CTA a Petition for Review, assailing the DTI Secretarys 25 June 2003 Decision which imposed the definite safeguard measure. Yet Southern Cross did not promptly inform this Court about this filing. The first time the Court would learn about this Petition with the CTA was when Southern Cross mentioned such fact in a pleading dated 11 August 2003 and filed the next day with this Court.[20] Philcemcor argued before this Court that Southern Cross had deliberately and willfully resorted to forum-shopping; that the CTA, being a special court of limited jurisdiction, could only review the ruling of the DTI Secretary when a safeguard measure is imposed; and that the factual findings of the Tariff Commission are not binding on the DTI Secretary.[21] After giving due course to Southern Crosss Petition, the Court called the case for oral argument on 18 February 2004.[22] At the oral argument, attended by the counsel for Philcemcor and Southern Cross and the Office of the Solicitor General, the Court simplified the issues in this wise: (i) whether the Decision of the DTI Secretary is appealable to the CTA or the Court of Appeals; (ii) assuming that the Court of Appeals has jurisdiction, whether its Decision is in accordance with law; and, whether a Temporary Restraining Order is warranted.[23]

After the parties had filed their respective memoranda, the Courts Second Division, to which the case had been assigned, promulgated itsDecision granting Southern Crosss Petition.[24]The Decision was unanimous, without any separate or concurring opinion. The Court ruled that the Court of Appeals had no jurisdiction over Philcemcors Petition, the proper remedy under Section 29 of the SMA being a petition for review with the CTA; and that the Court of Appeals erred in ruling that the DTI Secretary was not bound by the negative determination of the Tariff Commission and could therefore impose the general safeguard measures, since Section 5 of the SMA precisely required that the Tariff Commission make a positive final determination before the DTI Secretary could impose these measures. Anent the argument that Southern Cross had committed forum-shopping, the Court concluded that there was no evident malicious intent to subvert procedural rules so as to match the standard under Section 5, Rule 7 of the Rules of Court of willful and deliberate forum shopping. Accordingly, the Decision of the Court of Appeals dated 5 June 2003 was declared null and void. The Court likewise found it necessary to nullify the Decision of the DTI Secretary dated 25 June 2003, rendered after the filing of this presentPetition. This Decision by the DTI Secretary had cited the obligatory force of the null and void Court of Appeals Decision, notwithstanding the fact that the decision of the appellate court was not yet final and executory. Considering that the decision of the Court of Appeals was a nullity to begin with, the inescapable conclusion was that the new decision of the DTI Secretary, prescinding as it did from the imprimatur of the decision of the Court of Appeals, was a nullity as well. After the Decision was reported in the media, there was a flurry of newspaper articles citing alleged negative reactions to the ruling by the counsel for Philcemcor, the DTI Secretary, and others.[25] Both respondents promptly filed their respective motions for reconsideration. On 21 September 2004, the Court En Banc resolved, upon motion of respondents, to accept the petition and resolve the Motions for Reconsideration.[26] The case was then reheard[27] on oral argument on 1 March 2005. During the hearing, the Court elicited from the parties their arguments on the two central issues as discussed in the assailed Decision, pertaining to the jurisdictional aspect and to the substantive aspect of whether the DTI Secretary may impose a general safeguard measure despite a negative determination by the Tariff Commission. The Court chose not to hear argumentation on the peripheral issue of forum-shopping,[28] although this question shall be tackled herein shortly. Another point of concern emerged during oral arguments on the exercise of quasi-judicial powers by the Tariff Commission, and the parties were required by the Court to discuss in their respective memoranda whether the Tariff Commission could validly exercise quasi-judicial powers in the exercise of its mandate under the SMA.

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The Court has likewise been notified that subsequent to the rendition of the Courts Decision, Philcemcor filed a Petition for Extension of the Safeguard Measure with the DTI, which has been referred to the Tariff Commission.[29] In an Urgent Motion dated 21 December 2004, Southern Cross prayed that Philcemcor, the DTI, the Bureau of Customs, and the Tariff Commission be directed to cease and desist from taking any and all actions pursuant to or under the null and void CA Decision and DTI Decision, including proceedings to extend the safeguard measure.[30] In a Manifestation and Motion dated 23 June 2004, the Tariff Commission informed the Court that since no prohibitory injunction or order of such nature had been issued by any court against the Tariff Commission, the Commission proceeded to complete its investigation on the petition for extension, pursuant to Section 9 of the SMA, but opted to defer transmittal of its report to the DTI Secretary pending guidance from this Court on the propriety of such a step considering this pending Motion for Reconsideration. In a Resolution dated 5 July 2005, the Court directed the parties to maintain the status quo effective of even date, and until further orders from this Court. The denial of the pending motions for reconsideration will obviously render the pending petition for extension academic.

Section 29. Judicial Review. Any interested party who is adversely affected by the ruling of the Secretary in connection with the imposition of a safeguard measure may file with the CTA, a petition for review of such ruling within thirty (30) days from receipt thereof. Provided, however, that the filing of such petition for review shall not in any way stop, suspend or otherwise toll the imposition or collection of the appropriate tariff duties or the adoption of other appropriate safeguard measures, as the case may be. The petition for review shall comply with the same requirements and shall follow the same rules of procedure and shall be subject to the same disposition as in appeals in connection with adverse rulings on tax matters to the Court of Appeals.[32] (Emphasis supplied) The matter is crucial for if the CTA properly had jurisdiction over the petition challenging the DTI Secretarys ruling not to impose a safeguard measure, then the special civil action of certiorari resorted to instead by Philcemcor would not avail, owing to the existence of a plain, speedy and adequate remedy in the ordinary course of law.[33] The Court of Appeals, in asserting that it had jurisdiction, merely cited the general rule on certiorari jurisdiction without bothering to refer to, or possibly even study, the import of Section 29. In contrast, this Court duly considered the meaning and ramifications of Section 29, concluding that it provided for a plain, speedy and adequate remedy that Philcemcor could have resorted to instead of filing the special civil action before the Court of Appeals. Philcemcor still holds on to its hypothesis that the petition for review allowed under Section 29 lies only if the DTI Secretarys ruling imposes a safeguard measure. If, on the other hand, the DTI Secretarys ruling is not to impose a safeguard measure, judicial review under Section 29 could not be resorted to since the provision refers to rulings in connection with the imposition of the safeguard measure, as opposed to the nonimposition. Since the Decision dated 5 April 2002 resolved against imposing a safeguard measure, Philcemcor claims that the proper remedial recourse is a petition for certiorari with the Court of Appeals. Interestingly, Republic Act No. 9282, promulgated on 30 March 2004, expressly vests unto the CTA jurisdiction over [d]ecisions of the Secretary of Trade and Industry, in case of nonagricultural product, commodity or article . . . involving . . . safeguard measures under Republic Act No. 8800, where either party may appeal the decision to impose or not to impose said duties.[34] It is clear that any future attempts to advance the literalist position of the respondents would consequently fail. However, since Republic Act No. 9282 has no retroactive effect, this Court had to decide whether Section 29 vests jurisdiction on the CTA over rulings of the DTI Secretary not to impose a safeguard measure. And the Court, in its assailed Decision, ruled that the CTA is endowed with such jurisdiction.

I. Jurisdiction of the Court of Tax Appeals Under Section 29 of the SMA

The first core issue resolved in the assailed Decision was whether the Court of Appeals had jurisdiction over the special civil action forcertiorari filed by Philcemcor assailing the 5 April 2002 Decision of the DTI Secretary. The general jurisdiction of the Court of Appeals over special civil actions for certiorari is beyond doubt. The Constitution itself assures that judicial review avails 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. At the same time, the special civil action of certiorari is available only when there is no plain, speedy and adequate remedy in the ordinary course of law. [31] Philcemcors recourse of special civil action before the Court of Appeals to challenge the Decision of the DTI Secretary not to impose the general safeguard measures is not based on the SMA, but on the general rule on certiorari. Thus, the Court proceeded to inquire whether indeed there was no other plain, speedy and adequate remedy in the ordinary course of law that would warrant the allowance of Philcemcors special civil action. The answer hinged on the proper interpretation of Section 29 of the SMA, which reads:

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Both respondents reiterate their fundamentalist reading that Section 29 authorizes the petition for review before the CTA only when the DTI Secretary decides to impose a safeguard measure, but not when he decides not to. In doing so, they fail to address what the Court earlier pointed out would be the absurd consequences if their interpretation is followed to its logical end. But in affirming, as the Court now does, its previous holding that the CTA has jurisdiction over petitions for review questioning the nonimposition of safeguard measures by the DTI Secretary, the Court relies on the plain reading that Section 29 explicitly vests jurisdiction over such petitions on the CTA. Under Section 29, there are three requisites to enable the CTA to acquire jurisdiction over the petition for review contemplated therein: (i) there must be a ruling by the DTI Secretary; (ii) the petition must be filed by an interested party adversely affected by the ruling; and (iii) such ruling must be in connection with the imposition of a safeguard measure. Obviously, there are differences between a ruling for the imposition of a safeguard measure, and one issued in connection with the imposition of a safeguard measure. The first adverts to a singular type of ruling, namely one that imposes a safeguard measure. The second does not contemplate only one kind of ruling, but a myriad of rulings issued in connection with the imposition of a safeguard measure. Respondents argue that the Court has given an expansive interpretation to Section 29, contrary to the established rule requiring strict construction against the existence of jurisdiction in specialized courts. [35] But it is the express provision of Section 29, and not this Court, that mandates CTA jurisdiction to be broad enough to encompass more than just a ruling imposing the safeguard measure. The key phrase remains in connection with. It has connotations that are obvious even to the layman. A ruling issued in connection with the imposition of a safeguard measure would be one that bears some relation to the imposition of a safeguard measure. Obviously, a ruling imposing a safeguard measure is covered by the phrase in connection with, but such ruling is by no means exclusive. Rulings which modify, suspend or terminate a safeguard measure are necessarily in connection with the imposition of a safeguard measure. So does a ruling allowing for a provisional safeguard measure. So too, a ruling by the DTI Secretary refusing to refer the application for a safeguard measure to the Tariff Commission. It is clear that there is an entire subset of rulings that the DTI Secretary may issue in connection with the imposition of a safeguard measure, including those that are provisional, interlocutory, or dispositive in character. [36] By the same token, a ruling not to impose a safeguard measure is also issued in connection with the imposition of a safeguard measure. In arriving at the proper interpretation of in connection with, the Court referred to the U.S. Supreme Court cases of Shaw v. Delta Air Lines,

Inc.[37] and New York State Blue Cross Plans v. Travelers Ins.[38] Both cases
considered the interpretation of the phrase relates to as used in a federal statute, the Employee Retirement Security Act of 1974. Respondents criticize the citations on the premise that the cases are not binding in our jurisdiction and do not involve safeguard measures. The criticisms are off-tangent considering that our ruling did not call for the application of the Employee Retirement Security Act of 1974 in the Philippine milieu. The American cases are not relied upon as precedents, but as guides of interpretation. Certainly, if there are applicable local precedents pertaining to the interpretation of the phrase in connection with, then these certainly would have some binding force. But none avail, and neither do the respondents demonstrate a countervailing holding in Philippine jurisprudence. Yet we should consider the claim that an expansive interpretation was favored in Shaw because the law in question was an employees benefit law that had to be given an interpretation favorable to its intended beneficiaries.[39] In the next breath, Philcemcor notes that the U.S. Supreme Court itself was alarmed by the expansive interpretation in Shaw and thus in Blue Cross, the Shaw ruling was reversed and a more restrictive interpretation was applied based on congressional intent.[40] Respondents would like to make it appear that the Court acted rashly in applying a discarded precedent in Shaw, a non-binding foreign precedent nonetheless. But the Court did make the following observation in its Decision pertaining to Blue Cross: Now, let us determine the maximum scope and reach of the phrase in connection with as used in Section 29 of the SMA. A literalist reading or linguistic survey may not satisfy. Even the U.S. Supreme Court in New York State Blue Cross Plans v. Travelers Ins.[41] conceded that the phrases relate to or in connection with may be extended to the farthest stretch of indeterminacy for, universally, relations or connections are infinite and stop nowhere.[42] Thus, in the case the U.S. High Court, examining the same phrase of the same provision of law involved in Shaw, resorted to looking at the statute and its objectives as the alternative to an uncritical literalism. A similar inquiry into the other provisions of the SMA is in order to determine the scope of review accorded therein to the CTA.[43] In the next four paragraphs of the Decision, encompassing four pages, the Court proceeded to inquire into the SMA and its objectives as a means to determine the scope of rulings to be deemed as in connection with the imposition of a safeguard measure. Certainly, this Court did not resort to the broadest interpretation possible of the phrase in connection with, but instead sought to bring it into the context of the scope and objectives of the SMA. The ultimate conclusion of the Court was that the phrase includes all rulings of the DTI Secretary which arise from the time an application or motu

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proprio initiation for the imposition of a safeguard measure is taken. [44] This
conclusion was derived from the observation that the imposition of a general safeguard measure is a process, initiated motu proprio or through application, which undergoes several stages upon which the DTI Secretary is obliged or may be called upon to issue a ruling. It should be emphasized again that by utilizing the phrase in connection with, it is the SMA that expressly vests jurisdiction on the CTA over petitions questioning the non-imposition by the DTI Secretary of safeguard measures. The Court is simply asserting, as it should, the clear intent of the legislature in enacting the SMA. Without in connection with or a synonymous phrase, the Court would be compelled to favor the respondents position that only rulings imposing safeguard measures may be elevated on appeal to the CTA. But considering that the statute does make use of the phrase, there is little sense in delving into alternate scenarios. Respondents fail to convincingly address the absurd consequences pointed out by the Decision had their proposed interpretation been adopted. Indeed, suffocated beneath the respondents legalistic tinsel is the over a decision to impose a safeguard measure, but not on one choosing not to impose. Of course, it is not for the Court to inquire into the wisdom of legislative acts, hence the rule that jurisdiction must be expressly vested and not presumed. Yet ultimately, respondents muddle the issue by making it appear that the Decision has uniquely expanded the jurisdictional rules. For the respondents, the proper statutory interpretation of the crucial phrase in connection with is to pretend that the phrase did not exist at all in the statute. The Court, in taking the effort to examine the meaning and extent of the phrase, is merely giving breath to the legislative will. The Court likewise stated that the respondents position calls for split jurisdiction, which is judicially abhorred. In rebuttal, the public respondents cite Sections 2313 and 2402 of the Tariff and Customs Code (TCC), which allegedly provide for a splitting of jurisdiction of the CTA. According to public respondents, under Section 2313 of the TCC, a decision of the Commissioner of Customs affirming a decision of the Collector of Customs adverse to the government is elevated for review to the Secretary of Finance. However, under Section 2402 of the TCC, a ruling of the Commissioner of the Bureau of Customs against a taxpayer must be appealed to the Court of Tax Appeals, and not to the Secretary of Finance. Strictly speaking, the review by the Secretary of Finance of the decision of the Commissioner of Customs is not judicial review, since the Secretary of Finance holds an executive and not a judicial office. The contrast is apparent with the situation in this case, wherein the interpretation favored by the respondents calls for the exercise of judicial review by two different courts general safeguard measures. Moreover, as petitioner points out, the

executive department cannot appeal against itself. The Collector of Customs, the Commissioner of Customs and the Secretary of Finance are all part of the executive branch. If the Collector of Customs rules against the government, the executive cannot very well bring suit in courts against itself. On the other hand, if a private person is aggrieved by the decision of the Collector of Customs, he can have proper recourse before the courts, which now would be called upon to exercise judicial review over the action of the executive branch. More fundamentally, the situation involving split review of the decision of the Collector of Customs under the TCC is not apropos to the case at bar. The TCC in that instance is quite explicit on the divergent reviewing body or official depending on which party prevailed at the Collector of Customs level. On the other hand, there is no such explicit expression of bifurcated appeals in Section 29 of the SMA. Public respondents likewise cite Fabian v. Ombudsman[45] as another instance wherein the Court purportedly allowed split jurisdiction. It is argued that the Court, in ruling that it was the Court of Appeals which possessed appellate authority to review decisions of the Ombudsman in administrative cases while the Court retaining appellate jurisdiction of decisions of the Ombudsman in non-administrative cases, effectively sanctioned split jurisdiction between the Court and the Court of Appeals.[46] Nonetheless, this argument is successfully undercut by Southern Cross, which points out the essential differences in the power exercised by the Ombudsman in administrative cases and non-administrative cases relating to criminal complaints. In the former, the Ombudsman may impose an administrative penalty, while in acting upon a criminal complaint what the Ombudsman undertakes is a preliminary investigation. Clearly, the capacity in which the Ombudsman takes on in deciding an administrative complaint is wholly different from that in conducting a preliminary investigation. In contrast, in ruling upon a safeguard measure, the DTI Secretary acts in one and the same role. The variance between an order granting or denying an application for a safeguard measure is polar though emanating from the same equator, and does not arise from the distinct character of the putative actions involved. Philcemcor imputes intelligent design behind the alleged intent of Congress to limit CTA review only to impositions of the general safeguard measures. It claims that there is a necessary tax implication in case of an imposition of a tariff where the CTAs expertise is necessary, but there is no such tax implication, hence no need for the assumption of jurisdiction by a specialized agency, when the ruling rejects the imposition of a safeguard measure. But of course, whether the ruling under review calls for the imposition or non-imposition of the safeguard measure, the common question for resolution still is whether or not the tariff should be imposed an issue definitely fraught with a tax dimension. The determination of the question

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will call upon the same kind of expertise that a specialized body as the CTA presumably possesses. In response to the Courts observation that the setup proposed by respondents was novel, unusual, cumbersome and unwise, public respondents invoke the maxim that courts should not be concerned with the wisdom and efficacy of legislation.[47] But this prescinds from the bogus claim that the CTA may not exercise judicial review over a decision not to impose a safeguard measure, a prohibition that finds no statutory support. It is likewise settled in statutory construction that an interpretation that would cause inconvenience and absurdity is not favored. Respondents do not address the particular illogic that the Court pointed out would ensue if their position on judicial review were adopted. According to the respondents, while a ruling by the DTI Secretary imposing a safeguard measure may be elevated on review to the CTA and assailed on the ground of errors in fact and in law, a ruling denying the imposition of safeguard measures may be assailed only on the ground that the DTI Secretary committed grave abuse of discretion. As stressed in the Decision, [c]ertiorari is a remedy narrow in its scope and inflexible in its character. It is not a general utility tool in the legal workshop.[48] It is incorrect to say that the Decision bars any effective remedy should the Tariff Commission act or conclude erroneously in making its determination whether the factual conditions exist which necessitate the imposition of the general safeguard measure. If the Tariff Commission makes a negative final determination, the DTI Secretary, bound as he is by this negative determination, has to render a decision denying the application for safeguard measures citing the Tariff Commissions findings as basis. Necessarily then, such negative determination of the Tariff Commission being an integral part of the DTI Secretarys ruling would be open for review before the CTA, which again is especially qualified by reason of its expertise to examine the findings of the Tariff Commission. Moreover, considering that the Tariff Commission is an instrumentality of the government, its actions (as opposed to those undertaken by the DTI Secretary under the SMA) are not beyond the pale of certiorari jurisdiction. Unfortunately for Philcemcor, it hinged its cause on the claim that the DTI Secretarys actions may be annulled on certiorari, notwithstanding the explicit grant of judicial review over that cabinet members actions under the SMA to the CTA. Finally on this point, Philcemcor argues that assuming this Courts interpretation of Section 29 is correct, such ruling should not be given retroactive effect, otherwise, a gross violation of the right to due process would be had. This erroneously presumes that it was this Court, and not Congress, which vested jurisdiction on the CTA over rulings of nonimposition rendered by the DTI Secretary. We have repeatedly stressed that Section 29 expressly confers CTA jurisdiction over rulings in connection with the imposition of the safeguard measure, and the reassertion of this point in

the Decision was a matter of emphasis, not of contrivance. The due process protection does not shield those who remain purposely blind to the express rules that ensure the sporting play of procedural law. Besides, respondents claim would also apply every time this Court is compelled to settle a novel question of law, or to reverse precedent. In such cases, there would always be litigants whose causes of action might be vitiated by the application of newly formulated judicial doctrines. Adopting their claim would unwisely force this Court to treat its dispositions in unprecedented, sometimes landmark decisions not as resolutions to the live cases or controversies, but as legal doctrine applicable only to future litigations.

II. Positive Final Determination By the Tariff Commission an Indispensable Requisite to the Imposition of General Safeguard Measures
The second core ruling in the Decision was that contrary to the holding of the Court of Appeals, the DTI Secretary was barred from imposing a general safeguard measure absent a positive final determination rendered by the Tariff Commission. The fundamental premise rooted in this ruling is based on the acknowledgment that the required positive final determination of the Tariff Commission exists as a properly enacted constitutional limitation imposed on the delegation of the legislative power to impose tariffs and imposts to the President under Section 28(2), Article VI of the Constitution.

Congressional Limitations Pursuant To Constitutional Authority on the Delegated Power to Impose Safeguard Measures
The safeguard measures imposable under the SMA generally involve duties on imported products, tariff rate quotas, or quantitative restrictions on the importation of a product into the country. Concerning as they do the foreign importation of products into the Philippines, these safeguard measures fall within the ambit of Section 28(2), Article VI of the Constitution, which states: The Congress may, by law, authorize the President to fix within specified limits, and subject to such limitations and restrictions as it may impose,

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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.[49] The Court acknowledges the basic postulates ingrained in the provision, and, hence, governing in this case. They are: (1) It is Congress which authorizes the President to impose tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts. Thus, the authority cannot come from the Finance Department, the National Economic Development Authority, or the World Trade Organization, no matter how insistent or persistent these bodies may be. (2) The authorization granted to the President must be embodied in a law. Hence, the justification cannot be supplied simply by inherent executive powers. It cannot arise from administrative or executive orders promulgated by the executive branch or from the wisdom or whim of the President. (3) The authorization to the President can be exercised only within the specified limits set in the law and is further subject to limitations and restrictions which Congress may impose. Consequently, if Congress specifies that the tariff rates should not exceed a given amount, the President cannot impose a tariff rate that exceeds such amount. If Congress stipulates that no duties may be imposed on the importation of corn, the President cannot impose duties on corn, no matter how actively the local corn producers lobby the President. Even the most picayune of limits or restrictions imposed by Congress must be observed by the President. There is one fundamental principle that animates these constitutional postulates. These impositions under Section 28(2), Article VI fall within the realm of the power of taxation, a power which is within the sole province of the legislature under the Constitution. Without Section 28(2), Article VI, the executive branch has no authority to impose tariffs and other similar tax levies involving the importation of foreign goods. Assuming that Section 28(2) Article VI did not exist, the enactment of the SMA by Congress would be voided on the ground that it would constitute an undue delegation of the legislative power to tax. The constitutional provision shields such delegation from constitutional infirmity, and should be recognized as an exceptional grant of legislative power to the President, rather than the affirmation of an inherent executive power. This being the case, the qualifiers mandated by the Constitution on this presidential authority attain primordial consideration. First, there must be a law, such as the SMA. Second, there must be specified limits, a detail which would be filled in by the law. And further, Congress is further empowered to impose limitations and restrictions on this presidential authority. On this last power, the provision does not provide for specified conditions, such as that the limitations and restrictions must conform to prior statutes,

internationally accepted practices, accepted jurisprudence, or the considered opinion of members of the executive branch. The Court recognizes that the authority delegated to the President under Section 28(2), Article VI may be exercised, in accordance with legislative sanction, by the alter egos of the President, such as department secretaries. Indeed, for purposes of the Presidents exercise of power to impose tariffs under Article VI, Section 28(2), it is generally the Secretary of Finance who acts as alter ego of the President. The SMA provides an exceptional instance wherein it is the DTI or Agriculture Secretary who is tasked by Congress, in their capacities as alter egos of the President, to impose such measures. Certainly, the DTI Secretary has no inherent power, even as alter ego of the President, to levy tariffs and imports. Concurrently, the tasking of the Tariff Commission under the SMA should be likewise construed within the same context as part and parcel of the legislative delegation of its inherent power to impose tariffs and imposts to the executive branch, subject to limitations and restrictions. In that regard, both the Tariff Commission and the DTI Secretary may be regarded as agents of Congress within their limited respective spheres, as ordained in the SMA, in the implementation of the said law which significantly draws its strength from the plenary legislative power of taxation. Indeed, even the President may be considered as an agent of Congress for the purpose of imposing safeguard measures. It is Congress, not the President, which possesses inherent powers to impose tariffs and imposts. Without legislative authorization through statute, the President has no power, authority or right to impose such safeguard measures because taxation is inherently legislative, not executive. When Congress tasks the President or his/her alter egos to impose safeguard measures under the delineated conditions, the President or the alter egos may be properly deemed as agents of Congress to perform an act that inherently belongs as a matter of right to the legislature. It is basic agency law that the agent may not act beyond the specifically delegated powers or disregard the restrictions imposed by the principal. In short, Congress may establish the procedural framework under which such safeguard measures may be imposed, and assign the various offices in the government bureaucracy respective tasks pursuant to the imposition of such measures, the task assignment including the factual determination of whether the necessary conditions exists to warrant such impositions. Under the SMA, Congress assigned the DTI Secretary and the Tariff Commission their respective functions[50] in the legislatures scheme of things. There is only one viable ground for challenging the legality of the limitations and restrictions imposed by Congress under Section 28(2) Article VI, and that is such limitations and restrictions are themselves violative of the Constitution. Thus, no matter how distasteful or noxious these

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limitations and restrictions may seem, the Court has no choice but to uphold their validity unless their constitutional infirmity can be demonstrated. What are these limitations and restrictions that are material to the present case? The entire SMA provides for a limited framework under which the President, through the DTI and Agriculture Secretaries, may impose safeguard measures in the form of tariffs and similar imposts. The limitation most relevant to this case is contained in Section 5 of the SMA, captioned Conditions for the Application of General Safeguard Measures, and stating: The Secretary shall apply a general safeguard measure upon a positive final determination of the [Tariff] Commission that a product is being imported into the country in increased quantities, whether absolute or relative to the domestic production, as to be a substantial cause of serious injury or threat thereof to the domestic industry; however, in the case of non-agricultural products, the Secretary shall first establish that the application of such safeguard measures will be in the public interest.[51]

But let us for the nonce pursue Philcemcors logic further. It claims that since Section 5 does not allegedly limit the circumstances upon which the DTI Secretary may impose general safeguard measures, it is a worthy pursuit to determine whether the entire context of the SMA, as discerned by all the other familiar indicators of legislative intent supplied by norms of statutory interpretation, would justify safeguard measures absent a positive final determination by the Tariff Commission. The first line of attack employed is on Section 5 itself, it allegedly not being as clear as it sounds. It is advanced that Section 5 does not relate to the legal ability of either the Tariff Commission or the DTI Secretary to bind or foreclose review and reversal by one or the other. Such relationship should instead be governed by domestic administrative law and remedial law. Philcemcor thus would like to cast the proposition in this manner: Does it run contrary to our legal order to assert, as the Court did in its Decision, that a body of relative junior competence as the Tariff Commission can bind an administrative superior and cabinet officer, the DTI Secretary? It is easy to see why Philcemcor would like to divorce this DTI Secretary-Tariff Commission interaction from the confines of the SMA. Shorn of context, the notion would seem radical and unjustifiable that the lowly Tariff Commission can bind the hands and feet of the DTI Secretary. It can be surmised at once that respondents preferred interpretation is based not on the express language of the SMA, but from implications derived in a roundabout manner. Certainly, no provision in the SMA expressly authorizes the DTI Secretary to impose a general safeguard measure despite the absence of a positive final recommendation of the Tariff Commission. On the other hand, Section 5 expressly states that the DTI Secretary shall apply a general safeguard measure upon a positive final determination of the [Tariff] Commission. The causal connection in Section 5 between the imposition by the DTI Secretary of the general safeguard measure and the positive final determination of the Tariff Commission is patent, and even respondents do not dispute such connection. As stated earlier, the Court in its Decision found Section 5 to be clear, plain and free from ambiguity so as to render unnecessary resort to the congressional records to ascertain legislative intent. Yet respondents, on the dubitable premise that Section 5 is not as express as it seems, again latch on to the record of legislative deliberations in asserting that there was no legislative intent to bar the DTI Secretary from imposing the general safeguard measure anyway despite the absence of a positive final determination by the Tariff Commission. Let us take the bait for a moment, and examine respondents commonly cited portion of the legislative record. One would presume, given the intense advocacy for the efficacy of these citations, that they contain a smoking gun express declarations from the legislators that the DTI Secretary may impose a general safeguard measure even if the Tariff Commission refuses to

Positive Final Determination By Tariff Commission Plainly Required by Section 5 of SMA

There is no question that Section 5 of the SMA operates as a limitation validly imposed by Congress on the presidential[52] authority under the SMA to impose tariffs and imposts. That the positive final determination operates as an indispensable requisite to the imposition of the safeguard measure, and that it is the Tariff Commission which makes such determination, are legal propositions plainly expressed in Section 5 for the easy comprehension for everyone but respondents. Philcemcor attributes this Courts conclusion on the indispensability of the positive final determination to flawed syllogism in that we read the proposition if A then B as if it stated if A, and only A, then B.[53] Translated in practical terms, our conclusion, according to Philcemcor, would have only been justified had Section 5 read shall apply a general safeguard measure upon, and only upon, a positive final determination of the Tariff Commission. Statutes are not designed for the easy comprehension of the five-year old child. Certainly, general propositions laid down in statutes need not be expressly qualified by clauses denoting exclusivity in order that they gain efficacy. Indeed, applying this argument, the President would, under the Constitution, be authorized to declare martial law despite the absence of the invasion, rebellion or public safety requirement just because the first paragraph of Section 18, Article VII fails to state the magic word only.[54]

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render a positive final determination. Such smoking gun, if it exists, would characterize our Decision as disingenuous for ignoring such contrary expression of intent from the legislators who enacted the SMA. But as with many things, the anticipation is more dramatic than the truth. The excerpts cited by respondents are derived from the interpellation of the late Congressman Marcial Punzalan Jr., by then (and still is) Congressman Simeon Datumanong.[55] Nowhere in these records is the view expressed that the DTI Secretary may impose the general safeguard measures if the Tariff Commission issues a negative final determination or otherwise is unable to make a positive final determination. Instead, respondents hitch on the observations of Congressman Punzalan Jr., that the results of the [Tariff] Commissions findings . . . is subsequently submitted to [the DTI Secretary] for the [DTI Secretary] to impose or not to impose; and that the [DTI Secretary] here iswho would make the final decision on the recommendation that is made by a more technical body [such as the Tariff Commission].[56] There is nothing in the remarks of Congressman Punzalan which contradict our Decision. His observations fall in accord with the respective roles of the Tariff Commission and the DTI Secretary under the SMA. Under the SMA, it is the Tariff Commission that conducts an investigation as to whether the conditions exist to warrant the imposition of the safeguard measures. These conditions are enumerated in Section 5, namely; that a product is being imported into the country in increased quantities, whether absolute or relative to the domestic production, as to be a substantial cause of serious injury or threat thereof to the domestic industry. After the investigation of the Tariff Commission, it submits a report to the DTI Secretary which states, among others, whether the abovestated conditions for the imposition of the general safeguard measures exist. Upon a positive final determination that these conditions are present, the Tariff Commission then is mandated to recommend what appropriate safeguard measures should be undertaken by the DTI Secretary. Section 13 of the SMA gives five (5) specific options on the type of safeguard measures the Tariff Commission recommends to the DTI Secretary. At the same time, nothing in the SMA obliges the DTI Secretary to adopt the recommendations made by the Tariff Commission. In fact, the SMA requires that the DTI Secretary establish that the application of such safeguard measures is in the public interest, notwithstanding the Tariff Commissions recommendation on the appropriate safeguard measure upon its positive final determination. Thus, even if the Tariff Commission makes a positive final determination, the DTI Secretary may opt not to impose a general safeguard measure, or choose a different type of safeguard measure other than that recommended by the Tariff Commission. Congressman Punzalan was cited as saying that the DTI Secretary makes the decision to impose or not to impose, which is correct since the

DTI Secretary may choose not to impose a safeguard measure in spite of a positive final determination by the Tariff Commission. Congressman Punzalan also correctly stated that it is the DTI Secretary who makes the final decision on the recommendation that is made [by the Tariff Commission], since the DTI Secretary may choose to impose a general safeguard measure different from that recommended by the Tariff Commission or not to impose a safeguard measure at all. Nowhere in these cited deliberations was Congressman Punzalan, or any other member of Congress for that matter, quoted as saying that the DTI Secretary may ignore a negative determination by the Tariff Commission as to the existence of the conditions warranting the imposition of general safeguard measures, and thereafter proceed to impose these measures nonetheless. It is too late in the day to ascertain from the late Congressman Punzalan himself whether he had made these remarks in order to assure the other legislators that the DTI Secretary may impose the general safeguard measures notwithstanding a negative determination by the Tariff Commission. But certainly, the language of Section 5 is more resolutory to that question than the recorded remarks of Congressman Punzalan. Respondents employed considerable effort to becloud Section 5 with undeserved ambiguity in order that a proper resort to the legislative deliberations may be had. Yet assuming that Section 5 deserves to be clarified through an inquiry into the legislative record, the excerpts cited by the respondents are far more ambiguous than the language of the assailed provision regarding the key question of whether the DTI Secretary may impose safeguard measures in the face of a negative determination by the Tariff Commission. Moreover, even Southern Cross counters with its own excerpts of the legislative record in support of their own view.[57] It will not be difficult, especially as to heavily-debated legislation, for two sides with contrapuntal interpretations of a statute to highlight their respective citations from the legislative debate in support of their particular views.[58] A futile exercise of second-guessing is happily avoided if the meaning of the statute is clear on its face. It is evident from the text of Section 5 that there must be a positive final determination by the Tariff Commission that a product is being imported into the country in increased quantities (whether absolute or relative to domestic production), as to be a substantial cause of serious injury or threat to the domestic industry. Any disputation to the contrary is, at best, the product of wishful thinking. For the same reason that Section 5 is explicit as regards the essentiality of a positive final determination by the Tariff Commission, there is no need to refer to the Implementing Rules of the SMA to ascertain a contrary intent. If there is indeed a provision in the Implementing Rules that allows the DTI Secretary to impose a general safeguard measure even without the positive final determination by the Tariff Commission, said rule is void as it cannot supplant the express language of the legislature. Respondents essentially rehash their previous arguments on this point, and there is no reason to

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consider them anew. The Decision made it clear that nothing in Rule 13.2 of the Implementing Rules, even though captioned Final Determination by the Secretary, authorizes the DTI Secretary to impose a general safeguard measure in the absence of a positive final determination by the Tariff Commission.[59] Similarly, the Rules and Regulations to Govern the Conduct of Investigation by the Tariff Commission Pursuant to Republic Act No. 8800 now cited by the respondent does not contain any provision that the DTI Secretary may impose the general safeguard measures in the absence of a positive final determination by the Tariff Commission. Section 13 of the SMA further bolsters the interpretation as argued by Southern Cross and upheld by the Decision. The first paragraph thereof states that [u]pon its positive determination, the [Tariff] Commission shall recommend to the Secretary an appropriate definitive measure, clearly referring to the Tariff Commission as the entity that makes the positive determination. On the other hand, the penultimate paragraph of the same provision states that [i]n the event of a negative final determination, the DTI Secretary is to immediately issue through the Secretary of Finance, a written instruction to the Commissioner of Customs authorizing the return of the cash bonds previously collected as a provisional safeguard measure. Since the first paragraph of the same provision states that it is the Tariff Commission which makes the positive determination, it necessarily follows that it, and not the DTI Secretary, makes the negative final determination as referred to in the penultimate paragraph of Section 13. [60] The Separate Opinion considers as highly persuasive of former Tariff Commission Chairman Abon, who stated that the Commissions findings are merely recommendatory.[61] Again, the considered opinion of Chairman Abon is of no operative effect if the statute plainly states otherwise, and Section 5 bluntly does require a positive final determination by the Tariff Commission before the DTI Secretary may impose a general safeguard measure.[62]Certainly, the Court cannot give controlling effect to the statements of any public officer in serious denial of his duties if the law otherwise imposes the duty on the public office or officer. Nonetheless, if we are to render persuasive effect on the considered opinion of the members of the Executive Branch, it bears noting that the Secretary of the Department of Justice rendered an Opinion wherein he concluded that the DTI Secretary could not impose a general safeguard measure if the Tariff Commission made a negative final determination.[63] Unlike Chairman Abons impromptu remarks made during a hearing, the DOJ Opinion was rendered only after a thorough study of the question after referral to it by the DTI. The DOJ Secretary is the alter ego of the President with a stated mandate as the head of the principal law agency of the government.[64] As the DOJ Secretary has no denominated role in the SMA, he was able to render his Opinion from the vantage of judicious distance. Should not his Opinion, studied and direct to the point as it is, carry greater weight than the spontaneous remarks of the Tariff Commissions

Chairman which do not even expressly disavow the binding power of the Commissions positive final determination?

III. DTI Secretary has No Power of Review Over Final Determination of the Tariff Commission
We should reemphasize that it is only because of the SMA, a legislative enactment, that the executive branch has the power to impose safeguard measures. At the same time, by constitutional fiat, the exercise of such power is subjected to the limitations and restrictions similarly enforced by the SMA. In examining the relationship of the DTI and the Tariff Commission as established in the SMA, it is essential to acknowledge and consider these predicates. It is necessary to clarify the paradigm established by the SMA and affirmed by the Constitution under which the Tariff Commission and the DTI operate, especially in light of the suggestions that the Courts rulings on the functions of quasi-judicial power find application in this case. Perhaps the reflexive application of the quasi-judicial doctrine in this case, rooted as it is in jurisprudence, might allow for some convenience in ruling, yet doing so ultimately betrays ignorance of the fundamental power of Congress to reorganize the administrative structure of governance in ways it sees fit. The Separate Opinion operates from wholly different premises which are incomplete. Its main stance, similar to that of respondents, is that the DTI Secretary, acting as alter ego of the President, may modify and alter the findings of the Tariff Commission, including the latters negative final determination by substituting it with his own negative final determination to pave the way for his imposition of a safeguard measure.[65]Fatally, this conclusion is arrived at without considering the fundamental constitutional precept under Section 28(2), Article VI, on the ability of Congress to impose restrictions and limitations in its delegation to the President to impose tariffs and imposts, as well as the express condition of Section 5 of the SMA requiring a positive final determination of the Tariff Commission. Absent Section 5 of the SMA, the President has no inherent, constitutional, or statutory power to impose a general safeguard measure. Tellingly, the Separate Opinion does not directly confront the inevitable question as to how the DTI Secretary may get away with imposing a general safeguard measure absent a positive final determination from the Tariff Commission without violating Section 5 of the SMA, which along with Section 13 of the same law, stands as the only direct legal authority for the DTI Secretary to impose such measures. This is a constitutionally guaranteed limitation of the highest order, considering that the presidential authority exercised under the SMA is inherently legislative.

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Nonetheless, the Separate Opinion brings to fore the issue of whether the DTI Secretary, acting either as alter ego of the President or in his capacity as head of an executive department, may review, modify or otherwise alter the final determination of the Tariff Commission under the SMA. The succeeding discussion shall focus on that question. Preliminarily, we should note that none of the parties question the designation of the DTI or Agriculture secretaries under the SMA as the imposing authorities of the safeguard measures, even though Section 28(2) Article VI states that it is the President to whom the power to impose tariffs and imposts may be delegated by Congress. The validity of such designation under the SMA should not be in doubt. We recognize that the authorization made by Congress in the SMA to the DTI and Agriculture Secretaries was made in contemplation of their capacities as alter egosof the President. Indeed, in Marc Donnelly & Associates v. Agregado[66] the Court upheld the validity of a Cabinet resolution fixing the schedule of royalty rates on metal exports and providing for their collection even though Congress, under Commonwealth Act No. 728, had specifically empowered the President and not any other official of the executive branch, to regulate and curtail the export of metals. In so ruling, the Court held that the members of the Cabinet were acting as alter egos of the President.[67] In this case, Congress itself authorized the DTI Secretary as alter ego of the President to impose the safeguard measures. If the Court was previously willing to uphold the alter egos tariff authority despite the absence of explicit legislative grant of such authority on the alter ego, all the more reason now when Congress itself expressly authorized the alter ego to exercise these powers to impose safeguard measures. Notwithstanding, Congress in enacting the SMA and prescribing the roles to be played therein by the Tariff Commission and the DTI Secretary did not envision that the President, or his/her alter ego, could exercise supervisory powers over the Tariff Commission. If truly Congress intended to allow the traditional alter ego principle to come to fore in the peculiar setup established by the SMA, it would have assigned the role now played by the DTI Secretary under the law instead to the NEDA. The Tariff Commission is an attached agency of the National Economic Development Authority,[68] which in turn is the independent planning agency of the government.[69] The Tariff Commission does not fall under the administrative supervision of the DTI.[70] On the other hand, the administrative relationship between the NEDA and the Tariff Commission is established not only by the Administrative Code, but similarly affirmed by the Tariff and Customs Code. Justice Florentino Feliciano, in his ponencia in Garcia v. Executive Secretary[71], acknowledged the interplay between the NEDA and the Tariff Commission under the Tariff and Customs Code when he cited the relevant provisions of that law evidencing such setup. Indeed, under Section 104 of the

Tariff and Customs Code, the rates of duty fixed therein are subject to periodic investigation by the Tariff Commission and may be revised by the President upon recommendation of the NEDA.[72] Moreover, under Section 401 of the same law, it is upon periodic investigations by the Tariff Commission and recommendation of the NEDA that the President may cause a gradual reduction of protection levels granted under the law.[73] At the same time, under the Tariff and Customs Code, no similar role or influence is allocated to the DTI in the matter of imposing tariff duties. In fact, the long-standing tradition has been for the Tariff Commission and the DTI to proceed independently in the exercise of their respective functions. Only very recently have our statutes directed any significant interplay between the Tariff Commission and the DTI, with the enactment in 1999 of Republic Act No. 8751 on the imposition of countervailing duties and Republic Act No. 8752 on the imposition of anti-dumping duties, and of course the promulgation a year later of the SMA. In all these three laws, the Tariff Commission is tasked, upon referral of the matter by the DTI, to determine whether the factual conditions exist to warrant the imposition by the DTI of a countervailing duty, an anti-dumping duty, or a general safeguard measure, respectively. In all three laws, the determination by the Tariff Commission that these required factual conditions exist is necessary before the DTI Secretary may impose the corresponding duty or safeguard measure. And in all three laws, there is no express provision authorizing the DTI Secretary to reverse the factual determination of the Tariff Commission.[74] In fact, the SMA indubitably establishes that the Tariff Commission is no mere flunky of the DTI Secretary when it mandates that the positive final recommendation of the former be indispensable to the latters imposition of a general safeguard measure. What the law indicates instead is a relationship of interdependence between two bodies independent of each other under the Administrative Code and the SMA alike. Indeed, even the ability of the DTI Secretary to disregard the Tariff Commissions recommendations as to the particular safeguard measures to be imposed evinces the independence from each other of these two bodies. This is properly so for two reasons the DTI and the Tariff Commission are independent of each other under the Administrative Code; and impropriety is avoided in cases wherein the DTI itself is the one seeking the imposition of the general safeguard measures, pursuant to Section 6 of the SMA. Thus, in ascertaining the appropriate legal milieu governing the relationship between the DTI and the Tariff Commission, it is imperative to apply foremost, if not exclusively, the provisions of the SMA. The argument that the usual rules on administrative control and supervision apply between the Tariff Commission and the DTI as regards safeguard measures is severely undercut by the plain fact that there is no long-standing tradition of administrative interplay between these two entities.

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Within the administrative apparatus, the Tariff Commission appears to be a lower rank relative to the DTI. But does this necessarily mean that the DTI has the intrinsic right, absent statutory authority, to reverse the findings of the Tariff Commission? To insist that it does, one would have to concede for instance that, applying the same doctrinal guide, the Secretary of the Department of Science and Technology (DOST) has the right to reverse the rulings of the Civil Aeronautics Board (CAB) or the issuances of the Philippine Coconut Authority (PCA). As with the Tariff Commission-DTI, there is no statutory authority granting the DOST Secretary the right to overrule the CAB or the PCA, such right presumably arising only from the position of subordinacy of these bodies to the DOST. To insist on such a right would be to invite department secretaries to interfere in the exercise of functions by administrative agencies, even in areas wherein such secretaries are bereft of specialized competencies. The Separate Opinion notes that notwithstanding above, the Secretary of Department of Transportation and Communication may review the findings of the CAB, the Agriculture Secretary may review those of the PCA, and that the Secretary of the Department of Environment and Natural Resources may pass upon decisions of the Mines and Geosciences Board.[75] These three officers may be alter egos of the President, yet their authority to review is limited to those agencies or bureaus which are, pursuant to statutes such as the Administrative Code of 1987, under the administrative control and supervision of their respective departments. Thus, under the express provision of the Administrative Code expressly provides that the CAB is an attached agency of the DOTC[76], and that the PCA is an attached agency of the Department of Agriculture.[77] The same law establishes the Mines and Geo-Sciences Bureau as one of the Sectoral Staff Bureaus[78] that forms part of the organizational structure of the DENR.[79] As repeatedly stated, the Tariff Commission does not fall under the administrative control of the DTI, but under the NEDA, pursuant to the Administrative Code. The reliance made by the Separate Opinion to those three examples are thus misplaced. Nonetheless, the Separate Opinion asserts that the SMA created a functional relationship between the Tariff Commission and the DTI Secretary, sufficient to allow the DTI Secretary to exercise alter ego powers to reverse the determination of the Tariff Commission. Again, considering that the power to impose tariffs in the first place is not inherent in the President but arises only from congressional grant, we should affirm the congressional prerogative to impose limitations and restrictions on such powers which do not normally belong to the executive in the first place. Nowhere in the SMA does it state that the DTI Secretary may impose general safeguard measures without a positive final determination by the Tariff Commission, or that the DTI Secretary may reverse or even review the factual determination made by the Tariff Commission.

Congress in enacting the SMA and prescribing the roles to be played therein by the Tariff Commission and the DTI Secretary did not envision that the President, or his/her alter ego could exercise supervisory powers over the Tariff Commission. If truly Congress intended to allow the traditional alter ego principle to come to fore in the peculiar setup established by the SMA, it would have assigned the role now played by the DTI Secretary under the law instead to the NEDA, the body to which the Tariff Commission is attached under the Administrative Code. The Court has no issue with upholding administrative control and supervision exercised by the head of an executive department, but only over those subordinate offices that are attached to the department, or which are, under statute, relegated under its supervision and control. To declare that a department secretary, even if acting as alter ego of the President, may exercise such control or supervision over all executive offices below cabinet rank would lead to absurd results such as those adverted to above. As applied to this case, there is no legal justification for the DTI Secretary to exercise control, supervision, review or amendatory powers over the Tariff Commission and its positive final determination. In passing, we note that there is, admittedly, a feasible mode by which administrative review of the Tariff Commissions final determination could be had, but it is not the procedure adopted by respondents and now suggested for affirmation. This mode shall be discussed in a forthcoming section. The Separate Opinion asserts that the President, or his/her alter ego cannot be made a mere rubber stamp of the Tariff Commission since Section 17, Article VII of the Constitution denominates the Chief Executive exercises control over all executive departments, bureaus and offices.[80] But let us be clear that such executive control is not absolute. The definition of the structure of the executive branch of government, and the corresponding degrees of administrative control and supervision, is not the exclusive preserve of the executive. It may be effectively be limited by the Constitution, by law, or by judicial decisions. The Separate Opinion cites the respected constitutional law authority Fr. Joaquin Bernas, in support of the proposition that such plenary power of executive control of the President cannot be restricted by a mere statute passed by Congress. However, the cited passage from Fr. Bernas actually states, Since the Constitution has given the President the power of control, with all its awesome implications, it is the Constitution alone which can curtail such power.[81] Does the President have such tariff powers under the Constitution in the first place which may be curtailed by the executive power of control? At the risk of redundancy, we quote Section 28(2), Article VI: The Congress may, by law, authorize the President to fix within specified limits, and subject to such limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts within the framework of the national development program of the

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Government. Clearly the power to impose tariffs belongs to Congress and not to the President. It is within reason to assume the framers of the Constitution deemed it too onerous to spell out all the possible limitations and restrictions on this presidential authority to impose tariffs. Hence, the Constitution especially allowed Congress itself to prescribe such limitations and restrictions itself, a prudent move considering that such authority inherently belongs to Congress and not the President. Since Congress has no power to amend the Constitution, it should be taken to mean that such limitations and restrictions should be provided by mere statute. Then again, even the presidential authority to impose tariffs arises only by mere statute. Indeed, this presidential privilege is both contingent in nature and legislative in origin. These characteristics, when weighed against the aspect of executive control and supervision, cannot militate against Congresss exercise of its inherent power to tax. The bare fact is that the administrative superstructure, for all its unwieldiness, is mere putty in the hands of Congress. The functions and mandates of the particular executive departments and bureaus are not created by the President, but by the legislative branch through the Administrative Code. [82] The President is the administrative head of the executive department, as such obliged to see that every government office is managed and maintained properly by the persons in charge of it in accordance with pertinent laws and regulations, and empowered to promulgate rules and issuances that would ensure a more efficient management of the executive branch, for so long as such issuances are not contrary to law.[83] Yet the legislature has the concurrent power to reclassify or redefine the executive bureaucracy, including the relationship between various administrative agencies, bureaus and departments, and ultimately, even the power to abolish executive departments and their components, hamstrung only by constitutional limitations. The DTI itself can be abolished with ease by Congress through deleting Title X, Book IV of the Administrative Code. The Tariff Commission can similarly be abolished through legislative enactment. [84] At the same time, Congress can enact additional tasks or responsibilities on either the Tariff Commission or the DTI Secretary, such as their respective roles on the imposition of general safeguard measures under the SMA. In doing so, the same Congress, which has the putative authority to abolish the Tariff Commission or the DTI, is similarly empowered to alter or expand its functions through modalities which do not align with established norms in the bureaucratic structure. The Court is bound to recognize the legislative prerogative to prescribe such modalities, no matter how atypical they may be, in affirmation of the legislative power to restructure the executive branch of government.

There are further limitations on the executive control adverted to by the Separate Opinion. The President, in the exercise of executive control, cannot order a subordinate to disobey a final decision of this Court or any courts. If the subordinate chooses to disobey, invoking sole allegiance to the President, the judicial processes can be utilized to compel obeisance. Indeed, when public officers of the executive department take their oath of office, they swear allegiance and obedience not to the President, but to the Constitution and the laws of the land. The invocation of executive control must yield when under its subsumption includes an act that violates the law. The Separate Opinion concedes that the exercise of executive control and supervision by the President is bound by the Constitution and law.[85] Still, just three sentences after asserting that the exercise of executive control must be within the bounds of the Constitution and law, the Separate Opinion asserts, the control power of the Chief Executive emanates from the Constitution; no act of Congress may validly curtail it.[86] Laws are acts of Congress, hence valid confusion arises whether the Separate Opinion truly believes the first proposition that executive control is bound by law. This is a quagmire for the Separate Opinion to resolve for itself The Separate Opinion unduly considers executive control as the ne plus ultra constitutional standard which must govern in this case. But while the President may generally have the power to control, modify or set aside the actions of a subordinate, such powers may be constricted by the Constitution, the legislature, and the judiciary. This is one of the essences of the check-andbalance system in our tri-partite constitutional democracy. Not one head of a branch of government may operate as a Caesar within his/her particular fiefdom. Assuming there is a conflict between the specific limitation in Section 28 (2), Article VI of the Constitution and the general executive power of control and supervision, the former prevails in the specific instance of safeguard measures such as tariffs and imposts, and would thus serve to qualify the general grant to the President of the power to exercise control and supervision over his/her subalterns. Thus, if the Congress enacted the law so that the DTI Secretary is bound by the Tariff Commission in the sense the former cannot impose general safeguard measures absent a final positive determination from the latter the Court is obliged to respect such legislative prerogative, no matter how such arrangement deviates from traditional norms as may have been enshrined in jurisprudence. The only ground under which such legislative determination as expressed in statute may be successfully challenged is if such legislation contravenes the Constitution. No such argument is posed by the respondents, who do not challenge the validity or constitutionality of the SMA. Given these premises, it is utterly reckless to examine the interrelationship between the Tariff Commission and the DTI Secretary

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beyond the context of the SMA, applying instead traditional precepts on administrative control, review and supervision. For that reason, the Decisiondeemed inapplicable respondents previous citations of Cario v. Commissioner on Human Rights and Lamb v. Phipps, since the executive power adverted to in those cases had not been limited by constitutional restrictions such as those imposed under Section 28(2), Article VI.[87] A similar observation can be made on the case of Sharp International Marketing v. Court of Appeals,[88] now cited by Philcemcor, wherein the Court asserted that the Land Bank of the Philippines was required to exercise independent judgment and not merely rubber-stamp deeds of sale entered into by the Department of Agrarian Reform in connection with the agrarian reform program. Philcemcor attempts to demonstrate that the DTI Secretary, as with the Land Bank of the Philippines, is required to exercise independent discretion and is not expected to just merely accede to DAR-approved compensation packages. Yet again, such grant of independent discretion is expressly called for by statute, particularly Section 18 of Rep. Act No. 6657 which specifically requires the joint concurrence of the landowner and the DAR and the [Land Bank of the Philippines] on the amount of compensation. Such power of review by the Land Bank is a consequence of clear statutory language, as is our holding in the Decision that Section 5 explicitly requires a positive final determination by the Tariff Commission before a general safeguard measure may be imposed. Moreover, such limitations under the SMA are coated by the constitutional authority of Section 28(2), Article VI of the Constitution. Nonetheless, is this administrative setup, as envisioned by Congress and enshrined into the SMA, truly noxious to existing legal standards? The Decision acknowledged the internal logic of the statutory framework, considering that the DTI cannot exercise review powers over an agency such as the Tariff Commission which is not within its administrative jurisdiction; that the mechanism employed establishes a measure of check and balance involving two government offices with different specializations; and that safeguard measures are the exception rather than the rule, pursuant to our treaty obligations.[89] We see no reason to deviate from these observations, and indeed can add similarly oriented comments. Corollary to the legislative power to decree policies through legislation is the ability of the legislature to provide for means in the statute itself to ensure that the said policy is strictly implemented by the body or office tasked so tasked with the duty. As earlier stated, our treaty obligations dissuade the State for now from implementing default protectionist trade measures such as tariffs, and allow the same only under specified conditions.[90]The conditions enumerated under the GATT Agreement on Safeguards for the application of safeguard measures by a member country are the same as the requisites laid down in Section 5 of the SMA.[91] To insulate the factual determination from political pressure, and to assure that it be conducted by an entity especially qualified by reason of its

general functions to undertake such investigation, Congress deemed it necessary to delegate to the Tariff Commission the function of ascertaining whether or not the those factual conditions exist to warrant the atypical imposition of safeguard measures. After all, the Tariff Commission retains a degree of relative independence by virtue of its attachment to the National Economic Development Authority, an independent planning agency of the government,[92] and also owing to its vaunted expertise and specialization. The matter of imposing a safeguard measure almost always involves not just one industry, but the national interest as it encompasses other industries as well. Yet in all candor, any decision to impose a safeguard measure is susceptible to all sorts of external pressures, especially if the domestic industry concerned is well-organized. Unwarranted impositions of safeguard measures may similarly be detrimental to the national interest. Congress could not be blamed if it desired to insulate the investigatory process by assigning it to a body with a putative degree of independence and traditional expertise in ascertaining factual conditions. Affected industries would have cause to lobby for or against the safeguard measures. The decision-maker is in the unenviable position of having to bend an ear to listen to all concerned voices, including those which may speak softly but carry a big stick. Had the law mandated that the decision be made on the sole discretion of an executive officer, such as the DTI Secretary, it would be markedly easier for safeguard measures to be imposed or withheld based solely on political considerations and not on the factual conditions that are supposed to predicate the decision. Reference of the binding positive final determination to the Tariff Commission is of course, not a fail-safe means to ensure a bias-free determination. But at least the legislated involvement of the Commission in the process assures some measure of measure of check and balance involving two different governmental agencies with disparate specializations. There is no legal or constitutional demand for such a setup, but its wisdom as policy should be acknowledged. As prescribed by Congress, both the Tariff Commission and the DTI Secretary operate within limited frameworks, under which nobody acquires an undue advantage over the other. We recognize that Congress deemed it necessary to insulate the process in requiring that the factual determination to be made by an ostensibly independent body of specialized competence, the Tariff Commission. This prescribed framework, constitutionally sanctioned, is intended to prevent the baseless, whimsical, or consideration-induced imposition of safeguard measures. It removes from the DTI Secretary jurisdiction over a matter beyond his putative specialized aptitude, the compilation and analysis of picayune facts and determination of their limited causal relations, and instead vests in the Secretary the broad choice on a matter within his unquestionable competence, the selection of what particular safeguard measure would assist the duly beleaguered local industry yet at the same time conform to national trade policy. Indeed, the SMA recognizes, and places primary importance on the DTI Secretarys mandate to formulate trade

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policy, in his capacity as the Presidentsalter ego on trade, industry and investment-related matters. At the same time, the statutory limitations on this authorized power of the DTI Secretary must prevail since the Constitution itself demands the enforceability of those limitations and restrictions as imposed by Congress. Policy wisdom will not save a law from infirmity if the statutory provisions violate the Constitution. But since the Constitution itself provides that the President shall be constrained by the limits and restrictions imposed by Congress and since these limits and restrictions are so clear and categorical, then the Court has no choice but to uphold the reins. Even assuming that this prescribed setup made little sense, or seemed uncommonly silly,[93] the Court is bound by propriety not to dispute the wisdom of the legislature as long as its acts do not violate the Constitution. Since there is no convincing demonstration that the SMA contravenes the Constitution, the Court is wont to respect the administrative regimen propounded by the law, even if it allots the Tariff Commission a higher degree of puissance than normally expected. It is for this reason that the traditional conceptions of administrative review or quasi-judicial power cannot control in this case. Indeed, to apply the latter concept would cause the Court to fall into a linguistic trap owing to the multi-faceted denotations the term quasijudicial has come to acquire. Under the SMA, the Tariff Commission undertakes formal hearings,[94] receives and evaluates testimony and evidence by interested parties,[95] and renders a decision is rendered on the basis of the evidence presented, in the form of the final determination. The final determination requires a conclusion whether the importation of the product under consideration is causing serious injury or threat to a domestic industry producing like products or directly competitive products, while evaluating all relevant factors having a bearing on the situation of the domestic industry.[96] This process aligns conformably with definition provided by Blacks Law Dictionary of quasi-judicial as the action, discretion, etc., of public administrative officers or bodies, who are required to investigate facts, or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions from them, as a basis for their official action, and to exercise discretion of a judicial nature.[97] However, the Tariff Commission is not empowered to hear actual cases or controversies lodged directly before it by private parties. It does not have the power to issue writs of injunction or enforcement of its determination. These considerations militate against a finding of quasi-judicial powers attributable to the Tariff Commission, considering the pronouncement that quasi-judicial adjudication would mean a determination of rights privileges and duties resulting in a decision or order which applies to a specific situation.[98]

Indeed, a declaration that the Tariff Commission possesses quasijudicial powers, even if ascertained for the limited purpose of exercising its functions under the SMA, may have the unfortunate effect of expanding the Commissions powers beyond that contemplated by law. After all, the Tariff Commission is by convention, a fact-finding body, and its role under the SMA, burdened as it is with factual determination, is but a mere continuance of this tradition. However, Congress through the SMA offers a significant deviation from this traditional role by tying the decision by the DTI Secretary to impose a safeguard measure to the required positive factual determination by the Tariff Commission. Congress is not bound by past traditions, or even by the jurisprudence of this Court, in enacting legislation it may deem as suited for the times. The sole benchmark for judicial substitution of congressional wisdom is constitutional transgression, a standard which the respondents do not even attempt to match.

Respondents Suggested Interpretation Of the SMA Transgresses Fair Play

Respondents have belabored the argument that the Decisions interpretation of the SMA, particularly of the role of the Tariff Commissionvis--vis the DTI Secretary, is noxious to traditional notions of administrative control and supervision. But in doing so, they have failed to acknowledge the congressional prerogative to redefine administrative relationships, a license which falls within the plenary province of Congress under our representative system of democracy. Moreover, respondents own suggested interpretation falls wayward of expectations of practical fair play. Adopting respondents suggestion that the DTI Secretary may disregard the factual findings of the Tariff Commission and investigatory process that preceded it, it would seem that the elaborate procedure undertaken by the Commission under the SMA, with all the attendant guarantees of due process, is but an inutile spectacle. As Justice Garcia noted during the oral arguments, why would the DTI Secretary bother with the Tariff Commission and instead conduct the investigation himself.[99] Certainly, nothing in the SMA authorizes the DTI Secretary, after making the preliminary determination, to personally oversee the investigation, hear out the interested parties, or receive evidence. [100] In fact, the SMA does not even require the Tariff Commission, which is tasked with the custody of the submitted evidence,[101] to turn over to the DTI Secretary such evidence it had evaluated in order to make its factual determination.[102] Clearly, as Congress tasked it to be, it is the Tariff Commission and not the DTI Secretary which acquires the necessary intimate acquaintance with the factual conditions and evidence necessary for the imposition of the general safeguard measure. Why then favor an

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interpretation of the SMA that leaves the findings of the Tariff Commission bereft of operative effect and makes them subservient to the wishes of the DTI Secretary, a personage with lesser working familiarity with the relevant factual milieu? In fact, the bare theory of the respondents would effectively allow the DTI Secretary to adopt, under the subterfuge of his discretion, the factual determination of a private investigative group hired by the industry concerned, and reject the investigative findings of the Tariff Commission as mandated by the SMA. It would be highly irregular to substitute what the law clearly provides for a dubious setup of no statutory basis that would be readily susceptible to rank chicanery. Moreover, the SMA guarantees the right of all concerned parties to be heard, an elemental requirement of due process, by the Tariff Commission in the context of its investigation. The DTI Secretary is not similarly empowered or tasked to hear out the concerns of other interested parties, and if he/she does so, it arises purely out of volition and not compulsion under law. Indeed, in this case, it is essential that the position of other than that of the local cement industry should be given due consideration, cement being an indispensable need for the operation of other industries such as housing and construction. While the general safeguard measures may operate to the better interests of the domestic cement industries, its deprivation of cheaper cement imports may similarly work to the detriment of these other domestic industries and correspondingly, the national interest. Notably, the Tariff Commission in this case heard the views on the application of representatives of other allied industries such as the housing, construction, and cement-bag industries, and other interested parties such as consumer groups and foreign governments.[103] It is only before the Tariff Commission that their views had been heard, and this is because it is only the Tariff Commission which is empowered to hear their positions. Since due process requires a judicious consideration of all relevant factors, the Tariff Commission, which is in a better position to hear these parties than the DTI Secretary, is similarly more capable to render a determination conformably with the due process requirements than the DTI Secretary. In a similar vein, Southern Cross aptly notes that in instances when it is the DTI Secretary who initiates motu proprio the application for the safeguard measure pursuant to Section 6 of the SMA, respondents suggested interpretation would result in the awkward situation wherein the DTI Secretary would rule upon his own application after it had been evaluated by the Tariff Commission. Pertinently cited is our ruling in Corona v. Court of Appeals[104] that no man can be at once a litigant and judge.[105] Certainly, this anomalous situation is avoided if it is the Tariff Commission which is tasked with arriving at the final determination whether the conditions exist to warrant the general safeguard measures. This is the setup provided for by the express provisions of the SMA, and the problem would arise only if we adopt the interpretation urged upon by respondents.

The Possibility for Administrative Review Of the Tariff Commissions Determination

The Court has been emphatic that a positive final determination from the Tariff Commission is required in order that the DTI Secretary may impose a general safeguard measure, and that the DTI Secretary has no power to exercise control and supervision over the Tariff Commission and its final determination. These conclusions are the necessary consequences of the applicable provisions of the Constitution, the SMA, and laws such as the Administrative Code. However, the law is silent though on whether this positive final determination may otherwise be subjected to administrative review. There is no evident legislative intent by the authors of the SMA to provide for a procedure of administrative review. If ever there is a procedure for administrative review over the final determination of the Tariff Commission, such procedure must be done in a manner that does not contravene or disregard legislative prerogatives as expressed in the SMA or the Administrative Code, or fundamental constitutional limitations. In order that such procedure of administrative review would not contravene the law and the constitutional scheme provided by Section 28(2), Article VI, it is essential to assert that the positive final determination by the Tariff Commission is indispensable as a requisite for the imposition of a general safeguard measure. The submissions of private respondents and the Separate Opinion cannot be sustained insofar as they hold that the DTI Secretary can peremptorily ignore or disregard the determinations made by the Tariff Commission. However, if the mode of administrative review were in such a manner that the administrative superior of the Tariff Commission were to modify or alter its determination, then such reversal may still be valid within the confines of Section 5 of the SMA, for technically it is still the Tariff Commissions determination, administratively revised as it may be, that would serve as the basis for the DTI Secretarys action. However, and fatally for the present petitions, such administrative review cannot be conducted by the DTI Secretary. Even if conceding that the Tariff Commissions findings may be administratively reviewed, the DTI Secretary has no authority to review or modify the same. We have been emphatic on the reasons such as that there is no traditional or statutory basis placing the Commission under the control and supervision of the DTI; that to allow such would contravene due process, especially if the DTI itself were to apply for the safeguard measures motu proprio. To hold otherwise would destroy the administrative hierarchy, contravene constitutional due process, and disregard the limitations or restrictions provided in the SMA. Instead, assuming administrative review were available, it is the NEDA that may conduct such review following the principles of administrative law,

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and the NEDAs decision in turn is reviewable by the Office of the President. The decision of the Office of the President then effectively substitutes as the determination of the Tariff Commission, which now forms the basis of the DTI Secretarys decision, which now would be ripe for judicial review by the CTA under Section 29 of the SMA. This is the only way that administrative review of the Tariff Commissions determination may be sustained without violating the SMA and its constitutional restrictions and limitations, as well as administrative law. In bare theory, the NEDA may review, alter or modify the Tariff Commissions final determination, the Commission being an attached agency of the NEDA. Admittedly, there is nothing in the SMA or any other statute that would prevent the NEDA to exercise such administrative review, and successively, for the President to exercise in turn review over the NEDAs decision. Nonetheless, in acknowledging this possibility, the Court, without denigrating the bare principle that administrative officers may exercise control and supervision over the acts of the bodies under its jurisdiction, realizes that this comes at the expense of a speedy resolution to an application for a safeguard measure, an application dependent on fluctuating factual conditions. The further delay would foster uncertainty and insecurity within the industry concerned, as well as with all other allied industries, which in turn may lead to some measure of economic damage. Delay is certain, since judicial review authorized by law and not administrative review would have the final say. The fact that the SMA did not expressly prohibit administrative review of the final determination of the Tariff Commission does not negate the supreme advantages of engendering exclusive judicial review over questions arising from the imposition of a general safeguard measure. In any event, even if we conceded the possibility of administrative review of the Tariff Commissions final determination by the NEDA, such would not deny merit to the present petition. It does not change the fact that the Court of Appeals erred in ruling that the DTI Secretary was not bound by the negative final determination of the Tariff Commission, or that the DTI Secretary acted without jurisdiction when he imposed general safeguard measures despite the absence of the statutory positive final determination of the Commission.

In response to our citation of Section 28(2), Article VI, respondents elevate two arguments grounded in constitutional law. One is based on another constitutional provision, Section 12, Article XIII, which mandates that [t]he State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods and adopt measures that help make them competitive. By no means does this provision dictate that the Court favor the domestic industry in all competing claims that it may bring before this Court. If it were so, judicial proceedings in this country would be rendered a mockery, resolved as they would be, on the basis of the personalities of the litigants and not their legal positions. Moreover, the duty imposed on by Section 12, Article XIII falls primarily with Congress, which in that regard enacted the SMA, a law designed to protect domestic industries from the possible ill-effects of our accession to the global trade order. Inconveniently perhaps for respondents, the SMA also happens to provide for a procedure under which such protective measures may be enacted. The Court cannot just impose what it deems as the spirit of the law without giving due regard to its letter. In like-minded manner, the Separate Opinion loosely states that the purpose of the SMA is to protect or safeguard local industries from increased importation of foreign products.[106] This inaccurately leaves the impression that the SMA ipso facto unravels a protective cloak that shelters all local industries and producers, no matter the conditions. Indeed, our country has knowingly chosen to accede to the world trade regime, as expressed in the GATT and WTO Agreements, despite the understanding that local industries might suffer ill-effects, especially with the easier entry of competing foreign products. At the same time, these international agreements were designed to constrict protectionist trade policies by its member-countries. Hence, the median, as expressed by the SMA, does allow for the application of protectionist measures such as tariffs, but only after an elaborate process of investigation that ensures factual basis and indispensable need for such measures. More accurately, the purpose of the SMA is to provide a process for the protection or safeguarding of domestic industries that have duly established that there is substantial injury or threat thereof directly caused by the increased imports. In short, domestic industries are not entitled to safeguard measures as a matter of right or influence. Respondents also make the astounding argument that the imposition of general safeguard measures should not be seen as a taxation measure, but instead as an exercise of police power. The vain hope of respondents in divorcing the safeguard measures from the concept of taxation is to exclude from consideration Section 28(2), Article VI of the Constitution. This argument can be debunked at length, but it deserves little attention. The motivation behind many taxation measures is the implementation of police power goals. Progressive income taxes alleviate the margin between rich and poor; the so-called sin taxes on alcohol and tobacco

IV. Courts Interpretation of SMA In Harmony with Other Constitutional Provisions

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manufacturers help dissuade the consumers from excessive intake of these potentially harmful products. Taxation is distinguishable from police power as to the means employed to implement these public good goals. Those doctrines that are unique to taxation arose from peculiar considerations such as those especially punitive effects of taxation,[107] and the belief that taxes are the lifeblood of the state.[108] These considerations necessitated the evolution of taxation as a distinct legal concept from police power. Yet at the same time, it has been recognized that taxation may be made the implement of the states police power.[109] Even assuming that the SMA should be construed exclusively as a police power measure, the Court recognizes that police power is lodged primarily in the national legislature, though it may also be exercised by the executive branch by virtue of a valid delegation of legislative power.[110] Considering these premises, it is clear that police power, however illimitable in theory, is still exercised within the confines of implementing legislation. To declare otherwise is to sanction rule by whim instead of rule of law. The Congress, in enacting the SMA, has delegated the power to impose general safeguard measures to the executive branch, but at the same time subjected such imposition to limitations, such as the requirement of a positive final determination by the Tariff Commission under Section 5. For the executive branch to ignore these boundaries imposed by Congress is to set up an ignoble clash between the two co-equal branches of government. Considering that the exercise of police power emanates from legislative authority, there is little question that the prerogative of the legislative branch shall prevail in such a clash.

hardly the elusive Shangri-la of administrative law. If a particular industry finds it difficult to obtain a positive final determination from the Tariff Commission, it may be simply because the industry is still sufficiently competitive even in the face of foreign competition. These safeguard measures are designed to ensure salvation, not avarice. Respondents well have the right to drape themselves in the colors of the flag. Yet these postures hardly advance legal claims, or nationalism for that matter. The fineries of the costume pageant are no better measure of patriotism than simple obedience to the laws of the Fatherland. And even assuming that respondents are motivated by genuine patriotic impulses, it must be remembered that under the setup provided by the SMA, it is the facts, and not impulse, that determine whether the protective safeguard measures should be imposed. As once orated, facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.[112] It is our goal as judges to enforce the law, and not what we might deem as correct economic policy. Towards this end, we should not construe the SMA to unduly favor or disfavor domestic industries, simply because the law itself provides for a mechanism by virtue of which the claims of these industries are thoroughly evaluated before they are favored or disfavored. What we must do is to simply uphold what the law says. Section 5 says that the DTI Secretary shall impose the general safeguard measures upon the positive final determination of the Tariff Commission. Nothing in the whereas clauses or the invisible ink provisions of the SMA can magically delete the words positive final determination and Tariff Commission from Section 5.

V. Assailed Decision Consistent With Ruling in Taada v. Angara

Public respondents allege that the Decision is contrary to our holding in Taada v. Angara,[111] since the Court noted therein that the GATT itself provides built-in protection from unfair foreign competition and trade practices, which according to the public respondents, was a reason why the Honorable [Court] ruled the way it did. On the other hand, the Decision eliminates safeguard measures as a mode of defense. This is balderdash, as with any and all claims that the Decision allows foreign industries to ride roughshod over our domestic enterprises. The Decision does not prohibit the imposition of general safeguard measures to protect domestic industries in need of protection. All it affirms is that the positive final determination of the Tariff Commission is first required before the general safeguard measures are imposed and implemented, a neutral proposition that gives no regard to the nationalities of the parties involved. A positive determination by the Tariff Commission is

VI. On Forum-Shopping
We remain convinced that there was no willful and deliberate forumshopping in this case by Southern Cross. The causes of action that animate this present petition for review and the petition for review with the CTA are distinct from each other, even though they relate to similar factual antecedents. Yet it also appears that contrary to the undertaking signed by the President of Southern Cross, Hironobu Ryu, to inform this Court of any similar action or proceeding pending before any court, tribunal or agency within five (5) days from knowledge thereof, Southern Cross informed this Court only on 12 August 2003 of the petition it had filed with the CTA eleven days earlier. An appropriate sanction is warranted for such failure, but not the dismissal of the petition.

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VII. Effects of Courts Resolution

Philcemcor argues that the granting of Southern Crosss Petition should not necessarily lead to the voiding of the Decision of the DTI Secretary dated 5 August 2003 imposing the general safeguard measures. For Philcemcor, the availability of appeal to the CTA as an available and adequate remedy would have made the Court of Appeals Decision merely erroneous or irregular, but not void. Moreover, the saidDecision merely required the DTI Secretary to render a decision, which could have very well been a decision not to impose a safeguard measure; thus, it could not be said that the annulled decision resulted from the judgment of the Court of Appeals. The Court of Appeals Decision was annulled precisely because the appellate court did not have the power to rule on the petition in the first place. Jurisdiction is necessarily the power to decide a case, and a court which does not have the power to adjudicate a case is one that is bereft of jurisdiction. We find no reason to disturb our earlier finding that the Court of Appeals Decision is null and void. At the same time, the Court in its Decision paid particular heed to the peculiarities attaching to the 5 August 2003 Decision of the DTI Secretary. In the DTI Secretarys Decision, he expressly stated that as a result of the Court of Appeals Decision, there is no legal impediment for the Secretary to decide on the application. Yet the truth remained that there was a legal impediment, namely, that the decision of the appellate court was not yet final and executory. Moreover, it was declared null and void, and since the DTI Secretary expressly denominated the Court of Appeals Decision as his basis for deciding to impose the safeguard measures, the latter decision must be voided as well. Otherwise put, without the Court of Appeals Decision, the DTI Secretarys Decision of 5 August 2003 would not have been rendered as well. Accordingly, the Court reaffirms as a nullity the DTI Secretarys Decision dated 5 August 2003. As a necessary consequence, no further action can be taken on Philcemcors Petition for Extension of the Safeguard Measure. Obviously, if the imposition of the general safeguard measure is void as we declared it to be, any extension thereof should likewise be fruitless. The proper remedy instead is to file a new application for the imposition of safeguard measures, subject to the conditions prescribed by the SMA. Should this step be eventually availed of, it is only hoped that the parties involved would content themselves in observing the proper procedure, instead of making a mockery of the rule of law. WHEREFORE, respondents Motions for Reconsideration are DENIED WITH FINALITY.

Respondent DTI Secretary is hereby ENJOINED from taking any further action on the pending Petition for Extension of the Safeguard Measure. Hironobu Ryu, President of petitioner Southern Cross Cement Corporation, and Angara Abello Concepcion Regala & Cruz, counsel petitioner, are hereby given FIVE (5) days from receipt of this Resolution to EXPLAIN why they should not be meted disciplinary sanction for failing to timely inform the Court of the filing of Southern Crosss Petition for Review with the Court of Tax Appeals, as adverted to earlier in thisResolution. SO ORDERED.

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Republic of the Philippines SUPREME COURT Manila EN BANC

FREEPORT, INC., represented by its President ALFREDO S. GALANG, Respondent. DECISION YNARES-SANTIAGO, J.:

G.R. No. 164171

February 20, 2006 The instant consolidated petitions seek to annul and set aside the Decisions of the Regional Trial Court of Olongapo City, Branch 72, in Civil Case No. 200-04 and Civil Case No. 22-0-04, both dated May 24, 2004; and the February 14, 2005 Decision of the Court of Appeals in CA-G.R. SP. No. 83284, which declared Article 2, Section 3.1 of Executive Order No. 156 (EO 156) unconstitutional. Said executive issuance prohibits the importation into the country, inclusive of the Special Economic and Freeport Zone or the Subic Bay Freeport (SBF or Freeport), of used motor vehicles, subject to a few exceptions. The undisputed facts show that on December 12, 2002, President Gloria Macapagal-Arroyo, through Executive Secretary Alberto G. Romulo, issued EO 156, entitled "Providing for a comprehensive industrial policy and directions for the motor vehicle development program and its implementing guidelines." The challenged provision states: 3.1 The importation into the country, inclusive of the Freeport, of all types of used motor vehicles is prohibited, except for the following: 3.1.1 A vehicle that is owned and for the personal use of a returning resident or immigrant and covered by an authority to import issued under the No-dollar Importation Program. Such vehicles cannot be resold for at least three (3) years; 3.1.2 A vehicle for the use of an official of the Diplomatic Corps and authorized to be imported by the Department of Foreign Affairs; 3.1.3 Trucks excluding pickup trucks; 1. with GVW of 2.5-6.0 tons covered by an authority to import issued by the DTI. 2. With GVW above 6.0 tons. 3.1.4 Buses:

HON. EXECUTIVE SECRETARY, HON. SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC), COMMISSIONER OF CUSTOMS, ASSISTANT SECRETARY, LAND TRANSPORTATION OFFICE (LTO), COLLECTOR OF CUSTOMS, SUBIC BAY FREE PORT ZONE, AND CHIEF OF LTO, SUBIC BAY FREE PORT ZONE, Petitioners, vs. SOUTHWING HEAVY INDUSTRIES, INC., represented by its President JOSE T. DIZON, UNITED AUCTIONEERS, INC., represented by its President DOMINIC SYTIN, and MICROVAN, INC., represented by its President MARIANO C. SONON, Respondents. x---------------x G.R. No. 164172 February 20, 2006

HON. EXECUTIVE SECRETARY, SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATION (DOTC), COMMISSIONER OF CUSTOMS, ASSISTANT SECRETARY, LAND TRANSPORTATION OFFICE (LTO), COLLECTOR OF CUSTOMS, SUBIC BAY FREE PORT ZONE AND CHIEF OF LTO, SUBIC BAY FREE PORT ZONE, Petitioners, vs. SUBIC INTEGRATED MACRO VENTURES CORP., represented by its President YOLANDA AMBAR,Respondent. x---------------x G.R. No. 168741 February 20, 2006

HON. EXECUTIVE SECRETARY, HON. SECRETARY OF FINANCE, THE CHIEF OF THE LAND TRANSPORTATION OFFICE, THE COMMISSIONER OF CUSTOMS, and THE COLLECTOR OF CUSTOMS, SUBIC SPECIAL ECONOMIC ZONE, Petitioners, vs. MOTOR VEHICLE IMPORTERS ASSOCIATION OF SUBIC BAY

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

18. garbage compactors 19. self loader trucks 20. man lift trucks

3.1.5 Special purpose vehicles: 21. lighting trucks 1. fire trucks 22. trucks mounted with special purpose equipment 2. ambulances 3. funeral hearse/coaches 4. crane lorries 5. tractor heads and truck tractors 6. boom trucks 7. tanker trucks 8. tank lorries with high pressure spray gun 9. reefers or refrigerated trucks 10. mobile drilling derricks 11. transit/concrete mixers 12. mobile radiological units 13. wreckers or tow trucks 14. concrete pump trucks 15. aerial/bucket flat-form trucks 16. street sweepers 17. vacuum trucks 23. all other types of vehicle designed for a specific use. The issuance of EO 156 spawned three separate actions for declaratory relief before Branch 72 of the Regional Trial Court of Olongapo City, all seeking the declaration of the unconstitutionality of Article 2, Section 3.1 of said executive order. The cases were filed by herein respondent entities, who or whose members, are classified as Subic Bay Freeport Enterprises and engaged in the business of, among others, importing and/or trading used motor vehicles. G.R. No. 164171: On January 16, 2004, respondents Southwing Heavy Industries, Inc., (Southwing) United Auctioneers, Inc. (United Auctioneers), and Microvan, Inc. (Microvan), instituted a declaratory relief case docketed as Civil Case No. 20-0-04,1 against the Executive Secretary, Secretary of Transportation and Communication, Commissioner of Customs, Assistant Secretary and Head of the Land Transportation Office, Subic Bay Metropolitan Authority (SBMA), Collector of Customs for the Port at Subic Bay Freeport Zone, and the Chief of the Land Transportation Office at Subic Bay Freeport Zone. Southwing, United Auctioneers and Microvan prayed that judgment be rendered (1) declaring Article 2, Section 3.1 of EO 156 unconstitutional and illegal; (2) directing the Secretary of Finance, Commissioner of Customs, Collector of Customs and the Chairman of the SBMA to allow the importation of used motor vehicles; (2) ordering the Land Transportation Office and its subordinates inside the Subic Special Economic Zone to process the registration of the imported used motor vehicles; and (3) in general, to allow the unimpeded entry and importation of used motor vehicles subject only to the payment of the required customs duties. Upon filing of petitioners answer/comment, respondents Southwing and Microvan filed a motion for summary judgment which was granted by the

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trial court. On May 24, 2004, a summary judgment was rendered declaring that Article 2, Section 3.1 of EO 156 constitutes an unlawful usurpation of legislative power vested by the Constitution with Congress. The trial court further held that the proviso is contrary to the mandate of Republic Act No. 7227 (RA 7227) or the Bases Conversion and Development Act of 1992 which allows the free flow of goods and capital within the Freeport. The dispositive portion of the said decision reads: WHEREFORE, judgment is hereby rendered in favor of petitioner declaring Executive Order 156 [Article 2, Section] 3.1 for being unconstitutional and illegal; directing respondents Collector of Customs based at SBMA to allow the importation and entry of used motor vehicles pursuant to the mandate of RA 7227; directing respondent Chief of the Land Transportation Office and its subordinates inside the Subic Special Economic Zone or SBMA to process the registration of imported used motor vehicle; and in general, to allow unimpeded entry and importation of used motor vehicles to the Philippines subject only to the payment of the required customs duties. SO ORDERED.2 From the foregoing decision, petitioners sought relief before this Court via a petition for review on certiorari, docketed as G.R. No. 164171. G.R. No. 164172: On January 20, 2004, respondent Subic Integrated Macro Ventures Corporation (Macro Ventures) filed with the same trial court, a similar action for declaratory relief docketed as Civil Case No. 22-0-04,3 with the same prayer and against the same parties4 as those in Civil Case No. 20-0-04. In this case, the trial court likewise rendered a summary judgment on May 24, 2004, holding that Article 2, Section 3.1 of EO 156, is repugnant to the constitution.5 Elevated to this Court via a petition for review on certiorari, Civil Case No. 22-0-04 was docketed as G.R. No. 164172. G.R. No. 168741 On January 22, 2003, respondent Motor Vehicle Importers Association of Subic Bay Freeport, Inc. (Association), filed another action for declaratory relief with essentially the same prayer as those in Civil Case No. 22-0-04 and Civil Case No. 20-0-04, against the Executive Secretary, Secretary of Finance, Chief of the Land Transportation Office, Commissioner of Customs, Collector of Customs at SBMA and the Chairman of SBMA. This was docketed as Civil Case No. 30-0-2003,6 before the same trial court.

In a decision dated March 10, 2004, the court a quo granted the Associations prayer and declared the assailed proviso as contrary to the Constitution, to wit: WHEREFORE, judgment is hereby rendered in favor of petitioner declaring Executive Order 156 [Article 2, Section] 3.1 for being unconstitutional and illegal; directing respondents Collector of Customs based at SBMA to allow the importation and entry of used motor vehicles pursuant to the mandate of RA 7227; directing respondent Chief of the Land Transportation Office and its subordinates inside the Subic Special Economic Zone or SBMA to process the registration of imported used motor vehicles; directing the respondent Chairman of the SBMA to allow the entry into the Subic Special Economic Zone or SBMA imported used motor vehicle; and in general, to allow unimpeded entry and importation of used motor vehicles to the Philippines subject only to the payment of the required customs duties. SO ORDERED.7 Aggrieved, the petitioners in Civil Case No. 30-0-2003, filed a petition for certiorari8 with the Court of Appeals (CA-G.R. SP. No. 83284) which denied the petition on February 14, 2005 and sustained the finding of the trial court that Article 2, Section 3.1 of EO 156, is void for being repugnant to the constitution. The dispositive portion thereof, reads: WHEREFORE, the instant petition for certiorari is hereby DENIED. The assailed decision of the Regional Trial Court, Third Judicial Region, Branch 72, Olongapo City, in Civil Case No. 30-0-2003, accordingly, STANDS. SO ORDERED.9 The aforequoted decision of the Court of Appeals was elevated to this Court and docketed as G.R. No. 168741. In a Resolution dated October 4, 2005,10 said case was consolidated with G.R. No. 164171 and G.R. No. 164172. Petitioners are now before this Court contending that Article 2, Section 3.1 of EO 156 is valid and applicable to the entire country, including the Freeeport. In support of their arguments, they raise procedural and substantive issues bearing on the constitutionality of the assailed proviso. The procedural issues are: the lack of respondents locus standi to question the validity of EO 156, the propriety of challenging EO 156 in a declaratory relief proceeding and the applicability of a judgment on the pleadings in this case. Petitioners argue that respondents will not be affected by the importation ban considering that their certificate of registration and tax exemption do not

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authorize them to engage in the importation and/or trading of used cars. They also aver that the actions filed by respondents do not qualify as declaratory relief cases. Section 1, Rule 63 of the Rules of Court provides that a petition for declaratory relief may be filed before there is a breach or violation of rights. Petitioners claim that there was already a breach of respondents supposed right because the cases were filed more than a year after the issuance of EO 156. In fact, in Civil Case No. 30-0-2003, numerous warrants of seizure and detention were issued against imported used motor vehicles belonging to respondent Associations members. Petitioners arguments lack merit. The established rule that the constitutionality of a law or administrative issuance can be challenged by one who will sustain a direct injury as a result of its enforcement11 has been satisfied in the instant case. The broad subject of the prohibited importation is "all types of used motor vehicles." Respondents would definitely suffer a direct injury from the implementation of EO 156 because their certificate of registration and tax exemption authorize them to trade and/or import new and used motor vehicles and spare parts, except "used cars."12 Other types of motor vehicles imported and/or traded by respondents and not falling within the category of used cars would thus be subjected to the ban to the prejudice of their business. Undoubtedly, respondents have the legal standing to assail the validity of EO 156. As to the propriety of declaratory relief as a vehicle for assailing the executive issuance, suffice it to state that any breach of the rights of respondents will not affect the case. In Commission on Audit of the Province of Cebu v. Province of Cebu,13 the Court entertained a suit for declaratory relief to finally settle the doubt as to the proper interpretation of the conflicting laws involved, notwithstanding a violation of the right of the party affected. We find no reason to deviate from said ruling mindful of the significance of the present case to the national economy. So also, summary judgments were properly rendered by the trial court because the issues involved in the instant case were pure questions of law. A motion for summary judgment is premised on the assumption that the issues presented need not be tried either because these are patently devoid of substance or that there is no genuine issue as to any pertinent fact. It is a method sanctioned by the Rules of Court for the prompt disposition of a civil action in which the pleadings raise only a legal issue, not a genuine issue as to any material fact.14 At any rate, even assuming the procedural flaws raised by petitioners truly exist, the Court is not precluded from brushing aside these technicalities and

taking cognizance of the action filed by respondents considering its importance to the public and in keeping with the duty to determine whether the other branches of the government have kept themselves within the limits of the Constitution.15 We now come to the substantive issues, which are: (1) whether there is statutory basis for the issuance of EO 156; and (2) if the answer is in the affirmative, whether the application of Article 2, Section 3.1 of EO 156, reasonable and within the scope provided by law. The main thrust of the petition is that EO 156 is constitutional because it was issued pursuant to EO 226, the Omnibus Investment Code of the Philippines and that its application should be extended to the Freeport because the guarantee of RA 7227 on the free flow of goods into the said zone is merely an exemption from customs duties and taxes on items brought into the Freeport and not an open floodgate for all kinds of goods and materials without restriction. In G.R. No. 168741, the Court of Appeals invalidated Article 2, Section 3.1 of EO 156, on the ground of lack of any statutory basis for the President to issue the same. It held that the prohibition on the importation of used motor vehicles is an exercise of police power vested on the legislature and absent any enabling law, the exercise thereof by the President through an executive issuance, is void. Police power is inherent in a government to enact laws, within constitutional limits, to promote the order, safety, health, morals, and general welfare of society. It is lodged primarily with the legislature. By virtue of a valid delegation of legislative power, it may also be exercised by the President and administrative boards, as well as the lawmaking bodies on all municipal levels, including the barangay.16 Such delegation confers upon the Presidentquasi-legislative power which may be defined as the authority delegated by the law-making body to the administrative body to adopt rules and regulations intended to carry out the provisions of the law and implement legislative policy.17 To be valid, an administrative issuance, such as an executive order, must comply with the following requisites: (1) Its promulgation must be authorized by the legislature; (2) It must be promulgated in accordance with the prescribed procedure; (3) It must be within the scope of the authority given by the legislature; and

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(4) It must be reasonable.18 Contrary to the conclusion of the Court of Appeals, EO 156 actually satisfied the first requisite of a valid administrative order. It has both constitutional and statutory bases. Delegation of legislative powers to the President is permitted in Section 28(2) of Article VI of the Constitution. It provides: (2) The Congress may, by law, authorize the President to fix within specified limits, and subject to such limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts within the framework of the national development program of the Government.19 (Emphasis supplied) The relevant statutes to execute this provision are: 1) The Tariff and Customs Code which authorizes the President, in the interest of national economy, general welfare and/or national security, to, inter alia, prohibit the importation of any commodity. Section 401 thereof, reads: Sec. 401. Flexible Clause. a. In the interest of national economy, general welfare and/or national security, and subject to the limitations herein prescribed, the President, upon recommendation of the National Economic and Development Authority (hereinafter referred to as NEDA), is hereby empowered: x x x (2) to establish import quota or to ban imports of any commodity, as may be necessary; x x x Provided, That upon periodic investigations by the Tariff Commission and recommendation of the NEDA, the President may cause a gradual reduction of protection levels granted in Section One hundred and four of this Code, including those subsequently granted pursuant to this section. (Emphasis supplied) 2) Executive Order No. 226, the Omnibus Investment Code of the Philippines which was issued on July 16, 1987, by then President Corazon C. Aquino, in the exercise of legislative power under the Provisional Freedom Constitution,20 empowers the President to approve or reject the prohibition on the importation of any equipment or raw materials or finished products. Pertinent provisions thereof, read: ART. 4. Composition of the board. The Board of Investments shall be composed of seven (7) governors: The Secretary of Trade and Industry, three

(3) Undersecretaries of Trade and Industry to be chosen by the President; and three (3) representatives from the government agencies and the private sector x x x. ART. 7. Powers and duties of the Board. xxxx (12) Formulate and implement rationalization programs for certain industries whose operation may result in dislocation, overcrowding or inefficient use of resources, thus impeding economic growth. For this purpose, the Board may formulate guidelines for progressive manufacturing programs, local content programs, mandatory sourcing requirements and dispersal of industries. In appropriate cases and upon approval of the President, the Board may restrict, either totally or partially, the importation of any equipment or raw materials or finished products involved in the rationalization program; (Emphasis supplied) 3) Republic Act No. 8800, otherwise known as the "Safeguard Measures Act" (SMA), and entitled "An Act Protecting Local Industries By Providing Safeguard Measures To Be Undertaken In Response To Increased Imports And Providing Penalties For Violation Thereof,"21 designated the Secretaries22 of the Department of Trade and Industry (DTI) and the Department of Agriculture, in their capacity as alter egos of the President, as the implementing authorities of the safeguard measures, which include, inter alia, modification or imposition of any quantitative restriction on the importation of a product into the Philippines. The purpose of the SMA is stated in the declaration of policy, thus: SEC. 2. Declaration of Policy. The State shall promote competitiveness of domestic industries and producers based on sound industrial and agricultural development policies, and efficient use of human, natural and technical resources. In pursuit of this goal and in the public interest, the State shall provide safeguard measures to protect domestic industries and producers from increased imports which cause or threaten to cause serious injury to those domestic industries and producers. There are thus explicit constitutional and statutory permission authorizing the President to ban or regulate importation of articles and commodities into the country. Anent the second requisite, that is, that the order must be issued or promulgated in accordance with the prescribed procedure, it is necessary that the nature of the administrative issuance is properly determined. As in the enactment of laws, the general rule is that, the promulgation of

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administrative issuances requires previous notice and hearing, the only exception being where the legislature itself requires it and mandates that the regulation shall be based on certain facts as determined at an appropriate investigation.23 This exception pertains to the issuance of legislative rules as distinguished from interpretative rules which give no real consequence more than what the law itself has already prescribed;24 and are designed merely to provide guidelines to the law which the administrative agency is in charge of enforcing.25 A legislative rule, on the other hand, is in the nature of subordinate legislation, crafted to implement a primary legislation. In Commissioner of Internal Revenue v. Court of Appeals,26 and Commissioner of Internal Revenue v. Michel J. Lhuillier Pawnshop, Inc.,27 the Court enunciated the doctrine that when an administrative rule goes beyond merely providing for the means that can facilitate or render less cumbersome the implementation of the law and substantially increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be heard and, thereafter, to be duly informed, before the issuance is given the force and effect of law. In the instant case, EO 156 is obviously a legislative rule as it seeks to implement or execute primary legislative enactments intended to protect the domestic industry by imposing a ban on the importation of a specified product not previously subject to such prohibition. The due process requirements in the issuance thereof are embodied in Section 40128 of the Tariff and Customs Code and Sections 5 and 9 of the SMA29 which essentially mandate the conduct of investigation and public hearings before the regulatory measure or importation ban may be issued. In the present case, respondents neither questioned before this Court nor with the courts below the procedure that paved the way for the issuance of EO 156. What they challenged in their petitions before the trial court was the absence of "substantive due process" in the issuance of the EO.30 Their main contention before the court a quo is that the importation ban is illogical and unfair because it unreasonably drives them out of business to the prejudice of the national economy. Considering the settled principle that in the absence of strong evidence to the contrary, acts of the other branches of the government are presumed to be valid,31 and there being no objection from the respondents as to the procedure in the promulgation of EO 156, the presumption is that said executive issuance duly complied with the procedures and limitations imposed by law. To determine whether EO 156 has complied with the third and fourth requisites of a valid administrative issuance, to wit, that it was issued within

the scope of authority given by the legislature and that it is reasonable, an examination of the nature of a Freeport under RA 7227 and the primordial purpose of the importation ban under the questioned EO is necessary. RA 7227 was enacted providing for, among other things, the sound and balanced conversion of the Clark and Subic military reservations and their extensions into alternative productive uses in the form of Special Economic and Freeport Zone, or the Subic Bay Freeport, in order to promote the economic and social development of Central Luzon in particular and the country in general. The Rules and Regulations Implementing RA 7227 specifically defines the territory comprising the Subic Bay Freeport, referred to as the Special Economic and Freeport Zone in Section 12 of RA 7227 as "a separate customs territory consisting of the City of Olongapo and the Municipality of Subic, Province of Zambales, the lands occupied by the Subic Naval Base and its contiguous extensions as embraced, covered and defined by the 1947 Philippine-U.S. Military Base Agreement as amended and within the territorial jurisdiction of Morong and Hermosa, Province of Bataan, the metes and bounds of which shall be delineated by the President of the Philippines; provided further that pending establishment of secure perimeters around the entire SBF, the SBF shall refer to the area demarcated by the SBMA pursuant to Section 1332 hereof." Among the salient provisions of RA 7227 are as follows: SECTION 12. Subic Special Economic Zone. xxxx The abovementioned zone shall be subject to the following policies: xxxx (a) Within the framework and subject to the mandate and limitations of the Constitution and the pertinent provisions of the Local Government Code, the Subic Special Economic Zone shall be developed into a self-sustaining, industrial, commercial, financial and investment center to generate employment opportunities in and around the zone and to attract and promote productive foreign investments; (b) The Subic Special Economic Zone shall be operated and managed as a separate customs territory ensuring free flow or movement of

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goods and capital within, into and exported out of the Subic Special Economic Zone, as well as provide incentives such as tax and dutyfree importations of raw materials, capital and equipment. However, exportation or removal of goods from the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines; The Freeport was designed to ensure free flow or movement of goods and capital within a portion of the Philippine territory in order to attract investors to invest their capital in a business climate with the least governmental intervention. The concept of this zone was explained by Senator Guingona in this wise: Senator Guingona. Mr. President, the special economic zone is successful in many places, particularly Hong Kong, which is a free port. The difference between a special economic zone and an industrial estate is simply expansive in the sense that the commercial activities, including the establishment of banks, services, financial institutions, agro-industrial activities, maybe agriculture to a certain extent. This delineates the activities that would have the least of government intervention, and the running of the affairs of the special economic zone would be run principally by the investors themselves, similar to a housing subdivision, where the subdivision owners elect their representatives to run the affairs of the subdivision, to set the policies, to set the guidelines. We would like to see Subic area converted into a little Hong Kong, Mr. President, where there is a hub of free port and free entry, free duties and activities to a maximum spur generation of investment and jobs. While the investor is reluctant to come in the Philippines, as a rule, because of red tape and perceived delays, we envision this special economic zone to be an area where there will be minimum government interference. The initial outlay may not only come from the Government or the Authority as envisioned here, but from them themselves, because they would be encouraged to invest not only for the land but also for the buildings and factories. As long as they are convinced that in such an area they can do business and reap reasonable profits, then many from other parts, both local and foreign, would invest, Mr. President.33 (Emphasis, added) With minimum interference from the government, investors can, in general, engage in any kind of business as well as import and export any article into and out of the Freeport. These are among the rights accorded to Subic Bay

Freeport Enterprises under Section 39 of the Rules and Regulations Implementing RA 7227, thus SEC. 39. Rights and Obligations.- SBF Enterprises shall have the following rights and obligations: a. To freely engage in any business, trade, manufacturing, financial or service activity, and to import and export freely all types of goods into and out of the SBF, subject to the provisions of the Act, these Rules and other regulations that may be promulgated by the SBMA; Citing, inter alia, the interpellations of Senator Enrile, petitioners claim that the "free flow or movement of goods and capital" only means that goods and material brought within the Freeport shall not be subject to customs duties and other taxes and should not be construed as an open floodgate for entry of all kinds of goods. They thus surmise that the importation ban on motor vehicles is applicable within the Freeport. Pertinent interpellations of Senator Enrile on the concept of Freeport is as follows: Senator Enrile: Mr. President, I think we are talking here of sovereign concepts, not territorial concepts. The concept that we are supposed to craft here is to carve out a portion of our terrestrial domain as well as our adjacent waters and say to the world: "Well, you can set up your factories in this area that we are circumscribing, and bringing your equipment and bringing your goods, you are not subject to any taxes and duties because you are not within the customs jurisdiction of the Republic of the Philippines, whether you store the goods or only for purposes of transshipment or whether you make them into finished products again to be reexported to other lands." xxxx My understanding of a "free port" is, we are in effect carving out a part of our territory and make it as if it were foreign territory for purposes of our customs laws, and that people can come, bring their goods, store them there and bring them out again, as long as they do not come into the domestic commerce of the Republic. We do not really care whether these goods are stored here. The only thing that we care is for our people to have an employment because of the entry of these goods that are being discharged, warehoused and reloaded into the ships so that they can be exported. That will generate employment for us. For as long as that is done, we are saying, in effect, that we have the least contact with our tariff and customs laws and our tax laws. Therefore, we consider these goods as outside of the customs jurisdiction of the Republic of the Philippines as yet, until we draw them from this territory and bring them

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inside our domestic commerce. In which case, they have to pass through our customs gate. I thought we are carving out this entire area and convert it into this kind of concept.34 However, contrary to the claim of petitioners, there is nothing in the foregoing excerpts which absolutely limits the incentive to Freeport investors only to exemption from customs duties and taxes. Mindful of the legislative intent to attract investors, enhance investment and boost the economy, the legislature could not have limited the enticement only to exemption from taxes. The minimum interference policy of the government on the Freeport extends to the kind of business that investors may embark on and the articles which they may import or export into and out of the zone. A contrary interpretation would defeat the very purpose of the Freeport and drive away investors. It does not mean, however, that the right of Freeport enterprises to import all types of goods and article is absolute. Such right is of course subject to the limitation that articles absolutely prohibited by law cannot be imported into the Freeport.35 Nevertheless, in determining whether the prohibition would apply to the Freeport, resort to the purpose of the prohibition is necessary. In issuing EO 156, particularly the prohibition on importation under Article 2, Section 3.1, the President envisioned to rationalize the importation of used motor vehicles and to enhance the capabilities of the Philippine motor manufacturing firms to be globally competitive producers of completely buildup units and their parts and components for the local and export markets.36 In justifying the issuance of EO 156, petitioners alleged that there has been a decline in the sales of new vehicles and a remarkable growth of the sales of imported used motor vehicles. To address the same, the President issued the questioned EO to prevent further erosion of the already depressed market base of the local motor vehicle industry and to curtail the harmful effects of the increase in the importation of used motor vehicles.37 Taking our bearings from the foregoing discussions, we hold that the importation ban runs afoul the third requisite for a valid administrative order. To be valid, an administrative issuance must not be ultra vires or beyond the limits of the authority conferred. It must not supplant or modify the Constitution, its enabling statute and other existing laws, for such is the sole function of the legislature which the other branches of the government cannot usurp. As held in United BF Homeowners Association v. BF Homes, Inc.:38 The rule-making power of a public administrative body is a delegated legislative power, which it may not use either to abridge the authority given it by Congress or the Constitution or to enlarge its power beyond the scope

intended. Constitutional and statutory provisions control what rules and regulations may be promulgated by such a body, as well as with respect to what fields are subject to regulation by it. It may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute. In the instant case, the subject matter of the laws authorizing the President to regulate or forbid importation of used motor vehicles, is the domestic industry. EO 156, however, exceeded the scope of its application by extending the prohibition on the importation of used cars to the Freeport, which RA 7227, considers to some extent, a foreign territory. The domestic industry which the EO seeks to protect is actually the "customs territory" which is defined under the Rules and Regulations Implementing RA 7227, as follows: "the portion of the Philippines outside the Subic Bay Freeport where the Tariff and Customs Code of the Philippines and other national tariff and customs laws are in force and effect."39 The proscription in the importation of used motor vehicles should be operative only outside the Freeport and the inclusion of said zone within the ambit of the prohibition is an invalid modification of RA 7227. Indeed, when the application of an administrative issuance modifies existing laws or exceeds the intended scope, as in the instant case, the issuance becomes void, not only for being ultra vires, but also for being unreasonable. This brings us to the fourth requisite. It is an axiom in administrative law that administrative authorities should not act arbitrarily and capriciously in the issuance of rules and regulations. To be valid, such rules and regulations must be reasonable and fairly adapted to secure the end in view. If shown to bear no reasonable relation to the purposes for which they were authorized to be issued, then they must be held to be invalid.40 There is no doubt that the issuance of the ban to protect the domestic industry is a reasonable exercise of police power. The deterioration of the local motor manufacturing firms due to the influx of imported used motor vehicles is an urgent national concern that needs to be swiftly addressed by the President. In the exercise of delegated police power, the executive can therefore validly proscribe the importation of these vehicles. Thus, in Taxicab Operators of Metro Manila, Inc. v. Board of Transportation,41 the Court held that a regulation phasing out taxi cabs more than six years old is a valid exercise of police power. The regulation was sustained as reasonable holding that the purpose thereof was to promote the convenience and comfort and protect the safety of the passengers.

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The problem, however, lies with respect to the application of the importation ban to the Freeport. The Court finds no logic in the all encompassing application of the assailed provision to the Freeport which is outside the customs territory. As long as the used motor vehicles do not enter the customs territory, the injury or harm sought to be prevented or remedied will not arise. The application of the law should be consistent with the purpose of and reason for the law. Ratione cessat lex, et cessat lex. When the reason for the law ceases, the law ceases. It is not the letter alone but the spirit of the law also that gives it life.42 To apply the proscription to the Freeport would not serve the purpose of the EO. Instead of improving the general economy of the country, the application of the importation ban in the Freeport would subvert the avowed purpose of RA 7227 which is to create a market that would draw investors and ultimately boost the national economy. In similar cases, we also declared void the administrative issuance or ordinances concerned for being unreasonable. To illustrate, in De la Cruz v. Paras,43 the Court held as unreasonable and unconstitutional an ordinance characterized by overbreadth. In that case, the Municipality of Bocaue, Bulacan, prohibited the operation of all night clubs, cabarets and dance halls within its jurisdiction for the protection of public morals. As explained by the Court: x x x It cannot be said that such a sweeping exercise of a lawmaking power by Bocaue could qualify under the term reasonable. The objective of fostering public morals, a worthy and desirable end can be attained by a measure that does not encompass too wide a field. Certainly the ordinance on its face is characterized by overbreadth. The purpose sought to be achieved could have been attained by reasonable restrictions rather than by an absolute prohibition. The admonition in Salaveria should be heeded: "The Judiciary should not lightly set aside legislative action when there is not a clear invasion of personal or property rights under the guise of police regulation." It is clear that in the guise of a police regulation, there was in this instance a clear invasion of personal or property rights, personal in the case of those individuals desirous of patronizing those night clubs and property in terms of the investments made and salaries to be earned by those therein employed.

at least minimized. Making the examinees suffer by depriving them of legitimate means of review or preparation on those last three precious days when they should be refreshing themselves with all that they have learned in the review classes and preparing their mental and psychological make-up for the examination day itself would be like uprooting the tree to get rid of a rotten branch. What is needed to be done by the respondent is to find out the source of such leakages and stop it right there. If corrupt officials or personnel should be terminated from their loss, then so be it. Fixers or swindlers should be flushed out. Strict guidelines to be observed by examiners should be set up and if violations are committed, then licenses should be suspended or revoked. x x x In Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc.,45 the Court likewise struck down as unreasonable and overbreadth a city ordinance granting an exclusive franchise for 25 years, renewable for another 25 years, to one entity for the construction and operation of one common bus and jeepney terminal facility in Lucena City. While professedly aimed towards alleviating the traffic congestion alleged to have been caused by the existence of various bus and jeepney terminals within the city, the ordinance was held to be beyond what is reasonably necessary to solve the traffic problem in the city. By parity of reasoning, the importation ban in this case should also be declared void for its too sweeping and unnecessary application to the Freeport which has no bearing on the objective of the prohibition. If the aim of the EO is to prevent the entry of used motor vehicles from the Freeport to the customs territory, the solution is not to forbid entry of these vehicles into the Freeport, but to intensify governmental campaign and measures to thwart illegal ingress of used motor vehicles into the customs territory. At this juncture, it must be mentioned that on June 19, 1993, President Fidel V. Ramos issued Executive Order No. 97-A, "Further Clarifying The Tax And Duty-Free Privilege Within The Subic Special Economic And Free Port Zone," Section 1 of which provides: SECTION 1. The following guidelines shall govern the tax and duty-free privilege within the Secured Area of the Subic Special Economic and Free Port Zone: 1.1. The Secured Area consisting of the presently fenced-in former Subic Naval Base shall be the only completely tax and duty-free area in the SSEFPZ. Business enterprises and individuals (Filipinos and foreigners) residing within the Secured Area are free to import raw materials, capital goods, equipment, and consumer items tax and dutry-free. Consumption items, however, must be consumed within the Secured Area. Removal of raw

Lupangco v. Court of Appeals,44 is a case involving a resolution issued by the

Professional Regulation Commission which prohibited examinees from attending review classes and receiving handout materials, tips, and the like three days before the date of examination in order to preserve the integrity and purity of the licensure examinations in accountancy. Besides being unreasonable on its face and violative of academic freedom, the measure was found to be more sweeping than what was necessary, viz: Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the alleged leakages in the licensure examinations will be eradicated or

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materials, capital goods, equipment and consumer items out of the Secured Area for sale to non-SSEFPZ registered enterprises shall be subject to the usual taxes and duties, except as may be provided herein. In Tiu v. Court of Appeals46 as reiterated in Coconut Oil Refiners Association, Inc. v. Torres,47 this provision limiting the special privileges on tax and dutyfree importation in the presently fenced-in former Subic Naval Base has been declared valid and constitutional and in accordance with RA 7227. Consistent with these rulings and for easier management and monitoring of activities and to prevent fraudulent importation of merchandise and smuggling, the free flow and importation of used motor vehicles shall be operative only within the "secured area." In sum, the Court finds that Article 2, Section 3.1 of EO 156 is void insofar as it is made applicable to the presently secured fenced-in former Subic Naval Base area as stated in Section 1.1 of EO 97-A. Pursuant to the separability clause48 of EO 156, Section 3.1 is declared valid insofar as it applies to the customs territory or the Philippine territory outside the presently secured fenced-in former Subic Naval Base area as stated in Section 1.1 of EO 97-A. Hence, used motor vehicles that come into the Philippine territory via the secured fenced-in former Subic Naval Base area may be stored, used or traded therein, or exported out of the Philippine territory, but they cannot be imported into the Philippine territory outside of the secured fenced-in former Subic Naval Base area. WHEREFORE, the petitions are PARTIALLY GRANTED and the May 24, 2004 Decisions of Branch 72, Regional Trial Court of Olongapo City, in Civil Case No. 20-0-04 and Civil Case No. 22-0-04; and the February 14, 2005 Decision of the Court of Appeals in CA-G.R. SP No. 63284, are MODIFIED insofar as they declared Article 2, Section 3.1 of Executive Order No. 156, void in its entirety. Said provision is declared VALID insofar as it applies to the Philippine territory outside the presently fenced-in former Subic Naval Base area and VOID with respect to its application to the secured fenced-in former Subic Naval Base area. SO ORDERED.

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Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 144104 June 29, 2004

The petitioner accepts paying and non-paying patients. It also renders medical services to out-patients, both paying and non-paying. Aside from its income from paying patients, the petitioner receives annual subsidies from the government. On June 7, 1993, both the land and the hospital building of the petitioner were assessed for real property taxes in the amount of P4,554,860 by the City Assessor of Quezon City.3 Accordingly, Tax Declaration Nos. C-021-01226 (16-2518) and C-021-01231 (15-2518-A) were issued for the land and the hospital building, respectively.4 On August 25, 1993, the petitioner filed a Claim for Exemption5 from real property taxes with the City Assessor, predicated on its claim that it is a charitable institution. The petitioners request was denied, and a petition was, thereafter, filed before the Local Board of Assessment Appeals of Quezon City (QC-LBAA, for brevity) for the reversal of the resolution of the City Assessor. The petitioner alleged that under Section 28, paragraph 3 of the 1987 Constitution, the property is exempt from real property taxes. It averred that a minimum of 60% of its hospital beds are exclusively used for charity patients and that the major thrust of its hospital operation is to serve charity patients. The petitioner contends that it is a charitable institution and, as such, is exempt from real property taxes. The QC-LBAA rendered judgment dismissing the petition and holding the petitioner liable for real property taxes.6 The QC-LBAAs decision was, likewise, affirmed on appeal by the Central Board of Assessment Appeals of Quezon City (CBAA, for brevity)7 which ruled that the petitioner was not a charitable institution and that its real properties were not actually, directly and exclusively used for charitable purposes; hence, it was not entitled to real property tax exemption under the constitution and the law. The petitioner sought relief from the Court of Appeals, which rendered judgment affirming the decision of the CBAA.8 Undaunted, the petitioner filed its petition in this Court contending that: A. THE COURT A QUO ERRED IN DECLARING PETITIONER AS NOT ENTITLED TO REALTY TAX EXEMPTIONS ON THE GROUND THAT ITS LAND, BUILDING AND IMPROVEMENTS, SUBJECT OF ASSESSMENT, ARE NOT ACTUALLY, DIRECTLY AND EXCLUSIVELY DEVOTED FOR CHARITABLE PURPOSES. B. WHILE PETITIONER IS NOT DECLARED AS REAL PROPERTY TAX EXEMPT UNDER ITS CHARTER, PD 1823, SAID EXEMPTION MAY NEVERTHELESS BE EXTENDED UPON PROPER APPLICATION.

LUNG CENTER OF THE PHILIPPINES, petitioner, vs. QUEZON CITY and CONSTANTINO P. ROSAS, in his capacity as City Assessor of Quezon City,respondents. DECISION CALLEJO, SR., J.: This is a petition for review on certiorari under Rule 45 of the Rules of Court, as amended, of the Decision1 dated July 17, 2000 of the Court of Appeals in CA-G.R. SP No. 57014 which affirmed the decision of the Central Board of Assessment Appeals holding that the lot owned by the petitioner and its hospital building constructed thereon are subject to assessment for purposes of real property tax. The Antecedents The petitioner Lung Center of the Philippines is a non-stock and non-profit entity established on January 16, 1981 by virtue of Presidential Decree No. 1823.2 It is the registered owner of a parcel of land, particularly described as Lot No. RP-3-B-3A-1-B-1, SWO-04-000495, located at Quezon Avenue corner Elliptical Road, Central District, Quezon City. The lot has an area of 121,463 square meters and is covered by Transfer Certificate of Title (TCT) No. 261320 of the Registry of Deeds of Quezon City. Erected in the middle of the aforesaid lot is a hospital known as the Lung Center of the Philippines. A big space at the ground floor is being leased to private parties, for canteen and small store spaces, and to medical or professional practitioners who use the same as their private clinics for their patients whom they charge for their professional services. Almost one-half of the entire area on the left side of the building along Quezon Avenue is vacant and idle, while a big portion on the right side, at the corner of Quezon Avenue and Elliptical Road, is being leased for commercial purposes to a private enterprise known as the Elliptical Orchids and Garden Center.

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The petitioner avers that it is a charitable institution within the context of Section 28(3), Article VI of the 1987 Constitution. It asserts that its character as a charitable institution is not altered by the fact that it admits paying patients and renders medical services to them, leases portions of the land to private parties, and rents out portions of the hospital to private medical practitioners from which it derives income to be used for operational expenses. The petitioner points out that for the years 1995 to 1999, 100% of its out-patients were charity patients and of the hospitals 282-bed capacity, 60% thereof, or 170 beds, is allotted to charity patients. It asserts that the fact that it receives subsidies from the government attests to its character as a charitable institution. It contends that the "exclusivity" required in the Constitution does not necessarily mean "solely." Hence, even if a portion of its real estate is leased out to private individuals from whom it derives income, it does not lose its character as a charitable institution, and its exemption from the payment of real estate taxes on its real property. The petitioner cited our ruling in Herrera v. QC-BAA9 to bolster its pose. The petitioner further contends that even if P.D. No. 1823 does not exempt it from the payment of real estate taxes, it is not precluded from seeking tax exemption under the 1987 Constitution. In their comment on the petition, the respondents aver that the petitioner is not a charitable entity. The petitioners real property is not exempt from the payment of real estate taxes under P.D. No. 1823 and even under the 1987 Constitution because it failed to prove that it is a charitable institution and that the said property is actually, directly and exclusively used for charitable purposes. The respondents noted that in a newspaper report, it appears that graft charges were filed with the Sandiganbayan against the director of the petitioner, its administrative officer, and Zenaida Rivera, the proprietress of the Elliptical Orchids and Garden Center, for entering into a lease contract over 7,663.13 square meters of the property in 1990 for only P20,000 a month, when the monthly rental should beP357,000 a month as determined by the Commission on Audit; and that instead of complying with the directive of the COA for the cancellation of the contract for being grossly prejudicial to the government, the petitioner renewed the same on March 13, 1995 for a monthly rental of only P24,000. They assert that the petitioner uses the subsidies granted by the government for charity patients and uses the rest of its income from the property for the benefit of paying patients, among other purposes. They aver that the petitioner failed to adduce substantial evidence that 100% of its out-patients and 170 beds in the hospital are reserved for indigent patients. The respondents further assert, thus: 13. That the claims/allegations of the Petitioner LCP do not speak well of its record of service. That before a patient is admitted for treatment in the Center, first impression is that it is pay-patient and required to pay a certain amount as deposit. That even if a patient is living below the poverty line, he is charged with high hospital bills.

And, without these bills being first settled, the poor patient cannot be allowed to leave the hospital or be discharged without first paying the hospital bills or issue a promissory note guaranteed and indorsed by an influential agency or person known only to the Center; that even the remains of deceased poor patients suffered the same fate. Moreover, before a patient is admitted for treatment as free or charity patient, one must undergo a series of interviews and must submit all the requirements needed by the Center, usually accompanied by endorsement by an influential agency or person known only to the Center. These facts were heard and admitted by the Petitioner LCP during the hearings before the Honorable QCBAA and Honorable CBAA. These are the reasons of indigent patients, instead of seeking treatment with the Center, they prefer to be treated at the Quezon Institute. Can such practice by the Center be called charitable?10 The Issues The issues for resolution are the following: (a) whether the petitioner is a charitable institution within the context of Presidential Decree No. 1823 and the 1973 and 1987 Constitutions and Section 234(b) of Republic Act No. 7160; and (b) whether the real properties of the petitioner are exempt from real property taxes. The Courts Ruling The petition is partially granted. On the first issue, we hold that the petitioner is a charitable institution within the context of the 1973 and 1987 Constitutions. To determine whether an enterprise is a charitable institution/entity or not, the elements which should be considered include the statute creating the enterprise, its corporate purposes, its constitution and by-laws, the methods of administration, the nature of the actual work performed, the character of the services rendered, the indefiniteness of the beneficiaries, and the use and occupation of the properties.11 In the legal sense, a charity may be fully defined as a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of persons, either by bringing their minds and hearts under the influence of education or religion, by assisting them to establish themselves in life or otherwise lessening the burden of government.12 It may be applied to almost anything that tend to promote the well-doing and well-being of social man. It embraces the improvement and promotion of the happiness of man. 13 The word "charitable" is not restricted to relief of the poor or sick.14 The test of a

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charity and a charitable organization are in law the same. The test whether an enterprise is charitable or not is whether it exists to carry out a purpose reorganized in law as charitable or whether it is maintained for gain, profit, or private advantage. Under P.D. No. 1823, the petitioner is a non-profit and non-stock corporation which, subject to the provisions of the decree, is to be administered by the Office of the President of the Philippines with the Ministry of Health and the Ministry of Human Settlements. It was organized for the welfare and benefit of the Filipino people principally to help combat the high incidence of lung and pulmonary diseases in the Philippines. The raison detre for the creation of the petitioner is stated in the decree, viz: Whereas, for decades, respiratory diseases have been a priority concern, having been the leading cause of illness and death in the Philippines, comprising more than 45% of the total annual deaths from all causes, thus, exacting a tremendous toll on human resources, which ailments are likely to increase and degenerate into serious lung diseases on account of unabated pollution, industrialization and unchecked cigarette smoking in the country;lavvph!l.net Whereas, the more common lung diseases are, to a great extent, preventable, and curable with early and adequate medical care, immunization and through prompt and intensive prevention and health education programs; Whereas, there is an urgent need to consolidate and reinforce existing programs, strategies and efforts at preventing, treating and rehabilitating people affected by lung diseases, and to undertake research and training on the cure and prevention of lung diseases, through a Lung Center which will house and nurture the above and related activities and provide tertiary-level care for more difficult and problematical cases; Whereas, to achieve this purpose, the Government intends to provide material and financial support towards the establishment and maintenance of a Lung Center for the welfare and benefit of the Filipino people.15 The purposes for which the petitioner was created are spelled out in its Articles of Incorporation, thus: SECOND: That the purposes for which such corporation is formed are as follows:

1. To construct, establish, equip, maintain, administer and conduct an integrated medical institution which shall specialize in the treatment, care, rehabilitation and/or relief of lung and allied diseases in line with the concern of the government to assist and provide material and financial support in the establishment and maintenance of a lung center primarily to benefit the people of the Philippines and in pursuance of the policy of the State to secure the wellbeing of the people by providing them specialized health and medical services and by minimizing the incidence of lung diseases in the country and elsewhere. 2. To promote the noble undertaking of scientific research related to the prevention of lung or pulmonary ailments and the care of lung patients, including the holding of a series of relevant congresses, conventions, seminars and conferences; 3. To stimulate and, whenever possible, underwrite scientific researches on the biological, demographic, social, economic, eugenic and physiological aspects of lung or pulmonary diseases and their control; and to collect and publish the findings of such research for public consumption; 4. To facilitate the dissemination of ideas and public acceptance of information on lung consciousness or awareness, and the development of fact-finding, information and reporting facilities for and in aid of the general purposes or objects aforesaid, especially in human lung requirements, general health and physical fitness, and other relevant or related fields; 5. To encourage the training of physicians, nurses, health officers, social workers and medical and technical personnel in the practical and scientific implementation of services to lung patients; 6. To assist universities and research institutions in their studies about lung diseases, to encourage advanced training in matters of the lung and related fields and to support educational programs of value to general health; 7. To encourage the formation of other organizations on the national, provincial and/or city and local levels; and to coordinate their various efforts and activities for the

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purpose of achieving a more effective programmatic approach on the common problems relative to the objectives enumerated herein; 8. To seek and obtain assistance in any form from both international and local foundations and organizations; and to administer grants and funds that may be given to the organization; 9. To extend, whenever possible and expedient, medical services to the public and, in general, to promote and protect the health of the masses of our people, which has long been recognized as an economic asset and a social blessing; 10. To help prevent, relieve and alleviate the lung or pulmonary afflictions and maladies of the people in any and all walks of life, including those who are poor and needy, all without regard to or discrimination, because of race, creed, color or political belief of the persons helped; and to enable them to obtain treatment when such disorders occur; 11. To participate, as circumstances may warrant, in any activity designed and carried on to promote the general health of the community; 12. To acquire and/or borrow funds and to own all funds or equipment, educational materials and supplies by purchase, donation, or otherwise and to dispose of and distribute the same in such manner, and, on such basis as the Center shall, from time to time, deem proper and best, under the particular circumstances, to serve its general and non-profit purposes and objectives;lavvphil.net 13. To buy, purchase, acquire, own, lease, hold, sell, exchange, transfer and dispose of properties, whether real or personal, for purposes herein mentioned; and 14. To do everything necessary, proper, advisable or convenient for the accomplishment of any of the powers herein set forth and to do every other act and thing incidental thereto or connected therewith.16 Hence, the medical services of the petitioner are to be rendered to the public in general in any and all walks of life including those who are poor and the

needy without discrimination. After all, any person, the rich as well as the poor, may fall sick or be injured or wounded and become a subject of charity.17 As a general principle, a charitable institution does not lose its character as such and its exemption from taxes simply because it derives income from paying patients, whether out-patient, or confined in the hospital, or receives subsidies from the government, so long as the money received is devoted or used altogether to the charitable object which it is intended to achieve; and no money inures to the private benefit of the persons managing or operating the institution.18 In Congregational Sunday School, etc. v. Board of Review,19 the State Supreme Court of Illinois held, thus: [A]n institution does not lose its charitable character, and consequent exemption from taxation, by reason of the fact that those recipients of its benefits who are able to pay are required to do so, where no profit is made by the institution and the amounts so received are applied in furthering its charitable purposes, and those benefits are refused to none on account of inability to pay therefor. The fundamental ground upon which all exemptions in favor of charitable institutions are based is the benefit conferred upon the public by them, and a consequent relief, to some extent, of the burden upon the state to care for and advance the interests of its citizens.20 As aptly stated by the State Supreme Court of South Dakota in Lutheran Hospital Association of South Dakota v. Baker:21 [T]he fact that paying patients are taken, the profits derived from attendance upon these patients being exclusively devoted to the maintenance of the charity, seems rather to enhance the usefulness of the institution to the poor; for it is a matter of common observation amongst those who have gone about at all amongst the suffering classes, that the deserving poor can with difficulty be persuaded to enter an asylum of any kind confined to the reception of objects of charity; and that their honest pride is much less wounded by being placed in an institution in which paying patients are also received. The fact of receiving money from some of the patients does not, we think, at all impair the character of the charity, so long as the money thus received is devoted altogether to the charitable object which the institution is intended to further.22 The money received by the petitioner becomes a part of the trust fund and must be devoted to public trust purposes and cannot be diverted to private profit or benefit.23

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Under P.D. No. 1823, the petitioner is entitled to receive donations. The petitioner does not lose its character as a charitable institution simply because the gift or donation is in the form of subsidies granted by the government. As held by the State Supreme Court of Utah in Yorgason v. County Board of Equalization of Salt Lake County:24 Second, the government subsidy payments are provided to the project. Thus, those payments are like a gift or donation of any other kind except they come from the government. In both Intermountain Health Careand the present case, the crux is the presence or absence of material reciprocity. It is entirely irrelevant to this analysis that the government, rather than a private benefactor, chose to make up the deficit resulting from the exchange between St. Marks Tower and the tenants by making a contribution to the landlord, just as it would have been irrelevant in Intermountain Health Care if the patients income supplements had come from private individuals rather than the government. Therefore, the fact that subsidization of part of the cost of furnishing such housing is by the government rather than private charitable contributions does not dictate the denial of a charitable exemption if the facts otherwise support such an exemption, as they do here.25 In this case, the petitioner adduced substantial evidence that it spent its income, including the subsidies from the government for 1991 and 1992 for its patients and for the operation of the hospital. It even incurred a net loss in 1991 and 1992 from its operations. Even as we find that the petitioner is a charitable institution, we hold, anent the second issue, that those portions of its real property that are leased to private entities are not exempt from real property taxes as these are not actually, directly and exclusively used for charitable purposes. The settled rule in this jurisdiction is that laws granting exemption from tax are construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. Taxation is the rule and exemption is the exception. The effect of an exemption is equivalent to an appropriation. Hence, a claim for exemption from tax payments must be clearly shown and based on language in the law too plain to be mistaken.26 As held in Salvation Army v. Hoehn:27 An intention on the part of the legislature to grant an exemption from the taxing power of the state will never be implied from language which will admit of any other reasonable construction. Such an intention must be expressed in clear and unmistakable terms, or must appear by necessary implication from the language

used, for it is a well settled principle that, when a special privilege or exemption is claimed under a statute, charter or act of incorporation, it is to be construed strictly against the property owner and in favor of the public. This principle applies with peculiar force to a claim of exemption from taxation . 28 Section 2 of Presidential Decree No. 1823, relied upon by the petitioner, specifically provides that the petitioner shall enjoy the tax exemptions and privileges: SEC. 2. TAX EXEMPTIONS AND PRIVILEGES. Being a non-profit, non-stock corporation organized primarily to help combat the high incidence of lung and pulmonary diseases in the Philippines, all donations, contributions, endowments and equipment and supplies to be imported by authorized entities or persons and by the Board of Trustees of the Lung Center of the Philippines, Inc., for the actual use and benefit of the Lung Center, shall be exempt from income and gift taxes, the same further deductible in full for the purpose of determining the maximum deductible amount under Section 30, paragraph (h), of the National Internal Revenue Code, as amended. The Lung Center of the Philippines shall be exempt from the payment of taxes, charges and fees imposed by the Government or any political subdivision or instrumentality thereof with respect to equipment purchases made by, or for the Lung Center.29 It is plain as day that under the decree, the petitioner does not enjoy any property tax exemption privileges for its real properties as well as the building constructed thereon. If the intentions were otherwise, the same should have been among the enumeration of tax exempt privileges under Section 2: It is a settled rule of statutory construction that the express mention of one person, thing, or consequence implies the exclusion of all others. The rule is expressed in the familiar maxim, expressio unius est exclusio alterius. The rule of expressio unius est exclusio alterius is formulated in a number of ways. One variation of the rule is the principle that what is expressed puts an end to that which is implied. Expressium facit cessare tacitum. Thus, where a statute, by its terms, is expressly limited to certain matters, it may not, by interpretation or construction, be extended to other matters. ...

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The rule of expressio unius est exclusio alterius and its variations are canons of restrictive interpretation. They are based on the rules of logic and the natural workings of the human mind. They are predicated upon ones own voluntary act and not upon that of others. They proceed from the premise that the legislature would not have made specified enumeration in a statute had the intention been not to restrict its meaning and confine its terms to those expressly mentioned.30 The exemption must not be so enlarged by construction since the reasonable presumption is that the State has granted in express terms all it intended to grant at all, and that unless the privilege is limited to the very terms of the statute the favor would be intended beyond what was meant.31 Section 28(3), Article VI of the 1987 Philippine Constitution provides, thus: (3) Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, non-profit cemeteries, and all lands, buildings, and improvements, actually, directly and exclusively used for religious, charitable or educational purposes shall be exempt from taxation.32 The tax exemption under this constitutional provision covers property taxes only.33 As Chief Justice Hilario G. Davide, Jr., then a member of the 1986 Constitutional Commission, explained: ". . . what is exempted is not the institution itself . . .; those exempted from real estate taxes are lands, buildings and improvements actually, directly and exclusively used for religious, charitable or educational purposes."34 Consequently, the constitutional provision is implemented by Section 234(b) of Republic Act No. 7160 (otherwise known as the Local Government Code of 1991) as follows: SECTION 234. Exemptions from Real Property Tax. The following are exempted from payment of the real property tax: ... (b) Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, non-profit or religious cemeteries and all lands, buildings, and improvements actually, directly, andexclusively used for religious, charitable or educational purposes.35

We note that under the 1935 Constitution, "... all lands, buildings, and improvements used exclusively for charitable purposes shall be exempt from taxation."36 However, under the 1973 and the present Constitutions, for "lands, buildings, and improvements" of the charitable institution to be considered exempt, the same should not only be "exclusively" used for charitable purposes; it is required that such property be used "actually" and "directly" for such purposes.37 In light of the foregoing substantial changes in the Constitution, the petitioner cannot rely on our ruling in Herrera v. Quezon City Board of Assessment Appeals which was promulgated on September 30, 1961 before the 1973 and 1987 Constitutions took effect.38 As this Court held in Province of Abra v. Hernando:39 Under the 1935 Constitution: "Cemeteries, churches, and parsonages or convents appurtenant thereto, and all lands, buildings, and improvements used exclusively for religious, charitable, or educational purposes shall be exempt from taxation." The present Constitution added "charitable institutions, mosques, and non-profit cemeteries" and required that for the exemption of "lands, buildings, and improvements," they should not only be "exclusively" but also "actually" and "directly" used for religious or charitable purposes. The Constitution is worded differently. The change should not be ignored. It must be duly taken into consideration. Reliance on past decisions would have sufficed were the words "actually" as well as "directly" not added. There must be proof therefore of the actual and direct use of the lands, buildings, and improvements for religious or charitable purposes to be exempt from taxation. Under the 1973 and 1987 Constitutions and Rep. Act No. 7160 in order to be entitled to the exemption, the petitioner is burdened to prove, by clear and unequivocal proof, that (a) it is a charitable institution; and (b) its real properties are ACTUALLY, DIRECTLY and EXCLUSIVELY used for charitable purposes. "Exclusive" is defined as possessed and enjoyed to the exclusion of others; debarred from participation or enjoyment; and "exclusively" is defined, "in a manner to exclude; as enjoying a privilege exclusively."40 If real property is used for one or more commercial purposes, it is not exclusively used for the exempted purposes but is subject to taxation.41 The words "dominant use" or "principal use" cannot be substituted for the words "used exclusively" without doing violence to the Constitutions and the law.42 Solely is synonymous with exclusively.43 What is meant by actual, direct and exclusive use of the property for charitable purposes is the direct and immediate and actual application of the property itself to the purposes for which the charitable institution is

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organized. It is not the use of the income from the real property that is determinative of whether the property is used for tax-exempt purposes.44 The petitioner failed to discharge its burden to prove that the entirety of its real property is actually, directly and exclusively used for charitable purposes. While portions of the hospital are used for the treatment of patients and the dispensation of medical services to them, whether paying or non-paying, other portions thereof are being leased to private individuals for their clinics and a canteen. Further, a portion of the land is being leased to a private individual for her business enterprise under the business name "Elliptical Orchids and Garden Center." Indeed, the petitioners evidence shows that it collected P1,136,483.45 as rentals in 1991 and P1,679,999.28 for 1992 from the said lessees. Accordingly, we hold that the portions of the land leased to private entities as well as those parts of the hospital leased to private individuals are not exempt from such taxes.45 On the other hand, the portions of the land occupied by the hospital and portions of the hospital used for its patients, whether paying or non-paying, are exempt from real property taxes. IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The respondent Quezon City Assessor is hereby DIRECTED to determine, after due hearing, the precise portions of the land and the area thereof which are leased to private persons, and to compute the real property taxes due thereon as provided for by law. SO ORDERED.

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Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. 130716 December 9, 1998 FRANCISCO I. CHAVEZ, petitioner, vs. PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG) and MAGTANGGOL GUNIGUNDO (in his capacity as chairman of the PCGG), respondents, GLORIA A. JOPSON, CELNAN A. JOPSON, SCARLET A. JOPSON, and TERESA A. JOPSON, petitioners-in-intervention.

Petitioner Francisco I. Chavez, as "taxpayer, citizen and former government official who initiated the prosecution of the Marcoses and their cronies who committed unmitigated plunder of the public treasury and the systematic subjugation of the country's economy," alleges that what impelled him to bring this action were several news reports 2 bannered in a number of broadsheets sometime in September 1997. These news items referred to (1) the alleged discovery of billions of dollars of Marcos assets deposited in various coded accounts in Swiss banks; and (2) the reported execution of a compromise, between the government (through PCGG) and the Marcos heirs, on how to split or share these assets. Petitioner, invoking his constitutional right to information 3 and the correlative duty of the state to disclose publicly all its transactions involving the national interest, 4 demands that respondents make public any and all negotiations and agreements pertaining to PCGG's task of recovering the Marcoses' ill-gotten wealth. He claims that any compromise on the alleged billions of ill-gotten wealth involves an issue of "paramount public interest," since it has a "debilitating effect on the country's economy" that would be greatly prejudicial to the national interest of the Filipino people. Hence, the people in general have a right to know the transactions or deals being contrived and effected by the government. Respondents, on the other hand, do not deny forging a compromise agreement with the Marcos heirs. They claim, though, that petitioner's action is premature, because there is no showing that he has asked the PCGG to disclose the negotiations and the Agreements. And even if he has, PCGG may not yet be compelled to make any disclosure, since the proposed terms and conditions of the Agreements have not become effective and binding. Respondents further aver that the Marcos heirs have submitted the subject Agreements to the Sandiganbayan for its approval in Civil Case No. 141, entitled Republic v. Heirs of Ferdinand E. Marcos, and that the Republic opposed such move on the principal grounds that (1) said Agreements have not been ratified by or even submitted to the President for approval, pursuant to Item No. 8 of the General Agreement; and (2) the Marcos heirs have failed to comply with their undertakings therein, particularly the collation and submission of an inventory of their assets. The Republic also cited an April 11, 1995 Resolution in Civil Case No. 0165, in which the Sandiganbayan dismissed a similar petition filed by the Marcoses' attorneyin-fact. Furthermore, then President Fidel V. Ramos, in his May 4, 1998 Memorandum 5 to then PCGG Chairman Magtanggol Gunigundo, categorically stated:

PANGANIBAN, J.: Petitioner asks this Court to define the nature and the extent of the people's constitutional right to information on matters of public concern. Does this right include access to the terms of government negotiations prior to their consummation or conclusion? May the government, through the Presidential Commission on Good Government (PCGG), be required to reveal the proposed terms of a compromise agreement with the Marcos heirs as regards their alleged ill-gotten wealth? More specifically, are the "General Agreement" and "Supplemental Agreement," both dated December 28, 1993 and executed between the PCGG and the Marcos heirs, valid and binding?

The Case
These are the main questions raised in this original action seeking (1) to prohibit and "[e]njoin respondents [PCGG and its chairman] from privately entering into, perfecting and/or executing any greement with the heirs of the late President Ferdinand E. Marcos . . . relating to and concerning the properties and assets of Ferdinand Marcos located in the Philippines and/or abroad including the so-called Marcos gold hoard"; and (2) to "[c]ompel respondent[s] to make public all negotiations and agreement, be they ongoing or perfected, and all documents related to or relating to such negotiations and agreement between the PCGG and the Marcos heirs." 1

The Facts

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This is to reiterate my previous position embodied in the Palace Press Release of 6 April 1995 that I have not authorized you to approve the Compromise Agreements of December 28, 1993 or any agreement at all with the Marcoses, and would have disapproved them had they been submitted to me. The Full Powers of Attorney of March 1994 and July 4, 1994, did not authorize you to approve said Agreements, which I reserve for myself as President of the Republic of the Philippines. The assailed principal Agreement 6 reads: GENERAL AGREEMENT KNOW ALL MEN BY THESE PRESENTS: This Agreement entered into this 28th day of December, 1993, by and between The Republic of the Philippines, through the Presidential Commission on Good Government (PCGG), a governmental agency vested with authority defined under Executive Orders Nos. 1, 2 and 14, with offices at the philcomcen Building, Pasig, Metro Manila, represented by its Chairman referred to as FIRST PARTY, and Estate of Ferdinand E. Marcos, represented by Imelda Romualdez Marcos and Ferdinand R. Marcos, Jr., all of legal age, and with address at c/o No. 154 Lopez Rizal St., Mandaluyong, Metro Manila, and Imelda Romualdez Marcos, Imee Marcos Manotoc, Ferdinand E. Marcos, Jr., and Irene Marcos Araneta, hereinafter collectively referred to as the PRIVATE PARTY. W I T N E S S E T H:

WHEREAS, the PRIVATE PARTY has been impelled by their sense of nationalism and love of country and of the entire Filipino people, and their desire to set up a foundation and finance impact projects like installation of power plants in selected rural areas and initiation of other community projects for the empowerment of the people; WHEREAS, the FIRST PARTY has obtained a judgment from the Swiss Federal Tribunal of December 21, 1990, that the $356 million belongs in principle to the Republic of the Philippines provided certain conditionalities are met, but even after 7 years, the FIRST PARTY has not been able to procure a final judgment of conviction against the PRIVATE PARTY; WHEREAS, the FIRST PARTY is desirous of avoiding a long-drawn out litigation which, as proven by the past 7 years, is consuming money, time and effort, and is counterproductive and ties up assets which the FIRST PARTY could otherwise utilize for its Comprehensive Agrarian Reform Program, and other urgent needs; WHEREAS, His Excellency, President Fidel V. Ramos, has adopted a policy of unity and reconciliation in order to bind the nation's wounds and start the process of rebuilding this nation as it goes on to the twenty-first century; WHEREAS, this Agreement settles all claims and counterclaims which the parties may have against one another, whether past, present, or future, matured or inchoate. NOW, THEREFORE, for and in consideration of the mutual covenants set forth herein, the parties agree as follows: 1. The parties will collate all assets presumed to be owned by, or held by other parties for the benefit of, the PRIVATE PARTY for purposes of determining the totality of the assets covered by the settlement. The subject assets shall be classified by the nature thereof, namely: (a) real estate; (b) jewelry; (c) paintings and other works of art; (d) securities; (e) funds on deposit; (f) precious metals, if any, and (g) miscellaneous assets or assets which could not appropriately fall under any of the preceding classification.

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The list shall be based on the full disclosure of the PRIVATE PARTY to insure its accuracy. 2. Based on the inventory, the FIRST PARTY shall determine which shall be ceded to the FIRST PARTY, and which shall be assigned to/retained by the PRIVATE PARTY. The assets of the PRIVATE PARTY shall be net of and exempt from, any form of taxes due the Republic of the Philippines. However, considering the unavailability of all pertinent and relevant documents and information as to balances and ownership, the actual specification of assets to be retained by the PRIVATE PARTY shall be covered by supplemental agreements which shall form part of this Agreement. 3. Foreign assets which the PRIVATE PARTY shall fully disclose but which are held by trustees, nominees, agents or foundations are hereby waived over by the PRIVATE PARTY in favor of the FIRST PARTY. For this purpose, the parties shall cooperate in taking the appropriate action, judicial and/or extrajudicial, to recover the same for the FIRST PARTY. 4. All disclosures of assets made by the PRIVATE PARTY shall not be used as evidence by the FIRST PARTY in any criminal, civil, tax or administrative case, but shall be valid and binding against said PARTY for use by the FIRST PARTY in withdrawing any account and/or recovering any asset. The PRIVATE PARTY withdraws any objection to the withdrawal by and/or release to the FIRST PARTY by the Swiss banks and/or Swiss authorities of the $356 million, its accrued interests, and/or any other account; over which the PRIVATE PARTY waives any right, interest or participation in favor of the FIRST PARTY. However, any withdrawal or release of any account aforementioned by the FIRST PARTY shall be made in the presence of any authorized representative of the PRIVATE PARTY. 5. The trustees, custodians, safekeepers, depositaries, agents, nominees, administrators, lawyers, or any other party acting in similar capacity in behalf of the PRIVATE PARTY are hereby informed through this General Agreement to insure that it is fully implemented and this shall serve as absolute authority from both parties for full disclosure to the FIRST PARTY of said assets and

for the FIRST PARTY to withdraw said account and/or assets and any other assets which the FIRST PARTY on its own or through the help of the PRIVATE PARTY/their trustees, etc., may discover. 6. Any asset which may be discovered in the future as belonging to the PRIVATE PARTY or is being held by another for the benefit of the PRIVATE PARTY and which is not included in the list per No. 1 for whatever reason shall automatically belong to the FIRST PARTY, and the PRIVATE PARTY in accordance with No. 4 above, waives any right thereto. 7. This Agreement shall be binding on and inure to the benefit of, the parties and their respective legal representatives, successors and assigns and shall supersede any other prior agreement. 8. The PARTIES shall submit this and any other implementing Agreements to the President of the Philippines for approval. In the same manner, the PRIVATE PARTY shall provide the FIRST PARTY assistance by way of testimony or deposition on any information it may have that could shed light on the cases being pursued by the FIRST PARTY against other parties. The FIRST PARTY shall desist from instituting new suits already subject of this Agreement against the PRIVATE PARTY and cause the dismissal of all other cases pending in the Sandiganbayan and in other courts. 9. In case of violation by the PRIVATE PARTY of any of the conditions herein contained, the PARTIES shall be restored automatically to the status quo ante the signing of this Agreement. For purposes of this Agreement, the PRIVATE PARTY shall be represented by Atty. Simeon M. Mesina, Jr., as their only Attorney-in-Fact. IN WITNESS WHEREOF, the parties have signed this instrument this 28th day of December, 1993, in Makati, Metro Manila. PRESIDENTIAL COMMISSION ON

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GOOD GOVERNMENT By: [Sgd.] MAGTANGGOL C. GUNIGUNDO Chairman ESTATE OF FERDINAND E. MARCOS, IMELDA R. MARCOS, MA. IMELDA MARCOS-MANOTOC, FERDINAND R. MARCOS, JR., & IRENE MARCOS-ARANETA By: [Sgd.] IMELDA ROMUALDEZ-MARCOS [Sgd.] MA. IMELDA MARCOS-MANOTOC FERDINAND R. MARCOS, JR. 7 [Sgd.] IRENE MARCOS-ARANETA Assisted by: [Sgd.] ATTY. SIMEON M. MESINA, JR. Counsel & Attorney-in-Ft Petitioner also denounces this supplement to the above Agreement: 8 SUPPLEMENTAL AGREEMENT This Agreement entered into this 28th day of December, 1993, by and between The Republic of the Philippines, through the Presidential Commission on Good

Government (PCGG), a governmental agency vested with authority defined under Executive Orders Nos. 1, 2 and 14, with offices at the Philcomcen Building, Pasig, Metro Manila, represented by its Chairman Magtanggol C. Gunigundo, hereinafter referred to as the FIRST PARTY, and Estate of Ferdinand E. Marcos, represented by Imelda Romualdez Marcos and Ferdinand R. Marcos, Jr., all of legal age, and with address at c/o No. 154 Lopez Rizal St., Mandaluyong, Metro Manila, and Imelda Romualdez Marcos, Imee Marcos Manotoc, Ferdinand E. Marcos, Jr., and Irene Marcos Araneta, hereinafter collectively referred to as the PRIVATE PARTY. W I T N E S S E T H: The parties in this case entered into a General Agreement dated Dec. 28, 1993; The PRIVATE PARTY expressly reserve their right to pursue their interest and/or sue over local assets located in the Philippines against parties other than the FIRST PARTY. The parties hereby agree that all expenses related to the recovery and/or withdrawal of all assets including lawyers' fees, agents' fees, nominees' service fees, bank charges, traveling expenses and all other expenses related thereto shall be for the account of the PRIVATE PARTY. In consideration of the foregoing, the parties hereby agree that the PRIVATE PARTY shall be entitled to the equivalent of 25% of the amount that may be eventually withdrawn from said $356 million Swiss deposits.

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IN WITNESS WHEREOF, the parties have signed this instrument this 28th day of December, 1993, in Makati, Metro Manila. PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT By: [Sgd.] MAGTANGGOL C. GUNIGUNDO Chairman ESTATE OF FERDINAND E. MARCOS, IMELDA R. MARCOS, MA. IMELDA MARCOS-MANOTOC, FERDINAND R. MARCOS, JR., & IRENE MARCOSARANETA By: [Sgd.] IMELDA ROMUALDEZ-MARCOS [Sgd.] MA. IMELDA MARCOS-MANOTOC FERDINAND R. MARCOS, JR. 9 [Sgd.] IRENE MARCOSARANETA

Assisted by: [Sgd.] ATTY. SIMEON M. MESINA, JR. Counsel & Attorne y-inFact Acting on a motion of petitioner, the Court issued a Temporary Restraining Order 10 dated March 23, enjoining respondents, their agents and/or representatives from "entering into, or perfecting and/or executing any agreement with the heirs of the late President Ferdinand E. Marcos relating to and concerning their ill-gotten wealth."

Issues
The Oral Argument, held on March 16, 1998, focused on the following issues: (a) Procedural: (1) Whether or not the petitioner has the personality or legal standing to file the instant petition; and (2) Whether or not this Court is the proper court before which this action may be filed. (b) Substantive: (1) Whether or not this Court could require the PCGG to disclose to the public the details of any agreement, perfected or not, with the Marcoses; and (2) Whether or not there exist any legal restraints against a compromise agreement between the Marcoses and the PCGG relative to the Marcoses' ill-gotten wealth. 11 After their oral presentations, the parties filed their respective memoranda. On August 19, 1998, Gloria, Celnan, Scarlet and Teresa, all surnamed Jopson, filed before the Court a Motion for Intervention, attaching thereto

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their Petition in Intervention. They aver that they are "among the 10,000 claimants whose right to claim from the Marcos Family and/or the Marcos Estate is recognized by the decision in In re Estate of Ferdinand Marcos, Human Rights Litigation, Maximo Hilao, et al., Class Plaintiffs No. 92-15526,

U.S. Court of Appeals for the 9th Circuit US App. Lexis 14796, June 16, 1994 and the Decision of the Swiss Supreme Court of December 10, 1997." As

expenditure of public funds is involved and said petitioner has no actual interest in the alleged agreement. Respondents further insist that the instant petition is premature, since there is no showing that petitioner has requested PCGG to disclose any such negotiations and agreements; or that, if he has, the Commission has refused to do so. Indeed, the arguments cited by petitioner constitute the controlling decisional rule as regards his legal standing to institute the instant petition. Access to public documents and records is a public right, and the real parties in interest are the people themselves. 16 In Taada v. Tuvera, 17 the Court asserted that when the issue concerns a public a right and the object of mandamus is to obtain the enforcement of a public duty, the people are regarded as the real parties in interest; and because it is sufficient that petitioner is a citizen and as such is interested in the execution of the laws, he need not show that he has any legal or special interest in the result of the action. 18 In the aforesaid case, the petitioners sought to enforce their right to be informed on matters of public concern, a right then recognized in Section 6, Article IV of the 1973 Constitution, 19 in connection with the rule that laws in order to be valid and enforceable must be published in the Official Gazette or otherwise effectively promulgated. In ruling for the petitioners' legal standing, the Court declared that the right they sought to be enforced "is a public right recognized by no less than the fundamental law of the land."

such, they claim to have personal and direct interest in the subject matter of the instant case, since a distribution or disposition of the Marcos properties may adversely affect their legitimate claims. In a minute Resolution issued on August 24, 1998, the Court granted their motion to intervene and required the respondents to comment thereon. The September 25, 1998 Comment 12 of the solicitor general on said motion merely reiterated his aforecited arguments against the main petition. 13

The Court's Ruling

The petition id imbued with merit.

First Procedural Issue: Petitioner's Standing

Petitioner, on the one hand, explains that as a taxpayer and citizen, he has the legal personality to file the instant petition. He submits that since illgotten wealth "belongs to the Filipino people and [is], in truth hand in fact, part of the public treasury," any compromise in relation to it would constitute a diminution of the public funds, which can be enjoined by a taxpayer whose interest is for a full, if not substantial, recovery of such assets. Besides, petitioner emphasize, the matter of recovering the ill-gotten wealth of the Marcoses is an issue "of transcendental importance the public." He asserts that ordinary taxpayers have a right to initiate and prosecute actions questioning the validity of acts or orders of government agencies or instrumentalities, if the issues raised are "of paramount public interest;" and if they "immeasurably affect the social, economic, and moral well-being of the people." Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest, when the proceeding involves the assertion of a public right, 14 such as in this case. He invokes several decisions 15 of this Court which have set aside the procedural matter of locus standi, when the subject of the case involved public interest. On the other hand, the solicitor general, on behalf of respondents, contends that petitioner has no standing to institute the present action, because no

Legaspi v. Civil Service Commission, 20 while reiterating Taada, further declared that "when a mandamus proceeding involves the assertion of a
public right, the requirement of personal interest is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the general 'public' which possesses the right." 21 Further, in Albano v. Reyes, 22 we said that while expenditure of public funds may not have been involved under the questioned contract for the development, the management and the operation of the Manila International Container Terminal, "public interest [was] definitely involved considering the important role [of the subject contract] . . . in the economic development of the country and the magnitude of the financial consideration involved." We concluded that, as a consequence, the disclosure provision in the Constitution would constitute sufficient authority for upholding the petitioner's standing. Similarly, the instant petition is anchored on the right of the people to information and access to official records, documents and papers a right guaranteed under Section 7, Article III of the 1987 Constitution. Petitioner, a former solicitor general, is a Filipino citizen. Because of the satisfaction of the two basic requisites laid down by decisional law to sustain petitioner's legal

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standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino citizen, we rule that the petition at bar should be allowed. In any event, the question on the standing of Petitioner Chavez is rendered moot by the intervention of the Jopsons, who are among the legitimate claimants to the Marcos wealth. The standing of the Jopsons is not seriously contested by the solicitor general. Indeed, said petitioners-intervenors have a legal interest in the subject matter of the instant case, since a distribution or disposition of the Marcoses' ill-gotten properties may adversely affect the satisfaction of their claims.

disclose to the public the terms contained in said Agreements. However, petitioner is here seeking the public disclose of "all negotiations and agreement, be they ongoing or perfected, and documents related to or relating to such negotiations and agreement between the PCGG and the Marcos heirs." In other words, this petition is not confined to the Agreements that have already been drawn, but likewise to any other ongoing or future undertaking towards any settlement on the alleged Marcos loot. Ineluctably, the core issue boils down to the precise interpretation, in terms of scope, of the twin constitutional provisions on "public transactions." This broad and prospective relief sought by the instant petition brings it out of the realm of Civil Case No. 0141.

Second Procedural Issue: The Court's Jurisdiction

Petitioner asserts that because this petition is an original action for mandamus and one that is not intended to delay any proceeding in the Sandiganbayan, its having been filed before this Court was proper. He invokes Section 5, Article VIII of the Constitution, which confers upon the Supreme Court original jurisdiction over petitions for prohibition and mandamus. The solicitor general, on the other hand, argues that the petition has been erroneously brought before this Court, since there is neither a justiciable controversy nor a violation of petitioner's rights by the PCGG. He alleges that the assailed agreements are already the very lis mota in Sandiganbayan Civil Case No. 0141, which has yet to dispose of the issue; thus, this petition is premature. Furthermore, respondents themselves have opposed the Marcos heirs' motion, filed in the graft court, for the approval of the subject Agreements. Such opposition belies petitioner's claim that the government, through respondents, has concluded a settlement with the Marcoses as regards their alleged ill-gotten assets. In Taada and Legaspi, we upheld therein petitioners' resort to a mandamus proceeding, seeking to enforce a public right as well as to compel performance of a public duty mandated by no less than the fundamental law. 23 Further, Section 5, Article VIII of the Constitution, expressly confers upon the Supreme Court original jurisdiction over petitions for certiorari, prohibition, mandamus, quo warranto and habeas corpus. Respondents argue that petitioner should have properly sought relief before the Sandiganbayan, particularly in Civil Case No. 0141, in which the enforcement of the compromise Agreements is pending resolution. There may seem to be some merit in such argument, if petitioner is merely seeking to enjoin the enforcement of the compromise and/or to compel the PCGG to

First Substantive Issue: Public Disclosure of Terms of Any Agreement, Perfected or Not
In seeking the public disclosure of negotiations and agreements pertaining to a compromise settlement with the Marcoses as regards their alleged illgotten wealth, petitioner invokes the following provisions of the Constitution: Sec. 7 [Article III]. 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. Sec. 28 [Article II]. 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. Respondents' opposite view is that the above constitutional provisions refer to completed and operative official acts, not to those still being considered. As regards the assailed Agreements entered into by the PCGG with the Marcoses, there is yet no right of action that has accrued, because said Agreements have not been approved by the President, and the Marcos heirs have failed to fulfill their express undertaking therein. Thus, the Agreements have not become effective. Respondents add that they are not aware of any

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ongoing negotiation for another compromise with the Marcoses regarding their alleged ill-gotten assets. The "information" and the "transactions" referred to in the subject provisions of the Constitution have as yet no defined scope and extent. There are no specific laws prescribing the exact limitations within which the right may be exercised or the correlative state duty may be obliged. However, the following are some of the recognized restrictions: (1) national security matters and intelligence information, (2) trade secrets and banking transactions, (3) criminal matters, and (4) other confidential information.

public access to, for example, police information regarding rescue operations, the whereabouts of fugitives, or leads on covert criminal activities.

(4) Other Confidential Information

The Ethical Standards Act 31 further prohibits public officials and employees from using or divulging "confidential or classified information officially known to them by reason of their office and not made available to the public." 32 Other acknowledged limitations to information access include diplomatic correspondence, closed door Cabinet meetings and executive sessions of either house of Congress, as well as the internal deliberations of the Supreme Court. 33

Limitations to the Right: (1) National Security Matters

At the very least, this jurisdiction recognizes the common law holding that there is a governmental privilege against public disclosure with respect to state secrets regarding military, diplomatic and other national security matters. 24 But where there is no need to protect such state secrets, the privilege may not be invoked to withhold documents and other information, 25provided that they are examined "in strict confidence" and given "scrupulous protection." Likewise, information on inter-government exchanges prior to the conclusion of treaties and executive agreements may be subject to reasonable safeguards for the sake of national interest. 26

Scope: Matters of Public Concern and Transactions Involving Public Interest

In Valmonte v. Belmonte Jr., 34 the Court emphasized that the information sought must be "matters of public concern," access to which may be limited by law. Similarly, the state policy of full public disclosure extends only to "transactions involving public interest" and may also be "subject to reasonable conditions prescribed by law." As to the meanings of the terms "public interest" and "public concern," the Court, in Legaspi v. Civil Service Commission, 35 elucidated: In determining whether or not a particular information is of public concern there is no rigid test which can be applied. "Public concern" like "public interest" is a term that eludes exact definition. Both terms embrace a broad spectrum of subjects which the public may want to know, either because these directly affect their lives, or simply because such matters naturally arouse the interest of an ordinary citizen. In the final analysis, it is for the courts to determine on a case by case basis whether the matter at issue is of interest or importance, as it relates to or affects the public. Considered a public concern in the above-mentioned case was the "legitimate concern of citizens to ensure that government positions requiring civil service eligibility are occupied only by persons who are eligibles." So was the need to give the general public adequate notification of various laws that regulate

(2) Trade Secrets and Banking Transactions

The drafters of the Constitution also unequivocally affirmed that, aside from national security matters and intelligence information, trade or industrial secrets (pursuant to the Intellectual Property Code 27 and other related laws) as well as banking transactions (pursuant to the Secrecy of Bank Deposits Act 28) are also exempted from compulsory disclosure. 29

(3) Criminal Matters

Also excluded are classified law enforcement matters, such as those relating to the apprehension, the prosecution and the detention of criminals, 30 which courts may nor inquire into prior to such arrest, detention and prosecution. Efforts at effective law enforcement would be seriously jeopardized by free

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and affect the actions and conduct of citizens, as held inTaada. Likewise did the "public nature of the loanable funds of the GSIS and the public office held by the alleged borrowers (members of the defunct Batasang Pambansa)" qualify the information sought in Valmonte as matters of public interest and concern. In Aquino-Sarmiento v. Morato, 36 the Court also held that official acts of public officers done in pursuit if their official functions are public in character; hence, the records pertaining to such official acts and decisions are within the ambit of the constitutional right of access to public records. Under Republic Act No. 6713, public officials and employees are mandated to "provide information on their policies and procedures in clear and understandable language, [and] ensure openness of information, public consultations and hearings whenever appropriate . . .," except when "otherwise provided by law or when required by the public interest." In particular, the law mandates free public access, at reasonable hours, to the annual performance reports of offices and agencies of government and government-owned or controlled corporations; and the statements of assets, liabilities and financial disclosures of all public officials and employees. 37 In general, writings coming into the hands of public officers in connection with their official functions must be accessible to the public, consistent with the policy of transparency of governmental affairs. This principle is aimed at affording the people an opportunity to determine whether those to whom they have entrusted the affairs of the government are honesty, faithfully and competently performing their functions as public servants. 38 Undeniably, the essence of democracy lies in the free flow of thought; 39 but thoughts and ideas must be well-informed so that the public would gain a better perspective of vital issues confronting them and, thus, be able to criticize as well as participate in the affairs of the government in a responsible, reasonable and effective manner. Certainly, 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. 40

partook of the nature of legislative enactments) dealt with the recovery of these alleged ill-gotten properties. Executive Order No. 1, promulgated on February 28, 1986, only two (2) days after the Marcoses fled the country, created the PCGG which was primarily tasked to assist the President in the recovery of vast government resources allegedly amassed by former President Marcos, his immediate family, relatives and close associates both here and abroad. Under Executive Order No. 2, issued twelve (12) days later, all persons and entities who had knowledge or possession of ill-gotten assets and properties were warned and, under pain of penalties prescribed by law, prohibited from concealing, transferring or dissipating them or from otherwise frustrating or obstructing the recovery efforts of the government. On May 7, 1986, another directive (EO No. 14) was issued giving additional powers to the PCGG which, taking into account the overriding considerations of national interest and national survival, required it to achieve expeditiously and effectively its vital task of recovering ill-gotten wealth. With such pronouncements of our government, whose authority emanates from the people, there is no doubt that the recovery of the Marcoses' alleged ill-gotten wealth is a matter of public concern and imbued with public interest. 42 We may also add that "ill-gotten wealth," by its very nature, assumes a public character. Based on the aforementioned Executive Orders, "ill-gotten wealth" refers to assets and properties purportedly acquired, directly or indirectly, by former President Marcos, his immediate family, relatives and close associates through or as a result of their improper or illegal use of government funds or properties; or their having taken undue advantage of their public office; or their use of powers, influences or relationships, "resulting in their unjust enrichment and causing grave damage and prejudice to the Filipino people and the Republic of the Philippines." Clearly, the assets and properties referred to supposedly originated from the government itself. To all intents and purposes, therefore, they belong to the people. As such, upon reconveyance they will be returned to the public treasury, subject only to the satisfaction of positive claims of certain persons as may be adjudged by competent courts. Another declared overriding consideration for the expeditious recovery of ill-gotten wealth is that it may be used for national economic recovery. We believe the foregoing disquisition settles the question of whether petitioner has a right to respondents' disclosure of any agreement that may be arrived at concerning the Marcoses' purported ill-gotten wealth.

The Nature of the Marcoses' Alleged Ill-Gotten Wealth

We now come to the immediate matter under consideration. Upon the departure from the country of the Marcos family and their cronies in February 1986, the new government headed by President Corazon C. Aquino was specifically mandated to "[r]ecover ill-gotten properties amassed by the leaders and supporters of the previous regime and [to] protect the interest of the people through orders of sequestration or freezing of assets or accounts." 41 Thus, President Aquino's very first executive orders (which

Access to Information

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on Negotiating Terms
But does the constitutional provision likewise guarantee access to information regarding ongoing negotiations or proposals prior to the final agreement? This same clarification was sought and clearly addressed by the constitutional commissioners during their deliberations, which we quote hereunder: 43 MR. SUAREZ. And when we say "transactions" which should be distinguished from contracts, agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the consummation of the contract, or does he refer to the contract itself? MR. OPLE. The "transactions" used here, I suppose, is generic and, therefore, it can cover both steps leading to a contract, and already a consummated contract, Mr. Presiding Officer. MR. SUAREZ. This contemplates inclusion of negotiations leading to the consummation of the transaction? MR. OPLE. Yes, subject to reasonable safeguards on the national interest. Considering the intent of the Constitution, we believe that it is incumbent upon the PCGG and its officers, as well as other government representatives, to disclose sufficient public information on any proposed settlement they have decided to take up with the ostensible owners and holders of ill-gotten wealth. Such information, though, must pertain to definite propositions of the government, not necessarily to intra-agency or inter-agency recommendations or communications 44 during the stage when common assertions are still in the process of being formulated or are in the "exploratory" stage. There is a need, of course, to observe the same restrictions on disclosure of information in general, as discussed earlier such as on matters involving national security, diplomatic or foreign relations, intelligence and other classified information.

wrongs done by them, as well as an unwarranted permission to commit graft and corruption. Respondents, for their part, assert that there is no legal restraint on entering into a compromise with the Marcos heirs, provided the agreement does not violate any law.

Prohibited Compromises
In general, the law encourages compromises in civil cases, except with regard to the following matters: (1) the civil status of persons, (2) the validity of a marriage or a legal separation, (3) any ground for legal separation, (4) future support, (5) the jurisdiction of courts, and (6) future legitimate. 45 And like any other contract, the terms and conditions of a compromise must not be contrary to law, morals, good customs, public policy or public order. 46 A compromise is binding and has the force of law between the parties, 47 unless the consent of a party is vitiated such as by mistake, fraud, violence, intimidation or undue influence or when there is forgery, or if the terms of the settlment are so palpably unconscionable. In the latter instances, the agreement may be invalidated by the courts. 48

Effect of Compromise on Civil Actions

One of the consequences of a compromise, and usually its primary object, is to avoid or to end a litigation. 49 In fact, the law urges courts to persuade the parties in a civil case to agree to a fair settlement. 50 As an incentive, a court may mitigate damages to be paid by a losing party who shows a sincere desire to compromise. 51 In Republic & Campos Jr. v. Sandiganbayan, 52 which affirmed the grant by the PCGG of civil and criminal immunity to Jose Y. Campos and the family, the Court held that in the absence an express prohibition, the rule on compromises in civil actions under the Civil Code is applicable to PCGG cases. Such principle is pursuant to the objectives of EO No. 14 particularly the just and expeditious recovery of ill-gotten wealth, so that it may be used to hasten economic recovery. The same principle was upheld in Benedicto v. PCGG compromise agreement with Roberto S. Benedicto.

Second Substantive Issue: Legal Restraints on a Marcos-PCGG Compromise

Petitioner lastly contends that any compromise agreement between the government and the Marcoses will be a virtual condonation of all the alleged

Board of Administrators of Television Stations RPN, BBC and IBC 53 andRepublic v. Benedicto, 54 which ruled in favor of the validity of the

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Immunity from Criminal Prosecution

However, any compromise relating to the civil liability arising from an offense does not automatically terminate the criminal proceeding against or extinguish the criminal liability of the malefactor. 55 While a compromise in civil suits is expressly authorized by law, there is no similar general sanction as regards criminal liability. The authority must be specifically conferred. In the present case, the power to grant criminal immunity was confered on PCGG by Section 5 of EO No. 14, as amended by EO No. 14-A, whci provides: Sec. 5. The President Commission on Good Government is authorized to grant immunity from criminal prosecution to any person who provides information or testifies in any investigation conducted by such Commission to establish the unlawful manner in which any respondent, defendant or accused has acquired or accumulated the property or properties in question in any case where such information or testimony is necessary to ascertain or prove the latter's guilt or his civil liability. The immunity thereby granted shall be continued to protect the witness who repeats such testimony before the Sandiganbayan when required to do so by the latter or by the Commission. The above provision specifies that the PCGG may exercise such authority under these conditions: (1) the person to whom criminal immunity is granted provides information or testifies in an investigation conducted by the Commission; (2) the information or testimony pertains to the unlawful manner in which the respondent, defendant or accused acquired or accumulated ill-gotten property; and (3) such information or testimony is necessary to ascertain or prove guilt or civil liability of such individual. From the wording of the law, it can be easily deducted that the person referred to is a witness in the proceeding, not the principal respondent, defendant or accused. Thus, in the case of Jose Y. Campos, the grant of both civil and criminal immunity to him and his family was "[i]n consideration of the full cooperation of Mr. Jose Y. Campos [with] this Commission, his voluntary surrender of the properties and assets [] disclosed and declared by him to belong to deposed President Ferdinand E. Marcos [] to the Government of the Republic of the Philippines[;] his full, complete and truthful disclosures[;] and his commitment to pay a sum of money as determined by the Philippine Government." 56 Moreover, the grant of criminal immunity to the Camposes and the Benedictos was limited to acts and omissions prior to February 25, 1996. At the time such immunity was granted, no criminal cases have yet been filed against them before the competent court.

Validity of the PCGG-Marcos Compromise Agreements

Going now to the subject General and Supplemental Agreements between the PCGG and the Marcos heirs, a cursory perusal thereof reveals serious legal flaws. First, the Agreements do not conform to the above requirements of EO Nos. 14 and 14-A. We believe that criminal immunity under Section 5 cannot be granted to the Marcoses, who are the principal defendants in the spate of ill-gotten wealth cases now pending before the Sandiganbayan. As stated earlier, the provision is applicable mainly to witnesses who provide information or testify against a respondent, defendant or accused in an illgotten wealth case. While the General Agreement states that the Marcoses "shall provide the [government] assistance by way of testimony or deposition on any information [they] may have that could shed light on the cases being pursued by the [government] against other parties," 57 the clause does not fully comply with the law. Its inclusion in the Agreement may have been only an afterthought, conceived in pro forma compliance with Section 5 of EO No. 14, as amended. There is no indication whatsoever that any of the Marcos heirs has indeed provided vital information against any respondent or defendant as to the manner in which the latter may have unlawfully acquired public property. Second, under Item No. 2 of the General Agreement, the PCGG commits to exempt from all forms of taxes the properties to be retained by the Marcos heirs. This is a clear violation of the Construction. The power to tax and to grant tax exemptions is vested in the Congress and, to a certain extent, in the local legislative bodies. 58 Section 28 (4), Article VI of the Constitution, specifically provides: "No law granting any tax exemption shall be passed without the concurrence of a majority of all the Member of the Congress." The PCGG has absolutely no power to grant tax exemptions, even under the cover of its authority to compromise ill-gotten wealth cases. Even granting that Congress enacts a law exempting the Marcoses form paying taxes on their properties, such law will definitely not pass the test of the equal protection clause under the Bill of Rights. Any special grant of tax exemption in favor only of the Marcos heirs will constitute class legislation. It will also violate the constitutional rule that "taxation shall be uniform and equitable." 59 Neither can the stipulation be construed to fall within the power of the commissioner of internal revenue to compromise taxes. Such authority may be exercised only when (1) there is reasonable doubt as to the validity of the

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claim against the taxpayer, and (2) the taxpayer's financial position demonstrates a clear inability to pay. 60 Definitely, neither requisite is present in the case of the Marcoses, because under the Agreement they are effectively conceding the validity of the claims against their properties, part of which they will be allowed to retain. Nor can the PCGG grant of tax exemption fall within the power of the commissioner to abate or cancel a tax liability. This power can be exercised only when (1) the tax appears to be unjustly or excessively assessed, or (2) the administration and collection costs involved do not justify the collection of the tax due. 61 In this instance, the cancellation of tax liability is done even before the determination of the amount due. In any event, criminal violations of the Tax Code, for which legal actions have been filed in court or in which fraud is involved, cannot be compromised. 62

Constitution. It effectively ensconces the Marcoses beyond the reach of the law. It also sets a dangerous precedent for public accountability. It is a virtual warrant for public officials to amass public funds illegally, since there is an open option to compromise their liability in exchange for only a portion of their ill-gotten wealth.

Fifth, the Agreements do not provide for a definite or determinable period

within which the parties shall fulfill their respective prestations. It may take a lifetime before the Marcoses submit an inventory of their total assets.

Sixth, the Agreements do not state with specificity the standards for
determining which assets shall be forfeited by the government and which shall be retained by the Marcoses. While the Supplemental Agreement provides that the Marcoses shall be entitled to 25 per cent of the $356 million Swiss deposits (less government recovery expenses), such sharing arrangement pertains only to the said deposits. No similar splitting scheme is defined with respect to the other properties. Neither is there, anywhere in the Agreements, a statement of the basis for the 25-75 percent sharing ratio. Public officers entering into an arrangement appearing to be manifestly and grossly disadvantageous to the government, in violation of the Ati-Graft and Corruption Practice Act, 69 invite their indictment for corruption under the said law.

Third, the government binds itself to cause the dismissal of all cases against
the Marcos heirs, pending before the Sandiganbayan and other court. 63 This is a direct encroachment on judicial powers, particularly in regard to criminal jurisdiction. Well-settled is the doctrine that once a case has been filed before a court of competent jurisdiction, the matter of its dismissal or pursuance lies within the full discretion and control of the judge. In a criminal case, the manner in which the prosecution is handled, including the matter of whom to present as witnesses, may lie within the sound discretion of the government prosecution; 64 but the court decides, based on the evidence proffered, in what manner it will dispose of the case. Jurisdiction, once acquired by the trial court, is not lost despite a resolution, even by the justice secretary, to withdraw the information or to dismiss the complaint. 65 The prosecution's motion to withdraw or to dismiss is not the least binding upon the court. On the contrary, decisional rules require the trial court to make its own evaluation of the merit of the case, because granting such motion is equivalent to effecting a disposition of the case itself. 66 Thus, the PCGG, as the government prosecutor of ill-gotten wealth cases, cannot guarantee the dismissal of all such criminal cases against the Marcoses pending in the courts, for said dismissal is not within its sole power and discretion.

Finally, the absence of then President Ramos' approval of the principal

Agreement, an express condition therein, renders the compromise incomplete and unenforceable. Nevertheless, as detailed above, even if such approval were obtained, the Agreements would still not be valid. From the foregoing disquisition, it is crystal clear to the Court that the General and Supplemental Agreements, both dated December 28, 1993, which the PCGG entered into with the Marcos heirs, are violative of the Constitution and the laws aforementioned. WHEREFORE, the petition is GRANTED. The General and Supplemental Agreement dated December 28, 1993, which PCGG and the Marcos heirs entered into are hereby declared NULL AND VOID for being contrary to law and the Constitution. Respondent PCGG, its officers and all government functionaries and officials who are or may be directly ot indirectly involved in the recovery of the alleged ill-gotten wealth of the Marcoses and their associates are DIRECTED to disclose to the public the terms of any proposed compromise settlment, as well as the final agreement, relating to such alleged ill-gotten wealth, in accordance with the discussions embodied in this Decision. No pronouncement as to cost. SO ORDERED.

Fourth, the government also waives all claims and counterclaims, "whether
past, present, or future, matured or inchoate," against the Marcoses. 67 Again, this ill-encompassing stipulation is contrary to law. Under the Civil Code, an action for future fraud may not be waived. 68 The stipulation in the Agreement does not specify the exact scope of future claims against the Marcoses that the government thereby relinquishes. Such vague and broad statement may well be interpreted to include all future illegal acts of any of the Marcos heirs, practically giving them a license to perpetrate fraud against the government without any liability at all. This is a palpable violation of the due process and equal protection guarantees of the

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Republic of the Philippines SUPREME COURT Manila EN BANC

kondisyones ay ipagkakaloob, ipatutupad at isasagawa para sa kapakanan at interes ng Morong at Bataan: (A). Ibalik sa Bataan ang "Virgin Forests" isang bundok na hindi nagagalw at punong-puno ng malalaking punong-kahoy at iba'-ibang halaman. (B) Ihiwalay ang Grande Island sa SSEZ at ibalik ito sa Bataan. (K). Isama ang mga lupain ng Bataan na nakapaloob sa SBMA sa pagkukuenta ng salaping ipinagkakaloob ng pamahalaang national o "Internal Revenue Allotment" (IRA) sa Morong, Hermosa at sa Lalawigan. (D). Payagang magtatag rin ng sariling "special economic zones" ang bawat bayan ng Morong, Hermosa at Dinalupihan. (E). Ibase sa laki ng kanya-kanyang lupa ang pamamahagi ng kikitain ng SBMA. (G). Ibase rin ang alokasyon ng pagbibigay ng trabaho sa laki ng nasabing mga lupa. (H). Pabayaang bukas ang pinto ng SBMA na nasa Morong ng 24 na oras at bukod dito sa magbukas pa ng pinto sa hangganan naman ng Morong at Hermosa upang magkaroon ng pagkakataong umunlad rin ang mga nasabing bayan, pati na rin ng iba pang bayan ng Bataan. (I). Tapusin ang pagkokonkreto ng mga daang Morong-Tala-Orani at MorongTasig-Dinalupihan para sa kabutihan ng mga taga-Bataan at tuloy makatulong sa pangangalaga ng mga kabundukan.

G.R. No. 111230 September 30, 1994 ENRIQUE T. GARCIA, ET AL., petitioners, vs. COMMISSION ON ELECTIONS and SANGGUNIANG BAYAN OF MORONG, BATAAN, respondents.

Alfonzo M. Cruz Law Offices for petitioners.

PUNO, J.: The 1987 Constitution is borne of the conviction that people power can be trusted to check excesses of government. One of the means by which people power can be exercised is thru initiatives where local ordinances and resolutions can be enacted or repealed. An effort to trivialize the effectiveness of people's initiatives ought to be rejected. In its Pambayang Kapasyahan Blg. 10, Serye 1993, 1 the Sangguniang Bayan ng Morong, Bataan agreed to the inclusion of the municipality of Morong as part of the Subic Special Economic Zone in accord with Republic Act No. 7227. On May 24, 1993, petitioners filed a petition 2 with the Sangguniang Bayan of Morong to annul Pambayang Kapasyahan Blg. 10, Serye 1993. The petition states: I. Bawiin, nulipikahin at pawalang-bisa ang Pambayang Kapasyahan Blg. 10, Serye 1993 ng Sangguniang Bayan para sa pag-anib ng Morong sa SSEZ na walang kondisyon. II. Palitan ito ng isang Pambayang Kapasiyahan na aanib lamang ang Morong sa SSEZ kung ang mga sumusunod na

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(J). Magkaroon ng sapat na representasyon sa pamunuan ng SBMA ang Morong, Hermosa at Bataan. The municipality of Morong did not take any action on the petition within thirty (30) days after its submission. Petitioners then resorted to their power of initiative under the Local Government Code of 1991. 3 They started to solicit the required number of signatures 4 to cause the repeal of said resolution. Unknown to the petitioners, however, the Honorable Edilberto M. de Leon, Vice Mayor and Presiding Officer of the Sangguniang Bayan ng Morong, wrote a letter dated June 11, 1993 to the Executive Director of COMELEC requesting the denial of " . . . the petition for a local initiative and/or referendum because the exercise will just promote divisiveness, counter productive and futility." 5 We quote the letter, viz: The Executive Director COMELEC Intramuros, Metro Manila S i r: In view of the petition filed by a group of proponents headed by Gov. Enrique T. Garcia, relative to the conduct of a local initiative and/or referendum for the annulment of Pambayang Kapasyahan Blg. 10, Serye 1993, may we respectfully request to deny the petition referred thereto considering the issues raised by the proponents were favorably acted upon and endorsed to Congress and other government agencies by the Sangguniang Bayan of Morong. For your information and guidance, we are enumerating hereunder the issues raised by the petitioners with the corresponding actions undertaken by the Sangguniang Bayan of Morong, to wit: ISSUES RAISED BY PROPONENTS I. Pawalang-bisa ang Pambayang Kapasyahan Blg. 10, Serye ng taong 1993. II. Palitan ito ng isang Kapasyahang Pag-anib sa SSEZ kung:

a) Ibabalik sa Morong ang pag-aaring Grande Island, kabundukan at Naval Reservation; b) Ibase sa aring Lupa ng LGU ang kikitain at mapapasok na manggagawa nila sa SSEZ; c) Isama ang nasabing lupa sa pagkukuwenta ng "IRA" ng Morong, Hermosa at Dinalupihan; d) Makapagtatag ng sariling "economic zones" ang Morong, Hermosa at Dinalupihan; e) Pabayaan bukas ang pinto ng Morong patungong SSEZ at magbukas ng dalawang (2) pinto pa; (f) Konkretohin ang daang Morong papunta sa Orani at Dinalupihan; g) Pumili ng SBMA Chairman na tagaibang lugar. ACTIONS UNDERTAKEN BY THE SB OF MORONG 1. By virtue of R.A. 7227, otherwise known as the Bases Conversion Development Act of 1992, all actions of LGU's correlating on the above issues are merely recommendatory in nature when such provisions were already embodied in the statute. 2. Corollary to the notion, the Sangguniang Bayan of Morong passed and approved Pambayang Kapasyahan Blg. 18, Serye 1993, requesting Congress of the Philippines to amend certain provisions of R.A. 7227, wherein it reasserted its position embodied in Pambayan Kapasyahan Blg. 08 and Blg. 12, Serye ng taong 1992, (Attached and marked as Annex "A:) which tackled the same issues raised by the petitioners particularly items a), b), c), e), and g).

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3. Item d) is already acted upon by BCDA Chairman Arsenio Bartolome III in its letter to His Excellency President Fidel V. Ramos, dated May 7, 1993 (Attached and marked as Annex "B") with clarifying letter from BCDA Vice-Chairman Rogelio L. Singson regarding lands on Mabayo and Minanga dated June 3, 1993 that only lands inside the perimeter fence are envisioned to be part of SBMA. 4. Item f), President Ramos in his marginal note over the letter request of Morong, Bataan Mayor Bienvenido L. Vicedo, the Sangguniang Bayan and Congressman Payumo, when the Resolution of Concurrence to SBMA was submitted last April 6, 1993, order the priority implementation of completion of Morong-Dinalupihan (Tasik-Road) Project, including the Morong-PoblacionMabayo Road to DPWH. (Attached and marked as Annex "C"). Based on the foregoing facts, the Sangguniang Bayan of Morong had accommodated the clamor of the petitioners in accordance with its limited powers over the issues. However, the Sangguniang Bayan of Morong cannot afford to wait for amendments by Congress of R.A. 7227 that will perhaps drag for several months or years, thereby delaying the development of Morong, Bataan. Henceforth, we respectfully reiterate our request to deny the petition for a local initiative and/or referendum because the exercise will just promote divisiveness, counter productive and futility. Thank you and more power. Very truly yours, (SGD.) EDILBERTO M. DE LEON Mun. Vice Mayor/Presiding Officer In its session of July 6, 1993, the COMELEC en banc resolved to deny the petition for local initiative on the ground that its subject is "merely a resolution (pambayang kapasyahan) and not an ordinance." 6 On July 13, 1993, the COMELEC en banc further resolved to direct Provincial Election Supervisor, Atty. Benjamin N.

Casiano, to hold action on the authentication of signatures being gathered by petitioners. 7 These COMELEC resolutions are sought to be set aside in the petition at bench. The petition makes the following submissions: 5. This is a petition for certiorari and mandamus. 5.01 For certiorari, conformably to Sec. 7, Art. IX of the Constitution, to set aside Comelec Resolution Nos. 93-1676 and 93-1623 (Annexes "E" and "H") insofar as it disallowed the initiation of a local initiative to annul PAMBAYANG KAPASYAHAN BLG. 10, SERYE 1993 including the gathering and authentication of the required number of signatures in support thereof. 5.01.1 As an administrative agency, respondent Comelec is bound to observe due process in the conduct of its proceedings. Here, the subject resolutions, Annexes "E" and "H", were issued ex parte and without affording petitioners and the other proponents of the initiative the opportunity to be heard thereon. More importantly, these resolutions and/or directives were issued with grave abuse of discretion. A Sangguniang Bayan resolution being an act of the aforementioned local legislative assembly is undoubtedly a proper subject of initiative. (Sec. 32, Art. VI, Constitution) 5.02 For mandamus, pursuant to Sec. 3, Rule 65, Rules of Court, to command the respondent Comelec to schedule forthwith the continuation of the signing of the petition, and should the required number of signatures be obtained, set a date for the initiative within forty-five (45) days thereof. 5.02.1 Respondent Comelec's authority in the matter of local initiative is merely ministerial. It is duty-bound to supervise the gathering of signatures in support of the petition and to set the date of the initiative once the required number of signatures are obtained.

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If the required number of signatures is obtained, the Comelec shall then set a date for the initiative during which the proposition shall be submitted to the registered voters in the local government unit concerned for their approval within sixty (60) days from the date of certification by the Comelec, as provided in subsection (g) hereof, in case of provinces and cities, forty-five (45) days in case of municipalities, and thirty (30) days in case of barangays. The initiative shall then be held on the date set, after which the results thereof shall be certified and proclaimed by the Comelec. (Sec. 22, par. (h) R.A. 7160. Respondent COMELEC opposed the petition. Through the Solicitor General, it contends that under the Local Government Code of 1991, a resolution cannot be the subject of a local initiative. The same stance is assumed by the respondent Sangguniang Bayan of Morong. 8 We grant the petition. The case at bench is of transcendental significance because it involves an issue of first impression delineating the extent of the all important original power of the people to legislate. Father Bernas explains that "in republican systems, there are generally two kinds of legislative power, original and derivative. Original legislative power is possessed by the sovereign people. Derivative legislative power is that which has been delegated by the sovereign people to legislative bodies and is subordinate to the original power of the people." 9

Our constitutional odyssey shows that up until 1987, our people have not directly exercised legislative power, both the constituent power to amend or revise the Constitution or the power to enact ordinary laws. Section 1, Article VI of the 1935 Constitution delegated legislative power to Congress, thus "the legislative power shall be vested in a Congress of the Philippines, which shall consist of a Senate and a House of Representatives." Similarly, section 1, Article VIII of the 1973 Constitution, as amended, provided that "the Legislative power shall be vested in a Batasang Pambansa." 10 Implicit in the set up was the trust of the people in Congress to enact laws for their benefit. So total was their trust that the people did not reserve for themselves the same power to make or repeal laws. The omission was to prove unfortunate. In the 70's and until the EDSA revolution, the legislature failed the expectations of the people especially when former President Marcos wielded lawmaking powers under Amendment No. 6 of the 1973 Constitution. Laws which could have bridled the nation's downslide from democracy to authoritarianism to anarchy never saw the light of day. In February 1986, the people took a direct hand in the determination of their destiny. They toppled down the government of former President Marcos in a historic bloodless revolution. The Constitution was rewritten to embody the lessons of their sad experience. One of the lessons is the folly of completely surrendering the power to make laws to the legislature. The result, in the perceptive words of Father Bernas, is that the new Constitution became "less trusting of public officials than the American Constitution." 11 For the first time in 1987, the system of people's initiative was thus installed in our fundamental law. To be sure, it was a late awakening. As early as 1898, the state of South Dakota has adopted initiative and referendum in its constitution 12 and many states have followed suit. 13 In any event, the framers of our 1987 Constitution realized the value of initiative and referendum as an ultimate weapon of the people to negate government malfeasance and misfeasance and they put in place an overarching system. Thus, thru an initiative, the people were given the power to amend the Constitution itself. Sec. 2 of Art. XVII provides: "Amendments to this Constitution may likewise be directly proposed by the people through initiative upon a petition of at least twelve per centum of the total number of registered voters, of which every legislative district must be represented by at least three per centum of the registered voters therein." Likewise, thru an initiative, the people were also endowed with the power to enact or reject any act or law by congress or local legislative body. Sections 1 and 32 of Article VI provide:

Sec. 1. The legislative power shall be vested in the Congress

of the Philippines which shall consist of a Senate and a

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House of Representatives except to the extent reserved to

the people by the provisions on initiative and referendum.

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We reject respondents' narrow and literal reading of the above provision for it will collide with the Constitution and will subvert the intent of the lawmakers in enacting the provisions of the Local Government Code of 1991 on initiative and referendum. The Constitution clearly includes not only ordinances but resolutions as appropriate subjects of a local initiative. Section 32 of Article VI provides in luminous language: "The Congress shall, as early as possible, provide for a system of initiative and referendum, and the exceptions therefrom, whereby the people can directly propose and enact laws or approve or reject any act or law or part thereof passed by the Congress, or local legislative body . . ." An act includes a resolution. Black 20 defines an act as "an expression of will or purpose . . . it may denote something done . . . as a legislature, including not merely physical acts, but also decrees, edicts, laws, judgments, resolves, awards, and determinations . . . ." It is basic that a law should be construed in harmony with and not in violation of the constitution. 21 In line with this postulate, we held in In Re Guarina that "if there is doubt or uncertainty as to the meaning of the legislative, if the words or provisions are obscure, or if the enactment is fairly susceptible of two or more constructions, that interpretation will be adopted which will avoid the effect of unconstitutionality, even though it may be necessary, for this purpose, to disregard the more usual or apparent import of the language used." 22 The constitutional command to include acts (i.e., resolutions) as appropriate subjects of initiative was implemented by Congress when it enacted Republic Act No. 6735 entitled "An Act Providing for a System of Initiative and Referendum and Appropriating Funds Therefor." Thus, its section 3(a) expressly includes resolutions as subjects of initiatives on local legislations, viz: Sec. 3. Definition of Terms For purposes of this Act, the following terms shall mean; (a) "Initiative" is the power of the people to propose amendments to the Constitution or to propose and enact legislations through an election called for the purpose. There are three (3) systems of initiative, namely: a.1. Initiative on the Constitution which refers to a petition proposing amendments to the Constitution.

Sec. 32. The Congress shall, as early as possible, provide for

a system of initiative and referendum, and the exceptions therefrom, whereby the people can directly propose and enact laws or approve or reject any act or law or part thereof passed by the Congress or local legislative body after the registration of a petition therefor signed by at least ten per centum of the total number of registered voters, of which every legislative district must be represented by at least three per centum of the registered voters thereto. The COMELEC was also empowered to enforce and administer all laws and regulations relative to the conduct of an initiative and referendum. 14 Worthwhile noting is the scope of coverage of an initiative or referendum as delineated by section 32 Art. VI of the Constitution, supra any act or law passed by Congress or local legislative body. In due time, Congress respondent to the mandate of the Constitution. It enacted laws to put into operation the constitutionalized concept of initiative and referendum. On August 4, 1989, it approved Republic Act No. 6735 entitled "An Act Providing for a System of Initiative and Referendum and Appropriating Funds Therefor." Liberally borrowed from American laws, 15 R.A. No. 6735, among others, spelled out the requirements 16 for the exercise of the power of initiative and referendum, the conduct of national initiative and referendum; 17 procedure of local initiative and referendum; 18 and their limitations. 19 Then came Republic Act No. 7160, otherwise known as The Local Government Code of 1991. Chapter 2, Title XI, Book I of the Code governed the conduct of local initiative and referendum. In light of this legal backdrop, the essential issue to be resolved in the case at bench is whether Pambayang Kapasyahan Blg. 10, serye 1993 of the Sangguniang Bayan of Morong, Bataan is the proper subject of an initiative. Respondents take the negative stance as they contend that under the Local Government Code of 1991 only an ordinance can be the subject of initiative. They rely on section 120, Chapter 2, Title XI, Book I of the Local Government Code of 1991 which provides: "Local Initiative Defined. Local initiative is the legal process whereby the registered voters of a local government unit may directly propose, enact, or amend any ordinance."

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a.2. Initiative on statutes which refers to a petition proposing to enact a national legislation; and a.3. Initiative on local legislation which refers to a petition proposing to enact a regional, provincial, city, municipal, or barangay law, resolution, or ordinance. (Emphasis ours) Similarly, its section 16 states: "Limitations Upon Local Legislative Bodies Any proposition on ordinance or resolution approved through the system of initiative and referendum as herein provided shall not be repealed, modified or amended, by the local legislative body concerned within six (6) months from the date therefrom . . . ." On January 16, 1991, the COMELEC also promulgated its Resolution No. 2300 entitled "In Re Rules and Regulations Governing the Conduct of Initiative on the Constitution, and Initiative and Referendum, on National and Local Laws." It likewise recognized resolutions as proper subjects of initiatives. Section 5, Article I of its Rules states: "Scope of power of initiative The power of initiative may be exercised to amend the Constitution, or to enact a national legislation, a regional, provincial, city, municipal or barangay law, resolution or ordinance." There can hardly be any doubt that when Congress enacted Republic Act No. 6735 it intend resolutions to be proper subjects of local initiatives. The debates confirm this intent. We quote some of the interpellations when the Conference Committee Report on the disagreeing provisions between Senate Bill No. 17 and House Bill No. 21505 were being considered in the House of Representatives, viz: THE SPEAKER PRO TEMPORE. The Gentleman from Camarines Sur is recognized. MR. ROCO. On the Conference Committee Report on the disagreeing provisions between Senate Bill No. 17 and the consolidated House Bill No. 21505 which refers to the system providing for the initiative ad referendum, fundamentally, Mr. Speaker, we consolidated the Senate and the House versions, so both versions are totally intact in the bill. The Senators ironically provided for local initiative and referendum and the House of Representatives correctly provided for initiative and referendum on the Constitution and on national legislation.

I move that we approve the consolidated bill. MR. ALBANO. Mr. Speaker. THE SPEAKER PRO TEMPORE. What is the pleasure of the Minority Floor Leader? MR. ALBANO. Will the distinguished sponsor answer just a few questions? THE SPEAKER PRO TEMPORE. What does the sponsor say? MR. ROCO. Willingly, Mr. Speaker. THE SPEAKER PRO TEMPORE. The Gentleman will please proceed. MR. ALBANO. I heard the sponsor say that the only difference in the two bills was that in the Senate version there was a provision for local initiative and referendum, whereas the House version has none. MR. ROCO. In fact, the Senate version provided purely for local initiative and referendum, whereas in the House version, we provided purely for national and constitutional legislation. MR. ALBANO. Is it our understanding, therefore, that the two provisions were incorporated.? MR. ROCO. Yes, Mr. Speaker. MR. ALBANO. So that we will now have a complete initiative and referendum both in the constitutional amendment and national legislation. MR. ROCO. That is correct. MR. ALBANO. And provincial as well as municipal resolutions? MR. ROCO. Down to barangay, Mr. Speaker.

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MR. ALBANO. And this initiative and referendum is in consonance with the provision of the Constitution whereby it mandates this Congress to enact the enabling law, so that we shall have a system which can be done every five years. Is it five years in the provision of the Constitution? MR. ROCO. That is correct, Mr. Speaker. For constitutional amendments to the 1987 Constitution, it is every five years. 23 Contrary to the submission of the respondents, the subsequent enactment of the local Government Code of 1991 which also dealt with local initiative did not change the scope of its coverage. More specifically, the Code did not limit the coverage of local initiatives to ordinances alone. Section 120, Chapter 2, Title IX Book I of the Code cited by respondents merely defines the concept of local initiative as the legal process whereby the registered voters of a local government unit may directly propose, enact, or amend any ordinance. It does not, however, deal with the subjects or matters that can be taken up in a local initiative. It is section 124 of the same Code which does. It states: Sec. 124. Limitations on Local Initiatives. (a) The power of local initiative shall not be exercised more than once a year. (b) Initiative shall extend only to subjects or matters which

the competence of the Sanggunian to enact. In California, for example, direct initiatives were proposed to enact a fishing control bill, to regulate the practice of chiropractors, to levy a special tax to secure a new library, to grant a franchise to a railroad company, and to prevent discrimination in the sale of housing and similar bills. Direct initiative on the local lever may, therefore, cover all kinds of measures provided that these are within the power of the local Sanggunians to enact, subject of course to the other requisites enumerated in the Section. 5. Form of Initiative. Regarding the form of the measure, the section speaks only of "ordinance," although the measure may be contained in a resolution. If the registered voters can propose ordinances, why are they not allowed to propose resolutions too? Moreover, the wording of Sec. 125, below, which deals not only with ordinances but with "any proposition" implies the inclusion of resolutions. The discussion hereunder will also show support for the conclusion that resolutions may indeed be the subject of local initiative. We note that respondents do not give any reason why resolutions should not be the subject of a local initiative. In truth, the reason lies in the well known distinction between a resolution and an ordinance i.e., that a resolution is used whenever the legislature wishes to express an opinion which is to have only a temporary effect while an ordinance is intended to permanently direct and control matters applying to persons or things in general. 25 Thus, resolutions are not normally subject to referendum for it may destroy the efficiency necessary to the successful administration of the business affairs of a city. 26 In the case at bench, however, it can not be argued that the subject matter of the resolution of the municipality of Morong merely temporarily affects the people of Morong for it directs a permanent rule of conduct or government. The inclusion of Morong as part of the Subic Special Economic Zone has far reaching implications in the governance of its people. This is apparent from a reading of section 12 of Republic Act No. 7227 entitled "An Act Accelerating the Conversion of Military Reservations Into Other Productive Uses, Creating the Bases Conversion and Development Authority For This Purpose, Providing Funds Therefor and For Other Purposes." to wit: Sec. 12. Subic Special Economic Zone. Subject to the concurrence by resolution of thesangguniang panlungsod of

are within the legal powers of the Sanggunians to enact.

xxx xxx xxx

This provision clearly does not limit the application of local initiatives to ordinances, but to all "subjects or matters which are within the legal powers of the Sanggunians to enact," which undoubtedly includes resolutions. This interpretation is supported by Section 125 of the same Code which provides: "Limitations upon Sanggunians. Any proposition or ordinance approved through the system of initiative and referendum as herein provided shall not be repealed, modified or amended by the sanggunian concerned within six (6) months from the date of the approval thereof . . . ." Certainly, the inclusion of the wordproposition is inconsistent with respondents' thesis that only ordinances can be the subject of local initiatives. The principal author of the Local Government Code of 1991, former Senator Aquilino Pimentel, espouses the same view. In his commentaries on the said law, he wrote, viz: 24 4. Subject Matter Of Initiative. All sorts of measures may be the subject of direct initiative for as long as these are within

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the City of Olongapo and the sangguniang bayan of the Municipalities of Subic, Morong and Hermosa, there is hereby created a Special Economic and Free-port Zone consisting of the City of Olongapo and the Municipality of Subic, Province of Zambales, the lands occupied by the Subic Naval Base and its contiguous extensions as embraced, covered, and defined by the 1947 Military Bases Agreement between the Philippines and the United States of America as amended, and within the territorial jurisdiction of the Municipalities of Morong and Hermosa, Province of Bataan, hereinafter referred to a as the Subic Special Economic Zone whose metes and bounds shall be delineated in a proclamation to be issued by the President of the Philippines. Within thirty (30) days after the approval of this Act, each local government unit shall submit its resolution of concurrence to join the Subic Special Economic Zone to the Office of the President. Thereafter, the President of the Philippines shall issue a proclamation defining the metes and bounds of the zone as provided herein. The abovementioned zone shall be subject to the following policies: (a) Within the framework and subject to the mandate and limitations of the Constitution and the pertinent provisions of the Local Government Code, the Subic Special Economic Zone shall be developed into a self-sustaining, industrial, commercial, financial and investment center to generate employment opportunities in and around the zone and to attract and promote productive foreign investments; (b) The Subic Special Economic Zone shall be operated and managed as a separate customs territory ensuring free flow or movement of goods and capital within, into a exported out of the Subic Special Economic Zone, as well as provide incentives such as tax and duty-free importations of raw material, capital and equipment. However, exportations or removal of goods from the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines: (c) The provision of existing laws, rules and regulations to the contrary notwithstanding, no taxes, local and national,

shall be imposed within the Subic Special Economic Zone. In lieu of paying taxes, three percent (3%) of the of the gross income earned by all businesses and enterprises within the Subic Special Economic Zone shall be remitted to the National Government one percent (1%) each to the local government units affected by the declaration of the zone in proportion to their population area, and other factors. In addition, there is hereby established a development fund of one percent (1%) of the gross income earned by all businesses and enterprises within the Subic Special Economic Zone to be utilized for the development of municipalities outside the City of Olongapo and the Municipality of Subic, and other municipalities contiguous to the base areas. In case of conflict between national and local laws with respect to tax exemption privileges in the Subic Special Economic Zone, the same shall be resolved in favor of the latter; (d) No exchange control policy shall be applied and free markets for foreign exchange, gold, securities and futures shall be allowed and maintained in the Subic Special Economic Zone; (e) The Central Bank, through the Monetary Board, shall supervise and regulate the operations of banks and other financial institutions within the Subic Special Economic Zone; (f) Banking and finance shall be liberalized with the establishment of foreign currency depository units of local commercial banks and offshore banking units of foreign banks with minimum Central Bank regulation; (g) Any investor within the Subic Special Economic Zone whose continuing investment shall not be less than Two hundred fifty thousand dollars ($250,000), his/her spouse and dependent children under twenty-one (21) years of age, shall be granted permanent resident status within the Subic Special Economic Zone. They shall have freedom of ingress and egress to and from the Subic Special Economic Zone without any need of special authorization from the Bureau of Immigration and Deportation. The Subic Bay Metropolitan Authority referred to in Section 13 of this Act

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may also issue working visas renewable every two (2) years to foreign executives and other aliens possessing highlytechnical skills which no Filipino within the Subic Special Economic Zone possesses, as certified by the Department of Labor and Employment. The names of aliens granted permanent residence status and working visas by the Subic Bay Metropolitan Authority shall be reported to the Bureau of Immigration and Deportation within thirty (30) days after issuance thereof. (h) The defense of the zone and the security of its perimeters shall be the responsibility of the National Government in coordination with the Subic Bay Metropolitan Authority. The Subic Bay Metropolitan Authority shall provide and establish its own internal security and fire fighting forces; and (i) Except as herein provided, the local government units comprising the Subic Special Economic Zone shall retain their basic autonomy and identity. The cities shall be governed by their respective charters and the municipalities shall operate and function in accordance with Republic Act No. 7160, otherwise known as the Local Government Code of 1991. In relation thereto, section 14 of the same law provides: Sec. 14. Relationship with the Conversion Authority and the Local Government Units. (a) The provisions of existing laws, rules and regulations to the contrary notwithstanding, the Subic Authority shall exercise administrative powers, rule-making and disbursement of funds over the Subic Special Economic Zone in conformity with the oversight function of the Conversion Authority. (b) In case of conflict between the Subic Authority and the local government units concerned on matters affecting the Subic Special Economic zone other than defense and security, the decision of the Subic Authority shall prevail. Considering the lasting changes that will be wrought in the social, political, and economic existence of the people of Morong by the inclusion of their municipality in the Subic Special Economic Zone, it

is but logical to hear their voice on the matter via an initiative. It is not material that the decision of the municipality of Morong for the inclusion came in the form of a resolution for what matters is its enduring effect on the welfare of the people of Morong. Finally, it cannot be gained that petitioners were denied due process. They were not furnished a copy of the letter-petition of Vice Mayor Edilberto M. de Leon to the respondent COMELEC praying for denial of their petition for a local initiative on Pambayang Kapasyahan Blg. 10, Serye 1993. Worse, respondent COMELEC granted the petition without affording petitioners any fair opportunity to oppose it. This procedural lapse is fatal for at stake is not an ordinary right but the sanctity of the sovereignty of the people, their original power to legislate through the process of initiative. Ours is the duty to listen and the obligation to obey the voice of the people. It could well be the only force that could foil the mushrooming abuses in government. IN VIEW WHEREOF, the petition is GRANTED and COMELEC Resolution 93-1623 dated July 6, 1993 and Resolution 93-1676 dated July 13, 1993 are ANNULLED and SET ASIDE. No costs. SO ORDERED.

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Republic of the Philippines SUPREME COURT Manila EN BANC

The Facts
On March 13, 1992, Congress enacted Republic Act No. 7227 (The Bases Conversion and Development Act of 1992), which among others, provided for the creation of the Subic Economic Zone, thus: Sec. 12. Subic Special Economic Zone. Subject to the

G.R. No. 125416 September 26, 1996 SUBIC BAY METROPOLITAN AUTHORITY, petitioner, vs. COMMISSION ON ELECTIONS, ENRIQUE T. GARCIA and CATALINO A. CALIMBAS, respondents.

concurrence by resolution of the Sangguniang Panlugnsod of the City of Olongapo and the Sangguniang Bayan of the Municipalities of Subic. Morong and Hermosa, there is
hereby created a Special Economic and Free-port Zone consisting of the City of Olongapo and the Municipality of Subic, Province of Zambales, the lands occupied by the Subic Naval Base and its contiguous extensions as embraced, covered and defined by the 1947 Military Bases Agreement between the Philippines and the United States of America as amended, and within the territorial jurisdiction of the Municipalities of Morong and Hermosa, Province of Bataan, hereinafter referred to as the Subic Special Economic Zone whose metes and bounds shall be delineated in a proclamation to be issued by the President of the Philippines. Within thirty (30) days after the approval of this Act, each local government unit shall submit its resolution of concurrence to join the Subic Special Economic Zone to the Office of the President. Thereafter, the President of the Philippines shall issue a proclamation defining the metes and bounds of the zone as provided herein." (Emphasis supplied) RA 7227 likewise created petitioner to implement the declared national policy of converting the Subic military reservation into alternative productive uses. 2 Petitioner was organized with an authorized capital stock of P20 billion which was fully subscribed and fully paid up by the Republic of the Philippines with, among other assets, "(a)ll lands embraced, covered and defined in Section 12 hereof, as well as permanent improvements and fixtures upon proper inventory not otherwise alienated, conveyed, or transferred to another government agency". 3 On November 24, 1992, the American navy turned over the Subic military reservation to the Philippines government. Immediately, petitioner commenced the implementation of its task, particularly the preservation of the sea-ports, airport, buildings, houses and other installations left by the American navy.

PANGANIBAN, J.: The 1987 Constitution is unique in many ways. For one thing, it institutionalized people power in law-making. Learning from the bitter lesson of completely surrending to Congress the sole authority to make, amend or repeal laws, the present Constitution concurrently vested such prerogatives in the electorate by expressly recognizing their residual and sovereign authority to ordain legislation directly through the concepts and processes of initiative and of referendum. In this Decision, this Court distinguishes referendum from initiative and discusses the practical and legal implications of such differences. It also sets down some guidelines in the conduct and implementation of these two novel and vital features of popular democracy, as well as settles some relevant questions on jurisdiction all with the purpose of nurturing, protecting and promoting the people's exercise of direct democracy. In this action for certiorari and prohibition, petitioner seeks to nullify the respondent Commission on Elections' Ruling dated April 17, 1996 and Resolution No. 2848 promulgated on June 27, 1996 1 denying petitioner's plea to stop the holding of a local initiative and referendum on the proposition to recall Pambayang Kapasyahan Blg. 10, Serye 1993, of the Sangguniang Bayan of Morong, Bataan.

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In April 1993, the Sangguniang Bayan of Morong, Bataan passed Pambayang Kapasyahan Bilang 10, Serye 1993, expressing therein its absolute concurrence, as required by said Sec. 12 of RA 7227, to join the Subic Special Economic Zone. On September 5, 1993, the Sangguniang Bayan of Morong submitted Pambayang Kapasyahan Bilang 10, Serye 1993 to the Office of the President. On May 24, 1993, respondents Garcia, Calimbas and their companions filed a petition with the Sangguniang Bayan of Morong to annul Pambayang Kapasyahan Blg. 10, Serye 1993. The petition prayed for the following: I. Bawiin, nulipikahin at pawalang-bisa and Pambayang Kapasyahang Blg. 10, Serye 1993 ng Sangguniang Bayan para sa pag-anib ng Morong sa SSEFZ na walang kundisyon. II. Palitan ito ng isang Pambayang kapasyahan na aanib lamang ang Morong sa SSEFZ kung ang mga sumusunod na kondisyones ay ipagkakaloob, ipatutupad at isasagawa para sa kapakanan at interest ng Morong at Bataan: (A) Ibalik sa Bataan ang "Virgin Forests" isang bundok na hindi nagagalaw at punong-puno ng malalaking punong-kahoy at iba't-ibang halaman. (B) Ihiwalay ang Grande Island sa SSEFZ at ibalik ito sa Bataan. (K) Isama ang mga lupain ng Bataan na nakapaloob sa SBMA sa pagkukuenta ng salaping ipinagkaloob ng pamahalaang national o "Internal Revenue Allotment" (IRA) sa Morong, Hermosa at sa Lalawigan. (D) Payagang magtatag rin ng sariling "special economic zones" and bawat bayan ng Morong, Hermosa at Dinalupihan. (E) Ibase sa laki ng kanya-kanyang lupa ang pamamahagi ng kikitain ng SBMA.

(G) Ibase rin ang alokasyon ng pagbibigay ng trabaho sa laki ng nasabing mga lupa. (H) Pabayaang bukas ang pinto ng SBMA na nasa Morong ng 24 na oras at bukod dito sa magbukas pa ng pinto sa hangganan naman ng Morong at Hermosa upang magkaroon ng pagkakataong umunlad rin ang mga nasabing bayan, pati na rin ng iba pang bayan ng Bataan. (I) Tapusin ang pagkokonkreto ng mga daang Morong-Tala-Orani at MorongTasig-Dinalupihan para sa kabutihan ng mga taga-Bataan at tuloy makatulong sa pangangalaga ng mga kabundukan. (J) Magkakaroon ng sapat na representasyon sa pamunuan ng SBMA ang Morong, Hermosa at Bataan. The Sangguniang Bayan ng Morong acted upon the petition of respondents Garcia, Calimbas, et al. by promulgating Pambayang Kapasyahan Blg. 18, Serye 1993, requesting Congress of the Philippines so amend certain provisions of RA 7227, particularly those concerning the matters cited in items (A), (B), (K), (E), and (G) of private respondent's petition. The Sangguniang Bayan of Morong also informed respondents that items (D) and (H) had already been referred to and favorably acted upon by the government agencies concerned, such as the Bases Conversion Development Authority and the Office of the President. Not satisfied, and within 30 days from submission of their petition, herein respondents resorted to their power initiative under the Local Government Code of 1991, 4 Sec. 122 paragraph (b) of which provides as follows: Sec. 122. Procedure in Local Initiative. xxx xxx xxx (b) If no favorable action thereon is taken by the sanggunian concerned, the proponents, through their duly authorized and registered representatives, may invoke their power of

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initiative, giving notice thereof to the sangguniang concerned. xxx xxx xxx On July 6, 1993, respondent Commission En Banc in Comelec Resolution No. 93-1623 denied the petition for local initiative by herein private respondents on the ground that the subject thereof was merely a resolution (pambayang kapasyahan) and not an ordinance. On July 13, 1993, public respondent ComelecEn Banc (thru Comelec Resolution no. 93-1676) further directed its Provincial Election Supervisor to hold action on the authentication of signatures being solicited by private respondents. On August 15, 1993, private respondents instituted a petition for certiorari and mandamus 5 before this Court against the Commission on Elections and the Sangguniang Bayan of Morong, Bataan, to set aside Comelec Resolution No. 93-1623 insofar as it disallowed the conduct of a local initiative to annul Pambayang Kapasyahan Bilang 10, Serye 1993, and Comelec Resolution No. 931676 insofar as it prevented the Provincial Election Supervisor of Bataan from proceeding with the authentication of the required number of signatures in support of the initiative and the gathering of signatures. On February 1, 1995, pursuant to Sec. 12 of RA 7227, the President of the Philippines issued Proclamation No. 532 defining the metes and bounds of the SSEZ. Said proclamation included in the SSEZ all the lands within the former Subic Naval Base, including Grande Island and that portion of the former naval base within the territorial jurisdiction of the Municipality of Morong. On June 18, 19956, respondent Comelec issued Resolution No. 2845, adopting therein a "Calendar of Activities for local referendum on certain municipal ordinance passed by the Sangguniang Bayan of Morong, Bataan", and which indicated, among others, the scheduled Referendum Day (July 27, 1996, Saturday). On June 27, 1996, the Comelec promulgated the assailed Resolution No. 2848 providing for "the rules and guidelines to govern the conduct of the referendum proposing to annul or repeal Kapasyahan Blg. 10, Serye 1993 of the Sangguniang Bayan of Morong, Bataan". On July 10, 1996, petitioner instituted the present petition for certiorari and prohibition contesting the validity of Resolution No. 2848 and alleging, inter alia, that public respondent "is intent on

proceeding with a local initiative that proposes an amendment of a national law. . . .

The Issues
The petition 6 presents the following "argument": Respondent Commission on Elections committed a grave abuse of discretion amounting to lack of jurisdiction in scheduling a local initiative which seeks the amendment of a national law. In his Comment, private respondent Garcia claims that (1) petitioner has failed to show the existence of an actual case of controversy: (2) . . . petitioner seeks to overturn a decision/judgment which has long become final and executory; (3) . . . public respondent has not abused its discretion and has in fact acted within its jurisdiction; (and) (4) . . . the concurrence of local government units is required for the establishment of the Subic Special Economic Zone." Private respondent Calimbas, now the incumbent Mayor of Morong, in his Reply (should be Comment) joined petitioner's cause because "(a)fter several meetings with petitioner's Chairman and staff and after consultation with legal counsel, respondent Calimbas discovered that the demands in the petition for a local initiative/referendum were not legally feasible." 7 The Solicitor General, as counsel for public respondent, identified two issues, as follows: 1. Whether or not the Comelec can be enjoined from scheduling/conducting the local initiative proposing to annul Pambayang Kapasyahan Blg. 10, Serye 1993 of the Sangguniang Bayan of Morong, Bataan. 2. Whether or not the Comelec committed grave abuse of discretion in denying the request of petitioner SBMA to stop the local initiative. On July 23, 1996, the Court heard oral argument by the parties, after which, it issued the following Resolution: The Court Resolved to: (1) GRANT the Motion to Admit the Attachment Comment filed by counsel for private

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respondent Enrique T. Garcia, dated July 22, 1996 and (2) NOTE the: (a) Reply (should be comment) to the petition for certiorari and prohibition with prayer for temporary restraining order and/or writ of preliminary injunction, filed by counsel for respondent Catalino Calimbas, date July 22, 1996; (b) Separate Comments on the petition, filed by: (b-1) the Solicitor General for respondent Commission on Elections dated July 19, 1996 and (b-2) counsel for private respondent Enrique T. Garcia, dated July 22, 1996, all filed in compliance with the resolution of July 16, 1996 and (c) Manifestation filed by counsel for petitioner, dated July 22, 1996. At the hearing of this case this morning, Atty. Rodolfo O. Reyes appeared and argued for petitioner Subic Bay Metropolitan Authority (SBMA) while Atty. Sixto Brillantes for private respondent Enrique T. Garcia, and Atty. Oscar L. Karaan for respondent Catalino Calimbas. Solicitor General Raul Goco, Assistant Solicitor General Cecilio O. Estoesta and Solicitor Zenaida Hernandez-Perez appeared for respondent Commission on Elections with Solicitor General Goco arguing. Before the Court adjourned, the Court directed the counsel for both parties to INFORM this Court by Friday, July 26, 1996, whether or not Commission on Elections would push through with the initiative/referendum this Saturday, July 27, 1996. Thereafter, the case shall be considered SUBMITTED for resolution. At 2:50 p.m., July 23, 1996, the Court received by facsimile transmission an Order dated also on July 23, 1996 from the respondent Commission on Elections En Banc inter alia "to hold in abeyance the scheduled referendum (initiative) on July 27, 1996 pending resolution of G.R. No. 125416." In view of this Order, the petitioner's application for a temporary restraining order and/or writ of preliminary injunction has become moot and academic and will thus not be passed upon by this Court at this time. Puno, J., no part due to relationship. Bellosillo, J., is on leave.

After careful study of and judicious deliberation on the submissions and arguments of the parties, the Court believes that the issues may be restated as follows: (1) Whether this petition "seeks to overturn a decision/judgment which has long become final and executory"; namely, G.R. No. 111230, Enrique Garcia, et al. vs. Commission on Elections, et al.; (2) Whether the respondent Comelec committed grave abuse of discretion in promulgating and implementing its Resolution No. 2848 which "govern(s) the conduct of the referendum proposing to annul or repeal Pambayang Kapasyahan Blg. 10, Serye 1993 of the Sangguniang Bayan of Morong, Bataan;" and (3) Whether the questioned local initiative covers a subject within the powers of the people of Morong to enact; i.e., whether such initiative "seeks the amendment of a national law."

First Issue: Bar by Final Judgment

Respondent Garcia contends that this Court had already ruled with finality in Enrique T. Garcia, et al. vs.Commission on Elections, et al. 8 on "the very issue raised in (the) petition: whether or not there can be an initiative by the people of Morong, Bataan on the subject proposition the very same proposition, it bears emphasizing, the submission of which to the people of Morong, Bataan is now sought to be enjoined by petitioner . . .". We disagree. The only issue resolved in the earlier Garcia case is whether a municipal resolution as contra-distinguished from an ordinance may be the proper subject of an initiative and/or referendum. We quote from our said Decision: 9 In light of this legal backdrop, the essential issue to be resolved in the case at bench is whether Pambayang Kapasyahan Blg. 10, serye 1993 of the Sangguniang Bayan of Morong, Bataan is the proper subject of an initiative. Respondents take the negative stance as they contend that under the Local Government Code of 1991 only an ordinance can be the subject of initiative. They rely on Section 120, Chapter 2, Title XI, Book I of the Local Government Code of 1991 which provides: "Local Initiative

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Defined. Local initiative is the legal process whereby the registered voters of a local government until may directly propose, enact, or amend any ordinance." We reject respondents' narrow and literal reading of the above provision for it will collide with the Constitution and will subvert the intent of the lawmakers in enacting the provisions of the Local Government of 1991 on initiative and referendum. The Constitution clearly includes not only ordinance but resolutions as appropriate subjects of a local initiative. Section 32 of Article VI provides in luminous language: "The Congress shall, as early as possible, provide for a system of initiative and referendum, and the exceptions therefrom, whereby the people can directly propose and enact laws or approve or reject any act or law or part thereof passed by the Congress, or local legislative body . . .". An act includes a resolution. Black defines an act as "an expression of will or purpose . . . it may denote something done . . . as a legislature, including not merely physical acts, but also decrees, edicts, laws, judgments, resolves, awards, and determinations . . .". It is basic that a law should be construed in harmony with and not in violation of the Constitution. In line with this postulate, we held in In Re Guarina that "if there is doubt or uncertainty as to the meaning of the legislative, if the words or provisions are obscure, or if the enactment is fairly susceptible of two or more constructions, that interpretation will be adopted which will avoid the effect of unconstitutionality, even though it may be necessary, for this purpose, to disregard the more usual or apparent import of the language used." Moreover, we reviewed our rollo in said G.R. No. 111230 and we found that the sole issue presented by the pleadings was the question of "whether or not a Sangguniang Bayan Resolution can be the subject of a valid initiative or referendum". 10 In the present case, petitioner is not contesting the propriety of a municipal resolution as the form by which these two new constitutional prerogatives of the people may be validly exercised. What is at issue here is whether Pambayang Kapasyahan Blg. 10, Serye 1993, as worded, is sufficient in form and substance for submission to the people for their approval; in fine, whether the Comelec acted properly and juridically in promulgating and implementing Resolution No. 2848.

Second Issue: Sufficiency of Comelec Resolution No. 2848

The main issue in this case may be re-stated thus: Did respondent Comelec commit grave abuse of discretion in promulgating and implementing Resolution No. 2848? We answer the question in the affirmative. To begin with, the process started by private respondents was an INITIATIVE but respondent Comelec made preparations for a REFERENDUM only. In fact, in the body of the Resolution 11 as reproduced in the footnote below, the word "referendum" is repeated at least 27 times, but "initiative" is not mentioned at all. The Comelec labeled the exercise as a "Referendum"; the counting of votes was entrusted to a "Referendum Committee"; the documents were called "referendum returns"; the canvassers, "Referendum Board of Canvassers" and the ballots themselves bore the description "referendum". To repeat, not once was the word "initiative" used in said body of Resolution No. 2848. And yet, this exercise is unquestionably an INITIATIVE. There are statutory and conceptual demarcations between a referendum and an initiative. In enacting the "Initiative and Referendum Act, 12 Congress differentiated one term from the other, thus: (a) "Initiative" is the power of the people to propose amendments to the Constitution or to propose and enact legislations through an election called for the purpose. There are three (3) systems of initiative, namely: a.1. Initiative on the Constitution which refers to a petition proposing amendments to the Constitution; a.2. Initiative on statutes which refers to a petition proposing to enact a national legislation; and

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a.3. Initiative on local legislation which refers to a petition proposing to enact a regional, provincial, city, municipal, or barangay law, resolution or ordinance. (b) "Indirect initiative" is exercise of initiative by the people through a proposition sent to Congress or the local legislative body for action. (c) "Referendum" is the power of the electorate to approve or reject a legislation through an election called for the purpose. It may be of two classes, namely: c.1. Referendum on statutes which refers to a petition to approve or reject an act or law, or part thereof, passed by Congress; and c.2 Referendum on local law which refers to a petition to approve or reject a law, resolution or ordinance enacted by regional assemblies and local legislative bodies. Along these statutory definitions, Justice Isagani A. Cruz 13 defines initiative as the "power of the people to propose bills and laws, and to enact or reject them at the polls independent of the legislative assembly." On the other hand, he explains that referendum "is the right reserved to the people to adopt or reject any act or measure which has been passed by a legislative body and which in most cases would without action on the part of electors become a law." The foregoing definitions, which are based on Black's 14 and other leading American authorities, are echoed in the Local Government Code (RA 7160) substantially as follows: Sec. 120. Local Initiative Defined. Local initiative is the legal process whereby the registered voters of local

government unit may directly propose, enact, or amend any ordinance. Sec. 126. Local Referendum Defined. Local referendum is the legal process whereby the registered voters of the local government units may approve, amend or reject any ordinance enacted by the sanggunian. The local referendum shall be held under the control and direction of the Comelec within sixty (60) days in case of provinces and cities, forty-five (45) days in case of municipalities and thirty (30) days in case of baranggays. The Comelec shall certify and proclaim the results of the said referendum. Prescinding from these definitions, we gather that initiative is resorted to (or initiated) by the people directly either because the law-making body fails or refuses to enact the law, ordinance, resolution or act that they desire or because they want to amend or modify one already existing. Under Sec. 13 of R.A. 6735, the local legislative body is given the opportunity to enact the proposal. If it refuses/neglects to do so within thirty (30) days from its presentation, the proponents through their duly-authorized and registered representatives may invoke their power of initiative, giving notice thereof to the local legislative body concerned. Should the proponents be able to collect the number of signed conformities within the period granted by said statute, the Commission on Elections "shall then set a date for the initiative (not referendum) at which the proposition shall be submitted to the registered voters in the local government unit concerned . . .". On the other hand, in a local referendum, the law-making body submits to the registered voters of its territorial jurisdiction, for approval or rejection, any ordinance or resolution which is duly enacted or approved by such law-making authority. Said referendum shall be conducted also under the control and direction of the Commission on Elections. 15 In other words, while initiative is entirely the work of the electorate, referendum is begun and consented to by the law-making body. Initiative is a process of law-making by the people themselves without the participation and against the wishes of their elected representatives, while referendum consists merely of the electorate approving or rejecting what has been drawn up or enacted by a

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legislative body. Hence, the process and the voting in an initiative are understandably more complex than in a referendum where expectedly the voters will simply write either "Yes" of "No" in the ballot. [Note: While the above quoted laws variously refer to initiative and referendum as "powers" or "legal processes", these can be also be "rights", as Justice Cruz terms them, or "concepts", or "the proposal" itself (in the case of initiative) being referred to in this Decision.] From the above differentiation, it follows that there is need for the Comelec to supervise an initiative more closely, its authority thereon extending not only to the counting and canvassing of votes but also to seeing to it that the matter or act submitted to the people is in the proper form and language so it may be easily understood and voted upon by the electorate. This is especially true where the proposed legislation is lengthy and complicated, and should thus be broken down into several autonomous parts, each such part to be voted upon separately. Care must also be exercised that "(n)o petition embracing more than one subject shall be submitted to the electorate," 16 although "two or more propositions may be submitted in an initiative". 17 It should be noted that under Sec. 13 (c) of RA 6735, the "Secretary of Local Government or his designated representative shall extend assistance in the formulation of the proposition." In initiative and referendum, the Comelec exercises administration and supervision of the process itself, akin to its powers over the conduct of elections. These law-making powers belong to the people, hence the respondent Commission cannot control or change the substance or the content of legislation. In the exercise of its authority, it may (in fact it should have done so already) issue relevant and adequate guidelines and rules for the orderly exercise of these "people-power" features of our Constitution.

Elsewise stated, a local initiative may enact only such ordinances or resolutions as the municipal council itself could, if it decided to so enact. 19 After the Sangguniang Bayan of Morong and the other municipalities concerned (Olongapo, Subic and Hermosa) gave their resolutions of concurrence, and by reason of which the SSEZ had been created, whose metes and bounds had already been delineated by Proclamation No. 532 issued on February 1, 1995 in accordance with Section 12 of R.A. No. 7227, the power to withdraw such concurrence and/or to substitute therefor a conditional concurrence is no longer within the authority and competence of the Municipal Council of Morong to legislate. Furthermore, petitioner adds, the specific conditionalities included in the questioned municipal resolution are beyond the powers of the Council to impose. Hence, such withdrawal can no longer be enacted or conditionalities imposed by initiative. In other words, petitioner insists, the creation of SSEZ is now a faith accompli for the benefit of the entire nation. Thus, Morong cannot unilaterally withdraw its concurrence or impose new conditions for such concurrence as this would effectively render nugatory the creation by (national) law of the SSEZ and would deprive the entire nation of the benefits to be derived therefrom. Once created. SSEZ has ceased to be a local concern. It has become a national project. On the other hand, private respondent Garcia counters that such argument is premature and conjectural because at this point, the resolution is just a proposal. If the people should reject it during the referendum, then there is nothing to declare as illegal. Deliberating on this issue, the Court agrees with private respondent Garcia that indeed, the municipal resolution is still in the proposal stage. It is not yet an approved law. Should the people reject it, then there would be nothing to contest and to adjudicate. It is only when the people have voted for it and it has become an approved ordinance or resolution that rights and obligations can be enforced or implemented thereunder. At this point, it is merely a proposal and the writ or prohibition cannot issue upon a mere conjecture or possibility. Constitutionally speaking, courts may decide only actual controversies, not hypothetical questions or cases. 20 We also note that the Initiative and Referendum Act itself provides 21 that "(n)othing in this Act shall prevent or preclude the proper courts from declaring null and void any proposition approved pursuant to this Act . . . ." So too, the Supreme Court is basically a review court. 22 It passes upon errors of law (and sometimes of fact, as in the case of

Third Issue: Withdrawal of Adherence and Imposition of Conditionalities Ultra Vires?

Petitioner maintains that the proposition sought to be submitted in the plebiscite, namely, Pambayang Kapasyahan Blg. 10, Serye 1993, is ultra vires or beyond the powers of the Sangguniang Bayan to enact,18 stressing that under Sec. 124 (b) of RA 7160 (the Local Government Code), "local initiative shall cover only such subjects or matters as are within the legal powers of the sangguniang to enact."

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mandatory appeals of capital offenses) of lower courts as well as determines whether there had been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any "branch or instrumentality" of government. In the present case, it is quite clear that the Court has authority to review Comelec Resolution No. 2848 to determine the commission of grave abuse of discretion. However, it does not have the same authority in regard to the proposed initiative since it has not been promulgated or approved, or passed upon by any "branch or instrumentality" or lower court, for that matter. The Commission on Elections itself has made no reviewable pronouncements about the issues brought by the pleadings. The Comelec simply included verbatim the proposal in its questioned Resolution No. 2848. Hence, there is really no decision or action made by a branch, instrumentality or court which this Court could take cognizance of and acquire jurisdiction over, in the exercise of its review powers. Having said that, we are in no wise suggesting that the Commelec itself has no power to pass uponproposed resolutions in an initiative. Quite the contrary, we are ruling that these matters are in fact within the initiatory jurisdiction of the Commission to which then the herein basic questions ought to have been addressed, and by which the same should have been decided in the first instance. In other words, while regular courts may take jurisdiction over "approved propositions" per said Sec. 18 of R.A. 6735, the Comelec in the exercise of its quasi-judicial and administrative powers may adjudicate and pass upon such proposals insofar as their form and language are concerned, as discussed earlier; and it may be added, even as to content, where the proposals or parts thereof are patently and clearly outside the "capacity of the local legislative body to enact." 23 Accordingly, the question of whether the subject of this initiative is within the capacity of the Municipal Council of Morong to enact may be ruled upon by the Comelec upon remand and after hearing the parties thereon. While on the subject of capacity of the local lawmaking body, it would be fruitful for the parties and the Comelec to plead and adjudicate, respectively, the question of whether Grande Island and the "virgin forest" mentioned in the proposed initiative belong to the national government and thus cannot be segregated from the Zone and "returned to Bataan" by the simple expedient of passing a municipal resolution. We note that Sec. 13 (e) of R.A. 7227 speaks of the full subscription and payment of the P20 billion authorized capital stock of the Subic Authority by the Republic, with, aside from cash and other assets, the ". . . lands embraced, covered and defined in Section 12 hereof, . . ." which includes said island and forests. The

ownership of said lands is question of fact that may be taken up in the proper forum the Commission on Elections. Another question which the parties may wish to submit to the Comelec upon remand of the initiative is whether the proposal, assuming it is within the capacity of the Municipal Council to enact, may be divided into several parts for purposes of voting. Item "I" is a proposal to recall, nullify and render without effect (bawiin, nulipikahin at pawalangbisa) Municipal Resolution No. 10, Series of 1993. On the other hand, Item "II" proposes to change or replace (palitan) said resolution with another municipal resolution of concurrenceprovided certain conditions enumerated thereunder would be granted, obeyed and implemented (ipagkakaloob, ipatutupad at isasagawa) for the benefit and interest of Morong and Bataan. A voter may favor Item I i.e., he may want a total dismemberment of Morong from the Authority but may not agree with any of the conditions set forth in Item II. Should the proposal then be divided and be voted upon separately and independently? All told, we shall not pass upon the third issue of ultra vires on the ground of prematurity.

Epilogue
In sum, we hold that (i) our decision in the earlier Garcia case is not a bar to the present controversy as the issue raised and decided therein is different from the questions involved here; (iii) the respondent Commission should be given an opportunity to review and correct its errors in promulgating its Resolution No. 2848 and in preparing if necessary for the plebiscite; and (iii) that the said Commission has administrative and initiatory quasi-judicial jurisdiction to pass upon the question of whether the proposal is sufficient in form and language and whether such proposal or part or parts thereof are clearly and patently outside the powers of the municipal council of Morong to enact, and therefore violative of law. In deciding this case, the Court realizes that initiative and referendum, as concepts and processes, are new in our country. We are remanding the matter to the Comelec so that proper corrective measures, as above discussed, may be undertaken, with a view to helping fulfill our people's aspirations for the actualization of effective direct sovereignty. Indeed we recognize that "(p)rovisions for initiative and referendum are liberally construed to effectuate their purposes, to facilitate and not to hamper the exercise by the

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voters of the rights granted thereby." 24 In his authoritative treatise on the Constitution, Fr. Joaquin G. Bernas, S. J. treasures these "instruments which can be used should the legislature show itself indifferent to the needs of the people." 25 Impelled by a sense or urgency, Congress enacted Republic Act No. 6735 to give life and form to the constitutional mandate. Congress also interphased initiative and referendum into the workings of local governments by including a chapter on this subject in the Local Government Code of 1991. 26 And the Commission on Elections can do no less by seasonably and judiciously promulgating guidelines and rules, for both national and local use, in implementation of these laws. For its part, this Court early on expressly recognized the revolutionary import of reserving people power in the process of law-making. 27 Like elections, initiative and referendum are powerful and valuable modes of expressing popular sovereignty. And this Court as a matter of policy and doctrine will exert every effort to nurture, protect and promote their legitimate exercise. For it is but sound public policy to enable the electorate to express their free and untrammeled will, not only in the election of their anointed lawmakers and executives, but also in the formulation of the very rules and laws by which our society shall be governed and managed. WHEREFORE the petition is GRANTED. Resolution No. 2848 is ANNULLED and SET ASIDE. The initiative on Pambayang Kapasyahan Blg. 10, Serye 1993 is REMANDED to the Commission on Elections for further proceeding consistent with the foregoing discussion. No costs. IT IS SO ORDERED.

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Republic of the Philippines SUPREME COURT Manila EN BANC

On 6 December 1996, private respondent Atty. Jesus S. Delfin filed with public respondent Commission on Elections (hereafter, COMELEC) a "Petition to Amend the Constitution, to Lift Term Limits of Elective Officials, by People's Initiative" (hereafter, Delfin Petition) 5 wherein Delfin asked the COMELEC for an order 1. Fixing the time and dates for signature gathering all over the country;

G.R. No. 127325 March 19, 1997 MIRIAM DEFENSOR SANTIAGO, ALEXANDER PADILLA, and MARIA ISABEL ONGPIN, petitioners, vs. COMMISSION ON ELECTIONS, JESUS DELFIN, ALBERTO PEDROSA & CARMEN PEDROSA, in their capacities as founding members of the People's Initiative for Reforms, Modernization and Action (PIRMA), respondents. SENATOR RAUL S. ROCO, DEMOKRASYA-IPAGTANGGOL ANG KONSTITUSYON (DIK), MOVEMENT OF ATTORNEYS FOR BROTHERHOOD INTEGRITY AND NATIONALISM, INC. (MABINI), INTEGRATED BAR OF THE PHILIPPINES (IBP), and LABAN NG DEMOKRATIKONG PILIPINO (LABAN), petitioners-intervenors.

2. Causing the necessary publications of said Order and the attached "Petition for Initiative on the 1987 Constitution, in newspapers of general and local circulation; 3. Instructing Municipal Election Registrars in all Regions of the Philippines, to assist Petitioners and volunteers, in establishing signing stations at the time and on the dates designated for the purpose. Delfin alleged in his petition that he is a founding member of the Movement for People's Initiative, 6 a group of citizens desirous to avail of the system intended to institutionalize people power; that he and the members of the Movement and other volunteers intend to exercise the power to directly propose amendments to the Constitution granted under Section 2, Article XVII of the Constitution; that the exercise of that power shall be conducted in proceedings under the control and supervision of the COMELEC; that, as required in COMELEC Resolution No. 2300, signature stations shall be established all over the country, with the assistance of municipal election registrars, who shall verify the signatures affixed by individual signatories; that before the Movement and other volunteers can gather signatures, it is necessary that the time and dates to be designated for the purpose be first fixed in an order to be issued by the COMELEC; and that to adequately inform the people of the electoral process involved, it is likewise necessary that the said order, as well as the Petition on which the signatures shall be affixed, be published in newspapers of general and local circulation, under the control and supervision of the COMELEC. The Delfin Petition further alleged that the provisions sought to be amended are Sections 4 and 7 of Article VI, 7Section 4 of Article VII, 8 and Section 8 of Article X 9 of the Constitution. Attached to the petition is a copy of a "Petition for Initiative on the 1987 Constitution" 10 embodying the proposed amendments which consist in the deletion from the aforecited sections of the provisions concerning term limits, and with the following proposition: DO YOU APPROVE OF LIFTING THE TERM LIMITS OF ALL ELECTIVE GOVERNMENT OFFICIALS,

DAVIDE, JR., J.: The heart of this controversy brought to us by way of a petition for prohibition under Rule 65 of the Rules of Court is the right of the people to directly propose amendments to the Constitution through the system of initiative under Section 2 of Article XVII of the 1987 Constitution. Undoubtedly, this demands special attention, as this system of initiative was unknown to the people of this country, except perhaps to a few scholars, before the drafting of the 1987 Constitution. The 1986 Constitutional Commission itself, through the original proponent 1 and the main sponsor 2 of the proposed Article on Amendments or Revision of the Constitution, characterized this system as "innovative". 3 Indeed it is, for both under the 1935 and 1973 Constitutions, only two methods of proposing amendments to, or revision of, the Constitution were recognized, viz., (1) by Congress upon a vote of three-fourths of all its members and (2) by a constitutional convention. 4 For this and the other reasons hereafter discussed, we resolved to give due course to this petition.

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AMENDING FOR THE PURPOSE SECTIONS 4 AND 7 OF ARTICLE VI, SECTION 4 OF ARTICLE VII, AND SECTION 8 OF ARTICLE X OF THE 1987 PHILIPPINE CONSTITUTION? According to Delfin, the said Petition for Initiative will first be submitted to the people, and after it is signed by at least twelve per cent of the total number of registered voters in the country it will be formally filed with the COMELEC. Upon the filing of the Delfin Petition, which was forthwith given the number UND 96-037 (INITIATIVE), the COMELEC, through its Chairman, issued an Order 11 (a) directing Delfin "to cause the publication of the petition, together with the attached Petition for Initiative on the 1987 Constitution (including the proposal, proposed constitutional amendment, and the signature form), and the notice of hearing in three (3) daily newspapers of general circulation at his own expense" not later than 9 December 1996; and (b) setting the case for hearing on 12 December 1996 at 10:00 a.m. At the hearing of the Delfin Petition on 12 December 1996, the following appeared: Delfin and Atty. Pete Q. Quadra; representatives of the People's Initiative for Reforms, Modernization and Action (PIRMA); intervenoroppositor Senator Raul S. Roco, together with his two other lawyers, and representatives of, or counsel for, the Integrated Bar of the Philippines (IBP), Demokrasya-Ipagtanggol ang Konstitusyon (DIK), Public Interest Law Center, and Laban ng Demokratikong Pilipino (LABAN). 12 Senator Roco, on that same day, filed a Motion to Dismiss the Delfin Petition on the ground that it is not the initiatory petition properly cognizable by the COMELEC. After hearing their arguments, the COMELEC directed Delfin and the oppositors to file their "memoranda and/or oppositions/memoranda" within five days. 13 On 18 December 1996, the petitioners herein Senator Miriam Defensor Santiago, Alexander Padilla, and Maria Isabel Ongpin filed this special civil action for prohibition raising the following arguments: (1) The constitutional provision on people's initiative to amend the Constitution can only be implemented by law to be passed by Congress. No such law has been passed; in fact, Senate Bill No. 1290 entitled An Act Prescribing and which petitioner Senator Santiago filed on 24 November

1995, is still pending before the Senate Committee on Constitutional Amendments. (2) It is true that R.A. No. 6735 provides for three systems of initiative, namely, initiative on the Constitution, on statutes, and on local legislation. However, it failed to provide any subtitle on initiative on the Constitution, unlike in the other modes of initiative, which are specifically provided for in Subtitle II and Subtitle III. This deliberate omission indicates that the matter of people's initiative to amend the Constitution was left to some future law. Former Senator Arturo Tolentino stressed this deficiency in the law in his privilege speech delivered before the Senate in 1994: "There is not a single word in that law which can be considered as implementing [the provision on constitutional initiative]. Such implementing provisions have been obviously left to a separate law. (3) Republic Act No. 6735 provides for the effectivity of the law after publication in print media. This indicates that the Act covers only laws and not constitutional amendments because the latter take effect only upon ratification and not after publication. (4) COMELEC Resolution No. 2300, adopted on 16 January 1991 to govern "the conduct of initiative on the Constitution and initiative and referendum on national and local laws, is ultra vires insofar asinitiative on amendments to the Constitution is concerned, since the COMELEC has no power to provide rules and regulations for the exercise of the right of initiative to amend the Constitution. Only Congress is authorized by the Constitution to pass the implementing law. (5) The people's initiative is limited to amendments to the Constitution, not to revision thereof. Extending or lifting of term limits constitutes a revision and is, therefore, outside the power of the people's initiative. (6) Finally, Congress has not yet appropriated funds for people's initiative; neither the COMELEC nor any other government department, agency, or office has realigned funds for the purpose.

Regulating Constitution Amendments by People's Initiative,

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To justify their recourse to us via the special civil action for prohibition, the petitioners allege that in the event the COMELEC grants the Delfin Petition, the people's initiative spearheaded by PIRMA would entail expenses to the national treasury for general re-registration of voters amounting to at least P180 million, not to mention the millions of additional pesos in expenses which would be incurred in the conduct of the initiative itself. Hence, the transcendental importance to the public and the nation of the issues raised demands that this petition for prohibition be settled promptly and definitely, brushing aside technicalities of procedure and calling for the admission of a taxpayer's and legislator's suit. 14 Besides, there is no other plain, speedy, and adequate remedy in the ordinary course of law. On 19 December 1996, this Court (a) required the respondents to comment on the petition within a non-extendible period of ten days from notice; and (b) issued a temporary restraining order, effective immediately and continuing until further orders, enjoining public respondent COMELEC from proceeding with the Delfin Petition, and private respondents Alberto and Carmen Pedrosa from conducting a signature drive for people's initiative to amend the Constitution. On 2 January 1997, private respondents, through Atty Quadra, filed their Comment 15 on the petition. They argue therein that: 1. IT IS NOT TRUE THAT "IT WOULD ENTAIL EXPENSES TO THE NATIONAL TREASURY FOR GENERAL REGISTRATION OF VOTERS AMOUNTING TO AT LEAST PESOS: ONE HUNDRED EIGHTY MILLION (P180,000,000.00)" IF THE "COMELEC GRANTS THE PETITION FILED BY RESPONDENT DELFIN BEFORE THE COMELEC. 2. NOT A SINGLE CENTAVO WOULD BE SPENT BY THE NATIONAL GOVERNMENT IF THE COMELEC GRANTS THE PETITION OF RESPONDENT DELFIN. ALL EXPENSES IN THE SIGNATURE GATHERING ARE ALL FOR THE ACCOUNT OF RESPONDENT DELFIN AND HIS VOLUNTEERS PER THEIR PROGRAM OF ACTIVITIES AND EXPENDITURES SUBMITTED TO THE COMELEC. THE ESTIMATED COST OF THE DAILY PER DIEM OF THE SUPERVISING SCHOOL TEACHERS IN THE SIGNATURE GATHERING TO BE DEPOSITED and TO BE PAID BY DELFIN AND HIS VOLUNTEERS IS P2,571,200.00;

3. THE PENDING PETITION BEFORE THE COMELEC IS ONLY ON THE SIGNATURE GATHERING WHICH BY LAW COMELEC IS DUTY BOUND "TO SUPERVISE CLOSELY" PURSUANT TO ITS "INITIATORY JURISDICTION" UPHELD BY THE HONORABLE COURT IN ITS RECENT SEPTEMBER 26, 1996 DECISION IN THE CASE OF SUBIC BAY METROPOLITAN AUTHORITY VS. COMELEC, ET AL. G.R. NO. 125416; 4. REP. ACT NO. 6735 APPROVED ON AUGUST 4, 1989 IS THE ENABLING LAW IMPLEMENTING THE POWER OF PEOPLE INITIATIVE TO PROPOSE AMENDMENTS TO THE CONSTITUTION. SENATOR DEFENSORSANTIAGO'S SENATE BILL NO. 1290 IS A DUPLICATION OF WHAT ARE ALREADY PROVIDED FOR IN REP. ACT NO. 6735; 5. COMELEC RESOLUTION NO. 2300 PROMULGATED ON JANUARY 16, 1991 PURSUANT TO REP. ACT 6735 WAS UPHELD BY THE HONORABLE COURT IN THE RECENT SEPTEMBER 26, 1996 DECISION IN THE CASE OF SUBIC BAY METROPOLITAN AUTHORITY VS. COMELEC, ET AL. G.R. NO. 125416 WHERE THE HONORABLE COURT SAID: "THE COMMISSION ON ELECTIONS CAN DO NO LESS BY SEASONABLY AND JUDICIOUSLY PROMULGATING GUIDELINES AND RULES FOR BOTH NATIONAL AND LOCAL USE, IN IMPLEMENTING OF THESE LAWS." 6. EVEN SENATOR DEFENSOR-SANTIAGO'S SENATE BILL NO. 1290 CONTAINS A PROVISION DELEGATING TO THE COMELEC THE POWER TO "PROMULGATE SUCH RULES AND REGULATIONS AS MAY BE NECESSARY TO CARRY OUT THE PURPOSES OF THIS ACT." (SEC. 12, S.B. NO. 1290, ENCLOSED AS ANNEX E, PETITION); 7. THE LIFTING OF THE LIMITATION ON THE TERM OF OFFICE OF ELECTIVE OFFICIALS PROVIDED UNDER THE 1987 CONSTITUTION IS NOT A "REVISION" OF THE CONSTITUTION. IT IS ONLY AN AMENDMENT. "AMENDMENT ENVISAGES AN ALTERATION OF ONE OR A FEW SPECIFIC PROVISIONS OF THE CONSTITUTION. REVISION CONTEMPLATES A RE-EXAMINATION OF THE

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ENTIRE DOCUMENT TO DETERMINE HOW AND TO WHAT EXTENT IT SHOULD BE ALTERED." (PP. 412413, 2ND. ED. 1992, 1097 PHIL. CONSTITUTION, BY JOAQUIN G. BERNAS, S.J.). Also on 2 January 1997, private respondent Delfin filed in his own behalf a Comment 16 which starts off with an assertion that the instant petition is a "knee-jerk reaction to a draft 'Petition for Initiative on the 1987 Constitution'. . . which is not formally filed yet." What he filed on 6 December 1996 was an "Initiatory Pleading" or "Initiatory Petition," which was legally necessary to start the signature campaign to amend the Constitution or to put the movement to gather signatures under COMELEC power and function. On the substantive allegations of the petitioners, Delfin maintains as follows: (1) Contrary to the claim of the petitioners, there is a law, R.A. No. 6735, which governs the conduct of initiative to amend the Constitution. The absence therein of a subtitle for such initiative is not fatal, since subtitles are not requirements for the validity or sufficiency of laws. (2) Section 9(b) of R.A. No. 6735 specifically provides that the proposition in an initiative to amend the Constitution approved by the majority of the votes cast in the plebiscite shall become effective as of the day of the plebiscite. (3) The claim that COMELEC Resolution No. 2300 is ultra vires is contradicted by (a) Section 2, Article IX-C of the Constitution, which grants the COMELEC the power to enforce and administer all laws and regulations relative to the conduct of an election, plebiscite, initiative, referendum, and recall; and (b) Section 20 of R.A. 6735, which empowers the COMELEC to promulgate such rules and regulations as may be necessary to carry out the purposes of the Act. (4) The proposed initiative does not involve a revision of, but mere amendment to, the Constitution because it seeks to alter only a few specific provisions of the Constitution, or more specifically, only those which lay term limits. It does not seek to reexamine or overhaul the entire document. As to the public expenditures for registration of voters, Delfin considers petitioners' estimate of P180 million as unreliable, for only the COMELEC can give the exact figure. Besides, if there will be a plebiscite it will be simultaneous with the 1997 Barangay Elections. In any event, fund

requirements for initiative will be a priority government expense because it will be for the exercise of the sovereign power of the people. In the Comment 17 for the public respondent COMELEC, filed also on 2 January 1997, the Office of the Solicitor General contends that: (1) R.A. No. 6735 deals with, inter alia, people's initiative to amend the Constitution. Its Section 2 on Statement of Policy explicitly affirms, recognizes, and guarantees that power; and its Section 3, which enumerates the three systems of initiative, includes initiative on the Constitution and defines the same as the power to propose amendments to the Constitution. Likewise, its Section 5 repeatedly mentionsinitiative on the Constitution. (2) A separate subtitle on initiative on the Constitution is not necessary in R.A. No. 6735 because, being national in scope, that system of initiative is deemed included in the subtitle on National Initiative and Referendum; and Senator Tolentino simply overlooked pertinent provisions of the law when he claimed that nothing therein was provided for initiative on the Constitution. (3) Senate Bill No. 1290 is neither a competent nor a material proof that R.A. No. 6735 does not deal with initiative on the Constitution. (4) Extension of term limits of elected officials constitutes a mere amendment to the Constitution, not a revision thereof. (5) COMELEC Resolution No. 2300 was validly issued under Section 20 of R.A. No. 6735 and under the Omnibus Election Code. The rule-making power of the COMELEC to implement the provisions of R.A. No. 6735 was in fact upheld by this Court in Subic Bay Metropolitan Authority vs. COMELEC. On 14 January 1997, this Court (a) confirmed nunc pro tunc the temporary restraining order; (b) noted the aforementioned Comments and the Motion to Lift Temporary Restraining Order filed by private respondents through Atty. Quadra, as well as the latter's Manifestation stating that he is the counsel for private respondents Alberto and Carmen Pedrosa only and the Comment he filed was for the Pedrosas; and (c) granted the Motion for Intervention filed on 6 January 1997 by Senator Raul Roco and allowed him to file his Petition

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in Intervention not later than 20 January 1997; and (d) set the case for hearing on 23 January 1997 at 9:30 a.m. On 17 January 1997, the Demokrasya-Ipagtanggol ang Konstitusyon (DIK) and the Movement of Attorneys for Brotherhood Integrity and Nationalism, Inc. (MABINI), filed a Motion for Intervention. Attached to the motion was their Petition in Intervention, which was later replaced by an Amended Petition in Intervention wherein they contend that: (1) The Delfin proposal does not involve a mere amendment to, but a revision of, the Constitution because, in the words of Fr. Joaquin Bernas, S.J., 18 it would involve a change from a political philosophy that rejects unlimited tenure to one that accepts unlimited tenure; and although the change might appear to be an isolated one, it can affect other provisions, such as, on synchronization of elections and on the State policy of guaranteeing equal access to opportunities for public service and prohibiting political dynasties. 19 A revisioncannot be done by initiative which, by express provision of Section 2 of Article XVII of the Constitution, is limited to amendments. (2) The prohibition against reelection of the President and the limits provided for all other national and local elective officials are based on the philosophy of governance, "to open up the political arena to as many as there are Filipinos qualified to handle the demands of leadership, to break the concentration of political and economic powers in the hands of a few, and to promote effective proper empowerment for participation in policy and decision-making for the common good"; hence, to remove the term limits is to negate and nullify the noble vision of the 1987 Constitution. (3) The Delfin proposal runs counter to the purpose of initiative, particularly in a conflict-of-interest situation.Initiative is intended as a fallback position that may be availed of by the people only if they are dissatisfied with the performance of their elective officials, but not as a premium for good performance. 20 (4) R.A. No. 6735 is deficient and inadequate in itself to be called the enabling law that implements the people's initiative on amendments to the Constitution. It fails to state (a) the proper parties who may file the petition, (b) the appropriate agency before whom the petition is to be

filed, (c) the contents of the petition, (d) the publication of the same, (e) the ways and means of gathering the signatures of the voters nationwide and 3% per legislative district, (f) the proper parties who may oppose or question the veracity of the signatures, (g) the role of the COMELEC in the verification of the signatures and the sufficiency of the petition, (h) the appeal from any decision of the COMELEC, (I) the holding of a plebiscite, and (g) the appropriation of funds for such people's initiative. Accordingly, there being no enabling law, the COMELEC has no jurisdiction to hear Delfin's petition. (5) The deficiency of R.A. No. 6735 cannot be rectified or remedied by COMELEC Resolution No. 2300, since the COMELEC is without authority to legislate the procedure for a people's initiative under Section 2 of Article XVII of the Constitution. That function exclusively pertains to Congress. Section 20 of R.A. No. 6735 does not constitute a legal basis for the Resolution, as the former does not set a sufficient standard for a valid delegation of power. On 20 January 1997, Senator Raul Roco filed his Petition in Intervention. 21 He avers that R.A. No. 6735 is the enabling law that implements the people's right to initiate constitutional amendments. This law is a consolidation of Senate Bill No. 17 and House Bill No. 21505; he coauthored the House Bill and even delivered a sponsorship speech thereon. He likewise submits that the COMELEC was empowered under Section 20 of that law to promulgate COMELEC Resolution No. 2300. Nevertheless, he contends that the respondent Commission is without jurisdiction to take cognizance of the Delfin Petition and to order its publication because the said petition is not the initiatory pleading contemplated under the Constitution, Republic Act No. 6735, and COMELEC Resolution No. 2300. What vests jurisdiction upon the COMELEC in an initiative on the Constitution is the filing of a petition for initiative which is signed by the required number of registered voters. He also submits that the proponents of a constitutional amendment cannot avail of the authority and resources of the COMELEC to assist them is securing the required number of signatures, as the COMELEC's role in an initiative on the Constitution is limited to the determination of the sufficiency of the initiative petition and the call and supervision of a plebiscite, if warranted. On 20 January 1997, LABAN filed a Motion for Leave to Intervene. The following day, the IBP filed a Motion for Intervention to which it attached a Petition in Intervention raising the following arguments:

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(1) Congress has failed to enact an enabling law mandated under Section 2, Article XVII of the 1987 Constitution. (2) COMELEC Resolution No. 2300 cannot substitute for the required implementing law on the initiative to amend the Constitution. (3) The Petition for Initiative suffers from a fatal defect in that it does not have the required number of signatures. (4) The petition seeks, in effect a revision of the Constitution, which can be proposed only by Congress or a constitutional convention. 22 On 21 January 1997, we promulgated a Resolution (a) granting the Motions for Intervention filed by the DIK and MABINI and by the IBP, as well as the Motion for Leave to Intervene filed by LABAN; (b) admitting the Amended Petition in Intervention of DIK and MABINI, and the Petitions in Intervention of Senator Roco and of the IBP; (c) requiring the respondents to file within a nonextendible period of five days their Consolidated Comments on the aforesaid Petitions in Intervention; and (d) requiring LABAN to file its Petition in Intervention within a nonextendible period of three days from notice, and the respondents to comment thereon within a nonextendible period of five days from receipt of the said Petition in Intervention. At the hearing of the case on 23 January 1997, the parties argued on the following pivotal issues, which the Court formulated in light of the allegations and arguments raised in the pleadings so far filed: 1. Whether R.A. No. 6735, entitled An Act Providing for a System of Initiative and Referendum and Appropriating Funds Therefor, was intended to include or cover initiative on amendments to the Constitution; and if so, whether the Act, as worded, adequately covers such initiative. 2. Whether that portion of COMELEC Resolution No. 2300 (In re: Rules and Regulations Governing the Conduct of Initiative on the Constitution, and Initiative and Referendum on National and Local Laws) regarding the conduct of initiative on amendments to the Constitution is valid, considering the absence in the law of specific provisions on the conduct of such initiative.

3. Whether the lifting of term limits of elective national and local officials, as proposed in the draft "Petition for Initiative on the 1987 Constitution," would constitute a revision of, or an amendment to, the Constitution. 4. Whether the COMELEC can take cognizance of, or has jurisdiction over, a petition solely intended to obtain an order (a) fixing the time and dates for signature gathering; (b) instructing municipal election officers to assist Delfin's movement and volunteers in establishing signature stations; and (c) directing or causing the publication of, inter alia, the unsigned proposed Petition for Initiative on the 1987 Constitution. 5. Whether it is proper for the Supreme Court to take cognizance of the petition when there is a pending case before the COMELEC. After hearing them on the issues, we required the parties to submit simultaneously their respective memoranda within twenty days and requested intervenor Senator Roco to submit copies of the deliberations on House Bill No. 21505. On 27 January 1997, LABAN filed its Petition in Intervention wherein it adopts the allegations and arguments in the main Petition. It further submits that the COMELEC should have dismissed the Delfin Petition for failure to state a sufficient cause of action and that the Commission's failure or refusal to do so constituted grave abuse of discretion amounting to lack of jurisdiction. On 28 January 1997, Senator Roco submitted copies of portions of both the Journal and the Record of the House of Representatives relating to the deliberations of House Bill No. 21505, as well as the transcripts of stenographic notes on the proceedings of the Bicameral Conference Committee, Committee on Suffrage and Electoral Reforms, of 6 June 1989 on House Bill No. 21505 and Senate Bill No. 17. Private respondents Alberto and Carmen Pedrosa filed their Consolidated Comments on the Petitions in Intervention of Senator Roco, DIK and MABINI, and IBP. 23 The parties thereafter filed, in due time, their separate memoranda. 24 As we stated in the beginning, we resolved to give due course to this special civil action.

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For a more logical discussion of the formulated issues, we shall first take up the fifth issue which appears to pose a prejudicial procedural question. I THE INSTANT PETITION IS VIABLE DESPITE THE PENDENCY IN THE COMELEC OF THE DELFIN PETITION. Except for the petitioners and intervenor Roco, the parties paid no serious attention to the fifth issue, i.e., whether it is proper for this Court to take cognizance of this special civil action when there is a pending case before the COMELEC. The petitioners provide an affirmative answer. Thus: 28. The Comelec has no jurisdiction to take cognizance of the petition filed by private respondent Delfin. This being so, it becomes imperative to stop the Comelec from proceeding any further, and under the Rules of Court, Rule 65, Section 2, a petition for prohibition is the proper remedy. 29. The writ of prohibition is an extraordinary judicial writ issuing out of a court of superior jurisdiction and directed to an inferior court, for the purpose of preventing the inferior tribunal from usurping a jurisdiction with which it is not legally vested. (People v. Vera, supra., p. 84). In this case the writ is an urgent necessity, in view of the highly divisive and adverse environmental consequences on the body politic of the questioned Comelec order. The consequent climate of legal confusion and political instability begs for judicial statesmanship. 30. In the final analysis, when the system of constitutional law is threatened by the political ambitions of man, only the Supreme Court can save a nation in peril and uphold the paramount majesty of the Constitution. 25 It must be recalled that intervenor Roco filed with the COMELEC a motion to dismiss the Delfin Petition on the ground that the COMELEC has no jurisdiction or authority to entertain the petition. 26 The COMELEC made no ruling thereon evidently because after having heard the arguments of Delfin and the oppositors at the hearing on 12 December 1996, it required them to submit within five days their memoranda or oppositions/memoranda. 27Earlier, or specifically on 6 December 1996, it practically gave due course to the Delfin Petition by ordering Delfin to cause the publication of the petition, together with the attached Petition for

Initiative, the signature form, and the notice of hearing; and by setting the case for hearing. The COMELEC's failure to act on Roco's motion to dismiss and its insistence to hold on to the petition rendered ripe and viable the instant petition under Section 2 of Rule 65 of the Rules of Court, which provides: Sec. 2. Petition for prohibition. Where the proceedings of any tribunal, corporation, board, or person, whether exercising functions judicial or ministerial, are without or in excess of its or his jurisdiction, or with grave abuse of discretion, and there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered commanding the defendant to desist from further proceedings in the action or matter specified therein. It must also be noted that intervenor Roco claims that the COMELEC has no jurisdiction over the Delfin Petition because the said petition is not supported by the required minimum number of signatures of registered voters. LABAN also asserts that the COMELEC gravely abused its discretion in refusing to dismiss the Delfin Petition, which does not contain the required number of signatures. In light of these claims, the instant case may likewise be treated as a special civil action for certiorari under Section I of Rule 65 of the Rules of Court. In any event, as correctly pointed out by intervenor Roco in his Memorandum, this Court may brush aside technicalities of procedure in cases of transcendental importance. As we stated in Kilosbayan, Inc. v. Guingona, Jr. 28 A party's standing before this Court is a procedural technicality which it may, in the exercise of its discretion, set aside in view of the importance of issues raised. In the landmark Emergency Powers Cases, this Court brushed aside this technicality because the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure. II R.A. NO. 6735 INTENDED TO INCLUDE THE SYSTEM OF INITIATIVE ON AMENDMENTS TO THE CONSTITUTION, BUT

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IS, UNFORTUNATELY, INADEQUATE TO COVER THAT SYSTEM. Section 2 of Article XVII of the Constitution provides: Sec. 2. Amendments to this Constitution may likewise be directly proposed by the people through initiative upon a petition of at least twelve per centum of the total number of registered voters, of which every legislative district must be represented by at least three per centum of the registered voters therein. No amendment under this section shall be authorized within five years following the ratification of this Constitution nor oftener than once every five years thereafter. The Congress shall provide for the implementation of the exercise of this right. This provision is not self-executory. In his book, 29 Joaquin Bernas, a member of the 1986 Constitutional Commission, stated: Without implementing legislation Section 2 cannot operate. Thus, although this mode of amending the Constitution is a mode of amendment which bypasses congressional action, in the last analysis it still is dependent on congressional action. Bluntly stated, the right of the people to directly propose amendments to the Constitution through the system of initiative would remain entombed in the cold niche of the Constitution until Congress provides for its implementation. Stated otherwise, while the Constitution has recognized or granted that right, the people cannot exercise it if Congress, for whatever reason, does not provide for its implementation. This system of initiative was originally included in Section 1 of the draft Article on Amendment or Revision proposed by the Committee on Amendments and Transitory Provisions of the 1986 Constitutional Commission in its Committee Report No. 7 (Proposed Resolution No. 332). 30 That section reads as follows: Sec. 1. Any amendment to, or revision of, this Constitution may be proposed:

(a) by the National Assembly upon a vote of three-fourths of all its members; or (b) by a constitutional convention; or (c) directly by the people themselves thru initiative as provided for in Article___ Section ___of the Constitution.31 After several interpellations, but before the period of amendments, the Committee submitted a new formulation of the concept of initiative which it denominated as Section 2; thus: MR. SUAREZ. Thank you, Madam President. May we respectfully call attention of the Members of the Commission that pursuant to the mandate given to us last night, we submitted this afternoon a complete Committee Report No. 7 which embodies the proposed provision governing the matter of initiative. This is now covered by Section 2 of the complete committee report. With the permission of the Members, may I quote Section 2: The people may, after five years from the date of the last plebiscite held, directly propose amendments to this Constitution thru initiative upon petition of at least ten percent of the registered voters. This completes the blanks appearing in the original Committee Report No. 7. 32 The interpellations on Section 2 showed that the details for carrying out Section 2 are left to the legislature. Thus: FR. BERNAS. Madam President, just two simple, clarificatory questions. First, on Section 1 on the matter of initiative upon petition of at least 10 percent, there are no details in the provision on how to carry this out. Do we

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understand, therefore, that we are leaving this matter to the legislature?

MR. SUAREZ. That is right, Madam President. FR. BERNAS. And do we also understand, therefore, that for as long as the

a constituent assembly and submit that proposal to the people for ratification through the process of an initiative. xxx xxx xxx MS. AQUINO. Do I understand from the sponsor that the intention in the proposal is to vest constituent power in the people to amend the Constitution? MR. SUAREZ. That is absolutely correct, Madam President. MS. AQUINO. I fully concur with the underlying precept of the proposal in terms of institutionalizing popular participation in the drafting of the Constitution or in the amendment thereof, but I would have a lot of difficulties in terms of accepting the draft of Section 2, as written. Would the sponsor agree with me that in the hierarchy of legal mandate, constituent power has primacy over all other legal mandates? MR. SUAREZ. The Commissioner is right, Madam President. MS. AQUINO. And would the sponsor agree with me that in the hierarchy of legal values, the Constitution is source of all legal mandates and that therefore we require a great deal of circumspection in the drafting and in the amendments of the Constitution? MR. SUAREZ. That proposition is nondebatable. MS. AQUINO. Such that in order to underscore the primacy of constituent power we have a separate article in the constitution that would specifically cover

legislature does not pass the necessary implementing law on this, this will not operate?

MR. SUAREZ. That matter was also taken up during the committee hearing, especially with respect to the budget appropriations which would have to be legislated so that the plebiscite could be called. We deemed it best that this matter be left to the legislature. The Gentleman is right. In any event, as envisioned, no amendment through the power of initiative can be called until after five years from the date of the ratification of this Constitution. Therefore, the first amendment that could be proposed through the exercise of this initiative power would be after five years. It is reasonably expected that within that five-year period, the National Assembly

can come up with the appropriate rules governing the exercise of this power.

FR. BERNAS. Since the matter is left to

the legislature the details on how this is to be carried out is it possible that, in
effect, what will be presented to the people for ratification is the work of the legislature rather than of the people? Does this provision exclude that possibility? MR. SUAREZ. No, it does not exclude that possibility because even the legislature itself as a body could propose that amendment, maybe individually or collectively, if it fails to muster the threefourths vote in order to constitute itself as

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the process and the modes of amending the Constitution? MR. SUAREZ. That is right, Madam President. MS. AQUINO. Therefore, is the sponsor inclined, as the provisions are drafted now, to again concede to the legislature the

amendment in terms of realigning Section 2 as another subparagraph (c) of Section 1, instead of setting it up as another separate section as if it were a self-executing provision? MR. SUAREZ. We would be amenable except that, as we clarified a while ago, this process of initiative is limited to

process or the requirement of determining the mechanics of amending the Constitution by people's initiative?
MR. SUAREZ. The matter of

the matter of amendment and should not expand into a revision which contemplates
a total overhaul of the Constitution. That was the sense that was conveyed by the Committee. MS. AQUINO. In other words, the Committee was attempting to distinguish the coverage of modes (a) and (b) in Section 1 to include the process of revision; whereas the process of initiation to amend,

implementing this could very well be placed in the hands of the National Assembly, not unless we can incorporate
into this provision the mechanics that would adequately cover all the conceivable situations. 33 It was made clear during the interpellations that the aforementioned Section 2 is limited to proposals to AMEND not to REVISE the Constitution; thus: MR. SUAREZ. . . . This proposal was suggested on the theory that this matter of initiative, which came about because of the extraordinary developments this year, has to be separated from the traditional modes of amending the Constitution as embodied in Section 1. The committee members felt that this system of initiative should not

which is given to the public, would only apply to amendments?

MR. SUAREZ. That is right. Those were the terms envisioned in the Committee. 35 Amendments to the proposed Section 2 were thereafter introduced by then Commissioner Hilario G. Davide, Jr., which the Committee accepted. Thus: MR. DAVIDE. Thank you Madam President. I propose to substitute the entire Section 2 with the following: MR. DAVIDE. Madam President, I have modified the proposed amendment after taking into account the modifications submitted by the sponsor himself and the honorable Commissioners Guingona, Monsod, Rama, Ople, de los Reyes and Romulo. The modified amendment in substitution of the proposed Section 2 will now read as follows: "SECTION 2. AMENDMENTS TO THIS CONSTITUTION MAY LIKEWISE BE DIRECTLY PROPOSED BY THE

extend to the revision of the entire Constitution, so we removed it from the

operation of Section 1 of the proposed Article on Amendment or Revision. 34 xxx xxx xxx

MS. AQUINO. In which case, I am seriously bothered by providing this process of initiative as a separate section in the Article on Amendment. Would the sponsor be amenable to accepting an

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PEOPLE THROUGH INITIATIVE UPON A PETITION OF AT LEAST TWELVE PERCENT OF THE TOTAL NUMBER Of REGISTERED VOTERS, OF WHICH EVERY LEGISLATIVE DISTRICT MUST BE REPRESENTED BY AT LEAST THREE PERCENT OF THE REGISTERED VOTERS THEREOF. NO AMENDMENT UNDER THIS SECTION SHALL BE AUTHORIZED WITHIN FIVE YEARS FOLLOWING THE RATIFICATION OF THIS CONSTITUTION NOR OFTENER THAN ONCE EVERY FIVE YEARS THEREAFTER. THE NATIONAL ASSEMBLY SHALL BY LAW PROVIDE FOR THE IMPLEMENTATION OF THE EXERCISE OF THIS RIGHT. MR. SUAREZ. Madam President, considering that the proposed amendment is reflective of the sense contained in Section 2 of our completed Committee Report No. 7, we accept the proposed amendment. 36 The interpellations which ensued on the proposed modified amendment to Section 2 clearly showed that it was a legislative act which must implement the exercise of the right. Thus: MR. ROMULO. Under Commissioner Davide's amendment, is it possible for the legislature to set forth certain procedures to carry out the initiative. . .? MR. DAVIDE. It can. xxx xxx xxx MR. ROMULO. But the Commissioner's amendment does not prevent the legislature from asking another body to set the proposition in proper form.

MR. DAVIDE. The Commissioner is correct. In other words, the implementation of this particular right would be subject to legislation, provided the legislature cannot determine anymore the percentage of the requirement. MR. ROMULO. But the procedures,

including the determination of the proper form for submission to the people, may be subject to legislation.
MR. DAVIDE. As long as it will not

destroy the substantive right to initiate. In

other words, none of the procedures to be proposed by the legislative body must diminish or impair the right conceded here. MR. ROMULO. In that provision of the Constitution can the procedures which I have discussed be legislated? MR. DAVIDE. Yes. 37 Commissioner Davide also reaffirmed that his modified amendment strictly confines initiative to AMENDMENTS to NOT REVISION of the Constitution. Thus: MR. DAVIDE. With pleasure, Madam President. MR. MAAMBONG. My first question: Commissioner Davide's proposed amendment on line 1 refers to "amendment." Does it not cover the word "revision" as defined by Commissioner Padilla when he made the distinction between the words "amendments" and "revision"? MR. DAVIDE. No, it does not, because "amendments" and "revision" should be covered by Section 1. So insofar as

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initiative is concerned, it can only relate to "amendments" not "revision."38 Commissioner Davide further emphasized that the process of proposing amendments through initiative must be more rigorous and difficult than the initiative on legislation. Thus: MR. DAVIDE. A distinction has to be made that under this proposal, what is involved is an amendment to the Constitution. To amend a Constitution would ordinarily require a proposal by the National Assembly by a vote of threefourths; and to call a constitutional convention would require a higher number. Moreover, just to submit the issue of calling a constitutional convention, a majority of the National Assembly is required, the import being that the process of amendment must be made more rigorous and difficult than probably initiating an ordinary legislation or putting an end to a law proposed by the National Assembly by way of a referendum. I cannot agree to reducing the requirement approved by the Committee on the Legislative because it would require another voting by the Committee, and the voting as precisely based on a requirement of 10 percent. Perhaps, I might present such a proposal, by way of an amendment, when the Commission shall take up the Article on the Legislative or on the National Assembly on plenary sessions. 39 The Davide modified amendments to Section 2 were subjected to amendments, and the final version, which the Commission approved by a vote of 31 in favor and 3 against, reads as follows: MR. DAVIDE. Thank you Madam President. Section 2, as amended, reads as follows: "AMENDMENT TO THIS CONSTITUTION MAY LIKEWISE BE DIRECTLY PROPOSED BY THE PEOPLE THROUGH INITIATIVE UPON A PETITION OF AT LEAST TWELVE

PERCENT OF THE TOTAL NUMBER OF REGISTERED VOTERS, OF WHICH EVERY LEGISLATIVE DISTRICT MUST BE REPRESENTED BY AT LEAST THREE PERCENT OF THE REGISTERED VOTERS THEREOF. NO AMENDMENT UNDER THIS SECTION SHALL BE AUTHORIZED WITHIN FIVE YEARS FOLLOWING THE RATIFICATION OF THIS CONSTITUTION NOR OFTENER THAN ONCE EVERY FIVE YEARS THEREAFTER. THE NATIONAL ASSEMBLY SHALL BY LAW PROVIDE FOR THE IMPLEMENTATION OF THE EXERCISE OF THIS RIGHT. 40 The entire proposed Article on Amendments or Revisions was approved on second reading on 9 July 1986.41 Thereafter, upon his motion for reconsideration, Commissioner Gascon was allowed to introduce an amendment to Section 2 which, nevertheless, was withdrawn. In view thereof, the Article was again approved on Second and Third Readings on 1 August 1986. 42 However, the Committee on Style recommended that the approved Section 2 be amended by changing "percent" to "per centum" and "thereof" to "therein" and deleting the phrase "by law" in the second paragraph so that said paragraph reads: The Congress 43 shall provide for the implementation of the exercise of this right. 44 This amendment was approved and is the text of the present second paragraph of Section 2. The conclusion then is inevitable that, indeed, the system of initiative on the Constitution under Section 2 of Article XVII of the Constitution is not selfexecutory. Has Congress "provided" for the implementation of the exercise of this right? Those who answer the question in the affirmative, like the private respondents and intervenor Senator Roco, point to us R.A. No. 6735. There is, of course, no other better way for Congress to implement the exercise of the right than through the passage of a statute or legislative act. This is the essence or rationale of the last minute amendment by the

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Constitutional Commission to substitute the last paragraph of Section 2 of Article XVII then reading: The Congress 45 shall by law provide for the implementation of the exercise of this right. with The Congress shall provide for the implementation of the exercise of this right. This substitute amendment was an investiture on Congress of a power to provide for the rules implementing the exercise of the right. The "rules" means "the details on how [the right] is to be carried out." 46 We agree that R.A. No. 6735 was, as its history reveals, intended to cover initiative to propose amendments to the Constitution. The Act is a consolidation of House Bill No. 21505 and Senate Bill No. 17. The former was prepared by the Committee on Suffrage and Electoral Reforms of the House of Representatives on the basis of two House Bills referred to it, viz., (a) House Bill No. 497, 47 which dealt with the initiative and referendum mentioned in Sections 1 and 32 of Article VI of the Constitution; and (b) House Bill No. 988, 48 which dealt with the subject matter of House Bill No. 497, as well as with initiative and referendum under Section 3 of Article X (Local Government) and initiative provided for in Section 2 of Article XVII of the Constitution. Senate Bill No. 17 49 solely dealt with initiative and referendum concerning ordinances or resolutions of local government units. The Bicameral Conference Committee consolidated Senate Bill No. 17 and House Bill No. 21505 into a draft bill, which was subsequently approved on 8 June 1989 by the Senate 50 and by the House of Representatives. 51 This approved bill is now R.A. No. 6735. But is R.A. No. 6735 a full compliance with the power and duty of Congress to "provide for the implementation of the exercise of the right?" A careful scrutiny of the Act yields a negative answer. First. Contrary to the assertion of public respondent COMELEC, Section 2 of the Act does not suggest an initiative on amendments to the Constitution. The said section reads:

Sec. 2. Statement and Policy. The power of the people under a system of initiative and referendum to directly propose, enact, approve or reject, in whole or in part, the Constitution, laws, ordinances, or resolutions passed by any legislative body upon compliance with the requirements of this Act is hereby affirmed, recognized and guaranteed. (Emphasis supplied). The inclusion of the word "Constitution" therein was a delayed afterthought. That word is neither germane nor relevant to said section, which exclusively relates to initiative and referendum on national laws and local laws, ordinances, and resolutions. That section is silent as to amendments on the Constitution. As pointed out earlier, initiative on the Constitution is confined only to proposals to AMEND. The people are not accorded the power to "directly propose, enact, approve, or reject, in whole or in part, the Constitution" through the system of initiative. They can only do so with respect to "laws, ordinances, or resolutions." The foregoing conclusion is further buttressed by the fact that this section was lifted from Section 1 of Senate Bill No. 17, which solely referred to a statement of policy on local initiative and referendum and appropriately used the phrases "propose and enact," "approve or reject" and "in whole or in part." 52 Second. It is true that Section 3 (Definition of Terms) of the Act defines initiative on amendments to the Constitution and mentions it as one of the three systems of initiative, and that Section 5 (Requirements) restates the constitutional requirements as to the percentage of the registered voters who must submit the proposal. But unlike in the case of the other systems of initiative, the Act does not provide for the contents of a petition forinitiative on the Constitution. Section 5, paragraph (c) requires, among other things, statement of the proposed law sought to be enacted, approved or rejected, amended or repealed, as the case may be. It does not include, as among the contents of the petition, the provisions of the Constitution sought to be amended, in the case of initiative on the Constitution. Said paragraph (c) reads in full as follows: (c) The petition shall state the following: c.1 contents or text of the proposed law sought to be enacted, approved or rejected, amended or repealed, as the case may be; c.2 the proposition;

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c.3 the reason or reasons therefor; c.4 that it is not one of the exceptions provided therein; c.5 signatures of the petitioners or registered voters; and c.6 an abstract or summary proposition is not more than one hundred (100) words which shall be legibly written or printed at the top of every page of the petition. (Emphasis supplied). The use of the clause "proposed laws sought to be enacted, approved or rejected, amended or repealed" only strengthens the conclusion that Section 2, quoted earlier, excludes initiative on amendments to the Constitution. Third. While the Act provides subtitles for National Initiative and Referendum (Subtitle II) and for Local Initiative and Referendum (Subtitle III), no subtitle is provided for initiative on the Constitution. This conspicuous silence as to the latter simply means that the main thrust of the Act is initiative and referendum on national and local laws. If Congress intended R.A. No. 6735 to fully provide for the implementation of the initiative on amendments to the Constitution, it could have provided for a subtitle therefor, considering that in the order of things, the primacy of interest, or hierarchy of values, the right of the people to directly propose amendments to the Constitution is far more important than the initiative on national and local laws. We cannot accept the argument that the initiative on amendments to the Constitution is subsumed under the subtitle on National Initiative and Referendum because it is national in scope. Our reading of Subtitle II (National Initiative and Referendum) and Subtitle III (Local Initiative and Referendum) leaves no room for doubt that the classification is not based on the scope of the initiative involved, but on its nature and character. It is "national initiative," if what is proposed to be adopted or enacted is a national law, or a law which only Congress can pass. It is "local initiative" if what is proposed to be adopted or enacted is a law, ordinance, or resolution which only the legislative bodies of the governments of the autonomous regions, provinces, cities, municipalities, and barangays can pass. This classification of initiative into national and local is actually based on Section 3 of the Act, which we quote for emphasis and clearer understanding: Sec. 3. Definition of terms xxx xxx xxx

There are three (3) systems of initiative, namely: a.1 Initiative on the Constitution which refers to a petition proposing amendments to the Constitution; a.2 Initiative on Statutes which refers to a petition proposing to enact a national legislation; and a.3 Initiative on local legislation which refers to a petition proposing to enact a regional, provincial, city, municipal, or barangay law, resolution or ordinance. (Emphasis supplied). Hence, to complete the classification under subtitles there should have been a subtitle on initiative on amendments to the Constitution. 53 A further examination of the Act even reveals that the subtitling is not accurate. Provisions not germane to the subtitle on National Initiative and Referendum are placed therein, like (1) paragraphs (b) and (c) of Section 9, which reads: (b) The proposition in an initiative on the Constitution approved by the majority of the votes cast in the plebiscite shall become effective as to the day of the plebiscite. (c) A national or local initiative proposition approved by majority of the votes cast in an election called for the purpose shall become effective fifteen (15) days after certification and proclamation of the Commission. (Emphasis supplied). (2) that portion of Section 11 (Indirect Initiative) referring to indirect initiative with the legislative bodies of local governments; thus: Sec. 11. Indirect Initiative. Any duly accredited people's organization, as defined by law, may file a petition for indirect initiative with the House of Representatives, and other legislative bodies. . . . and (3) Section 12 on Appeal, since it applies to decisions of the COMELEC on the findings of sufficiency or insufficiency of the petition for initiative or referendum, which could be petitions for both national and localinitiative and referendum.

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Upon the other hand, Section 18 on "Authority of Courts" under subtitle III on Local Initiative and Referendum is misplaced, 54 since the provision therein applies to both national and local initiative and referendum. It reads: Sec. 18. Authority of Courts. Nothing in this Act shall prevent or preclude the proper courts from declaring null and void any proposition approved pursuant to this Act for violation of the Constitution or want of capacity of the local legislative body to enact the said measure. Curiously, too, while R.A. No. 6735 exerted utmost diligence and care in providing for the details in the implementation of initiative and referendum on national and local legislation thereby giving them special attention, it failed, rather intentionally, to do so on the system of initiative on amendments to the Constitution. Anent the initiative on national legislation, the Act provides for the following: (a) The required percentage of registered voters to sign the petition and the contents of the petition; (b) The conduct and date of the initiative; (c) The submission to the electorate of the proposition and the required number of votes for its approval; (d) The certification by the COMELEC of the approval of the proposition; (e) The publication of the approved proposition in the Official Gazette or in a newspaper of general circulation in the Philippines; and (f) The effects of the approval or rejection of the proposition. 55 As regards local initiative, the Act provides for the following: (a) The preliminary requirement as to the number of signatures of registered voters for the petition; (b) The submission of the petition to the local legislative body concerned; (c) The effect of the legislative body's failure to favorably act thereon, and the invocation of the power of initiative as a consequence thereof; (d) The formulation of the proposition;

(e) The period within which to gather the signatures; (f) The persons before whom the petition shall be signed; (g) The issuance of a certification by the COMELEC through its official in the local government unit concerned as to whether the required number of signatures have been obtained; (h) The setting of a date by the COMELEC for the submission of the proposition to the registered voters for their approval, which must be within the period specified therein; (i) The issuance of a certification of the result; (j) The date of effectivity of the approved proposition; (k) The limitations on local initiative; and (l) The limitations upon local legislative bodies. 56 Upon the other hand, as to initiative on amendments to the Constitution, R.A. No. 6735, in all of its twenty-three sections, merely (a) mentions, the word "Constitution" in Section 2; (b) defines "initiative on the Constitution" and includes it in the enumeration of the three systems of initiative in Section 3; (c) speaks of "plebiscite" as the process by which the proposition in an initiative on the Constitution may be approved or rejected by the people; (d) reiterates the constitutional requirements as to the number of voters who should sign the petition; and (e) provides for the date of effectivity of the approved proposition. There was, therefore, an obvious downgrading of the more important or the paramount system of initiative. RA. No. 6735 thus delivered a humiliating blow to the system of initiative on amendments to the Constitution by merely paying it a reluctant lip service. 57 The foregoing brings us to the conclusion that R.A. No. 6735 is incomplete, inadequate, or wanting in essential terms and conditions insofar as initiative on amendments to the Constitution is concerned. Its lacunae on this substantive matter are fatal and cannot be cured by "empowering" the COMELEC "to promulgate such rules and regulations as may be necessary to carry out the purposes of [the] Act. 58

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The rule is that what has been delegated, cannot be delegated or as expressed in a Latin maxim: potestas delegata non delegari potest. 59 The recognized exceptions to the rule are as follows: (1) Delegation of tariff powers to the President under Section 28(2) of Article VI of the Constitution; (2) Delegation of emergency powers to the President under Section 23(2) of Article VI of the Constitution; (3) Delegation to the people at large; (4) Delegation to local governments; and (5) Delegation to administrative bodies. 60 Empowering the COMELEC, an administrative body exercising quasi-judicial functions, to promulgate rules and regulations is a form of delegation of legislative authority under no. 5 above. However, in every case of permissible delegation, there must be a showing that the delegation itself is valid. It is valid only if the law (a) is complete in itself, setting forth therein the policy to be executed, carried out, or implemented by the delegate; and (b) fixes a standard the limits of which are sufficiently determinate and determinable to which the delegate must conform in the performance of his functions. 61 A sufficient standard is one which defines legislative policy, marks its limits, maps out its boundaries and specifies the public agency to apply it. It indicates the circumstances under which the legislative command is to be effected. 62 Insofar as initiative to propose amendments to the Constitution is concerned, R.A. No. 6735 miserably failed to satisfy both requirements in subordinate legislation. The delegation of the power to the COMELEC is then invalid. III COMELEC RESOLUTION NO. 2300, INSOFAR AS IT PRESCRIBES RULES AND REGULATIONS ON THE CONDUCT OF INITIATIVE ON AMENDMENTS TO THE CONSTITUTION, IS VOID. It logically follows that the COMELEC cannot validly promulgate rules and regulations to implement the exercise of the right of the people to directly propose amendments to the Constitution through the system of initiative. It does not have that power under R.A. No. 6735. Reliance on the COMELEC's

power under Section 2(1) of Article IX-C of the Constitution is misplaced, for the laws and regulations referred to therein are those promulgated by the COMELEC under (a) Section 3 of Article IX-C of the Constitution, or (b) a law where subordinate legislation is authorized and which satisfies the "completeness" and the "sufficient standard" tests. IV COMELEC ACTED WITHOUT JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION IN ENTERTAINING THE DELFIN PETITION. Even if it be conceded ex gratia that R.A. No. 6735 is a full compliance with the power of Congress to implement the right to initiate constitutional amendments, or that it has validly vested upon the COMELEC the power of subordinate legislation and that COMELEC Resolution No. 2300 is valid, the COMELEC acted without jurisdiction or with grave abuse of discretion in entertaining the Delfin Petition. Under Section 2 of Article XVII of the Constitution and Section 5(b) of R.A. No. 6735, a petition for initiative on the Constitution must be signed by at least 12% of the total number of registered voters of which every legislative district is represented by at least 3% of the registered voters therein. The Delfin Petition does not contain signatures of the required number of voters. Delfin himself admits that he has not yet gathered signatures and that the purpose of his petition is primarily to obtain assistance in his drive to gather signatures. Without the required signatures, the petition cannot be deemed validly initiated. The COMELEC acquires jurisdiction over a petition for initiative only after its filing. The petition then is the initiatory pleading. Nothing before its filing is cognizable by the COMELEC, sitting en banc. The only participation of the COMELEC or its personnel before the filing of such petition are (1) to prescribe the form of the petition; 63 (2) to issue through its Election Records and Statistics Office a certificate on the total number of registered voters in each legislative district; 64 (3) to assist, through its election registrars, in the establishment of signature stations;65 and (4) to verify, through its election registrars, the signatures on the basis of the registry list of voters, voters' affidavits, and voters' identification cards used in the immediately preceding election. 66 Since the Delfin Petition is not the initiatory petition under R.A. No. 6735 and COMELEC Resolution No. 2300, it cannot be entertained or given cognizance of by the COMELEC. The respondent Commission must have known that the petition does not fall under any of the actions or proceedings

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under the COMELEC Rules of Procedure or under Resolution No. 2300, for which reason it did not assign to the petition a docket number. Hence, the said petition was merely entered as UND, meaning, undocketed. That petition was nothing more than a mere scrap of paper, which should not have been dignified by the Order of 6 December 1996, the hearing on 12 December 1996, and the order directing Delfin and the oppositors to file their memoranda or oppositions. In so dignifying it, the COMELEC acted without jurisdiction or with grave abuse of discretion and merely wasted its time, energy, and resources. The foregoing considered, further discussion on the issue of whether the proposal to lift the term limits of elective national and local officials is an amendment to, and not a revision of, the Constitution is rendered unnecessary, if not academic. CONCLUSION This petition must then be granted, and the COMELEC should be permanently enjoined from entertaining or taking cognizance of any petition for initiative on amendments to the Constitution until a sufficient law shall have been validly enacted to provide for the implementation of the system. We feel, however, that the system of initiative to propose amendments to the Constitution should no longer be kept in the cold; it should be given flesh and blood, energy and strength. Congress should not tarry any longer in complying with the constitutional mandate to provide for the implementation of the right of the people under that system. WHEREFORE, judgment is hereby rendered a) GRANTING the instant petition; b) DECLARING R.A. No. 6735 inadequate to cover the system of initiative on amendments to the Constitution, and to have failed to provide sufficient standard for subordinate legislation; c) DECLARING void those parts of Resolution No. 2300 of the Commission on Elections prescribing rules and regulations on the conduct of initiative or amendments to the Constitution; and d) ORDERING the Commission on Elections to forthwith DISMISS the DELFIN petition (UND-96-037).

The Temporary Restraining Order issued on 18 December 1996 is made permanent as against the Commission on Elections, but is LIFTED as against private respondents. Resolution on the matter of contempt is hereby reserved. SO ORDERED.

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