Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No.

155336 November 25, 2004

COMMISSION ON HUMAN RIGHTS EMPLOYEES' ASSOCIATION (CHREA) Represented by its President, MARCIAL A. SANCHEZ, JR., petitioner, vs. COMMISSION ON HUMAN RIGHTS, respondent. DECISION CHICO-NAZARIO, J.: Can the Commission on Human Rights lawfully implement an upgrading and reclassification of personnel positions without the prior approval of the Department of Budget and Management? Before this Court is a petition for review filed by petitioner Commission on Human Rights Employees' Association (CHREA) challenging the Decision1 dated 29 November 2001 of the Court of Appeals in CA-G.R. SP No. 59678 affirming the Resolutions2 dated 16 December 1999 and 09 June 2000 of the Civil Service Commission (CSC), which sustained the validity of the upgrading and reclassification of certain personnel positions in the Commission on Human Rights (CHR) despite the disapproval thereof by the Department of Budget and Management (DBM). Also assailed is the resolution dated 11 September 2002 of the Court of Appeals denying the motion for reconsideration filed by petitioner. The antecedent facts which spawned the present controversy are as follows: On 14 February 1998, Congress passed Republic Act No. 8522, otherwise known as the General Appropriations Act of 1998. It provided for Special Provisions Applicable to All Constitutional Offices Enjoying Fiscal Autonomy. The last portion of Article XXXIII covers the appropriations of the CHR. These special provisions state:

1. Organizational Structure. Any provision of law to the contrary notwithstanding and within the limits of their respective appropriations as authorized in this Act, the Constitutional Commissions and Offices enjoying fiscal autonomy are authorized to formulate and implement the organizational structures of their respective offices, to fix and determine the salaries, allowances, and other benefits of their personnel, and whenever public interest so requires, make adjustments in their personal services itemization including, but not limited to, the transfer of item or creation of new positions in their respective offices: PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing laws, which shall be payable from any unexpended balance of, or savings in the appropriations of their respective offices: PROVIDED, FURTHER, That the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws. 2. Use of Savings. The Constitutional Commissions and Offices enjoying fiscal autonomy are hereby authorized to use savings in their respective appropriations for: (a) printing and/or publication of decisions, resolutions, and training information materials; (b) repair, maintenance and improvement of central and regional offices, facilities and equipment; (c) purchase of books, journals, periodicals and equipment; (d) necessary expenses for the employment of temporary, contractual and casual employees; (e) payment of extraordinary and miscellaneous expenses, commutable representation and transportation allowances, and fringe benefits for their officials and employees as may be authorized by law; and (f) other official purposes, subject to accounting and auditing rules and regulations. (Emphases supplied) on the strength of these special provisions, the CHR, through its then Chairperson Aurora P. Navarette-Recia and Commissioners Nasser A. Marohomsalic, Mercedes V. Contreras, Vicente P. Sibulo, and Jorge R. Coquia, promulgated Resolution No. A98-047 on 04 September 1998, adopting an upgrading and reclassification scheme among selected positions in the Commission, to wit: WHEREAS, the General Appropriations Act, FY 1998, R.A. No. 8522

has provided special provisions applicable to all Constitutional Offices enjoying Fiscal Autonomy, particularly on organizational structures and authorizes the same to formulate and implement the organizational structures of their respective offices to fix and determine the salaries, allowances and other benefits of their personnel and whenever public interest so requires, make adjustments in the personnel services itemization including, but not limited to, the transfer of item or creation of new positions in their respective offices: PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing laws, which shall be payable from any unexpanded balance of, or savings in the appropriations of their respective offices; Whereas, the Commission on Human Rights is a member of the Constitutional Fiscal Autonomy Group (CFAG) and on July 24, 1998, CFAG passed an approved Joint Resolution No. 49 adopting internal rules implementing the special provisions heretoforth mentioned; NOW THEREFORE, the Commission by virtue of its fiscal autonomy hereby approves and authorizes the upgrading and augmentation of the commensurate amount generated from savings under Personal Services to support the implementation of this resolution effective Calendar Year 1998; Let the Human Resources Development Division (HRDD) prepare the necessary Notice of Salary Adjustment and other appropriate documents to implement this resolution; . . . .3 (Emphasis supplied) Annexed to said resolution is the proposed creation of ten additional plantilla positions, namely: one Director IV position, with Salary Grade 28 for the Caraga Regional Office, four Security Officer II with Salary Grade 15, and five Process Servers, with Salary Grade 5 under the Office of the Commissioners. 4 On 19 October 1998, CHR issued Resolution No. A98-0555 providing for the upgrading or raising of salary grades of the following positions in the Commission: Number Position Salary Grade Total Salary

of Position s From 12 Attorney VI (In the Regional Field Offices) Director III Financial & Manageme nt Officer II Budget Officer III Accountant III Cashier III Information Officer V

Title

Requirement s To From 26 To 28 P229,104.00

Director IV

4 1

Director IV Director IV

27 24

28 28

38,928.00 36,744.00

1 1 1 1

Budget Officer IV Chief Accountant Cashier V Director IV

18 18 18 24

24 24 24 28

51,756.00 51,756.00 51,756.00 36,744.006

It, likewise, provided for the creation and upgrading of the following positions: A. Creation Number of Positions 4 B. Upgrading Position Title Security Officer II (Coterminous) Salary Grade 15 Total Salary Requirements 684,780.00

Number of Positions

Position Title From To Director IV Security Officer II

Salary Grade From 25 11 To 28 15

Total Salary Requirements

1 Attorney V 2 Security Officer I

P28,092.00 57,456.00 ----------------

Total 3

P 85,548.007

To support the implementation of such scheme, the CHR, in the same resolution, authorized the augmentation of a commensurate amount generated from savings under Personnel Services. By virtue of Resolution No. A98-062 dated 17 November 1998, the CHR "collapsed" the vacant positions in the body to provide additional source of funding for said staffing modification. Among the positions collapsed were: one Attorney III, four Attorney IV, one Chemist III, three Special Investigator I, one Clerk III, and one Accounting Clerk II.8 The CHR forwarded said staffing modification and upgrading scheme to the DBM with a request for its approval, but the then DBM secretary Benjamin Diokno denied the request on the following justification: Based on the evaluations made the request was not favorably considered as it effectively involved the elevation of the field units from divisions to services. The present proposal seeks further to upgrade the twelve (12) positions of Attorney VI, SG-26 to Director IV, SG-28. This would elevate the field units to a bureau or regional office, a level even higher than the one previously denied. The request to upgrade the three (3) positions of Director III, SG-27 to Director IV, SG-28, in the Central Office in effect would elevate the

services to Office and change the context from support to substantive without actual change in functions. In the absence of a specific provision of law which may be used as a legal basis to elevate the level of divisions to a bureau or regional office, and the services to offices, we reiterate our previous stand denying the upgrading of the twelve (12) positions of Attorney VI, SG26 to Director III, SG-27 or Director IV, SG-28, in the Field Operations Office (FOO) and three (3) Director III, SG-27 to Director IV, SG-28 in the Central Office. As represented, President Ramos then issued a Memorandum to the DBM Secretary dated 10 December 1997, directing the latter to increase the number of Plantilla positions in the CHR both Central and Regional Offices to implement the Philippine Decade Plan on Human Rights Education, the Philippine Human Rights Plan and Barangay Rights Actions Center in accordance with existing laws. (Emphasis in the original) Pursuant to Section 78 of the General Provisions of the General Appropriations Act (GAA) FY 1998, no organizational unit or changes in key positions shall be authorized unless provided by law or directed by the President, thus, the creation of a Finance Management Office and a Public Affairs Office cannot be given favorable recommendation. Moreover, as provided under Section 2 of RA No. 6758, otherwise known as the Compensation Standardization Law, the Department of Budget and Management is directed to establish and administer a unified compensation and position classification system in the government. The Supreme Court ruled in the case of Victorina Cruz vs. Court of Appeals, G.R. No. 119155, dated January 30, 1996, that this Department has the sole power and discretion to administer the compensation and position classification system of the National Government. Being a member of the fiscal autonomy group does not vest the agency with the authority to reclassify, upgrade, and create positions without approval of the DBM. While the members of the Group are authorized to formulate and implement the organizational structures

of their respective offices and determine the compensation of their personnel, such authority is not absolute and must be exercised within the parameters of the Unified Position Classification and Compensation System established under RA 6758 more popularly known as the Compensation Standardization Law. We therefore reiterate our previous stand on the matter.9 (Emphases supplied) In light of the DBM's disapproval of the proposed personnel modification scheme, the CSC-National Capital Region Office, through a memorandum dated 29 March 1999, recommended to the CSC-Central Office that the subject appointments be rejected owing to the DBM's disapproval of the plantilla reclassification. Meanwhile, the officers of petitioner CHREA, in representation of the rank and file employees of the CHR, requested the CSC-Central Office to affirm the recommendation of the CSC-Regional Office. CHREA stood its ground in saying that the DBM is the only agency with appropriate authority mandated by law to evaluate and approve matters of reclassification and upgrading, as well as creation of positions. The CSC-Central Office denied CHREA's request in a Resolution dated 16 December 1999, and reversed the recommendation of the CSC-Regional Office that the upgrading scheme be censured. The decretal portion of which reads: WHEREFORE, the request of Ronnie N. Rosero, Hubert V. Ruiz, Flordeliza A. Briones, George Q. Dumlao [and], Corazon A. SantosTiu, is hereby denied.10 CHREA filed a motion for reconsideration, but the CSC-Central Office denied the same on 09 June 2000. Given the cacophony of judgments between the DBM and the CSC, petitioner CHREA elevated the matter to the Court of Appeals. The Court of Appeals affirmed the pronouncement of the CSC-Central Office and upheld the validity of the upgrading, retitling, and reclassification scheme in the CHR on the justification that such action is within the ambit of CHR's fiscal autonomy. The fallo of the Court of Appeals decision provides:

IN VIEW OF ALL THE FOREGOING, the instant petition is ordered DISMISSED and the questioned Civil Service Commission Resolution No. 99-2800 dated December 16, 1999 as well as No. 001354 dated June 9, 2000, are hereby AFFIRMED. No cost.11 Unperturbed, petitioner filed this petition in this Court contending that: A. THE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT UNDER THE 1987 CONSTITUTION, THE COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL AUTONOMY. B. THE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE CONSTRUCTION OF THE COMMISSION ON HUMAN RIGHTS OF REPUBLIC ACT NO. 8522 (THE GENERAL APPROPRIATIONS ACT FOR THE FISCAL YEAR 1998) DESPITE ITS BEING IN SHARP CONFLICT WITH THE 1987 CONSTITUTION AND THE STATUTE ITSELF. C. THE COURT OF APPEALS SERIOUSLY AND GRAVELY ERRED IN AFFIRMING THE VALIDITY OF THE CIVIL SERVICE COMMISSION RESOLUTION NOS. 992800 AND 001354 AS WELL AS THAT OF THE OPINION OF THE DEPARTMENT OF JUSTICE IN STATING THAT THE COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL AUTONOMY UNDER THE 1987 CONSTITUTION AND THAT THIS FISCAL AUTONOMY INCLUDES THE ACTION TAKEN BY IT IN COLLAPSING, UPGRADING AND 12 RECLASSIFICATION OF POSITIONS THEREIN. The central question we must answer in order to resolve this case is: Can the Commission on Human Rights validly implement an upgrading, reclassification, creation, and collapsing of plantilla positions in the Commission without the prior approval of the Department of Budget and Management? Petitioner CHREA grouses that the Court of Appeals and the CSC-

Central Office both erred in sanctioning the CHR's alleged blanket authority to upgrade, reclassify, and create positions inasmuch as the approval of the DBM relative to such scheme is still indispensable. Petitioner bewails that the CSC and the Court of Appeals erroneously assumed that CHR enjoys fiscal autonomy insofar as financial matters are concerned, particularly with regard to the upgrading and reclassification of positions therein. Respondent CHR sharply retorts that petitioner has no locus standi considering that there exists no official written record in the Commission recognizing petitioner as a bona fide organization of its employees nor is there anything in the records to show that its president, Marcial A. Sanchez, Jr., has the authority to sue the CHR. The CHR contends that it has the authority to cause the upgrading, reclassification, plantilla creation, and collapsing scheme sans the approval of the DBM because it enjoys fiscal autonomy. After a thorough consideration of the arguments of both parties and an assiduous scrutiny of the records in the case at bar, it is the Court's opinion that the present petition is imbued with merit. On petitioner's personality to bring this suit, we held in a multitude of cases that a proper party is one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of.13 Here, petitioner, which consists of rank and file employees of respondent CHR, protests that the upgrading and collapsing of positions benefited only a select few in the upper level positions in the Commission resulting to the demoralization of the rank and file employees. This sufficiently meets the injury test. Indeed, the CHR's upgrading scheme, if found to be valid, potentially entails eating up the Commission's savings or that portion of its budgetary pie otherwise allocated for Personnel Services, from which the benefits of the employees, including those in the rank and file, are derived. Further, the personality of petitioner to file this case was recognized by the CSC when it took cognizance of the CHREA's request to affirm the recommendation of the CSC-National Capital Region Office. CHREA's personality to bring the suit was a non-issue in the Court of Appeals when it passed upon the merits of this case. Thus, neither should our hands be tied by this technical concern. Indeed, it is

settled jurisprudence that an issue that was neither raised in the complaint nor in the court below cannot be raised for the first time on appeal, as to do so would be offensive to the basic rules of fair play, justice, and due process.14 We now delve into the main issue of whether or not the approval by the DBM is a condition precedent to the enactment of an upgrading, reclassification, creation and collapsing of plantilla positions in the CHR. Germane to our discussion is Rep. Act No. 6758, An Act Prescribing a Revised Compensation and Position Classification System in the Government and For Other Purposes, or the Salary Standardization Law, dated 01 July 1989, which provides in Sections 2 and 4 thereof that it is the DBM that shall establish and administer a unified Compensation and Position Classification System. Thus: SEC. 2. Statement of Policy. -- It is hereby declared the policy of the State to provide equal pay for substantially equal work and to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions. In determining rates of pay, due regard shall be given to, among others, prevailing rates in the private sector for comparable work. For this purpose, the Department of Budget and Management (DBM) is hereby directed to establish and administer a unified Compensation and Position Classification System, hereinafter referred to as the System as provided for in Presidential Decree No. 985, as amended, that shall be applied for all government entities, as mandated by the Constitution. (Emphasis supplied.) SEC. 4. Coverage. The Compensation and Position Classification System herein provided shall apply to all positions, appointive or elective, on full or part-time basis, now existing or hereafter created in the government, including government-owned or controlled corporations and government financial institutions. The term "government" refers to the Executive, the Legislative and the Judicial Branches and the Constitutional Commissions and shall include all, but shall not be limited to, departments, bureaus, offices, boards, commissions, courts, tribunals, councils, authorities,

administrations, centers, institutes, state colleges and universities, local government units, and the armed forces. The term "governmentowned or controlled corporations and financial institutions" shall include all corporations and financial institutions owned or controlled by the National Government, whether such corporations and financial institutions perform governmental or proprietary functions. (Emphasis supplied.) The disputation of the Court of Appeals that the CHR is exempt from the long arm of the Salary Standardization Law is flawed considering that the coverage thereof, as defined above, encompasses the entire gamut of government offices, sans qualification. This power to "administer" is not purely ministerial in character as erroneously held by the Court of Appeals. The word to administer means to control or regulate in behalf of others; to direct or superintend the execution, application or conduct of; and to manage or conduct public affairs, as to administer the government of the state.15 The regulatory power of the DBM on matters of compensation is encrypted not only in law, but in jurisprudence as well. In the recent case of Philippine Retirement Authority (PRA) v. Jesusito L. Buag,16 this Court, speaking through Mr. Justice Reynato Puno, ruled that compensation, allowances, and other benefits received by PRA officials and employees without the requisite approval or authority of the DBM are unauthorized and irregular. In the words of the Court Despite the power granted to the Board of Directors of PRA to establish and fix a compensation and benefits scheme for its employees, the same is subject to the review of the Department of Budget and Management. However, in view of the express powers granted to PRA under its charter, the extent of the review authority of the Department of Budget and Management is limited. As stated in Intia, the task of the Department of Budget and Management is simply to review the compensation and benefits plan of the government agency or entity concerned and determine if the same complies with the prescribed policies and guidelines issued in this regard. The role of the Department of Budget and Management is supervisorial in nature, its main duty being to ascertain that the

proposed compensation, benefits and other incentives to be given to PRA officials and employees adhere to the policies and guidelines issued in accordance with applicable laws. In Victorina Cruz v. Court of Appeals,17 we held that the DBM has the sole power and discretion to administer the compensation and position classification system of the national government. In Intia, Jr. v. Commission on Audit,18 the Court held that although the charter19 of the Philippine Postal Corporation (PPC) grants it the power to fix the compensation and benefits of its employees and exempts PPC from the coverage of the rules and regulations of the Compensation and Position Classification Office, by virtue of Section 6 of P.D. No. 1597, the compensation system established by the PPC is, nonetheless, subject to the review of the DBM. This Court intoned: It should be emphasized that the review by the DBM of any PPC resolution affecting the compensation structure of its personnel should not be interpreted to mean that the DBM can dictate upon the PPC Board of Directors and deprive the latter of its discretion on the matter. Rather, the DBM's function is merely to ensure that the action taken by the Board of Directors complies with the requirements of the law, specifically, that PPC's compensation system "conforms as closely as possible with that provided for under R.A. No. 6758." (Emphasis supplied.) As measured by the foregoing legal and jurisprudential yardsticks, the imprimatur of the DBM must first be sought prior to implementation of any reclassification or upgrading of positions in government. This is consonant to the mandate of the DBM under the Revised Administrative Code of 1987, Section 3, Chapter 1, Title XVII, to wit: SEC. 3. Powers and Functions. The Department of Budget and Management shall assist the President in the preparation of a national resources and expenditures budget, preparation, execution and control of the National Budget, preparation and maintenance of accounting systems essential to the budgetary process, achievement of more economy and efficiency in the management of government operations, administration of compensation and position classification systems, assessment of organizational effectiveness and review and

evaluation of legislative proposals having budgetary or organizational implications. (Emphasis supplied.) Irrefragably, it is within the turf of the DBM Secretary to disallow the upgrading, reclassification, and creation of additional plantilla positions in the CHR based on its finding that such scheme lacks legal justification. Notably, the CHR itself recognizes the authority of the DBM to deny or approve the proposed reclassification of positions as evidenced by its three letters to the DBM requesting approval thereof. As such, it is now estopped from now claiming that the nod of approval it has previously sought from the DBM is a superfluity. The Court of Appeals incorrectly relied on the pronouncement of the CSC-Central Office that the CHR is a constitutional commission, and as such enjoys fiscal autonomy.20 Palpably, the Court of Appeals' Decision was based on the mistaken premise that the CHR belongs to the species of constitutional commissions. But, Article IX of the Constitution states in no uncertain terms that only the CSC, the Commission on Elections, and the Commission on Audit shall be tagged as Constitutional Commissions with the appurtenant right to fiscal autonomy. Thus: Sec. 1. The Constitutional Commissions, which shall be independent, are the Civil Service Commission, the Commission on Elections, and the Commission on Audit. Sec. 5. The Commission shall enjoy fiscal autonomy. Their approved annual appropriations shall be automatically and regularly released. Along the same vein, the Administrative Code, in Chapter 5, Sections 24 and 26 of Book II on Distribution of Powers of Government, the constitutional commissions shall include only the Civil Service Commission, the Commission on Elections, and the Commission on Audit, which are granted independence and fiscal autonomy. In contrast, Chapter 5, Section 29 thereof, is silent on the grant of similar powers to the other bodies including the CHR. Thus: SEC. 24. Constitutional Commissions. The Constitutional

Commissions, which shall be independent, are the Civil Service Commission, the Commission on Elections, and the Commission on Audit. SEC. 26. Fiscal Autonomy. The Constitutional Commissions shall enjoy fiscal autonomy. The approved annual appropriations shall be automatically and regularly released. SEC. 29. Other Bodies. There shall be in accordance with the Constitution, an Office of the Ombudsman, a Commission on Human Rights, and independent central monetary authority, and a national police commission. Likewise, as provided in the Constitution, Congress may establish an independent economic and planning agency. (Emphasis ours.) From the 1987 Constitution and the Administrative Code, it is abundantly clear that the CHR is not among the class of Constitutional Commissions. As expressed in the oft-repeated maxim expressio unius est exclusio alterius, the express mention of one person, thing, act or consequence excludes all others. Stated otherwise, expressium facit cessare tacitum what is expressed puts an end to what is implied.21 Nor is there any legal basis to support the contention that the CHR enjoys fiscal autonomy. In essence, fiscal autonomy entails freedom from outside control and limitations, other than those provided by law. It is the freedom to allocate and utilize funds granted by law, in accordance with law, and pursuant to the wisdom and dispatch its needs may require from time to time.22 In Blaquera v. Alcala and Bengzon v. Drilon,23 it is understood that it is only the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman, which enjoy fiscal autonomy. Thus, in Bengzon,24 we explained: As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom and dispatch that their needs require. It recognizes the power and authority to levy, assess and collect fees,

fix rates of compensation not exceeding the highest rates authorized by law for compensation and pay plans of the government and allocate and disburse such sums as may be provided by law or prescribed by them in the course of the discharge of their functions. ... The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the manner the independent constitutional offices allocate and utilize the funds appropriated for their operations is anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as regards the Supreme Court, of the independence and separation of powers upon which the entire fabric of our constitutional system is based. In the interest of comity and cooperation, the Supreme Court, [the] Constitutional Commissions, and the Ombudsman have so far limited their objections to constant reminders. We now agree with the petitioners that this grant of autonomy should cease to be a meaningless provision. (Emphasis supplied.) Neither does the fact that the CHR was admitted as a member by the Constitutional Fiscal Autonomy Group (CFAG) ipso facto clothed it with fiscal autonomy. Fiscal autonomy is a constitutional grant, not a tag obtainable by membership. We note with interest that the special provision under Rep. Act No. 8522, while cited under the heading of the CHR, did not specifically mention CHR as among those offices to which the special provision to formulate and implement organizational structures apply, but merely states its coverage to include Constitutional Commissions and Offices enjoying fiscal autonomy. In contrast, the Special Provision Applicable to the Judiciary under Article XXVIII of the General Appropriations Act of 1998 specifically mentions that such special provision applies to the judiciary and had categorically authorized the Chief Justice of the Supreme Court to formulate and implement the organizational structure of the Judiciary, to wit: 1. Organizational Structure. Any provision of law to the contrary

notwithstanding and within the limits of their respective appropriations authorized in this Act, the Chief Justice of the Supreme Court is authorized to formulate and implement organizational structure of the Judiciary, to fix and determine the salaries, allowances, and other benefits of their personnel, and whenever public interest so requires, make adjustments in the personal services itemization including, but not limited to, the transfer of item or creation of new positions in the Judiciary; PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing law, which shall be payable from any unexpended balance of, or savings in the appropriations of their respective offices: PROVIDED, FURTHER, That the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws. (Emphasis supplied.) All told, the CHR, although admittedly a constitutional creation is, nonetheless, not included in the genus of offices accorded fiscal autonomy by constitutional or legislative fiat. Even assuming en arguendo that the CHR enjoys fiscal autonomy, we share the stance of the DBM that the grant of fiscal autonomy notwithstanding, all government offices must, all the same, kowtow to the Salary Standardization Law. We are of the same mind with the DBM on its standpoint, thusBeing a member of the fiscal autonomy group does not vest the agency with the authority to reclassify, upgrade, and create positions without approval of the DBM. While the members of the Group are authorized to formulate and implement the organizational structures of their respective offices and determine the compensation of their personnel, such authority is not absolute and must be exercised within the parameters of the Unified Position Classification and Compensation System established under RA 6758 more popularly known as the Compensation Standardization Law.25 (Emphasis supplied.) The most lucid argument against the stand of respondent, however, is the provision of Rep. Act No. 8522 "that the implementation hereof shall be in accordance with salary rates, allowances and other

benefits authorized under compensation standardization laws."26 Indeed, the law upon which respondent heavily anchors its case upon has expressly provided that any form of adjustment in the organizational structure must be within the parameters of the Salary Standardization Law. The Salary Standardization Law has gained impetus in addressing one of the basic causes of discontent of many civil servants.27 For this purpose, Congress has delegated to the DBM the power to administer the Salary Standardization Law and to ensure that the spirit behind it is observed. This power is part of the system of checks and balances or system of restraints in our government. The DBM's exercise of such authority is not in itself an arrogation inasmuch as it is pursuant to the paramount law of the land, the Salary Standardization Law and the Administrative Code. In line with its role to breathe life into the policy behind the Salary Standardization Law of "providing equal pay for substantially equal work and to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions," the DBM, in the case under review, made a determination, after a thorough evaluation, that the reclassification and upgrading scheme proposed by the CHR lacks legal rationalization. The DBM expounded that Section 78 of the general provisions of the General Appropriations Act FY 1998, which the CHR heavily relies upon to justify its reclassification scheme, explicitly provides that "no organizational unit or changes in key positions shall be authorized unless provided by law or directed by the President." Here, the DBM discerned that there is no law authorizing the creation of a Finance Management Office and a Public Affairs Office in the CHR. Anent CHR's proposal to upgrade twelve positions of Attorney VI, SG-26 to Director IV, SG-28, and four positions of Director III, SG-27 to Director IV, SG-28, in the Central Office, the DBM denied the same as this would change the context from support to substantive without actual change in functions. This view of the DBM, as the law's designated body to implement and administer a unified compensation system, is beyond cavil. The

interpretation of an administrative government agency, which is tasked to implement a statute is accorded great respect and ordinarily controls the construction of the courts. In Energy Regulatory Board v. Court of Appeals,28 we echoed the basic rule that the courts will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies. To be sure, considering his expertise on matters affecting the nation's coffers, the Secretary of the DBM, as the President's alter ego, knows from where he speaks inasmuch as he has the front seat view of the adverse effects of an unwarranted upgrading or creation of positions in the CHR in particular and in the entire government in general. WHEREFORE, the petition is GRANTED, the Decision dated 29 November 2001 of the Court of Appeals in CA-G.R. SP No. 59678 and its Resolution dated 11 September 2002 are hereby REVERSED and SET ASIDE. The ruling dated 29 March 1999 of the Civil Service Commision-National Capital Region is REINSTATED. The Commission on Human Rights Resolution No. A98-047 dated 04 September 1998, Resolution No. A98-055 dated 19 October 1998 and Resolution No. A98-062 dated 17 November 1998 without the approval of the Department of Budget and Management are disallowed. No pronouncement as to costs. SO ORDERED. Puno, Acting C.J., Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur. Footnotes
1

Rollo, pp. 36-50; Penned by Associate Justice Conrado M. Vasquez, Jr., with Associate Justices Andres B. Reyes, Jr. and Amelita G. Tolentino, concurring.
2

Id. at 37. Id. at 51-52.

Id. at 53-56. Id. at 54. Id. Id. at 55. Id. at 57. Id. at 62-63. Id. at 37. Id. at 47. Id. at 19-20.

10

11

12

13

Cruz, Philippine Political Law 243 (1996 ed.), citing Ex Parte Lewitt, 303 U.S. 633.
14

EASCO v. LTFRB, G.R. No. 149717, 07 October 2003, 413 SCRA 75.
15

Philippine Law Dictionary 21 (2nd ed.), citing Caw v. Benedicto, 63 OG 3393; 8 C.A.R. (2s) 814.
16

G.R. No. 143784, 05 February 2003, 397 SCRA 27, 35. G.R. No. 119155, 30 January 1996, 252 SCRA599. G.R. No. 131529, 30 April 1999, 306 SCRA 593, 609. Rep. Act No. 7354 (1992). Rollo, p. 46.

17

18

19

20

21

Canet v. Decena, G.R. No. 155344, 20 January 2004, 420 SCRA 388.
22

Blaquera v. Alcala, G.R. Nos. 109406, 110642, 111494, 112056 and 119597, 11 September 1998, 295 SCRA 366.

23

Id.; Bengzon v. Drilon, G.R. No. 103524, 15 April 1992, 208 SCRA 133.
24

Id. Rollo, p. 63.

25

26

Article XXXIII, Rep. Act No. 8522, Special Provisions Applicable to all Constitutional Offices Enjoying Fiscal Autonomy.
27

Cruz, Philippine Political Law, p. 243 (1996 Ed).

28

G.R. No. 113079, 20 April 2001, 357 SCRA 30, citing Nestle v. Court of Appeals, G.R. No. 86738, 13 November 1991, 203 SCRA 504.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 193978 February 28, 2012

JELBERT B. GALICTO, Petitioner, vs. H.E. PRESIDENT BENIGNO SIMEON C. AQUINO III, in his capacity as President of the Republic of the Philippines; ATTY. PAQUITO N. OCHOA, JR., in his capacity as Executive Secretary; and FLORENCIO B. ABAD, in his capacity as Secretary of the Department of Budget and Management, Respondents. RESOLUTION BRION, J.: Before us is a Petition for Certiorari and Prohibition with Application for Writ of Preliminary Injunction and/or Temporary Restraining Order,1 seeking to nullify and enjoin the implementation of Executive Order No. (EO) 7 issued by the Office of the President on September 8, 2010. Petitioner Jelbert B. Galicto asserts that EO 7 is unconstitutional for having been issued beyond the powers of the President and for being in breach of existing laws. The petitioner is a Filipino citizen and an employee of the Philippine Health Insurance Corporation (PhilHealth).2 He is currently holding the position of Court Attorney IV and is assigned at the PhilHealth Regional Office CARAGA.3 Respondent Benigno Simeon C. Aquino III is the President of the Republic of the Philippines (Pres. Aquino); he issued EO 7 and has the duty of implementing it. Respondent Paquito N. Ochoa, Jr. is the incumbent Executive Secretary and, as the alter ego of Pres. Aquino, is tasked with the implementation of EO 7. Respondent Florencio B. Abad is the incumbent Secretary of the Department of Budget and Management (DBM) charged with the implementation of EO 7.4 The Antecedent Facts On July 26, 2010, Pres. Aquino made public in his first State of the

Nation Address the alleged excessive allowances, bonuses and other benefits of Officers and Members of the Board of Directors of the Manila Waterworks and Sewerage System a government owned and controlled corporation (GOCC) which has been unable to meet its standing obligations.5 Subsequently, the Senate of the Philippines (Senate), through the Senate Committee on Government Corporations and Public Enterprises, conducted an inquiry in aid of legislation on the reported excessive salaries, allowances, and other benefits of GOCCs and government financial institutions (GFIs).6 Based on its findings that "officials and governing boards of various [GOCCs] and [GFIs] x x x have been granting themselves unwarranted allowances, bonuses, incentives, stock options, and other benefits [as well as other] irregular and abusive practices,"7 the Senate issued Senate Resolution No. 17 "urging the President to order the immediate suspension of the unusually large and apparently excessive allowances, bonuses, incentives and other perks of members of the governing boards of [GOCCs] and [GFIs]."8 Heeding the call of Congress, Pres. Aquino, on September 8, 2010, issued EO 7, entitled "Directing the Rationalization of the Compensation and Position Classification System in the [GOCCs] and [GFIs], and for Other Purposes." EO 7 provided for the guiding principles and framework to establish a fixed compensation and position classification system for GOCCs and GFIs. A Task Force was also created to review all remunerations of GOCC and GFI employees and officers, while GOCCs and GFIs were ordered to submit to the Task Force information regarding their compensation. Finally, EO 7 ordered (1) a moratorium on the increases in the salaries and other forms of compensation, except salary adjustments under EO 8011 and EO 900, of all GOCC and GFI employees for an indefinite period to be set by the President,9 and (2) a suspension of all allowances, bonuses and incentives of members of the Board of Directors/Trustees until December 31, 2010.10 EO 7 was published on September 10, 2010.11 It took effect on September 25, 2010 and precluded the Board of Directors, Trustees and/or Officers of GOCCs from granting and releasing bonuses and allowances to members of the board of directors, and from increasing salary rates of and granting new or additional benefits and

allowances to their employees. The Petition The petitioner claims that as a PhilHealth employee, he is affected by the implementation of EO 7, which was issued with grave abuse of discretion amounting to lack or excess of jurisdiction, based on the following arguments: I. EXECUTIVE ORDER NO. 7 IS NULL AND VOID FOR LACK OF LEGAL BASIS DUE TO THE FOLLOWING GROUNDS: A. P.D. 985 IS NOT APPLICABLE AS BASIS FOR EXECUTIVE ORDER NO. 7 BECAUSE THE GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS WERE SUBSEQUENTLY GRANTED THE POWER TO FIX COMPENSATION LONG AFTER SUCH POWER HAS BEEN REVOKED BY P.D. 1597 AND R.A. 6758. B. THE GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS DO NOT NEED TO HAVE ITS COMPENSATION PLANS, RATES AND POLICIES REVIEWED BY THE DBM AND APPROVED BY THE PRESIDENT BECAUSE P.D. 1597 REQUIRES ONLY THE GOCCs TO REPORT TO THE OFFICE TO THE PRESIDENT THEIR COMPENSATION PLANS AND RATES BUT THE SAME DOES NOT GIVE THE PRESIDENT THE POWER OF CONTROL OVER THE FISCAL POWER OF THE GOCCs. C. J.R. NO. 4, [SERIES] 2009 IS NOT APPLICABLE AS LEGAL BASIS BECAUSE IT HAD NOT RIPENED INTO X X X LAW, THE SAME NOT HAVING BEEN PUBLISHED. D. ASSUMING ARGUENDO THAT J.R. NO. 1, S. 2004 (sic) AND J.R. 4, S. 2009 ARE VALID, STILL THEY ARE NOT APPLICABLE AS LEGAL BASIS BECAUSE THEY ARE NOT LAWS WHICH MAY VALIDLY DELEGATE POWER TO THE PRESIDENT TO SUSPEND THE POWER OF THE BOARD TO FIX COMPENSATION. II.

EXECUTIVE ORDER NO. 7 IS INVALID FOR DIVESTING THE BOARD OF DIRECTORS OF [THE] GOCCS OF THEIR POWER TO FIX THE COMPENSATION, A POWER WHICH IS A LEGISLATIVE GRANT AND WHICH COULD NOT BE REVOKED OR MODIFIED BY AN EXECUTIVE FIAT. III. EXECUTIVE ORDER NO. 7 IS BY SUBSTANCE A LAW, WHICH IS A DEROGATION OF CONGRESSIONAL PREROGATIVE AND IS THEREFORE UNCONSTITUTIONAL. IV. THE ACTS OF SUSPENDING AND IMPOSING MORATORIUM ARE ULTRA VIRES ACTS BECAUSE J.R. NO. 4 DOES NOT EXPRESSLY AUTHORIZE THE PRESIDENT TO EXERCISE SUCH POWERS. V. EXECUTIVE ORDER NO. 7 IS AN INVALID ISSUANCE BECAUSE IT HAS NO SUFFICIENT STANDARDS AND IS THEREFORE ARBITRARY, UNREASONABLE AND A VIOLATION OF SUBSTANTIVE DUE PROCESS. VI. EXECUTIVE ORDER NO. 7 INVOLVES THE DETERMINATION AND DISCRETION AS TO WHAT THE LAW SHALL BE AND IS THEREFORE INVALID FOR ITS USURPATION OF LEGISLATIVE POWER. VII. CONSISTENT WITH THE DECISION OF THE SUPREME COURT IN PIMENTEL V. AGUIRRE CASE, EXECUTIVE ORDER NO. 7 IS ONLY DIRECTORY AND NOT MANDATORY.12 The Case for the Respondents

On December 13, 2010, the respondents filed their Comment. They pointed out the following procedural defects as grounds for the petitions dismissal: (1) the petitioner lacks locus standi; (2) the petitioner failed to attach a board resolution or secretarys certificate authorizing him to question EO 7 in behalf of PhilHealth; (3) the petitioners signature does not indicate his PTR Number, Mandatory Continuing Legal Education (MCLE) Compliance Number and Integrated Bar of the Philippines (IBP) Number; (4) the jurat of the Verification and Certification of Non-Forum Shopping failed to indicate a valid identification card as provided under A.M. No. 02-813-SC; (5) the President should be dropped as a party respondent as he is immune from suit; and (6) certiorari is not applicable to this case.13 The respondents also raised substantive defenses to support the validity of EO 7. They claim that the President exercises control over the governing boards of the GOCCs and GFIs; thus, he can fix their compensation packages. In addition, EO 7 was issued in accordance with law for the purpose of controlling the grant of excessive salaries, allowances, incentives and other benefits to GOCC and GFI employees. They also advocate the validity of Joint Resolution (J.R.) No. 4, which they point to as the authority for issuing EO 7.14 Meanwhile, on June 6, 2011, Congress enacted Republic Act (R.A.) No. 10149,15 otherwise known as the "GOCC Governance Act of 2011." Section 11 of RA 10149 expressly authorizes the President to fix the compensation framework of GOCCs and GFIs. The Courts Ruling We resolve to DISMISS the petition for its patent formal and procedural infirmities, and for having been mooted by subsequent events. A. Certiorari is not the proper remedy. Under the Rules of Court, petitions for Certiorari and Prohibition are availed of to question judicial, quasi-judicial and mandatory acts. Since the issuance of an EO is not judicial, quasi-judicial or a mandatory act, a petition for certiorari and prohibition is an incorrect remedy; instead a petition for declaratory relief under Rule 63 of the

Rules of Court, filed with the Regional Trial Court (RTC), is the proper recourse to assail the validity of EO 7: Section 1. Who may file petition. Any person interested under a deed, will, contract or other written instrument, whose rights are affected by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or duties, thereunder. (Emphases ours.) Liga ng mga Barangay National v. City Mayor of Manila16 is a case in point.17 In Liga, we dismissed the petition for certiorari to set aside an EO issued by a City Mayor and insisted that a petition for declaratory relief should have been filed with the RTC. We painstakingly ruled: After due deliberation on the pleadings filed, we resolve to dismiss this petition for certiorari. First, the respondents neither acted in any judicial or quasi-judicial capacity nor arrogated unto themselves any judicial or quasi-judicial prerogatives. A petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure is a special civil action that may be invoked only against a tribunal, board, or officer exercising judicial or quasi-judicial functions. Section 1, Rule 65 of the 1997 Rules of Civil Procedure provides: SECTION 1. Petition for certiorari. When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any 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 annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. Elsewise stated, for a writ of certiorari to issue, the following requisites must concur: (1) it must be directed against a tribunal,

board, or officer exercising judicial or quasi-judicial functions; (2) the tribunal, board, or officer must have acted without or in excess of jurisdiction or with grave abuse of discretion amounting [to] lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. A respondent is said to be exercising judicial function where he has the power to determine what the law is and what the legal rights of the parties are, and then undertakes to determine these questions and adjudicate upon the rights of the parties. Quasi-judicial function, on the other hand, is "a term which applies to the actions, discretion, etc., of public administrative officers or bodies required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their official action and to exercise discretion of a judicial nature." Before a tribunal, board, or officer may exercise judicial or quasijudicial acts, it is necessary that there be a law that gives rise to some specific rights of persons or property under which adverse claims to such rights are made, and the controversy ensuing therefrom is brought before a tribunal, board, or officer clothed with power and authority to determine the law and adjudicate the respective rights of the contending parties. The respondents do not fall within the ambit of tribunal, board, or officer exercising judicial or quasi-judicial functions. As correctly pointed out by the respondents, the enactment by the City Council of Manila of the assailed ordinance and the issuance by respondent Mayor of the questioned executive order were done in the exercise of legislative and executive functions, respectively, and not of judicial or quasi-judicial functions. On this score alone, certiorari will not lie. Second, although the instant petition is styled as a petition for certiorari, in essence, it seeks the declaration by this Court of the unconstitutionality or illegality of the questioned ordinance and executive order. It, thus, partakes of the nature of a petition for declaratory relief over which this Court has only appellate, not original, jurisdiction. Section 5, Article VIII of the Constitution provides:

Sec. 5. The Supreme Court shall have the following powers: (1) Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. (2) Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may provide, final judgments and orders of lower courts in: (a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Italics supplied). As such, this petition must necessar[ily] fail, as this Court does not have original jurisdiction over a petition for declaratory relief even if only questions of law are involved.18 Likewise, in Southern Hemisphere Engagement Network, Inc. v. Anti Terrorism Council,19 we similarly dismissed the petitions for certiorari and prohibition challenging the constitutionality of R.A. No. 9372, otherwise known as the "Human Security Act of 2007," since the respondents therein (members of the Anti-Terrorism Council) did not exercise judicial or quasi-judicial functions. While we have recognized in the past that we can exercise the discretion and rulemaking authority we are granted under the Constitution,20 and set aside procedural considerations to permit parties to bring a suit before us at the first instance through certiorari and/or prohibition,21 this liberal policy remains to be an exception to the general rule, and thus, has its limits. In Concepcion v. Commission on Elections (COMELEC),22 we emphasized the importance of availing of the proper remedies and cautioned against the wrongful use of certiorari in order to assail the quasi-legislative acts of the COMELEC, especially by the wrong party. In ruling that liberality and the transcendental doctrine cannot trump blatant disregard of procedural rules, and considering that the petitioner had other available remedies (such as a petition for declaratory relief with the appropriate RTC under the terms of Rule 63 of the Rules of Court), as in this case, we categorically ruled:

The petitioners unusual approaches and use of Rule 65 of the Rules of Court do not appear to us to be the result of any error in reading Rule 65, given the way the petition was crafted. Rather, it was a backdoor approach to achieve what the petitioner could not directly do in his individual capacity under Rule 65. It was, at the very least, an attempted bypass of other available, albeit lengthier, modes of review that the Rules of Court provide. While we stop short of concluding that the petitioners approaches constitute an abuse of process through a manipulative reading and application of the Rules of Court, we nevertheless resolve that the petition should be dismissed for its blatant violation of the Rules. The transgressions alleged in a petition, however weighty they may sound, cannot be justifications for blatantly disregarding the rules of procedure, particularly when remedial measures were available under these same rules to achieve the petitioners objectives. For our part, we cannot and should not in the name of liberality and the "transcendental importance" doctrine entertain these types of petitions. As we held in the very recent case of Lozano, et al. vs. Nograles, albeit from a different perspective, our liberal approach has its limits and should not be abused.23 [emphasis supplied] B. Petitioner lacks locus standi. "Locus standi or legal standing has been defined as a personal and substantial interest in a case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged. The gist of the question on standing is whether a party alleges such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions."24 This requirement of standing relates to the constitutional mandate that this Court settle only actual cases or controversies.25 Thus, as a general rule, a party is allowed to "raise a constitutional question" when (1) he can show that he will personally suffer some actual or threatened injury because of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by a favorable action.26

Jurisprudence defines interest as "material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest. By real interest is meant a present substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate, or consequential interest."27 To support his claim that he has locus standi to file the present petition, the petitioner contends that as an employee of PhilHealth, he "stands to be prejudiced by [EO] 7, which suspends or imposes a moratorium on the grants of salary increases or new or increased benefits to officers and employees of GOCC[s] and x x x curtail[s] the prerogative of those officers who are to fix and determine his compensation."28 The petitioner also claims that he has standing as a member of the bar in good standing who has an interest in ensuring that laws and orders of the Philippine government are legally and validly issued and implemented. The respondents meanwhile argue that the petitioner is not a real party-in-interest since future increases in salaries and other benefits are merely contingent events or expectancies.29 The petitioner, too, is not asserting a public right for which he is entitled to seek judicial protection. Section 9 of EO 7 reads: Section 9. Moratorium on Increases in Salaries, Allowances, Incentives and Other Benefits. Moratorium on increases in the rates of salaries, and the grant of new increases in the rates of allowances, incentives and other benefits, except salary adjustments pursuant to Executive Order No. 8011 dated June 17, 2009 and Executive Order No. 900 dated June 23, 2010, are hereby imposed until specifically authorized by the President. [emphasis ours] In the present case, we are not convinced that the petitioner has demonstrated that he has a personal stake or material interest in the outcome of the case because his interest, if any, is speculative and based on a mere expectancy. In this case, the curtailment of future increases in his salaries and other benefits cannot but be characterized as contingent events or expectancies. To be sure, he has no vested rights to salary increases and, therefore, the absence of such right deprives the petitioner of legal standing to assail EO 7.

It has been held that as to the element of injury, such aspect is not something that just anybody with some grievance or pain may assert. It has to be direct and substantial to make it worth the courts time, as well as the effort of inquiry into the constitutionality of the acts of another department of government. If the asserted injury is more imagined than real, or is merely superficial and insubstantial, then the courts may end up being importuned to decide a matter that does not really justify such an excursion into constitutional adjudication.30 The rationale for this constitutional requirement of locus standi is by no means trifle. Not only does it assure the vigorous adversary presentation of the case; more importantly, it must suffice to warrant the Judiciarys overruling the determination of a coordinate, democratically elected organ of government, such as the President, and the clear approval by Congress, in this case. Indeed, the rationale goes to the very essence of representative democracies.31 Neither can the lack of locus standi be cured by the petitioners claim that he is instituting the present petition as a member of the bar in good standing who has an interest in ensuring that laws and orders of the Philippine government are legally and validly issued. This supposed interest has been branded by the Court in Integrated Bar of the Phils. (IBP) v. Hon. Zamora,32 "as too general an interest which is shared by other groups and [by] the whole citizenry."33 Thus, the Court ruled in IBP 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 that case. The Court made a similar ruling in Prof. David v. Pres. Macapagal-Arroyo34 and held that the petitioners therein, who are national officers of the 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 Presidential Proclamation No. 1017 and General Order No. 5.35 We note that while the petition raises vital constitutional and statutory questions concerning the power of the President to fix the compensation packages of GOCCs and GFIs with possible implications on their officials and employees, the same cannot "infuse" or give the petitioner locus standi under the transcendental importance or paramount public interest doctrine. In Velarde v. Social Justice Society,36 we held that even if the Court could have exempted

the case from the stringent locus standi requirement, such heroic effort would be futile because the transcendental issue could not be resolved any way, due to procedural infirmities and shortcomings, as in the present case.37 In other words, giving due course to the present petition which is saddled with formal and procedural infirmities explained above in this Resolution, cannot but be an exercise in futility that does not merit the Courts liberality. As we emphasized in Lozano v. Nograles,38 "while the Court has taken an increasingly liberal approach to the rule of locus standi, evolving from the stringent requirements of personal injury to the broader transcendental importance doctrine, such liberality is not to be abused."39 Finally, since the petitioner has failed to demonstrate a material and personal interest in the issue in dispute, he cannot also be considered to have filed the present case as a representative of PhilHealth. In this regard, we cannot ignore or excuse the blatant failure of the petitioner to provide a Board Resolution or a Secretarys Certificate from PhilHealth to act as its representative. C. The petition has a defective jurat. The respondents claim that the petition should be dismissed for failing to comply with Section 3, Rule 7 of the Rules of Civil Procedure, which requires the party or the counsel representing him to sign the pleading and indicate an address that should not be a post office box. The petition also allegedly violated the Supreme Court En Banc Resolution dated November 12, 2001, requiring counsels to indicate in their pleadings their Roll of Attorneys Number, their PTR Number and their IBP Official Receipt or Lifetime Member Number; otherwise, the pleadings would be considered unsigned and dismissible. Bar Matter No. 1922 likewise states that a counsel should note down his MCLE Certificate of Compliance or Certificate of Exemption in the pleading, but the petitioner had failed to do so.40 We do not see any violation of Section 3, Rule 7 of the Rules of Civil Procedure as the petition bears the petitioners signature and office address. The present suit was brought before this Court by the petitioner himself as a party litigant and not through counsel. Therefore, the requirements under the Supreme Court En Banc

Resolution dated November 12, 2001 and Bar Matter No. 1922 do not apply. In Bar Matter No. 1132, April 1, 2003, we clarified that a party who is not a lawyer is not precluded from signing his own pleadings as this is allowed by the Rules of Court; the purpose of requiring a counsel to indicate his IBP Number and PTR Number is merely to protect the public from bogus lawyers. A similar construction should be given to Bar Matter No. 1922, which requires lawyers to indicate their MCLE Certificate of Compliance or Certificate of Exemption; otherwise, the provision that allows parties to sign their own pleadings will be negated. However, the point raised by the respondents regarding the petitioners defective jurat is correct. Indeed, A.M. No. 02-8-13-SC, dated February 19, 2008, calls for a current identification document issued by an official agency bearing the photograph and signature of the individual as competent evidence of identity. Nevertheless, we hasten to clarify that the defective jurat in the Verification/Certification of Non-Forum Shopping is not a fatal defect, as we held in In-N-Out Burger, Inc. v. Sehwani, Incorporated.41 The verification is only a formal, not a jurisdictional, requirement that the Court may waive. D. The petition has been mooted by supervening events. Because of the transitory nature of EO 7, it has been pointed out that the present case has already been rendered moot by these supervening events: (1) the lapse on December 31, 2010 of Section 10 of EO 7 that suspended the allowances and bonuses of the directors and trustees of GOCCs and GFIs; and (2) the enactment of R.A. No. 10149 amending the provisions in the charters of GOCCs and GFIs empowering their board of directors/trustees to determine their own compensation system, in favor of the grant of authority to the President to perform this act. With the enactment of the GOCC Governance Act of 2011, the President is now authorized to fix the compensation framework of GOCCs and GFIs. The pertinent provisions read: Section 5. Creation of the Governance Commission for GovernmentOwned or -Controlled Corporations. There is hereby created an advisory, monitoring, and oversight body with authority to formulate,

implement and coordinate policies to be known as the Governance Commission for Government-Owned or-Controlled Corporations, hereinafter referred to as the GCG, which shall be attached to the Office of the President. The GCG shall have the following powers and functions: xxxx h) Conduct compensation studies, develop and recommend to the President a competitive compensation and remuneration system which shall attract and retain talent, at the same time allowing the GOCC to be financially sound and sustainable; xxxx Section 8. Coverage of the Compensation and Position Classification System. The GCG, after conducting a compensation study, shall develop a Compensation and Position Classification System which shall apply to all officers and employees of the GOCCs whether under the Salary Standardization Law or exempt therefrom and shall consist of classes of positions grouped into such categories as the GCG may determine, subject to approval of the President. Section 9. Position Titles and Salary Grades. All positions in the Positions Classification System, as determined by the GCG and as approved by the President, shall be allocated to their proper position titles and salary grades in accordance with an Index of Occupational Services, Position Titles and Salary Grades of the Compensation and Position Classification System, which shall be prepared by the GCG and approved by the President. xxxx [N]o GOCC shall be exempt from the coverage of the Compensation and Position Classification System developed by the GCG under this Act. As may be gleaned from these provisions, the new law amended R.A. No. 7875 and other laws that enabled certain GOCCs and GFIs to fix their own compensation frameworks; the law now authorizes the President to fix the compensation and position classification system

for all GOCCs and GFIs, as well as other entities covered by the law. This means that, the President can now reissue an EO containing these same provisions without any legal constraints.
1wphi1

A moot case is "one that ceases to present a justiciable controversy by virtue of supervening events, so that a declaration thereon would be of no practical use or value."42 "[A]n action is considered moot when it no longer presents a justiciable controversy because the issues involved have become academic or dead[,] or when the matter in dispute has already been resolved and hence, one is not entitled to judicial intervention unless the issue is likely to be raised again between the parties x x x. Simply stated, there is nothing for the x x x court to resolve as [its] determination x x x has been overtaken by subsequent events."43 This is the present situation here. Congress, thru R.A. No. 10149, has expressly empowered the President to establish the compensation systems of GOCCs and GFIs. For the Court to still rule upon the supposed unconstitutionality of EO 7 will merely be an academic exercise. Any further discussion of the constitutionality of EO 7 serves no useful purpose since such issue is moot in its face in light of the enactment of R.A. No. 10149. In the words of the eminent constitutional law expert, Fr. Joaquin Bernas, S.J., "the Court normally [will not] entertain a petition touching on an issue that has become moot because x x x there would [be] no longer x x x a flesh and blood case for the Court to resolve."44 All told, in view of the supervening events rendering the petition moot, as well as its patent formal and procedural infirmities, we no longer see any reason for the Court to resolve the other issues raised in the certiorari petition. WHEREFORE, premises considered, the petition is DISMISSED. No costs. SO ORDERED. ARTURO D. BRION Associate Justice WE CONCUR:

RENATO C. CORONA Chief Justice ANTONIO T. CARPIO Associate Justice TERESITA J. LEONARDO-DE CASTRO* Associate Justice LUCAS P. BERSAMIN Associate Justice ROBERTO A. ABAD Associate Justice JOSE PORTUGAL PEREZ Associate Justice (On leave) MARIA LOURDES P. A. SERENO** Associate Justice ESTELA M. PERLAS-BERNABE Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court. RENATO C. CORONA Chief Justice Footnotes
*

PRESBITERO J. VELA Associate Justic DIOSDADO M. PER Associate Justic (On Leave) MARIANO C. DEL CA Associate Justic MARTIN S. VILLARA Associate Justic JOSE CATRAL MEN Associate Justic

BIENVENIDO L. RE Associate Justic

On Official Leave. On Leave. Rollo, pp. 3-72. Id. at 13. Id. at 83. Id. at 13-14.

**

Id. at 154. Id. at 158-159.

The Senate Committee found that: "(a) the representatives of the Social Security Commission (SSC) to the Board of Directors of Philex Mining earned, in addition to their bonuses, some P55 million by way of stock options; (b) three SSC representatives in the Board of Directors of the Union Bank earned P46 million in bonuses in 2009, or around P15 million each; (c) the MWSS, despite incurring a loss of P3.5 billion in 2008, declared a bonus of P5 million to its board chairman in 2009 and granted 25 bonuses in one year; and (d) GOCCs have failed to comply with the requirement of R.A. No. 7656 to remit 50% of its net earnings to the national government." (Id. at 342).
8

Ibid. Id. at 18-24. Section 9 of EO 7 states:

Section 9. Moratorium on Increases in Salaries, Allowances, Incentives and Other Benefits. Moratorium on increases in the rates of salaries, and the grant of new increases in the rates of allowances, incentives and other benefits, except salary adjustments pursuant to Executive Order No. 8011 dated June 17, 2009 and Executive Order No. 900 dated June 23, 2010, are hereby imposed until specifically authorized by the President.
10

Section 10 of EO 7 provides:

Section 10. Suspension of All Allowances, Bonuses and Incentives for Members of the Board of Directors/Trustees. The grant of allowances, bonuses, incentives, and other perks to members of the board of directors/trustees of GOCCs and GFIs, except reasonable per diems, is hereby suspended until December 31, 2010, pending the issuance of new policies and guidelines on the compensation of these board members.
11

Rollo, p. 24. Id. at 10-12.

12

13

Comment, pp. 39-62. Id. at 63-140.

14

15

AN ACT TO PROMOTE FINANCIAL VIABILITY AND FISCAL DISCIPLINE IN GOVERNMENT-OWNED OR -CONTROLLED CORPORATIONS AND TO STRENGTHEN THE ROLE OF THE STATE IN ITS GOVERNANCE AND MANAGEMENT TO MAKE THEM MORE RESPONSIVE TO THE NEEDS OF PUBLIC INTEREST AND FOR OTHER PURPOSES.
16

465 Phil. 529 (2004).

17

We are aware of our ruling in Pimentel, Jr. v. Hon. Aguirre, 391 Phil. 84 (2000), where we gave due course to a petition for certiorari and prohibition to assail an "Administrative Order issued by the President." Pimentel, however, has no bearing in the present case since the propriety of the petition or the non-observance of the hierarchy-of-courts rule was not an issue therein.
18

Supra note 16, at 540-542.

19

G.R. Nos. 178552, 178554, 178581, 178890, 179157 and 179461, October 5, 2010, 632 SCRA 146.
20

CONSTITUTION, Article VIII, Section 5(5).

21

See Pimentel, Jr. v. Hon. Aguirre, supra note 16. We similarly glossed over the erroneous remedies the petitioners used in Rivera v. Hon. Espiritu, 425 Phil. 169 (2002), Macalintal v. Commission on Elections, 435 Phil. 586 (2003), and Kapisanan ng mga Kawani ng Energy Regulatory Board v. Barin, G.R. No. 150974, June 29, 2007, 526 SCRA 1 recognizing that the procedural errors were overshadowed by the public interest involved and the crucial constitutional questions that the Court needed to resolve.
22

G.R. No. 178624, June 30, 2009, 591 SCRA 420. Id. at 437. Southern Hemisphere Engagement Network, Inc. v. Anti Terrorism

23

24

Council, supra note 19, at 167, citing Anak Mindanao Party-List Group v. The Executive Secretary, G.R. No. 166052, August 29, 2007, 531 SCRA 583, 591.
25

Lozano v. Nograles, G.R. Nos. 187883 & 187910, June 16, 2009, 589 SCRA 356, 361.
26

Tolentino v. Commission on Elections, 465 Phil. 385, 402 (2004).

27

Stefan Tito Mioza v. Hon. Cesar Tomas Lopez, etc., et al., G.R. No. 170914, April 13, 2011.
28

Rollo, pp. 15-16. Id. at 179.

29

30

See Rene B. Gorospe, Songs, Singers and Shadows: Revisiting Locus Standi In Light Of The People Power Provisions Of The 1987 Constitution, UST LAW REVIEW, Vol. LI, AY 2006-2007, pp. 15-16, citing Montecillo v. Civil Service Commission, G.R. No. 131954, June 28, 2001, 360 SCRA 99, 104; Tomas Claudio Memorial College, Inc. v. Court of Appeals, G.R. No. 124262, October 12, 1999, 316 SCRA 502, 508; and Taada v. Angara, G.R. No. 118295, May 2, 1997, 272 SCRA 18 , 79.
31

Id. at 10-11, citing then Associate Justice Reynato S. Punos Dissenting Opinion in Kilosbayan v. Guingona, Jr., at 232 SCRA 110 (1994), at 169.
32

392 Phil. 618 (2000). Id. at 633. 522 Phil. 705 (2006).

33

34

35

Id. at 764. The Court in these two above-cited cases, however, brushed aside therein petitioners lack of locus standi in view of transcendental issues raised in these cases.
36

G.R. No. 159357, April 28, 2004, 428 SCRA 283.

37

Rene B. Gorospe, Songs, Singers and Shadows: Revisiting Locus Standi In Light Of The People Power Provisions Of The 1987 Constitution, UST LAW REVIEW, supra note 30, at 53, citing Velarde v. Social Justice Society, id. at 298.
38

Supra note 25. Id. at 362. Rollo, pp. 183-190. G.R. No. 179127, December 24, 2008, 575 SCRA 535, 555.

39

40

41

42

Funa v. Ermita, G.R. No. 184740, February 11, 2010, 612 SCRA 308, 319.
43

Santiago v. CA, 348 Phil. 792, 800 (1998).

44

See J. Brion Concurring and Dissenting Opinion in Province of North Cotabato v. Government of the Republic of the Philippines Peace Panel on Ancestral Domain (GRP), G.R. Nos. 183591, 183752, 183893, 183951, & 183962, October 14, 2008, 568 SCRA 402, 703.
The Lawphil Project - Arellano Law Foundation

SEPARATE OPINION CORONA, C.J.: Most GOCCs are incurring significant financial losses. Budgetary support to the total government corporate sector (including government financial institutions, social security institutions, and GOCCs providing goods and services to the public) amounted to P80.4 billion during 20002004. In addition, indirect support, in the form of guarantees on GOCC obligations, is also in the billions of pesos. In the past 5 years, there has been a noticeable increase in

the aggregate deficit of the 14 monitored GOCCs1 , bringing their financial viability into question. While the 14 monitored GOCCs current and capital expenditures fluctuated around 6% of GDP, revenues have fallen from 5% to 4.1% of GDP over 20002004, increasing the deficit of the monitored GOCCs from 0.6% to 1.8% of GDP over the same period. In 2004, the monitored GOCCs consolidated deficit was P85.4 billion, a more than fourfold increase from the 2000 level of P19.2 billion. The 2004 deficit is already about the same size as the potential new revenues collected through the expanded value-added tax law. There are various reasons for the ballooning GOCC deficits, including (i) failure to adjust tariff rates, (ii) large capital requirements, and (iii) operational and management inefficiencies.2 Accountability in public office requires rationality and efficiency in both administrative and financial operations of all government offices, government-owned and controlled corporations (GOCCs) included. As a corollary, public funds must be utilized in a way that will promote transparency, accountability and prudence. The nation was recently informed that GOCCs, most of which enjoyed privileges not afforded to other offices and agencies of the National Government, suffer from serious fiscal deficit. Yet, officers and employees of these GOCCs continue to receive hefty perks and excessive allowances presenting a stark disconnect and causing the further depletion of limited resources. In the face of such situation, where the President as Chief Executive makes a decisive move to stave off the financial hemorrhage and administrative inefficiency of government corporations, the Court should not invalidate the Chief Executives action without a clear showing of grave abuse of discretion on his part. Factual Antecedents In his first State of the Nation Address, President Benigno Simeon C. Aquino III exposed anomalies in the financial management of the Metropolitan Waterworks and Sewerage System, the National Power Corporation and the National Food Authority. These revelations prompted the Senate to conduct legislative inquiries on the matter of the activities of GOCCs. Appalled by its findings, the Senate issued

Resolution No. 17, s. 2010, urging the President to order the immediate suspension of the unusually large and excessive allowances, bonuses, incentives and other perks of members of the governing boards of GOCCs and government financial institutions (GFIs). Thus, on September 8, 2010, President Benigno Simeon C. Aquino III issued Executive Order No. 73 (EO 7) strengthening the supervision of the compensation levels of GOCCs and GFIs by controlling the grant of excessive salaries, allowances, incentives and other benefits.4 EO 7 imposes a moratorium on increases in salaries, allowances, incentives and other benefits of GOCCs and GFIs, except salary adjustments pursuant to EO 8011 dated June 17, 2009 and EO 900 dated June 23, 2010.5 It suspended the allowances, bonuses and other perks enjoyed by the boards of directors/trustees of GOCCs and GFIs until December 31, 2010, pending the issuance of new policies and guidelines on the compensation packages of GOCCs and GFIs.6 In addition, it provides for the creation of a Task Force on Corporate Compensation (TFCC) to undertake a review of all remunerations granted to members of the board of directors, officers and rank-and-file employees, as well as discretionary funds of GOCCs and GFIs.7 It mandates the submission of information on all personnel remuneration from all GOCCs and GFIs to the TFCC.8 Lastly, it establishes guiding principles as well as a total compensation framework for the rationalization of the compensation and position classification system in GOCCs and GFIs.9 The constitutionality of EO 7 is now being challenged by petitioner Jelbert B. Galicto who brings this petition for certiorari and prohibition in his capacity as a lawyer and as an employee of the Philippine Health Insurance Corporation (PhilHealth) Regional OfficeButuan City. Essentially, he questions the authority of the President to issue EO 7. He likewise assails the constitutionality of EO 7 for allegedly violating his right to property without due process of law. The ponencia of Justice Arturo D. Brion dismisses the petition for being replete with formal and procedural defects and for having been rendered moot by supervening events. I agree with the ponencias thorough discussion and correct

disposition. Nevertheless, I am submitting this opinion to express my thoughts on matters which I believe to be equally important considerations in the resolution of this case. Fundamental considerations governing the exercise of the power of judicial review require the Court to exercise restraint in nullifying the act of a co-equal and coordinate branch. Here, the justiciability doctrines of standing and mootness work against petitioner. Moreover, a careful consideration of the respective arguments of the parties compels sustaining the validity of EO 7. The President as Chief Executive has the legal authority to issue EO 7. Furthermore, petitioner failed to show that the President committed grave abuse of discretion in directing the rationalization of the compensation and position classification system in GOCCs and GFIs. Lack of Standing and Mootness The power of judicial review is a sword that must be unsheathed with restraint. To ensure this, certain justiciability doctrines must be complied with as a prerequisite for the Courts exercise of its awesome power to declare the act of a co-equal branch invalid for being unconstitutional. These doctrines are important as they are intertwined with the principle of separation of powers.10 They help define the judicial role; they determine when it is appropriate for courts to review (a legal issue) and when it is necessary to defer to the other branches of government.11 Among the justiciability doctrines are standing and mootness. Petitioner failed to observe both. Courts do not decide all kinds of cases dumped on their laps and do not open their doors to all parties or entities claiming a grievance.12 Locus standi is intended to assure a vigorous adversary presentation of the case. More importantly, it warrants the judiciarys overruling the determination of a coordinate, democratically elected organ of government. It thus goes to the very essence of representative democracies.13 Petitioner, for himself, asserts his right to question the constitutionality of EO 7 on two grounds. First, as an employee of

PhilHealth, he allegedly stands to be prejudiced by EO 7 insofar as it suspends or imposes a moratorium on the grant of salary increases and other benefits to employees and officials of GOCCs and GFIs and curtails the prerogatives of the officers responsible for the fixing and determination of his compensation. Second, as a lawyer, he claims to have an interest in making sure that laws and orders by government officials are legally and validly issued and implemented. Petitioner cannot sufficiently anchor his standing to bring this action on account of his employment in PhilHealth, a GOCC covered by EO 7. He cannot reasonably expect this Court to symphatize with his lament that the law impedes or threatens to impede his right to receive future increases as well as the right of members of the board of directors of Philhealth to allowances and bonuses. The irreducible minimum condition for the exercise of judicial power is a requirement that a party "show he personally has suffered some actual or threatened injury" to his rights.14 A party who assails the constitutionality of a statute or an official act must have a direct and personal interest. He must show not only that the law or any governmental act is invalid, but also that he sustained or is in immediate danger of sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby in some indefinite way. He must show that he has been or is about to be denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or penalties by reason of the statute or act complained of.15 For this reason, petitioners reliance on his status as PhilHealth employee, without more, is a frail thread that fails to sustain the burden of locus standi required of anyone who may properly invoke the Courts power of judicial review. EO 7 simply imposes a moratorium on increases in salaries, allowances and other benefits of officials and employees of GOCCs and GFIs and directs the suspension of all allowances bonuses and incentives of GOCC and GFI officials. Moratorium is defined as an authorized postponement in the performance of an obligation or a suspension of a specific activity.16 Section 9 of EO 7 is not a

permanent prohibition on petitioners perceived right to receive future increases. Nor is it an absolute ban on salary increases as it ensures that, like all other officials and employees of the government, officials and employees of GOCCs and GFIs will continue to enjoy the salary increases mandated under EO 8011 dated June 17, 2009 and EO 900 dated June 23, 2010. While ones employment is a constitutionally-protected property right, petitioner does not claim that his employment is at risk under EO 7. Petitioner is simply concerned about his entitlement to future salary increases. However, a public officer has a vested right only to salaries already earned or accrued.17 Salary increases are a mere expectancy.18 They are by nature volatile and dependent on numerous variables, including the companys fiscal situation, the employees future performance on the job, or the employees continued stay in a position.19 Thus, petitioner does not have a "right" to an increase in salary. There is no vested right to salary increases.20 There must be a lawful decree or order supporting an employees claim.21 In this case, petitioner failed to point to any lawful decree or order supporting his entitlement to future increases in salary, as no such decree or order yet exists. It is, however, contended that petitioner does not claim any right to any future increase. He merely seeks to remove any legal impediment to his receiving future increases. It is asserted that, without the legal impediment provided under Section 9 of EO 7, any future increase in petitioners compensation will simply depend on the usual factors considered by the proper authorities. I fear this view is misleading and incorrect.
1wphi1

It is misleading because, by re-working the concept of injury, it diverts the focus from the required right-centric approach to the concept of injury as an element of locus standi. Injury or threat of injury, as an element of legal standing, refers to a denial of a right or privilege. It does not include the denial of a reasonable expectation. The argument is likewise incorrect because petitioners reasonable expectation of any future salary increase is subject to presidential approval. Even without Section 9 of EO 7, the President may disallow any salary increase in RA 675822 -exempt entities. Section 9 of Joint

Resolution No. 4, Section 59 of the General Provisions of RA 997023 and Section 56 of the General Provisions of RA 1014724 expressly confer on the President the authority to approve or disapprove "any grant of or increase in salaries, allowances, and other fringe benefits" in entities exempt from the coverage of RA 6758. The approval of the President, upon the favorable recommendation of the Department of Budget and Management (DBM), is among the "usual factors" that will determine any future salary increase that may be reasonable expected to be received by petitioner. Petitioner cannot also lay claim to any direct personal injury to his right or interest arising from the suspension under Section 10 of EO 7 of allowances and bonuses enjoyed by the board of directors/trustees of GOCCs and GFIs. He is not a member of the board of directors of Philhealth. Neither can petitioner rely on his membership in the Philippine Bar to support his legal standing. Mere interest as a member of the Bar25 and an empty invocation of a duty in "making sure that laws and orders by officials of the Philippine government are legally issued and implemented" does not suffice to clothe one with standing.26 It is clear from the foregoing that petitioner failed to satisfy the irreducible minimum condition that will trigger the exercise of judicial power. Lacking a leg on which he may base his personality to bring this action, petitioners claim of sufficient standing should fail. Even assuming that petitioner had standing at the time he commenced this petition, subsequent events have rendered his petition moot. For one, the effectivity of the suspension of allowances and bonuses enjoyed by the board of directors/trustees of GOCCs and GFIs under Section 10 of EO 7 already lapsed on December 31, 2010.27 Thus, a review of the constitutionality of that provision is no longer necessary and its invalidation improper. The unnecessary invalidation of Section 10 of EO 7 might not only betray injudiciousness on the part of the Court but also needlessly put the Chief Executive, the head of a coequal branch, in a bad light for issuing an invalid provision. Thus, the undue disregard of the mootness doctrine in connection with Section

10 of EO 7 would inflict severe collateral damage to judicial modesty and inter-branch courtesy. Moreover, as the ponencia correctly ruled, the enactment of RA28 1014929 has rendered the issue as to the validity of EO 7 effectively moot. With RA 10149, Congress affirmed the power of the President as enunciated in EO 7 to set guidelines and components of a rationalized compensation and position classification for all GOCC and GFI employees. If a case is moot, there is no longer an actual controversy between adverse litigants.30 Also, if events subsequent to the initiation of the lawsuit have resolved the matter, then the decision of the court on that issue is not likely to have any meaningful effect.31 With the recognition that RA 10149 mooted the challenge to EO 7, the Court must act with circumspection and prudence, bearing in mind that due respect for a co-equal branch necessitates that the presumption of legality and constitutionality afforded to the said provisions should no longer be disturbed. Consistency with Existing Laws Sections 2 to 6 of EO 7 is an enumeration of the guidelines and components of a rationalized compensation and position classification for GOCCs and GFIs that the President intends to establish. In particular, Section 2 provides the guiding principles; Section 3 discusses the total compensation framework; Section 4 pertains to the standard components of the compensation and position classification system; Section 5 involves the rationalization of indirect compensation and Section 6 lists the considerations in setting compensation levels. Petitioner claims that these provisions are invalid because they violate existing laws, namely Section 16(n) of RA 787532 (the charter of Philhealth) and Section 9 of Joint Resolution No. 433 of the Senate and the House of Representatives. Petitioner finds fault in the failure of EO 7 to correctly distinguish between GOCCs and GFIs that have been exempted by law from RA 6758, as amended, and those that are within its coverage.

RA 6758, as amended, vests the Department of Budget and Management (DBM), which is under the control of the President, the authority to establish and administer a compensation and position classification system. On the other hand, Section 16(n) of RA 7875 gives the board of directors of Philhealth the authority to appoint its own personnel and to fix their compensation, with the exception of the Philhealth president whose appointment and compensation require approval of the President. For petitioner, EO 7 violates Section 16(n) of RA 7875 by vesting on the DBM and the President the power to determine the compensation of Philhealth employees. Joint Resolution No. 4 authorizes the President to modify the compensation and position classification system under RA 6758 of civilian personnel, among others. Section 9 of Joint Resolution No. 4 recognizes the distinct character of exempt entities and provides that such entities shall be governed by their respective compensation and position classification system. For petitioner, by using the guidelines, standards and components of standardized compensation framework provided under Joint Resolution No. 4 and applying them to all GOCCs and GFIs, EO 7 contravenes Joint Resolution No. 4 itself. In particular, EO 7 disregards the substantial distinction made under Section 9 of Joint Resolution No. 4 insofar as the right of exempt GOCCs to set their own compensation and position classification systems is concerned. Petitioner is wrong. EO 7 is consistent with laws, including RA 7875 and Joint Resolution No. 4. True, Congress carved exceptions to RA 6758, as amended, when it created GOCCs and GFIs which have been granted the authority to determine their own compensation and position classification system. Philhealth, governed by RA 7875, is one of these RA 6758-exempt entities. It is likewise true that Section 9 of Joint Resolution No. 4 recognizes the authority granted to exempt entities like Philhealth to determine their own compensation and position classification system. Nonetheless, the said provision also provides that exempt entities "shall observe the policies, parameters and guidelines governing position classification, salary rates, categories and rates of

allowances, benefits and incentives prescribed by the President." For purposes of clarity, Section 9 of Joint Resolution No. 4 provides: (9) Exempt Entities Government agencies which by specific provision/s of laws are authorized to have their own compensation and position classification system shall not be entitled to the salary adjustments provided herein. Exempt entities shall be governed by their respective Compensation and Position Classification System: Provided, That such entities shall observe the policies, parameters and guidelines governing position classification, salary rates, categories and rates of allowances, benefits and incentives prescribed by the President: Provided, further, That any increase in the existing salary rates thereof shall be subject to the approval by the President, upon the recommendation of the DBM: Provided, finally, That exempt entities which still follow the salary rates for positions covered by [RA 6758], as amended, are entitled to the salary adjustments due to the implementation of this Joint Resolution, until such time that they have implemented their own compensation and position classification system. (Emphasis supplied) Provisions of law should be read and understood in their entirety and all parts thereof should be seen as constituting a coherent whole. In this context, the recognition under Section 9 of Joint Resolution No. 4 of the authority granted to exempt entities like Philhealth to determine their own compensation and position classification system seeks to exclude them from the salary adjustments provided in Joint Resolution No. 4. This would have the effect of retaining the existing compensation levels in the said exempt entities at that time. It would prevent both diminution, in case their existing compensation levels are higher than the salary adjustments, and also increase, which would have enlarged the pay disparity between those covered by RA 6758 and exempt entities. To ensure observance of the distinction between RA 6758-covered and RA 6758-exempt entities and, at the same time, forestall any unnecessary or excessive dissimilarity in compensation and position classification systems may occur as a result of the distinctions, exempt entities are required to observe the policies, parameters and guidelines governing position classification, salary rates, categories and rates of allowances, benefits and incentives prescribed by the President. This is a recognition by

Congress of the authority of the President to issue policies, parameters and guidelines that will govern the determination by exempt entities of their respective compensation and position classification systems. As a further safeguard against any abuse or misuse of their exclusion from RA 6758, any increase in existing salary rates of exempt entities are mandated to have the imprimatur of the President, upon the recommendation of the DBM. This second proviso complements and enhances the first proviso. It gives the President the opportunity to ascertain whether salary increases in exempt entities are in accordance with the prescribed policies, parameters and guidelines on compensation and position classification system. As a final proviso, exempt entities which still follow the salary rates for positions covered by RA 6758 are entitled to the salary adjustments under Joint Resolution No. 4, until such time as they have implemented their own compensation and position classification system. Again, this acknowledges the status of exempt entities and prevents the effective diminution of their salary rates. Taken as a cohesive whole, Section 9 of Joint Resolution No. 4 pertains to the effect on and applicability to RA 6758-exempt entities of the salary adjustments provided under the said Joint Resolution. It prohibits RA 6758-exempt entities from availing of the beneficial effects of the salary adjustments provided therein, unless such entities still follow the salary rates for positions covered by RA 6758 and only "until such time that they have implemented their own compensation and position classification system." However, there is nothing there which limits or constricts the power of the President as Chief Executive to prescribe such policies, parameters and guidelines which in his discretion would best serve public interest by regulating the compensation and position classification system of RA 6758exempt entities. There is nothing there that prevents or prohibits him from adopting the same or similar policies, parameters and guidelines provided for in the said Joint Resolution. Viewed in this light, Sections 2 to 6 of EO 7 cohere with the objectives of Joint Resolution No. 4 and other laws relevant to it. Petitioner further asserts as invalid insofar as Philhealth is concerned the second proviso in Section 9 of Joint Resolution No. 4. The said proviso requires that any increase in the existing salary rates in RA 6758-exempt entities shall be subject to the approval by the

President, upon the recommendation of the DBM. For petitioner, this proviso amends or repeals the grant of authority under RA 7875 to fix the compensation of Philhealths personnel to Philhealths board of directors. Petitioner, however, maintains that a joint resolution cannot be used to repeal another law simply because it is not a law. Under the Rules of both the Senate and the House of Representatives,34 a joint resolution, like a bill, is required to be enrolled, examined, undergo three readings and signed by the presiding officer of each House. A joint resolution, like a bill, is also presented to the President for approval. There is no real difference between a bill and a joint resolution.35 A joint resolution also satisfies the two requisites before a bill becomes law approval by both Houses of Congress after three readings and approval by the President. Thus, a joint resolution, upon approval by the President, is law. Even the Rules of the House of Representatives acknowledge this: SEC. 58. Third Reading. x x x No bill or joint resolution shall become law unless it passes three (3) readings on separate days and printed copies thereof in its final form are distributed to the Members three (3) days before its passage except when the President certifies to the necessity of its immediate enactment to meet a public calamity or emergency. (Emphasis supplied) Joint Resolution No. 4 was approved by both Houses of Congress after three readings. President Gloria Macapagal-Arroyo approved it on June 17, 2009. It was published in the Manila Times on June 20, 2009 and in Volume 105, No. 34 of the Official Gazette on August 24, 2009. It is therefore a law. As law, Joint Resolution No. 4 may therefore amend or repeal RA 7875, if the second proviso of Section 9 indeed it modifies RA 7875. However, the said proviso may be read in a way that does not require it to be seen as an implied amendment of RA 7875. It can be simply read as a necessary adjunct of the authority to prescribe policies, parameters and guidelines on compensation and position classification system for exempt entities. Without it, the

President would have no way to check if the prescribed policies, parameters and guidelines are actually observed. Nevertheless, Section 59 of the General Provisions of RA 9970 and Section 56 of the General Provisions of RA 10147 identically provide: SEC. 59. Special Compensation and Other Benefits. GOCCs, including GFIs, who are exempt from, or are legally enjoying special compensation and other benefits which are subject to those authorized under R.A. No. 6758, as amended, shall be governed by such special laws: PROVIDED, That they shall observe the policies, parameters and guidelines governing position classification, salary rates, categories and rates of allowances, benefits, and incentives prescribed by the President; PROVIDED, FURTHER, That they shall submit their existing compensation and position classification systems and their implementation status to the DBM; PROVIDED, FURTHERMORE, That any grant of or increase in salaries, allowances, and other fringe benefits shall be subject to the approval of the President, upon favorable recommendation of the DBM: PROVIDED, FINALLY, That they shall not be entitled to benefits accruing to government employees covered by R.A. No. 6758, as amended, if they are already receiving similar or equivalent benefits under their own compensation scheme. (Emphasis supplied) Section 59 of the General Provisions of RA 9970 and Section 56 of the General Provisions of RA 10147 completely debunk the conclusion that Sections 2 to 6 violate existing laws. Specifically with respect to all RA 6758-exempt GOCCs and GFIs, they recognize the authority of the President as exercised in Sections 2 to 6 of EO 7 to prescribe policies, parameters and guidelines governing position classification, salary rates, categories and rates of allowances, benefits, and incentives. Specifically with respect to all RA 6758exempt GOCCs and GFIs, they acknowledge the Presidents power to approve or disapprove "any grant of or increase in salaries, allowances, and other fringe benefits." Joint Resolution No. 4, Section 59 of the General Provisions of RA 9970 and Section 56 of the General Provisions of RA 10147 reinforce the rule that "sound management and effective utilization of financial resources of government are basically executive functions."36 As a

necessary incident thereof, the President as Chief Executive has the legal competence to exercise his power of control of all the executive departments, bureaus and offices,37 including GOCCs and GFIs.38 EO 7 is simply an exercise by the President of that power of control. In sum, the guidelines in Sections 2 to 6 of EO 7 are within the bounds of authority conferred on the President by the Constitution and various laws. Such regulatory powers cover all GOCCs and GFIs, regardless of coverage in or exemption from the salary standardization laws. In issuing EO 7, the President does not encroach on the authority of the legislature to make laws as he is merely enforcing the law: While Congress is vested with the power to enact laws, the President executes the laws. The executive power is vested in the President. It is generally defined as the power to enforce and administer the laws. It is the power of carrying (out) the laws into practical operation and enforcing their due observance.39 It is fundamental that no person shall be deprived of life, liberty or property without due process of law.40 Hence, the premise of a valid due process claim, whether substantive or procedural, is the dispossession of life or liberty or property. Where there is no deprivation of life, liberty or property, no meaningful claim of denial of due process may be made. As discussed earlier, the imposition of a moratorium on increases in salaries, allowances and other benefits of officers and employees of GOCCs and GFIs, except salary adjustments under EO 8011 dated June 17, 2009 and EO 900 dated June 23, 2010, does not constitute a deprivation of property. In fact, it ensures that, like all other officials and employees of the government, officials and employees of GOCCs and GFIs will continue to enjoy the salary increases granted under EO 8011 dated June 17, 2009 and EO 900 dated June 23, 2010. More importantly, the right of a public officer to receive compensation can only arise out of the rendition of the public services related to his or her office.41 The right to compensation arises out of the performance by the public officer of his duties.42 Thus, a public

officers right to salary is limited only to salaries which he has already earned or accrued for services rendered.43 Other than that, a public officer does not have a vested right to salary and his compensation may be altered, decreased or discontinued, in the absence of a constitutional prohibition.44 If no vested right to salary generally pertains to a public officer, there is no cogent reason to support the claim to a right to future salary increase. The grant of any salary increase in the future is something that is merely anticipatory of a prospective benefit, something that is contingent on various factors. That is why it is a mere expectancy,45 which does not give rise to a vested right.46 Furthermore, the measure undertaken by the President seeks to impose a moratorium only on increases which are not authorized by existing legislation sanctioning salary adjustments. On the matter of the suspension of allowances and bonuses (which is already moot as it was expressly made effective until December 31, 2010 only),47 its context shows that it was meant to arrest the questionable practice by members of the board of directors/trustees of GOCCs and GFIs granting numerous and excessive allowances, bonuses, incentives and other benefits to themselves. The Presidents action as Chief executive was simply a decisive response to Senate issued Resolution No. 17, s. 2010 urging him to act on the matter and an exercise of his control and oversight powers. More importantly, there could have been no violation of substantive due process as petitioner, or anybody for that matter, cannot properly claim a right to receive bonuses. A bonus is not a demandable and enforceable obligation.48 By definition, a "bonus" is a gratuity or act of liberality of the giver which cannot be demanded as a matter of right by the recipient.49 It is something given in addition to what is ordinarily received by or strictly due to the recipient. The grant thereof is basically a management prerogative which cannot be forced upon the employer who may not be obliged to assume the onerous burden of granting bonuses or other benefits aside from the employees basic salaries or wages, especially so if it is incapable of doing so.50 Thus, there can be no oppression to speak of even if these privileges

(bonuses, allowances and incentives) cease to be given. All the more reason should the Presidents judgment as Chief Executive be accorded respect if he directs the temporary stoppage of the grant of bonuses when he deems it to be prejudicial to public interest or too onerous because of the governments fiscal condition. It is therefore clear that the suspension of the grant of bonuses and the imposition of a moratorium on salary increases under EO 7 do not deprive petitioner of any property right. As such, any declaration that such suspension or moratorium violates substantive due process cannot be justified. Moreover, as already discussed, Section 59 of the General Provisions of RA 9970 and Section 56 of the General Provisions of RA 10147 expressly recognize the Presidents power to approve or disapprove "any grant of or increase in salaries, allowances, and other fringe benefits" in all RA 6758-exempt GOCCs and GFIs, including Philhealth. The power to approve or disapprove covers the lesser power to suspend the grant of allowances and bonuses or impose a moratorium on salary increases. All told, the act of the President as Chief Executive in issuing EO 7 was not oppressive, arbitrary, capricious or whimsical. No grave abuse of discretion may be imputed to the President. Thus, as the Presidents official act which enjoys the presumption of constitutionality and regularity, EO 7 should be accorded due respect and its validity sustained. A Final Word Accountability of public office is a safeguard of representative democracy. All who serve in government must always be aware that they are exercising a public trust. They must bear in mind that public funds are scarce resources and should therefore be used prudently and judiciously. Hence, where there are findings that government funds are being wasted due to operational inefficiency and lack of fiscal responsibility in the executive departments, bureaus, offices or agencies, the President as Chief Executive should not be deprived of the authority to control, stop, check or at least manage the situation. Absent any showing of grave abuse of discretion on his part, the

Court should recognize in the President as Chief Executive the power and duty to protect and promote public interest thru the rationalization of the compensation and position classification system in executive departments, bureaus, offices and agencies, including GOCCs and GFIs. Accordingly, I vote that the petition be DISMISSED. RENATO C. CORONA Chief Justice Footnotes
1

These are Home Guaranty Corporation, Light Rail Transit Authority, Local Water Utilities Administration, Manila Waterworks and Sewerage System, National Development Corporation, National Electrification Administration, National Food Authority, National Housing Authority, National Irrigation Authority, National Power Corporation (by virtue of the Electric Power Industry Reform Act, the Power Sector Assets and Liabilities Management Corporation and the National Transmission Corporation are added to the list), Philippine Economic Zone Authority, Philippine National Oil Corporation, Philippine National Railway, and Philippine Ports Authority. There are 722 more GOCCs whose operations are barely monitored.
2

Asian Development Bank Technical Assistance Report, Republic of the Philippines: Government-Owned and -Controlled Corporations Reform, June 2006. Accessed on 14 July 2011 through http://www.adb.org/documents/tars/phi/39606-phi-tar.pdf . Emphasis supplied.
3

Directing the Rationalization of the Compensation and Position Classification System in Government-Owned and Controlled Corporations (GOCCs) and Government Financial Institutions (GFIs), and for Other Purposes. It took effect on September 25, 2010.
4

Third Whereas Clause. Sec. 9. Sec. 10.

Sec. 7. Sec. 8. Secs. 2 and 3.

10

Chemerinsky, Erwin, Constitutional Law: Principles and Policies, Third Edition (2006), p. 51.
11

Id. Lozano v. Nograles, G.R. No. 187883, June 16, 2009. Id.

12

13

14

Valley Forge Christian College v. Americans United for separation of Church and State, 454 U.S. 464 (1982).
15

Southern Hemisphere Engagement Network, Inc. v. Anti-Terrorism Council, G.R. No. 178552, October 5, 2010. Emphasis supplied.
16

Blacks Law Dictionary, Eighth Edition, page 1031. See Fisk v. Jefferson, 116 U.S. 131 (1885). House of Sara Lee v. Rey, G.R. No. 149013, August 31, 2006. Id.

17

18

19

20

Boncodin v. National Power Corporation Employees consolidated Union (NECU), G.R. No. 162716, September 27, 2006.
21

Id. Compensation and Position Classification Act of 1989. General Appropriations Act of FY 2010. General Appropriations Act of FY 2011.

22

23

24

25

Francisco v. House of Representatives, G.R. No. 160261, November 10, 2003.

26

David v. Macapagal-Arroyo, G.R. No. 171396, May 03, 2006.

27

The suspension was extended until 31 January 2011 by EO 19 dated 30 December 2010.
28

Republic Act. GOCC Governance Act of 2011. Chemerinsky, supra note 10, p. 114. Id.

29

30

31

32

An Act Instituting a National Health Insurance Program for All Filipinos and Establishing the Philippine Health Insurance Corporation for the Purpose. It is otherwise known as the "National Health Insurance Act of 1995."
33

Joint Resolution Authorizing the President of the Philippines to Modify the Compensation and Position Classification System of Civilian Personnel and the Base Pay Schedule of Military and Uniformed Personnel in the Government, and for Other Purposes.
34

Rules XXI, XXII, XXIII and XXV for the Senate and Rule X for the House of representative.
35

http://www.senate.gov.ph/about/legpro.asp (last visited July 13, 2011).

36

Blaquera v. Alcala, G.R. No. 109406, 11 September 1998, citing Book IV of Executive Order No. 292 whose applicable provisions follow: Section 1. Declaration of Policy. - It is the policy of the State that the Department of Finance shall be primarily responsible for the sound and efficient management of the financial resources of the Government, its subdivisions, agencies and instrumentalities. (Title II) Section 1. Declaration of Policy. - The national budget shall be formulated and implemented as an instrument of national development, reflective of national objectives and plans; supportive of

and consistent with the socio-economic development plans and oriented towards the achievement of explicit objectives and expected results, to ensure that the utilization of funds and operations of government entities are conducted effectively; formulated within the context of a regionalized governmental structure and within the totality of revenues and other receipts, expenditures and borrowings of all levels of government-owned or controlled corporations; and prepared within the context of the national long-term plans and budget programs of the Government. (Title XVII)
37

Section 17, Article VII: "The President shall have control of all the executive departments, bureaus and offices. He shall ensure that the laws be faithfully executed."
38

NAMARCO v. Arca, 9 SCRA 648 (1969). Ople vs. Torres , 293 SCRA 141 (1998). Section 1, Article III, Constitution. 63C AmJur 2d 716, Public Officers and Employees, Sec. 272. Id. Fisk v. Jefferson, supra note 17.

39

40

41

42

43

44

Mechem, Floyd, A Treatise on the Law on Public Offices and Public Officers (1890), p. 577.
45

House of Sara Lee v. Rey, supra note 18.

46

Boncodin v. National Power Corporation Employees consolidated Union (NECU), supra note 20. Equitable Banking Corporation (now known as Equitable-PCI Bank) v. Sadac, GR No. 164772, 490 SCRA 380 (2006).
47

As stated earlier, the suspension was extended until 31 January 2011 by EO 19 dated 30 December 2010. (See note 27.)
48

Lepanto Ceramic, Inc. v. Lepanto Ceramics Employees Association, 614 SCRA 63 (2010).

49

Manila Banking Corporation v. NLRC, G.R. No. 107487. September 29, 1997.
50

Id.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 122156 February 3, 1997 MANILA PRINCE HOTEL petitioner, vs. GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL, respondents.

BELLOSILLO, J.: The FiIipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos, 1 is in oked by petitioner in its bid to acquire 51% of the shares of the Manila Hotel Corporation (MHC) which owns the historic Manila Hotel. Opposing, respondents maintain that the provision is not self-executing but requires an implementing legislation for its enforcement. Corollarily, they ask whether the 51% shares form part of the national economy and patrimony covered by the protective mantle of the Constitution. The controversy arose when respondent Government Service Insurance System (GSIS), pursuant to the privatization program of the Philippine Government under Proclamation No. 50 dated 8 December 1986, decided to sell through public bidding 30% to 51% of the issued and outstanding shares of respondent MHC. The winning bidder, or the eventual "strategic partner," is to provide management expertise and/or an international marketing/reservation system, and financial support to strengthen the profitability and performance of the Manila Hotel. 2 In a close bidding held on 18 September 1995 only two (2) bidders participated: petitioner Manila Prince Hotel Corporation, a Filipino corporation, which offered to buy 51% of the MHC or 15,300,000 shares at P41.58 per share, and Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel

operator, which bid for the same number of shares at P44.00 per share, or P2.42 more than the bid of petitioner. Pertinent provisions of the bidding rules prepared by respondent GSIS state I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC 1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 (reset to November 3, 1995) or the Highest Bidder will lose the right to purchase the Block of Shares and GSIS will instead offer the Block of Shares to the other Qualified Bidders: a. The Highest Bidder must negotiate and execute with the GSIS/MHC the Management Contract, International Marketing/Reservation System Contract or other type of contract specified by the Highest Bidder in its strategic plan for the Manila Hotel. . . . b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS . . . . K. DECLARATION PARTNER OF THE WINNING BIDDER/STRATEGIC

The Highest Bidder will be declared the Winning Bidder/Strategic Partner after the following conditions are met: a. Execution of the necessary contracts with GSIS/MHC not later than October 23, 1995 (reset to November 3, 1995); and
b. Requisite approvals from the GSIS/MHC and COP (Committee on Privatization)/OGCC (Office of the Government Corporate Counsel) are obtained. 3

Pending the declaration of Renong Berhad as the winning bidder/strategic partner and the execution of the necessary contracts, petitioner in a letter to respondent GSIS dated 28 September 1995 matched the bid price of P44.00 per share tendered by Renong Berhad. 4 In a subsequent letter dated 10 October 1995 petitioner

sent a manager's check issued by Philtrust Bank for Thirty-three Million Pesos (P33.000.000.00) as Bid Security to match the bid of the Malaysian Group, Messrs. Renong Berhad . . . 5 which respondent GSIS refused to accept. On 17 October 1995, perhaps apprehensive that respondent GSIS has disregarded the tender of the matching bid and that the sale of 51% of the MHC may be hastened by respondent GSIS and consummated with Renong Berhad, petitioner came to this Court on prohibition and mandamus. On 18 October 1995 the Court issued a temporary restraining order enjoining respondents from perfecting and consummating the sale to the Malaysian firm. On 10 September 1996 the instant case was accepted by the Court En Banc after it was referred to it by the First Division. The case was then set for oral arguments with former Chief Justice Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., as amici curiae. In the main, petitioner invokes Sec. 10, second par., Art. XII, of the 1987 Constitution and submits that the Manila Hotel has been identified with the Filipino nation and has practically become a historical monument which reflects the vibrancy of Philippine heritage and culture. It is a proud legacy of an earlier generation of Filipinos who believed in the nobility and sacredness of independence and its power and capacity to release the full potential of the Filipino people. To all intents and purposes, it has become a part of the national patrimony. 6 Petitioner also argues that since 51% of the shares of the MHC carries with it the ownership of the business of the hotel which is owned by respondent GSIS, a government-owned and controlled corporation, the hotel business of respondent GSIS being a part of the tourism industry is unquestionably a part of the national economy. Thus, any transaction involving 51% of the shares of stock of the MHC is clearly covered by the term national economy, to which Sec. 10, second par., Art. XII, 1987 Constitution, applies. 7 It is also the thesis of petitioner that since Manila Hotel is part of the national patrimony and its business also unquestionably part of the national economy petitioner should be preferred after it has matched the bid offer of the Malaysian firm. For the bidding rules mandate that if for any reason, the Highest Bidder cannot be awarded the Block of

Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per share. 8 Respondents except. They maintain that: First, Sec. 10, second par., Art. XII, of the 1987 Constitution is merely a statement of principle and policy since it is not a self-executing provision and requires implementing legislation(s) . . . Thus, for the said provision to Operate, there must be existing laws "to lay down conditions under which business may be done." 9 Second, granting that this provision is self-executing, Manila Hotel does not fall under the term national patrimony which only refers to lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna and all marine wealth in its territorial sea, and exclusive marine zone as cited in the first and second paragraphs of Sec. 2, Art. XII, 1987 Constitution. According to respondents, while petitioner speaks of the guests who have slept in the hotel and the events that have transpired therein which make the hotel historic, these alone do not make the hotel fall under the patrimony of the nation. What is more, the mandate of the Constitution is addressed to the State, not to respondent GSIS which possesses a personality of its own separate and distinct from the Philippines as a State. Third, granting that the Manila Hotel forms part of the national patrimony, the constitutional provision invoked is still inapplicable since what is being sold is only 51% of the outstanding shares of the corporation, not the hotel building nor the land upon which the building stands. Certainly, 51% of the equity of the MHC cannot be considered part of the national patrimony. Moreover, if the disposition of the shares of the MHC is really contrary to the Constitution, petitioner should have questioned it right from the beginning and not after it had lost in the bidding. Fourth, the reliance by petitioner on par. V., subpar. J. 1., of the bidding rules which provides that if for any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids provided that

these Qualified Bidders are willing to match the highest bid in terms of price per share, is misplaced. Respondents postulate that the privilege of submitting a matching bid has not yet arisen since it only takes place if for any reason, the Highest Bidder cannot be awarded the Block of Shares. Thus the submission by petitioner of a matching bid is premature since Renong Berhad could still very well be awarded the block of shares and the condition giving rise to the exercise of the privilege to submit a matching bid had not yet taken place. Finally, the prayer for prohibition grounded on grave abuse of discretion should fail since respondent GSIS did not exercise its discretion in a capricious, whimsical manner, and if ever it did abuse its discretion it was not so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. Similarly, the petition for mandamus should fail as petitioner has no clear legal right to what it demands and respondents do not have an imperative duty to perform the act required of them by petitioner. We now resolve. A constitution is a system of fundamental laws for the governance and administration of a nation. It is supreme, imperious, absolute and unalterable except by the authority from which it emanates. It has been defined as the fundamental and paramount law of the nation. 10 It prescribes the permanent framework of a system of government, assigns to the different departments their respective powers and duties, and establishes certain fixed principles on which government is founded. The fundamental conception in other words is that it is a supreme law to which all other laws must conform and in accordance with which all private rights must be determined and all public authority administered. 11 Under the doctrine of constitutional supremacy, if a law or contract violates any norm of the constitution that law or contract whether promulgated by the legislative or by the executive branch or entered into by private persons for private purposes is null and void and without any force and effect. Thus, since the Constitution is the fundamental, paramount and supreme law of the nation, it is deemed written in every statute and contract. Admittedly, some constitutions are merely declarations of policies and

principles. Their provisions command the legislature to enact laws and carry out the purposes of the framers who merely establish an outline of government providing for the different departments of the governmental machinery and securing certain fundamental and inalienable rights of citizens. 12 A provision which lays down a general principle, such as those found in Art. II of the 1987 Constitution, is usually not self-executing. But a provision which is complete in itself and becomes operative without the aid of supplementary or enabling legislation, or that which supplies sufficient rule by means of which the right it grants may be enjoyed or protected, is self-executing. Thus a constitutional provision is self-executing if the nature and extent of the right conferred and the liability imposed are fixed by the constitution itself, so that they can be determined by an examination and construction of its terms, and there is no language indicating that the subject is referred to the legislature for action. 13 As against constitutions of the past, modern constitutions have been generally drafted upon a different principle and have often become in effect extensive codes of laws intended to operate directly upon the people in a manner similar to that of statutory enactments, and the function of constitutional conventions has evolved into one more like that of a legislative body. Hence, unless it is expressly provided that a legislative act is necessary to enforce a constitutional mandate, the presumption now is that all provisions of the constitution are selfexecuting If the constitutional provisions are treated as requiring legislation instead of self-executing, the legislature would have the power to ignore and practically nullify the mandate of the fundamental law. 14 This can be cataclysmic. That is why the prevailing view is, as it has always been, that
. . . in case of doubt, the Constitution should be considered self-executing rather than non-self-executing . . . . Unless the contrary is clearly intended, the provisions of the Constitution should be considered self-executing, as a contrary rule would give the legislature discretion to determine when, or whether, they shall be effective. These provisions would be subordinated to the will of the lawmaking body, which could make them entirely meaningless by simply refusing to pass the needed implementing statute.
15

Respondents argue that Sec. 10, second par., Art. XII, of the 1987 Constitution is clearly not self-executing, as they quote from

discussions on the floor of the 1986 Constitutional Commission MR. RODRIGO. Madam President, I am asking this question as the Chairman of the Committee on Style. If the wording of "PREFERENCE" is given to QUALIFIED FILIPINOS," can it be understood as a preference to qualified Filipinos vis-a-vis Filipinos who are not qualified. So, why do we not make it clear? To qualified Filipinos as against aliens? THE PRESIDENT. What is the question of Commissioner Rodrigo? Is it to remove the word "QUALIFIED?". MR. RODRIGO. No, no, but say definitely "TO QUALIFIED FILIPINOS" as against whom? As against aliens or over aliens? MR. NOLLEDO. Madam President, I think that is understood. We use the word "QUALIFIED" because the existing laws or prospective laws will always lay down conditions under which business may be done. For example, qualifications on the setting up of other financial structures, et cetera (emphasis supplied by respondents) MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO Yes, 16

Quite apparently, Sec. 10, second par., of Art XII is couched in such a way as not to make it appear that it is non-self-executing but simply for purposes of style. But, certainly, the legislature is not precluded from enacting other further laws to enforce the constitutional provision so long as the contemplated statute squares with the Constitution. Minor details may be left to the legislature without impairing the selfexecuting nature of constitutional provisions. In self-executing constitutional provisions, the legislature may still enact legislation to facilitate the exercise of powers directly granted by the constitution, further the operation of such a provision, prescribe a practice to be used for its enforcement, provide a convenient remedy for the protection of the rights secured or the determination thereof, or place reasonable safeguards around the exercise of the right. The mere fact that legislation may supplement and add to or prescribe a penalty for the violation of a self-executing

constitutional provision does not render such a provision ineffective in the absence of such legislation. The omission from a constitution of any express provision for a remedy for enforcing a right or liability is not necessarily an indication that it was not intended to be selfexecuting. The rule is that a self-executing provision of the constitution does not necessarily exhaust legislative power on the subject, but any legislation must be in harmony with the constitution, further the exercise of constitutional right and make it more available. 17 Subsequent legislation however does not necessarily mean that the subject constitutional provision is not, by itself, fully enforceable. Respondents also argue that the non-self-executing nature of Sec. 10, second par., of Art. XII is implied from the tenor of the first and third paragraphs of the same section which undoubtedly are not selfexecuting. 18 The argument is flawed. If the first and third paragraphs are not self-executing because Congress is still to enact measures to encourage the formation and operation of enterprises fully owned by Filipinos, as in the first paragraph, and the State still needs legislation to regulate and exercise authority over foreign investments within its national jurisdiction, as in the third paragraph, then a fortiori, by the same logic, the second paragraph can only be self-executing as it does not by its language require any legislation in order to give preference to qualified Filipinos in the grant of rights, privileges and concessions covering the national economy and patrimony. A constitutional provision may be self-executing in one part and nonself-executing in another. 19 Even the cases cited by respondents holding that certain constitutional provisions are merely statements of principles and policies, which are basically not self-executing and only placed in the Constitution as moral incentives to legislation, not as judicially enforceable rights are simply not in point. Basco v. Philippine Amusements and Gaming Corporation 20 speaks of constitutional provisions on personal dignity, 21 the sanctity of family life, 22 the vital role of the youth in nation-building 23 the promotion of social justice, 24 and the values of education. 25 Tolentino v. Secretary of Finance 26 refers to the constitutional provisions on social justice and human rights 27 and on education. 28 Lastly, Kilosbayan, Inc. v. Morato 29 cites provisions on the promotion of general welfare, 30 the sanctity of family life, 31 the vital role of the youth in nation-building 32 and the

promotion of total human liberation and development. 33 A reading of these provisions indeed clearly shows that they are not judicially enforceable constitutional rights but merely guidelines for legislation. The very terms of the provisions manifest that they are only principles upon which the legislations must be based. Res ipsa loquitur. On the other hand, Sec. 10, second par., Art. XII of the of the 1987 Constitution is a mandatory, positive command which is complete in itself and which needs no further guidelines or implementing laws or rules for its enforcement. From its very words the provision does not require any legislation to put it in operation. It is per se judicially enforceable When our Constitution mandates that [i]n the grant of rights, privileges, and concessions covering national economy and patrimony, the State shall give preference to qualified Filipinos, it means just that qualified Filipinos shall be preferred. And when our Constitution declares that a right exists in certain specified circumstances an action may be maintained to enforce such right notwithstanding the absence of any legislation on the subject; consequently, if there is no statute especially enacted to enforce such constitutional right, such right enforces itself by its own inherent potency and puissance, and from which all legislations must take their bearings. Where there is a right there is a remedy. Ubi jus ibi remedium. As regards our national patrimony, a member of the 1986 Constitutional Commission 34 explains The patrimony of the Nation that should be conserved and developed refers not only to out rich natural resources but also to the cultural heritage of out race. It also refers to our intelligence in arts, sciences and letters. Therefore, we should develop not only our lands, forests, mines and other natural resources but also the mental ability or faculty of our people. We agree. In its plain and ordinary meaning, the term patrimony pertains to heritage. 35 When the Constitution speaks of national patrimony, it refers not only to the natural resources of the Philippines, as the Constitution could have very well used the term natural resources, but also to the cultural heritage of the Filipinos.

Manila Hotel has become a landmark a living testimonial of Philippine heritage. While it was restrictively an American hotel when it first opened in 1912, it immediately evolved to be truly Filipino, Formerly a concourse for the elite, it has since then become the venue of various significant events which have shaped Philippine history. It was called the Cultural Center of the 1930's. It was the site of the festivities during the inauguration of the Philippine Commonwealth. Dubbed as the Official Guest House of the Philippine Government. it plays host to dignitaries and official visitors who are accorded the traditional Philippine hospitality. 36 The history of the hotel has been chronicled in the book The Manila Hotel: The Heart and Memory of a City. 37 During World War II the hotel was converted by the Japanese Military Administration into a military headquarters. When the American forces returned to recapture Manila the hotel was selected by the Japanese together with Intramuros as the two (2) places fro their final stand. Thereafter, in the 1950's and 1960's, the hotel became the center of political activities, playing host to almost every political convention. In 1970 the hotel reopened after a renovation and reaped numerous international recognitions, an acknowledgment of the Filipino talent and ingenuity. In 1986 the hotel was the site of a failed coup d' etat where an aspirant for vice-president was "proclaimed" President of the Philippine Republic. For more than eight (8) decades Manila Hotel has bore mute witness to the triumphs and failures, loves and frustrations of the Filipinos; its existence is impressed with public interest; its own historicity associated with our struggle for sovereignty, independence and nationhood. Verily, Manila Hotel has become part of our national economy and patrimony. For sure, 51% of the equity of the MHC comes within the purview of the constitutional shelter for it comprises the majority and controlling stock, so that anyone who acquires or owns the 51% will have actual control and management of the hotel. In this instance, 51% of the MHC cannot be disassociated from the hotel and the land on which the hotel edifice stands. Consequently, we cannot sustain respondents' claim that the Filipino First Policy provision is not applicable since what is being sold is only 51% of the outstanding shares of the corporation, not the Hotel building nor the land upon which the building stands. 38

The argument is pure sophistry. The term qualified Filipinos as used in Our Constitution also includes corporations at least 60% of which is owned by Filipinos. This is very clear from the proceedings of the 1986 Constitutional Commission THE PRESIDENT. Commissioner Davide is recognized. MR. DAVIDE. I would like to introduce an amendment to the Nolledo amendment. And the amendment would consist in substituting the words "QUALIFIED FILIPINOS" with the following: "CITIZENS OF THE PHILIPPINES OR CORPORATIONS OR ASSOCIATIONS WHOSE CAPITAL OR CONTROLLING STOCK IS WHOLLY OWNED BY SUCH CITIZENS. xxx xxx xxx MR. MONSOD. Madam President, apparently the proponent is agreeable, but we have to raise a question. Suppose it is a corporation that is 80-percent Filipino, do we not give it preference? MR. DAVIDE. The Nolledo amendment would refer to an individual Filipino. What about a corporation wholly owned by Filipino citizens? MR. MONSOD. At least 60 percent, Madam President. MR. DAVIDE. Is that the intention? MR. MONSOD. Yes, because, in fact, we would be limiting it if we say that the preference should only be 100-percent Filipino. MR: DAVIDE. I want to get that meaning clear because "QUALIFIED FILIPINOS" may refer only to individuals and not to juridical personalities or entities.
MR. MONSOD. We agree, Madam President. 39

xxx xxx xxx MR. RODRIGO. Before we vote, may I request that the amendment be read again.
MR. NOLLEDO. The amendment will read: "IN THE GRANT OF RIGHTS,

PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS." And the word "Filipinos" here, as intended by the proponents, will include not only individual Filipinos but also Filipinocontrolled entities or entities fully-controlled by Filipinos. 40

The phrase preference to qualified Filipinos was explained thus MR. FOZ. Madam President, I would like to request Commissioner Nolledo to please restate his amendment so that I can ask a question. MR. NOLLEDO. "IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS." MR FOZ. In connection with that amendment, if a foreign enterprise is qualified and a Filipino enterprise is also qualified, will the Filipino enterprise still be given a preference? MR. NOLLEDO. Obviously. MR. FOZ. If the foreigner is more qualified in some aspects than the Filipino enterprise, will the Filipino still be preferred? MR. NOLLEDO. The answer is "yes."
MR. FOZ. Thank you, 41

Expounding further on the Filipino Commissioner Nolledo continues

First

Policy

provision

MR. NOLLEDO. Yes, Madam President. Instead of "MUST," it will be "SHALL THE STATE SHALL GlVE PREFERENCE TO QUALIFIED FILIPINOS. This embodies the so-called "Filipino First" policy. That means that Filipinos should be given preference in the grant of concessions, privileges and rights covering the national patrimony. 42

The exchange of views in the sessions of the Constitutional Commission regarding the subject provision was still further clarified by Commissioner Nolledo 43

Paragraph 2 of Section 10 explicitly mandates the "Pro-Filipino" bias in all economic concerns. It is better known as the FILIPINO FIRST Policy . . . This provision was never found in previous Constitutions . . .. The term "qualified Filipinos" simply means that preference shall be given to those citizens who can make a viable contribution to the common good, because of credible competence and efficiency. It certainly does NOT mandate the pampering and preferential treatment to Filipino citizens or organizations that are incompetent or inefficient, since such an indiscriminate preference would be counter productive and inimical to the common good. In the granting of economic rights, privileges, and concessions, when a choice has to be made between a "qualified foreigner" end a "qualified Filipino," the latter shall be chosen over the former." Lastly, the word qualified is also determinable. Petitioner was so considered by respondent GSIS and selected as one of the qualified bidders. It was pre-qualified by respondent GSIS in accordance with its own guidelines so that the sole inference here is that petitioner has been found to be possessed of proven management expertise in the hotel industry, or it has significant equity ownership in another hotel company, or it has an overall management and marketing proficiency to successfully operate the Manila Hotel. 44 The penchant to try to whittle away the mandate of the Constitution by arguing that the subject provision is not self-executory and requires implementing legislation is quite disturbing. The attempt to violate a clear constitutional provision by the government itself is only too distressing. To adopt such a line of reasoning is to renounce the duty to ensure faithfulness to the Constitution. For, even some of the provisions of the Constitution which evidently need implementing legislation have juridical life of their own and can be the source of a judicial remedy. We cannot simply afford the government a defense that arises out of the failure to enact further enabling, implementing or guiding legislation. In fine, the discourse of Fr. Joaquin G. Bernas, S.J., on constitutional government is apt
The executive department has a constitutional duty to implement laws, including the Constitution, even before Congress acts provided that

there are discoverable legal standards for executive action. When the executive acts, it must be guided by its own understanding of the constitutional command and of applicable laws. The responsibility for reading and understanding the Constitution and the laws is not the sole prerogative of Congress. If it were, the executive would have to ask Congress, or perhaps the Court, for an interpretation every time the executive is confronted by a constitutional command. That is not how constitutional government operates. 45

Respondents further argue that the constitutional provision is addressed to the State, not to respondent GSIS which by itself possesses a separate and distinct personality. This argument again is at best specious. It is undisputed that the sale of 51% of the MHC could only be carried out with the prior approval of the State acting through respondent Committee on Privatization. As correctly pointed out by Fr. Joaquin G. Bernas, S.J., this fact alone makes the sale of the assets of respondents GSIS and MHC a "state action." In constitutional jurisprudence, the acts of persons distinct from the government are considered "state action" covered by the Constitution (1) when the activity it engages in is a "public function;" (2) when the government is so significantly involved with the private actor as to make the government responsible for his action; and, (3) when the government has approved or authorized the action. It is evident that the act of respondent GSIS in selling 51% of its share in respondent MHC comes under the second and third categories of "state action." Without doubt therefore the transaction. although entered into by respondent GSIS, is in fact a transaction of the State and therefore subject to the constitutional command. 46 When the Constitution addresses the State it refers not only to the people but also to the government as elements of the State. After all, government is composed of three (3) divisions of power legislative, executive and judicial. Accordingly, a constitutional mandate directed to the State is correspondingly directed to the three(3) branches of government. It is undeniable that in this case the subject constitutional injunction is addressed among others to the Executive Department and respondent GSIS, a government instrumentality deriving its authority from the State. It should be stressed that while the Malaysian firm offered the higher bid it is not yet the winning bidder. The bidding rules expressly

provide that the highest bidder shall only be declared the winning bidder after it has negotiated and executed the necessary contracts, and secured the requisite approvals. Since the "Filipino First Policy provision of the Constitution bestows preference on qualified Filipinos the mere tending of the highest bid is not an assurance that the highest bidder will be declared the winning bidder. Resultantly, respondents are not bound to make the award yet, nor are they under obligation to enter into one with the highest bidder. For in choosing the awardee respondents are mandated to abide by the dictates of the 1987 Constitution the provisions of which are presumed to be known to all the bidders and other interested parties. Adhering to the doctrine of constitutional supremacy, the subject constitutional provision is, as it should be, impliedly written in the bidding rules issued by respondent GSIS, lest the bidding rules be nullified for being violative of the Constitution. It is a basic principle in constitutional law that all laws and contracts must conform with the fundamental law of the land. Those which violate the Constitution lose their reason for being. Paragraph V. J. 1 of the bidding rules provides that [if] for any reason the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are willing to match the highest bid in terms of price per share. 47 Certainly, the constitutional mandate itself is reason enough not to award the block of shares immediately to the foreign bidder notwithstanding its submission of a higher, or even the highest, bid. In fact, we cannot conceive of a stronger reason than the constitutional injunction itself. In the instant case, where a foreign firm submits the highest bid in a public bidding concerning the grant of rights, privileges and concessions covering the national economy and patrimony, thereby exceeding the bid of a Filipino, there is no question that the Filipino will have to be allowed to match the bid of the foreign entity. And if the Filipino matches the bid of a foreign firm the award should go to the Filipino. It must be so if we are to give life and meaning to the Filipino First Policy provision of the 1987 Constitution. For, while this may neither be expressly stated nor contemplated in the bidding rules, the constitutional fiat is, omnipresent to be simply disregarded.

To ignore it would be to sanction a perilous skirting of the basic law. This Court does not discount the apprehension that this policy may discourage foreign investors. But the Constitution and laws of the Philippines are understood to be always open to public scrutiny. These are given factors which investors must consider when venturing into business in a foreign jurisdiction. Any person therefore desiring to do business in the Philippines or with any of its agencies or instrumentalities is presumed to know his rights and obligations under the Constitution and the laws of the forum. The argument of respondents that petitioner is now estopped from questioning the sale to Renong Berhad since petitioner was well aware from the beginning that a foreigner could participate in the bidding is meritless. Undoubtedly, Filipinos and foreigners alike were invited to the bidding. But foreigners may be awarded the sale only if no Filipino qualifies, or if the qualified Filipino fails to match the highest bid tendered by the foreign entity. In the case before us, while petitioner was already preferred at the inception of the bidding because of the constitutional mandate, petitioner had not yet matched the bid offered by Renong Berhad. Thus it did not have the right or personality then to compel respondent GSIS to accept its earlier bid. Rightly, only after it had matched the bid of the foreign firm and the apparent disregard by respondent GSIS of petitioner's matching bid did the latter have a cause of action. Besides, there is no time frame for invoking the constitutional safeguard unless perhaps the award has been finally made. To insist on selling the Manila Hotel to foreigners when there is a Filipino group willing to match the bid of the foreign group is to insist that government be treated as any other ordinary market player, and bound by its mistakes or gross errors of judgment, regardless of the consequences to the Filipino people. The miscomprehension of the Constitution is regrettable. Thus we would rather remedy the indiscretion while there is still an opportunity to do so than let the government develop the habit of forgetting that the Constitution lays down the basic conditions and parameters for its actions. Since petitioner has already matched the bid price tendered by Renong Berhad pursuant to the bidding rules, respondent GSIS is left

with no alternative but to award to petitioner the block of shares of MHC and to execute the necessary agreements and documents to effect the sale in accordance not only with the bidding guidelines and procedures but with the Constitution as well. The refusal of respondent GSIS to execute the corresponding documents with petitioner as provided in the bidding rules after the latter has matched the bid of the Malaysian firm clearly constitutes grave abuse of discretion. The Filipino First Policy is a product of Philippine nationalism. It is embodied in the 1987 Constitution not merely to be used as a guideline for future legislation but primarily to be enforced; so must it be enforced. This Court as the ultimate guardian of the Constitution will never shun, under any reasonable circumstance, the duty of upholding the majesty of the Constitution which it is tasked to defend. It is worth emphasizing that it is not the intention of this Court to impede and diminish, much less undermine, the influx of foreign investments. Far from it, the Court encourages and welcomes more business opportunities but avowedly sanctions the preference for Filipinos whenever such preference is ordained by the Constitution. The position of the Court on this matter could have not been more appropriately articulated by Chief Justice Narvasa As scrupulously as it has tried to observe that it is not its function to substitute its judgment for that of the legislature or the executive about the wisdom and feasibility of legislation economic in nature, the Supreme Court has not been spared criticism for decisions perceived as obstacles to economic progress and development . . . in connection with a temporary injunction issued by the Court's First Division against the sale of the Manila Hotel to a Malaysian Firm and its partner, certain statements were published in a major daily to the effect that injunction "again demonstrates that the Philippine legal system can be a major obstacle to doing business here.
Let it be stated for the record once again that while it is no business of the Court to intervene in contracts of the kind referred to or set itself up as the judge of whether they are viable or attainable, it is its bounden duty to make sure that they do not violate the Constitution or the laws, or are not adopted or implemented with grave abuse of discretion amounting to lack or excess of jurisdiction. It will never shirk that duty, no matter how buffeted by winds of unfair and ill-informed criticism. 48

Privatization of a business asset for purposes of enhancing its business viability and preventing further losses, regardless of the character of the asset, should not take precedence over non-material values. A commercial, nay even a budgetary, objective should not be pursued at the expense of national pride and dignity. For the Constitution enshrines higher and nobler non-material values. Indeed, the Court will always defer to the Constitution in the proper governance of a free society; after all, there is nothing so sacrosanct in any economic policy as to draw itself beyond judicial review when the Constitution is involved. 49 Nationalism is inherent, in the very concept of the Philippines being a democratic and republican state, with sovereignty residing in the Filipino people and from whom all government authority emanates. In nationalism, the happiness and welfare of the people must be the goal. The nation-state can have no higher purpose. Any interpretation of any constitutional provision must adhere to such basic concept. Protection of foreign investments, while laudible, is merely a policy. It cannot override the demands of nationalism. 50 The Manila Hotel or, for that matter, 51% of the MHC, is not just any commodity to be sold to the highest bidder solely for the sake of privatization. We are not talking about an ordinary piece of property in a commercial district. We are talking about a historic relic that has hosted many of the most important events in the short history of the Philippines as a nation. We are talking about a hotel where heads of states would prefer to be housed as a strong manifestation of their desire to cloak the dignity of the highest state function to their official visits to the Philippines. Thus the Manila Hotel has played and continues to play a significant role as an authentic repository of twentieth century Philippine history and culture. In this sense, it has become truly a reflection of the Filipino soul a place with a history of grandeur; a most historical setting that has played a part in the shaping of a country. 51 This Court cannot extract rhyme nor reason from the determined efforts of respondents to sell the historical landmark this Grand Old Dame of hotels in Asia to a total stranger. For, indeed, the conveyance of this epic exponent of the Filipino psyche to alien hands cannot be less than mephistophelian for it is, in whatever

manner viewed, a veritable alienation of a nation's soul for some pieces of foreign silver. And so we ask: What advantage, which cannot be equally drawn from a qualified Filipino, can be gained by the Filipinos Manila Hotel and all that it stands for is sold to a non-Filipino? How much of national pride will vanish if the nation's cultural heritage is entrusted to a foreign entity? On the other hand, how much dignity will be preserved and realized if the national patrimony is safekept in the hands of a qualified, zealous and wellmeaning Filipino? This is the plain and simple meaning of the Filipino First Policy provision of the Philippine Constitution. And this Court, heeding the clarion call of the Constitution and accepting the duty of being the elderly watchman of the nation, will continue to respect and protect the sanctity of the Constitution. WHEREFORE, respondents GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE COUNSEL are directed to CEASE and DESIST from selling 51% of the shares of the Manila Hotel Corporation to RENONG BERHAD, and to ACCEPT the matching bid of petitioner MANILA PRINCE HOTEL CORPORATION to purchase the subject 51% of the shares of the Manila Hotel Corporation at P44.00 per share and thereafter to execute the necessary clearances and to do such other acts and deeds as may be necessary for purpose. SO ORDERED. Regalado, Davide, Jr., Romero, Hermosisima, Jr., JJ., concur. Kapunan, Francisco and

Separate Opinions

PADILLA, J., concurring:

I concur with the ponencia of Mr. Justice Bellosillo. At the same time, I would like to expound a bit more on the concept of national patrimony as including within its scope and meaning institutions such as the Manila Hotel. It is argued by petitioner that the Manila Hotel comes under "national patrimony" over which qualified Filipinos have the preference, in ownership and operation. The Constitutional provision on point states: xxx xxx xxx
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall Give preference to qualified Filipinos. 1

Petitioner's argument, I believe, is well taken. Under the 1987 Constitution, "national patrimony" consists of the natural resources provided by Almighty God (Preamble) in our territory (Article I) consisting of land, sea, and air. 2 study of the 1935 Constitution, where the concept of "national patrimony" originated, would show that its framers decided to adopt the even more comprehensive expression "Patrimony of the Nation" in the belief that the phrase encircles a concept embracing not only their natural resources of the country but practically everything that belongs to the Filipino people, the tangible and the material as well as the intangible and the spiritual assets and possessions of the people. It is to be noted that the framers did not stop with conservation. They knew that conservation alone does not spell progress; and that this may be achieved only through development as a correlative factor to assure to the people not only the exclusive ownership, but also the exclusive benefits of their national patrimony). 3 Moreover, the concept of national patrimony has been viewed as referring not only to our rich natural resources but also to the cultural heritage of our race. 4 There is no doubt in my mind that the Manila Hotel is very much a part of our national patrimony and, as such, deserves constitutional protection as to who shall own it and benefit from its operation. This institution has played an important role in our nation's history, having

been the venue of many a historical event, and serving as it did, and as it does, as the Philippine Guest House for visiting foreign heads of state, dignitaries, celebrities, and others. 5 It is therefore our duty to protect and preserve it for future generations of Filipinos. As President Manuel L. Quezon once said, we must exploit the natural resources of our country, but we should do so with. an eye to the welfare of the future generations. In other words, the leaders of today are the trustees of the patrimony of our race. To preserve our national patrimony and reserve it for Filipinos was the intent of the distinguished gentlemen who first framed our Constitution. Thus, in debating the need for nationalization of our lands and natural resources, one expounded that we should "put more teeth into our laws, and; not make the nationalization of our lands and natural resources a subject of ordinary legislation but of constitutional enactment" 6 To quote further: "Let not our children be mere tenants and trespassers in their own country. Let us preserve and bequeath to them what is rightfully theirs, free from all foreign liens and encumbrances". 7 Now, a word on preference. In my view "preference to qualified Filipinos", to be meaningful, must refer not only to things that are peripheral, collateral, or tangential. It must touch and affect the very "heart of the existing order." In the field of public bidding in the acquisition of things that pertain to the national patrimony, preference to qualified Filipinos must allow a qualified Filipino to match or equal the higher bid of a non-Filipino; the preference shall not operate only when the bids of the qualified Filipino and the non-Filipino are equal in which case, the award should undisputedly be made to the qualified Filipino. The Constitutional preference should give the qualified Filipino an opportunity to match or equal the higher bid of the non-Filipino bidder if the preference of the qualified Filipino bidder is to be significant at all. It is true that in this present age of globalization of attitude towards foreign investments in our country, stress is on the elimination of barriers to foreign trade and investment in the country. While government agencies, including the courts should re-condition their thinking to such a trend, and make it easy and even attractive for foreign investors to come to our shores, yet we should not preclude

ourselves from reserving to us Filipinos certain areas where our national identity, culture and heritage are involved. In the hotel industry, for instance, foreign investors have established themselves creditably, such as in the Shangri-La, the Nikko, the Peninsula, and Mandarin Hotels. This should not stop us from retaining 51% of the capital stock of the Manila Hotel Corporation in the hands of Filipinos. This would be in keeping with the intent of the Filipino people to preserve our national patrimony, including our historical and cultural heritage in the hands of Filipinos. VITUG, J., concurring: I agree with Mr. Justice Josue N. Bellosillo on his clear-cut statements, shared by Mr. Justice Reynato S. Puno in a well written separate (dissenting) opinion, that: First, the provision in our fundamental law which provides that "(I)n the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos" 1 is self-executory. The provision verily does not need, although it can obviously be amplified or regulated by, an enabling law or a set of rules. Second, the term "patrimony" does not merely refer to the country's natural resources but also to its cultural heritage. A "historical landmark," to use the words of Mr. Justice Justo P. Torres, Jr., Manila Hotel has now indeed become part of Philippine heritage. Third, the act of the Government Service Insurance System ("GSIS"), a government entity which derives its authority from the State, in selling 51% of its share in MHC should be considered an act of the State subject to the Constitutional mandate. On the pivotal issue of the degree of "preference to qualified Filipinos," I find it somewhat difficult to take the same path traversed by the forceful reasoning of Justice Puno. In the particular case before us, the only meaningful preference, it seems, would really be to allow the qualified Filipino to match the foreign bid for, as a particular matter, I cannot see any bid that literally calls for millions of dollars to be at par (to the last cent) with another. The magnitude of the magnitude of the bids is such that it becomes hardly possible for

the competing bids to stand exactly "equal" which alone, under the dissenting view, could trigger the right of preference. It is most unfortunate that Renong Berhad has not been spared this great disappointment, a letdown that it did not deserve, by a simple and timely advise of the proper rules of bidding along with the peculiar constitutional implications of the proposed transaction. It is also regrettable that the Court at time is seen, to instead, be the refuge for bureaucratic inadequate which create the perception that it even takes on non-justiciable controversies. All told, I am constrained to vote for granting the petition. MENDOZA, J., concurring in the judgment: I take the view that in the context of the present controversy the only way to enforce the constitutional mandate that "[i]n the grant of rights, privileges and concessions covering the national patrimony the State shall give preference to qualified Filipinos" 1 is to allow petitioner Philippine corporation to equal the bid of the Malaysian firm Renong Berhad for the purchase of the controlling shares of stocks in the Manila Hotel Corporation. Indeed, it is the only way a qualified Filipino of Philippine corporation can be given preference in the enjoyment of a right, privilege or concession given by the State, by favoring it over a foreign national corporation. Under the rules on public bidding of the Government Service and Insurance System, if petitioner and the Malaysian firm had offered the same price per share, "priority [would be given] to the bidder seeking the larger ownership interest in MHC," 2 so that petitioner bid for more shares, it would be preferred to the Malaysian corporation for that reason and not because it is a Philippine corporation. Consequently, it is only in cases like the present one, where an alien corporation is the highest bidder, that preferential treatment of the Philippine corporation is mandated not by declaring it winner but by allowing it "to match the highest bid in terms of price per share" before it is awarded the shares of stocks. 3 That, to me, is what "preference to qualified Filipinos" means in the context of this case by favoring Filipinos whenever they are at a disadvantage vis-a-vis foreigners. This was the meaning given in Co Chiong v. Cuaderno 4 to a 1947

statute giving "preference to Filipino citizens in the lease of public market stalls." 5 This Court upheld the cancellation of existing leases covering market stalls occupied by persons who were not Filipinos and the award thereafter of the stalls to qualified Filipino vendors as ordered by the Department of Finance. Similarly, in Vda. de Salgado v. De la Fuente, 6 this Court sustained the validity of a municipal ordinance passed pursuant to the statute (R.A. No. 37), terminating existing leases of public market stalls and granting preference to Filipino citizens in the issuance of new licenses for the occupancy of the stalls. In Chua Lao v. Raymundo, 7 the preference granted under the statute was held to apply to cases in which Filipino vendors sought the same stalls occupied by alien vendors in the public markets even if there were available other stalls as good as those occupied by aliens. "The law, apparently, is applicable whenever there is a conflict of interest between Filipino applicants and aliens for lease of stalls in public markets, in which situation the right to preference immediately arises." 8 Our legislation on the matter thus antedated by a quarter of a century efforts began only in the 1970s in America to realize the promise of equality, through affirmative action and reverse discrimination programs designed to remedy past discrimination against colored people in such areas as employment, contracting and licensing. 9 Indeed, in vital areas of our national economy, there are situations in which the only way to place Filipinos in control of the national economy as contemplated in the Constitution 10 is to give them preferential treatment where they can at least stand on equal footing with aliens. There need be no fear that thus preferring Filipinos would either invite foreign retaliation or deprive the country of the benefit of foreign capital or know-how. We are dealing here not with common trades of common means of livelihood which are open to aliens in our midst, 11 but with the sale of government property, which is like the grant of government largess of benefits and concessions covering the national economy" and therefore no one should begrudge us if we give preferential treatment to our citizens. That at any rate is the command of the Constitution. For the Manila Hotel is a business owned by the Government. It is being privatized. Privatization should result in the relinquishment of the business in favor of private

individuals and groups who are Filipino citizens, not in favor of aliens. Nor should there be any doubt that by awarding the shares of stocks to petitioner we would be trading competence and capability for nationalism. Both petitioner and the Malaysian firm are qualified, having hurdled the prequalification process. 12 It is only the result of the public bidding that is sought to be modified by enabling petitioner to up its bid to equal the highest bid. Nor, finally, is there any basis for the suggestion that to allow a Filipino bidder to match the highest bid of an alien could encourage speculation, since all that a Filipino entity would then do would be not to make a bid or make only a token one and, after it is known that a foreign bidder has submitted the highest bid, make an offer matching that of the foreign firm. This is not possible under the rules on public bidding of the GSIS. Under these rules there is a minimum bid required (P36.87 per share for a range of 9 to 15 million shares). 13 Bids below the minimum will not be considered. On the other hand, if the Filipino entity, after passing the prequalification process, does not submit a bid, he will not be allowed to match the highest bid of the foreign firm because this is a privilege allowed only to those who have "validly submitted bids." 14 The suggestion is, to say the least, fanciful and has no basis in fact. For the foregoing reasons, I vote to grant the petition. TORRES, JR., J., separate opinion: Constancy in law is not an attribute of a judicious mind. I say this as we are not confronted in the case at bar with legal and constitutional issues and yet I am driven so to speak on the side of history. The reason perhaps is due to the belief that in the words of Justice Oliver Wendell Holmes, Jr., a "page of history is worth a volume of logic." I will, however, attempt to share my thoughts on whether the Manila Hotel has a historical and cultural aspect within the meaning of the constitution and thus, forming part of the "patrimony of the nation". Section 10, Article XII of the 1987 Constitution provides: xxx xxx xxx

In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. The State shall regulate and exercise authority over foreign investments within its national goals and priorities. The foregoing provisions should be read in conjunction with Article II of the same Constitution pertaining to "Declaration of Principles and State Policies" which ordain The State shall develop a self-reliant and independent national economy effectively by Filipinos. (Sec. 19). Interestingly, the matter of giving preference to "qualified Filipinos" was one of the highlights in the 1987 Constitution Commission proceedings thus: xxx xxx xxx MR. NOLLEDO. The Amendment will read: "IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS". And the word "Filipinos" here, as intended by the proponents, will include not only individual Filipinos but also Filipino-Controlled entities fully controlled by Filipinos (Vol. III, Records of the Constitutional Commission, p. 608). MR. MONSOD. We also wanted to add, as Commissioner Villegas said, this committee and this body already approved what is known as the Filipino First policy which was suggested by Commissioner de Castro. So that it is now in our Constitution (Vol. IV, Records of the Constitutional Commission, p. 225). Commissioner Jose Nolledo explaining the provision adverted to above, said: MR. NOLLEDO. In the grant of rights, privileges and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.

MR. FOZ. In connection with that amendment, if a foreign enterprise is qualified and the Filipinos enterprise is also qualified, will the Filipino enterprise still be given a preference? MR. NOLLEDO. Obviously. MR. FOZ. If the foreigner is more qualified in some aspects than the Filipino enterprise, will the Filipino still be preferred:? MR. NOLLEDO. The answer is "yes". (Vol. III, p. 616, Records of the Constitutional Commission). The nationalistic provisions of the 1987 Constitution reflect the history and spirit of the Malolos Constitution of 1898, the 1935 Constitution and the 1973 Constitutions. That we have no reneged on this nationalist policy is articulated in one of the earliest case, this Court said The nationalistic tendency is manifested in various provisions of the Constitution. . . . It cannot therefore be said that a law imbued with the same purpose and spirit underlying many of the provisions of the Constitution is unreasonable, invalid or unconstitutional (Ichong, et al. vs. Hernandez, et al., 101 Phil. 1155). I subscribe to the view that history, culture, heritage, and traditions are not legislated and is the product of events, customs, usages and practices. It is actually a product of growth and acceptance by the collective mores of a race. It is the spirit and soul of a people. The Manila Hotel is part of our history, culture and heritage. Every inch of the Manila Hotel is witness to historic events (too numerous to mention) which shaped our history for almost 84 years. As I intimated earlier, it is not my position in this opinion, to examine the single instances of the legal largese which have given rise to this controversy. As I believe that has been exhaustively discussed in the ponencia. Suffice it to say at this point that the history of the Manila Hotel should not be placed in the auction block of a purely business transaction, where profits subverts the cherished historical values of our people.

As a historical landmark in this "Pearl of the Orient Seas", it has its enviable tradition which, in the words of the philosopher Salvador de Madarriaga tradition is "more of a river than a stone, it keeps flowing, and one must view the flowing , and one must view the flow of both directions. If you look towards the hill from which the river flows, you see tradition in the form of forceful currents that push the river or people towards the future, and if you look the other way, you progress." Indeed, tradition and progress are the same, for progress depends on the kind of tradition. Let us not jettison the tradition of the Manila Hotel and thereby repeat our colonial history. I grant, of course the men of the law can see the same subject in different lights. I remember, however, a Spanish proverb which says "He is always right who suspects that he makes mistakes". On this note, I say that if I have to make a mistake, I would rather err upholding the belief that the Filipino be first under his Constitution and in his own land. I vote GRANT the petition.

PUNO, J., dissenting: This is a. petition for prohibition and mandamus filed by the Manila Prince Hotel Corporation, a domestic corporation, to stop the Government Service Insurance System (GSIS) from selling the controlling shares of the Manila Hotel Corporation to a foreign corporation. Allegedly, the sale violates the second paragraph of section 10, Article XII of the Constitution. Respondent GSIS is a government-owned and controlled corporation. It is the sole owner of the Manila Hotel which it operates through its subsidiary, the Manila Hotel Corporation. Manila Hotel was included in the privatization program of the government. In 1995, GSIS proposed to sell to interested buyers 30% to 51% of its shares, ranging from 9,000,000 to 15,300,000 shares, in the Manila Hotel Corporation. After the absence of bids at the first public bidding, the

block of shares offered for sale was increased from a maximum of 30% to 51%. Also, the winning bidder, or the eventual "strategic partner" of the GSIS was required to "provide management expertise and/or an international marketing/reservation system, and financial support to strengthen the profitability and performance of the Manila Hotel" 1 The proposal was approved by respondent Committee on Privatization. In July 1995, a conference was held where prequalification documents and the bidding rules were furnished interested parties. Petitioner Manila Prince Hotel, a domestic corporation, and Renong Berhad, Malaysian firm with ITT Sheraton as operator, prequalified. 2 The bidding rules and procedures entitled "Guidelines and Procedures: Second Prequalification and Public Bidding of the MHC Privatization" provide: I INTRODUCTION AND HIGHLIGHTS DETERMINING THE WINNING BIDDER/STRATEGIC PARTNER The party that accomplishes the steps set forth below will be declared the Winning Bidder/Strategic Partner and will be awarded the Block of Shares: First Pass the prequalification process; Second Submit the highest bid on a price per share basis for the Block of Shares; Third Negotiate and execute the necessary contracts with GSIS/MHC not later than October 23, 1995; xxx xxx xxx IV GUIDELINES FOR PREQUALIFICATION A. PARTIES WHO MAP APPLY FOR PREQUALIFICATION The Winning Bidder/Strategic Partner will be expected to provide management expertise and/or an international marketing reservation

system, and financial support to strengthen the profitability and performance of The Manila Hotel. In this context, the GSIS is inviting to the prequalification process any local and/or foreign corporation, consortium/joint venture or juridical entity with at least one of the following qualifications: a. Proven management .expertise in the hotel industry; or b. Significant equity ownership (i.e. board representation) in another hotel company; or c. Overall management and marketing expertise to successfully operate the Manila Hotel. Parties interested in bidding for MHC should be able to provide access to the requisite management expertise and/or international marketing/reservation system for The Manila Hotel. xxx xxx xxx D. PREQUALIFICATION DOCUMENTS xxx xxx xxx E. APPLICATION PROCEDURE 1. DOCUMENTS AVAILABLE AT THE REGISTRATION OFFICE The prequalification documents can be secured at the Registration Office between 9:00 AM to 4:00 PM during working days within the period specified in Section III. Each set of documents consists of the following: a. Guidelines and Procedures: Second Prequalification and Public Bidding of the MHC Privatization b. Confidential Corporation Information Memorandum: The Manila Hotel

c. Letter of Invitation. to the Prequalification and Bidding Conference xxx xxx xxx

4. PREQUALIFICATION AND BIDDING CONFERENCE A prequalification and bidding conference will be held at The Manila Hotel on the date specified in Section III to allow the Applicant to seek clarifications and further information regarding the guidelines and procedures. Only those who purchased the prequalification documents will be allowed in this conference. Attendance to this conference is strongly advised, although the Applicant will not be penalized if it does not attend. 5. SUBMISSION OF PREQUALIFICATION DOCUMENTS The applicant should submit 5 sets of the prequalification documents (1 original set plus 4 copies) at the Registration Office between 9:00 AM to 4:00 PM during working days within the period specified in Section III. F. PREQUALIFICATION PROCESS 1. The Applicant will be evaluated by the PBAC with the assistance of the TEC based on the Information Package and other information available to the PBAC. 2. If the Applicant is a Consortium/Joint Venture, the evaluation will consider the overall qualifications of the group, taking into account the contribution of each member to the venture. 3. The decision of the PBAC with respect to the results of the PBAC evaluation will be final. 4. The Applicant shall be evaluated according to the criteria set forth below: a. Business management expertise, track record, and experience b. Financial capability. c. Feasibility and acceptability of the proposed strategic plan for the Manila Hotel 5. The PBAC will shortlist such number of Applicants as it may deem

appropriate. 6. The parties that prequalified in the first MHC public bidding ITT Sheraton, Marriot International Inc., Renaissance Hotels International Inc., consortium of RCBC Capital/Ritz Carlton may participate in the Public Bidding without having to undergo the prequalification process again. G. SHORTLIST OF QUALIFIED BIDDERS 1. A notice of prequalification results containing the shortlist of Qualified Bidders will be posted at the Registration Office at the date specified in Section III. 2. In the case of a Consortium/Joint Venture, the withdrawal by member whose qualification was a material consideration for being included in the shortlist is ground for disqualification of the Applicant. V. GUIDELINES FOR THE PUBLIC BIDDING A. PARTIES WHO MAY PARTICIPATE IN THE PUBLIC BIDDING All parties in the shortlist of Qualified Bidders will be eligible to participate in the Public Bidding. B. BLOCK OF SHARES A range of Nine Million (9,000,000) to Fifteen Million Three Hundred Thousand (15,300,000) shares of stock representing Thirty Percent to Fifty-One Percent (30%-51%) of the issued and outstanding shares of MHC, will be offered in the Public Bidding by the GSIS. The Qualified Bidders will have the Option of determining the number of shares within the range to bid for. The range is intended to attract bidders with different preferences and objectives for the operation and management of The Manila Hotel. C. MINIMUM BID REQUIRED ON A PRICE PER SHARE BASIS 1. Bids will be evaluated on a price per share basis. The minimum bid required on a price per share basis for the Block of Shares is ThirtySix Pesos and Sixty-Seven Centavos (P36.67).

2. Bids should be in the Philippine currency payable to the GSIS. 3. Bids submitted with an equivalent price per share below the minimum required will not considered. D. TRANSFER COSTS xxx xxx xxx E. OFFICIAL BID FORM 1. Bids must be contained in the prescribed Official Bid Form, a copy of which is attached as Annex IV. The Official Bid Form must be properly accomplished in all details; improper accomplishment may be a sufficient basis for disqualification. 2. During the Public Bidding, the Qualified Bidder will submit the Official Bid Form, which will indicate the offered purchase price, in a sealed envelope marked "OFFICIAL BID." F. SUPPORTING DOCUMENTS During the Public Bidding, the following documents should be submitted along with the bid in a separate envelop marked "SUPPORTING DOCUMENTS": 1. WRITTEN AUTHORITY TO BID (UNDER OATH). If the Qualified Bidder is a corporation, the representative of the Qualified Bidder should submit a Board resolution which adequately authorizes such representative to bid for and in behalf of the corporation with full authority to perform such acts necessary or requisite to bind the Qualified Bidder. If the Qualified Bidder is a Consortium/Joint Venture, each member of the Consortium/Joint venture should submit a Board resolution authorizing one of its members and such member's representative to make the bid on behalf of the group with full authority to perform such acts necessary or requisite to bind the Qualified Bidder. 2. BID SECURITY

a. The Qualified Bidder should deposit Thirty-Three Million Pesos (P33,000,00), in Philippine currency as Bid Security in the form of: i. Manager's check or unconditional demand draft payable to the "Government Service Insurance System" and issued by a reputable banking institution duly licensed to do business in the Philippines and acceptable to GSIS; or ii. Standby-by letter of credit issued by a reputable banking institution acceptable to the GSIS. b. The GSIS will reject a bid if: i. The bid does not have Bid Security; or ii. The Bid Security accompanying the bid is for less than the required amount. c. If the Bid Security is in the form of a manager's check or unconditional demand draft, the interest earned on the Bid Security will be for the account of GSIS. d. If the Qualified Bidder becomes the winning Bidder/Strategic Partner, the Bid Security will be applied as the downpayment on the Qualified Bidder's offered purchase price. e. The Bid Security of the Qualified Bidder will be returned immediately after the Public Bidding if the Qualified Bidder is not declared the Highest Bidder. f. The Bid Security will be returned by October 23, 1995 if the Highest Bidder is unable to negotiate and execute with GSIS/MHC the Management Contract, International Marketing/Reservation System Contract or other types of contract specified by the Highest Bidder in its strategic plan for The Manila Hotel. g. The Bid Security of the Highest Bidder will be forfeited in favor of GSIS if the Highest Bidder, after negotiating and executing the Management Contract, International Marketing/Reservation System Contract specified by the Highest Bidder or other types of contract in its strategic plan for The Manila Hotel, fails or refuses to:

i. Execute the Stock Purchase and Sale Agreement with GSIS not later than October 23, 1995; or ii. Pay the full amount of the offered purchase price not later than October 23, 1995; or iii. Consummate the sale of the Block of Shares for any other reason. G. SUBMISSION OF BIDS 1. The Public Bidding will be held on September 7, 1995 at the following location: New GSIS Headquarters Building Financial Center, Reclamation Area Roxas Boulevard, Pasay City, Metro Manila. 2. The Secretariat of the PBAC will be stationed at the Public Bidding to accept any and all bids and supporting requirements. Representatives from the Commission on Audit and COP will be invited to witness the proceedings. 3. The Qualified Bidder should submit its bid using the Official Bid Form. The accomplished Official Bid Form should be submitted in a sealed envelope marked "OFFICIAL BID." 4. The Qualified Bidder should submit the following documents in another sealed envelope marked "SUPPORTING BID DOCUMENTS" a. Written Authority Bid b. Bid Security 5. The two sealed envelopes marked "OFFICIAL BID" and "SUPPORTING BID DOCUMENTS" must be submitted simultaneously to the Secretariat between 9:00 AM and 2:00 PM, Philippine Standard Time, on the date of the Public Bidding. No bid shall be accepted after the closing time. Opened or tampered bids shall not be accepted. 6. The Secretariat will log and record the actual time of submission of the two sealed envelopes. The actual time of submission will also be

indicated by the Secretariat on the face of the two envelopes. 7. After Step No. 6, the two sealed envelopes will be dropped in the corresponding bid boxes provided for the purpose. These boxes will be in full view of the invited public. H. OPENING AND READING OF BIDS 1. After the closing time of 2:00 PM on the date of the Public Bidding, the PBAC will open all sealed envelopes marked "SUPPORTING BID DOCUMENTS" for screening, evaluation and acceptance. Those who submitted incomplete/insufficient documents or document/s which is/are not substantially in the form required by PBAC will be disqualified. The envelope containing their Official Bid Form will be immediately returned to the disqualified bidders. 2. The sealed envelopes marked "OFFICIAL BID" will be opened at 3:00 PM. The name of the bidder and the amount of its bid price will be read publicly as the envelopes are opened. 3. Immediately following the reading of the bids, the PBAC will formally announce the highest bid and the Highest Bidder. 4. The highest bid will be, determined on a price per share basis. In the event of a tie wherein two or more bids have the same equivalent price per share, priority will be given to the bidder seeking the larger ownership interest in MHC. 5. The Public Bidding will be declared a failed bidding in case: a. No single bid is submitted within the prescribed period; or b. There is only one (1) bid that is submitted and acceptable to the PBAC. I. EXECUTION GSIS/MHC OF THE NECESSARY CONTRACTS WITH

1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 or the Highest Bidder will lose the right to purchase the Block of Shares and GSIS will instead offer the Block of

Shares to the other Qualified Bidders: a. The Highest Bidder must negotiate and execute with GSIS/MHC the Management Contract, International Marketing Reservation System Contract or other type of contract specified by the Highest Bidder in its strategic plan for The Manila Hotel. If the Highest Bidder is intending to provide only financial support to The Manila Hotel, a separate institution may enter into the aforementioned contract/s with GSIS/MHC. b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS, a copy of which will be distributed to each of the Qualified Bidder after the prequalification process is completed. 2. In the event that the Highest Bidder chooses a Management Contract for The Manila Hotel, the maximum levels for the management fee structure that GSIS/MHC are prepared to accept in the Management Contract are as follows: a. Basic management fee: Maximum of 2.5% of gross revenues.(1) b. Incentive fee: Maximum of 8.0% of gross operating profit(1) after deducting undistributed overhead expenses and the basic management fee. c. Fixed component of the international marketing/reservation system fee: Maximum of 2.0% of gross room revenues.(1) The Applicant should indicate in its Information Package if it is wishes to charge this fee. Note (1): As defined in the uniform system of account for hotels. The GSIS/MHC have indicated above the acceptable parameters for the hotel management fees to facilitate the negotiations with the Highest Bidder for the Management Contract after the Public Bidding. A Qualified Bidder envisioning a Management Contract for The Manila Hotel should determine whether or not the management fee structure above is acceptable before submitting their prequalification documents to GSIS.

J. BLOCK SALE TO THE OTHER QUALIFIED BIDDERS 1. If for any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids provided that these Qualified are willing to match the highest bid in terms of price per share. 2. The order of priority among the interested Qualified Bidders will be in accordance wit the equivalent price per share of their respective bids in their public Bidding, i.e., first and second priority will be given to the Qualified Bidders that submitted the second and third highest bids on the price per share basis, respectively, and so on. K. DECLARATION PARTNER OF THE WINNING BIDDER/STRATEGIC

The Highest Bidder will be declared the Winning Bidder/Strategic Partner after the following conditions are met: a. Execution of the necessary contract with GSIS/MHC not later than October 23, 1995; and b. Requisite approvals from the GSIS/MHC and COP/OGCC are obtained. I. FULL PAYMENT FOR THE BLOCK OF SHARES 1. Upon execution of the necessary contracts with GSIS/MHC, the Winning Bidder/Strategic Partner must fully pay, not later than October 23, 1995, the offered purchase price for the Block of Shares after deducting the Bid Security applied as downpayment. 2. All payments should be made in the form of a Manager's Check or unconditional Demand Draft, payable to the "Government Service Insurance System," issued by a reputable banking institution licensed to do business in the Philippines and acceptable to GSIS. M. GENERAL CONDITIONS 1. The GSIS unconditionally reserves the right to reject any or all applications, waive any formality therein, or accept such application

as maybe considered most advantageous to the GSIS. The GSIS similarly reserves the right to require the submission of any additional information from the Applicant as the PBAC may deem necessary. 2. The GSIS further reserves the right to call off the Public Bidding prior to acceptance of the bids and call for a new public bidding under amended rules, and without any liability whatsoever to any or all the Qualified Bidders, except the obligation to return the Bid Security. 3. The GSIS reserves the right to reset the date of the prequalification/bidding conference, the deadline for the submission of the prequalification documents, the date of the Public Bidding or other pertinent activities at least three (3) calendar days prior to the respective deadlines/target dates. 4. The GSIS sells only whatever rights, interest and participation it has on the Block of Shares. 5. All documents and materials submitted by the Qualified Bidders, except the Bid Security, may be returned upon request. 6. The decision of the PBAC/GSIS on the results of the Public Bidding is final. The Qualified Bidders, by participating in the Public Bidding, are deemed to have agreed to accept and abide by these results.
7. The GSIS will be held free and harmless form any liability, suit or allegation arising out of the Public Bidding by the Qualified Bidders who have participated in the Public Bidding. 3

The second public bidding was held on September 18, 1995. Petitioner bidded P41.00 per share for 15,300,000 shares and Renong Berhad bidded P44.00 per share also for 15,300,000 shares. The GSIS declared Renong Berhad the highest bidder and immediately returned petitioner's bid security. On September 28, 1995, ten days after the bidding, petitioner wrote to GSIS offering to match the bid price of Renong Berhad. It requested that the award be made to itself citing the second paragraph of Section 10, Article XII of the Constitution. It sent a manager's check for thirty-three million pesos (P33,000,000.00) as

bid security. Respondent GSIS, then in the process of negotiating with Renong Berhad the terms and conditions of the contract and technical agreements in the operation of the hotel, refused to entertain petitioner's request. Hence, petitioner filed the present petition. We issued a temporary restraining order on October 18, 1995. Petitioner anchors its plea on the second paragraph of Article XII, Section 10 of the Constitution 4 on the "National Economy and Patrimony" which provides: xxx xxx xxx In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. xxx xxx xxx The vital issues can be summed up as follows: (1) Whether section 10, paragraph 2 of Article XII of the Constitution is a self-executing provision and does not need implementing legislation to carry it into effect; (2) Assuming section 10 paragraph 2 of Article XII is self-executing whether the controlling shares of the Manila Hotel Corporation form part of our patrimony as a nation; (3) Whether GSIS is included in the term "State," hence, mandated to implement section 10, paragraph 2 of Article XII of the Constitution; (4) Assuming GSIS is part of the State, whether it failed to give preference to petitioner, a qualified Filipino corporation, over and above Renong Berhad, a foreign corporation, in the sale of the controlling shares of the Manila Hotel Corporation; (5) Whether petitioner is estopped from questioning the sale of the

shares to Renong Berhad, a foreign corporation. Anent the first issue, it is now familiar learning that a Constitution provides the guiding policies and principles upon which is built the substantial foundation and general framework of the law and government. 5 As a rule, its provisions are deemed self-executing and can be enforced without further legislative action. 6 Some of its provisions, however, can be implemented only through appropriate laws enacted by the Legislature, hence not self-executing. To determine whether a particular provision of a Constitution is selfexecuting is a hard row to hoe. The key lies on the intent of the framers of the fundamental law oftentimes submerged in its language. A searching inquiry should be made to find out if the provision is intended as a present enactment, complete in itself as a definitive law, or if it needs future legislation for completion and enforcement. 7 The inquiry demands a micro-analysis of the text and the context of the provision in question. 8 Courts as a rule consider the provisions of the Constitution as selfexecuting, 9 rather than as requiring future legislation for their enforcement. 10 The reason is not difficult to discern. For if they are not treated as self-executing, the mandate of the fundamental law ratified by the sovereign people can be easily ignored and nullified by Congress. 11 Suffused with wisdom of the ages is the unyielding rule that legislative actions may give breath to constitutional rights but congressional in action should not suffocate them. 12 Thus, we have treated as self-executing the provisions in the Bill of Rights on arrests, searches and seizures, 13 the rights of a person under custodial investigation, 14 the rights of an accused, 15 and the privilege against self-incrimination, 16 It is recognize a that legislation is unnecessary to enable courts to effectuate constitutional provisions guaranteeing the fundamental rights of life, liberty and the protection of property. 17 The same treatment is accorded to constitutional provisions forbidding the taking or damaging of property for public use without just compensation. 18 Contrariwise, case law lays down the rule that a constitutional provision is not self-executing where it merely announces a policy

and its language empowers the Legislature to prescribe the means by which the policy shall be carried into effect. 19 Accordingly, we have held that the provisions in Article II of our Constitution entitled "Declaration of Principles and State Policies" should generally be construed as mere statements of principles of the State. 20 We have also ruled that some provisions of Article XIII on "Social Justice and Human Rights," 21 and Article XIV on "Education Science and Technology, Arts, Culture end Sports" 22 cannot be the basis of judicially enforceable rights. Their enforcement is addressed to the discretion of Congress though they provide the framework for legislation 23 to effectuate their policy content. 24 Guided by this map of settled jurisprudence, we now consider whether Section 10, Article XII of the 1987 Constitution is selfexecuting or not. It reads: Sec. 10. The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos. In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities. The first paragraph directs Congress to reserve certain areas of investments in the country 25 to Filipino citizens or to corporations sixty per cent 26 of whose capital stock is owned by Filipinos. It further commands Congress to enact laws that will encourage the formation and operation of one hundred percent Filipino-owned enterprises. In checkered contrast, the second paragraph orders the entire State to give preference to qualified Filipinos in the grant of rights and

privileges covering the national economy and patrimony. The third paragraph also directs the State to regulate foreign investments in line with our national goals and well-set priorities. The first paragraph of Section 10 is not self-executing. By its express text, there is a categorical command for Congress to enact laws restricting foreign ownership in certain areas of investments in the country and to encourage the formation and operation of whollyowned Filipino enterprises. The right granted by the provision is clearly still in esse. Congress has to breathe life to the right by means of legislation. Parenthetically, this paragraph was plucked from section 3, Article XIV of the 1973 Constitution. 27 The provision in the 1973 Constitution affirmed our ruling in the landmark case of Lao Ichong v. Hernandez, 28 where we upheld the discretionary authority of Congress to Filipinize certain areas of investments. 29 By reenacting the 1973 provision, the first paragraph of section 10 affirmed the power of Congress to nationalize certain areas of investments in favor of Filipinos. The second and third paragraphs of Section 10 are different. They are directed to the State and not to Congress alone which is but one of the three great branches of our government. Their coverage is also broader for they cover "the national economy and patrimony" and "foreign investments within [the] national jurisdiction" and not merely "certain areas of investments." Beyond debate, they cannot be read as granting Congress the exclusive power to implement by law the policy of giving preference to qualified Filipinos in the conferral of rights and privileges covering our national economy and patrimony. Their language does not suggest that any of the State agency or instrumentality has the privilege to hedge or to refuse its implementation for any reason whatsoever. Their duty to implement is unconditional and it is now. The second and the third paragraphs of Section 10, Article XII are thus self-executing. This submission is strengthened by Article II of the Constitution entitled "Declaration of Principles and State Policies." Its Section 19 provides that "[T]he State shall develop a self-reliant and independent national economy effectively controlled by Filipinos." It engrafts the all-important Filipino First policy in our fundamental law and by the use of the mandatory word "shall," directs its enforcement by the

whole State without any pause or a half- pause in time. The second issue is whether the sale of a majority of the stocks of the Manila Hotel Corporation involves the disposition of part of our national patrimony. The records of the Constitutional Commission show that the Commissioners entertained the same view as to its meaning. According to Commissioner Nolledo, "patrimony" refers not only to our rich natural resources but also to the cultural heritage of our race. 30 By this yardstick, the sale of Manila Hotel falls within the coverage of the constitutional provision giving preferential treatment to qualified Filipinos in the grant of rights involving our national patrimony. The unique value of the Manila Hotel to our history and culture cannot be viewed with a myopic eye. The value of the hotel goes beyond pesos and centavos. As chronicled by Beth Day Romulo, 31 the hotel first opened on July 4, 1912 as a first-class hotel built by the American Insular Government for Americans living in, or passing through, Manila while traveling to the Orient. Indigenous materials and Filipino craftsmanship were utilized in its construction, For sometime, it was exclusively used by American and Caucasian travelers and served as the "official guesthouse" of the American Insular Government for visiting foreign dignitaries. Filipinos began coming to the Hotel as guests during the Commonwealth period. When the Japanese occupied Manila, it served as military headquarters and lodging for the highest-ranking officers from Tokyo. It was at the Hotel and the Intramuros that the Japanese made their last stand during the Liberation of Manila. After the war, the Hotel again served foreign guests and Filipinos alike. Presidents and kings, premiers and potentates, as well as glamorous international film and sports celebrities were housed in the Hotel. It was also the situs of international conventions and conferences. In the local scene, it was the venue of historic meetings, parties and conventions of political parties. The Hotel has reaped and continues reaping numerous recognitions and awards from international hotel and travel awardgiving bodies, a fitting acknowledgment of Filipino talent and ingenuity. These are judicially cognizable facts which cannot be bent by a biased mind. The Hotel may not, as yet, have been declared a national cultural treasure pursuant to Republic Act No. 4846 but that does not exclude it from our national patrimony. Republic Act No. 4846, "The Cultural

Properties Preservation and Protection Act," merely provides a procedure whereby a particular cultural property may be classified a "national cultural treasure" or an "important cultural property. 32 Approved on June 18, 1966 and amended by P.D. 374 in 1974, the law is limited in its reach and cannot be read as the exclusive law implementing section 10, Article XII of the 1987 Constitution. To be sure, the law does not equate cultural treasure and cultural property as synonymous to the phrase "patrimony of the nation." The third issue is whether the constitutional command to the State includes the respondent GSIS. A look at its charter will reveal that GSIS is a government-owned and controlled corporation that administers funds that come from the monthly contributions of government employees and the government. 33 The funds are held in trust for a distinct purpose which cannot be disposed of indifferently. 34 They are to be used to finance the retirement, disability and life insurance benefits of the employees and the administrative and operational expenses of the GSIS, 35 Excess funds, however, are allowed to be invested in business and other ventures for the benefit of the employees. 36 It is thus contended that the GSIS investment in the Manila Hotel Corporation is a simple business venture, hence, an act beyond the contemplation of section 10, paragraph 2 of Article XII of the Constitution. The submission is unimpressive. The GSIS is not a pure private corporation. It is essentially a public corporation created by Congress and granted an original charter to serve a public purpose. It is subject to the jurisdictions of the Civil Service Commission 37 and the Commission on Audit. 38 As state-owned and controlled corporation, it is skin-bound to adhere to the policies spelled out in the general welfare of the people. One of these policies is the Filipino First policy which the people elevated as a constitutional command. The fourth issue demands that we look at the content of phrase "qualified Filipinos" and their "preferential right." The Constitution desisted from defining their contents. This is as it ought to be for a Constitution only lays down flexible policies and principles which can bent to meet today's manifest needs and tomorrow's unmanifested demands. Only a constitution strung with elasticity can grow as a living constitution.

Thus, during the deliberations in the Constitutional Commission, Commissioner Nolledo to define the phrase brushed aside a suggestion to define the phrase "qualified Filipinos." He explained that present and prospective "laws" will take care of the problem of its interpretation, viz: xxx xxx xxx THE PRESIDENT. What is the suggestion of Commissioner Rodrigo? Is it to remove the word "QUALIFIED?" MR. RODRIGO. No, no, but say definitely "TO QUALIFIED FILIPINOS" as against whom? As against aliens over aliens? MR. NOLLEDO. Madam President, I think that is understood. We use the word "QUALIFIED" because the existing laws or the prospective laws will always lay down conditions under which business map be done, for example, qualifications on capital, qualifications on the setting up of other financial structures, et cetera. MR. RODRIGO. It is just a matter of style. MR. NOLLEDO Yes. MR. RODRIGO. If we say, "PREFERENCE TO QUALIFIED FILIPINOS," it can be understood as giving preference to qualified Filipinos as against Filipinos who are not qualified. MR. NOLLEDO. Madam President, that was the intention of the proponents. The committee has accepted the amendment. xxx xxx xxx As previously discussed, the constitutional command to enforce the Filipino First policy is addressed to the State and not to Congress alone. Hence, the word "laws" should not be understood as limited to legislations but all state actions which include applicable rules and regulations adopted by agencies and instrumentalities of the State in the exercise of their rule-making power. In the case at bar, the bidding rules and regulations set forth the standards to measure the qualifications of bidders Filipinos and foreigners alike. It is not

seriously disputed that petitioner qualified to bid as did Renong Berhad. 39 Thus, we come to the critical issue of the degree of preference which GSIS should have accorded petitioner, a qualified Filipino, over Renong Berhad, a foreigner, in the purchase of the controlling shares of the Manila Hotel. Petitioner claims that after losing the bid, this right of preference gives it a second chance to match the highest bid of Renong Berhad. With due respect, I cannot sustain petitioner's submission. I prescind from the premise that the second paragraph of section 10, Article XII of the Constitution is pro-Pilipino but not anti-alien. It is pro-Filipino for it gives preference to Filipinos. It is not, however, anti-alien per se for it does not absolutely bar aliens in the grant of rights, privileges and concessions covering the national economy and patrimony. Indeed, in the absence of qualified Filipinos, the State is not prohibited from granting these rights, privileges and concessions to foreigners if the act will promote the weal of the nation. In implementing the policy articulated in section 10, Article XII of the Constitution, the stellar task of our State policy-makers is to maintain a creative tension between two desiderata first, the need to develop our economy and patrimony with the help of foreigners if necessary, and, second, the need to keep our economy controlled by Filipinos. Rightfully, the framers of the Constitution did not define the degree of the right of preference to be given to qualified Filipinos. They knew that for the right to serve the general welfare, it must have a malleable content that can be adjusted by our policy-makers to meet the changing needs of our people. In fine, the right of preference of qualified Filipinos is to be determined by degree as time dictates and circumstances warrant. The lesser the need for alien assistance, the greater the degree of the right of preference can be given to Filipinos and vice verse. Again, it should be stressed that the right and the duty to determine the degree of this privilege at any given time is addressed to the entire State. While under our constitutional scheme, the right primarily belongs to Congress as the lawmaking department of our government, other branches of government, and all their agencies

and instrumentalities, share the power to enforce this state policy. Within the limits of their authority, they can act or promulgate rules and regulations defining the degree of this right of preference in cases where they have to make grants involving the national economy and judicial duty. On the other hand, our duty is to strike down acts of the state that violate the policy. To date, Congress has not enacted a law defining the degree of the preferential right. Consequently, we must turn to the rules and regulations of on respondents Committee Privatization and GSIS to determine the degree of preference that petitioner is entitled to as a qualified Filipino in the subject sale. A tearless look at the rules and regulations will show that they are silent on the degree of preferential right to be accorded qualified Filipino bidder. Despite their silence, however, they cannot be read to mean that they do not grant any degree of preference to petitioner for paragraph 2, section 10, Article XII of the Constitution is deemed part of said rules and regulations. Pursuant to legal hermeneutics which demand that we interpret rules to save them from unconstitutionality, I submit that the right of preference of petitioner arises only if it tied the bid of Benong Berhad. In that instance, all things stand equal, and bidder, as a qualified Pilipino bidder, should be preferred. It is with deep regret that I cannot subscribe to the view that petitioner has a right to match the bid of Renong Berhad. Petitioner's submission must be supported by the rules but even if we examine the rules inside-out .thousand times, they can not justify the claimed right. Under the rules, the right to match the highest bid arises only "if for any reason, the highest bidder cannot be awarded block of shares . . ." No reason has arisen that will prevent the award to Renong Berhad. It qualified as bidder. It complied with the procedure of bidding. It tendered the highest bid. It was declared as the highest bidder by the GSIS and the rules say this decision is final. It deserves the award as a matter of right for the rules clearly did not give to the petitioner as a qualified Filipino privilege to match the higher bid of a foreigner. What the rules did not grant, petitioner cannot demand. Our symphaties may be with petitioner but the court has no power to extend the latitude and longtitude of the right of preference as defined by the rules. The parameters of the right of preference depend on galaxy of facts and factors whose determination belongs to the

province of the policy-making branches and agencies of the State. We are duty-bound to respect that determination even if we differ with the wisdom of their judgment. The right they grant may be little but we must uphold the grant for as long as the right of preference is not denied. It is only when a State action amounts to a denial of the right that the Court can come in and strike down the denial as unconstitutional. Finally, I submit that petitioner is estopped from assailing the winning bid of Renong Berhad. Petitioner was aware of the rules and regulations of the bidding. It knew that the rules and regulations do not provide that a qualified Filipino bidder can match the winning bid submitting an inferior bid. It knew that the bid was open to foreigners and that foreigners qualified even during the first bidding. Petitioner cannot be allowed to repudiate the rules which it agreed to respect. It cannot be allowed to obey the rules when it wins and disregard them when it loses. If sustained, petitioners' stance will wreak havoc on he essence of bidding. Our laws, rules and regulations require highest bidding to raise as much funds as possible for the government to maximize its capacity to deliver essential services to our people. This is a duty that must be discharged by Filipinos and foreigners participating in a bidding contest and the rules are carefully written to attain this objective. Among others, bidders are prequalified to insure their financial capability. The bidding is secret and the bids are sealed to prevent collusion among the parties. This objective will be undermined if we grant petitioner that privilege to know the winning bid and a chance to match it. For plainly, a second chance to bid will encourage a bidder not to strive to give the highest bid in the first bidding. We support the Filipino First policy without any reservation. The visionary nationalist Don Claro M. Recto has warned us that the greatest tragedy that can befall a Filipino is to be an alien in his own land. The Constitution has embodied Recto's counsel as a state policy. But while the Filipino First policy requires that we incline to a Filipino, it does not demand that we wrong an alien. Our policy makers can write laws and rules giving favored treatment to the Filipino but we are not free to be unfair to a foreigner after writing the laws and the rules. After the laws are written, they must be obeyed as written, by Filipinos and foreigners alike. The equal protection clause

of the Constitution protects all against unfairness. We can be proFilipino without unfairness to foreigner. I vote to dismiss the petition. Narvasa, C.J., and Melo, J., concur.

PANGANIBAN, J., dissenting: I regret I cannot join the majority. To the incisive Dissenting Opinion of Mr. Justice Reynato S. Puno, may I just add 1. The majority contends the Constitution should be interpreted to mean that, after a bidding process is concluded, the losing Filipino bidder should be given the right to equal the highest foreign bid, and thus to win. However, the Constitution [Sec. 10 (2), Art. XII] simply states that "in the grant of rights . . . covering the national economy and patrimony, the State shall give preference to qualified Filipinos." The majority concedes that there is no law defining the extent or degree of such preference. Specifically, no statute empowers a losing Filipino bidder to increase his bid and equal that of the winning foreigner. In the absence of such empowering law, the majority's strained interpretation, I respectfully submit constitutes unadulterated judicial legislation, which makes bidding a ridiculous sham where no Filipino can lose and where no foreigner can win. Only in the Philippines!. 2. Aside from being prohibited by the Constitution, such judicial is short-sighted and, viewed properly, gravely prejudicial to long-term Filipino interest. It encourages other countries in the guise of reverse comity or worse, unabashed retaliation to discriminate against us in their own jurisdictions by authorizing their own nationals to similarly equal and defeat the higher bids of Filipino enterprises solely, while on the other hand, allowing similar bids of other foreigners to remain unchallenged by their nationals. The majority's thesis will thus marginalize Filipinos as pariahs in the global marketplace with absolute no chance of winning any bidding outside our country. Even authoritarian regimes and hermit kingdoms have long ago found out unfairness, greed and isolation are self-defeating

and in the long-term, self-destructing. The moral lesson here is simple: Do not do unto other what you dont want other to do unto you. 3. In the absence of a law specifying the degree or extent of the "Filipino First" policy of the Constitution, the constitutional preference for the "qualified Filipinos" may be allowed only where all the bids are equal. In this manner, we put the Filipino ahead without selfdestructing him and without being unfair to the foreigner. In short, the Constitution mandates a victory for the qualified Filipino only when the scores are tied. But not when the ballgame is over and the foreigner clearly posted the highest score.

Separate Opinions PADILLA, J., concurring: I concur with the ponencia of Mr. Justice Bellosillo. At the same time, I would like to expound a bit more on the concept of national patrimony as including within its scope and meaning institutions such as the Manila Hotel. It is argued by petitioner that the Manila Hotel comes under "national patrimony" over which qualified Filipinos have the preference, in ownership and operation. The Constitutional provision on point states: xxx xxx xxx
In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall Give preference to qualified Filipinos. 1

Petitioner's argument, I believe, is well taken. Under the 1987 Constitution, "national patrimony" consists of the natural resources provided by Almighty God (Preamble) in our territory (Article I) consisting of land, sea, and air. 2 study of the 1935 Constitution,

where the concept of "national patrimony" originated, would show that its framers decided to adopt the even more comprehensive expression "Patrimony of the Nation" in the belief that the phrase encircles a concept embracing not only their natural resources of the country but practically everything that belongs to the Filipino people, the tangible and the material as well as the intangible and the spiritual assets and possessions of the people. It is to be noted that the framers did not stop with conservation. They knew that conservation alone does not spell progress; and that this may be achieved only through development as a correlative factor to assure to the people not only the exclusive ownership, but also the exclusive benefits of their national patrimony). 3 Moreover, the concept of national patrimony has been viewed as referring not only to our rich natural resources but also to the cultural heritage of our race. 4 There is no doubt in my mind that the Manila Hotel is very much a part of our national patrimony and, as such, deserves constitutional protection as to who shall own it and benefit from its operation. This institution has played an important role in our nation's history, having been the venue of many a historical event, and serving as it did, and as it does, as the Philippine Guest House for visiting foreign heads of state, dignitaries, celebrities, and others. 5 It is therefore our duty to protect and preserve it for future generations of Filipinos. As President Manuel L. Quezon once said, we must exploit the natural resources of our country, but we should do so with. an eye to the welfare of the future generations. In other words, the leaders of today are the trustees of the patrimony of our race. To preserve our national patrimony and reserve it for Filipinos was the intent of the distinguished gentlemen who first framed our Constitution. Thus, in debating the need for nationalization of our lands and natural resources, one expounded that we should "put more teeth into our laws, and; not make the nationalization of our lands and natural resources a subject of ordinary legislation but of constitutional enactment" 6 To quote further: "Let not our children be mere tenants and trespassers in their own country. Let us preserve and bequeath to them what is rightfully theirs, free from all foreign liens and encumbrances". 7

Now, a word on preference. In my view "preference to qualified Filipinos", to be meaningful, must refer not only to things that are peripheral, collateral, or tangential. It must touch and affect the very "heart of the existing order." In the field of public bidding in the acquisition of things that pertain to the national patrimony, preference to qualified Filipinos must allow a qualified Filipino to match or equal the higher bid of a non-Filipino; the preference shall not operate only when the bids of the qualified Filipino and the non-Filipino are equal in which case, the award should undisputedly be made to the qualified Filipino. The Constitutional preference should give the qualified Filipino an opportunity to match or equal the higher bid of the non-Filipino bidder if the preference of the qualified Filipino bidder is to be significant at all. It is true that in this present age of globalization of attitude towards foreign investments in our country, stress is on the elimination of barriers to foreign trade and investment in the country. While government agencies, including the courts should re-condition their thinking to such a trend, and make it easy and even attractive for foreign investors to come to our shores, yet we should not preclude ourselves from reserving to us Filipinos certain areas where our national identity, culture and heritage are involved. In the hotel industry, for instance, foreign investors have established themselves creditably, such as in the Shangri-La, the Nikko, the Peninsula, and Mandarin Hotels. This should not stop us from retaining 51% of the capital stock of the Manila Hotel Corporation in the hands of Filipinos. This would be in keeping with the intent of the Filipino people to preserve our national patrimony, including our historical and cultural heritage in the hands of Filipinos. VITUG, J., concurring: I agree with Mr. Justice Josue N. Bellosillo on his clear-cut statements, shared by Mr. Justice Reynato S. Puno in a well written separate (dissenting) opinion, that: First, the provision in our fundamental law which provides that "(I)n the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos" 1 is self-executory. The provision verily does not need,

although it can obviously be amplified or regulated by, an enabling law or a set of rules. Second, the term "patrimony" does not merely refer to the country's natural resources but also to its cultural heritage. A "historical landmark," to use the words of Mr. Justice Justo P. Torres, Jr., Manila Hotel has now indeed become part of Philippine heritage. Third, the act of the Government Service Insurance System ("GSIS"), a government entity which derives its authority from the State, in selling 51% of its share in MHC should be considered an act of the State subject to the Constitutional mandate. On the pivotal issue of the degree of "preference to qualified Filipinos," I find it somewhat difficult to take the same path traversed by the forceful reasoning of Justice Puno. In the particular case before us, the only meaningful preference, it seems, would really be to allow the qualified Filipino to match the foreign bid for, as a particular matter, I cannot see any bid that literally calls for millions of dollars to be at par (to the last cent) with another. The magnitude of the magnitude of the bids is such that it becomes hardly possible for the competing bids to stand exactly "equal" which alone, under the dissenting view, could trigger the right of preference. It is most unfortunate that Renong Berhad has not been spared this great disappointment, a letdown that it did not deserve, by a simple and timely advise of the proper rules of bidding along with the peculiar constitutional implications of the proposed transaction. It is also regrettable that the Court at time is seen, to instead, be the refuge for bureaucratic inadequate which create the perception that it even takes on non-justiciable controversies. All told, I am constrained to vote for granting the petition. MENDOZA, J., concurring in the judgment: I take the view that in the context of the present controversy the only way to enforce the constitutional mandate that "[i]n the grant of rights, privileges and concessions covering the national patrimony the State shall give preference to qualified Filipinos" 1 is to allow petitioner Philippine corporation to equal the bid of the Malaysian firm Renong

Berhad for the purchase of the controlling shares of stocks in the Manila Hotel Corporation. Indeed, it is the only way a qualified Filipino of Philippine corporation can be given preference in the enjoyment of a right, privilege or concession given by the State, by favoring it over a foreign national corporation. Under the rules on public bidding of the Government Service and Insurance System, if petitioner and the Malaysian firm had offered the same price per share, "priority [would be given] to the bidder seeking the larger ownership interest in MHC," 2 so that petitioner bid for more shares, it would be preferred to the Malaysian corporation for that reason and not because it is a Philippine corporation. Consequently, it is only in cases like the present one, where an alien corporation is the highest bidder, that preferential treatment of the Philippine corporation is mandated not by declaring it winner but by allowing it "to match the highest bid in terms of price per share" before it is awarded the shares of stocks. 3 That, to me, is what "preference to qualified Filipinos" means in the context of this case by favoring Filipinos whenever they are at a disadvantage vis-a-vis foreigners. This was the meaning given in Co Chiong v. Cuaderno 4 to a 1947 statute giving "preference to Filipino citizens in the lease of public market stalls." 5 This Court upheld the cancellation of existing leases covering market stalls occupied by persons who were not Filipinos and the award thereafter of the stalls to qualified Filipino vendors as ordered by the Department of Finance. Similarly, in Vda. de Salgado v. De la Fuente, 6 this Court sustained the validity of a municipal ordinance passed pursuant to the statute (R.A. No. 37), terminating existing leases of public market stalls and granting preference to Filipino citizens in the issuance of new licenses for the occupancy of the stalls. In Chua Lao v. Raymundo, 7 the preference granted under the statute was held to apply to cases in which Filipino vendors sought the same stalls occupied by alien vendors in the public markets even if there were available other stalls as good as those occupied by aliens. "The law, apparently, is applicable whenever there is a conflict of interest between Filipino applicants and aliens for lease of stalls in public markets, in which situation the right to preference immediately arises." 8 Our legislation on the matter thus antedated by a quarter of a century

efforts began only in the 1970s in America to realize the promise of equality, through affirmative action and reverse discrimination programs designed to remedy past discrimination against colored people in such areas as employment, contracting and licensing. 9 Indeed, in vital areas of our national economy, there are situations in which the only way to place Filipinos in control of the national economy as contemplated in the Constitution 10 is to give them preferential treatment where they can at least stand on equal footing with aliens. There need be no fear that thus preferring Filipinos would either invite foreign retaliation or deprive the country of the benefit of foreign capital or know-how. We are dealing here not with common trades of common means of livelihood which are open to aliens in our midst, 11 but with the sale of government property, which is like the grant of government largess of benefits and concessions covering the national economy" and therefore no one should begrudge us if we give preferential treatment to our citizens. That at any rate is the command of the Constitution. For the Manila Hotel is a business owned by the Government. It is being privatized. Privatization should result in the relinquishment of the business in favor of private individuals and groups who are Filipino citizens, not in favor of aliens. Nor should there be any doubt that by awarding the shares of stocks to petitioner we would be trading competence and capability for nationalism. Both petitioner and the Malaysian firm are qualified, having hurdled the prequalification process. 12 It is only the result of the public bidding that is sought to be modified by enabling petitioner to up its bid to equal the highest bid. Nor, finally, is there any basis for the suggestion that to allow a Filipino bidder to match the highest bid of an alien could encourage speculation, since all that a Filipino entity would then do would be not to make a bid or make only a token one and, after it is known that a foreign bidder has submitted the highest bid, make an offer matching that of the foreign firm. This is not possible under the rules on public bidding of the GSIS. Under these rules there is a minimum bid required (P36.87 per share for a range of 9 to 15 million shares). 13 Bids below the minimum will not be considered. On the other hand, if the Filipino entity, after passing the prequalification process, does not

submit a bid, he will not be allowed to match the highest bid of the foreign firm because this is a privilege allowed only to those who have "validly submitted bids." 14 The suggestion is, to say the least, fanciful and has no basis in fact. For the foregoing reasons, I vote to grant the petition. TORRES, JR., J., separate opinion: Constancy in law is not an attribute of a judicious mind. I say this as we are not confronted in the case at bar with legal and constitutional issues and yet I am driven so to speak on the side of history. The reason perhaps is due to the belief that in the words of Justice Oliver Wendell Holmes, Jr., a "page of history is worth a volume of logic." I will, however, attempt to share my thoughts on whether the Manila Hotel has a historical and cultural aspect within the meaning of the constitution and thus, forming part of the "patrimony of the nation". Section 10, Article XII of the 1987 Constitution provides: xxx xxx xxx In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. The State shall regulate and exercise authority over foreign investments within its national goals and priorities. The foregoing provisions should be read in conjunction with Article II of the same Constitution pertaining to "Declaration of Principles and State Policies" which ordain The State shall develop a self-reliant and independent national economy effectively by Filipinos. (Sec. 19). Interestingly, the matter of giving preference to "qualified Filipinos" was one of the highlights in the 1987 Constitution Commission proceedings thus:

xxx xxx xxx MR. NOLLEDO. The Amendment will read: "IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS". And the word "Filipinos" here, as intended by the proponents, will include not only individual Filipinos but also Filipino-Controlled entities fully controlled by Filipinos (Vol. III, Records of the Constitutional Commission, p. 608). MR. MONSOD. We also wanted to add, as Commissioner Villegas said, this committee and this body already approved what is known as the Filipino First policy which was suggested by Commissioner de Castro. So that it is now in our Constitution (Vol. IV, Records of the Constitutional Commission, p. 225). Commissioner Jose Nolledo explaining the provision adverted to above, said: MR. NOLLEDO. In the grant of rights, privileges and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. MR. FOZ. In connection with that amendment, if a foreign enterprise is qualified and the Filipinos enterprise is also qualified, will the Filipino enterprise still be given a preference? MR. NOLLEDO. Obviously. MR. FOZ. If the foreigner is more qualified in some aspects than the Filipino enterprise, will the Filipino still be preferred:? MR. NOLLEDO. The answer is "yes". (Vol. III, p. 616, Records of the Constitutional Commission). The nationalistic provisions of the 1987 Constitution reflect the history and spirit of the Malolos Constitution of 1898, the 1935 Constitution and the 1973 Constitutions. That we have no reneged on this nationalist policy is articulated in one of the earliest case, this Court said

The nationalistic tendency is manifested in various provisions of the Constitution. . . . It cannot therefore be said that a law imbued with the same purpose and spirit underlying many of the provisions of the Constitution is unreasonable, invalid or unconstitutional (Ichong, et al. vs. Hernandez, et al., 101 Phil. 1155). I subscribe to the view that history, culture, heritage, and traditions are not legislated and is the product of events, customs, usages and practices. It is actually a product of growth and acceptance by the collective mores of a race. It is the spirit and soul of a people. The Manila Hotel is part of our history, culture and heritage. Every inch of the Manila Hotel is witness to historic events (too numerous to mention) which shaped our history for almost 84 years. As I intimated earlier, it is not my position in this opinion, to examine the single instances of the legal largese which have given rise to this controversy. As I believe that has been exhaustively discussed in the ponencia. Suffice it to say at this point that the history of the Manila Hotel should not be placed in the auction block of a purely business transaction, where profits subverts the cherished historical values of our people. As a historical landmark in this "Pearl of the Orient Seas", it has its enviable tradition which, in the words of the philosopher Salvador de Madarriaga tradition is "more of a river than a stone, it keeps flowing, and one must view the flowing , and one must view the flow of both directions. If you look towards the hill from which the river flows, you see tradition in the form of forceful currents that push the river or people towards the future, and if you look the other way, you progress." Indeed, tradition and progress are the same, for progress depends on the kind of tradition. Let us not jettison the tradition of the Manila Hotel and thereby repeat our colonial history. I grant, of course the men of the law can see the same subject in different lights. I remember, however, a Spanish proverb which says "He is always right who suspects that he makes mistakes". On this note, I say that if

I have to make a mistake, I would rather err upholding the belief that the Filipino be first under his Constitution and in his own land. I vote GRANT the petition.

PUNO, J., dissenting: This is a. petition for prohibition and mandamus filed by the Manila Prince Hotel Corporation, a domestic corporation, to stop the Government Service Insurance System (GSIS) from selling the controlling shares of the Manila Hotel Corporation to a foreign corporation. Allegedly, the sale violates the second paragraph of section 10, Article XII of the Constitution. Respondent GSIS is a government-owned and controlled corporation. It is the sole owner of the Manila Hotel which it operates through its subsidiary, the Manila Hotel Corporation. Manila Hotel was included in the privatization program of the government. In 1995, GSIS proposed to sell to interested buyers 30% to 51% of its shares, ranging from 9,000,000 to 15,300,000 shares, in the Manila Hotel Corporation. After the absence of bids at the first public bidding, the block of shares offered for sale was increased from a maximum of 30% to 51%. Also, the winning bidder, or the eventual "strategic partner" of the GSIS was required to "provide management expertise and/or an international marketing/reservation system, and financial support to strengthen the profitability and performance of the Manila Hotel" 1 The proposal was approved by respondent Committee on Privatization. In July 1995, a conference was held where prequalification documents and the bidding rules were furnished interested parties. Petitioner Manila Prince Hotel, a domestic corporation, and Renong Berhad, Malaysian firm with ITT Sheraton as operator, prequalified. 2 The bidding rules and procedures entitled "Guidelines and Procedures: Second Prequalification and Public Bidding of the MHC Privatization" provide: I INTRODUCTION AND HIGHLIGHTS

DETERMINING THE WINNING BIDDER/STRATEGIC PARTNER The party that accomplishes the steps set forth below will be declared the Winning Bidder/Strategic Partner and will be awarded the Block of Shares: First Pass the prequalification process; Second Submit the highest bid on a price per share basis for the Block of Shares; Third Negotiate and execute the necessary contracts with GSIS/MHC not later than October 23, 1995; xxx xxx xxx IV GUIDELINES FOR PREQUALIFICATION A. PARTIES WHO MAP APPLY FOR PREQUALIFICATION The Winning Bidder/Strategic Partner will be expected to provide management expertise and/or an international marketing reservation system, and financial support to strengthen the profitability and performance of The Manila Hotel. In this context, the GSIS is inviting to the prequalification process any local and/or foreign corporation, consortium/joint venture or juridical entity with at least one of the following qualifications: a. Proven management .expertise in the hotel industry; or b. Significant equity ownership (i.e. board representation) in another hotel company; or c. Overall management and marketing expertise to successfully operate the Manila Hotel. Parties interested in bidding for MHC should be able to provide access to the requisite management expertise and/or international marketing/reservation system for The Manila Hotel. xxx xxx xxx

D. PREQUALIFICATION DOCUMENTS xxx xxx xxx E. APPLICATION PROCEDURE 1. DOCUMENTS AVAILABLE AT THE REGISTRATION OFFICE The prequalification documents can be secured at the Registration Office between 9:00 AM to 4:00 PM during working days within the period specified in Section III. Each set of documents consists of the following: a. Guidelines and Procedures: Second Prequalification and Public Bidding of the MHC Privatization b. Confidential Corporation Information Memorandum: The Manila Hotel

c. Letter of Invitation. to the Prequalification and Bidding Conference xxx xxx xxx 4. PREQUALIFICATION AND BIDDING CONFERENCE A prequalification and bidding conference will be held at The Manila Hotel on the date specified in Section III to allow the Applicant to seek clarifications and further information regarding the guidelines and procedures. Only those who purchased the prequalification documents will be allowed in this conference. Attendance to this conference is strongly advised, although the Applicant will not be penalized if it does not attend. 5. SUBMISSION OF PREQUALIFICATION DOCUMENTS The applicant should submit 5 sets of the prequalification documents (1 original set plus 4 copies) at the Registration Office between 9:00 AM to 4:00 PM during working days within the period specified in Section III. F. PREQUALIFICATION PROCESS

1. The Applicant will be evaluated by the PBAC with the assistance of the TEC based on the Information Package and other information available to the PBAC. 2. If the Applicant is a Consortium/Joint Venture, the evaluation will consider the overall qualifications of the group, taking into account the contribution of each member to the venture. 3. The decision of the PBAC with respect to the results of the PBAC evaluation will be final. 4. The Applicant shall be evaluated according to the criteria set forth below: a. Business management expertise, track record, and experience b. Financial capability. c. Feasibility and acceptability of the proposed strategic plan for the Manila Hotel 5. The PBAC will shortlist such number of Applicants as it may deem appropriate. 6. The parties that prequalified in the first MHC public bidding ITT Sheraton, Marriot International Inc., Renaissance Hotels International Inc., consortium of RCBC Capital/Ritz Carlton may participate in the Public Bidding without having to undergo the prequalification process again. G. SHORTLIST OF QUALIFIED BIDDERS 1. A notice of prequalification results containing the shortlist of Qualified Bidders will be posted at the Registration Office at the date specified in Section III. 2. In the case of a Consortium/Joint Venture, the withdrawal by member whose qualification was a material consideration for being included in the shortlist is ground for disqualification of the Applicant. V. GUIDELINES FOR THE PUBLIC BIDDING

A. PARTIES WHO MAY PARTICIPATE IN THE PUBLIC BIDDING All parties in the shortlist of Qualified Bidders will be eligible to participate in the Public Bidding. B. BLOCK OF SHARES A range of Nine Million (9,000,000) to Fifteen Million Three Hundred Thousand (15,300,000) shares of stock representing Thirty Percent to Fifty-One Percent (30%-51%) of the issued and outstanding shares of MHC, will be offered in the Public Bidding by the GSIS. The Qualified Bidders will have the Option of determining the number of shares within the range to bid for. The range is intended to attract bidders with different preferences and objectives for the operation and management of The Manila Hotel. C. MINIMUM BID REQUIRED ON A PRICE PER SHARE BASIS 1. Bids will be evaluated on a price per share basis. The minimum bid required on a price per share basis for the Block of Shares is ThirtySix Pesos and Sixty-Seven Centavos (P36.67). 2. Bids should be in the Philippine currency payable to the GSIS. 3. Bids submitted with an equivalent price per share below the minimum required will not considered. D. TRANSFER COSTS xxx xxx xxx E. OFFICIAL BID FORM 1. Bids must be contained in the prescribed Official Bid Form, a copy of which is attached as Annex IV. The Official Bid Form must be properly accomplished in all details; improper accomplishment may be a sufficient basis for disqualification. 2. During the Public Bidding, the Qualified Bidder will submit the Official Bid Form, which will indicate the offered purchase price, in a sealed envelope marked "OFFICIAL BID."

F. SUPPORTING DOCUMENTS During the Public Bidding, the following documents should be submitted along with the bid in a separate envelop marked "SUPPORTING DOCUMENTS": 1. WRITTEN AUTHORITY TO BID (UNDER OATH). If the Qualified Bidder is a corporation, the representative of the Qualified Bidder should submit a Board resolution which adequately authorizes such representative to bid for and in behalf of the corporation with full authority to perform such acts necessary or requisite to bind the Qualified Bidder. If the Qualified Bidder is a Consortium/Joint Venture, each member of the Consortium/Joint venture should submit a Board resolution authorizing one of its members and such member's representative to make the bid on behalf of the group with full authority to perform such acts necessary or requisite to bind the Qualified Bidder. 2. BID SECURITY a. The Qualified Bidder should deposit Thirty-Three Million Pesos (P33,000,00), in Philippine currency as Bid Security in the form of: i. Manager's check or unconditional demand draft payable to the "Government Service Insurance System" and issued by a reputable banking institution duly licensed to do business in the Philippines and acceptable to GSIS; or ii. Standby-by letter of credit issued by a reputable banking institution acceptable to the GSIS. b. The GSIS will reject a bid if: i. The bid does not have Bid Security; or ii. The Bid Security accompanying the bid is for less than the required amount. c. If the Bid Security is in the form of a manager's check or

unconditional demand draft, the interest earned on the Bid Security will be for the account of GSIS. d. If the Qualified Bidder becomes the winning Bidder/Strategic Partner, the Bid Security will be applied as the downpayment on the Qualified Bidder's offered purchase price. e. The Bid Security of the Qualified Bidder will be returned immediately after the Public Bidding if the Qualified Bidder is not declared the Highest Bidder. f. The Bid Security will be returned by October 23, 1995 if the Highest Bidder is unable to negotiate and execute with GSIS/MHC the Management Contract, International Marketing/Reservation System Contract or other types of contract specified by the Highest Bidder in its strategic plan for The Manila Hotel. g. The Bid Security of the Highest Bidder will be forfeited in favor of GSIS if the Highest Bidder, after negotiating and executing the Management Contract, International Marketing/Reservation System Contract specified by the Highest Bidder or other types of contract in its strategic plan for The Manila Hotel, fails or refuses to: i. Execute the Stock Purchase and Sale Agreement with GSIS not later than October 23, 1995; or ii. Pay the full amount of the offered purchase price not later than October 23, 1995; or iii. Consummate the sale of the Block of Shares for any other reason. G. SUBMISSION OF BIDS 1. The Public Bidding will be held on September 7, 1995 at the following location: New GSIS Headquarters Building Financial Center, Reclamation Area Roxas Boulevard, Pasay City, Metro Manila. 2. The Secretariat of the PBAC will be stationed at the Public Bidding to accept any and all bids and supporting requirements.

Representatives from the Commission on Audit and COP will be invited to witness the proceedings. 3. The Qualified Bidder should submit its bid using the Official Bid Form. The accomplished Official Bid Form should be submitted in a sealed envelope marked "OFFICIAL BID." 4. The Qualified Bidder should submit the following documents in another sealed envelope marked "SUPPORTING BID DOCUMENTS" a. Written Authority Bid b. Bid Security 5. The two sealed envelopes marked "OFFICIAL BID" and "SUPPORTING BID DOCUMENTS" must be submitted simultaneously to the Secretariat between 9:00 AM and 2:00 PM, Philippine Standard Time, on the date of the Public Bidding. No bid shall be accepted after the closing time. Opened or tampered bids shall not be accepted. 6. The Secretariat will log and record the actual time of submission of the two sealed envelopes. The actual time of submission will also be indicated by the Secretariat on the face of the two envelopes. 7. After Step No. 6, the two sealed envelopes will be dropped in the corresponding bid boxes provided for the purpose. These boxes will be in full view of the invited public. H. OPENING AND READING OF BIDS 1. After the closing time of 2:00 PM on the date of the Public Bidding, the PBAC will open all sealed envelopes marked "SUPPORTING BID DOCUMENTS" for screening, evaluation and acceptance. Those who submitted incomplete/insufficient documents or document/s which is/are not substantially in the form required by PBAC will be disqualified. The envelope containing their Official Bid Form will be immediately returned to the disqualified bidders. 2. The sealed envelopes marked "OFFICIAL BID" will be opened at 3:00 PM. The name of the bidder and the amount of its bid price will

be read publicly as the envelopes are opened. 3. Immediately following the reading of the bids, the PBAC will formally announce the highest bid and the Highest Bidder. 4. The highest bid will be, determined on a price per share basis. In the event of a tie wherein two or more bids have the same equivalent price per share, priority will be given to the bidder seeking the larger ownership interest in MHC. 5. The Public Bidding will be declared a failed bidding in case: a. No single bid is submitted within the prescribed period; or b. There is only one (1) bid that is submitted and acceptable to the PBAC. I. EXECUTION GSIS/MHC OF THE NECESSARY CONTRACTS WITH

1. The Highest Bidder must comply with the conditions set forth below by October 23, 1995 or the Highest Bidder will lose the right to purchase the Block of Shares and GSIS will instead offer the Block of Shares to the other Qualified Bidders: a. The Highest Bidder must negotiate and execute with GSIS/MHC the Management Contract, International Marketing Reservation System Contract or other type of contract specified by the Highest Bidder in its strategic plan for The Manila Hotel. If the Highest Bidder is intending to provide only financial support to The Manila Hotel, a separate institution may enter into the aforementioned contract/s with GSIS/MHC. b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS, a copy of which will be distributed to each of the Qualified Bidder after the prequalification process is completed. 2. In the event that the Highest Bidder chooses a Management Contract for The Manila Hotel, the maximum levels for the management fee structure that GSIS/MHC are prepared to accept in the Management Contract are as follows:

a. Basic management fee: Maximum of 2.5% of gross revenues.(1) b. Incentive fee: Maximum of 8.0% of gross operating profit(1) after deducting undistributed overhead expenses and the basic management fee. c. Fixed component of the international marketing/reservation system fee: Maximum of 2.0% of gross room revenues.(1) The Applicant should indicate in its Information Package if it is wishes to charge this fee. Note (1): As defined in the uniform system of account for hotels. The GSIS/MHC have indicated above the acceptable parameters for the hotel management fees to facilitate the negotiations with the Highest Bidder for the Management Contract after the Public Bidding. A Qualified Bidder envisioning a Management Contract for The Manila Hotel should determine whether or not the management fee structure above is acceptable before submitting their prequalification documents to GSIS. J. BLOCK SALE TO THE OTHER QUALIFIED BIDDERS 1. If for any reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the other Qualified Bidders that have validly submitted bids provided that these Qualified are willing to match the highest bid in terms of price per share. 2. The order of priority among the interested Qualified Bidders will be in accordance wit the equivalent price per share of their respective bids in their public Bidding, i.e., first and second priority will be given to the Qualified Bidders that submitted the second and third highest bids on the price per share basis, respectively, and so on. K. DECLARATION PARTNER OF THE WINNING BIDDER/STRATEGIC

The Highest Bidder will be declared the Winning Bidder/Strategic Partner after the following conditions are met:

a. Execution of the necessary contract with GSIS/MHC not later than October 23, 1995; and b. Requisite approvals from the GSIS/MHC and COP/OGCC are obtained. I. FULL PAYMENT FOR THE BLOCK OF SHARES 1. Upon execution of the necessary contracts with GSIS/MHC, the Winning Bidder/Strategic Partner must fully pay, not later than October 23, 1995, the offered purchase price for the Block of Shares after deducting the Bid Security applied as downpayment. 2. All payments should be made in the form of a Manager's Check or unconditional Demand Draft, payable to the "Government Service Insurance System," issued by a reputable banking institution licensed to do business in the Philippines and acceptable to GSIS. M. GENERAL CONDITIONS 1. The GSIS unconditionally reserves the right to reject any or all applications, waive any formality therein, or accept such application as maybe considered most advantageous to the GSIS. The GSIS similarly reserves the right to require the submission of any additional information from the Applicant as the PBAC may deem necessary. 2. The GSIS further reserves the right to call off the Public Bidding prior to acceptance of the bids and call for a new public bidding under amended rules, and without any liability whatsoever to any or all the Qualified Bidders, except the obligation to return the Bid Security. 3. The GSIS reserves the right to reset the date of the prequalification/bidding conference, the deadline for the submission of the prequalification documents, the date of the Public Bidding or other pertinent activities at least three (3) calendar days prior to the respective deadlines/target dates. 4. The GSIS sells only whatever rights, interest and participation it has on the Block of Shares. 5. All documents and materials submitted by the Qualified Bidders,

except the Bid Security, may be returned upon request. 6. The decision of the PBAC/GSIS on the results of the Public Bidding is final. The Qualified Bidders, by participating in the Public Bidding, are deemed to have agreed to accept and abide by these results.
7. The GSIS will be held free and harmless form any liability, suit or allegation arising out of the Public Bidding by the Qualified Bidders who have participated in the Public Bidding. 3

The second public bidding was held on September 18, 1995. Petitioner bidded P41.00 per share for 15,300,000 shares and Renong Berhad bidded P44.00 per share also for 15,300,000 shares. The GSIS declared Renong Berhad the highest bidder and immediately returned petitioner's bid security. On September 28, 1995, ten days after the bidding, petitioner wrote to GSIS offering to match the bid price of Renong Berhad. It requested that the award be made to itself citing the second paragraph of Section 10, Article XII of the Constitution. It sent a manager's check for thirty-three million pesos (P33,000,000.00) as bid security. Respondent GSIS, then in the process of negotiating with Renong Berhad the terms and conditions of the contract and technical agreements in the operation of the hotel, refused to entertain petitioner's request. Hence, petitioner filed the present petition. We issued a temporary restraining order on October 18, 1995. Petitioner anchors its plea on the second paragraph of Article XII, Section 10 of the Constitution 4 on the "National Economy and Patrimony" which provides: xxx xxx xxx In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.

xxx xxx xxx The vital issues can be summed up as follows: (1) Whether section 10, paragraph 2 of Article XII of the Constitution is a self-executing provision and does not need implementing legislation to carry it into effect; (2) Assuming section 10 paragraph 2 of Article XII is self-executing whether the controlling shares of the Manila Hotel Corporation form part of our patrimony as a nation; (3) Whether GSIS is included in the term "State," hence, mandated to implement section 10, paragraph 2 of Article XII of the Constitution; (4) Assuming GSIS is part of the State, whether it failed to give preference to petitioner, a qualified Filipino corporation, over and above Renong Berhad, a foreign corporation, in the sale of the controlling shares of the Manila Hotel Corporation; (5) Whether petitioner is estopped from questioning the sale of the shares to Renong Berhad, a foreign corporation. Anent the first issue, it is now familiar learning that a Constitution provides the guiding policies and principles upon which is built the substantial foundation and general framework of the law and government. 5 As a rule, its provisions are deemed self-executing and can be enforced without further legislative action. 6 Some of its provisions, however, can be implemented only through appropriate laws enacted by the Legislature, hence not self-executing. To determine whether a particular provision of a Constitution is selfexecuting is a hard row to hoe. The key lies on the intent of the framers of the fundamental law oftentimes submerged in its language. A searching inquiry should be made to find out if the provision is intended as a present enactment, complete in itself as a definitive law, or if it needs future legislation for completion and enforcement. 7 The inquiry demands a micro-analysis of the text and the context of the provision in question. 8 Courts as a rule consider the provisions of the Constitution as self-

executing, 9 rather than as requiring future legislation for their enforcement. 10 The reason is not difficult to discern. For if they are not treated as self-executing, the mandate of the fundamental law ratified by the sovereign people can be easily ignored and nullified by Congress. 11 Suffused with wisdom of the ages is the unyielding rule that legislative actions may give breath to constitutional rights but congressional in action should not suffocate them. 12 Thus, we have treated as self-executing the provisions in the Bill of Rights on arrests, searches and seizures, 13 the rights of a person under custodial investigation, 14 the rights of an accused, 15 and the privilege against self-incrimination, 16 It is recognize a that legislation is unnecessary to enable courts to effectuate constitutional provisions guaranteeing the fundamental rights of life, liberty and the protection of property. 17 The same treatment is accorded to constitutional provisions forbidding the taking or damaging of property for public use without just compensation. 18 Contrariwise, case law lays down the rule that a constitutional provision is not self-executing where it merely announces a policy and its language empowers the Legislature to prescribe the means by which the policy shall be carried into effect. 19 Accordingly, we have held that the provisions in Article II of our Constitution entitled "Declaration of Principles and State Policies" should generally be construed as mere statements of principles of the State. 20 We have also ruled that some provisions of Article XIII on "Social Justice and Human Rights," 21 and Article XIV on "Education Science and Technology, Arts, Culture end Sports" 22 cannot be the basis of judicially enforceable rights. Their enforcement is addressed to the discretion of Congress though they provide the framework for legislation 23 to effectuate their policy content. 24 Guided by this map of settled jurisprudence, we now consider whether Section 10, Article XII of the 1987 Constitution is selfexecuting or not. It reads: Sec. 10. The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such

higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos. In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities. The first paragraph directs Congress to reserve certain areas of investments in the country 25 to Filipino citizens or to corporations sixty per cent 26 of whose capital stock is owned by Filipinos. It further commands Congress to enact laws that will encourage the formation and operation of one hundred percent Filipino-owned enterprises. In checkered contrast, the second paragraph orders the entire State to give preference to qualified Filipinos in the grant of rights and privileges covering the national economy and patrimony. The third paragraph also directs the State to regulate foreign investments in line with our national goals and well-set priorities. The first paragraph of Section 10 is not self-executing. By its express text, there is a categorical command for Congress to enact laws restricting foreign ownership in certain areas of investments in the country and to encourage the formation and operation of whollyowned Filipino enterprises. The right granted by the provision is clearly still in esse. Congress has to breathe life to the right by means of legislation. Parenthetically, this paragraph was plucked from section 3, Article XIV of the 1973 Constitution. 27 The provision in the 1973 Constitution affirmed our ruling in the landmark case of Lao Ichong v. Hernandez, 28 where we upheld the discretionary authority of Congress to Filipinize certain areas of investments. 29 By reenacting the 1973 provision, the first paragraph of section 10 affirmed the power of Congress to nationalize certain areas of investments in favor of Filipinos. The second and third paragraphs of Section 10 are different. They

are directed to the State and not to Congress alone which is but one of the three great branches of our government. Their coverage is also broader for they cover "the national economy and patrimony" and "foreign investments within [the] national jurisdiction" and not merely "certain areas of investments." Beyond debate, they cannot be read as granting Congress the exclusive power to implement by law the policy of giving preference to qualified Filipinos in the conferral of rights and privileges covering our national economy and patrimony. Their language does not suggest that any of the State agency or instrumentality has the privilege to hedge or to refuse its implementation for any reason whatsoever. Their duty to implement is unconditional and it is now. The second and the third paragraphs of Section 10, Article XII are thus self-executing. This submission is strengthened by Article II of the Constitution entitled "Declaration of Principles and State Policies." Its Section 19 provides that "[T]he State shall develop a self-reliant and independent national economy effectively controlled by Filipinos." It engrafts the all-important Filipino First policy in our fundamental law and by the use of the mandatory word "shall," directs its enforcement by the whole State without any pause or a half- pause in time. The second issue is whether the sale of a majority of the stocks of the Manila Hotel Corporation involves the disposition of part of our national patrimony. The records of the Constitutional Commission show that the Commissioners entertained the same view as to its meaning. According to Commissioner Nolledo, "patrimony" refers not only to our rich natural resources but also to the cultural heritage of our race. 30 By this yardstick, the sale of Manila Hotel falls within the coverage of the constitutional provision giving preferential treatment to qualified Filipinos in the grant of rights involving our national patrimony. The unique value of the Manila Hotel to our history and culture cannot be viewed with a myopic eye. The value of the hotel goes beyond pesos and centavos. As chronicled by Beth Day Romulo, 31 the hotel first opened on July 4, 1912 as a first-class hotel built by the American Insular Government for Americans living in, or passing through, Manila while traveling to the Orient. Indigenous materials and Filipino craftsmanship were utilized in its construction, For sometime, it was exclusively used by American and Caucasian travelers and served as the "official guesthouse" of the American

Insular Government for visiting foreign dignitaries. Filipinos began coming to the Hotel as guests during the Commonwealth period. When the Japanese occupied Manila, it served as military headquarters and lodging for the highest-ranking officers from Tokyo. It was at the Hotel and the Intramuros that the Japanese made their last stand during the Liberation of Manila. After the war, the Hotel again served foreign guests and Filipinos alike. Presidents and kings, premiers and potentates, as well as glamorous international film and sports celebrities were housed in the Hotel. It was also the situs of international conventions and conferences. In the local scene, it was the venue of historic meetings, parties and conventions of political parties. The Hotel has reaped and continues reaping numerous recognitions and awards from international hotel and travel awardgiving bodies, a fitting acknowledgment of Filipino talent and ingenuity. These are judicially cognizable facts which cannot be bent by a biased mind. The Hotel may not, as yet, have been declared a national cultural treasure pursuant to Republic Act No. 4846 but that does not exclude it from our national patrimony. Republic Act No. 4846, "The Cultural Properties Preservation and Protection Act," merely provides a procedure whereby a particular cultural property may be classified a "national cultural treasure" or an "important cultural property. 32 Approved on June 18, 1966 and amended by P.D. 374 in 1974, the law is limited in its reach and cannot be read as the exclusive law implementing section 10, Article XII of the 1987 Constitution. To be sure, the law does not equate cultural treasure and cultural property as synonymous to the phrase "patrimony of the nation." The third issue is whether the constitutional command to the State includes the respondent GSIS. A look at its charter will reveal that GSIS is a government-owned and controlled corporation that administers funds that come from the monthly contributions of government employees and the government. 33 The funds are held in trust for a distinct purpose which cannot be disposed of indifferently. 34 They are to be used to finance the retirement, disability and life insurance benefits of the employees and the administrative and operational expenses of the GSIS, 35 Excess funds, however, are allowed to be invested in business and other ventures for the benefit of the employees. 36 It is thus contended that the GSIS investment in

the Manila Hotel Corporation is a simple business venture, hence, an act beyond the contemplation of section 10, paragraph 2 of Article XII of the Constitution. The submission is unimpressive. The GSIS is not a pure private corporation. It is essentially a public corporation created by Congress and granted an original charter to serve a public purpose. It is subject to the jurisdictions of the Civil Service Commission 37 and the Commission on Audit. 38 As state-owned and controlled corporation, it is skin-bound to adhere to the policies spelled out in the general welfare of the people. One of these policies is the Filipino First policy which the people elevated as a constitutional command. The fourth issue demands that we look at the content of phrase "qualified Filipinos" and their "preferential right." The Constitution desisted from defining their contents. This is as it ought to be for a Constitution only lays down flexible policies and principles which can bent to meet today's manifest needs and tomorrow's unmanifested demands. Only a constitution strung with elasticity can grow as a living constitution. Thus, during the deliberations in the Constitutional Commission, Commissioner Nolledo to define the phrase brushed aside a suggestion to define the phrase "qualified Filipinos." He explained that present and prospective "laws" will take care of the problem of its interpretation, viz: xxx xxx xxx THE PRESIDENT. What is the suggestion of Commissioner Rodrigo? Is it to remove the word "QUALIFIED?" MR. RODRIGO. No, no, but say definitely "TO QUALIFIED FILIPINOS" as against whom? As against aliens over aliens? MR. NOLLEDO. Madam President, I think that is understood. We use the word "QUALIFIED" because the existing laws or the prospective laws will always lay down conditions under which business map be done, for example, qualifications on capital, qualifications on the setting up of other financial structures, et cetera.

MR. RODRIGO. It is just a matter of style. MR. NOLLEDO Yes. MR. RODRIGO. If we say, "PREFERENCE TO QUALIFIED FILIPINOS," it can be understood as giving preference to qualified Filipinos as against Filipinos who are not qualified. MR. NOLLEDO. Madam President, that was the intention of the proponents. The committee has accepted the amendment. xxx xxx xxx As previously discussed, the constitutional command to enforce the Filipino First policy is addressed to the State and not to Congress alone. Hence, the word "laws" should not be understood as limited to legislations but all state actions which include applicable rules and regulations adopted by agencies and instrumentalities of the State in the exercise of their rule-making power. In the case at bar, the bidding rules and regulations set forth the standards to measure the qualifications of bidders Filipinos and foreigners alike. It is not seriously disputed that petitioner qualified to bid as did Renong Berhad. 39 Thus, we come to the critical issue of the degree of preference which GSIS should have accorded petitioner, a qualified Filipino, over Renong Berhad, a foreigner, in the purchase of the controlling shares of the Manila Hotel. Petitioner claims that after losing the bid, this right of preference gives it a second chance to match the highest bid of Renong Berhad. With due respect, I cannot sustain petitioner's submission. I prescind from the premise that the second paragraph of section 10, Article XII of the Constitution is pro-Pilipino but not anti-alien. It is pro-Filipino for it gives preference to Filipinos. It is not, however, anti-alien per se for it does not absolutely bar aliens in the grant of rights, privileges and concessions covering the national economy and patrimony. Indeed, in the absence of qualified Filipinos, the State is not prohibited from granting these rights, privileges and concessions to foreigners if the act will promote the weal of the nation.

In implementing the policy articulated in section 10, Article XII of the Constitution, the stellar task of our State policy-makers is to maintain a creative tension between two desiderata first, the need to develop our economy and patrimony with the help of foreigners if necessary, and, second, the need to keep our economy controlled by Filipinos. Rightfully, the framers of the Constitution did not define the degree of the right of preference to be given to qualified Filipinos. They knew that for the right to serve the general welfare, it must have a malleable content that can be adjusted by our policy-makers to meet the changing needs of our people. In fine, the right of preference of qualified Filipinos is to be determined by degree as time dictates and circumstances warrant. The lesser the need for alien assistance, the greater the degree of the right of preference can be given to Filipinos and vice verse. Again, it should be stressed that the right and the duty to determine the degree of this privilege at any given time is addressed to the entire State. While under our constitutional scheme, the right primarily belongs to Congress as the lawmaking department of our government, other branches of government, and all their agencies and instrumentalities, share the power to enforce this state policy. Within the limits of their authority, they can act or promulgate rules and regulations defining the degree of this right of preference in cases where they have to make grants involving the national economy and judicial duty. On the other hand, our duty is to strike down acts of the state that violate the policy. To date, Congress has not enacted a law defining the degree of the preferential right. Consequently, we must turn to the rules and regulations of on respondents Committee Privatization and GSIS to determine the degree of preference that petitioner is entitled to as a qualified Filipino in the subject sale. A tearless look at the rules and regulations will show that they are silent on the degree of preferential right to be accorded qualified Filipino bidder. Despite their silence, however, they cannot be read to mean that they do not grant any degree of preference to petitioner for paragraph 2, section 10, Article XII of the Constitution is deemed part of said rules and regulations. Pursuant to legal hermeneutics which demand that we interpret rules to save them from unconstitutionality, I submit that the right of preference of petitioner arises only if it tied the bid of Benong Berhad.

In that instance, all things stand equal, and bidder, as a qualified Pilipino bidder, should be preferred. It is with deep regret that I cannot subscribe to the view that petitioner has a right to match the bid of Renong Berhad. Petitioner's submission must be supported by the rules but even if we examine the rules inside-out .thousand times, they can not justify the claimed right. Under the rules, the right to match the highest bid arises only "if for any reason, the highest bidder cannot be awarded block of shares . . ." No reason has arisen that will prevent the award to Renong Berhad. It qualified as bidder. It complied with the procedure of bidding. It tendered the highest bid. It was declared as the highest bidder by the GSIS and the rules say this decision is final. It deserves the award as a matter of right for the rules clearly did not give to the petitioner as a qualified Filipino privilege to match the higher bid of a foreigner. What the rules did not grant, petitioner cannot demand. Our symphaties may be with petitioner but the court has no power to extend the latitude and longtitude of the right of preference as defined by the rules. The parameters of the right of preference depend on galaxy of facts and factors whose determination belongs to the province of the policy-making branches and agencies of the State. We are duty-bound to respect that determination even if we differ with the wisdom of their judgment. The right they grant may be little but we must uphold the grant for as long as the right of preference is not denied. It is only when a State action amounts to a denial of the right that the Court can come in and strike down the denial as unconstitutional. Finally, I submit that petitioner is estopped from assailing the winning bid of Renong Berhad. Petitioner was aware of the rules and regulations of the bidding. It knew that the rules and regulations do not provide that a qualified Filipino bidder can match the winning bid submitting an inferior bid. It knew that the bid was open to foreigners and that foreigners qualified even during the first bidding. Petitioner cannot be allowed to repudiate the rules which it agreed to respect. It cannot be allowed to obey the rules when it wins and disregard them when it loses. If sustained, petitioners' stance will wreak havoc on he essence of bidding. Our laws, rules and regulations require highest bidding to raise as much funds as possible for the government to maximize its capacity to deliver essential services to our people. This

is a duty that must be discharged by Filipinos and foreigners participating in a bidding contest and the rules are carefully written to attain this objective. Among others, bidders are prequalified to insure their financial capability. The bidding is secret and the bids are sealed to prevent collusion among the parties. This objective will be undermined if we grant petitioner that privilege to know the winning bid and a chance to match it. For plainly, a second chance to bid will encourage a bidder not to strive to give the highest bid in the first bidding. We support the Filipino First policy without any reservation. The visionary nationalist Don Claro M. Recto has warned us that the greatest tragedy that can befall a Filipino is to be an alien in his own land. The Constitution has embodied Recto's counsel as a state policy. But while the Filipino First policy requires that we incline to a Filipino, it does not demand that we wrong an alien. Our policy makers can write laws and rules giving favored treatment to the Filipino but we are not free to be unfair to a foreigner after writing the laws and the rules. After the laws are written, they must be obeyed as written, by Filipinos and foreigners alike. The equal protection clause of the Constitution protects all against unfairness. We can be proFilipino without unfairness to foreigner. I vote to dismiss the petition. Narvasa, C.J., and Melo, J., concur.

PANGANIBAN, J., dissenting: I regret I cannot join the majority. To the incisive Dissenting Opinion of Mr. Justice Reynato S. Puno, may I just add 1. The majority contends the Constitution should be interpreted to mean that, after a bidding process is concluded, the losing Filipino bidder should be given the right to equal the highest foreign bid, and thus to win. However, the Constitution [Sec. 10 (2), Art. XII] simply states that "in the grant of rights . . . covering the national economy

and patrimony, the State shall give preference to qualified Filipinos." The majority concedes that there is no law defining the extent or degree of such preference. Specifically, no statute empowers a losing Filipino bidder to increase his bid and equal that of the winning foreigner. In the absence of such empowering law, the majority's strained interpretation, I respectfully submit constitutes unadulterated judicial legislation, which makes bidding a ridiculous sham where no Filipino can lose and where no foreigner can win. Only in the Philippines!. 2. Aside from being prohibited by the Constitution, such judicial is short-sighted and, viewed properly, gravely prejudicial to long-term Filipino interest. It encourages other countries in the guise of reverse comity or worse, unabashed retaliation to discriminate against us in their own jurisdictions by authorizing their own nationals to similarly equal and defeat the higher bids of Filipino enterprises solely, while on the other hand, allowing similar bids of other foreigners to remain unchallenged by their nationals. The majority's thesis will thus marginalize Filipinos as pariahs in the global marketplace with absolute no chance of winning any bidding outside our country. Even authoritarian regimes and hermit kingdoms have long ago found out unfairness, greed and isolation are self-defeating and in the long-term, self-destructing. The moral lesson here is simple: Do not do unto other what you dont want other to do unto you. 3. In the absence of a law specifying the degree or extent of the "Filipino First" policy of the Constitution, the constitutional preference for the "qualified Filipinos" may be allowed only where all the bids are equal. In this manner, we put the Filipino ahead without selfdestructing him and without being unfair to the foreigner. In short, the Constitution mandates a victory for the qualified Filipino only when the scores are tied. But not when the ballgame is over and the foreigner clearly posted the highest score. Footnotes 1 See Sec. 10, par. 2, Art. XII, 1987 Constitution

2 Par I. Introduction and Highlights; Guidelines and Procedures: Second Prequailifications and Public Bidding of the MHC Privatization; Annex "A," Consolidated Reply to Comments of Respondents; Rollo, p. 142. 3 Par. V. Guidelines for the Public Bidding, id., pp. 153-154. 4 Annex "A," Petition for Prohibition and Mandamus with Temporary Restraining Order; Rollo, pp. 13-14. 5 Annex "B," Petition for Prohibition and Mandamus with Temporary Restraining Order; id., p. 15. 6 Petition for Prohibition and Mandamus with Temporary Restraining Order, pp. 5-6; id., pp. 6-7. 7 Consolidated Reply to Comments of Respondents, p. 17; id., p. 133. 8 Par. V.J. 1, Guidelines for Public Bidding, Guidelines and Procedures: second Prequalifications and Public Bidding of the MHC Privatization, Annex "A," Consolidated Reply to Comments of Respondents; id., p. 154. 9 Respondents' Joint Comment with Urgent Motion to Lift Temporary Restraining Order, p. 9; Rollo, p. 44. 10 Marbury v. Madison, 5, U.S. 138 (1803). 11 Am Jur. 606. 12 16 Am Jur. 2d 281. 13 Id., p. 282. 14 See Note 12. 15 Cruz, Isagani A., Constitutional Law, 1993 ed., pp. 8-10. 16 Record of the Constitutional Commission, Vol. 3, 22 August 1986, p. 608.

17 16 Am Jur 2d 283-284. 18 Sec. 10, first par., reads: The Congress shall, upon recommendation of the economic and planning agency, when the national interest dictates, reserve to citizens of the Philippines or to corporations or associations at least sixty per centum of whose capital is owned by such citizens, or such higher percentage as Congress may prescribe, certain areas of investments. The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos. Sec. 10, third par., reads: The State shall regulate and exercise authority over foreign investments within its national jurisdiction and in accordance with its national goals and priorities. 19 State ex rel. Miller v. O'Malley, 342 Mo. 641, 117 SW2d 319. 20 G.R. No. 91649, 14 May 1991, 197 SCRA 52. 21 Sec. 11, Art. II (Declaration of Principles and State Policies), provides that [t]he State values the dignity of every human person and guarantees full respect for human rights. 22 Sec. 12, Art. II, provides that [t]he State recognizes the sanctity of family life and shall protect and strengthen the family as a basic autonomous social institution. It shall equally protect the life of the mother and the life of the unborn from conception. The natural and primary right and duty of parents in the rearing of the youth for civic efficiency and the development of moral character shall receive the support of the government. 23 Sec. 13, Art. II, provides that [t]he State recognizes the vital role of the youth in nation-building and shall promote and protect their physical, moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and encourage their involvement in public and civic affairs. 24 Sec. 1, Art. XIII (Social Justice and Human Rights), provides that [t]he Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic and political inequalities, and

remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. Sec. 2, Art. XIII, provides that [t]he promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance. 25 Sec. 2, Art. XIV (Education, Science and Technology, Arts, Culture, and Sports), provides that [t]he State shall: (1) Establish, maintain, and support a complete, adequate, and integrated system of education relevant to the needs of the people and society; (2) Establish and maintain a system of free public education in the elementary and high school levels. Without limiting the natural right of parents to rear their children, elementary education is compulsory for all children of school age; (3) Establish and maintain a system of scholarship grants, student loan programs, subsidies, and other incentives which shall be available to deserving students in both public and private schools, especially to the underprivileged. (4) Encourage non-formal, informal, and indegenous learning, independent, and out-of-school study programs particularly those that respond to community needs; and (5) Provide adult citizens, the disabled, and out-of-school youth with training in civics, vocational efficiency, and other skills. 26 G.R. 115455, 25 August 1994, 235 SCRA 630. 27 See Note 25. 28 Sec. 1 Art. XIV, provides that [t]he State shall protect and promote the right of all citizens to quality education at all levels of education and shall take appropriate steps to make such education accessible

to all. 29 G.R. No. 118910, 17 July 1995. 30 Sec. 5 Art. II (Declaration of Principles and State Policies), provides that [t]he maintenance of peace and order, the protection of life, liberty, and property, and the promotion of the general welfare are essential for the enjoyment by all the people of the blessings of democracy. 31 See Note 23. 32 See Note 24. 33 Sec. 17, Art II, provides that [t]he State shall give priority to education, science and technology, arts, culture, and sports to foster patriotism and nationalism, accelerate social progress, and promote total human liberation and development. 34 Nolledo, Jose N., The New Constitution of the Philippines Annotated, 1990 ed., p. 72. 35 Webster's Third New International Dictionary, 1986 ed., p. 1656. 36 The guest list of the Manila Hotel includes Gen. Douglas MacArthur, the Duke of Windsor, President Richard Nixon of U.S.A., Emperor Akihito of Japan, President Dwight Eisenhower of U.S.A, President Nguyen Van Thieu of Vietnam, President Park Chung Hee of Korea, Prime Minister Richard Holt of Australia, Prime Minister Keith Holyoake of New Zealand, President Lyndon Johnson of U.S.A., President Jose Lopez Portillo of Mexico, Princess Margaret of England, Prime Minister Malcolm Fraser of Australia, Prime Minister Yasuhiro Nakasone of Japan, Prime Minister Pierre Elliot Trudeau of Canada, President Raul Alfonsin of Argentina, President Felipe Gonzalez of Spain, Prime Minister Noboru Takeshita of Japan, Prime Minister Hussain Muhammad Ershad of Bangladesh, Prime Minister Bob Hawke of Australia, Prime Minister Yasuhiro Nakasone of Japan, Premier Li Peng of China, Sultan Hassanal Bolkiah of Brunei, President Ramaswani Venkataraman of India, Prime Minister Go Chok Tong of Singapore, Prime Minister Enrique Silva Cimma of Chile, Princess Chulaborn and Mahacharri Sirindhorn of Thailand,

Prime Minister Tomiichi Murayama of Japan, Sultan Azlan Shah and Raja Permaisuri Agong of Malaysia, President Kim President Young Sam of Korea, Princess Infanta Elena of Spain, President William Clinton of U.S.A., Prime Minister Mahathir Mohamad of Malaysia, King Juan Carlos I and Queen Sofia of Spain, President Carlos Saul Menem of Argentina, Prime Ministers Chatichai Choonvan and Prem Tinsulanonda of Thailand, Prime Minister Benazir Bhutto of Pakistan, President Vaclav Havel of Czech Republic, Gen. Norman Schwarzcopf of U.S.A, President Ernesto Perez Balladares of Panama, Prime Minister Adolfas Slezevicius of Lithuania, President Akbar Hashemi Rafsanjani of Iran, President Frei Ruiz Tagle of Chile, President Le Duc Anh of Vietnam, and Prime Minister Julius Chan of Papua New Guinea, see Memorandum for Petitioner, pp. 16-19. 37 Authored by Beth Day Romulo. 38 See Note 9, pp. 15-16; Rollo, pp. 50-51. 39 Record of the Constitutional Commission. Vol. 3, 22 August 1986. p. 607. 40 Id., p. 612. 41 Id., p. 616. 42 Id., p. 606. 43 Nolledo, J.N., The New Constitution of the Philippines Annotated, 1990 ed., pp. 930-931. 44 Bidders were required to have at least one of the these qualifications to be able to participate in the bidding process; see Note 2. 45 Memorandum of Fr. Joaquin G. Bernas, S.J., p. 6. 46 Id., pp. 3-4. 47 See Note 8. 48 Keynote Address at the ASEAN Regional Symposium of

Enforcement of Industrial Property Rights held 23 October 1995 at New World Hotel, Makati City. 49 Speech of Senior Associate Justice Teodoro R. Padilla at the Induction of Officers and Directors of the PHILCONSA for 1996 held 16 January 1996 at the Sky-Top, Hotel Intercontinental, Makati City. 50 Memorandum of Authorities submitted by former Chief Justice Enrique M. Fernando, p. 5. 51 8 March 1996 issue of Philippine Daily Inquirer, p. B13. PADILLA, J., concurring: 1 Article XII, Section 10, par. 2, 1987 Constitution. 2 Padilla, The 1987 Constitution of the Republic of the Philippines, Volume III, p. 89. 3 Sinco, Philippine Political Law, 11th ed, p. 112. 4 Nolledo, The New Constitution of the Philippines, Announced, 1990 ed., p. 72. 5 Memorandum for Petitioner, p. 1. 6 Laurel, Proceedings of the Philippine Constitutional Convention (1934-1935), p. 507. 7 Id., p. 562. VITUG, J., concurring: 1 Second par. Section 10, Art. XII, 1987 Constitution. MENDOZA, J., concurring: 1 Art. XII, 10, second paragraph. 2 GUIDELINES AND PROCEDURES: SECOND PREQUALIFICATION AND PUBLIC BIDDING OF THE MHC PRIVATIZATION (hereafter referred to as GUIDELINES), Part. V,

par. H(4).. 3 Id. 4 83 Phil. 242 (1949). 5 R.A. No. 37, 1. 6 87 Phil. 343 (1950). 7 104 Phil. 302 (1958). 8 Id, at 309. 9 For an excellent analysis of American cases on reverse discrimination in these areas, see GERALD GUNTHER, CONSTITUTIONAL LAW 780-819 (1991). 10 Art. II, 19: "The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos." (Emphasis added) 11 See Villegas v. Hiu Chiung Tsai Pao Ho, 86 SCRA 270 (1978) (invalidating an ordinance imposing a flat fee of P500 on aliens for the privilege of earning a livelihood). 12 Petitioner passed the criteria set forth in the GUIDELINES, Part IV, par. F(4), of the GSIS, relating to the following: a. Business management expertise, tract record, and experience b. Financial capability c. Feasibility and acceptability of the proposed strategic plan for the Manila Hotel. 13 GUIDELINES, Part V, par. (1)(3), in relation to Part. I. 14 Id., Part V, par. V (1). PUNO, J., dissenting:

1 Introduction and Highlights, Guidelines and Procedures: Second Prequalification and Public Bidding of the MHC Privatization, Annex "A" to Petitioner's Consolidated Reply to Comments of Respondents, Rollo, p. 142. 2 The four bidders who previously prequalified for the first bidding, namely, ITT Sheraton, Marriot International, Inc., Renaissance Hotel International, Inc., and the consortium of RCBC and the Ritz Carlton, were deemed prequalified for the second bidding. 3 Annex "A" to the Consolidated Reply to Comments of Respondents, Rollo, pp. 140-155. 4 Former Chief Justice Enrique Fernando and Commissioner Joaquin Bernas were invited by the Court as amicus curiae to shed light on its meaning. 5 Lopez v. de los Reyes, 55 Phil. 170, 190 [1930]. 6 16 Am Jur 2d, Constitutional Law, Sec. 139 p. 510 [1979 ed. ]; 6 R.C.L. Sec. 52 p. 57 [1915]; see also Willis v. St. Paul Sanitation Co. 48 Minn. 140, 50 N.W. 1110, 31 A.J.R. 626, 16 L.R.A. 281 [1892]; State ex rel. Schneider v. Kennedy, 587 P. 2d 844, 225 Kan [1978]. 7 Willis v. St. Paul Sanitation, supra, at 1110-1111; see also Cooley, A Treatise on Constitutional Limitations 167, vol. 1 [1927]. 8 16 C.J.S., Constitutional Law, Sec. 48, p. 100. 9 Cooley, supra, at 171; 6 R.C.L. Sec. 53, pp. 57-58; Brice v. McDow, 116 S.C. 324, 108 S.E. 84, 87 [1921]; see also Gonzales, Philippine Constitutional Law p. 26 [1969]. 10 16 C.J.S., Constitutional Law, Sec. 48, p. 101. 11 Way v. Barney, 116 Minn. 285, 133 N.W. 801, 804 38 L.R.A. (N.S.) 648, Ann. Cas. 1913 A, 719 [1911]; Brice v. McDow, supra, at 87; Morgan v. Board of Supervisors, 67 Ariz. 133, 192 P. 2d 236, 241 [1948]; Gonzales, supra.. 12 Ninth Decennial Digest Part I, Constitutional Law, (Key No. 28), p.

1638. 13 Article III, Section 2; see Webb v. de Leon, 247 SCRA 652 [1995]; People v. Saycon, 236 SCRA 325 (1994]; Allado v. Diokno, 232 SCRA 192 (1994]; Burgos v. Chief of Staff, 133 SCRA 800 [1984]; Yee Sue Kuy v. Almeda, 70 Phil. 141 [1940]; Pasion Vda. de Garcia v. Locsin, 65 Phil. 689 [1938]; and a host of other cases. 14 Article III, Section 12, pars. 1 to 3; People v. Alicando, 251 SCRA 293 [1995]; People v. Bandula 232 SCRA 566 [1994]; People v. Nito 228 SCRA 442 [1993]; People v. Duero, 104 SCRA 379 [1981]; People v. Galit, 135 SCRA 465 [1985]; and a host of other cases. 15 Article III, Section 14; People v. Digno, 250 SCRA 237 [1995]; People v. Godoy, 250 SCRA 676 [1995]; People v. Colcol 219 SCRA [1993]; Borja v. Mendoza, 77 SCRA 422 [1977]; People v. Dramayo, 42 SCRA 59 [1971]; and a host of other cases. 16 Galman v. Pamaran, 138 SCRA 274 [1985]; Chavez v. Court of Appeals 24 SCRA 663 [1968]; People v. Otadura, 86 Phil. 244 [1950]; Bermudez v. Castillo, 64 Phil, 485 [1937]; and a host of other cases. 17 Harley v. Schuylkill County, 476 F. Supp, 191, 195-196 [1979]; Erdman v. Mitchell, 207 Pa. St. 79, 56 Atl. 327, 99 A.S.R. 783 63 L.R.A. 534 [1903]; see Ninth Decennial Digest Part I, Constitutional Law, (Key No. 28), pp. 1638-1639. 18 City of Chicago v. George F. Harding Collection, 217 N.E. 2d 381, 383, 70 Ill. App. 2d 254 [1966]; People v. Buellton Dev. Co., 136 P. 2d 793, 796, 58 Cal. App. 2d 178 [1943]; Bordy v. State, 7 N.W. 2d 632, 635, 142 Neb. 714 [1943]; Cohen v. City of Chicago, 36 N.E. 2d 220, 224, 377 Ill 221 [1941]. 19 16 Am Jur 2d, Constitutional Law, Sec. 143, p. 514; 16 C.J.S. Constitutional Law, Sec. 48, p. 100; 6 R.C.L. Sec. 54, p. 59; see also State ex rel. Noe v. Knop La. App. 190 So. 135, 142 [1939]; State ex rel. Walker v. Board of Comm'rs. for Educational Lands and Funds, 3 N.W. 2d 196, 200, 141 Neb. 172 [1942]; Maddox v. Hunt, 83 P. 2d 553, 556, 83 Okl. 465 [1938]. 20 Article II, Sections 11, 12 and 13 (Basco v. Phil. Amusements and

Gaming Corporation, 197 SCRA 52, 68 [1991]); Sections 5, 12, 13 and 17 (Kilosbayan, Inc. v. Morato, 246 SCRA 540, 564 [1995]). 21 Article XIII, Section 13 (Basco, supra). 22 Article XIV, Section 2 (Basco, supra). 23 Kilosbayan v. Morato, supra, at 564. 24 Basco v. Phil. Amusements and Gaming Corporation, supra, at 68. 25 Congress had previously passed the Retail Trade Act (R.A. 1180); the Private Security Agency Act (R.A. 5487; the law on engaging in the rice and corn industry (R.A. 3018, P.D. 194), etc. 26 Or such higher percentage as Congress may prescribe. 27 Article XIV, section 3 of the 1973 Constitution reads: "Sec. 3. The Batasang Pambansa shall, upon recommendation of the National Economic and Development Authority, reserve to citizens of the Philippines or to corporations or associations wholly owned by such citizens, certain traditional areas of investments when the national interest so dictates," 28 101 Phil. 1155 [1957]. 29 See Bernas, The Constitution of the Republic of the Philippines 450, vol. II [1988]. The Lao Ichong case upheld the Filipinization of the retail trade and implied that particular areas of business may be Filipinized without doing violence to the equal protection clause of the Constitution. 30 Nolledo The New Constitution of the Philippines, Annotated, 1990 ed., p. 72. The word "patrimony" first appeared in the preamble of the 1935 Constitution and was understood to cover everything that belongs to the Filipino people, the tangible and the material as well as the intangible and the spiritual assets and possessions of the nation (Sinco, Philippine Political Law, Principles and Concepts [1962 ed.], p. 112; Speech of Delegate of Conrado Benitez defending the draft

preamble of the 1935 Constitution in Laurel, Proceedings of the Constitutional Convention, vol. III, p. 325 [1966]). 31 Commissioned by the Manila Hotel Corporation for the Diamond Jubilee celebration of the Hotel in 1987; see The Manila Hotel: The Heart and Memory of a City.any 32 Section 7 of R.A. 4846 provides: Sec. 7. In the designation of a particular cultural property as a .national cultural treasure," the following procedure shall be observed: (a) Before the actual designation, the owner, if the property is privately owned, shall be notified at least fifteen days prior to the intended designation, and he shall be invited to attend the deliberation and given a chance to be heard. Failure on the part of the owner to attend the deliberation shall not bar the panel to render its decision. Decision shall be given by the panel within a week after its deliberation. In the event that the owner desires to seek reconsideration of the designation made by the panel, he may do so within thirty days from the date that the decision has been rendered. If no request for reconsideration is filed after this period, the designation is then considered final and executory. Any request for reconsideration filed within thirty days and subsequently again denied by the panel, may be further appealed to another panel chairmanned by the Secretary of Education with two experts as members appointed by the Secretary of Education. Their decision shall final and binding. (b) Within each kind or class of objects, only the rare and unique objects may be designated as "National Cultural Treasures." The remainder, if any shall be treated as cultural property. xxx xxx xxx 33 P.D. 1146, Sec, 5; P.D, 1146, known as "The Revised Government Service Insurance Act of 1977" amended Commonwealth Act No. 186, the "Government Service Insurance Act" of 1936.

34 Beronilla v. Government Service Insurance System, 36 SCRA 44, 53 [1970]; Social Security System Employees Association v. Soriano, 7 SCRA 1016, 1023 [1963]. 35 Id., secs. 28 and 29. 36 Id., Sec. 30. 37 Constitution, Article IX (B), section 2 (1). 38 Constitution, Article IX (D), section 2 (1). 39 It is meet to note that our laws do not debar foreigners from engaging in the hotel business. Republic Act No. 7042, entitled the "Foreign Investments Act of 1991" was enacted by Congress to "attract, promote and welcome . . . foreign investments . . . in activities which significantly contribute to national industrialization and socio-economic development to the extent that foreign investment is allowed by the Constitution and relevant laws." The law contains a list, called the Negative List specifying areas of economic activity where foreign participation is limited or prohibited. Areas of economic activity not included in the Negative List are open to foreign participation up to one hundred per cent (Sees. 6 and 7). Foreigners now own and run a great number of our five-star hotels.

Republic of the Philippines SUPREME COURT Manila EN BANC A.M. No. 11-7-10-SC July 31, 2012

Re: COA Opinion on the Computation of the Appraised Value of the Properties Purchased by the Retired Chief/Associate Justices of the Supreme Court. RESOLUTION PER CURIAM: The present administrative matter stems from the two Memoranda, dated July 14, 2011 and August 10, 2010, submitted by Atty. Eden T. Candelaria, Deputy Clerk of Court and Chief Administrative Officer, Office of Administrative Services, to the Office of the Chief Justice. These Memoranda essentially ask the Court to determine the proper formula to be used in computing the appraisal value that a retired Chief Justice and several Associate Justices of the Supreme Court have to pay to acquire the government properties they used during their tenure. THE FACTUAL ANTECEDENTS This issue has its roots in the June 8, 2010 Opinion1 issued by the Legal Services Sector, Office of the General Counsel of the Commission on Audit (COA), which found that an underpayment amounting to P221,021.50 resulted when five (5) retired Supreme Court justices purchased from the Supreme Court the personal properties assigned to them during their incumbency in the Court, to wit:
1wphi1

Name of Justice

Items Purchased

Valuation under CFAG (in pesos)

Valuation under COA Memorandum No. 98-569A

Differen ce (in pesos)

Artemio Panganiban (Chief Justice)

Toyota Camry, 2003 model Toyota Grandia, 2002 model Toyota Camry, 2001 model Toyota Camry, 2005 model Toyota Grandia, 2003 model Toyota Grandia, 2002 model

341,241.10 136,500.00 115,800.00 579,532.50 117,300.00 115,800.00

(in pesos) 365,000.00 151,000.00 156,000.00 580,600.00 181,200.00 150,600.00 543,300.00 145,000.00 2,500.00

23,758.9 0

Ruben T. Reyes (Associate Justice) Angelina S. Gutierrez (Associate Justice) Adolfo S. Azcuna (Associate Justice)

14,500.0 0 40,200.0 0 1,067.50

63,900.0 0 34,800.0 0

Toyota Camry, 536,105.00 2005 model Toyota Grandia, 117,300.00 2002 model Sony TV Set 2,399.90

9,195.00

Ma. Alicia The COA attributed this underpayment to the use by the Property Division of the Supreme Court of the wrong formula in computing the appraisal value of the purchased vehicles. According to the COA, the Property Division erroneously appraised the subject motor vehicles by applying Constitutional Fiscal Autonomy Group (CFAG) Joint Resolution No. 35 dated April 23, 1997 and its guidelines, in compliance with the Resolution of the Court En Banc dated March 23, 2004 in A.M. No. 03-12-01,3 when it should have applied the formula found in COA Memorandum No. 98-569-A4 dated August 5, 1998. Recommendations of the Office of Administrative Services In her Memorandum dated August 10, 2010, Atty. Candelaria recommended that the Court advise the COA to respect the in-house computation based on the CFAG formula, noting that this was the first time that the COA questioned the authority of the Court in using CFAG Joint Resolution No. 35 and its guidelines in the appraisal and disposal of government property since these were issued in 1997. As a matter of fact, in two previous instances involving two (2) retired Court of

27,700.0 0 100.10 5,800.00

Appeals Associate Justices,5 the COA upheld the in-house appraisal of government property using the formula found in the CFAG guidelines. More importantly, the Constitution itself grants the Judiciary fiscal autonomy in the handling of its budget and resources. Full autonomy, among others,6 contemplates the guarantee of full flexibility in the allocation and utilization of the Judiciarys resources, based on its own determination of what it needs. The Court thus has the recognized authority to allocate and disburse such sums as may be provided or required by law in the course of the discharge of its functions.7 To allow the COA to substitute the Courts policy in the disposal of its property would be tantamount to an encroachment into this judicial prerogative. OUR RULING We find Atty. Candelarias recommendation to be well-taken. The COAs authority to conduct post-audit examinations on constitutional bodies granted fiscal autonomy is provided under Section 2(1), Article IX-D of the 1987 Constitution, which states: Section 2. (1) The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including government-owned or controlled corporations with original charters, and on a post-audit basis: (a) constitutional bodies, commissions and offices that have been granted fiscal autonomy under this Constitution. emphasis ours This authority, however, must be read not only in light of the Courts fiscal autonomy, but also in relation with the constitutional provisions on judicial independence and the existing jurisprudence and Court rulings on these matters. Separation of Powers and Judicial Independence In Angara v. Electoral Commission,8 we explained the principle of separation of powers, as follows:

The separation of powers is a fundamental principle in our system of government. It obtains not through express provision but by actual division in our Constitution. Each department of the government has exclusive cognizance of matters within its jurisdiction, and is supreme within its own sphere. But it does not follow from the fact that the three powers are to be kept separate and distinct that the Constitution intended them to be absolutely unrestrained and independent of each other. The Constitution has provided for an elaborate system of checks and balances to secure coordination in the workings of the various departments of the government. x x x And the judiciary in turn, with the Supreme Court as the final arbiter, effectively checks the other departments in the exercise of its power to determine the law, and hence to declare executive and legislative acts void if violative of the Constitution.9 The concept of the independence of the three branches of government, on the other hand, extends from the notion that the powers of government must be divided to avoid concentration of these powers in any one branch; the division, it is hoped, would avoid any single branch from lording its power over the other branches or the citizenry.10 To achieve this purpose, the divided power must be wielded by co-equal branches of government that are equally capable of independent action in exercising their respective mandates; lack of independence would result in the inability of one branch of government to check the arbitrary or self-interest assertions of another or others.11 Under the Judiciarys unique circumstances, independence encompasses the idea that individual judges can freely exercise their mandate to resolve justiciable disputes, while the judicial branch, as a whole, should work in the discharge of its constitutional functions free of restraints and influence from the other branches, save only for those imposed by the Constitution itself.12 Thus, judicial independence can be "broken down into two distinct concepts: decisional independence and institutional independence."13 Decisional independence "refers to a judges ability to render decisions free from political or popular influence based solely on the individual facts and applicable law."14 On the other hand, institutional independence "describes the separation of the judicial branch from the executive and legislative branches of government."15 Simply put,

institutional independence refers to the "collective independence of the judiciary as a body."16 In the case In the Matter of the Allegations Contained in the Columns of Mr. Amado P. Macasaet Published in Malaya Dated September 18, 19, 20 and 21, 2007,17 the Court delineated the distinctions between the two concepts of judicial independence in the following manner: One concept is individual judicial independence, which focuses on each particular judge and seeks to insure his or her ability to decide cases with autonomy within the constraints of the law. A judge has this kind of independence when he can do his job without having to hear or at least without having to take it seriously if he does hear criticisms of his personal morality and fitness for judicial office. The second concept is institutional judicial independence. It focuses on the independence of the judiciary as a branch of government and protects judges as a class. A truly independent judiciary is possible only when both concepts of independence are preserved - wherein public confidence in the competence and integrity of the judiciary is maintained, and the public accepts the legitimacy of judicial authority. An erosion of this confidence threatens the maintenance of an independent Third Estate. italics and emphases ours Recognizing the vital role that the Judiciary plays in our system of government as the sole repository of judicial power, with the power to determine whether any act of any branch or instrumentality of the government is attended with grave abuse of discretion,18 no less than the Constitution provides a number of safeguards to ensure that judicial independence is protected and maintained. The Constitution expressly prohibits Congress from depriving the Supreme Court of its jurisdiction, as enumerated in Section 5, Article VII of the Constitution, or from passing a law that undermines the security of tenure of the members of the judiciary.19 The Constitution also mandates that the judiciary shall enjoy fiscal autonomy,20 and grants the Supreme Court administrative supervision over all courts and judicial personnel. Jurisprudence21 has characterized administrative supervision as exclusive, noting that only the Supreme Court can oversee the judges and court personnel's compliance with

all laws, rules and regulations. No other branch of government may intrude into this power, without running afoul of the doctrine of separation of powers.22 The Constitution protects as well the salaries of the Justices and judges by prohibiting any decrease in their salary during their continuance in office,23 and ensures their security of tenure by providing that "Members of the Supreme Court and judges of lower courts shall hold office during good behavior until they reach the age of seventy years or become incapacitated to discharge the duties of their office."24 With these guarantees, justices and judges can administer justice undeterred by any fear of reprisals brought on by their judicial action. They can act inspired solely by their knowledge of the law and by the dictates of their conscience, free from the corrupting influence of base or unworthy motives.25 All of these constitutional provisions were put in place to strengthen judicial independence, not only by clearly stating the Courts powers, but also by providing express limits on the power of the two other branches of government to interfere with the Courts affairs. Fiscal Autonomy One of the most important aspects of judicial independence is the constitutional grant of fiscal autonomy. Just as the Executive may not prevent a judge from discharging his or her judicial duty (for example, by physically preventing a court from holding its hearings) and just as the Legislature may not enact laws removing all jurisdiction from courts,26 the courts may not be obstructed from their freedom to use or dispose of their funds for purposes germane to judicial functions. While, as a general proposition, the authority of legislatures to control the purse in the first instance is unquestioned, any form of interference by the Legislative or the Executive on the Judiciarys fiscal autonomy amounts to an improper check on a co-equal branch of government. If the judicial branch is to perform its primary function of adjudication, it must be able to command adequate resources for that purpose. This authority to exercise (or to compel the exercise of) legislative power over the national purse (which at first blush appears to be a violation of concepts of separateness and an invasion of legislative autonomy) is necessary to maintain judicial

independence27 and is expressly provided for by the Constitution through the grant of fiscal autonomy under Section 3, Article VIII. This provision states: Section 3. The Judiciary shall enjoy fiscal autonomy. Appropriations for the Judiciary may not be reduced by the legislature below the amount appropriated for the previous year and, after approval, shall be automatically and regularly released. In Bengzon v. Drilon,28 we had the opportunity to define the scope and extent of fiscal autonomy in the following manner: As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom and dispatch that their needs require. It recognizes the power and authority to levy, assess and collect fees, fix rates of compensation not exceeding the highest rates authorized by law for compensation and pay plans of the government and allocate and disburse such sums as may be provided by law or prescribed by them in the course of the discharge of their functions. Fiscal autonomy means freedom from outside control. If the Supreme Court says it needs 100 typewriters but DBM rules we need only 10 typewriters and sends its recommendations to Congress without even informing us, the autonomy given by the Constitution becomes an empty and illusory platitude. The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the manner the independent constitutional offices allocate and utilize the funds appropriated for their operations is anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as regards the Supreme Court, of the independence and separation of powers upon which the entire fabric of our constitutional system is based. In the interest of comity and cooperation, the Supreme Court, Constitutional Commissions, and the Ombudsman have so far limited their

objections to constant reminders. We now agree with the petitioners that this grant of autonomy should cease to be a meaningless provision.29 (emphases ours) In this cited case, the Court set aside President Corazon Aquinos veto of particular provisions of the General Appropriations Act for the Fiscal Year 1992 relating to the payment of the adjusted pensions of retired justices of the Supreme Court and the Court of Appeals, on the basis of the Judiciarys constitutionally guaranteed independence and fiscal autonomy. The Court ruled: In the case at bar, the veto of these specific provisions in the General Appropriations Act is tantamount to dictating to the Judiciary how its funds should be utilized, which is clearly repugnant to fiscal autonomy. The freedom of the Chief Justice to make adjustments in the utilization of the funds appropriated from the expenditures of the judiciary, including the use of any savings from any particular item to cover deficits or shortages in other items of the Judiciary is withheld. Pursuant to the Constitutional mandate, the Judiciary must enjoy freedom in the disposition of the funds allocated to it in the appropriations law. It knows its priorities just as it is aware of the fiscal restraints. The Chief Justice must be given a free hand on how to augment appropriations where augmentation is needed.30 The Courts declarations in Bengzon make it clear that the grant of fiscal autonomy to the Judiciary is more extensive than the mere automatic and regular release of its approved annual appropriations;31 real fiscal autonomy covers the grant to the Judiciary of the authority to use and dispose of its funds and properties at will, free from any outside control or interference. Application to the Present Case The Judiciarys fiscal autonomy is realized through the actions of the Chief Justice, as its head, and of the Supreme Court En Banc, in the exercise of administrative control and supervision of the courts and its personnel. As the Court En Bancs Resolution (dated March 23, 2004) in A.M. No. 03-12-01 reflects, the fiscal autonomy of the Judiciary serves as the basis in allowing the sale of the Judiciarys properties to retiring Justices of the Supreme Court and the appellate

courts: WHEREAS, by the constitutional mandate of fiscal autonomy as defined in Bengzon v. Drilon (G.R. No. 103524, 15 April 1992, 208 SCRA 133, 150) the Judiciary has "full flexibility to allocate and utilize (its) resources with the wisdom and dispatch that (its) needs require"; WHEREAS, the long-established tradition and practice of Justices or Members of appellate courts of purchasing for sentimental reasons at retirement government properties they used during their tenure has been recognized as a privilege enjoyed only by such government officials; and WHEREAS, the exercise of such privilege needs regulation to the end that respect for sentiments that a retiring Justice attaches to properties he or she officially used during his or her tenure should be in consonance with the need for restraint in the utilization and disposition of government resources. By way of a long standing tradition, partly based on the intention to reward long and faithful service, the sale to the retired Justices of specifically designated properties that they used during their incumbency has been recognized both as a privilege and a benefit. This has become an established practice within the Judiciary that even the COA has previously recognized.32 The En Banc Resolution also deems the grant of the privilege as a form of additional retirement benefit that the Court can grant its officials and employees in the exercise of its power of administrative supervision. Under this administrative authority, the Court has the power to administer the Judiciarys internal affairs, and this includes the authority to handle and manage the retirement applications and entitlements of its personnel as provided by law and by its own grants.33 Thus, under the guarantees of the Judiciarys fiscal autonomy and its independence, the Chief Justice and the Court En Banc determine and decide the who, what, where, when and how of the privileges and benefits they extend to justices, judges, court officials and court personnel within the parameters of the Courts granted power; they determine the terms, conditions and restrictions of the grant as grantor.

In the context of the grant now in issue, the use of the formula provided in CFAG Joint Resolution No. 35 is a part of the Courts exercise of its discretionary authority to determine the manner the granted retirement privileges and benefits can be availed of. Any kind of interference on how these retirement privileges and benefits are exercised and availed of, not only violates the fiscal autonomy and independence of the Judiciary, but also encroaches upon the constitutional duty and privilege of the Chief Justice and the Supreme Court En Banc to manage the Judiciarys own affairs. As a final point, we add that this view finds full support in the Government Accounting and Auditing Manual (GAAM), Volume 1, particularly, Section 501 of Title 7, Chapter 3, which states: Section 501. Authority or responsibility for property disposal/divestment. The full and sole authority and responsibility for the divestment and disposal of property and other assets owned by the national government agencies or instrumentalities, local government units and government-owned and/or controlled corporations and their subsidiaries shall be lodged in the heads of the departments, bureaus, and offices of the national government, the local government units and the governing bodies or managing heads of government-owned or controlled corporations and their subsidiaries conformably to their respective corporate charters or articles of incorporation, who shall constitute the appropriate committee or body to undertake the same. italics supplied; emphases ours This provision clearly recognizes that the Chief Justice, as the head of the Judiciary, possesses the full and sole authority and responsibility to divest and dispose of the properties and assets of the Judiciary; as Head of Office, he determines the manner and the conditions of disposition, which in this case relate to a benefit. As the usual practice of the Court, this authority is exercised by the Chief Justice in consultation with the Court En Banc. However, whether exercised by the Chief Justice or by the Supreme Court En Banc, the grant of such authority and discretion is unequivocal and leaves no room for interpretations and insertions. ACCORDINGLY, premises considered, the in-house computation of

the appraisal value made by the Property Division, Office of `Administrative Services, of the properties purchased by the retired Chief Justice and Associate Justices of the Supreme Court, based on CFAG Joint Resolution No. 35 dated April 23, 1997, as directed under the Court Resolution dated March 23, 2004 in A.M. No. 03-1201, is CONFIRMED to be legal and valid. Let the Commission on Audit be accordingly advised of this Resolution for its guidance. SO ORDERED. ANTONIO T. CARPIO Senior Associate Justice PRESBITERO J. VELASCO, JR. Associate Justice ARTURO D. BRION Associate Justice LUCAS P. BERSAMIN Associate Justice ROBERTO A. ABAD Associate Justice

TERESITA J. LEONARDOAssociate Justic DIOSDADO M. PER Associate Justic MARIANO C. DEL CA Associate Justic MARTIN S. VILLARA Associate Justic (On Leave) JOSE PORTUGAL PEREZ JOSE CATRAL MEN Associate Justice Associate Justic MARIA LOURDES P.A. SERENO BIENVENIDO L. RE Associate Justice Associate Justic ESTELA M. PERLAS-BERNABE Associate justice Footnotes
*

On Leave. Opinion No. 2010-035.

The amount of P5,800.00 allegedly underpaid by retired Associate Justice Ma. Alicia Austria-Martinez in the purchase of an unspecified item was subsequently included via the COAs letter dated July 6, 2011.
3

Resolution Adopting Guidelines on the Purchase of Judiciary Properties by Retiring Members of the Supreme Court and Appellate

Courts.
4

Revised Guidelines on Appraisal of Property other than Real Estate, Antique Property and Works of Art.
5

LAO-N-2003-262 Request of Retired Justice Oswaldo D. Agcaoili, Court of Appeals, for the reduction in the appraised value of one unit Mazda E2000 Power Van Model 1998 from P192,000.00 to P52,000.00); and LAO-N-2004-296 Request of Retired Justice Buenaventura J. Guerrero, Court of Appeals, for reconsideration of the value of one (1) unit Honda Civic, which he intends to purchase from P362,999.98 to P330,299.12.
6

Section 3, Article VIII of the 1987 Constitution provides, "The Judiciary shall enjoy fiscal autonomy."
7

See Bengzon v. Drilon, G.R. No. 103524, April 15, 1992, 208 SCRA 133, 150.
8

63 Phil. 139 (1936). Id. at 156-157.

10

CARL BAAR, SEPARATE BUT SUBSERVIENT: COURT BUDGETING IN THE AMERICAN STATES 149-52 (1975), cited in Jeffrey Jackson, Judicial Independence, Adequate Court Funding, and Inherent Judicial Powers, 52 Md. L. Rev. 217 (1993).
11

Jeffrey Jackson, Judicial Independence, Adequate Court Funding, and Inherent Judicial Powers, 52 Md. L. Rev. 217 (1993).
12

Joseph M. Hood, Judicial Independence, 23 J. National Association Admin. L. Judges 137, 138 (2003) citing American Judicature Society, What is Judicial Independence? (November 27, 2002), at http://www.ajs.org/cji/cji_whatisji.asp (last visited April 14, 2003).
13

Ibid. Ibid. Ibid.

14

15

16

Gerard L. Chan, Lobbying the Judiciary: Public Opinion and Judicial Independence, 77 PLJ 73, 76 (2002).
17

A.M. No. 07-09-13-SC, August 8, 2008, 561 SCRA 395, 436. CONSTITUTION, Article VIII, Section 1. Id., Section 2. Id., Section 3.

18

19

20

21

Garcia v. Miro, G.R. No. 167409, March 20, 2009, 582 SCRA 127; Ampong v. Civil Service Commission, CSC-Regional Office No. 11, G.R. No. 167916, August 26, 2008, 563 SCRA 293; Judge Caoibes, Jr. v. Hon. Ombudsman, 413 Phil. 717 (2001); and Fuentes v. Office of the Ombudsman-Mindanao, G.R. No. 124295, October 23, 2001, 368 SCRA 36.
22

Ampong v. Civil Service Commission, CSC-Regional Office No. 11, supra, at 303, citing Maceda v. Vasquez, G.R. No. 102781, April 22, 1993, 221 SCRA 464.
23

CONSTITUTION, Article VIII, Section 10. Id., Section 11.

24

25

See De La Llana, etc., et al. v. Alba, etc., et al., 198 Phil. 1, 64 (1982).
26

See e.g., United States v. Klein, 80 U.S. (13 Wall.) 128 (1872), cited in Jeffrey Jackson, Judicial Independence, Adequate Court Funding, and Inherent Judicial Powers, 52 Md. L. Rev. 217 (1993).
27

See Juvenile Director, 522 P.2d at 168; Commonwealth ex rel. Carroll v. Tate, 274 A.2d 193, 197 (Pa.) cert. denied, 402 U.S. 974 (1971), cited in Jeffrey Jackson, Judicial Independence, Adequate Court Funding, and Inherent Judicial Powers, 52 Md. L. Rev. 217 (1993).
28

G.R. No. 103524, April 15, 1992, 208 SCRA 133.

29

Id. at 150-151. Id. at 151.

30

31

Commission on Human Rights Employees Association v. Commission on Human Rights, 528 Phil. 658, 675 (2006).
32

Supra note 5.

33

Circular No. 36-97 (Subject: Reorganization And Strengthening of the Office of the Court Administrator) pursuant to Presidential Decree No. 828, as amended by Presidential Decree No. 842, created the Office of the Court Administrator to assist the Supreme Court in the exercise of its power of administrative supervision over all courts as prescribed by the Constitution.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 113375 May 5, 1994 KILOSBAYAN, INCORPORATED, JOVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO, EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE, CHRISTINE TAN, FELIPE L. GOZON, RAFAEL G. FERNANDO, RAOUL V. VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL, SEN. FREDDIE WEBB, SEN. WIGBERTO TAADA, and REP. JOKER P. ARROYO, petitioners, vs. TEOFISTO GUINGONA, JR., in his capacity as Executive Secretary, Office of the President; RENATO CORONA, in his capacity as Assistant Executive Secretary and Chairman of the Presidential review Committee on the Lotto, Office of the President; PHILIPPINE CHARITY SWEEPSTAKES OFFICE; and PHILIPPINE GAMING MANAGEMENT CORPORATION, respondents. Jovito R. Salonga, Fernando Santiago, Emilio C. Capulong, Jr. and Felipe L. Gozon for petitioners. Renato L. Cayetano and Eleazar B. Reyes for PGMC. Gamaliel G. Bongco, Oscar Karaan and Jedideoh Sincero for intervenors.

DAVIDE, JR., J.: This is a special civil action for prohibition and injunction, with a prayer for a temporary restraining order and preliminary injunction, which seeks to prohibit and restrain the implementation of the "Contract of Lease" executed by the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corporation (PGMC) in connection with the on- line lottery system, also known as "lotto."

Petitioner Kilosbayan, Incorporated (KILOSBAYAN) avers that it is a non-stock domestic corporation composed of civic-spirited citizens, pastors, priests, nuns, and lay leaders who are committed to the cause of truth, justice, and national renewal. The rest of the petitioners, except Senators Freddie Webb and Wigberto Taada and Representative Joker P. Arroyo, are suing in their capacities as members of the Board of Trustees of KILOSBAYAN and as taxpayers and concerned citizens. Senators Webb and Taada and Representative Arroyo are suing in their capacities as members of Congress and as taxpayers and concerned citizens of the Philippines. The pleadings of the parties disclose the factual antecedents which triggered off the filing of this petition. Pursuant to Section 1 of the charter of the PCSO (R.A. No. 1169, as amended by B.P. Blg. 42) which grants it the authority to hold and conduct "charity sweepstakes races, lotteries and other similar activities," the PCSO decided to establish an on- line lottery system for the purpose of increasing its revenue base and diversifying its sources of funds. Sometime before March 1993, after learning that the PCSO was interested in operating an on-line lottery system, the Berjaya Group Berhad, "a multinational company and one of the ten largest public companies in Malaysia," long "engaged in, among others, successful lottery operations in Asia, running both Lotto and Digit games, thru its subsidiary, Sports Toto Malaysia," with its "affiliate, the International Totalizator Systems, Inc., . . . an American public company engaged in the international sale or provision of computer systems, softwares, terminals, training and other technical services to the gaming industry," "became interested to offer its services and resources to PCSO." As an initial step, Berjaya Group Berhad (through its individual nominees) organized with some Filipino investors in March 1993 a Philippine corporation known as the Philippine Gaming Management Corporation (PGMC), which "was intended to be the medium through which the technical and management services required for the project would be offered and delivered to PCSO." 1 Before August 1993, the PCSO formally issued a Request for Proposal (RFP) for the Lease Contract of an on-line lottery system for the PCSO. 2 Relevant provisions of the RFP are the following:

1. EXECUTIVE SUMMARY xxx xxx xxx 1.2. PCSO is seeking a suitable contractor which shall build, at its own expense, all the facilities ('Facilities') needed to operate and maintain a nationwide on-line lottery system. PCSO shall lease the Facilities for a fixed percentage ofquarterly gross receipts. All receipts from ticket sales shall be turned over directly to PCSO. All capital, operating expenses and expansion expenses and risks shall be for the exclusive account of the Lessor. xxx xxx xxx 1.4. The lease shall be for a period not exceeding fifteen (15) years. 1.5. The Lessor is expected to submit a comprehensive nationwide lottery development plan ("Development Plan") which will include the game, the marketing of the games, and the logistics to introduce the games to all the cities and municipalities of the country within five (5) years. xxx xxx xxx 1.7. The Lessor shall be selected based on its technical expertise, hardware and software capability, maintenance support, and financial resources. The Development Plan shall have a substantial bearing on the choice of the Lessor. The Lessor shall be a domestic corporation, with at least sixty percent (60%) of its shares owned by Filipino shareholders. xxx xxx xxx The Office of the President, the National Disaster Control Coordinating Council, the Philippine National Police, and the National Bureau of Investigation shall be authorized to use the nationwide telecommunications system of the Facilities Free of Charge.
1.8. Upon expiration of the lease, the Facilities shall be owned by PCSO without any additional consideration. 3

xxx xxx xxx 2.2. OBJECTIVES The objectives of PCSO in leasing the Facilities from a private entity are as follows: xxx xxx xxx 2.2.2. Enable PCSO to operate a nationwide on-line Lottery system at no expense or risk to the government. xxx xxx xxx 2.4. DUTIES AND RESPONSIBILITIES OF THE LESSOR xxx xxx xxx 2.4.2. THE LESSOR The Proponent is expected to furnish and maintain the Facilities, including the personnel needed to operate the computers, the communications network and sales offices under a build-lease basis. The printing of tickets shall be undertaken under the supervision and control of PCSO. The Facilities shall enable PCSO to computerize the entire gaming system. The Proponent is expected to formulate and design consumeroriented Master Games Plan suited to the marketplace, especially geared to Filipino gaming habits and preferences. In addition, the Master Games Plan is expected to include a Product Plan for each game and explain how each will be introduced into the market. This will be an integral part of the Development Plan which PCSO will require from the Proponent. xxx xxx xxx The Proponent is expected to provide upgrades to modernize the entire gaming system over the life ofthe lease contract.
The Proponent is expected to provide technology transfer to PCSO technical personnel. 4

7. GENERAL GUIDELINES FOR PROPONENTS xxx xxx xxx

Finally, the Proponent must be able to stand the acid test of proving that it is an entity able to take on the role of responsible maintainer of the on-line lottery system, and able to achieve PSCO's goal of formalizing an on-line lottery system to achieve its mandated objective. 5

xxx xxx xxx 16. DEFINITION OF TERMS

Facilities: All capital equipment, computers, terminals, software, nationwide telecommunication network, ticket sales offices, furnishings, and fixtures; printing costs; cost of salaries and wages; advertising and promotion expenses; maintenance costs; expansion and replacement costs; security and insurance, and all other related expenses needed to operate nationwide on-line lottery system. 6

Considering the above citizenship requirement, the PGMC claims that the Berjaya Group "undertook to reduce its equity stakes in PGMC to 40%," by selling 35% out of the original 75% foreign stockholdings to local investors. On 15 August 1993, PGMC submitted its bid to the PCSO. 7 The bids were evaluated by the Special Pre-Qualification Bids and Awards Committee (SPBAC) for the on-line lottery and its Bid Report was thereafter submitted to the Office of the President. 8 The submission was preceded by complaints by the Committee's Chairperson, Dr. Mita Pardo de Tavera. 9 On 21 October 1993, the Office of the President announced that it had given the respondent PGMC the go-signal to operate the country's on-line lottery system and that the corresponding implementing contract would be submitted not later than 8 November 1993 "for final clearance and approval by the Chief Executive." 10 This announcement was published in the Manila Standard, Philippine Daily Inquirer, and the Manila Times on 29 October 1993. 11 On 4 November 1993, KILOSBAYAN sent an open letter to

Presidential Fidel V. Ramos strongly opposing the setting up to the on-line lottery system on the basis of serious moral and ethical considerations. 12 At the meeting of the Committee on Games and Amusements of the Senate on 12 November 1993, KILOSBAYAN reiterated its vigorous opposition to the on-line lottery on account of its immorality and illegality. 13 On 19 November 1993, the media reported that despite the opposition, "Malacaang will push through with the operation of an on-line lottery system nationwide" and that it is actually the respondent PCSO which will operate the lottery while the winning corporate bidders are merely "lessors." 14 On 1 December 1993, KILOSBAYAN requested copies of all documents pertaining to the lottery award from Executive Secretary Teofisto Guingona, Jr. In his answer of 17 December 1993, the Executive Secretary informed KILOSBAYAN that the requested documents would be duly transmitted before the end of the month. 15. However, on that same date, an agreement denominated as "Contract of Lease" was finally executed by respondent PCSO and respondent PGMC. 16 The President, per the press statement issued by the Office of the President, approved it on 20 December 1993. 17 In view of their materiality and relevance, we quote the following salient provisions of the Contract of Lease: 1. DEFINITIONS The following words and terms shall have the following respective meanings: 1.1 Rental Fee Amount to be paid by PCSO to the LESSOR as compensation for the fulfillment of the obligations of the LESSOR under this Contract, including, but not limited to the lease of the Facilities. xxx xxx xxx 1.3 Facilities All capital equipment, computers, terminals, software

(including source codes for the On-Line Lottery application software for the terminals, telecommunications and central systems), technology, intellectual property rights, telecommunications network, and furnishings and fixtures. 1.4 Maintenance and Other Costs All costs and expenses relating to printing, manpower, salaries and wages, advertising and promotion, maintenance, expansion and replacement, security and insurance, and all other related expenses needed to operate an OnLine Lottery System, which shall be for the account of the LESSOR. All expenses relating to the setting-up, operation and maintenance of ticket sales offices of dealers and retailers shall be borne by PCSO's dealers and retailers. 1.5 Development Plan The detailed plan of all games, the marketing thereof, number of players, value of winnings and the logistics required to introduce the games, including the Master Games Plan as approved by PCSO, attached hereto as Annex "A", modified as necessary by the provisions of this Contract. xxx xxx xxx 1.8 Escrow Deposit The proposal deposit in the sum of Three Hundred Million Pesos (P300,000,000.00) submitted by the LESSOR to PCSO pursuant to the requirements of the Request for Proposals. 2. SUBJECT MATTER OF THE LEASE The LESSOR shall build, furnish and maintain at its own expense and risk the Facilities for the On-Line Lottery System of PCSO in the Territory on an exclusive basis. The LESSOR shall bear all Maintenance and Other Costs as defined herein. xxx xxx xxx 3. RENTAL FEE For and in consideration of the performance by the LESSOR of its obligations herein, PCSO shall pay LESSOR a fixed Rental Fee equal to four point nine percent (4.9%) of gross receipts from ticket sales, payable net of taxes required by law to be withheld, on a semi-

monthly basis. Goodwill, franchise and similar fees shall belong to PCSO. 4. LEASE PERIOD The period of the lease shall commence ninety (90) days from the date of effectivity of this Contract and shall run for a period of eight (8) years thereafter, unless sooner terminated in accordance with this Contract. 5. RIGHTS AND OBLIGATIONS OF PCSO AS OPERATOR OF THE ON-LINE LOTTERY SYSTEM PCSO shall be the sole and individual operator of the On-Line Lottery System. Consequently: 5.1 PCSO shall have sole responsibility to decide whether to implement, fully or partially, the Master Games Plan of the LESSOR. PCSO shall have the sole responsibility to determine the time for introducing new games to the market. The Master Games Plan included in Annex "A" hereof is hereby approved by PCSO. 5.2 PCSO shall have control over revenues and receipts of whatever nature from the On-Line Lottery System. After paying the Rental Fee to the LESSOR, PCSO shall have exclusive responsibility to determine the Revenue Allocation Plan; Provided, that the same shall be consistent with the requirement of R.A. No. 1169, as amended, which fixes a prize fund of fifty five percent (55%) on the average. 5.3 PCSO shall have exclusive control over the printing of tickets, including but not limited to the design, text, and contents thereof. 5.4 PCSO shall have sole responsibility over the appointment of dealers or retailers throughout the country. PCSO shall appoint the dealers and retailers in a timely manner with due regard to the implementation timetable of the On-Line Lottery System. Nothing herein shall preclude the LESSOR from recommending dealers or retailers for appointment by PCSO, which shall act on said recommendation within forty-eight (48) hours. 5.5 PCSO shall designate the necessary personnel to monitor and

audit the daily performance of the On-Line Lottery System. For this purpose, PCSO designees shall be given, free of charge, suitable and adequate space, furniture and fixtures, in all offices of the LESSOR, including but not limited to its headquarters, alternate site, regional and area offices. 5.6 PCSO shall have the responsibility to resolve, and exclusive jurisdiction over, all matters involving the operation of the On-Line Lottery System not otherwise provided in this Contract. 5.7 PCSO shall promulgate procedural and coordinating rules governing all activities relating to the On-Line Lottery System. 5.8 PCSO will be responsible for the payment of prize monies, commissions to agents and dealers, and taxes and levies (if any) chargeable to the operator of the On-Line Lottery System. The LESSOR will bear all other Maintenance and Other Costs, except as provided in Section 1.4. 5.9 PCSO shall assist the LESSOR in the following: 5.9.1 Work permits for the LESSOR's staff; 5.9.2 Approvals for importation of the Facilities; 5.9.3 Approvals and consents for the On-Line Lottery System; and 5.9.4 Business and premises licenses for all offices of the LESSOR and licenses for the telecommunications network. 5.10 In the event that PCSO shall pre-terminate this Contract or suspend the operation of the On-Line Lottery System, in breach of this Contract and through no fault of the LESSOR, PCSO shall promptly, and in any event not later than sixty (60) days, reimburse the LESSOR the amount of its total investment cost associated with the On-Line Lottery System, including but not limited to the cost of the Facilities, and further compensate the LESSOR for loss of expected net profit after tax, computed over the unexpired term of the lease. 6. DUTIES AND RESPONSIBILITIES OF THE LESSOR

The LESSOR is one of not more than three (3) lessors of similar facilities for the nationwide On-Line Lottery System of PCSO. It is understood that the rights of the LESSOR are primarily those of a lessor of the Facilities, and consequently, all rights involving the business aspects of the use of the Facilities are within the jurisdiction of PCSO. During the term of the lease, the LESSOR shall. 6.1 Maintain and preserve its corporate existence, rights and privileges, and conduct its business in an orderly, efficient, and customary manner. 6.2 Maintain insurance coverage with insurers acceptable to PCSO on all Facilities. 6.3 Comply with all laws, statues, rules and regulations, orders and directives, obligations and duties by which it is legally bound. 6.4 Duly pay and discharge all taxes, assessments and government charges now and hereafter imposed of whatever nature that may be legally levied upon it. 6.5 Keep all the Facilities in fail safe condition and, if necessary, upgrade, replace and improve the Facilities from time to time as new technology develops, in order to make the On-Line Lottery System more cost-effective and/or competitive, and as may be required by PCSO shall not impose such requirements unreasonably nor arbitrarily. 6.6 Provide PCSO with management terminals which will allow realtime monitoring of the On-Line Lottery System. 6.7 Upon effectivity of this Contract, commence the training of PCSO and other local personnel and the transfer of technology and expertise, such that at the end of the term of this Contract, PCSO will be able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System. 6.8 Undertake a positive advertising and promotions campaign for both institutional and product lines without engaging in negative advertising against other lessors.

6.9 Bear all expenses and risks relating to the Facilities including, but not limited to, Maintenance and Other Costs and: xxx xxx xxx 6.10 Bear all risks if the revenues from ticket sales, on an annualized basis, are insufficient to pay the entire prize money. 6.11 Be, and is hereby, authorized to collect and retain for its own account, a security deposit from dealers and retailers, in an amount determined with the approval of PCSO, in respect of equipment supplied by the LESSOR. PCSO's approval shall not be unreasonably withheld. xxx xxx xxx 6.12 Comply with procedural and coordinating rules issued by PCSO. 7. REPRESENTATIONS AND WARRANTIES The LESSOR represents and warrants that: 7.1 The LESSOR is corporation duly organized and existing under the laws of the Republic of the Philippines, at least sixty percent (60%) of the outstanding capital stock of which is owned by Filipino shareholders. The minimum required Filipino equity participation shall not be impaired through voluntary or involuntary transfer, disposition, or sale of shares of stock by the present stockholders. 7.2 The LESSOR and its Affiliates have the full corporate and legal power and authority to own and operate their properties and to carry on their business in the place where such properties are now or may be conducted. . . . 7.3 The LESSOR has or has access to all the financing and funding requirements to promptly and effectively carry out the terms of this Contract. . . . 7.4 The LESSOR has or has access to all the managerial and technical expertise to promptly and effectively carry out the terms of this Contract. . . .

xxx xxx xxx 10. TELECOMMUNICATIONS NETWORK The LESSOR shall establish a telecommunications network that will connect all municipalities and cities in the Territory in accordance with, at the LESSOR's option, either of the LESSOR's proposals (or a combinations of both such proposals) attached hereto as Annex "B," and under the following PCSO schedule: xxx xxx xxx PCSO may, at its option, require the LESSOR to establish the telecommunications network in accordance with the above Timetable in provinces where the LESSOR has not yet installed terminals. Provided, that such provinces have existing nodes. Once a municipality or city is serviced by land lines of a licensed public telephone company, and such lines are connected to Metro Manila, then the obligation of the LESSOR to connect such municipality or city through a telecommunications network shall cease with respect to such municipality or city. The voice facility will cover the four offices of the Office of the President, National Disaster Control Coordinating Council, Philippine National Police and the National Bureau of Investigation, and each city and municipality in the Territory except Metro Manila, and those cities and municipalities which have easy telephone access from these four offices. Voice calls from the four offices shall be transmitted via radio or VSAT to the remote municipalities which will be connected to this voice facility through wired network or by radio. The facility shall be designed to handle four private conversations at any one time. xxx xxx xxx 13. STOCK DISPERSAL PLAN Within two (2) years from the effectivity of this Contract, the LESSOR shall cause itself to be listed in the local stock exchange and offer at least twenty five percent (25%) of its equity to the public. 14. NON-COMPETITION

The LESSOR shall not, directly or indirectly, undertake any activity or business in competition with or adverse to the On-Line Lottery System of PCSO unless it obtains the latter's prior written consent thereto. 15. HOLD HARMLESS CLAUSE 15.1 The LESSOR shall at all times protect and defend, at its cost and expense, PCSO from and against any and all liabilities and claims for damages and/or suits for or by reason of any deaths of, or any injury or injuries to any person or persons, or damages to property of any kind whatsoever, caused by the LESSOR, its subcontractors, its authorized agents or employees, from any cause or causes whatsoever. 15.2 The LESSOR hereby covenants and agrees to indemnify and hold PCSO harmless from all liabilities, charges, expenses (including reasonable counsel fees) and costs on account of or by reason of any such death or deaths, injury or injuries, liabilities, claims, suits or losses caused by the LESSOR's fault or negligence. 15.3 The LESSOR shall at all times protect and defend, at its own cost and expense, its title to the facilities and PCSO's interest therein from and against any and all claims for the duration of the Contract until transfer to PCSO of ownership of the serviceable Facilities. 16. SECURITY 16.1 To ensure faithful compliance by the LESSOR with the terms of the Contract, the LESSOR shall secure a Performance Bond from a reputable insurance company or companies acceptable to PCSO. 16.2 The Performance Bond shall be in the initial amount of Three Hundred Million Pesos (P300,000,000.00), to its U.S. dollar equivalent, and shall be renewed to cover the duration of the Contract. However, the Performance Bond shall be reduced proportionately to the percentage of unencumbered terminals installed; Provided, that the Performance Bond shall in no case be less than One Hundred Fifty Million Pesos (P150,000,000.00). 16.3 The LESSOR may at its option maintain its Escrow Deposit as

the Performance Bond. . . . 17. PENALTIES 17.1 Except as may be provided in Section 17.2, should the LESSOR fail to take remedial measures within seven (7) days, and rectify the breach within thirty (30) days, from written notice by PCSO of any wilfull or grossly negligent violation of the material terms and conditions of this Contract, all unencumbered Facilities shall automatically become the property of PCSO without consideration and without need for further notice or demand by PCSO. The Performance Bond shall likewise be forfeited in favor of PCSO. 17.2 Should the LESSOR fail to comply with the terms of the Timetables provided in Section 9 and 10, it shall be subject to an initial Penalty of Twenty Thousand Pesos (P20,000.00), per city or municipality per every month of delay; Provided, that the Penalty shall increase, every ninety (90) days, by the amount of Twenty Thousand Pesos (P20,000.00) per city or municipality per month, whilst shall failure to comply persists. The penalty shall be deducted by PCSO from the rental fee. xxx xxx xxx 20. OWNERSHIP OF THE FACILITIES After expiration of the term of the lease as provided in Section 4, the Facilities directly required for the On-Line Lottery System mentioned in Section 1.3 shall automatically belong in full ownership to PCSO without any further consideration other than the Rental Fees already paid during the effectivity of the lease. 21. TERMINATION OF THE LEASE PCSO may terminate this Contract for any breach of the material provisions of this Contract, including the following: 21.1 The LESSOR is insolvent or bankrupt or unable to pay its debts, stops or suspends or threatens to stop or suspend payment of all or a material part of its debts, or proposes or makes a general assignment or an arrangement or compositions with or for the benefit of its

creditors; or 21.2 An order is made or an effective resolution passed for the winding up or dissolution of the LESSOR or when it ceases or threatens to cease to carry on all or a material part of its operations or business; or 21.3 Any material statement, representation or warranty made or furnished by the LESSOR proved to be materially false or misleading; said termination to take effect upon receipt of written notice of termination by the LESSOR and failure to take remedial action within seven (7) days and cure or remedy the same within thirty (30) days from notice. Any suspension, cancellation or termination of this Contract shall not relieve the LESSOR of any liability that may have already accrued hereunder. xxx xxx xxx Considering the denial by the Office of the President of its protest and the statement of Assistant Executive Secretary Renato Corona that "only a court injunction can stop Malacaang," and the imminent implementation of the Contract of Lease in February 1994, KILOSBAYAN, with its co-petitioners, filed on 28 January 1994 this petition. In support of the petition, the petitioners claim that: . . . X X THE OFFICE OF THE PRESIDENT, ACTING THROUGH RESPONDENTS EXECUTIVE SECRETARY AND/OR ASSISTANT EXECUTIVE SECRETARY FOR LEGAL AFFAIRS, AND THE PCSO GRAVELY ABUSE[D] THEIR DISCRETION AND/OR FUNCTIONS TANTAMOUNT TO LACK OF JURISDICTION AND/OR AUTHORITY IN RESPECTIVELY: (A) APPROVING THE AWARD OF THE CONTRACT TO, AND (B) ENTERING INTO THE SO-CALLED "CONTRACT OF LEASE" WITH, RESPONDENT PGMC FOR THE INSTALLATION, ESTABLISHMENT AND OPERATION OF THE ONLINE LOTTERY AND TELECOMMUNICATION SYSTEMS REQUIRED AND/OR AUTHORIZED UNDER THE SAID

CONTRACT, CONSIDERING THAT: a) Under Section 1 of the Charter of the PCSO, the PCSO is prohibited from holding and conducting lotteries "in collaboration, association or joint venture with any person, association, company or entity"; b) Under Act No. 3846 and established jurisprudence, a Congressional franchise is required before any person may be allowed to establish and operate said telecommunications system; c) Under Section 11, Article XII of the Constitution, a less than 60% Filipino-owned and/or controlled corporation, like the PGMC, is disqualified from operating a public service, like the said telecommunications system; and
d) Respondent PGMC is not authorized by its charter and under the Foreign Investment Act (R.A. No. 7042) to install, establish and operate the on-line lotto and telecommunications systems. 18

Petitioners submit that the PCSO cannot validly enter into the assailed Contract of Lease with the PGMC because it is an arrangement wherein the PCSO would hold and conduct the on-line lottery system in "collaboration" or "association" with the PGMC, in violation of Section 1(B) of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and conducting charity sweepstakes races, lotteries, and other similar activities "in collaboration, association or joint venture with any person, association, company or entity, foreign or domestic." Even granting arguendo that a lease of facilities is not within the contemplation of "collaboration" or "association," an analysis, however, of the Contract of Lease clearly shows that there is a "collaboration, association, or joint venture between respondents PCSO and PGMC in the holding of the On-Line Lottery System," and that there are terms and conditions of the Contract "showing that respondent PGMC is the actual lotto operator and not respondent PCSO." 19 The petitioners also point out that paragraph 10 of the Contract of Lease requires or authorizes PGMC to establish a telecommunications network that will connect all the municipalities and cities in the territory. However, PGMC cannot do that because it

has no franchise from Congress to construct, install, establish, or operate the network pursuant to Section 1 of Act No. 3846, as amended. Moreover, PGMC is a 75% foreign-owned or controlled corporation and cannot, therefore, be granted a franchise for that purpose because of Section 11, Article XII of the 1987 Constitution. Furthermore, since "the subscribed foreign capital" of the PGMC "comes to about 75%, as shown by paragraph EIGHT of its Articles of Incorporation," it cannot lawfully enter into the contract in question because all forms of gambling and lottery is one of them are included in the so-called foreign investments negative list under the Foreign Investments Act (R.A. No. 7042) where only up to 40% foreign capital is allowed. 20 Finally, the petitioners insist that the Articles of Incorporation of PGMC do not authorize it to establish and operate an on-line lottery and telecommunications systems. 21 Accordingly, the petitioners pray that we issue a temporary restraining order and a writ of preliminary injunction commanding the respondents or any person acting in their places or upon their instructions to cease and desist from implementing the challenged Contract of Lease and, after hearing the merits of the petition, that we render judgment declaring the Contract of Lease void and without effect and making the injunction permanent. 22 We required the respondents to comment on the petition. In its Comment filed on 1 March 1994, private respondent PGMC asserts that "(1) [it] is merely an independent contractor for a piece of work, (i.e., the building and maintenance of a lottery system to be used by PCSO in the operation of its lottery franchise); and (2) as such independent contractor, PGMC is not a co-operator of the lottery franchise with PCSO, nor is PCSO sharing its franchise, 'in collaboration, association or joint venture' with PGMC as such statutory limitation is viewed from the context, intent, and spirit of Republic Act 1169, as amended by Batas Pambansa 42." It further claims that as an independent contractor for a piece of work, it is neither engaged in "gambling" nor in "public service" relative to the telecommunications network, which the petitioners even consider as an "indispensable requirement" of an on-line lottery system. Finally, it

states that the execution and implementation of the contract does not violate the Constitution and the laws; that the issue on the "morality" of the lottery franchise granted to the PCSO is political and not judicial or legal, which should be ventilated in another forum; and that the "petitioners do not appear to have the legal standing or real interest in the subject contract and in obtaining the reliefs sought." 23 In their Comment filed by the Office of the Solicitor General, public respondents Executive Secretary Teofisto Guingona, Jr., Assistant Executive Secretary Renato Corona, and the PCSO maintain that the contract of lease in question does not violate Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, and that the petitioner's interpretation of the phrase "in collaboration, association or joint venture" in Section 1 is "much too narrow, strained and utterly devoid of logic" for it "ignores the reality that PCSO, as a corporate entity, is vested with the basic and essential prerogative to enter into all kinds of transactions or contracts as may be necessary for the attainment of its purposes and objectives." What the PCSO charter "seeks to prohibit is that arrangement akin to a "joint venture" or partnership where there is "community of interest in the business, sharing of profits and losses, and a mutual right of control," a characteristic which does not obtain in a contract of lease." With respect to the challenged Contract of Lease, the "role of PGMC is limited to that of a lessor of the facilities" for the on-line lottery system; in "strict technical and legal sense," said contract "can be categorized as a contract for a piece of work as defined in Articles 1467, 1713 and 1644 of the Civil Code." They further claim that the establishment of the telecommunications system stipulated in the Contract of Lease does not require a congressional franchise because PGMC will not operate a public utility; moreover, PGMC's "establishment of a telecommunications system is not intended to establish a telecommunications business," and it has been held that where the facilities are operated "not for business purposes but for its own use," a legislative franchise is not required before a certificate of public convenience can be granted. 24 Even granting arguendo that PGMC is a public utility, pursuant to Albano S. Reyes, 25 "it can establish a telecommunications system even without a legislative franchise because not every public utility is required to secure a legislative franchise before it could establish,

maintain, and operate the service"; and, in any case, "PGMC's establishment of the telecommunications system stipulated in its contract of lease with PCSO falls within the exceptions under Section 1 of Act No. 3846 where a legislative franchise is not necessary for the establishment of radio stations." They also argue that the contract does not violate the Foreign Investment Act of 1991; that the Articles of Incorporation of PGMC authorize it to enter into the Contract of Lease; and that the issues of "wisdom, morality and propriety of acts of the executive department are beyond the ambit of judicial review." Finally, the public respondents allege that the petitioners have no standing to maintain the instant suit, citing our resolution in Valmonte vs. Philippine Charity Sweepstakes Office. 26 Several parties filed motions to intervene as petitioners in this case, 27 but only the motion of Senators Alberto Romulo, Arturo Tolentino, Francisco Tatad, Gloria Macapagal-Arroyo, Vicente Sotto III, John Osmea, Ramon Revilla, and Jose Lina 28 was granted, and the respondents were required to comment on their petition in intervention, which the public respondents and PGMC did. In the meantime, the petitioners filed with the Securities and Exchange Commission on 29 March 1994 a petition against PGMC for the nullification of the latter's General Information Sheets. That case, however, has no bearing in this petition. On 11 April 1994, we heard the parties in oral arguments. Thereafter, we resolved to consider the matter submitted for resolution and pending resolution of the major issues in this case, to issue a temporary restraining order commanding the respondents or any person acting in their place or upon their instructions to cease and desist from implementing the challenged Contract of Lease. In the deliberation on this case on 26 April 1994, we resolved to consider only these issues: (a) the locus standi of the petitioners, and (b) the legality and validity of the Contract of Lease in the light of Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and conducting lotteries "in collaboration, association or joint venture with any person,

association, company or entity, whether domestic or foreign." On the first issue, seven Justices voted to sustain the locus standi of the petitioners, while six voted not to. On the second issue, the seven Justices were of the opinion that the Contract of Lease violates the exception to Section 1(B) of R.A. No. 1169, as amended by B.P. Blg. 42, and is, therefore, invalid and contrary to law. The six Justices stated that they wished to express no opinion thereon in view of their stand on the first issue. The Chief Justice took no part because one of the Directors of the PCSO is his brother-in-law. This case was then assigned to this ponente for the writing of the opinion of the Court. The preliminary issue on the locus standi of the petitioners should, indeed, be resolved in their favor. 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 the issues raised. In the landmark Emergency Powers Cases, 29 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. (Avelino vs. Cuenco, G.R. No. L-2821)." Insofar as taxpayers' suits are concerned, this Court had declared that it "is not devoid of discretion as to whether or not it should be entertained," 30 or that it "enjoys an open discretion to entertain the same or not." 31 In De La Llana vs. Alba, 32 this Court declared: 1. The argument as to the lack of standing of petitioners is easily resolved. As far as Judge de la Llana is concerned, he certainly falls within the principle set forth in Justice Laurel's opinion in People vs. Vera [65 Phil. 56 (1937)]. Thus: "The unchallenged rule is that the person who impugns the validity of a statute must have a personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement [Ibid, 89]. The other petitioners as members of the bar and officers of the court cannot be considered as devoid of "any personal and substantial interest" on the matter. There is relevance to this excerpt from a separate opinion in Aquino, Jr. v. Commission on Elections [L-40004, January 31, 1975, 62 SCRA 275]: "Then there is the attack on the standing of petitioners, as vindicating at most what they consider a

public right and not protecting their rights as individuals. This is to conjure the specter of the public right dogma as an inhibition to parties intent on keeping public officials staying on the path of constitutionalism. As was so well put by Jaffe; "The protection of private rights is an essential constituent of public interest and, conversely, without a well-ordered state there could be no enforcement of private rights. Private and public interests are, both in a substantive and procedural sense, aspects of the totality of the legal order." Moreover, petitioners have convincingly shown that in their capacity as taxpayers, their standing to sue has been amply demonstrated. There would be a retreat from the liberal approach followed in Pascual v. Secretary of Public Works, foreshadowed by the very decision of People v. Vera where the doctrine was first fully discussed, if we act differently now. I do not think we are prepared to take that step. Respondents, however, would hard back to the American Supreme Court doctrine in Mellon v. Frothingham, with their claim that what petitioners possess "is an interest which is shared in common by other people and is comparatively so minute and indeterminate as to afford any basis and assurance that the judicial process can act on it." That is to speak in the language of a bygone era, even in the United States. For as Chief Justice Warren clearly pointed out in the later case of Flast v. Cohen, the barrier thus set up if not breached has definitely been lowered. In Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. vs. Tan, 33 reiterated in Basco vs. Philippine Amusements and Gaming Corporation, 34 this Court stated: Objections to taxpayers' suits for lack of sufficient personality standing or interest are, however, in the main procedural matters. Considering the importance to the public of the cases at bar, and in keeping with the Court's duty, under the 1987 Constitution, to determine whether or not the other branches of government have kept themselves within the limits of the Constitution and the laws and that they have not abused the discretion given to them, this Court has brushed aside technicalities of procedure and has taken cognizance of these petitions. and in Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform, 35 it declared:

With particular regard to the requirement of proper party as applied in the cases before us, we hold that the same is satisfied by the petitioners and intervenors because each of them has sustained or is in danger of sustaining an immediate injury as a result of the acts or measures complained of. [Ex Parte Levitt, 303 US 633]. And even if, strictly speaking, they are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised. In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders issued by President Quirino although they were invoking only an indirect and general interest shared in common with the public. The Court dismissed the objective that they were not proper parties and ruled that the transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure. We have since then applied this exception in many other cases. (Emphasis supplied) In Daza vs. Singson, 36 this Court once more said: . . . For another, we have early as in the Emergency Powers Cases that where serious constitutional questions are involved, "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." The same policy has since then been consistently followed by the Court, as in Gonzales vs. Commission on Elections [21 SCRA 774] . . . The Federal Supreme Court of the United States of America has also expressed its discretionary power to liberalize the rule on locus standi. In United States vs. Federal Power Commission and Virginia Rea Association vs. Federal Power Commission, 37 it held: We hold that petitioners have standing. Differences of view, however, preclude a single opinion of the Court as to both petitioners. It would not further clarification of this complicated specialty of federal jurisdiction, the solution of whose problems is in any event more or less determined by the specific circumstances of individual situations,

to set out the divergent grounds in support of standing in these cases. In line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of Congress, and even association of planters, and non-profit civic organizations were allowed to initiate and prosecute actions before this Court to question the constitutionality or validity of laws, acts, decisions, rulings, or orders of various government agencies or instrumentalities. Among such cases were those assailing the constitutionality of (a) R.A. No. 3836 insofar as it allows retirement gratuity and commutation of vacation and sick leave to Senators and Representatives and to elective officials of both Houses of Congress; 38 (b) Executive Order No. 284, issued by President Corazon C. Aquino on 25 July 1987, which allowed members of the cabinet, their undersecretaries, and assistant secretaries to hold other government offices or positions; 39 (c) the automatic appropriation for debt service in the General Appropriations Act; 40 (d) R.A. No. 7056 on the holding of desynchronized elections; 41 (d) R.A. No. 1869 (the charter of the Philippine Amusement and Gaming Corporation) on the ground that it is contrary to morals, public policy, and order; 42 and (f) R.A. No. 6975, establishing the Philippine National Police. 43 Other cases where we have followed a liberal policy regarding locus standi include those attacking the validity or legality of (a) an order allowing the importation of rice in the light of the prohibition imposed by R.A. No. 3452; 44 (b) P.D. Nos. 991 and 1033 insofar as they proposed amendments to the Constitution and P.D. No. 1031 insofar as it directed the COMELEC to supervise, control, hold, and conduct the referendum-plebiscite on 16 October 1976; 45 (c) the bidding for the sale of the 3,179 square meters of land at Roppongi, Minato-ku, Tokyo, Japan; 46 (d) the approval without hearing by the Board of Investments of the amended application of the Bataan Petrochemical Corporation to transfer the site of its plant from Bataan to Batangas and the validity of such transfer and the shift of feedstock from naphtha only to naphtha and/or liquefied petroleum gas; 47 (e) the decisions, orders, rulings, and resolutions of the Executive Secretary, Secretary of Finance, Commissioner of Internal Revenue, Commissioner of Customs, and the Fiscal Incentives Review Board exempting the National Power Corporation from indirect tax and duties; 48 (f) the orders of the Energy Regulatory Board of 5 and 6

December 1990 on the ground that the hearings conducted on the second provisional increase in oil prices did not allow the petitioner substantial cross-examination; 49 (g) Executive Order No. 478 which levied a special duty of P0.95 per liter or P151.05 per barrel of imported crude oil and P1.00 per liter of imported oil products; 50 (h) resolutions of the Commission on Elections concerning the apportionment, by district, of the number of elective members of Sanggunians; 51 and (i) memorandum orders issued by a Mayor affecting the Chief of Police of Pasay City. 52 In the 1975 case of Aquino vs. Commission on Elections, 53 this Court, despite its unequivocal ruling that the petitioners therein had no personality to file the petition, resolved nevertheless to pass upon the issues raised because of the far-reaching implications of the petition. We did no less in De Guia vs. COMELEC 54 where, although we declared that De Guia "does not appear to have locus standi, a standing in law, a personal or substantial interest," we brushed aside the procedural infirmity "considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent." We find the instant petition to be of transcendental importance to the public. The issues it raised are of paramount public interest and of a category even higher than those involved in many of the aforecited cases. The ramifications of such issues immeasurably affect the social, economic, and moral well-being of the people even in the remotest barangays of the country and the counter-productive and retrogressive effects of the envisioned on-line lottery system are as staggering as the billions in pesos it is expected to raise. The legal standing then of the petitioners deserves recognition and, in the exercise of its sound discretion, this Court hereby brushes aside the procedural barrier which the respondents tried to take advantage of. And now on the substantive issue. Section 1 of R.A. No. 1169, as amending by B.P. Blg. 42, prohibits the PCSO from holding and conducting lotteries "in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign." Section 1 provides:

Sec. 1. The Philippine Charity Sweepstakes Office. The Philippine Charity Sweepstakes Office, hereinafter designated the Office, shall be the principal government agency for raising and providing for funds for health programs, medical assistance and services and charities of national character, and as such shall have the general powers conferred in section thirteen of Act Numbered One thousand four hundred fifty-nine, as amended, and shall have the authority: A. To hold and conduct charity sweepstakes races, lotteries and other similar activities, in such frequency and manner, as shall be determined, and subject to such rules and regulations as shall be promulgated by the Board of Directors. B. Subject to the approval of the Minister of Human Settlements, to engage in health and welfare-related investments, programs, projects and activities which may be profit-oriented, by itself or in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign, except for the activities mentioned in the preceding paragraph (A), for the purpose of providing for permanent and continuing sources of funds for health programs, including the expansion of existing ones, medical assistance and services, and/or charitable grants: Provided, That such investment will not compete with the private sector in areas where investments are adequate as may be determined by the National Economic and Development Authority. (emphasis supplied) The language of the section is indisputably clear that with respect to its franchise or privilege "to hold and conduct charity sweepstakes races, lotteries and other similar activities," the PCSO cannot exercise it "in collaboration, association or joint venture" with any other party. This is the unequivocal meaning and import of the phrase "except for the activities mentioned in the preceding paragraph (A)," namely, "charity sweepstakes races, lotteries and other similar activities." B.P. Blg. 42 originated from Parliamentary Bill No. 622, which was covered by Committee Report No. 103 as reported out by the Committee on Socio-Economic Planning and Development of the Interim Batasang Pambansa. The original text of paragraph B, Section 1 of Parliamentary Bill No. 622 reads as follows:

To engage in any and all investments and related profit-oriented projects or programs and activities by itself or in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign, for the main purpose of raising funds for health and medical assistance and services and charitable grants. 55

During the period of committee amendments, the Committee on Socio-Economic Planning and Development, through Assemblyman Ronaldo B. Zamora, introduced an amendment by substitution to the said paragraph B such that, as amended, it should read as follows:
Subject to the approval of the Minister of Human Settlements, to engage in health-oriented investments, programs, projects and activities which may be profit- oriented, by itself or in collaboration, association, or joint venture with any person, association, company or entity, whether domestic or foreign, for the purpose of providing for permanent and continuing sources of funds for health programs, including the expansion of existing ones, medical assistance and services and/or charitable grants. 56

Before the motion of Assemblyman Zamora for the approval of the amendment could be acted upon, Assemblyman Davide introduced an amendment to the amendment: MR. DAVIDE. Mr. Speaker. THE SPEAKER. The gentleman from Cebu is recognized. MR. DAVIDE. May I introduce an amendment to the committee amendment? The amendment would be to insert after "foreign" in the amendment just read the following: EXCEPT FOR THE ACTIVITY IN LETTER (A) ABOVE. When it is joint venture or in collaboration with any entity such collaboration or joint venture must not include activity activity letter (a) which is the holding and conducting of sweepstakes races, lotteries and other similar acts.

MR. ZAMORA. We accept the amendment, Mr. Speaker. MR. DAVIDE. Thank you, Mr. Speaker. THE SPEAKER.
Is there any objection to the amendment? (Silence) The amendment, as amended, is approved. 57

Further amendments to paragraph B were introduced and approved. When Assemblyman Zamora read the final text of paragraph B as further amended, the earlier approved amendment of Assemblyman Davide became "EXCEPT FOR THE ACTIVITIES MENTIONED IN PARAGRAPH (A)"; and by virtue of the amendment introduced by Assemblyman Emmanuel Pelaez, the word PRECEDING was inserted before PARAGRAPH. Assemblyman Pelaez introduced other amendments. Thereafter, the new paragraph B was approved.
58

This is now paragraph B, Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42. No interpretation of the said provision to relax or circumvent the prohibition can be allowed since the privilege to hold or conduct charity sweepstakes races, lotteries, or other similar activities is a franchise granted by the legislature to the PCSO. It is a settled rule that "in all grants by the government to individuals or corporations of rights, privileges and franchises, the words are to be taken most strongly against the grantee .... [o]ne who claims a franchise or privilege in derogation of the common rights of the public must prove his title thereto by a grant which is clearly and definitely expressed, and he cannot enlarge it by equivocal or doubtful provisions or by probable inferences. Whatever is not unequivocally granted is withheld. Nothing passes by mere implication." 59 In short then, by the exception explicitly made in paragraph B, Section 1 of its charter, the PCSO cannot share its franchise with

another by way of collaboration, association or joint venture. Neither can it assign, transfer, or lease such franchise. It has been said that "the rights and privileges conferred under a franchise may, without doubt, be assigned or transferred when the grant is to the grantee and assigns, or is authorized by statute. On the other hand, the right of transfer or assignment may be restricted by statute or the constitution, or be made subject to the approval of the grantor or a governmental agency, such as a public utilities commission, exception that an existing right of assignment cannot be impaired by subsequent legislation." 60 It may also be pointed out that the franchise granted to the PCSO to hold and conduct lotteries allows it to hold and conduct a species of gambling. It is settled that "a statute which authorizes the carrying on of a gambling activity or business should be strictly construed and every reasonable doubt so resolved as to limit the powers and rights claimed under its authority." 61 Does the challenged Contract of Lease violate or contravene the exception in Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and conducting lotteries "in collaboration, association or joint venture with" another? We agree with the petitioners that it does, notwithstanding its denomination or designation as a (Contract of Lease). We are neither convinced nor moved or fazed by the insistence and forceful arguments of the PGMC that it does not because in reality it is only an independent contractor for a piece of work, i.e., the building and maintenance of a lottery system to be used by the PCSO in the operation of its lottery franchise. Whether the contract in question is one of lease or whether the PGMC is merely an independent contractor should not be decided on the basis of the title or designation of the contract but by the intent of the parties, which may be gathered from the provisions of the contract itself. Animus hominis est anima scripti. The intention of the party is the soul of the instrument. In order to give life or effect to an instrument, it is essential to look to the intention of the individual who executed it. 62 And, pursuant to Article 1371 of the Civil Code, "to determine the intention of the contracting parties, their contemporaneous and subsequent acts shall be principally considered." To put it more

bluntly, no one should be deceived by the title or designation of a contract. A careful analysis and evaluation of the provisions of the contract and a consideration of the contemporaneous acts of the PCSO and PGMC indubitably disclose that the contract is not in reality a contract of lease under which the PGMC is merely an independent contractor for a piece of work, but one where the statutorily proscribed collaboration or association, in the least, or joint venture, at the most, exists between the contracting parties. Collaboration is defined as the acts of working together in a joint project. 63 Association means the act of a number of persons in uniting together for some special purpose or business. 64 Joint venture is defined as an association of persons or companies jointly undertaking some commercial enterprise; generally all contribute assets and share risks. It requires a community of interest in the performance of the subject matter, a right to direct and govern the policy in connection therewith, and duty, which may be altered by agreement to share both in profit and losses.
65

The contemporaneous acts of the PCSO and the PGMC reveal that the PCSO had neither funds of its own nor the expertise to operate and manage an on-line lottery system, and that although it wished to have the system, it would have it "at no expense or risks to the government." Because of these serious constraints and unwillingness to bear expenses and assume risks, the PCSO was candid enough to state in its RFP that it is seeking for "a suitable contractor which shall build, at its own expense, all the facilities needed to operate and maintain" the system; exclusively bear "all capital, operating expenses and expansion expenses and risks"; and submit "a comprehensive nationwide lottery development plan . . . which will include the game, the marketing of the games, and the logistics to introduce the game to all the cities and municipalities of the country within five (5) years"; and that the operation of the on-line lottery system should be "at no expense or risk to the government" meaning itself, since it is a government-owned and controlled agency. The facilities referred to means "all capital equipment, computers, terminals, software, nationwide telecommunications network, ticket sales offices, furnishings and fixtures, printing costs, costs of salaries and wages, advertising and promotions expenses, maintenance

costs, expansion and replacement costs, security and insurance, and all other related expenses needed to operate a nationwide on-line lottery system." In short, the only contribution the PCSO would have is its franchise or authority to operate the on-line lottery system; with the rest, including the risks of the business, being borne by the proponent or bidder. It could be for this reason that it warned that "the proponent must be able to stand to the acid test of proving that it is an entity able to take on the role of responsible maintainer of the on-line lottery system." The PCSO, however, makes it clear in its RFP that the proponent can propose a period of the contract which shall not exceed fifteen years, during which time it is assured of a "rental" which shall not exceed 12% of gross receipts. As admitted by the PGMC, upon learning of the PCSO's decision, the Berjaya Group Berhad, with its affiliates, wanted to offer its services and resources to the PCSO. Forthwith, it organized the PGMC as "a medium through which the technical and management services required for the project would be offered and delivered to PCSO." 66 Undoubtedly, then, the Berjaya Group Berhad knew all along that in connection with an on-line lottery system, the PCSO had nothing but its franchise, which it solemnly guaranteed it had in the General Information of the RFP. 67 Howsoever viewed then, from the very inception, the PCSO and the PGMC mutually understood that any arrangement between them would necessarily leave to the PGMC the technical, operations, and management aspects of the on-line lottery system while the PCSO would, primarily, provide the franchise. The words Gaming and Management in the corporate name of respondent Philippine Gaming Management Corporation could not have been conceived just for euphemistic purposes. Of course, the RFP cannot substitute for the Contract of Lease which was subsequently executed by the PCSO and the PGMC. Nevertheless, the Contract of Lease incorporates their intention and understanding. The so-called Contract of Lease is not, therefore, what it purports to be. Its denomination as such is a crafty device, carefully conceived, to provide a built-in defense in the event that the agreement is questioned as violative of the exception in Section 1 (B) of the PCSO's charter. The acuity or skill of its draftsmen to accomplish that

purpose easily manifests itself in the Contract of Lease. It is outstanding for its careful and meticulous drafting designed to give an immediate impression that it is a contract of lease. Yet, woven therein are provisions which negate its title and betray the true intention of the parties to be in or to have a joint venture for a period of eight years in the operation and maintenance of the on-line lottery system. Consistent with the above observations on the RFP, the PCSO has only its franchise to offer, while the PGMC represents and warrants that it has access to all managerial and technical expertise to promptly and effectively carry out the terms of the contract. And, for a period of eight years, the PGMC is under obligation to keep all the Facilities in safe condition and if necessary, upgrade, replace, and improve them from time to time as new technology develops to make the on-line lottery system more cost-effective and competitive; exclusively bear all costs and expenses relating to the printing, manpower, salaries and wages, advertising and promotion, maintenance, expansion and replacement, security and insurance, and all other related expenses needed to operate the on-line lottery system; undertake a positive advertising and promotions campaign for both institutional and product lines without engaging in negative advertising against other lessors; bear the salaries and related costs of skilled and qualified personnel for administrative and technical operations; comply with procedural and coordinating rules issued by the PCSO; and to train PCSO and other local personnel and to effect the transfer of technology and other expertise, such that at the end of the term of the contract, the PCSO will be able to effectively take over the Facilities and efficiently operate the on-line lottery system. The latter simply means that, indeed, the managers, technicians or employees who shall operate the on-line lottery system are not managers, technicians or employees of the PCSO, but of the PGMC and that it is only after the expiration of the contract that the PCSO will operate the system. After eight years, the PCSO would automatically become the owner of the Facilities without any other further consideration. For these reasons, too, the PGMC has the initial prerogative to prepare the detailed plan of all games and the marketing thereof, and determine the number of players, value of winnings, and the logistics required to introduce the games, including the Master Games Plan.

Of course, the PCSO has the reserved authority to disapprove them. 68 And, while the PCSO has the sole responsibility over the appointment of dealers and retailers throughout the country, the PGMC may, nevertheless, recommend for appointment dealers and retailers which shall be acted upon by the PCSO within forty-eight hours and collect and retain, for its own account, a security deposit from dealers and retailers in respect of equipment supplied by it. This joint venture is further established by the following: (a) Rent is defined in the lease contract as the amount to be paid to the PGMC as compensation for the fulfillment of its obligations under the contract, including, but not limited to the lease of the Facilities. However, this rent is not actually a fixed amount. Although it is stated to be 4.9% of gross receipts from ticket sales, payable net of taxes required by law to be withheld, it may be drastically reduced or, in extreme cases, nothing may be due or demandable at all because the PGMC binds itself to "bear all risks if the revenue from the ticket sales, on an annualized basis, are insufficient to pay the entire prize money." This risk-bearing provision is unusual in a lessor-lessee relationship, but inherent in a joint venture. (b) In the event of pre-termination of the contract by the PCSO, or its suspension of operation of the on-line lottery system in breach of the contract and through no fault of the PGMC, the PCSO binds itself "to promptly, and in any event not later than sixty (60) days, reimburse the Lessor the amount of its total investment cost associated with the On-Line Lottery System, including but not limited to the cost of the Facilities, and further compensate the LESSOR for loss of expected net profit after tax, computed over the unexpired term of the lease." If the contract were indeed one of lease, the payment of the expected profits or rentals for the unexpired portion of the term of the contract would be enough. (c) The PGMC cannot "directly or indirectly undertake any activity or business in competition with or adverse to the On-Line Lottery System of PCSO unless it obtains the latter's prior written consent." If the PGMC is engaged in the business of leasing equipment and technology for an on-line lottery system, we fail to see any acceptable reason why it should allow a restriction on the pursuit of such

business. (d) The PGMC shall provide the PCSO the audited Annual Report sent to its stockholders, and within two years from the effectivity of the contract, cause itself to be listed in the local stock exchange and offer at least 25% of its equity to the public. If the PGMC is merely a lessor, this imposition is unreasonable and whimsical, and could only be tied up to the fact that the PGMC will actually operate and manage the system; hence, increasing public participation in the corporation would enhance public interest. (e) The PGMC shall put up an Escrow Deposit of P300,000,000.00 pursuant to the requirements of the RFP, which it may, at its option, maintain as its initial performance bond required to ensure its faithful compliance with the terms of the contract. (f) The PCSO shall designate the necessary personnel to monitor and audit the daily performance of the on-line lottery system; and promulgate procedural and coordinating rules governing all activities relating to the on-line lottery system. The first further confirms that it is the PGMC which will operate the system and the PCSO may, for the protection of its interest, monitor and audit the daily performance of the system. The second admits the coordinating and cooperative powers and functions of the parties. (g) The PCSO may validly terminate the contract if the PGMC becomes insolvent or bankrupt or is unable to pay its debts, or if it stops or suspends or threatens to stop or suspend payment of all or a material part of its debts. All of the foregoing unmistakably confirm the indispensable role of the PGMC in the pursuit, operation, conduct, and management of the OnLine Lottery System. They exhibit and demonstrate the parties' indivisible community of interest in the conception, birth and growth of the on-line lottery, and, above all, in its profits, with each having a right in the formulation and implementation of policies related to the business and sharing, as well, in the losses with the PGMC bearing the greatest burden because of its assumption of expenses and risks, and the PCSO the least, because of its confessed unwillingness to bear expenses and risks. In a manner of speaking,

each is wed to the other for better or for worse. In the final analysis, however, in the light of the PCSO's RFP and the above highlighted provisions, as well as the "Hold Harmless Clause" of the Contract of Lease, it is even safe to conclude that the actual lessor in this case is the PCSO and the subject matter thereof is its franchise to hold and conduct lotteries since it is, in reality, the PGMC which operates and manages the on-line lottery system for a period of eight years. We thus declare that the challenged Contract of Lease violates the exception provided for in paragraph B, Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, and is, therefore, invalid for being contrary to law. This conclusion renders unnecessary further discussion on the other issues raised by the petitioners. WHEREFORE, the instant petition is hereby GRANTED and the challenged Contract of Lease executed on 17 December 1993 by respondent Philippine Charity Sweepstakes Office (PCSO) and respondent Philippine Gaming Management Corporation (PGMC) is hereby DECLARED contrary to law and invalid. The Temporary Restraining Order issued on 11 April 1994 is hereby MADE PERMANENT. No pronouncement as to costs. SO ORDERED. Regalado, Romero and Bellosillo, JJ., concur. Narvasa, C.J., took no part.

Separate Opinions

CRUZ, J., concurring: I am happy to join Mr. Justice Hilario G. Davide, Jr. in his excellent ponencia. I will add the following personal observations only for emphasis as it is not necessary to supplement his thorough exposition. The respondents take great pains to cite specific provisions of the contract to show that it is PCSO that is actually operating the on-line lottery, but they have not succeeded in disproving the obvious, to wit, that the document was intentionally so crafted to make it appear that the operation is not a joint undertaking of PCSO and PGMC but a mere lease of services. It is a clever instrument, to be sure, but we are, gratifyingly, not deluded. Lawyers have a special talent to disguise the real intention of the parties in a contract to make it come ostensibly within the provisions of a law although the real if furtive purpose is to violate it. That talent has been exercised in this case, but not convincingly enough. It should be quite clear, from the adroit way the contract has been drafted, that the primary objective was to avoid the conclusion that PCSO will be operating a lottery "in association, collaboration or joint venture with any person, association, company or entity," which is prohibited by Section 1 of Rep. Act No. 1169 as amended by B.P. Blg. 42. Citing the self-serving provisions of the contract, the respondents would have us believe that the contract is perfectly lawful because all it does is provide for the lease to PCSO of the technical know-how and equipment of PGMC, with PCSO acting as "the sole and individual operator" of the lottery. I am glad we are not succumbing to this sophistry. Despite the artfulness of the contract (authorship of which was pointedly denied by both counsel for the government and the private respondent during the oral argument on this case), a careful study will reveal telling stipulations that it is PGMC and not PCSO that will actually be operating the lottery. Thus, it is provided inter alia that PGMC shall furnish all capital equipment and other facilities needed for the operation; bear all expenses relating to the operation, including those for the salaries and wages of the administrative and technical personnel; undertake a positive advertising and promotion

campaign for public support of the lottery; establish a radio communications network throughout the country as part of the operation; and assume all risks if the revenues from ticket sales are insufficient to pay the entire prize money. Most significantly, to show that it is only after eight years from the effectivity of the contract that PCSO will actually operate the lottery, Par. 6.7 of the agreement provides that PGMC shall: 6.7. Upon effectivity of this Contract, commence the training of PCSO and other local personnel and the transfer of technology and expertise, such that at the end of the term of this Contract, PCSO will be able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System. (Emphasis supplied). In the meantime, that is to say during the entire 8-year term of the contract, it will be PGMC that will be operating the lottery. Only "at the end of the term of this Contract" will PCSO "be able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System." Even on the assumption that it is PCSO that will be operating the lottery at the very start, the authority granted to PGMC by the agreement will readily show that PCSO will not be acting alone, as the respondents pretend. In fact, it cannot. PGMC is an indispensable co-worker because it has the equipment and the technology and the management skills that PCSO does not have at this time for the operation of the lottery, PCSO cannot deny that it needs the assistance of PGMC for this purpose, which was its reason for entering into the contract in the first place. And when PCSO does avail itself of such assistance, how will it be operating the lottery? Undoubtedly, it will be doing so "in collaboration, association or joint venture" with PGMC, which, let it be added, will not be serving as a mere "hired help" of PCSO subject to its control. PGMC will be functioning independently in the discharge of its own assigned role as stipulated in detail under the contract. PGMC is plainly a partner of PCSO in violation of law, no matter how PGMC's assistance is called or the contract is denominated. Even if it be conceded that the assistance partakes of a lease of

services, the undeniable fact is that PCSO would still be collaborating or cooperating with PGMC in the operation of the lottery. What is even worse is that PCSO and PGMC may be actually engaged in a joint venture, considering that PGMC does not collect the usual fixed rentals due an ordinary lessor but is entitled to a special "Rental Fee," as the contract calls it, "equal to four point nine percent (4.9%) of gross receipts from ticket sales." The flexibility of this amount is significant. As may be expected, it will induce in PGMC an active interest and participation in the success of PCSO that is not expected of an ordinary detached lessor who gets to be paid his rentals not a rental fee whether the lessee's business prospers or not. PGMC's share in the operation depends on its own performance and the effectiveness of its collaboration with PCSO. Although the contract pretends otherwise, PGMC is a coinvestor with PCSO in what is practically, if not in a strictly legal sense, a joint venture. Concerning the doctrine of locus standi, I cannot agree that out of the sixty million Filipinos affected by the proposed lottery, not a single solitary citizen can question the agreement. Locus standi is not such an absolute rule that it cannot admit of exceptions under certain conditions or circumstances like those attending this transaction. As I remarked in my dissent in Guazon v. De Villa, 181 SCRA 623, "It is not only the owner of the burning house who has the right to call the firemen. Every one has the right and responsibility to prevent the fire from spreading even if he lives in the other block." What is especially galling is that the transaction in question would foist upon our people an essentially immoral activity through the instrumentality of a foreign corporation, which naturally does not have the same concern for our interests as we ourselves have. I am distressed that foreigners should be allowed to exploit the weakness of some of us for instant gain without work, and with the active collaboration and encouragement of our own government at that. Feliciano, J., concurring I agree with the conclusions reached by my distinguished brother in the Court Davide, Jr., J., both in respect of the question of locus

standi and in respect of the merits of this case, that is, the issues of legality and constitutionality of the Contract of Lease entered into between the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corporation (PGMC). In this separate opinion, I propose to address only the question of locus standi. It is with some hesitation that I do so, considering the extensive separate opinions on this question written by my learned brothers Melo, Puno and Vitug, JJ. I agree with the great deal of what my brothers Melo, Puno and Vitug say about locus standi in their separate opinions and there is no need to go over the ground that I share with them. Because, however, I reach a different conclusion in respect of the presence or absence of locus standi on the part of the petitioners in the case before the Court, there is an internal need (a need internal to myself) to articulate the considerations which led me to that conclusion. There is no dispute that the doctrine of locus standi reflects an important constitutional principle, that is, the principle of separation of powers which, among other things, mandates that each of the great Departments of government is responsible for performance of its constitutionally allotted tasks. Insofar as the Judicial Department is concerned, the exercise of judicial power and carrying out of judicial functions commonly take place within the context of actual cases or controversies. This, in turn, reflects the basic notion of judicial power as the power to resolve actual disputes and of the traditional business of courts as the hearing and deciding of specific controversies brought before them. In our own jurisdiction, and at least since the turn of the present century, judicial power has always included the power of judicial review, understood as the authority of courts (more specifically the Supreme Court) to assay contested legislative and executive acts in terms of their constitutionality or legality. Thus, the general proposition has been that a petitioner who assails the legal or constitutional quality of an executive or legislative act must be able to show that he has locus standi. Otherwise, the petition becomes vulnerable to prompt dismissal by the court. There is, upon the other hand, little substantive dispute that the possession of locus standi 1 is not, in each and every case, a rigid and absolute requirement for access to the courts. Certainly that is

the case where great issues of public law are at stake, issues which cannot be approached in the same way that a court approaches a suit for the collection of a sum of money or a complaint for the recovery of possession of a particular piece of land. The broad question is when, or in what types of cases, the court should insist on a clear showing of locus standi understood as a direct and personal interest in the subject matter of the case at bar, and when the court may or should relax that apparently stringent requirement and proceed to deal with the legal or constitutional issues at stake in a particular case. I submit, with respect, that it is not enough for the Court simply to invoke "public interest" or even "paramount considerations of national interest," and to say that the specific requirements of such public interest can only be ascertained on a "case to case" basis. For one thing, such an approach is not intellectually satisfying. For another, such an answer appears to come too close to saying that locus standi exists whenever at least a majority of the Members of this Court participating in a case feel that an appropriate case for judicial intervention has arisen. This is not, however, to say that there is somewhere an over-arching juridical principle or theory, waiting to be discovered, that permits a ready answer to the question of when, or in what types of cases, the need to show locus standi may be relaxed in greater or lesser degree. To my knowledge, no satisfactory principle or theory has been discovered and none has been crafted, whether in our jurisdiction or in the United States. 2 I have neither the competence nor the opportunity to try to craft such principle or formula. It might, however, be useful to attempt to indicate the considerations of principle which, in the present case, appear to me to require an affirmative answer to the question of whether or not petitioners are properly regarded as imbued with the standing necessary to bring and maintain the present petition. Firstly, the character of the funds or other assets involved in the case is of major importance. In the case presently before the Court, the funds involved are clearly public in nature. The funds to be generated by the proposed lottery are to be raised from the population at large. Should the proposed operation be as successful as its proponents

project, those funds will come from well-nigh every town and barrio of Luzon. The funds here involved are public in another very real sense: they will belong to the PCSO, a government owned or controlled corporation and an instrumentality of the government and are destined for utilization in social development projects which, at least in principle, are designed to benefit the general public. My learned brothers Melo, Puno and Vitug, JJ. concede that taxpayers' suits have been recognized as an exception to the traditional requirement of recognized as an exception to the traditional requirement of locus standi. They insist, however, that because the funds here involved will not have been generated by the exercise of the taxing power of the Government, the present petition cannot be regarded as a taxpayer's suit and therefore, must be dismissed by the Court. It is my respectful submission that that constitutes much too narrow a conception of the taxpayer's suit and of the public policy that it embodies. It is also to overlook the fact that tax monies, strictly so called, constitute only one (1) of the major categories of funds today raised and used for public purposes. It is widely known that the principal sources of funding for government operations today include, not just taxes and customs duties, but also revenues derived from activities of the Philippine Amusement Gaming Corporation (PAGCOR), as well as the proceeds of privatization of government owned or controlled corporations and other government owned assets. The interest of a private citizen in seeing to it that public funds, from whatever source they may have been derived, go only to the uses directed and permitted by law is as real and personal and substantial as the interest of a private taxpayer in seeing to it that tax monies are not intercepted on their way to the public treasury or otherwise diverted from uses prescribed or allowed by law. It is also pertinent to note that the more successful the government is in raising revenues by non-traditional methods such as PAGCOR operations and privatization measures, the lesser will be the pressure upon the traditional sources of public revenues, i.e., the pocket books of individual taxpayers and importers. A second factor of high relevance is the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of the government. A showing that a constitutional or legal provision is patently being disregarded by the agency or instrumentality whose act is being assailed, can

scarcely be disregarded by court. The concept of locus standi which is part and parcel of the broader notion of ripeness of the case "does not operate independently and is not alone decisive. . . . [I]t is in substantial part a function of a judge's estimate of the merits of the constitutional [or legal] issue." 3 The notion of locus standi and the judge's conclusions about the merits of the case, in other words, interact with each other. Where the Court perceives a serious issue of violation of some constitutional or statutory limitation, it will be much less difficult for the Court to find locus standi in the petitioner and to confront the legal or constitutional issue. In the present case, the majority of the Court considers that a very substantial showing has been made that the Contract of Lease between the PCSO and the PGMC flies in the face of legal limitations. A third consideration of importance in the present case is the lack of any other party with a more direct and specific interest in raising the questions here being raised. Though a public bidding was held, no losing or dissatisfied bidder has come before the Court. The Office of the Ombudsman has not, to the knowledge of the Court, raised questions about the legality or constitutionality of the Contract of Lease here involved. The National Government itself, through the Office of the Solicitor General, is defending the PCSO Contract (though it had not participated in the drafting thereof). In a situation like that here obtaining, the submission may be made that the institution, so well known in corporation law and practice, of the corporate stockholders' derivative suit furnishes an appropriate analogy and that on the basis of such an analogy, a taxpayer's derivative suit should be recognized as available. The wide range of impact of the Contract of Lease here assailed and of its implementation, constitutes still another consideration of significance. In the case at bar, the agreement if implemented will be practically nationwide in its scope and reach (the PCSO-PGMC Contract is limited in its application to the Island of Luzon; but if the PCSO Contracts with the other two [2] private "gaming management" corporations in respect of the Visayas and Mindanao are substantially similar to PCSO's Contract with PGMC, then the Contract before us may be said to be national indeed in its implications and consequences). Necessarily, the amounts of money expected to be raised by the proposed activities of the PCSO and PGMC will be very

substantial, probably in the hundreds of millions of pesos. It is not easy to conceive of a contract with greater and more far-reaching consequences, literally speaking, for the country than the Contract of Lease here involved. Thus, the subject matter of the petition is not something that the Court may casually pass over as unimportant and as not warranting the expenditure of significant judicial resources. In the examination of the various features of this case, the above considerations have appeared to me to be important and as pressing for acceptance and exercise of jurisdiction on the part of this Court. It is with these considerations in mind that I vote to grant due course to the Petition and to hold that the Contract of Lease between the PCSO and PGMC in its present form and content, and given the present state of the law, is fatally defective. PADILLA, J., concurring: My views against gambling are a matter of judicial record. In Basco v. PAGCOR, (G.R. No. 91649, 14 May 1991, 197 SCRA 52) I expressed these views in a separate opinion where I was joined by that outstanding lady jurist, Mme. Justice A. Melencio-Herrera whose incisive approach to legal problems is today missed in this Court. I reproduce here those views because they are highly persuasive to the conclusions I reach in the present controversy: I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means that I agree with the decision insofar as it holds that the prohibition, control, and regulation of the entire activity known as gambling properly pertain to "state policy." It is, therefore, the political departments of government, namely, the legislative and the executive that should decide on what government should do in the entire area of gambling, and assume full responsibility to the people for such policy. The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of policies adopted by the political departments of government in areas which fall within their authority, except only when such policies pose a clear and present danger to the life, liberty or property of the individual. This case does not involve such a factual situation.

However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans the human personality, destroys self-confidence and eviscerates one's self-respect, which in the long run will corrode whatever is left of the Filipino moral character. Gambling has wrecked and will continue to wreck families and homes; it is an antithesis to individual reliance and reliability as well as personal industry which are the touchstones of real economic progress and national development. Gambling is reprehensible whether maintained by government or privatized. The revenues realized by the government out of "legalized" gambling will, in the long run, be more than offset and negated by the irreparable damage to the people's moral values. Also, the moral standing of the government in its repeated avowals against "illegal gambling" is fatally flawed and becomes untenable when it itself engages in the very activity it seeks to eradicate. One can go through the Court's decision today and mentally replace the activity referred to therein as gambling, which is legal only because it is authorized by law and run by the government, with the activity known as prostitution. Would prostitution be any less reprehensible were it to be authorized by law, franchised, and "regulated" by the government, in return for the substantial revenues it would yield the government to carry out its laudable projects, such as infrastructure and social amelioration? The question, I believe, answers itself. I submit that the sooner the legislative department outlaws all forms of gambling, as a fundamental state policy, and the sooner the executive implements such policy, the better it will be for the nation. We presently have the sweepstakes lotteries; we already have the PAGCOR's gambling casinos; the Filipino people will soon, if plans do not miscarry, be initiated into an even more sophisticated and encompassing nationwide gambling network known as the "on-line hitech lotto system." To be sure, it is not wealth producing; it is not export oriented. It will draw from existing wealth in the hands of Filipinos and transfer it into the coffers of the PCSO and its foreign partners at a price of further debasement of the moral standards of the Filipino people, the bulk of whom are barely subsisting below the

poverty line.
1. It is said that petitioners 1 have no locus standi to bring this suit even as they challenge the legality and constitutionality of a contract of lease between the PCSO, a government-owned corporation and the PGMC, a private corporation with substantial (if not controlling) foreign composition and content. Such contract of lease contains the terms and conditions under which an "on-line hi-tech lotto system" will operate in the country.

As the ponente of the extended, unsigned en banc resolution in Valmonte v. PCSO, (G.R. No. 78716 and G.R. No. 79084, 22 September 1987), I would be the last to downgrade the rule, therein reiterated, that in order to maintain a suit challenging the constitutionality and/or legality of a statute, order or regulation or assailing a particular governmental action as done with grave abuse of discretion or with lack of jurisdiction, the petitioner must show that he has a clear personal or legal right that would be violated with the enforcement of the challenged statute, order or regulation or the implementation of the questioned governmental action. But, in my considered view, this rule maybe (and should be) relaxed when the issue involved or raised in the petition is of such paramount national interest and importance as to dwarf the above procedural rule into a barren technicality. As a unanimous Court en banc aptly put it in De Guia vs. COMELEC, G.R. No. 104712, 6 May 1992, 208 SCRA 420. Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for re-election, much less, that he is prejudiced by the election, by district, in Paraaque. As such, he does not appear to have locus standi, a standing in law, a personal or substantial interest. (Sanidad vs. COMELEC, G.R. No. L-4640, October 12, 1976. 73 SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March 28, 1969, 27 SCRA 533) He does not also allege any legal right that has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action. However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent, We resolved to brush aside the question of procedural infirmity, even as We perceive the

petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmea vs. Commission on Elections. I view the present case as falling within the De Guia case doctrine. For, when the contract of lease in question seeks to establish and operate a nationwide gambling network with substantial if not controlling foreign participation, then the issue is of paramount national interest and importance as to justify and warrant a relaxation of the above-mentioned procedural rule on locus standi. 2. The charter of the PCSO Republic Act No. 1169 as amended by BP No. 42 insofar as relevant, reads: Sec. 1. The Philippine Charity Sweepstakes Office. The Philippine Charity Sweepstakes Office, hereinafter designated the Office, shall be the principal government agency for raising and providing for funds for health programs, medical assistance and services and charities of national character, and as such shall have the general powers conferred in section thirteen of Act Numbered One Thousand Four Hundred Fifty-Nine, as amended, and shall have the authority: A. To hold and conduct charity sweepstakes races, lotteries and other similar activities, in such frequency and manner, as shall be determined, and subject to such rules and regulations as shall be promulgated by the Board of Directors. B. Subject to the approval of the Minister of Human Settlements, to engage in health and welfare-related investments, programs, projects and activities which may be profit-oriented, by itself or in collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign, except for the activities mentioned in the preceding paragraph (A), for the purpose of providing for permanent and continuing sources of funds for health programs, including the expansion of existing ones, medical assistance and services, and/or charitable grants: Provided, That such investments will not compete with the private sector in areas where investments are adequate as may be determined by the National Economic and Development Authority. It is at once clear from the foregoing legal provisions that, while the

PCSO charter allows the PCSO to itself engage in lotteries, it does not however permit the PCSO to undertake or engage in lotteries in "collaboration, association or joint venture" with others. The palpable reason for this prohibition is, that PCSO should not and cannot be made a vehicle for an otherwise prohibited foreign or domestic entity to engage in lotteries (gambling activities) in the Philippines. The core question then is whether the lease contract between PCSO and PGMC is a device whereby PCSO will engage in lottery in collaboration, association or joint venture with another, i.e. PGMC. I need not go here into the details and different specific features of the contract to show that it is a joint venture between PCSO and PGMC. That has been taken care of in the opinion of Mr. Justice Davide to which I fully subscribe. On a slightly different plane and, perhaps simplified, I consider the agreement or arrangement between the PCSO and PGMC a joint venture because each party to the contract contributes its share in the enterprise or project. PGMC contributes its facilities, equipment and know-how (expertise). PCSO contributes (aside from its charter) the market, directly or through dealers and this to me is most important in the totality or mass of the Filipino gambling elements who will invest in lotto tickets. PGMC will get its 4.9% of gross receipts (with assumption of certain risks in the course of lotto operations); the residue of the whole exercise will go to PCSO. To any person with a minimum of business know-how, this is a joint venture between PCSO and PGMC, plain and simple. But assuming ex gratia argumenti that such arrangement between PCSO and PGMC is not a joint venture between the two of them to install and operate an "on-line hi-tech lotto system" in the country, it can hardly be denied that it is, at the very least, an association or collaboration between PCSO and PGMC. For one cannot do without the other in the installation, operation and, most importantly, marketing of the entire enterprise or project in this country. Indeed, the contract of lease in question is a clear violation of Republic Act No. 1169 as amended by BP No. 42 (the PCSO charter).

Having arrived at the conclusion that the contract of lease in question between the PCSO and PGMC is illegal and, therefore, invalid, I find it unnecessary to dwell on the other issues raised in the pleadings and arguments of the parties. I, therefore, vote to give DUE COURSE to the petition and to declare the contract of lease in question between PCSO and PGMC, for the reasons aforestated, of no force and effect. MELO, J., dissenting: I submit that the petition before the Court deserves no less than outright dismissal for the reason that petitioners, as concerned citizens and as taxpayers and as members of Congress, do not possess the necessary legal standing to assail the validity of the contract of lease entered into by the Philippine Charity Sweepstakes Office and the Philippine Gaming Management Corporation relative to the establishment and operation of an "On-line Hi-Tech Lottery System" in the country. As announced in Lamb vs. Phipps (22 Phil. [1912], 559), "[J]udicial power in its nature, is the power to hear and decide causes pending between parties who have the right to sue and be sued in the courts of law and equity." Necessarily, this implies that a party must show a personal stake in the outcome of the controversy or an injury to himself that can be addressed by a favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the court's remedial powers in his behalf (Warth vs. Seldin, 422 U.S. 490; Guzman vs. Marrero, 180 U.S. 81; McMicken vs. United States, 97 U.S. 204). Here, we have yet to see any of petitioners acquiring a personal stake in the outcome of the controversy or being placed in a situation whereby injury may be sustained if the contract of lease in question is implemented. It may be that the contract has somehow evoked public interest which petitioners claim to represent. But the alleged public interest which they pretend to represent is not only broad and encompassing but also strikingly and veritably indeterminate that one cannot truly say whether a handful of the public, like herein petitioners, may lay a valid claim of representation in behalf of the millions of citizens spread all over the land who may have just as many varied reactions relative to the contract in

question. Any effort to infuse personality on petitioners by considering the present case as a "taxpayer's suit" could not cure the lack of locus standi on the part of petitioners. As understood in this jurisdiction, a "taxpayer's suit" refers to a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation (Pascual vs. Secretary of Public Works, 110 Phil. [1960] 331; Maceda vs. Macaraig, 197 SCRA [1991]; Lozada vs. COMELEC, 120 SCRA [1983] 337; Dumlao vs. COMELEC, 95 SCRA [1980] 392; Gonzales vs. Marcos, 65 SCRA [1975] 624). It cannot be overstressed that no public fund raised by taxation is involved in this case. In fact, it is even doubtful if the rentals which the PCSO will pay to the lessor for its operation of the lottery system may be regarded as "public fund". The PCSO is not a revenue- collecting arm of the government. Income or money realized by it from its operations will not and need not be turned over to the National Treasury. Rather, this will constitute corporate funds which will remain with the corporation to finance its various activities as authorized in its charter. And if ever some semblance of "public character" may be said to attach to its earnings, it is simply because PCSO is a government-owned or controlled entity and not a purely private enterprise. It must be conceded though that a "taxpayer's suit" had been allowed in a number of instances in this jurisdiction. For sure, after the trial was blazed by Pascual vs. Secretary of Public Works, supra, several more followed. It is to be noted, however, that in those occasions where this Court allowed such a suit, the case invariably involved either the constitutionality of a statute or the legality of the disbursement of public funds through the enforcement of what was perceived to be an invalid or unconstitutional statute or legislation (Pascual, supra; Philippine Constitution Association, Inc. vs. Jimenez, 15 SCRA [1965] 479; Philippine Constitution Association, Inc. vs. Mathay, 18 SCRA [1966] 300; Tolentino vs. COMELEC, 41 SCRA [1971] 702; Pelaez vs. Auditor General, 15 SCRA [1965] 569; Iloilo Palay and Corn Planters Association vs. Feliciano, 13 SCRA [1965] 377). The case before us is not a challenge to the validity of a statute or an attempt to restrain expenditure of public funds pursuant to an alleged

invalid congressional enactment. What petitioners ask us to do is to nullify a simple contract of lease entered into by a government-owned corporation with a private entity. That contract, as earlier pointed out, does not involve the disbursement of public funds but of strictly corporate money. If every taxpayer, claiming to have interest in the contract, no matter how remote, could come to this Court and seek nullification of said contract, the day may come when the activities of government corporate entities will ground to a standstill on account of nuisance suits filed against them by persons whose supposed interest in the contract is as remote and as obscure as the interest of any man in the street. The dangers attendant thereto are not hard to discern and this Court must not allow them to come to pass. One final observation must be emphasized. When the petition at bench was filed, the Court decided to hear the case on oral argument on the initial perception that a constitutional issue could be involved. However, it now appears that no question of constitutional dimension is at stake as indeed the majority barely touches on such an issue, concentrating as it does on its interpretation of the contract between the Philippine Charity Sweepstakes Office and the Philippine Gaming Management Corporation. I, therefore, vote to dismiss the petition. PUNO, J., dissenting: At the outset, let me state that my religious faith and family upbringing compel me to regard gambling, regardless of its garb, with hostile eyes. Such antagonism tempts me to view the case at bench as a struggle between good and evil, a fight between the forces of light against the forces of darkness. I will not, however, yield to that temptation for we are not judges of the Old Testament type who were not only arbiters of law but were also high priests of morality. I will therefore strictly confine the peregrinations of my mind to the legal issues for resolution: (1) whether or not the petitioners have the Locus standi to file the petition at bench; and (2) assuming their locus standi, whether or not the Contract of Lease between PCSO and PGMC is null and void considering: (a) section 1 of R.A. No. 1169, as amended by B.P. Blg. 42 (Charter of PCSO) which prohibits PCSO

from holding and conducting lotteries "in collaboration, association or joint venture with any person, association, company or entity"; (b) Act No. 3836 which requires a congressional franchise before any person or entity can establish and operate a telecommunication system; (c) section 11, Art. XII of the Constitution, which requires that for a corporation to operate a public utility, at least 60% of its capital must be owned by Filipino citizens; and (d) R.A. No. 7042, otherwise known as the "Foreign Investments Act", which includes all forms of gambling in its "negative list." While the legal issues abound, I deferentially submit that the threshold issue is the locus standi, or standing to sue, of petitioners. The petition describes petitioner Kilosbayan, Inc., as a non-stock corporation composed of "civic spirited citizens, pastors, priests, nuns, and lay leaders who are committed to the cause of truth, justice, and national renewal." 1 Petitioners Jovito R. Salonga, Cirilo A. Rigos, Ernie Camba, Emilio C. Capulong, Jr., Jose Abcede, Christine Tan, Felipe L. Gozon, Rafael G. Fernando, Raoul V. Victorino, Jose Cunanan, and Quintin S. Doromal joined the petition in their capacity as trustees of Kilosbayan, Inc., and as taxpayers and concerned citizens. 2 Petitioners Freddie Webb and Wigberto Taada joined the petition as senators, taxpayers and concerned citizens. 3 Petitioner Joker P. Arroyo joined the petition as a member of the House of Representative, a taxpayer and a concerned citizen. 4 With due respect to the majority opinion, I wish to focus on the interstices of locus standi, a concept described by Prof. Paul Freund as "among the most amorphous in the entire domain of public law." The requirement of standing to sue inheres from the definition of judicial power. It is not merely a technical rule of procedure which we are at liberty to disregard. Section 1, Article VIII of the Constitution provides: xxx xxx xxx Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. (Italics

supplied) The phrase "actual controversies involving rights which are legally demandable and enforceable" has acquired a cultivated meaning given by courts. It spells out the requirements that must be satisfied before one can come to court to litigate a constitutional issue. Our distinguished colleague, Mr. Justice Isagani A. Cruz, gives a shorthand summary of these requirements when he states that no constitutional question will be heard and decided by courts unless there is a showing of the following: . . . (1) there must be an actual case or controversy; (2) the question of constitutionality must be raised by the proper party; (3) the constitutional question must be raised at the earliest possible opportunity; and (4) the decision of the constitutional question must be necessary to the determination of the case itself. 5 The complexion of the rule on locus standi has been undergoing a change. Mr. Justice Cruz has observed the continuing relaxation of the rule on standing, 6 thus: xxx xxx xxx A proper party is one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of. Until and unless such actual or potential injury is established, the complainant cannot have the legal personality to raise the constitutional question. In Tileson v. Ullmann, a physician questioned the constitutionality of a law prohibiting the use of contraceptives, upon the ground that it might prove dangerous to the life or health of some of his patients whose physical condition would not enable them to bear the rigors of childbirth. The court dismissed the challenge, holding that the patients of the physician and not the physician himself were the proper parties. In Cuyegkeng v. Cruz, the petitioner challenged in a quo warranto proceeding the title of the respondent who, he claimed, had been appointed to the board of medical examiners in violation of the provisions of the Medical Act of 1959. The Supreme Court dismissed the petition, holding that Cuyegkeng had not made a claim to the position held by Cruz and therefore could not be regarded as a

proper party who had sustained an injury as a result of the questioned act. In People v. Vera, it was held that the Government of the Philippines was a proper party to challenge the constitutionality of the Probation Act because, more than any other, it was the government itself that should be concerned over the validity of its own laws. In Ex Parte Levitt, the petitioner, an American taxpayer and member of the bar, filed a motion for leave to question the qualifications of Justice Black who, he averred, had been appointed to the U.S. Supreme Court in violation of the Constitution of the United States. The Court dismissed the petition, holding that Levitt was not a proper party since he was not claiming the position held by Justice Black. The rule before was that an ordinary taxpayer did not have the proper party personality to question the legality of an appropriation law since his interest in the sum appropriated was not substantial enough. Thus, in Custodio v. Senate President, a challenge by an ordinary taxpayer to the validity of a law granting back pay to government officials, including members of Congress, during the period corresponding to the Japanese Occupation was dismissed as having been commenced by one who was not a proper party. Since the first Emergency Powers Cases, however, the rule has been changed and it is now permissible for an ordinary taxpayer, or a group of taxpayers, to raise the question of the validity of an appropriation law. As the Supreme Court then put it. "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." In Tolentino v. Commission on Elections, it was held that a senator had the proper party personality to seek the prohibition of a plebiscite for the ratification of a proposed constitutional amendment. In PHILCONSA v. Jimenez, an organization of taxpayers and citizens was held to be a proper party to question the constitutionality of a law providing for special retirement benefits for members of the legislature. In Sanidad v. Commission on Elections, the Supreme Court upheld

the petitioners as proper parties, thus As a preliminary resolution, We rule that the petitioners in L-44640 (Pablo C. Sanidad and Pablito V. Sanidad) possess locus standi to challenge the constitutional premise of Presidential Decree Nos. 991, 1031, and 1033. It is now an ancient rule that the valid source of a statute Presidential Decrees are of such nature may be contested by one who will sustain a direct injury as a result of its enforcement. At the instance of taxpayers, laws providing for the disbursement of public funds may be enjoined, upon the theory that the expenditure of public funds by an officer of the State for the purpose of executing an unconstitutional act constitutes a misapplication of such funds. The breadth of Presidential Decree No. 991 carries an appropriation of Five Million Pesos for the effective implementation of its purposes. Presidential Decree No. 1031 appropriates the sum of Eight Million Pesos to carry out its provisions. The interest of the aforenamed petitioners as taxpayers in the lawful expenditure of these amounts of public money sufficiently clothes them with that personality to litigate the validity of the Decrees appropriating said funds. Moreover, as regard taxpayer's suits, this Court enjoys that open discretion to entertain the same or not. For the present case, We deem it sound to exercise that discretion affirmatively so that the authority upon which the disputed Decrees are predicated may be inquired into. In Lozada v. Commission on Elections, however, the petitioners were held without legal standing to demand the filling of vacancies in the legislature because they had only "a generalized interest' shared with the rest of the citizenry." Last July 30, 1993, we further relaxed the rule on standing in Oposa, et al. v. Hon. Fulgencio S. Factoran, Jr., 7 where we recognized the locus standi of minors representing themselves as well as generations unborn to protect their constitutional right to a balanced and healthful ecology. I am perfectly at peace with the drift of our decisions liberalizing the rule on locus standi. The once stubborn disinclination to decide constitutional issues due to lack of locus standi is incompatible with the expansion of judicial power mandated in section 1 of Article VIII of

the Constitution, i.e., "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." As we held thru the ground breaking ponencia of Mr. Justice Cruz in Daza v. Singson, 8 this provision no longer precludes the Court from resolving political questions in proper cases. But even perusing this provision as a constitutional warrant for the court to enter the once forbidden political thicket, it is clear that the requirement of locus standi has not been jettisoned by the Constitution for it still commands courts in no uncertain terms to settle only "actual controversies involving rights which are legally demandable and enforceable." Stated otherwise, courts are neither free to decide all kinds of cases dumped into their laps nor are they free to open their doors to all parties or entities claiming a grievance. The rationale for this constitutional requirement of locus standi is by no means trifle. It is intended "to assure a vigorous adversary presentation of the case, and, perhaps more importantly to warrant the judiciary's overruling the determination of a coordinate, democratically elected organ of government." 9 It thus goes to the very essence of representative democracies. As Mr. Justice Powell carefully explained in U.S. v. Richardson, 10 viz: Relaxation of standing requirements is directly related to the expansion of judicial power. It seems to me inescapable that allowing unrestricted taxpayer or citizen standing would significantly alter the allocation of power at the national level, with a shift away from a democratic form of government. I also believe that repeated and essentially head-on confrontations between the life-tenured branch and the representative branches of government will not, in the long run, be beneficial to either. The public confidence essential to the former and the vitality critical to the latter may well erode if we do not exercise self- restraint in the utilization of our power to negative the actions of the other branches. We should be ever mindful of the contradictions that would arise if a democracy were to permit at large oversight of the elected branches of government by a nonrepresentative, and in large measure insulated, judicial branch. Moreover, the argument that the Court should allow unrestricted taxpayer or citizen standing underestimates the ability of the representative branches of the Federal Government to respond to the citizen pressure that has been responsible in large measure for the

current drift toward expanded standing. Indeed, taxpayer or citizen advocacy, given its potentially broad base, is precisely the type of leverage that in a democracy ought to be employed against the branches that were intended to be responsive to public attitudes about the appropriate operation of government. "We must as judges recall that, as Mr. Justice Holmes wisely observed, the other branches of Government are ultimate guardians of the liberties and welfare of the people in quite as great a degree as the courts." Unrestrained standing in federal taxpayer or citizen suits would create a remarkably illogical system of judicial supervision of the coordinate branches of the Federal Government. Randolph's proposed Council of Revision, which was repeatedly rejected by the Framers, at least had the virtue of being systematic; every law passed by the legislature automatically would have been previewed by the judiciary before the law could take effect. On the other hand, since the judiciary cannot select the taxpayers or citizens who bring suit or the nature of the suits, the allowance of public actions would produce uneven and sporadic review, the quality of which would be influenced by the resources and skill of the particular plaintiff. And issues would be presented in abstract form, contrary to the Court's recognition that "judicial review is effective largely because it is not available simply at the behest of a partisan faction, but is exercised only to remedy a particular, concrete injury." Sierra Club v. Morton, 405 U.S. 727, 740741, n. 16 (1972). A lesser but not insignificant reason for screening the standing of persons who desire to litigate constitutional issues is economic in character. Given the sparseness of our resources, the capacity of courts to render efficient judicial service to our people is severely limited. For courts to indiscriminately open their doors to all types of suits and suitors is for them to unduly overburden their dockets, and ultimately render themselves ineffective dispensers of justice. To be sure, this is an evil that clearly confronts our judiciary today. Prescinding from these premises, and with great reluctance, I am not prepared to concede the standing to sue of petitioners. On a personal level, they have not shown that elemental injury in fact which will endow them with a standing to sue. It must be stressed that petitioners are in the main, seeking the nullity not of a law but of a

Contract of Lease. Not one of the petitioners is a party to the Contract of Lease executed between PCSO and PGMC. None of the petitioners participated in the bidding, and hence they are not losing bidders. They are complete strangers to the contract. They stand neither to gain nor to lose economically by its enforcement. It seems to me unusual that an unaffected third party to a contract could be allowed to question its validity. Petitioner Kilosbayan cannot justify this officious interference on the ground of its commitment to "truth, justice and national renewal." Such commitment to truth, justice and national renewal, however noble it may be, cannot give Kilosbayan a roving commission to check the validity of contracts entered into by the government and its agencies. Kilosbayan is not a private commission on audit. Neither can I perceive how the other petitioners can be personally injured by the Contract of Lease between PCSO and PGMC even if petitioner Salonga assails as unmitigated fraud the statistical probability of winning the lotto as he compared it to the probability of being struck twice by lightning. The reason is obvious: none of the petitioners will be exposed to this alleged fraud for all of them profess to abjure playing the lotto. It is self-evident that lotto cannot physically or spiritually injure him who does not indulge in it. Petitioners also contend they have locus standi as taxpayers. But the case at bench does not involve any expenditure of public money on the part of PCSO. In fact, paragraph 2 of the Contract of Lease provides that it is PGMC that shall build, furnish, and maintain at its own expense and risk the facilities for the On-Line Lottery System of PCSO and shall bear all maintenance and other costs. Thus, PGMC alleged it has already spent P245M in equipment and fixtures and would be investing close to P1 billion to supply adequately the technology and other requirements of PCSO. 11 If no tax money is being illegally deflected in the Contract of Lease between PCSO and PGMC, petitioners have no standing to impugn its validity as taxpayers. Our ruling in Dumlao v. Comelec, 12 settled this issue well enough, viz: However, the statutory provisions questioned in this case, namely, sec. 7, BP Blg. 51, and sections 4, 1, and 5 BP Blg. 52, do not directly involve the disbursement of public funds. While, concededly,

the elections to be held involve the expenditure of public moneys, nowhere in their Petition do said petitioners allege that their tax money is "being extracted and spent in violation of specific constitutional protections against abuses of legislative power" (Flast v. Cohen, 392 U.S. 83 [1960]), or that there is a misapplication of such funds by respondent COMELEC (see Pascual vs. Secretary of Public Works, 110 Phil. 331 [1960]), or that public money is being deflected to any improper purpose. Neither do petitioners seek to restrain respondent from wasting public funds through the enforcement of an invalid or unconstitutional law. (Philippine Constitution Association vs. Mathay, 18 SCRA 300 [1966]), citing Philippine Constitution Association vs. Gimenez, 15 SCRA 479 [1965]). Besides, the institution of a taxpayer's suit, per se, is no assurance of judicial review. As held by this Court in Yan vs. Macapagal (43 SCRA 677 [1972]), speaking through our present Chief Justice, this Court is vested with discretion as to whether or not a taxpayer's suit should be entertained. Next, petitioners plead their standing as "concerned citizens." As citizens, petitioners are pleading that they be allowed to advocate the constitutional rights of other persons who are not before the court and whose protection is allegedly their concern. A citizen qua citizen suit urges a greater relaxation of the rule on locus standi. I feel no aversion to the further relaxation of the rule on standing to accommodate what in other jurisdictions is known as an assertion of jus tertii in constitutional litigation provided the claimant can demonstrate: (1) an injury in fact to himself, and (2) the need to prevent the erosion of a preferred constitutional right of a third person. As stressed before, the first requirement of injury in fact cannot be abandoned for it is an essential element for the exercise of judicial power. Again, as stressed by Mr. Justice Powell, viz: 13 The revolution in standing doctrine that has occurred, particularly in the 12 years since Baker v. Carr, supra, has not meant, however, that standing barriers have disappeared altogether. As the Court noted in Sierra Club, "broadening the categories of injury that may be alleged in support of standing is a different matter from abandoning the requirement that the party seeking review must himself have suffered an injury." 405 U.S., at 738 . . . Indeed, despite the diminution of standing requirements in the last decade, the Court has not broken

with the traditional requirement that, in the absence of a specific statutory grant of the right of review, a plaintiff must allege some particularized injury that sets him apart from the man on the street. I recognize that the Court's allegiance to a requirement of particularized injury has on occasion required a reading of the concept that threatens to transform it beyond recognition. E.G., Baker v. Carr, supra; Flast v. Cohen, supra. But despite such occasional digressions, the requirement remains, and I think it does so for the reasons outlined above. In recognition of those considerations, we should refuse to go the last mile towards abolition of standing requirements that is implicit in broadening the "precarious opening" for federal taxpayers created by Flast, see 392 U.S., at 116 (Mr. Justice Fortas, concurring) or in allowing a citizen qua citizen to invoke the power of the federal courts to negative unconstitutional acts of the Federal Government. In sum, I believe we should limit the expansion of federal taxpayer and citizen standing in the absence of specific statutory authorization to an outer boundary drawn by the results in Flast and Baker v. Carr. I think we should face up to the fact that all such suits are an effort "to employ a federal court as a forum in which to air . . . generalized grievances about the conduct of government or the allocation of power in the Federal System." Flast v. Cohen, 392 U.S., at 106. The Court should explicitly reaffirm traditional prudential barriers against such public actions. My reasons for this view are rooted in respect for democratic processes and in the conviction that "[t]he powers of the federal judiciary will be adequate for the great burdens placed upon them only if they are employed prudently, with recognition of the strengths as well as the hazards that go with our kind of representative government." Id., at 131 The second requirement recognizes society's right in the protection of certain preferred rights in the Constitution even when the rightholders are not before the court. The theory is that their dilution has a substantial fall out detriment to the rights of others, hence the latter can vindicate them. In the case at bench, it is difficult to see how petitioners can satisfy these two requirements to maintain a jus tertii claim. They claim

violation of two constitutional provisions, to wit: Section 1, Article XIII. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. and Section 11, Article XII. - No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorizations be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizen of the Philippines. Section 1, Article XIII of the Constitution cannot be the matrix of petitioners' jus tertii claim for it expresses no more than a policy direction to the legislative in the discharge of its ordained duty to give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities and remove cultural inequities by equitably diffusing wealth and political power for the common good. Whether the act of the legislature in amending the charter of PCSO by giving it the authority to conduct lotto and whether the Contract of Lease entered into between PCSO and PGMC are incongruent to the policy direction of this constitutional provision is a highly debatable

proposition and can be endlessly argued. Respondents steadfastly insist that the operation of lotto will increase the revenue base of PCSO and enable government to provide a wider range of social services to the people. They also allege that the operation of hightech lotto will eradicate illegal jueteng. Petitioners are scandalized by this submission. They dismiss gambling as evil per se and castigate government for attempting to correct a wrong by committing another wrong. In any event, the proper forum for this debate, however cerebrally exciting it may be, is not this court but congress. So we held in PCSO v. Inopiquez, to wit: 14 By bringing their suit in the lower court, the private respondents in G.R. No. 79084 do not question the power of PCSO to conduct the Instant Sweepstakes game. Rather, they assail the wisdom of embarking upon this project because of their fear of the "pernicious repercussions" which may be brought about by the Instant Sweepstakes Game which they have labelled as "the worst form of gambling" which thus "affects the moral values" of the people. The Court, as held in several cases, does not pass upon questions of wisdom, justice, or expediency of legislation and executive acts. It is not the province of the courts to supervise legislation or executive orders as to keep them within the bounds of propriety, moral values and common sense. That is primarily and even exclusively a concern of the political departments of the government; otherwise, there will be a violation of the principle of separation of powers. (Italics supplied) I am not also convinced that petitioners can justify their locus standi to advocate the rights of hypothetical third parties not before the court by invoking the need to keep inviolate section 11, Article XII of the Constitution which imposes a nationality requirement on operators of a public utility. For even assuming arguendo that PGMC is a public utility, still, the records do not at the moment bear out the claim of petitioners that PGMC is a foreign owned and controlled corporation. This factual issue remains unsettled and is still the subject of litigation by the parties in the Securities and Exchange Commission. We are not at liberty to anticipate the verdict on this contested factual issue. But over and above this consideration, I respectfully submit that this constitutional provision does not confer on third parties any right of a

preferred status comparable to the Bill of Rights whose dilution will justify petitioners to vindicate them in behalf of its rightholders. The legal right of hypothetical third parties they profess to advocate is to my mind too impersonal, too unsubstantial, too indirect, too amorphous to justify their access to this Court and the further lowering of the constitutional barrier of locus standi. Again, with regret, I do not agree that the distinguished status of some of the petitioners as lawmakers gives them the appropriate locus standi. I cannot perceive how their constitutional rights and prerogatives as legislators can be adversely affected by the contract in question. Their right to enact laws for the general conduct of our society remains unimpaired and undiminished. 15 Their status as legislators, notwithstanding, they have to demonstrate that the said contract has caused them to suffer a personal, direct, and substantial injury in fact. They cannot simply advance a generic grievance in common with the people in general. I am not unaware of our ruling in De Guia v. Comelec, 16 viz: Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for reelection, much less, that he is prejudiced by the election, by district, in Paraaque. As such, he does not appear to have locus standi, a standing in law, a personal or substantial interest. (Sanidad vs. COMELEC, G.R. No. L-44640, October 12, 1976, 73 SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March 28, 1969, 27 SCRA 533). He does not also allege any legal right that has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action. However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent, We resolved to brush aside the question of procedural infirmity, even as We perceive the petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmena vs. Commission on Elections.

It is my respectful submission, however, that we should re-examine de Guia. It treated the rule on locus standi as a mere procedural rule. It is not a plain procedural rule but a constitutional requirement derived from section 1, Article VIII of the Constitution which mandates courts of justice to settle only "actual controversies involving rights which are legally demandable and enforceable." The phrase has been construed since time immemorial to mean that a party in a constitutional litigation must demonstrate a standing to sue. By downgrading the requirement on locus standi as a procedural rule which can be discarded in the name of public interest, we are in effect amending the Constitution by judicial fiat. De Guia would also brush aside the rule on locus standi if a case raises an important issue. In this regard, I join the learned observation of Mr. Justice Feliciano: "that it is not enough for the Court simply to invoke 'public interest' or even 'paramount considerations of national interest,' and to say that the specific requirements of such public interest can only be ascertained on a 'case to case' basis. For one thing, such an approach is not intellectually satisfying. For another, such an answer appears to come too close to saying that locus standi exists whenever at least a majority of the Members of this Court participating in a case feel that an appropriate case for judicial intervention has arisen." I also submit that de Guia failed to perceive that the rule on locus standi has little to do with the issue posed in a case, however, important it may be. As well pointed out in Flast v. Cohen: 17 The fundamental aspect of standing is that it focuses on the party seeking to get his complaint before a federal court and not on the issues he wishes to have adjudicated. The "gist of the question of standing" is whether the party seeking relief has "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions." Baker v. Carr, 369 U.S. 186, 204 (1962). In other words, when standing is placed in issue in a case, the question is whether the person whose standing is challenged is a proper party to request an adjudication of a particular issue and not whether the issue itself is justiciable. Thus, a party may have standing in a

particular case, but the federal court may nevertheless decline to pass on the merits of the case because, for example, it presents a political question. A proper party is demanded so that federal courts will not be asked to decide "ill-defined controversies over constitutional issues," United public Workers v. Mitchell, 330 U.S. 75, 90 (1947), or a case which is of "a hypothetical or abstract character," Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 240 (1937). It is plain to see that in de Guia, the court took an unorthodox posture, to say the least. It held there was no proper party before it, and yet it resolved the issues posed by the petition. As there was no proper party before the court, its decision is vulnerable to be criticized as an advisory opinion. With due respect, the majority decision appears to have set a dangerous precedent by unduly trivializing the rule on locus standi. By its decision, the majority has entertained a public action to annul a private contract. In so doing, the majority may have given sixty (60) million Filipinos the standing to assail contracts of government and its agencies. This is an invitation for chaos to visit our law on contract, and certainly will not sit well with prospective foreign investors. Indeed, it is difficult to tread the path of the majority on this significant issue. The majority granted locus standi to petitioners because of lack of any other party with more direct and specific interest. But one has standing because he has standing on his own and standing cannot be acquired because others with standing have refused to come to court. The thesis is also floated that petitioners have standing as they can be considered taxpayers with right to file derivative suit like a stockholder's derivative suit in private corporations. The fact, however, is that PCSO is not a private but a quasi-public corporation. Our law on private corporation categorically sanctions stockholder's derivative suit. In contrast, our law on public corporation does not recognize this so-called taxpayer's derivative suit. Hence, the idea of a taxpayer's derivative suit, while alluring, has no legal warrant. Our brethren in the majority have also taken the unprecedented step of striking down a contrast at the importunings of strangers thereto, but without justifying the interposition of judicial power on any felt need to prevent violation of an important constitutional provision. The contract in question was voided on the sole ground that it violated an

ordinary statute, section 1 of R.A. 1169, as amended by B.P. Blg. 42. If there is no provision of the Constitution that is involved in the case at bench, it boggles the mind how the majority can invoke considerations of national interest to justify its abandonment of the rule on locus standi. The volume of noise created by the case cannot magically convert it to a case of paramount national importance. By its ruling, the majority has pushed the Court in unchartered water bereft of any compass, and it may have foisted the false hope that it is the repository of all remedies. If I pay an unwavering reverence to the rule of locus standi, it is because I consider it as a touchstone in maintaining the proper balance of power among the three branches of our government. The survival of our democracy rests in a large measure on our ability to maintain this delicate equipoise of powers. For this reason, I look at judicial review from a distinct prism. I see it both as a power and a duty. It is a power because it enables the judiciary to check excesses of the Executive and the Legislative. But, it is also a duty because its requirement of locus standi, among others, Executive and the Legislative. But, it is also a duty because its requirement of locus standi, among others, keeps the judiciary from overreaching the powers of the other branches of government. By balancing this duality, we are able to breathe life to the principle of separation of powers and prevent tyranny. To be sure, it is our eternal concern to prevent tyranny but that includes tyranny by ourselves. The Constitution did not install a government by the judiciary, nay, not a government by the unelected. In offering this submission, I reject the sublimal fear that an unyielding insistence on the rule on locus standi will weaken the judiciary vis-a-vis the other branches of government. The hindsight of history ought to tell us that it is not power per se that strengthens. Power unused is preferable than power misused. We contribute to constitutionalism both by the use of our power to decide and its non use. As well said, the cases we decide are as significant as the cases we do not decide. Real power belongs to him who has power over power. IN VIEW WHEREOF, and strictly on the ground of lack of locus standi on the part of petitioners, I vote to DENY the petition. VITUG, J., dissenting:

Judicial power encompasses both an authority and duty to resolve "actual controversies involving rights which are legally demandable and enforceable" (Article VIII, Section 1, 1987 Constitution). As early as the case of Lamb vs. Phipps, 1 this Court ruled: "Judicial power, in its nature, is the power to hear and decide causes pending between parties who have the right to sue in the courts of law and equity." 2 An essential part of, and corollary to, this principle is the locus standi of a party litigant, referring to one who is directly affected by, and whose interest is immediate and substantial in, the controversy. The rule requires that a party must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the exercise of the court's remedial powers in his behalf. 3 If it were otherwise, the exercise of that power can easily become too unwieldy by its sheer magnitude and scope to a point that may, in no small degree, adversely affect its intended essentiality, stability and consequentiality. Locus standi, nevertheless, admits of the so-called "taxpayer's suit." Taxpayer's suits are actions or proceedings initiated by one or more taxpayers in their own behalf or, conjunctively, in representation of others similarly situated for the purpose of declaring illegal or unauthorized certain acts of public officials which are claimed to be injurious to their common interests as such taxpayers (Cf. 71 Am Jur 2d., 179-180). The principle is predicated upon the theory that taxpayers are, in equity, the cestui que trust of tax funds, and any illegal diminution thereof by public officials constitutes a breach of trust even as it may result in an increased burden on taxpayers (Haddock vs. Board of Public Education, 86 A 2d 157; Henderson vs. McCormick, 17 ALR 2d 470). Justice Brandeis of the United States Supreme Court, in his concurring opinion in Ashwander vs. Tennessee Valley Authority (297 U.S. 288), said: . . . . The Court will not pass upon the validity of a statute upon complaint of one who fails to show that he is injured by its operation. Tyler v. The Judges, 179 U.S. 405; Hendrick v. Maryland, 234 U.S. 610, 621. Among the many applications of this rule, none is more striking than the denial of the right of challenge to one who lacks a

personal or property right. Thus, the challenge by a public official interested only in the performance of his official duty will not be entertained. Columbus & Greenville Ry. v. Miller, 283 U.S. 96, 99100. In Fairchild v. Hughes, 258 U.S. 126, the Court affirmed the dismissal of a suit brought by a citizen who sought to have the Nineteenth Amendment declared unconstitutional. In Massachusetts v. Mellon, 262 U.S. 447, the challenge of the federal Maternity Act was not entertained although made by the Commonwealth on behalf of all its citizens." Justice Brandeis' view, shared by Justice Frankfurter in Joint AntiFascist Refugee Commission vs. McGrath (351 U.S. 123), was adopted by the U.S. Supreme Court in Flast vs. Cohen (392 U.S. 83) which held that it is only when a litigant is able to show such a personal stake in the controversy as to assure a concrete adverseness in the issues submitted that legal standing can attach. A "taxpayer's suit," enough to confer locus standi to a party, we have held before, is understood to be a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation. 4 It is not enough that the dispute concerns public funds. A contrary rule could easily lead to a limitless application of the term "taxpayer's suit," already by itself a broad concept, since a questioned act of government would almost so invariably entail, as a practical matter, a financial burden of some kind. To be sure, serious doubts have even been raised on the propriety and feasibility of unqualifiedly recognizing the "taxpayer's suit" as an exception from the standard rule of requiring a party who invokes the exercise of judicial power to have a real and personal interest or a direct injury in the outcome of a controversy. This Court has heretofore spoken on the matter, at times even venturing beyond the usual understanding of its applicability in the name of national or public interest. It is remarkable, nevertheless, that the accepted connotation of locus standi has still managed to be the rule, sanctioning, by way of exception, the so-called "taxpayer's suit" which courts accept on valid and compelling reasons. A provision which has been introduced by the 1987 Constitution is a definition, for the first time in our fundamental law, of the term "judicial

power," as such authority and duty of courts of justice "to settle actual controversies involving rights which are legally demandable and enforceable and to determine whether or not there has been a grave abuse of discretion, amounting to lack or excess of jurisdiction, on the part of any branch or instrumentality of the Government" (Article VIII, Section 1, Constitution). I take it that the provision has not been intended to unduly mutate, let alone to disregard, the long established rules on locus standi. Neither has it been meant, I most respectfully submit, to do away with the principle of separation of powers and its essential incidents such as by, in effect, conferring omnipotence on, or allowing an intrusion by, the courts in respect to purely political decisions, the exercise of which is explicitly vested elsewhere, and subordinate, to that of their own, the will of either the Legislative Department or the Executive Department both co- equal, independent and coordinate branches, along with the Judiciary, in our system of government. Again, if it were otherwise, there indeed would be truth to the charge, in the words of some constitutionalists, that "judicial tyranny" has been institutionalized by the 1987 Constitution, an apprehension which should, I submit, rather be held far from truth and reality. In sum, while any act of government, be it executive in nature or legislative in character, may be struck down and declared a nullity either because it contravenes an express provision of the Constitution or because it is perceived and found to be attended by or the result of grave abuse of discretion, amounting to lack or excess of jurisdiction, that issue, however, must first be raised in a proper judicial controversy. The Court's authority to look into and grant relief in such cases would necessitate locus standi on the part of party litigants. This requirement, in my considered view, is not merely procedural or technical but goes into the essence of jurisdiction and the competence of courts to take cognizance of justiciable disputes. In Bugnay Construction and Development Corporation vs. Laron, this Court ruled:
5

. . . . Considering the importance to the public of a suit assailing the constitutionality of a tax law, and in keeping with the Court's duty, specially explicated in the 1987 Constitution, to determine whether or not the other branches of the Government have kept themselves

within the limits of the Constitution and the laws and that they have not abused the discretion given to them, the Supreme Court may brush aside technicalities of procedure and take cognizance of the suit. (Citing Kapatiran vs. Tan, G.R. No. 81311, June 30, 1988.) However, for the above rule to apply, it is exigent that the taxpayerplaintiff sufficiently show that he would be benefited or injured by the judgment or entitled to the avails of the suit as a real party in interest. (Citing Estate of George Litton vs. Mendoza, G.R. No. 49120, June 30, 1988.) Before he can invoke the power of judicial review, he must specifically prove that he has sufficient interest in preventing the illegal expenditure of money raised by taxation (citing 11 Am. Jur. 761; Dumlao, et al. vs. Commission on Elections, 95 SCRA 392) and that he will sustain a direct injury as a result of the enforcement of the questioned statute or contract. (Citing Sanidad, et al. vs. Commission on Elections, et al., 73 SCRA 333.) It is not sufficient that he has merely a general interest common to all members of the public. (Citing Ex Parte Levitt, 302 U.S. 633, cited in 15 SCRA 497, Annotation.) As so well pointed out by Mr. Justice Camilo D. Quiason during the Court's deliberations, "due respect and proper regard for the rule on locus standi would preclude the rendition of advisory opinions and other forms of pronouncement on abstract issues, avoid an undue interference on matters which are not justiciable in nature and spare the Court from getting itself involved in political imbroglio." The words of Senate President Edgardo J. Angara, carry wisdom; we quote: The powers of the political branches of our government over economic policies is rather clear: the Congress is to set in broad but definite strokes the legal framework and structures for economic development, while the Executive provides the implementing details for realizing the economic ends identified by Congress and executes the same. xxx xxx xxx If each economic decision made by the political branches of government, particularly by the executive, are fully open to re-

examination by the judicial branch, then very little, if any, reliance can be placed by private economic actors on those decisions. Investors would always have to factor in possible costs arising from judiciallydetermined changes affecting their immediate business, notwithstanding assurances by executive authorities. Judicial decisions are, in addition, inflexible and can never substitute for sound decision-making at the level of those who are assigned to execute the laws of the land. Since judicial power cannot be exercised unless an actual controversy is brought before the courts for resolution, decisions cannot be properly modified unless another appropriate controversy arises." (Sen. Edgardo J. Angara, "The Supreme Court in Economic Policy Making," Policy Review A Quarterly Journal of Policy Studies, Vol. 1, No. 1, January-March 1994, published by the Senate Policy Studies Group, pp. 2-3.) A further set-back in entertaining the petition is that it unfortunately likewise strikes at factual issues. The allegations to the effect that irregularities have been committed in the processing and evaluation of the bids to favor respondent PGMC; that the Malacaang Special Review Committee did not verify warranties embodied in the contract; that the operation of telecommunication facilities is indispensable in the operation of the lottery system; the involvement of multi-national corporations in the operation of the on-line "hi-tech" lottery system, and the like, require the submission of evidence. This Court is not a trier of facts, and it cannot, at this time, resolve the above issues. Just recently, the Court has noted petitioners' manifestation of its petition with the Securities and Exchange Commission "for the nullification of the General Information Sheets of PGMC" in respect particularly to the nationality holdings in the corporation. The doctrine of primary jurisdiction would not justify a disregard of the jurisdiction of, nor would it permit us to now preempt, said Commission on the matter. Petitioners strongly assert, in an attempt to get the Court's concurrence in accepting the petition, that since lottery is a game of chance, the "lotto" system would itself be a "crime against morals" defined by Articles 195-199 6 of the Revised Penal Code. Being immoral and a criminal offense under the Revised Penal Code, petitioners contend, any special law authorizing gambling must, by all

canons of statutory constructions, be interpreted strictly against the grantee. Citing previous decisions of this Court, they maintain that lottery is gambling, pure and simple, 7 and that this Court has consistently condemned the immorality and illegality of gambling to be a "national offense and not a minor transgression;" 8 "that it is a social scourge which must be stamped out;" 9 and, "that it is pernicious to the body politic and detrimental to the nation and its citizens." 10 I most certainly will not renounce this Court's above concerns. Nevertheless, the Court must recognize the limitations of its own authority. Courts neither legislate nor ignore legal mandates. Republic Act No. 1169, as amended, explicitly gives public respondent PCSO the authority and power "to hold and conduct sweepstakes races, lotteries, and other similar activities." In addition, it is authorized: c. To undertake any other activity that will enhance its funds generation, operations and funds management capabilities, subject to the same limitations provided for in the preceding paragraph. It shall have a Board of Directors, hereinafter designated the Board, composed of five members who shall be appointed, and whose compensation and term of office shall be fixed, by the President. xxx xxx xxx Sec.9. Powers and functions of the Board of Directors. The Board of Directors of the Office shall have the following powers and functions. (a) To adopt or amend such rules and regulations to implement the provisions of this Act. xxx xxx xxx (d) To promulgate rules and regulations for the operation of the Office and to do such act or acts as may be necessary for the attainment of its purposes and objectives. (Emphasis supplied).

In People vs. Dionisio, 11 cited by the petitioners themselves, we remarked: "What evils should be corrected as pernicious to the body politic, and how correction should be done, is a matter primarily addressed to the discretion of the legislative department, not of the courts . . . ." In Valmonte vs. PCSO, 12 we also said: The Court, as held in several cases, does not pass upon questions of wisdom, justice or expediency of legislation and executive acts. It is not the province of the courts to supervise legislation or executive orders as to keep them within the bounds of propriety, moral values and common sense. That is primarily and even exclusively a concern of the political departments of the government; otherwise, there will be a violation of the principle of separation of powers. The constraints on judicial power are clear. I feel, the Court must thus beg off, albeit not without reluctance, from giving due course to the instant petition. Accordingly, I vote for the dismissal of the petition. KAPUNAN, J., dissenting: I regret that I am unable to join my colleagues in the majority in spite of my own personal distaste for gambling and other gaming operations. Such considerations aside, I feel there are compelling reasons why the instant petition should be dismissed. I shall forthwith state the reasons why. Petitioners anchor their principal objections against the contract entered into between the Philippine Charity Sweepstakes Office (PCSO) and the PGMC on the ground that the contract entered into by the PCSO with the PGMC violates the PCSO Charter (R.A. No. 1169 as amended by B.P. Blg 427, specifically section 1 thereof which bars the said body from holding conducting lotteries "in collaboration, association or joint venture with any person association, company or entity."). However, a perusal of the petition reveals that the compelling reasons behind it, while based on apparently legal questions involving the contract between the PCSO and the PGMC, are prompted by the petitioners' moral objections against the whole idea of gambling operations operated by the government through the PCSO. The whole point of the petition, in

essence, is a fight between good and evil, between the morality or amorality of lottery operations conducted on a wide scale involving millions of individuals and affecting millions of lives. Their media of opposition are the above stated defects in the said contract which they assail to be fatally defective. They come to this Court, as taxpayers and civic spirted citizens, asserting a right of standing on a transcendental issue which they assert to be of paramount public interest. Moral or legal questions aside, I believe that there are unfortunately certain standards 1 that have to be followed in the exercise of this Court's awesome power of review before this Court could even begin to assay the validity of the contract between the PCSO and the PGMC. This, in spite of the apparent expansion of judicial power granted by Section 1 of Article VIII of the 1987 Constitution. It is fundamental that such standards be complied with before this Court could even begin to explore the substantive issues raised by any controversy brought before it, for no issue brought before this court could possibly be so fundamental and paramount as to warrant a relaxation of the requisite rules for judicial review developed by settled jurisprudence inorder to avoid entangling this court in controversies which properly belong to the legislative or executive branches of our government. The potential harm to our system of government, premised on the concept of separation of powers, by the Court eager to exercise its powers and prerogatives at every turn, cannot be gainsaid. The Constitution does not mandate this Court to wield the power of judicial review with excessive vigor and alacrity in every area or at every turn, except in appropriate cases and controversies which meet established requirements for constitutional adjudication. Article VIII Sec. 1 of the Constitution notwithstanding, there are questions which I believe are still beyond the pale of judicial power. Moreover, it is my considered opinion that the instant petition does not meet the requirements set by this court for a valid exercise of judicial review. Our Constitution expressly defines judicial power as including "the duty to settle actual cases and controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to a lack or excess of jurisdiction on the part of any branch or instrumentality of

the government." 2 This constitutional requirement for an actual case and controversy limits this Court's power of review to precisely those suits between adversary litigants with real interests at stake 2 thus preventing it from making all sorts of hypothetical pronouncements on abstract, contingent and amorphous issues. The Court will therefore not pass upon the validity of an act of government or a statute passed by a legislative body without a requisite showing of injury. 3 A personal stake is essential, which absence renders our pronouncements gratuitous and certainly violative of the constitutional requirement for actual cases and controversies. The requirement for standing based on personal injury may of course be bypassed, as the petitioners in this case attempt to do, by considering the case as a "taxpayer suit" which would thereby clothe them with the personality they would lack under ordinary circumstances. However, the act assailed by the petitioners on the whole involves the generation rather than disbursement of public funds. In a line of cases starting from Pascual v. Secretary of Public Works 4 "taxpayer suits" have been understood to refer only to those cases where the act or statute assailed involves the illegal or unconstitutional disbursement of public funds derived from taxation. The main premise behind the "taxpayer suit" is that the pecuniary interest of the taxpayer is involved whenever there is an illegal or wasteful use of public funds which grants them the right to question the appropriation or disbursement on the basis of their contribution to government funds. 5 Since it has not been alleged that an illegal appropriation or disbursement of a fund derived from taxation would be made in the instant case, I fail to see how the petitioners in this case would be able to satisfy the locus standi requirement on the basis of a "taxpayer's suit". This alone should inhibit this Court from proceeding with the case at bench. The interest alleged and the potential injury asserted are far too general and hypothetical for us to rush into a judicial determination of what to me appears to be judgment better left to executive branch of our government. This brings me to one more important point: The idea that a norm of constitutional adjudication could be lightly brushed aside on the mere supposition that an issue before the Court is of paramount public concern does great harm to a democratic system which espouses a delicate balance between three separate but co-equal branches of

government. It is equally of paramount public concern, certainly paramount to the survival of our democracy, that acts of the other branches of government are accorded due respect by this Court. Such acts, done within their sphere of competence, have been and should always be accorded with a presumption of regularity. When such acts are assailed as illegal or unconstitutional, the burden falls upon those who assail these acts to prove that they satisfy the essential norms of constitutional adjudication, because when we finally proceed to declare an act of the executive or legislative branch of our government unconstitutional or illegal, what we actually accomplish is the thwarting of the will of the elected representatives of the people in the executive or legislative branches government.6 Notwithstanding Article VIII, Section 1 of the Constitution, since the exercise of the power of judicial review by this Court is inherently antidemocratic, this Court should exercise a becoming modesty in acting as a revisor of an act of the executive or legislative branch. The tendency of a frequent and easy resort to the function of judicial review, particularly in areas of economic policy has become lamentably too common as to dwarf the political capacity of the people expressed through their representatives in the policy making branches of government and to deaden their sense of moral responsibility. 7 This court has been accused, of late, of an officious tendency to delve into areas better left to the political branches of government. 8 This tendency, if exercised by a court running riot over the other coequal branches of government, poses a greater danger to our democratic system than the perceived danger real or imagined of an executive branch espousing economic or social policies of doubtful moral worth. Moreover economic policy decisions in the current milieu- including the act challenged in the instant case-involve complex factors requiring flexibility and a wide range of discretion on the part of our economic managers which this Court should respect because our power of review, under the constitution, is a power to check, not to supplant those acts or decisions of the elected representatives of the people. Finally, the instant petition was brought to this Court on the assumption that the issue at bench raises primarily constitutional issues. As it has ultimately turned out, the core foundation of the

petitioners' objections to the LOTTO operations was based on the validity of the contract between the PCSO and the PGMC in the light of Section 1 of R.A. 1169 as amended by B.P. Blg. 427. It might have been much more appropriate for the issue to have taken its normal course in the courts below. I vote to deny the petition.

# Separate Opinions CRUZ, J., concurring: I am happy to join Mr. Justice Hilario G. Davide, Jr. in his excellent ponencia. I will add the following personal observations only for emphasis as it is not necessary to supplement his thorough exposition. The respondents take great pains to cite specific provisions of the contract to show that it is PCSO that is actually operating the on-line lottery, but they have not succeeded in disproving the obvious, to wit, that the document was intentionally so crafted to make it appear that the operation is not a joint undertaking of PCSO and PGMC but a mere lease of services. It is a clever instrument, to be sure, but we are, gratifyingly, not deluded. Lawyers have a special talent to disguise the real intention of the parties in a contract to make it come ostensibly within the provisions of a law although the real if furtive purpose is to violate it. That talent has been exercised in this case, but not convincingly enough. It should be quite clear, from the adroit way the contract has been drafted, that the primary objective was to avoid the conclusion that PCSO will be operating a lottery "in association, collaboration or joint venture with any person, association, company or entity," which is prohibited by Section 1 of Rep. Act No. 1169 as amended by B.P. Blg. 42. Citing the self-serving provisions of the contract, the respondents would have us believe that the contract is perfectly lawful because all it does is provide for the lease to PCSO of the technical know-how and equipment of PGMC, with PCSO acting as "the sole and individual operator" of the lottery. I am glad we are not

succumbing to this sophistry. Despite the artfulness of the contract (authorship of which was pointedly denied by both counsel for the government and the private respondent during the oral argument on this case), a careful study will reveal telling stipulations that it is PGMC and not PCSO that will actually be operating the lottery. Thus, it is provided inter alia that PGMC shall furnish all capital equipment and other facilities needed for the operation; bear all expenses relating to the operation, including those for the salaries and wages of the administrative and technical personnel; undertake a positive advertising and promotion campaign for public support of the lottery; establish a radio communications network throughout the country as part of the operation; and assume all risks if the revenues from ticket sales are insufficient to pay the entire prize money. Most significantly, to show that it is only after eight years from the effectivity of the contract that PCSO will actually operate the lottery, Par. 6.7 of the agreement provides that PGMC shall: 6.7. Upon effectivity of this Contract, commence the training of PCSO and other local personnel and the transfer of technology and expertise, such that at the end of the term of this Contract, PCSO will be able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System. (Emphasis supplied). In the meantime, that is to say during the entire 8-year term of the contract, it will be PGMC that will be operating the lottery. Only "at the end of the term of this Contract" will PCSO "be able to effectively take-over the Facilities and efficiently operate the On-Line Lottery System." Even on the assumption that it is PCSO that will be operating the lottery at the very start, the authority granted to PGMC by the agreement will readily show that PCSO will not be acting alone, as the respondents pretend. In fact, it cannot. PGMC is an indispensable co-worker because it has the equipment and the technology and the management skills that PCSO does not have at this time for the operation of the lottery, PCSO cannot deny that it needs the assistance of PGMC for this purpose, which was its reason for entering into the contract in the first place.

And when PCSO does avail itself of such assistance, how will it be operating the lottery? Undoubtedly, it will be doing so "in collaboration, association or joint venture" with PGMC, which, let it be added, will not be serving as a mere "hired help" of PCSO subject to its control. PGMC will be functioning independently in the discharge of its own assigned role as stipulated in detail under the contract. PGMC is plainly a partner of PCSO in violation of law, no matter how PGMC's assistance is called or the contract is denominated. Even if it be conceded that the assistance partakes of a lease of services, the undeniable fact is that PCSO would still be collaborating or cooperating with PGMC in the operation of the lottery. What is even worse is that PCSO and PGMC may be actually engaged in a joint venture, considering that PGMC does not collect the usual fixed rentals due an ordinary lessor but is entitled to a special "Rental Fee," as the contract calls it, "equal to four point nine percent (4.9%) of gross receipts from ticket sales." The flexibility of this amount is significant. As may be expected, it will induce in PGMC an active interest and participation in the success of PCSO that is not expected of an ordinary detached lessor who gets to be paid his rentals not a rental fee whether the lessee's business prospers or not. PGMC's share in the operation depends on its own performance and the effectiveness of its collaboration with PCSO. Although the contract pretends otherwise, PGMC is a coinvestor with PCSO in what is practically, if not in a strictly legal sense, a joint venture. Concerning the doctrine of locus standi, I cannot agree that out of the sixty million Filipinos affected by the proposed lottery, not a single solitary citizen can question the agreement. Locus standi is not such an absolute rule that it cannot admit of exceptions under certain conditions or circumstances like those attending this transaction. As I remarked in my dissent in Guazon v. De Villa, 181 SCRA 623, "It is not only the owner of the burning house who has the right to call the firemen. Every one has the right and responsibility to prevent the fire from spreading even if he lives in the other block." What is especially galling is that the transaction in question would foist upon our people an essentially immoral activity through the

instrumentality of a foreign corporation, which naturally does not have the same concern for our interests as we ourselves have. I am distressed that foreigners should be allowed to exploit the weakness of some of us for instant gain without work, and with the active collaboration and encouragement of our own government at that. Feliciano, J., concurring I agree with the conclusions reached by my distinguished brother in the Court Davide, Jr., J., both in respect of the question of locus standi and in respect of the merits of this case, that is, the issues of legality and constitutionality of the Contract of Lease entered into between the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corporation (PGMC). In this separate opinion, I propose to address only the question of locus standi. It is with some hesitation that I do so, considering the extensive separate opinions on this question written by my learned brothers Melo, Puno and Vitug, JJ. I agree with the great deal of what my brothers Melo, Puno and Vitug say about locus standi in their separate opinions and there is no need to go over the ground that I share with them. Because, however, I reach a different conclusion in respect of the presence or absence of locus standi on the part of the petitioners in the case before the Court, there is an internal need (a need internal to myself) to articulate the considerations which led me to that conclusion. There is no dispute that the doctrine of locus standi reflects an important constitutional principle, that is, the principle of separation of powers which, among other things, mandates that each of the great Departments of government is responsible for performance of its constitutionally allotted tasks. Insofar as the Judicial Department is concerned, the exercise of judicial power and carrying out of judicial functions commonly take place within the context of actual cases or controversies. This, in turn, reflects the basic notion of judicial power as the power to resolve actual disputes and of the traditional business of courts as the hearing and deciding of specific controversies brought before them. In our own jurisdiction, and at least since the turn of the present century, judicial power has always included the power of judicial review, understood as the authority of courts (more

specifically the Supreme Court) to assay contested legislative and executive acts in terms of their constitutionality or legality. Thus, the general proposition has been that a petitioner who assails the legal or constitutional quality of an executive or legislative act must be able to show that he has locus standi. Otherwise, the petition becomes vulnerable to prompt dismissal by the court. There is, upon the other hand, little substantive dispute that the possession of locus standi 1 is not, in each and every case, a rigid and absolute requirement for access to the courts. Certainly that is the case where great issues of public law are at stake, issues which cannot be approached in the same way that a court approaches a suit for the collection of a sum of money or a complaint for the recovery of possession of a particular piece of land. The broad question is when, or in what types of cases, the court should insist on a clear showing of locus standi understood as a direct and personal interest in the subject matter of the case at bar, and when the court may or should relax that apparently stringent requirement and proceed to deal with the legal or constitutional issues at stake in a particular case. I submit, with respect, that it is not enough for the Court simply to invoke "public interest" or even "paramount considerations of national interest," and to say that the specific requirements of such public interest can only be ascertained on a "case to case" basis. For one thing, such an approach is not intellectually satisfying. For another, such an answer appears to come too close to saying that locus standi exists whenever at least a majority of the Members of this Court participating in a case feel that an appropriate case for judicial intervention has arisen. This is not, however, to say that there is somewhere an over-arching juridical principle or theory, waiting to be discovered, that permits a ready answer to the question of when, or in what types of cases, the need to show locus standi may be relaxed in greater or lesser degree. To my knowledge, no satisfactory principle or theory has been discovered and none has been crafted, whether in our jurisdiction or in the United States. 2 I have neither the competence nor the opportunity to try to craft such principle or formula. It might, however, be useful to attempt to indicate the considerations of

principle which, in the present case, appear to me to require an affirmative answer to the question of whether or not petitioners are properly regarded as imbued with the standing necessary to bring and maintain the present petition. Firstly, the character of the funds or other assets involved in the case is of major importance. In the case presently before the Court, the funds involved are clearly public in nature. The funds to be generated by the proposed lottery are to be raised from the population at large. Should the proposed operation be as successful as its proponents project, those funds will come from well-nigh every town and barrio of Luzon. The funds here involved are public in another very real sense: they will belong to the PCSO, a government owned or controlled corporation and an instrumentality of the government and are destined for utilization in social development projects which, at least in principle, are designed to benefit the general public. My learned brothers Melo, Puno and Vitug, JJ. concede that taxpayers' suits have been recognized as an exception to the traditional requirement of recognized as an exception to the traditional requirement of locus standi. They insist, however, that because the funds here involved will not have been generated by the exercise of the taxing power of the Government, the present petition cannot be regarded as a taxpayer's suit and therefore, must be dismissed by the Court. It is my respectful submission that that constitutes much too narrow a conception of the taxpayer's suit and of the public policy that it embodies. It is also to overlook the fact that tax monies, strictly so called, constitute only one (1) of the major categories of funds today raised and used for public purposes. It is widely known that the principal sources of funding for government operations today include, not just taxes and customs duties, but also revenues derived from activities of the Philippine Amusement Gaming Corporation (PAGCOR), as well as the proceeds of privatization of government owned or controlled corporations and other government owned assets. The interest of a private citizen in seeing to it that public funds, from whatever source they may have been derived, go only to the uses directed and permitted by law is as real and personal and substantial as the interest of a private taxpayer in seeing to it that tax monies are not intercepted on their way to the public treasury or otherwise diverted from uses prescribed or allowed by law. It is also pertinent to note that the more successful the government is in raising

revenues by non-traditional methods such as PAGCOR operations and privatization measures, the lesser will be the pressure upon the traditional sources of public revenues, i.e., the pocket books of individual taxpayers and importers. A second factor of high relevance is the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of the government. A showing that a constitutional or legal provision is patently being disregarded by the agency or instrumentality whose act is being assailed, can scarcely be disregarded by court. The concept of locus standi which is part and parcel of the broader notion of ripeness of the case "does not operate independently and is not alone decisive. . . . [I]t is in substantial part a function of a judge's estimate of the merits of the constitutional [or legal] issue." 3 The notion of locus standi and the judge's conclusions about the merits of the case, in other words, interact with each other. Where the Court perceives a serious issue of violation of some constitutional or statutory limitation, it will be much less difficult for the Court to find locus standi in the petitioner and to confront the legal or constitutional issue. In the present case, the majority of the Court considers that a very substantial showing has been made that the Contract of Lease between the PCSO and the PGMC flies in the face of legal limitations. A third consideration of importance in the present case is the lack of any other party with a more direct and specific interest in raising the questions here being raised. Though a public bidding was held, no losing or dissatisfied bidder has come before the Court. The Office of the Ombudsman has not, to the knowledge of the Court, raised questions about the legality or constitutionality of the Contract of Lease here involved. The National Government itself, through the Office of the Solicitor General, is defending the PCSO Contract (though it had not participated in the drafting thereof). In a situation like that here obtaining, the submission may be made that the institution, so well known in corporation law and practice, of the corporate stockholders' derivative suit furnishes an appropriate analogy and that on the basis of such an analogy, a taxpayer's derivative suit should be recognized as available. The wide range of impact of the Contract of Lease here assailed and

of its implementation, constitutes still another consideration of significance. In the case at bar, the agreement if implemented will be practically nationwide in its scope and reach (the PCSO-PGMC Contract is limited in its application to the Island of Luzon; but if the PCSO Contracts with the other two [2] private "gaming management" corporations in respect of the Visayas and Mindanao are substantially similar to PCSO's Contract with PGMC, then the Contract before us may be said to be national indeed in its implications and consequences). Necessarily, the amounts of money expected to be raised by the proposed activities of the PCSO and PGMC will be very substantial, probably in the hundreds of millions of pesos. It is not easy to conceive of a contract with greater and more far-reaching consequences, literally speaking, for the country than the Contract of Lease here involved. Thus, the subject matter of the petition is not something that the Court may casually pass over as unimportant and as not warranting the expenditure of significant judicial resources. In the examination of the various features of this case, the above considerations have appeared to me to be important and as pressing for acceptance and exercise of jurisdiction on the part of this Court. It is with these considerations in mind that I vote to grant due course to the Petition and to hold that the Contract of Lease between the PCSO and PGMC in its present form and content, and given the present state of the law, is fatally defective. PADILLA, J., concurring: My views against gambling are a matter of judicial record. In Basco v. PAGCOR, (G.R. No. 91649, 14 May 1991, 197 SCRA 52) I expressed these views in a separate opinion where I was joined by that outstanding lady jurist, Mme. Justice A. Melencio-Herrera whose incisive approach to legal problems is today missed in this Court. I reproduce here those views because they are highly persuasive to the conclusions I reach in the present controversy: I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means that I agree with the decision insofar as it holds that the prohibition, control, and regulation of the entire activity known as gambling properly pertain to "state policy." It is, therefore, the political departments of government, namely, the

legislative and the executive that should decide on what government should do in the entire area of gambling, and assume full responsibility to the people for such policy. The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of policies adopted by the political departments of government in areas which fall within their authority, except only when such policies pose a clear and present danger to the life, liberty or property of the individual. This case does not involve such a factual situation. However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans the human personality, destroys self-confidence and eviscerates one's self-respect, which in the long run will corrode whatever is left of the Filipino moral character. Gambling has wrecked and will continue to wreck families and homes; it is an antithesis to individual reliance and reliability as well as personal industry which are the touchstones of real economic progress and national development. Gambling is reprehensible whether maintained by government or privatized. The revenues realized by the government out of "legalized" gambling will, in the long run, be more than offset and negated by the irreparable damage to the people's moral values. Also, the moral standing of the government in its repeated avowals against "illegal gambling" is fatally flawed and becomes untenable when it itself engages in the very activity it seeks to eradicate. One can go through the Court's decision today and mentally replace the activity referred to therein as gambling, which is legal only because it is authorized by law and run by the government, with the activity known as prostitution. Would prostitution be any less reprehensible were it to be authorized by law, franchised, and "regulated" by the government, in return for the substantial revenues it would yield the government to carry out its laudable projects, such as infrastructure and social amelioration? The question, I believe, answers itself. I submit that the sooner the legislative department outlaws all forms of gambling, as a fundamental state policy, and the sooner the executive implements such policy, the better it will be for

the nation. We presently have the sweepstakes lotteries; we already have the PAGCOR's gambling casinos; the Filipino people will soon, if plans do not miscarry, be initiated into an even more sophisticated and encompassing nationwide gambling network known as the "on-line hitech lotto system." To be sure, it is not wealth producing; it is not export oriented. It will draw from existing wealth in the hands of Filipinos and transfer it into the coffers of the PCSO and its foreign partners at a price of further debasement of the moral standards of the Filipino people, the bulk of whom are barely subsisting below the poverty line.
1. It is said that petitioners 1 have no locus standi to bring this suit even as they challenge the legality and constitutionality of a contract of lease between the PCSO, a government-owned corporation and the PGMC, a private corporation with substantial (if not controlling) foreign composition and content. Such contract of lease contains the terms and conditions under which an "on-line hi-tech lotto system" will operate in the country.

As the ponente of the extended, unsigned en banc resolution in Valmonte v. PCSO, (G.R. No. 78716 and G.R. No. 79084, 22 September 1987), I would be the last to downgrade the rule, therein reiterated, that in order to maintain a suit challenging the constitutionality and/or legality of a statute, order or regulation or assailing a particular governmental action as done with grave abuse of discretion or with lack of jurisdiction, the petitioner must show that he has a clear personal or legal right that would be violated with the enforcement of the challenged statute, order or regulation or the implementation of the questioned governmental action. But, in my considered view, this rule maybe (and should be) relaxed when the issue involved or raised in the petition is of such paramount national interest and importance as to dwarf the above procedural rule into a barren technicality. As a unanimous Court en banc aptly put it in De Guia vs. COMELEC, G.R. No. 104712, 6 May 1992, 208 SCRA 420. Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for re-election, much less, that he is prejudiced by the election, by district, in Paraaque. As such, he does not appear to have locus standi, a standing in law, a personal or substantial interest. (Sanidad vs. COMELEC, G.R. No.

L-4640, October 12, 1976. 73 SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March 28, 1969, 27 SCRA 533) He does not also allege any legal right that has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action. However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent, We resolved to brush aside the question of procedural infirmity, even as We perceive the petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmea vs. Commission on Elections. I view the present case as falling within the De Guia case doctrine. For, when the contract of lease in question seeks to establish and operate a nationwide gambling network with substantial if not controlling foreign participation, then the issue is of paramount national interest and importance as to justify and warrant a relaxation of the above-mentioned procedural rule on locus standi. 2. The charter of the PCSO Republic Act No. 1169 as amended by BP No. 42 insofar as relevant, reads: Sec. 1. The Philippine Charity Sweepstakes Office. The Philippine Charity Sweepstakes Office, hereinafter designated the Office, shall be the principal government agency for raising and providing for funds for health programs, medical assistance and services and charities of national character, and as such shall have the general powers conferred in section thirteen of Act Numbered One Thousand Four Hundred Fifty-Nine, as amended, and shall have the authority: A. To hold and conduct charity sweepstakes races, lotteries and other similar activities, in such frequency and manner, as shall be determined, and subject to such rules and regulations as shall be promulgated by the Board of Directors. B. Subject to the approval of the Minister of Human Settlements, to engage in health and welfare-related investments, programs, projects and activities which may be profit-oriented, by itself or in

collaboration, association or joint venture with any person, association, company or entity, whether domestic or foreign, except for the activities mentioned in the preceding paragraph (A), for the purpose of providing for permanent and continuing sources of funds for health programs, including the expansion of existing ones, medical assistance and services, and/or charitable grants: Provided, That such investments will not compete with the private sector in areas where investments are adequate as may be determined by the National Economic and Development Authority. It is at once clear from the foregoing legal provisions that, while the PCSO charter allows the PCSO to itself engage in lotteries, it does not however permit the PCSO to undertake or engage in lotteries in "collaboration, association or joint venture" with others. The palpable reason for this prohibition is, that PCSO should not and cannot be made a vehicle for an otherwise prohibited foreign or domestic entity to engage in lotteries (gambling activities) in the Philippines. The core question then is whether the lease contract between PCSO and PGMC is a device whereby PCSO will engage in lottery in collaboration, association or joint venture with another, i.e. PGMC. I need not go here into the details and different specific features of the contract to show that it is a joint venture between PCSO and PGMC. That has been taken care of in the opinion of Mr. Justice Davide to which I fully subscribe. On a slightly different plane and, perhaps simplified, I consider the agreement or arrangement between the PCSO and PGMC a joint venture because each party to the contract contributes its share in the enterprise or project. PGMC contributes its facilities, equipment and know-how (expertise). PCSO contributes (aside from its charter) the market, directly or through dealers and this to me is most important in the totality or mass of the Filipino gambling elements who will invest in lotto tickets. PGMC will get its 4.9% of gross receipts (with assumption of certain risks in the course of lotto operations); the residue of the whole exercise will go to PCSO. To any person with a minimum of business know-how, this is a joint venture between PCSO and PGMC, plain and simple. But assuming ex gratia argumenti that such arrangement between

PCSO and PGMC is not a joint venture between the two of them to install and operate an "on-line hi-tech lotto system" in the country, it can hardly be denied that it is, at the very least, an association or collaboration between PCSO and PGMC. For one cannot do without the other in the installation, operation and, most importantly, marketing of the entire enterprise or project in this country. Indeed, the contract of lease in question is a clear violation of Republic Act No. 1169 as amended by BP No. 42 (the PCSO charter). Having arrived at the conclusion that the contract of lease in question between the PCSO and PGMC is illegal and, therefore, invalid, I find it unnecessary to dwell on the other issues raised in the pleadings and arguments of the parties. I, therefore, vote to give DUE COURSE to the petition and to declare the contract of lease in question between PCSO and PGMC, for the reasons aforestated, of no force and effect. MELO, J., dissenting: I submit that the petition before the Court deserves no less than outright dismissal for the reason that petitioners, as concerned citizens and as taxpayers and as members of Congress, do not possess the necessary legal standing to assail the validity of the contract of lease entered into by the Philippine Charity Sweepstakes Office and the Philippine Gaming Management Corporation relative to the establishment and operation of an "On-line Hi-Tech Lottery System" in the country. As announced in Lamb vs. Phipps (22 Phil. [1912], 559), "[J]udicial power in its nature, is the power to hear and decide causes pending between parties who have the right to sue and be sued in the courts of law and equity." Necessarily, this implies that a party must show a personal stake in the outcome of the controversy or an injury to himself that can be addressed by a favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the court's remedial powers in his behalf (Warth vs. Seldin, 422 U.S. 490; Guzman vs. Marrero, 180 U.S. 81; McMicken vs. United States, 97 U.S. 204). Here, we have yet to see any of petitioners acquiring a

personal stake in the outcome of the controversy or being placed in a situation whereby injury may be sustained if the contract of lease in question is implemented. It may be that the contract has somehow evoked public interest which petitioners claim to represent. But the alleged public interest which they pretend to represent is not only broad and encompassing but also strikingly and veritably indeterminate that one cannot truly say whether a handful of the public, like herein petitioners, may lay a valid claim of representation in behalf of the millions of citizens spread all over the land who may have just as many varied reactions relative to the contract in question. Any effort to infuse personality on petitioners by considering the present case as a "taxpayer's suit" could not cure the lack of locus standi on the part of petitioners. As understood in this jurisdiction, a "taxpayer's suit" refers to a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation (Pascual vs. Secretary of Public Works, 110 Phil. [1960] 331; Maceda vs. Macaraig, 197 SCRA [1991]; Lozada vs. COMELEC, 120 SCRA [1983] 337; Dumlao vs. COMELEC, 95 SCRA [1980] 392; Gonzales vs. Marcos, 65 SCRA [1975] 624). It cannot be overstressed that no public fund raised by taxation is involved in this case. In fact, it is even doubtful if the rentals which the PCSO will pay to the lessor for its operation of the lottery system may be regarded as "public fund". The PCSO is not a revenue- collecting arm of the government. Income or money realized by it from its operations will not and need not be turned over to the National Treasury. Rather, this will constitute corporate funds which will remain with the corporation to finance its various activities as authorized in its charter. And if ever some semblance of "public character" may be said to attach to its earnings, it is simply because PCSO is a government-owned or controlled entity and not a purely private enterprise. It must be conceded though that a "taxpayer's suit" had been allowed in a number of instances in this jurisdiction. For sure, after the trial was blazed by Pascual vs. Secretary of Public Works, supra, several more followed. It is to be noted, however, that in those occasions where this Court allowed such a suit, the case invariably involved either the constitutionality of a statute or the legality of the disbursement of public funds through the enforcement of what was

perceived to be an invalid or unconstitutional statute or legislation (Pascual, supra; Philippine Constitution Association, Inc. vs. Jimenez, 15 SCRA [1965] 479; Philippine Constitution Association, Inc. vs. Mathay, 18 SCRA [1966] 300; Tolentino vs. COMELEC, 41 SCRA [1971] 702; Pelaez vs. Auditor General, 15 SCRA [1965] 569; Iloilo Palay and Corn Planters Association vs. Feliciano, 13 SCRA [1965] 377). The case before us is not a challenge to the validity of a statute or an attempt to restrain expenditure of public funds pursuant to an alleged invalid congressional enactment. What petitioners ask us to do is to nullify a simple contract of lease entered into by a government-owned corporation with a private entity. That contract, as earlier pointed out, does not involve the disbursement of public funds but of strictly corporate money. If every taxpayer, claiming to have interest in the contract, no matter how remote, could come to this Court and seek nullification of said contract, the day may come when the activities of government corporate entities will ground to a standstill on account of nuisance suits filed against them by persons whose supposed interest in the contract is as remote and as obscure as the interest of any man in the street. The dangers attendant thereto are not hard to discern and this Court must not allow them to come to pass. One final observation must be emphasized. When the petition at bench was filed, the Court decided to hear the case on oral argument on the initial perception that a constitutional issue could be involved. However, it now appears that no question of constitutional dimension is at stake as indeed the majority barely touches on such an issue, concentrating as it does on its interpretation of the contract between the Philippine Charity Sweepstakes Office and the Philippine Gaming Management Corporation. I, therefore, vote to dismiss the petition. PUNO, J., dissenting: At the outset, let me state that my religious faith and family upbringing compel me to regard gambling, regardless of its garb, with hostile eyes. Such antagonism tempts me to view the case at bench as a struggle between good and evil, a fight between the forces of light

against the forces of darkness. I will not, however, yield to that temptation for we are not judges of the Old Testament type who were not only arbiters of law but were also high priests of morality. I will therefore strictly confine the peregrinations of my mind to the legal issues for resolution: (1) whether or not the petitioners have the Locus standi to file the petition at bench; and (2) assuming their locus standi, whether or not the Contract of Lease between PCSO and PGMC is null and void considering: (a) section 1 of R.A. No. 1169, as amended by B.P. Blg. 42 (Charter of PCSO) which prohibits PCSO from holding and conducting lotteries "in collaboration, association or joint venture with any person, association, company or entity"; (b) Act No. 3836 which requires a congressional franchise before any person or entity can establish and operate a telecommunication system; (c) section 11, Art. XII of the Constitution, which requires that for a corporation to operate a public utility, at least 60% of its capital must be owned by Filipino citizens; and (d) R.A. No. 7042, otherwise known as the "Foreign Investments Act", which includes all forms of gambling in its "negative list." While the legal issues abound, I deferentially submit that the threshold issue is the locus standi, or standing to sue, of petitioners. The petition describes petitioner Kilosbayan, Inc., as a non-stock corporation composed of "civic spirited citizens, pastors, priests, nuns, and lay leaders who are committed to the cause of truth, justice, and national renewal." 1 Petitioners Jovito R. Salonga, Cirilo A. Rigos, Ernie Camba, Emilio C. Capulong, Jr., Jose Abcede, Christine Tan, Felipe L. Gozon, Rafael G. Fernando, Raoul V. Victorino, Jose Cunanan, and Quintin S. Doromal joined the petition in their capacity as trustees of Kilosbayan, Inc., and as taxpayers and concerned citizens. 2 Petitioners Freddie Webb and Wigberto Taada joined the petition as senators, taxpayers and concerned citizens. 3 Petitioner Joker P. Arroyo joined the petition as a member of the House of Representative, a taxpayer and a concerned citizen. 4 With due respect to the majority opinion, I wish to focus on the interstices of locus standi, a concept described by Prof. Paul Freund as "among the most amorphous in the entire domain of public law." The requirement of standing to sue inheres from the definition of judicial power. It is not merely a technical rule of procedure which we

are at liberty to disregard. Section 1, Article VIII of the Constitution provides: xxx xxx xxx Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. (Italics supplied) The phrase "actual controversies involving rights which are legally demandable and enforceable" has acquired a cultivated meaning given by courts. It spells out the requirements that must be satisfied before one can come to court to litigate a constitutional issue. Our distinguished colleague, Mr. Justice Isagani A. Cruz, gives a shorthand summary of these requirements when he states that no constitutional question will be heard and decided by courts unless there is a showing of the following: . . . (1) there must be an actual case or controversy; (2) the question of constitutionality must be raised by the proper party; (3) the constitutional question must be raised at the earliest possible opportunity; and (4) the decision of the constitutional question must be necessary to the determination of the case itself. 5 The complexion of the rule on locus standi has been undergoing a change. Mr. Justice Cruz has observed the continuing relaxation of the rule on standing, 6 thus: xxx xxx xxx A proper party is one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of. Until and unless such actual or potential injury is established, the complainant cannot have the legal personality to raise the constitutional question. In Tileson v. Ullmann, a physician questioned the constitutionality of a law prohibiting the use of contraceptives, upon the ground that it might prove dangerous to the life or health of some of his patients whose physical condition would not enable them to bear the rigors of

childbirth. The court dismissed the challenge, holding that the patients of the physician and not the physician himself were the proper parties. In Cuyegkeng v. Cruz, the petitioner challenged in a quo warranto proceeding the title of the respondent who, he claimed, had been appointed to the board of medical examiners in violation of the provisions of the Medical Act of 1959. The Supreme Court dismissed the petition, holding that Cuyegkeng had not made a claim to the position held by Cruz and therefore could not be regarded as a proper party who had sustained an injury as a result of the questioned act. In People v. Vera, it was held that the Government of the Philippines was a proper party to challenge the constitutionality of the Probation Act because, more than any other, it was the government itself that should be concerned over the validity of its own laws. In Ex Parte Levitt, the petitioner, an American taxpayer and member of the bar, filed a motion for leave to question the qualifications of Justice Black who, he averred, had been appointed to the U.S. Supreme Court in violation of the Constitution of the United States. The Court dismissed the petition, holding that Levitt was not a proper party since he was not claiming the position held by Justice Black. The rule before was that an ordinary taxpayer did not have the proper party personality to question the legality of an appropriation law since his interest in the sum appropriated was not substantial enough. Thus, in Custodio v. Senate President, a challenge by an ordinary taxpayer to the validity of a law granting back pay to government officials, including members of Congress, during the period corresponding to the Japanese Occupation was dismissed as having been commenced by one who was not a proper party. Since the first Emergency Powers Cases, however, the rule has been changed and it is now permissible for an ordinary taxpayer, or a group of taxpayers, to raise the question of the validity of an appropriation law. As the Supreme Court then put it. "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." In Tolentino v. Commission on Elections, it was held that a senator had the proper party personality to seek the prohibition of a plebiscite for the ratification of a proposed constitutional amendment. In PHILCONSA v. Jimenez, an organization of taxpayers and citizens was held to be a proper party to question the constitutionality of a law providing for special retirement benefits for members of the legislature. In Sanidad v. Commission on Elections, the Supreme Court upheld the petitioners as proper parties, thus As a preliminary resolution, We rule that the petitioners in L-44640 (Pablo C. Sanidad and Pablito V. Sanidad) possess locus standi to challenge the constitutional premise of Presidential Decree Nos. 991, 1031, and 1033. It is now an ancient rule that the valid source of a statute Presidential Decrees are of such nature may be contested by one who will sustain a direct injury as a result of its enforcement. At the instance of taxpayers, laws providing for the disbursement of public funds may be enjoined, upon the theory that the expenditure of public funds by an officer of the State for the purpose of executing an unconstitutional act constitutes a misapplication of such funds. The breadth of Presidential Decree No. 991 carries an appropriation of Five Million Pesos for the effective implementation of its purposes. Presidential Decree No. 1031 appropriates the sum of Eight Million Pesos to carry out its provisions. The interest of the aforenamed petitioners as taxpayers in the lawful expenditure of these amounts of public money sufficiently clothes them with that personality to litigate the validity of the Decrees appropriating said funds. Moreover, as regard taxpayer's suits, this Court enjoys that open discretion to entertain the same or not. For the present case, We deem it sound to exercise that discretion affirmatively so that the authority upon which the disputed Decrees are predicated may be inquired into. In Lozada v. Commission on Elections, however, the petitioners were held without legal standing to demand the filling of vacancies in the legislature because they had only "a generalized interest' shared with the rest of the citizenry."

Last July 30, 1993, we further relaxed the rule on standing in Oposa, et al. v. Hon. Fulgencio S. Factoran, Jr., 7 where we recognized the locus standi of minors representing themselves as well as generations unborn to protect their constitutional right to a balanced and healthful ecology. I am perfectly at peace with the drift of our decisions liberalizing the rule on locus standi. The once stubborn disinclination to decide constitutional issues due to lack of locus standi is incompatible with the expansion of judicial power mandated in section 1 of Article VIII of the Constitution, i.e., "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." As we held thru the ground breaking ponencia of Mr. Justice Cruz in Daza v. Singson, 8 this provision no longer precludes the Court from resolving political questions in proper cases. But even perusing this provision as a constitutional warrant for the court to enter the once forbidden political thicket, it is clear that the requirement of locus standi has not been jettisoned by the Constitution for it still commands courts in no uncertain terms to settle only "actual controversies involving rights which are legally demandable and enforceable." Stated otherwise, courts are neither free to decide all kinds of cases dumped into their laps nor are they free to open their doors to all parties or entities claiming a grievance. The rationale for this constitutional requirement of locus standi is by no means trifle. It is intended "to assure a vigorous adversary presentation of the case, and, perhaps more importantly to warrant the judiciary's overruling the determination of a coordinate, democratically elected organ of government." 9 It thus goes to the very essence of representative democracies. As Mr. Justice Powell carefully explained in U.S. v. Richardson, 10 viz: Relaxation of standing requirements is directly related to the expansion of judicial power. It seems to me inescapable that allowing unrestricted taxpayer or citizen standing would significantly alter the allocation of power at the national level, with a shift away from a democratic form of government. I also believe that repeated and essentially head-on confrontations between the life-tenured branch and the representative branches of government will not, in the long run, be beneficial to either. The public confidence essential to the

former and the vitality critical to the latter may well erode if we do not exercise self- restraint in the utilization of our power to negative the actions of the other branches. We should be ever mindful of the contradictions that would arise if a democracy were to permit at large oversight of the elected branches of government by a nonrepresentative, and in large measure insulated, judicial branch. Moreover, the argument that the Court should allow unrestricted taxpayer or citizen standing underestimates the ability of the representative branches of the Federal Government to respond to the citizen pressure that has been responsible in large measure for the current drift toward expanded standing. Indeed, taxpayer or citizen advocacy, given its potentially broad base, is precisely the type of leverage that in a democracy ought to be employed against the branches that were intended to be responsive to public attitudes about the appropriate operation of government. "We must as judges recall that, as Mr. Justice Holmes wisely observed, the other branches of Government are ultimate guardians of the liberties and welfare of the people in quite as great a degree as the courts." Unrestrained standing in federal taxpayer or citizen suits would create a remarkably illogical system of judicial supervision of the coordinate branches of the Federal Government. Randolph's proposed Council of Revision, which was repeatedly rejected by the Framers, at least had the virtue of being systematic; every law passed by the legislature automatically would have been previewed by the judiciary before the law could take effect. On the other hand, since the judiciary cannot select the taxpayers or citizens who bring suit or the nature of the suits, the allowance of public actions would produce uneven and sporadic review, the quality of which would be influenced by the resources and skill of the particular plaintiff. And issues would be presented in abstract form, contrary to the Court's recognition that "judicial review is effective largely because it is not available simply at the behest of a partisan faction, but is exercised only to remedy a particular, concrete injury." Sierra Club v. Morton, 405 U.S. 727, 740741, n. 16 (1972). A lesser but not insignificant reason for screening the standing of persons who desire to litigate constitutional issues is economic in character. Given the sparseness of our resources, the capacity of courts to render efficient judicial service to our people is severely

limited. For courts to indiscriminately open their doors to all types of suits and suitors is for them to unduly overburden their dockets, and ultimately render themselves ineffective dispensers of justice. To be sure, this is an evil that clearly confronts our judiciary today. Prescinding from these premises, and with great reluctance, I am not prepared to concede the standing to sue of petitioners. On a personal level, they have not shown that elemental injury in fact which will endow them with a standing to sue. It must be stressed that petitioners are in the main, seeking the nullity not of a law but of a Contract of Lease. Not one of the petitioners is a party to the Contract of Lease executed between PCSO and PGMC. None of the petitioners participated in the bidding, and hence they are not losing bidders. They are complete strangers to the contract. They stand neither to gain nor to lose economically by its enforcement. It seems to me unusual that an unaffected third party to a contract could be allowed to question its validity. Petitioner Kilosbayan cannot justify this officious interference on the ground of its commitment to "truth, justice and national renewal." Such commitment to truth, justice and national renewal, however noble it may be, cannot give Kilosbayan a roving commission to check the validity of contracts entered into by the government and its agencies. Kilosbayan is not a private commission on audit. Neither can I perceive how the other petitioners can be personally injured by the Contract of Lease between PCSO and PGMC even if petitioner Salonga assails as unmitigated fraud the statistical probability of winning the lotto as he compared it to the probability of being struck twice by lightning. The reason is obvious: none of the petitioners will be exposed to this alleged fraud for all of them profess to abjure playing the lotto. It is self-evident that lotto cannot physically or spiritually injure him who does not indulge in it. Petitioners also contend they have locus standi as taxpayers. But the case at bench does not involve any expenditure of public money on the part of PCSO. In fact, paragraph 2 of the Contract of Lease provides that it is PGMC that shall build, furnish, and maintain at its own expense and risk the facilities for the On-Line Lottery System of PCSO and shall bear all maintenance and other costs. Thus, PGMC alleged it has already spent P245M in equipment and fixtures and

would be investing close to P1 billion to supply adequately the technology and other requirements of PCSO. 11 If no tax money is being illegally deflected in the Contract of Lease between PCSO and PGMC, petitioners have no standing to impugn its validity as taxpayers. Our ruling in Dumlao v. Comelec, 12 settled this issue well enough, viz: However, the statutory provisions questioned in this case, namely, sec. 7, BP Blg. 51, and sections 4, 1, and 5 BP Blg. 52, do not directly involve the disbursement of public funds. While, concededly, the elections to be held involve the expenditure of public moneys, nowhere in their Petition do said petitioners allege that their tax money is "being extracted and spent in violation of specific constitutional protections against abuses of legislative power" (Flast v. Cohen, 392 U.S. 83 [1960]), or that there is a misapplication of such funds by respondent COMELEC (see Pascual vs. Secretary of Public Works, 110 Phil. 331 [1960]), or that public money is being deflected to any improper purpose. Neither do petitioners seek to restrain respondent from wasting public funds through the enforcement of an invalid or unconstitutional law. (Philippine Constitution Association vs. Mathay, 18 SCRA 300 [1966]), citing Philippine Constitution Association vs. Gimenez, 15 SCRA 479 [1965]). Besides, the institution of a taxpayer's suit, per se, is no assurance of judicial review. As held by this Court in Yan vs. Macapagal (43 SCRA 677 [1972]), speaking through our present Chief Justice, this Court is vested with discretion as to whether or not a taxpayer's suit should be entertained. Next, petitioners plead their standing as "concerned citizens." As citizens, petitioners are pleading that they be allowed to advocate the constitutional rights of other persons who are not before the court and whose protection is allegedly their concern. A citizen qua citizen suit urges a greater relaxation of the rule on locus standi. I feel no aversion to the further relaxation of the rule on standing to accommodate what in other jurisdictions is known as an assertion of jus tertii in constitutional litigation provided the claimant can demonstrate: (1) an injury in fact to himself, and (2) the need to prevent the erosion of a preferred constitutional right of a third person. As stressed before, the first requirement of injury in fact cannot be abandoned for it is an essential element for the exercise of

judicial power. Again, as stressed by Mr. Justice Powell, viz: 13 The revolution in standing doctrine that has occurred, particularly in the 12 years since Baker v. Carr, supra, has not meant, however, that standing barriers have disappeared altogether. As the Court noted in Sierra Club, "broadening the categories of injury that may be alleged in support of standing is a different matter from abandoning the requirement that the party seeking review must himself have suffered an injury." 405 U.S., at 738 . . . Indeed, despite the diminution of standing requirements in the last decade, the Court has not broken with the traditional requirement that, in the absence of a specific statutory grant of the right of review, a plaintiff must allege some particularized injury that sets him apart from the man on the street. I recognize that the Court's allegiance to a requirement of particularized injury has on occasion required a reading of the concept that threatens to transform it beyond recognition. E.G., Baker v. Carr, supra; Flast v. Cohen, supra. But despite such occasional digressions, the requirement remains, and I think it does so for the reasons outlined above. In recognition of those considerations, we should refuse to go the last mile towards abolition of standing requirements that is implicit in broadening the "precarious opening" for federal taxpayers created by Flast, see 392 U.S., at 116 (Mr. Justice Fortas, concurring) or in allowing a citizen qua citizen to invoke the power of the federal courts to negative unconstitutional acts of the Federal Government. In sum, I believe we should limit the expansion of federal taxpayer and citizen standing in the absence of specific statutory authorization to an outer boundary drawn by the results in Flast and Baker v. Carr. I think we should face up to the fact that all such suits are an effort "to employ a federal court as a forum in which to air . . . generalized grievances about the conduct of government or the allocation of power in the Federal System." Flast v. Cohen, 392 U.S., at 106. The Court should explicitly reaffirm traditional prudential barriers against such public actions. My reasons for this view are rooted in respect for democratic processes and in the conviction that "[t]he powers of the federal judiciary will be adequate for the great burdens placed upon them only if they are employed prudently, with recognition of the strengths as well as the hazards that go with our kind of

representative government." Id., at 131 The second requirement recognizes society's right in the protection of certain preferred rights in the Constitution even when the rightholders are not before the court. The theory is that their dilution has a substantial fall out detriment to the rights of others, hence the latter can vindicate them. In the case at bench, it is difficult to see how petitioners can satisfy these two requirements to maintain a jus tertii claim. They claim violation of two constitutional provisions, to wit: Section 1, Article XIII. The Congress shall give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and its increments. and Section 11, Article XII. - No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorizations be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizen of the Philippines. Section 1, Article XIII of the Constitution cannot be the matrix of petitioners' jus tertii claim for it expresses no more than a policy

direction to the legislative in the discharge of its ordained duty to give highest priority to the enactment of measures that protect and enhance the right of all the people to human dignity, reduce social, economic, and political inequalities and remove cultural inequities by equitably diffusing wealth and political power for the common good. Whether the act of the legislature in amending the charter of PCSO by giving it the authority to conduct lotto and whether the Contract of Lease entered into between PCSO and PGMC are incongruent to the policy direction of this constitutional provision is a highly debatable proposition and can be endlessly argued. Respondents steadfastly insist that the operation of lotto will increase the revenue base of PCSO and enable government to provide a wider range of social services to the people. They also allege that the operation of hightech lotto will eradicate illegal jueteng. Petitioners are scandalized by this submission. They dismiss gambling as evil per se and castigate government for attempting to correct a wrong by committing another wrong. In any event, the proper forum for this debate, however cerebrally exciting it may be, is not this court but congress. So we held in PCSO v. Inopiquez, to wit: 14 By bringing their suit in the lower court, the private respondents in G.R. No. 79084 do not question the power of PCSO to conduct the Instant Sweepstakes game. Rather, they assail the wisdom of embarking upon this project because of their fear of the "pernicious repercussions" which may be brought about by the Instant Sweepstakes Game which they have labelled as "the worst form of gambling" which thus "affects the moral values" of the people. The Court, as held in several cases, does not pass upon questions of wisdom, justice, or expediency of legislation and executive acts. It is not the province of the courts to supervise legislation or executive orders as to keep them within the bounds of propriety, moral values and common sense. That is primarily and even exclusively a concern of the political departments of the government; otherwise, there will be a violation of the principle of separation of powers. (Italics supplied) I am not also convinced that petitioners can justify their locus standi to advocate the rights of hypothetical third parties not before the court by invoking the need to keep inviolate section 11, Article XII of the

Constitution which imposes a nationality requirement on operators of a public utility. For even assuming arguendo that PGMC is a public utility, still, the records do not at the moment bear out the claim of petitioners that PGMC is a foreign owned and controlled corporation. This factual issue remains unsettled and is still the subject of litigation by the parties in the Securities and Exchange Commission. We are not at liberty to anticipate the verdict on this contested factual issue. But over and above this consideration, I respectfully submit that this constitutional provision does not confer on third parties any right of a preferred status comparable to the Bill of Rights whose dilution will justify petitioners to vindicate them in behalf of its rightholders. The legal right of hypothetical third parties they profess to advocate is to my mind too impersonal, too unsubstantial, too indirect, too amorphous to justify their access to this Court and the further lowering of the constitutional barrier of locus standi. Again, with regret, I do not agree that the distinguished status of some of the petitioners as lawmakers gives them the appropriate locus standi. I cannot perceive how their constitutional rights and prerogatives as legislators can be adversely affected by the contract in question. Their right to enact laws for the general conduct of our society remains unimpaired and undiminished. 15 Their status as legislators, notwithstanding, they have to demonstrate that the said contract has caused them to suffer a personal, direct, and substantial injury in fact. They cannot simply advance a generic grievance in common with the people in general. I am not unaware of our ruling in De Guia v. Comelec, 16 viz: Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for reelection, much less, that he is prejudiced by the election, by district, in Paraaque. As such, he does not appear to have locus standi, a standing in law, a personal or substantial interest. (Sanidad vs. COMELEC, G.R. No. L-44640, October 12, 1976, 73 SCRA 333; Municipality of Malabang vs. Benito, G.R. No. L-28113, March 28, 1969, 27 SCRA 533). He does not also allege any legal right that has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action.

However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent, We resolved to brush aside the question of procedural infirmity, even as We perceive the petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmena vs. Commission on Elections. It is my respectful submission, however, that we should re-examine de Guia. It treated the rule on locus standi as a mere procedural rule. It is not a plain procedural rule but a constitutional requirement derived from section 1, Article VIII of the Constitution which mandates courts of justice to settle only "actual controversies involving rights which are legally demandable and enforceable." The phrase has been construed since time immemorial to mean that a party in a constitutional litigation must demonstrate a standing to sue. By downgrading the requirement on locus standi as a procedural rule which can be discarded in the name of public interest, we are in effect amending the Constitution by judicial fiat. De Guia would also brush aside the rule on locus standi if a case raises an important issue. In this regard, I join the learned observation of Mr. Justice Feliciano: "that it is not enough for the Court simply to invoke 'public interest' or even 'paramount considerations of national interest,' and to say that the specific requirements of such public interest can only be ascertained on a 'case to case' basis. For one thing, such an approach is not intellectually satisfying. For another, such an answer appears to come too close to saying that locus standi exists whenever at least a majority of the Members of this Court participating in a case feel that an appropriate case for judicial intervention has arisen." I also submit that de Guia failed to perceive that the rule on locus standi has little to do with the issue posed in a case, however, important it may be. As well pointed out in Flast v. Cohen: 17 The fundamental aspect of standing is that it focuses on the party seeking to get his complaint before a federal court and not on the issues he wishes to have adjudicated. The "gist of the question of

standing" is whether the party seeking relief has "alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions." Baker v. Carr, 369 U.S. 186, 204 (1962). In other words, when standing is placed in issue in a case, the question is whether the person whose standing is challenged is a proper party to request an adjudication of a particular issue and not whether the issue itself is justiciable. Thus, a party may have standing in a particular case, but the federal court may nevertheless decline to pass on the merits of the case because, for example, it presents a political question. A proper party is demanded so that federal courts will not be asked to decide "ill-defined controversies over constitutional issues," United public Workers v. Mitchell, 330 U.S. 75, 90 (1947), or a case which is of "a hypothetical or abstract character," Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 240 (1937). It is plain to see that in de Guia, the court took an unorthodox posture, to say the least. It held there was no proper party before it, and yet it resolved the issues posed by the petition. As there was no proper party before the court, its decision is vulnerable to be criticized as an advisory opinion. With due respect, the majority decision appears to have set a dangerous precedent by unduly trivializing the rule on locus standi. By its decision, the majority has entertained a public action to annul a private contract. In so doing, the majority may have given sixty (60) million Filipinos the standing to assail contracts of government and its agencies. This is an invitation for chaos to visit our law on contract, and certainly will not sit well with prospective foreign investors. Indeed, it is difficult to tread the path of the majority on this significant issue. The majority granted locus standi to petitioners because of lack of any other party with more direct and specific interest. But one has standing because he has standing on his own and standing cannot be acquired because others with standing have refused to come to court. The thesis is also floated that petitioners have standing as they can be considered taxpayers with right to file derivative suit like a stockholder's derivative suit in private corporations. The fact, however, is that PCSO is not a private but a quasi-public corporation. Our law on private corporation categorically sanctions stockholder's

derivative suit. In contrast, our law on public corporation does not recognize this so-called taxpayer's derivative suit. Hence, the idea of a taxpayer's derivative suit, while alluring, has no legal warrant. Our brethren in the majority have also taken the unprecedented step of striking down a contrast at the importunings of strangers thereto, but without justifying the interposition of judicial power on any felt need to prevent violation of an important constitutional provision. The contract in question was voided on the sole ground that it violated an ordinary statute, section 1 of R.A. 1169, as amended by B.P. Blg. 42. If there is no provision of the Constitution that is involved in the case at bench, it boggles the mind how the majority can invoke considerations of national interest to justify its abandonment of the rule on locus standi. The volume of noise created by the case cannot magically convert it to a case of paramount national importance. By its ruling, the majority has pushed the Court in unchartered water bereft of any compass, and it may have foisted the false hope that it is the repository of all remedies. If I pay an unwavering reverence to the rule of locus standi, it is because I consider it as a touchstone in maintaining the proper balance of power among the three branches of our government. The survival of our democracy rests in a large measure on our ability to maintain this delicate equipoise of powers. For this reason, I look at judicial review from a distinct prism. I see it both as a power and a duty. It is a power because it enables the judiciary to check excesses of the Executive and the Legislative. But, it is also a duty because its requirement of locus standi, among others, Executive and the Legislative. But, it is also a duty because its requirement of locus standi, among others, keeps the judiciary from overreaching the powers of the other branches of government. By balancing this duality, we are able to breathe life to the principle of separation of powers and prevent tyranny. To be sure, it is our eternal concern to prevent tyranny but that includes tyranny by ourselves. The Constitution did not install a government by the judiciary, nay, not a government by the unelected. In offering this submission, I reject the sublimal fear that an unyielding insistence on the rule on locus standi will weaken the judiciary vis-a-vis the other branches of government. The hindsight of history ought to tell us that it is not power per se that strengthens. Power unused is preferable than power misused. We

contribute to constitutionalism both by the use of our power to decide and its non use. As well said, the cases we decide are as significant as the cases we do not decide. Real power belongs to him who has power over power. IN VIEW WHEREOF, and strictly on the ground of lack of locus standi on the part of petitioners, I vote to DENY the petition. VITUG, J., dissenting: Judicial power encompasses both an authority and duty to resolve "actual controversies involving rights which are legally demandable and enforceable" (Article VIII, Section 1, 1987 Constitution). As early as the case of Lamb vs. Phipps, 1 this Court ruled: "Judicial power, in its nature, is the power to hear and decide causes pending between parties who have the right to sue in the courts of law and equity." 2 An essential part of, and corollary to, this principle is the locus standi of a party litigant, referring to one who is directly affected by, and whose interest is immediate and substantial in, the controversy. The rule requires that a party must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the exercise of the court's remedial powers in his behalf. 3 If it were otherwise, the exercise of that power can easily become too unwieldy by its sheer magnitude and scope to a point that may, in no small degree, adversely affect its intended essentiality, stability and consequentiality. Locus standi, nevertheless, admits of the so-called "taxpayer's suit." Taxpayer's suits are actions or proceedings initiated by one or more taxpayers in their own behalf or, conjunctively, in representation of others similarly situated for the purpose of declaring illegal or unauthorized certain acts of public officials which are claimed to be injurious to their common interests as such taxpayers (Cf. 71 Am Jur 2d., 179-180). The principle is predicated upon the theory that taxpayers are, in equity, the cestui que trust of tax funds, and any illegal diminution thereof by public officials constitutes a breach of trust even as it may result in an increased burden on taxpayers (Haddock vs. Board of Public Education, 86 A 2d 157; Henderson vs. McCormick, 17 ALR 2d 470).

Justice Brandeis of the United States Supreme Court, in his concurring opinion in Ashwander vs. Tennessee Valley Authority (297 U.S. 288), said: . . . . The Court will not pass upon the validity of a statute upon complaint of one who fails to show that he is injured by its operation. Tyler v. The Judges, 179 U.S. 405; Hendrick v. Maryland, 234 U.S. 610, 621. Among the many applications of this rule, none is more striking than the denial of the right of challenge to one who lacks a personal or property right. Thus, the challenge by a public official interested only in the performance of his official duty will not be entertained. Columbus & Greenville Ry. v. Miller, 283 U.S. 96, 99100. In Fairchild v. Hughes, 258 U.S. 126, the Court affirmed the dismissal of a suit brought by a citizen who sought to have the Nineteenth Amendment declared unconstitutional. In Massachusetts v. Mellon, 262 U.S. 447, the challenge of the federal Maternity Act was not entertained although made by the Commonwealth on behalf of all its citizens." Justice Brandeis' view, shared by Justice Frankfurter in Joint AntiFascist Refugee Commission vs. McGrath (351 U.S. 123), was adopted by the U.S. Supreme Court in Flast vs. Cohen (392 U.S. 83) which held that it is only when a litigant is able to show such a personal stake in the controversy as to assure a concrete adverseness in the issues submitted that legal standing can attach. A "taxpayer's suit," enough to confer locus standi to a party, we have held before, is understood to be a case where the act complained of directly involves the illegal disbursement of public funds derived from taxation. 4 It is not enough that the dispute concerns public funds. A contrary rule could easily lead to a limitless application of the term "taxpayer's suit," already by itself a broad concept, since a questioned act of government would almost so invariably entail, as a practical matter, a financial burden of some kind. To be sure, serious doubts have even been raised on the propriety and feasibility of unqualifiedly recognizing the "taxpayer's suit" as an exception from the standard rule of requiring a party who invokes the exercise of judicial power to have a real and personal interest or a direct injury in the outcome of a controversy. This Court has

heretofore spoken on the matter, at times even venturing beyond the usual understanding of its applicability in the name of national or public interest. It is remarkable, nevertheless, that the accepted connotation of locus standi has still managed to be the rule, sanctioning, by way of exception, the so-called "taxpayer's suit" which courts accept on valid and compelling reasons. A provision which has been introduced by the 1987 Constitution is a definition, for the first time in our fundamental law, of the term "judicial power," as such authority and duty of courts of justice "to settle actual controversies involving rights which are legally demandable and enforceable and to determine whether or not there has been a grave abuse of discretion, amounting to lack or excess of jurisdiction, on the part of any branch or instrumentality of the Government" (Article VIII, Section 1, Constitution). I take it that the provision has not been intended to unduly mutate, let alone to disregard, the long established rules on locus standi. Neither has it been meant, I most respectfully submit, to do away with the principle of separation of powers and its essential incidents such as by, in effect, conferring omnipotence on, or allowing an intrusion by, the courts in respect to purely political decisions, the exercise of which is explicitly vested elsewhere, and subordinate, to that of their own, the will of either the Legislative Department or the Executive Department both co- equal, independent and coordinate branches, along with the Judiciary, in our system of government. Again, if it were otherwise, there indeed would be truth to the charge, in the words of some constitutionalists, that "judicial tyranny" has been institutionalized by the 1987 Constitution, an apprehension which should, I submit, rather be held far from truth and reality. In sum, while any act of government, be it executive in nature or legislative in character, may be struck down and declared a nullity either because it contravenes an express provision of the Constitution or because it is perceived and found to be attended by or the result of grave abuse of discretion, amounting to lack or excess of jurisdiction, that issue, however, must first be raised in a proper judicial controversy. The Court's authority to look into and grant relief in such cases would necessitate locus standi on the part of party litigants. This requirement, in my considered view, is not merely procedural or technical but goes into the essence of jurisdiction and the

competence of courts to take cognizance of justiciable disputes. In Bugnay Construction and Development Corporation vs. Laron, this Court ruled:
5

. . . . Considering the importance to the public of a suit assailing the constitutionality of a tax law, and in keeping with the Court's duty, specially explicated in the 1987 Constitution, to determine whether or not the other branches of the Government have kept themselves within the limits of the Constitution and the laws and that they have not abused the discretion given to them, the Supreme Court may brush aside technicalities of procedure and take cognizance of the suit. (Citing Kapatiran vs. Tan, G.R. No. 81311, June 30, 1988.) However, for the above rule to apply, it is exigent that the taxpayerplaintiff sufficiently show that he would be benefited or injured by the judgment or entitled to the avails of the suit as a real party in interest. (Citing Estate of George Litton vs. Mendoza, G.R. No. 49120, June 30, 1988.) Before he can invoke the power of judicial review, he must specifically prove that he has sufficient interest in preventing the illegal expenditure of money raised by taxation (citing 11 Am. Jur. 761; Dumlao, et al. vs. Commission on Elections, 95 SCRA 392) and that he will sustain a direct injury as a result of the enforcement of the questioned statute or contract. (Citing Sanidad, et al. vs. Commission on Elections, et al., 73 SCRA 333.) It is not sufficient that he has merely a general interest common to all members of the public. (Citing Ex Parte Levitt, 302 U.S. 633, cited in 15 SCRA 497, Annotation.) As so well pointed out by Mr. Justice Camilo D. Quiason during the Court's deliberations, "due respect and proper regard for the rule on locus standi would preclude the rendition of advisory opinions and other forms of pronouncement on abstract issues, avoid an undue interference on matters which are not justiciable in nature and spare the Court from getting itself involved in political imbroglio." The words of Senate President Edgardo J. Angara, carry wisdom; we quote: The powers of the political branches of our government over economic policies is rather clear: the Congress is to set in broad but

definite strokes the legal framework and structures for economic development, while the Executive provides the implementing details for realizing the economic ends identified by Congress and executes the same. xxx xxx xxx If each economic decision made by the political branches of government, particularly by the executive, are fully open to reexamination by the judicial branch, then very little, if any, reliance can be placed by private economic actors on those decisions. Investors would always have to factor in possible costs arising from judiciallydetermined changes affecting their immediate business, notwithstanding assurances by executive authorities. Judicial decisions are, in addition, inflexible and can never substitute for sound decision-making at the level of those who are assigned to execute the laws of the land. Since judicial power cannot be exercised unless an actual controversy is brought before the courts for resolution, decisions cannot be properly modified unless another appropriate controversy arises." (Sen. Edgardo J. Angara, "The Supreme Court in Economic Policy Making," Policy Review A Quarterly Journal of Policy Studies, Vol. 1, No. 1, January-March 1994, published by the Senate Policy Studies Group, pp. 2-3.) A further set-back in entertaining the petition is that it unfortunately likewise strikes at factual issues. The allegations to the effect that irregularities have been committed in the processing and evaluation of the bids to favor respondent PGMC; that the Malacaang Special Review Committee did not verify warranties embodied in the contract; that the operation of telecommunication facilities is indispensable in the operation of the lottery system; the involvement of multi-national corporations in the operation of the on-line "hi-tech" lottery system, and the like, require the submission of evidence. This Court is not a trier of facts, and it cannot, at this time, resolve the above issues. Just recently, the Court has noted petitioners' manifestation of its petition with the Securities and Exchange Commission "for the nullification of the General Information Sheets of PGMC" in respect particularly to the nationality holdings in the corporation. The doctrine of primary jurisdiction would not justify a disregard of the jurisdiction of, nor

would it permit us to now preempt, said Commission on the matter. Petitioners strongly assert, in an attempt to get the Court's concurrence in accepting the petition, that since lottery is a game of chance, the "lotto" system would itself be a "crime against morals" defined by Articles 195-199 6 of the Revised Penal Code. Being immoral and a criminal offense under the Revised Penal Code, petitioners contend, any special law authorizing gambling must, by all canons of statutory constructions, be interpreted strictly against the grantee. Citing previous decisions of this Court, they maintain that lottery is gambling, pure and simple, 7 and that this Court has consistently condemned the immorality and illegality of gambling to be a "national offense and not a minor transgression;" 8 "that it is a social scourge which must be stamped out;" 9 and, "that it is pernicious to the body politic and detrimental to the nation and its citizens." 10 I most certainly will not renounce this Court's above concerns. Nevertheless, the Court must recognize the limitations of its own authority. Courts neither legislate nor ignore legal mandates. Republic Act No. 1169, as amended, explicitly gives public respondent PCSO the authority and power "to hold and conduct sweepstakes races, lotteries, and other similar activities." In addition, it is authorized: c. To undertake any other activity that will enhance its funds generation, operations and funds management capabilities, subject to the same limitations provided for in the preceding paragraph. It shall have a Board of Directors, hereinafter designated the Board, composed of five members who shall be appointed, and whose compensation and term of office shall be fixed, by the President. xxx xxx xxx Sec.9. Powers and functions of the Board of Directors. The Board of Directors of the Office shall have the following powers and functions.

(a) To adopt or amend such rules and regulations to implement the provisions of this Act. xxx xxx xxx (d) To promulgate rules and regulations for the operation of the Office and to do such act or acts as may be necessary for the attainment of its purposes and objectives. (Emphasis supplied). In People vs. Dionisio, 11 cited by the petitioners themselves, we remarked: "What evils should be corrected as pernicious to the body politic, and how correction should be done, is a matter primarily addressed to the discretion of the legislative department, not of the courts . . . ." In Valmonte vs. PCSO, 12 we also said: The Court, as held in several cases, does not pass upon questions of wisdom, justice or expediency of legislation and executive acts. It is not the province of the courts to supervise legislation or executive orders as to keep them within the bounds of propriety, moral values and common sense. That is primarily and even exclusively a concern of the political departments of the government; otherwise, there will be a violation of the principle of separation of powers. The constraints on judicial power are clear. I feel, the Court must thus beg off, albeit not without reluctance, from giving due course to the instant petition. Accordingly, I vote for the dismissal of the petition. KAPUNAN, J., dissenting: I regret that I am unable to join my colleagues in the majority in spite of my own personal distaste for gambling and other gaming operations. Such considerations aside, I feel there are compelling reasons why the instant petition should be dismissed. I shall forthwith state the reasons why. Petitioners anchor their principal objections against the contract entered into between the Philippine Charity Sweepstakes Office (PCSO) and the PGMC on the ground that the contract entered into by the PCSO with the PGMC violates the PCSO Charter (R.A. No.

1169 as amended by B.P. Blg 427, specifically section 1 thereof which bars the said body from holding conducting lotteries "in collaboration, association or joint venture with any person association, company or entity."). However, a perusal of the petition reveals that the compelling reasons behind it, while based on apparently legal questions involving the contract between the PCSO and the PGMC, are prompted by the petitioners' moral objections against the whole idea of gambling operations operated by the government through the PCSO. The whole point of the petition, in essence, is a fight between good and evil, between the morality or amorality of lottery operations conducted on a wide scale involving millions of individuals and affecting millions of lives. Their media of opposition are the above stated defects in the said contract which they assail to be fatally defective. They come to this Court, as taxpayers and civic spirted citizens, asserting a right of standing on a transcendental issue which they assert to be of paramount public interest. Moral or legal questions aside, I believe that there are unfortunately certain standards 1 that have to be followed in the exercise of this Court's awesome power of review before this Court could even begin to assay the validity of the contract between the PCSO and the PGMC. This, in spite of the apparent expansion of judicial power granted by Section 1 of Article VIII of the 1987 Constitution. It is fundamental that such standards be complied with before this Court could even begin to explore the substantive issues raised by any controversy brought before it, for no issue brought before this court could possibly be so fundamental and paramount as to warrant a relaxation of the requisite rules for judicial review developed by settled jurisprudence inorder to avoid entangling this court in controversies which properly belong to the legislative or executive branches of our government. The potential harm to our system of government, premised on the concept of separation of powers, by the Court eager to exercise its powers and prerogatives at every turn, cannot be gainsaid. The Constitution does not mandate this Court to wield the power of judicial review with excessive vigor and alacrity in every area or at every turn, except in appropriate cases and controversies which meet established requirements for constitutional adjudication. Article VIII Sec. 1 of the Constitution notwithstanding, there are questions which I believe are still beyond the pale of judicial

power. Moreover, it is my considered opinion that the instant petition does not meet the requirements set by this court for a valid exercise of judicial review. Our Constitution expressly defines judicial power as including "the duty to settle actual cases and controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to a lack or excess of jurisdiction on the part of any branch or instrumentality of the government." 2 This constitutional requirement for an actual case and controversy limits this Court's power of review to precisely those suits between adversary litigants with real interests at stake 2 thus preventing it from making all sorts of hypothetical pronouncements on abstract, contingent and amorphous issues. The Court will therefore not pass upon the validity of an act of government or a statute passed by a legislative body without a requisite showing of injury. 3 A personal stake is essential, which absence renders our pronouncements gratuitous and certainly violative of the constitutional requirement for actual cases and controversies. The requirement for standing based on personal injury may of course be bypassed, as the petitioners in this case attempt to do, by considering the case as a "taxpayer suit" which would thereby clothe them with the personality they would lack under ordinary circumstances. However, the act assailed by the petitioners on the whole involves the generation rather than disbursement of public funds. In a line of cases starting from Pascual v. Secretary of Public Works 4 "taxpayer suits" have been understood to refer only to those cases where the act or statute assailed involves the illegal or unconstitutional disbursement of public funds derived from taxation. The main premise behind the "taxpayer suit" is that the pecuniary interest of the taxpayer is involved whenever there is an illegal or wasteful use of public funds which grants them the right to question the appropriation or disbursement on the basis of their contribution to government funds. 5 Since it has not been alleged that an illegal appropriation or disbursement of a fund derived from taxation would be made in the instant case, I fail to see how the petitioners in this case would be able to satisfy the locus standi requirement on the basis of a "taxpayer's suit". This alone should inhibit this Court from proceeding with the case at bench. The interest alleged and the

potential injury asserted are far too general and hypothetical for us to rush into a judicial determination of what to me appears to be judgment better left to executive branch of our government. This brings me to one more important point: The idea that a norm of constitutional adjudication could be lightly brushed aside on the mere supposition that an issue before the Court is of paramount public concern does great harm to a democratic system which espouses a delicate balance between three separate but co-equal branches of government. It is equally of paramount public concern, certainly paramount to the survival of our democracy, that acts of the other branches of government are accorded due respect by this Court. Such acts, done within their sphere of competence, have been and should always be accorded with a presumption of regularity. When such acts are assailed as illegal or unconstitutional, the burden falls upon those who assail these acts to prove that they satisfy the essential norms of constitutional adjudication, because when we finally proceed to declare an act of the executive or legislative branch of our government unconstitutional or illegal, what we actually accomplish is the thwarting of the will of the elected representatives of the people in the executive or legislative branches government.6 Notwithstanding Article VIII, Section 1 of the Constitution, since the exercise of the power of judicial review by this Court is inherently antidemocratic, this Court should exercise a becoming modesty in acting as a revisor of an act of the executive or legislative branch. The tendency of a frequent and easy resort to the function of judicial review, particularly in areas of economic policy has become lamentably too common as to dwarf the political capacity of the people expressed through their representatives in the policy making branches of government and to deaden their sense of moral responsibility. 7 This court has been accused, of late, of an officious tendency to delve into areas better left to the political branches of government. 8 This tendency, if exercised by a court running riot over the other coequal branches of government, poses a greater danger to our democratic system than the perceived danger real or imagined of an executive branch espousing economic or social policies of doubtful moral worth. Moreover economic policy decisions in the current milieu- including the act challenged in the instant case-involve

complex factors requiring flexibility and a wide range of discretion on the part of our economic managers which this Court should respect because our power of review, under the constitution, is a power to check, not to supplant those acts or decisions of the elected representatives of the people. Finally, the instant petition was brought to this Court on the assumption that the issue at bench raises primarily constitutional issues. As it has ultimately turned out, the core foundation of the petitioners' objections to the LOTTO operations was based on the validity of the contract between the PCSO and the PGMC in the light of Section 1 of R.A. 1169 as amended by B.P. Blg. 427. It might have been much more appropriate for the issue to have taken its normal course in the courts below. I vote to deny the petition. # Footnotes 1 PGMC's Comment, 3-4; Rollo, 181-182. 2 Annex "A," Id.; Id., 207-220. 3 Rollo, 210-211. 4 Rollo, 213. 5 Id., 215. 6 Id., 220. 7 PGMC's Comment, 7; Rollo, 184. 8 Annex "P" of Petition. 9 Annexes "L" and "N" of Petition. 10 Petition, 9; Rollo, 10. The announcement also stated that G-Tech Philippines, Inc. and the Tanjong Public Limited Company had likewise been authorized to operate separate lotto systems. 11 Id.; Id.

12 Annex "C" of Petition. 13 Petition, 10; Rollo, 11. The meeting was called to deliberate on the proposed nationwide on-line lottery program. 14 Id.; Id. 15 Id.; Id. 16 Annex "J" of Petition. 17 Annex "H" of Petition. 18 Rollo, 13-14. 19 Rollo, 16-19. 20 Id., 27-28; 30-32. 21 Id., 27. 22 Rollo, 35. 23 Id., 180-181. 24 Citing Teresa Electric & Power Co., Inc. vs. Public Service Commission, 21 SCRA 198 [1967]. 25 175 SCRA 262 [1989]. 26 G.R. No. 78716, 22 September 1987. 27 Philippine Christian Lawyers Fellowship, Inc., Gamaliel G. Bongco, Oscar Karaan, and Jedideoh Sincero (Rollo, 147); Catholic Lawyer's Guild of the Philippines, Inc., Enrique Syquia, and Pacifico Ma. Castro (Id., 154). 28 Rollo, 249 et seq. 29 G.R. No. L-2044 (Araneta vs. Dinglasan); G.R. No. L-2756 (Araneta vs. Angeles); G.R. No. L-3054 (Rodriguez vs. Tesorero de Filipinas); G.R No. L-3055 (Guerrero vs. Commissioner of Customs);

and G.R. No. L-3056 (Barredo vs. Commission on Elections), 84 Phil. 368 [1949]. 30 Tan vs. Macapagal, 43 SCRA 677, 680 [1972]. 31 Sanidad vs. Commission on Elections, 73 SCRA 333 [1976]. 32 112 SCRA 294, 314-315 [1982]. 33 163 SCRA 371, 378 [1988]. 34 197 SCRA 52, 60 [1991]. 35 175 SCRA 343, 364-365 [1989] (emphasis supplied). 36 180 SCRA 496, 502 [1988]. 37 345 US 153, L ed 918, 735 Ct 609. 38 Philippine Constitution Association, Inc. vs. Gimenez, 15 SCRA 479 [1965]. 39 Civil Liberties Union vs. Executive Secretary, 194 SCRA 317 [1991]. 40 Guingona vs. Carague, 196 SCRA 221 [1991]. 41 Osmea vs. Commission on Elections, 199 SCRA 750 [1991]. 42 Basco vs. Philippine Gaming and Amusement Corp., 197 SCRA 52 [1991]. 43 Carpio vs. Executive Secretary, 206 SCRA 290 [1992]. 44 Iloilo Palay and Corn Planters Association, Inc. vs. Feliciano, 13 SCRA 377 [1965]. 45 Sanidad vs. Commission on Elections, supra. 46 Laurel vs. Garcia, 187 SCRA 797 [1990]. 47 Garcia vs. Board of Investments, 177 SCRA 374 [1989]; Garcia

vs. Board of Investments, 191 SCRA 288 [1990]. 48 Maceda vs. Macaraig, 197 SCRA 771 [1991]. 49 Maceda vs. Energy Regulatory Board, 199 SCRA 454 [1991]. 50 Garcia vs. Executive Secretary, 211 SCRA 219 [1992]. 51 De Guia vs. Commission on Elections, 208 SCRA 420 [1992]. 52 Pasay Law and Conscience Union, Inc. vs. Cuneta, 101 SCRA 662 [1980]. 53 62 SCRA 275 [1975]. 54 Supra. 55 Record of the Batasan, vol. Two, 993. 56 Id., 1006-1007. 57 Record of the Batasan, vol. Two, 1007 (emphasis supplied). 58 Id. 59 36 AM. JUR. 2d Franchises 26 (1968). 60 36 AM. JUR. 2d Franchises 63 (1968). 61 38 AM. JUR. 2d Gambling S 18 (1968). 62 Black's Law Dictionary, Sixth Ed., 88. 63 Id., 261. 64 Id., 121. 65 Id., 839. 66 PGMC's Comment; Rollo, 181-182. 67 It declares therein that it "has the legal authority under R.A. 1169,

as amended, to hold and conduct sweepstakes races, lotteries, and other similar activities." 68 Attached to the Contract of Lease as Annex "A" is the Master Games Plan prepared by the PGMC and approved by the PCSO. FELICIANO, J. concurring: 1 The requirement of locus standi forms part of the "application of ordinary law technique to the Constitution" which historically, in the United States, promoted and reinforced the "legalization" or acceptance of the power of judicial review; S. Snowiss, Judicial Review and the Law of the Constitution, p. 197 (1990). 2 A stimulating effort is offered by Prof. Laurence H. Tribe, Constitutional Choices (1985), Chap. 8, where he examined certain trends in, and circumstances relating to, the caselaw of the Supreme Court of the United States which "make a satisfactory theory of standing specially elusive" (p. 100). 3 A.M. Bickel, The Least Dangerous Branch: The Supreme Court at the Bar of Politics 169 (1962); brackets supplied. PADILLA, J. separate concurring: 1 KILOSBAYAN, INCORPORATED, a non-stock corporation composed of civic-spirited citizens, pastors, priests, nuns and lay leaders who are committed to the cause of truth, justice and national renewal as well as members of the Board of Trustees of KILOSBAYAN as taxpayers and concerned citizens and senators Freddie Webb, Wigberto Taada and Representative Joker P. Arroyo as taxpayers, concerned citizens and legislators. PUNO, J. dissenting: 1 Petition, pp. 5-6. 2 Ibid, p. 6. 3 Ibid, p. 7.

4 Ibid. 5 Philippine Political Law, 1989 ed., p. 18 citing Dumlao v. COMELEC, 95 SCRA 392. 6 Ibid., citations omitted. 7 G.R. No. 101083. 8 G.R. No. 86344, 180 SCRA 496 [1989]. 9 Dorsen, Bender, Neuborne, Political and Civil Rights in the United, States, Vol. I, 4th ed., p. 1200. 10 418 U.S. 166, 194 S. Ct. 2940, 41 L. Ed. 2d 678 [1974]. 11 Manila Bulletin, April 21, 1994, pp. 1 and 8. 12 95 SCRA 392, 403. 13 US v. Richardson, op. cit. 14 G.R. No. 79084, September 22, 1987. 15 Compare Coleman v. Miller, 307 US 433 [1939]; Mitchell v. Laird, 488 F2d 611 CD.C. Cir. 1973; Kennedy v. Sampson, 511 F2d 430 CD.C. Cir. 1974. 16 G.R. No. 104712, May 6, 1992, 208 SCRA 420. 17 392 U.S. 83, 88 S. Ct. 1942, 20 L ed. 2d. 947 [1968]. VITUG, J. separate opinion: 1 22 Phil. 456, 559. 2 See also Lopez vs. Roxas, 17 SCRA 761. 3 Warth vs. Seldin, 422 U.S. 490, 498-499, 45 L.Ed. 2d 343, 95 S. Ct. 2197 (1975); Guzman vs. Marrero, 180 U.S. 81, 45 L.Ed. 436, 21 S.Ct. 293 (1901); McMicken vs. United States, 97 U.S. 204, 24 L.Ed. 947 (1978); Silver Star Citizens' Committee vs. Orlando Fla. 194 So.

2d 681 (1967); In Re Kenison's Guardianship, 72 S.D. 180, 31 N.W. 2d 326 (1948). 4 See Pascual v. Secretary of Public Works, 110 Phil. 331; Maceda v. Macaraig, 197 SCRA 771; Lozada v. COMELEC, 120 SCRA 337; Dumlao vs. COMELEC, 95 SCRA 392; Gonzales v. Marcos, 65 SCRA 624. 5 176 SCRA 240, 251. 6 The provision of Arts. 195-199 of the Revised Penal Code (Forms of Gambling and Betting), Republic Act No. 3063 (Horse Racing Bookies), Presidential Decree No. 483 (Penalizing Betting, Gamefixing or Pointshaving and Machinations in Sports Contests); No. 449, as amended (Cockfighting Law of 1974); No. 510 (Slot Machines) in relation to Opinion Nos. 33 and 97 of the Ministry of Justice; No. 1306 (Jai-Alai Bookies) have been repealed by Presidential Decree No. 1602, otherwise known as the New Gambling Law (Prescribing Stiffer Penalties on Illegal Gambling). Subsequently, Letter of Instruction No. 816 was issued which excluded certain prohibited games under Presidential Decree No. 1602. 7 U.S. v. Filart, 30 Phil. 80, 83 /1915/; U.S. v. Baguio, 39 Phil. 962, 966. 8 Ly Hong v. Republic, 109 Phil. 635. 9 People v. De Gorostiza, et al., 77 Phil. 88. 10 People v. Dionisio, 22 SCRA 129. 11 22 SCRA 1299, 1302. 12 G.R. No. 78716 and G.R. No. 79084, En Banc Resolution, 22 September 1987. KAPUNAN, J. dissenting: 1 People v. Vera, 65 Phil. 56 (1937) 2 JACKSON, The Supreme Court in the American System of

Government in McKay, An American Constitutional Law Reader 30 (1958). 3 Ashwander v. Tennessee Valley Authority, 297 US 288, at 346-348 (1936). 4 110 Phil. 331 (1960). See also Lozada v. COMELEC 120 SCRA 337 (1983); Dumlao v. COMELEC, 95 SCRA 392 (1980); Maceda v. Macaraig, 197 SCRA 771, (1991). 5 Appeal of Sears, Roebuck and Co., 123 Ind., App.; 109 NE 2d., 620 (1952). 6 See A. BICKEL, THE LEAST DANGEROUS BRANCH: THE SUPREME COURT AT THE BAR OF POLITICS 16-17 (1962). 7 Id., citing J.B.Thayer, JOHN MARSHALL, 106-107 (1901). 8 See Romulo, The Supreme Court and Economic Policy: A Plea for Judicial Abstinence 67 Phil. L.J. 348-353 (1993). See also Fernandez, Judicial Overreaching in Selected Supreme Court Decisions Affecting Economic Policy, 67 Phil. L.J. 332-347 (1993) and Castro & Pison, The Economic Policy Determining Function of the Supreme Court in Times of National Crisis, 67 Phil. L.J. 354-411 (1993).

SANIDAD vs. COMELEC 181 SCRA 529 Facts: On 23 October 1989, RA 6766 (Act providing for an organic act for the Cordillera Autonomous Region) was enacted into law. The plebiscite was scheduled 30 January 1990. The Comelec, by virtue of the power vested by the 1987 Constitution, the Omnibus Election Code (BP 881), RA 6766 and other pertinent election laws, promulgated Resolution 2167, to govern the conduct of the plebiscite on the said Organic Act for the Cordillera Autonomous Region. Pablito V. Sanidad, a newspaper columnist of Overview for the Baguio Midland Courier assailed the constitutionality of Section 19 (Prohibition on columnists, commentators or announcers) of the said resolution, which provides During the plebiscite campaign period, on the day before and on plebiscite day, no mass media columnist, commentator, announcer or personality shall use his column or radio or television time to campaign for or against the plebiscite issues. Issue: Whether columnists are prohibited from expressing their opinions, or should be under Comelec regulation, during plebiscite periods. Held: Article IX-C of the 1987 Constitution that what was granted to the Comelec was the power to supervise and regulate the use and enjoyment of franchises, permits or other grants issued for the operation of transportation or other public utilities, media of communication or information to the end that equal opportunity, time and space, and the right to reply, including reasonable, equal rates therefor, for public information campaigns and forums among candidates are ensured. Neither Article IX-C of the Constitution nor Section 11-b, 2nd paragraph of RA 6646 (a columnist, commentator, announcer or personality, who is a candidate for any elective office is required to take a leave of absence from his work during the campaign period) can be construed to mean that the Comelec has also been granted the right to supervise and regulate the exercise by media practitioners themselves of their right to expression during plebiscite periods. Media practitioners exercising their freedom of expression during plebiscite periods are neither the franchise holders nor the candidates. In fact, there are no candidates involved in a plebiscite. Therefore, Section 19 of Comelec Resolution 2167 has no statutory basis.

Republic of the Philippines SUPREME COURT Baguio EN BANC G.R. No. 164987 April 24, 2012

LAWYERS AGAINST MONOPOLY AND POVERTY (LAMP), represented by its Chairman and counsel, CEFERINO PADUA, Members, ALBERTO ABELEDA, JR., ELEAZAR ANGELES, GREGELY FULTON ACOSTA, VICTOR AVECILLA, GALILEO BRION, ANATALIA BUENAVENTURA, EFREN CARAG, PEDRO CASTILLO, NAPOLEON CORONADO, ROMEO ECHAUZ, ALFREDO DE GUZMAN, ROGELIO KARAGDAG, JR., MARIA LUZ ARZAGA-MENDOZA, LEO LUIS MENDOZA, ANTONIO P. PAREDES, AQUILINO PIMENTEL III, MARIO REYES, EMMANUEL SANTOS, TERESITA SANTOS, RUDEGELIO TACORDA, SECRETARY GEN. ROLANDO ARZAGA, Board of Consultants, JUSTICE ABRAHAM SARMIENTO, SEN. AQUILINO PIMENTEL, JR., and BARTOLOME FERNANDEZ, JR., Petitioners, vs. THE SECRETARY OF BUDGET AND MANAGEMENT, THE TREASURER OF THE PHILIPPINES, THE COMMISSION ON AUDIT, and THE PRESIDENT OF THE SENATE and the SPEAKER OF THE HOUSE OF REPRESENTATIVES in representation of the Members of the Congress, Respondents. DECISION MENDOZA, J.: For consideration of the Court is an original action for certiorari assailing the constitutionality and legality of the implementation of the Priority Development Assistance Fund (PDAF) as provided for in Republic Act (R.A.) 9206 or the General Appropriations Act for 2004 (GAA of 2004). Petitioner Lawyers Against Monopoly and Poverty (LAMP), a group of lawyers who have banded together with a mission of dismantling all forms of political, economic or social monopoly in the country,1 also sought the issuance of a writ of preliminary injunction or temporary restraining order to enjoin respondent Secretary of the Department of Budget and Management (DBM) from making, and, thereafter, releasing budgetary allocations to individual members of Congress as "pork barrel" funds out of PDAF. LAMP

likewise aimed to stop the National Treasurer and the Commission on Audit (COA) from enforcing the questioned provision. On September 14, 2004, the Court required respondents, including the President of the Senate and the Speaker of the House of Representatives, to comment on the petition. On April 7, 2005, petitioner filed a Reply thereto.2 On April 26, 2005, both parties were required to submit their respective memoranda. The GAA of 2004 contains the following provision subject of this petition: PRIORITY DEVELOPMENT ASSISTANCE FUND For fund requirements of priority development programs and projects, as indicated hereunder P 8,327,000,000.00 Xxxxx Special Provision 1. Use and Release of the Fund. The amount herein appropriated shall be used to fund priority programs and projects or to fund the required counterpart for foreign-assisted programs and projects: PROVIDED, That such amount shall be released directly to the implementing agency or Local Government Unit concerned: PROVIDED, FURTHER, That the allocations authorized herein may be realigned to any expense class, if deemed necessary: PROVIDED FURTHERMORE, That a maximum of ten percent (10%) of the authorized allocations by district may be used for procurement of rice and other basic commodities which shall be purchased from the National Food Authority. Petitioners Position According to LAMP, the above provision is silent and, therefore, prohibits an automatic or direct allocation of lump sums to individual senators and congressmen for the funding of projects. It does not empower individual Members of Congress to propose, select and identify programs and projects to be funded out of PDAF. "In previous GAAs, said allocation and identification of projects were the main

features of the pork barrel system technically known as Countrywide Development Fund (CDF). Nothing of the sort is now seen in the present law (R.A. No. 9206 of CY 2004).3 In its memorandum, LAMP insists that "[t]he silence in the law of direct or even indirect participation by members of Congress betrays a deliberate intent on the part of the Executive and the Congress to scrap and do away with the pork barrel system."4 In other words, "[t]he omission of the PDAF provision to specify sums as allocations to individual Members of Congress is a casus omissus signifying an omission intentionally made by Congress that this Court is forbidden to supply."5 Hence, LAMP is of the conclusion that "the pork barrel has become legally defunct under the present state of GAA 2004."6 LAMP further decries the supposed flaws in the implementation of the provision, namely: 1) the DBM illegally made and directly released budgetary allocations out of PDAF in favor of individual Members of Congress; and 2) the latter do not possess the power to propose, select and identify which projects are to be actually funded by PDAF. For LAMP, this situation runs afoul against the principle of separation of powers because in receiving and, thereafter, spending funds for their chosen projects, the Members of Congress in effect intrude into an executive function. In other words, they cannot directly spend the funds, the appropriation for which was made by them. In their individual capacities, the Members of Congress cannot "virtually tell or dictate upon the Executive Department how to spend taxpayers money.7 Further, the authority to propose and select projects does not pertain to legislation. "It is, in fact, a non-legislative function devoid of constitutional sanction,"8 and, therefore, impermissible and must be considered nothing less than malfeasance. The proposal and identification of the projects do not involve the making of laws or the repeal and amendment thereof, which is the only function given to the Congress by the Constitution. Verily, the power of appropriation granted to Congress as a collegial body, "does not include the power of the Members thereof to individually propose, select and identify which projects are to be actually implemented and funded - a function which essentially and exclusively pertains to the Executive Department."9 By allowing the Members of Congress to receive direct allotment from the fund, to propose and identify projects to be funded and to perform the actual spending of the fund, the implementation of

the PDAF provision becomes legally infirm and constitutionally repugnant. Respondents Position For their part, the respondents10 contend that the petition miserably lacks legal and factual grounds. Although they admit that PDAF traced its roots to CDF,11 they argue that the former should not be equated with "pork barrel," which has gained a derogatory meaning referring "to government projects affording political opportunism."12 In the petition, no proof of this was offered. It cannot be gainsaid then that the petition cannot stand on inconclusive media reports, assumptions and conjectures alone. Without probative value, media reports cited by the petitioner deserve scant consideration especially the accusation that corrupt legislators have allegedly proposed cuts or slashes from their pork barrel. Hence, the Court should decline the petitioners plea to take judicial notice of the supposed iniquity of PDAF because there is no concrete proof that PDAF, in the guise of "pork barrel," is a source of "dirty money" for unscrupulous lawmakers and other officials who tend to misuse their allocations. These "facts" have no attributes of sufficient notoriety or general recognition accepted by the public without qualification, to be subjected to judicial notice. This applies, a fortiori, to the claim that Members of Congress are beneficiaries of commissions (kickbacks) taken out of the PDAF allocations and releases and preferred by favored contractors representing from 20% to 50% of the approved budget for a particular project. 13 Suffice it to say, the perceptions of LAMP on the implementation of PDAF must not be based on mere speculations circulated in the news media preaching the evils of pork barrel. Failing to present even an iota of proof that the DBM Secretary has been releasing lump sums from PDAF directly or indirectly to individual Members of Congress, the petition falls short of its cause. Likewise admitting that CDF and PDAF are "appropriations for substantially similar, if not the same, beneficial purposes," 14 the respondents invoke Philconsa v. Enriquez,15 where CDF was described as an imaginative and innovative process or mechanism of implementing priority programs/projects specified in the law. In Philconsa, the Court upheld the authority of individual Members of Congress to propose and identify priority projects because this was

merely recommendatory in nature. In said case, it was also recognized that individual members of Congress far more than the President and their congressional colleagues were likely to be knowledgeable about the needs of their respective constituents and the priority to be given each project. The Issues The respondents urge the Court to dismiss the petition for its failure to establish factual and legal basis to support its claims, thereby lacking an essential requisite of judicial reviewan actual case or controversy. The Courts Ruling To the Court, the case boils down to these issues: 1) whether or not the mandatory requisites for the exercise of judicial review are met in this case; and 2) whether or not the implementation of PDAF by the Members of Congress is unconstitutional and illegal. Like almost all powers conferred by the Constitution, the power of judicial review is subject to limitations, to wit: (1) there must be an actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must have the standing to question the validity of the subject act or issuance; otherwise stated, he must have a personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement; (3) the question of constitutionality must be raised at the earliest opportunity; and (4) the issue of constitutionality must be the very lis mota of the case.16 An aspect of the "case-or-controversy" requirement is the requisite of "ripeness." In the United States, courts are centrally concerned with whether a case involves uncertain contingent future events that may not occur as anticipated, or indeed may not occur at all. Another concern is the evaluation of the twofold aspect of ripeness: first, the fitness of the issues for judicial decision; and second, the hardship to the parties entailed by withholding court consideration. In our jurisdiction, the issue of ripeness is generally treated in terms of actual injury to the plaintiff. Hence, a question is ripe for adjudication when the act being challenged has had a direct adverse effect on the

individual challenging it.17 In this case, the petitioner contested the implementation of an alleged unconstitutional statute, as citizens and taxpayers. According to LAMP, the practice of direct allocation and release of funds to the Members of Congress and the authority given to them to propose and select projects is the core of the laws flawed execution resulting in a serious constitutional transgression involving the expenditure of public funds. Undeniably, as taxpayers, LAMP would somehow be adversely affected by this. A finding of unconstitutionality would necessarily be tantamount to a misapplication of public funds which, in turn, cause injury or hardship to taxpayers. This affords "ripeness" to the present controversy. Further, the allegations in the petition do not aim to obtain sheer legal opinion in the nature of advice concerning legislative or executive action. The possibility of constitutional violations in the implementation of PDAF surely involves the interplay of legal rights susceptible of judicial resolution. For LAMP, this is the right to recover public funds possibly misapplied by no less than the Members of Congress. Hence, without prejudice to other recourse against erring public officials, allegations of illegal expenditure of public funds reflect a concrete injury that may have been committed by other branches of government before the court intervenes. The possibility that this injury was indeed committed cannot be discounted. The petition complains of illegal disbursement of public funds derived from taxation and this is sufficient reason to say that there indeed exists a definite, concrete, real or substantial controversy before the Court. Anent locus standi, "the rule is that the person who impugns the validity of a statute must have a personal and substantial interest in the case such that he has sustained, or will sustained, direct injury as a result of its enforcement.18 The gist of the question of standing is whether a party alleges "such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions."19 In public suits, the plaintiff, representing the general public, asserts a "public right" in assailing an allegedly illegal official action. The plaintiff may be a person who is affected no differently from any other person, and

could be suing as a "stranger," or as a "citizen" or "taxpayer."20 Thus, taxpayers have been allowed to sue where there is a claim that public funds are illegally disbursed or that public money is being deflected to any improper purpose, or that public funds are wasted through the enforcement of an invalid or unconstitutional law.21 Of greater import than the damage caused by the illegal expenditure of public funds is the mortal wound inflicted upon the fundamental law by the enforcement of an invalid statute.22 Here, the sufficient interest preventing the illegal expenditure of money raised by taxation required in taxpayers suits is established. Thus, in the claim that PDAF funds have been illegally disbursed and wasted through the enforcement of an invalid or unconstitutional law, LAMP should be allowed to sue. The case of Pascual v. Secretary of Public Works23 is authority in support of the petitioner: In the determination of the degree of interest essential to give the requisite standing to attack the constitutionality of a statute, the general rule is that not only persons individually affected, but also taxpayers have sufficient interest in preventing the illegal expenditures of moneys raised by taxation and may therefore question the constitutionality of statutes requiring expenditure of public moneys. [11 Am. Jur. 761, Emphasis supplied.] Lastly, the Court is of the view that the petition poses issues impressed with paramount public interest. The ramification of issues involving the unconstitutional spending of PDAF deserves the consideration of the Court, warranting the assumption of jurisdiction over the petition. Now, on the substantive issue. The powers of government are generally divided into three branches: the Legislative, the Executive and the Judiciary. Each branch is supreme within its own sphere being independent from one another and it is this supremacy which enables the courts to determine whether a law is constitutional or unconstitutional.24 The Judiciary is the final arbiter on the question of whether or not a branch of government or any of its officials has acted without jurisdiction or in excess of jurisdiction or so capriciously as to constitute an abuse of

discretion amounting to excess of jurisdiction. This is not only a judicial power but a duty to pass judgment on matters of this nature.25 With these long-established precepts in mind, the Court now goes to the crucial question: In allowing the direct allocation and release of PDAF funds to the Members of Congress based on their own list of proposed projects, did the implementation of the PDAF provision under the GAA of 2004 violate the Constitution or the laws? The Court rules in the negative. In determining whether or not a statute is unconstitutional, the Court does not lose sight of the presumption of validity accorded to statutory acts of Congress. In Farias v. The Executive Secretary,26 the Court held that: Every statute is presumed valid. The presumption is that the legislature intended to enact a valid, sensible and just law and one which operates no further than may be necessary to effectuate the specific purpose of the law. Every presumption should be indulged in favor of the constitutionality and the burden of proof is on the party alleging that there is a clear and unequivocal breach of the Constitution. To justify the nullification of the law or its implementation, there must be a clear and unequivocal, not a doubtful, breach of the Constitution. In case of doubt in the sufficiency of proof establishing unconstitutionality, the Court must sustain legislation because "to invalidate [a law] based on x x x baseless supposition is an affront to the wisdom not only of the legislature that passed it but also of the executive which approved it."27 This presumption of constitutionality can be overcome only by the clearest showing that there was indeed an infraction of the Constitution, and only when such a conclusion is reached by the required majority may the Court pronounce, in the discharge of the duty it cannot escape, that the challenged act must be struck down.28 The petition is miserably wanting in this regard. LAMP would have the Court declare the unconstitutionality of the PDAFs enforcement based on the absence of express provision in the GAA allocating PDAF funds to the Members of Congress and the latters

encroachment on executive power in proposing and selecting projects to be funded by PDAF. Regrettably, these allegations lack substantiation. No convincing proof was presented showing that, indeed, there were direct releases of funds to the Members of Congress, who actually spend them according to their sole discretion. Not even a documentation of the disbursement of funds by the DBM in favor of the Members of Congress was presented by the petitioner to convince the Court to probe into the truth of their claims. Devoid of any pertinent evidentiary support that illegal misuse of PDAF in the form of kickbacks has become a common exercise of unscrupulous Members of Congress, the Court cannot indulge the petitioners request for rejection of a law which is outwardly legal and capable of lawful enforcement. In a case like this, the Courts hands are tied in deference to the presumption of constitutionality lest the Court commits unpardonable judicial legislation. The Court is not endowed with the power of clairvoyance to divine from scanty allegations in pleadings where justice and truth lie.29 Again, newspaper or electronic reports showing the appalling effects of PDAF cannot be appreciated by the Court, "not because of any issue as to their truth, accuracy, or impartiality, but for the simple reason that facts must be established in accordance with the rules of evidence."30 Hence, absent a clear showing that an offense to the principle of separation of powers was committed, much less tolerated by both the Legislative and Executive, the Court is constrained to hold that a lawful and regular government budgeting and appropriation process ensued during the enactment and all throughout the implementation of the GAA of 2004. The process was explained in this wise, in Guingona v. Carague:31 1. Budget preparation. The first step is essentially tasked upon the Executive Branch and covers the estimation of government revenues, the determination of budgetary priorities and activities within the constraints imposed by available revenues and by borrowing limits, and the translation of desired priorities and activities into expenditure levels. Budget preparation starts with the budget call issued by the Department of Budget and Management. Each agency is required to submit agency budget estimates in line with the requirements

consistent with the general ceilings set by the Development Budget Coordinating Council (DBCC). With regard to debt servicing, the DBCC staff, based on the macroeconomic projections of interest rates (e.g. LIBOR rate) and estimated sources of domestic and foreign financing, estimates debt service levels. Upon issuance of budget call, the Bureau of Treasury computes for the interest and principal payments for the year for all direct national government borrowings and other liabilities assumed by the same. 2. Legislative authorization. At this stage, Congress enters the picture and deliberates or acts on the budget proposals of the President, and Congress in the exercise of its own judgment and wisdom formulates an appropriation act precisely following the process established by the Constitution, which specifies that no money may be paid from the Treasury except in accordance with an appropriation made by law. xxx 3. Budget Execution. Tasked on the Executive, the third phase of the budget process covers the various operational aspects of budgeting. The establishment of obligation authority ceilings, the evaluation of work and financial plans for individual activities, the continuing review of government fiscal position, the regulation of funds releases, the implementation of cash payment schedules, and other related activities comprise this phase of the budget cycle. 4. Budget accountability. The fourth phase refers to the evaluation of actual performance and initially approved work targets, obligations incurred, personnel hired and work accomplished are compared with the targets set at the time the agency budgets were approved. Under the Constitution, the power of appropriation is vested in the Legislature, subject to the requirement that appropriation bills originate exclusively in the House of Representatives with the option of the Senate to propose or concur with amendments.32 While the budgetary process commences from the proposal submitted by the President to Congress, it is the latter which concludes the exercise by crafting an appropriation act it may deem beneficial to the nation,

based on its own judgment, wisdom and purposes. Like any other piece of legislation, the appropriation act may then be susceptible to objection from the branch tasked to implement it, by way of a Presidential veto. Thereafter, budget execution comes under the domain of the Executive branch which deals with the operational aspects of the cycle including the allocation and release of funds earmarked for various projects. Simply put, from the regulation of fund releases, the implementation of payment schedules and up to the actual spending of the funds specified in the law, the Executive takes the wheel. "The DBM lays down the guidelines for the disbursement of the fund. The Members of Congress are then requested by the President to recommend projects and programs which may be funded from the PDAF. The list submitted by the Members of Congress is endorsed by the Speaker of the House of Representatives to the DBM, which reviews and determines whether such list of projects submitted are consistent with the guidelines and the priorities set by the Executive."33 This demonstrates the power given to the President to execute appropriation laws and therefore, to exercise the spending per se of the budget. As applied to this case, the petition is seriously wanting in establishing that individual Members of Congress receive and thereafter spend funds out of PDAF. Although the possibility of this unscrupulous practice cannot be entirely discounted, surmises and conjectures are not sufficient bases for the Court to strike down the practice for being offensive to the Constitution. Moreover, the authority granted the Members of Congress to propose and select projects was already upheld in Philconsa. This remains as valid case law. The Court sees no need to review or reverse the standing pronouncements in the said case. So long as there is no showing of a direct participation of legislators in the actual spending of the budget, the constitutional boundaries between the Executive and the Legislative in the budgetary process remain intact. While the Court is not unaware of the yoke caused by graft and corruption, the evils propagated by a piece of valid legislation cannot be used as a tool to overstep constitutional limits and arbitrarily annul acts of Congress. Again, "all presumptions are indulged in favor of constitutionality; one who attacks a statute, alleging unconstitutionality must prove its invalidity beyond a reasonable

doubt; that a law may work hardship does not render it unconstitutional; that if any reasonable basis may be conceived which supports the statute, it will be upheld, and the challenger must negate all possible bases; that the courts are not concerned with the wisdom, justice, policy, or expediency of a statute; and that a liberal interpretation of the constitution in favor of the constitutionality of legislation should be adopted."34 There can be no question as to the patriotism and good motive of the petitioner in filing this petition. Unfortunately, the petition must fail based on the foregoing reasons. WHEREFORE, the petition is DISMISSED without pronouncement as to costs. SO ORDERED. JOSE CATRAL MENDOZA Associate Justice WE CONCUR: RENATO C. CORONA Chief Justice

ANTONIO T. CARPIO PRESBITERO J. VELA Associate Justice Associate Justic TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRI Associate Justice Associate Justic DIOSDADO M. PERALTA LUCAS P. BERSA Associate Justice Associate Justic MARIANO C. DEL CASTILLO ROBERTO A. AB Associate Justice Associate Justic MARTIN S. VILLARAMA, JR. JOSE PORTUGAL P Associate Justice Associate Justic MARIA LOURDES P. A. SERENO BIENVENIDO L. RE Associate Justice Associate Justic ESTELA M. PERLAS-BERNABE Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I hereby certify that the conclusions in the above Decision had been reached in

consultation before the case was assigned to the writer of the opinion of the Court. RENATO C. CORONA Chief Justice Footnotes
1

Rollo, p. 7. Id. at 113-117. Id. at 9. Id. at 10. Id. at 163. Id. at 152. Id. at 154. Id. Id. at 156.

10

The Office of the Solicitor General entered its appearance and filed a Comment for the Secretary of the Department of Budget and Management, Treasurer of the Philippines and Commission on Audit, while then Speaker of the House of Representatives, Jose De Venecia Jr. filed his separate Comment dated January 6, 2005.
11

Rollo, p. 66. Id. at 62. Id. at 149. Id. at 67. G.R. No. 113888, August 19, 1994, 235 SCRA 506.

12

13

14

15

16

Senate of the Philippines v. Ermita, G.R. No. 169777, April 20, 2006, 488 SCRA 1, 35.
17

Lozano v. Nograles, G.R. Nos. 187883, and 187910, June 16, 2009, 589 SCRA 356, 358, citing Guingona Jr. v. Court of Appeals, 354 Phil. 415, 427-428.
18

People v. Vera, 65 Phil. 56, 89 (1937).

19

Navarro v. Ermita, G.R. No. 180050, April 12, 2011, 648 SCRA 400, 434.
20

David v. Macapagal-Arroyo, G.R. Nos. 171396, 171409, 171485, 171483, 171400, 171489 and 171424, May 3, 2006, 489 SCRA 160.
21

Public Interest Center, Inc. v. Honorable Vicente Q. Roxas, in his capacity as Presiding Judge, RTC of Quezon City, Branch 227, G.R. No. 125509, January 31, 2007, 513 SCRA 457, 470.
22

People v. Vera, 65 Phil. 56, 89 (1937). 110 Phil. 331, 342-343 (1960).

23

24

Separate Opinion, Joker P. Arroyo v. HRET and Augusto l. Syjuco, Jr., 316 Phil. 464 (1995).
25

Tanada v. Angara, 338 Phil. 546, 575 (1997). 463 Phil. 179, 197 (2003).

26

27

Abakada Guro Party List v. Purisima, G.R. No. 166715, August 14, 2008, 562 SCRA 251.
28

Drilon v. Lim, G.R. No. 112497, August 4, 1994, 235 SCRA 135.

29

Dissenting Opinion, The Board of Election Inspectors et al. v. Edmundo S. Piccio Judge of First Instance of Leyte at Tacloban, and Cesario R. Colasito, G.R. No. L-1852, October 14, 1948/ September 30, 1948.
30

Lim v. Hon. Executive Secretary, 430 Phil. 555, 580 (2002).

31

273 Phil. 443, 460, (1991). 1987 Constitution, Article 6 Sections 24 and 29 (1). Rollo, p. 98. Victoriano v. Elizalde Rope Workers' Union, 158 Phil. 60 (1974).

32

33

34

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.

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. 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; 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, 7 Section 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, 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); intervenor-oppositor 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 Regulating Constitution Amendments by People's Initiative, 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 as initiative 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. 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 reregistration 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 DEFENSOR-SANTIAGO'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 REEXAMINATION OF THE ENTIRE DOCUMENT TO DETERMINE HOW AND TO WHAT EXTENT IT SHOULD BE ALTERED." (PP. 412-413, 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 mentions initiative 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 rulemaking 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 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 revision cannot 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 co-authored 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: (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. 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. 27 Earlier, 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 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 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 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 three-fourths vote in order to constitute itself as 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 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 process or the requirement of determining the mechanics of amending the Constitution by people's initiative?
MR. SUAREZ. The matter of 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 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 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 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, 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 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 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 three-fourths; 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 self-executory. 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 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 for initiative 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; 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 local initiative and referendum. 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 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 quasijudicial 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 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. Narvasa, C.J., Regalado, Romero, Bellosillo, Kapunan, Hermosisima, Jr. and Torres, Jr., JJ., concur. Padilla, J., took no part.

Separate Opinions

PUNO, J., concurring and dissenting: I join the ground-breaking ponencia of our esteemed colleague, Mr. Justice Davide insofar as it orders the COMELEC to dismiss the Delfin petition. I regret, however, I cannot share the view that R.A. No. 5735 and COMELEC Resolution No. 2300 are legally defective and cannot implement the people's initiative to amend the Constitution. I likewise submit that the petition with respect to the Pedrosas has no leg to stand on and should be dismissed. With due respect: I First, I submit that R.A. No. 6735 sufficiently implements the right of the people to initiate amendments to the Constitution thru initiative. Our effort to discover the meaning of R.A. No. 6735 should start with the search of the intent of our lawmakers. A knowledge of this intent is critical for the intent of the legislature is the law and the controlling factor in its interpretation. 1 Stated otherwise, intent is the essence of the law, the spirit which gives life to its enactment. 2 Significantly, the majority decision concedes that ". . . R.A. No. 6735 was intended to cover initiative to propose amendments to the Constitution." It ought to be so for this intent is crystal clear from the history of the law which was a consolidation of House Bill No. 21505 3 and Senate Bill No. 17. 4 Senate Bill No. 17 was entitled "An Act Providing for a System of Initiative and Referendum and the Exception Therefrom, Whereby People in Local Government Units Can Directly Propose and Enact Resolutions and Ordinances or Approve or Reject any Ordinance or Resolution Passed by the Local Legislative Body." Beyond doubt, Senate Bill No. 17 did not include people's initiative to propose amendments to the Constitution. In checkered contrast, House Bill No. 21505 5 expressly included people's initiative to amend the Constitution. Congressman (now Senator) Raul Roco emphasized in his sponsorship remarks: 6 xxx xxx xxx SPONSORSHIP REMARKS OF MR. ROCO

At the outset, Mr. Roco provided the following backgrounder on the constitutional basis of the proposed measure. 1. As cited in Vera vs. Avelino (1946), the presidential system which was introduced by the 1935 Constitution saw the application of the principle of separation of powers. 2. While under the parliamentary system of the 1973 Constitution the principle remained applicable, the 1981 amendments to the Constitution of 1973 ensured presidential dominance over the Batasang Pambansa. Constitutional history then saw the shifting and sharing of legislative powers between the Legislature and the Executive departments. Transcending changes in the exercise of legislative power is the declaration in the Philippine Constitution that the Philippines is a republican state where sovereignty resides in the people and all sovereignty emanates from them. 3. Under the 1987 Constitution, the lawmaking power is still preserved in Congress; however, to institutionalize direct action of the people as exemplified in the 1986 Revolution, the Constitution recognizes the power of the people, through the system of initiative and referendum. As cited in Section 1, Article VI of the 1987 Constitution, Congress does not have plenary powers since reserve powers are given to the people expressly. Section 32 of the same Article mandates Congress to pass at the soonest possible time, a bill on referendum and initiative, and to share its legislative powers with the people. Section 2, Article XVII of the 1987 Constitution, on the other hand, vests in the people the power to directly propose amendments to the Constitution through initiative, upon petition of at least 12 percent of the total number of registered voters. Stating that House Bill No. 21505 is the Committee's response to the duty imposed on Congress to implement the exercise by the people of the right to initiative and referendum, Mr. Roco recalled the beginnings of the system of initiative and referendum under Philippine Law. He cited Section 99 of the Local Government Code which vests

in the barangay assembly the power to initiate legislative processes, decide the holding of plebiscite and hear reports of the Sangguniang Barangay, all of which are variations of the power of initiative and referendum. He added that the holding of barangay plebiscites and referendum are likewise provided in Sections 100 and 101 of the same Code. Thereupon, for the sake of brevity, Mr. Roco moved that pertinent quotation on the subject which he will later submit to the Secretary of the House be incorporated as part of his sponsorship speech. He then cited examples of initiative and referendum similar to those contained in the instant Bill among which are the constitutions of states in the United States which recognize the right of registered voters to initiate the enactment of any statute or to project any existing law or parts thereof in a referendum. These states, he said, are Alaska, Alabama, Montana, Massachusets, Dakota, Oklahoma, Oregon, and practically all other states. Mr. Roco explained that in certain American states, the kind of laws to which initiative and referendum apply is also without limitation, except for emergency measures, which are likewise incorporated in House Bill No. 21505. He added that the procedure provided by the Bill from the filing of the petition, the requirements of a certain percentage of supporters to present a proposition, to the submission to electors are substantially similar to the provisions in American laws. Although an infant in Philippine political structure, the system of initiative and referendum, he said, is a tried and tested system in other jurisdictions, and the Bill is patterned after American experience. He further explained that the bill has only 12 sections, and recalled that the Constitutional Commissioners saw the system of the initiative and referendum as an instrument which can be used should the legislature show itself to be indifferent to the needs of the people. This is the reason, he claimed, why now is an opportune time to pass the Bill even as he noted the felt necessity of the times to pass laws which are necessary to safeguard individual rights and liberties. At this juncture Mr. Roco explained the process of initiative and

referendum as advocated in House Bill No. 21505. He stated that: 1. Initiative means that the people, on their own political judgment, submit a Bill for the consideration of the general electorate. 2. The instant Bill provides three kinds of initiative, namely; the initiative to amend the Constitution once every five years; the initiative to amend statutes approved by Congress; and the initiative to amend local ordinances. 3. The instant Bill gives a definite procedure and allows the Commission on Elections (COMELEC) to define rules and regulations on the power of initiative. 4. Referendum means that the legislators seek the consent of the people on measures that they have approved. 5. Under Section 4 of the Bill the people can initiate a referendum which is a mode of plebiscite by presenting a petition therefor, but under certain limitations, such as the signing of said petition by at least 10 percent of the total of registered voters at which every legislative district is represented by at least three percent of the registered voters thereof. Within 30 days after receipt of the petition, the COMELEC shall determine the sufficiency of the petition, publish the same, and set the date of the referendum within 45 to 90-day period. 6. When the matter under referendum or initiative is approved by the required number of votes, it shall become effective 15 days following the completion of its publication in the Official Gazette. In concluding his sponsorship remarks, Mr. Roco stressed that the Members cannot ignore the people's call for initiative and referendum and urged the Body to approve House Bill No. 21505. At this juncture, Mr. Roco also requested that the prepared text of his speech together with the footnotes be reproduced as part of the Congressional Records. The same sentiment as to the bill's intent to implement people's initiative to amend the Constitution was stressed by then

Congressman (now Secretary of Agriculture) Salvador Escudero III in his sponsorship remarks, viz: 7 xxx xxx xxx SPONSORSHIP REMARKS OF MR. ESCUDERO Mr. Escudero first pointed out that the people have been clamoring for a truly popular democracy ever since, especially in the so-called parliament of the streets. A substantial segment of the population feels, he said, that the form of democracy is there, but not the reality or substance of it because of the increasingly elitist approach of their representatives to the country's problem. Whereupon, Mr. Escudero pointed out that the Constitution has provided a means whereby the people can exercise the reserved power of initiative to propose amendments to the Constitution, and requested that Sections 1 and 32, Article VI; Section 3, Article X; and Section 2, Article XVII of the Constitution be made part of his sponsorship remarks. Mr. Escudero also stressed that an implementing law is needed for the aforecited Constitutional provisions. While the enactment of the Bill will give way to strong competition among cause-oriented and sectoral groups, he continued, it will hasten the politization of the citizenry, aid the government in forming an enlightened public opinion, and produce more responsive legislation. The passage of the Bill will also give street parliamentarians the opportunity to articulate their ideas in a democratic forum, he added. Mr. Escudero stated that he and Mr. Roco hoped for the early approval of the Bill so that it can be initially used for the Agrarian Reform Law. He said that the passage of House Bill No. 21505 will show that the Members can set aside their personal and political consideration for the greater good of the people. The disagreeing provisions in Senate Bill No. 17 and House Bill No. 21505 were threshed out in a Bicameral Conference Committee. 8 In the meeting of the Committee on June 6, 1989, 9 the members agreed that the two (2) bills should be consolidated and that the consolidated version should include people's initiative to amend the Constitution as

contemplated by House Bill No. 21505. The transcript of the meeting states: xxx xxx xxx CHAIRMAN GONZALES. But at any rate, as I have said, because this is new in our political system, the Senate decided on a more cautious approach and limiting it only to the local government units because even with that stage where . . . at least this has been quite popular, ano? It has been attempted on a national basis. Alright. There has not been a single attempt. Now, so, kami limitado doon. And, second, we consider also that it is only fair that the local legislative body should be given a chance to adopt the legislation bill proposed, right? Iyong sinasabing indirect system of initiative. If after all, the local legislative assembly or body is willing to adopt it in full or in toto, there ought to be any reason for initiative, ano for initiative. And, number 3, we feel that there should be some limitation on the frequency with which it should be applied. Number 4, na the people, thru initiative, cannot enact any ordinance that is beyond the scope of authority of the local legislative body, otherwise, my God, magaassume sila ng power that is broader and greater than the grant of legislative power to the Sanggunians. And Number 5, because of that, then a proposition which has been the result of a successful initiative can only carry the force and effect of an ordinance and therefore that should not deprive the court of its jurisdiction to declare it null and void for want of authority. Ha, di ba? I mean it is beyond powers of local government units to enact. Iyon ang main essence namin, so we concentrated on that. And that is why . . . so ang sa inyo naman includes iyon sa Constitution, amendment to the Constitution eh . . . national laws. Sa amin, if you insist on that, alright, although we feel na it will in effect become a dead statute. Alright, and we can agree, we can agree. So ang mangyayari dito, and magiging basic nito, let us not discuss anymore kung alin and magiging basic bill, ano, whether it is the Senate Bill or whether it is the House bill. Logically it should be ours sapagkat una iyong sa amin eh. It is one of the first bills approved by the Senate kaya ang number niyan, makikita mo, 17, eh. Huwag na nating pagusapan. Now, if you insist, really iyong features ng national at saka constitutional, okay. ____ gagawin na natin na consolidation of both bills.

HON. ROCO. Yes, we shall consolidate.

CHAIRMAN GONZALES. Consolidation of the Senate and House Bill No. so and so. 10

When the consolidated bill was presented to the House for approval, then Congressman Roco upon interpellation by Congressman Rodolfo Albano, again confirmed that it covered people's initiative to amend the Constitution. The record of the House Representative states: 11 xxx xxx xxx 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. 21505 which refers to the system providing for the initiative and 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 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. The Gentlemen 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 provide 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. 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 in the 1987 Constitution, it is every five years. MR. ALBANO. For every five years, Mr. Speaker? MR. ROCO. Within five years, we cannot have multiple initiatives and referenda. MR. ALBANO. Therefore, basically, there was no substantial difference between the two versions? MR. ROCO. The gaps in our bill were filled by the Senate which, as I said earlier, ironically was about local, provincial and municipal legislation. MR. ALBANO. And the two bills were consolidated?

MR. ROCO. Yes, Mr. Speaker. MR. ALBANO. Thank you, Mr. Speaker. APPROVAL OF C.C.R. ON S.B. NO. 17 AND H.B. NO. 21505 (The Initiative and Referendum Act) THE SPEAKER PRO TEMPORE. There was a motion to approve this consolidated bill on Senate Bill No. 17 and House Bill No. 21505. Is there any objection? (Silence. The Chair hears none; the motion is approved. Since it is crystalline that the intent of R.A. No. 6735 is to implement the people's initiative to amend the Constitution, it is our bounden duty to interpret the law as it was intended by the legislature. We have ruled that once intent is ascertained, it must be enforced even if it may not be consistent with the strict letter of the law and this ruling is as old as the mountain. We have also held that where a law is susceptible of more than one interpretation, that interpretation which will most tend to effectuate the manifest intent of the legislature will be adopted. 12 The text of R.A. No. 6735 should therefore be reasonably construed to effectuate its intent to implement the people's initiative to amend the Constitution. To be sure, we need not torture the text of said law to reach the conclusion that it implements people's initiative to amend the Constitution. R.A. No. 6735 is replete with references to this prerogative of the people. First, the policy statement declares: Sec. 2. Statement of 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) Second, the law defines "initiative" as "the power of the people to propose amendments to the constitution or to propose and enact

legislations through an election called for the purpose," and "plebiscite" as "the electoral process by which an initiative on the Constitution is approved or rejected by the people. Third, the law provides the requirements for a petition for initiative to amend the Constitution. Section 5(b) states that "(a) petition for an initiative on the 1987 Constitution must have at least twelve per centum (12%) of the total number of registered voters as signatories, of which every legislative district must be represented by at least three per centum (3%) of the registered voters therein." It also states that "(i)nitiative on the Constitution may be exercised only after five (5) years from the ratification of the 1987 Constitution and only once every five (5) years thereafter. Finally, R.A. No. 6735 fixes the effectivity date of the amendment. Section 9(b) states that "(t)he proposition in an initiative on the Constitution approved by a majority of the votes cast in the plebiscite shall become effective as to the day of the plebiscite. It is unfortunate that the majority decision resorts to a strained interpretation of R.A. No. 6735 to defeat its intent which it itself concedes is to implement people's initiative to propose amendments to the Constitution. Thus, it laments that the word "Constitution" is neither germane nor relevant to the policy thrust of section 2 and that the statute's subtitling is not accurate. These lapses are to be expected for laws are not always written in impeccable English. Rightly, the Constitution does not require our legislators to be wordsmiths with the ability to write bills with poetic commas like Jose Garcia Villa or in lyrical prose like Winston Churchill. But it has always been our good policy not to refuse to effectuate the intent of a law on the ground that it is badly written. As the distinguished Vicente Francisco 13 reminds us: "Many laws contain words which have not been used accurately. But the use of inapt or inaccurate language or words, will not vitiate the statute if the legislative intention can be ascertained. The same is equally true with reference to awkward, slovenly, or ungrammatical expressions, that is, such expressions and words will be construed as carrying the meaning the legislature intended that they bear, although such a construction necessitates a departure from the literal meaning of the words used.

In the same vein, the argument that R.A. No. 7535 does not include people's initiative to amend the Constitution simply because it lacks a sub-title on the subject should be given the weight of helium. Again, the hoary rule in statutory construction is that headings prefixed to titles, chapters and sections of a statute may be consulted in aid of interpretation, but inferences drawn therefrom are entitled to very little weight, and they can never control the plain terms of the enacting clauses. 14 All said, it is difficult to agree with the majority decision that refuses to enforce the manifest intent or spirit of R.A. No. 6735 to implement the people's initiative to amend the Constitution. It blatantly disregards the rule cast in concrete that the letter of the law must yield to its spirit for the letter of the law is its body but its spirit is its soul. 15 II COMELEC Resolution No. 2300, 16 promulgated under the stewardship of Commissioner Haydee Yorac, then its Acting Chairman, spelled out the procedure on how to exercise the people's initiative to amend the Constitution. This is in accord with the delegated power granted by section 20 of R.A. No. 6735 to the COMELEC which expressly states: "The Commission is hereby empowered to promulgate such rules and regulations as may be necessary to carry out the purposes of this Act." By no means can this delegation of power be assailed as infirmed. In the benchmark case of Pelaez v. Auditor General, 17 this Court, thru former Chief Justice Roberto Concepcion laid down the test to determine whether there is undue delegation of legislative power, viz: xxx xxx xxx Although Congress may delegate to another branch of the Government the power to fill details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that said law: (a) be complete in itself it must set forth therein the policy to be executed, carried out or implemented by the delegate and (b) to fix standard the limits of which are sufficiently determinate or determinable to which the delegate must conform in the performance of his functions. Indeed,

without a statutory declaration of policy, which is the essence of every law, and, without the aforementioned standard, there would be no means to determine, with reasonable certainty, whether the delegate has acted within or beyond the scope of his authority. Hence, he could thereby arrogate upon himself the power, not only to make the law, but, also and this is worse to unmake it, by adopting measures inconsistent with the end sought to be attained by the Act of Congress, thus nullifying the principle of separation of powers and the system of checks and balances, and, consequently, undermining the very foundation of our republican system. Section 68 of the Revised Administrative Code does not meet these well-settled requirements for a valid delegation of the power to fix the details in the enforcement of a law. It does not enunciate any policy to be carried out or implemented by the President. Neither does it give a standard sufficiently precise to avoid the evil effects above referred to. R.A. No. 6735 sufficiently states the policy and the standards to guide the COMELEC in promulgating the law's implementing rules and regulations of the law. As aforestated, section 2 spells out the policy of the law; viz: "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." Spread out all over R.A. No. 6735 are the standards to canalize the delegated power to the COMELEC to promulgate rules and regulations from overflowing. Thus, the law states the number of signatures necessary to start a people's initiative, 18 directs how initiative proceeding is commenced, 19 what the COMELEC should do upon filing of the petition for initiative, 20 how a proposition is approved, 21 when a plebiscite may be held, 22 when the amendment takes effect 23 and what matters may not be the subject of any initiative. 24 By any measure, these standards are adequate. Former Justice Isagani A. Cruz, similarly elucidated that "a sufficient standard is intended to map out the boundaries of the delegates' authority by defining the legislative policy and indicating the circumstances under which it is to be pursued and effected. The

purpose of the sufficient standard is to prevent a total transference of legislative power from the lawmaking body to the delegate." 25 In enacting R.A. No. 6735, it cannot be said that Congress totally transferred its power to enact the law implementing people's initiative to COMELEC. A close look at COMELEC Resolution No. 2300 will show that it merely provided the procedure to effectuate the policy of R.A. No. 6735 giving life to the people's initiative to amend the Constitution. The debates 26 in the Constitutional Commission make it clear that the rules of procedure to enforce the people's initiative can be delegated, thus: MR. ROMULO. Under Commissioner Davide's amendment, it is 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. 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. In his book, The Intent of the 1986 Constitution Writers, 27 Father Bernas likewise affirmed: "In response to questions of Commissioner Romulo, Davide explained the extent of the power of the legislature over the process: it could for instance, prescribe the 'proper form

before (the amendment) is submitted to the people,' it could authorize another body to check the proper form. It could also authorize the COMELEC, for instance, to check the authenticity of the signatures of petitioners. Davide concluded: '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.'" Quite clearly, the prohibition against the legislature is to impair the substantive right of the people to initiate amendments to the Constitution. It is not, however, prohibited from legislating the procedure to enforce the people's right of initiative or to delegate it to another body like the COMELEC with proper standard. A survey of our case law will show that this Court has prudentially refrained from invalidating administrative rules on the ground of lack of adequate legislative standard to guide their promulgation. As aptly perceived by former Justice Cruz, "even if the law itself does not expressly pinpoint the standard, the courts will bend backward to locate the same elsewhere in order to spare the statute, if it can, from constitutional infirmity." 28 He cited the ruling in Hirabayashi v. United States, 29 viz: xxx xxx xxx It is true that the Act does not in terms establish a particular standard to which orders of the military commander are to conform, or require findings to be made as a prerequisite to any order. But the Executive Order, the Proclamations and the statute are not to be read in isolation from each other. They were parts of a single program and must be judged as such. The Act of March 21, 1942, was an adoption by Congress of the Executive Order and of the Proclamations. The Proclamations themselves followed a standard authorized by the Executive Order the necessity of protecting military resources in the designated areas against espionage and sabotage. In the case at bar, the policy and the standards are bright-lined in R.A. No. 6735. A 20-20 look at the law cannot miss them. They were not written by our legislators in invisible ink. The policy and standards can also be found in no less than section 2, Article XVII of the Constitution on Amendments or Revisions. There is thus no reason to hold that the standards provided for in R.A. No. 6735 are insufficient

for in other cases we have upheld as adequate more general standards such as "simplicity and dignity," 30 "public interest," 31 "public welfare," 32 "interest of law and order," 33 "justice and equity," 34 "adequate and efficient instruction," 35 "public safety," 36 "public policy", 37 "greater national interest", 38 "protect the local consumer by stabilizing and subsidizing domestic pump rates", 39 and "promote simplicity, economy and efficiency in government." 40 A due regard and respect to the legislature, a co-equal and coordinate branch of government, should counsel this Court to refrain from refusing to effectuate laws unless they are clearly unconstitutional. III It is also respectfully submitted that the petition should he dismissed with respect to the Pedrosas. The inclusion of the Pedrosas in the petition is utterly baseless. The records show that the case at bar started when respondent Delfin alone and by himself filed with the COMELEC a Petition to Amend the Constitution to Lift Term Limits of Elective Officials by People's Initiative. The Pedrosas did not join the petition. It was Senator Roco who moved to intervene and was allowed to do so by the COMELEC. The petition was heard and before the COMELEC could resolve the Delfin petition, the case at bar was filed by the petitioners with this Court. Petitioners sued the COMELEC. Jesus Delfin, Alberto Pedrosa and Carmen Pedrosa in their capacities as founding members of the People's Initiative for Reform, Modernization and Action (PIRMA). The suit is an original action for prohibition with prayer for temporary restraining order and/or writ of preliminary injunction. The petition on its face states no cause of action against the Pedrosas. The only allegation against the Pedrosas is that they are founding members of the PIRMA which proposes to undertake the signature drive for people's initiative to amend the Constitution. Strangely, the PIRMA itself as an organization was not impleaded as a respondent. Petitioners then prayed that we order the Pedrosas ". . . to desist from conducting a signature drive for a people's initiative to amend the Constitution." On December 19, 1996, we temporarily enjoined the Pedrosas ". . . from conducting a signature drive for people's initiative to amend the Constitution." It is not enough for the majority to lift the temporary restraining order against the Pedrosas. It

should dismiss the petition and all motions for contempt against them without equivocation. One need not draw a picture to impart the proposition that in soliciting signatures to start a people's initiative to amend the Constitution the Pedrosas are not engaged in any criminal act. Their solicitation of signatures is a right guaranteed in black and white by section 2 of Article XVII of the Constitution which provides that ". . . amendments to this Constitution may likewise be directly proposed by the people through initiative. . ." This right springs from the principle proclaimed in section 1, Article II of the Constitution that in a democratic and republican state "sovereignty resides in the people and all government authority emanates from them." The Pedrosas are part of the people and their voice is part of the voice of the people. They may constitute but a particle of our sovereignty but no power can trivialize them for sovereignty is indivisible. But this is not all. Section 16 of Article XIII of the Constitution provides: "The right of the people and their organizations to effective and reasonable participation at all levels of social, political and economic decision-making shall not be abridged. The State shall by law, facilitate the establishment of adequate consultation mechanisms." This is another novel provision of the 1987 Constitution strengthening the sinews of the sovereignty of our people. In soliciting signatures to amend the Constitution, the Pedrosas are participating in the political decision-making process of our people. The Constitution says their right cannot be abridged without any ifs and buts. We cannot put a question mark on their right. Over and above these new provisions, the Pedrosas' campaign to amend the Constitution is an exercise of their freedom of speech and expression and their right to petition the government for redress of grievances. We have memorialized this universal right in all our fundamental laws from the Malolos Constitution to the 1987 Constitution. We have iterated and reiterated in our rulings that freedom of speech is a preferred right, the matrix of other important rights of our people. Undeniably, freedom of speech enervates the essence of the democratic creed of think and let think. For this reason, the Constitution encourages speech even if it protects the

speechless. It is thus evident that the right of the Pedrosas to solicit signatures to start a people's initiative to amend the Constitution does not depend on any law, much less on R.A. 6735 or COMELEC Resolution No. 2300. No law, no Constitution can chain the people to an undesirable status quo. To be sure, there are no irrepealable laws just as there are no irrepealable Constitutions. Change is the predicate of progress and we should not fear change. Mankind has long recognized the truism that the only constant in life is change and so should the majority. IV In a stream of cases, this Court has rhapsodized people power as expanded in the 1987 Constitution. On October 5, 1993, we observed that people's might is no longer a myth but an article of faith in our Constitution. 41 On September 30, 1994, we postulated that people power can be trusted to check excesses of government and that any effort to trivialize the effectiveness of people's initiatives ought to be rejected. 42 On September 26, 1996, we pledged that ". . . this Court as a matter of policy and doctrine will exert every effort to nurture, protect and promote their legitimate exercise." 43 Just a few days ago, or on March 11, 1997, by a unanimous decision, 44 we allowed a recall election in Caloocan City involving the mayor and ordered that he submits his right to continue in office to the judgment of the tribunal of the people. Thus far, we have succeeded in transforming people power from an opaque abstraction to a robust reality. The Constitution calls us to encourage people empowerment to blossom in full. The Court cannot halt any and all signature campaigns to amend the Constitution without setting back the flowering of people empowerment. More important, the Court cannot seal the lips of people who are pro-change but not those who are anti-change without concerting the debate on charter change into a sterile talkaton. Democracy is enlivened by a dialogue and not by a monologue for in a democracy nobody can claim any infallibility. Melo and Mendoza, JJ., concur.

VITUG, J., concurring and dissenting: The COMELEC should have dismissed, outrightly, the Delfin Petition. It does seem to me that there is no real exigency on the part of the Court to engross, let alone to commit, itself on all the issues raised and debated upon by the parties. What is essential at this time would only be to resolve whether or not the petition filed with the COMELEC, signed by Atty. Jesus S. Delfin in his capacity as a "founding member of the Movement for People's Initiative" and seeking through a people initiative certain modifications on the 1987 Constitution, can properly be regarded and given its due course. The Constitution, relative to any proposed amendment under this method, is explicit. Section 2, Article XVII, thereof 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. The Delfin petition is thus utterly deficient. Instead of complying with the constitutional imperatives, the petition would rather have much of its burden passed on, in effect, to the COMELEC. The petition would require COMELEC to schedule "signature gathering all over the country," to cause the necessary publication of the petition "in newspapers of general and local circulation," and to instruct "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. I submit, even then, that the TRO earlier issued by the Court which, consequentially, is made permanent under the ponencia should be held to cover only the Delfin petition and must not be so understood as having intended or contemplated to embrace the signature drive of the Pedrosas. The grant of such a right is clearly implicit in the

constitutional mandate on people initiative. The distinct greatness of a democratic society is that those who reign are the governed themselves. The postulate is no longer lightly taken as just a perceived myth but a veritable reality. The past has taught us that the vitality of government lies not so much in the strength of those who lead as in the consent of those who are led. The role of free speech is pivotal but it can only have its true meaning if it comes with the correlative end of being heard. Pending a petition for a people's initiative that is sufficient in form and substance, it behooves the Court, I most respectfully submit, to yet refrain from resolving the question of whether or not Republic Act No. 6735 has effectively and sufficiently implemented the Constitutional provision on right of the people to directly propose constitutional amendments. Any opinion or view formulated by the Court at this point would at best be only a non-binding, albeit possibly persuasive, obiter dictum. I vote for granting the instant petition before the Court and for clarifying that the TRO earlier issued by the Court did not prescribe the exercise by the Pedrosas of their right to campaign for constitutional amendments.

FRANCISCO, J., dissenting and concurring: There is no question that my esteemed colleague Mr. Justice Davide has prepared a scholarly and well-written ponencia. Nonetheless, I cannot fully subscribe to his view that R. A. No. 6735 is inadequate to cover the system of initiative on amendments to the Constitution. To begin with, sovereignty under the constitution, resides in the people and all government authority emanates from them. 1 Unlike our previous constitutions, the present 1987 Constitution has given more significance to this declaration of principle for the people are now vested with power not only to propose, enact or reject any act or law passed by Congress or by the local legislative body, but to propose amendments to the constitution as well. 2 To implement these constitutional edicts, Congress in 1989 enacted Republic Act

No. 6735, otherwise known as "The initiative and Referendum Act". This law, to my mind, amply covers an initiative on the constitution. The contrary view maintained by petitioners is based principally on the alleged lack of sub-title in the law on initiative to amend the constitution and on their allegation that:
Republic Act No. 6735 provides for the effectivity of the law after publication in print media. [And] [t]his indicates that Republic Act No. 6735 covers only laws and not constitutional amendments, because constitutional amendments take effect upon ratification not after publication. 3

which allegation manifests petitioners' selective interpretation of the law, for under Section 9 of Republic Act No. 6735 on the Effectivity of Initiative or Referendum Proposition paragraph (b) thereof is clear in providing that: The proposition in an initiative on the constitution approved by a majority of the votes cast in the plebiscite shall become effective as to the day of the plebiscite. It is a rule that every part of the statute must be interpreted with reference the context, i.e., that every part of the statute must be construed together with the other parts and kept subservient to the general intent of the whole enactment. 4 Thus, the provisions of Republic Act No. 6735 may not be interpreted in isolation. The legislative intent behind every law is to be extracted from the statute as a whole. 5 In its definition of terms, Republic Act No. 6735 defines initiative as "the power of the people to propose amendments to the constitution or to propose and enact legislations through an election called for the purpose". 6 The same section, in enumerating the three systems of initiative, included an "initiative on the constitution which refers to a petition proposing amendments to the constitution" 7 Paragraph (e) again of Section 3 defines "plebiscite" as "the electoral process by which an initiative on the constitution is approved or rejected by the people" And as to the material requirements for an initiative on the Constitution, Section 5(b) distinctly enumerates the following: A petition for an initiative on the 1987 Constitution must have at least

twelve per centum (12%) of the total number of the registered voters as signatories, of which every legislative district must be represented by at least three per centum (3%) of the registered voters therein. Initiative on the constitution may be exercised only after five (5) years from the ratification of the 1987 Constitution and only once every five years thereafter. These provisions were inserted, on purpose, by Congress the intent being to provide for the implementation of the right to propose an amendment to the Constitution by way of initiative. "A legal provision", the Court has previously said, "must not be construed as to be a useless surplusage, and accordingly, meaningless, in the sense of adding nothing to the law or having no effect whatsoever thereon". 8 That this is the legislative intent is further shown by the deliberations in Congress, thus: . . . More significantly, in the course of the consideration of the Conference Committee Report on the disagreeing provisions of Senate Bill No. 17 and House Bill No. 21505, it was noted: 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 and 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 an 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. MR. ALBANO. And this initiative and referendum is in consonance with the provision of the Constitution 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." (Id. [Journal and Record of the House of Representatives], Vol. VIII, 8 June 1989, p. 960; quoted in Garcia v. Comelec, 237 SCRA 279, 292-293 [1994]; emphasis supplied)
. . . The Senate version of the Bill may not have comprehended initiatives on the Constitution. When consolidated, though, with the House version of the Bill and as approved and enacted into law, the proposal included

initiative on both the Constitution and ordinary laws. 9

Clearly then, Republic Act No. 6735 covers an initiative on the constitution. Any other construction as what petitioners foist upon the Court constitute a betrayal of the intent and spirit behind the enactment. At any rate, I agree with the ponencia that the Commission on Elections, at present, cannot take any action (such as those contained in the Commission's orders dated December 6, 9, and 12, 1996 [Annexes B, C and B-1]) indicative of its having already assumed jurisdiction over private respondents' petition. This is so because from the tenor of Section 5 (b) of R.A. No. 6735 it would appear that proof of procurement of the required percentage of registered voters at the time the petition for initiative is filed, is a jurisdictional requirement. Thus: A petition for an initiative on the 1987 Constitution must have at least twelve per centum (12%) of the total number of registered voters as signatories, of which every legislative district must be represented by at least three per centum (3%) of the registered voters therein. Initiative on the Constitution may be exercised only after five (5) years from the ratification of the 1987 Constitution and only once every five (5) years thereafter. Here private respondents' petition is unaccompanied by the required signatures. This defect notwithstanding, it is without prejudice to the refiling of their petition once compliance with the required percentage is satisfactorily shown by private respondents. In the absence, therefore, of an appropriate petition before the Commission on Elections, any determination of whether private respondents' proposal constitutes an amendment or revision is premature. ACCORDINGLY, I take exception to the conclusion reached in the ponencia that R.A. No. 6735 is an "inadequate" legislation to cover a people's initiative to propose amendments to the Constitution. I, however, register my concurrence with the dismissal, in the meantime, of private respondents' petition for initiative before public respondent Commission on Elections until the same be supported by

proof of strict compliance with Section 5 (b) of R.A. No. 6735. Melo and Mendoza, JJ., concur.

PANGANIBAN, J., concurring and dissenting: Our distinguished colleague, Mr. Justice Hilario G. Davide Jr., writing for the majority, holds that: (1) The Comelec acted without jurisdiction or with grave abuse of discretion in entertaining the "initiatory" Delfin Petition. (2) While the Constitution allows amendments to "be directly proposed by the people through initiative," there is no implementing law for the purpose. RA 6735 is "incomplete, inadequate, or wanting in essential terms and conditions insofar as initiative on amendments to the Constitution is concerned." (3) Comelec Resolution No. 2330, "insofar as it prescribes rules and regulations on the conduct of initiative on amendments to the Constitution, is void." I concur with the first item above. Until and unless an initiatory petition can show the required number of signatures in this case, 12% of all the registered voters in the Philippines with at least 3% in every legislative district no public funds may be spent and no government resources may be used in an initiative to amend the Constitution. Verily, the Comelec cannot even entertain any petition absent such signatures. However, I dissent most respectfully from the majority's two other rulings. Let me explain. Under the above restrictive holdings espoused by the Court's majority, the Constitution cannot be amended at all through a people's initiative. Not by Delfin, not by Pirma, not by anyone, not even by all the voters of the country acting together. This decision will effectively but unnecessarily curtail, nullify, abrogate and render inutile the people's right to change the basic law. At the very least, the majority holds the right hostage to congressional discretion on whether to pass a new law to implement it, when there is already one

existing at present. This right to amend through initiative, it bears stressing, is guaranteed by Section 2, Article XVII of the Constitution, as follows: 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. With all due respect, I find the majority's position all too sweeping and all too extremist. It is equivalent to burning the whole house to exterminate the rats, and to killing the patient to relieve him of pain. What Citizen Delfin wants the Comelec to do we should reject. But we should not thereby preempt any future effort to exercise the right of initiative correctly and judiciously. The fact that the Delfin Petition proposes a misuse of initiative does not justify a ban against its proper use. Indeed, there is a right way to do the right thing at the right time and for the right reason. Taken Together and Interpreted Properly, the Constitution, RA 6735 and Comelec Resolution 2300 Are Sufficient to Implement Constitutional Initiatives While RA 6735 may not be a perfect law, it was as the majority openly concedes intended by the legislature to cover and, I respectfully submit, it contains enough provisions to effectuate an initiative on the Constitution. 1 I completely agree with the inspired and inspiring opinions of Mr. Justice Reynato S. Puno and Mr. Justice Ricardo J. Francisco that RA 6735, the Roco law on initiative, sufficiently implements the right of the people to initiate amendments to the Constitution. Such views, which I shall no longer repeat nor elaborate on, are thoroughly consistent with this Court's unanimous en banc rulings in Subic Bay Metropolitan Authority vs. Commission on Elections, 2 that "provisions for initiative . . . are (to be) liberally construed to effectuate their purposes, to facilitate and not hamper the exercise by the voters of the rights granted thereby"; and in Garcia vs. Comelec, 3 that any "effort to trivialize the effectiveness of

people's initiatives ought to be rejected." No law can completely and absolutely cover all administrative details. In recognition of this, RA 6735 wisely empowered 4 the Commission on Election "to promulgate such rules and regulations as may be necessary to carry out the purposes of this Act." And pursuant thereto, the Comelec issued its Resolution 2300 on 16 January 1991. Such Resolution, by its very words, was promulgated "to govern the conduct of initiative on the Constitution and initiative and referendum on national and local laws," not by the incumbent Commission on Elections but by one then composed of Acting Chairperson Haydee B. Yorac, Comms. Alfredo E. Abueg Jr., Leopoldo L. Africa, Andres R. Flores, Dario C. Rama and Magdara B. Dimaampao. All of these Commissioners who signed Resolution 2300 have retired from the Commission, and thus we cannot ascribe any vile motive unto them, other than an honest, sincere and exemplary effort to give life to a cherished right of our people. The majority argues that while Resolution 2300 is valid in regard to national laws and local legislations, it is void in reference to constitutional amendments. There is no basis for such differentiation. The source of and authority for the Resolution is the same law, RA 6735. I respectfully submit that taken together and interpreted properly and liberally, the Constitution (particularly Art. XVII, Sec. 2), R4 6735 and Comelec Resolution 2300 provide more than sufficient authority to implement, effectuate and realize our people's power to amend the Constitution. Petitioner Delfin and the Pedrosa Spouses Should Not Be Muzzled I am glad the majority decided to heed our plea to lift the temporary restraining order issued by this Court on 18 December 1996 insofar as it prohibited Petitioner Delfin and the Spouses Pedrosa from exercising their right of initiative. In fact, I believe that such restraining order as against private respondents should not have been issued, in the first place. While I agree that the Comelec should be stopped from using public funds and government resources to help them gather signatures, I firmly believe that this Court has no power to

restrain them from exercising their right of initiative. The right to propose amendments to the Constitution is really a species of the right of free speech and free assembly. And certainly, it would be tyrannical and despotic to stop anyone from speaking freely and persuading others to conform to his/her beliefs. As the eminent Voltaire once said, "I may disagree with what you say, but I will defend to the death your right to say it." After all, freedom is not really for the thought we agree with, but as Justice Holmes wrote, "freedom for the thought that we hate." 5 Epilogue By way of epilogue, let me stress the guiding tenet of my Separate Opinion. Initiative, like referendum and recall, is a new and treasured feature of the Filipino constitutional system. All three are institutionalized legacies of the world-admired EDSA people power. Like elections and plebiscites, they are hallowed expressions of popular sovereignty. They are sacred democratic rights of our people to be used as their final weapons against political excesses, opportunism, inaction, oppression and misgovernance; as well as their reserved instruments to exact transparency, accountability and faithfulness from their chosen leaders. While on the one hand, their misuse and abuse must be resolutely struck down, on the other, their legitimate exercise should be carefully nurtured and zealously protected. WHEREFORE, I vote to GRANT the petition of Sen. Miriam D. Santiago et al. and to DIRECT Respondent Commission on Elections to DISMISS the Delfin Petition on the ground of prematurity, but not on the other grounds relied upon by the majority. I also vote to LIFT the temporary restraining order issued on 18 December 1996 insofar as it prohibits Jesus Delfin, Alberto Pedrosa and Carmen Pedrosa from exercising their right to free speech in proposing amendments to the Constitution. Melo and Mendoza, JJ., concur.

Separate Opinions

PUNO, J., concurring and dissenting: I join the ground-breaking ponencia of our esteemed colleague, Mr. Justice Davide insofar as it orders the COMELEC to dismiss the Delfin petition. I regret, however, I cannot share the view that R.A. No. 5735 and COMELEC Resolution No. 2300 are legally defective and cannot implement the people's initiative to amend the Constitution. I likewise submit that the petition with respect to the Pedrosas has no leg to stand on and should be dismissed. With due respect: I First, I submit that R.A. No. 6735 sufficiently implements the right of the people to initiate amendments to the Constitution thru initiative. Our effort to discover the meaning of R.A. No. 6735 should start with the search of the intent of our lawmakers. A knowledge of this intent is critical for the intent of the legislature is the law and the controlling factor in its interpretation. 1 Stated otherwise, intent is the essence of the law, the spirit which gives life to its enactment. 2 Significantly, the majority decision concedes that ". . . R.A. No. 6735 was intended to cover initiative to propose amendments to the Constitution." It ought to be so for this intent is crystal clear from the history of the law which was a consolidation of House Bill No. 21505 3 and Senate Bill No. 17. 4 Senate Bill No. 17 was entitled "An Act Providing for a System of Initiative and Referendum and the Exception Therefrom, Whereby People in Local Government Units Can Directly Propose and Enact Resolutions and Ordinances or Approve or Reject any Ordinance or Resolution Passed by the Local Legislative Body." Beyond doubt, Senate Bill No. 17 did not include people's initiative to propose amendments to the Constitution. In checkered contrast, House Bill No. 21505 5 expressly included people's initiative to amend the Constitution. Congressman (now Senator) Raul Roco emphasized in his sponsorship remarks: 6 xxx xxx xxx SPONSORSHIP REMARKS OF MR. ROCO At the outset, Mr. Roco provided the following backgrounder on the

constitutional basis of the proposed measure. 1. As cited in Vera vs. Avelino (1946), the presidential system which was introduced by the 1935 Constitution saw the application of the principle of separation of powers. 2. While under the parliamentary system of the 1973 Constitution the principle remained applicable, the 1981 amendments to the Constitution of 1973 ensured presidential dominance over the Batasang Pambansa. Constitutional history then saw the shifting and sharing of legislative powers between the Legislature and the Executive departments. Transcending changes in the exercise of legislative power is the declaration in the Philippine Constitution that the Philippines is a republican state where sovereignty resides in the people and all sovereignty emanates from them. 3. Under the 1987 Constitution, the lawmaking power is still preserved in Congress; however, to institutionalize direct action of the people as exemplified in the 1986 Revolution, the Constitution recognizes the power of the people, through the system of initiative and referendum. As cited in Section 1, Article VI of the 1987 Constitution, Congress does not have plenary powers since reserve powers are given to the people expressly. Section 32 of the same Article mandates Congress to pass at the soonest possible time, a bill on referendum and initiative, and to share its legislative powers with the people. Section 2, Article XVII of the 1987 Constitution, on the other hand, vests in the people the power to directly propose amendments to the Constitution through initiative, upon petition of at least 12 percent of the total number of registered voters. Stating that House Bill No. 21505 is the Committee's response to the duty imposed on Congress to implement the exercise by the people of the right to initiative and referendum, Mr. Roco recalled the beginnings of the system of initiative and referendum under Philippine Law. He cited Section 99 of the Local Government Code which vests in the barangay assembly the power to initiate legislative processes,

decide the holding of plebiscite and hear reports of the Sangguniang Barangay, all of which are variations of the power of initiative and referendum. He added that the holding of barangay plebiscites and referendum are likewise provided in Sections 100 and 101 of the same Code. Thereupon, for the sake of brevity, Mr. Roco moved that pertinent quotation on the subject which he will later submit to the Secretary of the House be incorporated as part of his sponsorship speech. He then cited examples of initiative and referendum similar to those contained in the instant Bill among which are the constitutions of states in the United States which recognize the right of registered voters to initiate the enactment of any statute or to project any existing law or parts thereof in a referendum. These states, he said, are Alaska, Alabama, Montana, Massachusets, Dakota, Oklahoma, Oregon, and practically all other states. Mr. Roco explained that in certain American states, the kind of laws to which initiative and referendum apply is also without limitation, except for emergency measures, which are likewise incorporated in House Bill No. 21505. He added that the procedure provided by the Bill from the filing of the petition, the requirements of a certain percentage of supporters to present a proposition, to the submission to electors are substantially similar to the provisions in American laws. Although an infant in Philippine political structure, the system of initiative and referendum, he said, is a tried and tested system in other jurisdictions, and the Bill is patterned after American experience. He further explained that the bill has only 12 sections, and recalled that the Constitutional Commissioners saw the system of the initiative and referendum as an instrument which can be used should the legislature show itself to be indifferent to the needs of the people. This is the reason, he claimed, why now is an opportune time to pass the Bill even as he noted the felt necessity of the times to pass laws which are necessary to safeguard individual rights and liberties. At this juncture Mr. Roco explained the process of initiative and referendum as advocated in House Bill No. 21505. He stated that:

1. Initiative means that the people, on their own political judgment, submit a Bill for the consideration of the general electorate. 2. The instant Bill provides three kinds of initiative, namely; the initiative to amend the Constitution once every five years; the initiative to amend statutes approved by Congress; and the initiative to amend local ordinances. 3. The instant Bill gives a definite procedure and allows the Commission on Elections (COMELEC) to define rules and regulations on the power of initiative. 4. Referendum means that the legislators seek the consent of the people on measures that they have approved. 5. Under Section 4 of the Bill the people can initiate a referendum which is a mode of plebiscite by presenting a petition therefor, but under certain limitations, such as the signing of said petition by at least 10 percent of the total of registered voters at which every legislative district is represented by at least three percent of the registered voters thereof. Within 30 days after receipt of the petition, the COMELEC shall determine the sufficiency of the petition, publish the same, and set the date of the referendum within 45 to 90-day period. 6. When the matter under referendum or initiative is approved by the required number of votes, it shall become effective 15 days following the completion of its publication in the Official Gazette. In concluding his sponsorship remarks, Mr. Roco stressed that the Members cannot ignore the people's call for initiative and referendum and urged the Body to approve House Bill No. 21505. At this juncture, Mr. Roco also requested that the prepared text of his speech together with the footnotes be reproduced as part of the Congressional Records. The same sentiment as to the bill's intent to implement people's initiative to amend the Constitution was stressed by then Congressman (now Secretary of Agriculture) Salvador Escudero III in his sponsorship remarks, viz: 7

xxx xxx xxx SPONSORSHIP REMARKS OF MR. ESCUDERO Mr. Escudero first pointed out that the people have been clamoring for a truly popular democracy ever since, especially in the so-called parliament of the streets. A substantial segment of the population feels, he said, that the form of democracy is there, but not the reality or substance of it because of the increasingly elitist approach of their representatives to the country's problem. Whereupon, Mr. Escudero pointed out that the Constitution has provided a means whereby the people can exercise the reserved power of initiative to propose amendments to the Constitution, and requested that Sections 1 and 32, Article VI; Section 3, Article X; and Section 2, Article XVII of the Constitution be made part of his sponsorship remarks. Mr. Escudero also stressed that an implementing law is needed for the aforecited Constitutional provisions. While the enactment of the Bill will give way to strong competition among cause-oriented and sectoral groups, he continued, it will hasten the politization of the citizenry, aid the government in forming an enlightened public opinion, and produce more responsive legislation. The passage of the Bill will also give street parliamentarians the opportunity to articulate their ideas in a democratic forum, he added. Mr. Escudero stated that he and Mr. Roco hoped for the early approval of the Bill so that it can be initially used for the Agrarian Reform Law. He said that the passage of House Bill No. 21505 will show that the Members can set aside their personal and political consideration for the greater good of the people. The disagreeing provisions in Senate Bill No. 17 and House Bill No. 21505 were threshed out in a Bicameral Conference Committee. 8 In the meeting of the Committee on June 6, 1989, 9 the members agreed that the two (2) bills should be consolidated and that the consolidated version should include people's initiative to amend the Constitution as contemplated by House Bill No. 21505. The transcript of the meeting states:

xxx xxx xxx CHAIRMAN GONZALES. But at any rate, as I have said, because this is new in our political system, the Senate decided on a more cautious approach and limiting it only to the local government units because even with that stage where . . . at least this has been quite popular, ano? It has been attempted on a national basis. Alright. There has not been a single attempt. Now, so, kami limitado doon. And, second, we consider also that it is only fair that the local legislative body should be given a chance to adopt the legislation bill proposed, right? Iyong sinasabing indirect system of initiative. If after all, the local legislative assembly or body is willing to adopt it in full or in toto, there ought to be any reason for initiative, ano for initiative. And, number 3, we feel that there should be some limitation on the frequency with which it should be applied. Number 4, na the people, thru initiative, cannot enact any ordinance that is beyond the scope of authority of the local legislative body, otherwise, my God, magaassume sila ng power that is broader and greater than the grant of legislative power to the Sanggunians. And Number 5, because of that, then a proposition which has been the result of a successful initiative can only carry the force and effect of an ordinance and therefore that should not deprive the court of its jurisdiction to declare it null and void for want of authority. Ha, di ba? I mean it is beyond powers of local government units to enact. Iyon ang main essence namin, so we concentrated on that. And that is why . . . so ang sa inyo naman includes iyon sa Constitution, amendment to the Constitution eh . . . national laws. Sa amin, if you insist on that, alright, although we feel na it will in effect become a dead statute. Alright, and we can agree, we can agree. So ang mangyayari dito, and magiging basic nito, let us not discuss anymore kung alin and magiging basic bill, ano, whether it is the Senate Bill or whether it is the House bill. Logically it should be ours sapagkat una iyong sa amin eh. It is one of the first bills approved by the Senate kaya ang number niyan, makikita mo, 17, eh. Huwag na nating pagusapan. Now, if you insist, really iyong features ng national at saka constitutional, okay. ____ gagawin na natin na consolidation of both bills. HON. ROCO. Yes, we shall consolidate.
CHAIRMAN GONZALES. Consolidation of the Senate and House Bill No.

so and so. 10

When the consolidated bill was presented to the House for approval, then Congressman Roco upon interpellation by Congressman Rodolfo Albano, again confirmed that it covered people's initiative to amend the Constitution. The record of the House Representative states: 11 xxx xxx xxx 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. 21505 which refers to the system providing for the initiative and 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 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. The Gentlemen 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 provide 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. 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 in the 1987 Constitution, it is every five years. MR. ALBANO. For every five years, Mr. Speaker? MR. ROCO. Within five years, we cannot have multiple initiatives and referenda. MR. ALBANO. Therefore, basically, there was no substantial difference between the two versions? MR. ROCO. The gaps in our bill were filled by the Senate which, as I said earlier, ironically was about local, provincial and municipal legislation. MR. ALBANO. And the two bills were consolidated? MR. ROCO. Yes, Mr. Speaker.

MR. ALBANO. Thank you, Mr. Speaker. APPROVAL OF C.C.R. ON S.B. NO. 17 AND H.B. NO. 21505 (The Initiative and Referendum Act) THE SPEAKER PRO TEMPORE. There was a motion to approve this consolidated bill on Senate Bill No. 17 and House Bill No. 21505. Is there any objection? (Silence. The Chair hears none; the motion is approved. Since it is crystalline that the intent of R.A. No. 6735 is to implement the people's initiative to amend the Constitution, it is our bounden duty to interpret the law as it was intended by the legislature. We have ruled that once intent is ascertained, it must be enforced even if it may not be consistent with the strict letter of the law and this ruling is as old as the mountain. We have also held that where a law is susceptible of more than one interpretation, that interpretation which will most tend to effectuate the manifest intent of the legislature will be adopted. 12 The text of R.A. No. 6735 should therefore be reasonably construed to effectuate its intent to implement the people's initiative to amend the Constitution. To be sure, we need not torture the text of said law to reach the conclusion that it implements people's initiative to amend the Constitution. R.A. No. 6735 is replete with references to this prerogative of the people. First, the policy statement declares: Sec. 2. Statement of 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) Second, the law defines "initiative" as "the power of the people to propose amendments to the constitution or to propose and enact legislations through an election called for the purpose," and "plebiscite" as "the electoral process by which an initiative on the

Constitution is approved or rejected by the people. Third, the law provides the requirements for a petition for initiative to amend the Constitution. Section 5(b) states that "(a) petition for an initiative on the 1987 Constitution must have at least twelve per centum (12%) of the total number of registered voters as signatories, of which every legislative district must be represented by at least three per centum (3%) of the registered voters therein." It also states that "(i)nitiative on the Constitution may be exercised only after five (5) years from the ratification of the 1987 Constitution and only once every five (5) years thereafter. Finally, R.A. No. 6735 fixes the effectivity date of the amendment. Section 9(b) states that "(t)he proposition in an initiative on the Constitution approved by a majority of the votes cast in the plebiscite shall become effective as to the day of the plebiscite. It is unfortunate that the majority decision resorts to a strained interpretation of R.A. No. 6735 to defeat its intent which it itself concedes is to implement people's initiative to propose amendments to the Constitution. Thus, it laments that the word "Constitution" is neither germane nor relevant to the policy thrust of section 2 and that the statute's subtitling is not accurate. These lapses are to be expected for laws are not always written in impeccable English. Rightly, the Constitution does not require our legislators to be wordsmiths with the ability to write bills with poetic commas like Jose Garcia Villa or in lyrical prose like Winston Churchill. But it has always been our good policy not to refuse to effectuate the intent of a law on the ground that it is badly written. As the distinguished Vicente Francisco 13 reminds us: "Many laws contain words which have not been used accurately. But the use of inapt or inaccurate language or words, will not vitiate the statute if the legislative intention can be ascertained. The same is equally true with reference to awkward, slovenly, or ungrammatical expressions, that is, such expressions and words will be construed as carrying the meaning the legislature intended that they bear, although such a construction necessitates a departure from the literal meaning of the words used. In the same vein, the argument that R.A. No. 7535 does not include people's initiative to amend the Constitution simply because it lacks a

sub-title on the subject should be given the weight of helium. Again, the hoary rule in statutory construction is that headings prefixed to titles, chapters and sections of a statute may be consulted in aid of interpretation, but inferences drawn therefrom are entitled to very little weight, and they can never control the plain terms of the enacting clauses. 14 All said, it is difficult to agree with the majority decision that refuses to enforce the manifest intent or spirit of R.A. No. 6735 to implement the people's initiative to amend the Constitution. It blatantly disregards the rule cast in concrete that the letter of the law must yield to its spirit for the letter of the law is its body but its spirit is its soul. 15 II COMELEC Resolution No. 2300, 16 promulgated under the stewardship of Commissioner Haydee Yorac, then its Acting Chairman, spelled out the procedure on how to exercise the people's initiative to amend the Constitution. This is in accord with the delegated power granted by section 20 of R.A. No. 6735 to the COMELEC which expressly states: "The Commission is hereby empowered to promulgate such rules and regulations as may be necessary to carry out the purposes of this Act." By no means can this delegation of power be assailed as infirmed. In the benchmark case of Pelaez v. Auditor General, 17 this Court, thru former Chief Justice Roberto Concepcion laid down the test to determine whether there is undue delegation of legislative power, viz: xxx xxx xxx Although Congress may delegate to another branch of the Government the power to fill details in the execution, enforcement or administration of a law, it is essential, to forestall a violation of the principle of separation of powers, that said law: (a) be complete in itself it must set forth therein the policy to be executed, carried out or implemented by the delegate and (b) to fix standard the limits of which are sufficiently determinate or determinable to which the delegate must conform in the performance of his functions. Indeed, without a statutory declaration of policy, which is the essence of every law, and, without the aforementioned standard, there would be no

means to determine, with reasonable certainty, whether the delegate has acted within or beyond the scope of his authority. Hence, he could thereby arrogate upon himself the power, not only to make the law, but, also and this is worse to unmake it, by adopting measures inconsistent with the end sought to be attained by the Act of Congress, thus nullifying the principle of separation of powers and the system of checks and balances, and, consequently, undermining the very foundation of our republican system. Section 68 of the Revised Administrative Code does not meet these well-settled requirements for a valid delegation of the power to fix the details in the enforcement of a law. It does not enunciate any policy to be carried out or implemented by the President. Neither does it give a standard sufficiently precise to avoid the evil effects above referred to. R.A. No. 6735 sufficiently states the policy and the standards to guide the COMELEC in promulgating the law's implementing rules and regulations of the law. As aforestated, section 2 spells out the policy of the law; viz: "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." Spread out all over R.A. No. 6735 are the standards to canalize the delegated power to the COMELEC to promulgate rules and regulations from overflowing. Thus, the law states the number of signatures necessary to start a people's initiative, 18 directs how initiative proceeding is commenced, 19 what the COMELEC should do upon filing of the petition for initiative, 20 how a proposition is approved, 21 when a plebiscite may be held, 22 when the amendment takes effect 23 and what matters may not be the subject of any initiative. 24 By any measure, these standards are adequate. Former Justice Isagani A. Cruz, similarly elucidated that "a sufficient standard is intended to map out the boundaries of the delegates' authority by defining the legislative policy and indicating the circumstances under which it is to be pursued and effected. The purpose of the sufficient standard is to prevent a total transference of legislative power from the lawmaking body to the delegate." 25 In

enacting R.A. No. 6735, it cannot be said that Congress totally transferred its power to enact the law implementing people's initiative to COMELEC. A close look at COMELEC Resolution No. 2300 will show that it merely provided the procedure to effectuate the policy of R.A. No. 6735 giving life to the people's initiative to amend the Constitution. The debates 26 in the Constitutional Commission make it clear that the rules of procedure to enforce the people's initiative can be delegated, thus: MR. ROMULO. Under Commissioner Davide's amendment, it is 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. 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. In his book, The Intent of the 1986 Constitution Writers, 27 Father Bernas likewise affirmed: "In response to questions of Commissioner Romulo, Davide explained the extent of the power of the legislature over the process: it could for instance, prescribe the 'proper form before (the amendment) is submitted to the people,' it could authorize another body to check the proper form. It could also authorize the

COMELEC, for instance, to check the authenticity of the signatures of petitioners. Davide concluded: '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.'" Quite clearly, the prohibition against the legislature is to impair the substantive right of the people to initiate amendments to the Constitution. It is not, however, prohibited from legislating the procedure to enforce the people's right of initiative or to delegate it to another body like the COMELEC with proper standard. A survey of our case law will show that this Court has prudentially refrained from invalidating administrative rules on the ground of lack of adequate legislative standard to guide their promulgation. As aptly perceived by former Justice Cruz, "even if the law itself does not expressly pinpoint the standard, the courts will bend backward to locate the same elsewhere in order to spare the statute, if it can, from constitutional infirmity." 28 He cited the ruling in Hirabayashi v. United States, 29 viz: xxx xxx xxx It is true that the Act does not in terms establish a particular standard to which orders of the military commander are to conform, or require findings to be made as a prerequisite to any order. But the Executive Order, the Proclamations and the statute are not to be read in isolation from each other. They were parts of a single program and must be judged as such. The Act of March 21, 1942, was an adoption by Congress of the Executive Order and of the Proclamations. The Proclamations themselves followed a standard authorized by the Executive Order the necessity of protecting military resources in the designated areas against espionage and sabotage. In the case at bar, the policy and the standards are bright-lined in R.A. No. 6735. A 20-20 look at the law cannot miss them. They were not written by our legislators in invisible ink. The policy and standards can also be found in no less than section 2, Article XVII of the Constitution on Amendments or Revisions. There is thus no reason to hold that the standards provided for in R.A. No. 6735 are insufficient for in other cases we have upheld as adequate more general standards such as "simplicity and dignity," 30 "public interest," 31

"public welfare," 32 "interest of law and order," 33 "justice and equity," 34 "adequate and efficient instruction," 35 "public safety," 36 "public policy", 37 "greater national interest", 38 "protect the local consumer by stabilizing and subsidizing domestic pump rates", 39 and "promote simplicity, economy and efficiency in government." 40 A due regard and respect to the legislature, a co-equal and coordinate branch of government, should counsel this Court to refrain from refusing to effectuate laws unless they are clearly unconstitutional. III It is also respectfully submitted that the petition should he dismissed with respect to the Pedrosas. The inclusion of the Pedrosas in the petition is utterly baseless. The records show that the case at bar started when respondent Delfin alone and by himself filed with the COMELEC a Petition to Amend the Constitution to Lift Term Limits of Elective Officials by People's Initiative. The Pedrosas did not join the petition. It was Senator Roco who moved to intervene and was allowed to do so by the COMELEC. The petition was heard and before the COMELEC could resolve the Delfin petition, the case at bar was filed by the petitioners with this Court. Petitioners sued the COMELEC. Jesus Delfin, Alberto Pedrosa and Carmen Pedrosa in their capacities as founding members of the People's Initiative for Reform, Modernization and Action (PIRMA). The suit is an original action for prohibition with prayer for temporary restraining order and/or writ of preliminary injunction. The petition on its face states no cause of action against the Pedrosas. The only allegation against the Pedrosas is that they are founding members of the PIRMA which proposes to undertake the signature drive for people's initiative to amend the Constitution. Strangely, the PIRMA itself as an organization was not impleaded as a respondent. Petitioners then prayed that we order the Pedrosas ". . . to desist from conducting a signature drive for a people's initiative to amend the Constitution." On December 19, 1996, we temporarily enjoined the Pedrosas ". . . from conducting a signature drive for people's initiative to amend the Constitution." It is not enough for the majority to lift the temporary restraining order against the Pedrosas. It should dismiss the petition and all motions for contempt against them without equivocation.

One need not draw a picture to impart the proposition that in soliciting signatures to start a people's initiative to amend the Constitution the Pedrosas are not engaged in any criminal act. Their solicitation of signatures is a right guaranteed in black and white by section 2 of Article XVII of the Constitution which provides that ". . . amendments to this Constitution may likewise be directly proposed by the people through initiative. . ." This right springs from the principle proclaimed in section 1, Article II of the Constitution that in a democratic and republican state "sovereignty resides in the people and all government authority emanates from them." The Pedrosas are part of the people and their voice is part of the voice of the people. They may constitute but a particle of our sovereignty but no power can trivialize them for sovereignty is indivisible. But this is not all. Section 16 of Article XIII of the Constitution provides: "The right of the people and their organizations to effective and reasonable participation at all levels of social, political and economic decision-making shall not be abridged. The State shall by law, facilitate the establishment of adequate consultation mechanisms." This is another novel provision of the 1987 Constitution strengthening the sinews of the sovereignty of our people. In soliciting signatures to amend the Constitution, the Pedrosas are participating in the political decision-making process of our people. The Constitution says their right cannot be abridged without any ifs and buts. We cannot put a question mark on their right. Over and above these new provisions, the Pedrosas' campaign to amend the Constitution is an exercise of their freedom of speech and expression and their right to petition the government for redress of grievances. We have memorialized this universal right in all our fundamental laws from the Malolos Constitution to the 1987 Constitution. We have iterated and reiterated in our rulings that freedom of speech is a preferred right, the matrix of other important rights of our people. Undeniably, freedom of speech enervates the essence of the democratic creed of think and let think. For this reason, the Constitution encourages speech even if it protects the speechless. It is thus evident that the right of the Pedrosas to solicit signatures to

start a people's initiative to amend the Constitution does not depend on any law, much less on R.A. 6735 or COMELEC Resolution No. 2300. No law, no Constitution can chain the people to an undesirable status quo. To be sure, there are no irrepealable laws just as there are no irrepealable Constitutions. Change is the predicate of progress and we should not fear change. Mankind has long recognized the truism that the only constant in life is change and so should the majority. IV In a stream of cases, this Court has rhapsodized people power as expanded in the 1987 Constitution. On October 5, 1993, we observed that people's might is no longer a myth but an article of faith in our Constitution. 41 On September 30, 1994, we postulated that people power can be trusted to check excesses of government and that any effort to trivialize the effectiveness of people's initiatives ought to be rejected. 42 On September 26, 1996, we pledged that ". . . this Court as a matter of policy and doctrine will exert every effort to nurture, protect and promote their legitimate exercise." 43 Just a few days ago, or on March 11, 1997, by a unanimous decision, 44 we allowed a recall election in Caloocan City involving the mayor and ordered that he submits his right to continue in office to the judgment of the tribunal of the people. Thus far, we have succeeded in transforming people power from an opaque abstraction to a robust reality. The Constitution calls us to encourage people empowerment to blossom in full. The Court cannot halt any and all signature campaigns to amend the Constitution without setting back the flowering of people empowerment. More important, the Court cannot seal the lips of people who are pro-change but not those who are anti-change without concerting the debate on charter change into a sterile talkaton. Democracy is enlivened by a dialogue and not by a monologue for in a democracy nobody can claim any infallibility. Melo and Mendoza, JJ., concur.

VITUG, J., concurring and dissenting: The COMELEC should have dismissed, outrightly, the Delfin Petition.

It does seem to me that there is no real exigency on the part of the Court to engross, let alone to commit, itself on all the issues raised and debated upon by the parties. What is essential at this time would only be to resolve whether or not the petition filed with the COMELEC, signed by Atty. Jesus S. Delfin in his capacity as a "founding member of the Movement for People's Initiative" and seeking through a people initiative certain modifications on the 1987 Constitution, can properly be regarded and given its due course. The Constitution, relative to any proposed amendment under this method, is explicit. Section 2, Article XVII, thereof 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. The Delfin petition is thus utterly deficient. Instead of complying with the constitutional imperatives, the petition would rather have much of its burden passed on, in effect, to the COMELEC. The petition would require COMELEC to schedule "signature gathering all over the country," to cause the necessary publication of the petition "in newspapers of general and local circulation," and to instruct "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. I submit, even then, that the TRO earlier issued by the Court which, consequentially, is made permanent under the ponencia should be held to cover only the Delfin petition and must not be so understood as having intended or contemplated to embrace the signature drive of the Pedrosas. The grant of such a right is clearly implicit in the constitutional mandate on people initiative. The distinct greatness of a democratic society is that those who reign

are the governed themselves. The postulate is no longer lightly taken as just a perceived myth but a veritable reality. The past has taught us that the vitality of government lies not so much in the strength of those who lead as in the consent of those who are led. The role of free speech is pivotal but it can only have its true meaning if it comes with the correlative end of being heard. Pending a petition for a people's initiative that is sufficient in form and substance, it behooves the Court, I most respectfully submit, to yet refrain from resolving the question of whether or not Republic Act No. 6735 has effectively and sufficiently implemented the Constitutional provision on right of the people to directly propose constitutional amendments. Any opinion or view formulated by the Court at this point would at best be only a non-binding, albeit possibly persuasive, obiter dictum. I vote for granting the instant petition before the Court and for clarifying that the TRO earlier issued by the Court did not prescribe the exercise by the Pedrosas of their right to campaign for constitutional amendments.

FRANCISCO, J., dissenting and concurring: There is no question that my esteemed colleague Mr. Justice Davide has prepared a scholarly and well-written ponencia. Nonetheless, I cannot fully subscribe to his view that R. A. No. 6735 is inadequate to cover the system of initiative on amendments to the Constitution. To begin with, sovereignty under the constitution, resides in the people and all government authority emanates from them. 1 Unlike our previous constitutions, the present 1987 Constitution has given more significance to this declaration of principle for the people are now vested with power not only to propose, enact or reject any act or law passed by Congress or by the local legislative body, but to propose amendments to the constitution as well. 2 To implement these constitutional edicts, Congress in 1989 enacted Republic Act No. 6735, otherwise known as "The initiative and Referendum Act". This law, to my mind, amply covers an initiative on the constitution. The contrary view maintained by petitioners is based principally on

the alleged lack of sub-title in the law on initiative to amend the constitution and on their allegation that:
Republic Act No. 6735 provides for the effectivity of the law after publication in print media. [And] [t]his indicates that Republic Act No. 6735 covers only laws and not constitutional amendments, because constitutional amendments take effect upon ratification not after publication. 3

which allegation manifests petitioners' selective interpretation of the law, for under Section 9 of Republic Act No. 6735 on the Effectivity of Initiative or Referendum Proposition paragraph (b) thereof is clear in providing that: The proposition in an initiative on the constitution approved by a majority of the votes cast in the plebiscite shall become effective as to the day of the plebiscite. It is a rule that every part of the statute must be interpreted with reference the context, i.e., that every part of the statute must be construed together with the other parts and kept subservient to the general intent of the whole enactment. 4 Thus, the provisions of Republic Act No. 6735 may not be interpreted in isolation. The legislative intent behind every law is to be extracted from the statute as a whole. 5 In its definition of terms, Republic Act No. 6735 defines initiative as "the power of the people to propose amendments to the constitution or to propose and enact legislations through an election called for the purpose". 6 The same section, in enumerating the three systems of initiative, included an "initiative on the constitution which refers to a petition proposing amendments to the constitution" 7 Paragraph (e) again of Section 3 defines "plebiscite" as "the electoral process by which an initiative on the constitution is approved or rejected by the people" And as to the material requirements for an initiative on the Constitution, Section 5(b) distinctly enumerates the following: A petition for an initiative on the 1987 Constitution must have at least twelve per centum (12%) of the total number of the registered voters as signatories, of which every legislative district must be represented by at least three per centum (3%) of the registered voters therein.

Initiative on the constitution may be exercised only after five (5) years from the ratification of the 1987 Constitution and only once every five years thereafter. These provisions were inserted, on purpose, by Congress the intent being to provide for the implementation of the right to propose an amendment to the Constitution by way of initiative. "A legal provision", the Court has previously said, "must not be construed as to be a useless surplusage, and accordingly, meaningless, in the sense of adding nothing to the law or having no effect whatsoever thereon". 8 That this is the legislative intent is further shown by the deliberations in Congress, thus: . . . More significantly, in the course of the consideration of the Conference Committee Report on the disagreeing provisions of Senate Bill No. 17 and House Bill No. 21505, it was noted: 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 and 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 an 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. MR. ALBANO. And this initiative and referendum is in consonance with the provision of the Constitution 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." (Id. [Journal and Record of the House of Representatives], Vol. VIII, 8 June 1989, p. 960; quoted in Garcia v. Comelec, 237 SCRA 279, 292-293 [1994]; emphasis supplied)
. . . The Senate version of the Bill may not have comprehended initiatives on the Constitution. When consolidated, though, with the House version of the Bill and as approved and enacted into law, the proposal included initiative on both the Constitution and ordinary laws. 9

Clearly then, Republic Act No. 6735 covers an initiative on the constitution. Any other construction as what petitioners foist upon the Court constitute a betrayal of the intent and spirit behind the enactment. At any rate, I agree with the ponencia that the Commission on Elections, at present, cannot take any action (such as those contained in the Commission's orders dated December 6, 9, and 12, 1996 [Annexes B, C and B-1]) indicative of its having already assumed jurisdiction over private respondents' petition. This is so because from the tenor of Section 5 (b) of R.A. No. 6735 it would appear that proof of procurement of the required percentage of registered voters at the time the petition for initiative is filed, is a jurisdictional requirement. Thus: A petition for an initiative on the 1987 Constitution must have at least twelve per centum (12%) of the total number of registered voters as signatories, of which every legislative district must be represented by at least three per centum (3%) of the registered voters therein. Initiative on the Constitution may be exercised only after five (5) years from the ratification of the 1987 Constitution and only once every five (5) years thereafter. Here private respondents' petition is unaccompanied by the required signatures. This defect notwithstanding, it is without prejudice to the refiling of their petition once compliance with the required percentage is satisfactorily shown by private respondents. In the absence, therefore, of an appropriate petition before the Commission on Elections, any determination of whether private respondents' proposal constitutes an amendment or revision is premature. ACCORDINGLY, I take exception to the conclusion reached in the ponencia that R.A. No. 6735 is an "inadequate" legislation to cover a people's initiative to propose amendments to the Constitution. I, however, register my concurrence with the dismissal, in the meantime, of private respondents' petition for initiative before public respondent Commission on Elections until the same be supported by proof of strict compliance with Section 5 (b) of R.A. No. 6735.

Melo and Mendoza, JJ., concur.

PANGANIBAN, J., concurring and dissenting: Our distinguished colleague, Mr. Justice Hilario G. Davide Jr., writing for the majority, holds that: (1) The Comelec acted without jurisdiction or with grave abuse of discretion in entertaining the "initiatory" Delfin Petition. (2) While the Constitution allows amendments to "be directly proposed by the people through initiative," there is no implementing law for the purpose. RA 6735 is "incomplete, inadequate, or wanting in essential terms and conditions insofar as initiative on amendments to the Constitution is concerned." (3) Comelec Resolution No. 2330, "insofar as it prescribes rules and regulations on the conduct of initiative on amendments to the Constitution, is void." I concur with the first item above. Until and unless an initiatory petition can show the required number of signatures in this case, 12% of all the registered voters in the Philippines with at least 3% in every legislative district no public funds may be spent and no government resources may be used in an initiative to amend the Constitution. Verily, the Comelec cannot even entertain any petition absent such signatures. However, I dissent most respectfully from the majority's two other rulings. Let me explain. Under the above restrictive holdings espoused by the Court's majority, the Constitution cannot be amended at all through a people's initiative. Not by Delfin, not by Pirma, not by anyone, not even by all the voters of the country acting together. This decision will effectively but unnecessarily curtail, nullify, abrogate and render inutile the people's right to change the basic law. At the very least, the majority holds the right hostage to congressional discretion on whether to pass a new law to implement it, when there is already one existing at present. This right to amend through initiative, it bears stressing, is guaranteed by Section 2, Article XVII of the Constitution,

as follows: 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. With all due respect, I find the majority's position all too sweeping and all too extremist. It is equivalent to burning the whole house to exterminate the rats, and to killing the patient to relieve him of pain. What Citizen Delfin wants the Comelec to do we should reject. But we should not thereby preempt any future effort to exercise the right of initiative correctly and judiciously. The fact that the Delfin Petition proposes a misuse of initiative does not justify a ban against its proper use. Indeed, there is a right way to do the right thing at the right time and for the right reason. Taken Together and Interpreted Properly, the Constitution, RA 6735 and Comelec Resolution 2300 Are Sufficient to Implement Constitutional Initiatives While RA 6735 may not be a perfect law, it was as the majority openly concedes intended by the legislature to cover and, I respectfully submit, it contains enough provisions to effectuate an initiative on the Constitution. 1 I completely agree with the inspired and inspiring opinions of Mr. Justice Reynato S. Puno and Mr. Justice Ricardo J. Francisco that RA 6735, the Roco law on initiative, sufficiently implements the right of the people to initiate amendments to the Constitution. Such views, which I shall no longer repeat nor elaborate on, are thoroughly consistent with this Court's unanimous en banc rulings in Subic Bay Metropolitan Authority vs. Commission on Elections, 2 that "provisions for initiative . . . are (to be) liberally construed to effectuate their purposes, to facilitate and not hamper the exercise by the voters of the rights granted thereby"; and in Garcia vs. Comelec, 3 that any "effort to trivialize the effectiveness of people's initiatives ought to be rejected."

No law can completely and absolutely cover all administrative details. In recognition of this, RA 6735 wisely empowered 4 the Commission on Election "to promulgate such rules and regulations as may be necessary to carry out the purposes of this Act." And pursuant thereto, the Comelec issued its Resolution 2300 on 16 January 1991. Such Resolution, by its very words, was promulgated "to govern the conduct of initiative on the Constitution and initiative and referendum on national and local laws," not by the incumbent Commission on Elections but by one then composed of Acting Chairperson Haydee B. Yorac, Comms. Alfredo E. Abueg Jr., Leopoldo L. Africa, Andres R. Flores, Dario C. Rama and Magdara B. Dimaampao. All of these Commissioners who signed Resolution 2300 have retired from the Commission, and thus we cannot ascribe any vile motive unto them, other than an honest, sincere and exemplary effort to give life to a cherished right of our people. The majority argues that while Resolution 2300 is valid in regard to national laws and local legislations, it is void in reference to constitutional amendments. There is no basis for such differentiation. The source of and authority for the Resolution is the same law, RA 6735. I respectfully submit that taken together and interpreted properly and liberally, the Constitution (particularly Art. XVII, Sec. 2), R4 6735 and Comelec Resolution 2300 provide more than sufficient authority to implement, effectuate and realize our people's power to amend the Constitution. Petitioner Delfin and the Pedrosa Spouses Should Not Be Muzzled I am glad the majority decided to heed our plea to lift the temporary restraining order issued by this Court on 18 December 1996 insofar as it prohibited Petitioner Delfin and the Spouses Pedrosa from exercising their right of initiative. In fact, I believe that such restraining order as against private respondents should not have been issued, in the first place. While I agree that the Comelec should be stopped from using public funds and government resources to help them gather signatures, I firmly believe that this Court has no power to restrain them from exercising their right of initiative. The right to propose amendments to the Constitution is really a species of the

right of free speech and free assembly. And certainly, it would be tyrannical and despotic to stop anyone from speaking freely and persuading others to conform to his/her beliefs. As the eminent Voltaire once said, "I may disagree with what you say, but I will defend to the death your right to say it." After all, freedom is not really for the thought we agree with, but as Justice Holmes wrote, "freedom for the thought that we hate." 5 Epilogue By way of epilogue, let me stress the guiding tenet of my Separate Opinion. Initiative, like referendum and recall, is a new and treasured feature of the Filipino constitutional system. All three are institutionalized legacies of the world-admired EDSA people power. Like elections and plebiscites, they are hallowed expressions of popular sovereignty. They are sacred democratic rights of our people to be used as their final weapons against political excesses, opportunism, inaction, oppression and misgovernance; as well as their reserved instruments to exact transparency, accountability and faithfulness from their chosen leaders. While on the one hand, their misuse and abuse must be resolutely struck down, on the other, their legitimate exercise should be carefully nurtured and zealously protected. WHEREFORE, I vote to GRANT the petition of Sen. Miriam D. Santiago et al. and to DIRECT Respondent Commission on Elections to DISMISS the Delfin Petition on the ground of prematurity, but not on the other grounds relied upon by the majority. I also vote to LIFT the temporary restraining order issued on 18 December 1996 insofar as it prohibits Jesus Delfin, Alberto Pedrosa and Carmen Pedrosa from exercising their right to free speech in proposing amendments to the Constitution. Melo and Mendoza, JJ., concur. Footnotes 1 Commissioner Blas Ople. 2 Commissioner Jose Suarez.

3 I Record of the Constitutional Commission, 371, 378. 4 Section 1, Article XV of the 1935 Constitution and Section 1(1), Article XVI of the 1973 Constitution. 5 Annex "A" of Petition, Rollo, 15. 6 Later identified as the People's Initiative for Reforms, Modernization and Action, or PIRMA for brevity. 7 These sections read: Sec. 4. The term of office of the Senators shall be six years and shall commence, unless otherwise provided by law, at noon on the thirtieth day of June next following their election. No Senator shall serve for more than two consecutive terms. Voluntary renunciation of the office for any length of time shall not be considered as an interruption in the continuity of his service for the full term for which he was elected. xxx xxx xxx Sec. 7. The Members of the House of Representatives shall be elected for a term of three years which shall begin, unless otherwise provided by law, at noon on the thirtieth day of June next following their election. No Member of the House of Representatives shall serve for more than three consecutive terms. Voluntary renunciation of the office for any length of time shall not be considered as an interruption in the continuity of his service for the full term for which he was elected. 8 The section reads: Sec. 4. The President and the Vice-President shall be elected by direct vote of the people for a term of six years which shall begin at noon on the thirtieth day of June next following the day of the election and shall end at noon of the same date six years thereafter. The President shall not be eligible for any reelection. No person who has succeeded as President and has served as such for more than four

years shall be qualified for election to the same office at any time. No Vice-President shall serve for more than two successive terms. Voluntary renunciation of the office for any length or time shall not be considered as an interruption in the continuity of the service for the full term for which he was elected. 9 The section reads: Sec. 8. The term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years and no such official shall serve for more than three consecutive terms. Voluntary renunciation of the office for any length of time shall not be considered as an interruption in the continuity of his service for the full term for which he was elected. 10 Rollo, 19. 11 Annex "B" of Petition, Rollo, 25. 12 Order of 12 December 1996, Annex "B-1" of Petition, Rollo, 27. 13 Id. 14 Citing Araneta v. Dinglasan, 84 Phil. 368 [1949]; Sanidad v. COMELEC, 73 SCRA 333 [1976]. 15 Rollo, 68. 16 Rollo, 100. 17 Rollo, 130. 18 A Member of the 1986 Constitutional Commission. 19 Section 26, Article II, Constitution. 20 Citing Commissioner Ople of the Constitutional Commission, I Record of the Constitutional Commission, 405. 21 Rollo, 239.

22 Rollo, 304. 23 Rollo, 568. 24 These were submitted on the following dates: (a) Private respondent Delfin 31 January 1997 (Rollo, 429); (b) Private respondents Alberto and Carmen Pedrosa 10 February 1997 (Id., 446); (c) Petitioners 12 February 1997 (Id., 585); (d) IBP 12 February 1997 (Id., 476); (e) Senator Roco 12 February 1997 (Id., 606); (f) DIK and MABINI 12 February 1997 (Id., 465); (g) COMELEC 12 February 1997 (Id., 489); (h) LABAN 13 February 1997 (Id., 553). 25 Rollo, 594. 26 Annex "D" of Roco's Motion for Intervention in this case, Rollo, 184. 27 Rollo, 28. 28 232 SCRA 110, 134 [1994]. 29 II The Constitution of the Republic of the Philippines, A Commentary 571 [1988]. 30 I Record of the Constitutional Commission 370-371. 31 Id., 371. 32 Id., 386. 33 Id., 391-392. (Emphasis supplied).

34 Id., 386. 35 Id., 392. 36 Id., 398-399. 37 Id., 399. Emphasis supplied. 38 Id., 402-403. 39 Id., 401-402. 40 Id., 410. 41 Id., 412. 42 II Record of the Constitutional Commission 559-560. 43 The Congress originally appeared as The National Assembly. The change came about as a logical consequence of the amended Committee Report No. 22 of the Committee on Legislative which changed The National Assembly to "The Congress of the Philippines" in view of the approval of the amendment to adopt the bicameral system (II Record of the Constitutional Commission 102-105). The proposed new Article on the Legislative Department was, after various amendments approved on Second and Third Readings on 9 October 1986 (Id., 702-703) 44 V Record of the Constitutional Commission 806. 45 See footnote No. 42. 46 As Stated by Commissioner Bernas in his interpellation of Commissioner Suarez, footnote 28. 47 Entitled "Initiative and Referendum Act of 1987," introduced by then Congressmen Raul Roco, Raul del Mar and Narciso Monfort. 48 Entitled "An Act Implementing the Constitutional Provisions on Initiative and Referendum and for Other Purposes," introduced by Congressmen Salvador Escudero.

49 Entitled "An Act Providing for a System of Initiative and Referendum, and the Exceptions Therefrom, Whereby People in Local Government Units Can Directly Propose and Enact Resolutions and Ordinances or Approve or Reject Any Ordinance or Resolution Passed By the Local Legislative Body," introduced by Senators Gonzales, Romulo, Pimentel, Jr., and Lina, Jr. 50 IV Record of the Senate, No. 143, pp. 1509-1510. 51 VIII Journal and Record of the House of Representatives, 957961. 52 That section reads: Sec. 1. Statement of Policy. The power of the people under a system of initiative and referendum to directly propose and enact resolutions and ordinances or approve or reject, in whole or in part, any ordinance or resolution passed by any local legislative body upon compliance with the requirements of this Act is hereby affirmed, recognized and guaranteed. 53 It must be pointed out that Senate Bill No. 17 and House Bill No. 21505, as approved on Third Reading, did not contain any subtitles. 54 If some confusion attended the preparation of the subtitles resulting in the leaving out of the more important and paramount system of initiative on amendments to the Constitution, it was because there was in the Bicameral Conference Committee an initial agreement for the Senate panel to draft that portion on local initiative and for the House of Representatives panel to draft that portion covering national initiative and initiative on the Constitution; eventually, however, the Members thereof agreed to leave the drafting of the consolidated bill to their staff. Thus: CHAIRMAN GONZALES. . . . All right, and we can agree, we can agree. So ang mangyayari dito, ang magiging basic nito, let us not discuss anymore kung alin ang magiging basic bill, ano, whether it is the Senate Bill or whether it is the House Bill. Logically it should be ours sapagkat una iyong sa amin, eh. It is one of the first bills approved by the Senate kaya ang

number niyan, makikita mo, 17, eh. Huwag na nating pag-usapan. Now, if you insist, really iyong features ng national at saka constitutional, okay. Pero gagawin na nating consolidation of both bills. (TSN, proceedings of the Bicameral Conference Committee on 6 June 1989 submitted by Nora, R, pp. 1-4 1-5). xxx xxx xxx HON. ROCO. So how do we proceed from this? The staff will consolidate. HON. GONZALES. Gumawa lang ng isang draft. Submit it to the Chairman, kami na ang bahalang magconsult sa aming mga members na kung okay, HON. ROCO. Within today? HON. GONZALES. Within today and early tomorrow. Hanggang Huwebes lang tayo, eh. HON. AQUINO. Kinakailangang palusutin natin ito. Kung mabigyan tayo ng kopya bukas and you are not objecting naman kayo naman ganoon din. HON. ROCO. Editing na lang because on a physical consolidation nga ito, eh. Yung mga provisions naman namin wala sa inyo. (TSN, proceedings of Bicameral Conference Committee of 6 June 1989, submitted by E.S. Bongon, pp. III-4 III-5). 55 Sec. 5(a & c), Sec. 8, Section 9(a). 56 Sections 13, 14, 15 and 16. 57 It would thus appear that the Senate's "cautious approach" in the implementation of the system of initiative as a mode of proposing amendments to the Constitution, as expressed by Senator Gonzales in the course of his sponsorship of Senate Bill No. 17 in the Bicameral Conference Committee meeting and in his sponsorship of the Committee's Report, might have insidiously haunted the preparation of the consolidated version of Senate Bill No. 17 and House Bill No. 21505. In the first he said:

Senate Bill No. 17 recognizes the initiatives and referendum are recent innovations in our political system. And recognizing that, it has adopted a cautious approach by: first, allowing them only when the local legislative body had refused to act; second, not more frequently than once a year; and, third, limiting them to the national level. (I Record of the Senate, No. 33, p. 871). xxx xxx xxx First, as I have said Mr. President, and I am saying for the nth time, that we are introducing a novel and new system in politics. We have to adopt first a cautious approach. We feel it is prudent and wise at this point in time, to limit those powers that may be the subject of initiatives and referendum to those exercisable or within the authority of the local government units. (Id., p. 880). In the second he stated: But at any rate, as I have said, because this is new in our political system, the Senate decided on a more cautious approach and limiting it only to the local general units. (TSN of the proceedings of the Bicameral Conference Committee on 6 June 1989, submitted by stenographer Nora R, pp. 1-2 to 1-3). In the last he declared: The initiatives and referendum are new tools of democracy; therefore, we have decided to be cautious in our approach. Hence, 1) we limited initiative and referendum to the local government units; 2) that initiative can only be exercised if the local legislative cannot be exercised more frequently that once every year. (IV Records of the Senate, No. 143, pp. 15-9-1510). 58 Section 20, RA. No. 6735. 59 People v. Rosenthal, 68 Phil. 328 [1939]; ISAGANI A. CRUZ, Philippine Political Law 86 [1996] (hereafter CRUZ). 60 People v. Vera, 65 Phil. 56 [1937]; CRUZ, supra, 87. 61 Pelaez v. Auditor General, 122 Phil. 965, 974 [1965].

62 Edu v. Ericta, 35 SCRA 481,497 [1970]. 63 Sec. 7, COMELEC Resolution No. 2300. 64 Sec. 28, id. 65 Sec. 29, id. 66 Sec. 30, id. PUNO, J., concurring and dissenting:: 1 Agpalo, Statutory Construction, 1986 ed., p. 38, citing, inter alia, US v. Tamparong 31 Phil. 321; Hernani v. Export Control Committee, 100 Phil. 973; People v. Purisima, 86 SCRA 542. 2 Ibid, citing Torres v. Limjap, 56 Phil. 141. 3 Prepared and sponsored by the House Committee on Suffrage and Electoral Reforms on the basis of H.B. No. 497 introduced by Congressmen Raul Roco, Raul del Mar and Narciso Monfort and H.B. No. 988 introduced by Congressman Salvador Escudero. 4 Introduced by Senators Neptali Gonzales, Alberto Romulo, Aquilino Pimentel, Jr., and Jose Lina, Jr. 5 It was entitled "An Act Providing a System of Initiative and Referendum and Appropriating Funds therefor. 6 Journal No. 85, February 14, 1989, p. 121. 7 Ibid. 8 The Senate Committee was chaired by Senator Neptali Gonzales with Senators Agapito Aquino and John Osmena as members. The House Committee was chaired by Congressman Magdaleno M. Palacol with Congressmen Raul Roco, Salvador H. Escudero III and Joaquin Chipeco, Jr., as members. 9 Held at Constancia Room, Ciudad Fernandina, Greenhills, San Juan, Metro Manila.

10 See Compliance submitted by intervenor Roco dated January 28, 1997. 11 Record No. 137, June 8, 1989, pp. 960-961. 12 Agpalo, op cit., p. 38 citing US v. Toribio, 15 Phil 7 (1910); US v. Navarro, 19 Phil 134 (1911). 13 Francisco, Statutory Construction, 3rd ed., (1968) pp. 145-146 citing Crawford, Statutory Construction, pp. 337-338. 14 Black, Handbook on the Construction and Interpretation of the Laws (2nd ed), pp. 258-259. See also Commissioner of Custom v. Relunia, 105 Phil 875 (1959); People v. Yabut, 58 Phil 499 (1933). 15 Alcantara, Statutes, 1990 ed., p. 26 citing Dwarris on Statutes, p. 237. 16 Entitled In re: Rules and Regulations Governing the Conduct of Initiative on the Constitution, and Initiative and Referendum on National and Local Laws and promulgated on January 16, 1991 by the COMELEC with Commissioner Haydee B. Yorac as Acting Chairperson and Commissioners Alfredo E. Abueg, Jr., Leopoldo L. Africa, Andres R. Flores, Dario C. Rama and Magdara B. Dimaampao. 17 15 SCRA 569. 18 Sec. 5(b), R.A. No. 6735. 19 Sec. 5(b), R.A. No. 6735. 20 Sec. 7, R.A. No. 6735. 21 Sec. 9(b), R.A. No. 6735. 22 Sec. 8, R.A. No. 6735 in relation to Sec. 4, Art. XVII of the Constitution. 23 Sec. 9(b), R.A. No. 6735. 24 Sec. 10, R.A. No. 6735.

25 Cruz, Philippine Political Law, 1995 ed., p. 98. 26 See July 8, 1986 Debates of the Concom, p. 399. 27 1995 ed., p. 1207. 28 Cruz, op cit., p. 99. 29 320 US 99. 30 Balbuena v. Secretary of Education, 110 Phil 150 (1910). 31 People v. Rosenthal, 68 Phil 328 (1939). 32 Calalang v. Williams, 70 Phil 726 (1940). 33 Rubi v. Provincial Board of Mindoro, 39 Phil 669 (1919). 34 International Hardwood v. Pangil Federation of Labor, 70 Phil 602 (1940). 35 Phil. Association of Colleges and Universities v. Secretary of Education, 97 Phil 806 (1955). 36 Edu v. Ericta, 35 SCRA 481 (1990); Agustin v. Edu, 88 SCRA 195 (1979). 37 Pepsi Cola Bottling Co. vs. Municipality of Tanawan Leyte, 69 SCRA 460 (1976). 38 Maceda v. Macaraig, 197 SCRA 771 (1991). 39 Osmena v. Orbos, 220 SCRA 703 (1993). 40 Chiongbian v. Orbos, 245 SCRA 253 (1995). 41 Garcia v. COMELEC, et al., G.R. No. 111511, October 5, 1993. 42 Garcia, et al. v. COMELEC, et al., G.R. No. 111230, September 30, 1994. 43 Subic Bay Metropolitan Authority v. COMELEC, et al., G.R. No.

125416, September 26, 1996. 44 Malonzo vs. COMELEC, et al., G.R. No. 127066, March 11, 1997. FRANCISCO, J., concurring and dissenting: 1 Article II, Section 1, 1987 Constitution. 2 Article VI, Section 32, and Article XVII, Section 2, 1987 Constitution. 3 Petition, p. 5. 4 Paras v. Commission on Elections, G.R. No. 123619, December 4, 1996. 5 Tamayo v. Gsell, 35 Phil. 953, 980. 6 Section 3 (a), Republic Act No 6735. 7 Section 3(a) [a.1], Republic Act No 6735. 8 Uytengsu v. Republic, 95 Phil. 890, 893 9 Petition in Intervention filed by Sen. Raul Roco, pp. 15-16. PANGANIBAN, J., concurring and dissenting: 1 Apart from its text on "national initiative" which could be used by analogy, RA 6735 contains sufficient provisions covering initiative on the Constitution, which are clear enough and speak for themselves, like: Sec. 2. Statement of 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 resolution passed by any legislative body upon compliance with the requirements of this Act is hereby affirmed, recognized and guaranteed. 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 legislation's 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 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. xxx xxx xxx (e) "Plebiscite" is the electoral process by which an initiative on the Constitution is approved or rejected by the people (f) "Petition" is the written instrument containing the proposition and the required number of signatories. It shall be in a form to be determined by and submitted to the Commission on Elections, hereinafter referred to as the Commission xxx xxx xxx Sec. 5 Requirements. . . . (b) A petition for an initiative on the 1987 Constitution must have at least twelve per centum (12 %) of the total number of registered voters as signatories, of which every legislative district must be represented by at least three per centum (3%) of the registered voters therein. Initiative on the Constitution may be exercised only after five (5) years from the ratification of the 1987 Constitution and only once every five (5) years thereafter. Sec. 9. Effectivity of Initiative or Referendum Proposition. xxx xxx xxx

(b) The proposition in an initiative on the Constitution approved by a majority of the votes cast in the plebiscite shall become effective as to the day of the plebiscite. xxx xxx xxx (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; c.3 the reason or reasons therefor; c.4 that it is not one of the exceptions provided herein; c.5 signatures of the petitioners or registered voters; and c.6 an abstract or summary proposition in not more than one hundred (100) words which shall be legibly written or printed at the top of every page of the petition. xxx xxx xxx Sec. 19. Applicability of the Omnibus Election Code. The Omnibus Election Code and other election laws, not inconsistent with the provisions of this Act, shall apply to all initiatives and referenda. Sec. 20. Rules and Regulations. The Commission is hereby empowered to promulgate such rules and regulations as may be necessary to carry out the purposes of this Act. (Emphasis supplied) 2 G.R. No. 125416, September 26, 1996. 3 237 SCRA 279, 282, September 30, 1994. 4 Sec. 20, R.A. 6735. 5 United States vs. Rosika Schwimmer, 279 U.S. 644, 655 (1929).

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 118295 May 2, 1997 WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as members of the Philippine Senate and as taxpayers; GREGORIO ANDOLANA and JOKER ARROYO as members of the House of Representatives and as taxpayers; NICANOR P. PERLAS and HORACIO R. MORALES, both as taxpayers; CIVIL LIBERTIES UNION, NATIONAL ECONOMIC PROTECTIONISM ASSOCIATION, CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES, LIKAS-KAYANG KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL RECONSTRUCTION MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG PILIPINAS, INC., and PHILIPPINE PEASANT INSTITUTE, in representation of various taxpayers and as non-governmental organizations, petitioners, vs. EDGARDO ANGARA, ALBERTO ROMULO, LETICIA RAMOSSHAHANI, HEHERSON ALVAREZ, AGAPITO AQUINO, RODOLFO BIAZON, NEPTALI GONZALES, ERNESTO HERRERA, JOSE LINA, GLORIA. MACAPAGAL-ARROYO, ORLANDO MERCADO, BLAS OPLE, JOHN OSMEA, SANTANINA RASUL, RAMON REVILLA, RAUL ROCO, FRANCISCO TATAD and FREDDIE WEBB, in their respective capacities as members of the Philippine Senate who concurred in the ratification by the President of the Philippines of the Agreement Establishing the World Trade Organization; SALVADOR ENRIQUEZ, in his capacity as Secretary of Budget and Management; CARIDAD VALDEHUESA, in her capacity as National Treasurer; RIZALINO NAVARRO, in his capacity as Secretary of Trade and Industry; ROBERTO SEBASTIAN, in his capacity as Secretary of Agriculture; ROBERTO DE OCAMPO, in his capacity as Secretary of Finance; ROBERTO ROMULO, in his capacity as Secretary of Foreign Affairs; and TEOFISTO T. GUINGONA, in his capacity as Executive Secretary, respondents.

PANGANIBAN, J.: The emergence on January 1, 1995 of the World Trade Organization, abetted by the membership thereto of the vast majority of countries has revolutionized international business and economic relations amongst states. It has irreversibly propelled the world towards trade liberalization and economic globalization. Liberalization, globalization, deregulation and privatization, the third-millennium buzz words, are ushering in a new borderless world of business by sweeping away as mere historical relics the heretofore traditional modes of promoting and protecting national economies like tariffs, export subsidies, import quotas, quantitative restrictions, tax exemptions and currency controls. Finding market niches and becoming the best in specific industries in a market-driven and export-oriented global scenario are replacing age-old "beggar-thy-neighbor" policies that unilaterally protect weak and inefficient domestic producers of goods and services. In the words of Peter Drucker, the well-known management guru, "Increased participation in the world economy has become the key to domestic economic growth and prosperity." Brief Historical Background To hasten worldwide recovery from the devastation wrought by the Second World War, plans for the establishment of three multilateral institutions inspired by that grand political body, the United Nations were discussed at Dumbarton Oaks and Bretton Woods. The first was the World Bank (WB) which was to address the rehabilitation and reconstruction of war-ravaged and later developing countries; the second, the International Monetary Fund (IMF) which was to deal with currency problems; and the third, the International Trade Organization (ITO), which was to foster order and predictability in world trade and to minimize unilateral protectionist policies that invite challenge, even retaliation, from other states. However, for a variety of reasons, including its non-ratification by the United States, the ITO, unlike the IMF and WB, never took off. What remained was only GATT the General Agreement on Tariffs and Trade. GATT was a collection of treaties governing access to the economies of treaty adherents with no institutionalized body administering the agreements or dependable system of dispute settlement.

After half a century and several dizzying rounds of negotiations, principally the Kennedy Round, the Tokyo Round and the Uruguay Round, the world finally gave birth to that administering body the World Trade Organization with the signing of the "Final Act" in Marrakesh, Morocco and the ratification of the WTO Agreement by its members. 1 Like many other developing countries, the Philippines joined WTO as a founding member with the goal, as articulated by President Fidel V. Ramos in two letters to the Senate (infra), of improving "Philippine access to foreign markets, especially its major trading partners, through the reduction of tariffs on its exports, particularly agricultural and industrial products." The President also saw in the WTO the opening of "new opportunities for the services sector . . . , (the reduction of) costs and uncertainty associated with exporting . . . , and (the attraction of) more investments into the country." Although the Chief Executive did not expressly mention it in his letter, the Philippines and this is of special interest to the legal profession will benefit from the WTO system of dispute settlement by judicial adjudication through the independent WTO settlement bodies called (1) Dispute Settlement Panels and (2) Appellate Tribunal. Heretofore, trade disputes were settled mainly through negotiations where solutions were arrived at frequently on the basis of relative bargaining strengths, and where naturally, weak and underdeveloped countries were at a disadvantage. The Petition in Brief Arguing mainly (1) that the WTO requires the Philippines "to place nationals and products of member-countries on the same footing as Filipinos and local products" and (2) that the WTO "intrudes, limits and/or impairs" the constitutional powers of both Congress and the Supreme Court, the instant petition before this Court assails the WTO Agreement for violating the mandate of the 1987 Constitution to "develop a self-reliant and independent national economy effectively controlled by Filipinos . . . (to) give preference to qualified Filipinos (and to) promote the preferential use of Filipino labor, domestic materials and locally produced goods." Simply stated, does the Philippine Constitution prohibit Philippine

participation in worldwide trade liberalization and economic globalization? Does it proscribe Philippine integration into a global economy that is liberalized, deregulated and privatized? These are the main questions raised in this petition for certiorari, prohibition and mandamus under Rule 65 of the Rules of Court praying (1) for the nullification, on constitutional grounds, of the concurrence of the Philippine Senate in the ratification by the President of the Philippines of the Agreement Establishing the World Trade Organization (WTO Agreement, for brevity) and (2) for the prohibition of its implementation and enforcement through the release and utilization of public funds, the assignment of public officials and employees, as well as the use of government properties and resources by respondent-heads of various executive offices concerned therewith. This concurrence is embodied in Senate Resolution No. 97, dated December 14, 1994. The Facts On April 15, 1994, Respondent Rizalino Navarro, then Secretary of The Department of Trade and Industry (Secretary Navarro, for brevity), representing the Government of the Republic of the Philippines, signed in Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay Round of Multilateral Negotiations (Final Act, for brevity). By signing the Final Act, 2 Secretary Navarro on behalf of the Republic of the Philippines, agreed: (a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities, with a view to seeking approval of the Agreement in accordance with their procedures; and (b) to adopt the Ministerial Declarations and Decisions. On August 12, 1994, the members of the Philippine Senate received a letter dated August 11, 1994 from the President of the Philippines, 3 stating among others that "the Uruguay Round Final Act is hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the Constitution."

On August 13, 1994, the members of the Philippine Senate received another letter from the President of the Philippines 4 likewise dated August 11, 1994, which stated among others that "the Uruguay Round Final Act, the Agreement Establishing the World Trade Organization, the Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial Services are hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the Constitution." On December 9, 1994, the President of the Philippines certified the necessity of the immediate adoption of P.S. 1083, a resolution entitled "Concurring in the Ratification of the Agreement Establishing the World Trade Organization." 5 On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which "Resolved, as it is hereby resolved, that the Senate concur, as it hereby concurs, in the ratification by the President of the Philippines of the Agreement Establishing the World Trade Organization." 6 The text of the WTO Agreement is written on pages 137 et seq. of Volume I of the 36-volume Uruguay Round of Multilateral Trade Negotiations and includes various agreements and associated legal instruments (identified in the said Agreement as Annexes 1, 2 and 3 thereto and collectively referred to as Multilateral Trade Agreements, for brevity) as follows: ANNEX 1 Annex 1A: Multilateral Agreement on Trade in Goods General Agreement on Tariffs and Trade 1994 Agreement on Agriculture Agreement on the Application of Sanitary and Phytosanitary Measures Agreement on Textiles and Clothing Agreement on Technical Barriers to Trade Agreement on TradeRelated Investment Measures Agreement on Implementation of Article VI of he General Agreement on Tariffs and Trade 1994 Agreement on Implementation of Article VII of the General on Tariffs and Trade 1994 Agreement on Pre-Shipment Inspection Agreement on Rules of Origin Agreement on Imports Licensing Procedures Agreement on Subsidies and Coordinating Measures Agreement on Safeguards

Annex 1B: General Agreement on Trade in Services and Annexes Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights ANNEX 2 Understanding on Rules and Procedures Governing the Settlement of Disputes ANNEX 3 Trade Policy Review Mechanism On December 16, 1994, the President of the Philippines signed 7 the Instrument of Ratification, declaring: NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the Republic of the Philippines, after having seen and considered the aforementioned Agreement Establishing the World Trade Organization and the agreements and associated legal instruments included in Annexes one (1), two (2) and three (3) of that Agreement which are integral parts thereof, signed at Marrakesh, Morocco on 15 April 1994, do hereby ratify and confirm the same and every Article and Clause thereof. To emphasize, the WTO Agreement ratified by the President of the Philippines is composed of the Agreement Proper and "the associated legal instruments included in Annexes one (1), two (2) and three (3) of that Agreement which are integral parts thereof." On the other hand, the Final Act signed by Secretary Navarro embodies not only the WTO Agreement (and its integral annexes aforementioned) but also (1) the Ministerial Declarations and Decisions and (2) the Understanding on Commitments in Financial Services. In his Memorandum dated May 13, 1996, 8 the Solicitor General describes these two latter documents as follows: The Ministerial Decisions and Declarations are twenty-five declarations and decisions on a wide range of matters, such as measures in favor of least developed countries, notification

procedures, relationship of WTO with the International Monetary Fund (IMF), and agreements on technical barriers to trade and on dispute settlement. The Understanding on Commitments in Financial Services dwell on, among other things, standstill or limitations and qualifications of commitments to existing non-conforming measures, market access, national treatment, and definitions of non-resident supplier of financial services, commercial presence and new financial service. On December 29, 1994, the present petition was filed. After careful deliberation on respondents' comment and petitioners' reply thereto, the Court resolved on December 12, 1995, to give due course to the petition, and the parties thereafter filed their respective memoranda. The court also requested the Honorable Lilia R. Bautista, the Philippine Ambassador to the United Nations stationed in Geneva, Switzerland, to submit a paper, hereafter referred to as "Bautista Paper," 9 for brevity, (1) providing a historical background of and (2) summarizing the said agreements. During the Oral Argument held on August 27, 1996, the Court directed: (a) the petitioners to submit the (1) Senate Committee Report on the matter in controversy and (2) the transcript of proceedings/hearings in the Senate; and (b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine treaties signed prior to the Philippine adherence to the WTO Agreement, which derogate from Philippine sovereignty and (2) copies of the multi-volume WTO Agreement and other documents mentioned in the Final Act, as soon as possible. After receipt of the foregoing documents, the Court said it would consider the case submitted for resolution. In a Compliance dated September 16, 1996, the Solicitor General submitted a printed copy of the 36-volume Uruguay Round of Multilateral Trade Negotiations, and in another Compliance dated October 24, 1996, he listed the various "bilateral or multilateral treaties or international instruments involving derogation of Philippine sovereignty." Petitioners, on the other hand, submitted their Compliance dated January 28, 1997, on

January 30, 1997. The Issues In their Memorandum dated March 11, 1996, petitioners summarized the issues as follows: A. Whether the petition presents a political question or is otherwise not justiciable. B. Whether the petitioner members of the Senate who participated in the deliberations and voting leading to the concurrence are estopped from impugning the validity of the Agreement Establishing the World Trade Organization or of the validity of the concurrence. C. Whether the provisions of the Agreement Establishing the World Trade Organization contravene the provisions of Sec. 19, Article II, and Secs. 10 and 12, Article XII, all of the 1987 Philippine Constitution. D. Whether provisions of the Agreement Establishing the World Trade Organization unduly limit, restrict and impair Philippine sovereignty specifically the legislative power which, under Sec. 2, Article VI, 1987 Philippine Constitution is "vested in the Congress of the Philippines"; E. Whether provisions of the Agreement Establishing the World Trade Organization interfere with the exercise of judicial power. F. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to lack or excess of jurisdiction when they voted for concurrence in the ratification of the constitutionallyinfirm Agreement Establishing the World Trade Organization. G. Whether the respondent members of the Senate acted in grave abuse of discretion amounting to lack or excess of jurisdiction when they concurred only in the ratification of the Agreement Establishing the World Trade Organization, and not with the Presidential submission which included the Final Act, Ministerial Declaration and Decisions, and the Understanding on Commitments in Financial Services.

On the other hand, the Solicitor General as counsel for respondents "synthesized the several issues raised by petitioners into the following": 10 1. Whether or not the provisions of the "Agreement Establishing the World Trade Organization and the Agreements and Associated Legal Instruments included in Annexes one (1), two (2) and three (3) of that agreement" cited by petitioners directly contravene or undermine the letter, spirit and intent of Section 19, Article II and Sections 10 and 12, Article XII of the 1987 Constitution. 2. Whether or not certain provisions of the Agreement unduly limit, restrict or impair the exercise of legislative power by Congress. 3. Whether or not certain provisions of the Agreement impair the exercise of judicial power by this Honorable Court in promulgating the rules of evidence. 4. Whether or not the concurrence of the Senate "in the ratification by the President of the Philippines of the Agreement establishing the World Trade Organization" implied rejection of the treaty embodied in the Final Act. By raising and arguing only four issues against the seven presented by petitioners, the Solicitor General has effectively ignored three, namely: (1) whether the petition presents a political question or is otherwise not justiciable; (2) whether petitioner-members of the Senate (Wigberto E. Taada and Anna Dominique Coseteng) are estopped from joining this suit; and (3) whether the respondentmembers of the Senate acted in grave abuse of discretion when they voted for concurrence in the ratification of the WTO Agreement. The foregoing notwithstanding, this Court resolved to deal with these three issues thus: (1) The "political question" issue being very fundamental and vital, and being a matter that probes into the very jurisdiction of this Court to hear and decide this case was deliberated upon by the Court and will thus be ruled upon as the first issue; (2) The matter of estoppel will not be taken up because this defense is waivable and the respondents have effectively waived it by not

pursuing it in any of their pleadings; in any event, this issue, even if ruled in respondents' favor, will not cause the petition's dismissal as there are petitioners other than the two senators, who are not vulnerable to the defense of estoppel; and (3) The issue of alleged grave abuse of discretion on the part of the respondent senators will be taken up as an integral part of the disposition of the four issues raised by the Solicitor General. During its deliberations on the case, the Court noted that the respondents did not question the locus standi of petitioners. Hence, they are also deemed to have waived the benefit of such issue. They probably realized that grave constitutional issues, expenditures of public funds and serious international commitments of the nation are involved here, and that transcendental public interest requires that the substantive issues be met head on and decided on the merits, rather than skirted or deflected by procedural matters. 11 To recapitulate, the issues that will be ruled upon shortly are: (1) DOES THE PETITION PRESENT A JUSTICIABLE CONTROVERSY? OTHERWISE STATED, DOES THE PETITION INVOLVE A POLITICAL QUESTION OVER WHICH THIS COURT HAS NO JURISDICTION? (2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF THE PHILIPPINE CONSTITUTION? (3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT, RESTRICT, OR IMPAIR THE EXERCISE OF LEGISLATIVE POWER BY CONGRESS? (4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE EXERCISE OF JUDICIAL POWER BY THIS COURT IN PROMULGATING RULES ON EVIDENCE? (5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND ITS ANNEXES SUFFICIENT AND/OR VALID, CONSIDERING THAT IT DID NOT INCLUDE THE FINAL ACT,

MINISTERIAL DECLARATIONS AND DECISIONS, AND THE UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES? The First Issue: Does the Court Have Jurisdiction Over the Controversy? In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the Constitution, the petition no doubt raises a justiciable controversy. Where an action of the legislative branch is seriously alleged to have infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute. "The question thus posed is judicial rather than political. The duty (to adjudicate) remains to assure that the supremacy of the Constitution is upheld." 12 Once a "controversy as to the application or interpretation of a constitutional provision is raised before this Court (as in the instant case), it becomes a legal issue which the Court is bound by constitutional mandate to decide." 13 The jurisdiction of this Court to adjudicate the matters 14 raised in the petition is clearly set out in the 1987 Constitution, 15 as follows: Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. The foregoing text emphasizes the judicial department's duty and power to strike down grave abuse of discretion on the part of any branch or instrumentality of government including Congress. It is an innovation in our political law. 16 As explained by former Chief Justice Roberto Concepcion, 17 "the judiciary is the final arbiter on the question of whether or not a branch of government or any of its officials has acted without jurisdiction or in excess of jurisdiction or so capriciously as to constitute an abuse of discretion amounting to excess of jurisdiction. This is not only a judicial power but a duty to pass judgment on matters of this nature." As this Court has repeatedly and firmly emphasized in many cases, 18 it will not shirk, digress from or abandon its sacred duty and authority

to uphold the Constitution in matters that involve grave abuse of discretion brought before it in appropriate cases, committed by any officer, agency, instrumentality or department of the government. As the petition alleges grave abuse of discretion and as there is no other plain, speedy or adequate remedy in the ordinary course of law, we have no hesitation at all in holding that this petition should be given due course and the vital questions raised therein ruled upon under Rule 65 of the Rules of Court. Indeed, certiorari, prohibition and mandamus are appropriate remedies to raise constitutional issues and to review and/or prohibit/nullify, when proper, acts of legislative and executive officials. On this, we have no equivocation. We should stress that, in deciding to take jurisdiction over this petition, this Court will not review the wisdom of the decision of the President and the Senate in enlisting the country into the WTO, or pass upon the merits of trade liberalization as a policy espoused by said international body. Neither will it rule on the propriety of the government's economic policy of reducing/removing tariffs, taxes, subsidies, quantitative restrictions, and other import/trade barriers. Rather, it will only exercise its constitutional duty "to determine whether or not there had been a grave abuse of discretion amounting to lack or excess of jurisdiction" on the part of the Senate in ratifying the WTO Agreement and its three annexes. Second Issue: The WTO Agreement and Economic Nationalism This is the lis mota, the main issue, raised by the petition. Petitioners vigorously argue that the "letter, spirit and intent" of the Constitution mandating "economic nationalism" are violated by the so-called "parity provisions" and "national treatment" clauses scattered in various parts not only of the WTO Agreement and its annexes but also in the Ministerial Decisions and Declarations and in the Understanding on Commitments in Financial Services. Specifically, the "flagship" constitutional provisions referred to are Sec 19, Article II, and Secs. 10 and 12, Article XII, of the Constitution, which are worded as follows: Article II

DECLARATION OF PRINCIPLES AND STATE POLICIES xxx xxx xxx Sec. 19. The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos. xxx xxx xxx Article XII NATIONAL ECONOMY AND PATRIMONY xxx xxx xxx Sec. 10. . . . The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos. In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. xxx xxx xxx Sec. 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive. Petitioners aver that these sacred constitutional principles are desecrated by the following WTO provisions quoted in their memorandum: 19 a) In the area of investment measures related to trade in goods (TRIMS, for brevity): Article 2 National Treatment and Quantitative Restrictions. 1. Without prejudice to other rights and obligations under GATT 1994, no Member shall apply any TRIM that is inconsistent with the

provisions of Article II or Article XI of GATT 1994. 2. An illustrative list of TRIMS that are inconsistent with the obligations of general elimination of quantitative restrictions provided for in paragraph I of Article XI of GATT 1994 is contained in the Annex to this Agreement." (Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay Round, Legal Instruments, p. 22121, emphasis supplied). The Annex referred to reads as follows: ANNEX Illustrative List 1. TRIMS that are inconsistent with the obligation of national treatment provided for in paragraph 4 of Article III of GATT 1994 include those which are mandatory or enforceable under domestic law or under administrative rulings, or compliance with which is necessary to obtain an advantage, and which require: (a) the purchase or use by an enterprise of products of domestic origin or from any domestic source, whether specified in terms of particular products, in terms of volume or value of products, or in terms of proportion of volume or value of its local production; or (b) that an enterprise's purchases or use of imported products be limited to an amount related to the volume or value of local products that it exports. 2. TRIMS that are inconsistent with the obligations of general elimination of quantitative restrictions provided for in paragraph 1 of Article XI of GATT 1994 include those which are mandatory or enforceable under domestic laws or under administrative rulings, or compliance with which is necessary to obtain an advantage, and which restrict: (a) the importation by an enterprise of products used in or related to the local production that it exports; (b) the importation by an enterprise of products used in or related to

its local production by restricting its access to foreign exchange inflows attributable to the enterprise; or (c) the exportation or sale for export specified in terms of particular products, in terms of volume or value of products, or in terms of a preparation of volume or value of its local production. (Annex to the Agreement on Trade-Related Investment Measures, Vol. 27, Uruguay Round Legal Documents, p. 22125, emphasis supplied). The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows: The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favorable than that accorded to like products of national origin in respect of laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use, the provisions of this paragraph shall not prevent the application of differential internal transportation charges which are based exclusively on the economic operation of the means of transport and not on the nationality of the product." (Article III, GATT 1947, as amended by the Protocol Modifying Part II, and Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in relation to paragraph 1(a) of the General Agreement on Tariffs and Trade 1994, Vol. 1, Uruguay Round, Legal Instruments p. 177, emphasis supplied). (b) In the area of trade related aspects of intellectual property rights (TRIPS, for brevity): Each Member shall accord to the nationals of other Members treatment no less favourable than that it accords to its own nationals with regard to the protection of intellectual property. . . (par. 1 Article 3, Agreement on Trade-Related Aspect of Intellectual Property rights, Vol. 31, Uruguay Round, Legal Instruments, p. 25432 (emphasis supplied) (c) In the area of the General Agreement on Trade in Services: National Treatment 1. In the sectors inscribed in its schedule, and subject to any

conditions and qualifications set out therein, each Member shall accord to services and service suppliers of any other Member, in respect of all measures affecting the supply of services, treatment no less favourable than it accords to its own like services and service suppliers. 2. A Member may meet the requirement of paragraph I by according to services and service suppliers of any other Member, either formally suppliers of any other Member, either formally identical treatment or formally different treatment to that it accords to its own like services and service suppliers. 3. Formally identical or formally different treatment shall be considered to be less favourable if it modifies the conditions of completion in favour of services or service suppliers of the Member compared to like services or service suppliers of any other Member. (Article XVII, General Agreement on Trade in Services, Vol. 28, Uruguay Round Legal Instruments, p. 22610 emphasis supplied). It is petitioners' position that the foregoing "national treatment" and "parity provisions" of the WTO Agreement "place nationals and products of member countries on the same footing as Filipinos and local products," in contravention of the "Filipino First" policy of the Constitution. They allegedly render meaningless the phrase "effectively controlled by Filipinos." The constitutional conflict becomes more manifest when viewed in the context of the clear duty imposed on the Philippines as a WTO member to ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed agreements. 20 Petitioners further argue that these provisions contravene constitutional limitations on the role exports play in national development and negate the preferential treatment accorded to Filipino labor, domestic materials and locally produced goods. On the other hand, respondents through the Solicitor General counter (1) that such Charter provisions are not self-executing and merely set out general policies; (2) that these nationalistic portions of the Constitution invoked by petitioners should not be read in isolation but should be related to other relevant provisions of Art. XII, particularly Secs. 1 and 13 thereof; (3) that read properly, the cited WTO clauses

do not conflict with Constitution; and (4) that the WTO Agreement contains sufficient provisions to protect developing countries like the Philippines from the harshness of sudden trade liberalization. We shall now discuss and rule on these arguments. Declaration of Principles Not Self-Executing By its very title, Article II of the Constitution is a "declaration of principles and state policies." The counterpart of this article in the 1935 Constitution 21 is called the "basic political creed of the nation" by Dean Vicente Sinco. 22 These principles in Article II are not intended to be self-executing principles ready for enforcement through the courts. 23 They are used by the judiciary as aids or as guides in the exercise of its power of judicial review, and by the legislature in its enactment of laws. As held in the leading case of Kilosbayan, Incorporated vs. Morato, 24 the principles and state policies enumerated in Article II and some sections of Article XII are not "self-executing provisions, the disregard of which can give rise to a cause of action in the courts. They do not embody judicially enforceable constitutional rights but guidelines for legislation." In the same light, we held in Basco vs. Pagcor 25 that broad constitutional principles need legislative enactments to implement the, thus: On petitioners' allegation that P.D. 1869 violates Sections 11 (Personal Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice it to state also that these are merely statements of principles and policies. As such, they are basically not self-executing, meaning a law should be passed by Congress to clearly define and effectuate such principles. In general, therefore, the 1935 provisions were not intended to be self-executing principles ready for enforcement through the courts. They were rather directives addressed to the executive and to the legislature. If the executive and the legislature failed to heed the directives of the article, the available remedy was not judicial but political. The electorate could express their displeasure with the failure of the executive and the legislature through the language of

the ballot. (Bernas, Vol. II, p. 2). The reasons for denying a cause of action to an alleged infringement of board constitutional principles are sourced from basic considerations of due process and the lack of judicial authority to wade "into the uncharted ocean of social and economic policy making." Mr. Justice Florentino P. Feliciano in his concurring opinion in Oposa vs. Factoran, Jr., 26 explained these reasons as follows: My suggestion is simply that petitioners must, before the trial court, show a more specific legal right a right cast in language of a significantly lower order of generality than Article II (15) of the Constitution that is or may be violated by the actions, or failures to act, imputed to the public respondent by petitioners so that the trial court can validly render judgment grating all or part of the relief prayed for. To my mind, the court should be understood as simply saying that such a more specific legal right or rights may well exist in our corpus of law, considering the general policy principles found in the Constitution and the existence of the Philippine Environment Code, and that the trial court should have given petitioners an effective opportunity so to demonstrate, instead of aborting the proceedings on a motion to dismiss. It seems to me important that the legal right which is an essential component of a cause of action be a specific, operable legal right, rather than a constitutional or statutory policy, for at least two (2) reasons. One is that unless the legal right claimed to have been violated or disregarded is given specification in operational terms, defendants may well be unable to defend themselves intelligently and effectively; in other words, there are due process dimensions to this matter. The second is a broader-gauge consideration where a specific violation of law or applicable regulation is not alleged or proved, petitioners can be expected to fall back on the expanded conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution which reads: Sec. 1. . . . Judicial power includes the duty of the courts of justice to settle actual

controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. (Emphasis supplied) When substantive standards as general as "the right to a balanced and healthy ecology" and "the right to health" are combined with remedial standards as broad ranging as "a grave abuse of discretion amounting to lack or excess of jurisdiction," the result will be, it is respectfully submitted, to propel courts into the uncharted ocean of social and economic policy making. At least in respect of the vast area of environmental protection and management, our courts have no claim to special technical competence and experience and professional qualification. Where no specific, operable norms and standards are shown to exist, then the policy making departments the legislative and executive departments must be given a real and effective opportunity to fashion and promulgate those norms and standards, and to implement them before the courts should intervene. Economic Nationalism Should Be Read with Other Constitutional Mandates to Attain Balanced Development of Economy On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying down general principles relating to the national economy and patrimony, should be read and understood in relation to the other sections in said article, especially Secs. 1 and 13 thereof which read: Sec. 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all especially the underprivileged. The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall protect Filipino enterprises against unfair foreign competition and trade practices.

In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. ... xxx xxx xxx Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity. As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of national economic development, as follows: 1. A more equitable distribution of opportunities, income and wealth; 2. A sustained increase in the amount of goods and services provided by the nation for the benefit of the people; and 3. An expanding productivity as the key to raising the quality of life for all especially the underprivileged. With these goals in context, the Constitution then ordains the ideals of economic nationalism (1) by expressing preference in favor of qualified Filipinos "in the grant of rights, privileges and concessions covering the national economy and patrimony" 27 and in the use of "Filipino labor, domestic materials and locally-produced goods"; (2) by mandating the State to "adopt measures that help make them competitive; 28 and (3) by requiring the State to "develop a self-reliant and independent national economy effectively controlled by Filipinos." 29 In similar language, the Constitution takes into account the realities of the outside world as it requires the pursuit of "a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality ad reciprocity"; 30 and speaks of industries "which are competitive in both domestic and foreign markets" as well as of the protection of "Filipino enterprises against unfair foreign competition and trade practices." It is true that in the recent case of Manila Prince Hotel vs. Government Service Insurance System, et al., 31 this Court held that "Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, positive command which is complete in itself and which

needs no further guidelines or implementing laws or rule for its enforcement. From its very words the provision does not require any legislation to put it in operation. It is per se judicially enforceable." However, as the constitutional provision itself states, it is enforceable only in regard to "the grants of rights, privileges and concessions covering national economy and patrimony" and not to every aspect of trade and commerce. It refers to exceptions rather than the rule. The issue here is not whether this paragraph of Sec. 10 of Art. XII is selfexecuting or not. Rather, the issue is whether, as a rule, there are enough balancing provisions in the Constitution to allow the Senate to ratify the Philippine concurrence in the WTO Agreement. And we hold that there are. All told, while the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, at the same time, it recognizes the need for business exchange with the rest of the world on the bases of equality and reciprocity and limits protection of Filipino enterprises only against foreign competition and trade practices that are unfair. 32 In other words, the Constitution did not intend to pursue an isolationist policy. It did not shut out foreign investments, goods and services in the development of the Philippine economy. While the Constitution does not encourage the unlimited entry of foreign goods, services and investments into the country, it does not prohibit them either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on foreign competition that is unfair. WTO Recognizes Need to Protect Weak Economies Upon the other hand, respondents maintain that the WTO itself has some built-in advantages to protect weak and developing economies, which comprise the vast majority of its members. Unlike in the UN where major states have permanent seats and veto powers in the Security Council, in the WTO, decisions are made on the basis of sovereign equality, with each member's vote equal in weight to that of any other. There is no WTO equivalent of the UN Security Council.
WTO decides by consensus whenever possible, otherwise, decisions of the Ministerial Conference and the General Council shall be taken by the majority of the votes cast, except in cases of interpretation of the Agreement or waiver of the obligation of a member which would require

three fourths vote. Amendments would require two thirds vote in general. Amendments to MFN provisions and the Amendments provision will require assent of all members. Any member may withdraw from the Agreement upon the expiration of six months from the date of notice of withdrawals. 33

Hence, poor countries can protect their common interests more effectively through the WTO than through one-on-one negotiations with developed countries. Within the WTO, developing countries can form powerful blocs to push their economic agenda more decisively than outside the Organization. This is not merely a matter of practical alliances but a negotiating strategy rooted in law. Thus, the basic principles underlying the WTO Agreement recognize the need of developing countries like the Philippines to "share in the growth in international trade commensurate with the needs of their economic development." These basic principles are found in the preamble 34 of the WTO Agreement as follows: The Parties to this Agreement, Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development, Recognizing further that there is need for positive efforts designed to ensure that developing countries, and especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development, Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international trade relations,

Resolved, therefore, to develop an integrated, more viable and durable multilateral trading system encompassing the General Agreement on Tariffs and Trade, the results of past trade liberalization efforts, and all of the results of the Uruguay Round of Multilateral Trade Negotiations, Determined to preserve the basic principles and to further the objectives underlying this multilateral trading system, . . . (emphasis supplied.) Specific WTO Provisos Protect Developing Countries So too, the Solicitor General points out that pursuant to and consistent with the foregoing basic principles, the WTO Agreement grants developing countries a more lenient treatment, giving their domestic industries some protection from the rush of foreign competition. Thus, with respect to tariffs in general, preferential treatment is given to developing countries in terms of the amount of tariff reduction and the period within which the reduction is to be spread out. Specifically, GATT requires an average tariff reduction rate of 36% for developed countries to be effected within a period of six (6) years while developing countries including the Philippines are required to effect an average tariff reduction of only 24% within ten (10) years. In respect to domestic subsidy, GATT requires developed countries to reduce domestic support to agricultural products by 20% over six (6) years, as compared to only 13% for developing countries to be effected within ten (10) years. In regard to export subsidy for agricultural products, GATT requires developed countries to reduce their budgetary outlays for export subsidy by 36% and export volumes receiving export subsidy by 21% within a period of six (6) years. For developing countries, however, the reduction rate is only two-thirds of that prescribed for developed countries and a longer period of ten (10) years within which to effect such reduction. Moreover, GATT itself has provided built-in protection from unfair foreign competition and trade practices including anti-dumping measures, countervailing measures and safeguards against import

surges. Where local businesses are jeopardized by unfair foreign competition, the Philippines can avail of these measures. There is hardly therefore any basis for the statement that under the WTO, local industries and enterprises will all be wiped out and that Filipinos will be deprived of control of the economy. Quite the contrary, the weaker situations of developing nations like the Philippines have been taken into account; thus, there would be no basis to say that in joining the WTO, the respondents have gravely abused their discretion. True, they have made a bold decision to steer the ship of state into the yet uncharted sea of economic liberalization. But such decision cannot be set aside on the ground of grave abuse of discretion, simply because we disagree with it or simply because we believe only in other economic policies. As earlier stated, the Court in taking jurisdiction of this case will not pass upon the advantages and disadvantages of trade liberalization as an economic policy. It will only perform its constitutional duty of determining whether the Senate committed grave abuse of discretion. Constitution Does Not Rule Out Foreign Competition Furthermore, the constitutional policy of a "self-reliant and independent national economy" 35 does not necessarily rule out the entry of foreign investments, goods and services. It contemplates neither "economic seclusion" nor "mendicancy in the international community." As explained by Constitutional Commissioner Bernardo Villegas, sponsor of this constitutional policy:
Economic self-reliance is a primary objective of a developing country that is keenly aware of overdependence on external assistance for even its most basic needs. It does not mean autarky or economic seclusion; rather, it means avoiding mendicancy in the international community. Independence refers to the freedom from undue foreign control of the national economy, especially in such strategic industries as in the development of natural resources and public utilities. 36

The WTO reliance on "most favored nation," "national treatment," and "trade without discrimination" cannot be struck down as unconstitutional as in fact they are rules of equality and reciprocity that apply to all WTO members. Aside from envisioning a trade policy based on "equality and reciprocity," 37 the fundamental law encourages industries that are "competitive in both domestic and

foreign markets," thereby demonstrating a clear policy against a sheltered domestic trade environment, but one in favor of the gradual development of robust industries that can compete with the best in the foreign markets. Indeed, Filipino managers and Filipino enterprises have shown capability and tenacity to compete internationally. And given a free trade environment, Filipino entrepreneurs and managers in Hongkong have demonstrated the Filipino capacity to grow and to prosper against the best offered under a policy of laissez faire. Constitution Favors Consumers, Not Industries or Enterprises The Constitution has not really shown any unbalanced bias in favor of any business or enterprise, nor does it contain any specific pronouncement that Filipino companies should be pampered with a total proscription of foreign competition. On the other hand, respondents claim that WTO/GATT aims to make available to the Filipino consumer the best goods and services obtainable anywhere in the world at the most reasonable prices. Consequently, the question boils down to whether WTO/GATT will favor the general welfare of the public at large. Will adherence to the WTO treaty bring this ideal (of favoring the general welfare) to reality? Will WTO/GATT succeed in promoting the Filipinos' general welfare because it will as promised by its promoters expand the country's exports and generate more employment? Will it bring more prosperity, employment, purchasing power and quality products at the most reasonable rates to the Filipino public? The responses to these questions involve "judgment calls" by our policy makers, for which they are answerable to our people during appropriate electoral exercises. Such questions and the answers thereto are not subject to judicial pronouncements based on grave abuse of discretion. Constitution Designed to Meet Future Events and Contingencies No doubt, the WTO Agreement was not yet in existence when the

Constitution was drafted and ratified in 1987. That does not mean however that the Charter is necessarily flawed in the sense that its framers might not have anticipated the advent of a borderless world of business. By the same token, the United Nations was not yet in existence when the 1935 Constitution became effective. Did that necessarily mean that the then Constitution might not have contemplated a diminution of the absoluteness of sovereignty when the Philippines signed the UN Charter, thereby effectively surrendering part of its control over its foreign relations to the decisions of various UN organs like the Security Council? It is not difficult to answer this question. Constitutions are designed to meet not only the vagaries of contemporary events. They should be interpreted to cover even future and unknown circumstances. It is to the credit of its drafters that a Constitution can withstand the assaults of bigots and infidels but at the same time bend with the refreshing winds of change necessitated by unfolding events. As one eminent political law writer and respected jurist 38 explains: The Constitution must be quintessential rather than superficial, the root and not the blossom, the base and frame-work only of the edifice that is yet to rise. It is but the core of the dream that must take shape, not in a twinkling by mandate of our delegates, but slowly "in the crucible of Filipino minds and hearts," where it will in time develop its sinews and gradually gather its strength and finally achieve its substance. In fine, the Constitution cannot, like the goddess Athena, rise full-grown from the brow of the Constitutional Convention, nor can it conjure by mere fiat an instant Utopia. It must grow with the society it seeks to re-structure and march apace with the progress of the race, drawing from the vicissitudes of history the dynamism and vitality that will keep it, far from becoming a petrified rule, a pulsing, living law attuned to the heartbeat of the nation. Third Issue: The WTO Agreement and Legislative Power The WTO Agreement provides that "(e)ach Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements." 39 Petitioners maintain that this undertaking "unduly limits, restricts and impairs Philippine sovereignty, specifically the legislative power which under

Sec. 2, Article VI of the 1987 Philippine Constitution is vested in the Congress of the Philippines. It is an assault on the sovereign powers of the Philippines because this means that Congress could not pass legislation that will be good for our national interest and general welfare if such legislation will not conform with the WTO Agreement, which not only relates to the trade in goods . . . but also to the flow of investments and money . . . as well as to a whole slew of agreements on socio-cultural matters . . . 40 More specifically, petitioners claim that said WTO proviso derogates from the power to tax, which is lodged in the Congress. 41 And while the Constitution allows Congress to authorize the President to fix tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts, such authority is subject to "specified limits and . . . such limitations and restrictions" as Congress may provide, 42 as in fact it did under Sec. 401 of the Tariff and Customs Code. Sovereignty Limited by International Law and Treaties This Court notes and appreciates the ferocity and passion by which petitioners stressed their arguments on this issue. However, while sovereignty has traditionally been deemed absolute and allencompassing on the domestic level, it is however subject to restrictions and limitations voluntarily agreed to by the Philippines, expressly or impliedly, as a member of the family of nations. Unquestionably, the Constitution did not envision a hermit-type isolation of the country from the rest of the world. In its Declaration of Principles and State Policies, the Constitution "adopts the generally accepted principles of international law as part of the law of the land, and adheres to the policy of peace, equality, justice, freedom, cooperation and amity, with all nations." 43 By the doctrine of incorporation, the country is bound by generally accepted principles of international law, which are considered to be automatically part of our own laws. 44 One of the oldest and most fundamental rules in international law is pacta sunt servanda international agreements must be performed in good faith. "A treaty engagement is not a mere moral obligation but creates a legally binding obligation on the parties . . . A state which has contracted valid international obligations is bound to make in its legislations such modifications as may be necessary to ensure the fulfillment of the obligations undertaken." 45

By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations may surrender some aspects of their state power in exchange for greater benefits granted by or derived from a convention or pact. After all, states, like individuals, live with coequals, and in pursuit of mutually covenanted objectives and benefits, they also commonly agree to limit the exercise of their otherwise absolute rights. Thus, treaties have been used to record agreements between States concerning such widely diverse matters as, for example, the lease of naval bases, the sale or cession of territory, the termination of war, the regulation of conduct of hostilities, the formation of alliances, the regulation of commercial relations, the settling of claims, the laying down of rules governing conduct in peace and the establishment of international organizations. 46 The sovereignty of a state therefore cannot in fact and in reality be considered absolute. Certain restrictions enter into the picture: (1) limitations imposed by the very nature of membership in the family of nations and (2) limitations imposed by treaty stipulations. As aptly put by John F. Kennedy, "Today, no nation can build its destiny alone. The age of selfsufficient nationalism is over. The age of interdependence is here." 47 UN Charter and Other Treaties Limit Sovereignty Thus, when the Philippines joined the United Nations as one of its 51 charter members, it consented to restrict its sovereign rights under the "concept of sovereignty as auto-limitation." 47-A Under Article 2 of the UN Charter, "(a)ll members shall give the United Nations every assistance in any action it takes in accordance with the present Charter, and shall refrain from giving assistance to any state against which the United Nations is taking preventive or enforcement action." Such assistance includes payment of its corresponding share not merely in administrative expenses but also in expenditures for the peace-keeping operations of the organization. In its advisory opinion of July 20, 1961, the International Court of Justice held that money used by the United Nations Emergency Force in the Middle East and in the Congo were "expenses of the United Nations" under Article 17, paragraph 2, of the UN Charter. Hence, all its members must bear their corresponding share in such expenses. In this sense, the Philippine Congress is restricted in its power to appropriate. It is compelled to appropriate funds whether it agrees with such peace-

keeping expenses or not. So too, under Article 105 of the said Charter, the UN and its representatives enjoy diplomatic privileges and immunities, thereby limiting again the exercise of sovereignty of members within their own territory. Another example: although "sovereign equality" and "domestic jurisdiction" of all members are set forth as underlying principles in the UN Charter, such provisos are however subject to enforcement measures decided by the Security Council for the maintenance of international peace and security under Chapter VII of the Charter. A final example: under Article 103, "(i)n the event of a conflict between the obligations of the Members of the United Nations under the present Charter and their obligations under any other international agreement, their obligation under the present charter shall prevail," thus unquestionably denying the Philippines as a member the sovereign power to make a choice as to which of conflicting obligations, if any, to honor. Apart from the UN Treaty, the Philippines has entered into many other international pacts both bilateral and multilateral that involve limitations on Philippine sovereignty. These are enumerated by the Solicitor General in his Compliance dated October 24, 1996, as follows: (a) Bilateral convention with the United States regarding taxes on income, where the Philippines agreed, among others, to exempt from tax, income received in the Philippines by, among others, the Federal Reserve Bank of the United States, the Export/Import Bank of the United States, the Overseas Private Investment Corporation of the United States. Likewise, in said convention, wages, salaries and similar remunerations paid by the United States to its citizens for labor and personal services performed by them as employees or officials of the United States are exempt from income tax by the Philippines. (b) Bilateral agreement with Belgium, providing, among others, for the avoidance of double taxation with respect to taxes on income. (c) Bilateral convention with the Kingdom of Sweden for the avoidance of double taxation. (d) Bilateral convention with the French Republic for the avoidance of

double taxation. (e) Bilateral air transport agreement with Korea where the Philippines agreed to exempt from all customs duties, inspection fees and other duties or taxes aircrafts of South Korea and the regular equipment, spare parts and supplies arriving with said aircrafts. (f) Bilateral air service agreement with Japan, where the Philippines agreed to exempt from customs duties, excise taxes, inspection fees and other similar duties, taxes or charges fuel, lubricating oils, spare parts, regular equipment, stores on board Japanese aircrafts while on Philippine soil. (g) Bilateral air service agreement with Belgium where the Philippines granted Belgian air carriers the same privileges as those granted to Japanese and Korean air carriers under separate air service agreements. (h) Bilateral notes with Israel for the abolition of transit and visitor visas where the Philippines exempted Israeli nationals from the requirement of obtaining transit or visitor visas for a sojourn in the Philippines not exceeding 59 days. (i) Bilateral agreement with France exempting French nationals from the requirement of obtaining transit and visitor visa for a sojourn not exceeding 59 days. (j) Multilateral Convention on Special Missions, where the Philippines agreed that premises of Special Missions in the Philippines are inviolable and its agents can not enter said premises without consent of the Head of Mission concerned. Special Missions are also exempted from customs duties, taxes and related charges. (k) Multilateral convention on the Law of Treaties. In this convention, the Philippines agreed to be governed by the Vienna Convention on the Law of Treaties. (l) Declaration of the President of the Philippines accepting compulsory jurisdiction of the International Court of Justice. The International Court of Justice has jurisdiction in all legal disputes concerning the interpretation of a treaty, any question of international

law, the existence of any fact which, if established, would constitute a breach "of international obligation." In the foregoing treaties, the Philippines has effectively agreed to limit the exercise of its sovereign powers of taxation, eminent domain and police power. The underlying consideration in this partial surrender of sovereignty is the reciprocal commitment of the other contracting states in granting the same privilege and immunities to the Philippines, its officials and its citizens. The same reciprocity characterizes the Philippine commitments under WTO-GATT.
International treaties, whether relating to nuclear disarmament, human rights, the environment, the law of the sea, or trade, constrain domestic political sovereignty through the assumption of external obligations. But unless anarchy in international relations is preferred as an alternative, in most cases we accept that the benefits of the reciprocal obligations involved outweigh the costs associated with any loss of political sovereignty. (T)rade treaties that structure relations by reference to durable, well-defined substantive norms and objective dispute resolution procedures reduce the risks of larger countries exploiting raw economic power to bully smaller countries, by subjecting power relations to some form of legal ordering. In addition, smaller countries typically stand to gain disproportionately from trade liberalization. This is due to the simple fact that liberalization will provide access to a larger set of potential new trading relationship than in case of the larger country gaining enhanced success to the smaller country's market. 48

The point is that, as shown by the foregoing treaties, a portion of sovereignty may be waived without violating the Constitution, based on the rationale that the Philippines "adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of . . . cooperation and amity with all nations." Fourth Issue: The WTO Agreement and Judicial Power Petitioners aver that paragraph 1, Article 34 of the General Provisions and Basic Principles of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) 49 intrudes on the power of the Supreme Court to promulgate rules concerning pleading, practice and procedures. 50 To understand the scope and meaning of Article 34, TRIPS,
51

it will

be fruitful to restate its full text as follows: Article 34 Process Patents: Burden of Proof 1. For the purposes of civil proceedings in respect of the infringement of the rights of the owner referred to in paragraph 1 (b) of Article 28, if the subject matter of a patent is a process for obtaining a product, the judicial authorities shall have the authority to order the defendant to prove that the process to obtain an identical product is different from the patented process. Therefore, Members shall provide, in at least one of the following circumstances, that any identical product when produced without the consent of the patent owner shall, in the absence of proof to the contrary, be deemed to have been obtained by the patented process: (a) if the product obtained by the patented process is new; (b) if there is a substantial likelihood that the identical product was made by the process and the owner of the patent has been unable through reasonable efforts to determine the process actually used. 2. Any Member shall be free to provide that the burden of proof indicated in paragraph 1 shall be on the alleged infringer only if the condition referred to in subparagraph (a) is fulfilled or only if the condition referred to in subparagraph (b) is fulfilled. 3. In the adduction of proof to the contrary, the legitimate interests of defendants in protecting their manufacturing and business secrets shall be taken into account. From the above, a WTO Member is required to provide a rule of disputable (not the words "in the absence of proof to the contrary") presumption that a product shown to be identical to one produced with the use of a patented process shall be deemed to have been obtained by the (illegal) use of the said patented process, (1) where such product obtained by the patented product is new, or (2) where there is "substantial likelihood" that the identical product was made with the use of the said patented process but the owner of the patent could not determine the exact process used in obtaining such

identical product. Hence, the "burden of proof" contemplated by Article 34 should actually be understood as the duty of the alleged patent infringer to overthrow such presumption. Such burden, properly understood, actually refers to the "burden of evidence" (burden of going forward) placed on the producer of the identical (or fake) product to show that his product was produced without the use of the patented process. The foregoing notwithstanding, the patent owner still has the "burden of proof" since, regardless of the presumption provided under paragraph 1 of Article 34, such owner still has to introduce evidence of the existence of the alleged identical product, the fact that it is "identical" to the genuine one produced by the patented process and the fact of "newness" of the genuine product or the fact of "substantial likelihood" that the identical product was made by the patented process. The foregoing should really present no problem in changing the rules of evidence as the present law on the subject, Republic Act No. 165, as amended, otherwise known as the Patent Law, provides a similar presumption in cases of infringement of patented design or utility model, thus: Sec. 60. Infringement. Infringement of a design patent or of a patent for utility model shall consist in unauthorized copying of the patented design or utility model for the purpose of trade or industry in the article or product and in the making, using or selling of the article or product copying the patented design or utility model. Identity or substantial identity with the patented design or utility model shall constitute evidence of copying. (emphasis supplied) Moreover, it should be noted that the requirement of Article 34 to provide a disputable presumption applies only if (1) the product obtained by the patented process in NEW or (2) there is a substantial likelihood that the identical product was made by the process and the process owner has not been able through reasonable effort to determine the process used. Where either of these two provisos does not obtain, members shall be free to determine the appropriate method of implementing the provisions of TRIPS within their own internal systems and processes.

By and large, the arguments adduced in connection with our disposition of the third issue derogation of legislative power will apply to this fourth issue also. Suffice it to say that the reciprocity clause more than justifies such intrusion, if any actually exists. Besides, Article 34 does not contain an unreasonable burden, consistent as it is with due process and the concept of adversarial dispute settlement inherent in our judicial system. So too, since the Philippine is a signatory to most international conventions on patents, trademarks and copyrights, the adjustment in legislation and rules of procedure will not be substantial. 52 Fifth Issue: Concurrence Only in the WTO Agreement and Not in Other Documents Contained in the Final Act Petitioners allege that the Senate concurrence in the WTO Agreement and its annexes but not in the other documents referred to in the Final Act, namely the Ministerial Declaration and Decisions and the Understanding on Commitments in Financial Services is defective and insufficient and thus constitutes abuse of discretion. They submit that such concurrence in the WTO Agreement alone is flawed because it is in effect a rejection of the Final Act, which in turn was the document signed by Secretary Navarro, in representation of the Republic upon authority of the President. They contend that the second letter of the President to the Senate 53 which enumerated what constitutes the Final Act should have been the subject of concurrence of the Senate. "A final act, sometimes called protocol de cloture, is an instrument which records the winding up of the proceedings of a diplomatic conference and usually includes a reproduction of the texts of treaties, conventions, recommendations and other acts agreed upon and signed by the plenipotentiaries attending the conference." 54 It is not the treaty itself. It is rather a summary of the proceedings of a protracted conference which may have taken place over several years. The text of the "Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations" is contained in just one page 55 in Vol. I of the 36-volume Uruguay Round of Multilateral Trade Negotiations. By signing said Final Act, Secretary Navarro as representative of the Republic of the Philippines undertook:

(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities with a view to seeking approval of the Agreement in accordance with their procedures; and (b) to adopt the Ministerial Declarations and Decisions. The assailed Senate Resolution No. 97 expressed concurrence in exactly what the Final Act required from its signatories, namely, concurrence of the Senate in the WTO Agreement. The Ministerial Declarations and Decisions were deemed adopted without need for ratification. They were approved by the ministers by virtue of Article XXV: 1 of GATT which provides that representatives of the members can meet "to give effect to those provisions of this Agreement which invoke joint action, and generally with a view to facilitating the operation and furthering the objectives of this Agreement." 56 The Understanding on Commitments in Financial Services also approved in Marrakesh does not apply to the Philippines. It applies only to those 27 Members which "have indicated in their respective schedules of commitments on standstill, elimination of monopoly, expansion of operation of existing financial service suppliers, temporary entry of personnel, free transfer and processing of information, and national treatment with respect to access to payment, clearing systems and refinancing available in the normal course of business." 57 On the other hand, the WTO Agreement itself expresses what multilateral agreements are deemed included as its integral parts, 58 as follows: Article II Scope of the WTO 1. The WTO shall provide the common institutional frame-work for the conduct of trade relations among its Members in matters to the agreements and associated legal instruments included in the Annexes to this Agreement.

2. The Agreements and associated legal instruments included in Annexes 1, 2, and 3, (hereinafter referred to as "Multilateral Agreements") are integral parts of this Agreement, binding on all Members. 3. The Agreements and associated legal instruments included in Annex 4 (hereinafter referred to as "Plurilateral Trade Agreements") are also part of this Agreement for those Members that have accepted them, and are binding on those Members. The Plurilateral Trade Agreements do not create either obligation or rights for Members that have not accepted them. 4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A (hereinafter referred to as "GATT 1994") is legally distinct from the General Agreement on Tariffs and Trade, dated 30 October 1947, annexed to the Final Act adopted at the conclusion of the Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, as subsequently rectified, amended or modified (hereinafter referred to as "GATT 1947"). It should be added that the Senate was well-aware of what it was concurring in as shown by the members' deliberation on August 25, 1994. After reading the letter of President Ramos dated August 11, 1994, 59 the senators of the Republic minutely dissected what the Senate was concurring in, as follows: 60 THE CHAIRMAN: Yes. Now, the question of the validity of the submission came up in the first day hearing of this Committee yesterday. Was the observation made by Senator Taada that what was submitted to the Senate was not the agreement on establishing the World Trade Organization by the final act of the Uruguay Round which is not the same as the agreement establishing the World Trade Organization? And on that basis, Senator Tolentino raised a point of order which, however, he agreed to withdraw upon understanding that his suggestion for an alternative solution at that time was acceptable. That suggestion was to treat the proceedings of the Committee as being in the nature of briefings for Senators until the question of the submission could be clarified. And so, Secretary Romulo, in effect, is the President submitting a

new . . . is he making a new submission which improves on the clarity of the first submission? MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be no misunderstanding, it was his intention to clarify all matters by giving this letter. THE CHAIRMAN: Thank you. Can this Committee hear from Senator Taada and later on Senator Tolentino since they were the ones that raised this question yesterday? Senator Taada, please. SEN. TAADA: Thank you, Mr. Chairman. Based on what Secretary Romulo has read, it would now clearly appear that what is being submitted to the Senate for ratification is not the Final Act of the Uruguay Round, but rather the Agreement on the World Trade Organization as well as the Ministerial Declarations and Decisions, and the Understanding and Commitments in Financial Services. I am now satisfied with the wording of the new submission of President Ramos. SEN. TAADA. . . . of President Ramos, Mr. Chairman. THE CHAIRMAN. Thank you, Senator Taada. Can we hear from Senator Tolentino? And after him Senator Neptali Gonzales and Senator Lina. SEN. TOLENTINO, Mr. Chairman, I have not seen the new submission actually transmitted to us but I saw the draft of his earlier, and I think it now complies with the provisions of the Constitution, and with the Final Act itself . The Constitution does not require us to ratify the Final Act. It requires us to ratify the Agreement which is now being submitted. The Final Act itself specifies what is going to be submitted to with the governments of the participants.

In paragraph 2 of the Final Act, we read and I quote: By signing the present Final Act, the representatives agree: (a) to submit as appropriate the WTO Agreement for the consideration of the respective competent authorities with a view to seeking approval of the Agreement in accordance with their procedures. In other words, it is not the Final Act that was agreed to be submitted to the governments for ratification or acceptance as whatever their constitutional procedures may provide but it is the World Trade Organization Agreement. And if that is the one that is being submitted now, I think it satisfies both the Constitution and the Final Act itself . Thank you, Mr. Chairman. THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales. SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of record. And they had been adequately reflected in the journal of yesterday's session and I don't see any need for repeating the same. Now, I would consider the new submission as an act ex abudante cautela. THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to make any comment on this? SEN. LINA. Mr. President, I agree with the observation just made by Senator Gonzales out of the abundance of question. Then the new submission is, I believe, stating the obvious and therefore I have no further comment to make. Epilogue In praying for the nullification of the Philippine ratification of the WTO Agreement, petitioners are invoking this Court's constitutionally imposed duty "to determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction" on the part of the Senate in giving its concurrence therein via Senate

Resolution No. 97. Procedurally, a writ of certiorari grounded on grave abuse of discretion may be issued by the Court under Rule 65 of the Rules of Court when it is amply shown that petitioners have no other plain, speedy and adequate remedy in the ordinary course of law. By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. 61 Mere abuse of discretion is not enough. It must be grave abuse of discretion as when the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to amount to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. 62 Failure on the part of the petitioner to show grave abuse of discretion will result in the dismissal of the petition. 63 In rendering this Decision, this Court never forgets that the Senate, whose act is under review, is one of two sovereign houses of Congress and is thus entitled to great respect in its actions. It is itself a constitutional body independent and coordinate, and thus its actions are presumed regular and done in good faith. Unless convincing proof and persuasive arguments are presented to overthrow such presumptions, this Court will resolve every doubt in its favor. Using the foregoing well-accepted definition of grave abuse of discretion and the presumption of regularity in the Senate's processes, this Court cannot find any cogent reason to impute grave abuse of discretion to the Senate's exercise of its power of concurrence in the WTO Agreement granted it by Sec. 21 of Article VII of the Constitution. 64 It is true, as alleged by petitioners, that broad constitutional principles require the State to develop an independent national economy effectively controlled by Filipinos; and to protect and/or prefer Filipino labor, products, domestic materials and locally produced goods. But it is equally true that such principles while serving as judicial and legislative guides are not in themselves sources of causes of action. Moreover, there are other equally fundamental constitutional principles relied upon by the Senate which mandate the pursuit of a "trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity"

and the promotion of industries "which are competitive in both domestic and foreign markets," thereby justifying its acceptance of said treaty. So too, the alleged impairment of sovereignty in the exercise of legislative and judicial powers is balanced by the adoption of the generally accepted principles of international law as part of the law of the land and the adherence of the Constitution to the policy of cooperation and amity with all nations. That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its consent to the WTO Agreement thereby making it "a part of the law of the land" is a legitimate exercise of its sovereign duty and power. We find no "patent and gross" arbitrariness or despotism "by reason of passion or personal hostility" in such exercise. It is not impossible to surmise that this Court, or at least some of its members, may even agree with petitioners that it is more advantageous to the national interest to strike down Senate Resolution No. 97. But that is not a legal reason to attribute grave abuse of discretion to the Senate and to nullify its decision. To do so would constitute grave abuse in the exercise of our own judicial power and duty. Ineludably, what the Senate did was a valid exercise of its authority. As to whether such exercise was wise, beneficial or viable is outside the realm of judicial inquiry and review. That is a matter between the elected policy makers and the people. As to whether the nation should join the worldwide march toward trade liberalization and economic globalization is a matter that our people should determine in electing their policy makers. After all, the WTO Agreement allows withdrawal of membership, should this be the political desire of a member. The eminent futurist John Naisbitt, author of the best seller Megatrends, predicts an Asian Renaissance 65 where "the East will become the dominant region of the world economically, politically and culturally in the next century." He refers to the "free market" espoused by WTO as the "catalyst" in this coming Asian ascendancy. There are at present about 31 countries including China, Russia and Saudi Arabia negotiating for membership in the WTO. Notwithstanding objections against possible limitations on national sovereignty, the WTO remains as the only viable structure for multilateral trading and the veritable forum for the development of international trade law. The alternative to WTO is isolation,

stagnation, if not economic self-destruction. Duly enriched with original membership, keenly aware of the advantages and disadvantages of globalization with its on-line experience, and endowed with a vision of the future, the Philippines now straddles the crossroads of an international strategy for economic prosperity and stability in the new millennium. Let the people, through their duly authorized elected officers, make their free choice. WHEREFORE, the petition is DISMISSED for lack of merit. SO ORDERED. Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza, Francisco, Hermosisima, Jr. and Torres, Jr., JJ., concur. Padilla and Vitug, JJ., concur in the result. Footnotes 1 In Annex "A" of her Memorandum, dated August 8, 1996, received by this Court on August 12, 1996, Philippine Ambassador to the United Nations, World Trade Organization and other international organizations Lilia R. Bautista (hereafter referred to as "Bautista Paper") submitted a "46-year Chronology" of GATT as follows: 1947 The birth of GATT. On 30 October 1947, the General Agreement on Tariffs and Trade (GATT) was signed by 23 nations at the Palais des Nations in Geneva. The Agreement contained tariff concessions agreed to in the first multilateral trade negotiations and a set of rules designed to prevent these concessions from being frustrated by restrictive trade measures. The 23 founding contracting parties were members of the Preparatory Committee established by the United Nations Economic and Social Council in 1946 to draft the charter of the International Trade Organization (ITO). The ITO was envisaged as the final leg of a triad of post-War economic agencies (the other two were the International Monetary Fund and the International Bank for Reconstruction later the World Bank).

In parallel with this task, the Committee members decided to negotiate tariff concessions among themselves. From April to October 1947, the participants completed some 123 negotiations and established 20 schedules containing the tariff reductions and bindings which became an integral part of GATT. These schedules resulting from the first Round covered some 45,000 tariff concessions and about $10 billion in trade. GATT was conceived as an interim measure that put into effect the commercial-policy provisions of the ITO. In November, delegations from 56 countries met in Havana, Cuba, to consider the to ITO draft as a whole. After long and difficult negotiations, some 53 countries signed the Final Act authenticating the text of the Havana Charter in March 1948. There was no commitment, however, from governments to ratification and, in the end, the ITO was stillborn, leaving GATT as the only international instrument governing the conduct of world trade. 1948 Entry into force. On 1 January 1948, GATT entered into force. The 23 founding members were: Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba, Czechoslovakia, France, India, Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia, Syria, South Africa, United Kingdom and the United States. The first Session of the Contracting Parties was held from February to March in Havana, Cuba. The secretariat of the Interim Commission for the ITO, which served as the ad hoc secretariat of GATT, moved from Lake Placid, New York, to Geneva. The Contracting Parties held their second session in Geneva from August to September. 1949 Second Round at Annecy. During the second Round of trade negotiations, held from April to August at Annecy, France, the contracting parties exchanged some 5,000 tariff concessions. At their third Session, they also dealt with the accession of ten more countries. 1950 Third Round at Torquay. From September 1950 to April 1951, the contracting parties exchanged some 8,700 tariff concessions in the English town, yielding tariff reduction of about 25 per cent in relation to the 1948 level. Four more countries acceded to GATT.

During the fifth Session of the Contracting Parties, the United States indicated that the ITO Charter would not be re-submitted to the US Congress; this, in effect, meant that ITO would not come into operation. 1956 Fourth Round at Geneva. The fourth Round was completed in May and produced some $2.5 billion worth of tariff reductions. At the beginning of the year, the GATT commercial policy course for officials of developing countries was inaugurated. 1958 The Haberler Report. GATT published Trends in International Trade in October. Known as the "Haberler Report" in honour of Professor Gottfried Haberler, the chairman of the panel of eminent economists, it provided initial guidelines for the work of GATT. The Contracting Parties at their 13th Sessions, attended by Ministers, subsequently established three committees in GATT: Committee I to convene a further tariff negotiating conference; Committee II to review the agricultural policies of member governments and Committee III to tackle the problem facing developing countries in their trade. The establishment of the European Economic Community during the previous year also demanded large-scale tariff negotiations under Article XXIV: 6 of the General Agreement. 1960 The Dillon Round. The fifth Round opened in September and was divided into two phases: the first was concerned with negotiations with EEC member states for the creation of a single schedule of concessions for the Community based on its Common External Tariff; and the second was a further general round of tariff negotiations. Named in honour of US Under-Secretary of State Douglas Dillon who proposed the negotiations, the Round was concluded in July 1962 and resulted in about 4,400 tariff concessions covering $4.9 billion of trade. 1961 The Short-Term Arrangement covering cotton textiles was agreed as an exception to the GATT rules. The arrangement permitted the negotiation of quota restrictions affecting the exports of cotton-producing countries. In 1962 the "Short Term" Arrangement became the "Long term" Arrangement, lasting until 1974 when the Multifibre Arrangement entered into force.

1964 The Kennedy Round. Meeting at Ministerial level, a Trade Negotiations Committee formally opened the Kennedy Round in May. In June 1967, the Round's Final Act was signed by some 50 participating countries which together accounted for 75 per cent of world trade. For the first time, negotiations departed from the productby-product approach used in the previous Rounds to an across-theboard or linear method of cutting tariffs for industrial goods. The working hypothesis of a 50 per cent target cut in tariff levels was achieved in many areas. Concessions covered an estimated total value of trade of about $410 billion. Separate agreements were reached on grains, chemical products and a Code on Anti-Dumping. 1965 A New Chapter. The early 1960s marked the accession to the general Agreement of many newly-independent developing countries. In February, the Contracting Parties, meeting in a special session, adopted the text of Part IV on Trade and Development. The additional chapter to the GATT required developed countries to accord high priority to the reduction of trade barriers to products of developing countries. A Committee on Trade and Development was established to oversee the functioning of the new GATT provisions. In the preceding year, GATT had established the International Trade Centre (ITC) to help developing countries in trade promotion and identification of potential markets. Since 1968, the ITC had been jointly operated by GATT and the UN Conference on Trade and Development (UNCTAD). 1973 The Tokyo Round. The seventh Round was launched by Ministers in September at the Japanese capital. Some 99 countries participated in negotiating a comprehensive body of agreements covering both tariff and non-tariff matters. At the end of the Round in November 1979, participants exchanged tariff reductions and bindings which covered more than $300 billion of trade. As a result of these cuts, the weighted average tariff on manufactured goods in the world's nine major industrial markets declined from 7.0 to 4.7 per cent. Agreements were reached in the following areas: subsidies and countervailing measures, technical barriers to trade, import licensing procedures, government procurement, customs valuation, a revised anti-dumping code, trade in bovine meat, trade in dairy products and trade in civil aircraft. The first concrete result of the Round was the reduction of import duties and other trade barriers by industrial

countries on tropical products exported by developing countries. 1974 On 1 January 1974, the Arrangement Regarding International Trade in Textiles, otherwise known as the Multifibre Arrangement (MFA), entered into force. It superseded the arrangements that had been governing trade in cotton textiles since 1961. The MFA seeks to promote the expansion and progressive liberalization of trade in textile products while at the same time avoiding disruptive effects in individual markets and lines of production. The MFA was extended in 1978, 1982, 1986, 1991 and 1992. MFA members account for most of the world exports of textiles and clothing which in 1986 amounted to US$128 billion. 1982 Ministerial Meeting. Meeting for the first time in nearly ten years, the GATT Ministers in November at Geneva reaffirmed the validity of GATT rules for the conduct of international trade and committed themselves to combating protectionist pressures. They also established a wide-ranging work programme for the GATT which was to lay down the groundwork for a new Round 1986. The Uruguay Round. The GATT Trade Ministers meeting at Punta del Este, Uruguay, launched the eighth Round of trade negotiations on 20 September. The Punta del Este Declaration, while representing a single political undertaking, was divided into two sections. The first covered negotiations on trade in goods and the second initiated negotiation on trade in services. In the area of trade in goods, the Ministers committed themselves to a "standstill" on new trade measures inconsistent with their GATT obligations and to a "rollback" programme aimed at phasing out existing inconsistent measures. Envisaged to last four years, negotiations started in early February 1987 in the following areas tariffs, non-tariff measures, tropical products, natural resource-based products, textiles and clothing, agriculture, subsidies, safe-guards, trade-related aspects of intellectual property rights including trade in counterfeit goods, and trade-related investment measures. The work of other groups included a review of GATT articles, the GATT dispute settlement procedure, the Tokyo Round agreements, as well as the functioning of the GATT system as a whole. 1994 "GATT 1994" is the updated version of GATT 1947 and takes into account the substantive and institutional changes negotiated in

the Uruguay Round GATT 1994 is an integral part of the World Trade Organization established on 1 January 1995. It is agreed that there be a one year transition period during which certain GATT 1947 bodies and commitments would co-exist with those of the World Trade Organization. 2 The Final Act was signed by representatives of 125 entities, namely Algeria, Angola, Antigua and Barbuda, Argentine Republic, Australia, Republic of Austria, State of Bahrain, People's Republic of Bangladesh, Barbados, The Kingdom of Belgium Belize, Republic of Benin, Bolivia, Botswana, Brazil, Brunei Darussalam, Burkina Faso, Burundi, Cameroon, Canada, Central African Republic, Chad, Chile, People's Republic of China, Colombia, Congo, Costa Rica, Republic of Cote d'Ivoire, Cuba, Cyprus, Czech Republic, Kingdom of Denmark, Commonwealth of Dominica, Dominican Republic, Arab Republic of Egypt, El Salvador, European Communities, Republic of Fiji, Finland, French Republic, Gabonese Republic, Gambia, Federal Republic of Germany, Ghana, Hellenic Republic, Grenada, Guatemala, Republic of Guinea-Bissau, Republic of Guyana, Haiti, Honduras, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, State of Israel, Italian Republic, Jamaica, Japan, Kenya, Korea, State of Kuwait, Kingdom of Lesotho, Principality of Liechtenstein, Grand Duchy of Luxembourg, Macau, Republic of Madagascar, Republic of Malawi, Malaysia, Republic of Maldives, Republic of Mali, Republic of Malta, Islamic Republic of Mauritania, Republic of Mauritius, United Mexican States, Kingdom of Morocco, Republic of Mozambique, Union of Myanmar, Republic of Namibia, Kingdom of the Netherlands, New Zealand, Nicaragua, Republic of Niger, Federal Republic of Nigeria, Kingdom of Norway, Islamic Republic of Pakistan, Paraguay, Peru, Philippines, Poland, Potuguese Republic, State of Qatar, Romania, Rwandese Republic, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Senegal, Sierra Leone, Singapore, Slovak Republic, South Africa, Kingdom of Spain, Democratic Socialist Republic of Sri Lanka, Republic of Surinam, Kingdom of Swaziland, Kingdom of Sweden, Swiss Confederation, United Republic of Tanzania, Kingdom of Thailand, Togolese Republic, Republic of Trinidad and Tobago, Tunisia, Turkey, Uganda, United Arab Emirates, United Kingdom of Great Britain and Northern Ireland, United States of America, Eastern Republic of Uruguay, Venezuela, Republic of Zaire, Republic of Zambia, Republic of

Zimbabwe; see pp. 6-25, Vol. 1, Uruguay Round of Multilateral Trade Negotiations. 3 11 August 1994 The Honorable Members Senate Through Senate President Edgardo Angara Manila Ladies and Gentlemen: I have the honor to forward herewith an authenticated copy of the Uruguay Round Final Act signed by Department of Trade and Industry Secretary Rizalino S. Navarro for the Philippines on 15 April 1994 in Marrakesh, Morocco. The Uruguay Round Final Act aims to liberalize and expand world trade and strengthen the interrelationship between trade and economic policies affecting growth and development. The Final Act will improve Philippine access to foreign markets, especially its major trading partners through the reduction of tariffs on its exports particularly agricultural and industrial products. These concessions may be availed of by the Philippines, only if it is a member of the World Trade Organization. By GATT estimates, the Philippines can acquire additional export from $2.2 to $2.7 Billion annually under Uruguay Round. This will be on top of the normal increase in exports that the Philippines may experience. The Final Act will also open up new opportunities for the services sector in such areas as the movement of personnel, (e.g. professional services and construction services), cross-border supply (e.g. computer-related services), consumption abroad (e.g. tourism, convention services, etc.) and commercial presence. The clarified and improved rules and disciplines on anti-dumping and countervailing measures will also benefit Philippine exporters by

reducing the costs ad uncertainty associated with exporting while at the same time providing means for domestic industries to safeguard themselves against unfair imports. Likewise, the provision of adequate protection for intellectual property rights is expected to attract more investments into the country and to make it less vulnerable to unilateral actions by its trading partners (e.g. Sec. 301 of the United States' Omnibus Trade Law). In view of the foregoing, the Uruguay Round Final Act is hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the Constitution. A draft of a proposed Resolution giving its concurrence to the aforesaid Agreement is enclosed. Very truly yours, (SGD.) FIDEL V. RAMOS 4 11 August 1994 The Honorable Members Senate Through Senate President Edgardo Angara Manila Ladies and Gentlemen: I have the honor to forward herewith an authenticated copy of the Uruguay Round Final Act signed by Department of Trade and Industry Secretary Rizalino S. Navarro for the Philippines on 13 April 1994 in Marrakech (sic), Morocco. Members of the trade negotiations committee, which included the Philippines, agreed that the Agreement Establishing the World Trade Organization, the Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial Services embody the

results of their negotiations and form an integral part of the Uruguay Round Final Act. By signing the Uruguay Round Final Act, the Philippines, through Secretary Navarro, agreed: (a) To submit the Agreement Establishing the World Trade Organization to the Senate for its concurrence pursuant to Section 21, Article VII of the Constitution; and (b) To adopt the Ministerial Declarations and Decisions. The Uruguay Round Final Act aims to liberalize and expand world trade and strengthen the interrelationship between trade and economic policies affecting growth and development. The Final Act will improve Philippine access to foreign markets, especially its major trading partners through the reduction of tariffs on its exports particularly agricultural and industrial products. These concessions may be availed of by the Philippines, only if it is a member of the World Trade Organization. By GATT estimates, the Philippines can acquire additional export revenues from $2.2 to $2.7 Billion annually under Uruguay Round. This will be on top of the normal increase in the exports that the Philippines may experience. The Final Act will also open up new opportunities for the services sector in such areas as the movement of personnel, (e.g., professional services and construction services), cross-border supply (e.g., computer-related services), consumption abroad (e.g., tourism, convention services, etc.) and commercial presence. The clarified and improved rules ad disciplines on anti-dumping and countervailing measures will also benefit Philippine exporters by reducing the costs and uncertainty associated with exporting while at the same time providing a means for domestic industries to safeguard themselves against unfair imports. Likewise, the provision of adequate protection for intellectual property rights is expected to attract more investments into the country and to make it a less vulnerable to unilateral actions by its trading partners (e.g., Sec. 301 of the United States Omnibus Trade Law).

In view of the foregoing, the Uruguay Round Final Act, the Agreement Establishing the World Trade Organization, the Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial Services, as embodied in the Uruguay Round Final Act and forming and integral part thereof are hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the Constitution. A draft of a proposed Resolution giving its concurrence to the aforesaid Agreement is enclosed. Very truly yours, (SGD.) FIDEL V. RAMOS

5 December 9, 1994 HON. EDGARDO J. ANGARA Senate President Senate Manila Dear Senate President Angara: Pursuant to the provisions of Sec. 26 (2) Article VI of the Constitution, I hereby certify to the necessity of the immediate adoption of P.S. 1083 entitled: CONCURRING IN THE RATIFICATION OF THE AGREEMENT ESTABLISHING THE WORLD TRADE ORGANIZATION to meet a public emergency consisting of the need for immediate membership in the WTO in order to assure the benefits to the Philippine economy arising from such membership. Very truly yours,

(SGD.) FIDEL V. RAMOS 6 Attached as Annex A, Petition; rollo, p. 52. P.S. 1083 is the forerunner of assailed Senate Resolution No. 97. It was prepared by the Committee of the Whole on the General Agreement on Tariffs and Trade chaired by Sen. Blas F. Ople and co-chaired by Sen. Gloria Macapagal-Arroyo; see Annex C, Compliance of petitioners dated January 28, 1997. 7 The Philippines is thus considered an original or founding member of WTO, which as of July 26, 1996 had 123 members as follows: Antigua and Barbuda, Argentina, Australia, Austria, Bahrain, Bangladesh, Barbados, Belguim, Belize, Benin, Bolivia, Botswana, Brazil, Brunei Darussalam, Burkina Faso, Burundi, Cameroon, Canada, Central African Republic, Chili, Colombia, Costa Rica, Cote d'Ivoire, Cuba, Cyprus, Czech Republic, Denmark, Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, European Community, Fiji, Finland, France, Gabon, Germany, Ghana, Greece, Grenada, Guatemala, Guinea, Guinea Bissau, Guyana, Haiti, Honduras, Honkong, Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kenya, Korea, Kuwait, Lesotho, Liechtenstein, Luxembourg, Macau, Madagascar, Malawi, Malaysia, Maldives, Mali, Malta, Mauritania, Mauritius, Mexico, Morocco, Mozambique, Myanmar, Namibia, Netherlands for the Kingdom in Europe and for the Netherlands Antilles, New Zealand, Nicaragua, Nigeria, Norway, Pakistan, Papua New Guinea, Paraguay, Peru, Philippines, Poland, Portugal, Qatar, Romania, Rwanda, Saint Kitts and Nevis, Saint Lucia, Saint Vincent & the Grenadines, Senegal, Sierra Leone, Singapore, Slovak Republic, Slovenia, Solomon Islands, South Africa, Spain, Sri Lanka, Surinam, Swaziland, Sweden, Switzerland, Tanzania, Thailand, Togo, Trinidad and Tobago, Tunisia, Turkey, Uganda, United Arab Emirates, United Kingdom, United States, Uruguay, Venezuela, Zambia, and Zimbabwe. See Annex A, Bautista Paper, infra. 8 Page 6; rollo p. 261. 9 In compliance, Ambassador Bautista submitted to the Court on August 12, 1996, a Memorandum (the "Bautista Paper") consisting of 56 pages excluding annexes. This is the same document mentioned

in footnote no. 1. 10 Memorandum for Respondents, p. 13; rollo, p. 268. 11 Cf . Kilosbayan Incorporated vs. Morato, 246 SCRA 540, July 17, 1995 for a discussion on locus standi. See also the Concurring Opinion of Mr. Justice Vicente V. Mendoza in Tatad vs. Garcia, Jr., 243 SCRA 473, April 6, 1995, as well as Kilusang Mayo Uno Labor Center vs. Garcia, Jr., 239 SCRA 386, 414, December 23, 1994. 12 Aquino, Jr. vs. Ponce Enrile, 59 SCRA 183, 196, September 17, 1974, cited in Bondoc vs. Pineda, 201 SCRA 792, 795, September 26, 1991. 13 Guingona, Jr. vs. Gonzales, 219 SCRA 326, 337, March 1, 1993. 14 See Taada and Macapagal vs. Cuenco, et al., 103 Phil. 1051 for a discussion on the scope of "political question." 15 Section 1, Article VIII, (par. 2). 16 In a privilege speech on May 17, 1993, entitled "Supreme Court Potential Tyrant?" Senator Arturo Tolentino concedes that this new provision gives the Supreme Court a duty "to intrude into the jurisdiction of the Congress or the President." 17 I Record of the Constitutional Commission 436. 18 Cf . Daza vs. Singson, 180 SCRA 496, December 21, 1989. 19 Memorandum for Petitioners, pp. 14-16; rollo, pp. 204-206. 20 Par. 4, Article XVI, WTO Agreement, Uruguay Round of Multilateral Trade Negotiations, Vol. 1. p. 146. 21 Also entitled "Declaration of Principles." The nomenclature in the 1973 Charter is identical with that in the 1987's. 22 Philippine Political Law, 1962 Ed., p. 116. 23 Bernas, The Constitution of the Philippines: A Commentary, Vol. II, 1988 Ed., p. 2. In the very recent case of Manila Prince Hotel v.

GSIS, G.R. No. 122156, February 3, 1997, p. 8, it was held that "A provision which lays down a general principle, such as those found in Art. II of the 1987 Constitution, is usually not self-executing." 24 246 SCRA 540, 564, July 17, 1995. See also Tolentino vs. Secretary of Finance, G.R. No. 115455 and consolidated cases, August 25, 1995. 25 197 SCRA 52, 68, May 14, 1991. 26 224 SCRA 792, 817, July 30, 1993. 27 Sec. 10, Article XII. 28 Sec. 12, Article XII. 29 Sec. 19, Art. II. 30 Sec. 13, Art. XII. 31 G.R. No. 122156, February 3, 1997, pp. 13-14. 32 Sec. 1, Art. XII. 33 Bautista Paper, p. 19. 34 Preamble, WTO Agreement p. 137, Vol. 1, Uruguay Round of Multilateral Trade Negotiations. Emphasis supplied. 35 Sec. 19, Article II, Constitution. 36 III Records of the Constitutional Commission 252. 37 Sec. 13, Article XII, Constitution. 38 Justice Isagani A. Cruz, Philippine Political Law, 1995 Ed., p. 13, quoting his own article entitled, "A Quintessential Constitution" earlier published in the San Beda Law Journal, April 1972; emphasis supplied. 39 Par. 4, Article XVI (Miscellaneous Provisions), WTO Agreement, p. 146, Vol. 1, Uruguay Round of Multilateral Trade Negotiations.

40 Memorandum for the Petitioners, p. 29; rollo, p. 219. 41 Sec. 24, Article VI, Constitution. 42 Subsection (2), Sec. 28, Article VI, Constitution. 43 Sec. 2, Article II, Constitution. 44 Cruz, Philippine Political Law, 1995 Ed., p. 55. 45 Salonga and Yap, op cit 305. 46 Salonga, op. cit., p. 287. 47 Quoted in Paras and Paras, Jr., International Law and World Politics, 1994 Ed., p. 178. 47-A Reagan vs. Commission of Internal Revenue, 30 SCRA 968, 973, December 27, 1969. 48 Trebilcock and Howse. The Regulation of International Trade, p. 14, London, 1995, cited on p. 55-56, Bautista Paper. 49 Uruguay Round of Multilateral Trade Negotiations, Vol. 31, p. 25445. 50 Item 5, Sec. 5, Article VIII, Constitution. 51 Uruguay Round of Multilateral Trade Negotiations, Vol. 31, p. 25445. 52 Bautista Paper, p. 13. 53 See footnote 3 of the text of this letter. 54 Salonga and Yap, op cit., pp. 289-290. 55 The full text, without the signatures, of the Final Act is as follows: Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations

1. Having met in order to conclude the Uruguay Round of Multilateral Trade Negotiations, representatives of the governments and of the European Communities, members of the Trade Negotiations Committee, agree that the Agreement Establishing the World Trade Organization (referred to in the Final Act as the "WTO Agreement"), the Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial Services, as annexed hereto, embody the results of their negotiations and form an integral part of this Final Act. 2. By signing to the present Final Act, the representatives agree. (a) to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities with a view to seeking approval of the Agreement in accordance with their procedures; and (b) to adopt the Ministerial Declarations and Decisions. 3. The representatives agree on the desirability of acceptance of the WTO Agreement by all participants in the Uruguay Round of Multilateral Trade Negotiations (hereinafter referred to as "participants") with a view to its entry into force by 1 January 1995, or as early as possible thereafter. Not later than late 1994, Ministers will meet, in accordance with the final paragraph of the Punta del Este Ministerial Declarations, to decide on the international implementation of the results, including the timing of their entry into force. 4. the representatives agree that the WTO Agreement shall be open for acceptance as a whole, by signature or otherwise, by all participants pursuant to Article XIV thereof. The acceptance and entry into force of a Plurilateral Trade Agreement included in Annex 4 of the WTO Agreement shall be governed by the provisions of that Plurilateral Trade Agreement. 5. Before accepting the WTO Agreement, participants which are not contracting parties to the General Agreement on Tariffs and Trade must first have concluded negotiations for their accession to the General Agreement and become contracting parties thereto. For participants which are not contracting parties to the general Agreement as of the date of the Final Act, the Schedules are not definitive and shall be subsequently completed for the purpose of

their accession to the General Agreement and acceptance of the WTO Agreement. 6. This Final Act and the texts annexed hereto shall be deposited with the Director-General to the CONTRACTING PARTIES to the General Agreement on Tariffs and Trade who shall promptly furnish to each participant a certified copy thereof. DONE at Marrakesh this fifteenth day of April one thousand nine hundred and ninety-four, in a single copy, in the English, French and Spanish languages, each text being authentic. 56 Bautista Paper, p. 16. 57 Baustista Paper, p. 16. 58 Uruguay Round of Multilateral Trade Negotiations, Vol. I, pp. 137138. 59 See footnote 3 for complete text. 60 Taken from pp. 63-85, "Respondent" Memorandum. 61 Zarate vs. Olegario, G.R. No. 90655, October 7, 1996. 62 San Sebastian College vs. Court of Appeals, 197 SCRA 138, 144, May 15, 1991; Commissioner of Internal Revenue vs. Court of Tax Appeals, 195 SCRA 444, 458 March 20, 1991; Simon vs. Civil Service Commission, 215 SCRA 410, November 5, 1992; Bustamante vs. Commissioner on Audit, 216 SCRA 134, 136, November 27, 1992. 63 Paredes vs. Civil Service Commission, 192 SCRA 84, 94, December 4, 1990. 64 Sec. 21. No treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the Members of the Senate." 65 Reader's Digest, December 1996 issue, p. 28.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 159085 February 3, 2004

SANLAKAS, represented by REP. J.V. Bautista, and PARTIDO NG MANGGAGAWA, represented by REP. RENATO MAGTUBO petitioners, vs EXECUTIVE SECRETARY SECRETARY ANGELO REYES, GENERAL NARCISO ABAYA, DIR. GEN. HERMOGENES EBDANE, respondents. x------------------------x G.R. No. 159103 February 3, 2004

SOCIAL JUSTICE SOCIETY (SJS) OFFICERS/MEMBERS namely, SAMSON S. ALCANTARA, ED VINCENT S. ALBANO, RENE B. GOROSPE, EDWIN R. SANDOVAL and RODOLFO D. MAPILE, petitioners, vs HON. EXECUTIVE SECRETARY ALBERTO G. ROMULO, HON. SECRETARY OF JUSTICE SIMEON DATUMANONG, HON. SECRETARY OF NATIONAL DEFENSE ANGELO REYES, and HON. SECRETARY JOSE LINA, JR., respondents. x------------------------x G.R. No. 159185 February 3, 2004

REP. ROLEX T. SUPLICO, REP. CARLOS M. PADILLA, REP. CELSO L. LOBREGAT, REP. HUSSIN U. AMIN, REP. ABRAHAM KAHLIL B. MITRA, REP. EMMYLOU J. TALINO-SANTOS, and REP. GEORGILU R. YUMUL-HERMIDA, petitioners, vs PRESIDENT GLORIA MACAPAGAL-ARROYO; and EXECUTIVE SECRETARY ALBERTO G. ROMULO, respondents. x------------------------x G.R. No. 159196 February 3, 2004

AQUILINO Q. PIMENTEL, JR. as a Member of the Senate,

petitioner, vs SECRETARY ALBERTO ROMULO, AS EXECUTIVE SECRETARY; SECRETARY ANGELO REYES, AS SECRETARY OF NATIONAL DEFENSE; GENERAL NARCISO ABAYA, AS CHIEF OF STAFF OF THE ARMED FORCES; SECRETARY JOSE LINA, et al., respondents. DECISION TINGA, J.: They came in the middle of the night. Armed with high-powered ammunitions and explosives, some three hundred junior officers and enlisted men of the Armed Forces of the Philippines (AFP) stormed into the Oakwood Premiere apartments in Makati City in the wee hours of July 27, 2003. Bewailing the corruption in the AFP, the soldiers demanded, among other things, the resignation of the President, the Secretary of Defense and the Chief of the Philippine National Police (PNP).1 In the wake of the Oakwood occupation, the President issued later in the day Proclamation No. 427 and General Order No. 4, both declaring "a state of rebellion" and calling out the Armed Forces to suppress the rebellion. Proclamation No. 427 reads in full: PROCLAMATION NO. 427 DECLARING A STATE OF REBELLION WHEREAS, certain elements of the Armed Forces of the Philippines, armed with high-powered firearms and explosives, acting upon the instigation and command and direction of known and unknown leaders, have seized a building in Makati City, put bombs in the area, publicly declared withdrawal of support for, and took arms against the duly constituted Government, and continue to rise publicly and show open hostility, for the purpose of removing allegiance to the Government certain bodies of the Armed Forces of the Philippines and the Philippine National Police, and depriving the President of the Republic of the Philippines, wholly or partially, of her powers and prerogatives which constitute the crime of rebellion punishable under Article 134 of the Revised Penal Code, as amended;

WHEREAS, these misguided elements of the Armed Forces of the Philippines are being supported, abetted and aided by known and unknown leaders, conspirators and plotters in the government service and outside the government; WHEREAS, under Section 18, Article VII of the present Constitution, whenever it becomes necessary, the President, as the Commanderin-Chief of the Armed Forces of the Philippines, may call out such Armed Forces to suppress the rebellion; NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, by virtue of the powers vested in me by law, hereby confirm the existence of an actual and on-going rebellion, compelling me to declare a state of rebellion. In view of the foregoing, I am issuing General Order No. 4 in accordance with Section 18, Article VII of the Constitution, calling out the Armed Forces of the Philippines and the Philippine National Police to immediately carry out the necessary actions and measures to suppress and quell the rebellion with due regard to constitutional rights. General Order No. 4 is similarly worded: GENERAL ORDER NO. 4 DIRECTING THE ARMED FORCES OF THE PHILIPPINES AND THE PHILIPPINE NATIONAL POLICE TO SUPPRESS REBELLION WHEREAS, certain elements of the Armed Forces of the Philippines, armed with high-powered firearms and explosives, acting upon the instigation and command and direction of known and unknown leaders, have seized a building in Makati City, put bombs in the area, publicly declared withdrawal of support for, and took arms against the duly constituted Government, and continue to rise publicly and show open hostility, for the purpose of removing allegiance to the Government certain bodies of the Armed Forces of the Philippines and the Philippine National Police, and depriving the President of the Republic of the Philippines, wholly or partially, of her powers and prerogatives which constitute the crime of rebellion punishable under Article 134 et seq. of the Revised Penal Code, as amended;

WHEREAS, these misguided elements of the Armed Forces of the Philippines are being supported, abetted and aided by known and unknown leaders, conspirators and plotters in the government service and outside the government; WHEREAS, under Section 18, Article VII of the present Constitution, whenever it becomes necessary, the President, as the Commanderin-Chief of all Armed Forces of the Philippines, may call out such Armed Forces to suppress the rebellion; NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, by virtue of the powers vested in me by the Constitution as President of the Republic of the Philippines and Commander-in-Chief of all the armed forces of the Philippines and pursuant to Proclamation No. 427 dated July 27, 2003, do hereby call upon the Armed Forces of the Philippines and the Philippine National Police to suppress and quell the rebellion. I hereby direct the Chief of the Armed Forces of the Philippines and the Chief of the Philippine National Police and the officers and men of the Armed Forces of the Philippines and the Philippine National Police to immediately carry out the necessary and appropriate actions and measures to suppress and quell the rebellion with due regard to constitutional rights. By the evening of July 27, 2003, the Oakwood occupation had ended. After hours-long negotiations, the soldiers agreed to return to barracks. The President, however, did not immediately lift the declaration of a state of rebellion and did so only on August 1, 2003, through Proclamation No. 435: DECLARING THAT THE STATE OF REBELLION HAS CEASED TO EXIST WHEREAS, by virtue of Proclamation No. 427 dated July 27, 2003, a state of rebellion was declared; WHEREAS, by virtue of General Order No. 4 dated July 27, 2003, which was issued on the basis of Proclamation No. 427 dated July 27, 2003, and pursuant to Article VII, Section 18 of the Constitution, the Armed Forces of the Philippines and the Philippine National

Police were directed to suppress and quell the rebellion; WHEREAS, the Armed Forces of the Philippines and the Philippine National Police have effectively suppressed and quelled the rebellion. NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Philippines, by virtue of the powers vested in me by law, hereby declare that the state of rebellion has ceased to exist. In the interim, several petitions were filed before this Court challenging the validity of Proclamation No. 427 and General Order No. 4. In G.R. No. 159085 (Sanlakas and PM v. Executive Secretary, et al.),2 party-list organizations Sanlakas and Partido ng Manggagawa (PM), contend that Section 18, Article VII of the Constitution does not require the declaration of a state of rebellion to call out the armed forces.3 They further submit that, because of the cessation of the Oakwood occupation, there exists no sufficient factual basis for the proclamation by the President of a state of rebellion for an indefinite period.4 Petitioners in G.R. No. 159103 (SJS Officers/Members v. Hon. Executive Secretary, et al.) are officers/members of the Social Justice Society (SJS), "Filipino citizens, taxpayers, law professors and bar reviewers."5 Like Sanlakas and PM, they claim that Section 18, Article VII of the Constitution does not authorize the declaration of a state of rebellion.6 They contend that the declaration is a "constitutional anomaly" that "confuses, confounds and misleads" because "[o]verzealous public officers, acting pursuant to such proclamation or general order, are liable to violate the constitutional right of private citizens."7 Petitioners also submit that the proclamation is a circumvention of the report requirement under the same Section 18, Article VII, commanding the President to submit a report to Congress within 48 hours from the proclamation of martial law.8 Finally, they contend that the presidential issuances cannot be construed as an exercise of emergency powers as Congress has not delegated any such power to the President.9 In G.R. No. 159185 (Rep. Suplico et al. v. President MacapagalArroyo and Executive Secretary Romulo), petitioners brought suit as

citizens and as Members of the House of Representatives whose rights, powers and functions were allegedly affected by the declaration of a state of rebellion.10 Petitioners do not challenge the power of the President to call out the Armed Forces.11 They argue, however, that the declaration of a state of rebellion is a "superfluity," and is actually an exercise of emergency powers.12 Such exercise, it is contended, amounts to a usurpation of the power of Congress granted by Section 23 (2), Article VI of the Constitution.13 In G.R. No. 159196 (Pimentel v. Romulo, et al.), petitioner Senator assails the subject presidential issuances as "an unwarranted, illegal and abusive exercise of a martial law power that has no basis under the Constitution."14 In the main, petitioner fears that the declaration of a state of rebellion "opens the door to the unconstitutional implementation of warrantless arrests" for the crime of rebellion.15 Required to comment, the Solicitor General argues that the petitions have been rendered moot by the lifting of the declaration.16 In addition, the Solicitor General questions the standing of the petitioners to bring suit.17 The Court agrees with the Solicitor General that the issuance of Proclamation No. 435, declaring that the state of rebellion has ceased to exist, has rendered the case moot. As a rule, courts do not adjudicate moot cases, judicial power being limited to the determination of "actual controversies."18 Nevertheless, courts will decide a question, otherwise moot, if it is "capable of repetition yet evading review."19 The case at bar is one such case. Once before, the President on May 1, 2001 declared a state of rebellion and called upon the AFP and the PNP to suppress the rebellion through Proclamation No. 38 and General Order No. 1. On that occasion, "'an angry and violent mob armed with explosives, firearms, bladed weapons, clubs, stones and other deadly weapons' assaulted and attempted to break into Malacaang."20 Petitions were filed before this Court assailing the validity of the President's declaration. Five days after such declaration, however, the President lifted the same. The mootness of the petitions in Lacson v. Perez and accompanying cases21 precluded this Court from addressing the constitutionality of the declaration.

To prevent similar questions from reemerging, we seize this opportunity to finally lay to rest the validity of the declaration of a state of rebellion in the exercise of the President's calling out power, the mootness of the petitions notwithstanding. Only petitioners Rep. Suplico et al. and Sen. Pimentel, as Members of Congress, have standing to challenge the subject issuances. In Philippine Constitution Association v. Enriquez,22 this Court recognized that: To the extent the powers of Congress are impaired, so is the power of each member thereof, since his office confers a right to participate in the exercise of the powers of that institution. An act of the Executive which injures the institution of Congress causes a derivative but nonetheless substantial injury, which can be questioned by a member of Congress. In such a case, any member of Congress can have a resort to the courts. Petitioner Members of Congress claim that the declaration of a state of rebellion by the President is tantamount to an exercise of Congress' emergency powers, thus impairing the lawmakers' legislative powers. Petitioners also maintain that the declaration is a subterfuge to avoid congressional scrutiny into the President's exercise of martial law powers. Petitioners Sanlakas and PM, and SJS Officers/Members, have no legal standing or locus standi to bring suit. "Legal standing" or locus standi has been defined as a personal and substantial interest in the case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged. The gist of the question of standing is whether a party alleges "such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions."23 Petitioners Sanlakas and PM assert that: 2. As a basic principle of the organizations and as an important plank in their programs, petitioners are committed to assert, defend,

protect, uphold, and promote the rights, interests, and welfare of the people, especially the poor and marginalized classes and sectors of Philippine society. Petitioners are committed to defend and assert human rights, including political and civil rights, of the citizens. 3. Members of the petitioner organizations resort to mass actions and mobilizations in the exercise of their Constitutional rights to peaceably assemble and their freedom of speech and of expression under Section 4, Article III of the 1987 Constitution, as a vehicle to publicly ventilate their grievances and legitimate demands and to mobilize public opinion to support the same.24 [Emphasis in the original.] Petitioner party-list organizations claim no better right than the Laban ng Demokratikong Pilipino, whose standing this Court rejected in Lacson v. Perez: petitioner has not demonstrated any injury to itself which would justify the resort to the Court. Petitioner is a juridical person not subject to arrest. Thus, it cannot claim to be threatened by a warrantless arrest. Nor is it alleged that its leaders, members, and supporters are being threatened with warrantless arrest and detention for the crime of rebellion. Every action must be brought in the name of the party whose legal rights has been invaded or infringed, or whose legal right is under imminent threat of invasion or infringement. At best, the instant petition may be considered as an action for declaratory relief, petitioner claiming that it[']s right to freedom of expression and freedom of assembly is affected by the declaration of a "state of rebellion" and that said proclamation is invalid for being contrary to the Constitution. However, to consider the petition as one for declaratory relief affords little comfort to petitioner, this Court not having jurisdiction in the first instance over such a petition. Section 5 [1], Article VIII of the Constitution limits the original jurisdiction of the court to cases affecting ambassadors, other public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.25 Even assuming that petitioners are "people's organizations," this

status would not vest them with the requisite personality to question the validity of the presidential issuances, as this Court made clear in Kilosbayan v. Morato:26 The Constitution provides that "the State shall respect the role of independent people's organizations to enable the people to pursue and protect, within the democratic framework, their legitimate and collective interests and aspirations through peaceful and lawful means," that their right to "effective and reasonable participation at all levels of social, political, and economic decision-making shall not be abridged." (Art. XIII, 15-16) These provisions have not changed the traditional rule that only real parties in interest or those with standing, as the case may be, may invoke the judicial power. The jurisdiction of this Court, even in cases involving constitutional questions, is limited by the "case and controversy" requirement of Art. VIII, 5. This requirement lies at the very heart of the judicial function. It is what differentiates decisionmaking in the courts from decisionmaking in the political departments of the government and bars the bringing of suits by just any party.27 That petitioner SJS officers/members are taxpayers and citizens does not necessarily endow them with standing. A taxpayer may bring suit where the act complained of directly involves the illegal disbursement of public funds derived from taxation.28 No such illegal disbursement is alleged. On the other hand, a citizen will be allowed to raise a constitutional question only when he can show that he has personally suffered some actual or threatened injury as a result of the allegedly illegal conduct of the government; the injury is fairly traceable to the challenged action; and the injury is likely to be redressed by a favorable action.29 Again, no such injury is alleged in this case. Even granting these petitioners have standing on the ground that the issues they raise are of transcendental importance, the petitions must fail. It is true that for the purpose of exercising the calling out power the Constitution does not require the President to make a declaration of a

state of rebellion. Section 18, Article VII provides: Sec. 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, when the public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law. Within fortyeight hours from the proclamation of martial law or the suspension of the writ of habeas corpus, the President shall submit a report in person or in writing to the Congress. The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such proclamation or suspension, which revocation shall not be set aside by the President. Upon the initiative of the President, the Congress may, in the same manner, extend such proclamation or suspension for a period to be determined by the Congress, if the invasion or rebellion shall persist and public safety requires it. The Congress, if not in session, shall, within twenty-four hours following such proclamation or suspension, convene in accordance with its rules without need of a call. The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual basis for the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus 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 the jurisdiction on military courts and agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of the writ. The suspension of the privilege of the writ shall apply only to persons judicially charged for rebellion or offenses inherent in or directly connected with invasion. During the suspension of the privilege of the writ, any person thus

arrested or detained shall be judicially charged within three days, otherwise he shall be released. [Emphasis supplied.] The above provision grants the President, as Commander-in-Chief, a "sequence" of "graduated power[s]."30 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. In the exercise of the latter two powers, the Constitution requires the concurrence of two conditions, namely, an actual invasion or rebellion, and that public safety requires the exercise of such power.31 However, as we observed in Integrated Bar of the Philippines v. Zamora,32 "[t]hese conditions are not required in the exercise of the calling out power. The only criterion is that 'whenever it becomes necessary,' the President may call the armed forces 'to prevent or suppress lawless violence, invasion or rebellion.'" Nevertheless, it is equally true that Section 18, Article VII does not expressly prohibit the President from declaring a state of rebellion. Note that the Constitution vests the President not only with Commander-in-Chief powers but, first and foremost, with Executive powers. Section 1, Article VII of the 1987 Philippine Constitution states: "The executive power shall be vested in the President." As if by exposition, Section 17 of the same Article provides: "He shall ensure that the laws be faithfully executed." The provisions trace their history to the Constitution of the United States. The specific provisions of the U.S. Constitution granting the U.S. President executive and commander-in-chief powers have remained in their original simple form since the Philadelphia Constitution of 1776, Article II of which states in part: Section 1. 1. The Executive Power shall be vested in a President of the United States of America . . . . .... Section 2. 1. The President shall be Commander in Chief of the Army and Navy of the United States. . . .

.... Section 3. he shall take care that the laws be faithfully executed. [Article II Executive Power] Recalling in historical vignettes the use by the U.S. President of the above-quoted provisions, as juxtaposed against the corresponding action of the U.S. Supreme Court, is instructive. Clad with the prerogatives of the office and endowed with sovereign powers, which are drawn chiefly from the Executive Power and Commander-in-Chief provisions, as well as the presidential oath of office, the President serves as Chief of State or Chief of Government, Commander-inChief, Chief of Foreign Relations and Chief of Public Opinion.33 First to find definitive new piers for the authority of the Chief of State, as the protector of the people, was President Andrew Jackson. Coming to office by virtue of a political revolution, Jackson, as President not only kept faith with the people by driving the patricians from power. Old Hickory, as he was fondly called, was the first President to champion the indissolubility of the Union by defeating South Carolina's nullification effort.34 The Federal Tariff Acts of 1828 and 1832 that Congress enacted did not pacify the hotspurs from South Carolina. Its State Legislature ordered an election for a convention, whose members quickly passed an Ordinance of Nullification. The Ordinance declared the Tariff Acts unconstitutional, prohibited South Carolina citizens from obeying them after a certain date in 1833, and threatened secession if the Federal Government sought to oppose the tariff laws. The Legislature then implemented the Ordinance with bristling punitive laws aimed at any who sought to pay or collect customs duties.35 Jackson bided his time. His task of enforcement would not be easy. Technically, the President might send troops into a State only if the Governor called for help to suppress an insurrection, which would not occur in the instance. The President could also send troops to see to it that the laws enacted by Congress were faithfully executed. But these laws were aimed at individual citizens, and provided no enforcement machinery against violation by a State. Jackson prepared to ask Congress for a force bill.36

In a letter to a friend, the President gave the essence of his position. He wrote: ". . . when a faction in a State attempts to nullify a constitutional law of Congress, or to destroy the Union, the balance of the people composing this Union have a perfect right to coerce them to obedience." Then in a Proclamation he issued on December 10, 1832, he called upon South Carolinians to realize that there could be no peaceable interference with the execution of the laws, and dared them, "disunion by armed force is treason. Are you ready to incur its guilt?"37 The Proclamation frightened nullifiers, non-nullifiers and tight-rope walkers. Soon, State Legislatures began to adopt resolutions of agreement, and the President announced that the national voice from Maine on the north to Louisiana on the south had declared nullification and accession "confined to contempt and infamy."38 No other President entered office faced with problems so formidable, and enfeebled by personal and political handicaps so daunting, as Abraham Lincoln. Lincoln believed the President's power broad and that of Congress explicit and restricted, and sought some source of executive power not failed by misuse or wrecked by sabotage. He seized upon the President's designation by the Constitution as Commander-in-Chief, coupled it to the executive power provision and joined them as "the war power" which authorized him to do many things beyond the competence of Congress.39 Lincoln embraced the Jackson concept of the President's independent power and duty under his oath directly to represent and protect the people. In his Message of July 4, 1861, Lincoln declared that "the Executive found the duty of employing the war power in defense of the government forced upon him. He could not but perform the duty or surrender the existence of the Government . . . ." This concept began as a transition device, to be validated by Congress when it assembled. In less than two-years, it grew into an independent power under which he felt authorized to suspend the privilege of the writ of habeas corpus, issue the Emancipation Proclamation, and restore reoccupied States.40

Lincoln's Proclamation of April 15, 1861, called for 75,000 troops. Their first service, according to the proclamation, would be to recapture forts, places and property, taking care "to avoid any devastation, any destruction of or interference with property, or any disturbance of peaceful citizens."41 Early in 1863, the U.S. Supreme Court approved President Lincoln's report to use the war powers without the benefit of Congress. The decision was handed in the celebrated Prize Cases42 which involved suits attacking the President's right to legally institute a blockade. Although his Proclamation was subsequently validated by Congress, the claimants contended that under international law, a blockade could be instituted only as a measure of war under the sovereign power of the State. Since under the Constitution only Congress is exclusively empowered to declare war, it is only that body that could impose a blockade and all prizes seized before the legislative declaration were illegal. By a 5 to 4 vote, the Supreme Court upheld Lincoln's right to act as he had.43 In the course of time, the U.S. President's power to call out armed forces and suspend the privilege of the writ of habeas corpus without prior legislative approval, in case of invasion, insurrection, or rebellion came to be recognized and accepted. The United States introduced the expanded presidential powers in the Philippines through the Philippine Bill of 1902.44 The use of the power was put to judicial test and this Court held that the case raised a political question and said that it is beyond its province to inquire into the exercise of the power.45 Later, the grant of the power was incorporated in the 1935 Constitution.46 Elected in 1884, Grover Cleveland took his ascent to the presidency to mean that it made him the trustee of all the people. Guided by the maxim that "Public office is a public trust," which he practiced during his incumbency, Cleveland sent federal troops to Illinois to quell striking railway workers who defied a court injunction. The injunction banned all picketing and distribution of handbills. For leading the strikes and violating the injunction, Debs, who was the union president, was convicted of contempt of court. Brought to the Supreme Court, the principal issue was by what authority of the Constitution or statute had the President to send troops without the

request of the Governor of the State.47 In In Re: Eugene Debs, et al,48 the Supreme Court upheld the contempt conviction. It ruled that it is not the government's province to mix in merely individual present controversies. Still, so it went on, "whenever wrongs complained of are such as affect the public at large, and are in respect of matters which by the Constitution are entrusted to the care of the Nation and concerning which the Nation owes the duty to all citizens of securing to them their common rights, then the mere fact that the Government has no pecuniary interest in the controversy is not sufficient to exclude it from the Courts, or prevent it from taking measures therein to fully discharge those constitutional duties."49 Thus, Cleveland's course had the Court's attest. Taking off from President Cleveland, President Theodore Roosevelt launched what political scientists dub the "stewardship theory." Calling himself "the steward of the people," he felt that the executive power "was limited only by the specific restrictions and prohibitions appearing in the Constitution, or impleaded by Congress under its constitutional powers."50 The most far-reaching extension of presidential power "T.R." ever undertook to employ was his plan to occupy and operate Pennsylvania's coal mines under his authority as Commander-inChief. In the issue, he found means other than force to end the 1902 hard-coal strike, but he had made detailed plans to use his power as Commander-in-Chief to wrest the mines from the stubborn operators, so that coal production would begin again.51 Eventually, the power of the State to intervene in and even take over the operation of vital utilities in the public interest was accepted. In the Philippines, this led to the incorporation of Section 6,52 Article XIII of the 1935 Constitution, which was later carried over with modifications in Section 7,53 Article XIV of the 1973 Constitution, and thereafter in Section 18,54 Article XII of the 1987 Constitution. The lesson to be learned from the U.S. constitutional history is that the Commander-in-Chief powers are broad enough as it is and become more so when taken together with the provision on executive

power and the presidential oath of office. Thus, the plenitude of the powers of the presidency equips the occupant with the means to address exigencies or threats which undermine the very existence of government or the integrity of the State. In The Philippine Presidency A Study of Executive Power, the late Mme. Justice Irene R. Cortes, proposed that the Philippine President was vested with residual power and that this is even greater than that of the U.S. President. She attributed this distinction to the "unitary and highly centralized" nature of the Philippine government. She noted that, "There is no counterpart of the several states of the American union which have reserved powers under the United States constitution." Elaborating on the constitutional basis for her argument, she wrote: . The [1935] Philippine [C]onstitution establishes the three departments of the government in this manner: "The legislative power shall be vested in a Congress of the Philippines which shall consist of a Senate and a House of Representatives." "The executive power shall be vested in a President of the Philippines." The judicial powers shall be vested in one Supreme Court and in such inferior courts as may be provided by law." These provisions not only establish a separation of powers by actual division but also confer plenary legislative, executive, and judicial powers. For as the Supreme Court of the Philippines pointed out in Ocampo v. Cabangis, "a grant of legislative power means a grant of all the legislative power; and a grant of the judicial power means a grant of all the judicial power which may be exercised under the government." If this is true of the legislative power which is exercised by two chambers with a combined membership [at that time] of more than 120 and of the judicial power which is vested in a hierarchy of courts, it can equally if not more appropriately apply to the executive power which is vested in one official the president. He personifies the executive branch. There is a unity in the executive branch absent from the two other branches of government. The president is not the chief of many executives. He is the executive. His direction of the executive branch can be more immediate and direct than the United States president because he is given by express provision of the constitution control over all executive departments, bureaus and offices.55

The esteemed Justice conducted her study against the backdrop of the 1935 Constitution, the framers of which, early on, arrived at a general opinion in favor of a strong Executive in the Philippines."56 Since then, reeling from the aftermath of martial law, our most recent Charter has restricted the President's powers as Commander-inChief. The same, however, cannot be said of the President's powers as Chief Executive. In her ponencia in Marcos v. Manglapus, Justice Cortes put her thesis into jurisprudence. There, the Court, by a slim 8-7 margin, upheld the President's power to forbid the return of her exiled predecessor. The rationale for the majority's ruling rested on the President's unstated residual powers which are implied from the grant of executive power and which are necessary for her to comply with her duties under the Constitution. The powers of the President are not limited to what are expressly enumerated in the article on the Executive Department and in scattered provisions of the Constitution. This is so, notwithstanding the avowed intent of the members of the Constitutional Commission of 1986 to limit the powers of the President as a reaction to the abuses under the regime of Mr. Marcos, for the result was a limitation of specific powers of the President, particularly those relating to the commander-in-chief clause, but not a diminution of the general grant of executive power.57 [Underscoring supplied. Italics in the original.] Thus, the President's authority to declare a state of rebellion springs in the main from her powers as chief executive and, at the same time, draws strength from her Commander-in-Chief powers. Indeed, as the Solicitor General accurately points out, statutory authority for such a declaration may be found in Section 4, Chapter 2 (Ordinance Power), Book III (Office of the President) of the Revised Administrative Code of 1987, which states: 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. [Emphasis supplied.]

The foregoing discussion notwithstanding, in calling out the armed forces, a declaration of a state of rebellion is an utter superfluity.58 At most, it only gives notice to the nation that such a state exists and that the armed forces may be called to prevent or suppress it.59 Perhaps the declaration may wreak emotional effects upon the perceived enemies of the State, even on the entire nation. But this Court's mandate is to probe only into the legal consequences of the declaration. This Court finds that such a declaration is devoid of any legal significance. For all legal intents, the declaration is deemed not written. Should there be any "confusion" generated by the issuance of Proclamation No. 427 and General Order No. 4, we clarify that, as the dissenters in Lacson correctly pointed out, the mere declaration of a state of rebellion cannot diminish or violate constitutionally protected rights.60 Indeed, if a state of martial law does not suspend the operation of the Constitution or automatically suspend the privilege of the writ of habeas corpus,61 then it is with more reason that a simple declaration of a state of rebellion could not bring about these conditions.62 At any rate, the presidential issuances themselves call for the suppression of the rebellion "with due regard to constitutional rights." For the same reasons, apprehensions that the military and police authorities may resort to warrantless arrests are likewise unfounded. In Lacson vs. Perez, supra, majority of the Court held that "[i]n quelling or suppressing the rebellion, the authorities may only resort to warrantless arrests of persons suspected of rebellion, as provided under Section 5, Rule 113 of the Rules of Court,63 if the circumstances so warrant. The warrantless arrest feared by petitioners is, thus, not based on the declaration of a 'state of rebellion.'"64 In other words, a person may be subjected to a warrantless arrest for the crime of rebellion whether or not the President has declared a state of rebellion, so long as the requisites for a valid warrantless arrest are present. It is not disputed that the President has full discretionary power to call out the armed forces and to determine the necessity for the exercise of such power. While the Court may examine whether the power was exercised within constitutional limits or in a manner constituting grave

abuse of discretion, none of the petitioners here have, by way of proof, supported their assertion that the President acted without factual basis.65 The argument that the declaration of a state of rebellion amounts to a declaration of martial law and, therefore, is a circumvention of the report requirement, is a leap of logic. There is no indication that military tribunals have replaced civil courts in the "theater of war" or that military authorities have taken over the functions of civil government. There is no allegation of curtailment of civil or political rights. There is no indication that the President has exercised judicial and legislative powers. In short, there is no illustration that the President has attempted to exercise or has exercised martial law powers. Nor by any stretch of the imagination can the declaration constitute an indirect exercise of emergency powers, which exercise depends upon a grant of Congress pursuant to Section 23 (2), Article VI of the Constitution: Sec. 23. (1) . (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. The petitions do not cite a specific instance where the President has attempted to or has exercised powers beyond her powers as Chief Executive or as Commander-in-Chief. The President, in declaring a state of rebellion and in calling out the armed forces, was merely exercising a wedding of her Chief Executive and Commander-inChief powers. These are purely executive powers, vested on the President by Sections 1 and 18, Article VII, as opposed to the delegated legislative powers contemplated by Section 23 (2), Article VI. WHEREFORE, the petitions are hereby DISMISSED.

SO ORDERED. Carpio, Corona, and Carpio-Morales, JJ., concur. Davide, Jr., C.J., in the result. Puno, J., in the result. Vitug, J., see separate opinion. Panganiban, J., see separate opinion. Quisumbing, J., joins J. Panganiban's Opinion. Ynares-Santiago, J., see separate opinion. Sandoval-Gutierrez, J., please see dissenting opinion. Austria-Martinez, J., concur in the result. Callejo, Sr., J., concurs in the separate opinion of J. Panganiban. Azcuna, J., on official leave. Separate Opinions PANGANIBAN, J.: Petitioners challenge the constitutionality of the "state of rebellion" declared by the President through Proclamation No. 427 and General Order No. 4 in the wake of the so-called "Oakwood Incident." The questioned issuances, however, were subsequently lifted by her on August 1, 2003, when she issued Proclamation No. 435. Hence, as of today, there is no more extant proclamation or order that can be declared valid or void. For this reason, I believe that the Petitions should be dismissed on the ground of mootness. The judicial power to declare a law or an executive order unconstitutional, according to Justice Jose P. Laurel, is "limited to actual cases and controversies to be exercised after full opportunity of argument by the parties, and limited further to the constitutional question raised or the very lis mota presented."1 Following this longheld principle, the Court has thus always been guided by these fourfold requisites in deciding constitutional law issues: 1) there must be an actual case or controversy involving a conflict of rights susceptible of judicial determination; 2) the constitutional question must be raised by a proper party; 3) the constitutional question must be raised at the earliest opportunity; and 4) adjudication of the constitutional question must be indispensable to the resolution of the case.2

Unquestionably, the first and the forth requirements are absent in the present case. Absence of Case and Controversy The first requirement, the existence of a live case or controversy, means that an existing litigation is ripe for resolution and susceptible of judicial determination; as opposed to one that is conjectural or anticipatory,3 hypothetical or feigned.4 A justiciable controversy involves a definite and concrete dispute touching on the legal relations of parties having adverse legal interests.5 Hence, it admits of specific relief through a decree that is conclusive in character, in contrast to an opinion which only advises what the law would be upon a hypothetical state of facts.6 As a rule, courts have no authority to pass upon issues through advisory opinions or friendly suits between parties without real adverse interests.7 Neither do courts sit to adjudicate academic questions no matter how intellectually challenging8 because without a justiciable controversy, an adjudication would be of no practical use or value.9 While the Petitions herein have previously embodied a live case or controversy, they now have been rendered extinct by the lifting of the questioned issuances. Thus, nothing is gained by breathing life into a dead issue. Moreover, without a justiciable controversy, the Petitions10 have become pleas for declaratory relief, over which the Supreme Court has no original jurisdiction. Be it remembered that they were filed directly with this Court and thus invoked its original jurisdiction.11 On the theory that the "state of rebellion" issue is "capable of repetition yet evading review," I respectfully submit that the question may indeed still be resolved even after the lifting of the Proclamation and Order, provided the party raising it in a proper case has been and/or continue to be prejudiced or damaged as a direct result of their issuance. In the present case, petitioners have not shown that they have been or continue to be directly and pecuniarily prejudiced or damaged by

the Proclamation and Order. Neither have they shown that this Court has original jurisdiction over petitions for declaratory relief. I would venture to say that, perhaps, if this controversy had emanated from an appealed judgment from a lower tribunal, then this Court may still pass upon the issue on the theory that it is "capable of repetition yet evading review," and the case would not be an original action for declaratory relief. In short, the theory of "capable of repetition yet evading review" may be invoked only when this Court has jurisdiction over the subject matter. It cannot be used in the present controversy for declaratory relief, over which the Court has no original jurisdiction. The Resolution of the Case on Other Grounds The fourth requisite, which relates to the absolute necessity of deciding the constitutional issue, means that the Court has no other way of resolving the case except by tackling an unavoidable constitutional question. It is a well-settled doctrine that courts will not pass upon a constitutional question unless it is the lis mota of the case, or if the case can be disposed on some other grounds.12 With due respect, I submit that the mootness of the Petitions has swept aside the necessity of ruling on the validity of Proclamation No. 427 and General order No. 4. In the wake of its mootness, the constitutionality issue has ceased to be the lis mota of the case or to be an unavoidable question in the resolution thereof. Hence, the dismissal of the Petitions for mootness is justified.13 WHEREFORE, I vote to DISMISS the Petitions. On the constitutionality of a "state of rebellion," I reserve my judgment at the proper time and in the proper case. YNARES-SANTIAGO, J.: The fundamental issue in the petitions is the legality of Proclamation No. 427 issued by the President on July 27, 2003 declaring a "state of rebellion". The majority affirmed the declaration is legal because the President was only exercising a wedding of the "Chief Executive" and

"Commander-in-Chief" powers. U.S. jurisprudence and commentators are cited discussing the awesome powers exercised by the U.S. President during moments of crisis1 and that these powers are also available to the Philippine President.2 Although the limits cannot be precisely defined, the majority concluded that there are enough "residual powers" to serve as the basis to support the Presidential declaration of a "state of rebellion".3 The majority, however, emphasized that the declaration cannot diminish or violate constitutionally protected rights.4 They affirmed the legality of warrantless arrests of persons who participated in the rebellion, if circumstances so warrant5 with this clarification: "[i]n other words, a person may be subjected to a warrantless arrests for the crime of rebellion whether or not the President has declared a state of rebellion, so long as the requisites for a valid warrantless arrest are present."6 If the requisites for a warrantless arrests must still be present for an arrest to be made, then the declaration is a superfluity. I therefore shudder when a blanket affirmation is given to the President to issue declarations of a "state of rebellion" which in fact may not be the truth or which may be in affect even after the rebellion has ended. Proclamation No. 427 was issued at 1:00 p.m. on July 27, 2003, at the height of the occupation of the Oakwood Premier Apartments in Ayala Center, Makati City, by 323 junior officers and enlisted men (Oakwood Incident),7 which began in the early morning of July 27, 2003.8 Shortly after, the President issued General Order No. 4, ordering the Armed Forces of the Philippines and the Philippine National Police to use reasonable force, and pay due regard to constitutional rights, in putting down the rebellion.9 The Oakwood incident ended peacefully that same evening when the militant soldiers surrendered after negotiations. From July 27 to August 1, 2003, "search and recovery" operations were conducted. Throughout the Oakwood Incident, searches were conducted in the non-occupied areas,10 and, with the recovery of evidence, staging points for the Oakwood Incident were found in Cavite, Makati and Mandaluyong.11 After the soldiers left at around 11:00 in the evening of July 27, a search was conducted around the Oakwood premises.12 These searches expanded in scope on the

basis of recovered evidence.13 Ramon Cardenas, Assistant Executive Secretary in the previous administration, was arrested, presented to the media in handcuffs and brought for inquest proceedings before the Department of Justice ("DOJ") in the morning of July 28.14 He was initially detained at the Office of the Anti-Organized Crime Division of the Criminal Investigation and Detection Group ("CIDG"), and brought to the DOJ in the afternoon of July 28.15 Cardenas was later charged with the crime of rebellion,16 but as of this writing has been allowed bail. On July 31, 2003, 4 days after the militant group had surrendered peacefully, an official spokesperson from the DOJ declared that the President's "indefinite" imposition of the "state of rebellion" would make "warrantless arrests" a valid exercise of executive power. The Court can take judicial notice that the police authorities were releasing to media "evidence found" purporting to link personalities in the political opposition, the most prominent of whom was Senator Gringo Honasan. Even Senator Loi Ejercito and Mayor JV Ejercito's names were being linked to the attempted uprising. On August 1, 2003, the President issued Proclamation No. 435, declaring that the Armed Forces of the Philippines and the Philippine National Police had effectively suppressed and quelled the rebellion, and, accordingly, that the "state of rebellion" had ceased on that date. The majority discussed only the abstract nature of the powers exercised by the Chief Executive, without considering if there was sufficient factual basis for the President's declaration of a "state of rebellion" and when it ended. In taking this position, the majority is returning, if not expanding, the doctrine enunciated in Garcia-Padilla v. Enrile,17 which overturned the landmark doctrine in Lansang v. Garcia.18 In Lansang, the Supreme Court upheld its authority to inquire into the factual bases for the suspension of the privilege of the writ of habeas corpus, and held that this inquiry raises a judicial rather than a political question. In Garcia-Padilla, on the other hand, the ponencia held that Lansang was no longer authoritative, and that the President's decision to suspend the privilege is final and conclusive upon the courts and all other persons.

These two cases were decided prior to the 1987 Constitution, which requires this Court 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 government.19 This provision in the 1987 Constitution was precisely meant to check abuses of executive power. Martial Law was still fresh in the minds of the delegates in 1987!
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The majority ignored the fact that the "state of rebellion" declared by the President was in effect five days after the peaceful surrender of the militant group. The President's proclamation cites Section 18, Article VII of the Constitution as the basis for the declaration of the "state of rebellion.". Section 18 authorizes the President, as Commander-in-Chief, to call out the Armed Forces, in order to suppress one of three conditions: (1) lawless violence, (2) rebellion or (3) invasion.20 In the latter two cases, i.e., rebellion or invasion, the President may, when public safety requires, also (1) suspend the privilege of the writ of habeas corpus, or (2) place the Philippines or any part thereof under martial law. The majority made it clear that exercise of the President's Commander-in-Chief powers does not require the declaration of a "state of rebellion" or a declaration of a "state of lawless violence" or a "state of invasion". When any of these conditions exist, the President may call out the armed forces to suppress the danger. Thus, the declaration of a "state of rebellion" does not have any legal meaning or consequence. This declaration does not give the President any extra powers. It does not have any good purpose. If the declaration is used to justify warrantless arrests even after the rebellion has ended, as in the case of Cardenas, such declaration or, at the least, the warrantless arrests, must be struck down. Clearly defined in Article 134 of the Revised Penal Code is the crime of rebellion or insurrection, to wit:

ART. 134. Rebellion or insurrection How committed. The crime of rebellion or insurrection is committed by rising publicly and taking up arms against the Government for the purpose of removing from the allegiance to said Government or its laws, the territory of the Republic of the Philippines or any part thereof, of any body of land, naval or other armed forces, or depriving the Chief Executive or the legislature, wholly or partially, of any of their powers or prerogatives. On the other hand, a coup d' etat is defined as follows: ART. 134-A. Coup d' etat. How committed. The crime of coup d' etat is a swift attack accompanied by violence, intimidation, threat, strategy or stealth, directed against the duly constituted authorities of the Republic of the Philippines, or any military camp or installation, communications networks, public utilities or other facilities needed for the exercise and continued possession of power, singly or simultaneously carried out anywhere in the Philippines by any person or persons, belonging to the military or police or holding any public office or employment, with or without civilian support or participation, for the purpose of seizing or diminishing state power. Under these provisions, the crime of rebellion or insurrection is committed only by "rising publicly or taking up arms against the Government". A coup d' etat, on the other hand, takes place only when there is a "swift attack accompanied by violence." Once the act of "rising publicly and taking up arms against the Government" ceases, the commission of the crime of rebellion ceases. Similarly, when the "swift attack" ceases, the crime of coup d' etat is no longer being committed. Rebellion has been held to be a continuing crime,21 and the authorities may resort to warrantless arrests of persons suspected of rebellion, as provided under Section 5, Rule 113 of the Rules of Court.22 However, this doctrine should be applied to its proper context i.e., relating to subversive armed organizations, such as the New People's Army, the avowed purpose of which is the armed overthrow of the organized and established government. Only in such instance should rebellion be considered a continuing crime. When the soldiers surrendered peacefully in the evening of July 27,

the rebellion or the coup d' etat ended. The President, however, did not lift the declaration of the "state of rebellion" until 5 days later, on August 1, 2003. After the peaceful surrender, no person suspected of having conspired with the soldiers or participated in the Oakwood incident could be arrested without a warrant of arrest. Section 5, Rule 113 of the Revised Rules of Court, which governs arrest without warrant, provides as follows: 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 xxxxxxxxx In cases falling under paragraphs (a) and (b) above, the person arrested without a warrant shall be forthwith delivered to the nearest police station or jail and shall be proceeded against in accordance with section 7 of Rule 112. Rule 113, Section 5, pars. (a) and (b) of the Rules of Court are exceptions to the due process clause in the Constitution. Section 5, par. (a) relates to a situation where a crime is committed or attempted in the presence of the arresting officer. Section 5, par. (b), on the other hand, presents the requirement of "personal knowledge", on the part of the arresting officer, of facts indicating that an offense had "just been committed", and that the person to be arrested had committed that offense. After the peaceful surrender of the soldiers on July 27, 2003, there was no crime that was being "attempted", "being committed", or "had just been committed." There should, therefore, be no occasion to effect a valid warrantless arrest in connection with the Oakwood

Incident. The purpose of the declaration and its duration as far as the overeager authorities were concerned was only to give legal cover to effect warrantless arrests even if the "state of rebellion" or the instances stated in Rule 113, Section 5 of the Rules are absent or no longer exist. Our history had shown the dangers when too much power is concentrated in the hands of one person. Unless specifically defined, it is risky to concede and acknowledge the "residual powers" to justify the validity of the presidential issuances. This can serve as a blank check for other issuances and open the door to abuses. The majority cite the exercise of strong executive powers by U.S. President Andrew Jackson. Was it not President Jackson who is said to have cynically defied the U.S. Supreme Court's ruling (under Chief Justice Marshall) against the forcible removal of the American Indians from the tribal lands by saying: "The Chief Justice has issued his Decision, now let him try to enforce it?" Others quote Madison as having gone further with: "With what army will the Chief Justice enforce his Decision?" WHEREFORE, I vote for Proclamation No. 427 and General Order No. 4, issued on July 27, 2003 by Respondent President Gloria Macapagal-Arroyo, to be declared NULL and VOID for having been issued with grave abuse of discretion amounting to lack of jurisdiction. All other orders issued and action taken based on those issuances, especially after the Oakwood incident ended in the evening of July 27, 2003, e.g., warrantless arrests, should also be declared null and void. Dissenting Opinion SANDOVAL-GUTIERREZ, J.: "Courts will decide a question otherwise moot and academic if it is 'capable of repetition, yet evading review.'"1 On this premise, I stood apart from my colleagues in dismissing the petition in Lacson vs. Perez.2 Their reason was that President Gloria Macapagal-Arroyo's

lifting of the declaration of a "state of rebellion" rendered moot and academic the issue of its constitutionality. Looking in retrospect, my fear then was the repetition of the act sought to be declared unconstitutional. No more than three (3) years have passed, and here we are again haunted by the same issue. I A brief restatement of the facts is imperative. In the wee hours of July 27, 2003, three hundred twenty-three (323) junior officers and enlisted men of the Armed Forces of the Philippines (AFP) took over the Oakwood Premier Apartments, Ayala Center, Makati City. Introducing themselves as the "Magdalo Group," they claimed that they went to Oakwood to air their grievances about graft and corruption in the military, the sale of arms and ammunitions to the "enemies" of the state, the bombings in Davao City allegedly ordered by Gen. Victor Corpus, then Chief of the Intelligence Service of the Armed Forces of the Philippines (ISAFP), the increased military assistance from the United States, and "micromanagement" in the AFP by Gen. Angelo Reyes, then Secretary of the Department of National Defense.3 The military men demanded the resignation of the President, the Secretary of National Defense and the Chief of the Philippine National Police. At about 9:00 A.M. of the same day, President Arroyo gave the Magdalo Group until 5:00 P.M. to give up their positions peacefully and return to the barracks. At around 1:00 P.M., she issued Proclamation No. 427 and General Order No. 4 declaring the existence of a "state of rebellion" and calling out the AFP to suppress the rebellion. Shortly before the 5:00 P.M. deadline, President Arroyo announced an extension until 7:00 P.M. During the two-hour reprieve, negotiations between the Magdalo Group and various personalities took place. The rebels agreed to return to the barracks. They left the Oakwood premises at 11:00 P.M. On July 28, 2003, Agents of the National Bureau of Investigation

(NBI) searched the house owned by Ramon Cardenas at 2177 Paraiso St., Dasmarias Village, Makati City. After the raid and the recovery of evidence claimed to link him to rebellion, Cardenas, accompanied by Atty. Rene Saguisag, went to the CIDG in Camp Crame. On the same day, Cardenas was brought to the Department of Justice for inquest proceeding. He was later charged with the crime of rebellion. The Mandaluyong City Police likewise searched the townhouses belonging to Laarni Enriquez, allegedly used as staging areas by the Magdalo Group. On August 1, 2003, President Arroyo lifted her declaration of a state of rebellion through Proclamation No. 435. Meanwhile, on August 4, 2003, Secretary Jose Lina, Jr. of the Department of the Interior and Local Government, forwarded to the DOJ the affidavit-complaint for coup d'etat of PC Chief Superintendent Eduardo Matillano against Senator Gregorio Honasan, Ernesto Macahiya, George Duldulao and several "John and Jane Does" numbering about 1,000. On August 8, 2003, PNP Chief Inspector Jesus Fernandez of the Eastern Police District referred to the DOJ an investigation report recommending that Enriquez and a certain Romy Escalona be prosecuted for rebellion and insurrection. II I regret that I cannot give my assent to the ponencia of Mr. Justice Dante O. Tinga even as I admire it for its lucidity and historical accuracy. The passage of time has not changed my Opinion in Lacson vs. Perez that President Arroyo's declaration of a "state of rebellion" is unconstitutional. I cannot subscribe to the majority's view that the declaration of a "state of rebellion" is justified under Article VII of the 1987 Constitution granting her "Executive" and "Commander-in-Chief" powers. III

Consistent with my previous stand, it is my view that nowhere in the Constitution can be found a provision which grants to the President the authority to declare a "state of rebellion," or exercise powers, which may be legally allowed only under a state of martial law. President Arroyo, in declaring a "state of rebellion," deviated from the following provisions of the Constitution: "Sec. 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever if 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.
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The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual bases of the proclamation of martial law or the suspension of the privilege of the writ or the extension thereof, and must promulgate its decision thereon within thirty days from its filing. A state of martial law does not suspend the operation of the Constitution, nor supplant the functioning of the civil courts or legislative assemblies, nor authorize the conferment of jurisdiction on military courts and agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of the writ.

The suspension of the privilege of the writ shall apply only to persons judicially charged for rebellion or offenses inherent in or directly connected with invasion. During the suspension of the privilege of the writ, any person thus arrested or detained shall be judicially charged within three days, otherwise he shall be released."4 The powers of the President when she assumed the existence of rebellion are laid down by the Constitution. She may (1) call the armed forces to prevent or suppress lawless violence, invasion or rebellion; (2) suspend the privilege of the writ of habeas corpus; or (3) place the Philippines or any part thereof under martial law. Now, why did President Arroyo declare a "state of rebellion" when she has no such power under the Constitution? If President Arroyo's only purpose was merely to exercise her "calling out power," then she could have simply ordered the AFP to prevent or suppress what she perceived as an invasion or rebellion. Such course raises no constitutional objection, it being provided for by the above-quoted provisions. However, adopting an unorthodox measure unbounded and not canalized by the language of the Constitution is dangerous. It leaves the people at her mercy and that of the military, ignorant of their rights under the circumstances and wary of their settled expectations. One good illustration is precisely in the case of invasion or rebellion. Under such situation, the President has the power to suspend the privilege of the writ of habeas corpus or to declare martial law. Such power is not a plenary one, as shown by the numerous limitations imposed thereon by the Constitution, some of which are: (1) the public safety requires it; (2) it does not exceed sixty (60) days; (3) within forty-eight (48) hours, she shall submit a report, in writing or in person, to Congress; (4) The Congress, by a vote of at least a majority of all its members, may revoke such proclamation or suspension. All these limitations form part of the citizens' settled expectations. If the President exceeds the set limitations, the citizens know that they may resort to this Court through appropriate proceeding to question the sufficiency of the factual bases of the proclamation of martial law or the suspension of the privilege of the writ. In turn, this Court shall promulgate its Decision within thirty days from the filing of the proper pleading. All

the foregoing guarantees and limitations are absent in the declaration of a "state of rebellion." It is not subject to clear legal restraints. How then can the citizens determine the propriety of the President's acts committed pursuant to such declaration? How can excess of power be curtailed at its inception? Indeed, I see no reason for the President to deviate from the concise and plain provisions of the Constitution. In a society which adheres to the rule of law, resort to extra-constitutional measures is unnecessary where the law has provided everything for any emergency or contingency. For even if it may be proven beneficial for a time, the precedent it sets is pernicious as the law may, in a little while, be disregarded again on the same pretext but for questionable purposes. Even in time of emergency, government action may vary in breath and intensity from more normal times, yet it need not be less constitutional.5 Extraordinary conditions may call for extraordinary remedies. But it cannot justify action which lies outside the sphere of constitutional authority. Extraordinary conditions do not create or enlarge constitutional power.6 I cannot simply close my eyes to the dangers that lurk behind the seemingly harmless declaration of a "state of rebellion." Still fresh from my memory is the May 1, 2001 civil unrest. On such date, President Arroyo placed Metro Manila under a "state of rebellion" because of the violent street clashes involving the loyalists of former President Joseph Estrada and the police authorities. Presidential Spokesperson Rigoberto Tiglao told reporters, "We are in a state of rebellion. This is not an ordinary demonstration."7 Immediately thereafter, there were threats of arrests against those suspected of instigating the march to Malacaang. At about 3:30 in the afternoon, Senator Juan Ponce Enrile was arrested in his house in Dasmarias Village, Makati City by a group led by Gen. Reynaldo Berroya, Chief of the Philippine National Police Intelligence Group.8 Thereafter, he and his men proceeded to hunt re-electionist Senator Gregorio Honasan, former PNP Chief, now Senator Panfilo Lacson, former Ambassador Ernesto Maceda, Brig. Gen. Jake Malajakan, Senior Superintendents Michael Ray Aquino and Cesar Mancao II, Ronald Lumbao and Cesar Tanega of the People's Movement Against Poverty (PMAP).9 Former Justice Secretary Hernando Perez said that he was "studying" the possibility of placing Senator Miriam Defensor-

Santiago "under the Witness Protection Program." Director Victor Batac, former Chief of the PNP Directorate for Police Community Relations, and Senior Superintendent Diosdado Valeroso, of the Philippine Center for Transnational Crime, surrendered to Gen. Berroya. Both denied having plotted the siege. On May 2, 2001, former Ambassador Ernesto Maceda was arrested. On President Arroyo's mere declaration of a "state of rebellion," police authorities arrested without warrants the above-mentioned personalities. In effect, she placed the Philippines under martial law without a declaration to that effect and without observing the proper procedure. This is a very dangerous precedent. The Constitution provides that "the right of the people to be secure in their persons, houses, papers and effects against unreasonable searches 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."10 Obviously, violation of this constitutional provision cannot be justified by reason of the declaration of a "state of rebellion" for such declaration, as earlier mentioned, is unconstitutional. Even under Section 5, Rule 113 of the Revised Rules on Criminal Procedure11 the warrantless arrests effected by President Arroyo's men are not justified. The above-mentioned personalities cannot be considered "to have committed, are actually committing, or are attempting to commit an offense" at the time they were arrested without warrants. None of them participated in the riot which took place in the vicinity of the Malacaang Palace. Some of them were in their respective houses performing innocent acts. The sure fact is they were not in the presence of Gen. Berroya. Clearly, he did not see whether they had committed, were committing or were attempting to commit the crime of rebellion.12 It bears mentioning that at the time some of the suspected instigators were arrested, a long interval of time already passed and hence, it cannot be legally said that they had just committed an offense. Neither can it be said that Gen. Berroya or any of his men had "personal knowledge of facts or circumstances that the persons to be arrested have committed a

crime." That would be far from reality.

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The circumstances that arose from President Arroyo's resort to the declaration of a "state of rebellion" to suppress what she perceived as the May 1, 2001 rebellion are the very evils that we should prevent from happening again. This can only be done if we strike such unusual measure as unconstitutional. Significantly, while the Oakwood event ended peacefully on the night of July 27, 2003, President Arroyo's declaration of a "state of rebellion" continued until the lifting thereof on August 1, 2003. This means that although the alleged rebellion had ceased, the President's declaration continued to be in effect. As it turned out, several searches and seizures took place during the extended period. Generally, the power of the President in times of war, invasion or rebellion and during other emergency situations should be exercised jointly with Congress. This is to insure the correctness and propriety of authorizing our armed forces to quell such hostilities. Such collective judgment is to be effected by "heightened consultation" between the President and Congress. Thus, as can be gleaned from the provisions of the Constitution, when the President proclaims martial law or suspends the privilege of the writ, he 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." Not only that, Section 23, Article VI of the Constitution provides that: "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. 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." Clearly, the Constitution has not extended excessive authority in military, defense and emergency matters to the President. Though the President is designated as the Commander-in-Chief of all armed forces of the Philippines, the textual reed does not suffice to support limitless authority. Born by the nation's past experiences, the concurrence of the Congress is required as a measure to ward-off

totalitarian rule. By declaring a "state of rebellion," President Arroyo effectively disregarded such concurrent power of Congress. At this point, let it be stressed that the accumulation of both the executive and legislative powers in the same hands constitutes the very definition of tyranny. By sustaining the unusual course taken by President Arroyo, we are traversing a very dangerous path. We are opening the way to those who, in the end, would turn our democracy into a totalitarian rule. While it may not plunge us straightway into dictatorship, however, it is a step towards a wrong direction. History must not be allowed to repeat itself. Any act which gears towards possible dictatorship must be severed at its inception. As I have stated in my previous dissent, our nation had seen the rise of a dictator into power. As a matter of fact, the changes made by the 1986 Constitutional Commission in the martial law text of the Constitution were to a large extent a reaction against the direction which this Court took during the regime of President Marcos.13 In ruling that the declaration of a "state of rebellion" is a prerogative of the President, then, I say, our country is tracing the same dangerous road of the past. IV The majority cited U.S. cases in support of their stand that the President's proclamation of "state of rebellion" is in accordance with the Constitutional provisions granting her "powers as chief executive." I find that In re Debs14 and Prize Cases15 illustrate an executive power much larger than is indicated by the rudimentary constitutional provisions. Clearly, these cases cannot support the majority's conclusion that: "The lesson to be learned from the U.S. constitutional history is that the Commander-in-Chief powers are broad enough as it is and become more so when taken together with the provision on executive power and the presidential oath of office. Thus, the plenitude of the powers of the presidency equips the occupant with the means to address exigencies or threats which undermine the very existence of government or the integrity of the State." There are reasons why I find the above conclusion of the majority naccurate. From a survey of U.S. jurisprudence, the outstanding fact

remains that every specific proposal to confer uncontrollable power upon the President is rejected.16 In re Debs,17 the U.S. Supreme Court Decision upheld the power of President Grover Cleveland to prevent the strike of railway workers on the ground that it threatened interference with interstate commerce and with the free flow of mail. The basic theory underlying this case that the President has inherent power to act for the nation in cases of major public need was eroded by the Youngstown Sheet & Tube Co. vs. Sawyer, also known as the Steel Seizure Case.18 This case aroused great public interest, largely because of its important implications concerning the boundaries of presidential powers. The seven separate opinions consist of 128 pages in the Reports and contain a great deal of important date on the powers of the Chief Executive. The same case demonstrates well that executive powers, even during an alleged emergency, may still be subject to judicial control. The decision constitutes a "dramatic vindication" of the American constitutional government.19 Mr. Justice Andrew Jackson, concurring in the judgment and opinion of the Court, eloquently expounded on the "executive" and "commander-in-chief" powers, thus: "The Solicitor general seeks the power of seizure in three clauses of the Executive Article, the first reading, 'The executive Power shall be vested in a President of the United States of America.' Lest I be thought to exaggerate, I quote the interpretation which his brief puts upon it: 'In our view, this clause constitutes a grant of all the executive powers of which the Government is capable.' If that be true, it is difficult to see why the forefathers bothered to add several specific items, including some trifling ones. The example of such unlimited executive power that must have most impressed the forefathers was the prerogative exercised by George III, and the description of its evils in the Declaration of Independence leads me to doubt that they were creating their new Executive in his image. Continental European examples were no more appealing. And if we seek instruction from our own times, we can match it only from the executive powers in those governments were disparingly describe as totalitarian. I cannot accept the view that this clause is a grant in bulk of all conceivable executive powers but regard it as an allocation to the presidential office of the generic powers thereafter stated.

The clause on which the Government next relies is that 'The President shall be Commander in Chief of the Army and Navy of the United States' These cryptic words have given rise to some of the most persistent controversies in our constitutional history. Of course, they imply something more than an empty title. But just what authority goes with the name has plagued presidential advisers who would not waive or narrow it by non-assertion yet cannot say where it begins or ends. xxxxxx The third clause in which the Solicitor General finds seizure powers is that 'he shall take care that the laws be faithfully executed' That authority must be matched against words of the Fifth Amendment that 'No person shall bedeprived of life, liberty or property, without due process of law' One gives a governmental authority that reaches so far as there is law, the other gives a private right that authority shall go no farther. These signify about all there is of the principle that ours is a governmental of laws, not of men, and that we submit ourselves to rulers only if under rules." Further, Mr. Justice Jackson referred to the discussion of inherent executive powers as "loose and irresponsible use of adjectives." His wrath could be seen as reserved for those who use the word "inherent" to mean "unlimited."20 Thus: "The Solicitor General lastly grounds support of the seizure upon nebulous, inherent powers never expressly granted but said to have accrued to the office from the customs and claims of preceding administrations. The plea is for a resulting power to deal with a crisis or an emergency according to the necessities of the case, the unarticulated assumption being that necessity knows no law. Loose and irresponsible use of adjectives colors all non-legal and much legal discussion of presidential powers. 'Inherent' powers, 'implied' powers, 'incidental' powers, 'plenary' powers, 'war' powers and 'emergency' powers are used, often interchangeably and without fixed or ascertainable meanings. The vagueness and generality of the clauses that set forth presidential powers afford a plausible basis for pressures within and

without an administration for presidential action beyond that supported by those whose responsibility it is to defend his actions in court. The claim of inherent and unrestricted presidential powers has long been a persuasive dialectical weapon in political controversy. While it is not surprising that counsel should grasp support from such unadjudicated claims of power, a judge cannot accept self-serving press statements of the attorney for one of the interested parties as authority in answering a constitutional question, even if the advocate was himself. But prudence has counseled that actual reliance on such nebulous claims stop short of provoking a judicial test" In re Debs also received a serious blow in United States vs. United States District Court.21 The Supreme Court Justices unanimously rejected the inherent executive authority to engage in warrantless electronic surveillance in domestic security cases. Thus, where a substantial personal interest in life, liberty or property is threatened by presidential action, In re Debs is regarded more as an anachronism than authority. In Prizes Cases, by a vote of 5 to 4, the U.S. Supreme Court upheld President Abraham Lincoln's authority to impose a blockade. Under the U.S. Constitution, only Congress, empowered to declare a war, could impose a blockade. It must be emphasized, however, that there is a distinction between the role of the U.S. President in domestic affairs and in foreign affairs. The patterns in the foreign and domestic realms are quite different. The federal regulation of domestic affairs has its constitutional origins in the people and the states, and its initiation is allocated primarily to Congress (not the Executive). The constitutional role for the executive in domestic matters is thus largely ancillary to that of Congress.22 Thus, while it is recognized that executive power is predominant in foreign affairs, it is not so in the domestic sphere. This distinction should be considered in invoking U.S. jurisprudence. Clearly, the trail of U.S. jurisprudence does not support the view that the "Executive and Commander-in-Chief clauses" of the Constitution grant the President such broad power as to give her the option of disregarding the other restrictive provisions of the Constitution. The purpose of the Constitution is not only to grant power, but to keep it from getting out of hand. The policy should be where the

Constitution has laid down specific procedures on how the President should deal with a crisis, it is imperative that he must follow those procedures in meeting the crisis. These procedures serve as limitations to what would otherwise be an unbounded exercise of power. V In fine, may I state that every presidential claim to a power must be scrutinized with caution, for what is at stake is the equilibrium established by our constitutional system. The powers of the President are not as particularized as are those of Congress. Enumerated powers do not include undefined powers, as what the majority would want to point out. I state once more that there is no provision in our Constitution authorizing the President to declare "a state of rebellion." Not even the constitutional powers vested upon her include such power. WHEREFORE, I vote to GRANT the petitions. Proclamation No. 427 and General Order No. 4 are declared UNCONSTITUTIONAL. Footnotes
1

Rollo, G.R. No. 159085, p. 7; Rollo, G.R. No. 159103, pp. 4-5; Rollo, G.R. No. 159185, pp. 4-5; Rollo, G.R. No. 159186, p. 9.
2

The Court in a Resolution dated August 5, 2003 (Rollo, G.R. No. 159086, p. 18) previously dismissed the Sanlakas petition for failure to attach certified true copies of Proclamation No. 427 and General Order No. 4, and for failure to explain why service of the petition on respondents was not made personally. Petitioners subsequently filed a motion for leave to admit the petition with compliance for reconsideration, attaching therewith a certified copy of the impugned Proclamation and General Order. The Court, in a Resolution dated August 12, 2003 (Id., at 73) granted petitioners' motion for leave and reinstated the petition.
3

Id., at 10-12.

Id., at 13-14. Rollo, G.R. No. 159103, p. 4. Id., at 6. Id., at 8. Id., at 7. Ibid. Rollo, G.R. No. 159185, p. 5. Id., at 10. Ibid. Ibid. Rollo, G.R. No. 159196, p. 7. Id., at 17.

10

11

12

13

14

15

16

Rollo, G.R. No. 159085, p. 45; Rollo, G.R. No. 159103, p. 23; Rollo, G.R. No. 159185, p. 22; Rollo, G.R. No. 159186, p. 41.
17

Rollo, G.R. No. 159085, pp. 44-45; Rollo, G.R. No. 159103, pp. 2223; Rollo, G.R. No. 159185, pp. 21-22; Rollo, G.R. No. 159186, pp. 40-41.
18

Const., art. VIII, sec. 1; Dumlao v. COMELEC, G.R. No. L-52245, January 22, 1980, 95 SCRA 392.
19

Alunan III v. Mirasol, G.R. No. 108399, July 31, 1997, 276 SCRA 501.
20

Lacson v. Perez, G.R. No. 147780, May 10, 2001, 357 SCRA 757, 762.
21

Supra.

22

G.R. No. 113105, August 19, 1994, 235 SCRA 506.

23

Integrated Bar of the Philippines v. Zamora, G.R. No. 141284, August 15, 2000, 338 SCRA 81.
24

Rollo, G.R. No. 159085, p. 6. Lacson v. Perez, supra, at 766. G.R. No. 118910, November 19, 1995, 250 SCRA 130. Id., at 139.

25

26

27

28

Bayan (Bagong Alyansang Makabayan) v. Zamora, G.R No. 138570, October 10, 2000, 342 SCRA 449.
29

G.R. No. 132922, April 21, 1998, Telecommunications and Broadcast Attorneys of the Philippines, Inc. v. Commission on Elections, 289 SCRA 337.
30

II Record of the Constitutional Commission 409. Integrated Bar of the Philippines v. Zamora, supra at 110. Ibid. In the Philippines, the President is called the Chief Executive. Milton, The Use of Presidential Power, 1789-1943, pp. 73, 86-90. Id., at 91. Id., at 92. Ibid. Milton, at 91-92. Id., at 109. Ibid.

31

32

33

34

35

36

37

38

39

40

41

Ibid. 2 Black 635, 17 L. 459 (1863). Milton, at 110.

42

43

44

A paragraph of section 5 of the act of the U.S. Congress of July 1, 1902, otherwise known as the Philippine Bill of 1902, provides: "That the privilege of the writ of habeas corpus shall not be suspended, unless when in cases of rebellion, insurrection, or invasion the public safety may require it, in either of which events the same may be suspended by the President, or by the Governor-General with the approval of the Philippine Commission, whenever during such period the necessity for such suspension shall exist."
45

Barcelon v. Baker, 5 Phil. 87, 103 (1905). Sec. 10, Art. VII, 1935 Const.

46

47

Milton, 168-170; Peter Irons, A People's History of the Supreme Court, Published by the Penguin Group: New York, N.Y., 1999, pp. 245-247.
48

158 U.S. 1092 (1894). Id., at 1103. Milton, at 110. In An Autobiography, Roosevelt wrote:

49

50

The most important factor in getting the right spirit in my Administration, next to the insistence upon courage, honesty, and a genuine democracy of desire to serve the plain people, was my insistence upon the theory that the executive power was limited only by specific restrictions and prohibitions appearing in the Constitution or imposed by the Congress under its Constitutional powers. My view was that every executive officer, and above all, executive officer in high position was a steward of the people, and not to content himself with the negative merit of keeping his talents undamaged in a napkin. I declined to adopt the view that what was imperatively necessary for the Nation could not be done by the President unless he could find some specific authorization to do it. My belief was that it was not only

his right but his duty to do anything that the needs of the Nation demanded unless such action was forbidden by the Constitution or by the laws. Under this interpretation of the executive power, I did and caused to be done many things not previously done by the President and the heads of the Departments. I did not usurp power, but I did greatly broaden the use of executive power. In other words, I acted for the public welfare, I acted for the common well-being of all our people, whenever and in whatever manner was necessary, unless prevented by direct constitutional or legislative prohibition. I did not care a rap for the mere form and show of power; I cared immensely for the use that could be made of the substance. [An Autobiography, 389 (1913) New York.] William Howard Taft took the opposite view. He opined that "the President can exercise no power which cannot be fairly and reasonably traced to some specific grant of power or justly implied and included within such express grant as proper and necessary to its exercise. Such specific grant must be either in the Constitution or in an act of Congress passed in pursuance thereof. There is no undefined residuum of power which he can exercise because it seems to be in the public interest."50 (Our Chief Magistrate and His Powers, 139-142 (1916) New York.) Later, however, Taft, as Chief Justice, would change his view. See Myers v. United States, 272 US 52, 71 L Ed 160, 47 SC 21 (1926), holding that "The words of 2, following the general grant of executive power under 1 were either an enumeration of specific functions of the Executive, not all inclusive, or were limitations upon the general grant of the executive power, and as such, being limitations, should not be enlarged beyond the words used."
51

Milton, at 179.

52

The State may, in the interest of national welfare and defense, establish and operate industries and means of transportation and communication, and upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government.
53

In times of national emergency when the public interest so requires, the State may temporarily take over and direct the operation of any

privately owned public utility or business affected with public interest.

54

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.
55

Cortes, The Philippine Presidency, A Study of Executive Power, pp. 68-69.

56

I Arugeo, The Framing of the Constitutional Convention 397 (1949) Manila.

57

Marcos v. Manglapus, G.R. No. 88211, October 27, 1989, 178 SCRA 760, 763-764.
58

See Lacson v. Perez, supra, Kapunan, J., dissenting, at 773, 776. Ibid. Ibid. Const., art. VII, sec. 18. Lacson v. Perez, supra, Sandoval-Gutierrez dissenting, at 792-793.

59

60

61

62

63

SEC. 5. Arrests without warrant; when lawful. A police officer or a private person may, without a warrant, arrest a person: (a) When, in his presence, the person to be arrested has committed, or 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; .
64

Lacson v. Perez, supra, at 763. IBP v. Zamora, supra.

65

PANGANIBAN J.:
1

Angara v. Electoral Commission, 63 Phil. 139, 158, July 15,1936.

Mirasol v. Court of Appeals, 351 SCRA 44, 53-54, February 1, 2001; Board of Optometry v. Colet, 260 SCRA 88, 103, July 30, 1996; Lalican v. Hon. Vergara, 342 Phil. 485, 498, July 31, 1997; Philippine Constitution Association v. Enriquez, 235 SCRA 506, 518-519, August 19, 1994.
3

Tan v. People, 352 Phil. 724, 735, May 19, 1998; Board of Optometry v. Colet; id., p. 104.
4

Guingona Jr. v. Court of Appeals, 354 Phil. 415, 426, July 10, 1998; Meralco Workers Union v. Yatco, 125 Phil. 590, 594, January 30, 1967.
5

Guingona Jr. v. Court of Appeals, supra. Ibid. Ibid.

Philippine Association of Colleges and Universities v. Secretary of Education, 97 Phil. 806, 811, October 31, 1955.
9

Jaafar v. COMELEC, 364 Phil. 322, 328, March 15, 1999; Philippine National Bank v. Court of Appeals, 353 Phil. 473, 479, June 26, 1998; Gancho-on v. Secretary of Labor and Employment, 337 Phil. 654, 658, April 14, 1997.
10

The Petitions were originally filed before the Supreme Court.

11

The original jurisdiction of the Supreme Court under Section 5 (1) of Article VIII of the Constitution is limited to "petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus." Declaratory relief is not included.
12

Mirasol v. Court of Appeals, supra; Intia Jr. v. COA, 366 Phil. 273, 292, April 30, 1999, citing Sotto v. Commission on Elections, 76 Phil.

516, 522, April 16, 1946; Lalican v. Hon. Vergara, supra; Ty v. Trampe, 321 Phil. 81, 103, December 1, 1995; Macasiano v. National Housing Authority, 224 SCRA 236, 242, July 1, 1993.
13

Republic v. Hon. Judge Villarama Jr., 344 Phil. 288, 301, September 5, 1997; Lachica v. Hon. Yap, 134 Phil. 164, 168, September 25, 1968; Meralco Workers Union v. Yatco, supra. YNARES-SANTIAGO J.:
1

Majority Opinion, at pp. 14 et seq. Id., at pp. 20 to 21. Id., at p. 22. Id., at p. 23. Id., at pp. 23 to 24. Id., at p. 24.

Report of the Fact Finding Commission created by Adm. Ord. No. 78 dated 30 July 2003 (hereafter, Feliciano Report), at p. 1.
8

Feliciano Report, at p. 1. Id., at pp. 18-19. Id., at p. 28. Id. Id., at pp. 28 to 30. Id. Id., at p. 31. Id. Id.

10

11

12

13

14

15

16

17

206 Phil. 392 (1983). 149 Phil. 547 (1971). Const., art. VIII, sec. 1.

18

19

20

Integrated Bar of the Philippines v. Zamora, G.R. No. 141284, 15 August 2000, 338 SCRA 81.
21

See, e.g., Lansang v. Garcia, supra; Umil v. Ramos, G.R. No. 81567, 3 October 1991, 202 SCRA 251.
22

Lacson v. Perez, G.R. No. 147780, 10 May 2001, 357 SCRA 757.

SANDOVAL-GUTIERREZ, dissenting
1

Salva vs. Makalintal, G.R. No. 132603, September 18, 2000. G.R. No. 147780, May 10, 2001, 357 SCRA 757. The Report of the Fact-Finding Commission at 1. Section 18, Article VII of the 1987 Constitution. Smith/Cotter, Powers of the President During Crises, 1972 at 13.

Freund, Sutherland, Howe, Brown, Constitutional Law, 4th Ed. 1977 at 656.
7

inq7.net, May 2, 2001 at 1.

G.R. No. 171396

May 3, 2006

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, vs. GLORIA MACAPAGAL-ARROYO, 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 G.R. No. 171409 May 3, 2006

NIEZ CACHO-OLIVARES AND TRIBUNE PUBLISHING CO., INC., Petitioners, vs. HONORABLE SECRETARY EDUARDO ERMITA AND HONORABLE DIRECTOR GENERAL ARTURO C. LOMIBAO, Respondents. x-------------------------------------x G.R. No. 171485 May 3, 2006

FRANCIS JOSEPH G. ESCUDERO, JOSEPH A. SANTIAGO, TEODORO A. CASINO, AGAPITO A. AQUINO, MARIO J. AGUJA, SATUR C. OCAMPO, MUJIV S. HATAMAN, JUAN EDGARDO ANGARA, TEOFISTO DL. GUINGONA III, EMMANUEL JOSEL J. VILLANUEVA, LIZA L. MAZA, IMEE R. MARCOS, RENATO B. MAGTUBO, JUSTIN MARC SB. CHIPECO, ROILO GOLEZ, DARLENE ANTONINO-CUSTODIO, LORETTA ANN P. ROSALES, JOSEL G. VIRADOR, RAFAEL V. MARIANO, GILBERT C. REMULLA, FLORENCIO G. NOEL, ANA THERESIA HONTIVEROS-BARAQUEL, IMELDA C. NICOLAS, MARVIC M.V.F. LEONEN, NERI JAVIER COLMENARES, MOVEMENT OF CONCERNED CITIZENS FOR CIVIL LIBERTIES REPRESENTED BY AMADO GAT INCIONG, Petitioners, vs. 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 G.R. No. 171483 May 3, 2006

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, vs. HER EXCELLENCY, PRESIDENT GLORIA MACAPAGALARROYO, 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 G.R. No. 171400 May 3, 2006

ALTERNATIVE LAW GROUPS, INC. (ALG), Petitioner, vs. EXECUTIVE SECRETARY EDUARDO R. ERMITA, LT. GEN. GENEROSO SENGA, AND DIRECTOR GENERAL ARTURO LOMIBAO, Respondents. G.R. No. 171489 May 3, 2006

JOSE ANSELMO I. CADIZ, FELICIANO M. BAUTISTA, ROMULO R. RIVERA, JOSE AMOR M. AMORADO, ALICIA A. RISOS-VIDAL, FELIMON C. ABELITA III, MANUEL P. LEGASPI, J.B. JOVY C. BERNABE, BERNARD L. DAGCUTA, ROGELIO V. GARCIA AND INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioners, vs. 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 G.R. No. 171424 May 3, 2006

LOREN B. LEGARDA, Petitioner, vs. GLORIA MACAPAGALARROYO, 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. DECISION SANDOVAL-GUTIERREZ, J.: All powers need some restraint; practical adjustments rather than rigid formula are necessary.1 Superior strength the use of force cannot make wrongs into rights. In this regard, the courts should be vigilant in safeguarding the constitutional rights of the citizens, specifically their liberty. Chief Justice Artemio V. Panganibans philosophy of liberty is thus most relevant. He said: "In cases involving liberty, the scales of justice should weigh heavily against government and in favor of the poor, the oppressed, the marginalized, the dispossessed and the weak." Laws and actions that restrict fundamental rights come to the courts "with a heavy presumption against their constitutional validity."2 These seven (7) consolidated petitions for certiorari and prohibition allege that in issuing Presidential Proclamation No. 1017 (PP 1017) and General Order No. 5 (G.O. No. 5), President Gloria 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. Once again, the Court is faced with an age-old but persistently

modern problem. How does the Constitution of a free people combine the degree of liberty, without which, law becomes tyranny, with the degree of law, without which, liberty becomes license?3 On February 24, 2006, as the nation celebrated the 20th Anniversary of the Edsa People Power I, President Arroyo issued PP 1017 declaring a state of national emergency, thus: NOW, THEREFORE, I, Gloria Macapagal-Arroyo, President of the Republic of the Philippines and Commander-in-Chief of the Armed Forces of the Philippines, by virtue of the powers vested upon me by Section 18, Article 7 of the Philippine Constitution which states that: "The President. . . whenever it becomes necessary, . . . may call out (the) armed forces to prevent or suppress. . .rebellion. . .," and in my capacity as their Commander-in-Chief, do hereby command the Armed Forces of the Philippines, to maintain law and order throughout the Philippines, prevent or suppress all forms of lawless violence as well as any act of insurrection or rebellion and to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or upon my direction; and as provided in Section 17, Article 12 of the Constitution do hereby declare a State of National Emergency. She cited the following facts as bases: WHEREAS, over these past months, elements in the political opposition have conspired with authoritarians of the extreme Left represented by the NDF-CPP-NPA and the extreme Right, represented by military adventurists the historical enemies of the democratic Philippine State who are now in a tactical alliance and engaged in a concerted and systematic conspiracy, over a broad front, to bring down the duly constituted Government elected in May 2004; WHEREAS, these conspirators have repeatedly tried to bring down the President; WHEREAS, the claims of these elements have been recklessly magnified by certain segments of the national media; WHEREAS, this series of actions is hurting the Philippine State by

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

WHEREAS, these actions are adversely affecting the economy; WHEREAS, these activities give totalitarian forces; of both the extreme Left and extreme Right the opening to intensify their avowed aims to bring down the democratic Philippine State; WHEREAS, Article 2, Section 4 of our Constitution makes the defense and preservation of the democratic institutions and the State the primary duty of Government; WHEREAS, the activities above-described, their consequences, ramifications and collateral effects constitute a clear and present danger to the safety and the integrity of the Philippine State and of the Filipino people; WHEREAS, Proclamation 1017 date February 24, 2006 has been issued declaring a State of National Emergency; NOW, THEREFORE, I GLORIA MACAPAGAL-ARROYO, by virtue of the powers vested in me under the Constitution as President of the Republic of the Philippines, and Commander-in-Chief of the Republic of the Philippines, and pursuant to Proclamation No. 1017 dated February 24, 2006, do hereby call upon the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP), to prevent and suppress acts of terrorism and lawless violence in the country; I hereby direct the Chief of Staff of the AFP and the Chief of the PNP, as well as the officers and men of the AFP and PNP, to immediately carry out the necessary and appropriate actions and measures to suppress and prevent acts of terrorism and lawless violence. On March 3, 2006, exactly one week after the declaration of a state of national emergency and after all these petitions had been filed, the President lifted PP 1017. She issued Proclamation No. 1021 which reads: WHEREAS, pursuant to Section 18, Article VII and Section 17, Article XII of the Constitution, Proclamation No. 1017 dated February 24, 2006, was issued declaring a state of national emergency;

WHEREAS, by virtue of General Order No.5 and No.6 dated February 24, 2006, which were issued on the basis of Proclamation No. 1017, the Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP), were directed to maintain law and order throughout the Philippines, prevent and suppress all form of lawless violence as well as any act of rebellion and to undertake such action as may be necessary; WHEREAS, the AFP and PNP have effectively prevented, suppressed and quelled the acts lawless violence and rebellion; NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by law, hereby declare that the state of national emergency has ceased to exist. In their presentation of the factual bases of PP 1017 and G.O. No. 5, respondents stated that the proximate cause behind the executive issuances was the conspiracy among some military officers, leftist insurgents of the New Peoples Army (NPA), and some members of the political opposition in a plot to unseat or assassinate President Arroyo.4 They considered the aim to oust or assassinate the President and take-over the reigns of government as a clear and present danger. During the oral arguments held on March 7, 2006, the Solicitor General specified the facts leading to the issuance of PP 1017 and G.O. No. 5. Significantly, there was no refutation from petitioners counsels. The Solicitor General argued that the intent of the Constitution is to give full discretionary powers to the President in determining the necessity of calling out the armed forces. He emphasized that none of the petitioners has shown that PP 1017 was without factual bases. While he explained that it is not respondents task to state the facts behind the questioned Proclamation, however, they are presenting the same, narrated hereunder, for the elucidation of the issues. On January 17, 2006, Captain Nathaniel Rabonza and First Lieutenants Sonny Sarmiento, Lawrence San Juan and Patricio Bumidang, members of the Magdalo Group indicted in the Oakwood

mutiny, escaped their detention cell in Fort Bonifacio, Taguig City. In a public statement, they vowed to remain defiant and to elude arrest at all costs. They called upon the people to "show and proclaim our displeasure at the sham regime. Let us demonstrate our disgust, not only by going to the streets in protest, but also by wearing red bands on our left arms." 5 On February 17, 2006, the authorities got hold of a document entitled "Oplan Hackle I " which detailed plans for bombings and attacks during the Philippine Military Academy Alumni Homecoming in Baguio City. The plot was to assassinate selected targets including some cabinet members and President Arroyo herself.6 Upon the advice of her security, President Arroyo decided not to attend the Alumni Homecoming. The next day, at the height of the celebration, a bomb was found and detonated at the PMA parade ground. On February 21, 2006, Lt. San Juan was recaptured in a communist safehouse in Batangas province. Found in his possession were two (2) flash disks containing minutes of the meetings between members of the Magdalo Group and the National Peoples Army (NPA), a tape recorder, audio cassette cartridges, diskettes, and copies of subversive documents.7 Prior to his arrest, Lt. San Juan announced through DZRH that the "Magdalos D-Day would be on February 24, 2006, the 20th Anniversary of Edsa I." On February 23, 2006, PNP Chief Arturo Lomibao intercepted information that members of the PNP- Special Action Force were planning to defect. Thus, he immediately ordered SAF Commanding General Marcelino Franco, Jr. to "disavow" any defection. The latter promptly obeyed and issued a public statement: "All SAF units are under the effective control of responsible and trustworthy officers with proven integrity and unquestionable loyalty." On the same day, at the house of former Congressman Peping Cojuangco, President Cory Aquinos brother, businessmen and midlevel government officials plotted moves to bring down the Arroyo administration. Nelly Sindayen of TIME Magazine reported that Pastor Saycon, longtime Arroyo critic, called a U.S. government official about his groups plans if President Arroyo is ousted. Saycon also phoned a man code-named Delta. Saycon identified him as

B/Gen. Danilo Lim, Commander of the Armys elite Scout Ranger. Lim said "it was all systems go for the planned movement against Arroyo."8 B/Gen. Danilo Lim and Brigade Commander Col. Ariel Querubin confided to Gen. Generoso Senga, Chief of Staff of the Armed Forces of the Philippines (AFP), that a huge number of soldiers would join the rallies to provide a critical mass and armed component to the Anti-Arroyo protests to be held on February 24, 2005. According to these two (2) officers, there was no way they could possibly stop the soldiers because they too, were breaking the chain of command to join the forces foist to unseat the President. However, Gen. Senga has remained faithful to his Commander-in-Chief and to the chain of command. He immediately took custody of B/Gen. Lim and directed Col. Querubin to return to the Philippine Marines Headquarters in Fort Bonifacio. Earlier, the CPP-NPA called for intensification of political and revolutionary work within the military and the police establishments in order to forge alliances with its members and key officials. NPA spokesman Gregorio "Ka Roger" Rosal declared: "The Communist Party and revolutionary movement and the entire people look forward to the possibility in the coming year of accomplishing its immediate task of bringing down the Arroyo regime; of rendering it to weaken and unable to rule that it will not take much longer to end it."9 On the other hand, Cesar Renerio, spokesman for the National Democratic Front (NDF) at North Central Mindanao, publicly announced: "Anti-Arroyo groups within the military and police are growing rapidly, hastened by the economic difficulties suffered by the families of AFP officers and enlisted personnel who undertake counter-insurgency operations in the field." He claimed that with the forces of the national democratic movement, the anti-Arroyo conservative political parties, coalitions, plus the groups that have been reinforcing since June 2005, it is probable that the Presidents ouster is nearing its concluding stage in the first half of 2006. Respondents further claimed that the bombing of telecommunication towers and cell sites in Bulacan and Bataan was also considered as additional factual basis for the issuance of PP 1017 and G.O. No. 5.

So is the raid of an army outpost in Benguet resulting in the death of three (3) soldiers. And also the directive of the Communist Party of the Philippines ordering its front organizations to join 5,000 Metro Manila radicals and 25,000 more from the provinces in mass protests.10 By midnight of February 23, 2006, the President convened her security advisers and several cabinet members to assess the gravity of the fermenting peace and order situation. She directed both the AFP and the PNP to account for all their men and ensure that the chain of command remains solid and undivided. To protect the young students from any possible trouble that might break loose on the streets, the President suspended classes in all levels in the entire National Capital Region. For their part, petitioners cited the events that followed after the issuance of PP 1017 and G.O. No. 5. Immediately, the Office of the President announced the cancellation of all programs and activities related to the 20th anniversary celebration of Edsa People Power I; and revoked the permits to hold rallies issued earlier by the local governments. Justice Secretary Raul Gonzales stated that political rallies, which to the Presidents mind were organized for purposes of destabilization, are cancelled.Presidential Chief of Staff Michael Defensor announced that "warrantless arrests and take-over of facilities, including media, can already be implemented."11 Undeterred by the announcements that rallies and public assemblies would not be allowed, groups of protesters (members of Kilusang Mayo Uno [KMU] and National Federation of Labor Unions-Kilusang Mayo Uno [NAFLU-KMU]), marched from various parts of Metro Manila with the intention of converging at the EDSA shrine. Those who were already near the EDSA site were violently dispersed by huge clusters of anti-riot police. The well-trained policemen used truncheons, big fiber glass shields, water cannons, and tear gas to stop and break up the marching groups, and scatter the massed participants. The same police action was used against the protesters marching forward to Cubao, Quezon City and to the corner of Santolan Street and EDSA. That same evening, hundreds of riot

policemen broke up an EDSA celebration rally held along Ayala Avenue and Paseo de Roxas Street in Makati City.12 According to petitioner Kilusang Mayo Uno, the police cited PP 1017 as the ground for the dispersal of their assemblies. During the dispersal of the rallyists along EDSA, police arrested (without warrant) petitioner Randolf S. David, a professor at the University of the Philippines and newspaper columnist. Also arrested was his companion, Ronald Llamas, president of party-list Akbayan. At around 12:20 in the early morning of February 25, 2006, operatives of the Criminal Investigation and Detection Group (CIDG) of the PNP, on the basis of PP 1017 and G.O. No. 5, raided the Daily Tribune offices in Manila. The raiding team confiscated news stories by reporters, documents, pictures, and mock-ups of the Saturday issue. Policemen from Camp Crame in Quezon City were stationed inside the editorial and business offices of the newspaper; while policemen from the Manila Police District were stationed outside the building.13 A few minutes after the search and seizure at the Daily Tribune offices, the police surrounded the premises of another pro-opposition paper, Malaya, and its sister publication, the tabloid Abante. The raid, according to Presidential Chief of Staff Michael Defensor, is "meant to show a strong presence, to tell media outlets not to connive or do anything that would help the rebels in bringing down this government." The PNP warned that it would take over any media organization that would not follow "standards set by the government during the state of national emergency." Director General Lomibao stated that "if they do not follow the standards and the standards are - if they would contribute to instability in the government, or if they do not subscribe to what is in General Order No. 5 and Proc. No. 1017 we will recommend a takeover." National Telecommunications Commissioner Ronald Solis urged television and radio networks to "cooperate" with the government for the duration of the state of national emergency. He asked for "balanced reporting" from broadcasters when covering the events surrounding the coup attempt foiled by the government. He warned that his

agency will not hesitate to recommend the closure of any broadcast outfit that violates rules set out for media coverage when the national security is threatened.14 Also, on February 25, 2006, the police arrested Congressman Crispin Beltran, representing the Anakpawis Party and Chairman of Kilusang Mayo Uno (KMU), while leaving his farmhouse in Bulacan. The police showed a warrant for his arrest dated 1985. Beltrans lawyer explained that the warrant, which stemmed from a case of inciting to rebellion filed during the Marcos regime, had long been quashed. Beltran, however, is not a party in any of these petitions. When members of petitioner KMU went to Camp Crame to visit Beltran, they were told they could not be admitted because of PP 1017 and G.O. No. 5. Two members were arrested and detained, while the rest were dispersed by the police. Bayan Muna Representative Satur Ocampo eluded arrest when the police went after him during a public forum at the Sulo Hotel in Quezon City. But his two drivers, identified as Roel and Art, were taken into custody. Retired Major General Ramon Montao, former head of the Philippine Constabulary, was arrested while with his wife and golfmates at the Orchard Golf and Country Club in Dasmarias, Cavite. Attempts were made to arrest Anakpawis Representative Satur Ocampo, Representative Rafael Mariano, Bayan Muna Representative Teodoro Casio and Gabriela Representative Liza Maza. Bayan Muna Representative Josel Virador was arrested at the PAL Ticket Office in Davao City. Later, he was turned over to the custody of the House of Representatives where the "Batasan 5" decided to stay indefinitely. Let it be stressed at this point that the alleged violations of the rights of Representatives Beltran, Satur Ocampo, et al., are not being raised in these petitions. On March 3, 2006, President Arroyo issued PP 1021 declaring that the state of national emergency has ceased to exist.

In the interim, these seven (7) petitions challenging the constitutionality of PP 1017 and G.O. No. 5 were filed with this Court against the above-named respondents. Three (3) of these petitions impleaded President Arroyo as respondent. In G.R. No. 171396, petitioners Randolf S. David, et al. assailed PP 1017 on the grounds that (1) it encroaches on the emergency powers of Congress; (2) itis a subterfuge to avoid the constitutional requirements for the imposition of martial law; and (3) it violates the constitutional guarantees of freedom of the press, of speech and of assembly. In G.R. No. 171409, petitioners Ninez Cacho-Olivares and Tribune Publishing Co., Inc. challenged the CIDGs act of raiding the Daily Tribune offices as a clear case of "censorship" or "prior restraint." They also claimed that the term "emergency" refers only to tsunami, typhoon, hurricane and similar occurrences, hence, there is "absolutely no emergency" that warrants the issuance of PP 1017. In G.R. No. 171485, petitioners herein are Representative Francis Joseph G. Escudero, and twenty one (21) other members of the House of Representatives, including Representatives Satur Ocampo, Rafael Mariano, Teodoro Casio, Liza Maza, and Josel Virador. They asserted that PP 1017 and G.O. No. 5 constitute "usurpation of legislative powers"; "violation of freedom of expression" and "a declaration of martial law." They alleged that President Arroyo "gravely abused her discretion in calling out the armed forces without clear and verifiable factual basis of the possibility of lawless violence and a showing that there is necessity to do so." In G.R. No. 171483,petitioners KMU, NAFLU-KMU, and their members averred that PP 1017 and G.O. No. 5 are unconstitutional because (1) they arrogate unto President Arroyo the power to enact laws and decrees; (2) their issuance was without factual basis; and (3) they violate freedom of expression and the right of the people to peaceably assemble to redress their grievances. In G.R. No. 171400, petitioner Alternative Law Groups, Inc. (ALGI) alleged that PP 1017 and G.O. No. 5 are unconstitutional because they violate (a) Section 415 of Article II, (b) Sections 1,16 2,17 and 418 of

Article III, (c) Section 2319 of Article VI, and (d) Section 1720 of Article XII of the Constitution. In G.R. No. 171489, petitioners Jose Anselmo I. Cadiz et al., alleged that PP 1017 is an "arbitrary and unlawful exercise by the President of her Martial Law powers." And assuming that PP 1017 is not really a declaration of Martial Law, petitioners argued that "it amounts to an exercise by the President of emergency powers without congressional approval." In addition, petitioners asserted that PP 1017 "goes beyond the nature and function of a proclamation as defined under the Revised Administrative Code." And lastly, in G.R. No. 171424,petitionerLoren B. Legarda maintained that PP 1017 and G.O. No. 5 are "unconstitutional for being violative of the freedom of expression, including its cognate rights such as freedom of the press and the right to access to information on matters of public concern, all guaranteed under Article III, Section 4 of the 1987 Constitution." In this regard, she stated that these issuances prevented her from fully prosecuting her election protest pending before the Presidential Electoral Tribunal. In respondents Consolidated Comment, the Solicitor General countered that: first, the petitions should be dismissed for being moot; second,petitioners in G.R. Nos. 171400 (ALGI), 171424 (Legarda), 171483 (KMU et al.), 171485 (Escudero et al.) and 171489 (Cadiz et al.) have no legal standing; third, it is not necessary for petitioners to implead President Arroyo as respondent; fourth, PP 1017 has constitutional and legal basis; and fifth, PP 1017 does not violate the peoples right to free expression and redress of grievances. On March 7, 2006, the Court conducted oral arguments and heard the parties on the above interlocking issues which may be summarized as follows: A. PROCEDURAL: 1) Whether the issuance of PP 1021 renders the petitions moot and academic. 2) Whether petitioners in 171485 (Escudero et al.), G.R. Nos. 171400 (ALGI), 171483 (KMU et al.), 171489 (Cadiz et al.), and 171424

(Legarda) have legal standing. B. SUBSTANTIVE: 1) Whetherthe Supreme Court can review the factual bases of PP 1017. 2) Whether PP 1017 and G.O. No. 5 are unconstitutional. a. Facial Challenge b. Constitutional Basis c. As Applied Challenge A. PROCEDURAL First, we must resolve the procedural roadblocks. I- Moot and Academic Principle One of the greatest contributions of the American system to this country is the concept of judicial review enunciated in Marbury v. Madison.21 This concept rests on the extraordinary simple foundation -The Constitution is the supreme law. It was ordained by the people, the ultimate source of all political authority. It confers limited powers on the national government. x x x If the government consciously or unconsciously oversteps these limitations there must be some authority competent to hold it in control, to thwart its unconstitutional attempt, and thus to vindicate and preserve inviolate the will of the people as expressed in the Constitution. This power the courts exercise. This is the beginning and the end of the theory of judicial review.22 But the power of judicial review does not repose upon the courts a "self-starting capacity."23 Courts may exercise such power only when the following requisites are present: first, there must be an actual case or controversy; second, petitioners have to raise a question of constitutionality; third, the constitutional question must be raised at

the earliest opportunity; and fourth, the decision of the constitutional question must be necessary to the determination of the case itself.24 Respondents maintain that the first and second requisites are absent, hence, we shall limit our discussion thereon. An actual case or controversy involves a conflict of legal right, an opposite legal claims susceptible of judicial resolution. It is "definite and concrete, touching the legal relations of parties having adverse legal interest;" a real and substantial controversy admitting of specific relief.25 The Solicitor General refutes the existence of such actual case or controversy, contending that the present petitions were rendered "moot and academic" by President Arroyos issuance of PP 1021. Such contention lacks merit. A moot and academic case is one that ceases to present a justiciable controversy by virtue of supervening events,26 so that a declaration thereon would be of no practical use or value.27 Generally, courts decline jurisdiction over such case28 or dismiss it on ground of mootness.29 The Court holds that President Arroyos issuance of PP 1021 did not render the present petitions moot and academic. During the eight (8) days that PP 1017 was operative, the police officers, according to petitioners, committed illegal acts in implementing it. Are PP 1017 and G.O. No. 5 constitutional or valid? Do they justify these alleged illegal acts? These are the vital issues that must be resolved in the present petitions. It must be stressed that "an unconstitutional act is not a law, it confers no rights, it imposes no duties, it affords no protection; it is in legal contemplation, inoperative."30 The "moot and academic" principle is not a magical formula that can automatically dissuade the courts in resolving a case. Courts will decide cases, otherwise moot and academic, if: first, there is a grave violation of the Constitution;31 second, the exceptional character of the situation and the paramount public interest is involved;32 third, when constitutional issue raised requires formulation of controlling principles to guide the bench, the bar, and the public;33 and fourth, the

case is capable of repetition yet evading review.34 All the foregoing exceptions are present here and justify this Courts assumption of jurisdiction over the instant petitions. Petitioners alleged that the issuance of PP 1017 and G.O. No. 5 violates the Constitution. There is no question that the issues being raised affect the publics interest, involving as they do the peoples basic rights to freedom of expression, of assembly and of the press. Moreover, the Court has the duty to formulate guiding and controlling constitutional precepts, doctrines or rules. It has the symbolic function of educating the bench and the bar, and in the present petitions, the military and the police, on the extent of the protection given by constitutional guarantees.35 And lastly, respondents contested actions are capable of repetition. Certainly, the petitions are subject to judicial review. In their attempt to prove the alleged mootness of this case, respondents cited Chief Justice Artemio V. Panganibans Separate Opinion in Sanlakas v. Executive Secretary.36 However, they failed to take into account the Chief Justices very statement that an otherwise "moot" case may still be decided "provided the party raising it in a proper case has been and/or continues to be prejudiced or damaged as a direct result of its issuance." The present case falls right within this exception to the mootness rule pointed out by the Chief Justice. II- Legal Standing In view of the number of petitioners suing in various personalities, the Court deems it imperative to have a more than passing discussion on legal standing or locus standi. Locus standi is defined as "a right of appearance in a court of justice on a given question."37 In private suits, standing is governed by the "real-parties-in interest" rule as contained in Section 2, Rule 3 of the 1997 Rules of Civil Procedure, as amended. It provides that "every action must be prosecuted or defended in the name of the real party in interest." Accordingly, the "real-party-in interest" is "the party who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit."38 Succinctly put, the plaintiffs standing is based on his own right to the relief sought.

The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a "public right" in assailing an allegedly illegal official action, does so as a representative of the general public. He may be a person who is affected no differently from any other person. He could be suing as a "stranger," or in the category of a "citizen," or taxpayer." In either case, he has to adequately show that he is entitled to seek judicial protection. In other words, he has to make out a sufficient interest in the vindication of the public order and the securing of relief as a "citizen" or "taxpayer. Case law in most jurisdictions now allows both "citizen" and "taxpayer" standing in public actions. The distinction was first laid down in Beauchamp v. Silk,39 where it was held that the plaintiff in a taxpayers suit is in a different category from the plaintiff in a citizens suit. In the former, the plaintiff is affected by the expenditure of public funds, while in the latter, he is but the mere instrument of the public concern. As held by the New York Supreme Court in People ex rel Case v. Collins:40 "In matter of mere public right, howeverthe people are the real partiesIt is at least the right, if not the duty, of every citizen to interfere and see that a public offence be properly pursued and punished, and that a public grievance be remedied." With respect to taxpayers suits, Terr v. Jordan41 held that "the right of a citizen and a taxpayer to maintain an action in courts to restrain the unlawful use of public funds to his injury cannot be denied." However, to prevent just about any person from seeking judicial interference in any official policy or act with which he disagreed with, and thus hinders the activities of governmental agencies engaged in public service, the United State Supreme Court laid down the more stringent "direct injury" test in Ex Parte Levitt,42 later reaffirmed in Tileston v. Ullman.43 The same Court ruled that for a private individual to invoke the judicial power to determine the validity of an executive or legislative action, he must show that he has sustained a direct injury as a result of that action, and it is not sufficient that he has a general interest common to all members of the public. This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera,44 it held that the person who impugns the validity of a statute must have "a personal and substantial interest in the case

such that he has sustained, or will sustain direct injury as a result." The Vera doctrine was upheld in a litany of cases, such as, Custodio v. President of the Senate,45 Manila Race Horse Trainers Association v. De la Fuente,46 Pascual v. Secretary of Public Works47 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 personality to file the suit. Indeed, there is a chain of cases where this liberal policy has been observed, allowing ordinary citizens, members of Congress, and civic organizations to prosecute actions involving the constitutionality or validity of laws, regulations and rulings.51 Thus, the Court has adopted a rule that even where the petitioners have failed to show direct injury, they have been allowed to sue under the principle of "transcendental importance." Pertinent are the following cases: (1) Chavez v. Public Estates Authority,52 where the Court ruled that the enforcement of the constitutional right to information and the equitable diffusion of natural resources are matters of transcendental importance which clothe the petitioner with locus standi; (2) Bagong Alyansang Makabayan v. Zamora,53 wherein the Court held that "given the transcendental importance of the issues involved, the Court may relax the standing requirements and allow the suit to prosper despite the lack of direct injury to the parties seeking judicial review" of the Visiting Forces Agreement; (3) Lim v. Executive Secretary,54 while the Court noted that the petitioners may not file suit in their capacity as taxpayers absent a showing that "Balikatan 02-01" involves the exercise of Congress

taxing or spending powers, it reiterated its ruling in Bagong Alyansang Makabayan v. Zamora,55that in cases of transcendental importance, the cases must be settled promptly and definitely and standing requirements may be relaxed. By way of summary, the following rules may be culled from the cases decided by this Court. Taxpayers, voters, concerned citizens, and legislators may be accorded standing to sue, provided that the following requirements are met: (1) the cases involve constitutional issues; (2) for taxpayers, there must be a claim of illegal disbursement of public funds or that the tax measure is unconstitutional; (3) for voters, there must be a showing of obvious interest in the validity of the election law in question; (4) for concerned citizens, there must be a showing that the issues raised are of transcendental importance which must be settled early; and (5) for legislators, there must be a claim that the official action complained of infringes upon their prerogatives as legislators. Significantly, recent decisions show a certain toughening in the Courts attitude toward legal standing. In Kilosbayan, Inc. v. Morato,56 the Court ruled that the status of Kilosbayan as a peoples organization does not give it the requisite personality to question the validity of the on-line lottery contract, more so where it does not raise any issue of constitutionality. Moreover, it cannot sue as a taxpayer absent any allegation that public funds are being misused. Nor can it sue as a concerned citizen as it does not allege any specific injury it has suffered. In Telecommunications and Broadcast Attorneys of the Philippines, Inc. v. Comelec,57 the Court reiterated the "direct injury" test with respect to concerned citizens cases involving constitutional issues. It held that "there must be a showing that the citizen personally suffered some actual or threatened injury arising from the alleged illegal

official act." In Lacson v. Perez,58 the Court ruled that one of the petitioners, Laban ng Demokratikong Pilipino (LDP), is not a real party-in-interest as it had not demonstrated any injury to itself or to its leaders, members or supporters. In Sanlakas v. Executive Secretary,59 the Court ruled that only the petitioners who are members of Congress have standing to sue, as they claim that the Presidents declaration of a state of rebellion is a usurpation of the emergency powers of Congress, thus impairing their legislative powers. As to petitioners Sanlakas, Partido Manggagawa, and Social Justice Society, the Court declared them to be devoid of standing, equating them with the LDP in Lacson. Now, the application of the above principles to the present petitions. The locus standi of petitioners in G.R. No. 171396, particularly David and Llamas, is beyond doubt. The same holds true with petitioners in G.R. No. 171409, 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. In G.R. No. 171485, the opposition Congressmen alleged there was usurpation of legislative powers. They also raised the issue of whether or not the concurrence of Congress is necessary whenever the alarming powers incident to Martial Law are used. Moreover, it is in the interest of justice that those affected by PP 1017 can be represented by their Congressmen in bringing to the attention of the Court the alleged violations of their basic rights. In G.R. No. 171400, (ALGI), this Court applied the liberality rule in Philconsa v. Enriquez,60 Kapatiran Ng Mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan,61 Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform,62 Basco v. Philippine Amusement and Gaming Corporation,63 and 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 legal standing. Organizations may be granted standing to assert the rights of their members.65 We take judicial notice of the announcement by the Office of the President banning all rallies and canceling all permits for public assemblies following the issuance of PP 1017 and G.O. No. 5. In G.R. No. 171489, petitioners, Cadiz et al., who are national officers of the Integrated Bar of the Philippines (IBP) have no legal standing, having failed to allege any direct or potential injury which the IBP as an institution or its members may suffer as a consequence of the issuance of PP No. 1017 and G.O. No. 5. In Integrated Bar of the Philippines v. Zamora,66 the Court held that the mere invocation by the IBP of its duty to preserve the rule of law and nothing more, while undoubtedly true, is not sufficient to clothe it with standing in this case. This is too general an interest which is shared by other groups and the whole citizenry. However, in view of the transcendental importance of the issue, this Court declares that petitioner have locus standi. In G.R. No. 171424, Loren Legarda has no personality as a taxpayer to file the instant petition as there are no allegations of illegal disbursement of public funds. The fact that she is a former Senator is of no consequence. She can no longer sue as a legislator on the allegation that her prerogatives as a lawmaker have been impaired by PP 1017 and G.O. No. 5. Her claim that she is a media personality will not likewise aid her because there was no showing that the enforcement of these issuances prevented her from pursuing her occupation. Her submission that she has pending electoral protest before the Presidential Electoral Tribunal is likewise of no relevance. She has not sufficiently shown that PP 1017 will affect the proceedings or result of her case. But considering once more the transcendental importance of the issue involved, this Court may relax the standing rules. It must always be borne in mind that the question of locus standi is but corollary to the bigger question of proper exercise of judicial power. This is the underlying legal tenet of the "liberality doctrine" on legal standing. It cannot be doubted that the validity of PP No. 1017

and G.O. No. 5 is a judicial question which is of paramount importance to the Filipino people. To paraphrase Justice Laurel, the whole of Philippine society now waits with bated breath the ruling of this Court on this very critical matter. The petitions thus call for the application of the "transcendental importance" doctrine, a relaxation of the standing requirements for the petitioners in the "PP 1017 cases."
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This Court holds that all the petitioners herein have locus standi. Incidentally, it is not proper to implead President Arroyo as respondent. Settled is the doctrine that the President, during his tenure of office or actual incumbency,67 may not be sued in any civil or criminal case, and there is no need to provide for it in the Constitution or law. It will degrade the dignity of the high office of the President, the Head of State, if he can be dragged into court litigations while serving as such. Furthermore, it is important that he be freed from any form of harassment, hindrance or distraction to enable him to fully attend to the performance of his official duties and functions. Unlike the legislative and judicial branch, only one constitutes the executive branch and anything which impairs his usefulness in the discharge of the many great and important duties imposed upon him by the Constitution necessarily impairs the operation of the Government. However, this does not mean that the President is not accountable to anyone. Like any other official, he remains accountable to the people68 but he may be removed from office only in the mode provided by law and that is by impeachment.69 B. SUBSTANTIVE I. Review of Factual Bases Petitioners maintain that PP 1017 has no factual basis. Hence, it was not "necessary" for President Arroyo to issue such Proclamation. The issue of whether the Court may review the factual bases of the Presidents exercise of his Commander-in-Chief power has reached its distilled point - from the indulgent days of Barcelon v. Baker70 and Montenegro v. Castaneda71 to the volatile era of Lansang v. Garcia,72 Aquino, Jr. v. Enrile,73 and Garcia-Padilla v. Enrile.74 The tug-of-war always cuts across the line defining "political questions," particularly

those questions "in regard to which full discretionary authority has been delegated to the legislative or executive branch of the government."75 Barcelon and Montenegro were in unison in declaring that the authority to decide whether an exigency has arisen belongs to the President and his decision is final and conclusive on the courts. Lansang took the opposite view. There, the members of the Court were unanimous in the conviction that the Court has the authority to inquire into the existence of factual bases in order to determine their constitutional sufficiency. From the principle of separation of powers, it shifted the focus to the system of checks and balances, "under which the President is supreme, x x x only if and when he acts within the sphere allotted to him by the Basic Law, and the authority to determine whether or not he has so acted is vested in the Judicial Department, which in this respect, is, in turn, constitutionally supreme."76 In 1973, the unanimous Court of Lansang was divided in Aquino v. Enrile.77 There, the Court was almost evenly divided on the issue of whether the validity of the imposition of Martial Law is a political or justiciable question.78 Then came Garcia-Padilla v. Enrile which greatly diluted Lansang. It declared that there is a need to re-examine the latter case, ratiocinating that "in times of war or national emergency, the President must be given absolute control for the very life of the nation and the government is in great peril. The President, it intoned, is answerable only to his conscience, the People, and God."79 The Integrated Bar of the Philippines v. Zamora80 -- a recent case most pertinent to these cases at bar -- echoed a principle similar to Lansang. While the Court considered the Presidents "calling-out" power as a discretionary power solely vested in his wisdom, it stressed that "this does not prevent an examination of whether such power was exercised within permissible constitutional limits or whether it was exercised in a manner constituting grave abuse of discretion."This ruling is mainly a result of the Courts reliance on Section 1, Article VIII of 1987 Constitution which fortifies the authority of the courts to determine in an appropriate action the validity of the acts of the political departments. Under the new definition of judicial power, the courts are authorized not only "to settle actual controversies involving rights which are legally demandable and enforceable," but also "to determine whether or

not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government." The latter part of the authority represents a broadening of judicial power to enable the courts of justice to review what was before a forbidden territory, to wit, the discretion of the political departments of the government.81 It speaks of judicial prerogative not only in terms of power but also of duty.82 As to how the Court may inquire into the Presidents exercise of power, Lansang adopted the test that "judicial inquiry can go no further than to satisfy the Court not that the Presidents decision is correct," but that "the President did not act arbitrarily." Thus, the standard laid down is not correctness, but arbitrariness.83 In Integrated Bar of the Philippines, this Court further ruled that "it is incumbent upon the petitioner to show that the Presidents decision is totally bereft of factual basis" and that if he fails, by way of proof, to support his assertion, then "this Court cannot undertake an independent investigation beyond the pleadings." Petitioners failed to show that President Arroyos exercise of the calling-out power, by issuing PP 1017, is totally bereft of factual basis. A reading of the Solicitor Generals Consolidated Comment and Memorandum shows a detailed narration of the events leading to the issuance of PP 1017, with supporting reports forming part of the records. Mentioned are the escape of the Magdalo Group, their audacious threat of the Magdalo D-Day, the defections in the military, particularly in the Philippine Marines, and the reproving statements from the communist leaders. There was also the Minutes of the Intelligence Report and Security Group of the Philippine Army showing the growing alliance between the NPA and the military. Petitioners presented nothing to refute such events. Thus, absent any contrary allegations, the Court is convinced that the President was justified in issuing PP 1017 calling for military aid. Indeed, judging the seriousness of the incidents, President Arroyo was not expected to simply fold her arms and do nothing to prevent or suppress what she believed was lawless violence, invasion or rebellion. However, the exercise of such power or duty must not stifle liberty.

II. Constitutionality of PP 1017 and G.O. No. 5 Doctrines of Several Political Theorists on the Power of the President in Times of Emergency This case brings to fore a contentious subject -- the power of the President in times of emergency. A glimpse at the various political theories relating to this subject provides an adequate backdrop for our ensuing discussion. John Locke, describing the architecture of civil government, called upon the English doctrine of prerogative to cope with the problem of emergency. In times of danger to the nation, positive law enacted by the legislature might be inadequate or even a fatal obstacle to the promptness of action necessary to avert catastrophe. In these situations, the Crown retained a prerogative "power to act according to discretion for the public good, without the proscription of the law and sometimes even against it."84 But Locke recognized that this moral restraint might not suffice to avoid abuse of prerogative powers. Who shall judge the need for resorting to the prerogative and how may its abuse be avoided? Here, Locke readily admitted defeat, suggesting that "the people have no other remedy in this, as in all other cases where they have no judge on earth, but to appeal to Heaven."85 Jean-Jacques Rousseau also assumed the need for temporary suspension of democratic processes of government in time of emergency. According to him: The inflexibility of the laws, which prevents them from adopting themselves to circumstances, may, in certain cases, render them disastrous and make them bring about, at a time of crisis, the ruin of the State It is wrong therefore to wish to make political institutions as strong as to render it impossible to suspend their operation. Even Sparta allowed its law to lapse... If the peril is of such a kind that the paraphernalia of the laws are an obstacle to their preservation, the method is to nominate a supreme lawyer, who shall silence all the laws and suspend for a moment the sovereign authority. In such a case, there is no doubt about the

general will, and it clear that the peoples first intention is that the State shall not perish.86 Rosseau did not fear the abuse of the emergency dictatorship or "supreme magistracy" as he termed it. For him, it would more likely be cheapened by "indiscreet use." He was unwilling to rely upon an "appeal to heaven." Instead, he relied upon a tenure of office of prescribed duration to avoid perpetuation of the dictatorship.87 John Stuart Mill concluded his ardent defense of representative government: "I am far from condemning, in cases of extreme necessity, the assumption of absolute power in the form of a temporary dictatorship."88 Nicollo Machiavellis view of emergency powers, as one element in the whole scheme of limited government, furnished an ironic contrast to the Lockean theory of prerogative. He recognized and attempted to bridge this chasm in democratic political theory, thus: Now, in a well-ordered society, it should never be necessary to resort to extra constitutional measures; for although they may for a time be beneficial, yet the precedent is pernicious, for if the practice is once established for good objects, they will in a little while be disregarded under that pretext but for evil purposes. Thus, no republic will ever be perfect if she has not by law provided for everything, having a remedy for every emergency and fixed rules for applying it.89 Machiavelli in contrast to Locke, Rosseau and Mill sought to incorporate into the constitution a regularized system of standby emergency powers to be invoked with suitable checks and controls in time of national danger. He attempted forthrightly to meet the problem of combining a capacious reserve of power and speed and vigor in its application in time of emergency, with effective constitutional restraints.90 Contemporary political theorists, addressing themselves to the problem of response to emergency by constitutional democracies, have employed the doctrine of constitutional dictatorship.91 Frederick M. Watkins saw "no reason why absolutism should not be used as a means for the defense of liberal institutions," provided it "serves to protect established institutions from the danger of

permanent injury in a period of temporary emergency and is followed by a prompt return to the previous forms of political life."92 He recognized the two (2) key elements of the problem of emergency governance, as well as all constitutional governance: increasing administrative powers of the executive, while at the same time "imposing limitation upon that power."93 Watkins placed his real faith in a scheme of constitutional dictatorship. These are the conditions of success of such a dictatorship: "The period of dictatorship must be relatively shortDictatorship should always be strictly legitimate in characterFinal authority to determine the need for dictatorship in any given case must never rest with the dictator himself"94 and the objective of such an emergency dictatorship should be "strict political conservatism." Carl J. Friedrich cast his analysis in terms similar to those of Watkins.95 "It is a problem of concentrating power in a government where power has consciously been divided to cope with situations of unprecedented magnitude and gravity. There must be a broad grant of powers, subject to equally strong limitations as to who shall exercise such powers, when, for how long, and to what end."96 Friedrich, too, offered criteria for judging the adequacy of any of scheme of emergency powers, to wit: "The emergency executive must be appointed by constitutional means i.e., he must be legitimate; he should not enjoy power to determine the existence of an emergency; emergency powers should be exercised under a strict time limitation; and last, the objective of emergency action must be the defense of the constitutional order."97 Clinton L. Rossiter, after surveying the history of the employment of emergency powers in Great Britain, France, Weimar, Germany and the United States, reverted to a description of a scheme of "constitutional dictatorship" as solution to the vexing problems presented by emergency.98 Like Watkins and Friedrich, he stated a priori the conditions of success of the "constitutional dictatorship," thus: 1) No general regime or particular institution of constitutional dictatorship should be initiated unless it is necessary or even indispensable to the preservation of the State and its constitutional order

2) the decision to institute a constitutional dictatorship should never be in the hands of the man or men who will constitute the dictator 3) No government should initiate a constitutional dictatorship without making specific provisions for its termination 4) all uses of emergency powers and all readjustments in the organization of the government should be effected in pursuit of constitutional or legal requirements 5) no dictatorial institution should be adopted, no right invaded, no regular procedure altered any more than is absolutely necessary for the conquest of the particular crisis . . . 6) The measures adopted in the prosecution of the a constitutional dictatorship should never be permanent in character or effect 7) The dictatorship should be carried on by persons representative of every part of the citizenry interested in the defense of the existing constitutional order. . . 8) Ultimate responsibility should be maintained for every action taken under a constitutional dictatorship. . . 9) The decision to terminate a constitutional dictatorship, like the decision to institute one should never be in the hands of the man or men who constitute the dictator. . . 10) No constitutional dictatorship should extend beyond the termination of the crisis for which it was instituted 11) the termination of the crisis must be followed by a complete return as possible to the political and governmental conditions existing prior to the initiation of the constitutional dictatorship99 Rossiter accorded to legislature a far greater role in the oversight exercise of emergency powers than did Watkins. He would secure to Congress final responsibility for declaring the existence or termination of an emergency, and he places great faith in the effectiveness of congressional investigating committees.100

Scott and Cotter, in analyzing the above contemporary theories in light of recent experience, were one in saying that, "the suggestion that democracies surrender the control of government to an authoritarian ruler in time of grave danger to the nation is not based upon sound constitutional theory." To appraise emergency power in terms of constitutional dictatorship serves merely to distort the problem and hinder realistic analysis. It matters not whether the term "dictator" is used in its normal sense (as applied to authoritarian rulers) or is employed to embrace all chief executives administering emergency powers. However used, "constitutional dictatorship" cannot be divorced from the implication of suspension of the processes of constitutionalism. Thus, they favored instead the "concept of constitutionalism" articulated by Charles H. McIlwain: A concept of constitutionalism which is less misleading in the analysis of problems of emergency powers, and which is consistent with the findings of this study, is that formulated by Charles H. McIlwain. While it does not by any means necessarily exclude some indeterminate limitations upon the substantive powers of government, full emphasis is placed upon procedural limitations, and political responsibility. McIlwain clearly recognized the need to repose adequate power in government. And in discussing the meaning of constitutionalism, he insisted that the historical and proper test of constitutionalism was the existence of adequate processes for keeping government responsible. He refused to equate constitutionalism with the enfeebling of government by an exaggerated emphasis upon separation of powers and substantive limitations on governmental power. He found that the really effective checks on despotism have consisted not in the weakening of government but, but rather in the limiting of it; between which there is a great and very significant difference. In associating constitutionalism with "limited" as distinguished from "weak" government, McIlwain meant government limited to the orderly procedure of law as opposed to the processes of force. The two fundamental correlative elements of constitutionalism for which all lovers of liberty must yet fight are the legal limits to arbitrary power and a complete political responsibility of government to the governed.101 In the final analysis, the various approaches to emergency of the above political theorists - from Locks "theory of prerogative," to

Watkins doctrine of "constitutional dictatorship" and, eventually, to McIlwains "principle of constitutionalism" --- ultimately aim to solve one real problem in emergency governance, i.e., that of allotting increasing areas of discretionary power to the Chief Executive, while insuring that such powers will be exercised with a sense of political responsibility and under effective limitations and checks. Our Constitution has fairly coped with this problem. Fresh from the fetters of a repressive regime, the 1986 Constitutional Commission, in drafting the 1987 Constitution, endeavored to create a government in the concept of Justice Jacksons "balanced power structure."102 Executive, legislative, and judicial powers are dispersed to the President, the Congress, and the Supreme Court, respectively. Each is supreme within its own sphere. But none has the monopoly of power in times of emergency. Each branch is given a role to serve as limitation or check upon the other. This system does not weaken the President, it just limits his power, using the language of McIlwain. In other words, in times of emergency, our Constitution reasonably demands that we repose a certain amount of faith in the basic integrity and wisdom of the Chief Executive but, at the same time, it obliges him to operate within carefully prescribed procedural limitations. a. "Facial Challenge" Petitioners contend that PP 1017 is void on its face because of its "overbreadth." They claim that its enforcement encroached on both unprotected and protected rights under Section 4, Article III of the Constitution and sent a "chilling effect" to the citizens. A facial review of PP 1017, using the overbreadth doctrine, is uncalled for. First and foremost, the overbreadth doctrine is an analytical tool developed for testing "on their faces" statutes in free speech cases, also known under the American Law as First Amendment cases.103 A plain reading of PP 1017 shows that it is not primarily directed to speech or even speech-related conduct. It is actually a call upon the AFP to prevent or suppress all forms of lawless violence. In United

States v. Salerno,104 the US Supreme Court held that "we have not recognized an overbreadth doctrine outside the limited context of the First Amendment" (freedom of speech). Moreover, the overbreadth doctrine is not intended for testing the validity of a law that "reflects legitimate state interest in maintaining comprehensive control over harmful, constitutionally unprotected conduct." Undoubtedly, lawless violence, insurrection and rebellion are considered "harmful" and "constitutionally unprotected conduct." In Broadrick v. Oklahoma,105 it was held: It remains a matter of no little difficulty to determine when a law may properly be held void on its face and when such summary action is inappropriate. But the plain import of our cases is, at the very least, that facial overbreadth adjudication is an exception to our traditional rules of practice and that its function, a limited one at the outset, attenuates as the otherwise unprotected behavior that it forbids the State to sanction moves from pure speech toward conduct and that conduct even if expressive falls within the scope of otherwise valid criminal laws that reflect legitimate state interests in maintaining comprehensive controls over harmful, constitutionally unprotected conduct. Thus, claims of facial overbreadth are entertained in cases involving statutes which, by their terms, seek to regulate only "spoken words" and again, that "overbreadth claims, if entertained at all, have been curtailed when invoked against ordinary criminal laws that are sought to be applied to protected conduct."106 Here, the incontrovertible fact remains that PP 1017 pertains to a spectrum of conduct, not free speech, which is manifestly subject to state regulation. Second, facial invalidation of laws is considered as "manifestly strong medicine," to be used "sparingly and only as a last resort," and is "generally disfavored;"107 The reason for this is obvious. Embedded in the traditional rules governing constitutional adjudication is the principle that a person to whom a law may be applied will not be heard to challenge a law on the ground that it may conceivably be applied unconstitutionally to others, i.e., in other situations not before the Court.108 A writer and scholar in

Constitutional Law explains further: The most distinctive feature of the overbreadth technique is that it marks an exception to some of the usual rules of constitutional litigation. Ordinarily, a particular litigant claims that a statute is unconstitutional as applied to him or her; if the litigant prevails, the courts carve away the unconstitutional aspects of the law by invalidating its improper applications on a case to case basis. Moreover, challengers to a law are not permitted to raise the rights of third parties and can only assert their own interests. In overbreadth analysis, those rules give way; challenges are permitted to raise the rights of third parties; and the court invalidates the entire statute "on its face," not merely "as applied for" so that the overbroad law becomes unenforceable until a properly authorized court construes it more narrowly. The factor that motivates courts to depart from the normal adjudicatory rules is the concern with the "chilling;" deterrent effect of the overbroad statute on third parties not courageous enough to bring suit. The Court assumes that an overbroad laws "very existence may cause others not before the court to refrain from constitutionally protected speech or expression." An overbreadth ruling is designed to remove that deterrent effect on the speech of those third parties. In other words, a facial challenge using the overbreadth doctrine will require the Court to examine PP 1017 and pinpoint its flaws and defects, not on the basis of its actual operation to petitioners, but on the assumption or prediction that its very existence may cause others not before the Court to refrain from constitutionally protected speech or expression. In Younger v. Harris,109 it was held that: [T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the judiciary. The combination of the relative remoteness of the controversy, the impact on the legislative process of the relief sought, and above all the speculative and amorphous nature of the required line-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 faces" statutes in free speech cases. And like overbreadth, it is said that a litigant may challenge a statute on its face only if it is vague in all its possible applications. Again, petitioners did not even attempt to show that PP 1017 is vague in all its application. They also failed to establish that men of common intelligence cannot understand the meaning and application of PP 1017. b. Constitutional Basis of PP 1017 Now on the constitutional foundation of PP 1017. The operative portion of PP 1017 may be divided into three important provisions, thus: First provision: "by virtue of the power vested upon me by Section 18, Artilce VII do hereby command the Armed Forces of the Philippines, to maintain law and order throughout the Philippines, prevent or suppress all forms of lawless violence as well any act of insurrection or rebellion" Second provision: "and to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or upon my direction;"

Third provision: "as provided in Section 17, Article XII of the Constitution do hereby declare a State of National Emergency." First Provision: Calling-out Power The first provision pertains to the Presidents calling-out power. In Sanlakas v. Executive Secretary,111 this Court, through Mr. Justice Dante O. Tinga, held that Section 18, Article VII of the Constitution reproduced as follows: Sec. 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, when the public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law. Within fortyeight hours from the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus, the President shall submit a report in person or in writing to the Congress. The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such proclamation or suspension, which revocation shall not be set aside by the President. Upon the initiative of the President, the Congress may, in the same manner, extend such proclamation or suspension for a period to be determined by the Congress, if the invasion or rebellion shall persist and public safety requires it. The Congress, if not in session, shall within twenty-four hours following such proclamation or suspension, convene in accordance with its rules without need of a call. The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual bases of the proclamation of martial law or the suspension of the privilege of the writ or the extension thereof, and must promulgate its decision thereon within thirty days from its filing. A state of martial law does not suspend the operation of the

Constitution, nor supplant the functioning of the civil courts or legislative assemblies, nor authorize the conferment of jurisdiction on military courts and agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of the writ. The suspension of the privilege of the writ shall apply only to persons judicially charged for rebellion or offenses inherent in or directly connected with invasion. During the suspension of the privilege of the writ, any person thus arrested or detained shall be judicially charged within three days, otherwise he shall be released. grants the President, as Commander-in-Chief, a "sequence" of graduated powers. From the most to the least benign, these are: the calling-out power, the power to suspend the privilege of the writ of habeas corpus, and the power to declare Martial Law. Citing Integrated Bar of the Philippines v. Zamora,112 the Court ruled that the only criterion for the exercise of the calling-out power is that "whenever it becomes necessary," the President may call the armed forces "to prevent or suppress lawless violence, invasion or rebellion." Are these conditions present in the instant cases? As stated earlier, considering the circumstances then prevailing, President Arroyo found it necessary to issue PP 1017. Owing to her Offices vast intelligence network, she is in the best position to determine the actual condition of the country. Under the calling-out power, the President may summon the armed forces to aid him in suppressing lawless violence, invasion and rebellion. This involves ordinary police action. But every act that goes beyond the Presidents calling-out power is considered illegal or ultra vires. For this reason, a President must be careful in the exercise of his powers. He cannot invoke a greater power when he wishes to act under a lesser power. There lies the wisdom of our Constitution, the greater the power, the greater are the limitations. It is pertinent to state, however, that there is a distinction between the Presidents authority to declare a "state of rebellion" (in Sanlakas) and the authority to proclaim a state of national emergency. While President Arroyos authority to declare a "state of rebellion" emanates

from her powers as Chief Executive, the statutory authority cited in Sanlakas was Section 4, Chapter 2, Book II of the Revised Administrative Code of 1987, which provides: SEC. 4. Proclamations. Acts of the President fixing a date or declaring a status or condition of public moment or interest, upon the existence of which the operation of a specific law or regulation is made to depend, shall be promulgated in proclamations which shall have the force of an executive order. President Arroyos declaration of a "state of rebellion" was merely an act declaring a status or condition of public moment or interest, a declaration allowed under Section 4 cited above. Such declaration, in the words of Sanlakas, is harmless, without legal significance, and deemed not written. In these cases, PP 1017 is more than that. In declaring a state of national emergency, President Arroyo did not only rely on Section 18, Article VII of the Constitution, a provision calling on the AFP to prevent or suppress lawless violence, invasion or rebellion. She also relied on Section 17, Article XII, a provision on the States extraordinary power to take over privately-owned public utility and business affected with public interest. Indeed, PP 1017 calls for the exercise of an awesome power. Obviously, such Proclamation cannot be deemed harmless, without legal significance, or not written, as in the case of Sanlakas. Some of the petitioners vehemently maintain that PP 1017 is actually a declaration of Martial Law. It is no so. What defines the character of PP 1017 are its wordings. It is plain therein that what the President invoked was her calling-out power. The declaration of Martial Law is a "warn[ing] to citizens that the military power has been called upon by the executive to assist in the maintenance of law and order, and that, while the emergency lasts, they must, upon pain of arrest and punishment, not commit any acts which will in any way render more difficult the restoration of order and the enforcement of law."113 In his "Statement before the Senate Committee on Justice" on March 13, 2006, Mr. Justice Vicente V. Mendoza,114 an authority in constitutional law, said that of the three powers of the President as

Commander-in-Chief, the power to declare Martial Law poses the most severe threat to civil liberties. It is a strong medicine which should not be resorted to lightly. It cannot be used to stifle or persecute critics of the government. It is placed in the keeping of the President for the purpose of enabling him to secure the people from harm and to restore order so that they can enjoy their individual freedoms. In fact, Section 18, Art. VII, provides: A state of martial law does not suspend the operation of the Constitution, nor supplant the functioning of the civil courts or legislative assemblies, nor authorize the conferment of jurisdiction on military courts and agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of the writ. Justice Mendoza also stated that PP 1017 is not a declaration of Martial Law. It is no more than a call by the President to the armed forces to prevent or suppress lawless violence. As such, it cannot be used to justify acts that only under a valid declaration of Martial Law can be done. Its use for any other purpose is a perversion of its nature and scope, and any act done contrary to its command is ultra vires. Justice Mendoza further stated that specifically, (a) arrests and seizures without judicial warrants; (b) ban on public assemblies; (c) take-over of news media and agencies and press censorship; and (d) issuance of Presidential Decrees, are powers which can be exercised by the President as Commander-in-Chief only where there is a valid declaration of Martial Law or suspension of the writ of habeas corpus. Based on the above disquisition, it is clear that PP 1017 is not a declaration of Martial Law. It is merely an exercise of President Arroyos calling-out power for the armed forces to assist her in preventing or suppressing lawless violence. Second Provision: "Take Care" Power The second provision pertains to the power of the President to ensure that the laws be faithfully executed. This is based on Section 17, Article VII which reads: SEC. 17. The President shall have control of all the executive

departments, bureaus, and offices. He shall ensure that the laws be faithfully executed. As the Executive in whom the executive power is vested,115 the primary function of the President is to enforce the laws as well as to formulate policies to be embodied in existing laws. He sees to it that all laws are enforced by the officials and employees of his department. Before assuming office, he is required to take an oath or affirmation to the effect that as President of the Philippines, he will, among others, "execute its laws."116 In the exercise of such function, the President, if needed, may employ the powers attached to his office as the Commander-in-Chief of all the armed forces of the country,117 including the Philippine National Police118 under the Department of Interior and Local Government.119 Petitioners, especially Representatives Francis Joseph G. Escudero, Satur Ocampo, Rafael Mariano, Teodoro Casio, Liza Maza, and Josel Virador argue that PP 1017 is unconstitutional as it arrogated upon President Arroyo the power to enact laws and decrees in violation of Section 1, Article VI of the Constitution, which vests the power to enact laws in Congress. They assail the clause "to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or upon my direction." \ Petitioners contention is understandable. A reading of PP 1017 operative clause shows that it was lifted120 from Former President Marcos Proclamation No. 1081, which partly reads: NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines by virtue of the powers vested upon me by Article VII, Section 10, Paragraph (2) of the Constitution, do hereby place the entire Philippines as defined in Article 1, Section 1 of the Constitution under martial law and, in my capacity as their Commander-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 decrees, orders and regulations promulgated by me personally or upon my direction. We all know that it was PP 1081 which granted President Marcos legislative power. Its enabling clause states: "to enforce obedience to all the laws and decrees, orders and regulations promulgated by me personally or upon my direction." Upon the other hand, the enabling clause of PP 1017 issued by President Arroyo is: to enforce obedience to all the laws and to all decrees, orders and regulations promulgated by me personally or upon my direction." Is it within the domain of President Arroyo to promulgate "decrees"? PP 1017 states in part: "to enforce obedience to all the laws and decrees x x x promulgated by me personally or upon my direction." The President is granted an Ordinance Power under Chapter 2, Book III of Executive Order No. 292 (Administrative Code of 1987). She may issue any of the following: Sec. 2. Executive Orders. Acts of the President providing for rules of a general or permanent character in implementation or execution of constitutional or statutory powers shall be promulgated in executive orders. Sec. 3. Administrative Orders. Acts of the President which relate to particular aspect of governmental operations in pursuance of his duties as administrative head shall be promulgated in administrative orders. Sec. 4. Proclamations. Acts of the President fixing a date or declaring a status or condition of public moment or interest, upon the existence of which the operation of a specific law or regulation is made to depend, shall be promulgated in proclamations which shall have the force of an executive order. Sec. 5. Memorandum Orders. Acts of the President on matters of administrative detail or of subordinate or temporary interest which only concern a particular officer or office of the Government shall be

embodied in memorandum orders. Sec. 6. Memorandum Circulars. Acts of the President on matters relating to internal administration, which the President desires to bring to the attention of all or some of the departments, agencies, bureaus or offices of the Government, for information or compliance, shall be embodied in memorandum circulars. Sec. 7. General or Special Orders. Acts and commands of the President in his capacity as Commander-in-Chief of the Armed Forces of the Philippines shall be issued as general or special orders. President Arroyos ordinance power is limited to the foregoing issuances. She cannot issue decrees similar to those issued by Former President Marcos under PP 1081. Presidential Decrees are laws which are of the same category and binding force as statutes because they were issued by the President in the exercise of his legislative power during the period of Martial Law under the 1973 Constitution.121 This Court rules that the assailed PP 1017 is unconstitutional insofar as it grants President Arroyo the authority to promulgate "decrees." Legislative power is peculiarly within the province of the Legislature. Section 1, Article VI categorically states that "[t]he legislative power shall be vested in the Congress of the Philippines which shall consist of a Senate and a House of Representatives." To be sure, neither Martial Law nor a state of rebellion nor a state of emergency can justify President Arroyos exercise of legislative power by issuing decrees. Can President Arroyo enforce obedience to all decrees and laws through the military? As this Court stated earlier, President Arroyo has no authority to enact decrees. It follows that these decrees are void and, therefore, cannot be enforced. With respect to "laws," she cannot call the military to enforce or implement certain laws, such as customs laws, laws governing family and property relations, laws on obligations and contracts and the like. She can only order the military, under PP 1017, to enforce laws pertinent to its duty to suppress lawless violence.

Third Provision: Power to Take Over The pertinent provision of PP 1017 states: x x x and to enforce obedience to all the laws and to all decrees, orders, and regulations promulgated by me personally or upon my direction; and as provided in Section 17, Article XII of the Constitution do hereby declare a state of national emergency. The import of this provision is that President Arroyo, during the state of national emergency under PP 1017, can call the military not only to enforce obedience "to all the laws and to all decrees x x x" but also to act pursuant to the provision of Section 17, Article XII which reads: Sec. 17. In times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately-owned public utility or business affected with public interest. What could be the reason of President Arroyo in invoking the above provision when she issued PP 1017? The answer is simple. During the existence of the state of national emergency, PP 1017 purports to grant the President, without any authority or delegation from Congress, to take over or direct the operation of any privately-owned public utility or business affected with public interest. This provision was first introduced in the 1973 Constitution, as a product of the "martial law" thinking of the 1971 Constitutional Convention.122 In effect at the time of its approval was President Marcos Letter of Instruction No. 2 dated September 22, 1972 instructing the Secretary of National Defense to take over "the management, control and operation of the Manila Electric Company, the Philippine Long Distance Telephone Company, the National Waterworks and Sewerage Authority, the Philippine National Railways, the Philippine Air Lines, Air Manila (and) Filipinas Orient Airways . . . for the successful prosecution by the Government of its effort to contain, solve and end the present national emergency."

Petitioners, particularly the members of the House of Representatives, claim that President Arroyos inclusion of Section 17, Article XII in PP 1017 is an encroachment on the legislatures emergency powers. This is an area that needs delineation. A distinction must be drawn between the Presidents authority to declare "a state of national emergency" and to exercise emergency powers. To the first, as elucidated by the Court, Section 18, Article VII grants the President such power, hence, no legitimate constitutional objection can be raised. But to the second, manifold constitutional issues arise. Section 23, Article VI of the Constitution reads: SEC. 23. (1) The Congress, by a vote of two-thirds of both Houses in joint session assembled, voting separately, shall have the sole power to declare the existence of a state of war. (2) In times of war or other national emergency, the Congress may, by law, authorize the President, for a limited period and subject to such restrictions as it may prescribe, to exercise powers necessary and proper to carry out a declared national policy. Unless sooner withdrawn by resolution of the Congress, such powers shall cease upon the next adjournment thereof. It may be pointed out that the second paragraph of the above provision refers not only to war but also to "other national emergency." If the intention of the Framers of our Constitution was to withhold from the President the authority to declare a "state of national emergency" pursuant to Section 18, Article VII (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. But the exercise of emergency powers, such as the taking over of

privately owned public utility or business affected with public interest, is a different matter. This requires a delegation from Congress. Courts have often said that constitutional provisions in pari materia are to be construed together. Otherwise stated, different clauses, sections, and provisions of a constitution which relate to the same subject matter will be construed together and considered in the light of each other.123 Considering that Section 17 of Article XII and Section 23 of Article VI, previously quoted, relate to national emergencies, they must be read together to determine the limitation of the exercise of emergency powers. Generally, Congress is the repository of emergency powers. This is evident in the tenor of Section 23 (2), Article VI authorizing it to delegate such powers to the President. Certainly, a body cannot delegate a power not reposed upon it. However, knowing that during grave emergencies, it may not be possible or practicable for Congress to meet and exercise its powers, the Framers of our Constitution deemed it wise to allow Congress to grant emergency powers to the President, subject to certain conditions, thus: (1) There must be a war or other emergency. (2) The delegation must be for a limited period only. (3) The delegation must be subject to such restrictions as the Congress may prescribe. (4) The emergency powers must be exercised to carry out a national policy declared by Congress.124 Section 17, Article XII must be understood as an aspect of the emergency powers clause. The taking over of private business affected with public interest is just another facet of the emergency powers generally reposed upon Congress. Thus, when Section 17 states that the "the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately owned public utility or business affected with public interest," it refers to Congress, not the President. Now, whether or not the President may exercise such power is dependent on whether Congress may delegate it to him

pursuant to a law prescribing the reasonable terms thereof. Youngstown Sheet & Tube Co. et al. v. Sawyer,125 held: It is clear that if the President had authority to issue the order he did, it must be found in some provision of the Constitution. And it is not claimed that express constitutional language grants this power to the President. The contention is that presidential power should be implied from the aggregate of his powers under the Constitution. Particular reliance is placed on provisions in Article II which say that "The executive Power shall be vested in a President . . . .;" that "he shall take Care that the Laws be faithfully executed;" and that he "shall be Commander-in-Chief of the Army and Navy of the United States. The order cannot properly be sustained as an exercise of the Presidents military power as Commander-in-Chief of the Armed Forces. The Government attempts to do so by citing a number of cases upholding broad powers in military commanders engaged in day-to-day fighting in a theater of war. Such cases need not concern us here. Even though "theater of war" be an expanding concept, we cannot with faithfulness to our constitutional system hold that the Commander-in-Chief of the Armed Forces has the ultimate power as such to take possession of private property in order to keep labor disputes from stopping production. This is a job for the nations lawmakers, not for its military authorities. Nor can the seizure order be sustained because of the several constitutional provisions that grant executive power to the President. In the framework of our Constitution, the Presidents power to see that the laws are faithfully executed refutes the idea that he is to be a lawmaker. The Constitution limits his functions in the lawmaking process to the recommending of laws he thinks wise and the vetoing of laws he thinks bad. And the Constitution is neither silent nor equivocal about who shall make laws which the President is to execute. The first section of the first article says that "All legislative Powers herein granted shall be vested in a Congress of the United States. . ."126 Petitioner Cacho-Olivares, et al. contends that the term "emergency" under Section 17, Article XII refers to "tsunami," "typhoon," "hurricane"and"similar occurrences." This is a limited view of

"emergency." Emergency, as a generic term, connotes the existence of conditions suddenly intensifying the degree of existing danger to life or wellbeing beyond that which is accepted as normal. Implicit in this definitions are the elements of intensity, variety, and perception.127 Emergencies, as perceived by legislature or executive in the United Sates since 1933, have been occasioned by a wide range of situations, classifiable under three (3) principal heads: a) economic,128 b) natural disaster,129 and c) national security.130 "Emergency," as contemplated in our Constitution, is of the same breadth. It may include rebellion, economic crisis, pestilence or epidemic, typhoon, flood, or other similar catastrophe of nationwide proportions or effect.131 This is evident in the Records of the Constitutional Commission, thus: MR. GASCON. Yes. What is the Committees definition of "national emergency" which appears in Section 13, page 5? It reads: When the common good so requires, the State may temporarily take over or direct the operation of any privately owned public utility or business affected with public interest. MR. VILLEGAS. What I mean is threat from external aggression, for example, calamities or natural disasters. MR. GASCON. There is a question by Commissioner de los Reyes. What about strikes and riots? MR. VILLEGAS. Strikes, no; those would not be covered by the term "national emergency." MR. BENGZON. Unless they are of such proportions such that they would paralyze government service.132 xxxxxx MR. TINGSON. May I ask the committee if "national emergency" refers to military national emergency or could this be economic emergency?"

MR. VILLEGAS. Yes, it could refer to both military or economic dislocations. MR. TINGSON. Thank you very much.133 It may be argued that when there is national emergency, Congress may not be able to convene and, therefore, unable to delegate to the President the power to take over privately-owned public utility or business affected with public interest. In Araneta v. Dinglasan,134 this Court emphasized that legislative power, through which extraordinary measures are exercised, remains in Congress even in times of crisis. "x x x After all the criticisms that have been made against the efficiency of the system of the separation of powers, the fact remains that the Constitution has set up this form of government, with all its defects and shortcomings, in preference to the commingling of powers in one man or group of men. The Filipino people by adopting parliamentary government have given notice that they share the faith of other democracy-loving peoples in this system, with all its faults, as the ideal. The point is, under this framework of government, legislation is preserved for Congress all the time, not excepting periods of crisis no matter how serious. Never in the history of the United States, the basic features of whose Constitution have been copied in ours, have specific functions of the legislative branch of enacting laws been surrendered to another department unless we regard as legislating the carrying out of a legislative policy according to prescribed standards; no, not even when that Republic was fighting a total war, or when it was engaged in a life-and-death struggle to preserve the Union. The truth is that under our concept of constitutional government, in times of extreme perils more than in normal circumstances the various branches, executive, legislative, and judicial, given the ability to act, are called upon to perform the duties and discharge the responsibilities committed to them respectively." Following our interpretation of Section 17, Article XII, invoked by President Arroyo in issuing PP 1017, this Court rules that such Proclamation does not authorize her during the emergency to

temporarily take over or direct the operation of any privately owned public utility or business affected with public interest without authority from Congress. Let it be emphasized that while the President alone can declare a state of national emergency, however, without legislation, he has no power to take over privately-owned public utility or business affected with public interest. The President cannot decide whether exceptional circumstances exist warranting the take over of privately-owned public utility or business affected with public interest. Nor can he determine when such exceptional circumstances have ceased. Likewise, without legislation, the President has no power to point out the types of businesses affected with public interest that should be taken over. In short, the President has no absolute authority to exercise all the powers of the State under Section 17, Article VII in the absence of an emergency powers act passed by Congress. c. "AS APPLIED CHALLENGE" One of the misfortunes of an emergency, particularly, that which pertains to security, is that military necessity and the guaranteed rights of the individual are often not compatible. Our history reveals that in the crucible of conflict, many rights are curtailed and trampled upon. Here, the right against unreasonable search and seizure; the right against warrantless arrest; and the freedom of speech, of expression, of the press, and of assembly under the Bill of Rights suffered the greatest blow. Of the seven (7) petitions, three (3) indicate "direct injury." In G.R. No. 171396, petitioners David and Llamas alleged that, on February 24, 2006, they were arrested without warrants on their way to EDSA to celebrate the 20th Anniversary of People Power I. The arresting officers cited PP 1017 as basis of the arrest. In G.R. No. 171409, petitioners Cacho-Olivares and Tribune Publishing Co., Inc. claimed that on February 25, 2006, the CIDG operatives "raided and ransacked without warrant" their office. Three policemen were assigned to guard their office as a possible "source of destabilization." Again, the basis was PP 1017.

And in G.R. No. 171483, petitioners KMU and NAFLU-KMU et al. alleged that their members were "turned away and dispersed" when they went to EDSA and later, to Ayala Avenue, to celebrate the 20th Anniversary of People Power I. A perusal of the "direct injuries" allegedly suffered by the said petitioners shows that they resulted from the implementation, pursuant to G.O. No. 5, of PP 1017. Can this Court adjudge as unconstitutional PP 1017 and G.O. No 5 on the basis of these illegal acts? In general, does the illegal implementation of a law render it unconstitutional? Settled is the rule that courts are not at liberty to declare statutes invalid although they may be abused and misabused135 and may afford an opportunity for abuse in the manner of application.136 The validity of a statute or ordinance is to be determined from its general purpose and its efficiency to accomplish the end desired, not from its effects in a particular case.137 PP 1017 is merely an invocation of the Presidents calling-out power. Its general purpose is to command the AFP to suppress all forms of lawless violence, invasion or rebellion. It had accomplished the end desired which prompted President Arroyo to issue PP 1021. But there is nothing in PP 1017 allowing the police, expressly or impliedly, to conduct illegal arrest, search or violate the citizens constitutional rights. Now, may this Court adjudge a law or ordinance unconstitutional on the ground that its implementor committed illegal acts? The answer is no. The criterion by which the validity of the statute or ordinance is to be measured is the essential basis for the exercise of power, and not a mere incidental result arising from its exertion.138 This is logical. Just imagine the absurdity of situations when laws maybe declared unconstitutional just because the officers implementing them have acted arbitrarily. If this were so, judging from the blunders committed by policemen in the cases passed upon by the Court, majority of the provisions of the Revised Penal Code would have been declared unconstitutional a long time ago. President Arroyo issued G.O. No. 5 to carry into effect the provisions of PP 1017. General orders are "acts and commands of the President

in his capacity as Commander-in-Chief of the Armed Forces of the Philippines." They are internal rules issued by the executive officer to his subordinates precisely for the proper and efficient administration of law. Such rules and regulations create no relation except between the official who issues them and the official who receives them.139 They are based on and are the product of, a relationship in which power is their source, and obedience, their object.140 For these reasons, one requirement for these rules to be valid is that they must be reasonable, not arbitrary or capricious. G.O. No. 5 mandates the AFP and the PNP to immediately carry out the "necessary and appropriate actions and measures to suppress and prevent acts of terrorism and lawless violence." Unlike the term "lawless violence" which is unarguably extant in our statutes and the Constitution, and which is invariably associated with "invasion, insurrection or rebellion," the phrase "acts of terrorism" is still an amorphous and vague concept. Congress has yet to enact a law defining and punishing acts of terrorism. In fact, this "definitional predicament" or the "absence of an agreed definition of terrorism" confronts not only our country, but the international community as well. The following observations are quite apropos: In the actual unipolar context of international relations, the "fight against terrorism" has become one of the basic slogans when it comes to the justification of the use of force against certain states and against groups operating internationally. Lists of states "sponsoring terrorism" and of terrorist organizations are set up and constantly being updated according to criteria that are not always known to the public, but are clearly determined by strategic interests. The basic problem underlying all these military actions or threats of the use of force as the most recent by the United States against Iraq consists in the absence of an agreed definition of terrorism. Remarkable confusion persists in regard to the legal categorization of acts of violence either by states, by armed groups such as liberation movements, or by individuals.

The dilemma can by summarized in the saying "One countrys terrorist is another countrys freedom fighter." The apparent contradiction or lack of consistency in the use of the term "terrorism" may further be demonstrated by the historical fact that leaders of national liberation movements such as Nelson Mandela in South Africa, Habib Bourgouiba in Tunisia, or Ahmed Ben Bella in Algeria, to mention only a few, were originally labeled as terrorists by those who controlled the territory at the time, but later became internationally respected statesmen. What, then, is the defining criterion for terrorist acts the differentia specifica distinguishing those acts from eventually legitimate acts of national resistance or self-defense? Since the times of the Cold War the United Nations Organization has been trying in vain to reach a consensus on the basic issue of definition. The organization has intensified its efforts recently, but has been unable to bridge the gap between those who associate "terrorism" with any violent act by non-state groups against civilians, state functionaries or infrastructure or military installations, and those who believe in the concept of the legitimate use of force when resistance against foreign occupation or against systematic oppression of ethnic and/or religious groups within a state is concerned. The dilemma facing the international community can best be illustrated by reference to the contradicting categorization of organizations and movements such as Palestine Liberation Organization (PLO) which is a terrorist group for Israel and a liberation movement for Arabs and Muslims the Kashmiri resistance groups who are terrorists in the perception of India, liberation fighters in that of Pakistan the earlier Contras in Nicaragua freedom fighters for the United States, terrorists for the Socialist camp or, most drastically, the Afghani Mujahedeen (later to become the Taliban movement): during the Cold War period they were a group of freedom fighters for the West, nurtured by the United States, and a terrorist gang for the Soviet Union. One could go on and on in enumerating examples of conflicting categorizations that cannot be reconciled in any way because of opposing political interests that are at the roots of those perceptions.

How, then, can those contradicting definitions and conflicting perceptions and evaluations of one and the same group and its actions be explained? In our analysis, the basic reason for these striking inconsistencies lies in the divergent interest of states. Depending on whether a state is in the position of an occupying power or in that of a rival, or adversary, of an occupying power in a given territory, the definition of terrorism will "fluctuate" accordingly. A state may eventually see itself as protector of the rights of a certain ethnic group outside its territory and will therefore speak of a "liberation struggle," not of "terrorism" when acts of violence by this group are concerned, and vice-versa. The United Nations Organization has been unable to reach a decision on the definition of terrorism exactly because of these conflicting interests of sovereign states that determine in each and every instance how a particular armed movement (i.e. a non-state actor) is labeled in regard to the terrorists-freedom fighter dichotomy. A "policy of double standards" on this vital issue of international affairs has been the unavoidable consequence. This "definitional predicament" of an organization consisting of sovereign states and not of peoples, in spite of the emphasis in the Preamble to the United Nations Charter! has become even more serious in the present global power constellation: one superpower exercises the decisive role in the Security Council, former great powers of the Cold War era as well as medium powers are increasingly being marginalized; and the problem has become even more acute since the terrorist attacks of 11 September 2001 I the United States.141 The absence of a law defining "acts of terrorism" may result in abuse and oppression on the part of the police or military. An illustration is when a group of persons are merely engaged in a drinking spree. Yet the military or the police may consider the act as an act of terrorism and immediately arrest them pursuant to G.O. No. 5. Obviously, this is abuse and oppression on their part. It must be remembered that an act can only be considered a crime if there is a law defining the same as such and imposing the corresponding penalty thereon. So far, the word "terrorism" appears only once in our criminal laws,

i.e., in P.D. No. 1835 dated January 16, 1981 enacted by President Marcos during the Martial Law regime. This decree is entitled "Codifying The Various Laws on Anti-Subversion and Increasing The Penalties for Membership in Subversive Organizations." The word "terrorism" is mentioned in the following provision: "That one who conspires with any other person for the purpose of overthrowing the Government of the Philippines x x x by force, violence, terrorism, x x x shall be punished by reclusion temporal x x x." P.D. No. 1835 was repealed by E.O. No. 167 (which outlaws the Communist Party of the Philippines) enacted by President Corazon Aquino on May 5, 1985. These two (2) laws, however, do not define "acts of terrorism." Since there is no law defining "acts of terrorism," it is President Arroyo alone, under G.O. No. 5, who has the discretion to determine what acts constitute terrorism. Her judgment on this aspect is absolute, without restrictions. Consequently, there can be indiscriminate arrest without warrants, breaking into offices and residences, taking over the media enterprises, prohibition and dispersal of all assemblies and gatherings unfriendly to the administration. All these can be effected in the name of G.O. No. 5. These acts go far beyond the calling-out power of the President. Certainly, they violate the due process clause of the Constitution. Thus, this Court declares that the "acts of terrorism" portion of G.O. No. 5 is unconstitutional. Significantly, there is nothing in G.O. No. 5 authorizing the military or police to commit acts beyond what are necessary and appropriate to suppress and prevent lawless violence, the limitation of their authority in pursuing the Order. Otherwise, such acts are considered illegal. We first examine G.R. No. 171396 (David et al.) The Constitution provides that "the right of the people to be secured in their persons, houses, papers and effects against unreasonable search and seizure of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the

place to be searched and the persons or things to be seized."142 The plain import of the language of the Constitution is that searches, seizures and arrests are normally unreasonable unless authorized by a validly issued search warrant or warrant of arrest. Thus, the fundamental protection given by this provision is that between person and police must stand the protective authority of a magistrate clothed with power to issue or refuse to issue search warrants or warrants of arrest.143 In the Brief Account144 submitted by petitioner David, certain facts are established: first, he was arrested without warrant; second, the PNP operatives arrested him on the basis of PP 1017; third, he was brought at Camp Karingal, Quezon City where he was fingerprinted, photographed and booked like a criminal suspect; fourth,he was treated brusquely by policemen who "held his head and tried to push him" inside an unmarked car; fifth, he was charged with Violation of Batas Pambansa Bilang No. 880145 and Inciting to Sedition; sixth, he was detained for seven (7) hours; and seventh,he was eventually released for insufficiency of evidence. Section 5, Rule 113 of the Revised Rules on Criminal Procedure provides: Sec. 5. Arrest without warrant; when lawful. - A peace officer or a private person may, without a warrant, arrest a person: (a) When, in his presence, the person to be arrested has committed, is actually committing, or is attempting to commit an offense. (b) When an offense has just been committed and he has probable cause to believe based on personal knowledge of facts or circumstances that the person to be arrested has committed it; and x x x. Neither of the two (2) exceptions mentioned above justifies petitioner Davids warrantless arrest. During the inquest for the charges of inciting to sedition and violation of BP 880, all that the arresting officers could invoke was their observation that some rallyists were wearing t-shirts with the invective "Oust Gloria Now" and their erroneous assumption that petitioner David was the leader of the

rally.146 Consequently, the Inquest Prosecutor ordered his immediate release on the ground of insufficiency of evidence. He noted that petitioner David was not wearing the subject t-shirt and even if he was wearing it, such fact is insufficient to charge him with inciting to sedition. Further, he also stated that there is insufficient evidence for the charge of violation of BP 880 as it was not even known whether petitioner David was the leader of the rally.147 But what made it doubly worse for petitioners David et al. is that not only was their right against warrantless arrest violated, but also their right to peaceably assemble. Section 4 of Article III guarantees: No law shall be passed abridging the freedom of speech, of expression, or of the press, or the right of the people peaceably to assemble and petition the government for redress of grievances. "Assembly" means a right on the part of the citizens to meet peaceably for consultation in respect to public affairs. It is a necessary consequence of our republican institution and complements the right of speech. As in the case of freedom of expression, this right is not to be limited, much less denied, except on a showing of a clear and present danger of a substantive evil that Congress has a right to prevent. In other words, like other rights embraced in the freedom of expression, the right to assemble is not subject to previous restraint or censorship. It may not be conditioned upon the prior issuance of a permit or authorization from the government authorities except, of course, if the assembly is intended to be held in a public place, a permit for the use of such place, and not for the assembly itself, may be validly required. The ringing truth here is that petitioner David, et al. were arrested while they were exercising their right to peaceful assembly. They were not committing any crime, neither was there a showing of a clear and present danger that warranted the limitation of that right. As can be gleaned from circumstances, the charges of inciting to sedition and violation of BP 880 were mere afterthought. Even the Solicitor General, during the oral argument, failed to justify the arresting officers conduct. In De Jonge v. Oregon,148 it was held that

peaceable assembly cannot be made a crime, thus: Peaceable assembly for lawful discussion cannot be made a crime. The holding of meetings for peaceable political action cannot be proscribed. Those who assist in the conduct of such meetings cannot be branded as criminals on that score. The question, if the rights of free speech and peaceful assembly are not to be preserved, is not as to the auspices under which the meeting was held but as to its purpose; not as to the relations of the speakers, but whether their utterances transcend the bounds of the freedom of speech which the Constitution protects. If the persons assembling have committed crimes elsewhere, if they have formed or are engaged in a conspiracy against the public peace and order, they may be prosecuted for their conspiracy or other violations of valid laws. But it is a different matter when the State, instead of prosecuting them for such offenses, seizes upon mere participation in a peaceable assembly and a lawful public discussion as the basis for a criminal charge. On the basis of the above principles, the Court likewise considers the dispersal and arrest of the members of KMU et al. (G.R. No. 171483) unwarranted. Apparently, their dispersal was done merely on the basis of Malacaangs directive canceling all permits previously issued by local government units. This is arbitrary. The wholesale cancellation of all permits to rally is a blatant disregard of the principle that "freedom of assembly is not to be limited, much less denied, except on a showing of a clear and present danger of a substantive evil that the State has a right to prevent."149 Tolerance is the rule and limitation is the exception. Only upon a showing that an assembly presents a clear and present danger that the State may deny the citizens right to exercise it. Indeed, respondents failed to show or convince the Court that the rallyists committed acts amounting to lawless violence, invasion or rebellion. With the blanket revocation of permits, the distinction between protected and unprotected assemblies was eliminated. Moreover, under BP 880, the authority to regulate assemblies and rallies is lodged with the local government units. They have the power to issue permits and to revoke such permits after due notice and hearing on the determination of the presence of clear and present

danger. Here, petitioners were not even notified and heard on the revocation of their permits.150 The first time they learned of it was at the time of the dispersal. Such absence of notice is a fatal defect. When a persons right is restricted by government action, it behooves a democratic government to see to it that the restriction is fair, reasonable, and according to procedure. G.R. No. 171409, (Cacho-Olivares, et al.) presents another facet of freedom of speech i.e., the freedom of the press. Petitioners narration of facts, which the Solicitor General failed to refute, established the following: first, the Daily Tribunes offices were searched without warrant;second, the police operatives seized several materials for publication; third, the search was conducted at about 1:00 o clock in the morning of February 25, 2006; fourth, the search was conducted in the absence of any official of the Daily Tribune except the security guard of the building; and fifth, policemen stationed themselves at the vicinity of the Daily Tribune offices. Thereafter, a wave of warning came from government officials. Presidential Chief of Staff Michael Defensor was quoted as saying that such raid was "meant to show a strong presence, to tell media outlets not to connive or do anything that would help the rebels in bringing down this government." Director General Lomibao further stated that "if they do not follow the standards and the standards are if they would contribute to instability in the government, or if they do not subscribe to what is in General Order No. 5 and Proc. No. 1017 we will recommend a takeover." National Telecommunications Commissioner Ronald Solis urged television and radio networks to "cooperate" with the government for the duration of the state of national emergency. He warned that his agency will not hesitate to recommend the closure of any broadcast outfit that violates rules set out for media coverage during times when the national security is threatened.151 The search is illegal. Rule 126 of The Revised Rules on Criminal Procedure lays down the steps in the conduct of search and seizure. Section 4 requires that a search warrant be issued upon probable cause in connection with one specific offence to be determined personally by the judge after examination under oath or affirmation of

the complainant and the witnesses he may produce. Section 8 mandates that the search of a house, room, or any other premise be made in the presence of the lawful occupant thereof or any member of his family or in the absence of the latter, in the presence of two (2) witnesses of sufficient age and discretion residing in the same locality. And Section 9 states that the warrant must direct that it be served in the daytime, unless the property is on the person or in the place ordered to be searched, in which case a direction may be inserted that it be served at any time of the day or night. All these rules were violated by the CIDG operatives. Not only that, the search violated petitioners freedom of the press. The best gauge of a free and democratic society rests in the degree of freedom enjoyed by its media. In the Burgos v. Chief of Staff152 this Court held that -As heretofore stated, the premises searched were the business and printing offices of the "Metropolitan Mail" and the "We Forum" newspapers. As a consequence of the search and seizure, these premises were padlocked and sealed, with the further result that the printing and publication of said newspapers were discontinued. Such closure is in the nature of previous restraint or censorship abhorrent to the freedom of the press guaranteed under the fundamental law, and constitutes a virtual denial of petitioners' freedom to express themselves in print. This state of being is patently anathematic to a democratic framework where a free, alert and even militant press is essential for the political enlightenment and growth of the citizenry. While admittedly, the Daily Tribune was not padlocked and sealed like the "Metropolitan Mail" and "We Forum" newspapers in the above case, yet it cannot be denied that the CIDG operatives exceeded their enforcement duties. The search and seizure of materials for publication, the stationing of policemen in the vicinity of the The Daily Tribune offices, and the arrogant warning of government officials to media, are plain censorship. It is that officious functionary of the repressive government who tells the citizen that he may speak only if allowed to do so, and no more and no less than what he is permitted

to say on pain of punishment should he be so rash as to disobey.153 Undoubtedly, the The Daily Tribune was subjected to these arbitrary intrusions because of its anti-government sentiments. This Court cannot tolerate the blatant disregard of a constitutional right even if it involves the most defiant of our citizens. Freedom to comment on public affairs is essential to the vitality of a representative democracy. It is the duty of the courts to be watchful for the constitutional rights of the citizen, and against any stealthy encroachments thereon. The motto should always be obsta principiis.154 Incidentally, during the oral arguments, the Solicitor General admitted that the search of the Tribunes offices and the seizure of its materials for publication and other papers are illegal; and that the same are inadmissible "for any purpose," thus: JUSTICE CALLEJO: You made quite a mouthful of admission when you said that the policemen, when inspected the Tribune for the purpose of gathering evidence and you admitted that the policemen were able to get the clippings. Is that not in admission of the admissibility of these clippings that were taken from the Tribune? SOLICITOR GENERAL BENIPAYO: Under the law they would seem to be, if they were illegally seized, I think and I know, Your Honor, and these are inadmissible for any purpose.155 xxxxxxxxx SR. ASSO. JUSTICE PUNO: These have been published in the past issues of the Daily Tribune; all you have to do is to get those past issues. So why do you have to go there at 1 oclock in the morning and without any search warrant? Did they become suddenly part of the evidence of rebellion or inciting to sedition or what? SOLGEN BENIPAYO:

Well, it was the police that did that, Your Honor. Not upon my instructions. SR. ASSO. JUSTICE PUNO: Are you saying that the act of the policeman is illegal, it is not based on any law, and it is not based on Proclamation 1017. SOLGEN BENIPAYO: It is not based on Proclamation 1017, Your Honor, because there is nothing in 1017 which says that the police could go and inspect and gather clippings from Daily Tribune or any other newspaper. SR. ASSO. JUSTICE PUNO: Is it based on any law? SOLGEN BENIPAYO: As far as I know, no, Your Honor, from the facts, no. SR. ASSO. JUSTICE PUNO: So, it has no basis, no legal basis whatsoever? SOLGEN BENIPAYO: Maybe so, Your Honor. Maybe so, that is why I said, I dont know if it is premature to say this, we do not condone this. If the people who have been injured by this would want to sue them, they can sue and there are remedies for this.156 Likewise, the warrantless arrests and seizures executed by the police were, according to the Solicitor General, illegal and cannot be condoned, thus: CHIEF JUSTICE PANGANIBAN: There seems to be some confusions if not contradiction in your theory.

SOLICITOR GENERAL BENIPAYO: I dont know whether this will clarify. The acts, the supposed illegal or unlawful acts committed on the occasion of 1017, as I said, it cannot be condoned. You cannot blame the President for, as you said, a misapplication of the law. These are acts of the police officers, that is their responsibility.157 The Dissenting Opinion states that PP 1017 and G.O. No. 5 are constitutional in every aspect and "should result in no constitutional or statutory breaches if applied according to their letter." The Court has passed upon the constitutionality of these issuances. Its ratiocination has been exhaustively presented. At this point, suffice it to reiterate that PP 1017 is limited to the calling out by the President of the military to prevent or suppress lawless violence, invasion or rebellion. When in implementing its provisions, pursuant to G.O. No. 5, the military and the police committed acts which violate the citizens rights under the Constitution, this Court has to declare such acts unconstitutional and illegal. In this connection, Chief Justice Artemio V. Panganibans concurring opinion, attached hereto, is considered an integral part of this ponencia. SUMMATION In sum, the lifting of PP 1017 through the issuance of PP 1021 a supervening event would have normally rendered this case moot and academic. However, while PP 1017 was still operative, illegal acts were committed allegedly in pursuance thereof. Besides, there is no guarantee that PP 1017, or one similar to it, may not again be issued. Already, there have been media reports on April 30, 2006 that allegedly PP 1017 would be reimposed "if the May 1 rallies" become "unruly and violent." Consequently, the transcendental issues raised by the parties should not be "evaded;" they must now be resolved to prevent future constitutional aberration. The Court finds and so holds that PP 1017 is constitutional insofar as it constitutes a call by the President for the AFP to prevent or suppress lawless violence. The proclamation is sustained by

Section 18, Article VII of the Constitution and the relevant jurisprudence discussed earlier. However, PP 1017s extraneous provisions giving the President express or implied power (1) to issue decrees; (2) to direct the AFP to enforce obedience to all laws even those not related to lawless violence as well as decrees promulgated by the President; and (3) to impose standards on media or any form of prior restraint on the press, are ultra vires and unconstitutional. The Court also rules that under Section 17, Article XII of the Constitution, the President, in the absence of a legislation, cannot take over privately-owned public utility and private business affected with public interest. In the same vein, the Court finds G.O. No. 5 valid. It is an Order issued by the President acting as Commander-in-Chief addressed to subalterns in the AFP to carry out the provisions of PP 1017. Significantly, it also provides a valid standard that the military and the police should take only the "necessary and appropriate actions and measures to suppress and prevent acts of lawless violence."But the words "acts of terrorism" found in G.O. No. 5 have not been legally defined and made punishable by Congress and should thus be deemed deleted from the said G.O. While "terrorism" has been denounced generally in media, no law has been enacted to guide the military, and eventually the courts, to determine the limits of the AFPs authority in carrying out this portion of G.O. No. 5. On the basis of the relevant and uncontested facts narrated earlier, it is also pristine clear that (1) the warrantless arrest of petitioners Randolf S. David and Ronald Llamas; (2) the dispersal of the rallies and warrantless arrest of the KMU and NAFLU-KMU members; (3) the imposition of standards on media or any prior restraint on the press; and (4) the warrantless search of the Tribune offices and the whimsical seizures of some articles for publication and other materials, are not authorized by the Constitution, the law and jurisprudence. Not even by the valid provisions of PP 1017 and G.O. No. 5. Other than this declaration of invalidity, this Court cannot impose any civil, criminal or administrative sanctions on the individual police officers concerned. They have not been individually identified and given their day in court. The civil complaints or causes of action

and/or relevant criminal Informations have not been presented before this Court. Elementary due process bars this Court from making any specific pronouncement of civil, criminal or administrative liabilities. It is well to remember that military power is a means to an end and substantive civil rights are ends in themselves. How to give the military the power it needs to protect the Republic without unnecessarily trampling individual rights is one of the eternal balancing tasks of a democratic state.During emergency, governmental action may vary in breadth and intensity from normal times, yet they should not be arbitrary as to unduly restrain our peoples liberty. Perhaps, the vital lesson that we must learn from the theorists who studied the various competing political philosophies is that, it is possible to grant government the authority to cope with crises without surrendering the two vital principles of constitutionalism: the maintenance of legal limits to arbitrary power, and political responsibility of the government to the governed.158 WHEREFORE, the Petitions are partly granted. The Court rules that PP 1017 is CONSTITUTIONAL insofar as it constitutes a call by President Gloria Macapagal-Arroyo on the AFP to prevent or suppress lawless violence. However, the provisions of PP 1017 commanding the AFP to enforce laws not related to lawless violence, as well as decrees promulgated by the President, are declared UNCONSTITUTIONAL. In addition, the provision in PP 1017 declaring national emergency under Section 17, Article VII of the Constitution is CONSTITUTIONAL, but such declaration does not authorize the President to take over privately-owned public utility or business affected with public interest without prior legislation. G.O. No. 5 is CONSTITUTIONAL since it provides a standard by which the AFP and the PNP should implement PP 1017, i.e. whatever is "necessary and appropriate actions and measures to suppress and prevent acts of lawless violence." Considering that "acts of terrorism" have not yet been defined and made punishable by the Legislature, such portion of G.O. No. 5 is declared UNCONSTITUTIONAL.

The warrantless arrest of Randolf S. David and Ronald Llamas; the dispersal and warrantless arrest of the KMU and NAFLU-KMU members during their rallies, in the absence of proof that these petitioners were committing acts constituting lawless violence, invasion or rebellion and violating BP 880; the imposition of standards on media or any form of prior restraint on the press, as well as the warrantless search of the Tribune offices and whimsical seizure of its articles for publication and other materials, are declared UNCONSTITUTIONAL. No costs. SO ORDERED. ANGELINA SANDOVAL-GUTIERREZ Associate Justice WE CONCUR: ARTEMIO V. PANGANIBAN Chief Justice (On leave) REYNATO S. PUNO Associate Justice CONSUELO YNARES-SANTIAGO Associate Justice MA. ALICIA AUSTRIA-MARTINEZ Associate Justice CONCHITA CARPIO MORALES Associate Justice ADOLFO S. AZCUNA Associate Justice MINITA V. CHICO-NAZARIO Associate Justice PRESBITERO J. VELASCO, JR. Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.

LEONARDO A. QUIS Asscociate Jus ANTONIO T. CA Asscociate Jus RENATO C. COR Asscociate Jus ROMEO J. CALLE Asscociate Jus DANTE O. TIN Asscociate Jus CANCIO C. GA Asscociate Jus

G.R. No. 190293

March 20, 2012

PHILIP SIGFRID A. FORTUN and ALBERT LEE G. ANGELES, Petitioners, vs. GLORIA MACAPAGAL-ARROYO, as Commanderin-Chief and President of the Republic of the Philippines, EDUARDO ERMITA, Executive Secretary, ARMED FORCES OF THE PHILIPPINES (AFP), or any of their units, PHILIPPINE NATIONAL POLICE (PNP), or any of their units, JOHN DOES and JANE DOES acting under their direction and control, Respondents. x-----------------------x G.R. No. 190294 DIDAGEN P. DILANGALEN, Petitioner, vs. EDUARDO R. ERMITA in his capacity as Executive Secretary, NORBERTO GONZALES in his capacity as Secretary of National Defense, RONALDO PUNO in his capacity as Secretary of Interior and Local Government, Respondents. x-----------------------x G.R. No. 190301 NATIONAL UNION OF PEOPLES' LAWYERS (NUPL) SECRETARY GENERAL NERI JAVIER COLMENARES, BAYAN MUNA REPRESENTATIVE SATUR C. OCAMPO, GABRIELA WOMEN'S PARTY REPRESENTATIVE LIZA L. MAZA, ATTY. JULIUS GARCIA MATIBAG, ATTY. EPHRAIM B. CORTEZ, ATTY. JOBERT ILARDE PAHILGA, ATTY. VOLTAIRE B. AFRICA, BAGONG ALYANSANG MAKABAYAN (BAYAN) SECRETARY GENERAL RENATO M. REYES, JR. and ANTHONY IAN CRUZ, Petitioners, vs. PRESIDENT GLORIA MACAPAGAL-ARROYO, EXECUTIVE SECRETARY EDUARDO R. ERMITA, ARMED FORCES OF THE PHILIPPINES CHIEF OF STAFF GENERAL VICTOR S. IBRADO, PHILIPPINE NATIONAL POLICE DIRECTOR GENERAL JESUS A. VERZOSA, DEPARTMENT OF JUSTICE SECRETARY AGNES VST DEVANADERA, ARMED FORCES OF THE PHILIPPINES EASTERN MINDANAO COMMAND CHIEF LIEUTENANT GENERAL RAYMUNDO B. FERRER, Respondents.

x-----------------------x G.R. No. 190302 JOSEPH NELSON Q. LOYOLA, Petitioner, vs. HER EXCELLENCY PRESIDENT GLORIA MACAPAGAL-ARROYO, ARMED FORCES CHIEF OF STAFF GENERAL VICTOR IBRADO, PHILIPPINE NATIONAL POLICE (PNP), DIRECTOR GENERAL JESUS VERZOSA, EXECUTIVE SECRETARY EDUARDO ERMITA, Respondents. x-----------------------x G.R. No. 190307 JOVITO R. SALONGA, RAUL C. PANGALANGAN, H. HARRY L. ROQUE, JR., JOEL R. BUTUYAN, EMILIO CAPULONG, FLORIN T. HILBAY, ROMEL R. BAGARES, DEXTER DONNE B. DIZON, ALLAN JONES F. LARDIZABAL and GILBERT T. ANDRES, suing as taxpayers and as CONCERNED Filipino citizens, Petitioners, vs. GLORIA MACAPAGAL-ARROYO, in his (sic) capacity as President of the Republic of the Philippines, HON. EDUARDO ERMITA, JR., in his capacity as Executive Secretary, and HON. ROLANDO ANDAYA in his capacity as Secretary of the Department of Budget and Management, GENERAL VICTOR IBRADO, in his capacity as Armed Forces of the Philippines Chief of Staff, DIRECTOR JESUS VERZOSA, in his capacity as Chief of the Philippine National Police, Respondents. x-----------------------x G.R. No. 190356 BAILENG S. MANTAWIL, DENGCO SABAN, Engr. OCTOBER CHIO, AKBAYAN PARTY LIST REPRESENTATIVES WALDEN F. BELLO and ANA THERESIA HONTIVEROS-BARAQUEL, LORETTA ANN P. ROSALES, MARVIC M.V.F. LEONEN, THEODORE O. TE and IBARRA M. GUTIERREZ III, Petitioners, vs. THE EXECUTIVE SECRETARY, THE SECRETARY OF NATIONAL DEFENSE, THE SECRETARY OF JUSTICE, THE SECRETARY OF INTERIOR AND LOCAL GOVERNMENT, THE

SECRETARY OF BUDGET AND MANAGEMENT, and THE CHIEF OF STAFF OF THE ARMED FORCES OF THE PHILIPPINES, THE DIRECTOR GENERAL OF THE PHILIPPINE NATIONAL POLICE, Respondents. x-----------------------x G.R. No. 190380 CHRISTIAN MONSOD and CARLOS P. MEDINA, JR., Petitioners, vs. EDUARDO R. ERMITA, in his capacity as Executive Secretary, Respondent. DECISION ABAD, J.: These cases concern the constitutionality of a presidential proclamation of martial law and suspension of the privilege of habeas corpus in 2009 in a province in Mindanao which were withdrawn after just eight days. The Facts and the Case The essential background facts are not in dispute. On November 23, 2009 heavily armed men, believed led by the ruling Ampatuan family, gunned down and buried under shoveled dirt 57 innocent civilians on a highway in Maguindanao. In response to this carnage, on November 24 President Arroyo issued Presidential Proclamation 1946, declaring a state of emergency in Maguindanao, Sultan Kudarat, and Cotabato City to prevent and suppress similar lawless violence in Central Mindanao. Believing that she needed greater authority to put order in Maguindanao and secure it from large groups of persons that have taken up arms against the constituted authorities in the province, on December 4, 2009 President Arroyo issued Presidential Proclamation 1959 declaring martial law and suspending the privilege of the writ of habeas corpus in that province except for identified areas of the Moro Islamic Liberation Front.

Two days later or on December 6, 2009 President Arroyo submitted her report to Congress in accordance with Section 18, Article VII of the 1987 Constitution which required her, within 48 hours from the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus, to submit to that body a report in person or in writing of her action. In her report, President Arroyo said that she acted based on her finding that lawless men have taken up arms in Maguindanao and risen against the government. The President described the scope of the uprising, the nature, quantity, and quality of the rebels weaponry, the movement of their heavily armed units in strategic positions, the closure of the Maguindanao Provincial Capitol, Ampatuan Municipal Hall, Datu Unsay Municipal Hall, and 14 other municipal halls, and the use of armored vehicles, tanks, and patrol cars with unauthorized "PNP/Police" markings. On December 9, 2009 Congress, in joint session, convened pursuant to Section 18, Article VII of the 1987 Constitution to review the validity of the Presidents action. But, two days later or on December 12 before Congress could act, the President issued Presidential Proclamation 1963, lifting martial law and restoring the privilege of the writ of habeas corpus in Maguindanao. Petitioners Philip Sigfrid A. Fortun and the other petitioners in G.R. 190293, 190294, 190301,190302, 190307, 190356, and 190380 brought the present actions to challenge the constitutionality of President Arroyos Proclamation 1959 affecting Maguindanao. But, given the prompt lifting of that proclamation before Congress could review it and before any serious question affecting the rights and liberties of Maguindanaos inhabitants could arise, the Court deems any review of its constitutionality the equivalent of beating a dead horse. Prudence and respect for the co-equal departments of the government dictate that the Court should be cautious in entertaining actions that assail the constitutionality of the acts of the Executive or the Legislative department. The issue of constitutionality, said the Court in Biraogo v. Philippine Truth Commission of 2010,1 must be the very issue of the case, that the resolution of such issue is

unavoidable. The issue of the constitutionality of Proclamation 1959 is not unavoidable for two reasons: One. President Arroyo withdrew her proclamation of martial law and suspension of the privilege of the writ of habeas corpus before the joint houses of Congress could fulfill their automatic duty to review and validate or invalidate the same. The pertinent provisions of Section 18, Article VII of the 1987 Constitution state: Sec. 18. The President shall be the CommanderinChief 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 fortyeight hours from the proclamation of martial law or the suspension of the privilege of 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 twentyfour hours following such proclamation or suspension, convene in accordance with its rules without any need of a call. xxxx Although the above vests in the President the power to proclaim martial law or suspend the privilege of the writ of habeas corpus, he shares such power with the Congress. Thus: 1. The Presidents proclamation or suspension is temporary, good for

only 60 days; 2. He must, within 48 hours of the proclamation or suspension, report his action in person or in writing to Congress; 3. Both houses of Congress, if not in session must jointly convene within 24 hours of the proclamation or suspension for the purpose of reviewing its validity; and 4. The Congress, voting jointly, may revoke or affirm the Presidents proclamation or suspension, allow their limited effectivity to lapse, or extend the same if Congress deems warranted. It is evident that under the 1987 Constitution the President and the Congress act in tandem in exercising the power to proclaim martial law or suspend the privilege of the writ of habeas corpus. They exercise the power, not only sequentially, but in a sense jointly since, after the President has initiated the proclamation or the suspension, only the Congress can maintain the same based on its own evaluation of the situation on the ground, a power that the President does not have. Consequently, although the Constitution reserves to the Supreme Court the power to review the sufficiency of the factual basis of the proclamation or suspension in a proper suit, it is implicit that the Court must allow Congress to exercise its own review powers, which is automatic rather than initiated. Only when Congress defaults in its express duty to defend the Constitution through such review should the Supreme Court step in as its final rampart. The constitutional validity of the Presidents proclamation of martial law or suspension of the writ of habeas corpus is first a political question in the hands of Congress before it becomes a justiciable one in the hands of the Court. Here, President Arroyo withdrew Proclamation 1959 before the joint houses of Congress, which had in fact convened, could act on the same. Consequently, the petitions in these cases have become moot and the Court has nothing to review. The lifting of martial law and restoration of the privilege of the writ of habeas corpus in Maguindanao was a supervening event that obliterated any justiciable controversy.2

Two. Since President Arroyo withdrew her proclamation of martial law and suspension of the privilege of the writ of habeas corpus in just eight days, they have not been meaningfully implemented. The military did not take over the operation and control of local government units in Maguindanao. The President did not issue any law or decree affecting Maguindanao that should ordinarily be enacted by Congress. No indiscriminate mass arrest had been reported. Those who were arrested during the period were either released or promptly charged in court. Indeed, no petition for habeas corpus had been filed with the Court respecting arrests made in those eight days. The point is that the President intended by her action to address an uprising in a relatively small and sparsely populated province. In her judgment, the rebellion was localized and swiftly disintegrated in the face of a determined and amply armed government presence. In Lansang v. Garcia,3 the Court received evidence in executive session to determine if President Marcos suspension of the privilege of the writ of habeas corpus in 1971 had sufficient factual basis. In Aquino, Jr. v. Enrile,4 while the Court took judicial notice of the factual bases for President Marcos proclamation of martial law in 1972, it still held hearings on the petitions for habeas corpus to determine the constitutionality of the arrest and detention of the petitioners. Here, however, the Court has not bothered to examine the evidence upon which President Arroyo acted in issuing Proclamation 1959, precisely because it felt no need to, the proclamation having been withdrawn within a few days of its issuance. Justice Antonio T. Carpio points out in his dissenting opinion the finding of the Regional Trial Court (RTC) of Quezon City that no probable cause exist that the accused before it committed rebellion in Maguindanao since the prosecution failed to establish the elements of the crime. But the Court cannot use such finding as basis for striking down the Presidents proclamation and suspension. For, firstly, the Court did not delegate and could not delegate to the RTC of Quezon City its power to determine the factual basis for the presidential proclamation and suspension. Secondly, there is no showing that the RTC of Quezon City passed upon the same evidence that the President, as Commander-in-Chief of the Armed Forces, had in her possession when she issued the proclamation and

suspension. The Court does not resolve purely academic questions to satisfy scholarly interest, however intellectually challenging these are.5 This is especially true, said the Court in Philippine Association of Colleges and Universities v. Secretary of Education,6 where the issues "reach constitutional dimensions, for then there comes into play regard for the courts duty to avoid decision of constitutional issues unless avoidance becomes evasion." The Courts duty is to steer clear of declaring unconstitutional the acts of the Executive or the Legislative department, given the assumption that it carefully studied those acts and found them consistent with the fundamental law before taking them. "To doubt is to sustain."7 Notably, under Section 18, Article VII of the 1987 Constitution, the Court has only 30 days from the filing of an appropriate proceeding to review the sufficiency of the factual basis of the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus. Thus The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual basis of the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus or the extension thereof, and must promulgate its decision thereon within thirty days from its filing. (Emphasis supplied) More than two years have passed since petitioners filed the present actions to annul Proclamation 1959. When the Court did not decide it then, it actually opted for a default as was its duty, the question having become moot and academic.
1wphi1

Justice Carpio of course points out that should the Court regard the powers of the President and Congress respecting the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus as sequential or joint, it would be impossible for the Court to exercise its power of review within the 30 days given it. But those 30 days, fixed by the Constitution, should be enough for the Court to fulfill its duty without pre-empting congressional action. Section 18, Article VII, requires the President to report his actions to Congress, in person or in writing, within 48 hours of such

proclamation or suspension. In turn, the Congress is required to convene without need of a call within 24 hours following the Presidents proclamation or suspension. Clearly, the Constitution calls for quick action on the part of the Congress. Whatever form that action takes, therefore, should give the Court sufficient time to fulfill its own mandate to review the factual basis of the proclamation or suspension within 30 days of its issuance. If the Congress procrastinates or altogether fails to fulfill its duty respecting the proclamation or suspension within the short time expected of it, then the Court can step in, hear the petitions challenging the Presidents action, and ascertain if it has a factual basis. If the Court finds none, then it can annul the proclamation or the suspension. But what if the 30 days given it by the Constitution proves inadequate? Justice Carpio himself offers the answer in his dissent: that 30-day period does not operate to divest this Court of its jurisdiction over the case. The settled rule is that jurisdiction once acquired is not lost until the case has been terminated. The problem in this case is that the President aborted the proclamation of martial law and the suspension of the privilege of the writ of habeas corpus in Maguindanao in just eight days. In a real sense, the proclamation and the suspension never took off. The Congress itself adjourned without touching the matter, it having become moot and academic. Of course, the Court has in exceptional cases passed upon issues that ordinarily would have been regarded as moot. But the present cases do not present sufficient basis for the exercise of the power of judicial review. The proclamation of martial law and the suspension of the privilege of the writ of habeas corpus in this case, unlike similar Presidential acts in the late 60s and early 70s, appear more like saber-rattling than an actual deployment and arbitrary use of political power. WHEREFORE, the Court DISMISSES the consolidated petitions on the ground that the same have become moot and academic. SO ORDERED. ROBERTO A. ABAD Associate Justice

WE CONCUR: RENATO C. CORONA Chief Justice

ANTONIO T. CARPIO PRESBITERO J. VELA Associate Justice Associate Justic TERESITA J. LEONARDO-DE CASTRO ARTURO D. BRI Associate Justice Associate Justic DIOSDADO M. PERALTA LUCAS P. BERSA Associate Justice Associate Justic MARIANO C. DEL CASTILLO MARTIN S. VILLARA Associate Justice Associate Justic JOSE PORTUGAL PEREZ JOSE CATRAL MEN Associate Justice Associate Justic MARIA LOURDES P. A. SERENO BIENVENIDO L. RE Associate Justice Associate Justic ESTELA M. PERLAS-BERNABE Associate Justice
CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court. RENATO C. CORONA Chief Justice Footnotes
1

G.R. Nos. 192935 & 193036, December 7, 2010, 637 SCRA 78, 147-148.
2

See Funa v. Ermita, G.R. No. 184740, February 11, 2010, 612 SCRA 308, 319.
3

149 Phil. 547 (1971). 158-A Phil. 1 (1974). Sec. Guingona, Jr. v. Court of Appeals, 354 Phil. 415, 426 (1998).

97 Phil. 806, 811 (1955), citing Rice v. Sioux City, U.S. Sup. Ct. Adv. Rep., May 23, 1955, Law Ed., Vol. 99, p. 511.
7

Board of Optometry v. Colet, 328 Phil. 1187, 1207 (1996), citing Drilon v. Lim, G.R. No. 112497, August 4, 1994, 235 SCRA 135, 140.
The Lawphil Project - Arellano Law Foundation

DISSENTING OPINION CARPIO, J.: I dissent. The Cases These are consolidated petitions for the writs of certiorari and prohibition challenging the constitutionality of Presidential Proclamation No. 1959, which declared a state of martial law and suspended the privilege of the writ of habeas corpus in the Province of Maguindanao, except for identified areas of the Moro Islamic Liberation Front. The Antecedents In the morning of 23 November 2009, fifty-seven (57) innocent civilians met their tragic and untimely death in a gruesome massacre unequaled in recent history,1 considered to be the Philippines worst case of election-related violence. Brutally killed were female family members of then Buluan Vice Mayor Esmael "Toto" Mangudadatu (Mangudadatu), including his wife and sisters, and members of the press who were part of a convoy on the way to Shariff Aguak in Maguindanao. Mangudadatus wife was bringing with her Mangudadatus certificate of candidacy for Governor of Maguindanao for filing with the Provincial Office of the Commission on Elections in Shariff Aguak. Five of the victims were not part of the convoy but happened to be traveling on the same highway.2

In its Consolidated Comment dated 14 December 2009, the Office of the Solicitor General (OSG), representing public respondents, narrated the harrowing events which unfolded on that fateful day of 23 November 2009, to wit: xxxx 3. Vice Mayor Mangudadatu confirmed having received reports that his political rivals (Ampatuans) were planning to kill him upon his filing of a certificate of candidacy (COC) for the gubernatorial seat in Maguindanao. Believing that the presence of women and media personalities would deter any violent assault, he asked his wife and female relatives to file his COC and invited several media reporters to cover the event. 4. At around 10 a.m., the convoy stopped at a designated PNP checkpoint along the highway of Ampatuan, Maguindanao manned by the Maguindanao 1508th Provincial Mobile Group, particularly, Eshmail Canapia and Takpan Dilon. While at a stop, they were approached by about one hundred (100) armed men. The armed men pointed their weapons at the members of the 1508th Provincial Mobile Group manning the check point, and threatened them to refrain from interfering. The members of the convoy were then ordered to alight from their vehicles and to lie face down on the ground, as the armed men forcibly took their personal belongings. Subsequently, all members of the convoy were ordered to board their vehicles. They were eventually brought by the armed men to the hills in Barangay Masalay, Ampatuan, about 2.5 kilometers from the checkpoint. 5. At about the same time, Vice Mayor Mangudadatu received a call from his wife Genelyn who, in a trembling voice, told him that a group of more or less 100 armed men stopped their convoy, and that Datu Unsay Mayor Andal Ampatuan, Jr. was walking towards her, and was about to slap her face. After those last words were uttered, the phone line went dead and her cellphone could not be contacted any longer. Alarmed that his wife and relatives, as well as the media personalities were in grave danger, Vice Mayor Mangudadatu immediately reported the incident to the Armed Forces of the Philippines.

6. In the afternoon of the same day, soldiers aboard two army trucks led by Lt. Col. Rolando Nerona, Head of the Philippine Armys 64th Infantry Battalion went to the town of Ampatuan to confirm the report. At around 3 p.m., they passed by the checkpoint along the highway in Ampatuan manned by the 1508th Provincial Mobile Group and asked whether they were aware of the reported abduction. Members of the 1508th Provincial Mobile Group denied having knowledge of what they have witnessed at around 10 in the morning purportedly out of fear of retaliation from the powerful Ampatuan clan. Nevertheless, P/CI Sukarno Adil Dicay, the head of the Mobile Group, instructed P/INSP Diongon to accompany the military on foot patrol as they conduct their operation relative to the reported abduction. 7. Upon reaching Barangay Masalay, Ampatuan, the soldiers on foot patrol found dead bodies, bloodied and scattered on the ground and inside the four (4) vehicles used by the convoy. Three (3) newly covered graves and a back hoe belonging to the Maguindanao Provincial Government parked nearby with its engine still running were found at the site. When the graves were dug up by the soldiers, twenty four (24) dead bodies were found in the first grave; six (6) dead bodies with three (3) vehicles, particularly a Toyota Vios with the seal of the Tacurong City Government, a Tamaraw FX and an L300 owned by the media outfit UNTV were found in the second grave; and five (5) more dead bodies were recovered from the third grave, yielding 35 buried dead bodies and, together with other cadavers, resulted in a total of fifty seven (57) fatalities. 8. x x x 9. Examination of the bodies revealed that most, if not all, of the female victims pants were found unzipped, and their sexual organs mutilated and mangled. Five (5) of them were tested positive for traces of semen, indicative of sexual abuse while some of the victims were shot in the genital area. The genitalia of Genelyn Mangudadatu was lacerated four (4) times, and blown off by a gun fire, and her body horrifyingly mutilated. Two of the women killed were pregnant, while another two were lawyers. Twenty-nine (29) of the casualties were media personnel. Almost all gun shot injuries were on the heads of the victims, rendering them unrecognizable albeit two (2) bodies remain unidentified. Those found in the graves were coarsely lumped

like trash, and some of the victims were found hogtied. All the dead bodies bear marks of despicable torture, contempt and outrageous torment.3 A day after the carnage, on 24 November 2009, former President Gloria Macapagal-Arroyo (President Arroyo) issued Proclamation No. 1946, declaring a state of emergency in the provinces of Maguindanao and Sultan Kudarat, and in the City of Cotabato, "to prevent and suppress the occurrence of similar other incidents of lawless violence in Central Mindanao." The full text of Proclamation No. 1946 reads: DECLARING A STATE OF EMERGENCY IN CENTRAL MINDANAO WHEREAS, on November 23, 2009, several persons, including women and members of media were killed in a violent incident which took place in Central Mindanao; WHEREAS, there is an urgent need to prevent and suppress the occurrence of similar other incidents of lawless violence in Central Mindanao; NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and by law, do hereby proclaim, as follows: SECTION 1. The Provinces of Maguindanao and Sultan Kudarat and the City of Cotabato are hereby placed under a state of emergency for the purpose of preventing and suppressing lawless violence in the aforesaid jurisdiction. SECTION 2. The Armed Forces of the Philippines (AFP) and the Philippine National Police (PNP) are hereby ordered to undertake such measures as may be allowed by the Constitution and by law to prevent and suppress all incidents of lawless violence in the said jurisdiction. SECTION 3. The state of emergency covering the Provinces of Maguindanao and Sultan Kudarat and the City of Cotabato shall remain in force and effect until lifted or withdrawn by the President.4

On 4 December 2009, President Arroyo issued Proclamation No. 1959, declaring martial law and suspending the privilege of the writ of habeas corpus (writ) in the Province of Maguindanao, except for the identified areas of the Moro Islamic Liberation Front (MILF). The full text of Proclamation No. 1959, signed by President Arroyo and attested by Executive Secretary Eduardo Ermita, reads: PROCLAMATION NO. 1959 PROCLAIMING A STATE OF MARTIAL LAW AND SUSPENDING THE PRIVILEGE OF THE WRIT OF HABEAS CORPUS IN THE PROVINCE OF MAGUINDANAO, EXCEPT FOR CERTAIN AREAS WHEREAS, Proclamation No. 1946 was issued on 24 November 2009 declaring a state of emergency in the provinces of Maguindanao, Sultan Kudarat and the City of Cotabato for the purpose of preventing and suppressing lawless violence in the aforesaid areas; WHEREAS, Section 18, Art.VII of the Constitution provides that "x x x In case of invasion or rebellion, when the public safety requires it, (the President) 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. x x x" WHEREAS, R.A. No. 69865 provides that the crime of rebellion or insurrection is committed by rising publicly and taking arms against the Government for the purpose of x x x depriving the Chief Executive or the Legislature, wholly or partially, of any of their powers or prerogatives." WHEREAS, heavily armed groups in the province of Maguindanao have established positions to resist government troops, thereby depriving the Executive of its powers and prerogatives to enforce the laws of the land and to maintain public order and safety; WHEREAS, the condition of peace and order in the province of Maguindanao has deteriorated to the extent that the local judicial system and other government mechanisms in the province are not functioning, thus endangering public safety;

WHEREAS, the Implementing Operational Guidelines of the GRPMILF Agreement on the General Cessation of Hostilities dated 14 November 1997 provides that the following is considered a prohibited hostile act: "x x x establishment of checkpoints except those necessary for the GRPs enforcement and maintenance of peace and order; and, for the defense and security of the MILF in their identified areas, as jointly determined by the GRP and MILF. x x x" NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and by law, do hereby proclaim, as follows: SECTION 1. There is hereby declared a state of martial law in the province of Maguindanao, except for the identified areas of the Moro Islamic Liberation Front as referred to in the Implementing Operational Guidelines of the GRP-MILF Agreement on the General Cessation of Hostilities. SECTION 2. The privilege of the writ of habeas corpus shall likewise be suspended in the aforesaid area for the duration of the state of martial law.6 On 6 December 2009, President Arroyo submitted her Report to Congress in accordance with the provision in Section 18, Article VII of the 1987 Constitution, which states that "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." In her Report, President Arroyo presented the following justifications for imposing martial law and suspending the writ in Maguindanao, to wit: Pursuant to the provision of Section 18, Article VII of the 1987 Constitution, the President of the Republic of the Philippines is submitting the hereunder Report relative to Proclamation No. 1959 "Proclaiming a State of Martial Law and Suspending the Privilege of the Writ of Habeas Corpus in the Province of Maguindanao, except for Certain Areas," which she issued on 04 December 2009, as required by public safety, after finding that lawless elements have taken up arms and committed public uprising against the duly constituted government and against the people of Maguindanao,

for the purpose of removing from the allegiance to the Government or its laws, the Province of Maguindanao, and likewise depriving the Chief Executive of her powers and prerogatives to enforce the laws of the land and to maintain public order and safety, to the great damage, prejudice and detriment of the people in Maguindanao and the nation as a whole. xxx The capture of identified leader Mayor Andal Ampatuan, Jr. would have resulted in the expeditious apprehension and prosecution of all others involved in the gruesome massacre, but the situation proved the contrary. The Ampatuan group backed by formidable group of armed followers, have since used their strength and political position to deprive the Chief Executive of her power to enforce the law and to maintain public order and safety. More importantly, a separatist group based in Maguindanao has joined forces with the Ampatuans for this purpose. These are the facts: 1. Local government offices in the province of Maguindanao were closed and ranking local government officials refused to discharge their functions, which hindered the investigation and prosecution team from performing their tasks; 2. The Local Civil Registrar of Maguindanao refused to accept the registration of the death certificates of the victims purportedly upon the orders of Andal Ampatuan Sr.; 3. The local judicial system has been crippled by the absence or nonappearance of judges of local courts, thereby depriving the government of legal remedies in their prosecutorial responsibilities (i.e. issuance of warrants of searches, seizure and arrest). While the Supreme Court has designated an Acting Presiding Judge from another province, the normal judicial proceedings could not be carried out in view of threats to their lives or safety, prompting government to seek a change of venue of the criminal cases after informations have been filed. Duly verified information disclosed that the Ampatuan group is behind the closing down of government offices, the refusal of local officials to

discharge their functions and the simultaneous absence or nonappearance of judges in local courts. Detailed accounts pertaining to the rebel armed groups and their active movements in Maguindanao have been confirmed: I. As of November 29, 2009, it is estimated that there are about 2,413 armed combatants coming from the municipalities of Shariff Aguak, Datu Unsay, Datu Salibo, Mamasapano, Datu Saudi Ampatuan (Dikalungan), Sultan Sa Barungis, Datu Piang, Guindulungan, and Talayan, who are in possession of around 2,000 firearms/armaments. II. The Ampatuan group has consolidated a group of rebels consisting of 2,413 heavily armed men, with 1,160 of them having been strategically deployed in Maguindanao. Validated information on the deployment of rebels are as follows: I. Around five hundred (500) armed rebels with 2 "Sanguko" armored vehicles are in offensive position in the vicinity of Kakal, Ampatuan, Dimampao, Mamasapano and Sampao Ampatuan. II. A group with more or less 200 armed rebels has moved from Old Maganoy into an offensive position. III. More or less 80 fully armed rebels remain in Tuka, Mamasapano. IV. More or less 50 fully armed rebels led by a former MNLF Commander are in offensive position in Barangay Baital, Rajah Buayan. V. More or less 70 fully armed rebels with two (2) M60 LMG remain in offensive position in the vicinity of Barangay Kagwaran, Barangay Iginampong, Datu Unsay (right side of Salvo-General Santos City national highway). VI. More or less 60 fully armed rebels with four (4) M60 LMG remain in offensive position in the vicinity of Kinugitan, the upper portion of Barangay Maitumaig, Datu Unsay. VII. Kagui Akmad Ampatuan was sighted in Sultan Sa Barongis with 400 armed rebels. Locals heard him uttered "PATAYAN NA KUNG

PATAYAN." VIII. More or less 100 armed rebels led by one of the identified leaders in the massacre have been sighted at the quarry of Barangay Lagpan, boundary of Rajah Buayan and Sultan Sa Barongis. The group is armed with one (1) 90RR, one (1) cal 50 LMG, two (2) cal 30 LMG, two (2) 60 mm mortar and assorted rifles. The strength of the rebels is itself estimated to be around 800 with about 2,000 firearms (Fas). These forces are concentrated in the following areas in Maguindanao which are apparently also their political stronghold: xxx The existence of this armed rebellion is further highlighted by the recent recovery of high powered firearms and ammunitions from the 400 security escorts of Datu Andal Ampatuan Sr. xxx Indeed, the nature, quantity and quality of their weaponry, the movement of heavily armed rebels in strategic positions, the closure of the Maguindanao Provincial Capitol, Ampatuan Municipal Hall, Datu Unsay Municipal Hall, and fourteen other municipal halls, and the use of armored vehicles, tanks and patrol cars with unauthorized "PNP/Police" markings, all together confirm the existence of armed public uprising for the political purpose of: 1. removing allegiance from the national government of the Province of Maguindanao; and, 2. depriving the Chief Executive of her powers and prerogatives to enforce the laws of the land and to maintain public order and safety. While the government is at present conducting legitimate operations to address the on-going rebellion, public safety still requires the continued implementation of martial law and the suspension of the privilege of the writ of habeas corpus in the

Province of Maguindanao until the time that such rebellion is completely quelled.7 (Emphasis supplied) In the meantime, the present petitions were filed impugning the constitutionality of Proclamation No. 1959. 1. G.R. No. 190293 is a petition "for the issuance of a temporary restraining order and writs of prohibition and preliminary prohibitory injunction (1) to declare Proclamation No. 1959 or any act, directive or order arising from or connected to it as unconstitutional, and (2) to enjoin public respondents from further enforcing the same." 2. G.R. No. 190294 is a petition for certiorari assailing the constitutionality of Proclamation No. 1959 "for gross insufficiency of the factual basis in proclaiming a state of martial law and suspending the [writ] in the Province of Maguindanao." It prayed for the issuance of a writ of prohibition under Section 2 of Rule 65 to enjoin and prohibit respondents from enforcing Proclamation No. 1959. 3. G.R. No. 190301 is a petition seeking "the nullification of Proclamation No. 1959, proclaiming a state of martial law and suspending the [writ] in the province of Maguindanao, except for certain areas, as it is patently illegal and unconstitutional for lack of any factual basis." 4. G.R. No. 190302 is a petition for certiorari to declare Proclamation No. 1959 as null and void for being unconstitutional, and for prohibition to enjoin respondents from further actions or proceedings in enforcing or implementing Proclamation No. 1959. 5. G.R. No. 190307 is a petition for certiorari, prohibition, and mandamus with a prayer for a preliminary prohibitory injunction and/or a temporary restraining order, and/or a petition for review pursuant to Article VII, Section 18, paragraph 3 of the 1987 Constitution, asking the Court to declare that then Executive Secretary Eduardo Ermita committed grave abuse of discretion amounting to lack or excess of jurisdiction when he signed, in the name of President Arroyo, Proclamation No. 1959. The petition also prayed for the issuance of a Temporary Restraining Order and/or preliminary prohibitory injunction, prohibiting respondents, and anyone acting under their authority, stead, or behalf, from

implementing Proclamation No. 1959 during the pendency of the case. 6. G.R. No. 190356 is a petition for prohibition, with an application for the issuance of a temporary restraining order and/or a writ of preliminary injunction, assailing the constitutionality and the sufficiency of the factual basis of Proclamation No. 1959, declaring a state of martial law in the province of Maguindanao (except for identified areas of the MILF) and suspending the writ in the same area. 7. G.R. No. 190380 is a petition for certiorari assailing the validity of Proclamation No. 1959, declaring a state of martial law in the province of Maguindanao, except for the identified areas of the MILF, and suspending the writ in the same area. On 9 December 2009, Congress convened in joint session pursuant to Section 18, Article VII of the 1987 Constitution, which provides, "The Congress, if not in session, shall, within twenty-four hours following such proclamation [of martial law] or suspension [of the writ], convene in accordance with its rules without need of a call." Meanwhile, eight days after the declaration of martial law, on 12 December 2009, President Arroyo issued Proclamation No. 1963 lifting martial law and restoring the writ in Maguindanao. The full text of Proclamation No. 1963, signed by President Arroyo and attested by Executive Secretary Eduardo Ermita, reads: PROCLAMATION NO. 1963 PROCLAIMING THE TERMINATION OF THE STATE OF MARTIAL LAW AND THE RESTORATION OF THE PRIVILEGE OF THE WRIT OF HABEAS CORPUS IN THE PROVINCE OF MAGUINDANAO WHEREAS, Proclamation No. 1946 was issued on 24 November 2009 declaring a state of emergency in the provinces of Maguindanao, Sultan Kudarat and the City of Cotabato for the purpose of preventing and suppressing lawless violence in the aforesaid areas; WHEREAS, by virtue of the powers granted under Section 18, Article

VII of the Constitution, the President of the Philippines promulgated Proclamation No. 1959 on December 4, 2009, proclaiming a state of martial law and suspending the privilege of the writ of Habeas Corpus in the province of Maguindanao, except for certain areas; WHEREAS, the Armed Forces of the Philippines and the Philippine National Police have reported that over six hundred (600) persons who allegedly rose publicly and took up arms against the Government have surrendered or have been arrested or detained; WHEREAS, the Armed Forces of the Philippines and the Philippine National Police have reported that the areas where heavily armed groups in the province of Maguindanao established positions to resist government troops have been cleared; WHEREAS, the court and prosecutors offices of Cotabato City have resumed normal working hours, paving the way for the criminal justice system in Maguindanao to be restored to normalcy; WHEREAS, the Vice-Governor of the Autonomous Region of Muslim Mindanao has assumed as Acting Governor, paving the way for the restoration of the functioning of government mechanisms in the province of Maguindanao; NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the Philippines, by virtue of the powers vested in me by the Constitution and by law, do hereby revoke Proclamation No. 1959 and proclaim the termination of the state of martial law and the restoration of the privilege of the writ of habeas corpus in the province of Maguindanao; provided that Proclamation No. 1946 shall continue to be in force and effect.8 In the Resolutions dated 8 and 15 December 2009,9 the Court consolidated the petitions and required the Office of the Solicitor General and the respondents to comment on the petitions. In a Resolution dated 12 January 2010, the Court resolved "to appoint as amici curiae Justice Vicente Mendoza, Senator Joker Arroyo, and Father Joaquin Bernas, [S.J.] and request them to submit their respective Amicus Brief on the questions to be addressed by the parties."10

Meanwhile, on 9 December 2009, an Information for rebellion was filed before the Regional Trial Court, Branch 15, Cotabato City (RTCCotabato), against Ampatuan, et al.11 The information reads: That on or about 27th day of November, 2009, and continuously thereafter, until the present time, in Maguindanao Province and within the jurisdiction of this Honorable Court, accused Datu Andal Ampatuan, Sr., Datu Zaldy Uy Ampatuan, Datu Akmad Tato Ampatuan, Datu Anwar Ampatuan and Datu Sajid Islam Uy Ampatuan as heads of the rebellion, conspiring, confederating and cooperating with each other, as well as with the other accused as participants or executing the commands of others in the rebellion and also with other John Does whose whereabouts and identities are still unknown, the said accused, who are heads of the rebellion, did then and there willfully, unlawfully and feloniously help, support, promote, maintain, cause, direct and/or command their co-accused who are their followers to rise publicly and take arms against the Republic of the Philippines, or otherwise participate in such armed public uprising, for the purpose of removing allegiance to the government or its laws, the territory of the Republic of the Philippines or any part thereof or depriving the Chief Executive of any of her powers or prerogatives as in fact they have been massing up armed men and organizing assemblies, as a necessary means to commit the crime of rebellion, and in furtherance thereof, have then and there committed acts preventing public prosecutors from being available to conduct inquest and preliminary investigations. There were massive formations of numerous armed civilians supported by armored vehicles and under the command of the Ampatuans who have formed a private army to resist government troops; that the local provincial government of Maguindanao could not function with their employees going on mass leave and their respective offices were closed and not functioning. The Regional Trial Courts of the area are not functioning, refused to accept the application for search warrants for violation of PD 1866 to authorize the search of the properties of the heads of the rebellion; and that there was undue delay in the issuance of court processes despite the exigency of the situation. CONTRARY TO LAW.12 On the next day, 10 December 2009, accused Ampatuan, et al. filed

an Urgent Omnibus Motion, which included a motion for judicial determination of probable cause for the offense charged. On the same day, the Acting Presiding Judge of RTC-Cotabato issued an Order, stating that "the Court needs time to go over the resolution finding probable cause against the accused Datu Andal Ampatuan, Sr., [et al.]." On 1 February 2010, the Regional Trial Court of Quezon City received the records of the case, pursuant to the Supreme Courts En Banc Resolution, dated 12 January 2010, which ordered the transfer of venue of the rebellion case to Quezon City. The case, docketed as Criminal Case No. Q-10-162667 and entitled People of the Philippines v. Datu Andal Ampatuan, Sr., et al., was raffled to Branch 77 of the Regional Trial Court of Quezon City (RTC-Quezon City) on 2 February 2010. On 3 February 2010, the accused filed an Urgent Motion praying for the issuance of an order suspending the transfer of custody of all the accused pending the resolution of their motion for judicial determination of probable cause. On 26 March 2010, the RTC-Quezon City dismissed the charge of rebellion for lack of probable cause, to wit: After a careful and judicious scrutiny of the evidence forming part of the records and those adduced by the prosecution during the hearing on the motion for judicial determination of probable cause, the Court is convinced that there exist[s] no probable cause to hold under detention and to indict the accused for rebellion. xxxx Rebellion under Article 134 of the Revised Penal Code is committed [B]y rising publicly and taking arms against the Government for the purpose of removing from the allegiance to said Government or its laws, the territory of the Republic of the Philippines or any part thereof, or any body of land, naval, or other armed forces or depriving the Chief Executive or the Legislature, wholly or partially, of any of their powers or prerogatives.

The elements of the offense are: 1. That there be a (a) public uprising and (b) taking arms against the Government; and 2. That the purpose of the uprising or movement is either (a) to remove from the allegiance to said Government or its laws: (1) the territory of the Philippines or any part thereof; or (2) any body of land, naval, or other armed forces; or (b) to deprive the Chief Executive or Congress, wholly or partially, of any of their powers and prerogatives. xxxx The essential element of public armed uprising against the government is lacking. There were no masses or multitudes involving crowd action done in furtherance of a political end. So, even assuming that there was uprising, there is no showing that the purpose of the uprising is political, that is, to overthrow the duly constituted government in order to establish another form of government. In other words, the second element is also absent. xxxx x x x It is quite interesting that the prosecution failed to present any particular instance where the accused had directly or indirectly prevented government prosecutors from performing their job relative to the prosecution of the suspects in the infamous Maguindanao massacre. On the contrary, documentary evidence on record shows that the alleged principal suspect in the mass killings, Datu Andal Ampatuan, Jr., was made to undergo inquest proceedings at General Santos City, immediately after he was taken into custody by law enforcement authorities. This alone belies the prosecutions theory that the prosecutors were not available to conduct inquest and preliminary investigations relative to the mass killings in the Municipality of

Ampatuan, Province of Maguindanao. xxxx x x x [T]he intelligence reports presented by the military and police are unfounded. The reports do not suggest that the alleged armed groups loyal to the accused are initiating violent and hostile actions, whether directly or indirectly, against government security forces. Even the discovery and confiscation of large cache of firearm and ammunitions, allegedly belonging to the Ampatuans, cannot be considered as an act of rebellion. In fact, the firearms and ammunitions were subsequently unearthed, recovered and confiscated from different places. The government security forces should have been able to engage and neutralize the reported armed groups on the basis of its intelligence reports confirming their size, strength and whereabouts. xxxx The statements of prosecution witnesses Mangacop and Dingcong are general allegations. Their statements do not show that the accused were responsible for the mass leave of officials and employees of the local government units. There is no evidence to show that the accused actually prevented the local officials and employees from reporting to their offices. The evidence will show that the Department of Interior and Local Government and the Philippine National Police closed down these offices, without any justifiable reasons. In fact, there were news footages which showed that many employees were caught by surprise on the unexpected closure of their offices. xxxx It is alleged in the Information that the courts were no longer functioning in Cotabato City and in Maguindanao province, which have jurisdiction over the place of the commission of the massacre. The factual circumstances, however, belie said allegation. This Court takes judicial notice of the fact that no less than the Supreme Court of the Republic of the Philippines had denied the allegation that civilian courts were or are no longer functioning in Maguindanao.

xxxx WHEREFORE, premises considered, the Court finds that there exists no probable cause to indict and hold under detention the accused for rebellion. Accordingly, the instant case is hereby dismissed and the accused-movants are hereby ordered released from further detention, unless they are held by a court of law for other lawful cause/s. Let this Order be served personally upon the accused-movants, through the responsible officers of the law having custody over them, who are hereby directed to release the accused from detention immediately upon receipt hereof. SO ORDERED.13 In an Order dated 28 May 2010, the RTC-Quezon City denied the prosecutions motion for reconsideration of the Order dated 26 March 2010. The DOJ filed a petition for certiorari14 before the Court of Appeals assailing the dismissal of the rebellion charges against accused Ampatuan, et al. In a Decision promulgated on 15 December 2011,15 the Court of Appeals denied the petition for certiorari. Quoting the findings of the RTC-Quezon City, the Court of Appeals held that there is no probable cause as there is no showing that all the elements of the crime of rebellion are present. The Court of Appeals stated that "a review of its own narration of events only lends to the belief that the rebellion existed only in the minds of the complainants." The Court of Appeals ruled that there was no armed public uprising, finding "no proof that armed groups were massing up and were planning to instigate civil disobedience and to challenge the government authorities for political ends." The Issues The crux of the present controversy is the constitutionality of Proclamation No. 1959, declaring martial law and suspending the writ in Maguindanao. The threshold issue before this Court is whether there is sufficient factual basis for the issuance of Proclamation No.

1959 based on the stringent requirements set forth in Section 18, Article VII of the 1987 Constitution. In its 15 December 2009 Resolution, the Court additionally posed the following questions for resolution: 1. Whether the issuance of Proclamation No. 1963, lifting martial law and restoring the writ in Maguindanao, rendered the issues raised in the present petitions moot and academic; 2. Whether the term "rebellion" in Section 18, Article VII of the 1987 Constitution has the same meaning as the term "rebellion" that is defined in Article 134 of the Revised Penal Code; 3. Whether the declaration of martial law or the suspension of the writ authorizes warrantless arrests, searches and seizures; 4. Whether the declaration of martial law or the suspension of the writ is a joint and sequential function of the President and Congress such that, without Congressional action on the proclamation either affirming or revoking it, the President having in the meantime lifted the declaration and restored the writ, this Court has nothing to review; 5. If the constitutional power of this Court to review the factual basis of the declaration of martial law or suspension of the writ can be exercised simultaneously with the constitutional power of Congress to revoke the declaration or suspension, and the decision of this Court conflicts with the decision of Congress, which decision shall prevail; and 6. Whether this Courts determination of the sufficiency of the factual basis of the declaration of martial law or suspension of the writ, which in the meantime has been lifted and restored, respectively, would be essential to the resolution of issues concerning the validity of related acts that the government committed during the time martial law was in force. In its Comment Re: Resolution dated 15 December 2009, the OSG raised the issue of whether petitioners possess legal standing to challenge the constitutionality of Proclamation No. 1959.

Discussion I dissent from the majority's dismissal of the petitions as moot. I find Proclamation No. 1959 unconstitutional for lack of factual basis as required in Section 18, Article VII of the 1987 Constitution for the declaration of martial law and suspension of the writ. The majority in effect refuses to exercise this Courts constitutional power in Section 18 of Article VII, to "review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual basis of the proclamation of martial law or the suspension of the privilege of the writ or the extension thereof." Before proceeding to the substantive issues, I shall first discuss the issue on locus standi. In its Comment Re: Resolution dated 15 December 2009, the OSG questioned the legal standing of petitioners in challenging the constitutionality of Proclamation No. 1959. The OSG argued that the phrase "any citizen" in Section 18, Article VII of the 1987 Constitution must be read in conjunction with the phrase "appropriate proceeding." Since petitioners deemed the original actions for certiorari and prohibition as the appropriate proceeding referred to in Section 18, Article VII of the Constitution, petitioners must satisfy the requirements under Rule 65 of the Rules of Court, one of which is the institution of the action by the aggrieved party. The OSG pointed out that none of the petitioners qualify as an aggrieved party. This is error. "Legal standing" or locus standi has been defined as a personal and substantial interest in the case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged.16 In case of a suit questioning the sufficiency of the factual basis of the proclamation of martial law or suspension of the writ, such as here, Section 18, Article VII of the Constitution expressly provides: The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual basis of the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus or the extension thereof, and must promulgate its decision

thereon within thirty days from its filing. (Emphasis supplied) It is clear that the Constitution explicitly clothes "any citizen" with the legal standing to challenge the constitutionality of the declaration of martial law or suspension of the writ. The Constitution does not make any distinction as to who can bring such an action. As discussed in the deliberations of the Constitutional Commission, the "citizen" who can challenge the declaration of martial law or suspension of the writ need not even be a taxpayer.17 This was deliberately designed to arrest, without further delay, the grave effects of an illegal declaration of martial law or suspension of the writ, and to provide immediate relief to those aggrieved by the same. Accordingly, petitioners, being Filipino citizens, possess legal standing to file the present petitions assailing the sufficiency of the factual basis of Proclamation No. 1959. Moreover, given the transcendental importance of the issues raised in the present petitions, the Court may relax the standing requirement and allow a suit to prosper even where there is no direct injury to the party claiming the right of judicial review.18 The Court has held: Notwithstanding, in view of the paramount importance and the constitutional significance of the issues raised in the petitions, this Court, in the exercise of its sound discretion, brushes aside the procedural barrier and takes cognizance of the petitions, as we have done in the early Emergency Powers Cases, where we had occasion to rule: x x x ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders issued by President Quirino although they [involved] only an indirect and general interest shared in common with the public. The Court dismissed the objection that they were not proper parties and ruled that transcendental importance to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure. We have since then applied the exception in many other cases.19 (Emphasis supplied) I. Whether the issuance of Proclamation No. 1963, lifting martial law

and restoring the writ in the province of Maguindanao, rendered the issues raised in the petitions moot and academic. The majority dismisses the petitions on mootness, agreeing with respondents' contention that the issuance of Proclamation No. 1963, lifting martial law and restoring the writ in the province of Maguindanao, rendered the issues raised in the present petitions moot and academic. Respondents maintain that the petitions have ceased to present an "actual case or controversy" with the lifting of martial law and the restoration of the writ, the sufficiency of the factual basis of which is the subject of these petitions. Proclamation No. 1963 is allegedly a "supervening event" that rendered of no practical use or value the consolidated petitions. As a rule, courts may exercise their review power only when there is an actual case or controversy, which involves a conflict of legal claims susceptible of judicial resolution. Such a case must be "definite and concrete, touching the legal relations of parties having conflicting legal interests;" a real, as opposed to an imagined, controversy calling for a specific relief.20 Corollarily, courts generally decline jurisdiction over a moot and academic case or outrightly dismiss it on the ground of mootness. A moot and academic case is one that ceases to present a justiciable controversy by virtue of supervening events, so that assuming jurisdiction over the same, and eventually deciding it, would be of no practical use or value.21 In David v. Arroyo,22 this Court held that the "moot and academic" principle is not a magical formula that automatically dissuades courts in resolving a case. Courts are not prevented from deciding cases, otherwise moot and academic, if (1) there is a grave violation of the Constitution;23 (2) the situation is of exceptional character and of paramount public interest;24 (3) the constitutional issue raised requires formulation of controlling principles to guide the bench, the bar, and the public;25 and (4) the case is capable of repetition yet evading review.26 In Province of North Cotabato v. Government of the Republic of the Philippines Peace Panel on Ancestral Domain (GRP),27 the Court

ruled that once a suit is filed, the Court cannot automatically be deprived of its jurisdiction over a case by the mere expedient of the doer voluntarily ceasing to perform the challenged conduct. Otherwise, the doer would be dictating when this Court should relinquish its jurisdiction over a case. Further, a case is not mooted when the plaintiff seeks damages or prays for injunctive relief against the possible recurrence of the violation.28 Contrary to the majority opinion, the present petitions fall squarely under these exceptions, justifying this Courts exercise of its review power. First, whether Proclamation No. 1959 complied with the requirements under Section 18, Article VII of the Constitution is without doubt an extremely serious constitutional question. In order to forestall any form of abuse in the exercise of the Presidents extraordinary emergency powers, as what happened during the Martial Law regime under former President Ferdinand Marcos (President Marcos), the 1987 Constitution has carefully put in place specific safeguards, which the President must strictly observe. Any declaration of martial law or suspension of the writ falling short of the constitutional requirements must be stricken down as a matter of constitutional duty by this Court. Second, whether the President exercised her Commander-in-Chief powers in accordance with the Constitution indisputably presents a transcendental issue fully imbued with public interest. I agree with amicus curiae Father Joaquin Bernas opinion: "The practice of martial rule can have a profoundly disturbing effect on the life, liberty and fortunes of people. Likewise, the actions taken by the police and military during the period when martial law is in effect can have serious consequences on fundamental rights."29 Third, the issue on the constitutionality of Proclamation No. 1959 unquestionably requires formulation of controlling principles to guide the Executive, Legislature, and the public. The Presidents issuance of Proclamation No. 1959 generated strong reactions from various sectors of society. This, of course, is an expected response from a nation whose painful memory of the dark

past remains fresh. The nation remembers that martial law was the vehicle of President Marcos to seize unlimited State power, which resulted in gross and wanton violations of fundamental human rights of the people. That era saw the collapse of the rule of law and what reigned supreme was a one man-rule for the dictators own personal benefit. The present controversy, being the first case under the 1987 Constitution involving the Presidents exercise of the power to declare martial law and suspend the writ, provides this Court with a rare opportunity,30 which it must forthwith seize, to formulate controlling principles for the guidance of all sectors concerned, most specially the Executive which is in charge of enforcing the emergency measures. Dismissing the petitions on the ground of mootness will most certainly deprive the entire nation of instructive and valuable principles on this extremely crucial national issue. Fourth, the present case is capable of repetition yet evading review. I agree with Father Bernas view: "[H]istory clearly attests that the events that can lead to martial law, as well as the imposition of martial law itself, and the suspension of the privilege together with actions taken by military and police during a period of martial law are capable of repetition and are too important to allow to escape review through the simple expedient of the President lifting a challenged proclamation."31 Fifth, the respondents or doers voluntary cessation of the questioned act does not by itself deprive the Court of its jurisdiction once the suit is filed. In this case, President Arroyo, after eight days from the issuance of Proclamation No. 1959, issued Proclamation No. 1963 revoking Proclamation No. 1959. President Arroyos lifting of martial law and restoration of the writ translate to a voluntary cessation of the very acts complained of in the present petitions. However, the present petitions were filed with this Court while Proclamation No. 1959 was still in effect and before Proclamation No. 1963 was issued, thus foreclosing any legal strategy to divest this Court of its jurisdiction by the mere cessation or withdrawal of the challenged act. Moreover, the fact that every declaration of martial law or suspension of the writ will involve its own set of circumstances peculiar to the

necessity of time, events or participants should not preclude this Court from reviewing the Presidents use of such emergency powers. Whatever are the circumstances surrounding each declaration of martial law or suspension of the writ, the declaration or suspension will always be governed by the same safeguards and limitations prescribed in the same provisions of the Constitution. Failing to determine the constitutionality of Proclamation No. 1959 by dismissing the cases on the ground of mootness sets a very dangerous precedent to the leaders of this country that they could easily impose martial law or suspend the writ without any factual or legal basis at all, and before this Court could review such declaration, they would simply lift the same and escape possible judicial rebuke. II. Whether the term "rebellion" in Section 18, Article VII of the 1987 Constitution has the same meaning as the term "rebellion" that is defined in Article 134 of the Revised Penal Code. Article 134 of the Revised Penal Code, as amended by Republic Act No. 6968,32 defines the crime of rebellion, thus: Art. 134. Rebellion or insurrection; How committed. The crime of rebellion or insurrection is committed by rising publicly and taking arms against the Government for the purpose of removing from the allegiance to said Government or its laws, the territory of the Philippine Islands or any part thereof, of any body of land, naval or other armed forces, depriving the Chief Executive or the Legislature, wholly or partially, of any of their powers or prerogatives. The Constitution, however, does not provide any definition of the term "rebellion." Portions of the first paragraph of Section 18, Article VII of the Constitution, where the term "rebellion" appears, read: Section 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, when the public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law.

Respondents submit that the term "rebellion" must, "for constitutional law purposes, be applied in such manner as to be amply responsive to the call of the times." Respondents point out that the deliberations of the 1986 Constitutional Commission reveal that the concept of the term "rebellion" depends much on its magnitude and scope, as determined by the President based on prevailing circumstances.33 I disagree. The term "rebellion" in Section 18, Article VII of the 1987 Constitution must be understood as having the same meaning as the crime of "rebellion" that is defined in Article 134 of the Revised Penal Code, as amended. First, this is the clear import of the last two paragraphs of Section 18, Article VII of the Constitution, which explicitly state: The suspension of the privilege of the writ of habeas corpus shall apply only to persons judicially charged for rebellion or offenses inherent in, or directly connected with, invasion. During the suspension of the privilege of the writ of habeas corpus, any person thus arrested or detained shall be judicially charged within three days, otherwise he shall be released. (Emphasis supplied) For a person to be judicially charged for rebellion, there must necessarily be a statute defining rebellion. There is no statute defining rebellion other than the Revised Penal Code. Hence, "one can be judicially charged with rebellion only if one is suspected of having committed acts defined as rebellion in Article 134 of the Revised Penal Code."34 Second, the Revised Penal Code definition of rebellion is the only legal definition of rebellion known and understood by the Filipino people when they ratified the 1987 Constitution. Indisputably, the Filipino people recognize and are familiar with only one meaning of rebellion, that is, the definition provided in Article 134 of the Revised Penal Code. To depart from such meaning is to betray the Filipino peoples understanding of the term "rebellion" when they ratified the Constitution. There can be no question that "the Constitution does not derive its force from the convention which framed it, but from the people who ratified it."35

Third, one of the Whereas clauses of Proclamation No. 1959 expressly cites the Revised Penal Code definition of rebellion, belying the governments claim that the Revised Penal Code definition of rebellion merely guided the President in issuing Proclamation No. 1959. In SANLAKAS v. Executive Secretary,36 where the Court regarded President Arroyos declaration of a state of rebellion in Proclamation No. 427 a superfluity,37 the term "rebellion" in said proclamation referred to the crime of rebellion as defined in Article 134 of the Revised Penal Code. Proclamation No. 427 pertinently reads: DECLARING A STATE OF REBELLION WHEREAS, certain elements of the Armed Forces of the Philippines, armed with high-powered firearms and explosives, acting upon the instigation and command and direction of known and unknown leaders, have seized a building in Makati City, put bombs in the area, publicly declared withdrawal of support for, and took arms against the duly constituted Government, and continue to rise publicly and show open hostility, for the purpose of removing allegiance to the Government certain bodies of the Armed Forces of the Philippines and the Philippine National Police, and depriving the President of the Republic of the Philippines, wholly or partially, of her powers and prerogatives which constitute the crime of rebellion punishable under Article 134 of the Revised Penal Code, as amended; x x x (Emphasis supplied) In issuing Proclamation No. 427, President Arroyo relied on the Revised Penal Code definition of rebellion in declaring a state of rebellion. In other words, President Arroyo understood that, for purposes of declaring a state of rebellion, the term "rebellion" found in the Constitution refers to the crime of rebellion defined in Article 134 of the Revised Penal Code. In exercising the Commander-in-Chief powers under the Constitution, every President must insure the existence of the elements of the crime of rebellion, which are: (1) there is a (a) public uprising and (b) taking arms against the Government; and (2) the purpose of the uprising or movement is either (a) to remove from the allegiance to

the Government or its laws: (1) the territory of the Philippines or any part thereof; or (2) any body of land, naval, or other armed forces; or (b) to deprive the Chief Executive or Congress, wholly or partially, of any of their powers and prerogatives.38 To repeat, the term "rebellion" in Section 18, Article VII of the Constitution must be understood to have the same meaning as the crime of rebellion defined in Article 134 of the Revised Penal Code. Ascribing another meaning to the term "rebellion" for constitutional law purposes, more specifically in imposing martial law and suspending the writ, different from the definition in Article 134 of the Revised Penal Code, overstretches its definition without any standards, invites unnecessary confusion, and undeniably defeats the intention of the Constitution to restrain the extraordinary Commanderin-Chief powers of the President. Since the term "rebellion" in Section 18, Article VII of the Constitution pertains to the crime of rebellion as defined in Article 134 of the Revised Penal Code, the next question turns on the kind of proof required for a valid declaration of martial law and suspension of the writ. While the Constitution expressly provides strict safeguards against any potential abuse of the Presidents emergency powers, the Constitution does not compel the President to produce such amount of proof as to unduly burden and effectively incapacitate her from exercising such powers. Definitely, the President need not gather proof beyond reasonable doubt, which is the standard of proof required for convicting an accused charged with a criminal offense. Section 2, Rule 133 of the Rules of Court defines proof beyond reasonable doubt as follows: Proof beyond reasonable doubt does not mean such a degree of proof as, excluding possibility of error, produces absolute certainty. Moral certainty only is required, or that degree of proof which produces conviction in an unprejudiced mind. Proof beyond reasonable doubt is the highest quantum of evidence, and to require the President to establish the existence of rebellion or invasion with such amount of proof before declaring martial law or

suspending the writ amounts to an excessive restriction on "the Presidents power to act as to practically tie her hands and disable her from effectively protecting the nation against threats to public safety."39 Neither clear and convincing evidence, which is employed in either criminal or civil cases, is indispensable for a lawful declaration of martial law or suspension of the writ. This amount of proof likewise unduly restrains the President in exercising her emergency powers, as it requires proof greater than preponderance of evidence although not beyond reasonable doubt.40 Not even preponderance of evidence,41 which is the degree of proof necessary in civil cases, is demanded for a lawful declaration of martial law. By preponderance of evidence is meant that the evidence as a whole adduced by one side is superior to that of the other. It refers to the weight, credit and value of the aggregate evidence on either side and is usually considered to be synonymous with the term "greater weight of evidence" or "greater weight of the credible evidence". It is evidence which is more convincing to the court as worthy of belief than that which is offered in opposition thereto.42 Weighing the superiority of the evidence on hand, from at least two opposing sides, before she can act and impose martial law or suspend the writ unreasonably curtails the Presidents emergency powers. Similarly, substantial evidence constitutes an unnecessary restriction on the Presidents use of her emergency powers. Substantial evidence is the amount of proof required in administrative or quasijudicial cases, or that amount of relevant evidence which a reasonable mind might accept as adequate to justify a conclusion.43 I am of the view that probable cause of the existence of either invasion or rebellion suffices and satisfies the standard of proof for a valid declaration of martial law and suspension of the writ. Probable cause is the same amount of proof required for the filing of a criminal information by the prosecutor and for the issuance of an

arrest warrant by a judge. Probable cause has been defined as a "set of facts and circumstances as would lead a reasonably discreet and prudent man to believe that the offense charged in the Information or any offense included therein has been committed by the person sought to be arrested."44 In determining probable cause, the average man weighs the facts and circumstances without resorting to the calibrations of the rules of evidence of which he has no technical knowledge. He relies on common sense. A finding of probable cause needs only to rest on evidence showing that, more likely than not, a crime has been committed and that it was committed by the accused. Probable cause demands more than suspicion; it requires less than evidence that would justify conviction.45 (Emphasis supplied) Probable cause, basically premised on common sense, is the most reasonable, most practical, and most expedient standard by which the President can fully ascertain the existence or non-existence of rebellion, necessary for a declaration of martial law or suspension of the writ. Therefore, lacking probable cause of the existence of rebellion, a declaration of martial law or suspension of the writ is without any basis and thus, unconstitutional. The requirement of probable cause for the declaration of martial law or suspension of the writ is consistent with Section 18, Article VII of the Constitution. It is only upon the existence of probable cause that a person can be "judicially charged" under the last two paragraphs of Section 18, Article VII, to wit: The suspension of the privilege of the writ of habeas corpus shall apply only to persons judicially charged for rebellion or offenses inherent in, or directly connected with, invasion. During the suspension of the privilege of the writ of habeas corpus, any person thus arrested or detained shall be judicially charged within three days, otherwise he shall be released. (Emphasis supplied) III. Whether the declaration of martial law or the suspension of the writ

authorizes warrantless arrests, searches and seizures. Section 18, Article VII of the Constitution partially states: 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 of habeas corpus. The suspension of the privilege of the writ of habeas corpus shall apply only to persons judicially charged for rebellion or offenses inherent in, or directly connected with, invasion. The 1935 and 1973 Constitutions did not contain a similar provision. Obviously, this new provision in the 1987 Constitution was envisioned by the framers of the Constitution to serve as an essential safeguard against potential abuses in the exercise of the Presidents emergency powers. The Constitution now expressly declares, "A state of martial law does not suspend the operation of the Constitution." Neither does a state of martial law supplant the functioning of the civil courts or legislative assemblies. Nor does it authorize the conferment of jurisdiction on military courts and agencies over civilians where civil courts are able to function, or automatically suspend the writ. There is therefore no dispute that the constitutional guarantees under the Bill of Rights remain fully operative and continue to accord the people its mantle of protection during a state of martial law. In case the writ is also suspended, the suspension applies only to those judicially charged for rebellion or offenses directly connected with invasion. Considering the non-suspension of the operation of the Constitution during a state of martial law, a declaration of martial law does not authorize warrantless arrests, searches and seizures, in derogation of Section 2, Article III of the Constitution, which provides: Section 2. The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures 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. Warrantless arrests, search and seizure are valid only in instances where such acts are justified, i.e., those enumerated in Section 5, Rule 113 of the Rules of Court.46 In Pequet v. Tangonan,47 decided during the Martial Law regime under former President Marcos, the Court stressed that military personnel, in effecting arrests, must strictly observe the applicable Rules of Court and settled jurisprudence, thus: Martial law has precisely been provided in both the 1935 Charter and the present Constitution to assure that the State is not powerless to cope with invasion, insurrection or rebellion or any imminent danger of its occurrence. When resort to it is therefore justified, it is precisely in accordance with and not in defiance of the fundamental law. There is all the more reason then for the rule of law to be followed. For as was so eloquently proclaimed in Ex parte Milligan: "The Constitution is a "law for rulers and for people equally in war and in peace and covers with the shield of its protection all classes of men at all times and under all circumstances." It is true, of course, as admitted by Willoughby, who would limit the scope of martial law power, that the military personnel are called upon to assist in the maintenance of peace and order and the enforcement of legal norms. They can therefore act like ordinary peace officers. In effecting arrests, however, they are not free to ignore, but are precisely bound by, the applicable Rules of Court and doctrinal pronouncements. (Emphasis supplied) In Aberca v. Ver,48 the Court emphasized that the suspension of the writ does not give imprimatur to warrantless arrests in violation of the Constitution. In that case, which involved the issue of whether the suspension of the writ bars a civil action for damages for illegal searches and for other human rights violations committed by the military, the Court held:

At the heart of petitioners complaint is Article 32 of the Civil Code which provides: xxxx It is obvious that the purpose of the above codal provision is to provide a sanction to the deeply cherished rights and freedoms enshrined in the Constitution. Its message is clear; no man may seek to violate those sacred rights with impunity. In times of great upheaval or of social and political stress, when the temptation is strongest to yield borrowing the words of Chief Justice Claudio Teehankee to the law of force rather than the force of law, it is necessary to remind ourselves that certain basic rights and liberties are immutable and cannot be sacrificed to the transient needs or imperious demands of the ruling power. The rule of law must prevail, or else liberty will perish. x x x xxxx It may be that the respondents, as members of the Armed Forces of the Philippines, were merely responding to their duty, as they claim, "to prevent or suppress lawless violence, insurrection, rebellion and subversion" in accordance with Proclamation No. 2054 of President Marcos, despite the lifting of martial law on January 27, 1981, and in pursuance of such objective, to launch pre-emptive strikes against alleged communist terrorist underground houses. But this cannot be construed as a blanket license or a roving commission untramelled by any constitutional restraint, to disregard or transgress upon the rights and liberties of the individual citizen enshrined in and protected by the Constitution. The Constitution remains the supreme law of the land to which all officials, high or low, civilian or military, owe obedience and allegiance at all times. xxxx This is not to say that military authorities are restrained from pursuing their assigned task or carrying out their mission with vigor. We have no quarrel with their duty to protect the Republic from its enemies, whether of the left or of the right, or from within or without, seeking to destroy or subvert our democratic institutions and imperil their very

existence. What we are merely trying to say is that in carrying out this task and mission, constitutional and legal safeguards must be observed, otherwise, the very fabric of our faith will start to unravel. x x x We do not agree. We find merit in petitioners contention that the suspension of the privilege of the writ of habeas corpus does not destroy petitioners right and cause of action for damages for illegal arrest and detention and other violations of their constitutional rights. The suspension does not render valid an otherwise illegal arrest or detention. What is suspended is merely the right of the individual to seek release from detention through the writ of habeas corpus as a speedy means of obtaining his liberty.49 (Emphasis supplied) IV. Whether the declaration of martial law or suspension of the writ is a joint and sequential function of the President and Congress such that, without Congressional action on the proclamation or suspension either affirming or revoking it, the President having in the meantime lifted the same, this Court has nothing to review. Section 18, Article VII of the 1987 Constitution provides: Section 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, when the public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law. Within forty-eight hours from the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus, the President shall submit a report in person or in writing to the Congress. The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such proclamation or suspension, which revocation shall not be set aside by the President. Upon the initiative of the President, the Congress may, in the same manner, extend such proclamation or suspension for a period to be determined by the

Congress, if the invasion or rebellion shall persist and public safety requires it. The Congress, if not in session, shall, within twenty-four hours following such proclamation or suspension, convene in accordance with its rules without need of a call. The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual basis of the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus or the extension thereof, and must promulgate its decision thereon within thirty days from its filing. The Constitution vests exclusively in the President, as Commanderin-Chief, the emergency powers to declare martial law or suspend the writ in cases of rebellion or invasion, when the public safety requires it. The imposition of martial law or suspension of the writ takes effect the moment it is declared by the President. No other act is needed for the perfection of the declaration of martial law or the suspension of the writ. As amicus curiae retired Justice Mendoza states: A declaration of martial law by the President alone is complete by itself and does not require for its validity the approval or concurrence of Congress. It is a power placed solely in the keeping of the President to enable him to secure the people from harm and restore the public order so that they can enjoy their freedoms. Because it is liable to abuse, it is made subject to check by Congress and/or the [Supreme Court]. The power of Congress is to revoke not to confirm or ratify, much less to approve, the Presidents action declaring martial law or suspending the privilege of the writ of habeas corpus. It is a veto power, just as the power of the judiciary to review the Presidents action is a veto power on the Executives action. It is clear, therefore, that the Presidents power to declare martial law or suspend the writ is independent, separate, and distinct from any constitutionally mandated act to be performed by either the Legislature or the Judiciary. It is neither joint nor sequential with Congress power to revoke the declaration or suspension or to extend it upon the initiative of the President. Accordingly, even if Congress

has not acted upon the Presidents declaration or suspension, the Court may review the declaration or suspension in an appropriate proceeding filed by any citizen. Otherwise stated, Congress inaction on the declaration or suspension is not determinative of the Courts exercise of its review power under Section 18, Article VII of the Constitution. To hold that the power of this Court to review the Presidents declaration of martial law or suspension of the writ is sequential, or joint, with the review power of Congress is to make it impossible for this Court to decide a case challenging the declaration or suspension "within thirty days from its filing," as mandated by the Constitution. Congress has no deadline when to revoke the Presidents declaration or suspension. Congress may not even do anything with the Presidents declaration or suspension and merely allow it to lapse after 60 days. On the other hand, the Constitution mandates that this Court "must promulgate its decision thereon within thirty days from [the] filing" of the case. Clearly, the Courts review power is neither sequential nor joint with the review power of Congress. Moreover, the Presidents lifting of the declaration or suspension before this Court could decide the case within the 30-day period does not operate to divest this Court of its jurisdiction over the case. A party cannot simply oust the Courts jurisdiction, already acquired, by a partys own unilateral act. The Presidents lifting of the declaration or suspension merely means that this Court does not have to decide the case within the 30-day period, as the urgency of deciding has ceased. Certainly, the Court is not divested of its jurisdiction simply because the urgency of deciding a case has ceased. V. If the constitutional power of this Court to review the factual basis of the declaration of martial law or suspension of the writ can be exercised simultaneously with the constitutional power of Congress to revoke the declaration or suspension, and the decision of this Court conflicts with the decision of Congress, which decision shall prevail. The President has the sole and exclusive power to declare martial law or suspend the writ. This power of the President is subject to

review separately by Congress and the Supreme Court. Justice Mendoza stresses, "Thus, Congress and this Court have separate spheres of competence. They do not act jointly and sequentially but independently of each other."50 Father Bernas points out, "Since the powers of Congress and the Court are independent of each other, there is nothing to prevent Congress and the Court from simultaneously exercising their separate powers."51 In the exercise by the Court and Congress of their separate "review powers" under Section 18, Article VII of the Constitution, three possible scenarios may arise. First, the Presidents martial law declaration or suspension of the writ is questioned in the Supreme Court without Congress acting on the same. Such a situation generates no conflict between the Supreme Court and Congress. There is no question that the Supreme Court can annul such declaration or suspension if it lacks factual basis. Congress, whose only power under Section 18, Article VII of the Constitution is to revoke the declaration or suspension on any ground, is left with nothing to revoke if the Court has already annulled the declaration or suspension. Second, Congress decides first to revoke the martial law declaration or suspension of the writ. Since the Constitution does not limit the grounds for congressional revocation, Congress can revoke the declaration or suspension for policy reasons, or plainly for being insignificant, as for instance it involves only one barangay rebelling, or if it finds no actual rebellion. In this case, the Supreme Court is left with nothing to act on as the revocation by Congress takes effect immediately. The Supreme Court must respect the revocation by Congress even if the Court believes a rebellion exists because Congress has the unlimited power to revoke the declaration or suspension. Third, the Supreme Court decides first and rules that there is factual basis for the declaration of martial law or suspension of the writ. In such a situation, Congress can still revoke the declaration or suspension as its power under the Constitution is broader insofar as the declaration or suspension is concerned. "Congress cannot be prevented by the Court from revoking the Presidents decision

because it is not for the Court to determine what to do with an existing factual situation. x x x Congress has been given unlimited power to revoke the Presidents decision."52 In short, even if there is an actual rebellion, whether affirmed or not by the Supreme Court, Congress has the power to revoke the Presidents declaration or suspension. In the present controversy, Congress failed to act on Proclamation No. 1959 when it commenced its Joint Session on 9 December 2009 until the lifting of the martial law declaration and restoration of the writ on 12 December 2009. Congress non-revocation of Proclamation No. 1959 categorizes the present case under the first scenario. In such a situation, where no conflict ensues, Congress inaction on Proclamation No. 1959 does not preclude this Court from ruling on the sufficiency of the factual basis of the declaration of martial law and suspension of the writ. VI. Whether this Courts determination of the sufficiency of the factual basis of the declaration of martial law and suspension of the writ, which in the meantime have been lifted, would be essential to the resolution of issues concerning the validity of related acts that the government committed during the time that martial law and the suspension of the writ were in force. Indisputably, unlawful acts may be committed during martial law or suspension of the writ, not only by the rebels, but also by government forces who are duty bound to enforce the declaration or suspension and immediately put an end to the root cause of the emergency. Various acts carried out by government forces during martial law or suspension of the writ in the guise of protecting public safety may in reality amount to serious abuses of power and authority. Whatever the Courts decision will be on the sufficiency of the factual basis of the Presidents declaration or suspension does not preclude those aggrieved by such illegal acts from pursuing any course of legal action available to them. Therefore, the determination by this Court of the sufficiency of the factual basis of the declaration or suspension is not essential to the resolution of issues concerning the validity of related acts that government forces may have committed during the

emergency. VII. Whether Proclamation No. 1959 has sufficient factual basis. The full text of Section 18, Article VII of the 1987 Constitution reads: Section 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, when the public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the writ of habeas corpus or place the Philippines or any part thereof under martial law. Within forty-eight hours from the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus, the President shall submit a report in person or in writing to the Congress. The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such proclamation or suspension, which revocation shall not be set aside by the President. Upon the initiative of the President, the Congress may, in the same manner, extend such proclamation or suspension for a period to be determined by the Congress, if the invasion or rebellion shall persist and public safety requires it. The Congress, if not in session, shall, within twenty-four hours following such proclamation or suspension, convene in accordance with its rules without need of a call. The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the factual basis of the proclamation of martial law or the suspension of the privilege of the writ of habeas corpus 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 of

habeas corpus. The suspension of the privilege of the writ of habeas corpus shall apply only to persons judicially charged for rebellion or offenses inherent in, or directly connected with, invasion. During the suspension of the privilege of the writ of habeas corpus, any person thus arrested or detained shall be judicially charged within three days, otherwise he shall be released. The Commander-in-Chief provisions of the 1935 Constitutions, on the other hand, respectively state: Section 10(2), Article VII of the 1935 Constitution 2. The President shall be commander-in-chief of all armed forces of the Philippines, and, whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion, insurrection, or rebellion. In case of invasion, insurrection, or rebellion or imminent danger thereof, when the public safety requires it, he may suspend the privilege of the writ of habeas corpus, or place the Philippines or any part thereof under Martial Law. Section 12, Article IX of the 1973 Constitution SEC. 12. The Prime Minister shall be commander-in-chief of all armed forces of the Philippines, and, whenever it becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion, insurrection, or rebellion or imminent danger thereof, when the public safety requires it, he may suspend the privilege of the writ of habeas corpus, or place the Philippines or any part thereof under Martial Law. Notably, the 1935 and 1973 Constitutions only specify the instances when martial law may be declared or when the writ may be suspended. The 1987 Constitution, on the other hand, not only explicitly includes the specific grounds for the activation of such emergency powers, but also imposes express limitations on the exercise of such powers. Upon the Presidents declaration of martial law or suspension of the and 1973

writ, the following safeguards are automatically set into motion: (1) the duration of martial law or suspension of the writ is limited to a period not exceeding sixty days; (2) the President is mandated to submit a report to Congress within forty-eight hours from the declaration or suspension; and (3) the declaration or suspension is subject to review by Congress, which may revoke such declaration or suspension. If Congress is not in session, it shall convene within 24 hours without need for call.53 In addition, the sufficiency of the factual basis of the declaration, suspension, or their extension is subject to review by the Supreme Court in an appropriate proceeding. The mechanism and limitations laid down in Section 18, Article VII of the Constitution in declaring martial law or suspending the writ were introduced precisely to preclude a repetition of the kind of martial law imposed by President Marcos, which ushered in a permanent authoritarian regime. As Father Bernas wrote in his book: The Commander-in-Chief provisions of the 1935 Constitution had enabled President Ferdinand Marcos to impose authoritarian rule on the Philippines from 1972 to 1986. Supreme Court decisions during that period upholding the actions taken by Mr. Marcos made authoritarian rule part of Philippine constitutional jurisprudence. The members of the Constitutional Commission, very much aware of these facts, went about reformulating the Commander-in-Chief powers with a view to dismantling what had been constructed during the authoritarian years. The new formula included revised grounds for the activation of emergency powers, the manner of activating them, the scope of the powers, and review of presidential action.54 Consistent with the framers intent to reformulate the Commander-inChief powers of the President, the 1987 Constitution requires the concurrence of two conditions in declaring martial law or suspending the writ, namely, (1) an actual invasion or rebellion, and (2) public safety requires the exercise of such power.55 The Constitution no longer allows imminent danger of rebellion or invasion as a ground for the declaration or suspension, which the 1935 and 1973 Constitutions expressly permitted. In the present case, President Arroyo grounded the declaration of martial law and suspension of the writ on the existence of rebellion in

Maguindanao. In her Report submitted to Congress, President Arroyo cited the following instances as constitutive of rebellion: 1. Local government offices in the province of Maguindanao were closed and ranking local government officials refused to discharge their functions, which hindered the investigation and prosecution team from performing their tasks; 2. The Local Civil Registrar of Maguindanao refused to accept the registration of the death certificates of the victims purportedly upon the orders of Andal Ampatuan Sr.; 3. The local judicial system has been crippled by the absence or nonappearance of judges of local courts, thereby depriving the government of legal remedies in their prosecutorial responsibilities (i.e. issuance of warrants of searches, seizure and arrest). While the Supreme Court has designated an Acting Presiding Judge from another province, the normal judicial proceedings could not be carried out in view of threats to their lives or safety, prompting government to seek a change of venue of the criminal cases after informations have been filed. xxxx Indeed, the nature, quantity and quality of their weaponry, the movement of heavily armed rebels in strategic positions, the closure of the Maguindanao Provincial Capitol, Ampatuan Municipal Hall, Datu Unsay Municipal Hall, and fourteen other municipal halls, and the use of armored vehicles, tanks and patrol cars with unauthorized "PNP/Police" markings, all together confirm the existence of armed public uprising for the political purpose of: (1) removing allegiance from the national government of the Province of Maguindanao; and, (2) depriving the Chief Executive of her powers and prerogatives to enforce the laws of the land and to maintain public order and safety. While the government is at present conducting legitimate

operations to address the on-going rebellion, public safety still requires the continued implementation of martial law and the suspension of the privilege of the writ of habeas corpus in the Province of Maguindanao until the time that such rebellion is completely quelled.56 (Emphasis supplied) The question now is whether there was probable cause, which is the required quantum of proof, to declare the existence of rebellion justifying the Presidents declaration of martial law and suspension of the writ. The answer is in the negative. The contemporaneous public statements made by the Presidents alter egos explaining the grounds for the issuance of Proclamation No. 1959 negate rather than establish the existence of an actual rebellion in Maguindanao. During the interpellations in the Joint Session of Congress, convened pursuant to the provisions of Section 18, Article VII of the Constitution, then Executive Secretary Eduardo Ermita admitted the absence of an actual rebellion in Maguindanao, to wit: REP. LAGMAN. Mr. Speaker, Mr. President, a perusal of the text of Proclamation No. 1959 would show the absence of a clear and categorical finding or determination that actual rebellion is occurring in Maguindanao. Would that be an accurate observation of a reading of the text of Proclamation No. 1959? MR. ERMITA. Your Honor, you may be correct that there was no actual rebellion going on. However, all the indicators that rebellion is, indeed, being committed and happening on the ground is because of the presence of the armed groups that prevent authorities from being able to do its duty of even effecting the arrest of those who should be arrested in spite of the testimonies of witnesses. REP. LAGMAN. Well, we are happy to note that there is an admission that there was no actual rebellion in Maguindanao. But the presence of armed groups would be indicative of lawless violence which is not synonymous to rebellion. As a matter of fact, the Maguindanao situationer which was made by Police Director Andres

Caro was premised on a statement that this was the worst electionrelated violence an act of gross lawlessness but definitely not related to rebellion. x x x x57 (Emphasis supplied) Also, during the Joint Session, then Senator (now President) Benigno S. Aquino III pointed out the public statements made by former Department of Interior and Local Government Secretary Ronaldo V. Puno, then Armed Forces of the Philippines spokesperson Lt. Col. Romeo Brawner, and former Defense Secretary Norberto Gonzales admitting there was no need for martial law: THE SENATE PRESIDENT. With the indulgence of the Chamber and the Speaker, may we request now to allow the distinguished Gentleman from Tarlac, Senator Benigno "Noynoy" Aquino III the floor. SEN. AQUINO. Thank you, Mr. President. May I direct my first question to Secretary Puno. And this is to lay the proper predicate for our first question. The newspaper has been quoting Secretary Puno as not having recommended the imposition of martial law prior to its imposition in Maguindanao. May we know if this was a correct attribution to the Honorable Secretary. MR. PUNO. Until, Your Honor, Mr. Speaker, Mr. Senate President, until the situation developed where police officers went absent on leave and joined the rebel forces, and a significant segment of the civilian armed volunteers of the local governments constituted themselves into a rebel group, until that time I did not believe that it was necessary that martial law be declared. But upon receipt of a report from the Armed Forces of the Philippines and the briefing conducted with the National Security Council, where it was made clear that a separate rebel armed group had already been organized, we concurred, Your Honor, with the recommendation on martial law. SEN. AQUINO. For the record, Mr. Senate President and Mr. Speaker, the AFP, we understand, through the spokesperson, Lt. Col. Romeo Brawner, declared on 13 November 2009 that there is no need for the declaration of martial law in Maguindanao or elsewhere in the country because the AFP and PNP are on top of the situation.

He was quoted as saying, and we quote: "We now have a level of normalcy in the Province of Maguindanao, primarily because of the occupation by our government forces and our law enforcement agencies of the seats of government." Secretary Norberto Gonzales, who unfortunately is not present, declared on December 1, 2009 that the governments effort to contain the tension in the province is holding ground. We also have now the admission by the honorable Secretary Puno that prior to the undated national security briefing, he was also of the opinion that martial law was not necessary in Maguindanao. x x x58 Even before the interpellations in Congress, then Executive Secretary Ermita publicly confirmed the inadequacies of Proclamation No. 1959: Well have to get the report from the field from the AFP and PNP that the conditions that prompted the President to issue the proclamation, have improved, and therefore, the threat of further lawlessness and probability of rebellion is already down.59 (Emphasis supplied) Significantly, at a press conference, then Secretary of Justice Agnes Devanadera declared, "We noticed and observed there was a rebellion in the offing." In another press briefing, Devanadera stated that "rebellion which does not necessarily involve a physical takeover by armed elements as argued by some critics of the Presidents order, was "looming in Maguindanao."60 In short, the Department of Justice Secretary, who is the principal legal officer of the Arroyo administration, publicly admitted that there was only a "looming" rebellion, a "rebellion in the offing," in Maguindanao. Likewise, in a press conference, "the AFP Chief of Staff claimed that armed groups, numbering between 40 to 400 men and spread out in the province, planned to prevent the arrest of members of the Ampatuan family, the prime suspects in the Maguindanao massacre. He stated, "Based on the reports we received, there were a lot of groupings of armed groups in different places. We also received reports that they have plans to undertake hostile action if ever government officials, the Ampatuans particularly, were taken in custody. We felt this was very imminent threat, thats why we recommended this proclamation."61

Then Defense Secretary Norberto Gonzales was quoted as stating that the "recommendation to declare martial law in Maguindanao is a sensitive matter that needs to be studied."62 In an interview, Gonzales said, "titingnan natin (we will see) how the situation develops there."63 He further stated, "As of now, I think whatever the government is doing so far is really effective. We will wait for the results of the work of Secretary Devanadera of Justice and also Secretary Puno of DILG. So, so far maganda naman yun takbo ng ating operation doon."64 Gonzales added, "Yung tungkol sa martial law, alam mo sensitive na bagay yan kaya pag-aaralan natin."65 The admissions and public statements made by members of the Cabinet, who are the Presidents alter egos, as well as the public assessments made by the highest ranking military officials, clearly demonstrate that instead of being anchored on the existence of an actual rebellion, Proclamation No. 1959 was based on a mere threat, or at best an imminent threat of rebellion, or a rebellion "in the offing."66 This undeniably runs counter to the letter and intent of the Constitution. A looming rebellion is analogous to imminent danger of rebellion, which was deliberately eliminated by the framers of the 1987 Constitution as a ground for the declaration of martial law precisely to avoid a repetition of the misguided and oppressive martial law imposed by former President Marcos. There is absolutely nothing which shows that the Ampatuans and their armed followers, at any point in time, intended to overthrow the government. On the contrary, the Ampatuans were publicly known as very close political allies of President Arroyo. There is not a single instance where the Ampatuans denounced, expressly or impliedly, the government, or attempted to remove allegiance to the government or its laws or to deprive the President or Congress of any of their powers. Based on the records, what the government clearly established, among others, were (1) the existence of the Ampatuans private army; and (2) the Ampatuans vast collection of high powered firearms and ammunitions. These shocking discoveries, however, do not amount to rebellion as defined in Article 134 of the Revised Penal Code. Based on the statements made by ranking government and military officials, and as clearly found by the RTC-Quezon City in Criminal Case No. Q-10-

162667 and affirmed by the Court of Appeals, there was no public uprising and taking arms against the government for the purpose of removing from the allegiance to the government or its laws the territory of the Philippines or any part thereof, or depriving the Chief Executive or Congress, wholly or partially, of any of their powers and prerogatives. The Ampatuans amassing of weaponry, including their collection of armored cars, tanks and patrol cars, merely highlights this political clans unbelievably excessive power and influence under the Arroyo administration. To repeat, only in case of actual invasion or rebellion, when public safety requires it, may the President declare martial law or suspend the writ. In declaring martial law and suspending the writ in Maguindanao in the absence of an actual rebellion, President Arroyo indisputably violated the explicit provisions of Section 18, Article VII of the Constitution. Conclusion Thirty-seven years after President Marcos Proclamation No. 1081, President Arroyo issued Proclamation No. 1959 declaring martial law and suspending the privilege of the writ of habeas corpus in the province of Maguindanao, except in MILF identified areas. President Marcos martial law, justified to counteract the Communist insurgency in the country,67 turned out to be a vehicle to establish a one-man authoritarian rule in the country. Expectedly, President Arroyos Proclamation No. 1959 refreshed the nations bitter memories of the tyranny during the Martial Law regime of President Marcos, and sparked the publics vigilance to prevent a possible recurrence of that horrible past. In issuing Proclamation No. 1959, President Arroyo exercised the most awesome and powerful among her graduated Commander-inChief powers to suppress a supposed rebellion in Maguindanao, following the massacre of 57 civilians in the worst election-related violence in the countrys history. Since then, the government branded the Ampatuans, the alleged masterminds of the massacre, as rebels orchestrating the overthrow of the Arroyo administration. However, the events before, during, and after the massacre negate the existence of an armed uprising aimed at bringing down the

government, but rather point to a surfeit of impunity and abuse of power of a political clan closely allied with the Arroyo administration. In short, Proclamation No. 1959 was issued without an actual rebellion justifying the same. Apparently, President Arroyo resorted to martial law and suspension of the writ, not to quell a purported rebellion because there was absolutely none, but to show her indignation over the gruesome massacre and her swift response in addressing the difficult situation involving her close political allies. She was reported to be "under pressure to deliver, amid rising public outrage and international condemnation of the massacre."68 However, mounting pressure to bring the murderers to justice, without any invasion or rebellion in Maguindanao, does not warrant the imposition of martial law or suspension of the writ. Rather, what the nation expects, and what the victims and their families truly deserve, is the speedy and credible investigation and prosecution, and eventually the conviction, of the merciless killers. In sum, Proclamation No. 1959 was anchored on a non-existent rebellion. Based on the events before, during and after the Maguindanao massacre, there was obviously no rebellion justifying the declaration of martial law and suspension of the writ. The discovery of the Ampatuans private army and massive weaponry does not establish an armed public uprising aimed at overthrowing the government. Neither do the closure of government offices and the reluctance of the local government officials and employees to report for work indicate a rebellion. The Constitution is clear. Only in case of actual invasion or rebellion, when public safety requires it, can a state of martial law be declared or the privilege of the writ of habeas corpus be suspended. Proclamation No. 1959 cannot be justified on the basis of a threatened, imminent, or looming rebellion, which ground was intentionally deleted by the framers of the 1987 Constitution. Considering the non-existence of an actual rebellion in Maguindanao, Proclamation No. 1959 is unconstitutional for lack of factual basis as required under Section 18, Article VII of the Constitution for the declaration of martial law and suspension of the privilege of the writ of habeas corpus.

Accordingly, I vote to GRANT the petitions and DECLARE Proclamation No. 1959 UNCONSTITUTIONAL for failure to comply with Section 18, Article VII of the Constitution.

G.R. No. 169838

April 25, 2006

BAYAN, KARAPATAN, KILUSANG MAGBUBUKID NG PILIPINAS (KMP), GABRIELA, Fr. Jose Dizon, Renato Constantino, Jr., Froyel Yaneza, and Fahima Tajar, Petitioners, vs. EDUARDO ERMITA, in his capacity as Executive Secretary, Manila City Mayor LITO ATIENZA, Chief of the Philippine National Police, Gen. ARTURO M. LOMIBAO, NCRPO Chief Maj. Gen. VIDAL QUEROL, and Western Police District Chief Gen. PEDRO BULAONG, Respondents. x---------------------------------x G.R. No. 169848 April 25, 2006

Jess Del Prado, Wilson Fortaleza, Leody de Guzman, Pedro Pinlac, Carmelita Morante, Rasti Delizo, Paul Bangay, Marie Jo Ocampo, Lilia dela Cruz, Cristeta Ramos, Adelaida Ramos, Mary Grace Gonzales, Michael Torres, Rendo Sabusap, Precious Balute, Roxanne Magboo, Ernie Bautista, Joseph de Jesus, Margarita Escober, Djoannalyn Janier, Magdalena Sellote, Manny Quiazon, Ericson Dizon, Nenita Cruzat, Leonardo De los Reyes, Pedrito Fadrigon, Petitioners, vs. EDUARDO ERMITA, in his official capacity as The Executive Secretary and in his personal capacity, ANGELO REYES, in his official capacity as Secretary of the Interior and Local Governments, ARTURO LOMIBAO, in his official capacity as the Chief, Philippine National Police, VIDAL QUEROL, in his official capacity as the Chief, National Capital Regional Police Office (NCRPO), PEDRO BULAONG, in his official capacity as the Chief, Manila Police District (MPD) AND ALL OTHER PUBLIC OFFICERS GARCIA, and AND PRIVATE INDIVIDUALS ACTING UNDER THEIR CONTROL, SUPERVISION AND INSTRUCTIONS, Respondents. x---------------------------------x G.R. No. 169881 April 25, 2006

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, GILDA SUMILANG, FRANCISCO LASTRELLA, and ROQUE M. TAN, Petitioners, vs. THE HONORABLE EXECUTIVE SECRETARY, PNP DIRECTOR GENRAL ARTURO LOMIBAO, HONORABLE MAYOR LITO ATIENZA, and PNP MPD CHIEF SUPT. PEDRO BULAONG, Respondents. DECISION AZCUNA, J.: Petitioners come in three groups. The first petitioners, Bayan, et al., in G.R. No. 169838,1 allege that they are citizens and taxpayers of the Philippines and that their rights as organizations and individuals were violated when the rally they participated in on October 6, 2005 was violently dispersed by policemen implementing Batas Pambansa (B.P.) No. 880. The second group consists of 26 individual petitioners, Jess del Prado, et al., in G.R. No. 169848,2 who allege that they were injured, arrested and detained when a peaceful mass action they held on September 26, 2005 was preempted and violently dispersed by the police. They further assert that on October 5, 2005, a group they participated in marched to Malacaang to protest issuances of the Palace which, they claim, put the country under an "undeclared" martial rule, and the protest was likewise dispersed violently and many among them were arrested and suffered injuries. The third group, Kilusang Mayo Uno (KMU), et al., petitioners in G.R. No. 169881,3 allege that they conduct peaceful mass actions and that their rights as organizations and those of their individual members as citizens, specifically the right to peaceful assembly, are affected by Batas Pambansa No. 880 and the policy of "Calibrated Preemptive Response" (CPR) being followed to implement it. KMU, et al., claim that on October 4, 2005, a rally KMU co-sponsored was to be conducted at the Mendiola bridge but police blocked them along C.M. Recto and Lepanto Streets and forcibly dispersed them, causing injuries to several of their members. They further allege that

on October 6, 2005, a multi-sectoral rally which KMU also cosponsored was scheduled to proceed along Espaa Avenue in front of the University of Santo Tomas and going towards Mendiola bridge. Police officers blocked them along Morayta Street and prevented them from proceeding further. They were then forcibly dispersed, causing injuries on one of them.4 Three other rallyists were arrested. All petitioners assail Batas Pambansa No. 880, some of them in toto and others only Sections 4, 5, 6, 12, 13(a), and 14(a), as well as the policy of CPR. They seek to stop violent dispersals of rallies under the "no permit, no rally" policy and the CPR policy recently announced. B.P. No. 880, "The Public Assembly Act of 1985," provides: Batas Pambansa Blg. 880 An Act Ensuring The Free Exercise By The People Of Their Right Peaceably To Assemble And Petition The Government [And] For Other Purposes Be it enacted by the Batasang Pambansa in session assembled: Section 1. Title. This Act shall be known as "The Public Assembly Act of 1985." Sec. 2. Declaration of policy. The constitutional right of the people peaceably to assemble and petition the government for redress of grievances is essential and vital to the strength and stability of the State. To this end, the State shall ensure the free exercise of such right without prejudice to the rights of others to life, liberty and equal protection of the law. Sec. 3. Definition of terms. For purposes of this Act: (a) "Public assembly" means any rally, demonstration, march, parade, procession or any other form of mass or concerted action held in a public place for the purpose of presenting a lawful cause; or expressing an opinion to the general public on any particular issue; or protesting or influencing any state of affairs whether political, economic or social; or petitioning the government for redress of

grievances. The processions, rallies, parades, demonstrations, public meetings and assemblages for religious purposes shall be governed by local ordinances; Provided, however, That the declaration of policy as provided in Section 2 of this Act shall be faithfully observed. The definition herein contained shall not include picketing and other concerted action in strike areas by workers and employees resulting from a labor dispute as defined by the Labor Code, its implementing rules and regulations, and by the Batas Pambansa Bilang 227. (b) "Public place" shall include any highway, boulevard, avenue, road, street, bridge or other thoroughfare, park, plaza, square, and/or any open space of public ownership where the people are allowed access. (c) "Maximum tolerance" means the highest degree of restraint that the military, police and other peace keeping authorities shall observe during a public assembly or in the dispersal of the same. (d) "Modification of a permit" shall include the change of the place and time of the public assembly, rerouting of the parade or street march, the volume of loud-speakers or sound system and similar changes. Sec. 4. Permit when required and when not required. A written permit shall be required for any person or persons to organize and hold a public assembly in a public place. However, no permit shall be required if the public assembly shall be done or made in a freedom park duly established by law or ordinance or in private property, in which case only the consent of the owner or the one entitled to its legal possession is required, or in the campus of a governmentowned and operated educational institution which shall be subject to the rules and regulations of said educational institution. Political meetings or rallies held during any election campaign period as provided for by law are not covered by this Act. Sec. 5. Application requirements. All applications for a permit shall comply with the following guidelines:

(a) The applications shall be in writing and shall include the names of the leaders or organizers; the purpose of such public assembly; the date, time and duration thereof, and place or streets to be used for the intended activity; and the probable number of persons participating, the transport and the public address systems to be used. (b) The application shall incorporate the duty and responsibility of the applicant under Section 8 hereof. (c) The application shall be filed with the office of the mayor of the city or municipality in whose jurisdiction the intended activity is to be held, at least five (5) working days before the scheduled public assembly. (d) Upon receipt of the application, which must be duly acknowledged in writing, the office of the city or municipal mayor shall cause the same to immediately be posted at a conspicuous place in the city or municipal building. Sec. 6. Action to be taken on the application. (a) It shall be the duty of the mayor or any official acting in his behalf to issue or grant a permit unless there is clear and convincing evidence that the public assembly will create a clear and present danger to public order, public safety, public convenience, public morals or public health. (b) The mayor or any official acting in his behalf shall act on the application within two (2) working days from the date the application was filed, failing which, the permit shall be deemed granted. Should for any reason the mayor or any official acting in his behalf refuse to accept the application for a permit, said application shall be posted by the applicant on the premises of the office of the mayor and shall be deemed to have been filed. (c) If the mayor is of the view that there is imminent and grave danger of a substantive evil warranting the denial or modification of the permit, he shall immediately inform the applicant who must be heard on the matter. (d) The action on the permit shall be in writing and served on the

applica[nt] within twenty-four hours. (e) If the mayor or any official acting in his behalf denies the application or modifies the terms thereof in his permit, the applicant may contest the decision in an appropriate court of law. (f) In case suit is brought before the Metropolitan Trial Court, the Municipal Trial Court, the Municipal Circuit Trial Court, the Regional Trial Court, or the Intermediate Appellate court, its decisions may be appealed to the appropriate court within forty-eight (48) hours after receipt of the same. No appeal bond and record on appeal shall be required. A decision granting such permit or modifying it in terms satisfactory to the applicant shall be immediately executory. (g) All cases filed in court under this section shall be decided within twenty-four (24) hours from date of filing. Cases filed hereunder shall be immediately endorsed to the executive judge for disposition or, in his absence, to the next in rank. (h) In all cases, any decision may be appealed to the Supreme Court. (i) Telegraphic appeals to be followed by formal appeals are hereby allowed. Sec. 7. Use of Public throroughfare. Should the proposed public assembly involve the use, for an appreciable length of time, of any public highway, boulevard, avenue, road or street, the mayor or any official acting in his behalf may, to prevent grave public inconvenience, designate the route thereof which is convenient to the participants or reroute the vehicular traffic to another direction so that there will be no serious or undue interference with the free flow of commerce and trade. Sec. 8. Responsibility of applicant. It shall be the duty and responsibility of the leaders and organizers of a public assembly to take all reasonable measures and steps to the end that the intended public assembly shall be conducted peacefully in accordance with the terms of the permit. These shall include but not be limited to the following: (a) To inform the participants of their responsibility under the permit;
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(b) To police the ranks of the demonstrators in order to prevent nondemonstrators from disrupting the lawful activities of the public assembly; (c) To confer with local government officials concerned and law enforcers to the end that the public assembly may be held peacefully; (d) To see to it that the public assembly undertaken shall not go beyond the time stated in the permit; and (e) To take positive steps that demonstrators do not molest any person or do any act unduly interfering with the rights of other persons not participating in the public assembly. Sec. 9. Non-interference by law enforcement authorities. Law enforcement agencies shall not interfere with the holding of a public assembly. However, to adequately ensure public safety, a law enforcement contingent under the command of a responsible police officer may be detailed and stationed in a place at least one hundred (100) meters away from the area of activity ready to maintain peace and order at all times. Sec. 10. Police assistance when requested. It shall be imperative for law enforcement agencies, when their assistance is requested by the leaders or organizers, to perform their duties always mindful that their responsibility to provide proper protection to those exercising their right peaceably to assemble and the freedom of expression is primordial. Towards this end, law enforcement agencies shall observe the following guidelines: (a) Members of the law enforcement contingent who deal with the demonstrators shall be in complete uniform with their nameplates and units to which they belong displayed prominently on the front and dorsal parts of their uniform and must observe the policy of "maximum tolerance" as herein defined; (b) The members of the law enforcement contingent shall not carry any kind of firearms but may be equipped with baton or riot sticks, shields, crash helmets with visor, gas masks, boots or ankle high shoes with shin guards;

(c) Tear gas, smoke grenades, water cannons, or any similar anti-riot device shall not be used unless the public assembly is attended by actual violence or serious threats of violence, or deliberate destruction of property. Sec. 11. Dispersal of public assembly with permit. No public assembly with a permit shall be dispersed. However, when an assembly becomes violent, the police may disperse such public assembly as follows: (a) At the first sign of impending violence, the ranking officer of the law enforcement contingent shall call the attention of the leaders of the public assembly and ask the latter to prevent any possible disturbance; (b) If actual violence starts to a point where rocks or other harmful objects from the participants are thrown at the police or at the nonparticipants, or at any property causing damage to such property, the ranking officer of the law enforcement contingent shall audibly warn the participants that if the disturbance persists, the public assembly will be dispersed; (c) If the violence or disturbance prevailing as stated in the preceding subparagraph should not stop or abate, the ranking officer of the law enforcement contingent shall audibly issue a warning to the participants of the public assembly, and after allowing a reasonable period of time to lapse, shall immediately order it to forthwith disperse; (d) No arrest of any leader, organizer or participant shall also be made during the public assembly unless he violates during the assembly a law, statute, ordinance or any provision of this Act. Such arrest shall be governed by Article 125 of the Revised Penal Code, as amended; (e) Isolated acts or incidents of disorder or breach of the peace during the public assembly shall not constitute a ground for dispersal. Sec. 12. Dispersal of public assembly without permit. When the public assembly is held without a permit where a permit is required, the said public assembly may be peacefully dispersed.

Sec. 13. Prohibited acts. The following shall constitute violations of the Act: (a) The holding of any public assembly as defined in this Act by any leader or organizer without having first secured that written permit where a permit is required from the office concerned, or the use of such permit for such purposes in any place other than those set out in said permit: Provided, however, That no person can be punished or held criminally liable for participating in or attending an otherwise peaceful assembly; (b) Arbitrary and unjustified denial or modification of a permit in violation of the provisions of this Act by the mayor or any other official acting in his behalf; (c) The unjustified and arbitrary refusal to accept or acknowledge receipt of the application for a permit by the mayor or any official acting in his behalf; (d) Obstructing, impeding, disrupting or otherwise denying the exercise of the right to peaceful assembly; (e) The unnecessary firing of firearms by a member of any law enforcement agency or any person to disperse the public assembly; (f) Acts in violation of Section 10 hereof; (g) Acts described hereunder if committed within one hundred (100) meters from the area of activity of the public assembly or on the occasion thereof: 1. the carrying of a deadly or offensive weapon or device such as firearm, pillbox, bomb, and the like; 2. the carrying of a bladed weapon and the like; 3. the malicious burning of any object in the streets or thoroughfares; 4. the carrying of firearms by members of the law enforcement unit; 5. the interfering with or intentionally disturbing the holding of a public

assembly by the use of a motor vehicle, its horns and loud sound systems. Sec. 14. Penalties. Any person found guilty and convicted of any of the prohibited acts defined in the immediately preceding section shall be punished as follows: (a) violation of subparagraph (a) shall be punished by imprisonment of one month and one day to six months; (b) violations of subparagraphs (b), (c), (d), (e), (f), and item 4, subparagraph (g) shall be punished by imprisonment of six months and one day to six years; (c) violation of item 1, subparagraph (g) shall be punished by imprisonment of six months and one day to six years without prejudice to prosecution under Presidential Decree No. 1866; (d) violations of item 2, item 3, or item 5 of subparagraph (g) shall be punished by imprisonment of one day to thirty days. Sec. 15. Freedom parks. Every city and municipality in the country shall within six months after the effectivity of this Act establish or designate at least one suitable "freedom park" or mall in their respective jurisdictions which, as far as practicable, shall be centrally located within the poblacion where demonstrations and meetings may be held at any time without the need of any prior permit. In the cities and municipalities of Metropolitan Manila, the respective mayors shall establish the freedom parks within the period of six months from the effectivity this Act. Sec. 16. Constitutionality. Should any provision of this Act be declared invalid or unconstitutional, the validity or constitutionality of the other provisions shall not be affected thereby. Sec. 17. Repealing clause. All laws, decrees, letters of instructions, resolutions, orders, ordinances or parts thereof which are inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly.

Sec. 18. Effectivity. This Act shall take effect upon its approval. Approved, October 22, 1985. CPR, on the other hand, is a policy set forth in a press release by Malacaang dated September 21, 2005, shown in Annex "A" to the Petition in G.R. No. 169848, thus: Malacaang Official Manila, Philippines NEWS Release No. 2 September 21, 2005 STATEMENT OF EXECUTIVE SECRETARY EDUARDO ERMITA On Unlawful Mass Actions In view of intelligence reports pointing to credible plans of antigovernment groups to inflame the political situation, sow disorder and incite people against the duly constituted authorities, we have instructed the PNP as well as the local government units to strictly enforce a "no permit, no rally" policy, disperse groups that run afoul of this standard and arrest all persons violating the laws of the land as well as ordinances on the proper conduct of mass actions and demonstrations. The rule of calibrated preemptive response is now in force, in lieu of maximum tolerance. The authorities will not stand aside while those with ill intent are herding a witting or unwitting mass of people and inciting them into actions that are inimical to public order, and the peace of mind of the national community. Unlawful mass actions will be dispersed. The majority of law-abiding citizens have the right to be protected by a vigilant and proactive government. We appeal to the detractors of the government to engage in lawful and peaceful conduct befitting of a democratic society. The Presidents call for unity and reconciliation stands, based on the

rule of law. Petitioners Bayan, et al., contend that Batas Pambansa No. 880 is clearly a violation of the Constitution and the International Covenant on Civil and Political Rights and other human rights treaties of which the Philippines is a signatory.5 They argue that B.P. No. 880 requires a permit before one can stage a public assembly regardless of the presence or absence of a clear and present danger. It also curtails the choice of venue and is thus repugnant to the freedom of expression clause as the time and place of a public assembly form part of the message for which the expression is sought. Furthermore, it is not content-neutral as it does not apply to mass actions in support of the government. The words "lawful cause," "opinion," "protesting or influencing" suggest the exposition of some cause not espoused by the government. Also, the phrase "maximum tolerance" shows that the law applies to assemblies against the government because they are being tolerated. As a content-based legislation, it cannot pass the strict scrutiny test. Petitioners Jess del Prado, et al., in turn, argue that B.P. No. 880 is unconstitutional as it is a curtailment of the right to peacefully assemble and petition for redress of grievances because it puts a condition for the valid exercise of that right. It also characterizes public assemblies without a permit as illegal and penalizes them and allows their dispersal. Thus, its provisions are not mere regulations but are actually prohibitions. Furthermore, the law delegates powers to the Mayor without providing clear standards. The two standards stated in the laws (clear and present danger and imminent and grave danger) are inconsistent. Regarding the CPR policy, it is void for being an ultra vires act that alters the standard of maximum tolerance set forth in B.P. No. 880, aside from being void for being vague and for lack of publication. Finally, petitioners KMU, et al., argue that the Constitution sets no limits on the right to assembly and therefore B.P. No. 880 cannot put the prior requirement of securing a permit. And even assuming that the legislature can set limits to this right, the limits provided are

unreasonable: First, allowing the Mayor to deny the permit on clear and convincing evidence of a clear and present danger is too comprehensive. Second, the five-day requirement to apply for a permit is too long as certain events require instant public assembly, otherwise interest on the issue would possibly wane. As to the CPR policy, they argue that it is preemptive, that the government takes action even before the rallyists can perform their act, and that no law, ordinance or executive order supports the policy. Furthermore, it contravenes the maximum tolerance policy of B.P. No. 880 and violates the Constitution as it causes a chilling effect on the exercise by the people of the right to peaceably assemble. Respondents in G.R. No. 169838 are Eduardo Ermita, as Executive Secretary, Manila City Mayor Lito Atienza, Chief, of the Philippine National Police (PNP) Gen. Arturo Lomibao, National Capital Region Police Office (NCRPO) Chief, PNP Maj. Gen. Vidal Querol, and Manila Police District (MPD) Chief Gen. Pedro Bulaong. Respondents in G.R. No. 169848 are Eduardo Ermita as Executive Secretary and in his personal capacity; Angelo Reyes, as Secretary of the Interior and Local Governments; Arturo Lomibao, as Chief Vidal Querol, as Chief, NCRPO; Pedro Bulaong, as Chief, MPD, and all other public officers and private individuals acting under their control, supervision and instruction. Respondents in G.R. No. 169881 are the Honorable Executive Secretary, PNP Director General Arturo Lomibao, the Honorable Mayor Joselito Atienza, and PNP MPD Chief Pedro Bulaong. Respondents argue that: 1. Petitioners have no standing because they have not presented evidence that they had been "injured, arrested or detained because of the CPR," and that "those arrested stand to be charged with violating Batas Pambansa [No.] 880 and other offenses." 2. Neither B.P. No. 880 nor CPR is void on its face. Petitioners cannot honestly claim that the time, place and manner regulation embodied in B.P. No. 880 violates the three-pronged test for such a measure, to wit: (a) B.P. No. 880 is content-neutral, i.e., it has no

reference to content of regulated speech; (b) B.P. No. 880 is narrowly tailored to serve a significant governmental interest, i.e., the interest cannot be equally well served by a means that is less intrusive of free speech interests; and (c) B.P. No. 880 leaves open alternative channels for communication of the information.6 3. B.P. No. 880 is content-neutral as seen from the text of the law. Section 5 requires the statement of the public assemblys time, place and manner of conduct. It entails traffic re-routing to prevent grave public inconvenience and serious or undue interference in the free flow of commerce and trade. Furthermore, nothing in B.P. No. 880 authorizes the denial of a permit on the basis of a rallys program content or the statements of the speakers therein, except under the constitutional precept of the "clear and present danger test." The status of B.P. No. 880 as a content-neutral regulation has been recognized in Osmea v. Comelec.7 4. Adiong v. Comelec8 held that B.P. No. 880 is a content-neutral regulation of the time, place and manner of holding public assemblies and the law passes the test for such regulation, namely, these regulations need only a substantial governmental interest to support them. 5. Sangalang v. Intermediate Appellate Court9 held that a local chief executive has the authority to exercise police power to meet "the demands of the common good in terms of traffic decongestion and public convenience." Furthermore, the discretion given to the mayor is narrowly circumscribed by Sections 5 (d), and 6 (a), (b), (c), (d), (e), 13 and 15 of the law. 6. The standards set forth in the law are not inconsistent. "Clear and convincing evidence that the public assembly will create a clear and present danger to public order, public safety, public convenience, public morals or public health" and "imminent and grave danger of a substantive evil" both express the meaning of the "clear and present danger test."10 7. CPR is simply the responsible and judicious use of means allowed by existing laws and ordinances to protect public interest and restore public order. Thus, it is not accurate to call it a new rule but rather it is

a more pro-active and dynamic enforcement of existing laws, regulations and ordinances to prevent chaos in the streets. It does not replace the rule of maximum tolerance in B.P. No. 880. Respondent Mayor Joselito Atienza, for his part, submitted in his Comment that the petition in G.R. No. 169838 should be dismissed on the ground that Republic Act No. 7160 gives the Mayor power to deny a permit independently of B.P. No. 880; that his denials of permits were under the "clear and present danger" rule as there was a clamor to stop rallies that disrupt the economy and to protect the lives of other people; that J. B. L. Reyes v. Bagatsing,11 Primicias v. Fugoso,12 and Jacinto v. CA,13 have affirmed the constitutionality of requiring a permit; that the permit is for the use of a public place and not for the exercise of rights; and that B.P. No. 880 is not a contentbased regulation because it covers all rallies. The petitions were ordered consolidated on February 14, 2006. After the submission of all the Comments, the Court set the cases for oral arguments on April 4, 2006,14 stating the principal issues, as follows: 1. On the constitutionality of Batas Pambansa No. 880, specifically Sections 4, 5, 6, 12 13(a) and 14(a) thereof, and Republic Act No. 7160: (a) Are these content-neutral or content-based regulations? (b) Are they void on grounds of overbreadth or vagueness? (c) Do they constitute prior restraint? (d) Are they undue delegations of powers to Mayors? (e) Do they violate international human rights treaties and the Universal Declaration of Human Rights? 2. On the constitutionality and legality of the policy of Calibrated Preemptive Response (CPR): (a) Is the policy void on its face or due to vagueness? (b) Is it void for lack of publication?

(c) Is the policy of CPR void as applied to the rallies of September 26 and October 4, 5 and 6, 2005? During the course of the oral arguments, the following developments took place and were approved and/or noted by the Court: 1. Petitioners, in the interest of a speedy resolution of the petitions, withdrew the portions of their petitions raising factual issues, particularly those raising the issue of whether B.P. No. 880 and/or CPR is void as applied to the rallies of September 20, October 4, 5 and 6, 2005. 2. The Solicitor General agreed with the observation of the Chief Justice that CPR should no longer be used as a legal term inasmuch as, according to respondents, it was merely a "catchword" intended to clarify what was thought to be a misunderstanding of the maximum tolerance policy set forth in B.P. No. 880 and that, as stated in the affidavit executed by Executive Secretary Eduardo Ermita and submitted to the Ombudsman, it does not replace B.P. No. 880 and the maximum tolerance policy embodied in that law. The Court will now proceed to address the principal issues, taking into account the foregoing developments. Petitioners standing cannot be seriously challenged. Their right as citizens to engage in peaceful assembly and exercise the right of petition, as guaranteed by the Constitution, is directly affected by B.P. No. 880 which requires a permit for all who would publicly assemble in the nations streets and parks. They have, in fact, purposely engaged in public assemblies without the required permits to press their claim that no such permit can be validly required without violating the Constitutional guarantee. Respondents, on the other hand, have challenged such action as contrary to law and dispersed the public assemblies held without the permit. Section 4 of Article III of the Constitution provides: Sec. 4. 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.

The first point to mark is that the right to peaceably assemble and petition for redress of grievances is, together with freedom of speech, of expression, and of the press, a right that enjoys primacy in the realm of constitutional protection. For these rights constitute the very basis of a functional democratic polity, without which all the other rights would be meaningless and unprotected. As stated in Jacinto v. CA,15 the Court, as early as the onset of this century, in U.S. v. Apurado,16 already upheld the right to assembly and petition, as follows: There is no question as to the petitioners rights to peaceful assembly to petition the government for a redress of grievances and, for that matter, to organize or form associations for purposes not contrary to law, as well as to engage in peaceful concerted activities. These rights are guaranteed by no less than the Constitution, particularly Sections 4 and 8 of the Bill of Rights, Section 2(5) of Article IX, and Section 3 of Article XIII. Jurisprudence abounds with hallowed pronouncements defending and promoting the peoples exercise of these rights. As early as the onset of this century, this Court in U.S. vs. Apurado, already upheld the right to assembly and petition and even went as far as to acknowledge: "It is rather to be expected that more or less disorder will mark the public assembly of the people to protest against grievances whether real or imaginary, because on such occasions feeling is always wrought to a high pitch of excitement, and the greater, the grievance and the more intense the feeling, the less perfect, as a rule will be the disciplinary control of the leaders over their irresponsible followers. But if the prosecution be permitted to seize upon every instance of such disorderly conduct by individual members of a crowd as an excuse to characterize the assembly as a seditious and tumultuous rising against the authorities, then the right to assemble and to petition for redress of grievances would become a delusion and a snare and the attempt to exercise it on the most righteous occasion and in the most peaceable manner would expose all those who took part therein to the severest and most unmerited punishment, if the purposes which they sought to attain did not happen to be pleasing to the prosecuting authorities. If instances of disorderly conduct occur on such occasions, the guilty individuals should be sought out and punished therefor, but the utmost discretion must be exercised in

drawing the line between disorderly and seditious conduct and between an essentially peaceable assembly and a tumultuous uprising." Again, in Primicias v. Fugoso,17 the Court likewise sustained the primacy of freedom of speech and to assembly and petition over comfort and convenience in the use of streets and parks. Next, however, it must be remembered that the right, while sacrosanct, is not absolute. In Primicias, this Court said: The right to freedom of speech, and to peacefully assemble and petition the government for redress of grievances, are fundamental personal rights of the people recognized and guaranteed by the constitutions of democratic countries. But it is a settled principle growing out of the nature of well-ordered civil societies that the exercise of those rights is not absolute for it may be so regulated that it shall not be injurious to the equal enjoyment of others having equal rights, nor injurious to the rights of the community or society. The power to regulate the exercise of such and other constitutional rights is termed the sovereign "police power," which is the power to prescribe regulations, to promote the health, morals, peace, education, good order or safety, and general welfare of the people. This sovereign police power is exercised by the government through its legislative branch by the enactment of laws regulating those and other constitutional and civil rights, and it may be delegated to political subdivisions, such as towns, municipalities and cities by authorizing their legislative bodies called municipal and city councils to enact ordinances for the purpose.18 Reyes v. Bagatsing19 further expounded on the right and its limits, as follows: 1. It is thus clear that the Court is called upon to protect the exercise of the cognate rights to free speech and peaceful assembly, arising from the denial of a permit. The Constitution is quite explicit: "No law shall be passed abridging the freedom of speech, or of the press, or the right of the people peaceably to assemble and petition the Government for redress of grievances." Free speech, like free press, may be identified with the liberty to discuss publicly and truthfully any

matter of public concern without censorship or punishment. There is to be then no previous restraint on the communication of views or subsequent liability whether in libel suits, prosecution for sedition, or action for damages, or contempt proceedings unless there be a "clear and present danger of a substantive evil that [the State] has a right to prevent." Freedom of assembly connotes the right of the people to meet peaceably for consultation and discussion of matters of public concern. It is entitled to be accorded the utmost deference and respect. It is not to be limited, much less denied, except on a showing, as is the case with freedom of expression, of a clear and present danger of a substantive evil that the state has a right to prevent. Even prior to the 1935 Constitution, Justice Malcolm had occasion to stress that it is a necessary consequence of our republican institutions and complements the right of free speech. To paraphrase the opinion of Justice Rutledge, speaking for the majority of the American Supreme Court in Thomas v. Collins, it was not by accident or coincidence that the rights to freedom of speech and of the press were coupled in a single guarantee with the rights of the people peaceably to assemble and to petition the government for redress of grievances. All these rights, while not identical, are inseparable. In every case, therefore, where there is a limitation placed on the exercise of this right, the judiciary is called upon to examine the effects of the challenged governmental actuation. The sole justification for a limitation on the exercise of this right, so fundamental to the maintenance of democratic institutions, is the danger, of a character both grave and imminent, of a serious evil to public safety, public morals, public health, or any other legitimate public interest. 2. Nowhere is the rationale that underlies the freedom of expression and peaceable assembly better expressed than in this excerpt from an opinion of Justice Frankfurter: "It must never be forgotten, however, that the Bill of Rights was the child of the Enlightenment. Back of the guaranty of free speech lay faith in the power of an appeal to reason by all the peaceful means for gaining access to the mind. It was in order to avert force and explosions due to restrictions upon rational modes of communication that the guaranty of free speech was given a generous scope. But utterance in a context of violence can lose its significance as an appeal to reason and become part of an instrument of force. Such utterance was not meant to be

sheltered by the Constitution." What was rightfully stressed is the abandonment of reason, the utterance, whether verbal or printed, being in a context of violence. It must always be remembered that this right likewise provides for a safety valve, allowing parties the opportunity to give vent to their views, even if contrary to the prevailing climate of opinion. For if the peaceful means of communication cannot be availed of, resort to non-peaceful means may be the only alternative. Nor is this the sole reason for the expression of dissent. It means more than just the right to be heard of the person who feels aggrieved or who is dissatisfied with things as they are. Its value may lie in the fact that there may be something worth hearing from the dissenter. That is to ensure a true ferment of ideas. There are, of course, well-defined limits. What is guaranteed is peaceable assembly. One may not advocate disorder in the name of protest, much less preach rebellion under the cloak of dissent. The Constitution frowns on disorder or tumult attending a rally or assembly. Resort to force is ruled out and outbreaks of violence to be avoided. The utmost calm though is not required. As pointed out in an early Philippine case, penned in 1907 to be precise, United States v. Apurado: "It is rather to be expected that more or less disorder will mark the public assembly of the people to protest against grievances whether real or imaginary, because on such occasions feeling is always wrought to a high pitch of excitement, and the greater the grievance and the more intense the feeling, the less perfect, as a rule, will be the disciplinary control of the leaders over their irresponsible followers." It bears repeating that for the constitutional right to be invoked, riotous conduct, injury to property, and acts of vandalism must be avoided. To give free rein to ones destructive urges is to call for condemnation. It is to make a mockery of the high estate occupied by intellectual liberty in our scheme of values. There can be no legal objection, absent the existence of a clear and present danger of a substantive evil, on the choice of Luneta as the place where the peace rally would start. The Philippines is committed to the view expressed in the plurality opinion, of 1939 vintage, of Justice Roberts in Hague v. CIO: "Whenever the title of streets and parks may rest, they have immemorially been held in trust for the use of the public and, time out of mind, have been used for purposes of assembly, communicating thoughts between citizens, and discussing public questions. Such use of the streets and public places has, from

ancient times, been a part of the privileges, immunities, rights and liberties of citizens. The privilege of a citizen of the United States to use the streets and parks for communication of views on national questions may be regulated in the interest of all; it is not absolute, but relative, and must be exercised in subordination to the general comfort and convenience, and in consonance with peace and good order; but must not, in the guise of regulation, be abridged or denied." The above excerpt was quoted with approval in Primicias v. Fugoso. Primicias made explicit what was implicit in Municipality of Cavite v. Rojas, a 1915 decision, where this Court categorically affirmed that plazas or parks and streets are outside the commerce of man and thus nullified a contract that leased Plaza Soledad of plaintiffmunicipality. Reference was made to such plaza "being a promenade for public use," which certainly is not the only purpose that it could serve. To repeat, there can be no valid reason why a permit should not be granted for the proposed march and rally starting from a public park that is the Luneta. 4. Neither can there be any valid objection to the use of the streets to the gates of the US embassy, hardly two blocks away at the Roxas Boulevard. Primicias v. Fugoso has resolved any lurking doubt on the matter. In holding that the then Mayor Fugoso of the City of Manila should grant a permit for a public meeting at Plaza Miranda in Quiapo, this Court categorically declared: "Our conclusion finds support in the decision in the case of Willis Cox v. State of New Hampshire, 312 U.S., 569. In that case, the statute of New Hampshire P.L. chap. 145, section 2, providing that no parade or procession upon any ground abutting thereon, shall be permitted unless a special license therefor shall first be obtained from the selectmen of the town or from licensing committee, was construed by the Supreme Court of New Hampshire as not conferring upon the licensing board unfettered discretion to refuse to grant the license, and held valid. And the Supreme Court of the United States, in its decision (1941) penned by Chief Justice Hughes affirming the judgment of the State Supreme Court, held that a statute requiring persons using the public streets for a parade or procession to procure a special license therefor from the local authorities is not an unconstitutional abridgment of the rights of assembly or of freedom of speech and press, where, as the statute is construed by the state courts, the licensing authorities are strictly limited, in the issuance of

licenses, to a consideration of the time, place, and manner of the parade or procession, with a view to conserving the public convenience and of affording an opportunity to provide proper policing, and are not invested with arbitrary discretion to issue or refuse license, * * *. "Nor should the point made by Chief Justice Hughes in a subsequent portion of the opinion be ignored: "Civil liberties, as guaranteed by the Constitution, imply the existence of an organized society maintaining public order without which liberty itself would be lost in the excesses of unrestricted abuses. The authority of a municipality to impose regulations in order to assure the safety and convenience of the people in the use of public highways has never been regarded as inconsistent with civil liberties but rather as one of the means of safeguarding the good order upon which they ultimately depend. The control of travel on the streets of cities is the most familiar illustration of this recognition of social need. Where a restriction of the use of highways in that relation is designed to promote the public convenience in the interest of all, it cannot be disregarded by the attempted exercise of some civil right which in other circumstances would be entitled to protection." xxx 6. x x x The principle under American doctrines was given utterance by Chief Justice Hughes in these words: "The question, if the rights of free speech and peaceable assembly are to be preserved, is not as to the auspices under which the meeting is 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." There could be danger to public peace and safety if such a gathering were marked by turbulence. That would deprive it of its peaceful character. Even then, only the guilty parties should be held accountable. It is true that the licensing official, here respondent Mayor, is not devoid of discretion in determining whether or not a permit would be granted. It is not, however, unfettered discretion. While prudence requires that there be a realistic appraisal not of what may possibly occur but of what may probably occur, given all the relevant circumstances, still the assumption especially so where the assembly is scheduled for a specific public place is that the permit must be for the assembly being held there. The exercise of such a right, in the language of Justice Roberts, speaking for the

American Supreme Court, is not to be "abridged on the plea that it may be exercised in some other place." xxx 8. By way of a summary. The applicants for a permit to hold an assembly should inform the licensing authority of the date, the public place where and the time when it will take place. If it were a private place, only the consent of the owner or the one entitled to its legal possession is required. Such application should be filed well ahead in time to enable the public official concerned to appraise whether there may be valid objections to the grant of the permit or to its grant but at another public place. It is an indispensable condition to such refusal or modification that the clear and present danger test be the standard for the decision reached. If he is of the view that there is such an imminent and grave danger of a substantive evil, the applicants must be heard on the matter. Thereafter, his decision, whether favorable or adverse, must be transmitted to them at the earliest opportunity. Thus if so minded, they can have recourse to the proper judicial authority. Free speech and peaceable assembly, along with the other intellectual freedoms, are highly ranked in our scheme of constitutional values. It cannot be too strongly stressed that on the judiciary, -- even more so than on the other departments rests the grave and delicate responsibility of assuring respect for and deference to such preferred rights. No verbal formula, no sanctifying phrase can, of course, dispense with what has been so felicitiously termed by Justice Holmes "as the sovereign prerogative of judgment." Nonetheless, the presumption must be to incline the weight of the scales of justice on the side of such rights, enjoying as they do precedence and primacy. x x x. B.P. No. 880 was enacted after this Court rendered its decision in Reyes. The provisions of B.P. No. 880 practically codify the ruling in Reyes: Reyes v. Bagatsing (G.R. No. L-65366, November 9, 1983, B.P. No. 880

Sec. 4. Permit when requ A written permit shall be persons to organize and

125 SCRA 553, 569) 8. By way of a summary. The applicants for a permit to hold an assembly should inform the licensing authority of the date, the public place where and the time when it will take place. If it were a private place, only the consent of the owner or the one entitled to its legal possession is required. Such application should be filed well ahead in time to enable the public official concerned to appraise whether there may be valid objections to the grant of the permit or to its grant but at another public place. It is an indispensable condition to such refusal or modification that the clear and present danger test be the standard for the decision reached. If he is of the view that there is such an imminent and grave danger of a substantive evil, the applicants must be heard on the matter. Thereafter, his decision, whether favorable or adverse, must be transmitted to them at the earliest opportunity. Thus if so minded, they can have recourse to the proper judicial authority.

public place. However, no public assembly shall be park duly established by l property, in which case on the one entitled to its lega the campus of a gover educational institution whic and regulations of said ed meetings or rallies held d period as provided for by Act.

Sec. 5. Application require permit shall comply with th

(a) The applications shall the names of the leaders such public assembly; t thereof, and place or stree activity; and the prob participating, the transpo systems to be used.

(b) The application shal responsibility of applicant u

(c) The application shall b mayor of the city or munici intended activity is to be days before the scheduled

(d) Upon receipt of the ap acknowledged in writing municipal mayor shall cau be posted at a conspic municipal building. Sec. 6. Action to be taken

(a) It shall be the duty of th in his behalf to issue or g

clear and convincing evide will create a clear and pr public safety, public con public health.

(b) The mayor or any offi act on the application with the date the application permit shall be deemed gr the mayor or any official accept the application for a be posted by the applicant of the mayor and shall be d

(c) If the mayor is of the vi grave danger of a substan or modification of the p inform the applicant who m

(d) The action on the pe served on the applica[nt] w

(e) If the mayor or any offic the application or modifi permit, the applicant may appropriate court of law.

(f) In case suit is brought Court, the Municipal Trial Trial Court, the Regional T Appellate Court, its decisi appropriate court within receipt of the same. No appeal shall be required permit or modifying it i applicant shall be immedia

(g) All cases filed in cour decided within twenty-four Cases filed hereunder sha the executive judge for dis

the next in rank.

(h) In all cases, any deci Supreme Court. (i) Telegraphic appeals to are hereby allowed. It is very clear, therefore, that B.P. No. 880 is not an absolute ban of public assemblies but a restriction that simply regulates the time, place and manner of the assemblies. This was adverted to in Osmea v. Comelec,20 where the Court referred to it as a "contentneutral" regulation of the time, place, and manner of holding public assemblies.21 A fair and impartial reading of B.P. No. 880 thus readily shows that it refers to all kinds of public assemblies22 that would use public places. The reference to "lawful cause" does not make it content-based because assemblies really have to be for lawful causes, otherwise they would not be "peaceable" and entitled to protection. Neither are the words "opinion," "protesting" and "influencing" in the definition of public assembly content based, since they can refer to any subject. The words "petitioning the government for redress of grievances" come from the wording of the Constitution, so its use cannot be avoided. Finally, maximum tolerance is for the protection and benefit of all rallyists and is independent of the content of the expressions in the rally. Furthermore, the permit can only be denied on the ground of clear and present danger to public order, public safety, public convenience, public morals or public health. This is a recognized exception to the exercise of the right even under the Universal Declaration of Human Rights and the International Covenant on Civil and Political Rights, thus: Universal Declaration of Human Rights Article 20 1. Everyone has the right to freedom of peaceful assembly and association.

xxx Article 29 1. Everyone has duties to the community in which alone the free and full development of his personality is possible. 2. In the exercise of his rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society. 3. These rights and freedoms may in no case be exercised contrary to the purposes and principles of the United Nations. The International Covenant on Civil and Political Rights Article 19. 1. Everyone shall have the right to hold opinions without interference. 2. Everyone shall have the right to freedom of expression; this right shall include freedom to seek, receive and impart information and ideas of all kinds, regardless of frontiers, either orally, in writing or in print, in the form of art, or through any other media of his choice. 3. The exercise of the rights provided for in paragraph 2 of this article carries with it special duties and responsibilities. It may therefore be subject to certain restrictions, but these shall only be such as are provided by law and are necessary: (a) For respect of the rights or reputations of others; (b) For the protection of national security or of public order (ordre public), or of public health or morals. Contrary to petitioners claim, the law is very clear and is nowhere vague in its provisions. "Public" does not have to be defined. Its ordinary meaning is well-known. Websters Dictionary defines it, thus:23

public, n, x x x 2a: an organized body of people x x x 3: a group of people distinguished by common interests or characteristics x x x. Not every expression of opinion is a public assembly. The law refers to "rally, demonstration, march, parade, procession or any other form of mass or concerted action held in a public place." So it does not cover any and all kinds of gatherings. Neither is the law overbroad. It regulates the exercise of the right to peaceful assembly and petition only to the extent needed to avoid a clear and present danger of the substantive evils Congress has the right to prevent. There is, likewise, no prior restraint, since the content of the speech is not relevant to the regulation. As to the delegation of powers to the mayor, the law provides a precise and sufficient standard the clear and present danger test stated in Sec. 6(a). The reference to "imminent and grave danger of a substantive evil" in Sec. 6(c) substantially means the same thing and is not an inconsistent standard. As to whether respondent Mayor has the same power independently under Republic Act No. 716024 is thus not necessary to resolve in these proceedings, and was not pursued by the parties in their arguments. Finally, for those who cannot wait, Section 15 of the law provides for an alternative forum through the creation of freedom parks where no prior permit is needed for peaceful assembly and petition at any time: Sec. 15. Freedom parks. Every city and municipality in the country shall within six months after the effectivity of this Act establish or designate at least one suitable "freedom park" or mall in their respective jurisdictions which, as far as practicable, shall be centrally located within the poblacion where demonstrations and meetings may be held at any time without the need of any prior permit. In the cities and municipalities of Metropolitan Manila, the respective mayors shall establish the freedom parks within the period of six months from the effectivity this Act. This brings up the point, however, of compliance with this provision.

The Solicitor General stated during the oral arguments that, to his knowledge, only Cebu City has declared a freedom park Fuente Osmea. That of Manila, the Sunken Gardens, has since been converted into a golf course, he added. If this is so, the degree of observance of B.P. No. 880s mandate that every city and municipality set aside a freedom park within six months from its effectivity in 1985, or 20 years ago, would be pathetic and regrettable. The matter appears to have been taken for granted amidst the swell of freedom that rose from the peaceful revolution of 1986. Considering that the existence of such freedom parks is an essential part of the laws system of regulation of the peoples exercise of their right to peacefully assemble and petition, the Court is constrained to rule that after thirty (30) days from the finality of this Decision, no prior permit may be required for the exercise of such right in any public park or plaza of a city or municipality until that city or municipality shall have complied with Section 15 of the law. For without such alternative forum, to deny the permit would in effect be to deny the right. Advance notices should, however, be given to the authorities to ensure proper coordination and orderly proceedings. The Court now comes to the matter of the CPR. As stated earlier, the Solicitor General has conceded that the use of the term should now be discontinued, since it does not mean anything other than the maximum tolerance policy set forth in B.P. No. 880. This is stated in the Affidavit of respondent Executive Secretary Eduardo Ermita, submitted by the Solicitor General, thus: 14. The truth of the matter is the policy of "calibrated preemptive response" is in consonance with the legal definition of "maximum tolerance" under Section 3 (c) of B.P. Blg. 880, which is the "highest degree of restraint that the military, police and other peacekeeping authorities shall observe during a public assembly or in the dispersal of the same." Unfortunately, however, the phrase "maximum tolerance" has acquired a different meaning over the years. Many have taken it to mean inaction on the part of law enforcers even in the

face of mayhem and serious threats to public order. More so, other felt that they need not bother secure a permit when holding rallies thinking this would be "tolerated." Clearly, the popular connotation of "maximum tolerance" has departed from its real essence under B.P. Blg. 880. 15. It should be emphasized that the policy of maximum tolerance is provided under the same law which requires all pubic assemblies to have a permit, which allows the dispersal of rallies without a permit, and which recognizes certain instances when water cannons may be used. This could only mean that "maximum tolerance" is not in conflict with a "no permit, no rally policy" or with the dispersal and use of water cannons under certain circumstances for indeed, the maximum amount of tolerance required is dependent on how peaceful or unruly a mass action is. Our law enforcers should calibrate their response based on the circumstances on the ground with the view to preempting the outbreak of violence. 16. Thus, when I stated that calibrated preemptive response is being enforced in lieu of maximum tolerance I clearly was not referring to its legal definition but to the distorted and much abused definition that it has now acquired. I only wanted to disabuse the minds of the public from the notion that law enforcers would shirk their responsibility of keeping the peace even when confronted with dangerously threatening behavior. I wanted to send a message that we would no longer be lax in enforcing the law but would henceforth follow it to the letter. Thus I said, "we have instructed the PNP as well as the local government units to strictly enforce a no permit, no rally policy . . . arrest all persons violating the laws of the land . . . unlawful mass actions will be dispersed." None of these is at loggerheads with the letter and spirit of Batas Pambansa Blg. 880. It is thus absurd for complainants to even claim that I ordered my co-respondents to violate any law.25 At any rate, the Court rules that in view of the maximum tolerance mandated by B.P. No. 880, CPR serves no valid purpose if it means the same thing as maximum tolerance and is illegal if it means something else. Accordingly, what is to be followed is and should be that mandated by the law itself, namely, maximum tolerance, which specifically means the following:

Sec. 3. Definition of terms. For purposes of this Act: xxx (c) "Maximum tolerance" means the highest degree of restraint that the military, police and other peace keeping authorities shall observe during a public assembly or in the dispersal of the same. xxx Sec. 9. Non-interference by law enforcement authorities. Law enforcement agencies shall not interfere with the holding of a public assembly. However, to adequately ensure public safety, a law enforcement contingent under the command of a responsible police officer may be detailed and stationed in a place at least one hundred (100) meters away from the area of activity ready to maintain peace and order at all times. Sec. 10. Police assistance when requested. It shall be imperative for law enforcement agencies, when their assistance is requested by the leaders or organizers, to perform their duties always mindful that their responsibility to provide proper protection to those exercising their right peaceably to assemble and the freedom of expression is primordial. Towards this end, law enforcement agencies shall observe the following guidelines:
1avvphil.net

(a) Members of the law enforcement contingent who deal with the demonstrators shall be in complete uniform with their nameplates and units to which they belong displayed prominently on the front and dorsal parts of their uniform and must observe the policy of "maximum tolerance" as herein defined; (b) The members of the law enforcement contingent shall not carry any kind of firearms but may be equipped with baton or riot sticks, shields, crash helmets with visor, gas masks, boots or ankle high shoes with shin guards; (c) Tear gas, smoke grenades, water cannons, or any similar anti-riot device shall not be used unless the public assembly is attended by actual violence or serious threats of violence, or deliberate destruction of property.

Sec. 11. Dispersal of public assembly with permit. No public assembly with a permit shall be dispersed. However, when an assembly becomes violent, the police may disperse such public assembly as follows: (a) At the first sign of impending violence, the ranking officer of the law enforcement contingent shall call the attention of the leaders of the public assembly and ask the latter to prevent any possible disturbance; (b) If actual violence starts to a point where rocks or other harmful objects from the participants are thrown at the police or at the nonparticipants, or at any property causing damage to such property, the ranking officer of the law enforcement contingent shall audibly warn the participants that if the disturbance persists, the public assembly will be dispersed; (c) If the violence or disturbance prevailing as stated in the preceding subparagraph should not stop or abate, the ranking officer of the law enforcement contingent shall audibly issue a warning to the participants of the public assembly, and after allowing a reasonable period of time to lapse, shall immediately order it to forthwith disperse; (d) No arrest of any leader, organizer or participant shall also be made during the public assembly unless he violates during the assembly a law, statute, ordinance or any provision of this Act. Such arrest shall be governed by Article 125 of the Revised Penal Code, as amended; (d) Isolated acts or incidents of disorder or breach of the peace during the public assembly shall not constitute a ground for dispersal. xxx Sec. 12. Dispersal of public assembly without permit. When the public assembly is held without a permit where a permit is required, the said public assembly may be peacefully dispersed. Sec. 13. Prohibited acts. The following shall constitute violations of the Act:

(e) Obstructing, impeding, disrupting or otherwise denying the exercise of the right to peaceful assembly; (f) The unnecessary firing of firearms by a member of any law enforcement agency or any person to disperse the public assembly; (g) Acts described hereunder if committed within one hundred (100) meters from the area of activity of the public assembly or on the occasion thereof: xxx 4. the carrying of firearms by members of the law enforcement unit; 5. the interfering with or intentionally disturbing the holding of a public assembly by the use of a motor vehicle, its horns and loud sound systems. Furthermore, there is need to address the situation adverted to by petitioners where mayors do not act on applications for a permit and when the police demand a permit and the rallyists could not produce one, the rally is immediately dispersed. In such a situation, as a necessary consequence and part of maximum tolerance, rallyists who can show the police an application duly filed on a given date can, after two days from said date, rally in accordance with their application without the need to show a permit, the grant of the permit being then presumed under the law, and it will be the burden of the authorities to show that there has been a denial of the application, in which case the rally may be peacefully dispersed following the procedure of maximum tolerance prescribed by the law. In sum, this Court reiterates its basic policy of upholding the fundamental rights of our people, especially freedom of expression and freedom of assembly. In several policy addresses, Chief Justice Artemio V. Panganiban has repeatedly vowed to uphold the liberty of our people and to nurture their prosperity. He said that "in cases involving liberty, the scales of justice should weigh heavily against the government and in favor of the poor, the oppressed, the marginalized, the dispossessed and the weak. Indeed, laws and actions that restrict fundamental rights come to the courts with a heavy presumption against their validity. These laws and actions are

subjected to heightened scrutiny."26 For this reason, the so-called calibrated preemptive response policy has no place in our legal firmament and must be struck down as a darkness that shrouds freedom. It merely confuses our people and is used by some police agents to justify abuses. On the other hand, B.P. No. 880 cannot be condemned as unconstitutional; it does not curtail or unduly restrict freedoms; it merely regulates the use of public places as to the time, place and manner of assemblies. Far from being insidious, "maximum tolerance" is for the benefit of rallyists, not the government. The delegation to the mayors of the power to issue rally "permits" is valid because it is subject to the constitutionally-sound "clear and present danger" standard. In this Decision, the Court goes even one step further in safeguarding liberty by giving local governments a deadline of 30 days within which to designate specific freedom parks as provided under B.P. No. 880. If, after that period, no such parks are so identified in accordance with Section 15 of the law, all public parks and plazas of the municipality or city concerned shall in effect be deemed freedom parks; no prior permit of whatever kind shall be required to hold an assembly therein. The only requirement will be written notices to the police and the mayors office to allow proper coordination and orderly activities. WHEREFORE, the petitions are GRANTED in part, and respondents, more particularly the Secretary of the Interior and Local Governments, are DIRECTED to take all necessary steps for the immediate compliance with Section 15 of Batas Pambansa No. 880 through the establishment or designation of at least one suitable freedom park or plaza in every city and municipality of the country. After thirty (30) days from the finality of this Decision, subject to the giving of advance notices, no prior permit shall be required to exercise the right to peaceably assemble and petition in the public parks or plazas of a city or municipality that has not yet complied with Section 15 of the law. Furthermore, Calibrated Preemptive Response (CPR), insofar as it would purport to differ from or be in lieu of maximum tolerance, is NULL and VOID and respondents are ENJOINED to REFRAIN from using it and to STRICTLY OBSERVE the requirements of maximum tolerance. The petitions are DISMISSED in all other respects, and the constitutionality of Batas

Pambansa No. 880 is SUSTAINED. No costs. SO ORDERED. ADOLFO S. AZCUNA Associate Justice WE CONCUR: ARTEMIO V. PANGANIBAN Chief Justice

(On Leave) REYNATO S. PUNO LEONARDO A. QUISU Associate Justice Asscociate Justic CONSUELO YNARES-SANTIAGO ANGELINA SANDOVAL-G Associate Justice Asscociate Justic ANTONIO T. CARPIO MA. ALICIA AUSTRIA-MA Associate Justice Asscociate Justic RENATO C. CORONA CONCHITA CARPIO MO Associate Justice Asscociate Justic ROMEO J. CALLEJO, SR. DANTE O. TINGA Associate Justice Asscociate Justic MINITA V. CHICO-NAZARIO CANCIO C. GARC Associate Justice Asscociate Justic PRESBITERO J. VELASCO, JR. Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the cases were assigned to the writer of the opinion of the Court. ARTEMIO V. PANGANIBAN Chief Justice Footnotes
1

Petition for Certiorari, Mandamus and Prohibition with Prayer for Temporary Restraining Order filed by Bayan, Karapatan, Kilusang

Magbubukid Ng Pilipinas (KMP), COURAGE, GABRIELA, Fr. Jose A. Dizon, Renato Constantino, Jr., Froyel Yaneza, and Fahima Tajar.
2

Petition for Prohibition, Injunction, Restraining Order and other Just and Equitable Reliefs filed by Jess Del Prado, Wilson Fortaleza, Leody de Guzman, Pedro Pinlac, Carmelita Morante, Rasti Delizo, Paul Bangay, Marie Jo Ocampo, Lilia dela Cruz, Cristeta Ramos, Adelaida Ramos, Mary Grace Gonzales, Michael Torres, Rendo Sabusap, Precious Balute, Roxanne Magboo, Ernie Bautista, Joseph de Jesus, Margarita Escober, Djoannalyn Janier, Magdalena Sellote, Manny Quiazon, Ericson Dizon, Nenita Cruzat, Leonardo De los Reyes, Pedrito Fadrigon.
3

Petition for Certiorari, Prohibition and Mandamus with Prayer for Issuance of Restraining Order filed by 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, Gilda Sumilang, Francisco Lastrella, and Roque M. Tan.
4

Petitioner Gilda Sumilang. Petition, G.R. No. 169838, p. 29.

Citing Adiong v. Commission on Elections, 207 SCRA 712 (1992); United States v. OBrien, 391 U.S. 367, 20 L. Ed. 2d 672 (1968); see R.D. Rotunda, et al., TREATISE ON CONSTITUTIONAL LAW: SUBSTANCE AND PROCEDURE (1986) citing Clark v. Community for Creative Non-Violence, 468 U.S. 288, 104 S.Ct. 3065, 82 L.Ed. 2d 221 (1984).
7

G.R. No. 132231, March 31, 1998, 288 SCRA 447. G.R. No. 103956, March 31, 1992, 207 SCRA 712. G.R. No. 71169, August 25, 1989, 176 SCRA 719.

10

Citing Iglesia ni Cristo v. Court of Appeals, G.R. No. 119673, July 26, 1996, 259 SCRA 529.

11

G. R. No. L-65366, November 9, 1983, 125 SCRA 553. 80 Phil. 71 (1948). G.R. No. 124540, November 14, 1997. Resolution dated March 28, 2006. 346 Phil. 665-666 (1997). 7 Phil. 422 (1907). 80 Phil. 71 (1948). Ibid at 75-76 (Emphasis supplied). G.R. No. L-65366, November 9, 1983, 125 SCRA 553. G.R. No. 132231, March 31, 1998, 288 SCRA 447. Ibid, p. 478.

12

13

14

15

16

17

18

19

20

21

22

Except picketing and other concerted action in strike areas by workers and employees resulting from a labor dispute, which are governed by the Labor Code and other labor laws; political meeting or rallies held during any election campaign period, which are governed by the Election Code and other election related laws; and public assemblies in the campus of a government-owned and operated educational institution, which shall be subject to the rules and regulations of said educational institution. (Sec. 3[a] and Sec. 4 of B.P. No. 880).
23

WEBSTERS THIRD NEW INTERNATIONAL DICTIONARY OF THE ENGLISH LANGUAGE UNABRIDGED (1993 Ed)., p. 1836.
24

The Local Government Code. Specifically, Section 16 stating the general welfare clause, thus: Sec. 16. General Welfare. Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential

to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.
25

Respondents Consolidated Memorandum, pp. 30-31 (Emphasis supplied by respondents).

26

Chief Justice Artemio V. Panganiban, Liberty and Prosperity, February 15, 2006.

G.R. No. 188456

September 10, 2009

H. HARRY L. ROQUE, JR., JOEL R. BUTUYAN, ROMEL R. BAGARES, ALLAN JONES F. LARDIZABAL, GILBERT T. ANDRES, IMMACULADA D. GARCIA, ERLINDA T. MERCADO, FRANCISCO A. ALCUAZ, MA. AZUCENA P. MACEDA, and ALVIN A. PETERS, Petitioners, vs. COMMISSION ON ELECTIONS, Represented by HON. CHAIRMAN JOSE MELO, COMELEC SPECIAL BIDS and AWARDS COMMITTEE, represented by its CHAIRMAN HON. FERDINAND RAFANAN, DEPARTMENT OF BUDGET and MANAGEMENT, represented by HON. ROLANDO ANDAYA, TOTAL INFORMATION MANAGEMENT CORPORATION and SMARTMATIC INTERNATIONAL CORPORATION, Respondents. PETE QUIRINO-QUADRA, Petitioner-inIntervention. SENATE OF THE PHILIPPINES, represented by its President, JUAN PONCE ENRILE, Movant-Intervenor. DECISION VELASCO, JR., J.: In a democratic system of government, the peoples voice is sovereign. Corollarily, choosing through the ballots the men and women who are to govern the country is perhaps the highest exercise of democracy. It is thus the interest of the state to insure honest, credible and peaceful elections, where the sanctity of the votes and the secrecy of the ballots are safeguarded, where the will of the electorate is not frustrated or undermined. For when the popular will itself is subverted by election irregularities, then the insidious seeds of doubt are sown and the ideal of a peaceful and smooth transition of power is placed in jeopardy. To automate, thus breaking away from a manual system of election, has been viewed as a significant step towards clean and credible elections, unfettered by the travails of the long wait and cheating that have marked many of our electoral exercises. The Commission on Elections (Comelec), private respondents, the National Computer Center and other computer wizards are confident that nationwide automated elections can be successfully implemented. Petitioners and some skeptics in the information

technology (IT) industry have, however, their reservations, which is quite understandable. To them, the automated election system and the untested technology Comelec has chosen and set in motion are pregnant with risks and could lead to a disastrous failure of elections. Comelec, they allege, would not be up to the challenge. Cheating on a massive scale, but this time facilitated by a machine, is perceived to be a real possibility. In this petition for certiorari, prohibition and mandamus with prayer for a restraining order and/or preliminary injunction, petitioners H. Harry L. Roque, Jr., et al., suing as taxpayers and concerned citizens, seek to nullify respondent Comelecs award of the 2010 Elections Automation Project (automation project) to the joint venture of Total Information Management Corporation (TIM) and Smartmatic International Corporation (Smartmatic)1 and to permanently prohibit the Comelec, TIM and Smartmatic from signing and/or implementing the corresponding contract-award. By Resolution2 of July 14, 2009, the Court directed the respondents as well as the University of the Philippines (UP) Computer Center, National Computer Center (NCC) and Information Technology Foundation of the Philippines (Infotech, hereinafter) to submit their collective or separate comments to the petition on or before July 24, 2009. Before any of the comments could actually be filed, Atty. Pete Quirino-Quadra sought leave to intervene. In another resolution, the Court allowed the intervention and admitted the corresponding petition-in-intervention.3 On July 29, 2009, the Court heard the principal parties in oral arguments which was followed by the submission of their and the resource persons instructive, albeit clashing, memoranda. The Senate, through the Senate President, would later join the fray via a Motion for Leave to Intervene. In a Resolution of August 25, 2009, the Court admitted the Senates comment-in-intervention. From the petition, the separate comments thereon, with their respective annexes, and other pleadings, as well as from admissions during the oral arguments, the Court gathers the following facts: On December 22, 1997, Congress enacted Republic Act No. (RA)

8436 authorizing the adoption of an automated election system (AES) in the May 11, 1998 national and local elections and onwards. The 1998, 2001, and 2004 national and local polls, however, came and went but purely manual elections were still the order of the day. On January 23, 2007, the amendatory RA 93694 was passed authorizing anew the Comelec to use an AES. Of particular relevance are Sections 6 and 10 of RA 9369originally Secs. 5 and 8, respectively of RA 8436, as amendedeach defining Comelecs specific mandates insofar as automated elections are concerned. The AES was not utilized in the May 10, 2000 elections, as funds were not appropriated for that purpose by Congress and due to time constraints. RA 9369 calls for the creation of the Comelec Advisory Council5 (CAC). CAC is to recommend, among other functions, the most appropriate, applicable and cost-effective technology to be applied to the AES.6 To be created by Comelec too is the Technical Evaluation Committee (TEC)7 which is tasked to certify, through an established international certification committee, not later than three months before the elections, by categorically stating that the AES, inclusive of its hardware and software components, is operating properly and accurately based on defined and documented standards.8 In August 2008, Comelec managed to automate the regional polls in the Autonomous Region of Muslim Mindanao9 (ARMM), using direct recording electronics (DRE) technology10 in the province of Maguindanao; and the optical mark reader/recording (OMR) system, particularly the Central Count Optical Scan (CCOS),11 in the rest of ARMM.12 What scores hailed as successful automated ARMM 2008 elections paved the way for Comelec, with some prodding from senators,13 to prepare for a nationwide computerized run for the 2010 national/local polls, with the many lessons learned from the ARMM experience influencing, according to the NCC, the technology selection for the 2010 automated elections.14 Accordingly, in early March 2009, the Comelec released the Request for Proposal (RFP), also known as Terms of Reference (TOR), for the nationwide automation of the voting, counting, transmission, consolidation and canvassing of votes for the May 10, 2010 Synchronized National and Local Elections. What is referred to also

in the RFP and other contract documents as the 2010 Elections Automation Project (Automation Project) consists of three elaborate components, as follows: Component 1: Paper-Based AES.15 1-A. Election Management System (EMS); 1-B Precinct-Count Optic Scan (PCOS) 16 System and 1-C. Consolidation/Canvassing System (CCS); Component 2: Provision for Electronic Transmission of Election Results using Public Telecommunications Network; and Component 3: Overall Project Management And obviously to address the possibility of systems failure, the RFP required interested bidders to submit, among other things: a continuity plan17 and a back-up plan. 18 Under the two-envelope system designed under the RFP,19 each participating bidder shall submit, as part of its bid, an Eligibility Envelope20 that should inter alia establish the bidders eligibility to bid. On the other hand, the second envelope, or the Bid Envelope itself, shall contain two envelopes that, in turn, shall contain the technical proposal and the financial proposal, respectively.21 Subsequently, the Comelec Special Bids and Awards Committee (SBAC), earlier constituted purposely for the aforesaid project, caused the publication in different newspapers of the Invitation to Apply for Eligibility and to Bid22 for the procurement of goods and services to be used in the automation project.23 Meanwhile, Congress enacted RA 9525 appropriating some PhP 11.3 billion as supplemental budget for the May 10, 2010 automated national and local elections. Of the ten (10) invitation-responding consortia which obtained the bid documents, only seven (7) submitted sealed applications for eligibility and bids24 which, per Bid Bulletin No. 24, were to be opened on a pre-set date, following the convening of the pre-bid conference. Under the RFP, among those eligible to participate in the bidding are manufacturers, suppliers and/or distributors forming themselves into a joint venture. A joint venture is defined as a group of two or more manufacturers, suppliers and/or distributors that intend to be jointly

and severally responsible or liable for a particular contract.25 Among the submitted bids was that of the joint venture (JV) of TIM and Smartmatic, the former incorporated under the Corporation Code of the Philippines. Smartmatic, on the other hand, was organized under the laws of Barbados.26 For a stated amount, said JV proposed to undertake the whole automation project, inclusive of the delivery of 82,200 PCOS machines. After the conclusion of the eligibility evaluation process, only three consortia27 were found and thus declared as eligible. Further on, following the opening of the passing bidders Bid Envelope and evaluating the technical and financial proposals therein contained, the SBAC, per its Res. No. 09-001, s.2009, declared the above-stated bid of the JV of TIM-Smartmatic as the single complying calculated bid.28 As required by the RFP, the bid envelope contained an outline of the joint ventures back-up and continuity or contingency plans,29 in case of a systems breakdown or any such eventuality which shall result in the delay, obstruction or nonperformance of the electoral process. After declaring TIM-Smartmatic as the best complying bidder, the SBAC then directed the joint venture to undertake post-qualification screening, and its PCOS prototype machinesthe Smarmatic Auditable Electronic System (SAES) 1800to undergo end-to-end30 testing to determine compliance with the pre-set criteria. In its Memorandum of June 01, 2009, on the Subject: Systems Evaluation Consolidated Report and Status Report on the PostQualification Evaluation Procedures, the SBAC Technical Working Group (TWG) stated that it was undertaking a 4-day (May 27 to May 30, 2009) test evaluation of TIM and Smartmatics proposed PCOS project machines. Its conclusion: "The demo systems presented PASSED all tests as required in the 26-item criteria specified in the [RFP]" with 100% accuracy rating.31 The TWG also validated the eligibility, and technical and financial qualifications of the TIMSmartmatic joint venture. On June 9, 2009, Comelec, upon the recommendation of its SBAC, the CAC and other stakeholders, issued Resolution No. (Res.) 860832 authorizing the SBAC to issue, subject to well-defined conditions, the notice of award and notice to proceed in favor of the winning joint

venture. Soon after, TIM wrote Comelec expressing its desire to quit the JV partnership. In time, however, the parties were able to patch up what TIM earlier described as irreconcilable differences between partners. What followed was that TIM and Smartmatic, pursuant to the Joint Venture Agreement (JVA),33 caused the incorporation of a joint venture corporation (JVC) that would enter into a contract with the Comelec. On July 8, 2009, the Securities and Exchange Commission issued a certificate of incorporation in favor of Smartmatic TIM Corporation. Two days after, or on July 10, 2009, Comelec and Smartmatic TIM Corporation, as provider, executed a contract34 for the lease of goods and services under the contract for the contract amount of PhP 7,191,484,739.48, payable as the "Goods and Services are delivered and/or progress is made in accordance [with pre-set] Schedule of Payments."35 On the same date, a Notice to Proceed36 was sent to, and received by, Smartmatic TIM Corporation. Meanwhile, or on July 9, 2009, petitioners interposed the instant recourse which, for all intents and purposes, impugns the validity and seeks to nullify the July 10, 2009 Comelec-Smartmatic-TIM Corporation automation contract adverted to. Among others, petitioners pray that respondents be permanently enjoined from implementing the automation project on the submission that: PUBLIC RESPONDENTS COMELEC AND COMELEC-SBAC COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN AWARDING THE 2010 ELECTIONS AUTOMATION PROJECT TO PRIVATE RESPONDENTS TIM AND SMARTMATIC FOR THE FOLLOWING REASONS: x x x COMELEC DID NOT CONDUCT ANY PILOT TESTING OF THE x x x PCOS MACHINES OFFERED BY PRIVATE RESPONDENTS SMARTMATIC AND TIM, IN VIOLATION OF [RA] 8436 (AS AMENDED BY [RA] 9369) THE [PCOS] MACHINES [THUS] OFFERED BY PRIVATE RESPONDENTS x x x DO NOT SATISFY THE MINIMUM SYSTEM CAPABILITIES SET BY [RA] NO. 8436 (AS AMENDED BY [RA]

9369). PRIVATE RESPONDENTS x x x DID NOT SUBMIT THE REQUIRED DOCUMENTS DURING THE BIDDING PROCESS THAT SHOULD ESTABLISH THE DUE EXISTENCE, COMPOSITION, AND SCOPE OF THEIR JOINT VENTURE, IN VIOLATION OF THE SUPREME COURTS HOLDING IN INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES, vs. COMELEC (G.R. No. 159139, Jan. 13, 2004). THERE WAS NO VALID JOINT VENTURE AGREEMENT [JVA] BETWEEN PRIVATE RESPONDENTS SMARTMATIC AND TIM DURING THE BIDDING, IN VIOLATION OF THE SUPREME COURTS HOLDING IN INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES vs. COMELEC x x x WHICH REQUIRES A JOINT VENTURE TO INCLUDE A COPY OF ITS [JVA] DURING THE BIDDING. THE ALLEGED JOINT VENTURE COMPOSED OF PRIVATE RESPONDENTS SMARTMATIC AND TIM, DOES NOT SATISFY THE SUPREME COURTS DEFINITION OF A "JOINT VENTURE" IN INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES vs. COMELEC x x x WHICH "REQUIRES A COMMUNITY OF INTEREST IN THE PERFORMANCE OF THE SUBJECT MATTER." Filed as it was before contract signing, the petition understandably did not implead Smartmatic TIM Corporation, doubtless an indispensable party to these proceedings, an incident that did not escape Comelecs notice.37 As a preliminary counterpoint, either or both public and private respondents question the legal standing or locus standi of petitioners, noting in this regard that the petition did not even raise an issue of transcendental importance, let alone a constitutional question. As an additional point, respondents also urge the dismissal of the petition on the ground of prematurity, petitioners having failed to avail themselves of the otherwise mandatory built-in grievance mechanism under Sec. 55 in relation to Sec. 58 of RA 9184, also known as the Government Procurement Reform Act, as shall be discussed shortly.

PROCEDURAL GROUNDS The Court is not disposed to dismiss the petition on procedural grounds advanced by respondents. Locus Standi and Prematurity It is true, as postulated, that to have standing, one must, as a rule, establish having suffered some actual or threatened injury as a result of the alleged illegal government conduct; that the injury is fairly traceable to the challenged action; and that the injury is likely to be redressed by a favorable action.38 The prescription on standing, however, is a matter of procedure. Hence, it may be relaxed, as the Court has often relaxed the rule for non-traditional plaintiffs, like ordinary citizens and taxpayers, when the public interest so requires, such as when the matter is of transcendental importance, of overarching significance to society, or of paramount public interest.39 As we wrote in Chavez v. PCGG,40 where issues of public importance are presented, there is no necessity to show that the suitor has experienced or is in actual danger of suffering direct and personal injury as the requisite injury is assumed. Petitioners counsel, when queried, hedged on what specific constitutional proscriptions or concepts had been infringed by the award of the subject automation project to Smartmatic TIM Corporation, although he was heard to say that "our objection to the system is anchored on the Constitution itself a violation [sic] of secrecy of voting and the sanctity of the ballot."41 Petitioners also depicted the covering automation contract as constituting an abdication by the Comelec of its election-related mandate under the Constitution, which is to enforce and administer all laws relative to the conduct of elections. Worse still, according to the petitioners, the abdication, with its anti-dummy dimension, is in favor of a foreign corporation that will be providing the hardware and software requirements.42 And when pressed further, petitioners came out with the observation that, owing in part to the sheer length of the ballot, the PCOS would not comply with Art. V, Sec. 2 of the Constitution43 prescribing secrecy of voting and sanctity of the ballot.44 There is no doubt in our mind, however, about the compelling

significance and the transcending public importance of the one issue underpinning this petition: the successand the far-reaching grim implications of the failureof the nationwide automation project that will be implemented via the challenged automation contract. The doctrinal formulation may vary, but the bottom line is that the Court may except a particular case from the operations of its rules when the demands of justice so require.45 Put a bit differently, rules of procedure are merely tools designed to facilitate the attainment of justice.46 Accordingly, technicalities and procedural barriers should not be allowed to stand in the way, if the ends of justice would not be subserved by a rigid adherence to the rules of procedure.47 This postulate on procedural technicalities applies to matters of locus standi and the presently invoked principle of hierarchy of courts, which discourages direct resort to the Court if the desired redress is within the competence of lower courts to grant. The policy on the hierarchy of courts, which petitioners indeed failed to observe, is not an iron-clad rule. For indeed the Court has full discretionary power to take cognizance and assume jurisdiction of special civil actions for certiorari and mandamus filed directly with it for exceptionally compelling reasons48 or if warranted by the nature of the issues clearly and specifically raised in the petition.49 The exceptions that justify a deviation from the policy on hierarchy appear to obtain under the premises. The Court will for the nonce thus turn a blind eye to the judicial structure intended, first and foremost, to provide an orderly dispensation of justice. Hierarchy of Courts At this stage, we shall dispose of another peripheral issue before plunging into the core substantive issues tendered in this petition. Respondents contend that petitioners should have availed themselves of the otherwise mandatory protest mechanism set forth in Sections 55 and 58 of the procurement law (RA 9184) and the counterpart provisions found in its Implementing Rules and Regulations (IRR)-A before seeking judicial remedy. Insofar as relevant, Sec. 55 of RA 9184 provides that decisions of the bids and awards committee (BAC) in all stages of procurement may be

protested, via a "verified position paper," to the head of the procuring agency. On the other hand, the succeeding Sec. 58 states that court action may be resorted to only after the protest contemplated in Sec. 55 shall have been completed. Petitioners except. As argued, the requirement to comply with the protest mechanism, contrary to what may have been suggested in Infotech, is imposed on the bidders.50 Petitioners position is correct. As a matter of common sense, only a bidder is entitled to receive a notice of the protested BAC action. Only a losing bidder would be aggrieved by, and ergo would have the personality to challenge, such action. This conclusion finds adequate support from the ensuing provisions of the aforesaid IRR-A: 55.2. The verified position paper shall contain the following documents: a) The name of bidder; b) The office address of the bidder x x x. SUBSTANTIVE ISSUES We now turn to the central issues tendered in the petition which, in terms of subject matter, revolved around two concerns, viz: (1) the Joint Venture Agreement (JVA) of Smartmatic and TIM; and (2) the PCOS machines to be used. Petitioners veritably introduced another issue during the oral arguments, as amplified in their memorandum, i.e. the constitutionality and statutory flaw of the automation contract itself. The petition-in-intervention confined itself to certain features of the PCOS machines. The Joint Venture Agreement: Its Existence and Submission The issue respecting the existence and submission of the TIMSmartmatic JVA does not require an extended disquisition, as repairing to the records would readily provide a satisfactory answer. We note in fact that the petitioners do not appear to be earnestly pressing the said issue anymore, as demonstrated by their counsels practically cavalier discussion thereof during the oral argument. When reminded, for instance, of private respondents insistence on having in fact submitted their JVA dated April 23, 2009, petitioners counsel

responded as follows: "We knew your honor that there was, in fact, a joint venture agreement filed. However, because of the belated discovery that [there] were irreconcilable differences, we then made a view that this joint venture agreement was a sham, at best pro forma because it did not contain all the required stipulations in order to evidence unity of interest x x x."51 Indeed, the records belie petitioners initial posture that TIM and Smartmatic, as joint venture partners, did not include in their submitted eligibility envelope a copy of their JVA. The SBACs Post Qualification Evaluation Report (Eligibility) on TIM-Smartmatic, on page 10, shows the following entry: "Valid Joint Venture Agreement, stating among things, that the members are jointly and severally liable for the whole obligation, in case of joint venture Documents verified compliance."52 Contrary to what the petitioners posit, the duly notarized JVA, as couched, explained the nature and the limited purpose53 of the joint venture and expressly defined, among other things, the composition, scope, and the 60-40 capital structure of the aggroupment.54 The JVA also contains provisions on the management55 and division of profits.56 Article 357 of the JVA delineates the respective participations and responsibilities of the joint venture partners in the automation project. Given the foregoing perspective, the Court is at a loss to understand how petitioners can assert that the Smartmatic-TIM consortium has failed to prove its joint venture existence and/or to submit evidence as would enable the Comelec to know such items as who it is dealing with, which between the partners has control over the decisionmaking process, the amount of investment to be contributed by each partner, the parties shares in the profits and like details. Had petitioners only bothered to undertake the usual due diligence that comes with good judgment and examined the eligibility envelope of the Smartmatic-TIM joint venture, they would have discovered that their challenge to and arguments against the joint venture and its JVA have really no factual basis. It may be, as petitioners observed, that the TIM-Smartmatic joint venture remained an unincorporated aggroupment during the bid-

opening and evaluation stages. It ought to be stressed, however, that the fact of non-incorporation was without a vitiating effect on the validity of the tender offers. For the bidding ground rules, as spelled out primarily in the RFP and the clarificatory bid bulletins, does not require, for bidding purposes, that there be an incorporation of the bidding joint ventures or consortiums. In fact, Bid Bulletin Nos. 19 and 20 recognize the existence and the acceptability of proposals of unincorporated joint ventures. In response to a poser, for example, regarding the 60% Filipino ownership requirement in a joint venture arrangement, the SBAC, in its Bid Bulletin No. 22, stated: "In an unincorporated joint venture, determination of the required Filipino participation may be made by examining the terms and conditions of the [JVA] and other supporting financial documents submitted by the joint venture." (Emphasis ours.) Petitioners, to be sure, have not shown that incorporation is part of the pass/fail criteria used in determining eligibility. Petitioners have made much of the Courts ruling in Information Technology Foundation of the Philippines [Infotech] v. Comelec,58 arguing in relation thereto that the partnership of Smartmatic and TIM does not meet the Courts definition of a joint venture which requires "community of interest in the performance of the subject matter." Petitioners invocation of Infotech is utterly misplaced. Albeit Infotech and this case are both about modernizing the election process and bidding joint ventures, the relevant parallelism ends there. Cast as they are against dissimilar factual milieu, one cannot plausibly set Infotech side with and contextually apply to this case the ratio of Infotech. Suffice it to delve on the most glaring of differences. In Infotech, the winning bid pertained to the consortium of Mega Pacific, a purported joint venture. Extant records, however, do not show the formation of such joint venture, let alone its composition. To borrow from the ponencia of then Justice, later Chief Justice, Artemio Panganiban, "there is no sign whatsoever of any [JVA], consortium agreement [or] memorandum agreement x x x executed among the members of the purported consortium."59 There was in fine no evidence to show that the alleged joint venture partners agreed to constitute themselves into a single entity solidarily responsible for the entirety of the automation contract. Unlike the purported Mega Pacific consortium in Infotech, the existence in this case of the bidding joint

venture of Smarmatic and TIM is properly documented and spread all over the bid documents. And to stress, TIM and Smartmatic, in their JVA, unequivocally agreed between themselves to perform their respective undertakings. And over and beyond their commitments to each other, they undertook to incorporate, if called for by the bidding results, a JVC that shall be solidarily liable with them for any actionable breach of the automation contract. In Infotech, the Court chastised the Comelec for dealing with an entity, the full identity of which the poll body knew nothing about. Taking a cue from this holding, petitioners tag the TIM-Smartmatic JVA as flawed and as one that would leave the Comelec "hanging" for the non-inclusion, as members of the joint venture, of three IT providers. The three referred to are Jarltech International, Inc. (Jarltech), a subsidiary of Smartmatic that manufactures the Smartmatic voting machines; Dominion Voting Systems (Domino), the inventor of said PCOS machines; and 2GO Transportation System Corporation (2GO), the subcontractor responsible for the distribution of the PCOS machines throughout the country. Petitioners beef against the TIM-Smartmatic JVA is untenable. First off, the Comelec knows the very entities whom they are dealing with, which it can hold solidary liable under the automation contract, should there be contract violation. Secondly, there is no requirement under either RA 8436, as amended, or the RFP, that all the suppliers, manufacturers or distributors involved in the transaction should be part of the joint venture. On the contrary, the Instruction to Bidders as petitioners themselves admit60allows the bidder to subcontract portions of the goods or services under the automation project.61 To digress a bit, petitioners have insisted on the non-existence of a bona fide JVA between TIM and Smarmatic. Failing to gain traction for their indefensible posture, they would thrust on the Court the notion of an invalid joint venture due to the non-inclusion of more companies in the existing TIM-Smartmatic joint venture. The irony is not lost on the Court. This brings us to the twin technical issues tendered herein bearing on the PCOS machines of Smartmatic.

At its most basic, the petition ascribes grave abuse of discretion to the Comelec for, among other things, awarding the automation project in violation of RA 8436, as amended. Following their line, no pilot test of the PCOS technology Smartmatic-TIM offered has been undertaken; hence, the Comelec cannot conduct a nationwide automation of the 2010 polls using the machines thus offered. Hence, the contract award to Smartmatic-TIM with their untested PCOS machines violated RA 8436, as amended by RA 9369, which mandates that with respect to the May 2010 elections and onwards, the system procured must have been piloted in at least 12 areas referred to in Sec. 6 of RA 8436, as amended. What is more, petitioners assert, private respondents PCOS machines do not satisfy the minimum system capabilities set by the same law envisaged to ensure transparent and credible voting, counting and canvassing of votes. And as earlier narrated, petitioners would subsequently add the abdication angle in their bid to nullify the automation contract. Pilot Testing Not Necessary Disagreeing, as to be expected, private respondents maintain that there is nothing in the applicable law requiring, as a pre-requisite for the 2010 election automation project award, that the prevailing bidders automation system, the PCOS in this case, be subjected to pilot testing. Comelec echoes its co-respondents stance on pilot testing, with the added observation that nowhere in the statutory provision relied upon are the words "pilot testing" used.62 The Senates position and its supporting arguments match those of private respondents. The respondents thesis on pilot testing and the logic holding it together are well taken. There can be no argument about the phrase "pilot test" not being found in the law. But does it necessarily follow that a pilot test is absolutely not contemplated in the law? We repair to the statutory provision petitioners cited as requiring a pilot run, referring to Sec. 6 of RA 8436, as amended by RA 9369, reading as follows: Sec. 5. Authority to use an Automated Election System.- To carry out the above stated-policy, the [Comelec], x x x is hereby authorized to

use an automated election system or systems in the same election in different provinces, whether paper-based or a direct recording electronic election system as it may deem appropriate and practical for the process of voting, counting of votes and canvassing/consolidation and transmittal of results of electoral exercises: Provided, that for the regular national and local elections, which shall be held immediately after the effectivity of this Act, the AES shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas, and Mindanao to be chosen by the [Comelec]: Provided, further, That local government units whose officials have been the subject of administrative charges within sixteen (16) month prior to the May 14, 2007 elections shall not be chosen. Provided, finally, That no area shall be chosen without the consent of the Sanggunian of the local government unit concerned. The term local government unit as used in this provision shall refer to a highly urbanized city or province. In succeeding regular national or local elections, the AES shall be implemented. (Emphasis and underscoring added.) RA 9369, which envisages an AES, be it paper-based or directrecording electronic, took effect in the second week of February 2007 or thereabout.63 The "regular national and local elections" referred to after the "effectivity of this Act" can be no other than the May 2007 regular elections, during which time the AES shall, as the law is worded, be used in at least two highly urbanized cities and provinces in Luzon, Visayas and Mindanao. The Court takes judicial notice that the May 2007 elections did not deploy AES, evidently due to the mix of time and funding constraints. To the petitioners, the underscored portion of the aforequoted Sec. 6 of RA 8436 is the pilot-testing provision that Comelec failed to observe. We are not persuaded. From the practical viewpoint, the pilot testing of the technology in question in an actual, scheduled electoral exercise under harsh conditions would have been the ideal norm in computerized system implementation. The underscored proviso of Sec. 6 of RA 8436 is not, however, an authority for the proposition that the pilot testing of the

PCOS in the 2007 national elections in the areas thus specified is an absolute must for the machines use in the 2010 national/local elections. The Court can concede that said proviso, with respect to the May 2007 elections, commands the Comelec to automate in at least 12 defined areas of the country. But the bottom line is that the required 2007 automation, be it viewed in the concept of a pilot test or not, is not a mandatory requirement for the choice of system in, or a prerequisite for, the full automation of the May 2010 elections. As may be noted, Sec. 6 of RA 8436 may be broken into three essential parts, the first partaking of the nature of a general policy declaration: that Comelec is authorized to automate the entire elections. The second part states that for the regular national and local elections that shall be held in May 2007, Comelec shall use the AES, with an option, however, to undertake automation, regardless of the technology to be selected, in a limited area or, to be more precise, in at least two highly urbanized cities and two provinces each in Luzon, Visayas, and Mindanao to be chosen by the Comelec. On the other hand, the last part, phrased sans reference to the May 2007 elections, commands thus: "[I]n succeeding regular national or local elections, the [automated election system] shall be implemented." Taken in its proper context, the last part is indicative of the legislative intent for the May 2010 electoral exercise to be fully automated, regardless of whether or not pilot testing was run in the 2007 polls. To argue that pilot testing is a condition precedent to a full automation in 2010 would doubtless undermine the purpose of RA 9369. For, as aptly observed during the oral arguments, if there was no political exercise in May 2007, the country would theoretically be barred forever from having full automation. Sec. 6 of the amended RA 8436, as couched, therefore, unmistakably conveys the idea of unconditional full automation in the 2010 elections. A construal making pilot testing of the AES a prerequisite or condition sine qua non to putting the system in operation in the 2010 elections is tantamount to reading into said section something beyond the clear intention of Congress, as expressed in the provision itself. We reproduce with approval the following excerpts from the comment of the Senate itself:

The plain wordings of RA 9369 (that amended RA 8436) commands that the 2010 elections shall be fully automated, and such full automation is not conditioned on "pilot testing" in the May 2007 elections. Congress merely gave COMELEC the flexibility to partially use the AES in some parts of the country for the May 2007 elections.64 Lest it be overlooked, an AES is not synonymous to and ought not to be confused with the PCOS. Sec. 2(a) of RA 8436, as amended, defines an AES as "a system using appropriate technology which has been demonstrated in the voting, counting, consolidating, canvassing and transmission of election results, and other electoral processes." On the other hand, PCOS refers to a technology wherein an optical ballot scanner, into which optical scan paper ballots marked by hand by the voter are inserted to be counted.65 What may reasonably be deduced from these definitions is that PCOS is merely one of several automated voting, counting or canvassing technologies coming within the term AES, implying in turn that the automated election system or technology that the Comelec shall adopt in future elections need not, as a matter of mandatory arrangement, be piloted in the adverted two highly urbanized cities and provinces. In perspective, what may be taken as mandatory prerequisite for the full automation of the 2010 regular national/ local elections is that the system to be procured for that exercise be a technology tested either here or abroad. The ensuing Section 8 of RA 8436, as amended, says so. SEC 12. Procurement of Equipment and Materials. To achieve the purpose of this Act, the Commission is authorized to procure, xxx, by purchase, lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities, and other services, from local or foreign sources xxx. With respect to the May 10, 2010 elections and succeeding electoral exercises, the system procured must have demonstrated capability and been successfully used in prior electoral exercise here or abroad. Participation in the 2007 pilot exercise shall not be conclusive of the systems fitness. (Emphasis supplied). While the underscored portion makes reference to a "2007 pilot

exercise," what it really exacts is that, for the automation of the May 2010 and subsequent elections, the PCOS or any AES to be procured must have demonstrated its capability and success in either a local or a foreign electoral exercise. And as expressly declared by the provision, participation in the 2007 electoral exercise is not a guarantee nor is it conclusive of the systems fitness. In this regard, the Court is inclined to agree with private respondents interpretation of the underscored portion in question: "The provision clearly conveys that the [AES] to be used in the 2010 elections need not have been used in the 2007 elections, and that the demonstration of its capability need not be in a previous Philippine election. Demonstration of the success and capability of the PCOS may be in an electoral exercise in a foreign jurisdiction."66 As determined by the Comelec, the PCOS system had been successfully deployed in previous electoral exercises in foreign countries, such as Ontario, Canada; and New York, USA,67 albeit Smartmatic was not necessarily the system provider. But then, RA 9369 does not call for the winning bidder of the 2010 automation project and the deploying entity/provider in the foreign electoral exercise to be one and the same entity. Neither does the law incidentally require that the system be first used in an archipelagic country or with a topography or a voting population similar to or approximating that of the Philippines. At any event, any lingering doubt on the issue of whether or not full automation of the 2010 regular elections can validly proceed without a pilot run of the AES should be put to rest with the enactment in March 2009 of RA 9525,68 in which Congress appropriated PhP 11.301 billion to automate the 2010 elections, subject to compliance with the transparency and accuracy requirements in selecting the relevant technology of the machines, thus: Sec. 2. Use of Funds. x x x Provided, however, That disbursement of the amounts herein appropriated or any part thereof shall be authorized only in strict compliance with the Constitution, the provisions of [RA] No. 9369 and other election laws incorporated in said Act as to ensure the conduct of a free, orderly, clean, honest and credible election and shall adopt such measures that will guaranty transparency and accuracy in the selection of the relevant technology of the machines to be used on May 10, 2010 automated national and local elections. (Emphasis added.)

It may safely be assumed that Congress approved the bill that eventually became RA 9525, fully aware that the system using the PCOS machines were not piloted in the 2007 electoral exercise. The enactment of RA 9525 is to us a compelling indication that it was never Congress intent to make the pilot testing of a particular automated election system in the 2007 elections a condition precedent to its use or award of the 2010 Automation Project. The comment-in-intervention of the Senate says as much. Further, the highly charged issue of whether or not the 2008 ARMM electionscovering, as NCC observed, three conflict-ridden island provincesmay be treated as substantial compliance with the "pilot test" requirement must be answered in the affirmative. No less than Senator Richard J. Gordon himself, the author of the law, said that "the system has been tried and tested in the ARMM elections last year, so we have to proceed with the total implementation of the law."69 We note, though, the conflicting views of the NCC70 and ITFP71 on the matter. Suffice it to state at this juncture that the system used in the 2008 ARMM election exercise bears, as petitioners to an extent grudgingly admit, 72 a similarity with the PCOS. The following, lifted from the Comelecs comment, is to us a fair description of how the two systems (PCOS and CCOS) work and where the difference lies: xxx the elections in the [ARMM] utilized the Counting Center Optical Scan (CCOS), a system which uses the Optical Mark Reader (OMR), the same technology as the PCOS. Under the CCOS, the voters cast their votes by shading or marking the circles in the paper ballots which corresponded to the names of their chosen candidates [like in PCOS]. Thereafter, the ballot boxes were brought to the counting centers where they were scanned, counted and canvassed. xxx Under the PCOS, the counting, consolidation and canvassing of the votes are done at the precinct level. The election results at the precincts are then electronically transmitted to the next level, and so on. xxx PCOS dispenses with the physical transportation of ballot boxes from the precincts to the counting centers.73

Moreover, it has been proposed that a partial automation be implemented for the May 2010 elections in accordance with Section 5 of RA 8436, as amended by RA 9369 instead of full automation. The Court cannot agree as such proposition has no basis in law. Section 5, as worded, does not allow for partial automation. In fact, Section 5 clearly states that "the AES shall be implemented nationwide."74 It behooves this Court to follow the letter and intent of the law for full automation in the May 2010 elections. PCOS Meets Minimum Capabilities Standards As another ground for the nullification of the automation contract, petitioners posit the view that the PCOS machines do not satisfy the minimum system capabilities prescribed by RA 8436, as amended. To a specific point, they suggest that the PCOS system offered and accepted lacks the features that would assure accuracy in the recording and reading of votes, as well as in the tabulation, consolidation/canvassing, electronic transmission, storage results and accurate ballot counting.75 In this particular regard, petitioners allege that, based on Smartmatics website, the PCOS has a margin of error of from 2% to 10%, way beyond that of the required 99.99% accuracy in the counting of votes.76 The minimum system capabilities provision cited is Sec. 7 of RA 8436, as amended, and the missing features referred to by petitioners are pars. (b) and (j). In full, Sec. 7 of RA 8436, as amended, reads: SEC. 6. Minimum System Capabilities. - The automated election system must at least have the following functional capabilities: (a) Adequate security against unauthorized access; (b) Accuracy in recording and reading of votes as well as in the tabulation, consolidation/canvassing, electronic transmission, and storage of results; (c) Error recovery in case of non-catastrophic failure of device; (d) System integrity which ensures physical stability and functioning of the vote recording and counting process;

(e) Provision for voter verified paper audit trail; (f) System auditability which provides supporting documentation for verifying the correctness of reported election results; (g) An election management system for preparing ballots and programs for use in the casting and counting of votes and to consolidate, report and display election result in the shortest time possible; (h) Accessibility to illiterates and disabled voters; (i) Vote tabulating program for election, referendum or plebiscite; (j) Accurate ballot counters; (k) Data retention provision; (l) Provide for the safekeeping, storing and archiving of physical or paper resource used in the election process; (m) Utilize or generate official ballots as herein defined; (a) Provide the voter a system of verification to find out whether or not the machine has registered his choice; and (o) Configure access control for sensitive system data and function. In the procurement of this system, the Commission shall develop and adopt an evaluation system to ascertain that the above minimum system capabilities are met. The evaluation system shall be developed with the assistance of an advisory council. From the records before us, the Court is fairly satisfied that the Comelec has adopted a rigid technical evaluation mechanism, a set of 26-item/check list criteria, as will be enumerated shortly, to ensure compliance with the above minimum systems capabilities. The SBAC Memorandum77 of June 03, 2009, as approved by Comelec Res. 8608,78 categorically stated that the SBAC-TWG submitted its report that TIM/Smartmatics proposed systems and

machines PASSED all the end-to-end demo tests using the aforementioned 26-item criteria, inclusive of the accuracy rating test of at least 99.955%. As appearing in the SBAC-TWG report, the corresponding answers/remarks to each of the 26 individual items are as herein indicated:79 ITE REQUIREMENT M 1 Does the system allow manual feeding of a ballot into the PCOS machine? 2 Does the system scan a ballot sheet at the speed of at least 2.75 inches per second? 3 Is the system able to capture and store in an encrypted format the digital images of the ballot for at least 2,000 ballot sides (1,000 ballots, with back to back printing)? 4 REMARK/DESCRIPTION

Yes. The proposed PCOS machine accepted the t which were manually fed one at a time.

Yes. A 30-inch ballot was used in this test. Scanni inch ballot took 2.7 seconds, which translated to 11 per second.

Yes the system captured the images of the 1,000 encrypted format. Each of the 1,000 images files the images of the front and back sides of the ballot, 2,000 ballot side.

To verify the captured ballot images, decrypted cop encrypted files were also provided. The same wer be digitized representations of the ballots cast.

Is the system a fully Yes. The proposed PCOS is a fully integrated sing integrated single device with built-in printer and built-in data communicat as described in item no. (Ethernet and USB). 4 of Component 1-B?

Does the system have a Yes. A portion of a filled up marked oval was blown scanning resolution of at image editor software to reveal the number of dots least 200 dpi? The sample image showed 200 dpi.

File properties of the decrypted image file also rev dpi. 6 Does the system scan in grayscale?

Yes. 30 shades of gray were scanned in the te machine, 20 of which were required, exceeding th

4-bit/16 levels of gray as specified in the Bid Bulletin 7

Does the system require Yes. The system required the use of a security authorization and different sets of passwords/PINs for Administ authentication of all Operator users. operators, such as, but not limited to, usernames and passwords, with multiple user access levels? Does the system have an electronic display? Yes. The PCOS machine makes use of an LCD show information: if a ballot may be inserted into the machine;

if a ballot is being processed; if a ballot is being reje

on other instructions and information to the voter/op 9 Does the system employ error handling procedures, including, but not limited to, the use of error prompts and other related instructions? Does the system count the voters vote as marked on the ballot with an accuracy rating of at least 99.995%?

Yes. The PCOS showed error messages on i whenever a ballot is rejected by the machine instructions to the voter on what to do next, or w was a ballot jam error.

10

Yes. The two rounds of tests were conducted fo using only valid marks/shades on the ballots. 20,0 were required to complete this test, with only allowable reading error.

625 ballots with 32 marks each were used for this te the comparison of the PCOS-generated results manually prepared/predetermined results, it was that there were seven (7) marks which were ina missed out during ballot preparation by the TWG. the PCOS-generated results turned out to be 100% the 20,000-mark was not met thereby requiring the

repeated.

To prepare for other possible missed out marks,6 with (20,800 marks) were used for the next roun which also yielded 100% accuracy. 11 Does the system detect and reject fake or spurious, and previously scanned ballots? Does the system scan both sides of a ballot and in any orientation in one pass? Does the system have necessary safeguards to determine the authenticity of a ballot, such as, but not limited to, the use of bar codes, holograms, color shifting ink, micro printing, to be provided on the ballot, which can be recognized by the system? Are the names of the candidates pre-printed on the ballot?

Yes. This test made use of one (1) photocopied one (1) "re-created" ballot. Both were rejected by th

12

Yes. Four (4) ballots with valid marks were fed into machine in the four (4) portrait orientations specif Bulletin No. 4 (either back or front, upside down or up), and all were accurately captured.

13

Yes. The system was able to recognize if the features on the ballot are "missing".

Aside from the test on the fake or spurious ballots 11), three (3) test ballots with tampered bar codes marks were used and were all rejected by th machine.

The photocopied ballot in the test for Item No. 1 able to replicate the UV ink pattern on top portion o causing the rejection of the ballot.

14

Yes. The Two sample test ballots of different len provided: one (1) was 14 inches long while the oth inches long. Both were 8.5 inches wide.

The first showed 108 pre-printed candidate name fourteen (14) contests/positions, including two ( questions on gender and age group, and a question.

The other showed 609 pre-printed candidate name fourteen (14) positions including three (3) survey qu 15

Does each side of the Yes. The 30-inch ballot, which was used to test It

ballot sheet accommodate at least 300 names of candidates with a minimum font size of 10, in addition to other mandatory information required by law?

contained 309 names for the national positions names for local positions. The total pre-printed nam ballot totaled 609.

This type of test ballot was also used for test vot public, including members of the media.

Arial Narrow, font size 10, was used in the print candidate names.

16

Does the system Yes. The ballots used for the accuracy test (Item recognize full shade which made use of full shade marks, were also us marks on the appropriate test and were accurately recognized by the PCOS m space on the ballot opposite the name of the candidate to be voted for? Does the system recognize partial shade marks on the appropriate space on the ballot opposite the name of the candidate to be voted for?

17

Yes. Four (4) test ballots were used with one (1) ma per ballot showing the following pencil marks:

18

top half shade; bottom half shade; left half shade; and right half shade These partial shade marks were all recognized by th machine Does the system Yes. One (1) test ballot with one check () mark recognize check pencil, was used for this test. ()marks on the appropriate space on the The mark was recognized successfully. ballot opposite the name of the candidate to be voted for?

19

Does the system Yes. One (1) test ballot with one x mark, using a p recognize x marks on the used for this test. appropriate space on the ballot opposite the name The mark was recognized successfully. of the candidate to be

voted for? 20

Does the system Yes. The 1000 ballots used in the accuracy test (Ite recognize both pencil were marked using the proposed marking pen by th and ink marks on the A separate ballot with one (1) pencil mark was al ballot? This mark was also recognized by the PCOS Moreover, the tests for Items No. 17, 18 and 19 w using pencil marks on the ballots. In a simulation of a system shut down, does the system have error recovery features?

21

Yes. Five (5) ballots were used in this test. The p was pulled from the PCOS while the 3rd ballot w middle of the scanning procedure, such that it "hanging" in the ballot reader.

After resumption of regular power supply, the PCOS was able to restart successfully with notificatio operator that there were two (2) ballots already c machine. The "hanging" 3rd ballot was returne operator and was able to be re-fed into the PCOS The marks on all five (5) were all accurately recogni 22 Does the system have transmission and consolidation/canvassing capabilities? Does the system generate a backup copy of the generated reports, in a removable data storage device? Does the system have alternative power sources, which will enable it to fully operate for at least 12 hours?

Yes. The PCOS was able to transmit to the CCS end-to-end demonstration using GLOBE prepaid Int

23

Yes. The PCOS saves a backup copy of the E images, statistical report and audit log into a Comp (CF) Card.

24

Yes. A 12 bolt 18AH battery lead acid was used in The initial test had to be repeated due to a short ci seven (7) hours from start-up without ballot scan was explained by TIM-Smartmatic to be caused compatible wiring of the battery to the PCOS. A sm than what is required was inadvertently used, lik situation to incorrect wiring of a car battery. COMELEC electricians were called to conf Smartmatics explanation. The PCOS mach

connected to regular power and started success following day, the "re-test" was completed in 12 hou minutes xxx 984 ballots were fed into the machine as generated by the PCOS was compa predetermined result, showed 100% accuracy. 25 Is the system capable of generating and printing reports?

Yes. The PCOS prints reports via its built-in prin includes: 1. Initialization Report; 2. Election Returns (ER); Statistical Report; 4. Audit Log.

Yes. An end-to-end demonstration of all proposed s was presented covering: importing of election data i EMS; creation of election configuration data for the and the CCS using EMS; creation of ballot faces us configuring the PCOS and the CCS using the EMSelection configuration file; initialization, operation, ge of reports and backup using the PCOS; electronic transmission of results to the: [1] from the PCOS to city/municipal CCS and the central server. [2] from t city/municipal CCS to the provincial CCS. [3] from th provincial CCS to the national CCS; receipt and can transmitted results: [1] by the city/municipal CCS fro PCOS. [2] by the provincial CCS from the city/munic [3] by the national CCS from the provincial CCS; rec the transmittal results by the central server from the Given the foregoing and absent empirical evidence to the contrary, the Court, presuming regularity in the performance of regular duties, takes the demo-testing thus conducted by SBAC-TWG as a reflection of the capability of the PCOS machines, although the tests, as Comelec admits,80 were done literally in the Palacio del Governador building, where a room therein simulated a town, the adjoining room a city, etc. Perusing the RFP, however, the real worth of the PCOS system and the machines will of course come after they shall have been subjected to the gamut of acceptance tests expressly specified in the RFP, namely, the lab test, field test, mock election test, transmission test and, lastly, the final test and sealing procedure of all PCOS and CCS units using the actual Election Day machine configuration.81
1avvph!1

26

Did the bidder successfully demonstrate EMS, voting counting, consolidation/canvassing and transmission?

Apropos the counting-accuracy feature of the PCOS machines, petitioners no less impliedly admit that the web page they appended to their petition, showing a 2% to 10% failing rate, is no longer current.82 And if they bothered to examine the current website of Smartmatic specifically dealing with its SAES 1800, the PCOS system it offered, they would have readily seen that the advertised accuracy rating is over "99.99999%."83 Moreover, a careful scrutiny of the old webpage of Smarmatic reveals that the 2% to 10% failure rate applied to "optical scanners" and not to SAES. Yet the same page discloses that the SAES has "100%" accuracy. Clearly, the alleged 2% to 10% failing rate is now irrelevant and the Court need not belabor this and the equally irrelevant estoppel principle petitioners impose on us. Intervenor Cuadras concern relates to the auditability of the election results. In this regard, it may suffice to point out that PCOS, being a paper-based technology, affords audit since the voter would be able, if need be, to verify if the machine had scanned, recorded and counted his vote properly. Moreover, it should also be noted that the PCOS machine contains an LCD screen, one that can be programmed or configured to display to the voter his votes as read by the machine. 84 No Abdication of Comelecs Mandate and Responsibilty As a final main point, petitioners would have the ComelecSmartmatic-TIM Corporation automation contract nullified since, in violation of the Constitution, it constitutes a wholesale abdication of the poll bodys constitutional mandate for election law enforcement. On top of this perceived aberration, the mechanism of the PCOS machines would infringe the constitutional right of the people to the secrecy of the ballot which, according to the petitioners, is provided in Sec. 2, Art. V of the Constitution.85 The above contention is not well taken. The first function of the Comelec under the Constitution86and the Omnibus Election Code for that matterrelates to the enforcement and administration of all laws and regulations relating to the conduct of elections to public office to ensure a free, orderly and honest

electoral exercise. And how did petitioners come to their conclusion about their abdication theory? By acceding to Art. 3.3 of the automation contract, Comelec relinquished, so petitioners claim, supervision and control of the system to be used for the automated elections. To a more specific point, the loss of control, as may be deduced from the ensuing exchanges, arose from the fact that Comelec would not be holding possession of what in IT jargon are the public and private keys pair. CHIEF JUSTICE: Well, more specifically are you saying that the main course of this lost of control is the fact that SMARTMATIC holds the public and private keys to the sanctity of this system? ATTY. ROQUE: Yes, Your Honor, as well as the fact that they control the program embedded in the key cost that will read their votes by which the electorate may verify that their votes were counted. CHIEF JUSTICE: You are saying that SMARTMATIC and not its partner TIM who hold these public and private keys? ATTY. ROQUE: Yes, Your Honor. The Court is not convinced. There is to us nothing in Art 3.3 of the automation contract, even if read separately from other stipulations and the provisions of the bid documents and the Constitution itself, to support the simplistic conclusion of abdication of control pressed on the Court. Insofar as pertinent, Art 3.3 reads: 3.3 The PROVIDER shall be liable for all its obligations under this Project and the performance of portions thereof by other persons or entities not parties to this Contract shall not relieve the PROVIDER of said obligations and concomitant liabilities. SMARTMATIC, as the joint venture partner with the greater track record in automated elections, shall be in charge of the technical aspects of the counting and canvassing software and hardware, including transmission configuration and system integration. SMARTMATIC shall also be primarily responsible for preventing and troubleshooting technical problems that may arise during the elections. (Emphasis added.)

The proviso designating Smartmatic as the joint venture partner in charge of the technical aspect of the counting and canvassing wares does not to us translate, without more, to ceding control of the electoral process to Smartmatic. It bears to stress that the aforesaid designation of Smartmatic was not plucked from thin air, as it was in fact an eligibility requirement imposed, should the bidder be a joint venture. Part 5, par. 5.4 (e) of the Instruction to Bidders on the subject Eligible Bidders, whence the second paragraph of aforequoted Art. 3.3 came from, reads: 5.4 A JV of two or more firms as partners shall comply with the following requirements. xxxx (e) The JV member with a greater track record in automated elections, shall be in-charge of the technical aspects of the counting and canvassing software and hardware, including transmission configuration and system integration And lest it be overlooked, the RFP, which forms an integral part of the automation contract,87 has put all prospective bidders on notice of Comelecs intent to automate and to accept bids that would meet several needs, among which is "a complete solutions provider which can provide effective overall nationwide project management service under COMELEC supervision and control, to ensure effective and successful implementation of the [automation] Project."88 Complementing this RFP advisory as to control of the election process is Art. 6.7 of the automation contract, providing: 6.7 Subject to the provisions of the General Instructions to be issued by the Commission En Banc, the entire processes of voting, counting, transmission, consolidation and canvassing of votes shall be conducted by COMELECs personnel and officials, and their performance, completion and final results according to specifications and within the specified periods shall be the shared responsibility of COMELEC and the PROVIDER. (Emphasis added.) But not one to let an opportunity to score points pass by, petitioners rhetorically ask: "Where does Public Respondent Comelec intend to get this large number of professionals, many of whom are already

gainfully employed abroad?"89 The Comelec, citing Sec. 390 and Sec. 5 of RA 8436,91 as amended, aptly answered this poser in the following wise: x x x [P]ublic respondent COMELEC, in the implementation of the automated project, will forge partnerships with various entities in different fields to bring about the success of the 2010 automated elections. Public respondent COMELEC will partner with Smartmatic TIM Corporation for the training and hiring of the IT personnel as well as for the massive voter-education campaign. There is in fact a budget allocation x x x for these undertakings. x x x As regards the requirement of RA 9369 that IT-capable personnel shall be deputized as a member of the BEI and that another ITcapable person shall assist the BOC, public respondent COMELEC shall partner with DOST and other agencies and instrumentalities of the government. In not so many words during the oral arguments and in their respective Memoranda, public and private respondents categorically rejected outright allegations of abdication by the Comelec of its constitutional duty. The petitioners, to stress, are strangers to the automation contract. Not one participated in the bidding conference or the bidding proper or even perhaps examined the bidding documents and, therefore, none really knows the real intention of the parties. As case law tells us, the court has to ferret out the real intent of the parties. What is fairly clear in this case, however, is that petitioners who are not even privy to the bidding process foist upon the Court their own view on the stipulations of the automation contract and present to the Court what they think are the parties true intention. It is a study of outsiders appearing to know more than the parties do, but actually speculating what the parties intended. The following is self-explanatory: CHIEF JUSTICE: Why did you say that it did not, did you talk with the Chairman and Commissioners of COMELEC that they failed to perform this duty, they did not exercise this power of control? ATTY. ROQUE : Your Honor, I based it on the fact that it was the

COMELEC in fact that entered into this contract . CHIEF JUSTICE : Yes, but my question is did you confront the COMELEC officials that they forfeited their power of control in over our election process? ATTY. ROQUE : We did not confront, your Honor. We impugned their acts, Your Honor.92 Just as they do on the issue of control over the electoral process, petitioners also anchor on speculative reasoning their claim that Smartmatic has possession and control over the public and private keys pair that will operate the PCOS machines. Consider: Petitioners counsel was at the start cocksure about Smartmatics control of these keys and, with its control, of the electoral process.93 Several questions later, his answers had a qualifying tone: JUSTICE NACHURA: And can COMELEC under the contract not demand that it have access, that it be given access to and in fact generate its own keys independently with SMARTMATIC so that it would be COMELEC and not SMARTMATIC that would have full control of the technology insofar as the keys are concerned xxx? ATTY. ROQUE: I do not know if COMELEC will be in a position to generate these keys, xxx. 94 And subsequently, the speculative nature of petitioners position as to who would have possession and control of the keys became apparent. CHIEF JUSTICE: Yes, but did you check with the COMELEC who will be holding these two keys x x x did you check with COMELEC whether this system is correct? ATTY.ROQUE: We have not had occasion to do so, x x x Your Honor. xxxx CHIEF JUSTICE: Why do you make that poor conclusion against the

COMELEC x x x May not the COMELEC hire the services of experts in order for the institution to be able to discharge its constitutional functions? ATTY. ROQUE: That is true, but x x x there is too much reliance on individuals who do not have the same kind of accountability as public officers x x x CHIEF JUSTICE: Are you saying that the COMELEC did not consult with available I.T. experts in the country before it made the bidding rules before it conducted the bidding and make the other policy judgments? ATTY. ROQUE: Your Honor, what I am sure is that they did not confer with the I.T. Foundation x x x. CHIEF JUSTICE: But is that foundation the only expert, does it have a monopoly of knowledge?95 The Court, to be sure, recognizes the importance of the vote-security issue revolving around the issuance of the public and private keys pair to the Board of Election Inspectors, including the digital signatures. The NCC comment on the matter deserves mention, appearing to hew as it does to what appear on the records. The NCC wrote: The RFP/TOR used in the recent bidding for the AES to be used in the 2010 elections specifically mandated the use of public key cryptography. However, it was left to the discretion of the bidder to propose an acceptable manner of utilization for approval/acceptance of the Comelec. Nowhere in the RFP/TOR was it indicated that COMELEC would delegate to the winning bidder the full discretion, supervision and control over the manner of PKI [Public Key Infrastructure] utilization. With the view we take of the automation contract, the role of Smartmatic TIM Corporation is basically to supply the goods necessary for the automation project, such as but not limited to the PCOS machines, PCs, electronic transmission devices and related equipment, both hardware and software, and the technical services pertaining to their operation. As lessees of the goods and the back-up

equipment, the corporation and its operators would provide assistance with respect to the machines to be used by the Comelec which, at the end of the day, will be conducting the election thru its personnel and whoever it deputizes. And if only to emphasize a point, Comelecs contract is with Smartmatic TIM Corporation of which Smartmatic is a 40% minority owner, per the JVA of TIM and Smartmatic and the Articles of Incorporation of Smartmatic TIM Corporation. Accordingly, any decision on the part or on behalf of Smartmatic will not be binding on Comelec. As a necessary corollary, the board room voting arrangement that Smartmatic and TIM may have agreed upon as joint venture partners, inclusive of the veto vote that one may have power over the other, should really be the least concern of the Comelec. Parenthetically, the contention that the PCOS would infringe on the secrecy and sanctity of the ballot because, as petitioners would put it, the voter would be confronted with a "three feet" long ballot,96 does not commend itself for concurrence. Surely, the Comelec can put up such infrastructure as to insure that the voter can write his preference in relative privacy. And as demonstrated during the oral arguments, the voter himself will personally feed the ballot into the machine. A voter, if so minded to preserve the secrecy of his ballot, will always devise a way to do so. By the same token, one with least regard for secrecy will likewise have a way to make his vote known. During the oral arguments, the notion of a possible violation of the Anti-Dummy Law cropped up, given the RFP requirement of a joint venture bidder to be at least be 60% Filipino. On the other hand, the winning bidder, TIM-Smartmatic joint venture, has Smartmatic, a foreign corporation, owning 40% of the equity in, first, the joint venture partnership, and then in Smartmatic TIM Corporation. The Anti-Dummy Law97 pertinently states: Section 1. Penalty. In all cases in which any constitutional or legal provision requires Philippine or any other specific citizenship as a requisite for the exercise or enjoyment of a right, franchise or privilege, any citizen of the Philippines or of any other specific country who allows his name or citizenship to be used for the purpose of

evading such provision, and any alien or foreigner profiting thereby, shall be punished by imprisonment xxx and by a fine xxx. SECTION 2. Simulation of minimum capital stock In all cases in which a constitutional or legal provision requires that a corporation or association may exercise or enjoy a right, franchise or privilege, not less than a certain per centum of its capital must be owned by citizens of the Philippines or any other specific country, it shall be unlawful to falsely simulate the existence of such minimum stock or capital as owned by such citizen for the purpose of evading such provision. xxx SECTION 2-A. Unlawful use, Exploitation or Enjoyment. Any person, corporation, or association which, having in its name or under its control, a right, franchise, privilege, property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines or of any other specific country, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, permits or allows the use, exploitation or enjoyment thereof by a person, corporation, or association not possessing the requisites prescribed by the Constitution or the laws of the Philippines; or leases, or in any other way, transfers or conveys said right, franchise, privilege, property or business to a person, corporation or association not otherwise qualified under the Constitution xxx shall be punished by imprisonment xxx (Emphasis added.) The Anti-Dummy Law has been enacted to limit the enjoyment of certain economic activities to Filipino citizens or corporations. For liability for violation of the law to attach, it must be established that there is a law limiting or reserving the enjoyment or exercise of a right, franchise, privilege, or business to citizens of the Philippines or to corporations or associations at least 60 per centum of the capital of which is owned by such citizens. In the case at bench, the Court is not aware of any constitutional or statutory provision classifying as a nationalized activity the lease or provision of goods and technical services for the automation of an election. In fact, Sec. 8 of RA 8436, as amended, vests the Comelec with specific authority to acquire AES from foreign sources, thus:

SEC 12. Procurement of Equipment and Materials. To achieve the purpose of this Act, the Commission is authorized to procure, xxx, by purchase, lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities, and other services, from local or foreign sources xxx. (Emphasis added.) Petitioners cite Executive Order No. (EO) 584,98 Series of 2006, purportedly limiting "contracts for the supply of materials, goods and commodities to government-owned or controlled corporation, company, agency or municipal corporation" to corporations that are 60% Filipino. We do not quite see the governing relevance of EO 584. For let alone the fact that RA 9369 is, in relation to EO 584, a subsequent enactment and, therefore, enjoys primacy over the executive issuance, the Comelec does fall under the category of a government-owned and controlled corporation, an agency or a municipal corporation contemplated in the executive order. A view has been advanced regarding the susceptibility of the AES to hacking, just like the voting machines used in certain precincts in Florida, USA in the Gore-Bush presidential contests. However, an analysis of post-election reports on the voting system thus used in the US during the period material and the AES to be utilized in the 2010 automation project seems to suggest stark differences between the two systems. The first relates to the Source Code, defined in RA 9369 as "human readable instructions that define what the computer equipment will do."99 The Source Code for the 2010 AES shall be available and opened for review by political parties, candidates and the citizens arms or their representatives;100 whereas in the US precincts aforementioned, the Source Code was alleged to have been kept secret by the machine manufacture company, thus keeping the American public in the dark as to how exactly the machines counted their votes. And secondly, in the AES, the PCOS machines found in the precincts will also be the same device that would tabulate and canvass the votes; whereas in the US, the machines in the precincts did not count the votes. Instead the votes cast appeared to have been stored in a memory card that was brought to a counting center at the end of the day. As a result, the hacking and cheating may have possibly occurred at the counting center. Additionally, with the AES, the possibility of system hacking is very

slim. The PCOS machines are only online when they transmit the results, which would only take around one to two minutes. In order to hack the system during this tiny span of vulnerability, a super computer would be required. Noteworthy also is the fact that the memory card to be used during the elections is encrypted and readonlymeaning no illicit program can be executed or introduced into the memory card. Therefore, even though the AES has its flaws, Comelec and Smartmatic have seen to it that the system is well-protected with sufficient security measures in order to ensure honest elections. And as indicated earlier, the joint venture provider has formulated and put in place a continuity and back-up plans that would address the understandable apprehension of a failure of elections in case the machines falter during the actual election. This over-all fall-back strategy includes the provisions for 2,000 spare PCOS machines on top of the 80,000 units assigned to an equal number precincts throughout the country. The continuity and back-up plans seek to address the following eventualities: (1) The PCOS fails to scan ballots; (2) The PCOS scans the ballots, but fails to print election returns (ERs); and/or (3) The PCOS prints but fails to transmit the ERs. In the event item #1 occurs, a spare PCOS, if available, will be brought in or, if not available, the PCOS of another precinct (PCOS 2 for clarity), after observing certain defined requirements,101 shall be used. Should all the PCOS machines in the entire municipality/city fail, manual counting of the paper ballots and the manual accomplishment of ERs shall be resorted to in accordance with Comelec promulgated rules on appreciation of automated ballots.102 In the event item #2 occurs where the PCOS machines fail to print ERs, the use of spare PCOS and the transfer of PCOS-2 shall be effected. Manual counting of ERs shall be resorted to also if all PCOS fails in the entire municipality. And should eventuality #3 transpire, the following back-up options, among others, may be availed of: bringing PCOS-1 to the nearest precinct or polling center which has a functioning transmission facility; inserting transmission cable of functioning transmission line to PCOS-1 and transmitting stored data from PCOS-1 using functioning transmission facility. The disruption of the election process due to machine breakdown or

malfunction may be limited to a precinct only or could affect an entire municipal/city. The worst case scenario of course would be the wholesale breakdown of the 82,000 PCOS machines. Nonetheless, even in this most extreme case, failure of all the machines would not necessarily translate into failure of elections. Manual count tabulation and transmission, as earlier stated, can be done, PCOS being a paper-ballot technology. If the machine fails for whatever reason, the paper ballots would still be there for the hand counting of the votes, manual tabulation and transmission of the ERs. Failure of elections consequent to voting machines failure would, in fine, be a very remote possibility. A final consideration. The first step is always difficult. Hardly anything works, let alone ends up perfectly the first time around. As has often been said, if one looks hard enough, he will in all likelihood find a glitch in any new system. It is no wonder some IT specialists and practitioners have considered the PCOS as unsafe, not the most appropriate technology for Philippine elections, and "easily hackable," even. And the worst fear expressed is that disaster is just waiting to happen, that PCOS would not work on election day. Congress has chosen the May 2010 elections to be the maiden run for full automation. And judging from what the Court has heard and read in the course of these proceedings, the choice of PCOS by Comelec was not a spur-of-moment affair, but the product of honestto-goodness studies, consultations with CAC, and lessons learned from the ARMM 2008 automated elections. With the backing of Congress by way of budgetary support, the poll body has taken this historic, if not ambitious, first step. It started with the preparation of the RFP/TOR, with a list of voluminous annexes embodying in specific detail the bidding rules and expectations from the bidders. And after a hotly contested and, by most accounts, a highly transparent public bidding exercise, the joint venture of a Filipino and foreign corporation won and, after its machine hurdled the end-to-end demonstration test, was eventually awarded the contract to undertake the automation project. Not one of the losing or disqualified bidders questioned, at least not before the courts, the bona fides of the bidding procedures and the outcome of the bidding itself.

Assayed against the provisions of the Constitution, the enabling automation law, RA 8436, as amended by RA 9369, the RFP and even the Anti-Dummy Law, which petitioners invoked as an afterthought, the Court finds the project award to have complied with legal prescriptions, and the terms and conditions of the corresponding automation contract in question to be valid. No grave abuse of discretion, therefore, can be laid on the doorsteps of respondent Comelec. And surely, the winning joint venture should not be faulted for having a foreign company as partner. The Comelec is an independent constitutional body with a distinct and pivotal role in our scheme of government. In the discharge of its awesome functions as overseer of fair elections, administrator and lead implementor of laws relative to the conduct of elections, it should not be stymied with restrictions that would perhaps be justified in the case of an organization of lesser responsibility.103 It should be afforded ample elbow room and enough wherewithal in devising means and initiatives that would enable it to accomplish the great objective for which it was createdto promote free, orderly, honest and peaceful elections. This is as it should be for, too often, Comelec has to make decisions under difficult conditions to address unforeseen events to preserve the integrity of the election and in the process the voice of the people. Thus, in the past, the Court has steered away from interfering with the Comelecs exercise of its power which, by law and by the nature of its office properly pertain to it. Absent, therefore, a clear showing of grave abuse of discretion on Comelecs part, as here, the Court should refrain from utilizing the corrective hand of certiorari to review, let alone nullify, the acts of that body. This gem, while not on all fours with, is lifted from, the Courts holding in an old but oft-cited case: x x x We may not agree fully with [the Comelecs] choice of means, but unless these are clearly illegal or constitute gross abuse of discretion, this court should not interfere. Politics is a practical matter, and political questions must be dealt with realisticallynot from the standpoint of pure theory [or speculation]. x x x xxxx There are no ready-made formulas for solving public problems. Time

and experience are necessary to evolve patterns that will serve the ends of good government. In the matter of the administration of the laws relative to the conduct of elections, x x x we must not by any excessive zeal take away from the [Comelec] the initiative which by constitutional and legal mandates properly belongs to it. Due regard to the independent character of the Commission x x x requires that the power of this court to review the acts of that body should, as a general proposition, be used sparingly, but firmly in appropriate cases.104 x x x The Court, however, will not indulge in the presumption that nothing would go wrong, that a successful automation election unmarred by fraud, violence, and like irregularities would be the order of the moment on May 10, 2010. Neither will it guarantee, as it cannot guarantee, the effectiveness of the voting machines and the integrity of the counting and consolidation software embedded in them. That task belongs at the first instance to Comelec, as part of its mandate to ensure clean and peaceful elections. This independent constitutional commission, it is true, possesses extraordinary powers and enjoys a considerable latitude in the discharge of its functions. The road, however, towards successful 2010 automation elections would certainly be rough and bumpy. The Comelec is laboring under very tight timelines. It would accordingly need the help of all advocates of orderly and honest elections, of all men and women of goodwill, to smoothen the way and assist Comelec personnel address the fears expressed about the integrity of the system. Like anyone else, the Court would like and wish automated elections to succeed, credibly. WHEREFORE, the instant petition is hereby DENIED. SO ORDERED. PRESBITERO J. VELASCO, JR. Associate Justice WE CONCUR: REYNATO S. PUNO Chief Justice (On official leave) LEONARDO A. QUISUMBING

CONSUELO YNARES-S Associate Justic

Associate Justice ANTONIO T. CARPIO Associate Justice CONCHITA CARPIO MORALES Associate Justice ANTONIO EDUARDO B. NACHURA Associate Justice ARTURO D. BRION Associate Justice LUCAS P. BERSAMIN Associate Justice ROBERTO A. ABAD Associate Justice CERTIFICATION

RENATO C. CORO Associate Justic MINITA V. CHICO-NA Associate Justic TERESITA J. LEONARDOAssociate Justic DIOSDADO M. PER Associate Justic MARIANO C. DEL CA Associate Justic

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. REYNATO S. PUNO Chief Justice Footnotes
*

On official leave.

Both corporations are also referred to in the petition and other pleadings as Total Information Management, Inc. and Smartmatic International, Inc.
2

Rollo, pp. 87-A and 87-B. Id. at 576-A. Dated July 28, 2009.

An Act Amending [RA] 8436, entitled "An Act Authorizing the [Comelec] to Use Automated Election System in the May 11, 1998 National or Local Elections and in Subsequent National or Local Electoral Exercises, to Encourage Transparency, Credibility, Fairness and Accuracy of Elections, Amending for the Purpose Batas Pambansa Blg. 881, as Amended, [RA] 7166 and Other Related

Election Laws, Providing Funds Therefor and For Other Purposes."

5

Composed of, among others, the Chairperson of the Commission on Information and Communications Technology (CICT), one member each from the Dept. of Education and the Dept. of Science and Technology and three members representing ICT professional organizations.
6

Sec. 9.

It shall be composed of a representative each from the Commission, CITC and DOST.
8

Sec. 11.

Composed of the cities and municipalities in the provinces of Isabela (except Isabela City), Sulu, Tawi-Tawi, Maguindanao (except Cotabato City) and Lanao del Sur.
10

DRE is a technology wherein a vote is cast directly on a machine by the use of a touch screen, touchpad, keypad or other device and the machine records the individual votes and calculates the total votes electronically.
11

CCOS means a technology wherein an optical ballot scanner, into which optical scan paper ballots marked by hand by the voter are inserted to be counted, is located in every voting center.
12

Rollo, p. 874. Public Respondents Memorandum.

13

Senate Resolutions 96 and 567, s. of 2008, authored by Senators Gordon and Villar, respectively; see Annexes 8 and 9 of private respondents Memorandum.
14

Memorandum of the NCC, p. 23.

15

Sec. 2 of RA 9369 defines "paper-based election system" as a type of automated election system that uses paper ballots; records and counts votes; and tabulates, consolidates/canvasses and transmits electronically the results of the vote counts.

16

The Glossary of Terms of the RFP defines PCOS as referring to a technology wherein an optical ballot scanner, into which optical scan paper ballots marked by hand by the voter are inserted to be counted, is located in every precinct.
17

Sec. 2 (10) of RA 8436, as amended, defines "continuity plan" as a "list of contingency measures and the policies for activation of such, that are put in place to ensure continuous operation of the AES."
18

The formulation of a continuity plan is a requirement under Sec. 9 of RA 8436, the activation of which shall be undertaken in the presence of political parties representatives and the citizens arm of the Comelec.
19

Terms, Conditions and Instruction to Bidders, pp. 45-50 of the RFP.

20

Contains what the RFP refers to as Class "A" documents, referring to legal, technical and financial documents; and Class "B" documents, among which is a valid JVA, in case of joint venture.
21

Item IX, par. 3.3 of the RFP.

22

Rollo, p. 399. Per Certification of the Director of the Comelecs Education & Information Department, Annex "4" of public respondents Comment.
23

Published on March 14-16, 2009. Rollo, p. 295. Public respondents Comment on the Petition, p. 7. Par. 2.2.4. of Part IX (B) of the RFP.

24

25

26

Smartmatic is a subsidiary of Smartmatic International Holding, B.V. of Netherlands.

27

TIM-Smartmatic, Indra Consortium and Gilat Consortium.

28

Rollo, pp. 417-431. Omnibus SBAC Res. 09-001, Annex "6," public respondents Comment.
29

Id. at 844-848. Annex "10" of private respondents Memorandum.

30

Testing of the entire system in an actual simulated election. Annex "3," TIM-Smartmatic Comment. Rollo, p. 468. Annex "10," public respondents Comment. Id. at 263-281. Annex "2," Smartmatic TIM Corp.s Comment.

31

32

33

34

Denominated as the Contract for the Provision of an Automated Election System for the May 10, 2010 Synchronized National and Local Elections.
35

Par. 4.1. Rollo, p. 548. Annex "14," public respondents Comment. Id. at 887. Memorandum of public respondents, p. 23.

36

37

38

Gonzales v. Narvasa, G.R. No. 140835, August 14, 2000, 337 SCRA 733, 740.
39

Tatad v. Secretary of the Department of Energy, G.R. Nos. 124360 & 127867, November 5, 1997, 281 SCRA 330, 349; De Guia v. COMELEC, G.R. No. 104712, May 6, 1992, 208 SCRA 420, 422.
40

G.R. No. 130716, December 9, 1998, 299 SCRA 744, cited in Chavez v. NHA, infra.
41

TSN of the oral arguments, p. 202. Id. at 209.

42

43

Sec. 2. The Congress shall provide a system for securing the secrecy and sanctity of the ballot x x x.
44

TSN of the oral arguments, p. 76.

45

Chuidian v. Sandiganbayan, G.R. Nos. 156383 & 160723, July 31, 2006, 497 SCRA 327; citing Ginete v. CA, G.R. No. 127596, September 24, 1998, 296 SCRA 38.
46

Redea v. Court of Appeals, G.R. No. 146611, February 6, 2007,

514 SCRA 389.

47

Marabur v. Comelec, G.R. No. 169513, February 26, 2007, 516 SCRA 696.
48

Chavez v. National Housing Authority, G.R. No. 164527, August 15, 2007, 530 SCRA 235.
49

Cabarles v. Maceda, G.R. No. 161330, February 20, 2007, 516 SCRA 303.
50

TSN, p. 38. TSN of Oral Arguments,Vol. I, p. 64. Rollo, pp. 436-467. Annex "8," public respondents Comment.

51

52

53

The 5th and 6th preambulatory clauses of the JVA respectively provide: WHEREAS, Tim and Smartmatic have agreed to jointly and severally submit, as an incorporated joint venture, a bid to the COMELEC for the automation Project pursuant to the rules and terms set forth in the Request for Proposal; WHEREAS, in the event that the bid submitted by TIM SMARTMATIC is declared to be the winning bid, TIM SMARTMATIC have agreed to cause the incorporation of a venture corporation (the "JVC") which will enter into a contract the COMELEC for the Automation Project.
54

and and joint with

2.1 In the event that COMELEC declares the bid tendered by TIM and SMARTMATIC to be the winning bid for the Automation Project, the parties hereto shall incorporate or cause to be incorporated, the JVC which shall be named "TIM SMARTMATIC CORPRATION" or any other acceptable name which may be allowed by the SEC. 2.2. The JVC shall be the corporate vehicle through which the joint venture shall be carried out xxxx. The JVC shall be the entity which shall enter into a contract with the COMELEC for the Automation Project of the 2010 National Elections.

2.3 The purpose of the JVC shall be to carry out and perform jointly, severally and solidarily the obligations of TIM and SMARTMATIC arising from being declared the winning bidder in the public bidding for the Automation Project which obligations are spelled out in the [RFP] xxx 2.4 The authorized capital stock of the JVC is initially fixed herein at xxx PHP1,300,000,000.00 divided into Pesos: One Billion and Three Hundred Million shares xxx; Provided that the authorized capital stock of the JVC may be increased when so warranted xxx. 2.5 The capital contributions of the parties hereto to the JVC shall be as follows: a. TIM by itself or thorough its Philippine subsidiary sixty percent (60%) of the shares to be issued by the JVC; b. SMATMATIC, by itself or through its Philippine subsidiary forty percent (40%) of the shares to be issued by the JVC. xxx
55

4.1 For as long as TIM, either by itself or through its subsidiary, owns and holds 60% of the outstanding capital stock of the JVC and entitled to vote, TIM shall be entitled to nominate and elect 60% of the Board of Directors of the JVC. For as long as SMARTMATIC, either by itself or through its Philippine subsidiary, owns and holds 40% of the outstanding capital stock of the JVC and entitled to vote, SMARTMATIC shall be entitled to nominate and elect 40% of the Board of Directors of the JVC
56

7.1 The JVC will distribute its profits to the Shareholders to the extent determined by the Board of Directors xxx after taking into account the financial requirements of the JVC with respect to the working capital. xxx
57

3.1 For purposes of the Automation Project, TIM may contribute to the JVC and shall be responsible for the following: a. the value-added services pertaining or related to canvassing units, systems integration, transmission and such other services as required by the Automation Project and as indicated in the [RFP]; b. services pertaining or related to logistics, deployment and manpower; c. hardware, software, ballot paper, consumables and such other services as may be requested by SMARTMATIC; and d. local support staff as may be required under the circumstances;

3.2 For purposes of the Automation Project, SMARTMATIC shall contribute to the JVC and shall be responsible for the following: a. the development, manufacture and/or supply of EVMs, other machines and equipment, software, technology and systems; b. overall project management as required by the Automation Project and as indicated in the [RFP] and c. any other activity not expressly written in this Agreement or assigned to TIM; xxxx 3.4 In the event the [financial and capital contribution] sources mentioned in the preceding Article 3,3 (b) or (c) are insufficient to meet the financial requirements of the JVC, the parties shall bear the responsibility of supporting or securing such financial requirements in proportion to their respective shareholdings xxx.
58

G.R. No. 159139, January 13, 2004, 419 SCRA 146. Id. at 167. TSN of the oral arguments, p. 119.

59

60

61

Sec. 7.1 of the ITB reads: "The bidder shall specify in its Bid all portions of the Goods and Services that will be subcontracted, if any, including the entities to whom each portion will be subcontracted to xxx. Subcontracting of any portion shall not relieve the Bidder from any liability or obligation that may arise from its performance."
62

Rollo, p. 310. Public respondents Comment, p. 22.

63

Approved on January 23, 2007, RA 9369 provides in its Sec. 47 that it shall take effect 15 days after its publication in a newspaper of general circulation.
64

The Senates Comment-in-Intervention, p. 4. Annex "A" [Glossary of Terms] of the RFP.

65

66

Rollo, 174-175. Private respondents Comment on Petition, pp. 2728.

67

Memorandum, Report/Recommendation on the 2010 Automation Election Project Procurement, Annex "9," Comment on Petition of Public Respondents.
68

Entitled "An Act Appropriating the Sum of Eleven Billion Three Hundred One Million Seven Hundred Ninety Thousand Pesos (P11,301,790,000.00) as Supplemental Budget for an [AES] and for Other Purposes."
69

Rollo, p. 1341.

70

On page 3 of its Comment, NCC, thru its Dir. Gen. Angelo Timoteo M. Diaz de Rivera, states: "We believe that the successful deployment of the paper-based election system in 5 of the 6 provinces of ARMM and the concurrent deployment of the directrecording-electronic election system in Maguindanao province, is substantial compliance of the spirit of this law, given the underlying circumstances."
71

Mr. Amado A. Malacaman, signing as secretary of the ITFP, states: "The ARMM election in August 2008 was not a valid pilot run for two reasons: (1) It did not cover two highly urbanized cities and two provinces each in Luzon, Visayas, and Mindanao, and (2) PCOS was not used in that electoral exercise."
72

Atty. Roque said: "The PCOS stage is similar to OMR because they also have to shade the oval for the candidate that they want to vote. The difference is that in the OMR they collate all the ballots xxx where in PCOS you dont put it in a ballot, you feed it into the machines."
73

Public respondents Comment, pp. 27-28. Section 5, RA 8436, as amended. Petition, p. 30. Id. at 31. Annex "9," public respondents Comment.

74

75

76

77

78

See Note No. 33. Annex "8," Comment of public respondents. TSN, pp. 315-316

79

80

81

The final test shall be conducted at least three days before election after which the PCOS and CCS shall be sealed for election day use (Part V, item no. 13, RFP).
82

TSN, p. 89. automated-elections-system-

83

http:// www. com/solutions view/article/voting machine.

84

TSN, Oral Arguments, pp. 455-456, 490. Rollo, pp. 1062-1063. Petitioners Memorandum, pp. 12-13.

85

86

Sec. 2, Art. IX-C; SECTION 2. The [Comelec] shall exercise the following powers and functions: (1) Enforce and administer all laws and regulations relative to the conduct of an election, plebiscite, initiative, referendum and recall; xxx (4) Deputize xxx law enforcement agencies xxx for the exclusive purpose of ensuring free, orderly, honest peaceful and credible elections.
87

21.1. "Contract documents" refers to the following documents and they are hereby incorporated and made an integral part of this Contract: x x x Annex "O" Request for Proposal/Terms of Reference.
88

Part II, RFP. Rollo, p. 1094. Petitioners Memorandum, p. 44.

89

90

SECTION 3. Section 3 of [RA] 8436 is hereby amended to read as follows: "SEC. 3 Board of Election of Inspectors. Where AES shall be adopted, at least one member of the Board of Election Inspectors shall be an [IT]-capable person, who is trained or certified by the DOST to use such AES. Such certification shall be issued by the DOST, free of charge."

91

SECTION 5. Section 5 of [RA] 8436 is hereby amended to read as follows: "SEC. 4 Information Technology Support for the Board of Canvassers.- To implement the AES, each board of canvasser shall be assisted by an [IT]-capable person authorized to operate the equipment adopted for the elections. The Commission shall deputize [IT] personnel from among agencies and instrumentalities of the government, including government-owned and controlled corporations. x x x"
92

TSN, Oral Arguments, pp. 203-206. Id. at 50-51. Id. at 158-59. Id. at 195-200. Id. at 17. CA 108, as amended by PD 715. Promulgating the 7th Regular Foreign Investment Negative List. Sec. 2. of RA 9369.

93

94

95

96

97

98

99

100

Sec. 10 of RA 8436, as amended, states that "once an AES technology is selected for implementation, the Commission shall promptly make the source code available and open to any interested party or groups which may conduct their own review thereof."
101

These include bringing PCOS-2 to the precinct assigned to PCOS1; breaking seal of PCOS-1 to get precinct configuration; and breaking seal of PCOS-2 to remove precinct configuration card.
102

Rollo, p. 845.

103

Leyaley v. Comelec, G.R. No. 160061, October 11, 2006, 504 SCRA 217.
104

Sumulong v. Comelec, 73 Phil. 288, 294-296 (1941).

The Lawphil Project - Arellano Law Foundation

SEPARATE CONCURRING OPINION PUNO, C.J.: Prefatory Statement The broad power to determine whether 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 government1 is exercised with full appreciation by the judiciary of the proper limits of its role in our tripartite form of government. We should take care that this expanded power is not used as a license for courts to intervene in cases involving matters of policy woven with constitutional and legal questions. Since time immemorial, courts have deferred to the wisdom or logic of legislative choices and technical determinations. It is as it should be. By this paradigm, we do not abdicate our fundamental responsibility in annulling an act of grave abuse of discretion in the guise of judicial restraint, but neither do we permit the overarching use of judicial power as to amount to judicial tyranny. A. The Case The petitioners brought this case for Certiorari, Prohibition and Mandamus to declare that public respondents Commission on Elections (COMELEC), and the COMELEC-Special Bids and Awards Committee (COMELEC-SBAC), committed grave abuse of discretion amounting to lack or excess of jurisdiction when it awarded the 2010 Automated Elections Project to private respondents Total Information Management, Inc. (TIM) and Smartmatic International, Inc. (Smartmatic). Petitioners ask the Court to strike down as null and void the July 10, 2009 contract between public respondent COMELEC and private respondents for being contrary to the Constitution, statutes, and established jurisprudence.

On June 7, 1995, Congress passed Republic Act No. 8046 adopting an Automated Election System (AES) in the Philippines. RA 8046 authorized COMELEC to conduct a nationwide demonstration of a computerized election system and allowed the poll body to pilot-test the system in the March 1996 elections in the Autonomous Region in Muslim Mindanao (ARMM). On December 22, 1997, Congress enacted Republic Act No. 84362 (RA 8436), otherwise known as the "Election Modernization Act" authorizing COMELEC to use an AES for the process of voting, counting votes and canvassing or consolidating the results of the national and local elections. It also mandated the poll body to acquire automated counting machines (ACMs), computer equipment, devices and materials, and adopt new electoral forms and printing materials. The COMELEC, however, was not able to implement the AES for the positions of President, Vice President, senators and parties, organizations or coalitions participating under the party-list system throughout the entire country, as provided in RA 8436. The automation was limited to the provinces of Lanao del Sur, Maguindanao, Sulu, and Tawi-tawi due to lack of material time and funding. The COMELEC was not also able to implement an AES in the May 2001 elections due to time constraints. But on October 29, 2002, the COMELEC adopted Resolution 02-0170, which resolved to conduct biddings for the three phases of the AES: Phase I, voter registration and validation system; Phase II, automated counting and canvassing system; and Phase III, electronic transmission. The COMELEC awarded Phase II for the provision of the ACMs to the Mega Pacific Consortium (MP Consortium). The Information Technology Foundation of the Philippines (ITFP), among others, petitioned this Court to declare null and void the award of the contract to the MP Consortium. In Information Technology Foundation of the Philippines v. COMELEC,3 this Court held that the contract was void for failure to establish the identity, existence and eligibility of the alleged consortium as a bidder; the ACMs failure to pass the tests of the Department of Science and Technology (DOST); and the ACMs failure to meet the required accuracy rating as well as safeguards for the prevention of double counting of precinct results.

On January 23, 2007, Congress passed Republic Act No. 9369 (RA 9369), amending RA 8436. It specified the modes of implementing the AES, i.e., either paper-based or a direct recording electronic (DRE) system, for the process of voting, counting of votes and canvassing/consolidation and transmittal of results of electoral exercises. It also provided that for the next election, the AES shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao.4 In addition, it provided that with respect to the May 10, 2010 elections and succeeding electoral exercises, the system procured must have demonstrated capability and been successfully used in a prior electoral exercise here or abroad. However, participation in the 2007 pilot exercise shall not be conclusive of the system's fitness.5 Again, the AES was not implemented in the May 2007 elections due to lack of funds and time constraints. But the AES was used in the August 11, 2008 ARMM elections, where both DRE and the paperbased Central Count Optical Scan (CCOS) machines were used. On March 5, 2009, Republic Act No. 9525 (RA 9525)6 was passed by the House of Representatives and the Senate, appropriating the sum of Eleven Billion Three Hundred One Million Seven Hundred Ninety Thousand Pesos (P11,301,790,000.00) for an AES to be used in the May 10, 2010 automated national and local elections. From March 13 to 16, 2009, the COMELEC published and posted an invitation for vendors to apply for eligibility and to bid for the procurement of counting machines, including the supply of ballot paper; electronic transmission services using public telecommunications networks; training; technical support; warehousing; deployment; installation; pull-out; systems integration; and overall project management to be used in the automation of the counting, transmission and canvassing of the votes for the May 10, 2010 synchronized national and local elections. On March 18, 2009, the COMELEC issued the Terms of Reference/Request for Proposal for Solutions, Terms & Conditions for the Automation of the May 10, 2010 Synchronized National and Local Elections (TOR/RFP), as promulgated in COMELEC Resolution 8591, dated March 11, 2009, with the following components:

a. Component 1: Paper-Based Automated Election System 1-A. Election Management System (EMS) 1-B. Precinct-Count Optical Scan (PCOS) System 1-C. Consolidated/Canvassing System (CCS) b. Component 2: Provision for Electronic Transmission of Electronic Results using Public Telecommunications Networks c. Component 3: Overall Project Management On March 19, 2009, eleven prospective bidders obtained bid documents from the COMELEC for the automation of the 2010 elections. On March 23, 2009, RA 9525 was signed by President Gloria Macapagal-Arroyo appropriating P11,301,790,000.00 as supplemental appropriation for an automated elections system and other purposes. On March 27, 2009, the COMELEC conducted a Pre-Bid Conference for the automation of the counting, transmission and canvassing of votes for the May 10, 2010 elections. On April 23, 2009, TIM and Smartmatic entered into a Joint Venture Agreement (JVA) to form the joint venture known as Smartmatic TIM Corporation. On May 4, 2009, seven suppliers submitted their formal bids. The COMELEC-SBAC declared all the seven bidders ineligible for failure to comply with the pass/fail criteria of the COMELEC. Upon motion for reconsideration of the suppliers, three consortiums were reconsidered by the COMELEC-SBAC, namely Indra Consortium, Smartmatic-TIM, AMA-ESS and the Gilat Consortium. After evaluation of their technical proposals, the COMELEC-SBAC declared Indra Consortium and Smartmatic-TIM to have passed. The COMELEC-SBAC then proceeded with the opening of the financial proposals. The Technical Working Group (TWG) evaluated

and reviewed the financial proposals of Indra Consortium and Smartmatic-TIM. On June 3, 2009, the COMELEC-SBAC recommended to the COMELEC en banc the award of the Contract for the Provision of an Automated Election System for the May 10, 2010 Synchronized National and Local Elections (Automation Contract) to the joint venture of Smartmatic-TIM. Smartmatic-TIM was found to have the lowest calculated responsive bid (LCRB); and to have passed all the eligibility, technical, and financial requirements. The COMELEC-SBAC noted that Smartmatic-TIMs machines passed all the tests and systems evaluation with an accuracy rating of 100%. This finding was verified and validated in the postqualification proceedings. The total bid of Smartmatic-TIM amounting to Seven Billion One Hundred Ninety-one Million Four Hundred Eighty-four Thousand Seven Hundred Thirty-nine and 48/100 Philippine pesos (P7,191,484,739.48) was found by the COMELEC to be within the approved budget for the contract of Eleven Billion Two Hundred Twenty-three Million Six Hundred Eighteen Thousand Four Hundred and 0/100 Philippine pesos (P11,223,618,400.00).7 On June 8, 2009, the COMELEC Advisory Council8 submitted its observations on the procurement proceedings of the SBAC, with the conclusion that these were transparent and in conformity with the law and the TOR/RFP. It noted that Smartmatic-TIM had a 100% accuracy rating. The Advisory Council has the mandate to participate as non-voting members of the COMELEC-SBAC in the conduct of the bidding process for the AES. On the same date, June 8, 2009, the Office of the Ombudsman, which had previously created Task Force "Poll Automation",9 submitted its "Process Audit Observation Report." The Ombudsman Task Force also found the above proceedings and systems to be consonant with the Constitution, procurement laws, and RA 9369. The Parish Pastoral Council for Responsible Voting (PPCRV) representative likewise submitted a report, which concurred with the final report of the COMELEC-SBAC. On June 9, 2009, the COMELEC en banc promulgated Resolution No. 8608, confirming Smartmatic-TIM as the bidder with the LCRB and awarding the contract for the automation of the elections on May

10, 2010 to the joint venture. On June 10, 2009, the COMELEC awarded the contract to Smartmatic-TIM to supply 82,000 Precinct Count Optical Scan (PCOS) machines to be used in the 2010 elections. Subsequently, Jose Mari Antuez, the President of TIM, informed COMELEC Chairperson Jose Melo that TIM was withdrawing from the partnership with Smartmatic, due to irreconcilable differences and loss of confidence. The scheduled signing on June 30, 2009 of the Automation Contract between COMELEC, Smartmatic and TIM did not take place. Following a series of discussions, Smartmatic and TIM were able to settle their internal dispute. Smartmatic and TIM then caused the incorporation of their joint venture, pursuant to the JVA. On July 8, 2009, the Securities and Exchange Commission (SEC) issued a Certificate of Incorporation to Smartmatic TIM Corporation. On July 10, 2009, the Smartmatic TIM Corporation entered into the Automation Contract with the COMELEC. The contract price was P7,191,484,739.48. The petition at bar raises the following -B. Issues 1. Whether RA 8436, as amended by RA 9369, requires the conduct of a pilot exercise as a condition precedent to the full nationwide automation of the election. 2. Whether RA 9525 has impliedly repealed the pilot testing requirement. 3. Whether Smartmatic and TIM entered into a valid joint venture agreement. 4. Whether any nationality requirement is applicable. 5. Whether the AES chosen by the COMELEC complies with the "prior successful use" qualification set forth in Section 12 of RA 8436, as amended.

6. Whether the PCOS machines offered by the Smartmatic-TIM Consortium satisfy the minimum system capabilities mandated by Section 6 of RA 8436, as amended. C. Discussion A touchstone of our Constitution is that critical public policy judgments belong to the legislative branch, and the Court must not unduly intrude into this exclusive domain. In enacting RA 8436 (Election Modernization Act) on December 22, 1997, the legislature has clearly chosen the policy that an AES shall be used by the COMELEC for the process of voting, counting of votes and canvassing/consolidation of results of the national and local elections.10 It decided to put an end to the manual conduct of our elections that has frustrated the honest casting of votes by our sovereign people. In the pursuit of its objective, the legislature defined what it considered an AES and provided the standards for its implementation. It further determined the minimum functional capabilities of the system and delegated to the COMELEC the development and adoption of a system of evaluation to ascertain that the minimum system capabilities would be met. The policy decision of Congress to adopt an AES is not under question. It is the manner the COMELEC is implementing the AES that is assailed by the petitioners. The first issue is whether the conduct of an AES in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao is a condition precedent to the nationwide implementation of the AES. c.1 The conduct of the pilot exercise of the AES is a condition precedent to its nationwide implementation Whether the conduct of the pilot exercise of the AES is a condition precedent to its nationwide implementation involves the correct interpretation of Section 5 of RA 8436. The interpretation of Section 5, RA 8436, as amended, is nothing less than a brain twister. It appears like a Rorschach inkblot test, in which petitioners and respondents assign meaning to certain words as though they were

deciphering images formed by inkblots. Using the same word of the law, they arrive at different conclusions. Thus, the petitioners interpret the word shall in the first proviso of Section 5, RA 8436, as amended, to support their thesis that the pilot exercise of the AES is a condition precedent prior to its full implementation. The proviso states that "the [automated election system] shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao."11 Similarly, the respondents interpret the word shall in the last sentence of the provision, which states that "in succeeding regular national or local elections, the [automated election system] shall be implemented nationwide,"12 and submit that the pilot exercise of the AES is not a condition precedent. Further, they contend that the use of the AES in at least two provinces and two highly urbanized cities each in Luzon, Visayas and Mindanao refers only to the national and local elections immediately following the passage of RA 9369, i.e., the May 2007 national and local elections. They argue that this was just an acknowledgment by Congress that there was not enough time or funds to conduct a full nationwide automation of the May 2007 election. The respondents reading of Section 5 disregards the tenor of the entire provision. A rational reading of the entire provision will show that the different parts isolated and then interpreted by the respondents are connected by the conjunctions provided, that and provided, further that and provided, finally that. These conjunctions signify that the clauses that follow the conjunction are a pre-requisite or a condition to the fulfillment of the previous clause. The words provided, that mean the same as "as long as," "in order that," and "if only." Thus, the provision should be read and understood as follows: Part 1: To carry out the above-stated policy, the Commission on Elections, herein referred to as the Commission, is hereby authorized to use an automated election system or systems in the same election in different provinces, whether paper-based or a direct recording electronic election system as it may deem appropriate and practical for the process of voting, counting of votes and canvassing/consolidation and transmittal of results of electoral

exercises:13 Provided, That Part 2: for the regular national and local elections, which shall be held immediately after the effectivity of this Act, the AES shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao, to be chosen by the Commission: Provided, further, Part 3: That local government units whose officials have been the subject of administrative charges within sixteen (16) months prior to the May 14, 2007 elections shall not be chosen: Provided finally, Part 4: That no area shall be chosen without the consent of the Sanggunian of the local government unit concerned. The term local government unit as used in this provision shall refer to a highly urbanized city or province. Part 5: In succeeding regular national or local elections, the AES shall be implemented nationwide.14 In this light, Section 5 should be interpreted to mean that the COMELEC is authorized to use an AES as long as the following requisites are complied with: (1) for the regular national and local elections, which shall be held immediately after the effectivity of the Act, the AES shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao; (2) that local government units whose officials have been the subject of administrative charges within sixteen months prior to the May 14, 2007 elections shall not be chosen; and (3) that no area shall be chosen without the consent of the Sanggunian of the local government unit concerned. And, when the above conditions are complied with, the AES shall be implemented nationwide in succeeding regular national and local elections. The last sentence of the provision which provides that "[i]n succeeding regular national or local elections, the AES shall be

implemented nationwide" may appear as not connected to the enumeration of requirements for the use of an AES. But this does not mean that it can be read in isolation and independently from the rest of the provision. Section 5 expressly declares that the COMELEC's authority to use the AES on a nationwide scale is contingent on the prior conduct of partial automation in two provinces and two highly urbanized cities each in Luzon, Visayas and Mindanao. Likewise, the word "pilot testing" may not have been used in the provision, but the intent to test the use of an AES is evident in its text. The mandatory nature of the initial conduct of an automated election in two provinces and two highly urbanized cities each in Luzon, Visayas and Mindanao is highlighted by the use of the word shall. That this is a condition precedent before a full nationwide automated election can be used in the succeeding elections is buttressed by the use of the words provided, that. Thus, the COMELEC is authorized to use an AES, provided that the AES is first used in two provinces and two highly urbanized cities each in Luzon, Visayas and Mindanao, after which, in the following regular national and local elections, the AES shall be implemented nationwide. Pushing to the limit their argument that pilot testing is not a condition precedent to the conduct of an AES, the respondents rely on Section 12 of RA 8436, as amended, which provides thus: SEC. 12. Procurement of Equipment and Materials. To achieve the purpose of this Act, the Commission is authorized to procure, in accordance with existing laws, by purchase, lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities and other services, from local or foreign sources free from taxes and import duties, subject to accounting and auditing rules and regulations. With respect to the May 10, 2010 elections and succeeding electoral exercises, the system procured must have demonstrated capability and been successfully used in a prior electoral exercise here or abroad. Participation in the 2007 pilot exercise shall not be conclusive of the system's fitness. (Emphasis supplied) The respondents press the point that Section 12, supra, indicates that pilot testing in the May 2007 elections is not a mandatory requirement

for the choice of an AES to be used in the May 2010 elections, nor is it a prerequisite for the full automation of the May 2010 elections, since the systems capability may have been used in an electoral exercise abroad. Respondents also contend that since participation in the 2007 pilot exercise is expressly declared as inconclusive of the systems fitness, then the non-use of the PCOS machines in the 2007 electoral exercise is not a bar to the implementation of a full nationwide automation in the 2010 elections. With due respect, the respondents have a murky understanding of the last sentence of Section 12. It merely states that "[p]articipation in the 2007 pilot exercise shall not be conclusive of the system's fitness." It does not say that participation of the procured system in the 2007 pilot exercise is not a condition precedent to the full nationwide implementation of the AES. The section says in unadorned language that as long as the system procured presumably for the May 2007 elections has been shown to have demonstrated capability and has been successfully used in a prior electoral exercise here in the Philippines or abroad, the system may also be used in the May 2010 and succeeding elections. In fine, the subject of the section is the fitness of the system procured for the May 2007 automated pilot exercise; it has no relation to the issue of whether the pilot exercise is a condition precedent to the implementation of full nationwide automated elections. The deliberations of the Joint Congressional Oversight Committee on [the] Automated Election System (Joint Committee on AES)15 should further enlighten us on the purpose of the last sentence in Section 12 of RA 8436, as amended: that "[p]articipation in the 2007 pilot exercise shall not be conclusive of the system's fitness." They reveal that the purpose is simply to avoid a situation in which the choices of machines and the kind of AES to be used in the 2010 elections would be limited to those that were piloted in the 2007 elections. Thus, Senator Richard Gordon explained that the purpose behind the statement that participation in the 2007 pilot exercises was not conclusive of the systems fitness was to ensure that newly developed technology may still be considered for the 2010 elections, even though it was not tested in the 2007 pilot exercise. Representative Teodoro Locsin concurred in the same view. Thus:

THE CHAIRMAN (SEN. GORDON). Precisely that was placed there so that you can get newly discovered machines or newly invented machines that can be utilized so that in the 2010 elections it would have been tried in an example here in our country. THE CHAIRMAN (REP. LOCSIN). I think the purpose of this was any bidder who can prove and who has already carried out an electoral exercise- sure, of course, he has a leg up of all other but thats not conclusive which assumes that others who have not the same experience will be allowed to also bid. (Emphasis supplied.)16 Representative Locsin elucidated that participation in the pilotexercise was not conclusive of the systems fitness, because pilots were easier to do than national exercises. This was also to emphasize that those who participated in the pilot exercise were not to be preferred over those who were not able to participate in the pilot exercise. Thus: THE CHAIRMAN (REP. LOCSIN). Although this is a detail, if I may no, I think you are just doing your best that you just read what it says. It simply says that, I think, everyone is entitled to put their bid. Your (sic) have the discretion to decide whether or not they have the capability. A company may have had many exercises in Latin America but for this particular exercise they may not be prepared to deploy the best then we just forget it. But when it says "participation in 2007 pilot exercise shall not be conclusive," that does not mean to exclude anyone who did not participate in 2007. It was only meant to say our fear is that somebody may be so good in the pilot but then hell say, "Hey, I won the pilot therefore you have to give me the national election." Thats all it meant because pilots are always easier to do than national exercises. (Emphasis supplied.)17 The respondents also have an erroneous reading of the use of the word "pilot exercise" instead of "pilot testing." They claim that the use of the word "pilot exercise" instead of "pilot testing" is indicative of the intention to only initially use or employ the AES in the 2007 elections rather than make it a condition precedent. Again, this submission is not sustained by the deliberations of the Senate. "Pilot-exercise" was used in the law instead of "pilot-test" to avoid the notion that a test must first be passed in the 2007 elections in order to continue with

the use of the AES as a mode of conducting the succeeding elections. The lawmakers wanted to avoid the use of the word "test," so that in case the AES to be used in the 2007 elections did not well perform as planned, still, the automation of the elections in the next elections would proceed. This intent is reflected in the debate between Senator Richard J. Gordon (Senator Gordon) and Senator Manuel A. Roxas II (Senator Roxas) over an amendment to Section 5 of RA 8436, proposed by the latter. Senator Roxas proposed to add the words "on a test basis" to refer to the use of an AES. The amendment is as follows: Section 5. Authority to Use an Automated Election System. To carry out the above-stated policy, the Commission on Elections, herein referred to as the COMELEC is hereby authorized to use ON A TEST BASIS AN automated election system x x x.18 (capitalization in the original.) Senator Roxas wanted to use the word "test," so that after a "test" of the AES in the 2007 elections, Congress would know whether the implementation of the 2007 national and local AES was successful. Thereafter, Congress would decide whether the AES as a mode of conducting elections should still be used for the successive elections. This is clear from the following exchange of remarks between Senator Roxas and Senator Gordon: SENATOR ROXAS. In any event, Mr. President, I would like now to go to line 18 and read into the Record the proposed amendment. Again, as I said earlier, so as not to confuse those who are following the language, I will deliberately not read the word "test" subject to whatever happens to that word in subsequent debate and dialogue. The proposed amendment reads: THE FURTHER IMPLEMENTATION OF AN AES OR AES TECHNOLOGY SHALL BE DECIDED UPON BY CONGRESS, THROUGH A JOINT RESOLOUTION, UPON RECOMMENDATION OF THE OVERSIGHT COMMITTEE. FOR THIS PURPOSE, THE OVERSIGHT COMMITTEE SHALL CONDUCT COMPREHENSIVE EVALUATION PERFORMANCE OF SAID AES OR AES TECHNOLOGY DURING INITIAL IMPLEMENTATION OF RESULTS

WITH MANUAL TABULATION. IT SHALL THEN MAKE APPROPRIATE RECOMMENDATIONS TO CONGRESS ON WHETHER ANY FURTHER IMPLEMENTATION SHALL BE CONDUCTED OR OTHERWISE. IN CASE OF FURTHER IMPLEMENTATION AND THE INCREMENTAL COVERAGE BY ALL AES SHALL NOT BE MORE THAN TEN PERCENT (10%) OF THE TOTAL COVERAGE IN TERMS OF NUMBER OF DISTRICTS. That is the proposed amendment, Mr. President. The proposed amendment, first, from a comprehensive perspective seeks to revert back to Congress the judgment whether the implementation of the AES in 2007 national and local elections was successful or not. As envisaged in the bill, Mr. President, we are leaving to the Comelec the decision to choose the appropriate technology that will be implemented. There will be a series of advisory or a number of advisory and TAHEC bodies that will hopefully inform that decision. xxxx SENATOR GORDON. I thank the distinguished gentleman from Capiz, Mr. President. I know he tried to amend this with sincerity, but I also would like to maintain that this is not a test, first and foremost, because he speaks of a test, and I know he has already stated what word to use. As I pointed out, the words to be used should be: The Automated Election System will be implemented in the province he has already spoken about. But, upon the other hand, I am concerned about "shall be decided upon by Congress through a joint resolution," referring to line 18,-before the implementation of an AES. I am removing the word "test", -"before the implementation of AES technology shall be decided upon by Congress." Mr. President, that line speaks volumes. The mother bill that we are amending which is enacted in 1987 decided a policy that we are going to go on an automated election. In other words, if we follow the logic here, we are practically saying: "Well, we may be changing our mind. Maybe we are not in automation mode again." This very line suggests and clearly states that: "Hey, it is going to go back to Congress." And, in fact, through a joint resolution, which I think

cannot even be done because Congress amends even without this suggestion. It can amend even without these lines. It can amend the law if it chooses to do so. Which means that after the Automated Election System, if we feel that we no longer want to have an automated election system, Congress cannot at anytime say: "No, we are no longer in that mode." What our bill provides is that we are already on this heuristic notion, if I may use a word I learned in school a long time ago, which is a trajectory that is headed towards a particular direction aimed at modernizing the election by way of AES. And we have put in the safeguards the minimum requirements and by so doing, after the election has been conducted, the Comelec which is the agency, whether we like it or not, that has been mandated by the Constitution to run our elections simply goes on and says: "All right, we will expand upon the recommendation of the AES, along with the oversight committee." Now, if that is the case, Mr. President, there is no need to go back to Congress. But if Congress sees it fit, as I pointed out, we are not obviating that possibility. If Congress sees it fit, they can amend it. But as far as I am concerned, I think the rule should be that we are on an automated rule should be that we are on an automated election mode and we should not say continue on with it. But as far as I am concerned, I think the rule should be that we are on an automated election mode and we are on an automated election more and we should continue on with it. But we should not say after the exercise, parang lumalabas na test, we will now go back and decide whether we are still on an automated election mode and say we might be going back to manual. x x x We have debated on the automated, we passed this on the past period of debate and we have already decided that we are continuing with the trajectory of automated election. I would not want to go back again to a situation where Congress will say, "We are changing his (sic) mind." Although, it is within its prerogative anyway at any time. (Emphasis supplied; capitalization in the original.) 19 Senator Roxas amendment which contained the word "test," was

rejected. The reason is not because the partial use of the AES in the 2007 election was not considered as a condition precedent to its full implementation in the 2010 elections. Rather, it was because the use of the word "test" would have implied that Congress would still have to decide whether the conduct of the AES had passed its requirements; whether an AES should still be continued in the succeeding elections; or whether, based on the "test," the conduct of the elections should revert to manual. Senator Gordon further made it clear that the reason why the AES should first be implemented in certain parts of the country and not immediately throughout the entire country was that "a big bite must not be taken right away."20 The implementation of the system must be done in phases: first, it must be piloted in parts of the Philippines, and only then can it be implemented nationwide. This is reflected in the following statement of Senator Gordon: SENATOR GORDON. x x x x Mr. President, this is precisely why we are starting the automation in two provinces and two cities so that we do not take a big bite right away. And I accepted the amendment of the Minority Leader precisely because we want to make sure that the bite is sufficiently enough for us to be able to run the automation. x x x We trust the Comelec but we verify the system because we are hamstrung by the constitutional provision that the Comelec is the one that is principally in charge of running the elections, but at the same time, we have an Advisory Council, composed of our experts, to guide them. (Emphasis supplied) 21 xxxx Now, the sample is only two provinces and two cities, Mr. President, so that we would be able to get a gauge. x x x (Emphasis supplied)22 x x x So, it is really an automated system that we advocate and, obviously, the two provinces and two cities for Luzon, Visayas and Mindanao will be the initial approach towards this effort. So that when we go and expand in the next elections in 2010, based on the Oversight Committee and based on the Congress itself, if we want to amend it again, we can do so. (Emphasis supplied)23

In sum, both from the words of RA 8436, as amended by RA 9369, and its legislative intent, it is clear that an AES shall be conducted; and that the COMELEC is authorized to implement the AES, provided that it is initially piloted in two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao. c.2 Be that as it may, the enactment of RA 9525 has impliedly repealed the Pilot Exercise Requirement In a shift in stance, it is argued by the respondents that RA 8436, which requires that a piloting of the AES be used in at least two provinces and two highly urbanized cities each in Luzon, Visayas and Mindanao before a full nationwide automation of the elections can be conducted, has been impliedly repealed by the enactment of a later law, RA 9525. They proffer the view that RA 9525,24 appropriating P11,301,790,000.00 for the conduct of an AES in the May 10, 2010, is for the full implementation of automated elections in 2010. They argue that when RA 9525 was enacted on March 5, 2009, Congress was aware that there was no pilot exercise conducted in two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao; and despite this failure, Congress still appropriated the entire amount of P11,301,790,000.00 for the full nationwide implementation of the AES in the May 2010 elections. By the enactment of the P11,301,790,000.00 supplemental appropriation, the respondents claim that Congress conveyed the intention to proceed with full nationwide automation and do away with the requirement of conducting a pilot exercise. The respondents also rely on the deliberations of the Senate and the House of Representatives to support their thesis. On the other hand, the petitioners counter that there was no implied repeal of the requirement of pilot testing of the AES in two provinces and two highly urbanized cities each in Luzon, Visayas and Mindanao. They cite Section 2 of RA 9525, viz.: Section 2. Use of Funds. - The amounts herein appropriated shall be used for the purposes indicated and subject to: (i) the relevant special and general provisions of Republic Act No. 9498, or the FY 2008 General Appropriations Act, as reenacted, and subsequent General Appropriations Acts, and (ii) the applicable provisions of Republic Act

No. 8436, entitled: "An Act Authorizing the Commission on Elections to Use an Automated Election System in the May 11, 1998 National or Local Elections and in subsequent National and Local Electoral Exercises, Providing Funds Therefor and for Other Purposes", as amended by Republic Act No. 9369: Provided, however, That disbursement of the amounts herein appropriated or any part thereof shall be authorized only in strict compliance with the Constitution, the provisions of Republic Act No. 9369 and other election laws incorporated in said Act so as to ensure the conduct of a free, orderly, clean, honest and credible election and shall adopt such measures that will guaranty transparency and accuracy in the selection of the relevant technology of the machines to be used on May 10, 2010 automated national and local election. (Emphasis supplied.) The petitioners stress that Section 2 provides that the amount appropriated shall be used for the implementation of the May 2010 automated elections, subject to the applicable provisions of RA 8436, as amended. They further emphasize that Section 2 states that the disbursement of the amount appropriated or any part thereof shall be done only in strict compliance with the Constitution, and the provisions of RA 9369 and other election laws. Thus, the petitioners conclude that the mandatory requirement of pilot testing was not repealed but reiterated by Congress in said section. The petitioners further argue that implied repeals are not favored, and two laws must be absolutely incompatible before an inference of implied repeal may be drawn. They contend that RA 9525 is not totally inconsistent with the requirement of pilot testing in Section 5 of RA 8436, as amended, such that the provisions of RA 9525 must be interpreted and brought into accord with the old law. To resolve this issue of implied repeal, the Court must first determine whether it was the intent of Congress to push through with full nationwide automation of the elections in May 2010. RA 9525 is unclear whether Congress appropriated P11,301,790,000.00 for the conduct of full or partial automated elections, or whether it intended the automated elections to be conducted nationwide or only in the pilot areas. To clear this uncertainty, the Court should resort to the deliberations of the Senate and the House of Representatives, as well as the hearings of the Joint Committee on AES.

Let us first look at the deliberations of the House of Representatives when it considered House Bill 5715 (HB 5715), entitled "An Act Appropriating the Sum of Eleven Billion, Three Hundred One Million, Seven Hundred Ninety Thousand Pesos as Supplemental Appropriations for an Automated Election System and for Other Purposes. From the deliberations, the assumption of the members of the House of Representatives who engaged in the debate was that the appropriation was for a full nationwide implementation of the AES in the May 2010 elections. Thus, in the sponsorship speech of Representative Junie Cua of the Lone District of Quirino, he stated that the appropriation was for the full nationwide automation of the May 2010 elections, viz.: REP. CUA. x x x x For your consideration, my dear esteemed colleagues, I have the privilege of submitting the budget of the Commission on Elections for the automation of the 2010 national and local elections. Out of the budget proposal of P11.3B, the COMELEC is proposing to spend about P8.2B for the lease of election automation equipment. This will cover the cost of 80,000 Precinct Count Optical Scanners or PCOS that will be deployed throughout the country. These devices will count hand-marked ballots that will be printed on ballot paper costing a total of P1B. We will be spending about P78B on ballot boxes. Once the ballots are so counted, the results will then be electronically transmitted to the public quicker than any quick count in our election history and for this, we need P400M. And finally P1.7B, more or less, will then be spent to ensure that everything goes smoothly through the strong project management and associated services that the COMELEC will put in place. (Emphasis supplied.)25 xxxx As AKBAYAN Party-list Representative Risa Hontiveros-Baraquel (Representative Hontiveros-Baraquel) was asking clarificatory questions to Representative Junie Cua, she also stated that the appropriation was for the conduct of the automated elections of the

entire country and not merely a region therein, viz.: REP. HONTIVEROS-BARAQUEL. x x x x In the budget breakdown presented by the COMELEC in our committee hearing, the amount for operating expenses was P50 million, which is only equal to the operating expenses for the ARMM elections. And, since this would be a national elections, not just in one region of our country, I asked then, "Shouldnt the amount be more in the vicinity of one or one-and-a-half billion pesos?" There is part of the response was in the remarks column of the COMELEC, where they noted that some of the operating expenses, the transmission costs, would be carried by public TELCOS. (Emphasis supplied.) x x x xxxx REP. CUA. Yes, Mr. Speaker, after consulting with the technical people of the commission, I understand that the Lady is correct that what was originally allocated for operating cost or transmission cost was 50 million. But after reevaluating the cost breakdown, they have increased this to 200 million, Mr. Speaker, Your Honor. Yes, 200 million, Mr. Speaker.26 (Emphasis supplied) HB 5715 was approved on the third reading, with 193 members of the House of Representatives voting in the affirmative, one voting in the negative, and one abstention. We have also examined the deliberations of the Senate which constituted itself into a Committee of the Whole to consider HB 5715. The debates confirmed that the senators were also of the understanding that the appropriation of P11.3 billion was for the full nationwide automation of the May 2010 elections. In the same vein, the members of the Joint Committee on AES took it as a given that the May 2010 elections would be implemented throughout the entire country. The September 1, 2008 hearing of the Joint Committee on AES took up the COMELEC evaluation report on the automated elections held in the ARMM. Senator Loren Legarda asked the Chairperson of the COMELEC Advisory Council, Mr. Ray Anthony Roxas-Chua III, regarding the cleansing of the list of voters;

in the process of doing so, she assumed that the 2010 elections were to be full automated. Thus: SEN. LEGARDA. x x x x So therefore, if I understand correctly, the cleansing of the voters list through the enactment of a new law and the funding from Congress is essential because it is a partner towards the automation, complete automation, by 2010. Is that correct? (Emphasis supplied.)27 Representative Edcel Lagman held the same assumption, as he asked the following question: REP. LAGMAN. Mr. Chairman, how many machines and allied equipment do you need for the nationwide implementation of the automation by 2010? (Emphasis supplied.)28 During the September 9, 2008 hearing of the Joint Committee on AES, Senator Edgardo Angara had an exchange with Chairman Melo. It was unmistakable from the exchange that not only did the Congress contemplate a full nationwide automation of the May 2010 elections, but also that the approval of a budget of P11.3 billion was meant for the conduct of a full nationwide automation of the 2010 elections, and not a partial or a pilot of the AES in selected areas. SEN. ANGARA. Mr. Chairman, yesterday the Finance Committee of the Senate started the budget hearing. So, in the Senate we are already beginning to do that. Now let me just ask before I say something more. Has the budget of the Comelec been heard in the House? MR. MELO. Not yet. SEN. ANGARA. Good! Good, good, because that is your window of opportunity. Youve got to catch the House hearing on the budget because its better that your proposed budget for the elections of 2010 are incorporated in the House itself. Of course, we can supplement it in the Senate but, as you know, the Senate cannot tap the Presidents Budget. So its better that we negotiate it in the House.

The presentation yesterday by the Budget Secretary is you will have about 3.8B for 2010. And the 3.8B, billion (sic), also includes registration, etcetera, etcetera so it does not exclusivelyAnd when we asked, "Is this enough for full automation?" Secretary Andaya was frank enough. "No, no. This is the figure that they submitted to us four years ago and we are really expecting a submission of a revised cost of computerization." This is why I think you must seize the opportunity. And I would suggest very strongly that the advisory committee sit down with potential bidders and really go over every single figure in that costing because its going to be unfortunate that this will not push through. Automation will not push through simply because its so expensive that therell be such a huge public outcry against it. Whereas, you and I know that this may be one good way to have clean elections and speedier results announced in our country. Thats why I think its very important that you bargain hard and I hope that the suppliers will see also the public service element in this experiment; that I hope they wont even cut a profit out of this transaction because if you are successful, I think this will be one of the biggest use of their technology at 45 million or 35 million voters. I dont know if theres any other country who has that number of voters using this particular technology. So, in terms of selling point, this will be one of their strongest selling points. So I urge the representatives of the vendors to consider that very strongly even if they have to donate a substantial portion of that cost for the sake of democracy, di ba?29 (Emphasis supplied.) Indeed, several times during the hearings of the Joint Committee on AES, the members pointed out that full nationwide elections would be conducted on May 10, 2010, viz.: MR. TOLENTINO.30 Yes, Sir. The costing here would be the purchased (sic) price. And if we base it on the rate that we sued for the ARMM elections, the lease cost would be 70 percent of the total budget. THE CHAIRMAN (SEN. GORDON). Well, I got thrown off because there is an allegation made by Mr. Dizon that says that they can

make it for 14 to P18 billion, is that correct? MR. DIZON. Yes, Mr. Chairman. THE CHAIRMAN (SEN. GORDON). DRE machines MR. DIZON. Yes, Mr. Chairman. THE CHAIRMAN (SEN. GORDON). for the entire country, right? MR. DIZON. Yes, Mr. Chairman. Thats approximately 37 million voters.31 (Emphasis supplied.) In the March 4, 2009 hearing: THE CHAIRMAN (SEN. ESCUDERO). The only thing I am raising this (sic), Mr. Chairman, is without violating inter-chamber courtesies, we are talking here of 40, nearly 50 million voters and you are transmitting a vote located thousands of kilometers away in an area we are not even sure if there is signal, dahil kung wala ibababa ho physically iyong balota mula duon sa presinto para dalhin o maglalagay kayo ng satellite, hindi ko ho alam kung ano ang gagawin ninyo, wala pa ho tayo doon. x x x So, please, bear with us as your Oversight Committee attempts to sift through all of these various inputs and information and try to find some rhyme or reason into it and justify perhaps our action of the proposed full automation for the 2010 elections. x x x (Emphasis supplied.) xxxx THE CHAIRMAN (SEN. ESCUDERO). And as final point, Mr. Chair, I would like to make of record what we discussed. Kindly also look into the possibility, Mr. Chairman, fully automated tayo, OMR kayo, as you proposed, but in addition to electronic transmission, cant we have an OMR at the provincial level to count the ERs to be produced by our OMRs at the precinct or collapsed precinct level either OMR that can count ER or OMR that can count an encrypted CD from the PCOS located in the collapsed precinct so that you will have a hard copy of the ER at the provincial level which you can easily adopt once you go to the site? x x x32 (Emphasis supplied.)

So it was during the February 2, 2009 hearing of the Senate Committee on Finance for the appropriation of P11.3 Billion for the May 10, 2010 AES, viz.: MR. ROXAS-CHUA. Your Honor, Your Honor, the basis for this is really the ARMM election because we used similar structure. It was also a lease with an option to purchase and this is where we came up with the 70 percent price for the lease with the option to purchase. That is the structure that we used and there was successful bidder so we used that as a basis, as the cost structure for this next election. THE CHAIRMAN.33 Hindi. Siyempre doon sa ARMM, kinocompartmentalized (compartmentalize) ninyo per province. O, Maguindanao, you will use DRE. The rest we will use COS. Oo. So, localized. Ito nationwide ito.34 The Comment-in-Intervention of the Senate of the Philippines also affirmed the congressional intention to implement a full nationwide automation of the elections this May 10, 2010. It categorically stated that the approval of the supplemental budget of P11.3 billion for the upcoming May 10, 2010 elections was not merely for a pilot test, but for a full nationwide implementation of the AES. In the case at bar therefore, there is unmistakable evidence of the legislative intent to implement a full nationwide automation of the May 2010 elections. It is impossible to give effect to this intent and at the same time comply with the condition precedent of conducting pilot exercises in selected areas. The irreconcilability between Section 5 of RA 8436, as amended, and Section 2 of RA 9525 is apparent for Congress could not have maintained the requirement of a pilot exercise as a condition precedent to full automation when it had made it absolutely clear that it wanted to push through with a full nationwide AES this May 2010. Laws of Congress have equal intrinsic dignity and effect; and the implied repeal of a prior by a subsequent law of that body must depend upon its intention and purpose in enacting the subsequent law.35 What is necessary is a manifest indication of a legislative purpose to repeal. Repeal by implication proceeds from the premise that where a statute of a later date clearly reveals an intention on the

part of the legislature to abrogate a prior act on the subject, that intention must be given effect. c.3 COMELECs Award of the Automation Contract to the Smartmatic-TIM Consortium Not Attended by Grave Abuse of Discretion The petitioners attribute grave abuse of discretion amounting to lack or excess of jurisdiction to the COMELEC for awarding the 2010 Elections Automation Project to Smartmatic TIM Corporation, on four grounds, viz.: 1. Private Respondents Smartmatic and TIM allegedly did not execute and submit a valid joint venture agreement evidencing the existence, composition and scope of their joint venture, in violation of the COMELECs own bidding requirements and this Courts ruling in Information Technology of the Philippines, et al. v. COMELEC, et al.;36 2. Even granting that such an agreement was submitted, the joint venture is nevertheless illegal for having been constituted in violation of the nationality requirement, i.e., 60%-40% Filipino-foreign equity ceiling; 3. The AES chosen by the COMELEC does not comply with the "prior successful use" qualification set forth in Section 12 of RA 8436, as amended; and 4. The PCOS machines offered by the Smartmatic-TIM Consortium do not satisfy the minimum system capabilities mandated by Section 7 of RA 8436, as amended. Preliminarily, it should be underscored that RA 8436, as amended by RA 9369, does not mandate the use of any specific voting equipment. Instead, the law gave COMELEC the sole power to prescribe the adoption of the most suitable technology of demonstrated capability37 as it may deem appropriate and practical,38 taking into account the situation prevailing in the area and the funds available for the purpose.39 Absent any capricious and whimsical exercise of judgment on the part of the COMELEC, its determination of the appropriate election technology, as well as the procedure for its procurement,

should be respected. Our judicial function is merely to check and not to supplant the judgment of the COMELEC; to ascertain merely whether it has gone beyond the limits prescribed by law, and not to exercise the power vested in it or to determine the wisdom of its act.40 c.4 Valid JVA was duly submitted The petitioners claim that private respondents Smartmatic and TIM submitted a "sham" joint venture agreement during the bidding process. The claim is premised on the following allegations: (i) that although Smartmatic and TIM were awarded the Automation Contract by the COMELEC on June 9, 2009, it was only on July 6, 2009 (or twenty-seven days later) that they were able to "thresh out their serious differences," sign and thereafter submit their incorporation papers to the Securities and Exchange Commission; and (ii) that the provisions of the JVA do not sufficiently establish the due existence, composition and scope of the Smartmatic-TIM joint venture. As to the first allegation, it should be noted that the TOR/RFP made by the COMELEC does not require that a joint venture bidder be incorporated upon the submission of its bid. Section 2.2.4 of Part IX (B) of the TOR/RFP declares "[m]anufacturers, suppliers and/or distributors forming themselves into a joint venture [...]" as eligible to participate in the bidding for the 2010 Automation Project, without any incorporated vs. unincorporated dichotomy. That the TOR/RFP does not specifically call for incorporation at the time of the bidding is significant, because Philippine law admits of a distinction between simple joint ventures and ordinary corporations.41 In Aurbach, et al. v. Sanitary Wares Manufacturing Corporation, et al.,42 a joint venture was likened by this Court to a partnership, thus: The legal concept of a joint venture is of common law origin. It has no precise legal definition, but it has been generally understood to mean an organization formed for some temporary purpose. It is hardly distinguishable from the partnership, since their elements are similar community of interest in the business, sharing of profits and losses, and a mutual right of control. The main distinction cited by most opinions in common law jurisdiction is that the partnership contemplates a general business with some degree of continuity, while the joint venture is formed for the execution of a single

transaction, and is thus of a temporary nature. This observation is not entirely accurate in this jurisdiction, since under the Civil Code, a partnership may be particular or universal, and a particular partnership may have for its object a specific undertaking. It would seem therefore that under Philippine law, a joint venture is a form of partnership and should thus be governed by the law of partnerships. The Supreme Court has however recognized a distinction between these two business forms, and has held that although a corporation cannot enter into a partnership contract, it may however engage in a joint venture with others. (Citations omitted.) But any remaining doubt as to the need for incorporation is dispelled by Bid Bulletin No. 1943 and Bid Bulletin No. 22,44 issued by the COMELEC-SBAC to provide clarifications to prospective bidders. Both documents acknowledge that a bid by a joint venture may be made either through a joint venture corporation (JVC) or an unincorporated joint venture (UJV). Bid Bulletin No. 19 provides, in relevant part: [Question/Issue:] If the bidding will be made through an unincorporated joint venture (UJV), and the UJV wins the bid, can the UJV partners subsequently assign the contract, after its award, to a newly-formed joint venture corporation (JVC) registered with the Securities and Exchange Commission? The registered JVC will assume all rights and obligations of the UJV. Does Comelec have any requirements for allowing such assignment to the JVC? [Answer/Clarification:] Under the General Conditions of Contract, Sec. 26.1, "The supplier shall not assign his rights or obligations under this contract in whole or in part except with the Procuring entitys prior written consent." x x x xxxx [Question/Issue:] If the bid will be made through a joint venture (JV) (either a UJV or a JVC), is the JV required also to submit a Tax Identification No. and Value Added Tax (VAT) registration? [Answer/Clarification:] Please see Bid Bulletin No. 13. (Emphasis supplied.)

Likewise, Bid Bulletin No. 22 states as follows: [Question/Issue:] How does Joint Venture apply to our group in order to follow the requirement that Filipino ownership thereof shall be at least sixty percent (60%)? [Answer/Clarification:] The 60% Filipino participation refers to capital ownership or the Filipino contribution in the pool of financial resources required to undertake a government project. In an unincorporated joint venture, determination of the required Filipino participation may be made by examining the terms and conditions of the joint venture agreement and other supporting financial documents submitted by the joint venture. (Emphasis supplied.) The only restriction imposed on a UJV bidder (vis--vis a JVC bidder) by the TOR/RFP and the Bid Bulletins is that the COMELEC should consent before the UJV could assign its rights to the Automation Contract to the newly formed JVC. The records show that Smartmatic and TIM complied with the consent requirement. After emerging as the winning bidder, they incorporated the Smartmatic TIM Corporation, the corporate vehicle through which the joint venture is to be carried out.45 COMELEC acquiesced to this arrangement, for it subsequently entered into a contract with this JVC for the Automation Project. The petitioners next assert that the JVA does not sufficiently establish the due existence, composition and scope of the Smartmatic-TIM joint venture, in violation of our ruling in Information Technology of the Philippines, et al. v. COMELEC, et al.:46 that "in the absence of definite indicators as to the amount of investments to be contributed by each party, disbursements for expenses, the parties respective shares in the profits and the like, it seems to the Court that this situation could readily give rise to all kinds of misunderstandings and disagreements over money matters"; and that "[u]nder such a scenario, it will be extremely difficult for Comelec to enforce the supposed joint and several liabilities of the members of the consortium." According to the petitioners, Smartmatic and TIM did not submit documents to show "the full identity of the entity it is dealing with," and "who controls the money, how much did each of these entities invest to (sic) the alleged joint venture, and who has

control over the decision[-]making process of the alleged joint venture." A cursory glance at the JVA belies the petitioners posture. The agreement indicates in a thorough and comprehensive manner the identity, rights, duties, commitments and covenants of the parties, as well as the purpose, capitalization, and other pertinent details in respect of the joint venture, thus: 1. Smartmatic and TIM are the members of the joint venture.47 2. The purpose of the JVC is to carry out and perform jointly, severally and solidarily the obligations of TIM and Smartmatic arising from being declared the winning bidder in the public bidding for the Automation Project, which obligations are spelled out in the [TOR/RFP] released by the COMELEC.48 3. The authorized capital stock of the JVC is one billion, three hundred million Philippine pesos (P1,300,000,000.00), divided into one billion, three hundred million common shares at one peso (P1.00) par value.49 The capital contribution of TIM is equivalent to sixty percent (60%) of the shares to be issued by the JVC, with Smartmatic contributing the residual forty percent (40%).50 4. The contributions51 of the parties are as follows: a. TIM (i) the value-added services pertaining or related to canvassing units, systems integration, transmission and such other services as required by the Automation Project and as indicated in the [TOR/RFP]; (ii) services pertaining or related to logistics, deployment, and manpower; (iii) hardware, software, ballot paper, consumables and such other services as may be requested by Smartmatic; and (iv) local support staff as may be required under the circumstances. b. Smartmatic (i) the development, manufacture and/or supply of [electronic voting machines], other machines and equipment, software, technology and systems; (ii) overall project management as required by the Automation Project and as indicated in the [TOR/RFP]52; and (iii) any other activity not expressly written in the JVA or assigned to TIM.

c. Both parties (i) technical services and/or assistance to carry out the purpose of the JVC; (ii) financial assistance to the JVC; and (iii) additional capital contributions, as may be requested by the Board of Directors. 5. TIM shall be entitled to nominate and elect 60%, and Smartmatic shall be entitled to nominate and elect 40%, of the Board of Directors of the JVC.53 6. The EXCOM shall consist of at least three (3) Directors, two of whom must be Directors nominated by TIM, with the other nominated by Smartmatic.54 7. Profits are to be distributed to TIM and Smartmatic as may be determined by the Board of Directors under Article 4.5 or by the Shareholders under Article 5.3 of the JVA, taking into account the financial requirements of the JVC with respect to working capital.55 8. Any dispute or disagreement that may arise between the parties in connection with the JVA shall first be settled through mutual cooperation and consultation in good faith. Any dispute or disagreement that cannot be amicably settled between the parties shall be submitted to arbitration in Singapore, in accordance with the commercial arbitration rules of the Singapore Chamber of Commerce, the accompanying expenses in either case to be equally shared by both parties.56 9. TIM and Smartmatic are jointly and severally liable to the COMELEC for the obligations of each of TIM and Smartmatic under the TOR/RFP, should they be awarded the contract for the Automation Project.57 Trapped in their own "Catch-22," petitioners invocation of Information Technology is misplaced. The facts of that case are entirely different. In the main, no JVA or document of similar import was submitted during the bidding process to the COMELEC in Information Technology. The only "evidence" as to the existence of the alleged joint venture was a self-serving letter expressing that Mega Pacific eSolutions, Inc., Election.com, Ltd., WeSolv Open Computing, Inc., SK C&C, and ePLDT and Oracle System (Philippines), Inc. had agreed to form a consortium to bid for the Automation Project. This

notwithstanding, the COMELEC awarded the contract to the "consortium." And the Court pointedly ruled: The March 7, 2003 letter, signed by only one signatory "Willy U. Yu, President, Mega Pacific eSolutions, Inc., (Lead Company/Proponent) For: Mega Pacific Consortium" and without any further proof, does not by itself prove the existence of the consortium. It does not show that MPEI or its president have been duly pre-authorized by the other members of the putative consortium to represent them, to bid on their collective behalf and, more important, to commit them jointly and severally to the bid undertakings. The letter is purely self-serving and uncorroborated. To assure itself properly of the due existence (as well as eligibility and qualification) of the putative consortium, Comelec's BAC should have examined the bidding documents submitted on behalf of MPC. They would have easily discovered the following fatal flaws. xxxx In the case of a consortium or joint venture desirous of participating in the bidding, it goes without saying that the Eligibility Envelope would necessarily have to include a copy of the joint venture agreement, the consortium agreement or memorandum of agreement or a business plan or some other instrument of similar import establishing the due existence, composition and scope of such aggrupation. Otherwise, how would Comelec know who it was dealing with, and whether these parties are qualified and capable of delivering the products and services being offered for bidding? In the instant case, no such instrument was submitted to Comelec during the bidding process. This fact can be conclusively ascertained by scrutinizing the two-inch thick "Eligibility Requirements" file submitted by Comelec last October 9, 2003, in partial compliance with this Court's instructions given during the Oral Argument. This file purports to replicate the eligibility documents originally submitted to Comelec by MPEI allegedly on behalf of MPC, in connection with the bidding conducted in March 2003. Included in the file are the incorporation papers and financial statements of the members of the supposed consortium and certain certificates, licenses and permits

issued to them. However, there is no sign whatsoever of any joint venture agreement, consortium agreement, memorandum of agreement, or business plan executed among the members of the purported consortium. The only logical conclusion is that no such agreement was ever submitted to the Comelec for its consideration, as part of the bidding process. It thus follows that, prior the award of the Contract, there was no documentary or other basis for Comelec to conclude that a consortium had actually been formed amongst MPEI, SK C&C and WeSolv, along with Election.com and ePLDT. Neither was there anything to indicate the exact relationships between and among these firms; their diverse roles, undertakings and prestations, if any, relative to the prosecution of the project, the extent of their respective investments (if any) in the supposed consortium or in the project; and the precise nature and extent of their respective liabilities with respect to the contract being offered for bidding. And apart from the selfserving letter of March 7, 2003, there was not even any indication that MPEI was the lead company duly authorized to act on behalf of the others. So, it necessarily follows that, during the bidding process, Comelec had no basis at all for determining that the alleged consortium really existed and was eligible and qualified; and that the arrangements among the members were satisfactory and sufficient to ensure delivery on the Contract and to protect the government's interest. xxxx At this juncture, one might ask: What, then, if there are four MOAs instead of one or none at all? Isn't it enough that there are these corporations coming together to carry out the automation project? Isn't it true, as respondent aver, that nowhere in the RFP issued by Comelec is it required that the members of the joint venture execute a single written agreement to prove the existence of a joint venture. Indeed, the intention to be jointly and severally liable may be evidenced not only by a single joint venture agreement, but also by supplementary documents executed by the parties signifying such

intention. What then is the big deal? The problem is not that there are four agreements instead of only one. The problem is that Comelec never bothered to check. It never based its decision on documents or other proof that would concretely establish the existence of the claimed consortium or joint venture or agglomeration. It relied merely on the self-serving representation in an uncorroborated letter signed by only one individual, claiming that his company represented a "consortium" of several different corporations. It concluded forthwith that a consortium indeed existed, composed of such and such members, and thereafter declared that the entity was eligible to bid. xxxx In brief, despite the absence of competent proof as to the existence and eligibility of the alleged consortium (MPC), its capacity to deliver on the Contract, and the members' joint and several liability therefor, Comelec nevertheless assumed that such consortium existed and was eligible. It then went ahead and considered the bid of MPC, to which the Contract was eventually awarded, in gross violation of the former's own bidding rules and procedures contained in its RFP. Therein lies Comelec's grave abuse of discretion. (Emphasis and underscoring supplied.)58 To make matters worse, the COMELEC in Information Technology awarded the bid to the "consortium" despite some failed marks during the technical evaluation.59 In the case at bar, the Smartmatic-TIM Consortium passed the technical evaluation. It is thus readily apparent that the joint venture of Smartmatic and TIM is not attended by any of the deficiencies of the MP "consortium," as the agreement in the instant case states with precision the "exact nature and scope of the parties respective undertakings, commitments, deliverables and covenants."60 The petitioners repeated recourse to Information Technology betrays a highly myopic and constricted view. c.5 No nationality requirement is violated Petitioners also contend that the joint venture agreement of TIM and

Smartmatic violates the Filipino-foreign equity ceiling, the AntiDummy Law and COMELECs own bidding requirements. I concur fully with the ponencia of Mr. Justice Velasco on this point. There is no constitutional or statutory provision classifying the lease or provision of goods and technical services for the automation of an election as a nationalized activity. To be sure, Section 12 of RA 8436, as amended by RA 9369, explicitly authorizes the COMELEC to procure supplies, equipment, materials, software, facilities, and other services from foreign sources, as follows: SEC. 12. Procurement of Equipment and Materials. To achieve the purpose of this Act, the Commission is authorized to procure, in accordance with existing laws, by purchase, lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities and other services, from local or foreign sources free from taxes and import duties, subject to accounting and auditing rules and regulations. With respect to the May 10, 2010 elections and succeeding electoral exercises, the system procured must have demonstrated capability and been successfully used in a prior electoral exercise here or abroad. Participation in the 2007 pilot exercise shall not be conclusive of the system's fitness. (Emphasis supplied.) Petitioners cannot rely on Executive Order No. 584 (EO 584), containing the Seventh Regular Foreign Investment Negative List, which cites "contracts for the supply of materials, goods and commodities to [a] government-owned or controlled corporation, company, agency or municipal corporation" as limited to forty percent (40%) foreign equity. The reliance cannot be countenanced in light of two basic principles of statutory construction. First, leges posteriores priores contrarias abrogant. In case of an irreconcilable conflict between two laws of different vintages, the later enactment prevails.61 The rationale is simple: a later law repeals an earlier one because it is the later legislative will.62 RA 9369, which allows the COMELEC to procure AES supplies and equipment from foreign sources, became law in 2007, whereas EO 584 is an executive issuance in 2006.

Second, lex specialis derogat generali. General legislation must give way to special legislation on the same subject, and generally is so interpreted as to embrace only cases in which the special provisions are not applicable.63 In other words, where two statutes are of equal theoretical application to a particular case, the one specially designed therefor should prevail.64 RA 9369 specifically covers a well-defined subject (i.e., procurement for election automation), whereas EO 584 has a more universal scope. In sum, there is no constitutional or statutory Filipino-foreign equity ceiling to speak of, and the Anti-Dummy Law does not find application to the case at bar. Nonetheless, I wish to clarify certain matters. It appears that in preparing the bidder eligibility requirements, the COMELEC, exercising the discretion granted by Section 12 of RA 8436, as amended by RA 9369, adopted the guidelines that were set forth in the Implementing Rules and Regulations of RA 9184 (The Government Procurement Reform Act). Thus, in Sections 2.2.1 to 2.2.4 of Part IX (B) of the TOR/RFP, the COMELEC invited the following to bid for the Automation Project: (1) Duly licensed Filipino citizens/proprietorships; (2) Partnerships duly organized under the laws of the Philippines and of which at least sixty percent (60%) of the interest belongs to citizens of the Philippines; (3) Corporations duly organized under the laws of the Philippines, and of which at least sixty percent (60%) of the outstanding capital stock belongs to citizens of the Philippines; (4) Manufacturers, suppliers and/or distributors forming themselves into a joint venture, i.e., a group of two (2) or more manufacturers, suppliers and/or distributors, that intend to be jointly and severally responsible or liable for a particular contract, provided that Filipino ownership thereof shall be at least sixty percent (60%); and (5) Cooperatives duly registered with the Cooperatives Development Authority.

But for a few innocuous stylistic changes, this enumeration is an exact reproduction of Section 23.11.165 of the Implementing Rules and Regulations of RA 9184. Per Smartmatic TIM Corporations Articles of Incorporation, there is no question that the JVC complied with the 60-40 equity ceiling provided under the TOR/RFP. Out of a total paid-up capital of P1,130,000,000.00, TIM contributed sixty percent (60%) thereof (equivalent to P678,000,000.00), while Smartmatic paid the remaining forty percent (40%) (equivalent to P452,000,000.00). The petitioners, however, allege that the sixty percent (60%) interest of TIM in the JVC was merely simulated. They point to certain provisions in the JVA as denoting that effective control over Smartmatic TIM Corporation was given to Smartmatic. Specifically, petitioners assail the following: (1) The mandatory presence of at least one of the nominated Directors of Smartmatic to establish a quorum of the Board of Directors, pursuant to Article 4.366 of the JVA; (2) The veto power in the Board of Directors granted by TIM to Smartmatic to authorize certain important financial and technical actions, pursuant to Article 4.567 of the JVA; (3) The mandatory presence of the Director representing Smartmatic to establish a quorum of the Executive Committee (EXECOM), pursuant to Article 4.768 of the JVA; and (4) The sole right of Smartmatic to nominate the (a) Chairman of the Board, (b) the Treasurer, and (c) the Corporate Secretary, and TIMs corresponding duty to elect said nominees, pursuant to Articles 4.1069 and 4.1170 of the JVA. But far from establishing the tyranny of the minority, these provisions may be viewed as legitimate minority protection devices. Through them, Smartmatic sought to protect its huge investment in the Automation Project. Without these protective provisions, Smartmatic would be helplessly exposed to the risk of being outvoted on significant corporate activities and decisions including decisions on technical matters falling within its field of expertise, for which it is

primarily responsible (as against TIM) under the express terms of the COMELECs bidding rules71 and the Automation Contract72 itself. If that would come to pass, Smartmatic could not perform its part of the Contract and the end result would be the ruin of its investment. To be sure, our lawmakers wanted the foreign joint venture to be autonomous in carrying out its technical functions, and intended to protect it from the whims and caprices of the non-expert majority. This can be gleaned from the April 20, 2009 hearing of the Joint Committee on AES, during which the following exchanges were made: MR. MELO. Here is a scenario, Your Honor. Scantron, for instance and a Philippine Company, they have an agreement, an agreement, joint venture agreement. THE CHAIRMAN (REP. LOCSIN). And the one who carries it out will [be] Scantron even if its 40 percent? MR. MELO. Scantron, let us say, wins. After they win, after Scantron wins, now, the two, they form a company. THE CHAIRMAN (REP. LOCSIN). Yes. But do you will you check that the ones who will carry out the project will be, in the case of Smartmatic, the guys who actually conduct elections in Venezuela and not some local boys who are just, you know, dreaming that they can do it? MR. MELO. But the contract will now be awarded in favor of the new company? THE CHAIRMAN (REP. LOCSIN). Yes. But who will implement it? MR. MELO. Yes, we will make them jointly and severally liable. THE CHAIRMAN (REP. LOCSIN). Im not really worried nor do (sic) am I concerned about punishing them up after the failure of elections. I would just really want to make sure that the guys who will run this will not be the local boys but the foreign boys who have actually done it abroad. I dont want amateurs, you know, trying to prove yes, the Filipino can.

MR. MELO. Yes, Your Honor, precisely. This is speaking my mind alound (sic). Let us say, a foreign company goes into a partnership who (sic) are co-venture (sic) in system with a Philippine company. The Philippine company is usually taken for its expertise in the dispersal of the machines because [the foreign company] does not need another technical company expert in computers. THE CHAIRMAN (REP. LOCSIN). Its the deployment of the machines. MR. MELO. Deployment. x x x (Emphasis supplied)73 *** THE CHAIRMAN (SEN. ESCUDERO). x x x What legal methodology, memorandum or agreement will you be requiring to make sure that its the foreigner who knows how to run it, who will actually run the [show] and not be outvoted each time within the company, 60-40? I mean [the Filipino company] can promise that, "Hindi ho, sila ang nakakaintindi, sila bahala, kami roll-out lang." But what assurance do we have and what legal document do you intend to require insofar as this is concerned? (Emphasis supplied)74 *** THE CHAIRMAN (REP. LOCSIN). x x x As I said, one of the most compelling arguments for the big guys to win, the foreigners, is that they have a reputation to defend. No Filipino has a reputation to defend in IT. In IT, theres none. The problem here is, as Senator Escudero said, a 60 percent joint venture partner. Are there any provisions you have made that would prevent them from interfering in the technical aspects of the electronic elections? What if you have the majority partners dictating how it will be done? xxxx THE CHAIRMAN (REP. LOCSIN). You will have to put really strict sanctions on any interference by the majority partner in the judgment of the minority partner in implementing the majority project. I dont know how thats done though. (Emphasis supplied)75

*** THE CHAIRMAN (REP. LOCSIN). The question we were asking Our apprehension here, Senator Escudero and myself, is that, will the 60 percent which has no track record and is Filipino and may have political affiliations, would they be in a position to influence the 40 percent minority that is the expert in electronic elections? Would the 60 percent be able to compromise the integrity of the 40 percent? MR. RAFANAN.76 Do you say, sir, bidder with political connections? THE CHAIRMAN (REP. LOCSIN). Thats just an example. What were saying is that a 40 percent track record the track record of the 40 percent partner, say, Sequoia or whatever. I mean, no question. Theyre qualified but theyre always in a minority position in the joint venture company. What if the majority Filipino tells them to compromise the integrity? What measures do you take? (Emphasis supplied)77 *** THE CHAIRMAN (SEN. ESCUDERO). x x x So, ang tanong ko[,] youre awarding [the contract to] a company with a track record although may minority, minority lang siya. How sure are you na hindi siya didiktahan nung 60 percent na walang track record, walang experience, so useless yung requirement natin na may track record ka hindi naman siya ang masusunod, ang masusunod yung may-ari ng 60 percent na Filipino na walang track record at walang kaalamalam presumably. xxxx THE CHAIRMAN (REP. LOCSIN). Senator Enrile, our worry is that the 60 percent may dictate on the expert 40 percent. Would a joint venture contract be able to provide some autonomy to the 40 percent expert so that they cannot be interfered with? THE SENATE PRESIDENT. x x x [A] joint venture is a matter of contract. You have to apart from the legal requirement, you have to embed into the joint venture contract the obligation of each of the joint venturer.

THE CHAIRMAN (SEN. ESCUDERO). So, essentially... THE SENATE PRESIDENT. Including their voice in the joint venture. THE CHAIRMAN (SEN. ESCUDERO). So, essentially nga ho[,] we are bound and doomed to award this contract to a company majority of which will be owned by individuals or another company that has no track record to speak of? Kasi yung obligasyon na nating i-award iyang 60/40 sa Filipino company, we are obligated by law, thats what youre saying, to award it to a company majority of which will be owned by a company or individuals without any track record whatsoever? THE CHAIRMAN (REP. LOCSIN). But Senator Enrile, can the Comelec require a particular joint venture contract that would specify the particular obligations of the parties and in some cases that obligation would be would protect the minoritys integrity in conducting the election? xxxx THE CHAIRMAN (SEN. ESCUDERO). x x x [F]or you to require or impose a requirement saying that the 40 will control the 60 is a circumvention, if at all, of the 60/40 rule as well. THE CHAIRMAN (REP. LOCSIN). But would it not be a circumvention, say, for voting purposes for control of the corporation but not for the purely technical aspect of conducting an electronic election to protect the integrity of that undertaking? THE CHAIRMAN (SEN. ESCUDERO). Without arguing that point, I may tend to agree with that point but the fact is, legally the question is how will you be able to overcome it? THE CHAIRMAN (REP. LOCSIN). Can you require that in your terms of reference? MR. MELO. I suppose, Your Honor. Youre the expert here, Manong Johnny. But in the joint venture, can it not be provided that the foreign company shall have exclusive say on the technical aspect?

THE SENATE PRESIDENT. Puwede iyon. MR. MELO. Iyon. THE SENATE PRESIDENT. You can insist [on] that. MR. MELO. Yes. THE SENATE PRESIDENT. The Comelec can impose that. MR. MELO. Yes, insofar as the technical aspect is concerned, its only its the foreign company, the supplier of the computers, of the machines which will have exclusive say. And so the dispersal or the deployment of the machines will be another matter. (Emphasis supplied.)78 The petitioners find particularly repugnant Smartmatics veto power in the Board of Directors in respect of certain key financial and technical actions. In my view, however, this is but a fair and reasonable check against possible abuses by the majority stockholder. As Smartmatic is the joint venture partner having the greater experience in automated elections, it deemed it necessary to reserve to itself the veto power on these important financial matters so as not to compromise the technical aspects of the Automation Project. As far as matters other than those provided in Article 4.5 are concerned, Smartmatic does not have any veto right. This is clear from Article 4.4, which provides as follows: 4.4 Resolution on matters other than those set forth in Article 4.5 below shall be adopted by the vote of the majority of the Directors present and constituting a quorum, except as otherwise provided by law. The same conclusion may be obtained from the deliberations of the Senate Committee on Constitutional Amendments, Revision of Codes and Laws. The following exchanges from their June 23, 2009 hearing79 are illuminating on this point: THE CHAIRMAN. I went through your JVA and I found some provisions peculiar and interesting. In your JVA[, it] states that no board resolution shall be passed in the first place, three members

of the board will belong to TIM, local, two members of the board will belong to Smartmatic, foreign, so 60-40 naman talaga iyon. My question is, under your JVA[,] it says no resolution shall be passed unless TIM with three votes, presumably majority already, can secure the vote of Smartmatic, vice versa. But vice versa is expected because you only have two votes. If TIM needs to secure one more vote from you before they can do anything, number one, there is a potential for a deadlock. Number two, is that not effective control or veto power over the company that essentially overrides or circumvents the 60-40 requirement? MR. FLORES. No, sir. Thats a standard practice to protect minority investors and it only relates to certain key decisions not to the whole development of the project. THE CHAIRMAN. Major decisions? MR. FLORES. Yes, sir. THE CHAIRMAN. We discussed this before[,] Chairman Melo, remember? MR. MELO. Yes, Your Honor. Precisely at that time it was the suggestion of the committee, the Oversight Committee that major decisions or decisions concerning technical matters, concerning the machines will have to be made by Smartmatic. They cannot be controlled by the local partner because, otherwise, baka ho hindi naman expert yung local partner sa ano so we follow that. xxxx THE CHAIRMAN. But my question is, still there is a 60-40 requirement. What if ayaw pumayag ng Smartmatic? So does the local company have effective control over the joint venture company? xxx MR. RAFANAN.80 Sir, concerning decisions that will pertain to technical problems or trouble-shooting problems in the election, we are providing in the contract that these matters will be entrusted to the foreign corporation which is Smartmatic International.

THE SENATE PRESIDENT. I assume that this provision in their agreement, between the joint venturers[,] is a function of trust between them. I suppose they have just met in this particular venture and so they do not know each other very well, so the foreign company will naturally protect want to protect itself that it will not be ousted from the venture in case of You know, you are dealing here with a certain magnitude of financial benefits. So I suppose that is intended to protect themselves. xxxx THE CHAIRMAN. Sir, Ill give you an example. THE SENATE PRESIDENT. As collectivity ha. THE CHAIRMAN. This is what they will on requiring [Smartmatics] one vote even if TIM, the local company, already has three votes. Approval of operating capital expenditures and budgets for the year; approval of financial statements; election or removal of corporate officers [We are] not talking technical here yet. x x x Approval of financial plans; borrowing, etcetera. Entering into or terminating an agreement involving technology transfer; delegation of powers to directors, officers and delegation of powers to committees. x x x xxxx THE CHAIRMAN. Financial, appointing of officials. THE SENATE PRESIDENT. Yes, if they can be removed, if they do not have that veto power, the 60 percent can kick them out after they get the contract. xxxx THE CHAIRMAN. But wherever it is coming from... THE SENATE PRESIDENT. As a lawyer, from my experience, we have done that before in many cases in order to protect, to be fair, to be equitable to the people who are coming here for the first time or who are dealing with people that they do not know very well.81 (Emphasis supplied.)

Petitioners also find objectionable Smartmatics sole right to nominate the Treasurer, Corporate Secretary and the Chairman of the Board, and TIMs corresponding duty to elect said nominees. However, the objection conveniently disregards the fact that, to maintain the balance of power, TIM in turn has the sole right to nominate the President and Chief Executive Officer and the Assistant Corporate Secretary of the joint venture corporation.82 Pursuant to Article 4.11 of the JVA, Smartmatic is in fact obliged to cause its Directors to vote for the officers chosen by TIM. Moreover, as an added means to protect their respective interests in the joint venture, Smartmatic and TIM further agreed that for the validity of the resolutions contained therein, all certifications to be issued must bear the signatures of both the Corporate Secretary and the Assistant Corporate Secretary.83 In fine, the provisions assailed by Petitioners are reasonable under the circumstances and should be upheld as legitimate minority protection devices. c.6 "Prior Successful Use" qualification has been complied with The petitioners postulate that the PCOS machines offered by the Smartmatic TIM Corporation have not been successfully used in an electoral exercise in the Philippines or abroad, as required by Section 12 of RA 8436, as amended.84 A quick overview of the optical scan technology is in order. Optical scan or "Marksense" technology has been used for decades for standardized tests such as the Scholastic Aptitude Test (SAT).85 The optical scan ballot is a paper-based technology that relies on computers in the counting and canvassing process. Voters make their choices by using a pencil or a pen to mark the ballot, typically by filling in an oval or by drawing a straight line to connect two parts of an arrow.86 The ballots are counted by scanners, which may be located either at the precinct (in "precinct-count" systems) or at some central location ("central-count" systems).87 If ballots are counted at the polling place, voters put the ballots into the tabulation equipment, which scans and tallies the votes.88 These tallies can be captured in removable storage media, which are transported to a central tally location or are electronically transmitted from the polling place to the central tally location.89 If ballots are centrally counted, voters drop

ballots into sealed boxes; and, after the polls close, election officials transfer the sealed boxes to the central location where they run the ballots through the tabulation equipment.90 The central-count system (via the CCOS machines) was used during the 2008 elections in all the provinces of the ARMM except in Maguindanao. The COMELEC Advisory Council created by RA 9369 to recommend to the COMELEC the "appropriate, secure, applicable, and cost-effective technology" to be used in the automation of elections deployed various monitors from the DOST, PPCRV and Consortium on Electoral Reforms to observe the usability of the technologies used in the ARMM elections as well as to observe the electoral process in general.91 The CCOS machines were assessed before and during the actual elections, and the COMELEC Advisory Council eventually determined that these machines sufficiently complied with the minimum systems configuration specified in Section 6 of RA 9369.92 In light of this background, the question is whether the central-count system used in 2008 may be considered as substantial compliance with the "prior successful use" qualification set forth in Section 12 of RA 8436, as amended. With due respect, I answer in the affirmative. It is obvious that the PCOS and CCOS machines are based on the same optical scan technology. The sole difference is that the PCOS machines dispense with the physical transportation of the ballots to the designated counting centers, since the votes will be counted in the precinct itself and the results electronically transmitted to the municipal, provincial and national Board of Canvassers. Tellingly, but for their sweeping and convenient conclusion that "[e]ven if a PCOS [machine] is an OMR [Optical Mark Reader] [machine], nevertheless[,] it is totally different from a CCOS [machine]," the petitioners were silent on this point.93 In any event, the AES procured by COMELEC for the 2010 elections has been successfully used in prior electoral exercises in (i) New Brunswick, Canada; (ii) Ontario, Canada; and (iii) New York; the United States of America. The petitioners nevertheless question the certifications submitted to this effect, arguing that these were issued

not to the Smartmatic-TIM joint venture, but to a third party Dominion Voting Systems. I find this argument meritless, for it foists unto the law an imaginary requirement. As the COMELEC correctly observed, what the law requires is that the system must have been successfully utilized in a prior electoral exercise, not that the provider (i.e., Smartmatic TIM Corporation) should have been the one that previously used or employed the system. Considering that the system subject of the certifications is the same one procured by the COMELEC for the 2010 elections, the prior successful use requirement has been adequately met. At any rate, the clear terms of the Licensing Agreement between Smartmatic and Dominion Voting Systems indicate that the former is the entity licensed exclusively by the latter to use the system in the Philippines. c.7 COMELECs determination as to minimum systems capabilities of the PCOS machines must be respected This Court is neither constitutionally permitted nor institutionally outfitted to conduct a cost-benefit analysis of the system or of the nuances of the available technology. It is ill-equipped to deal with the complex and difficult problems of election administration. This inordinately difficult undertaking requires expertise, planning, and the commitment of resources, all of which are peculiarly within the province of the legislative and the executive branches of government. The petitioners contend that the PCOS machines do not comply with the minimum system capabilities94 set forth by Section 6 of RA 8436, as amended. Then, in an entirely speculative exercise, they conjure a perturbing series of doomsday scenarios that would allegedly result from using this particular technology: unaddressed logistical nightmares, failure of elections, and massive disenfranchisement. Let me preface my discussion of this issue by accentuating once more the core of RA 8346, as amended: the COMELEC, an independent Constitutional Commission armed with specialized knowledge born of years of experience in the conduct of elections, has the sole prerogative to choose which AES to utilize.95 In carrying out this mandate, Section 6 of the same law directs the COMELEC to

develop and adopt, with the assistance of the COMELEC Advisory Council, an evaluation system to ascertain that the minimum system capabilities are met. The COMELEC did in fact adopt a rigid technical evaluation system composed of twenty-six criteria, against which the procured AES was benchmarked by the TWG to determine its viability and concomitant security.96 In this regard, the TWG ascertained that the PCOS machines "PASSED all tests as required in the 26-item criteria,"97 as follows: ITEM9
8

REQUIREMENT

REMARK / DESCRIPTION

Does the system allow Yes. The proposed PCOS machine accepte manual feeding of a ballot ballots which were manually fed one at a time into the PCOS machine?

Does the system scan a Yes. A 30-inch ballot was used in this test. ballot sheet at the speed of the 30-inch ballot took 2.7 seconds, which tra at least 2.75 inches per 11.11 inches per second. second? Is the system able to capture and store in an encrypted format the digital images of the ballot for at least 2,000 ballot sides (1,000 ballots, with back to back printing)?

Yes. The system captured the images of ballots in encrypted format. Each of the 1,0 files contained the images of the front and b of the ballot, totaling 2,000 ballot sides.

To verify the captured ballot images, decryp of the encrypted files were also provided. were found to be digitalized representatio ballots cast.

Is the system a fully Yes. The proposed PCOS is a fully integra integrated single device as device, with built-in printer and buil described in item no. 4 of communication ports (Ethernet and USB). Component 1-B?

Does the system have a Yes. A portion of a filled[-]up marked oval w scanning resolution of at up using image editor software to reveal the least 200 dpi? dots per inch. The sample image showed 200

File properties of the decrypted image revealed 200 dpi. 6

Does the system scan in Yes. 30 shades of gray were scanned in the t grayscale? machine, 20 of which were recognized, exce required 4-bit/16 levels of gray as specifi Bulletin No. 19.

Does the system require Yes. The system required the use of a securit authorization and different sets of passwords/PINs for Adminis authentication of all Operator users. operators, such as, but not limited to, usernames and passwords, with multiple user access levels?

Does the system have an Yes. The PCOS machine makes use of an LC electronic display? to show information: if a ballot may be inserted into the machine; if a ballot is being processed; if a ballot is being rejected; on other instructions voter/operator. and

information

Does the system employ error handling procedures, including, but not limited to, the use of error prompts and other related instructions? Does the system count the voters vote as marked on the ballot with an accuracy rating of at least 99.995 %?

Yes. The PCOS showed error messages on whenever a ballot is rejected by the machine instructions to the voter on what to do next there was a ballot jam error.

10

Yes. Two rounds of tests were conducted fo using only valid marks/shades on the ballo marks were required to complete this test, one (1) allowable reading error.

625 ballots with 32 marks each were used fo During the comparison of the PCOS-generat

with the manually prepared/predetermined was found out that there were seven (7) ma were inadvertently missed out during ballot p by the TWG. Although the PCOS-generat turned out to be 100% accurate, the 20 [requirement] was not met thereby requiring be repeated.

To prepare for other possible missed out m ballots (with 20,800 marks) were used for round of test, which also yielded 100% accura 11

Does the system detect and Yes. This test made use of one (1) photocop reject fake or spurious, and and one (1) "re-created" ballot. Both were re previouslyscanned ballots? the PCOS.

The test for the rejection of previously-sca ballots was done during the end-to-end demo 12

Does the system scan both Yes. Four (4) ballots with valid marks were fe sides of a ballot and in any PCOS machine in the four (4) portrait o orientation in one pass? specified in Bid Bulletin No. 4 (either back upside down or right side up), and all were captured. Does the system have necessary safeguards to determine the authenticity of a ballot, such as, but not limited to, the use of bar codes, holograms, color shifting ink, micro printing, to be provided on the ballot, which can be recognized by the system?

13

Yes. The system was able to recognize if th features on the ballot are "missing".

Aside from the test on the fake or spurious ba No. 11), three (3) test ballots with tampered and timing marks were used and were all re the PCOS machine.

The photocopied ballot in the test for Item N not able to replicate the UV ink pattern o portion of the ballot[,] causing the rejection of

14

Are the names of the Yes. Two sample test ballots of different len candidates pre-printed on provided: one (1) was 14 inches long while the ballot? was 30 inches long. Both were 8.5 inches wid

The first showed 108 pre-printed candidate fourteen (14) contests / positions, includin survey questions on gender and age grou plebiscite question.

The other showed 609 pre-printed candida also for fourteen (14) positions, including survey questions. 15 Does each side of the ballot sheet accommodate at least 300 names of candidates with a minimum font size of 10, in addition to other mandatory information required by law?

Yes. The 30-inch ballot, which was used to No. 2, contained 309 names for the nationa and 300 names for local positions. The total p names on the ballot totaled 609.

This type of test ballot was also used for test the public, including members of the media. Arial Narrow, font size 10, was used in the the candidate names.

16

Does the system recognize full shade marks on the appropriate space on the ballot opposite the name of the candidate to be voted for? Does the system recognize partial shade marks on the appropriate space on the ballot opposite the name of the candidate to be voted for?

Yes. The ballots used for the accuracy test 10), which made use of full shade marks, used in this test and were accurately recogni PCOS machine.

17

Yes. Four (4) test ballots were used with one each per ballot showing the following pencil m top half shade; bottom half shade; left half shade; and right half shade[.]

These partial shade marks were all recogniz PCOS machine.

18

Does the system recognize Yes. One (1) test ballot with one check mar check marks on the pencil, was used for this test. The m appropriate space on the recognized successfully. ballot opposite the name of the candidate to be voted for?

19

Does the system recognize x Yes. One (1) yes ballot with one x mark, usin marks on the appropriate was used for this test. The mark was r space on the ballot opposite successfully. the name of the candidate to be voted for?

20

Does the system recognize Yes. The 1000 ballots used in the accuracy both pencil and ink marks on No. 10) were marked using the proposed ma the ballot? by the bidder.

A separate ballot with one (1) pencil mark tested. This mark was also recognized by t machine. Moreover, the tests for Items No. 1 19 were made using pencil marks on the ballo 21 In a simulation of a system shut down, does the system have error recovery features?

Yes. Five (5) ballots were used in this test. T cord was pulled from the PCOS while the was in the middle of the scanning procedure, it was left "hanging" in the ballot reader.

After resumption of the regular power su PCOS machine was able to restart succes notification to the operator that there wer ballots already cast in the machine. The "ha ballot was returned to the operator and was re-fed into the PCOS machine. The marks (5) were all accurately recognized. 22

Does the system have Yes. The PCOS was able to transmit to the C transmission and the end-to-end demonstration using [a] Glob consolidation/canvassing [i]nternet kit. capabilities?

23

Does the system generate a Yes. The PCOS saves a backup copy of backup copy of the ballot images, statistical report and audit generated reports, in a Compact Flash (CF) card. removable data storage device? Does the system have alternative power sources, which will enable it to fully operate for at least 12 hours?

24

Yes. A 12-volt 18AH battery lead acid was u test.

The initial test had to be repeated due to a sh after seven (7) hours from start-up with scanning. This was explained by TIM-Smartm (sic) caused by non-computable wiring of the the PCOS. A smaller wire than what is req inadvertently used, likening the situation to wiring of a car battery. Two (2) COMELEC e were called to confirm TIM-Smartmatics expl

The PCOS machine was connected to regu and started up successfully.

The following day, the "re-test" was comple hours and 40 minutes, starting from the initia the printing of the reports. 984 ballots were fe machine. The ER, as generated by the PC compared with the predetermined result, 100% accuracy. 25

Is the system capable of Yes. The PCOS prints reports via its built-in generating and printing which [reports] include: reports? 1. Initialization Report 2. Election Returns (ER) 3. PCOS Statistical Report 4. Audit Log

26

Did the bidder successfully Yes. An end-to-end demonstration of all prop demonstrate EMS, voting,

counting, systems was presented, covering: consolidation/canvassing and transmission? (see B. importing of election data into the EMS; Demo model) creation of election configuration data for the and the CCS using EMS; creation of ballot faces using EMS;

configuring the PCOS and the CCS using the generated election configuration file; initialization, operation, generation of reports backup using the PCOS; electronic transmission of results ... :

o from the PCOS to city/municipal CCS and t central server;

o from the city/municipal CCS to the provincia

o from the provincial CCS to the national CCS receipt and canvass of transmitted results: o by the city/municipal CCS from the PCOS;

o by the provincial CCS from the city/municip

o by the national CCS from the provincial CC

receipt of transmitted results by the central se the PCOS We cannot close our eyes to the fact that the TWGs technical evaluation of the AES was corroborated by knowledgeable and impartial third parties: the law-mandated Official Observers. In their respective reports to the COMELEC, the PPCRV and the Office of the Ombudsman found the system procured and the attendant COMELEC proceedings to be consistent, transparent, and in consonance with the relevant laws, jurisprudence and the terms of

reference.99 Accordingly, I do not find any grave abuse of discretion on the part of the COMELEC in awarding the Automation Contract to the Smartmatic TIM Corporation. It has approved the PCOS system, and we are bereft of the right to supplant its judgment. Hoary is the principle that the courts will not interfere in matters that are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under their special technical knowledge and training.100 Our disquisition in the seminal case Sumulong v. COMELEC101 again finds cogent application: The Commission on Elections is a constitutional body. It is intended to play a distinct and important part in our scheme of government. In the discharge of its functions, it should not be hampered with restrictions that would be fully warranted in the case of a less responsible organization. The Commission may err, so this court may also. It should be allowed considerable latitude in devising means and methods that will insure the accomplishment of the greater objective for which it was created free, orderly and honest elections. We may not fully agree with its choice of means but unless these are clearly illegal or constitute gross abuse of discretion, this court should not interfere. Politics is a practical matter, and political questions must be dealt with realistically not from the standpoint of pure theory. The Commission on Elections, because of its fact-finding facilities, its contacts with political strategists, and its knowledge derive from actual experience in dealing with political controversies, is in a peculiarly advantageous position to decide complex political questions. xxxx There are no ready-made formulas for solving public problems. Time and experience are necessary to evolve patterns that will serve the ends of good government. In the matter of the administration of the laws relative to the conduct of elections, ..., we must not by any excessive zeal take away from the Commission on Elections the initiative which by constitutional and legal mandates properly belongs to it. Due regard to the independent character of the Commission, as ordained in the Constitution, requires that the power of this Court to

review the acts of that body should, as a general proposition, be used sparingly, but firmly in appropriate cases. We are not satisfied that the present suit is one of such cases. (Emphasis supplied.) As the ultimate guardian of the Constitution, we have the distinguished but delicate duty of determining and defining constitutional meaning, divining constitutional intent, and deciding constitutional disputes.102 Nonetheless, this power does not spell judicial superiority (for the judiciary is co-equal with the other branches) or judicial tyranny (for it is supposed to be the least dangerous branch).103 Thus, whenever the Court exercises its function of checking the excesses of any branch of government, it is also duty-bound to check itself.104 The system of divided and interlocking powers of the branches of government are carefully blended so as to produce a complex system of checks and balances that preserve the autonomy of each branch, without which independence can become supremacy. Petitioners disparage the technical test and end-to-end demonstration conducted by the COMELEC for having been done merely for media mileage. This baseless accusation is easily dismissed by repairing to the presumption of regularity of official acts. As we ruled in The Province of Agusan del Norte v. Commission on Elections, et al.: Appropriately, the Constitution invests the COMELEC with broad power to enforce and administer all laws and regulations relative to the conduct of an election, plebiscite and other electoral exercises. In the discharge of its legal duties, the COMELEC is provided by the law with tools, ample wherewithal, and considerable latitude in adopting means that will ensure the accomplishment of the great objectives for which it was created to promote free, orderly and honest elections.105 Conceived by the charter as the effective instrument to preserve the sanctity of popular suffrage, endowed with independence and all the needed concomitant powers, COMELEC deserves to be accorded by the Court the greatest measure of presumption of regularity in its course of action and choice of means in performing its duties, to the end that it may achieve its designed place in the democratic fabric of our government.106 (Emphasis supplied.)

The COMELEC is a constitutional body, mandated to play a distinct and important role in the governmental scheme. In the performance of its constitutional duties, it must be given a range of authority and flexibility, for the art of good government requires cooperation and harmony among the branches. We may not agree fully with the choices and decisions that the COMELEC makes, but absent any constitutional assault, statutory breach or grave abuse of discretion, we should never substitute our judgment for its own. c.8 No abdication by the COMELEC of its duty to enforce election laws The petitioners assert that the COMELEC abdicated its constitutional duty to enforce and administer all laws relative to the conduct of elections, and to decide all questions affecting elections when it entered into the Automation Contract with Smartmatic TIM Corporation. Article 3.3 of the contract for the 2010 Elections Automation Project provides: Article 3.3 The PROVIDER shall be liable for all its obligations under this Project, and the performance of portions thereof by other persons or entities not parties to this Contract shall not relieve the PROVIDER of said obligations and concomitant liabilities. SMARTMATIC, as the joint venture partner with the greater track record in automated elections, shall be in charge of the technical aspects of the counting and canvassing software and hardware, including transmission configuration and system integration. SMARTMATIC shall also be primarily responsible for preventing and troubleshooting technical problems that may arise during the election. The PROVIDER must provide to SMARTMATIC at all times the support required to perform the above responsibilities. (Emphasis supplied.) Petitioners claim that under this Article 3.3, the COMELEC has surrendered to Smartmatic the supervision and control of the system to be used for the AES in violation of section 26 of RA 8436.

The petitioners also refer to COMELEC Bid Bulletin No. 10,107 which was made an integral part of the Automation Contract by virtue of Articles 21.1 and 21.4 of the contract.108 Bid Bulletin No. 10 provides that the "digital signature shall be assigned by the winning bidder to all members of the Board of Election Inspectors (BOI) and the city, municipal, provincial or district Board of Canvassers (BOC)." Since Smartmatic would have access to the digital signatures and would have the authority to assign the access keys to the BEI and BOC, the petitioners readily conclude that the COMELEC has abdicated its constitutional mandate to enforce election laws. What the petitioners failed to consider is that, although the digital signature shall be assigned by the winning bidder, Bid Bulletin No. 10 further provides that the certificate of authority for the digital signatures must still be approved by the COMELEC. Thus, the COMELEC retains control over the process of generation and distribution of the digital signatures. Abdication denotes a relinquishment or surrender of authority, which has not been done by the COMELEC. Part II of the TOR/RFP provides: The Commission on Elections (COMELEC), through its Bids and Awards Committee (BAC), is currently accepting bids for the lease, with an option to purchase, of an automated election system (AES) that will meet the following needs: xxxx 6. A complete solutions provider, and not just a vendor, which can provide experienced and effective overall nationwide project management service and total customer support (covering all areas of project implementation including technical support, training, information campaign support, civil and electrical works service, warehousing, deployment, installation and pullout, contingency planning, etc.), under COMELEC supervision and control, to ensure effective and successful implementation of the Project. (Emphasis supplied.) The COMELEC identified the type of technology, specifications and capabilities of the system to be used in the 2010 elections; and the

bidders were required to submit their bids in accordance with the COMELECs stipulations. All the choices made by the winning bidder were to be subject to approval by the COMELEC, and "the final design and functionality of the system shall still be subject to [its] final customization requirements."109 It is clear that the COMELEC has not abdicated its constitutional and legal mandate to control and supervise the elections. Smartmatic and TIM are merely service providers or lessors of goods and services to the Commission. Indeed, Article 6.7 of the Automation Contract, provides that "the entire process of voting, counting, transmission, consolidation and canvassing of votes shall be conducted by COMELECs personnel and officials." This control and supervision by the COMELEC was assured in the June 23, 2009 hearing of the Senate Committee on Constitutional Amendments and Revision of Codes and Laws. This is reflected in the following exchange between Senator Francis Escudero and COMELEC Executive Director Jose Tolentino, thus: "THE CHAIRMAN. Will you deputize the workforce of the winning bidder? Or are you going to deputize by way of additional technological support the students? MR. TOLENTINO. It would be the students, Mr. Chairman, whom we will deputize. With respect to the providers (sic) technical support, we consider them as partners. So, there is really no need for us to deputize them because the supervision and control over the counting center would be solely on the part of the Comelec. THE CHAIRMAN. Pero pwede ho nilang pakialaman yung makina, hindi po ba? Puwede nilang kalikutin yon, galawin yon, kasi nga kung may palpak, di ba? So theyre employees of Smartmatic without any counterpart authorization or deputization from Comelec. So, anyone can just walk in [and] say, "I am an employee of Smartmatic. Something is wrong with the machine. Ill check it."

MR. TOLENTINO. No. It doesnt work that way, Mr. Chairman. First of all, aside from our EO who would be going around all over the municipality to check on the polling centers, Comelec aside from our Information Technology Department personnel, would also be going around to determine the status of the machines on election day. And I am even sure that the watchers of the political parties and the candidates will [not] allow anyone to touch a machine if he is not a member of the Board of Election Inspector (sic). THE CHAIRMAN. But sir, the workforce of on-site technicians are not allowed to touch the machines? Something is wrong with the machine, who is authorized to... MR. TOLENTINO. Yes, sir. Only when there is a problem with the machine. THE CHAIRMAN. Precisely my point, sir. So, then these people be at least known to Comelec. MR. TOLENTINO. Yes, Mr. Chairman. In fact, theyll be given appropriate identification cards... THE CHAIRMAN. From Comelec. MR. TOLENTINO. Yes, Mr. Chairman. THE CHAIRMAN. That was my question, sir. Because you said a while ago, theyre employees only of Smartmatic and you have BEI, anyway. So, ... under the control and supervision din sila ng Comelec. MR. TOLENTINO. Yes, Mr. Chairman. THE CHAIRMAN. Yes." (Emphasis supplied.)110 Finally, the power and duty of the COMELEC to administer election laws and to have control and supervision over the automated elections is not incompatible with the decision to subcontract services

that may be better performed by those who are well-equipped to handle complex technological matters with respect to the implementation of the AES. The subcontractor cannot act independently of the COMELEC. D. Conclusion We are not unaware of the many doomsday scenarios peddled by doubting Thomases if the coming May 2010 elections will be fully automated. To downgrade these scenarios, let it be emphasized that the PCOS System procured by COMELEC is a paper-based system. It has a provision for system auditability and a voter-verified paper trail. The official ballots may be compared with their digital images stored in the memory cards. All actions done on the machine are stored and can be printed out by the BEI chairperson as an audit log, which includes time stamps. And in the event of problems arising from non-functioning PCOS machines, the official ballots cast in the precincts, which have previously been fed into the locked ballot box, could be used for a manual recount. With these safeguards, the fear of automation failure should not overwhelm us. We have been bedevilled in the past by elections that are not free, fair and honest. These elections have made a mockery of our democracy for they frustrated the sovereign right of the people to choose who ought to rule them. These elections have also resulted in instability of governments whose legitimacy has been placed in doubt. All these elections were conducted manually. For the first time, we shall be conducting our May 2010 elections through full automation. To be sure, full automation will not completely cleanse the dirt in our electoral system. But it is a big forward step which can lead us to the gateway of real democracy where the vote of the people is sacred and supreme. Accordingly, I vote to DISMISS the petition. REYNATO S. PUNO Chief Justice Footnotes
1

constitution, Art. VIII, Sec. 1.

An Act Authorizing the Commission on Elections to Use an Automated Election System in the May 11, 1998 National or Local Elections and in Subsequent National and Local Electoral Exercises, providing funds therefor and for other purposes.
3

G.R. No. 159139, January 13, 2004, 419 SCRA 141.

Republic Act No. 9369 (2007), Sec. 6, amending Republic Act No. 8436 (1997), Sec. 5.
5

Republic Act No. 9369 (2007), Sec. 12.

An Act Appropriating the Sum of Eleven Billion Three Hundred One Million Seven Hundred Ninety Thousand Pesos (P11,301,790,000.00) As Supplemental Appropriations for an Automated Election System and for Other Purposes.
7

COMELEC Resolution No. 8608, In The Matter Of The Report/Recommendation Of The Special Bids And Awards Committee Relative To The Award Of The Contract For The May 10, 2010 Automated Elections, 09 June 2009.
8

The COMELEC Advisory Council is chaired by Ray Anthony RoxasChua III (from the Commission on Information and Communications Technology) and its members are Geronimo L. Sy (from the Department of Education), Fortunato De La Pena (from the Department of Science and Technology), Manuel C. Ramos, Jr. (from the University of the Philippines), Renato B. Garcia (from the Philippine Electronics and Telecommunications Federation, Inc.), Lilia C. Guillermo (from the Chief Information Officers Forum, Inc.), Ivan John E. Uy (from the Philippine Computer Society), Henrietta T. De Villa (from the Parish Pastoral Council for Responsible Voting) and Andie C. Lasala (from the Commission on Electoral Reforms).
9

The Task Force is composed of Orlando C. Casimiro, Evelyn Baliton, Rafael Rodriguez Hipolito, Gina Lyn Lucas, Mary Rawnsle Lopez, Judy Anne Doctor-Escalona, Manolette Eugenio, Mary Antonette Yalao, Marina Demetrio, Hilario Fabila, Jr. and Marian Candelaria.
10

Republic Act No. 8436 (1997), Sec. 6.

11

Republic Act No. 8436 (1997), Sec. 5. Id. Id. Id.

12

13

14

15

The Joint Congressional Oversight Committee on Automated Election System was created pursuant to Section 27 of RA 8436, as amended. It was formerly chaired by Senator Richard Gordon, and now by Senator Francis Escudero. The former Senate Members are: Senator Juan Ponce Enrile, Senator Edgardo Angara, Senator Lito Lapid, Senator Loren Legarda, Senator Manuel Roxas II, and Senator M.A. Consuelo Madrigal. The present Senate members are: Senator Loren Legarda, Senator M.A. Consuelo Madrigal, Senator Manuel Roxas II, Senator Francis Pangilinan, Senator Alan Cayetano, and Senator Aquilino Pimentel. The House Panel is composed of: Representative Teodoro Locsin, Representative Edcel Lagman, Representative Rufus Rodriguez, Representative Abdullah Dimaporo, Representative Martin Romualdez, Representative Abigail Binay, and Representative Roman Gabriel Tecson Romulo.
16

TSN, Joint Congressional Oversight Committee on Automated Election System, March 11, 2008, I-2, p. 30.
17

TSN, Joint Congressional Oversight Committee on Automated Election System, March 11, 2008, pp. 34-35.
18

Record of the Senate, Vol. 3, Session No. 23, September 13, 2006, pp. 133-134.
19

Id. at pp. 181-184. Id. at p. 136. Id. at pp. 136-137. Id. at p. 137. Id.

20

21

22

23

24

An Act Appropriating the Sum of Eleven Billion Three Hundred One Million, Seven Hundred Ninety Thousand Pesos, March 5, 2009.
25

Deliberations of the House of Representatives, February 4, 2009, pp. 21-22.

26

Id. at pp. 69-71.

27

TSN, Joint Congressional Oversight Committee on Automated Election System Hearing on September 1, 2008, Part II-2, p. 74.
28

Id. at Part V-2, p. 104.

29

TSN, Joint Congressional Oversight Committee on Automated Election System Hearing on September 9, 2008, Part II-1, pp. 21-23.
30

Mr. Jose Tolentino is the Executive Director of COMELEC. Id. at part IV-1, p. 31.

31

32

TSN, Joint Congressional Oversight Committee on Automated Election System Hearing on March 4, 2009, Part V-2, pp. 117-118.
33

Senator Edgardo Angara.

34

TSN, Hearing of the Senate Committee on Finance, February 2, 2009, Part IV-1, p. 4.
35

Te v. Bell, G.R. No. 8866, November 19, 1914. Supra note 3. RA 9369, Section 1 states:

36

37

"Section 1. Section 1 of Republic Act No. 8436 is hereby amended to read as follows: "Section 1. Declaration of Policy xxx The State recognizes the mandate and authority of the Commission

to prescribe the adoption and use of the most suitable technology of demonstrated capability taking into account the situation prevailing in the area and the funds available for the purpose."" (Emphasis supplied)
38

Id., Section 6 provides:

"Sec. 6. Section 6 of Republic Act No. 8436 is hereby amended to read as follows: "Sec. 5. Authority to Use an Automated Election System. - To carry out the above-stated policy, the Commission on Elections, herein referred to as the Commission, is hereby authorized to use an automated election system or systems in the same election in different provinces, whether paper-based or a direct recording electronic election system as it may deem appropriate and practical for the process of voting, counting of votes and canvassing/consolidation and transmittal of results of electoral exercises: x x x" (Emphasis supplied)
39

Supra note 37.

40

Mr. Justice Kapunans Concurring Opinion, AKBAYAN Youth, et al. v. Commission on Elections, G.R. No. 147066, March 26, 2001, citing Lansang vs. Garcia, 42 SCRA 448 (1971).
41

JG Summit Holdings, Inc. v. Court of Appeals, et al., G.R. No. 124293, September 24, 2003.
42

G.R. No. 75875, 15 December 1989, 180 SCRA 130. Issued on April 18, 2009. Issued on April 20, 2009.

43

44

45

The incorporation of a JVC was done pursuant to Article 2 of the Joint Venture Agreement which provides, in relevant part: "2.1. In the event that COMELEC declares the bid tendered by TIM and SMARTMATIC to be the winning bid for the Automation Project, the parties hereto shall incorporate, or cause to be incorporated, the

JVC which shall be names "TIM SMARTMATIC CORPORATION", or any other name acceptable to the parties which may be allowed by the SEC. 2.2. The JVC shall be the corporate vehicle through which the joint venture of TIM and SMARTMATIC shall be carried out for the purpose set forth in Article 2.3 hereunder. The JVC shall be the entity which shall enter into a contract with the COMELEC for the Automation Project of the 2010 National Elections. x x x x"
46

Infra. Joint Venture Agreement, Chapeau states:

47

"This Joint Venture Agreement ("the Agreement") is made and entered into this 23rd day of April 2009 at Makati City, Metro Manila by and between: TOTAL INFORMATION MANAGEMENT CORPORATION, a corporation duly organized under the laws of the Republic of the Philippines, with address at 5600 South Superhighway corner Arellano Street, Makati City, Philippines, represented herein by its President and Chairman of the Board, Mr. Jose Mari M. Antunez ("TIM"); and SMARTMATIC INTERNATIONAL CORPORATION, a corporation organized and existing under the laws of Barbados, with address at N 4 Stafford House, Garrison Savannah, St. Michael, Barbados W.I. BB 14038, and a fully-owned subsidiary of SMARTMATIC INTERNATIONAL HOLDING, B.V., a corporation duly organized and existing under the laws of [the] Netherlands, represented herein by its authorized representative, Mr. Juan C. Villa, Jr. ("SMARTMATIC") x x x x" (emphasis in the original)
48

Id., Article 2.3.

49

Id., Article 2.4. Id., Article 2.5. Id., Article 3. The TOR/RFP specifies, in relevant part: "COMPONENT 3 OVERALL PROJECT MANAGEMENT xxxx

50

51

52

The scope of the work is to assist the COMELEC in ensuring the successful implementation of the Project. The project management services component of the 2010 National and Local Elections Project shall include: 1. Project management, implementation schedule including team organization and

2. Physical site design, preparation and operationalization 3. Quality control and assurance 4. Change management, including voter education and training 5. Risk management and contingency planning 6. Configuration management xxxx
53

Joint Venture Agreement, supra note 47, Article 4.1. Id., Article 4.7. Id., Article 7.1. Id., Article 11.1.

54

55

56

57

Id., Article 13.1.

58

Information Technology of the Philippines, et al. v. COMELEC, et al., infra.

59

Id. Id.

60

61

David v. Commission on Elections, et al., G.R. No. 127116, April 8, 1997, 271 SCRA 90.
62

Id.

63

Leveriza v. Intermediate Appellate Court, 157 SCRA 282 (1988), citing Sto. Domingo v. de los Angeles, 96 SCRA 139.
64

Id, citing Wil Wilhensen Inc. v. Baluyot, 83 SCRA 38.

65

Under Section 23.11.1 of the Implementing Rules and Regulations of RA 9184, the following are qualified to bid in the procurement of goods: (1) Duly licensed Filipino citizens/proprietorships; (2) Partnerships duly organized under the laws of the Philippines and of which at least sixty percent (60%) of the interest belongs to citizens of the Philippines; (3) Corporations duly organized under the laws of the Philippines, and of which at least sixty percent (60%) of the outstanding capital stock belongs to citizens of the Philippines; (4) Manufacturers, suppliers and/or distributors forming themselves into a joint venture, i.e., a group of two (2) or more manufacturers, suppliers and/or distributors that intend to be jointly and severally responsible or liable for a particular contract, provided that Filipino ownership or interest of the joint venture concerned thereof shall be at least sixty percent (60%); and (5) Cooperatives duly registered with the Cooperatives Development

Authority (CDA). It must be noted that this enumeration does not appear in the text of RA 9184 itself. However, I will desist from inquiring into whether the Implementing Rules and Regulations unduly enlarged the scope of the law, for this case is not the proper avenue to rule on this issue. It suffices to say that (i) RA 9184 does not impose a mandatory FilipinoForeign equity ceiling for the procurement of goods, as to bring into application the Anti-Dummy Law in this case, and (ii) the eventual adoption into the TOR/RFP of the text of the IRR was made by COMELEC in the free exercise of its discretion.
66

Article 4.3 provides:

"4.3 A quorum for a meeting of the Board of Directors shall require the presence of at least three (3) Directors, Provided, that at least one (1) Director nominated by each of TIM and SMARTMATIC are present."
67

Article 4.5 provides:

"The following acts of the Board of Directors of the JVC shall require the authorization and approval by the affirmative vote of at least three (3) Directors, one (1) of whom must be a Director nominated by TIM and one (1) of whom must be a Director nominated by Smartmatic: a) Approval of the operating and capital expenditures budgets for each fiscal year, including the setting of relevant policies and guidelines for implementation of the capex program, as well as any expenditures in excess of the approved capex budget and any deviation from the policies and guidelines pertinent thereto; b) Approval of the audited financial statements; c) Election or removal of the corporate officers, and senior officers with a rank of Vice-President or higher, the terms and conditions of their employment, and the adoption of, or change in, their compensation package, including per diems and bonuses; d) Approval of the financial plan for each fiscal year, embodying the approved borrowing limits of the Corporation, as well as any

borrowings in excess of said limits; e) Entering or terminating any agreement involving technology transfer; f) Delegation of powers and duties to individual directors or officers, and delegation of powers to committees; g) Approval of any contract between the JVC and TIM or SMARTMATIC, involving more than Philippine Pesos: Ten Million Pesos (PHP10,000,000.00), with the exception of (i) those contracts contemplated under this Agreement; (ii) those contracts for the purchase, supply, lease or other kind of contract with respect to equipments (sic) or services to be provided by SMARTMATIC reflected in the budget approved by the Board of Directors; and (iii) those contracts for the purchase of raw materials, supplies and spare parts required by the JVC in the ordinary course of business, Provided always, that the terms and conditions of such contracts shall be competitive with those being offered by other suppliers; and h) Any matter not specified in the agenda set forth in the notices of the Board meetings."
68

Article 4.7 provides:

"4.7 The Board of Directors may create an EXCOM which shall consist of at least three (3) Directors, two must be Directors nominated by TIM and another must be a Director nominated by SMARTMATIC. A quorum at any meeting of the EXCOM shall require the presence of a majority of the entire membership of the EXCOM, Provided, that at least one (1) Director representing TIM and one (1) [D]irector representing SMARTMATIC are present. The EXCOM will have the authority to pass upon and decide any matter, which may be delegated to it by the Board of Directors, except the important matters and actions provided in Article 4.5 above and Article 5.3 of this Agreement. Every decision of at least a majority of the members of the EXCOM at

which there is a quorum present shall be valid as a corporate act."

69

Article 4.10 provides:

"4.10 At all times while this Agreement is in effect, SMARTMATIC shall have the right to nominate the following officers: a. Chairman of the Board; b. Treasurer; and c. Corporate Secretary."
70

Article 4.11 provides:

"4.11 The parties shall cause their respective Directors to vote the individuals nominated by TIM and SMARTMATIC in accordance with Articles 4.9 and 4.10 hereof. In case of resignation, retirement, death or disability of any officer, the party that nominated the officer whose resignation, retirement, death or disability occasioned the vacancy shall nominate the individual to fill such vacancy, and the parties agree to cause its nominee Directors to vote to elect to the position vacated the individual nominated by the party which nominated the officer who resigned, retired, died or was disabled from office."
71

The relevant portion of the Instructions to Bidders of SBAC Bid Bulletin No. 21 provides: "(e) The JV member with a greater track record in automated elections shall be in-charge of the technical aspects of the counting and canvassing software and hardware, including transmission configuration and systems integration; x x x"
72

Section 3.3 of the Automation Contract provides in relevant part: "x x x x

SMARTMATIC, as the joint venture partner with the greater track record in automated elections, shall be in charge of the technical aspects of the counting and canvassing software and hardware, including transmission configuration and systems integration.

SMARTMATIC shall also be primarily responsible for preventing and troubleshooting technical problems that may arise during the election. x x x x"
73

TSN, Joint Congressional Oversight Committee on Automated Election System, April 20, 2009, pp. 61-63.
74

Id., p. 67. Id., p. 71.

75

76

Atty. Ferdinand Rafanan is the Director of the Law Department of the COMELEC. He is also the Chairman of the COMELEC SBAC.
77

Supra note 73, p. 71. Id., pp. 80-85.

78

79

This was supposed to be a hearing of the Joint Committee on AES, but Representative Locsin (Chair of the House Panel) was indisposed and was not able to attend. As such, only the Senate Committee on Constitutional Amendments, Revision of Codes and Laws was convened, with the understanding that the records of the hearing were to be reproduced in the Joint Committee on AES.
80

Mr. Ferdinand Rafanan is the Head of the COMELEC Legal Department.

81

TSN, Senate Committee on Constitutional Amendments, Revision of Codes and Laws, June 23, 2009, pp. 40-45.
82

Article 4.9 provides:

"4.9 At all times while this Agreement is in effect, TIM shall have the right to nominate the following officers: a. President and Chief Executive Officer; and b. Assistant Corporate Secretary."
83

Joint Venture Agreement, Article 4.12.

84

Section 12 of RA 8436, as amended, sets forth the prior successful use qualification as follows: "SEC. 12. Procurement of Equipment and Materials. To achieve the purpose of this Act, the Commission is authorized to procure, in accordance with existing laws, by purchase, lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities and other services, from local or foreign sources free from taxes and import duties, subject to accounting and auditing rules and regulations. With respect to the May 10, 2010 elections and succeeding electoral exercises, the system procured must have demonstrated capability and been successfully used in a prior electoral exercise here or abroad. Participation in the 2007 pilot exercise shall not be conclusive of the system's fitness." (Emphasis supplied)
85

Daniel P. Tokaji, The Paperless Chase: Electronic Voting and Democratic Values, 73 Fordham L. Rev. 1711 (2005), citing Eric A. Fischer, Voting Technologies in the United States: Overview and Issues for Congress 2 (2001).
86

Id., citing also R. Michael Alvarez et al., Counting Ballots and the 2000 Election: What Went Wrong?, in Rethinking the Vote: The Politics and Prospects of American Electoral Reform 34, 39 (Ann N. Crigler et al. eds., 2004).
87

Id., citing Caltech/MIT Voting Tech. Project, Voting: What Is, What Could Be 18 (2001).
88

U.S. General Accounting Office, Elections: Elections Voting Offers Opportunities and Presents Challenges (GAO Report No. GAO-04766T) (2004). Note that the AES procured by COMELEC from Smartmatic TIM Corporation entails the electronic transmission of the tally results from the polling place to the central tally location.
89

Id. Id.

90

91

COMELEC Advisory Council Post-election Report on the Use of Automated Election System (AES) in the 2008 ARMM Elections

Submitted to the Joint Congressional Oversight Committee on Automated Election System and the Commission on Elections (October 2008), at 4.
92

Id. at 16.

93

As a point of clarification, the CCOS machines used during the 2008 ARMM elections, as well as the PCOS machines offered by the Smartmatic TIM Corporation for the 2010 elections, do not use the Optical Mark Reader (OMR) technology. This is evident from the statements of COMELEC Executive Director Jose M. Tolentino during the February 2, 2009 hearing of the Senate Committee on Finance, as follows: "MR. TOLENTINO. So there are three technologies recommended by the Advisory Council [for the 2010 elections]. We have the Direct Recording Electronic or the DRE wherein all that the voter has to do is to press a touchpad or a touchscreen. In the ARMM, with the voters pressed the photograph of the candidate of his choice. The two other technologies would be the Precinct Count Optical Scan and Central Count Optical Scan. Youll note that the last two are both optical scans, meaning they scan the ballot and they actually take photographs of the ballot. The only difference being the precinct count would be at the precinct level while the central count would be installed or machines installed at the voting center. xxxx MR. TOLENTINO. x x x x And we also included a small slide on the difference between the optical scan and the OMR. Everybody thinks that OMR and optical scan are one and the same and they are the same only with respect to the use of a paper ballot. However, the optical scan scans the entire ballot while OMR reads marks only. [An] important feature there would be, in an optical scan, the system can take the photograph of the ballot which is actually a second paper trail of the ballot. THE CHAIRMAN [SEN. ANGARA]. Which one did you test during

the MR. TOLENTINO. We called it OMR, but actually in the ARMM, it was already an optical scan. THE CHAIRMAN. OMR? MR. TOLENTINO. Yeah, we called it the OMR but actually the system is already an optical scan." (Emphasis supplied.)
94

The law specifically requires that the AES to be procured by COMELEC must at least have the following functional capabilities: (a) Adequate security against unauthorized access; (b) Accuracy in recording and reading of votes as well as in the tabulation, consolidation/canvassing, electronic transmission, and storage of results; (c) Error recovery in case of non-catastrophic failure of device; (d) System integrity which ensures physical stability and functioning of the vote recording and counting process; (e) Provision for voter verified paper audit trail; (f) System auditability which provides supporting documentation for verifying the correctness of reported election results; (g) An election management system for preparing ballots and programs for use in the casting and counting of votes and to consolidate, report and display election results in the shortest time possible; (h) Accessibility to illiterates and disabled voters; (i) Vote tabulating program for election, referendum or plebiscite; (j) Accurate ballot counters; (k) Data retention provision;

(l) Provide for the safekeeping, storing and archiving of physical or paper resource used in the election process; (m) Utilize or generate official ballots as herein defined; (n) Provide the voter a system of verification to find out whether or not the machine has registered his choice; and (o) Configure access control for sensitive system data and functions.
95

See Sections 1 and 5 of RA 8436, as amended.

96

The TWG was composed of twenty-two (22) representatives from the COMELEC Information Technology Department, COMELEC Internal Audit Office, the offices of each of the COMELEC Commissioners, the National Computer Center and the Department of Science and Technology.
97

Systems Evaluation Consolidated Report and Status Report on the Post-Qualification Evaluation Procedures, June 1, 2009, p. 1.
98

Id., pp. 2-6.

99

Official Observers Report on the AES Bidding Process by Dr. Arwin A. Serrano of the PPCRV (Annex 10 of Public Respondents Memorandum); Observation Report of the Ombudsman Task Force: "Poll Automation" (Annex 11 of Public Respondents Memorandum).
100

See Espinosa v. Makalintal, 79 Phil. 134 (1947); Coloso v. Board of Accountancy, 92 Phil 938 (1953); Pajo v. Ago, 108 Phil. 905 (1960); Suarez v. Reyes, G.R. No. L-19828, February 28, 1963, 7 SCRA 461; Ganitano v. Secretary of Agriculture and Natural Resources, G.R. No. L-21167, March 31, 1966, 16 SCRA 543; Villegas v. Auditor General, G.R. No. L-21352, November 29, 1966, 18 SCRA 877; Manuel v. Villena, G.R. No. L-28218, February 27, 1971, 37 SCRA 745; Lacuesta v. Herrera, G.R. No. L-33646, January 28, 1975, 62 SCRA 115; Lianga Bay Logging Co., Inc. v. Enage, G.R. No. L-30637, July 16, 1987, 152 SCRA 80; Felipe Ysmael, Jr. & Co., Inc. v. The Deputy Executive Secretary, et al., G.R. No. 79538. October 18, 1990; Concerned Officials of the Metropolitan Waterworks and Sewerage System (MWSS) v. Vasquez, et al., G.R.

No. 109113, January 25, 1995; First Lepanto Ceramics, Inc. v. Court of Appeals, et al., G.R. No. 117680, February 9, 1996.
101

G.R. No. 48609, October 10, 1941, 73 Phil. 288.

102

Duenas v. House of Representatives Electoral Tribunal, et al., G.R. No. 185401, July 21, 2009.
103

Id. Id.

104

105

Citing Cauton v. COMELEC, G.R. No. L-25467, April 27, 1967, 19 SCRA 911; Pangandaman v. COMELEC, G.R. No. 134340, November 25, 1999, 319 SCRA 283.
106

Citing Aratuc v. COMELEC, G.R. Nos. L-49705-09, February 8, 1979, 88 SCRA 251.
107

Issued by the COMELEC-SBAC on April 15, 2009. Article 21- Contract Documents

108

21.1 "Contract Documents" refers to the following documents, and they [sic] are hereby incorporated and made integral parts of this Contract: xxxx 21.4 This Contract, together with the Contract Documents, constitutes the entire agreement between the parties. x x x
109

Request for Proposal, Part IV, item 33.

110

TSN, Senate Committee on Constitutional Amendments and Revision of Codes and Laws, June 23, 2009, pp.95-97.
The Lawphil Project - Arellano Law Foundation

DISSENTING OPINION CARPIO, J.: I vote to grant the petition in part. The stipulations in the Contract1 between the Commission on Elections (COMELEC), on the one hand, and Total Information Management, Inc., (TIM) and Smartmatic International, Inc., (Smartmatic), on the other, implementing a nationwide automated election in the 10 May 2010 elections, are void for being violative of Section 5 and Section 26 of Republic Act No. 8436 (RA 8436), as amended by Republic Act No. 9369 (RA 9369). Section 5 of RA 8436, as amended, mandates a pilot or partial automation before a nationwide automated election system can be implemented. Section 26 of the same law vests on the COMELEC "exclusive control and supervision" over the automated election system. The Contract violates these provisions of RA 8436, as amended. Background On 23 January 2007, Congress passed RA 9369 amending the first automated election law, RA 8436.2 Section 5 of RA 8436, as amended by RA 9369, which amendment took effect on 10 February 2007, authorized the COMELEC to: [U]se an automated election system or systems in the same election in different provinces, whether paper-based or a direct recording automated election system as it may deem appropriate and practical for the process of voting, counting of votes and canvassing/consolidation and transmittal of results of electoral exercises: Provided, that for the regular national and local election, which shall be held immediately after effectivity of this Act, the AES shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao, to be chosen by the Commission x x x x In succeeding regular national or local elections, the AES shall be implemented nationwide. (Emphasis supplied) The COMELEC did not use any automated election system in the 14

May 2007 elections, the national and local elections held after RA 9369 took effect. On 10 July 2009, the COMELEC, on the one hand, and TIM and Smartmatic (Provider), on the other, signed the Contract for the automated tallying and recording of votes cast nationwide in the 10 May 2010 elections. For P7,191,484,739.48, the COMELEC leased for use in the 10 May 2010 elections 82,200 optical scanners (and related equipment) and hired ancillary services of the Provider.3 On 9 July 2009, petitioners, as taxpayers and citizens, filed this petition4 to enjoin the signing of the Contract or its implementation and to compel disclosure of the terms of the Contract and other agreements between the Provider and its subcontractors.5 Petitioners sought the Contracts invalidation for non-compliance with the requirement in Section 5 of RA 8436, as amended, mandating the partial use of an automated election system before deploying it nationwide. To further support their claim on the Contracts invalidity, petitioners alleged that (1) the optical scanners leased by the COMELEC "do not satisfy the minimum systems capabilities" under RA 8436, as amended and (2) the Provider not only failed to submit relevant documents during the bidding but also failed to show "community of interest" among its constituent corporations as required in Information Technology Foundation of the Philippines v. COMELEC (Infotech).6 In their Comments, respondents COMELEC and the Provider raised the following threshold contentions: (1) petitioners neither have legal interest nor locus standi to question the validity of the Contract as none of them was party to the Contract and the petition does not raise constitutional issues; (2) the controversy is not ripe for adjudication as the 2010 elections have not taken place; (3) petitioners failed to exhaust administrative remedies;7 (4) petitioners failed to observe the hierarchy of courts by not seeking prior recourse from lower courts of concurrent jurisdiction; and (5) neither the writ of mandamus nor the writ of certiorari lies because the documents petitioners wish to compel production are available to the public and the COMELECs execution of the Contract does not involve the exercise of its quasi-judicial powers.

On the merits, respondents defend the validity of the Contract on the following grounds: (1) the requirement for the limited use of an automated election system was intended for the 14 May 2007 elections, the national and local elections "held immediately after effectivity" of RA 9369 on 10 February 2007; (2) compliance with the requirement of limited automation in the 2007 elections is not a condition precedent for deploying the automated system nationwide in the 2010 elections following the mandate of Section 5, as amended, that "In succeeding regular national or local elections, the AES shall be implemented nationwide;" (3) compliance with Section 5, as amended, is merely directory considering Section 12 of RA 8436, as amended by RA 9369, which provides that "With respect to the May 10, 2010 election and succeeding electoral exercises, the system procured must have demonstrated capability and been successfully used in a prior electoral exercise here or abroad. Participation in the 2007 pilot exercise shall not be conclusive of the system's fitness."; and (4) Republic Act No. 9525 (RA 9525), enacted on 23 March 2009, allocating the budget for "an automated election system" in the 10 May 2010 elections represents the most recent expression of legislative intent on the subject. Belying petitioners' allegation that the optical scanners failed to meet minimum systems capabilities under RA 9369, respondents invoked the results of the pre-procurement demonstration of the system before the COMELEC and other government officials on four occasions with the tested scanners showing 100% reading accuracy, surpassing COMELECs 99.995% standard.8 Lastly, respondents contended that the Provider not only complied with the bidding documentation requirements but also met the "community of interest" standard in Infotech for joint ventures. On disclosing the terms of its subcontracts, the Provider maintained that the Contract does not require them to do so. We granted intervention to the Philippine Senate, which filed a Comment-in-Intervention, joining causes with respondents, and to Atty. Pete Quadra, who filed a Petition-in-Intervention, assailing the lack of credible systems audit under the Contract. We also requested three amici curiae to comment on the petition.9

We heard the parties and an amicus curiae10 in oral arguments on 29 July 2009. In their Memoranda, respondents called the Court's attention to Senate Resolution Nos. 96 and 567, passed after the 11 August 2008 automated elections in the Autonomous Region in Muslim Mindanao (ARMM), urging the COMELEC to prepare for the "full automation" of the 10 May 2010 elections. Respondents TIM and Smartmatic also raised a new alternative argument that the 2008 ARMM elections constitute "substantial compliance" with the initial limited use of an automated system under Section 5 of RA 8436, as amended.11 On the Threshold Issues The threshold issues respondents raise on petitioners lack of locus standi and non-exhaustion of administrative remedies were similarly raised and found surmountable in Infotech. There, as here, the individual petitioners were citizens and taxpayers who sought immediate recourse from this Court in a petition for certiorari to annul the award of the contract to use an automated election system in the 2004 elections. The Court in Infotech found the petitioners status as taxpayers sufficient to give them personality to file the suit since the contract involved the disbursement of public funds.12 The underlying important public interest involved in the contract in Infotech, as here, of ensuring the "conduct of free, orderly, clean, honest and credible elections"13 also suffices to vest legal standing to petitioners as citizens. Direct resort to this Court was not deemed fatal to the cause of the petitioners in Infotech for facts peculiar to that case14 and because the nature of the petition allows for the application of some exceptions to the rule on prior resort to administrative remedies, namely, the unreasonability of insisting on compliance with the rule, resort to this Court is the plain, speedy and adequate remedy, and there is urgent need for judicial intervention.15 These exceptions equally apply here and doubly serve as grounds to reject the COMELECs objection on prematurity of this suit. Indeed, waiting until after the Contract has been implemented, as what the COMELEC wants petitioners to do, is a sure way to moot any challenges to its validity.

Nor can the rule of mandating observance of hierarchy of courts bar resolution of this suit on the merits. Just as we found it proper to review the contract in Infotech, we should do so now for the same reasons that we waived compliance with the rule on exhausting remedies before the COMELEC. On the Validity of the Contract The Use of an Automated Election System Nationwide Under the Contract Violates Section 5 of RA 8436, as Amended Section 5 of RA 8436, as Amended, Imposes a Mandatory Two-tiered Use of an Automated Election System Contrary to the COMELECs view that Section 5,16 as amended, "merely envisions" an initial limited use of an automated system in the 2007 elections,17 both the text of the law and the intent behind its enactment show a legislative design to use an automated system following a staggered, dual-phased implementation scheme: the first phase calls for the use of an automated system on a partial or limited scale involving selected, voter-dense areas in each of our three major island groupings while the second phase calls for the full use of an automated system nationwide. Textually, this is made mandatory by the uniform use of the word "shall" when Section 5 mandated that "the AES shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao, to be chosen by the Commission" (phase one) and "In succeeding regular national or local elections, the AES shall be implemented nationwide" (phase 2). The word "shall" operates to impose a duty.18 The sponsorship speech interpellation and floor deliberations on Senate Bill 2231, the precursor Section 6 of RA 9369 (amending and re-numbering Section 6 of RA 8436), confirm the legislative intent to adopt a dual-phased scheme of implementation, thus: [Interpellation by Senator Aquilino Pimentel, Jr. on the Sponsorship Speech of Senator Richard Gordon]:

Senator Gordon . [], it is important that we show that in our proposal here today, which I am sure practically every member of the Senate will help me craft better legislation, in the interpellations and on the amendments, it is my hope that we could proceed with this. We impose an absolute minimum of 2 cities and 2 provinces, so that if we can do so with 10 cities of 10 provinces, so be it, Mr. President. Senator Pimentel. The gentleman is trying to pilot the. . . . Senator Gordon. Yes, Mr. President, That is right. We want to pilot this so that by 2010, we should be ready to go all out. That is why it is important that we take the first steps. We can even pilot this in all the highly urbanized cities or one remote province, like somewhere in Mindanao, even in Tawi-Tawior, for that matter, just to prove the point that it can happen. It is up to us here in the Senate now to say, if we want to inculcate or to put in there the number of cities or the number of provinces that are committed, this shall be part of it. That is why we leave that openended, Mr. President. xxxx Senator Pimentel. Mr. President, the comments of the gentleman really demonstrate that there are practical suggestions that he is espousing, especially on the matter of starting to cover not the entire country immediately in one fell blow but gradually. There is merit to that proposal.19 (Emphasis supplied) xxxx [Interpellation by Senator Luisa P. Estrada of Senator Gordon during Second Reading]: Senator Estrada (L). Will the gentleman agree with me that the best way to remove doubt as to the integrity of the system is to conduct the mock elections at least three days prior to the actual elections? Senator Gordon. Actually, Mr. President, we could do that, yes, but we provided three months for the conduct of the mock elections so that we have enough time to correct the kinks, if there are any. And

we would need that time, after which the whole thing is secured and the only time the system gets started is in the morning of the elections, just like the previous elections when the ballot box is opened and the machine codes are simultaneously triggered. Senator Estrada (L). Mr. President, I think, that is a long time. Three months is a long time to conduct mock elections before the actual elections. Senator Gordon. That is why, Mr. President, in the initial phase of this exercise, for the year 2007, the absolute minimum is two cities and two provinces so we can really control the scenario. Now, when we see that this had worked in a controlled scenario, perhaps, I hope that we can do all the major cities of the country, all the highly urbanized cities in the country, because I guess that this is just an absolute minimum. But, certainly, when the main elections come in 2010, I am sure technology will be advancing so well that we could actually take the kinks out of the system, protect it and make sure that we can even do a mock election maybe even closer than the aforesaid three months.20 (Emphasis supplied) The framework of using an automated election system in a staggered, dual-phased manner in RA 9369 is not novel. The same legislative scheme was adopted by Congress in RA 8436, although the controlled variable in the first phase of RA 8436 was not the scope of the electoral area but the positions included in the automated tallying. Thus, instead of limiting the use of an automation system in highly urbanized areas and provinces in the first phase, RA 8436 mandated the use of an automated system in the 11 May 1998 elections to canvass the votes cast "only for the positions of president, vice-president, senators, and parties, organizations or coalitions participating under the party-list system."21 One need not search far and wide to see the wisdom, logic and practicality for this legislative insistence on transforming our electoral processes from manual to automated gradually in phases. As Senator Gordon puts it, the ultimate goal is to "take the kinks out of the system" before deploying it full scale. Indeed, in systems implementation, a pilot run or a parallel run before full turn-over to the

new system is a norm.22 Thus, even as Congress gave the COMELEC discretion in choosing the appropriate technology, Congress insisted on a phased implementation involving local government units from each of our three major island groupings cognizant as it was of the difficulties inherent in automating elections in an archipelago as dispersed as ours, with an average nationwide telecommunications coverage of not more than 75%. Nor can it be said that compliance with the requirement in RA 9369 for pre-election field test and mock election,23 stipulated in the Contract,24 serves the same purpose as the initial staggered or partial implementation of the automated system. Congress treated both mechanisms differently by separately providing for partial implementation in Section 5, as amended, and for a field test and mock election report by the Technical Evaluation Committee in Section 11.25 Indeed, field tests and mock elections can never replicate actual conditions on election day.26 For the same reason, respondents reliance on the results of the preprocurement demonstration of the system hardly suffices to prove its reliability, much less functionality, in actual election conditions. The following observations on the laboratory tests by amicus Information Technology Foundation of the Philippines (ITFP), are enlightening: The demonstration of PCOS only showed that the machine can scan accurately. Just like any computerized system, designing an Automated Election System (AES) should not only consider hardware that works. It should also ensure that all the other elements of an automated system such as the communication and transmission devices and networks, the servers, the end-to-end software system, the "peopleware" (project managers, system designers, development, maintenance personnel, operators, trainers, etc.), and the users (voters) mesh together smoothly. The scanning capability of the hardware has been demonstrated. The other equally important elements have not. It is these other elements that should now be considered and focused on and be the concentration of the pilot run. The framers of the law (RA 9369), who were assisted by a Technical Working Group (TWG), appreciate[d] the complexities of an automated election system and for that reason included the requirement of a pilot run.27 (Emphasis supplied)

The COMELEC, dangerously parroting the line of the party which stands to profit from the Contract, justifies non-compliance with the partial automation mandated in Section 5, as amended, by treating such partial automation as limited to the 2007 elections. Continuing with their line of reasoning and thus, ignoring the compelling reason behind such partial automation, respondents conclude that if Section 5, as amended, is interpreted as requiring an initial partial use of the automated system before its full deployment nationwide, then "Philippine elections will never be automated."28 It may be that, Section 5, as amended, needs statutory interpretation whether a partial automation is a condition precedent to a full national automation. Section 5, as amended, provides that: (1) "for the regular national and local election, which shall be held immediately after effectivity of this Act, the AES shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao" and the elections of 14 May 2007 was the first regular national and local election after RA 9369 took effect on 10 February 2007, and (2) "In succeeding regular national or local elections, the AES shall be implemented nationwide" and the 10 May 2010 elections is the "regular national or local elections" succeeding the elections of 14 May 2007. The office of statutory interpretation has never been to privilege the letter of the law over its spirit. On the contrary, it has been and always will be the other way around to breathe life to the legislative intent even to the extent of ignoring the text.29 This is because use of language, while a mark of civilization,30 remains susceptible to error as the Court knows all too well after having reviewed in the past imprecisely drafted legislation.31 To give effect to the legislative intent behind Section 5, as amended, the automated election system under the Contract should be limited to partial automation only, covering at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao, to be chosen by the COMELEC. Afterwards, with the COMELEC having tested its capabilities and manpower and after learning all the valuable lessons from the initial exercise, the automated system the COMELEC selects for the succeeding elections of 12 May 2013 can be fully deployed nationwide.

Procurement Standards Under Section 12, as Amended, Meant to Assure Efficiency of System and Proof of System Provider's Capability, Supplementing Minimum Standards Under Section 6, as Amended Section 1232 of RA 8436, as amended by RA 9369, which involves the procurement of equipment and materials for automation, provides another layer of standard of system and system's provider capability for the 10 May 2010 elections, namely: (1) prior use, here or abroad, of the system and (2) proof by the system provider of its system's fitness, regardless of its "[p]articipation in the 2007 pilot exercise."33 These are mandatory requirements which any provider bidding to automate the 10 May 2010 elections must show the COMELEC before the COMELEC can procure the offered goods and services. The phrase "[p]articipation in the 2007 pilot exercise" appears in Section 12 of RA 8436, as amended by RA 9369, under the subheading "Procurement of Equipment and Materials." The phrase refers to the participation of a bidder in the 2007 elections, which participation is not conclusive that the bidder's system of equipment and materials is fit and suitable for the 2010 nationwide electoral exercise. This phrase does not mean that the pilot or partial automation in Section 5, as amended, can be dispensed with prior to a nationwide automated electoral exercise. The requirement of a pilot or partial automation in Section 5, as amended, is a totally different requirement from the requirement of fitness of a bidder's system in the procurement of equipment and materials under Section 12, as amended. Consequently, Section 12, as amended, is no authority to support respondents proposition that the phased automation mandated under Section 5, as amended, may be dispensed with. Indeed, Section 12 has nothing to do with the issue. Section 5 and Section 12, as amended, are separate mechanisms of the law, governing different aspects of the automation project, but commonly intended to ensure the conduct of secure, accurate, and reliable automated elections. RA 9525 Funding the 10 May 2010 Elections did not Repeal Section 5 of RA 8436, as amended

Neither the text nor purpose of RA 9525 supports respondents submission that RA 9525 has repealed Section 5 of RA 8436, as amended. On the contrary, the proviso in Section 2 of RA 9525 states that "the disbursement of the amounts herein appropriated or any part thereof shall be authorized only in strict compliance with the Constitution [and] the provisions of Republic Act No. 9369 x x x." Thus, the COMELEC is authorized to spend the appropriated amount only in strict compliance with RA 9369, which mandates a partial automation. The statement in Section 2 that "such measures that will guaranty transparency and accuracy in the selection of the relevant technology of the machines to be used in the May 10, 2010 automated national and local election" shall be adopted should be read with the rest of Section 2. At any rate, RA 9525 funds the implementation of RA 8436, as amended by RA 9369. An implementing statute cannot repeal what it intends to enforce. The ARMM Elections in 2008 did not Meet the Parameters of a Limited Initial Use of the AES in RA 8436, as Amended The parameters for the initial limited use of an automated election system under Section 5 of RA 8436, as amended, are (1) the AES is used in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao, (2) as selected by the COMELEC. The automated elections34 in the ARMM held last 11 August 2008 did not satisfy these parameters because (1) they were held in southern Mindanao only, involving six provinces and two cities,35 (2) as mandated by law.36 In practical terms, this means that the COMELEC, in the 2008 ARMM elections, did not use the tri-level transmission of election results from voter-dense areas from north to south of the archipelago, the transmission scheme to be used in the 10 May 2010 elections. This fact and the comparatively narrow scope of the 2008 ARMM elections in terms of voter population (1.6M in the 2008 ARMM elections as against 40M in the 10 May 2009 elections), number of machines provided by Smartmatic (2,558 DRE machines in the 2008 ARMM elections as against 82,200 precinct-based scanners in the 10 May 2009 elections), and positions involved (26 in the 2008 ARMM elections as against roughly 300 in the 10 May 2010 elections),37 put into serious doubt the validity of the Providers claim that the 2008

ARMM elections constitute "substantial compliance" with the mandate for an initial limited use of the automated system under Section 5 of RA 8436, as amended. On the other hand, the initial implementation under Section 5, as amended, because of its dispersed geographic scope, puts to use all the system's components. The Position of the Senate, While Entitled to Respectful Consideration, is not Controlling The Senate's position that the COMELEC is authorized to use an automated election system nationwide in the 10 May 2010 elections, as reflected in its Resolution Nos. 96 and 567, represents its contemporaneous interpretation of Section 5 of RA 8436, as amended. As the upper half of our legislature, the Senate is certainly entitled to construe legislation. By tradition and for comity, this branch of the government has always accorded interpretive attempts by the other branches with respectful consideration.38 But it is timely to reiterate that in the distribution of powers ordained in the Constitution, the final word on what the law is lies with this branch.39 The Stipulations in the Contract Relinquishing to Smartmatic Control of the "Technical Aspects" of the Automated Election System Violates Section 26 of RA 8436 Implementing the mandate in the Constitution for the COMELEC to "[e]nforce and administer all laws and regulations relative to the conduct of an election,"40 Section 26 of RA 8426 places the automated election system under the COMELECs "exclusive control and supervision," thus: Supervision and control. - The System shall be under the exclusive supervision and control of the Commission. For this purpose, there is hereby created an information technology department in the Commission to carry out the full administration and implementation of the System. The Commission shall take immediate steps as may be necessary forthe , installation, administration, storage, and maintenance of equipment and devices, and to promulgate the necessary rules and

regulations for the effective implementation of this Act. (Italicization in the original; boldfacing supplied) This power of "exclusive control and supervision" covers the adoption of measures for the "installation, administration, [and] storage" of the systems "equipment and devices." Juxtaposed with these constitutional and statutory parameters is the sweeping stipulation in the Contract that "Smartmatic x x x shall be in charge of the technical aspects of the counting and canvassing software and hardware, including transmission configuration and system integration."41 The extent of Smartmatic's control over the Contract's "technical aspects" is divulged in the Contract's supporting documents which vest on the Provider the responsibility to: (1) generate and distribute the access keys for the canvassing equipment and 82,200 optical scanners to be used on election day;42 (2) deliver the 82,200 optical scanners to their designated precincts and secure them on site;43 (3) prepare the polling places and canvassing centers in all levels (that is, municipal, provincial and national) to make them "fully functional";44 and (4) maintain 100% electronic transmission capability on election day (and thus fill the 25% gap of the countrys current 75% network coverage).45 Items (1) and (3) are unmistakably repugnant to Section 26 of RA 8426. Whoever controls the access keys controls the elections. Control of the access keys means the capacity to instantaneously change the election results in any precinct in the country. Giving to the Provider the access keys both the private and public access keys is like giving to the system administrator of Yahoo or Hotmail one's private password to his or her email account. The private key is supposed to be private to the Chair of the Board of Election Inspectors, generated by him and unknown to the Provider. Otherwise, the Provider will have the capacity to alter the election results at the precinct level. Worse, even the private keys at the canvassing level are generated by the Provider, allowing the Provider

to change the election results at the canvassing level. Clearly, the COMELEC has abdicated control over the elections to the Provider, putting the integrity and outcome of the 10 May 2010 elections solely in the hands of the Provider. Moreover, the polling places and canvassing centers, which are the critical operational areas during the elections, must be under the full control of the COMELEC. What Section 26 confines to the COMELEC's exclusive control and supervision, the COMELEC in the Contract relinquishes to Smartmatic. By designating Smartmatic as the entity in charge of the crucial technical aspects of the automated systems operation equipment security and installation and results canvassing and transmission the COMELEC contented itself with taking charge over the system's non-technical, that is, manual aspects. However, RA 8436 does not bifurcate control and supervision along technical and non-technical lines. On the contrary, Section 26 treated the entire automated system wholistically by mandating that [t]he System shall be under the exclusive supervision and control of the Commission. Section 26 requires no less than complete and exclusive control and supervision by the COMELEC over the automated system. The regime of partial, non-exclusive COMELEC control over the automated system under the Contract falls short of Section 26's stringent standard. A vital policy consideration lies behind the blanket mandate of Section 26. Under our constitutional scheme, the COMELEC is the state organ tasked to [e]nforce and administer all laws and regulations relative to the conduct of an election46 and of "ensuring x x x credible elections."47 By exercising exclusive control and supervision over the automated system, the COMELEC can harness its manpower and resources to efficiently prevent or correct fraud. By surrendering to Smartmatic control over the automated system's "technical aspects," the COMELEC closed the door on manual fraud but opened wide the window to its automated counterpart. As highlighted in the findings of a recent independent study, the threat of internal hacking is all too real: The greater threat to most systems comes not from external hackers, but from insiders who have direct access to the machines. Software can be modified maliciously before being installed into individual

voting machines. There is no reason to trust insiders in the election industry any more than in other industries, such as gambling,where sophisticated insider fraud has occurred despite extraordinary measures to prevent it.48 x x x x Respondents gloss over the import of the offending contractual stipulations, calling attention to the request for bid proposals which gave notice that the COMELEC was accepting bids from "a complete solutions provider x x x which can provide x x x overall nationwide project management service and total customer support under COMELEC supervision and control."49 The Provider also limits the application of the second paragraph of Article 3.3 between TIM and Smartmatic.50 A close reading of the RFP shows that the provision by the Provider of "project management service and total customer support" (paragraph 6, Part II) over which the COMELEC will have supervision and control, corresponds only to Component 3 of the Contract, that is, overall project management. The RFP does not say that the COMELEC exercises supervision and control over the Contract's remaining two components, namely, the paper-based automatedelection system (Component 1) and the the provision for electronic transmission using public telecommunications networks (Component 2).51 On the Provider's contention that the second paragraph of Article 3.3 regulates the relations between TIM and Smartmatic, suffice it to say that the argument would carry weight if the stipulation was placed in the joint venture agreement. The provision in question was placed in the Contract precisely to hold the Provider "liable for all its obligations under this Project," as the first sentence of Article 3.3 provides. Until the COMELEC and the Provider amend the offending stipulations, these stipulations govern the rights and obligations between them. The Contract Provides for the Effects of Partial Annulment Unlike the disposition in Infotech, a finding that the Contract violates Section 5 and Section 26 of RA 8436, as amended, results only in its partial invalidation under the Contracts Severability clause.52 This

leaves COMELEC free to renegotiate with the Provider to scale down scope of the Contract, adjust the contract price, and modify other pertinent stipulations. Using the Automated System Nationwide in the 10 May 2010 Elections Places our Fragile Democracy at Needless Risk The COMELECs lack of experience in nationwide automation, its non-familiarity with its chosen technology, the gaps in security features of the system, the scale of its operation, Smartmatic's control over the automation aspects of the system, and the not more than 75% network coverage currently available in this archipelago of more than 7,000 islands all combine to create a gaping black hole of unknown risks which can crash the untested system come 10 May 2010. Undoubtedly, no automated election system is perfect.53 But we also cannot take chances with our fragile democracy. After all, what these machines count are not the days earnings of a general merchandise store. They tabulate the rawest expression of the sovereign will of every voter in this polity. This is why Congress saw fit to use technologys benefits gingerly. Lost in the headlong rush to switch this countrys electoral system from fully manual to fully automated overnight is the sobering thought that if, for any reason relating to the implementation of the Contract, there is a failure of elections and no President and Vice-President are proclaimed, and no Senate President and Speaker of the House are chosen, by noon of 30 June 2010, a power vacuum is certain to emerge.54 This is the surest way to defeat the purpose of the entire electoral exercise, and put at unnecessary risk our hard-earned democracy. Accordingly, I vote to GRANT IN PART the petition by annulling the provisions of the Contract relating to the nationwide use of automated election system, and instead to DIRECT the COMELEC (1) to implement a partial automation of the 10 May 2010 elections as provided in Section 5 of RA 8436, as amended by RA 9369; (2) to assume full and exclusive control of the access keys to the partial automation system; and (3) to assume control over preparation of the polling places and canvassing centers in all levels to make them fully functional.

ANTONIO T. CARPIO Associate Justice Footnotes

1

Contract for the Provision of An Automated Election System for the May 10, 2010 Synchronized National and Local Elections ("Contract"). The affected provisions of the Contract are Article 3 (Scope of the Project), Article 4 (Contract Fee and Payment), relevant sub-provisions of Article 5 (Responsibilities of the Provider), relevant sub-provisions of Article 6 (COMELECs responsibilities), and relevant sub-provisions Article 7 (Delivery and Acceptance). The affected portions of the Request for Proposal (made integral to the Contract under Article 21) are Component 1-B (Precinct Count Optical Scan), Component 1-C (Counting/Consolidation System), Component 2 (Provision for Electronic Transmission Using Public Telecommunication Networks) and Component 3 (Overall Project Management). Under the Contracts Severability Clause (Article 20), the unaffected provisions remain valid and the parties may opt to renegotiate the invalidated provisions.
2

An Act Authorizing The Commission On Elections To Use An Automated Election System In The May 11, 1998 National Or Local Elections And In Subsequent National And Local Electoral Exercises, Providing Funds Therefor And For Other Purposes.
3

The Contract, divided into three components (paper-based automated-election system [Component 1], provision for electronic transmission using public telecommunications networks [Component 2], and overall project management [Component 3]), requires the Provider to, among others: (1) Develop a data management system (Election Management System), capable of generating audit log and integrating with the COMELECs database to create pre-election configuration data (i.e., voting jurisdictions, number of voters per precinct, positions and seats for election, candidates information and title and date of elections), generate ballot faces, and configure relevant data for different types of elections (e.g. national and local elections, ARMM elections, plebiscites, initiatives, recall elections, and special elections). The

Provider is required to secure the system with authorization and authentication requirements (Component I-A). (Contract, p. 1; Request For Proposal [RFP], pp. 14-15); (2) Configure each of the 82,200 precinct optical scanners (80,136 allocated units plus 2,064 contingency units) for use in the city/municipality/councilor district where each scanner will be deployed on election day to scan "ballots intended for the city/municipality/councilor district for which it has been configured." The Providers obligations on the security features for the scanning of ballots at, and transmission of election results from, each of the 80,000 clustered precincts of 1,000 voters per cluster, are as follows: (a) to generate access keys (such as usernames and passwords) with at least two access levels (operator and administrator); (b) to program each scanner to require "the electronic authentication and certification of the election results x x x by at least two [Board of Election Inspector] (BEI) members" before transmission of the results, in encrypted form, from the precinct level (to the municipal board of canvassers, the COMELEC central server, and the server for the political parties, accredited citizens arm and the Kapisanan ng mga Brodkaster ng Pilipinas) using "wireless, wired or satellite-based connection or a combination thereof" ensuring that the transmission service must be "available 99% of the time"; and (c) to program each scanner "to generate a backup copy of the digitally signed and encrypted ER in a removable data storage device" (Component I-B). (Contract, p. 1; RFP, pp. 15-16; Bid Bulletin No. 4, 27 April 2009, p. 5; Bid Bulletin No. 6, 27 April 2009, pp. 1, 7); (3) Develop a consolidation and canvassing system which will tally election results for municipal, provincial and national offices using transmitted data (i.e. for municipal canvassing, using precinct results; for provincial/district canvassing, using consolidated city/municipal results; for COMELEC canvassing [for senatorial and party-list elections], using consolidated provincial/city results; and for canvassing by Congress [for Presidential and Vice-Presidential elections], using consolidated provincial/city results). To secure the system, the contract requires the Provider to: (a) program the consolidation and canvassing system to "monitor, detect, [and] record x x x intrusion and/or unauthorized access and recognize its authorized users with the use of physical security devices, such as

USB flash drives or PMCIA cards, with digital certificates, aside from the use of user IDs and passwords"; (b) program the system to "decrypt and authenticate the transmitted encrypted election results prior to consolidation/canvassing"; and (c) to program the system to allow the Board of Canvassers (BOC) "to digitally sign all electronic results and reports before transmission." (Component I-C). (Contract, pp. 1, 6; RFP, p. 18); (4) Provide overall project management services and staffing (Component 3) (RFP, pp. 23-27); (5) Train COMELEC executives (83 to 100), technical personnel (100), field personnel (4,000) and BEI members (160,272) on the systems operations. For the COMELEC technical staff, the training should enable them to "operate the systems on their own." (RFP, p. 31; Bid Bulletin No. 20, 27 April 2009, pp. 1-2); and (6) Provide, one week before and after the elections, at least "one technician for every voting/counting and data transmission centers," who "must have cellular telephones or other means of real time communication." (RFP, p. 32).
4

For the writs of Certiorari, Prohibition and Mandamus.

Jarltech International Corporation (supplier of optical scanners), Dominion Voting Systems (copyright owner of the software for the optical scanners) and ToGo Corporation (hired by the Provider to distribute the optical scanners to their assigned precincts).
6

464 Phil.173 (2004).

Respondents TIM and Smartmatic invoke Sections 55 and 58 of Republic Act No. 9184 which provide: Section 55. Protests on Decisions of the BAC.- Decisions of the BAC in all stages of procurement may be protested to the head of the procuring entity and shall be in writing. Decisions of the BAC may be protested by filing a verified position paper and paying a nonrefundable protest fee. The amount of the protest fee and the periods during which the protests may be filed and resolved shall be specified in the IRR.

Section 58. Report to Regular Courts; Certiorari.- Court action may be resorted to only after the protests contemplated in this Article shall have been completed. Cases that are filed in violation of the process specified in this Article shall be dismissed for lack of jurisdiction. The regional trial court shall have jurisdiction over final decision of the head of the procuring entity. Court actions shall be governed by Rule 65 of the 1997 Rules of Civil Procedure. This provision is without prejudice to any law conferring on the Supreme court the sole jurisdiction to issue temporary restraining orders and injunctions relating to Infrastructure Projects of Government.
8

The first test used 625 ballots each with 32 "pre-determined" marks while the second test used 650 ballots each similarly bearing 32 marks (COMELEC Comment, pp. 30-31).
9

The University of the Philippines Computer Center, National Computer Center, and Information Technology Foundation.
10

Information Technology Foundation of the Philippines. Memorandum (TIM and Smartmatic), pp. 54-63. Supra note 6. Section 2(4) and Section 4 , Article IX(C), Constitution.

11

12

13

14

The COMELEC awarded the contract to a bidder even before the Bids and Awards Committee submitted its Report on the bidding.
15

Supra 6at 163. It also appears that the protest mechanism provided in RA 9184, which respondents invoke, applies to losing bidders, not to third parties like petitioners. Section 55.2 of its implementing rules requires the "bidder" to provide relevant contact information in its position paper.
16

Section 5, as amended, reads in its entirety: "SEC. 6. Section 6 of Republic Act No. 8436 is hereby amended to read as follows: SEC. 5 Authority to Use an Automated Election System. - To carry

out the above-stated policy, the Commission on Elections, herein referred to as the Commission, is hereby authorized to use an automated election system or systems in the same election in different provinces, whether paper-based or a direct recording automated election system as it may deem appropriate and practical for the process of voting, counting of votes and canvassing/consolidation and transmittal of results of electoral exercises: Provided, that for the regular national and local election, which shall be held immediately after effectivity of this Act, the AES shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao, to be chosen by the Commission: Provided, further, That local government units whose officials have been the subject of administrative charges within sixteen (16) month prior to the May 14, 2007 election shall not be chosen: Provided, finally, That no area shall be chosen without the consent of the Sanggunian of the local government unit concerned. The term local government unit as used in this provision shall refer to a highly urbanized city or province. In succeeding regular national or local elections, the AES shall be implemented nationwide."
17

COMELEC Comment, p. 23. Bersabal v. Salvador, 173 Phil. 379 (1978). 2 Record of the Senate 50-51 (20 March 2006). Id. at 67-68 (28 March 2006). Section 5 of RA 8436 reads in pertinent parts:

18

19

20

21

Section 5. Authority to use an automated election system. - To carry out the above-stated policy, the Commission on Elections, herein referred to as the Commission, is hereby authorized to use an automated election system, herein referred to as the System, for the process of voting, counting of votes and canvassing/consolidation of results of the national and local elections: Provided, however, That for the May 11, 1998 elections, the System shall be applicable in all areas within the country only for the positions of president, vicepresident, senators and parties, organizations or coalitions participating under the party-list system.

Unlike in RA 9369, Congress in Section 5 of RA 8436 provided a contingency mechanism, that is, for the COMELEC to revert to manual system for "the elections for both national and local positions x x x except in the Autonomous Region in Muslim Mindanao (ARMM)," if "inspite of its diligent efforts to implement this mandate in the exercise of this authority, it becomes evident by February 9, 1998 that the Commission cannot fully implement the automated election system for national positions in the May 11, 1998 elections." Significantly, the original draft for Section 5 in Senate Bill No. 3214, the precursor of RA 8436, provided for the use of an automated system in "three regions" for the 11 May 1998 elections. However, upon the advice of the COMELEC that it will not be able to comply with this scheme, Senator Miriam Santiago, the bills principal author, amended the draft for the first phase to instead cover "17 highlyurbanized cities." During the bill's Second Reading, Senator Marcelo Fernan submitted a proposal to limit the first phase of automation to selected positions instead of selected areas. The Senate approved his proposal (2 Record of the Senate 986-987, 989-990 [19 November 1997]; id. at 149 [1 December 1997]).
22

TSN Oral Arguments (Augusto Lagman), 29 July 2009, pp. 528529.

23

Section 11 of RA 9369 provides in pertinent parts:

SEC. 11. Functions of the Technical Evaluation Committee. - The Committee shall certify, through an established international certification entity to be chosen by the Commission from the recommendations of the Advisory Council, not later than three months before the date of the electoral exercises, categorically stating that the AES, including its hardware and software components, is operating properly, securely, and accurately, in accordance with the provisions of this Act based, among others, on the following documented results: 1. The successful conduct of a field testing process followed by a mock electionevent in one or more cities/municipalities;
24

RFP, pp. 32-33.

25

The distinction was elucidated during the floor deliberations of Senate Bill 2231 when Senator Gordon opposed the amendment of Senator Pimentel to substitute the word "use" in Section 5 with "pilot," thus: Senator Pimentel. x x x x I propose that in lieu of the word "USED", we substitute the following two words PILOT-TESTED IN AT LEAST TWO (2) HIGHLY URBANIZED CITIES AND TWO (2) PROVINCES IN LUZON: AT LEAST TWO (2) HIGHLY URBANIZED CITIES AND TWO (2) PROVINCES IN THE VISAYAS: AND AT LEAST TWO (2) HIGHLY URBANIZED CITIES AND TWO (2) PROVINCES IN MINDANAO TO BE DETERMINED BY THE COMELEC. Senator Gordon. I accept the amendment, without the use of the word "PILOT". I would insist that we use the word "USED" because it might be misconstrued. There is already a provision that there would be a mock election in one province or one city in the bill down the line. Maybe we can go ahead with the word "USED". (2 Record of the Senate 60 [5 April 2006]; capitalization in the original, boldfacing supplied).
26

Under the Contract, both the field test and mock election will use 10 optical scanners involving 17 canvassing units (8 city/municipality, 6 provincial, 2 national and 1 central backup) using 3,000 ballots (Bid Bulletin No. 4, 27 April 2009, pp. 6-7). On 10 May 2010, 80,136 optical scanners will be used with 1,234 canvassing units tallying results from approximately 40M ballots.
27

ITFP Comment, p. 3. ITFPs observation that based on the laboratory tests results, the optical scanners can scan accurately is not shared by another information technology expert, Prof. Pablo Manalastas, who opined that "under actual election conditions where people may use pencil, ball pen, rolling ball jotter, and felt-tip pen, and using all allowable marking styles (dot, check mark, cross mark, and complete shade), the [optical scanners] will be lucky to achieve an accuracy of 50%." (see http://newsbreak.com.ph/index.php?option=com_content&task=view& id=6589&Itemid=88889287 [last visited on 14 August 2009]).
28

Memorandum (TIM and Smartmatic), p. 5. The COMELEC

advanced the same view (Memorandum [COMELEC]), pp. 36-37.

29

City of Baguio v. Marcos, 136 Phil. 569 (1969); Lopez & Sons, Inc. v. Court of Tax Appeals, 100 Phil. 850 (1957). The same rule applies in interpreting the Constitution (Taada v. Cuenco, 103 Phil. 1051 [1958]).
30

Philippine Constitutional Association v. Mathay, 124 Phil. 890, 922 (1966) Castro, J., concurring (referring to language as "one of the distinctive qualities x x x of modern thinking man.")
31

See City of Baguio v. Marcos, supra (involving a textual conflict between the title and Section 1 of Republic Act No. 931 on the reckoning of the prescriptive period to reopen cadastral proceedings) and Lopez & Sons, Inc. v. Court of Tax Appeals, supra note 29 (involving a textual conflict between Section 7 and Section 11 of Republic Act No. 1125 on the review jurisdiction of the Court of Tax Appeals).
32

The provision reads in its entirety: "SEC. 10. Section 8 of Republic Act No. 8436 is hereby amended to read as follow: SEC.12. Procurement of Equipment and Materials. - To achieve the purpose of this Act, the Commission in authorized to procure, in accordance with existing laws, by purchase, lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities, and other service, from local or foreign sources free from taxes and import duties, subject to accounting and auditing rules and regulation. With respect to the May 10, 2010 election and succeeding electoral exercises, the system procured must have demonstrated capability and been successfully used in a prior electoral exercise here or abroad. Participation in the 2007 pilot exercise shall not be conclusive of the system's fitness. In determining the amount of any bid from a technology, software or equipment supplier, the cost to the government of its deployment and implementation shall be added to the bid price as integral thereto. The value of any alternative use to which such technology, software or equipment can be put for public use shall not be deducted from the original face value of the said bid.

33

As pointed out by Justice Teresita J. Leonardo-De Castro in the oral arguments (TSN, 29 July 2009, pp. 499-500).
34

Using optical mark reader (OMR) and direct recording electronic (DRE) technologies.
35

Shariff Kabunsuan, Maguindanao, Lanao del Sur, Basilan, Sulu and Tawi-Tawi and the cities of Marawi and Lamitan. Shariff Kabunsuan has since reverted to its mother province, Maguindanao, under the ruling in Sema v. Commission on Elections (G.R. No. 177597, 16 July 2008, 558 SCRA 700) voiding its creation.
36

Republic Act No. 9333.

37

Governor, Vice-Governor and 24 legislators (members of the Regional Legislative Assembly).

38

Yra v. Abao, 52 Phil. 381 (1928).

39

In Taada v. Cuenco, 103 Phil. 1051 (1958), the Court noted but did not follow the interpretation of the Secretary of Justice of Section 11, Article VI of the 1935 Constitution.
40

Section 2(1), Article IX(C), Constitution. Article 3.3 which provides in full:

41

The PROVIDER shall be liable for all its obligations under this Project, and the performance of portions thereof by other persons or entities not parties to this Contract shall not relieve the PROVIDER of said obligations and concomitant liabilities. SMARTMATIC, as the joint venture partner with the greater track record in automated elections, shall be in charge of the technical aspects of the counting and canvassing software and hardware, including transmission configuration and system integration. SMARTMATIC shall also be primarily responsible for preventing and troubleshooting technical problems that may arise during the election. The PROVIDER must provide to SMARTMATIC at all times the support required to perform the above responsibilities.

42

RFP, p. 15; Bid Bulletin No. 10, 27 April 2009, p. 2. The importance of controlling the access keys was illustrated in the ARMM Regional elections in 2008 when Smartmatic, which the COMELEC contracted to supply some of the equipment used, remotelyaccessed several tabulating machines to recalibrate their software after the machines "zeroed-out" the results due to an error in logging the number of cast ballots. (Manuel A. Alcuaz, Jr., Mapping the Future [Is the Smartmatic-TIM-COMELEC Contract Front-Loaded?], Philippine Daily Inquirer, 20 July 2009, p. B2-2). Commenting on Smartmatic's control over the private and public keys (to be distributed to the BEIs and [Board of Canvassers] personnel), an IT expert noted: "Since Smartmatic has this responsibility [of generating the access keys], it will have possession of all BEIs' private keys, and will give Smartmatic the capability to change the [Election Results] of any precinct in the entire country, resulting in massive computerized cheating in case this capability is exploited by Smartmatic." (Professor Pablo Manalastas at http://pmana.multiply.com/journal/item/68/Harry_Roque_vs_COMELE C-Smartmatic[last visited on 25 August 2009]).
43

Bid Bulletin No. 6, 27 April 2009, p. 7; Bid Bulletin No. 10, 27 April 2009, p. 3.
44

Bid Bulletin No. 19, 27 April 2009, p. 2. Bid Bulletin No. 6, 27 April 2009, pp. 1-2. Section 2(1), Article IX(C), Constitution.

45

46

47

See Section 2(4) and Section 4, Article IX(C) of the Constitution authorizing the COMELEC to deputize law enforcement agencies and regulate franchises, respectively, to ensure "free, orderly, honest, peaceful, and credible elections."
48

Report of the Commission on Federal Election Reform (September 2005), p. 36, available at http://www.american.edu/ia/cfer/report/full_report.pdf (last visited on 14 August 2009).
49

RFP, p. 5.

50

Memorandum (TIM and Smartmatic), p. 100. The relevant portion of the RFP provides (p. 5):

51

The Commission on Elections (COMELEC), through its Bids and Awards Committee (BAC), is currently accepting bids for the lease, with an option to purchase, of an automated election system (AES) that will meet the following needs: (1) Introduction of a new system of voting to the Filipino electorate nationwide without deviating much from the manual manner of voting and which protects the voters right to the secrecy of his vote; (2) An automated system of counting of votes which can count the voters vote accurately and as intended by the voter, which can secure the precinct results in such a way that it cannot be tampered with or read outside the system, and the results of which can be accepted as input by the existing canvassing application of the COMELEC; An integrated and comprehensive system for preparing and managing pre-election configuration and post-election requirements; (3) A secure, reliable and redundant service for electronic transmission of precinct results from authorized sources to COMELEC-designated target destinations using public telecommunication network, including Internet access from all cities, municipalities and provinces; (4) A consolidation/canvassing system that allows consolidation of precinct results, and city/municipal and provincial results; and (5) A complete solutions provider, and not just a vendor, which can provide experienced and effective overall nationwide project management service and total customer support (covering all areas of project implementation including technical support, training, information campaign support, civil and electrical works service, warehousing, deployment, installation and pullout, contingency planning, etc.), under COMELEC supervision and control, to ensure effective and successful implementation of the Project. (Emphasis supplied)

When matched with the Contract's "components," paragraph 3 corresponds to Component 1 (paper-based automated-election system) while paragraphs 4 and 5 correspond to Component 2 (electronic transmission using public telecommunications networks).
52

Article 20 of the Contract provides: "If any provision of this Contract is declared illegal, unenforceable or void, the parties shall negotiate in good faith to agree upon a substitute provision that is legal and enforceable and consistent with the intentions of the Project. The rest of this contract that is not materially affected by such declaration shall remain valid, binding and enforceable." Under Article 1409 of the Civil Code, contracts whose purpose is contrary to law are void.
53

Indeed, even technologically advanced democracies such as the United States and some countries in Europe continue to experience glitches in the operation of their electronic voting systems. (See F. Emmert, Trouble Counting Votes? Comparing Voting Mechanism in the United States and Selected Countries, 41 Creighton L. Rev. 3 [2007]).
54

Under Section 7, Article VII of the Constitution, the Vice-President, Senate President and Speaker of the House succeeds to the Office of the President in case of vacancy, in that order. Congress has yet to pass a law providing "for the manner in which one who is to act as President shall be selected until a President or a Vice-President shall have qualified" as required under Section 7.
The Lawphil Project - Arellano Law Foundation

SEPARATE OPINION CORONA, J: A new civilization is emerging in our lives, and blind men everywhere are trying to suppress it. This new civilization brings with it new family styles; changed ways of working, loving, and living; a new economy; new political conflicts; and beyond all this, an altered consciousness

as well. Pieces of this new civilization exist today. Millions are already attuning their lives to the rhythms of tomorrow. Others, terrified of the future, are engaged in a desperate, futile flight into the past and are trying to restore the dying world that gave them birth. The dawn of this new civilization is the single most explosive fact of our lifetimes.1 The Third Wave of the Philippine electoral system is upon us. The ballot, one of the most significant means through which the people directly participate in governance by periodically choosing their representatives, is evolving from purely paper-based to computerreadable and the elections are progressing from manual to automated. Indeed, the means by which popular sovereignty may be exercised through suffrage is about to change considerably. The tsunami of change in our electoral system encourages us to adopt the words of the renowned futurist Alvin Toffler as our own: "We are the children of the new transformation, the Third Wave." Back then, there was the papeleta oficial. It was barely the size of this paper and only one side was written with the titles of seven elective offices. On the space corresponding to each office, a voter wrote the name of the chosen candidate. The voter would then deposit the papeleta in a ballot box and, at the closing of the polls, the votes would be publicly counted and tallied, with a copy of the statement of the results sent by registered mail or special messenger to the provincial treasurer. If heaven cooperated, the election results were known within two months.2 Through the years, the papeleta evolved into the official ballot, commonly known as the balota. The balota was of uniform size and provided by the Commission on Elections (Comelec). It was printed in black ink on white security paper with distinctive, clear and legible water marks that readily distinguished it from ordinary paper. Each balota was in the shape of a strip with stub and detachable coupon containing the ballots serial number and a space for the thumbmark of the voter on the detachable coupon. It contained all the names of all the offices to be voted for in the election, allowing opposite the name of each office sufficient space or spaces with horizontal lines where the voter wrote the name or names of individual candidates

voted for by him. The voter, after affixing his thumbmark on the detachable coupon in the presence of the board of election inspectors, deposited his balota and the coupon in the respective compartments of the ballot box. As soon as the voting was finished, the ballots were counted publicly and the totals of votes recorded in the tally board and election returns. The returns were then submitted to the various boards of canvassers (municipal or city, provincial and national) for canvassing. The election results were hopefully proclaimed within one week (for local positions) or up to two months (for national positions). In the coming synchronized national and local elections in May 2010, it will be the precinct count optical scan (PCOS) ballot. It will be nearly thrice the size of this paper, with both sides filled with the names of at least 600 candidates and opposite each name will be a spot which the voter can mark to indicate his choice. It will be fed manually into the PCOS which in turn will determine the ballots authenticity, tally the votes marked therein and generate digitally signed and encrypted election results to be electronically transmitted to different levels for consolidation and canvass.3 Hopefully, within two days the election results will be known. The shift from manual elections to an automated election system (AES) has indeed become inevitable. Not just one but four laws have been passed decreeing it: RA4 80465 in 1995, RA 84366 in 1997, RA 93697 in 2007 and RA 95258 in 2009. For the 2010 elections, automation is envisaged in RA 8436, as amended by RA 9369. Pursuant to that purpose, respondent Commission on Elections-Special Bids and Awards Committee (Comelec-SBAC) conducted biddings and issued to the joint venture of respondents Smartmatic International Corporation and Total Information Management Corporation (Smartmatic-TIM) a notice of award on June 10, 2009.9 On July 10, 2009, respondent Comelec and Smartmatic-TIM executed a contract governing the procurement of counting machines, including the supply of ballot paper, electronic transmission services using public telecommunications networks, training, technical support, warehousing, deployment, installation, pull-out, systems integration and overall project management.10 On the same day, Smartmatic-TIM received a notice to proceed with the

implementation of the contract.11 Early on, however, petitioners as concerned citizens and taxpayers filed a petition in this Court for certiorari, prohibition and mandamus urging us to annul the June 10, 2009 notice of award and permanently enjoin respondents from signing and/or implementing any contract for the 2010 elections. They also sought to compel all respondents to disclose the full terms and conditions of the relevant agreements between and among themselves, including the agreements among respondent Smartmatic, Dominion Voting Systems (Dominion) and Jartltech International Corporation (Jarltech) and between respondent TIM and 2Go Corporation (2Go), respectively.12 However, with the execution of the July 10, 2009 contract between Comelec and Smartmatic-TIM, petitioners are now also seeking the annulment of the said contract.13 Petitioners argue that the impugned June 10, 2009 notice of award and July 10, 2009 contract violate the following: (a) Sections 5 and 12 of RA 8436, as amended by RAs 9329 and 9525 on pilot-testing and Section 7 of RA 8436, as amended by RA 9329, on the systems capability of the PCOS machines and14 (b) Section 8 of RA 704215 in relation to EO16 58417 and Article IX, Part B, Items 2.2.4, 2.2.6.1.2.2, 2.2.6.1.2.3, 2.2.6.1.2.5 and 2.2.6.2.1 of the Request for Proposal (RFP) on the eligibility of Smartmatic TIM as a bidder.18 They also claim that Articles 3.3, 6.7, 7.4, 21.1 and 21.4 of the impugned contract violate paragraphs 1 and 3, Section 2, Article IX-C of the Constitution and Section 26 of RA 9369 on the mandate of the Comelec.19 They further contend that Articles 3.1, 3.2 and 21.1 of the impugned contract incorporating the March 10, 2009 RFP and bid documents issued by the Comelec violate Section 2, Article V of the Constitution on the sanctity and secrecy of the ballot.20 Petitioners exhort the Court to recognize their locus standi in view of the transcendental importance of the matters raised in their petition.21 They also pray that their failure to exhaust the administrative

remedies provided under the implementing rules of RA 9184 (or the Government Procurement Reform Act) be excused.22 In view of the great significance of the matters involved in this case in our national life especially at this critical juncture of our history, I am inclined to gloss over the technical deficiencies and focus only on the substantive issues. Nonetheless, after careful study and reflection, I vote to dismiss the instant petition for the reasons I will explain. Are the June 10, 2009 Notice of Award and July 10, 2009 Contract Legal? The mandate of the Comelec under RA 8436, as amended, is twofold: first, to use an AES (automated election system) as provided under Section 1: Sec. 1. Declaration of Policy. It is the policy of the State to ensure free, orderly, honest, peaceful, credible and informed elections, plebiscites, referenda, recall and other similar electoral exercises by improving on the election process and adopting systems which shall involve the use of an automated election system that will ensure the secrecy and sanctity of the ballot and all election, consolidation and transmission documents in order that the process shall be transparent and credible and that the results shall be fast, accurate and reflective of the genuine will of the people. The State recognizes the mandate and authority of the Commission to prescribe the adoption and use of the most suitable technology of demonstrated capability taking into account the situation prevailing in the area and the funds available for the purpose.23 (emphasis supplied) Such authority to use "an automated election system or systems xxx as it may deem appropriate and practical for the process of voting, counting of votes and canvassing/consolidation and transmittal of results of electoral exercises" is reiterated in Section 5 of the law, as amended. Second, as provided under Section 12 of the same law, as amended, to procure supplies, equipment, materials, software, facilities, and other services for the purpose of implementing an AES.

There are provisions which outline how the Comelec is to carry out its mandate. Section 5 of RA 8436, as amended, provides: Sec. 5. Authority to Use an Automated Election System. To carry out the above-stated policy, the Commission on Elections, herein referred to as the Commission, is hereby authorized to use an automated election system or systems in the same election in different provinces, whether paper-based or a direct recording electronic election system as it may deem appropriate and practical for the process of voting, counting of votes and canvassing/consolidation and transmittal of results of electoral exercises: Provided, that for the regular national and local election, which shall be held immediately after effectivity of this Act, the AES shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao, to be chosen by the Commission: Provided, further, That local government units whose officials have been the subject of administrative charges within sixteen (16) month prior to the May 14, 2007 election shall not be chosen: Provided, finally, That no area shall be chosen without the consent of the Sanggunian of the local government unit concerned. The term local government unit as used in this provision shall refer to a highly urbanized city or province. In succeeding regular national or local elections, the AES shall be implemented nationwide.24 (emphasis supplied) Moreover, Section 12 of RA 8436, as amended, states: Sec.12. Procurement of Equipment and Materials. To achieve the purpose of this Act, the Commission in authorized to procure, in accordance with existing laws, by purchase, lease, rent or other forms of acquisition, supplies, equipment, materials, software, facilities, and other service, from local or foreign sources free from taxes and import duties, subject to accounting and auditing rules and regulation. With respect to the May 10, 2010 election and succeeding electoral exercises, the system procured must have demonstrated capability and been successfully used in a prior electoral exercise here or abroad. Participation in the 2007 pilot exercise shall not be conclusive of the system's fitness. x x x25 (emphasis supplied)

Citing the proceedings of the Senate on Senate Bill No. 2231 (from which RA 9329 originated),26 petitioners posit that Sections 5 and 12 of RA 8436, as amended, impose the restriction that no AES can be implemented in the 2010 elections unless the said AES shall have been pilot-tested in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao during the 2007 elections.27 Petitioners claim that the impugned notice of award and contract contravene Sections 5 and 12 of RA 8436, as amended, because they authorize the use of PCOS machines that have never undergone pilot-testing. The view of petitioners is, however, at odds with the plain language of the law and the proceedings of the Senate. The aforecited provisions do not limit or restrict the statutory mandate of the Comelec to implement a nationwide AES beginning the 2010 elections. The provisos of Section 5 merely prescribe the minimum scope of, as well as the conditions for, the implementation of an AES by the Comelec in the 2007 elections. On the other hand, Section 12 simply regulates the capability of the supplies, equipment, materials, software, facilities and other services which the Comelec can procure. Neither provision, however, removes or constrains the mandate of the Comelec to implement an AES nationwide beginning the 2010 elections. A review of the evolution of Section 5 of RA 8436, as amended, will shed light on the matter. Prior to its amendment by RA 9369, Section 5 was numbered Section 6 of RA 8436. It provided that "for the May 11, 1998 elections" the Comelec could use an AES which "shall be applicable in all areas within the country only for the positions of president, vice-president, senators and parties, organizations or coalitions participating under the party-list."28 If by February 9, 1998 it would have become evident that the AES could not be implemented for national positions in the 1998 elections, the provision stated that elections for both national and local positions would be done manually except in the Autonomous Region in Muslim Mindanao where the automated election system would be used for all positions. The then Section 6 of RA 8436, therefore, contained the specific limitation or restriction that,

while the Comelec may implement an AES nationwide in the 1998 elections, it could do so only for certain national positions. However, it did not provide that if no AES would have been implemented in the 1998 elections, the Comelec would forfeit its mandate to implement an AES nationwide in the succeeding elections. As amended and renumbered by RA 9369, (the former Section 6) Section 5 of RA 8436 contains a proviso which provides that "for the regular national and local election, which shall be held immediately after effectivity of this Act," the Comelec shall implement an AES "in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao." The preceding clause is significant in two aspects. First, it refers solely to the May 14, 2007 synchronized national and local elections because the 2007 elections were the only regular and local elections held immediately after the effectivity of RA 9369. It was held on February 10, 2007.29 Second, by ordinary definition, the phrase "at least" sets a minimum30 scope but does not bar attempts or efforts to exceed or surpass it. The clause in Section 5 deliberately employs the phrase "at least" rather than "not more than" or the word "only" (as in the original text of Section 5). As qualified, the clause means that, in the 2007 elections the Comelec had the discretion to implement an AES within the minimum scope of "two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao," or within the maximum scope of all areas in the country. It did not proscribe the nationwide implementation of an AES in the 2007 elections. Nor does it forbid one in the 2010 and succeeding elections. In sum, the aforementioned proviso of Section 5 of RA 8436, as amended, merely delineates the minimum scope of implementation of the AES for the 2007 elections. More significantly, in the event that no AES was implemented in the 2007 elections, Section 5 does not prohibit the Comelec from implementing an AES nationwide starting in the 2010 elections. Rather, the last clause of Section 5 is categorical that "in succeeding regular national or local elections, an AES shall be implemented

nationwide." And the 2010 elections were the elections that immediately followed the 2007 elections, the regular elections "held immediately after effectivity of [RA 9369]." In other words, the directive of the law itself is clear: the nationwide implementation of the AES commences in the 2010 elections. Laws are to be interpreted in a way that will render them effective, not in a manner that will make them inoperative. To insist, as petitioners do, that no nationwide AES can be implemented in the 2010 elections because no AES was implemented in the 2007 elections is to disregard the categorical language of the law. It frustrates and defeats the legislative intent to fully automate the 2010 elections. Indeed, if petitioners argument were to be pursued to its (not-so-) logical conclusion, RA 8436, as amended by RA 9369, would be a dead law. Under petitioners theory, no AES can be implemented in any future election unless Congress enacts another law. This is so because, according to petitioners themselves, the "condition precedent" for any nationwide implementation of the AES the implementation of the AES in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao in the 2007 elections was not complied with. Moreover, considering that RA 9369 took effect only on February 10, 2007, it was almost impossible to utilize an AES even in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao during the May 14, 2007 elections. Considering that, from the effectivity date of RA 9369, there was only a little over three months left before the 2007 elections, the additional burden (on the preparations for the 2007 elections) of the procurement process for and implementation of even a partial AES of the said elections would have been a superhuman task. More significantly, the 2007 appropriations for the Comelec did not include a budget for AES. The convergence of time and funding constraints made the implementation of any AES in the 2007 elections impossible for the Comelec to conduct. Nemo tenetur ad impossibile.31 The law obliges no one to perform an impossibility. Laws and rules must be interpreted in a way that they are in accordance with logic, common sense, reason and practicality.32 Furthermore, Section 12 of RA 8436, as amended, relevantly states

that "[p]articipation in the 2007 pilot exercise shall not be conclusive of the systems fitness." This has a two-fold implication on petitioners position. One, since participation in the intended automation of the 2007 elections was not a conclusive determinant of the systems fitness, partial automation of the 2007 elections pursuant to the proviso of Section 5 (assuming it was a condition for the full/nationwide automation of elections starting 2010) was merely preferable, not indispensable. Two, the fact that the PCOS machines were not pilot-tested in the 2007 elections has no significant bearing on the fitness and suitability of those machines for the elections to be held subsequent to the 2007 polls. The Senate proceedings invoked by petitioners do not at all indicate that partial implementation of the AES in the 2007 elections is a condition sine qua non to its full implementation in the 2010 elections. A close reading of the transcript of the proceedings reveals that, in urging his colleagues to approve the proviso in Section 5 (that AES be implemented in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao), Sen. Richard Gordon, the principal sponsor of Senate Bill No. 2231, was merely underscoring the need to demonstrate the possibility and viability of poll automation even in the 2007 elections.33 Nowhere in the transcript cited by petitioners did the Senate proscribe the nationwide implementation of the AES beginning the 2010 elections if no partial AES was implemented in the 2007 elections. In addition to the clarity of the language of RA 8436, as amended by RA 9369, as well as the legislative intent to have the nationwide implementation of the AES starting the 2010 elections, the intent of the lawmakers can furthermore be seen from the passage of RA 9525 on March 23, 2009. With this law, an P11,301,790,000 supplemental appropriations was specifically made for the automation of the 2010 elections. When Congress passed RA 9525, it was well aware that there was no pilot-testing of the PCOS in any previous Philippine electoral exercise. Nonetheless, Section 2 of the law states that the sum should be disbursed to ensure the "transparency and accuracy in the selection of the relevant technology of the machines to be used on May 10, 2010 automated national and local election[s]."

In fine, under Section 5 in relation to Section 1 of RA 8436, as amended, the mandate of the Comelec to prescribe the adoption and use of an AES is complete. It can determine which suitable technology of demonstrated capability to adopt for an AES. It can determine which, between a paper-based or a direct recording electronic election system, is more appropriate and practical. More notably, in the 2007 elections, it could decide whether to implement an AES within a maximum scope of all areas in the country or within the minimum scope of two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao. And in the 2010 and succeeding elections, its unqualified mandate is to implement an AES nationwide. Therefore, when it issued the notice of award to and executed the contract with Smartmatic-TIM for the nationwide implementation of an AES in the 2010 elections, the Comelec acted pursuant to its mandate and did not violate Section 5 of RA 8436 as amended by RA 9369. Neither did the Comelec violate Section 12 of RA 8436, as amended. The provision merely requires that, to implement a nationwide AES starting from the 2010 elections, the Comelec must procure a system that has a demonstrated capability and has been successfully used in a prior electoral exercise here or abroad, though application of the system in the 2007 elections would not have been conclusive evidence of its fitness. Clearly, it is not imperative that the system was successfully applied in the 2007 elections; it suffices that the system can be shown to have been viable in an election abroad. As the Comelec averred, the system it procured for the 2010 elections was successfully employed in prior electoral exercises in New Brunswick and New York in 2008 and in Ontario in 2009.34 Did the June 10, 2009 Notice of Award and the July 10, 2009 Contract Comply With Requirements on Bidding Eligibility? Petitioners impugn the notice of award and contract in favor of Smartmatic TIM on the ground that the latter violated the RFP when it failed to submit a valid joint venture agreement (JVA), a copy of its single largest contract for the last three years, an ISO 9001 certificate and an environmental protection agency certification.

Petitioners are wrong. Validity of the JVA Under RA 9184,35 to be eligible to bid for a project involving the procurement of goods, a joint venture must submit a valid JVA36 which must be duly notarized and under oath.37 It is further required by Section 8 of RA 7042 in relation to EO 584 that Filipino ownership or interest in the joint venture be at least 60%.38 The foregoing requirements were reiterated under Items 2.2.4 and 2.2.6.2.1 of the RFP. On April 23, 2009 Smartmatic and TIM constituted themselves into an unincorporated joint venture under a JVA. They submitted their JVA to the Comelec on May 4, 200939 and on July 8, 2009, they caused the incorporation of their joint venture with the Securities and Exchange Commission (SEC).40 Petitioners contend that Smartmatic-TIM failed to seasonably comply with the eligibility requirements of the law because they were still unincorporated at the time they filed their JVA in the Comelec. Their lack of community of interest surfaced in late June 2009 when the two entities publicly bickered over their rights and obligations. Moreover, petitioners claim that the JVA is defective because it left out key parties to the automation project, namely, Jarltech from which Smartmatic will procure the PCOS machines, Dominion which owns the copyright to the software for the PCOS machines and 2Go which will be responsible for transporting/distributing PCOS machines throughout the country. Petitioners insist that the inclusion of Jarltech, Dominion and 2Go in the joint venture is indispensable to hold them solidarily liable with Smartmatic-TIM for any problem that may arise from the use of their automation system.41 Petitioners exaggerate the eligibility requirements of the law. RA 9184 and its implementing rules only require that the JVA be valid and notarized. Incorporation of a JVA under the Corporation Code through registration with the SEC is not essential for the validity of a JVA. So long as it meets the essential requisites of a contract42 and is embodied in a public document, a JVA is valid regardless of its

incorporation through registration with the SEC. Where the law makes no distinction, no distinction need be made. Since the validity of the JVA is separate and distinct from its incorporation, I cannot subscribe to petitioners position that the incorporation of the Smartmatic and TIM JVA must also be required for purposes of the bidding. To hold that the JVA ought to be accompanied by articles of incorporation is to unduly add to the requirement of the law and its implementing regulations, in the guise of interpretation or construction. Even without an accompanying incorporation paper, a JVA is considered valid if notarized and under oath. As explained by the Government Procurement Policy Board (GPPB):43 For purposes of conducting eligibility on the prospective bidders for the procurement of goods and infrastructure projects, Section 23.6 (2) of the IRR-A of R.A. 9184 requires the prospective bidders to submit the following Class "B" Documents: (a) Valid joint venture agreement, in case of a joint venture; and (b) Letter authorizing the BAC or its duly authorized representative/s to verify any or all of the documents submitted for the eligibility check. As regards the requirement of a "valid joint venture agreement" for JV bidders, the IRR-A of R.A. 9184 does not prescribe a standard form nor does it spell out the specific terms and conditions that should be included in such agreement to be valid. However, for purposes of eligibility check, all JVAs are required to be notarized in order to be considered valid as prescribed in the aforequoted section. Further, it is advised that the JVAs should specifically state the name of the person who is appointed as the lawful attorney-in-fact of the JV to sign the contract, if awarded, and the member who is the lead representative of the concerned JV.44 (emphasis added) It would likewise be an unreasonable imposition not only on Smartmatic-TIM to absorb into their joint venture each and every entity they do business with, but also on the Comelec to transact directly with all these other entities. Aware of this, the Comelecs

Instruction to Bidders allowed the bidders to subcontract portions of the goods or services under the automation project.45 RA 9184 provides under Article XVI for direct contracting as one of the alternative methods of procurement. Direct contracting or single source procurement does not require elaborate bidding because all the supplier needs to do is submit a price quotation, which offer may then be accepted immediately, but only under the following conditions: (a) when the goods may be obtained only from the proprietary source because patents, trade secrets and copyrights prohibit others from manufacturing the same item; (b) when procurement of critical components from a specific manufacturer, supplier or distributor is a condition precedent to hold a contractor to guarantee its project performance and (c) those sold by an exclusive dealer or manufacturer, which does not have a sub-dealer selling. Clearly then, the intention of RA 9184 is not to compel government agencies to deal with every copyright-holder, exclusive manufacturer and exclusive distributor; otherwise, it will restrict the mode of procurement to direct contracting only. Thus, there is no compulsion under the law for the Comelec to contract with Dominion as the holder of the copyright to the PCOS machine or with Jarltech as the manufacturer thereof or 2Go as the transporter/distributor of the PCOS machines. What is crucial is that Smartmatic-TIM assumes solidary liability for the principal prestation of the July 10, 2009 contract and the RFP, and that it stipulates (under Article 3.3 of the contract) that "the performance of portions thereof by other persons or entities not parties to this Contract shall not relieve [it] of said obligations and concomitant liabilities." Compliance with the Nationality Requirement Regarding the ownership requirement under RA 7042 and the RFP, the JVA and articles of incorporation of Smartmatic-TIM categorically state that 60% of the shares of the joint venture shall be held by TIM itself or its subsidiary while 40% shall be held by Smartmatic itself or its subsidiary, but each shall be jointly and severally liable to the Comelec for the obligations of the other under the RFP.46 However, notwithstanding the clarity of the provisions of the JVA and the articles of incorporation, petitioners argue that the 60-40% control

of the joint venture by TIM and Smartmatic, respectively, is merely on paper and that, in reality, Smartmatic has control equal to or greater than TIM. According to petitioners, Smartmatics nominated director can determine the quorum in the board of directors and the executive committee, and approve or veto the acts of the board or executive committee. Smartmatic alone can nominate the chairman of the board, the treasurer and the corporate secretary.47 But then, it is not the management but the ownership of the joint venture Smartmatic-TIM which is required to be at least 60% Filipino. The board of directors of a corporation is a creation of the stockholders and, as such, the board controls and directs the affairs of the corporation by delegation of the stockholders.48 Hence, the authority to be exercised by the board of directors of the joint venture of Smartmatic-TIM is actually the authority of the stockholders of TIM and Smartmatic from which the joint venture derives its authority. As the source of the authority, the stockholders may by auto-limitation impose restraints or restrictions on their own powers such as that allegedly done by TIM in its joint venture with Smartmatic. Besides, issues on the distribution of management powers in the joint venture are a purely business prerogative in which the Court would rather not meddle.49 Submission of Required Documents With regard to petitioners claim that Smartmatic-TIM failed to comply with the requirement under the RFP for the joint venture to submit the following technical documents: (1) a statement of the value of its largest single contract for the last three years;50 (2) ISO 9000 certificate or its equivalent51 and (3) certification from the environment protection agency of the country of origin of the product,52 the Comelec-SBAC noted in its memorandum dated June 3, 2009 that, while Smartmatic-TIM failed to show a copy of its single largest contract (because of its non-disclosure agreement with the election body of Venezuela), Smartmatic-TIM submitted "a duly authenticated certification from the Consejo Nacional Electoral (CNE) of the Venezuelan government x x x indicating the amount of the contract as [$141,356,604.54], (equivalent to Php6,345,502,017.90) which was well above the eligibility requirement of at least 50% of the Approved Budget for the Contract (ABC) of Php5,611,809,200.50."

The certification further indicates "the name of the vendor Smartmatic Group, the name of procuring entity CNE, the period of the contract between 01 June 2008 to 28 February 2009 and the description of goods and services provided to provide voting machines and supplies for the elections in the Bolivarian Republic of Venezuela."53 Thus, the Comelec-SBAC recommended that this certification be admitted under Section 19, Rule 132 of the Rules of Court as it was issued by a government of another country and duly authenticated by the officials of the Philippine embassy.54 The Comelec-SBACs recommendation was approved by the Comelec en banc in Resolution No. 8608 dated June 9, 2009.55 There is no cogent reason to overturn the resolution of the Comelec en banc approving the recommendation of the Comelec-SBAC on this matter. It should be borne in mind that, as expressly stated in Section 23.11.1.1, Rule VIII of the implementing rules of RA 9184, the purpose of the requirement is to establish the track record of the prospective bidder of having completed within the last three years a single contract similar to the contract to be bidded out. This purpose was served when CNE certified that Smartmatic had implemented in Venezuela a $141 Million project similar to the one it was bidding for. With such authenticated information made available to it, the Comelec correctly dispensed with a copy of the contract itself. The Comelec also did not err in accepting the ISO 9000 and EPA certifications submitted by Smartmatic-TIM. Though not required under RA 9184, ISO 9000 and EPA certificates are required under the RFP. An ISO certificate is intended to assure the Comelec "that the manufacturing process of the solution provider complies with international standards."56 This purpose is nevertheless still achieved if the PCOS machines are produced by a facility that has an ISO 9000 certification.57 It is of record that the PCOS machines to be procured by the Comelec are manufactured for Smartmatic by its subsidiary Jarltech. Thus, the ISO certification of Jarltech provides sufficient assurance that the PCOS machines are manufactured according to international standards. The same principle applies to the EPA certificate. Its purpose is to establish that the product to be procured meets the environmental standards of the country of origin.58 The EPA certificate submitted by

Smartmatic-TIM serves that purpose even though it is in the name of Kenmec Mechanical Engineering Company (Kenmec). As found by the Comelec-SBAC, Kenmec has an outsourcing manufacturing contract with Jarltech under which Kenmec will provide a space within its facility where Smartmatic, through Jarltech, will assemble and manufacture the PCOS machines.59 It is logical for the EPA certificate to be issued to Kenmecs facility. In sum, Smartmatic-TIM substantially complied with the technical requirements for eligibility. Accordingly, no bidding requirement under the law and the RFP was violated by the notice of award and the contract issued to Smartmatic-TIM. Does the July 10, 2009 Contract Diminish the COMELECs Constitutional Mandate? The Constitution appointed the Comelec as the sole authority to enforce and administer all laws and regulations relative to the conduct of an election, plebiscite, initiative, referendum and recall,60 and to decide all questions affecting elections, except those involving the right to vote,.61 Petitioners deplore what they claim to be a denigration of the mandate of the Comelec through the following provisions in its contract with Smartmatic-TIM: 3.3 The PROVIDER62 shall be liable for all its obligations under this Project, and the performance of portions thereof by other persons or entities not parties to this Contract shall not relieve the PROVIDER of said obligations and concomitant liabilities. SMARTMATIC, as the joint venture partner with the greater track record in automated elections, shall be in charge of the technical aspects of the counting and canvassing software and hardware, including transmission configuration and system integration. SMARTMATIC shall also be primarily responsible for preventing and troubleshooting technical problems that may arise during the election. The PROVIDER must provide to SMARMATIC at all times the support required to perform the above responsibilities.

xxx

xxx

xxx

6.7 Subject to the provisions of the General Instructions to be issued by the Commission En Banc, the entire processes of voting, counting, transmission, consolidation and canvassing of votes shall be conducted by COMELEC's personnel and officials, and their performance, completion and final results according to specifications and within the specified periods shall be the shared responsibility of the COMELEC and the PROVIDER. xxx xxx xxx

7.4 Upon delivery of the Goods, in whole or in part, to the warehouses as approved by COMELEC, the equipment shall be under the custody, responsibility and control of the PROVIDER. xxx xxx xxx

According to petitioners, the mandate of the Comelec is seriously undermined by these provisions. Article 3.3 of the contract authorizes Smartmatic to supervise and control the technical aspect of the AES, whereas under Section 26 of RA 8436, it is the Comelec information technology department (Comelec-ITD) which should be given such control. On the other hand, Articles 6.7 and 7.4 of the contract assign to Smartmatic-TIM portions of the electoral responsibilities of the Comelec, whereas the Constitution mandates the authority of the Comelec to be exclusive. Moreover, by virtue of Articles 21.1 and 21.4 of the contract, bid document no. 10 is deemed part thereof. According to the bid document, it is Smartmatic-TIM which shall generate the digital signature and assign the same to all the members of the board of inspectors, the board of canvassers, the Comelec, the Senate President and the House Speaker. To petitioners mind, since Smartmatic-TIM has custody of the digital signature, it has virtual control of the election result as it is the digital signature which authenticates the election returns for the canvassing of votes.63 Petitioners fears are unfounded. We expect that, with the advent of electronic voting, procurement

contracts will be accompanied by concerns about their tendency to obscure traditional lines of responsibility. Nonetheless, well-designed and carefully-crafted contracts will represent neither an abdication of the Comelecs mandate nor a restraint on the Comelecs oversight powers, but rather a valid reconfiguration much needed in election administration. The Comelec took pains to draft a contract that preserves its constitutional and statutory responsibilities and at the same time meets the novel contingencies resulting from the automation of elections. For the 2010 automated elections, the Comelec exercises not only exclusive supervision and control of the electoral process,64 including the discretion over which suitable technology to adopt and use.65 Article 6.7 of the contract reiterates the authority of the Comelec over the purely electoral component of the process, thus: 6.7 Subject to the provisions of the General Instructions to be issued by the Commission En Banc, the entire processes of voting, counting, transmission, consolidation and canvassing of votes shall be conducted by Comelec's personnel and officials x x x. With respect to the technical component of the Comelecs authority in the automation of elections, several specialized units have been created under RA 8436 and RA 9369 to support the Commission: (1) an Information Technology Department tasked to carry out the full administration and implementation of the AES;66 (2) an Advisory Council on Information and Communication and Technology,67 headed by the Chairman of the Commission, tasked to recommend the technology to be applied in the AES and to advise and assist in the review of its systems planning, inception, development, testing, operationalization and evaluation stages and in the identification, assessment and resolution of systems problems or inadequacies,68 and (3) a Technical Evaluation Committee tasked to certify that, based on documented evaluation, the hardware and software components of the chosen AES are operating properly, securely, and accurately, in accordance with the provisions of RA 9369.69 Moreover, under the contract, the Comelec committed to create a

project management office (PMO) that will oversee the execution and implementation of the automation project.70 Thus, both under the law and the contract, it is clear that each of the foregoing units of the Comelec is assigned specific technical functions in support of the AES.
1avvphi1

On the other hand, Smartmatic is given a specific and limited technical task to assist the Comelec in implementing the AES. The highly specialized language of the contract circumscribes the role of Smartmatic. For instance, while, under Article 6.7, the counting and canvassing of votes are the responsibilities of the Comelec, under Article 3.3, the technical aspects of the "counting and canvassing software and hardware, including transmission configuration and system integration," and the "[prevention] and troubleshooting [of] technical problems that may arise during the election" are the responsibilities of Smartmatic. The delineation of roles is clear and the tasks assigned to Smartmatic are specific. By no stretch of interpretation can Article 3.3 be deemed to mean that Smartmatic shall count and canvass the votes. Still under Article 6.7, it is the Comelec through its personnel and officials that shall conduct the entire processes of voting, counting, transmission, consolidation and canvassing of votes. The Comelec, jointly with Smartmatic, will ensure that the performance, completion and final results of these processes meet the stipulated specifications and schedules. This a reasonable assignment of role to Smartmatic, considering that, under Articles 3.1.a, 3.1.b and 3.2 of the contract, Smartmatic-TIM undertakes to ensure the proper, satisfactory and timely execution and completion of the entire scope of the project.71 There is no reason to view it as a diminution of the exclusive mandate of the Comelec to control the conduct of the elections. It has likewise not been established that, under Article 7.4 of the contract, the Comelec abnegated its mandate. It must be borne in mind that the contract entered into by the Comelec is a mere lease with option to purchase. Hence, it will be grossly disadvantageous to the Comelec if, upon delivery of the goods by Smartmatic-TIM,

custody thereof will be immediately transferred to it, for then liability for damage to or loss of the goods while in storage will be borne by it. It is bad enough that Filipino taxpayers are footing the bill for the continued storage of machines in the scrapped Mega Pacific consortium automation deal. It will be worse if they should likewise be answerable for any PCOS machine that is damaged or lost during storage. Are the Sanctity of the Ballot and the Integrity of the Automated Electoral Process Compromised By the July 10, 2009 Contract? The more serious argument raised by petitioners has to do with the sanctity of the ballot and the integrity of the AES. Petitioners argue that the constitutional right of the people to the secrecy and sanctity of their ballot is compromised by the requirement under the contract and the RFP that the ballot be approximately three-feet long and pre-printed with the names of at least 600 candidates and that it be manually fed into the PCOS machine with the assistance of a Smartmatic-TIM employee, when needed.72 Under Section 2, Article V of the Constitution, it is Congress which is primarily tasked with the duty to provide a system of securing the secrecy and sanctity of the ballot. In fulfillment of its duty, Congress adopted the following provisions in RA 9369, to wit: Sec. 13. Section 11 of Republic Act No. 8436 is hereby amended to read as follows: "Sec.15. Official Ballot. The Commission shall prescribe the format of the electronic display and/or the size and form of the official ballot, which shall contain the titles of the position to be filled and/or the proposition to be voted upon in an initiative, referendum or plebiscite. Where practicable, electronic displays must be constructed to present the names of all candidates for the same position in the same page or screen, otherwise, the electronic displays must be constructed to present the entire ballot to the voter, in a series of sequential pages, and to ensure that the voter sees all of the ballot options on all pages before completing his or her vote and to allow the voter to review and

change all ballot choices prior to completing and casting his or her ballot. Under each position to be filled, the names of candidates shall be arranged alphabetically by surname and uniformly indicated using the same type size. The maiden or married name shall be listed in the official ballot, as preferred by the female candidate. Under each proposition to be vote upon, the choices should be uniformly indicated using the same font and size. xxx xxx xxx

Sec. 18. Procedure in voting. The Commission shall prescribe the manner and procedure of voting, which can be easily understood and followed by the voters, taking into consideration, among other things, the secrecy of the voting. While delegating to the Comelec the determination of the size and form of the ballot, Congress prescribed the following minimum requirements of its content: (1) that it shall contain the titles of the position to be filled and/or the proposition to be voted upon in an initiative, referendum or plebiscite; (2) that under each position to be filled, the names of candidates shall be arranged alphabetically by surname and uniformly indicated using the same type size and (3) that the voter must see all of the ballot options on all pages before completing his or her vote and to allow the voter to review and change all ballot choices prior to completing and casting his or her ballot. In effect, the basic contents of the ballot as required by Congress dictate the size and form of the ballot that the Comelec shall prescribe. For as long as the requirements are met, the system of secrecy and sanctity of the ballot adopted by Congress under RA 9369 is deemed observed by the Comelec. There is no showing that the size and form of the PCOS ballot as prescribed by the Comelec do not fulfill the minimum contents required by Congress. In fact, the three-foot, two-page ballot filled with 600 entries in font 10 was deliberately adopted by the Comelec to conform to the requirements of existing laws on the number of elective positions, and in anticipation of the possible number of candidates vying for these positions.

Moreover, there is no inherent flaw in the voting procedure adopted by the Comelec whereby each voter must manually feed the ballot into the PCOS machine. There are sufficient safeguards to the secrecy of the voting process in that the voter alone will hold the ballot and feed it to the PCOS machine. It is all up to the voter whether to discard caution and disclose the contents of the ballot. The law can only do so much in protecting its sanctity. Besides, assuming that the requirement under the contract between the Comelec and Smartmatic-TIM as to the size of the ballot poses concerns in connection with the secrecy of the ballot, the Comelec is not without power to issue the necessary rules and regulations that will effectively address them. Such rules and regulations may include the specific manner on how assistance on feeding the ballot to a PCOS machine may be rendered to a voter to avoid compromising the secrecy of the ballot. Finally, petitioners are alarmed that the digital signature, security keys, source code and removable memory card are at the disposal of Smarmatic-TIM. They argue that all this puts Smartmatic-TIM in control not only of the process but also the outcome of the election.73 There are highly technical, specialized interstitial matters that Congress does not decide itself but delegates to specialized agencies to decide.74 In RA 9369, Congress delegated to not just one but four specialized bodies the duty to ensure that the AES to be adopted for the 2010 elections will be the most appropriate and secure. These are the Comelec itself, the Comelec-ITD, the Advisory Council and the Technical Evaluation Committee. I am not prepared to say that we should doubt their ability and their dedication to ensure compliance with the minimum capabilities and features of the AES, as prescribed under Sections 6 and 7 of RA 9369. It is significant that among the functions of the Advisory Council is to "provide advice and/or assistance in the identification, assessment and resolution of systems problems or inadequacies as may surface or resurface in the course of the bidding, acquisition, testing, operationalization, re-use, storage or disposition of the AES equipment and/or resources as the case may be."75 Furthermore, the Technical Evaluation Committee is assigned these functions:

Sec. 9. New sections 8, 9, 10 and 11 are hereby provided to read as follows: "Sec. 11. Functions of the Technical Evaluation Committee. The Committee shall certify, through an established international certification entity to be chosen by the Commission from the recommendations of the Advisory Council, not later than three months before the date of the electoral exercises, categorically stating that the AES, including its hardware and software components, is operating properly, securely, and accurately, in accordance with the provisions of this Act based, among others, on the following documented results: 1. The successful conduct of a field testing process followed by a mock election event in one or more cities/municipalities; 2. The successful completion of audit on the accuracy, functionally and security controls of the AES software; 3. The successful completion of a source code review; 4. A certification that the source code is kept in escrow with the Bangko Sentral ng Pilipinas; 5. A certification that the source code reviewed is one and the same as that used by the equipment; and 6. The development, provisioning, and operationalization of a continuity plan to cover risks to the AES at all points in the process such that a failure of elections, whether at voting, counting or consolidation, may be avoided. (emphasis added) It has not been satisfactorily shown that the Advisory Council and the Technical Evaluation Committee have shirked their duties. They have not even been given the chance to perform them yet they are already being torpedoed. At this point, the Court should not even attempt to interfere in the work of these specialized bodies and arrogate their functions by deciding highly technical issues that are within their expertise and knowledge, and which the law itself has assigned to them for determination. The Court has to exercise judicial restraint and not pretend to be an expert in something it is not really familiar

with. Our function is merely to decide if automation and its implementing contract(s) are legal or not. It is not to find fault in it and certainly, not to determine to what extent the law should be or should not be implemented. After a half century of electoral debacle, there looms in the horizon the dawn of a truly honest, systematic and modern electoral system. But we have to cast our fears and insecurities aside, and take the first step unsure as it may be to witness its coming. Fifteen years ago, the government launched the first on-line lottery ("lotto") system in the country. Back then, brickbats flew thick and fast that it was nothing but a government racket on a grand scale, that it had a built-in capability to cheat people of their hard-earned money, that government was abdicating a big part of its finances to the Malaysians, that its computers were going to be used to cheat in the elections and a slew of pseudo-intellectual arguments ad nauseam. But what has lotto become today? It has become one of the most successful government projects ever, heralded as one of the better lottery systems in any developing country. Practically the entire nation has been "wired together" under one efficient computer system. It has brought in billions to the government coffers and has helped millions of poor beneficiaries of the Philippine Charity Sweepstakes Office. What could have come out of it if the correct first step had never been boldly taken? A Final Word We are the final generation of an old civilization and the first generation of a new one. Much of our personal confusion, anguish and disorientation can be traced directly to the conflict within us and within our political institutions, between the dying Second Wave civilization and the emergent Third Wave civilization that is thundering in to take its place. Tofflers words fittingly describe the state of our electoral system. Congress has vested the Comelec with the authority to modernize the Philippine electoral system through the adoption of an AES. In the exercise of the said authority and considering the nature of the office of the Comelec as an independent constitutional body specifically tasked to enforce and administer all laws relative to the conduct of

elections, the Comelec enjoys wide latitude in carrying out its mandate. No worst-case scenarios painted by doomsayers, no speculative political catastrophe should be the basis of invalidating the Comelecs official acts. Only when the exercise by the Comelec of its discretion is done with grave abuse will this Court nullify the challenged discretionary act. Otherwise, the institutional independence of the Comelec will be unduly restricted and eroded, and its constitutional and statutory prerogatives encroached upon. This Court should not allow that in any situation. This Court should not allow that in this case. Let us welcome the significant change in our electoral system that is the automated election system. The future is upon us. It beckons as it poses the challenge of spurring technological innovation and safeguarding values like accuracy and transparency in our electoral system. Let us not turn our backs on it simply out of speculation and fear. Let us give it a chance. I vote to DISMISS the petition. RENATO C. CORONA Associate Justice Footnotes
1

Alvin Toffler, The Third Wave.

See Chapter 18, Revised Administrative Code of the Philippine Islands of 1917. See also Act No. 1582, effective January 15, 1907.
3

Request for Proposals (RFP) issued by the Commission on Elections for the 2010 elections automation project.
4

Republic Act.

An act authorizing the Commission on Elections to conduct a nationwide demonstration of a computerized election system and pilot-test it in the March 1996 elections in the Autonomous Region in Muslim Mindanao (ARMM) and for other purposes.
6

An act authorizing the Commission on Elections to use and

automated election system in the May 11, 1998 national or local elections and in subsequent national and local electoral exercises, providing funds therefor and for other purposes.
7

An act amending Republic Act No. 8436.

An act appropriating the sum of eleven billion three hundred one million seven hundred ninety thousand pesos (P11,301,790,000.00) as supplemental appropriation for an automated election system and for other purposes.
9

Annex "A", Petition. Annex "13", Comment. www.comelec.gov.ph/modernization/2010 Petition, pp. 46-47. Manifestation and Memorandum for Petitioner, pp. 107-108.

10

11

12

13

14

Petition, pp. 28-31; Manifestation and Memorandum for Petitioners, pp. 53-80.
15

Foreign Investments Act of 1991. Executive Order.

16

17

Seventh Regular Foreign Investment Negative List dated December 8, 2006.

18

Petition, pp. 32-40; Manifestation and Memorandum for Petitioners, pp. 81-93.
19

Manifestation and Memorandum for Petitioners, pp. 17-29, 49-52. Id., pp. 37-48. Manifestation and Memorandum, Manifestation and Memorandum, pp. 94-100.

20

21

22

23

The original text read:

Section 1. Declaration of policy. - It is the policy of the State to ensure free, orderly, honest, peaceful and credible elections, and assure the secrecy and sanctity of the ballot in order that the results of elections, plebiscites, referenda, and other electoral exercises shall be fast, accurate and reflective of the genuine will of the people.
24

The original text read:

Section 6. Authority to use an automated election system. - To carry out the above-stated policy, the Commission on Elections, herein referred to as the Commission, is hereby authorized to use an automated election system, herein referred to as the System, for the process of voting, counting of votes and canvassing/consolidation of results of the national and local elections: Provided, however, That for the May 11, 1998 elections, the System shall be applicable in all areas within the country only for the positions of president, vice-president, senators and parties, organizations or coalitions participating under the party-list system. To achieve the purpose of this Act, the Commission is authorized to procure by purchase, lease or otherwise any supplies, equipment, materials and services needed for the holding of the elections by an expedited process of public bidding of vendors, suppliers or lessors: Provided, That the accredited political parties are duly notified of and allowed to observe but not to participate in the bidding. If, inspite of its diligent efforts to implement this mandate in the exercise of this authority, it becomes evident by February 9, 1998 that the Commission cannot fully implement the automated election system for national positions in the May 11, 1998 elections, the elections for both national and local positions shall be done manually except in the Autonomous Region in Muslim Mindanao (ARMM) where the automated election system shall be used for all positions. (emphasis supplied)
25

The original text read:

Section 8. Procurement of equipment and materials. - The Commission shall procure the automated counting machines, computer equipment, devices and materials needed for ballot printing

and devices for voting, counting and canvassing from local or foreign sources free from taxes and import duties, subject to accounting and auditing rules and regulations.
26

Manifestation and Memorandum, pp. 57-61, citing Records of the Senate, Volumes II and III.
27

Petition, p. 28. Supra at 21.

28

29

Section 47, RA 9369 provides that the law shall take effect 15 days after its publication in a newspaper of general circulation. It was first published in the January 26, 2007 issue of Malaya.
30

www.merriam-webster.com/dictionary. Stemmerik v. Mas, A.C. No. 8010, 16 June 2009. Id. Manifestation and Memorandum, p. 57.

31

32

33

The following relevant statements of Senator Gordon during the Senate deliberations on October 11, 2006 regarding Senate Bill No. 2231 is enlightening: Sen. Gordon: x x x Our position, Mr. President, is that this bill is essentially an amendment of an original bill that says automation of election, which means that it has already started. x x x So, we are saying, Mr. President, that based on that, with all these things that are covered already, -- in fact, there is practically a delegation of authority given to the Comelec which, by the way, is constitutionally the implementor of elections to the advisory council and to the oversight committee which is composed of seven senators and seven congressmen. x x x x x x The proponents (Sen. Roxas) amendment will take acts of

Congress to continue AES. In other words, Congress has to act to continue the automated election system. In our proposal, it will take an act of Congress to stop AES. In other words, the general rule is, AES is now on a heuristic path, umaandar na iyan. The reports have already been given, the budget will still have to be approved for that, which means congressional action will be taken every step of the way. xxx Kaya nga ang sinasabi ko, magiging ludicrous tayo na in 1997, ang sabi natin automation. Hindi po ito test. Ito po ay desisyon natin na pairalin na iyong automation sa six provinces and six cities because gahol na ho tayo sa oras. We have ran out of time. x x x x x x I find that hindi tayo lumalakad kung babalik ulit tayo sa 2010 sa six provinces and six cities, para ano pa at naglalagay tayo ng automated election title dito? All I am saying is that, once we go on automation, we should move on. x x x (Senate Deliberations, 11 October 2006, p. 191-200.) (emphasis supplied)
34

Memorandum for public respondent, p. 60, citing Annexes "12", "13" and "14".
35

Government Procurement Reform Act; effective January 26, 2003.

36

Sec. 23.6.2(a), Rule VIII, Implementing Rules and Regulations of RA 9184.

37

Id. at Sec. 2.2.7.

38

See also Sec. 23.11.1, Implementing Rules and Regulations of RA 9184.

39

Annex 5, p. 9, Comment of public respondent. Annex 12, Comment of public respondent. Memorandum, pp. 90-92.

40

41

42

These essential elements are consent, object certain and cause. Sec. 63, RA 9184.

43

44

GPBB opinion NPM No. NPM 098-2004 dated July 23, 2004. www.gppb.gov.ph/opinions/view_opinion.asp. See also the GPPB Manual of Procedures for the Procurement of Goods and Services.
45

Sec. 71 of the Instruction to Bidders provides that "The bidder shall specify in its Bid all portions of the Goods and Services that will be subcontracted, if any, including the entities to whom each portion will be subcontracted xxx. Subcontracting of any portion shall not relieve the Bidder from any liability or obligation that may arise from its performance."
46

Supra at 32. Memorandum, pp. 32-35. Angeles v. Santos, 64 Phil. 697 (1937).

47

48

49

Ong Yong, et al. v. David Tui, et al., G.R. No. 144476, April 8, 2003.
50

Item 2.2.6.2.2.2. Item 2.2.6.1.2.3. Item 2.2.6.1.2.5. Annex 9, Comment of public respondent. Id., p. 2. Annex 10, Comment of public respondent.

51

52

53

54

55

56

Omnibus SBAC Resolution No. 09-001, Annex 6, Comment of public respondent.

57

Id.. Item 2.2.6.1.2.5, RFP.

58

59

Supra at 48. Article IX-C, Sec. 2, par. 1. Article IX-C, Sec. 2, par. 3.

60

61

62

Under the contract, the term PROVIDER refers to Smartmatic TIM Corporation.
63

Memorandum, pp. 17-29, 49-52. Section 26 of RA 8436 reads:

64

Sec. 26. Supervision and control - The System shall be under the exclusive supervision and control of the Commission. For this purpose, there is hereby created an information technology department in the Commission to carry out the full administration and implementation of the System. The Commission shall take immediate steps as may be necessary for the acquisition, installation, administration, storage, and maintenance of equipment and devices, and to promulgate the necessary rules and regulations for the effective implementation of this Act.
65

Section 1, RA 9369. Sec. 26, RA 8436.

66

67

Under RA 9369, the Advisory Council shall be composed of the following: Sec. 8. xx xx xx The Council shall be composed of the following members, who must be registered Filipino voters, of known independence, competence and probity; "(a) The Chairman of the Commission on information and Communications Technology (CICT) who shall act as the chairman of the council; "(b) One member from the Department of Science and Technology; "(c) One member from the Department of Education;

"(d) One member representing the academe, to be selected by the chair of the Advisory Council from among the list of nominees submitted by the country's academic institutions; "(e) Three members representing ICT professional organizations to be selected by the chair of the Advisory Council from among the list of nominees submitted by Philippines-based ICT professional organization. Nominees shall be individuals, at least one of whom shall be experience in managing or implementing large-scale IT projects. "(f) Two members representing nongovernmental electoral reform organizations, to be selected by the chair of the Advisory Council from among the list of nominees submitted by the country's nongovernmental electoral reform organizations.
68

Sec. 9. Sec. 11. Sec. 6.3.6. Articles 3.1.a, 3.1.b and 3.2 of the contract. Memorandum, pp. Memorandum, pp. 17-29, 49-52.

69

70

71

72

73

74

See Zuni Public School District No. 89, et al. v. Department of Education, et al., 550 U.S. __ (2007).
75

Sec. 9, RA 9369.

The Lawphil Project - Arellano Law Foundation

DISSENTING OPINION BRION, J.:

I write this Dissent mindful that a new system of exercising the constitutional right of suffrage is upon us. Automated election, first tested in the ARMM election on August 11, 2008, shall sooner or later be applied at the national level. The development, to be sure, is a change that we should welcome for the promises it brings a peaceful, clean, orderly, fair, honest, efficient, and credible election. The fulfillment of this promise, however, is not a result that we can simply wish into our national life. Nor is it something we can attain in a hurry. Fulfillment is a result that the whole country must plan, work, and sacrifice for. Interface of Powers: COMELEC and the Supreme Court At the forefront in the national effort to achieve a computerized election system is, of course, the Commission on Elections (COMELEC) the independent constitutional body tasked with the enforcement and administration of all election laws and regulations. The Supreme Court, as the court of last resort tasked to guard the Constitution and our laws through interpretation and adjudication of judiciable controversies, is an indispensable partner and participant in this endeavor, as the Constitution itself safeguards and regulates our electoral processes and policies, which are expressed through laws and COMELEC regulations. In fact, about five years ago, this Court decisively spoke on the matter of automation when we invalidated the "Mega Pacific Contract" between the COMELEC and Mega Pacific Consortium for the automation of the May 10, 2004 elections.1 Once again, we are called upon today with the daunting task of passing upon the validity of another election automation contract, this time between the COMELEC and Smartmatic International Corporation Total Information Management Corporation (SMARTMATIC-TIM) for the coming May 10, 2010 elections.2 In undertaking this task, I duly acknowledge that the COMELEC exercises considerable latitude and the widest discretion in adopting its chosen means and methods of discharging its tasks, particularly in its broad power "to enforce and administer all laws and regulations relative to the conduct of an election, plebiscite, initiative, referendum and recall."3 The Court has interpreted this provision to mean the grant to "COMELEC [of] all the necessary and incidental powers for it to achieve the objective of holding free, orderly, honest, peaceful and

credible elections"4 an expansive view of COMELEC powers that is not at all novel. For, as early as 1941 under the 1935 Constitution, the Court already emphasized in Sumulong v. COMELEC5 that: The Commission on Elections is a constitutional body. It is intended to play a distinct and important part in our scheme of government. In the discharge of its functions, it should not be hampered with restrictions that would be fully warranted in the case of a less responsible organization. The Commission may err, so may this court also. It should be allowed considerable latitude in devising means and methods that will insure the accomplishment of the great objective for which it was created-free, orderly and honest elections. We may not agree fully with its choice of means, but unless these are clearly illegal or constitute gross abuse of discretion, this court should not interfere. Politics is a practical matter, and political questions must be dealt with realistically not from the standpoint of pure theory. The Commission on Elections, because of its fact-finding facilities, its contacts with political strategists, and its knowledge derived from actual experience in dealing with political controversies, is in a peculiarly advantageous position to decide complex political questions. [Emphasis supplied] The automation question now before us, like any other COMELEC administration and enforcement matter, is a concern that COMELEC is entitled by law to handle on its own without any interference from any outside agency, not even from this Court, except pursuant to the allocation of powers that the Constitution has mandated. In other words, the COMELEC reigns supreme in determining how automation shall be phased in, how it shall affect all aspects of our electoral exercise, and how it shall operate, subject only to our intervention when our own constitutional duty calls for enforcement. Specifically, we cannot close our eyes when a grave abuse of discretion amounting to lack or excess of jurisdiction has been committed, such as when the COMELEC acts outside the contemplation of the Constitution and of the law.6 Consistent with this view, I do not aim to question the bidding the COMELEC undertook and its compliance with our automation laws Republic Act (RA) Nos. 84367 and 93698 in the absence of any

violation sufficiently gross to amount to the proscribed grave abuse of discretion amounting to lack or excess of jurisdiction. My focus, rather, is on the gut issues that really strike at the heart of the right of suffrage and place the integrity of our electoral process at risk. The Pilot Testing Issue For one, I do not question the COMELECs present automation moves for lack of prior pilot testing a point that has generated a lot of comment from both the ponencia and the separate opinions. I believe that raising a question on this point is misplaced because the disputed provision Section 5 of RA No. 8436 as amended9 does not categorically and expressly demand a pilot test and, in fact, does not even mention the term "pilot test." As worded, this provision should be read in the context of its title "Authority to Use an Automated Election System." Thus, the provision is essentially a grant of authority to automate, with the automation being a limited one in the election immediately following the laws passage and only going nationwide in the "succeeding regular national or local elections." A pilot test is not an absolute necessity because it was never imposed as a condition sine qua non to a nationwide automation; Section 5 merely expressed a limit on the extent of automation that could take place in the election following the passage of RA No. 9369; the automated election must be partial and local. The COMELEC first exercised its authority to partially automate in the ARMM election held on August 11, 2008, so that this automated electoral exercise was effectively the "pilot exercise" the country embarked on in electoral automation. It can very well be, as the COMELC posits, the pilot test that Section 5, RA No. 8436, as amended, mentioned. Strictly speaking, the use of automation for the first time in the ARMM election was not a violation of the limitation that Section 5 imposed, because the automation was properly local and partial. If there had been a violation at all, the violation was in the failure to use automation in the next following election after the passage of RA No. 9369 (in the 2007 national and local elections) and in the failure to strictly follow the terms of Section 5 in the first automated election, because the automated election took place only in portions of Mindanao. These violations, however, pertained to that first use of

automation in the ARMM election, or, if at all, to the failure to use automation in the 2007 elections. They need not affect the automation for the May 10, 2010 election, whose budget for a nationally-implemented automated election Congress specifically provided for despite knowledge that no automation took place in the 2007 election as originally envisioned.10 From this perspective, pilot testing is an issue that does not need to trigger the Courts certiorari powers invoked in the present petition.11 The Abdication Issue Despite the above conclusion, I still take exception to the present implementation of election automation, as it involves another more fundamental violation: the COMELEC, contrary to the Constitution and the law, now shares automation responsibilities with SMARTMATIC-TIM under their Automation Contract. In my view, this is a violation that transgresses the Constitution, at the same time that it is an action plainly outside the contemplation of the law. Based on this characterization, this sharing of responsibility over automation is a grave abuse of discretion on the part of the COMELEC that calls for the active intervention of this Court, pursuant to the second paragraph of Section 1, Article VIII of the Constitution.12 I take this view in light of Section 2, Article IX-C of the Constitution that commands the "COMELEC to enforce and administer all laws and regulations relative to the conduct of an election" and thereby gives the COMELEC sole authority to undertake enforcement and administrative actions in the conduct of elections. In the context of the present case, this constitutional mandate necessarily extends to the enforcement of Section 26 of RA No. 843613 which states in full: Section 26. Supervision and control. The System shall be under the exclusive supervision and control of the Commission. For this purpose, there is hereby created an information technology department in the Commission to carry out the full administration and implementation of the System. The Commission shall take immediate steps as may be necessary for the acquisition, installation, administration, storage and maintenance of equipment and devices, and to promulgate the necessary rules

and regulations for the effective implementation of this Act. [Emphasis supplied] Rather than the exclusive supervision and control that this provision envisions, the COMELEC effectively shares responsibilities with SMARTMATIC-TIM in the automated May 10, 2010 elections by giving complete control of the technical aspects of this election to a private entity SMARTMATIC-TIM. In the words of the petition, this was an "abdication" of the COMELECs constitutional mandate, evidenced by the terms of Articles 3.3, 6.7 and 7.4 of the Automation Contract and by the grant to SMARTMATIC-TIM of the public and private keys to the voting equipment. The Ponencia and the Issue of Abdication In addressing the issue, the ponencia strangely uses the same Articles cited above in arguing that COMELEC did not relinquish its control over the technical aspect of the Automated Election System (AES). It asserts that Article 3.3 of the Automation Contract14 (which designates SMARTMATIC-TIM as the joint venture partner in charge of the technical aspect of the counting and canvassing software and hardware including transmission configuration and system integration) does not translate to ceding control of the electoral process to SMARTMATIC-TIM. To the ponencia, SMARTMATICTIMs designated role is simply an eligibility requirement imposed on bidders operating under a joint venture.15 The ponencia also supports this view by referring to the Request for Proposals (RFP) whose notice is for bids from a "complete solutions provider which can provide experienced and effective overall nationwide project management service and total customer support under COMELEC supervision and control to ensure the effective and successful implementation of the Project."16 The ponencia further points to Article 6.7 of the Automation Contract which provides: 6.7 Subject to the provisions of the General Instructions to be issued by the Commission En Banc, the entire processes of voting, counting, transmission, consolidation and canvassing of votes shall be conducted by COMELECs personnel and officials, and their

performance, completion and final results according to specifications and within the specified periods shall be the shared responsibility of COMELEC and PROVIDER. [Emphasis supplied] To the ponencia, this provision apparently speaks for itself as it requires action by COMELECs own personnel. The ponencia also found the petitioners allegation that SMARTMATIC-TIM has control over the public and private keys necessary to operate the Precinct Count Optical Scan (PCOS) machines to be speculative and without factual basis. Instead, it agreed with the opinion of the National Computer Center that the "nowhere in the RFP/TOR was it indicated that the COMELEC would delegate to [SMARTMATIC-TIM] full discretion, supervision and control over the [public and private keys]." Refutation of the Ponencias Positions a. Effect of Automation In my view, the ponencia has taken the above positions because it viewed the cited Articles in isolation and really did not take into account the whole election process and the effect of automation on this process. Be it remembered that an election entails an extended process that starts even before actual voting begins when voters register. Voting itself is only a part of the process, as this is followed by the counting of the votes by the Board of Election Inspectors (BEI), the canvassing of the tallied votes by the Board of Canvassers (BOC), the transmission and consolidation of the canvassed results to the municipal, provincial and a national BOC, and finally the announcement and proclamation of the winners. True enough, the people undertaking all these activities, particularly in the traditional voting process, have been COMELEC officials, employees, and duly deputized government personnel. This consideration, however, is not enough in passing upon the COMELEC-SMARTMATIC-TIM arrangement under the Automation Contract. b. The Ponencias Omissions What the ponencia did not sufficiently explain is the COMELECs intent to introduce a new way of voting17 that affects. not only on the

act of casting votes, but also the whole manner by which the counting and canvassing of votes, the transmission and collation of results, and the proclamation of winners are to be undertaken. All these are reflected in detail in the RFP, heretofore mentioned, whose call was for a "complete systems provider, and not just a vendor, which can provide experienced and effective overall nationwide project management service and total customer support (covering all areas of project implementation including technical support, training, information, campaign support, civil and electrical works service, warehousing, deployment, installation and pullout, contingency planning, etc.) under COMELEC supervision and control"18 All these automation activities are intrusions into the traditional COMELEC domain and cannot be simply glossed over. The ponencia likewise failed to mention that Section 26 of RA No. 8436 categorically required that the AES to be installed shall be under COMELECs exclusive supervision and control; for this purpose, the law created an Information Technology Department (ITD) within the COMELEC to carry out the full administration and implementation of the system. Underlying the COMELECs mandate of exclusive supervision and control over the AES in Section 26 is the adoption of measures for the "acquisition, installation, administration, storage and maintenance of equipment and devices and the promulgation of the necessary rules and regulations for the effective implementation of RA No. 8436." c. Section 26 of RA No. 8436 Under Section 26, the mandate of the law is clear the operative word used is "exclusive," which means that the automation responsibility given to the COMELEC cannot be shared with any other entity. Specifically, it means that the COMELEC, through its ITD, shall have full and exclusive control over the entire process of voting, counting, transmission, consolidation and canvassing of votes, including their performance and completion and the final results. No special interpretative skill is necessary to appreciate the meaning of "exclusive." "Supervision and control," on the other hand, are terms that have practically attained technical legal meaning from jurisprudence.19 "Control" as the established cases signify means to exercise restraining or directing influence over; to dominate, regulate;

hence, to hold from action; to curb; to subject; also to overpower.20 In any interpretation of Section 26, these are key terms and the standards that should predominate in determining whether this Section has been complied with. The ponencia, unfortunately does not appear to have considered this Section at all. d. The Information Technology Department Given the bidding terms and the qualification imposed on the "complete systems provider," what the ITD remained to do after the systems provider is in place becomes a puzzle whose elusive answer is nowhere to be found in the laws and the regulations in place. Presumably, the ITD can still couch its functions in terms of the "supervision and control" that Section 26 commands and which the COMELEC specified in the RFP. This intent, however, cannot be simply manifested in the law and parroted in the RFP as proof that there had been compliance; such compliance must be shown and must stand the test of overt acts, particularly contemporaneous acts the COMELEC and its systems provider undertake in furtherance of the intended automation. The best evidence of this intent, of course, is the contract that defines the parties respective roles in the automation. The contractual terms are likewise the best evidence of whether the responsibility for automation is exclusive, as the cited Section 26 requires. e. The Automation Contract Examined The Automation Contract between the COMELEC and SMARTMATIC-TIM, executed on July 10, 2009, fully defines the automation "project" to be undertaken. It delineates as well the roles the parties shall respectively undertake in pursuing the project, and the expectations that each party has from the other. The "project" is defined as "the COMELECs nationwide automation of the voting, counting, transmission, consolidation and canvassing of votes for the May 10, 2010 Synchronized National and Local Elections, consisting of the three (3) components mentioned in the Bidding Documents (the RFP)".21 The three components are:22 Component I: Paper-based Automated Election System (AES)

1-A. Election Management System (EMS) 1-B. Precint-Count Optical Scan (PCOS System) 1-C Consolidation / Canvassing System (CCS) Component 2: Provision for Electronic Transmission of Election Results, using Public Telecommunications Network. Component 3: Overall Project Management. SMARTMATIC-TIM, as the service provider, has the obligation to provide the goods the project shall require, generally described in the contract as all the materials necessary to carry out the project," except the ballot boxes.23 It shall likewise provide the services defined as "all the acts to be performed or provided by the PROVIDER [SMARTMATIC-TIM] to COMELEC for the operation and completion of the Project." 24 Under Article 3.2, "[t]he provider shall provide the Goods and perform the Services under this Contract and the Contract Documents. It shall provide competent project management, technical manpower and efficient services. It shall ensure the proper, satisfactory and timely execution and completion of the Project." This is complemented by Article 3.3 whose second paragraph in turn states that "[SMARTMATIC-TIM], as the joint venture partner with the greater track record in automated elections, shall be in charge of the technical aspects of the counting and canvassing software and hardware, including transmission, configuration and system integration. [SMARTMATIC-TIM] shall also be primarily responsible for preventing and troubleshooting technical problems that may arise during the election." The COMELEC, for its part, bound itself to pay under the terms of the contract, and shall be responsible, among others, for: 6.3.2. Closely coordinating with the PROVIDER in the preparation of the Sites and set-up the hardware, network installation, software installation, user testing and training. For the duration of the Project, COMELEC shall provide continuing assistance to the PROVIDER on the needs of the Project.

6.3.6. Creating its own Project Team called the Project Management Office (PMO) for the purpose, among others, of overseeing the Projects execution and implementation. It shall allow the PROVIDER access to concerned or responsible COMELEC officials.25 As heretofore mentioned, Article 6.7 of the Automation Contract provides for the conduct by the COMELEC personnel and officials of the entire electoral process, but their performance, completion and final results, according to specifications and within the specified periods, shall be the shared responsibility of COMELEC and the PROVIDER.26 Article 7.4 provides that "[u]pon delivery of the Goods, in whole or in part, to the warehouses as approved by COMELEC, the Equipment shall be under the custody, responsibility and control of the PROVIDER."27 Interestingly, the contract does not even mention the COMELECs ITD and how it will interact with SMARTMATIC-TIM in the implementation of the project. The Project Management Office (PMO) is specifically mentioned, but only for the purpose of overseeing the projects execution and implementation; it is not considered as an office with authority to speak on technical matters. On technical matters, SMARTMATIC-TIM reigns supreme and the ITD is not even mentioned. Under this situation, the PMO cannot but merely be a monitoring or liaison office, rather than an office supervising or controlling the project for COMELEC. It cannot supervise and control if SMARTMATIC-TIM has the last say on technical matters. In fact, the COMELEC itself, under Article 6.3.2, only plays an assisting role to SMARTMATIC-TIM, thus raising the direct implication that the latter has the lead role in all technical activities this Article mentions. Thus viewed, can the PMO raise any higher than the COMELEC? f. The Shared Responsibility Based on all these considerations drawn from the RFP and the Automation Contract, I cannot escape the conclusion that what exists is not the exclusive supervision and control of the automation process by the COMLEC, but a shared responsibility between the contracting parties to achieve this end. To point out the obvious, SMARTMATICTIM takes care of project management, with the PMO relegated to the blurry role of "overseeing the Projects execution and

implementation" and with no other clearly defined role in the automation project. ITD does not even exist insofar as the project documents are concerned. Thus, while the COMELEC retains its traditional role with respect to the running of the election itself, a new election process is in place that is substantially affected by automation. Stated otherwise, while the COMELEC truly controls the BEI, the BOC, and the administrative and adjudicative staff attending to the election process, the voters themselves, and even the BEI and the BOC, must yield to the process that automation calls for, which process is essentially technical and is in the hands of SMARTMATICTIM, the provider who wholly supplies the hardware and the software that controls the voting, counting, canvassing, consolidation and transmission of results, and who expressly has control and custody over the election equipment to be used in the voting, with no reserve power whatsoever on the part of the COMELEC in this regard.28 Not to be forgotten is that SMARTMATIC-TIM also provides the necessary services that run across voting, counting, canvassing, consolidation and transmission activities. These arrangements, viewed from all sides, does not indicate an exclusive supervision and control situation over the automation process. To be exact, they involve shared responsibilities that, however practical they may be from the business and technical perspectives, are arrangements that Philippine law does not allow. Access Keys and Digital Signatures Separately from all these considerations is the matter of the access keys and digital signatures that are objectionable, not merely because of the intrusion in the technical end of automation, but because they effectively hand over control of the election process to SMARTMATIC-TIM. Contrary to the ponencias findings, a close perusal of the automation contracts supporting documents indicate that the COMELEC has in fact effectively handed over to SMARTMATIC control over the AES, particularly with respect to the following quoted technical aspects: a. Generate and distribute the access keys for the canvassing equipment and 82,200 optical scanners to be used on election day;29

b. Deliver the 82,200 optical scanners to their designated precincts and secure them on site;30 c. Prepare the polling places and canvassing centers in all levels to make them fully functional;31 and d. Maintain 100% electronic transmission capability on election day (SMARTMATIC-TIM to fill the 25% gap of the countrys current 75% network coverage) [Emphasis supplied] The access keys are significant because control and possession of these keys translate to the capacity to change election results in any precinct in the country. This conclusion can be drawn from the following exchanges during the oral arguments: ASSOCIATE JUSTICE CARPIO: Now what is the first function of the Commission on Elections under the Constitution? ATTY. ROQUE: Well, to supervise the conduct of elections, Your Honor. xxx xxx xxx

ASSOCIATE JUSTICE CARPIO: In short, the Constitution mandates that the COMELEC must have control over the election process? ATTY. ROQUE: Yes, Your Honor. ASSOCIATE JUSTICE CARPIO: Okay. Who has possession of the public and private keys of this automation program. ATTY. ROQUE: Smartmatic, Your Honor. xxx xxx xxx

ASSOCIATE JUSTICE CARPIO: Would you know how these public and private keys are generated? xxx xxx xxx

ATTY. ROQUE: Yes, Your Honor. It is also Smartmatic that would generate that.

xxx

xxx

xxx

ASSOCIATE JUSTICE CARPIO: Okay. The private keys refer to the keys given to BEI members, correct? ATTY. ROQUE: Yes, Your Honor. ASSOCIATE JUSTICE CARPIO: Is this generated by the BEI member or given to them? ATTY. ROQUE: Given to them, Your Honor. xxx xxx xxx

ASSOCIATE JUSTICE CARPIO: Okay. But in this case, the BEI members will not generate their own password, they will be given the password, the key, the private key by the Smartmatic people? ATTY. ROQUE: Yes, Your Honor, because as explained by Professor Manalastas, they will have to be digital signatures to be provided by Smartmatic. ASSOCIATE JUSTICE CARPIO: And the public keys--- why are the public keys important? ATTY. ROQUE: Well, Your Honor, because unless you have It has to be congruence between the private and public key before you can have access to the system, Your Honor. It works as if it is a functional equivalent of two keys, Your Honor. That must be used together, otherwise, it cannot enter. ASSOCIATE JUSTICE CARPIO: And the public keys will not be known to the BEI but will only be known to the (interrupted) ATTY. ROQUE: Smartmatic, Your Honor. xxx xxx xxx

ASSOCIATE JUSTICE CARPIO: Okay. So the public and private keys will be generated by the Smartmatic and they will be in control of this, they can change it anytime, and that gives them the power to

change the results of any precinct, correct? ATTY. ROQUE: Yes, Your Honor. ASSOCIATE JUSTICE CARPIO: So they control the election process? ATTY. ROQUE: Yes, Your Honor. [Emphasis supplied]32 Bid Bulletin No. 10 issued by COMELEC-SBAC on April 15, 2009 confirms the correctness of what the above exchange discussed. This Bulletin states, among others, that the "digital signature shall be assigned by the winning bidder [SMARTMATIC-TIM in the present case] to all members of the BEI and BOC. It further states that "for [National Board of Canvassers or NBOC], the digital signatures shall be assigned to all members of the Commission and to the Senate President and the House Speaker." These terms are all consistent with Article 3.3 of the Automation Contract, heretofore mentioned, which allows SMARTMATIC-TIM to be "in charge of the technical aspects of the counting and canvassing software and hardware, including transmission configuration and system integration." On this point, the following oral argument exchanges are illuminating, viz: ASSOCIATE JUSTICE CARPIO: Are you familiar with Bid Bulletin No. 10 issued on April 15, 2009 of the COMELECs BAC Committee? ATTY. ROQUE: Well, off-hand, Your Honor, I cannot recall Bid Bulletin No. 10, and I do not have a copy of Bulletin No. 10. ASSOCIATE JUSTICE CARPIO: Okay. I will read to you Bid Bulletin No. 10 issued by the COMELEC dated April 15. This is from the website of the PCIJ. ATTY. ROQUE: Yes, Your Honor. ASSOCIATE JUSTICE CARPIO: The digital I am quoting now: "The digital signature should be assigned by the winning bidder to all members of the BEI and BOC. The digital signature shall be issued by a Certificate Authority nominated by the winning bidder and approved by the COMELEC." In other words, SMARTMATIC, the winning bidder, will nominate DERISIGN to be the Certification

Authority, just ask COMELEC for approval and COMELEC will say "approved." From then on, it is SMARTMATIC that will deal with DERISGIN on the generation of the public and private keys. ATTY. ROQUE: That is correct, Your Honor. ASSOCIATE JUSTICE CARPIO: So, control of the public and private keys are in the hands of SMARTMATIC. Now, what should the COMELEC do to regain control of the election process? ATTY. ROQUE: Well, we do not know, Your Honor, because as far as DERISIGN is concerned, they will not deal with the COMELEC, Your Honor. ASSOCIATE JUSTICE CARPIO: Yes, but COMELEC should recall this and say we will deal with DERISIGN on generation of the public and private keys and we will hold exclusive possession and control; we will not share these public and private keys with SMARTMATICTIM or with anybody because whoever is in possession of these keys can change the results of the election, correct? ATTY. ROQUE: That is possible, Your Honor. Yes. In fact, that is what COMELEC should do. ASSOCIATE JUSTICE CARPIO: So, it is not enough that COMELEC should have co-possession of the keys. They must have sole and exclusive possession of those public and private keys because the Constitution vests in the COMELEC alone control of the electoral process, correct? ATTY. ROQUE: Absolutely, Your Honor. [Emphasis supplied]33 A noted expert in computer science, Professor Pablo Manalastas of the Ateneo de Manila University Computer Science Department and the University of the Philippines Department of Computer Science explains the significance of the private keys in relation to the digital signatures to be provided by SMARTMATIC-TIM thus: The real key to the sanctity of the ballot is the private keys to be issued by the BEI. Unfortunately, the private key is not private at all. After collation of votes, the BEI seals its tally with a digital signature

using private keys before transmitting the results. These digital signatures would be generated and assigned by SMARTMATIC and or groups authorized by it. SMARTMATIC would have possession of the secret and the public keys of all BEI personnel. The person in possession of the secret key can change the vote of the precinct. 34 The digital signatures are crucial since Section 22 of the RA No. 8436 as amended provides that "the election returns transmitted electronically and digitally signed shall be considered as official election results and shall be used as the basis for the canvassing of votes and the proclamation of a candidate."35 Thus, by placing solely in the hands of SMARTMATIC-TIM the discretion to assign the "digital signatures," the COMELEC has effectively surrendered control of the May 10, 2010 elections and violated its constitutional mandate to administer the conduct of elections in the country. Significantly, even the counsel for SMARTMATIC-TIM admitted during the oral arguments that the COMELEC should not have given to SMARTMATIC-TIM the possession and control of the public and private keys, thus: ASSOCIATE JUSTICE CARPIO: Okay, let us go [to] the public and private public keys, you were saying that COMELEC if it wants can have exclusive possession and control of the public and private keys, is that right? ATTY. LAZATIN: That is correct, Your Honor. ASSOCIATE JUSTICE CARPIO: And it will not be a problem for SMARTMATIC in performing its obligations under the contract, that is right? ATTY. LAZATIN: That is correct, Your Honor. ASSOCIATE JUSTICE CARPIO: So, it is the choice of COMELEC if they want to have sole and exclusive possession of the public and private keys? ATTY. LAZATIN: We even believe Your Honor that the COMELEC has no choice because it is the one conducting the elections. ASSOCIATE JUSTICE CARPIO: So, it should not have given to

SMARTMATIC possession and control of the public and private keys? ATTY. LAZATIN: Yes, Your Honor. ASSOCIATE JUSTICE CARPIO: So, you agree with me that it should be given back solely to COMELEC because that is the effective control over the automation process? ATTY. LAZATIN: That is correct until after the election, Your Honor, I would like to stress that this is a least arrangement Your Honor so that the electronic key will have to be returned to the lessor, Your Honor. ASSOCIATE JUSTICE CARPIO: No, I am not talking about the electronic key, I am talking about the digital signatures. ATTY. LAZATIN: Agreed, Your Honor. ASSOCIATE JUSTICE CARPIO: Okay, you agree that it belongs, it should be under the possession and control of COMELEC? ATTY. LAZATIN: That is correct, Your Honor.36 CONCLUSIONS Section 26 clearly provides that the ITD shall have exclusive supervision and control of the AES and shall carry out the full administration and implementation of the system. To fully implement this statutory requirement, the COMELEC should have stipulated in the automation contract that it is the ITD, and not SMARTMATIC-TIM, that should be made in charge of the technical aspects of the automated May 10, 2010 elections, consistent with its constitutional mandate as well as Section 26 of RA No. 8436. Under the present contract, the exclusive supervision and control over the AES that the law in its wisdom has put in place, has simply been negated. To be wary of giving control of the critical elements of our election process to an entity other than the COMELEC cannot and should not be regarded as an unhealthy skepticism that we should shy away from. On the contrary, wariness should be our mindset, particularly on

legal matters bearing on elections and their automation, given the constitutional and legal guidelines that foist on us the standard of a fair, clean, honest and credible election. We must be wary, too, because we are not wanting in warnings from those who have waded ahead of us into the waters of automation. As observed in foreign jurisdictions with previous experience in the use of automated systems:37 The particular danger in computer-controlled voting machines was said to lie in the fact that elections could be much more effectively influenced via manipulation of the software by the device manufacturer than in ballot box elections. For instance, it was said to be possible for faulty software to allot a certain share of the votes cast to a certain party regardless of the election decision by the respective voter or for the total votes cast to be divided among the parties standing for election according to a set proportion. Manipulations were said to be possible both by politically or financially motivated "insiders", in particular employees of the manufacturer, and by external third parties who gained access to the computers used by the manufacturer (for instance via viruses or trojans); they were said with regard to the complexity of the software used not always to be discovered even in careful quality control effected by the manufacturer. Although it was said to be necessary to prevent unauthorised access to the devices between the elections through suitable security measures, no such monitoring was said to take place in Germany; there were also said to be no suitable regulations in force that were able to guarantee protected storage of the voting machines.38 Broad as the power of the COMELEC may be as the independent constitutional body tasked to enforce and administer all laws and regulations relative to the conduct of elections, it has no competence to act outside the Constitution and its supporting statutes;39 the scope of its activities is circumscribed by our election laws and by the Constitution.40 Thus, while we accord the greatest respect to the means adopted by the COMELEC to resolve policy questions on the conduct and regulation of elections and give its actions the greatest presumption of regularity, we must not hesitate to declare its actions grossly abusive of its constitutionally-granted discretion when it acts outside the contemplation of the Constitution and of our laws.41 In

saying this, I have to hark back to where I started in this Dissent. I am not against and would welcome automation undertaken within the legal and constitutional limits. Consequently, while I vote to strike down automation contract between COMELEC and SMARTMATICTIM as invalid for violating Section 2, Article IX (C) of the Constitution and Section 26 of RA No. 8436, as amended by RA No. 9369, I would not hesitate to accept an automation arrangement without the legally objectionable features if COMELEC can still work this out for partial or even national implementation in the May 10, 2010 elections. Accordingly, I dissent from the majority opinion. ARTURO D. BRION Associate Justice Footnotes
1

See Information Technology Foundation of the Philippines v. COMELEC, G.R. No. 15939, January 13, 2004, 419 SCRA 141.
2

Contract for the Provision of An Automated Election System for the May 10, 2010 Synchronized National and Local Elections dated July 10, 2009(Automation Contract).
3

CONSTITUTION, Article IX (C)Section 2(1).

Loong v. COMELEC, G.R. No. 133676, April 14, 1999, 305 SCRA 832, 870-871.
5

73 Phil. 288, 295-296 (1941). CONSTITUTION, Article VIII, Section 1. See also supra note 4.

An Act Authorizing The Commission On Elections To Use An Automated Election System In The May 11, 1998 National Or Local Elections And In Subsequent National and Local Electoral Exercises, Providing Funds Therefor and For Other Purposes.
8

An Act Amending Republic Act No. 8436, Entitled "An Act Authorizing The Commission On Elections To Use An Automated Election System In The May 11, 1998 National Or Local Elections

And In Subsequent National and Local Electoral Exercises, To Encourage Transparency, Credibility, Fairness and Accuracy of Elections, Amending For The Purpose Batas Pambansa Blg. 881, As Amended, Republic Act No. 7166 And Other Related Election Laws, Providing Funds Therefor and For Other Purposes."
9

SEC. 6. Section 6 of Republic Act No. 8436 is hereby amended to read as follows: SEC. 5 Authority to Use an Automated Election System. - To carry out the above-stated policy, the Commission on Elections, herein referred to as the Commission, is hereby authorized to use an automated election system or systems in the same election in different provinces, whether paper-based or a direct recording electronic election system as it may deem appropriate and practical for the process of voting, counting of votes and canvassing/consolidation and transmittal of results of electoral exercises: Provided, that for the regular national and local election, which shall be held immediately after effectivity of this Act, the AES shall be used in at least two highly urbanized cities and two provinces each in Luzon, Visayas and Mindanao, to be chosen by the Commission: Provided, further, That local government units whose officials have been the subject of administrative charges within sixteen (16) month prior to the May 14, 2007 election shall not be chosen: Provided, finally, That no area shall be chosen without the consent of the Sanggunian of the local government unit concerned. The term local government unit as used in this provision shall refer to a highly urbanized city or province. In succeeding regular national or local elections, the AES shall be implemented nationwide." [Emphasis supplied]
10

See Republic Act No. 9525 entitled "An Act Appropriating The Sum of Eleven Billion Three Hundred One Million Seven Hundred Ninety Thousand Pesos (P11,301,790,000.00) As Supplemental Appropriations For An Automated Election System and For Other Purposes.
11

"Section 5 of RA No. 8436 does not state that the use of the AES is necessary or is a condition precedent to the conduct of automated elections in 2010. Had the legislators intended the pilot testing to be

mandatory, they could have stated the same in a language that is clear and straightforward. xxx. In any event, the pilot automation in the May 10, 2007 elections, as demanded by petitioners, could not be complied with owing to its innate impossibility;" COMELECs Comment, pp. 23-24.
12

The provision pertinently states: "Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government."
13

Not amended by RA No. 9436. Art. 3.3 reads pertinently provides:

14

3.3 The PROVIDER shall be liable for all its obligations under this Project and the performance of portions thereof by other persons or entities not parties to this Contract shall not relieve the PROVIDER of said obligations and concomitant liabilities. SMARTMATIC, as the joint venture partner with the greater track record in automated elections, shall be in charge of the technical aspects of the counting and canvassing software and hardware including transmission configuration and system integration. SMARTMATIC shall also be primarily responsible for preventing and troubleshooting technical problems that may arise during the elections. [Emphasis supplied]
15

Part 5, par. 5.4 (e) of the Instruction to Bidders states:

5.4. A JV of two or more firms as partners shall comply with the following requirements. xxx (e) The JV member with a greater track record in automated elections, shall be in charge of the technical aspects of the counting and canvassing software and hardware, including transmission, configuration and system integration.

16

The pertinent portion of the RFP provides:

The Commission on Elections (COMELEC), through its Bids and Awards Committee (BAC), is currently accepting bids for the lease, with an option to purchase, of an automated election system (AES) that will meet the following needs: xxx (6) A complete solutions provider, and not just a vendor, which can provide experienced and effective overall nationwide project management service and total customer support (covering all areas of project implementation including technical support, training, information campaign support, civil and electrical works service, warehousing, deployment, installation and pullout, contingency planning, etc.), under COMELEC supervision and control, to ensure effective and successful implementation of the Project. [Emphasis supplied]
17

See RFP, par. 1 and 2 at p. 5. Id., par. 6. Mondano v. Silvosa, 97 Phil. 158

18

19

20

Roman Catholic Apostolic Administrator v. Land Registration Commission, 102 Phil. 625.
21

Automation Contract at p. 1. Id., p. 1-2. Id., p. 4. Id., p. 4-5. Id., p. 11. Id., p. 12. Id., p. 13.

22

23

24

25

26

27

28

Article 3.3 of the Automation Contract. Bid Bulletin No. 10, April 27, 2009.

29

30

Bid Bulletin No. 6, April 27 2009, p. 7; Bid Bulletin No. 10, April 27, 2009, p.3.
31

Bid Bulletin No. 19, April 27, 2009, p.2. TSN, Oral Arguments of July 29, 2009, pp. 49-57. TSN, Oral Arguments of July 29, 2009, pp. 218-221. (last

32

33

34

See http://pcij.org/stories/2009/election-automation2.html, visited September 10, 2009).

35

Par. 4.5 of the RFP dated March 11, 2009 also states that the Board of Election Inspectors shall digitally sign and encrypt the internal copy of the election return.
36

TSN, Oral Arguments of July 29, 2009, pp. 461-463

37

In the Judgment dated March 3, 2009, the German Federal Constitutional Court (GFCC) held that the use of computer-controlled voting machines under the Federal Voting Machines Ordinance was unconstitutional since it does not ensure that only such voting machines are permitted and used which meet the constitutional requirements of the principle of the public nature of elections. Accordingly, the GFCC ruled that the computer-controlled voting machines used in the election of the 16th German Bundestag did not meet the requirements which the constitution places on the use of electronic voting machines; See Judgment of the Second Senate of 3 March 2009 on the basis of the oral hearing of 28 October 2008, 2 BvC 3/07, 2 BvC 4/07, http://www.bundesverfassungsgericht.de/entscheidungen/rs2009030 3_2bvc000307en.html, (last visited September 10, 2009)
38

Id. Dipatuan v. COMELEC, 47 SCRA 258 (1972).

39

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 196231 September 4, 2012

EMILIO A. GONZALES III, Petitioner, vs. OFFICE OF THE PRESIDENT OF THE PHILIPPINES, acting through and represented by EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., SENIOR DEPUTY EXECUTIVE SECRETARY JOSE AMOR M. AMORANDO, Officer in Charge, Office of the Deputy Executive Secretary for Legal Affairs, ATTY. RONALDO A. GERON, DIR. ROWENA TURINGAN-SANCHEZ, and ATTY. CARLITOD. CATAYONG, Respondents. x-----------------------x G.R. No. 196232 WENDELL BARRERAS-SULIT, Petitioner, vs. ATTY. PAQUITO N. OCHOA, JR., in his capacity as EXECUTIVE SECRETARY, OFFICE OF THE PRESIDENT, ATTY. DENNIS F. ORTIZ, ATTY. CARLO D.SULAY and ATTY. FROILAN MONTALBAN, .JR., in their capacities as CHAIRMAN and MEMBERS of the OFFICE OF MALACAANG LEGAL AFFAIRS, Respondents. DECISION PERLAS-BERNABE, J.: The Case These two petitions have been consolidated not because they stem from the same factual milieu but because they raise a common thread of issues relating to the President's exercise of the power to remove from office herein petitioners who claim the protective cloak of independence of the constitutionally-created office to which they belong - the Office of the Ombudsman. The first case, docketed as G.R. No. 196231, is a Petition for Certiorari (with application for issuance of temporary restraining order

or status quo order) which assails on jurisdictional grounds the Decision1 dated March 31, 2011 rendered by the Office of the President in OP Case No. 10-J-460 dismissing petitioner Emilio A. Gonzales III, Deputy Ombudsman for the Military and Other Law Enforcement Offices (MOLEO), upon a finding of guilt on the administrative charges of Gross Neglect of Duty and Grave Misconduct constituting a Betrayal of Public Trust. The petition primarily seeks to declare as unconstitutional Section 8(2) of Republic Act (R.A.) No. 6770, otherwise known as the Ombudsman Act of 1989, which gives the President the power to dismiss a Deputy Ombudsman of the Office of the Ombudsman. The second case, docketed as G.R. No. 196232, is a Petition for Certiorari and Prohibition (with application for issuance of a temporary restraining order or status quo order) seeking to annul, reverse and set aside (1) the undated Order2 requiring petitioner Wendell Barreras-Sulit to submit a written explanation with respect to alleged acts or omissions constituting serious/grave offenses in relation to the Plea Bargaining Agreement (PLEBARA) entered into with Major General Carlos F. Garcia; and (2) the April 7, 2011 Notice of Preliminary Investigation,3 both issued by the Office of the President in OP-DC-Case No. 11-B-003, the administrative case initiated against petitioner as a Special Prosecutor of the Office of the Ombudsman. The petition likewise seeks to declare as unconstitutional Section 8(2) of R.A. No. 6770 giving the President the power to dismiss a Special Prosecutor of the Office of the Ombudsman. The facts from which these two cases separately took root are neither complicated nor unfamiliar. In the morning of August 23, 2010, news media scampered for a minute-by-minute coverage of a hostage drama that had slowly unfolded right at the very heart of the City of Manila. While initial news accounts were fragmented it was not difficult to piece together the story on the hostage-taker, Police Senior Inspector Rolando Mendoza. He was a disgruntled former police officer attempting to secure his reinstatement in the police force and to restore the benefits of a life-long, and erstwhile bemedaled, service. The following day, broadsheets and tabloids were replete with stories not

just of the deceased hostage-taker but also of the hostage victims, eight of whom died during the bungled police operation to rescue the hapless innocents. Their tragic deaths triggered word wars of foreign relation proportions. One newspaper headline ran the story in detail, as follows: MANILA, Philippines - A dismissed policeman armed with an assault rifle hijacked a bus packed with tourists, and killed most of its passengers in a 10 hour-hostage drama shown live on national television until last night. Former police senior inspector Rolando Mendoza was shot dead by a sniper at past 9 p.m. Mendoza hijacked the bus and took 21 Chinese tourists hostage, demanding his reinstatement to the police force. The hostage drama dragged on even after the driver of the bus managed to escape and told police that all the remaining passengers had been killed. Late into the night assault forces surrounded the bus and tried to gain entry, but a pair of dead hostages hand-cuffed to the door made it difficult for them. Police said they fired at the wheels of the bus to immobilize it. Police used hammers to smash windows, door and wind-shield but were met with intermittent fire from the hos-tage taker. Police also used tear gas in an effort to confirm if the remaining hostages were all dead or alive. When the standoff ended at nearly 9 p.m., some four hostages were rescued alive while Mendoza was killed by a sniper. Initial reports said some 30 policemen stormed the bus. Shots also rang out, sending bystanders scampering for safety. It took the policemen almost two hours to assault the bus because gunfire reportedly rang out from inside the bus. Mendoza hijacked the tourist bus in the morning and took the tourists hostage.

Mendoza, who claimed he was illegally dismissed from the police service, initially released nine of the hostages during the drama that began at 10 a.m. and played out live on national television. Live television footage showed Mendoza asking for food for those remaining in the bus, which was delivered, and fuel to keep the airconditioning going. The disgruntled former police officer was reportedly armed with an M-16 rifle, a 9 mm pistol and two hand grenades. Mendoza posted a handwritten note on the windows of the bus, saying "big deal will start after 3 p.m. today." Another sign stuck to another window said "3 p.m. today deadlock." Stressing his demand, Mendoza stuck a piece of paper with a handwritten message: "Big mistake to correct a big wrong decision." A larger piece of paper on the front windshield was headed, "Release final decision," apparently referring to the case that led to his dismissal from the police force. Negotiations dragged on even after Mendoza's self-imposed deadline. Senior Police Officer 2 Gregorio Mendoza said his brother was upset over his dismissal from the police force. "His problem was he was unjustly removed from service. There was no due process, no hearing, no com-plaint," Gregorio said. Last night, Gregorio was arrested by his colleagues on suspicions of being an accessory to his brother's action. Tensions rose as relatives tried to prevent lawmen from arresting Gregorio in front of national television. This triggered the crisis that eventually forced Mendoza to carry out his threat and kill the remaining hostages. Negotiators led by Superintendent Orlando Yebra and Chief Inspector Romeo Salvador tried to talk Mendoza into surrendering and releasing the 21 hostages, mostly children and three Filipinos, including the driver, the tourist guide and a photographer. Yebra reportedly lent a cellphone to allow communications with Mendoza inside the bus, which was parked in front ofthe Quirino Grandstand.

Children could be seen peeking from the drawn curtains of the bus while police negotiators hovered near the scene. Manila Police District (MPD) director Chief Superinten-dent Rodolfo Magtibay ordered the deployment of crack police teams and snipers near the scene. A crisis man-agement committee had been activated with Manila Vice Mayor Isko Moreno coordinating the actions with the MPD. Earlier last night, Ombudsman Merceditas Gutierrez had a meeting with Moreno to discuss Mendoza's case that led to his dismissal from the service. Ombudsman spokesman Jose de Jesus said Gutierrez gave a "sealed letter" to Moreno to be delivered to Mendoza. De Jesus did not elaborate on the contents of the letter but said Moreno was tasked to personally deliver the letter to Mendoza. MPD spokesman Chief Inspector Edwin Margarejo said Mendoza was apparently distraught by the slow process of the Ombudsman in deciding his motion for reconside-ration. He said the PNP-Internal Affairs Service and the Manila Regional Trial Court had already dismissed crim-inal cases against him. The hostage drama began when Mendoza flagged down the Hong Thai Travel Tourist bus (TVU-799), pretend-ing to hitch a ride. Margarejo said the bus had just left Fort Santiago in Intramuros when Mendoza asked the driver to let him get on and ride to Quirino Grandstand. Upon reaching the Quirino Grandstand, Mendoza announced to the passengers that they would be taken hostage. "Having worn his (police) uniform, of course there is no doubt that he already planned the hostage taking," Margarejo said. - Sandy Araneta, Nestor Etolle, Delon Porcalla, Amanda Fisher, Cecille Suerte Felipe, Christi-na Mendez, AP Grandstand Carnage, The Philippine Star, Updated August 24, 2010 12:00 AM, Val Rodri-guez.4 In a completely separate incident much earlier in time, more particularly in December of 2003, 28-year-old Juan Paolo Garcia and 23-year-old Ian Carl Garcia were caught in the United States smuggling $100,000 from Manila by concealing the cash in their luggage and making false statements to US Customs Officers. The Garcia brothers pleaded guilty to bulk cash smuggling and agreed to

forfeit the amount in favor of the US Government in exchange for the dismissal of the rest of the charges against them and for being sentenced to time served. Inevitably, however, an investigation into the source of the smuggled currency conducted by US Federal Agents and the Philippine Government unraveled a scandal of military corruption and amassed wealth -- the boys' father, Retired Major General Carlos F. Garcia, former Chief Procurement Officer of the Armed Forces, had accumulated more than P 300 Million during his active military service. Plunder and Anti-Money Laundering cases were eventually filed against Major General Garcia, his wife and their two sons before the Sandiganbayan. G.R. No. 196231 Sometime in 2008, a formal charge5 for Grave Misconduct (robbery, grave threats, robbery extortion and physical injuries) was filed before the Philippine National Police-National Capital Region (PNP-NCR) against Manila Police District Senior Inspector (P/S Insp.) Rolando Mendoza, and four others, namely, Police Inspector Nelson Lagasca, Senior Police Inspector I Nestor David, Police Officer III Wilson Gavino, and Police Officer II Roderick Lopena. A similar charge was filed by the private complainant, Christian M. Kalaw, before the Office of the City Prosecutor, Manila, docketed as I.S. No. 08E-09512. On July 24, 2008, while said cases were still pending, the Office of the Regional Director of the National Police Commission (NPC) turned over, upon the request of petitioner Emilio A. Gonzales III, all relevant documents and evidence in relation to said case to the Office of the Deputy Ombudsman for appropriate administrative adjudication.6 Subsequently, Case No. OMB-P-A-08-0670-H for Grave Misconduct was lodged against P/S Insp. Rolando Mendoza and his fellow police officers, who filed their respective verified position papers as directed. Meanwhile, on August 26, 2008, I.S. No. 08E-09512 was dismissed7 upon a finding that the material allegations made by the complainant had not been substantiated "by any evidence at all to warrant the indictment of respondents of the offenses charged." Similarly, the Internal Affairs Service of the PNP issued a Resolution8 dated October 17, 2008 recommending the dismissal without prejudice of

the administrative case against the same police officers, for failure of the complainant to appear in three (3) consecutive hearings despite due notice. However, on February 16, 2009, upon the recommendation of petitioner Emilio Gonzales III, a Decision9 in Case No. OMB-P-A-080670-H finding P/S Insp. Rolando Mendoza and his fellow police officers guilty of Grave Misconduct was approved by the Ombudsman. The dispositive portion of said Decision reads: WHEREFORE, it is respectfully recommended that respondents P/S Insp. ROLANDO DEL ROSARIO MENDOZA and PO3 WILSON MATIC GAVINO of PRO-ARMM, Camp Brig. Gen. Salipada K. Pendatun, Parang, Shariff Kabunsuan; P/INSP. NELSON URBANO LAGASCA, SPO1 NESTOR REYES DAVID and PO2 RODERICK SALVA LOPEA of Manila Police District, Headquarters, United Nations Avenue, Manila, be meted the penalty of DISMISSAL from the Service, pursuant to Section 52 (A), Rule IV, Uniform Rules on Administrative Cases in the Civil Service, with the accessory penalties of forfeiture of retirement benefits and perpetual disqualification from reemployment in the government service pursuant to Section 58, Rule IV of the same Uniform Rules of Administrative Cases in the Civil Service, for having committed GRAVE MISCONDUCT. On November 5, 2009, they filed a Motion for Reconsideration10 of the foregoing Decision, followed by a Supplement to the Motion for Reconsideration11 on November 19, 2009. On December 14, 2009, the pleadings mentioned and the records of the case were assigned for review and recommendation to Graft Investigation and Prosecutor Officer Dennis L. Garcia, who released a draft Order12 on April 5, 2010 for appropriate action by his immediate superior, Director Eulogio S. Cecilio, who, in turn, signed and forwarded said Order to petitioner Gonzalez's office on April 27, 2010. Not more than ten (10) days after, more particularly on May 6, 2010, petitioner endorsed the Order, together with the case records, for final approval by Ombudsman Merceditas N. Gutierrez, in whose office it remained pending for final review and action when P/S Insp. Mendoza hijacked a bus-load of foreign tourists on that fateful day of August 23, 2010 in a desperate attempt to have himself reinstated in the police service.

In the aftermath of the hostage-taking incident, which ended in the tragic murder of eight HongKong Chinese nationals, the injury of seven others and the death of P/S Insp. Rolando Mendoza, a public outcry against the blundering of government officials prompted the creation of the Incident Investigation and Review Committee (IIRC),13 chaired by Justice Secretary Leila de Lima and vice-chaired by Interior and Local Government Secretary Jesus Robredo. It was tasked to determine accountability for the incident through the conduct of public hearings and executive sessions. However, petitioner, as well as the Ombudsman herself, refused to participate in the IIRC proceedings on the assertion that the Office of the Ombudsman is an independent constitutional body. Sifting through testimonial and documentary evidence, the IIRC eventually identified petitioner Gonzales to be among those in whom culpability must lie. In its Report,14 the IIRC made the following findings: Deputy Ombudsman Gonzales committed serious and inexcusable negligence and gross violation of their own rules of procedure by allowing Mendoza's motion for reconsideration to languish for more than nine (9) months without any justification, in violation of the Ombudsman prescribed rules to resolve motions for reconsideration in administrative disciplinary cases within five (5) days from submission. The inaction is gross, considering there is no opposition thereto. The prolonged inaction precipitated the desperate resort to hostage-taking. More so, Mendoza's demand for immediate resolution of his motion for reconsideration is not without legal and compelling bases considering the following: (a) PSI Mendoza and four policemen were investigated by the Ombudsman involving a case for alleged robbery (extortion), grave threats and physical injuries amounting to grave misconduct allegedly committed against a certain Christian Kalaw. The same case, however, was previously dismissed by the Manila City Prosecutors Office for lack of probable cause and by the PNP-NCR Internal Affairs Service for failure of the complainant (Christian Kalaw) to submit evidence and prosecute the case. On the other hand, the case which

was filed much ahead by Mendoza et al. against Christian Kalaw involving the same incident, was given due course by the City Prosecutors Office. (b) The Ombudsman exercised jurisdiction over the case based on a letter issued motu proprio for Deputy Ombudsman Emilio A. Gonzalez III, directing the PNP-NCR - without citing any reason - to endorse the case against Mendoza and the arresting policemen to his office for administrative adjudication, thereby showing undue interest on the case. He also caused the docketing of the case and named Atty. Clarence V. Guinto of the PNP-CIDG-NCR, who indorsed the case records, as the nominal complainant, in lieu of Christian Kalaw. During the proceedings, Christian Kalaw did not also affirm his complaint-affidavit with the Ombudsman or submit any position paper as required. (c) Subsequently, Mendoza, after serving preventive suspension, was adjudged liable for grave misconduct by Deputy Ombudsman Gonzales (duly approved on May 21, 2009) based on the sole and uncorroborated complaint-affidavit of Christian Kalaw, which was not previously sustained by the City Prosecutor's Office and the PNP Internal Affairs Service. From the said Resolution, Mendoza interposed a timely motion for reconsideration (dated and filed November 5, 2009) as well as a supplement thereto. No opposition or comment was filed thereto. (d) Despite the pending and unresolved motion for reconsideration, the judgment of dismissal was enforced, thereby abruptly ending Mendoza's 30 years of service in the PNP with forfeiture of all his benefits. As a result, Mendoza sought urgent relief by sending several hand-written letter-requests to the Ombudsman for immediate resolution of his motion for reconsideration. But his requests fell on deaf ears. xxxx By allowing Mendoza's motion for reconsideration to languish for nine long (9) months without any justification, Ombudsman Gutierrez and Deputy Ombudsman Gonzales committed complete and wanton violation of the Ombudsman prescribed rule to resolve motions for

reconsideration in administrative disciplinary cases within five (5) days from submission (Sec. 8, Ombudsman Rules of Procedure). The inaction is gross, there being no opposition to the motion for reconsideration. Besides, the Ombudsman, without first resolving the motion for reconsideration, arbitrarily enforced the judgment of dismissal and ignored the intervening requests for immediate resolution, thereby rendering the inaction even more inexcusable and unjust as to amount to gross negligence and grave misconduct. SECOND, Ombudsman Gutierrez and Deputy Ombudsman Gonzales committed serious disregard of due process, manifest injustice and oppression in failing to provisionally suspend the further implementation of the judgment of dismissal against Mendoza pending disposition of his unresolved motion for reconsideration. By enforcing the judgment of dismissal without resolving the motion for reconsideration for over nine months, the two Ombudsman officials acted with arbitrariness and without regard to due process and the constitutional right of an accused to the speedy disposition of his case. As long as his motion for reconsideration remained pending and unresolved, Mendoza was also effectively deprived of the right to avail of the ordinary course of appeal or review to challenge the judgment of dismissal before the higher courts and seek a temporary restraining order to prevent the further execution thereof. As such, if the Ombudsman cannot resolve with dispatch the motion for reconsideration, it should have provisionally suspended the further enforcement of the judgment of dismissal without prejudice to its reimplementation if the reconsideration is eventually denied. Otherwise, the Ombudsman will benefit from its own inaction. Besides, the litigant is entitled to a stay of the execution pending resolution of his motion for reconsideration. Until the motion for reconsideration is denied, the adjudication process before the Ombudsman cannot be considered as completely finished and, hence, the judgment is not yet ripe for execution. xxxx When the two Ombudsman officials received Mendoza's demand for

the release of the final order resolving his motion for reconsideration, they should have performed their duty by resolving the reconsideration that same day since it was already pending for nine months and the prescribed period for its resolution is only five days. Or if they cannot resolve it that same day, then they should have acted decisively by issuing an order provisionally suspending the further enforcement of the judgment of dismissal subject to revocation once the reconsideration is denied and without prejudice to the arrest and prosecution of Mendoza for the hostage-taking. Had they done so, the crisis may have ended peacefully, without necessarily compromising the integrity of the institution. After all, as relayed to the negotiators, Mendoza did express willingness to take full responsibility for the hostage-taking if his demand for release of the final decision or reinstatement was met. But instead of acting decisively, the two Ombudsman officials merely offered to review a pending motion for review of the case, thereby prolonging their inaction and aggravating the situation. As expected, Mendoza - who previously berated Deputy Gonzales for allegedly demanding Php150,000 in exchange for favorably resolving the motion for reconsideration - rejected and branded as trash ("basura") the Ombudsman [sic] letter promising review, triggering the collapse of the negotiations. To prevent the situation from getting out of hand, the negotiators sought the alternative option of securing before the PNP-NCRPO an order for Mendoza's provisional reinstatement pending resolution of the motion for reconsideration. Unfortunately, it was already too late. But had the Ombudsman officials performed their duty under the law and acted decisively, the entire crisis may have ended differently. The IIRC recommended that its findings with respect to petitioner Gonzales be referred to the Office of the President (OP) for further determination of possible administrative offenses and for the initiation of the proper administrative proceedings. On October 15, 2010, the OP instituted a Formal Charge15 against petitioner Gonzales for Gross Neglect of Duty and/or Inefficiency in the Performance of Official Duty under Rule XIV, Section 22 of the Omnibus Rules Implementing Book V of E.O. No. 292 and other pertinent Civil

Service Laws, rules and regulations, and for Misconduct in Office under Section 3 of the Anti-Graft and Corrupt Practices Act.16 Petitioner filed his Answer17 thereto in due time. Shortly after the filing by the OP of the administrative case against petitioner, a complaint dated October 29, 2010 was filed by Acting Assistant Ombudsman Joselito P. Fangon before the Internal Affairs Board of the Office of the Ombudsman charging petitioner with "directly or indirectly requesting or receiving any gift, present, share, percentage, or benefit, for himself or for any other person, in connection with any contract or transaction between the Government and any other party, wherein the public officer in his official capacity has to intervene under the law" under Section 3(b) of the Anti-Graft and Corrupt Practices Act, and also, with solicitation or acceptance of gifts under Section 7(d) of the Code of Conduct and Ethical Standards.18 In a Joint Resolution19 dated February 17, 2011, which was approved by Ombudsman Ma. Merceditas N. Gutierrez, the complaint was dismissed, as follows: WHEREFORE, premises considered, finding no probable cause to indict respondent Emilio A. Gonzales III for violations of Section 3(b) of R.A. No. 3019 and Section 7(d) of R.A. No. 6713, the complaint is hereby be [sic] DISMISSED. Further, finding no sufficient evidence to hold respondent administratively liable for Misconduct, the same is likewise DISMISSED. Meanwhile, the OP notified20 petitioner that a Preliminary Clarificatory Conference relative to the administrative charge against him was to be conducted at the Office of the Deputy Executive Secretary for Legal Affairs (ODESLA) on February 8, 2011. Petitioner Gonzales alleged,21 however, that on February 4, 2011, he heard the news that the OP had announced his suspension for one year due to his delay in the disposition of P/S Insp. Mendoza's motion for reconsideration. Hence, believing that the OP had already prejudged his case and that any proceeding before it would simply be a charade, petitioner no longer attended the scheduled clarificatory conference. Instead, he filed an Objection to Proceedings22 on February 7, 2011. Despite petitioner's absence, however, the OP pushed through with the

proceedings and, on March 31, 2011, rendered the assailed Decision,23 the dispositive portion of which reads: WHEREFORE, in view of the foregoing, this Office finds Deputy Ombudsman Emilio A. Gonzales III guilty of Gross Neglect of Duty and Grave Misconduct constituting betrayal of public trust, and hereby meted out the penalty of DISMISSAL from service. SO ORDERED. Hence, the petition. G.R. No. 196232 In April of 2005, the Acting Deputy Special Prosecutor of the Office of the Ombudsman charged Major General Carlos F. Garcia, his wife Clarita D. Garcia, their sons Ian Carl Garcia, Juan Paulo Garcia and Timothy Mark Garcia and several unknown persons with Plunder (Criminal Case No. 28107) and Money Laundering (Criminal Case No. SB09CRM0194) before the Sandiganbayan. On January 7, 2010, the Sandiganbayan denied Major General Garcia's urgent petition for bail holding that strong prosecution evidence militated against the grant of bail. On March 16, 2010, however, the government, represented by petitioner, Special Prosecutor Wendell Barreras-Sulit ("Barreras-Sulit") and her prosecutorial staff sought the Sandiganbayan's approval of a Plea Bargaining Agreement (hereinafter referred to as "PLEBARA") entered into with the accused. On May 4, 2010, the Sandiganbayan issued a Resolution finding the change of plea warranted and the PLEBARA compliant with jurisprudential guidelines. Outraged by the backroom deal that could allow Major General Garcia to get off the hook with nothing but a slap on the hand notwithstanding the prosecution's apparently strong evidence of his culpability for serious public offenses, the House of Representatives' Committee on Justice conducted public hearings on the PLEBARA. At the conclusion of these public hearings, the Committee on Justice passed and adopted Committee Resolution No. 3,24 recommending to the President the dismissal of petitioner Barreras-Sulit from the service and the filing of appropriate charges against her Deputies and

Assistants before the appropriate government office for having committed acts and/or omissions tantamount to culpable violations of the Constitution and betrayal of public trust, which are violations under the Anti-Graft and Corrupt Practices Act and grounds for removal from office under the Ombudsman Act. The Office of the President initiated OP-DC-Case No. 11-B-003 against petitioner Barreras-Sulit. In her written explanation, petitioner raised the defenses of prematurity and the lack of jurisdiction of the OP with respect to the administrative disciplinary proceeding against her. The OP, however, still proceeded with the case, setting it for preliminary investigation on April 15, 2011. Hence, the petition. The Issues In G.R. No. 196231, petitioner Gonzales raises the following grounds, to wit: (A) RESPONDENT OFFICE OF THE PRESIDENT, ACTING THROUGH THE OTHER INDIVIDUAL RESPONDENTS, HAS NO CONSTITUTIONAL OR VALID STATUTORY AUTHORITY TO SUBJECT PETITIONER TO AN ADMINISTRATIVE INVESTIGATION AND TO THEREAFTER ORDER HIS REMOVAL AS DEPUTY OMBUDSMAN. (B) RESPONDENT OFFICE OF THE PRESIDENT, ACTING THROUGH THE OTHER INDIVIDUAL RESPONDENTS, GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT CONDUCTED ITS INVESTIGATION AND RENDERED ITS DECISION IN VIOLATION OF PETITIONER'S RIGHT TO DUE PROCESS. (C) RESPONDENT OFFICE OF THE PRESIDENT, ACTING THROUGH

THE INDIVIDUAL RESPONDENTS, GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN FINDING THAT PETITIONER COMMITTED DELAY IN THE DISPOSITION OF MENDOZA'S MOTION FOR RECONSIDERATION. (D) RESPONDENT OFFICE OF THE PRESIDENT, ACTING THROUGH THE INDIVIDUAL RESPONDENTS, GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN FINDING THAT PETITIONER TOOK UNDUE INTEREST IN MENDOZA'S CASE. (E) RESPONDENT OFFICE OF THE PRESIDENT, ACTING THROUGH THE INDIVIDUAL RESPONDENTS, GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN FAULTING PETITIONER FOR NOT RELEASING THE RESOLUTION ON MENDOZA'S MOTION FOR RECONSIDERATION OR FOR NOT SUSPENDING MENDOZA'S DISMISSAL FROM SERVICE DURING THE HOSTAGE CRISIS. (F) RESPONDENT OFFICE OF THE PRESIDENT, ACTING THROUGH THE INDIVIDUAL RESPONDENTS, GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN FINDING THAT THERE WAS SUBSTANTIAL EVIDENCE TO SHOW THAT PETITIONER DEMANDED A BRIBE FROM MENDOZA.25 On the other hand, in G.R. No. 196232, petitioner Barreras-Sulit poses for the Court the question AS OF THIS POINT IN TIME, WOULD TAKING AND CONTINUING TO TAKE ADMINISTRATIVE DISCIPLINARY PROCEEDING AGAINST PETITIONER BE LAWFUL AND JUSTIFIABLE?26 Re-stated, the primordial question in these two petitions is whether

the Office of the President has jurisdiction to exercise administrative disciplinary power over a Deputy Ombudsman and a Special Prosecutor who belong to the constitutionally-created Office of the Ombudsman. The Court's Ruling Short of claiming themselves immune from the ordinary means of removal, petitioners asseverate that the President has no disciplinary jurisdiction over them considering that the Office of the Ombudsman to which they belong is clothed with constitutional independence and that they, as Deputy Ombudsman and Special Prosecutor therein, necessarily bear the constitutional attributes of said office. The Court is not convinced. The Ombudsman's administrative disciplinary power over a Deputy Ombudsman and Special Prose-cutor is not exclusive. It is true that the authority of the Office of the Ombudsman to conduct administrative investigations proceeds from its constitutional mandate to be an effective protector of the people against inept and corrupt government officers and employees,27 and is subsumed under the broad powers "explicitly conferred" upon it by the 1987 Constitution and R.A. No. 6770.28 The ombudsman traces its origins to the primitive legal order of Germanic tribes. The Swedish term, which literally means "agent" or "representative," communicates the concept that has been carried on into the creation of the modern-day ombudsman, that is, someone who acts as a neutral representative of ordinary citizens against government abuses.29 This idea of a people's protector was first institutionalized in the Philippines under the 1973 Constitution with the creation of the Tanodbayan, which wielded the twin powers of investigation and prosecution. Section 6, Article XIII of the 1973 Constitution provided thus: Sec. 6. The Batasang Pambansa shall create an office of the Ombudsman, to be known as Tanodbayan, which shall receive and investigate complaints relative to public office, including those in government-owned or controlled corporations, make appropriate

recommendations, and in case of failure of justice as defined by law, file and prosecute the corresponding criminal, civil, or administrative case before the proper court or body. The framers of the 1987 Constitution later envisioned a more effective ombudsman vested with authority to "act in a quick, inexpensive and effective manner on complaints against administrative officials", and to function purely with the "prestige and persuasive powers of his office" in correcting improprieties, inefficiencies and corruption in government freed from the hampering effects of prosecutorial duties.30 Accordingly, Section 13, Article XI of the 1987 Constitution enumerates the following powers, functions, and duties of the Office of the Ombudsman, viz: (1) Investigate on its own, or on complaint by any person, any act or omission of any public official, employee, office or agency, when such act or omission appears to be illegal, unjust, improper, or inefficient. (2) Direct, upon complaint or at its own instance, any public official or employee of the Government, or any subdivision, agency or instrumentality thereof, as well as of any government-owned or controlled corporation with original charter, to perform and expedite any act or duty required by law, or to stop, prevent, and correct any abuse or impropriety in the performance of duties. (3) Direct the officer concerned to take appropriate action against a public official or employee at fault, and recommend his removal, suspension, demotion, fine, censure, or prosecution, and ensure compliance therewith. (4) Direct the officer concerned, in any appropriate case, and subject to such limitations as may be provided by law, to furnish it with copies of documents relating to contracts or transactions entered into by his office involving the disbursement or use of public funds or properties, and report any irregularity to the Commission on Audit for appropriate action. (5) Request any government agency for assistance and information necessary in the discharge of its responsibilities, and to examine, if necessary, pertinent records and documents.

(6) Publicize matters covered by its investigation circumstances so warrant and with due prudence.

when

(7) Determine the causes of inefficiency, red tape, mismanagement, fraud, and corruption in the Government and make recommendations for their elimination and the observance of high standards of ethics and efficiency. (8) Promulgate its rules of procedure and exercise such other powers or perform such functions or duties as may be provided by law.31 Congress thereafter passed, on November 17, 1989, Republic Act No. 6770, the Ombudsman Act of 1989, to shore up the Ombudsman's institutional strength by granting it "full administrative disciplinary power over public officials and employees,"32 as follows: Sec. 21. Officials Subject to Disciplinary Authority; Exceptions. - The Office of the Ombudsman shall have disciplinary authority over all elective and appointive officials of the Government and its subdivisions, instrumentalities and agencies, including Members of the Cabinet, local government, government-owned or controlled corporations and their subsidiaries, except over officials who may be removed only by impeachment or over Members of Congress, and the Judiciary.(Emphasis supplied) In the exercise of such full administrative disciplinary authority, the Office of the Ombudsman was explicitly conferred the statutory power to conduct administrative investigations under Section 19 of the same law, thus: Sec. 19. Administrative complaints. - The Ombudsman shall act on all complaints relating, but not limited, to acts or omissions which: 1. Are contrary to law or regulation; 2. Are unreasonable, unfair, oppressive or discriminatory; 3. Are inconsistent with the general course of an agency's functions, though in accordance with law;

4. Proceed from a mistake of law or an arbitrary ascertainment of facts; 5. Are in the exercise of discretionary powers but for an improper purpose; or 6. Are otherwise irregular, immoral or devoid of justification. While the Ombudsman's authority to discipline administratively is extensive and covers all government officials, whether appointive or elective, with the exception only of those officials removable by impeachment, the members of congress and the judiciary, such authority is by no means exclusive. Petitioners cannot insist that they should be solely and directly subject to the disciplinary authority of the Ombudsman. For, while Section 21 declares the Ombudsman's disciplinary authority over all government officials, Section 8(2), on the other hand, grants the President express power of removal over a Deputy Ombudsman and a Special Prosecutor. Thus: Section 8. Removal; Filling of Vacancy.xxxx (2) A Deputy or the Special Prosecutor, may be removed from office by the President for any of the grounds provided for the removal of the Ombudsman, and after due process. It is a basic canon of statutory construction that in interpreting a statute, care should be taken that every part thereof be given effect, on the theory that it was enacted as an integrated measure and not as a hodge-podge of conflicting provisions. A construction that would render a provision inoperative should be avoided; instead, apparently inconsistent provisions should be reconciled whenever possible as parts of a coordinated and harmonious whole.33 Otherwise stated, the law must not be read in truncated parts. Every part thereof must be considered together with the other parts, and kept subservient to the general intent of the whole enactment.34 A harmonious construction of these two apparently conflicting provisions in R.A. No. 6770 leads to the inevitable conclusion that Congress had intended the Ombudsman and the President to

exercise concurrent disciplinary jurisdiction over petitioners as Deputy Ombudsman and Special Prosecutor, respectively. This sharing of authority goes into the wisdom of the legislature, which prerogative falls beyond the pale of judicial inquiry. The Congressional deliberations on this matter are quite insightful, viz: x x x Senator Angara explained that the phrase was added to highlight the fact that the Deputy Tanodbayan may only be removed for cause and after due process. He added that the President alone has the power to remove the Deputy Tanodbayan. Reacting thereto, Senator Guingona observed that this might impair the independence of the Tanodbayan and suggested that the procedural removal of the Deputy Tanodbayan...; and that he can be removed not by the President but by the Ombudsman. However, the Chair expressed apprehension that the Ombudsman and the Deputy Ombudsman may try to protect one another. The Chair suggested the substitution of the phrase "after due process" with the words after due notice and hearing with the President as the ultimate authority. Senator Guingona contended, however, that the Constitution provides for an independent Office of the Tanodbayan, and to allow the Executive to have disciplinary powers over the Tanodbayan Deputies would be an encroachment on the independence of the Tanodbayan. Replying thereto, Senator Angara stated that originally, he was not averse to the proposal, however, considering the Chair's observation that vesting such authority upon the Tanodbayan itself could result in mutual protection, it is necessary that an outside official should be vested with such authority to effect a check and balance.35 Indubitably, the manifest intent of Congress in enacting both provisions - Section 8(2) and Section 21 - in the same Organic Act was to provide for an external authority, through the person of the President, that would exercise the power of administrative discipline over the Deputy Ombudsman and Special Prosecutor without in the

least diminishing the constitutional and plenary authority of the Ombudsman over all government officials and employees. Such legislative design is simply a measure of "check and balance" intended to address the lawmakers' real and valid concern that the Ombudsman and his Deputy may try to protect one another from administrative liabilities. This would not be the first instance that the Office of the President has locked horns with the Ombudsman on the matter of disciplinary jurisdiction. An earlier conflict had been settled in favor of shared authority in Hagad v. Gozo Dadole.36 In said case, the Mayor and Vice-Mayor of Mandaue City, and a member of the Sangguniang Panlungsod, were charged before the Office of the Deputy Ombudsman for the Visayas with violations of R.A. No. 3019, R.A. No. 6713, and the Revised Penal Code. The pivotal issue raised therein was whether the Ombudsman had been divested of his authority to conduct administrative investigations over said local elective officials by virtue of the subsequent enactment of the Local Government Code of 1991 (R.A. No. 7160), the pertinent provision of which states: Sec. 61. Form and Filing of Administrative Complaints.- A verified complaint against any erring local elective official shall be prepared as follows: (a) A complaint against any elective official of a province, a highly urbanized city, an independent component city or component city shall be filed before the Office of the President. The Court resolved said issue in the negative, upholding the ratiocination of the Solicitor General that R.A. No. 7160 should be viewed as having conferred on the Office of the President, but not on an exclusive basis, disciplinary authority over local elective officials. Despite the fact that R.A. No. 7160 was the more recent expression of legislative will, no repeal of pertinent provisions in the Ombudsman Act was inferred therefrom. Thus said the Court: Indeed, there is nothing in the Local Government Code to indicate that it has repealed, whether expressly or impliedly, the pertinent provisions of the Ombudsman Act. The two statutes on the specific

matter in question are not so inconsistent, let alone irreconcilable, as to compel us to only uphold one and strike down the other. Well settled is the rule that repeals of laws by implication are not favored, and that courts must generally assume their congruent application. The two laws must be absolutely incompatible, and a clear finding thereof must surface, before the inference of implied repeal may be drawn. The rule is expressed in the maxim, interpretare et concordare legibus est optimus interpretendi, i.e., every statute must be so interpreted and brought into accord with other laws as to form a uniform system of jurisprudence. The fundament is that the legislature should be presumed to have known the existing laws on the subject and not to have enacted conflicting statutes. Hence, all doubts must be resolved against any implied repeal, and all efforts should be exerted in order to harmonize and give effect to all laws on the subject.37 While Hagad v. Gozo Dadole38 upheld the plenary power of the Office of the Ombudsman to discipline elective officials over the same disciplinary authority of the President under R.A. No. 7160, the more recent case of the Office of the Ombudsman v. Delijero39 tempered the exercise by the Ombudsman of such plenary power invoking Section 23(2)40 of R.A. No. 6770, which gives the Ombudsman the option to "refer certain complaints to the proper disciplinary authority for the institution of appropriate administrative proceedings against erring public officers or employees." The Court underscored therein the clear legislative intent of imposing "a standard and a separate set of procedural requirements in connection with administrative proceedings involving public school teachers"41 with the enactment of R.A. No. 4670, otherwise known as "The Magna Carta for Public School Teachers." It thus declared that, while the Ombudsman's administrative disciplinary authority over a public school teacher is concurrent with the proper investigating committee of the Department of Education, it would have been more prudent under the circumstances for the Ombudsman to have referred to the DECS the complaint against the public school teacher. Unquestionably, the Ombudsman is possessed of jurisdiction to discipline his own people and mete out administrative sanctions upon them, including the extreme penalty of dismissal from the service. However, it is equally without question that the President has

concurrent authority with respect to removal from office of the Deputy Ombudsman and Special Prosecutor, albeit under specified conditions. Considering the principles attending concurrence of jurisdiction where the Office of the President was the first to initiate a case against petitioner Gonzales, prudence should have prompted the Ombudsman to desist from proceeding separately against petitioner through its Internal Affairs Board, and to defer instead to the President's assumption of authority, especially when the administrative charge involved "demanding and soliciting a sum of money" which constitutes either graft and corruption or bribery, both of which are grounds reserved for the President's exercise of his authority to remove a Deputy Ombudsman. In any case, assuming that the Ombudsman's Internal Affairs Board properly conducted a subsequent and parallel administrative action against petitioner, its earlier dismissal of the charge of graft and corruption against petitioner could not have the effect of preventing the Office of the President from proceeding against petitioner upon the same ground of graft and corruption. After all, the doctrine of res judicata applies only to judicial or quasi-judicial proceedings, not to the exercise of administrative powers.42 In Montemayor v. Bundalian,43 the Court sustained the President's dismissal from service of a Regional Director of the Department of Public Works and Highways (DPWH) who was found liable for unexplained wealth upon investigation by the now defunct Philippine Commission Against Graft and Corruption (PCAGC). The Court categorically ruled therein that the prior dismissal by the Ombudsman of similar charges against said official did not operate as res judicata in the PCAGC case. By granting express statutory power to the President to remove a Deputy Ombudsman and a Special Prosecutor, Congress merely filled an obvious gap in the law. Section 9, Article XI of the 1987 Constitution confers upon the President the power to appoint the Ombudsman and his Deputies, viz: Section 9. The Ombudsman and his Deputies shall be appointed by the President from a list of at least six nominees prepared by the Judicial and Bar Council, and from a list of three nominees for every

vacancy thereafter. Such appointments shall require no confirmation. All vacancies shall be filled within three months after they occur. While the removal of the Ombudsman himself is also expressly provided for in the Constitution, which is by impeachment under Section 244 of the same Article, there is, however, no constitutional provision similarly dealing with the removal from office of a Deputy Ombudsman, or a Special Prosecutor, for that matter. By enacting Section 8(2) of R.A. 6770, Congress simply filled a gap in the law without running afoul of any provision in the Constitution or existing statutes. In fact, the Constitution itself, under Section 2, authorizes Congress to provide for the removal of all other public officers, including the Deputy Ombudsman and Special Prosecutor, who are not subject to impeachment. That the Deputies of the Ombudsman were intentionally excluded from the enumeration of impeachable officials is clear from the following deliberations45 of the Constitutional Commission, thus: MR. REGALADO. Yes, thank you. On Section 10, regarding the Ombudsman, there has been concern aired by Commissioner Rodrigo about who will see to it that the Ombudsman will perform his duties because he is something like a guardian of the government. This recalls the statement of Juvenal that while the Ombudsman is the guardian of the people, "Quis custodiet ipsos custodies", who will guard the guardians? I understand here that the Ombudsman who has the rank of a chairman of a constitutional commission is also removable only by impeachment. MR. ROMULO. That is the intention, Madam President. MR. REGALADO. Only the Ombudsman? MR. MONSOD. Only the Ombudsman. MR. REGALADO. So not his deputies, because I am concerned with the phrase "have the rank of". We know, for instance, that the City Fiscal of Manila has the rank of a justice of the Intermediate Appellate Court, and yet he is not a part of the judiciary. So I think we should clarify that also and read our discussions into the Record for purposes of the Commission and the Committee.46

xxx THE PRESIDENT. The purpose of the amendment of Commissioner Davide is not just to include the Ombudsman among those officials who have to be removed from office only onimpeachment. Is that right? MR. DAVIDE. Yes, Madam President. MR. RODRIGO. Before we vote on the amendment, may I ask a question? THE PRESIDENT. Commissioner Rodrigo is recognized. MR. RODRIGO. The Ombudsman, is this only one man? MR. DAVIDE. Only one man. MR. RODRIGO. Not including his deputies. MR. MONSOD. No.47 (Emphasis supplied) The Power of the President to Remove a Deputy Ombudsman and a Special Prosecutor is Implied from his Power to Appoint. Under the doctrine of implication, the power to appoint carries with it the power to remove.48 As a general rule, therefore, all officers appointed by the President are also removable by him.49 The exception to this is when the law expressly provides otherwise - that is, when the power to remove is expressly vested in an office or authority other than the appointing power. In some cases, the Constitution expressly separates the power to remove from the President's power to appoint. Under Section 9, Article VIII of the 1987 Constitution, the Members of the Supreme Court and judges of lower courts shall be appointed by the President. However, Members of the Supreme Court may be removed after impeachment proceedings initiated by Congress (Section 2, Article XI), while judges of lower courts may be removed only by the Supreme Court by virtue of its administrative supervision over all its personnel (Sections 6 and 11, Article VIII). The Chairpersons and Commissioners of the Civil

Service Commission Section 1(2), Article IX(B), the Commission on Elections Section 1(2), Article IX(C), and the Commission on Audit Section 1(2), Article IX(D) shall likewise be appointed by the President, but they may be removed only by impeachment (Section 2, Article XI). As priorly stated, the Ombudsman himself shall be appointed by the President (Section 9, Article XI) but may also be removed only by impeachment (Section 2, Article XI). In giving the President the power to remove a Deputy Ombudsman and Special Prosecutor, Congress simply laid down in express terms an authority that is already implied from the President's constitutional authority to appoint the aforesaid officials in the Office of the Ombudsman. The Office of the Ombudsman is charged with monumental tasks that have been generally categorized into investigatory power, prosecutorial power, public assistance, authority to inquire and obtain information and the function to adopt, institute and implement preventive measures.50 In order to ensure the effectiveness of his constitutional role, the Ombudsman was provided with an over-all deputy as well as a deputy each for Luzon, Visayas and Mindanao. However, well into the deliberations of the Constitutional Commission, a provision for the appointment of a separate deputy for the military establishment was necessitated by Commissioner Ople's lament against the rise within the armed forces of "fraternal associations outside the chain of command" which have become the common soldiers' "informal grievance machinery" against injustice, corruption and neglect in the uniformed service,51 thus: In our own Philippine Armed Forces, there has arisen in recent years a type of fraternal association outside the chain of command proposing reformist objectives. They constitute, in fact, an informal grievance machinery against injustices to the rank and file soldiery and perceive graft in higher rank and neglect of the needs of troops in combat zones. The Reform the Armed Forces Movement of RAM has kept precincts for pushing logistics to the field, the implied accusation being that most of the resources are used up in Manila instead of sent to soldiers in the field. The Guardians, the El Diablo and other organizations dominated by enlisted men function, more or less, as grievance collectors and as mutual aid societies.

This proposed amendment merely seeks to extend the office of the Ombudsman to the military establishment, just as it champions the common people against bureaucratic indifference. The Ombudsman can designate a deputy to help the ordinary foot soldier get through with his grievance to higher authorities. This deputy will, of course work in close cooperation with the Minister of National Defense because of the necessity to maintain the integrity of the chain of command. Ordinary soldiers, when they know they can turn to a military Ombudsman for their complaints, may not have to fall back on their own informal devices to obtain redress for their grievances. The Ombudsman will help raise troop morale in accordance with a major professed goal of the President and the military authorities themselves. x x x The add-on now forms part of Section 5, Article XI which reads as follows: Section 5. There is hereby created the independent Office of the Ombudsman, composed of the Ombudsman to be known as Tanodbayan, one over-all Deputy and at least one Deputy each for Luzon, Visayas and Mindanao. A separate deputy for the military establishment shall likewise be appointed. (Emphasis supplied) The integrity and effectiveness of the Deputy Ombudsman for the MOLEO as a military watchdog looking into abuses and irregularities that affect the general morale and professionalism in the military is certainly of primordial importance in relation to the President's own role asCommander-in-Chief of the Armed Forces. It would not be incongruous for Congress, therefore, to grant the President concurrent disciplinary authority over the Deputy Ombudsman for the military and other law enforcement offices. Granting the President the Power to Remove a Deputy Ombudsman does not Diminish the Independence of the Office of the Ombudsman. The claim that Section 8(2) of R.A. No. 6770 granting the President the power to remove a Deputy Ombudsman from office totally frustrates, if not resultantly negates the independence of the Office of the Ombudsman is tenuous. The independence which the Office of

the Ombudsman is vested with was intended to free it from political considerations in pursuing its constitutional mandate to be a protector of the people. What the Constitution secures for the Office of the Ombudsman is, essentially, political independence. This means nothing more than that "the terms of office, the salary, the appointments and discipline of all persons under the office" are "reasonably insulated from the whims of politicians."52 And so it was that Section 5, Article XI of the 1987 Constitution had declared the creation of the independent Office of the Ombudsman, composed of the Ombudsman and his Deputies, who are described as "protectors of the people" and constitutionally mandated to act promptly on complaints filed in any form or manner against public officials or employees of the Government Section 12, Article XI. Pertinent provisions under Article XI prescribes a term of office of seven years without reappointment Section 11, prohibits a decrease in salaries during the term of office Section 10, provides strict qualifications for the office Section 8, grants fiscal autonomy Section 14 and ensures the exercise of constitutional functions Section 12 and 13. The cloak of independence is meant to build up the Office of the Ombudsman's institutional strength to effectively function as official critic, mobilizer of government, constitutional watchdog53 and protector of the people. It certainly cannot be made to extend to wrongdoings and permit the unbridled acts of its officials to escape administrative discipline. Being aware of the constitutional imperative of shielding the Office of the Ombudsman from political influences and the discretionary acts of the executive, Congress laid down two restrictions on the President's exercise of such power of removal over a Deputy Ombudsman, namely: (1) that the removal of the Deputy Ombudsman must be for any of the grounds provided for the removal of the Ombudsman and (2) that there must be observance of due process. Reiterating the grounds for impeachment laid down in Section 2, Article XI of the 1987 Constitution, paragraph 1 of Section 8 of R.A. No. 6770 states that the Deputy Ombudsman may be removed from office for the same grounds that the Ombudsman may be removed through impeachment, namely, "culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes, or betrayal of public trust." Thus, it cannot be rightly said that giving the President the power to remove a Deputy Ombudsman, or a Special Prosecutor for that matter, would diminish or compromise the constitutional

independence of the Office of the Ombudsman. It is, precisely, a measure of protection of the independence of the Ombudsman's Deputies and Special Prosecutor in the discharge of their duties that their removal can only be had on grounds provided by law. In Espinosa v. Office of the Ombudsman,54 the Court elucidated on the nature of the Ombudsman's independence in this wise The prosecution of offenses committed by public officers is vested in the Office of the Ombudsman. To insulate the Office from outside pressure and improper influence, the Constitution as well as RA 6770 has endowed it with a wide latitude of investigatory and prosecutory powers virtually free from legislative, executive or judicial intervention. This Court consistently refrains from interfering with the exercise of its powers, and respects the initiative and independence inherent in the Ombudsman who, 'beholden to no one, acts as the champion of the people and the preserver of the integrity of public service. Petitioner Gonzales may not be removed from office where the questioned acts, falling short of constitutional standards, do not constitute betrayal of public trust. Having now settled the question concerning the validity of the President's power to remove the Deputy Ombudsman and Special Prosecutor, we now go to the substance of the administrative findings in OP Case No. 10-J-460 which led to the dismissal of herein petitioner, Deputy Ombudsman Emilio A. Gonzales, III. At the outset, the Court finds no cause for petitioner Gonzales to complain simply because the OP proceeded with the administrative case against him despite his non-attendance thereat. Petitioner was admittedly able to file an Answer in which he had interposed his defenses to the formal charge against him. Due process is satisfied when a person is notified of the charge against him and given an opportunity to explain or defend himself. In administrative proceedings, the filing of charges and giving reasonable opportunity for the person so charged to answer the accusations against him constitute the minimum requirements of due process.55 Due process is simply having the opportunity to explain one's side, or an opportunity to seek a reconsideration of the action or ruling

complained of.56 The essence of due process is that a party is afforded reasonable opportunity to be heard and to submit any evidence he may have in support of his defense.57 Mere opportunity to be heard is sufficient. As long as petitioner was given the opportunity to explain his side and present evidence, the requirements of due process are satisfactorily complied with because what the law abhors is an absolute lack of opportunity to be heard.58 Besides, petitioner only has himself to blame for limiting his defense through the filing of an Answer. He had squandered a subsequent opportunity to elucidate upon his pleaded defenses by adamantly refusing to attend the scheduled Clarificatory Conference despite notice. The OP recounted as follows It bears noting that respondent Deputy Ombudsman Gonzalez was given two separate opportunities to explain his side and answer the Formal Charge against him. In the first instance, respondent was given the opportunity to submit his answer together with his documentary evidence, which opportunity respondent actually availed of. In the second instance, this Office called a Clarificatory Conference on 8 February 2011 pursuant to respondent's express election of a formal investigation. Despite due notice, however, respondent Deputy Ombudsman refused to appear for said conference, interposing an objection based on the unfounded notion that this Office has prejudged the instant case. Respondent having been given actual and reasonable opportunity to explain or defend himself in due course, the requirement of due process has been satisfied.59 In administrative proceedings, the quantum of proof necessary for a finding of guilt is substantial evidence,60 which is more than a mere scintilla and means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.61 The fact, therefore, that petitioner later refused to participate in the hearings before the OP is not a hindrance to a finding of his culpability based on substantial evidence, which only requires that a decision must "have something upon which it is based."62 Factual findings of administrative bodies are controlling when

supported by substantial evidence.63 The OP's pronouncement of administrative accountability against petitioner and the imposition upon him of the corresponding penalty of removal from office was based on the finding of gross neglect of duty and grave misconduct in office amounting to a betrayal of public trust, which is a constitutional ground for the removal by impeachment of the Ombudsman (Section 2, Article XI, 1987 Constitution), and a statutory ground for the President to remove from office a Deputy Ombudsman and a Special Prosecutor Section 8(2) of the Ombudsman Act. The OP held that petitioner's want of care and wrongful conduct consisted of his unexplained action in directing the PNP-NCR to elevate P/S Insp. Mendoza's case records to his office; his failure to verify the basis for requesting the Ombudsman to take over the case; his pronouncement of administrative liability and imposition of the extreme penalty of dismissal on P/S Insp. Mendoza based upon an unverified complaint-affidavit; his inordinate haste in implementing P/S Insp. Mendoza's dismissal notwithstanding the latter's nonreceipt of his copy of the Decision and the subsequent filing of a motion for reconsideration; and his apparent unconcern that the pendency of the motion for reconsideration for more than five months had deprived P/S Insp. Mendoza of available remedies against the immediate implementation of the Decision dismissing him from the service. Thus, taking into consideration the factual determinations of the IIRC, the allegations and evidence of petitioner in his Answer as well as other documentary evidence, the OP concluded that: (1) petitioner failed to supervise his subordinates to act with dispatch on the draft resolution of P/S Insp. Mendoza's motion for reconsideration and thereby caused undue prejudice to P/S Insp. Mendoza by effectively depriving the latter of the right to challenge the dismissal before the courts and prevent its immediate execution, and (2) petitioner showed undue interest by having P/S Insp. Mendoza's case endorsed to the Office of the Ombudsman and resolving the same against P/S Insp. Mendoza on the basis of the unverified complaint-affidavit of the alleged victim Christian Kalaw. The invariable rule is that administrative decisions in matters within the executive jurisdiction can only be set aside on proof of gross

abuse of discretion, fraud, or error of law.64 In the instant case, while the evidence may show some amount of wrongdoing on the part of petitioner, the Court seriously doubts the correctness of the OP's conclusion that the imputed acts amount to gross neglect of duty and grave misconduct constitutive of betrayal of public trust. To say that petitioner's offenses, as they factually appear, weigh heavily enough to constitute betrayal of public trust would be to ignore the significance of the legislature's intent in prescribing the removal of the Deputy Ombudsman or the Special Prosecutor for causes that, theretofore, had been reserved only for the most serious violations that justify the removal by impeachment of the highest officials of the land. Would every negligent act or misconduct in the performance of a Deputy Ombudsman's duties constitute betrayal of public trust warranting immediate removal from office? The question calls for a deeper, circumspective look at the nature of the grounds for the removal of a Deputy Ombudsman and a Special Prosecutor vis-a-vis common administrative offenses. Betrayal of public trust is a new ground for impeachment under the 1987 Constitution added to the existing grounds of culpable violation of the Constitution, treason, bribery, graft and corruption and other high crimes. While it was deemed broad enough to cover any violation of the oath of office,65 the impreciseness of its definition also created apprehension that "such an overarching standard may be too broad and may be subject to abuse and arbitrary exercise by the legislature."66 Indeed, the catch-all phrase betrayal of public trust that referred to "all acts not punishable by statutes as penal offenses but, nonetheless, render the officer unfit to continue in office"67 could be easily utilized for every conceivable misconduct or negligence in office. However, deliberating on some workable standard by which the ground could be reasonably interpreted, the Constitutional Commission recognized that human error and good faith precluded an adverse conclusion. MR. VILLACORTA: x x x One last matter with respect to the use of the words "betrayal of public trust" as embodying a ground for impeachment that has been raised by the Honorable Regalado. I am not a lawyer so I can anticipate the difficulties that a layman may

encounter in understanding this provision and also the possible abuses that the legislature can commit in interpreting this phrase. It is to be noted that this ground was also suggested in the 1971 Constitutional Convention. A review of the Journals of that Convention will show that it was not included; it was construed as encompassing acts which are just short of being criminal but constitute gross faithlessness against public trust, tyrannical abuse of power, inexcusable negligence of duty, favoritism, and gross exercise of discretionary powers. I understand from the earlier discussions that these constitute violations of the oath of office, and also I heard the Honorable Davide say that even the criminal acts that were enumerated in the earlier 1973 provision on this matter constitute betrayal of public trust as well. In order to avoid confusion, would it not be clearer to stick to the wording of Section 2 which reads: "may be removed from office on impeachment for and conviction of, culpable violation of the Constitution, treason, bribery, and other high crimes, graft and corruption or VIOLATION OF HIS OATH OF OFFICE", because if betrayal of public trust encompasses the earlier acts that were enumerated, then it would behoove us to be equally clear about this last provision or phrase. MR. NOLLEDO: x x x I think we will miss a golden opportunity if we fail to adopt the words "betrayal of public trust" in the 1986 Constitution. But I would like him to know that we are amenable to any possible amendment. Besides, I think plain error of judgment, where circumstances may indicate that there is good faith, to my mind, will not constitute betrayal of public trust if that statement will allay the fears of difficulty in interpreting the term."68 (Emphasis supplied) The Constitutional Commission eventually found it reasonably acceptable for the phrase betrayal of public trust to refer to "acts which are just short of being criminal but constitute gross faithlessness against public trust, tyrannical abuse of power, inexcusable negligence of duty, favoritism, and gross exercise of discretionary powers."69 In other words, acts that should constitute betrayal of public trust as to warrant removal from office may be less than criminal but must be attended by bad faith and of such gravity and seriousness as the other grounds for impeachment.

A Deputy Ombudsman and a Special Prosecutor are not impeachable officers. However, by providing for their removal from office on the same grounds as removal by impeachment, the legislature could not have intended to redefine constitutional standards of culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes, as well as betrayal of public trust, and apply them less stringently. Hence, where betrayal of public trust, for purposes of impeachment, was not intended to cover all kinds of official wrongdoing and plain errors of judgment, this should remain true even for purposes of removing a Deputy Ombudsman and Special Prosecutor from office. Hence, the fact that the grounds for impeachment have been made statutory grounds for the removal by the President of a Deputy Ombudsman and Special Prosecutor cannot diminish the seriousness of their nature nor the acuity of their scope. Betrayal of public trust could not suddenly "overreach" to cover acts that are not vicious or malevolent on the same level as the other grounds for impeachment. The tragic hostage-taking incident was the result of a confluence of several unfortunate events including system failure of government response. It cannot be solely attributed then to what petitioner Gonzales may have negligently failed to do for the quick, fair and complete resolution of the case, or to his error of judgment in the disposition thereof. Neither should petitioner's official acts in the resolution of P/S Insp. Mendoza's case be judged based upon the resulting deaths at the Quirino Grandstand. The failure to immediately act upon a party's requests for an early resolution of his case is not, by itself, gross neglect of duty amounting to betrayal of public trust. Records show that petitioner took considerably less time to act upon the draft resolution after the same was submitted for his appropriate action compared to the length of time that said draft remained pending and unacted upon in the Office of Ombudsman Merceditas N. Gutierrez. He reviewed and denied P/S Insp. Mendoza's motion for reconsideration within nine (9) calendar days reckoned from the time the draft resolution was submitted to him on April 27, 2010 until he forwarded his recommendation to the Office of Ombudsman Gutierrez on May 6, 2010 for the latter's final action. Clearly, the release of any final order on the case was no longer in his hands. Even if there was inordinate delay in the resolution of P/S Insp.

Mendoza's motion and an unexplained failure on petitioner's part to supervise his subordinates in its prompt disposition, the same cannot be considered a vicious and malevolent act warranting his removal for betrayal of public trust. More so because the neglect imputed upon petitioner appears to be an isolated case. Similarly, petitioner's act of directing the PNP-IAS to endorse P/S Insp. Mendoza's case to the Ombudsman without citing any reason therefor cannot, by itself, be considered a manifestation of his undue interest in the case that would amount to wrongful or unlawful conduct. After all, taking cognizance of cases upon the request of concerned agencies or private parties is part and parcel of the constitutional mandate of the Office of the Ombudsman to be the "champion of the people." The factual circumstances that the case was turned over to the Office of the Ombudsman upon petitioner's request; that administrative liability was pronounced against P/S Insp. Mendoza even without the private complainant verifying the truth of his statements; that the decision was immediately implemented; or that the motion for reconsideration thereof remained pending for more than nine months cannot be simply taken as evidence of petitioner's undue interest in the case considering the lack of evidence of any personal grudge, social ties or business affiliation with any of the parties to the case that could have impelled him to act as he did. There was likewise no evidence at all of any bribery that took place, or of any corrupt intention or questionable motivation. Accordingly, the OP's pronouncement of administrative accountability against petitioner and the imposition upon him of the corresponding penalty of dismissal must be reversed and set aside, as the findings of neglect of duty or misconduct in office do not amount to a betrayal of public trust. Hence, the President, while he may be vested with authority, cannot order the removal of petitioner as Deputy Ombudsman, there being no intentional wrongdoing of the grave and serious kind amounting to a betrayal of public trust. This is not to say, however, that petitioner is relieved of all liability for his acts showing less than diligent performance of official duties. Although the administrative acts imputed to petitioner fall short of the constitutional standard of betrayal of public trust, considering the OP's factual findings of negligence and misconduct against petitioner,

the Court deems it appropriate to refer the case to the Office of the Ombudsman for further investigation of the charges in OP Case No. 10-J-460 and the imposition of the corresponding administrative sanctions, if any. Inasmuch as there is as yet no existing ground justifying his removal from office, petitioner is entitled to reinstatement to his former position as Deputy Ombudsman and to the payment of backwages and benefits corresponding to the period of his suspension. The Office of the President is vested with statutory authority to proceed administratively against petitioner Barreras-Sulit to determine the existence of any of the grounds for her removal from office as provided for under the Constitution and the Ombudsman Act. Petitioner Barreras-Sulit, on the other hand, has been resisting the President's authority to remove her from office upon the averment that without the Sandiganbayan's final approval and judgment on the basis of the PLEBARA, it would be premature to charge her with acts and/or omissions "tantamount to culpable violations of the Constitution and betrayal of public trust," which are grounds for removal from office under Section 8, paragraph (2) of the Ombudsman Act of 1989; and which also constitute a violation of Section 3, paragraph (e) of Republic Act No. 3019 (Anti-Graft and Corrupt Practices Act) - causing undue injury to the Government or giving any private party any unwarranted benefits, advantage or preference through manifest partiality, evident bad faith or gross inexcusable negligence. With reference to the doctrine of prejudicial procedural antecedent, petitioner Barreras-Sulit asserts that the propriety of taking and continuing to take administrative disciplinary proceeding against her must depend on the final disposition by the Sandiganbayan of the PLEBARA, explaining that if the Sandiganbayan would uphold the PLEBARA, there would no longer be any cause of complaint against her; if not, then the situation becomes ripe for the determination of her failings. The argument will not hold water. The incidents that have taken place subsequent to the submission in court of the PLEBARA shows that the PLEBARA has been practically approved, and that the only thing

which remains to be done by the Sandiganbayan is to promulgate a judgment imposing the proper sentence on the accused Major General Garcia based on his new pleas to lesser offenses. On May 4, 2010, the Sandiganbayan issued a resolution declaring that the change of plea under the PLEBARA was warranted and that it complied with jurisprudential guidelines. The Sandiganbayan, thereafter, directed the accused Major General Garcia to immediately convey in favor of the State all the properties, both real and personal, enumerated therein. On August 11, 2010, the Sandiganbayan issued a resolution, which, in order to put into effect the reversion of Major General Garcia's ill-gotten properties, ordered the corresponding government agencies to cause the transfer of ownership of said properties to the Republic of the Philippines. In the meantime, the Office of the Special Prosecutor (OSP) informed the Sandiganbayan that an Order70 had been issued by the Regional Trial Court of Manila, Branch 21 on November 5, 2010 allowing the transfer of the accused's frozen accounts to the Republic of the Philippines pursuant to the terms of the PLEBARA as approved by the Sandiganbayan. Immediately after the OSP informed the Sandiganbayan that its May 4, 2010 Resolution had been substantially complied with, Major General Garcia manifested71 to the Sandiganbayan on November 19, 2010 his readiness for sentencing and for the withdrawal of the criminal information against his wife and two sons. Major General Garcia's Motion to Dismiss,72 dated December 16, 2010 and filed with the Sandiganbayan, reads: 1.0 The Co-Accused were impleaded under the theory of conspiracy with the Principal Accused MGen. Carlos F. Garcia (AFP Ret.), (Principal Accused) with the allegation that the act of one is the act of the others. Therefore, with the approval by the Honorable Court of the Plea Bargaining Agreement executed by the Principal Accused, the charges against the Co-Accused should likewise be dismissed since the charges against them are anchored on the same charges against the Principal Accused. On December 16, 2010, the Sandiganbayan allowed accused Major General Garcia to plead guilty to the lesser offenses of direct bribery and violation of Section 4(b), R.A. No. 9160, as amended. Upon Major General Garcia's motion, and with the express conformity of the OSP, the Sandiganbayan allowed him to post bail in both cases,

each at a measly amount of P 30,000.00. The approval or disapproval of the PLEBARA by the Sandiganbayan is of no consequence to an administrative finding of liability against petitioner Barreras-Sulit. While the court's determination of the propriety of a plea bargain is on the basis of the existing prosecution evidence on record, the disciplinary authority's determination of the prosecutor's administrative liability is based on whether the plea bargain is consistent with the conscientious consideration of the government's best interest and the diligent and efficient performance by the prosecution of its public duty to prosecute crimes against the State. Consequently, the disciplining authority's finding of ineptitude, neglect or willfulness on the part of the prosecution, more particularly petitioner Special Prosecutor Barreras-Sulit, in failing to pursue or build a strong case for the government or, in this case, entering into an agreement which the government finds "grossly disadvantageous," could result in administrative liability, notwithstanding court approval of the plea bargaining agreement entered into. Plea bargaining is a process in criminal cases whereby the accused and the prosecution work out a mutually satisfactory disposition of the case subject to court approval.73 The essence of a plea bargaining agreement is the allowance of an accused to plead guilty to a lesser offense than that charged against him. Section 2, Rule 116 of the Revised Rules of Criminal Procedure provides the procedure therefor, to wit: SEC. 2. Plea of guilty to a lesser offense. -- At arraignment, the accused, with the consent of the offended party and the prosecutor, may be allowed by the trial court to plead guilty to a lesser offense which is necessarily included in the offense charged. After arraignment but before trial, the accused may still be allowed to plead guilty to said lesser offense after withdrawing his plea of not guilty. No amendment of the complaint or information is necessary. (Sec. 4, Cir. 38-98) Plea bargaining is allowable when the prosecution does not have sufficient evidence to establish the guilt of the accused of the crime charged.74 However, if the basis for the allowance of a plea bargain in

this case is the evidence on record, then it is significant to state that in its earlier Resolution75 promulgated on January 7, 2010, the Sandiganbayan had evaluated the testimonies of twenty (20) prosecution witnesses and declared that "the conglomeration of evidence presented by the prosecution is viewed by the Court to be of strong character that militates against the grant of bail." Notwithstanding this earlier ruling by the Sandiganbayan, the OSP, unexplainably, chose to plea bargain with the accused Major General Garcia as if its evidence were suddenly insufficient to secure a conviction. At this juncture, it is not amiss to emphasize that the "standard of strong evidence of guilt which is sufficient to deny bail to an accused is markedly higher than the standard of judicial probable cause which is sufficient to initiate a criminal case."76 Hence, in light of the apparently strong case against accused Major General Garcia, the disciplining authority would be hard-pressed not to look into the whys and wherefores of the prosecution's turnabout in the case. The Court need not touch further upon the substantial matters that are the subject of the pending administrative proceeding against petitioner Barreras-Sulit and are, thus, better left to the complete and effective resolution of the administrative case before the Office of the President. The challenge to the constitutionality of Section 8(2) of the Ombudsman Act has, nonetheless, failed to obtain the necessary votes to invalidate the law, thus, keeping said provision part of the law of the land. To recall, these cases involve two distinct issues: (a) the constitutionality of Section 8(2) of the Ombudsman Act; and (b) the validity of the administrative action of removal taken against petitioner Gonzales. While the Court voted unanimously to reverse the decision of the OP removing petitioner Gonzales from office, it was equally divided in its opinion on the constitutionality of the assailed statutory provision in its two deliberations held on April 17, 2012 and September 4, 2012. There being no majority vote to invalidate the law, the Court, therefore, dismisses the challenge to the constitutionality of Section 8(2) of the Ombudsman Act in accordance with Section 2(d), Rule 12 of the Internal Rules of the Court. Indeed, Section 4(2), Article VIII of the 1987 Constitution requires the

vote of the majority of the Members of the Court actually taking part in the deliberation to sustain any challenge to the constitutionality or validity of a statute or any of its provisions. WHEREFORE, in G.R. No. 196231, the decision of the Office of the President in OP Case No. 10-J-460 is REVERSED and SET ASIDE. Petitioner Emilio A. Gonzales III is ordered REINSTATED with payment of backwages corresponding to the period of suspension effective immediately, even as the Office of the Ombudsman is directed to proceed with the investigation in connection with the above case against petitioner. In G.R. No. 196232, We AFFIRM the continuation of OP-DC Case No. 11-B-003 against Special Prosecutor Wendell Barreras-Sulit for alleged acts and omissions tantamount to culpable violation of the Constitution and a betrayal of public trust, in accordance with Section 8(2) of the Ombudsman Act of 1989. The challenge to the constitutionality of Section 8(2) of the Ombudsman Act is hereby DENIED. SO ORDERED. ESTELA M. PERLAS-BERNABE Associate Justice WE CONCUR: MARIA LOURDES P. A. SERENO Chief Justice ANTONIO T. CARPIO Associate Justice TERESITA J. LEONARDO-DE CASTRO Associate Justice DIOSDADO M. PERALTA Associate Justice MARIANO C. DEL CASTILLO Associate Justice MARTIN S. VILLARAMA, JR. Associate Justice JOSE CATRAL MENDOZA Associate Justice CERTIFICATION

PRESBITERO J. VELA Associate Justic ARTURO D. BRI Associate Justic LUCAS P. BERSA Associate Justic ROBERTO A. AB Associate Justic JOSE PORTUGAL P Associate Justic BIENVENIDO L. RE Associate Justic

I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court. Ma. LOURDES P. A. SERENO Chief Justice Footnotes
1

Annex "A," rollo ( G.R. No. 196231), pp. 72-86. Annex "A," rollo (G.R. No. 196232), p. 26. Annex "C," id. at 33.

Val Rodriguez, Grandstand Carnage, The Philippine Star, August 24, 2010 <http://www.philstar.com/Article.aspx?articleId=605631&publicationS ubCategoryId=63> (visited January 5, 2011).
5

Charge Sheet, rollo (G.R. No. 196231), p. 87. Id. at 231. Resolution dated August 26, 2008, id. at 233-235. Id. at 128. Id. at 153-158. Id. at 203-216. Annex "F," id. at 132-136. Annex "N," id. at 244-249.

10

11

12

13

The President issued Joint Department Order No. 01-2010 creating the IIRC.
14

As quoted in the Petition in G.R. No. 196231, rollo, pp. 17-20. Annex "Q," id. at 322.

15

16

R. A. No. 3019. Rollo (G.R. No. 196231), pp. 324-346. R.A. No. 6713. Annex "W," rollo (G.R. No. 196231), pp. 386-408. Annex "S," id. at 377. Petition, id. at 8. Annex "V," id. at 380-383. Annex "A," id. at 72-86. Annex "B," rollo (G.R. No. 196232), pp. 27-30. Petition, rollo (G.R. No. 196231), pp. 23-24. Petition, rollo (G.R. No. 196232), p. 10. Ledesma v. Court of Appeals, 503 Phil. 396 (2005).

17

18

19

20

21

22

23

24

25

26

27

28

Office of the Ombudsman v. Masing and Tayactac, G.R. No. 165416, January 22, 2008, 542 SCRA 253.
29

De Leon, 2 Philippine Constitutional Law Principles and Cases, 855 (2004).

30

Bernas, S.J., The Intent of the 1986 Constitution Writers, 771 (1995).
31

Id. at 143-144.

32

Office of the Ombudsman v. Delijero, Jr., G.R. No. 172635, October 20, 2010, 634 SCRA 135.
33

Malaria Employees and Workers Association of the Philippines, Inc. (MEWAP) v. Executive Secretary Romulo, G.R. No. 160093, July 31, 2007, 528 SCRA 673, 682.

34

Philippine International Trading Corporation v. Commission on Audit, G.R. No. 183517, June 22, 2010, 621 SCRA 461, citing Land Bank of the Philippines v. AMS Farming Corporation, 569 SCRA 154, 183 (2008) and Mactan-Cebu International Airport Authority v. Urgello, 520 SCRA 515, 535 (2007).
35

See Comment of the Office of the Solicitor General, rollo (G.R. No. 196231), pp. 709-710.
36

321 Phil. 604 (1995). Id. at 613-614 Id. Supra note 31. Section 23. Formal Investigation.-

37

38

39

40

xxxx (2) At its option, the Office of the Ombudsman may refer certain complaints to the proper disciplinary authority for the institution of appropriate administrative proceedings against erring public officers or employees, which shall be determined within the period prescribed in the civil service law. x x x
41

Supra note 31, at 146.

42

Montemayor v. Bundalian, G.R. No. 149335, July 1, 2003, 405 SCRA 264.
43

Id.

44

Sec.2. The President, the Vice-President, the Members of the Supreme Court, the Members of the Constitutional Commissions, and the Ombudsman may be removed from office, on impeachment for, and conviction of, culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes, or betrayal of public trust. All other public officers and employees may be removed from office as provided by law, but not by impeachment.

45

As quoted in Office of the Ombudsman v. Court of Appeals, G.R. No. 146486, 493 Phil. 63, 77-80 (2005).
46

Records of the 1986 Constitutional Commission, Vol. II, July 26, 1986, pp. 273-274.
47

Records of the 1986 Constitutional Commission, Vol. II, July 26, 1986, p. 305.
48

Aguirre, Jr. v. De Castro, 378 Phil. 714 (1999). Cruz, Carlo L., The Law of Public Officers, 154-155 (1992).

49

50

Sec. 13, Article XI; De Leon, Hector, 2 Philippine Constitutional Law, 860 (2004), citing Concerned Officials of the MWSS v. Velasquez, 310 Phil. 549 (1995) and Garcia-Rueda v. Pascasio, 344 Phil. 323 (1997).
51

Bernas, S.J., The Intent of the 1986 Constitution Writers, 773-774 (1995).
52

De Leon, 2 Philippine Constitutional Law Principles and Cases, 857 (2004), citing Del. R.D. ROBLES, The Ombudsman, in C.R. Montejo, On the 1973 Constitution, 232.
53

Id. at 859-860.

54

397 Phil. 829, 831 (2000), cited in Angeles v. Desierto, 532 Phil. 647, 656 (2006).
55

Cayago v. Lina, 489 Phil. 735 (2005). Libres v. NLRC, 367 Phil. 180 (1999). Concerned Officials of MWSS v. Vasquez, 310 Phil. 549 (1995).

56

57

58

AMA Computer College-East Rizal v. Ignacio, G.R. No. 178520, June 23, 2009, 590 SCRA 633, 654 citing Casimiro v. Tandog, 498 Phil. 660, 666 (2005).
59

OP Decision, p. 7, rollo (G.R. No. 196231), p. 78.

60

Funa, Dennis B., The Law on the Administrative Accountability of Public Officers, 509 (2010), citing Office of the Court Administrator v. Bucoy, A.M. No. P-93-953, August 25, 1994, 235 SCRA 588; Tolentino v. CA, 234 Phil. 28 (1987), Biak na Bato Mining Co. v. Tanco, 271 Phil. 339 (1991).
61

Rules of Court, Rule 133, Sec.5; Nicolas v. Desierto, 488 Phil. 158 (2004); Ang Tibay v. Court of Industrial Relations, 69 Phil 635 (1940).
62

Supra note 60, at 511. Dadubo v. CSC, G.R. No. 106498, June 28, 1993, 223 SCRA 747.

63

64

Assistant Executive Secretary for Legal Affairs of the Office of the President v. Court of Appeals, 251 Phil. 26 (1989), citing Lovina v. Moreno, 118 Phil. 1401 (1963).
65

Joaquin G. Bernas, The 1987 Constitution of the Philippines: A Commentary, 992 (1996).
66

Records of the 1986 Constitutional Commission, Vol. II, p. 286. Supra note at 65.

67

68

Records of the 1986 Constitutional Commission, Vol. II, pp. 283284.

69

Id. at 286.

70

Annex "2" of the Supplemental Comment on the Petition, rollo (G.R. No. 196232), p. 212.
71

Annex "1," id. at 210-211 Annex "3," id. at 213-215.

72

73

Daan v. Sandiganbayan, G.R. Nos. 163972-77, March 28, 2008, 550 SCRA 233, citing People v. Villarama, Jr., 210 SCRA 246, 251252 (1992).
74

People v. Villarama, Jr., G.R. No. 99287, June 23, 1992, 210 SCRA 246; People v. Parohinog, 185 Phil. 266 (1980); People v.