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G.R. No.

92024 November 9, 1990


CONGRESSMAN ENRIQUE T. GARCIA (Second District of Bataan), petitioner,
vs.
THE BOARD OF INVESTMENTS, THE DEPARTMENT OF TRADE AND INDUSTRY,
LUZON PETROCHEMICAL CORPORATION, and PILIPINAS SHELL CORPORATION,
respondents.

FACTS:

The case is a sequel of the earlier case involving also both parties. This is actually a
petition against the Board of Investments (BOI)/Department of Trade and Industry (DTI)
who approved the transfer of the site of the proposed petrochemical plant from Bataan
to Batangas and the shift of feedstock for that plant from naphtha only to naphtha and/or
liquefied petroleum gas (LPG).

Luzon Petrochemical Corporation the then Bataan Petrochemical Corporation, a
corporation formed by Taiwanese investors was granted by the BOI to have its plant site
for its products. The said plant was to be based on Bataan.
BPC was given pioneer status and accorded fiscal and other incentives by BOI, like: (1)
exemption from taxes on raw materials, (2) repatriation of the entire proceeds of
liquidation investments in currency originally made and at the exchange rate obtaining
at the time of repatriation; and (3) remittance of earnings on investments. As additional
incentive, the House of Representatives approved a bill introduced by the petitioner
eliminating the 48% ad valorem tax on naphtha if and when it is used as raw materials
in the petrochemical plant.
However, after one year of operation, the corporation sent a letter to Trade Secretary
Jose Concepcion advising him of BPC's desire to amend the original registration
certification of its project by changing the job site from Limay, Bataan, to Batangas. The
reason adduced for the transfer was the insurgency and unstable labor situation, and
the presence in Batangas of a huge liquefied petroleum gas (LPG) depot owned by the
Philippine Shell Corporation.
The petitioner vigorously opposed the proposal and no less than President Aquino
expressed her preference that the plant be established in Bataan in a conference with
the Taiwanese investors, the Secretary of National Defense and The Chief of Staff of
the Armed Forces.
Despite speeches in the Senate and House opposing the Transfer of the project to
Batangas, BPC filed on April of the same year its request for approval of the
amendments. Its application is as follows: "(l) increasing the investment amount from
US $220 million to US $320 million; (2) increasing the production capacity of its naphtha
cracker, polythylene plant and polypropylene plant; (3) changing the feedstock from
naphtha only to "naphtha and/or liquefied petroleum gas;" and (4) transferring the job
site from Limay, Bataan, to Batangas. The BOI and DTI granted the said application,
statting among others that the investor has the final choice as to where to have their
plant site because they are the ones who risk capital for the project.

ISSUES:

Whether or not the BOI committed a grave abuse of discretion in yielding to the
application of the investors considering that national interest was over-looked.
Whether or not the BOI erred in raising that the investor has the final choice.

Held:

The Supreme Court found the BOI to have committed grave abuse of discretion in this
case, and ordered the original application of the BPC to have its plant site in Bataan and
the product naphta as feedstock maintained.

The ponente, Justice Gutierrez, Jr., first stated the Courts judicial power to settle actual
controversies as provided for by Section 1 of Article VIII in our 1987 Constitution before
he wrote the reasons as to how the Court arrived to its conclusion. He mentioned that
nothing is shown to justify the BOIs action in letting the investors decide on an issue
which, if handled by our own government, could have been very beneficial to the State,
as he remembered the word of a great Filipino leader, to wit: ..he would not mind
having a government run like hell by Filipinos than one subservient to foreign dictation.

Justice Grio Aquino, in her dissenting opinion, argued that the petition was not well-
taken because the 1987 Investment Code does not prohibit the registration of a certain
project, as well as any decision of the BOI regarding the amended application. She
stated that the fact that petitioner disagrees with BOI does not make the BOI wrong in
its decision, and that petitioner should have appealed to the President of the country
and not to the Court, as provided for by Section 36 of the 1987 Investment Code.