DIPLOMATIC POWER

COMMISIONER OF CUSTOMS VS. EASTERN SEA TRADING

3 SCRA 351 Political Law Constitutional Law Treaties vs Executive
Agreements
Eastern Sea Trading (EST) was a shipping company which imports from Japan
onion and garlic into the Philippines. In 1956, the Commissioner of Customs ordered
the seizure and forfeiture of the import goods because EST was not able to comply
with Central Bank Circulars 44 and 45. The said circulars were pursuant to
Executive Order 328. On the other hand, EO 328 was the implementing law of the
Trades and Financial Agreements, an executive agreement, entered into between
the Philippines and Japan. The said executive agreement states, among others, that
all import transactions between Japan and the Philippines should be invoiced in
dollar. In this case, the said items imported by EST from Japan were not invoiced in
dollar.
EST questioned the validity of the said EO averring that the executive agreement
that the EO was implementing was never concurred upon by the Senate. The issue
was elevated to the Court of Tax Appeals and the latter ruled in favor of EST. The
Commissioner appealed.
ISSUE: Whether or not the Executive Agreement is subject to the concurrence
by the Senate.
HELD: No, Executive Agreements are not like treaties which are subject to the
concurrence of at least 2/3 of the members of the Senate. Agreements concluded by
the President which fall short of treaties are commonly referred to as executive
agreements and are no less common in our scheme of government than are the
more formal instruments treaties and conventions. They sometimes take the form
of exchanges of notes and at other times that of more formal documents
denominated agreements or protocols.
The point where ordinary correspondence between this and other governments ends
and agreements whether denominated executive agreements or exchanges of
notes or otherwise begin, may sometimes be difficult of ready ascertainment. It
would be useless to undertake to discuss here the large variety of executive
agreements as such, concluded from time to time. Hundreds of executive
agreements, other than those entered into under the trade- agreements act, have

been negotiated with foreign governments. . . . It would seem to be sufficient, in

order to show that the trade agreements under the act of 1934 are not anomalous in
character, that they are not treaties, and that they have abundant precedent in our
history, to refer to certain classes of agreements heretofore entered into by the
Executive without the approval of the Senate.
They cover such subjects as the inspection of vessels, navigation dues, income tax
on shipping profits, the admission of civil aircraft, customs matters, and commercial
relations generally, international claims, postal matters, the registration of trademarks and copyrights, etc. Some of them were concluded not by specific
congressional authorization but in conformity with policies declared in acts of
Congress with respect to the general subject matter, such as tariff acts; while still
others, particularly those with respect to the settlement of claims against foreign
governments, were concluded independently of any legislation.

Case Digest: G.R. No. 138570. October 10,

2000. 342 SCRA 449
BAYAN (Bagong Alyansang Makabayan), a Junk VFA Movement, Bishop Tomas
Millamena (Iglesia Filipina Independiente), Bishop Elmer Bolocan (United Church of
Christ of the Phil.), Dr. Reynaldo Legasca, Md, Kilusang Mambubukid Ng Pilipinas,
Kilusang Mayo Uno, Gabriela, Prolabor, and The Public Interest Law Center, petitioners,
vs. Executive Secretary Ronaldo Zamora, Foreign Affairs Secretary Domingo Siazon,
Defense Secretary Orlando Mercado, Brig. Gen. Alexander Aguirre, Senate President
Marcelo Fernan, Senator Franklin Drilon, Senator Blas Ople, Senator Rodolfo Biazon,
And Senator Francisco Tatad, respondents.
Facts: On March 14, 1947, the Philippines and the United States of America forged a
Military Bases Agreement which formalized, among others, the use of installations in the
Philippine territory by United States military personnel. In view of the impending
expiration of the RP-US Military Bases Agreement in 1991, the Philippines and the
United States negotiated for a possible extension of the military bases agreement. On
September 16, 1991, the Philippine Senate rejected the proposed RP-US Treaty of
Friendship, Cooperation and Security which, in effect, would have extended the
presence of US military bases in the Philippines. On July 18, 1997, the United States
panel, headed by US Defense Deputy Assistant Secretary for Asia Pacific Kurt
Campbell, met with the Philippine panel, headed by Foreign Affairs Undersecretary
Rodolfo Severino Jr., to exchange notes on the complementing strategic interests of
the United States and the Philippines in the Asia-Pacific region. Both sides discussed,
among other things, the possible elements of the Visiting Forces Agreement (VFA for

brevity). Thereafter, then President Fidel V. Ramos approved the VFA, which was
respectively signed by public respondent Secretary Siazon and Unites States
Ambassador Thomas Hubbard. On October 5, 1998, President Joseph E. Estrada,
through respondent Secretary of Foreign Affairs, ratified the VFA. On October 6, 1998,
the President, acting through respondent Executive Secretary Ronaldo Zamora,
officially transmitted to the Senate of the Philippines, the Instrument of Ratification, the
letter of the President and the VFA, for concurrence pursuant to Section 21, Article VII of
the 1987 Constitution
Issues (justiciable controversy): (1) Whether or not petitioners have legal standing as
concerned citizens, taxpayers, or legislators to question the constitutionality of the VFA;
(2) whether the VFA is governed by the provisions of Section 21, Article VII or of Section
25, Article XVIII of the Constitution; (3) and whether or not the Supreme Court has
jurisdiction.
Ruling: (1) No. Petitioners failed to show that they have sustained, or are in danger of
sustaining any direct injury as a result of the enforcement of the VFA. As taxpayers,
petitioners have not established that the VFA involves the exercise by Congress of its
taxing or spending powers. On this point, it bears stressing that a taxpayers suit refers
to a case where the act complained of directly involves the illegal disbursement of public
funds derived from taxation.
(2) Yes.The fact that the President referred the VFA to the Senate under Section 21,
Article VII, and that the Senate extended its concurrence under the same provision, is
immaterial. For in either case, whether under Section 21, Article VII or Section 25,
Article XVIII, the fundamental law is crystalline that the concurrence of the Senate is
mandatory to comply with the strict constitutional requirements.
(3) No. In fine, absent any clear showing of grave abuse of discretion on the part of
respondents, the Court as the final arbiter of legal controversies and staunch sentinel of
the rights of the people is then without power to conduct an incursion and meddle with
such affairs purely executive and legislative in character and nature. For the
Constitution no less, maps out the distinct boundaries and limits the metes and bounds
within which each of the three political branches of government may exercise the
powers exclusively and essentially conferred to it by law.