G. R. No.

167919
February 14, 2007
Plaridel M. Abaya vs. Hon. Secretary Hermogenes E. Ebdane, Jr.
FACTS:
On May 7, 2004 Bids and Awards Committee (BAC) of the Department of Public
Works and Highways (DPWH) issued a Resolution No. PJHL-A-04-012. It was
approved by DPWH Acting Secretary Florante Soriquez. This resolution
recommended the award to China Road & Bridge Corporation of the contract for the
implementation of civil works for Contract Package No. I (CP I), which consists of the
improvement/rehabilitation of the San Andres-Virac-Jct. Bago-Viga road, with the
lengt of 79.818 kilometers, in the island province of Catanduanes.
This Loan Agreement No. PH-204 was executed by and between the JBIC and the
Philippine Government pursuant to the exchange of Notes executed by and between
Mr. Yoshihisa Ara, Ambassador Extraordinary and Plenipotentiary of Japan to the
Philippines, and then Foreign Affairs Secretary Siazon, in behalf of their respective
governments.
ISSUE:
Whether or not the Loan Agreement No. PH-204 between the JBIC and the Philippine
Government is a kind of a treaty.
HELD:
The Loan Agreement No. PH-204 taken in conjunction with the Exchange of Notes
dated December 27, 1999 between the Japanese Government and the Philippine
Government is an executive agreement.
An exchange of notes is a record of a routine agreement that has many
similarities with the private law contract. The agreement consists of the exchange of
two documents, each of the parties being in the possession of the one signed by the
representative of the other.
treaties, agreements, conventions, charters, protocols, declarations, memoranda
of understanding, modus vivendi and exchange of notes all are refer to international
instruments binding at international law.
Although these instruments differ from each other by title, they all have common
features and international law has applied basically the same rules to all these
instruments. These rules are the result of long practice among the States, which
have accepted them as binding norms in their mutual relations. Therefore, they are
regarded as international customary law.

That case was dismissed by the SCORP last Feb. 14 2007.

What the petitioners wanted was that Foreign funded projects also undergo the
procurement process.
The dismissal of the case somehow gave justification for the delay of the
implementing rules for foreign funded projects (IRR-B) of the procurement law
If we recall the decision of the Abaya vs Ebdane was used by the DOJ when the
DOTC Secretary was asking for an opinion from the former, during the ZTE
controversy.
as ruled by the Supreme Court in Abaya v. Ebdane, an
exchange of notes is considered a form of an executive agreement, which
becomes binding through executive action without need of a vote by the
Senate and that (like treaties and conventions, it is an international
instrument binding at international law,
The second issue involves an examination of the coverage of
Republic Act No. 9184, otherwise known as the Government
Procurement Reform Act. Section 4 of the said Act provides that it shall
apply to:
the Procurement of infrastructure Projects, Goods and
Consulting Services, regardless of source of funds, whether local
or foreign, by all branches and instrumentalities of government, its
departments, offices and agencies, including government-owned
and/or -controlled corporations and local government units,
subject to the provisions of Commonwealth Act No. 138. Any
treaty or international or executive agreement affecting the
subject matter of this Act to which the Philippine government is a
signatory shall be observed