122.

VICTORIA MILLING CO V SSC

123. ABAKADA GURO
ERMITA (SUPRA)

PARTY

LIST

124. US V ANG TANG HO

125. VILLENA V SEC OF INTERIOR
126.PHILCOMSAT V ALCUAZ
127. PELAEZ V AUDITOR GEN
128. CHIONGBAN V ORBOS
129. YNOT V IAC
130. DE LA LLANA V ALBA
131. EDU V ERICTA
132. OPLE V TORRES
133. DEFENSOR-SANTIAGO V COMELEC,
SUPRA
134. SBMA V COMELEC
135. PIMENTEL JR. V EXEC SECRETARY
136. MARIANO JR. V COMELEC
137. MONTEJO V COMELEC
138. BAGABUYO V COMELEC
139. AQUINO III V COMELEC
140. ALDABA V COMELEC
141. VETERANS FEDERATION PARTY V
COMELEC
121. VICTORIA MILLING CO V SSC

EN BANC
[G.R. No. L-16704. March 17, 1962.]
VICTORIAS MILLING COMPANY, INC., petitioner-appellant, vs. SOCIAL
SECURITY COMMISSION, respondent-appellee.
Ross, Selph & Carrascoso for petitioner-appellant.
Solicitor General and Ernesto Duran for respondent-appellee.
SYLLABUS
1. STATUTORY CONSTRUCTION; DISTINCTION BETWEEN AN ADMINISTRATIVE RULE AND
AN ADMINISTRATIVE INTERPRETATION OF LAW; NATURE OF ADMINISTRATIVE RULES AND
REGULATIONS. When an administrative agency promulgates rules and regulations, it
makes "makes" a new law with the force and effect of a valid law, while when it renders
an opinion or gives a statement of policy, it merely interprets a pre-existing law (Parker,
Administrative Law, p. 197; Davis, Administrative Law, p. 194). Rules and regulations
when promulgated in pursuance of the procedure or authority conferred upon the
administrative agency by law, partake of the nature of a statute, and compliance
therewith may be enforced by a penal sanction provided in the law. This is so because
statutes are usually couched in general terms, after expressing the policy, purposes,
objectives, remedies and sanctions intended by the legislature. The details and the
manner of carrying out the law are often times left to the administrative agency
entrusted with its enforcement.
2. ID.; ID.; BINDING EFFECT OF ADMINISTRATIVE RULES ON COURTS; REQUISITES. A
rule is binding on the courts so long as the procedure fixed for its promulgation is
followed and its scope is within the statutory authority granted by the legislature, even if
the courts are not in agreement with the policy stated therein or its innate wisdom
(Davis, op. cit., pp. 195-197). On the other hand, administrative interpretation of the law
is at best merely advisory, for it is the courts that finally determine what the law means.
3. ID.; ID.; CIRCULAR NO. 22 OF THE SOCIAL SECURITY COMMISSION MERELY AN
ADVISORY OPINION AND NEED NOT BE APPROVED BY THE PRESIDENT. Circular No. 22
of the Social Security Commission purports merely to advise employers-members of the
System of what, in the light of the amendment of the law, they should include in
determining the monthly compensation of their employees upon which the social
security contributions should be based. It did not add any duty or detail that was not
already in the law as amended. It merely stated and circularized the opinion of the
Commission as to how the law should be construed. Such circular, therefore, did not
require presidential approval and publication in the Official Gazette for its effectivity.
4. ID.; INTERPRETATION OF TERMS OR WORDS; RULE WHEN A TERM OR WORD IS
SPECIFICALLY DEFINED IN A STATUTE. While the rule is that terms or words are to be
interpreted in accordance with their well-accepted meaning in law, nevertheless, when
such term or word is specifically defined in a particular law, such interpretation must be

adopted in enforcing that particular law, for it can not be gainsaid that a particular
phrase or term may have one meaning for one purpose and another meaning for some
other purpose.

DECISION

BARRERA, J p:
On October 15, 1958, the Social Security Commission issued its Circular No. 22 of the
following tenor.
"Effective November 1, 1958, all Employers in computing the premiums
due the System, will take into consideration and include in the Employee's
remuneration all bonuses and overtime pay, as well as the cash value of
other media of remuneration. All these will comprise the Employee's
remuneration or earnings, upon which the 3-1/2% and 2- 1/2%
contributions will be based, up to a maximum of P500 for any one month."
Upon receipt of a copy thereof, petitioner Victorias Milling Company, Inc., through
counsel, wrote the Social Security Commission in effect protesting against the circular
as contradictory to a previous Circular No. 7, dated October 7, 1957 expressly
excluding overtime pay and bonus in the computation of the employers' and
employees' respective monthly premium contributions, and submitting, "In order to
assist your System in arriving at a proper interpretation of the term `compensation'
for the purposes of" such computation, their observations on Republic Act 1161 and
its amendment and on the general interpretation of the words "compensation",
"remuneration" and "wages". Counsel further questioned the validity of the circular
for lack of authority on the part of the Social Security Commission to promulgate it
without the approval of the President and for lack of publication in the Official
Gazette.
Overruling these objections, the Social Security Commission ruled that Circular No. 22 is
not a rule or regulation that needed the approval of the President and publication in the
Official Gazette to be effective, but a mere administrative interpretation of the statute, a
mere statement of general policy or opinion as to how the law should be construed.
Not satisfied with this ruling, petitioner comes to this Court on appeal.
The single issue involved in this appeal is whether or not Circular No. 22 is a rule or
regulation, as contemplated in Section 4(a) of Republic Act 1161 empowering the Social
Security Commission "to adopt, amend and repeal subject to the approval of the
President such rules and regulations as may be necessary to carry out the provisions and
purposes of this Act."
There can be no doubt that there is a distinction between an administrative rule or
regulation and an administrative interpretation of a law whose enforcement is entrusted
to an administrative body. When an administrative agency promulgates rules and
regulations, it "makes" a new law with the force and effect of a valid law, while when it
renders an opinion or gives a statement of policy, it merely interprets a pre-existing law
(Parker, Administrative Law, p. 197; Davis, Administrative Law, p. 194). Rules and
regulations when promulgated in pursuance of the procedure or authority conferred upon

the administrative agency by law, partake of the nature of a statute, and compliance
therewith may be enforced by a penal sanction provided in the law. This is so because
statutes are usually couched in general terms, after expressing the policy, purposes,
objectives, remedies and sanctions intended by the legislature. The details and the
manner of carrying out the law are often times left to the administrative agency
entrusted with its enforcement. In this sense, it has been said that rules and regulations
are the product of a delegated power to create new or additional legal provisions that
have the effect of law. (Davis, op. cit. p. 194.)
A rule is binding on the courts so long as the procedure fixed for its promulgation is
followed and its scope is within the statutory authority granted by the legislature, even if
the courts are not in agreement with the policy stated therein or its innate wisdom
(Davis, op. cit. pp. 195-197). On the other hand, administrative interpretation of the law
is at best merely advisory, for it is the courts that finally determine what the law means.
Circular No. 22 in question was issued by the Social Security Commission, in view of the
amendment of the provisions of the Social Security Law defining the term
"compensation" contained in Section 8(f) of Republic Act No. 1161 which, before its
amendment, reads as follows:
"(f) Compensation All remuneration for employment include the cash
value of any remuneration paid in any medium other than cash except (1)
that part of the remuneration in excess of P500 received during the month;
(2) bonuses, allowances or overtime pay; and (3) dismissal and all other
payments which the employer may make, although not legally required to
do so."
Republic Act No. 1792 changed the definition of "compensation" to:
"(f) Compensation All remuneration for employment include the cash
value of any remuneration paid in any medium other than cash except that
part of the remuneration in excess of P500.00 received during the month."
It will thus be seen that whereas prior to the amendment, bonuses, allowances, and
overtime pay given in addition to the regular or base pay were expressly excluded or
exempted from the definition of the term "compensation", such exemption or exclusion
was deleted by the amendatory law. It thus became necessary for the Social Security
Commission to interpret the effect of such deletion or elimination. Circular No. 22 was,
therefore, issued to apprise those concerned of the interpretation or understanding of
the Commission, of the law as amended, which it was its duty to enforce. It did not add
any duty or detail that was not already in the law as amended. It merely stated and
circularized the opinion of the Commission as to how the law should be construed.
The case of People vs. Jolliffe (G.R. No. L-9553, promulgated on may 30, 1959) cited by
appellant, does not support its contention that the circular in question is a rule or
regulation. What was there said was merely that a regulation may be incorporated in the
form of a circular. Such statement simply meant that the substance and not the form of a
regulation is decisive in determining its nature. It does not lay down a general
proposition of law that any circular, regardless of its substance and even if it is only
interpretative, constitutes a rule or regulation which must be published in the Official
Gazette before it could take effect.
The case of People vs. Que Po Lay (50 O.G. 2850) also cited by appellant is not applicable
to the present case, because the penalty that may be incurred by employers and

employees if they refuse to pay the corresponding premiums on bonus, overtime pay,
etc. which the employer pays to his employees, is not by reason of non-compliance with
Circular No. 22, but for violation of the specific legal provisions contained in Section 27
(e) and (f) of Republic Act No. 1161.
We find, therefore, that Circular No. 22 purports merely to advise employers-members of
the System of what, in the light of the amendment of the law, they should include in
determining the monthly compensation of their employees upon which the social
security contributions should be based, and that such circular did not require presidential
approval and publication in the Official Gazette for its effectivity.

It hardly need be said that the Commission's interpretation of the amendment embodied
in its Circular No. 22, is correct. The express elimination among the exemptions excluded
in the old law, of all bonuses, allowances and overtime pay in the determination of the
"compensation" paid to employees makes it imperative that such bonuses and overtime
pay must now be included in the employee's remuneration in pursuance of the
amendatory law. It is true that in previous cases, this Court has held that bonus is not
demandable because it is not part of the wage, salary, or compensation of the employee.
But the question in the instant case is not whether bonus is demandable or not as part of
compensation, but whether, after the employer does, in fact, give or pay bonus to his
employees, such bonuses shall be considered compensation under the Social Security
Act after they have been received by the employees. While it is true that terms or words
are to be interpreted in accordance with their well-accepted meaning in law,
nevertheless, when such term or word is specifically defined in a particular law, such
interpretation must be adopted in enforcing that particular law, for it can not be gainsaid
that a particular phrase or term may have one meaning for one purpose and another
meaning for some other purpose. Such is the case that is now before us. Republic Act
1161 specifically defined what "compensation" should mean "For the purposes of this
Act".Republic Act 1792 amended such definition by deleting some exceptions authorized
in the original Act. By virtue of this express substantial change in the phraseology of the
law, whatever prior executive or judicial construction may have been given to the phrase
in question should give way to the clear mandate of the new law.
IN VIEW OF THE FOREGOING, the Resolution appealed from is hereby affirmed, with costs
against appellant. So ordered.
||| (Victorias Milling Co., Inc. v. Social Security Commission, G.R. No. L-16704, [March 17,
1962], 114 PHIL 555-561)

122. ABAKADA GURO PARTY LIST V ERMITA (SUPRA)

EN BANC
[G.R. No. 168056. September 1, 2005.]
ABAKADA GURO PARTY LIST (Formerly AASJAS) OFFICERS SAMSON S. ALCANTARA and ED
VINCENT S. ALBANO, petitioners, vs. THE HONORABLE EXECUTIVE SECRETARY EDUARDO
ERMITA; HONORABLE SECRETARY OF THE DEPARTMENT OF FINANCE CESAR PURISIMA;
and HONORABLE COMMISSIONER OF INTERNAL REVENUE GUILLERMO PARAYNO, JR.,
respondents.
[G.R. No. 168207. September 1, 2005.]
AQUILINO Q. PIMENTEL, JR., LUISA P. EJERCITO-ESTRADA, JINGGOY E. ESTRADA, PANFILO
M. LACSON, ALFREDO S. LIM, JAMBY A.S. MADRIGAL, AND SERGIO R. OSMEA III,
petitioners, vs. EXECUTIVE SECRETARY EDUARDO R. ERMITA, CESAR V. PURISIMA,
SECRETARY OF FINANCE, GUILLERMO L. PARAYNO, JR., COMMISSIONER OF THE BUREAU
OF INTERNAL REVENUE, respondents.
[G.R. No. 168461. September 1, 2005.]
ASSOCIATION OF PILIPINAS SHELL DEALERS, INC. represented by its President, ROSARIO
ANTONIO; PETRON DEALERS' ASSOCIATION represented by its President, RUTH E.
BARBIBI; ASSOCIATION OF CALTEX DEALERS' OF THE PHILIPPINES represented by its
President, MERCEDITAS A. GARCIA; ROSARIO ANTONIO doing business under the name
and style of "ANB NORTH SHELL SERVICE STATION"; LOURDES MARTINEZ doing business
under the name and style of "SHELL GATE N. DOMINGO"; BETHZAIDA TAN doing
business under the name and style of "ADVANCE SHELL STATION"; REYNALDO P.
MONTOYA doing business under the name and style of "NEW LAMUAN SHELL SERVICE
STATION"; EFREN SOTTO doing business under the name and style of "RED FIELD SHELL
SERVICE STATION"; DONICA CORPORATION represented by its President, DESI
TOMACRUZ; RUTH E. MARBIBI doing business under the name and style of "R&R PETRON

STATION"; PETER M. UNGSON doing business under the name and style of "CLASSIC STAR
GASOLINE SERVICE STATION"; MARIAN SHEILA A. LEE doing business under the name and
style of "NTE GASOLINE & SERVICE STATION"; JULIAN CESAR P. POSADAS doing business
under the name and style of "STARCARGA ENTERPRISES"; ADORACION MAEBO doing
business under the name and style of "CMA MOTORISTS CENTER"; SUSAN M. ENTRATA
doing business under the name and style of "LEONA'S GASOLINE STATION and SERVICE
CENTER"; CARMELITA BALDONADO doing business under the name and style of "FIRST
CHOICE SERVICE CENTER"; MERCEDITAS A. GARCIA doing business under the name and
style of "LORPED SERVICE CENTER"; RHEAMAR A. RAMOS doing business under the name
and style of "RJRAM PTT GAS STATION"; MA. ISABEL VIOLAGO doing business under the
name and style of "VIOLAGO-PTT SERVICE CENTER"; MOTORISTS' HEART CORPORATION
represented by its Vice-President for Operations, JOSELITO F. FLORDELIZA; MOTORISTS'
HARVARD CORPORATION represented by its Vice-President for Operations, JOSELITO F.
FLORDELIZA; MOTORISTS' HERITAGE CORPORATION represented by its Vice-President for
Operations, JOSELITO F. FLORDELIZA; PHILIPPINE STANDARD OIL CORPORATION
represented by its Vice-President for Operations, JOSELITO F. FLORDELIZA; ROMEO
MANUEL doing business under the name and style of "ROMMAN GASOLINE STATION";
ANTHONY ALBERT CRUZ III doing business under the name and style of "TRUE SERVICE
STATION", petitioners, vs. CESAR V. PURISIMA, in his capacity as Secretary of the
Department of Finance and GUILLERMO L. PARAYNO, JR., in his capacity as Commissioner
of Internal Revenue, respondents.
[G.R. No. 168463. September 1, 2005.]
FRANCIS JOSEPH G. ESCUDERO, VINCENT CRISOLOGO, EMMANUEL JOEL J. VILLANUEVA,
RODOLFO G. PLAZA, DARLENE ANTONINO-CUSTODIO, OSCAR G. MALAPITAN, BENJAMIN
C. AGARAO, JR. JUAN EDGARDO M. ANGARA, JUSTIN MARC SB. CHIPECO, FLORENCIO G.
NOEL, MUJIV S. HATAMAN, RENATO B. MAGTUBO, JOSEPH A. SANTIAGO, TEOFISTO DL.
GUINGONA III, RUY ELIAS C. LOPEZ, RODOLFO Q. AGBAYANI and TEODORO A. CASIO,
petitioners, vs. CESAR V. PURISIMA, in his capacity as Secretary of Finance, GUILLERMO
L. PARAYNO, JR., in his capacity as Commissioner of Internal Revenue, and EDUARDO R.
ERMITA, in his capacity as Executive Secretary, respondents.
[G.R. No. 168730. September 1, 2005.]
BATAAN GOVERNOR ENRIQUE T. GARCIA, JR., petitioner, vs. HON. EDUARDO R. ERMITA, in
his capacity as the Executive Secretary; HON. MARGARITO TEVES, in his capacity as
Secretary of Finance; HON. JOSE MARIO BUNAG, in his capacity as the OIC Commissioner
of the Bureau of Internal Revenue; and HON. ALEXANDER AREVALO, in his capacity as the
OIC Commissioner of the Bureau of Customs, respondents.
Carlos G. Banigued and Laura Victoria Yuson-Layug for petitioners in G.R. No. 168461.
Eugenio H. Villareal, Dionisio B. Marasigan, Ma. Rosalie Taguian, Agustin C. Bacungan III
and Roland Allan C. Abarguez for petitioners in G.R. No. 168463.
Samson S. Alcantara, Ed Vincent S. Albano and Rene B. Gorospe for petitioners in
168056.
Luis Ma. Gil L. Gana for petitioners in G.R. No. 168207.

The Solicitor General for public respondents.

SYLLABUS
1.TAXATION; VALUE-ADDED TAX (VAT); TAX ON SPENDING OR CONSUMPTION. The VAT
is a tax on spending or consumption. It is levied on the sale, barter, exchange or lease of
goods or properties and services. Being an indirect tax on expenditure, the seller of
goods or services may pass on the amount of tax paid to the buyer, with the seller acting
merely as a tax collector. The burden of VAT is intended to fall on the immediate buyers
and ultimately, the end-consumers. In contrast, a direct tax is a tax for which a taxpayer
is directly liable on the transaction or business it engages in, without transferring the
burden to someone else. Examples are individual and corporate income taxes, transfer
taxes, and residence taxes.
2.POLITICAL LAW; LEGISLATIVE DEPARTMENT; POWER OF INTERNAL REGULATION AND
DISCIPLINE ARE INTRINSIC IN ANY LEGISLATIVE BODY. It should be borne in mind that
the power of internal regulation and discipline are intrinsic in any legislative body for, as
unerringly elucidated by Justice Story, "[i]f the power did not exist, it would be utterly
impracticable to transact the business of the nation, either at all, or at least with
decency, deliberation, and order." Thus, Article VI, Section 16 (3) of the Constitution
provides that "each House may determine the rules of its proceedings." Pursuant to this
inherent constitutional power to promulgate and implement its own rules of procedure,
the respective rules of each house of Congress provided for the creation of a Bicameral
Conference Committee.
3.ID.; SEPARATION OF POWERS; EXPANDED JURISDICTION OF THE SUPREME COURT
CANNOT APPLY TO QUESTIONS REGARDING ONLY INTERNAL OPERATION OF CONGRESS.
[O]ne of the most basic and inherent power of the legislature is the power to
formulate rules for its proceedings and the discipline of its members. Congress is the
best judge of how it should conduct its own business expeditiously and in the most
orderly manner. It is also the sole concern of Congress to instill discipline among the
members of its conference committee if it believes that said members violated any of its
rules of proceedings. Even the expanded jurisdiction of this Court cannot apply to
questions regarding only the internal operation of Congress, thus, the Court is wont to
deny a review of the internal proceedings of a co-equal branch of government.
4.ID.; LEGISLATIVE DEPARTMENT; CONGRESS FINDS THE PRACTICES OF THE BICAMERAL
CONFERENCE COMMITTEE TO BE VERY USEFUL FOR PURPOSES OF PROMPT AND
EFFICIENT LEGISLATIVE ACTION. [A]s far back as 1994 or more than ten years ago, in
the case of Tolentino vs. Secretary of Finance, the Court already made the
pronouncement that "[i]f a change is desired in the practice [of the Bicameral
Conference Committee] it must be sought in Congress since this question is not covered
by any constitutional provision but is only an internal rule of each house." To date,
Congress has not seen it fit to make such changes adverted to by the Court. It seems,
therefore, that Congress finds the practices of the bicameral conference committee to be
very useful for purposes of prompt and efficient legislative action.
5.ID.; ID.; ID.; MANDATED TO SETTLE THE DIFFERENCES BETWEEN THE DISAGREEING
PROVISIONS IN THE HOUSE BILL AND THE SENATE BILL. Under the provisions of both
the Rules of the House of Representatives and Senate Rules, the Bicameral Conference
Committee is mandated to settle the differences between the disagreeing provisions in

the House bill and the Senate bill. The term "settle" is synonymous to "reconcile" and
"harmonize." To reconcile or harmonize disagreeing provisions, the Bicameral Conference
Committee may then (a) adopt the specific provisions of either the House bill or Senate
bill, (b) decide that neither provisions in the House bill or the provisions in the Senate bill
would be carried into the final form of the bill, and/or (c) try to arrive at a compromise
between the disagreeing provisions.
6.TAXATION; REPUBLIC ACT NO. 9337 (EXPANDED VALUE-ADDED TAX LAW); THE STANDBY AUTHORITY OF THE PRESIDENT IS STILL TOTALLY WITHIN THE SUBJECT OF WHAT RATE
OF VALUE-ADDED TAX SHOULD BE IMPOSED ON THE TAXPAYERS. The so-called standby authority in favor of the President, whereby the rate of 10% VAT wanted by the
Senate is retained until such time that certain conditions arise when the 12% VAT wanted
by the House shall be imposed, appears to be a compromise to try to bridge the
difference in the rate of VAT proposed by the two houses of Congress. Nevertheless, such
compromise is still totally within the subject of what rate of VAT should be imposed on
taxpayers.
7.POLITICAL LAW; LEGISLATIVE DEPARTMENT; BICAMERAL CONFERENCE COMMITTEE; IT
IS WITHIN ITS POWER TO INCLUDE IN ITS REPORT AN ENTIRELY NEW PROVISION THAT IS
NOT FOUND EITHER IN THE HOUSE BILL OR IN THE SENATE BILL. All the changes or
modifications made by the Bicameral Conference Committee were germane to subjects
of the provisions referred to it for reconciliation. Such being the case, the Court does not
see any grave abuse of discretion amounting to lack or excess of jurisdiction committed
by the Bicameral Conference Committee. In the earlier cases of Philippine Judges
Association vs. Prado and Tolentino vs. Secretary of Finance, the Court recognized the
long-standing legislative practice of giving said conference committee ample latitude for
compromising differences between the Senate and the House. Thus, in the Tolentino
case, it was held that: . . . it is within the power of a conference committee to include in
its report an entirely new provision that is not found either in the House bill or in the
Senate bill. If the committee can propose an amendment consisting of one or two
provisions, there is no reason why it cannot propose several provisions, collectively
considered as an "amendment in the nature of a substitute," so long as such amendment
is germane to the subject of the bills before the committee. After all, its report was not
final but needed the approval of both houses of Congress to become valid as an act of
the legislative department. The charge that in this case the Conference Committee acted
as a third legislative chamber is thus without any basis.
8.ID.; ID.; "NO-AMENDMENT RULE"; CANNOT BE TAKEN TO MEAN THAT THE
INTRODUCTION BY THE BICAMERAL COMMITTEE OF AMENDMENTS AND MODIFICATIONS
TO DISAGREEING PROVISIONS IN BILLS THAT HAVE BEEN ACTED UPON BY BOTH HOUSES
OF CONGRESS IS PROHIBITED. The Court reiterates here that the "no-amendment
rule" refers only to the procedure to be followed by each house of Congress with regard
to bills initiated in each of said respective houses, before said bill is transmitted to the
other house for its concurrence or amendment. Verily, to construe said provision in a way
as to proscribe any further changes to a bill after one house has voted on it would lead to
absurdity as this would mean that the other house of Congress would be deprived of its
constitutional power to amend or introduce changes to said bill. Thus, Art. VI, Sec. 26 (2)
of the Constitution cannot be taken to mean that the introduction by the Bicameral
Conference Committee of amendments and modifications to disagreeing provisions in
bills that have been acted upon by both houses of Congress is prohibited.

9.ID.; ID.; CONSTITUTION DOES NOT CONTAIN ANY PROHIBITION OR LIMITATION ON THE
EXTENT OF THE AMENDMENTS THAT MAY BE INTRODUCED BY THE SENATE TO THE
HOUSE REVENUE BILL. Since there is no question that the revenue bill exclusively
originated in the House of Representatives, the Senate was acting within its
constitutional power to introduce amendments to the House bill when it included
provisions in Senate Bill No. 1950 amending corporate income taxes, percentage, excise
and franchise taxes. Verily, Article VI, Section 24 of the Constitution does not contain any
prohibition or limitation on the extent of the amendments that may be introduced by the
Senate to the House revenue bill.
10.ID.; ID.; REVENUE BILLS; THE SENATE CAN INTRODUCE AMENDMENTS WITHIN THE
PURPOSES OF THOSE BILLS. Notably therefore, the main purpose of the bills
emanating from the House of Representatives is to bring in sizeable revenues for the
government to supplement our country's serious financial problems, and improve tax
administration and control of the leakages in revenues from income taxes and valueadded taxes. As these house bills were transmitted to the Senate, the latter, approaching
the measures from the point of national perspective, can introduce amendments within
the purposes of those bills. It can provide for ways that would soften the impact of the
VAT measure on the consumer, i.e., by distributing the burden across all sectors instead
of putting it entirely on the shoulders of the consumers.
11.ID.; PRINCIPLE OF SEPARATION OF POWERS; ELUCIDATED. The principle of
separation of powers ordains that each of the three great branches of government has
exclusive cognizance of and is supreme in matters falling within its own constitutionally
allocated sphere. A logical corollary to the doctrine of separation of powers is the
principle of non-delegation of powers, as expressed in the Latin maxim: potestas
delegata non delegari potest which means "what has been delegated, cannot be
delegated. This doctrine is based on the ethical principle that such as delegated power
constitutes not only a right but a duty to be performed by the delegate through the
instrumentality of his own judgment and not through the intervening mind of another.
12.ID.; LEGISLATIVE DEPARTMENT; CONGRESS IS PROHIBITED FROM DELEGATING THOSE
WHICH ARE STRICTLY, OR INHERENTLY AND EXCLUSIVELY, LEGISLATIVE. With respect
to the Legislature, Section 1 of Article VI of the Constitution provides that "the Legislative
power shall be vested in the Congress of the Philippines which shall consist of a Senate
and a House of Representatives." The powers which Congress is prohibited from
delegating are those which are strictly, or inherently and exclusively, legislative. Purely
legislative power, which can never be delegated, has been described as the authority to
make a complete law complete as to the time when it shall take effect and as to whom
it shall be applicable and to determine the expediency of its enactment. Thus, the rule
is that in order that a court may be justified in holding a statute unconstitutional as a
delegation of legislative power, it must appear that the power involved is purely
legislative in nature that is, one appertaining exclusively to the legislative department.
It is the nature of the power, and not the liability of its use or the manner of its exercise,
which determines the validity of its delegation.
13.ID.; ID.; ID.; EXCEPTIONS. Nonetheless, the general rule barring delegation of
legislative powers is subject to the following recognized limitations or exceptions: (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.
14.ID.; ID.; TESTS OF VALID DELEGATION. 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. 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. Both
tests are intended to prevent a total transference of legislative authority to the delegate,
who is not allowed to step into the shoes of the legislature and exercise a power
essentially legislative.
15.ID.; ID.; ID.; THE LEGISLATURE MAY DELEGATE TO EXECUTIVE OFFICERS OR BODIES
THE POWER TO DETERMINE CERTAIN FACTS OR CONDITIONS ON WHICH THE OPERATION
OF A STATUTE IS MADE TO DEPEND. Clearly, the legislature may delegate to executive
officers or bodies the power to determine certain facts or conditions, or the happening of
contingencies, on which the operation of a statute is, by its terms, made to depend, but
the legislature must prescribe sufficient standards, policies or limitations on their
authority. While the power to tax cannot be delegated to executive agencies, details as
to the enforcement and administration of an exercise of such power may be left to them,
including the power to determine the existence of facts on which its operation depends.
16.ID.; ID.; ID.; ID.; RATIONALE. The rationale for this is that the preliminary
ascertainment of facts as basis for the enactment of legislation is not of itself a
legislative function, but is simply ancillary to legislation. Thus, the duty of correlating
information and making recommendations is the kind of subsidiary activity which the
legislature may perform through its members, or which it may delegate to others to
perform. Intelligent legislation on the complicated problems of modern society is
impossible in the absence of accurate information on the part of the legislators, and any
reasonable method of securing such information is proper. The Constitution as a
continuously operative charter of government does not require that Congress find for
itself every fact upon which it desires to base legislative action or that it make for itself
detailed determinations which it has declared to be prerequisite to application of
legislative policy to particular facts and circumstances impossible for Congress itself
properly to investigate.
17.ID.; STATUTORY CONSTRUCTION; THE USE OF THE WORD "SHALL" IN A STATUTE
DENOTES AN IMPERATIVE OBLIGATION AND IS INCONSISTENT WITH THE IDEA OF
DISCRETION. No discretion would be exercised by the President. Highlighting the
absence of discretion is the fact that the word shall is used in the common proviso. The
use of the word shall connotes a mandatory order. Its use in a statute denotes an
imperative obligation and is inconsistent with the idea of discretion. Where the law is
clear and unambiguous, it must be taken to mean exactly what it says, and courts have
no choice but to see to it that the mandate is obeyed.
18.TAXATION; REPUBLIC ACT NO. 9337; IT IS THE MINISTERIAL DUTY OF THE PRESIDENT
TO IMMEDIATELY IMPOSE THE 12% RATE UPON THE EXISTENCE OF ANY OF THE
CONDITIONS SPECIFIED BY CONGRESS. Thus, it is the ministerial duty of the President

to immediately impose the 12% rate upon the existence of any of the conditions
specified by Congress. This is a duty which cannot be evaded by the President. Inasmuch
as the law specifically uses the word shall, the exercise of discretion by the President
does not come into play. It is a clear directive to impose the 12% VAT rate when the
specified conditions are present. The time of taking into effect of the 12% VAT rate is
based on the happening of a certain specified contingency, or upon the ascertainment of
certain facts or conditions by a person or body other than the legislature itself.
19.POLITICAL LAW; EXECUTIVE DEPARTMENT; SECRETARY OF FINANCE AS THE ALTER
EGO OF THE PRESIDENT; EXPLAINED. When one speaks of the Secretary of Finance as
the alter ego of the President, it simply means that as head of the Department of Finance
he is the assistant and agent of the Chief Executive. The multifarious executive and
administrative functions of the Chief Executive are performed by and through the
executive departments, and the acts of the secretaries of such departments, such as the
Department of Finance, performed and promulgated in the regular course of business,
are, unless disapproved or reprobated by the Chief Executive, presumptively the acts of
the Chief Executive. The Secretary of Finance, as such, occupies a political position and
holds office in an advisory capacity, and, in the language of Thomas Jefferson, "should be
of the President's bosom confidence" and, in the language of Attorney-General Cushing,
is "subject to the direction of the President."
20.TAXATION; REPUBLIC ACT NO. 9337; SECRETARY OF FINANCE BECOMES THE MEANS
OR TOOL BY WHICH THE LEGISLATIVE POLICY IN THE VALUE-ADDED TAX IS DETERMINED
AND IMPLEMENTED; CASE AT BAR. In the present case, in making his recommendation
to the President on the existence of either of the two conditions, the Secretary of Finance
is not acting as the alter ego of the President or even her subordinate. In such instance,
he is not subject to the power of control and direction of the President. He is acting as
the agent of the legislative department, to determine and declare the event upon which
its expressed will is to take effect. The Secretary of Finance becomes the means or tool
by which legislative policy is determined and implemented, considering that he
possesses all the facilities to gather data and information and has a much broader
perspective to properly evaluate them. His function is to gather and collate statistical
data and other pertinent information and verify if any of the two conditions laid out by
Congress is present. His personality in such instance is in reality but a projection of that
of Congress. Thus, being the agent of Congress and not of the President, the President
cannot alter or modify or nullify, or set aside the findings of the Secretary of Finance and
to substitute the judgment of the former for that of the latter.
21.ID.; ID.; CONGRESS DID NOT DECLARE THE POWER TO TAX BUT THE MERE
IMPLEMENTATION OF THE LAW. Congress simply granted the Secretary of Finance the
authority to ascertain the existence of a fact, namely, whether by December 31, 2005,
the value-added tax collection as a percentage of Gross Domestic Product (GDP) of the
previous year exceeds two and four-fifth percent (2-4/5%) or the national government
deficit as a percentage of GDP of the previous year exceeds one and one-half percent (11/2%). If either of these two instances has occurred, the Secretary of Finance, by
legislative mandate, must submit such information to the President. Then the 12% VAT
rate must be imposed by the President effective January 1, 2006. There is no undue
delegation of legislative power but only of the discretion as to the execution of a law.
This is constitutionally permissible. Congress does not abdicate its functions or unduly
delegate power when it describes what job must be done, who must do it, and what is
the scope of his authority; in our complex economy that is frequently the only way in

which the legislative process can go forward. . . . Congress did not delegate the power to
tax but the mere implementation of the law. The intent and will to increase the VAT rate
to 12% came from Congress and the task of the President is to simply execute the
legislative policy. That Congress chose to do so in such a manner is not within the
province of the Court to inquire into, its task being to interpret the law.
22.POLITICAL LAW; JUDICIAL DEPARTMENT; SUPREME COURT DOES NOT RULE ON
ALLEGATIONS WHICH ARE MANIFESTLY CONJECTURAL. The insinuation by petitioners
Pimentel, et al. that the President has ample powers to cause, influence or create the
conditions to bring about either or both the conditions precedent does not deserve any
merit as this argument is highly speculative. The Court does not rule on allegations
which are manifestly conjectural, as these may not exist at all. The Court deals with
facts, not fancies; on realities, not appearances. When the Court acts on appearances
instead of realities, justice and law will be short-lived.
23.ID.; STATUTORY CONSTRUCTION; WHERE THE PROVISION OF THE LAW IS CLEAR AND
UNAMBIGUOUS, THE LAW MUST BE TAKEN AS IT IS. Under the common provisos of
Sections 4, 5 and 6 of R.A. No. 9337, if any of the two conditions set forth therein are
satisfied, the President shall increase the VAT rate to 12%. The provisions of the law are
clear. It does not provide for a return to the 10% rate nor does it empower the President
to so revert if, after the rate is increased to 12%, the VAT collection goes below the 2-4/5
of the GDP of the previous year or that the national government deficit as a percentage
of GDP of the previous year does not exceed 1-1/2%. Therefore, no statutory
construction or interpretation is needed. Neither can conditions or limitations be
introduced where none is provided for. Rewriting the law is a forbidden ground that only
Congress may tread upon. Thus, in the absence of any provision providing for a return to
the 10% rate, which in this case the Court finds none, petitioners' argument is, at best,
purely speculative. There is no basis for petitioners' fear of a fluctuating VAT rate
because the law itself does not provide that the rate should go back to 10% if the
conditions provided in Sections 4, 5 and 6 are no longer present. The rule is that where
the provision of the law is clear and unambiguous, so that there is no occasion for the
court's seeking the legislative intent, the law must be taken as it is, devoid of judicial
addition or subtraction.
24.TAXATION; BASIC PRINCIPLE; FISCAL ADEQUACY, EXPLAINED. The principle of fiscal
adequacy as a characteristic of a sound tax system was originally stated by Adam Smith
in his Canons of Taxation (1776), as: IV. Every tax ought to be so contrived as both to
take out and to keep out of the pockets of the people as little as possible over and above
what it brings into the public treasury of the state. It simply means that sources of
revenues must be adequate to meet government expenditures and their variations.
25.POLITICAL LAW; JUDICIAL DEPARTMENT; WHETHER THE LAW IS INDEED SUFFICIENT TO
ANSWER THE STATE'S ECONOMIC DILEMMA IS NOT FOR THE COURT TO JUDGE.
Congress passed the law hoping for rescue from an inevitable catastrophe. Whether the
law is indeed sufficient to answer the state's economic dilemma is not for the Court to
judge. In the Farias case, the Court refused to consider the various arguments raised
therein that dwelt on the wisdom of Section 14 of R.A. No. 9006 (The Fair Election Act),
pronouncing that: . . . policy matters are not the concern of the Court. Government policy
is within the exclusive dominion of the political branches of the government. It is not for
this Court to look into the wisdom or propriety of legislative determination. Indeed,
whether an enactment is wise or unwise, whether it is based on sound economic theory,

whether it is the best means to achieve the desired results, whether, in short, the
legislative discretion within its prescribed limits should be exercised in a particular
manner are matters for the judgment of the legislature, and the serious conflict of
opinions does not suffice to bring them within the range of judicial cognizance. In the
same vein, the Court in this case will not dawdle on the purpose of Congress or the
executive policy, given that it is not for the judiciary to "pass upon questions of wisdom,
justice or expediency of legislation."
26.ID.; CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS AND EQUAL PROTECTION
CLAUSES; TO INVOKE VIOLATION THEREOF, THERE IS A NEED FOR PROOF OF SUCH
PERSUASIVE CHARACTER AS WOULD LEAD TO SUCH A CONCLUSION. The doctrine is
that where the due process and equal protection clauses are invoked, considering that
they are not fixed rules but rather broad standards, there is a need for proof of such
persuasive character as would lead to such a conclusion. Absent such a showing, the
presumption of validity must prevail.
27.TAXATION; VALUE-ADDED TAX; INPUT TAX AND OUTPUT TAX; DEFINED. Input Tax is
defined under Section 110 (A) of the NIRC,as amended, as the value-added tax due from
or paid by a VAT-registered person on the importation of goods or local purchase of good
and services, including lease or use of property, in the course of trade or business, from
a VAT-registered person, and Output Tax is the value-added tax due on the sale or lease
of taxable goods or properties or services by any person registered or required to
register under the law.
28.ID.; REPUBLIC ACT NO. 9337; THE EXCESS INPUT TAX IS RETAINED IN A BUSINESS'S
BOOKS OF ACCOUNTS AND REMAINS CREDITABLE IN THE SUCCEEDING QUARTER/S.
Petitioners' argument is not absolute. It assumes that the input tax exceeds 70% of the
output tax, and therefore, the input tax in excess of 70% remains uncredited. However,
to the extent that the input tax is less than 70% of the output tax, then 100% of such
input tax is still creditable. More importantly, the excess input tax, if any, is retained in a
business's books of accounts and remains creditable in the succeeding quarter/s. This is
explicitly allowed by Section 110 (B), which provides that "if the input tax exceeds the
output tax, the excess shall be carried over to the succeeding quarter or quarters." In
addition, Section 112 (B) allows a VAT-registered person to apply for the issuance of a tax
credit certificate or refund for any unused input taxes, to the extent that such input taxes
have not been applied against the output taxes. Such unused input tax may be used in
payment of his other internal revenue taxes.
29.ID.; ID.; IN COMPUTING THE VALUE-ADDED TAX PAYABLE, THREE POSSIBLE SCENARIOS
MAY ARISE. [T]he input tax is the tax paid by a person, passed on to him by the seller,
when he buys goods. Output tax meanwhile is the tax due to the person when he sells
goods. In computing the VAT payable, three possible scenarios may arise: First, if at the
end of a taxable quarter the output taxes charged by the seller are equal to the input
taxes that he paid and passed on by the suppliers, then no payment is required; Second,
when the output taxes exceed the input taxes, the person shall be liable for the excess,
which has to be paid to the Bureau of Internal Revenue (BIR); and Third, if the input taxes
exceed the output taxes, the excess shall be carried over to the succeeding quarter or
quarters. Should the input taxes result from zero-rated or effectively zero-rated
transactions, any excess over the output taxes shall instead be refunded to the taxpayer
or credited against other internal revenue taxes, at the taxpayer's option.

30.ID.; ID.; A PERSON CAN CREDIT HIS INPUT TAX ONLY UP TO THE EXTENT OF 70% OF
THE OUTPUT TAX. Section 8 of R.A. No. 9337 however, imposed a 70% limitation on
the input tax. Thus, a person can credit his input tax only up to the extent of 70% of the
output tax. In layman's term, the value-added taxes that a person/taxpayer paid and
passed on to him by a seller can only be credited up to 70% of the value-added taxes
that is due to him on a taxable transaction. There is no retention of any tax collection
because the person/taxpayer has already previously paid the input tax to a seller, and
the seller will subsequently remit such input tax to the BIR. The party directly liable for
the payment of the tax is the seller. What only needs to be done is for the
person/taxpayer to apply or credit these input taxes, as evidenced by receipts, against
his output taxes.
31.ID.; ID.; INPUT TAX IS NOT A PROPERTY OR A PROPERTY RIGHT WITHIN THE
CONSTITUTIONAL PURVIEW OF THE DUE PROCESS CLAUSE. The input tax is not a
property or a property right within the constitutional purview of the due process clause.
A VAT-registered person's entitlement to the creditable input tax is a mere statutory
privilege. The distinction between statutory privileges and vested rights must be borne in
mind for persons have no vested rights in statutory privileges. The state may change or
take away rights, which were created by the law of the state, although it may not take
away property, which was vested by virtue of such rights.
32.ID.; ID.; TAXABLE TRANSACTIONS WITH THE GOVERNMENT ARE SUBJECT TO A 5%
RATE. As applied to value-added tax, this means that taxable transactions with the
government are subject to a 5% rate, which constitutes as full payment of the tax
payable on the transaction. This represents the net VAT payable of the seller. The other
5% effectively accounts for the standard input VAT (deemed input VAT), in lieu of the
actual input VAT directly or attributable to the taxable transaction. The Court need not
explore the rationale behind the provision. It is clear that Congress intended to treat
differently taxable transactions with the government. This is supported by the fact that
under the old provision, the 5% tax withheld by the government remains creditable
against the tax liability of the seller or contractor[.]
33.POLITICAL LAW; JUDICIAL DEPARTMENT; SUPREME COURT WILL NOT ENGAGE IN A
LEGAL JOUST WHERE PREMISES ARE UNCERTAIN. Petitioners also argue that by
imposing a limitation on the creditable input tax, the government gets to tax a profit or
value-added even if there is no profit or value-added. Petitioners' stance is purely
hypothetical, argumentative, and again, one-sided. The Court will not engage in a legal
joust where premises are what ifs, arguments, theoretical and facts, uncertain. Any
disquisition by the Court on this point will only be, as Shakespeare describes life in
Macbeth, "full of sound and fury, signifying nothing." What's more, petitioners'
contention assumes the proposition that there is no profit or value-added. It need not
take an astute businessman to know that it is a matter of exception that a business will
sell goods or services without profit or value-added. It cannot be overstressed that a
business is created precisely for profit.
34.CONSTITUTIONAL LAW; BILL OF RIGHTS; EQUAL PROTECTION CLAUSE; THE POWER OF
THE STATE TO MAKE REASONABLE AND NATURAL CLASSIFICATION FOR THE PURPOSES
OF TAXATION HAS LONG BEEN ESTABLISHED. The equal protection clause under the
Constitution means that "no person or class of persons shall be deprived of the same
protection of laws which is enjoyed by other persons or other classes in the same place
and in like circumstances." The power of the State to make reasonable and natural

classifications for the purposes of taxation has long been established. Whether it relates
to the subject of taxation, the kind of property, the rates to be levied, or the amounts to
be raised, the methods of assessment, valuation and collection, the State's power is
entitled to presumption of validity. As a rule, the judiciary will not interfere with such
power absent a clear showing of unreasonableness, discrimination, or arbitrariness.
35.ID.; ID.; ID.; DOES NOT REQUIRE THE UNIVERSAL APPLICATION OF THE LAWS ON ALL
PERSONS OR THINGS WITHOUT DISTINCTION. The equal protection clause does not
require the universal application of the laws on all persons or things without distinction.
This might in fact sometimes result in unequal protection. What the clause requires is
equality among equals as determined according to a valid classification. By classification
is meant the grouping of persons or things similar to each other in certain particulars and
different from all others in these same particulars.
36.TAXATION; THE RULE OF UNIFORMITY DOES NOT DEPRIVE CONGRESS OF THE POWER
TO CLASSIFY SUBJECTS OF TAXATION. Uniformity in taxation means that all taxable
articles or kinds of property of the same class shall be taxed at the same rate. Different
articles may be taxed at different amounts provided that the rate is uniform on the same
class everywhere with all people at all times. In this case, the tax law is uniform as it
provides a standard rate of 0% or 10% (or 12%) on all goods and services. Sections 4, 5
and 6 of R.A. No. 9337, amending Sections 106, 107 and 108, respectively, of the
NIRC,provide for a rate of 10% (or 12%) on sale of goods and properties, importation of
goods, and sale of services and use or lease of properties. These same sections also
provide for a 0% rate on certain sales and transaction. Neither does the law make any
distinction as to the type of industry or trade that will bear the 70% limitation on the
creditable input tax, 5-year amortization of input tax paid on purchase of capital goods or
the 5% final withholding tax by the government. It must be stressed that the rule of
uniform taxation does not deprive Congress of the power to classify subjects of taxation,
and only demands uniformity within the particular class.
37.ID.; REPUBLIC ACT NO. 9337 IS EQUITABLE; EQUIPPED WITH A THRESHOLD MARGIN.
R.A. No. 9337 is also equitable. The law is equipped with a threshold margin. The VAT
rate of 0% or 10% (or 12%) does not apply to sales of goods or services with gross
annual sales or receipts not exceeding P1,500,000.00. Also, basic marine and agricultural
food products in their original state are still not subject to the tax, thus ensuring that
prices at the grassroots level will remain accessible. . . . It is admitted that R.A. No. 9337
puts a premium on businesses with low profit margins, and unduly favors those with high
profit margins. Congress was not oblivious to this. Thus, to equalize the weighty burden
the law entails, the law, under Section 116, imposed a 3% percentage tax on VAT-exempt
persons under Section 109 (v), i.e., transactions with gross annual sales and/or receipts
not exceeding P1.5 Million. This acts as a equalizer because in effect, bigger businesses
that qualify for VAT coverage and VAT-exempt taxpayers stand on equal-footing.
Moreover, Congress provided mitigating measures to cushion the impact of the
imposition of the tax on those previously exempt. Excise taxes on petroleum products
and natural gas were reduced. Percentage tax on domestic carriers was removed. Power
producers are now exempt from paying franchise tax.
38.ID.; BASIC PRINCIPLE; PROGRESSIVITY; ELUCIDATED. Progressive taxation is built on
the principle of the taxpayer's ability to pay. This principle was also lifted from Adam
Smith's Canons of Taxation, and it states: I. The subjects of every state ought to
contribute towards the support of the government, as nearly as possible, in proportion to

their respective abilities; that is, in proportion to the revenue which they respectively
enjoy under the protection of the state. Taxation is progressive when its rate goes up
depending on the resources of the person affected.
39.ID.; REPUBLIC ACT NO. 9337; VALUE-ADDED TAX IS AN ANTITHESIS OF PROGRESSIVE
TAXATION. The VAT is an antithesis of progressive taxation. By its very nature, it is
regressive. The principle of progressive taxation has no relation with the VAT system
inasmuch as the VAT paid by the consumer or business for every goods bought or
services enjoyed is the same regardless of income. In other words, the VAT paid eats the
same portion of an income, whether big or small. The disparity lies in the income earned
by a person or profit margin marked by a business, such that the higher the income or
profit margin, the smaller the portion of the income or profit that is eaten by VAT. A
converso, the lower the income or profit margin, the bigger the part that the VAT eats
away. At the end of the day, it is really the lower income group or businesses with lowprofit margins that is always hardest hit.
40.ID.; ID.; THE CONSTITUTION DOES NOT REALLY PROHIBIT THE IMPOSITION OF
INDIRECT TAXES, LIKE THE VAT. Nevertheless, the Constitution does not really prohibit
the imposition of indirect taxes, like the VAT. What it simply provides is that Congress
shall "evolve a progressive system of taxation." The Court stated in the Tolentino case,
thus: The Constitution does not really prohibit the imposition of indirect taxes which, like
the VAT, are regressive. What it simply provides is that Congress shall 'evolve a
progressive system of taxation.' The constitutional provision has been interpreted to
mean simply that 'direct taxes are . . . to be preferred [and] as much as possible, indirect
taxes should be minimized.' (E. FERNANDO, THE CONSTITUTION OF THE PHILIPPINES 221
(Second ed. 1977)) Indeed, the mandate to Congress is not to prescribe, but to evolve, a
progressive tax system. Otherwise, sales taxes, which perhaps are the oldest form of
indirect taxes, would have been prohibited with the proclamation of Art. VIII, 17 (1) of
the 1973 Constitution from which the present Art. VI, 28 (1) was taken. Sales taxes are
also regressive. Resort to indirect taxes should be minimized but not avoided entirely
because it is difficult, if not impossible, to avoid them by imposing such taxes according
to the taxpayers' ability to pay. In the case of the VAT, the law minimizes the regressive
effects of this imposition by providing for zero rating of certain transactions (R.A. No.
7716, 3, amending 102 (b) of the NIRC), while granting exemptions to other
transactions. (R.A. No. 7716, 4 amending 103 of the NIRC)
PANGANIBAN, C.J., separate opinion:
1.POLITICAL LAW; JUDICIAL DEPARTMENT; JUDICIARY HAS BOTH THE POWER AND THE
DUTY TO STRIKE DOWN CONGRESSIONAL ACTIONS THAT ARE DONE IN PLAIN
CONTRAVENTION OF THE CONSTITUTIONAL CONDITIONS, RESTRICTIONS OR
LIMITATIONS. In fine, the enrolled bill doctrine applies mainly to the internal rules and
processes followed by Congress in its principal duty of lawmaking. However, when the
Constitution imposes certain conditions, restrictions or limitations on the exercise of
congressional prerogatives, the judiciary has both the power and the duty to strike down
congressional actions that are done in plain contravention of such conditions, restrictions
or limitations. Insofar as the present case is concerned, the three most important
restrictions or limitations to the enrolled bill doctrine are the "origination," "noamendment" and "three-reading" rules which I will discuss later. Verily, these restrictions
or limitations to the enrolled bill doctrine are safeguarded by the expanded constitutional
mandate of the judiciary "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." Even the ponente of Tolentino, the learned Mr.
Justice Vicente V. Mendoza, concedes in another decision that each house "may not by
its rules ignore constitutional restraints or violate fundamental rights, and there should
be a reasonable relation between the mode or method of proceeding established by the
rule and the result which is sought to be attained."
2.ID.; LEGISLATIVE DEPARTMENT; BICAMERAL CONFERENCE COMMITTEE (BCB); SUPREME
COURT MAY EXERCISE CERTIORARI REVIEW TO FIND OUT WHETHER THE
CONSTITUTIONAL CONDITIONS, RESTRICTIONS AND LIMITATIONS ON LAW-MAKING HAVE
BEEN VIOLATED. The Bicameral Conference Committee (BCC) created by Congress to
iron out differences between the Senate and the House of Representatives versions of
the E-VAT bills is one such "branch or instrumentality of the government," over which this
Court may exercise certiorari review to determine whether or not grave abuse of
discretion has been committed; and, specifically, to find out whether the constitutional
conditions, restrictions and limitations on law-making have been violated.
3.ID.; ID.; ID.; FIVE OPTIONS IN PERFORMING ITS FUNCTIONS. In general, the BCC has
at least five options in performing its functions: (1) adopt the House version in part or in
toto, (2) adopt the Senate version in part or in toto, (3) consolidate the two versions, (4)
reject non-conflicting provisions, and (5) adopt completely new provisions not found in
either version.
4.ID.; ID.; ID.; IN ADOPTING THE HOUSE VERSION OF THE REVENUE BILL IN PART OR IN
TOTO, THERE IS NO PROCEDURAL IMPEDIMENT SINCE IT HAD PASSED THE THREEREADING REQUIREMENT. [T]he BCC had the option of adopting the House bills either in
part or in toto, endorsing them without changes. Since these bills had passed the threereading requirement under the Constitution, it readily becomes apparent that no
procedural impediment would arise. There would also be no question as to their
origination, because the bills originated exclusively from the House of Representatives
itself.
5.ID.; ID.; REVENUE BILL; IN THE SENATE, THE REWRITING IS LIMITED BY THE "GERMANE"
PRINCIPLE. While in the Senate, the House version may, per Tolentino, undergo
extensive changes, such that the Senate may rewrite not only portions of it but even all
of it. I believe that such rewriting is limited by the "germane" principle: although
"relevant" or "related" to the general subject of taxation, the Senate version is not
necessarily "germane" all the time. The "germane" principle requires a legal not
necessarily an economic or political interpretation. There must be an "inherent logical
connection." What may be germane in an economic or political sense is not necessarily
germane in the legal sense. Otherwise, any provision in the Senate version that is
entirely new and extraneous, or that is remotely or even slightly connected, to the vast
and perplexing subject of taxation, would always be germane. Under this interpretation,
the origination principle would surely be rendered inutile.
6.ID.; ID.; ID.; SENATE IS NOT PROHIBITED TO FILE A SUBSTITUTE BILL IN ANTICIPATION
OF ITS RECEIPT OF THE BILL FROM THE HOUSE. To repeat, in Tolentino, the Court said
that the Senate may even write its own version, which in effect would be an amendment
by substitution. The Court went further by saying that "the Constitution does not prohibit
the filing in the Senate of a substitute bill in anticipation of its receipt of the bill from the
House, so long as action by the Senate as a body is withheld pending receipt of the

House bill." After all, the initiative for filing a revenue bill must come from the House on
the theory that, elected as its members are from their respective districts, the House is
more sensitive to local needs and problems. By contrast, the Senate whose members are
elected at large approaches the matter from a national perspective, with a broader and
more circumspect outlook.
7.ID.; ID.; BICAMERAL CONFERENCE COMMITTEE; ITS REPORT WILL NOT BECOME A FINAL
VALID ACT OF THE LEGISLATIVE DEPARTMENT UNTIL IT OBTAINS THE APPROVAL OF BOTH
HOUSES OF CONGRESS. As a third option, the BCC may reach a compromise by
consolidating both the Senate and the House versions. It can adopt some parts and
reject other parts of both bills, and craft new provisions or even a substitute bill. I believe
this option is viable, provided that there is no violation of the origination and germane
principles, as well as the three-reading rule. After all, the report generated by the BCC
will not become a final valid act of the Legislative Department until the BCC obtains the
approval of both houses of Congress.
8.TAXATION; REPUBLIC ACT NO. 9337; "STANDBY AUTHORITY" OF THE PRESIDENT, THERE
WAS REALLY NO "DELEGATION" TO SPEAK OF SINCE THERE WAS MERELY A DECLARATION
OF AN ADMINISTRATIVE, NOT A LEGISLATIVE FUNCTION. In the computation of the
percentage requirements in the alternative conditions under the law, the amounts of the
VAT collection, National Deficit, and GDP as well as the interrelationship among them
can easily be derived by the finance secretary from the proper government bodies
charged with their determination. The law is complete and standards have been fixed.
Only the fact-finding mathematical computation for its implementation on January 1,
2006, is necessary. Once either of the factual and mathematical events provided in the
law takes place, the President has no choice but to implement the increase of the VAT
rate to 12 percent. This eventuality has been predetermined by Congress. The taxing
power has not been delegated by Congress to either or both the President and the
finance secretary. What was delegated was only the power to ascertain the facts in order
to bring the law into operation. In fact, there was really no "delegation" to speak of; there
was merely a declaration of an administrative, not a legislative, function. I concur with
the ponencia in that there was no undue delegation of legislative power in the increase
from 10 percent to 12 percent of the VAT rate.
9.ID.; ID.; THE SECRETARY OF FINANCE IS NOT AN ALTER EGO OF CONGRESS BUT OF THE
PRESIDENT. The secretary of finance is not an alter ego of Congress, but of the
President. The mandate given by RA 9337 to the secretary is not equipollent to an
authority to make laws. In passing this law, Congress did not restrict or curtail the
constitutional power of the President to retain control and supervision over the entire
Executive Department. The law should be construed to be merely asking the President,
with a recommendation from the President's alter ego in finance matters, to determine
the factual bases for making the increase in VAT rate operative. Indeed, as I have
mentioned earlier, the fact-finding condition is a mere administrative, not legislative,
function.
10.POLITICAL LAW; LEGISLATIVE DEPARTMENT; THE LEGISLATURE DOES NOT HAVE THE
POWER TO IMPLEMENT LAWS. The ponencia states that Congress merely delegates
the implementation of the law to the secretary of finance. How then can the latter be its
agent? Making a law is different from implementing it. While the first (the making of
laws) may be delegated under certain conditions and only in specific instances provided
under the Constitution, the second (the implementation of laws) may not be done by

Congress. After all, the legislature does not have the power to implement laws.
Therefore, congressional agency arises only in the first, not in the second. The first is a
legislative function; the second, an executive one.
11.ID.; ID.; THE RIGHT TO SELECT THE MEASURE AND OBJECTS OF TAXATION DEVOLVES
UPON THE CONGRESS. Petitioners' argument is that because the GDP does not
account for the economic effects of so-called underground businesses, it is an inaccurate
indicator of either economic growth or slowdown in transitional economies. Clearly, this
matter is within the confines of lawmaking. This Court is neither a substitute for the
wisdom, or lack of it, in Congress, nor an arbiter of flaws within the latter's internal rules.
Policy matters lie within the domain of the political branches of government, outside the
range of judicial cognizance. "[T]he right to select the measure and objects of taxation
devolves upon the Congress, and not upon the courts, and such selections are valid
unless constitutional limitations are overstepped." Moreover, each house of Congress has
the power and authority to determine the rules of its proceedings.
12.TAXATION; REPUBLIC ACT NO. 9337; THE AMENDMENTS MADE BY THE BICAMERAL
CONFERENCE COMMITTEE REGARDING INCOME TAXES ARE NOT LEGALLY GERMANE TO
THE SUBJECT MATTER OF THE HOUSE BILLS. Amendments on Income Taxes. I
respectfully submit that the amendments made by the BCC (that were culled from the
Senate version) regarding income taxes are not legally germane to the subject matter of
the House bills. Revising the income tax rates on domestic, resident foreign and
nonresident foreign corporations; increasing the tax credit against taxes due from
nonresident foreign corporations on intercorporate dividends; and reducing the allowable
deduction for interest expense are legally unrelated and not germane to the subject
matter contained in the House bills; they violate the origination principle.
13.ID.; ID.; ID.; IT IS INCONCEIVABLE HOW THE PROVISIONS THAT INCREASE CORPORATE
INCOME TAXES CAN BE CONSIDERED AS MITIGATING MEASURES FOR INCREASING THE
VALUE-ADDED TAX. One, an income tax is a direct tax imposed on actual or presumed
income gross or net realized by a taxpayer during a given taxable year, while a VAT
is an indirect tax not in the context of who is directly and legally liable for its payment,
but in terms of its nature as "a tax on consumption." The former cannot be passed on to
the consumer, but the latter can. It is too wide a stretch of the imagination to even relate
one concept with the other. In like manner, it is inconceivable how the provisions that
increase corporate income taxes can be considered as mitigating measures for
increasing the VAT and, as I will explain later, for effectively imposing a maximum of 3
percent tax on gross sales or revenues because of the 70 percent cap. Even the
argument that the corporate income tax rates will be reduced to 30 percent does not
hold water. This reduction will take effect only in 2009, not 2006 when the 12 percent
VAT rate will have been implemented.
14.ID.; ID.; ID.; TAXES ON INTERCORPORATE DIVIDENDS ARE FINAL BUT THE INPUT
VALUE-ADDED TAX IS GENERALLY CREDITABLE. [T]axes on intercorporate dividends are
final, but the input VAT is generally creditable. Under a final withholding tax system, the
amount of income tax that is withheld by a withholding agent is constituted as a full and
final payment of the income tax due from the payee on said income. The liability for the
tax primarily rests upon the payor as a withholding agent. Under a creditable withholding
tax system, taxes withheld on certain payments are meant to approximate the tax that is
due of the payee on said payments. The liability for the tax rests upon the payee who is

mandated by law to still file a tax return, report the tax base, and pay the difference
between the tax withheld and the tax due.
15.ID.; ID.; ID.; INPUT VALUE-ADDED TAX CREDITS ARE DIFFERENT FROM TAX CREDITS
ON DIVIDENDS RECEIVED BY NONRESIDENT FOREIGN CORPORATIONS. From this
observation alone, it can already be seen that not only are dividends alien to the tax
base upon which the VAT is imposed, but their respective methods of withholding are
totally different. VAT-registered persons may not always be nonresident foreign
corporations that declare and pay dividends, while intercorporate dividends are certainly
not goods or properties for sale, barter, exchange, lease or importation. Certainly, input
VAT credits are different from tax credits on dividends received by nonresident foreign
corporations.
16.ID.; ID.; ID.; ITEMIZED DEDUCTIONS FROM GROSS INCOME PARTAKE OF THE NATURE
OF A TAX EXEMPTION. [I]temized deductions from gross income partake of the nature
of a tax exemption. Interest which is among such deductions refers to the amount
paid by a debtor to a creditor for the use or forbearance of money. It is an expense item
that is paid or incurred within a given taxable year on indebtedness in connection with a
taxpayer's trade, business or exercise of profession. In order to reduce revenue losses,
Congress enacted RA 8424 which reduces the amount of interest expense deductible by
a taxpayer from gross income, equal to the applicable percentage of interest income
subject to final tax. To assert that reducing the allowable deduction in interest expense is
a matter that is legally related to the proposed VAT amendments is too far-fetched.
Interest expenses are not allowed as credits against output VAT. Neither are VATregistered persons always liable for interest.
17.ID.; ID.; THE BICAMERAL CONFERENCE COMMITTEE HAD THE OPTION OF RETAINING
OR MODIFYING THE NO PASS-ON PROVISIONS AND DETERMINING THEIR EXTENT OR OF
DELETING THEM ALTOGETHER. No Pass-on Provisions. I agree with the ponencia that
the BCC did not exceed its authority when it deleted the no pass-on provisions found in
the congressional bills. Its authority to make amendments not only implies the power to
make insertions, but also deletions, in order to resolve conflicting provisions. The no
pass-on provision in House Bill (HB) No. 3705 referred to the petroleum products subject
to excise tax (and the raw materials used in the manufacture of such products), the
sellers of petroleum products, and the generation companies. The analogous provision in
Senate Bill (SB) No. 1950 dealt with electricity, businesses other than generation
companies, and services of franchise grantees of electric utilities. In contrast, there was
a marked absence of the no pass-on provision in HB 3555. Faced with such variances,
the BCC had the option of retaining or modifying the no pass-on provisions and
determining their extent, or of deleting them altogether. In opting for deletion to resolve
the variances, it was merely acting within its discretion. No grave abuse may be imputed
to the BCC.
18.ID.; NATIONAL INTERNAL REVENUE CODE; VALUE-ADDED TAX (VAT); THERE IS NO
HARD AND FAST RULE THAT 100 PERCENT OF THE INPUT TAXES WILL ALWAYS BE
ALLOWED AS A TAX CREDIT. Indeed, the tax credit method under our VAT system is
not only practical, but also principally used in almost all taxing jurisdictions. This does
not mean, however, that in the eyes of Congress through the BCC, our country can
neither deviate from this method nor modify its application to suit our fiscal
requirements. The VAT is usually collected through the tax credit method (and in the
past, even through the cost deduction method or a mixture of these two methods), but

there is no hard and fast rule that 100 percent of the input taxes will always be allowed
as a tax credit.
19.ID.; REPUBLIC ACT NO. 9337; SINCE THE UNUTILIZED INPUT VALUE-ADDED TAX CAN
BE CARRIED TO SUCCEEDING QUARTERS. Since the unutilized input VAT can be carried
over to succeeding quarters, there is no undue deprivation of property. Alternatively, it
can be passed on to the consumers; there is no law prohibiting that. Merely speculative
and unproven, therefore, is the contention that the law is arbitrary and oppressive. Laws
that impose taxes are necessarily burdensome, compulsory, and involuntary. The
deferred input tax account which accumulates the unutilized input VAT remains an
asset in the accounting records of a business. It is not at all confiscated by the
government. By deleting Section 112 (B) of the Tax Code,Congress no longer made
available tax credit certificates for such asset account until retirement from or cessation
of business, or changes in or cessation of VAT-registered status. This is a matter of policy,
not legality. The Court cannot step beyond the confines of its constitutional power, if
there is absolutely no clear showing of grave abuse of discretion in the enactment of the
law.
20.ID.; ID.; THERE IS NO VESTED RIGHT IN A DEFERRED INPUT TAX ACCOUNT. That the
unutilized input VAT would be rendered useless is merely speculative. Although it is
recorded as a deferred asset in the books of a company, it remains to be a mere
privilege. It may be written off or expensed outright; it may also be denied as a tax
credit. There is no vested right in a deferred input tax account; it is a mere statutory
privilege. The State may modify or withdraw such privilege, which is merely an asset
granted by operation of law. Moreover, there is no vested right in generally accepted
accounting principles. These refer to accounting concepts, measurement techniques, and
standards of presentation in a company's financial statements, and are not rooted in
laws of nature, as are the laws of physical science, for these are merely developed and
continually modified by local and international regulatory accounting bodies. To state
otherwise and recognize such asset account as a vested right is to limit the taxing power
of the State. Unlimited, plenary, comprehensive and supreme, this power cannot be
unduly restricted by mere creations of the State.
21.ID.; ID.; THERE IS NO VIOLATION OF THE EQUAL PROTECTION CLAUSE SINCE THE LAW
APPLIES EQUALLY TO ALL BUSINESSES. That the unutilized input VAT would also have
an unequal effect on businesses some with low, others with high, input-output ratio
is not a legal ground for invalidating the law. Profit margins are a variable of sound
business judgment, not of legal doctrine. The law applies equally to all businesses; it is
up to each of them to determine the best formula for selling their goods or services in
the face of stiffer competition. There is, thus, no violation of the equal protection clause.
If the implementation of the 70 percent cap would cause an ad infinitum deferment of
input taxes or an unequal effect upon different types of businesses with varying profit
margins and capital requirements, then the remedy would be an amendment of the law
not an unwarranted and outright declaration of unconstitutionality.
22.ID.; INCOME TAX; ADDITIONAL IMPOSITION AND ASSUMPTION ARE WITHIN THE
POWER OF CONGRESS TO MAKE. The matter of business establishments shouldering
30 percent of output tax and remitting the amount, as computed, to the government is in
effect imposing a tax that is equivalent to a maximum of 3 percent of gross sales or
revenues. This imposition is arguably another tax on gross not net income and thus
a deviation from the concept of VAT as a tax on consumption; it also assumes that sales

or revenues are on cash basis or, if on credit, given credit terms shorter than a quarter of
a year. However, such additional imposition and assumption are also arguably within the
power of Congress to make. The State may in fact choose to impose an additional 3
percent tax on gross income, in lieu of the 70 percent cap, and thus subject the income
of businesses to two types of taxes one on gross, the other on net. These impositions
may constitute double taxation, which is not constitutionally proscribed.
23.ID.; REPUBLIC ACT NO. 9337; REDUCTION OF TAX CREDITS IS A QUESTION OF
ECONOMIC POLICY, NOT OF LEGAL PERLUSTRATION. RA 9337 was enacted precisely to
achieve the objective of raising revenues to defray the necessary expenses of
government. The means that this law employs are reasonably related to the
accomplishment of such objective, and not unduly oppressive. The reduction of tax
credits is a question of economic policy, not of legal perlustration. Its determination is
vested in Congress, not in this Court. Since the purpose of the law is to raise revenues, it
cannot be denied that the means employed is reasonably related to the achievement of
that purpose. Moreover, the proper congressional procedure for its enactment was
followed; neither public notice nor public hearings were denied.
24.ID.; ID.; PRIVATE ENTERPRISES ARE NOT DISCOURAGED. [P]rivate enterprises are
not discouraged. Tax burdens are never delightful, but with the imposition of the 70
percent cap, there will be an assurance of a steady cash flow to the government, which
can be translated to the production of improved goods, rendition of better services, and
construction of better facilities for the people, including all private enterprises. Perhaps,
Congress deems it best to make our economy depend more on businesses that are
easier to monitor, so there will be a more efficient collection of taxes. Whatever is
expected of the outcome of the law, or its wisdom, should be the sole responsibility of
the representatives chosen by the electorate.
25.ID.; ID.; ID.; THE PROFIT MARGIN RATES OF VARIOUS INDUSTRIES GENERALLY DO NOT
CHANGE. The profit margin rates of various industries generally do not change.
However, the profit margin figures do, because these are obviously monetary variables
that affect business, along with the level of competition, the quality of goods and
services offered, and the cost of their production. And there will inevitably be a conscious
desire on the part of those who engage in business and those who consume their output
to adapt or adjust accordingly to any congressional modification of the VAT system.
26.ID.; NATIONAL INTERNAL REVENUE CODE; VALUE-ADDED TAX; THE VAT SYSTEM CAN
ALWAYS BE MODIFIED TO SUIT MODERN FISCAL DEMANDS. In addition, it is contended
that the VAT should be proportional in nature. I submit that this proportionality pertains
to the rate imposable, not the credit allowable. Private enterprises are subjected to a
proportional VAT rate, but VAT credits need not be. The VAT is, after all, a human concept
that is neither immutable nor invariable. In fact, it has changed after it was adopted as a
system of indirect taxation by other countries. Again unlike the laws of physical science,
the VAT system can always be modified to suit modern fiscal demands. The State,
through the Legislative Department, may even choose to do away with it and revert to
our previous system of turnover taxes, sales taxes and compensating taxes, in which
credits may be disallowed altogether.
27.ID.; REPUBLIC ACT NO. 9337; NO-AMENDMENT RULE WAS NOT VIOLATED SINCE
THERE WAS NO NEW PROVISION INSERTED IN THE APPROVED BILL. The noamendment rule in the Constitution was not violated by the BCC, because no completely

new provision was inserted in the approved bill. The amendments may be unpopular or
even work hardship upon everyone (this writer included). If so, the remedy cannot be
prescribed by this Court, but by Congress.
28.POLITICAL LAW; SEPARATION OF POWERS; THE COURT IS DEFERENTIAL TO THE
ACTIONS TAKEN BY THE OTHER BRANCHES OF GOVERNMENT. "[T]he Court as a rule
is deferential to the actions taken by the other branches of government that have
primary responsibility for the economic development of our country." Thus, in upholding
the Philippine ratification of the treaty establishing the World Trade Organization (WTO),
Taada v. Angara held that "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 presumption, this Court will
resolve every doubt in its favor." As pointed out in Cawaling Jr. v. Comelec, the grounds
for nullity of the law "must be beyond reasonable doubt, for to doubt is to sustain."
Indeed, "there must be clear and unequivocal showing that what the Constitutions
prohibits, the statute permits."
CHICO-NAZARIO, J., concurring opinion:
1.POLITICAL LAW; LEGISLATIVE DEPARTMENT; ENROLLED BILL DOCTRINE; EXPLAINED.
Under the said doctrine, the enrolled bill, as signed by the Speaker of the House of
Representatives and the Senate President, and certified by the Secretaries of both
Houses of Congress, shall be conclusive proof of its due enactment.
2.ID.; JUDICIAL DEPARTMENT; IT IS MORE PRUDENT FOR THE SUPREME COURT TO
REMAIN CONSERVATIVE AND TO CONTINUE ITS ADHERENCE TO THE ENROLLED BILL
DOCTRINE. I believe that it is more prudent for this Court to remain conservative and
to continue its adherence to the enrolled bill doctrine, for to abandon the said doctrine
would be to open a Pandora's Box, giving rise to a situation more fraught with evil and
mischief. Statutes enacted by Congress may not attain finality or conclusiveness unless
declared so by this Court. This would undermine the authority of our statutes because
despite having been signed and certified by the designated officers of Congress, their
validity would still be in doubt and their implementation would be greatly hampered by
allegations of irregularities in their passage by the Legislature. Such an uncertainty in the
statutes would indubitably result in confusion and disorder. In all probability, it is the
contemplation of such a scenario that led an American Judge to proclaim, thus . . .
Better, far better, that a provision should occasionally find its way into the statute
through mistake, or even fraud, than, that every Act, state and national, should at any
and all times be liable to put in issue and impeached by the journals, loose papers of the
Legislature, and parol evidence. Such a state of uncertainty in the statute laws of the
land would lead to mischiefs absolutely intolerable. . . .
3.ID.; SEPARATION OF POWERS; SUPREME COURT MUST ATTRIBUTE GOOD FAITH AND
ACCORD UTMOST RESPECT TO THE ACTS OF A CO-EQUAL BRANCH OF GOVERNMENT.
[T]his Court must attribute good faith and accord utmost respect to the acts of a coequal branch of government. While it is true that its jurisdiction has been expanded by
the Constitution, the exercise thereof should not violate the basic principle of separation
of powers. The expanded jurisdiction does not contemplate judicial supremacy over the
other branches of government. Thus, in resolving the procedural issues raised by the

petitioners, this Court should limit itself to a determination of compliance with, or

conversely, the violation of a specified procedure in the Constitution for the passage of
laws by Congress, and not of a mere internal rule of proceedings of its Houses.
4.ID.; LEGISLATIVE DEPARTMENT; BICAMERAL CONFERENCE COMMITTEE; CREATION
THEREOF IS AUTHORIZED BY THE RULES OF BOTH HOUSES OF CONGRESS. It bears
emphasis that most of the irregularities in the enactment of Rep. Act No. 9337 concern
the amendments introduced by the Bicameral Conference Committee. The Constitution
is silent on such a committee, it neither prescribes the creation thereof nor does it
prohibit it. The creation of the Bicameral Conference Committee is authorized by the
Rules of both Houses of Congress. That the Rules of both Houses of Congress provide for
the creation of a Bicameral Conference Committee is within the prerogative of each
House under the Constitution to determine its own rules of proceedings.
5.ID.; ID.; ID.; A CREATION OF NECESSITY AND PRACTICALITY CONSIDERING THAT OUR
CONGRESS IS COMPOSED OF TWO HOUSES. The Bicameral Conference Committee is a
creation of necessity and practicality considering that our Congress is composed of two
Houses, and it is highly improbable that their respective bills on the same subject matter
shall always be in accord and consistent with each other. Instead of all their members,
only the appointed representatives of both Houses shall meet to reconcile or settle the
differences in their bills. The resulting bill from their meetings, embodied in the
Bicameral Conference Report, shall be subject to approval and ratification by both
Houses, voting separately.
6.ID.; ID.; ID.; BOTH HOUSES HAD THE POWER TO AMEND THEIR RESPECTIVE RULES TO
CLARIFY OR LIMIT EVEN FURTHER THE SCOPE OF THE AUTHORITY WHICH THEY GRANTED
THERETO. It does perplex me that members of both Houses would again ask the Court
to define and limit the powers of the Bicameral Conference Committee when such
committee is of their own creation. In a number of cases, this Court already made a
determination of the extent of the powers of the Bicameral Conference Committee after
taking into account the existing Rules of both Houses of Congress. In gist, the power of
the Bicameral Conference Committee to reconcile or settle the differences in the two
Houses' respective bills is not limited to the conflicting provisions of the bills; but may
include matters not found in the original bills but germane to the purpose thereof. If both
Houses viewed the pronouncement made by this Court in such cases as extreme or
beyond what they intended, they had the power to amend their respective Rules to
clarify or limit even further the scope of the authority which they grant to the Bicameral
Conference Committee. Petitioners' grievance that, unfortunately, they cannot bring
about such an amendment of the Rules on the Bicameral Conference Committee
because they are members of the minority, deserves scant consideration. That the
majority of the members of both Houses refuses to amend the Rules on the Bicameral
Conference Committee is an indication that it is still satisfied therewith. At any rate, this
is how democracy works the will of the majority shall be controlling.
7.ID.; ID.; ID.; ID.; IF WE HAVE ONE CODE FOR ALL OUR NATIONAL INTERNAL REVENUE
TAXES, THEN THERE IS NO REASON WHY WE CANNOT HAVE A SINGLE STATUTE
AMENDING PROVISIONS THERETO. Although House Bills No. 3555 and 3705 were
limited to the amendments of the provisions on VAT of the National Internal Revenue
Code of 1997, Senate Bill No. 1950 had a much wider scope and included amendments
of other provisions of the said Code, such as those on income, percentage, and excise
taxes. It should be borne in mind that the very purpose of these three Bills and,

subsequently, of Rep. Act No. 9337, was to raise additional revenues for the government
to address the dire economic situation of the country. The National Internal Revenue
Code of 1997, as its title suggests, is the single Code that governs all our national
internal revenue taxes. While it does cover different taxes, all of them are imposed and
collected by the national government to raise revenues. If we have one Code for all our
national internal revenue taxes, then there is no reason why we cannot have a single
statute amending provisions thereof even if they involve different taxes under separate
titles. I hereby submit that the amendments introduced by the Bicameral Conference
Committee to non-VAT provisions of the National Internal Revenue Code of 1997 are not
unconstitutional for they are germane to the purpose of House Bills No. 3555 and 3705
and Senate Bill No. 1950, which is to raise national revenues.
8.TAXATION; NATIONAL INTERNAL REVENUE CODE OF 1997; VALUE-ADDED TAX (VAT);
INPUT VAT NOT A PROPERTY TO WHICH THE TAXPAYER HAS VESTED RIGHTS. I adhere
to the view that the input VAT is not a property to which the taxpayer has vested rights.
Input VAT consists of the VAT a VAT-registered person had paid on his purchases or
importation of goods, properties, and services from a VAT-registered supplier; more
simply, it is VAT paid. It is not, as averred by petitioner petroleum dealers, a property
that the taxpayer acquired for valuable consideration. A VAT-registered person incurs
input VAT because he complied with the National Internal Revenue Code of 1997, which
imposed the VAT and made the payment thereof mandatory; and not because he paid for
it or purchased it for a price.
9.ID.; ID.; ID.; VAT-REGISTERED PERSON IS ALLOWED TO CREDIT HIS INPUT VAT AGAINST
HIS OUTPUT VAT. Generally, when one pays taxes to the government, he cannot
expect any direct and concrete benefit to himself for such payment. The benefit of
payment of taxes shall redound to the society as a whole. However, by virtue of Section
110 (A) of the National Internal Revenue Code of 1997, prior to its amendment by Rep.
Act No. 9337, a VAT-registered person is allowed, subject to certain substantiation
requirements, to credit his input VAT against his output VAT. . . . The crediting of the input
VAT against the output VAT is a statutory privilege, granted by Section 110 of the
National Internal Revenue Code of 1997. It gives the VAT-registered person the
opportunity to recover the input VAT he had paid, so that, in effect, the input VAT does
not constitute an additional cost for him. While it is true that input VAT credits are
reported as assets in a VAT-registered person's financial statements and books of
account, this accounting treatment is still based on the statutory provision recognizing
the input VAT as a credit. Without Section 110 of the National Internal Revenue Code of
1997, then the accounting treatment of any input VAT will also change and may no
longer be booked outright as an asset. Since the privilege of an input VAT credit is
granted by law, then an amendment of such law may limit the exercise of or may totally
withdraw the privilege.
10.ID.; ID.; ID.; OUTPUT VAT; ELUCIDATED. Output VAT is the VAT imposed by the VATregistered person on his own sales of goods, properties, and services or the VAT he
passes on to his buyers. Hence, the VAT-registered person selling the goods, properties,
and services does not pay for the output VAT; said output VAT is paid for by his
consumers and he only collects and remits the same to the government.
11.ID.; REPUBLIC ACT NO. 9337; IMPOSITION OF THE 70% CAP ON INPUT VAT CREDITS, IS
A LEGITIMATE EXERCISE BY CONGRESS OF ITS LAW-MAKING POWER. The amendment
of Section 110 of the National Internal Revenue Code of 1997 by Rep. Act No. 9337,

which imposed the 70% cap on input VAT credits, is a legitimate exercise by Congress of
its law-making power. To say that Congress may not trifle with Section 110 of the
National Internal Revenue Code of 1997 would be to violate a basic precept of
constitutional law that no law is irrepealable. There can be no vested right to the
continued existence of a statute, which precludes its change or repeal. It bears to
emphasize that Rep. Act No. 9337 does not totally remove the privilege of crediting the
input VAT against the output VAT. It merely limits the amount of input VAT one may credit
against his output VAT per quarter to an amount equivalent to 70% of the output VAT.
What is more, any input VAT in excess of the 70% cap may be carried-over to the next
quarter. It is certainly a departure from the VAT crediting system under Section 110 of
the National Internal Revenue Code of 1997, but it is an innovation that Congress may
very well introduce, because VAT will continue to evolve from its pioneering original
structure. Dynamically, it will be subjected to reforms that will make it conform to many
factors, among which are: the changing requirements of government revenue; the social,
economic and political vicissitudes of the times; and the conflicting interests in our
society. In the course of its evolution, it will be injected with some oddities and inevitably
transformed into a structure which its revisionists believe will be an improvement
overtime.
12.ID.; ID.; PETROLEUM DEALER'S RIGHT TO THE INPUT VAT CREDIT IS NOT VESTED.
[A]ssuming for the sake of argument, that the input VAT credit is indeed a property, the
petroleum dealers' right thereto has not vested. A right is deemed vested and subject to
constitutional protection when ". . . [T]he right to enjoyment, present or prospective,
has become the property of some particular person or persons as a present interest. The
right must be absolute, complete, and unconditional, independent of a contingency, and
a mere expectancy of future benefit, or a contingent interest in property founded on
anticipated continuance of existing laws, does not constitute a vested right. So, inchoate
rights which have not been acted on are not vested." . . . It should be remembered that
prior to Rep. Act No. 9337, the petroleum dealers' input VAT credits were inexistent
they were unrecognized and disallowed by law. The petroleum dealers had no such
property called input VAT credits. It is only rational, therefore, that they cannot acquire
vested rights to the use of such input VAT credits when they were never entitled to such
credits in the first place, at least, not until Rep. Act No. 9337. My view, at this point,
when Rep. Act No. 9337 has not yet even been implemented, is that petroleum dealers'
right to use their input VAT as credit against their output VAT unlimitedly has not vested,
being a mere expectancy of a future benefit and being contingent on the continuance of
Section 110 of the National Internal Revenue Code of 1997, prior to its amendment by
Rep. Act No. 9337.
13.ID.; ID.; ALLOWS THE TAXPAYER TO CARRY-OVER TO THE SUCCEEDING QUARTERS ANY
EXCESS INPUT VAT. Rep. Act No. 9337, while imposing the 70% cap on input VAT
credits, allows the taxpayer to carry-over to the succeeding quarters any excess input
VAT. The petroleum dealers presented a situation wherein their input VAT would always
exceed 70% of their output VAT, and thus, their excess input VAT will be perennially
carried-over and would remain unutilized. Even though they consistently questioned the
70% cap on their input VAT credits, the petroleum dealers failed to establish what is the
average ratio of their input VAT vis- -vis their output VAT per quarter. Without such fact,
I consider their objection to the 70% cap arbitrary because there is no basis therefor.
14.ID.; ID.; 70% CAP ON INPUT VAT CREDITS WAS NOT IMPOSED BY CONGRESS
ARBITRARILY. I find that the 70% cap on input VAT credits was not imposed by

Congress arbitrarily. Members of the Bicameral Conference Committee settled on the

said percentage so as to ensure that the government can collect a minimum of 30%
output VAT per taxpayer. This is to put a VAT-taxpayer, at least, on equal footing with a
VAT-exempt taxpayer under Section 109 (V) of the National Internal Revenue Code,as
amended by Rep. Act No. 9337. The latter taxpayer is exempt from VAT on the basis that
his sale or lease of goods or properties or services do not exceed P1,500,000; instead, he
is subject to pay a three percent (3%) tax on his gross receipts in lieu of the VAT. If a
taxpayer with presumably a smaller business is required to pay three percent (3%) gross
receipts tax, a type of tax which does not even allow for any crediting, a VAT-taxpayer
with a bigger business should be obligated, likewise, to pay a minimum of 30% output
VAT (which should be equivalent to 3% of the gross selling price per good or property or
service sold). The cap assures the government a collection of at least 30% output VAT,
contributing to an improved cash flow for the government. Attention is further called to
the fact that the output VAT is the VAT imposed on the sales by a VAT-taxpayer; it is paid
by the purchasers of the goods, properties, and services, and merely collected through
the VAT-registered seller. The latter, therefore, serves as a collecting agent for the
government. The VAT-registered seller is merely being required to remit to the
government a minimum of 30% of his output VAT collection.
15.ID.; ID.; COURT'S DISCRETION CANNOT SUBSTITUTE THAT OF THE CONGRESS. [W]e
cannot substitute our discretion for Congress, and even though there are provisions in
Rep. Act No. 9337 which we may believe as unwise or iniquitous, but not
unconstitutional, we cannot strike them off by invoking our power of judicial review. In
such a situation, the recourse of the people is not judicial, but rather political. If they
severely doubt the wisdom of the present Congress for passing a statute such as Rep.
Act No. 9337, then they have the power to hold the members of said Congress
accountable by using their voting power in the next elections.
DAVIDE, JR., C.J. separate, concurring and dissenting opinion:
1.POLITICAL LAW; LEGISLATIVE DEPARTMENT; IT WAS BEYOND THE AMBIT OF THE
AUTHORITY OF THE SENATE TO PROPOSE AMENDMENTS TO REVENUE BILLS NOT
COVERED BY THE HOUSE BILLS. It must be noted that the House Bill initiated
amendments to provisions pertaining to VAT only. Doubtless, the Senate has the
constitutional power to concur with the amendments to the VAT provisions introduced in
the House Bills or even to propose its own version of VAT measure. But that power does
not extend to initiation of other tax measures, such as introducing amendments to
provisions on corporate income taxes, percentage taxes, franchise taxes, and excise
taxes like what the Senate did in these cases. It was beyond the ambit of the authority of
the Senate to propose amendments to provisions not covered by the House Bills or not
related to the subject matter of the House Bills, which is VAT. To allow the Senate to do so
would be tantamount to vesting in it the power to initiate revenue bills a power that
exclusively pertains to the House of Representatives under Section 24, Article VI of the
Constitution [.]
2.ID.; ID.; BICAMERAL CONFERENCE COMMITTEE; LEGISLATIVE CUSTOM SEVERELY LIMITS
THE FREEDOM WITH WHICH NEW SUBJECT MATTER CAN BE INSERTED INTO THE
CONFERENCE BILL. In Philippine Judges Association v. Prado, the Court described the
function of conference committee in this wise: "A conference committee may deal
generally with the subject matter or it may be limited to resolving the precise differences
between the two houses. Even where the conference committee is not by rule limited in

its jurisdiction, legislative custom severely limits the freedom with which new subject
matter can be inserted into the conference bill." The limitation on the power of a
conference committee to insert new provisions was laid down in Tolentino v. Secretary of
Finance. There, the Court, while recognizing the power of a conference committee to
include in its report an entirely new provision that is not found either in the House bill or
in the Senate bill, held that the exercise of that power is subject to the condition that the
said provision is "germane to the subject of the House and Senate bills."
3.ID.; ID.; ID.; NEW PROVISIONS ON PERCENTAGE AND EXCISE TAXES INSERTED IN THE
AMENDMENTS FOR THE VALUE-ADDED TAX HAS NO LEG TO STAND ON. In the present
cases, the provisions inserted by the BCC, namely, Sections 121 (Percentage Tax on
Banks and Non-Bank Financial Intermediaries) and 151 (Excise Tax on Mineral Products)
of the NIRC,as amended, are undoubtedly germane to SB No. 1950, which introduced
amendments to the provisions on percentage and excise taxes but foreign to HB Nos.
3555 and 3705, which dealt with VAT only. Since the proposed amendments in the
Senate bill relating to percentage and excise taxes cannot themselves be sustained
because they did not take their root from, or are not related to the subject of, HB Nos.
3705 and 3555, in violation of Section 24, Article VI of the Constitution, the new
provisions inserted by the BCC on percentage and excise taxes would have no leg to
stand on. I understand very well that the amendments of the Senate and the BCC
relating to corporate income, percentage, franchise, and excise taxes were designed to
"soften the impact of VAT measure on the consumer, i.e., by distributing the burden
across all sectors instead of putting it entirely on the shoulders of the consumers" and to
alleviate the country's financial problems by bringing more revenues for the government.
However, these commendable intentions do not justify a deviation from the Constitution,
which mandates that the initiative for filing revenue bills should come from the House of
Representatives, not from the Senate. After all, these aims may still be realized by
means of another bill that may later be initiated by the House of Representatives.
PUNO, J., concurring and dissenting opinion:
1.POLITICAL LAW; JUDICIAL DEPARTMENT; POWER OF JUDICIAL REVIEW; LIMITED TO THE
REVIEW OF "ACTUAL CASES AND CONTROVERSIES." The power of judicial review under
Article VIII, Section 5 (2) of the 1987 Constitution is limited to the review of "actual cases
and controversies." As rightly stressed by retired Justice Vicente V. Mendoza, this
requirement gives the judiciary "the opportunity, denied to the legislature, of seeing the
actual operation of the statute as it is applied to actual facts and thus enables it to reach
sounder judgment" and "enhances public acceptance of its role in our system of
government." It also assures that the judiciary does not intrude on areas committed to
the other branches of government and is confined to its role as defined by the
Constitution. Apposite thereto is the doctrine of ripeness whose basic rationale is "to
prevent the courts, through premature adjudication, from entangling themselves in
abstract disagreements." Central to the doctrine is the determination of "whether the
case involves uncertain or contingent future events that may not occur as anticipated, or
indeed may not occur at all." The ripeness requirement must be satisfied for each
challenged legal provision and parts of a statute so that those which are "not
immediately involved are not thereby thrown open for a judicial determination of
constitutionality."
2.ID.; ID.; ID.; THE COURT WILL NOT RENDER A CONJECTURAL JUDGMENT BASED ON
HYPOTHETICAL FACTS. It is manifest that the constitutional challenge to Sections 4 to

6 of R.A. No. 9337 cannot hurdle the requirement of ripeness. These sections give the
President the power to raise the VAT rate to 12% on January 1, 2006 upon satisfaction of
certain fact-based conditions. We are not endowed with the infallible gift of prophesy to
know whether these conditions are certain to happen. The power to adjust the tax rate
given to the President is futuristic and may or may not be exercised. The Court is
therefore beseeched to render a conjectural judgment based on hypothetical facts. Such
a supplication has to be rejected.
3.ID.; LEGISLATIVE DEPARTMENT; BICAMERAL CONFERENCE COMMITTEE; HAS LIMITED
POWERS AND CANNOT BE ALLOWED TO ACT AS IF IT WERE A "THIRD HOUSE" OF
CONGRESS. In Tolentino v. Secretary of Finance, I ventured the view that a Bicameral
Conference Committee has limited powers and cannot be allowed to act as if it were a
"third house" of Congress. I further warned that unless its roving powers are reigned in, a
Bicameral Conference Committee can wreck the lawmaking process which is a
cornerstone of the democratic, republican regime established in our Constitution. The
passage of time fortifies my faith that there ought to be no legal u-turn on this
preeminent principle.
4.ID.; ID.; ID.; ITS ONLY POWER CAN GO NO FURTHER THAN SETTLING DIFFERENCES IN
THEIR BILLS OR JOINT RESOLUTIONS. I respectfully submit that it is only by strictly
following the contours of powers of a Bicameral Conference Committee, as delineated by
the rules of the House and the Senate, that we can prevent said Committee from acting
as a "third" chamber of Congress. Under the clear rules of both the Senate and House, its
power can go no further than settling differences in their bills or joint resolutions. . . .
Under both rules, it is obvious that a Bicameral Conference Committee is a mere agent of
the House or the Senate with limited powers. The House contingent in the Committee
cannot, on its own, settle differences which are substantial in character. If it is confronted
with substantial differences, it has to go back to the chamber that created it "for the
latter's appropriate action." In other words, it must take the proper instructions from the
chambers that created it. It cannot exercise its unbridled discretion. Where there is no
difference between the bills, it cannot make any change. Where the difference is
substantial, it has to return to the chamber of its origin and ask for appropriate
instructions. It ought to be indubitable that it cannot create a new law, i.e., that which
has never been discussed in either chamber of Congress. Its parameters of power are
not porous, for they are hedged by the clear limitation that its only power is to settle
differences in bills and joint resolutions of the two chambers of Congress.
5.TAXATION; REPUBLIC ACT NO. 9337'S DELETION OF THE "NO PASS ON PROVISION" ON
BOTH THE SALES OF ELECTRICITY AND PETROLEUM PRODUCTS BY THE BICAMERAL
CONFERENCE COMMITTEE IS NOT WARRANTED BY THE RULES OF EITHER THE SENATE OR
THE HOUSE. In the guise of reconciling disagreeing provisions of the House and the
Senate bills on the matter, the Bicameral Conference Committee deleted the "no pass on
provision" on both the sales of electricity and petroleum products. This action by the
Committee is not warranted by the rules of either the Senate or the House. As
aforediscussed, the only power of a Bicameral Conference Committee is to reconcile
disagreeing provisions in the bills or joint resolutions of the two houses of Congress. The
House and the Senate bills both prohibited the passing on to consumers of the VAT on
sales of electricity. The Bicameral Conference Committee cannot override this
unequivocal decision of the Senate and the House. Nor is it clear that there is a conflict
between the House and Senate versions on the "no pass on provisions" of the VAT on
sales of petroleum products. The House version contained a "no pass on provision" but

the Senate had none. Elementary logic will tell us that while there may be a difference in
the two versions, it does not necessarily mean that there is a disagreement or conflict
between the Senate and the House. The silence of the Senate on the issue cannot be
interpreted as an outright opposition to the House decision prohibiting the passing on of
the VAT to the consumers on sales of petroleum products. Silence can even be
conformity, albeit implicit in nature. But granting for the nonce that there is conflict
between the two versions, the conflict cannot escape the characterization as a
substantial difference. The seismic consequence of the deletion of the "no pass on
provision" of the VAT on sales of petroleum products on the ability of our consumers,
especially on the roofless and the shirtless of our society, to survive the onslaught of
spiraling prices ought to be beyond quibble. The rules require that the Bicameral
Conference Committee should not, on its own, act on this substantial conflict. It has to
seek guidance from the chamber that created it. It must receive proper instructions from
its principal, for it is the law of nature that no spring can rise higher than its source. The
records of both the Senate and the House do not reveal that this step was taken by the
members of the Bicameral Conference Committee. They bypassed their principal and ran
riot with the exercise of powers that the rules never bestowed on them.
6.ID.; ID.; CONSTITUTIONALLY OBNOXIOUS ARE THE ADDED RESTRICTIONS ON LOCAL
GOVERNMENT'S USE OF INCREMENTAL REVENUE FROM THE VALUE-ADDED TAX. Even
more constitutionally obnoxious are the added restrictions on local government's use of
incremental revenue from the VAT in Section 21 of R.A. No. 9337 which were not present
in the Senate or House Bills. . . . These amendments did not harmonize conflicting
provisions between the constituent bills of R.A. No. 9337 but are entirely new and
extraneous concepts which fall beyond the median thereof. They transgress the limits of
the Bicameral Conference Committee's authority and must be struck down. I cannot
therefore subscribe to the thesis of the majority that "the changes introduced by the
Bicameral Conference Committee on disagreeing provisions were meant only to reconcile
and harmonize the disagreeing provisions for it did not inject any idea or intent that is
wholly foreign to the subject embraced by the original provisions."
7.POLITICAL LAW; LEGISLATIVE DEPARTMENT; BICAMERAL CONFERENCE COMMITTEE;
TEST OF GERMANENESS IS OVERLY BROAD AND IS THE FOUNTAINHEAD OF MISCHIEF.
The test of germaneness is overly broad and is the fountainhead of mischief for it allows
the Bicameral Conference Committee to change provisions in the bills of the House and
the Senate when they are not even in disagreement. Worse still, it enables the
Committee to introduce amendments which are entirely new and have not previously
passed through the coils of scrutiny of the members of both houses. The Constitution did
not establish a Bicameral Conference Committee that can act as a "third house" of
Congress with super veto power over bills passed by the Senate and the House. We
cannot concede that super veto power without wrecking the delicate architecture of
legislative power so carefully laid down in our Constitution.
8.ID.; ID.; CLEAR INTENT OF OUR FUNDAMENTAL LAW IS TO INSTALL A LAW-MAKING
STRUCTURE COMPOSED ONLY OF TWO HOUSES. The clear intent of our fundamental
law is to install a lawmaking structure composed only of two houses whose members
would thoroughly debate proposed legislations in representation of the will of their
respective constituents. The institution of this lawmaking structure is unmistakable from
the following provisions: (1) requiring that legislative power shall be vested in a
bicameral legislature; (2) providing for quorum requirements; (3) requiring that
appropriation, revenue or tariff bills, bills authorizing increase of public debt, bills of local

application, and private bills originate exclusively in the House of Representatives; (4)
requiring that bills embrace one subject expressed in the title thereof; and (5) mandating
that bills undergo three readings on separate days in each House prior to passage into
law and prohibiting amendments on the last reading thereof. A Bicameral Conference
Committee with untrammeled powers will destroy this lawmaking structure. At the very
least, it will diminish the free and open debate of proposed legislations and facilitate the
smuggling of what purports to be laws.
9.ID.; ID.; IN A REPUBLICAN FORM OF GOVERNMENT, LAWS CAN ONLY BE ENACTED BY
ALL THE DULY ELECTED REPRESENTATIVES OF THE PEOPLE. It cannot be
overemphasized that in a republican form of government, laws can only be enacted by
all the duly elected representatives of the people. It cuts against conventional wisdom in
democracy to lodge this power in the hands of a few or in the claws of a committee. It is
for these reasons that the argument that we should overlook the excesses of the
Bicameral Conference Committee because its report is anyway approved by both houses
is a futile attempt to square the circle for an unconstitutional act is void and cannot be
redeemed by any subsequent ratification.
10.ID.; JUDICIAL DEPARTMENT; POWER OF JUDICIAL REVIEW; WHEN THE VIOLATIONS
AFFECT PRIVATE RIGHTS OR IMPAIR THE CONSTITUTION, THE COURT HAS ALL THE
POWER TO STRIKE THEM DOWN. Neither can we shut our eyes to the unconstitutional
acts of the Bicameral Conference Committee by holding that the Court cannot interpose
its checking powers over mere violations of the internal rules of Congress. In Arroyo, et
al. v. de Venecia, et al., we ruled that when the violations affect private rights or impair
the Constitution, the Court has all the power, nay, the duty to strike them down.
YNARES-SANTIAGO, J., concurring and dissenting opinion:
1.POLITICAL LAW; LEGISLATIVE DEPARTMENT; THE RULE-MAKING POWER OF CONGRESS
SHOULD TAKE ITS BEARINGS FROM THE CONSTITUTION. Indeed, Section 16 (3), Article
VI of the 1987 Constitution explicitly allows each House to determine the rules of its
proceedings. However, the rules must not contravene constitutional provisions. The rulemaking power of Congress should take its bearings from the Constitution. If in the
exercise of this rule-making power, Congress failed to set parameters in the functions of
the committee and allowed the latter unbridled authority to perform acts which Congress
itself is prohibited, like the passage of a law without undergoing the requisite threereading and the so-called no-amendment rule, then the same amount to grave abuse of
discretion which this Court is empowered to correct under its expanded certiorari
jurisdiction. Notwithstanding the doctrine of separation of powers, therefore, it is the
duty of the Court to declare as void a legislative enactment, either from want of
constitutional power to enact or because the constitutional forms or conditions have not
been observed. When the Court declares as unconstitutional a law or a specific provision
thereof because procedural requirements for its passage were not complied, the Court is
by no means asserting its ascendancy over the Legislature, but simply affirming the
supremacy of the Constitution as repository of the sovereign will. The judicial branch
must ensure that constitutional norms for the exercise of powers vested upon the two
other branches are properly observed. This is the very essence of judicial authority
conferred upon the Court under Section 1, Article VII of the 1987 Constitution.
2.ID.; ID.; BICAMERAL CONFERENCE COMMITTEE; ITS AUTHORITY WAS LIMITED TO THE
RECONCILIATION OF DISAGREEING PROVISIONS OF THE RESOLUTION OF DIFFERENCES

OR INCONSISTENCIES. I fully subscribe to the theory advanced in the Dissenting

Opinion of Chief Justice Hilario G. Davide, Jr. in Tolentino v. Secretary of Finance that the
authority of the bicameral conference committee was limited to the reconciliation of
disagreeing provisions or the resolution of differences or inconsistencies. Thus, it could
only either (a) restore, wholly or partly, the specific provisions of the House bill amended
by the Senate bill, (b) sustain, wholly or partly, the Senate's amendments, or (c) by way
of a compromise, to agree that neither provisions in the House bill amended by the
Senate nor the latter's amendments thereto be carried into the final form of the former.
Otherwise stated, the Bicameral Conference Committee is authorized only to adopt
either the version of the House bill or the Senate bill, or adopt neither. It cannot, as the
ponencia proposed, "try to arrive at a compromise," such as introducing provisions not
included in either the House or Senate bill, as it would allow a mere ad hoc committee to
substitute the will of the entire Congress and without undergoing the requisite threereading, which are both constitutionally proscribed. To allow the committee unbridled
discretion to overturn the collective will of the whole Congress defies logic considering
that the bills are passed presumably after study, deliberation and debate in both houses.
A lesser body like the Bicameral Conference Committee should not be allowed to
substitute its judgment for that of the entire Congress, whose will is expressed
collectively through the passed bills.
3.ID.; ID.; ID.; THE PROVISIONS OF THE CONSTITUTION SHOULD READ INTO THE RULES
AS IMPOSING LIMITS ON WHAT THE COMMITTEE CAN OR CANNOT DO. When the
Bicameral Conference Committee goes beyond its limited function by substituting its
own judgment for that of either of the two houses, it violates the internal rules of
Congress and contravenes material restrictions imposed by the Constitution, particularly
on the passage of law. While concededly, the internal rules of both Houses do not
explicitly limit the Bicameral Conference Committee to a consideration only of conflicting
provisions, it is understood that the provisions of the Constitution should be read into
these rules as imposing limits on what the committee can or cannot do. As such, it
cannot perform its delegated function in violation of the three-reading requirement and
the no-amendment rule.
4.ID.; ID.; ID.; ID.; "COMPROMISING THE DISAGREEING PROVISIONS" BY SUBSTITUTING IT
WITH ITS OWN VERSION CLEARLY VIOLATE THE THREE-READING REQUIREMENT. Thus,
before a bill becomes a law, it must pass three readings. Hence, the ponencia's
submission that despite its limited authority, the Bicameral Conference Committee could
"compromise the disagreeing provisions" by substituting it with its own version clearly
violate the three-reading requirement, as the committee's version would no longer
undergo the same since it would be immediately put into vote by the respective houses.
In effect, it is not a bill that was passed by the entire Congress but by the members of
the ad hoc committee only, which of course is constitutionally infirm.
5.ID.; ID.; ID.; ID.; NO-AMENDMENT RULE SHOULD BE CONSTRUED AS A PROHIBITION
FROM INTRODUCING AMENDMENTS AND MODIFICATIONS TO NON-DISAGREEING
PROVISIONS OF THE HOUSE AND SENATE BILLS. I disagree that the no-amendment
rule referred only to "the procedure to be followed by each house of Congress with
regard to bills initiated in each of said respective houses" because it would relegate the
no-amendment rule to a mere rule of procedure. To my mind, the no-amendment rule
should be construed as prohibiting the Bicameral Conference Committee from
introducing amendments and modifications to non-disagreeing provisions of the House
and Senate bills. In sum, the committee could only either adopt the version of the House

bill or the Senate bill, or adopt neither. As Justice Reynato S. Puno said in his Dissenting
Opinion in Tolentino v. Secretary of Finance, there is absolutely no legal warrant for the
bold submission that a Bicameral Conference Committee possesses the power to
add/delete provisions in bills already approved on third reading by both Houses or an ex
post veto power.
SANDOVAL-GUTIERREZ, J., concurring and dissenting opinion:
1.POLITICAL LAW; LEGISLATIVE DEPARTMENT; UNDUE DELEGATION OF LEGISLATIVE
POWER; POWER OF TAXATION CANNOT BE DELEGATED BY THE CENTRAL LEGISLATIVE
BODY TO THE EXECUTIVE OR JUDICIAL DEPARTMENT OF THE GOVERNMENT. Taxation is
an inherent attribute of sovereignty. It is a power that is purely legislative and which the
central legislative body cannot delegate either to the executive or judicial department of
government without infringing upon the theory of separation of powers. The rationale of
this doctrine may be traced from the democratic principle of "no taxation without
representation." The power of taxation being so pervasive, it is in the best interest of the
people that such power be lodged only in the Legislature. Composed of the people's
representatives, it is "closer to the pulse of the people and . . . are therefore in a better
position to determine both the extent of the legal burden the people are capable of
bearing and the benefits they need." Also, this set-up provides security against the
abuse of power. As Chief Justice Marshall said: "In imposing a tax, the legislature acts
upon its constituents. The power may be abused; but the interest, wisdom, and justice of
the representative body, and its relations with its constituents, furnish a sufficient
security." Consequently, Section 24, Article VI of our Constitution enshrined the principle
of "no taxation without representation" by providing that "all . . . revenue bills . . . shall
originate exclusively in the House of Representatives, but the Senate may propose or
concur with amendments." This provision generally confines the power of taxation to the
Legislature.
2.ID.; ID.; ID.; ID.; EXCEPTIONS. Of course, the rule which forbids the delegation of the
power of taxation is not absolute and inflexible. It admits of exceptions. Retired Justice
Jose C. Vitug enumerated such exceptions, to wit: (1) delegations to local governments
(to be exercised by the local legislative bodies thereof) or political subdivisions; (2)
delegations allowed by the Constitution; and (3) delegations relating merely to
administrative implementation that may call for some degree of discretionary powers
under a set of sufficient standards expressed by law.
3.TAXATION; REPUBLIC ACT NO. 9337; THE LEGISLATURE ABDICATED ITS POWER WHEN
IT GRANTED THE PRESIDENT THE STANDBY AUTHORITY TO INCREASE THE VALUE-ADDED
TAX FROM 10% TO 12%. R.A. No. 9337, in granting to the President the stand-by
authority to increase the VAT rate from 10% to 12%, the Legislature abdicated its power
by delegating it to the President. This is constitutionally impermissible. The Legislature
may not escape its duties and responsibilities by delegating its power to any other body
or authority. Any attempt to abdicate the power is unconstitutional and void, on the
principle that potestas delegata non delegare potest. As Judge Cooley enunciated: "One
of the settled maxims in constitutional law is, that the power conferred upon the
legislature to make laws cannot be delegated by that department to any other body or
authority. Where the sovereign power of the state has located the authority, there it
must remain; and by the constitutional agency alone the laws must be made until the
Constitution itself is changed. The power to whose judgment, wisdom, and patriotism this
high prerogative has been entrusted cannot relieve itself of the responsibility by

choosing other agencies upon which the power shall be devolved, nor can it substitute
the judgment, wisdom, and patriotism of any other body for those to which alone the
people have seen fit to confide this sovereign trust."
4.POLITICAL LAW; LEGISLATIVE DEPARTMENT; TAX RATES OR VALUE-ADDED TAX RATES IS
NOT ONE OF THE ENUMERATIONS THAT MAY BE FIXED BY THE PRESIDENT. [I]t is not
allowed by the Constitution. Section 28 (2), Article VI of the Constitution enumerates the
charges or duties, the rates of which may be fixed by the President pursuant to a law
passed by Congress[.] . . . Noteworthy is the absence of tax rates or VAT rates in the
enumeration. If the intention of the Framers of the Constitution is to permit the
delegation of the power to fix tax rates or VAT rates to the President, such could have
been easily achieved by the mere inclusion of the term "tax rates" or "VAT rates" in the
enumeration. It is a dictum in statutory construction that what is expressed puts an end
to what is implied. Expressium facit cessare tacitum. This is a derivative of the more
familiar maxim express mention is implied exclusion or expressio unius est exclusio
alterius. Considering that Section 28 (2), Article VI expressly speaks only of "tariff rates,
import and export quotas, tonnage and wharfage dues and other duties and imposts," by
no stretch of imagination can this enumeration be extended to include the VAT.
5.ID.; ID.; TEST TO DETERMINE WHETHER A STATUTE CONSTITUTES AN UNDUE
DELEGATION OF LEGISLATIVE POWER OR NOT. In testing whether a statute constitutes
an undue delegation of legislative power or not, it is usual to inquire whether the statute
was complete in all its terms and provisions when it left the hands of the Legislature so
that nothing was left to the judgment of any other appointee or delegate of the
legislature.
6.TAXATION; REPUBLIC ACT NO. 9337; ALLOWS THE PRESIDENT TO DETERMINE FOR
HERSELF WHETHER THE VALUE-ADDED TAX SHALL BE INCREASED OR NOT AT ALL. The
two conditions set forth by law would have been sufficient had it not been for the fact
that the President, being at the helm of the entire officialdom, has more than enough
power of control to bring about the existence of such conditions. Obviously, R.A. No.
9337 allows the President to determine for herself whether the VAT rate shall be
increased or not at all. The fulfillment of the conditions is entirely placed in her hands. If
she wishes to increase the VAT rate, all she has to do is to strictly enforce the VAT
collection so as to exceed the 2-4/5% ceiling. The same holds true with the national
government deficit. She will just limit government expenses so as not to exceed the 11/2% ceiling. On the other hand, if she does not wish to increase the VAT rate, she may
discourage the Secretary of Finance from making the recommendation. That the
President's exercise of an authority is practically within her control is tantamount to
giving no conditions at all. I believe this amounts to a virtual surrender of legislative
power to her. It must be stressed that the validity of a law is not tested by what has been
done but by what may be done under its provisions.
7.POLITICAL LAW; CONSTITUTIONAL LAW; BILL OF RIGHTS; SUBSTANTIVE DUE PROCESS,
ELUCIDATED. Substantive due process requires the intrinsic validity of the law in
interfering with the rights of the person to his property. The inquiry in this regard is not
whether or not the law is being enforced in accordance with the prescribed manner but
whether or not, to begin with, it is a proper exercise of legislative power. To be so, the
law must have a valid governmental objective, i.e., the interest of the public as
distinguished from those of a particular class, requires the intervention of the State. This
objective must be pursued in a lawful manner, or in other words, the means employed

must be reasonably related to the accomplishment of the purpose and not unduly
oppressive.
8.TAXATION; BASIC PRINCIPLES; FISCAL ADEQUACY; EXPLAINED. One of the principles
of sound taxation is fiscal adequacy. The proceeds of tax revenue should coincide with,
and approximate the needs of, government expenditures. Neither an excess nor a
deficiency of revenue vis- -vis the needs of government would be in keeping with the
principle.
9.ID.; ID.; NOT TO BE EXERCISED AT ONE'S WHIM. Equating the grant of authority to
the President to increase the VAT rate with the grant of additional allowance to a
studious son is highly inappropriate. Our Senators must have forgotten that for every
increase of taxes, the burden always redounds to the people. Unlike the additional
allowance given to a studious son that comes from the pocket of the granting parent
alone, the increase in the VAT rate would be shouldered by the masses. Indeed,
mandating them to pay the increased rate as an award to the President is arbitrary and
unduly oppressive. Taxation is not a power to be exercised at one's whim.
10.POLITICAL LAW; LEGISLATIVE DEPARTMENT; ANY REVENUE MUST BEGIN OR START
SOLELY AND ONLY IN THE HOUSE. With the foregoing definitions in mind, it can be
reasonably concluded that when Section 24, Article VI provides that revenue bills shall
originate exclusively from the House of Representatives, what the Constitution mandates
is that any revenue statute must begin or start solely and only in the House. Not the
Senate. Not both Chambers of Congress. But there is more to it than that. It also means
that "an act for taxation must pass the House first." It is no consequence what
amendments the Senate adds.
11.ID.; ID.; SENATE COULD NOT PROPOSE TAX MATTERS NOT INCLUDED IN THE HOUSE
BILLS. Clearly, Senate Bill No. 1950 is not based on any bill passed by the House of
Representatives. It has a legislative identity and existence separate and apart from
House Bills No. 3555 and 3705. Instead of concurring or proposing amendments, Senate
Bill No. 1950 merely "takes into consideration" the two House Bills. To take into
consideration means "to take into account." Consideration, in this sense, means
"deliberation, attention, observation or contemplation. Simply put, the Senate in passing
Senate Bill No. 1950, a tax measure, merely took into account House Bills No. 3555 and
3705, but did not concur with or amend either or both bills. As a matter of fact, it did not
even take these two House Bills as a frame of reference. . . . Thus, I am of the position
that the Senate could not, without violating the germaneness rule and the principle of
"exclusive origination," propose tax matters not included in the House Bills.
CALLEJO, SR., J., concurring and dissenting opinion:
1.POLITICAL LAW; LEGISLATIVE DEPARTMENT; TWO DISTINCTIONS BETWEEN THE U.S.
FEDERAL CONSTITUTION'S AND OUR CONSTITUTION'S PRESCRIBED CONGRESSIONAL
PROCEDURE FOR ENACTING LAWS. Two distinctions are readily apparent between the
two procedures: 1. Unlike the US Federal Constitution,our Constitution prescribes the
"three-reading" rule or that no bill shall become a law unless it shall have been read on
three separate days in each house except when its urgency is certified by the President;
and 2. Unlike the US Federal Constitution,our Constitution prescribes the "noamendment" rule or that no amendments shall be allowed upon the last reading of the
bill.

2.ID.; ID.; "THREE-READING" AND "NO-AMENDMENT" RULES; MECHANISMS INSTITUTED

TO REMEDY THE "EVILS" INHERENT IN A BICAMERAL SYSTEM OF LEGISLATURE. The
"three-reading" and "no-amendment" rules, absent in the US Federal Constitution,but
expressly mandated by Article VI, Section 26 (2) of our Constitution are mechanisms
instituted to remedy the "evils" inherent in a bicameral system of legislature, including
the conference committee system. Sadly, the ponencia's refusal to apply Article VI,
Section 26 (2) of the Constitution on the Bicameral Conference Committee and the
amendments it introduced to R.A. No. 9337 has "effectively dismantled" the "threereading rule" and "no-amendment rule."
3.ID.; ID.; ID.; RATIONALE. At this point, it is well to recall the rationale for the "noamendment rule" and the "three-reading rule" in Article VI, Section 26 (2) of the
Constitution. The proscription on amendments upon the last reading is intended to
subject all bills and their amendments to intensive deliberation by the legislators and the
ample ventilation of issues to afford the public an opportunity to express their opinions
or objections thereon. Analogously, it is said that the "three-reading rule" operates "as a
self-binding mechanism that allows the legislature to guard against the consequences of
its own future passions, myopia, or herd behavior. By requiring that bills be read and
debated on successive days, legislature may anticipate and forestall future occasions on
which it will be seized by deliberative pathologies." As Jeremy Bentham, a noted political
analyst, put it: "[t]he more susceptible a people are of excitement and being led astray,
so much the more ought they to place themselves under the protection of forms which
impose the necessity of reflection, and prevent surprises."
4.ID.; ID.; BICAMERAL CONFERENCE COMMITTEE; THE "TAKE IT OR LEAVE IT" STANCE VIS-VIS CONFERENCE COMMITTEE REPORTS OPEN THE POSSIBILITY OF AMENDMENTS.
This "take it or leave it" stance vis- -vis conference committee reports opens the
possibility of amendments, which are substantial and not even germane to the original
bills of either house, being introduced by the conference committees and voted upon by
the legislators without knowledge of their contents. This practice cannot be
countenanced as it patently runs afoul of the essence of Article VI, Section 26 (2) of the
Constitution. Worse, it is tantamount to Congress surrendering its legislative functions to
the conference committees.
5.ID.; ID.; ID.; RATIFICATION BY CONGRESS DID NOT CURE THE UNCONSTITUTIONAL ACT
THEREOF OF DELETING THE "NO PASS ON PROVISION." That both the Senate and the
House of Representatives approved the Bicameral Conference Committee Report which
deleted the "no pass on provision" did not cure the unconstitutional act of the said
committee. As succinctly put by Chief Justice Davide in his dissent in Tolentino, "[t]his
doctrine of ratification may apply to minor procedural flaws or tolerable breaches of the
parameters of the bicameral conference committee's limited powers but never to
violations of the Constitution. Congress is not above the Constitution."
6.ID.; ID.; ENROLLED BILL DOCTRINE; EXPLAINED. Under the "enrolled bill doctrine,"
the signing of a bill by the Speaker of the House and the Senate President and the
certification of the Secretaries of both houses of Congress that it was passed are
conclusive of its due enactment.
AZCUNA, J., concurring and dissenting opinion:

1.TAXATION; REPUBLIC ACT NO. 9337; THERE IS NO ABDICATION BY CONGRESS OF ITS

POWER TO FIX THE RATE OF THE TAX SINCE THE RATE INCREASE PROVIDED UNDER THE
LAW IS DEFINITE AND CERTAIN TO OCCUR. Republic Act No. 9337, the E-VAT law, is
assailed as an unconstitutional abdication of Congress of its power to tax through its
delegation to the President of the decision to increase the rate of the tax from 10% to
12%, effective January 1, 2006, after any of two conditions has been satisfied. The two
conditions are: (i) Value-added tax collection as a percentage of Gross Domestic Product
(GDP) of the previous year exceeds two and four-fifth percent (2-4/5%); or (ii) National
government deficit as a percentage of GDP of the previous year exceeds one and onehalf percent (1-1/2%). A scrutiny of these "conditions" shows that one of them is certain
to happen on January 1, 2006. . . . Accordingly, there is here no abdication by Congress
of its power to fix the rate of the tax since the rate increase provided under the law, from
10% to 12%, is definite and certain to occur, effective January 1, 2006. All that the
President will do is state which of the two conditions occurred and thereupon implement
the rate increase.
2.ID.; ID.; A PROPER IMPLEMENTATION OF THE EXPANDED VALUE-ADDED TAX SHOULD
CAUSE ONLY THE APPROPRIATE INCREMENTAL INCREASE IN PRICES. [T]he Court
required respondents to submit a copy of the rules to implement the E-VAT, particularly
as to the impact of the tax on prices of affected commodities, specially oil and electricity.
For the onset of the law last July 1, 2005 was confusing, resulting in across-the-board
increases of 10% in the prices of commodities. This is not supposed to be the effect of
the law, as was made clear during the oral arguments, because the law also contains
provisions that mitigate the impact of the E-VAT through reduction of other kinds of taxes
and duties, and other similar measures, specially as to goods that go into the supply
chain of the affected products. A proper implementation of the E-VAT, therefore, should
cause only the appropriate incremental increase in prices, reflecting the net incremental
effect of the tax, which is not necessarily 10%, but possibly less, depending on the
products involved.
3.POLITICAL LAW; LEGISLATIVE DEPARTMENT; NECESSARY LEEWAY SHOULD BE GIVEN TO
CONGRESS AS LONG AS THE CHANGES ARE GERMANE TO THE BILL BEING CHANGED.
For my part, I would rather give the necessary leeway to Congress, as long as the
changes are germane to the bill being changed, the bill which originated from the House
of Representatives, and these are so, since these were precisely the mitigating measures
that go hand-on-hand with the E-VAT, and are, therefore, essential and hopefully
sufficient means to enable our people to bear the sacrifices they are being asked to
make. Such an approach is in accordance with the Enrolled Bill Doctrine that is the
prevailing rule in this jurisdiction. (Tolentino v. Secretary of Finance, 249 SCRA 628
[1994]). The exceptions I find are the provisions on corporate income taxes, which are
not germane to the E-VAT law, and are not found in the Senate and House bills.
TINGA, J., dissenting opinion:
1.TAXATION; REPUBLIC ACT NO. 9337 (E-VAT LAW); WILL EXTERMINATE OUR COUNTRY'S
SMALL TO MEDIUM ENTERPRISES. The E-VAT Law, as it stands, will exterminate our
country's small to medium enterprises. This will be the net effect of affirming Section 8 of
the law, which amends Sections 110 of the National Internal Revenue Code (NIRC)by
imposing a seventy percent (70%) cap on the creditable input tax a VAT-registered
person may apply every quarter and a mandatory sixty (60)-month amortization period

on the input tax on goods purchased or imported in a calendar month if the acquisition
cost of such goods exceeds One Million Pesos (P1,000,000.00).
2.POLITICAL LAW; JUDICIAL DEPARTMENT; POWER OF JUDICIAL REVIEW; TAXES MAY BE
INHERENTLY PUNITIVE, BUT WHEN THE FINE LINE BETWEEN DAMAGE AND DESTRUCTION
IS CROSSED, THE COURTS MUST STEP FORTH AND CUT THE HANGMAN'S NOOSE.
Taxes may be inherently punitive, but when the fine line between damage and
destruction is crossed, the courts must step forth and cut the hangman's noose. Justice
Holmes once confidently asserted that "the power to tax is not the power to destroy
while this Court sits," and we should very well live up to this expectation not only of the
revered Holmes, but of the Filipino people who rely on this Court as the guardian of their
rights. At stake is the right to exist and subsist despite taxes, which is encompassed in
the due process clause.
3.ID.; LEGISLATIVE DEPARTMENT; POWER TO ASCERTAIN THE FACTS OR CONDITIONS AS
THE BASIS OF THE TAKING INTO EFFECT OF A LAW MAY BE DELEGATED BY CONGRESS.
As the majority correctly points out, the power to ascertain the facts or conditions as the
basis of the taking into effect of a law may be delegated by Congress, and that the
details as to the enforcement and administration of an exercise of taxing power may be
delegated to executive agencies, including the power to determine the existence of facts
on which its operation depends.
4.TAXATION; REPUBLIC ACT NO. 9337; THERE IS CLEARLY NO DELEGATION OF THE
LEGISLATIVE POWER TO TAX BY CONGRESS TO THE EXECUTIVE BRANCH SINCE THE
PRESIDENT IS NOT GIVEN ANY DISCRETION IN REFUSING TO RAISE THE VALUE-ADDED
TAX TO 12%. At first blush, it does seem that the assailed provisions are
constitutionally deficient. It is Congress, and not the President, which is authorized to
raise the rate of VAT from 10% to 12%, no matter the circumstance. Yet a closer analysis
of the proviso reveals that this is not exactly the operative effect of the law. The qualifier
"shall" denotes a mandatory, rather than discretionary function on the part of the
President to raise the rate of VAT to 12% upon the existence of any of the two listed
conditions. Since the President is not given any discretion in refusing to raise the VAT
rate to 12%, there is clearly no delegation of the legislative power to tax by Congress to
the executive branch. The use of the word "shall" obviates any logical construction that
would allow the President leeway in not raising the tax rate. More so, it is accepted that
the principle of constitutional construction that every presumption should be indulged in
favor of constitutionality and the court in considering the validity of the 'statute in
question should give it such reasonable construction as can be reached to bring it within
the fundamental law. While all reasonable doubts should be resolved in favor, of the
constitutionality of a statute, it should necessarily follow that the construction upheld
should be one that is not itself noxious to the Constitution.
5.POLITICAL LAW; LEGISLATIVE DEPARTMENT; UNDUE DELEGATION OF LEGISLATIVE
POWER; ENACTMENT OF A LAW SHOULD BE DISTINGUISHED FROM ITS IMPLEMENTATION.
The enactment of a law should be distinguished from its implementation. Even if it is
Congress which exercises the plenary power of taxation, it is not the body that
administers the implementation of the tax. Under Section 2 of the National Internal
Revenue Code (NIRC),the assessment and collection of all national internal revenue
taxes, and the enforcement of all forfeitures, penalties and fines connected therewith
had been previously delegated to the Bureau of Internal Revenue, under the supervision
and control of the Department of Finance.

6.ID.; ID.; IT IS NOT THE LAW BUT THE REVENUE BILL WHICH IS REQUIRED BY THE
CONSTITUTION TO "ORIGINATE EXCLUSIVELY" IN THE HOUSE OF REPRESENTATIVES.
Still, the origination clause deserves obeisance in this jurisdiction, simply because it is
provided in the Constitution. At the same time, its proper interpretation is settled
precedent, as enunciated in Tolentino: To begin with, it is not the law but the revenue
bill which is required by the Constitution to "originate exclusively" in the House of
Representatives. It is important to emphasize this, because a bill originating in the House
may undergo such extensive changes in the Senate that the result may be a rewriting of
the whole. The possibility of a third version by the conference committee will be
discussed later. At this point, what is important to note is that, as a result of the Senate
action, a distinct bill may be produced. To insist that a revenue statute and not only
the bill which initiated the legislative process culminating in the enactment of the law
must substantially be the same as the House bill would be to deny the Senate's power
not only to "concur with amendments" but also to" propose amendments." It would be to
violate the coequality of legislative power of the two houses of Congress and in fact
make the House superior to the Senate. The vested power of the Senate to "propose or
concur with amendments" necessarily implies the ability to adduce transformations from
the original House bill into the final law. Since the House and Senate sit separately in
sessions, the only opportunity for the Senate to introduce its amendments would be in
the Bicameral Conference Committee, which emerges only after both the House and the
Senate have approved their respective bills.
7.ID.; ID.; "NO-AMENDMENT RULE"; REFERS ONLY TO THE PROCEDURE TO BE FOLLOWED
BY EACH HOUSE OF CONGRESS WITH REGARD TO BILLS INITIATED IN THE HOUSE
CONCERNED. The majority points out that the "no amendment rule" refers only to the
procedure to be followed by each house of Congress with regard to bills initiated in the
house concerned, before said bills are transmitted to the other house for its concurrence
or amendment. I agree with this statement. Clearly, the procedure under Section 26 (2),
Article VI only relates to the passage of a bill before the House and Senate, and not the
process undertaken afterwards in the Bicameral Conference Committee. Indeed, Sections
26 and 27 of Article VI, which detail the procedure how a bill becomes a law, are silent as
to what occurs between the passage by both houses of their respective bills, and the
presentation to the President of "every bill passed by the Congress." Evidently,
"Congress" means both Houses, such that a bill approved by the Senate but not by the
House is not presented to the President for approval. There is obviously a need for joint
concurrence by the House and Senate of a bill before it is transmitted to the President,
but the Constitution does not provide how such concurrence is acquired. This lacuna has
to be filled, otherwise no bill may be transmitted to the President.
8.ID.; ID.; GERMANENESS STANDARD; SHOULD BE APPRECIATED IN ITS NORMAL BUT
TOTAL SENSE. The germaneness standard which should guide Congress or the
Bicameral Conference Committee should be appreciated in its normal but total sense. In
that regard, my views contrast with that of Justice Panganiban, who asserts that
provisions that are not "legally germane" should be stricken down. The legal notion of
germaneness is just but one component, along with other factors such as economics and
politics, which guides the Bicameral Conference Committee, or the legislature for that
matter, in the enactment of laws. After all, factors such as economics or politics are
expected to cast a pervasive influence on the legislative process in the first place, and it
is essential as well to allow such "non-legal" elements to be considered in ascertaining
whether Congress has complied with the criteria of germaneness. Congress is a political

body, and its rationale for legislating may be guided by factors other than established
legal standards. I deem it unduly restrictive on the plenary powers of Congress to
legislate, to coerce the body to adhere to judge-made standards, such as a standard of
"legal germaneness." The Constitution is the only legal standard that Congress is
required to abide by in its enactment of laws.
9.TAXATION; REPUBLIC ACT NO. 9337; IT WOULD BE MYOPIC TO CONSIDER THAT THE
SUBJECT MATTER OF THE HOUSE BILL IS SOLELY THE VALUE-ADDED TAX SYSTEM RATHER
THAN THE GENERATION OF REVENUE. The Bicameral Conference Committee, in
evaluating the proposed amendments, necessarily takes into account not just the
provisions relating to the VAT, but the entire revenue generating mechanism in place. If,
for example, amendments to non-VAT related provisions of the NIRC were intended to
offset the expanded coverage for the VAT, then such amendments are germane to the
purpose of the House and Senate Bills. Moreover, it would be myopic to consider that the
subject matter of the House Bill is solely the VAT system, rather than the generation of
revenue. The majority has sufficiently demonstrated that the legislative intent behind the
bills that led to the E-VAT Law was the generation of revenue to counter the country's
dire fiscal situation. The mere fact that the law is popularly known as the E-VAT Law, or
that most of its provisions pertain to the VAT, or indirect taxes, does not mean that any
and all amendments which are introduced by the Bicameral Conference Committee must
pertain to the VAT system.
10.ID.; ID.; RESTRICTIONS ON THE USE BY LOCAL GOVERNMENT UNITS OF THEIR
INCREMENTAL REVENUE FROM THE VAT ARE ALIEN TO THE PRINCIPAL PURPOSE OF
REVENUE GENERATION. I do believe that the test of germaneness was violated by the
E-VAT Law in one regard. Section 21 of the law, which was not contained in either the
House or Senate Bills, imposes restrictions on the use by local government units of their
incremental revenue from the VAT. These restrictions are alien to the principal purposes
of revenue generation, or the purposes of restructuring the VAT system. I could not see
how the provision, which relates to budgetary allocations, is germane to the E-VAT Law.
Since it was introduced only in the Bicameral Conference Committee, the test of
germaneness is essential, and the provision does not pass muster. I join Justice Puno and
the Chief Justice in voting to declare Section 21 as unconstitutional.
11.ID.; ID.; THE "NO PASS ON" PROVISIONS ADOPTED BY THE HOUSE ESSENTIALLY
DIFFERS FROM THAT OF THE SENATE NECESSARILY REQUIRED THE CORRECTIVE RELIEF
FROM THE BICAMERAL CONFERENCE COMMITTEE. Moreover, the fact that the nature
of the "no pass on" provisions adopted by the House essentially differs from that of the
Senate necessarily required the corrective relief from the Bicameral Conference
Committee. The Committee could have either insisted on the House version, the Senate
version, or both versions, and it is not difficult to divine that any of these steps would
have obtained easy approval. Hence, the deletion altogether of the "no pass on"
provisions existed as a tangible solution to the possible impasse, and the Committee
should be accorded leeway to implement such a compromise, especially considering that
the deletion would have remained germane to the law, and would not be constitutionally
prohibited since the prohibition on amendments under Section 26 (2), Article VI does not
apply to the Committee.
12.POLITICAL LAW; JUDICIAL DEPARTMENT; POWER OF JUDICIAL REVIEW; THE SUPREME
COURT CANNOT SIMPLY DECREE TO CONGRESS WHAT LAW OR PROVISIONS TO ENACT.
An outright declaration that the deletion of the two elementally different "no-pass on"

provisions is unconstitutional, is of dubious efficacy in this case. Had such

pronouncement gained endorsement of a majority of the Court, it could not result in the
ipso facto restoration of the provision, the omission of which was ultimately approved in
both the House and Senate. Moreover, since the House version of the "no pass on" is
quite different from that of the Senate, there would be a question as to whether the
House version, the Senate version, or both versions would be reinstated. And of course,
if it were the Court which would be called upon to choose, such would be way beyond the
bounds of judicial power. Indeed, to intimate that the Court may require Congress to
reinstate a provision that failed to meet legislative approval would result in a blatant
violation of the principle of separation of powers, with the Court effectively dictating to
Congress the content of its legislation. The Court cannot simply decree to Congress what
laws or provisions to enact, but is limited to reviewing those enactments which are
actually ratified by the legislature.
13.ID.; ID.; ID.; IT IS THE DUTY OF THE COURTS TO NULLIFY LAWS THAT CONTRAVENE
THE DUE PROCESS CLAUSE OF THE BILL OF RIGHTS. It is the duty of the courts to
nullify laws that contravene the due process clause of the Bill of Rights. This task is at
the heart not only of judicial review, but of the democratic system, for the fundamental
guarantees in the Bill of Rights become merely hortatory if their judicial enforcement is
unavailing. Even if the void law in question is a tax statute, or one that encompasses
national economic policy, the courts should not shirk from striking it down
notwithstanding any notion of deference to the executive or legislative branch on
questions of policy. Neither Congress nor the President has the right to enact or enforce
unconstitutional laws.
14.ID.; CONSTITUTIONAL LAW; BILL OF RIGHTS; BY NO MEANS THE ONLY
CONSTITUTIONAL YARDSTICK BY WHICH THE VALIDITY OF A TAX LAW CAN BE MEASURED.
The Bill of Rights is by no means the only constitutional yardstick by which the validity
of a tax law can be measured. Nonetheless, it stands as the most unyielding of
constitutional standards, given its position of primacy in the fundamental law way above
the articles on governmental power. If the question lodged, for example, hinges on the
proper exercise of legislative powers in the enactment of the tax law, leeway can be
appreciated in favor of affirming the legislature's inherent power to levy taxes. On the
other hand, no quarter can be ceded, no concession yielded, on the people's
fundamental rights as enshrined in the Bill of Rights, even if the sacrifice is ostensibly
made "in the national interest." It is my understanding that "the national interests,"
however comported, always subsumes in the first place recognition and enforcement of
the Bill of Rights, which manifests where we stand as a democratic society.
15.ID.; ID.; ID.; DUE PROCESS; PURPOSE. The constitutional safeguard of due process
is embodied in the fiat "No person shall be deprived of life, liberty or property without
due process of law." The purpose of the guaranty is to prevent governmental
encroachment against the life, liberty and property of individuals; to secure the
individual from the arbitrary exercise of the powers of the government, unrestrained by
the established principles of private rights and distributive justice; to protect property
from confiscation by legislative enactments, from seizure, forfeiture, and destruction
without a trial and conviction by the ordinary mode of judicial procedure; and to secure
to all persons equal and impartial justice and the benefit of the general law.
16.ID.; ID.; ID.; ID.; MAY BE UTILIZED TO STRIKE DOWN A TAXATION STATUTE. In
Magnano Co. v. Hamilton, the U.S. Supreme

Court recognized that the due process clause may be utilized to strike down a taxation
statute, "if the act be so arbitrary as to compel the conclusion that it does not involve an
exertion of the taxing power, but constitutes, in substance and effect, the direct exertion
of a different and forbidden power, as, for example, the confiscation of property." Locally,
Sison v. Ancheta has long provided sanctuary for persons assailing the constitutionality
of taxing statutes. . . . Sison pronounces more concretely how a tax statute may
contravene the due process clause. Arbitrariness, confiscation, overstepping the state's
jurisdiction, and lack of a public purpose are all grounds for nullity encompassed under
the due process invocation.
17.ID.; ID.; ID.; ID.; IT IS DIFFICULT TO PUT INTO QUANTIFIABLE TERMS HOW ONEROUS A
TAXATION STATUTE MUST BE BEFORE IT CONTRAVENES THE DUE PROCESS CLAUSE. It
is difficult though to put into quantifiable terms how onerous a taxation statute must be
before it contravenes the due process clause. After all, the inherent nature of taxation is
to cause pain and injury to the taxpayer, albeit for the greater good of society. Perhaps
whatever collective notion there may be of what constitutes an arbitrary, confiscatory,
and unreasonable tax might draw more from the fairy tale/legend traditions of absolute
monarchs and the oppressed peasants they tax. Indeed, it is easier to jump to the
conclusion that a tax is oppressive and unfair if it is imposed by a tyrant or an
authoritarian state.
18.ID.; JUDICIAL DEPARTMENT; POWER OF JUDICIAL REVIEW; SUPREME COURT IS NOT
IMPOTENT FROM DECLARING A PROVISION OF LAW AS VIOLATIVE OF THE DUE PROCESS
CLAUSE IF IT IS CLEAR THAT ITS IMPLEMENTATION WILL CAUSE THE ILLEGAL
DEPRIVATION OF LIFE, LIBERTY OR PROPERTY. If there is cause to characterize my
arguments as speculative, it is only because the E-VAT Law has yet to be implemented.
No person as of yet can claim to have sustained actual injury by reason of the
implementation of the assailed provisions in G.R. No. 168461. Yet this should not mean
that the Court is impotent from declaring a provision of law as violative of the due
process clause if it is clear that its implementation will cause the illegal deprivation of
life, liberty or property without due process of law. This is especially so if, as in this case,
the injury is of mathematical certainty, and the extent of the loss quantifiable through
easy reference to the most basic of business practices.
19.ID.; CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS; CLEAR AND PRESENT
DANGER TEST SQUARELY APPLIES THERETO. Indeed, the Court has long responded to
strike down prospective actions, even if the injury has not yet even occurred. One of the
most significant legal principles of the last century, the "clear and present danger"
doctrine in free speech cases, in fact emanates from the prospectivity, and not the
actuality of danger. The Court has not been hesitant to nullify acts which might cause
injury, owing to the presence of a clear and present danger of a substantive evil which
the State has the right to prevent. It has even extended the "clear and present danger
rule" beyond the confines of freedom of expression to the realm of freedom of religion,
as noted by Justice Puno in his ponencia in Estrada v. Escritor. Justice Teodoro Padilla
goes further in his concurring opinion in Basco v. PAGCOR, and asserts that the clear and
present danger test squarely applies to the due process clause: "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." I see no reason why the clear and present danger

test cannot apply in this case, or any case wherein a taxing statute poses a clear and
present danger to the life, liberty or property of the individual. The application of this
standard frees the Court from inutility in the face of patently unconstitutional tax laws
that have been enacted but are yet to be fully operational.
20.ID.; STATUTORY CONSTRUCTION; ANY PROVISION OF LAW THAT DIRECTLY
CONTRADICTS THE CONSTITUTION IS UNWISE. In the same vein, the claim that my
arguments strike at the wisdom, rather than the constitutionality of the law are
misplaced. Concededly, the assailed provisions of the E-VAT law are basically unwise. But
any provision of law that directly contradicts the Constitution, especially the Bill of
Rights, are similarly unwise, as they run inconsistent with the fundamental law of the
land, the enunciated state policies and the elemental guarantees assured by the State to
its people. Not every unwise law is unconstitutional, but every unconstitutional law is
unwise, for an unconstitutional law contravenes a primordial principle or guarantee on
which our polity is founded.
21.ID.; JUDICIAL DEPARTMENT; POWER OF JUDICIAL REVIEW; THE COURT IS EMPOWERED
TO STRIKE DOWN THE LAW IF THE POLICY OF THE LAW AND/OR THE MEANS BY WHICH
SUCH POLICY IS IMPLEMENTED RUN COUNTER TO THE CONSTITUTION. The Separate
Opinion of Justice Panganiban notes that "[t]he Court cannot step beyond the confines of
its constitutional power, if there is absolutely no clear showing of grave abuse of
discretion in the enactment of the law." This, I feel, is an unduly narrow view of judicial
review, implying that such merely encompasses the procedural aspect by which a law is
enacted. If the policy of the law, and/or the means by which such policy is implemented
run counter to the Constitution, then the Court is empowered to strike down the law,
even if the legislative and executive branches act within their discretion in legislating
and signing the law. It is also asserted that if the implementation of the 70% cap imposes
an unequal effect on different types of businesses with varying profit margins and capital
requirements, then the remedy would be an amendment of the law. Of course, the
remedy of legislative amendment applies to even the most unconstitutional of laws. But
if our society can take cold comfort in the ability of the legislature to amend its
enactments as the defense against unconstitutional laws, what remains then as the
function of judicial review? This legislative capacity to amend unconstitutional laws runs
concurrently with the judicial capacity to strike down unconstitutional laws. In fact, the
long-standing tradition has been reliance on the judicial branch, and not the legislative
branch, for salvation from unconstitutional laws.
22.TAXATION; NATIONAL INTERNAL REVENUE CODE (NIRC); VALUE-ADDED TAX (VAT);
ELUCIDATED. VAT is distinguishable from the standard excise or percentage taxes in
that it is imposable not only on the final transaction involving the end user, but on
previous stages as well so long as there was a sale involved. Thus, VAT does not simply
pertain to the extra percentage paid by the buyer of a fast-food meal, but also that paid
by restaurant itself to its suppliers of raw food products. This multi-stage system is more
acclimated to the vagaries of the modern industrial climate, which has long surpassed
the stage when there was only one level of transfer between the farmer who harvests
the crop and the person who eats the crop. Indeed, from the extraction or production of
the raw material to its final consumption by a user, several transactions or sales
materialize. The VAT system assures that the government shall reap income for every
transaction that is had, and not just on the final sale or transfer. The European Union,
which has long required its member states to apply the VAT system, provided the
following definition of the tax which I deem clear and comprehensive: The principle of

the common system of value added tax involves the application to goods and services of
a general tax on consumption exactly proportional to the price of the goods and services,
whatever the number of transactions that take place in the production and distribution
process before the stage at which tax is charged. On each transaction, value added tax,
calculated on the price of the goods or services at the rate applicable to such goods or
services, shall be chargeable after deduction of the amount of value added tax borne
directly by the various cost components.
23.ID.; ID.; ID.; GENERALLY NOT INTENDED TO BE A TAX ON VALUE-ADDED BUT RATHER
AS A TAX ON CONSUMPTION. There is another key characteristic of the VAT that no
matter how many the taxable transactions that precede the final purchase or sale, it is
the end-user, or the consumer, that ultimately shoulders the tax. Despite its name, VAT
is generally, not intended to be a tax on value added, but rather as a tax on
consumption. Hence, there is a mechanism in the VAT system that enables firms to offset
the tax they have paid on their own purchases of goods and services against the tax
they charge on their sales of goods and services. Section 105 of the NIRC assures that
"the amount of tax may be shifted or passed on to the buyer transferee or lessee of the
goods, properties or services." The assailed provisions of the E-VAT law strike at the heart
of this accepted principle.
24.ID.; ID.; ID.; REMITTANCE OF THE TAX ON A PER TRANSACTION BASIS IS IMPOSSIBLE.
And there is one final basic element of the VAT system integral to this disquisition: the
mode by which the tax is remitted to the government. In simple theory, the VAT payable
can be remitted to the government immediately upon the occurrence of the transaction,
but such a demand proves excessively unwieldy. The number of VAT covered
transactions a modern enterprise may contract in a single day, plus the recognized
principle that it is the final end user who ultimately shoulders the tax; render the
remittance of the tax on a per transaction basis impossible. Thus, the VAT is delivered by
the purchaser not directly to the government but to the seller, who then collates the VAT
received and remits it to the government every quarter. The process may seem simple if
cast in this manner, but there is a wrinkle, due to the offsetting mechanism designed to
ultimately make the end consumer bear the cost of the VAT.
25.ID.; ID.; ID.; INPUT TAX; DEFINED. This mechanism is employed through the
introduction of two concepts, the input tax and the output tax. Section 110 (A) of the
National Internal Revenue Code defines the input tax as the VAT due from or paid by a
VAT-registered person on the importation of goods or local purchase of goods and
services in the course of trade or business, from a VAT registered person.
26.ID.; ID.; ID.; ALLOWS FOR A MECHANISM BY WHICH THE BUSINESS IS ABLE TO
RECOVER THE INPUT VALUE-ADDED TAX THAT IT PAID. Since VAT is a final tax that is
supposed to be ultimately shouldered by the end consumer, the VAT system allows for a
mechanism by which the business is able to recover the input VAT that it paid. This
comes into play when the business, having transformed the raw materials into consumer
goods, sells these goods to the public. As widely known, the consumer pays to the
business an additional amount of 10% of the purchase price as VAT. As to the business,
this VAT payments it collects from the consumer represents output VAT, which is formally
described under Section 110 (A) of the NIRC as "the value-added tax due on the sale or
lease of taxable goods or properties or services by" by any VAT-registered person. The
output VAT collected by the business from the consumers accumulates, until the end of
every quarter, when the enterprise is obliged to remit the collected output VAT to the

government. This is where the crediting mechanism comes into play. Since the business
is entitled to recover the prepaid input VAT, it does so in every quarter by applying the
amount of prepaid input VAT against the collected output VAT which is to be remitted. If
the output VAT collected exceeds the prepaid input VAT, then the amount of input VAT is
deducted from the output VAT, and it is entitled to remit only the remainder as output
VAT to the government. . . . On the other hand, if the input VAT prepaid exceeds the
output VAT collected, then the business need not remit any amount as output VAT for the
quarter. Moreover, the difference between the input VAT and the output VAT may be
credited as input VAT by the business in the succeeding quarter.
27.ID.; REPUBLIC ACT NO. 9337; ALL HOPE FOR ENTREPRENEURIAL STABILITY IS DASHED
WITH THE IMPOSITION OF THE 70% CAP. All hope for entrepreneurial stability is
dashed with the imposition of the 70% cap. Under the E-VAT Law, the business,
regardless of stability or financial capability, is obliged to remit to the government every
quarter at least 30% of the output VAT collected from customers, or roughly 3% of the
amount of gross sales. Thus, if a quarterly gross sales of Y Business totaled P1,000,000,
and Y is prudent enough to keep its capital expenses down to P980,000, it would then
appear on paper that Y incurred a profit of P20,000. However, with the 70% cap, Y would
be obliged to remit to the government P30,000, thus wiping out the profit margin for the
quarter. Y would be entitled to credit the excess input VAT it prepaid for the next quarter,
but the continuous operation of the 70% cap obviates whatever benefits this may give,
and cause the accumulation of the unutilized creditable input VAT which should be
returned to the business. . . . The 70% cap is not merely an unwise imposition. It is a
burden designed, either through sheer heedlessness or cruel calculation, to kill off the
small and medium enterprises that are the soul, if not the heart, of our economy. It is not
merely an undue taking of property, but constitutes an unjustified taking of life as well.
28.ID.; ID.; THE MAJORITY FAILS TO CONSIDER TIME VALUE FOR MONEY. The majority
fails to consider one of the most important concepts in finance, time value for money.
Simply put, the value of one peso is worth more today than in 2006. Money that you hold
today is worth more because you can invest it and earn interest. By reason of the 70%
cap, the amount of input VAT credit that remains unutilized would continue to
accumulate for months and years. The longer the amount remains unutilized, the higher
the degree of its depreciation in value, in accordance with the concept of time value of
money. Even assuming that the business eventually recovers the input VAT credit, the
sum recovered would have decreased in practical value.
29.ID.; ID.; THE EFFECT OF THE 70% CAP IS TO EFFECTIVELY IMPOSE A TAX AMOUNTING
TO 3% OF GROSS REVENUE. Only stable businesses with substantial cash flows, or
extraordinarily successful enterprises will be able to remain in operation should the 70%
cap be retained. The effect of the 70% cap is to effectively impose a tax amounting to
3% of gross revenue. The amount may seem insignificant to those without working
knowledge of the ways of business, but anybody who is actually familiar with business
would be well aware the profit margins of the retailing and distribution sectors typically
amount to less than 1% of the gross revenues. A taxpayer has to earn a margin of at
least 3% on gross revenue in order to recoup the losses sustained due to the 70% cap.
But as stated earlier, profits are chancy, and the entrepreneur does not have full control
of the conditions that lead to profit.
30.ID.; ID.; THE EFFECT OF THE 70% CAP REMAINS CONSTANT REGARDLESS OF AN
INCREASE IN VOLUME OF THE GOODS SOLD. Even more galling is the fact that the

70% cap, oppressive as it already is to the business establishment, even limits the
options of the business to recover the unutilized input VAT credit. During the
deliberations, the argument was raised that the problem presented by the 70% cap was
a business problem, which can only be solved by business. Yet there is only one viable
option for the enterprise to resolve the problem, and that is to increase the selling price
of goods. It would be incorrect to assume that increase the volume of the goods sold
could solve the problem, since for items with the same purchasing cost, the effect of the
70% cap remains constant regardless of an increase in volume.
31.ID.; ID.; BASIC ITEMS OF EXPENDITURE CANNOT SIMPLY BE REDUCED AS TO DO SO
WILL IMPAIR THE ABILITY OF THE BUSINESS TO OPERATE ON A DAILY BASIS. It is easy
to admonish both the consumer and the enterprise to cut back on expenditures to
survive the new E-VAT Law. However, this can be realistically expected only of the
consumer. The small/medium enterprise cannot just cut back easily on expenditures in
order to survive the implementation of the E-VAT Law. For such businesses, expenditures
do not normally contemplate unnecessary expenses such as executive perks which can
be dispensed with or without injury to the enterprises. These expenditures pertain to
expenses necessary for the survival of the enterprise, such as wages, overhead and
purchase of raw materials. Those three basic items of expenditure cannot simply be
reduced, as to do so will impair the ability of the business to operate on a daily basis.
And reduction of expenditures is not the exclusive antidote to these impositions under
the E-VAT Law, as there must also be a corresponding increase in the amount of gross
sales. To do so though, would require an increase in the selling price, dampening
consumer enthusiasm, and further impairing the ability of the enterprise to recover from
the E-VAT Law. This is your basic Catch-22 situation no matter which means the
enterprise employs to recover from the E-VAT Law, it will still go down in flames.
32.ID.; ID.; THE 70% CAP DOES NOT INCREASE THE GOVERNMENT'S REVENUE. And
what legitimate, germane purposes does this lethal 70% cap serve? It certainly does not
increase the government's revenue since the unutilized creditable input VAT should be
entered in the government books as a debt payable as it is supposed to be eventually
repaid to the taxpayer, and so on the contrary it increases the government's debts. I do
see that the 70% cap temporarily allows the government to brag to the world of an
increased cash flow. But this situation would be akin to the provincial man who borrows
from everybody in the barrio in order to show off money and maintain the pretense of
prosperity to visiting city relatives. The illusion of wealth is hardly a legitimate state
purpose, especially if projected at the expense of the very business life of the country.
33.ID.; ID.; THE REFUND OR TAX CREDIT CERTIFICATE MAY ONLY BE ISSUED UPON THE
TWO INSTANCES. This provision, which could have provided foreseeable and useful
relief to the VAT-registered person, was deleted under the new E-VAT Law. At present, the
refund or tax credit certificate may only be issued upon two instances: on zero-rated or
effectively zero-rated sales, and upon cancellation of VAT registration due to retirement
from or cessation of business. This is the cruelest cut of all. Only after the business
ceases to be may the State be compelled to repay the entire amount of the unutilized
input tax. It is like a macabre form of sweepstakes wherein the winner is to be paid his
fortune only when he is already dead. Aanhin pa ang damo kung patay na ang kabayo.
34.ID.; ID.; INABILITY TO IMMEDIATELY CREDIT THE UNUTILIZED INPUT VALUE-ADDED TAX
COULD CAUSE SUCH PREPAID AMOUNT TO BE RECOGNIZED IN THE ACCOUNTING BOOKS
AS A LOSS. Moreover, the inability to immediately credit or otherwise recover the

unutilized input VAT could cause such prepaid amount to actually be recognized in the
accounting books as a loss. Under international accounting practices, the unutilized input
VAT due to the 70% cap would not even be recognized as a deferred asset. The same
would not hold true if the 70% cap were eliminated. Under the International Accounting
Standards, the unutilized input VAT credit is recognized as an asset "to the extent that it
is probable that future taxable profit will be available against which the unused tax
losses and unused tax credits can be utili[z]ed". Thus, if the immediate accreditation of
the input VAT credit can be obtained, as it would without the 70% cap, the asset could be
recognized. However, the same Standards hold that "[t]o the extent that it is not
probable that taxable profit will be available against which the unused tax losses or
unused tax credits can be utilised, the deferred tax asset is not recognised." As
demonstrated, the continuous operation of the 70% cap precludes the recovery of input
VAT prepaid months or years prior. Moreover, the inability to claim a refund or tax credit
certificate until after the business has already ceased virtually renders it improbable for
the input VAT to be recovered. As such, under the International Accounting Standards, it
is with all likelihood that the prepaid input VAT, ostensibly creditable, would actually be
reflected as a loss. What heretofore was recognized as an asset would now, with the
imposition of the 70% cap, be now considered as a loss, enhancing the view that the
70% cap is ultimately confiscatory in nature.
35.ID.; ID.; UNUTILIZED INPUT VALUE-ADDED TAX CREDIT MAY BE RECOGNIZED AS AN
ASSET. Tellingly, the BIR itself has recognized that unutilized input VAT is one of those
assets, corporate attributes or property rights that, in the event of a merger, are
transferred to the surviving corporation by operation of law. Assets would fall under the
purview of property under the due process clause, and if the taxing arm of the State
recognizes that such property belongs to the taxpayer and not to the State, then due
respect should be given to such expert opinion. Even under the International Accounting
Standards I adverted to above, the unutilized input VAT credit may be recognized as an
asset "to the extent that it is probable that future taxable profit will be available against
which the unused tax losses and unused tax credits can be utilised". If not probable, it
would be recognized as a loss. Since these international standards, duly recognized by
the Securities and Exchange Commission as controlling in this jurisdiction, attribute
tangible gain or loss to the VAT credit, it necessarily follows that there is proprietary
value attached to such gain or loss.
36.ID.; ID.; PREPAID INPUT TAX REPRESENTS UNUTILIZED PROFIT. Moreover, the
prepaid input tax represents unutilized profit, which can only be utilized if it is refunded
or credited to output taxes. To assert that the input VAT is merely a privilege is to
correspondingly claim that the business profit is similarly a mere privilege. The
Constitution itself recognizes the right to profit by private enterprises. As I stated earlier,
one of the enunciated State policies under the Constitution is the recognition of the
indispensable role of the private sector, the encouragement of private enterprise, and
the provision of incentives to needed investments. Moreover, the Constitution also
requires the State to recognize the right of enterprises to reasonable returns on
investments, and to expansion and growth. This, I believe, encompasses profit.
37.ID.; ID.; AMORTIZATION PLAN WILL PROVE ESPECIALLY FATAL TO START-UPS AND
OTHER NEW BUSINESSES. However, this amortization plan will prove especially fatal
to start-ups and other new businesses, which need to purchase capital goods in order to
start up their new businesses. It is a known fact in the financial community that a
majority of businesses start earning profit only after the second or third year, and many

enterprises do not even get to survive that long. The first few years of a business are the
most crucial to its survival, and any financial benefits it can obtain in those years, no
matter how miniscule, may spell the difference between life and death. For such
emerging businesses, it is already difficult under the present system to recover the
prepaid input VAT from the output VAT collected from customers because initial sales
volumes are usually low. With this further limitation, diminishing as it does any
opportunity to have a sustainable cash flow, the ability of new businesses to survive the
first three years becomes even more endangered.
38.ID.; ID.; EXISTING SMALL TO MEDIUM ENTERPRISES ARE IMPERILED BY THE 60 MONTH
AMORTIZATION RESTRICTION. Even existing small to medium enterprises are imperiled
by this 60 month amortization restriction, especially considering the application of the
70% cap. The additional purchase of capital goods bears as a means of adding value to
the consumer good, as a means to justify the increased selling price. However, the
purchase of capital goods in excess of P1,000,000.00 would impose another burden on
the small to medium enterprise by further restricting their ability to immediately recover
the entire prepaid input VAT (which would exceed at least P100,000.00), as they would
be compelled to wait for at least five years before they can do so. Another hurdle is
imposed for such small to medium enterprise to obtain the profit margin critical to
survival. For some lucky enterprises who may be able to survive the injury brought about
by the 70% cap, this 60 month amortization period might instead provide the mortal
head wound.
39.ID.; ID.; INCREASED ADMINISTRATIVE BURDEN ON THE TAXPAYER SHOULD NOT BE
DISCOUNTED. Moreover, the increased administrative burden on the taxpayer should
not be discounted, considering this Court's previous recognition of the aims of the VAT
system to "rationalize the system of taxes on goods and services, [and] simplify tax
administration." With the amortization requirement, the taxpayer would be forced to
segregate assets into several classes and strictly monitor the useful life of assets so that
proper classification can be made. The administrative requirements of the taxpayer in
order to monitor the input VAT from the purchase of capital assets thus has exponentially
increased.
40.ID.; ID.; 5% WITHHOLDING VALUE-ADDED TAX ON SALES; DELETION OF THE CREDIT
APPARATUS EFFECTIVELY COMPELS THE PRIVATE ENTERPRISE TRANSACTING WITH THE
GOVERNMENT TO SHOULDER THE OUTPUT VALUE-ADDED TAX. The principle that the
Government and its subsidiaries may deduct and withhold a final value-added tax on its
purchase of goods and services is not new, as the NIRC had allowed such deduction and
withholding at the rate of 3% of the gross payment for the purchase of goods, and 6% of
the gross receipts for services. However, the NIRC had also provided that this tax
withheld would also be creditable against the VAT liability of the seller or contractor, a
mechanism that was deleted by the E-VAT law. The deletion of this credit apparatus
effectively compels the private enterprise transacting with the government to shoulder
the output VAT that should have been paid by the government in excess of 5% of the
gross selling price, and at the same time unduly burdens the private enterprise by
precluding it from applying any creditable input VAT on the same transaction. Notably,
the removal of the credit mechanism runs contrary to the essence of the VAT system,
which characteristically allows the crediting of input taxes against output taxes. Without
such crediting mechanism, which allows the shifting of the VAT to only the final end user,
the tax becomes a straightforward tax on business or income. The effect on the
enterprise doing business with the government would be that two taxes would be

imposed on the income by the business derived on such transaction: the regular
personal or corporate income tax on such income, and this final withholding tax of 5%.
41.ID.; ID.; ID.; THE END RESULT OF THE DISCRIMINATION IS DOUBLE TAXATION. It
unfairly discriminates against entities which contract with the government by imposing
an additional tax on the income derived from such transactions. The end result of such
discrimination is double taxation on income that is both oppressive and confiscatory. . . .
Double taxation means taxing for the same tax period the same thing or activity twice,
when it should be taxed but once, for the same purpose and with the same kind of
character of tax. Double taxation is not expressly forbidden in our constitution,but the
Court has recognized it as obnoxious "where the taxpayer is taxed twice for the benefit
of the same governmental entity or by the same jurisdiction for the same purpose."
Certainly, both the 5% final tax withheld and the general corporate income tax are both
paid for the benefit of the national government, and for the same incidence of taxation,
the sale/lease of goods and services to the government.
42.ID.; ID.; ID.; EFFECTIVELY DISCOURAGES PRIVATE ENTERPRISES TO DO BUSINESS
WITH THE STATE. This imposition would be grossly unfair for private entities that
transact with the government, especially on a regular basis. It might be argued that the
provision, even if concededly unwise, nonetheless fails to meet the standard of
unconstitutionality, as it affects only those persons or establishments that choose to do
business with the government. However, it is an acknowledged fact that the government
and its subsidiaries rely on contracts with private enterprises in order to be able to carry
out innumerable functions of the State. This provision effectively discourages private
enterprises to do business with the State, as it would impose on the business a higher
rate of tax if it were to transact with the State, as compared to transactions with other
private entities.
43.ID.; BASIC PRINCIPLE; INTELLIGENT TAX POLICY SHOULD EXTEND BEYOND THE
SINGULAR-MINDED GOAL OF RAISING STATE FUNDS. I do lament though that our
government's wholehearted adoption of the VAT system is endemic of what I deem a
flaw in our national tax policy in the last few decades. The power of taxation, inherent in
the State and ever so powerful, has been generally employed by our financial planners
for a solitary purpose: the raising of revenue. Revenue generation is a legitimate purpose
of taxation, but standing alone, it is a woefully unsophisticated design. Intelligent tax
policy should extend beyond the singular-minded goal of raising State funds the oldtime philosophy behind the taxing schemes of war-mongering monarchs and totalitarian
states and should sincerely explore the concept of taxation as a means of providing
genuine incentives to private enterprise to spur economic growth; of promoting
egalitarian social justice that would allow everyone to their fair share of the nation's
wealth.

DECISION
AUSTRIA-MARTINEZ, J p:
The expenses of government, having for their object the interest of all, should be borne
by everyone, and the more man enjoys the advantages of society, the more he ought to
hold himself honored in contributing to those expenses.

-Anne Robert Jacques Turgot (1727-1781)

French statesman and economist
Mounting budget deficit, revenue generation, inadequate fiscal allocation for education,
increased emoluments for health workers, and wider coverage for full value-added tax
benefits . . . these are the reasons why Republic Act No. 9337 (R.A. No. 9337) 1 was
enacted. Reasons, the wisdom of which, the Court even with its extensive constitutional
power of review, cannot probe. The petitioners in these cases, however, question not
only the wisdom of the law, but also perceived constitutional infirmities in its passage.
Every law enjoys in its favor the presumption of constitutionality. Their arguments
notwithstanding, petitioners failed to justify their call for the invalidity of the law. Hence,
R.A. No. 9337 is not unconstitutional.
LEGISLATIVE HISTORY
R.A. No. 9337 is a consolidation of three legislative bills namely, House Bill Nos. 3555 and
3705, and Senate Bill No. 1950.
House Bill No. 3555 2 was introduced on first reading on January 7, 2005. The House
Committee on Ways and Means approved the bill, in substitution of House Bill No. 1468,
which Representative (Rep.) Eric D. Singson introduced on August 8, 2004. The President
certified the bill on January 7, 2005 for immediate enactment. On January 27, 2005, the
House of Representatives approved the bill on second and third reading.
House Bill No. 3705 3 on the other hand, substituted House Bill No. 3105 introduced by
Rep. Salacnib F. Baterina, and House Bill No. 3381 introduced by Rep. Jacinto V. Paras. Its
"mother bill" is House Bill No. 3555. The House Committee on Ways and Means approved
the bill on February 2, 2005. The President also certified it as urgent on February 8, 2005.
The House of Representatives approved the bill on second and third reading on February
28, 2005.
Meanwhile, the Senate Committee on Ways and Means approved Senate Bill No. 1950 4
on March 7, 2005, "in substitution of Senate Bill Nos. 1337, 1838 and 1873, taking into
consideration House Bill Nos. 3555 and 3705." Senator Ralph G. Recto sponsored Senate
Bill No. 1337, while Senate Bill Nos. 1838 and 1873 were both sponsored by Sens.
Franklin M. Drilon, Juan M. Flavier and Francis N. Pangilinan. The President certified the
bill on March 11, 2005, and was approved by the Senate on second and third reading on
April 13, 2005.
On the same date, April 13, 2005, the Senate agreed to the request of the House of
Representatives for a committee conference on the disagreeing provisions of the
proposed bills.
Before long, the Conference Committee on the Disagreeing Provisions of House Bill No.
3555, House Bill No. 3705, and Senate Bill No. 1950, "after having met and discussed in
full free and conference," recommended the approval of its report, which the Senate did
on May 10, 2005, and with the House of Representatives agreeing thereto the next day,
May 11, 2005.

On May 23, 2005, the enrolled copy of the consolidated House and Senate version was
transmitted to the President, who signed the same into law on May 24, 2005. Thus, came
R.A. No. 9337.
July 1, 2005 is the effectivity date of R.A. No. 9337. 5 When said date came, the Court
issued a temporary restraining order, effective immediately and continuing until further
orders, enjoining respondents from enforcing and implementing the law.
Oral arguments were held on July 14, 2005. Significantly, during the hearing, the Court
speaking through Mr. Justice Artemio V. Panganiban, voiced the rationale for its issuance
of the temporary restraining order on July 1, 2005, to wit:
J. PANGANIBAN
. . . But before I go into the details of your presentation, let me just tell you a little
background. You know when the law took effect on July 1, 2005, the Court issued a TRO
at about 5 o'clock in the afternoon. But before that, there was a lot of complaints aired
on television and on radio. Some people in a gas station were complaining that the gas
prices went up by 10%. Some people were complaining that their electric bill will go up
by 10%. Other times people riding in domestic air carrier were complaining that the
prices that they'll have to pay would have to go up by 10%. While all that was being
aired, per your presentation and per our own understanding of the law, that's not true.
It's not true that the e-vat law necessarily increased prices by 10% uniformly isn't it?
ATTY. BANIQUED
No, Your Honor. ACTIcS
J. PANGANIBAN
It is not?
ATTY. BANIQUED
It's not, because, Your Honor, there is an Executive Order that granted the Petroleum
companies some subsidy . . . interrupted
J. PANGANIBAN
That's correct . . .
ATTY. BANIQUED
. . . and therefore that was meant to temper the impact . . . interrupted
J. PANGANIBAN
. . . mitigating measures . . .
ATTY. BANIQUED

Yes, Your Honor.

J. PANGANIBAN
As a matter of fact a part of the mitigating measures would be the elimination of the
Excise Tax and the import duties. That is why, it is not correct to say that the VAT as to
petroleum dealers increased prices by 10%.
ATTY. BANIQUED
Yes, Your Honor.
J. PANGANIBAN
And therefore, there is no justification for increasing the retail price by 10% to cover the
E-Vat tax. If you consider the excise tax and the import duties, the Net Tax would
probably be in the neighborhood of 7%? We are not going into exact figures I am just
trying to deliver a point that different industries, different products, different services are
hit differently. So it's not correct to say that all prices must go up by 10%.

ATTY. BANIQUED
You're right, Your Honor.
J. PANGANIBAN
Now. For instance, Domestic Airline companies, Mr. Counsel, are at present imposed a
Sales Tax of 3%. When this E-Vat law took effect the Sales Tax was also removed as a
mitigating measure. So, therefore, there is no justification to increase the fares by 10%
at best 7%, correct?
ATTY. BANIQUED
I guess so, Your Honor, yes.
J. PANGANIBAN
There are other products that the people were complaining on that first day, were being
increased arbitrarily by 10%. And that's one reason among many others this Court had to
issue TRO because of the confusion in the implementation. That's why we added as an
issue in this case, even if it's tangentially taken up by the pleadings of the parties, the
confusion in the implementation of the E-vat. Our people were subjected to the mercy of
that confusion of an across the board increase of 10%, which you yourself now admit and
I think even the Government will admit is incorrect. In some cases, it should be 3% only,
in some cases it should be 6% depending on these mitigating measures and the location
and situation of each product, of each service, of each company, isn't it?
ATTY. BANIQUED

Yes, Your Honor.

J. PANGANIBAN
Alright. So that's one reason why we had to issue a TRO pending the clarification of all
these and we wish the government will take time to clarify all these by means of a more
detailed implementing rules, in case the law is upheld by this Court. . . . 6
The Court also directed the parties to file their respective Memoranda.
G.R. No. 168056
Before R.A. No. 9337 took effect, petitioners ABAKADA GURO Party List, et al., filed a
petition for prohibition on May 27, 2005. They question the constitutionality of Sections
4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and 108, respectively, of the
National Internal Revenue Code (NIRC). Section 4 imposes a 10% VAT on sale of goods
and properties, Section 5 imposes a 10% VAT on importation of goods, and Section 6
imposes a 10% VAT on sale of services and use or lease of properties. These questioned
provisions contain a uniform proviso authorizing the President, upon recommendation of
the Secretary of Finance, to raise the VAT rate to 12%, effective January 1, 2006, after
any of the following conditions have been satisfied, to wit:
. . . That the President, upon the recommendation of the Secretary of Finance, shall,
effective January 1, 2006, raise the rate of value-added tax to twelve percent (12%),
after any of the following conditions has been satisfied:
(i)Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the
previous year exceeds two and four-fifth percent (2 4/5%); or
(ii)National government deficit as a percentage of GDP of the previous year exceeds one
and one-half percent (1 1/2%).
Petitioners argue that the law is unconstitutional, as it constitutes abandonment by
Congress of its exclusive authority to fix the rate of taxes under Article VI, Section 28(2)
of the 1987 Philippine Constitution.
G.R. No. 168207
On June 9, 2005, Sen. Aquilino Q. Pimentel, Jr., et al., filed a petition for certiorari likewise
assailing the constitutionality of Sections 4, 5 and 6 of R.A. No. 9337.
Aside from questioning the so-called stand-by authority of the President to increase the
VAT rate to 12%, on the ground that it amounts to an undue delegation of legislative
power, petitioners also contend that the increase in the VAT rate to 12% contingent on
any of the two conditions being satisfied violates the due process clause embodied in
Article III, Section 1 of the Constitution, as it imposes an unfair and additional tax burden
on the people, in that: (1) the 12% increase is ambiguous because it does not state if the
rate would be returned to the original 10% if the conditions are no longer satisfied; (2)
the rate is unfair and unreasonable, as the people are unsure of the applicable VAT rate
from year to year; and (3) the increase in the VAT rate, which is supposed to be an
incentive to the President to raise the VAT collection to at least 2 4/5 of the GDP of the
previous year, should only be based on fiscal adequacy.

Petitioners further claim that the inclusion of a stand-by authority granted to the
President by the Bicameral Conference Committee is a violation of the "no-amendment
rule" upon last reading of a bill laid down in Article VI, Section 26(2) of the Constitution.
G.R. No. 168461
Thereafter, a petition for prohibition was filed on June 29, 2005, by the Association of
Pilipinas Shell Dealers, Inc., et al., assailing the following provisions of R.A. No. 9337:
1)Section 8, amending Section 110 (A)(2) of the NIRC,requiring that the input tax on
depreciable goods shall be amortized over a 60-month period, if the acquisition,
excluding the VAT components, exceeds One Million Pesos (P1,000,000.00);
2)Section 8, amending Section 110 (B) of the NIRC,imposing a 70% limit on the amount
of input tax to be credited against the output tax; and EIDTAa
3)Section 12, amending Section 114 (c) of the NIRC,authorizing the Government or any
of its political subdivisions, instrumentalities or agencies, including GOCCs, to deduct a
5% final withholding tax on gross payments of goods and services, which are subject to
10% VAT under Sections 106 (sale of goods and properties) and 108 (sale of services and
use or lease of properties) of the NIRC.
Petitioners contend that these provisions are unconstitutional for being arbitrary,
oppressive, excessive, and confiscatory.
Petitioners' argument is premised on the constitutional right of non-deprivation of life,
liberty or property without due process of law under Article III, Section 1 of the
Constitution. According to petitioners, the contested sections impose limitations on the
amount of input tax that may be claimed. Petitioners also argue that the input tax
partakes the nature of a property that may not be confiscated, appropriated, or limited
without due process of law. Petitioners further contend that like any other property or
property right, the input tax credit may be transferred or disposed of, and that by
limiting the same, the government gets to tax a profit or value-added even if there is no
profit or value-added.
Petitioners also believe that these provisions violate the constitutional guarantee of
equal protection of the law under Article III, Section 1 of the Constitution, as the
limitation on the creditable input tax if: (1) the entity has a high ratio of input tax; or (2)
invests in capital equipment; or (3) has several transactions with the government, is not
based on real and substantial differences to meet a valid classification.
Lastly, petitioners contend that the 70% limit is anything but progressive, violative of
Article VI, Section 28(1) of the Constitution, and that it is the smaller businesses with
higher input tax to output tax ratio that will suffer the consequences thereof for it wipes
out whatever meager margins the petitioners make.
G.R. No. 168463
Several members of the House of Representatives led by Rep. Francis Joseph G. Escudero
filed this petition for certiorari on June 30, 2005. They question the constitutionality of
R.A. No. 9337 on the following grounds:

1)Sections 4, 5, and 6 of R.A. No. 9337 constitute an undue delegation of legislative

power, in violation of Article VI, Section 28(2) of the Constitution;
2)The Bicameral Conference Committee acted without jurisdiction in deleting the no pass
on provisions present in Senate Bill No. 1950 and House Bill No. 3705; and
3)Insertion by the Bicameral Conference Committee of Sections 27, 28, 34, 116, 117,
119, 121, 125, 7 148, 151, 236, 237 and 288, which were present in Senate Bill No.
1950, violates Article VI, Section 24(1) of the Constitution, which provides that all
appropriation, revenue or tariff bills shall originate exclusively in the House of
Representatives
G.R. No. 168730
On the eleventh hour, Governor Enrique T. Garcia filed a petition for certiorari and
prohibition on July 20, 2005, alleging unconstitutionality of the law on the ground that
the limitation on the creditable input tax in effect allows VAT-registered establishments to
retain a portion of the taxes they collect, thus violating the principle that tax collection
and revenue should be solely allocated for public purposes and expenditures. Petitioner
Garcia further claims that allowing these establishments to pass on the tax to the
consumers is inequitable, in violation of Article VI, Section 28(1) of the Constitution.
RESPONDENTS' COMMENT
The Office of the Solicitor General (OSG) filed a Comment in behalf of respondents.
Preliminarily, respondents contend that R.A. No. 9337 enjoys the presumption of
constitutionality and petitioners failed to cast doubt on its validity.
Relying on the case of Tolentino vs. Secretary of Finance, 235 SCRA 630 (1994),
respondents argue that the procedural issues raised by petitioners, i.e., legality of the
bicameral proceedings, exclusive origination of revenue measures and the power of the
Senate concomitant thereto, have already been settled. With regard to the issue of
undue delegation of legislative power to the President, respondents contend that the law
is complete and leaves no discretion to the President but to increase the rate to 12%
once any of the two conditions provided therein arise.
Respondents also refute petitioners' argument that the increase to 12%, as well as the
70% limitation on the creditable input tax, the 60-month amortization on the purchase or
importation of capital goods exceeding P1,000,000.00, and the 5% final withholding tax
by government agencies, is arbitrary, oppressive, and confiscatory, and that it violates
the constitutional principle on progressive taxation, among others.
Finally, respondents manifest that R.A. No. 9337 is the anchor of the government's fiscal
reform agenda. A reform in the value-added system of taxation is the core revenue
measure that will tilt the balance towards a sustainable macroeconomic environment
necessary for economic growth.

ISSUES
The Court defined the issues, as follows:
PROCEDURAL ISSUE

Whether R.A. No. 9337 violates the following provisions of the Constitution:
a.Article VI, Section 24, and
b.Article VI, Section 26(2)
SUBSTANTIVE ISSUES
1.Whether Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and 108 of
the NIRC,violate the following provisions of the Constitution:
a.Article VI, Section 28(1), and
b.Article VI, Section 28(2)
2.Whether Section 8 of R.A. No. 9337, amending Sections 110(A)(2) and 110(B) of the
NIRC;and Section 12 of R.A. No. 9337, amending Section 114(C) of the NIRC,violate the
following provisions of the Constitution:
a.Article VI, Section 28(1), and
b.Article III, Section 1
RULING OF THE COURT
As a prelude, the Court deems it apt to restate the general principles and concepts of
value-added tax (VAT), as the confusion and inevitably, litigation, breeds from a
fallacious notion of its nature.
The VAT is a tax on spending or consumption. It is levied on the sale, barter, exchange or
lease of goods or properties and services. 8 Being an indirect tax on expenditure, the
seller of goods or services may pass on the amount of tax paid to the buyer, 9 with the
seller acting merely as a tax collector. 10 The burden of VAT is intended to fall on the
immediate buyers and ultimately, the end-consumers. cEAHSC
In contrast, a direct tax is a tax for which a taxpayer is directly liable on the transaction
or business it engages in, without transferring the burden to someone else. 11 Examples
are individual and corporate income taxes, transfer taxes, and residence taxes. 12
In the Philippines, the value-added system of sales taxation has long been in existence,
albeit in a different mode. Prior to 1978, the system was a single-stage tax computed
under the "cost deduction method" and was payable only by the original sellers. The
single-stage system was subsequently modified, and a mixture of the "cost deduction
method" and "tax credit method" was used to determine the value-added tax payable.
13 Under the "tax credit method," an entity can credit against or subtract from the VAT
charged on its sales or outputs the VAT paid on its purchases, inputs and imports. 14
It was only in 1987, when President Corazon C. Aquino issued Executive Order No. 273,
that the VAT system was rationalized by imposing a multi-stage tax rate of 0% or 10% on
all sales using the "tax credit method." 15

E.O. No. 273 was followed by R.A. No. 7716 or the Expanded VAT Law, 16 R.A. No. 8241
or the Improved VAT Law, 17 R.A. No. 8424 or the Tax Reform Act of 1997, 18 and finally,
the presently beleaguered R.A. No. 9337, also referred to by respondents as the VAT
Reform Act.
The Court will now discuss the issues in logical sequence.
PROCEDURAL ISSUE
I.
Whether R.A. No. 9337 violates the following provisions of the Constitution:
a.Article VI, Section 24, and
b.Article VI, Section 26(2)
A.The Bicameral Conference Committee
Petitioners Escudero, et al., and Pimentel, et al., allege that the Bicameral Conference
Committee exceeded its authority by:
1)Inserting the stand-by authority in favor of the President in Sections 4, 5, and 6 of R.A.
No. 9337;
2)Deleting entirely the no pass-on provisions found in both the House and Senate bills;
3)Inserting the provision imposing a 70% limit on the amount of input tax to be credited
against the output tax; and
4)Including the amendments introduced only by Senate Bill No. 1950 regarding other
kinds of taxes in addition to the value-added tax.
Petitioners now beseech the Court to define the powers of the Bicameral Conference
Committee.
It should be borne in mind that the power of internal regulation and discipline are
intrinsic in any legislative body for, as unerringly elucidated by Justice Story, "[i]f the
power did not exist, it would be utterly impracticable to transact the business of the
nation, either at all, or at least with decency, deliberation, and order." 19 Thus, Article VI,
Section 16 (3) of the Constitution provides that "each House may determine the rules of
its proceedings." Pursuant to this inherent constitutional power to promulgate and
implement its own rules of procedure, the respective rules of each house of Congress
provided for the creation of a Bicameral Conference Committee.
Thus, Rule XIV, Sections 88 and 89 of the Rules of House of Representatives provides as
follows:
Sec. 88.Conference Committee. In the event that the House does not agree with the
Senate on the amendment to any bill or joint resolution, the differences may be settled
by the conference committees of both chambers.
In resolving the differences with the Senate, the House panel shall, as much as possible,
adhere to and support the House Bill. If the differences with the Senate are so substantial

that they materially impair the House Bill, the panel shall report such fact to the House
for the latter's appropriate action.
Sec. 89.Conference Committee Reports. . . . Each report shall contain a detailed,
sufficiently explicit statement of the changes in or amendments to the subject measure.
xxx xxx xxx
The Chairman of the House panel may be interpellated on the Conference Committee
Report prior to the voting thereon. The House shall vote on the Conference Committee
Report in the same manner and procedure as it votes on a bill on third and final reading.
Rule XII, Section 35 of the Rules of the Senate states:
Sec. 35.In the event that the Senate does not agree with the House of Representatives
on the provision of any bill or joint resolution, the differences shall be settled by a
conference committee of both Houses which shall meet within ten (10) days after their
composition. The President shall designate the members of the Senate Panel in the
conference committee with the approval of the Senate.
Each Conference Committee Report shall contain a detailed and sufficiently explicit
statement of the changes in, or amendments to the subject measure, and shall be signed
by a majority of the members of each House panel, voting separately.
A comparative presentation of the conflicting House and Senate provisions and a
reconciled version thereof with the explanatory statement of the conference committee
shall be attached to the report.
xxx xxx xxx
The creation of such conference committee was apparently in response to a problem, not
addressed by any constitutional provision, where the two houses of Congress find
themselves in disagreement over changes or amendments introduced by the other
house in a legislative bill. Given that one of the most basic powers of the legislative
branch is to formulate and implement its own rules of proceedings and to discipline its
members, may the Court then delve into the details of how Congress complies with its
internal rules or how it conducts its business of passing legislation? Note that in the
present petitions, the issue is not whether provisions of the rules of both houses creating
the bicameral conference committee are unconstitutional, but whether the bicameral
conference committee has strictly complied with the rules of both houses, thereby
remaining within the jurisdiction conferred upon it by Congress.
In the recent case of Farias vs. The Executive Secretary, 20 the Court En Banc,
unanimously reiterated and emphasized its adherence to the "enrolled bill doctrine,"
thus, declining therein petitioners' plea for the Court to go behind the enrolled copy of
the bill. Assailed in said case was Congress's creation of two sets of bicameral
conference committees, the lack of records of said committees' proceedings, the alleged
violation of said committees of the rules of both houses, and the disappearance or
deletion of one of the provisions in the compromise bill submitted by the bicameral
conference committee. It was argued that such irregularities in the passage of the law
nullified R.A. No. 9006, or the Fair Election Act. ADCETI

Striking down such argument, the Court held thus:

Under the "enrolled bill doctrine," the signing of a bill by the Speaker of the House and
the Senate President and the certification of the Secretaries of both Houses of Congress
that it was passed are conclusive of its due enactment. A review of cases reveals the
Court's consistent adherence to the rule. The Court finds no reason to deviate from the
salutary rule in this case where the irregularities alleged by the petitioners mostly
involved the internal rules of Congress, e.g., creation of the 2nd or 3rd Bicameral
Conference Committee by the House. This Court is not the proper forum for the
enforcement of these internal rules of Congress, whether House or Senate. Parliamentary
rules are merely procedural and with their observance the courts have no concern.
Whatever doubts there may be as to the formal validity of Rep. Act No. 9006 must be
resolved in its favor. The Court reiterates its ruling in Arroyo vs. De Venecia, viz.:
But the cases, both here and abroad, in varying forms of expression, all deny to the
courts the power to inquire into allegations that, in enacting a law, a House of Congress
failed to comply with its own rules, in the absence of showing that there was a violation
of a constitutional provision or the rights of private individuals. In Osmea v. Pendatun, it
was held: "At any rate, courts have declared that 'the rules adopted by deliberative
bodies are subject to revocation, modification or waiver at the pleasure of the body
adopting them.' And it has been said that "Parliamentary rules are merely procedural,
and with their observance, the courts have no concern. They may be waived or
disregarded by the legislative body." Consequently, "mere failure to conform to
parliamentary usage will not invalidate the action (taken by a deliberative body) when
the requisite number of members have agreed to a particular measure." 21 (Emphasis
supplied)

The foregoing declaration is exactly in point with the present cases, where petitioners
allege irregularities committed by the conference committee in introducing changes or
deleting provisions in the House and Senate bills. Akin to the Farias case, 22 the
present petitions also raise an issue regarding the actions taken by the conference
committee on matters regarding Congress' compliance with its own internal rules. As
stated earlier, one of the most basic and inherent power of the legislature is the power to
formulate rules for its proceedings and the discipline of its members. Congress is the
best judge of how it should conduct its own business expeditiously and in the most
orderly manner. It is also the sole concern of Congress to instill discipline among the
members of its conference committee if it believes that said members violated any of its
rules of proceedings. Even the expanded jurisdiction of this Court cannot apply to
questions regarding only the internal operation of Congress, thus, the Court is wont to
deny a review of the internal proceedings of a co-equal branch of government.
Moreover, as far back as 1994 or more than ten years ago, in the case of Tolentino vs.
Secretary of Finance, 23 the Court already made the pronouncement that "[i]f a change
is desired in the practice [of the Bicameral Conference Committee] it must be sought in
Congress since this question is not covered by any constitutional provision but is only an
internal rule of each house." 24 To date, Congress has not seen it fit to make such
changes adverted to by the Court. It seems, therefore, that Congress finds the practices

of the bicameral conference committee to be very useful for purposes of prompt and
efficient legislative action.
Nevertheless, just to put minds at ease that no blatant irregularities tainted the
proceedings of the bicameral conference committees, the Court deems it necessary to
dwell on the issue. The Court observes that there was a necessity for a conference
committee because a comparison of the provisions of House Bill Nos. 3555 and 3705 on
one hand, and Senate Bill No. 1950 on the other, reveals that there were indeed
disagreements. As pointed out in the petitions, said disagreements were as follows:
House Bill No. 3555House Bill No. 3705Senate Bill No. 1950
With regard to "Stand-By Authority" in favor of President
Provides for 12% VATProvides for 12% VATProvides for a single
on every sale of goodsin general on sales ofrate of 10% VAT on sale
or properties (amendinggoods or properties andof goods or properties
Sec. 106 of NIRC); 12%reduced rates for sale of(amending Sec. 106 of
VAT on importation ofcertain locallyNIRC), 10% VAT on
goods (amending Sec.manufactured goods andsale of services including
107 of NIRC); and 12%petroleum products andsale of electricity by
VAT on sale of servicesraw materials to be usedgeneration companies,
and use or lease ofin the manufacture thereoftransmission and
properties (amending(amending Sec. 106 ofdistribution companies,
Sec. 108 of NIRC)NIRC); 12% VAT onand use or lease of
importation of goods andproperties (amending
reduced rates for certainSec. 108 of NIRC)
imported products
including petroleum
products (amending Sec.
107 of NIRC); and 12%
VAT on sale of services
and use or lease of
properties and a reduced
rate for certain services
including power
generation (amending
Sec. 108 of NIRC)
With regard to the "no pass-on" provision
No similar provisionProvides that the VATProvides that the VAT
imposed on powerimposed on sales of
generation and on theelectricity by generation
sale of petroleumcompanies and services of
products shall betransmission companies
absorbed by generationand distribution
companies or sellers,companies, as well as
respectively, and shallthose of franchise
not be passed on tograntees of electric
consumersutilities shall not apply

to residential end-users.
VAT shall be absorbed by
generation, transmission,
and distribution
companies.
With regard to 70% limit on input tax credit
Provides that the inputNo similar provisionProvides that the input
tax credit for capitaltax credit for capital
goods on which a VATgoods on which a VAT
has been paid shall behas been paid shall be
equally distributed overequally distributed over
5 years or the depreciable5 years or the depreciable
life of such capital goods;life of such capital goods;
the input tax credit forthe input tax credit for
goods and services othergoods and services other
than capital goods shallthan capital goods shall
not exceed 5% of thenot exceed 90% of the
total amount of suchoutput VAT.
goods and services; and
for persons engaged in
retail trading of goods,
the allowable input tax
credit shall not exceed
11% of the total amount
of goods purchased.
With regard to amendments to be made to NIRC provisions regarding income and excise
taxes
No similar provisionNo similar provisionProvided for amendments
to several NIRC
provisions regarding
corporate income,
percentage, franchise and
excise taxes
The disagreements between the provisions in the House bills and the Senate bill were
with regard to (1) what rate of VAT is to be imposed; (2) whether only the VAT imposed
on electricity generation, transmission and distribution companies should not be passed
on to consumers, as proposed in the Senate bill, or both the VAT imposed on electricity
generation, transmission and distribution companies and the VAT imposed on sale of
petroleum products should not be passed on to consumers, as proposed in the House
bill; (3) in what manner input tax credits should be limited; (4) and whether the NIRC
provisions on corporate income taxes, percentage, franchise and excise taxes should be
amended. CSaHDT
There being differences and/or disagreements on the foregoing provisions of the House
and Senate bills, the Bicameral Conference Committee was mandated by the rules of
both houses of Congress to act on the same by settling said differences and/or

disagreements. The Bicameral Conference Committee acted on the disagreeing

provisions by making the following changes:
1.With regard to the disagreement on the rate of VAT to be imposed, it would appear
from the Conference Committee Report that the Bicameral Conference Committee tried
to bridge the gap in the difference between the 10% VAT rate proposed by the Senate,
and the various rates with 12% as the highest VAT rate proposed by the House, by
striking a compromise whereby the present 10% VAT rate would be retained until certain
conditions arise, i.e., the value-added tax collection as a percentage of gross domestic
product (GDP) of the previous year exceeds 2 4/5%, or National Government deficit as a
percentage of GDP of the previous year exceeds 1 1/2%, when the President, upon
recommendation of the Secretary of Finance shall raise the rate of VAT to 12% effective
January 1, 2006.
2.With regard to the disagreement on whether only the VAT imposed on electricity
generation, transmission and distribution companies should not be passed on to
consumers or whether both the VAT imposed on electricity generation, transmission and
distribution companies and the VAT imposed on sale of petroleum products may be
passed on to consumers, the Bicameral Conference Committee chose to settle such
disagreement by altogether deleting from its Report any no pass-on provision.
3.With regard to the disagreement on whether input tax credits should be limited or not,
the Bicameral Conference Committee decided to adopt the position of the House by
putting a limitation on the amount of input tax that may be credited against the output
tax, although it crafted its own language as to the amount of the limitation on input tax
credits and the manner of computing the same by providing thus:
(A)Creditable Input Tax. . . .
xxx xxx xxx
Provided, The input tax on goods purchased or imported in a calendar month for use in
trade or business for which deduction for depreciation is allowed under this Code, shall
be spread evenly over the month of acquisition and the fifty-nine (59) succeeding
months if the aggregate acquisition cost for such goods, excluding the VAT component
thereof, exceeds one million Pesos (P1,000,000.00): PROVIDED, however, that if the
estimated useful life of the capital good is less than five (5) years, as used for
depreciation purposes, then the input VAT shall be spread over such shorter period: . . .
(B)Excess Output or Input Tax. If at the end of any taxable quarter the output tax
exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input
tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or
quarters: PROVIDED that the input tax inclusive of input VAT carried over from the
previous quarter that may be credited in every quarter shall not exceed seventy percent
(70%) of the output VAT: PROVIDED, HOWEVER, THAT any input tax attributable to zerorated sales by a VAT-registered person may at his option be refunded or credited against
other internal revenue taxes, . . .
4.With regard to the amendments to other provisions of the NIRC on corporate income
tax, franchise, percentage and excise taxes, the conference committee decided to

include such amendments and basically adopted the provisions found in Senate Bill No.
1950, with some changes as to the rate of the tax to be imposed.
Under the provisions of both the Rules of the House of Representatives and Senate Rules,
the Bicameral Conference Committee is mandated to settle the differences between the
disagreeing provisions in the House bill and the Senate bill. The term "settle" is
synonymous to "reconcile" and "harmonize." 25 To reconcile or harmonize disagreeing
provisions, the Bicameral Conference Committee may then (a) adopt the specific
provisions of either the House bill or Senate bill, (b) decide that neither provisions in the
House bill or the provisions in the Senate bill would be carried into the final form of the
bill, and/or (c) try to arrive at a compromise between the disagreeing provisions.

In the present case, the changes introduced by the Bicameral Conference Committee on
disagreeing provisions were meant only to reconcile and harmonize the disagreeing
provisions for it did not inject any idea or intent that is wholly foreign to the subject
embraced by the original provisions.
The so-called stand-by authority in favor of the President, whereby the rate of 10% VAT
wanted by the Senate is retained until such time that certain conditions arise when the
12% VAT wanted by the House shall be imposed, appears to be a compromise to try to
bridge the difference in the rate of VAT proposed by the two houses of Congress.
Nevertheless, such compromise is still totally within the subject of what rate of VAT
should be imposed on taxpayers.
The no pass-on provision was deleted altogether. In the transcripts of the proceedings of
the Bicameral Conference Committee held on May 10, 2005, Sen. Ralph Recto, Chairman
of the Senate Panel, explained the reason for deleting the no pass-on provision in this
wise:
. . . the thinking was just to keep the VAT law or the VAT bill simple. And we were thinking
that no sector should be a beneficiary of legislative grace, neither should any sector be
discriminated on. The VAT is an indirect tax. It is a pass on-tax. And let's keep it plain and
simple. Let's not confuse the bill and put a no pass-on provision. Two-thirds of the world
have a VAT system and in this two-thirds of the globe, I have yet to see a VAT with a no
pass-though provision. So, the thinking of the Senate is basically simple, let's keep the
VAT simple. 26 (Emphasis supplied)
Rep. Teodoro Locsin further made the manifestation that the no pass-on provision "never
really enjoyed the support of either House." 27
With regard to the amount of input tax to be credited against output tax, the Bicameral
Conference Committee came to a compromise on the percentage rate of the limitation or
cap on such input tax credit, but again, the change introduced by the Bicameral
Conference Committee was totally within the intent of both houses to put a cap on input
tax that may be credited against the output tax. From the inception of the subject
revenue bill in the House of Representatives, one of the major objectives was to "plug a
glaring loophole in the tax policy and administration by creating vital restrictions on the
claiming of input VAT tax credits . . ." and "[b]y introducing limitations on the claiming of

tax credit, we are capping a major leakage that has placed our collection efforts at an
apparent disadvantage." 28
As to the amendments to NIRC provisions on taxes other than the value-added tax
proposed in Senate Bill No. 1950, since said provisions were among those referred to it,
the conference committee had to act on the same and it basically adopted the version of
the Senate. ACDTcE
Thus, all the changes or modifications made by the Bicameral Conference Committee
were germane to subjects of the provisions referred to it for reconciliation. Such being
the case, the Court does not see any grave abuse of discretion amounting to lack or
excess of jurisdiction committed by the Bicameral Conference Committee. In the earlier
cases of Philippine Judges Association vs. Prado 29 and Tolentino vs. Secretary of
Finance, 30 the Court recognized the long-standing legislative practice of giving said
conference committee ample latitude for compromising differences between the Senate
and the House. Thus, in the Tolentino case, it was held that:
. . . it is within the power of a conference committee to include in its report an entirely
new provision that is not found either in the House bill or in the Senate bill. If the
committee can propose an amendment consisting of one or two provisions, there is no
reason why it cannot propose several provisions, collectively considered as an
"amendment in the nature of a substitute," so long as such amendment is germane to
the subject of the bills before the committee. After all, its report was not final but needed
the approval of both houses of Congress to become valid as an act of the legislative
department. The charge that in this case the Conference Committee acted as a third
legislative chamber is thus without any basis. 31 (Emphasis supplied)
B.R.A. No. 9337 Does Not Violate Article VI, Section 26(2) of the Constitution on the "NoAmendment Rule"
Article VI, Sec. 26 (2) of the Constitution, states:
No bill passed by either House shall become a law unless it has passed three readings on
separate days, and printed copies thereof in its final form have been distributed to its
Members three days before its passage, except when the President certifies to the
necessity of its immediate enactment to meet a public calamity or emergency. Upon the
last reading of a bill, no amendment thereto shall be allowed, and the vote thereon shall
be taken immediately thereafter, and the yeas and nays entered in the Journal.
Petitioners' argument that the practice where a bicameral conference committee is
allowed to add or delete provisions in the House bill and the Senate bill after these had
passed three readings is in effect a circumvention of the "no amendment rule" (Sec. 26
(2), Art. VI of the 1987 Constitution), fails to convince the Court to deviate from its ruling
in the Tolentino case that:
Nor is there any reason for requiring that the Committee's Report in these cases must
have undergone three readings in each of the two houses. If that be the case, there
would be no end to negotiation since each house may seek modification of the
compromise bill. . . .

Art. VI. 26 (2) must, therefore, be construed as referring only to bills introduced for
the first time in either house of Congress, not to the conference committee report. 32
(Emphasis supplied)
The Court reiterates here that the "no-amendment rule" refers only to the procedure to
be followed by each house of Congress with regard to bills initiated in each of said
respective houses, before said bill is transmitted to the other house for its concurrence or
amendment. Verily, to construe said provision in a way as to proscribe any further
changes to a bill after one house has voted on it would lead to absurdity as this would
mean that the other house of Congress would be deprived of its constitutional power to
amend or introduce changes to said bill. Thus, Art. VI, Sec. 26 (2) of the Constitution
cannot be taken to mean that the introduction by the Bicameral Conference Committee
of amendments and modifications to disagreeing provisions in bills that have been acted
upon by both houses of Congress is prohibited.
C.R.A. No. 9337 Does Not Violate Article VI, Section 24 of the Constitution on Exclusive
Origination of Revenue Bills
Coming to the issue of the validity of the amendments made regarding the NIRC
provisions on corporate income taxes and percentage, excise taxes. Petitioners refer to
the following provisions, to wit:
Section 27
Rates of Income Tax on Domestic
Corporation
28(A)(1)Tax on Resident Foreign Corporation
28(B)(1)Inter-corporate Dividends
34(B)(1)Inter-corporate Dividends
116Tax on Persons Exempt from VAT
117Percentage Tax on domestic carriers and
keepers of Garage
119Tax on franchises
121Tax on banks and Non-Bank Financial
Intermediaries
148Excise Tax on manufactured oils and
other fuels
151Excise Tax on mineral products
236Registration requirements
237Issuance of receipts or sales or
commercial invoices
288Disposition of Incremental Revenue
Petitioners claim that the amendments to these provisions of the NIRC did not at all
originate from the House. They aver that House Bill No. 3555 proposed amendments only
regarding Sections 106, 107, 108, 110 and 114 of the NIRC,while House Bill No. 3705
proposed amendments only to Sections 106, 107, 108, 109, 110 and 111 of the
NIRC;thus, the other sections of the NIRC which the Senate amended but which
amendments were not found in the House bills are not intended to be amended by the
House of Representatives. Hence, they argue that since the proposed amendments did

not originate from the House, such amendments are a violation of Article VI, Section 24
of the Constitution.
The argument does not hold water.
Article VI, Section 24 of the Constitution reads:
Sec. 24.All appropriation, revenue or tariff bills, bills authorizing increase of the public
debt, bills of local application, and private bills shall originate exclusively in the House of
Representatives but the Senate may propose or concur with amendments.
In the present cases, petitioners admit that it was indeed House Bill Nos. 3555 and 3705
that initiated the move for amending provisions of the NIRC dealing mainly with the
value-added tax. Upon transmittal of said House bills to the Senate, the Senate came out
with Senate Bill No. 1950 proposing amendments not only to NIRC provisions on the
value-added tax but also amendments to NIRC provisions on other kinds of taxes. Is the
introduction by the Senate of provisions not dealing directly with the value-added tax,
which is the only kind of tax being amended in the House bills, still within the purview of
the constitutional provision authorizing the Senate to propose or concur with
amendments to a revenue bill that originated from the House? ATHCac
The foregoing question had been squarely answered in the Tolentino case, wherein the
Court held, thus:
. . . To begin with, it is not the law but the revenue bill which is required by the
Constitution to "originate exclusively" in the House of Representatives. It is important to
emphasize this, because a bill originating in the House may undergo such extensive
changes in the Senate that the result may be a rewriting of the whole. . . . At this point,
what is important to note is that, as a result of the Senate action, a distinct bill may be
produced. To insist that a revenue statute and not only the bill which initiated the
legislative process culminating in the enactment of the law must substantially be the
same as the House bill would be to deny the Senate's power not only to "concur with
amendments" but also to "propose amendments." It would be to violate the coequality of
legislative power of the two houses of Congress and in fact make the House superior to
the Senate.

xxx xxx xxx

. . . Given, then, the power of the Senate to propose amendments, the Senate can
propose its own version even with respect to bills which are required by the Constitution
to originate in the House.
xxx xxx xxx
Indeed, what the Constitution simply means is that the initiative for filing revenue, tariff
or tax bills, bills authorizing an increase of the public debt, private bills and bills of local
application must come from the House of Representatives on the theory that, elected as
they are from the districts, the members of the House can be expected to be more
sensitive to the local needs and problems. On the other hand, the senators, who are

elected at large, are expected to approach the same problems from the national
perspective. Both views are thereby made to bear on the enactment of such laws. 33
(Emphasis supplied)
Since there is no question that the revenue bill exclusively originated in the House of
Representatives, the Senate was acting within its constitutional power to introduce
amendments to the House bill when it included provisions in Senate Bill No. 1950
amending corporate income taxes, percentage, excise and franchise taxes. Verily, Article
VI, Section 24 of the Constitution does not contain any prohibition or limitation on the
extent of the amendments that may be introduced by the Senate to the House revenue
bill.
Furthermore, the amendments introduced by the Senate to the NIRC provisions that had
not been touched in the House bills are still in furtherance of the intent of the House in
initiating the subject revenue bills. The Explanatory Note of House Bill No. 1468, the very
first House bill introduced on the floor, which was later substituted by House Bill No.
3555, stated:
One of the challenges faced by the present administration is the urgent and daunting
task of solving the country's serious financial problems. To do this, government
expenditures must be strictly monitored and controlled and revenues must be
significantly increased. This may be easier said than done, but our fiscal authorities are
still optimistic the government will be operating on a balanced budget by the year 2009.
In fact, several measures that will result to significant expenditure savings have been
identified by the administration. It is supported with a credible package of revenue
measures that include measures to improve tax administration and control the leakages
in revenues from income taxes and the value-added tax (VAT). (Emphasis supplied)
Rep. Eric D. Singson, in his sponsorship speech for House Bill No. 3555, declared that:
In the budget message of our President in the year 2005, she reiterated that we all
acknowledged that on top of our agenda must be the restoration of the health of our
fiscal system.
In order to considerably lower the consolidated public sector deficit and eventually
achieve a balanced budget by the year 2009, we need to seize windows of opportunities
which might seem poignant in the beginning, but in the long run prove effective and
beneficial to the overall status of our economy. One such opportunity is a review of
existing tax rates, evaluating the relevance given our present conditions. 34 (Emphasis
supplied)
Notably therefore, the main purpose of the bills emanating from the House of
Representatives is to bring in sizeable revenues for the government to supplement our
country's serious financial problems, and improve tax administration and control of the
leakages in revenues from income taxes and value-added taxes. As these house bills
were transmitted to the Senate, the latter, approaching the measures from the point of
national perspective, can introduce amendments within the purposes of those bills. It can
provide for ways that would soften the impact of the VAT measure on the consumer, i.e.,
by distributing the burden across all sectors instead of putting it entirely on the
shoulders of the consumers. The sponsorship speech of Sen. Ralph Recto on why the
provisions on income tax on corporation were included is worth quoting:

All in all, the proposal of the Senate Committee on Ways and Means will raise P64.3
billion in additional revenues annually even while by mitigating prices of power, services
and petroleum products.
However, not all of this will be wrung out of VAT. In fact, only P48.7 billion amount is from
the VAT on twelve goods and services. The rest of the tab P10.5 billion will be
picked by corporations.
What we therefore prescribe is a burden sharing between corporate Philippines and the
consumer. Why should the latter bear all the pain? Why should the fiscal salvation be
only on the burden of the consumer?
The corporate world's equity is in form of the increase in the corporate income tax from
32 to 35 percent, but up to 2008 only. This will raise P10.5 billion a year. After that, the
rate will slide back, not to its old rate of 32 percent, but two notches lower, to 30
percent.
Clearly, we are telling those with the capacity to pay, corporations, to bear with this
emergency provision that will be in effect for 1,200 days, while we put our fiscal house in
order. This fiscal medicine will have an expiry date.
For their assistance, a reward of tax reduction awaits them. We intend to keep the length
of their sacrifice brief. We would like to assure them that not because there is a light at
the end of the tunnel, this government will keep on making the tunnel long. AaITCH
The responsibility will not rest solely on the weary shoulders of the small man. Big
business will be there to share the burden. 35
As the Court has said, the Senate can propose amendments and in fact, the
amendments made on provisions in the tax on income of corporations are germane to
the purpose of the house bills which is to raise revenues for the government.
Likewise, the Court finds the sections referring to other percentage and excise taxes
germane to the reforms to the VAT system, as these sections would cushion the effects
of VAT on consumers. Considering that certain goods and services which were subject to
percentage tax and excise tax would no longer be VAT-exempt, the consumer would be
burdened more as they would be paying the VAT in addition to these taxes. Thus, there is
a need to amend these sections to soften the impact of VAT. Again, in his sponsorship
speech, Sen. Recto said:
However, for power plants that run on oil, we will reduce to zero the present excise tax
on bunker fuel, to lessen the effect of a VAT on this product.
For electric utilities like Meralco, we will wipe out the franchise tax in exchange for a VAT.
And in the case of petroleum, while we will levy the VAT on oil products, so as not to
destroy the VAT chain, we will however bring down the excise tax on socially sensitive
products such as diesel, bunker, fuel and kerosene.
xxx xxx xxx

What do all these exercises point to? These are not contortions of giving to the left hand
what was taken from the right. Rather, these sprang from our concern of softening the
impact of VAT, so that the people can cushion the blow of higher prices they will have to
pay as a result of VAT. 36
The other sections amended by the Senate pertained to matters of tax administration
which are necessary for the implementation of the changes in the VAT system.
To reiterate, the sections introduced by the Senate are germane to the subject matter
and purposes of the house bills, which is to supplement our country's fiscal deficit,
among others. Thus, the Senate acted within its power to propose those amendments.
SUBSTANTIVE ISSUES
I.
Whether Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and 108 of
the NIRC,violate the following provisions of the Constitution:
a.Article VI, Section 28(1), and
b.Article VI, Section 28(2)
A.No Undue Delegation of Legislative Power
Petitioners ABAKADA GURO Party List, et al., Pimentel, Jr., et al., and Escudero, et al.
contend in common that Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106,
107 and 108, respectively, of the NIRC giving the President the stand-by authority to
raise the VAT rate from 10% to 12% when a certain condition is met, constitutes undue
delegation of the legislative power to tax.
The assailed provisions read as follows:
SEC. 4.Sec. 106 of the same Code, as amended, is hereby further amended to read as
follows:
SEC. 106.Value-Added Tax on Sale of Goods or Properties.
(A)Rate and Base of Tax. There shall be levied, assessed and collected on every sale,
barter or exchange of goods or properties, a value-added tax equivalent to ten percent
(10%) of the gross selling price or gross value in money of the goods or properties sold,
bartered or exchanged, such tax to be paid by the seller or transferor: provided, that the
President, upon the recommendation of the Secretary of Finance, shall, effective January
1, 2006, raise the rate of value-added tax to twelve percent (12%), after any of the
following conditions has been satisfied.
(i)value-added tax collection as a percentage of Gross Domestic Product (GDP) of the
previous year exceeds two and four-fifth percent (2 4/5%) or
(ii)national government deficit as a percentage of GDP of the previous year exceeds one
and one-half percent (1 1/2%).
SEC. 5.Section 107 of the same Code, as amended, is hereby further amended to read as
follows:

SEC. 107.Value-Added Tax on Importation of Goods.

(A)In General. There shall be levied, assessed and collected on every importation of
goods a value-added tax equivalent to ten percent (10%) based on the total value used
by the Bureau of Customs in determining tariff and customs duties, plus customs duties,
excise taxes, if any, and other charges, such tax to be paid by the importer prior to the
release of such goods from customs custody: Provided, That where the customs duties
are determined on the basis of the quantity or volume of the goods, the value-added tax
shall be based on the landed cost plus excise taxes, if any: provided, further, that the
President, upon the recommendation of the Secretary of Finance, shall, effective January
1, 2006, raise the rate of value-added tax to twelve percent (12%) after any of the
following conditions has been satisfied. EITcaD

(i)value-added tax collection as a percentage of Gross Domestic Product (GDP) of the

previous year exceeds two and four-fifth percent (2 4/5%) or
(ii)national government deficit as a percentage of GDP of the previous year exceeds one
and one-half percent (1 1/2%).
SEC. 6.Section 108 of the same Code, as amended, is hereby further amended to read as
follows:
SEC. 108.Value-added Tax on Sale of Services and Use or Lease of Properties
(A)Rate and Base of Tax. There shall be levied, assessed and collected, a value-added
tax equivalent to ten percent (10%) of gross receipts derived from the sale or exchange
of services: provided, that the President, upon the recommendation of the Secretary of
Finance, shall, effective January 1, 2006, raise the rate of value-added tax to twelve
percent (12%), after any of the following conditions has been satisfied.
(i)value-added tax collection as a percentage of Gross Domestic Product (GDP) of the
previous year exceeds two and four-fifth percent (2 4/5%) or
(ii)national government deficit as a percentage of GDP of the previous year exceeds one
and one-half percent (1 1/2%). (Emphasis supplied)
Petitioners allege that the grant of the stand-by authority to the President to increase the
VAT rate is a virtual abdication by Congress of its exclusive power to tax because such
delegation is not within the purview of Section 28 (2), Article VI of the Constitution, which
provides:
The Congress may, by law, authorize the President to fix within specified limits, and may
impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other
duties or imposts within the framework of the national development program of the
government.
They argue that the VAT is a tax levied on the sale, barter or exchange of goods and
properties as well as on the sale or exchange of services, which cannot be included

within the purview of tariffs under the exempted delegation as the latter refers to
customs duties, tolls or tribute payable upon merchandise to the government and usually
imposed on goods or merchandise imported or exported.
Petitioners ABAKADA GURO Party List, et al., further contend that delegating to the
President the legislative power to tax is contrary to republicanism. They insist that
accountability, responsibility and transparency should dictate the actions of Congress
and they should not pass to the President the decision to impose taxes. They also argue
that the law also effectively nullified the President's power of control, which includes the
authority to set aside and nullify the acts of her subordinates like the Secretary of
Finance, by mandating the fixing of the tax rate by the President upon the
recommendation of the Secretary of Finance.
Petitioners Pimentel, et al. aver that the President has ample powers to cause, influence
or create the conditions provided by the law to bring about either or both the conditions
precedent.
On the other hand, petitioners Escudero, et al. find bizarre and revolting the situation
that the imposition of the 12% rate would be subject to the whim of the Secretary of
Finance, an unelected bureaucrat, contrary to the principle of no taxation without
representation. They submit that the Secretary of Finance is not mandated to give a
favorable recommendation and he may not even give his recommendation. Moreover,
they allege that no guiding standards are provided in the law on what basis and as to
how he will make his recommendation. They claim, nonetheless, that any
recommendation of the Secretary of Finance can easily be brushed aside by the
President since the former is a mere alter ego of the latter, such that, ultimately, it is the
President who decides whether to impose the increased tax rate or not.
A brief discourse on the principle of non-delegation of powers is instructive.
The principle of separation of powers ordains that each of the three great branches of
government has exclusive cognizance of and is supreme in matters falling within its own
constitutionally allocated sphere. 37 A logical corollary to the doctrine of separation of
powers is the principle of non-delegation of powers, as expressed in the Latin maxim:
potestas delegata non delegari potest which means "what has been delegated, cannot
be delegated." 38 This doctrine is based on the ethical principle that such as delegated
power constitutes not only a right but a duty to be performed by the delegate through
the instrumentality of his own judgment and not through the intervening mind of
another. 39
With respect to the Legislature, Section 1 of Article VI of the Constitution provides that
"the Legislative power shall be vested in the Congress of the Philippines which shall
consist of a Senate and a House of Representatives." The powers which Congress is
prohibited from delegating are those which are strictly, or inherently and exclusively,
legislative. Purely legislative power, which can never be delegated, has been described
as the authority to make a complete law complete as to the time when it shall take
effect and as to whom it shall be applicable and to determine the expediency of its
enactment. 40 Thus, the rule is that in order that a court may be justified in holding a
statute unconstitutional as a delegation of legislative power, it must appear that the
power involved is purely legislative in nature that is, one appertaining exclusively to

the legislative department. It is the nature of the power, and not the liability of its use or
the manner of its exercise, which determines the validity of its delegation.
Nonetheless, the general rule barring delegation of legislative powers is subject to the
following recognized limitations or exceptions:
(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. DaAISH
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; 41 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. 42 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. 43 Both tests are intended to prevent a total
transference of legislative authority to the delegate, who is not allowed to step into the
shoes of the legislature and exercise a power essentially legislative. 44
In People vs. Vera, 45 the Court, through eminent Justice Jose P. Laurel, expounded on
the concept and extent of delegation of power in this wise:
In testing whether a statute constitutes an undue delegation of legislative power or not,
it is usual to inquire whether the statute was complete in all its terms and provisions
when it left the hands of the legislature so that nothing was left to the judgment of any
other appointee or delegate of the legislature.
xxx xxx xxx
'The true distinction', says Judge Ranney, 'is between the delegation of power to make
the law, which necessarily involves a discretion as to what it shall be, and conferring an
authority or discretion as to its execution, to be exercised under and in pursuance of the
law. The first cannot be done; to the latter no valid objection can be made.'
xxx xxx xxx
It is contended, however, that a legislative act may be made to the effect as law after it
leaves the hands of the legislature. It is true that laws may be made effective on certain
contingencies, as by proclamation of the executive or the adoption by the people of a
particular community. In Wayman vs. Southard, the Supreme Court of the United States
ruled that the legislature may delegate a power not legislative which it may itself

rightfully exercise. The power to ascertain facts is such a power which may be delegated.
There is nothing essentially legislative in ascertaining the existence of facts or conditions
as the basis of the taking into effect of a law. That is a mental process common to all
branches of the government. Notwithstanding the apparent tendency, however, to relax
the rule prohibiting delegation of legislative authority on account of the complexity
arising from social and economic forces at work in this modern industrial age, the
orthodox pronouncement of Judge Cooley in his work on Constitutional Limitations finds
restatement in Prof. Willoughby's treatise on the Constitution of the United States in the
following language speaking of declaration of legislative power to administrative
agencies: The principle which permits the legislature to provide that the administrative
agent may determine when the circumstances are such as require the application of a
law is defended upon the ground that at the time this authority is granted, the rule of
public policy, which is the essence of the legislative act, is determined by the legislature.
In other words, the legislature, as it is its duty to do, determines that, under given
circumstances, certain executive or administrative action is to be taken, and that, under
other circumstances, different or no action at all is to be taken. What is thus left to the
administrative official is not the legislative determination of what public policy demands,
but simply the ascertainment of what the facts of the case require to be done according
to the terms of the law by which he is governed. The efficiency of an Act as a declaration
of legislative will must, of course, come from Congress, but the ascertainment of the
contingency upon which the Act shall take effect may be left to such agencies as it may
designate. The legislature, then, may provide that a law shall take effect upon the
happening of future specified contingencies leaving to some other person or body the
power to determine when the specified contingency has arisen. (Emphasis supplied). 46

In Edu vs. Ericta, 47 the Court reiterated:

What cannot be delegated is the authority under the Constitution to make laws and to
alter and repeal them; the test is the completeness of the statute in all its terms and
provisions when it leaves the hands of the legislature. To determine whether or not there
is an undue delegation of legislative power, the inquiry must be directed to the scope
and definiteness of the measure enacted. The legislative does not abdicate its functions
when it describes what job must be done, who is to do it, and what is the scope of his
authority. For a complex economy, that may be the only way in which the legislative
process can go forward. A distinction has rightfully been made between delegation of
power to make the laws which necessarily involves a discretion as to what it shall be,
which constitutionally may not be done, and delegation of authority or discretion as to its
execution to be exercised under and in pursuance of the law, to which no valid objection
can be made. The Constitution is thus not to be regarded as denying the legislature the
necessary resources of flexibility and practicability. (Emphasis supplied). 48
Clearly, the legislature may delegate to executive officers or bodies the power to
determine certain facts or conditions, or the happening of contingencies, on which the
operation of a statute is, by its terms, made to depend, but the legislature must
prescribe sufficient standards, policies or limitations on their authority. 49 While the
power to tax cannot be delegated to executive agencies, details as to the enforcement
and administration of an exercise of such power may be left to them, including the power
to determine the existence of facts on which its operation depends. 50

The rationale for this is that the preliminary ascertainment of facts as basis for the
enactment of legislation is not of itself a legislative function, but is simply ancillary to
legislation. Thus, the duty of correlating information and making recommendations is the
kind of subsidiary activity which the legislature may perform through its members, or
which it may delegate to others to perform. Intelligent legislation on the complicated
problems of modern society is impossible in the absence of accurate information on the
part of the legislators, and any reasonable method of securing such information is
proper. 51 The Constitution as a continuously operative charter of government does not
require that Congress find for itself every fact upon which it desires to base legislative
action or that it make for itself detailed determinations which it has declared to be
prerequisite to application of legislative policy to particular facts and circumstances
impossible for Congress itself properly to investigate. 52
In the present case, the challenged section of R.A. No. 9337 is the common proviso in
Sections 4, 5 and 6 which reads as follows:
That the President, upon the recommendation of the Secretary of Finance, shall, effective
January 1, 2006, raise the rate of value-added tax to twelve percent (12%), after any of
the following conditions has been satisfied:
(i)Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the
previous year exceeds two and four-fifth percent (2 4/5%); or
(ii)National government deficit as a percentage of GDP of the previous year exceeds one
and one-half percent (1 1/2%).
The case before the Court is not a delegation of legislative power. It is simply a
delegation of ascertainment of facts upon which enforcement and administration of the
increase rate under the law is contingent. The legislature has made the operation of the
12% rate effective January 1, 2006, contingent upon a specified fact or condition. It
leaves the entire operation or non-operation of the 12% rate upon factual matters
outside of the control of the executive.
No discretion would be exercised by the President. Highlighting the absence of discretion
is the fact that the word shall is used in the common proviso. The use of the word shall
connotes a mandatory order. Its use in a statute denotes an imperative obligation and is
inconsistent with the idea of discretion. 53 Where the law is clear and unambiguous, it
must be taken to mean exactly what it says, and courts have no choice but to see to it
that the mandate is obeyed. 54
Thus, it is the ministerial duty of the President to immediately impose the 12% rate upon
the existence of any of the conditions specified by Congress. This is a duty which cannot
be evaded by the President. Inasmuch as the law specifically uses the word shall, the
exercise of discretion by the President does not come into play. It is a clear directive to
impose the 12% VAT rate when the specified conditions are present. The time of taking
into effect of the 12% VAT rate is based on the happening of a certain specified
contingency, or upon the ascertainment of certain facts or conditions by a person or
body other than the legislature itself.
The Court finds no merit to the contention of petitioners ABAKADA GURO Party List, et al.
that the law effectively nullified the President's power of control over the Secretary of

Finance by mandating the fixing of the tax rate by the President upon the
recommendation of the Secretary of Finance. The Court cannot also subscribe to the
position of petitioners Pimentel, et al. that the word shall should be interpreted to mean
may in view of the phrase "upon the recommendation of the Secretary of Finance."
Neither does the Court find persuasive the submission of petitioners Escudero, et al. that
any recommendation by the Secretary of Finance can easily be brushed aside by the
President since the former is a mere alter ego of the latter.
When one speaks of the Secretary of Finance as the alter ego of the President, it simply
means that as head of the Department of Finance he is the assistant and agent of the
Chief Executive. The multifarious executive and administrative functions of the Chief
Executive are performed by and through the executive departments, and the acts of the
secretaries of such departments, such as the Department of Finance, performed and
promulgated in the regular course of business, are, unless disapproved or reprobated by
the Chief Executive, presumptively the acts of the Chief Executive. The Secretary of
Finance, as such, occupies a political position and holds office in an advisory capacity,
and, in the language of Thomas Jefferson, "should be of the President's bosom
confidence" and, in the language of Attorney-General Cushing, is "subject to the
direction of the President." 55
In the present case, in making his recommendation to the President on the existence of
either of the two conditions, the Secretary of Finance is not acting as the alter ego of the
President or even her subordinate. In such instance, he is not subject to the power of
control and direction of the President. He is acting as the agent of the legislative
department, to determine and declare the event upon which its expressed will is to take
effect. 56 The Secretary of Finance becomes the means or tool by which legislative policy
is determined and implemented, considering that he possesses all the facilities to gather
data and information and has a much broader perspective to properly evaluate them. His
function is to gather and collate statistical data and other pertinent information and
verify if any of the two conditions laid out by Congress is present. His personality in such
instance is in reality but a projection of that of Congress. Thus, being the agent of
Congress and not of the President, the President cannot alter or modify or nullify, or set
aside the findings of the Secretary of Finance and to substitute the judgment of the
former for that of the latter. DcITHE
Congress simply granted the Secretary of Finance the authority to ascertain the
existence of a fact, namely, whether by December 31, 2005, the value-added tax
collection as a percentage of Gross Domestic Product (GDP) of the previous year exceeds
two and four-fifth percent (2 4/5%) or the national government deficit as a percentage of
GDP of the previous year exceeds one and one-half percent (1 1/2%). If either of these
two instances has occurred, the Secretary of Finance, by legislative mandate, must
submit such information to the President. Then the 12% VAT rate must be imposed by
the President effective January 1, 2006. There is no undue delegation of legislative power
but only of the discretion as to the execution of a law. This is constitutionally permissible.
57 Congress does not abdicate its functions or unduly delegate power when it describes
what job must be done, who must do it, and what is the scope of his authority; in our
complex economy that is frequently the only way in which the legislative process can go
forward. 58
As to the argument of petitioners ABAKADA GURO Party List, et al. that delegating to the
President the legislative power to tax is contrary to the principle of republicanism, the

same deserves scant consideration. Congress did not delegate the power to tax but the
mere implementation of the law. The intent and will to increase the VAT rate to 12%
came from Congress and the task of the President is to simply execute the legislative
policy. That Congress chose to do so in such a manner is not within the province of the
Court to inquire into, its task being to interpret the law. 59
The insinuation by petitioners Pimentel, et al. that the President has ample powers to
cause, influence or create the conditions to bring about either or both the conditions
precedent does not deserve any merit as this argument is highly speculative. The Court
does not rule on allegations which are manifestly conjectural, as these may not exist at
all. The Court deals with facts, not fancies; on realities, not appearances. When the Court
acts on appearances instead of realities, justice and law will be short-lived.

B.The 12% Increase VAT Rate Does Not Impose an Unfair and Unnecessary Additional Tax
Burden
Petitioners Pimentel, et al. argue that the 12% increase in the VAT rate imposes an unfair
and additional tax burden on the people. Petitioners also argue that the 12% increase,
dependent on any of the 2 conditions set forth in the contested provisions, is ambiguous
because it does not state if the VAT rate would be returned to the original 10% if the
rates are no longer satisfied. Petitioners also argue that such rate is unfair and
unreasonable, as the people are unsure of the applicable VAT rate from year to year.
Under the common provisos of Sections 4, 5 and 6 of R.A. No. 9337, if any of the two
conditions set forth therein are satisfied, the President shall increase the VAT rate to
12%. The provisions of the law are clear. It does not provide for a return to the 10% rate
nor does it empower the President to so revert if, after the rate is increased to 12%, the
VAT collection goes below the 2 4/5 of the GDP of the previous year or that the national
government deficit as a percentage of GDP of the previous year does not exceed 1 1/2%.
Therefore, no statutory construction or interpretation is needed. Neither can conditions
or limitations be introduced where none is provided for. Rewriting the law is a forbidden
ground that only Congress may tread upon. 60
Thus, in the absence of any provision providing for a return to the 10% rate, which in this
case the Court finds none, petitioners' argument is, at best, purely speculative. There is
no basis for petitioners' fear of a fluctuating VAT rate because the law itself does not
provide that the rate should go back to 10% if the conditions provided in Sections 4, 5
and 6 are no longer present. The rule is that where the provision of the law is clear and
unambiguous, so that there is no occasion for the court's seeking the legislative intent,
the law must be taken as it is, devoid of judicial addition or subtraction. 61
Petitioners also contend that the increase in the VAT rate, which was allegedly an
incentive to the President to raise the VAT collection to at least 2 4/5 of the GDP of the
previous year, should be based on fiscal adequacy.
Petitioners obviously overlooked that increase in VAT collection is not the only condition.
There is another condition, i.e., the national government deficit as a percentage of GDP
of the previous year exceeds one and one-half percent (1 1/2%).

Respondents explained the philosophy behind these alternative conditions:

1.VAT/GDP Ratio > 2.8%
The condition set for increasing VAT rate to 12% have economic or fiscal meaning. If
VAT/GDP is less than 2.8%, it means that government has weak or no capability of
implementing the VAT or that VAT is not effective in the function of the tax collection.
Therefore, there is no value to increase it to 12% because such action will also be
ineffectual.
2.Nat'l Gov't Deficit/GDP >1.5%
The condition set for increasing VAT when deficit/GDP is 1.5% or less means the fiscal
condition of government has reached a relatively sound position or is towards the
direction of a balanced budget position. Therefore, there is no need to increase the VAT
rate since the fiscal house is in a relatively healthy position. Otherwise stated, if the ratio
is more than 1.5%, there is indeed a need to increase the VAT rate. 62
That the first condition amounts to an incentive to the President to increase the VAT
collection does not render it unconstitutional so long as there is a public purpose for
which the law was passed, which in this case, is mainly to raise revenue. In fact, fiscal
adequacy dictated the need for a raise in revenue.
The principle of fiscal adequacy as a characteristic of a sound tax system was originally
stated by Adam Smith in his Canons of Taxation (1776), as:
IV.Every tax ought to be so contrived as both to take out and to keep out of the pockets
of the people as little as possible over and above what it brings into the public treasury
of the state. 63
It simply means that sources of revenues must be adequate to meet government
expenditures and their variations. 64
The dire need for revenue cannot be ignored. Our country is in a quagmire of financial
woe. During the Bicameral Conference Committee hearing, then Finance Secretary
Purisima bluntly depicted the country's gloomy state of economic affairs, thus:
First, let me explain the position that the Philippines finds itself in right now. We are in a
position where 90 percent of our revenue is used for debt service. So, for every peso of
revenue that we currently raise, 90 goes to debt service. That's interest plus
amortization of our debt. So clearly, this is not a sustainable situation. That's the first
fact.
The second fact is that our debt to GDP level is way out of line compared to other peer
countries that borrow money from that international financial markets. Our debt to GDP
is approximately equal to our GDP. Again, that shows you that this is not a sustainable
situation.
The third thing that I'd like to point out is the environment that we are presently
operating in is not as benign as what it used to be the past five years.

What do I mean by that?

In the past five years, we've been lucky because we were operating in a period of
basically global growth and low interest rates. The past few months, we have seen an
inching up, in fact, a rapid increase in the interest rates in the leading economies of the
world. And, therefore, our ability to borrow at reasonable prices is going to be
challenged. In fact, ultimately, the question is our ability to access the financial markets.
When the President made her speech in July last year, the environment was not as bad
as it is now, at least based on the forecast of most financial institutions. So, we were
assuming that raising 80 billion would put us in a position where we can then convince
them to improve our ability to borrow at lower rates. But conditions have changed on us
because the interest rates have gone up. In fact, just within this room, we tried to access
the market for a billion dollars because for this year alone, the Philippines will have to
borrow 4 billion dollars. Of that amount, we have borrowed 1.5 billion. We issued last
January a 25-year bond at 9.7 percent cost. We were trying to access last week and the
market was not as favorable and up to now we have not accessed and we might pull
back because the conditions are not very good.
So given this situation, we at the Department of Finance believe that we really need to
front-end our deficit reduction. Because it is deficit that is causing the increase of the
debt and we are in what we call a debt spiral. The more debt you have, the more deficit
you have because interest and debt service eats and eats more of your revenue. We
need to get out of this debt spiral. And the only way, I think, we can get out of this debt
spiral is really have a front-end adjustment in our revenue base. 65
The image portrayed is chilling. Congress passed the law hoping for rescue from an
inevitable catastrophe. Whether the law is indeed sufficient to answer the state's
economic dilemma is not for the Court to judge. In the Farias case, the Court refused to
consider the various arguments raised therein that dwelt on the wisdom of Section 14 of
R.A. No. 9006 (The Fair Election Act), pronouncing that:
. . . policy matters are not the concern of the Court. Government policy is within the
exclusive dominion of the political branches of the government. It is not for this Court to
look into the wisdom or propriety of legislative determination. Indeed, whether an
enactment is wise or unwise, whether it is based on sound economic theory, whether it is
the best means to achieve the desired results, whether, in short, the legislative
discretion within its prescribed limits should be exercised in a particular manner are
matters for the judgment of the legislature, and the serious conflict of opinions does not
suffice to bring them within the range of judicial cognizance. 66
In the same vein, the Court in this case will not dawdle on the purpose of Congress or the
executive policy, given that it is not for the judiciary to "pass upon questions of wisdom,
justice or expediency of legislation." 67
II.
Whether Section 8 of R.A. No. 9337, amending Sections 110(A)(2) and 110(B) of the
NIRC;and Section 12 of R.A. No. 9337, amending Section 114(C) of the NIRC,violate the
following provisions of the Constitution:
a.Article VI, Section 28(1), and cEaCTS

b.Article III, Section 1

A.Due Process and Equal Protection Clauses
Petitioners Association of Pilipinas Shell Dealers, Inc., et al. argue that Section 8 of R.A.
No. 9337, amending Sections 110 (A)(2), 110 (B), and Section 12 of R.A. No. 9337,
amending Section 114 (C) of the NIRC are arbitrary, oppressive, excessive and
confiscatory. Their argument is premised on the constitutional right against deprivation
of life, liberty of property without due process of law, as embodied in Article III, Section 1
of the Constitution.
Petitioners also contend that these provisions violate the constitutional guarantee of
equal protection of the law.
The doctrine is that where the due process and equal protection clauses are invoked,
considering that they are not fixed rules but rather broad standards, there is a need for
proof of such persuasive character as would lead to such a conclusion. Absent such a
showing, the presumption of validity must prevail. 68
Section 8 of R.A. No. 9337, amending Section 110(B) of the NIRC imposes a limitation on
the amount of input tax that may be credited against the output tax. It states, in part:
"[P]rovided, that the input tax inclusive of the input VAT carried over from the previous
quarter that may be credited in every quarter shall not exceed seventy percent (70%) of
the output VAT: . . ."
Input Tax is defined under Section 110(A) of the NIRC,as amended, as the value-added
tax due from or paid by a VAT-registered person on the importation of goods or local
purchase of good and services, including lease or use of property, in the course of trade
or business, from a VAT-registered person, and Output Tax is the value-added tax due on
the sale or lease of taxable goods or properties or services by any person registered or
required to register under the law.

Petitioners claim that the contested sections impose limitations on the amount of input
tax that may be claimed. In effect, a portion of the input tax that has already been paid
cannot now be credited against the output tax.
Petitioners' argument is not absolute. It assumes that the input tax exceeds 70% of the
output tax, and therefore, the input tax in excess of 70% remains uncredited. However,
to the extent that the input tax is less than 70% of the output tax, then 100% of such
input tax is still creditable.
More importantly, the excess input tax, if any, is retained in a business's books of
accounts and remains creditable in the succeeding quarter/s. This is explicitly allowed by
Section 110(B), which provides that "if the input tax exceeds the output tax, the excess
shall be carried over to the succeeding quarter or quarters." In addition, Section 112(B)
allows a VAT-registered person to apply for the issuance of a tax credit certificate or
refund for any unused input taxes, to the extent that such input taxes have not been
applied against the output taxes. Such unused input tax may be used in payment of his
other internal revenue taxes.

The non-application of the unutilized input tax in a given quarter is not ad infinitum, as
petitioners exaggeratedly contend. Their analysis of the effect of the 70% limitation is
incomplete and one-sided. It ends at the net effect that there will be unapplied/unutilized
inputs VAT for a given quarter. It does not proceed further to the fact that such
unapplied/unutilized input tax may be credited in the subsequent periods as allowed by
the carry-over provision of Section 110(B) or that it may later on be refunded through a
tax credit certificate under Section 112(B).
Therefore, petitioners' argument must be rejected.
On the other hand, it appears that petitioner Garcia failed to comprehend the operation
of the 70% limitation on the input tax. According to petitioner, the limitation on the
creditable input tax in effect allows VAT-registered establishments to retain a portion of
the taxes they collect, which violates the principle that tax collection and revenue should
be for public purposes and expenditures
As earlier stated, the input tax is the tax paid by a person, passed on to him by the
seller, when he buys goods. Output tax meanwhile is the tax due to the person when he
sells goods. In computing the VAT payable, three possible scenarios may arise:
First, if at the end of a taxable quarter the output taxes charged by the seller are equal
to the input taxes that he paid and passed on by the suppliers, then no payment is
required;
Second, when the output taxes exceed the input taxes, the person shall be liable for the
excess, which has to be paid to the Bureau of Internal Revenue (BIR); 69 and
Third, if the input taxes exceed the output taxes, the excess shall be carried over to the
succeeding quarter or quarters. Should the input taxes result from zero-rated or
effectively zero-rated transactions, any excess over the output taxes shall instead be
refunded to the taxpayer or credited against other internal revenue taxes, at the
taxpayer's option. 70
Section 8 of R.A. No. 9337 however, imposed a 70% limitation on the input tax. Thus, a
person can credit his input tax only up to the extent of 70% of the output tax. In
layman's term, the value-added taxes that a person/taxpayer paid and passed on to him
by a seller can only be credited up to 70% of the value-added taxes that is due to him on
a taxable transaction. There is no retention of any tax collection because the
person/taxpayer has already previously paid the input tax to a seller, and the seller will
subsequently remit such input tax to the BIR. The party directly liable for the payment of
the tax is the seller. 71 What only needs to be done is for the person/taxpayer to apply or
credit these input taxes, as evidenced by receipts, against his output taxes.
Petitioners Association of Pilipinas Shell Dealers, Inc., et al. also argue that the input tax
partakes the nature of a property that may not be confiscated, appropriated, or limited
without due process of law.
The input tax is not a property or a property right within the constitutional purview of the
due process clause. A VAT-registered person's entitlement to the creditable input tax is a
mere statutory privilege.

The distinction between statutory privileges and vested rights must be borne in mind for
persons have no vested rights in statutory privileges. The state may change or take
away rights, which were created by the law of the state, although it may not take away
property, which was vested by virtue of such rights. 72
Under the previous system of single-stage taxation, taxes paid at every level of
distribution are not recoverable from the taxes payable, although it becomes part of the
cost, which is deductible from the gross revenue. When Pres. Aquino issued E.O. No. 273
imposing a 10% multi-stage tax on all sales, it was then that the crediting of the input
tax paid on purchase or importation of goods and services by VAT-registered persons
against the output tax was introduced. 73 This was adopted by the Expanded VAT Law
(R.A. No. 7716), 74 and The Tax Reform Act of 1997 (R.A. No. 8424). 75 The right to credit
input tax as against the output tax is clearly a privilege created by law, a privilege that
also the law can remove, or in this case, limit.
Petitioners also contest as arbitrary, oppressive, excessive and confiscatory, Section 8 of
R.A. No. 9337, amending Section 110(A) of the NIRC,which provides:
SEC. 110.Tax Credits.
(A)Creditable Input Tax. . . .
Provided, That the input tax on goods purchased or imported in a calendar month for use
in trade or business for which deduction for depreciation is allowed under this Code, shall
be spread evenly over the month of acquisition and the fifty-nine (59) succeeding
months if the aggregate acquisition cost for such goods, excluding the VAT component
thereof, exceeds One million pesos (P1,000,000.00): Provided, however, That if the
estimated useful life of the capital goods is less than five (5) years, as used for
depreciation purposes, then the input VAT shall be spread over such a shorter period:
Provided, finally, That in the case of purchase of services, lease or use of properties, the
input tax shall be creditable to the purchaser, lessee or license upon payment of the
compensation, rental, royalty or fee.
The foregoing section imposes a 60-month period within which to amortize the creditable
input tax on purchase or importation of capital goods with acquisition cost of P1 Million
pesos, exclusive of the VAT component. Such spread out only poses a delay in the
crediting of the input tax. Petitioners' argument is without basis because the taxpayer is
not permanently deprived of his privilege to credit the input tax.
It is worth mentioning that Congress admitted that the spread-out of the creditable input
tax in this case amounts to a 4-year interest-free loan to the government. 76 In the same
breath, Congress also justified its move by saying that the provision was designed to
raise an annual revenue of 22.6 billion. 77 The legislature also dispelled the fear that the
provision will fend off foreign investments, saying that foreign investors have other tax
incentives provided by law, and citing the case of China, where despite a 17.5% noncreditable VAT, foreign investments were not deterred. 78 Again, for whatever is the
purpose of the 60-month amortization, this involves executive economic policy and
legislative wisdom in which the Court cannot intervene. TAcSaC

With regard to the 5% creditable withholding tax imposed on payments made by the
government for taxable transactions, Section 12 of R.A. No. 9337, which amended
Section 114 of the NIRC,reads:
SEC. 114.Return and Payment of Value-added Tax.
(C)Withholding of Value-added Tax. The Government or any of its political subdivisions,
instrumentalities or agencies, including government-owned or controlled corporations
(GOCCs) shall, before making payment on account of each purchase of goods and
services which are subject to the value-added tax imposed in Sections 106 and 108 of
this Code, deduct and withhold a final value-added tax at the rate of five percent (5%) of
the gross payment thereof: Provided, That the payment for lease or use of properties or
property rights to nonresident owners shall be subject to ten percent (10%) withholding
tax at the time of payment. For purposes of this Section, the payor or person in control of
the payment shall be considered as the withholding agent.
The value-added tax withheld under this Section shall be remitted within ten (10) days
following the end of the month the withholding was made.
Section 114(C) merely provides a method of collection, or as stated by respondents, a
more simplified VAT withholding system. The government in this case is constituted as a
withholding agent with respect to their payments for goods and services.
Prior to its amendment, Section 114(C) provided for different rates of value-added taxes
to be withheld 3% on gross payments for purchases of goods; 6% on gross payments
for services supplied by contractors other than by public works contractors; 8.5% on
gross payments for services supplied by public work contractors; or 10% on payment for
the lease or use of properties or property rights to nonresident owners. Under the
present Section 114(C), these different rates, except for the 10% on lease or property
rights payment to nonresidents, were deleted, and a uniform rate of 5% is applied.
The Court observes, however, that the law the used the word final. In tax usage, final, as
opposed to creditable, means full. Thus, it is provided in Section 114(C): "final valueadded tax at the rate of five percent (5%)."
In Revenue Regulations No. 02-98, implementing R.A. No. 8424 (The Tax Reform Act of
1997), the concept of final withholding tax on income was explained, to wit:

SECTION 2.57.Withholding of Tax at Source

(A)Final Withholding Tax. Under the final withholding tax system the amount of income
tax withheld by the withholding agent is constituted as full and final payment of the
income tax due from the payee on the said income. The liability for payment of the tax
rests primarily on the payor as a withholding agent. Thus, in case of his failure to
withhold the tax or in case of underwithholding, the deficiency tax shall be collected
from the payor/withholding agent. . . .
(B)Creditable Withholding Tax. Under the creditable withholding tax system, taxes
withheld on certain income payments are intended to equal or at least approximate the

tax due of the payee on said income. . . . Taxes withheld on income payments covered by
the expanded withholding tax (referred to in Sec. 2.57.2 of these regulations) and
compensation income (referred to in Sec. 2.78 also of these regulations) are creditable in
nature.
As applied to value-added tax, this means that taxable transactions with the government
are subject to a 5% rate, which constitutes as full payment of the tax payable on the
transaction. This represents the net VAT payable of the seller. The other 5% effectively
accounts for the standard input VAT (deemed input VAT), in lieu of the actual input VAT
directly or attributable to the taxable transaction. 79
The Court need not explore the rationale behind the provision. It is clear that Congress
intended to treat differently taxable transactions with the government. 80 This is
supported by the fact that under the old provision, the 5% tax withheld by the
government remains creditable against the tax liability of the seller or contractor, to wit:
SEC. 114.Return and Payment of Value-added Tax.
(C)Withholding of Creditable Value-added Tax. The Government or any of its political
subdivisions, instrumentalities or agencies, including government-owned or controlled
corporations (GOCCs) shall, before making payment on account of each purchase of
goods from sellers and services rendered by contractors which are subject to the valueadded tax imposed in Sections 106 and 108 of this Code, deduct and withhold the valueadded tax due at the rate of three percent (3%) of the gross payment for the purchase of
goods and six percent (6%) on gross receipts for services rendered by contractors on
every sale or installment payment which shall be creditable against the value-added tax
liability of the seller or contractor: Provided, however, That in the case of government
public works contractors, the withholding rate shall be eight and one-half percent (8.5%):
Provided, further, That the payment for lease or use of properties or property rights to
nonresident owners shall be subject to ten percent (10%) withholding tax at the time of
payment. For this purpose, the payor or person in control of the payment shall be
considered as the withholding agent.
The valued-added tax withheld under this Section shall be remitted within ten (10) days
following the end of the month the withholding was made. (Emphasis supplied)
As amended, the use of the word final and the deletion of the word creditable exhibits
Congress's intention to treat transactions with the government differently. Since it has
not been shown that the class subject to the 5% final withholding tax has been
unreasonably narrowed, there is no reason to invalidate the provision. Petitioners, as
petroleum dealers, are not the only ones subjected to the 5% final withholding tax. It
applies to all those who deal with the government.
Moreover, the actual input tax is not totally lost or uncreditable, as petitioners believe.
Revenue Regulations No. 14-2005 or the Consolidated Value-Added Tax Regulations 2005
issued by the BIR, provides that should the actual input tax exceed 5% of gross
payments, the excess may form part of the cost. Equally, should the actual input tax be
less than 5%, the difference is treated as income. 81
Petitioners also argue that by imposing a limitation on the creditable input tax, the
government gets to tax a profit or value-added even if there is no profit or value-added.

Petitioners' stance is purely hypothetical, argumentative, and again, one-sided. The

Court will not engage in a legal joust where premises are what ifs, arguments, theoretical
and facts, uncertain. Any disquisition by the Court on this point will only be, as
Shakespeare describes life in Macbeth, 82 "full of sound and fury, signifying nothing."
What's more, petitioners' contention assumes the proposition that there is no profit or
value-added. It need not take an astute businessman to know that it is a matter of
exception that a business will sell goods or services without profit or value-added. It
cannot be overstressed that a business is created precisely for profit.
The equal protection clause under the Constitution means that "no person or class of
persons shall be deprived of the same protection of laws which is enjoyed by other
persons or other classes in the same place and in like circumstances." 83
The power of the State to make reasonable and natural classifications for the purposes of
taxation has long been established. Whether it relates to the subject of taxation, the kind
of property, the rates to be levied, or the amounts to be raised, the methods of
assessment, valuation and collection, the State's power is entitled to presumption of
validity. As a rule, the judiciary will not interfere with such power absent a clear showing
of unreasonableness, discrimination, or arbitrariness. 84
Petitioners point out that the limitation on the creditable input tax if the entity has a high
ratio of input tax, or invests in capital equipment, or has several transactions with the
government, is not based on real and substantial differences to meet a valid
classification.
The argument is pedantic, if not outright baseless. The law does not make any
classification in the subject of taxation, the kind of property, the rates to be levied or the
amounts to be raised, the methods of assessment, valuation and collection. Petitioners'
alleged distinctions are based on variables that bear different consequences. While the
implementation of the law may yield varying end results depending on one's profit
margin and value-added, the Court cannot go beyond what the legislature has laid down
and interfere with the affairs of business.
The equal protection clause does not require the universal application of the laws on all
persons or things without distinction. This might in fact sometimes result in unequal
protection. What the clause requires is equality among equals as determined according
to a valid classification. By classification is meant the grouping of persons or things
similar to each other in certain particulars and different from all others in these same
particulars. 85
Petitioners brought to the Court's attention the introduction of Senate Bill No. 2038 by
Sens. S.R. Osmea III and Ma. Ana Consuelo A.S. Madrigal on June 6, 2005, and House
Bill No. 4493 by Rep. Eric D. Singson. The proposed legislation seeks to amend the 70%
limitation by increasing the same to 90%. This, according to petitioners, supports their
stance that the 70% limitation is arbitrary and confiscatory. On this score, suffice it to say
that these are still proposed legislations. Until Congress amends the law, and absent any
unequivocal basis for its unconstitutionality, the 70% limitation stays. aHTCIc
B.Uniformity and Equitability of Taxation

Article VI, Section 28(1) of the Constitution reads:

The rule of taxation shall be uniform and equitable. The Congress shall evolve a
progressive system of taxation.
Uniformity in taxation means that all taxable articles or kinds of property of the same
class shall be taxed at the same rate. Different articles may be taxed at different
amounts provided that the rate is uniform on the same class everywhere with all people
at all times. 86
In this case, the tax law is uniform as it provides a standard rate of 0% or 10% (or 12%)
on all goods and services. Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106,
107 and 108, respectively, of the NIRC,provide for a rate of 10% (or 12%) on sale of
goods and properties, importation of goods, and sale of services and use or lease of
properties. These same sections also provide for a 0% rate on certain sales and
transaction.
Neither does the law make any distinction as to the type of industry or trade that will
bear the 70% limitation on the creditable input tax, 5-year amortization of input tax paid
on purchase of capital goods or the 5% final withholding tax by the government. It must
be stressed that the rule of uniform taxation does not deprive Congress of the power to
classify subjects of taxation, and only demands uniformity within the particular class. 87
R.A. No. 9337 is also equitable. The law is equipped with a threshold margin. The VAT
rate of 0% or 10% (or 12%) does not apply to sales of goods or services with gross
annual sales or receipts not exceeding P1,500,000.00. 88 Also, basic marine and
agricultural food products in their original state are still not subject to the tax, 89 thus
ensuring that prices at the grassroots level will remain accessible. As was stated in
Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. vs. Tan: 90
The disputed sales tax is also equitable. It is imposed only on sales of goods or services
by persons engaged in business with an aggregate gross annual sales exceeding
P200,000.00. Small corner sari-sari stores are consequently exempt from its application.
Likewise exempt from the tax are sales of farm and marine products, so that the costs of
basic food and other necessities, spared as they are from the incidence of the VAT, are
expected to be relatively lower and within the reach of the general public.
It is admitted that R.A. No. 9337 puts a premium on businesses with low profit margins,
and unduly favors those with high profit margins. Congress was not oblivious to this.
Thus, to equalize the weighty burden the law entails, the law, under Section 116,
imposed a 3% percentage tax on VAT-exempt persons under Section 109(v), i.e.,
transactions with gross annual sales and/or receipts not exceeding P1.5 Million. This acts
as a equalizer because in effect, bigger businesses that qualify for VAT coverage and
VAT-exempt taxpayers stand on equal-footing.

Moreover, Congress provided mitigating measures to cushion the impact of the

imposition of the tax on those previously exempt. Excise taxes on petroleum products 91
and natural gas 92 were reduced. Percentage tax on domestic carriers was removed. 93
Power producers are now exempt from paying franchise tax. 94

Aside from these, Congress also increased the income tax rates of corporations, in order
to distribute the burden of taxation. Domestic, foreign, and non-resident corporations are
now subject to a 35% income tax rate, from a previous 32%. 95 Intercorporate dividends
of non-resident foreign corporations are still subject to 15% final withholding tax but the
tax credit allowed on the corporation's domicile was increased to 20%. 96 The Philippine
Amusement and Gaming Corporation (PAGCOR) is not exempt from income taxes
anymore. 97 Even the sale by an artist of his works or services performed for the
production of such works was not spared.
All these were designed to ease, as well as spread out, the burden of taxation, which
would otherwise rest largely on the consumers. It cannot therefore be gainsaid that R.A.
No. 9337 is equitable.
C.Progressivity of Taxation
Lastly, petitioners contend that the limitation on the creditable input tax is anything but
regressive. It is the smaller business with higher input tax-output tax ratio that will suffer
the consequences.
Progressive taxation is built on the principle of the taxpayer's ability to pay. This principle
was also lifted from Adam Smith's Canons of Taxation, and it states:
I.The subjects of every state ought to contribute towards the support of the government,
as nearly as possible, in proportion to their respective abilities; that is, in proportion to
the revenue which they respectively enjoy under the protection of the state. TSacCH
Taxation is progressive when its rate goes up depending on the resources of the person
affected. 98
The VAT is an antithesis of progressive taxation. By its very nature, it is regressive. The
principle of progressive taxation has no relation with the VAT system inasmuch as the
VAT paid by the consumer or business for every goods bought or services enjoyed is the
same regardless of income. In other words, the VAT paid eats the same portion of an
income, whether big or small. The disparity lies in the income earned by a person or
profit margin marked by a business, such that the higher the income or profit margin, the
smaller the portion of the income or profit that is eaten by VAT. A converso, the lower the
income or profit margin, the bigger the part that the VAT eats away. At the end of the
day, it is really the lower income group or businesses with low-profit margins that is
always hardest hit.
Nevertheless, the Constitution does not really prohibit the imposition of indirect taxes,
like the VAT. What it simply provides is that Congress shall "evolve a progressive system
of taxation." The Court stated in the Tolentino case, thus:
The Constitution does not really prohibit the imposition of indirect taxes which, like the
VAT, are regressive. What it simply provides is that Congress shall 'evolve a progressive
system of taxation.' The constitutional provision has been interpreted to mean simply
that 'direct taxes are . . . to be preferred [and] as much as possible, indirect taxes should
be minimized.' (E. FERNANDO, THE CONSTITUTION OF THE PHILIPPINES 221 (Second ed.
1977)) Indeed, the mandate to Congress is not to prescribe, but to evolve, a progressive
tax system. Otherwise, sales taxes, which perhaps are the oldest form of indirect taxes,

would have been prohibited with the proclamation of Art. VIII, 17 (1) of the 1973
Constitution from which the present Art. VI, 28 (1) was taken. Sales taxes are also
regressive.
Resort to indirect taxes should be minimized but not avoided entirely because it is
difficult, if not impossible, to avoid them by imposing such taxes according to the
taxpayers' ability to pay. In the case of the VAT, the law minimizes the regressive effects
of this imposition by providing for zero rating of certain transactions (R.A. No. 7716, 3,
amending 102 (b) of the NIRC), while granting exemptions to other transactions. (R.A.
No. 7716, 4 amending 103 of the NIRC) 99
CONCLUSION
It has been said that taxes are the lifeblood of the government. In this case, it is just an
enema, a first-aid measure to resuscitate an economy in distress. The Court is neither
blind nor is it turning a deaf ear on the plight of the masses. But it does not have the
panacea for the malady that the law seeks to remedy. As in other cases, the Court
cannot strike down a law as unconstitutional simply because of its yokes.
Let us not be overly influenced by the plea that for every wrong there is a remedy, and
that the judiciary should stand ready to afford relief. There are undoubtedly many wrongs
the judicature may not correct, for instance, those involving political questions. . . .
Let us likewise disabuse our minds from the notion that the judiciary is the repository of
remedies for all political or social ills; We should not forget that the Constitution has
judiciously allocated the powers of government to three distinct and separate
compartments; and that judicial interpretation has tended to the preservation of the
independence of the three, and a zealous regard of the prerogatives of each, knowing
full well that one is not the guardian of the others and that, for official wrong-doing, each
may be brought to account, either by impeachment, trial or by the ballot box. 100
The words of the Court in Vera vs. Avelino 101 holds true then, as it still holds true now.
All things considered, there is no raison d'tre for the unconstitutionality of R.A. No.
9337.
WHEREFORE, Republic Act No. 9337 not being unconstitutional, the petitions in G.R. Nos.
168056, 168207, 168461, 168463, and 168730, are hereby DISMISSED.
There being no constitutional impediment to the full enforcement and implementation of
R.A. No. 9337, the temporary restraining order issued by the Court on July 1, 2005 is
LIFTED upon finality of herein decision.
SO ORDERED.
Carpio, J., concurs.
Davide, Jr., C.J., pls. see separate concurring and dissenting opinion.
Puno, J., pls. see concurring and dissenting opinion.
Panganiban, J., please see separate opinion.

Quisumbing, J., concurs in the result.

Ynares-Santiago, J., concurring and dissenting opinion.
Sandoval-Gutierrez, J., pls. see my concurring and dissenting opinion.
Corona, J., I join Mrs. Justice Gutierrez in her concurring and dissenting opinion.
Carpio-Morales, J., I concur. I also concur with the dissent of J. Tinga on Section 8 of the
law.
Callejo, Sr., J., pls. see my concurring and dissenting opinion.
Azcuna, J., pls. see separate concurring and dissenting opinion.
Tinga, J., see dissenting and concurring opinion.
Chico-Nazario, J., pls. see separate concurring opinion.
Garcia, J., I also concur with J. Puno insofar as the deletion of no pass on provision
(illegible portion) including section 21.
Separate Opinions
Separate Opinions
DAVIDE, JR., C.J., separate concurring and dissenting opinion:
While I still hold on to my position expressed in my dissenting opinion in the first VAT
cases, 1 I partly yield to the application to the cases at bar of the rule on "germaneness"
therein enunciated. Thus, I concur with the ponencia of my highly-esteemed colleague
Mme. Justice Ma. Alicia Austria-Martinez except as regards its ruling on the issue of
whether Republic Act No. 9337 violates Section 24, Article VI of the Constitution.
R.A. No. 9337 primarily aims to restructure the value-added tax (VAT) system by
broadening its base and raising the rate so as to generate more revenues for the
government that can assuage the economic predicament that our country is now facing.
This recently enacted law stemmed from three legislative bills: House Bill (HB) No. 3555,
HB No. 3705, and Senate Bill (SB) 1950. The first (HB No. 3555) called for the
amendment of Sections 106, 107, 108, 109, 110, and 111 of the National Internal
Revenue Code (NIRC)as amended; while the second (HB No. 3705) proposed
amendments to Sections 106, 107, 108, 110, and 114 of the NIRC,as amended. It is
significant to note that all these Sections specifically deal with VAT. And indubitably,
these bills are revenue bills in that they are intended to levy taxes and raise funds for the
government. 2
On the other hand, SB No. 1950 introduced amendments to "Sections 27, 28, 34, 106,
108, 109, 110, 111, 112, 113, 114, 116, 117, 118, 119, 125, 148, 236, 237, and 288" of
the NIRC,as amended. Among the provisions sought to be amended, only Sections 106,
108, 109, 110, 111, 112, 113, 114, and 116 pertain to VAT. And while Sections 236, 237,
and 288 are administrative provisions pertaining to registration requirements and

issuance of receipts commercial invoices, the proposed amendments thereto are related
to VAT. Hence, the proposed amendments to these Sections were validly taken
cognizance of and properly considered by the Bicameral Conference Committee (BCC).
DHATcE
However, I am of the opinion that the inclusion into the law of the amendments proposed
in SB No. 1950 to the following provisions (with modifications on the rates of taxes) is
invalid.
ProvisionSubject matter
Section 27Rate of income tax on domestic corporations
Section 28(A)(1)Rate of income tax on resident foreign
corporation
Section 28(B)(1)Rate of income tax on non-resident foreign
corporation
Section 28(B)(5-b)Rate of income tax on intra-corporate dividends
received by non-resident foreign corporation
Section 34(B)(1)Deductions from gross income
Section 117Percentage tax on domestic carriers and keepers
of garages
Section 119Tax on franchises
Section 148Excise tax on manufactured oils and other fuels
Obviously, these provisions do not deal with VAT. It must be noted that the House Bills
initiated amendments to provisions pertaining to VAT only. Doubtless, the Senate has the
constitutional power to concur with the amendments to the VAT provisions introduced in
the House Bills or even to propose its own version of VAT measure. But that power does
not extend to initiation of other tax measures, such as introducing amendments to
provisions on corporate income taxes, percentage taxes, franchise taxes, and excise
taxes like what the Senate did in these cases. It was beyond the ambit of the authority of
the Senate to propose amendments to provisions not covered by the House Bills or not
related to the subject matter of the House Bills, which is VAT. To allow the Senate to do so
would be tantamount to vesting in it the power to initiate revenue bills a power that
exclusively pertains to the House of Representatives under Section 24, Article VI of the
Constitution, which provides:

Sec. 24.All appropriation, revenue or tariff bills, bills authorizing increase of the public
debt, bills of local application, and private bills shall originate exclusively in the House of
Representatives but the Senate may propose or concur with amendments. ADaECI

Moreover, Sections 121 (Percentage Tax on Banks and Non-Bank Financial

Intermediaries) and 151 (Excise Tax on Mineral Products) of the NIRC,as amended, have
been included by the BCC in R.A. N0. 9337 even though they were not found in the
Senate and House Bills.
In Philippine Judges Association v. Prado, 3 the Court described the function of a
conference committee in this wise: "A conference committee may deal generally with the
subject matter or it may be limited to resolving the precise differences between the two
houses. Even where the conference committee is not by rule limited in its jurisdiction,
legislative custom severely limits the freedom with which new subject matter can be
inserted into the conference bill."
The limitation on the power of a conference committee to insert new provisions was laid
down in Tolentino v. Secretary of Finance. 4 There, the Court, while recognizing the power
of a conference committee to include in its report an entirely new provision that is not
found either in the House bill or in the Senate bill, held that the exercise of that power is
subject to the condition that the said provision is "germane to the subject of the House
and Senate bills."
As pointed out by the petitioners, Tolentino differs from the present cases in the sense
that in that case the amendments introduced in the Senate bill were on the same subject
matter treated in the House bill, which was VAT, and the new provision inserted by the
conference committee had relation to that subject matter. Specifically, HB No. 11197
called for the (1) amendment of Sections 99, 100, 102, 103, 104, 105, 106, 107, 108,
110, 112, 115, 116, 236, 237, and 238 of the NIRC,as amended; and (2) repeal of
Sections 113 and 114 of the NIRC,as amended. SB No. 1630, on the other hand,
proposed the (1) amendment of Sections 99, 100, 102, 103, 104, 105, 107, 108, 110,
112, 236, 237, and 238 of the NIRC,as amended; and (2) repeal of Sections 113, 114,
and 116 of the NIRC,as amended. In short, all the provisions sought to be changed in the
Senate bill were covered in the House bill. Although the new provisions inserted by the
conference committee were not found in either the House or Senate bills, they were
germane to the general subject of the bills.
In the present cases, the provisions inserted by the BCC, namely, Sections 121
(Percentage Tax on Banks and Non-Bank Financial Intermediaries) and 151 (Excise Tax on
Mineral Products) of the NIRC,as amended, are undoubtedly germane to SB No. 1950,
which introduced amendments to the provisions on percentage and excise taxes but
foreign to HB Nos. 3555 and 3705, which dealt with VAT only. Since the proposed
amendments in the Senate bill relating to percentage and excise taxes cannot
themselves be sustained because they did not take their root from, or are not related to
the subject of, HB Nos. 3705 and 3555, in violation of Section 24, Article VI of the
Constitution, the new provisions inserted by the BCC on percentage and excise taxes
would have no leg to stand on. DCcTHa
I understand very well that the amendments of the Senate and the BCC relating to
corporate income, percentage, franchise, and excise taxes were designed to "soften the
impact of VAT measure on the consumer, i.e., by distributing the burden across all
sectors instead of putting it entirely on the shoulders of the consumers" and to alleviate
the country's financial problems by bringing more revenues for the government.
However, these commendable intentions do not justify a deviation from the Constitution,
which mandates that the initiative for filing revenue bills should come from the House of

Representatives, not from the Senate. After all, these aims may still be realized by
means of another bill that may later be initiated by the House of Representatives.
Therefore, I vote to declare R.A. No. 9337 as constitutional insofar as it amends
provisions pertaining to VAT. However, I vote to declare as unconstitutional Sections 1, 2,
3, 14, 15, 16, 17, and 18 thereof which, respectively, amend Sections 27, 28, 34, 117,
119, 121, 148, and 151 of the NIRC,as amended because these amendments deal with
subject matters which were not touched or covered by the bills emanating from the
House of Representatives, thereby violating Section 24 of Article VI of the Constitution.
PUNO, J., concurring and dissenting:
The main opinion of Madam Justice Martinez exhaustively discusses the numerous
constitutional and legal issues raised by the petitioners. Be that as it may, I wish to raise
the following points, viz:
First. Petitioners assail sections 4 to 6 of Republic Act No. 9337 as violative of the
principle of non-delegation of legislative power. These sections authorize the President,
upon recommendation of the Secretary of Finance, to raise the value-added tax (VAT)
rate to 12% effective January 1, 2006, upon satisfaction of the following conditions: viz:
(i)Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the
previous year exceeds two and four-fifth percent (2 4/5%); or
(ii)National government deficit as a percentage of GDP of the previous year exceeds one
and one-half percent (1 1/2%).
The power of judicial review under Article VIII, section 5(2) of the 1987 Constitution is
limited to the review of "actual cases and controversies." 1 As rightly stressed by retired
Justice Vicente V. Mendoza, this requirement gives the judiciary "the opportunity, denied
to the legislature, of seeing the actual operation of the statute as it is applied to actual
facts and thus enables it to reach sounder judgment" and "enhances public acceptance
of its role in our system of government." 2 It also assures that the judiciary does not
intrude on areas committed to the other branches of government and is confined to its
role as defined by the Constitution. 3 Apposite thereto is the doctrine of ripeness whose
basic rationale is "to prevent the courts, through premature adjudication, from
entangling themselves in abstract disagreements." 4 Central to the doctrine is the
determination of "whether the case involves uncertain or contingent future events that
may not occur as anticipated, or indeed may not occur at all." 5 The ripeness
requirement must be satisfied for each challenged legal provision and parts of a statute
so that those which are "not immediately involved are not thereby thrown open for a
judicial determination of constitutionality." 6
It is manifest that the constitutional challenge to sections 4 to 6 of R.A. No. 9337 cannot
hurdle the requirement of ripeness. These sections give the President the power to raise
the VAT rate to 12% on January 1, 2006 upon satisfaction of certain fact-based
conditions. We are not endowed with the infallible gift of prophesy to know whether
these conditions are certain to happen. The power to adjust the tax rate given to the
President is futuristic and may or may not be exercised. The Court is therefore
beseeched to render a conjectural judgment based on hypothetical facts. Such a
supplication has to be rejected. AcSCaI

Second. With due respect, I submit that the most important constitutional issue posed by
the petitions at bar relates to the parameters of power of a Bicameral Conference
Committee. Most of the issues in the petitions at bar arose because the Bicameral
Conference Committee concerned exercised powers that went beyond reconciling the
differences between Senate Bill No. 1950 and House Bill Nos. 3705 and 3555. In Tolentino
v. Secretary of Finance, 7 I ventured the view that a Bicameral Conference Committee
has limited powers and cannot be allowed to act as if it were a "third house" of Congress.
I further warned that unless its roving powers are reigned in, a Bicameral Conference
Committee can wreck the lawmaking process which is a cornerstone of the democratic,
republican regime established in our Constitution. The passage of time fortifies my faith
that there ought to be no legal u-turn on this preeminent principle. I wish, therefore, to
reiterate my reasons for this unbending view, viz: 8
Section 209, Rule XII of the Rules of the Senate provides:
In the event that the Senate does not agree with the House of Representatives on the
provision of any bill or joint resolution, the differences shall be settled by a conference
committee of both Houses which shall meet within ten days after their composition.
Each Conference Committee Report shall contain a detailed and sufficiently explicit
statement of the changes in or amendments to the subject measure, and shall be signed
by the conferees. (Emphasis supplied)
The counterpart rule of the House of Representatives is cast in near identical language.
Section 85 of the Rules of the House of Representatives pertinently provides:
In the event that the House does not agree with the Senate on the amendments to any
bill or joint resolution, the differences may be settled by a conference committee of both
chambers.
. . . . Each report shall contain a detailed, sufficiently explicit statement of the changes in
or amendments to the subject measure. (Emphasis supplied)
The Jefferson's Manual has been adopted as a supplement to our parliamentary rules and
practice. Section 456 of Jefferson's Manual similarly confines the powers of a conference
committee, viz:
The managers of a conference must confine themselves to the differences committed to
them . . . and may not include subjects not within the disagreements, even though
germane to a question in issue.
This rule of antiquity has been honed and honored in practice by the Congress of the
United States. Thus, it is chronicled by Floyd Biddick, Parliamentarian Emeritus of the
United States Senate, viz:

Committees of conference are appointed for the sole purpose of compromising and
adjusting the differing and conflicting opinions of the two Houses and the committees of
conference alone can grant compromises and modify propositions of either Houses within

the limits of the disagreement. Conferees are limited to the consideration of differences
between the two Houses.
Congress shall not insert in their report matters not committed to them by either House,
nor shall they strike from the bill matters agreed to by both Houses. No matter on which
there is nothing in either the Senate or House passed versions of a bill may be included
in the conference report and actions to the contrary would subject the report to a point
of order. (Emphasis ours)
In fine, there is neither a sound nor a syllable in the Rules of the Senate and the House of
Representatives to support the thesis of the respondents that a bicameral conference
committee is clothed with an ex post veto power.
But the thesis that a Bicameral Conference Committee can wield ex post veto power
does not only contravene the rules of both the Senate and the House. It wages war
against our settled ideals of representative democracy. For the inevitable, catastrophic
effect of the thesis is to install a Bicameral Conference Committee as the Third Chamber
of our Congress, similarly vested with the power to make laws but with the dissimilarity
that its laws are not the subject of a free and full discussion of both Houses of Congress.
With such a vagrant power, a Bicameral Conference Committee acting as a Third
Chamber will be a constitutional monstrosity. ScCEIA
It needs no omniscience to perceive that our Constitution did not provide for a Congress
composed of three chambers. On the contrary, section 1, Article VI of the Constitution
provides in clear and certain language: "The legislative power shall be vested in the
Congress of the Philippines which shall consist of a Senate and a House of
Representatives . . ." Note that in vesting legislative power exclusively to the Senate and
the House, the Constitution used the word "shall." Its command for a Congress of two
houses is mandatory. It is not mandatory sometimes.
In vesting legislative power to the Senate, the Constitution means the Senate ". . .
composed of twenty-four Senators . . . elected at large by the qualified voters of the
Philippines . . . " Similarly, when the Constitution vested the legislative power to the
House, it means the House ". . . composed of not more than two hundred and fifty
members . . . who shall be elected from legislative districts . . . and those who . . . shall
be elected through a party-list system of registered national, regional, and sectoral
parties or organizations." The Constitution thus, did not vest on a Bicameral Conference
Committee with an ad hoc membership the power to legislate for it exclusively vested
legislative power to the Senate and the House as co-equal bodies. To be sure, the
Constitution does not mention the Bicameral Conference Committees of Congress. No
constitutional status is accorded to them. They are not even statutory creations. They
owe their existence from the internal rules of the two Houses of Congress. Yet,
respondents peddle the disconcerting idea that they should be recognized as a Third
Chamber of Congress and with ex post veto power at that.
The thesis that a Bicameral Conference Committee can exercise law making power with
ex post veto power is freighted with mischief. Law making is a power that can be used
for good or for ill, hence, our Constitution carefully laid out a plan and a procedure for its
exercise. Firstly, it vouchsafed that the power to make laws should be exercised by no
other body except the Senate and the House. It ought to be indubitable that what is
contemplated is the Senate acting as a full Senate and the House acting as a full House.

It is only when the Senate and the House act as whole bodies that they truly represent
the people. And it is only when they represent the people that they can legitimately pass
laws. Laws that are not enacted by the people's rightful representatives subvert the
people's sovereignty. Bicameral Conference Committees, with their ad hoc character and
limited membership, cannot pass laws for they do not represent the people. The
Constitution does not allow the tyranny of the majority. Yet, the respondents will impose
the worst kind of tyranny the tyranny of the minority over the majority. Secondly, the
Constitution delineated in deft strokes the steps to be followed in making laws. The
overriding purpose of these procedural rules is to assure that only bills that successfully
survive the searching scrutiny of the proper committees of Congress and the full and
unfettered deliberations of both Houses can become laws. For this reason, a bill has to
undergo three (3) mandatory separate readings in each House. In the case at bench, the
additions and deletions made by the Bicameral Conference Committee did not enjoy the
enlightened studies of appropriate committees. It is meet to note that the complexities
of modern day legislations have made our committee system a significant part of the
legislative process. Thomas Reed called the committee system as "the eye, the ear, the
hand, and very often the brain of the house." President Woodrow Wilson of the United
States once referred to the government of the United States as "a government by the
Chairmen of the Standing Committees of Congress . . ." Neither did these additions and
deletions of the Bicameral Conference Committee pass through the coils of collective
deliberation of the members of the two Houses acting separately. Due to this
shortcircuiting of the constitutional procedure of making laws, confusion shrouds the
enactment of R.A. No. 7716. Who inserted the additions and deletions remains a mystery.
Why they were inserted is a riddle. To use a Churchillian phrase, lawmaking should not
be a riddle wrapped in an enigma. It cannot be, for Article II, section 28 of the
Constitution mandates the State to adopt and implement a "policy of full public
disclosure of all its transactions involving public interest." The Constitution could not
have contemplated a Congress of invisible and unaccountable John and Mary Does. A law
whose rationale is a riddle and whose authorship is obscure cannot bind the people.
ECcaDT
All these notwithstanding, respondents resort to the legal cosmetology that these
additions and deletions should govern the people as laws because the Bicameral
Conference Committee Report was anyway submitted to and approved by the Senate
and the House of Representatives. The submission may have some merit with respect to
provisions agreed upon by the Committee in the process of reconciling conflicts between
S.B. No. 1630 and H.B. No. 11197. In these instances, the conflicting provisions had been
previously screened by the proper committees, deliberated upon by both Houses and
approved by them. It is, however, a different matter with respect to additions and
deletions which were entirely new and which were made not to reconcile inconsistencies
between S.B. No. 1630 and H.B. No. 11197. The members of the Bicameral Conference
Committee did not have any authority to add new provisions or delete provisions already
approved by both Houses as it was not necessary to discharge their limited task of
reconciling differences in bills. At that late stage of law making, the Conference
Committee cannot add/delete provisions which can become laws without undergoing the
study and deliberation of both chambers given to bills on 1st, 2nd, and 3rd readings.
Even the Senate and the House cannot enact a law which will not undergo these
mandatory three (3) readings required by the Constitution. If the Senate and the House
cannot enact such a law, neither can the lesser Bicameral Conference Committee.

Moreover, the so-called choice given to the members of both Houses to either approve or
disapprove the said additions and deletions is more of an optical illusion. These additions
and deletions are not submitted separately for approval. They are tucked to the entire
bill. The vote is on the bill as a package, i.e., together with the insertions and deletions.
And the vote is either "aye" or "nay," without any further debate and deliberation. Quite
often, legislators vote "yes" because they approve of the bill as a whole although they
may object to its amendments by the Conference Committee. This lack of real choice is
well observed by Robert Luce:
Their power lies chiefly in the fact that reports of conference committees must be
accepted without amendment or else rejected in toto. The impulse is to get done with
the matter and so the motion to accept has undue advantage, for some members are
sure to prefer swallowing unpalatable provisions rather than prolong controversy. This is
the more likely if the report comes in the rush of business toward the end of a session,
when to seek further conference might result in the loss of the measure altogether. At
any time in the session there is some risk of such a result following the rejection of a
conference report, for it may not be possible to secure a second conference, or delay
may give opposition to the main proposal chance to develop more strength.
In a similar vein, Prof. Jack Davies commented that "conference reports are returned to
assembly and Senate on a take-it or leave-it-basis, and the bodies are generally placed in
the position that to leave-it is a practical impossibility." Thus, he concludes that
"conference committee action is the most undemocratic procedure in the legislative
process."
The respondents also contend that the additions and deletions made by the Bicameral
Conference Committee were in accord with legislative customs and usages. The
argument does not persuade for it misappreciates the value of customs and usages in
the hierarchy of sources of legislative rules of procedure. To be sure, every legislative
assembly has the inherent right to promulgate its own internal rules. In our jurisdiction,
Article VI, section 16(3) of the Constitution provides that "Each House may determine the
rules of its proceedings . . . ." But it is hornbook law that the sources of Rules of
Procedure are many and hierarchical in character. Mason laid them down as follows:

xxx xxx xxx

1.Rules of Procedure are derived from several sources. The principal sources are as
follows:
a.Constitutional rules.
b.Statutory rules or charter provisions.
c.Adopted rules.
d.Judicial decisions.
e.Adopted parliamentary authority.
f.Parliamentary law.

g.Customs and usages.

2.The rules from the different sources take precedence in the order listed above except
that judicial decisions, since they are interpretations of rules from one of the other
sources, take the same precedence as the source interpreted. Thus, for example, an
interpretation of a constitutional provision takes precedence over a statute.
3.Whenever there is conflict between rules from these sources the rule from the source
listed earlier prevails over the rule from the source listed later. Thus, where the
Constitution requires three readings of bills, this provision controls over any provision of
statute, adopted rules, adopted manual, or of parliamentary law, and a rule of
parliamentary law controls over a local usage but must give way to any rule from a
higher source of authority. (Emphasis ours)
As discussed above, the unauthorized additions and deletions made by the Bicameral
Conference Committee violated the procedure fixed by the Constitution in the making of
laws. It is reasonless for respondents therefore to justify these insertions as sanctioned
by customs and usages.
Finally, respondents seek sanctuary in the conclusiveness of an enrolled bill to bar any
judicial inquiry on whether Congress observed our constitutional procedure in the
passage of R.A. No. 7716. The enrolled bill theory is a historical relic that should not
continuously rule us from the fossilized past. It should be immediately emphasized that
the enrolled bill theory originated in England where there is no written constitution and
where Parliament is supreme. In this jurisdiction, we have a written constitution and the
legislature is a body of limited powers. Likewise, it must be pointed out that starting from
the decade of the 40s, even American courts have veered away from the rigidity and
unrealism of the conclusiveness of an enrolled bill. Prof. Sutherland observed:
xxx xxx xxx
Where the failure of constitutional compliance in the enactment of statutes is not
discoverable from the face of the act itself but may be demonstrated by recourse to the
legislative journals, debates, committee reports or papers of the governor, courts have
used several conflicting theories with which to dispose of the issue. They have held: (1)
that the enrolled bill is conclusive and like the sheriff's return cannot be attacked; (2)
that the enrolled bill is prima facie correct and only in case the legislative journal shows
affirmative contradiction of the constitutional requirement will the bill be held invalid; (3)
that although the enrolled bill is prima facie correct, evidence from the journals, or other
extrinsic sources is admissible to strike the bill down; (4) that the legislative journal is
conclusive and the enrolled bills is valid only if it accords with the recital in the journal
and the constitutional procedure.
Various jurisdictions have adopted these alternative approaches in view of strong dissent
and dissatisfaction against the philosophical underpinnings of the conclusiveness of an
enrolled bill. Prof. Sutherland further observed:
. . . . Numerous reasons have been given for this rule. Traditionally, an enrolled bill was
"a record" and as such was not subject to attack at common law. Likewise, the rule of
conclusiveness was similar to the common law rule of the inviolability of the sheriff's
return. Indeed, they had the same origin, that is, the sheriff was an officer of the king

and likewise the parliamentary act was a regal act and no official might dispute the
king's word. Transposed to our democratic system of government, courts held that as the
legislature was an official branch of government the court must indulge every
presumption that the legislative act was valid. The doctrine of separation of powers was
advanced as a strong reason why the court should treat the acts of a co-ordinate branch
of government with the same respect as it treats the action of its own officers; indeed, it
was thought that it was entitled to even greater respect, else the court might be in the
position of reviewing the work of a supposedly equal branch of government. When these
arguments failed, as they frequently did, the doctrine of convenience was advanced, that
is, that it was not only an undue burden upon the legislature to preserve its records to
meet the attack of persons not affected by the procedure of enactment, but also that it
unnecessarily complicated litigation and confused the trial of substantive issues.
Although many of these arguments are persuasive and are indeed the basis for the rule
in many states today, they are not invulnerable to attack. The rule most relied on the
sheriff's return or sworn official rule did not in civil litigation deprive the injured party
of an action, for always he could sue the sheriff upon his official bond. Likewise, although
collateral attack was not permitted, direct attack permitted raising the issue of fraud,
and at a later date attack in equity was also available; and that the evidence of the
sheriff was not of unusual weight was demonstrated by the fact that in an action against
the sheriff no presumption of its authenticity prevailed.
The argument that the enrolled bill is a "record" and therefore unimpeachable is likewise
misleading, for the correction of records is a matter of established judicial procedure.
Apparently, the justification is either the historical one that the king's word could not be
questioned or the separation of powers principle that one branch of the government
must treat as valid the acts of another. TcCDIS
Persuasive as these arguments are, the tendency today is to avoid reaching results by
artificial presumptions and thus it would seem desirable to insist that the enrolled bill
stand or fall on the basis of the relevant evidence which may be submitted for or against
it. (Emphasis ours)
Thus, as far back as the 1940s, Prof. Sutherland confirmed that ". . . the tendency seems
to be toward the abandonment of the conclusive presumption rule and the adoption of
the third rule leaving only a prima facie presumption of validity which may be attacked
by any authoritative source of information.
Third. I respectfully submit that it is only by strictly following the contours of powers of a
Bicameral Conference Committee, as delineated by the rules of the House and the
Senate, that we can prevent said Committee from acting as a "third" chamber of
Congress. Under the clear rules of both the Senate and House, its power can go no
further than settling differences in their bills or joint resolutions. Sections 88 and 89, Rule
XIV of the Rules of the House of Representatives provide as follows:
Sec. 88.Conference Committee. In the event that the House does not agree with the
Senate on the amendment to any bill or joint resolution, the differences may be settled
by the conference committees of both chambers.
In resolving the differences with the Senate, the House panel shall, as much as possible,
adhere to and support the House Bill. If the differences with the Senate are so substantial

that they materially impair the House Bill, the panel shall report such fact to the House
for the latter's appropriate action.
Sec. 89.Conference Committee Reports. . . . Each report shall contain a detailed,
sufficiently explicit statement of the changes in or amendments to the subject measure.
xxx xxx xxx
The Chairman of the House panel may be interpellated on the Conference Committee
Report prior to the voting thereon. The House shall vote on the Conference Committee
Report in the same manner and procedure as it votes a bill on third and final reading.
Section 35, Rule XII of the Rules of the Senate states:
Sec. 35.In the event that the Senate does not agree with the House of Representatives
on the provision of any bill or joint resolution, the differences shall be settled by a
conference committee of both Houses which shall meet within ten (10) days after their
composition. The President shall designate the members of the Senate Panel in the
conference committee with the approval of the Senate.
Each Conference Committee Report shall contain a detailed and sufficiently explicit
statement of the changes in, or amendments to the subject measure, and shall be signed
by a majority of the members of each House panel, voting separately. HICEca
The House rule brightlines the following: (1) the power of the Conference Committee is
limited . . . it is only to settle differences with the Senate; (2) if the differences are
substantial, the Committee must report to the House for the latter's appropriate action;
and (3) the Committee report has to be voted upon in the same manner and procedure
as a bill on third and final reading. Similarly, the Senate rule underscores in crimson that
(1) the power of the Committee is limited to settle differences with the House; (2) it
can make changes or amendments only in the discharge of this limited power to settle
differences with the House; and (3) the changes or amendments are merely
recommendatory for they still have to be approved by the Senate.
Under both rules, it is obvious that a Bicameral Conference Committee is a mere agent of
the House or the Senate with limited powers. The House contingent in the Committee
cannot, on its own, settle differences which are substantial in character. If it is confronted
with substantial differences, it has to go back to the chamber that created it "for the
latter's appropriate action." In other words, it must take the proper instructions from the
chambers that created it. It cannot exercise its unbridled discretion. Where there is no
difference between the bills, it cannot make any change. Where the difference is
substantial, it has to return to the chamber of its origin and ask for appropriate
instructions. It ought to be indubitable that it cannot create a new law, i.e., that which
has never been discussed in either chamber of Congress. Its parameters of power are
not porous, for they are hedged by the clear limitation that its only power is to settle
differences in bills and joint resolutions of the two chambers of Congress.

Fourth. Prescinding from these premises, I respectfully submit that the following acts of
the Bicameral Conference Committee constitute grave abuse of discretion amounting to
lack or excess of jurisdiction and should be struck down as unconstitutional nullities, viz:

a.Its deletion of the pro poor "no pass on provision" which is common in both Senate Bill
No. 1950 and House Bill No. 3705.
Sec. 1 of House Bill No. 3705 9 provides:
Section 106 of the National Internal Revenue Code of 1997, as amended, is hereby
further amended to read as follows:
SEC. 106.Value-added Tax on Sale of Goods or Properties.
xxx xxx xxx
Provided, further, that notwithstanding the provision of the second paragraph of Section
105 of this Code, the Value-added Tax herein levied on the sale of petroleum products
under Subparagraph (1) hereof shall be paid and absorbed by the sellers of petroleum
products who shall be prohibited from passing on the cost of such tax payments, either
directly or indirectly[,] to any consumer in whatever form or manner, it being the express
intent of this act that the Value-added Tax shall be borne and absorbed exclusively by
the sellers of petroleum products . . . .
Sec. 3 of the same House bill provides:
Section 108 of the National Internal Revenue Code of 1997, as amended, is hereby
further amended to read as follows:
Sec. 108.Value-added Tax on Sale of Goods or Properties.
Provided, further, that notwithstanding the provision of the second paragraph of Section
105 of this Code, the Value-added Tax imposed under this paragraph shall be paid and
absorbed by the subject generation companies who shall be prohibited from passing on
the cost of such tax payments, either directly or indirectly[,] to any consumer in
whatever form or manner, it being the express intent of this act that the Value-added Tax
shall be borne and absorbed exclusively [by] the power-generating companies. CADSHI
In contrast and comparison, Sec. 5 of Senate Bill No. 1950 provides:
Value-added Tax on sale of Services and Use or Lease of Properties.
. . . Provided, that the VAT on sales of electricity by generation companies, and services
of transmission companies and distribution companies, as well as those of franchise
grantees of electrical utilities shall not apply to residential end-users: Provided, that the
Value-added Tax herein levied shall be absorbed and paid by the generation,
transmission and distribution companies concerned. The said companies shall not pass
on such tax payments to NAPOCOR or ultimately to the consumers, including but not
limited to residential end users, either as costs or in any other form whatsoever, directly
or indirectly. . . . .
Even the faintest eye contact with the above provisions will reveal that: (a) both the
House bill and the Senate bill prohibited the passing on to consumers of the VAT on sales
of electricity and (b) the House bill prohibited the passing on to consumers of the VAT on
sales of petroleum products while the Senate bill is silent on the prohibition.
In the guise of reconciling disagreeing provisions of the House and the Senate bills on the
matter, the Bicameral Conference Committee deleted the "no pass on provision" on both

the sales of electricity and petroleum products. This action by the Committee is not
warranted by the rules of either the Senate or the House. As aforediscussed, the only
power of a Bicameral Conference Committee is to reconcile disagreeing provisions in the
bills or joint resolutions of the two houses of Congress. The House and the Senate bills
both prohibited the passing on to consumers of the VAT on sales of electricity. The
Bicameral Conference Committee cannot override this unequivocal decision of the
Senate and the House. Nor is it clear that there is a conflict between the House and
Senate versions on the "no pass on provisions" of the VAT on sales of petroleum
products. The House version contained a "no pass on provision" but the Senate had
none. Elementary logic will tell us that while there may be a difference in the two
versions, it does not necessarily mean that there is a disagreement or conflict between
the Senate and the House. The silence of the Senate on the issue cannot be interpreted
as an outright opposition to the House decision prohibiting the passing on of the VAT to
the consumers on sales of petroleum products. Silence can even be conformity, albeit
implicit in nature. But granting for the nonce that there is conflict between the two
versions, the conflict cannot escape the characterization as a substantial difference. The
seismic consequence of the deletion of the "no pass on provision" of the VAT on sales of
petroleum products on the ability of our consumers, especially on the roofless and the
shirtless of our society, to survive the onslaught of spiraling prices ought to be beyond
quibble. The rules require that the Bicameral Conference Committee should not, on its
own, act on this substantial conflict. It has to seek guidance from the chamber that
created it. It must receive proper instructions from its principal, for it is the law of nature
that no spring can rise higher than its source. The records of both the Senate and the
House do not reveal that this step was taken by the members of the Bicameral
Conference Committee. They bypassed their principal and ran riot with the exercise of
powers that the rules never bestowed on them.
b.Even more constitutionally obnoxious are the added restrictions on local government's
use of incremental revenue from the VAT in Section 21 of R.A. No. 9337 which were not
present in the Senate or House Bills. Section 21 of R.A. No. 9337 provides:
Fifty percent of the local government unit's share from VAT shall be allocated and used
exclusively for the following purposes:
1.Fifteen percent (15%) for public elementary and secondary education to finance the
construction of buildings, purchases of school furniture and in-service teacher trainings;
2.Ten percent (10%) for health insurance premiums of enrolled indigents as a
counterpart contribution of the local government to sustain the universal coverage of the
national health insurance program;
3.Fifteen percent (15%) for environmental conservation
comprehensive national reforestation program; and

to

fully

implement

4.Ten percent (10%) for agricultural modernization to finance the construction of farm-tomarket roads and irrigation facilities.
Such allocations shall be segregated as separate trust funds by the national treasury and
shall be over and above the annual appropriation for similar purposes.

These amendments did not harmonize conflicting provisions between the constituent
bills of R.A. No. 9337 but are entirely new and extraneous concepts which fall beyond the
median thereof. They transgress the limits of the Bicameral Conference Committee's
authority and must be struck down.
I cannot therefore subscribe to the thesis of the majority that "the changes introduced by
the Bicameral Conference Committee on disagreeing provisions were meant only to
reconcile and harmonize the disagreeing provisions for it did not inject any idea or intent
that is wholly foreign to the subject embraced by the original provisions."
Fifth. The majority further defends the constitutionality of the above provisions by
holding that "all the changes or modifications were germane to subjects of the provisions
referred to it for reconciliation."
With due respect, it is high time to re-examine the test of germaneness proffered in
Tolentino.
The test of germaneness is overly broad and is the fountainhead of mischief for it allows
the Bicameral Conference Committee to change provisions in the bills of the House and
the Senate when they are not even in disagreement. Worse still, it enables the
Committee to introduce amendments which are entirely new and have not previously
passed through the coils of scrutiny of the members of both houses. The Constitution did
not establish a Bicameral Conference Committee that can act as a "third house" of
Congress with super veto power over bills passed by the Senate and the House. We
cannot concede that super veto power without wrecking the delicate architecture of
legislative power so carefully laid down in our Constitution. The clear intent of our
fundamental law is to install a lawmaking structure composed only of two houses whose
members would thoroughly debate proposed legislations in representation of the will of
their respective constituents. The institution of this lawmaking structure is unmistakable
from the following provisions: (1) requiring that legislative power shall be vested in a
bicameral legislature; 10 (2) providing for quorum requirements; 11 (3) requiring that
appropriation, revenue or tariff bills, bills authorizing increase of public debt, bills of local
application, and private bills originate exclusively in the House of Representatives; 12 (4)
requiring that bills embrace one subject expressed in the title thereof; 13 and (5)
mandating that bills undergo three readings on separate days in each House prior to
passage into law and prohibiting amendments on the last reading thereof. 14 A
Bicameral Conference Committee with untrammeled powers will destroy this lawmaking
structure. At the very least, it will diminish the free and open debate of proposed
legislations and facilitate the smuggling of what purports to be laws.
On this point, Mr. Robert Luce's disconcerting observations are apropos:
"Their power lies chiefly in the fact that reports of conference committees must be
accepted without amendment or else rejected in toto. The impulse is to get done with
the matters and so the motion to accept has undue advantage, for some members are
sure to prefer swallowing unpalatable provisions rather than prolong controversy. This is
more likely if the report comes in the rush of business toward the end of the session,
when to seek further conference might result in the loss of the measure altogether. At
any time in the session there is some risk of such a result following the rejection of a
conference report, for it may not be possible to secure a second conference, or delay
may give opposition to the main proposal chance to develop more strength.

xxx xxx xxx

Entangled in a network of rule and custom, the Representative who resents and would
resist this theft of his rights, finds himself helpless. Rarely can be vote, rarely can he
voice his mind, in the matter of any fraction of the bill. Usually he cannot even record
himself as protesting against some one feature while accepting the measure as whole.
Worst of all, he cannot by argument or suggested change, try to improve what the other
branch has done.
This means more than the subversion of individual rights. It means to a degree the
abandonment of whatever advantage the bicameral system may have. By so much it in
effect transfers the lawmaking power to small group of members who work out in private
a decision that almost always prevails. What is worse, these men are not chosen in a
way to ensure the wisest choice. It has become the practice to name as conferees the
ranking members of the committee, so that the accident of seniority determines.
Exceptions are made, but in general it is not a question of who are most competent to
serve. Chance governs, sometimes giving way to favor, rarely to merit.
xxx xxx xxx
Speaking broadly, the system of legislating by conference committee is unscientific and
therefore defective. Usually it forfeits the benefit of scrutiny and judgment by all the
wisdom available. Uncontrolled, it is inferior to that process by which every amendment
is secured independent discussion and vote. . . ." 15
It cannot be overemphasized that in a republican form of government, laws can only be
enacted by all the duly elected representatives of the people. It cuts against
conventional wisdom in democracy to lodge this power in the hands of a few or in the
claws of a committee. It is for these reasons that the argument that we should overlook
the excesses of the Bicameral Conference Committee because its report is anyway
approved by both houses is a futile attempt to square the circle for an unconstitutional
act is void and cannot be redeemed by any subsequent ratification.
Neither can we shut our eyes to the unconstitutional acts of the Bicameral Conference
Committee by holding that the Court cannot interpose its checking powers over mere
violations of the internal rules of Congress. In Arroyo, et al. v. de Venecia, et al., 16 we
ruled that when the violations affect private rights or impair the Constitution, the Court
has all the power, nay, the duty to strike them down.
In conclusion, I wish to stress that this is not the first time nor will it be last that
arguments will be foisted for the Court to merely wink at assaults on the Constitution on
the ground of some national interest, sometimes clear and at other times inchoate. To be
sure, it cannot be gainsaid that the country is in the vortex of a financial crisis. The
broadsheets scream the disconcerting news that our debt payments for the year 2006
will exceed Php 1 billion daily for interest alone. Experts underscore some factors that
will further drive up the debt service expenses such as the devaluation of the peso,
credit downgrades and a spike in interest rates. 17 But no doomsday scenario will ever
justify the thrashing of the Constitution. The Constitution is meant to be our rule both in

good times as in bad times. It is the Court's uncompromising obligation to defend the
Constitution at all times lest it be condemned as an irrelevant relic.
WHEREFORE, I concur with the majority but dissent on the following points:
a)I vote to withhold judgment on the constitutionality of the "standby authority" in
Sections 4 to 6 of Republic Act No. 9337 as this issue is not ripe for adjudication.;
b)I vote to declare unconstitutional the deletion by the Bicameral Conference Committee
of the pro poor "no pass on provision" on electricity to residential consumers as it
contravened the unequivocal intent of both Houses of Congress; and
c)I vote to declare Section 21 of Republic Act No. 9337 as unconstitutional as it contains
extraneous provisions not found in its constituent bills.
PANGANIBAN, J.:
The ponencia written by the esteemed Madame Justice Ma. Alicia Austria-Martinez
declares that the enrolled bill doctrine has been historically and uniformly upheld in our
country. Cited as recent reiterations of this doctrine are the two Tolentino v. Secretary of
Finance judgments 1 and Farias v. Executive Secretary. 2
Precedence of Mandatory
Constitutional Provisions
Over the Enrolled Bill Doctrine
I believe, however, that the enrolled bill doctrine 3 is not absolute. It may be allencompassing in some countries like Great Britain, 4 but as applied to our jurisdiction, it
must yield to mandatory provisions of our 1987 Constitution. The Court can take judicial
notice of the form of government 5 in Great Britain. 6 It is unlike that in our country and,
therefore, the doctrine from which it originated 7 could be modified accordingly by our
Constitution.
In fine, the enrolled bill doctrine applies mainly to the internal rules and processes
followed by Congress in its principal duty of lawmaking. However, when the Constitution
imposes certain conditions, restrictions or limitations on the exercise of congressional
prerogatives, the judiciary has both the power and the duty to strike down congressional
actions that are done in plain contravention of such conditions, restrictions or limitations.
8 Insofar as the present case is concerned, the three most important restrictions or
limitations to the enrolled bill doctrine are the "origination," "no-amendment" and "threereading" rules which I will discuss later.
Verily, these restrictions or limitations to the enrolled bill doctrine are safeguarded by the
expanded 9 constitutional mandate of the judiciary "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." 10 Even the ponente of
Tolentino, 11 the learned Mr. Justice Vicente V. Mendoza, concedes in another decision
that each house "may not by its rules ignore constitutional restraints or violate
fundamental rights, and there should be a reasonable relation between the mode or
method of proceeding established by the rule and the result which is sought to be
attained." 12

The Bicameral Conference Committee (BCC) created by Congress to iron out differences
between the Senate and the House of Representatives versions of the E-VAT bills 13 is
one such "branch or instrumentality of the government," over which this Court may
exercise certiorari review to determine whether or not grave abuse of discretion has
been committed; and, specifically, to find out whether the constitutional conditions,
restrictions and limitations on law-making have been violated.
In general, the BCC has at least five options in performing its functions: (1) adopt the
House version in part or in toto, (2) adopt the Senate version in part or in toto, (3)
consolidate the two versions, (4) reject non-conflicting provisions, and (5) adopt
completely new provisions not found in either version. This, therefore, is the simple
question: In the performance of its function of reconciling conflicting provisions, has the
Committee blatantly violated the Constitution? SAHIDc
My short answer is: No, except those relating to income taxes referred to in Sections 1, 2
and 3 of Republic Act (RA) No. 9337. Let me explain.
Adopting the House
Version in Part or in Toto
First, the BCC had the option of adopting the House bills either in part or in toto,
endorsing them without changes. Since these bills had passed the three-reading
requirement 14 under the Constitution, 15 it readily becomes apparent that no
procedural impediment would arise. There would also be no question as to their
origination, 16 because the bills originated exclusively from the House of
Representatives itself.
In the present case, the BCC did not ignore the Senate and adopt any of the House bills
in part or in toto. Therefore, this option was not taken by the BCC.
Adopting the Senate
Version in Part or in Toto
Second, the BCC may choose to adopt the Senate version either in part or in toto,
endorsing it also without changes. In so doing, the question of origination arises. Under
the 1987 Constitution, all "revenue . . . bills . . . shall originate exclusively in the House of
Representatives, but the Senate may propose or concur with amendments." 17
If the revenue bill originates exclusively from the Senate, then obviously the origination
provision 18 of the Constitution would be violated. If, however, it originates exclusively
from the House and presumably passes the three-reading requirement there, then the
question to contend with is whether the Senate amendments complied with the
"germane" principle.
While in the Senate, the House version may, per Tolentino, undergo extensive changes,
such that the Senate may rewrite not only portions of it but even all of it. 19 I believe
that such rewriting is limited by the "germane" principle: although "relevant" 20 or
"related" 21 to the general subject of taxation, the Senate version is not necessarily
"germane" all the time. The "germane" principle requires a legal not necessarily an
economic 22 or political interpretation. There must be an "inherent logical
connection." 23 What may be germane in an economic or political sense is not
necessarily germane in the legal sense. Otherwise, any provision in the Senate version
that is entirely new and extraneous, or that is remotely or even slightly connected, to the

vast and perplexing subject of taxation, would always be germane. Under this
interpretation, the origination principle would surely be rendered inutile.
To repeat, in Tolentino, the Court said that the Senate may even write its own version,
which in effect would be an amendment by substitution. 24 The Court went further by
saying that "the Constitution does not prohibit the filing in the Senate of a substitute bill
in anticipation of its receipt of the bill from the House, so long as action by the Senate as
a body is withheld pending receipt of the House bill." 25 After all, the initiative for filing a
revenue bill must come from the House 26 on the theory that, elected as its members
are from their respective districts, the House is more sensitive to local needs and
problems. By contrast, the Senate whose members are elected at large approaches the
matter from a national perspective, 27 with a broader and more circumspect outlook. 28

Even if I have some reservations on the foregoing sweeping pronouncements in

Tolentino, I shall not comment any further, because the BCC, in reconciling conflicting
provisions, also did not take the second option of ignoring the House bills completely and
of adopting only the Senate version in part or in toto. Instead, the BCC used or applied
the third option as will be discussed below.
Compromising
by Consolidating
As a third option, the BCC may reach a compromise by consolidating both the Senate
and the House versions. It can adopt some parts and reject other parts of both bills, and
craft new provisions or even a substitute bill. I believe this option is viable, provided that
there is no violation of the origination and germane principles, as well as the threereading rule. After all, the report generated by the BCC will not become a final valid act
of the Legislative Department until the BCC obtains the approval of both houses of
Congress. 29
Standby Authority. I believe that the BCC did not exceed its authority when it crafted the
so-called "standby authority" of the President. The originating bills from the House
imposed a 12 percent VAT rate, 30 while the bill from the Senate retained the original 10
percent. 31 The BCC opted to initially use the 10 percent Senate provision and to
increase this rate to the 12 percent House provision, effective January 1, 2006, upon the
occurrence of a predetermined factual scenario as follows:
"(i)[VAT] collection as a percentage of Gross Domestic Product (GDP) of the previous year
exceeds two and four-fifth percent (2 4/5%) or
(ii)National Government Deficit as a percentage of GDP of the previous year exceeds one
and one-half percent (1 1/2%)." 32
In the computation of the percentage requirements in the alternative conditions under
the law, the amounts of the VAT collection, National Deficit, 33 and GDP 34 as well as
the interrelationship among them can easily be derived by the finance secretary from
the proper government bodies charged with their determination. The law is complete and
standards have been fixed. 35 Only the fact-finding mathematical computation for its
implementation on January 1, 2006, is necessary. ISCDEA

Once either of the factual and mathematical events provided in the law takes place, the
President has no choice but to implement the increase of the VAT rate to 12 percent. 36
This eventuality has been predetermined by Congress. 37
The taxing power has not been delegated by Congress to either or both the President
and the finance secretary. What was delegated was only the power to ascertain the facts
in order to bring the law into operation. In fact, there was really no "delegation" to speak
of; there was merely a declaration of an administrative, not a legislative, function. 38
I concur with the ponencia in that there was no undue delegation of legislative power in
the increase from 10 percent to 12 percent of the VAT rate. I respectfully disagree,
however, with the statements therein that, first, the secretary of finance is "acting as the
agent of the legislative department" or an "agent of Congress" in determining and
declaring the event upon which its expressed will is to take effect; and, second, that the
secretary's personality "is in reality but a projection of that of Congress."
The secretary of finance is not an alter ego of Congress, but of the President. The
mandate given by RA 9337 to the secretary is not equipollent to an authority to make
laws. In passing this law, Congress did not restrict or curtail the constitutional power of
the President to retain control and supervision over the entire Executive Department.
The law should be construed to be merely asking the President, with a recommendation
from the President's alter ego in finance matters, to determine the factual bases for
making the increase in VAT rate operative. 39 Indeed, as I have mentioned earlier, the
fact-finding condition is a mere administrative, not legislative, function.
The ponencia states that Congress merely delegates the implementation of the law to
the secretary of finance. How then can the latter be its agent? Making a law is different
from implementing it. While the first (the making of laws) may be delegated under
certain conditions and only in specific instances provided under the Constitution, the
second (the implementation of laws) may not be done by Congress. After all, the
legislature does not have the power to implement laws. Therefore, congressional agency
arises only in the first, not in the second. The first is a legislative function; the second, an
executive one.
Petitioners' argument is that because the GDP does not account for the economic effects
of so-called underground businesses, it is an inaccurate indicator of either economic
growth or slowdown in transitional economies. 40 Clearly, this matter is within the
confines of lawmaking. This Court is neither a substitute for the wisdom, or lack of it, in
Congress, 41 nor an arbiter of flaws within the latter's internal rules. 42 Policy matters lie
within the domain of the political branches of government, 43 outside the range of
judicial cognizance. 44 "[T]he right to select the measure and objects of taxation
devolves upon the Congress, and not upon the courts, and such selections are valid
unless constitutional limitations are overstepped." 45 Moreover, each house of Congress
has the power and authority to determine the rules of its proceedings. 46 The contention
that this case is not ripe for determination because there is no violation yet of the
Constitution regarding the exercise of the President's standby authority has no basis. The
question raised is whether the BCC, in passing the law, committed grave abuse of
discretion, not whether the provision in question had been violated. Hence, this case is
not premature and is, in fact, subject to judicial determination. TIcAaH
Amendments on Income Taxes. I respectfully submit that the amendments made by the
BCC (that were culled from the Senate version) regarding income taxes 47 are not legally

germane to the subject matter of the House bills. Revising the income tax rates on
domestic, resident foreign and nonresident foreign corporations; increasing the tax credit
against taxes due from nonresident foreign corporations on intercorporate dividends; and
reducing the allowable deduction for interest expense are legally unrelated and not
germane to the subject matter contained in the House bills; they violate the origination
principle. 48 The reasons are as follows:
One, an income tax is a direct tax imposed on actual or presumed income gross or net
realized by a taxpayer during a given taxable year, 49 while a VAT is an indirect tax
not in the context of who is directly and legally liable for its payment, but in terms of its
nature as "a tax on consumption." 50 The former cannot be passed on to the consumer,
but the latter can. 51 It is too wide a stretch of the imagination to even relate one
concept with the other. In like manner, it is inconceivable how the provisions that
increase corporate income taxes can be considered as mitigating measures for
increasing the VAT and, as I will explain later, for effectively imposing a maximum of 3
percent tax on gross sales or revenues because of the 70 percent cap. Even the
argument that the corporate income tax rates will be reduced to 30 percent does not
hold water. This reduction will take effect only in 2009, not 2006 when the 12 percent
VAT rate will have been implemented.
Two, taxes on intercorporate dividends are final, but the input VAT is generally creditable.
Under a final withholding tax system, the amount of income tax that is withheld by a
withholding agent is constituted as a full and final payment of the income tax due from
the payee on said income. 52 The liability for the tax primarily rests upon the payor as a
withholding agent. 53 Under a creditable withholding tax system, taxes withheld on
certain payments are meant to approximate the tax that is due of the payee on said
payments. 54 The liability for the tax rests upon the payee who is mandated by law to
still file a tax return, report the tax base, and pay the difference between the tax
withheld and the tax due. 55
From this observation alone, it can already be seen that not only are dividends alien to
the tax base upon which the VAT is imposed, but their respective methods of withholding
are totally different. VAT-registered persons may not always be nonresident foreign
corporations that declare and pay dividends, while intercorporate dividends are certainly
not goods or properties for sale, barter, exchange, lease or importation. Certainly, input
VAT credits are different from tax credits on dividends received by nonresident foreign
corporations.
Three, itemized deductions from gross income partake of the nature of a tax exemption.
56 Interest which is among such deductions refers to the amount paid by a debtor
to a creditor for the use or forbearance of money. 57 It is an expense item that is paid or
incurred within a given taxable year on indebtedness in connection with a taxpayer's
trade, business or exercise of profession. 58 In order to reduce revenue losses, Congress
enacted RA 8424 59 which reduces the amount of interest expense deductible by a
taxpayer from gross income, equal to the applicable percentage of interest income
subject to final tax. 60 To assert that reducing the allowable deduction in interest
expense is a matter that is legally related to the proposed VAT amendments is too farfetched. Interest expenses are not allowed as credits against output VAT. Neither are VATregistered persons always liable for interest.

Having argued on the unconstitutionality (non-germaneness) of the BCC insertions on

income taxes, let me now proceed to the other provisions that were attacked by
petitioners.

No Pass-on Provisions. I agree with the ponencia that the BCC did not exceed its
authority when it deleted the no pass-on provisions found in the congressional bills. Its
authority to make amendments not only implies the power to make insertions, but also
deletions, in order to resolve conflicting provisions.
The no pass-on provision in House Bill (HB) No. 3705 referred to the petroleum products
subject to excise tax (and the raw materials used in the manufacture of such products),
the sellers of petroleum products, and the generation companies. 61 The analogous
provision in Senate Bill (SB) No. 1950 dealt with electricity, businesses other than
generation companies, and services of franchise grantees of electric utilities. 62 In
contrast, there was a marked absence of the no pass-on provision in HB 3555. Faced with
such variances, the BCC had the option of retaining or modifying the no pass-on
provisions and determining their extent, or of deleting them altogether. In opting for
deletion to resolve the variances, it was merely acting within its discretion. No grave
abuse may be imputed to the BCC.
The 70 Percent Cap on Input Tax and the 5 Percent Final Withholding VAT. Deciding on the
70 percent cap and the 5 percent final withholding VAT in the consolidated bill is also
within the power of the BCC. While HB 3555 included limits of 5 percent and 11 percent
on input tax, 63 SB 1950 proposed an even spread over 60 months. 64 The decision to
put a cap and fix its rate, so as to harmonize or to find a compromise in settling the
apparent differences in these versions, 65 was within the sound discretion of the BCC.
In like manner, HB 3555 contained provisions on the withholding of creditable VAT at the
rates of 5 percent, 8 percent, 10.5 percent, and 12 percent. 66 HB 3705 had no such
equivalent amendment, and SB 1950 pegged the rates at only 5 percent and 10 percent.
67 I believe that the decision to impose a final (not creditable) VAT and to fix the rates at
5 percent and 10 percent, so as to harmonize the apparent differences in all three
versions, was also within the sound discretion of the BCC. DEICaA
Indeed, the tax credit method under our VAT system is not only practical, but also
principally used in almost all taxing jurisdictions. This does not mean, however, that in
the eyes of Congress through the BCC, our country can neither deviate from this method
nor modify its application to suit our fiscal requirements. The VAT is usually collected
through the tax credit method (and in the past, even through the cost deduction method
or a mixture of these two methods), 68 but there is no hard and fast rule that 100
percent of the input taxes will always be allowed as a tax credit.
In fact, it was Maurice Laur, a French engineer, 69 who invented the VAT. In 1954, he
had the idea of imposing an indirect tax on consumption, called taxe sur la valeur
ajoute, 70 which was quickly adopted by the Direction Gnrale des Impost, the new
French tax authority of which he became joint director. Consequently, taxpayers at all
levels in the production process, rather than retailers or tax authorities, were forced to
administer and account for the tax themselves. 71

Since the unutilized input VAT can be carried over to

undue deprivation of property. Alternatively, it can be
there is no law prohibiting that. Merely speculative
contention that the law is arbitrary and oppressive.
necessarily burdensome, compulsory, and involuntary.

succeeding quarters, there is no

passed on to the consumers; 72
and unproven, therefore, is the
73 Laws that impose taxes are

The deferred input tax account which accumulates the unutilized input VAT remains
an asset in the accounting records of a business. It is not at all confiscated by the
government. By deleting Section 112(B) of the Tax Code, 74 Congress no longer made
available tax credit certificates for such asset account until retirement from or cessation
of business, or changes in or cessation of VAT-registered status. 75 This is a matter of
policy, not legality. The Court cannot step beyond the confines of its constitutional
power, if there is absolutely no clear showing of grave abuse of discretion in the
enactment of the law.
That the unutilized input VAT would be rendered useless is merely speculative. 76
Although it is recorded as a deferred asset in the books of a company, it remains to be a
mere privilege. It may be written off or expensed outright; it may also be denied as a tax
credit.
There is no vested right in a deferred input tax account; it is a mere statutory privilege.
77 The State may modify or withdraw such privilege, which is merely an asset granted
by operation of law. 78 Moreover, there is no vested right in generally accepted
accounting principles. 79 These refer to accounting concepts, measurement techniques,
and standards of presentation in a company's financial statements, and are not rooted in
laws of nature, as are the laws of physical science, for these are merely developed and
continually modified by local and international regulatory accounting bodies. 80 To state
otherwise and recognize such asset account as a vested right is to limit the taxing power
of the State. Unlimited, plenary, comprehensive and supreme, this power cannot be
unduly restricted by mere creations of the State.
That the unutilized input VAT would also have an unequal effect on businesses some
with low, others with high, input-output ratio is not a legal ground for invalidating the
law. Profit margins are a variable of sound business judgment, not of legal doctrine. The
law applies equally to all businesses; it is up to each of them to determine the best
formula for selling their goods or services in the face of stiffer competition. There is,
thus, no violation of the equal protection clause. If the implementation of the 70 percent
cap would cause an ad infinitum deferment of input taxes or an unequal effect upon
different types of businesses with varying profit margins and capital requirements, then
the remedy would be an amendment of the law not an unwarranted and outright
declaration of unconstitutionality.
The matter of business establishments shouldering 30 percent of output tax and
remitting the amount, as computed, to the government is in effect imposing a tax that is
equivalent to a maximum of 3 percent of gross sales or revenues. 81 This imposition is
arguably another tax on gross not net income and thus a deviation from the
concept of VAT as a tax on consumption; it also assumes that sales or revenues are on
cash basis or, if on credit, given credit terms shorter than a quarter of a year. However,
such additional imposition and assumption are also arguably within the power of
Congress to make. The State may in fact choose to impose an additional 3 percent tax on
gross income, in lieu of the 70 percent cap, and thus subject the income of businesses to

two types of taxes one on gross, the other on net. These impositions may constitute
double taxation, 82 which is not constitutionally proscribed. 83
Besides, prior to the amendments introduced by the BCC, already extant in the Tax Code
was a 3 percent percentage tax on the gross quarterly sales or receipts of persons who
were not VAT-registered, and whose sales or receipts were exempt from VAT. 84 This is
another type of tax imposed by the Tax Code,in addition to the tax on their respective
incomes. No question as to its validity was raised before; none is being brought now.
More important, there is a presumption in favor of constitutionality, 85 "rooted in the
doctrine of separation of powers which enjoins upon the three coordinate departments of
the Government a becoming courtesy for each other's acts." 86
As to the argument that Section 8 of RA 9337 contravenes Section 1 of Article III and
Section 20 of Article II of the 1987 Constitution, I respectfully disagree.
One, petitioners have not been denied due process or, as I have illustrated earlier, equal
protection. In the exercise of its inherent power to tax, the State validly interferes with
the right to property of persons, natural or artificial. Those similarly situated are affected
in the same way and treated alike, "both as to privileges conferred and liabilities
enforced." 87
RA 9337 was enacted precisely to achieve the objective of raising revenues to defray the
necessary expenses of government. 88 The means that this law employs are reasonably
related to the accomplishment of such objective, and not unduly oppressive. The
reduction of tax credits is a question of economic policy, not of legal perlustration. Its
determination is vested in Congress, not in this Court. Since the purpose of the law is to
raise revenues, it cannot be denied that the means employed is reasonably related to
the achievement of that purpose. Moreover, the proper congressional procedure for its
enactment was followed; 89 neither public notice nor public hearings were denied.
HIACEa
Two, private enterprises are not discouraged. Tax burdens are never delightful, but with
the imposition of the 70 percent cap, there will be an assurance of a steady cash flow to
the government, which can be translated to the production of improved goods, rendition
of better services, and construction of better facilities for the people, including all private
enterprises. Perhaps, Congress deems it best to make our economy depend more on
businesses that are easier to monitor, so there will be a more efficient collection of taxes.
Whatever is expected of the outcome of the law, or its wisdom, should be the sole
responsibility of the representatives chosen by the electorate.
The profit margin rates of various industries generally do not change. However, the profit
margin figures do, because these are obviously monetary variables that affect business,
along with the level of competition, the quality of goods and services offered, and the
cost of their production. And there will inevitably be a conscious desire on the part of
those who engage in business and those who consume their output to adapt or adjust
accordingly to any congressional modification of the VAT system.

In addition, it is contended that the VAT should be proportional in nature. I submit that
this proportionality pertains to the rate imposable, not the credit allowable. Private

enterprises are subjected to a proportional VAT rate, but VAT credits need not be. The
VAT is, after all, a human concept that is neither immutable nor invariable. In fact, it has
changed after it was adopted as a system of indirect taxation by other countries. Again
unlike the laws of physical science, the VAT system can always be modified to suit
modern fiscal demands. The State, through the Legislative Department, may even
choose to do away with it and revert to our previous system of turnover taxes, sales
taxes and compensating taxes, in which credits may be disallowed altogether.
Not expensed, but amortized over its useful life, is capital equipment, which is purchased
or treated as capital leases by private enterprises. Aimed at achieving the twin
objectives of profitability and solvency, such purchase or lease is a matter of prudence in
business decision-making.
Hence, business judgments, sales volume, and their effect on competition are for
businesses to determine and for Congress to regulate not for this Court to interfere
with, absent a clear showing that constitutional provisions have been violated. Tax
collection and administrative feasibility are for the executive branch to focus on, again
not for this Court to dwell upon.
The Transcript of the Oral Arguments on July 14, 2005 clearly point out in a long line of
relevant questioning that, absent a violation of constitutional provisions, the Court
cannot interfere with the 70 percent cap, the 5 percent final withholding tax, and the 60month amortization, there being other extra-judicial remedies available to petitioners,
thus:
"Atty. Baniqued:
But if your profit margin is low as i[n] the case of the petroleum dealers, . . . then we
would have a serious problem, Your Honor.
"Justice Panganiban:
Isn't the solution to increase the price then?
"Atty. Baniqued:
If you increase the price which you can very well do, Your Honor, then that [will] be
deflationary and it [will] have a cascading effect on all other basic commodities[,
especially] because what is involved here is petroleum, Your Honor.
"Justice Panganiban:
That may be true[,] but it's not unconstitutional?
"Atty. Baniqued:
That may be true, Your Honor, but the very limitation of the [seventy percent] input
[VAT], when applied to the case of the petroleum dealers[,] is oppressive[.] [I]t's unjust
and it's unreasonable, Your Honor.
"Justice Panganiban:

But it can be passed as a part of sales, sales costs rather.

"Atty. Baniqued:
But the petroleum dealers here themselves . . . interrupted
"Justice Panganiban:
In your [b]alance [s]heet, it could be reflected as Cost of Sales and therefore the price
will go up?
"Atty. Baniqued:
Even if it were to be reflected as part of the Cost of Sales, Your Honor, the [input VAT]
that you cannot claim, the benefit to you is only to the extent of the corporate tax rate
which is 32 now 35 [percent].
"Justice Panganiban:
Yes.
"Atty. Baniqued:
It's not 100 [percent] credi[ta]bility[,] unlike if it were applied against your [output VAT],
you get to claim 100 [percent] of it, Your Honor. DTAHSI
"Justice Panganiban:
That might be true, but we are talking about whether that particular provision would be
unconstitutional. You say it's oppressive, but you have a remedy, you just pass it on to
the customer. I am not sayin[g] it's good[.] [N]either am I saying it's wise[.] [A]ll I'm
talking about is, whether it's constitutional or not.
"Atty. Baniqued:
Yes, in fact we acknowledge, Your Honor, that that is a remedy available to the petroleum
dealers, but considering the impact of that limitation[,] and were just talking of the 70
[percent cap] on [input VAT] in the level of the petroleum dealers. Were not even talking
yet of the limitation on the [input VAT] available to the manufacturers, so, what if they
pass that on as well?
"Justice Panganiban:
Yes.
"Atty. Baniqued:
Then, it would complicate . . . interrupted
"Justice Panganiban:

What I am saying is, there is a remedy, which is business in character. The mere fact that
the government is imposing that [seventy percent] cap does not make the law
unconstitutional, isn't it?
"Atty. Baniqued:
It does, Your Honor, if it can be shown. And as we have shown, it is oppressive and
unreasonable, it is excessive, Your Honor . . . interrupted
"Justice Panganiban:
If you have no way of recouping it. If you have no way of recouping that amount, then it
will be oppressive, but you have a business way of recouping it[.] I am saying that, not
advising that it's good. All I am saying is, is it constitutional or not[?] We're not here to
determine the wisdom of the law, that's up for Congress. As pointed out earlier, if the law
is not wise, the law makers will be changed by the people[.] [T]hat is their solution t[o]
the lack of wisdom of a law. If the law is unconstitutional[,] then the Supreme Court will
declare it unconstitutional and void it, but[,] in this case[,] there seems to be a business
remedy in the same manner that Congress may just impose that tax straight without
saying it's [VAT]. If Congress will just say all petroleum will pay 3 [percent] of their Gross
Sales, but you don't bear that, you pass that on, isn't it?
"Atty. Baniqued:
We acknowledge your concern, Your Honor, but we should not forget that when the
petroleum dealers pass these financial burden or this tax differential to the consumers,
they themselves are consumers in their own right. As a matter of fact, they filed this
case both as petroleum dealer[s] and as taxpayers. If they pass if on, they themselves
would ultimately bear the burden[, especially] in increase[d] cost of electricity, land
transport, food, everything, Your Honor.
"Justice Panganiban:
Yes, but the issue here in this Court, is whether that act of Congress is unconstitutional.
"Atty. Baniqued:
Yes, we believe it is unconstitutional, Your Honor.
"Justice Panganiban:
You have a right to complain that it is oppressive, it is excessive, it burdens the people
too much, but is it unconstitutional?
"Atty. Baniqued:
Besides, passing it on, Your Honor, may not be as simple as it may seem. As a matter of
fact, at the strike of midnight on June 30, when petroleum prices were being changed
upward, the [s]ecretary of [the] Department of Energy was going around[.] [H]e was
seen on TV going around just to check that prices don't go up. And as a matter of fact, he

had pronouncements that, the increase in petroleum price should only be limited to the
effect of 10 [percent] E-VAT.
"Justice Panganiban:
It's becaus[e] the implementing rules were not clear and were not extensive enough to
cover how much really should be the increase for various oil products, refined oil
products. It's up for the dealers to guess, and the dealers were guessing to their
advantage by saying plus 10 [percent] anyway, right?
"Atty. Baniqued:
In fact, the petroleum dealers, Your Honors, are not only faced with constitutional issues
before this Court. They are also faced with a possibility of the Department of Energy not
allowing them to pass it on[,] because this would be an unreasonable price increase. And
so, they are being hit from both sides . . . interrupted
"Justice Panganiban:
That's why I say, that there is need to refine the implementing rules so that everyone will
know, the customers will know how much to pay for gasoline, not only gasoline, gasoline,
and so on, diesel and all kinds of products, so there'll be no confusion and there'll be no
undue taking advantage. There will be a smooth implementation[,] if the law were to be
upheld by the Court. In your case, as I said, it may be unwise to pass that on to the
customers, but definitely, the dealers will not bear that [] to suffer the loss that you
mentioned in your consolidated balance sheets. Certainly, the dealers will not bear that
[cost], isn't it? EDSAac
"Atty. Baniqued:
It will be a very hard decision to make, Your Honor.
"Justice Panganiban:
Why, you will not pass it on?
"Atty. Baniqued:
I cannot speak for the dealers. . . . interrupted.
"Justice Panganiban:
As a consumer, I will thank you if you don't pass it on[;] but you or your clients as
businessm[e]n, I know, will pass it on.
"Atty. Baniqued:
As I have said, Your Honor, there are many constraints on their ability to do that[,] and
that is why the first step that we are seeking is to seek redress from this Honorable
Court[,] because we feel that the imposition is excessive and oppressive. . . . interrupted

"Justice Panganiban:
You can find redress here, only if you can show that the law is unconstitutional.
"Atty. Baniqued:
We realized that, Your Honor.
"Justice Panganiban:
Alright. Let's talk about the 5 [percent] [d]epreciation rate, but that applies only to the
capital equipment worth over a million?
"Atty. Baniqued:
Yes, Your Honor.
"Justice Panganiban:
And that doesn't apply at all times, isn't it?
"Atty. Baniqued:
Well. . . .
"Justice Panganiban:
That doesn't at all times?
"Atty. Baniqued:
For capital goods costing less than 1 million, Your Honor, then. . . .
"Justice Panganiban:
That will not apply?
"Atty. Baniqued:
That will not apply, but you will have the 70 [percent] cap on input [VAT], Your Honor.
"Justice Panganiban:
Yes, but we talked already about the 70 [percent].
"Atty. Baniqued:
Yes, Your Honor.
"Justice Panganiban:

When you made your presentation on the balance sheet, it is as if every capital
expenditure you made is subject to the 5 [percent,] rather the [five year] depreciation
schedule[.] [T]hat's not so. So, the presentation you made is a little inaccurate and
misleading.
"Atty. Baniqued:
At the start of our presentation, Your Honor[,] we stated clearly that this applies only to
capital goods costing more than one [million].
"Justice Panganiban:
Yes, but you combined it later on with the 70 [percent] cap to show that the dealers are
so disadvantaged. But you didn't tell us that that will apply only when capital equipment
or goods is one million or more. And in your case, what kind of capital goods will be
worth one million or more in your existing gas stations?

"Atty. Baniqued:
Well, you would have petroleum dealers, Your Honor, who would have[,] aside from sale
of petroleum[,] they would have their service centers[,] like[. . .] to service cars and they
would have those equipments, they are, Your Honor.
"Justice Panganiban:
But that's a different profit center, that's not from the sale of. . . .
"Atty. Baniqued:
No, they would form part of their [VATable] sale, Your Honor.
Justice Panganiban:
It's a different profit center[;] it's not in the sale of petroleum products. In fact the mode
now is to put up super stores in huge gas stations. I do not begrudge the gas station[.]
[A]ll I am saying is it should be presented to us in perspective. Neither am I siding with
the government. All I am saying is, when I saw your complicated balance sheet and
mathematics, I saw that you were to put in all the time the depreciation that should be
spread over [five] years. But we have agreed that that applies only to capital equipment
[]not to any kind of goods [] but to capital equipment costing over 1 million pesos.
EcHTCD
"Atty. Baniqued:
Yes, Your Honor, we apologize if it has caused a little confusion. . . .
"Justice Panganiban:
Again the solution could b[e] to pass that on, because that's an added cost, isn't it?

"Atty. Baniqued:
Well, yes, you can pass it on. . . .
"Justice Panganiban:
I am not teaching you, I am just saying that you have a remedy . . . I am not saying
either that the remedy is wise or should be done, because[,] as a consumer[,] I wouldn't
want that to be done to me.
"Atty. Baniqued:
We realiz[e] that, Your Honor, but the fact remain[s] that whether it is in the hands of the
petroleum dealers or in the hands of the consumers[,] if this imposition is unreasonable
and oppressive, it will remain so, even after it is passed on, Your Honor.
"Justice Panganiban:
Alright. Let's go to the third. The 5 [percent] withholding tax, [f]inal [w]ithholding [t]ax,
but this applies to sales to government?
"Atty. Baniqued:
Yes, Your Honor.
"Justice Panganiban:
So, you can pass on this 5 [percent] to the [g]overnment. After all, that 5 [percent] will
still go back to the government.
"Atty. Baniqued:
Then it will come back to haunt us, Your Honor. . . .
"Justice Panganiban:
Why?
"Atty. Baniqued:
By way of, for example sales to NAPOCOR or NTC . . . interrupted
"Justice Panganiban:
Sales of petroleum products. . . .
"Atty. Baniqued:
. . . in the case of NTC, Your Honor, it would come back to us by way of increase[d] cost,
Your Honor.

"Justice Panganiban:
Okay, let's see. You sell, let's say[,] your petroleum products to the Supreme Court, as a
gas station that sells gasoline to us here. Under this law, the 5 [percent] withholding tax
will have to be charged, right?
"Atty. Baniqued:
Yes, Your Honor.
"Justice Panganiban:
You will charge that[.] [T]herefore[,] the sales to the Supreme Court by that gas station
will effectively be higher?
"Atty. Baniqued:
Yes, Your Honor.
"Justice Panganiban:
So, the Supreme Court will pay more, you will not [be] going to [absorb] that 5 [percent],
will you?
"Atty. Baniqued:
If it is passed on, Your Honor, that's of course we agree. . . Interrupted.
"Justice Panganiban:
Not if, you can pass it on. . . .
"Atty. Baniqued:
Yes, we can . . . . interrupted
"Justice Panganiban:
There is no prohibition to passing it on[.] [P]robably the gas station will simply pass it on
to the Supreme Court and say[,] well[,] there is this 5 [percent] final VAT on you so[,]
therefore, for every tank full you buy[,] we'll just have to [charge] you 5 [percent] more.
Well, the Supreme Court will probably say, well, anyway, that 5 [percent] that we will pay
the gas dealer, will be paid back to the government, isn't it[?] So, how [will] you be
affected?
"Atty. Baniqued:
I hope the passing on of the burden, Your Honor, doesn't come back to party litigants by
way of increase in docket fees, Your Honor.

"Justice Panganiban:
But that's quite another m[a]tter, though . . . (laughs) [W]hat I am saying, Mr. [C]ounsel
is, you still have to show to us that your remedy is to declare the law unconstitutional[,]
and it's not business in character. aDICET
"Atty. Baniqued:
Yes, Your Honor, it is our submission that this limitation in the input [VAT] credit as well as
the amortization. . . .
"Justice Panganiban:
All you talk about is equal protection clause, about due process, depreciation of property
without observance of due process[,] could really be a remedy than a business way.
"Atty. Baniqued:
Business in the level of the petroleum dealers, Your Honor, or in the level of Congress,
Your Honor.
"Justice Panganiban:
Yes, you can pass them on to customers[,] in other words. It's the customers who should
[complain].
"Atty. Baniqued:
Yes, Your Honor . . . interrupted
"Justice Panganiban:
And perhaps will not elect their representatives anymore[.]
"Atty. Baniqued:
Yes, Your Honor. . . .
"Justice Panganiban:
For agreeing to it, because the wisdom of a law is not for the Supreme Court to pass
upon.
"Atty. Baniqued:
It just so happens, Your Honor, that what is [involved] here is a commodity that when it
goes up, it affects everybody. . . .
"Justice Panganiban:
Yes, inflationary and inflammatory. . . .

"Atty. Baniqued:
. . . just like what Justice Puno says it shakes the entire economic foundation, Your Honor.
"Justice Panganiban:
Yes, it's inflationary[,] brings up the prices of everything . . .
"Atty. Baniqued:
And it is our submission that[,] if the petroleum dealers cannot absorb it and they pass it
on to the customers, a lot of consumers would neither be in a position to absorb it too
and that['s] why we patronize, Your Honor.
"Justice Panganiban:
There might be wisdom in what you're saying, but is that unconstitutional?
"Atty. Baniqued:
Yes, because as I said, Your Honor, there are even constraints in the petroleum dealers to
pass it on, and we[']re not even sure whether . . . . interrupted
"Justice Panganiban:
Are these constraints [] legal constraints?
"Atty. Baniqued:
Well, it would be a different story, Your Honor[.] [T]hat's something we probably have to
take up with the Department of Energy, lest [we may] be accused of . . . .
"Justice Panganiban:
In other words, that's your remedy [] to take it up with the Department of Energy
"Atty. Baniqued:
. . . unreasonable price increases, Your Honor.
"Justice Panganiban:
Not for us to declare those provisions unconstitutional.
"Atty. Baniqued:
We, again, wish to stress that the petroleum dealers went to this Court[,] both as
businessmen and as consumers. And as consumers, [we're] also going to bear the
burden of whatever they themselves pass on.

"Justice Panganiban:
You know[,] as a consumer, I wish you can really show that the laws are unconstitutional,
so I don't have to pay it. But as a magistrate of this Court, I will have to pass upon
judgment on the basis of [] whether the law is unconstitutional or not. And I hope you
can in your memorandum show that.
"Atty. Baniqued:
We recognized that, Your Honor." (boldface supplied, pp. 386-410).
Amendments on Other Taxes and Administrative Matters. Finally, the BCC's amendments
regarding other taxes 90 are both germane in a legal sense and reasonably necessary in
an economic sense. This fact is evident, considering that the proposed changes in the
VAT law will have inevitable implications and repercussions on such taxes, as well as on
the procedural requirements and the disposition of incremental revenues, in the Tax
Code.Either mitigating measures 91 have to be put in place or increased rates imposed,
in order to achieve the purpose of the law, cushion the impact of increased taxation, and
still maintain the equitability desired of any other revenue law. 92 Directly related to the
proposed VAT changes, these amendments are expected also to have a salutary effect
on the national economy. HCDaAS
The no-amendment rule 93 in the Constitution was not violated by the BCC, because no
completely new provision was inserted in the approved bill. The amendments may be
unpopular or even work hardship upon everyone (this writer included). If so, the remedy
cannot be prescribed by this Court, but by Congress.
Rejecting Non-Conflicting
Provisions
Fourth, the BCC may choose neither to adopt nor to consolidate the versions presented
to it by both houses of Congress, but instead to reject non-conflicting provisions in those
versions. In other words, despite the lack of conflict in them, such provisions are still
eliminated entirely from the consolidated bill. There may be a constitutional problem
here.
The no pass-on provisions in the congressional bills are the only item raised by
petitioners concerning deletion. 94 As I have already mentioned earlier, these provisions
were in conflict. Thus, the BCC exercised its prerogative to remove them. In fact,
congressional rules give the BCC the power to reconcile disagreeing provisions, and in
the process of reconciliation, to delete them. No other non-conflicting provision was
deleted.
At this point, and after the extensive discussion above, it can readily be seen no nonconflicting provisions of the E-VAT bills were rejected indiscriminately by the BCC.
Approving and Inserting
Completely New Provisions
Fifth, the BCC had the option of inserting completely new provisions not found in any of
the provisions of the bills of either house of Congress, or make and endorse an entirely
new bill as a substitute. Taking this option may be a blatant violation of the Constitution,
for not only will the surreptitious insertion or unwarranted creation contravene the

"origination" principle; it may likewise desecrate the three-reading requirement and the
no-amendment rule. 95
Fortunately, however, the BCC did not approve or insert completely new provisions.
Thus, no violation of the Constitution was committed in this regard.
Summary
The enrolled bill doctrine is said to be conclusive not only as to the provisions of a law,
but also to its due enactment. It is not absolute, however, and must yield to mandatory
provisions of the 1987 Constitution. Specifically, this Court has the duty of striking down
provisions of a law that in their enactment violate conditions, restrictions or limitations
imposed by the Constitution. 96 The Bicameral Conference Committee (BCC) is a mere
creation of Congress. Hence, the BCC may resolve differences only in conflicting
provisions of congressional bills that are referred to it; and it may do so only on the
condition that such resolution does not violate the origination, the three-reading, and the
no-amendment rules of the Constitution. aASDTE

In crafting RA 9337, the BCC opted to reconcile the conflicting provisions of the Senate
and House bills, particularly those on the 70 percent cap on input tax; the 5 percent final
withholding tax; percentage taxes on domestic carriers, keepers of garages and
international carriers; franchise taxes; amusement taxes; excise taxes on manufactured
oils and other fuels; registration requirements; issuance of receipts or sales or
commercial invoices; and disposition of incremental revenues. To my mind, these
changes do not violate the origination or the germaneness principles.
Neither is there undue delegation of legislative power in the standby authority given by
Congress to the President. The law is complete, and the standards are fixed. While I
concur with the ponencia's view that the President was given merely the power to
ascertain the facts to bring the law into operation clearly an administrative, not a
legislative, function I stress that the finance secretary remains the Chief Executive's
alter ego, not an agent of Congress.
The BCC exercised its prerogative to delete the no pass-on provisions, because these
were in conflict. I believe, however, that it blatantly violated the origination and the
germaneness principles when it inserted provisions not found in the House versions of
the E-VAT Law: (1) increasing the tax rates on domestic, resident foreign and nonresident
foreign corporations; (2) increasing the tax credit against taxes due from nonresident
foreign corporations on intercorporate dividends; and (3) reducing the allowable
deduction for interest expense. Hence, I find these insertions unconstitutional.
Some have criticized the E-VAT Law as oppressive to our already suffering people. On the
other hand, respondents have justified it by comparing it to bitter medicine that patients
must endure to be healed eventually of their maladies. The advantages and
disadvantages of the E-VAT Law, as well as its long-term effects on the economy, are
beyond the reach of judicial review. The economic repercussions of the statute are policy
in nature and are beyond the power of the courts to pass upon.
I have combed through the specific points raised in the Petitions. Other than the three
items on income taxes that I respectfully submit are unconstitutional, I cannot otherwise

attribute grave abuse of discretion to the BCC, or Congress for that matter, for passing
the law.
"[T]he Court as a rule is deferential to the actions taken by the other branches of
government that have primary responsibility for the economic development of our
country." 97 Thus, in upholding the Philippine ratification of the treaty establishing the
World Trade Organization (WTO), Taada v. Angara held that "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 presumption, this Court will resolve every doubt in its favor." 98 As pointed our in
Cawaling Jr. v. Comelec, the grounds for nullity of the law "must be beyond reasonable
doubt, for to doubt is to sustain." 99 Indeed, "there must be clear and unequivocal
showing that what the Constitutions prohibits, the statute permits." 100
WHEREFORE, I vote to GRANT the Petitions in part and to declare Sections 1, 2, and 3 of
Republic Act No. 9337 unconstitutional, insofar as these sections (a) amend the rates of
income tax on domestic, resident foreign, and nonresident foreign corporations; (b)
amend the tax credit against taxes due from nonresident foreign corporations on
intercorporate dividends; and (c) reduce the allowable deduction for interest expense.
The other provisions are constitutional, and as to these I vote to DISMISS the Petitions.
YNARES-SANTIAGO, J., concurring and dissenting opinion:
The ponencia states that under the provisions of the Rules of the House of
Representatives and the Senate Rules, the Bicameral Conference Committee is
mandated to settle differences between the disagreeing provisions in the House bill and
Senate bill. However, the ponencia construed the term "settle" as synonymous to
"reconcile" and "harmonize," and as such, the Bicameral Conference Committee may
either (a) adopt the specific provisions of either the House bill or Senate bill, (b) decide
that neither provisions in the House bill or the provisions in the Senate bill would be
carried into the final form of the bill, and/or (c) try to arrive at a compromise between the
disagreeing provisions.
I beg to differ on the third proposition.
Indeed, Section 16(3), Article VI of the 1987 Constitution explicitly allows each House to
determine the rules of its proceedings. However, the rules must not contravene
constitutional provisions. The rule-making power of Congress should take its bearings
from the Constitution. If in the exercise of this rule-making power, Congress failed to set
parameters in the functions of the committee and allowed the latter unbridled authority
to perform acts which Congress itself is prohibited, like the passage of a law without
undergoing the requisite three-reading and the so-called no-amendment rule, then the
same amount to grave abuse of discretion which this Court is empowered to correct
under its expanded certiorari jurisdiction. Notwithstanding the doctrine of separation of
powers, therefore, it is the duty of the Court to declare as void a legislative enactment,
either from want of constitutional power to enact or because the constitutional forms or
conditions have not been observed. 1 When the Court declares as unconstitutional a law
or a specific provision thereof because procedural requirements for its passage were not
complied, the Court is by no means asserting its ascendancy over the Legislature, but

simply affirming the supremacy of the Constitution as repository of the sovereign will. 2
The judicial branch must ensure that constitutional norms for the exercise of powers
vested upon the two other branches are properly observed. This is the very essence of
judicial authority conferred upon the Court under Section 1, Article VII of the 1987
Constitution.
The Rules of the House of Representatives and the Rules of the Senate provide that in
the event there is disagreement between the provisions of the House and Senate bills,
the differences shall be settled by a bicameral conference committee.
By this, I fully subscribe to the theory advanced in the Dissenting Opinion of Chief Justice
Hilario G. Davide, Jr. in Tolentino v. Secretary of Finance 3 that the authority of the
bicameral conference committee was limited to the reconciliation of disagreeing
provisions or the resolution of differences or inconsistencies. Thus, it could only either (a)
restore, wholly or partly, the specific provisions of the House bill amended by the Senate
bill, (b) sustain, wholly or partly, the Senate's amendments, or (c) by way of a
compromise, to agree that neither provisions in the House bill amended by the Senate
nor the latter's amendments thereto be carried into the final form of the former.
Otherwise stated, the Bicameral Conference Committee is authorized only to adopt
either the version of the House bill or the Senate bill, or adopt neither. It cannot, as the
ponencia proposed, "try to arrive at a compromise", such as introducing provisions not
included in either the House or Senate bill, as it would allow a mere ad hoc committee to
substitute the will of the entire Congress and without undergoing the requisite threereading, which are both constitutionally proscribed. To allow the committee unbridled
discretion to overturn the collective will of the whole Congress defies logic considering
that the bills are passed presumably after study, deliberation and debate in both houses.
A lesser body like the Bicameral Conference Committee should not be allowed to
substitute its judgment for that of the entire Congress, whose will is expressed
collectively through the passed bills.
When the Bicameral Conference Committee goes beyond its limited function by
substituting its own judgment for that of either of the two houses, it violates the internal
rules of Congress and contravenes material restrictions imposed by the Constitution,
particularly on the passage of law. While concededly, the internal rules of both Houses do
not explicitly limit the Bicameral Conference Committee to a consideration only of
conflicting provisions, it is understood that the provisions of the Constitution should be
read into these rules as imposing limits on what the committee can or cannot do. As
such, it cannot perform its delegated function in violation of the three-reading
requirement and the no-amendment rule. DaIAcC
Section 26(2) of Article VI of the 1987 Constitution provides that:
(2)No bill shall be passed by either House shall become a law unless it has passed three
readings on separate days, and printed copies thereof in its final form have been
distributed to its Members three days before its passage, except when the President
certifies to the necessity of its immediate enactment to meet a public calamity or
emergency. Upon the last reading of a bill, no amendment hereto shall be allowed, and
the vote thereon shall be taken immediately thereafter, and the yeas and nays entered
in the Journal.

Thus, before a bill becomes a law, it must pass three readings. Hence, the ponencia's
submission that despite its limited authority, the Bicameral Conference Committee could
"compromise the disagreeing provisions" by substituting it with its own version clearly
violate the three-reading requirement, as the committee's version would no longer
undergo the same since it would be immediately put into vote by the respective houses.
In effect, it is not a bill that was passed by the entire Congress but by the members of
the ad hoc committee only, which of course is constitutionally infirm.

I disagree that the no-amendment rule referred only to "the procedure to be followed by
each house of Congress with regard to bills initiated in each of said respective houses"
because it would relegate the no-amendment rule to a mere rule of procedure. To my
mind, the no-amendment rule should be construed as prohibiting the Bicameral
Conference Committee from introducing amendments and modifications to nondisagreeing provisions of the House and Senate bills. In sum, the committee could only
either adopt the version of the House bill or the Senate bill, or adopt neither. As Justice
Reynato S. Puno said in his Dissenting Opinion in Tolentino v. Secretary of Finance, 4
there is absolutely no legal warrant for the bold submission that a Bicameral Conference
Committee possesses the power to add/delete provisions in bills already approved on
third reading by both Houses or an ex post veto power.
In view thereof, it is my submission that the amendments introduced by the Bicameral
Conference Committee which are not found either in the House or Senate versions of the
VAT reform bills, but are inserted merely by the Bicameral Conference Committee and
thereafter included in Republic Act No. 9337, should be declared unconstitutional. The
insertions and deletions made do not merely settle conflicting provisions but materially
altered the bill, thus giving rise to the instant petitions. DcTAIH
I, therefore, join the concurring and dissenting opinion of Mr. Justice Reynato S. Puno.
SANDOVAL-GUTIERREZ, J., concurring and dissenting opinion:
Adam Smith, the great 18th century political economist, enunciated the dictum that
"the subjects of every state ought to contribute to the support of government, as nearly
as possible, in proportion to their respective abilities; that is, in proportion to the revenue
which they respectively enjoy under the protection of the state." 1 At no other time this
dictum becomes more urgent and obligatory as in the present time, when the Philippines
is in its most precarious fiscal position.
At this juncture, may I state that I join Mr. Senior Justice Reynato S. Puno in his Opinion,
specifically on the following points:
1.It is "high time to re-examine the test of germaneness proffered in Tolentino;"
2.The Bicameral Conference Committee "cannot exercise its unbridled discretion," "it
cannot create a new law," and its deletion of the "no pass on provision" common in both
Senate Bill No. 1950 and House Bill No. 3705 is "unconstitutional."
In addition to the above points raised by Mr. Senior Justice Puno, may I expound on the
issues specified hereunder:

There is no reason to rush and stamp the imprimatur of validity to a tax law, R.A. 9337,
that contains patently unconstitutional provisions. I refer to Sections 4 to 6 which violate
the principle of non-delegation of legislative power. These Sections authorize the
President, upon recommendation of the Secretary of Finance, to raise the VAT rate from
10% to 12% effective January 1, 2006, if the conditions specified therein are met, thus:
. . . That the President, upon the recommendation of the Secretary of Finance, shall,
effective January 1, 2006, raise the rate of value-added tax to twelve percent (12%) after
any of the following conditions has been satisfied:
(i)Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the
previous year exceeds two and four-fifth percent (2 4/5%); or
(ii)National government deficit as a percentage of GDP of the previous year exceeds one
and one-half percent (1 1/2%).
This proviso on the authority of the President is uniformly appended to Sections 4, 5 and
6 of R.A. No. 9337, provisions amending Sections 106, 107 and 108 of the
NIRC,respectively. Section 4 imposes a 10% VAT on sales of goods and properties,
Section 5 imposes a 10% VAT on importation of goods, and Section 6 imposes a 10% VAT
on sale of services and use or lease of properties.
Petitioners in G.R. Nos. 168056, 2 168207 3 and 168463 4 assail the constitutionality of
the above provisions on the ground that such stand-by authority granted to the President
constitutes: (1) undue delegation of legislative power; (2) violation of due process; and
(3) violation of the principle of "exclusive origination." They cited as their basis Article VI,
Section 28 (2); Article III, Section 1; and Article VI, Section 24 of the Constitution.
I
Undue Delegation of Legislative Power
Taxation is an inherent attribute of sovereignty. 5 It is a power that is purely legislative
and which the central legislative body cannot delegate either to the executive or judicial
department of government without infringing upon the theory of separation of powers. 6
The rationale of this doctrine may be traced from the democratic principle of "no
taxation without representation." The power of taxation being so pervasive, it is in the
best interest of the people that such power be lodged only in the Legislature. Composed
of the people's representatives, it is "closer to the pulse of the people and . . . are
therefore in a better position to determine both the extent of the legal burden the people
are capable of bearing and the benefits they need." 7 Also, this set-up provides security
against the abuse of power. As Chief Justice Marshall said: "In imposing a tax, the
legislature acts upon its constituents. The power may be abused; but the interest,
wisdom, and justice of the representative body, and its relations with its constituents,
furnish a sufficient security."
Consequently, Section 24, Article VI of our Constitution enshrined the principle of "no
taxation without representation" by providing that "all . . . revenue bills . . . shall
originate exclusively in the House of Representatives, but the Senate may propose or
concur with amendments." This provision generally confines the power of taxation to the
Legislature. aHSAIT

R.A. No. 9337, in granting to the President the stand-by authority to increase the VAT
rate from 10% to 12%, the Legislature abdicated its power by delegating it to the
President. This is constitutionally impermissible. The Legislature may not escape its
duties and responsibilities by delegating its power to any other body or authority. Any
attempt to abdicate the power is unconstitutional and void, on the principle that potestas
delegata non delegare potest. 8 As Judge Cooley enunciated:
"One of the settled maxims in constitutional law is, that the power conferred upon the
legislature to make laws cannot be delegated by that department to any other body or
authority. Where the sovereign power of the state has located the authority, there it
must remain; and by the constitutional agency alone the laws must be made until the
Constitution itself is changed. The power to whose judgment, wisdom, and patriotism this
high prerogative has been entrusted cannot relieve itself of the responsibility by
choosing other agencies upon which the power shall be devolved, nor can it substitute
the judgment, wisdom, and patriotism of any other body for those to which alone the
people have seen fit to confide this sovereign trust." 9
Of course, the rule which forbids the delegation of the power of taxation is not absolute
and inflexible. It admits of exceptions. Retired Justice Jose C. Vitug enumerated such
exceptions, to wit: (1) delegations to local governments (to be exercised by the local
legislative bodies thereof) or political subdivisions; (2) delegations allowed by the
Constitution; and (3) delegations relating merely to administrative implementation that
may call for some degree of discretionary powers under a set of sufficient standards
expressed by law. 10
Patently, the act of the Legislature in delegating its power to tax does not fall under any
of the exceptions.
First, it does not involve a delegation of taxing power to the local government. It is a
delegation to the President.
Second, it is not allowed by the Constitution. Section 28 (2), Article VI of the Constitution
enumerates the charges or duties, the rates of which may be fixed by the President
pursuant to a law passed by Congress, thus:
The Congress may, by law, authorize the President to fix within specified limits, and
subject to such limitations and restrictions as it may impose, tariff rates, import and
export quotas, tonnage and wharfage dues, and other duties or imposts within the
framework of the national development program of the Government.
Noteworthy is the absence of tax rates or VAT rates in the enumeration. If the intention
of the Framers of the Constitution is to permit the delegation of the power to fix tax rates
or VAT rates to the President, such could have been easily achieved by the mere
inclusion of the term "tax rates" or "VAT rates" in the enumeration. It is a dictum in
statutory construction that what is expressed puts an end to what is implied. Expressium
facit cessare tacitum. 11 This is a derivative of the more familiar maxim express mention
is implied exclusion or expressio unius est exclusio alterius. Considering that Section 28
(2), Article VI expressly speaks only of "tariff rates, 12 import 13 and export quotas, 14
tonnage 15 and wharfage dues 16 and other duties and imposts, 17 " by no stretch of
imagination can this enumeration be extended to include the VAT.

And third, it does not relate merely to the administrative implementation of R.A. No.
9337.
In testing whether a statute constitutes an undue delegation of legislative power or not,
it is usual to inquire whether the statute was complete in all its terms and provisions
when it left the hands of the Legislature so that nothing was left to the judgment of any
other appointee or delegate of the legislature. 18
In the present case, the President is the delegate of the Legislature, endowed with the
power to raise the VAT rate from 10% to 12% if any of the following conditions, to
reiterate, has been satisfied: (i) value-added tax collection as a percentage of gross
domestic product (GDP) of the previous year exceeds two and four-fifths percent (2
4/5%) or (ii) National Government deficit as a percentage of GDP of the previous year
exceeds one and one-half percent (1 1/2%).

At first glance, the two conditions may appear to be definite standards sufficient to guide
the President. However, to my mind, they are ineffectual and malleable as they give the
President ample opportunity to exercise her authority in arbitrary and discretionary
fashion.
The two conditions set forth by law would have been sufficient had it not been for the
fact that the President, being at the helm of the entire officialdom, has more than
enough power of control to bring about the existence of such conditions. Obviously, R.A.
No. 9337 allows the President to determine for herself whether the VAT rate shall be
increased or not at all. The fulfillment of the conditions is entirely placed in her hands. If
she wishes to increase the VAT rate, all she has to do is to strictly enforce the VAT
collection so as to exceed the 2 4/5% ceiling. The same holds true with the national
government deficit. She will just limit government expenses so as not to exceed the 1
1/2% ceiling. On the other hand, if she does not wish to increase the VAT rate, she may
discourage the Secretary of Finance from making the recommendation.
That the President's exercise of an authority is practically within her control is
tantamount to giving no conditions at all. I believe this amounts to a virtual surrender of
legislative power to her. It must be stressed that the validity of a law is not tested by
what has been done but by what may be done under its provisions. 19
II
Violation of Due Process
The constitutional safeguard of due process is briefly worded in Section 1, Article III of
the Constitution which states that, "no person shall be deprived of life, liberty or property
without due process of law." 20
Substantive due process requires the intrinsic validity of the law in interfering with the
rights of the person to his property. The inquiry in this regard is not whether or not the
law is being enforced in accordance with the prescribed manner but whether or not, to
begin with, it is a proper exercise of legislative power.
To be so, the law must have a valid governmental objective, i.e., the interest of the public
as distinguished from those of a particular class, requires the intervention of the State.

This objective must be pursued in a lawful manner, or in other words, the means
employed must be reasonably related to the accomplishment of the purpose and not
unduly oppressive.
There is no doubt that R.A. No. 9337 was enacted pursuant to a valid governmental
objective, i.e. to raise revenues for the government. However, with respect to the means
employed to accomplish such objective, I am convinced that R.A. No. 9337, particularly
Sections 4, 5 and 6 thereof, are arbitrary and unduly oppressive.
A reading of the Senate deliberation reveals that the first condition constitutes a reward
to the President for her effective collection of VAT. Thus, the President may increase the
VAT rate from 10% to 12% if her VAT collection during the previous year exceeds 2 4/5%
of the Gross Domestic Product. I quote the deliberation:
Senator Lacson.
Thank you, Mr. President. Now, I will go back to my original question, my first question.
Who are we threatening to punish on the imposed condition No. 1 the public or the
President?
Senator Recto.
That is not a punishment, that is supposed to be a reward system.
Senator Lacson.
Yes, an incentive. So we are offering an incentive to the Chief Executive.
Senator Recto.
That is right.
Senator Lacson.
in order for her to be able to raise the VAT to 12%.
Senator Recto.
That is right. That is the intention, yes.
xxx xxx xxx
Senator Osmena.
All right. Therefore, with the lifting of exemptions it stands to reason that Value-added
tax collections as a percentage of GDP will be much higher than . . . Now, if it is higher
than 2.5%, in other words, because they collected more, we will allow them to even tax
more. Is that the meaning of this particular phrase?
Senator Recto.

Yes, Mr. President, that is why it is as low as 2.8%. It is like if a person has a son and his
son asks him for an allowance, I do not think that he would immediately give his son an
increase in allowance unless he tells his son, You better improve your grades and I will
give you an allowance. That is the analogy of this.
xxx xxx xxx
Senator Osmena.
So the gentleman is telling the President, If you collect more than 138 billion, I will give
you additional powers to tax the people.
Senator Recto.
. . . We are saying, kung mataas and grade mo, dadagdagan ko an allowance mo.
Katulad ng sinabi natin ditto. What we are saying here is you prove to me that you can
collect it, then we will increase your rate, you can raise your rate. It is an incentive. 21
Why authorize the President to increase the VAT rate on the premise alone that she
deserves an "incentive" or "reward"? Indeed, why should she be rewarded for performing
a duty reposed upon her by law?
The rationale stated by Senator Recto is flawed. One of the principles of sound taxation
is fiscal adequacy. The proceeds of tax revenue should coincide with, and approximate
the needs of, government expenditures. Neither an excess nor a deficiency of revenue
vis- -vis the needs of government would be in keeping with the principle. 22
Equating the grant of authority to the President to increase the VAT rate with the grant of
additional allowance to a studious son is highly inappropriate. Our Senators must have
forgotten that for every increase of taxes, the burden always redounds to the people.
Unlike the additional allowance given to a studious son that comes from the pocket of
the granting parent alone, the increase in the VAT rate would be shouldered by the
masses. Indeed, mandating them to pay the increased rate as an award to the President
is arbitrary and unduly oppressive. Taxation is not a power to be exercised at one's whim.
III
Exclusive Origination from the House of Representatives
Section 24, Article VI of the Constitution provides:
SEC. 24.All appropriations, revenue or tariff bills, bills authorizing increase of the public
debt, bills of local application, and private bills shall originate exclusively in the House of
Representatives, but the Senate may propose or concur with amendments.
In Tolentino vs. Secretary of Finance, 23 this Court expounded on the foregoing provision
by holding that:
". . . To begin with, it is not the law but the revenue bill which is required by the
Constitution to 'originate exclusively in the House of Representatives. It is important to
emphasize this, because a bill originating the in the House may undergo such extensive
changes in the Senate that the result may be a rewriting of the whole . . . . At this point,
what is important to note is that, as a result of the Senate action, a distinct bill may be
produced. To insist that a revenue statute and not only the bill which initiated the

legislative process culminating in the enactment of the law must substantially be the
same as the House Bill would be to deny the Senate's power not only to 'concur with
amendments: but also to 'propose amendments.' It would be to violate the co-equality of
the legislative power of the two houses of Congress and in fact, make the House superior
to the Senate."
The case at bar gives us an opportunity to take a second hard look at the efficacy of the
foregoing jurisprudence.
Section 25, Article VI is a verbatim re-enactment of Section 18, Article VI of the 1935
Constitution. The latter provision was modeled from Section 7 (1), Article I of the United
States Constitution,which states:
"All bills for raising revenue shall originate in the House of Representatives, but the
Senate may propose or concur with amendments, as on other bills."
The American people, in entrusting what James Madison termed "the power of the purse"
to their elected representatives, drew inspiration from the British practice and
experience with the House of Commons. As one commentator puts it:
"They knew the inestimable value of the House of Commons, as a component branch of
the British parliament; and they believed that it had at all times furnished the best
security against the oppression of the crown and the aristocracy. While the power of
taxation, of revenue, and of supplies remained in the hands of a popular branch, it was
difficult for usurpation to exist for any length of time without check, and prerogative
must yield of that necessity which controlled at once the sword and the purse."
But while the fundamental principle underlying the vesting of the power to propose
revenue bills solely in the House of Representatives is present in both the Philippines and
US Constitutions, stress must be laid on the differences between the two quoted
provisions. For one, the word "exclusively" appearing in Section 24, Article VI of our
Constitution is nowhere to be found in Section 7 (1), Article I of the US Constitution. For
another, the phrase "as on other bills," present in the same provision of the US
Constitution,is not written in our Constitution.
The adverb "exclusively" means "in an exclusive manner." 24 The term "exclusive" is
defined as "excluding or having power to exclude; limiting to or limited to; single, sole,
undivided, whole." 25 In one case, this Court define the term "exclusive" as "possessed
to the exclusion of others; appertaining to the subject alone, not including, admitting, or
pertaining to another or others." 26
As for the term "originate," its meaning are "to cause the beginning of; to give rise to; to
initiate; to start on a course or journey; to take or have origin; to be deprived; arise;
begin or start." 27
With the foregoing definitions in mind, it can be reasonably concluded that when Section
24, Article VI provides that revenue bills shall originate exclusively from the House of
Representatives, what the Constitution mandates is that any revenue statute must begin
or start solely and only in the House. Not the Senate. Not both Chambers of Congress.
But there is more to it than that. It also means that "an act for taxation must pass the
House first." It is no consequence what amendments the Senate adds. 28

A perusal of the legislative history of R.A. No. 9337 shows that it did not "exclusively
originate" from the House of Representatives.
The House of Representatives approved House Bill Nos. 3555 29 and 3705 30 . These
Bills intended to amend Sections 106, 107, 108, 109, 110, 111 and 114 of the NIRC. For
its part, the Senate approved Senate Bill No. 1950, 31 taking into consideration House
Bill Nos. 3555 and 3705. It intended to amend Sections 27, 28, 34, 106, 108, 109, 110,
112, 113, 114, 116, 117, 119, 121, 125, 148, 151, 236, 237 and 288 of the NIRC.
Thereafter, on April 13, 2005, a Committee Conference was created to thresh out the
disagreeing provisions of the three proposed bills.
In less than a month, the Conference Committee "after having met and discussed in full
free and conference," came up with a report and recommended the approval of the
consolidated version of the bills. The Senate and the House of Representatives approved
it.
On May 23, 2005, the enrolled copy of the consolidated version of the bills was
transmitted to President Arroyo, who signed it into law. Thus, the enactment of R.A. No.
9337, entitled "An Act Amending Sections 27, 28, 34, 106, 107, 108, 109, 110, 111, 112,
113, 114, 116, 117, 119, 121, 148, 151, 236, 237 and 288 of the National Internal
Revenue Code of 1997, As Amended and For Other Purposes."
Clearly, Senate Bill No. 1950 is not based on any bill passed by the House of
Representatives. It has a legislative identity and existence separate and apart from
House Bills No. 3555 and 3705. Instead of concurring or proposing amendments, Senate
Bill No. 1950 merely "takes into consideration" the two House Bills. To take into
consideration means "to take into account." Consideration, in this sense, means
"deliberation, attention, observation or contemplation. 32 Simply put, the Senate in
passing Senate Bill No. 1950, a tax measure, merely took into account House Bills No.
3555 and 3705, but did not concur with or amend either or both bills. As a matter of fact,
it did not even take these two House Bills as a frame of reference.
In Tolentino, the majority subscribed to the view that Senate may amend the House
revenue bill by substitution or by presenting its own version of the bill. In either case, the
result is "two bills on the same subject." 33 This is the source of the "germaneness" rule
which states that the Senate bill must be germane to the bill originally passed by the
House of Representatives. In Tolentino, this was not really an issue as both the House
and Senate Bills in question had one subject the VAT.
The facts obtaining here is very much different from Tolentino. It is very apparent that
House Bills No. 3555 and 3705 merely intended to amend Sections 106, 107, 108, 109,
110, 111 and 114 of the NIRC of 1997, pertaining to the VAT provisions. On the other
hand, Senate Bill No. 1950 intended to amend Sections 27, 28, 34, 106, 108, 109, 110,
112, 113, 114, 116, 117, 119, 121, 125, 148, 151, 236, 237 and 288 of the
NIRC,pertaining to matters outside of VAT, such as income tax, percentage tax, franchise
tax, taxes on banks and other financial intermediaries, excise taxes, etc.

Thus, I am of the position that the Senate could not, without violating the germaneness
rule and the principle of "exclusive origination," propose tax matters not included in the
House Bills.
WHEREFORE, I vote to CONCUR with the majority opinion except with respect to the
points above-mentioned.
CALLEJO, SR., J., concurring and dissenting opinion:
I join the concurring and dissenting opinion of Mr. Justice Reynato S. Puno as I concur
with the majority opinion but vote to declare as unconstitutional the deletion of the "nopass on provision" contained in Senate Bill No. 1950 and House Bill No. 3705 (the
constituent bills of Republic Act No. 9337).
The present petitions provide an opportune
occasion for the Court to re-examine
Tolentino v. Secretary of Finance
In ruling that Congress, in enacting R.A. No. 9337, complied with the formal requirements
of the Constitution, the ponencia relies mainly on the Court's rulings in Tolentino v.
Secretary of Finance. 1 To recall, Tolentino involved Republic Act No. 7716, which
similarly amended the NIRC by widening the tax base of the VAT system. The procedural
attacks against R.A. No. 9337 are substantially the same as those leveled against R.A.
No. 7716, e.g., violation of the "Origination Clause" (Article VI, Section 24) and the
"Three-Reading Rule" and the "No-Amendment Rule" (Article VI, Section 26[2]) of the
Constitution. DHETIS
The present petitions provide an opportune occasion for the Court to re-examine its
rulings in Tolentino particularly with respect to the scope of the powers of the Bicameral
Conference Committee vis- -vis Article VI, Section 26(2) of the Constitution.
The crucial issue posed by the present petitions is whether the Bicameral Conference
Committee may validly introduce amendments that were not contained in the respective
bills of the Senate and the House of Representatives. As a corollary, whether it may
validly delete provisions uniformly contained in the respective bills of the Senate and the
House of Representatives.
In Tolentino, the Court declared as valid amendments introduced by the Bicameral
Conference Committee even if these were not contained in the Senate and House bills.
The majority opinion therein held:
As to the possibility of an entirely new bill emerging out of a Conference Committee, it
has been explained:
Under congressional rules of procedures, conference committees are not expected to
make any material change in the measure at issue, either by deleting provisions to which
both houses have already agreed or by inserting new provisions. But this is a difficult
provision to enforce. Note the problem when one house amends a proposal originating in
either house by striking out everything following the enacting clause and substituting
provisions which make it an entirely new bill. The versions are now altogether different,
permitting a conference committee to draft essentially a new bill . . .

The result is a third version, which is considered an "amendment in the nature of a

substitute," the only requirement for which being that the third version be germane to
the subject of the House and Senate bills.
Indeed, this Court recently held that it is within the power of a conference committee to
include in its report an entirely new provision that is not found either in the House bill or
in the Senate Bill. If the committee can propose an amendment consisting of one or two
provisions, collectively considered as an "amendment in the nature of a substitute," so
long as such an amendment is germane to the subject of the bills before the committee.
After all, its report was not final but needed the approval of both houses of Congress to
become valid as an act of the legislative department. The charge that in this case the
Conference Committee acted a third legislative chamber is thus without any basis. 2
The majority opinion in Tolentino relied mainly on the practice of the United States
legislature in making the foregoing disquisition. It was held, in effect, that following the
US Congress' practice where a conference committee is permitted to draft a bill that is
entirely different from the bills of either the House of Representatives or Senate, the
Bicameral Conference Committee is similarly empowered to make amendments not
found in either the House or Senate bills.
The ponencia upholds the acts of the Bicameral Conference Committee with respect to
R.A. No. 9337, following the said ruling in Tolentino.
To my mind, this unqualified adherence by the majority opinion in Tolentino, and now by
the ponencia, to the practice of the US Congress and its conference committee system
ought to be re-examined. There are significant textual differences between the US
Federal Constitution's and our Constitution's prescribed congressional procedure for
enacting laws. Accordingly, the degree of freedom accorded by the US Federal
Constitution to the US Congress markedly differ from that accorded by our Constitution
to the Philippine Congress.
Section 7, Article I of the US Federal Constitution reads:
[1]All Bills for raising Revenue shall originate in the House of Representatives; but the
Senate may propose or concur with Amendments as on other Bills.
[2]Every Bill which shall have passed the House of Representatives and the Senate, shall,
before it become a Law, be presented to the President of the United States; If he approve
he shall it, but if not he shall return it, with his Objections to the House in which it shall
have originated, who shall enter the Objections at large on their Journal, and proceed to
reconsider it. If after such Reconsideration two thirds of that House shall agree to pass
the Bill, it shall be sent together with the Objections, to the other House, by which it
shall, likewise, be reconsidered, and if approved by two thirds of that House, it shall
become a Law. But in all such Cases the Votes of both Houses shall be determined by
yeas and Nays, and the Names of the Persons voting for and against the Bill shall be
entered on the Journal of each House respectively. If any Bill shall not be returned by the
President within ten Days (Sundays excepted) after it shall have been presented to him,
the Same shall be a Law, in like Manner as if he had signed it, unless the Congress by
their Adjournment prevent its return in which Case it shall not be a Law.

[3]Every Order, Resolution, or Vote to Which the Concurrence of the Senate and House of
Representatives may be necessary (except on a question of Adjournment) shall be
presented to the President of the United States; and before the Same shall take Effect,
shall be approved by him, or being disapproved by him, shall be repassed by two thirds
of the Senate and House of Representatives, according to the Rules and Limitations
prescribed in the Case of a Bill.

On the other hand, Article VI of our Constitution prescribes for the following procedure
for enacting a law:
Sec. 26. (1) Every bill passed by Congress shall embrace only one subject which shall be
expressed in the title thereof.
(2)No bill passed by either House shall become a law unless it has passed three readings
on separate days, and printed copies thereof in its final form have been distributed to its
Members three days before its passage, except when the President certifies to the
necessity of its immediate enactment to meet a public calamity or emergency. Upon the
last reading of a bill, no amendment thereto shall be allowed, and the vote thereon shall
be taken immediately thereafter, and the yeas and nays entered in the Journal.
Sec. 27. (1) Every bill passed by Congress shall, before it becomes a law, be presented to
the President. If he approves the same, he shall sign it; otherwise, he shall veto it and
return the same with his objections to the House where it originated, which shall enter
the objections at large in its Journal and proceed to reconsider it. If, after such
reconsideration, two-thirds of all the Members of such House shall agree to pass the bill,
it shall be sent, together with the objections, to the other House by which it shall likewise
be reconsidered, and if approved by two-thirds of all the Members of that House, it shall
become a law. In all such cases, the votes of each House shall be determined by yeas
and nays, and the names of the Members voting for or against shall be entered in its
Journal. The President shall communicate his veto of any bill to the House where it
originated within thirty days after the date of receipt thereof; otherwise, it shall become
a law as if he had signed it.
(2)The President shall have the power to veto any particular item or items in an
appropriation, revenue, or tariff bill, but the veto shall not affect the item or items to
which he does not object.
Two distinctions are readily apparent between the two procedures:
1.Unlike the US Federal Constitution,our Constitution prescribes the "three-reading" rule
or that no bill shall become a law unless it shall have been read on three separate days
in each house except when its urgency is certified by the President; and
2.Unlike the US Federal Constitution,our Constitution prescribes the "no-amendment"
rule or that no amendments shall be allowed upon the last reading of the bill.
American constitutional experts have lamented that certain congressional procedures
have not been entrenched in the US Federal Constitution. According to a noted
constitutional law professor, the absence of the "three-reading" requirement as well as

similar legislative-procedure rules from the US Federal Constitution is a "cause for

regret." 3
In this connection, it is interesting to note that the conference committee system in the
US Congress has been described in this wise:
Conference Committees
Another main mechanism of joint House and Senate action is the conference committee.
Inherited from the English Constitution,the conference committee system is an
evolutionary product whose principal threads were woven on the loom of congressional
practice into a unified pattern by the middle of the nineteenth century. "By 1852," writes
Ada McCown, historian of the origin and development of the conference committee, "the
customs of presenting identical reports from the committees of conference in both
houses, of granting high privilege to these conference reports, of voting upon the
conference report as a whole and permitting no amendment of it, of keeping secret the
discussions carried on in the meetings of the conference committee, had become
established in American parliamentary practice."
Conference committees are composed of Senators and Representatives, usually three
each, appointed by the presiding officers of both houses, for the purpose of adjusting
differences between bills they have passed. This device has been extensively used by
every Congress since 1789. Of the 1157 laws enacted by the 78th Congress, for
example, 107 went through conference and, of these, 36 were appropriation bills on
which the House had disagreed to Senate amendments. In practice, most important
legislation goes through the conference closet and is there revised, sometimes beyond
recognition, by the all-powerful conferees or managers, as they are styled. A large body
of law and practice has been built up over the years governing conference procedure and
reports.
Suffice it to say here that serious evils have marked the development of the conference
committee system. In the first place, it is highly prodigal of members' time. McConachie
calculated that the average time consumed in conference was 33 days per bill. Bills are
sent to conference without reading the amendments of the other chamber. Despite rules
to the contrary, conferees do not confine themselves to matters in dispute, but often
initiate entirely new legislation and even strike out identical provisions previously
approved by both houses. This happened during the 78th Congress, for instance, when
an important amendment to the surplus property bill, which had been approved by both
houses, was deleted in conference.
Conference committees, moreover, suffer like other committees from the seniority rule.
The senior members of the committees concerned, who are customarily appointed as
managers on the part of the House and Senate, are not always the best informed on the
questions at issue, nor do they always reflect the majority sentiment of their houses.
Furthermore, conference reports must be accepted or rejected in toto without
amendment and they are often so complex and obscure that they are voted upon
without knowledge of their contents. What happens in practice is that Congress
surrenders its legislative function to irresponsible committees of conference. The
standing rules against including new and extraneous matter in conference reports have
been gradually whittled away in recent years by the decisions of presiding officers.
Senate riders attached to appropriation bills enable conference committees to legislate

and the House usually accepts them rather than withhold supply, thus putting it, as
Senator Hoar once declared, under a degrading duress.
It is also alleged that under this secret system lobbyist are able to kill legislation they
dislike and that "jokers" designed to defeat the will of Congress can be inserted without
detection. Senator George W. Norris once characterized the conference committee as a
third house of Congress. "The members of this 'house,' he said, "are not elected by the
people. The people have no voice as to who these members shall be . . . This conference
committee is many times, in very important matters of legislation, the most important
branch of our legislature. There is no record kept of the workings of the conference
committee. Its work is performed, in the main, in secret. No constituent has any definite
knowledge as to how members of this conference committee vote, and there is no record
to prove the attitude of any member of the conference committee . . . As a practical
proposition we have legislation, then, not by the voice of the members of the Senate, not
by the members of the House of Representatives, but we have legislation by the voice of
five or six men. And for practical purposes, in most cases, it is impossible to defeat the
legislation proposed by this conference committee. Every experienced legislator knows
that it is the hardest thing in the world to defeat a conference report."
Despite these admitted evils, impartial students of the conference committee system
defend it on net balance as an essential part of the legislative process. Some mechanism
for reconciling differences under bicameral system is obviously indispensable. The
remedy for the defects of the device is not to abolish it, but to keep it under
congressional control. This can be done by enforcing the rules which prohibit the
inclusion in conference reports of matter not committed to them by either house and
forbid the deletion of items approved by both bodies; by permitting conference
managers to report necessary new matter separately and the houses to consider it apart
from the conference report; by fixing a deadline toward the close of a session after which
no bills could be sent to conference, so as to eliminate congestion at the end of the
session a suggestion made by the elder Senator La Follete in 1919; by holding
conferences in sessions open to the public, letting conference reports lie over longer; and
printing them in bill form (with conference changes in italics) so as to allow members
more time to examine them and discover "jokers." 4
The "three-reading" and "no-amendment" rules, absent in the US Federal
Constitution,but expressly mandated by Article VI, Section 26(2) of our Constitution are
mechanisms instituted to remedy the "evils" inherent in a bicameral system of
legislature, including the conference committee system.
Sadly, the ponencia's refusal to apply Article VI, Section 26(2) of the Constitution on the
Bicameral Conference Committee and the amendments it introduced to R.A. No. 9337
has "effectively dismantled" the "three-reading rule" and "no-amendment rule." As
posited by Fr. Joaquin Bernas, a member of the Constitutional Commission:
In a bicameral system, bills are independently processed by both House of Congress. It is
not unusual that the final version approved by one House differs from what has been
approved by the other. The "conference committee," consisting of members nominated
from both Houses, is an extra-constitutional creation of Congress whose function is to
propose to Congress ways of reconciling conflicting provisions found in the Senate
version and in the House version of a bill. It performs a necessary function in a bicameral
system. However, since conference committees have merely delegated authority from

Congress, they should not perform functions that Congress itself may not do. Moreover,
their proposals need confirmation by both Houses of Congress.

In Tolentino v. Secretary of Finance, the Court had the opportunity to delve into the limits
of what conference committees may do. The petitioners contended that the
consolidation of the House and Senate bills made by the conference committee
contained provisions which neither the Senate bill nor the House bill had. In her
dissenting opinion, Justice Romero laid out in great detail the provisions that had been
inserted by the conference committee. These provisions, according to the petitioners had
been introduced "surreptitiously" during a closed door meeting of the committee.
The Court's answer to this was that in United States practice conference committees
could be held in executive sessions and amendments germane to the purpose of the bill
could be introduced even if these were not in either original bill. But the Court did not
bother to check whether perhaps the American practice was based on a constitutional
text different from that of the Philippine Constitution.
There are as a matter of fact significant differences in the degree of freedom American
and Philippine legislators have. The only rule that binds the Federal Congress is that it
may formulate its own rules of procedure. For this reason, the Federal Congress is master
of its own procedures. It is different with the Philippine Congress. Our Congress indeed is
also authorized to formulate its own rules of procedure but within limits not found in
American law. For instance, there is the "three readings on separate days" rule. Another
important rule is that no amendments may be introduced by either house during third
reading. These limitations were introduced by the 1935 and 1973 Constitutions and
confirmed by the 1987 Constitution as a defense against the inventiveness of the
stealthy and surreptitious. These, however, were disregarded by the Court in Tolentino in
favor of contrary American practice.
This is not to say that conference committees should not be allowed. But an effort should
be made to lay out the scope of what conference committees may do according to the
requirements and the reasons of the Philippine Constitution and not according to the
practice of the American Congress. For instance, if the two Houses are not allowed to
introduce and debate amendments on third reading, can they circumvent this rule by
coursing new provisions through the instrumentality of a conference committee created
by Congress and meeting in secret? The effect of the Court's uncritical embrace of the
practice of the American Congress and its conference committees is to dismantle the noamendment rule. 5
The task at hand for the Court, but which the ponencia eschews, is to circumscribe the
powers of the Bicameral Conference Committee in light of the "three-reading" and "noamendment" rules in Article VI, Section 26(2) of the Constitution.
The Bicameral Conference Committee, in
deleting the "no pass on provision" contained in
Senate Bill No. 1950 and House Bill No. 3705,
violated Article VI, Section 26(2) of the Constitution
Pertinently, in his dissenting opinion in Tolentino, Justice Davide (now Chief Justice)
opined that the duty of the Bicameral Conference Committee was limited to the

reconciliation of disagreeing provisions or the resolution of differences or inconsistencies.

This proposition still applies as can be gleaned from the following text of Sections 88 and
89, Rule XIV of the Rules of the House of Representatives:
Sec. 88.Conference Committee. In the event that the House does not agree with the
Senate on the amendments to any bill or joint resolution, the differences may be settled
by the conference committees of both chambers.
In resolving the differences with the Senate, the House panel shall, as much as possible,
adhere to and support the House Bill. If the differences with the Senate are so substantial
that they materially impair the House Bill, the panel shall report such fact to the House
for the latter's appropriate action.
Sec. 89.Conference Committee Reports. . . . Each report shall contain a detailed,
sufficiently explicit statement of the changes in or amendments to the subject measure.
DAaEIc
xxx xxx xxx
The Chairman of the House panel may be interpellated on the Conference Committee
Report prior to the voting thereon. The House shall vote on the Conference Committee
report in the same manner and procedure as it votes on a bill on third and final reading.
and Rule XII, Section 35 of the Rules of the Senate:
Sec. 35.In the event that the Senate does not agree with the House of Representatives
on the provision of any bill or joint resolution, the differences shall be settled by a
conference committee of both Houses which shall meet within ten (10) days after their
composition. The President shall designate the members of the Senate Panel in the
conference committee with the approval of the Senate.
Each Conference Committee Report shall contain a detailed and sufficiently explicit
statement of the changes in, or amendments to the subject measure, and shall be signed
by a majority of the members of each House panel, voting separately.
Justice Davide further explained that under its limited authority, the Bicameral
Conference Committee could only (a) restore, wholly or partly, the specific provisions of
the House Bill amended by the Senate Bill; (b) sustain, wholly or partly, the Senate's
amendments, or (c) by way of compromise, to agree that neither provisions in the House
Bill amended by the Senate nor the latter's amendments thereto be carried into the final
form of the former. Justice Romero, who also dissented in Tolentino, added that the
conference committee is not authorized to initiate or propose completely new matters
although under certain legislative rules like the Jefferson's Manual, a conference
committee may introduce germane matters in a particular bill. However, such matters
should be circumscribed by the committee's sole authority and function to reconcile
differences.
In the case of R.A. No. 9337, the Bicameral Conference Committee made an
"amendment by deletion" with respect to the "no pass on provision" contained in both
House Bill (HB) No. 3705 and Senate Bill (SB) No. 1950. HB 3705 proposed to amend
Sections 106 and 108 of the NIRC by expressly stating therein that sellers of petroleum
products and power generation companies selling electricity are prohibited from passing

on the VAT to the consumers. SB 1950 proposed to amend Section 108 by likewise
prohibiting power generation companies from passing on the VAT to the consumers.
However, these no pass on provisions were altogether deleted by the Bicameral
Conference Committee. At the least, since there was no disagreement between HB 3705
and SB 1950 with respect to the "no pass on provision" on the sale of electricity, the
Bicameral Conference Committee acted beyond the scope of its authority in deleting the
pertinent proviso.
At this point, it is well to recall the rationale for the "no-amendment rule" and the "threereading rule" in Article VI, Section 26(2) of the Constitution. The proscription on
amendments upon the last reading is intended to subject all bills and their amendments
to intensive deliberation by the legislators and the ample ventilation of issues to afford
the public an opportunity to express their opinions or objections thereon. 6 Analogously,
it is said that the "three-reading rule" operates "as a self-binding mechanism that allows
the legislature to guard against the consequences of its own future passions, myopia, or
herd behavior. By requiring that bills be read and debated on successive days, legislature
may anticipate and forestall future occasions on which it will be seized by deliberative
pathologies." 7 As Jeremy Bentham, a noted political analyst, put it: "[t]he more
susceptible a people are of excitement and being led astray, so much the more ought
they to place themselves under the protection of forms which impose the necessity of
reflection, and prevent surprises." 8
Reports of the Bicameral Conference Committee, especially in cases where substantial
amendments, or in this case deletions, have been made to the respective bills of either
house of Congress, ought to undergo the "three-reading" requirement in order to give
effect to the letter and spirit of Article VI, Section 26(2) of the Constitution.
The Bicameral Conference Committee Report that eventually became R.A. No. 9337, in
fact, bolsters the argument for the strict compliance by Congress of the legislative
procedure prescribed by the Constitution. As can be gleaned from the said Report, of the
9 Senators-Conferees, 9 only 5 Senators 10 unqualifiedly approved it. Senator Joker P.
Arroyo expressed his qualified dissent while Senators Sergio R. Osmea III and Juan
Ponce Enrile approved it with reservations. On the other hand, of the twenty-eight (28)
Members of the House of Representatives-Conferees, 11 fourteen (14) 12 approved the
same with reservations while three 13 voted no. All the reservations expressed by the
conferees relate to the deletion of the "no pass on provision." Only eleven (11)
unqualifiedly approved it. In other words, even among themselves, the conferees were
not unanimous on their Report. Nonetheless, Congress approved it without even
thoroughly discussing the reservations or qualifications expressed by the conferees
therein. HAcaCS
This "take it or leave it" stance vis- -vis conference committee reports opens the
possibility of amendments, which are substantial and not even germane to the original
bills of either house, being introduced by the conference committees and voted upon by
the legislators without knowledge of their contents. This practice cannot be
countenanced as it patently runs afoul of the essence of Article VI, Section 26(2) of the
Constitution. Worse, it is tantamount to Congress surrendering its legislative functions to
the conference committees.

Ratification by Congress did not cure the

unconstitutional act of the Bicameral Conference
Committee of deleting the "no pass on provision"
That both the Senate and the House of Representatives approved the Bicameral
Conference Committee Report which deleted the "no pass on provision" did not cure the
unconstitutional act of the said committee. As succinctly put by Chief Justice Davide in
his dissent in Tolentino, "[t]his doctrine of ratification may apply to minor procedural
flaws or tolerable breaches of the parameters of the bicameral conference committee's
limited powers but never to violations of the Constitution. Congress is not above the
Constitution." 14
Enrolled Bill Doctrine is not applicable where, as in
this case, there is grave violation of the Constitution
As expected, the ponencia invokes the enrolled bill doctrine to buttress its refusal to pass
upon the validity of the assailed acts of the Bicameral Conference Committee. Under the
"enrolled bill doctrine," the signing of a bill by the Speaker of the House and the Senate
President and the certification of the Secretaries of both houses of Congress that it was
passed are conclusive of its due enactment. In addition to Tolentino, the ponencia cites
Farias v. Executive Secretary 15 where the Court declined to go behind the enrolled bill
vis- -vis the allegations of the petitioners therein that irregularities attended the
passage of Republic Act No. 9006, otherwise known as the Fair Election Act.
Reliance by the ponencia on Farias is quite misplaced. The Court's adherence to the
enrolled bill doctrine in the said case was justified for the following reasons:
The Court finds no reason to deviate from the salutary in this case where the
irregularities alleged by the petitioners mostly involved the internal rules of Congress,
whether House or Senate. Parliamentary rules are merely procedural and with their
observance the courts have no concern. Whatever doubts there may be as to the formal
validity of Rep. Act No. 9006 must be resolved in its favor. The Court reiterates its ruling
in Arroyo v. De Venecia, viz.:
But the cases, both here and abroad, in varying forms of expression, all deny to the
courts the power to inquire into the allegations that, in enacting a law, a House of
Congress failed to comply with its own rules, in the absence of showing that there was a
violation of a constitutional provision or the rights of private individuals. In Osmea v.
Pendatun, it was held: "At any rate, courts have declared that 'the rules adopted by
deliberative bodies are subject to revocation, modification or waiver at the pleasure of
the body adopting them.' And it has been said that 'Parliamentary rules are merely
procedural, and with their observance, the courts have no concern. They may be waived
or disregarded by the legislative body.' Consequently, 'mere failure to conform to
parliamentary usage will not invalidate the action (taken by a deliberative body) when
the requisite number of members have agreed to a particular measure. 16
Thus, in Farias, the Court's refusal to go behind the enrolled bill was based on the fact
that the alleged irregularities that attended the passage of R.A. No. 9006 merely involved
the internal rules of both houses of Congress. The procedural irregularities allegedly
committed by the conference committee therein did not amount to a violation of a
provision of the Constitution. 17

In contrast, the act of the Bicameral Conference Committee of deleting the "no pass on
provision" of SB 1950 and HB 3705 infringe Article VI, Section 26(2) of the Constitution.
The violation of this constitutional provision warrants the exercise by the Court of its
constitutionally-ordained power to strike down any act of a branch or instrumentality of
government or any of its officials done with grave abuse of discretion amounting to lack
or excess of jurisdiction. 18
ACCORDINGLY, I join the concurring and dissenting opinion of Mr. Justice Reynato S. Puno
and vote to dismiss the petitions with respect to Sections 4, 5 and 6 of Republic Act No.
9337 for being premature. Further, I vote to declare as unconstitutional Section 21
thereof and the deletion of the "no pass on provision" contained in the constituent bills of
Republic Act No. 9337.
AZCUNA, J., concurring and dissenting opinion:
Republic Act No. 9337, the E-VAT law, is assailed as an unconstitutional abdication of
Congress of its power to tax through its delegation to the President of the decision to
increase the rate of the tax from 10% to 12%, effective January 1, 2006, after any of two
conditions has been satisfied. 1
The two conditions are:
(i)Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the
previous year exceeds two and four-fifth percent (2 4/5%); or
(ii)National government deficit as a percentage of GDP of the previous year exceeds one
and one-half percent (1 1/2%). 2
A scrutiny of these "conditions" shows that one of them is certain to happen on January
1, 2006.
The first condition is that the collection from the E-VAT exceeds 2 4/5% of the Gross
Domestic Product (GDP) of the previous year, a ratio that is known as the tax effort.
The second condition is that the national government deficit exceeds 1 1/2% of the GDP
of the previous year.
Note that the law says that the rate shall be increased if any of the two conditions
happens, i.e., if condition (i) or condition (ii) occurs.
Now, in realistic terms, considering the short time-frame given, the only practicable way
that the present deficit of the national government can be reduced to 1 1/2% or lower,
thus preventing condition (ii) from happening, is to increase the tax effort, which mainly
has to come from the E-VAT. But increasing the tax effort through the E-VAT, to the extent
needed to reduce the national deficit to 1 1/2% or less, will trigger the happening of
condition (i) under the law. Thus, the happening of condition (i) or condition (ii) is in
reality certain and unavoidable, as of January 1, 2006. HcTSDa
This becomes all the more clear when we consider the figures provided during the oral
arguments.

The Gross Domestic Product for 2005 is estimated at P5.3 Trillion pesos.
The tax effort of the present VAT is now at 1.5%.
The national budgetary deficit against the GDP is now at 3%.
So to reduce the deficit to 1.5% from 3%, one has to increase the tax effort from VAT,
now at 1.5%, to at least 3%, thereby exceeding the 2 4/5 percent ceiling in condition (i),
making condition (i) happen. If, on the other hand, this is not done, then condition (ii)
happens the budget deficit remains over 1.5%.
What is the result of this? The result is that in reality, the law does not impose any
condition, or the rate increase thereunder, from 10% to 12%, effective January 1, 2006,
is unconditional. For a condition is an event that may or may not happen, or one whose
occurrence is uncertain. 3 Now while condition (i) is indeed uncertain and condition (ii) is
likewise uncertain, the combination of both makes the occurrence of one of them certain.
Accordingly, there is here no abdication by Congress of its power to fix the rate of the tax
since the rate increase provided under the law, from 10% to 12%, is definite and certain
to occur, effective January 1, 2006. All that the President will do is state which of the two
conditions occurred and thereupon implement the rate increase.
At first glance, therefore, it would appear that the decision to increase the rate is to be
made by the President, or that the increase is still uncertain, as it is subject to the
happening of any of two conditions.
Nevertheless, the contrary is true and thus it would be best in these difficult and critical
times to let our people know precisely what burdens they are being asked to bear as the
necessary means to recover from a crisis that calls for a heroic sacrifice by all.
It is for this reason that the Court required respondents to submit a copy of the rules to
implement the E-VAT, particularly as to the impact of the tax on prices of affected
commodities, specially oil and electricity. For the onset of the law last July 1, 2005 was
confusing, resulting in across-the-board increases of 10% in the prices of commodities.
This is not supposed to be the effect of the law, as was made clear during the oral
arguments, because the law also contains provisions that mitigate the impact of the EVAT through reduction of other kinds of taxes and duties, and other similar measures,
specially as to goods that go into the supply chain of the affected products. A proper
implementation of the E-VAT, therefore, should cause only the appropriate incremental
increase in prices, reflecting the net incremental effect of the tax, which is not
necessarily 10%, but possibly less, depending on the products involved.
The introduction of the mitigating or cushioning measures through the Senate or through
the Bicameral Conference Committee, is also being questioned by petitioners as
unconstitutional for violating the rule against amendments after third reading and the
rule that tax measures must originate exclusively in the House of Representatives (Art.
VI, Secs. 24 and 26 [2], Constitution). For my part, I would rather give the necessary
leeway to Congress, as long as the changes are germane to the bill being changed, the
bill which originated from the House of Representatives, and these are so, since these
were precisely the mitigating measures that go hand-on-hand with the E-VAT, and are,
therefore, essential and hopefully sufficient means to enable our people to bear the

sacrifices they are being asked to make. Such an approach is in accordance with the
Enrolled Bill Doctrine that is the prevailing rule in this jurisdiction. (Tolentino v. Secretary
of Finance, 249 SCRA 628 [1994]). The exceptions I find are the provisions on corporate
income taxes, which are not germane to the E-VAT law, and are not found in the Senate
and House bills.

I thus agree with Chief Justice Hilario G. Davide, Jr. in his separate opinion that the
following are not germane to the E-VAT legislation:
Amended TAX
CODE ProvisionSubject Matter
Section 27Rate of income tax on domestic corporations
Section 28(A)(1)Rate of income tax on resident foreign
corporations
Section 28(B)(1)Rate of income tax on non-resident foreign
corporations
Section 28(B)(5-b)Rate of income tax on intercorporate
dividends received by non-resident foreign
corporations
Section 34(B)(1)Deduction from gross income
Similarly, I agree with Justice Artemio V. Panganiban in his separate opinion that the
following are not germane to the E-VAT law:
"Sections 1, 2, and 3 of the Republic Act No. 9337 . . . , in so far as these sections (a)
amend the rates of income tax on domestic, resident foreign, and nonresident foreign
corporations; (b) amend the tax credit against taxes due from nonresident foreign
corporations on the intercorporate dividends; and (c) reduce the allowable deduction
from interest expense."
Respondents should, in any case, now be able to implement the E-VAT law without
confusion and thereby achieve its purpose. 4
I vote to GRANT the petitions to the extent of declaring unconstitutional the provisions in
Republic Act. No. 9337 that are not germane to the subject matter and DENY said
petitions as to the rest of the law, which are constitutional. cDCSET
TINGA, J., dissenting and concurring opinion:
The E-VAT Law, 1 as it stands, will exterminate our country's small to medium
enterprises. This will be the net effect of affirming Section 8 of the law, which amends
Sections 110 of the National Internal Revenue Code (NIRC)by imposing a seventy percent
(70%) cap on the creditable input tax a VAT-registered person may apply every quarter
and a mandatory sixty (60) -month amortization period on the input tax on goods
purchased or imported in a calendar month if the acquisition cost of such goods exceeds
One Million Pesos (P1,000,000.00).

Taxes may be inherently punitive, but when the fine line between damage and
destruction is crossed, the courts must step forth and cut the hangman's noose. Justice
Holmes once confidently asserted that "the power to tax is not the power to destroy
while this Court sits", and we should very well live up to this expectation not only of the
revered Holmes, but of the Filipino people who rely on this Court as the guardian of their
rights. At stake is the right to exist and subsist despite taxes, which is encompassed in
the due process clause.
I respectfully submit these views while maintaining the deepest respect for the
prerogative of the legislature to impose taxes, and of the national government to chart
economic policy. Such respect impels me to vote to deny the petitions in G.R. Nos.
168056, 168207, 168463, 2 and 168730, even as I acknowledge certain merit in the
challenges against the E-VAT law that are asserted in those petitions. In the final
analysis, petitioners therein are unable to convincingly demonstrate the constitutional
infirmity of the provisions they seek to assail. The only exception is Section 21 of the law,
which I consider unconstitutional, for reasons I shall later elaborate.
However, I see the petition in G.R. No. 168461 as meritorious and would vote to grant it.
Accordingly, I dissent and hold as unconstitutional Section 8 of Republic Act No. 9337,
insofar as it amends Section 110(A) and (B) of the National Internal Revenue Code
(NIRC)as well as Section 12 of the same law, with respect to its amendment of Section
114(C) of the NIRC.
The first part of my discussion pertains to the petitions in G.R. Nos. 168056, 168207,
168463, and 168730, while the second part is devoted to what I deem the most crucial
issue before the Court, the petition in G.R. No. 168461.
I.
Undue Delegation and the Increase
Of the VAT Rate
My first point pertains to whether or not Sections 4, 5 and 6 of the E-VAT Law constitutes
an undue delegation of legislative power. In appreciating the aspect of undue delegation
as regards taxation statutes, the fundamental point remains that the power of taxation is
inherently legislative, 3 and may be imposed or revoked only by the legislature. 4 In
tandem with Section 1, Article VI of the Constitution which institutionalizes the lawmaking power of Congress, Section 24 under the same Article crystallizes this principle,
as it provides that "[a]ll appropriation, revenue or tariff bills . . . shall originate
exclusively in the House of Representatives." 5
Consequently, neither the executive nor judicial branches of government may originate
tax measures. Even if the President desires to levy new taxes, the imposition cannot be
done by mere executive fiat. In such an instance, the President would have to rely on
Congress to enact tax laws. aITDAE
Moreover, this plenary power of taxation cannot be delegated by Congress to any other
branch of government or private persons, unless its delegation is authorized by the
Constitution itself. 6 In this regard, the situation stands different from that in the recent
case Southern Cross v. PHILCEMCOR, 7 wherein I noted in my ponencia that the Tariff
Commission and the DTI Secretary may be regarded as agents of Congress for the
purpose of imposing safeguard measures. That pronouncement was made in light of
Section 28(2) Article VI, which allows Congress to delegate to the President through law

the power to impose tariffs and imposts, subject to limitations and restrictions as may be
ordained by Congress. In the case of taxes, no such constitutional authorization exists,
and the discretion to ascertain the rates, subjects, and conditions of taxation may not be
delegated away by Congress.
However, as the majority correctly points out, the power to ascertain the facts or
conditions as the basis of the taking into effect of a law may be delegated by Congress, 8
and that the details as to the enforcement and administration of an exercise of taxing
power may be delegated to executive agencies, including the power to determine the
existence of facts on which its operation depends. 9
Proceeding from these principles, Sections 4, 5, and 6 of the E-VAT Law warrant
examination. The provisions read:
SEC. 4.Sec. 106 of the same Code, as amended, is hereby further amended to read as
follows:
SEC. 106.Value-Added Tax on Sale of Goods or Properties.
(A)Rate and Base of Tax. There shall be levied, assessed and collected on every sale,
barter or exchange of goods or properties, a value-added tax equivalent to ten percent
(10%) of the gross selling price or gross value in money of the goods or properties sold,
bartered or exchanged, such tax to be paid by the seller or transferor; provided, that the
President, upon the recommendation of the Secretary of Finance, shall, effective January
1, 2006, raise the rate of value-added tax to twelve percent (12%), after any of the
following conditions has been satisfied.
(i)value-added tax collection as a percentage of Gross Domestic Product (GDP) of the
previous year exceeds two and four-fifth percent (2 4/5%) or
(ii)national government deficit as a percentage of GDP of the previous year exceeds one
and one-half percent 1 1/2%).
Sec. 5.Section 107 of the same Code, as amended, is hereby further amended to read as
follows:
SEC. 107.Value-Added Tax on Importation of Goods.
(a)In General. There shall be levied, assessed and collected on every importation of
goods a value-added tax equivalent to ten percent (10%) based on the total value used
by the Bureau of Customs in determining tariff and customs duties, plus customs duties,
excise taxes, if any, and other charges, such tax to be paid by the importer prior to the
release of such goods from customs custody: Provided, That where the customs duties
are determined on the basis of the quantity or volume of the goods, the value-added tax
shall be based on the landed cost plus excise taxes, if any: provided, further, that the
President, upon the recommendation of the Secretary of Finance, shall, effective January
1, 2006, raise the rate of value-added tax to twelve percent (12%) after any of the
following conditions has been satisfied.
(i)national value-added tax collection as a percentage of Gross Domestic Product (GDP)
of the previous year exceeds two and four-fifth percent (2 4/5%) or

(ii)government deficit as a percentage of GDP of the previous year exceeds one and onehalf percent (1 1/2%).
SEC. 6.Section 108 of the same Code, as amended, is hereby further amended to read as
follows:
SEC. 108.Value-added Tax on Sale of Services and Use of Lease of Properties
(A)Rate and Base of Tax. There shall be levied, assessed and collected, a value-added
tax equivalent to ten percent (10%) of gross receipts derived from the sale or exchange
of services; provided, that the President, upon the recommendation of the Secretary of
Finance, shall, effective January 1, 2006, raise the rate of value-added tax to twelve
percent (12%), after any of the following conditions has been satisfied.
(i)value-added tax collection as a percentage of Gross Domestic Product (GDP) of the
previous year exceeds two and four-fifth percent (2 4/5%) or
(ii)national government deficit as a percentage of GDP of the previous year exceed same
and on-half percent (1 1/2%).
The petitioners deem as noxious the proviso common to these provisions that "the
President, upon the recommendation of the Secretary of Finance, shall, effective January
1, 2006, raise the rate of value-added tax to twelve percent (12%)," after the satisfaction
of the twin conditions that value-added tax collection as a percentage of Gross Domestic
Product (GDP) of the previous year exceeds two and four-fifth percent (2 4/5%); or that
the national government deficit as a percentage of GDP of the previous year exceed
same and on-half percent (1 1/2%).
At first blush, it does seem that the assailed provisions are constitutionally deficient. It is
Congress, and not the President, which is authorized to raise the rate of VAT from 10% to
12%, no matter the circumstance. Yet a closer analysis of the proviso reveals that this is
not exactly the operative effect of the law. The qualifier "shall" denotes a mandatory,
rather than discretionary function on the part of the President to raise the rate of VAT to
12% upon the existence of any of the two listed conditions.

Since the President is not given any discretion in refusing to raise the VAT rate to 12%,
there is clearly no delegation of the legislative power to tax by Congress to the executive
branch. The use of the word "shall" obviates any logical construction that would allow the
President leeway in not raising the tax rate. More so, it is accepted that the principle of
constitutional construction that every presumption should be indulged in favor of
constitutionality and the court in considering the validity of the 'statute in question
should give it such reasonable construction as can be reached to bring it within the
fundamental law. 10 While all reasonable doubts should be resolved in favor, of the
constitutionality of a statute, 11 it should necessarily follow that the construction upheld
should be one that is not itself noxious to the Constitution.
Congress should be taken to task for imperfect draftsmanship at least. Much trouble
would have been avoided had the provisos instead read: "that effective January 1, 2006,

the rate of value-added tax shall be raised to twelve percent (12%), after any of the
following conditions has been satisfied . . . ." This, after all is the operative effect of the
provision as it stands. In relation to the operation of the tax increase, the denominated
role of the President and the Secretary of Finance may be regarded as a superfluity, as
their imprimatur as a precondition to the increase of the VAT rate must have no bearing.
Nonetheless, I cannot ignore the fact that both the President and the Secretary of
Finance have designated roles in the implementation of the tax increase. Considering
that it is Congress, and not these officials, which properly have imposed the increase in
the VAT rate, how should these roles be construed?
The enactment of a law should be distinguished from its implementation. Even if it is
Congress which exercises the plenary power of taxation, it is not the body that
administers the implementation of the tax. Under Section 2 of the National Internal
Revenue Code (NIRC),the assessment and collection of all national internal revenue
taxes, and the enforcement of all forefeitures, penalties and fines connected therewith
had been previously delegated to the Bureau of Internal Revenue, under the supervision
and control of the Department of Finance. 12
Moreover, as intimated earlier, Congress may delegate to other components of the
government the power to ascertain the facts or conditions as the basis of the taking into
effect of a law. It follows that ascertainment of the existence of the two conditions
precedent for the increase as stated in the law could very well be delegated to the
President or the Secretary of Finance. 13
Nonetheless, the apprehensions arise that the process of ascertainment of the listed
conditions delegated to the Secretary of Finance and the President effectively vest
discretionary authority to raise the VAT rate on the President, through the possible
subterfuges that may be employed to delay the determination, or even to manipulate
the factual premises. Assuming arguendo that these feared abuses may arise, I think it
possible to seek judicial enforcement of the increased VAT rate, even without the
participation or consent of the President or Secretary of Finance, upon indubitable
showing that any of the two listed conditions do exist. After all, the Court is ruling that
the increase in the VAT rate is mandatory and beyond the discretion of the President to
impose or delay.
The majority states that in making the recommendation to the President on the
existence of either of the two conditions, the Secretary of Finance is acting as the agent
of the legislative branch, to determine and declare the event upon which its expressed
will is to take effect. 14 This recognition of agency must be qualified. I do not doubt the
ability of Congress to delegate to the Secretary of Finance administrative functions in the
implementation of tax laws, as it does under Section 2 of the NIRC. Yet it would be
impermissible for Congress to delegate to the Secretary of Finance the plenary function
of enacting a tax law. As stated earlier, the situation stands different from that in
Southern Cross wherein the Constitution itself authorizes the delegation by Congress
through a law to the President of the discretion to impose tariff measures, subject to
restrictions and limitations provided in the law. 15 Herein, Congress cannot delegate to
either the President or the Secretary of Finance the discretion to raise the tax, as such
power belongs exclusively to the legislative branch of government. aAEIHC

Perhaps the term "agency" is not most suitable in describing the delegation exercised by
Congress in this case, for agency implies that the agent takes on attributes of the
principal by reason of representative capacity. In this case, whatever "agency" that can
be appreciated would be of severely limited capacity, encompassing as it only could the
administration, not enactment, of the tax measure.
I do not doubt the impression left by the provisions that it is the President, and not
Congress, which is authorized to raise the VAT rate. On paper at least, these imperfect
provisions could be multiple sources of mischief. On the political front, whatever blame or
scorn that may be attended with the increase of the VAT rate would fall on the President,
and not on Congress which actually increased the tax rate. On the legal front, a President
averse to increasing the VAT rate despite the existence of the two listed conditions may
take refuge in the infelicities of the provision, and refuse to do so on the ground that the
law, as written, implies some form of discretion on the part of the President who was,
after all, "authorized" to increase the tax rate. It is critical for the Court to disabuse this
notion right now.
The Continued Viability of
Tolentino v. Secretary of Finance
One of the more crucial issues now before us, one that has seriously divided the Court,
pertains to the ability of the Bicameral Conference Committee to introduce amendments
to the final bill which were not contained in the House bill from which the E-VAT Law
originated. Most of the points addressed by the petitioners have been settled in our
ruling in Tolentino v. Secretary of Finance, 16 yet a revisit of that precedent is urged upon
this Court. On this score, I offer my qualified concurrence with the ponencia.
Two key provisions of the Constitution come into play: Sections 24 and 26(2), Article VI of
the Constitution. They read:
Section 24:All appropriation, revenue or tariff bills, bills authorizing increase of the public
debt, bills of local application, and private bills shall originate exclusively in the House of
Representatives, but the Senate may propose or concur with amendments.
Section 26(2):No bill passed by either House shall become a law unless it has passed
three readings on separate days, and printed copies thereof in its final form have been
distributed to its Members three days before its passage, except when the President
certifies to the necessity of its immediate enactment to meet a public calamity or
emergency. Upon the last reading of a bill, no amendment thereto shall be allowed, and
the vote thereon shall be taken immediately thereafter, and the yeas and nays entered
in the Journal.
Section 24 is also known as the origination clause, which derives origin from British
practice. From the assertion that the power to tax the public at large must reside in the
representatives of the people, the principle evolved that money bills must originate in
the House of Commons and may not be amended by the House of Lords. 17 The principle
was adopted across the shores in the United States, and was famously described by
James Madison in The Federalist Papers as follows:
This power over the purse, may in fact be regarded as the most compleat and effectual
weapon with which any constitution can arm the immediate representatives of the

people, for obtaining a redress of every grievance, and for carrying into effect every just
and salutary measure. 18
There is an eminent difference from the British system from which the principle emerged,
and from our own polity. To this day, only members of the British House of Commons are
directly elected by the people, with the members of the House of Lords deriving their
seats from hereditary peerage. Even in the United States, members of the Senate were
not directly elected by the people, but chosen by state legislatures, until the adoption of
the Seventeenth Amendment in 1913. Hence, the rule assured the British and American
people that tax legislation arises with the consent of the sovereign people, through their
directly elected representatives. In our country though, both members of the House and
Senate are directly elected by the people, hence the vitality of the original conception of
the rule has somewhat lost luster.
Still, the origination clause deserves obeisance in this jurisdiction, simply because it is
provided in the Constitution. At the same time, its proper interpretation is settled
precedent, as enunciated in Tolentino:
To begin with, it is not the law but the revenue bill which is required by the
Constitution to "originate exclusively" in the House of Representatives. It is important to
emphasize this, because a bill originating in the House may undergo such extensive
changes in the Senate that the result may be a rewriting of the whole. The possibility of a
third version by the conference committee will be discussed later. At this point, what is
important to note is that, as a result of the Senate action, a distinct bill may be
produced. To insist that a revenue statute and not only the bill which initiated the
legislative process culminating in the enactment of the law must substantially be the
same as the House bill would be to deny the Senate's power not only to "concur with
amendments" but also to " propose amendments." It would be to violate the coequality
of legislative power of the two houses of Congress and in fact make the House superior
to the Senate. 19

The vested power of the Senate to "concur with amendments" necessarily implies the
ability to implement transformations from the original House bill into the final law. Since
the House and Senate sit separately in sessions, the only opportunity for the Senate to
introduce its amendments would be in the Bicameral Conference Committee, which
emerges only after both the House and the Senate have approved their respective bills.
IDSaTE
In the present petitions, Tolentino comes under fire on two fronts. The first controversy
arises from the adoption in Tolentino of American legislative practices relating to
bicameral committees despite the difference in constitutional frameworks, particularly
the limitation under Section 26(2), Article VI which does not exist in the American
Constitution.
The majority points out that "the 'no amendment rule' refers only to the procedure to be
followed by each house of Congress with regard to bills initiated in each of said
respective houses, before said bill is transmitted to the other house for its concurrence or
amendment." I agree with this statement. Clearly, the procedure under Section 26(2),

Article VI only relates to the passage of a bill before the House and Senate, and not the
process undertaken afterwards in the Bicameral Conference Committee.
Indeed, Sections 26 and 27 of Article VI, which detail the procedure how a bill becomes a
law, are silent as to what occurs between the passage by both Houses of their respective
bills, and the presentation to the President of "every bill passed by the Congress". 20
Evidently, "Congress" means both Houses, such that a bill approved by the Senate but
not by the House is not presented to the President for approval. There is obviously a
need for joint concurrence by the House and Senate of a bill before it is transmitted to
the President, but the Constitution does not provide how such concurrence is acquired.
This lacuna has to be filled, otherwise no bill may be transmitted to the President.
Even if the Bicameral Conference Committee is not a constitutionally organized body, it
has existed as the necessary conclave for both chambers of Congress to reconcile their
respective versions of a prospective law. The members of the Bicameral Conference
Committee may possess in them the capacity to represent their particular chamber, yet
the collective is neither the House nor the Senate. Hence, the procedure contained in
Section 26(2), Article VI cannot apply to the Bicameral Conference Committee.
Tellingly, the version approved by the Bicameral Conference Committee still undergoes
deliberation and approval by both Houses. Only one vote is taken to approve the
reconciled bill, just as only one vote is taken in order to approve the original bill.
Certainly, it could not be contended that this final version surreptitiously evades
approval of either the House or Senate.
The second front concerns the scope and limitations of the Bicameral Conference
Committee to amend, delete, or otherwise modify the bills as approved by the House and
the Senate.
Tolentino adduced the principle, adopted from American practice, that the version as
approved by the Bicameral Conference Committee need only be germane to the subject
of the House and Senate bills in order to be valid. 21 The majority, in applying the test of
germaneness, upholds the contested provisions of the E-VAT Law. Even the members of
the Court who prepared to strike down provisions of the law applying germaneness
nonetheless accept the basic premise that such test is controlling.
I agree that any amendment made by the Bicameral Conference Committee that is not
germane to the subject matter of the House or Senate Bills is not valid. It is the only valid
ground by which an amendment introduced by the Bicameral Conference Committee
may be judicially stricken.
The germaneness standard which should guide Congress or the Bicameral Conference
Committee should be appreciated in its normal but total sense. In that regard, my views
contrast with that of Justice Panganiban, who asserts that provisions that are not "legally
germane" should be stricken down. The legal notion of germaneness is just but one
component, along with other factors such as economics and politics, which guides the
Bicameral Conference Committee, or the legislature for that matter, in the enactment of
laws. After all, factors such as economics or politics are expected to cast a pervasive
influence on the legislative process in the first place, and it is essential as well to allow
such "non-legal" elements to be considered in ascertaining whether Congress has
complied with the criteria of germaneness.

Congress is a political body, and its rationale for legislating may be guided by factors
other than established legal standards. I deem it unduly restrictive on the plenary
powers of Congress to legislate, to coerce the body to adhere to judge-made standards,
such as a standard of "legal germaneness". The Constitution is the only legal standard
that Congress is required to abide by in its enactment of laws.
Following these views, I cannot agree with the position maintained by the Chief Justice,
Justices Panganiban and Azcuna that the provisions of the law that do not pertain to VAT
should be stricken as unconstitutional. These would include, for example, the provisions
raising corporate income taxes. The Bicameral Conference Committee, in evaluating the
proposed amendments, necessarily takes into account not just the provisions relating to
the VAT, but the entire revenue generating mechanism in place. If, for example,
amendments to non-VAT related provisions of the NIRC were intended to offset the
expanded coverage for the VAT, then such amendments are germane to the purpose of
the House and Senate Bills.
Moreover, it would be myopic to consider that the subject matter of the House Bill is
solely the VAT system, rather than the generation of revenue. The majority sufficiently
demonstrate that the legislative intent behind the bills that led to the E-VAT Law was the
generation of revenue to counter the country's dire fiscal situation.
The mere fact that the law is popularly known as the E-VAT Law, or that most of its
provisions pertain to the VAT, or indirect taxes, does not mean that any and all
amendments which are introduced by the Bicameral Conference Committee must pertain
to the VAT system. As the Court noted in Tatad v. Secretary of Energy: 22
[I]t is contended that section 5(b) of R.A. No. 8180 on tariff differential violates the
provision 17 of the Constitution requiring every law to have only one subject which
should be expressed in its title. We do not concur with this contention. As a policy, this
Court has adopted a liberal construction of the one title one subject rule. We have
consistently ruled that the title need not mirror, fully index or catalogue all contents and
minute details of a law. A law having a single general subject indicated in the title may
contain any number of provisions, no matter how diverse they may be, so long as they
are not inconsistent with or foreign to the general subject, and may be considered in
furtherance of such subject by providing for the method and means of carrying out the
general subject. We hold that section 5(b) providing for tariff differential is germane to
the subject of R.A. No. 8180 which is the deregulation of the downstream oil industry. The
section is supposed to sway prospective investors to put up refineries in our country and
make them rely less on imported petroleum. 23
I submit that if the amendments are attuned to the goal of revenue generation, the
stated purpose of the original House Bills, then the test of germaneness is satisfied. It
might seem that the goal of revenue generation, which is stated in virtually all tax or
tariff bills, is too encompassing in scope so as to justify the inclusion by the Bicameral
Conference Committee of just about any revenue generation measure. This may be so,
but it does not mean that the test of germaneness would be rendered inutile when it
comes to revenue laws.
I do believe that the test of germaneness was violated by the E-VAT Law in one regard.
Section 21 of the law, which was not contained in either the House or Senate Bills,

imposes restrictions on the use by local government units of their incremental revenue
from the VAT. These restrictions are alien to the principal purposes of revenue
generation, or the purposes of restructuring the VAT system. I could not see how the
provision, which relates to budgetary allocations, is germane to the E-VAT Law. Since it
was introduced only in the Bicameral Conference Committee, the test of germaneness is
essential, and the provision does not pass muster. I join Justice Puno and the Chief Justice
in voting to declare Section 21 as unconstitutional. TEcADS
I also offer this brief comment regarding the deletion of the so-called "no pass on"
provisions, which several of my colleagues deem unconstitutional. Both the House and
Senate Bills contained these provisions that would prohibit the seller/producer from
passing on the cost of the VAT payments to the consumers. However, an examination of
the said bills reveal that the "no pass on" provisions in the House Bill affects a different
subject of taxation from that of the Senate Bill. In the House Bill No. 3705, the taxpayers
who are prohibited from passing on the VAT payments are the sellers of petroleum
products and electricity/power generation companies. In Senate Bill No. 1950, no
prohibition was adopted as to sellers of petroleum products, but enjoined therein are
electricity/power generation companies but also transmission and distribution
companies.
I consider such deletions as valid, for the same reason that I deem the amendments
valid. The deletion of the two disparate "no pass on" provisions which were approved by
the House in one instance, and only by the Senate in the other, remains in the sphere of
compromise that ultimately guides the approval of the final version. Again, I point out
that even while the two provisions may have been originally approved by the House and
Senate respectively, their subsequent deletion by the Bicameral Conference Committee
is still subject to approval by both chambers of Congress when the final version is
submitted for deliberation and voting.

Moreover, the fact that the nature of the "no pass on" provisions adopted by the House
essentially differs from that of the Senate necessarily required the corrective relief from
the Bicameral Conference Committee. The Committee could have either insisted on the
House version, the Senate version, or both versions, and it is not difficult to divine that
any of these steps would have obtained easy approval. Hence, the deletion altogether of
the "no pass on" provisions existed as a tangible solution to the possible impasse, and
the Committee should be accorded leeway to implement such a compromise, especially
considering that the deletion would have remained germane to the law, and would not
be constitutionally prohibited since the prohibition on amendments under Section 26(2),
Article VI does not apply to the Committee.
An outright declaration that the deletion of the two elementally different "no-pass on"
provisions is unconstitutional, is of dubious efficacy in this case. Had such
pronouncement gained endorsement of a majority of the Court, it could not result in the
ipso facto restoration of the provision, the omission of which was ultimately approved in
both the House and Senate. Moreover, since the House version of the "no pass on" is
quite different from that of the Senate, there would be a question as to whether the
House version, the Senate version, or both versions would be reinstated. And of course,
if it were the Court which would be called upon to choose, such would be way beyond the
bounds of judicial power.

Indeed, to intimate that the Court may require Congress to reinstate a provision that
failed to meet legislative approval would result in a blatant violation of the principle of
separation of powers, with the Court effectively dictating to Congress the content of its
legislation. The Court cannot simply decree to Congress what laws or provisions to enact,
but is limited to reviewing those enactments which are actually ratified by the
legislature.
II.
My earlier views, as are the submissions I am about to offer, are rooted in nothing more
than constitutional interpretation. Perhaps my preceding discussion may lead to an
impression that I whole-heartedly welcome the passage of the E-VAT Law. Yet whatever
relief I may have over the enactment of a law designed to relieve our country's financial
woes are sadly obviated with the realization that a key amendment introduced in the law
is not only unconstitutional, but of fatal consequences. The clarion call of judicial review
is most critical when it stands as the sole barrier against the deprivation of life, liberty
and property without due process of law. It becomes even more impelling now as we are
faced with provisions of the E-VAT Law which, though in bland disguise, would operate as
the most destructive of tax measures enacted in generations.
Tax Statutes and the Due Process Clause
It is the duty of the courts to nullify laws that contravene the due process clause of the
Bill of Rights. This task is at the heart not only of judicial review, but of the democratic
system, for the fundamental guarantees in the Bill of Rights become merely hortatory if
their judicial enforcement is unavailing. Even if the void law in question is a tax statute,
or one that encompasses national economic policy, the courts should not shirk from
striking it down notwithstanding any notion of deference to the executive or legislative
branch on questions of policy. Neither Congress nor the President has the right to enact
or enforce unconstitutional laws.
The Bill of Rights is by no means the only constitutional yardstick by which the validity of
a tax law can be measured. Nonetheless, it stands as the most unyielding of
constitutional standards, given its position of primacy in the fundamental law way above
the articles on governmental power. 24 If the question lodged, for example, hinges on
the proper exercise of legislative powers in the enactment of the tax law, leeway can be
appreciated in favor of affirming the legislature's inherent power to levy taxes. On the
other hand, no quarter can be ceded, no concession yielded, on the people's
fundamental rights as enshrined in the Bill of Rights, even if the sacrifice is ostensibly
made "in the national interest." It is my understanding that "the national interests,"
however comported, always subsumes in the first place recognition and enforcement of
the Bill of Rights, which manifests where we stand as a democratic society.
The constitutional safeguard of due process is embodied in the fiat "No person shall be
deprived of life, liberty or property without due process of law". 25 The purpose of the
guaranty is to prevent governmental encroachment against the life, liberty and property
of individuals; to secure the individual from the arbitrary exercise of the powers of the
government, unrestrained by the established principles of private rights and distributive
justice; to protect property from confiscation by legislative enactments, from seizure,
forfeiture, and destruction without a trial and conviction by the ordinary mode of judicial
procedure; and to secure to all persons equal and impartial justice and the benefit of the
general law. 26

In Magnano Co. v. Hamilton, 27 the U.S. Supreme Court recognized that the due process
clause may be utilized to strike down a taxation statute, "if the act be so arbitrary as to
compel the conclusion that it does not involve an exertion of the taxing power, but
constitutes, in substance and effect, the direct exertion of a different and forbidden
power, as, for example, the confiscation of property." 28 Locally, Sison v. Ancheta 29 has
long provided sanctuary for persons assailing the constitutionality of taxing statutes. The
oft-quoted pronouncement of Justice Fernando follows:
2.The power to tax moreover, to borrow from Justice Malcolm, "is an attribute of
sovereignty. It is the strongest of all the powers of government." It is, of course, to be
admitted that for all its plenitude, the power to tax is not unconfined. There are
restrictions. The Constitution sets forth such limits. Adversely affecting as it does
property rights, both the due process and equal protection clauses may properly be
invoked, as petitioner does, to invalidate in appropriate cases a revenue measure. If it
were otherwise, there would be truth to the 1803 dictum of Chief Justice Marshall that
"the power to tax involves the power to destroy." In a separate opinion in Graves v. New
York, Justice Frankfurter, after referring to it as an "unfortunate remark," characterized it
as "a flourish of rhetoric [attributable to] the intellectual fashion of the times [allowing] a
free use of absolutes." This is merely to emphasize that it is not and there cannot be
such a constitutional mandate. Justice Frankfurter could rightfully conclude: "The web of
unreality spun from Marshall's famous dictum was brushed away by one stroke of Mr.
Justice Holmes's pen: 'The power to tax is not the power to destroy while this Court sits.'"
So it is in the Philippines.
3.This Court then is left with no choice. The Constitution as the fundamental law
overrides any legislative or executive act that runs counter to it. In any case therefore
where it can be demonstrated that the challenged statutory provision as petitioner
here alleges fails to abide by its command, then this Court must so declared and
adjudge it null. The inquiry thus is centered on the question of whether the imposition of
a higher tax rate on taxable net income derived from business or profession than on
compensation is constitutionally infirm.
4.The difficulty confronting petitioner is thus apparent. He alleges arbitrariness. A mere
allegation, as here, does not suffice. There must be a factual foundation of such
unconstitutional taint. Considering that petitioner here would condemn such a provision
as void on its face, he has not made out a case. This is merely to adhere to the
authoritative doctrine that where the due process and equal protection clauses are
invoked, considering that they are not fixed rules but rather broad standards, there is a
need for proof of such persuasive character as would lead to such a conclusion. Absent
such a showing, the presumption of validity must prevail.
5.It is undoubted that the due process clause may be invoked where a taxing statute is
so arbitrary that it finds no support in the Constitution. An obvious example is where it
can be shown to amount to the confiscation of property. That would be a clear abuse of
power. It then becomes the duty of this Court to say that such an arbitrary act amounted
to the exercise of an authority not conferred. That properly calls for the application of the
Holmes dictum. It has also been held that where the assailed tax measure is beyond the
jurisdiction of the state, or is not for a public purpose, or, in case of a retroactive statute
is so harsh and unreasonable, it is subject to attack on due process grounds. 30

Sison pronounces more concretely how a tax statute may contravene the due process
clause. Arbitrariness, confiscation, overstepping the state's jurisdiction, and lack of a
public purpose are all grounds for nullity encompassed under the due process invocation.
Yet even these more particular standards as enunciated in Sison are quite exacting, and
difficult to reach. Even the constitutional challenge posed in Sison failed to pass muster.
The ponencia cites Sison in asserting that due process and equal protection are broad
standards which need proof of such persuasive character to lead to such a conclusion.
DEICTS
It is difficult though to put into quantifiable terms how onerous a taxation statute must
be before it contravenes the due process clause. 31 After all, the inherent nature of
taxation is to cause pain and injury to the taxpayer, albeit for the greater good of society.
Perhaps whatever collective notion there may be of what constitutes an arbitrary,
confiscatory, and unreasonable tax might draw more from the fairy tale/legend traditions
of absolute monarchs and the oppressed peasants they tax. Indeed, it is easier to jump
to the conclusion that a tax is oppressive and unfair if it is imposed by a tyrant or an
authoritarian state.

But could an arbitrary, confiscatory or unreasonable tax actually be enacted by a

democratic state such as ours? Of course it could, but these would exist in more
palatable guises. In a democratic society wherein statutes are enacted by a
representative legislature only after debate and deliberation, tax statutes will most likely,
on their face, seem fair and even-handed. After all, if Congress passes a tax law that on
facial examination is obviously harsh and unfair, it faces the wrath of the voting public,
to say nothing of the media.
In testing the validity of a tax statute as against the due process clause, I think that the
Court should go beyond a facial examination of the statute, and seek to understand how
exactly it would operate. The express terms of a statute, especially tax laws, are usually
inadequate in spelling out the practical effects of its implementation. The devil is usually
in the details.
Admittedly, the degree of difficulty involved of judicial review of tax laws has increased
with the growing complexities of business, economic and accounting practices. These are
sciences which laymen are not normally equipped by their general education to fully
grasp, hence the possible insecurity on their part when confronted with these questions
on these fields.
However, we should not cede ground to those transgressions of the people's
fundamental rights simply because the mechanism employed to violate constitutional
guarantees is steeped in disciplines not normally associated with the legal profession.
Venality cannot be allowed to triumph simply due to its sophistication. This petition
imputes in the E-VAT Law unconstitutional oppression of the fatal variety, but in order to
comprehend exactly how and why that is so, one has to delve into the complex milieu of
the VAT system. The party alleging the law's unconstitutionality of course has the burden
to demonstrate the violations in understandable terms, but if such proof is presented,
the Court's duty is to engage accordingly.

The Viability of the Clear and Present

Danger Doctrine as Counterweight
To the Shibboleths of Speculation
and Wisdom
I do not see as an impediment to the annulment of a tax law the fact that it has yet to be
implemented, or the fear that doing so constitutes an undue attack on the wisdom,
rather than the legality of a statute. However, my position in this petition has been
challenged on those grounds, and I see it fit to refute these preemptive allegations
before delving into the operative aspect of the E-VAT Law.
If there is cause to characterize my arguments as speculative, it is only because the EVAT Law has yet to be implemented. No person as of yet can claim to have sustained
actual injury by reason of the implementation of the assailed provisions in G.R. No.
168461. Yet this should not mean that the Court is impotent from declaring a provision of
law as violative of the due process clause if it is clear that its implementation will cause
the illegal deprivation of life, liberty or property without due process of law. This is
especially so if, as in this case, the injury is of mathematical certainty, and the extent of
the loss quantifiable through easy reference to the most basic of business practices.
These arguments are conjectural for the same reason that the bare statement "firing a
gunshot into the head will cause a fatal wound" would be conjectural. Some people are
lucky enough to survive gunshot wounds to the head, while many others are not. Yet just
because the fear of mortality would be merely speculative, it does not mean that there
should be less compulsion to avoid a situation of getting shot in the head.
Indeed, the Court has long responded to strike down prospective actions, even if the
injury has not yet even occurred. One of the most significant legal principles of the last
century, the "clear and present danger" doctrine in free speech cases, in fact emanates
from the prospectivity, and not the actuality of danger. The Court has not been hesitant
to nullify acts which might cause injury, owing to the presence of a clear and present
danger of a substantive evil which the State has the right to prevent. It has even
extended the "clear and present danger rule" beyond the confines of freedom of
expression to the realm of freedom of religion, as noted by Justice Puno in his ponencia in
Estrada v. Escritor. 32
Justice Teodoro Padilla goes further in his concurring opinion in Basco v. PAGCOR, and
asserts that the clear and present danger test squarely applies to the due process
clause: "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."
I see no reason why the clear and present danger test cannot apply in this case, or any
case wherein a taxing statute poses a clear and present danger to the life, liberty or
property of the individual. The application of this standard frees the Court from inutility in
the face of patently unconstitutional tax laws that have been enacted but are yet to be
fully operational.
If for example, Congress deems it wise to impose the most draconian of tax measures
such as trebling the income taxes of all persons over 40, raising the gross sales tax rate
to 50%, or penalizing delinquent taxpayers with 50 lashes of the whip there certainly

would be a massive public outcry, and an expectation that the Court would immediately
nullify the offensive measures even before they are actually imposed. Applying the clear
and present danger test, the Court is empowered to strike down the noxious measures
even before they are implemented. Yet with this "bar on speculativeness" as argued by
the majority, the Court could easily refuse to pay heed to the prayers for injunctive relief,
and instead demand that the taxing subjects must first suffer before the Court can act.
In the same vein, the claim that my arguments strike at the wisdom, rather than the
constitutionality of the law are misplaced. Concededly, the assailed provisions of the EVAT law are basically unwise. But any provision of law that directly contradicts the
Constitution, especially the Bill of Rights, are similarly unwise, as they run inconsistent
with the fundamental law of the land, the enunciated state policies and the elemental
guarantees assured by the State to its people. Not every unwise law is unconstitutional,
but every unconstitutional law is unwise, for an unconstitutional law contravenes a
primordial principle or guarantee on which our polity is founded.
If it can be shown that the E-VAT Law violates these provisions of the Constitution,
especially the due process clause, then the Court should accordingly act and nullify. Such
is the essence of judicial review, which stands as the sole barrier between the
implementation of an unconstitutional law.
The Separate Opinionof Justice Panganiban notes that "[t]he Court cannot step beyond
the confines of its constitutional power, if there is absolutely no clear showing of grave
abuse of discretion in the enactment of the law" 33 . This, I feel, is an unduly narrow view
of judicial review, implying that such merely encompasses the procedural aspect by
which a law is enacted. If the policy of the law, and/or the means by which such policy is
implemented run counter to the Constitution, then the Court is empowered to strike
down the law, even if the legislative and executive branches act within their discretion in
legislating and signing the law.
It is also asserted that if the implementation of the 70% cap imposes an unequal effect
on different types of businesses with varying profit margins and capital requirements,
then the remedy would be an amendment of the law. 34 Of course, the remedy of
legislative amendment applies to even the most unconstitutional of laws. But if our
society can take cold comfort in the ability of the legislature to amend its enactments as
the defense against unconstitutional laws, what remains then as the function of judicial
review? This legislative capacity to amend unconstitutional laws runs concurrently with
the judicial capacity to strike down unconstitutional laws. In fact, the long-standing
tradition has been reliance on the judicial branch, and not the legislative branch, for
salvation from unconstitutional laws.
I do recognize that the Separate Opinion of Justice Panganiban ultimately proceeds from
the premise that the assailed provisions of the E-VAT Law may be merely unwise, but not
unconstitutional. Hence, its preference to rely on Congress to amend the offending
provisions rather than judicial nullification. But I maintain that the assailed provisions of
the E-VAT Law violate the due process clause of the Constitution and must be stricken
down.
The Nature of VAT
To understand why Sections 8 and 12 of the E-VAT law contravenes the due process
clause, it is essential to understand the nature of the value-added tax itself. Filipino

consumers may comprehend VAT at its elemental form, having been accustomed for
several years now in paying an extra 10% of the listed selling price for a wide class of
consumer goods. From the perspective of the end consumer, such as the patron who
purchases a meal from a fastfood restaurant, VAT is simply a tax on transactions
involving the sale of goods. The tax is shouldered by the buyer, and is based on a
percentage of the purchase price. Since an excise or percentage tax shares the same
characteristics, there could be some confusion as between such taxes and the VAT.
However, VAT is distinguishable from the standard excise or percentage taxes in that it is
imposable not only on the final transaction involving the end user, but on previous
stages as well so long as there was a sale involved. Thus, VAT does not simply pertain to
the extra percentage paid by the buyer of a fast-food meal, but also that paid by
restaurant itself to its suppliers of raw food products. This multi-stage system is more
acclimated to the vagaries of the modern industrial climate, which has long surpassed
the stage when there was only one level of transfer between the farmer who harvests
the crop and the person who eats the crop. Indeed, from the extraction or production of
the raw material to its final consumption by a user, several transactions or sales
materialize. The VAT system assures that the government shall reap income for every
transaction that is had, and not just on the final sale or transfer.

The European Union, which has long required its member states to apply the VAT system,
provided the following definition of the tax which I deem clear and comprehensive:
The principle of the common system of value added tax involves the application to goods
and services of a general tax on consumption exactly proportional to the price of the
goods and services, whatever the number of transactions that take place in the
production and distribution process before the stage at which tax is charged.
On each transaction, value added tax, calculated on the price of the goods or services at
the rate applicable to such goods or services, shall be chargeable after deduction of the
amount of value added tax borne directly by the various cost components. 35
The above definition alludes to a key characteristic of the VAT system, that the
imposable tax remains proportional to the price of goods and services no matter the
number of transactions that takes place.
There is another key characteristic of the VAT that no matter how many the taxable
transactions that precede the final purchase or sale, it is the end-user, or the consumer,
that ultimately shoulders the tax. Despite its name, VAT is generally not intended to be a
tax on value added, but rather as a tax on consumption. Hence, there is a mechanism in
the VAT system that enables firms to offset the tax they have paid on their own
purchases of goods and services against the tax they charge on their sales of goods and
services. 36 Section 105 of the NIRC assures that "the amount of tax may be shifted or
passed on to the buyer, transferee or lessee of the goods, properties or services." The
assailed provisions of the E-VAT law strike at the heart of this accepted principle.
And there is one final basic element of the VAT system integral to this disquisition: the
mode by which the tax is remitted to the government. In simple theory, the VAT payable
can be remitted to the government immediately upon the occurrence of the transaction,

but such a demand proves excessively unwieldy. The number of VAT covered
transactions a modern enterprise may contract in a single day, plus the recognized
principle that it is the final end user who ultimately shoulders the tax; render the
remittance of the tax on a per transaction basis impossible.
Thus, the VAT is delivered by the purchaser not directly to the government but to the
seller, who then collates the VAT received and remits it to the government every quarter.
The process may seem simple if cast in this manner, but there is a wrinkle, due to the
offsetting mechanism designed to ultimately make the end consumer bear the cost of
the VAT.
The Concepts of Input and
Output VAT
This mechanism is employed through the introduction of two concepts, the input tax and
the output tax. Section 110(A) of the National Internal Revenue Code defines the input
tax as the VAT due from or paid by a VAT-registered person on the importation of goods
or local purchase of goods and services in the course of trade or business, from a VAT
registered person.
Let us put this in operational terms. A VAT registered person, engaged in an enterprise,
necessarily purchases goods such as raw materials and machinery in order to produce
consumer goods. The purchase of such raw materials and machineries is subject to VAT,
hence the enterprise pays an additional 10% of the purchase price to the supplier as VAT.
This extra amount paid by the enterprise constitutes its input VAT. The enterprise
likewise pays input VAT when it purchases services covered by the tax, or rentals of
property.
Since VAT is a final tax that is supposed to be ultimately shouldered by the end
consumer, the VAT system allows for a mechanism by which the business is able to
recover the input VAT that it paid. This comes into play when the business, having
transformed the raw materials into consumer goods, sells these goods to the public. As
widely known, the consumer pays to the business an additional amount of 10% of the
purchase price as VAT. As to the business, this VAT payments it collects from the
consumer represents output VAT, which is formally described under Section 110(A) of the
NIRC as "the value-added tax due on the sale or lease of taxable goods or properties or
services by" by any VAT-registered person.
The output VAT collected by the business from the consumers accumulates, until the end
of every quarter, when the enterprise is obliged to remit the collected output VAT to the
government. This is where the crediting mechanism comes into play. Since the business
is entitled to recover the prepaid input VAT, it does so in every quarter by applying the
amount of prepaid input VAT against the collected output VAT which is to be remitted. If
the output VAT collected exceeds the prepaid input VAT, then the amount of input VAT is
deducted from the output VAT, and it is entitled to remit only the remainder as output
VAT to the government. To illustrate, if Business X collects P1,000,000.00 as output VAT
and incurs P500,000.00 as input VAT, the P500,000.00 is deducted from the
P1,000,000.00 output VAT, and X is required to remit only P500,000.00 of the output VAT
it collected from customers.
On the other hand, if the input VAT prepaid exceeds the output VAT collected, then the
business need not remit any amount as output VAT for the quarter. Moreover, the

difference between the input VAT and the output VAT may be credited as input VAT by
the business in the succeeding quarter. Thus, if in the First Quarter of a year, Business X
prepays P1,000,000.00 as input VAT, and collects only P500,000.00 as output VAT, it
need not remit any amount of output VAT to the government. Moreover, in the Second
Quarter, Business X can credit the remaining P500,000.00 as part of its input VAT for that
quarter. Hence, if in the Second Quarter, X actually prepays P400,000.00 as input VAT,
and collects P500,000.00 as output VAT, it may add the P500,000.00 input VAT from the
previous quarter to the P400,000.00 prepaid in the current quarter, bringing the total
input VAT it could claim to P900,000.00. Since the input VAT of P900,000.00 now exceeds
the output VAT collected of P500,000, then X need not remit any output VAT as well to
the government for the Second Quarter.
However, reality is far bleaker than that befaced by Business X. The VAT collected and
remitted is not the most relevant statistic evaluated by the business. The figure of
primary concern of the enterprise would be the profit margin, which is simply the excess
of revenue less expenditures. Revenue is derived from the gross sales of the business.
Expenditures encompass all expenses incurred by the business including overhead
expenses, wages and purchases of capital goods. Crucially, expenditures would include
the input VAT prepaid by the business on its capital expenditures.
Since a significant amount of the capital outlay incurred by a business is subjected to the
prepayment of input taxes, the necessity of recovering these losses through the output
VAT collected becomes more impelling. These output taxes are obviously proportional to
the volume of gross sales the higher the gross sales, the higher the output VAT
collected. The output taxes collected on sales answer for not only those input taxes paid
on the purchase of the raw materials, but also for the input taxes paid on the
multifarious overhead expenses covered by VAT. The burden carried by the sales volume
on the stability, if not survival of the business thus just became more crucial. The
maintenance of the proper equilibrium is not an easy matter. Increasing the selling price
of the goods sold does not necessarily increase the gross sales, as it could have the
counter-effect of repelling the consumer and diminishing the number of goods sold. At
the same time, keeping the selling price low may increase the volume of goods sold, but
not necessarily the amount of gross sales.
Profit is a chancy matter, and in cases of small to medium enterprises, usually small if
any. It is quite common for retail and distribution enterprises to incur profits of less than
1% of their gross revenues. Low profitability is not an automatic badge of poor business
skills, but a reality dictated by the laws of the marketplace. The probability of profit is
lower than that of capital expenditures, and ultimately, many business establishments
end up with a higher input tax than output tax in a given quarter. This would be
especially true for small to medium enterprises who do not reap sufficient profits from its
business in the first place, and for those firms that opt to also invest in capital expenses
in addition to the overhead. Whatever miniscule profit margins that can be obtained
usually spell the difference between life and death of the business.
The possibility of profit is further diminished by the fact that businesses have to shoulder
the input VAT in the purchase of their capital expenses. Yet the erstwhile VAT system was
not tainted by the label of oppressiveness and neither did it bear the confiscatory mode.
This was because of the immediate relief afforded from the input taxes paid by the
crediting system. In theory, VAT is not supposed to affect the profit margin. If such
margin is affected, it is only because of the prepayment of the input taxes, and this

should be remedied by the immediate recovery through the crediting system of the
settled input taxes.
The new E-VAT law changes all that, and puts in jeopardy the survival of small to medium
enterprises.
The Effects of the 70% Cap on Creditable Input VAT
The first radical shift introduced by the E-VAT law to the creditable input system the
70% cap on the creditable input tax that may be carried over into the next quarter is
provided in Section 8 of the law, which amends Section 110(A) of the NIRC,among
others. Section 110(A) as amended would now read:
Sec. 110.Tax Credits.
(B)Excess Output or Input Tax. If at the end of any taxable quarter the output tax
exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input
tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or
quarters. Provided, That the input tax inclusive of input VAT carried over from the
previous quarter that may be credited in every quarter shall not exceed seventy percent
(70%) of the output VAT: Provided, however, That any input tax attributable to zero rated
sales by a VAT-registered person may at his option be refunded or credited against other
internal revenue taxes, subject to the provisions of Section 112. (emphasis supplied)

All hope for entrepreneurial stability is dashed with the imposition of the 70% cap. Under
the E-VAT Law, the business, regardless of stability or financial capability, is obliged to
remit to the government every quarter at least 30% of the output VAT collected from
customers, or roughly 3% of the amount of gross sales. Thus, if a quarterly gross sales of
Y Business totaled P1,000,000, and Y is prudent enough to keep its capital expenses
down to P980,000, it would then appear on paper that Y incurred a profit of P20,000.
However, with the 70% cap, Y would be obliged to remit to the government P30,000,
thus wiping out the profit margin for the quarter. Y would be entitled to credit the excess
input VAT it prepaid for the next quarter, but the continuous operation of the 70% cap
obviates whatever benefits this may give, and cause the accumulation of the unutilized
creditable input VAT which should be returned to the business.
The difference is even more dramatic if seen how the unutilized creditable input VAT
accumulates over a one year period. To illustrate, Business Y prepays the following
amounts of input VAT over a one-year period: P100,000.00 First Quarter; P100,000.00
2nd Quarter; P34,000.00 3rd Quarter; and P50,000.00 4th Quarter. On the other
hand, Y collects the following amounts of output VAT from consumers: P60,000.00 First
Quarter; P60,000.00 2nd Quarter; P100,000.00 3rd Quarter; and P50,000.00 4th
Quarter. Applying the 70% cap, which would limit the amount of the declarable input VAT
to 70% in a quarter, the following results obtain, as presented in tabular form:
Particulars1st Quarter2nd Quarter3rd Quarter4th Quarter
Output VAT60,00060,000100,00050,000
Input VAT100,00034,00050,000
(Actual) +[input][input][input]
Carry Over+58,000+116,000+80,000

[excess[excess[excess
creditable]creditable]creditable]
100,000158,000150,000130,000
Declarable(60,000x70%)(60,000x70%)(100,000x70%)(50,000x70%)
Input VAT
(70% of
output VAT)42,00042,00070,00035,000
Lower of(60,000 (60,000 (100,000 (50,000
actual and42,000)42,000)70,000)35,000)
70% cap
allowable
VAT Payable18,00018,00030,00015,000
Creditable(100,000 (158,000 (150,000 (130,000
Input VAT42,000)42,000)70,000)35,000)
58,000116,00080,00095,000
This stands in contrast to same business VAT accountability under the present system,
using the same variables of output VAT and input VAT. The need to distinguish a
declarable input VAT is obviated with the elimination of the 70% cap.
Particulars1st Quarter2nd Quarter3rd Quarter4th Quarter
Output VAT60,00060,000100,00050,000
Input VAT100,00034,00050,000
(Actual) +[input][input][input]
Carry Over+40,000+80,000+14,000
[excess[excess[excess
creditable]creditable]creditable]
100,000140,000114,00050,000
VAT Payable0000
Creditable
Input VAT40,00080,00014,00014,000
The difference is dramatic, as is the impact on the business's profit margin and available
cash on hand. Under normal conditions, small to medium enterprises are already
encumbered with the likelihood of obtaining only a minimal profit margin. Without the
70% cap, those businesses would nonetheless be able to expect an immediate return on
its input taxes earlier advanced, taxes which under the VAT system it is not supposed to
shoulder in the first place. However, with the 70% cap in place, the unutilized input taxes
would continue to accumulate, and the enterprise precluded from immediate recovery
thereof. The inability to utilize these input taxes, which could spell the difference
between profit and loss, solvency and insolvency, will eventually impair, if not kill off the
enterprise.
The majority fails to consider one of the most important concepts in finance, time value
for money. 37 Simply put, the value of one peso is worth more today than in 2006.
Money that you hold today is worth more because you can invest it and earn interest. 38
By reason of the 70% cap, the amount of input VAT credit that remains unutilized would
continue accumulate for months and years. The longer the amount remains unutilized,
the higher the degree of its depreciation in value, in accordance with the concept of time

value of money. Even assuming that the business eventually recovers the input VAT
credit, the sum recovered would have decreased in practical value.
It would be sad, but fair, if a business ceases because of its inability to compete with
other businesses. It would be utter malevolence to condemn an enterprise to death
solely through the employment of a deceptive accounting wizardry. For the raison d'etre
of this 70% cap is to make it appear on paper that the government is more solvent than
it actually is. Conceding for the nonce, there is a temporary advantage gained by the
government by this 70% cap, as the steady remittance by businesses of the 30% output
VAT would assure a cash flow. Such collection may only momentarily resolve an endemic
problem in our local tax system, the problem of collection itself.
If the 70% cap was designed in order to enhance revenue collection, then I submit that
the means employed stand beyond reason. If sheer will proves insufficient in assuring
that the State all taxes due it, there should be allowable discretion for the government to
formulate creative means to enhance collection. But to do so by depriving low profit
enterprises of whatever meager income earned and consequently assuring the death of
these industries goes beyond any valid state purpose.
Only stable businesses with substantial cash flows, or extraordinarily successful
enterprises will be able to remain in operation should the 70% cap be retained. The
effect of the 70% cap is to effectively impose a tax amounting to 3% of gross revenue.
The amount may seem insignificant to those without working knowledge of the ways of
business, but anybody who is actually familiar with business would be well aware the
profit margins of the retailing and distribution sectors typically amount to less than 1% of
the gross revenues. A taxpayer has to earn a margin of at least 3% on gross revenue in
order to recoup the losses sustained due to the 70% cap. But as stated earlier, profits are
chancy, and the entrepreneur does not have full control of the conditions that lead to
profit.
Even more galling is the fact that the 70% cap, oppressive as it already is to the business
establishment, even limits the options of the business to recover the unutilized input VAT
credit. During the deliberations, the argument was raised that the problem presented by
the 70% cap was a business problem, which can only be solved by business. Yet there is
only one viable option for the enterprise to resolve the problem, and that is to increase
the selling price of goods. 39 It would be incorrect to assume that increase the volume of
the goods sold could solve the problem, since for items with the same purchasing cost,
the effect of the 70% cap remains constant regardless of an increase in volume.
But the additional burden is not limited to the increase of prices by the retailer to the end
consumer. Since VAT is a transaction tax, every level of distribution becomes subject not
only to the VAT, but also to the 70% cap. The problem increases due to a cascading
effect as the number of distribution levels increases since it will result in the collection of
an effective 3% percentage tax at every distribution level.
In analyzing the effects of the 70% cap, and appreciating how it violates the due process
clause, we should not focus solely on the end consumers. Undoubtedly, consumers will
face hardships due to the increased prices, but their threshold of physical survival, as
individual people, is significantly less than that of enterprises. Somehow, I do not think
the new E-VAT would generally deprive consumers of the bare necessities such as food,

water, shelter and clothing. There may be significant deprivation of comfort as a result,
but not of life.
The same does not hold true for businesses. The standard of "deprivation of life" of
juridical persons employs different variables than that of natural persons. What food and
water may be for persons, profit is for an enterprise the bare necessity for survival. For
businesses, the implementation of the same law, with the 70% cap and 60-month
amortization period, would mean the deprivation of profit, which is the determinative
necessity for the survival of a business.
It is easy to admonish both the consumer and the enterprise to cut back on expenditures
to survive the new E-VAT Law. However, this can be realistically expected only of the
consumer. The small/medium enterprise cannot just cut back easily on expenditures in
order to survive the implementation of the E-VAT Law. For such businesses, expenditures
do not normally contemplate unnecessary expenses such as executive perks which can
be dispensed with without injury to the enterprises. These expenditures pertain to
expenses necessary for the survival of the enterprise, such as wages, overhead and
purchase of raw materials. Those three basic items of expenditure cannot simply be
reduced, as to do so with impair the ability of the business to operate on a daily basis.
And reduction of expenditures is not the exclusive antidote to these impositions under
the E-VAT Law, as there must also be a corresponding increase in the amount of gross
sales. To do so though, would require an increase in the selling price, dampening
consumer enthusiasm, and further impairing the ability of the enterprise to recover from
the E-VAT Law. This is your basic Catch-22 40 situation no matter which means the
enterprise employs to recover from the E-VAT Law, it will still go down in flames.
Section 8 of the E-VAT law, while ostensibly even-handed in application, fails to
appreciate valid substantial distinctions between large scale enterprises and small and
medium enterprises. The latter group, owing to the limited capability for capital
investment, subsists on modest profit margins, whereas the former expects, by reason of
its substantial capital investments, a high margin. In essentially prohibiting the recovery
of small profit margins, the E-VAT law effectively sends the message that only high
margin businesses are welcome to do business in the Philippines. It stifles any
entrepreneurial ambitions of Filipinos unfortunate enough to have been born poor yet
seek a better life by sacrificing all to start a small business.

Pilipinas Shell Dealers, on whom the burden to establish the violation of due process and
equal protection lies, offers the following chart of the income statement of a typical
petroleum dealer:
QUARTERLY PROFIT AND LOSS STATEMENT
DEALER "A"
VATVAT
Price(without(with
70% cap)70% cap)
Sales/Output32,748,5343,274,853.403,274,853.40

Cost of Sales31,834,7173,183,471.70
Gross Margin913,817
Operating
Expenses
Non-vatable
items536,249
Vatable Items317,58431,758.40
Total Cost853,833
Net Profit59,984
Total Input Tax3,215,230.102,292,397.38
VAT Payable59,623.30982,456.02
Unutilized Input VAT922,832.72
* computed by multiplying output VAT by 70% [3,274,853.40 x 70% = 2,292.397.38]
The presentation of the Pilipinas Shell Dealers more or less jibes with my own
observations on the impact of the 70% cap. The dealer whose income is illustrated above
has to outlay a cash amount of P922,832.72 more than what would have been shelled
out if the 70% cap were not in place. Considering that the net profit of the dealer is only
P59,984.00, the consequences could very well be fatal, especially if these state of events
persist in succeeding quarters.
The burden of proof was on the Pilipinas Shell Dealers' to prove their allegations, and
accordingly, these figures have been duly presented to the Court for appreciation and
evaluation. Instead, the majority has shunted aside these presentations as being merely
theoretical, despite the fact that they present a clear and present danger to the very life
of our nation's enterprises. The majority's position would have been more credible had it
faced the issue squarely, and endeavored to demonstrate in like numerical fashion why
the 70% cap is not oppressive, confiscatory, or otherwise violative of the due process
clause.
Sadly, the majority refuses to confront the figures or engage in a meaningful
demonstration of how these assailed provisions truly operate. Instead, it counters with
platitudes and bromides that do not intellectually satisfy. Considering that the very
vitality, if not life of our domestic economy is at stake, I think it derelict to our duty to
block out these urgent concerns presented to the Court with blind faith tinged with
irrational Panglossian 41 optimism.
The obligation of the majority to refute on the merits the arguments of the Petroleum
Dealers becomes even more grave considering that the respondents have abjectly failed
in to convincingly dispute the claims. During oral arguments, respondents attempted to
counter the arguments that the 70% cap was oppressive and confiscatory by presenting
the following illustration, which I fear is severely misleading:
Slide 1
ItemCostVAT

Sales1,000,000.00100,000.00
Purchases800,000.0080,000.00
Due BIR without capDue BIR with 70% cap
Output VAT100,000.00Output VAT100,000.00
Actual Input VAT80,000.00Allowable Input VAT70,000.00
Net VAT Payable20,000.00Net VAT Payable30,000.00
Excess Input VAT10,000.00
Carry-over to next quarter
Slide 2
ItemCostVAT
Sales1,000,000.00100,000.00
Purchases600,000.0060,000.00
Due BIR without capDue BIR with 70% cap
Output VAT100,000.00Output VAT100,000.00
Actual Input VAT60,000.00Allowable Input VAT60,000.00
(60% of output VAT
Net VAT Payable40,000.00Net VAT Payable40,000.00
Excess Input VAT0
Carry-over to next quarter
This presentation of the respondents is grossly deceptive, as it fails to account for the
excess creditable input VAT that remains unutilized due to the 70% cap. This excess or
creditable input VAT is supposed to be carried over for the computation of the input VAT
of the next quarter. Instead, this excess or creditable input VAT magically disappears
from the table of the respondents. In their memorandum, the Pilipinas Shell Dealers
counter with their own presentation using the same variables as respondents', but taking
into account the excess creditable input VAT and extending the situation over a one-year
period. I cite with approval the following chart 42 of the Pilipinas Shell Dealers:
Slide 1
Quarter 1
Item No.CostVAT
Sales1,000,000.00100,000.00
Purchases800,000.0080,000.00
Due BIR with 70% cap
Output VAT100,000.00

Allowable Input VAT70,000.00

Net VAT Payable30,000.00

Excess Input Vat

Carry-over to next quarter10,000.00

Quarter 2
CostVAT
Sales1,000,000.00100,000.00
Purchases800,000.0080,000.00
Due BIR with 7-% cap
Output VAT100,000.00
Less: Input VAT
Excess Input VAT fr. 1st Quarter10,000.00
Input VAT-Current Qtr.80,000.00

Total Available Input VAT90,000.00

Allowable Input VAT

(100,000 x 70%)70,000.0070,000.00

Net VAT Payable30,000.00

========
Total Available Input VAT90,000.00
Allowable Input VAT70,000.00

Excess Input VAT to be carried over to next

Quarter20,000.00
========

Quarter 3
CostVAT
Sales1,000,000.00100,000.00
Purchases800,000.0080,000.00
Due BIR with 70% cap
Output VAT100,000.00
Less: Input VAT
Excess Input VAT fr. 2nd Qtr.20,000.00
Input VAT-Current Qtr.80,000.00

Total Available Input VAT100,000.00

Allowable Input VAT

(100,000 x 70%)70,000.0070,000.00

Net VAT Payable30,000.00

========
Total Available Input VAT100,000.00
Allowable Input VAT70,000.00

Excess Input VAT to be carried over to next quarter30,000.00

========
Quarter 4
CostVAT
Sales1,000,000.00100,000.00
Purchases800,000.0080,000.00
Due BIR with 70% cap
Output VAT100,000.00
Less: Input VAT
Excess Input VAT fr. 3rd Qtr.30,000.00

Input VAT-Current Qtr.80,000.00

Total Available Input VAT110,000.00

Allowable Input VAT

(100,000 x 70%)70,000.0070,000.00

Net VAT Payable30,000.00

========
Total Available Input VAT110,000.00
Allowable Input VAT70,000.00

Excess Input VAT to be carried over to next quarter40,000.00

========
The 70% cap is not merely an unwise imposition. It is a burden designed, either through
sheer heedlessness or cruel calculation, to kill off the small and medium enterprises that
are the soul, if not the heart, of our economy. It is not merely an undue taking of
property, but constitutes an unjustified taking of life as well. HcSaTI
And what legitimate, germane purposes does this lethal 70% cap serve? It certainly does
not increase the government's revenue since the unutilized creditable input VAT should
be entered in the government books as a debt payable as it is supposed to be eventually
repaid to the taxpayer, and so on the contrary it increases the government's debts. I do
see that the 70% cap temporarily allows the government to brag to the world of an
increased cash flow. But this situation would be akin to the provincial man who borrows
from everybody in the barrio in order to show off money and maintain the pretense of
prosperity to visiting city relatives. The illusion of wealth is hardly a legitimate state
purpose, especially if projected at the expense of the very business life of the country.
The majority, in an effort to belittle these concerns, points out that that the excess input
tax remains creditable in succeeding quarters. However, as seen in the above
illustration, the actual application of the excess input tax will always be limited by the
amount of output taxes collected in a quarter, as a result of the 70% cap. Thus, it is
entirely possible that a VAT-registered person, through the accumulation of unutilized
input taxes, would have in a quarter an express creditable input tax of P50,000,000, but
would be allowed to actually credit only P70,000 if the output tax collected for that
quarter were only P100,000.
The burden of the VAT may fall at first to the immediate buyers, but it is supposed to be
eventually shifted to the end-consumer. The 70% cap effectively prevents this from

happening, as it limits the ability of the business to recover the prepaid input taxes. This
is unconscionable, since in the first place, these intervening players the
manufacturers, producers, traders, retailers are not even supposed to sustain the
losses incurred by reason of the prepayment of the input taxes. Worse, they would be
obliged every quarter to pay to the government from out of their own pockets the
equivalent of 30% of the output taxes, no matter their own particular financial condition.
Worst, this twin yoke on the taxpayer of having to sustain a debit equivalent to 30% of
output taxes, and having to await forever in order to recover the prepaid taxes would
impair the cash flow and prove fatal for a shocking number of businesses which, as they
now stand, have to make do with a minimum profit that stands to be wiped out with the
introduction of the 70% cap.
Nonetheless, the majority notes that the excess creditable input tax may be the subject
of a tax credit certificate, which then could be used in payment of internal revenue
taxes, or a refund to the extent that such input taxes have not been applied against
output taxes. 43 What the majority fails to mention is that under Section 10 of the E-VAT
Law, which amends Section 112 of the NIRC, such credit or refund may not be done while
the enterprise remains operational:
SEC. 10.Section 112 of the same Code, as amended, is hereby further amended to read
as follows:
SEC. 112.Refunds or Tax Credits of Input Tax.
xxx xxx xxx
"(B)Cancellation of VAT Registration. A person whose registration has been cancelled
due to retirement from or cessation of business or due to changes or cessation of status
under Section 106(C) of this Code may, within two (2) years from the date of
cancellation, apply for the issuance of a tax credit certificate for any unused input tax
which may be used in payment of his other internal revenue taxes.
xxx xxx xxx
This stands in marked contrast to Section 112(B) of the NIRC as it read prior to this
amendment. Under the previous rule, a VAT-registered person was entitled to apply for
the tax credit certificate or refund paid on capital goods even while it remained in
operation:

SEC. 112.Refunds or Tax Credits of Input Tax.

xxx xxx xxx
"(B)Capital Goods. A VAT-registered person may apply for the issuance of a tax credit
certificate or refund of input taxes paid on capital goods imported or locally purchased,
to the extent that such input taxes have not been applied against output taxes. The
application may be made only within two (2) years after the close of the taxable quarter
when the importation or purchase was made.

This provision, which could have provided foreseeable and useful relief to the VATregistered person, was deleted under the new E-VAT Law. At present, the refund or tax
credit certificate may only be issued upon two instances: on zero-rated or effectively
zero-rated sales, and upon cancellation of VAT registration due to retirement from or
cessation of business. 44 This is the cruelest cut of all. Only after the business ceases to
be may the State be compelled to repay the entire amount of the unutilized input tax. It
is like a macabre form of sweepstakes wherein the winner is to be paid his fortune only
when he is already dead. Aanhin pa ang damo kung patay na ang kabayo.
Moreover, the inability to immediately credit or otherwise recover the unutilized input
VAT could cause such prepaid amount to actually be recognized in the accounting books
as a loss. Under international accounting practices, the unutilized input VAT due to the
70% cap would not even be recognized as a deferred asset. The same would not hold
true if the 70% cap were eliminated. Under the International Accounting Standards 45 ,
the unutilized input VAT credit is recognized as an asset "to the extent that it is probable
that future taxable profit will be available against which the unused tax losses and
unused tax credits can be utili[z]ed" 46 Thus, if the immediate accreditation of the input
VAT credit can be obtained, as it would without the 70% cap, the asset could be
recognized.
However, the same Standards hold that "[t]o the extent that it is not probable that
taxable profit will be available against which the unused tax losses or unused tax credits
can be utili[z]ed, the deferred tax asset is not recogni[z]ed". 47 As demonstrated, the
continuous operation of the 70% cap precludes the recovery of input VAT prepaid months
or years prior. Moreover, the inability to claim a refund or tax credit certificate until after
the business has already ceased virtually renders it improbable for the input VAT to be
recovered. As such, under the International Accounting Standards, it is with all likelihood
that the prepaid input VAT, ostensibly creditable, would actually be reflected as a loss. 48
What heretofore was recognized as an asset would now, with the imposition of the 70%
cap, be now considered as a loss, enhancing the view that the 70% cap is ultimately
confiscatory in nature.
This leads to my next point. The majority asserts that the input tax is not a property or
property right within the purview of the due process clause. 49 I respectfully but strongly
disagree.
Tellingly, the BIR itself has recognized that unutilized input VAT is one of those assets,
corporate attributes or property rights that, in the event of a merger, are transferred to
the surviving corporation by operation of law. 50 Assets would fall under the purview of
property under the due process clause, and if the taxing arm of the State recognizes that
such property belongs to the taxpayer and not to the State, then due respect should be
given to such expert opinion.
Even under the International Accounting Standards I adverted to above, the unutilized
input VAT credit is may be recognized as an asset "to the extent that it is probable that
future taxable profit will be available against which the unused tax losses and unused
tax credits can be utili[z]ed" 51 If not probable, it would be recognized as a loss. 52 Since
these international standards, duly recognized by the Securities and Exchange
Commission as controlling in this jurisdiction, attribute tangible gain or loss to the VAT
credit, it necessarily follows that there is proprietary value attached to such gain or loss.

Moreover, the prepaid input tax represents unutilized profit, which can only be utilized if
it is refunded or credited to output taxes. To assert that the input VAT is merely a
privilege is to correspondingly claim that the business profit is similarly a mere privilege.
The Constitution itself recognizes the right to profit by private enterprises. As I stated
earlier, one of the enunciated State policies under the Constitution is the recognition of
the indispensable role of the private sector, the encouragement of private enterprise,
and the provision of incentives to needed investments. 53 Moreover, the Constitution
also requires the State to recognize the right of enterprises to reasonable returns on
investments, and to expansion and growth. 54 This, I believe, encompasses profit.
60-Month Amortization Period
Another portion of Section 8 of the E-VAT Law is unconstitutional, essentially for the same
reasons as above. The relevant portion reads:
SEC. 8.Section 110 of the same Code, as amended, is hereby further amended to read as
follows:
"SEC. 110.Tax Credits.
(A)Creditable Input Tax.
xxx xxx xxx
Provided, That the input tax on goods purchased or imported in a calendar month for use
in trade or business for which deduction for depreciation is allowed under this Code, shall
be spread evenly over the month of acquisition and the fifty-nine (59) succeeding
months if the aggregate acquisition cost for such goods, excluding the VAT component
thereof, exceeds One million pesos (P1,000,000): Provided, however, That if the
estimated useful life of the capital good is less than five (5) years, as used for
depreciation purposes, then the input VAT shall be spread over such a shorter period:
Provided, finally, that in the case of purchase of services, lease or use of properties, the
input tax shall be creditable to the purchaser, lessee or licensee upon payment of the
compensation, rental, royalty or fee.
Again, this provision unreasonably severely limits the ability of an enterprise to recover
its prepaid input VAT. On its face, it might appear injurious primarily to high margin
enterprises, whose purchase of capital goods in a given quarter would routinely exceed
P1,000,000.00. The amortization over a five-year period of the input VAT on these capital
goods would definitely eat up into their profit margin. But it is still possible for such big
businesses to survive despite this new restriction, and their financial pain alone may not
be sufficient to cause the invalidity of a taxing statute.
However, this amortization plan will prove especially fatal to start-ups and other new
businesses, which need to purchase capital goods in order to start up their new
businesses. It is a known fact in the financial community that a majority of businesses
start earning profit only after the second or third year, and many enterprises do not even
get to survive that long. The first few years of a business are the most crucial to its
survival, and any financial benefits it can obtain in those years, no matter how miniscule,
may spell the difference between life and death. For such emerging businesses, it is
already difficult under the present system to recover the prepaid input VAT from the
output VAT collected from customers because initial sales volumes are usually low. With

this further limitation, diminishing as it does any opportunity to have a sustainable cash
flow, the ability of new businesses to survive the first three years becomes even more
endangered.
Even existing small to medium enterprises are imperiled by this 60 month amortization
restriction, especially considering the application of the 70% cap. The additional
purchase of capital goods bears as a means of adding value to the consumer good, as a
means to justify the increased selling price. However, the purchase of capital goods in
excess of P1,000,000.00 would impose another burden on the small to medium
enterprise by further restricting their ability to immediately recover the entire prepaid
input VAT (which would exceed at least P100,000.00), as they would be compelled to
wait for at least five years before they can do so. Another hurdle is imposed for such
small to medium enterprise to obtain the profit margin critical to survival. For some lucky
enterprises who may be able to survive the injury brought about by the 70% cap, this 60
month amortization period might instead provide the mortal head wound.
Moreover, the increased administrative burden on the taxpayer should not be
discounted, considering this Court's previous recognition of the aims of the VAT system
to "rationalize the system of taxes on goods and services, [and] simplify tax
administration". 55 With the amortization requirement, the taxpayer would be forced to
segregate assets into several classes and strictly monitor the useful life of assets so that
proper classification can be made. The administrative requirements of the taxpayer in
order to monitor the input VAT from the purchase of capital assets thus has exponentially
increased.
5% Withholding VAT on Sales
Pilipinas Shell Dealers argue that Section 12 of the E-VAT law, which amends Section
114(C) of the NIRC,is also unconstitutional. The provision is supremely unwise,
oppressive and confiscatory in nature, and ruinous to private enterprise and even State
development. The provision reads:
SEC. 12.Section 114 of the same Code, as amended, is hereby further amended to read
as follows:
"SEC. 114.Return and Payment of Value-Added Tax.
xxx xxx xxx
"(C)Withholding of Value-added Tax. The Government or any of its political
subdivisions, instrumentalities or agencies, including government-owned or controlled
corporations (GOCCs) shall, before making payment on account of each purchase of
goods and services which are subject to the value-added tax imposed in Sections 106
and 108 of this Code, deduct and withhold a final value-added tax at the rate of five
percent (5%) of the gross payment thereof: Provided, That the payment for lease or use
of properties or property rights to nonresident owners shall be subject to ten percent
(10%) withholding tax at the time of payment. For purposes of this Section, the payor or
person in control of the payment shall be considered as the withholding payment. . . .

The principle that the Government and its subsidiaries may deduct and withhold a final
value-added tax on its purchase of goods and services is not new, as the NIRC had
allowed such deduction and withholding at the rate of 3% of the gross payment for the
purchase of goods, and 6% of the gross receipts for services. However, the NIRC had also
provided that this tax withheld would also be creditable against the VAT liability of the
seller or contractor, a mechanism that was deleted by the E-VAT law. The deletion of this
credit apparatus effectively compels the private enterprise transacting with the
government to shoulder the output VAT that should have been paid by the government
in excess of 5% of the gross selling price, and at the same time unduly burdens the
private enterprise by precluding it from applying any creditable input VAT on the same
transaction.
Notably, the removal of the credit mechanism runs contrary to the essence of the VAT
system, which characteristically allows the crediting of input taxes against output taxes.
Without such crediting mechanism, which allows the shifting of the VAT to only the final
end user, the tax becomes a straightforward tax on business or income. The effect on
the enterprise doing business with the government would be that two taxes would be
imposed on the income by the business derived on such transaction: the regular
personal or corporate income tax on such income, and this final withholding tax of 5%.
Granted that Congress is not bound to adopt with strict conformity the VAT system, and
that it has to power to impose new taxes on business income, this amendment to Section
114(C) of the NIRC still remains unconstitutional. It unfairly discriminates against entities
which contract with the government by imposing an additional tax on the income derived
from such transactions. The end result of such discrimination is double taxation on
income that is both oppressive and confiscatory.
It is a legitimate purpose of a tax law to devise a manner by which the government could
save money on its own transactions, but it is another matter if a private enterprise is
punished for doing business with the government. The erstwhile NIRC worked towards
such advantage, by allowing the government to reduce its cash outlay on purchases of
goods and services by withholding the payment of a percentage thereof. While the new
E-VAT law retains this benefit to the government, at the same time it burdens the private
enterprise with an additional tax by refusing to allow the crediting of this tax withheld to
the business's input VAT.
This imposition would be grossly unfair for private entities that transact with the
government, especially on a regular basis. It might be argued that the provision, even if
concededly unwise, nonetheless fails to meet the standard of unconstitutionality, as it
affects only those persons or establishments that choose to do business with the
government. However, it is an acknowledged fact that the government and its
subsidiaries rely on contracts with private enterprises in order to be able to carry out
innumerable functions of the State. This provision effectively discourages private
enterprises to do business with the State, as it would impose on the business a higher
rate of tax if it were to transact with the State, as compared to transactions with other
private entities.
Established industries with track records of quality performance could very well be
dissuaded from doing further business with government entities as the higher tax rate
would make no economic sense. Only those enterprises which really need the money,
such as those with substandard track records that have affected their viability in the

marketplace, would bother seeking out government contracts. The corresponding

sacrifice in quality would eventually prove detrimental to the State. Our society can ill
afford shoddy infrastructures such as roads, bridges and buildings that would
unnecessarily pose danger to the public at large simply because the government wanted
to skimp on expenses.
The provision squarely contradicts Section 20, Article II of the Constitution as it
vacuously discourages private enterprise, and provides disincentives to needed
investments such as those expected by the State from private businesses. Whatever
advantages may be gained by the temporary increase in the government coffers would
be overturned by the disadvantages of having a reduced pool of private enterprises
willing to do business with the government. Moreover, since government contracts with
private enterprises will still remain a necessary fact of life, the amendment to Section
114(C) of the NIRC introduced by the E-VAT Law.
Double taxation means taxing for the same tax period the same thing or activity twice,
when it should be taxed but once, for the same purpose and with the same kind of
character of tax. 56 Double taxation is not expressly forbidden in our constitution,but the
Court has recognized it as obnoxious "where the taxpayer is taxed twice for the benefit
of the same governmental entity or by the same jurisdiction for the same purpose." 57
Certainly, both the 5% final tax withheld and the general corporate income tax are both
paid for the benefit of the national government, and for the same incidence of taxation,
the sale/lease of goods and services to the government.
The Court, in Re: Request of Atty. Bernardo Zialcita 58 had cause to make the following
observation I submit apropos to the case at bar, on double taxation in a case involving
the attempt of the BIR to tax the commuted accumulated leave credits of a government
lawyer upon his retirement:
Section 284 of the Revised Administrative Code grants to a government employee 15
days vacation leave and 15 days sick leave for every year of service. Hence, even if the
government employee absents himself and exhausts his leave credits, he is still deemed
to have worked and to have rendered services. His leave benefits are already imputed in,
and form part of, his salary which in turn is subject to withholding tax on income. He is
taxed on the entirety of his salaries without any deductions for any leaves not utilized. It
follows then that the money values corresponding to these leave benefits both the used
and unused have already been taxed during the year that they were earned. To tax them
again when the retiring employee receives their money value as a form of government
concern and appreciation plainly constitutes an attempt to tax the employee a second
time. This is tantamount to double taxation. 59
Conclusions
The VAT system, in itself, is intelligently designed, and stands as a fair means to raise
revenue. It has been adopted worldwide by countries hoping to employ an efficient
means of taxation. The concerns I have raised do not detract from my general approval
of the VAT system.
I do lament though that our government's wholehearted adoption of the VAT system is
endemic of what I deem a flaw in our national tax policy in the last few decades. The
power of taxation, inherent in the State and ever so powerful, has been generally
employed by our financial planners for a solitary purpose: the raising of revenue.

Revenue generation is a legitimate purpose of taxation, but standing alone, it is a

woefully unsophisticated design. Intelligent tax policy should extend beyond the singularminded goal of raising State funds the old-time philosophy behind the taxing schemes
of war-mongering monarchs and totalitarian states and should sincerely explore the
concept of taxation as a means of providing genuine incentives to private enterprise to
spur economic growth; of promoting egalitarian social justice that would allow everyone
to their fair share of the nation's wealth.
Instead, we are condemned by a national policy driven by the monomania for State
revenue. It may be beyond my oath as a Justice to compel the government to adopt an
economic policy in consonance with my personal views, but I offer these observations
since they lie at the very heart of the noxiousness of the assailed provisions of the E-VAT
law. The 70% cap, the 60-month amortization period and the 5% withholding tax on
government transactions were selfishly designed to increase government revenue at the
expense of the survival of local industries.
I am not insensitive to the concerns raised by the respondents as to the dire
consequences to the economy should the E-VAT law be struck down. I am aware that the
granting of the petition in G.R. No. 168461 will negatively affect the cash flow of the
government. If that were the only relevant concern at stake, I would have no problems
denying the petition. Unfortunately, under the device employed in the E-VAT law, the
price to be paid for a more sustainable liquidity of the government's finances will be the
death of local business, and correspondingly, the demise of our society. It is a measure
just as draconian as the standard issue taxes of medieval tyrants.
I am not normally inclined towards the language of the overwrought, yet if the sky were
indeed truly falling, how else could that fact be communicated. The E-VAT Law is of
multiple fatal consequences. How are we to survive as a nation without the bulwark of
private industries? Perhaps the larger scale, established businesses may ultimately
remain standing, but they will be unable to sustain the void left by the demise of small to
medium enterprises. Or worse, domestic industry would be left in the absolute control of
monopolies, combines or cartels, whether dominated by foreigners or local oligarchs. The
destruction of subsisting industries would be bad enough, the destruction of opportunity
and the entrepreneurial spirit would be even more grievous and tragic, as it would mark
as well the end of hope. Taxes may be the lifeblood of the state, but never at the
expense of the life of its subjects.
Accordingly, I VOTE to:
1)DENY the Petitions in G.R. Nos. 168056, 168207, and 168730 for lack of merit;

2)PARTIALLY GRANT the Petition in G.R. Nos. 168463 and declare Section 21 of the E-VAT
Law as unconstitutional;
3)GRANT the Petition in G.R. No. 168461 and declare as unconstitutional Section 8 of
Republic Act No. 9337, insofar as it amends Section 110(A) and (B) of the National
Internal Revenue Code (NIRC)as well as Section 12 of the same law, with respect to its
amendment of Section 114(C) of the NIRC. DHaECI

CHICO-NAZARIO, J., concurring opinion:

Five petitions were filed before this Court questioning the constitutionality of Republic Act
No. 9337. Rep. Act No. 9337, which amended certain provisions of the National Internal
Revenue Code of 1997, 1 by essentially increasing the tax rates and expanding the
coverage of the Value-Added Tax (VAT). Undoubtedly, during these financially difficult
times, more taxes would be additionally burdensome to the citizenry. However, like a
bitter pill, all Filipino citizens must bear the burden of these new taxes so as to raise the
much-needed revenue for the ailing Philippine economy. Taxation is the indispensable
and inevitable price for a civilized society, and without taxes, the government would be
paralyzed. 2 Without the tax reforms introduced by Rep. Act No. 9337, the then
Secretary of the Department of Finance, Cesar V. Purisima, assessed that "all economic
scenarios point to the National Government's inability to sustain its precarious fiscal
position, resulting in severe erosion of investor confidence and economic stagnation." 3
Finding Rep. Act No. 9337 as not unconstitutional, both in its procedural enactment and
in its substance, I hereby concur in full in the foregoing majority opinion, penned by my
esteemed colleague, Justice Ma. Alicia Austria-Martinez.
According to petitioners, the enactment of Rep. Act No. 9337 by Congress was riddled
with irregularities and violations of the Constitution. In particular, they alleged that: (1)
The Bicameral Conference Committee exceeded its authority to merely settle or
reconcile the differences among House Bills No. 3555 and 3705 and Senate Bill No. 1950,
by including in Rep. Act No. 9337 provisions not found in any of the said bills, or deleting
from Rep. Act No. 9337 or amending provisions therein even though they were not in
conflict with the provisions of the other bills; (2) The amendments introduced by the
Bicameral Conference Committee violated Article VI, Section 26(2), of the Constitution
which forbids the amendment of a bill after it had passed third reading; and (3) Rep. Act
No. 9337 contravened Article VI, Section 24, of the Constitution which prescribes that
revenue bills should originate exclusively from the House of Representatives.
Invoking the expanded power of judicial review granted to it by the Constitution of 1987,
petitioners are calling upon this Court to look into the enactment of Rep. Act No. 9337 by
Congress and, consequently, to review the applicability of the enrolled bill doctrine in this
jurisdiction. Under the said doctrine, the enrolled bill, as signed by the Speaker of the
House of Representatives and the Senate President, and certified by the Secretaries of
both Houses of Congress, shall be conclusive proof of its due enactment. 4
Petitioners' arguments failed to convince me of the wisdom of abandoning the enrolled
bill doctrine. I believe that it is more prudent for this Court to remain conservative and to
continue its adherence to the enrolled bill doctrine, for to abandon the said doctrine
would be to open a Pandora's Box, giving rise to a situation more fraught with evil and
mischief. Statutes enacted by Congress may not attain finality or conclusiveness unless
declared so by this Court. This would undermine the authority of our statutes because
despite having been signed and certified by the designated officers of Congress, their
validity would still be in doubt and their implementation would be greatly hampered by
allegations of irregularities in their passage by the Legislature. Such an uncertainty in the
statutes would indubitably result in confusion and disorder. In all probability, it is the
contemplation of such a scenario that led an American judge to proclaim, thus

. . . Better, far better, that a provision should occasionally find its way into the statute
through mistake, or even fraud, than, that every Act, state and national, should at any
and all times be liable to put in issue and impeached by the journals, loose papers of the
Legislature, and parol evidence. Such a state of uncertainty in the statute laws of the
land would lead to mischiefs absolutely intolerable. . . . 5
Moreover, this Court must attribute good faith and accord utmost respect to the acts of a
co-equal branch of government. While it is true that its jurisdiction has been expanded
by the Constitution, the exercise thereof should not violate the basic principle of
separation of powers. The expanded jurisdiction does not contemplate judicial
supremacy over the other branches of government. Thus, in resolving the procedural
issues raised by the petitioners, this Court should limit itself to a determination of
compliance with, or conversely, the violation of a specified procedure in the Constitution
for the passage of laws by Congress, and not of a mere internal rule of proceedings of its
Houses.
It bears emphasis that most of the irregularities in the enactment of Rep. Act No. 9337
concern the amendments introduced by the Bicameral Conference Committee. The
Constitution is silent on such a committee, it neither prescribes the creation thereof nor
does it prohibit it. The creation of the Bicameral Conference Committee is authorized by
the Rules of both Houses of Congress. That the Rules of both Houses of Congress provide
for the creation of a Bicameral Conference Committee is within the prerogative of each
House under the Constitution to determine its own rules of proceedings. TADIHE
The Bicameral Conference Committee is a creation of necessity and practicality
considering that our Congress is composed of two Houses, and it is highly improbable
that their respective bills on the same subject matter shall always be in accord and
consistent with each other. Instead of all their members, only the appointed
representatives of both Houses shall meet to reconcile or settle the differences in their
bills. The resulting bill from their meetings, embodied in the Bicameral Conference
Report, shall be subject to approval and ratification by both Houses, voting separately.
It does perplex me that members of both Houses would again ask the Court to define
and limit the powers of the Bicameral Conference Committee when such committee is of
their own creation. In a number of cases, 6 this Court already made a determination of
the extent of the powers of the Bicameral Conference Committee after taking into
account the existing Rules of both Houses of Congress. In gist, the power of the
Bicameral Conference Committee to reconcile or settle the differences in the two Houses'
respective bills is not limited to the conflicting provisions of the bills; but may include
matters not found in the original bills but germane to the purpose thereof. If both Houses
viewed the pronouncement made by this Court in such cases as extreme or beyond what
they intended, they had the power to amend their respective Rules to clarify or limit
even further the scope of the authority which they grant to the Bicameral Conference
Committee. Petitioners' grievance that, unfortunately, they cannot bring about such an
amendment of the Rules on the Bicameral Conference Committee because they are
members of the minority, deserves scant consideration. That the majority of the
members of both Houses refuses to amend the Rules on the Bicameral Conference
Committee is an indication that it is still satisfied therewith. At any rate, this is how
democracy works the will of the majority shall be controlling.

Worth reiterating herein is the concluding paragraph in Arroyo v. De Venecia, 7 which

reads
It would be unwarranted invasion of the prerogative of a coequal department for this
Court either to set aside a legislative action as void because the Court thinks the house
has disregarded its own rules of procedure, or to allow those defeated in the political
arena to seek a rematch in the judicial forum when petitioners can find remedy in that
department. The Court has not been invested with a roving commission to inquire into
complaints, real or imagined, of legislative skullduggery. It would be acting in excess of
its power and would itself be guilty of grave abuse of its discretion were it to do so. . . .
Present jurisprudence allows the Bicameral Conference Committee to amend, add, and
delete provisions of the Bill under consideration, even in the absence of conflict thereon
between the Senate and House versions, but only so far as said provisions are germane
to the purpose of the Bill. 8 Now, there is a question as to whether the Bicameral
Conference Committee, which produced Rep. Act No. 9337, exceeded its authority when
it included therein amendments of provisions of the National Internal Revenue Code of
1997 not related to VAT.
Although House Bills No. 3555 and 3705 were limited to the amendments of the
provisions on VAT of the National Internal Revenue Code of 1997, Senate Bill No. 1950
had a much wider scope and included amendments of other provisions of the said Code,
such as those on income, percentage, and excise taxes. It should be borne in mind that
the very purpose of these three Bills and, subsequently, of Rep. Act No. 9337, was to
raise additional revenues for the government to address the dire economic situation of
the country. The National Internal Revenue Code of 1997, as its title suggests, is the
single Code that governs all our national internal revenue taxes. While it does cover
different taxes, all of them are imposed and collected by the national government to
raise revenues. If we have one Code for all our national internal revenue taxes, then
there is no reason why we cannot have a single statute amending provisions thereof
even if they involve different taxes under separate titles. I hereby submit that the
amendments introduced by the Bicameral Conference Committee to non-VAT provisions
of the National Internal Revenue Code of 1997 are not unconstitutional for they are
germane to the purpose of House Bills No. 3555 and 3705 and Senate Bill No. 1950,
which is to raise national revenues.

Furthermore, the procedural issues raised by the petitioners were already addressed and
resolved by this Court in Tolentino v. Executive Secretary. 9 Since petitioners failed to
proffer novel factual or legal argument in support of their positions that were not
previously considered by this Court in the same case, then I am not compelled to depart
from the conclusions made therein.
The majority opinion has already thoroughly discussed each of the substantial issues
raised by the petitioners. I would just wish to discuss additional matters pertaining to the
petition of the petroleum dealers in G.R. No. 168461.
They claim that the provision of Rep. Act No. 9337 limiting their input VAT credit to only
70% of their output VAT deprives them of their property without due process of law. They
argue further that such 70% cap violates the equal protection and uniformity of taxation

clauses under Article III, Section 1, and Article VI, Section 28(1), respectively, of the
Constitution, because it will unduly prejudice taxpayers who have high input VAT and
who, because of the cap, cannot fully utilize their input VAT as credit.
I cannot sustain the petroleum dealers' position for the following reasons
First, I adhere to the view that the input VAT is not a property to which the taxpayer has
vested rights. Input VAT consists of the VAT a VAT-registered person had paid on his
purchases or importation of goods, properties, and services from a VAT-registered
supplier; more simply, it is VAT paid. It is not, as averred by petitioner petroleum dealers,
a property that the taxpayer acquired for valuable consideration. 10 A VAT-registered
person incurs input VAT because he complied with the National Internal Revenue Code of
1997, which imposed the VAT and made the payment thereof mandatory; and not
because he paid for it or purchased it for a price. DHITSc
Generally, when one pays taxes to the government, he cannot expect any direct and
concrete benefit to himself for such payment. The benefit of payment of taxes shall
redound to the society as a whole. However, by virtue of Section 110(A) of the National
Internal Revenue Code of 1997, prior to its amendment by Rep. Act No. 9337, a VATregistered person is allowed, subject to certain substantiation requirements, to credit his
input VAT against his output VAT.
Output VAT is the VAT imposed by the VAT-registered person on his own sales of goods,
properties, and services or the VAT he passes on to his buyers. Hence, the VAT-registered
person selling the goods, properties, and services does not pay for the output VAT; said
output VAT is paid for by his consumers and he only collects and remits the same to the
government.
The crediting of the input VAT against the output VAT is a statutory privilege, granted by
Section 110 of the National Internal Revenue Code of 1997. It gives the VAT-registered
person the opportunity to recover the input VAT he had paid, so that, in effect, the input
VAT does not constitute an additional cost for him. While it is true that input VAT credits
are reported as assets in a VAT-registered person's financial statements and books of
account, this accounting treatment is still based on the statutory provision recognizing
the input VAT as a credit. Without Section 110 of the National Internal Revenue Code of
1997, then the accounting treatment of any input VAT will also change and may no
longer be booked outright as an asset. Since the privilege of an input VAT credit is
granted by law, then an amendment of such law may limit the exercise of or may totally
withdraw the privilege.
The amendment of Section 110 of the National Internal Revenue Code of 1997 by Rep.
Act No. 9337, which imposed the 70% cap on input VAT credits, is a legitimate exercise
by Congress of its law-making power. To say that Congress may not trifle with Section
110 of the National Internal Revenue Code of 1997 would be to violate a basic precept of
constitutional law that no law is irrepealable. 11 There can be no vested right to the
continued existence of a statute, which precludes its change or repeal. 12
It bears to emphasize that Rep. Act No. 9337 does not totally remove the privilege of
crediting the input VAT against the output VAT. It merely limits the amount of input VAT
one may credit against his output VAT per quarter to an amount equivalent to 70% of the
output VAT. What is more, any input VAT in excess of the 70% cap may be carried-over to

the next quarter. 13 It is certainly a departure from the VAT crediting system under
Section 110 of the National Internal Revenue Code of 1997, but it is an innovation that
Congress may very well introduce, because
VAT will continue to evolve from its pioneering original structure. Dynamically, it will be
subjected to reforms that will make it conform to many factors, among which are: the
changing requirements of government revenue; the social, economic and political
vicissitudes of the times; and the conflicting interests in our society. In the course of its
evolution, it will be injected with some oddities and inevitably transformed into a
structure which its revisionists believe will be an improvement overtime. 14
Second, assuming for the sake of argument, that the input VAT credit is indeed a
property, the petroleum dealers' right thereto has not vested. A right is deemed vested
and subject to constitutional protection when
". . . [T]he right to enjoyment, present or prospective, has become the property of some
particular person or persons as a present interest. The right must be absolute, complete,
and unconditional, independent of a contingency, and a mere expectancy of future
benefit, or a contingent interest in property founded on anticipated continuance of
existing laws, does not constitute a vested right. So, inchoate rights which have not been
acted on are not vested." (16 C. J. S. 214-215) 15
Under the National Internal Revenue Code of 1997, before it was amended by Rep. Act
No. 9337, the sale or importation of petroleum products were exempt from VAT, and
instead, were subject to excise tax. 16 Petroleum dealers did not impose any output VAT
on their sales to consumers. Since they had no output VAT against which they could
credit their input VAT, they shouldered the costs of the input VAT that they paid on their
purchases of goods, properties, and services. Their sales not being subject to VAT, the
petroleum dealers had no input VAT credits to speak of.
It is only under Rep. Act No. 9337 that the sales by the petroleum dealers have become
subject to VAT and only in its implementation may they use their input VAT as credit
against their output VAT. While eager to use their input VAT credit accorded to it by Rep.
Act No. 9337, the petroleum dealers reject the limitation imposed by the very same law
on such use.
It should be remembered that prior to Rep. Act No. 9337, the petroleum dealers' input
VAT credits were inexistent they were unrecognized and disallowed by law. The
petroleum dealers had no such property called input VAT credits. It is only rational,
therefore, that they cannot acquire vested rights to the use of such input VAT credits
when they were never entitled to such credits in the first place, at least, not until Rep.
Act No. 9337.
My view, at this point, when Rep. Act No. 9337 has not yet even been implemented, is
that petroleum dealers' right to use their input VAT as credit against their output VAT
unlimitedly has not vested, being a mere expectancy of a future benefit and being
contingent on the continuance of Section 110 of the National Internal Revenue Code of
1997, prior to its amendment by Rep. Act No. 9337.

Third, although the petroleum dealers presented figures and computations to support
their contention that the cap shall lead to the demise of their businesses, I remain
unconvinced.
Rep. Act No. 9337, while imposing the 70% cap on input VAT credits, allows the taxpayer
to carry-over to the succeeding quarters any excess input VAT. The petroleum dealers
presented a situation wherein their input VAT would always exceed 70% of their output
VAT, and thus, their excess input VAT will be perennially carried-over and would remain
unutilized. Even though they consistently questioned the 70% cap on their input VAT
credits, the petroleum dealers failed to establish what is the average ratio of their input
VAT vis- -vis their output VAT per quarter. Without such fact, I consider their objection to
the 70% cap arbitrary because there is no basis therefor.
On the other, I find that the 70% cap on input VAT credits was not imposed by Congress
arbitrarily. Members of the Bicameral Conference Committee settled on the said
percentage so as to ensure that the government can collect a minimum of 30% output
VAT per taxpayer. This is to put a VAT-taxpayer, at least, on equal footing with a VATexempt taxpayer under Section 109(V) of the National Internal Revenue Code,as
amended by Rep. Act No. 9337. 17 The latter taxpayer is exempt from VAT on the basis
that his sale or lease of goods or properties or services do not exceed P1,500,000;
instead, he is subject to pay a three percent (3%) tax on his gross receipts in lieu of the
VAT. 18 If a taxpayer with presumably a smaller business is required to pay three percent
(3%) gross receipts tax, a type of tax which does not even allow for any crediting, a VATtaxpayer with a bigger business should be obligated, likewise, to pay a minimum of 30%
output VAT (which should be equivalent to 3% of the gross selling price per good or
property or service sold). The cap assures the government a collection of at least 30%
output VAT, contributing to an improved cash flow for the government. cIACaT
Attention is further called to the fact that the output VAT is the VAT imposed on the sales
by a VAT-taxpayer; it is paid by the purchasers of the goods, properties, and services,
and merely collected through the VAT-registered seller. The latter, therefore, serves as a
collecting agent for the government. The VAT-registered seller is merely being required to
remit to the government a minimum of 30% of his output VAT collection.

Fourth, I give no weight to the figures and computations presented before this Court by
the petroleum dealers, particularly the supposed quarterly profit and loss statement of a
"typical dealer." How these data represent the financial status of a typical dealer, I would
not know when there was no effort to explain the manner by which they were surveyed,
collated, and averaged out. Without establishing their source therefor, the figures and
computations presented by the petroleum dealers are merely self-serving and
unsubstantiated, deserving scant consideration by this Court. Even assuming that these
figures truly represent the financial standing of petroleum dealers, the introduction and
application thereto of the VAT factor, which forebode the collapse of said petroleum
dealers' businesses, would be nothing more than an anticipated damage an injury that
may or may not happen. To resolve their petition on this basis would be premature and
contrary to the established tenet of ripeness of a cause of action before this Court could
validly exercise its power of judicial review.

Fifth, in response to the contention of the petroleum dealers during oral arguments
before this Court that they cannot pass on to the consumers the VAT burden and
increase the prices of their goods, it is worthy to quote below this Court's ruling in
Churchill v. Concepcion, 19 to wit
It will thus be seen that the contention that the rates charged for advertising cannot be
raised is purely hypothetical, based entirely upon the opinion of the plaintiffs,
unsupported by actual test, and that the plaintiffs themselves admit that a number of
other persons have voluntarily and without protest paid the tax herein complained of.
Under these circumstances, can it be held as a matter of fact that the tax is confiscatory
or that, as a matter of law, the tax is unconstitutional? Is the exercise of the taxing power
of the Legislature dependent upon and restricted by the opinion of two interested
witnesses? There can be but one answer to these questions, especially in view of the fact
that others are paying the tax and presumably making reasonable profit from their
business.
As a final observation, I perceive that what truly underlies the opposition to Rep. Act No.
9337 is not the question of its constitutionality, but rather the wisdom of its enactment.
Would it truly raise national revenue and benefit the entire country, or would it only
increase the burden of the Filipino people? Would it contribute to a revival of our
economy or only contribute to the difficulties and eventual closure of businesses? These
are issues that we cannot resolve as the Supreme Court. As this Court explained in
Agustin v. Edu, 20 to wit
It does appear clearly that petitioner's objection to this Letter of Instruction is not
premised on lack of power, the justification for a finding of unconstitutionality, but on the
pessimistic, not to say negative, view he entertains as to its wisdom. That approach, it
put it at its mildest, is distinguished, if that is the appropriate word, by its unorthodoxy. It
bears repeating "that this Court, in the language of Justice Laurel, 'does not pass upon
questions of wisdom, justice or expediency of legislation.' As expressed by Justice
Tuason: 'It is not the province of the courts to supervise legislation and keep it within the
bounds of propriety and common sense. That is primarily and exclusively a legislative
concern.' There can be no possible objection then to the observation of Justice
Montemayor: 'As long as laws do not violate any Constitutional provision, the Courts
merely interpret and apply them regardless of whether or not they are wise or salutary.'
For they, according to Justice Labrador, 'are not supposed to override legitimate policy
and . . . never inquire into the wisdom of the law.' It is thus settled, to paraphrase Chief
Justice Concepcion in Gonzales v. Commission on Elections, that only congressional
power or competence, not the wisdom of the action taken, may be the basis for declaring
a statute invalid. This is as it ought to be. The principle of separation of powers has in
the main wisely allocated the respective authority of each department and confined its
jurisdiction to such sphere. There would then be intrusion not allowable under the
Constitution if on a matter left to the discretion of a coordinate branch, the judiciary
would substitute its own . . ." 21
To reiterate, we cannot substitute our discretion for Congress, and even though there are
provisions in Rep. Act No. 9337 which we may believe as unwise or iniquitous, but not
unconstitutional, we cannot strike them off by invoking our power of judicial review. In
such a situation, the recourse of the people is not judicial, but rather political. If they
severely doubt the wisdom of the present Congress for passing a statute such as Rep.

Act No. 9337, then they have the power to hold the members of said Congress
accountable by using their voting power in the next elections. ADScCE
In view of the foregoing, I vote for the denial of the present petitions and the upholding
of the constitutionality of Rep. Act No. 9337 in its entirety.
||| (Abakada Guro Party List v. Ermita, G.R. No. 168056, 168207, 168461, 168463,
168730, [September 1, 2005])

123. US V ANG TANG HO

EN BANC
[G.R. No. L-17122. February 27, 1922.]
THE UNITED STATES, plaintiff-appellee, vs. NAG TANG Ho, defendantappellant.
Williams & Ferrier for appellant.

Acting Attorney-General Tuason for appellee.

SYLLABUS
1. ORGANIC LAW. By the organic law of the Philippine Islands and the
Constitution of the United States, all powers are vested in the Legislature, Executive,
and Judiciary. It is the duty of the Legislature to make the law; of the Executive; and of
the Judiciary to construe the law. The Legislature has no authority to execute or
construe the law; the Executive has no authority to make or construe the law; and the
Judiciary has no power to make or execute the law.
2. POWER. Subject to the Constitution only, the power of each branch is
supreme within its own jurisdiction, and it is for the judiciary only to say when any Act
of the Legislature is or is not constitutional.
3. THE POWER TO DELEGATE. The Legislature cannot delegate legislative
power to enact any law. If Act No. 2868 is a law unto itself and within itself, and it
does nothing more than to authorize the Governor-General to make rules and
regulations to carry it into effect, then the Legislature created the law. There is no
delegation of power and it is valid. One the other hand, if the act within itself does not
define a crime and is not complete, and some legislative act remains to be done to
make it law or a crime, the doing of which is vested in the Governor-General, the is a
delegation of legislative power, is unconstitutional and avoid.
4. No CRIME TO SELL. After the passage of Act No. 2868, and without any
rules and regulations of the Governor-General, a dealer in rice could sell it at any price
and he would not commit a crime. There was no legislative act which made it a crime
to sell rice at any price.
5. CRIME BY PROCLAMATION. When Act No. 2868 is analyzed, it is the
violation of the Proclamation of the Governor-General which constitutes the crime.
The alleged sale was made a crime, if at all, because of the Proclamation by the
Governor-General.
6. UNCONSTITUTIONAL. In so far as Act No. 2868 undertakes to authorize the
Governor-General, in his discretion, to issue a proclamation fixing the price and to
make the sale of it in violation of the proclamation a crime, it is unconstitutional and
void.
7. CONSTITUTION. The Constitution is something solid, permanent and
substantial. It stability protects the rights, liberty, and property rights of the rich and
the poor alike, and its construction ought not to change with emergencies or
conditions.
8. PRIVATE RIGHTS. In the instant case, the law was not dealing with
Government property. It was dealing with private property and private rights which
are sacred under the Constitution.
9. PRIVATE PROPERTY. In the instant case, the rice was the personal, private
property of the defendant. The Government had not bought it, did not claim to own it,
or have any interest in it at the time the defendant sold it to one of his customers.
10. POWER VESTED IN THE LEGISLATURE. By the organic act and subject only
to constitutional limitations, the power to legislate and enact laws is vested
exclusively in the Legislature, which is elected by a direct vote of the people of the
Philippine Islands.

11. OPINION LIMITED. This opinion is confined to the right of the GovernorGeneral to issue a proclamation fixing the maximum price at which rice should be
sold, and to make it a crime to sell it at a higher price, and to that extent holds that it
is an unconstitutional delegation of legislative power. It does not decide or undertake
to construe the constitutionality of any of the remaining portions of Act No. 2868.

DECISION

JOHNS, J p:
At its special session of 1919, the Philippine Legislature passed Act No. 2868,
entitled "An Act penalizing the monopoly and hoarding of, and speculation in palay,
rice, and corn under extraordinary circumstances, regulating the distribution and sale
thereof, and authorizing the Governor-General, with the consent of the Council of
States. to issue the necessary rules and regulations therefor, and making an
appropriation for this purpose," the material provisions of which are as follows:
"Section 1. The Governor-General is hereby authorized, whenever, for any
cause, conditions arise resulting in an extraordinary rise in the price of palay,
rice or corn, to issue and promulgate, with the consent of the Council of States,
temporary rules and emergency measures for carrying out the purpose of this
Act. to wit:
"(a) To prevent the monopoly and hoarding of, and speculation in, palay
rice or corn.
"(b) To establish and maintain a government control of the distribution or
sale of the commodities referred to or have such distribution or sale made by
the Government itself.
"(c) To fix, from time to time, the quantities of palay, rice, or corn that a
company or individual may acquire, and the maximum sale price that the
industrial or merchant may demand.
"(d) . . .
"SEC. 2. It shall be unlawful to destroy, limit, prevent or in the other
manner obstruct the production or milling of palay, rice or corn for the purpose
of raising the prices thereof; to corner or hoard said products as defined in
section three of this Act; . . ."
Section 3 defines what shall constitute a monopoly or hoarding of palay, rice or
corn within the meaning of this Act, but does not specify the price of rice of define any
basis for fixing the price.
"SEC. 4. The violations of any of the provisions of this Act or of the
regulations, orders and decrees promulgated in accordance therewith shall be
punished by a fine of not more than five thousand pesos, or by imprisonment
for not more than two years, or both, in the discretion of the court: Provided,
That in the case of companies or corporations, the manager or administrator
shall be criminally liable.
"SEC. 7. At any time that the Governor-General, with the consent of the
Council of State, shall consider that the public interest requires the application

of the provisions of this Act, he shall so declare by proclamation, and any

provisions of other laws inconsistent herewith shall from then on be temporarily
suspended.
"Upon the cessation of the reasons foe which such proclamation was
issued, the Governor-General, with the consent of the Council of States, shall
declare the application of this Act to have likewise terminated, and all laws
temporarily suspended by virtue of the same shall again take effect, but such
termination shall not prevent the prosecution of any proceedings or cause
begun prior to such termination, nor the filing of any proceedings for an offense
committed during the period covered by the Governor-General's proclamation."
August 1, 1919, the Governor-General issued a proclamation fixing the price at
which rice should be sold.
August 8, 1919, a complaint was filed against the defendant, NAG Tang Ho,
charging him with the sale of rice at an excessive price as follows:
"The undersigned accuses NAG Tang Ho of a violation of Executive Order
No. 53 of the Governor-General of the Philippines, dated the 1st of August,
1919, in relation with the provisions of sections 1, 2 and 4 Act No. 2868,
committed as follows:
"That on or about the 6th day of August, 1919, in the city of Manila,
Philippine Islands, the said NAG Tang Ho. voluntarily, illegally and criminally sold
to Pedro Trinidad, one Janet of rice at the price of eighty centavos (P.80). which
is a price greater than that fixed by Executive Order No. 53 of the GovernorGeneral of the Philippines, dated the 1st of August, 1919, under the authority of
section 1 of Act No. 2868. Contrary to law."
Upon this charge, he was tried, found guilty and sentenced to five months'
imprisonment and to pay a fine of P500, from which he appealed to this court,
claiming that the lower court erred in finding Executive Order No. 53 of 1919, to be of
any force and effect, in finding the accused guilty of the offense charged, and in
imposing the sentence.
The official records show that Act was to take effect on its approval; that it was
approved July 30,1919; that the Governor-General issued his proclamation on the 1st
of August, 1919; and that the law was first published on the 13th of August, 1919;
and that the proclamation itself was first published on the 20th of August, 1919.
The question here involves an analysis and construction of Act No. 2868, in so
far as it authorizes the Governor-General to fix the price at which rice should be sold.
It will be noted that section 1 authorizes the Governor-General, with the consent of
the Council of State, for any cause resulting in an extraordinary rise in the price of
palay, rice or corn, to issue and promulgated temporary rules and emergency
measures for carrying out the purposes of the Act. By its very terms, the promulgation
of temporary rules and emergency measures is left to the discretion of the GovernorGeneral. The Legislature does not undertake reasons the Governor-General shall issue
the proclamation, but says that it may be issued " for any cause," and leaves the
question as to what is "any cause" to the discretion of the Governor-General. The Act
also says: "For any cause, conditions arise resulting in an extraordinary rise in the
price of palay, rice or corn." The Legislature does not specify or define what is "an
extraordinary rise." That is also left to the discretion of the Governor-General. The Act
also says that the Governor-General, "with the consent of the Council of State," is
authorized to issue and promulgate "temporary rules and emergency measures for

carrying out the purposes of this Act." It does not specify or define what is a
temporary rule or an emergency measure, or how long such temporary rules or
emergency measures shall remain in force and effect, or when they shall take effect.
That is to say the Legislature itself has no in any manner specified or defined any
basis for the order, but has left it to the sole judgment and discretion of the GovernorGeneral to say what is or what is not "a cause," and what is or what is not "an
extraordinary rise in the price of rice," and as to what a temporary rule or an
emergency measure for the carrying out the purpose of the Act Under this state of
facts, if the law is valid and the Governor-General issues a proclamation fixing the
minimum price at which rice should be sold, any dealer who, with or without notice,
sells rice at a higher price, is a criminal. There may not have been any cause, and the
price may not have been extraordinary, and there may not have been an emergency,
but, if the Governor-General found the existence of such facts and issued a
proclamation, and rice is sold at any higher price, the seller commits a crime.
By the organic law of the Philippine Islands and the Constitution of the United
States all power are vested in the Legislative, Executive and Judiciary. It is the duty of
the Legislature to make the law; of the Executive to execute the law; and of the
Judiciary to construe the law. The Legislature has no authority to executive or
construe the law, the Executive has no authority to make or construe the law, and the
Judiciary has no power to make or executive the law. Subject to the Constitution only,
the power of each branch is supreme within its own jurisdiction, and it is for the
Judiciary only to say when any Act of the Legislature is or is not constitutional.
Assuming, without deciding, that the Legislature itself has the power to fix the price at
which rice is to be sold, can it delegate that power to another, and, if so, was that
power legally delegated by Act. No. 2868? In other words, does the Act delegate
legislative power to the Governor-General? By the Organic Law, all legislative power is
vested in the Legislature, and the power conferred upon the Legislature to make laws
cannot be delegated to the Governor-General, or any one else. The Legislative cannot
delegate the Legislative power to enact any law. If Act No. 2868 is a law unto itself
and within itself, and it does nothing more than to authorize the Governor-General to
make rules and regulations to carry the law into effect, then the Legislature itself
created the law. There is no delegation of power and it is valid. On the other hand, if
the Act within itself does not define a crime, and is not a law, and some legislative act
remains to be done to make it a law or a crime, the doing of which is vested in the
Governor-General, then the Act is a delegation of legislative power, is unconstitutional
and avoid.
The Supreme Court of the United States in what is known as the Grainer Cases
(94 U. S.. 183-187; 24 L, ed., 94), first laid down the rule:
"Railroad companies are engaged in public employment affecting the
public interest and, under the decision in Mun vs. Ill., ante subject to Legislative
control as to their rates of fare and freight unless protect by their charters.
"The Illinois statute of Mar. 23, 1874, to established reasonable maximum
rates of charges for the transportation of freights and passengers on the
different railroads of the State is not void as being repugnant to the Constitution
of the United States or to that of the State."
It was there for the first time held in substance that a railroad was a public
utility, and that, being a public utility, the State had power to establish reasonable
maximum freight and passenger rates. This was followed by the State of Minnesota in

enacting a similar law, providing for and empowering, a railroad commission to hear
and determine what was a just and reasonable rate. The constitutionality of this law
was attacked and upheld by the Supreme Court of Minnesota in a learned and
exhaustive opinion by Justice Mitchell, in the case of State vs. Chicago, Milwaukee &
St. Paul Ribs. Co. (38 Minn., 281), in which the court held:
"Regulations of railway tariffs Conclusiveness of commission's tariffs.
Under Laws 1887, c. 10, sec. 8, the determination of the railroad and warehouse
commission as to what are equal and reasonable fares rates for the
transportation of persons and property by a railway company is conclusive, and,
in proceedings by mandamus to compel compliance with the tariff of rates
recommended and published by them, no issue can be raise or inquiry had on
that question.
"Same Constitution Delegation of power to commission. The
authority thus given to the commission to determine, in the exercise of their
discretion and judgment, what are equal and reasonable rates, is not a
delegation of legislative power."
It will be noted that the law creating the railroad commission expressly provides

"That all charges by any common carrier for the transportation of

passengers and property shall be equal and reasonable."
With that as a basis for the law, power is then given to the railroad commission
to investigate all the facts, to hear and determine what is a just and reasonable rate.
Even then that law does not make the violation of the order of the commission a
crime. The only remedy is a civil proceeding. It was there held
"That the legislature itself has the power to regulate railroad charges is
now too well settled to require either argument or citation of authority.
"The difference between the power to say what the law shall be, and the
power to adopt rules and regulations, or to investigate and determine the facts,
in order to carry into effect a law already passed, is apparent. The true
distinction is between the delegation of power to make the law, which
necessarily involves a discretion as to what it shall be, and the conferring an
authority or discretion to be exercised under and in pursuance of the law.
"The legislature enacts that all freight rates and passenger fares should
be just and reasonable. It had the undoubted power to fix these rates at
whatever it deemed equal and reasonable.
"They have not delegated to the commission any authority or discretion
as to what the law shall be, which would not be allowable, but have merely
conferred upon it an authority and discretion, to be exercised in the execution of
the law, and under and in pursuance of it, which is entirely permissible. The
legislature itself has passed upon the expediency of the law, and what it shall
be. The commission is intrusted with no authority or discretion upon these
questions. It can neither make nor unmade a single provision of law. It is merely
charged with the administration of the law, and with no other power."
The delegation of legislative power was before the Supreme Court of Wisconsin
in Doling vs Lancaster Ins. Co. (92 Wis., 63). The opinion says:
"The true distinction is between the delegation of power to make the law,
which necessarily involves a discretion as to what it shall be and conferring

authority or discretion as to its execution, to be exercised under and in

pursuance of the law. The first cannot be done; to the latter no valid objection
can be made.'
"The act, in our judgment, wholly fails to provide definitely and clearly
what the standard policy should contain so that it could be put in use as a
uniform policy required to take the place of all others, without the determination
of the insurance commissioner in respect to matters involving the exercise of a
legislative discretion that could not be delegated, and without which the act
could not possibly be put in use as an act in conformity to which all fire
insurance policies were required to be issued.
"The result of all the cases on this subject is that a law must be complete,
in all its terms and provisions, when it leaves the legislative branch of the
government, and nothing must be left to the judgment of the electors or other
appointee or delegate of the legislature, so that, in form and substances, it is a
law in all its details in presenting, but which may be left to take effect in future,
if necessary, upon the ascertainment of any prescribed fact or event."
The delegation of legislative power was before the Supreme Court in United
States vs. Grimed (220 U. S., 506; 55 L. ed., 563), where it was held that the rules and
regulations of the Secretary of Agriculture as to a trespass on government land in a
forest reserve were valid constitutional. The Act there provided that the Secretary of
Agriculture " . . . may make such rules and regulations and establish such service as
will insure the objects of such reservation; namely, to regulate their occupancy and
use, and to preserve the forests thereon from destruction; and any violation of the
provisions of this act or such rules and regulations shall be punished, . . ."
The brief of the United States Solicitor-General says:
"In refusing permits to use s forest reservation for stock grazing, except
upon stated terms or in stated ways, the Secretary of Agriculture merely asserts
and enforces the proprietary right of the United States over land which it owns.
The regulations of the Secretary, therefore, is not an exercise of legislative, or
even of administrative, power; but is an ordinary and legitimate refusal of the
landowner's authorized agent to allow persons having no right in the land to use
it as they will. The right of proprietary control is altogether different from
governmental authority."
The opinion says:
"From the beginning of the government, various acts have been
passed conferring upon executive officers power to make rules and
regulations, not for the government of their departments, but for
administering the laws which did govern. None of these statutes could
confer legislative power. But when Congress had legislated and indicated its
will, it could give to those who were to act under such general provisions
power to fill up the details' by the establishment of administrative rules and
regulations, the violation of which be punished by fine imprisonment fixed
by Congress, or by penalties fixed by Congress, or measured by the injury
done.
"That 'Congress cannot delegate legislative power is a principle
universally recognized as vital to the integrity and maintenance of the
system of government ordained by the Constitution.'

"If, after the passage of the act and the promulgation the rule, the
defendants drove and grazed their sheep upon the reserve, in violation of
the regulations, they were making an unlawful use of the government's
property. In doing so they thereby made themselves liable to the penalty
imposed by Congress."
"The subject as to which the Secretary can regulate are defined. The
lands are set apart as a forest reserve. He is required to make provision to
protect them from depredations and from harmful uses. He is authorized 'to
regulate the occupancy and use and to use to preserve the forests from
destruction.' A violation of reasonable rules regulating the use and
occupancy of the property is made a crime, not by the Secretary, but by
Congress."
The above are leading cases in the United States on the question of delegating
legislative power. It will be noted that in the "Grainer Cases," it was held that a
railroad company was a public corporation, and that a railroad was a public utility,
and that, for such reasons the Legislature had the power to fix and determine just and
reasonable rates for freight and passengers.
The Minnesota case held that, so long as the rates were just and reasonable,
the legislature could delegate the power to ascertain the facts and determine from
the facts what were just and reasonable rates, and that in vesting the commission
with such power was not a delegation of legislative power.
The Wisconsin case was a civil action founded upon a "Wisconsin standard
policy of fire insurance," and the court held that "the act, . . . wholly fails to provide
definitely and clearly what the standard policy should contain, so that it could be put
in use as a uniform policy required to take the place of all others, without the
determination of the insurance commissioner in respect to matters involving the
exercise of a legislative discretion that could not be delegated.''
The case of the United States Supreme Court, supra, dealt with rules and
regulations which were promulgated by the Secretary of Agriculture for Government
land in the forest reserve. These hold that the legislature only can enact a law, and
that it cannot delegate its legislative authority.
The line of cleavage between what is and what is not a delegation of legislative
power is pointed out and clearly defined. As the Supreme Court of Wisconsin says:
"That no part of the legislative power can be delegated by the
legislature to any other department of the government, executive or
judicial, is a fundamental principle in constitutional law, essential to the
integrity and maintenance of the system of government established by the
constitution.
"Where an act is clothed with all the forms of law, and is complete in
and of itself, it may be provided that it shall become operative only upon
some certain act or event, or, in like manner, that its operation shall be
suspended.
The legislature cannot delegate its power to make a law, but it can
make a law to delegate a power to determine some fact or state of things
upon which the law makes, or intends to make, its own action to depend."

"All saloons in said village shall be closed at 11 o'clock P. M. each day and
remain closed until 5 o'clock on the following morning, unless by special permission of
the president."
Construing it in 136 Wis., 526 128 A. S. R., 1100, 1 the Supreme Court of that
State says:
"We regard the ordinance as void for two reasons: First, because it
attempts to confer arbitrary power upon an executive officer, and allows
him, in executing the ordinance, to make unjust and groundless
discriminations among persons similarly situated; second, because the
power to regulate saloons is a law-making power vested in the village
board, which cannot be delegated. A legislative body cannot delegate to a
mere administrative officer power to make a law, but it can make a law with
provisions that it shall go into effect or be suspended in its operation upon
the ascertainment of a fact or state of facts by an administrative of board.
In the present case the ordinance by its terms gives power to the president
to decide arbitrarily, and in the exercise of his own discretion, when a
saloon shall close. This is an attempt to vest legislative discretion in him,
and cannot be sustained."
The legal principle involved there is squarely in point here.
It must conceded that, after the passage of Act No. 2868, and before any rules
and regulations were promulgated by the Governor-General, a dealer in rice could sell
it at any price, even at a peso per "Janet," and that he would not commit a crime,
because there would be no law fixing the price of rice, and the sale of it at any price
would not be a crime. That is to say, in the absence of a proclamation, it was not a
crime to sell rice at any price. Hence, it must follow that, if the defendant committed
a crime, it was because the Governor-General issued the proclamation. There was no
act of the Legislature making it a crime to sell rice at any price, and without the
proclamation, the sale of it at any price was not crime.
The Executive Order 1 provides"
(5) The maximum selling price of palay, rice or corn is hereby fixed, for the time
being as follows:
"In Manila
"Palay at P6.75 per sack of 1/2 kilos, or 29 centavos per Janet.
"Rice at P15 per sack of 57 1/2 kilos, or 63 centavos per Janet.
"Corn at P8 per sack of 57 1/2 kilos, or 34 centavos per Janet.
"In the provinces producing palay, rice and corn, the maximum price
shall be the Manila price less the cost of transportation from the source of
supply and necessary handling expenses to the place of sale, to be
determined by the provincial treasures or their deputies.
"In provinces, obtaining their supplies from Manila or other producing
provinces, the maximum price shall be the authorized price at the place of
supply or the Manila price as the case may be, plus the transportation cost,
from the place of supply and the necessary handling expenses, to the place
of sale, to be determined by the provincial treasurers or their deputies.
"(6) Provincial treasurers and their deputies are hereby directed to
communicate with, and execute all instructions emanating from the

Director of Commerce and Industry, for the most effective and proper
enforcement of the above regulations in their respective localities,"
The law says that the Governor-General may fix "the maximum sale price that
industrial or merchant may demand." The law is a general law and not a local or
special law.
The proclamation undertakes to fix one price for rice in Manila and other and
different prices in other and different provinces in the Philippines Islands, and
delegates the power to determine the other and different prices to provincial
treasurers and their deputies. Here, then, you would have a delegation of legislative
power to the Governor-General, and a delegation by him of that power to provincial
treasurers and their deputies, who "are hereby directed to communicate with, and
executive all instructions emanating from the Director of Commerce and Industry, for
the most effective and proper enforcement of the above regulations in their
respective localities." The issuance of the proclamation by the Governor-General was
the exercise of the power delegation of a power, and was even a subdelegation of
that power.
Assuming that it is valid, Act No. 2868 is a general law and does not authorize
the Governor-General to fix one price of rice in Manila and another price in Iloilo. It
only purports to authorize him fix the price of rice in the Philippine Islands under a
law, which is general and uniform, and not local or special. Under the terms of the
law, the price of rice fixed in the proclamation must be the same all over the Islands.
There cannot be one price at Manila and another at Iloilo. Again, it is a matter of
common knowledge, and of which this court will take judicial notice, that there are
many kinds of rice with different and corresponding market values, and that there is a
wide range in the price, which varies with grade and quality. Act No. 2868 makes no
distinction in price for the grade quality of the rice, and the proclamation, upon which
the defendant was tried and convicted, fixes the selling price of rice in Manila "at P15
per sack of 57 1/2 kilos, or 63 centavo per Janet," and is uniform as to all grades of
rice, and says nothing about grade or quality. Again, it will be noted that the law is
confined to palay, rice and corn. They are products of the Philippine Islands. Hemp,
tobacco, coconut, chickens, eggs, and many other things are also products. Any law
which singles out palay, rice or corn from the numerous, but is a local or special law. If
such a law is valid, then by the same principle, the Governor-General could be
authorized by proclamation to fix the price of meat, eggs chickens, coconut, hemp,
and tobacco, or any other of the Islands. In the very nature of things, all of that class
of laws should be general and uniform. Otherwise, there would be an unjust
discrimination of property rights, which, under the law, must be equal and uniform.
Act No. 2868 is nothing more than a floating law, which, in the discretion and by a
proclamation of the Governor-General, makes it a floating crime to sell rice at a price
in excess of the proclamation, without regard to grade or quality.
When Act No. 2868 is analyzed, it is the violation of the proclamation of the
Governor-General which constitutes the crime. Without that proclamation, it was no
crime to sell rice at any price. In other words, the Legislature left it to the sole
discretion of the Governor-General to say what was and what was not "any cause" for
enforcing the act, and what was and what was not "an extraordinary rise in the price
of palay, rice or corn," and under certain undefined conditions to fix the price at which
rice should be sold, without regard to grade or quality, also to say whether a
proclamation should be issued, if so, when, and whether or not the law should be
enforced, how long it should be enforced, and when the law should be suspended. The
Legislature did not specify or define what was "any cause," or what was "an

extraordinary rise in the price of rice, palay or corn." Neither did it specify or define
the conditions upon which the proclamation should be issued. In the absence of the
proclamation no crime was committed. The alleged sale was made a crime, if at all,
because the Governor-General issued the proclamation. The act or proclamation does
not say anything about the different grades or qualities of rice, and the defendant is
charged with the sale" of one Janet of rice at the price of eighty centavos (P0.80)
which is a price greater than fixed by Executive Order No. 53."
We are clearly of the opinion and hold that Act No. 2868 in so far as it
undertakes to authorize the Governor-General in his discretion to issue a
proclamation, fixing the price of rice, and to make the sale of rice in violation of the
proclamation a crime, is unconstitutional and void.
It may be urged that there was an extraordinary rise in
profiteering, which worked a severe hardship, on the poorer
emergency existed, but the question here presented is the
particular portion of a statute, and none of such matters is
against, its constitutionality.

the price of rice and

classes, and that an
constitutionality of a
an argument for, or

The Constitution is something solid, permanent and substantial. Its stability

protects the life, liberty and property rights of the rich and the poor alike, and that
protection ought not to change with the wind or any emergency condition. The
fundamental question involved in this case is the right of the people of the Philippine
Islands to be and live under a republican form of government. We make the board
statement that no state or nation, living under a republican form of government,
under the terms and conditions specified in Act No. 2868, has ever enacted a law
delegating the power to any one, to fix the price at which rice should be sold. That
power can never be delegated under a republican form of government.
In the fixing of the price at which the defendant should sell his rice, the law was
not dealing with government property. It was dealing with private property and private
rights, which are sacred under the Constitution. If this law should be sustained, upon
the same principle and for the same reason, the Legislature could authorize the
Governor-General to fix the price of every product or commodity in the Philippine
Islands, and empower him to make it a crime to sell any product at any other or
different price.
It may be said that this was a war measure, and that for such reason the
provision of the Constitution should be suspended. But the stubborn fact remains that
at all times the judicial power was in full force and effect, and that while that power
was in force and effect, such a provision of the Constitution could not be, and was not,
suspended even in times of war. It may be claimed that during the war, the United
States Government undertook to, and did, fix the price at which wheat and flour
should be bought and sold, and that is true. There, the United States had declared
war, and at the time was at war with other nations, and it was a war measure, but it is
also true that in doing so, and as a part of the same act, the United States
commandeered all the wheat and flour, and took possession of it, either or
constructive, and the government itself became the owner of the wheat and flour, and
fixed the price to be paid for it. That is not case. Here, the rice sold was the personal
and private property of the defendant, who sold it to one of his customers. The
government had not bought and did not claim to own the rice, or have any interest in
it. and at the time of the alleged sale, it was the personal, private property of the
defendant. It may be that the law was passed in the interest of the public, but the

members of this court have taken a solemn oath to uphold and defend the
Constitution, and it ought not to be construed to meet the changing winds or
emergency conditions. Again we say that no state or nation under a republican form
of government ever enacted a law authorizing any executive, under the conditions
stated, to fix the price at which a private person would sell his own rice, and make the
broad statement that no decision of any court, on principle or by analogy. will ever be
found which sustains the constitutionality of that particular portion of Act No. 2868
here in question. By the terms of the Organic Act, subject only to constitutional
limitations, the power Legislature, which is elated by a direct vote of the people of the
Philippine Island. As to the question here involved, the authority of the GovernorGeneral to fix the maximum price at which palay, rice and corn may be sold in the
manner and under the conditions stated is a delegation of legislative power in
violation of the organic law.
This opinion is confined to the particular question here involved, which is the
right of the Governor-General, upon the terms and conditions stated in the Act, to fix
the price of rice and make it a crime to sell it at a higher price, and which holds that
portion of the Act unconstitutional. It does not decide or undertake to construe the
constitutionality of any of the remaining of the Act.
The judgment of the lower court is reversed, and the defendant discharged. So
ordered.
Araullo, C. J., Johnson, Street, and Ostrand, JJ., concur.
Romualdez, J., concurs in the result.
Separate Opinions
MALCOLM, J., with whom concur AVANCENA and VILLAMOR JJ., concurring:
I concur in the result for reasons which reach both the facts and the law. In the
first place, as to the facts, one cannot be convicted ex post facto of a violation of a
law and of an executive order issued pursuant to the law, when the alleged violation
thereof occurred on August 6, 1919, while the Act of the Legislature in question was
not published until August 13, 1919, and the order was not published until August
20,1919. In the second place, as to the law, one cannot be convicted of a violation
of a law or an order issued pursuant to the law when both the law and the order fail to
set up an ascertainable standard of guilt. (U. S. vs Cohen Grocery Company [1921],
255 U. S., 81, holding section 4 of the Federal Food Control Act of August 10, 1917, as
amended, invalid.)
In order that there may not be any misunderstanding of our position, I would
respectfully invite attention to the decision of the United States Supreme Court in
German Alliance Ins. Co. vs. Lewis [1914, 233 U. S., 389), concerning the legislative
regulation of the prices charged by businesses affected with a public interest, and to
another decision of the United States Supreme Court, that of Marshall Field & Co. vs.
Clark [1892] U. S., 649], which adopts as its own the principle laid down in the case of
Locke's Appeal [1873], 72 Pa. St., 491). namely: "The Legislature cannot delegate its
power to make a law: but it can make a law to delegate a power to determine some
fact or state of things upon which the law makes or intends to make, its own action
depend. To deny this would be to stop the wheels of government. There are many
things upon which wise and useful legislation must depend which cannot be know to

law-making power, and must, therefore, be a subject of inquiry and determination

outside of the halls legislation.
||| (United States v. Ang Tang Ho, G.R. No. L-17122, [February 27, 1922], 43 PHIL 1-19)

124. VILLENA V SEC OF INTERIOR

EN BANC
[G.R. No. 46570. April 21, 1939.]
JOSE
D. VILLENA, petitioner, vs.
SECRETARY OF THE INTERIOR, respondent.

THE

Vicente del Rosario for petitioner.

Solicitor-General Ozaeta for respondent.
SYLLABUS
1. SECRETARY OF THE INTERIOR;
EXECUTIVE
SUPERVISION
OVER
THE
ADMINISTRATION OF PROVINCES, MUNICIPALITIES, CHARTERED CITIES AND OTHER
LOCAL POLITICAL SUBDIVISIONS. Section 79 (C) of the Administrative Code
speaks of direct control, direction, and supervision over bureaus and offices under the
jurisdiction of the Secretaryof the Interior, but this section should be interpreted in
relation
to
section
8G
Or
the
same
Code
which
grants
to
the
Department of the Interior "executive
supervision
over
the
administration of provinces, municipalities, chartered cities and other local political
subdivisions."
2. ID.;
ID.;
INVESTIGATION OF CHARGES;
MEANING OF THE
WORD
"SUPERVISION". In the case of Planas vs. Gil (37 Off. Gaz., 1228) this court
observed that "Supervision is not a meaningless thing. It is an active power. It is
certainly not without limitation, but it at least implies authority to inquire into facts
and conditions in order to render the power real and effective. If supervision is to be
conscientious and rational, and not automatic and brutal, it must be founded upon a
knowledge of actual facts and conditions disclosed after careful study and
investigation." The principle there enunciated is applicable with equal force to the
present case. The Secretary of the Interior is invested with, authority to order the
investigation of the charges against the petitioner and to appoint a special
investigator for that purpose.

3. ID.; ID.; ID.; SUSPENSION BY THE SECRETARY. As regards the challenged

power of the Secretary of theInterior to decree the suspension of the herein petitioner
pending an administrative investigation or the charges against him, the question, it
may be admitted, is not free from difficulties. There is no clear and express
grant of power to the secretary to suspend a mayor of a municipality who is under
investigation. On the contrary, the power appears lodged in the provincial governor
by section 2188 of the Administrative Code which provides that "The provincial
governor shall receive and investigate complaints made under oath against municipal
officers
for
neglect of duty,
oppression,
corruption
or
other
form of maladministration of office, and conviction by final judgment of any crime
involving moral turpitude."
4. ID.; ID.; ID.; ID.; POWERS OF THE PRESIDENT OF THE PHILIPPINES. The fact,
however, that the power ofsuspension is expressly granted by section 2188 of the
Administrative Code to the provincial governor does not mean that the grant is
necessary exclusive and precludes the Secretary of the Interior from exercising a
similar power. For instance, counsel for the petitioner admitted in the oral argument
that the President of the Philippines may himself suspend the petitioner from office in
virtue of his greater power of removal (sec. 2191, as amended, Administrative Codes
to be exercised conformably to law.
5. ID.; ID.; ID.; ID. Indeed, if the President could, in the manner prescribed by
law, remove a municipal official, it would be a legal incongruity if he were to be
devoid of the lesser power of suspension. And the incongruity would be more patent
if, possessed of the power both to suspend and to remove a provincial official (sec.
2078, Administrative Code), the President were to be without the power to suspend a
municipal official.
6. ID.; ID.; ID.; ID.; ID. It may be argued with some degree of plausibility that,
if the Secretary of the Interior is, as we have hereinabove concluded, empowered to
investigate the charges against the petitioner and to appoint a special investigator for
that purpose. preventive suspension may be a means by which to carry into effect a
fair and impartial investigation. This is a point, however, which, for the reason
hereinafter indicated the court does not have to decide.
7. ID.; ID.; ID.; ID.; ID. Withal, at first blush, the argument of ratification may
seem plausible under the circumstances, it should be observed that there are certain
prerogative acts which, by their very nature, cannot be validated by subsequent
approval or ratification by the President. There are certain constitutional powers and
prerogatives of the Chief Executive of the Nation which must be exercised by him in
person
and
no
amount of approval
or
ratification
will
validate
the
exercise of any of those powers by any other person.
8. ID.; ID.; ID.; ID.; ID. The heads of the various executive departments are
assistants and agents of the Chief Executive, and, except in cases where the Chief
Executive is required by the Constitution or the law to act in person or the
exigencies of the situation demand that he act personally, the multifarious executive
and administrative functions of the Chief Executive are performed by and through the
executive departments, and the acts of the secretaries of such departments,
performed and promulgated in the regular course of business, are, unless disapproved
or reprobated by the Chief Executive, presumptively the acts of the Chief Executive.
9. ID.; ID.; ID.; ID.; ID.; CONSTITUTION OF THE PHILIPPINES. With reference to
the Executive Department of the government, there is one purpose which is crystalclear and is readily visible without the projection of judicial searchlight, and that is,

the establishment of a single, not plural, Executive. The first section of Article
VII of the Constitution, dealing with the Executive Department, begins with the
enunciation of the principle that "The executive power shall be vested in a
President of the Philippines." This means that the President of the Philippines is the
Executive of the Government of the Philippines, and no other. The heads of the
executive departments occupy political positions and hold office in an advisory
capacity, and, in the language of Thomas Jefferson, "should be of the President's
bosom confidence" and, in the languageof Attorney-General Cushing, "are subject to
the direction of the President".
10. ID.; ID.; ID.; ID.; ID.; ID.; SECRETARIES OF DEPARTMENT. Without
minimizing the importance of the heads ofthe various departments, their personality
is in reality but the projection of that of the President. Stated otherwise, and as
forcibly characterized by Chief Justice Taft of the Supreme Court of the United States,
"each head of a department is, and must be, the President's alter ego in the
matters of that department where the President is required by law to exercise
authority" (Myers vs. United States, 47 Sup. Ct. Rep., 21 at 30; 272 U. S., 52" at 133;
71 Law. ed., 160). Secretaries ofdepartments, of course, exercise certain powers
under the law but the law cannot impair or in any way affect the constitutional
power of control and direction of the President. As a matter of executive policy, they
may be granted departmental autonomy as to certain matters, but this is by mere
concession of the Executive, in the absence of valid legislation in the particular field.
11. ID.; ID.: ID.; ID.; ID.; ID. If the President, then, is the authority in the
executive Department, he assumes the corresponding responsibility. The head of a
department is a man of his confidence; he contrast and directs his acts; he appoints
him and can remove him at pleasure; he is the executive, not any of his secretaries. It
.s therefore logical that he, the President, should be answerable for the
acts of administration of the entire Executive Department before his own conscience
no less than before that undefined power of public opinion which, in the
language of Daniel Webster, is the last repository of popular government. These are
the necessary corollaries of the American presidential type ofgovernment, and if there
is any defect, it is attributable to the system itself. We cannot modify the system
unless we modify the Constitution, and we cannot modify the Constitution by any
subtle process of judicial interpretation or construction.

DECISION

LAUREL, J p:
This is an original action of prohibition with prayer for preliminary injunction
against the Secretary of the Interior to restrain him and his agents from proceeding
with the investigation of the herein petitioner, Jose D. Villena, mayor ofMakati, Rizal,
which was scheduled to take place on March 28, 1939, until this case is finally
determined by this court. The respondent was required to answer, but the petition for
preliminary injunction was denied.
It appears that the Division of Investigation of the Department of Justice, upon
the request of the Secretary of theInterior, conducted an inquiry into the
conduct of the petitioner, as a result of which the latter was found to have committed

bribery, extortion, malicious abuse of authority and unauthorized practice of the law
profession. The respondent, therefore, on February 8, 1939, recommended to the
President of the Philippines the suspension of the petitioner to prevent possible
coercion of witnesses, which recommendation was granted, according to the
answer of the Solicitor-General of March 20, 1939, verbally by the President on the
same day. The Secretary of the Interior suspended the petitioner from office on
February 9, 1939, and then and thereafter wired the Provincial Governor of Rizal with
instruction that the petitioner be advised accordingly. On February 13, 1939, the
respondent wrote the petitioner a letter, specifying the many charges against him and
notifying him of the designation of Emiliano Anonas as special investigator to
investigate the charges. The special investigator forthwith notified the petitioner that
the formal investigation would be commenced on February 17, 1939, at 9 a. m., but
due to several incidents and postponements, the same had to be set definitely for
March 28, 1939. Hence, the petition for preliminary injunction referred to in the
beginning of this opinion.
The petitioner contends in his petition:
"(1) That the Secretary of the Interior has no jurisdiction or authority
to suspend and much less to prefer by himself administrative charges
against the petitioner and decide also by himself the merits of the charges
as the power to suspend municipal elective officials and to try and punish
them for misconduct in office or dereliction of duty is lodged in some other
agencies of the government;
"(2) That the acts of the respondent in suspending the petitioner from
office and in preferring by himself charges against him and in designating a
special investigator to hear the charges specified in Exhibit A are null and
void for the following reasons:
"(a) Because the Secretary of the Interior, by suspending the
petitioner, has exercised control over local governments when that power
has been taken away from the President of the Philippines by the
Constitution for the to abrogate and the power to abrogate means the
power to power to control has been interpreted to include the power usurp
and the power to usurp necessarily includes the power to destroy:
"(b) Because even if the respondent Secretary of the Interior has
power of supervision over local governments, that power, according to the
constitution, must be exercised in accordance with the provisions of law
and the provisionsof law governing trials of charges against elective
municipal officials are those contained in section 2188 of the Administrative
Code as amended. In other words, the Secretary of the Interior must
exercise his supervision over local governments, if he has that power under
existing law, in accordance with section 2188 of the Administrative Code,
as amended, as the latter provisions govern the procedure to be followed in
suspending and punishing elective local officials while section 79 (C) of the
Administrative Code is the genera law which must yield to the special law;
"(c) Because the respondent Secretary of the Interior is exercising an
arbitrary power by converting himself into a complainant and at the same
time judge of the charges he has preferred against the petitioner;

"(d) Because the action of the respondent Secretary of the Interior is

not based on any sworn statement of any private person or citizen of this
government when section 2188 of the Administrative Code requires the
complaint against elective municipal officials to be under oath in order to
merit consideration by the authorities."
Petitioner prays this Honorable Court:
"(a) To issue a writ of preliminary injunction against the respondent
restraining him, his agents, attorneys and all persons acting by virtue of his
authority from further proceeding against the petitioner until this case is
finally determined by this court;
"(b) To declare, after the hearing of this petition, that the respondent
is without authority or jurisdiction to suspend the petitioner from the
office of mayor of Makati and to order his immediate reinstatement in
office;
"(c) To declare that the respondent has no authority to prefer charges
against the petitioner and to investigate those charges for to grant him that
power the respondent world be acting as prosecutor and judge of the
case of his own creation."
Upon the other hand, the Solicitor-General contends in his answer:
"1. That section 79 (C) in relation with section 86 of the Revised
Administrative
Code
expressly
empowers
the
respondent
as
Secretary of the Interior to
"order
the
investigation of any
act
or
conduct of any person in the service ofany bureau or office under his
department" and in connection therewith to 'designate an official or person
who shall conduct such investigation'; (Par. 4.)
"2. That although section 2188 of the Revised Administrative Code,
invoked by the petitioner, empowers the provincial governor to 'receive and
investigate complaints made tender oath against municipal officers for
neglect ofduty,
oppression,
corruption
or
other
form of maladministration of office', said section does not preclude the
respondent as Secretary of the Interior from exercising the power vested in
him by section 79 (C) in relation with section 86 of the Revised
Administrative Code; and that, moreover, said section 2188 must be read in
relation with section 37 of Act No. 4007, known as the Reorganization
Law of 1932; (Par. 4 [b].)
"3. That at the commencement of the investigation the petitioner did
not question the power or jurisdiction ofthe Department of the Interior to
investigate the administrative charges against him but merely contended
that the filingof said charges was not in accordance with law for the lesson
that they did not bear the oaths of the complainants; (Par. 5.)
"4. That the authority of a department head to order the
investigation of any act or conduct of any person under his department
necessarily carries with it by implication the authority to take such
measures as he may deem necessary to accomplish the purpose of the
investigation, such as by suspending the officer under investigation to
present coercion of witnesses; and that, furthermore, the suspension from
office of the herein petitioner by the respondent was authorized by the

Chief Executive, who is empowered by section 64 (B) of the Administrative

Code to remove officials from office; (Par. 7.)
"5. That the petition does not allege facts and circumstances that
would warrant the granting of the writ ofpreliminary injunction under
section 164 of the Code of Civil Procedure; (Par. 8.)
"6. That it is a well-settled rule 'that courts of equity have no power
to restrain public officers by injunction from performing any official act
which they are by law required to perform, or acts which are not in
excess of the authority and discretion reposed in them.' (Par. 9.)"
The issues presented in this case may be reduced to an inquiry into the legal
authority of the Secretary of theInterior (a) to order an investigation, by a special
investigator appointed by him, of the charges of corruption and irregularity brought to
his attention against the mayor of the municipality of Makati, Province of Rizal, who is
the petitioner herein, and (b) to decree the suspension of ,he said mayor pending the
investigation of the charges.
Section 79 (C) of the Administrative Code provides as follows:
"The Department Head shall have direct control, direction, and
supervision over all bureaus and offices under his jurisdiction and may, any
provision of existing law to the contrary notwithstanding, repeal or modify
the decisions of the chiefs of said bureaus or offices when advisable in the
public interest.
"The Department Head may order the investigation of any act or
conduct of any person in the service of any bureau or office under his
department and in connection therewith may appoint a committee or
designate an official or person who shall conduct such investigations, and
such committee, official, or person may summon, witness by subpna and
subpna duces tecum, administer cath and take testimony relevant to the
investigation."
The above section speaks, it is true, of direct control, direction, and supervision
over bureaus and offices under the jurisdiction of the Secretary of the Interior, but this
section should be interpreted in relation to section 86 of the same Code which grants
to
the
Department of the Interior "executive
supervision
over
the
administration of provinces, municipalities, chartered cities and other local political
subdivisions." In the case of Planas vs. Gil (37 Off. Gaz., 1228), we observed that
"Supervision is not a meaningless thing. It is an active power. It is certainly not
without limitation, but it at least implies authority to inquire into facts and conditions
in order to render the power real and effective. If supervision is to be conscientious
and rational, and not automatic and brutal, it must be founded upon a
knowledge of actual facts and conditions disclosed after careful study and
investigation." The principle there enunciated is applicable with equal force to the
present case.
We hold, therefore, that the Secretary of the Interior is invested with authority
to order the investigation of the charges against the petitioner and to appoint a
special investigator for that purpose.
As regards the challenged power of the Secretary of the Interior to decree the
suspension of the herein petitioner pending an administrative investigation of the
charges against him, the question, it may be admitted, is not free from difficulties.
There is no clear and express grant of power to the secretary to suspend a mayor of a

municipality who is under investigation. On the contrary, the power appears lodged in
the provincial governor by section 2188 of the Administrative Code which provides
that "The provincial governor shall receive and investigate complaints made under
oath against municipal officers for neglect of duty, oppression, corruption or other
form of maladministration of office, and conviction by final judgment of any crime
involving moral turpitude. For minor delinquency he may reprimand the offender; and
if a more severe punishment seems to be desirable he shall submit written charges
touching the matter to the provincial board, furnishing a copy of such charges to the
accused either personally or by registered mail, and he may in such case suspend the
officer (not being the municipal treasurer) pending action by the board, if in his
opinion the charge be one affecting the official integrity of the officer in question.
Where suspension is thus effected, the written charges against the officer shall be
filed with the board within five days." The fact, however, that the power of suspension
is expressly granted by section 2188 of the Administrative Code to the provincial
governor does not mean that the grant is necessarily exclusive and precludes the
Secretary of the Interior from exercising a similar power. For instance, counsel for the
petitioner admitted in the oral argument that the President of the Philippines may
himself suspend the petitioner from office in virtue of his greater power of removal
(sec. 2191, as amended, Administrative Code) to be exercised conformably to law.
Indeed, if the President could, in the manner prescribed by law, remove a municipal
official, it would be a legal incongruity if he were to be devoid of the lesser
power of suspension. And the incongruity would be more patent if, possessed of the
power both to suspend and to remove a provincial official (sec. 2078, Administrative
Code), the President were to be without the power to suspend a municipal official.
Here is, parenthetically, an instance where, as counsel for petitioner admitted, the
power to suspend a municipal official is not exclusive. Upon the other hand, it may be
argued with some degree of plausibility that, if the Secretary of the Interior is, as we
have hereinabove concluded, empowered to investigate the charges against the
petitioner and to appoint a special investigator for that purpose, preventive
suspension may be a means by which to carry into effect a fair and impartial
investigation. This is a point, however, which, for the reason hereinafter indicated, we
do not have to decide.
The Solicitor-General argues that section 37 of Act No. 4007, known as
the Reorganization Law of 1932, by providing, "the provisions of the existing law to
the contrary notwithstanding," that "whenever a specific power, authority, duty,
function, or activity is entrusted to a chief of bureau, office, division or service, the
same shall be understood as also conferred upon the proper Department Head who
shall have authority to act directly in pursuance thereof, or to review, modify or
revoke any decision or action of said chief of bureau, office, division or service",
should be interpreted to concede to the Secretary of the Interior the power to suspend
a mayor of a municipality. The argument is so generally sweeping that, unless
distinctions are made, the effect would be the complete abrogation at will of the
powers ofprovincial and municipal officials even in corporate affairs of local
governments. Under the theory suggested by the Solicitor-General, the
Secretary of the Interior could, as observed by able counsel for the petitioner, enter
into a contract and sign a deed of conveyance of real property in behalf of a
municipality against the opposition of the mayor thereof who is the local official
authorized by law to do so (sec. 2196, Revised Administrative Code), or in behalf of a
province in lieu ofthe provincial governor thereof (sec. 2068, Ibid.), and otherwise

exercise powers of corporate character mentioned in sections 2067 and 2175 of the
Revised Administrative Code and which are lodged in the corresponding provincial and
municipal officials. And if the power of suspension of the Secretary of the Interior is to
be justified on the plea that the pretended power is governmental and not corporate,
the
result
would
be
more
disastrous.
Then
and
thereunder,
the
Secretary of the Interior, in lieu of the mayor of the municipality, could directly veto
municipal ordinances and resolutions under section 2229 of the Revised
Administrative Code; he could, without any formality, elbow aside the municipal
mayor and himself make appointments to all non-elective positions in the municipal
service, under section 2199 of the Revised Administrative Code; he could,
instead of the provincial governor, fill a temporary vacancy in any municipal office
under subsection (a), section 2188, as amended, of the said Code; he-could even
directly appoint lieutenants of barrios and wrest the authority given by section
2218 of the Revised Administrative Code to a municipal councilor. Instances may be
multiplied but it is unnecessary to go any further. Prudence, then, dictates that we
should hesitate to accept the suggestion urged upon us by the Solicitor-General,
especially where we find the path indicated by him neither illumined by the
light of our own experience nor cemented by the virtuality of legal principles but is, on
the contrary, dimmed by the recognition however limited in our own
Constitution of the right of local self-government and by the actual operation and
enforcement of the laws governing provinces, chartered cities, municipalities and
other political subdivisions. It is not any question of wisdom of legislation but the
existence of any such destructive authority in the law invoked by the Government
that we are called upon to pass and determine here.
In the deliberation of this case it has also been suggested that, admitting that
the President of the Philippines is invested with the authority to suspend the
petitioner, and it appearing that he had verbally approved or at least acquiesced in
the action taken by the Secretary of the Interior, the suspension of the petitioner
should be sustained on the principle of approval or ratification of the act of the
Secretary of the Interior by the President of the Philippines. There is, to be sure, more
weight in this argument than in the suggested generalization of section 37 of Act No.
4007. Withal, at first blush, the argument of ratification may seem plausible under the
circumstances, it should be observed that there are certain prerogative acts which, by
their very nature, cannot be validated by subsequent approval or ratification by the
President. There are certain constitutional powers and prerogatives of the Chief
Executive of the Nation which must be exercised by him in person and no
amount of approval or ratification will validate the exercise of any of those powers by
any other person. Such, for instance, i9 his power to suspend the writ of habeas
corpus and proclaim martial law (par. 3,sec. 11, Art. VII) and the exercise by
him of the benign prerogative of mercy (par. 6, sec. 11, idem). Upon the other hand,
doubt is entertained be some members of the court whether the statement made by
the Secretary to the President in the latter's behalf and by his authority that the
President had no objection to the suspension of the petitioner could be accepted as
an affirmative exercise of the power of suspension in this case, or that the verbal
approval by the President ofthe suspension alleged in a pleading presented in this
case by the Solicitor-General could be considered as a sufficient ratification in law.
After serious reflection, we have decided to sustain the contention of the
government in this case on the broad proposition, albeit not suggested, that under
the presidential type of government which we have adopted and considering the
departmental organization established and continued in force by paragraph 1, section

12, Article VII, of our Constitution, all executive and administrative organizations are
adjuncts of the Executive Department, the heads of the various executive
departments are assistants and agents of the Chief Executive, and, except in cases
where the Chief Executive is required by the Constitution or the law to act in person or
the exigencies of the situation demand that he act personally, the multifarious
executive and administrative functions of the Chief Executive are performed by and
through the executive departments, and the acts of the secretaries of such
departments, performed and promulgated in the regular course of business, are,
unless disapproved or reprobated by the Chief Executive, presumptively the
acts of the Chief Executive. (Runkle vs. United States [1887], 122 U. S., 543; 30 Law.
ed., 1167; 7 Sup. Ct. Rep., 1141; see also U. S. vs. Eliason [1839], 16 Pet., 291; 10
Law. ed., 968; Jones vs. U. S. [1890], 137 U. S., 202; 34 Law. ed., 691; 11 Sup. Ct.,
Rep., 80; Wolsey vs. Chapman [1880], 101 U. S., 755; 25 Law. ed., 915; Wilcox vs.
Jackson [1836], 13 Pet., 498; 10 Law. ed., 264.)
Fear is expressed by more than one member of this court that the
acceptance of the principle of qualified political agency in this and similar cases would
result in the assumption of responsibility by the President of the Philippines for
actsof any member of his cabinet, however illegal, irregular or improper may be these
acts. The implications, it is said, are serious. Fear, however, is no valid argument
against the system once adopted, established and operated. Familiarity with the
essential background of the type of Government established under or Constitution, in
the light of certain well-known principles and practices that go with the system,
should offer the necessary explanation. With reference to the Executive
Department of the government, there i3 one purpose which is crystal-clear and is
readily visible without the projection ofjudicial searchlight, and that is, the
establishment of a single, not plural, Executive. The first section of Article VII of the
Constitution, dealing with the Executive Department, begins with the
enunciation of the principle that "The executive power shall be vested in a
President of the Philippines." This means that the President of the Philippines is the
Executive ofthe Government of the Philippines, and no other. The heads of the
executive departments occupy political positions and hold office in an advisory
capacity, and, in the language of Thomas Jefferson, "should be of the President's
bosom confidence" (7 Writings, Ford ed., 498), and, in the language of AttorneyGeneral Cushing (7 Op., Attorney-General, 453), "are subject to the direction of the
President." Without minimizing the importance of the heads of the various
departments, their personality is in reality but the projection of that of the President.
Stated otherwise, and as forcibly characterized by Chief Justice Taft of the Supreme
Court of the United States, "each head of a department is, and must be, the
President's alter ego in the matters of that department where the President is
required by law to exercise authority" (Myers vs. United States, 47 Sup. Ct. Rep., 21 at
30; 272 U. S., 52 at 133; 71 Law. ed., 160). Secretaries of departments, ofcourse,
exercise certain powers under the law but the law cannot impair or in any way affect
the
constitutional
power ofcontrol
and
direction of the
President.
As
a
matter of executive policy, they may be granted departmental autonomy as to certain
matters but this is by mere concession of the executive, in the absence of valid
legislation in the particular field. If the President, then, is the authority in the
Executive Department, he assumes the corresponding responsibility. The headof a
department is a man of his confidence; he controls and directs his acts; he appoints
him and can remove him at pleasure; he is the executive, not any of his secretaries. It
is therefore logical that he, the President, should be answerable for the
acts of administration of the entire executive Department before his own conscience

no less than before that undefined power of public opinion which, in the
language of Danie, Webster, is the last repository of popular government. these are
the necessary corollaries of the American presidential type of government, and if
there is any defect, it is attributable to the system itself. We cannot modify the system
unless we modify the Constitution, and we cannot modify the Constitution by any
subtle process of judicial interpretation or construction.
The petition is hereby dismissed, with costs against the petitioner. So ordered.
Avancea, C.J., Diaz and Concepcion, JJ., concur.
Separate Opinions
VILLA-REAL, J., concurring:
I concur in the result. The Secretary of the Interior is nowhere given the power
to suspend a municipal elective officer pending charges, and in the absence of such
power he may not suspend him. The power to suspend cannot be complied even from
an arbitrary power to remove, except where the power to remove is limited to cause;
in such case, the power to suspend, made use of as a disciplinary power pending
charges, is regarded as included within the power ofremoval (46 Corpus Juris, sec.
142, page 982). Provincial governors alone are expressly empowered to suspend
municipal officers under certain conditions by section 2188 of the Revised
Administrative Code, and the President of the Philippines by section 2191, as
amended, of the same Code. Though the suspension of the petitioner by the
Secretary of the Interiorwas
unauthorized,
the
implied
approval
by
the
President of the Philippines validated such suspension.
IMPERIAL, J., concurring and dissenting:
I concur in the result because in my opinion (1) the President of the Philippines,
under sections 64 (b), and 2191 ofthe Revised Administrative Code, as the latter has
been amended, and section 11 (1), Article VII, of the Constitution, is vested with the
power to expel and suspend municipal officials for grave misconduct, and it appears
that the suspension was ordered by virtue of that authority; and (2) the
Secretary of the Inferior acted within the powers conferred upon him by section 79
(C), in connection with section 86, of the Revised Administrative Code, as amended, in
ordering an administrative investigation of the charges against the petitioner, in his
capacity as mayor of that municipality of Makati, Province of Rizal.
It is a fact that, as a result of the investigation conducted by the
Division of Investigation of the Department ofJustice, the respondent, in turn, ordered
the administrative investigation of the petitioner and recommend his temporary
suspension to the President of the Philippines to preclude him from exerting pressure
upon the witnesses who would testify in the investigation, and that the
President of the Philippines, through Secretary Jorge B. Vargas, stated that he had no
objection to the suspension. The act of the President of the Philippines, in my opinion,
was an exercise of his power to suspend the petitioner and the statement that he had
no objection was, at botton, an order of suspension. The circumstance that in the
communication which the respondent addressed to the petitioner it appeared as
though the suspension had been ordered by him, is immaterial and does not alter the

merits of the case, as the facts disclose that the order of suspension came directly
from the President of the Philippines.
However, I dissent from the conclusion of the majority that, under the existing
presidential system of government and in view of the fact that the department
secretaries are, in the last analysis, agents of the executive, the acts of the said
officials are presumptively deemed the acts of the executive and that, consequently,
the suspension of the petitioner directed by the respondent should be considered,
under the same theory, as the suspension decreed by the President ofthe Philippines.
I believe that the principle thus enunciated is at once dangerous and without legal
sanction. Under the law each of these officials has his own powers and duties and I
doubt seriously if it has ever been the intention of the legislature to confuse their
duties and prerogatives, for otherwise it would be difficult, if not impossible, to limit
and fix responsibility. The respondent himself could not have so understood the law
when, under the facts, in order to suspend the petitioner he found it necessary to
obtain the express authority of the President of the Philippines.
MORAN, J., concurring and dissenting:
I concur in the result.
The ratio dicidendi of the case is contained in the following paragraph of the
majority decision:
" . . . that under the presidential type of government which we have
adopted and considering the departamental organization established and
continued in force by paragraph 1, section 12, Article VII, of our
Constitution, all executive and administrative organizations are
adjuncts of the Executive Department, the heads of the various executive
departments are assistants and agents of the Chief executive, and, except
in cases where the Chief Executive is required by the Constitution or the
law to act in person or the exigencies of the situation demand that he act
personally, the multifarious executive and administrative functions of the
Chief Executive are performed by and through the executive departments,
and the acts of the secretaries of such departments, performed and
promulgated in the regular course ofbusiness, are, unless disapproved or
reprobated by the Chief Executive, presumptively the acts of the Chief
Executive. . . ."
If by this proposition it is meant that the power of suspension residing in the
President may validly be exercised by the Secretary of the Interior in his own name,
and his act, unless disapproved or reprobated by the President, is presumptively the
act of the President, I disagree. The implications involved in the proposition are
serious. Suppose the Secretary of Justice, pending proceedings against a judge of first
instance, suspends him temporarily, a power vested in the President (section 173,
Adm. Code), is the suspension valid in the silence of the Presidents? Suppose the
Secretary ofPublic Works and Communications removes the Director of Posts, is the
removal the act of the President if not disapproved by the latter? Suppose the
Secretary of the Interior grants conditional pardon to a prisoner, is the paruon valid
unless reprobated by the President? The answers are self-evident.
It is true that the majority decision makes exception of the powers which the
Chief Executive, by Constitution, by law, or by the exigencies of the situation, should
exercise in person. The distinction, however, thus sought to be established between

the powers which the President should exercise in person and those which he may
exercise thru the Department secretaries, if it exists at ail, is extremely shadowy and
in fact can nowhere be found in the Constitution, in the law or
practices of administration. On the contrary, the weight of wisdom and authority is
that powers committed or interested by the Constitution or by law to the President
must be exercised by him positively and in person. The only functions of the President
which, in my opinion, may be performed by the department secretaries are those
which are preliminary or preparatory to the exercise of his powers, such as,
investigation, research and other inquiries which may be necessary for a wise and
judicious exercise of his judgment or discretion. This opinion finds corroboration in
section 79-A of the Administrative Code.
The Proposition contained in the majority decision is even of much wider scope
than is above stated, for it conveys the idea that all the functions of the executive
branch of the government are in the President, with the executive departments as
mere adjuncts to him and the department secretaries his mere assistants or agents
with no authority, function or responsibility of their own, except those emanating from
the President, and that, therefore, as they cannot act but at the will of the President,
all their acts, unless disapproved or reprobated by the President, are presumptively
the acts of the President. This sweeping statement is undoubtedly inspired by section
1, Article VII, of the Constitution, which provides that "the executive power shall be
vested in a President of the Philippines." It disregards, however, the true
meaning of other provisions of the Constitution, such as paragraph 1 of section
12 of the same article, which provides that "the executive departments of the present
Government of the Philippine Islands shall continue as now authorized by lawuntil the
National Assembly shall provide otherwise." (Emphasis mine.)
According to section 74 of the Administrative Code " . . . the departments are
established for the proper distributionof the work of the executive, for the
performance of the functions expressly assigned to them by law, and in order that
each branch of the administration may have a chief responsible for its direction and
policy." (Emphasis mine.) To give effect to this provision, each department head is
expressly vested with broad as well as specific powers commensurate with his
responsibility, such as, the power to " . . . promulgate, whenever he may see fit to do
so, all rules, regulations, orders circulars, . . . necessary to regulate the proper
working and harmonious and efficient administration of each and allof the offices and
dependencies of his department, and for the strict enforcement and proper
execution of the laws relative to matters under the jurisdictions of said department"
(section 79-B, Adm. Code); the power of direction and supervision over such bureaus
and offices under his jurisdiction, and to repeal or modify the decisions of the
chief of said bureaus or offices when advisable in the public interest (section 79-C,
Adm. Code; section 37, Act No. 4007); the power to appoint subordinate officers and
employees whose appointment is not expressly vested by law in the President, and to
remove and punish them except as specially provided otherwise in accordance with
the Civil Service Law (section 79-D, Adm. Code), etc. All these powers are continued in
force by the Constitution.
Thus, when in one provision the Constitution vests in the President of the
Philippines the executive power of the government, in another the same Constitution
recognizes the powers of the department secretaries conferred upon them by law. The
apparent conflict between the two provisions is reconciled by the Constitution itself by
means of the power ofcontrol vested in the President over the executive departments.
That power of control could not have been intended to wipe out or supersede all the

powers of the department secretaries, for, otherwise, those powers would not have
been continued in force by the Constitution. It would certainly be an absurdity in the
Constitution to recognize and at the same time abrogate those powers. On the
contrary, the creation of the power of control implies the preservation, not the
destruction, of all the powers conferred by law upon the department secretaries. In
fact, the majority admits the existenceof those powers, subject, of course, to the
power of control of the President. Now, the power of control may or may not be
exercised. If not exercised, the acts of the department secretaries in
pursuance of their powers would remain in full force and effect, and are their own acts
and not the President's. If exercised, by way of disapproval or reprobation of the
acts ofthe department secretaries, the acts so reprobated are still their acts and not
the President's.
There is more theory than law in the statement that the personality of the
department secretaries is but the projection of that of the President. There is more
truth in the language used by Chief Justice Talt, as quoted in the majority opinion, to
the effect that 'each head of a department is, and must be, the President's alter
ego in the matters of that department where the President is required by law to
exercise authority' (emphasis mine). For it is only when the President exercises his
authority and powers that the department secretaries act merely as his assistants,
agents or advisers, and, in such cases, their acts are his. But when they act in
accordance with the powers vested in them by law, they act with a personality
separate from and no less distinct than that of the President himself, if the recognition
accorded to their powers by the Constitution is to mean anything at all. And the fact
that the government we have instituted is a presidential one in no wise destroys what
the law has created and the Constitution has recognized. The presidential
system of government could not have been intended to supersede a
government of laws for a government ofmen.
If, as stated by the majority, all the official acts of the secretaries of the
departments are presumptively the acts ofthe President, it must follow that the
President is presumptively responsible therefor. That this corollary proposition cannot
be maintained is obvious. At every instance, he would be called upon to accountability
for acts of which he might not have any knowledge at all and for which he could in no
wise be head responsible. In the complicated activities of each department,
multifarious official acts have to be performed from time to time. Very often these
acts are performed in pursuance of powers and duties expressly lodged in them by
law; and, occasionally, upon authority and direction of the President in the latter's
exercise of his power of control. In the performance of such acts, executive and
administrative discretion had to be exercised for which responsibility must accordingly
be exclusive and purely personal. To hold the President presumptively responsible for
such acts would suggest, in effect, the necessity on the part of the President to
exercise constant and unrelaxing vigilance over al. the official acts of the
secretaries of the apartments, under hazard ofbeing involved in endless difficulties.
The manifold exigencies of government render such a suggestion inconceivable.
My view, therefore, is that the department secretaries may act in a purely
advisory capacity or under the direction and authority of the president in the latter's
exercise of his constitutional power of control, and, in such cases, the proposition
contained in the majority decision applies, because, then, the department secretaries
act purely for the Chief Executive. However, they may also act in pursuance of the
powers and duties conferred upon them by law and continued in force by the

Constitution, and, unless the President desires to intervene, in appropriate cases, by

interposing his constitutional power of control, the acts of the department secretaries
are exclusively their own, and they are likewise exclusively responsible therefor. It
follows that when a department secretary acts in his own name and not by order or
authority of the President, he is presumed to be so acting in pursuance of a power
conferred upon him by law, and when the power is not thus conferred, his act is null
and void. And if the power is conferred expressly upon the President, he must exercise
its positively and in person with such assistance, advice and recommendation of the
corresponding department head, as he himself may choose to demand. Accordingly,
the bare statement made by the President of his non-objection to the action taken by
the Secretary of the Interior in the present case is not a sufficient exercise of his
power to suspend, for it may mean neither approval not disapproval. The President
probably believed, and indeed rightly as I shall hereafter show, that the power to
suspend the petitioner also resided in the Secretary of the Interior, and called upon to
exercise his power of supervision, he confined himself to making a mere
statement of non-objection to the latter's exercise of his power. This, in my opinion, is
the most rational explanation of the passive attitude thus observed by the President. I
an almost sure that had he intended to exercise his own power to suspend, he would
have done so, as usually, in a manner that would not admit of any possibility of doubt.
Moreover, besides the written statement of non-objection made by the
President, it is claimed by the Solicitor-General that the President expressly and orally
approved the order of suspension issued by the Secretary of the Interior. Such
supposed oral approval alleged in the respondent's answer is, however, deemed
controverted by the petitioner, according to section 104 of Act No. 190, and, not being
supported by proof, it cannot be considered as a true fact in the disposition of this
case.
If I agree with the result, it is not therefore on the broad proposition relied upon
by the majority, but from what is necessarily implied from express provisions of law.
Section 37 of Act No. 4007 provides:
"The provisions of the existing law to the contrary notwithstanding,
whenever a specific power, authority, duty, function, or activity is entrusted
to a chief of bureau, office, division or service, the same shall be
understood as also conferred upon the proper Department Head who shall
have authority to act directly in pursuance thereof, or to review, modify or
revoke any decision or action of said chief of bureau, office, division or
service."
There can be no question that the word "division" in the above provision has no
other reference than to provinces and municipalities (Chapter 2 and section 86, Adm.
Code).
It
is
then
evident
that
this
provision
confers
upon
the
Secretaryof the Interior the power residing in the provincial governor (section 2188,
Adm. Code) to decree the suspension of the petitioner pending an administrative
investigation of the charges against him. That this is the true meaning of the law, the
majority does not question.
Fear, however, has been expressed in the majority opinion that this view may
result in the complete abrogation ofthe powers of provincial and municipal officials
even in corporate affairs of local governments. Instances are cited in which the
Secretary of the Interior may exercise for himself the powers vested by law in
provincial governors and municipal mayors as to matters of both governmental and
corporate functions of provinces and municipalities, such as, the power to veto, the

power to appoint, and the power to enter into contracts. Whether or not the
Secretary of the Interior can this exercise the powers vested by law in provincial and
municipal executives in the instances cited, to the complete abrogation of provincial
and municipal autonomy, is a question which I need not discuss now. Other
provisions of law and a number of collateral questions may have to be inquired into if
any safe conclusion is to be formed. But even if, as feared, the law has the
effect of nullifying the powers conferred upon provincial and municipal executives,
can there be any doubt that the law can do so ? The same authority that creates
those powers may withdraw or qualify them at will or provide elective
measures of supervision over their exercise. The extent or even the existence of local
autonomy is a matter which lies within the exclusive prerogative of the Legislature to
define. If the law is clear, our duty to apply it is just as clear, irrespective of how
destructive it may be of the autonomy of local governments. To refuse to apply a law,
which is otherwise applicable and is valid and constitutional, simply because it does
violence to our theory of government, would, in effect, be imposing ourselves upon
the legislative department of the government and an intrusion into its own
sphereof constitutions, authority.
Moreover, the law is not of such "destructive authority" as the majority has
pictured it to be. The philosophy behind this provision is apparent. It is intended to
supply possible omissions or inactions on the part of the subordinate officers
concerned by reason of the entanglement arising from partisan activities. The power
which
the
law
confers
upon
the
department
head
is
undoubtedly
susceptible of abuses. But what power is not susceptible of abuse? In the
enactment ofthe law, the Legislature undoubtedly relied much on the
sense of patriotism and sound judgment of the department head. It is perhaps the
intention of the law that the department head should exercise his power in a manner
compatible with the autonomy given the local governments, and that he should act
directly only when the exigencies of the situation require him to act in the
interest of the Nation. Thus, the department head is given ample discretion. The
possibility of a mischievous or disastrous abuse of power on his part is not entirely
without any remedy at all. The presidential power ofcontrol over executive
departments and the existence of judicial remedies may afford effective check or
redress. In the instant case, there is no showing that the Secretary of the Interior has
abused, or ever intended to abuse, the power ofsuspension. If a capricious and
whimsical use of such power presents itself to us for determination in some future
time, then and there must we declare where one power begins and the other ends.
As the law, therefore, is not unconstitutional, we would be ignoring its clear
provision if not applied in this case.
||| (Villena v. Secretary of the Interior, G.R. No. 46570, [April 21, 1939], 67 PHIL 451-475)

125. PHILCOMSAT V ALCUAZ

EN BANC
[G.R. No. 84818. December 18, 1989.]
PHILIPPINE
COMMUNICATIONS
SATELLITE
CORPORATION, petitioner, vs. JOSE LUIS A. ALCUAZ, as NTC
Commissioner,
and
NATIONAL
TELECOMMUNICATIONS
COMMISSION, respondents.
Rilloraza, Africa, De Ocampo & Africa for petitioner.
Victor de la Serna for respondent Alcuaz.
SYLLABUS
1. ADMINISTRATIVE LAW; REQUISITES OF A VALID DELEGATION OF LEGISLATIVE POWER.
Fundamental is the rule that delegation of legislative power may be sustained only
upon the ground that some standard for its exercise is provided and that the legislature
in making the delegation has prescribed the manner of the exercise of the delegated
power. Therefore, when the administrative agency concerned, respondent NTC in this
case, establishes a rate, its act must both be non-confiscatory and must have been
established in the manner prescribed by the legislature; otherwise, in the absence of a
fixed standard, the delegation of power becomes unconstitutional.
2. ID.; RATE-FIXING POWER; STANDARDS REQUIRED; MAY BE IMPLIED. In case of a
delegation of rate-fixing power, the only standard which the legislature is required to
prescribe for the guidance of the administrative authority is that the rate be reasonable
and just. However, it has been held that even in the absence of an express requirement
as to reasonableness, this standard may be implied. The inherent power and authority of
the State, or its authorized agent, to regulate the rates charged by public utilities should
be subject always to the requirement that the rates so fixed shall be reasonable and just.
A commission has no power to fix rates which are unreasonable or to regulate them

arbitrarily. This basic requirement of reasonableness comprehends such rates which must
not be so low as to be confiscatory, or too high as to be oppressive. What is a just and
reasonable rate is not a question of formula but of sound business judgment based upon
the evidence; it is a question of fact calling for the exercise of discretion, good sense,
and a fair, enlightened and independent judgment. In determining whether a rate is
confiscatory, it is essential also to consider the given situation, requirements and
opportunities of the utility. A method often employed in determining reasonableness is
the fair return upon the value of the property to the public utility. Competition is also a
very important factor in determining the reasonableness of rates since a carrier is
allowed to make such rates as are necessary to meet competition. (Mla. Railroad Co. vs.
A.L. Ammon Trans. Co. Inc. 218 Phil. 900 (1920)
3. ID.; ID.; INSTANCES WHEN THE SAME WAS CLASSIFIED AS QUASI-JUDICIAL WHEN SAME
WAS CLASSIFIED. In Vigan Electric Light Co., Inc. vs. Public Service Commission, we
made a categorical classification as to when the rate-fixing power of administrative
bodies is quasi-judicial and when it is legislative, thus: "Moreover, although the rulemaking power end even the power to fix rates when such rules and/or rates are meant
to apply to all enterprises of a given kind throughout the Philippines may partake of a
legislative character, such is not the nature of the order complained of. Indeed, the same
applies exclusively to petitioner herein. What is more, it is predicated upon the finding of
fact based upon a report submitted by the General Auditing Office that petitioner is
making a profit of more than 12% of its invested capital, which is denied by petitioner.
Obviously, the latter is entitled to cross-examine the maker of said report, and to
introduce evidence to disprove the contents thereof and/or explain or complement the
same, as well as to refute the conclusion drawn therefrom by the respondent. In other
words, in making said finding of fact, respondent performed a function partaking of a
quasi-judicial character, the valid exercise of which demands previous notice and
hearing." This rule was further explained in the subsequent case of The Central Bank of
the Philippines vs. Cloribel, et al. to wit: "It is also clear from the authorities that where
the function of the administrative body is legislative, notice of hearing is not required by
due process of law (See Oppenheiner, Administrative Law, 2 Md. L.R. 185, 204, supra,
where it is said: If the nature of the administrative agency is essentially legislative, the
requirements of notice and hearing are not necessary. The validity of a rule of future
action which affects a group, if vested rights of liberty or property are not involved, is not
determined according to the same rules which apply in the case of the direct application
of a policy to a specific individual) . . . It is said in 73 C.J.S. Public Administrative Bodies
and Procedure, sec. 130, pages 452 and 453: Aside from statute, the necessity of notice
and hearing in an administrative proceeding depends on the character of the proceeding
and the circumstances involved. In so far as generalization is possible in view of the
great variety of administrative proceedings, it may be stated as a general rule that
notice and hearing are not essential to the validity of administrative action where the
administrative body acts in the exercise of executive, administrative, or legislative
functions; but where a public administrative body acts in a judicial or quasi-judicial
matter, and its acts are particular and immediate rather than general and prospective,
the person whose rights or property may be affected by the action is entitled to notice
and hearing.
4. ID.; ID.; REQUIREMENTS OF NOTICE AND HEARING NECESSARY EVEN IF THE ORDER IS
TEMPORARY IN NATURE. While respondents may fix a temporary rate pending final
determination of the application of petitioner, such rate-fixing order, temporary though it
may be, is not exempt from the statutory procedural requirements of notice and hearing,
as well as the requirement of reasonableness. Assuming that such power is vested in

NTC, it may not exercise the same in an arbitrary and confiscatory manner. Categorizing
such an order as temporary in nature does not perforce entail the applicability of a
different rule of statutory procedure than would otherwise be applied to any other order
on the same matter unless otherwise provided by the applicable law. In the case at bar,
the applicable statutory provision is Section 16(c) of the Public Service Act which
provides: "Section 16. Proceedings of the Commission, upon notice and hearing. The
Commission shall have power, upon proper notice and hearing in accordance with the
rules and provisions of this Act, subject to the limitations and exceptions mentioned and
saving provisions to the contrary: (c) To fix and determine individual or joint rates, . . .
which shall be imposed, observed and followed thereafter by any public service; . . . ."
5. ID.; ID.; TEMPORARY RATE-FIXING ORDER; A FINAL LEGISLATIVE ACT AS TO THE
PERIOD DURING WHICH IT HAS TO REMAIN IN FORCE. The order requires the new
reduced rates to be made effective on a specified date. It becomes a final legislative act
as to the period during which it has to remain in force pending the final determination of
the case. An order of respondent NTC prescribing reduced rates, even for a temporary
period, could be unjust, unreasonable or even confiscatory, especially if the rates are
unreasonably low, since the utility permanently loses its just revenue during the
prescribed period. In fact, such order is in effect final insofar as the revenue during the
period covered by the order is concerned.
6. ID.; POWER TO REGULATE THE CONDUCT AND BUSINESS OF PUBLIC UTILITIES;
LIMITATION. The rule is that the power of the State to regulate the conduct and
business of public utilities is limited by the consideration that it is not the owner of the
property of the utility, or clothed with the general power of management incident to
ownership, since the private right of ownership to such property remains and is not to be
destroyed by the regulatory power. The power to regulate is not the power to destroy
useful and harmless enterprises, but is the power to protect, foster, promote, preserve,
and control with due regard for the interest, first and foremost, of the public, then of the
utility and of its patrons. Any regulation, therefore, which operates as an effective
confiscation of private property or constitutes an arbitrary or unreasonable infringement
of property rights is void, because it is repugnant to the constitutional guaranties of due
process and equal protection of the laws.

DECISION

REGALADO, J p:
This case is posed as one of first impression in the sense that it involves the public utility
services of the petitioner Philippine Communications Satellite Corporation (PHILCOMSAT,
for short) which is the only one rendering such services in the Philippines. cdrep
The petition before us seeks to annul and set aside an Order 1 issued by respondent
Commissioner Jose Luis Alcuaz of the National Telecommunications Commission
(hereafter, NTC), dated September 2, 1988, which directs the provisional reduction of the
rates which may be charged by petitioner for certain specified lines of its services by
fifteen percent (15%) with the reservation to make further reductions later, for being
violative of the constitutional prohibition against undue delegation of legislative power
and a denial of procedural, as well as substantive, due process of law. llcd

The antecedental facts as summarized by petitioner 2 are not in dispute. By virtue

of Republic Act No. 5514, PHILCOMSAT was granted "a franchise to establish, construct,
maintain and operate in the Philippines, at such places as the grantee may select,
station or stations and associated equipment and facilities for international satellite
communications." Under this franchise, it was likewise granted the authority to
"construct and operate such ground facilities as needed to deliver telecommunications
services from the communications satellite system and ground terminal or terminals."

Pursuant to said franchise, petitioner puts on record that it undertook the following
activities and established the following installations:
1. In 1967, PHILCOMSAT established its provisional earth station in Pinugay,
Rizal.
2. In 1968, earth station standard "A" antenna (Pinugay I) was established.
Pinugay I provided direct satellite communication links with the Pacific
Ocean Region (the United States, Australia, Canada, Hawaii, Guam, Korea,
Thailand, China [PROC], New Zealand and Brunei) thru the Pacific Ocean
INTELSAT satellite.
3. In 1971, a second earth station standard "A" antenna (Pinugay II) was
established. Pinugay II provided links with the Indian Ocean Region (major
cities in Europe, Middle East, Africa, and other Asia Pacific countries
operating within the region) thru the Indian Ocean INTELSAT satellite.
4. In 1983, a third earth station standard "B" antenna (Pinugay III) was
established to temporarily assume the functions of Pinugay I and then
Pinugay II while they were being refurbished. Pinugay III now serves as
spare or reserved antenna for possible contingencies.
5. In 1983, PHILCOMSAT constructed and installed a standard "B" antenna
at Clark Air Field, Pampanga as a television receive-only earth station which
provides the U.S. Military bases with a 24-hour television service.
6. In 1989, petitioner completed the installation of a third standard "A"
earth station (Pinugay IV)to take over the links in Pinugay I due to
obsolescence. 3
By designation of the Republic of the Philippines, the petitioner is also the sole signatory
for the Philippines in the Agreement and the Operating Agreement relating to the
International Telecommunications Satellite Organization (INTELSAT) of 115 member
nations, as well as in the Convention and the Operating Agreement of the International
Maritime Satellite Organization (INMARSAT) of 53 member nations, which two global
commercial telecommunications satellite corporations were collectively established by
various states in line with the principles set forth in Resolution 1721 (XVI) of the General
Assembly of the United Nations. llcd
Since 1968, the petitioner has been leasing its satellite circuits to:
1. Philippine Long Distance Telephone Company;
2. Philippine Global Communications, Inc.;
3. Eastern Telecommunications Phils., Inc.;

4. Globe Mackay Cable and Radio Corp. ITT; and

5. Capitol Wireless, Inc.
or their predecessors-in-interest. The satellite services thus provided by petitioner
enable said international carriers to serve the public with indispensable
communication services, such as overseas telephone, telex, facsimile, telegrams, high
speed data, live television in full color, and television standard conversion from
European to American or vice versa.
Under Section 5 of Republic Act No. 5514, petitioner was exempt from the jurisdiction of
the then Public Service Commission, now respondent NTC. However, pursuant
to Executive Order No. 196 issued on June 17, 1987, petitioner was placed under the
jurisdiction, control and regulation of respondent NTC, including all its facilities and
services and the fixing of rates. Implementing said Executive Order No. 196, respondents
required petitioner to apply for the requisite certificate of public convenience and
necessity covering its facilities and the services it renders, as well as the corresponding
authority to charge rates therefor. prcd
Consequently, under date of September 9, 1987, petitioner filed with respondent NTC an
application 4 for authority to continue operating and maintaining the same facilities it
has been continuously operating and maintaining since 1967, to continue providing the
international satellite communications services it has likewise been providing since 1967,
and to charge the current rates applied for in rendering such services. Pending hearing, it
also applied for a provisional authority so that it can continue to operate and maintain
the above mentioned facilities, provide the services and charge therefor the aforesaid
rates therein applied for.
On September 16, 1987, petitioner was granted a provisional authority to continue
operating its existing facilities, to render the services it was then offering, and to charge
the rates it was then charging. This authority was valid for six (6) months from the date
of said order. 5 When said provisional authority expired on March 17, 1988, it was
extended for another six (6) months, or up to September 16, 1988.
The NTC order now in controversy had further extended the provisional authority of the
petitioner for another six (6) months, counted from September 16, 1988, but it directed
the petitioner to charge modified reduced rates through a reduction of fifteen percent
(15%) on the present authorized rates. Respondent Commissioner ordered said reduction
on the following ground:
"The Commission in its on-going review of present service rates takes note
that after an initial evaluation by the Rates Regulation Division of the
Common Carriers Authorization Department of the financial statements of
applicant, there is merit in a REDUCTION in some of applicant's rates,
subject to further reductions, should the Commission finds (sic) in its
further evaluation that more reduction should be effected either on the
basis of a provisional authorization or in the final consideration of the
case." 6
PHILCOMSAT assails the above-quoted order for the following reasons:
1. The enabling act (Executive Order No. 546) of respondent NTC empowering it to fix
rates for public service communications does not provide the necessary standards
constitutionally required, hence there is an undue delegation of legislative power,
particularly the adjudicatory powers of NTC;

2. Assuming arguendo that the rate-fixing power was properly and constitutionally
conferred, the same was exercised in an unconstitutional manner, hence it is ultra
vires, in that (a) the questioned order violates procedural due process for having been
issued without prior notice and hearing; and (b) the rate reduction it imposes is unjust,
unreasonable and confiscatory, thus constitutive of a violation of substantive due
process.
I. Petitioner asseverates that nowhere in the provisions of Executive Order No. 546,
providing for the creation of respondent NTC and granting its rate-fixing powers, nor
of Executive Order No. 196, placing petitioner under the jurisdiction of respondent NTC,
can it be inferred that respondent NTC is guided by any standard in the exercise of its
rate-fixing and adjudicatory powers. While petitioner in its petition-in-chief raised the
issue of undue delegation of legislative power, it subsequently clarified its said
submission to mean that the order mandating a reduction of certain rates is undue
delegation not of legislative but of quasi-judicial power to respondent NTC, the exercise
of which allegedly requires an express conferment by the legislative body.
Whichever way it is presented, petitioner is in effect questioning the constitutionality of
Executive Orders Nos. 546 and 196 on the ground that the same do not fix a standard for
the exercise of the power therein conferred.
We hold otherwise.
Fundamental is the rule that delegation of legislative power may be sustained only upon
the ground that some standard for its exercise is provided and that the legislature in
making the delegation has prescribed the manner of the exercise of the delegated
power. Therefore, when the administrative agency concerned, respondent NTC in this
case, establishes a rate, its act must both be non-confiscatory and must have been
established in the manner prescribed by the legislature; otherwise, in the absence of a
fixed standard, the delegation of power becomes unconstitutional. In case of a
delegation of rate-fixing power, the only standard which the legislature is required to
prescribe for the guidance of the administrative authority is that the rate be reasonable
and just. However, it has been held that even in the absence of an express requirement
as to reasonableness, this standard may be implied. 7
It becomes important then to ascertain the nature of the power delegated to respondent
NTC and the manner required by the statute for the lawful exercise thereof.
Pursuant to Executive Orders Nos. 546 and 196, respondent NTC is empowered, among
others, to determine and prescribe rates pertinent to the operation of public service
communications which necessarily include the power to promulgate rules and
regulations in connection therewith. And, under Section 15(g) of Executive Order No.
546, respondent NTC should be guided by the requirements of public safety, public
interest and reasonable feasibility of maintaining effective competition of private entities
in communications and broadcasting facilities. Likewise, in Section 6(d) thereof, which
provides for the creation of the Ministry of Transportation and Communications with
control and supervision over respondent NTC, it is specifically provided that the national
economic viability of the entire network or components of the communications systems
contemplated therein should be maintained at reasonable rates. We need not go into an
in-depth analysis of the pertinent provisions of the law in order to conclude that
respondent NTC, in the exercise of its rate-fixing power, is limited by the requirements of
public safety, public interest, reasonable feasibility and reasonable rates, which
conjointly more than satisfy the requirements of a valid delegation of legislative power.

II. On another tack, petitioner submits that the questioned order violates procedural due
process because it was issuedmotu proprio, without notice to petitioner and without the
benefit of a hearing. Petitioner laments that said order was based merely on an "initial
evaluation," which is a unilateral evaluation, but had petitioner been given an
opportunity to present its side before the order in question was issued, the confiscatory
nature of the rate reduction and the consequent deterioration of the public service could
have been shown and demonstrated to respondents. Petitioner argues that the function
involved in the rate fixing-power of NTC is adjudicatory and hence quasi-judicial, not
quasi-legislative; thus, notice and hearing are necessary and the absence thereof results
in a violation of due process.

Respondents admit that the application of a policy like the fixing of rates as exercised by
administrative bodies is quasi-judicial rather than quasi-legislative: that where the
function of the administrative agency is legislative, notice and hearing are not required,
but where an order applies to a named person, as in the instant case, the function
involved is adjudicatory. 8Nonetheless, they insist that under the facts obtaining the
order in question need not be preceded by a hearing, not because it was issued pursuant
to respondent NTC's legislative function but because the assailed order is merely
interlocutory, it being an incident in the ongoing proceedings on petitioner's application
for a certificate of public convenience; and that petitioner is not the only primary source
of data or information since respondent is currently engaged in a continuing review of
the rates charged.
We find merit in petitioner's contention.
In Vigan Electric Light Co., Inc. vs. Public Service Commission, 9 we made a categorical
classification as to when the rate-fixing power of administrative bodies is quasi-judicial
and when it is legislative, thus:
"Moreover, although the rule-making power end even the power to fix rates
when such rules and/or rates are meant to apply to all enterprises of a
given kind throughout the Philippines may partake of a legislative
character, such is not the nature of the order complained of. Indeed, the
same applies exclusively to petitioner herein. What is more, it is predicated
upon the finding of fact based upon a report submitted by the General
Auditing Office that petitioner is making a profit of more than 12% of its
invested capital, which is denied by petitioner. Obviously, the latter is
entitled to cross-examine the maker of said report, and to introduce
evidence to disprove the contents thereof and/or explain or complement
the same, as well as to refute the conclusion drawn therefrom by the
respondent. In other words, in making said finding of fact, respondent
performed a function partaking of a quasi-judicial character, the valid
exercise of which demands previous notice and hearing."
This rule was further explained in the subsequent case of The Central Bank of the
Philippines vs. Cloribel, et al. 10 to wit:
"It is also clear from the authorities that where the function of the
administrative body is legislative, notice of hearing is not required by due
process of law (See Oppenheimer, Administrative Law, 2 Md. L.R. 185,
204, supra, where it is said: 'If the nature of the administrative agency is
essentially legislative, the requirements of notice and hearing are not

necessary. The validity of a rule of future action which affects a group, if

vested rights of liberty or property are not involved, is not determined
according to the same rules which apply in the case of the direct
application of a policy to a specific individual') . . . It is said in 73 C.J.S.
Public Administrative Bodies and Procedure, sec. 130, pages 452 and 453:
'Aside from statute, the necessity of notice and hearing in an administrative
proceeding depends on the character of the proceeding and the
circumstances involved. In so far as generalization is possible in view of the
great variety of administrative proceedings, it may be stated as a general
rule that notice and hearing are not essential to the validity of
administrative action where the administrative body acts in the exercise of
executive, administrative, or legislative functions; but where a public
administrative body acts in a judicial or quasi-judicial matter, and its acts
are particular and immediate rather than general and prospective, the
person whose rights or property may be affected by the action is entitled to
notice and hearing." 11
The order in question which was issued by respondent Alcuaz no doubt contains all the
attributes of a quasi-judicial adjudication. Foremost is the fact that said order pertains
exclusively to petitioner and to no other. Further, it is premised on a finding of fact,
although patently superficial, that there is merit in a reduction of some of the rates
charged based on an initial evaluation of petitioner's financial statements without
affording petitioner the benefit of an explanation as to what particular aspect or aspects
of the financial statements warranted a corresponding rate reduction. No rationalization
was offered nor were the attending contingencies, if any, discussed, which prompted
respondents to impose as much as a fifteen percent (15%) rate reduction. It is not farfetched to assume that petitioner could be in a better position to rationalize its rates visa-vis the viability of its business requirements. The rates it charges result from an
exhaustive and detailed study it conducts of the multi-faceted intricacies attendant to a
public service undertaking of such nature and magnitude. We are, therefore, inclined to
lend greater credence to petitioner's ratiocination that an immediate reduction in its
rates would adversely affect its operations and the quality of its service to the public
considering the maintenance requirements, the projects it still has to undertake and the
financial outlay involved. Notably, petitioner was not even afforded the opportunity to
cross-examine the inspector who issued the report on which respondent NTC based its
questioned order. LibLex
At any rate, there remains the categorical admission made by respondent NTC that the
questioned order was issued pursuant to its quasi-judicial functions. It, however, insists
that notice and hearing are not necessary since the assailed order is merely incidental to
the entire proceedings and, therefore, temporary in nature. This postulate is bereft of
merit.
While respondents may fix a temporary rate pending final determination of the
application of petitioner, such rate-fixing order, temporary though it may be, is not
exempt from the statutory procedural requirements of notice and hearing, as well as the
requirement of reasonableness. Assuming that such power is vested in NTC, it may not
exercise the same in an arbitrary and confiscatory manner. Categorizing such an order as
temporary in nature does not perforce entail the applicability of a different rule of
statutory procedure than would otherwise be applied to any other order on the same
matter unless otherwise provided by the applicable law. In the case at bar, the applicable
statutory provision is Section 16(c) of the Public Service Act which provides:

"Section 16. Proceedings of the Commission, upon notice and hearing.

The Commission shall have power, upon proper notice and hearing in
accordance with the rules and provisions of this Act, subject to the
limitations and exceptions mentioned and saving provisions to the contrary:
xxx xxx xxx
(c) To fix and determine individual or joint rates, . . . which shall be
imposed, observed and followed thereafter by any public service; . . . ."
There is no reason to assume that the aforesaid provision does not apply to respondent
NTC, there being no limiting, excepting, or saving provisions to the contrary in Executive
Orders Nos. 546 and 196.
It is thus clear that with regard to rate-fixing, respondent has no authority to make such
order without first giving petitioner a hearing, whether the order be temporary or
permanent, and it is immaterial whether the same is made upon a complaint, a summary
investigation, or upon the commission's own motion as in the present case. That such a
hearing is required is evident in respondents' order of September 16, 1987 in NTC Case
No. 8794 which granted PHILCOMSAT a provisional authority "to continue operating its
existing facilities, to render the services it presently offers, and to charge the rates as
reduced by them" under the condition that "(s)ubject to hearing and the final
consideration of the merit of this application, the Commission may modify, revise or
amend the rates . . .." 12
While it may be true that for purposes of rate-fixing respondents may have other sources
of information or data, still, since a hearing is essential, respondent NTC should act solely
on the basis of the evidence before it and not on knowledge or information otherwise
acquired by it but which is not offered in evidence or, even if so adduced, petitioner was
given no opportunity to controvert.
Again, the order requires the new reduced rates to be made effective on a specified date.
It becomes a final legislative act as to the period during which it has to remain in force
pending the final determination of the case. 13 An order of respondent NTC prescribing
reduced rates, even for a temporary period, could be unjust, unreasonable or even
confiscatory, especially if the rates are unreasonably low, since the utility permanently
loses its just revenue during the prescribed period. In fact, such order is in effect final
insofar as the revenue during the period covered by the order is concerned. Upon a
showing, therefore, that the order requiring a reduced rate is confiscatory, and will
unduly deprive petitioner of a reasonable return upon its property, a declaration of its
nullity becomes inductible, which brings us to the issue on substantive due process.
III. Petitioner contends that the rate reduction is confiscatory in that its implementation
would virtually result in a cessation of its operations and eventual closure of business. On
the other hand, respondents assert that since petitioner is operating its communications
satellite facilities through a legislative franchise, as such grantee it has no vested right
therein. What it has is merely a privilege or license which may be revoked at will by the
State at any time without necessarily violating any vested property right of herein
petitioner. While petitioner concedes this thesis of respondent, it counters that the
withdrawal of such privilege should nevertheless be neither whimsical nor arbitrary, but
it must be fair and reasonable.

There is no question that petitioner is a mere grantee of a legislative franchise which is

subject to amendment, alteration, or repeal by Congress when the common good so
requires. 14 Apparently, therefore, such grant cannot be unilaterally revoked absent a
showing that the termination of the operation of said utility is required by the common
good.
The rule is that the power of the State to regulate the conduct and business of public
utilities is limited by the consideration that it is not the owner of the property of the
utility, or clothed with the general power of management incident to ownership, since
the private right of ownership to such property remains and is not to be destroyed by the
regulatory power. The power to regulate is not the power to destroy useful and harmless
enterprises, but is the power to protect, foster, promote, preserve, and control with due
regard for the interest, first and foremost, of the public, then of the utility and of its
patrons. Any regulation, therefore, which operates as an effective confiscation of private
property or constitutes an arbitrary or unreasonable infringement of property rights is
void, because it is repugnant to the constitutional guaranties of due process and equal
protection of the laws. 15
Hence, the inherent power and authority of the State, or its authorized agent, to regulate
the rates charged by public utilities should be subject always to the requirement that the
rates so fixed shall be reasonable and just. A commission has no power to fix rates which
are unreasonable or to regulate them arbitrarily. This basic requirement of
reasonableness comprehends such rates which must not be so low as to be confiscatory,
or too high as to be oppressive. 16
What is a just and reasonable rate is not a question of formula but of sound business
judgment based upon the evidence; 17it is a question of fact calling for the exercise of
discretion, good sense, and a fair, enlightened and independent judgment 18In
determining whether a rate is confiscatory, it is essential also to consider the given
situation, requirements and opportunities of the utility. A method often employed in
determining reasonableness is the fair return upon the value of the property to the public
utility. Competition is also a very important factor in determining the reasonableness of
rates since a carrier is allowed to make such rates as are necessary to meet
competition. 19
A cursory perusal of the assailed order reveals that the rate reduction is solely and
primarily based on the initial evaluation made on the financial statements of petitioner,
contrary to respondent NTC's allegation that it has several other sources of information
without, however, divulging such sources. Furthermore, it did not as much as make an
attempt to elaborate on how it arrived at the prescribed rates. It just perfunctorily
declared that based on the financial statements, there is merit for a rate reduction
without any elucidation on what implications and conclusions were necessarily inferred
by it from said statements. Nor did it deign to explain how the data reflected in the
financial statements influenced its decision to impose a rate reduction.
On the other hand, petitioner may likely suffer a severe drawback, with the consequent
detriment to the public service, should the order of respondent NTC turn out to be
unreasonable and improvident. The business in which petitioner is engaged is unique in
that its machinery and equipment have always to be taken in relation to the equipment
on the other end of the transmission arrangement. Any lack, aging, acquisition,
rehabilitation, or refurbishment of machinery and equipment necessarily entails a major
adjustment or innovation on the business of petitioner. As pointed out by petitioner, any
change in the sending end abroad has to be matched with the corresponding change in

the receiving end in the Philippines. conversely, any change in the receiving end abroad
has to be matched with the corresponding change in the sending end in the Philippines.
An inability on the part of petitioner to meet the variegations demanded by technology
could result in a deterioration or total failure of the service of satellite
communications. cdll
At present, petitioner is engaged in several projects aimed at refurbishing, rehabilitating,
and renewing its machinery and equipment in order to keep up with the continuing
changes of the times and to maintain its facilities at a competitive level with the
technological advances abroad. These projected undertakings were formulated on the
premise that rates are maintained at their present or at reasonable levels. Hence, an
undue reduction thereof may practically lead to a cessation of its business. While we
concede the primacy of the public interest in an adequate and efficient service, the same
is not necessarily to be equated with reduced rates. Reasonableness in the rates
assumes that the same is fair to both the public utility and the consumer. cdll
Consequently, we hold that the challenged order, particularly on the issue of rates
provided therein, being violative of the due process clause is void and should be nullified.
Respondents should now proceed, as they should heretofore have done, with the hearing
and determination of petitioner's pending application for a certificate of public
convenience and necessity and in which proceeding the subject of rates involved in the
present controversy, as well as other matters involved in said application, may be duly
adjudicated with reasonable dispatch and with due observance or our pronouncements
herein.
WHEREFORE, the writ prayed for is GRANTED and the order of respondents, dated
September 2, 1988, in NTC Case No. 87-94 is hereby SET ASIDE. The temporary
restraining order issued under our resolution of September 13, 1988, as specifically
directed against the aforesaid order of respondents on the matter of existing rates on
petitioner's present authorized services, is hereby made permanent.
SO ORDERED.
Fernan, (C.J.), Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Bidin,
Sarmiento, Corts, Grio-Aquino andMedialdea, JJ., concur.
Padilla, J., took no part.
||| (Philippine Communications Satellite Corp. v. Alcuaz, G.R. No. 84818, [December 18,
1989], 259 PHIL 707-725)

126. PELAEZ V AUDITOR GENERAL

EN BANC
[G.R. No. L-23825. December 24, 1965.]
EMMANUEL PELAEZ, petitioner, vs. THE AUDITOR GENERAL, responde
nt.
Zulueta, Gonzales, Paculdo & Associates for petitioner.
Solicitor General for respondent.
SYLLABUS
1.ADMINISTRATIVE LAW; POWER OF PRESIDENT TO CREATE MUNICIPALITIES. Since
January 1, 1960, when Republic Act No. 2370 became effective, barrios may "not be
created or their boundaries altered nor their names changed" except by Act of Congress
or of the corresponding provincial board "upon petition of a majority of the voters in the
areas affected" and the "recommendation of the council of the municipality or

municipalities in which the proposed barrio is situated." This statutory denial of the
presidential authority to create a new barrio implies a negation of the bigger power to
create municipalities, each of which consists of several barrios.
2.ID.; ID.; NATURE OF POWER TO CREATE MUNICIPALITIES. Whereas the power to fix a
common boundary, in order to avoid or settle conflicts of jurisdiction between adjoining
municipalities, may partake of an administrative nature involving, as it does, the
adoption of means and ways to carry into effect the law creating said
municipalities the authority to create municipal corporations is essentially legislative
in nature.
3.ID.; ID.; ID.; REQUISITES FOR VALID DELEGATION OF POWER. Although Congress may
delegate to another branch of the Government the power to fill in the details in the
execution, enforcement or administration of a law, it is essential that said law: (a) be
complete in itself, setting forth therein the policy to be executed, carried out or
implemented by the delegate; and (b) fix a standard - the limits of which are sufficiently
determinate or determinable to which the delegate must conform in the performance of
his functions.
4.ID.; ID.; ID.; ID.; REQUIREMENTS OF DUE DELEGATION OF POWER NOT MET BY SECTION
68 OF REVISED ADMINISTRATIVE CODE. Section 68 of the Revised Administrative
Code, insofar as it grants to the President the power to create municipalities, does not
meet the 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.
5.ID.; ID.; ID.; ID.; ID.; ABDICATION OF POWERS OF CONGRESS IN FAVOR OF THE
EXECUTIVE. If the validity of said delegation of powers, made in Section 68 of the
Revised Administrative Code, were upheld, there would no longer be any legal
impediment to a statutory grant of authority to the President to do anything which, in his
opinion, may be required by public welfare or public interest. Such grant of authority
would be a virtual abdication of the powers of Congress in favor of the Executive, and
would bring about a total collapse of the democratic system established by the
Constitution.
6.ID.; ID.; ID.; NATURE OF POWERS DEALT WITH IN SECTION 68 OF THE REVISED
ADMINISTRATIVE CODE. It is true that in Calalang vs. Williams (70 Phil., 726) and
People vs. Rosenthal (68 Phil., 328), this Court had upheld "public welfare" and "public
interest," respectively, as sufficient standards, for a valid delegation of the authority to
execute the law. But the doctrine laid down in these cases must be construed in relation
to the specific facts and issues involved therein, outside of which they do not constitute
precedents and have no binding effect. Both cases involved grants to administrative
officers of powers related to the exercise of their administrative functions, calling for the
determination of questions of fact. Such is not the nature of the powers dealt with in
Section 68 of the Revised Administrative Code. The creation of municipalities being
essentially and eminently legislative in character, the question whether or not "public
interest" demands the exercise of such power is not one of fact. It is purely a legislative
question (Carolina- Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 21.,
310-313, 315-318), or a political question (Udall vs. Severn, 79 p. 2d., 347-349).
7.ID.; ID., ID.; ID.; PROOF THAT ISSUANCE OF EXECUTIVE ORDERS IN QUESTION ENTAILS
EXERCISE OF PURELY LEGISLATIVE FUNCTIONS. The fact that Executive Orders Nos. 93
to 121, 124 and 126 to 129, creating thirty-three municipalities, were issued after the

legislative bills for the creation of the said municipalities had failed to pass Congress, is
the best proof that their issuance entails the exercise of purely legislative functions.
8.ID.; ID.; ID.; POWER OF CONTROL OVER LOCAL GOVERNMENTS. The power of control
under Section 10(a) of Article X of the Constitution implies the right of the President to
interfere in the exercise of such discretion as may be vested by law in the officers of the
executive departments, bureaus or offices of the national government, as well as to act
in lieu of such officers. This power is denied by the Constitution to the Executive, insofar
as local governments are concerned. With respect to the latter, the fundamental law
permits him to wield no more authority than that of checking whether said local
governments or the officers thereof perform their duties as provided by statutory
enactments. Hence, the President cannot interfere with local governments, so long as
the same or its officers act within the scope of their authority. He may not, for instance,
suspend an elective official of a regular municipality or take any disciplinary action
against him, except on appeal from a decision of the corresponding provincial board. If,
on the other hand, the President could create a municipality, he could, in effect, remove
any of its officials, by creating a new municipality and including therein the barrio in
which the official concerned resides, for his office would thereby become vacant (Section
2179, Revised Administrative Code). Thus, by merely brandishing the power to create a
new municipality, without actually creating it, he could compel local officials to submit to
his dictation, thereby, in effect, exercising over them the power of control denied to him
by the Constitution.
9.ID.; ID.; ID.; ID.; SECTION 68, REVISED ADMINISTRATIVE CODE, REPEALED BY THE
CONSTITUTION. The power of control of the President over executive departments,
bureaus or offices under Section 10 (a) of Article X of the Constitution implies no more
than the authority to assume directly the functions thereof or to interfere in the exercise
of discretion by its officials. Manifestly, such control does not include the authority either
to abolish an executive department or bureau, or to create a new one. As a
consequence, the alleged power of the President to create municipal corporations would
necessarily connote the exercise by him of an authority even greater than that of control
which he has over the executive departments, bureaus or offices. Instead of giving the
President less power over local governments than that vested in him over the executive
departments, bureaus or offices, it reverses the process and does the exact opposite, by
conferring upon him more power over municipal corporations than that which he has
over executive departments, bureaus or offices. Even if, therefore, it did not entail an
undue delegation of legislative powers, as it certainly does, said Section 68, as part of
the Revised Administrative Code, approved on March 10, 1917, must be deemed
repealed by the subsequent adoption of the Constitution in 1935, which is utterly
incompatible and inconsistent with said statutory enactment. (De los Santos vs. Mallare,
87 Phil., 289, 298-299.)
10.ID. ID.; ID.; MUNICIPAL OFFICIALS CONCERNED DULY REPRESENTED IN PRESENT CASE.
It is contended that not all the proper parties have been impleaded in the present
case. Suffice it to say that the records do not show, and the parties do not claim, that the
officers of any of the municipalities concerned have been appointed or elected and have
assumed office. At any rate, the Solicitor-General, who has appeared on behalf of
respondent Auditor General, is the officer authorized by law "to act and represent the
Government of the Philippines, its officers and agents, in any official investigation,
proceeding or matter requiring the services of a lawyer" (Section 1661, Revised
Administrative Code), and, in connection with the creation of the municipalities involved
in this case, which involves a political, not proprietary functions, said local officials, if

any, are mere agents or representatives of the national government. Their interest in the
case has accordingly been duly represented. (Mangubat vs. Osmea Jr., G.R. No. L12837, April 30, 1959; City of Cebu vs. Judge Piccio, G.R. Nos. L-13012 & L-14876,
December 31, 1960.)
11.ID.; ID.; ACTION NOT PREMATURE. The present action cannot be said to be
premature simply because respondentAuditor General has not yet acted on any of the
executive orders in question and has not intimated how he would act in connection
therewith. It is a matter of common knowledge that the President has for many years
issued executive orders creating municipal corporations and that the same have been
organized and are in actual operation, thus indicating, without peradventure of doubt,
that the expenditures incidental thereto have been sanctioned, approved or passed in
audit by the General Auditing Office and its officials. There is no reason to believe that
respondent would adopt a different policy as regards the new municipalities involved in
this case, in the absence of an allegation to such effect, and none has been made by
him.

DECISION

CONCEPCION, J p:
During the period from September 4 to October 29, 1964 the President of the Philippines,
purporting to act pursuant to Section 68 of the Revised Administrative Code, issued
Executive Orders Nos. 93 to 121, 124 and 126 to 129, creating thirty-three (33)
municipalities enumerated in the margin. 1 Soon after the date last mentioned, or on
November 10, 1964, petitioner Emmanuel Pelaez, as Vice-President of the Philippines
and as taxpayer, instituted the present special civil action, for a writ of prohibition with
preliminary injunction, against the Auditor General, to restrain him, as well as his
representatives and agents, from passing in audit any expenditure of public funds in
implementation of said executive orders and/or any disbursement by said municipalities.

Petitioner alleges that said executive orders are null and void, upon the ground that said
Section 68 has been impliedly repealed by Republic Act 2370 and constitutes an undue
delegation of legislative power. Respondent maintains the contrary view and avers that
the present action is premature and that not all proper parties referring to the officials
of the new political subdivisions in question have been impleaded. Subsequently, the
mayors of several municipalities adversely affected by the aforementioned executive
orders because the latter have taken away from the former the barrioscomposing the
new political subdivision intervened in the case. Moreover, Attorneys Enrique M.
Fernando and Emma Quisumbing-Fernando were allowed to and did appear as amici
curiae.
The third paragraph of Section 3 of Republic Act No. 2370, reads:
"Barrios shall not be created or their boundaries altered nor their
names changed except under the provisions of this Act or by Act of
Congress.
Pursuant to the first two (2) paragraphs of the same Section 3:

"All barrios existing at the time of the passage of this Act shall
come under the provisions hereof.
"Upon petition of a majority of the voters in the areas affected, a
new barrio may be created or the name of an existing one may be
changed by the provincial board of the province, upon
recommendation of the council of the municipality or municipalities in
which the proposed barrio is situated. The recommendation of the
municipal council shall be embodied in a resolution approved by at
least two-thirds of the entire membership of the said council: Provided,
however, That no new barrio may be created if its population is less
than five hundred persons."
Hence, since January 1, 1960, when Republic Act No. 2370 became effective, barrios may
"not be created or their boundaries altered nor their names changed" except by Act of
Congress or of the corresponding provincial board "upon petition of a majority of the
voters in the areas affected" and the "recommendation of the council of the municipality
or municipalities in which the proposed barrio is situated." Petitioner argues, accordingly:
"If the President, under this new law, cannot even create a barrio, can he create a
municipality which is composed of several barrios, since barrios are units of
municipalities?"
Respondent answers in the affirmative, upon the theory that a new municipality can be
created without creating new barrios,such as, by placing old barrios under the
jurisdiction of the new municipality. This theory overlooks, however, the main import of
the petitioner's argument, which is that the statutory denial of the presidential authority
to create a new barrioimplies a negation of the bigger power to create municipalities,
each of which consists of several barrios. The cogency and force of this argument is too
obvious to be denied or even questioned. Founded upon logic and experience, it cannot
be offset except by a clear manifestation of the intent of Congress to the contrary, and
no such manifestation, subsequent to the passage of Republic Act No. 2370. has been
brought to our attention.
Moreover, section 68 of the Revised Administrative Code, upon which the disputed
executive orders are based, provides:
"The (Governor-General) President of the Philippines may by
executive order define the boundary, or boundaries, of any province,
sub-province, municipality, [township] municipal district or other
political subdivision, and increase or diminish the territory comprised
therein, may divide any province into one or more subprovinces,
separate any political division other than a province, into such portions
as may be required, merge any of such subdivisions or portions with
another, name any new subdivision so created, and may change the
seat of government within any subdivision to such place therein as the
public welfare may require: Provided, That the authorization of the
(Philippine Legislature) Congress of the Philippines shall first be
obtained whenever the boundary of any province or subprovince is to
be defined or any province is to be divided into one or more
subprovinces. When action by the (Governor-General) President of the
Philippines in accordance herewith makes necessary a change of the
territory under the jurisdiction of any administrative officer or any
judicial officer, the (Governor-General) President of the Philippines,

with the recommendation and advice of the head of the Department

having executive control of such officer, shall redistrict the territory of
the several officers affected and assign such officers to the new
districts so formed.
"Upon the changing of the limits of political divisions in
pursuance of the foregoing authority, an equitable distribution of the
funds and obligations of the divisions thereby affected shall be made in
such
manner
as
may
be
recommended
by
the
(Insular Auditor) Auditor General and approved by the (GovernorGeneral) President of the Philippines."
Respondent alleges that the power of the President to create municipalities under this
section does not amount to an undue delegation of legislative power, relying
upon Municipality of Cardona vs. Municipality of Binagonan (36 Phil. 547), which, he
claims, has settled it. Such claim is untenable, for said case involved, not the creation of
a new municipality, but a meretransfer of territory from an already
existing municipality (Cardona) to another municipality (Binagonan), likewise, existing
at the time of and prior to said transfer (See Gov't of the P.I. ex rel. Municipality of
Cardona vs. Municipality of Binagonan [34 Phil. 518, 519-520], in consequence of the
fixing and definition, pursuant to Act No. 1748, of the common boundaries of two
municipalities.
It is obvious, however, that, whereas the power to fix such common boundary, in order to
avoid or settle conflicts of jurisdiction between adjoining municipalities, may partake of
an administrative nature involving, as it does, the adoption of means and ways
to carry into effect the law creating said municipalities the authority
to create municipal corporations is essentially legislative in nature. In the language of
other courts, it is "strictly a legislative function" (State ex rel. Higgins vs. Aicklen, 119 S.
425, January 2, 1959) or "solely and exclusively the exercise of legislative power"
(Udall vs. Severn, May 29, 1938, 79 P. 2d. 347-349). As the Supreme Court of Washington
has put it (Territory ex rel. Kelly vs. Stewart, February 13, 1890, 23 Pac. 405, 409),
"municipal corporations are purely the creatures of statutes."
Although 1 Congress may delegate to another branch of the government the power to fill
in the 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 2 and (b) fix a standard the limits of which are
sufficiently determinate or determinable to which the delegate must conform in the
performance of his functions. 2 Indeed, without a statutory declaration of policy, the
delegate would, in effect, make or formulate such 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. 2 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. In this connection, we do not overlook the fact that, under the last clause of
the first sentence of Section 68, the President:
". . . may change the seat of the government within any
subdivision to such place therein as the public welfare may require."
It is apparent, however, from the language of this clause, that the phrase "as the public
welfare may require" qualifies, notthe clauses preceding the one just quoted,
but only the place to which the seat of the government may be transferred. This fact
becomes more apparent when we consider that said Section 68 was originally Section 1
of Act No. 1748, 3 which provided, that "whenever in the judgment of the GovernorGeneral the public welfare requires, he may, by executive order", effect the changes
enumerated therein (as well as in said Section 68), including the change of the seat of
the government "to such place . . . as the public interest requires". The opening
statement of said Section 1 of Act No. 1748 which was not included in Section 68 of
the Revised Administrative Code governed the time at which, or the conditions under
which, the powers therein conferred could be exercised; whereas the last part of the first
sentence of said section referred exclusively to the place to which the seat of the
government was to be transferred.
At any rate, the conclusion would be the same, insofar as the case at bar is concerned,
even if we assumed that the phrase "as the public welfare may require", in said Section
68, qualifies all other clauses thereof. It is true that in Calalang vs. Williams(70 Phil. 726)
and People vs. Rosenthal (68 Phil. 328), this Court had upheld "public welfare" and
"public interest", respectively, as sufficient standards for a valid delegation of the
authority to execute the law. But, the doctrine laid down in these cases as all judicial
pronouncements must be construed in relation to the specific facts and issues
involved therein, outside of which they do not constitute precedents and have no binding
effect. 4 The law construed in the Calalang case conferred upon the Director of Public
Works, with the approval of the Secretary of Public Works and Communications, the
power to issue rules and regulations to promote safe transit upon national roads and
streets. Upon the other hand, the Rosenthal case referred to the authority of the Insular
Treasurer, under Act No. 2581, to issue and cancel certificates or permits for the sale of
speculative securities. Both cases involved grants to administrative officers of powers
related to the exercise of theiradministrative functions, calling for the determination of
questions of fact.

Such is not the nature of the powers dealt with in section 68. As above indicated, the
creation of municipalities, is not anadministrative function, but one which is essentially
and eminently legislative in character. The question whether or not "public interest"
demands the exercise of such power is not one of fact. It is "purely a legislative question"
(Carolina-Virginia Coastal Highway vs. Coastal Turnpike Authority, 74 S.E. 2d., 310-313,
315-318), or a political question (Udall vs. Severn, 79 P. 2d. 347-349). As the Supreme
Court of Wisconsin has aptly characterized it, "the question as to whether incorporation
is for the best interest of the community in any case is emphatically a question of public
policy and statecraft" (In re Village of North Milwaukee, 67 N. W. 1033, 1035-1037).
For this reason, courts of justice have annulled, as constituting undue delegation of
legislative powers, state laws granting the judicial department the power to determine
whether certain territories should be annexed to a particular municipality (Udallvs.

Severn, supra, 358-359); or vesting in a Commission the right to determine the plan and
frame of government of proposed villages and what functions shall be exercised by the
same, although the powers and functions of the village are specifically limited by statute
(In re Municipal Charters, 86 Atl. 307-308); or conferring upon courts the authority to
declare a given town or village incorporated, and designate its meter and bounds, upon
petition of a majority of the taxable inhabitants thereof, setting forth the area desired to
be included in such village (Territory ex rel Kelly vs. Stewart, 23 Pac. 405-409); or
authorizing the territory of a town, containing a given area and population, to be
incorporated as a town, on certain steps being taken by the inhabitants thereof and on
certain determination by a court and subsequent vote of the inhabitants in favor thereof,
insofar as the court is allowed to determine whether the lands embraced in the petition
"ought justly" to be included in the village, and whether the interest of the inhabitants
will be promoted by such incorporation, and to enlarge and diminish the boundaries of
the proposed village "as justice may require" (In re Villages of North Milwaukee, 67 N.W.
1035-1037); or creating a Municipal Board of Control which shall determine whether or
not the laying out, construction or operation of a toll road is in the "public interest" and
whether the requirements of the law had been complied with, in which case the Board
shall enter an order creating a municipal corporation and fixing the name of the same
(Carolina-Virginia Coastal Highway vs.Coastal Turnpike Authority, 74 S. E. 2d. 310).
Insofar as the validity of a delegation of power by Congress to the President is
concerned, the case of Schechter Poultry Corporation vs. U. S. (79 L. ed. 1570) is quite
relevant to the one at bar. The Schechter case involved the constitutionality of Section 3
of the National Industrial Recovery Act authorizing the President of the United States to
approve "codes of fair competition" submitted to him by one or more trade or industrial
associations or corporations which "impose no inequitable restrictions on admission to
membership therein and are truly representative," provided that such codes are not
designed "to promote monopolies or to eliminate or oppress small enterprises and will
not operate to discriminate against them, and will tend to effectuate the policy" of said
Act. The Federal Supreme Court held:
"To summarize and conclude upon this point: Sec. 3 of the
Recovery Act is without precedent. It supplies no standards for any
trade, industry or activity. It does not undertake to prescribe rules of
conduct to be applied to particular states of fact determined by
appropriate administrative procedure. Instead of prescribing rules of
conduct, it authorizes the making of codes to prescribe them. For that
legislative undertaking, Sec. 3 sets up no standards, aside from the
statement of the general aims of rehabilitation, correction and
expansion described in Sec. 1. In view of the scope of that broad
declaration, and of the nature of the few restrictions that are imposed,
the discretion of the President in approving or prescribing codes, and
thus enacting laws for the government of trade and industry
throughout the country, is virtually unfettered. We think that the codemaking authority thus conferred is an unconstitutional delegation of
legislative power."
If the term "unfair competition" is so broad as to vest in the President a discretion that is
"virtually unfettered", and, consequently, tantamount to a delegation of legislative
power, it is obvious that "public welfare", which has even a broader connotation, leads to
the same result. In fact, if the validity of the delegation of powers made in Section 68
were upheld, there would no longer be any legal impediment to a statutory grant of

authority to the President to do anything which, in his opinion, may be required by public
welfare or public interest. Such grant of authority would be a virtual abdication of the
powers of Congress in favor of the Executive, and would bring about a total collapse of
the democratic system established by our Constitution, which it is the special duty and
privilege of this Court to uphold.
It may not be amiss to note that the executive orders in question were issued after the
legislative bills for the creation of the municipalities involved in this case had failed to
pass Congress. A better proof of the fact that the issuance of said executive orders
entails the exercise of purely legislative functions can hardly be given.
Again, Section 10 (1) of Article VII of our fundamental law ordains:
"The President shall have control of all executive departments,
bureaus or offices, exercise general supervision over all local
governments as may be provided by law, and take care that the laws
be faithfully executed."
The power of control under this provision implies the right of the President to interfere in
the exercise of such discretion as may be vested by law in the officers of the executive
departments, bureaus, or offices of the national government, as well as to act in lieu of
such officers. This power is denied by the Constitution to the Executive, insofar as local
governments are concerned. With respect to the latter, the fundamental law permits him
to wield no more authority than that of checking whether said local governments or the
officers thereof perform their duties as provided by statutory enactments. Hence, the
President cannot interfere with local governments, so long as the same or its officers act
within the scope of their authority. He may not enact an ordinance which the municipal
council has failed or refused to pass, even if it had thereby violated a duty imposed
thereto by law, although he may see to it that the corresponding provincial officials take
appropriate disciplinary action therefor. Neither may he veto, set aside or annul an
ordinance passed by said council within the scope of its jurisdiction, no matter how
patently unwise it may be. He may not even suspend an elective official of a regular
municipality or take any disciplinary action against him, except on appeal from a
decision of the corresponding provincial board. 5
Upon the other hand, if the President could create a municipality, he could, in effect,
remove any of its officials, by creating a new municipality and including therein
the barrio in which the official concerned resides, for his office would thereby become
vacant. 6 Thus, by merely brandishing the power to create a new municipality (if he had
it), without actually creating it, he could compel local officials to submit to his dictation,
thereby, in effect, exercising over them the power of control denied to him by the
Constitution.
Then, also, the power of control of the President over executive departments, bureaus or
offices implies no more than the authority to assume directly the functions thereof or to
interfere in the exercise of discretion by its officials. Manifestly, such control does not
include the authority either to abolish an executive department or bureaus, or to create
a new one. As a consequence, the alleged power of the President to create municipal
corporations would necessarily connote the exercise by him of an authority
even greater than that of control which he has over the executive departments, bureaus
or offices. In other words, Section 68 of the Revised Administrative Code does not merely
fail to comply with the constitutional mandate above quoted. Instead of giving the
President less power over local governments than that vested in him over the executive

departments, bureaus or offices, it reverses the process and does the exact opposite, by
conferring upon him more power over municipal corporations than that which he has
over said executive departments, bureaus or offices.
In short, even if it did not entail an undue delegation of legislative powers, as it certainly
does, said Section 68, as part of the Revised Administrative Code, approved on March 10,
1917, must be deemed repealed by the subsequent adoption of the Constitution, in
1935, which is utterly incompatible and inconsistent with said statutory enactment. 7
There are only two (2) other points left for consideration, namely, respondent's claim (a)
that "not all the proper parties" referring to the officers of the newly created
municipalities "have been impleaded in this case", and (b) that "the present petition is
premature."
As regards the first point, suffice it to say that the records do not show, and the parties
do not claim, that the officers of any of said municipalities have been appointed or
elected and assumed office. At any rate, the Solicitor-General, who has appeared on
behalf of respondent Auditor General, is the officer authorized by law "to act and
represent the Government of the Philippines, its offices and agents, in any official
investigation, proceeding or matter requiring the services of a lawyer" (Section 1661,
Revised Administrative Code), and, in connection with the creation of the aforementioned
municipalities, which involves a political, not proprietary, function, said local officials, if
any, are mere agents or representatives of the national government. Their interest in the
case at bar has, accordingly, been, in effect, duly represented. 8

With respect to the second point, respondent alleges that he has not as yet acted on any
of the executive order in question and has not intimated how he would act in connection
therewith. It is however, a matter of common, public knowledge, subject to judicial
cognizance, that the President has, for many years, issued executive orders creating
municipal corporations and that the same have been organized and in actual operation,
thus indicating, without peradventure of doubt, that the expenditures incidental thereto
have been sanctioned, approved or passed in audit by the General Auditing Office and its
officials. There is no reason to believe, therefore, that respondent would adopt a different
policy as regards the new municipalities involved in this case, in the absence of an
allegation to such effect, and none has been made by him.
WHEREFORE the Executive Orders in question are hereby declared null and void ab
initio and the respondent permanently restrained from passing in audit any expenditure
of public funds in implementation of said Executive Orders or any disbursement by the
municipalities above referred to. It is so ordered.
Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and Dizon, JJ., concur.
Zaldivar, J., took no part.
Separate Opinions
BENGZON, J.P., J., concurring and dissenting:
A sign of progress in a developing nation is the rise of new municipalities. Fostering their
rapid growth has long been the aim pursued by all three branches of our Government.

So it was that the Governor-General during the time of the Jones Law was given authority
by the legislature (Act No. 1748) to act upon certain details with respect to said local
governments, such as fixing of boundaries, subdivisions and mergers. And the Supreme
Court, within the framework of the Jones Law, ruled in 1917 that the execution or
implementation of such details, did not entail abdication of legislative power
(Government vs. Municipality of Binangonan, 34 Phil. 518; Municipality of
Cardona vs. Municipality of Binangonan, 36 Phil. 547). Subsequently, Act No. 1748's
aforesaid statutory authorization was embodied in Section 68 of the Revised
Administrative Code. And Chief Executives since then up to the present continued to
avail of said provision, time and again invoking it to issue executive orders providing for
the creation of municipalities.
From September 4, 1964 to October 29, 1964 the President of the Philippines issued
executive orders to create thirty-three municipalities pursuant to Section 68 of the
Revised Administrative Code. Public funds thereby stood to be disbursed in
implementation of said executive orders.
Suing as private citizen and taxpayer, Vice-President Emmanuel Pelaez filed in this Court
a petition for prohibition with preliminary injunction against the Auditor General. It seeks
to restrain the respondent or any person acting in his behalf, from passing in audit any
expenditure of public funds in implementation of the executive orders aforementioned.
Petitioner contends that the President has no power to create a municipality by executive
order. It is argued that Section 68 of the Revised Administrative Code of 1917, so far as it
purports to grant any such power, is invalid or, at least, already repealed in the light of
the Philippine Constitution and Republic Act 2370 (The Barrio Charter).
Section 68 is again reproduced hereunder for convenience:
"SEC. 68.General authority of [Governor-General] President of
the Philippines to fix boundaries and make new subdivisions. The
[Governor-General] President of the Philippines may by executive order
define the boundary, or boundaries, of any province, subprovince,
municipality, [township] municipal district, or other political
subdivision, and increase or diminish the territory comprised therein,
may divide any province into one or more subprovinces, separate any
political division other than a province, into such portions as may be
required, merge any of such subdivisions or portions with another,
name any new subdivision so created, and may change the seat of
government within any subdivision to such place therein as the public
welfare may require: Provided, That the authorization of the [Philippine
Legislature] Congress of the Philippines shall first be obtained
whenever the boundary of any province or subprovince is to be defined
or any province is to be divided into one or more subprovinces. When
action by the [Governor- General] President of the Philippines in
accordance herewith makes necessary a change of the territory under
the jurisdiction of any administrative officer or any judicial officer, the
[Governor-General]
President
of
the
Philippines,
with
the
recommendation and advice of the head of the Department having
executive control of such officer, shall redistrict the territory of the
several officers affected and assign such officers to the new districts so
formed.

"Upon the changing of the limits of political divisions in

pursuance of the foregoing authority, an equitable distribution of the
funds and obligations of the division thereby affected shall be made in
such
manner
as
may
be
recommended
by
the
[Insular Auditor] Auditor General and approved by the [GovernorGeneral] President of the Philippines."
From such wording I believe that power to create a municipality is included: to "separate
any political division other than a province, into such portions as may be required, merge
any of such subdivisions or portions with another, name any new subdivision so created".
The issue, however, is whether the Legislature can validly delegate to the Executive such
power.
The power to create a municipality is legislative in character. American authorities have
therefore favored the view that it cannot be delegated; that what is delegable is not the
power to create municipalities but only the power to determine the existence of facts
under which creation of a municipality will result (37 Am. Jur. 628).
The test is said to lie in whether the statute allows any discretion on the delegate as to
whether the municipal corporation should be created. If so, there is an attempted
delegation of legislative power and the statute is invalid (Ibid). Now Section 68 no doubt
gives the President such discretion, since it says that the President "may by executive
order" exercise the powers therein granted. Furthermore, Section 5 of the same Code
states:
"SEC. 5.Exercise of administrative discretion. The exercise of
the permissive powers of all executive or administrative officers and
bodies is based upon discretion, and when such officer or body is given
authority to do any act but not required to do such act, the doing of
the same shall be dependent on a sound discretion to be exercised for
the good of the service and benefit of the public, whether so expressed
in the statute giving the authority or not."
Under the prevailing rule in the United States and Section 68 is of American origin
the provision in question would be an invalid attempt to delegate purely legislative
powers, contrary to the principle of separation of powers.
It is very pertinent that Section 68 should be considered with the stream of history in
mind. A proper knowledge of the past is the only adequate background for the present.
Section 68 was adopted half a century ago. Political change, two world wars, the
recognition of our independence and rightful place in the family of nations, have since
taken place. In 1917 the Philippines had for its Organic Act the Jones Law. And under the
set-up ordained therein no strict separation of powers was adhered to. Consequently,
Section 68 was not constitutionally objectionable at the time of its enactment.
The advent of the Philippine Constitution in 1935 however altered the situation. For not
only was separation of power strictly ordained, except only in specific instances therein
provided, but the power of the Chief Executive over local governments suffered an
explicit reduction.
Formerly, Section 21 of the Jones Law provided that the Governor-General "shall have
general supervision and control of all the departments and bureaus of the government in
the Philippine Islands". Now Section 10 (1), Article VII of the Philippine Constitution
provides: "The President shall have control of all the executive departments, bureaus, or

offices, exercise general supervision over all local governments as may be provided by
law, and take care that the laws be faithfully executed."
In short, the power of control over local governments had now been taken away from the
Chief Executive. Again, to fully understand the significance of this provision, one must
trace its development and growth.
As early as April 7, 1900 President McKinley of the United States, in his Instructions to
the Second Philippine Commission, laid down the policy that our municipal governments
should be "subject to the least degree of supervision and control" on the part of the
national government. Said supervision and control was to be confined within the
"narrowest limits" or so much only as "may be necessary to secure and enforce faithful
and efficient administration by local officers". And the national government "shall have
no direct administration except of matters of purely general concern". (See Hebron v.
Reyes, L-9158, July 28, 1958.)
All this had one aim, to enable the Filipinos to acquire experience in the art of selfgovernment, with the end in view of later allowing them to assume complete
management and control of the administration of their local affairs. Such aim is the
policy now embodied in Section 10(1), Article VII of the Constitution (Rodriguez v.
Montinola, 50 O. G., 4820).
It is the evident decree of the Constitution, therefore, that the President shall have no
power of control over local governments. Accordingly, Congress cannot by law grant him
such power (Hebron v. Reyes, supra). And any such power formerly granted under the
Jones Law thereby-became unavoidably inconsistent with the Philippine Constitution.

It remains to examine the relation of the power to create and the power to control local
governments. Said relationship has already been passed upon by this Court in Hebron v.
Reyes, supra. In said case, it was ruled that the power to control is anincident of the
power to create or abolish municipalities. Respondent's view, therefore, that creating
municipalities and controlling their local governments are "two worlds apart", is
untenable. And since, as stated, the power to control local governments can no longer be
conferred on or exercised by the President, it follows a fortiori that the power to create
them, all the more cannot be so conferred or exercised.
I am impelled to conclude, therefore, that Section 10(1) of Article VII of the Constitution
has repealed Section 68 of the Revised Administrative Code as far as the latter
empowers the President to create local governments. Repeal by the Constitution of prior
statutes inconsistent with it has already been sustained in De los Santos vs. Mallare, 87
Phil. 289. And it was there held that such repeal differs from a declaration of
unconstitutionality of a posterior legislation, so much so that only a majority vote of the
Court is needed to sustain a finding of repeal.
Since the Constitution repealed Section 68 as far back as 1935, it is academic to ask
whether Republic Act 2370 likewise has provisions in conflict with Section 68 so as to
repeal it. Suffice it to state, at any rate, that statutory prohibition on the President from
creating a barrio does not, in my opinion, warrant the inference of statutory prohibition
for creating a municipality. For although municipalities consist of barrios, there is nothing
in the statute that would preclude creation of new municipalities out of pre-existing
barrios.

It is not contrary to the logic of local autonomy to be able to create larger political units
and unable to create smaller ones. For as long ago observed in President McKinley's
Instructions to the Second Philippine Commission, greater autonomy is to be imparted to
the smaller of the two political units. The smaller the unit of local government, the lesser
is the need for the national government's intervention in its political affairs. Furthermore,
for practical reasons, local autonomy cannot be given from the top downwards. The
national government, in such a case, could still exercise power over the supposedly
autonomous unit, e.g., municipalities, by exercising it over the smaller units that
comprise them, e.g., the barrios. A realistic program of decentralization therefore calls
for autonomy from the bottom upwards, so that it is not surprising for Congress to deny
the national government some power over barrios without denying it over municipalities.
For this reason, I disagree with the majority view that because the President could not
create a barrio under Republic Act 2370, a fortiori he cannot create a municipality.
It is my view, therefore, that the Constitution, and not Republic Act 2370, repealed
Section 68 of the Revised Administrative Code's provision giving the President authority
to create local governments. And for this reason I agree with the ruling in the majority
opinion that the executive orders in question are null and void.
In thus ruling, the Court is but sustaining the fulfillment of our historic desire to be free
and independent under a republican form of government, and exercising a function
derived from the very sovereignty that it upholds.
||| (Pelaez v. Auditor General, G.R. No. L-23825, [December 24, 1965], 122 PHIL 965-989)

127. CHIONGBAN V ORBOS

EN BANC
[G.R. No. 96754. June 22, 1995.]
CONGRESSMAN JAMES L. CHIONGBIAN (Third District, South
Cotabato), ADELBERT W. ANTONINO (First District, South
Cotabato), WILFREDO G. CAINGLET (Third District, Zamboanga del
Norte), HILARION RAMIRO, JR. (Second Division, Misamis
Occidental), ERNESTO S. AMATONG (Second District, Zamboanga
del Norte), ALVIN G. DANS (Lone District, Basilan), ABDULLAH M.
DIMAPORO
(Second
District,
Lanao
del
Norte),
and
CONGRESSWOMAN MARIA CLARA A. LOBREGAT (Lone District,
Zamboanga City), petitioners,vs. HON. OSCAR M. ORBOS, Executive
Secretary; COMMITTEE CHAIRMAN SEC. FIDEL V. RAMOS, CABINET
OFFICERS FOR REGIONAL DEVELOPMENT FOR REGIONS X and XII,
CHAIRMAN OF THE REGIONAL DEVELOPMENT COUNCIL FOR REGION
X, CHAIRMAN JESUS V. AYALA, CABINET OFFICERS FOR REGIONAL
DEVELOPMENT FOR REGIONS XI and XII, DEPARTMENT OF LOCAL
GOVERNMENT,
NATIONAL
ECONOMIC
AND
DEVELOPMENT
AUTHORITY SECRETARIAT, PRESIDENTIAL MANAGEMENT STAFF,
HON. GUILLERMO CARAGUE, Secretary of the Department of
Budget and Management; and HON. ROSALINA S. CAJUCUM, OIC
National Treasurer, respondents.
[G.R. No. 96673. June 22, 1995.]
IMMANUEL JALDON, petitioner, vs. HON. EXECUTIVE SECRETARY
OSCAR M. ORBOS, HON. FIDEL V. RAMOS, HON. SECRETARY LUIS
SANTOS,
and
HON.
NATIONAL
TREASURER
ROSALINA
CAJUCOM, respondents.
SYLLABUS
1. POLITICAL LAW; LOCAL GOVERNMENT; AUTONOMOUS REGIONS; POWER TO MERGE
ADMINISTRATIVE AGENCIES; TRADITIONALLY LODGED WITH THE PRESIDENT TO

FACILITATE THE EXERCISE OF THE POWER OF GENERAL SUPERVISION. On September

9, 1968, R.A. No. 5435 was passed "authorizing the President of the Philippines, with the
help of a Commission on Reorganization, to reorganize the different executive
departments, bureaus, offices, agencies and instrumentalities of the government,
including banking or financial institutions and corporations owned or controlled by it."
The purpose was to promote "simplicity, economy and efficiency in the government." The
Commission on Reorganization created under the law was required to submit an
integrated reorganization plan not later than December 31, 1969 to the President who
was in turn required to submit the plan to Congress within forty days after the opening of
its next regular session. The law provided that any reorganization plan submitted would
become effective only upon the approval of Congress. Accordingly, the Reorganization
Commission prepared an Integrated Reorganization Plan which divided the country into
eleven administrative regions. By P.D. No. 1, the Plan was approved and made part of the
law of the land on September 24, 1972. P.D. No. 1 was twice amended in 1975, first
by P.D. No. 742 which "restructur[ed] the regional organization of Mindanao, Basilan,
Sulu and Tawi-Tawi" and later by P.D. No. 773 which further "restructur[ed] the regional
organization of Mindanao and divid[ed] Regional IX into two sub-regions." In 1978, P.D.
No. 1555 transferred the regional center of Region IX from Jolo to Zamboanga City. Thus
the creation and subsequent reorganization of administrative regions have been by the
President pursuant to authority granted to him by law. In conferring on the President the
power "to merge [by administrative determination] the existing regions" following the
establishment of the Autonomous Region in Muslim Mindanao, Congress merely followed
the pattern set in previous legislation dating back to the initial organization of
administrative regions in 1972. The choice of the President as delegate is logical because
the division of the country into regions is intended to facilitate not only the
administration of local governments but also the direction of executive departments
which the law requires should have regional offices. As this Court observed in Abbas,
"while the power to merge administrative regions is not expressly provided for in the
Constitution, it is a power which has traditionally been lodged with the President to
facilitate the exercise of the power of general supervision over local governments
[see Art. X, Sec. 4 of the Constitution]." The regions themselves are not territorial and
political divisions like provinces, cities, municipalities and barangays but are "mere
groupings of contiguous provinces for administrative purposes." The power conferred on
the President is similar to the power to adjust municipal boundaries which has been
described in Pelaez v. Auditor General (122 Phil. 965, 973-4 [1965]) as "administrative in
nature." There is, therefore, no abdication by Congress of its legislative power in
conferring on the President the power to merge administrative regions.
2. ID.; ID.; ID.; ID.; ID.; LEGISLATIVE STANDARD TO GUIDE THEREOF, NEED NOT
BE EXPRESSED. The question whether Congress has provided a sufficient standard
by which the President is to be guided in the exercise of the power granted and
whether in any event the grant of power to him is included in the subject expressed in
the title of the law. First, the question of standard. A legislative standard need not be
expressed. It may simply be gathered or implied. Nor need it be found in the law
challenged because it may be embodied in other statutes on the same subjects as
that of the challenged legislation. With respect to the power to merge existing
administrative regions, the standard is to be found in the same policy underlying the
grant to the President in R.A. No. 5435 of the power to reorganize the Executive
Department, to wit: "to promote simplicity, economy and efficiency in the government
to enable it to pursue programs consistent with national goals for accelerated social
and economic development and to improve the service in the transaction of the public

business." Indeed, as the original eleven administrative regions were established in

accordance with this policy, it is logical to suppose that in authorizing the President to
"merge [by administrative determination] the existing regions" in view of the
withdrawal from some of those regions of the provinces now constituting the
Autonomous Region, the purpose of Congress was to reconstitute the original basis for
the organization of administrative regions.
3. ID.; ID.; ID.; PROVISION THAT PROVINCES AND CITIES WHICH DO NOT VOTE
FOR INCLUSION THEREIN SHALL REMAIN IN THE EXISTING ADMINISTRATIVE REGIONS;
QUALIFIED. While Art. XIX, Sec. 13 provides that "The provinces and cities which do
not vote for inclusion in the Autonomous Region shall remain in the existing
administrative regions," this provision is subject to the qualification that "the
President may by administrative determination merge the existing regions." This
means that while non-assenting provinces and cities are to remain in the regions as
designated upon the creation of the Autonomous Region, they may nevertheless be
regrouped with contiguous provinces forming other regions as the exigency of
administration may require. The regrouping is done only on paper. It involves no more
than a redefinition of the lines separating administrative regions for the purpose of
facilitating the administrative supervision of local government units by the President
and insuring the efficient delivery of essential services. There will be no "transfer" of
local governments from one region to another except as they may thus be regrouped
so that a province like Lanao del Norte, which is at present part of Region XII, will
become part of Region IX. The regrouping of contiguous provinces is not even
analogous to a redistricting or to the division or merger of local governments, which
all have political consequences on the right of people residing in those political units
to vote and to be voted for. It cannot be overemphasized that administrative regions
are mere groupings of contiguous provinces for administrative purposes, not for
political representation. Petitioners nonetheless insist that only those regions, in
which the provinces and cities which voted for inclusion in the Autonomous Region are
located, can be "merged" by the President. To be sure Art. XIX, Sec. 13 is not so
limited. But the more fundamental reason is that the President's power cannot be so
limited without neglecting the necessities of administration. It is noteworthy that the
petitioners do not claim that the reorganization of the regions in E.O. No. 429 is
irrational. The fact is that, as they themselves admit, the reorganization of
administrative regions in E.O. No. 429 is based on relevant criteria, to wit: (1)
contiguity and geographical features; (a) transportation and communication facilities;
(3) cultural and language groupings; (4) land area and population; (5) existing
regional centers adopted by several agencies; (6) socio-economic development
programs in the regions and (7) number of provinces and cities. What has been said
above applies to the change of the regional center from Zamboanga City to Pagadian
City. Petitioners contend that the determination of provincial capitals has always been
by act of Congress. But as, this Court said in Abbas, administrative regions are mere
"groupings of contiguous provinces for administrative purposes. . . [They] are not
territorial and political subdivisions like provinces, cities, municipalities and
barangays." There is, therefore, no basis for contending that only Congress can
change or determine regional centers. To the contrary, the examples of P.D. Nos. 1,
742, 773 and 1555 suggest that the power to reorganize administrative regions
carries with it the power to determine the regional center. It may be that the transfer
of the regional center in Region IX from Zamboanga City to Pagadian City may entail
the expenditure of large sums of money for the construction of buildings and other
infrastructures to house regional offices. That contention is addressed to the wisdom
of the transfer rather than to its legality and it is settled that courts are not the

arbiters of the wisdom or expediency of legislation. In any event this is a question that
we will consider only if fully briefed and upon a more adequate record than that
presented by petitioners.
4. ID.; LEGISLATIVE DEPARTMENT; RULE THAT EVERY BILL PASSED SHALL
EMBRACE ONLY ONE SUBJECT WHICH SHALL BE EXPRESSED IN THE TITLE THEREOF;
APPLICATION TO R.A. NO. 6734 (ORGANIC ACT FOR THE AUTONOMOUS REGION IN
MUSLIM MINDANAO). Art. XIX, Sec. 13 is not susceptible to charge that its subject is
not embraced in the title of R.A. No. 6734. The constitutional requirement that "every
bill passed by the Congress shall embrace only one subject which shall be expressed
in the title thereof" has always been given a practical rather than a technical
construction. The title is not required to be an index of the content of the bill. It is
sufficient compliance with the constitutional requirement if the title expresses the
general subject and all provisions are germane to that subject. Certainly the
reorganization of the remaining administrative regions is germane to the general
subject of R.A. No. 6734, which is the establishment of the Autonomous Region in
Muslim Mindanao.

DECISION

MENDOZA, J p:
These suits challenge the validity of a provision of the Organic Act for the
Autonomous Region in Muslim Mindanao (R.A. No. 6734), authorizing the President of
the Philippines to "merge" by administrative determination the regions remaining
after the establishment of the Autonomous Region, and the Executive Order issued by
the President pursuant to such authority, "Providing for the Reorganization of
Administrative Regions in Mindanao." A temporary restraining order prayed for by the
petitioners was issued by this Court on January 29, 1991, enjoining the respondents
from enforcing the Executive Order and statute in question.
The facts are as follows:
Pursuant to Art. X, Sec. 18 of the 1987 Constitution, Congress passed R.A. No.
6734, the Organic Act for the Autonomous Region in Muslim Mindanao, calling for a
plebiscite to be held in the provinces of Basilan, Cotabato, Davao del Sur, Lanao del
Norte, Lanao del Sur, Maguindanao, Palawan, South Cotabato, Sultan Kudarat, Sulu,
Tawi-Tawi, Zamboanga del Norte, Zamboanga del Sur, and the cities of Cotabato,
Dapitan, Dipolog, General Santos, Iligan, Marawi, Pagadian, Puerto Princesa and
Zamboanga. In the ensuing plebiscite held on November 16, 1989, four provinces
voted in favor of creating an autonomous region. These are the provinces of Lanao del
Sur, Maguindanao, Sulu and Tawi-Tawi. In accordance with the constitutional provision,
these provinces became the Autonomous Region in Muslim Mindanao.
On the other hand, with respect to provinces and cities not voting in favor of the
Autonomous Region, Art. XIX, Sec. 13 of R.A. No. 6734 provides,
That only the provinces and cities voting favorably in such plebiscites shall
be included in the Autonomous Region in Muslim Mindanao. The provinces
and cities which in the plebiscite do not vote for inclusion in the

Autonomous Region shall remain in the existing administrative

regions: Provided, however, that the President may, by administrative
determination, merge the existing regions.
Pursuant to the authority granted by this provision, then President Corazon C.
Aquino issued on October 12, 1990Executive Order No. 429, "Providing for the
Reorganization of the Administrative Regions in Mindanao." Under this Order, as
amended by E.O. No. 439
(1) Misamis Occidental, at present part of Region X, will become part of
Region IX.
(2) Oroquieta City, Tangub City and Ozamiz City, at present parts of Region
X will become parts of Region IX.
(3) South Cotabato, at present a part of Region XI, will become part of
Region XII.
(4) General Santos City, at present part of Region XI, will become part of
Region XII.
(5) Lanao del Norte, at present part of Region XII, will become part of
Region IX.
(6) Iligan City and Marawi City, at present part of Region XII, will become
part of Region IX.
Petitioners in G.R. No. 96754 are, or at least at the time of the filing of their
petition, members of Congress representing various legislative districts in South
Cotabato, Zamboanga del Norte, Basilan, Lanao del Norte and Zamboanga City. On
November 12, 1990, they wrote then President Aquino protesting E.O. No. 429. They
contended that
There is no law which authorizes the President to pick certain provinces and
cities within the existing regions some of which did not even take part in
the plebiscite as in the case of the province of Misamis Occidental and the
cities of Oroquieta, Tangub and Ozamiz and restructure them to new
administrative regions. On the other hand, the law (Sec. 13, Art. XIX, R.A.
6734) is specific to the point, that is, that "provinces and cities which in the
plebiscite do not vote for inclusion in the Autonomous Region shall remain
in the existing administrative regions.
The transfer of the provinces of Misamis Occidental from Region X to
Region IX; Lanao del Norte from Region XII to Region IX, and South
Cotabato from Region XI to Region XII are alterations of the existing
structures of governmental units, in other words, reorganization. This can
be gleaned from Executive Order No. 429, thus
Whereas, there is an urgent need to reorganize the administrative
regions in Mindanao to guarantee the effective delivery of field
services of government agencies taking into consideration the
formation of the Autonomous Region in Muslim Mindanao.
With due respect to Her Excellency, we submit that while the authority
necessarily includes the authority to merge, the authority to merge does
not include the authority to reorganize. Therefore, the President's authority
under RA No. 6734to "merge existing regions" cannot be construed to

include the authority to reorganize them. To do so will violate the rules of

statutory construction.
The transfer of regional centers under Executive Order 429 is actually a
restructuring (reorganization) of administrative regions. While this
reorganization, as in Executive Order 429, does not affect the
apportionment of congressional representatives, the same is not valid
under the penultimate paragraph of Sec. 13, Art. XIX of R.A. 6734 and
Ordinance appended to the 1986 Constitution apportioning the seats of the
House of Representatives of Congress of the Philippines to the different
legislative districts in provinces and cities. 1
As their protest went unheeded, while Inauguration Ceremonies of the New
Administrative Region IX were scheduled on January 26, 1991, petitioners brought this
suit for certiorari and prohibition.
On the other hand, the petitioner in G.R. No. 96673, Immanuel Jaldon, is a
resident of Zamboanga City, who is suing in the capacity of taxpayer and citizen of
the Republic of the Philippines.
Petitioners in both cases contend that Art. XIX, Sec. 13 of R.A. No. 6734 is
unconstitutional because (1) it unduly delegates legislative power to the President by
authorizing him to "merge [by administrative determination] the existing regions" or
at any rate provides no standard for the exercise of the power delegated and (2) the
power granted is not expressed in the title of the law.
In addition, petitioner in G.R. No. 96673 challenges the validity of E.O. No. 429
on the ground that the power granted by Art. XIX, Sec. 13 to the President is only to
"merge regions IX and XII" but not to reorganize the entire administrative regions in
Mindanao and certainly not to transfer the regional center of Region IX from
Zamboanga City to Pagadian City.
The Solicitor General defends the reorganization of regions in Mindanao by E.O.
No. 429 as merely the exercise of a power "traditionally lodged in the President," as
held in Abbas v. COMELEC, 2 and as a mere incident of his power of general
supervision over local governments and control of executive departments, bureaus
and offices under Art. X, Sec. 16 and Art. VII, Sec. 17, respectively, of the Constitution.
He contends that there is no undue delegation of legislative power but only a
grant of the power to "fill up" or provide the details of legislation because Congress
did not have the facility to provide for them. He cites by analogy the case
of Municipality of Cardona v. Municipality of Binangonan,3 in which power of the
Governor-General to fix municipal boundaries was sustained on the ground that
[such power] is simply a transference of certain details with respect to
provinces, municipalities, and townships, many of them newly created, and
all of them subject to a more or less rapid change both in development and
centers of population, the proper regulation of which might require not only
prompt action but action of such a detailed character as not to permit the
legislative body, as such, to take it efficiently.
The Solicitor General justifies the grant to the President of the power "to merge
the existing regions" as something fairly embraced in the title of R.A. No. 6734, to wit,
"An Act Providing for an Organic Act for the Autonomous Region in Muslim Mindanao,"
because it is germane to it.

He argues that the power is not limited to the merger of those regions in which
the provinces and cities which took part in the plebiscite are located but that it
extends to all regions in Mindanao as necessitated by the establishment of the
autonomous region.
Finally, he invokes P.D. No. 1416, as amended by P.D. No. 1772 which provides:
1. The President of the Philippines shall have the continuing authority to
reorganize the National Government. In exercising this authority, the
President shall be guided by generally acceptable principles of good
government and responsive national government, including but not limited
to the following guidelines for a more efficient, effective, economical and
development-oriented governmental framework:
(a) More effective planning implementation, and review functions;
(b) Greater
process;

decentralization

and

responsiveness

in

decision-making

(c) Further minimization, if not, elimination, of duplication or overlapping of

purposes, functions, activities, and programs;
(d) Further development of as standardized as possible ministerial, subministerial and corporate organizational structures;
(e) Further development of the regionalization process; and
(f) Further rationalization of the functions
relationships among government entities.

of

and

administrative

For purposes of this Decree, the coverage of the continuing authority of the
President to reorganize shall be interpreted to encompass all agencies,
entities, instrumentalities, and units of the National Government, including
all government-owned or -controlled corporations as well as the entire
range of the powers, functions, authorities, administrative relationships,
and
related
aspects
pertaining
to
these
agencies,
entities,
instrumentalities, and units.
2. [T]he President may, at his discretion, take the following actions:
xxx xxx xxx
f. Create, abolish, group, consolidate, merge, or integrate entities, agencies,
instrumentalities, and units of the National Government, as well as expand,
amend, change, or otherwise modify their powers, functions and
authorities, including, with respect to government-owned or controlled
corporations, their corporate life, capitalization, and other relevant aspects
of their charters.
g. Take such other related actions as may be necessary to carry out the
purposes and objectives of this Decree.
Considering the arguments of the parties, the issues are:
(1) whether the power to "merge" administrative regions is legislative in
character, as petitioners contend, or whether it is executive in
character, as respondents claim it is, and, in any event, whether Art.

XIX, Sec. 13 is invalid because it contains no standard to guide the

President's discretion;
(2) whether the power given is fairly expressed in the title of the statute;
and
(3) whether the power granted authorizes the reorganization even of
regions the provinces and cities in which either did not take part in
the plebiscite on the creation of the Autonomous Region or did not
vote in favor of it; and
(4) whether the power granted to the President includes the power to
transfer the regional center of Region IX from Zamboanga City to
Pagadian City.
It will be useful to recall first the nature of administrative regions and the basis
and purpose for their creation. On September 9, 1968, R.A. No. 5435 was passed
"authorizing the President of the Philippines, with the help of a Commission on
Reorganization, to reorganize the different executive departments, bureaus, offices,
agencies and instrumentalities of the government, including banking or financial
institutions and corporations owned or controlled by it." The purpose was to promote
"simplicity, economy and efficiency in the government." 4 The Commission on
Reorganization created under the law was required to submit an integrated
reorganization plan not later than December 31, 1969 to the President who was in
turn required to submit the plan to Congress within forty days after the opening of its
next regular session. The law provided that any reorganization plan submitted would
become effective only upon the approval of Congress. 5
Accordingly, the Reorganization Commission prepared an Integrated

Reorganization Plan which divided the

country into eleven administrative regions. 6 By P.D. No. 1, the Plan was approved and
made part of the law of the land on September 24, 1972. P.D. No. 1 was twice
amended in 1975, first by P.D. No. 742 which "restructur[ed] the regional organization
of Mindanao, Basilan, Sulu and Tawi-Tawi" and later by P.D. No. 773 which further
"restructur[ed] the regional organization of Mindanao and divid[ed] Region IX into two
sub-regions." In 1978, P.D. No. 1555 transferred the regional center of Region IX from
Jolo to Zamboanga City.
Thus the creation and subsequent reorganization of administrative regions have
been by the President pursuant to authority granted to him by law. In conferring on
the President the power "to merge [by administrative determination] the existing
regions" following the establishment of the Autonomous Region in Muslim Mindanao,
Congress merely followed the pattern set in previous legislation dating back to the
initial organization of administrative regions in 1972. The choice of the President as
delegate is logical because the division of the country into regions is intended to
facilitate not only the administration of local governments but also the direction of
executive departments which the law requires should have regional offices. As this
Court observed in Abbas, "while the power to merge administrative regions is not
expressly provided for in the Constitution, it is a power which has traditionally been
lodged with the President to facilitate the exercise of the power of general supervision
over local governments [see Art. X, Sec. 4 of the Constitution]." The regions
themselves are not territorial and political divisions like provinces, cities,
municipalities and barangays but are "mere groupings of contiguous provinces for
administrative purposes." 7 The power conferred on the President is similar to the

power to adjust municipal boundaries 8 which has been described in Pelaez v. Auditor
General 9 as "administrative in nature."
There is, therefore, no abdication by Congress of its legislative power in
conferring on the President the power to merge administrative regions. The question
is whether Congress has provided a sufficient standard by which the President is to be
guided in the exercise of the power granted and whether in any event the grant of
power to him is included in the subject expressed in the title of the law.
First, the question of standard. A legislative standard need not be expressed. It
may simply be gathered or implied.10 Nor need it be found in the law challenged
because it may be embodied in other statutes on the same subjects as that of the
challenged legislation. 11
With respect to the power to merge existing administrative regions, the
standard is to be found in the same policy underlying the grant to the President
in R.A. No. 5435 of the power to reorganize the Executive Department, to wit: "to
promote simplicity, economy and efficiency in the government to enable it to pursue
programs consistent with national goals for accelerated social and economic
development and to improve the service in the transaction of the public
business." 12 Indeed, as the original eleven administrative regions were established
in accordance with this policy, it is logical to suppose that in authorizing the President
to "merge [by administrative determination] the existing regions" in view of the
withdrawal from some of those regions of the provinces now constituting the
Autonomous Region, the purpose of Congress was to reconstitute the original basis for
the organization of administrative regions.
Nor is Art. XIX, Sec. 13 susceptible to charge that its subject is not embraced in
the title of R.A. No. 6734. The constitutional requirement that "every bill passed by
the Congress shall embrace only one subject which shall be expressed in the title
thereof" 13 has always been given a practical rather than a technical construction.
The title is not required to be an index of the content of the bill. It is sufficient
compliance with the constitutional requirement if the title expresses the general
subject and all provisions are germane to that subject. 14 Certainly the reorganization
of the remaining administrative regions is germane to the general subject of R.A. No.
6734, which is the establishment of the Autonomous Region in Muslim Mindanao.
Finally, it is contended that the power granted to the President is limited to the
reorganization of administrative regions in which some of the provinces and cities
which voted in favor of regional autonomy are found, because Art. XIX, Sec. 13
provides that those which did not vote for autonomy "shall remain in the existing
administrative regions." More specifically, petitioner in G.R. No. 96673 Claims:
The questioned Executive Order No. 429 . . . distorted and, in fact,
contravened the clear intent of this provision by moving out or transferring
certain political subdivisions (provinces/cities) out of their legally
designated regions. Aggravating this unacceptable or untenable situation is
EO. No. 429's effecting certain movements on areas which did not even
participate in the November 19, 1989 plebiscite. The unauthorized action of
the President, as effected by and under the questioned EO. No. 429, is
shown by the following dispositions: (1) Misamis Occidental, formerly of
Region X and which did not even participate in the plebiscite, was moved
from said Region X to Region IX; (2) the cities of Ozamiz, Oroquieta, and
Tangub, all formerly belonging to Region X, which likewise did not
participate in the said plebiscite, were transferred to Region IX; (3) South

Cotabato, from Region XI to Region XII; (5) Lanao del Norte, from Region XII
to Region IX; and (6) the cities of Marawi and Iligan from Region XII to
Region IX. All of the said provinces and cities voted "NO", and thereby
rejected their entry into the Autonomous Region in Muslim Mindanao, as
provided under RA. No. 6734. 15
The contention has no merit. While Art. XIX, Sec. 13 provides that "The
provinces and cities which do not vote for inclusion in the Autonomous Region shall
remain in the existing administrative regions," this provision is subject to the
qualification that "the President may by administrative determination merge the
existing regions." This means that while non-assenting provinces and cities are to
remain in the regions as designated upon the creation of the Autonomous Region,
they may nevertheless be regrouped with contiguous provinces forming other regions
as the exigency of administration may require.
The regrouping is done only on paper. It involves no more than a redefinition of
the lines separating administrative regions for the purpose of facilitating the
administrative supervision of local government units by the President and insuring the
efficient delivery of essential services. There will be no "transfer" of local
governments from one region to another except as they may thus be regrouped so
that a province like Lanao del Norte, which is at present part of Region XII, will
become part of Region IX.
The regrouping of contiguous provinces is not even analogous to a redistricting
or to the division or merger of local governments, which all have political
consequences on the right of people residing in those political units to vote and to be
voted for. It cannot be overemphasized that administrative regions are mere
groupings of contiguous provinces for administrative purposes, not for political
representation.
Petitioners nonetheless insist that only those regions, in which the provinces
and cities which voted for inclusion in the Autonomous Region are located, can be
"merged" by the President.
To be sure Art. XIX, Sec. 13 is not so limited. But the more fundamental reason
is that the President's power cannot be so limited without neglecting the necessities
of administration. It is noteworthy that the petitioners do not claim that the
reorganization of the regions in E.O. No. 429 is irrational. The fact is that, as they
themselves admit, the reorganization of administrative regions in E.O. No. 429 is
based on relevant criteria, to wit: (1) contiguity and geographical features; (a)
transportation and communication facilities; (3) cultural and language groupings; (4)
land area and population; (5) existing regional centers adopted by several agencies;
(6) socio-economic development programs in the regions and (7) number of provinces
and cities.
What has been said above applies to the change of the regional center from
Zamboanga City to Pagadian City. Petitioners contend that the determination of
provincial capitals has always been by act of Congress. But as, this Court said
in Abbas, 16 administrative regions are mere "groupings of contiguous provinces for
administrative purposes,. . . [They] are not territorial and political subdivisions like
provinces, cities, municipalities and barangays." There is, therefore, no basis for
contending that only Congress can change or determine regional centers. To the
contrary, the examples of P.D. Nos. 1, 742, 773 and 1555 suggest that the power to

reorganize administrative regions carries with it the power to determine the regional
center.
It may be that the transfer of the regional center in Region IX from Zamboanga
City to Pagadian City may entail the expenditure of large sums of money for the
construction of buildings and other infrastructures to house regional offices. That
contention is addressed to the wisdom of the transfer rather than to its legality and it
is settled that courts are not the arbiters of the wisdom or expediency of legislation. In
any event this is a question that we will consider only if fully briefed and upon a more
adequate record than that presented by petitioners.
WHEREFORE, the petitions for certiorari and prohibition are DISMISSED for lack
of merit.
SO ORDERED.
||| (Chiongbian v. Orbos, G.R. No. 96754, 96673, [June 22, 1995], 315 PHIL 251-269)

128. YNOT V IAC

EN BANC
[G.R. No. 74457. March 20, 1987.]
RESTITUTO YNOT, petitioner, vs. INTERMEDIATE APPELLATE COURT, THE
STATION COMMANDER, INTEGRATED NATIONAL POLICE, BAROTAC
NUEVO, ILOILO and THE REGIONAL DIRECTOR, BUREAU OF ANIMAL
INDUSTRY, REGION IV, ILOILO CITY, respondents.
Ramon A. Gonzales for petitioner.

DECISION

CRUZ, J p:
The essence of due process is distilled in the immortal cry of Themistocles to Alcibiades:
"Strike but hear me first!'" It is this cry that the petitioner in effect repeats here as he
challenges the constitutionality of Executive Order No. 626-A. Cdpr
The said executive order reads in full as follows:
"WHEREAS, the President has given orders prohibiting the interprovincial
movement of carabaos and the slaughtering of carabaos not complying
with the requirements of Executive Order No. 626 particularly with respect
to age;
"WHEREAS, it has been observed that despite such orders the violators still
manage to circumvent the prohibition against interprovincial movement of
carabaos by transporting carabeef instead; and.
"WHEREAS, in order to achieve the purposes and objectives of Executive
Order No. 626 and the prohibition against interprovincial movement of
carabaos, it is necessary to strengthen the said Executive Order and
provide for the disposition of the carabaos and carabeef subject of the
violation;.
"NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
promulgate the following:
"SECTION 1. Executive Order No. 626 is hereby amended such that
henceforth, no carabao regardless of age, sex, physical condition or
purpose and no carabeef shall be transported from one province to another.
The carabao or carabeef transported in violation of this Executive Order as
amended shall be subject to confiscation and forfeiture by the government,
to be distributed to charitable institutions and other similar institutions as
the Chairman of the National Meat Inspection Commission may see fit, in
the case of carabeef, and to deserving farmers through dispersal as the
Director of Animal Industry may see fit, in the case of carabaos.
"SECTION 2. This Executive Order shall take effect immediately.
"Done in the City of Manila, this 25th day of October, in the year of Our
Lord, nineteen hundred and eighty.
(SGD.)
FERDINAND
President
Republic of the Philippines"

E.

MARCOS

The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on
January 13, 1984, when they were confiscated by the police station commander of
Barotac Nuevo, Iloilo, for violation of the above measure. 1 The petitioner sued for
recovery, and the Regional Trial Court of Iloilo City issued a writ of replevin upon his filing
of a supersedeas bond of P12,000.00. After considering the merits of the case,
the court sustained the confiscation of the carabaos and, since they could no longer be
produced, ordered the confiscation of the bond. The court also declined to rule on the

constitutionality of the executive order, as raised by the petitioner, for lack of authority
and also for its presumed validity. 2
The petitioner appealed the decision to the Intermediate Appellate Court, * 3 which
upheld the trial court, ** and he has now come before us in this petition for review
on certiorari. prcd
The thrust of his petition is that the executive order is unconstitutional insofar as it
authorizes outright confiscation of the carabao or carabeef being transported across
provincial boundaries. His claim is that the penalty is invalid because it is imposed
without according the owner a right to be heard before a competent and
impartial court as guaranteed by due process. He complains that the measure should not
have been presumed, and so sustained, as constitutional. There is also a challenge to the
improper exercise of the legislative power by the former President under Amendment No.
6 of the 1973 Constitution. 4
While also involving the same executive order, the case of Pesigan v. Angeles 5 is not
applicable here. The question raised there was the necessity of the previous publication
of the measure in the Official Gazette before it could be considered enforceable. We
imposed the requirement then on the basis of due process of law. In doing so, however,
this Court did not, as contended by the Solicitor General, impliedly affirm the
constitutionality of Executive Order No. 626-A. That is an entirely different matter.
This Court has declared that while lower courts should observe a becoming modesty in
examining constitutional questions, they are nonetheless not prevented from resolving
the same whenever warranted, subject only to review by the highest tribunal. 6 We have
jurisdiction under the Constitution to "review, revise, reverse, modify or affirm on appeal
or certiorari, as the law or rules of court may provide," final judgments and orders of
lower courts in, among others, all cases involving the constitutionality of certain
measures. 7 This simply means that the resolution of such cases may be made in the
first instance by these lower courts.
And while it is true that laws are presumed to be constitutional, that presumption is not
by any means conclusive and in fact may be rebutted. Indeed, if there be a clear
showing of their invalidity, and of the need to declare them so, then "will be the time to
make the hammer fall, and heavily," 8 to recall Justice Laurel's trenchant warning. Stated
otherwise, courts should not follow the path of least resistance by simply presuming the
constitutionality of a law when it is questioned. On the contrary, they should probe the
issue more deeply, to relieve the abscess, paraphrasing another distinguished
jurist, 9 and so heal the wound or excise the affliction.
Judicial power authorizes this; and when the exercise is demanded, there should be no
shirking of the task for fear of retaliation, or loss of favor, or popular censure, or any
other similar inhibition unworthy of the bench, especially this Court. LLjur
The challenged measure is denominated an executive order but it is really presidential
decree, promulgating a new rule instead of merely implementing an existing law. It was
issued by President Marcos not for the purpose of taking care that the laws were
faithfully executed but in the exercise of his legislative authority under Amendment No.
6. It was provided thereunder that whenever in his judgment there existed a grave
emergency or a threat or imminence thereof or whenever the legislature failed or was
unable to act adequately on any matter that in his judgment required immediate action,
he could, in order to meet the exigency, issue decrees, orders or letters of instruction
that were to have the force and effect of law. As there is no showing of any exigency to

justify the exercise of that extraordinary power then, the petitioner has reason, indeed,
to question the validity of the executive order. Nevertheless, since the determination of
the grounds was supposed to have been made by the President "in his judgment," a
phrase that will lead to protracted discussion not really necessary at this time, we
reserve resolution of this matter until a more appropriate occasion. For the nonce, we
confine ourselves to the more fundamental question of due process.
It is part of the art of constitution-making that the provisions of the charter be cast in
precise and unmistakable language to avoid controversies that might arise on their
correct interpretation. That is the ideal. In the case of the due process clause, however,
this rule was deliberately not followed and the wording was purposely kept ambiguous.
In fact, a proposal to delineate it more clearly was submitted in the Constitutional
Convention of 1934, but it was rejected by Delegate Jose P. Laurel, Chairman of the
Committee on the Pill of Rights, who forcefully argued against it. He was sustained by
the body. 10
The due process clause was kept intentionally vague so it would remain also
conveniently resilient. This was felt necessary because due process is not, like some
provisions of the fundamental law, an "iron rule" laying down an implacable and
immutable command for all seasons and all persons. Flexibility must be the best virtue of
the guaranty. The very elasticity of the due process clause was meant to make it adapt
easily to every situation, enlarging or constricting its protection as the changing times
and circumstances may require.
Aware of this, the courts have also hesitated to adopt their own specific description of
due process lest they confine themselves in a legal straitjacket that will deprive them of
the elbow room they may need to vary the meaning of the clause whenever indicated.
Instead, they have preferred to leave the import of the protection open-ended, as it
were, to be "gradually ascertained by the process of inclusion and exclusion in the
course of the decision of cases as they arise." 11 Thus, Justice Felix Frankfurter of the
U.S. Supreme Court, for example, would go no farther than to define due process - and in
so doing sums it all up as nothing more and nothing less than "the embodiment of the
sporting idea of fair play." 12
When the barons of England extracted from their sovereign liege the reluctant promise
that that Crown would thenceforth not proceed against the life, liberty or property of any
of its subjects except by the lawful judgment of his peers or the law of the land, they
thereby won for themselves and their progeny that splendid guaranty of fairness that is
now the hallmark of the free society. The solemn vow that King John made at Runnymede
in 1215 has since then resounded through the ages, as a ringing reminder to all rulers,
benevolent or base, that every person, when confronted by the stern visage of the law, is
entitled to have his say in a fair and open hearing of his cause. prLL
The closed mind has no place in the open society. It is part of the sporting idea of fair
play to hear "the other side" before an opinion is formed or a decision is made by those
who sit in judgment. Obviously, one side is only one-half of the question; the other half
must also be considered if an impartial verdict is to be reached based on an informed
appreciation of the issues in contention. It is indispensable that the two sides
complement each other, as unto the bow the arrow, in leading to the correct ruling after
examination of the problem not from one or the other perspective only but in its totality.
A judgment based on less that this full appraisal, on the pretext that a hearing is

unnecessary or useless, is tainted with the vice of bias or intolerance or ignorance, or

worst of all, in repressive regimes, the insolence of power.
The minimum requirements of due process are notice and hearing 13 which, generally
speaking, may not be dispensed with because they are intended as a safeguard against
official arbitrariness. It is a gratifying commentary on our judicial system that the
jurisprudence of this country is rich with applications of this guaranty as proof of our
fealty to the rule of law and the ancient rudiments of fair play. We have consistently
declared that every person, faced by the awesome power of the State, is entitled to "the
law of the land," which Daniel Webster described almost two hundred years ago in the
famous Dartmouth College Case, 14 as "the law which hears before it condemns, which
proceeds upon inquiry and renders judgment only after trial." It has to be so if the rights
of every person are to be secured beyond the reach of officials who, out of mistaken zeal
or plain arrogance, would degrade the due process clause into a worn and empty
catchword.
This is not to say that notice and hearing are imperative in every case for, to be sure,
there are a number of admitted exceptions. The conclusive presumption, for example,
bars the admission of contrary evidence as long as such presumption is based on human
experience or there is a rational connection between the fact proved and the fact
ultimately presumed therefrom. 15 There are instances when the need for expeditious
action will justify omission of these requisites, as in the summary abatement of a
nuisance per se, like a mad dog on the loose, which may be killed on sight because of
the immediate danger it poses to the safety and lives of the people. Pornographic
materials, contaminated meat and narcotic drugs are inherently pernicious and may be
summarily destroyed. The passport of a person sought for a criminal offense may be
cancelled without hearing, to compel his return to the country he has fled. 16 Filthy
restaurants may be summarily padlocked in the interest of the public health and bawdy
houses to protect the public morals. 17 In such instances, previous judicial hearing may
be omitted without violation of due process in view of the nature of the property involved
or the urgency of the need to protect the general welfare from a clear and present
danger. cdll
The protection of the general welfare is the particular function of the police power which
both restraints and is restrained by due process. The police power is simply defined as
the power inherent in the State to regulate liberty and property for the promotion of the
general welfare. 18 By reason of its function, it extends to all the great public needs and
is described as the most pervasive, the least limitable and the most demanding of the
three inherent powers of the State, far outpacing taxation and eminent domain. The
individual, as a member of society, is hemmed in by the police power, which affects him
even before he is born and follows him still after he is dead from the womb to beyond
the tomb in practically everything he does or owns. Its reach is virtually limitless. It is
a ubiquitous and often unwelcome intrusion. Even so, as long as the activity or the
property has some relevance to the public welfare, its regulation under the police power
is not only proper but necessary. And the justification is found in the venerable Latin
maxims, Salus populi est suprema lex and Sic utere tuo ut alienum non laedas, which
call for the subordination of individual interests to the benefit of the greater number.
It is this power that is now invoked by the government to justify Executive Order No. 626A, amending the basic rule in Executive Order No. 626, prohibiting the slaughter of
carabaos except under certain conditions. The original measure was issued for the
reason, as expressed in one of its Whereases, that "present conditions demand that the
carabaos and the buffaloes be conserved for the benefit of the small farmers who rely on

them for energy needs." We affirm at the outset the need for such a measure. In the face
of the worsening energy crisis and the increased dependence of our farms on these
traditional beasts of burden, the government would have been remiss, indeed, if it had
not taken steps to protect and preserve them.
A similar prohibition was challenged in United States v. Toribio, 19 where a law regulating
the registration, branding and slaughter of large cattle was claimed to be a deprivation
of property without due process of law. The defendant had been convicted thereunder for
having slaughtered his own carabao without the required permit, and he appealed to the
SupremeCourt. The conviction was affirmed. The law was sustained as a valid police
measure to prevent the indiscriminate killing of carabaos, which were then badly needed
by farmers. An epidemic had stricken many of these animals and the reduction of their
number had resulted in an acute decline in agricultural output, which in turn had caused
an incipient famine. Furthermore, because of the scarcity of the animals and the
consequent increase in their price, cattle-rustling had spread alarmingly, necessitating
more effective measures for the registration and branding of these animals.
The Court held that the questioned statute was a valid exercise of the police power and
declared in part as follows:
"To justify the State in thus interposing its authority in behalf of the public,
it must appear, first, that the interests of the public generally, as
distinguished from those of a particular class, require such interference;
and second, that the means are reasonably necessary for the
accomplishment of the purpose, and not unduly oppressive upon
individuals. . . .
"From what has been said, we think it is clear that the enactment of the
provisions of the statute under consideration was required by `the interests
of the public generally, as distinguished from those of a particular class'
and that the prohibition of the slaughter of carabaos for human
consumption, so long as these animals are fit for agricultural work or draft
purposes was a `reasonably necessary' limitation on private ownership, to
protect the community from the loss of the services of such animals by
their slaughter by improvident owners, tempted either by greed of
momentary gain, or by a desire to enjoy the luxury of animal food, even
when by so doing the productive power of the community may be
measurably and dangerously affected."
In the light of the tests mentioned above, we hold with the Toribio Case that the carabao,
as the poor man's tractor, so to speak, has a direct relevance to the public welfare and
so is a lawful subject of Executive Order No. 626. The method chosen in the basic
measure is also reasonably necessary for the purpose sought to be achieved and not
unduly oppressive upon individuals, again following the above-cited doctrine. There is no
doubt that by banning the slaughter of these animals except where they are at least
seven years old if male and eleven years old if female upon issuance of the necessary
permit, the executive order will be conserving those still fit for farm work or breeding and
preventing their improvident depletion. llcd
But while conceding that the amendatory measure has the same lawful subject as the
original executive order, we cannot say with equal certainty that it complies with the
second requirement, viz., that there be a lawful method. We note that to strengthen the
original measure, Executive Order No. 626-A imposes an absolute ban not on
the slaughter of the carabaos but on their movement, providing that "no carabao

regardless of age, sex, physical condition or purpose (sic) and no carabeef shall be
transported from one province to another." The object of the prohibition escapes us. The
reasonable connection between the means employed and the purpose sought to be
achieved by the questioned measure is missing.
We do not see how the prohibition of the interprovincial transport of carabaos can
prevent their indiscriminate slaughter, considering that they can be killed anywhere, with
no less difficulty in one province than in another. Obviously, retaining the carabaos in
one province will not prevent their slaughter there, any more than moving them to
another province will make it easier to kill them there. As for the carabeef, the
prohibition is made to apply to it as otherwise, so says executive order, it could be easily
circumvented by simply killing the animal. Perhaps so. However, if the movement of the
live animals for the purpose of preventing their slaughter cannot be prohibited, it should
follow that there is no reason either to prohibit their transfer as, not to be flippant, dead
meat.
Even if a reasonable relation between the means and the end were to be assumed, we
would still have to reckon with the sanction that the measure applies for violation of the
prohibition. The penalty is outright confiscation of the carabao or carabeef being
transported, to be meted out by the executive authorities, usually the police only. In the
Toribio Case, the statute was sustained because the penalty prescribed was fine and
imprisonment, to be imposed by the court after trial and conviction of the accused.
Under the challenged measure, significantly, no such trial is prescribed, and the property
being transported is immediately impounded by the police and declared, by the measure
itself, as forfeited to the government.
In the instant case, the carabaos were arbitrarily confiscated by the police station
commander, were returned to the petitioner only after he had filed a complaint for
recovery and given a supersedeas bond of P12,000.00, which was ordered confiscated
upon his failure to produce the carabaos when ordered by the trial court. The executive
order defined the prohibition, convicted the petitioner and immediately imposed
punishment, which was carried out forthright. The measure struck at once and pounced
upon the petitioner without giving him a chance to be heard, thus denying him the
centuries-old guaranty of elementary fair play.
It has already been remarked that there are occasions when notice and hearing may be
validly dispensed with notwithstanding the usual requirement for these minimum
guarantees of due process. It is also conceded that summary action may be validly taken
in administrative proceedings as procedural due process is not necessarily judicial
only. 20 In the exceptional cases accepted, however, there is a justification for the
omission of the right to a previous hearing, to wit, theimmediacy of the problem sought
to be corrected and the urgency of the need to correct it. cdphil
In the case before us, there was no such pressure of time or action calling for the
petitioner's peremptory treatment. The properties involved were not even inimical per
se as to require their instant destruction. There certainly was no reason why the offense
prohibited by the executive order should not have been proved first in a court of justice,
with the accused being accorded all the rights safeguarded to him under the
Constitution. Considering that, as we held in Pesigan v. Angeles, 21Executive Order No.
626-A is penal in nature, the violation thereof should have been pronounced not by the
police only but by a court of justice, which alone would have had the authority to impose
the prescribed penalty, and only after trial and conviction of the accused.

We also mark, on top of all this, the questionable manner of the disposition of the
confiscated property as prescribed in the questioned executive order. It is there
authorized that the seized property shall "be distributed to charitable institutions and
other similar institutions as the Chairman of the National Meat Inspection
Commission may see fit, in the case of carabeef, and to deserving farmers through
dispersal as the Director of Animal Industry may see fit, in the case of carabaos."
(Emphasis supplied.) The phrase "may see fit" is an extremely generous and dangerous
condition, if condition it is. It is laden with perilous opportunities for partiality and abuse,
and even corruption. One searches in vain for the usual standard and the reasonable
guidelines, or better still, the limitations that the said officers must observe when they
make their distribution. There is none. Their options are apparently boundless. Who shall
be the fortunate beneficiaries of their generosity and by what criteria shall they be
chosen? Only the officers named can supply the answer, they and they alone may
choose the grantee as they see fit, and in their own exclusive discretion. Definitely, there
is here a "roving commission," a wide and sweeping authority that is not "canalized
within banks that keep it from overflowing," in short, a clearly profligate and therefore
invalid delegation of legislative powers.
To sum up then, we find that the challenged measure is an invalid exercise of the police
power because the method employed to conserve the carabaos is not reasonably
necessary to the purpose of the law and, worse, is unduly oppressive. Due process is
violated because the owner of the property confiscated is denied the right to be heard in
his defense and is immediately condemned and punished. The conferment on the
administrative authorities of the power to adjudge the guilt of the supposed offender is a
clear encroachment on judicial functions and militates against the doctrine of separation
of powers. There is, finally, also an invalid delegation of legislative powers to the officers
mentioned therein who are granted unlimited discretion in the distribution of the
properties arbitrarily taken. For these reasons, we hereby declare Executive Order No.
626-A unconstitutional.
We agree with the respondent court, however, that the police station commander who
confiscated the petitioner's carabaos is not liable in damages for enforcing the executive
order in accordance with its mandate. The law was at that time presumptively valid, and
it was his obligation, as a member of the police, to enforce it. It would have been
impertinent of him, being a mere subordinate of the President, to declare the executive
order unconstitutional and, on his own responsibility alone, refuse to execute it. Even the
trial court, in fact, and the Court of Appeals itself did not feel they had the competence,
for all their superior authority, to question the order we now annul.
The Court notes that if the petitioner had not seen fit to assert and protect his rights as
he saw them, this case would never have reached us and the taking of his property
under the challenged measure would have become a fait accompli despite its invalidity.
We commend him for his spirit. Without the present challenge, the matter would have
ended in that pump boat in Masbate and another violation of the Constitution, for all its
obviousness, would have been perpetrated, allowed without protest, and soon forgotten
in the limbo of relinquished rights. LLpr
The strength of democracy lies not in the rights it guarantees but in the courage of the
people to invoke them whenever they are ignored or violated. Rights are but weapons on
the wall if, like expensive tapestry, all they do is embellish and impress. Rights, as
weapons, must be a promise of protection. They become truly meaningful, and fulfill the
role assigned to them in the free society, if they are kept bright and sharp with use by
those who are not afraid to assert them.

WHEREFORE, Executive Order No. 626-A is hereby declared unconstitutional. Except as

affirmed above, the decision of theCourt of Appeals is reversed. The supersedeas bond is
cancelled and the amount thereof is ordered restored to the petitioner. No costs.
SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Gutierrez, Jr., Paras, Gancayco, Padilla, Bidin,
Sarmiento and Cortes, JJ., concur.
||| (Ynot v. Intermediate Appellate Court, G.R. No. 74457, [March 20, 1987], 232 PHIL
615-632)

129. DE LA LLANA V ALBA

EN BANC
[G.R. No. 57883. March 12, 1982.]
GUALBERTO J. DE LA LLANA, Presiding Judge, Branch II of the City
Court of Olongapo, ESTANISLAO L. CESA, JR., FIDELA Y. VARGAS,
BENJAMIN C. ESCOLANGO, JUANITO C. ATIENZA, MANUEL REYES
ROSAPAPAN, JR., VIRGILIO E. ACIERTO, and PORFIRIO AGUILLON
AGUILA, petitioners, vs. MANUEL ALBA, Minister of Budget,
FRANCISCO TANTUITCO, Chairman, Commission on Audit, and
RICARDO PUNO, Minister of Justice, respondents.
Fidela Vargas, Leonardo S. Gonzales and Raul Gonzales for petitioners.

Solicitor General Estelito Mendoza and Assistant Solicitor General Reynato S. Puno for
respondents.
SYNOPSIS
Petitioners assailed the constitutionality of Batas Pambansa Blg. 129 entitled "An Act
Reorganizing the Judiciary, Appropriating Funds Therefore and for other Purposes," the
same being contrary to the security of tenure provision of theConstitution as it separates
from the judiciary Justices and judges of inferior courts from the Court of Appeals to
municipal circuit courts except the occupants of the Sandiganbayan and the Court of Tax
Appeals, unless appointed to the inferior courts established by such Act. They likewise
impute lack of good faith in its enactment and characterize as undue delegation of
legislative power to the President his authority to fix the compensation and allowances of
the Justices and judges thereafter appointed and the determination of the date when the
reorganization shall be deemed completed. The Solicitor General maintains that there is
no valid justification for the attack on the constitutionality of the statute, it being a
legitimate exercise of the power vested in the Batasang Pambansa to reorganize the
judiciary, the allegations of absence of good faith as well as the attack on the
independence of the judiciary being unwarranted and devoid of any support in law.
After an intensive and rigorous study of all the legal aspects of the case, the
Supreme Court dismissed the petition, the unconstitutionality of Batas Pambansa Blg.
129 not having been shown. It held that the enactment thereof was in answer to a
pressing and urgent need for a major reorganization of the judiciary; that the
attendant abolition of the inferior courts which shall cause their incumbents to cease
from holding office does not impair the independence of the judiciary and the security
of tenure guarantee as incumbent justices and judges with good performance and
clean records can be named anew in legal contemplation without interruption in the
continuity of their service; that the provision granting the President authority to fix
the compensation and allowances of the Justices and judges survives the test of
undue delegation of legislative power, a standard having been clearly adopted
therefor; that the reorganization provided by the challenged Act will be carried out in
accordance with the President's constitutional duty to take care that the laws be
faithfully executed, and the judiciary's commitment to guard constitutional rights.
The petition was dismissed. Associate Justice Claudio Teehankee dissented in a
separate opinion; Justices Felix V. Makasiar and Venicio Escolin concurred with the
main opinion; Justice Hermogenes Concepcion concurred in the result; Justices
Antonio P. Barredo, Ramon C. Aquino, Ramon C. Fernandez, Juvenal K Guerrero,
Ameurfina Melencio-Herrera and Vicente G. Ericta concurred in separate opinions;
Justices Vicente Abad-Santos and Efren I. Plana submitted separate concurring and
dissenting opinions.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS; PARTIES; CAPACITY TO SUE;
PETITIONERS' LEGAL STANDING DEMONSTRATED. The argument as to the lack of
standing of petitioners is easily resolved. As far as Judge de Ia 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." 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, Jan.
31, 1975; "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 at 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 right 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.
2. CONSTITUTIONAL LAW; JUDICIARY; JUDICIARY REORGANIZATION ACT OF 1980;
ENACTMENT THEREOF IN ANSWER TO A PRESSING AND URGENT NEED; GOOD FAITH
OBSERVED IN ITS ENACTMENT. The enactment of Batas Pambansa Blg. 129would
firstly, result in the attainment "of more efficiency in the disposal of cases. Secondly, the
improvement in the quality of justice dispensed by the courts is expected as a necessary
consequence of the easing of the court's dockets. Thirdly, the structural changes
introduced in the bill, together with the reallocation of jurisdiction and the revision of the
rules of procedure, are designated to suit the court system to the exigencies of the
present day Philippine society, and hopefully, of the foreseeable future." It may be
observed that the volume containing the minutes of the proceedings of the Batasang
Pambansa show that 590 pages were devoted to its discussion. It is quite obvious that it
took considerable time and effort as well as exhaustive study before the act was signed
by the President on August 14, 1981. With such a background, it become quite manifest
how lacking in factual basis is the allegation that its enactment is tainted by the vice of
arbitrariness. What appears undoubted and undeniable is the good faith that
characterized its enactment from its inception to the affixing of the Presidential
signature. cdasia
3. ID.; ID.; ID.; RESULTING ABOLITION OF COURTS IN GOOD FAITH, WITH DUE
RECOGNITION OF THE SECURITY OF TENURE GUARANTEE; VALIDITY OF ABOLITION OF AN
OFFICE, SETTLED RULE. Nothing is better settled in our law than that the abolition of
an office within the competence of a legitimate body if done in good faith suffers from no
infirmity. Theponencia of Justice J.B.L. Reyes in Cruz v. Primicias, Jr., L-28573, June 13,
1968, reiterated such a doctrine: "We find this point urged by respondents, to be without
merit. No removal or separation of petitioners from the service is here involved, but the
validity of the abolition of their offices. This is a legal issue that is for the Courts to
decide. It is well-known rule also that valid abolition of offices is neither removal nor
separation of the incumbents. . . . And, of course, if the abolition is void, the incumbent is
deemed never to have ceased to hold office. The preliminary question laid at rest, we
pass to the merits of the case. As well-settled as the rule that the abolition of an office
does not amount to an illegal removal of its incumbent is the principle that, in order to
be valid, the abolition must be made in good faith." The above excerpt was quoted with
approval in Bendanillo, Sr. vs. Provincial Governor, L-28614, Jan. 17, 1974, two earlier
cases enunciating a similar doctrine having preceded it. As with the offices in the other
branches of the government, so it is with the Judiciary. The test remains whether the
abolition is in good faith. As that element is conspicuously present in the enactment

of Batas Pambansa Blg. 129, then the lack of merit of this petition becomes even more
apparent.
4. ID.; ID; ID.; ENACTMENT THEREOF MAINTAINS UNIMPAIRED THE
INDEPENDENCE OF THE JUDICIARY; TERMINATION BY VIRTUE OF THE ABOLITION OF
THE OFFICE DOES NOT IMPAIR SECURITY OF TENURE; SUPREME COURT TO BE
CONSULTED IN THE IMPLEMENTATION OF THE REORGANIZATION OF THE JUDICIARY.
Petitioners contend that the abolition of the existing Inferior Courts collides with the
security of tenure enjoyed by incumbent Justices and judges under Article X, Section 7
of the Constitution. There was a similar provision the 1935 Constitution. It did not,
however, go as far as conferring on this Tribunal the power to supervise
administratively inferior courts. Moreover, this Court is empowered "to discipline
judges of inferior courts and, by a vote of at least eight members, order their
dismissal. "Thus it possesses the competence to remove judges. Under the Judiciary
Act, it was the President who was vested with such power. Removal is, of course, to
be, distinguished from termination by virtue of the abolition of the office. After the
abolition, there is in law no occupant. In case of removal, there is an office with an
occupant who would thereby lose his position. It is in that sense that from the standpoint of strict law, the question of any impairment of security of tenure does not arise.
Nonetheless, for the incumbents of 'Inferior Courts abolished, the effect is one of
separation. As to its effect, no distinction exists between removal and the abolition of
the office. Realistically, it is devoid of significance. He ceases to be a member of the
Judiciary. In the implementation of the assailed legislation, therefore, it would be in
accordance with accepted principles of constitutional construction that as far as
incumbent justices and judges are concerned, this Court be consulted and that its
view be accorded, the fullest consideration. No fear need be entertained that there is
a failure to accord respect to the basic principle that this Court does not render
advisory opinions. No question of law is involved. If such were the case, certainly this
Court could not have its say prior to the action taken by either of the two
departments. Even then, it could do so but only by way of deciding a case where the
matter has been put in issue. Neither is there any intrusion into who shall be
appointed to the vacant positions created by the reorganization. That remains in the
hands of the Executive to whom it properly belongs. There is no departure therefore
from the tried and tested ways of judicial power. Rather what is sought to be achieved
by this liberal interpretation is to preclude any plausibility to the charge that in the
exercise of the conceded power of reorganizing the Inferior Courts, the power of
removal of the present incumbents vested in this Tribunal is ignored or disregarded.
The challenged Act would thus be free from any unconstitutional taint, even one not
readily discernible except to those predisposed to view it with distrust. Moreover, such
a construction would be in accordance with the basic principle that in the choice of
alternatives between one which would save and another which would invalidate a
statute, the former is to be preferred. There is an obvious way to do so. The principle
that the Constitution enters into and forms part of every act to avoid any
unconstitutional taint must be applied.
5. ID.; ID.; ID.; AUTHORITY OF THE PRESIDENT TO FIX THE COMPENSATION AND
ALLOWANCES OF JUSTICES AND JUDGES NOT AN UNDUE DELEGATION OF LEGISLATIVE
POWER; EXISTENCE OF A STANDARD TO AVOID THE TAINT OF UNDUE DELEGATION
CLEAR. Petitioners would characterize as an undue delegation of legislative power to
the President the grant of authority to fix the compensation and the allowances of the
Justices and judges thereafter appointed. A more careful reading of the challenged Batas

Pambansa Blg. 129 ought to have cautioned them against raising such an issue. The
language of the statute is quite clear. The questioned provision reads as follows:
"Intermediate Appellate Justices, Regional Trial Judges, Metropolitan Trial Judges,
Municipal Trial Judges, and Municipal Circuit Trial Judges shall receive such compensation
and allowances as may be authorized by the President along the guidelines set forth in
Letter of Implementation No. 93 pursuant to Presidential Decree No. 985, as amended
by Presidential Decree No. 1597." (Chapter IV, Sec. 41 of Batas Pambansa Blg. 129) The
existence of a standard is thus clear. The basic postulate that underlies the doctrine of
non-delegation is that it is the legislative body which is entrusted with the competence
to make laws and to alter and repeal them, the test being the completeness of the
statute in all its terms and provisions when enacted. As pointed out in Edu v. Ericta, L32096, Oct. 24, 1970, "To avoid the taint of unlawful delegation, there must be a
standard, which implies at the very least that the legislature itself determines matters of
principle and lays down fundamental policy. Otherwise, the charge of complete
abdication may be hard to repeal. A standard thus 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. It is the
criterion by which legislative purpose may be carried out. Thereafter, the executive or
administrative office designated may in pursuance of the above guidelines promulgate
supplemental rules and regulations. The standard may be either express or implied. If
the former, the non-delegation objection is easily met. The standard though does not
have to be spelled out specifically. It could be implied from the policy and purpose of the
act considered as a whole."
6. ID.; ID.; ID.; NO AMBIGUITY EXISTS IN THE EXECUTION OF THE REORGANIZATION LAW.
Another objection based on the absence in the statute of what petitioners refer to as a
"definite time frame limitation" is equally bereft of merit. They ignore the categorical
language of this provision: "The Supreme Court shall submit to the President, within
thirty (30) days from the date of the effectivity of this Act, a staffing pattern for all courts
constituted pursuant to this Act which shall be the basis of the implementing order to be
issued by the President in accordance with the immediately succeeding section." (Sec.
43, Batas Pambansa Blg. 129) The first sentence of the next Section is even more
categorical: "The provisions of this Act shall be immediately carried out in accordance
with an Executive Order to be issued by the President." (Sec. 44, Batas Pambansa Blg.
129) Certainly petitioners cannot be heard to argue that the President is insensible to his
constitutional duty to take care that the laws be faithfully executed. In the meanwhile,
the existing Inferior Courts affected continue functioning as before, "until the completion
of the reorganization provided in this Act as declared by the President. Upon such
declaration, the said courts shall be deemed automatically abolished and the incumbents
thereof shall cease to hold office. "There is no ambiguity. The incumbents of the courts
thus automatically abolished "shall cease to hold office." No fear need be entertained by
incumbents whose length of service, quality of performance, and clean record justify
their being named anew, in legal contemplation without any interruption in the
continuity of their service. It is equally reasonable to assume that from the ranks of
lawyers, either in the government service, private practice, or law professors will come
the new appointees. In the event that in certain cases a little more time is necessary in
the appraisal of whether or not certain incumbents deserve reappointment, it is not from
their standpoint undesirable. Rather, it would be a reaffirmation of the good faith that
will characterize its implementation by the Executive. There is pertinence to this
observation of Justice Holmes that even acceptance of the generalization that courts
ordinarily should not supply omissions in a law, a generalization qualified as earlier

shown by the principle that to save a statute that could be done, "there is no canon
against using common sense in construing laws as saying what they obviously mean."
(Cf, Roschen v. Ward, 279 US 337, 339 [1929]) LLjur
7. ID.; ID.; ID.; PARTICIPATION OF SEVERAL JUSTICES IN THE PREPARATION OF AN
ALTERNATIVE PLAN FOR REORGANIZATION NOT OBJECTIONABLE; SUPREME COURT
DIRECTLY INVOLVED WITH JUDICIAL REFORM. On the morning of the hearing of the
petition, petitioners sought to disqualify the Chief Justice and Associate Justices Ramon
Aquino and Ameurfina Melencio-Herrera because the first named was the Chairman and
the other two, members of the Committee on Judicial Reorganization. The motion was
denied. It was made clear then and there that not one of the three members of the Court
had any hand in the framing or in the discussion of Batas Pambansa Blg. 129. They were
not consulted. They did not testify. The challenged legislation is entirely the product of
the efforts of the legislative body. Their work was limited, as set forth in the Executive
Order, to submitting alternative plan for reorganization. That is more in the nature of
scholarly studies. Ever since 1973, this Tribunal has had administrative supervision over
inferior courts. It has had the opportunity to inform itself as to the way judicial business
is conducted and how it may be improved. Even prior to the 1973 Constitution, either the
then Chairman or members of the Committee on Justice of the then Senate of the
Philippines consulted members of the Court in drafting proposed legislation affecting the
judiciary. It is not inappropriate to cite this excerpt from an article in the 1975 Supreme
Court Review: "In the Twentieth century the Chief Justice of the United States has played
a leading part in judicial reform. A variety of conditions have been responsible for the
development of this role, and foremost among them has been the creation of explicit
institutional structures designed to facilitate reform." Also: "Thus the Chief Justice cannot
avoid exposure to and direct involvement in judicial reform at the federal level and, to
the extent issues of judicial federalism arise, at the state level as well." (Fish, William
Howard Taft and Charles Evan Hughes, 1975 Supreme Court Review 123)
8. ID.; ID.; ID.; GUARANTEE OF JUDICIAL INDEPENDENCE OBSERVED. It is a cardinal
article of faith of our constitutional regime that it is the people who are endowed with
rights, to secure which a government is instituted. Acting as it does through public
officials, it has to grant them either expressly or impliedly certain powers. Those they
exercise not for their own benefit but for the body politic. The Constitution does not
speak in the language of ambiguity: "A public office is a public trust." (Art. XIII, Sec. I)
That is more than a moral adjuration. It is a legal imperative. The law may vest in a
public official certain rights. It does so to enable them to perform his functions and fulfill
his responsibilities more efficiently. It is from that standpoint that the security of tenure
provision to assure judicial independence is to be viewed. It is an added guarantee that
justices and judges can administer justice undeterred by any fear of reprisal or untoward
consequence. Their judgments then are even more likely to be inspired solely by their
knowledge of the law and the dictates of their conscience, free from the corrupting
influence of base or unworthy motives. The independence of which they are assured is
impressed with a significance transcending that of a purely personal right. As thus
viewed, it is not solely for their welfare. The challenged legislation was thus subjected to
the most rigorous scrutiny by this Tribunal, lest by lack of due care and circumspection, it
allows the erosion of that ideal so firmly embedded in the national consciousness.
9. ID.; ID.; ID.; ID.; JUDICIAL INDEPENDENCE PRESERVED DESPITE THE REORGANIZATION
OF INFERIOR COURTS. At emphasized by former Chief Justice Paras in Ocampo vs.
Secretary of Justice, 57 O.G. 147(1955) "there is no surer guarantee of judicial
independence than the God-given character and fitness of those appointed to the Bench.

The judges may be guaranteed a fixed tenure of office during good behaviour, but if they
are of such stuff as allows them to be subservient to one administration after another, or
to cater to the wishes of one litigant after another, the independence of the Judiciary will
be nothing more than a myth or any empty ideal. Our judges, we are confident, can be of
the type of Lord Coke, regardless or in spite of the power of Congress we do not say
unlimited but as herein exercised to reorganize inferior courts."
10. ID.; ID.; ID.; UPHOLDING THE CONSTITUTIONALITY THEREOF WILL NOT RESULT IN
DELETERIOUS CONSEQUENCES TO THE ADMINISTRATION OF JUSTICE. There is no
reason to assume that the failure of this suit to annul Batas Pambansa Blg. 129 would be
attended with deleterious consequences to the administration of justice. It does not
follow that the abolition In good faith of the existing inferior courts except the
Sandiganbayan and the Court of Tax Appeals and the creation of new ones will result in a
judiciary unable or unwilling to discharge with independence its solemn duty or one
recreant to the trust reposed in it. Nor should there be any fear that less than good faith
will attend the exercise of the appointing power vested in the Executive. It cannot be
denied that an independent and efficient Judiciary is something to the credit of any
administration. Well and truly has it been said that the fundamental principle of
separation of powers assumes, and justifiably so, that the three departments are as one
in their determination to pursue the ideals and aspirations and to fulfill the hopes of the
sovereign people as expressed in the Constitution. Justice Malcolm in Manila Electric Co.
v. Pasay Transportation Company, 57 Phil. 600 (1932) said: "Just as the Supreme Court,
as the guardian of constitutional rights, should not sanction usurpations by any other
department of the government, so should it as strictly confine its own sphere of influence
to the powers expressly or by implication conferred on it by the Organic Act." To that
basic postulate underlying our constitutional system, this Court remains committed.
BARREDO, J ., concurring:
1. CONSTITUTIONAL LAW; JUDICIARY; JUDICIARY REORGANIZATION ACT OF 1980 (BATAS
PAMBANSA BLG. 129); JUDICIAL REORGANIZATION NOT CONTRARY TO THE
INDEPENDENCE OF THE JUDICIARY PRINCIPLE. It being conceded that the power to
create or establish carries with it the power to abolish, and it is a legal axiom, or at least
a pragmatic reality, that the tenure of the holder of an office must of necessity end when
his office no longer exists, We have no alternative than to hold that petitioners'
invocation of the independence-of-the-judiciary principle of the Constitution is unavailing
in the cases at bar. To insist that what Batas Pambansa 129 is doing is just a renaming,
and not a substantial and actual modification or alteration of the present judicial
structure or system, assuming a close scrutiny might somehow support such a
conclusion, is pure wishful thinking, it being explicitly and unequivocally provided in the
Section in question that said courts "are deemed abolished" and further, as if to make it
most unmistakably emphatic, that "incumbents thereof shall cease to hold office."Dura
lex, sed lex.
2. ID.; ID.; ID.; JUDICIAL REORGANIZATION, AN URGENT NEED; TWO-FOLD OBJECTIVES OF
THE LAW ALIGNED WITH THE FOUNDATION OF THE PRINCIPLE OF INDEPENDENCE OF THe
JUDICIARY. Judicial reorganization becomes urgent and inevitable not alone because of
structural inadequacies of the system or of the cumbersomeness and technicalitypeppered and dragging procedural rules in force, but also when it becomes evident that
a good number of those occupying positions in the judiciary, make a mockery of justice
and take advantage of their office for selfish personal ends and yet, those in authority

cannot expeditiously cope with the situation under existing laws and rules. It is my
personal assessment of the present situation in our judiciary that its reorganization has
to be of necessity two-pronged, for the most ideal judicial system with the most perfect
procedural rules cannot satisfy the people and the interests of justice unless the men
who hold positions therein possess the character, competence and sense of loyalty that
can guarantee their devotion to duty and absolute impartiality, nay, impregnability to all
temptations of graft and corruption, including the usual importunings and the fearsome
albeit improper pressures of the powers that be. I am certain that Filipino people feel
happy that Batas Pambansa 129 encompasses both of these objectives which indeed are
aligned with the foundation of the principle of independence of the judiciary. LLphil
3. ID.; CONSTITUTION; CHARTER TIMELESS EXCEPT FOR ADOPTION OF MEASURES
DURING VERY UNUSUAL INSTANCES; INTEGRITY OF THE FUNDAMENTAL LAW
UNDIMINISHED THEREBY. The Constitution is not just a cluster of high sounding
verbiages spelling purely idealism and nobility in the recognition of human dignity,
protection of individual liberties and providing security and promotion of the general
welfare under a government of laws. The fundamental law of the land is a living
instrument which translates and adapts itself to the demands of obtaining
circumstances. It is written for all seasons, except for very unusual instances that human
ratiocination cannot justify to be contemplated by its language even if read in its
broadest sense and in the most liberal way. Verily, it is paramount and supreme in peace
and in war, but even in peace grave critical situations arise demanding recourse to
extraordinary solutions. Paraphrasing the Spanish adage, "Grandes males, grandes
remedios," such inordinary problems justify exceptional remedies. And so, history records
that in the face of grave crises and emergencies, the most constitutionally idealistic
countries have, at one time or another, under the pressure of pragmatic considerations,
adopted corresponding realistic measures, which perilously tether along the periphery of
their Charters, to the extent of creating impressions, of course erroneous, that the same
had been transgressed, although in truth their integrity and imperiousness remained
undiminished and unimpaired.
4. ID.;
JUDICIARY;
JUDICIAL
REORGANIZATION; BATAS
PAMBANSA
BLG.
129 CONSTITUTIONALLY PERMISSIBLE FOR THE ATTAINMENT OF THE OBJECTS IT SEEKS
TO PURSUE. If indeed there could be some doubt as to the correctness of this Court's
judgment that Batas Pambansa 129 is not unconstitutional, particularly its Sec. 44, I am
convinced that the critical situation of our judiciary today calls for solutions that may not
in the eyes of some conform strictly with the letter of theConstitution but indubitably
justified by its spirit and intent. The Charter is not just a construction of words to whose
literal ironclad meanings we must feel hidebound, without regard to every Constitution's
desirable inherent nature of adjustability and adaptability to prevailing situations so that
the spirit and fundamental intent and objectives of the framers may remain alive. Batas
Pambansa 129 is one such adaptation that comes handy for the attainment of the
transcendental objectives it seeks to pursue. While, to be sure, it has the effect of
factually easing out some justices and judges before the end of their respective
constitutional tenure sans the usual administrative investigation, the desirable end is
achieved thru means that, in the light of the prevailing conditions, is constitutionally
permissible.
5. ID.; ID.; ID.; BATAS PAMBANSA 129 DOES NOT RENDER MEANINGLESS THE
INDEPENDENCE OF THE JUDICIARY; ABOLITION OF EXISTING COURTS ALLOWED BY
THE CONSTITUTION. Notwithstanding this decision, the independence of the judiciary
in the Philippines is far from being insubstantial, much less meaningless and dead. Batas

Pambansa 129 has precisely opened our eyes to how, despite doubts and misgivings,
the Constitution can be so construed as to make it possible for those in authority to
answer the clamor of the people for an upright judiciary and overcome constitutional
roadblocks more apparent than real. LibLex
6. ID.; ID.; ID.; PRESIDENTIAL APPOINTEES TO THE BENCH WILL BE CAREFULLY
CONSIDERED. By this decision, the Court has in factual effect albeit not in
constitutional conception yielded generally to the Batasang Pambansa, and more
specifically to the President, its own constitutionally conferred power of removal of
judges. Section 44 of the Batasan Act declares that all of them shall be deemed to have
ceased to hold office, leaving it to the President to appoint those whom he may see fit to
occupy the new courts. Thus, those who will not be appointed can be considered as
"ceasing to hold their respective offices," or, as others would say they would be in fact
removed. How the President will make his choice is beyond Our power to control. But
even if some may be eased out even without being duly informed of the reason therefor,
much less being given the opportunity to be heard, the past actuations of the President
on all matters of deep public interest should serve as sufficient assurance that when he
ultimately acts, he will faithfully adhere to his solemn oath "to do justice to every man,"
hence, he will equip himself first with the fullest reliable information before he acts.
AQUINO, J ., concurring:
1. REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS; DECLARATORY RELIEF AND PROHIBITION
NOT THE PROPER REMEDY TO TEST THE CONSTITUTIONALITY OF A LAW; NO JUSTICIABLE
CONTROVERSY IN CASE AT BAR. The petition should have been dismissed outright
because this Court has no jurisdiction to grant declaratory relief and prohibition is not the
proper remedy to test the constitutionality of the law. The petition is premature. No
jurisdictional question is involved. There is no justiciable controversy wherein the
constitutionality of the law is in issue. It is presumed to be constitutional. The lawmaking
body before enacting it looked into the constitutional angle.
2. ID.; ID.; ID.; PARTIES; PETITIONERS WITHOUT PERSONALITY TO ASSAIL THE
CONSTITUTIONALITY OF THE JUDICIARY REORGANIZATION LAW. Seven of the eight
petitioners are practising lawyers. They have no personality to assail the constitutionality
of the law even as taxpayers. The eighth petitioner, Gualberto J. de la Llana, a city judge,
has no cause of action for prohibition. He is not being removed from his position.
3. CONSTITUTIONAL LAW; JUDICIARY; JUDICIAL REORGANIZATION; BATAS PAMBANSA BLG.
129; ENACTMENT THEREOF IN GOOD FAITH. The Judiciary Reorganization Law was
enacted in utmost good faith and not "to cloak an unconstitutional and evil purpose." In
enacting the said law, the lawmaking body acted within the scope of its constitutional
powers and prerogatives.
GUERRERO, J ., concurring:
1. CONSTITUTIONAL LAW; JUDICIARY; JUDICIARY REORGANIZATION ACT OF 1980;
OBJECTIVES. The institutional reforms and changes envisioned by the law are clearly
conducive to the promotion of national interests. The objectives of the legislation,
namely: (a) An institutional restructuring by the creation of an Intermediate Appellate
Court, thirteen (13) Regional Trial Courts, Metropolitan Trial Courts, Municipal Trial Courts
and Municipal Circuit Trial Courts; (b) A re-apportionment of jurisdiction geared towards
greater efficiency; (c) A simplification of procedures; and (d) The abolition of the inferior
courts created by the Judiciary Act of 1948 and other statutes, as approved by the
Congress of the Philippines are undoubtedly intended to improve the regime of justice

and thereby enhance public good and order. Indeed, the purpose of the Act as further
stated in the Explanatory Note, which is "to embody reforms in the structure,
organization and composition of the Judiciary, with the aim of improving the
administration of justice, of decongesting judicial dockets, and coping with the more
complex problems on the present and foreseeable future" cannot but "promote the
welfare of society, since that is the final cause of law." (Cardozo, the Nature of the
Judicial Process, p. 66)
2. ID.; ID.; ID.; LAW CONSTITUTIONAL FROM THE STANDPOINT OF GENERAL UTILITY AND
FUNCTIONAL VALUE. From the standpoint of the general utility and functional value of
the Judiciary Reorganization Act, there should be no difficulty, doubt or disbelief in its
legality and constitutionality. That there are ills and evils plaguing the judicial system is
undeniable. The notorious and scandalous congestion of court dockets is too well-known
to be ignored as are the causes which create and produce such anomaly. Evident is the
need to look for devices and measures that are more practical, workable and economical.
3. ID.; ID.; ID.; ENACTMENT THEREOF PRESUMED REGULAR AND DONE IN GOOD FAITH.
In the light of the known evils and infirmities of the judicial system, it would be absurd
and unreasonable to claim that the legislators did not act upon them in good faith and
honesty of purpose and with legitimate ends. It is presumed that official duty has been
regularly performed. The presumption of regularity is not confined to the acts of the
individual officers but also applies to the acts of boards, such as administrative board or
bodies, and to acts of legislative bodies. Good faith is always to be presumed in the
absence of proof to the contrary, of which there is none in the case at bar. It could not be
otherwise if We are to accord as We must, full faith and credit to the lawmakers' deep
sense of public service and the judicious exercise of their high office as the duly-elected
representatives of the people.
4. ID.; ID.; ID.; ID.; RESULTANT ABOLITION OF COURTS; SUPREME COURT CANNOT
INQUIRE INTO THE WISDOM OF THE LAW. In Morfe vs. Mutuc, L-20387, Jan. 31, 1968,
the Supreme Court held: "It is not the province of the courts to supervise legislation and
keep it within the bounds of propriety and common sense. That is primarily and
exclusively a legislative concern. The Courts are not supposed to override legitimate
policy and . . . never inquire into the wisdom of the law." Chief Justice Fernando who
penned the Morfe decision writes in The Constitution of the Philippines that while "(i)t is
thus settled, to paraphrase Chief Justice Concepcion in Gonzales v. Commission on
Elections, that only congressional power or competence, not the wisdom of action taken,
may be the basis for declaring a statute invalid," he adds that it is "useful to recall what
was so clearly stated by Laurel that 'the Judiciary in the determination of actual cases
and controversies must reflect the wisdom and justice of the people as expressed
through their representatives in the executive and legislative departments of the
government.'" In any case, petitioners have not shown an iota of proof of bad faith. There
is no factual foundation of bad faith on record. I do not consider the statement in the
sponsorship speech for Cabinet Bill No. 42 of Minister of Justice Ricardo J. Puno that the
Bill would be a more efficient vehicle of "eliminating incompetent and unfit Judges" as
indicative of impermissible legislative motive.
5. ID.; ID.; ID.; SECURITY OF TENURE; NATURE AND CONCEPT OF A PUBLIC OFFICE. The
Justices and judges directly affected by the law, being lawyers, should know or are
expected to know the nature and concept of a public office. It is created for the purpose
of effecting the ends for which government has been instituted, which are for the

common good, and not the profit, honor or private interest of any one man, family or
class of men. In our form of government, it is fundamental that public offices are public
trust, and that the person to be appointed should be selected solely with a view to the
public welfare. In the last analysis, a public office is a privilege in the gift of the State.
6. ID.; ID.; ID.; ID.; ID.; NO VESTED INTEREST EXISTS IN AN OFFICE; JUDICIAL
APPOINTMENT TERMINATES WITH THE ABOLITION OF THE COURT. There is no such
thing as a vested interest or an estate in an office, or even an absolute right to hold
office. Excepting constitutional offices which provide for special immunity as regards
salary and tenure, no one can be said to have any vested right in an office or its salary.
When an office is created by the Constitution, it cannot be abolished by the legislature,
but when created by the State under the authority of the Constitution, it may be
abolished by statute and the incumbent deprived of his office. Acceptance of a judicial
appointment must be deemed as adherence to the rule that "when the court is
abolished, any unexpired term is abolished also. The Judge of such a court takes office
with that encumbrance and knowledge. The Judge's right to his full term and his full
salary are not dependent alone upon his good conduct, but also upon the contingency
that the legislature may for the public good, in ordaining and establishing the courts,
from time to time consider his office unnecessary and abolish it.
7. ID.; ID.; ID.; REMOVAL AND RE-APPOINTMENT OF JUDGES UNDER THE JUDICIARY
REORGANIZATION ACT, A PRESIDENTIAL POWER AND PREROGATIVE. The removal from
office of an incumbent is merely incidental to the valid act of abolition of the office as
demanded by the superior and paramount interest of the people. The bad and the
crooked judges must be removed. The good and the straight, sober judges should be
reappointed but that is the sole power and prerogative of the President who, I am
certain, will act according to the best interest of the nation and in accordance with his
solemn oath of office "to preserve and defend its Constitution, execute its laws, do
justice to everyone." There and then the proper balance between the desire to preserve
private interest and the desideratum of promoting the public good shall have been
struck. cdtai
8. ID.; ID.; ID.; CONSTRUCTION IN FAVOR OF THE CONSTITUTIONALITY OF THE LAW TO BE
ADOPTED. The Supreme Court has been called the conscience of the Constitution. It
may be the last bulwark of constitutional government. It must, however, be remembered
"that legislatures are ultimate guardians of the liberties and welfare of the people in
quite as great a degree as courts." (Missouri, K. & T. Co. vs. May, 194 U.S. 267, 270) The
responsibility of upholding the Constitution rests not on the courts alone but on the
legislatures as well. It adheres, therefore, to the well-settled principle that "all reasonable
doubts should be resolved in favor of the constitutionality of a statute" for which reason
it will not set aside a law as violative of the Constitution "except in a clear case." (People
vs. Vera [1937], 65 Phil. 56).
9. ID.; ID.; ID.; SOCIAL JUSTIFICATION AND THE FUNCTIONAL UTILITY OF THE LAW
SUFFICIENT TO UPHOLD ITS CONSTITUTIONALITY. I view the controversy presented as
a conflict of opinions on judicial independence, whether impaired or strengthened by the
law; on reorganization of the courts, whether abolition of office or removal therefrom;
and on delegation of legislative power, whether authorized or unauthorized. Without
detracting from the merits, the force and brilliance of their advocacies based on logic,
history and precedents, I choose to stand on the social justification and the functional
utility of the law to uphold its constitutionality. In the light of contemporaneous events
from which the New Republic emerged and evolved new ideals of national growth and

development, particularly in law and government, a kind or form of judicial activism,

perhaps similar to it, is necessary to justify as the ratio decidendi of Our judgment.
DE CASTRO, J ., concurring:
1. CONSTITUTIONAL LAW; JUDICIARY; CREATION AND ORGANIZATION OF COURTS, A
CONSTITUTIONAL PREROGATIVE OF THE LEGISLATURE. A creation and organization of
courts inferior to the Supreme Court is a constitutional prerogative of the legislature. This
prerogative is plenary and necessarily implies the power to reorganize said courts, and in
the process, abolish them to give way to new or substantially different ones. To contend
otherwise would be to forget a basic doctrine of constitutional law that no irrepealable
laws shall be passed. dctai
2. ID.; ID.; ID.; POWER TO CREATE STATUTORY COURTS INCLUDES THE POWER TO
ABOLISH THEM; JUDICIAL SECURITY OF TENURE NOT A LEGAL IMPEDIMENT TO THE
EXERCISE THEREOF. The power to create courts and organize them is necessarily the
primary authority from which would thereafter arise the security of tenure of those
appointed to perform the functions of said courts. In the natural order of things,
therefore, since the occasion to speak of security of tenure of judges arises only after the
courts have first been brought into being, the right to security of tenure takes a
secondary position to the basic and primary power of creating the courts to provide for a
fair and strong judicial system. If the legislature, in the exercise of its authority, deems it
wise and urgent to provide for a new set of courts, and in doing so, it feels the abolition
of the old courts would conduce more to its objective of improving the judiciary and
raising its standard, the matter involved is one of policy and wisdom into which the
courts, not even the Supreme Court, cannot inquire, much less interfere with. By this
secondary position it has to the primary power of the legislature to create courts, the
security of tenure given to the incumbents should not be a legal impediment to the
exercise of that basic power of creating the statutory courts which, by necessary
implication, includes the power to abolish them in order to create new ones. This primary
legislative power is a continuing one, and the resultant right of security of tenure of
those appointed to said courts could not bring about the exhaustion of that power.
Unquestionably, the legislature can repeal its own laws, and that power can never be
exhausted without, as a consequence, violating a fundamental precept of constitutional
and representative government that no irrepealable laws shall be passed.
3. ID.; ID.; JUDICIARY REORGANIZATION ACT OF 1980; AN EFFECTIVE AND EFFICIENT
SYSTEM OF ADMINISTRATION OF JUSTICE MORE IMPORTANT THAN THE SECURITY OF
TENURE OF JUDGES. The passage of the Judiciary Reorganization Act of 1980 is no
more than the exercise of the power vested by the Constitution on the legislative body of
the Republic. That power carries with it the duty and responsibility of providing the
people with the most effective and efficient system of administration of justice. This is by
far of more imperative and transcendental importance than the security of tenure of
judges which, admittedly, is one of the factors that would conduce to independence of
the judiciary but first of all, a good, efficient and effective judiciary. A judiciary wanting
in these basic qualities does not deserve the independence that is meant only for a
judiciary that can serve best the interest and welfare of the people which is the most
primordial and paramount consideration, not a judiciary in which the people's faith has
been eroded, a condition which the security of tenure, in some instances, may even be
contributory.

4. ID.; ID.; ID.; ID.; INFRINGEMENT OF THE RIGHT OF SECURITY OF TENURE JUSTIFIED BY
THE EXERCISE OF POLICE POWER. When two interests conflict as what had given rise
to the present controversy the duty of the legislature to provide society with a fair,
efficient and effective judicial system, on one hand, and the right of judges to security of
tenure, on the other, the latter must of necessity yield to the former. One involves public
welfare and interest more directly and on a greater magnitude than the right of security
of tenure of the judges which is, as is easily discernible, more of a personal benefit to
just a few, as only the judge affected could seek judicial redress of what he conceives to
be its violation. Herein lies the propriety of the exercise of "police power" of the State, if
this concept which underlies even the Constitution, has to be invoked as a constitutional
justification of the passage of the Act in question. That is, if a conflict between the
primary power of the legislature to create courts, and mere consequential benefit
accorded to judges and justices after the creation of the courts is indeed perceivable,
which the writer falls to see, or, at least, would disappear upon a reconciliation of the two
apparently conflicting interests which, from the above disquisition, is not hard to find. It
is, without doubt, in the essence of the exercise of police power that a right assessable
by individuals may be infringed in the greater interest of the public good and general
welfare. This is demonstrated in how the rights and freedoms enumerated in the Bill of
Rights enjoyable by the entire people, not just be a handful in comparison, are made
subject to the lawful exercise of the police power of the State.
5. ID.; ID.; ID.; RESULTANT ABOLITION OF COURTS DOES NOT AMOUNT TO UNLAWFUL
REMOVAL OF JUDGES. The provision of Article XVII, Section 10 of the Constitution gives
to judicial officials no more than a guarantee that their retirement age as fixed in the
Constitution shall not be alterable at mere legislative pleasure. The equivalent provision
in the1935 Constitution was inserted for the first time because the retirement age before
then was provided merely by statute not by the Constitution. If it comes to their removal
or suspension, what gives them constitutional protection is the aforequoted provision
which does not contemplate abolition of office when done in good faith, for removal
implies the existence of the office, not when it is abolished. As has been held, abolition of
office for no reason related to public welfare or for the good of the service, let alone
when done in bad faith, amounts to an unlawful removal. The abolition of the courts as
declared in the Act as a result of a reorganization of the judiciary, as the title of the law
curtly but impressively announces, can by no means, from any viewpoint, be so branded.
And whether by said reorganization, the present courts would be deemed abolished, as
the law expresses such an unmistakable intent, the matter is one for the sole and
exclusive determination of the legislature. It rests entirely on its discretion whether by
the nature and extent of the changes it has introduced, it has done enough to consider
them abolished. To give the Supreme Court the power to determine the extent or nature
of the changes as to their structure, distribution and jurisdiction, before the clear intent
to abolish them, or to declare them so abolished, is given effect, would be to allow undue
interference in the function of legislation. This would be contrary to the primary duty of
courts precisely to give effect to the legislative intent as expressed in the law or as may
be discovered therefrom.
6. ID.; ID.; ID.; ID.; JUDICIAL INQUIRY INTO THE ABOLITION OF COURTS NOT PROPER.
The abolition of the courts is a matter of legislative intent into which no judicial inquiry is
proper, except perhaps if that intent is so palpably tainted with constitutional
repugnancy, which is not so in the instant case. We have, therefore, no occasion to speak
of removal of judges when the reorganization of the judiciary would result in the abolition
of the courts other than the Supreme Court and the Court of Tax Appeals. Hence, the
provision of the Constitution giving to the Supreme Court power to dismiss a judge by a

vote of eight justices does not come into the vortex of the instant controversy. Its
possible violation by the assalied statute cannot happen, and may, therefore, not
constitute an argument against the constitutionality of the law. cda
7. ID.; ID.; ID.; ARBITRARINESS IN THE IMPLEMENTATION OF THE LAW SUBJECT TO
JUDICIAL REDRESS. Only in the implementation of the law may there possibly be a
taint of constitutional repugnancy, as when a judge of acknowledged honesty, industry
and competence is separated, because an act of arbitrariness would thereby be
committed, but the abolition of the courts as declared by the law it not by itself or per se
unconstitutional. Consequently, the law, the result of serious and concerned study by a
highly competent committee, deserves to be given a chance to prove its worth in the
way of improving the judiciary. If in its implementation any one, if at all, feels aggrieved,
he can always seek judicial redress, if he can make out a case of violation of his right of
security of tenure with uncontrovestible clarity, as when the separation is very arbitrary
in the peculiar circumstances of his case, for an act of arbitrariness, under
any constitution, is unpardonable.
8. REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS; DISMISSAL OF A PREMATURE PETITION.
The petition should be dismissed for being premature. It asks this Court to exercise its
power of judicial inquiry, the power to declare a law unconstitutional when it conflicts
with the fundamental law (People vs. Vera, 63 Phil. 36). This power has well-defmed
limits, for it can be exercised only when the following requisites are present, to wit: (1)
There must be an actual case or controversy; (2) The question of constitutionality must
be raised by the proper party; (3) He should do so at the earliest opportunity; and (4)
The determination of the constitutionality of the statute must be necessary to a final
determination of the case. The petition does not present as actual controversy nor was it
filed by the proper parties.
9. ID.; ID.; ID.; ID.; PETITIONERS WITHOUT LEGAL PERSONALITY TO QUESTION THE
CONSTITUTIONALITY OF THE JUDICIARY REORGANIZATION LAW. The main ground for
which the constitutionality of the Judiciary Reorganization Act of 1980 is assailed is that it
is violative of the security of tenure of justices and judges. The only persons who could
raise the question of constitutionality of the law, therefore, are the actual incumbents of
the courts who would be separated from the service upon the abolition of the courts
affected by the law, on the theory as advanced by petitioners that their judicial security
of tenure would be violated. Olongapo City Judge de la Llana, the only judge among the
petitioners, has not been separated from the service. Nor is his separation already a
certainty, for he may be appointed to the court equivalent to his present court, or even
promoted to a higher court. Only when it has become certain that his tenure has been
terminated will an actual controversy arise on his allegation of a fact that has become
actual, not merely probable or hypothetical. The present petition may neither be allowed
as a taxpayer suit. A taxpayer may bring an action to raise the question of
constitutionality of a statute only when no one else can more appropriately bring the suit
to defend a right exclusively belonging to him, and, therefore, would localize the actual
injury to his person, and to no other. For a "proper" party to invoke the power of judicial
inquiry, as one of the requisites in the exercise of such power, does not mean one having
no better right, one more personalized, than what he has as a member of the public in
general. With the incumbent judges undoubtedly being the ones under petitioners'
theory, who would suffer direct and actual injury, they should exclude mere taxpayers
who cannot be said to suffer as "direct" and "actual" an injury as the judges and justices
by the enforcement of the assailed statute, from the right to bring the suit.

10. ID.; ID.; ID.; JUDICIARY REORGANIZATION LAW OF 1980 NOT UNCONSTITUTIONAL.
It would not be proper to declare the law void at this stage, before it has even been
given a chance to prove its worth, as the legislature itself and all those who helped by
their exhaustive and scholarly study, felt it to be an urgent necessity, and before any of
the proper parties who could assail its constitutionality would know for a fact, certain and
actual, not merely probable or hypothetical, that they have a right violated by what they
could possibly contend to be unconstitutional enforcement of the law, not by a law that is
unconstitutional unto itself. The writer is for giving the law a chance to be put into
application so as not to douse great popular expectations for the count to regain their
highest level of efficiency and reputation for probity. Inevitably, this is to be so since only
when the law is fully implemented will all the courts affected be declared abolished,
undoubtedly to avoid an interregnum when the country is without any court, except the
Supreme Court, the Court of Tax Appeals and the Sandigan. Only then will it be known
whether an actual controversy would arise because any of the incumbents have been left
out in the restructured judiciary. cdphil
11. ID.; ID.; ID.; ID.; INTERPRETATION THAT UPHOLDS THE CONSTITUTIONALITY OF THE
LAW SHOULD PREVAIL. A law should, by all reasonable intendment and feasible
means, be saved from the doom of unconstitutionality, the rule corollary thereto being
that if a law is susceptible to two interpretations, one of which would make it
constitutional, that interpretation should be adopted that will not kill the law.
12. ID.; ID.; ID.; ID.; ADEQUATE REMEDY IN LAW AVAILABLE TO THOSE WHO MAY BE
INJURED THEREBY. While in the implementation of the law, constitutional repugnancy
may not entirely be ruled out, a categorical ruling hereon not being necessary or
desirable at the moment, the law itself is definitely not unconstitutional. Any of the
incumbent judges who feel injured after the law shall have been implemented has
adequate remedy in law, with full relief as would be proper. But surely, the benefits
envisioned by the law in the discharge of one of the basic duties of government to the
people the administration of justice should not be sacrificed, as it would be, if the
law is, as sought in the present petition, declared void right now, on the claim of a few of
being allegedly denied a right, at best of doubtful character, for the claim would seem to
rest on an unsupportable theory that they have a vested right to a public office.
13. ID.;
ID.;
ID.;
ID.; BATAS
PAMBANSA
BLG.
129 NOT
SELF-EXECUTORY;
REORGANIZATION LAW DISTINGUISHED FROMREPUBLIC ACT 1186. The law in question
is not self-executing in the sense that upon its effectivity, certain judges and justices
cease to be so by direct action of the law. This is what distinguishes the Act in question
from R.A. No. 1186 involved in the case of Ocampo vs. Secretary of Justice, 50 O.G. 147
which by its direct action, no act of implementation being necessary, all the judges
whose positions were abolished, automatically ceased as such. The Act in question,
therefore, is not as exposed to the same vulnerability to constitutional attack as R.A. No.
1186 was. Yet by the operation of the Constitution with its wise provision on how a law
may be declared unconstitutional, R.A. No. 1186 stood the test for it to be enforced to
the fullness of its intent, which was, as in the law under consideration, identified with
public interest and general welfare, through a more efficient and effective judicial system
as the Judiciary Reorganization Act of 1980 seeks to establish.
14. ID.; ID.; ID.; ID.; ACHIEVEMENT OF THE PRIMARY PURPOSE OF IMPROVING THE
JUDICIARY TIlE PREVAILING FACTOR IN UPHOLDING THE CONSTITUTIONALITY OF THE LAW.
The question before this Court is a simple matter of choosing between protecting

some judges from possible separation, as the implementation of the law to achieve its
primary purpose of improving the judiciary may have to result in, or serving the interest
of the entire society through an honest, efficient and effective judiciary. For, it is
unthinkable that what is for the good of the people as a whole could have been meant by
theConstitution to be sacrificed for the sake of only a few. The greatest good for the
greatest number is an unwritten rule, more firm and enduring than any of the postulates
spread in our written Constitution.
MELENCIO-HERRERA, J ., concurring:
1. CONSTITUTIONAL LAW; JUDICIARY; JUDICIARY REORGANIZATION LAW OF 1980;
LEGISLATIVE POWER TO ABOLISH COURTS CO-EXTENSIVE WITH THE POWER TO CREATE
THEM. It is a fundamental proposition that the legislative power to create courts
ordinarily includes the power to organize and to reorganize them, and that the power to
abolish courts is generally co-extensive with the power to create them. The power to
abolish was not intended to be qualified by the permanence of tenure. (Opinion of Chief
Justice Ricardo Paras in Ocampo vs. Secretary of Justice, 51 O.G. 147 [1955], citing
McCulley vs. State, 53 SW 134 Halsey vs. Gaines, 2 Lea 316). The right of Judges to hold
office during good behavior until they reach the age of 70 years, or become
incapacitated to discharge the duties of their office, does not deprive Congress of its
power to abolish, organize or reorganize inferior courts. (Brillo vs. Enage, 94 Phil. 732,
735, citing Zandueta vs. de la Costa, 66 Phil. 615; 42 Am. Jur., Pub. Officer, 904-5).
Judges of those courts take office with that encumbrance and knowledge.
2. ID.; ID.; ID.; TENURE OF JUDGES AND TENURE OF COURTS DISTINGUISHED. Section
1, Article X refers to the "Judiciary" as a fundamental department of Government,
Section 7 of the same Article refers to the tenure of office of "individual" Judges
(inclusive of Justices of inferior Courts); that is to say, tenure of office is a matter
concerning the individual Judge. This "individuality" character of Section 7 is supported
by the clause that the Supreme Court has the power to discipline individual judges of
inferior courts.
3. ID.; ID.; LEGISLATIVE EXERCISE OF THE POWER TO REORGANIZE COURTS NOT
HAMPERED BY THE SECURITY OF TENURE GUARANTEE; JUDGES ARE ENTAILED TO THEIR
COURTS BUT COURTS ARE NOT ENTAILED TO THEIR JUDGES. A legislature is not bound
to give security of tenure to courts. Courts can be abolished. In fact, the entire judicial
system can be changed. If that system can no longer admit of change, woe to the wheels
of progress and the imperatives of growth in the development of the Judiciary. To hold
that tenure of judges is superior to the legislative power to reorganize is to render
impotent the exercise of that power. Under Section 7, Article X, Judges are entailed to
their count, from which they cannot be separated before retirement age except as a
disciplinary action for bad behavior. Under Section 1, Courts are not entailed to their
judges, because the power of the legislative to establish inferior court presupposes the
power to abolish those courts. If an inferior court is abolished, the judge presiding that
court will necessarily have to lose his position because the abolished court is not entailed
to him.
4. ID.; ID.; ID.; ID.; CONSTITUTIONAL GUARANTEE OF TENURE OF JUDGES APPLIES ONLY
AS THEIR COURTS EXIST. The constitutional guarantee of tenure of Judges applies only
as their Courts exist. As long as those Courts exist, the Judges cannot be ousted without
just cause; that is the client of the constitutional provision relative to security of tenure
of Judges. Upon declaration of the completion of the reorganization as provided for in the
Reorganization Act, the affected Courts "shall be deemed automatically abolished."

There being no Courts, there are no offices for which tenure of Judges may be claimed.
By the abolition of those offices, the rights to them are necessarily extinguished
(Manalang vs. Quitoriano, 94 Phil. 903 [(1954)].
5. ID.; ID.; ID.; BATAS PAMBANSA BLG. 129 AN ANSWER TO AN URGENT PUBLIC NEED;
GOOD FAITH IN THE ENACTMENT THEREOF PRESUMED. The challenged law was
enacted by the Batasang Pambansa in response to an urgent and pressing public need
and not for the purpose of affecting adversely the security of tenure of all Judges or
legislating them out to the detriment of judicial independence. It should not be said of
the Batasang Pambansa that its power of abolition of Courts has been used to disguise
an unconstitutional and evil purpose to defeat the security of tenure of Judges. The
Judiciary Reorganization Act of 1981 sufficiently complies with the bona fide rule in the
abolition of public office. Besides, every presumption of good faith in its actuations must
be accorded a coordinate and co-equal branch of government, supreme within the limits
of its own sphere, until that presumption is clearly overcome. There is no showing that
the Reorganization Act was motivated for personal or political reasons as to justify the
interference by the Court (Garvey vs. Lowell, 109 Mass. 47, 85 N.E. 182, 127 A.S.R. 468;
State vs. Eduards, 40 Mont. 287; 106 Pat. 695, 19 R.C.L. 236; Llanto vs. Dimaporo, 16
5CRA 599 [[1966]). Public interest and public good, as the legislative body views it, must
be balanced with tenure of Judges, which is an individual right. Reverting to Section 1
and Section 7 of Article X, the former is the weightier, because the "Judiciary" is of more
importance to the welfare of the country than the tenure of office of an individual Judge.
If a Judge is removed without cause, there can be damage to the public welfare to some
extent, but maintenance of a Court that does not meet the requirement of progressive
Government, can cause incalculable prejudice to the people.
6. ID.; ID.; ID.; REORGANIZATION OF THE JUDICIAL SYSTEM DOES NOT CONFLICT WITH
THE SUPREME COURT'S POWER TO DISCIPLINE JUDGES. Where the legislature has
willed that the Courts be abolished, the power to discipline cannot post an obstacle to
the abolition. The power to discipline can come into play only when there is removal from
an existing judicial office, but not when that office is abolished. The reorganization of the
judicial system with the abolition of certain courts is not an exercise of the power to
discipline the Judges of the abolished courts. prLL
7. ID.; ID.; ID.; ABOLITION OF COURTS NOT A DEPRIVATION OF DUE PROCESS OF LAW.
The abolition would be no deprivation either of due process of law. A public office cannot
be regarded as the "property" of the incumbent. A pubily office is not a contract (Segovia
vs. Noel, 47 Phil. 543 [[1925]). A public office is a public trust (Section 1, Article
XIII, 1973 Constitution). It is a privilege in the gift of the State (Brown vs. Russel, 166
Mast. 14, 43 NE 1005, 32 LRA 253 cited also in Taada & Carreon, Political Law of the
Philippines, Vol. 2, p. 537). The officers are the servants of the people and not their rulers
(22 R.C.L. 378-379, cited in Martin, Administrative Law, Law on Public officers and
Election Law, p. 112, 1970 ed.). Besides, it bears stressing that there is no removal from
office but abolition of the office itself.
8. ID.; ID.; ID.; BATAS PAMBANSA BLG. 129 ENACTED IN THE PURSUIT OF
DEVELOPMENTAL GOALS WITHIN THE JUDICIARY. The questioned statute is in keeping
with major reforms in other departments of government. "The thrust is on development."
It is "the first major reorganization after four generations." It does not provide for a
piecemeal change, which could be ineffective. It goes to the roots and does not just
scratch the surface of our judicial system. Its main objectives are an improved
administration of justice, the "attainment of more efficiency in the disposal of cases, a
reallocation of jurisdiction, and a revision of procedures which do not send to the proper

meting out of justice." These aims are policy matters of necessity in the pursuit of
developmental goals within the judiciary.
9. ID.; ID.; ID.; INNOVATIVE FEATURES CONTAINED IN THE REORGANIZATION LAW.
There are innovative features in the Act that commend themselves: (a) the confusing
and illogical areas of concurrent jurisdiction between trial Courts have been entirely
eliminated; (b) Under Section 39, there is a uniform period for appeal of fifteen (15) days
counted from the notice of the final order, resolution, award, judgment, or decision
appealed from; a record on appeal is no longer required to take an appeal. The entire
original record is now to be transasitted; (c) Under Section 40, in deciding appealed
cases, adoption by reference of findings of fact and conclusions of law as set forth in the
decision, order, or resolution of decisions in appealed cases; (d) Section 42 provides for a
monthly longevity pay equivalent to 5% of the monthly basic pay for Justices and Judges
of the courts herein created for each five years of continuous, efficient, and meritorious
service rendered in the Judiciary, Provided that, in no case shall the total salary of each
Justice or Judge concerned, after this longevity pay is added, exceed the salary of the
Justice or Judge next in rank. Thus, Justices and Judges who may not reach the top, where
unfortunately there is not enough room for all, may have the satisfaction of at least
approximating the salary scale of those above him depending on his length of service.
10. ID.; ID.; ID.; SAFEGUARDS TO BE UNDERTAKEN IN THE IMPLEMENTATION OF THE LAW.
While the law itself as written is constitutional, the manner in which it will be
administered should not be tainted with unconstitutionality (Myles Salt Co. vs. Board of
Commrs., 239 US 478, 60 L. Ed. 392, 36 Sct 204). To obviate the possibility of an
unconstitutional exercise of power the following safeguards are recommended and/or
expected to be undertaken: (a) the President can be expected to indicate a reasonable
time frame for the completion of the reorganization provided for in the Act and the
issuance of the corresponding implementing order; (b) appointments and their effectivity
should be simultaneous with, or as close as possible, to the declaration by the President
of the completion of the reorganization under Section 44 to avoid any detriment to the
smooth and continuous functioning of the judicial machinery; and (c) the services of
those not separated should be deemed uninterrupted, as recommended by the
Committee on Judicial Reorganization.
11. ID.; ID.; ID.; STAFFING PATTERN; NAMES OF JUDGES TO BE EXCLUDED THEREFROM;
EXECUTIVE CHOICE TO BE RESPECTED. Justice Herrera disagrees with the suggestion
of one of the amici curiae that the staffing pattern be made to include the names of
Judges. The staffing pattern for Judges it already clearly and explicitly provided in the law
itself which enumerates the various Judges and Justices in their hierarchical order.
Furthermore, to include she superior positions of Judges would depart from the
traditional concept of a staffing pattern, which refers more to personnel organization and
corresponding salaries of inferior employees. It is also constitutionally objectionable in
that it would interfere with the prerogative of appointment intrinsically executive in
nature (Guevara vs. Inocentes, 16 SCRA 379 [1966]; Government of the Philippines vs.
Springer, 50 Phil. 259 [1927]). The President may not be deprived of, nor be limited in,
the full use of his discretion in the appointment of persons to any public office. Nothing
should so trench upon executive choice as to be, in effect, judicial designation.
12. ID.; ID.; ID.; NEW APPOINTMENTS TO STRENGTHEN THE JUDICIAL SYSTEM. Reliance
can be placed on the good faith of the President that all the deserving, upon
considerations of "efficiency, integrity, length of service and other relevant factors," shall

be appointed to a strengthened and revitalized judicial system in the interest of public

service; that appointments will not be unduly delayed, and that appointees will be
evaluated thoroughly to ensure quality and impartiality in the men and women who will
keep vigil over our judicial ramparts. cdasia
ERICTA, J ., concurring:
1. CONSTITUTIONAL LAW; JUDICIARY; JUDICIARY REORGANIZATION LAW; LEGISLATIVE
POWER TO CREATE COURTS INCLUDES THE POWER TO ABOLISH THE SAME.
The constitution grants to the Batasang Pambansa the power to create courts inferior to
the Supreme Court (Article X, Section 1). All existing inferior courts were created by law.
No law is irrepealable. The power to create an office includes the power to abolish the
same. (Urgelio vs. Osmea, 9 SCRA 317; Maca vs. Ochave, 20 SCRA 142)
2. ID.; ID.; ID.; ID.; REMOVAL FROM OFFICE AND ABOLITION OF OFFICE, DISTINGUISHED.
Security of tenure cannot be invoked when there is no removal of a public officer or
employee but an abolition of his office. (Manalang vs. Quitoriano, 94 Phil. 903; Cruz vs.
Primicias, 23 SCRA 998; Baldoz vs. Office of the President, 78 SCRA 334, 362). A
distinction should be made between removal from office and abolition of an office.
Removal implies that the office subsists after ouster, while, in abolition, the office no
longer exists thereby terminating the right of the incumbent to exercise the rights and
duties of the office. (Canonigo vs. Ramiro, 31 SCRA 278)
3. ID.; ID.; ID.; RESULTANT ABOLITION OF COURTS PASSES THE TEST OF GOOD FAITH.
The power of the legislative branch of the government to abolish courts inferior to the
Supreme Court has long been established. (Ocampo vs. Secretary of Justice, 31 O.G. 147)
What is only needed is that the abolition passes the test of good faith. It need only be
shown that said abolition of the courts is merely incidental to a bona fide reorganization.
(Urgelio vs. Osmea, 9 SCRA 317)
4. ID.; ID.; ID.; PUBLIC WELFARE TO PREVAIL OVER THE INDIVIDUAL INTEREST OF JUDGES.
In the implementation of the law, some Judges and Justices may be adversely
affected. But in a conflict between public interest and the individual interest of some
Judges and Justices, the public weal must prevail. The welfare of the people is the
supreme law.
5. ID.; ID.; ID.; APPOINTMENTS TO THE NEW COURTS, A PRESIDENTIAL PREROGATIVE.
The implementation of the law will entail appointments to the new courts. The power of
appointment is the exclusive prerogative of the President. The implementation of the law
should be left exclusively to the wisdom, patriotism and statesmanship of the President.
ABAD SANTOS, J ., concurring and dissenting:
1. CONSTITUTIONAL LAW; JUDICIARY; JUDICIARY REORGANIZATION LAW OF 1980 (BATAS
PAMBANSA BLG. 129); LAW NOT UNCONSTITUTIONAL. I agree with the learned Chief
Justice of the Philippines that Batas Pambansa Blg. 129 is not unconstitutional.
2. ID.; ID.; ID.; ID.; PRIOR CONSULTATION WITH THE SUPREME COURT SHOULD NOT BE
REQUIRED OF THE PRESIDENT IN THE IMPLEMENTATION OF THE LAW. It has already
been ruled that the statute does not suffer from any constitutional infirmity because the
abolition of certain judicial offices was done in good faith. This being the case, I believe
that the Executive is entitled to exercise its constitutional power to fill the newly created
judicial positions without any obligation to consult with this Court and to accord its views
the fullest consideration. To require consultation will constitute an invasion of executive
territory which can be resented and even repelled. The implicit suggestion that there

could be an unconstitutional implementation of the questioned legislation is not

congruent with the basic conclusion that it is not unconstitutional.
PLANA, J ., concurring and dissenting:
1. CONSTITUTIONAL LAW; JUDICIARY REORGANIZATION LAW; POWER TO CREATE COURTS
INCLUDES THE POWER TO ABOLISH OR REPLACE THEM; BATAS PAMBANSA BLG.
129 ENACTED IN GOOD FAITH. As the lawmaking body has the power to create inferior
courts and define, prescribe and apportion their jurisdiction, so it has the power to
abolish or replace them with other courts at long as the act is done in good faith and not
for the purpose of attaining an unconstitutional end. Good faith has thus become the
crucial issue in the case at bar.
2. ID.; ID.; ID.; PRESIDENT NOT OBLIGED TO CONSULT WITH THE SUPREME COURT IN THE
IMPLEMENTATION OF THE LAW. The President is under no obligation to consult with the
Supreme Court; and the Supreme Court as such is not called upon to give legal advice to
the President. Indeed, as the Supreme Court itself has said, it cannot give advisory
opinions (Bacolod-Murcia Planters' Assoc., Inc. vs. Bacolod-Murcia Milling Co., 30 SCRA
67; NWSA vs. Court of Industrial Relations, 90 SCRA 629) even to the President.
3. ID.; ID.; ID.; FIXING OF COMPENSATION AND ALLOWANCES FOR MEMBERS OF THE
JUDICIARY DOES NOT CONSTITUTE AN UNDUE DELEGATION UNTO THE PRESIDENT OF
LEGISLATIVE POWER; PRINCIPLE OF SEPARATION OF POWERS UNDER THE1973
CONSTITUTION. Under the Old Constitution, when the abiding rule was separation of
legislative and executive powers, there was good reason to maintain the doctrine of nondelegation of legislative power. Otherwise, the principle of separation of governmental
powers could be negated via unbridled delegation of legislative power. The 1973
Constitutionhas however radically changed the constitutional set-up. There is now a
commingling or fusion of executive and legislative powers in the hands of the same
group of officials. Cabinet members play a leading role in the legislative process, and
members of the Batasan actively discharge executive functions. The Prime Minister
indeed must come from its ranks. Under the circumstances, there is really not much
sense in rigidly insisting on the principle of non-delegation of legislative power, at least
vis-a-vis the Executive Department. In a very real sense, the present Constitution has
significantly eroded the hoary doctrine of non-delegation of legislative power, although it
has retained some provisions of the old Constitution which were predicated on the
principle of non-delegation, this time perhaps not so much to authorize shifting of power
and thereby correspondingly reduce the incidence of "undue" delegation of legislative
power, as to avert the abdication thereof.
TEEHANKEE, J ., dissenting:
1. CONSTITUTIONAL LAW; JUDICIARY; JUDICIARY REORGANIZATION LAW OF 1980 (BATAS
PAMBANSA BLG.129); RESULTANT ABOLITION OF COURTS; EXPRESS GUARANTY OF
SECURITY OF TENURE OVERRIDES THE IMPLIED AUTHORITY OF REMOVING JUDGES BY
LEGISLATION. The reasoning that the express guaranty of tenure protecting incumbent
judges during good behaviour unless removed from office after hearing and due process
or upon reaching the compulsory retirement age of seventy years must override the
implied authority of removing by legislation the judges has been further strengthened
and placed beyond doubt by the new provisions of the 1973 Constitution that transferred
the administrative supervision over all courts and their personnel from the Chief
Executive through the then Secretary of Justice to the Supreme Court (Art. X, Sec.

6, 1973 Constitution) and vested in the Supreme Court exclusively the power to
discipline judges of inferior courts, and, by a vote of at least eight members, order their
dismissal, which power was formerly lodged by the Judiciary Actin the Chief
Executive. cdasia
2. ID.; ID.; ID.; ID.; ID.; 1973 CONSTITUTION RULES OUT OUSTER OF JUDGES BY
LEGISLATION BY VESTING IN THE SUPREME COURT THE POWER TO REMOVE AND
DISCIPLINE JUDGES. If the framers of the 1973 Constitution wished to dispel the strong
doubts against the removal of incumbent judges through legislative action by abolition of
their courts, then they would have so clearly provided for such form of removal in
the 1973 Constitution, but on the contrary as already stated they ruled out such removal
or ouster of judges by legislative action by vesting exclusively in the Supreme Court the
power of discipline and removal of judges of all inferior courts.
3. ID.; ID.; ID.; REORGANIZATION ACT DOES NOT CHANGE THE BASIC STRUCTURE OF
EXISTING COURTS. The questioned Act effects certain changes and procedural reforms
with more specific delineation of jurisdiction but they do not change the basic structure
of the existing courts. The present Municipal Courts, Municipal Circuit Courts and City
Courts are restructured and redesignated as Municipal Trial Courts and Municipal Circuit
Trial Courts and Metropolitan Trial Courts in the challenged Act. The Courts of First
Instance, Circuit Criminal Courts, Juvenile & Domestic Relations Courts and Courts of
Agrarian Relations are all restructured and redesigned to be known by the common
name of Regional Trial Courts with provision for certain branches thereof "to handle
exclusively criminal cases, juvenile and domestic relations cases, agrarian cases, urban
land reform cases and/or such other special cases as the Supreme Court may determine
in the interest of a speedy and efficient administration of justice" (Sec. 23, B.P. Blg. 129)
and the Court of Appeals is restructured and redesignated as the Intermediate Appellate
Court with an increase in the number of Appellate Justices from the present 43 to 30 but
with a reduction of the number of divisions from 13 (composed of 3 Justices each) to 10
(composed of 3 members each) such that it is feared that there is created a bottleneck
at the appellate level in the important task discharged by such appellate courts as
reviewers of facts.
4. ID.; ID.; ID.; ID.; "NEWCOURTS" SUBSTANTIALLY THE "OLD COURTS" WITH ONLY A
CHANGE OF NAME. Justice Teehankee views that the candid admission by the Chief
Justice in his opinion for the Court "that he entertained doubts as to whether the
intermediate court of appeals provided for is a new tribunal" is equally applicable to all
the other mentioned courts provided for in the challenged Act as "new courts." And the
best proof of this is the plain and simple transitory provision in Section 44 thereof that
upon the President's declaration of completion of the reorganization (whereby the "old
courts" shall "be deemed automatically abolished and the incumbents thereof shall
cease to hold office"), "(T)he cases pending in the old Courts shall be transferred to the
appropriate Courts constituted pursuant to this Act, together with the pertinent
functions, records, equipment, property and the necessary personnel," together with the
"applicable appropriations." This could not have been possible without a specification
and enumeration of what specific cases of the "old courts " would be transferred to the
particular "new courts," had these "new courts" not been manifestly and substantially
the "old courts" with a change of name or as described by Justice Barredo to have
been his first view, now discarded, in his separate opinion; "just a renaming, and not a
substantial and actual modification or alteration of the present judicial structure or
system" or "a rearrangement or remodelling of the old structure."

5. ID.; ID.; ID.; ABOLITION OF COURTS AND CONSEQUENT OUSTER OF INCUMBENT

JUDGES FROM OFFICE; GUARANTY OF TENURE OF JUDGES ESSENTIAL FOR A FREE AND
INDEPENDENT JUDICIARY; REORGANIZATION SHOULD ALLOW THE INCUMBENTS TO
REMAIN IN OFFICE UNLESS REMOVED FOR CAUSE. The good faith in the enactment of
the challenged Act must need be granted. What must be reconciled is the legislative
power to abolish courts as implied from the power to establish them with the express
constitutional guaranty of tenure of the judges which is essential for a free and
independent judiciary. Adherents of the Rule of Law are agreed that indispensable for the
maintenance of the Rule of Law is free and independent judiciary, sworn to protect and
enforce it without fear or favor "free, not only from graft, corruption, ineptness and
incompetence but even from the tentacles of interference and insiduous influence of the
political powers that be," to quote again from Justice Barredo's separate opinion. Hence,
my adherence to the 7-member majority opinion of former Chief Justice Bengzon in the
case of Ocampo vs. Secretary of Justice, G.R. No. L-1790, Jan. 18, 1933, as restated by
the Philippine Association of Law Professors headed by former Chief Justice Roberto
Concepcion that "any reorganization should at least allow the incumbents of the existing
courts to remain in office (the appropriate counterpart "new courts') unless they are
removed for cause."
6. ID.; ID.; ID.; ID.; ID.; JUDICIAL INDEPENDENCE EXTENDS TO THE ENTIRE COURT
SYSTEM; VIEWS OF AMICI CURIAE THEREON. Former U.P. Law Dean Irene Cortes in her
memorandum as amicus curiae stated "for the judiciary whose independence is not only
eroded but is in grave danger of being completely destroyed, judicial independence is
not a guarantee intended for the Supreme Court alone, it extends to the entire court
system and is even more vital to the courts at the lowest levels because there are more
of them and they operate closest to the people," and "particularly under the present
form of modified parliamentary government with legislative and executive functions
overlapping and in certain areas merging, the judiciary is left to perform the checking
function in the performance of which its independence assumes an even more vital
importance." The extensive memoranda filed by Dean Cortes and other amici curiae
such as former Senator Jose W. Diokno who strongly urges the Court to strike down the
Act "to prevent further destruction of judicial independence," former Senator Lorenzo
Sumulong, President of the Philippine Constitution Association who advocates for the
Court's adoption of the Bengzon majority opinion in the Ocampo case so as to abide by
"the elementary rule in the interpretation of constitutions that effect should be given to
all parts of the Constitution" and that the judges' security of tenure guaranty should not
be "rendered meaningless and inoperative" former Solicitor General Arturo A. Alafriz,
president of the Philippine Lawyers' Association who submits that the total abolition of all
courts below the Supreme Court (except the Sandiganbayan and the Court of Tax
Appeals) and the removal of the incumbent Justices and Judges violates the
independence of the judiciary, their security of tenure and right to due process
guaranteed them by the Constitution" and Atty. Raul M. Gonzales, president of the
National Bar Association of the Philippines who invokes the Declaration of Delhi at the ICJ
Conference in 1939, that "The principles of unremovability of the Judiciary and their
Security of Tenure until death or until a retiring age fluted by statute is reached, is an
important safeguard of the Rule of Law" have greatly helped in fortifying my views.
7. ID.; ID.; ID.; ID.; ID.; TRANSITORY PROVISIONS OF THE 1973 CONSTITUTION RENDERED
NUGATORY JUDGES' SECURITY OF TENURE; RESTORATION OF GUARANTY; AN URGENT
NEED FOR A FREE AND INDEPENDENT JUDICIARY. The judges' security of tenure was
rendered nugatory by the Transitory Provisions of the 1973 Constitution which granted
the incumbent President the unlimited power to remove and replace all judges and

officials (as against the limited one-year period for the exercise of such power granted
President Quezon in the 1935 Constitution upon establishment of the Philippine
Commonwealth). Upon the declaration of martial law in September, 1972, justices and
judges of all courts, except the Supreme Court, had been required to hand in their
resignation. There is listed a total of 33 judges who were replaced or whose resignations
were accepted by the President during the period from September, 1972 to April, 1976.
The power to replace even the judges appointed after the effectivity on January 17, 1973
Constitution is yet invoked on behalf of the President in the pending case of Tapucar vs.
Famador, G.R. No. 53467 filed on March 27, 1980 notwithstanding the held view that
such post-1973 Constitution appointed judges are not subject to the Replacement Clause
of the cited Transitory Provision, . . . . And now comes this total abolition of 1,663 judicial
positions (and thousands of personnel positions) unprecedented in its sweep and scope.
The urgent need is to strengthen the judiciary with the restoration of the security of
tenure of judges, which is essential for a free and independent judiciary as mandated by
the Constitution, not to make more enfeebled an already feeble judiciary, possessed
neither of the power of the sword nor the purse, as decried by former Chief Justice
Bengzon in his Ocampo majority opinion. cdasia
8. ID.; ID.; ID.; ID.; ID.; JUDICIAL INDEPENDENCE TO BE PRESERVED ESPECIALLY IN VIEW
OF THE EXISTING STRONG TIES BETWEEN THE EXECUTIVE AND LEGISLATIVE
DEPARTMENTS. In Fortun vs. Labang, 104 SCRA 607 (May 27, 1981), it was stressed
that with the provision transferring to the Supreme Court administrative supervision.over
the Judiciary, there is a greater need "to preserve unimpaired the independence of the
judiciary, especially so at present, where to all intents and purposes, there is a fusion
between the executive and the legislative branches," with the further observation that
"many are the ways by which such independence could be eroded."
9. ID.; ID.; ID.; ID.; ID.; MOVE TO RID THE JUDICIARY OF INCOMPETENT AND CORRUPT
JUDGES; DUE PROCESS MUST BE OBSERVED IN THE IMPLEMENTATION OF THE PURGE.
Former Senator Diokno in his memorandum anticipates the argument that "great ills
demand drastic cures" thus; "Drastic, yes but not unfair nor unconstitutional. One
does not improve courts by abolishing them, any more than a doctor cures a patient by
killing him. The ills the judiciary suffers from were caused by impairing its independence;
they will not be cured by totally destroying that independence. To adopt such a course
could only breed more perversity in the administration of justice, just as the abuses of
martial rule have bred more subversion." Finally, as stated by the 1975 Integrated Bar of
the Philippines 2nd House of Delegates, "It would, indeed, be most ironical if Judges who
are called upon to give due process cannot count it on themselves. Observance of
procedural due process in the separation of misfits from the Judiciary is the right way to
attain a laudible objective."
10. ID.; ID.; ID.; ID.; ID.; ID.; ID.; JUDGES TO BE REMOVED ONLY AFTER A FAIR HEARING.
As stressed by the Chief Justice in the Fortun case, judges are entitled to the cardinal
principles of fairness and due process and the opportunity to be heard and defend
themselves against the accusations made against them and not to be subjected to
harassment and humiliation, and the Court will repudiate the "oppressive exercise of
legal authority." More so, are judges entitled to such due process when what is at stake is
their constitutionally guaranteed security of tenure and non-impairment of the
independence of the judiciary and the proper exercise of the constitutional power
exclusively vested in the Supreme Court to discipline and remove judges after fair
hearing.

11. .ID.; ID.; ID.; ID.; ID.; ID.; ID.; ID.; SUPREME COURT TO EXERCISE ITS POWER OF
DISCIPLINE AND DISMISSAL OF ALL JUDGES OF INFERIOR COURTS. Judges of inferior
courts should not be summarily removed and branded for life in such reorganization on
the basis of confidential adverse reports as to their performance, competence or
integrity, save those who may voluntarily resign from office upon being confronted with
such reports against them. The trouble with such ex-parte reports, without due process
or hearing, has been proven from our past experience where a number of honest and
competent judges were summarily removed while others who were generally believed to
be basket cases have remained in the service. The power of discipline and dismissal of
judges of all inferior courts, from the Court of Appeals down, has been vested by
the 1973 Constitution in the Supreme Court, and if the judiciary is to be strengthened, it
should be left to clean its own house upon complaint and with the cooperation of the
aggrieved parties and after due process and hearing.
12. ID.; ID.; ID.; ID.; ID.; ID.; ID.; ID.; INCUMBENT JUDGES TO BE RETAINED IN THE "NEW
COURTS". The constitutional confrontation and conflict may well be avoided by holding
that since the changes and provisions of the challenged Act do not substantially change
the nature and functions of the "new courts" therein provided as compared to the
"abolished old court" but provide for procedural changes fixed delineation of jurisdiction
and increases in the number of courts for a more effective and efficient disposition of
court cases, the incumbent judges' guaranteed security of tenure require that they be
retained in the corresponding "new courts."

DECISION

FERNANDO, C .J p:
This Court, pursuant to its grave responsibility of passing upon the validity of any
executive or legislative act in an appropriate case, has to resolve the crucial issue of the
constitutionality of Batas Pambansa Blg. 129, entitled "An Act Reorganizing the Judiciary,
Appropriating Funds Therefor and for Other Purposes." The task of judicial review, aptly
characterized as exacting and delicate, is never more so than when a conceded
legislative power, that of judicial reorganization, 1 may possibly collide with the timehonored principle of the independence of the judiciary 2 as protected and safeguarded
by this constitutional provision: "The Members of the Supreme Court and judges of
inferior 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. The Supreme Court
shall have the power to discipline judges of inferior courts and, by a vote of at least eight
Members, order their dismissal." 3 For the assailed legislation mandates that Justices and
judges of inferior courts from the Court of Appeals to municipal circuit courts, except the
occupants of the Sandiganbayan and the Court of Tax Appeals, unless appointed to the
inferior courts established by such Act, would be considered separated from the judiciary.
It is the termination of their incumbency that for petitioners justifies a suit of this
character, it being alleged that thereby the security of tenure provision of
the Constitution has been ignored and disregarded. cdphil
That is the fundamental issue raised in this proceeding, erroneously entitled Petition for
Declaratory Relief and/or for Prohibition 4 considered by this Court as an action for
prohibition, seeking to enjoin respondent Minister of the Budget, respondent Chairman of

the Commission on Audit, and respondent Minister of Justice from taking any action
implementingBatas Pambansa Blg. 129. Petitioners 5 sought to bolster their claim by
imputing lack of good faith in its enactment and characterizing as an undue delegation
of legislative power to the President his authority to fix the compensation and allowances
of the Justices and judges thereafter appointed and the determination of the date when
the reorganization shall be deemed completed. In the very comprehensive and scholarly
Answer of Solicitor General Estelito P. Mendoza, 6 it was pointed out that there is no valid
justification for the attack on the constitutionality of this statute, it being a legitimate
exercise of the power vested in the Batasang Pambansa to reorganize the judiciary, the
allegations of absence of good faith as well as the attack on the Independence of the
judiciary being unwarranted and devoid of any support in law. A Supplemental Answer
was likewise filed on October 8, 1981, followed by a Reply of petitioners on October 13.
After the hearing in the morning and afternoon of October 15, in which not only
petitioners and respondents were heard through counsel but also the amici curiae, 7 and
thereafter submission of the minutes of the proceeding on the debate on Batas
Pambansa Blg. 129, this petition was deemed submitted for decision.
The importance of the crucial question raised called for intensive and rigorous study of
all the legal aspects of the case. After such exhaustive deliberation in several sessions,
the exchange of views being supplemented by memoranda from the members of the
Court, it is our opinion and so hold that Batas Pambansa Blg. 129 is not unconstitutional.
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 v. Vera. 8 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." 9 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: 10 "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 vs. 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 hark 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." 11

2. The imputation of arbitrariness to the legislative body in the enactment of Batas

Pambansa Blg. 129 to demonstrate lack of good faith does manifest violence to the facts.
Petitioners should have exercised greater care in informing themselves as to its
antecedents. They have laid themselves open to the accusation of reckless disregard for
the truth. On August 7, 1980, a Presidential Committee on Judicial Reorganization was
organized. 12 This Executive Order was later amended byExecutive Order No. 619-A,
dated September 5 of that year. It clearly specified the task assigned to it: "1. The
Committee shall formulate plans on the reorganization of the Judiciary which shall be
submitted within seventy (70) days from August 7, 1980 to provide the President
sufficient options for the reorganization of the entire Judiciary which shall embrace all
lower courts, including the Court of Appeals, the Courts of First Instance, the City and
Municipal Courts, and all Special Courts, but excluding the Sandiganbayan." 13 On
October 17, 1980, a Report was submitted by such Committee on Judicial Reorganization.
It began with this paragraph: "The Committee on Judicial Reorganization has the honor to
submit the following Report. It expresses at the outset its appreciation for the
opportunity accorded it to study ways and means for what today is a basic and urgent
need, nothing less than the restructuring of the judicial system. There are problems, both
grave and pressing, that call for remedial measures. The felt necessities of the time, to
borrow a phrase from Holmes, admit of no delay, for if no step be taken and at the
earliest opportunity, it is not too much to say that the people's faith in the administration
of justice could be shaken. It is imperative that there be a greater efficiency in the
disposition of cases and that litigants, especially those of modest means much more
so, the poorest and the humblest can vindicate their rights in an expeditious and
inexpensive manner. The rectitude and the fairness in the way the courts operate must
be manifest to all members of the community and particularly to those whose interests
are affected by the exercise of their functions. It is to that task that the Committee
addresses itself and hopes that the plans submitted could be a starting point for an
institutional reform in the Philippine judiciary. The experience of the Supreme Court,
which since 1973 has been empowered to supervise inferior courts, from the Court of
Appeals to the municipal courts, has proven that reliance on improved court
management as well as training of judges for more efficient administration does not
suffice. Hence, to repeat, there is need for a major reform in the judicial system. It is
worth noting that it will be the first of its kind since the Judiciary Act became effective on
June 16, 1901." 14 It went on to say: "It does not admit of doubt that the last two
decades of this century are likely to be attended with problems of even greater
complexity and delicacy. New social interests are pressing for recognition in the courts.
Groups long inarticulate, primarily those economically underprivileged, have found legal
spokesmen and are asserting grievances previously ignored. Fortunately, the judiciary
has not proved inattentive. Its task has thus become even more formidable. For so much
grist is added to the mills of justice. Moreover, they are likely to be quite novel. The need
for an innovative approach is thus apparent. The national leadership, as is well-known,
has been constantly on the search for solutions that will prove to be both acceptable and
satisfactory. Only thus may there be continued national progress." 15 After which comes:
"To be less abstract, the thrust is on development. That has been repeatedly stressed
and rightly so. All efforts are geared to its realization." Nor, unlike in the past, was it to
be "considered as simply the movement towards economic progress and growth
measured in terms of sustained increases in per capita income and Gross National
Product (GNP)." 16 For the New Society, its implication goes further than economic
advance, extending to "the sharing, or more appropriately, the democratization of social
and economic opportunities, the substantiation of the true meaning of social
justice." 17 This process of modernization and change compels the government to

extend its field of activity and its scope of operations. The efforts towards reducing the
gap between the wealthy and the poor elements in the nation call for more regulatory
legislation. That way the social justice and protection to labor mandates of the
Constitution could be effectively implemented" 18 There is likelihood then "that some
measures deemed inimical by interests adversely affected would be challenged in court
on grounds of validity. Even if the question does not go that far, suits may be filed
concerning their interpretation and application. . . . There could be pleas for injunction or
restraining orders. Lack of success of such moves would not, even so, result in their
prompt final disposition. Thus delay in the execution of the policies embodied in law
could thus be reasonably expected. That is not conducive to progress in
development." 19 For, as mentioned in such Report, equally of vital concern is the
problem of clogged dockets, which "as is well known, is one of the utmost gravity.
Notwithstanding the most determined efforts exerted by the Supreme Court, through the
leadership of both retired Chief Justice Querube Makalintal and the late Chief Justice Fred
Ruiz Castro, from the time supervision of the courts was vested in it under the 1973
Constitution, the trend towards more and more cases has continued." 20 It is
understandable why. With the accelerated economic development, the growth of
population, the increasing urbanization, and other similar factors, the judiciary is called
upon much oftener to resolve controversies. Thus confronted with what appears to be a
crisis situation that calls for a remedy, the Batasang Pambansa had no choice. It had to
act, before the ailment became even worse. Time was of the essence, and yet it did not
hesitate to be duly mindful, as it ought to be, of the extent of its coverage before
enacting Batas Pambansa Blg. 129.
3. There is no denying, therefore, the need for "institutional reforms," characterized in
the Report as "both pressing and urgent." 21 It is worth noting, likewise, as therein
pointed out, that a major reorganization of such scope, if it were to take place, would be
the most thorough after four generations. 22 The reference was to the basic Judiciary
Act enacted in June of 1901, 23 amended in a significant way, only twice previous to the
Commonwealth. There was, of course, the creation of the Court of Appeals in 1935,
originally composed "of a Presiding Judge and ten appellate Judges, who shall be
appointed by the President of the Philippines, with the consent of the Commission on
Appointments of the National Assembly." 24 It could "siten banc, but it may sit in two
divisions, one of six and another of five Judges, to transact business, and the two
divisions may sit at the same time." 25 Two years after the establishment of
independence of the Republic of the Philippines, the Judiciary Act of 1948 26 was passed.
It continued the existing system of regular inferior courts, namely, the Court of Appeals,
Courts of First Instance, 27 the Municipal Courts, at present the City Courts, and the
Justice of the Peace Courts, now the Municipal Circuit Courts and Municipal Courts. The
membership of the Court of Appeals has been continuously increased. 28 Under a 1978
Presidential Decree, there would be forty-five members, a Presiding Justice and forty-four
Associate Justices, with fifteen divisions. 29 Special courts were likewise created. The
first was the Court of Tax Appeals in 1954, 30 next came the Court of Agrarian Relations
in 1955, 31 and then in the same year a Court of the Juvenile and Domestic Relations for
Manila in 1955, 32subsequently followed by the creation of two other such courts for
Iloilo and Quezon City in 1966. 33 In 1967, Circuit Criminal Courts were established, with
the Judges having the same qualifications, rank, compensation, and privileges as judges
of Courts of First Instance. 34
4. After the submission of such Report, Cabinet Bill No. 42, which later became the basis
of Batas Pambansa Blg. 129, was introduced. After setting forth the background as above
narrated, its Explanatory Note continues: "Pursuant to the President's instructions, this

proposed legislation has been drafted in accordance with the guidelines of that report
with particular attention to certain objectives of the reorganization, to wit, the
attainment of more efficiency in disposal of cases, a reallocation of jurisdiction, and a
revision of procedures which do not tend to the proper meting out of justice. In
consultation with, and upon a consensus of, the governmental and parliamentary
leadership, however, it was felt that some options set forth in the Report be not availed
of. Instead of the proposal to confine the jurisdiction of the intermediate appellate court
merely to appellate adjudication, the preference has been opted to increase rather than
diminish its jurisdiction in order to enable it to effectively assist the Supreme Court. This
preference has been translated into one of the innovations in the proposed Bill." 35 In
accordance with the parliamentary procedure, the Bill was sponsored by the Chairman of
the Committee on Justice, Human Rights and Good Government to which it was referred.
Thereafter, Committee Report No. 225 was submitted by such Committee to the
Batasang Pambansa recommending the approval with some amendments. In the
sponsorship speech of Minister Ricardo C. Puno, there was reference to the Presidential
Committee on Judicial Reorganization. Thus: "On October 17, 1980, the Presidential
Committee on Judicial Reorganization submitted its report to the President which
contained the 'Proposed Guidelines for Judicial Reorganization.' Cabinet Bill No. 42 was
drafted substantially in accordance with the options presented by these guidelines. Some
options set forth in the aforesaid report were not availed of upon consultation with and
upon consensus of the government and parliamentary leadership. Moreover, some
amendments to the bill were adopted by the Committee on Justice, Human Rights and
Good Government, to which the bill was referred, following the public hearings on the bill
held in December of 1980. The hearings consisted of dialogues with the distinguished
members of the bench and the bar who had submitted written proposals, suggestions,
and position papers on the bill upon the invitation of the Committee on Justice, Human
Rights and Good Government." 36 The sponsor stressed that the enactment of such
Cabinet Bill would result in the attainment "of more efficiency in the disposal of cases
[and] the improvement in the quality of justice dispensed by the courts" expected to
follow from the dockets being less clogged, with the structural changes introduced in the
bill, together with the reallocation of jurisdiction and the revision of the rules of
procedure, [being] designated to suit the court system to the exigencies of the present
day Philippine society, and hopefully, of the foreseeable future." 37 It may be observed
that the volume containing the minutes of the proceedings of the Batasang Pambansa
show that 590 pages were devoted to its discussion. It is quite obvious that it took
considerable time and effort as well as exhaustive study before the act was signed by
the President on August 14, 1981. With such a background, it becomes quite manifest
how lacking in factual basis is the allegation that its enactment is tainted by the vice of
arbitrariness. What appears undoubted and undeniable is the good faith that
characterized its enactment from its inception to the affixing of the Presidential
signature.
5. Nothing is better settled in our law than that the abolition of an office within the
competence of a legitimate body if done in good faith suffers from no infirmity.
The ponencia of Justice J.B.L. Reyes in Cruz v. Primicias, Jr. 38 reiterated such a doctrine:
"We find this point urged by respondents, to be without merit. No removal or separation
of petitioners from the service is here involved, but the validity of the abolition of their
offices. This is a legal issue that is for the Courts to decide. It is well-known rule also that
valid abolition of offices is neither removal nor separation of the incumbents. . . . And, of
course, if the abolition is void, the incumbent is deemed never to have ceased to hold

office. The preliminary question laid at rest, we pass to the merits of the case. As wellsettled as the rule that the abolition of an office does not amount to an illegal removal of
its incumbent is the principle that, in order to be valid, the abolition must be made in
good faith." 39 The above excerpt was quoted with approval in Bendanillo, Sr. v.
Provincial Governor, 40 two earlier cases enunciating a similar doctrine having preceded
it. 41 As with the offices in the other branches of the government, so it is with the
judiciary. The test remains whether the abolition is in good faith. As that element is
conspicuously present in the enactment of Batas Pambansa Blg. 129, then the lack of
merit of this petition becomes even more apparent. The concurring opinion of Justice
Laurel in Zandueta v. De la Costa 42 cannot be any clearer. In this quo
warranto proceeding, petitioner claimed that he, and not respondent, was entitled to the
office of judge of the Fifth Branch of the Court of First Instance of Manila. The Judicial
Reorganization Act of 1936, 43 a year after the inauguration of the Commonwealth,
amended the Administrative Code to organize courts of original jurisdiction likewise
called, as was the case before, Courts of First Instance. Prior to such statute, petitioner
was the incumbent of one such court. Thereafter, he received an ad
interim appointment, this time to the Fourth Judicial District, under the new legislation.
Unfortunately for him, the Commission on Appointments of the then National Assembly
disapproved the same, with respondent being appointed in his place. He contested the
validity of the Act insofar as it resulted in his being forced to vacate his position. This
Court did not rule squarely on the matter. His petition was dismissed on the ground of
estoppel. Nonetheless, the separate concurrence in the result of Justice Laurel, to repeat,
reaffirms in no uncertain terms the standard of good faith as the test of the validity of an
act abolishing an inferior court, and this too with due recognition of the security of tenure
guarantee. Thus: "I am of the opinion that Commonwealth Act No. 145 in so far as it
reorganizes, among other judicial districts, the Ninth Judicial District, and establishes an
entirely new district comprising Manila and the provinces of Rizal and Palawan, is valid
and constitutional. This conclusion flows from the fundamental proposition that the
legislature may abolish courts inferior to the Supreme Court and therefore may
reorganize them territorially or otherwise thereby necessitating new appointments and
commissions. Section 2, Article VIII of the Constitutionvests in the National Assembly the
power to define, prescribe and apportion the jurisdiction of the various courts, subject to
certain limitations in the case of the Supreme Court. It is admitted that Section 9 of the
same Article of the Constitutionprovides for the security of tenure of all the judges. The
principles embodied in these two sections of the same Article of theConstitution must be
coordinated and harmonized. A mere enunciation of a principle will not decide actual
cases and controversies of every sort. (Justice Holmes in Lochner vs. New York, 198 U.S.,
45; 49 Law. ed., 937)" 44 Justice Laurel continued: "I am not insensible to the argument
that the National Assembly may abuse its power and move deliberately to defeat the
constitutional provision guaranteeing security of tenure to all judges. But, is this the
case? One need not share the view of Story, Miller and Tucker on the one hand, or the
opinion of Cooley, Watson and Baldwin on the other, to realize that the application of a
legal or constitutional principle is necessarily factual and circumstantial and that fixity of
principle is the rigidity of the dead and the unprogressive. I do say, and emphatically,
however, that cases may arise where the violation of the constitutional provision
regarding security of tenure is palpable and plain, and that legislative power of
reorganization may be sought to cloak an unconstitutional and evil purpose. When a case
of that kind arises, it will be the time to make the hammer fall and heavily. But not until
then. I am satisfied that, as to the particular point here discussed, the purpose was the
fulfillment of what was considered a great public need by the legislative department and
that Commonwealth Act No. 145 was not enacted purposely to affect adversely the

tenure of judges or of any particular judge. Under these circumstances, I am for

sustaining the power of the legislative department under the Constitution. To be sure,
there was greater necessity for reorganization consequent upon the establishment of the
new government than at the time Acts Nos. 2347 and 4007 were approved by the
defunct Philippine Legislature, and although in the case of these two Acts there was an
express provision providing for the vacation by the judges of their offices whereas in the
case of Commonwealth Act No. 145 doubt is engendered by its silence, this doubt should
be resolved in favor of the valid exercise of the legislative power." 45
6. A few more words on the question of abolition. In the abovecited opinion of Justice
Laurel in Zandueta, reference was made to Act No. 2347 46 on the reorganization of the
Courts of First Instance and to Act No. 4007 47 on the reorganization of all branches of
the government, including the courts of first instance. In both of them, the then Courts of
First Instance were replaced by new courts with the same appellation. As Justice Laurel
pointed out, there was no question as to the fact of abolition. He was equally categorical
as to Commonwealth Act No. 145, where also the system of the courts of first instance
was provided for expressly. It was pointed out by Justice Laurel that the mere creation of
an entirely new district of the same court is valid and constitutional, such conclusion
flowing "from the fundamental proposition that the legislature may abolish courts inferior
to the Supreme Court and therefore may reorganize them territorially or otherwise
thereby necessitating new appointments and commissions." 48 The challenged statute
creates an intermediate appellate court, 49 regional trial courts, 50metropolitan trial
courts of the national capital region, 51 and other metropolitan trial courts, 52 municipal
trial courts in cities,53 as well as in municipalities, 54 and municipal circuit trial
courts. 55 There is even less reason then to doubt the fact that existing inferior courts
were abolished. For the Batasang Pambansa, the establishment of such new inferior
courts was the appropriate response to the grave and urgent problems that pressed for
solution. Certainly, there could be differences of opinion as to the appropriate remedy.
The choice, however, was for the Batasan to make, not for this Court, which deals only
with the question of power. It bears mentioning that in Brillo v. Enage 56 this Court, in a
unanimous opinion penned by the late Justice Diokno, citing Zandueta v. De la Costa,
ruled: "La segunda cuestion que el recurrido plantea es que la Carta de Tacloban ha
abolido el puesto. Si efectivamente ha sido abolido el cargo, entonces ha quedado
extinguido el derecho de recurrente a acuparlo y a cobrar el salario correspondiente.
McCulley vs. State, 46 LRA, 567. El derecho de un juez de desempenarlo hasta los 70
aos de edad o se incapacite no priva al Congreso de su facultad de abolir, fusionar o
reorganizar juzgados no constitucionales." 57 Nonetheless, such well-established
principle was not held applicable to the situation there obtaining, the Charter of Tacloban
City creating a city court in place of the former justice of the peace of court. Thus: "Pero
en el caso de autos el Juzgado de Tacloban no ha sido abolido. Solo se le ha cambiado el
nombre con el cambio de forma del gobierno local." 58 The present case is anything but
that. Petitioners did not and could not prove that the challenged statute was not within
the bounds of legislative authority. cdasia
7. This opinion then could very well stop at this point. The implementation of Batas
Pambansa Blg. 129, concededly a task incumbent on the Executive, may give rise,
however, to questions affecting a judiciary that should be kept independent. The all
embracing scope of the assailed legislation as far as all inferior courts from the Court of
Appeals to municipal courts are concerned, with the exception solely of the
Sandiganbayan and the Court of Tax Appeals, 59 gave rise, and understandably so, to
misgivings as to its effect on such cherished ideal. The first paragraph of the section on
the transitory provision reads: "The provisions of this Act shall be immediately carried

out in accordance with an Executive Order to be issued by the President. The Court of
Appeals, the Courts of First Instance, the Circuit Criminal Courts, the Juvenile and
Domestic Relations Courts, the Courts of Agrarian Relations, the City Courts, the
Municipal Courts, and the Municipal Circuit Courts shall continue to function as presently
constituted and organized, until the completion of the reorganization provided in this Act
as declared by the President. Upon such declaration, the said courts shall be deemed
automatically abolished and the incumbents thereof shall cease to hold office." 60 There
is all the more reason then why this Court has no choice but to inquire further into the
allegation by petitioners that the security of tenure provision, an assurance of a judiciary
free from extraneous influences, is thereby reduced to a barren form of words. The
amended Constitution adheres even more clearly to the long-established tradition of a
strong executive that antedated the 1935 Charter. As noted in the work of former ViceGovernor Hayden, a noted political scientist, President Claro M. Recto of the 1934
Constitutional Convention stressed such a concept in his closing address. The 1935
Constitution, he stated, provided for "an Executive power which, subject to the
fiscalization of the Assembly, and of public opinion, will not only know how to govern, but
will actually govern, with a firm and steady hand, unembarrassed by vexatious
interferences by other departments, by unholy alliances with this and that social
group." 61 The above excerpt was cited with approval by Justice Laurel in Planas v.
Gil. 62 The 1981 Amendments embody the same philosophy, this notwithstanding that
once again the principle of separation of powers, to quote from the same jurist
asponente in Angara v. Electoral Commission, 63 "obtains not through express provision
but by actual division." 64 The President, under Article VII, "shall be the head of state
and chief executive of the Republic of the Philippines." 65 Moreover, all the powers he
possessed under the 1935 Constitution are vested in him anew "unless the Batasang
Pambansa provides otherwise." 66 Article VII of the 1935 Constitution speaks
categorically: "The Executive power shall be vested in a President of the
Philippines." 67 As originally framed, the 1973 Constitution created the position of
President as the "symbolic head of state." 68 In addition, there was a provision for a
Prime Minister as the head of government to exercise the executive power with the
assistance of the Cabinet. 69 Clearly, a modified parliamentary system was established.
In the light of the 1981 amendments though, this Court in Free Telephone Workers Union
v. Minister of Labor 7 0 could state: "The adoption of certain aspects of a parliamentary
system in the amended Constitution does not alter its essentially presidential
character." 71The retention, however, of the position of the Prime Minister with the
Cabinet, a majority of the members of which shall come from the regional
representatives of the Batasang Pambansa and the creation of an Executive Committee
composed of the Prime Minister as Chairman and not more than fourteen other members
at least half of whom shall be members of the Batasang Pambansa, clearly indicate the
evolving nature of the system of government that is now operative. 72 What is equally
apparent is that the strongest ties bind the executive and legislative departments. It is
likewise undeniable that the Batasang Pambansa retains its full authority to enact
whatever legislation may be necessary to carry out national policy as usually formulated
in a caucus of the majority party. It is understandable then why in Fortun v. Labang, 73 it
was stressed that with the provision transferring to the Supreme Court administrative
supervision over the Judiciary, there is a greater need "to preserve unimpaired the
independence of the judiciary, especially so at present, where to all intents and
purposes, there is a fusion between the executive and the legislative branches." 74

8. To be more specific, petitioners contend that the abolition of the existing inferior
courts collides with the security of tenure enjoyed by incumbent Justices and judges
Under Article X, Section 7 of the Constitution. There was a similar provision in the 1935
Constitution. It did not, however, go as far as conferring on this Tribunal the power to
supervise administratively inferior courts. 75 Moreover, this Court is empowered "to
discipline judges of inferior courts and, by a vote of at least eight members, order their
dismissal." 76 Thus it possesses the competence to remove judges. Under the Judiciary
Act, it was the President who was vested with such power. 77 Removal is, of course, to
be distinguished from termination by virtue of the abolition of the office. There can be no
tenure to a non-existent office. After the abolition, there is in law no occupant. In case of
removal, there is an office with an occupant who would thereby lose his position. It is in
that sense that from the standpoint of strict law, the question of any impairment of
security of tenure does not arise. Nonetheless, for the incumbents of inferior courts
abolished, the effect is one of separation. As to its effect, no distinction exists between
removal and the abolition of the office. Realistically, it is devoid of significance. He
ceases to be a member of the judiciary. In the implementation of the assailed legislation,
therefore, it would be in accordance with accepted principles of constitutional
construction that as far as incumbent justices and judges are concerned, this Court be
consulted and that its view be accorded the fullest consideration. No fear need be
entertained that there is a failure to accord respect to the basic principle that this Court
does not render advisory opinions. No question of law is involved. If such were the case,
certainly this Court could not have its say prior to the action taken by either of the two
departments. Even then, it could do so but only by way of deciding a case where the
matter has been put in issue. Neither is there any intrusion into who shall be appointed
to the vacant positions created by the reorganization. That remains in the hands of the
Executive to whom it properly belongs. There is no departure therefore from the tried
and tested ways of judicial power. Rather what is sought to be achieved by this liberal
interpretation is to preclude any plausibility to the charge that in the exercise of the
conceded power of reorganizing the inferior courts, the power of removal of the present
incumbents vested in this Tribunal is ignored or disregarded. The challenged Act would
thus be free from any unconstitutional taint, even one not readily discernible except to
those predisposed to view it with distrust. Moreover, such a construction would be in
accordance with the basic principle that in the choice of alternatives between one which
would save and another which would invalidate a statute, the former is to be
preferred. 78 There is an obvious way to do so. The principle that the Constitution enters
into and forms part of every act to avoid any unconstitutional taint must be applied.
Nuez v. Sandiganbayan, 79 promulgated last January, has this relevant excerpt: "It is
true that other Sections of the Decree could have been so worded as to avoid any
constitutional objection. As of now, however, no ruling is called for. The view is given
expression in the concurring and dissenting opinion of Justice Makasiar that in such a
case to save the Decree from the dire fate of invalidity, they must be construed in such a
way as to preclude any possible erosion on the powers vested in this Court by the
Constitution. That is a proposition too plain to be contested. It commends itself for
approval." 80 Nor would such a step be unprecedented. The Presidential Decree
constituting Municipal Courts into Municipal Circuit Courts, specifically provides: "The
Supreme Court shall carry out the provisions of this Decree through implementing
orders, on a province-to-province basis." 81 It is true there is no such provision in this
Act, but the spirit that informs it should not be ignored in the Executive Order
contemplated under its Section 44. 82 Thus Batas Pambansa Blg. 129 could stand the
most rigorous test of constitutionality. 83

9. Nor is there anything novel in the concept that this Court is called upon to reconcile or
harmonize constitutional provisions. To be specific, the Batasang Pambansa is expressly
vested with the authority to reorganize inferior courts and in the process to abolish
existing ones. As noted in the preceding paragraph, the termination of office of their
occupants, as a necessary consequence of such abolition, is hardly distinguishable from
the practical standpoint from removal, a power that is now vested in this Tribunal. It is of
the essence of constitutionalism to assure that neither agency is precluded from acting
within the boundaries of its conceded competence. That is why it has long been wellsettled under the constitutional system we have adopted that this Court cannot,
whenever appropriate, avoid the task of reconciliation. As Justice Laurel put it so well in
the previously cited Angara decision, while in the main, "the Constitution has blocked out
with deft strokes and in bold lines, allotment of power to the executive, the legislative
and the judicial departments of the government, the overlapping and interlacing of
functions and duties between the several departments, however, sometimes makes it
hard to say just where the one leaves off and the other begins." 84 It is well to recall
another classic utterance from the same jurist, even more emphatic in its affirmation of
such a view, moreover buttressed by one of those insights for which Holmes was so
famous: "The classical separation of government powers, whether viewed in the light of
the political philosophy of Aristotle, Locke, or Montesquieu, or of the postulations of
Mabini, Madison, or Jefferson, is a relative theory of government. There is more truism
and actuality in interdependence than in independence and separation of powers, for as
observed by Justice Holmes in a case of Philippine origin, we cannot lay down 'with
mathematical precision and divide the branches into watertight compartments' not only
because 'the great ordinances of the Constitution do not establish and divide fields of
black and white' but also because 'even the more specific of them are found to terminate
in a penumbra shading gradually from one extreme to the other.'" 85 This too from
Justice Tuazon, likewise expressing with force and clarity why the need for reconciliation
or balancing is well-nigh unavoidable under the fundamental principle of separation of
powers: "The constitutional structure is a complicated system, and overlappings of
governmental functions are recognized, unavoidable, and inherent necessities of
governmental coordination." 86 In the same way that the academe has noted the
existence in constitutional litigation of right versus right, there are instances, and this is
one of them, where, without this attempt at harmonizing the provisions in question,
there could be a case of power against power. That we should avoid. LLjur
10. There are other objections raised but they pose no difficulty. Petitioners would
characterize as an undue delegation of legislative power to the President the grant of
authority to fix the compensation and the allowances of the Justices and judges
thereafter appointed. A more careful reading of the challenged Batas Pambansa Blg.
129 ought to have cautioned them against raising such an issue. The language of the
statute is quite clear. The questioned provision reads as follows: "Intermediate Appellate
Justices, Regional Trial Judges, and Municipal Circuit Trial Judges shall receive such
compensation and allowances as may be authorized by the President along the
guidelines set forth in letter of Implementation No. 93 pursuant to Presidential Decree
No. 985, as amended by Presidential Decree No. 1597." 87 The existence of a standard is
thus clear. The basic postulate that underlies the doctrine of non-delegation is that it is
the legislative body which is entrusted with the competence to make laws and to alter
and repeal them, the test being the completeness of the statute in all its terms and
provisions when enacted. As pointed out in Edu v. Ericta: 88 "To avoid the taint of
unlawful delegation, there must be a standard, which implies at the very least that the
legislature itself determines matters of principle and lays down fundamental policy.

Otherwise, the charge of complete abdication may be hard to repel. A standard thus
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. It is the criterion by which legislative purpose may be carried
out. Thereafter, the executive or administrative office designated may in pursuance of
the above guidelines promulgate supplemental rules and regulations. The standard may
be either express or implied. If the former, the non-delegation objection is easily met.
The standard though does not have to be spelled out specifically. It could be implied from
the policy and purpose of the act considered as a whole." 89 The undeniably strong links
that
bind
the
executive
and
legislative
departments
under
the
amended Constitution assure that the framing of policies as well as their implementation
can be accomplished with unity, promptitude, and efficiency. There is accuracy,
therefore, to this observation in the Free Telephone Workers Union decision: "There is
accordingly more receptivity to laws leaving to administrative and executive agencies
the adoption of such means as may be necessary to effectuate a valid legislative
purpose. It is worth noting that a highly-respected legal scholar, Professor Jaffe, as early
as 1947, could speak of delegation as the 'dynamo of modern government.'"90 He
warned against a "restrictive approach" which could be "a deterrent factor to muchneeded legislation." 91 Further on this point from the same opinion: "The spectre of the
non-delegation concept need not haunt, therefore, party caucuses, cabinet sessions or
legislative chambers." 92 Another objection based on the absence in the statute of what
petitioners refer to as a "definite time frame limitation" is equally bereft of merit. They
ignore the categorical language of this provision: "The Supreme Court shall submit to the
President, within thirty (30) days from the date of the effectivity of this act, a staffing
pattern for all courts constituted pursuant to this Act which shall be the basis of the
implementing order to be issued by the President in accordance with the immediately
succeeding section." 93 The first sentence of the next Section is even more categorical:
"The provisions of this Act shall be immediately carried out in accordance with an
Executive Order to be issued by the President." 94 Certainly, petitioners cannot be heard
to argue that the President is insensible to his constitutional duty to take care that the
laws be faithfully executed. 95 In the meanwhile, the existing inferior courts affected
continue functioning as before, "until the completion of the reorganization provided in
this Act as declared by the President. Upon such declaration, the said courts shall be
deemed automatically abolished and the incumbents thereof shall cease to hold
office."96 There is no ambiguity. The incumbents of the courts thus automatically
abolished "shall cease to hold office." No fear need be entertained by incumbents whose
length of service, quality of performance, and clean record justify their being named
anew, 97 in legal contemplation, without any interruption in the continuity of their
service. 98 It is equally reasonable to assume that from the ranks of lawyers, either in
the government service, private practice, or law professors will come the new
appointees. In the event that in certain cases, a little more time is necessary in the
appraisal of whether or not certain incumbents deserve reappointment, it is not from
their standpoint undesirable. Rather, it would be a reaffirmation of the good faith that
will characterize its implementation by the Executive. There is pertinence of this
observation of Justice Holmes that even acceptance to the generalization that courts
ordinarily should not supply omissions in a law, a generalization qualified as earlier
shown by the principle that to save a statute that could be done, "there is no canon
against using common sense in consuming laws as saying what they obviously
mean." 99 Where then is the unconstitutional flaw?

11. In the morning of the hearing of this petition on September 8, 1981, petitioners
sought to have the writer of this opinion and Justices Ramon C. Aquino and Ameurfina
Melencio-Herrera disqualified because the first-named was the Chairman and the other
two, members of the Committee on Judicial Reorganization. At the hearing, the motion
was denied. It was made clear then and there that not one of the three members of the
Court had any hand in the framing or in the discussion of Batas Pambansa Blg. 129. They
were not consulted. They did not testify. The challenged legislation is entirely the product
of the efforts of the legislative body. 100 Their work was limited, as set forth in the
Executive Order, to submitting alternative plans for reorganization. That is more in the
nature of scholarly studies. That they undertook. There could be no possible objection to
such activity. Even since 1973, this Tribunal has had administrative supervision over
inferior courts. It has had the opportunity to inform itself as to the way judicial business
is conducted and how it may be improved. Even prior to the 1973 Constitution, it is the
recollection of the writer of this opinion that either the then Chairman or members of the
Committee on Justice of the then Senate of the Philippines 101 consulted members of
the Court in drafting proposed legislation affecting the judiciary. It is not inappropriate to
cite this excerpt from an article in the 1975 Supreme Court Review: "In the twentieth
century the Chief Justice of the United States has played a leading part in judicial reform.
A variety of conditions have been responsible for the development of this role, and
foremost among them has been the creation of explicit institutional structures designed
to facilitate reform." 102 Also: "Thus the Chief Justice cannot avoid exposure to and
direct involvement in judicial reform at the federal level and, to the extent issues of
judicial federalism arise, at the state level as well." 103
12. It is a cardinal article of faith of our constitutional regime that it is the people who are
endowed with rights, to secure which a government is instituted. Acting as it does
through public officials, it has to grant them either expressly or impliedly certain powers.
Those they exercise not for their own benefit but for the body politic.
The Constitution does not speak in the language of ambiguity: "A public office is a public
trust." 104 That is more than a moral adjuration. It is a legal imperative. The law may
vest in a public official certain rights. It does so to enable them to perform his functions
and fulfill his responsibilities more efficiently. It is from that standpoint that the security
of tenure provision to assure judicial independence is to be viewed. It is an added
guarantee that justices and judges can administer justice undeterred by any fear of
reprisal or untoward consequence. Their judgments then are even more likely to be
inspired solely by their knowledge of the law and the dictates of their conscience, free
from the corrupting influence of base or unworthy motives. The independence of which
they are assured is impressed with a significance transcending that of a purely personal
right. As thus viewed, it is not solely for their welfare. The challenged legislation was
thus subjected to the most rigorous scrutiny by this Tribunal, lest by lack of due care and
circumspection, it allows the erosion of that ideal so firmly embedded in the national
consciousness. There is this further thought to consider. Independence in thought and
action necessarily is rooted in one's mind and heart. As emphasized by former Chief
Justice Paras in Ocampo v. Secretary of Justice, 105 "there is no surer guarantee of
judicial independence than the God-given character and fitness of those appointed to the
Bench. The judges may be guaranteed a fixed tenure of office during good behavior, but
if they are of such stuff as allows them to be subservient to one administration after
another, or to cater to the wishes of one litigant after another, the independence of the
judiciary will be nothing more than a myth or an empty ideal. Our judges, we are
confident, can be of the type of Lord Coke, regardless or in spite of the power of
Congress we do not say unlimited but as herein exercised to reorganize inferior

courts." 106 That is to recall one of the greatest Common Law jurists, who at the cost of
his office made clear that he would not just blindly obey the King's order but "will do
what becomes [him] as a judge." So it was pointed out in the first leading case stressing
the independence of the judiciary, Borromeo v. Mariano. 107 The ponencia of Justice
Malcolm identified good judges with "men who have a mastery of the principles of law,
who discharge their duties in accordance with law, who are permitted to perform the
duties of the office undeterred by outside influence, and who are independent and selfrespecting human units in a judicial system equal and coordinate to the other two
departments of government." 108 There is no reason to assume that the failure of this
suit to annul Batas Pambansa Blg. 129 would be attended with deleterious consequences
to the administration of justice. It does not follow that the abolition in good faith of the
existing inferior courts except the Sandiganbayan and the Court of Tax Appeals and the
creation of new ones will result in a judiciary unable or unwilling to discharge with
independence its solemn duty or one recreant to the trust reposed in it. Nor should there
be any fear that less than good faith will attend the exercise of the appointing power
vested in the Executive. It cannot be denied that an independent and efficient judiciary is
something to the credit of any administration. Well and truly has it been said that the
fundamental principle of separation of powers assumes, and justifiably so, that the three
departments are as one in their determination to pursue the ideals and aspirations and
to fulfill the hopes of the sovereign people as expressed in the Constitution. There is
wisdom as well as validity to this pronouncement of Justice Malcolm in Manila Electric Co.
v. Pasay Transportation Company,109 a decision promulgated almost half a century ago:
"Just as the Supreme Court, as the guardian of constitutional rights, should not sanction
usurpations by any other department of the government, so should it as strictly confine
its own sphere of influence to the powers expressly or by implication conferred on it by
the Organic Act." 110 To that basic postulate underlying our constitutional system, this
Court remains committed.
WHEREFORE, the unconstitutionality of Batas Pambansa Blg. 129 not having been
shown, this petition is dismissed. No costs.cdasia
Makasiar and Escolin, JJ ., concur.
Concepcion, Jr., J ., concurs in the result, the abolition being in good faith.
Fernandez, J ., concurs provided that in the task of implementation by the Executive as
far as the present Justices and judges who may be separated from their service, it would
be in accordance with the tenets of constitutionalism if this Court be consulted and that
its view be respected.
Separate Opinions
BARREDO, J ., concurring:
I join the majority of my brethren in voting that the Judiciary Reorganization Act of
1980, Batas Pambansa Blg. 129, is not unconstitutional as a whole nor in any of its part.
The issue of unconstitutionality raised by petitioners relates particularly to Section 44 of
the Act which reads as follows:
"SEC. 44. Transitory provisions. The provisions of this Act shall be
immediately carried out in accordance with an Executive Order to be issued
by the President. The Court of Appeals, the Courts of First Instance, the

Circuit Criminal Courts, the Juvenile and Domestic Relations Courts, the
Courts of Agrarian Relations, the City Courts, the Municipal Circuit Courts
shall continue to function as presently constituted and organized, until the
completion of the reorganization provided in this Act as declared by the
President. Upon such declaration, the said courts shall be deemed
automatically abolished and the incumbents thereof shall cease to hold
office. The cases pending in the old Courts shall be transferred to the
appropriate Courts constituted pursuant to this Act, together with the
pertinent functions, records, equipment, property and the necessary
personnel.
"The applicable appropriations shall likewise be transferred to the
appropriate courts constituted pursuant to this Act, to be augmented as
may be necessary from the funds for organizational changes as provided
in Batas Pambansa Blg. 80. Said funding shall thereafter be included in the
annual General Appropriations Act."
It is contended by petitioners that the provision in the above section which mandates
that "upon the declaration (by the President that the reorganization contemplated in the
Act has been completed), the said courts (meaning, the Court of Appeals and all other
lower courts, except the Sandiganbayan and the Court of Tax Appeals) shall be deemed
abolished and the incumbents thereof shall cease to hold office" trenches on all the
constitutional safeguards and guarantees of the independence of the judiciary, such as
the security of tenure of its members (Section 7, Article X of the Philippine Constitutionof
1973), the prerogative of the Supreme Court to administratively supervise all courts and
the personnel thereof (Section 6, Id.) and principally, the power of the Supreme Court "to
discipline judges of inferior courts and, by a vote of at least eight Members, order their
dismissal." (Section 7, Id.)
On the other hand, respondents maintain that thru the above-quoted Section 44, the
Batasan did nothing more than to exercise the authority conferred upon it by Section 1 of
the same Article of the Constitution which provides that "(T)he Judicial power shall be
vested in one Supreme Court and in such inferior courts as may be established by law."
In other words, since all inferior courts are, constitutionally speaking, mere creatures of
the law (of the legislature), it follows that it is within the legislature's power to abolish or
reorganize them even if in so doing, it might result in the cessation from office of the
incumbents thereof before the expiration of their respective constitutionally-fixed
tenures. Respondents emphasize that the legislative power in this respect is broad and
indeed plenary.
Viewing the problem before Us from the above perspectives, it would appear that our
task is either (1) to reconcile, on the one hand, the parliament's power of abolition and
reorganization with, on the other, the security of tenure of members of the judiciary and
the Supreme Court's authority to discipline and remove judges or (2) to declare that
either the power of the Supreme Court or of the Batasan is more paramount than that of
the other. I believe, however, that such a manner of looking at the issue that confronts
Us only confuses and compounds the task We are called upon to perform. For how can
there be a satisfactory and rational reconciliation of the pretended right of a judge to
continue as such, when the position occupied by him no longer exists? To suggest, as
some do, that the solution is for the court he is sitting in not to be deemed abolished or
that he should in some way be allowed to continue to function as judge until his

constitutional tenure expires is obviously impractical, if only because we would then

have the absurd spectacle of a judiciary with old and new courts functioning under
distinct set-ups, such as a district court continuing as such in a region where the other
judges are regional judges or of judges exercising powers not purely judicial which is
offensive to the Constitution. The other suggestion that the incumbent of the abolished
court should be deemed appointed to the corresponding new court is even worse, since
it would deprive the appointing authority, the President, of the power to make his own
choices and would, furthermore, amount to an appointment by legislation, which is a
constitutional anachronism. More on this point later. cdasia
Inasmuch as pursuant to the analysis of the majority of the Members of this Court, in fact
and in law, the structure of judicial system created by Batas Pambansa 129 is
substantially different from that under the Judiciary Act of 1948, as amended, hence the
courts now existing are actually being abolished, why do We have to indulge in any
reconciliation or feel bound to determine whose power, that of the Batasang Pambansa
or that of this Court, should be considered more imperious? It being conceded that the
power to create or establish carries with it the power to abolish, and it is a legal axiom,
or at least a pragmatic reality, that the tenure of the holder of an office must of necessity
end when his office no longer exists, as I see it, We have no alternative than to hold that
petitioners' invocation of the independence-of-the-judiciary principle of theConstitution is
unavailing in the cases at bar. It is as simple as that. I might hasten to add, in this
connection, that to insist that what Batas Pambansa 129 is doing is just a renaming, and
not a substantial and actual modification or alteration of the present judicial structure or
system, assuming a close scrutiny might somehow support such a conclusion, is pure
wishful thinking, it being explicitly and unequivocally provided in the section in question
that said courts "are deemed abolished" and further, as if to make it most unmistakably
emphatic, that "the incumbents thereof shall cease to hold office." Dura lex, sed lex. As a
matter of fact, I cannot conceive of a more emphatic way of manifesting and conveying
the determined legislative intent about it.
Now, why am I yielding to the above reasoning and conclusion? Why don't I insist on
championing the cause of the independence of the judiciary by maintaining that the
constitutional safeguards thereof I have already enumerated earlier must be respected in
any reorganization ordained by the parliament? My answer is simple. Practically all the
Members of the Court concede that what is contemplated is not only general
reorganization but abolition in other words, not only a rearrangement or remodelling
of the old structure but a total demolition thereof to be followed by the building of a new
and different one. I am practically alone in contemplating a different view. True, even if I
should appear as shouting in the wilderness, I would still make myself a hero in the eyes
of many justices and judges, members of the bar and concerned discerning citizens, all
lovers of the judicial independence, but understandably, I should not be, as I am not,
disposed to play such a role virtually at the expense not only of my distinguished
colleagues but of the Batasang Pambansa that framed the law and, most of all, the
President who signed and, therefore, sanctioned the Act as it is, unless I am absolutely
sure that my position is formidable, unassailable and beyond all possible contrary
ratiocination, which I am not certain of, as I shall demonstrate anon.
To start with, the jurisprudence, here and abroad, touching on the question now before
Us cannot be said to be clear and consistent, much less unshakable and indubitably
definite either way. None of the local cases 1 relied upon and discussed by the parties
and by the Members of the Court during the deliberations, such as

Borromeo, 2 Ocampo, 3 Zandueta, 4 Brillo, 5 etc. can, to my mind, really serve as

reliable pole stars that could lead me to certainty of correctness.
Of course, my instinct and passion for an independent judiciary are uncompromising and
beyond diminution. Indeed, my initial reactions, publicly known, about Batas Pambansa
129 explaining academically its apparent tendency to invade the areas of authority of
the Supreme Court, not to speak of its dangerously impairing the independence of the
judiciary, must have, I imagine, created the impression that I would vote to declare the
law unconstitutional. But, during the deliberations of the Court, the combined wisdom of
my learned colleagues was something I could not discount or just brush aside. Pondering
and thinking deeper about all relevant factors, I have come to the conviction that at least
on this day and hour there are justifiable grounds to uphold the Act, if only to try how it
will operate so that thereby the people may see that We are one with the President and
the Batasan in taking what appear to be immediate steps needed to relieve the people
from a fast spreading cancer in the judiciary of our country.
Besides, the Philippines has somehow not yet returned to complete normalcy. The
improved national discipline, so evident during the earlier days of martial law, has
declined at a quite discernible degree. Different sectors of society are demanding urgent
reforms in their respective fields. And about the most vehement and persistent, loud and
clear, among their gripes, which as a matter of fact is common to all of them, is that
about the deterioration in the quality of performance of the judges manning our courts
and the slow and dragging pace of pending judicial proceedings. Strictly speaking, this is,
to be sure, something that may not necessarily be related to lack of independence of the
judiciary. It has more to do with the ineptness and/or corruption among and corruptibility
of the men sitting in the courts in some parts of the country. And what is worse, while in
the communities concerned, the malady is known to factually exist and is actually graver
and widespread, very few, if any, individuals or even associations and organized groups,
truly incensed and anxious to be of help, have the courage and possess the requisite
legal evidence to come out and file the corresponding charges with the Supreme Court.
And I am not yet referring to similar situations that are not quite openly known but
nevertheless just as deleterious. On the other hand, if all these intolerable instances
should actually be formally brought to the Supreme Court, it would be humanly
impossible for the Court to dispose of them with desirable dispatch, what with the
thousands of other cases it has to attend to and the rather cumbersome strict
requirements of procedural due process it has to observe in each and every such
administrative case, all of which are time consuming. Verily, under the foregoing
circumstances, it may be said that there is justification for the patience of the people
about the possibility of early eradication of this disease or evil in our judiciary pictured
above to be nearing the breaking point.
Withal, we must bear in mind that judicial reorganization becomes urgent and inevitable
not alone because of structural inadequacies of the system or of the cumbersomeness
and technicality-peppered and dragging procedural rules in force, but also when it
becomes evident that a good number of those occupying positions in the judiciary, make
a mockery of justice and take advantage of their office for selfish personal ends and yet,
as already explained, those in authority cannot expeditiously cope with the situation
under existing laws and rules. It is my personal assessment of the present situation in
our judiciary that its reorganization has to be of necessity two-pronged, as I have just
indicated, for the most ideal judicial system with the most perfect procedural rules
cannot satisfy the people and the interests of justice unless the men who hold positions
therein possess the character, competence and sense of loyalty that can guarantee their

devotion to duty and absolute impartiality, nay, impregnability to all temptations of graft
and corruption, including the usual importunings and the fearsome albeit improper
pressures of the powers that be. I am certain that the Filipino people feel happy
that Batas Pambansa 129 encompasses both of these objectives, which indeed are
aligned with the foundation of the principle of independence of the judiciary. LLphil
The above premises considered, I have decided to tackle our problem from the viewpoint
of the unusual situation in which our judiciary is presently perilously situated. Needless
to say, to all of us, the Members of the Court, the constitutional guarantees of security of
tenure and removal-only-by the Supreme Court, among others, against impairment of
the independence of the judiciary, which is one of the bedrocks and, therefore, of the
essence in any "democracy under a regime of justice, peace, liberty and equality,"
(Preamble of the 1973 Constitution), are priceless and should be defended, most of all by
the Supreme Court, with all the wisdom and courage God has individually endowed to
each of Us. Withal, we are all conscious of the fact that those safeguards have never
been intended to place the person of the judge in a singular position of privilege and
untouchability, but rather, that they are essentially part and parcel of what is required of
an independent judiciary where judges can decide cases and do justice to everyone
before them ruat caelum. However, We find Ourselves face to face with a situation in our
judiciary which is of emergency proportions and to insist on rationalizing how those
guarantees should be enforced under such circumstance seem to be difficult, aside from
being controversial. And so, in a real sense, We have to make a choice between adhering
to the strictly legalistic reasoning pursued by petitioners, on the one hand, and the
broader and more practical approach, which as I have said is within the spirit at least of
the Constitution.
My concept of the Constitution is that it is not just a cluster of high sounding verbiages
spelling purely idealism and nobility in the recognition of human dignity, protection of
individual liberties and providing security and promotion of the general welfare under a
government of laws. With all emphasis and vehemence, I say that the fundamental law
of the land is a living instrument which translates and adapts itself to the demands of
obtaining circumstances. It is written for all seasons, except for very unusual instances
that human ratiocination cannot justify to be contemplated by its language even if read
in its broadest sense and in the most liberal way. Verily, it is paramount and supreme in
peace and in war, but even in peace grave critical situations arise demanding recourse
to extraordinary solutions. Paraphrasing the Spanish adage, "Grandes males, grandes
remedios," such in ordinary problems justify exceptional remedies. And so, history
records that in the face of grave crises and emergencies, the most constitutionally
idealistic countries have, at one time or another, under the pressure of pragmatic
considerations, adopted corresponding realistic measures, which perilously tether along
the periphery of their Charters, to the extent of creating impressions, of course
erroneous, that the same had been transgressed, although in truth their integrity and
imperiousness remained undiminished and unimpaired.
The Philippines has but recently had its own experience of such constitutional approach.
When martial law was proclaimed here in 1972, there were those who vociferously
shouted not only that the President had acted arbitrarily and without the required factual
bases contemplated in the Commander-in-Chief clause of the 1935 Constitution, but
more, that he had gone beyond the traditional and universally recognized intent of said
clause by utilizing his martial law powers not only to maintain peace and tranquility and
preserve and defend the integrity and security of the state but to establish a New

Society. The critics contended that martial law is only for national security, not for the
imposition of national discipline under a New Society.
Due to its relevancy to Our present discussion, it is well for everyone to bear in mind that
in this jurisdiction, this concept of martial law has already been upheld several times by
this Court. I, for one, accepted such a construction because I firmly believe that to
impose martial law for the sole end of suppressing an insurrection or rebellion without
coincidentally taking corresponding measures to eradicate the root causes of the
uprising is utter folly, for the country would still continue to lay open to its recurrence.
I have made the foregoing discourse, for it is fundamentally in the light of this Court's
doctrines about the imposition of martial law as I have stated that I prefer to base this
concurrence. To put it differently, if indeed there could be some doubt as to the
correctness of this Court's judgment that Batas Pambansa 129 is not unconstitutional,
particularly its Section 44, I am convinced that the critical situation of our judiciary today
calls for solutions that may not in the eyes of some conform strictly with the letter of
the Constitution but indubitably justified by its spirit and intent. As I have earlier
indicated, the Charter is not just a construction, of words to whose literal ironclad
meanings we must feel hidebound, without regard to everyConstitution's desirable
inherent nature of adjustability and adaptability to prevailing situations so that the spirit
and fundamental intent and objectives of the framers may remain alive. Batas Pambansa
129 is one such adaptation that comes handy for the attainment of the transcendental
objectives it seeks to pursue. While, to be sure, it has the effect of factually easing out
some justices and judges before the end of their respective constitutional tenure sans
the usual administrative investigation, the desirable end is achieved thru means that, in
the light of the prevailing conditions, is constitutionally permissible. LLpr
Before closing, it may not be amiss for me to point out that Batas Pambansa 129, aside
from what has been discussed about its effect on the guarantees of judicial
independence, also preempts, in some of its provisions, the primary rule-making power
of the Supreme Court in respect to procedure, practice and evidence. With the pardon of
my colleagues, I would just like to say that the Court should not decry this development
too much. After all, the legislature is expressly empowered by the Charter to do so,
(Section 5(5), Article X of the Constitution of 1973) so much so, that I doubt if the Court
has any authority to alter or modify any rule the Batasang Pambansa enunciates. Truth
to tell, as Chairman of the Committee on the Revision of the Rules of Court, for one
reason or another, principally the lack of a clear consensus as to what some of my
colleagues consider very radical proposals voiced by me or my committee, We have
regrettably procrastinated long enough in making our procedural rules more practical
and more conducive to speedier disposal and termination of controversies by dealing
more with substantial justice.
So also have We, it must be confessed, failed to come up to expectations of the framers
of the Constitution in our ways of disposing of administrative complaints against erring
and misconducting judges. Of course, We can excuse Ourselves with the explanation that
not only are We overloaded with work beyond human capability of its being performed
expeditiously, but that the strict requisites of due process which are time consuming
have precluded Us from being more expeditious and speedy.
I feel I must say all of these, because if the above-discussed circumstances have not
combined to create a very critical situation in our judiciary that is making the people lose
its faith and confidence in the administration of justice by the existing courts, perhaps
the Court could look with more sympathy at the stand of petitioners. I want all and

sundry to know, however, that notwithstanding this decision, the independence of the
judiciary in the Philippines is far from being insubstantial, much less meaningless and
dead. Batas Pambansa 129 has precisely opened our eyes to how, despite doubts and
misgivings, theConstitution can be so construed as to make it possible for those in
authority to answer the clamor of the people for an upright judiciary and overcome
constitutional roadblocks more apparent than real.
To those justices, judges, members of the bar and concerned citizens whose eyes may be
dimming with tears of disappointment and disenchantment because of the stand I have
chosen to adopt in these cases, may I try to assuage them by joining their fervent
prayers that some other day, hopefully in the near future, Divine Providence may dictate
to another constitutional convention to write the guarantees of judicial independence
with ink of deeper hue and words that are definite, clear, unambiguous and unequivocal,
in drawing the line of demarcation between the Parliament and the Judiciary in the
manner that in His Infinite wisdom would most promote genuine and impartial justice for
our people, free, not only from graft, corruption, ineptness and incompetence but even
from the tentacles of interference and insiduous influence of the political powers that be.
Presently, I am constrained from going along with any other view than that
the Constitution allows abolition of existing courts even if the effect has to be the
elimination of any incumbent judge and the consequent cutting of his constitutional
tenure of office. cdasia
I cannot close this concurrence without referring to the apprehensions in some quarters
about the choice that will ultimately be made of those who will be eased out of the
judiciary in the course of the implementation of Batas Pambansa 129. By this decision,
the Court has in factual effect albeit not in constitutional conception yielded generally to
the Batasang Pambansa, and more specifically to the President, its own constitutionally
conferred power of removal of judges. Section 44 of the Batasan's Act declares that all of
them shall be deemed to have ceased to hold office, leaving it to the President to
appoint those whom he may see fit to occupy the new courts. Thus, those who will not
be appointed can be considered as "ceasing to hold their respective offices," or, as
others would say they would be in fact removed. How the President will make his choices
is beyond Our power to control. But even if some may be eased out even without being
duly informed of the reason therefor, much less being given the opportunity to be heard,
the past actuations of the President on all matters of deep public interest should serve as
sufficient assurance that when he ultimately acts, he will faithfully adhere to his solemn
oath "to do justice to every man," hence, he will equip himself first with the fullest
reliable information before he acts. This is not only my individual faith founded on my
personal acquaintances with the character and sterling qualities of President Ferdinand
E. Marcos. I dare say this is the faith of the nation in a man who has led it successfully
through crises and emergencies, with justice to all, with malice towards none. I am
certain, the President will deal with each and every individual to be affected by this
reorganization with the best light that God will give him every moment he acts in each
individual case as it comes for his decision.
AQUINO, J ., concurring:
I concur in the result. The petitioners filed this petition for declaratory relief and
prohibition "to declare the Judiciary Reorganization Act of 1980 (Batas Pambansa Blg.
129) unconstitutional."
The petition should have been dismissed outright because this Court has no jurisdiction
to grant declaratory relief and prohibition is not the proper remedy to test the

constitutionality of the law. The petition is premature. No jurisdictional question is

involved.
There is no justiciable controversy wherein the constitutionality of the said law is in
issue. It is presumed to be constitutional. The lawmaking body before enacting it looked
into the constitutional angle.
Seven of the eight petitioners are practising lawyers. They have no personality to assail
the constitutionality of the said law even as taxpayers.
The eighth petitioner, Gualberto J. de la Llana, a city judge (who in 1977 filed a petition
for declaratory relief assailingPresidential Decree No. 1229, which called for a
referendum, De la Llana vs. Comelec, 80 SCRA 525), has no cause of action for
prohibition. He is not being removed from his position.
The Judiciary Reorganization Law was enacted in utmost good faith and not "to cloak an
unconstitutional and evil purpose." As ably expounded by the Chief Justice, in enacting
the said law, the lawmaking body acted within the scope of its constitutional powers and
prerogatives.
GUERRERO, J ., concurring:
I concur with my distinguished and learned colleagues in upholding the constitutionality
of the Judiciary Reorganization Act of 1980. For the record, however, I would like to state
my personal convictions and observations on this case, a veritable landmark case, for
whatever they may be worth. llcd
The legal basis of the Court's opinion rendered by our esteemed Chief Justice having
been exhaustively discussed and decisively justified by him, a highly-respected expert
and authority on constitutional law, it would be an exercise in duplication to reiterate the
same cases and precedents. I am then constrained to approach the problem quite
differently, not through the classic methods of philosophy, history and tradition, but
following what the well-known jurist, Dean Pound, said that "the most significant advance
in the modern science of law is the change from the analytical to the functional
attitude." 1And in pursuing this direction, I must also reckon with and rely on the ruling
that "another guide to the meaning of a statute is found in the evil which it is designed
to remedy, and for this the court properly looks at contemporaneous events, the
situation as it existed, and as it was pressed upon the attention of the legislative body." 2
I have no doubt in my mind that the institutional reforms and changes envisioned by the
law are clearly conducive to the promotion of national interests. The objectives of the
legislation, namely: (a) An institutional restructuring by the creation of an Intermediate
Appellate Court, thirteen (13) Regional Trial Courts, Metropolitan Trial Courts, Municipal
Trial Courts and Municipal Circuit Trial Courts; (b) A re-apportionment of jurisdiction
geared towards greater efficiency; (c) a Simplification of procedures; and (d) The
abolition of the inferior courts created by the Judiciary Act of 1948 and other statutes, as
approved by the Congress of the Philippines 3 are undoubtedly intended to improve the
regime of justice and thereby enhance public good and order. Indeed, the purpose of the
Act as further stated in the Explanatory Note, which is "to embody reforms in the
structure, organization and composition of the Judiciary, with the aim of improving the
administration of justice, of decongesting judicial dockets, and coping with the more
complex problems on the present and forseeable future" cannot but "promote the
welfare of society, since that is the final cause of law." 4

Hence, from the standpoint of the general utility and functional value of the Judiciary
Reorganization Act, there should be no difficulty, doubt or disbelief in its legality and
constitutionality. That there are ills and evils plaguing the judicial system is undeniable.
The notorious and scandalous congestion of court dockets is too well-known to be
ignored as are the causes which create and produce such anomaly. Evident is the need
to look for devices and measures that are more practical, workable and economical. 5
From the figures alone (301,497 pending cases in 1976; 351,943 in 1977; 404,686 in
1978; 426,911 in 1979; 441,332 in 1980; and 450,063 as of February 3, 1982) 6 the
congested character of court dockets rising year after year is staggering and enormous,
looming like a legal monster.
But greater than the need to dispense justice speedily and promptly is the necessity to
have Justices and Judges who are fair and impartial, honest and incorruptible, competent
and efficient. The general clamor that the prestige of the Judiciary today has deteriorated
and degenerated to the lowest ebb in public estimation is not without factual basis.
Records in the Supreme Court attest to the unfitness and incompetence, corruption and
immorality of many dispensers of justice. According to the compiled data, the total
number of Justices and Judges against whom administrative charges have been filed for
various offenses, misconduct, venalities and other irregularities reaches 322. Of this
total, 8 are Justices of the Court of Appeals, 119CFI Judges, 2 Criminal Circuit Court
Judges, 8 Car Judges, 1 Juvenile and Domestic Relations Court Judge, 38 City Judges,
and146 Municipal Judges.
The Supreme Court had found 102 of them guilty and punished them with either
suspension, admonition, reprimand or fine. The number includes 1 CA Justice, 35 CFI
Judges, 1 CCC Judge, 3 CAR Judges, 1 JDRC Judge, 9 City Judges and 53 Municipal
Judges. cdasia
Seventeen (17) Judges have been ordered dismissed and separated from the service.
And these are 3 CFI, 1 CAR, 1 City Judge and 12 Municipal Judges.
Going over these administrative proceedings, it took an average of two-year period from
the filing of the charge to the dismissal of the respondent. In one case, the proceedings
were terminated after seven years. How long the pending administrative cases will be
disposed of, only time will tell as an increasing number of administrative cases are being
filed by victims of judicial misconduct, abuse and arbitrariness.
Excepting those who have been punished and dismissed from the service, there are
many who have been castigated and censured in final judgments of the Supreme Court
upon appeal or review of the decisions, orders and other acts of the respondent courts,
Justices and Judges. To cite a few cases, Our decisions have categorically pronounced
respondents' actuations, thus: "deplorable, giving no credit to the Judiciary" 7 ;
"everything was irregular and violative of all pertinent and applicable rules. The whole
proceedings looked no more than a pre-arranged compromise between the accused and
the judge to flaunt the law and every norm of propriety and procedure" 8 ; "there was a
deliberate failure of respondent Judge to respect what is so clearly provided in the Rules
of Court" 9 ; "It is unfortunate that respondent Judge failed to acquaint himself with, or
misinterpreted, those controlling provisions and doctrines" 10 ; "The failure of the
respondent Municipal Judge to yield obedience to authoritative decisions of the Supreme
Court and of respondent Court of First Instance Judge and his deplorable insistence on
procedural technicalities was called down in L-49828, July 25, 1981. For peremptorily
dismissing the third party complaint on the ground that the motion to dismiss was 'welltaken' and respondent Judge did not elaborate, the Court remarked: "May his tribe

vanish." 11 In one case, We noted "There is here something unusual, but far from
palliating the gravity of the error incurred, it merely exacerbated it. . . . it did render the
due process requirement nugatory, for instead of a fair and impartial trial, there was an
idle form, a useless ceremony." 12
It is dishonorable enough to be publicly and officially rebuked but to allow these Judges
and their ilk to remain and continue to preside in their courtrooms is a disgrace to the
Judiciary. It is to be deplored that the Supreme Court has not found time to exercise its
power and authority in the premises, for no charges or proceedings have been instituted
against them. We have a list of these crooked Judges whose actuations have been found
to be patently wrong and manifestly indefensible. There ought to be no objection or
compunction in weeding them out from the service. If they are not booted out now, it will
take from here to eternity to clean this Augean stable.
Candidly, one reason for writing this concurring opinion is to call attention to these evils,
abuses and wrongs which are surreptitiously but surely destroying the trust and faith of
the people in the integrity of the entire Judiciary. Some members of the Court felt that
these revelations would be like washing dirty linen in public. But these facts are of public
and official records, nay court cases, and sooner or later, Truth will come out.
In the light of these known evils and infirmities of the judicial system, it would be absurd
and unreasonable to claim that the legislators did not act upon them in good faith and
honesty of purpose and with legitimate ends. It is presumed that official duty has been
regularly performed. 13 The presumption of regularity is not confined to the acts of the
individual officers but also applies to the acts of boards, such as administrative board or
bodies. and to acts of legislative bodies. 14 Good faith is always to be presumed in the
absence of proof to the contrary, of which there is none in the case at bar. It could not be
otherwise if We are to accord as We must, full faith and credit to the lawmakers' deep
sense of public service and the judicious exercise of their high office as the duly-elected
representatives of the people. LLjur
It is conceded that the abolition of an office is legal if attendant with good faith. 15 The
question of good faith then is the crux of the conflict at bar. Good faith in the enactment
of the law does not refer to the wisdom of the measure, the propriety of the Act, or to its
expediency. The questions raised by petitioners and amicus curiae for their cause, viz:
Why abolish all the courts? Why legislate out the judges? Why not amend the Rules of
Court only? Is abolition of all courts the proper remedy to weed out corrupt and misfits in
our Judiciary? may not be inquired into by Us. "It is not the province of the courts to
supervise legislation and keep it within the bounds of propriety and common sense. That
is primarily and exclusively a legislative concern." 16 The Courts "are not supposed to
override legitimate policy and . . . never inquire into the wisdom of the law." 17 Chief
Justice Fernando who penned the Morfe decision, writes that while "(i)t is thus settled, to
paraphrase Chief Justice Concepcion in Gonzales v. Commission on Elections, that only
congressional power or competence, not the wisdom of the action taken, may be the
basis for declaring a statute invalid," 18 he adds that it is "useful to recall what was so
clearly stated by Laurel that 'the Judiciary in the determination of actual cases and
controversies must reflect the wisdom and justice of the people as expressed through
their representatives in the executive and legislative departments of the
government.'" 19in any case, petitioners have not shown an iota of proof of bad faith.
There is no factual foundation of bad faith on record. And I do not consider the statement
in the sponsorship speech for Cabinet Bill No. 42 of Minister of Justice Ricardo J. Puno
that the Bill would be a more efficient vehicle of "eliminating incompetent and unfit
Judges" as indicative of impermissible legislative motive. 20

It may be true that while the remedy or solution formulated by the legislation will
eradicate hopefully or at least minimize the evils and ills that infect and pester the
judicial body, it will result in the actual removal of the Justices of the Court of Appeals
and Judges of the lower courts. It is also true that whether it is termed abolition of office
or removal from office, the end-result is the same termination of the services of these
incumbents. Indeed, the law may be harsh, but that is the law. Dura lex sed lex.
The Justices and Judges directly affected by the law, being lawyers, should know or are
expected to know the nature and concept of a public office. It is created for the purpose
of effecting the ends for which government has been instituted, which are for the
common good, and not the profit, honor or private interest of any one man, family or
class of men. In our form of government, it is fundamental that public offices are public
trust, and that the person to be appointed should be selected solely with a view to the
public welfare. 21 In the last analysis, a public office is a privilege in the gift of the
State. 22
There is no such thing as a vested interest or an estate in an office, or even an absolute
right to hold office. Excepting constitutional offices which provide for special immunity as
regards salary and tenure, no one can be said to have any vested right in an office or its
salary. When an office is created by the Constitution, it cannot be abolished by the
legislature, but when created by the State under the authority of the Constitution, it may
be abolished by statute and the incumbent deprived of his office. 23 Acceptance of a
judicial appointment must be deemed as adherence to the rule that "when the court is
abolished, any unexpired term is abolished also. The Judge of such a court takes office
with that encumbrance and knowledge." 24 "The Judge's right to his full term and his full
salary are not dependent alone upon his good conduct, but also upon the contingency
that the legislature may for the public good, in ordaining and establishing the courts,
from time to time consider his office unnecessary and abolish it." 25
The removal from office of the incumbent then is merely incidental to the valid act of
abolition of the office as demanded by the superior and paramount interest of the
people. The bad and the crooked Judges must be removed. The good and the straight,
sober Judges should be reappointed but that is the sole power and prerogative of the
President who, I am certain, will act according to the best interest of the nation and in
accordance with his solemn oath of office "to preserve and defend its Constitution,
execute its laws, do justice to everyone . . ." There and then the proper balance between
the desire to preserve private interest and the desideratum of promoting the public good
shall have been struck. 26
The Supreme Court has been called the conscience of the Constitution. It may be the last
bulwark of constitutional government. 27 It must, however, be remembered 'that
legislatures are ultimate guardians of the liberties and welfare of the people in quite as
great a degree as courts." 28 The responsibility of upholding the Constitution rests not
on the courts alone but on the legislatures as well. It adheres, therefore, to the wellsettled principle that "all reasonable doubts should be resolved in favor of the
constitutionality of a statute" for which reason it will not set aside a law as violative of
theConstitution "except in a clear case." 29
Finally, I view the controversy presented to Us as a conflict of opinions on judicial
independence, whether impaired or strengthened by the law; on reorganization of the
courts, whether abolition of office or removal therefrom; and on delegation of legislative
power, whether authorized or unauthorized. Without detracting from the merits, the

force and brilliance of their advocacies based on logic, history and precedents, I choose
to stand on the social justification and the functional utility of the law to uphold its
constitutionality. In the light of the contemporaneous events from which the New
Republic emerged and evolved new ideals of national growth and development,
particularly in law and government, a kind or form of judicial activism, perhaps similar to
it, is necessary to justify as the ratio decidendi of Our judgment. cdasia
This is the time and the moment to perform a constitutional duty to affix my imprimatur
and affirmance to the law, hopefully an act of proper judicial statesmanship.
ABAD SANTOS, J ., concurring and dissenting:
I agree with the learned Chief Justice of the Philippines that Batas Pambansa Blg. 129 is
not unconstitutional. Unlike Oscar Wilde, I choose not to yield to temptation by
embellishing my concurrence lest I be accused of bringing coal to Newcastle.
Accordingly, I will simply vote to dismiss the petition.
However, I cannot agree with the Chief Justice when he says:
". . . In the implementation of the assailed legislation, therefore, it would be
in accordance with accepted principles of constitutional construction that
as far as incumbent justices and judges are concerned, this Court be
consulted and that its view be accorded the fullest consideration. There
would be no plausibility then to the allegation that there is an
unconstitutional taint to the challenged Act. Moreover, such a construction
would be in accordance with the basic principle that in the choice of
alternatives between one which would save and another which would
invalidate a statute, the former is to be preferred."
It has already been ruled that the statute does not suffer from any constitutional infirmity
because the abolition of certain judicial offices was done in good faith. This being the
case, I believe that the Executive is entitled to exercise its constitutional power to fill the
newly created judicial positions without any obligation to consult with this Court and to
accord its views the fullest consideration. To require consultation will constitute an
invasion of executive territory which can be resented and even repelled. The implicit
suggestion that there could be an unconstitutional implementation of the questioned
legislation is not congruent with the basic conclusion that it is not unconstitutional.
DE CASTRO, J ., concurring:
I concur in the declaration that the law is not unconstitutional.
May I, however, submit this separate opinion more to avoid being misunderstood by my
brethren in the judiciary as not feeling for them as much concern as I should for their
security of tenure which is raised as the main argument against the constitutionality of
the law, than by way of giving added force or support to the main opinion so well-written
by Our learned Chief Justice in his usual scholarly fashion. I, therefore, limit myself to a
discussion that the assailed statute is not unconstitutional without having to suggest how
it may be implemented in order that it could stand the most rigid test of constitutionality,
for in that area, what is involved is purely an executive act of the President in whose
wisdom, patriotism and sense of justice We should trust in how he would fulfill his sworn
duties to see that the laws are faithfully executed and to do justice to every man.

Moreover, while I also concur in the dismissal of the petition, I do so on the additional
ground that petitioners have not fulfilled all the requisites for the exercise by this Court
of its power of judicial inquiry the power to declare a law unconstitutional.
I
The creation and organization of courts inferior to the Supreme Court is a constitutional
prerogative of the legislature. This prerogative is plenary and necessarily implies the
power to reorganize said courts, and in the process, abolish them to give way to new or
substantially different ones. To contend otherwise would be to forget a basic doctrine of
constitutional law that no irrepealable laws shall be passed. 1
The power to create courts and organize them is necessarily the primary authority from
which would thereafter arise the security of tenure of those appointed to perform the
functions of said courts. In the natural order of things, therefore, since the occasion to
speak of security of tenure of judges arises only after the courts have first been brought
into being, the right to security of tenure takes a secondary position to the basic and
primary power of creating the courts to provide for a fair and strong judicial system. If
the legislature, in the exercise of its authority, deems it wise and urgent to provide for a
new set of courts, and in doing so, it feels the abolition of the old courts would conduce
more to its objective of improving the judiciary and raising its standard, the matter
involved is one of policy and wisdom into which the courts, not even the Supreme Court,
cannot inquire, much less interfere with. By this secondary position it has to the primary
power of the legislature to create courts, the security of tenure given to the incumbents
should not be a legal impediment to the exercise of that basic power of creating the
statutory courts which, by necessary implication, includes the power to abolish them in
order to create new ones. This primary legislative power is a continuing one, and the
resultant right of security of tenure of those appointed to said courts could not bring
about the exhaustion of that power. Unquestionably, the legislature can repeal its own
laws, and that power can never be exhausted without, as a consequence, violating a
fundamental precept of constitutional and representative government that no
irrepealable laws shall be passed.
If the creation of courts is a legislative prerogative their abolition is, therefore, a matter
of legislative intent. It involves the exercise of legislative power, an act of legislation
which generally concerns policy in the formation of which the courts have no say.
Initially, when the legislature creates the courts, it suffers from no limitation arising from
the necessity of respecting the security of tenure of judges who are not yet there. This
inherent character of fullness and plenitude of the power to create and abolish courts
does not change when that same power is once more exercised thereafter, as the need
therefor is felt. Which only goes to show that when done in good faith and motivated
solely by the good and the well-being of the people, the exercise of the power is not
meant to be restricted, curtailed, much less exhausted by the so-called judicial security
of tenure.
The passage of the Judiciary Reorganization Act of 1980 is no more than the exercise of
the power vested by the Constitutionon the legislative body of the Republic as described
above. That power carries with it the duty and responsibility of providing the people with
the most effective and efficient system of administration of justice. This is by far of more
imperative and transcendental importance than the security of tenure of judges which,
admittedly, is one of the factors that would conduce to independence of the judiciary
but first of all, a good, efficient and effective judiciary. A judiciary wanting in these basic

qualities does not deserve the independence that is meant only for a judiciary that can
serve best the interest and welfare of the people which in the most primordial and
paramount consideration, not a judiciary in which the people's faith has been eroded, a
condition which the security of tenure, in some instances, may even be
contributory. LLphil
In enacting the Judiciary Reorganization Act of 1980, the legislature is presumed to have
been motivated by no other objective than to provide the people the kind of judicial
machinery that would best serve their interest and welfare, in its belief that the present
machinery is falling short of that measure of public service. It should, likewise, be
presumed that it has been led to this low estimate of the utility and effectiveness of the
present set-up of the judiciary after informing itself, with the facilities at its command,
such as the power of legislative investigation, of the actual condition of the courts,
particularly as to whether they continue to enjoy the trust, faith and confidence of the
public, and what the cause or causes are of their erosion, if not loss, as is the keenly
perceptible feeling of the people in general. Responsibility for this more or less extensive
slowdown of the delivery of judicial service can be laid on no other than neither of the
two components of a court the procedural laws or rules that govern the workings of
the courts, or the persons executing or applying them or both.
When two interests conflict as what had given rise to the present controversy the duty
of the legislature to provide society with a fair, efficient and effective judicial system, on
one hand, and the right of judges to security of tenure, on the other, the latter must of
necessity yield to the former. One involves public welfare and interest more directly and
on a greater magnitude than the right of security of tenure of the judges which is, as is
easily discernible, more of a personal benefit to just a few, as indeed only the judge
affected could seek judicial redress of what he conceives to be its violation.
Herein lies the propriety of the exercise of "police power" of the State, if this concept
which underlies even the Constitution, has to be invoked as a constitutional justification
of the passage of the Act in question. That is, if a conflict between the primary power of
the legislature to create courts, and mere consequential benefit accorded to judges and
justices after the creation of the courts is indeed perceivable, which the writer fails to
see, or, at least, would disappear upon a reconciliation of the two apparently conflicting
interests which, from the above disquisition, is not hard to find. It is, without doubt, in
the essence of the exercise of police power that a right assertable by individuals may be
infringed in the greater interest of the public good and general welfare. This is
demonstrated in how the rights and freedoms enumerated in the Bill of Rights enjoyable
by the entire people, not just by a handful in comparison, are made subject to the lawful
exercise of the police power of the State.
Viewed, therefore, from the abovementioned perspective, the general revamp of the
judiciary involving both its components the court as an office or institution, and the
judges and justices that man them should not find any legal obstacle in the security of
tenure of judges. This security, after all, is no more than as provided for all other officials
and employees in the civil service of the government in Section 3, Article XII-B of
the Constitution which provides:
"No officer or employees in the civil service shall be suspended or
dismissed except for cause as provided by law."
The provision of Article XVII, Section 10 of the Constitution gives to judicial officials no
more than a guarantee that their retirement age as fixed in the Constitution shall not be
alterable at mere legislative pleasure. The equivalent provision in the1935

Constitution was inserted for the first time because the retirement age before then was
provided merely by statute not by the Constitution. If it comes to their removal or
suspension, what gives them constitutional protection is the aforequoted provision which
does not contemplate abolition of office when done in good faith, for removal implies the
existence of the office, not when it is abolished. Admittedly, as has been held, abolition
of office for no reason related to public welfare or for the good of the service, let alone
when done in bad faith, amounts to an unlawful removal. 2 The abolition of the courts as
declared in the Act as a result of a reorganization of the judiciary, as the Title of the law
curtly but impressively announces, can by no means, from any viewpoint, be so branded.
And whether by said reorganization, the present courts would be deemed abolished, as
the law expresses such an unmistakable intent, the matter is one for the sole and
exclusive determination of the legislature. It rests entirely on its discretion whether by
the nature and extent of the changes it has introduced, it has done enough to consider
them abolished. To give the Supreme Court the power to determine the extent or nature
of the changes as to their structure, distribution and jurisdiction, before the clear intent
to abolish them, or to declare them so abolished, is given effect, would be to allow undue
interference in the function of legislation. This would be contrary to the primary duty of
courts precisely to give effect to the legislative intent as expressed in the law or as may
be discovered therefrom. LibLex
From the above observation, it would be futile to insist that the present courts would not
effectively be abolished by the Act in question. It might be to arrogate power for Us to
say that the changes the law brings to the present judicial system, do not suffice for this
Court to give effect to the clear intent of the legislative body. Where would the agrarian
courts, the circuit criminal courts, the JDRC's be in the judicial structure as envisioned by
the law? Are they not abolished by merger with the regional trial courts, which by such
merger, and by the other changes introduced by the law, would make said courts
different from the present Courts of First Instance which, as a consequence, may then be
considered abolished? Integrated as the present courts are supposed to be, changes
somewhere in the judicial machinery would necessarily affect the entire system.
The fact that the Supreme Court may specially assign courts to function as the special
courts just mentioned, does not mean that the changes wrought are only superficial or
"cosmetic" as this term has been used so often in the oral argument. Without the new
law, these courts will remain fixed and permanent where they are at present. Yet in the
course of time, the need for their independent existence may disappear, or that by
changed conditions, where they are needed at present at a certain place, the need for
them may be somewhere else in later years, if maximum benefit at the least expense is
to be achieved, as always should be a most desirable goal and objective of government.
Demonstrably then, the abolition of the courts is a matter of legislative intent into which
no judicial inquiry, is proper, except perhaps if that intent is so palpably tainted with
constitutional repugnancy, which is not so in the instant case. We have, therefore, no
occasion, as earlier intimated, to speak of removal of judges when the reorganization of
the judiciary would result in the abolition of the courts other than the Supreme Court and
the Court of Tax Appeals. Hence, the provision of theConstitution giving to the Supreme
Court power to dismiss a judge by a vote of eight justices does not come into the vortex
of the instant controversy. Its possible violation by the assailed statute cannot happen,
and may, therefore, not constitute an argument against the constitutionality of the law.
Former Justice Barrera, in a speech before the Philippine Bar Association, 3 impliedly
indorsed the judicial revamp when he enumerated the qualities of a good judge that the
appointing power should consider in making new appointments to the judiciary upon its

reorganization pursuant to the questioned Act. The words of the eminent jurist may well
reflect the favorable reaction of the public in general to what the Act aims to achieve in
the name of good and clean government. The present judicial incumbents, who have not
in any way, by their acts and behavior while in office, tarnished the good image that the
judiciary should have, therefore, have no cause for apprehension that what they are
entitled to under theConstitution by way of security of tenure will be denied them,
considering the publicly known aim and purpose of the massive judicial revamp, specially
as cherished with deep concern by the President who initiated the move when he created
the Judiciary Reorganization Committee to recommend needed and appropriate judicial
reforms.
If the only obstacle to a verdict in favor of constitutionality of the law is its possible effect
of impairing the security of tenure of the incumbents, We may have the following facts to
consider:
1. Under the 1973 Constitution all incumbent judges and justices may continue in office
until replaced or reappointed by the President. As to those judicial officials, no security of
tenure, in the traditional concept, attaches to their incumbency which is, in a real sense,
only a hold-over tenure. How the President has exercised this immense power with
admirable restraint should serve as the strongest guarantee of how justice and fairness
will be his sole guide in implementing the law.
2. As to the rest of the incumbents, they are all appointees of Our present President, and
he should feel concerned more than anyone else to protect whatever rights they may
rightfully claim to maintain their official standing and integrity. They need have no fear of
being ignored for no reason at all, much less for mere spirit of vindictiveness or lack of
nobility of heart.
From the foregoing, it would become apparent that only in the implementation of the law
may there possibly be a taint of constitutional repugnancy, as when a judge of
acknowledged honesty, industry and competence is separated, because an act of
arbitrariness would thereby be committed, but the abolition of the courts as decreed by
the law is not by itself or per seunconstitutional.
Consequently, the law, the result of serious and concerned study by a highly competent
committee, deserves to be given a chance to prove its worth in the way of improving the
judiciary. If in its implementation, any one, if at all, feels aggrieved, he can always seek
judicial redress, if he can make out a case of violation of his right of security of tenure
with uncontrovertible clarity, as when the separation is very arbitrary in the peculiar
circumstances of his case, for an act of arbitrariness, under anyconstitution, is
unpardonable.
II
This petition should also be dismissed for being premature, as is the stand of Justice
Aquino. The petition asks this Court to exercise its power of judicial inquiry, the power to
declare a law unconstitutional when it conflicts with the fundamental law (People vs.
Vera, 65 Phil. 56). This power has well-defined limits, for it can be exercised only when
the following requisites are present, to wit: (1) There must be an actual case or
controversy; (2) The question of constitutionality must be raised by the proper party; (3)
He should do so at the earliest opportunity; and (4) The determination of the
constitutionality of the statute must be necessary to a final determination of the case.

I am of the opinion that the petition does not present an actual controversy nor was it
filed by the proper parties. LexLib
The main ground for which the constitutionality of the Judiciary Reorganization Act of
1980 is assailed is that it is violative of the security of tenure of justices and judges. The
only persons who could raise the question of constitutionality of the law are, therefore,
the actual incumbents of the courts who would be separated from the service upon the
abolition of the courts affected by the law, on the theory as advanced by petitioners that
their judicial security of tenure would be violated. Olongapo City Judge de la Llana, the
only judge among the petitioners, has not been separated from the service. Nor is his
separation already a certainty, for he may be appointed to the court equivalent to his
present court, or even promoted to a higher court. Only when it has become certain that
his tenure has been terminated will an actual controversy arise on his allegation of a fact
that has become actual, not merely probable or hypothetical.
The present petition may neither be allowed as a taxpayer suit. A taxpayer may bring an
action to raise the question of constitutionality of a statute only when no one else can
more appropriately bring the suit to defend a right exclusively belonging to him, and,
therefore, would localize the actual injury to his person, and to no other. For a "proper
party" to invoke the power of judicial inquiry, as one of the requisites in the exercise of
such power, does not mean one having no better right, one more personalized, than
what he has as a member of the public in general. With the incumbent judges
undoubtedly being the ones under petitioners' theory, who would suffer direct and actual
injury, they should exclude mere taxpayers who cannot be said to suffer as "direct" and
"actual" an injury as the judges and justices by the enforcement of the assailed statute,
from the right to bring the suit.
The validity of the foregoing observation becomes more evident when We consider that
only after the fate of the present incumbents is known, whether they have been actually
separated or not, would the present courts be declared abolished. For the law clearly
continues their existence until all the new courts have been filled up with new
appointments, or at least such number as would be equal to the number of actual
incumbents, and they are the very courts to which they may lay claim to the right to
continue therein, so that the status of each and everyone of them has thereby been
made certain. Only then, upon the actual abolition of the courts, may there possibly be a
violation of the security of tenure; as contended, that would give rise to an "actual
controversy" in which the "proper party" can be no other than the judges who feel
aggrieved by their non-appointment to the new courts.
It would, therefore, not be proper to declare the law void at this stage, before it has even
been given a chance to prove its worth, as the legislature itself and all those who helped
by their exhaustive and scholarly study, felt it to be an urgent necessity, and before any
of the proper parties who could assail its constitutionality would know for a fact, certain
and actual, not merely probable or hypothetical, that they have a right violated by what
they could possibly contend to be an unconstitutional enforcement of the law, not by a
law that is unconstitutional unto itself.
I am, therefore, for giving the law a chance to be put into application so as not to douse
great popular expectations for the courts to regain their highest level of efficiency had
reputation for probity. Inevitably, this is to be so since only when the law is fully
implemented will all the courts affected be declared abolished, undoubtedly to avoid an
interregnum when the country is without any court, except the Supreme Court, the Court
of Tax Appeals and the Sandigan. Only then will it be known whether an actual

controversy would arise because any of the incumbents have been left out in the
restructured judiciary.
There would then be also a proper party to assail the constitutionality of the law,
conformably to the conditions requisite for the exercise of the power of judicial inquiry
which by their stringent character, together with the constitutional prescription of a
comparatively higher vote to declare a law unconstitutional, reveal a salutary principle of
government that a law should, by all reasonable intendment and feasible means, be
saved from the doom of unconstitutionality, the rule corollary thereto being that if a law
is susceptible to two interpretations, one of which would make it constitutional that
interpretation should be adopted that will not kill the law.
It is to adhere to the above principles that the submission is made herein, that while in
the implementation of the law, constitutional repugnancy may not entirely be ruled out,
a categorical ruling hereon not being necessary or desirable at the moment, the law
itself is definitely not unconstitutional. 4 Any of the incumbent judges who feel injured
after the law shall have been implemented has adequate remedy in law, with full relief
as would be proper. But surely, the benefits envisioned by the law in the discharge of one
of the basic duties of government to the people the administration of justice should
not be sacrificed, as it would be, if the law is, as sought in the present petition, declared
void right now, on the claim of a few being allegedly denied a right, at best of doubtful
character, for the claim would seem to rest on an unsupportable theory that they have a
vested right to a public office.
Just one more point. The law in question is not self-executing in the sense that upon its
effectivity, certain judges and justices cease to be so by direct action of the law. This is
what distinguishes the Act in question from R.A. No. 1186 involved in the Ocampo
case, 5 which by its direct action, no act of implementation being necessary, all the
judges whose positions were abolished, automatically ceased as such. The Act in
question, therefore, is not as exposed to the same vulnerability to constitutional attack
as R.A. No. 1186 was. Yet by the operation of the Constitution with its wise provision on
how a law may be declared unconstitutional, R.A. No. 1186 stood the test for it to be
enforced to the fullness of its intent, which was, as in the law under consideration,
identified with public interest and general welfare, through a more efficient and effective
judicial system as the Judiciary Reorganization Act of 1980 seeks to establish.
Hence, the constitutionality of the law should not be assailed, and the law itself, striken
down, on the ground that some judges or justices may be removed or separated in
violation of their security of tenure. The law does not directly operate with that effect. It
is in how the law would be implemented that this feared eventuality may or may not
occur. We would then be killing the law on a mere speculation if We do so at this stage.
This would be an injudicious act done in reckless disregard of the safeguards built around
a law to defend it when its constitutionality is attacked; first, the presumption that a law
is constitutional; second, when a law is susceptible to two interpretations one that would
make it constitutional, the other, unconstitutional, the former should be adopted;
and third, the Constitution itself which ordains that a law may not be declared
unconstitutional except on the vote of at least ten (10) members of the Supreme Court,
more than what is required for an ordinary decision of the Court en banc. This is not to
mention the stringent requisites for the exercise of the power of judicial inquiry as
already adverted to, all designed to save the law from the dire fate of
unconstitutionality. cdphil

To the writer, the question before this Court is a simple matter of choosing between
protecting some judges from possible separation, as the implementation of the law to
achieve its primary purpose of improving the judiciary may have to result in, or serving
the interest of the entire society through an honest, efficient and effective judiciary. For,
it is unthinkable that what is for the good of the people as a whole could have been
meant by the Constitution to be sacrificed for the sake of only a few. The greatest good
for the greatest number is an unwritten rule, more firm and enduring than any of the
postulates spread in our written Constitution. This, I might say, is the main theme of this
separate opinion, otherwise expressed in the well-known and a time-honored maxim:
"Salus populi est suprema lex."

MELENCIO-HERRERA, J ., concurring:
There is unqualified adherence on my part to the dismissal of the Petition filed in this
case. If I am writing this separate concurrence, it is merely to state certain views I
entertain in regards to the constitutionality of Batas Pambansa Blg. 129.
The controversy in this case involves two constitutional provisions. Article X, Section 1, of
the Organic law provides that the legislative has the power to establish inferior Courts by
law. Section 7 of the same Article reads:
"SEC. 7. The Members of the Supreme Court and judges of inferior 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. The
Supreme Court shall have the power to discipline judges of inferior courts
and, by a vote of at least eight Members, order their dismissal."
There should be no conflict between the two provisions. Both should be harmonized.
1. a) It is a fundamental proposition that the legislative power to create Courts ordinarily
includes the power to organize and to reorganize them, and that the power to abolish
Courts is generally coextensive with the power to create them. The power to abolish was
not intended to be qualified by the permanence of tenure (Opinion of Chief Justice
Ricardo Paras in Ocampo vs. Secretary of Justice, 51 O.G. 147 [1955], citing McCulley vs.
State, 53 SW 134; Halsey vs. Gaines, 2 Lea 316). The right of Judges to hold office during
good behavior until they reach the age of 70 years, or become incapacitated to
discharge the duties of their office, does not deprive Congress of its power to abolish,
organize or reorganize inferior Courts (Brillo vs. Enage, 94 Phil. 732, 735, citing Zandueta
vs. de la Costa, 66 Phil. 615; 42 Am. Jur., Pub. Officer, 904-5). Judges of those Courts take
office with that encumbrance and knowledge.
"The legislative power to create a court carries with it the power to abolish
it. When the court is abolished any unexpired term is abolished also. The
judge of such court takes office with that encumbrance and knowledge.
Perkins v. Corbin, 45 Ala. 103, 6 Am. Rep. 698, State, ex rel. Thomas v.
Gunter, 170 Ala. 165, 54 So 283, et al."
The importance and the imperative of maintaining the independence of the Judiciary is
undisputed. At the same time, the power of Congress under the Constitution cannot be
abridged. For, in the last analysis, it is not the security of tenure per sethat is the only
safeguard to the independence of the Judiciary. It is the character and the mettle of the
Judges who sit on the Bench. Has not the impression been created in the public mind

that there are those who have abused the prerogatives of their judicial position knowing
that they are untouchables by virtue of the permanence of their tenure?
b) A distinction should be made between tenure of Judges and tenure of Courts. Section
1 heretofore mentioned refers to the "Judiciary" as a fundamental department of
Government. Section 7 quoted above refers to the tenure of office of "individual" Judges
(inclusive of Justices of inferior Courts); that is to say, tenure of office is a matter
concerning the individual Judge. This "individuality" character of Section 7 is supported
by the clause that the Supreme Court has the power to discipline individual judges of
inferior Courts.
A legislature is not bound to give security of tenure to Courts. Courts can be abolished. In
fact, the entire judicial system can be changed. If that system can no longer admit of
change, woe to the wheels of progress and the imperatives of growth in the development
of the Judiciary. To hold that tenure of Judges is superior to the legislative power to
reorganize is to render impotent the exercise of that power.
It may even be stated that, under Section 7, supra, Judges are entailed to their Courts,
from which they cannot be separated before retirement age except as a disciplinary
action for bad behavior. Under Section 1, Courts are not entailed to their Judges, because
the power of the legislative to establish inferior Courts presupposes the power to abolish
those Courts. If an inferior Court is abolished, the Judge presiding that Court will
necessarily have to lose his position because the abolished Court is not entailed to him.
c) The constitutional guarantee of tenure of Judges applies only as their Courts exist. As
long as those Courts exist, the Judges cannot be ousted without just cause; that is the
extent of the constitutional provision relative to security of tenure of Judges. Upon
declaration of the completion of the reorganization as provided for in the Reorganization
Act, the affected Courts "shall be deemed automatically abolished." There being no
Courts, there are no offices for which tenure of Judges may be claimed. By the abolition
of those offices, the rights to them are necessarily extinguished (Manalang vs.
Quitoriano, 94 Phil. 903 [1954]).
2. I am satisfied that the challenged law was enacted by the Batasang Pambansa in
response to an urgent and pressing public need and not for the purpose of affecting
adversely the security of tenure of all Judges or legislating them out to the detriment of
judicial independence. It should not be said of the Batasang Pambansa that its power of
abolition of Courts has been used to disguise an unconstitutional and evil purpose to
defeat the security of tenure of Judges. The Judiciary Reorganization Act of 1981
sufficiently complies with the bona fide rule in the abolition of public office, as clearly
explained in the main opinion. Besides, every presumption of good faith in its actuations
must be accorded a coordinate and coequal branch of government, supreme within the
limits of its own sphere, until that presumption is clearly overcome. There is no showing
that the Reorganization Act was motivated for personal or political reasons as to justify
the interference by the Court (Garvey vs. Lowell, 199 Mass 47, 85 N.E. 182, 127 A.S.R.
468; State vs. Eduards, 40 Mont. 287; 106 Pac. 695, 19 R.C.L. 236; Llanto vs. Dimaporo,
16 SCRA 599 [1966]). Public interest and public good, as the legislative body views it,
must be balanced with tenure of Judges, which is an individual right. Reverting to Section
1 and Section 7, supra, the former is the weightier, because the "Judiciary" is of more
importance to the welfare of the country than the tenure of office of an individual Judge.
If a Judge is removed without cause, there can be damage to the public welfare to some
extent, but maintenance of a Court that does not meet the requirements of progressive
Government, can cause incalculable prejudice to the people.

3. Nor does a conflict exist with the power of discipline vested in the Supreme Court by
the present Constitution reading: the Supreme Court shall have the power "to discipline
Judges of inferior Courts, and, by a vote of at least 8 members, order their dismissal."
Absent the Court, it would be futile to speak of the Supreme Court's power to discipline.
Thus, where the legislature has willed that the Courts be abolished, the power to
discipline cannot pose an obstacle to the abolition. The power to discipline can come into
play only when there is removal from an existing judicial office, but not when that office
is abolished. The reorganization of the judicial system with the abolition of certain Courts
is not an exercise of the power to discipline the Judges of the abolished Courts.
It is of significance to note that the power of dismissal vested in the Supreme Court by
the 1973 Constitution is delimited by its power to discipline. Absent any need for
discipline and the power to dismiss does not exist. Being circumscribed in scope, it may
well be asked: does the grant of the power of discipline and dismissal in the Supreme
Court deprive the executive of the power of removal? Is it not more in keeping with the
allocation of powers in our government to state that the Supreme Court shares its power
to dismiss with the executive power of removal? For is not the power of removal basically
executive in nature, as an incident to the power of appointment, which is the prerogative
of the Chief Executive alone? As in the case of appointments, Section 5(6), Article X of
the Constitution provides that the Supreme Court shall appoint its officials and
employees. However, is not this power shared with the power of appointment of the
executive who appoints some of the Court officials? These questions could lend
themselves to an in-depth study in the proper case.
4. The abolition would be no deprivation either of due process of law. A public office
cannot be regarded as the "property" of the incumbent. A public office is not a contract
(Segovia vs. Noel, 47 Phil. 543 [1925]). A public office is a public trust (Section 1, Article
XIII, 1973 Constitution). It is a privilege in the gift of the State (Brown vs. Russel, 166
Mass. 14, 43 NE 1005, 32 LRA 253 cited also in Taada & Carreon, Political Law of the
Philippines, Vol. 2, p. 537). The officers are the servants of the people and not their rulers
(22 R.C.L. 378-379, cited in Martin, Administrative Law, Law on Public Officers and
Election Law, p. 112, 1970 ed.). Besides, it bears stressing that there is no removal from
office but abolition of the office itself.
5. The questioned statute is in keeping with major reforms in other departments of
government. "The thrust is on development." It is "the first major reorganization after
four generations." It does not provide for a piecemeal change, which could be ineffective.
It goes to the roots and does not just scratch the surface of our judicial system. Its main
objectives are an improved administration of justice, the "attainment of more efficiency
in the disposal of cases, a reallocation of jurisdiction, and a revision of procedures which
do not tend to the proper meting out of justice." These aims are policy matters of
necessity in the pursuit of developmental goals within the Judiciary.
6. The Reorganization Act reorganizes the entire judicial system excluding the Supreme
Court, which is the only constitutional Court, and the Sandiganbayan. It envisages
institutional reforms in the Philippine judiciary. It does not simply change the names of
the Courts. The facts herein are dissimilar from those in Brillo vs. Enage (94 Phil. 732
[1954]) where the position of Justice of the Peace, although ostensibly abolished, was
merely changed to Municipal Judge after the municipality of Tacloban was converted into
a city with its own charter.
Significant among the institutional changes and procedural reforms are:

The Intermediate Appellate Court

This Court is now constituted into ten (10) divisions instead of fifteen (15), five members
composing each division, and a majority vote of three members being needed for a
decision. This obviates the cumbersome procedure, in case of dissent, of assigning two
other members to compose a "division of five." It also allows flexibility in that any three
members of a division, arriving at unanimity, can promulgate a decision. LLjur
Now provided for is specialization into four (4) Civil Cases Divisions, two (2) Criminal
Cases Divisions and four (4) Special Cases Divisions. The specialization is expected to
contribute to the expeditious disposal of cases.
The Court has been given original jurisdiction to issue Writs of mandamus, prohibition,
certiorari, habeas corpus, quo warranto and auxiliary writs or processes whether or not in
aid of its appellate jurisdiction. This would undoubtedly ease the burden of the Supreme
Court where numerous such cases are filed daily.
It has exclusive appellate jurisdiction over all final judgments, decisions, resolutions,
orders or award of quasi-judicial agencies, instrumentalities, boards or commissions,
except those falling within the exclusive appellate jurisdiction of the Supreme Court in
accordance with the Constitution.
The Intermediate Appellate Court would now have the power to try cases and conduct
hearings, receive evidence and perform any and all acts necessary to resolve factual
issues raised in cases falling within its original and appellate jurisdiction, including the
power to grant and conduct new trials or further proceedings (Sec. 9). This does away
with the delays attendant to the remand of cases to the lower trial Courts.
Regional Trial Courts
There are now thirteen (13) Judicial Regions, the same as the present administrative and
Batasang Pambansa Regions, instead of sixteen (16) Judicial Districts.
A Judge is appointed to a region, which is his official station. This ensures mobility since a
Judge may be assigned anywhere within the Region without applying the constitutional
limitation of six months. Additionally, it can remedy temporary inequalities of caseloads
in trial Courts.
Specialized Courts are integrated into the Regional Trial Courts. Thus, Regional Trial
Courts would try all cases within its jurisdiction unless special cases are assigned to
them, in which case, they remain as Branches of Regional Trial Courts. Special
procedures and technical rules governing special Courts will continue to remain
applicable in Branches assigned those special cases.
Metropolitan Trial Courts
There is one Metropolitan Trial Court with several Branches for large urban areas. The
appointment of Judges would be to a Metropolitan Trial Court, although a Judge may be
assigned by the Supreme Court to any Branch of the Metropolitan Trial Court as
demanded by the exigencies of the service.
The Supreme Court may designate certain Branches of said Courts to exercise special
jurisdiction over certain cases, unlike the present set-up where special jurisdiction
applies only to cases of traffic violations.
Municipal Trial Courts/Municipal Circuit Trial Courts

Municipal Trial Courts may now be designated by the Supreme Court to exercise special
jurisdiction over certain cases, thereby resulting in overall flexibility. They can also be
circuitized with those in cities not forming part of metropolitan areas.
One notable change between the old and the new set-up is that Judges of these Courts
will now be Presidential appointees unlike presently where the incumbent Judges are
merely designated by the Supreme Court in an Administrative Order to sit in existing
Municipal Courts and Municipal Circuit Courts.
7. There are innovative features in the Act that commend themselves:
a) The confusing and illogical areas of concurrent jurisdiction between the trial Courts
have been entirely eliminated.
b) Under Section 39, there is a uniform period for appeal of fifteen (15) days counted
from the notice of the final order, resolution, award, judgment, or decision appealed
from.
A record on appeal is no longer required to take an appeal. The entire original record is
now to be transmitted.
c) Under Section 40, in deciding appealed cases, adoption by reference of findings of fact
and conclusions of law as set forth in the decision, order, or resolution appealed from, is
also provided for. This will expedite the rendition of decisions in appealed cases.
d) Section 42 provides for "a monthly longevity pay equivalent to 5% of the monthly
basic pay for Justices and Judges of the courts herein created for each five years of
continuous, efficient, and meritorious service rendered in the Judiciary, Provided that, in
no case shall the total salary of each Justice or Judge concerned, after this longevity pay
is added, exceed the salary of the Justice or Judge next in rank." Thus, Justices and
Judges who may not reach the top, where unfortunately there is not enough room for all,
may have the satisfaction of at least approximating the salary scale of those above him
depending on his length of service.
8. But while the law itself as written is constitutional, the manner in which it will be
administered should not be tainted with unconstitutionality (Myles Salt Co. vs. Board of
Commrs., 292 US 478, 60 L. Ed. 392, 36 Sct 204). To obviate the possibility of an
unconstitutional exercise of power the following safeguards are recommended and/or
expected to be undertaken:
a) The President can be expected to indicate a reasonable time frame for the completion
of the reorganization provided for in the Act and the issuance of the corresponding
implementing Order.
b) Appointments and their effectivity should be simultaneous with, or as close as
possible, to the declaration by the President of the completion of the reorganization
under Section 44 to avoid any detriment to the smooth and continuous functioning of the
judicial machinery. cdasia
c) The services of those not separated should be deemed uninterrupted,
recommended by the Committee on Judicial Reorganization (Article XI of its Report).

as

9. For the speedy implementation of the law, the Supreme Court can be expected to
submit to the President within thirty (30) days from the date of finality of its Decision the
staffing pattern for all Courts required by Section 43.

I am constrained to disagree with the suggestion of one of the amici curiae that the
staffing pattern be made to include the names of Judges. The staffing pattern for Judges
is already clearly and explicitly provided in the law itself which enumerates the various
Judges and Justices in their hierarchical order. Furthermore, to include the superior
positions of Judges would depart from the traditional concept of a staffing pattern, which
refers more to personnel organization and corresponding salaries of inferior employees.
It is also constitutionally objectionable in that it would interfere with the prerogative of
appointment intrinsically executive in nature (Guevara vs. Inocentes, 16 SCRA 379
[1966]; Government of the Philippines vs. Springer, 50 Phil. 259 [1927]). The President
may not be deprived of, nor be limited in, the full use of his discretion in the appointment
of persons to any public office. Nothing should so trench upon executive choice as to be,
in effect, judicial designation.
10. A word of explanation. If I had resolved not to inhibit myself in this case upon motion
filed by petitioners, it was because the Committee on Judicial Reorganization, of which I
was privileged to be a member, confined its work to the recommendation of options and
guidelines in the task of reorganization. The Committee had no part whatsoever in the
drafting of the bill nor in the public hearings conducted. In fact, some of its
recommendations like the circuitization or regionalization of the Intermediate Appellate
Court, the appellation of members of the Judiciary, the confinement of the jurisdiction of
the Intermediate Appellate Court merely to appellate jurisdiction, the adoption of the
system found in the United Kingdom and in Commonwealth countries of having a Court
of general jurisdiction with trial and appellate divisions, were not availed of in the final
Act.
11. Lastly, but by no means the least, I entertain no doubt that reliance can be placed on
the good faith of the President that all the deserving, upon considerations of "efficiency,
integrity, length of service and other relevant factors," shall be appointed to a
strengthened and revitalized judicial system in the interest of public service; that
appointments will not be unduly delayed: and that appointees will be evaluated
thoroughly to ensure quality and impartiality in the men and women who will keep vigil
over our judicial ramparts.
ERICTA, J ., concurring:
I concur in the view that Judiciary reorganization law is not unconstitutional. It does not
violate the principle of security of tenure of Judges.
The constitution grants to the Batasang Pambansa the power to create courts inferior to
the Supreme Court (Article X, Section 1). All existing inferior courts were created by law.
No law is irrepealable. The power to create an office includes the power to abolish the
same. (Urgelio vs. Osmea, 9 SCRA 317; Maza vs. Ochave, 20 SCRA 142). prLL
Security of tenure cannot be invoked when there is no removal of a public officer or
employee but an abolition of his office. (Manalang vs. Quitoriano, 94 Phil. 903; Cruz vs.
Primicias, 23 SCRA 998; Baldoz vs. Office of the President, 78 SCRA 354, 362) A
distinction should be made between removal from office and abolition of an office.
Removal implies that the office subsists after ouster, while, in abolition, the office no
longer exists thereby terminating the right of the incumbent to exercise the rights and
duties of the office. (Canonigo vs. Ramiro, 31 SCRA 278)

The power of the legislative branch of the government to abolish courts inferior to the
Supreme Court has long been established. (Ocampo vs. Secretary of Justice, 51 O.G. 147)
What is only needed is that the abolition passes the test of good faith. It need only be
shown that said abolition of the courts is merely incidental to a bona fide reorganization.
(Urgelio vs. Osmea, supra)
It is unthinkable to impute bad faith to the Presidential Committee on Judicial
Reorganization composed of four (4) distinguished members of the Supreme Court, the
Minister of Justice and the Deputy Minister of Justice, and to the members of the
Batasang Pambansa whose combined efforts after a careful study and deliberation
resulted to the enactment of a bill now signed into law as Batasang Pambansa Blg. 129.
In his sponsorship speech, Justice Ricardo C. Puno declared the objectives of the Judiciary
Reorganization Law to be the following: (1) the attainment of more efficiency in the
disposal of cases; (2) the improvement in the quality of decisions by the courts that will
result from the easing of court dockets; and (3) structural changes to meet the
exigencies of present day Philippine Society and of the foreseeable future.
Admittedly, in the implementation of the law, some Judges and Justices may be
adversely affected. But in a conflict between public interest and the individual interest of
some Judges and Justices, the public weal must prevail. The welfare of the people is the
supreme law.
The implementation of the law will entail appointments to the new courts. The power of
appointment is the exclusive prerogative of the President. The implementation of the law
should be left exclusively to the wisdom, patriotism and statesmanship of the
President. llcd
PLANA, J ., concurring and dissenting:
As the lawmaking body has the power to create inferior courts and define, prescribe and
apportion their jurisdiction, so it has the power to abolish or replace them with other
courts as long as the act is done in good faith and not for the purpose of attaining an
unconstitutional end. Good faith has thus become the crucial issue in the case at bar.
Upon an examination of the legislative history of Batas Pambansa 129, as has been done
in the main opinion, it is manifest that actual, not merely presumed good faith attended
its enactment. On this basis, I concur in the opinion penned by the learned Chief Justice,
qualified only by the following observations:
1. Executive consultation with the Supreme Court. I believe the President is under no
obligation to consult with the Supreme Court; and the Supreme Court as such is not
called upon to give legal advice to the President. Indeed, as the Supreme Court itself has
said, it cannot give advisory opinions (Bacolod-Murcia Planters' Asso., Inc. vs. BacolodMurcia Milling Co., 30 SCRA 67; NWSA vs. Court of Industrial Relations, 90 SCRA 629)
even to the President.
In the drafting of the present Constitution, there was an attempt to vest the Supreme
Court with the function of giving advisory opinions. The framers of the Constitution,
however, did not see fit to adopt the proposal.
If the President should consult the Supreme Court on the implementation of Batas
Pambansa 129 and the Supreme Court should give its advice (leaving aside the question
of procedure), I believe the President would be free to follow or disregard the advice; but,
in either case, there would be no guarantee that the implementing action would be
upheld in one case or stricken down in the other.

2. Undue delegation of legislative powers.

The petitioners have also assailed the constitutionality of Batas Pambansa 129 on the
ground that a provision thereof (regarding fixing of compensation and allowances for
members of the Judiciary) constitutes an undue delegation unto the President of
legislative power.
As pointed out in the main opinion, the legislature has provided ample standards or
guidelines for the implementation of the delegated power, which makes the delegation
inoffensive. I would like to add however some observations on the doctrine of undue
delegation of legislative power.
Under the old Constitution, when the abiding rule was separation of legislative and
executive powers, there was good reason to maintain the doctrine of non-delegation of
legislative power. Otherwise, the principle of separation of governmental powers could
be negated via unbridled delegation of legislative power. The 1973 Constitution has
however radically changed the constitutional set-up. There is now a commingling or
fusion of executive and legislative powers in the hands of the same group of officials.
Cabinet members play a leading role in the legislative process, and members of the
Batasan actively discharge executive functions. The Prime Minister indeed must come
from its ranks. Under the circumstances, there is really not much sense in rigidly
upholding the principle of non-delegation of legislative power, at least vis-a-vis the
Executive Department. In a very real sense, the present Constitution has significantly
eroded the hoary doctrine of non-delegation of legislative power, although it has retained
some provisions of the old Constitution which were predicated on the principle of nondelegation, this time perhaps not so much to authorize shifting of power and thereby
correspondingly reduce the incidence of "undue" delegation of legislative power, as to
avert the abdication thereof.
"In times of war or other national emergency, the Batasang Pambansa 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 Batasang Pambansa, such powers shall cease upon its next
adjournment." (Art. VIII, Sec. 15.)
"The Batasang Pambansa may by law authorize the President to fix within
specified limits, and subject to such limitations and restrictions as it may
impose, tariff rates, import and export quotas, tonnage and wharfage dues,
and other duties or imposts." [Ibid., Sec. 17(2).]
TEEHANKEE, J ., dissenting:
Undoubtedly, no more crucial and transcendental issue of such magnitude has
confronted the Philippine judiciary than in the present case. The challenged Act, Batas
Pambansa Blg. 129 by its title would reorganize all existing courts (except the ninemember Sandiganbayan 1 and the three-member Court of Tax Appeals) and upon
declaration by the President of the completion of the reorganization would
unprecedentedly deem all the said courts "automatically abolished" en masse and "the
incumbents thereof shall cease to hold office." 2 The total abolition involves a total of
1,663 judicial positions with 1,180 incumbent judges (and 483 vacancies) as of January
26, 1982 and the Act would effect an increase of 230 judicial positions raising the total of
judicial positions to be filled by new appointments to 1,893. Notwithstanding the great
deference due to enactments of the Batasan, I regretably find myself unable to join the

ranks of my esteemed colleagues in the majority who uphold the constitutionality of the
Act and have voted to dismiss the petition, for the following main considerations and
reasons:
1. I go by the ruling of the numerical majority of seven Justices (namely, Pablo, Cesar
Bengzon, Montemayor, Jugo, Bautista, Roberto Concepcion and J.B.L. Reyes, JJ.) in the
leading 1955 case of Ocampo 3 who fell short by one vote to reach the constitutionally
required 2/3 majority (at the time 8 out of an 11-member Supreme Court) to declare
unconstitutional and invalid Section 3 of Republic Act 1186 abolishing the positions of 18
judges-at-large and 15 cadastral judges and removing or legislating out the incumbent
judges from office as against the contrary vote of a minority of 4 Justices (namely, then
Chief Justice Paras and Padilla, Alex Reyes and Labrador, JJ.) with the paradoxical
situation that the last three named Justices voted for the validity of the Act as a remedial
measure that abolished said positions without permanent station which subjected them
to a rigodon de jueces without the consent of the Supreme Court, which they considered
as "repulsive to an independent judiciary" and violative of an express prohibitory
provision of the 1935 Constitution while Justice Alex Reyes conceded that otherwise he
would go with the majority that "Congress may not, as a general rule, abolish a judicial
post without allowing the incumbent to finish his term of office."
2. As then Associate, later Chief Justice Cesar Bengzon remarked in his separate opinion
"(T)he [adverse] outcome of this litigation [sanctioning the ouster from office of the
ten petitioners who were presiding different Courts of First Instance, some as judges-atlarge, others as cadastral judges, upon the enactment on June 19, 1954 of R.A.
1186 abolishing the positions of judges-at-large and cadastral judges] is apt to revive the
speculation whether wittingly or unwittingly theConstitution has further weakened the
usually weak judicial department because of its 'innovative' requirement of a 2/3
majority vote of the Supreme Court to declare a statute unconstitutional, and 'never in
our history has such a number of judges of first instance [totalling 33 positions] been
ousted through judicial reorganization.'"
His rationale that the express constitutional guaranty of security of tenure of judges
"during good behavior until they reach the age of seventy years or become incapacitated
to discharge the duties of their office" 4 must prevail over the implied constitutional
authority to abolish courts and to oust the judges despite their constitutionally-secured
tenure bears repeating, thus:
"A careful analysis will perceive that whereas petitioners invoke
an express guaranty or positive definition of their term of office, the
respondents rely on implied authority to abolish courts and the positions of
the respective judges. Accurately stated, respondents' defense rests on
a second inference deduced from such implied power, because they reason
out thusly: Congress has express power to establish courts; therefore it has
implicit power to abolish courts and the positions of judges of such
abolished courts (first inference); and therefore (second inference)
Congress likewise has power to eject the judges holding such positions.
"Resultant juridical situation: The implied authority invoked by respondents
collides with the express guaranty of tenure protecting the petitioners.
Which shall prevail? Obviously the express guaranty must override the
implied authority. 'Implications can never be permitted to contradict the
expressed intent or to defeat its purpose.'. . .

xxx xxx xxx

"But the collision may be-should be-avoided, and both sections given
validity, if one be considered a proviso or exception to the other. In other
words, under the Constitution the Congress may abolish existing courts,
provided it does not thereby remove the incumbent judges; such abolition
to take effect upon termination of their incumbency. The fundamental
provisions on the matter are thereby 'coordinated and harmonized' as
Justice Laurel suggested in his concurring opinion in Zandueta v. De la
Costa. To bring about the reconciliations is the great work of jurists.
(Cardozo, Paradoxes of Legal Science, p. 6)" 5
3. This reasoning that the express guaranty of tenure protecting incumbent judges
during good behavior unless removed from office after hearing and due process or upon
reaching the compulsory retirement age of seventy years must override the implied
authority of removing by legislation the judges has been further strengthened and
placed beyond doubt by the new provisions of the 1973 Constitution that transferred the
administrative supervision over all courts and their personnel from the Chief Executive
through the then Secretary of Justice to the Supreme Court 6 and vested in the Supreme
Court exclusively "the power to discipline judges of inferior courts and, by a vote of at
least eight members, order their dismissa l," 7which power was formerly lodged by
the Judiciary Act in the Chief Executive.
As former Chief Justice Bengzon stressed in his opinion in Ocampo, the 1934
Constitutional Convention "frowned on removal of judges of first instance through
abolition of their offices or reorganization," citing Professor Jose Aruego's observation
that the security of judges' tenure provision was intended to "help secure the
independence of the judiciary" in that "during good behaviour, they may not be
legislated out of office by the lawmaking body nor removed by the Chief Executive for
any reason and under the guise of any pretense whatsoever; they may stay in office until
they reach the age of seventy years, or become incapacitated to discharge the duties of
their office. (Aruego, the Framing of the Philippine Constitution, Vol. II, pp. 718-719)" He
further cited Aruego's report that a proposed amendment to the effect that the
prohibition against transfers of judges to another district without the approval of the
Supreme Court 8 "should not be applicable to a reorganization of tribunals of justice or of
districts, but the amendment was defeated easily without debate" 9 and logically
concluded that "(N)ow, therefore, having vetoed the transfer of judges thru a
reorganization, the Convention evidently could not have permitted the removal of judges
thru re-organization." cdasia
Now, if the framers of the 1973 Constitution wished to dispel the strong doubts, to say
the least in the light of the 7 to 4 vote in the Ocampo case against removal of incumbent
judges through legislative action by abolition of their courts, then they would have so
clearly provided for such form of removal in the 1973 Constitution, but on the contrary as
already stated they ruled out such removal or ouster of judges by legislative action by
vesting exclusively in the Supreme Court the power of discipline and removal of judges
of all inferior courts.
4. This being so, the fundamental point emphasized by former Chief Justice Bengzon that
abolition of the 33 judicial positions in the Ocampo case was "merely an indirect manner
of removing the petitioners-judges" while the "positions [that] were eliminated . . . were
in fact substituted or replaced by other positions of judges" applies with greater force in
the case at bar which involves an unprecendented total "abolition," thus: "(C)all it

reorganization, or legislation or removal or abolition, this law disregards the

constitutional assurance that these judges, once appointed, shall hold office during good
behaviour . . . unless incapacitated and until retirement].
"The abolition of their offices was merely an indirect manner of removing
these petitioners. Remember that on June 19, 1954, there were 107 judges
of first instance, district judges, judges-at-large and cadastral judges (Rep.
Act 296). After the passage of Republic Act No. 1186 there were 114
positions of judges of first instance. There was no reduction-there was
increase-in the number of judges, nor in the number of courts. The
positions of Judges-at-Large and Cadastral Judges were eliminated; but they
were in fact substituted or replaced by other positions of judges; or if you
please, there was a mere change of designation from 'Cadastral Judge or
Judge-at-Large' to 'district judge.' Hence it should be ruled that as their
positions had not been 'abolished' de facto, but actually retained with
another name, these petitioners are entitled to remain in the service. (Brillo
v. Enage, G.R. No. L-7115, March 30, 1954.) For it is not permissible to
effect the removal of one judge thru the expediency of abolishing his-office
even as the office with same power is created with another name. (Brillo v.
Enage, Malone v. Williams, 118 Tenn. 391, Gibbe's Case 4 A.L.R., p. 211) in
this view of the picture, we believe, Congress could have, and should haveas suggested by Secretary Tuazon during the hearings in Congress-directed
in saidRepublic Act No. 1186 that 'the present judges-at-large and cadastral
judges shall become district judges presiding such districts as may be fixed
by the President with the consent of the Commission on Appointments;' or
by the Secretary of Justice, as originally proposed by Senator Laurel in
connection with the same bill. Something similar was done before, and it
would not be objectionable as an encroachment on the President's
prerogative of appointment, because such judges had already been
appointed to the judiciary before the passage of the act, and the provision
may be construed in the light of mere change of official designation plus
increase in salary."
5. Concededly, the questioned Act effects certain changes and procedural reforms with
more specific delineation of jurisdiction as mentioned particularly in the majority opinion,
but they do not change the basic structure of the existing courts. The present Municipal
Courts, Municipal Circuit Courts and City Courts are restructured and redesignated as
Municipal Trial Courts and Municipal Circuit Trial Courts and Metropolitan Trial Courts in
the challenged Act. The Courts of First Instance, Circuit Criminal Courts, Juvenile and
Domestic Relations Courts and Courts of Agrarian Relations are all restructured and
redesignated to be known by the common name of Regional Trial Courts with provision
for certain branches thereof "to handle exclusively criminal cases, juvenile and domestic
relations cases, agrarian cases, urban land reform cases .. and/or such other special
cases as the Supreme Court may determine in the interest of a speedy and efficient
administration of justice" 10 and the Court of Appeals is restructured and redesignated
as the Intermediate Appellate Court with an increase in the number of Appellate Justices
from the present 45 to 50 but with a reduction of the number of divisions from 15
(composed of 3 Justices each) to 10 (composed of 5 members each) such that it is feared
that there is created a bottleneck at the appellate level in the important task discharged
by such appellate courts as reviewers of facts. Cdpr

In my view, the "candid admission" by the Chief Justice in his opinion for the Court "that
he entertained doubts as to whether the intermediate court of appeals provided for is a
new tribunal" 10a is equally applicable to all the other abovementioned courts provided
for in the challenged Act as "new courts." And the best proof of this is the plain and
simple transitory provision in Section 44 thereof that upon the President's declaration of
completion of the reorganization (whereby the "old courts" shall "be deemed
automatically abolished and the incumbents thereof shall cease to hold office"). "(T)he
cases pending in the old Courts shall be transferred to the appropriate Courts constituted
pursuant to this Act, together with the pertinent functions, records, equipment, property
and the necessary personnel," together with the "applicable appropriations." This could
not have been possible without a specification and enumeration of what specific cases of
the "old courts" would be transferred to the particular "new courts," had these "new
courts" not been manifestly and substantially the "old courts" with a change of name-or
as described by Justice Barredo to have been his first view, now discarded, in his
separate opinion: "just a renaming, and not a substantial and actual modification or
alteration of the present judicial structure or system" or "a rearrangement or remodeling
of the old structure." 11
6. I do not subscribe to the test of good faith or bad faith in the abolition of the courts
and consequent ouster of the incumbent judges from office as expounded by the late
eminent Justice Jose P. Laurel in his separate concurring opinion in the pre-war case
of Zandueta 12 wherein the Court dismissed the petition for quo warranto on the ground
of petitioner Zandueta's estoppel and abandonment of office. 13 Realistically viewed
from the basis of the established legal presumptions of validity and constitutionality of
statutes (unless set aside by a 2/3 majority of 10 members of the Supreme Court) and of
good faith in their enactment, one is hard put to conjure a case where the Court could
speculate on the good or bad motives behind the enactment of the Act without
appearing to be imprudent and improper and declare that "the legislative power of
reorganization (is) sought to cloak an unconstitutional and evil purpose." The good faith
in the enactment of the challenged Act must needs be granted. What must be reconciled
is the legislative power to abolish courts as implied from the power to establish them
with the express constitutional guaranty of tenure of the judges which is essential for a
free and independent judiciary. Adherents of the Rule of Law are agreed that
indispensable for the maintenance of the Rule of Law is a free and independent judiciary,
sworn to protect and enforce it without fear or favor "free, not only from graft,
corruption, ineptness and incompetence but even from the tentacles of interference and
insiduous influence of the political powers that be," to quote again from Justice Barredo's
separate concurring opinion. 14 Hence, my adherence to the 7-member majority opinion
of former Chief Justice Bengzon in the Ocampo case, supra, as restated by the Philippine
Association of Law Professors headed by former Chief Justice Roberto Concepcion that
"any reorganization should at least allow the incumbents of the existing courts to remain
in office [the appropriate counterpart 'new courts'] unless they are removed for cause."
7. The "judges' broader and stronger guarantees of tenure than ordinary civil servants"
as stressed by former Chief Justice Bengzon in his majority opinion in Ocampo is based
on the judiciary's status as a co-equal and coordinate branch of government, whereas
the long line of Philippine cases upholding the legislative power to abolish offices refers
to officers or employees in the executive branch of government and "the underlying
consideration must be borne in mind that Manalang [the aggrieved petitioner] belonged
to the Executive Department and because the President approved the law, no question

or encroachment by one branch on the other could be apprehended or alleged." 15 This

is not a matter of personal privilege for the incumbent judges but as aptly stated by
former U.P. Law Dean Irene Cortez in her memorandum as amicus curiae, "for the
judiciary whose independence is not only eroded but is in grave danger of being
completely destroyed." Dean Cortez aptly stressed that "judicial independence is not a
guarantee intended for the Supreme Court alone, it extends to the entire court system
and is even more vital to the courts at the lowest levels because there are more of them
and they operate closest to the people, "and" (P)articularly under the present form of
modified parliamentary government with legislative and executive functions overlapping
and in certain areas merging, the judiciary is left to perform the checking function in the
performance of which its independence assumes an even more vital importance." cdasia
The extensive memoranda filed by Dean Cortez and other amici curiae, such as former
Senator Jose W. Diokno who strongly urges the Court to strike down the Act "to prevent
further destruction of judicial independence," former Senator Lorenzo Sumulong,
president of the Philippine Constitution Association who advocates for the Court's
adoption of the Bengzon majority opinion in the Ocampo case so as to abide by "the
elementary rule in the interpretation of constitutions that effect should be given to all
parts of the Constitution" and that the judges' security of tenure guaranty should not be
"rendered meaningless and inoperative" former Solicitor General Arturo A. Alafriz,
president of the Philippine Lawyers' Association who submit that the total abolition of all
courts below the Supreme Court (except the Sandiganbayan and the Court of Tax
Appeals) and the removal of the incumbent Justices and Judges "violates the
independence of the judiciary, their security of tenure and right to due process
guaranteed them by the Constitution" and Atty. Raul M. Gonzales, president of the
National Bar Association of the Philippines who invokes the Declaration of Delhi at the ICJ
Conference in 1959, that "The principles of unremovability of the Judiciary and their
Security of Tenure until death or until a retiring age fixed by statute is reached, is an
important safeguard of the Rule of Law" have greatly helped in fortifying my views.
8. I had submitted in my memo of September 4, 1980 to the Presidential Committee on
Judicial Reorganization that "(W)hatever reorganization plans the committee may
recommend to meet the worldwide problem of congested court dockets, and to improve
judicial services in the public interest, it should be borne in mind that the members of
the judiciary as the weakest branch of government, yet called upon to safeguard the
people's rights and protect them from oppression, official and otherwise, are entitled to
security of tenure as guaranteed by the Constitution. Even though the lower courts may
be reshuffled or abolished in the process, the mandate and spirit of
the Constitution guaranteeing their security of tenure and maintaining the independence
of the judiciary should be respected, and they should be retained in the new courts."
In the same vein, Dean Cortez warned of the dire consequences of giving the questioned
provisions of the Act the "absolutist sense which they appear to have at first blush" thus:
"(T)o accept legislative power to abolish courts asserted under Batas Pambansa Blg.
129 which sweeps through practically the entire judiciary would be to open the door to
future court abolitions in the guise of reorganization. At this stage of our political
development, the process of embarking upon a modified parliamentary system may well
usher in a situation where despite guarantees of judicial tenure, each ruling party in the
legislature or any alliance that can command a majority vote may periodically undertake
complete reorganization and remove judges, thus making of the judiciary a veritable
straw in the political wind," and "(F)uthermore, what can result in the modified
parliamentary system from the close working relationship between executive and

legislature is made manifest inBatas Pambansa Blg. 129. If the sweeping revamp
provided were to be carried out the President would appoint all of the justices and judges
of the courts affected and the whole membership in the judiciary from the highest to the
lowest courts would be his appointees. It is relevant to point out that it is precisely a
situation like this that the Constitution seeks to avoid when it provides staggered terms
for the chairman and members of the constitutional commissions which like the judiciary
are guaranteed independence."
9. The judges' security of tenure was rendered nugatory by the Transitory Provisions of
the 1973 Constitution which granted the incumbent President the unlimited power to
remove and replace all judges and officials 16 (as against the limited one-year period for
the exercise of such power granted President Quezon in the 1935 Constitution upon
establishment of the Philippine Commonwealth). Upon the declaration of martial law in
September, 1972, justices and judges of all courts, except the Supreme Court, had been
required to hand in their resignations. There is listed a total of 53 judges who were
replaced or whose resignations were accepted by the President during the period from
September, 1972 to April, 1976. The power to replace even the judges appointed after
the effectivity on January 17, 1973 of the 1973 Constitution is yet invoked on behalf of
the President in the pending case of Tapucar vs. Famador 17 notwithstanding the
generally held view that such post-1973 Constitution appointed judges are not subject to
the Replacement Clause of the cited Transitory Provision. (In this case, petitioner judge
appointed on January 30, 1976 as judge of the Court of First Instance of Agusan del Norte
and Butuan City, Branch I, invoked his constitutional security of tenure and questioned
the appointment extended on February 26, 1980 to respondent to replace him, although
he had not been removed or otherwise dismissed from his position nor had he resigned
thereform. The Court per its March 27, 1980 resolution ordered both to refrain from
discharging the functions of the questioned office.) And now comes this total abolition of
1,663 judicial positions (and thousands of personnel positions) unprecedented in its
sweep and scope. The urgent need is to strengthen the judiciary with the restoration of
the security of tenure of judges, which is essential for a free and independent judiciary as
mandated by the Constitution, not to make more enfeebled an already feeble judiciary,
possessed neither of the power of the sword nor the purse, as decried by former Chief
Justice Bengzon in his Ocampo majority opinion:
"Shall we have judges of the type of Lord Coke? Or judges, who, in his
place, would have answered 'I'll do what his majesty pleases,' judges who,
afraid of ouster thru a judiciary reshuffle, would rather serve the interest of
the party in power or of the political boss, than the interests of justice?
"As it is, the Judicial Department is feeble enough. Shall we render it feebler
with judges precariously occupying their official seats? Judges performing
their duties under the sword of Damocles of future judicial
reorganizations?"
10. The Chief Justice, in his opinion for the Court, equally stressed that "what is equally
apparent is that the strongest ties bind the executive and legislative departments. It is
likewise undeniable that the Batasang Pambansa retains its full authority to enact
whatever legislation may be necessary to carry out national policy as usually formulated
in a caucus of the majority party. It is understandable then why in Fortun
vs. Labang 18 it was stressed that with the provision transferring to the Supreme Court
administrative supervision over the Judiciary, there is a greater need 'to preserve
unimpaired the independence of the judiciary, especially so at present, where to all
intents and purposes, there is a fusion between the executive and the legislative

branches,'" 19 with the further observation that "many are the ways by which such
independence could be eroded." In the cited case of Judge Fortun (likewise penned by
the Chief Justice for the Court), the Court issued a writ of prohibition and certiorari
ordering the dismissal of the criminal complaint filed with respondent fiscal Labang by
"disgruntled members of the bar with a record of losing cases" in the judge's court and
imposed the penalty of censure on each and everyone of the private respondentslawyers for the "unseemly haste" with which they filed the criminal complaint, abetted
by "the appearance of sheer vindictiveness or oppressive exercise of state authority."
The Court marked the "violation of the cardinal principles of fairness and due process
that underlie the Rule of Law. Petitioner-Judge was not heard; he was denied the
opportunity to defend himself against the accusation. There was, on the part of private
respondents then, a failure to abide by a Resolution of the Integrated Bar stressing that
precisely integration could shield 'the judiciary which traditionally cannot defend itself
except within its own forum, from the assaults that politics and self-interest may level at
it, and assist it to maintain its integrity, impartiality and independence,'" and that such
subjection of a judge to public "harassment and humiliation . . . can diminish public
confidence in the courts." LLjur
11. This brings us to the allegedly underlying need for B.P. Blg. 129 discussed in the
course of committee hearings of Cabinet Bill No. 42 and the deliberation on second
reading in the Batasang Pambansa to rid the judiciary of incompetent and corrupt judges
and to restore confidence in the integrity of the courts. The purge has been the constant
subject of headlines and editorials, with the Ministry of Justice's Integrity Council
reportedly screening and conducting "integrity tests" as to new applicants and the
incumbent judges 20 and seeking "confidential information on corrupt and incompetent
judges to help the government purge the judiciary." 21 Prime Minister Cesar Virata was
quoted as saying that "'there will be a purge of the corrupt and the misfits' when the
Judiciary Reorganization Act is signed into law by President Marcos and implemented in
coordination with the Supreme Court." 22 The public respondents' answer sidesteps the
issue of such purge contravening the rudiments of a fair hearing and due process and
submits that "no term of office is sacrosanct when demanded before the altar of the
public good." The metropolitan papers reported the "anxiety gripping the judiciary as the
Ministry of Justice has reportedly been asked to collate information 'on the performance
of the judges and on the qualifications of those slated to take over the positions of the
incompetent, the inefficient or those involved in irregularities.' As stated in an editorial,
'Somehow, the uncertainty that now hovers over the judiciary has unduly subjected the
judges to mental torture since they do not know when or whether the axe will fall on
them. Worse, the sword of Damocles hanging over their heads could provoke them into
seeking the help of people claiming to have influence with the powers that be." 23
But Dean Cortez in her memorandum states that "However, nowhere on public record is
there hard evidence on this. The only figures given in the course of the committee
hearings were to the effect that out of some 1,700 members of the judiciary, between 10
to 15 were of the undesirable category, i.e. misfit, incompetent or corrupt. (Barredo, J.,
before the Committee on Justice, Human Rights and Good Government, December 4,
1980)," and that "(I)f this be the case, the unprecedented, sweeping and wholesale
abolition of judicial offices becomes an arbitrary act, the effect of which is to assert the
power to remove all the incumbents guilty or innocent without due process of law." Nor
would it be of any avail to beg the question and assert that due process is not available
in mass abolitions of courts.

Justice Barredo, however, without citing any hard evidence, refers in his separate
concurrence to twin objectives of getting rid of "structural inadequacies of the system or
of the cumbersomeness and technicality-peppered and dragging procedural rules in
force" and of "a good number of those occupying positions in the judiciary (who) make a
mockery of justice and take advantage of their office for personal ends." He adds that "it
is my personal assessment of the present situation in our judiciary that its reorganization
has to be of necessity two-pronged, as I have just indicated, for the most ideal judicial
system with the most perfect procedural rules cannot satisfy the people and the
interests of justice unless the men who hold positions therein possess the character,
competence and sense of loyalty that can guarantee their devotion to duty and absolute
impartiality, nay, impregnability to all temptations of graft and corruption, including the
usual importunings and the fearsome albeit improper pressures of the powers that
be," 24 and invokes the adage of "grandes males, grandes remedios" to now uphold the
validity of the Act. Cdphil
Former Senator Diokno in his memorandum anticipates the argument that "great ills
demand drastic cures" thus: "Drastic, yes but not unfair nor unconstitutional. One
does not improve courts by abolishing them, any more than a doctor cures a patient by
killing him. The ills the judiciary suffers from were caused by impairing its independence;
they will not be cured by totally destroying that independence. To adopt such a course
could only breed more perversity in the administration of justice, just as the abuses of
martial rule have bred more subversion."
12. Finally, as stated by the 1975 Integrated Bar of the Philippines 2nd House of
Delegates, "It would, indeed, be most ironical if Judges who are called upon to give due
process cannot count it on themselves. Observance of procedural due process in the
separation of misfits from the Judiciary is the right way to attain a laudable objective."
As stressed by the Chief Justice in the Fortun case, judges are entitled to the cardinal
principles of fairness and due process and the opportunity to be heard and defend
themselves against the accusations made against them and not to be subjected to
harassment and humiliation, and the Court will repudiate the "oppressive exercise of
legal authority." More so, are judges entitled to such due process when what is at stake is
their constitutionally guaranteed security of tenure and non-impairment of the
independence of the judiciary and the proper exercise of the constitutional power
exclusively vested in the Supreme Court to discipline and remove judges after fair
hearing.
In sum, I see no reason to change the stand submitted by me to the Presidential
Committee on Judicial Reorganization that
Judges of inferior courts should not be summarily removed and branded for life in such
reorganization on the basis of confidential adverse reports as to their performance,
competence or integrity, save those who may voluntarily resign from office upon being
confronted with such reports against them. The trouble with such ex-parte reports,
without due process or hearing, has been proven from our past experience where a
number of honest and competent judges were summarily removed while others who
were generally believed to be basket cases have remained in the service; and
The power of discipline and dismissal of judges of all inferior courts, from the Court of
Appeals down, has been vested by the1973 Constitution in the Supreme Court, and if the
judiciary is to be strengthened, it should be left to clean its own house upon complaint
and with the cooperation of the aggrieved parties and after due process and
hearing. cdasia

The constitutional confrontation and conflict may well be avoided by holding that since
the changes and provisions of the challenged Act do not substantially change the nature
and functions of the "new courts" therein provided as compared to the "abolished old
courts" but provide for procedural changes, fixed delineation of jurisdiction and increases
in the number of courts for a more effective and efficient disposition of court cases, the
incumbent judges' guaranteed security of tenure require that they be retained in the
corresponding "new courts."
||| (De la Llana v. Alba, G.R. No. 57883, [March 12, 1982], 198 PHIL 1-130)

130. EDU V ERICTA

FIRST DIVISION
[G.R. No. L-32096. October 24, 1970.]
ROMEO F. EDU, in his capacity as Land Transportation
Commissioner, petitioner, vs. HON.
VICENTE
G.ERICTA,
in
his
capacity as Judge of the Court of First Instance of Rizal, Br. XVIII,
Quezon City, and TEDDY C. GALO, respondents.
Solicitor General Felix Q. Antonio, Acting Assistant Solicitor General Hector C.
Fule and Solicitor Vicente A. Torres for petitioner.
Teddy C. Galo in his own behalf.
Judge Vicente Ericta in his own behalf.
SYLLABUS
1. POLITICAL LAW; CONSTITUTIONAL LAW; STATUTES; DETERMINATION OF VALIDITY IN
CERTIORARI PROCEEDINGS. There is no principle of constitutional adjudication that
bars the Supreme Court from passing upon the question of the validity of a legislative
enactment in a proceeding for certiorari before it to test the propriety of the issuance of
a preliminary injunction.
2. ID.; ID.; POLICE POWER; GENERALLY. Police power is the authority of the state to
enact legislation that may interfere with personal liberty or property in order to promote
the general welfare. It is the power to prescribe regulations to promote the health,
morals, peace, education, good order or safety, and general welfare of the people. In
negative terms, it is that inherent and plenary power in the State which enables it to
prohibit all things hurtful to the comfort, safety and welfare of society. In that sense it
could be hardly distinguishable with the totality of legislative power.
3. ID.; ID.; ID.; SCOPE. It is in the above sense the greatest and most powerful
attribute of government. Its scope, ever-expanding to meet the exigencies of the times,
even to anticipate the future where it could be done, provides enough room for an
efficient and flexible response to conditions and circumstances thus assuring the

greatest benefit. The police power is thus a dynamic agency, suitably vague and far from
precisely defined, rooted in the conception that men in organizing the state and
imposing upon its government limitations to safeguard constitutional rights did not
intend thereby to enable an individual citizen or a group of citizens to obstruct
unreasonably the enactment of such salutary measures calculated to insure communal
peace, safety, good order, and welfare.
4. ID.; ID.; ID.; PROMOTION OF PUBLIC SAFETY, REFLECTOR LAW. It would be to
overturn a host of decisions impressive for their number and unanimity were this Court
to sustain the attack on the Reflector Law (Republic Act No. 5715) ostensibly for
disregarding the due process safeguard. It would be to close one's eyes to the hazards of
traffic in the evening to condemn a statute of this character. Such an attitude betrays
lack of concern for public safety. The statute assailed is not infected with arbitrariness. It
is not the product of whim or caprice. It is far from oppressive. It is a legitimate response
to a felt public need. It can stand the test of the most unsympathetic appraisal.
5. ID.; ID.; ID.; DOCTRINE OF LAISSEZ-FAIRE REJECTED. The Constitutional Convention
saw to it that the concept of laissez-faire was rejected. It entrusted to our government
the responsibility of coping with social and economic problems with the commensurate
power of control over economic affairs. Thereby it could live up to its commitment to
promote the general welfare through state action. No constitutional objection to
regulatory measures adversely affecting property rights, especially so when public safety
is the aim, is likely to be heeded, unless on the clearest and most satisfactory proof of
invasion of rights guaranteed by the Constitution. On such a showing, there maybe
declaration of nullity, not because the laissez-faire principle was disregarded, but
because the due process, equal protection or non-impairment guarantees would call for
vindication.
6. ID.; ID.; DELEGATION OF LEGISLATIVE POWERS; GENERALLY. It is a fundamental
principle flowing from the doctrine of separation of powers that Congress may not
delegate its legislative power to the two other branches of the government, subject to
the exception that local governments may over local affairs participate in its exercise.
What cannot be delegated is the authority under the Constitution to make laws and to
alter and repeal them; the test is the completeness of the statute all its term and
provision when it leaves the hands of the legislature. To determine whether or not there
is an undue delegation of legislative power, the inquiry must be directed to the scope
and definiteness of the measure enactment. The legislative does not abdicate its
functions when it describes what job must be done, who is to do it, and what is the scope
of his authority. For a complex economy, that may be the only way in which the
legislative process can go forward.
7. ID.; ID.; ID.; NECESSITY OF LEGISLATIVE STANDARD AND POLICY. To avoid the taint
of unlawful delegation, there must be a standard, which implies at the very least that the
legislature itself determines matters of principle and lays down fundamental policy. A
standard thus 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 purpose may be carried out. Thereafter, the executive or administrative office
designated may in pursuance of the above guidelines promulgate supplemental rules
and regulations.
8. ID.; ID.; ID.; VALIDITY OF ADMINISTRATIVE ORDER IMPLEMENTING THE REFLECTOR
LAW. Administrative Order No. 2of the Land Transportation Commissioner, issued
pursuant to the authority granted him to promulgate rules and regulations, giving life to

and translating into actuality the fundamental purpose of the Reflector Law to promote
public safety, is not invalid as an undue exercise of legislative power.

DECISION

FERNANDO, J p:
Petitioner Romeo F. Edu, the Land Transportation Commissioner, would have us rule
squarely on the constitutionality of the Reflector Law 1 in this proceeding for certiorari
and prohibition against respondent Judge, the Honorable Vicente G. Ericta of the Court of
First Instance of Rizal, Quezon City Branch, be annul and set aside his order for the
issuance of a writ of preliminary injunction directed against Administrative Order No. 2 of
petitioner for the enforcement of the aforesaid statute, in a pending suit in his court for
certiorari and prohibition, filed by the other respondent Teddy C. Galo assailing the
validity of such enactment as well as such administrative order. Respondent Judge, in his
answer, would join such a plea asking that the constitutional and legal questions raised
be decided "once and for all." Respondent Teddy C. Galo, who was quite categorical in his
assertion that both the challenged legislation and the administrative order transgress the
constitutional requirements of due process and nondelegation, is not averse either to
such a definitive ruling. Considering the great public interest involved and the reliance by
respondent Galo on the allegation that the repugnancy to the fundamental law could be
discerned on the face of the statute as enacted and the executive order as promulgated,
this Court sees no obstacle to the determination in this proceeding of the constitutional
questions raised. For reasons to be hereafter stated, we sustain the validity of the
Reflector Law and Administrative Order No. 2 issued in the implementation thereof, the
imputation of constitutional infirmity being at best flimsy and insubstantial.
As noted in the answer of respondent Judge, respondent Galo on his behalf and that of
other motorists filed on May 20, 1970 a suit for certiorari and prohibition with preliminary
injunction assailing the validity of the challenged Act as an invalid exercise of the police
power, for being violative of the due process clause. This he followed on May 28, 1970
with a manifestation wherein he sought as an alternative remedy that, in the event that
respondent Judge would hold said statute constitutional, Administrative Order No, 2 of
the Land Transportation Commissioner, now petitioner, implementing such legislation be
nullified as an undue exercise of legislative power. There was a healing on the plea for
the issuance of a writ of preliminary injunction held on May 27, 1970 where both parties
were duly represented, but no evidence was presented. The next day, on May 28, 1970,
respondent Judge ordered the issuance of a preliminary injunction directed against the
enforcement of such administrative order. There was, the day after, a motion for its
reconsideration filed by the Solicitor General representing petitioner. In the meanwhile,
the clerk of court of respondent Judge issued on June 1, 1970 the writ of preliminary
injunction upon the filing of the required bond. The answer before the lower court was
filed by petitioner Edu on June 4, 1970. Thereafter, on June 9, 1970, respondent Judge
denied the motion for reconsideration of the order of injunction. Hence this petition for
certiorari and prohibition filed with this Court on June 18, 1970.
In a resolution of June 22, 1970, this Court required respondents to file an answer to the
petition for certiorari and prohibition. Respondent Judge, the Honorable Vicente G. Ericta,
did file his answer on June 30, 1970 explaining why he restrained the enforcement

of Administrative Order No. 2 and, as noted at the outset, joining the Solicitor General in
seeking that the legal questions raised, namely the constitutionality of the Reflector Law
and secondly the validity of Administrative Order No. 2 alleged to be in excess of the
authority conferred on petitioner and therefore violative of the principle of nondelegation of legislative power, be definitely decided. It was not until July 6, 1970 that
respondent Galo filed his answer seeking the dismissal of this petition concentrating on
what he considered to be the patent invalidity of Administrative Order No. 2 as it went
beyond the authority granted by the Reflector Law, even assuming that it is
constitutional. In the meanwhile, on July 2, 1970, the petition was called for hearing with
Solicitor Vicente Torres appearing for petitioner and respondent Galo for himself. It was
made clear during the course of such argumentation that the matter of the
constitutionality of the Reflector Law was likewise under consideration by this Court. The
case is thus ripe for decision.
We repeat that we find for petitioner and sustain the constitutionality of the Reflector
Law as well as the validity ofAdministrative Order No. 2.
1. The threshold question is whether on the basis of the petition, the answers, and the
oral argument, it would be proper for this Court to resolve the issue of the
constitutionality of the Reflector Law. Our answer, as indicated, is in the affirmative. It is
to be noted that the main thrust of the petition before us is to demonstrate in a rather
convincing fashion that the challenged legislation does not suffer from the alleged
constitutional infirmity imputed to it by the respondent Galo. Since the special civil action
for certiorari and prohibition filed by him before respondent Judge would seek a
declaration of nullity of such enactment by the attribution of the violation on the face
thereof of the due process guarantee in the deprivation of property rights, it would follow
that there is sufficient basis for us to determine which view should prevail. Moreover, any
further hearing by respondent Judge would likewise be limited to a discussion of the
constitutional issues raised, no allegations of facts having been made. This is one case
then where the question of validity is ripe for determination. If we do so, further effort
need not be wasted and time is saved. Moreover, the officials concerned as well as the
public, both vitally concerned with a final resolution of this question of validity, could
know the definitive answer and could act accordingly. There is a great public interest, as
was mentioned, to be served by the final disposition of such crucial issue, petitioner
praying that respondent Galo be declared as having no cause of action with respondent
Judge being accordingly directed to dismiss his suit.
There is another reinforcement to this avenue of approach. We have done so before in a
suit, Climaco v. Macadaeg, 2involving the legality of a presidential directive. That was a
petition for the review and reversal of a writ of preliminary injunction issued by the then
Judge Macadaeg. We there announced that we "have decided to pass upon the question
of the validity of the presidential directive ourselves, believing that by doing so we would
be putting an end to a dispute, a delay in the disposition of which has caused
considerable damage and injury to the Government and to the tobacco planters
themselves."
There is no principle of constitutional adjudication that bars this Court from similarly
passing upon the question of the validity of a legislative enactment in a proceeding
before it to test the propriety of the issuance of a preliminary injunction. The same felt
need for resolving once and for all the vexing question as to the constitutionality of a
challenged enactment and thus serve public interest exists. What we have done in the

case of an order proceeding from one of the coordinate branches, the executive, we can
very well do in the matter before us involving the alleged nullity of a legislative act.
Accordingly, there is nothing to preclude the grant of the writs prayed for, the burden of
showing the unconstitutionality of the act having proved to be as will now be shown, too
much for respondent Galo.
2. The Reflector Law reads in full: "(g) Lights and reflector when parked or disabled.
Appropriate parking lights or flares visible one hundred meters away shall be displayed
at a corner of the vehicle whenever such vehicle is parked on highways or in places that
are not well-lighted or is placed in such manner as to endanger passing traffic.
Furthermore, every motor vehicle shall be provided at all times with built-in reflectors or
other similar warning devices either pasted, painted or attached at its front and back
which shall likewise be visible at night at least one hundred meters away. No vehicle not
provided with any of the requirements mentioned in this subsection shall be
registered." 3 It is thus obvious that the challenged statute is a legislation enacted under
the police power to promote public safety.
Justice Laurel, in the first leading decision after the Constitution came into force,
Calalang v. Williams, 4 identified police power with state authority to enact legislation
that may interfere with personal liberty or property in order to promote the general
welfare. Persons and property could thus "be subjected to all kinds of restraints and
burdens in order to secure the general comfort, health and prosperity of the state."
Shortly after independence in 1948, Primicias v. Fugoso, 5 reiterated the doctrine, such a
competence being referred to as "the power to prescribe regulations to promote the
health, morals, peace, education, good order or safety, and general welfare of the
people." The concept was set forth in negative terms by Justice Malcolm in a preCommonwealth decision as "that inherent and plenary power in the State which enables
it to prohibit all things hurtful to the comfort, safety and welfare of society." 6 In that
sense it could be hardly distinguishable as noted by this Court in Morfe v. Mutuc 7 with
the totality of legislative power.
It is in the above sense the greatest and most powerful attribute of government. It is to
quote Justice Malcolm anew "the most essential, insistent, and at least illimitable of
powers," 8 extending as Justice Holmes aptly pointed out "to all the great public
needs." 9 Its scope, ever-expanding to meet the exigencies of the times, even to
anticipate the future where it could be done, provides enough room for an efficient and
flexible response to conditions and circumstances thus assuring the greatest benefits. In
the language of Justice Cardozo: "Needs that were narrow or parochial in the past may
be interwoven in the present with the well-being of the nation. What is critical or urgent
changes with the time." 10 The police power is thus a dynamic agency, suitably vague
and far from precisely defined, rooted in the conception that men in organizing the state
and imposing upon its government limitations to safeguard constitutional rights did not
intend thereby to enable an individual citizen or a group of citizens to obstruct
unreasonably the enactment of such salutary measures calculated to unsure communal
peace, safety, good order, and welfare.
It would then be to overturn a host of decisions impressive for their number and
unanimity were this Court to sustain respondent Galo. 11 That we are not disposed to
do, especially so as the attack on the challenged statute ostensibly for disregarding the
due process safeguard is singularly unpersuasive. It would be to close one's eyes to the
hazards of traffic in the evening to condemn a statute of this character. Such an attitude
betrays lack of concern for public safety. How can it be plausibly alleged then that there
was no observance of due process equated as it has always been with what is reachable?

The statute assailed is not infected with arbitrariness. It is not the product of whim or
caprice. It is far from oppressive. It is a legitimate response, to a felt public need. It can
stand the test of the most unsympathetic appraisal.
Respondent Galo is of a different mind, having been unable to resist the teaching of
many American State Court decisions referred to in the secondary source, American
Jurisprudence, principally relied upon by him. He ought to have been cautioned against
an indiscriminate acceptance of such doctrines predicated on what was once a
fundamental postulate in American public law, laissez-faire.
It is to be admitted that there was a period when such a concept did influence American
court decisions on constitutional law. As was explicitly stated by Justice Cardozo speaking
of that era: "Laissez-faire was not only a counsel of caution which would do well to heed.
It was a categorical imperative which statesmen as well as judges, must obey." 12 For a
long time, legislation tending to reduce economic inequality foundered on the rock that
was the due process clause, enshrining as it did the liberty of contract, based on such a
basic assumption.
The New Deal administration of President Roosevelt more responsive to the social and
economic forces at work changed matters greatly. By 1937, there was a greater
receptivity by the American Supreme Court to an approach not too reverential of
property rights. Even earlier, in 1935, Professor Coker of Yale, speaking as a historian,
could already discern a contrary drift. He did note the expending range of governmental
activity in the United States. 13 What is undeniable is that by 1943,laissez-faire was no
longer the dominant theory. In the language of Justice Jackson in the leading case of
West Virginia State Board of Education v. Barnette: 14 "We must transplant these rights
to a soil in which the laissez-faire concept or non-interference has withered at least as to
economic affairs, and social advancements are increasingly sought through closer
integration of society and through expanded and strengthened governmental controls."
While authoritative precedents from the United States federal and state jurisdictions
were deferred to when the Philippines was still under American rule, it cannot be said
that the laissez-faire principle was invariably adhered to by us even then. As early as
1919, in the leading case of Rubi v. Provincial Board of Mindoro, 15 Justice Malcolm
already had occasion to affirm: "The doctrines of laissez-faire and of unrestricted
freedom of the individual, as axioms of economic and political theory, are of the past.
The modern period has shown a widespread belief in the amplest possible demonstration
of government activity. The Courts unfortunately have sometimes seemed to trail after
the other two branches of the Government in this progressive march." People v.
Pomar, 16 a 1924 decision. which held invalid under the due process clause a provision
providing for maternity leave with pay thirty days before and thirty days after
confinement could be cited to show that such a principle did have its day. It is to be
remembered though that our Supreme Court had no other choice as the Philippines was
then under the United States, and only recently the year before, the American Supreme
Court in Adkins v. Children's Hospital,17 in line with the laissez-faire theory, did hold that
a statute providing for minimum wages was constitutionally infirm.
What is more, to erase any doubts, the Constitutional Convention saw to it that the
concept of laissez-faire was rejected. It entrusted to our government the responsibility of
coping with social and economic problems with the commensurate power of control over
economic affairs. Thereby it could live up to its commitment to promote the general
welfare through state action. No constitutional objection to regulatory measures

adversely affecting property rights, especially so when public safety is the aim, is likely
to be heeded, unless of course on the clearest and most satisfactory proof of invasion of
rights guaranteed by the Constitution. On such a showing, there may be a declaration of
nullity, but not because, the laissez-faireprinciple was disregarded but because the due
process, equal protection, or non-impairment guarantees would call for vindication.
To repeat, our Constitution which took effect in 1935 erased whatever doubts there
might be on that score. Its philosophy is a repudiation of laissez-faire. One of the leading
members of the Constitutional Convention. Manuel A. Roxas, later the first President of
the Republic, made it clear when he disposed of the objection of Delegate Jose Reyes of
Sorsogon, who noted the "vast extensions in the sphere of governmental functions" and
the "almost unlimited power to interfere in the affairs of industry and agriculture as well
as to compete with existing business" as "reflections of the fascination exerted by [the
then] current tendencies" in other jurisdictions. 18 He spoke thus: "My answer is that this
Constitution has a definite and well defined philosophy, not only political but social and
economic. . . . If in this Constitution the gentleman will find declarations of economic
policy they are there because they are necessary to safeguard the interests and welfare
of the Filipino people because we believe that the days have come when in self-defense,
a nation may provide in its constitution those safeguards, the patrimony, the freedom to
grow, the freedom to develop national aspirations and national interests, not to be
hampered by the artificial boundaries which a constitutional provision automatically
imposes. 19
It was not expected then when in a concurring opinion, Justice Laurel, who likewise sat in
the Constitutional Convention and was one of its leading lights, explicitly affirmed in a
concurring opinion, later quoted with approval in the leading case of Antamok Goldfields
Mining Co. v. Court of Industrial Relations, 20 that the Constitution did away with
the laissez-fairedoctrine. In the course of such concurring opinion and after noting the
changes that have taken place calling for a more affirmative role by the government and
its undeniable power to curtail property rights, he categorically declared the doctrine in
People v. Pomar no longer retains "its virtuality as a living principle." 21
It is in the light of such rejection of the laissez-faire principle that during the
Commonwealth era, no constitutional infirmity was found to have attached to legislation
covering such subjects as collective bargaining, 22 security of tenure, 23 minimum
wages, 24 compulsory arbitration, 25 the regulation of tenancy 26 as well as the
issuance of securities, 27 and control of public services. 28 So it is likewise under the
Republic this Court having given the seal of approval to more favorable tenancy
laws, 29nationalization
of
the
retail
trade, 30 limitation
of
the
hours
of
labor, 31 imposition of price control, 32 requirement of separation pay for one
month, 33 and social security scheme. 34
Respondent Galo thus could have profited by a little more diligence in the scrutiny of
Philippine decisions rendered with not unexpected regularity, during all the while our
Constitution has been in force, attesting to the demise of such a shibboleth aslaissezfaire. It was one of those fighting faiths that time and circumstances had upset, to
paraphrase Holmes. Yet respondent Galo would seek to vivify and resurrect it. That, it
would appear, is a vain quest, a futile undertaking. The Reflector Law is thus immune
from the attack so recklessly hurled against it. It can survive, and quite easily too, the
constitutional test.
3. The same lack of success marks the effort of respondent Galo to impugn the validity
of Administrative Order No. 2issued by petitioner in his official capacity, duly approved

by the Secretary of Public Works and Communications, for being contrary to the principle
of non-delegation of legislative power. Such administrative order, which took effect on
April 17, 1970, has a provision on reflectors in effect reproducing what was set forth in
the Act. Thus: "No motor vehicles of whatever style, kind, make, class or denomination
shall be registered if not equipped with reflectors. Such reflectors shall either be factory
built-in-reflector, commercial glass reflectors, reflectionized tape or luminous paint. The
luminosity shall have an intensity to be maintained visible and clean at all times such
that if struck by a beam of light shall be visible 100 meters away at night." 35 Then
came a section on dimensions, placement and color. As to dimensions, the following is
provided for: "Glass reflectors Not less than 3 inches in diameter or not less than 3
inches square; Reflectorized Tape At least 3 inches wide and 12 inches long. The
painted or taped area may be bigger at the discretion of the vehicle owner." 36 Provision
is then made as to how such reflectors are to be "placed, installed, pasted or
painted." 37 There is the further requirement that in addition to such reflectors there
shall be installed, pasted or painted four reflectors on each side of the motor vehicle
parallel to those installed, pasted or painted in front and those in the rear end of the
body thereof. 38 The color required of each reflectors, whether built-in, commercial
glass, reflectorized tape or reflectorized paint placed in the front part of any motor
vehicle shall be amber or yellow and those placed on the sides and in the rear shall all be
red. 39
Penalties resulting from a violation thereof could be imposed. Thus: "Non-compliance
with the requirements contained in this Order shall be sufficient cause to refuse
registration of the motor vehicle affected and if already registered, its registration may
be suspended in pursuance of the provisions of Section 16 of RA-4136; [Provided],
However, that in the case of the violation of Section 1(a) and (b) and paragraph (8) of
Section 3 hereof, a fine of not less than ten nor more than fifty pesos shall be
imposed. 40 It is not to be lost sight of that under Republic Act No. 4136, of which the
Reflector Law is an amendment, petitioner, as the Land Transportation Commissioner,
may, with the approval of the Secretary of Public Works and Communications, issue rules
and regulations for its implementation as long as they do not conflict with its
provisions. 41It is likewise an express provision of the above statute that for a violation
of any of its provisions or regulations promulgated pursuant thereto, a fine of not less
than P10 nor more than P50 could be imposed. 42
It is a fundamental principle flowing from the doctrine of separation of powers that
Congress may not delegate its legislative power to the two other branches of the
government, subject to the exception that local governments may over local affairs
participate in its exercise. What cannot be delegated is the authority under the
Constitution to make laws and to alter and repeal them; the test is the completeness of
the statute in all its term and provisions when it leaves the hands of the legislature. To
determine whether or not there is an undue delegation of legislative power, the inquiry
must be directed to the scope and definiteness of the measure enacted. The legislature
does not abdicate its functions when it describes what job must be done, who is to do it,
and what is the scope of his authority. For a complex economy, that may indeed be the
only way in which the legislative process can go forward. A distinction has rightfully been
made between delegation of power to make the laws which necessarily involves a
discretion as to what it shall be, which constitutionally may not be done, and delegation
of authority or discretion as to its execution to be exercised under and in pursuance of
the law, to which no valid objection can be made. The Constitution is thus not to be
regarded as denying the legislature the necessary resources of flexibility and
practicability.

To avoid the taint of unlawful delegation, there must be a standard, which implies at the
very least that the legislature itself determines matters of principle and lays down
fundamental policy. Otherwise, the charge of complete abdication may be hard to repel.
A standard thus 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. It is the criterion by which legislative purpose may
be carried out. Thereafter, the executive or administrative office designated may in
pursuance of the above guidelines promulgate supplemental rules and regulations.
The standard may be either express or implied. If the former, the non-delegation
objection is easily met. The standard though does not have to be spelled out specifically.
It could be implied from the policy and purpose of the act considered as a whole. In the
Reflector Law, clearly the legislative objective is public safety. What is sought to be
obtained as in Calalang v. Williams is "safe transit upon the roads." 43
This is to adhere to the recognition given expression by Justice Laurel in a decision
announced not-too-long after the Constitution came into force and effect that the
principle of non-delegation "has been made to adapt itself to the complexities of modern
governments, giving rise to the adoption, within certain limits, of the principle of
'subordinate legislation' not only in the United States and England but in practically all
modern governments." 44 He continued: "Accordingly, with the growing complexity of
modern life, the multiplication of the subjects of governmental regulation, and the
increased difficulty of administering the laws, there is a constantly growing tendency
toward the delegation of greater powers by the legislature and toward the approval of
the practice by the courts." 45 Consistency with the conceptual approach requires the
reminder that what is delegated is authority non-legislative in character, the
completeness of the statute when it leaves the hands of Congress being assumed.
Our later decisions speak to the same effect. Thus from Justice J. B. L. Reyes in People vs.
Exconde: 46 "It is well established in this jurisdiction that, while the making of laws is a
non-delegable activity that corresponds exclusively to Congress, nevertheless the latter
may constitutionally delegate authority to promulgate rules and regulations to
implement a given legislation and effectuate its policies, for the reason that the
legislature often finds it impracticable (if not impossible) to anticipate and provide for the
multifarious and complex situations that may be met in carrying the law into effect. All
that is required is that the regulation should be germane to the objects and purposes of
the law; that the regulation be not in contradiction with it; but conform to the standards
that the law prescribes . . ." 47
An even more explicit formulation of the controlling principle comes from the pen of the
then Justice, now Chief Justice, Concepcion: "Lastly, the legality of Circular No. 21 is
assailed upon the ground that the grant of authority to issue the same constitutes an
undue delegation of legislative power. It is true that, under our system of government,
said power may not be delegated except to local governments. However, one thing is to
delegate the power to determine what the law shall be, and another thing to delegate
the authority to fix the details in the execution of enforcement of a policy set out in the
law itself. Briefly stated, the rule is that the delegated powers fall under the second
category, if the law authorizing the delegation furnishes a reasonable standard which
'sufficiently marks the field within which the Administrator is to act so that it may be
known whether he has kept within it in compliance with the legislative will.' (Yakus vs.
United States, 88 L. ed. 848) . . . It should be noted, furthermore, that these powers must

be construed and exercised in relation to the objectives of the law creating the Central
Bank, which are, among others, 'to maintain monetary stability in the Philippines,' and 'to
promote a rising level of production, employment and real income in the Philippines.'
(Section 2, Rep. Act No. 265). These standards are sufficiently concrete and definite to
vest in the delegated authority, the character of administrative details in the
enforcement of the law and to place the grant of said authority beyond the category of a
delegation of legislative powers . . ." 48
It bears repeating that the Reflector Law construed together with the Land Transportation
Code. Republic Act No. 4136, of which it is an amendment, leaves no doubt as to the
stress and emphasis on public safety which is the prime consideration in statutes of this
character. There is likewise a categorical affirmation of the power of petitioner as Land
Transportation Commissioner to promulgate rules and regulations to give life to and
translate into actuality such fundamental purpose. His power is clear. There has been no
abuse. His Administrative Order No. 2 can easily survive the attack, far-from-formidable,
launched against it by respondent Galo.
WHEREFORE, the writs of certiorari and prohibition prayed for are granted, the orders of
May 28, 1970 of respondent Judge for the issuance of a writ of preliminary injunction, the
writ of preliminary injunction of June 1, 1970 and his order of June 9, 1970 denying
reconsideration are annulled and set aside. Respondent Judge is likewise directed to
dismiss the petition for certiorari and prohibition filed by respondent Teddy C. Galo, there
being no cause of action as the Reflector Law andAdministrative Order No. 2 of petitioner
have not been shown to be tainted by invalidity. Without pronouncement as to costs.
||| (Edu v. Ericta, G.R. No. L-32096, [October 24, 1970], 146 PHIL 469-489)

131. OPLE V TORRES

EN BANC
[G.R. No. 127685. July 23, 1998.]
BLAS F. OPLE, petitioner, vs. RUBEN D. TORRES, ALEXANDER
AGUIRRE, HECTOR VILLANUEVA, CIELITO HABITO, ROBERT
BARBERS, CARMENCITA REODICA, CESAR SARINO, RENATO
VALENCIA, TOMAS P. AFRICA, HEAD OF THE NATIONAL
COMPUTER CENTER and CHAIRMAN OF THE COMMISSION ON
AUDIT,respondents.
SYNOPSIS
Administrative Order No. 308, entitled "Adoption of a National Computerized
Identification Reference System," was issued by the President on December 12,
1996. Petitioner challenges the constitutionality of said Administrative Order on
two (2) grounds, namely: (1) it is a usurpation of the power of Congress to
legislate; and (2) its impermissibility intrudes on our citizenry's protected zone of
privacy. Petitioner contends that the Administrative Order is not a mere
administrative order but a law and, hence, beyond the power of the President to
issue. He further alleges that said Administrative Order establishes a system of
identification that is all-encompassing in scope, affects the life and liberty of every
Filipino citizen and foreign resident, and more particularly, violates their right to
privacy.

In declaring the Administrative Order null and void for being unconstitutional, the
Supreme Court held that the Administrative Order involves a subject that is not
appropriate to be covered by said administrative order. An administrative order is
an ordinance issued by the President which relates to specific aspects in the
administrative operation of government. It must be in harmony with the law and
should be for the sole purpose of implementing the law and carrying out the
legislative policy.
The essence of privacy is the right to be let alone. The right to privacy is
recognized and enshrined in several provisions of the Constitution. Zones of
privacy are likewise recognized and protected in our laws. Unlike the dissenters,
we prescind from the premise that the right to privacy is a fundamental right
guaranteed by the Constitution, hence, it is the burden of government to show
that A. O. No. 308 is justified by some compelling state interest and that it is
narrowly drawn. What is not arguable is the broadness, the vagueness, the
overbreath of A. O. No. 308 which if implemented will put our people's right to
privacy in clear and present danger.
CaDSHE

A. O. No. 308 falls short of assuring that personal information which will be
gathered about our people will only be processed for unequivocally specified
purposes. Even while we strike down A. O. No. 308, we spell out that the Court is
not per seagainst the use of computers to accumulate, store, process, retrieve
and transmit data to improve our bureaucracy. Given the record-keeping power of
the computer, only the indifferent will fail to perceive the danger that A. O. No.
308 gives the government the power to compile a devastating dossier against
unsuspecting citizens.
SYLLABUS
1. POLITICAL LAW; LEGISLATIVE DEPARTMENT; LEGISLATIVE POWER; CONSTRUED.
Legislative power is "the authority, under the Constitution, to make laws, and to
alter and repeal them." The Constitution, as the will of the people in their original,
sovereign and unlimited capacity, has vested this power in the Congress of the
Philippines. The grant of legislative power to Congress is broad, general and
comprehensive. The legislative body possesses plenary power for all purposes of
civil government. Any power, deemed to be legislative by usage and tradition, is
necessarily possessed by Congress, unlessthe Constitution has lodged it
elsewhere. In fine, except as limited by the Constitution, either expressly or
impliedly, legislative power embraces all subject and extends to matters of
general concern or common interest.
2. ID.; EXECUTIVE DEPARTMENT; EXECUTIVE POWER IS VESTED IN THE
PRESIDENT. 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 the laws into practical operation and enforcing their due observance.

As head of the Executive Department, the President is the Chief Executive. He

represents the government as a whole and sees to it that all laws are enforced by
the officials and employees of this department. He has control over the executive
department, bureaus and offices. This means that he has the authority to assume
directly the functions of the executive department, bureau and office, or interfere
with the discretion of its officials. Corollary to the power of control, the President
also has the duty of supervising the enforcement of laws for the maintenance of
general peace and public order. Thus, he is granted administrative power over
bureaus and offices under his control to enable him to discharge his duties
effectively. Administrative power is concerned with the work of applying policies
and enforcing orders as determined by proper governmental organs. It enables
the President to fix a uniform standard of administrative efficiency and check the
official conduct of his agents. To this end, he can issue administrative orders,
rules and regulations.
3. ID.; NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM (A. O. No.
308); DOES NOT IMPLEMENT THE LEGISLATIVE POLICY OF THE ADMINISTRATIVE
CODE OF 1987; REASONS THEREFOR. Prescinding from these precepts, we hold
that A.O. No. 308 involves a subject that is not appropriate to be covered by an
administrative order. An administrative order is an ordinance issued by the
President which relates to specific aspects in the administrative operation of
government.It must be in harmony with the law and should be for the sole
purpose of implementing the law and carrying out the legislative policy. We reject
the argument that A.O. No. 308 implements the legislative policy of the
Administrative Code of 1987. The Code is a general law and "incorporates in a
unified document the major structural, functional and procedural principles of
governance" and "embodies changes in administrative structures and procedures
designed to serve the people." The Code is divided into seven (7) Books: Book I
deals with Sovereignty and General Administration, Book II with the Distribution of
Powers of the three branches of Government, Book III on the Office of the
President, Book IV on the Executive Branch, Book V on the Constitutional
Commissions, Book VI on National Government Budgeting, and Book VII on
Administrative Procedure. These Books contain provisions on the organization,
powers and general administration of the executive, legislative and judicial
branches of government, the organization and administration of departments,
bureaus and offices under the executive branch, the organization and functions of
the Constitutional Commissions and other constitutional bodies, the rules on the
national government budget, as well as guidelines for the exercise by
administrative agencies of quasi-legislative and quasi-judicial powers. The Code
covers both the internal administration of government, i.e, internal organization,
personnel and recruitment, supervision and discipline, and the effects of the
functions performed by administrative officials on private individuals or parties
outside government. It cannot be simplistically argued that A.O. No. 308 merely
implements the Administrative Code of 1987. It establishes for the first time a
National Computerized Identification Reference System. Such a System requires a
delicate adjustment of various contending state policies the primacy of national
security, the extent of privacy interest against dossier-gathering by government,

the choice of policies, etc. Indeed, the dissent of Mr. Justice Mendoza states that
the A.O. No. 308 involves the all important freedom of thought. As said
administrative order redefines the parameters of some basic rights of our citizenry
vis-a-vis the State as well as the line that separates the administrative power of
the President to make rules and the legislative power of Congress, it ought to be
evident that it deals with a subject that should be covered by law.
4. ID.; ID.; CANNOT PASS CONSTITUTIONAL MUSTER AS AN ADMINISTRATIVE
LEGISLATION BECAUSE FACIALLY IT VIOLATES THE RIGHT TO PRIVACY.
Assuming, arguendo, that A.O. No. 308 need not be the subject of a law, still it
cannot pass constitutional muster as an administrative legislation because facially
it violates the right to privacy. The essence of privacy is the "right to be let alone.
5. ID.; ID.; ID.; REASON THEREFOR. The potential for misuse of the data to be
gathered under A.O. No. 308 cannot be underplayed as the dissenters do.
Pursuant to said administrative order, an individual must present his PRN
everytime he deals with a government agency to avail of basic services and
security. His transactions with the government agency will necessarily be recorded
whether it be in the computer or in the documentary file of the agency. The
individual's file may include his transactions for loan availments, income tax
returns, statement of assets and liabilities, reimbursements for medication,
hospitalization, etc. The more frequent the use of the PRN, the better the chance
of building a huge and formidable information base through the electronic linkage
of the files. The data may be gathered for gainful and useful government
purposes; but the existence of this vast reservoir of personal information
constitutes a covert invitation to misuse, a temptation that may be too great for
some of our authorities to resist. We can even grant, arguendo, that the computer
data file will be limited to the name, address and other basic personal information
about the individual. Even that hospitable assumption will not save. A.O. No.
308 from constitutional infirmity for again said order does not tell us in clear and
categorical terms how these information gathered shall be handled. It does not
provide who shall control and access the data, under what circumstances and for
what purpose. These factors are essential to safeguard the privacy and guaranty
the integrity of the information. Well to note, the computer linkage gives other
government agencies access to the information.Yet, there are no controls to
guard against leakage of information. When the access code of the control
programs of the particular computer system is broken, an intruder, without fear of
sanction or penalty, can make use of the data for whatever purpose, or worse,
manipulate the data stored within the system. It is plain and we hold that A.O. No.
308 falls short of assuring that personal information which will be gathered about
our people will only be processed for unequivocally specified purposes. The lack of
proper safeguards in this regard of A.O. No. 308 may interfere with the individual's
liberty of abode and travel by enabling authorities to track down his movement; it
may also enable unscrupulous persons to access confidential information and
circumvent the right against self-incrimination; it may pave the way for "fishing
expeditions" by government authorities and evade the right against unreasonable
searches and seizures. The possibilities of abuse and misuse of the PRN,

biometrics and computer technology are accentuated when we consider that the
individual lacks control over what can be read or placed on his ID, much less
verify the correctness of the data encoded. They threaten the very abuses that
the Bill of Rights seeks to prevent.
cSTHaE

6. ID.; ID.; ID.; THE USE OF BIOMETRICS AND COMPUTER TECHNOLOGY DOES NOT
ASSURE THE INDIVIDUAL OF A REASONABLE EXPECTATION OF PRIVACY. We
reject the argument of the Solicitor General that an individual has a reasonable
expectation of privacy with regard to the National ID and the use of biometrics
technology as it stands on quicksand. The reasonableness of a person's
expectation of privacy depends on a two-part test: (1) whether by his conduct, the
individual has exhibited an expectation of privacy; and (2) whether this
expectation is one that society recognizes an reasonable. The factual
circumstances of the case determines the reasonableness of the expectation.
However, other factors, such as customs, physical surroundings and practices of a
particular activity, may serve to create or diminish this expectation. The use of
biometrics and computer technology in A.O. No. 308 does not assure the
individual of a reasonable expectation of privacy. As technology advances, the
level of reasonably expected privacy decreases. The measure of protection
granted by the reasonable expectation diminishes as relevant technology
becomes more widely accepted. The security of the computer data file depends
not only on the physical inaccessibility of the file but also on the advances in
hardware and software computer technology. A.O. No. 308 is so widely drawn that
a minimum standard for a reasonable expectation of privacy, regardless of
technology used, cannot be inferred from its provisions.
ROMERO, J., separate opinion:
POLITICAL LAW; NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM,
VIOLATES A PERSON'S RIGHT TO PRIVACY. Whether viewed as a personal or a
property right, if found its way in Philippine Constitutions and statutes; this, in
spite of the fact that Philippine culture can hardly be said to provide a fertile field
for the burgeoning of said right. In fact, our lexicographers have yet to coin a
word for it in the Filipino language. Customs and practices, being what they have
always been, Filipinos think it perfectly natural and in good taste to inquire into
each other's intimate affairs. One has only to sit through a televised talk show to
be convinced that what passes for wholesome entertainment is actually an
invasion into one's private life, leaving the interviewee embarrassed and outrage
by turns. With the overarching influence of common law and the recent advent of
the Information Age with its high-tech devices, the right to privacy has expanded
to embrace its public law aspect. The Bill of Rights of our evolving Charters, a
direct transplant form that of the United States, contains in essence facets of the
right to privacy which constitutes limitations on the far-reaching powers
government. So terrifying are the possibilities of a law such as Administrative
Order No. 308 in making inroads into the private lives of the citizens, a virtual Big

Brother looking over our shoulders, that it must without delay, be "slain upon
sight" before our society turns totalitarian with each of us, a mindless robot.
VITUG, J., separate opinion:
POLITICAL LAW; NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM,
AN UNDUE AND IMPERMISSIBLE EXERCISE OF LEGISLATIVE POWER BY THE
EXECUTIVE. Administrative Order No. 308 appears to be so extensively drawn
that could, indeed, allow unbridled options to become available to its
implementors beyond the reasonable comfort of the citizens and of residents
alike. Prescinding from the foregoing and most importantly to this instance, the
subject covered by the questioned administrative order can have far-reaching
consequences that can tell on all individuals, their liberty and privacy, that, to my
mind, should make it indispensable and appropriate to have the matter
specifically addressed by the Congress of the Philippines, the policy-making body
of our government, to which the task should initially belong and to which the
authority to formulate and promulgate that policy is constitutionally lodged.
Wherefore, I vote for the nullification ofAdministrative Order No. 308 for being an
undue and impermissible exercise of legislative power by the Executive.
PANGANIBAN, J., separate opinion:
POLITICAL LAW; NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM
(AO 308), SUBJECT MATTER THEREOF IS BEYOND THE POWERS OF THE PRESIDENT
TO REGULATE WITHOUT A LEGISLATIVE ENACTMENT. I concur only in the result
and only on the ground that an executive issuance is not legally sufficient to
establish an all encompassing computerized system of identification in the
country. The subject matter contained in AO 308 is beyond the powers of the
President to regulate without a legislative enactment.
KAPUNAN, J., dissenting opinion:
1. POLITICAL LAW; NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE
SYSTEM; PURPOSE. The National Computerized Identification Reference
System, to which the NSO, GSIS and SSS are linked as lead members of the IACC
is intended to establish uniform standards for ID cards issued by key government
agencies (like the SSS) for the "efficient identification of persons." Under the new
system, only on retaliate and tamper-proof I.D. need be presented by the
cardholder instead of several identification papers such as passports and driver's
license, to able to transact with government agencies. The improved ID can be
used to facilitate public transactions such as: 1. Payment of SSS and GSIS benefits
2. Applications for driver's license, BIR TIN, passport, marriage license, death
certificate, NBI and police clearance and business permits. 3. Availment of
Medicare services in hospitals 4. Availment of welfare services 5. Application for
work/ employment 6. Pre-requisite for voter's ID. The card may also be used for
private transactions such as: 1. Opening of bank accounts 2. Encashment of
checks 3. Applications for loans, credit cards, water, power, telephones, pagers,

etc. 4. Purchase of stocks 5. Application for work/employment 6. Insurance claims

7. Receipt of payments, checks, letters, valuables, etc. The new identification
system would tremendously improve and uplift public service in our country to the
benefit of Filipino citizens and resident aliens. It would promote, facilitate and
speed up legitimate transactions with government offices as well as with private
and business entities. Experience tells us of the constant delays and
inconveniences the public has to suffer in availing of basic public services and
social security benefits because of inefficient and not too reliable means of
identification of the beneficiaries.
2. ID.; ID.; SALIENT FEATURES. Thus, in the "Primer on the Social Security Card
and Administrative Order No. 308" issued by the SSS, a lead agency in the
implementation of the said order, the following salient features are mentioned:
1. A.O. 308 merely establishes the standards for I.D. cards issued by key
government agencies such as SSS and GSIS. 2. It does not establish a national I.D.
system; neither does it require a national I.D. card for every person. 3. The use of
the I.D. is voluntary. 4. The I.D. is not required for delivery of any government
service. Everyone has the right to basic government services as long as he is
qualified under existing laws. 5. The I.D. cannot and will not in any way be used to
prevent one to travel. 6. There will be no discrimination. Non-holders of the
improved I.D. are still entitled to the same services but will be subjected to the
usual rigid identification and verification beforehand.
3. ID.; ID.; EXERCISE OF PRESIDENT'S QUASI-LEGISLATIVE POWER VESTED TO HIM
UNDER ADMINISTRATIVE CODE OF 1987. The Administrative Code of 1987 has
unequivocally vested the President with quasi-legislative powers in the form of
executive orders, administrative orders, proclamations, memorandum orders and
circulars and general or special orders. An administrative order, like the one under
which the new identification system is embodied, has its peculiar meaning under
the 1987 Administrative Code. The National Computerized Identification Reference
system was established pursuant to the aforequoted provision precisely because
its principal purpose, as expressly stated in the order, is to provide the people
with "the facility to conveniently transact business" with the various government
agencies providing basic services. Being the "administrative head," it is
unquestionably the responsibility of the President to find ways and means to
improve the government bureaucracy, and make it more professional, efficient
and reliable, specially those government agencies and instrumentalities which
provide basic services and which the citizenry constantly transact with, like the
Government Service Insurance System (GSIS), Social Security System (SSS) and
National Statistic Office (NSO). The National computerized ID system is one such
advancement. To emphasize, the new identification reference system is created to
streamline the bureaucracy, cut the red tape and ultimately achieve
administrative efficiency. The project, therefore, relates to, is an appropriate
subject and falls squarely within the ambit of the Chief Executive's administrative
power under which, in order to successfully carry out his administrative duties, he
has been granted by law quasi-legislative powers, quoted above. A.O. No. 308 was
promulgated by the President pursuant to the quasi-legislative powers expressly

granted to him by law and in accordance with his duty as administrative head.
Hence, the contention that the President usurped the legislative prerogatives of
Congress has no firm basis.
4. ID.; ID.; PREMATURE FOR JUDICIAL INQUIRY. Having resolved that the
President has the authority and prerogative to issue A.O. No. 308, I submit that it
is premature for the Court to determine the constitutionality or unconstitutionality
of the National Computerized Identification Reference System. Basic in
constitutional law is the rule that before the court assumes jurisdiction over and
decide constitutional issues, the following requisites must first be satisfied: 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) the resolution of the constitutional question must be
necessary to the resolution of the case. In this case, it is evident that the first
element is missing. Judicial intervention calls for an actual case or controversy
which is defined as "an existing case or controversy that is appropriate or ripe for
determination, not conjectural or anticipatory." Justice Isagani A. Cruz further
expounds that "(a) justifiable controversy is thus distinguished from a difference
or dispute of a hypothetical or abstract character or from one that is academic or
moot. The controversy must be definite and concrete, touching the legal relations
of parties having adverse legal interests. It must be a real and substantial
controversy admitting of special relief through a decree that is conclusive in
character, as distinguished from an opinion advising what the law would be upon
a hypothetical state of facts. . . ." A.O. No. 308 does not create any concrete or
substantial controversy. It provides the general framework of the National
Computerized Identification Reference System and lays down the basic standards
(efficiency, convenience and prevention of fraudulent transactions) for its
creation. But as manifestly indicated in the subject order, it is the Inter-Agency
Coordinating Committee (IACC) which is tasked to research, study and formulate
the guidelines and parameters for the use of Biometrics Technology and in
computer application designs that will define and give substance to the new
system. This petition is, thus, premature considering that the IACC is still in the
process of doing the leg work and has yet to codify and formalize the details of
the new system.

5. ID.; ID.; DOES NOT VIOLATE THE CONSTITUTIONAL RIGHT TO PRIVACY. There
is nothing in A.O. No. 308, as it is worded, to suggest that the advanced methods
of the Biometrics Technology. Consequently, the choice of the particular form and
extent of Biometrics Technology that may pose danger to the right of privacy will
be adopted. The standards set in A.O. No. 308 for the adoption of the new system
are clear-cut and unequivocably spelled out in the "WHEREASES" and body of the
order, namely, the need to provide citizens and foreign residents with the facility
to conveniently transact business with basic service and social security providers
and other government instrumentalities; the computerized system is intended

toproperly and efficiently identify persons seeking basic services or social security
and reduce, if not totally eradicate fraudulent transactions and misrepresentation;
the national identification reference system is established among the key basic
services and social security providers; and finally, the IACC Secretariat shall
coordinate with different Social Security and Services Agencies to establish
the standards in the use of Biometrics Technology. Consequently, the choice of the
particular form and extent of Biometrics Technology that will be applied and the
parameters for its use (as will be defined in the guidelines) will necessarily and
logically be guided, limited and circumscribed by the afore-stated standards. The
fear entertained by the majority on the potential dangers of this new technology
is thus securedly allayed by the specific limitations set by the above-mentioned
standards. More than this, the right to privacy is well-ensconced in and directly
protected by various provisions of the Bill of Rights, the Civil Code, the Revised
Penal Code, and certain special laws, all so painstakingly and resourcefully
catalogued in the majority opinion. Many of these laws provide penalties for their
violation in the form of imprisonment, fines, or damages. These laws will serve as
powerful deterrents not only in the establishment of any administrative rule that
will violate the constitutionally protected right to privacy, but also to would-be
transgressors of such right.
6. ID.; ID.; DOES NOT REQUIRE THE TRANSFER OF APPROPRIATION BUT A POOLING
OF FUNDS AND RESOURCES BY THE VARIOUS GOVERNMENT AGENCIES INVOLVED
IN THE PROJECT. On the issue of funding, the majority submits that Section 6
of A.O. No. 308, which allows the government agencies included in the new
system to obtain funding from their respective budgets, is unconstitutional for
being an illegal transfer of appropriations. It is not so. The budget for the national
identification system cannot be deemed a transfer of funds since the same is
composed of and will be implemented by the member government agencies.
Moreover, these agencies particularly the GSIS and SSS have been issuing some
form of identification or membership card. The improved ID cards that will be
issued under this new system would just take place of the old identification cards
and budget-wise, the funds that were being used to manufactured the old ID
cards, which are usually accounted for under the "Supplies and Materials" item of
the Government Accounting and Auditing Manual, could now be utilized to fund
the new cards. Hence, what is envisioned is not a transfer of appropriations but a
pooling of funds and resources by the various government agencies involved in
the project.
MENDOZA, J., dissenting opinion:
1. POLITICAL LAW; NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE
SYSTEM (A. O. NO. 308); BASED ON DATA WHICH THE GOVERNMENT AGENCIES
INVOLVED HAVE ALREADY BEEN REQUIRING INDIVIDUALS MAKING USE OF THEIR
SERVICES TO GIVE. J. Mendoza does not see how from the bare provisions of
the Order, the full text of which is set forth in the majority opinion, petitioner and
the majority can conclude that the Identification Reference System establishes
such comprehensive personal information dossiers that can destroy individual

privacy. So far as the Order provides, all that is contemplated is an identification

system based on data which the government agencies involved have already
been requiring individuals making use of their services to give.
2. ID.; ID.; SIMPLY ORGANIZES SERVICE AGENCIES OF THE GOVERNMENT TO
FACILITATE THE IDENTIFICATION OF PERSONS SEEKING BASIC SERVICES AND
SOCIAL SECURITY. More specifically, the question is whether the establishment
of the Identification Reference System will not result in the compilation of massive
dossiers on individuals which, beyond their use for identification, can become
instruments of thought control. So far, the text of A.O. No. 308 affords no basis for
believing that the data gathered can be used for such sinister purpose. As already
stated, nothing that is not already being required by the concerned agencies of
those making use of their services is required by the Order in question. The Order
simply organizes service agencies of the government into a System for the
purpose of facilitating the identification of persons seeking basic services and
social security. Thus, the whereas clauses of A.O. No. 308 state: . . . . . . . . . The
application of biometric technology and the standardization of computer designs
can provide service agencies with precise identification of individuals, but what is
wrong with that?
3. ID.; ID.; NO MORE THAN A DIRECTIVE TO GOVERNMENT AGENCIES WHICH THE
PRESIDENT HAS ISSUED IN HIS CAPACITY AS ADMINISTRATIVE HEAD. A.O. No.
308 is no more than a directive to government agencies which the President of
the Philippines has issued in his capacity as administrative head. It is not a
statute. It confers no right; it imposes no duty; it affords no protection; it creates
no office. It is, as its name indicates, a mere administrative order, the precise
nature of which is given in the following excerpt from the decision in the early
case of Olsen & Co. v. Herstein: [It] is nothing more or less than a command from
a superior to an inferior. It creates no relation except between the official who
issues it and the official who receives it. Such orders, whether executive or
departmental, have for their object simply the efficient and economical
administration of the affairs of the department to which or in which they are
issued in accordance with the law governing the subject-matter. They are
administrative in their nature and do not pass beyond the limits of the department
to which they are directed or in which they are published, and, therefore, create
no rights in third persons. They are based on, and are the product of, a
relationship in which power is their source and obedience their
object. Disobedience to or deviation from such an order can be punished only by
the power which issued it; and, if that power fails to administer the corrective,
then the disobedience goes unpunished. In that relationship no third person or
official may intervene,. not even the courts. Such orders may be very temporary,
they being subject to instant revocation or modification by the power which
published them. Their very nature, as determined by the relationship which
produced them, demonstrates clearly, the impossibility of any other person
enforcing them except the one who created them. An attempt on the part of the
courts to enforce such orders would result not only in confusion but, substantially,
in departmental anarchy also.

4. CONSTITUTIONAL LAW; BILL OF RIGHTS; RIGHT TO PRIVACY; DOES NOT BAR ALL
INCURSIONS INTO INDIVIDUAL PRIVACY. Indeed, the majority concedes that "the
right of privacy does not bar all incursions into individual privacy. . . [only that
such] incursions into the right must be accompanied by proper safeguards and
well-defined standards to prevent unconstitutional invasions." In the case of the
Identification Reference System, the purpose is to facilitate the transaction of
business with service agencies of the government and to prevent fraud and
misrepresentation. The personal identification of an individual can facilitate his
treatment in any government hospital in case of emergency. On the other hand,
the delivery of material assistance, such as free medicines, can be protected from
fraud or misrepresentation as the absence of a data base makes it possible for
unscrupulous individuals to obtain assistance from more than one government
agency.
caIDSH

DECISION
PUNO, J :
p

The petition at bar is a commendable effort on the part of Senator Blas F. Ople to
prevent the shrinking of the right to privacy, which the revered Mr. Justice
Brandeis considered as "the most comprehensive of rights and the right most
valued
by
civilized
men.'' 1 Petitioner
Ople
prays
that
we
invalidate Administrative Order No. 308 entitled "Adoption of a National
Computerized Identification Reference System" on two important constitutional
grounds, viz: one, it is a usurpation of the power of Congress to legislate, and two,
it impermissibly intrudes on our citizenry's protected zone of privacy. We grant the
petition for the rights sought to be vindicated by the petitioner need stronger
barriers against further erosion.
cdphil

A.O. No. 308 was issued by President Fidel V. Ramos on December 12, 1996 and
reads as follows:
"ADOPTION OF A NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE
SYSTEM
WHEREAS, there is a need to provide Filipino citizens and foreign residents
with the facility to conveniently transact business with basic service and
social security providers and other government instrumentalities;
WHEREAS, this will require a computerized system to properly and
efficiently identify persons seeking basic services on social security and
reduce,
if
not
totally
eradicate,
fraudulent
transactions
and
misrepresentations;

WHEREAS, a concerted and collaborative effort among the various basic

services and social security providing agencies and other government
instrumentalities is required to achieve such a system;
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the
Philippines, by virtue of the powers vested in me by law, do hereby direct
the following:

SEC. 1. Establishment of a National Computerized Identification Reference

System. A decentralized Identification Reference System among the key
basic services and social security providers is hereby established.
SEC. 2. Inter-Agency Coordinating Committee. An Inter-Agency
Coordinating Committee (IACC) to draw-up the implementing guidelines
and oversee the implementation of the System is hereby created, chaired
by the Executive Secretary, with the following as members:
Head, Presidential Management Staff
Secretary, National Economic Development Authority
Secretary, Department of the Interior and Local Government
Secretary, Department of Health
Administrator, Government Service Insurance System,
Administrator, Social Security System,
Administrator, National Statistics Office
Managing Director, National Computer Center.
SEC. 3. Secretariat. The National Computer Center (NCC) is hereby
designated as secretariat to the IACC and as such shall provide
administrative and technical support to the IACC.
SEC. 4. Linkage Among Agencies. The Population Reference Number
(PRN) generated by the NSO shall serve as the common reference number
to establish a linkage among concerned agencies. The IACC Secretariat
shall coordinate with the different Social Security and Services Agencies to
establish the standards in the use of Biometrics Technology and in
computer application designs of their respective systems.
SEC. 5. Conduct of Information Dissemination Campaign. The Office of
the Press Secretary, in coordination with the National Statistics Office, the
GSIS and SSS as lead agencies and other concerned agencies shall
undertake a massive tri-media information dissemination campaign to

educate and raise public awareness on the importance and use of the PRN
and the Social Security Identification Reference.
SEC. 6. Funding. The funds necessary for the implementation of the
system shall be sourced from the respective budgets of the concerned
agencies.
SEC. 7. Submission of Regular Reports. The NSO, GSIS and SSS shall
submit regular reports to the Office of the President, through the IACC, on
the status of implementation of this undertaking.
SEC. 8. Effectivity.
immediately.

This

Administrative

Order

shall

take

effect

DONE in the City of Manila, this 12th day of December in the year of Our
Lord, Nineteen Hundred and Ninety-Six.
(SGD.) FIDEL V. RAMOS"

A.O. No. 308 was published in four newspapers of general circulation on January
22, 1997 and January 23, 1997. On January 24, 1997, petitioner filed the instant
petition against respondents, then Executive Secretary Ruben Torres and the
heads of the government agencies, who as members of the Inter-Agency
Coordinating Committee, are charged with the implementation of A.O. No. 308. On
April 8, 1997, we issued a temporary restraining order enjoining its
implementation.
Petitioner contends:
"A. THE ESTABLISHMENT OF A NATIONAL COMPUTERIZED IDENTIFICATION
REFERENCE SYSTEM REQUIRES A LEGISLATIVE ACT. THE ISSUANCE OF A.O.
NO. 308 BY THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES IS,
THEREFORE, AN UNCONSTITUTIONAL USURPATION OF THE LEGISLATIVE
POWERS OF THE CONGRESS OF THE REPUBLIC OF THE PHILIPPINES.
B. THE APPROPRIATION OF PUBLIC FUNDS BY THE PRESIDENT FOR THE
IMPLEMENTATION OF A.O. NO. 308 IS AN UNCONSTITUTIONAL USURPATION
OF THE EXCLUSIVE RIGHT OF CONGRESS TO APPROPRIATE PUBLIC FUNDS
FOR EXPENDITURE.
C. THE IMPLEMENTATION OF A.O. NO. 308 INSIDIOUSLY LAYS THE
GROUNDWORK FOR A SYSTEM WHICH WILL VIOLATE THE BILL OF RIGHTS
ENSHRINED IN THE CONSTITUTION."

Respondents counter-argue:
A. THE INSTANT PETITION IS NOT A JUSTICIABLE CASE AS WOULD WARRANT
A JUDICIAL REVIEW;

B. A.O. NO. 308 [1996] WAS ISSUED WITHIN THE EXECUTIVE AND
ADMINISTRATIVE POWERS OF THE PRESIDENT WITHOUT ENCROACHING ON
THE LEGISLATIVE POWERS OF CONGRESS;
C. THE FUNDS NECESSARY FOR THE IMPLEMENTATION OF
IDENTIFICATION REFERENCE SYSTEM MAY BE SOURCED FROM
BUDGETS OF THE CONCERNED AGENCIES;
D. A.O.

NO.

PRIVACY.

308 [1996]

PROTECTS

AN

INDIVIDUAL'S

INTEREST

THE
THE
IN

We now resolve.
I
As is usual in constitutional litigation, respondents raise the threshold issues
relating to the standing to sue of the petitioner and the justiciability of the case at
bar. More specifically, respondents aver that petitioner has no legal interest to
uphold and that the implementing rules of A.O. No. 308 have yet to be
promulgated.
These submissions do not deserve our sympathetic ear. Petitioner Ople is a
distinguished member of our Senate. As a Senator, petitioner is possessed of the
requisite standing to bring suit raising the issue that the issuance of A.O. No.
308 is a usurpation of legislative power. 4 As taxpayer and member of the
Government Service Insurance System (GSIS), petitioner can also impugn the
legality of the misalignment of public funds and the misuse of GSIS funds to
implement A.O. No. 308.

The ripeness for adjudication of the petition at bar is not affected by the fact that
the implementing rules of A.O. No. 308have yet to be promulgated. Petitioner
Ople assails A.O. No. 308 as invalid per se and as infirmed on its face. His action is
not premature for the rules yet to be promulgated cannot cure its fatal defects.
Moreover, the respondents themselves have started the implementation of A.O.
No. 308 without waiting for the rules. As early as January 19, 1997, respondent
Social Security System (SSS) caused the publication of a notice to bid for the
manufacture of the National Identification (ID) card. 6Respondent Executive
Secretary Torres has publicly announced that representatives from the GSIS and
the SSS have completed the guidelines for the national identification
system. 7 All signals from the respondents show their unswerving will to
implement A.O. No. 308 and we need not wait for the formality of the rules to pass
judgment on its constitutionality. In this light, the dissenters insistence that we
tighten the rule on standing is not a commendable stance as its result would be to
throttle an important constitutional principle and a fundamental right.
II

We now come to the core issues. Petitioner claims that A.O. No. 308 is not a mere
administrative order but a law and hence, beyond the power of the President to
issue. He alleges that A.O. No. 308 establishes a system of identification that is
all-encompassing in scope, affects the life and liberty of every Filipino citizen and
foreign resident, and more particularly, violates their right to privacy.
Petitioner's sedulous concern for the Executive not to trespass on the lawmaking
domain of Congress is understandable. The blurring of the demarcation line
between the power of the Legislature to make laws and the power of the
Executive to execute laws will disturb their delicate balance of power and cannot
be allowed. Hence, the exercise by one branch of government of power belonging
to another will be given a stricter scrutiny by this Court.
The line that delineates Legislative and Executive power is not
indistinct. Legislative power is "the authority, under the Constitution, to make
laws, and to alter and repeal them." 8 The Constitution, as the will of the people
in their original, sovereign and unlimited capacity, has vested this power in the
Congress of the Philippines.

The grant of legislative power to Congress is

broad, general and comprehensive.

10

The legislative body possesses plenary

power for all purposes of civil government. 11 Any power, deemed to be

legislative by usage and tradition, is necessarily possessed by Congress,
unless the Constitution has lodged it elsewhere. 12 In fine, except as limited
by the Constitution, either expressly or impliedly, legislative power embraces all
subjects and extends to matters of general concern or common interest.

13

While Congress is vested with the power to enact laws, the President executes

15 It is generally
defined as the power to enforce and administer the laws. 16 It is the power of
carrying the laws into practical operation and enforcing their due observance. 17
the laws.

14

The executive power is vested in the President.

As head of the Executive Department, the President is the Chief Executive. He

represents the government as a whole and sees to it that all laws are enforced by
the officials and employees of his department. 18 He has control over the
executive department, bureaus and offices. This means that he has the authority
to assume directly the functions of the executive department, bureau and office,
or interfere with the discretion of its officials. 19 Corollary to the power of
control, the President also has the duty of supervising the enforcement of laws for
the maintenance of general peace and public order. Thus, he is
granted administrative power over bureaus and offices under his control to enable
him to discharge his duties effectively.

20

Administrative power is concerned with the work of applying policies and

enforcing orders as determined by proper governmental organs. 21 It enables
the President to fix a uniform standard of administrative efficiency and check the
official conduct of his agents.
rules and regulations.

22

To this end, he can issue administrative orders,

Prescinding from these precepts, we hold that A.O. No. 308 involves a subject
that is not appropriate to be covered by an administrative order. An
administrative order is:
"Sec. 3. Administrative Orders. Acts of the President which relate to
particular aspects of governmental operation in pursuance of his duties as
administrative head shall be promulgated in administrative orders."

23

An administrative order is an ordinance issued by the President which relates to

specific aspects in the administrative operation of government. It must be in
harmony with the law and should be for the sole purpose of implementing the
law and carrying out the legislative policy. 24 We reject the argument that
A.O. No. 308 implements the legislative policy of the Administrative Code of
1987. The Code is a general law and "incorporates in a unified document the
major structural, functional and procedural principles of governance" 25 and
"embodies changes in administrative structures and procedures designed to
serve the people." 26 The Code is divided into seven (7) Books: Book I deals
with Sovereignty and General Administration, Book II with the Distribution of
Powers of the three branches of Government, Book III on the Office of the
President, Book IV on the Executive Branch, Book V on the Constitutional
Commissions, Book VI on National Government Budgeting, and Book VII on
Administrative Procedure. These Books contain provisions on the organization,
powers and general administration of the executive, legislative and judicial
branches of government, the organization and administration of departments,
bureaus and offices under the executive branch, the organization and functions
of the Constitutional Commissions and other constitutional bodies, the rules on
the national government budget, as well as guidelines for the exercise by
administrative agencies of quasi-legislative and quasi-judicial powers. The Code
covers both the internal administration of government, i.e, internal
organization, personnel and recruitment, supervision and discipline, and the
effects of the functions performed by administrative officials on private
individuals or parties outside government.

27

It cannot be simplistically argued that A.O. No. 308 merely implements the
Administrative Code of 1987. It establishes for the first time a National
Computerized Identification Reference System. Such a System requires a delicate
adjustment of various contending state policies the primacy of national

security, the extent of privacy interest against dossier-gathering by government,

the choice of policies, etc. Indeed, the dissent of Mr. Justice Mendoza states that
the A.O. No. 308 involves the all-important freedom of thought. As said
administrative order redefines the parameters of some basic rights of our citizenry
vis-a-vis the State as well as the line that separates the administrative power of
the President to make rules and the legislative power of Congress, it ought to be
evident that it deals with a subject that should be covered by law.
Nor is it correct to argue as the dissenters do that A.O. No. 308 is not a law
because it confers no right, imposes no duty, affords no protection, and creates no
office. Under A.O. No. 308, a citizen cannot transact business with government
agencies delivering basic services to the people without the contemplated
identification card. No citizen will refuse to get this identification card for no one
can avoid dealing with government. It is thus clear as daylight that without the ID,
a citizen will have difficulty exercising his rights and enjoying his privileges. Given
this reality, the contention that A.O. No. 308 gives no right and imposes no duty
cannot stand.
Again, with due respect, the dissenting opinions unduly expand the limits of
administrative legislation and consequently erodes the plenary power of Congress
to make laws. This is contrary to the established approach defining the traditional
limits of administrative legislation. As well stated by Fisher: ". . . Many regulations
however, bear directly on the public. It is here that administrative legislation must
be restricted in its scope and application. Regulations are not supposed to be a
substitute for the general policy-making that Congress enacts in the form of a
public law. Although administrative regulations are entitled to respect, the
authority to prescribe rules and regulations is not an independent source of power
to make laws."28
III
Assuming, arguendo, that A.O. No. 308 need not be the subject of a law, still it
cannot pass constitutional muster as an administrative legislation because facially
it violates the right to privacy. The essence of privacy is the "right to be let

alone." 29In the 1965 case of Griswold v. Connecticut, 30 the United States
Supreme Court gave more substance to the right of privacy when it ruled that the
right has a constitutional foundation. It held that there is a right of privacy which
can be found within the penumbras of the First, Third, Fourth, Fifth and Ninth
Amendments,

31 viz:

"Specific guarantees in the Bill of Rights have penumbras formed by

emanations from these guarantees that help give them life and substance .
. . Various guarantees create zones of privacy. The right of association
contained in the penumbra of the First Amendment is one, as we have
seen. The Third Amendment in its prohibition against the quartering of
soldiers 'in any house' in time of peace without the consent of the owner is
another facet of that privacy. The Fourth Amendment explicitly affirms the

'right of the people to be secure in their persons, houses, papers, and

effects, against unreasonable searches and seizures.' The Fifth Amendment
in its Self-Incrimination Clause enables the citizen to create a zone of
privacy which government may not force him to surrender to his detriment.
The Ninth Amendment provides: 'The enumeration in the Constitution, of
certain rights, shall not be construed to deny or disparage others retained
by the people.'"

In the 1968 case of Morfe v. Mutuc, 32 we adopted the Griswold ruling

that there is a constitutional right to privacy. Speaking thru Mr. Justice, later
Chief Justice, Enrique Fernando, we held:
"xxx xxx xxx
The Griswold case invalidated a Connecticut statute which made the use of
contraceptives a criminal offense on the ground of its amounting to an
unconstitutional invasion of the right of privacy of married persons;
rightfully it stressed "a relationship lying within the zone of privacy created
by several fundamental constitutional guarantees." It has wider
implications though. The constitutional right to privacy has come into its
own.
So it is likewise in our jurisdiction. The right to privacy as such is accorded
recognition independently of its identification with liberty; in itself, it is fully
deserving of constitutional protection. The language of Prof. Emerson is
particularly apt: 'The concept of limited government has always included
the idea that governmental powers stop short of certain intrusions into the
personal life of the citizen. This is indeed one of the basic distinctions
between absolute and limited government. Ultimate and pervasive control
of the individual, in all aspects of his life, is the hallmark of the absolute
state. In contrast, a system of limited government safeguards a private
sector, which belongs to the individual, firmly distinguishing it from the
public sector, which the state can control. Protection of this private sector
protection, in other words, of the dignity and integrity of the individual
has become increasingly important as modern society has developed. All
the forces of a technological age industrialization, urbanization, and
organization operate to narrow the area of privacy and facilitate intrusion
into it. In modern terms, the capacity to maintain and support this enclave
of private life marks the difference between a democratic and a totalitarian
society.'"

Indeed, if we extend our judicial gaze we will find that the right of privacy
is recognized and enshrined in several provisions of our Constitution.
expressly recognized in Section 3(1) of the Bill of Rights:

33 It

"Sec. 3. (1) The privacy of communication and correspondence shall be

inviolable except upon lawful order of the court, or when public safety or
order requires otherwise as prescribed by law."

is

Other facets of the right to privacy are protected in various provisions of

the Bill of Rights, viz:

34

"Sec. 1. No person shall be deprived of life, liberty, or property without due

process of law, nor shall any person be denied the equal protection of the
laws.
Sec. 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.
xxx xxx xxx
Sec. 6. The liberty of abode and of changing the same within the limits
prescribed by law shall not be impaired except upon lawful order of the
court. Neither shall the right to travel be impaired except in the interest of
national security, public safety, or public health, as may be provided by law.
xxx xxx xxx.
Sec. 8. The right of the people, including those employed in the public and
private sectors, to form unions, associations, or societies for purposes not
contrary to law shall not be abridged.
Sec. 17. No person shall be compelled to be a witness against himself."

Zones of privacy are likewise recognized and protected in our laws. The Civil
Code provides that "[e]very person shall respect the dignity, personality, privacy
and peace of mind of his neighbors and other persons" and punishes as
actionable torts several acts by a person of meddling and prying into the privacy
of another. 35 It also holds a public officer or employee or any private individual
liable for damages for any violation of the rights and liberties of another
person,

36

and

communications.

recognizes

37

the

privacy

of

letters

and

other

private

The Revised Penal Code makes a crime the violation of

38 the revelation of trade and industrial secrets, 39 and

trespass to dwelling. 40 Invasion of privacy is an offense inspecial laws like the
Anti-Wiretapping
Law, 41 the Secrecy
of
Bank
Deposits
Act 42 and
the Intellectual
Property
Code. 43 TheRules
of
Court on
privileged
communication likewise recognize the privacy of certain information. 44
secrets by an officer,

Unlike the dissenters, we prescind from the premise that the right to privacy is a
fundamental right guaranteed by the Constitution, hence, it is the burden of
government to show that A.O. No. 308 is justified by some compelling state
interest and that it is narrowly drawn. A.O. No. 308 is predicated on two
considerations: (1) the need to provide our citizens and foreigners with the facility
to conveniently transact business with basic service and social security providers
and other government instrumentalities and (2) the need to reduce, if not totally
eradicate, fraudulent transactions and misrepresentations by persons seeking
basic services. It is debatable whether these interests are compelling enough to
warrant the issuance of A.O. No. 308. But what is not arguable is the broadness,
the vagueness, the overbreadth of A.O. No.308 which if implemented will put our
people's right to privacy in clear and present danger.
The heart of A.O. No. 308 lies in its Section 4 which provides for a Population
Reference Number (PRN) as a "common reference number to establish a linkage
among concerned agencies" through the use of "Biometrics Technology" and
"computer application designs."
Biometry or biometrics is "the science of the application of statistical methods to
biological facts; a mathematical analysis of biological data." 45 The term
"biometrics" has now evolved into a broad category of technologies which provide
precise confirmation of an individual's identity through the use of the individual's

own
physiological
and
behavioral
characteristics. 46A physiological
characteristic is a relatively stable physical characteristic such as a fingerprint,
retinal scan, hand geometry or facial features. A behavioral characteristic is
influenced by the individual's personality and includes voice print, signature and
keystroke. 47 Most biometric identification systems use a card or personal
identification number (PIN) for initial identification. The biometric measurement is
used to verify that the individual holding the card or entering the PIN is the
legitimate owner of the card or PIN.

48

A most common form of biological encoding is finger-scanning where technology

scans a fingertip and turns the unique pattern therein into an individual number
which is called a biocrypt. The biocrypt is stored in computer data banks 49 and
becomes a means of identifying an individual using a service. This technology
requires one's fingertip to be scanned every time service or access is
provided. 50 Another method is the retinal scan. Retinal scan technology
employs optical technology to map the capillary pattern of the retina of the eye.

This technology produces a unique print similar to a finger print. 51Another

biometric method is known as the "artificial nose." This device chemically
analyzes the unique combination of substances excreted from the skin of

people. 52 The latest on the list of biometric achievements is the thermogram.

Scientists have found that by taking pictures of a face using infrared cameras, a
unique heat distribution pattern is seen. The different densities of bone, skin, fat
and blood vessels all contribute to the individual's personal "heat signature."

53

In the last few decades, technology has progressed at a galloping rate. Some
science fictions are now science facts. Today, biometrics is no longer limited to
the use of fingerprint to identify an individual. It is a new science that uses
various technologies in encoding any and all biological characteristics of an
individual for identification. It is noteworthy that A.O. No.308 does not state what
specific biological characteristics and what particular biometrics technology shall
be used to identify people who will seek its coverage. Considering the banquet of
options available to the implementors of A.O. No. 308, the fear that it threatens
the right to privacy of our people is not groundless.
A.O. No. 308 should also raise our antennas for a further look will show that it
does not state whether encoding of data is limited to biological information alone
for identification purposes. In fact, the Solicitor General claims that the adoption
of the Identification Reference System will contribute to the "generation of
population data for development planning." 54 This is an admission that the
PRN will not be used solely for identification but for the generation of other data
with remote relation to the avowed purposes of A.O. No. 308. Clearly, the
indefiniteness of A.O. No. 308 can give the government the roving authority to
store and retrieve information for a purpose other than the identification of the
individual through his PRN .
The potential for misuse of the data to be gathered under A.O. No. 308 cannot be
underplayed as the dissenters do. Pursuant to said administrative order, an
individual must present his PRN everytime he deals with a government agency to
avail of basic services and security. His transactions with the government agency
will necessarily be recorded whether it be in the computer or in the
documentary file of the agency. The individual's file may include his transactions
for loan availments, income tax returns, statement of assets and liabilities,
reimbursements for medication, hospitalization, etc. The more frequent the use of
the PRN, the better the chance of building a huge and formidable information
base through the electronic linkage of the files. 55 The data may be gathered
for gainful and useful government purposes; but the existence of this vast
reservoir of personal information constitutes a covert invitation to misuse, a
temptation that may be too great for some of our authorities to resist.

56

We can even grant, arguendo, that the computer data file will be limited to the
name,
address
and
other
basic
personal
information
about
the
individual. 57 Even that hospitable assumption will not save A.O. No. 308 from
constitutional infirmityfor again said order does not tell us in clear and categorical

terms how these information gathered shall be handled. It does not provide who
shall control and access the data, under what circumstances and for what
purpose. These factors are essential to safeguard the privacy and guaranty the
integrity of the information. 58 Well to note, the computer linkage gives other
government agencies access to the information. Yet, there are no controls to
guard against leakage of information. When the access code of the control
programs of the particular computer system is broken, an intruder, without fear of
sanction or penalty, can make use of the data for whatever purpose, or worse,
manipulate the data stored within the system.59

It is plain and we hold that A.O. No. 308 falls short of assuring that personal
information which will be gathered about our people will only be processed
for unequivocally specified purposes. 60 The lack of proper safeguards in this
regard of A.O. No. 308 may interfere with the individual's liberty of abode and
travel by enabling authorities to track down his movement; it may also enable
unscrupulous persons to access confidential information and circumvent the right
against self-incrimination; it may pave the way for "fishing expeditions" by
government authorities and evade the right against unreasonable searches and
seizures. 61 The possibilities of abuse and misuse of the PRN, biometrics and
computer technology are accentuated when we consider that the individual lacks
control over what can be read or placed on his ID, much less verify the
correctness of the data encoded.
of Rights seeks to prevent.

62

They threaten the very abuses that the Bill

63

The ability of a sophisticated data center to generate a comprehensive cradle-tograve dossier on an individual and transmit it over a national network is one of
the most graphic threats of the computer revolution. 64 The computer is
capable of producing a comprehensive dossier on individuals out of information
given at different times and for varied purposes. 65 It can continue adding to
the stored data and keeping the information up to date. Retrieval of stored data is
simple. When information of a privileged character finds its way into the
computer, it can be extracted together with other data on the subject. 66 Once
extracted, the information is putty in the hands of any person. The end of privacy
begins.
cdphil

Though A.O. No. 308 is undoubtedly not narrowly drawn, the dissenting opinions
would dismiss its danger to the right to privacy as speculative and hypothetical.
Again, we cannot countenance such a laidback posture. The Court will not be true
to its role as the ultimate guardian of the people's liberty if it would not
immediately smother the sparks that endanger their rights but would rather wait
for the fire that could consume them.

We reject the argument of the Solicitor General that an individual has a

reasonable expectation of privacy with regard to the National ID and the use of
biometrics technology as it stands on quicksand. The reasonableness of a
person's expectation of privacy depends on a two-part test: (1) whether by his
conduct, the individual has exhibited an expectation of privacy; and (2) whether
this expectation is one that society recognizes as reasonable. 67 The factual
circumstances of the case determines the reasonableness of the
expectation. 68 However, other factors, such as customs, physical surroundings
and practices of a particular activity, may serve to create or diminish this
expectation.

69

The use of biometrics and computer technology in A.O. No.

308 does not assure the individual of a reasonable expectation of privacy. 70 As

technology
advances,
the
level
of
reasonably
expected
privacy
decreases.

71

The measure of protection granted by the reasonable expectation

diminishes as relevant technology becomes more widely accepted. 72 The

security of the computer data file depends not only on the physical inaccessibility
of the file but also on the advances in hardware and software computer
technology. A.O. No. 308 is so widely drawn that a minimum standard for a
reasonable expectation of privacy, regardless of technology used, cannot be
inferred from its provisions.
The rules and regulations to be drawn by the IACC cannot remedy this fatal
defect. Rules and regulations merely implement the policy of the law or order. On
its face, A.O. No. 308 gives the IACC virtually unfettered discretion to determine
the metes and bounds of the ID System.
Nor do our present laws provide adequate safeguards for a reasonable
expectation of privacy. Commonwealth Act No. 591penalizes the disclosure by
any person of data furnished by the individual to the NSO with imprisonment and
fine.

73

Republic Act No. 1161 prohibits public disclosure of SSS employment

records and reports. 74 These laws, however, apply to records and data with the
NSO and the SSS. It is not clear whether they may be applied to data with the
other government agencies forming part of the National ID System. The need to
clarify the penal aspect of A.O. No. 308 is another reason why its enactment
should be given to Congress.
Next, the Solicitor General urges us to validate A.O. No. 308's abridgment of the
right of privacy by using the rational relationship test. 75 He stressed that the
purposes of A.O. No. 308 are: (1) to streamline and speed up the implementation
of basic government services, (2) eradicate fraud by avoiding duplication of
services, and (3) generate population data for development planning. He

concludes that these purposes justify the incursions into the right to privacy for
the means are rationally related to the end.

76

We are not impressed by the argument. In Morfe v. Mutuc, 77 we upheld the

constitutionality of R.A. 3019, the Anti-Graft and Corrupt Practices Act, as a valid
police power measure. We declared that the law, in compelling a public officer to
make an annual report disclosing his assets and liabilities, his sources of income
and expenses, did not infringe on the individual's right to privacy. The law was
enacted to promote morality in public administration by curtailing and minimizing
the opportunities for official corruption and maintaining a standard of honesty in
the public service.

78

The same circumstances do not obtain in the case at bar. For one, R.A. 3019 is a
statute, not an administrative order. Secondly, R.A. 3019 itself is sufficiently
detailed. The law is clear on what practices were prohibited and penalized, and it
was narrowly drawn to avoid abuses. In the case at bar, A.O. No. 308 may have
been impelled by a worthy purpose, but, it cannot pass constitutional scrutiny for
it is not narrowly drawn. And we now hold that when the integrity of a
fundamental right is at stake, this court will give the challenged law,
administrative order, rule or regulation a stricter scrutiny. It will not do for the
authorities to invoke the presumption of regularity in the performance of official
duties. Nor is it enough for the authorities to prove that their act is not irrational
for a basic right can be diminished, if not defeated, even when the government
does not act irrationally. They must satisfactorily show the presence of compelling
state interests and that the law, rule, or regulation is narrowly drawn to preclude
abuses. This approach is demanded by the 1987 Constitution whose entire matrix
is designed to protect human rights and to prevent authoritarianism. In case of
doubt, the least we can do is to lean towards the stance that will not put in danger
the rights protected by the Constitution.
The case of Whalen v. Roe 79 cited by the Solicitor General is also off-line.
In Whalen, the United States Supreme Court was presented with the question of
whether the State of New York could keep a centralized computer record of the
names and addresses of all persons who obtained certain drugs pursuant to a
doctor's prescription. The New York State Controlled Substances Act of 1972
required physicians to identify patients obtaining prescription drugs enumerated
in the statute, i.e., drugs with a recognized medical use but with a potential for
abuse, so that the names and addresses of the patients can be recorded in a
centralized computer file of the State Department of Health. The plaintiffs, who
were patients and doctors, claimed that some people might decline necessary
medication because of their fear that the computerized data may be readily
available and open to public disclosure; and that once disclosed, it may stigmatize
them as drug addicts.

80 The

plaintiffs alleged that the statute invaded a

constitutionally protected zone of privacy, i.e, the individual interest in avoiding

disclosure of personal matters, and the interest in independence in making certain
kinds of important decisions. The U.S. Supreme Court held that while an
individual's interest in avoiding disclosure of personal matters is an aspect of the
right to privacy, the statute did not pose a grievous threat to establish a
constitutional violation. The Court found that the statute was necessary to aid in
the enforcement of laws designed to minimize the misuse of dangerous
drugs. The patient-identification requirement was a product of an orderly and
rational legislative decision made upon recommendation by a specially appointed
commission which held extensive hearings on the matter. Moreover, the statute
was narrowly drawn and contained numerous safeguards against indiscriminate
disclosure. The statute laid down the procedure and requirements for the
gathering, storage and retrieval of the information. It enumerated who were
authorized to access the data. It also prohibited public disclosure of the data by
imposing penalties for its violation. In view of these safeguards, the infringement
of the patients' right to privacy was justified by a valid exercise of police power. As
we discussed above, A.O. No. 308 lacks these vital safeguards.
Even while we strike down A.O. No. 308, we spell out in neon that the Court is not
per se against the use of computers to accumulate, store, process, retrieve and
transmit data to improve our bureaucracy. Computers work wonders to achieve
the efficiency which both government and private industry seek. Many information
systems in different countries make use of the computer to facilitate important
social objectives, such as better law enforcement, faster delivery of public
services, more efficient management of credit and insurance programs,
improvement
of
telecommunications
and
streamlining
of
financial
activities. 81 Used wisely, data stored in the computer could help good
administration by making accurate and comprehensive information for those who
have to frame policy and make key decisions. 82 The benefits of the computer
has
revolutionized
information
technology.
It
developed
the
internet, 83 introduced the concept of cyberspace 84 and the information
superhighway where the individual, armed only with his personal computer, may
surf and search all kinds and classes of information from libraries and databases
connected to the net.
In no uncertain terms, we also underscore that the right to privacy does not bar
all incursions into individual privacy. The right is not intended to stifle scientific
and technological advancements that enhance public service and the common
good. It merely requires that the law be narrowly focused

85

and a compelling

interest justify such intrusions. 86 Intrusions into the right must be accompanied
by proper safeguards and well-defined standards to prevent unconstitutional
invasions. We reiterate that any law or order that invades individual privacy will
be subjected by this Court to strict scrutiny. The reason for this stance was laid
down in Morfe v. Mutuc, to wit:

"The concept of limited government has always included the idea that
governmental powers stop short of certain intrusions into the personal life
of the citizen. This is indeed one of the basic distinctions between absolute
and limited government. Ultimate and pervasive control of the individual, in
all aspects of his life, is the hallmark of the absolute state. In contrast, a
system of limited government safeguards a private sector, which belongs
to the individual, firmly distinguishing it from the public sector, which the
state can control. Protection of this private sector protection, in other
words, of the dignity and integrity of the individual has become
increasingly important as modern society has developed. All the forces of a
technological age industrialization, urbanization, and organization
operate to narrow the area of privacy and facilitate intrusion into it. In
modern terms, the capacity to maintain and support this enclave of private
life marks the difference between a democratic and a totalitarian
society."

87

IV
The right to privacy is one of the most threatened rights of man living in a mass
society. The threats emanate from various sources governments, journalists,

employers, social scientists, etc. 88 In the case at bar, the threat comes from the
executive branch of government which by issuing A.O. No. 308 pressures the
people to surrender their privacy by giving information about themselves on the
pretext that it will facilitate delivery of basic services. Given the record-keeping
power of the computer, only the indifferent will fail to perceive the danger that
A.O. No. 308 gives the government the power to compile a devastating dossier
against unsuspecting citizens. It is timely to take note of the well-worded warning
of Kalvin, Jr., "the disturbing result could be that everyone will live burdened by an
unerasable record of his past and his limitations. In a way, the threat is that
because of its record-keeping, the society will have lost its benign capacity to

forget." 89 Oblivious to this counsel, the dissents still say we should not be too
quick in labelling the right to privacy as a fundamental right. We close with the
statement that the right to privacy was not engraved in our Constitution for
flattery.
IN VIEW WHEREOF, the petition is granted and Administrative Order No.
308 entitled "Adoption of a National Computerized Identification Reference
System" declared null and void for being unconstitutional.
SO ORDERED.
Bellosillo and Martinez, JJ ., concur.
Regalado, J ., in the result.

Separate Opinions

ROMERO, J ., concurring:
What marks off a man from a beast?

cda

Aside from the distinguishing physical characteristics, man is a rational being, one
who is endowed with intellect which allows him to apply reasoned judgment to
problems at hand; he has the innate spiritual faculty which can tell, not only what
is right but, as well, what is moral and ethical. Because of his sensibilities,
emotions and feelings, he likewise possesses a sense of shame. In varying
degrees as dictated by diverse cultures, he erects a wall between himself and the
outside world wherein he can retreat in solitude, protecting himself from prying
eyes and ears and their extensions, whether from individuals, or much later, from
authoritarian intrusions.
Piercing through the mists of time, we find the original Man and Woman defying
the injunction of God by eating of the forbidden fruit in the Garden. And when
their eyes were "opened," forthwith "they sewed fig leaves together, and made
themselves aprons." 1 Down the corridors of time, we find man fashioning "fig
leaves" of sorts or setting up figurative walls, the better to insulate themselves
from the rest of humanity.
Such vague stirrings of the desire "to be left alone," considered "anti-social" by
some, led to the development of the concept of "privacy," unheard of among
beasts. Different branches of science, have made their own studies of this craving
of the human spirit psychological, anthropological, sociological and
philosophical, with the legal finally giving its imprimatur by elevating it to the
status of a right, specifically a private right.
Initially recognized as an aspect of tort law, it created giant waves in legal circles
with the publication in the Harvard Law Review 2 of the trail-blazing article, "The
Right to Privacy," by Samuel D. Warren and Louis D. Brandeis.

Whether viewed as a personal or a property right, it found its way in Philippine

Constitutions and statutes; this, in spite of the fact that Philippine culture can
hardly be said to provide a fertile field for the burgeoning of said right. In fact, our
lexicographers have yet to coin a word for it in the Filipino language. Customs and
practices, being what they have always been, Filipinos think it perfectly natural
and in good taste to inquire into each other's intimate affairs.
One has only to sit through a televised talk show to be convinced that what
passes for wholesome entertainment is actually an invasion into one's private life,
leaving the interviewee embarrassed and outraged by turns.

With the overarching influence of common law and the recent advent of the
Information Age with its high-tech devices, the right to privacy has expanded to
embrace its public law aspect. The Bill of Rights of our evolving Charters, a direct
transplant from that of the United States, contains in essence facets of the right to
privacy which constitute limitations on the far-reaching powers of government.
So terrifying are the possibilities of a law such as Administrative Order No. 308 in
making inroads into the private lives of the citizens, a virtual Big Brother looking
over our shoulders, that it must, without delay, be "slain upon sight" before our
society turns totalitarian with each of us, a mindless robot.
I, therefore, VOTE for the nullification of A.O. No. 308.
VITUG, J ., concurring:
One can appreciate the concern expressed by my esteemed colleague, Mr. Justice
Reynato S. Puno, echoing that of the petitioner, the Honorable Blas F. Ople, on the
issuance of Administrative Order No. 308 by the President of the Philippines and
the dangers its implementation could bring. I find it hard, nevertheless, to
peremptorily assume at this time that the administrative order will be misused
and to thereby ignore the possible benefits that can be derived from or the merits
of, a nationwide computerized identification reference system. The great strides
and swift advances in technology render it inescapable that one day we will, at all
events, have to face up with the reality of seeing extremely sophisticated
methods of personal identification and any attempt to stop the inevitable may
either be short-lived or even futile. The imperatives, I believe, would instead be to
now install specific safeguards and control measures that may be calculated best
to ward-off probable ill effects of any such device. Here, it may be apropos to
recall the pronouncement of this Court in People vs. Nazario

that

"As a rule, a statute or [an] act may be said to be vague when it lacks
comprehensible standards that men 'of common intelligence must
necessarily guess at its meaning and differ as to its application.' It is
repugnant to the Constitution in two respects: (1) it violates due process for
failure to accord persons, especially the parties targeted by it, fair notice of
the conduct to avoid; and (2) it leaves law enforcers unbridled discretion in
carrying out its provisions and becomes an arbitrary flexing of the
Government muscle."

Administrative Order No. 308 appears to be so extensively drawn that could,

indeed, allow unbridled options to become available to its implementors
beyond the reasonable comfort of the citizens and of residents alike.
Prescinding from the foregoing, and most importantly to this instance, the subject
covered by the questioned administrative order can have far-reaching
consequences that can tell on all individuals, their liberty and privacy, that, to my
mind, should make it indispensable and appropriate to have the matter

specifically addressed by the Congress of the Philippines, the policy-making body

of our government, to which the task should initially belong and to which the
authority to formulate and promulgate that policy is constitutionally lodged.
WHEREFORE, I vote for the nullification of Administrative Order No. 308 for being
an undue and impermissible exercise of legislative power by the Executive.
PANGANIBAN, J ., concurring:
I concur only in the result and only on the ground that an executive issuance is
not legally sufficient to establish an all-encompassing computerized system of
identification in the country. The subject matter contained in AO 308 is beyond the
powers of the President to regulate without a legislative enactment.
I reserve judgment on the issue of whether a national ID system is an
infringement of the constitutional right to privacy or of the freedom of thought
until after Congress passes, if ever, a law to this effect. Only then, and upon the
filing of a proper petition, may the provisions of the statute be scrutinized by the
judiciary to determine their constitutional foundation. Until such time, the issue is
premature; and any decision thereon, speculative and academic.

Be that as it may, the scholarly discussions of Justices Romero, Puno, Kapunan

and Mendoza on the constitutional right to privacy and freedom of thought may
still become useful guides to our lawmakers, when and if Congress should
deliberate on a bill establishing a national identification system.
cdll

Let it be noted that this Court, as shown by the voting of the justices, has not
definitively ruled on these points. The voting is decisive only on the need for the
appropriate legislation, and it is only on this ground that the petition is granted by
this Court.
Davide, Jr., J ., concurs.
KAPUNAN, J ., dissenting:
The pioneering efforts of the executive to adopt a national computerized
identification reference system has met fierce opposition. It has spun dark
predictions of sinister government ploys to tamper with the citizen's right to
privacy and ominous forecasts of a return to authoritarianism. Lost in the uproar,
however, is the simple fact that there is nothing in the whole breadth and length
of Administrative Order No. 308 that suggests a taint of constitutional infirmity.
A.O. No. 308 issued by President Fidel V. Ramos on 12 December 1996 reads:
ADMINISTRATIVE ORDER NO. 308

ADOPTION OF A NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE

SYSTEM
WHEREAS, there is a need to provide Filipino citizens and foreign residents
with the facility to conveniently transact business with basic services and
social security providers and other government instrumentalities;
WHEREAS, this will require a computerized system to properly and
efficiently identify persons seeking basic services and social security and
reduce,
if
not
totally
eradicate,
fraudulent
transactions
and
misrepresentations;
WHEREAS, a concerted and collaborative effort among the various basic
services and social security providing agencies and other government
instrumentalities is required to achieve such a system;
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the
Philippines, by virtue of the powers vested in me by law, do hereby direct
the following:
SEC. 1. Establishment of a National Computerized Identification Reference
System. A decentralized Identification Reference System among the key
basic services and social security providers is hereby established.
SEC. 2. Inter-Agency Coordinating Committee. An Inter-Agency
Coordinating Committee (IACC) to draw-up the implementing guidelines
and oversee the implementation of the System is hereby created, chaired
by the Executive Secretary, with the following as members:
Head, Presidential Management Staff
Secretary, National Economic Development Authority
Secretary, Department of the Interior and Local Government
Secretary, Department of Health
Administrator, Government Service Insurance System
Administrator, Social Security System
Administrator, National Statistics Office
Managing Director, National Computer Center
SEC. 3. Secretariat. The National Computer Center (NCC) is hereby
designated as secretariat to the IACC and as such shall provide
administrative and technical support to the IACC.

SEC. 4. Linkage Among Agencies. The Population Reference Number

(PRN) generated by the NSO shall serve as the common reference number
to establish a linkage among concerned agencies. The IACC Secretariat
shall coordinate with the different Social Security and Services Agencies to
establish the standards in the use of Biometrics Technology and in
computer application designs of their respective systems.
SEC. 5. Conduct of Information Dissemination Campaign. The Office of
the Press Secretary, in coordination with the National Statistics Office, the
GSIS and SSS as lead agencies and other concerned agencies shall
undertake a massive tri-media information dissemination campaign to
educate and raise public awareness on the importance and use of the PRN
and the Social Security Identification Reference.
SEC. 6. Funding. The funds necessary for the implementation of the
system shall be sourced from the respective budgets of the concerned
agencies.
SEC. 7. Submission of Regular Reports. The NSO, GSIS and SSS shall
submit regular reports to the Office of the President, through the IACC, on
the status of implementation of this undertaking.
SEC. 8. Effectivity.
immediately.

This

Administrative

Order

shall

take

effect

DONE in the City of Manila, this 12th day of December in the year of Our
Lord, Nineteen Hundred and Ninety-Six.

In seeking to strike down A.O. No. 308 as unconstitutional, petitioner argues:

A. THE ESTABLISHMENT OF A NATIONAL COMPUTERIZED IDENTIFICATION
REFERENCE SYSTEM REQUIRES A LEGISLATIVE ACT. THE ISSUANCE OF A.O.
NO. 308 BY THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES IS,
THEREFORE, AN UNCONSTITUTIONAL USURPATION OF THE LEGISLATIVE
POWERS OF THE CONGRESS OF THE REPUBLIC OF THE PHILIPPINES.
B. THE APPROPRIATION OF PUBLIC FUNDS BY THE PRESIDENT FOR THE
IMPLEMENTATION OF A.O. NO. 308 IS AN UNCONSTITUTIONAL USURPATION
OF THE EXCLUSIVE RIGHT OF CONGRESS TO APPROPRIATE PUBLIC FUNDS
FOR EXPENDITURE.
C. THE IMPLEMENTATION OF A.O. NO. 308 INSIDIOUSLY LAYS THE
GROUNDWORK FOR A SYSTEM WHICH WILL VIOLATE THE BILL OF RIGHTS
ENSHRINED IN THE CONSTITUTION.

The National Computerized Identification Reference System, to which the NSO,

GSIS and SSS are linked as lead members of the IACC is intended to establish
uniform standards for ID cards issued by key government agencies (like the

SSS) 1 for the "efficient identification of persons." 2 Under the new system, only
one reliable and tamper-proof I.D. need be presented by the cardholder instead of
several identification papers such as passports and driver's license, 3 to able to
transact with government agencies. The improved ID can be used to facilitate
public transactions such as:
1. Payment of SSS and GSIS benefits
2. Applications for driver's license, BIR TIN, passport, marriage license,
death certificate, NBI and police clearances, and business permits
3. Availment of Medicare services in hospitals
4. Availment of welfare services
5. Application for work/employment
6. Pre-requisite for voter's ID.

The card may also be used for private transactions such as:
1. Opening of bank accounts
2. Encashment of checks
3. Applications for loans, credit cards, water, power, telephones, pagers,
etc.
4. Purchase of stocks
5. Application for work/employment
6. Insurance claims
7. Receipt of payments, checks, letters, valuables, etc.

The new identification system would tremendously improve and uplift public
service in our country to the benefit of Filipino citizens and resident aliens. It
would promote, facilitate and speed up legitimate transactions with government
offices as well as with private and business entities. Experience tells us of the
constant delays and inconveniences the public has to suffer in availing of basic
public services and social security benefits because of inefficient and not too
reliable means of identification of the beneficiaries.

Thus, in the "Primer on the Social Security Card and Administrative Order No. 308"
issued by the SSS, a lead agency in the implementation of the said order, the
following salient features are mentioned:
1. A.O. 308 merely establishes the standards for I.D cards issued by key
government agencies such as SSS and GSIS.
2. It does not establish a national I.D. system; neither does it require a
national I.D. card for every person.
3. The use of the I.D. is voluntary.
4. The I.D. is not required for delivery of any government service. Everyone
has the right to basic government services as long as he is qualified under
existing laws.
5. The I.D. cannot and will not in any way be used to prevent one to travel.
6. There will be no discrimination. Non-holders of the improved I.D. are still
entitled to the same services but will be subjected to the usual rigid
identification and verification beforehand.

I
The issue that must first be hurdled is: was the issuance of A.O No. 308 an
exercise by the President of legislative power properly belonging to Congress?
It is not.
The Administrative Code of 1987 has unequivocally vested the President with
quasi-legislative powers in the form of executive orders, administrative orders,
proclamations, memorandum orders and circulars and general or special
orders. 6An administrative order, like the one under which the new identification
system is embodied, has its peculiar meaning under the 1987 Administrative
Code:
SEC. 3. Administrative Orders. Acts of the President which relate to
particular aspects of governmental operations in pursuance of his duties as
administrative head shall be promulgated in administrative orders.

The National Computerized Identification Reference System was established

pursuant to the aforequoted provision precisely because its principal purpose, as
expressly stated in the order, is to provide the people with "the facility to
conveniently transact business" with the various government agencies providing
basic services. Being the "administrative head," it is unquestionably the
responsibility of the President to find ways and means to improve the government
bureaucracy, and make it more professional, efficient and reliable, specially those
government agencies and instrumentalities which provide basic services and

which the citizenry constantly transact with, like the Government Service
Insurance System (GSIS), Social Security System (SSS) and National Statistics
Office (NSO). The national computerized ID system is one such advancement. To
emphasize, the new identification reference system is created to streamline the
bureaucracy, cut the red tape and ultimately achieve administrative efficiency.
The project, therefore, relates to, is an appropriate subject and falls squarely
within the ambit of the Chief Executive's administrative power under which, in
order to successfully carry out his administrative duties, he has been granted by
law quasi-legislative powers, quoted above.
Understandably, strict adherence to the doctrine of separation of powers spawns
differences of opinion. For we cannot divide the branches of government into
water-tight compartments. Even if such is possible, it is neither desirable nor
feasible. Bernard Schwartz, in his work Administrative Law, A Casebook, thus
states:
To be sure, if we think of the separation of powers as carrying out the
distinction between legislation and administration with mathematical
precision and as dividing the branches of government into watertight
compartments, we would probably have to conclude that any exercise of
lawmaking authority by an agency is automatically invalid. Such a rigorous
application of the constitutional doctrine is neither desirable nor feasible;
the only absolute separation that has ever been possible was that in the
theoretical writings of a Montesquieu, who looked across at foggy England
from his sunny Gascon vineyards and completely misconstrued what he
saw.

A mingling of powers among the three branches of government is not a novel

concept. This blending of powers has become necessary to properly address the
complexities brought about by a rapidly developing society and which the
traditional branches of government have difficulty coping with.

It has been said that:

The true meaning of the general doctrine of the separation of powers
seems to be that the whole power of one department should not be
exercised by the same hands which possess the whole power of either of
the other departments, and that no one department ought to possess
directly or indirectly an overruling influence over the others. And it has
been held that this doctrine should be applied only to the powers which
because of their nature are assigned by the constitution itself to one of the
departments exclusively. Hence, it does not necessarily follow that an
entire and complete separation is either desirable or was ever intended, for
such a complete separation would be impracticable if not impossible; there
may be and frequently are areas in which executive, legislative, and
judicial powers blend or overlap; and many officers whose duties cannot be
exclusively placed under any one of these heads.

The courts have perceived the necessity of avoiding a narrow construction

of a state constitutional provision for the division of the powers of the
government into three distinct departments, for it is impractical to view the
provision from the standpoint of a doctrinaire. Thus, the modern view of
separation of powers rejects the metaphysical abstractions and reverts
instead to a more pragmatic, flexible, functional approach, giving
recognition to the fact that there may be a certain degree of blending or
admixture of the three powers of the government. Moreover, the doctrine
of separation of powers has never been strictly or rigidly applied, and
indeed could not be, to all the ramifications of state or national
governments; government would prove abortive if it were attempted to
follow the policy of separation to the letter.

In any case, A.O. No. 308 was promulgated by the President pursuant to the quasilegislative powers expressly granted to him by law and in accordance with his
duty as administrative head. Hence, the contention that the President usurped the
legislative prerogatives of Congress has no firm basis.
II
Having resolved that the President has the authority and prerogative to issue A.O.
No. 308, I submit that it is premature for the Court to determine the
constitutionality or unconstitutionality of the National Computerized Identification
Reference System.
Basic in constitutional law is the rule that before the court assumes jurisdiction
over and decide constitutional issues, the following requisites must first be
satisfied:
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
cda

4) the resolution of the constitutional question must be necessary to the

resolution of the case.

10

In this case, it is evident that the first element is missing. Judicial intervention
calls for an actual case or controversy which is defined as "an existing case or
controversy that is appropriate or ripe for determination, not conjectural or
anticipatory." 11Justice Isagani A. Cruz further expounds that "(a) justifiable
controversy is thus distinguished from a difference or dispute of a hypothetical or
abstract character or from one that is academic or moot. The controversy must be
definite and concrete, touching the legal relations of parties having adverse legal
interests. It must be a real and substantial controversy admitting of special relief

through a decree that is conclusive in character, as distinguished from an opinion

advising what the law would be upon a hypothetical state of facts. . ." 12 A.O.
No. 308 does not create any concrete or substantial controversy. It provides the
general framework of the National Computerized Identification Reference System
and lays down the basic standards (efficiency, convenience and prevention of
fraudulent transactions) for its creation. But as manifestly indicated in the subject
order, it is the Inter-Agency Coordinating Committee (IACC) which is tasked to
research, study and formulate the guidelines and parameters for the use of
Biometrics Technology and in computer application designs that will define and
give substance to the new system. 13 This petition is, thus, premature
considering that the IACC is still in the process of doing the leg work and has yet
to codify and formalize the details of the new system.

The majority opines that the petition is ripe for adjudication even without the
promulgation of the necessary guidelines in view of the fact that respondents
have begun implementation of A.O. No. 308. The SSS, in particular, has started
advertising in newspapers the invitation to bid for the production of the I.D.
cards.

14

I beg to disagree. It is not the new system itself that is intended to be

implemented in the invitation to bid but only the manufacture of the I.D. cards.
Biometrics Technology is not and cannot be used in the I.D. cards as no guidelines
therefor have yet been laid down by the IACC. Before the assailed system can be
set up, it is imperative that the guidelines be issued first.
III
Without the essential guidelines, the principal contention for invalidating the new
identification reference system that it is an impermissible encroachment on the
constitutionally recognized right to privacy is plainly groundless. There is
nothing in A.O. No. 308 to serve as sufficient basis for a conclusion that the new
system to be evolved violates the right to privacy. Said order simply provides the
system's general framework. Without the concomitant guidelines, which would
spell out in detail how this new identification system would work, the perceived
violation of the right to privacy amounts to nothing more than mere surmise and
speculation.
What has caused much of the hysteria over the National Computerized
Identification Reference System is the possible utilization of Biometrics Technology
which refers to the use of automated matching of physiological or behavioral
characteristics to identify a person that would violated the citizen's
constitutionally protected right to privacy.

The majority opinion has enumerated various forms and methods of Biometrics
Technology which if adopted in the National Computerized Identification Reference
System would seriously threaten the right to privacy. Among which are biocrypt,
retinal scan, artificial nose and thermogram. The majority also points to certain
alleged deficiencies of A O. No. 308. Thus:
1) A.O. No. 308 does not specify the particular Biometrics Technology that
shall be used for the new identification system;
2) The order does not state whether encoding of data is limited to biological
information alone for identification purposes;
3) There is no provision as to who shall control and access the data, under
what circumstances and for what purpose; and
4) There are no controls to guard against leakage of information, thus
heightening the potential for misuse and abuse.

We should not be overwhelmed by the mere mention of the Biometrics Technology

and its alleged, yet unfounded "far-reaching effects."
There is nothing in A.O. No. 308, as it is worded, to suggest that the advanced
methods of the Biometrics Technology that may pose danger to the right of
privacy will be adopted.
LexLib

The standards set in A.O. No. 308 for the adoption of the new system are clear-cut
and unequivocably spelled out in the "WHEREASES" and body of the order,
namely, the need to provide citizens and foreign residents with the facility
toconveniently transact business with basic service and social security providers
and other government instrumentalities; the computerized system is intended
to properly and efficiently identify persons seeking basic services or social
security andreduce, if not totally eradicate fraudulent transactions and
misrepresentation; the national identification reference system is established
among the key basic services and social security providers; and finally, the IACC
Secretariat shall coordinate with different Social Security and Services Agencies to
establish the standards in the use of Biometrics Technology. Consequently, the
choice of the particular form and extent of Biometrics Technology that will be
applied and the parameters for its use (as will be defined in the guidelines) will
necessarily and logically be guided, limited and circumscribed by the afore-stated
standards. The fear entertained by the majority on the potential dangers of this
new technology is thus securedly allayed by the specific limitations set by the
above-mentioned standards. More than this, the right to privacy is well-ensconced
in and directly protected by various provisions of the Bill of Rights, the Civil Code,
the Revised Penal Code, and certain special laws, all so painstakingly and
resourcefully catalogued in the majority opinion. Many of these laws provide
penalties for their violation in the form of imprisonment, fines, or damages. These
laws will serve as powerful deterrents not only in the establishment of any

administrative rule that will violate the constitutionally protected right to privacy,
but also to would-be transgressors of such right.
Relevant to this case is the ruling of the U.S. Supreme Court in Whalen
v. Roe. 15 In that case, a New York statute was challenged for requiring
physicians to identify patients obtaining prescription drugs of the statute's
"Schedule II'' category (a class of drugs having a potential for abuse and a
recognized medical use) so the names and addresses of the prescription drug
patients can be recorded in a centralized computer file maintained by the New
York State Department of Health. Some patients regularly receiving prescription
for "Schedule II" drugs and doctors who prescribed such drugs brought an action
questioning the validity of the statute on the ground that it violated the plaintiffs
constitutionally protected rights of privacy.
In a unanimous decision, the US Supreme Court sustained the validity of the
statute on the ground that the patient identification requirement is a reasonable
exercise of the State's broad police powers. The Court also held that there is no
support in the record for an assumption that the security provisions of the statute
will be administered improperly. Finally, the Court opined that the remote
possibility that judicial supervision of the evidentiary use of particular items of
stored information will not provide adequate protection against unwarranted
disclosures is not a sufficient reason for invalidating the patient-identification
program.
To be sure, there is always a possibility of an unwarranted disclosure of
confidential matters enormously accumulated in computerized data banks and in
government records relating to taxes, public health, social security benefits,
military affairs, and similar matters. But as previously pointed out, we have a
sufficient number of laws prohibiting and punishing any such unwarranted
disclosures. Anent this matter, the observation in Whalen vs. Roe is instructive:
. . . We are not unaware of the threat to privacy implicit in the accumulation
of vast amounts of personal information in computerized data banks or
other massive government files. The collection of taxes, the distribution of
welfare and social security benefits, the supervision of public health, the
direction of our Armed Forces and the enforcement of the criminal laws all
require the orderly preservation of great quantities of information, much of
which is personal in character and potentially embarrassing or harmful if
disclosed. The right to collect and use such data for public purposes is
typically accompanied by a concomitant statutory or regulatory duty to
avoid unwarranted disclosures. . .

16

The majority laments that as technology advances, the level of reasonably

expected privacy decreases. That may be true. However, courts should tread
daintily on the field of social and economic experimentation lest they impede or
obstruct the march of technology to improve public services just on the basis of

an unfounded fear that the experimentation violates one's constitutionally

protected rights. In the sobering words of Mr. Justice Brandeis:
To stay experimentation in things social and economic is a grave
responsibility. Denial of the right to experiment may be fraught with serious
consequences to the Nation. It is one of the happy incidents of the federal
system that a single courageous State may, if it citizens choose, serve as a
laboratory; and try novel social and economic experiments without risk to
the rest of the country. This Court has the power to prevent an experiment.
We may strike down the statute which embodies it on the ground that, in
our opinion, the measure is arbitrary, capricious or unreasonable. We have
power to do this, because the due process clause has been held by the
Court applicable to matters of substantive law as well as to matters of
procedure. But in the exercise of this high power, we must be ever on our
guard, lest we erect our prejudices into legal principles. If we would guide
by the light of reason, we must let our minds be bold.

17

Again, the concerns of the majority are premature precisely because there are as
yet no guidelines that will direct the Court and serve as solid basis for determining
the constitutionality of the new identification system. The Court cannot and
should not anticipate the constitutional issues and rule on the basis of guesswork.
The guidelines would, among others, determine the particular biometrics method
that would be used and the specific personal data that would be collected, provide
the safeguards (if any) and supply the details on how this new system is supposed
to work. The Court should not jump the gun on the Executive.
III
On the issue of funding, the majority submits that Section 6 of A.O. No. 308, which
allows the government agencies included in the new system to obtain funding
from their respective budgets, is unconstitutional for being an illegal transfer of
appropriations.
It is not so. The budget for the national identification system cannot be deemed a
transfer of funds since the same is composed of and will be implemented by the
member government agencies. Moreover, these agencies particularly the GSIS
and SSS have been issuing some form of identification or membership card. The
improved ID cards that will be issued under this new system would just take place
of the old identification cards and budget-wise, the funds that were being used to
manufacture the old ID cards, which are usually accounted for under the "Supplies
and Materials" item of the Government Accounting and Auditing Manual, could
now be utilized to fund the new cards. Hence, what is envisioned is not a transfer
of appropriations but a pooling of funds and resources by the various government
agencies involved in the project.

WHEREFORE, I vote to dismiss the petition.

Narvasa, C .J ., Melo and Quisumbing, JJ ., concur.

MENDOZA, J ., dissenting:
My vote is to dismiss the petition in this case.

LibLex

First. I cannot find anything in the text of Administrative Order No. 308 of the
President of the Philippines that would warrant a declaration that it is violative of
the right of privacy. So far as I can see, all the Administrative Order does is
establish an Identification Reference System involving the following
service agencies of the government:
o Presidential Management Staff
o National Economic Development Authority
o Department of the Interior and Local Government
o Department of Health
o Government Service Insurance System
o Social Security System
o National Statistics Office
o National Computer Center
create a committee, composed of the heads of the agencies
concerned, to draft rules for the System;
direct the use of the Population Reference Number (PRN) generated
by the National Census and Statistics Office as the common
reference number to link the participating agencies into an
Identification Reference System, and the adoption by the
agencies of standards in the use of biometrics technology and
computer designs; and
provide for the funding of the System from the budgets of the
agencies concerned.
Petitioner argues, however, that "the implementation of A.O. No. 308 will mean
that each and every Filipino and resident will have a file with the government
containing, at the very least, his PRN and physiological biometrics such as, but not
limited to, his facial features, hand geometry, retinal or iris pattern, DNA pattern,
fingerprints, voice characteristics, and signature analysis."

In support of his contention, petitioner quotes the following publication surfed

from the Internet:
The use of biometrics is the means by which an individual may be
conclusively
identified. There
are
two
types
of
biometric
identifiers: Physical and behavioral characteristics. Physiological biometrics
include facial features, hand geometry, retinal and iris patterns, DNA, and
fingerprints. Behavioral characteristics include voice characteristics and
signature analysis.

I do not see how from the bare provisions of the Order, the full text of which is set
forth in the majority opinion, petitioner and the majority can conclude that the
Identification Reference System establishes such comprehensive personal
information dossiers that can destroy individual privacy. So far as the Order
provides, all that is contemplated is an identification system based on data which
the government agencies involved have already been requiring individuals
making use of their services to give.
For example, under C.A. No.
enumeration, sampling or
concerning population . . .
statistics as the President

591, 2(a) the National Statistics Office collects "by

other methods, statistics and other information
social and economic institutions, and such other
may direct." In addition, it is in charge of the

administration of the Civil Register, 2 which means that it keeps records

information concerning the civil status of persons, i. e., (a) births, (b) deaths,
marriages and their annulments; (d) legitimations, (e) adoptions,
acknowledgments of natural children, (g) naturalizations, and (h) changes
name.

of
(c)
(f)
of

Other statutes giving government agencies the power to require personal

information may be cited. R.A. No. 4136, 23 gives the Land Transportation Office
the power to require applicants for a driver's license to give information regarding
the following: their full names, date of birth, height, weight, sex, color of eyes,
blood type, address, and right thumbprint; 4 whileR.A. No. 8239, 5 gives the
Department of Foreign Affairs the power to require passport applicants to give
information concerning their names, place of birth, date of birth, religious
affiliation, marital status, and citizenship.
Justice Romero, tracing the origin of privacy to the attempt of the first man and
woman to cover their nakedness with fig leaves, bemoans the fact that
technology and institutional pressures have threatened our sense of privacy. On
the other hand, the majority would have none of the Identification Reference
System "to prevent the shrinking of the right to privacy, once regarded as 'the
most comprehensive of rights and the right most valued by civilized
men." 5 Indeed, techniques such as fingerprinting or electronic photography in
banks have become commonplace. As has been observed, the teaching hospital

has come to be accepted as offering medical services that compensate for the
loss of the isolation of the sickbed; the increased capacity of applied sciences to
utilize more and more kinds of data and the consequent calls for such data have
weakened traditional resistance to disclosure. As the area of relevance, political or
scientific, expands, there is strong psychological pressure to yield some ground of
privacy.

But this is a fact of life to which we must adjust, as long as the intrusion into the
domain of privacy is reasonable. In Morfe v.Mutuc, 7 this Court dealt the coup de
grace to claims of latitudinarian scope for the right of privacy by quoting the
pungent remark of an acute observer of the social scene, Carmen GuerreroNakpil:
Privacy? What's that? There is no precise word for it in Filipino, and as far as
I know any Filipino dialect and there is none because there is no need for it.
The concept and practice of privacy are missing from conventional Filipino
life. The Filipino believes that privacy is an unnecessary imposition, an
eccentricity that is barely pardonable or, at best, an esoteric Western
afterthought smacking of legal trickery.

Justice Romero herself says in her separate opinion that the word privacy is not
even in the lexicon of Filipinos.
As to whether the right of privacy is "the most valued right," we do well to
remember the encomiums paid as well to other constitutional rights. For Professor
Zechariah Chafee, "The writ of habeas corpus is 'the most important human rights
provision in the fundamental law."' 9 For Justice Cardozo, on the other hand,
freedom of expression "is the matrix, the indispensable condition, of nearly every
other form of freedom."

10

The point is that care must be taken in assigning values to constitutional rights for
the purpose of calibrating them on the judicial scale, especially if this means
employing stricter standards of review for regulations alleged to infringe certain
rights deemed to be "most valued by civilized men."
Indeed, the majority concedes that "the right of privacy does not bar all incursions
into individual privacy . . . [only that such] incursions into the right must be
accompanied by proper safeguards and well-defined standards to prevent
unconstitutional invasions." 11 In the case of the Identification Reference
System, the purpose is to facilitate the transaction of business with service
agencies of the government and to prevent fraud and misrepresentation. The
personal identification of an individual can facilitate his treatment in any
government hospital in case of emergency. On the other hand, the delivery of
material assistance, such as free medicines, can be protected from fraud or
misrepresentation as the absence of a data base makes it possible for

unscrupulous individuals to obtain assistance from more than one government

agency.
Second. Thus, the issue in this case is not really whether A.O. No. 308 violates the
right of privacy formed by emanations from the several constitutional rights cited
by the majority. 12 The question is whether it violates freedom of thought and of
conscience guaranteed in the following provisions of our Bill of Rights (Art. III):
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.
SEC. 5. No law shall be made respecting an establishment of religion, or
prohibiting the free exercise thereof. The free exercise and enjoyment of
religious profession and worship, without discrimination or preference, shall
be forever be allowed. No religious test shall be required for the exercise of
civil or political rights.

More specifically, the question is whether the establishment of the Identification

Reference System will not result in the compilation of massive dossiers on
individuals which, beyond their use for identification, can become instruments of
thought control. So far, the text of A.O. No. 308 affords no basis for believing that
the data gathered can be used for such sinister purpose. As already stated,
nothing that is not already being required by the concerned agencies of those
making use of their services is required by the Order in question. The Order
simply organizes service agencies of the government into a System for the
purpose of facilitating the identification of persons seeking basic services and
social security. Thus, the whereas clauses of A.O. No. 308 state:
WHEREAS, there is a need to provide Filipino citizens and foreign residents
with the facility to conveniently transact business with basic services and
social security providers and other government instrumentalities;
WHEREAS, this will require a computerized system to properly and
efficiently identify persons seeking basic services and social security and
reduce,
if
not
totally
eradicate,
fraudulent
transactions
and
misrepresentations;
WHEREAS, a concerted and collaborative effort among the various basic
services and social security providing agencies and other government
instrumentalities is required to achieve such a system;

The application of biometric technology and the standardization of computer

designs can provide service agencies with precise identification of individuals,
but what is wrong with that?
LexLib

Indeed, A.O. No. 308 is no more than a directive to government agencies which
the President of the Philippines has issued in his capacity as administrative

13 It is not a statute. It confers no right; it imposes no duty; it affords no

protection; it creates no office. 14 It is, as its name indicates, a mere
head.

administrative order, the precise nature of which is given in the following excerpt
from the decision in the early case of Olsen & Co. v. Herstein:

15

[It] is nothing more or less than a command from a superior to an inferior. It

creates no relation except between the official who issues it and the official
who receives it. Such orders, whether executive or departmental, have for
their object simply the efficient and economical administration of the affairs
of the department to which or in which they are issued in accordance with
the law governing the subject-matter. They are administrative in their
nature and do not pass beyond the limits of the department to which they
are directed or in which they are published, and, therefore, create no rights
in third persons. They are based on, and are the product of, a relationship
in which power is their source and obedience their object. Disobedience to
or deviation from such an order can be punished only by the power which
issued it; and, if that power fails to administer the corrective, then the
disobedience goes unpunished. In that relationship no third person or
official may intervene, not even the courts. Such orders may be very
temporary, they being subject to instant revocation or modification by the
power which published them. Their very nature, as determined by the
relationship which produced them, demonstrates clearly the impossibility of
any other person enforcing them except the one who created them. An
attempt on the part of the courts to enforce such orders would result not
only in confusion but, substantially, in departmental anarchy also.

16

Third. There is no basis for believing that, beyond the identification of individuals,
the System will be used for illegal purposes. Nor are sanctions lacking for the
unauthorized use or disclosure of information gathered by the various agencies
constituting the System. For example, as the Solicitor General points out, C.A. No.
591, 4 penalizes the unauthorized use or disclosure of data furnished the NSO
with a fine of not more than P600.00 or imprisonment for not more than six
months or both.
At all events, at this stage, it is premature to pass on the claim that the
Identification Reference System can be used for the purpose of compiling massive
dossiers on individuals that can be used to curtail basic civil and political rights
since, if at all, this can only be provided in the implementing rules and regulations
which have yet to be promulgated. We have already stated that A.O. No. 308 is
not a statute. Even in the case of statutes, however, where implementing rules
are necessary to put them into effect, it has been held that an attack on their
constitutionality would be premature.
is all."

18

17

As Edgar in King Learputs it, "Ripeness

For, to borrow some more Shakespearean lines,

The canker galls the infants of the spring

Too oft before their buttons be disclos'd.

19

That, more than any doctrine of constitutional law I can think of, succinctly
expresses the rule on ripeness, prematurity, and hypothetical, speculative, or
conjectural claims.
Of special relevance to this case is Laird v. Tatum. 20 There, a class suit was
brought seeking declaratory and injunctive relief on the claim that a U.S. Army
intelligence surveillance of civilian political activity having "a potential for civil
disorder" exercised "a present inhibiting effect on [respondents'] full expression
and utilization of their First Amendment rights." In holding the case nonjusticiable,
the U.S. Supreme Court, in an opinion by Chief Justice Burger, said:

21

In recent years this Court has found in a number of cases that

constitutional violations may arise from the deterrent, or "chilling," effect of
governmental regulations that fall short of a direct prohibition against the
exercise of First Amendment rights. [Citation of cases omitted] In none of
these cases, however, did the chilling effect arise merely from the
individual's knowledge that a governmental agency was engaged in certain
activities or from the individual's concomitant fear that, armed with the
fruits of those activities, the agency might in the future take
some other and additional action detrimental to that individual. Rather, in
each of these cases, the challenged exercise of governmental power was
regulatory, proscriptive, or compulsory in nature, and the complainant was
either presently or prospectively subject to the regulations, proscriptions, or
compulsions that he was challenging . . .
[T]hese decisions have in no way eroded the "established principle that to
entitle a private individual to invoke the judicial power to determine the
validity of executive or legislative action he must show that he was
sustained or is immediately in danger of sustaining a direct injury as the
result of that action . . ."
The respondents do not meet this test; [the] alleged "chilling" effect may
perhaps be seen as arising from respondents' perception of the system as
inappropriate to the Army's role under our form of government, or as
arising from respondents' beliefs that it is inherently dangerous for the
military to be concerned with activities in the civilian sector, or as arising
from respondents' less generalized yet speculative apprehensiveness that
the Army may at some future date misuse the information in some way that
would cause direct harm to respondents. Allegations of a subjective "chill''
are not an adequate substitute for a claim of specific present objective
harm or a threat of specific future harm; "the federal courts established
pursuant to Article III of the Constitution do not render advisory opinions."
United Public Workers v. Mitchell, 330 US 75, 89, 91 L Ed 754, 766, 67 S Ct
556 (1947).

Fourth. Given the fact that no right of privacy is involved in this case and that any
objection to the Identification Reference System on the ground that it violates
freedom of thought is premature, speculative, or conjectural pending the issuance
of the implementing rules, it is clear that petitioner Blas F. Ople has no cause of
action and, therefore, no standing to bring this action. Indeed, although he
assails A.O. No. 308 on the ground that it violates the right of privacy, he claims
no personal injury suffered as a result of the Order in question. Instead, he says
he is bringing this action as taxpayer, Senator, and member of the Government
Service Insurance System.
Insofar as petitioner claims an interest as taxpayer, it is sufficient to say that A.O.
No. 308 does not involve the exercise of the taxing or spending power of the
government.
Insofar as he purports to sue as a member of the GSIS, neither does petitioner
have an interest sufficient to enable him to litigate a constitutional question.
Petitioner claims that in providing that the funds necessary for implementing the
System shall be taken from the budgets of the concerned agencies, A.O. No.
308 violates Art. VI, 25(5) which provides:
No law shall be passed authorizing any transfer of appropriations; however,
the President, the President of the Senate, the Speaker of the House of
Representatives, the Chief Justice of the Supreme Court, and the heads of
Constitutional Commissions may, by law, be authorized to augment any
item in the general appropriations law for their respective offices from
savings in other items of their respective appropriations.

But, as the Solicitor General states:

Petitioner's argument is anchored on two erroneous assumptions; one, that
all the concerned agencies, including the SSS and the GSIS, receive
budgetary support from the national government; and two, that the GAA is
the only law whereby public funds are appropriated. Both assumptions are
wrong.
The SSS and GSIS do not presently receive budgetary support from the
National Government. They have achieved self-supporting status such that
the contributions of their members are sufficient to finance their expenses.
One would be hard pressed to find in the GAA an appropriation of funds to
the SSS and the GSIS.
Furthermore, their respective charters authorize the SSS and the GSIS to
disburse their funds (Rep. Act No. 1161 [1954], as amended, Sec. 25; Pres.
Decree No. 1146 [1977], as amended, Sec. 29) without the need for a
separate appropriation from the Congress.

Nor as Senator can petitioner claim standing since no power of Congress is

alleged to have been impaired by the Administrative Order in question. 22 As
already stated, in issuing A.O. No. 308, the President did not exercise the

legislative power vested by the Constitution in Congress. He acted on the basis of

his own powers as administrative head of the government, as distinguished from
his capacity as the Executive. Dean Sinco elucidates the crucial distinction thus:
The Constitution of the Philippines makes the President not only the
executive but also the administrative head of the government. . . Executive
power refers to the legal and political function of the President involving the
exercise of discretion. Administrative power, on the other hand, concerns
itself with the work of applying policies and enforcing orders as determined
by proper governmental organs. These two functions are often confused by
the public; but they are distinct from each other. The President as the
executive authority has the duty of supervising the enforcement of laws for
the maintenance of general peace and public order. As administrative head,
his duty is to see that every government office is managed and maintained
properly by the persons in charge of it in accordance with pertinent laws
and regulations.
. . . The power of control vested in him by the Constitution makes for a
strongly centralized administrative system. It reinforces further his position
as the executive of the government, enabling him to comply more
effectively with his constitutional duty to enforce the laws. It enables him to
fix a uniform standard of administrative efficiency and to check the official
conduct of his agents. The decisions of all the officers within his
department are subject to his power of revision, either on his own motion or
on the appeal of some individual who might deem himself aggrieved by the
action of an administrative official. In case of serious dereliction of duty, he
may suspend or remove the officials concerned.

23

For the foregoing reasons, the petition should be DISMISSED.

|||

(Ople v. Torres, G.R. No. 127685, [July 23, 1998], 354 PHIL 948-1015)

132. DEFENSOR-SANTIAGO V COMELEC, SUPRA2

EN BANC
[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.
Roco Bunag Kapunan & Migallos for movant Raul S. Roco.
Rene V . Sarmiento and R.A.V . Saguisag for movants DIK & MABINI.
Pete Quirino Quadra for respondents Sps. Alberto & Carmen Pedrosa.
SYLLABUS
1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; CERTIORARI; COMELEC'S FAILURE TO
ACT ON MOTION TO DISMISS AND ITS INSISTENCE TO HOLD ON TO THE PETITION
RENDERED RIPE AND VIABLE THE PETITION UNDER SECTION 2 OF RULE 65 OF THE
RULES OF COURT. 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. . . It must be recalled that intervenor Roco filed with the COMELEC a
motion to dismiss the Delfin Petition onthe ground that the COMELEC has no jurisdiction
or authority to entertain the petition. 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. The COMELEC's failure to act onRoco's motion to
dismiss and its insistence to hold onto the petition rendered ripe and viable the instant
petition under Section 2 of Rule 65 of the Rules of Court.
2. ID.; ID.; THE COURT MAY BRUSH ASIDE TECHNICALITIES OF PROCEDURE IN CASES OF
TRANSCENDENTAL IMPORTANCE. The Court may brush aside technicalities of
procedure in cases of transcendental importance. As we stated in Kilosbayan,
Inc. v. Guingona, Jr.: 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.
3. CONSTITUTIONAL LAW; 1987 CONSTITUTION; AMENDMENTS OR REVISIONS;
PROVISION ON THE RIGHT OF THE PEOPLE TO DIRECTLY PROPOSE AMENDMENTS TO THE
CONSTITUTION, NOT SELF-EXECUTORY. Section 2 of Article XVII ofthe Constitution is
not self-executory. In his book, 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.
4. ID.; ID.; ID.; R.A. 6735; INTENDED TO COVER INITIATIVE TO PROPOSE AMENDMENTS
TO THE CONSTITUTION. 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 onSuffrage and Electoral Reforms of Representatives on the basis of two
House Bills referred to it, viz., (a) House Bill No. 497, 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, which dealt with the subject matter of House Bill No. 497, as well as
with initiative and referendum under Section 3 of Article XVII of the Constitution. Senate
Bill No. 17 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 and by the House of
Representatives. This approved bill is now R.A. No. 6735.
5. ID.; ID.; ID.; ID.; CONGRESS, INVESTED WITH THE POWER TO PROVIDE FOR THE RULES
IMPLEMENTING THE EXERCISE OF THE RIGHT. 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 ConstitutionalCommission to substitute the last paragraph of Section 2 of Article
XVII then reading: "The Congress 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."
6. ID.; ID.; ID.; ID.; NOT IN FULL COMPLIANCE WITH THE POWER AND DUTY OF
CONGRESS TO PROVIDE FOR THE IMPLEMENTATION OF THE EXERCISE OF THE RIGHT.
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 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."' . . .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, a statement of the proposed law sought to
be enacted, approve 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. . . . 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. . . . 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 onamendments 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."
7. ID.; ID.; ID.; ID.; SUBTITLING OF THE ACT, NOT ACCURATE. 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, (2) that portion of Section 1] (Indirect Initiative) referring to indirect
initiative with the legislative bodies of local governments, 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.
8. ID.; ID.; ID.; ID.; SECTION 18 ON AUTHORITY OF COURTS UNDER SUBTITLE ON LOCAL
INITIATIVE AND REFERENDUM, MISPLACED. Section 18 on "Authority of Courts" under
subtitle III on Local Initiative and Referendum is misplaced, since the provision therein
applies to both national and local initiative and referendum.
9. ID.; ID.; ID.; ID.; FAILED TO GIVE SPECIAL ATTENTION ON THE SYSTEM OF
INITIATIVE ON AMENDMENTS TO THE CONSTITUTION WHICH IS MORE IMPORTANT BEING
THE PARAMOUNT SYSTEM OF INITIATIVE. 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 onamendments to the
Constitution.
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. R.A. No.
6735 thus delivered a humiliating blow to the system of initiative on amendments tothe
Constitution by merely paying it a reluctant lip service.
10. ID.; ID.;
CONSTITUTION
REFERENDUM,
theinitiative on

ID.; ID.; ARGUMENT THAT INITIATIVE ON AMENDMENTS TO THE

IS
SUBSUMED
UNDER
SUBTITLE ON NATIONAL
INITIATIVE
AND
NOT ACCEPTABLE. We cannot accept the argument that
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 itsnature 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 resolutionwhich 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.
11. ID.; ID.; ID.; ID.; COMELEC DOES NOT HAVE THE POWER TO VALIDLY PROMULGATE
RULES AND REGULATIONS TO IMPLEMENT THE EXERCISE OF THE RIGHT OF THE PEOPLE
TO DIRECTLY PROPOSE AMENDMENTS TO THE CONSTITUTIONUNDER R.A. 6735. 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.
12. ID.; ID.; ID.; ID.; DELFIN PETITION, DEFECTIVE BECAUSE IT DOES NOT CONTAIN THE
SIGNATURES OF THE REQUIRED NUMBER OF VOTERS. 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.
13. ID.; ID.; ID.; ID.; DELFIN PETITION, NOTHING MORE THAN A MERE SCRAP OF PAPER.
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. . . . Since the Delfin Petition is not the initiatory petition
under R.A. No. 6735and COMELEC Resolution No. 2300, it cannot be entertained or given
cognizance of by the COMELEC. The respondentCommission must have known that the
petition does not fall under any of the actions or proceedings under the COMELECRules
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.
14. POLITICAL LAW; LEGISLATIVE DEPARTMENT ; DELEGATION OF POWER; WHAT HAS
BEEN DELEGATED CANNOT BE DELEGATED; EXCEPTIONS THEREOF. The rule is that
what has been delegated, cannot be delegated or as expressed in a Latin
maxim: potestas delegata non delegari potest. 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.
15. ID.; ID.; ID.; REQUISITES FOR VALID DELEGATION; SUFFICIENT STANDARD;
CONSTRUED; R.A. 6735 MISERABLY FAILED TO SATISFY BOTH REQUIREMENTS. 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. 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. 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.
PUNO, J., concurring and dissenting:
1. CONSTITUTIONAL LAW; 1987 CONSTITUTION; AMENDMENTS OR REVISIONS: R.A. 6735;
SUFFICIENTLY IMPLEMENTS THE RIGHTS OF THE PEOPLE TO INITIATE AMENDMENTS
TO THE CONSTITUTION THRU INITIATIVE. I submit that R.A. No. 6735 sufficiently
implements the right of the people to initiate amendments to the Constitution thru
initiative. . . . 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 and guaranteed." 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 the1987
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."
2. ID.; ID.; ID.; ID.; SUFFICIENTLY STATES THE POLICY AND STANDARDS TO GUIDE
THE COMELEC IN PROMULGATING THE IMPLEMENTING RULES AND REGULATIONS OF THE
LAW; CASE AT BAR. R.A. No. 6735 sufficiently states the policy and thestandards to
guide the COMELEC in promulgating the law's implementing rules and regulations of the
law. . . . 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 ofthe 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," "public interest," "public welfare," "interest of law and order," "justice and
equity," "adequate and efficient instruction," "public safety," "public policy," "greater
national interest, "protect the local consumer by stabilizing and subsidizing domestic
pump rates," and "promote simplicity, economy and efficiency in government." 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.
3. ID.; ID.; ID.; ID.; COMELEC RESOLUTION NO. 2300 MERELY PROVIDES THE PROCEDURE
TO EFFECTUATE THE POLICY OFR.A. 6735, HENCE, DID NOT VIOLATE THE
RULES ON VALID DELEGATION. 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 atCOMELEC 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
in
the
Constitutional Commission make it clear that the rules of procedure to enforce the
people's initiative can be delegated. . . . 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.
4. ID.; ID.; ID.; ID.; ARGUMENT ON LACK OF SUB-TITLE ON PEOPLE'S INITIATIVE TO
AMEND THE CONSTITUTION, SHOULD BE GIVEN THE WEIGHT OF HELIUM. The
argument that R.A. No. 6735 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.
5. ID.; ID.; ID.; ID.; ID.; LAPSES IN R.A. 6735 ARE TO BE EXPECTED, FOR LAWS ARE NOT
ALWAYS WRITTEN IN IMPECCABLE ENGLISH. 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 word-smiths 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 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."
6. ID.; ID.; ID.; ID.; PETITION AGAINST RESPONDENTS PEDROSAS SHOULD BE DISMISSED
BECAUSE IT STATES NO CAUSE OF ACTION. The petition should be 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 theCOMELEC a Petition to Amend the Constitution to Lift Term Limits of
Elective Officials by People's Initiative. The Pedrosas did not join the petition. . . .
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.
7 ID.; ID.; ID.; ID.; SOLICITATION OF SIGNATURES IS A RIGHT GUARANTEED IN BLACK AND
WHITE BY SECTION 2 OF ARTICLE XVII OF THE CONSTITUTION. 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.
8. ID.; ID.; ID.; RESPONDENTS' RIGHT OF SOLICITING SIGNATURES TO AMEND THE
CONSTITUTION, CANNOT BE ABRIDGED WITHOUT ANY IFS AND BUTS. 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.
9. ID.; ID.; ID.; RESPONDENTS' 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. The Pedrosas' campaign to amend the
Constitution is an exercise of their freedom of speech and expression. 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 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.
10. ID.; ID.; ID.; RESPONDENTS, RIGHT TO SOLICIT SIGNATURES TO START A PEOPLE'S
INITIATIVE TO AMEND THE CONSTITUTION DOES NOT DEPEND ON ANY LAW. 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. No.
6735 or COMELECResolution 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.
11. STATUTORY CONSTRUCTION; INTENT OF THE LEGISLATURE; THE INTENT OF R.A.
6735 IS TO IMPLEMENT THE PEOPLE'S INITIATIVE TO AMEND THE CONSTITUTION. 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. Stated
otherwise, intent is the essence of the law, the spirit which gives life to its
enactment. . . . 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. 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. . . . 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 is its body but its spirit is its soul.
12. POLITICAL LAW; LEGISLATIVE DEPARTMENT; DELEGATION OF POWER; SUFFICIENT
STANDARD; PURPOSE THEREOF. 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."
13. ID.; ID.; ID.; THE COURT HAS PRUDENTIALLY REFRAINED FROM INVALIDATING
ADMINISTRATIVE RULES ON THE GROUND OF LACK OF ADEQUATE 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.
VITUG, J., separate opinion:
1. CONSTITUTIONAL LAW; 1987 CONSTITUTION; AMENDMENTS OR REVISIONS; R.A. 6735;
DELFIN PETITION, UTTERLY DEFICIENT. 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.
2. ID.; ID.; ID.; TEMPORARY RESTRAINING ORDER ISSUED BY THE COURT SHOULD BE
HELD TO COVER ONLY THE DELFIN PETITION. 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.
FRANCISCO, J., dissenting and concurring:
1. CONSTITUTIONAL LAW; 1987 CONSTITUTION; AMENDMENTS OR REVISIONS; R.A. 6735;
AMPLY COVERS AN INITIATIVEON THE CONSTITUTION. Republic Act No. 6735,
otherwise known as "The Initiative and Referendum Act" amply covers an
initiative on the Constitution. 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." The same section, in enumerating the three systems of initiative, included in
"initiative on the constitution which refers to a petition proposing amendments to the
constitution." 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 distinct must be represented
by at least three per centum (3%) of the registered voters therein. Initiative onthe
constitution may be exercised only after five (5) years from the ratification of 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". . . . Clearly then, Republic Act No. 6735 covers an
initiativeon the constitution. Any other construction as what petitioners foist upon the
Court constitute a betrayal of the intent and spirit behind the enactment.
2. ID.; ID.; ID.; ID.; COMELEC CANNOT TAKE ANY ACTION ON DELFIN PETITION BECAUSE
IT IS UNACCOMPANIED BY THE REQUIRED PERCENTAGE OF REGISTERED VOTERS; CASE
AT BAR. I agree with the ponencia that the Commission onElections, 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. 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.
3. STATUTORY CONSTRUCTION; EVERY PART OF THE STATUTE MUST BE INTERPRETED
WITH REFERENCE TO THE CONTEXT. It is a rule that every part of the statute must be
interpreted with reference to 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. 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.
PANGANIBAN, J., concurring and dissenting:
1. CONSTITUTIONAL LAW; 1987 CONSTITUTION; AMENDMENTS OR REVISIONS; R.A. 6735;
TAKEN
TOGETHER
AND
INTERPRETED
PROPERLY, THE
CONSTITUTION, R.A.
6735 AND COMELEC RESOLUTION
2300
ARE
SUFFICIENT
TO
IMPLEMENT
CONSTITUTIONAL INITIATIVES. While R.A. 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. 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, 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, that any effort to
trivialize the effectiveness of people's initiatives ought to be rejected."
2. ID.; ID.; ID .; ID.; MAJORITY'S POSITION ALL TOO SWEEPING AND ALL TOO EXTREMIST.
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.
3. ID.; ID.; ID.; ID.; COMELEC CANNOT ENTERTAIN ANY PETITION IN THE ABSENCE OF THE
REQUIRED NUMBER OF SIGNATURES. 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.
4. ID.; ID.; ID.; ID.; WISELY EMPOWERED THE COMMISSION ON ELECTIONS TO
PROMULGATE RULES AND REGULATIONS. No law can completely and absolutely cover
all administrative details. In recognition of this, R.A. 6735 wisely empowered
the Commission on Elections "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 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.
5. ID.; ID.; ID.; ID.; THE COURT HAS NO POWER TO RESTRAIN ANYONE FROM EXERCISING
THEIR RIGHT OF INITIATIVE. The 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."

DECISION

DAVIDE, JR., J p:
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 ConstitutionalCommission 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, 7Section 4 of Article VII, 8 and Section 8 of Article
X 9 of the Constitution. Attached to the petition is a copy of a "Petition for
Initiative on the 1987 Constitution" 10 embodying the proposed amendments which
consist in the deletion from the aforecited sections of the provisions concerning term
limits, and with the following proposition:
DO YOU APPROVE OF LIFTING THE TERM LIMITS OF ALL ELECTIVE GOVERNMENT
OFFICIALS, 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 Constitutional 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, onstatutes, and on local legislation.

However, it failed to provide any subtitle 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. cdtai
(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 COMELECgrants 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 LAWCOMELEC 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: "THECOMMISSION 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 THECOMELEC 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, SJ.).
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 COMELECpower and function. On the substantive allegations of the petitioners,
Delfin maintain 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 Constitutionapproved 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 theCOMELEC 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 ofinitiative, 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

forinitiative on the Constitution.

that

nothing

therein

was

provided

(3) Senate Bill No. 1290 is neither a competent nor a material proof
that R.A. No. 6735 does not deal with initiative onthe Constitution.
(4) Extension of term limits of elected officials constitutes a mere
amendment to the Constitution, not a revision thereof.
(5) COMELEC Resolution No. 2300 was validly issued under Section 20
of R.A. No. 6735 and under the Omnibus Election Code. The rule-making
power of the COMELEC to implement the provisions of R.A. No. 6735 was in
fact upheld by this Court in Subic Bay Metropolitan Authority vs. COMELEC.
On 14 January 1997, this Court (a) confirmed nunc pro tunc the temporary restraining
order; (b) noted the aforementioned Comments and the Motion to Lift Temporary
Restraining Order filed by private respondents through Atty. Quadra, as well as the
latter's Manifestation stating that he is the counsel for private respondents Alberto and
Carmen Pedrosa only and the Comment he filed was for the Pedrosas; and (c) granted
the Motion for Intervention filed on 6 January 1997 by Senator Raul Roco and allowed
him to file his Petition 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,
SJ., 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. Initiativeis 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'sinitiative 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, theCOMELEC 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 theCOMELEC 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 in 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. cdt
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 onHouse 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
THE COMELEC OF THE DELFIN PETITION.

DESPITE

THE

PENDENCY

IN

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. TheCOMELEC'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 certiorariunder 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
INITIATIVE ON AMENDMENTS
TO THE
CONSTITUTION,
BUT
UNFORTUNATELY, INADEQUATE TO COVER THAT SYSTEM.

OF
IS,

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 thisConstitution 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 ofthe 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 Constitutionthat 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 onAmendment. 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 selfexecuting 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
Commissioner Hilario G. Davide, Jr., which the Committee accepted. Thus:

by

then

MR. DAVIDE.
Thank you Madam President. I propose to substitute the entire
Section 2 with the following:
xxx xxx xxx
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:
"SEC. 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 Commissionapproved 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 ConstitutionalCommission 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 onamendments 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 Constitutionand 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: cda
(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 subtitleon 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 basedon 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 nationaland 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, 54since 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. R.A. No. 6735thus 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 quasi-judicial functions, to
promulgate rules and regulations is a form of delegation of legislative authority under no.
5 above. However, in every case of permissible delegation, there must be a showing that
the delegation itself is valid. It is valid only if the law (a) is complete in itself, setting forth
therein the policy to be executed, carried out, or implemented by the delegate; and (b)
fixes a standard the limits of which are sufficiently determinate and determinable to
which the delegate must conform in the performance of his functions. 61 A sufficient
standard is one which defines legislative policy, marks its limits, maps out its boundaries
and specifies the public agency to apply it. It indicates the circumstances under which
the legislative command is to be effected. 62
Insofar as initiative to propose amendments to the Constitution is concerned, R.A. No.
6735 miserably failed to satisfy both requirements in subordinate legislation. The
delegation of the power to the COMELEC is then invalid.
III

COMELEC RESOLUTION NO. 2300,

REGULATIONS ON THE
CONDUCT
CONSTITUTION, IS VOID.

INSOFAR AS IT PRESCRIBES RULES AND

OF
INITIATIVEON AMENDMENTS
TO THE

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 Constitutionmust 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. cdll
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,
Jr., JJ ., concur.

Romero,

Bellosillo,

Kapunan,

Hermosisima and Torres,

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. 6735 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 Constitutionthru 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 Constitutionthat 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,
Massachusetts, 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
the Commission on Elections (COMELEC)
to
regulations on the power of initiative.

procedure
define

and
rules

allows
and

"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, mag-aassume 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 pag-usapan. 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 aninitiative on the
Constitution is approved or rejected by the people." cdphil
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 word-smiths 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 Constitutionsimply 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 a 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 certainly, 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 wellsettled 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
requirement.

determine

anymore

the

percentage

of

the

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 theCOMELEC with proper standard. cda
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 be 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." OnDecember 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 the1987 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
Constitutiondoes
not
depend on any
law,
much
less on R.A. No. 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 antichange
without
converting
the
debate on charter
change
into
a
sterile
talkathon. 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:
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 ponenciashould 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 onpeople 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 proscribe 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 onamendments to the
Constitution.

To begin with, sovereignty under the constitution, resides in the people and all
government authority emanates from them. 1Unlike 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 thatRepublic 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 onthe 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 to 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 onthe 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 on the
Constitution and on national
legislation.
I move that we approve the consolidated bill.
"MR. ALBANO.
Mr. Speaker.
"THE SPEAKER PRO TEMPORE.
What is the pleasure of the Minority Floor Leader?
"MR. ALBANO.
Will the distinguished sponsor answer just a few questions?
"THE SPEAKER PRO TEMPORE.
What does the sponsor say?
"MR. ROCO.
Willingly, Mr. Speaker.
"THE SPEAKER PRO TEMPORE.
The Gentleman will please proceed.
"MR. ALBANO.
I heard the sponsor say that the only difference in the two bills was that in
the Senate version there was a provision for local initiative and
referendum, whereas the House version has none.
"MR. ROCO.
In fact, the Senate version provided purely for local initiative and
referendum, whereas in the House version, we provided purely for
national and constitutional legislation.
"MR. ALBANO.
Is

it

our understanding,
incorporated?

therefore,

that

the

two

provisions

were

"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 boththe 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. cdasia
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 Electionsuntil 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. 2300, "insofar as it prescribes rules and regulations on the
conduct of initiative onamendments 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, R.A. 6735 and Comelec Resolution
2300 Are Sufficient to Implement Constitutional Initiatives
While R.A. 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 inSubic 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, R.A. 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 referendumon 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, R.A. 6735.
I respectfully submit that taken together and interpreted properly and liberally, the
Constitution (particularly Art. XVII, Sec. 2), R.A. 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 onElections 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. cdt
||| (Defensor Santiago v. Commission on Elections, G.R. No. 127325, [March 19, 1997],
336 PHIL 848-930)

133. SBMA V COMELEC

EN BANC
[G.R. No. 125416. September 26, 1996.]
SUBIC
BAY
METROPOLITAN
AUTHORITY, petitioner, vs.
COMMISSION ON ELECTIONS, ENRIQUE T. GARCIA and
CATALINO A. CALIMBAS,respondents.
Rodolfo O. Reyes for petitioner SBMA.
Brillantes [Nachura] Navarro Jumamil Arcilla & Bello Law Offices for private
respondents.
SYLLABUS
1. POLITICAL LAW; ELECTIONS; INITIATIVE AND REFERENDUM; MAY BE EXERCISED
BY THE PEOPLE TO PROPOSE AND ENACT LAWS OR APPROVE OR REJECT ANY ACT
OR LAW OR ANY PART THEREOF PASSED BY THE CONGRESS OR LOCAL
LEGISLATIVE BODY. The Constitution clearly includes not only ordinances but
resolution as appropriate subjects of a local initiative. Section 32 of Article VI
provides in luminous language: "The Congress shall, as early as possible, provide
for a system of initiative and referendum, and the exceptions therefrom, whereby
the people can directly propose and enact laws or approve or reject any act or law
or part thereof passed by the Congress, or local legislative body . . ..'
An act includes a resolution. Black defines an act as 'an expression of will or
purpose . . . it may denote something done . . . as a legislature, including not
merely physical acts, but also decrees, edits, laws, judgments, resolves, awards,
and determinations . . ..' It is basic that a law should be construed in harmony
with and not in violation of the Constitution. In line with this postulate, we held in
In Re Guarina that 'if there is doubt or uncertainty as to the meaning of the
legislative, if the words or provisions are obscure, or if the enactment is fairly

susceptible of two or more constructions, that interpretation will be adopted which

will avoid the effect of unconstitutionality, even though it may be necessary, for
this purpose, to disregard the more usual or apparent import of the language
used.'''
DSATCI

2. ID.; ID.; ID.; DIFFERENTIATED. There are statutory and conceptual

demarcations between a referendum and an initiative. In enacting the "Initiative
and Referendum Act", Congress differentiated one term from the other. Along
these statutory definitions, Justice Isagani A. Cruz defines initiative as the "power
of the people to propose bills and laws, and to enact or reject them at the polls
independent of the legislative assembly." On the other hand, he explains that
referendum "is the right reserved to the people to adopt or reject any act or
measure which has been passed by a legislative body and which in most cases
would without action on the part of electors become a law." The foregoing
definitions, which are based on Black's and other leading American authorities,
are echoed in the Local Government Code (R.A. 7160). Prescinding from these
definitions, we gather that initiative is resorted to (or initiated) by the people
directly either because the law-making body fails or refuses to enact the law,
ordinance, resolution or act that they desire or because they want to amend or
modify one already existing. Under Sec. 13 of R.A. 6735, the local legislative body
is given the opportunity to enact the proposal. If it refuses/neglects to do so within
thirty (30) days from its presentation, the proponents through their dulyauthorized and registered representatives may invoke their power of initiative,
giving notice thereof to the local legislative body concerned. Should the
proponents be able to collect the number of signed conformities within the period
granted by said statute, the Commission on Elections "shall then set a date for the
initiative (not referendum) at which the proposition shall be submitted to the
registered voters in the local government unit concerned . . .." On the other hand,
in a local referendum, the law-making body submits to the registered voters of its
territorial jurisdiction, for approval or rejection, any ordinance or resolution which
is duly enacted or approved by such law-making authority. Said referendum shall
be conducted also under the control and direction of the Commission on Elections.
In other words, while initiative is entirely the work of the electorate, referendum is
begun and consented to by the law-making body. Initiative is a process of lawmaking by the people themselves without the participation and against the
wishes of their elected representatives, while referendum consists merely of the
electorate approving or rejecting what has been drawn up or enacted by a
legislative body. Hence, the process and the voting in an initiative are
understandably more complex than in a referendum where expectedly the voters
will simply write either "Yes" or "No" in the ballot.
3. ID.; ID.; ID.; COMELEC EXERCISES ADMINISTRATION AND SUPERVISION ON THE
CONDUCT THEREOF. From the above differentiation, it follows that there is need
for the Comelec to supervise an initiative more closely, its authority thereon
extending not only to the counting and canvassing of votes but also to seeing to it
that the matter or act submitted to the people is in the proper form and language
so it may be easily understood and voted upon by the electorate. This is

especially true where the proposed legislation is lengthy and complicated, and
should thus be broken down into several autonomous parts, each such part to be
voted upon separately. Care must also be exercised that "(n)o petition embracing
more than one subject shall be submitted to the electorate," although "two or
more propositions may be submitted in an initiative." It should be noted that
under Sec. 13 (c) of R.A. 6735, the "Secretary of Local Government or his
designated representative shall extend assistance in the formulation of the
proposition." In initiative and referendum, the Comelec exercises administration
and supervision of the process itself, akin to its powers over the conduct of
elections. These law-making powers belong to the people, hence the respondent
Commission cannot control or change the substance or the content of legislation.
In the exercise of its authority, it may (in fact it should have done so already)
issue relevant and adequate guidelines and rules for the orderly exercise of these
"people-power" features of our Constitution.
4. ID.; ID.; ID.; THE COURT CANNOT PASS UPON A PROPOSED INITIATIVE UNTIL THE
PEOPLE HAVE VOTED FOR IT AND IT HAS BECOME AN APPROVED ORDINANCE OR
RESOLUTION. Deliberating on this issue, the Court agrees with private
respondent Garcia that indeed, the municipal resolution is still in the proposal
stage. It is not yet an approved law. Should the people reject it, then there would
be nothing to contest and to adjudicate. It is only when the people have voted for
it and it has become an approved ordinance or resolution that rights and
obligations can be enforced or implemented thereunder. At this point, it is merely
a proposal and the writ of prohibition cannot issue upon a mere conjecture or
possibility. Constitutionally speaking, courts may decide only actual controversies,
not hypothetical questions or cases. We also note that the Initiative and
Referendum Act itself provides that "(n)othing in this Act shall prevent or preclude
the proper courts from declaring null and void any proposition approved pursuant
to this Act . . .." So too, the Supreme Court is basically a review court. It passes
upon errors of law (and sometimes of fact, as in the case of mandatory appeals of
capital offenses) of lower courts as well as determines whether there had been
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any "branch or instrumentality" of government. In the present case, it is quite
clear that the Court has authority to review Comelec Resolution No. 2848 to
determine the commission of grave abuse of discretion. However, it does not have
the same authority in regard to the proposed initiative since it has not been
promulgated or approved, or passed upon by any "branch or instrumentality" or
lower court, for that matter. The Commission on Elections itself has made no
reviewable pronouncement about the issues brought by the pleadings. The
Comelec simply included verbatim the proposal in its questioned Resolution No.
2848. Hence, there is really no decision or action made by a branch,
instrumentality or court which this Court could take cognizance of and acquire
jurisdiction over, in the exercise of its review powers.
cCDAHE

5. ID.; ID.; ID.; THE COMELEC MAY PASS UPON SUCH PROPOSAL INSOFAR AS TO
ITS FORM AND LANGUAGE ARE CONCERNED AND WHETHER THE SAME IS
PATENTLY AND CLEARLY OUTSIDE THE CAPACITY OF THE LOCAL LEGISLATIVE BODY

TO ENACT. Having said that, we are in no wise suggesting that the Comelec
itself has no power to pass uponproposed resolutions in an initiative. Quite the
contrary, we are ruling that these matters are in fact within the initiatory
jurisdiction of the Commission to which then the herein basic questions ought
to have been addressed, and by which the same should have been decided in the
first instance. In other words, while regular courts may take jurisdiction over
"approved propositions" per said Sec. 18 of R.A. 6735, the Comelec in the exercise
of its quasi-judicial and administrative powers may adjudicate and pass upon such
proposals insofar as their form and language are concerned, as discussed earlier;
and it may be added, even as to content, where the proposals or parts thereof
are patently and clearly outside the "capacity of the local legislative body to
enact." Accordingly, the question of whether the subject of this initiative is within
the capacity of the Municipal Council of Morong to enact may be ruled upon by
the Comelec upon remand and after hearing the parties thereon.
6. REMEDIAL LAW; CIVIL PROCEDURE; MOTION TO DISMISS; RES JUDICATA; DOES
NOT APPLY IF THE ISSUE RAISED IN THE PRESENT CONTROVERSY IS DIFFERENT
FROM THAT OF THE EARLIER CASE. Moreover, we reviewed our rollo in said G.R.
No. 111230 and we found that the sole issue presented by the pleadings was the
question of "whether or not a Sangguniang Bayan Resolution can be the subject of
a valid initiative or referendum." In the present case, petitioner is not contesting
the propriety of a municipal resolution as the form by which these two new
constitutional prerogatives of the people may be validly exercised. What is at
issue here is whether Pambayang Kapasyahan Blg. 10, Serye 1993, as worded, is
sufficient in form and substance for submission to the people for their approval; in
fine, whether the Comelec acted properly and juridically in promulgating and
implementing Resolution No. 2848.

7. STATUTORY CONSTRUCTION; LAWS REGARDING INITIATIVE AND REFERENDUM

ARE LIBERALLY CONSTRUED TO EFFECTUATE ITS PURPOSES. In deciding this
case, the Court realizes that initiative and referendum, as concepts and
processes, are new in our country. We are remanding the matter to the Comelec
so that proper corrective measures, as above discussed, may be undertaken, with
a view to helping fulfill our people's aspirations for the actualization of effective
direct sovereignity. Indeed we recognize that "(p)rovisions for initiative and
referendum are liberally construed to effectuate their purposes, to facilitate and
not to hamper the exercise by the voters of the rights granted thereby." In his
authoritative treatise on the Constitution, Fr. Joaquin G. Bernas, S.J. treasures
these "instruments which can be used should the legislative show itself indifferent
to the needs of the people." Impelled by a sense of urgency, Congress
enacted Republic Act No. 6735to give life and form to the constitutional mandate.
Congress also interphased initiative and referendum into the workings of local
governments by including a chapter on this subject in the Local Government Code
of 1991. And the Commission on Elections can do no less by seasonably and
judiciously promulgating guidelines and rules, for both national and local use, in

implemention of these laws. For its part, this Court early on expressly recognized
the revolutionary import of reserving people power in the process of lawmaking.
HTSAEa

DECISION
PANGANIBAN, J :
p

The 1987 Constitution is unique in many ways. For one thing, it institutionalized
people power in law-making. Learning from the bitter lesson of completely
surrendering to Congress the sole authority to make, amend or repeal laws,
the present Constitution concurrently vested such prerogatives in the electorate
by expressly recognizing their residual and sovereign authority to ordain
legislation directly through the concepts and processes of initiative and of
referendum.
In this Decision, this Court distinguishes referendum from initiative and discusses
the practical and legal implications of such differences. It also sets down some
guidelines in the conduct and implementation of these two novel and vital
features of popular democracy, as well as settles some relevant questions on
jurisdiction all with the purpose of nurturing, protecting and promoting the
people's exercise of direct democracy.
In this action for certiorari and prohibition, petitioner seeks to nullify the
respondent Commission on Elections' Ruling dated April 17, 1996 and Resolution

No. 2848 promulgated on June 27, 1996 1 denying petitioner's plea to stop the
holding of a local initiative and referendum on the proposition to
recall Pambayang Kapasyahan Blg. 10, Serye 1993, of the Sangguniang Bayanof
Morong, Bataan.
The Facts
On March 13, 1992, Congress enacted Republic Act No. 7227 (The Bases
Conversion and Development Act of 1992), which among others, provided for the
creation of the Subic Special Economic Zone, thus:
"Sec. 12. Subic Special Economic Zone. Subject to the concurrence by
resolution of the Sangguniang Panlungsod of the City of Olongapo and the
Sangguniang Bayan of the Municipalities of Subic, Morong and Hermosa,
there is hereby created a Special Economic and Free-port Zone consisting
of the City of Olongapo and the Municipality of Subic, Province of Zambales,
the lands occupied by the Subic Naval Base and its contiguous extensions
as embraced, covered and defined by the 1947 Military Bases Agreement
between the Philippines and the United States of America as amended, and
within the territorial jurisdiction of the Municipalities of Morong and
Hermosa, Province of Bataan, hereinafter referred to as the Subic Special

Economic Zone whose metes and bounds shall be delineated in a

proclamation to be issued by the President of the Philippines. Within thirty
(30) days after the approval of this Act, each local government unit shall
submit its resolution of concurrence to join the Subic Special Economic
Zone to the Office of the President. Thereafter, the President of the
Philippines shall issue a proclamation defining the metes and bounds of the
zone as provided herein." (Italics supplied)

R.A. No. 7227 likewise created petitioner to implement the declared national
policy of converting the Subic military reservation into alternative productive
uses. 2 Petitioner was organized with an authorized capital stock of P20 billion
which was fully subscribed and fully paid up by the Republic of the Philippines
with, among other assets, "(a)ll lands embraced, covered and defined in Section
12 hereof, as well as permanent improvements and fixtures upon proper inventory
not otherwise alienated, conveyed, or transferred to another government
agency."

On November 24, 1992, the American navy turned over the Subic military
reservation to the Philippine government. Immediately, petitioner commenced the
implementation of its task, particularly the preservation of the seaports, airports
buildings, houses and other installations left by the American navy.
In April 1993, the Sangguniang Bayan of Morong, Bataan passed Pambayang
Kapasyahan Bilang 10, Serye 1993, expressing therein its absolute concurrence,
as required by said Sec. 12 of R.A. No. 7227, to join the Subic Special Economic
Zone. On September 5, 1993, the Sangguniang Bayan of Morong
submitted Pambayang Kapasyahan Bilang 10, Serye 1993 to the Office of the
President.
On May 24, 1993, respondents Garcia, Calimbas and their companions filed a
petition with the Sangguniang Bayan of Morong to annul Pambayang Kapasyahan
Blg. 10, Serye 1993. The petition prayed for the following:
"I. Bawiin, nulipikahin at pawalang-bisa ang Pambayang Kapasyahan Blg.
10, Serye 1993 ng Sangguniang Bayan para sa pag-anib ng Morong
sa SSEFZ na walang kundisyon.
II. Palitan ito ng isang Pambayang kapasiyahan na aanib lamang ang
Morong sa SSEFZ kung ang mga sumusunod na kondisyones ay
ipagkakaloob, ipatutupad at isasagawa para sa kapakanan at interes
ng Morong at Bataan:
(A) Ibalik sa Bataan ang 'Virgin Forests' isang bundok na hindi
nagagalaw at punong-puno ng malalaking punong-kahoy at
iba't-ibang halaman.
(B) Ihiwalay ang Grande Island sa SSEFZ at ibalik ito sa Bataan.

(K) Isama ang mga lupain ng Bataan na nakapaloob sa SBMA sa

pagkukuenta ng salaping ipinagkaloob ng pamahalaang
national o 'Internal Revenue Allotment' (IRA) sa Morong,
Hermosa at sa Lalawigan.
(D) Payagang magtatag rin ng sariling 'special economic zones' ang
bawat bayan ng Morong, Hermosa at Dinalupihan.
(E) Ibase sa laki ng kanya-kanyang lupa ang pamamahagi ng kikitain
ng SBMA.
(G) Ibase rin ang alokasyon ng pagbibigay ng trabaho sa laki ng
nasabing mga lupa.
(H) Pabayaang bukas ang pinto ng SBMA na nasa Morong ng 24 na
oras at bukod dito sa magbukas pa ng pinto sa hangganan
naman ng Morong at Hermosa upang magkaroon ng
pagkakataong umunlad rin ang mga nasabing bayan, pati na
rin ng iba pang bayan ng Bataan.
(I) Tapusin ang pagkokonkreto ng mga daang Morong-Tala-Orani at
Morong-Tasig-Dinalupihan para sa kabutihan ng mga tagaBataan at tuloy makatulong sa pangangalaga ng mga
kabundukan.
(J) Magkakaroon ng sapat na representasyon sa pamunuan ng SBMA
ang Morong, Hermosa at Bataan."

The Sangguniang Bayan of Morong acted upon the petition of respondents Garcia,
Calimbas, et al. by promulgatingPambayang Kapasyahan Blg. 18, Serye 1993,
requesting Congress of the Philippines to amend certain provisions of R.A. No.
7227, particularly those concerning the matters cited in items (A), (B), (K), (E) and
(G) of private respondents' petition. TheSangguniang Bayan of Morong also
informed respondents that items (D) and (H) had already been referred to and
favorably acted upon by the government agencies concerned, such as the Bases
Conversion Development Authority and the Office of the President.
Not satisfied, and within 30 days from submission of their petition, herein
respondents resorted to their power of initiative under the Local Government
Code of 1991,

4 Sec. 122 paragraph (b) of which provides as follows:

"Sec. 122. Procedure in Local Initiative.

xxx xxx xxx
(b) If no favorable action thereon is taken by the sanggunian concerned,
the proponents, through their duly authorized and registered
representatives, may invoke their power of initiative, giving notice thereof
of the sanggunian concerned.

xxx xxx xxx."

On July 6, 1993, respondent Commission En Banc in Comelec Resolution No. 931623 denied the petition for local initiative by herein private respondents on the
ground that the subject thereof was merely a resolution (pambayang kapasyahan)
and not an ordinance. On July 13, 1993, public respondent Comelec En Banc (thru
Comelec Resolution No. 93-1676) further directed its Provincial Election
Supervisor to hold action on the authentication of signatures being solicited by
private respondents.
On August 15, 1993, private respondents instituted a petition for certiorari and
mandamus 5 before this Court against the Commission on Elections and
the Sangguniang Bayan of Morong, Bataan, to set aside Comelec Resolution No.
93-1623 insofar as it disallowed the conduct of a local initiative to
annual Pambayang Kapasyahan Bilang 10, Serye 1993, and Comelec Resolution
No. 93-1676 insofar as it prevented the Provincial Election Supervisor of Bataan
from proceeding with the authentication of the required number of signatures in
support of the initiative and the gathering of signatures.
On February 1, 1995, pursuant to Sec. 12 of R.A. No. 7227, the President of the
Philippines issued Proclamation No. 532 defining the metes and bounds of the
SSEZ. Said proclamation included in the SSEZ all the lands within the former Subic
Naval Base, including Grande Island and that portion of the former naval base
within the territorial jurisdiction of the Municipality of Morong.

On June 18, 1996, respondent Comelec issued Resolution No. 2845, adopting
therein a "Calendar of Activities for local referendum on certain municipal
ordinance passed by the Sangguniang Bayan of Morong, Bataan," and which
indicated, among others, the scheduled Referendum Day (July 27, 1996,
Saturday). On June 27, 1996, the Comelec promulgated the assailed Resolution
No. 2848 providing for "the rules and guidelines to govern the conduct of the
referendum proposing to annul or repeal Kapasyahan Blg. 10, Serye 1993 of the
Sangguniang Bayan of Morong, Bataan."
On July 10, 1996, petitioner instituted the present petition for certiorari and
prohibition contesting the validity of Resolution No. 2848 and alleging, inter alia,
that public respondent "is intent on proceeding with a local initiative that
proposes an amendment of a national law. . .."
The Issues
The petition

6 presents the following "argument":

"Respondent Commission on Elections committed a grave abuse of

discretion amounting to lack of jurisdiction in scheduling a local initiative
which seeks the amendment of a national law."

In his Comment, private respondent Garcia claims that (1) petitioner has failed to
show the existence of an actual case or controversy; (2) . . . petitioner seeks to
overturn a decision/judgment which has long become final and executory; (3) . . .
public respondent has not abused its discretion and has in fact acted within its
jurisdiction; (and) (4) . . . the concurrence of local government units is required for
the establishment of the Subic Special Economic Zone."
Private respondent Calimbas, now the incumbent Mayor of Morong, in his Reply
(should be Comment) joined petitioner's cause because "(a)fter several meetings
with petitioner's Chairman and staff and after consultation with legal counsel,
respondent Calimbas discovered that the demands in the petition for a local
initiative/referendum were not legally feasible."

The Solicitor General, as counsel for public respondent, identified two issues, as
follows:
"1. Whether
or
not
the
Comelec
can
be
enjoined
from
scheduling/conducting the local initiative proposing to annul Pambayang
Kapasyahan Blg. 10, Serye 1993 of the Sangguniang Bayan of Morong,
Bataan.
2. Whether or not the Comelec committed grave abuse of discretion in
denying the request of petitioner SBMA to stop the local initiative."

On July 23, 1996, the Court heard oral argument by the parties, after which, it
issued the following Resolution:
"The Court Resolved to: (1) GRANT the Motion to Admit the Attached
Comment filed by counsel for private respondent Enrique T. Garcia, dated
July 22, 1996 and (2) NOTE the: (a) Reply (should be comment) to the
petition for certiorari and prohibition with prayer for temporary restraining
order and/or writ of preliminary injunction, filed by counsel for respondent
Catalino Calimbas, dated July 22, 1996; (b) Separate Comments on the
petition, filed by: (b-1) the Solicitor General for respondent Commission on
Elections dated July 19, 1996 and (b-2) counsel for private respondent
Enrique T. Garcia, dated July 22, 1996, all filed in compliance with the
resolution of July 16, 1996 and (c) Manifestation filed by counsel for
petitioner, dated July 22, 1996.
At the hearing of this case this morning, Atty. Rodolfo O. Reyes appeared
and argued for petitioner Subic Bay Metropolitan Authority (SBMA) while
Atty. Sixto Brillantes for private respondent Enrique T. Garcia, and Atty.
Oscar L. Karaan for respondent Catalino Calimbas. Solicitor General Raul
Goco, Assistant Solicitor General Cecilio O. Estoesta and Solicitor Zenaida

Hernandez-Perez appeared for respondent Commission on Elections with

Solicitor General Goco arguing.
Before the Court adjourned, the Court directed the counsel for both parties
to INFORM this Court by Friday, July 26, 1996, whether or not Commission
on Elections would push through with the initiative/referendum this
Saturday, July 27, 1996.
Thereafter, the case shall be considered SUBMITTED for resolution.
At 2:50 p.m., July 23, 1996, the Court received by facsimile transmission an
Order dated also on July 23, 1996 from the respondent Commission on
Elections En Banc inter alia 'to hold in abeyance the scheduled referendum
(initiative) on July 27, 1996 pending resolution of G.R. No. 125416.' In view
of this Order, the petitioner's application for a temporary restraining order
and/or writ of preliminary injunction has become moot and academic and
will thus not be passed upon by this Court at this time. Puno J., no part due
to relationship. Bellosillo, J., is on leave."

After careful study of and judicious deliberation on the submissions and

arguments of the parties, the Court believes that the issues may be restated as
follows:
(1) Whether this petition "seeks to overturn a decision/judgment
which has long become final and executory"; namely, G.R. No.
111230, Enrique Garcia, et al. vs. Commission on Elections, et
al.;
(2) Whether the respondent Comelec committed grave abuse of
discretion in promulgating and implementing its Resolution No.
2848 which "govern(s) the conduct of the referendum proposing
to annul or repeal Pambayang Kapasyahan Blg. 10, Serye
1993 of the Sangguniang Bayan of Morong, Bataan"; and
(3) Whether the questioned local initiative covers a subject within the
powers of the people of Morong to enact; i.e., whether such
initiative "seeks the amendment of a national law."
First Issue: Bar by Final Judgment
Respondent Garcia contends that this Court had already ruled with finality
in Enrique T. Garcia, et al. vs. Commission on Elections, et al. 8 on "the very
issued raised in (the) petition: whether or not there can be an initiative by the
people of Morong, Bataan on the subject proposition the very same proposition,
it bears emphasizing, the submission of which to the people of Morong, Bataan is
now sought to be enjoined by petitioner . . .."

We disagree. The only issue resolved in the earlier Garcia case is whether a
municipal resolution as contra-distinguished from an ordinance may be the proper
subject of an initiative and/or referendum. We quote from our said Decision:

"In light of this legal backdrop, the essential issue to be resolved in the
case at bench is whether Pambayang Kapasyahan Blg. 10, Serye 1993 of
the Sangguniang Bayan of Morong, Bataan is the proper subject of an
initiative. Respondents take the negative stance as they contend that
under the Local Government Code of 1991 only an ordinance can be the
subject of initiative. They rely on Section 120, Chapter 2, Title XI, Book I
of the Local Government Code of 1991 which provides: 'Local Initiative
Defined. Local initiative is the legal process whereby the registered
voters of a local government unit may directly propose, enact, or amend
any ordinance.'
We reject respondents' narrow and literal reading of the above provision for
it will collide with the Constitution and will subvert the intent of the
lawmakers in enacting the provisions of the Local Government of 1991 on
initiative and referendum.
The Constitution clearly includes not only ordinances but resolutions as
appropriate subjects of a local initiative. Section 32 of Article VI provides in
luminous language: 'The Congress shall, as early as possible, provide for a
system of initiative and referendum, and the exceptions therefrom,
whereby the people can directly propose and enact laws or approve or
reject any act or law or part thereof passed by the Congress, or local
legislative body . . .' An act includes a resolution. Black defines an act as
'an expression of will or purpose . . . it may denote something done. . . as a
legislature, including not merely physical acts, but also decrees, edicts,
laws, judgments, resolves, awards, and determinations . . ..' It is basic that
a law should be construed in harmony with and not in violation of the
Constitution. In line with this postulate, we held in Re Guarina that 'if there
is doubt or uncertainty as to the meaning of the legislative, if the words or
provisions are obscure, or if the enactment is fairly susceptible of two or
more constructions, that interpretation will be adopted which will avoid the
effect of unconstitutionality, even though it may be necessary, for this
purpose, to disregard the more usual or apparent import of the language
use.'"

Moreover, we reviewed our rollo in said G.R. No. 111230 and we found that the
sole issue presented by the pleadings was the question of "whether or not a
Sangguniang Bayan Resolution can be the subject of a valid initiative or
referendum."

10

In the present case, petitioner is not contesting the propriety of a municipal

resolution as the form by which these two new constitutional prerogatives of the
people may be validly exercised. What is at issue here is whether Pambayang
Kapasyahan Blg. 10, Serye 1993, as worded, is sufficient in form and
substance for submission to the people for their approval; in fine, whether the

Comelec acted properly and juridically in promulgating and implementing

Resolution No. 2848.
Second Issue: Sufficiency of Comelec Resolution No. 2848
The main issue in this case may be re-stated thus: Did respondent Comelec
commit grave abuse of discretion in promulgating and implementing Resolution
No. 2848?
We answer the question in the affirmative.
To begin with, the process started by private respondents was an INITIATIVE but
respondent Comelec made preparations for a REFERENDUM only. In fact, in the
body of the Resolution 11 as reproduced in the footnote below, the word
"referendum" is repeated at least 27 times, "initiative" is not mentioned at all. The
Comelec labeled the exercise as a "Referendum"; the counting of votes was
entrusted to a "Referendum Committee"; the documents were called "referendum
returns"; the canvassers, "Referendum Board of Canvassers" and the ballots
themselves bore the description "referendum." To repeat, not once was the word
"initiative" used in said body of Resolution No. 2848. And yet, this exercise is
unquestionably an INITIATIVE.

There are statutory and conceptual demarcations between a referendum and an

initiative. In enacting the "Initiative and
differentiated one term from the other, thus:

Referendum

Act",

12 Congress

(a) "Initiative" is the power of the people to propose amendments to the

Constitution or to propose and enact legislations through an election called
for the purpose.
There are three (3) systems of initiative, namely:
a.1. Initiative on the Constitution which refers to a petition
proposing amendments to the Constitution;
a.2. Initiative on statutes which refers to a petition proposing to
enact a national legislation; and
a.3. Initiative on local legislation which refers to a petition
proposing to enact a regional, provincial, city, municipal, or
barangay law, resolution or ordinance.
(b) "Indirect initiative" is exercise of initiative by the people through a
proposition sent to Congress or the local legislative body for action.

(c) "Referendum" is the power of the electorate to approve or reject a

legislation through an election called for the purpose. It may be of two
classes, namely:
c.1 Referendum on statutes which refers to a petition to approve
or reject an act or law, or part thereof, passed by Congress;
and
c.2 Referendum on local law which refers to a petition to approve
or reject a law, resolution or ordinance enacted by regional
assemblies and local legislative bodies.

Along these statutory definitions, Justice Isagani A. Cruz 13 defines initiative as

the "power of the people to propose bills and laws, and to enact or reject them at
the polls independent of the legislative assembly." On the other hand, he explains
that referendum "is the right reserved to the people to adopt or reject any act or
measure which has been passed by a legislative body and which in most cases
would without action on the part of electors become a law." The foregoing

definitions, which are based on Black's 14 and other leading American

authorities, are echoed in the Local Government Code (R.A. No. 7160)
substantially as follows:
"SEC. 120. Local Initiative Defined. Local initiative is the legal process
whereby the registered voters of a local government unit may directly
propose, enact, or amend any ordinance.
"SEC. 126. Local Referendum Defined. Local referendum is the legal
process whereby the registered voters of the local government units may
approve, amend or reject any ordinance enacted by the sanggunian.
The local referendum shall be held under the control and direction of the
Comelec within sixty (60) days in case of provinces and cities, forty-five
(45) days in case of municipalities and thirty (30) days in case of
barangays.
The Comelec shall certify and proclaim the results of the said referendum."

Prescinding from these definitions, we gather that initiative is resorted to (or

initiated) by the people directly either because the law-making body fails or
refuses to enact the law, ordinance, resolution or act that they desire or because
they want to amend or modify one already existing. Under Sec. 13 of R.A. 6735,
the local legislative body is given the opportunity to enact the proposal. If it
refuses/neglects to do so within thirty (30) days from its presentation, the
proponents through their duly-authorized and registered representatives may
invoke their power of initiative, giving notice thereof to the local legislative body
concerned. Should the proponents be able to collect the number of signed
conformities with the period granted by said statute, the Commission Elections
"shall then set a date for the initiative (not referendum) at which the proposition

shall be submitted to the registered voters in the local government unit concerned
. . ."
On the other hand, in a local referendum, the law-making body submits to the
registered voters of its territorial jurisdiction, for approval or rejection, any
ordinance or resolution which is duly enacted or approved by such law-making
authority. Saidreferendum shall be conducted also under the control and direction
of the Commission on Elections.

15

In other words, while initiative is entirely the work of the electorate, referendum is
begun and consented to by the law-making body. Initiative is a process of lawmaking by the people themselves without the participation and against the
wishes of their elected representatives, while referendum consists merely of the
electorate approving or rejecting what has been drawn up or enacted by a
legislative body. Hence, the process and the voting in an initiative are
understandably more complex than in a referendum where expectedly the voters
will simply write either "Yes" or "No" in the ballot.
[Note: While the above quoted laws variously refer to initiative and referendum as
"powers" or "legal processes," these can also be "rights," as Justice Cruz terms
them, or "concepts," or "the proposal" itself (in the case of initiative) being
referred to in this Decision.]
From the above differentiation, it follows that there is need for the Comelec to
supervise an initiative more closely, its authority thereon extending not only to
the counting and canvassing of votes but also to seeing to it that the matter or
act submitted to the people is in the proper form and language so it may be easily
understood and voted by the electorate. This is especially true where the
proposed legislation is lengthy and complicated, and should upon thus be broken
down into several autonomous parts, each such part to be voted upon separately.
Care must also be exercised that "(n)o petition embracing more than one subject
shall be submitted to the electorate,"
may be submitted in an initiative."

17

16 although "two

or more propositions

It should be noted that under Sec. 13 (c) of R.A. 6735, the "Secretary of Local
Government or his designated representative shall extend assistance in the
formulation of the proposition."
In initiative and referendum, the Comelec exercises administration and
supervision of the process itself, akin to its powers over the conduct of elections.
These law-making powers belong to the people, hence the respondent
Commission cannot control or change the substance or the content of legislation.
In the exercise of its authority, it may (in fact it should have done so already)
issue relevant and adequate guidelines and rules for the orderly exercise of these
"people-power" features of our Constitution.

Third
Issue: Withdrawal
of
Imposition of Conditionalities Ultra Vires?

Adherence

and

Petitioner maintains that the proposition sought to be submitted in the plebiscite,

namely, Pambayang Kapasyahan Blg. 10, Serye 1993, is ultra vires or beyond the
powers of the Sangguniang Bayan to enact, 18 stressing that under Sec. 124 (b)
of R.A. 7160 (the Local Government Code), "local initiative shall cover only such
subjects or matters as are within the legal powers of the sanggunians to enact."
Elsewise stated, a local initiative may enact only such ordinances or resolutions as

the municipal council itself could, if it decide to so enact. 19 After the

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

20

also

note

that

the

Initiative

and

Referendum

Act

itself

provides 21 that "(n)othing in this Act shall prevent or preclude the proper courts
from declaring null and void any proposition approved pursuant to this Act . . . ."

So too, the Supreme Court is basically a review court. 22 It passes upon errors of
law (and sometimes of fact, as in the case of mandatory appeals of capital
offenses) of lower courts as well as determines whether there had been grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of any
"branch or instrumentality" of government. In the present case, it is quite clear
that the Court has authority to review Comelec Resolution No. 2848 to determine
the commission of grave abuse of discretion. However, it does not have the same
authority in regard to the proposed initiative since it has not been promulgated or
approved, or passed upon by any "branch or instrumentality" or lower court, for
that matter. The Commission on Elections itself has made no reviewable
pronouncements about the issues brought by the pleadings. The Comelec simply
included verbatim the proposal in its questioned Resolution No. 2848. Hence,
there is really no decision or action made by a branch, instrumentality or court
which this Court could take cognizance of and acquire jurisdiction over, in the
exercise of its review powers.

Having said that, we are in no wise suggesting that the Comelec itself has no
power to pass upon proposed resolutions in an initiative. Quite the contrary, we
are ruling that these matters are in fact within the initiatory jurisdiction of the
Commission to which then the herein basic questions ought to have been
addressed, and by which the same should have been decided in the first instance.
In other words, while regular courts may take jurisdiction over
"approved propositions" per said Sec. 18 ofR.A. 6735, the Comelec in the exercise
of its quasi-judicial and administrative powers may adjudicate and pass upon such
proposals insofar as their form and language are concerned, as discussed earlier;
and it may be added, even as to content, where the proposals or parts thereof
are patently and clearly outside the "capacity of the local legislative body to
enact." 23Accordingly, the question of whether the subject of this initiative is
within the capacity of the Municipal Council of Morong to enact may be ruled upon
by the Comelec upon remand and after hearing the parties thereon.
While on the subject of capacity of the local lawmaking body, it would be fruitful
for the parties and the Comelec to plead and adjudicate, respectively, the
question of whether Grande Island and the "virgin forests" mentioned in the
proposed initiative belong to the national government and thus cannot be
segregated from the Zone and "returned to Bataan" by the simple expedient of
passing a municipal resolution. We note that Sec. 13 (e) of R.A. 7227 speaks of
the full subscription and paymentof the P20 billion authorized capital stock of the
Subic Authority by the Republic, with, aside from cash and other assets, the ". . .
lands embraced, covered and defined in Section 12 hereof, . . ." which includes
said island and forests. The ownership of said lands is a question of fact that may
be taken up in the proper forum the Commission on Elections.

Another question which the parties may wish to submit to the Comelec upon
remand of the initiative is whether the proposal, assuming it is within the capacity
of the Municipal Council to enact, may be divided into several parts for purposes
of voting. Item "I" is a proposal to recall, nullify and render without effect (bawiin,
nulipikahin at pawalangbisa) Municipal Resolution No. 10, Series of 1993. On the
other hand, Item "II" proposes to change or replace (palitan) said resolution with
another municipal resolution of concurrence provided certain conditions
enumerated thereunder would be granted, obeyed and implemented
(ipagkakaloob, ipatutupad at isasagawa) for the benefit and interest of Morong
and Bataan. A voter may favor Item I i.e., he may want a total dismemberment
of Morong from the Authority but may not agree with any of the conditions set
forth in Item II. Should the proposal then be divided and be voted upon separately
and independently?
All told, we shall not pass upon the third issue of ultra vires on the ground of
prematurity.
Epilogue
In sum, we hold that (i) our decision in the earlier Garcia case is not a bar to the
present controversy as the issue raised and decided therein is different from the
questions involved here; (ii) the respondent Commission should be given an
opportunity to review and correct its errors in promulgating its Resolution No.
2848 and in preparing if necessary for the plebiscite; and (iii) that the said
Commission has administrative and initiatory quasi-judicial jurisdiction to pass
upon the question of whether the proposal is sufficient in form and language and
whether such proposal or part or parts thereof are clearly andpatently outside the
powers of the municipal council of Morong to enact, and therefore violative of law.
In deciding this case, the Court realizes that initiative and referendum, as
concepts and processes, are new in our country. We are remanding the matter to
the Comelec so that proper corrective measures, as above discussed, may be
undertaken, with a view to helping fulfill our people's aspirations for the
actualization of effective direct sovereignty. Indeed we recognize that
"(p)rovisions for initiative and referendum are liberally construed to effectuate
their purposes, to facilitate and not to hamper the exercise by the voters of the

rights granted thereby." 24 In his authoritative treatise on the Constitution, Fr.

Joaquin G. Bernas, S.J. treasures these "instruments which can be used should the
legislature show itself indifferent to the needs of the people." 25 Impelled by a
sense of urgency, Congress enacted Republic Act No. 6735 to give life and form to
the constitutional mandate. Congress also interphased initiative and referendum
into the workings of local governments by including a chapter on this subject
in the Local Government Code of 1991. 26 And the Commission on Elections can
do no less by seasonably and judiciously promulgating guidelines and rules, for
both national and local use, in implementation of these laws. For its part, this

Court early on expressly recognized the revolutionary import of reserving people

power in the process of law-making.

27

Like elections, initiative and referendum are powerful and valuable modes of
expressing popular sovereignty. And this Court as a matter of policy and doctrine
will exert every effort to nurture, protect and promote their legitimate exercise.
For it is but sound public policy to enable the electorate to express their free and
untrammeled will, not only in the election of their annointed lawmakers and
executives, but also in the formulation of the very rules and laws by which our
society shall be governed and managed.
WHEREFORE the petition is GRANTED. Resolution No. 2848 is ANNULLED and SET
ASIDE. The initiative on Pambayang Kapasyahan Blg. 10, Serye 1993 is
REMANDED to the Commission on Elections for further proceedings consistent
with the foregoing discussion. No costs.
IT IS SO ORDERED.
(Subic Bay Metropolitan Authority v. Commission on Elections, G.R. No. 125416,
[September 26, 1996], 330 PHIL 1082-1113)
|||

134. PIMENTEL JR. V EXEC SECRETARY

EN BANC
[G.R. No. 158088. July 6, 2005.]
SENATOR AQUILINO PIMENTEL, JR., REP. ETTA ROSALES, PHILIPPINE COALITION FOR THE
ESTABLISHMENT OF THE INTERNATIONAL CRIMINAL COURT, TASK FORCE DETAINEES OF
THE PHILIPPINES, FAMILIES OF VICTIMS OF INVOLUNTARY DISAPPEARANCES, BIANCA
HACINTHA R. ROQUE, HARRISON JACOB R. ROQUE, AHMED PAGLINAWAN, RON P. SALO,
LEAVIDES G. DOMINGO, EDGARDO CARLO VISTAN, NOEL VILLAROMAN, CELESTE
CEMBRANO, LIZA ABIERA, JAIME ARROYO, MARWIL LLASOS, CRISTINA ATENDIDO, ISRAEL
FAGELA, and ROMEL BAGARES, petitioners, vs. OFFICE OF THE EXECUTIVE SECRETARY,
represented by HON. ALBERTO ROMULO, and the DEPARTMENT OF FOREIGN AFFAIRS,
represented by HON. BLAS OPLE, respondents.
DECISION
PUNO, J p:
This is a petition for mandamus filed by petitioners to compel the Office of the Executive
Secretary and the Department of Foreign Affairs to transmit the signed copy of the Rome
Statute of the International Criminal Court to the Senate of the Philippines for its
concurrence in accordance with Section 21, Article VII of the 1987 Constitution.
The Rome Statute established the International Criminal Court which "shall have the
power to exercise its jurisdiction over persons for the most serious crimes of
international concern . . . and shall be complementary to the national criminal
jurisdictions." 1 Its jurisdiction covers the crime of genocide, crimes against humanity,
war crimes and the crime of aggression as defined in the Statute. 2 The Statute was
opened for signature by all states in Rome on July 17, 1998 and had remained open for
signature until December 31, 2000 at the United Nations Headquarters in New York. The
Philippines signed the Statute on December 28, 2000 through Charge d' Affairs Enrique

A. Manalo of the Philippine Mission to the United Nations. 3 Its provisions, however,
require that it be subject to ratification, acceptance or approval of the signatory states. 4
Petitioners filed the instant petition to compel the respondents the Office of the
Executive Secretary and the Department of Foreign Affairs to transmit the signed text
of the treaty to the Senate of the Philippines for ratification. TAScID
It is the theory of the petitioners that ratification of a treaty, under both domestic law
and international law, is a function of the Senate. Hence, it is the duty of the executive
department to transmit the signed copy of the Rome Statute to the Senate to allow it to
exercise its discretion with respect to ratification of treaties. Moreover, petitioners submit
that the Philippines has a ministerial duty to ratify the Rome Statute under treaty law
and customary international law. Petitioners invoke the Vienna Convention on the Law of
Treaties enjoining the states to refrain from acts which would defeat the object and
purpose of a treaty when they have signed the treaty prior to ratification unless they
have made their intention clear not to become parties to the treaty. 5
The Office of the Solicitor General, commenting for the respondents, questioned the
standing of the petitioners to file the instant suit. It also contended that the petition at
bar violates the rule on hierarchy of courts. On the substantive issue raised by
petitioners, respondents argue that the executive department has no duty to transmit
the Rome Statute to the Senate for concurrence.
A petition for mandamus may be filed when any tribunal, corporation, board, officer or
person unlawfully neglects the performance of an act which the law specifically enjoins
as a duty resulting from an office, trust, or station. 6 We have held that to be given due
course, a petition for mandamus must have been instituted by a party aggrieved by the
alleged inaction of any tribunal, corporation, board or person which unlawfully excludes
said party from the enjoyment of a legal right. The petitioner in every case must
therefore be an aggrieved party in the sense that he possesses a clear legal right to be
enforced and a direct interest in the duty or act to be performed. 7 The Court will
exercise its power of judicial review only if the case is brought before it by a party who
has the legal standing to raise the constitutional or legal question. "Legal standing"
means a personal and substantial interest in the case such that the party has sustained
or will sustain direct injury as a result of the government act that is being challenged.
The term "interest" is 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. 8
The petition at bar was filed by Senator Aquilino Pimentel, Jr. who asserts his legal
standing to file the suit as member of the Senate; Congresswoman Loretta Ann Rosales,
a member of the House of Representatives and Chairperson of its Committee on Human
Rights; the Philippine Coalition for the Establishment of the International Criminal Court
which is composed of individuals and corporate entities dedicated to the Philippine
ratification of the Rome Statute; the Task Force Detainees of the Philippines, a juridical
entity with the avowed purpose of promoting the cause of human rights and human
rights victims in the country; the Families of Victims of Involuntary Disappearances, a
juridical entity duly organized and existing pursuant to Philippine Laws with the avowed
purpose of promoting the cause of families and victims of human rights violations in the
country; Bianca Hacintha Roque and Harrison Jacob Roque, aged two (2) and one (1),
respectively, at the time of filing of the instant petition, and suing under the doctrine of

inter-generational rights enunciated in the case of Oposa vs. Factoran, Jr.; 9 and a group
of fifth year working law students from the University of the Philippines College of Law
who are suing as taxpayers.
The question in standing is whether a party 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. 10
We find that among the petitioners, only Senator Pimentel has the legal standing to file
the instant suit. The other petitioners maintain their standing as advocates and
defenders of human rights, and as citizens of the country. They have not shown,
however, that they have sustained or will sustain a direct injury from the non-transmittal
of the signed text of the Rome Statute to the Senate. Their contention that they will be
deprived of their remedies for the protection and enforcement of their rights does not
persuade. The Rome Statute is intended to complement national criminal laws and
courts. Sufficient remedies are available under our national laws to protect our citizens
against human rights violations and petitioners can always seek redress for any abuse in
our domestic courts. SEHTAC
As regards Senator Pimentel, it has been held 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." 11 Thus, legislators have the
standing to maintain inviolate the prerogatives, powers and privileges vested by the
Constitution in their office and are allowed to sue to question the validity of any official
action which they claim infringes their prerogatives as legislators. The petition at bar
invokes the power of the Senate to grant or withhold its concurrence to a treaty entered
into by the executive branch, in this case, the Rome Statute. The petition seeks to order
the executive branch to transmit the copy of the treaty to the Senate to allow it to
exercise such authority. Senator Pimentel, as member of the institution, certainly has the
legal standing to assert such authority of the Senate.
We now go to the substantive issue.
The core issue in this petition for mandamus is whether the Executive Secretary and the
Department of Foreign Affairs have a ministerial duty to transmit to the Senate the copy
of the Rome Statute signed by a member of the Philippine Mission to the United Nations
even without the signature of the President.
We rule in the negative.
In our system of government, the President, being the head of state, is regarded as the
sole organ and authority in external relations and is the country's sole representative
with foreign nations. 12 As the chief architect of foreign policy, the President acts as the
country's mouthpiece with respect to international affairs. Hence, the President is vested
with the authority to deal with foreign states and governments, extend or withhold
recognition, maintain diplomatic relations, enter into treaties, and otherwise transact the
business of foreign relations. 13 In the realm of treaty-making, the President has the sole
authority to negotiate with other states.

Nonetheless, while the President has the sole authority to negotiate and enter into
treaties, the Constitution provides a limitation to his power by requiring the concurrence
of 2/3 of all the members of the Senate for the validity of the treaty entered into by him.
Section 21, Article VII of the 1987 Constitution provides that "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." The 1935 and the 1973 Constitution also required the
concurrence by the legislature to the treaties entered into by the executive. Section 10
(7), Article VII of the 1935 Constitution provided:
Sec. 10. (7) The President shall have the power, with the concurrence of two-thirds of all
the Members of the Senate, to make treaties. . . .
Section 14 (1) Article VIII of the 1973 Constitution stated:
Sec. 14. (1) Except as otherwise provided in this Constitution,no treaty shall be valid and
effective unless concurred in by a majority of all the Members of the Batasang
Pambansa.

The participation of the legislative branch in the treaty-making process was deemed
essential to provide a check on the executive in the field of foreign relations. 14 By
requiring the concurrence of the legislature in the treaties entered into by the President,
the Constitution ensures a healthy system of checks and balance necessary in the
nation's pursuit of political maturity and growth. 15
In filing this petition, the petitioners interpret Section 21, Article VII of the 1987
Constitution to mean that the power to ratify treaties belongs to the Senate.
We disagree.
Justice Isagani Cruz, in his book on International Law, describes the treaty-making
process in this wise:
The usual steps in the treaty-making process are: negotiation, signature, ratification, and
exchange of the instruments of ratification. The treaty may then be submitted for
registration and publication under the U.N. Charter, although this step is not essential to
the validity of the agreement as between the parties.
Negotiation may be undertaken directly by the head of state but he now usually assigns
this task to his authorized representatives. These representatives are provided with
credentials known as full powers, which they exhibit to the other negotiators at the start
of the formal discussions. It is standard practice for one of the parties to submit a draft of
the proposed treaty which, together with the counter-proposals, becomes the basis of
the subsequent negotiations. The negotiations may be brief or protracted, depending on
the issues involved, and may even "collapse" in case the parties are unable to come to
an agreement on the points under consideration.
If and when the negotiators finally decide on the terms of the treaty, the same is opened
for signature. This step is primarily intended as a means of authenticating the instrument
and for the purpose of symbolizing the good faith of the parties; but, significantly, it does

not indicate the final consent of the state in cases where ratification of the treaty is
required. The document is ordinarily signed in accordance with the alternat, that is, each
of the several negotiators is allowed to sign first on the copy which he will bring home to
his own state.
Ratification, which is the next step, is the formal act by which a state confirms and
accepts the provisions of a treaty concluded by its representatives. The purpose of
ratification is to enable the contracting states to examine the treaty more closely and to
give them an opportunity to refuse to be bound by it should they find it inimical to their
interests. It is for this reason that most treaties are made subject to the scrutiny and
consent of a department of the government other than that which negotiated them.
xxx xxx xxx
The last step in the treaty-making process is the exchange of the instruments of
ratification, which usually also signifies the effectivity of the treaty unless a different
date has been agreed upon by the parties. Where ratification is dispensed with and no
effectivity clause is embodied in the treaty, the instrument is deemed effective upon its
signature. 16 [emphasis supplied]
Petitioners' arguments equate the signing of the treaty by the Philippine representative
with ratification. It should be underscored that the signing of the treaty and the
ratification are two separate and distinct steps in the treaty-making process. As earlier
discussed, the signature is primarily intended as a means of authenticating the
instrument and as a symbol of the good faith of the parties. It is usually performed by
the state's authorized representative in the diplomatic mission. Ratification, on the other
hand, is the formal act by which a state confirms and accepts the provisions of a treaty
concluded by its representative. It is generally held to be an executive act, undertaken
by the head of the state or of the government. 17 Thus, Executive Order No. 459 issued
by President Fidel V. Ramos on November 25, 1997 provides the guidelines in the
negotiation of international agreements and its ratification. It mandates that after the
treaty has been signed by the Philippine representative, the same shall be transmitted to
the Department of Foreign Affairs. The Department of Foreign Affairs shall then prepare
the ratification papers and forward the signed copy of the treaty to the President for
ratification. After the President has ratified the treaty, the Department of Foreign Affairs
shall submit the same to the Senate for concurrence. Upon receipt of the concurrence of
the Senate, the Department of Foreign Affairs shall comply with the provisions of the
treaty to render it effective. Section 7 of Executive Order No. 459 reads: ASTcaE
Sec. 7. Domestic Requirements for the Entry into Force of a Treaty or an Executive
Agreement. The domestic requirements for the entry into force of a treaty or an
executive agreement, or any amendment thereto, shall be as follows:
A. Executive Agreements.
i. All executive agreements shall be transmitted to the Department of Foreign Affairs
after their signing for the preparation of the ratification papers. The transmittal shall
include the highlights of the agreements and the benefits which will accrue to the
Philippines arising from them.

ii. The Department of Foreign Affairs, pursuant to the endorsement by the concerned
agency, shall transmit the agreements to the President of the Philippines for his
ratification. The original signed instrument of ratification shall then be returned to the
Department of Foreign Affairs for appropriate action.
B. Treaties.
i. All treaties, regardless of their designation, shall comply with the requirements
provided in sub-paragraph[s] 1 and 2, item A (Executive Agreements) of this Section. In
addition, the Department of Foreign Affairs shall submit the treaties to the Senate of the
Philippines for concurrence in the ratification by the President. A certified true copy of
the treaties, in such numbers as may be required by the Senate, together with a certified
true copy of the ratification instrument, shall accompany the submission of the treaties
to the Senate.
ii. Upon receipt of the concurrence by the Senate, the Department of Foreign Affairs shall
comply with the provision of the treaties in effecting their entry into force.
Petitioners' submission that the Philippines is bound under treaty law and international
law to ratify the treaty which it has signed is without basis. The signature does not
signify the final consent of the state to the treaty. It is the ratification that binds the state
to the provisions thereof. In fact, the Rome Statute itself requires that the signature of
the representatives of the states be subject to ratification, acceptance or approval of the
signatory states. Ratification is the act by which the provisions of a treaty are formally
confirmed and approved by a State. By ratifying a treaty signed in its behalf, a state
expresses its willingness to be bound by the provisions of such treaty. After the treaty is
signed by the state's representative, the President, being accountable to the people, is
burdened with the responsibility and the duty to carefully study the contents of the
treaty and ensure that they are not inimical to the interest of the state and its people.
Thus, the President has the discretion even after the signing of the treaty by the
Philippine representative whether or not to ratify the same. The Vienna Convention on
the Law of Treaties does not contemplate to defeat or even restrain this power of the
head of states. If that were so, the requirement of ratification of treaties would be
pointless and futile. It has been held that a state has no legal or even moral duty to ratify
a treaty which has been signed by its plenipotentiaries. 18 There is no legal obligation to
ratify a treaty, but it goes without saying that the refusal must be based on substantial
grounds and not on superficial or whimsical reasons. Otherwise, the other state would be
justified in taking offense. 19
It should be emphasized that under our Constitution,the power to ratify is vested in the
President, subject to the concurrence of the Senate. The role of the Senate, however, is
limited only to giving or withholding its consent, or concurrence, to the ratification. 20
Hence, it is within the authority of the President to refuse to submit a treaty to the
Senate or, having secured its consent for its ratification, refuse to ratify it. 21 Although
the refusal of a state to ratify a treaty which has been signed in its behalf is a serious
step that should not be taken lightly, 22 such decision is within the competence of the
President alone, which cannot be encroached by this Court via a writ of mandamus. This
Court has no jurisdiction over actions seeking to enjoin the President in the performance
of his official duties. 23 The Court, therefore, cannot issue the writ of mandamus prayed
for by the petitioners as it is beyond its jurisdiction to compel the executive branch of the
government to transmit the signed text of Rome Statute to the Senate. HEAcDC

IN VIEW WHEREOF, the petition is DISMISSED.

SO ORDERED.
||| (Pimentel, Jr. v. Office of the Executive Secretary, G.R. No. 158088, [July 6,
2005], 501 PHIL 303-318)

135. MARIANO JR. V COMELEC

EN BANC
[G.R. No. 118577. March 7, 1995.]
JUANITO MARIANO, JR.,
et
al., petitioners, vs. THE COMMISSION ON ELECTIONS,
THE
MUNICIPALITY OF MAKATI, HON. JEJOMAR BINAY, THE
MUNICIPAL TREASURER, AND SANGGUNIANG BAYAN OF
MAKATI,respondents.
[G.R. No. 118627. March 7, 1995.]
JOHN
R.
OSMEA, petitioner, vs. THE COMMISSION ON ELECTIONS, THE
MUNICIPALITY OF MAKATI, HON. JEJOMAR BINAY, MUNICIPAL
TREASURER,
AND
SANGGUNIANG
BAYAN
OF
MAKATI, respondents.
Villamor Legarda & Associates for petitioner in G.R. No. 118627.
Acosta & Corvera Law Offices for petitioners in G.R. No. 118577.
Emmanuel P.J . Tamase for private respondents.
The Solicitor General for public respondent.
SYLLABUS
1. ADMINISTRATIVE LAW; LOCAL GOVERNMENT CODE;DRAWING OF TERRITORIAL
BOUNDARIES; REQUIRED; RATIONALE. The importance of drawing with precise
strokes the territorial boundaries of a local unit of government cannot be
overemphasized. The boundaries must be clear for they define the limits of the
territorial jurisdiction of a local government unit. It can legitimately exercise
powers of government only within the limits of its territorial jurisdiction. Beyond
these limits, its acts are ultra vires. Needless to state, any uncertainty in the
boundaries of local government units will sow costly conflicts in the exercise of
governmental powers which ultimately will prejudice the people's welfare. This is
the evil sought to be avoided by the Local Government Code in requiring that the
land area of a local government unit must be spelled out in metes and bounds,
with technical descriptions.
2. STATUTORY CONSTRUCTION; RULE THAT LAW MUST BE ENFORCED WHEN
ASCERTAINED, ALTHOUGH IT MAY NOT BE CONSISTENT WITH THE STRICT LETTER
OF THE STATUTE; APPLICATION IN CASE AT BAR. Congress did not intend that
laws creating new cities must contain therein detailed technical descriptions

similar to those appearing in Torrens titles, as petitioners seem to imply. To require

such description in the law as a condition sine qua non for its validity would be to
defeat the very purpose which the Local Government seeks to serve. The manifest
intent of the Code is to empower local government units and to give them their
rightful due. It seeks to make local governments more responsive to the needs of
their constituents while at the same time serving as a vital cog in national
development. To invalidate R.A. No. 7854 on the mere ground that no cadastral
type of description was used in the law would serve the letter but defeat the spirit
of the Code. It then becomes a case of the master serving the slave, instead of
the other way around. This could not be the intendment of the law. Too well
settled is the rule that laws must be enforced when ascertained, although it may
not be consistent with the strict letter of the statute. Courts will not follow the
letter of the statute when to do so would depart from the true intent of the
legislature or would otherwise yield conclusions inconsistent with the general
purpose of the act (Torresv. Limjap, 56 Phil. 141; Taada v. Cuenco, 103 Phil.
1051; Hidalgo v. Hidalgo, 33 SCRA 1105). Legislation is an active instrument of
government which, for purposes of interpretation, means that laws have ends to
achieve, and statutes should be so construed as not to defeat but to carry out
such ends and purposes (Bocobo v. Estanislao, 72 SCRA 520).
3. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF LAW, WHEN CHALLENGED;
REQUIREMENTS. The requirements before a litigant can challenge the
constitutionality of a law are well-delineated. They are: (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 on the constitutional question must be
necessary to the determination of the case itself. (Dumlao v. COMELEC, 95 SCRA
392 [1980]; Cruz, Constitutional Law, 1991 ed., p. 24)
4. ID.; REAPPORTIONMENT OF LEGISLATIVE DISTRICT; RULE; APPLICATION IN CASE
AT BAR. In the recent case of Tobiasv. Abalos, G.R. No. 114783, December 8,
1994, this Court ruled that reapportionment of legislative districts may be made
through a special law, such as in the charter of a new city. The Constitution
(Section 5(1), Article VI) clearly provides that Congress shall be composed of not
more than two hundred fifty (250) members, unless otherwise fixed by law. As
thus worded, the Constitution did not preclude Congress from increasing its
membership by passing a law, other than a general reapportionment law. This is
exactly what was done by Congress in enacting R.A. No. 7854 and providing for an
increase in Makati's legislative district. Moreover, to hold that reapportionment
can only be made through a general apportionment law, with a review of all the
legislative districts allotted to each local government unit nationwide, would
create an unequitable situation where a new city or province created by Congress
will be denied legislative representation for an indeterminate period of time. That
intolerable situation will deprive the people of a new city or province a particle of
their sovereignty. Sovereignty cannot admit of any kind of subtraction. It is
indivisible. It must be forever whole or it is not sovereignty.

DAVIDE, JR., J ., concurring opinion:

1. CONSTITUTIONAL LAW; LOCAL GOVERNMENT CODE OF 1991 (R.A. No. 7160);
REQUIREMENT THAT TERRITORIAL BOUNDARIES BE IDENTIFIED BY METES AND
BOUNDS WITH TECHNICAL DESCRIPTION; WHEN NOT APPLICABLE; CASE AT BAR.
Section 10, Article X of the Constitution provides that "[n]o province, city,
municipality or barangay may be created, divided, merged, abolished, or its
boundary substantially altered, except in accordance with the criteria established
in the local government code and subject to the approval by a majority of the
votes cast in a plebiscite in the political units directly affected." These criteria are
now set forth in Section 7 of the Local Government Code of 1991 (R.A. No. 7160).
One of these is that the territorial jurisdiction of the local government unit to be
created or converted should be properly identified by metes and bounds with
technical descriptions. The omission of R.A. No. 7854 (An Act Converting the
Municipality of Makati Into a Highly Urbanized City to be Known as the City of
Makati) to describe the territorial boundaries of the city by metes and bounds
does not make R.A. No. 7854 unconstitutional or illegal. The Constitution does not
provide for a description by metes and bounds as a condition sine qua non for the
creation of a local government unit or its conversion from one level to another.
The criteria provided for in Section 7 of R.A. No. 7854 are not absolute, for, as a
matter of fact, the section starts with the clause "as a general rule." The
petitioners' reliance on Section 450 of R.A. No. 7160 is unavailing. Said section
only applies to the conversion of a municipality or a cluster of barangays into a
COMPONENT CITY, not a highly urbanized city.
2. ID.; R.A. NO. 7854; INCREASE IN THE NUMBER OF LEGISLATIVE SEATS;
JUSTIFIED. Strictly speaking, the increase in the number of legislative seats for
the City of Makati provided for in R.A. No. 7854 is not an increase justified by the
clause unless otherwise fixed by law in paragraph 1, Section 5, Article VI of the
Constitution. That clause contemplates of thereapportionment mentioned in the
succeeding paragraph (4) of the said Section which reads in full as follows: "Within
three years following the return of every census, the Congress shall make a
reapportionment of legislative districts based on the standards provided in this
section." In short, the clause refers to a general reapportionment law. The
increase under R.A. No. 7854 is a permissible increase under Sections 1 and 3 of
the Ordinance appended to the Constitution.
DECISION
PUNO, J :
p

At bench are two (2) petitions assailing certain provisions of Republic Act
No. 7854 as unconstitutional. R.A. No. 7854is entitled, "An Act Converting the
Municipality of Makati Into a Highly Urbanized City to be known as the City of
Makati." 1

G.R. No. 118577 involves a petition for prohibition and declaratory relief.
It was filed by petitioners Juanito Mariano,Jr., Ligaya S. Bautista, Teresita Tibay,
Camilo Santos, Frankie Cruz, Ricardo Pascual, Teresita Abang, Valentina
Pitalvero, Rufino Caldoza, Florante Alba, and Perfecto Alba. Of the petitioners,
only Mariano, Jr., is a resident of Makati. The others are residents of Ibayo
Ususan, Taguig, Metro Manila. Suing as taxpayers, they assail as
unconstitutional Sections 2, 51 and 52 of R.A. No. 7854 on the following
grounds:
"1. Section 2 of R.A. No.
territorial jurisdiction of
descriptions, in violation
relation to Sections 7 and

7854 did not properly identify the land area or

Makati by metes and bounds, with technical
of Section 10, Article X of the Constitution, in
450 of the Local Government Code;

2. Section 51 of R.A. No. 7854 attempts to alter or restart the 'three

consecutive term' limit for local elective officials, in violation of Section 8,
Article X and Section 7, Article VI of the Constitution.
3. Section 52 of R.A. No. 7854 is unconstitutional for:
(a) it increased the legislative district of Makati only by special
law (the Charter in violation of the constitutional provision
requiring a general reapportionment law to be passed by
Congress within three (3) years following the return of every
census;
dctai

(b) the increase in legislative district, was not expressed in the

title of the bill; and
(c) the addition of another legislative district in Makati is not
in accord with Section 5 (3), Article VI of the constitution for
as of the latest survey (1990 census), the population of Makati
stands at only 450,000."

G.R. No. 118627 was filed by petitioner John H. Osmea as senator,

taxpayer, and concerned citizen. Petitioner assails Section 52 of R.A. No.
7854 as unconstitutional on the same grounds as aforestated.
We find no merit in the petitions.
I
Section 2, Article I of R.A. No. 7854 delineated the land area of the
proposed city of Makati, thus:
"SEC. 2. The City of Makati. The Municipality of Makati shall be converted
into a highly urbanized city to be known as the City of Makati, hereinafter
referred to as the City, which shall comprise the present territory of the
Municipality of Makati in Metropolitan Manila Area over which it has
jurisdiction bounded on the northeast by Pasig River and beyond by the
City of Mandaluyong and the Municipality of Pasig; on the southeast by the

municipalities of Pateros and Taguig; onthe southwest by the City of Pasay

and the Municipality of Taguig; and, on the northwest, by the City of Manila.
The foregoing provision shall be without prejudice to the resolution by the
appropriate agency or forum of existing boundary disputes or cases
involving questions of territorial jurisdiction between the City of Makati and
the adjoining local government units." (Emphasis supplied)

In G.R. No. 118577, petitioners claim that this delineation violates

Sections 7 and 450 of the Local Government Codewhich require that the area of
a local government unit should be made by metes and bounds with technical
descriptions. 2
The importance of drawing with precise strokes the territorial boundaries
of a local unit of government cannot be overemphasized. The boundaries must
be clear for they define the limits of the territorial jurisdiction of a local
government unit. It can legitimately exercise powers of government only within
the limits of its territorial jurisdiction. Beyond these limits, its acts are ultra
vires. Needless to state, any uncertainty in the boundaries of local government
units will sow costly conflicts in the exercise of governmental powers which
ultimately will prejudice the people's welfare. This is the evil sought to be
avoided by the Local Government Code in requiring that the land area of a local
government unit must be spelled out in metes and bounds, with technical
descriptions.
Given the facts of the cases at bench, we cannot perceive how this evil
can be brought about by the description made in Section 2 of R.A. No. 7854.
Petitioners have not demonstrated that the delineation of the land area of the
proposed City of Makati will cause confusion as to its boundaries. We note that
said delineation did not change even by an inch the land area previously
covered by Makati as a municipality. Section 2 did not add, subtract, divide, or
multiply the established land area of Makati. In language that cannot be any
clearer, Section 2 stated that the city's land area "shall comprise
the present territory of the municipality."
The deliberations of Congress will reveal that there is a legitimate reason
why the land area of the proposed City of Makati was not defined by metes and
bounds, with technical descriptions. At the time of the consideration of R.A. No.
7854, the territorial dispute between the municipalities of Makati and Taguig
over Fort Bonifacio was under court litigation. Out of a becoming sense of
respect to a co-equal department of government, the legislations felt that the
dispute should be left to the courts to decide. They did not want to foreclose
the dispute by making a legislative finding of fact which could decide the issue.
This would have ensued if they defined the land area of the proposed city by its
exact metes and bounds, with technical descriptions. 3 We take judicial notice
of the fact that Congress has also refrained from using the metes and bounds
description of land areas of other local government units with unsettled
boundary disputes. 4

We hold that the existence of a boundary dispute does not per se present
an unsurmountable difficulty which will prevent Congress form defining with
reasonable certitude the territorial jurisdiction of a local government unit. In
the cases at bench, Congress maintained the existing boundaries of the
proposed City of Makati but as an act of fairness, made them subject to the
ultimate resolution by the courts. Considering these peculiar circumstances, we
are not prepared to hold that Section 2 of R.A. 7854 is unconstitutional. We
sustain the submission of the Solicitor General in this regard, viz:
"Going now to Sections 7 and 450 of the Local Government Code, it is
beyond cavil that the requirement stated therein,viz: 'the territorial
jurisdiction of newly created or converted cities should be described by
metes and bounds, with technical descriptions' was made in order to
provide a means by which the area of said cities may be reasonably
ascertained. In other words, the requirement on metes and bounds was
meant merely as tool in the establishment of local government units. It is
not an end in itself. Ergo, so long as the territorial jurisdiction of a city may
be reasonably ascertained, i.e., by referring to common boundaries with
neighboring municipalities, as in this case, then, it may be concluded that
the legislative intent behind the law has been sufficiently served.
Certainly, Congress did not intend that laws creating new cities must
contain therein detailed technical descriptions similar to those appearing in
Torrens titles, as petitioners seem to imply. To require such description in
the law as a condition sine qua non for its validity would be to defeat the
very purpose which the Local Government Code seeks to serve. The
manifest intent of the Code is to empower local government units and to
give them their rightful due. It seeks to make local governments more
responsive to the needs of their constituents while at the same time
serving as a vital cog in national development. To invalidate R.A. No.
7854 on the mere ground that no cadastral type of description was used in
the law would serve the letter but defeat the spirit of the Code. It then
becomes a case of the master serving the slave, instead of the other way
around. This could not be the intendment of the law.
Too well settled is the rule that laws must be enforced when ascertained,
although it may not be consistent with the strict letter of the statute. Courts
will not follow the letter of the statute when to do so would depart from the
true intent of the legislature or would otherwise yield conclusions
inconsistent with the general purpose of the act. (Torres v. Limjap, 56 Phil.
141; Taada v. Cuenco, 103 Phil. 1051; Hidalgo v. Hidalgo, 33 SCRA 1105).
Legislation is an active instrument of government which, for purposes of
interpretation, means that laws have ends to achieve, and statutes should
be so construed as not to defeat but to carry out such ends and purposes
(Bocobo v. Estanislao, 72 SCRA 520). The same rule must indubitably apply
to the case at bar."

II
Petitioners in G.R. No. 118577 also assail the constitutionality of Section
51, Article X of R.A. No. 7854. Section 51 states:

"SEC. 51. Officials of the City of Makati. The represent elective officials of
the Municipality of Makati shall continue as the officials of the City of Makati
and shall exercise their powers and functions until such time that a new
election is held and the duly elected officials shall have already qualified
and assume their offices: Provided, The new city will acquire a new
corporate existence. The appointive officials and employees of the City
shall likewise continue exercising their functions and duties and they shall
be automatically absorbed by the city government of the City of Makati."

They contend that this section collides with Section 8, Article X and Section 7,
Article VI of the Constitution which provide:
"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.
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."
cdll

Petitioners stress that under these provisions, elective local

officials, including Members of the House of Representatives, have a term of
three (3) years and are prohibited from serving for more than three (3)
consecutive terms. They argue that by providing that the new city shall acquire
a new corporate existence, Section 51 of R.A. No. 7854 restarts the term of the
present municipal elective officials of Makati and disregards the terms
previously serve by them. In particular, petitioners point that Section 51 favors
the incumbent Makati Mayor, respondent Jejomar Binay, who has already
served for two (2) consecutive terms. They further argue that should Mayor
Binay decide to run and eventually win as city mayor in the coming elections,
he can still run for the same position in 1998 and seek another three-year
consecutive term since his previous three-year consecutive term as municipal
mayor would not be counted. Thus, petitioners conclude that said Section 51
has been conveniently crafted to suit the political ambitions of respondent
Mayor Binay.
We cannot entertain this challenge to the constitutionality of Section 51.
The requirements before a litigant can challenge the constitutionality of a law
are well-delineated. They are: (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 on the constitutional question must be necessary to the
determination of the case itself. 5
Petitioners have far from complied with these requirements. The petition
is premised on the occurrence of many contingent events, i.e., that Mayor
Binay will run again in this coming mayoralty elections; that he would be reelected in said elections; and that he would seek re-election for the same post
in the 1998 elections. Considering that these contingencies may or may not
happen, petitioners merely pose a hypothetical issue which has yet to ripen to
an actual case or controversy. Petitioners who are residents of Taguig
(except Mariano) are not also the proper parties to raise this abstract issue.
Worse, they hoist this futuristic issue in a petition for declaratory relief over
which this Court has no jurisdiction.
III
Finally, petitioners in the two (2) cases at bench assail the
constitutionality of Section 52, Article X of R.A. No. 7854.Section 52 of the
Charter provides:
"SEC. 52. Legislative Districts. Upon its conversion into a highlyurbanized city, Makati shall thereafter have at leasttwo (2) legislative
districts that shall initially correspond to the two (2) existing districts
created under Section 3 (a) ofRepublic Act No. 7166 as implemented by
the Commission on Elections to commence at the next national elections to
be held after the effectivity of this Act. Henceforth, barangays Magallanes,
Dasmarias, and Forbes shall be with the first district, in lieu of Barangay
Guadalupe-Viejo which shall form part of the second district." (Emphasis
supplied)

They contend that the addition of another legislative district in Makati is

unconstitutional for: (1) reapportionment 6 cannot made by a special law; (2)
the addition of a legislative district is not expressed in the title of the
bill; 7 and (3) Makati's population, as per the 1990 census, stands at only four
hundred fifty thousand (450,000).
These issues have been laid to rest in the recent case

of Tobias v. Abalos. 8 In said case, we ruled that reapportionment of legislative

districts may be made through a special law, such as in the charter of a new
city. The Constitution 9 clearly provides that Congress shall be composed of not
more than two hundred fifty (250) members,unless otherwise fixed by law. As
thus worded, the Constitution did not preclude Congress from increasing its
membership by passing a law, other than a general reapportionment law. This
is exactly what was done by Congress in enacting R.A. No. 7854 and providing
for an increase in Makati's legislative district. Moreover, to hold that
reapportionment can only be made through a general apportionment law, with
a review of all the legislative districts allotted to each local government unit

nationwide, would create an inequitable situation where a new city or province

created by Congress will be denied legislative representation for an
indeterminate period of time. 10 That intolerable situation will deprive the
people of a new city or province a particle of their sovereignty. 11 Sovereignty
cannot admit of any kind of subtraction. It is indivisible. It must be forever
whole or it is not sovereignty.
Petitioners cannot insist that the addition of another legislative district in
Makati is not in accord with Section 5(3), Article VI 12 of the Constitution for as
of the latest survey (1990 census), the population of Makati stands at only four
hundred fifty thousand (450,000). 13 Said section provides, inter alia, that a
city with a population of at least two hundred fifty thousand (250,000) shall
have at least one representative. Even granting that the population of Makati
as of the 1990 census stood at four hundred fifty thousand (450,000), its
legislative district may still be increased since it has met the minimum
population requirement of two hundred fifty thousand (250,000). In fact,
Section 3 of the Ordinance appended to the Constitution provides that a city
whose population has increased to more than two hundred fifty thousand
(250,000) shall be entitled to at least one congressional representative. 14
Finally, we do not find merit in petitioners' contention that the creation of
an additional legislative district in Makati should have been expressly stated in
the title of the bill. In the same case of Tobias v. Abalos, op cit. we reiterated
the policy of the Court favoring a liberal construction of the "one title-one
subject" rule so as not to impede legislation. To be sure, the Constitution does
not command that the title of a law should exactly mirror, fully index, or
completely catalogue all its details. Hence, we ruled that "it should be sufficient
compliance if the title expresses the general subject and all the provisions are
germane to such general subject."
WHEREFORE, the petitions are hereby DISMISSED for lack of merit. No
costs.
SO ORDERED.
(Mariano, Jr. v. Commission on Elections, G.R. No. 118577, 118627, [March 7,
1995], 312 PHIL 259-276)
|||

136. MONTEJO V COMELEC

EN BANC
[G.R. No. 118702. March 16, 1995.]
CIRILO ROY
G. MONTEJO, petitioner, vs. COMMISSION ON ELECTIONS, respon
dent. SERGIO A.F. APOSTOL,intervenor.
The Solicitor General for respondent.
Jose S. Songco for Intervenor Sergio A.F. Apostol.
Gumaro and Bagua Law Offices for Intervenor.
SYLLABUS
1. POLITICAL LAW; CONSTITUTIONAL COMMISSIONS; COMMISSION ON ELECTIONS;
POWERS;
REDISTRICTING
MUNICIPALITIES
BASED ON AN
ORDINANCE
APPORTIONING SEAT IN THE CONGRESS TO DIFFERENT LEGISLATIVE DISTRICTS AS
APPENDED IN THE 1987 CONSTITUTION, NOT VALID; CASE AT BAR. Our first
inquiry relates to the constitutional power of the respondent COMELEC to transfer
municipalities from one legislative district to another legislative district in the
province of Leyte. The basic powers of respondent COMELEC, as enforcer and
administrator of our election laws, are spelled out in black and white in Section
2(c), Article IX of the Constitution. Respondent COMELEC does not invoke this
provision but relies on the Ordinance appended to the 1987 Constitution as the
source of its power of redistricting which is traditionally regarded as part of the
power to make laws. The Ordinance is entitled "Apportioning the Seats of the
House of Representatives of the Congress of the Philippines to the Different
Legislative Districts in Provinces and Cities and the Metropolitan Manila Area." The
Ordinance was made necessary because Proclamation No. 3 of President Corazon
C. Aquino, ordaining the Provisional Constitution of the Republic of the Philippines,
abolished the Batasang Pambansa. She then exercised legislative powers under
the Provisional Constitution. The Ordinance was the principal handiwork of then
Commissioner Hilario G. Davide, Jr., now a distinguished member of this Court.
The records reveal that the ConstitutionalCommission had to resolve several
prejudicial issues before authorizing the first congressional elections under
the 1987 Constitution. Among the vital issues were: whether the members of the
House of Representatives would be elected by district or by province; who shall
undertake the apportionment of the legislative districts; and, how the
apportionment should be made. Commissioner Davide, Jr., offered three (3)
options for the Commission to consider: (1) allow President Aquino to do the
apportionment by law; (2) empower the COMELEC to make the apportionment; or

(3) let the Commission exercise the power by way of an Ordinance appended
to the Constitution. The different dimensions of the options were discussed by
Commissioners Davide, Felicitas S. Aquino and Blas F. Ople. On the basis of their
extensive
debate,
the
ConstitutionalCommission denied
to
the COMELEC the major power of legislative apportionment as it itself exercised
the power. Section 2 of the Ordinance only empowered the COMELEC "to
make minor adjustments of the reapportionment herein made." The meaning of
the phrase "minor adjustments" was again clarified in the debates of
the Commission. That consistent with the limits of its power to make minor
adjustments, Section 3 of the Ordinance did not also give the
respondent COMELEC any authority to transfer municipalities from one legislative
district to another district. The power granted by Section 3 to the
respondent COMELEC is to adjust the number of members (not municipalities)
"apportioned to the province out of which such new province was created. . . ."
Prescinding from these premises, we hold that respondent COMELEC committed
grave abuse of discretion amounting to lack of jurisdiction when it promulgated
Section 1 of its Resolution No. 2736 transferring the municipality of Capoocan of
the Second District and the municipality of Palompon of the Fourth District to the
Third District of Leyte.
2. ID.; LEGISLATIVE DEPARTMENT; CONGRESS OF THE PHILIPPINES;
POWER; REAPPORTIONMENT OF LEGISLATIVE DISTRICTS. It may well be that
the conversion of Biliran from a sub-province to a regular province brought
about an imbalance in the distribution of voters and inhabitants in the five (5)
legislative districts of the province of Leyte. This imbalance, depending on its
degree, could devalue a citizen's vote in violation of the equal protection clause
of the Constitution. Be that as it may, it is not proper at this time for petitioner
to raise this issue using the case at bench as his legal vehicle. The issue
involves a problem of reapportionment of legislative districts and petitioner's
remedy
lies
with
Congress.
Section
5(4),
Article
VI
of the
Constitution categorically gives Congress the power to reapportion, thus:
"Within three (3) years following the return of every census, the Congress shall
make a reapportionment of legislative districts based on the standards
provided in this section." In Macias vs. COMELEC, (No. L-18684, September 14,
1961, 3 SCRA 1) we ruled that the validity of a legislative apportionment is a
justiciable question. But while this Court can strike down an unconstitutional
reapportionment, it cannot itself make the reapportionment as petitioner would
want us to do by directing respondent COMELEC to transfer the municipality
of Tolosa from the First District to the Second District of the province of Leyte.
DECISION
PUNO, J :
p

More than political fortunes are at stake in the case at bench. Petitioner
Cirilo Roy G. Montejo, representing the First District of Leyte, pleads for the
annulment of Section 1 of Resolution No. 2736 of the COMELEC, redistricting
certain municipalities in Leyte, on the ground that it violates the principle of
equality of representation. To remedy the alleged inequity, petitioner seeks to
transfer the municipality of Tolosa from his district to the Second District of the
province. Intervenor Sergio A.F. Apostol, representing the Second District,
vigorously opposed the inclusion of Tolosa in his district. We gave due course to
the petition considering that, at bottom, it involves the validity of the
unprecedented
exercise
by
the COMELEC of
the legislative
power of
redistricting and reapportionment.
The province of Leyte with the cities of Tacloban and Ormoc is composed
of five (5) legislative districts. 1
The first district 2 covers Tacloban City and the municipalities
Alangalang, Babatngon, Palo, San Miguel, Sta. Fe, Tanauan and Tolosa.

of

The second district 3 is composed of the municipalities of Barugo,

Barauen, Capoocan, Carigara, Dagami, Dulag, Jaro, Julita, La Paz, Mayorga,
MacArthur, Pastrana, Tabontabon, and Tunga.
The third district 4 is composed of the municipalities of Almeria, Biliran,
Cabucgayan, Caibiran, Calubian, Culaba, Kawayan, Leyte, Maripipi, Naval, San
Isidro, Tabango, and Villaba.
The fourth district 5 is composed of Ormoc City and the municipalities of
Albuera, Isabel, Kananga, Matagob, Merida, and Palompon.
The fifth district 6 is composed of the municipalities of Abuyog, Bato,
Baybay, Hilongos, Hindang, Inopacan, Javier, Mahaplag, and Matalom.
Biliran, located in the third district of Leyte, was made its sub-province by
virtue of Republic Act No. 2141 enacted onApril 8, 1959. 7 Section 1 of the law
spelled out the municipalities comprising the sub-province, viz: "Almeria,
Biliran, Cabucgayan, Caibiran, Culaba, Kawayan, Maripipi and Naval and all the
territories comprised therein."
On January 1, 1992, the Local Government Code took effect. Pursuant to
its Section 462, the sub-province of Biliran became a regular province. It
provides:
"Existing sub-provinces are hereby converted into regular provinces upon
approval by a majority of the votes cast in a plebiscite to be held in the
sub-provinces and the original provinces directly affected. The plebiscite
shall
be
conducted
by
the COMELEC simultaneously
with
the
national elections following the effectivity of this code. The new legislative
districts created as a result of such conversion shall continue to be
represented in Congress by the duly-elected representatives of the original
districts out of which said new provinces or districts were created until their
own representatives shall have been elected in the next regular
congressional elections and qualified."

The conversion of Biliran into a regular province was approved by a majority of

the votes cast in a plebiscite held on May 11, 1992. As a consequence of the
conversion, eight (8) municipalities of the Third District composed the new
province of Biliran, i.e., Almeria, Biliran, Cabucgayan, Caibiran, Culaba, Kawayan,
Maripipi, and Naval. A further consequence was to reduce the Third District to
five (5) municipalities with a total population of 145,067 as per the 1990
census.
LLphil

To remedy the resulting inequality in the distribution of inhabitants, voters

and municipalities in the province of Leyte, respondent COMELEC held
consultation meetings with the incumbent representatives of the province and
other interested parties. On December 29, 1994, it promulgated Resolution No.
2736 where, among others, it transferred the municipality of Capoocan of the
Second District and the municipality of Palompon of the Fourth District to the
Third District of Leyte. The composition of the First District which includes the
municipality of Tolosa and the composition of the Fifth District were not
disturbed. After the movement of municipalities, the composition of the five (5)
legislative districts appeared as follows:
First District:

Population

Registered
Voters

(1990)
1.
2.
3.
4.
5.
6.
7.
8.

Tacloban City,
Alangalang,
Babatngon,
Palo,
San Miguel,
Sta. Fe,
Tanauan and,
Tolosa,

TOTAL

Second District:

(1994)
137,190
33,375
17,795
38,100
13,438
12,119
38,033
13,299

81,679
20,543
9,929
20,816
8,167
7,497
22,357
7,700

303,349

178,688

Population

Registered
Voters

(1990)
1.
2.

Barugo,
Barauen,

(1994)
23,817
46,029

13,237
23,307

3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

Carigara,
Dagami,
Dulag,
Jaro,
Julita,
La Paz,
Mayorga,
Mac Arthur,
Pastrana,
Tabontabon, and
Tunga;

TOTAL

Third District:

38,863
25,606
33,020
31,727
9,944
14,311
10,530
13,159
12,565
7,183
5,413

22,036
16,519
19,375
17,139
6,196
9,003
5,868
8,628
7,348
4,419
3,387

272,167

156,462

Population

Registered
Voters

(1990)
1.
2.
3.
4.
5.
6.
7.

Calubian,
Leyte,
San Isidro,
Tabango,
Villaba,
Capoocan, and
Palompon;

TOTAL

Fourth District:

(1994).
25,968
32,575
24,442
29,743
32,339
23,687
45,745

16,649
16,415
14,916
15,487
21,227
13,595
27,474

214,499

125,763

Population

Registered
Voters

(1990)
1.
2.
3.
4.

Ormoc City,
Albuera,
Isabel,
Kananga,

(1994)
129,456
32,395
33,389
36,288

75,140
17,493
21,889
19,873

5.
6.

Matagob, and
Merida

TOTAL

Fifth District:

15,474
22,345

9,407
12,474

269,347

155,995

Population

Registered
Voters

(1990)
1.
2.
3.
4.
5.
6.
7.
8.
9.

Abuyog,
Bato,
Baybay,
Hilongos,
Hindang,
Inopacan,
Javier,
Mahaplag, and
Matalom

TOTAL

(1994)
47,265
28,197
82,281
48,617
16,272
16,894
18,658
22,673
28,291

28,682
16,130
47,923
26,871
9,659
10,401
11,713
13,616
16,247

309,148

181,242

Petitioner Montejo filed a motion for reconsideration calling the attention

of respondent COMELEC, among others, to the inequitable distribution of
inhabitants and voters between the First and Second Districts. He alleged that
the First District has 178,688 registered voters while the Second District has
156,462 registered voters or a difference of 22,226 registered voters. To
diminish the difference, he proposed that the municipality of Tolosa with 7,700
registered voters be transferred from the First to the Second District. The
motion was opposed by intervenor, Sergio A.F. Apostol.
RespondentCommission denied the motion ruling that: (1) its adjustment of
municipalities involved the least disruption of the territorial composition of
each district; and (2) said adjustment complied with the constitutional
requirement that each legislative district shall comprise, as far as practicable,
contiguous, compact and adjacent territory.
LibLex

In this petition, petitioner insists that Section 1 of Resolution No. 2736

violates the principle of equality of representation ordained in the Constitution.
Citing Wesberry v. Sanders, 8 he argues that respondent COMELEC violated
"the constitutional precept that as much as practicable one man's vote in a

congressional election is to be worth as much as another's." The Solicitor

General, in his Comment, concurred with the views of the petitioner. The
intervenor, however, opposed the petition on two (2) grounds:
(1) COMELEC has no jurisdiction to promulgate Resolution No. 2736; and (2)
assuming it has jurisdiction, said Resolution is in accord with the Constitution.
Respondent COMELEC filed its own Comment alleging that it acted within the
parameters of the Constitution.
We find Section 1 of Resolution No. 2736 void.
While the petition at bench presents a significant issue, our first inquiry
will relate to the constitutional power of the respondent COMELEC 9 to transfer
municipalities from one legislative district to another legislative district in the
province of Leyte. The basic powers of respondent COMELEC, as enforcer and
administrator of our election laws, are spelled out in black and white in Section
2(c), Article IX of the Constitution. Rightly, respondent COMELEC does not
invoke this provision but relies on the Ordinance appended to the 1987
Constitution as the source of its power of redistricting which is traditionally
regarded as part of the power to make laws. The Ordinance is entitled
"Apportioning the Seats of the House of Representatives of the Congress of the
Philippines to the Different Legislative Districts in Provinces and Cities and the
Metropolitan Manila Area." Its substantive sections state:
"SECTION 1. For purposes of the election of Members of the House of
Representatives of the First Congress of the Philippines under the
Constitution proposed by the 1986 Constitutional Commission and
subsequent elections, and until otherwise provided by law, the Members
thereof shall be elected from legislative districts apportioned among the
provinces, cities, and the Metropolitan Manila Area as follows:
xxx xxx xxx
"SECTION 2. The Commission on Elections is hereby empowered to
make minor adjustments of the reapportionment herein made.
"SECTION 3. Any province that may hereafter be created, or any city whose
population may hereafter increase to more than two hundred fifty thousand
shall be entitled in the immediately following election to at least one
Member or such number of Members as it may be entitled to on the basis of
the number of its inhabitants and according to the standards set forth in
paragraph (3), Section 5 of Article VI of the Constitution. The number of
Members apportioned to the province out of which such new province was
created or where the city, whose population has so increased, is
geographically located shall be correspondingly adjusted by
the Commission on Elections but such adjustment shall not be made within
one hundred and twenty days before the election." (Emphasis supplied)

The Ordinance was made necessary because Proclamation No. 3 10 of

President Corazon C. Aquino, ordaining theProvisional Constitution of the

Republic of the Philippines, abolished the Batasang Pambansa. 11 She then

exercised legislative powers under the Provisional Constitution. 12
The Ordinance was the principal handiwork of then Commissioner Hilario
G. Davide, Jr., 13 now a distinguished member of this Court. The records reveal
that the Constitutional Commission had to resolve several prejudicial issues
before authorizing the first congressional elections under the 1987
Constitution. Among the vital issues were: whether the members of the House
of Representatives would be elected by district or by province; who shall
undertake the apportionment of the legislative districts; and, how the
apportionment should be made. 14 Commissioner Davide, Jr., offered three (3)
options for the Commission to consider: (1) allow President Aquino to do the
apportionment by law; (2) empower the COMELEC to make the apportionment;
or (3) let the Commission exercise the power by way of an Ordinance appended
to the Constitution. 15 The different dimensions of the options were discussed
by Commissioners Davide, Felicitas S. Aquino and Blas F. Ople. We quote the
debates in extenso, viz: 16
xxx xxx xxx
"MR. PADILLA. Mr. Presiding Officer.
"THE PRESIDING OFFICER (Mr. Jamir). Commissioner Padilla is recognized.
"MR. PADILLA. I think I have filed a very simple motion by way of
amendment by substitution and this was, I believe, a prior or a proposed
amendment. Also, the chairman of the Committee on the Legislative said
that he was proposing a vote first by the Chamber on the concept of
whether the election is by province and cities on the one hand, or by
legislative districts on the other. So I propose this simple formulation which
reads: 'FOR THE FIRST ELECTION UNDER THISCONSTITUTION THE
LEGISLATIVE
DISTRICTS
SHALL
BE
APPORTIONED
BY
THE COMMISSION ON ELECTIONS.' I hope the chairman will accept the
proposed amendment.
SUSPENSION OF SESSION
"MR. DAVIDE. The effect is, more or less, the same insofar as the
apportionment is concerned, but the Bernas-Sarmiento, et al. proposal
would also provide for a mandate for the apportionment later, meaning
after the first election, which will in effect embody what
the Commission had approved, reading as follows: 'Within three years
following the return of every census, the Congress shall make a
reapportionment of legislative districts based on the standards provided in
this section.'
"So, Mr. Presiding Officer, may I request for a suspension of the session, so
that all the proponents can work together.
"THE PRESIDING OFFICER (Mr. Jamir). The session is suspended.

"It was 3:33 p.m.

RESUMPTION OF SESSION
"At 3:40 p.m., the session was resumed.
"THE PRESIDING OFFICER (Mr. Jamir). The session is resumed.
"Commissioner Davide is recognized.
"MR. DAVIDE. Mr. Presiding Officer, as a compromise, I wonder if
the Commission will allow this. We will just delete the proposed
subparagraph (4) and all the capitalized words in paragraph (5). So that in
paragraph (5), what would be left would only be the following: 'Within three
years following the return of every census, the Congress shall make a
reapportionment of legislative districts based on the standards provided in
this section.'
"But
we
shall
have
an
ordinance
appended
to
the new
Constitution indicating specifically the following: 'FOR PURPOSES OF THE
ELECTION OF MEMBERS OF THE HOUSE OF REPRESENTATIVES IN THE FIRST
CONGRESSIONAL ELECTION IMMEDIATELY FOLLOWING THE RATIFICATION
OF
THIS
CONSTITUTION
PROPOSED
BY
THE
1986
CONSTITUTIONALCOMMISSION AND SUBSEQUENT ELECTIONS AND UNTIL
OTHERWISE PROVIDED BY LAW, THE MEMBERS OF THE HOUSE OF
REPRESENTATIVES SHALL BE ELECTED FROM LEGISLATIVE DISTRICTS
APPORTIONED AMONG THE PROVINCES, CITIES AND THE METROPOLITAN
MANILA AREA AS FOLLOWS.'
"And what will follow will be the allocation of seats to Metropolitan Manila
Area, to the provinces and to the cities, without indicating the
municipalities comprising each of the districts. Then, under Section 2, we
will mandate theCOMELEC to make the actual apportionment on the basis
of the number of seats provided for and allocated to each province by us.
"MS. AQUINO. Mr. Presiding Officer.
"THE PRESIDING OFFICER (Mr. Jamir). Commissioner Aquino is recognized.
"MS. AQUINO. I have to object to the provision which will give mandate
to COMELEC to do the redistricting. Redistricting is vitally linked to the
baneful practices of cutting up areas or spheres of influence; in other
words, gerrymandering. ThisCommission, being a nonpartisan, a
nonpolitical deliberative body, is in the best possible situation under the
circumstances to undertake that responsibility. We are not wanting in
expertise and in time because in the first place, the Committee on the
Legislative has prepared the report on the basis of the recommendation of
the COMELEC.
"MR. OPLE. Mr. Presiding Officer.

"THE PRESIDING OFFICER (Mr. Jamir). Commissioner Ople is recognized.

"MR. OPLE. I would like to support the position taken by Commissioner

Aquino in this respect. We know that the reapportionment of provinces and
cities for the purpose of redistricting is generally inherent in the constituent
power or in the legislative power. And I would feel very uncertain about
delegating this to a quasi-judicial body even if it is one of the constitutional
offices created under this Constitution. We have the assurance of
Commissioner Davide, as chairman of the Committee on the Legislative,
that even given the very short time remaining in the life of
this Commission, there is no reason why we cannot complete the work of
reapportionment on the basis of the COMELEC plan which the committee
has already thoroughly studied and which remains available to the
Constitutional Commission.
"So, I support the position taken by Commissioner Aquino, Mr. Presiding
Officer. I think, it is the safest, the most reasonable, and the most workable
approach that is available to this Commission.
"THE PRESIDING OFFICER (Mr. Jamir). What does Commissioner Davide say:
"MR. DAVIDE. The issue now is whether this body will make the
apportionment itself or whether we will leave it to theCOMELEC. So, there
arises, therefore, a prejudicial question for the body to decide. I would
propose that the Commissionshould now decide what body should make
the apportionment. Should it be the Commission or should it be
theCOMELEC?
And
the
Committee on the
Legislative
will
act
accordingly on the basis of the decision.
"MR. BENGZON. Mr. Presiding Officer.
"THE PRESIDING OFFICER (Mr. Jamir). Commissioner Bengzon is recognized.
"MR. BENGZON. Apropos of that, I would like to inform the body that I
believe the Committee on the Legislative has precisely worked on this
matter and they are ready with a list of apportionment. They have, in fact,
apportioned the whole country into various districts based on the
recommendation of the COMELEC. So they are ready with the list and if this
body would wish to apportion the whole country by district itself, then I
believe we have the time to do it because the Committee on the Legislative
is ready with that particular report which need only to be appended to the
Constitution. So if this body is ready to accept the work of the
Committee on the Legislative we would have no problem. I just would like
to give that information so that the people here would be guided
accordingly when they vote.
"MR. RODRIGO. Mr. Presiding Officer.

"THE PRESIDING OFFICER (Mr. Jamir). Commissioner Rodrigo is recognized.

"MR. RODRIGO. I just would like to ask Commissioner Davide some
questions.
"THE PRESIDING OFFICER (Mr. Jamir). Commissioner Davide may yield if he
so desires.
"MR. DAVIDE. Gladly.
"MR. RODRIGO. Will this apportionment which we are considering apply
only to the first election after the enactment ofthe Constitution?
"MR. DAVIDE. On the basis of the Padilla proposal, it will be for the first
election; on the basis of the Sarmiento proposal, it will only apply to the
first election.
"MR. RODRIGO. And after that, Congress will have the power to
reapportion.
LibLex

"MR. DAVIDE. Yes.

"MR. RODRIGO. So, if we attach this to the Constitution the
reapportionment based on the COMELEC study and between the approval
of the Constitution and the first election the COMELEC no longer has the
power to change that even a bit.
xxx xxx xxx
"THE PRESIDING OFFICER (Mr. Jamir). Commissioner Regalado is
recognized.
"MR. REGALADO. May I address a clarificatory question to Commissioner
Davide?
"THE PRESIDING OFFICER (Mr. Jamir). The Gentleman will please proceed.
"MR. REGALADO. On the basis of the Commissioner's proposed
apportionment and considering the fact that there will be a corresponding
reduction to 183 seats, would there be instances of underrepresentation or
non-representation?
"MR. DAVIDE. None at all, Mr. Presiding Officer. I can assure
the Commission that there will be no case of inequitable distribution. It will
come out to be one for every 350 to 400,000 inhabitants.
"MR. REGALADO. And that would be within the standard that we refer to.
"MR. DAVIDE. Yes, Mr. Presiding Officer.

"MR. REGALADO. Thank you.

"MR. RAMA. Mr. Presiding Officer.
"THE PRESIDING OFFICER (Mr. Jamir). The Floor Leader is recognized.
"MR. RAMA. The parliamentary situation is that there was a motion by
Commissioner Sarmiento to mandate COMELEC to do the redistricting. This
was also almost the same motion by Commissioner Padilla and I think we
have had some kind of meeting of minds. On the other hand, there seems
to be a prejudicial question, an amendment to the amendment as
suggested by Commissioner Aquino, that instead of the COMELEC, it should
be this Commission that shall make the redistricting. So may I ask
Commissioner Aquino, if she insists on that idea, to please formulate it into
a motion so we can vote on that first as an amendment to the amendment.
"THE PRESIDING OFFICER (Mr. Jamir). Commissioner Aquino is recognized.
"MS. AQUINO. The motion is for this Commission to undertake the
apportionment of the legislative districts instead of the proposal
that COMELEC be given the mandate to undertake the responsibility.
xxx xxx xxx
"MR. SARMIENTO. May I be clarified, Mr. Presiding Officer. Is it the motion or
the proposed amendment?
"THE PRESIDING OFFICER (Mr. Jamir). The proposed amendment.
"MR. SARMIENTO. May we move for the approval of this proposed
amendment which we substitute for paragraphs 4 and 5.
"MR. DAVIDE. May I request that it should be treated merely as a motion to
be followed by a deletion of paragraph 4 because that should not really
appear as a paragraph in Section 5; otherwise, it will appear very ugly
in the Constitutionwhere we mandate a Commission that will
become functus officio to have the authority. As a matter of fact, we cannot
exercise that authority until after the ratification of the new Constitution.
"THE PRESIDING OFFICER (Mr. Jamir). What does Commissioner Sarmiento
say?
"MR. SARMIENTO. It is accepted, Mr. Presiding Officer. So, may I move for
the approval of this proposed amendment.
llcd

"MS. AQUINO. Mr. Presiding Officer.

"THE PRESIDING OFFICER (Mr. Jamir). Commissioner Aquino is recognized.

"MS. AQUINO. Would that require a two-thirds vote or a simple plurality to

adopt that motion?
"THE PRESIDING OFFICER (Mr. Jamir). That will require a two-thirds vote.
"MS. AQUINO. Thank you. Mr. Presiding Officer.
"MR. SARMIENTO. May I restate the motion, Mr. Presiding Officer.
"THE PRESIDING OFFICER (Mr. Jamir). The Gentleman may proceed.
"MR. SARMIENTO. May I move that this Commission do the reapportionment
of the legislative districts.
"MS. AQUINO. Mr. Presiding Officer.
"THE PRESIDING OFFICER (Mr. Jamir). What is the pleasure of Commissioner
Aquino?
"MS. AQUINO. May I be clarified again on the motion. Is Commissioner
Sarmiento, therefore, adopting my motion? Would it not be right for him to
move that the COMELEC be mandated?
"MR. SARMIENTO. No, we accepted the amendment. It is already
the Commission that will be mandated.
"MS. AQUINO. So, the Gentleman has accepted the amendment.
"Thank you.
"MR. SARMIENTO. I am voting that this Commission do the
reapportionment.
VOTING
"THE PRESIDING OFFICER (Mr. Jamir). Let us proceed to vote.
"As many as are in favor, please raise their hand. (Several Members raised
their hand.)
"As many as are against, please raise their hand. (No Member raised his
hand.)
"The results show 30 votes in favor and none against; the motion is
approved."

Clearly then, the Constitutional Commission denied to

the COMELEC the major power of legislative apportionment as it itself exercised
the power. Section 2 of the Ordinance only empowered the COMELEC "to

make minor adjustments of the reapportionment herein made." The meaning of

the phrase "minor adjustments" was again clarified in the debates
the Commission, viz:

17of

xxx xxx xxx

"MR. GUINGONA. This is just clarificatory, Mr. Presiding Officer. In Section 2,
the Commission on Elections is empowered to make minor
adjustments on the apportionment made here.
"MR. DAVIDE. Yes, Mr. Presiding Officer.
"MR. GUINGONA. We have not set any time limit for this.
"MR. DAVIDE. We should not set a time limit unless during the period of
amendments a proposal is made. The authority conferred would
be on minor corrections or amendments, meaning to say, for instance, that
we may have forgotten an intervening municipality in the
enumeration, which ought to be included in one district. That we shall
consider a minor amendment.
"MR. GUINGONA. Thank you.
xxx xxx xxx
"THE PRESIDING OFFICER (Mr. Romulo). Commissioner de Castro is
recognized.
"MR. DE CASTRO. Thank you.
I was about to ask the committee the meaning of minor adjustment. Can it
be possible that one municipality in a district be transferred to another
district and call it a minor adjustment?
"MR.
DAVIDE. That
cannot
be
done. Mr. Presiding
Officer. Minor, meaning, that there should be no change in the allocations
per district. However, it may happen that we have forgotten a
municipality in between, which is still in the territory of one assigned
district, or there may be an error in the correct name of a particular
municipality because of changes made by the interim Batasang Pambansa
and the Regular Batasang Pambansa. There were many batas pambansa
enacted by both the interim and the Regular Batasang Pambansa changing
the names of municipalities.
"MR. DE CASTRO. So, the minor adjustment may be made only if one of the
municipalities is not mentioned in the ordinance appended to, and it will be
up for the COMELEC now to adjust or to put such municipality to a certain
district.

"MR. DAVIDE. Yes, Mr. Presiding Officer. For instance, we may not have the
data regarding a division of a municipality by the interim Batasang
Pambansa or the Regular Batasang Pambansa into two municipalities,
meaning, a mother municipality and the new municipality, but still actually
these are within the geographical district area.
"MR. DE CASTRO. So the minor adjustment which the COMELEC cannot do
is that, if , for example, my municipality is in the First District of
Laguna, they cannot put that in any other district.
"MR. DAVIDE. That is not even a minor correction. It is a substantive one.

LexLib

"MR. DE CASTRO. Thank you.

Consistent with the limits of its power to make minor adjustments,

Section 3 of the Ordinance did not also give the respondent COMELEC any
authority to transfer municipalities from one legislative district to another
district. The power granted by Section 3 to the respondent COMELEC is
to adjust the number of members (not municipalities) "apportioned to the
province out of which such new province was created. . . ."
Prescinding from these premises, we hold that
respondent COMELEC committed grave abuse of discretion amounting to lack
of jurisdiction when it promulgated Section 1 of its Resolution No. 2736
transferring the municipality of Capoocan of the Second District and the
municipality of Palompon of the Fourth District to the Third District of Leyte.

cdrep

It may well be that the conversion of Biliran from a sub-province to a

regular province brought about an imbalance in the distribution of voters and
inhabitants in the five (5) legislative districts of the province of Leyte. This
imbalance, depending on its degree, could devalue a citizen's vote in violation
of the equal protection clause of the Constitution. Be that as it may, it is not
proper at this time for petitioner to raise this issue using the case at bench as
his legal vehicle. The issue involves a problem of reapportionment of legislative
districts and petitioner's remedy lies with Congress. Section 5(4), Article VI
of the Constitution categorically gives Congress the power to reapportion, thus:
"Within three (3) years following the return of every census, the Congress shall
make a reapportionment of legislative districts based on the standards
provided in this section." In Macias v. COMELEC , 18 we ruled that the validity
of a legislative apportionment is a justiciable question. But while this Court can
strike down an unconstitutional reapportionment, it cannot itself make the
reapportionment as petitioner would want us to do by directing
respondent COMELEC to transfer the municipality ofTolosa from the First
District to the Second District of the province of Leyte.
prcd

IN VIEW WHEREOF, Section 1 of Resolution No. 2736 insofar as it

transferred the municipality of Capoocan of the Second District and the
municipality of Palompon of the Fourth District to the Third District of the
province of Leyte, is annulled and set aside. We also deny the Petition praying

for the transfer of the municipality of Tolosa from the First District to the
Second District of the province of Leyte. No costs.
SO ORDERED.
(Montejo v. Commission on Elections, G.R. No. 118702, [March 16, 1995], 312
PHIL 492-513)
|||

137 BAGABUYO V COMELEC

EN BANC
[G.R. No. 176970. December 8, 2008.]
ROGELIO
Z. BAGABUYO, petitioner, vs. COMMISSION ON ELECTIONS, resp
ondent.
DECISION
BRION, J :
p

Before us is the petition for certiorari, prohibition, and mandamus, 1 with a

prayer for the issuance of a temporary restraining order and a writ of preliminary
injunction,
filed
by
Rogelio Bagabuyo (petitioner) to
prevent
the Commission on Elections(COMELEC) from
implementing
Resolution
No.
7837 on the ground that Republic Act No. 9371
7837 implements is unconstitutional.

the law that Resolution No.

DEICTS

BACKGROUND FACTS
On October 10, 2006, Cagayan de Oro's then Congressman Constantino G. Jaraula
filed and sponsored House Bill No. 5859: "An Act Providing for the Apportionment
of the Lone Legislative District of the City of Cagayan de Oro."

3 This

law

eventually became Republic Act (R.A.) No. 9371. 4 It increased Cagayan de Oro's
legislative district from one to two. For the election of May 2007, Cagayan de
Oro's voters would be classified as belonging to either the first or the second
district, depending ontheir place of residence. The constituents of each district
would elect their own representative to Congress as well as eight members of
the Sangguniang Panglungsod.
Section 1 of R.A. No. 9371 apportioned the City's barangays as follows:

Legislative Districts The lone legislative district of the City of Cagayan De

Oro is hereby apportioned to commence in the next national elections after
the effectivity of this Act. Henceforth, barangays Bonbon, Bayabas,
Kauswagan, Carmen, Patag, Bulua, Iponan, Baikingon, San Simon, Pagatpat,
Canitoan, Balulang, Lumbia, Pagalungan, Tagpangi, Taglimao, Tuburan,
Pigsag-an, Tumpagon, Bayanga, Mambuaya, Dansulihon, Tignapoloan and
Bisigan shall comprise the first district while barangays Macabalan, Puntod,
Consolacion, Camaman-an, Nazareth, Macasandig, Indahag, Lapasan, Gusa,
Cugman, FS Catanico, Tablon, Agusan, Puerto, Bugo, and Balubal and all
urban barangays from Barangay 1 to Barangay 40 shall comprise the
second district.

On March
7837

13,

2007,

the COMELEC en

6 implementing R.A. No. 9371.

Petitioner

Rogelio Bagabuyo filed

Banc promulgated

Resolution

No.

EaTCSA

the

present

petition

against

the COMELEC on March 27, 2007. 7 On 10 April 2008, the petitioner amended the
petition to include the following as respondents: Executive Secretary Eduardo
Ermita; the Secretary of the Department of Budget and Management; the
Chairman of the Commission on Audit; the Mayor and the members of
the Sangguniang Panglungsod of Cagayan de Oro City; and its Board of
Canvassers.

In asking for the nullification of R.A. No. 9371 and Resolution No.
7837 on constitutional grounds, the petitioner argued that the COMELEC cannot
implement R.A. No. 9371 without providing for the rules, regulations and
guidelines for the conduct of a plebiscite which is indispensable for the division or
conversion of a local government unit. He prayed for the issuance of an order
directing the respondents to cease and desist from implementing R.A. No.
9371 and COMELEC Resolution
No.
7837,
and
to
revert
instead
to COMELEC Resolution No. 7801 which provided for a single legislative district for
Cagayan de Oro.
Since the Court did not grant the petitioner's prayer for a temporary restraining
order or writ of preliminary injunction, the May 14 National and
Local Elections proceeded according to R.A. No. 9371 and Resolution No. 7837.
The respondent's Comment on the petition, filed through the Office of the Solicitor
General, argued that: 1) the petitioner did not respect the hierarchy of courts, as
the Regional Trial Court (RTC) is vested with concurrent jurisdiction over cases
assailing the constitutionality of a statute; 2) R.A. No. 9371 merely increased the
representation of Cagayan de Oro City in the House of Representatives
and Sangguniang Panglungsod pursuant to Section 5, Article VI of the 1987
Constitution; 3) the criteria established under Section 10, Article X of the 1987
Constitution only apply when there is a creation, division, merger, abolition or
substantial alteration of boundaries of a province, city, municipality,

or barangay; in this case, no such creation, division, merger, abolition or

alteration of boundaries of a local government unit took place; and 4) R.A. No.
9371 did not bring about any change in Cagayan de Oro's territory, population
and income classification; hence, no plebiscite is required.
AEDCHc

The petitioner argued in his reply that: 1) pursuant to the Court's ruling in Del
Mar v. PAGCOR, 9 the Court may take cognizance of this petition if compelling
reasons, or the nature and importance of the issues raised, warrant the
immediate exercise of its jurisdiction; 2) Cagayan de Oro City's reapportionment
under R.A. No. 9371 falls within the meaning of creation, division, merger,
abolition or substantial alteration of boundaries of cities under Section 10, Article
X of the Constitution; 3) the creation, division, merger, abolition or substantial
alteration of boundaries of local government units involve a common denominator
the material change in the political and economic rights of the local
government units directly affected, as well as of the people therein; 4) a voter's
sovereign power to decide on who should be elected as the entire city's
Congressman was arbitrarily reduced by at least one half because the questioned
law and resolution only allowed him to vote and be voted for in the district
designated by the COMELEC; 5) a voter was also arbitrarily denied his right to
elect the Congressman and the members of the city council for the other
legislative district, and 6) government funds were illegally disbursed without prior
approval by the sovereign electorate of Cagayan De Oro City.

10

THE ISSUES
The core issues, based on the petition and the parties' memoranda, can be limited
to the following contentious points:
1) Did the petitioner violate the hierarchy of courts rule; if so, should
the instant petition be dismissed onthis ground?
2) Does R.A.
No.
9371 merely
provide
for
the
legislative
reapportionment of Cagayan de Oro City, or does it involve the
division and conversion of a local government unit?
3) Does R.A. No. 9371 violate the equality of representation doctrine?
OUR RULING
Except for the issue of the hierarchy of courts rule, we find the petition
totally without merit.
The hierarchy of courts principle.
The

Supreme

Court

has

original

jurisdiction

over

petitions

for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. 11 It

was pursuant to this original jurisdiction that the petitioner filed the present
petition.

While this jurisdiction is shared with the Court of Appeals 12 and the RTCs, 13 a
direct invocation of the Supreme Court's jurisdiction is allowed only when there
are special and important reasons therefor, clearly and especially set out in the
petition. Reasons of practicality, dictated by an increasingly overcrowded docket
and the need to prioritize in favor of matters within our exclusive jurisdiction,
justify the existence of this rule otherwise known as the "principle of hierarchy of
courts".More generally stated, the principle requires that recourse must first be
made to the lower-ranked court exercising concurrent jurisdiction with a higher
court.

14

Among the cases we have considered sufficiently special and important to be

exceptions to the rule, are petitions forcertiorari, prohibition, mandamus and quo
warranto against our nation's lawmakers when the validity of their enactments is

assailed. 15 The present petition is of this nature; its subject matter and the
nature of the issues raised among them, whether legislative reapportionment
involves a division of Cagayan de Oro City as a local government unit are
reasons enough for considering it an exception to the principle of hierarchy of
courts. Additionally, the petition assails as well a resolution of the COMELEC en
banc issued to implement the legislative apportionment that R.A. No.
9371 decrees. As an action against a COMELEC en banc resolution, the case falls
under Rule 64 of the Rules of Court that in turn requires a review by this
Court via a Rule 65 petition for certiorari. 16 For these reasons, we do not see
the principle of hierarchy of courts to be a stumbling block in our consideration of
the present case.
TEcHCA

The Plebiscite Requirement.

The petitioner insists that R.A. No. 9371 converts and divides the City of Cagayan
de Oro as a local government unit, and does not merely provide for the City's
legislative apportionment. This argument essentially proceeds from a
misunderstanding of the constitutional concepts of apportionment of legislative
districts and division of local government units.
Legislative apportionment is defined by Black's Law Dictionary as the
determination of the number of representatives which a State, county or other
subdivision may send to a legislative body. 17 It is the allocation of seats in a
legislative body in proportion to the population; the drawing of voting district lines
so
as
to
equalize
population
and
voting
power
among
the

districts. 18 Reapportionment, on the other hand, is the realignment or

change in legislative districts brought about by changes in population and
mandated by the constitutional requirement of equality of representation.

19

Article VI (entitled Legislative Department) of the 1987 Constitution lays down the
rules on legislative apportionment under its Section 5 which provides:

Sec. 5(1). (1) The House of Representatives shall be composed of not more
than two hundred fifty members unless otherwise fixed by law, who shall be
elected from legislative districts apportioned among the provinces, cities,
and the Metropolitan Manila area in accordance with the number of their
respective inhabitants, and on the basis of a uniform and progressive ratio,
and those who, as provided by law, shall be elected through a party-list
system of registered national, regional and sectoral parties or
organizations.

xxx xxx xxx

(3) Each legislative district shall comprise, as far as practicable, continuous,
compact, and adjacent territory. Each city with a population of at least two
hundred fifty thousand, or each province, shall have at least one
representative.
aCATSI

(4) Within three years following the return of every census, the Congress
shall make a reapportionment of legislative districts based on the standards
provided in this section.

Separately from the legislative districts that legal apportionment or

reapportionment speaks of, are the local government units (historically and
generically referred to as "municipal corporations") that the Constitution itself
classified into provinces, cities, municipalities and barangays. 20 In its strict and
proper sense, a municipality has been defined as "a body politic and corporate
constituted by the incorporation of the inhabitants of a city or town for the
purpose of local government thereof." 21 The creation, division, merger, abolition
or alteration of boundary of local government units, i.e., of provinces, cities,
municipalities, and barangays, are covered by the Article on Local Government
(Article X). Section 10 of this Article provides:
No province, city, municipality, or barangay may be created, divided,
merged, abolished, or its boundary substantially altered, except in
accordance with the criteria established in the local government code and
subject to approval by a majority of the votes cast in a plebiscite in the
political unit directly affected.
ICcDaA

Under both Article VI, Section 5, and Article X, Section 10 of the Constitution, the
authority to act has been vested in the Legislature. The Legislature undertakes

the apportionment and reapportionment of legislative districts, 22 and likewise

actson local government units by setting the standards for their creation, division,
merger, abolition and alteration of boundaries and by actually creating, dividing,
merging, abolishing local government units and altering their boundaries through
legislation. Other than this, not much commonality exists between the two

provisions since they are inherently different although they interface and relate
with one another.
The concern that leaps from the text of Article VI, Section 5 is political
representation and the means to make a legislative district sufficiently
represented so that the people can be effectively heard. As above stated, the aim
of legislative apportionment is "to equalize population and voting power among

districts". 23 Hence, emphasis is given to the number of people represented; the

uniform and progressive ratio to be observed among the representative districts;
and accessibility and commonality of interests in terms of each district being, as
far as practicable, continuous, compact and adjacent territory. In terms of the
people represented, every city with at least 250,000 people and every province
(irrespective of population) is entitled to one representative. In this sense,
legislative districts, on the one hand, and provinces and cities, on the other, relate
and interface with each other. To ensure continued adherence to the required
standards of apportionment, Section 5 (4) specifically mandates reapportionment
as soon as the given standards are met.
In contrast with the equal representation objective of Article VI, Section 5, Article
X, Section 10 expressly speaks of how local government units may be "created,
divided, merged, abolished, or its boundary substantially altered". Its concern is
the commencement, the termination, and the modification of local government
units' corporate existence and territorial coverage; and it speaks of two specific
standards that must be observed in implementing this concern, namely, the
criteria established in the local government code and the approval by a majority
of the votes cast in a plebiscite in the political units directly affected. Under
the Local Government Code (R.A. No. 7160) passed in 1991, the criteria of
income, population and land area are specified as verifiable indicators of viability
and capacity to provide services. 24 The division or merger of existing units
must comply with the same requirements (since a new local government unit will
come into being), provided that a division shall not reduce the income, population,
or land area of the unit affected to less than the minimum requirement prescribed
in the Code.

25

ITHADC

A pronounced distinction between Article VI, Section 5 and, Article X, Section 10

is on the requirement of a plebiscite. TheConstitution and the Local Government
Code expressly require a plebiscite to carry out any creation, division, merger,
abolition or alteration of boundary of a local government unit. 26 In contrast, no
plebiscite requirement exists under the apportionment or reapportionment

provision. In Tobias v. Abalos, 27 a case that arose from the division of the
congressional district formerly covering San Juan and Mandaluyong into separate
districts, we confirmed this distinction and the fact that no plebiscite is needed in
a legislative reapportionment. The plebiscite issue came up because one was
ordered and held for Mandaluyong in the course of its conversion into a highly
urbanized city, while none was held for San Juan. In explaining why this happened,

the Court ruled that no plebiscite was necessary for San Juan because the
objective of the plebiscite was the conversion of Mandaluyong into a highly
urbanized city as required by Article X, Section 10 the Local Government Code;
the creation of a new legislative district only followed as a consequence.In other
words, the apportionment alone and by itself did not call for a plebiscite, so that
none was needed for San Juan where only a reapportionment took place.
The need for a plebiscite under Article X, Section 10 and the lack of requirement
for one under Article VI, Section 5 can best be appreciated by a consideration of
the historical roots of these two provisions, the nature of the concepts they
embody as heretofore discussed, and their areas of application.
A Bit of History.
In Macias v. COMELEC, 28 we first jurisprudentially acknowledged the American
roots of our apportionment provision, noting its roots from the Fourteenth
Amendment 29 of the U.S. Constitution and from the constitutions of some
American states. The Philippine Organic Act of 1902 created the Philippine
Assembly, 30 the body that acted as the lower house of the bicameral
legislature under the Americans, with the Philippine Commission acting as the
upper house. While the members of the Philippine Commission were appointed by
the U.S. President with the conformity of the U.S. Senate, the members of the
Philippine Assembly were elected by representative districts previously delineated
under the Philippine Organic Act of 1902 pursuant to the mandate to apportion
the seats of the Philippine Assembly among the provinces as nearly as practicable
according to population. Thus, legislative apportionment first started in our
country.
IcHTED

The Jones Law or the Philippine Autonomy Act of 1916 maintained the
apportionment provision, dividing the country into 12 senate districts and 90
representative districts electing one delegate each to the House of
Representatives. Section 16 of the Act specifically vested the Philippine
Legislature with the authority to redistrict the Philippine Islands.
Under the 1935 Constitution, Article VI, Section 5 retained the concept of
legislative apportionment together with "district" as the basic unit of
apportionment; the concern was "equality of representation . . . as an essential
feature of republican institutions" as expressed in the leading case
of Macias v. COMELEC.
justiciable,
not
a

31 The

case ruled that inequality of representation is a

political
issue,
which
ruling
was
reiterated

in Montejo v. COMELEC. 32 Notably, no issue regarding the holding of a

plebiscite ever came up in these cases and the others that followed, as no
plebiscite was required.
Article VIII, Section 2 of the 1973 Constitution retained the concept of equal
representation "in accordance with the number of their respective inhabitants

and on the basis of a uniform and progressive ratio" with each district being, as
far as practicable, contiguous, compact and adjacent territory. This formulation
was essentially carried over to the 1987 Constitution, distinguished only from the
previous one by the presence of party-list representatives. In neither Constitution
was a plebiscite required.
The need for a plebiscite in the creation, division, merger, or abolition of local
government units was not constitutionally enshrined until the 1973 Constitution.
However, as early as 1959, R.A. No. 2264 33 required, in the creation of barrios
by Provincial Boards, that the creation and definition of boundaries be "upon
petition of a majority of the voters in the areas affected". In 1961, the Charter of
the City of Caloocan (R.A. No. 3278) carried this further by requiring that the "Act
shall take effect after a majority of voters of the Municipality of Caloocan vote in
favor of the conversion of their municipality into a city in a plebiscite." This was
followed up to 1972 by other legislative enactments requiring a plebiscite as a
condition for the creation and conversion of local government units as well as the
transfer of sitios from one legislative unit to another.
requirement was accorded constitutional status.

34 In

1973, the plebiscite

CcHDSA

Under these separate historical tracks, it can be seen that the holding of a
plebiscite was never a requirement in legislative apportionment or
reapportionment. After it became constitutionally entrenched, a plebiscite was
also always identified with the creation, division, merger, abolition and alteration
of boundaries of local government units, never with the concept of legislative
apportionment.

Nature and Areas of Application.

The legislative district that Article VI, Section 5 speaks of may, in a sense, be
called a political unit because it is the basis for the election of a member of the
House of Representatives and members of the local legislative body. It is not,
however, a political subdivision through which functions of government are
carried out. It can more appropriately be described as arepresentative unit that
may or may not encompass the whole of a city or a province, but unlike the latter,
it is not a corporate unit. Not being a corporate unit, a district does not act for and
in behalf of the people comprising the district; it merely delineates the areas
occupied by the people who will choose a representative in their national affairs.
Unlike a province, which has a governor; a city or a municipality, which has a
mayor; and a barangay, which has a punong barangay, a district does not have its
own chief executive. The role of the congressman that it elects is to ensure that
the voice of the people of the district is heard in Congress, not to oversee the
affairs of the legislative district. Not being a corporate unit also signifies that it
has no legal personality that must be created or dissolved and has no capacity to
act. Hence, there is no need for any plebiscite in the creation, dissolution or any
other similar action on a legislative district.

The local government units, on the other hand, are political and corporate units.
They are the territorial and political subdivisions of the state. 35 They possess
legal personality on the authority of the Constitution and by action of the
Legislature. The Constitution defines them as entities that Congress can, by law,
create, divide, abolish, merge; or whose boundaries can be altered
based on standards again established by both the Constitution and the
Legislature. 36 A local government unit's corporate existence begins upon the
election and qualification of its chief executive and a majority of the members of
its Sanggunian.

37

As a political subdivision, a local government unit is an "instrumentality of the

state in carrying out the functions of government." 38 As a corporate entity with

a distinct and separate juridical personality from the State, it exercises special
functions for the sole benefit of its constituents. It acts as "an agency of the
community in the administration of local affairs" 39 and the mediums through

which the people act in their corporate capacity on local concerns. 40 In light of
these roles, the Constitution saw it fit to expressly secure the consent of the
people affected by the creation, division, merger, abolition or alteration of
boundaries of local government units through a plebiscite.
cCSEaA

These considerations clearly show the distinctions between a legislative

apportionment or reapportionment and the division of a local government unit.
Historically and by its intrinsic nature, a legislative apportionment does not
mean, and does not even imply, a division of a local government unit where the
apportionment takes place. Thus, the plebiscite requirement that applies to the
division of a province, city, municipality or barangay under the Local Government
Code should not apply to and be a requisite for the validity of a legislative
apportionment or reapportionment.
R.A. No. 9371 and COMELEC Res. No. 7837
R.A. No. 9371 is, on its face, purely and simply a reapportionment legislation
passed in accordance with the authority granted to Congress under Article VI,
Section 5 (4) of the Constitution. Its core provision Section 1 provides:
SEC. 1. Legislative Districts. The lone legislative district of the City of
Cagayan de Oro is hereby apportioned to commence in the next
national elections after the effectivity of this Act. Henceforth, barangays
Bonbon, Bayabas, Kauswagan, Carmen, Patag, Bulua, Iponan, Baikingon,
San Simon, Pagatpat, Canitoan, Balulang, Lumbia, Pagalungan, Tagpangi,
Taglimao, Tuburan, Pigsag-an, Tumpagon, Bayanga, Mambuaya, Dansulihon,
Tignapoloan and Bisigan shall comprise the first district while barangays
Macabalan, Puntod, Consolacion, Camaman-an, Nazareth, Macansandig,
Indahag, Lapasan, Gusa, Cugman, FS Catanico, Tablon, Agusan, Puerto,
Bugo and Balubal and all urban barangays from Barangay 1 to Barangay 40
shall comprise the second district.

Under these wordings, no division of Cagayan de Oro City as a political and

corporate entity takes place or is mandated. Cagayan de Oro City politically
remains a single unit and its administration is not divided along territorial lines. Its
territory remains completely whole and intact; there is only the addition of
another legislative district and the delineation of the city into two districts for
purposes of representation in the House of Representatives. Thus, Article X,
Section 10 of the Constitution does not come into play and no plebiscite is
necessary to validly apportion Cagayan de Oro City into two districts.
Admittedly, the legislative reapportionment carries effects beyond the creation of
another congressional district in the city by providing, as reflected
in COMELEC Resolution No. 7837, for additional Sangguniang Panglunsod seats to
be voted for along the lines of the congressional apportionment made. The
effect on the Sangguniang Panglunsod, however, is not directly traceable to R.A.
No. 9371 but to another law R.A. No. 6636

41 whose Section 3 provides:

EAcIST

SEC. 3. Other Cities. The provision of any law to the contrary

notwithstanding the City of Cebu, City of Davao, andany other city with
more than one representative district shall have eight (8) councilors for
each district who shall be residents thereof to be elected by the qualified
voters therein, provided that the cities of Cagayan de Oro, Zamboanga,
Bacolod, Iloilo and other cities comprising a representative district shall
have twelve (12) councilors each and all other cities shall have ten (10)
councilors each to be elected at large by the qualified voters of the said
cities: Provided, That in no case shall the present number of councilors
according to their charters be reduced.

However, neither does this law have the effect of dividing the City of Cagayan
de Oro into two political and corporate units and territories. Rather than divide
the city either territorially or as a corporate entity, the effect is merely to
enhance voter representation by giving each city voter more and greater say,
both in Congress and in the Sangguniang Panglunsod.
To illustrate this effect, before the reapportionment, Cagayan de Oro had only one
congressman and 12 city council members citywide for its population of
approximately 500,000. 42 By having two legislative districts, each of them with
one congressman, Cagayan de Oro now effectively has two congressmen, each
one representing 250,000 of the city's population. In terms of services for city
residents, this easily means better access to their congressman since each one
now services only 250,000 constituents as against the 500,000 he used to
represent. The same goes true for the Sangguniang Panglungsod with its ranks
increased from 12 to 16 since each legislative district now has 8 councilors. In
representation terms, the fewer constituents represented translate to a greater
voice for each individual city resident in Congress and in the Sanggunian;each
congressman and each councilor represents both a smaller area and fewer
constituents whose fewer numbers are now concentrated in each representative.
The City, for its part, now has twice the number of congressmen speaking for it
and voting in the halls of Congress. Since the total number of congressmen in the

country has not increased to the point of doubling its numbers, the presence of
two congressman (instead of one) from the same city cannot but be a quantitative
and proportional improvement in the representation of Cagayan de Oro City in
Congress.
Equality of representation.
The petitioner argues that the distribution of the legislative districts is unequal.
District 1 has only 93,719 registered voters while District 2 has 127,071. District 1
is composed mostly of rural barangays while District 2 is composed mostly of
urbanbarangays.
representation.

43 Thus, R.A.

No. 9371 violates the principle of equality of

A clarification must be made. The law clearly provides that the basis for districting
shall be the number of the inhabitants of a city or a province, not the number of
registered
voters therein.
We
settled
this
very
same
question
in Herrera v. COMELEC 44when we interpreted a provision in R.A. No.
7166 and COMELEC Resolution No. 2313 that applied to the Province of Guimaras.
We categorically ruled that the basis for districting is the number of inhabitants of
the Province of Guimaras by municipality based on the official 1995 Census of
Population as certified to by Tomas P. Africa, Administrator of the National
Statistics Office.
ADSIaT

The petitioner, unfortunately, did not provide information about the actual
population of Cagayan de Oro City. However, we take judicial notice of the August
2007
census
of
the
National
Statistics
Office
which
shows
that barangays comprising Cagayan de Oro's first district have a total population
of 254,644, while the second district has 299,322 residents. Undeniably, these

figures show a disparity in the population sizes of the districts. 45 The

Constitution, however, does not require mathematical exactitude or rigid equality
as a standard in gauging equality of representation. 46 In fact, for cities, all it
asks is that "each city with a population of at least two hundred fifty thousand
shall have one representative", while ensuring representation for every province
regardless of the size of its population. To ensure quality representation through
commonality of interests and ease of access by the representative to the
constituents, all that the Constitution requires is that every legislative district
should comprise, as far as practicable, contiguous, compact, and adjacent
territory. Thus, the Constitution leaves the local government units as they are
found and does not require their division, merger or transfer to satisfy the
numerical standard it imposes. Its requirements are satisfied despite some
numerical disparity if the units are contiguous, compact and adjacent as far as
practicable.

The petitioner's contention that there is a resulting inequality in the division of

Cagayan de Oro City into two districts because the barangays in the first district

are mostly rural barangays while the second district is mostly urban, is largely
unsubstantiated. But even if backed up by proper proof, we cannot question the
division on the basis of the difference in thebarangays' levels of development or
developmental focus as these are not part of the constitutional standards for
legislative apportionment or reapportionment. What the components of the two
districts of Cagayan de Oro would be is a matter for the lawmakers to determine
as a matter of policy. In the absence of any grave abuse of discretion or violation
of the established legal parameters, this Court cannot intrude into the wisdom of
these policies.

47

WHEREFORE, we hereby DISMISS the petition for lack of merit. Costs against the
petitioner.
THaCAI

SO ORDERED.

138. AQUINO III V COMELEC

EN BANC
[G.R. No. 189793. April 7, 2010.]
SENATOR BENIGNO SIMEON C. AQUINO III and MAYOR JESSE
ROBREDO, petitioners, vs. COMMISSION ONELECTIONS represen
ted by its Chairman JOSE A.R. MELO and its Commissioners,
RENE V. SARMIENTO, NICODEMO T. FERRER, LUCENITO N.
TAGLE, ARMANDO VELASCO, ELIAS R. YUSOPH AND GREGORIO
LARRAZABAL, respondents.
DECISION
PEREZ, J :
p

This case comes before this Court by way of a Petition for Certiorari and
Prohibition under Rule 65 of the Rules of Court. In this original action, petitioners
Senator Benigno Simeon C. Aquino III and Mayor Jesse Robredo, as public officers,
taxpayers and citizens, seek the nullification as unconstitutional of Republic Act
No. 9716, entitled "An Act Reapportioning the Composition of the First (1st) and
Second (2nd) Legislative Districts in the Province of Camarines Sur and Thereby

Creating a New Legislative District From Such Reapportionment." Petitioners

consequently pray that the respondent Commission onElections be restrained
from making any issuances and from taking any steps relative to the
implementation of Republic Act No. 9716.
Republic Act No. 9716 originated from House Bill No. 4264, and was signed into
law by President Gloria Macapagal Arroyo on12 October 2009. It took effect on 31
October 2009, or fifteen (15) days following its publication in the Manila Standard,
a newspaper of general circulation. 1 In substance, the said law created an
additional legislative district for the Province of Camarines Sur by reconfiguring
the existing first and second legislative districts of the province.
Prior to Republic Act No. 9716, the Province of Camarines Sur was estimated to
have a population of 1,693,821,
in this wise:

2 distributed among four (4) legislative districts

District

Municipalities/
Cities
1st District Del Gallego
Ragay
Lupi
Sipocot
Cabusao
2nd District Gainza
Milaor
Naga
Pili
Ocampo
3rd District Caramoan
Garchitorena
Goa
Lagonoy
Presentacion
4th District Iriga
Baao
Balatan
Bato

Population
Libmanan
Minalabac
Pamplona
Pasacao
San Fernando
Canaman
Camaligan
Magarao
Bombon
Calabanga
Sangay
San Jose
Tigaon
Tinamba
Siruma

417,304

Buhi
Bula
Nabua

429,070

474,899

372,548

Following the enactment of Republic Act No. 9716, the first and second districts of
Camarines Sur were reconfigured in order to create an additional legislative
district for the province. Hence, the first district municipalities of Libmanan,
Minalabac, Pamplona, Pasacao, and San Fernando were combined with the second
district municipalities of Milaor and Gainza to form a new second legislative
district. The following table
Act No. 9716:

3 illustrates

the reapportionment made by Republic

AIaSTE

District

Municipalities/
Cities
1st District Del Gallego
Ragay

Population
176,383

Lupi
Sipocot
Cabusao
2nd District Libmanan
Minalabac
Pamplona
Pasacao
3rd District Naga
(formerly Pili
2nd
District)
Ocampo
Canaman
4th District Caramoan
(formerly Garchitorena
3rd
District)
Goa
Lagonoy
Presentacion
5th District Iriga
(formerly Baao
4th
District)
Balatan
Bato

San Fernando
Gainza
Milaor

276,777

Camaligan
Magarao

439,043

Bombon
Calabanga
Sangay
San Jose
Tigaon
Tinamba
Siruma
Buhi
Bula

372,548

429,070

Nabua

Republic Act No. 9716 is a well-milled legislation. The factual recitals by both
parties of the origins of the bill that became the law show that, from the filing of
House Bill No. 4264 until its approval by the Senate on a vote of thirteen (13) in
favor and two (2) against, the process progressed step by step, marked by public
hearings on the sentiments and position of the local officials of Camarines
Sur on the creation of a new congressional district, as well as argumentation and
debate on the issue, now before us, concerning the stand of the oppositors of the
bill that a population of at least 250,000 is required by the Constitution for such
new district.

Petitioner Aquino III was one of two senators who voted against the approval of
the Bill by the Senate. His co-petitioner, Robredo, is the Mayor of Naga City, which
was a part of the former second district from which the municipalities of Gainza
and Milaor were taken for inclusion in the new second district. No other local
executive joined the two; neither did the representatives of the former third and
fourth districts of the province.
Petitioners contend that the reapportionment introduced by Republic Act No.
9716, runs afoul of the explicit constitutional standard that requires a minimum
population of two hundred fifty thousand (250,000) for the creation of a legislative

district.5 The petitioners claim that the reconfiguration by Republic Act No.
9716 of the first and second districts of Camarines Sur is unconstitutional,
because the proposed first district will end up with a population of less than
250,000 or only 176,383.

Petitioners rely on Section 5 (3), Article VI of the 1987 Constitution as basis for the
cited 250,000 minimum population standard.

6 The provision reads:

Article VI
Section 5. (1) . . .
(2) . . .
(3) Each legislative district shall comprise, as far as practicable, contiguous,
compact, and adjacent territory. Each city with a population of at least
two hundred fifty thousand, or each province, shall have at least
one representative.
DIcSHE

(4) . . . (Emphasis supplied).

The petitioners posit that the 250,000 figure appearing in the above-cited
provision is the minimum population requirement for the creation of a legislative

district. 7 The petitioners theorize that, save in the case of a newly created
province, each legislative district created by Congress must be supported by a

minimum population of at least 250,000 in order to be valid. 8Under this view,

existing legislative districts may be reapportioned and severed to form new
districts, provided each resulting district will represent a population of at least
250,000. On the other hand, if the reapportionment would result in the creation of
a legislative seat representing a populace of less than 250,000 inhabitants, the
reapportionment must be stricken down as invalid for non-compliance with the
minimum population requirement.
In support of their theory, the petitioners point to what they claim is the intent of
the framers of the 1987 Constitution to adopt a population minimum of 250,000 in
the creation of additional legislative seats. 9 The petitioners argue that when the
Constitutional Commission fixed the original number of district seats in the House
of Representatives to two hundred (200), they took into account the projected
national population of fifty five million (55,000,000) for the year
1986. 10 According to the petitioners, 55 million people represented by 200
district representatives translates to roughly 250,000 people for every one (1)
representative. 11 Thus, the 250,000 population requirement found in Section 5
(3), Article VI of the 1987 Constitution is actually based on the population
constant used by the Constitutional Commission in distributing the initial 200
legislative seats.
Thus did the petitioners claim that in reapportioning legislative districts
independently from the creation of a province, Congress is bound to observe a
250,000
population
threshold,
in
the
same
manner
that
the
Constitutional Commission did in the original apportionment.

Verbatim, the submission is that:

1. Republic Act 9716 is unconstitutional because the newly apportioned first
district of Camarines Sur failed to meet the population requirement
for the creation of the legislative district as explicitly provided in
Article VI, Section 5, Paragraphs (1) and (3) of the Constitution
and Section 3 of the Ordinance appended thereto; and
2. Republic Act 9716 violates the principle of proportional representation as
provided in Article VI, Section 5 paragraphs (1), (3) and (4) of the
Constitution.

12

The provision subject of this case states:

Article VI
Section 5. (1) The House of Representatives shall be composed of not more
than two hundred and fifty members, unless otherwise fixed by law, who
shall be elected from legislative districts apportioned among the provinces,
cities and the Metropolitan Manila area in accordance with the number of
their respective inhabitants, and on the basis of a uniform and progressive
ratio, and those who, as provided by law, shall be elected through a partylist system of registered national, regional and sectoral parties or
organizations.
EaHcDS

(2) . . .
(3) Each legislative district shall comprise, as far as practicable, contiguous,
compact, and adjacent territory. Each city with a population of at least two
hundred fifty thousand, or each province, shall have at least one
representative.
(4) Within three years following the return of every census, the Congress
shall make a reapportionment of legislative districts based on the standards
provided in this section.

On the other hand, the respondents, through the Office of the Solicitor General,
seek the dismissal of the present petition based on procedural and substantive
grounds.
On procedural matters, the respondents argue that the petitioners are guilty of
two (2) fatal technical defects: first, petitioners committed an error in choosing to
assail the constitutionality of Republic Act No. 9716 via the remedy
of Certiorariand Prohibition under Rule 65 of the Rules of Court; and second, the
petitioners have no locus standi to question the constitutionality of Republic Act
No. 9716.

On substantive matters, the respondents call attention to an apparent distinction

between cities and provinces drawn by Section 5 (3), Article VI of the 1987
Constitution. The respondents concede the existence of a 250,000 population
condition, but argue that a plain and simple reading of the questioned provision
will show that the same has no application with respect to the creation of
legislative districts in provinces. 13 Rather, the 250,000 minimum population is
only a requirement for the creation of a legislative district in a city.
In sum, the respondents deny the existence of a fixed population requirement for
the reapportionment of districts in provinces. Therefore, Republic Act No. 9716,
which only creates an additional legislative district within the province of
Camarines Sur, should be sustained as a perfectly valid reapportionment law.
We first pass upon the threshold issues.
The respondents assert that by choosing to avail themselves of the remedies
of Certiorari and Prohibition, the petitioners have committed a fatal procedural
lapse. The respondents cite the following reasons:
EHITaS

1. The instant petition is bereft of any allegation that the respondents

had acted without or in excess of jurisdiction, or with grave
abuse of discretion.
2. The remedy of Certiorari and Prohibition must be directed against a
tribunal, board, officer or person, whether exercising judicial,
quasi-judicial, or ministerial functions. Respondents maintain
that in implementing Republic Act No. 9716, they were not
acting as a judicial or quasi-judicial body, nor were they
engaging in the performance of a ministerial act.
3. The petitioners could have availed themselves of another plain,
speedy and adequate remedy in the ordinary course of law.
Considering that the main thrust of the instant petition is the
declaration of unconstitutionality of Republic Act No. 9716, the
same could have been ventilated through a petition for
declaratory relief, over which the Supreme Court has only
appellate, not original jurisdiction.
The respondents likewise allege that the petitioners had failed to show that they
had sustained, or is in danger of sustaining any substantial injury as a result of
the implementation of Republic Act No. 9716. The respondents, therefore,
conclude that the petitioners lack the required legal standing to question the
constitutionality of Republic Act No. 9716.
This Court has paved the way away from procedural debates when confronted
with issues that, by reason of constitutional importance, need a direct focus of the
arguments on their content and substance.

The Supreme Court has, on more than one occasion, tempered the application of

14 as well as relaxed the requirement of locus standi whenever

confronted with an important issue of overreaching significance to society. 15
procedural rules,

Hence, in Del Mar v. Philippine Amusement and Gaming Corporation

(PAGCOR) 16 and Jaworski v. PAGCOR, 17 this Court sanctioned momentary

deviation from the principle of the hierarchy of courts, and took original
cognizance of cases raising issues of paramount public importance. The Jaworski
case ratiocinates:
CAaSED

Granting arguendo that the present action cannot be properly treated as a

petition for prohibition, the transcendental importance of the issues
involved in this case warrants that we set aside the technical
defects and take primary jurisdiction over the petition at bar. One
cannot deny that the issues raised herein have potentially pervasive
influenceon the social and moral well being of this nation, specially the
youth; hence, their proper and just determination is an imperative
need. This is in accordance with the well-entrenched principle that
rules of procedure are not inflexible tools designed to hinder or
delay, but to facilitate and promote the administration of justice.
Their strict and rigid application, which would result in
technicalities that tend to frustrate, rather than promote
substantial justice, must always be eschewed. (Emphasis supplied)

Anent the locus standi requirement, this Court has already uniformly ruled
in Kilosbayan v.
Secretary,

19 Chavez v.

Guingona,
Public

18 Tatad v.

Estates

Authority

Executive

20 and Bagong

Alyansang Makabayan v. Zamora, 21 just to name a few, that absence of

direct injury on the part of the party seeking judicial review may be excused when
the latter is able to craft an issue of transcendental importance. In Lim v.

Executive Secretary, 22 this Court held that in cases of transcendental

importance, the cases must be settled promptly and definitely, and so, the
standing requirements may be relaxed. This liberal stance has been echoed in the
more recent decision on Chavez v. Gonzales.

23

Given the weight of the issue raised in the instant petition, the foregoing
principles must apply. The beaten path must be taken. We go directly to the
determination of whether or not a population of 250,000 is an indispensable
constitutional requirement for the creation of a new legislative district in a
province.
We deny the petition.

We start with the basics. Any law duly enacted by Congress carries with it the
presumption of constitutionality. 24 Before a law may be declared
unconstitutional by this Court, there must be a clear showing that a specific
provision of the fundamental law has been violated or transgressed. When there is
neither a violation of a specific provision of the Constitution nor any proof showing
that there is such a violation, the presumption of constitutionality will prevail and
the law must be upheld. To doubt is to sustain.

25

There is no specific provision in the Constitution that fixes a 250,000 minimum

population that must compose a legislative district.
TaCDIc

As already mentioned, the petitioners rely on the second sentence of Section 5

(3), Article VI of the 1987 Constitution, coupled with what they perceive to be the
intent of the framers of the Constitution to adopt a minimum population of
250,000 for each legislative district.
The second sentence of Section 5 (3), Article VI of the Constitution, succinctly
provides: "Each city with a population of at least two hundred fifty thousand, or
each province, shall have at least one representative."
The provision draws a plain and clear distinction between the entitlement of a city
to a district on one hand, and the entitlement of a province to a district on the
other. For while a province is entitled to at least a representative, with nothing
mentioned about population, a city must first meet a population minimum of
250,000 in order to be similarly entitled.
The use by the subject provision of a comma to separate the phrase "each city
with a population of at least two hundred fifty thousand" from the phrase "or each
province" point to no other conclusion than that the 250,000 minimum population
is only required for a city, but not for a province.

26

Plainly read, Section 5 (3) of the Constitution requires a 250,000 minimum

population only for a city to be entitled to a representative, but not so
for a province.
The 250,000 minimum population requirement for legislative districts in cities
was, in turn, the subject of interpretation by this Court in Mariano,
Jr. v. COMELEC.

27

In Mariano, the issue presented was the constitutionality of Republic Act No.
7854, which was the law that converted the Municipality of Makati into a Highly
Urbanized City. As it happened, Republic Act No. 7854 created an additional
legislative district for Makati, which at that time was a lone district. The
petitioners in that case argued that the creation of an additional district would
violate Section 5 (3), Article VI of the Constitution, because the resulting districts

would be supported by a population of less than 250,000, considering that Makati

had a total population of only 450,000. The Supreme Court sustained the
constitutionality of the law and the validity of the newly created district,
explaining the operation of the Constitutional phrase "each city with a population
of at least two hundred fifty thousand," to wit:
DTEScI

Petitioners cannot insist that the addition of another legislative district in

Makati is not in accord with section 5(3), Article VI of the Constitution for as
of the latest survey (1990 census), the population of Makati stands at only
four hundred fifty thousand (450,000). Said section provides, inter alia, that
a city with a population of at least two hundred fifty thousand(250,000)
shall have at least one representative. Even granting that the
population of Makati as of the 1990 census stood at four hundred
fifty thousand (450,000), its legislative district may still be
increased since it has met the minimum population requirement of
two hundred fifty thousand (250,000). In fact, Section 3 of the
Ordinance appended to the Constitution provides that a city whose
population has increased to more than two hundred fifty thousand
(250,000) shall be entitled to at least one congressional
representative.

28 (Emphasis supplied)

The Mariano case limited the application of the 250,000 minimum population
requirement for cities only to its initiallegislative district. In other words, while
Section 5 (3), Article VI of the Constitution requires a city to have a minimum
population of 250,000 to be entitled to a representative, it does not have to
increase its population by another 250,000 to be entitled to an additional district.
There is no reason why the Mariano case, which involves the creation of
an additional district within a city, should not be applied to additional districts in
provinces. Indeed, if an additional legislative district created within a city is not
required to represent a population of at least 250,000 in order to be valid, neither
should such be needed for an additional district in a province, considering
moreover that a province is entitled to an initial seat by the mere fact of its
creation and regardless of its population.
Apropos for discussion is the provision of the Local Government Code on the
creation of a province which, by virtue of and upon creation, is entitled to at least
a legislative district. Thus, Section 461 of the Local Government Code states:
Requisites for Creation. (a) A province may be created if it has an
average annual income, as certified by the Department of Finance, of not
less than Twenty million pesos (P20,000,000.00) based on 1991 constant
prices and either of the following requisites:
(i) a contiguous territory of at least two thousand (2,000) square
kilometers, as certified by the Lands Management Bureau; or
DTAcIa

(ii) a population of not less than two hundred fifty thousand (250,000)
inhabitants as certified by the National Statistics Office.

Notably, the requirement of population is not an indispensable requirement, but is

merely an alternative addition to the indispensable income requirement.
Mariano, it would turn out, is but a reflection of the pertinent ideas that ran
through the deliberations on the words and meaning of Section 5 of Article VI.
The whats, whys, and wherefores of the population requirement of "at least two
hundred fifty thousand" may be gleaned from the records of the
Constitutional Commission which, upon framing the provisions of Section 5 of
Article VI, proceeded to form an ordinance that would be appended to the final
document. The Ordinance is captioned "APPORTIONING THE SEATS OF THE HOUSE
OF REPRESENTATIVES OF THE CONGRESS OF THE PHILIPPINES TO THE DIFFERENT
LEGISLATIVE DISTRICTS IN PROVINCES AND CITIES AND THE METROPOLITAN
MANILA AREA." Such records would show that the 250,000 population benchmark
was
used
for
the
1986
nationwide apportionment of
legislative
districts among provinces, cities and Metropolitan Manila. Simply put, the
population figure was used to determine how many districts a province, city, or
Metropolitan Manila should have. Simply discernible too is the fact that, for the
purpose, population had to be the determinant. Even then, the requirement of
250,000 inhabitants was not taken as an absolute minimum for one legislative
district. And, closer to the point herein at issue, in the determination of the
precise district within the province to which, through the use of the population
benchmark, so many districts have been apportioned, population as a factor
was not the sole, though it was among, several determinants.
From its journal, 29 we can see that the Constitutional Commission originally
divided the entire country into two hundred (200) districts, which corresponded to
the original number of district representatives. The 200 seats were distributed by
the Constitutional Commission in this manner: first, one (1) seat each was given
to the seventy-three (73) provinces and the ten (10) cities with a population of at
least 250,000; 30 second, the remaining seats were then redistributed among
the provinces, cities and the Metropolitan Area "in accordance with the number of
their
inhabitants on the
basis
of
a
uniform
and
progressive
ratio."

31 Commissioner

Davide, who later became a Member and then Chief

Justice of the Court, explained this in his sponsorship remark

Ordinance to be appended to the 1987 Constitution:

32 for

Commissioner Davide: The ordinance fixes at 200 the number of

legislative seats which are, in turn, apportioned among provinces and cities
with a population of at least 250,000 and the Metropolitan Area in
accordance with the number of their respective inhabitants on the basis of
a uniform and progressive ratio. The population is based on the 1986
projection, with the 1980 official enumeration as the point of reckoning.

the

This projection indicates that our population is more or less 56

million. Taking into account the mandate that each city with at least
250,000 inhabitants and each province shall have at least one
representative, we first allotted one seat for each of the 73
provinces, and each one for all cities with a population of at least
250,000, which are the Cities of Manila, Quezon, Pasay, Caloocan,
Cebu, Iloilo, Bacolod, Cagayan de Oro, Davao and Zamboanga.
Thereafter, we then proceed[ed] to increase whenever appropriate
the number of seats for the provinces and cities in accordance with
the number of their inhabitants on the basis of a uniform and
progressive ratio. (Emphasis supplied).
cEAIHa

Thus was the number of seats computed for each province and city. Differentiated
from this, the determination of the districts within the province had to consider
"all protests and complaints formally received" which, the records show, dealt
with determinants other than population as already mentioned.
Palawan
is
a
case
in
point.
Constitutional Commission narrates:

Journal

No.

107

of

INTERPELLATION OF MR. NOLLEDO:

Mr. Nolledo inquired on the reason for including Puerto Princesa in the
northern towns when it was more affinity with the southern town of
Aborlan, Batarasa, Brooke's Point, Narra, Quezon and Marcos. He stated
that the First District has a greater area than the Second District. He then
queried whether population was the only factor considered by the
Committee in redistricting.
Replying thereto, Mr. Davide explained that the Committee took into
account the standards set in Section 5 of the Articleon the Legislative
Department, namely: 1) the legislative seats should be apportioned among
the provinces and cities and the Metropolitan Manila area in accordance
with their inhabitants on the basis of a uniform and progressive ratio; and
2) the legislative district must be compact, adjacent and contiguous.
Mr. Nolledo pointed out that the last factor was not met when Puerto
Princesa was included with the northern towns. He then inquired what is
the distance between Puerto Princesa from San Vicente.
xxx xxx xxx
Thereupon, Mr. Nolledo stated that Puerto Princesa has a population of
75,480 and based on the apportionment, its inclusion with the northern
towns would result in a combined population of 265,000 as against only
186,000 for the south. He added that Cuyo and Coron are very important
towns in the northern part of Palawan and, in fact, Cuyo was the capital of
Palawan before its transfer to Puerto Princesa. He also pointed out that
there are more potential candidates in the north and therefore if Puerto
Princesa City and the towns of Cuyo and Coron are lumped together, there

the

would be less candidates in the south, most of whose inhabitants are not
interested in politics. He then suggested that Puerto Princesa be included in
the south or the Second District.
Mr. Davide stated that the proposal would be considered during the period
of amendments. He requested that theCOMELEC staff study said
proposal.

33

"PROPOSED AMENDMENT OF MR. NOLLEDO

On the districting of Palawan, Mr. Nolledo pointed out that it was explained
in the interpellations that District I has a total population of 265,358
including the City of Puerto Princesa, while the Second District has a total
population of 186,733. He proposed, however, that Puerto Princesa be
included in the Second District in order to satisfy the contiguity requirement
in the Constitution considering that said City is nearer the southern towns
comprising the Second District.
DEIHAa

In reply to Mr. Monsod's query, Mr. Nolledo explained that with the proposed
transfer of Puerto Princesa City to the Second District, the First District
would only have a total population of 190,000 while the Second District
would have 262,213, and there would be no substantial changes.
Mr. Davide accepted Mr. Nolledo's proposal to insert Puerto Princesa City
before the Municipality of Aborlan.
There being no objection on the part of the Members the same was
approved by the Body.
APPROVAL OF THE APPORTIONMENT AND DISTRICTING OF PALAWAN
There being no other amendment, on motion of Mr. Davide, there being no
objection, the apportionment and districting for the province of Palawan
was approved by the Body.

34

The districting of Palawan disregarded the 250,000 population figure. It was

decided by the importance of the towns and the city that eventually composed
the districts.
Benguet and Baguio are another reference point. The Journal further narrates:
At this juncture, Mr. Davide informed the Body that Mr. Regalado made a
reservation with the Committee for the possible reopening of the approval
of Region I with respect to Benguet and Baguio City.
REMARKS OF MR. REGALADO

Mr. Regalado stated that in the formulation of the Committee, Baguio City
and Tuba are placed in one district. He stated that he was toying with the
idea that, perhaps as a special consideration for Baguio because it is the
summer capital of the Philippines, Tuba could be divorced from Baguio City
so that it could, by itself, have its own constituency and Tuba could be
transferred to the Second District together with Itogon. Mr. Davide,
however, pointed out that the population of Baguio City is only 141,149.
Mr. Regalado admitted that the regular population of Baguio may be lower
during certain times of the year, but the transient population would
increase the population substantially and, therefore, for purposes of
business and professional transactions, it is beyond question that
population-wise, Baguio would more than qualify, not to speak of the official
business matters, transactions and offices that are also there.
cSTCDA

Mr. Davide adverted to Director de Lima's statement that unless Tuba and
Baguio City are united, Tuba will be isolated from the rest of Benguet as the
place can only be reached by passing through Baguio City. He stated that
the Committee would submit the matter to the Body.
Upon inquiry of the Chair whether he is insisting on his amendment, Mr.
Regalado stated that the Body should have a sayon the matter and that the
considerations he had given are not on the demographic aspects but on the
fact that Baguio City is the summer capital, the venue and situs of many
government offices and functions.
On motion of Mr. Davide, there being no objection, the Body approved the
reconsideration of the earlier approval of the apportionment and districting
of Region I, particularly Benguet.
Thereafter, on motion of Mr. Davide, there being no objection, the
amendment of Mr. Regalado was put to a vote. With 14 Members voting in
favor and none against, the amendment was approved by the Body.
Mr. Davide informed that in view of the approval of the amendment,
Benguet with Baguio City will have two seats. The First District shall
comprise of the municipalities of Mankayan, Buguias, Bakun, Kabayan,
Kibungan, Bokod, Atok, Kapangan, Tublay, La Trinidad, Sablan, Itogon and
Tuba. The Second District shall comprise of Baguio City alone.
There being no objection, the Body approved the apportionment and
districting of Region I.

35

Quite emphatically, population was explicitly removed as a factor.

It may be additionally mentioned that the province of Cavite was divided into
districts based on the distribution of its three cities, with each district having a
city: one district "supposed to be a fishing area; another a vegetable and fruit
area; and the third, a rice growing area," because such consideration "fosters

common interests in line with the standard of compactness." 36 In the districting

of Maguindanao, among the matters discussed were "political stability and
common interest among the people in the area" and the possibility of "chaos and
disunity" considering the "accepted regional, political, traditional and sectoral
leaders." 37 For Laguna, it was mentioned that municipalities in the highland
should not be grouped with the towns in the lowland. For Cebu, Commissioner
Maambong proposed that they should "balance the area and population."
Consistent

with Mariano and

with

the

framer

apportionment, we stated in Bagabuyo v. COMELEC

38

deliberations on district

39that:

TcSHaD

. . . Undeniably, these figures show a disparity in the population sizes of the

districts. The Constitution, however, does not require mathematical
exactitude or rigid equality as a standard in gauging equality of
representation. . . . . To ensure quality representation through
commonality of interests and ease of access by the representative to the
constituents, all that the Constitution requires is that every legislative
district should comprise, as far as practicable, contiguous, compact and
adjacent territory. (Emphasis supplied).

This 2008 pronouncement is fresh reasoning against the uncompromising stand of

petitioner that an additional provincial legislative district, which does not have at
least a 250,000 population is not allowed by the Constitution.
The foregoing reading and review lead to a clear lesson.
Neither in the text nor in the essence of Section 5, Article VI of the
Constitution can, the petition find support. And the formulation of the Ordinance
in the implementation of the provision, nay, even the Ordinance itself, refutes the
contention that a population of 250,000 is a constitutional sine qua non for the
formation of an additional legislative district in a province, whose population
growth has increased beyond the 1986 numbers.
Translated in the terms of the present case:
1. The Province of Camarines Sur, with an estimated population of
1,693,821 in 2007 is based on the formula and constant number of
250,000 used by the Constitutional Commission in nationally
apportioning legislative districts among provinces and cities
entitled to two (2) districts in addition to the four (4) that it was given
in the 1986 apportionment. Significantly, petitioner Aquino concedes
this point. 40 In other words, Section 5 of Article VI as clearly
written allows and does not prohibit an additional district for the
Province of Camarines Sur, such as that provided for in Republic Act
No. 9786;

2. Based on the
pith
and
pitch
of
the
exchanges on the
Ordinance on the protests and complaints against strict conformity
with the population standard, and more importantly based on the
final
districting
in
the
Ordinance on considerations other
than population, the reapportionment or the recomposition of the first
and second legislative districts in the Province of Camarines Sur that
resulted in the creation of a new legislative district is valid even if the
population of the new district is 176,383 and not 250,000 as insisted
upon by the petitioners.
EcIaTA

3. The factors mentioned during the deliberations on House Bill No.

4264, were:
(a) the dialects spoken in the grouped municipalities;
(b) the size of the original groupings compared to that of the
regrouped municipalities;
(c) the natural division separating the municipality subject of
the discussion from the reconfigured District One; and
(d) the balancing of the areas of the three districts resulting
from the redistricting of Districts One and Two.

41

Each of such factors and in relation to the others considered together, with the
increased population of the erstwhile Districts One and Two, point to the utter
absence of abuse of discretion, much less grave abuse of discretion,
would warrant the invalidation of Republic Act No. 9716.

42 that

To be clear about our judgment, we do not say that in the reapportionment of the
first and second legislative districts of Camarines Sur, the number of inhabitants
in the resulting additional district should not be considered. Our ruling is that
population is not the only factor but is just one of several other factors in the
composition of the additional district. Such settlement is in accord with both the
text of the Constitution and the spirit of the letter, so very clearly given form in
the Constitutional debates on the exact issue presented by this petition.
WHEREFORE, the petition is hereby DISMISSED. Republic Act No. 9716 entitled
"An Act Reapportioning the Composition of the First (1st) and Second (2nd)
Legislative Districts in the Province of Camarines Sur and Thereby Creating a New
Legislative District From Such Reapportionment" is a VALID LAW.
SO ORDERED.
Corona, Velasco, Jr., Nachura, Leonardo-de Castro, Peralta, Bersamin, Del
Castillo and Mendoza, JJ., concur.

Puno, C.J., I join the dissenting opinion of J. Carpio.

Carpio, J., see dissenting opinion.
Carpio Morales, J., please see concurring and dissenting opinion.
Brion, J., I join opinion of J. CC Morales.
Abad, J., is on official leave.
Villarama, Jr., J., I join Justice Morales' concurring and dissenting opinion.

Separate Opinions
CARPIO, J., dissenting:
I dissent. The majority opinion wreaks havoc on the bedrock principle of our
"democratic and republican State" 1 that all votes are equal. Instead, the
majority opinion introduces the Orwellian concept that some votes are more
equal than others. The majority opinion allows, for the first time under the 1987
Constitution, voters in a legislative district created by Congress to send one
representative to Congress even if the district has a population of only 176,383. In
sharp contrast, all other legislative districts created by Congress send one
representative each because they all meet the minimum population requirement
of 250,000.
aHSTID

The assailed Republic Act No. 9716 (RA 9716) is unconstitutional for being utterly
repugnant to the clear and precise "standards" prescribed in Section 5, Article VI
of the 1987 Constitution for the creation of legislative districts. Section 5 (4) 2 of
Article VI mandates that "Congress shall make a reapportionment of
legislative districts based on the standards" fixed in Section 5. These
constitutional standards, as far as population is concerned, are: (1) proportional
representation; (2) minimum population of 250,000 per legislative
district; (3) progressive ratio in the increase of legislative districts as
the population base increases; and (4) uniformity in apportionment of
legislative districts "in provinces, cities, and the Metropolitan Manila
area." The assailed RA 9716 grossly violates these constitutional standards.
Legislators Represent People, Not Provinces or Cities
There was never any debate 3 in the design of our government that the members
of the House of Representatives, just like the members of the
Senate, represent people not provinces, cities, or any other political

unit. 4 The only difference is that the members of the Senate represent the
people at large while the members of the House represent the people inlegislative
districts. Thus, population or the number of inhabitants in a district is

the

essential

measure

of

representation

in

the

House

of

5 Section 5 (1), Article VI of the 1987 Constitution, just like in

the previous Constitutions, 6 could not be any clearer:
Representatives.

The House of Representatives shall be composed of . . . members, . . ., who

shall be elected from legislative districtsapportioned among the provinces,
cities, and the Metropolitan Manila area in accordance with the number
of their respective inhabitants, and on the basis of a uniform and
progressive ratio . . . . (Emphasis supplied)

Evidently, the idea of the people, as individuals, electing their representatives

under the principle of "one person, one vote,"7 is the cardinal feature of any
polity, like ours, claiming to be a "democratic and republican State." 8 A
democracy in its pure state is one where the majority of the people, under the
principle of "one person, one vote," directly run the government.

9A

republic is

one which has no monarch, royalty or nobility, 10 ruled by a representative

government elected by the majority of the people under the principle of "one

person, one vote," where all citizens are equally subject to the laws. 11 A
republic is also known as a representative democracy. The democratic and
republican ideals are intertwined, and converge on the common principle
of equality equality in voting power, and equality under the law.
cCaEDA

The constitutional standard of proportional representation is rooted in equality in

voting power that each vote is worth the same as any other vote, not
more or less. Regardless of race, ethnicity, religion, sex, occupation,
poverty, wealth or literacy, voters have an equal vote. Translated in terms
of legislative redistricting, this means equal representation for equal
numbers of people 12 or equal voting weight per legislative district. In
constitutional parlance, this means representation for every legislative district "in
accordance with the number of their respective inhabitants, and on the
basis
of
a
uniform
and
progressive
ratio" 13 or proportional
representation. Thus, the principle of "one person, one vote" or equality in
voting power is inherent in proportional representation.
It was in obedience to the rule on proportional representation that this Court
unanimously struck down an apportionment law which:
(a) . . . gave Cebu seven members, while Rizal with a bigger number of
inhabitants got four only; (b) . . . gave Manila four members, while Cotabato
with a bigger population got three only; (c) [gave] Pangasinan with less
inhabitants than both Manila and Cotabato . . . more than both, five
members having been assigned to it; (d) [gave] Samar (with 871,857) four
members while Davao with 903,224 got three only; (e) [gave] Bulacan with
557,691 . . . two only, while Albay with less inhabitants (515,691) got three,

and (f) [gave] Misamis Oriental with 387,839 . . . one member only, while
Cavite with less inhabitants (379,904) got two.

14 . . .

for being repugnant to the constitutional edict under the 1935 Constitution that
the Members of the House of Representatives "shall be apportioned among
the several provinces as nearly as may be according to the number of their
respective inhabitants."

15

Section 5 (1), Article VI of the 1987 Constitution is even more precise by providing
that the Members of the House "shall be elected from legislative districts
apportioned among the provinces, cities, and the Metropolitan Manila area in
accordance with the number of their respective inhabitants, and on the basis of
a uniform and progressive ratio . . . ." The phrase "as nearly as may be
according to the number of their respective inhabitants" in the 1935
Constitution has been changed in the1987 Constitution to the more precise "in
accordance with the number of their respective inhabitants, and on the basis of
a uniform and progressive ratio . . . ." The addition of the phrase "on the basis
of a uniform and progressive ratio" was meant to stress that the
rule on proportional representation shall apply uniformly in the apportionment of
every legislative district.
The phrase "in accordance with the number of their respective
inhabitants," which precedes the phrase "provinces, cities and the
Metropolitan Manila area," means that legislative districts in provinces,
cities and the Metropolitan Manila area shall be apportioned according
to proportional representation or equal representation for equal
numbers of people. Thus, there shall be one legislative district for every given
number of people, whether inhabiting in provinces, citiesor the Metropolitan
Manila area.
The phrase "on the basis of a uniform . . . ratio" means that the ratio of one
legislative district for every given number of people shall be applied uniformly in
all apportionments, whether in provinces, cities or the Metropolitan Manila area.
Section 5 (3) of Article VI mandates that "[e]ach city with a population of at
least two hundred fifty thousand . . . shall have at least one
representative." Consequently, a population of 250,000 serves as the default
minimum population applicable to every legislative district following the
rule on uniformity in the apportionment of legislative districts, whether in
provinces, cities or in the Metropolitan Manila area.
IESTcD

The phrase "progressive ratio" means that the number of legislative districts
shall increase as the number of the population increases, whether in provinces,
cities or the Metropolitan Manila area. Thus, a province shall have one legislative
district if it has a population of 250,000, and two legislative districts if it has
500,000. This insures that proportional representation is maintained if there are
increases in the population of a province, city, or the Metropolitan Manila area.

This is what is meant by a "progressive ratio" in the apportionment of

legislative districts, a ratio that must also be uniformly applied.
Obviously, the 1987 Constitution has laid down clear and precise standards in
the
apportionment
of
legislative
districts
compared
to
the 1935
Constitution. What is inescapable is that the 1987 Constitution has
strengthened and tightened the requirement of uniformity in the
apportionment of legislative districts, whether in provinces, cities or the
Metropolitan Manila area.
To now declare, as the majority opinion holds, that apportionment
in provinces can disregard the minimum population requirement because the
Constitution speaks of a minimum population only in cities is logically flawed,
constitutionally repulsive, and fatally corrosive of the bedrock notion that this
country is a "democratic and republican State." 16 This ruling of the majority
strikes a debilitating blow at the heart of our democratic and republican system of
government.

Under the majority's ruling, Congress can create legislative districts in provinces
without regard to any minimum population. Such legislative districts can have a
population of 150,000, 100,000, 50,000 or even 100, thus throwing out of the
window the constitutional standards of proportional representation and uniformity
in the creation of legislative districts. To disregard the minimum population
requirement of 250,000 in provincial legislative districts while maintaining it in
city legislative districts is to disregard, as a necessary consequence, the
constitutional standards of proportional representation and uniformity in the
creation of legislative districts in "provinces, cities, and the Metropolitan
Manila area." This means that legislative districts in provinces can have a
minimum population of anywhere from 100 (or even less) to 250,000, while
legislative districts in cities will always have a minimum population of 250,000.
This will spell the end of our democratic and republican system of government as
we know it and as envisioned in the 1987 Constitution.
Constitutional Standards for Reapportionment:
Population and Territory
The Constitution itself provides the "standards" against which reapportionment
laws like RA 9716 will be tested, following its command that "Congress shall make
a reapportionment of legislative districts based on the standards provided in

this section," 17 referring to Section 5, Article VI. These standards

relate to first, population, and second, territory. Section 5 admits of no
other standards.
TCaEIc

On population, the standards of the 1987 Constitution have four elements. First is
the rule on proportional representation, which is the universal standard in direct
representation in legislatures. Second is the rule on a minimum population of
250,000 per legislative district, which was not present in our previous

Constitutions. Third is the rule on progressive ratio, which means that the number
of legislative districts shall increase as the number of the population increases in
accordance with the rule on proportional representation. Fourth is the
rule on uniformity, which requires that the first three rules shall apply
uniformly in all apportionments in provinces, cities and the Metropolitan
Manila area.
The
Constitution 18 and
the
Ordinance 19 appended
to
the 1987
Constitution fixes the minimum population of a legislative district at 250,000.
Although textually relating to cities, this minimum population requirement applies
equally to legislative districts apportioned in provinces and the Metropolitan
Manila area because of the constitutional command that "legislative districts
[shall be] apportioned among the provinces, cities, and the Metropolitan Manila
area in accordance with the number of their respective inhabitants, and on the
basis
of
a uniform and
progressive
ratio." To
reiterate, the
Constitutioncommands that this rule on uniformity shall apply to
legislative districts in "provinces, cities, and the Metropolitan Manila
area." Otherwise, districts apportioned in provinces, if freed from the minimum
population requirement, will have constituencies two, four, ten times lower than in
districts apportioned in cities, violating the constitutional command that
apportionment shall be based on a uniform ratio in "provinces, cities, and the
Metropolitan Manila area."
In short, the constitutional "standards" in the apportionment of
legislative districts under Section 5 of Article VI, as far as population is
concerned,
are:
(1)
proportional
representation;
(2)
a
minimum "population of at least two hundred fifty thousand" per
legislative district; (3) progressive ratio in the increase of legislative
districts as the population base increases; and (4) uniformity in the
apportionment of legislative districts in "provinces, cities, and the
Metropolitan Manila area."
For territory, the Constitution prescribes the "standards" that a legislative district
must be, "as far as practicable, contiguous, compact, and adjacent."
To repeat, other than population and territory, there are no other standards
prescribed in Section 5 of Article VI. This Court cannot add other standards not
found in Section 5.
The Malapportionment of RA 9716 Flouts
the Constitutional Standards on Population
RA 9716 grossly malapportions Camarines Sur's proposed five legislative districts
by flouting the standards of proportional representation among legislative districts
and the minimum population per legislative district.

Based on the 2007 census, the proposed First District under RA 9716 will
have a population of only 176,383, which is 29% below the constitutional
minimum population of 250,000 per legislative district. In contrast, the
remaining four proposed districts have populations way above the minimum with
the highest at 439,043 (proposed Third District), lowest at 276,777 (proposed
Second District) and an average of 379,359. Indeed, the disparity is so high that
three of the proposed districts (Third, Fourth, and Fifth Districts) have
populations more than double that of the proposed First District. 20 This
results in wide variances among the districts' populations. Still using the 2007
census, the ideal per district population for Camarines Sur is 338,764. 21 The
populations of the proposed districts swing from this ideal by a high of
positive 29.6% (Third District) to a low of negative 47.9% (First
District). 22 This means that the smallest proposed district (First
District) is underpopulated by nearly 50% of the ideal and the biggest
proposed district (Third District) isoverpopulated by nearly 30% of the
ideal.
cDICaS

The resulting vote undervaluation (for voters in the disfavored districts) and vote
overvaluation (for voters in the First District) fails even the most liberal application
of the constitutional standards. Votes in the proposed First District
are overvalued by more than 200% compared to votes from the Third, Fourth, and
Fifth Districts and by more than 60% compared to votes in the Second District.
Conversely, votes from the Third, Fourth, and Fifth Districts are undervalued by
more than 200% compared to votes in the First District while those in the Second
District suffer more than 60% undervaluation.
Proportional representation in redistricting does not mean exact numbers of
population, to the last digit, for every legislative district. However, under the
assailed RA 9716, the variances swing from negative 47.9% to positive 29.6%.
Under any redistricting yardstick, such variances are grossly anomalous and
destructive of the concept of proportional representation. In the United States, the
Supreme Court there ruled that a variance of even less than 1% is
unconstitutional in the absence of proof of a good faith effort to achieve a
mathematically exact apportionment.

23

Significantly, petitioner Senator Aquino's attempt to redraw districting lines to

make all five proposed districts compliant with the minimum population
requirement (and thus lessen the wide variances in population among the
districts) was thwarted chiefly for political expediency: his colleagues in the
Senate deemed the existing districts in Camarines Sur "untouchable" because "[a
Congressman] is king [in his district]." 24 This shows a stark absence of a good
faith effort to achieve a more precise proportional representation in the
redistricting under the assailed RA 9716. Clearly, RA 9716 tinkers with vote
valuation, and consequently with the constitutional standard of proportional

representation, based solely on the whims of incumbent Congressmen, an invalid

standard for redistricting under Section 5 of Article VI.
Equally important, RA 9716 violates the minimum population requirement of
250,000 in creating the proposed First District,which will have a population of
only 176,383. The minimum population of 250,000 per legislative district admits
of no variance and must be complied with to the last digit. The
Constitution mandates a population of "at least two hundred fifty thousand" for a
legislative district in a city, and under the principle of "uniform and
progressive ratio," for every legislative district in provinces and in the
Metropolitan Manila area.
Entitlement of "Each Province" to "at Least One Representative"
No Basis to Ignore Standard of Uniform Population Ratio
The directive in Section 5 (3) of Article VI that "each province, shall have at least
one representative" means only that when a province is created, a legislative

district must also be created with it. 25 Can this district have a population below
250,000? To answer in the affirmative is to ignore the constitutional mandate that
districts in provinces be apportioned "in accordance with the number of their
respective inhabitants, and on the basis of a uniform and progressive ratio."
That the Constitutionnever meant to exclude provinces from the requirement of
proportional representation is evident in the opening provision of Section 5 (1),
which states:
CDHacE

The House of Representatives shall be composed of . . . members, . . ., who

shall be elected from legislative districts apportioned among
the provinces, cities, and the Metropolitan Manila area in accordance
with the number of their respective inhabitants, and on the basis of
a uniform and progressive ratio . . . ." (Boldfacing and underscoring
supplied)

In short, the Constitution clearly mandates that the creation of legislative

districts in provinces, cities and the Metropolitan Manila area must comply
with proportional representation, on the basis of a uniform and
progressive ratio.

26

Apportionment in the Ordinance Appended to the 1987 Constitution

Distinct from Legislative Reapportionments
It will not do to hoist the apportionment under the Ordinance appended to the
Constitution or Mariano v. COMELEC 27 andBagabuyo v. COMELEC 28 as
normative props to shore up the hollow proposition that reapportionment in
provinces can dispense with the minimum population of 250,000 as prescribed in
Section 5 of Article VI. In the first place, the ConstitutionalCommission,
exercising constituent powers, enjoyed absolute discretion to relax the
standards it textualized in Section 5, Article VI, in the interest of creating
legislative districts en masse cognizant of legitimate concerns.

29 Only

the

people, through the instrument of ratification, possessed the greater sovereign

power to overrule the Constitutional Commission. By overwhelmingly ratifying
the 1987 Constitution, the people in the exercise of their sovereign
power sanctioned the Constitutional Commission's discretionary judgments.
In contrast, Congress enacted RA 9716 in the exercise of its legislative
powers under the 1987 Constitution and subject to the reapportionment
standards in Section 5, Article VI of the Constitution. Congress is strictly
bound by the reapportionment standards in Section 5, unlike the
Constitutional Commission which could create one-time exceptions subject to
ratification by the sovereign people. Until it enacted RA 9716, Congress never
deviated from the minimum population requirement of 250,000 in creating a
legislative district. Thus, in Republic Act No. 7854 (RA 7854) which doubled the
legislative districts in Makati City, the Court in Mariano v. COMELEC took note of
the certification by the National Statistics Office that at the time of the
enactment of RA 7854, the population of Makati City was 508,174, entitling it to
two representatives. 30 Footnote 13 in Mariano v. COMELEC states: "As per
the certificate issued by Administrator Tomas Africa of the National
Census and Statistics Office, the population of Makati as of 1994 stood
at 508,174; August 4, 1994, Senate Deliberations on House Bill No.
12240 (converting Makati into a highly urbanized city) . . . ."
Similarly, in Republic Act No. 9371 (RA 9371) which also doubled the legislative
districts in Cagayan de Oro City, the two districts created complied with the
minimum population of 250,000 (254,644 and 299,322, respectively), as
the Court noted in Bagabuyo v. COMELEC. 31 Contrary to the assertion of the
majority opinion, neither Mariano v. COMELEC norBagabuyo v. COMELEC supports
the claim that Congress can create a legislative district with a population of less
than 250,000. On the contrary, these cases confirm that every legislative district
must have a minimum population of 250,000. Only very recently, this Court
in Aldaba v. COMELEC 32 struck down a law creating a legislative district in the
City of Malolos, which has a population just short of the 250,000 minimum
requirement.
DHTCaI

RA 9716 Harbinger for Wave of Malapportionments

More than 20 years after the 1987 Constitution took effect, Congress has yet to
comply with the Constitution's mandate that "[w]ithin three years following the
return of every census, the Congress shall make a reapportionment of legislative
districts based on the standards provided in this section." 33 Instead, Congress
has contented itself with enacting piecemeal reapportionment laws for individual
areas, either for this sole purpose

34 or

ancillary to the conversion

35 or

creation 36 of a local government unit, at the behest of legislators representing

the area. As movements of district lines spell doom or salvation for entrenched
political interests, this process subjects Congress to intense pressure to keep off
certain districts.

Until RA 9716 came along, Congress was able to balance political exigency with
constitutional imperatives. RA 9716 marks a tectonic shift by tilting the balance in
favor of entrenched interests, sacrificing the Constitution and ultimately, the
ideals of representative democracy, at the altar of political expediency. If left
unchecked, laws like RA 9716 will fill the House of Representatives with two
breeds of legislators, one, representing districts two, four, ten times more
populous than other favored districts, elected by voters holding "mickey mouse
votes" and another, representing small, favored districts, elected by voters
holding "premium votes" two, four, ten times more valuable than the votes in
disfavored districts.
Our oath of office as Justices of this Court forbids us from legitimizing this
constitutionally abhorrent scheme, a scheme thatfor the first time under
the 1987 Constitution creates a new politically privileged class of legislators in
what is supposed to be a "democratic and republican State." 37 To uphold RA
9716 is to uphold the blatant violation of the constitutional standards requiring
proportional representation and a minimum population in the creation of
legislative districts. This will derail our one person, one vote representative
democracy from the tracks clearly and precisely laid down in the 1987
Constitution.
And for what end to create a special class of legislative districts represented by
a new political elite exercising more legislative power than their votes command?
Such a grant of privileged political status is the modern day equivalent of a
royalty or nobility title, which is banned under the 1987 Constitution. History will
not be kind to those who embark on a grotesquely anomalous constitutional
revision that is repulsive to our ideals of a "democratic and republican State."
The ruling of the majority today could sound the death knell for the principle of
"one person, one vote" that insures equality in voting power. All votes are equal,
and there is no vote more equal than others. This equality in voting power
is the essence of our democracy. This Court is supposed to be the last bulwark
of our democracy. Sadly, here the Court, in ruling that there are some votes more
equal than others, has failed in its primordial constitutional duty to protect the
essence of our democracy.
cHATSI

Accordingly,
I
vote
to GRANT the
petition
and
to DECLARE
UNCONSTITUTIONAL Republic Act No. 9716 for grossly violating the standards
of proportional representation and minimum population in the creation of
legislative districts as prescribed in Section 5, Article VI of the 1987 Constitution.
CARPIO MORALES, J., concurring and dissenting:
I concur with the ponencia's discussion on the procedural issue.
"Transcendental importance" doctrine aside, petitioners have the requisite locus
standi. Petitioners are suing not only as lawmakers but as taxpayers and citizens

as well. At the initiative of a taxpayer, a statute may be nullified, on the

supposition that expenditure of public funds for the purpose of administering an
unconstitutional act constitutes a misapplication of such funds. 1 Republic Act No.
9716 (R.A. 9716) mandates the creation of another legislative district and
indubitably involves the expenditure of public funds.

I DISSENT, however, on the ponencia's conclusion, on the substantive issue, that a

population of 250,000 is not an indispensable constitutional requirement for the
creation of a new legislative district in a province.
Contrary to the ponencia's assertion, petitioners do not merely rely on Article VI,
Section 5 (3) but also on Section 5 (1) of the same Article. 2 Both provisions must
be read together in light of the constitutional requirements of population and
contiguity.
Section 5 (3) of Article VI disregards the 250,000 population requirement only with
respect to existing provinces whose population does not exceed 250,000 or to
newly created provinces under the Local Government Code (as long as the income
and territory requirements are met).
The ponencia misinterprets Mariano v. Comelec. 3 The actual population of the
City of Makati during the Senate deliberations in 1994 on House Bill (H.B.) No.
4264 that was to be enacted into R.A. No. 7854 was 508,174.
Court inMariano declared:

4 That is why the

Petitioners cannot insist that the addition of another legislative district in

Makati is not in accord with Section 5(3), Article VI of the Constitution for as
of the latest survey (1990 census), the population of Makati stands at only
four hundred fifty thousand (450,000). Said section provides, inter alia,
that a city with a population of at least two hundred fifty
thousand (250,000) shall have at least one representative. Even
granting that the population of Makati as of the 1990 census stood at four
hundred fifty thousand (450,000), its legislative district may still be
increased since it has met the minimum population requirement of two
hundred fifty thousand (250,000). In fact, Section 3 of the Ordinance
appended to the Constitution provides that a city whose population
has increased to more than two hundred fifty thousand
(250,000) shall
be
entitled
to at
least
one
congressional
representative.

5 (emphasis in the original)

cIECaS

Nothing in Mariano reflects that the Court disregarded the 250,000 population
requirement as it merely stated that Makati's legislative district may still be
increased as long as the minimum population requirement is met. The permissive
declaration at that time presupposes that Makati must still meet the constitutional
requirements before it can have another congressional district.

The Local Government Code likewise is not in point since Section 461 thereof
tackles the creation of a province and not the reapportioning of a legislative
district based on increasing population. There is thus no point in asserting that
population is merely an alternative addition to the income requirement.
The ponencia likewise
misinterprets Bagabuyo v. Comelec. 6 Notably,
the ponencia spliced that portion of the decision inBagabuyo which it cited to suit
its argument. Thus the ponencia quotes:
. . . Undeniably, these figures show a disparity in the population sizes of the
districts. The Constitution, however, does not require mathematical
exactitude or rigid equality as a standard in gauging equality of
representation. . . . To ensure quality representation through commonality
of interests and ease of access by the representative to the constituents, all
that the Constitution requires is that every legislative district should
comprise, as far as practicable, contiguous, compact and adjacent territory.
(emphasis and underscoring in the original by the ponente)

It omitted that portion which specified the respective total population of the two
districts as above 250,000. Thus the full text of the pertinent portion of the
decision reads:
The petitioner, unfortunately, did not provide information about the actual
population of Cagayan de Oro City. However, we take judicial notice of the
August 2007 census of the National Statistics Office which shows
that barangays comprising Cagayan de Oro's first district have a
total
population
of 254,644 while
the
second
district
has 299,322residents. Undeniably, these figures show a disparity in the
population sizes of the districts. The Constitution, however, does not
require mathematical exactitude or rigid equality as a standard in gauging
equality of representation. . . . (emphasis and underscoring supplied)

The two legislative districts of Cagayan de Oro subject of Bagabuyo met the
minimum population requirement at the time of reappportionment.
The ponencia's construal of the disparity in population sizes of the districts
involved in Bagabuyo clearly differs from the disparity of population in the present
case.
CADSHI

The Record of the Constitutional Commission itself declares that the 250,000
benchmark was used in apportioning the legislative districts in the country. The
sponsorship speech of Commissioner Hilario Davide, Jr.

7 reflects so.

. . . . Each legislative district shall comprise, as far as practicable,

contiguous, compact and adjacent territory. EACH CITY OR EACH
PROVINCE WITH A POPULATION OF AT LEAST 250,000 SHALL HAVE
AT LEAST ONE REPRESENTATIVE. This is Section 5 of the Article on the
Legislative. . . . The ordinance fixes at 200 the number of legislative seats
which are, in turn, apportioned among the provinces and cities with a

population of at least 250,000 and the Metropolitan Manila area in

accordance with the number of their respective inhabitants on the basis of
a uniform and progressive ratio. The population is based on the 1986
projection, with the 1980 official enumeration as the point of
reckoning. This projection indicates that our population is more or
less 56 million. Taking into account the mandate that each city with at
least 250,000 inhabitants and each province shall have at least one
representative, we at first allotted one seat for each of the 73 provinces;
and one each for all cities with a population of at least 250,000, which are
the Cities of Manila, Quezon, Pasay, Caloocan, Cebu, Iloilo, Bacolod,
Cagayan de Oro, Davao and Zamboanga. Thereafter,we then proceeded
to increase whenever appropriate the number of seats for the
provinces and cities in accordance with number of their
inhabitants on the basis of a uniform and progressive ratio. . . . .
(capitalization, emphasis, italics and underscoring supplied)

The framers of the Constitution intended to apply the minimum population

requirement of 250,000 to both cities and provinces in the initial apportionment,
in proportion to the country's total population at that time (56 million).
Yet the ponencia asserts that the 250,000 benchmark was used only for the
purpose of the 1986 initial apportionment of the legislative districts, and now
disregards the benchmark's application in the present petition. It is eerily silent,
however, onwhat the present population yardstick is. If the present estimated
population of 90 million is to be the dividend, 8 then there would roughly be one
legislative district representative for every 450,000.
Following the constitutional mandate, the population requirement cannot fall
below 250,000. This is the average "uniform and progressive ratio" that should
prevail. Thus, using the present population figure, the benchmark should be
anywhere between 250,000-450,000 persons per district. Using anything less than
250,000 is illogical, for it would operate to allow more than 360 representatives of
legislative districts alone on some capricious basis other than the variable of
population.
CcTHaD

A case in point is the congressional reapportionment done in the provinces of

Sultan Kudarat and Zamboanga Sibugay effected through Republic Act No.

9357 9 and Republic Act No. 9360, 10 respectively. At the time of the
congressional deliberations and effectivity of these laws, the population count in
these provinces more than met the basic standard. Sultan Kudarat already had a
population of 522,187 during the 1995 census year, 11 while Zamboanga
Sibugay met the population threshold in 2001 with an estimated 503,700
headcount.

12

The ponencia sweepingly declares that "population was explicitly removed as a

factor."

13 Far

from it. Population remains the controlling factor. From the

discussions in the initial apportionment and districting of Puerto Princesa, Baguio,

Cavite, Laguna, Maguindanao and Cebu in 1986, it is clear that population and
contiguity were the primary considerations, and the extraneous factors
considered were circumspectly subsumed thereto.
The ponencia harps on petitioners' admission that Camarines Sur is actually
entitled to SIX legislative districts, given its population of 1,693,821, to justify its
conclusion that there is nothing wrong in the creation of another legislative
district in the province. This is a wrong premise. It bears noting that petitioners
raised the legislative entitlement to underscore the GRAVE ABUSE OF DISCRETION
committed in the enactment of R.A. 9716.
R.A. 9716 created one legislative district by reconfiguring the first and second
districts. It did not, however, touch the third and fourth districts which, when
properly reapportioned, can easily form another district. No reasons were offered
except Senator Joker Arroyo's during the Senate Plenary Debates on H.B. No.
4264, viz.: "When it comes to their district, congressmen are kings. We cannot
touch them. He [referring to Rep. Villafuerte] does not also want it [referring to
the district of Rep. Villafuerte] touched . . . even if they have a pregnant populace
or inhabitants, he does not want it touched."

14

The resulting population distribution in the present case violates

the uniform and progressive ratio prescribed in the Constitution.
Prior to the enactment of R.A. No. 9716, the tally of population percentage per
district in Camarines Sur based on its population of 1,693,821 was as follows:
District 1: 24.6%
District 2: 28.03%
District 3: 21.99%
District 4: 25.33%
Compare now the population percentage per district after the passage of R.A.
9716:
TaDCEc

District 1: 10.4%
District 2: 16.34%
District 3: 25.9%
District 4: 21.99% (former District 3)
District 5: 25.33% (former District 4)

Remarkably, before R.A. No. 9716, the first district met the 250,000 minimum.
After R.A. No. 9716, it suffered a very significant drop in its population from
416,680 to 176,157.
The extraneous factors 15 cited by the ponencia do not suffice to justify the
redistricting, particularly the inclusion of the municipality of Libmanan in the
second district. Linguistic difference is a weak basis to segregate the
municipalities in the redistricting. To sanction that as basis would see a wholesale
redistricting of the entire country, given the hundreds of dialects being spoken.
Imagine Binondo being segregated from the Tagalog-speaking district of Tondo or
Sta. Cruz in Manilaon the ground that Fookien is largely spoken in Binondo.
The former first district supposedly occupied 40% of the total land area of
Camarines Sur. But the former fourth district (which is now the fifth) comprises
the same percentage of land area, if not bigger. If land area was a factor, then the
former fourth district should have been re-districted also since it is endowed with
a big area like the former first district.
The municipality of Libmanan is supposedly isolated by a body of water from the
first district. But so is the municipality of Cabusao which is situated northeast of
Libmanan and which is bordered by the same body of water. Yet Cabusao is part
of the new first district. Considering the similar geographical location of the two
municipalities, there is no compelling reason to segregate Libmanan from the first
district and tack it to the newly created second district.
The seminal case of Reynolds v. Sims 16 had already ruled that these factors
cannot be permissively considered in legislative reapportionment.
. . . Population is, of necessity, the starting point for consideration and the
controlling
criterion
for
judgment
in
legislative
apportionment
controversies. . . . [We] hold that, as a basic constitutional standard, [equal
protection] requires that the seats in both houses of a bicameral state
legislature must be apportioned on a population basis. Simply stated, an
individual's right to vote for state legislators is unconstitutionally impaired
when its weight is in a substantial fashion diluted when compared with
votes of citizens living in other parts of the [State].
CaHcET

xxx xxx xxx

[Equal protection] requires that a State make an honest and good faith
effort to construct districts, in both houses of its legislature, as nearly of
equal population as is practicable. We realize that it is a practical
impossibility to arrange legislative districts so that each one has an
identical number of residents, citizens, or voters. Mathematical exactness
or precision is hardly a workable constitutional requirement. So long as
the divergences from a strict population principle are
constitutionally permissible, but neither history alone, nor

economic or other sorts of group interests, are permissible factors

in attempting to justify disparities from population-based
representation. Citizens, not history or economic interests, cast
votes. Considerations of area alone provide an insufficient
justification for deviations from the equal-population principle.
Again, people, not land or trees or pastures, vote. . . . (emphasis and
underscoring supplied)

Undoubtedly,

Camarines

of gerrymandering.

Sur's

malapportionment

largely

partakes

17

A final word. By pronouncing that "other factors," aside from population, should be
considered in the composition of additional districts, thereby adding other
requisites despite the Constitution's clear limitation to population and contiguity,
the ponencia effectively opens the floodgates to opportunistic lawmakers to
reconfigure their own principalia and bantam districts. Leaving open Section 5 of
Article VI to arbitrary factors, such as economic, political, socio-cultural, racial and
even religious ones, is an invitation to a free-for-all.
In light of the foregoing, I vote to GRANT the
UNCONSTITUTIONAL Republic Act No. 9716.

petition

and DECLARE

(Aquino III v. Commission on Elections, G.R. No. 189793, [April 7, 2010], 631 PHIL
595-652)
|||

139. ALDABA V COMELEC

EN BANC
[G.R. No. 188078. March 15, 2010.]
VICTORINO B. ALDABA, CARLO JOLETTE S. FAJARDO, JULIO G.
MORADA,
and
MINERVA ALDABA MORADA,petitioners, vs. COMMISSION ON EL
ECTIONS, respondent.
RESOLUTION

CARPIO, J :
p

This
resolves
the
motion
for
reconsideration
of
respondent Commission on Elections (COMELEC) of the Decision dated 25 January
2010.

The COMELEC grounds its motion on the singular reason, already considered and
rejected in the Decision, that Congress' reliance on the Certification of Alberto N.
Miranda (Miranda), Region III Director, National Statistics Office (NSO), projecting
Malolos City's population in 2010, is non-justiciable. The COMELEC also calls
attention to the other sources of Malolos City's population indicators as of 2007
(2007 Census of Population PMS 3 Progress Enumeration Report) 2 and as of
2008 (Certification of the City of Malolos' Water District, dated 31 July

3 and Certification of the Liga

2008) 4 which Congress allegedly used in
2008,

ng

Barangay,

dated

22

August

enacting Republic Act No. 9591 (RA

9591). The COMELEC extends its non-justiciability argument to these materials.
We find no reason to grant the motion.
First. It will not do for the COMELEC to insist that the reliability and
authoritativeness of the population indicators Congress used in enacting RA
9591 are non-justiciable. If laws creating legislative districts are unquestionably
within the ambit of this Court's judicial review power, 5 then there is more reason
to hold justiciable subsidiary questions impacting on their constitutionality, such
as their compliance with a specific constitutional limitation under Section 5 (3),
Article VI of the 1987 Constitution that only cities with at least 250,000
constituents are entitled to representation in Congress. To fulfill this obligation,
the Court, of necessity, must inquire into the authoritativeness and reliability of
the population indicators Congress used to comply with the constitutional
limitation. Thus, nearly five decades ago, we already rejected claims of nonjusticiability of an apportionment law alleged to violate the constitutional
requirement of proportional representation:
It is argued in the motion to reconsider, that since Republic Act
3040 improves existing conditions, this Court could perhaps, in the exercise
of judicial statesmanship, consider the question involved as purely political
and therefore non-justiciable. The overwhelming weight of authority is
that district apportionment laws are subject to review by the
courts[:]
TCDcSE

The constitutionality of a legislative apportionment act is a judicial

question, and not one which the court cannot consider on the ground
that it is a political question.
It is well settled that the passage of apportionment acts is not so
exclusively within the political power of the legislature as to preclude a

court from inquiring into their constitutionality when the question is

properly brought before it.
It may be added in this connection, that the mere impact of the suit upon
the political situation does not render it political instead of judicial.
The alleged circumstance that this statute improves the present
set-up constitutes no excuse for approving a transgression of
constitutional limitations, because the end does not justify the
means. Furthermore, there is no reason to doubt that, aware of the
existing inequality of representation, and impelled by its sense of duty,
Congress will opportunely approve remedial legislation in accord with the
precepts
omitted)

of the Constitution.

6 (Emphasis

supplied;

internal citations

To deny the Court the exercise of its judicial review power over RA 9591 is to
contend that this Court has no power "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," a duty mandated under
Section 1, Article VIII of the Constitution. Indeed, if we subscribe to the COMELEC's
theory, this Court would be reduced to rubberstamping laws creating legislative
districts no matter how unreliable and non-authoritative the population indicators
Congress used to justify their creation. There can be no surer way to render
meaningless the limitation in Section 5 (3), Article VI of the 1987 Constitution.

Second. Under Executive Order No. 135 (EO 135), the population indicators
Congress used to measure Malolos City's compliance with the constitutional
limitation are unreliable and non-authoritative. On Miranda's Certification, (that
the "projected population of the [City] of Malolos will be 254,030 by the year 2010
using the population growth rate of 3.78[%] between 1995 and 2000"), this fell
short of EO 135's requirements that (a) for intercensal years, the certification
should bebased on a set of demographic projections and estimates declared
official by the National Statistical and Coordination Board(NSCB); (b)
certifications on intercensal population estimates will be as of the middle of every
year; and (c) certifications basedon projections or estimates must be issued by
the NSO Administrator or his designated certifying officer. Further, using
Miranda's own growth rate assumption of 3.78%, Malolos City's population as of 1
August 2010 will only be 249,333, below the constitutional threshold of 250,000
(using as base Malolos City's population as of 1 August 2007 which is 223,069).
That Miranda issued his Certification "by authority of the NSO administrator" does
not make the document reliable as it neither makes Miranda the NSO
Administrator's designated certifying officer nor cures the Certification of its fatal
defects for failing to use demographic projections and estimates declared official
by the NSCB or make the projection as of the middle of 2010.
Nor are the 2007 Census of Population PMS 3 Progress Enumeration Report,
the Certification of the City of Malolos' Water District, dated 31 July 2008 and the

Certification of the Liga ng Barangay, dated 22 August 2008, reliable because

none of them qualifies as authoritative population indicator under EO 135. The
2007 Census of Population PMS 3 Progress Enumeration Report merely
contains preliminary data on the population census of Bulacan which were
subsequently adjusted to reflect actual population as indicated in the 2007
Census results (showing Malolos City's population at 223,069). The COMELEC,
through the Office of the Solicitor General (OSG), adopts Malolos City's claim that
the 2007 census for Malolos City was "sloped to make it appear that come Year
2010, the population count for Malolos would still fall short of the constitutional
requirement." 8 This
unbecoming
attack
by
the
government's
chief
counsel on the integrity of the processes of the government's census authority
has no place in our judicial system. The OSG ought to know that absent
convincing proof of so-called data "sloping," the NSO enjoys the presumption of
the regularity in the performance of its functions.
CDHaET

The Certification of the City of Malolos' Water District fares no better. EO 135
excludes from its ambit certifications from a public utility gathered incidentally in
the course of pursuing its business. To elevate the water district's so-called
population census to the level of credibility NSO certifications enjoy is to render
useless the existence of NSO. This will allow population data incidentally gathered
by electric, telephone, sewage, and other utilities to enter into legislative
processes even though these private entities are not in the business of generating
statistical data and thus lack the scientific training, experience and competence
to handle, collate and process them.
Similarly, the Certification of the Liga ng Barangay is not authoritative because
much like the Malolos City Water District, the Liga ng Barangay is not authorized
to conduct population census, much less during off-census years. The non-NSO
entities EO 135 authorizes to conduct population census are local
government units (that is, province, city, municipality or barangay) subject to the
prior approval of the NSCB and under the technical supervision of the NSO from
planning to data processing.

By presenting these alternative population indicators with their widely divergent

population figures, 10 the COMELECunwittingly highlighted the danger of
relying on non-NSO authorized certifications. EO 135's stringent standards
ensuring reliability of population census cannot be diluted as these data lie at the
core of crucial government decisions and, in this case, the legislative function of
enforcing the constitutional mandate of creating congressional districts in cities
with at least 250,000 constituents.
There can be no doubt on the applicability of EO 135 to test the constitutionality
of RA 9591. The COMELEC invoked EO 135 to convince the Court of the credibility
and authoritativeness of Miranda's certificate. 11 It is hardly alien for the Court
to adopt standards contained in a parallel statute to fill gaps in the law in the

absence of an express prohibition. 12 Indeed, one is hard-pressed to find any

distinction, statistically speaking, on the reliability of an NSO certification of a
city's population for purposes of creating its legislative district and for purposes
of converting it to a highly-urbanized or an independent component
city. 13 Congress itself confirms the wisdom and relevance of EO 135's paradigm
of privileging NSO certifications by mandating that compliance with the
population requirement in the creation and conversion of local government units

shall be proved exclusively by an NSO certification. 14 Unquestionably,

representation in Congress is no less important than the creation of local
government units in enhancing our democratic institutions, thus both processes
should be subject to the same stringent standards.
Third. Malolos City is entitled to representation in Congress only if, before the 10
May 2010 elections, it breaches the 250,000 population mark following the
mandate in Section 3 of the Ordinance appended to the 1987 Constitution that
"any city whose population may hereafter increase to more than two hundred fifty
thousand shall be entitled in the immediately following election to at least one
Member." COMELEC neither alleged nor proved that Malolos City is in compliance
with Section 3 of the Ordinance.
IDaEHC

Fourth. Aside from failing to comply with Section 5 (3), Article VI of the
Constitution on the population requirement, the creation by RA 9591 of a
legislative district for Malolos City, carving the city from the former First
Legislative District, leaves the town of Bulacan isolated from the rest of
the geographic mass of that district. 15 This contravenes the requirement in
Section 5 (3), Article VI that each legislative district shall "comprise, as far as
practicable, contiguous, compact, and adjacent territory." It is no
argument to say, as the OSG does, that it was impracticable for Congress to
create a district with contiguous, compact, and adjacent territory because Malolos
city lies at the center of the First Legislative District. The geographic lay-out of the
First Legislative District is not an insuperable condition making compliance with
Section 5 (3) impracticable. To adhere to the constitutional mandate, and thus
maintain fidelity to its purpose of ensuring efficient representation, the practicable
alternative for Congress was to include the municipality of Bulacan in Malolos
City's legislative district. Although unorthodox, the resulting contiguous and
compact district fulfills the constitutional requirements of geographic
unity and population floor, ensuring efficient representation of the minimum mass
of constituents.

WHEREFORE,
the
Supplemental
Motion
for
Reconsideration
of
respondent Commission on Elections dated 22 February 2010 is DENIED WITH
FINALITY. Let no further pleadings be allowed.
SO ORDERED.

(Aldaba v. Commission on Elections, G.R. No. 188078, [March 15, 2010], 629
PHIL 537-546)
|||

140. VETERANS FEDERATION PARTY V COMELEC

EN BANC
[G.R. No. 136781. October 6, 2000.]
VETERANS FEDERATION PARTY, ALYANSANG BAYANIHAN NG
MGA
MAGSASAKA,
MANGGAGAWANG
BUKID
AT
MANGINGISDA, ADHIKAIN AT KILUSAN NG ORDINARYONG TAO
PARA SA LUPA, PABAHAY AT KAUNLARAN, and LUZON
FARMERS PARTY, petitioners, vs. COMMISSION ON ELECTIONS,
PAG-ASA, SENIOR CITIZENS, AKAP AKSYON, PINATUBO, NUPA,
PRP, AMIN, PAG-ASA, MAHARLIKA, OCW-UNIFIL, PCCI, AMMAKATIPUNAN, KAMPIL, BANTAY-BAYAN, AFW, ANG LAKAS OCW,
WOMEN-POWER INC., FEJODAP, CUP,VETERANS CARE, 4L,
AWATU, PMP, ATUCP, NCWP, ALU, BIGAS, COPRA, GREEN,
ANAKBAYAN, ARBA, MINFA, AYOS, ALL COOP, PDP-LABAN,
KATIPUNAN, ONEWAY PRINT, AABANTE KA PILIPINAS All
BeingParty-List Parties/Organizations and Hon MANUEL B.
VILLAR, JR., in his Capacity as Speaker of the House of
Representatives, respondents.
[G.R. No. 136786. October 6, 2000.]
AKBAYAN! (CITIZENS' ACTION PARTY), ADHIKAIN AT KILUSAN
NG ORDINARYONG TAO PARA SA LUPA, PABAHAY AT
KAUNLARAN (AKO), and ASSOCIATION OF PHILIPPINE
ELECTRIC
COOPERATIVES
(APEC),petitioners, vs. COMMISSION ON ELECTIONS (COMELEC),
HOUSE OF REPRESENTATIVES represented by Speaker Manuel
B. Villar, PAG-ASA, SENIOR CITIZENS, AKAP, AKSYON,
PINATUBO, NUPA, PRP, AMIN, MAHARLIKA, OCW, UNIFIL, PCCI,
AMMA-KATIPUNAN, KAMPIL, BANTAY-BAYAN, AFW, ANG LAKAS
OCW, WOMENPOWER INC., FEJODAP, CUP, VETERANS CARE,
FOUR "L", AWATU, PMP, ATUCP, NCWP, ALU, BIGAS, COPRA,
GREEN, ANAK-BAYAN, ARBA, MINFA, AYOS, ALL COOP, PDP-

LABAN,
KATIPUNAN,
PILIPINAS, respondents.

ONEWAY

PRINT,

AABANTE

KA

[G.R. No. 136795. October 6, 2000.]

ALAGAD (PARTIDO NG MARALITANG-LUNGSOD), NATIONAL
CONFEDERATION
OF
SMALL
(COCONUT
FARMERS'
ORGANIZATIONS
(NCSFCO),
and
LUZON
FARMERS' PARTY (BUTIL), petitioners, vs. COMMISSIONON ELEC
TIONS, SENIOR CITIZENS, AKAP, AKSYON, PINATUBO, NUPA,
PRP, AMIN, PAG-ASA, MAHARLIKA, OCW, UNIFIL, PCCI, AMMAKATIPUNAN, KAMPIL, BANTAY-BAYAN, AFW, ANG LAKAS OCW,
WOMENPOWER INC., FEJODAP, CUP, VETERANS CARE, 4L,
AWATU, PMP, ATUCP, NCWP, ALU, BIGAS, COPRA, GREEN,
ANAK-BAYAN, ARBA, MINFA, AYOS, ALL COOP, PDP-LABAN,
KATIPUNAN,
ONEWAY
PRINT,
and
AABANTE
KA
PILIPINAS, respondents.
Romeo G. Roxas for petitioners in G.R. No. 136781.
Gregorio A. Andolana for petitioner A.K.O.
The Solicitor General for public respondent.
Ceferino Padua Law Office for Intervenor-Movant ABB-OFW.
Romero Valdecantos Arreza & Magtanong Law Offices for Chamber of Commerce
and Industry.
Ruth R. Aldaba for Intervenor in G.R. No. 136786.
R.A.V. Saguisag for petitioner in G.R. No. 136795.
Arturo M. Tolentino and Ricardo Blancaflor for Kabataan ng Masang Pilipino,
National Urban Poor Assembly, Bantay Bayan Foundation Party, People's
Progressive Alliance for Peace and Good Government Towards Alleviation of
Poverty and Social Advancement.
SYNOPSIS
Petitions for certiorari were filed assailing two (2) Comelec Resolutions ordering
the proclamation of thirty-eight (38) additional party-list representatives "to
complete the full complement of 52 seats in the House of Representatives as
provided under Section 5, Article VI of the 1987 Constitution and R.A. 7941."

Comelec, together with the respondent parties, averred that the twenty percent
allocation for party-list representatives in the House under the Constitution was
mandatory and that the two percent vote requirement in RA 7941 was
unconstitutional, because its strict application would make it mathematically
impossible to fill up the house party-list complement.
The Supreme Court held that the COMELEC gravely abused its discretion in
granting additional seats which violated the two percent threshold and
proportional representation requirements of RA 7941.
The Supreme Court held that Section 5 (2), Art. VI of the Constitution stating that
"[t]he party-list representatives shall constitute twenty per centum of the total
number of representatives including those under the party-list" is not mandatory;
that this percentage is a ceiling the mechanics by which it is to be filled up has
been left to Congress; that in the exercise of its prerogative, Congress enacted RA
7941 by which it prescribed that a party, organization or coalition participating in
the party-list election must obtain at least two percent of the total votes cast for
the system to qualify for a seat in the House of Representatives but that no
winning party, organization or coalition can have more than three seats therein;
that Congress has the prerogative to determine whether to adjust or change this
percentage requirement; and that the two percent threshold is consistent with the
intent of the framers of the law and with the essence of "representation."
SYLLABUS
1. CONSTITUTIONAL LAW; SECTION 5, ARTICLE VI OF THE 1987 CONSTITUTION;
TWENTY PERCENT ALLOCATION IN THE HOUSE FOR PARTY-LIST LAWMAKERS IS A
MERE CEILING AND NOT MANDATORY; CASE AT BAR. The Constitution simply
states that "[t]he party-list representatives shall constitute twenty per centum of
the total number of representatives including those under the party-list." [A]
simple reading of Section 5, Article VI of the Constitution, easily conveys the
equally simple message that Congress was vested with the broad power to define
and prescribe the mechanics of the party-list system of representation. The
Constitution explicitly sets down only the percentage of the total membership in
the House of Representatives reserved for party-list representatives. In the
exercise of its constitutional prerogative, Congress enacted RA 7941. As said
earlier, Congress declared therein a policy to promote "proportional
representation" in the election of party-list representatives in order to enable
Filipinos belonging to the marginalized and underrepresented sectors to
contribute legislation that would benefit them. It however deemed it necessary to
require parties, organizations and coalitions participating in the system to obtain
at least two percent of the total votes cast for the party-list system in order to be
entitled to a party-list seat. Those garnering more than this percentage could
have "additional seats in proportion to their total number of votes." Furthermore,
no winning party, organization or coalition can have more than three seats in the
House of Representatives. [T]he foregoing statutory requirements, show that

Section 5 (2), Article VI of the Constitution is not mandatory. It merely provides a

ceiling for party-list seats in Congress.
2. ID.; ID.; ID.; TWO PERCENT THRESHOLD IS CONSISTENT WITH THE INTENT OF
LAWMAKERS AND WITH THE ESSENCE OF "REPRESENTATION." In imposing a
two percent threshold, Congress wanted to ensure that only those parties,
organizations and coalitions having a sufficient number of constituents deserving
of representation are actually represented in Congress. This intent can be gleaned
from the deliberations on the proposed bill. . . The two percent threshold is
consistent not only with the intent of the framers of the Constitution and the law,
but with the very essence of "representation." Under a republican or
representative state, all government authority emanates from the people, but is
exercised by representatives chosen by them. But to have meaningful
representation, the elected persons must have the mandate of a sufficient
number of people. Otherwise, in a legislature that features the party-list system,
the result might be the proliferation of small groups which are incapable of
contributing significant legislation, and which might even pose a threat to the
stability of Congress. Thus, even legislative districts are apportioned according to
"the number of their respective inhabitants, and on the basis of a uniform and
progressive ratio" to ensure meaningful local representation.
3. ID.; ID.; ID.; THREE-SEAT-PER-PARTY LIMIT ENSURES ENTRY OF VARIOUS
INTEREST-REPRESENTATIONS INTO THE LEGISLATURE. An important
consideration in adopting the party-list system is to promote and encourage a
multiparty
system
of
representation
.
.
.
Consistent
with
the
Constitutional Commission's pronouncements, Congress set the seat-limit to three
(3) for each qualified party, organization or coalition. "Qualified" means having
hurdled the two percent vote threshold. Such three-seat limit ensures the entry of
various interest-representations into the legislature; thus, no single group, no
matter how large its membership, would dominate the party-list seats, if not the
entire House.
EScaIT

4. REMEDIAL LAW; CERTIORARI; GRAVE ABUSE OF DISCRETION; GRANT

BY COMELEC OF ADDITIONAL PARTY-LIST SEATS IN VIOLATION OF THE TWO
PERCENT THRESHOLD AND PROPORTIONAL REPRESENTATION REQUIREMENTS
OF RA 7941, A CASE OF; CASE AT BAR. [T]he Comelec gravely abused its
discretion in ruling that the thirty-eight (38) herein respondent parties,
organizations and coalitions are each entitled to a party-list seat, because it
glaringly violated two requirements of RA 7941: the two percent threshold and
proportional representation. In disregarding, rejecting and circumventing these
statutory provisions, the Comelec effectively arrogated unto itself what the
Constitution expressly and wholly vested in the legislature: the power and the
discretion to define the mechanics for the enforcement of the system. The wisdom
and the propriety of these impositions, absent any clear transgression of the
Constitution or grave abuse of discretion amounting to lack or excess of
jurisdiction, are beyond judicial review.

DECISION

PANGANIBAN, J

*:
Prologue

To determine the winners in a Philippine-style party-list election, the

Constitution and Republic Act (RA) No. 7941 mandate at least four inviolable
parameters. These are:
First, the twenty percent allocation the combined number of all party-list
congressmen shall not exceed twenty percent of the total membership of the
House of Representatives, including those elected under the party list.
Second, the two percent threshold only those parties garnering a minimum of
two percent of the total valid votes cast for the party-list system are "qualified" to
have a seat in the House of Representatives;

Third, the three-seat limit each qualified party, regardless of the number of
votes it actually obtained, is entitled to a maximum of three seats; that is, one
"qualifying" and two additional seats.
Fourth, proportional
representation
the
additional
seats
which
a
qualified party is entitled to shall be computed "in proportion to their total number
of votes."
Because the Comelec violated these legal parameters, the assailed Resolutions
must be struck down for having been issued in grave abuse of discretion. The poll
body is mandated to enforce and administer election-related laws. It has no power
to contravene or amend them. Neither does it have authority to decide the
wisdom, propriety or rationality of the acts of Congress.
Its bounden duty is to craft rules, regulations, methods and formulas to implement
election laws not to reject, ignore, defeat, obstruct or circumvent them.
In fine, the constitutional introduction of the party-list system a normal feature
of parliamentary democracies into our presidential form of government,
modified by unique Filipino statutory parameters, presents new paradigms and
novel questions, which demand innovative legal solutions convertible into
mathematical formulations which are, in turn, anchoredon time-tested
jurisprudence.
The Case

Before the Court are three consolidated Petitions for Certiorari (with applications
for the issuance of a temporary restraining order or writ of preliminary injunction)
under Rule 65 of the Rules of Court, assailing (1) the October 15, 1998
Resolution

1 of

the Commission on Elections (Comelec),

Second

Division,

in

Election Matter 98-065; 2 and (2) the January 7, 1999 Resolution 3of
the Comelec en banc, affirming the said disposition. The assailed Resolutions
ordered the proclamation of thirty-eight (38) additional party-list representatives
"to complete the full complement of 52 seats in the House of Representatives as
provided under Section 5, Article VI of the 1987 Constitution and R.A. 7941."
The Facts and
the Antecedents
Our 1987 Constitution introduced a novel feature into our presidential system of
government the party-list method of representation. Under this system, any
national,
regional
or
sectoral party or
organization
registered
with
the Commission onElections may participate in the election of party-list
representatives who, upon their election and proclamation, shall sit in the House
of Representatives as regular members. 4 In effect, a voter is given two (2) votes
for the House one for a district congressman and another for a party-list
representative.

Specifically, this system of representation is mandated by Section 5, Article VI

of the Constitution, which provides:
SETAcC

"Sec. 5. (1) The House of Representatives shall be composed of not more

than two hundred and fifty members, unless otherwise fixed by law, who
shall be elected from legislative districts apportioned among the provinces,
cities, and the Metropolitan Manila area in accordance with the number of
their respective inhabitants, and on the basis of a uniform and progressive
ratio, and those who, as provided by law, shall be elected by a party-list
system of registered national, regional, and sectoral parties or
organizations.
(2) The party-list representatives shall constitute twenty per centum of the
total number of representatives including those under the party-list. For
three consecutive terms after the ratification of this Constitution,one half of
the seats allocated to party-list representatives shall be filled, as provided
by law, by selection or election from the labor, peasant, urban poor,
indigenous cultural communities, women, youth, and such other sectors as
may be provided by law, except the religious sector."

Complying with its constitutional duty toprovide by law the "selection or election"
of party-list representatives, Congress enacted RA 7941 on March 3, 1995. Under
this statute's policy declaration, the State shall " promote proportional
representation in the election of representatives to the House of Representatives
through a party-list system of registered national, regional and sectoral parties or

organizations or coalitions thereof, which will enable Filipino citizens belonging to

marginalized and underrepresented sectors, organizations and parties, and who
lack well-defined political constituencies but who could contribute to the
formulation and enactment of appropriate legislation that will benefit the nation
as a whole, to become members of the House of Representatives. Towards this
end, the State shall develop and guarantee a full, free and open party system in
order to attain the broadest possible representation of party, sectoral or group
interests in the House of Representatives by enhancing their chances to compete
for and win seats in the legislature, and shall provide the simplest scheme
possible." (italics ours.)
The requirements for entitlement to a party-list seat in the House are prescribed
by this law (RA 7941) in this wise:
"Sec.
11. Number
of Party-List
Representatives.

The party-list
representatives shall constitute twenty per centum (20%) of the total
number of the members of the House of Representatives including those
under the party-list.
For purposes of the May 1998 elections the first five (5) major political
parties on the basis of party representation in the House of Representatives
at the start of the Tenth Congress of the Philippines shall not be entitled to
participate in theparty-list system.
In determining the allocation of seats for the second vote, the following
procedure shall be observed:
(a) The parties, organizations, and coalitions shall be ranked from the
highest to the lowest based on the number of votes they garnered during
the elections.
(b) The parties, organizations, and coalitions receiving at least two percent
(2%) of the total votes cast for the party-list system shall be entitled to one
seat each; Provided, That those garnering more than two percent (2%) of
the votes shall be entitled to additional seats in proportion to their total
number of votes; Provided, finally, That each party, organization, or
coalition shall be entitled to not more than three (3) seats.

Pursuant to Section 18 of RA 7941, the Comelec en banc promulgated Resolution

No. 2847, prescribing the rules and regulations governing the election of party-list
representatives through the party-list system.
Election of the Fourteen
Party-list Representatives
May 11, 1998, the first election for party-list representation was held
simultaneously with the national elections. A total of one hundred twenty-three
(123) parties, organizations and coalitions participated. On June 26, 1998,
the Comelec en bancproclaimed thirteen (13) party-list representatives from

twelve (12) parties and organizations, which had obtained at least two percent of
the total number of votes cast for the party-list system. Two of the proclaimed
representatives belonged to Petitioner APEC, which obtained 5.5 percent of the
votes. The proclaimed winners and the votes cast in their favor were as follows:

Party/Organization/ Number of Percentage of Nominees

Coalition Votes Obtained Total Votes
1. APEC 503,48 5.5% Rene M. Silos
` Melvyn D. Eballe
2. ABA 321,646 3.51% Leonardo Q. Montemayor
3. ALAGAD 312,500 3.41% Diogenes S. Osabel
4. VETERANS 304,802 3.33% Eduardo P. Pilapil
FEDERATION
5. PROMDI 255,184 2.79% Joy A.G. Young
6. AKO 239,042 2.61% Ariel A. Zartiga
7. NCSCFO 238,303 2.60% Gorgonio P. Unde
8. ABANSE! PINAY 235,548 2.57% Patricia M. Sarenas
9. AKBAYAN 232,376 2.54% Loreta Ann P. Rosales
10. BUTIL 215,643 2.36% Benjamin A. Cruz
11. SANLAKAS 194,617 2.13% Renato B. Magtubo
12. COOP-NATCCO 189,802 2.07% Cresente C. Paez

After passing upon the results of the special elections held on July 4, 18, and 25,
1998, the Comelec en banc further determined that COCOFED (Philippine Coconut
Planters' Federation, Inc.) was entitled to one party-list seat for having garnered
186,388 votes, which were equivalent to 2.04 percent of the total votes cast for
the party-list system. Thus, its first nominee, Emerito S. Calderon, was
proclaimed on September 8, 1998 as the 14th party-list representative.

On July 6, 1998, PAG-ASA (People's Progressive Alliance for Peace and Good
Government Towards Alleviation of Poverty and Social Advancement) filed with
the Comelec a "Petition to Proclaim [the] Full Number of Party-List Representatives
provided by the Constitution." It alleged that the filling up of the twenty percent
membership of party-list representatives in the House of Representatives, as
provided under the Constitution, was mandatory. It further claimed that the literal

application of the two percent vote requirement and the three-seat limit under RA
7941 would defeat this constitutional provision, for only 25 nominees would be
declared winners, short of the 52 party-list representatives who should actually sit
in the House.
Thereafter, nine other party-list organizations 8 filed their respective Motions for
Intervention, seeking the same relief as that sought by PAG-ASA on substantially
the same grounds. Likewise, PAG-ASA's Petition was joined by other party-list
organizations in a Manifestation they filed on August 28, 1998. These
organizations were COCOFED, Senior Citizens, AKAP, AKSYON, PINATUBO, NUPA,
PRP, AMIN, PCCI, AMMA-KATIPUNAN, OCW-UNIFIL, KAMPIL, MAHARLIKA, AFW,
Women Power, Inc., Ang Lakas OCW, FEJODAP, CUP, Veterans Care, Bantay Bayan,
4L, AWATU, PMP, ATUCP, ALU and BIGAS.
On October 15, 1998, the Comelec Second Division promulgated the present
assailed Resolution granting PAG-ASA's Petition. It also ordered the proclamation
of herein 38 respondents who, in addition to the 14 already sitting, would thus
total 52party-list representatives. It held that "at all times, the total number of

congressional 9 seats must be filled up by eighty (80%) percent district

representatives and twenty (20%) percent party-list representatives." In allocating
the 52 seats, it disregarded the two percent-vote requirement prescribed under
Section 11 (b) of RA 7941. Instead, it identified three "elements of theparty-list
system," which should supposedly determine "how the 52 seats should be filled
up." First, "the system was conceived to enable the marginalized sectors of the
Philippine society to be represented in the House of Representatives."Second, "the
system should represent the broadest sectors of the Philippine society." Third, "it
should encourage [the] multi-party system." (Boldface in the original.)
Considering these elements, but ignoring the two percent threshold requirement
ofRA 7941, it concluded that "the party-list groups ranked Nos. 1 to 51 . . . should
have at least one representative." It thus disposed as follows:

"WHEREFORE, by virtue of the powers vested in it by the Constitution,

the Omnibus Election Code (B.P. 881), Republic Act No. 7941 and other
election laws, the Commission (Second Division) hereby resolves to GRANT
the instant petition and motions for intervention, to include those similarly
situated.
ACCORDINGLY, the nominees from the party-list hereinbelow enumerated
based on the list of names submitted by their respective parties,
organizations and coalitions are PROCLAIMED as party-list representatives,
to wit:
1. SENIOR CITIZENS
2. AKAP

3. AKSYON
4. PINATUBO
5. NUPA
6. PRP
7. AMIN
8. PAG-ASA
9. MAHARLIKA
10. OCW-UNIFIL
11. FCL
12. AMMA-KATIPUNAN
13. KAMPIL
14. BANTAY BAYAN
15. AFW
16. ANG LAKAS OCW
17. WOMENPOWER, INC.
18. FEJODAP
19. CUP
20. VETERANS CARE
21. 4L
22. AWATU
23. PMP
24. ATUCP
25. NCWP
26. ALU
27. BIGAS

28. COPRA
29. GREEN
30. ANAKBAYAN
31. ARBA
32. MINFA
33. AYOS
34. ALL COOP
35. PDP-LABAN
36. KATIPUNAN
37. ONEWAY PRINT
38. AABANTE KA PILIPINAS
to complete the full complement of 52 seats in the House of
Representatives as provided in Section 5, Article VI of the1987
Constitution and R.A. 7941."

The foregoing disposition sums up a glaring bit of inconsistency and flipflopping. In its Resolution No. 2847 dated June 25, 1996, the Comelec en banc had
unanimously promulgated a set of "Rules and Regulations Governing the Election
of . . . PartyList Representatives Through the Party-List System." Under these
Rules and Regulations, one additional seat shall be given for every two percent of
the vote, a formula the Comelec illustrated in its Annex "A". It apparently
relied on this method when it proclaimed the 14 incumbent party-list solons (two
for APEC and one each for the 12 other qualified parties). However, for
inexplicable reasons, it abandoned said unanimous Resolution and proclaimed,
based on its three "elements," the "Group of 38" private respondents.

10

The twelve (12) parties and organizations, which had earlier been proclaimed
winners on the basis of having obtained at least two percent of the votes cast for
the party-list system, objected to the proclamation of the 38 parties and filed
separate Motions for Reconsideration. They contended that (1) under Section 11
(b) of RA 7941, only parties, organizations or coalitions garnering at least two
percent of the votes for the party-list system were entitled to seats in the House
of Representatives; and (2) additional seats, not exceeding two for each, should
be allocated to those which had garnered the two percent threshold in proportion
to the number of votes cast for the winning parties, as provided by said Section
11.

Ruling of the
Comelec En Banc
Noting that all the parties movants and oppositors alike had agreed that the
twenty percent membership of party-list representatives in the House "should be
filled up," the Comelec en banc resolved only the issue concerning the
apportionment or allocation of the remaining seats. In other words, the issue was:
Should the remaining 38 unfilled seats allocated to party-list solons be given (1) to
the thirteen qualified parties that had each garnered at least two percent of the
total votes, or (2) to the Group of 38 herein private respondents even if they
had not passed the two percent threshold?
The poll body held that to allocate the remaining seats only to those who had
hurdled the two percent vote requirement "will mean the concentration of
representation of party, sectoral or group interests in the House of
Representatives to thirteen organizations representing two political parties, three
coalitions and four sectors: urban poor, veterans, women and peasantry . . . .
Such strict application of the 2% 'threshold' does not serve the essence and
object of the Constitution and the legislature to develop and guarantee a full,
free and open party system in order to attain the broadest possible representation
of party, sectoral or group interests in the House of Representatives . . . ."
Additionally, it "will also prevent thisCommission from complying with the
constitutional and statutory decrees for party-list representatives to compose 20%
of the House of Representatives."
Thus, in its Resolution dated January 7, 1999, the Comelec en banc, by a razorthin

majority

with

three

commissioners

concurring

11 and

two

members 12 dissenting affirmed the Resolution of its Second Division. It,

however, held in abeyance the proclamation of the 51st party (AABANTE KA
PILIPINAS), "pending the resolution of petitions for correction of manifest errors.
Without expressly declaring as unconstitutional or void the two percent vote
requirement imposed by RA 7941, theCommission blithely rejected and
circumvented its application, holding that there were more important
considerations than this statutory threshold.
Consequently, several petitions for certiorari, prohibition and mandamus, with
prayers for the issuance of temporary restraining orders or writs of preliminary
injunction, were filed before this Court by the parties and organizations that had
obtained at least two per cent of the total votes cast for the party-list
system. 13 In the suits, made respondents together with the Comelec were the
38 parties, organizations and coalitions that had been declared by the poll body
as likewise entitled toparty-list seats in the House of Representatives. Collectively,
petitioners sought the proclamation of additional representatives from each of
their parties and organizations, all of which had obtained at least two percent of
the total votes cast for the party-list system.

On January 12, 1999, this Court issued a Status Quo Order directing
the Comelec "to CEASE and DESIST from constituting itself as a National Board of
Canvassers on 13 January 1999 or on any other date and proclaiming as winners
the nominees of the parties, organizations and coalitions enumerated in the
dispositive portions at its 15 October 1998 Resolution or its 7 January 1999
Resolution, until further orders from this Court."
On July 1, 1999, oral arguments were heard from the parties. Atty. Jeremias U.
Montemayor appeared for petitioners in GR No. 136781; Atty. Gregorio A.
Andolana, for petitioners in GR No. 136786; Atty. Rodante D. Marcoleta for
petitioners in GR No. 136795; Attys. Ricardo Blancaflor and Pete Quirino Quadra,
for all the private respondents; Atty. Porfirio V. Sison for Intervener NACUSIP; and
Atty. Jose P. Balbuena for Respondent Comelec. Upon invitation of the Court,
retired ComelecCommissioner Regalado E. Maambong acted as amicus curiae.
Solicitor General Ricardo P. Galvez appeared, not for any partybut also as a friend
of the Court.
Thereafter, the parties and the amici curiae were required to submit their
respective Memoranda in amplification of their verbal arguments.

14

The Issues
The Court believes, and so holds, that the main question of how to determine the
winners of the subject party-list election can be fully settled by addressing the
following issues:
aIDHET

1. Is the twenty percent allocation for party-list representatives mentioned in

Section 5 (2), Article VI of the Constitution, mandatory or is it merely a ceiling? In
other words, should the twenty percent allocation for party-list solons be filled up
completely and all the time?
2. Are the two percent threshold requirement and the three-seat limit provided in
Section 11 (b) of RA 7941 constitutional?
3. If the answer to Issue 2 is in the affirmative, how should the additional seats of
a qualified party be determined?
The Court's Ruling
The Petitions are partly meritorious. The Court agrees with petitioners that the
assailed Resolutions should be nullified, but disagrees that they should all be
granted additional seats.
First Issue: Whether the Twenty Percent
Constitutional Allocation Is Mandatory
The pertinent provision 15 of the Constitution on the composition of the House of
Representatives reads as follows:

"Sec. 5. (1) The House of Representatives shall be composed of not more

than two hundred and fifty members, unless otherwise fixed by law, who
shall be elected from legislative districts apportioned among the provinces,
cities, and the Metropolitan Manila area in accordance with the number of
their respective inhabitants, and on the basis of a uniform and progressive
ratio, and those who, as provided by law, shall be elected by a party-list
system of registered national, regional, and sectoral parties or
organizations.
(2) The party-list representatives shall constitute twenty per centum of the
total number of representatives including those under the party-list. For
three consecutive terms after the ratification of this Constitution,one half of
the seats allocated to party-list representatives shall be filled, as provided
by law, by selection or election from the labor, peasant, urban poor,
indigenous cultural communities, women, youth, and such other sectors as
may be provided by law, except the religious sector."

Determination of the Total

Number of Party-List Lawmakers
Clearly, the Constitution makes the number of district representatives the
determinant in arriving at the number of seats allocated for party-list lawmakers,
who shall comprise "twenty per centum of the total number of representatives
including those under the party-list." We thus translate this legal provision into a
mathematical formula, as follows:
No. of district representatives
x .20 = No. of party-list
.80 representatives

This formulation 16 means that any increase in the number of district

representatives, as may be provided by law, will necessarily result in a
corresponding increase in the number of party-list seats. To illustrate, considering
that there were 208 district representatives to be elected during the 1998
national elections, the number of party-list seats would be 52, computed as
follows:
208
x .20 = 52
.80

The foregoing computation of seat allocation is easy enough to comprehend. The

problematic question, however, is this: Does the Constitution require all such
allocated seats to be filled up all the time and under all circumstances? Our short
answer is "No."

Twenty Percent Allocation

a Mere Ceiling
The Constitution simply states that "[t]he party-list representatives shall
constitute twenty per centum of the total number of representatives including
those under the party-list."
According to petitioners, this percentage is a ceiling; the mechanics by which it is
to be filled up has been left to Congress. In the exercise of its prerogative, the
legislature enacted RA 7941, by which it prescribed that a party, organization or
coalition participating in the party-list election must obtain at least two percent of
the total votes cast for the system in order to qualify for a seat in the House of
Representatives.
Petitioners further argue that the constitutional provision must be construed
together with this legislative requirement. If there is no sufficient number of
participating parties, organizations or coalitions which could hurdle the two
percent vote threshold and thereby fill up the twenty percent party-list allocation
in the House, then naturally such allocation cannot be filled up completely.
The Comelec cannot be faulted for the "incompleteness," for ultimately the voters
themselves are the ones who, in the exercise of their right of suffrage, determine
who and how many should represent them.
On the other hand, Public Respondent Comelec, together with the respondent
parties, avers that the twenty percent allocation for party-list lawmakers is
mandatory, and that the two percent vote requirement in RA 7941 is
unconstitutional, because its strict application would make it mathematically
impossible to fill up the House party-list complement.
We rule that a simple reading of Section 5, Article VI of the Constitution, easily
conveys the equally simple message that Congress was vested with the broad
power to define and prescribe the mechanics of the party-list system of
representation.The Constitution explicitly sets down only the percentage of the
total membership in the House of Representatives reserved for party-list
representatives.
In the exercise of its constitutional prerogative, Congress enacted RA 7941. As
said earlier, Congress declared therein a policy to promote "proportional
representation" in the election of party-list representatives in order to enable
Filipinos belonging to the marginalized and underrepresented sectors to
contribute legislation that would benefit them. It however deemed it necessary to
require parties, organizations and coalitions participating in the system to obtain
at least two percent of the total votes cast for the party-list system in order to be
entitled to a party-list seat. Those garnering more than this percentage could
have "additional seats in proportion to their total number of votes." Furthermore,
no winning party, organization or coalition can have more than three seats in the

House of Representatives. Thus the relevant portion of Section 11(b) of the law
provides:
"(b) The parties, organizations, and coalitions receiving at least two percent
(2%) of the total votes cast for the party-list system shall be entitled to one
seat each; Provided, That those garnering more than two percent (2%) of
the votes shall be entitled to additional seats in proportion to their total
number of votes; Provided, finally, That each party, organization, or
coalition shall be entitled to not more than three (3) seats."

Considering the foregoing statutory requirements, it will be shown presently that

Section 5 (2), Article VI of the Constitution is not mandatory. It merely provides a
ceiling for party-list seats in Congress.
On the contention that a strict application of the two percent threshold may result
in a "mathematical impossibility," suffice it to say that the prerogative to
determine whether to adjust or change this percentage requirement rests in

Congress. 17 Our task now, as should have been the Comelec's, is not to find
fault in the wisdom of the law through highly unlikely scenarios of clinical
extremes, but to craft an innovative mathematical formula that can, as far as
practicable, implement it within the context of the actual election process.
Indeed, the function of the Supreme Court, as well as of all judicial and quasijudicial agencies, is to apply the law as we find it, not to reinvent or second-guess
it. Unless declared unconstitutional, ineffective, insufficient or otherwise void by
the proper tribunal, a statute remains a valid command of sovereignty that must
be respected and obeyed at all times. This is the essence of the rule of law.
Second Issue:
The Statutory Requirement
and Limitation
The Two Percent
Threshold
In imposing a two percent threshold, Congress wanted to ensure that only those
parties, organizations and coalitions having a sufficient number of constituents
deserving of representation are actually represented in Congress. This intent can
be gleaned from the deliberations on the proposed bill. We quote below a
pertinent portion of the Senate discussion:
"SENATOR GONZALES: For purposes of continuity, I would want to follow up
a point that was raised by, I think, Senator Osmea when he said that a
political party must have obtained at least a minimum percentage to be
provided in this law in order to qualify for a seat under the party-list
system.
They do that in many other countries. A party must obtain at least 2
percent of the votes cast, 5 percent or 10 percent of the votes cast.

Otherwise, as I have said, this will actually proliferate political party groups
and those who have not really been given by the people sufficient basis for
them to represent their constituents and, in turn, they will be able to get to
the Parliament through the backdoor under the name of the party-list
system, Mr. President."

18

A similar intent is clear from the statements of the bill sponsor in the house of
Representatives, as the following shows:
"MR. ESPINOSA. There is a mathematical formula which this computation is
based at, arriving at a five percent ratio which would distribute equitably
the number of seats among the different sectors. There is a mathematical
formula which is, I think, patterned after that of the party list of the other
parliaments or congresses, more particularly the Bundestag of
Germany."

19

Moreover, even the framers of our Constitution had in mind a minimum-vote

requirement, the specification of which they left to Congress to properly
determine. Constitutional Commissioner Christian S. Monsod explained:
"MR. MONSOD. . . . We are amenable to modifications in the minimum
percentage of votes. Our proposal is that anybody who has two-and-a-half
percent of the votes gets a seat. There are about 20 million who cast their
votes in the lastelections. Two-and-a-half percent would mean 500,000
votes. Anybody who has a constituency of 500,000 votes nationwide
deserves a seat in the Assembly. If we bring that down to two percent, we
are talking about 400,000 votes. The average vote per family is three. So,
here we are talking about 134,000 families. We believe that there are many
sectors who will be able to get seats in the Assembly because many of
them have memberships of over 10,000. In effect, that is the operational
implication of our proposal. What we are trying to avoid is this selection of
sectors, the reserve seat system. We believe that it is our job to open up
the system and that we should not have within that system a reserve seat.
We think that people should organize, should work hard, and should earn
their seats within that system."

20

The two percent threshold is consistent not only with the intent of the framers
of the Constitution and the law, but with the very essence of "representation."
Under a republican or representative state, all government authority emanates
from the people, but is exercised by representatives chosen by them. 21 But to
have meaningful representation, the elected persons must have the mandate of a
sufficient number of people. Otherwise, in a legislature features the party-list
system, the result might be the proliferation of small groups which are incapable
of contributing significant legislation, and which might even pose a threat to the
stability of Congress. Thus, even legislative districts are apportioned according to
"the number of their respective inhabitants, and on the basis of a uniform and
progressive ratio"

22 to ensure meaningful local representation.

All in all, we hold that the statutory provision on this two percent requirement is
precise and crystalline. When the law is clear, the function of courts is simple
application, not interpretation or circumvention.

23

The Three-Seat-PerParty Limit

An important consideration in adopting the party-list system is to promote and
encourage a multiparty system of representation. Again, we quote Commissioner
Monsod:
"MR. MONSOD. Madam President, I just want to say that we suggested or
proposed the party list system because we wanted to open up the political
system to a pluralistic society through a multiparty system. But we also
wanted to avoid the problems of mechanics and operation in the
implementation of a concept that has very serious shortcomings of
classification and of double or triple votes. We are for opening up the
system, and we would like very much for the sectors to be there. That is
why one of the ways to do that is to put a ceiling on the number of
representatives from any single party that can sit within the 50 allocated
under the party list system. This way, we will open it up and enable sectoral
groups, or maybe regional groups, to earn their seats among the
fifty. . . . ."

24

Consistent with the Constitutional Commission's pronouncements, Congress set

the seat-limit to three (3) for each qualifiedparty, organization or coalition.
"Qualified" means having hurdled the two percent vote threshold. Such three-seat
limit ensures the entry of various interest-representations into the legislature;
thus, no single group, no matter how large its membership, would dominate
the party-list seats, if not the entire House.

We shall not belabor this point, because the validity of the three-seat limit is not
seriously challenged in these consolidated cases.
Third Issue:
Method of Allocating Additional Seats
Having determined that the twenty percent seat allocation is merely a ceiling, and
having upheld the constitutionality of the two percent vote threshold and the
three-seat limit imposed under RA 7941, we now proceed to the method of
determining how many party-list seats the qualified parties, organizations and
coalitions are entitled to. The very first step there is no dispute on this is to
rank all the participating parties, organizations and coalitions (hereafter
collectively referred to as "parties") according to the votes they each obtained.
The percentage of their respective votes as against the total number of votes cast

for the party-list system is then determined. All those that garnered at least two
percent of the total votes cast have an assured or guaranteed seat in the House
of Representatives. Thereafter, "those garnering more than two percent of the
votes shall be entitled to additional seats in proportion to their total number of
votes." The problem is how to distribute additional seats "proportionally," bearing
in mind the three-seat limit further imposed by the law.
One Additional Seat
Per Two Percent Increment
One proposed formula is to allocate one additional seat for every additional
proportion of the votes obtained equivalent to the two percent vote requirement

for the first seat. 25 Translated in figures, a party that wins at least six percent of
the total votes cast still be entitled to three seats; another party that gets four
percent will be entitled to two seats; and one that gets two percent will be entitled
to one seat only. This proposal has the advantage of simplicity and ease of
comprehension. Problems arise, however, when the parties get very lop-sided
votes for example, when Party A receives 20 percent of the total votes
cast; Party B, 10 percent; and Party C, 6 percent. Under the method just
described, Party A would be entitled to 10 seats; Party B. to 5 seats and Party C,
to 3 seats. Considering the three-seat limit imposed by law, all the parties will
each uniformly have three seats only. We would then have the spectacle of
a party garnering two or more times the number of votes obtained by another, yet
getting the same number of seats as the other one with the much lesser votes. In
effect, proportional representation will be contravened and the law rendered
nugatory by this suggested solution. Hence, the Court discarded it.
TCaEAD

The Niemeyer Formula

Another suggestion that the Court considered was the Niemeyer formula, which
was developed by a German mathematician and adopted by Germany as its
method of distributing party-list seats in the Bundestag. Under this formula, the
number of additional seats to which a qualified party would be entitled is
determined by multiplying the remaining number of seats to be allocated by the
total number of votes obtained by that party and dividing the product by the total
number of votes garnered by all the qualified parties. The integer portion of the
resulting product will be the number of additional seats that the party concerned
is entitled to. Thus:
No. of remaining seats
to be allocated No. of additional
x No. of votes of = seats of party
Total no. of votes of party concerned concerned
qualified parties (Integer. decimal)

The next step is to distribute the extra seats left among the qualified parties in
the descending order of the decimal portions of the resulting products.
Based on the 1998 election results, the distribution of party-list seats under the
Niemeyer method would be as follows:
Party Number of Guaranteed Additional Extra Total
Votes Seats Seats Seats

1. APEC 503,487 1 5.73 1 7

2. ABA 321,646 1 3.66 1 5
3. ALAGAD 312,500 1 3.55 4
4. VETERANS 304,802 1 3.47 4
FEDERATION
5. PROMDI 255,184 1 2.90 1 4
6. AKO 239,042 1 2.72 1 4
7. NCSCFO 238,303 1 2.71 1 4
8. ABANSE! PINAY 235,548 1 2.68 1 4
9. AKBAYAN 232,376 1 2.64 1 4
10. BUTIL 215,643 1 2.45 3
11. SANLAKAS 194,617 1 2.21 3
12. COOP-NATCCO 189,802 1 2.16 3
13. COCOFED 186,388 1 2.12 3
Total 3,429,338 13 32 7 52

However, since Section 11 of RA 7941 sets a limit of three (3) seats for
each party, those obtaining more than the limit will have to give up their excess
seats. Under our present set of facts, the thirteen qualified parties will each be
entitled to three seats, resulting in an overall total of 39. Note that like the
previous proposal, the Niemeyer formula would violate the principle of
"proportional representation," a basic tenet of our party-list system.
The Niemeyer formula, while no doubt suitable for Germany, finds no application
in the Philippine setting, because of our three-seat limit and the non-mandatory

character of the twenty percent allocation. True, both our Congress and the
Bundestag have threshold requirements two percent for us and five for them.
There are marked differences between the two models, however. As ably pointed
out by private respondents, 26 one half of the German Parliament is filled up
by party-list members. More important, there are no seat limitations, because
German law discourages the proliferation of small parties. In contrast, RA 7941, as
already mentioned, imposes a three-seat limit to encourage the promotion of the
multiparty system. This major statutory difference makes the Niemeyer formula
completely inapplicable to the Philippines.
Just as one cannot grow Washington apples in the Philippines or Guimaras
mangoes in the Arctic because of fundamental environmental differences, neither
can the Niemeyer formula be transplanted in toto here because of essential
variances between the two party-list models.
The Legal and Logical
Formula for the Philippines
It is now obvious that the Philippine style party-list system is a unique paradigm
which demands an equally unique formula. In crafting a legally defensible and
logical
solution
to
determine
the
number
of additional seats
that
a qualified party is entitled to, we need to review the parameters of the
Filipino party-list system.
As earlier mentioned in top Prologue, they are as follows:
First, the twenty percent allocation the combined number of all party-list
congressmen shall not exceed twenty percent of the total membership of the
House of Representatives, including those elected under the party list.
Second, the two percent threshold only those parties garnering a minimum of
two percent of the total valid votes cast for the party-list system are "qualified" to
have a seat in the House of Representatives;
Third, the three-seat limit each qualified party, regardless of the number of
votes it actually obtained, is entitled to a maximum of three seats; that is, one
"qualifying" and two additional seats.
Fourth, proportional representation the additional seats which a
qualified party is entitled to shall be computed "in proportion to their total number
of votes."
The problem, as already stated, is to find a way to translate "proportional
representation" into a mathematical formula that will not contravene, circumvent
or amend the above-mentioned parameters.
After careful deliberation, we now explain such formula, step by step.

Step One. There is no dispute among the petitioners, the public and the private
respondents, as well as the members of this Court, that the initial step is to rank
all the participating parties, organizations and coalitions from the highest to the
lowest based on the number of votes they each received. Then the ratio for
each party is computed by dividing its votes by the total votes cast for all the
parties participating in the system. All parties with at least two percent of the total
votes are guaranteed one seat each. Only these parties shall be considered in the
computation of additional seats. The party receiving the highest number of votes
shall thenceforth be referred to as the "first" party.
Step Two. The next step is to determine the number of seats the first party is
entitled to, in order to be able to compute that for the other parties. Since the
distribution is based on proportional representation, the number of seats to be
allotted to the other parties cannot possibly exceed that to which the first party is
entitled by virtue of its obtaining the most number of votes.
For example, the first party received 1,000,000 votes and is determined to be
entitled to two additional seats. Another qualified party which received 500,000
votes cannot be entitled to the same number of seats, since it garnered only fifty
percent of the votes won by the first party. Depending on the proportion of its
votes relative to that of the first party whose number of seats has already been
predetermined, the second party should be given less than that to which the first
one is entitled.
The other qualified parties will always be allotted less additional seats than the
first party for two reasons: (1) the ratio between said parties and the
first party will always be less than 1:1, (2) the formula does not admit of
mathematical rounding off, because there is no such thing as a fraction of a seat.
Verily, an arbitrary rounding off could result in a violation of the twenty percent
allocation. An academic mathematical demonstration of such incipient violation is
not necessary because the present set of facts, given the number of qualified
parties and the voting percentages obtained, will definitely not end up in such
constitutional contravention.
The Court has previously ruled in Guingona Jr. v. Gonzales 27 that a fractional
membership cannot be converted into a whole membership of one when it would,
in effect, deprive another party's fractional membership. It would be a violation of
the constitutional mandate of proportional representation. We said further that
"no party can claim more than what it is entitled to . . . ."
In any case, the decision on whether to round off the fractions is better left to the
legislature. Since Congress did not provide for it in the present law, neither will
this Court. The Supreme Court does not make the law; it merely applies it to a
given set of facts.

Formula for Determining

Additional Seats for the First Party
Now, how do we determine the number of seats the first party is entitled to? The
only basis given by the law is that a partyreceiving at least two percent of the
total votes shall be entitled to one seat. Proportionally, if the first party were to
receive twice the number of votes of the second party, it should be entitled to
twice the latter's number of seats and so on. The formula, therefore, for
computing the number of seats to which the first party is entitled is as follows:
Number of votes
of first party Proportion of votes of
= first party relative to
Total votes for total votes for party-list system
party-list system

If the proportion of votes received by the first party without rounding it off is equal
to at least six percent of the total valid votes cast for all the party list groups, then
the first party shall be entitled to two additional seats or a total of three seats
overall. If the proportion of votes without a rounding off is equal to or greater than
four percent, but less than six percent, then the first party shall have one
additional or a total of two seats. And if the proportion is less than four percent,
then the first party shall not be entitled to any additional seat.
We adopted this six percent bench mark, because the first party is not always
entitled to the maximum number of additional seats. Likewise, it would prevent
the allotment of more than the total number of available seats, such as in an
extreme case wherein 18 or more parties tie for the highest rank and are thus
entitled to three seats each. In such scenario, the number of seats to which all the
parties are entitled may exceed the maximum number of party-list seats reserved
in the House of Representatives.
Applying the above formula, APEC, which received 5.5% of the total votes cast, is
entitled to one additional seat or a total of two seats.
Note that the above formula will be applicable only in determining the number of
additional seats the first party is entitled to. It cannot be used to determine the
number of additional seats of the other qualified parties. As explained earlier, the
use of the same formula for all would contravene the proportional representation
parameter. For example, a second party obtains six percent of the total number of
votes cast. According to the above formula, the said parts would be entitled to
two additional seats or a total of three seats overall. However, if the
first party received a significantly higher amount of votes say, twenty percent
to grant it the same number of seats as the second party would violate the
statutory mandate of proportional representation, since a party getting only six
percent of the votes will have an equal number of representatives as the one

obtaining twenty percent. The proper solution, therefore, is to grant the

first party a total of three seats; and theparty receiving six percent, additional
seats in proportion to those of the first party.
Formula for Additional
Seats of Other Qualified Parties
Step Three The next step is to solve for the number of additional seats that
the other qualified parties are entitled to, basedon proportional representation.
The formula is encompassed by the following complex fraction:
No. of votes of
concerned party

Total no. of votes

Additional seats for party-list system No. of additional
for concerned = x seats allocated to
party No. of votes of the first party
first party

Total no. of votes

for party list system

In simplified form, it is written as follows:

No. of votes of
Additional seats concerned party No. of additional
for concerned = x seats allocated to
party No. of votes of the first party
first party (APEC)

Thus, in the case of ABA, the additional number of seats it would be entitled to is
computed as follows:
No. of votes of

Additional seats ABA No. of additional

for concerned = x seats allocated to
party (ABA) No. of votes of the first party
first party (APEC)

Substituting actual values would result in the following equation:

Additional seats 321,646
for concerned = x 1 = .64 or 0 additional seat, since
party (ABA) 503,487 rounding off is not to be applied

Applying the above formula, we find the outcome of the 1998 party-list election to
be as follows:
Organization Votes % age of Initial No. Additional Total
Garnered Total Votes of Seats Seats

1. APEC 503,487 5.50% 1 1 2

2. ABA 321,646 3.51% 1 321,646 / 503,487 * 1 = 0.64 1
3. ALAGAD 312,500 3.41% 1 312,500 / 503,487 * 1 = 0.62 1
4. VETERANS 304,802 3.33% 1 304,802 / 503,487 * 1 = 0.61 1
FEDERATION
5. PROMDI 255,184 2.79% 1 255,184 / 503,487 * 1 = 0.51 1
6. AKO 239,042 2.61% 1 239,042 / 503,487 * 1 = 0.47 1
7. NCSCFO 238,303 2.60% 1 238,303 / 503,487 * 1 = 0.47 1
8. ABANSE! 235,548 2.57% 1 321,646 / 503,487 * 1 = 0.47 1
PINAY
9. AKBAYAN! 232,376 2.54% 1 232,376 / 503,487 * 1 = 0.46 1
10. BUTIL 215,643 2.36% 1 215,643 / 503,487 * 1 = 0.43 1
11. SANLAKAS 194,617 2.13% 1 194,617 / 503,487 * 1 = 0.39 1

12. COOPNATCCO 189,802 2.07% 1 189,802 / 503,487 * 1 = 0.38 1

13. COCOFED 186,388 2.04% 1 186,388 / 503,487 * 1 = 0.37 1

Incidentally, if the first party is not entitled to any additional seat, then the ratio of
the number of votes for the other party to that for the first one is multiplied by
zero. The end result would be zero additional seat for each of the other qualified
parties as well.
The above formula does not give an exact mathematical representation of the
number of additional seats to be awarded since, in order to be entitled to one
additional seat, an exact whole number is necessary. In fact, most of the actual
mathematical proportions are not whole numbers and are not rounded off for the
reasons explained earlier. To repeat, rounding off may result in the awarding of a
number of seats in excess of that provided by the law. Furthermore, obtaining
absolute proportional representation is restricted by the three-seat-per-party limit
to a maximum of two additional slots. An increase in the maximum number of
additional representatives a party may be entitled to would result in a more
accurate proportional representation. But the law itself has set the limit: only two
additional seats. Hence, we need to work within such extant parameter.
The net result of the foregoing formula for determining additional seats happily
coincides with the present number of incumbents; namely, two for
the first party (APEC) and one each for the twelve other qualified parties. Hence,
we affirm the legality of the incumbencies of their nominees, albeit through the
use of a different formula and methodology.
In his Dissent, Justice Mendoza criticizes our methodology for being too strict. We
say, however, that our formula merely translated the Philippine legal parameters
into a mathematical equation, no more no less. If Congress in its wisdom decides
to modify RA 7941 to make it "less strict," then the formula will also be modified
to reflect the changes willed by the lawmakers.
Epilogue
In sum, we hold that the Comelec gravely abused its discretion in ruling that the
thirty-eight (38) herein respondent parties, organizations and coalitions are each
entitled to a party-list seat, because it glaringly violated two requirements of RA
7941: the two percent threshold and proportional representation.
In disregarding, rejecting and circumventing these statutory provisions,
the Comelec effectively arrogated unto itself what the Constitution expressly and
wholly vested in the legislature: the power and the discretion to define the
mechanics for the enforcement of the system. The wisdom and the propriety of
these impositions, absent any clear transgression of the Constitution or grave

abuse of discretion amounting to lack or excess of jurisdiction, are beyond judicial

review.

28

Indeed, the Comelec and the other parties in these cases both petitioners and
respondents have failed to demonstrate that our lawmakers gravely abused
their discretion in prescribing such requirements. By grave abuse of discretion is
meant such capricious or whimsical exercise of judgment equivalent to lack or
excess of jurisdiction.

29

The Comelec, which is tasked merely to enforce and administer election-related

laws, 30 cannot simply disregard an act of Congress exercised within the bounds
of its authority. As a mere implementing body, it cannot judge the wisdom,
propriety or rationality of such act. Its recourse is to draft an amendment to the
law and lobby for its approval and enactment by the legislature.
TIAEac

Furthermore, a reading of the entire Constitution reveals no violation of any of its

provisions by the strict enforcement of RA 7941. It is basic that to strike down a
law or any of its provisions as unconstitutional, there must be a clear and
unequivocal showing that what the Constitution prohibits, the statute
permits.

31

Neither can we grant petitioners' prayer that they each be given additional seats
(for a total of three each), because granting such plea would plainly and simply
violate the "proportional representation" mandated by Section 11 (b) of RA 7941.
The low turnout of the party-list votes during the 1998 elections should not be
interpreted as a total failure of the law in fulfilling the object of this new system of
representation. It should not be deemed a conclusive indication that the
requirements imposed by RA 7941 wholly defeated the implementation of the
system. Be it remembered that the party-list system, though already popular in
parliamentary democracies, is still quite new in our presidential system. We
should allow it some time to take root in the consciousness of our people and in
the heart of our tripartite form of republicanism. Indeed, the Comelec and the
defeated litigants should not despair.
Quite the contrary, the dismal result of the first election for party-list
representatives should serve as a challenge to our sectoral parties and
organizations. It should stir them to be more active and vigilant in their campaign
for representation in the State's lawmaking body. It should also serve as a clarion
call for innovation and creativity in adopting this novel system of popular
democracy.

With adequate information dissemination to the public and more active sectoral
parties, we are confident our people will be more responsive to future partylist elections. Armed with patience, perseverance and perspicacity, our
marginalized sectors, in time, will fulfill the Filipino dream of full representation in
Congress under the aegis of the party-list system, Philippine style.
WHEREFORE, the Petitions are hereby partially GRANTED. The assailed
Resolutions of the Comelec are SET ASIDE and NULLIFIED. The proclamations of
the fourteen (14) sitting party-list representatives two for APEC and one each
for the remaining twelve (12) qualified parties are AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
(Veterans Federation Party v. Commission on Elections, G.R. No. 136781,
136786, 136795, [October 6, 2000], 396 PHIL 419-486)
|||

141.Ang Bagong Bayani-OFW Labor Party v COMELEC

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 147589

June 26, 2001

ANG BAGONG BAYANI-OFW LABOR PARTY (under the acronym OFW), represented
herein by its secretary-general, MOHAMMAD OMAR FAJARDO, petitioner,
vs.
ANG BAGONG BAYANI-OFW LABOR PARTY GO! GO! PHILIPPINES; THE TRUE
MARCOS LOYALIST ASSOCIATION OF THE PHILIPPINES; PHILIPPINE LOCAL
AUTONOMY; CITIZENS MOVEMENT FOR JUSTICE, ECONOMY, ENVIRONMENT AND
PEACE; CHAMBER OF REAL ESTATE BUILDERS ASSOCIATION; SPORTS & HEALTH
ADVANCEMENT FOUNDATION, INC.; ANG LAKAS NG OVERSEAS CONTRACT
WORKERS (OCW); BAGONG BAYANI ORGANIZATION and others under
"Organizations/Coalitions" of Omnibus Resolution No. 3785; PARTIDO NG
MASANG PILIPINO; LAKAS NUCD-UMDP; NATIONALIST PEOPLE'S COALITION;
LABAN NG DEMOKRATIKONG PILIPINO; AKSYON DEMOKRATIKO; PDP-LABAN;
LIBERAL PARTY; NACIONALISTA PARTY; ANG BUHAY HAYAANG YUMABONG; and
others under "Political Parties" of Omnibus Resolution No. 3785. respondents.
x---------------------------------------------------------x
G.R. No. 147613 June 26, 2001

BAYAN MUNA, petitioner,

vs.
COMMISSION ON ELECTIONS; NATIONALIST PEOPLE'S COALITION (NPC); LABAN
NG DEMOKRATIKONG PILIPINO (LDP); PARTIDO NG MASANG PILIPINO (PMP);
LAKAS-NUCD-UMDP; LIBERAL PARTY; MAMAMAYANG AYAW SA DROGA; CREBA;
NATIONAL FEDERATION OF SUGARCANE PLANTERS; JEEP; and BAGONG BAYANI
ORGANIZATION, respondents.
PANGANIBAN, J.:
The party-list system is a social justice tool designed not only to give more law to the
great masses of our people who have less in life, but also to enable them to become
veritable lawmakers themselves, empowered to participate directly in the enactment of
laws designed to benefit them. It intends to make the marginalized and the
underrepresented not merely passive recipients of the State's benevolence, but active
participants in the mainstream of representative democracy. Thus, allowing all
individuals and groups, including those which now dominate district elections, to have
the same opportunity to participate in party-list elections would desecrate this lofty
objective and mongrelize the social justice mechanism into an atrocious veneer for
traditional politics.
The Case
Before us are two Petitions under Rule 65 of the Rules of Court, challenging Omnibus
Resolution No. 3785 1issued by the Commission on Elections (Comelec) on March 26,
2001. This Resolution approved the participation of 154 organizations and parties,
including those herein impleaded, in the 2001 party-list elections. Petitioners seek the
disqualification of private respondents, arguing mainly that the party-list system was
intended to benefit the marginalized and underrepresented; not the mainstream political
parties, the non-marginalized or overrepresented.
The Factual Antecedents
With the onset of the 2001 elections, the Comelec received several Petitions for
registration filed by sectoral parties, organizations and political parties. According to the
Comelec, "[v]erifications were made as to the status and capacity of these parties and
organizations and hearings were scheduled day and night until the last party w[as]
heard. With the number of these petitions and the observance of the legal and
procedural requirements, review of these petitions as well as deliberations takes a longer
process in order to arrive at a decision and as a result the two (2) divisions promulgated
a separate Omnibus Resolution and individual resolution on political parties. These
numerous petitions and processes observed in the disposition of these petition[s] hinder
the early release of the Omnibus Resolutions of the Divisions which were promulgated
only on 10 February 2001." 2

Thereafter, before the February 12, 2001 deadline prescribed under Comelec Resolution
No. 3426 dated December 22, 2000, the registered parties and organizations filed their
respective Manifestations, stating their intention to participate in the party-list elections.
Other sectoral and political parties and organizations whose registrations were denied
also filed Motions for Reconsideration, together with Manifestations of their intent to
participate in the party-list elections. Still other registered parties filed their
Manifestations beyond the deadline.
The Comelec gave due course or approved the Manifestations (or accreditations) of 154
parties and organizations, but denied those of several others in its assailed March 26,
2001 Omnibus Resolution No. 3785, which we quote:
"We carefully deliberated the foregoing matters, having in mind that this system of
proportional representation scheme will encourage multi-partisan [sic] and enhance the
inability of small, new or sectoral parties or organization to directly participate in this
electoral window.
"It will be noted that as defined, the 'party-list system' is a 'mechanism of proportional
representation' in the election of representatives to the House of Representatives from
national, regional, and sectoral parties or organizations or coalitions thereof registered
with the Commission on Elections.
"However, in the course of our review of the matters at bar, we must recognize the fact
that there is a need to keep the number of sectoral parties, organizations and coalitions,
down to a manageable level, keeping only those who substantially comply with the rules
and regulations and more importantly the sufficiency of the Manifestations or evidence
on the Motions for Reconsiderations or Oppositions." 3
On April 10, 2001, Akbayan Citizens Action Party filed before the Comelec a Petition
praying that "the names of [some of herein respondents] be deleted from the 'Certified
List of Political Parties/Sectoral Parties/Organizations/Coalitions Participating in the Party
List System for the May 14, 2001 Elections' and that said certified list be accordingly
amended." It also asked, as an alternative, that the votes cast for the said respondents
not be counted or canvassed, and that the latter's nominees not be proclaimed. 4 On
April 11, 2001, Bayan Muna and Bayan Muna-Youth also filed a Petition for Cancellation of
Registration and Nomination against some of herein respondents. 5
On April 18, 2001, the Comelec required the respondents in the two disqualification
cases to file Comments within three days from notice. It also set the date for hearing on
April 26, 2001, 6 but subsequently reset it to May 3, 2001.7 During the hearing, however,
Commissioner Ralph C. Lantion merely directed the parties to submit their respective
memoranda. 8
Meanwhile, dissatisfied with the pace of the Comelec, Ang Bagong Bayani-OFW Labor
Party filed a Petition 9before this Court on April 16, 2001. This Petition, docketed as GR

No. 147589, assailed Comelec Omnibus Resolution No. 3785. In its Resolution dated April
17, 2001, 10 the Court directed respondents to comment on the Petition within a nonextendible period of five days from notice. 11
On April 17, 2001, Petitioner Bayan Muna also filed before this Court a
Petition, 12 docketed as GR No. 147613, also challenging Comelec Omnibus Resolution No.
3785. In its Resolution dated May 9, 2001, 13 the Court ordered the consolidation of the
two Petitions before it; directed respondents named in the second Petition to file their
respective Comments on or before noon of May 15, 2001; and called the parties to an
Oral Argument on May 17, 2001. It added that the Comelec may proceed with the
counting and canvassing of votes cast for the party-list elections, but barred the
proclamation of any winner therein, until further orders of the Court.
Thereafter, Comments 14 on the second Petition were received by the Court and, on May
17, 2001, the Oral Argument was conducted as scheduled. In an Order given in open
court, the parties were directed to submit their respective Memoranda simultaneously
within a non-extendible period of five days. 15
Issues:
During the hearing on May 17, 2001, the Court directed the parties to address the
following issues:
"1. Whether or not recourse under Rule 65 is proper under the premises. More
specifically, is there no other plain, speedy or adequate remedy in the ordinary
course of law?
"2. Whether or not political parties may participate in the party-list elections.
"3. Whether or not the party-list system is exclusive to 'marginalized and
underrepresented' sectors and organizations.
"4. Whether or not the Comelec committed grave abuse of discretion in
promulgating Omnibus Resolution No. 3785." 16
The Court's Ruling
The Petitions are partly meritorious. These cases should be remanded to the Comelec
which will determine, after summary evidentiary hearings, whether the 154 parties and
organizations enumerated in the assailed Omnibus Resolution satisfy the requirements of
the Constitution and RA 7941, as specified in this Decision.
First Issue:
Recourse Under Rule 65

Respondents contend that the recourse of both petitioners under Rule 65 is improper
because there are other plain, speedy and adequate remedies in the ordinary course of
law. 17 The Office of the Solicitor General argues that petitioners should have filed before
the Comelec a petition either for disqualification or for cancellation of registration,
pursuant to Sections 19, 20, 21 and 22 of Comelec Resolution No. 3307-A 18 dated
November 9, 2000. 19
We disagree. At bottom, petitioners attack the validity of Comelec Omnibus Resolution
3785 for having been issued with grave abuse of discretion, insofar as it allowed
respondents to participate in the party-list elections of 2001. Indeed, under both the
Constitution 20 and the Rules of Court, such challenge may be brought before this Court in
a verified petition for certiorari under Rule 65.
Moreover, the assailed Omnibus Resolution was promulgated by Respondent Commission
en banc; hence, no motion for reconsideration was possible, it being a prohibited
pleading under Section 1 (d), Rule 13 of the Comelec Rules of Procedure. 21
The Court also notes that Petitioner Bayan Muna had filed before the Comelec a Petition
for Cancellation of Registration and Nomination against some of herein
respondents. 22 The Comelec, however, did not act on that Petition. In view of the
pendency of the elections, Petitioner Bayan Muna sought succor from this Court, for
there was no other adequate recourse at the time. Subsequent events have proven the
urgency of petitioner's action; to this date, the Comelec has not yet formally resolved the
Petition before it. But a resolution may just be a formality because the Comelec, through
the Office of the Solicitor General, has made its position on the matter quite clear.
In any event, this case presents an exception to the rule that certiorari shall lie only in
the absence of any other plain, speedy and adequate remedy. 23 It has been held that
certiorari is available, notwithstanding the presence of other remedies, "where the issue
raised is one purely of law, where public interest is involved, and in case of
urgency." 24 Indeed, the instant case is indubitably imbued with public interest and with
extreme urgency, for it potentially involves the composition of 20 percent of the House of
Representatives.
Moreover, this case raises transcendental constitutional issues on the party-list system,
which this Court must urgently resolve, consistent with its duty to "formulate guiding and
controlling constitutional principles, precepts, doctrines, or rules." 25
Finally, procedural requirements "may be glossed over to prevent a miscarriage of
justice, when the issue involves the principle of social justice x x x when the decision
sought to be set aside is a nullity, or when the need for relief is extremely urgent and
certiorari is the only adequate and speedy remedy available." 26
Second Issue:

Participation of Political Parties

In its Petition, Ang Bagong Bayani-OFW Labor Party contends that "the inclusion of
political parties in the party-list system is the most objectionable portion of the
questioned Resolution." 27 For its part, Petitioner Bayan Muna objects to the participation
of "major political parties." 28 On the other hand, the Office of the Solicitor General, like
the impleaded political parties, submits that the Constitution and RA No. 7941 allow
political parties to participate in the party-list elections. It argues that the party-list
system is, in fact, open to all "registered national, regional and sectoral parties or
organizations." 29
We now rule on this issue. Under the Constitution and RA 7941, private respondents
cannot be disqualified from the party-list elections, merely on the ground that they are
political parties. Section 5, Article VI of the Constitution provides that members of the
House of Representatives may "be elected through a party-list system of registered
national, regional, and sectoral parties or organizations."
Furthermore, under Sections 7 and 8, Article IX (C) of the Constitution, political parties
may be registered under the party-list system.
"Sec. 7. No votes cast in favor of a political party, organization, or coalition shall be
valid, except for those registered under the party-list system as provided in this
Constitution.
"Sec. 8. Political parties, or organizations or coalitions registered under the partylist system, shall not be represented in the voters' registration boards, boards of
election inspectors, boards of canvassers, or other similar bodies. However, they
shall be entitled to appoint poll watchers in accordance with law." 30
During the deliberations in the Constitutional Commission, Comm. Christian S. Monsod
pointed out that the participants in the party-list system may "be a regional party, a
sectoral party, a national party, UNIDO, 31Magsasaka, or a regional party in
Mindanao." 32 This was also clear from the following exchange between Comms. Jaime
Tadeo and Blas Ople: 33
"MR. TADEO. Naniniwala ba kayo na ang party list ay pwedeng paghati-hatian ng UNIDO,
PDP-Laban, PNP, Liberal at Nacionalista?
MR. OPLE. Maaari yan sapagkat bukas ang party list system sa lahat ng mga partido."
Indeed, Commissioner Monsod stated that the purpose of the party-list provision was to
open up the system, in order to give a chance to parties that consistently place third or
fourth in congressional district elections to win a seat in Congress. 34 He explained: "The
purpose of this is to open the system. In the past elections, we found out that there were
certain groups or parties that, if we count their votes nationwide, have about 1,000,000
or 1,500,000 votes. But they were always third or fourth place in each of the districts. So,

they have no voice in the Assembly. But this way, they would have five or six
representatives in the Assembly even if they would not win individually in legislative
districts. So, that is essentially the mechanics, the purpose and objectives of the partylist system."
For its part, Section 2 of RA 7941 also provides for "a party-list system of registered
national, regional and sectoral parties or organizations or coalitions thereof, x x x."
Section 3 expressly states that a "party" is "either a political party or a sectoral party or
a coalition of parties." More to the point, the law defines "political party" as "an
organized group of citizens advocating an ideology or platform, principles and policies for
the general conduct of government and which, as the most immediate means of
securing their adoption, regularly nominates and supports certain of its leaders and
members as candidates for public office."
Furthermore, Section 11 of RA 7941 leaves no doubt as to the participation of political
parties in the party-list system. We quote the pertinent provision below:
"x x x
"For purposes of the May 1998 elections, the first five (5) major political parties on the
basis of party representation in the House of Representatives at the start of the Tenth
Congress of the Philippines shall not be entitled to participate in the party-list system.
x x x"
Indubitably, therefore, political parties even the major ones -- may participate in the
party-list elections.
Third Issue:
Marginalized and Underrepresented
That political parties may participate in the party-list elections does not mean, however,
that any political party -- or any organization or group for that matter -- may do so. The
requisite character of these parties or organizations must be consistent with the purpose
of the party-list system, as laid down in the Constitution and RA 7941. Section 5, Article
VI of the Constitution, provides as follows:
"(1) The House of Representatives shall be composed of not more than two
hundred and fifty members, unless otherwise fixed by law, who shall be elected
from legislative districts apportioned among the provinces, cities, and the
Metropolitan Manila area in accordance with the number of their respective
inhabitants, and on the basis of a uniform and progressive ratio, and those who, as
provided by law, shall be elected through a party-list system of registered national,
regional, and sectoral parties or organizations.

(2) The party-list representatives shall constitute twenty per centum of the total
number of representatives including those under the party list. For three
consecutive terms after the ratification of this Constitution, one-half of the seats
allocated to party-list representatives shall be filled, as provided by law, by
selection or election from the labor, peasant, urban poor, indigenous cultural
communities, women, youth, and such other sectors as may be provided by law,
except the religious sector." (Emphasis supplied.)
Notwithstanding the sparse language of the provision, a distinguished member of the
Constitutional Commission declared that the purpose of the party-list provision was to
give "genuine power to our people" in Congress. Hence, when the provision was
discussed, he exultantly announced: "On this first day of August 1986, we shall,
hopefully, usher in a new chapter to our national history, by giving genuine power to our
people in the legislature."35
The foregoing provision on the party-list system is not self-executory. It is, in fact,
interspersed with phrases like "in accordance with law" or "as may be provided by law";
it was thus up to Congress to sculpt in granite the lofty objective of the Constitution.
Hence, RA 7941 was enacted. It laid out the statutory policy in this wise:
"SEC. 2. Declaration of Policy. -- The State shall promote proportional representation in
the election of representatives to the House of Representatives through a party-list
system of registered national, regional and sectoral parties or organizations or coalitions
thereof, which will enable Filipino citizens belonging to marginalized and
underrepresented sectors, organizations and parties, and who lack well-defined political
constituencies but who could contribute to the formulation and enactment of appropriate
legislation that will benefit the nation as a whole, to become members of the House of
Representatives. Towards this end, the State shall develop and guarantee a full, free and
open party system in order to attain the broadest possible representation of party,
sectoral or group interests in the House of Representatives by enhancing their chances
to compete for and win seats in the legislature, and shall provide the simplest scheme
possible."
The Marginalized and Underrepresented to Become Lawmakers Themselves
The foregoing provision mandates a state policy of promoting proportional representation
by means of the Filipino-style party-list system, which will "enable" the election to the
House of Representatives of Filipino citizens,
1. who belong to marginalized and underrepresented sectors, organizations and
parties; and
2. who lack well-defined constituencies; but

3. who could contribute to the formulation and enactment of appropriate

legislation that will benefit the nation as a whole.
The key words in this policy are "proportional representation," "marginalized and
underrepresented," and "lack ofwell-defined constituencies."
"Proportional representation" here does not refer to the number of people in a particular
district, because the party-list election is national in scope. Neither does it allude to
numerical strength in a distressed or oppressed group. Rather, it refers to the
representation of the "marginalized and underrepresented" as exemplified by the
enumeration in Section 5 of the law; namely, "labor, peasant, fisherfolk, urban poor,
indigenous cultural communities, elderly, handicapped, women, youth, veterans,
overseas workers, and professionals."
However, it is not enough for the candidate to claim representation of the marginalized
and underrepresented, because representation is easy to claim and to feign. The partylist organization or party must factually and truly represent the marginalized and
underrepresented constituencies mentioned in Section 5. 36 Concurrently, the persons
nominated by the party-list candidate-organization must be "Filipino citizens belonging to
marginalized and underrepresented sectors, organizations and parties."
Finally, "lack of well-defined constituenc[y] " refers to the absence of a traditionally
identifiable electoral group, like voters of a congressional district or territorial unit of
government. Rather, it points again to those with disparate interests identified with the
"marginalized or underrepresented."
In the end, the role of the Comelec is to see to it that only those Filipinos who are
"marginalized and underrepresented" become members of Congress under the party-list
system, Filipino-style.
The intent of the Constitution is clear: to give genuine power to the people, not only by
giving more law to those who have less in life, but more so by enabling them to become
veritable lawmakers themselves. Consistent with this intent, the policy of the
implementing law, we repeat, is likewise clear: "to enable Filipino citizens belonging to
marginalized and underrepresented sectors, organizations and parties, x x x, to become
members of the House of Representatives." Where the language of the law is clear, it
must be applied according to its express terms. 37
The marginalized and underrepresented sectors to be represented under the party-list
system are enumerated in Section 5 of RA 7941, which states:
"SEC. 5. Registration. -- Any organized group of persons may register as a party,
organization or coalition for purposes of the party-list system by filing with the COMELEC
not later than ninety (90) days before the election a petition verified by its president or
secretary stating its desire to participate in the party-list system as a national, regional

or sectoral party or organization or a coalition of such parties or organizations, attaching

thereto its constitution, by-laws, platform or program of government, list of officers,
coalition agreement and other relevant information as the COMELEC may require:
Provided, that the sector shall include labor, peasant, fisherfolk, urban poor, indigenous
cultural communities, elderly, handicapped, women, youth, veterans, overseas workers,
and professionals."
While the enumeration of marginalized and underrepresented sectors is not exclusive, it
demonstrates the clear intent of the law that not all sectors can be represented under
the party-list system. It is a fundamental principle of statutory construction that words
employed in a statute are interpreted in connection with, and their meaning is
ascertained by reference to, the words and the phrases with which they are associated
or related. Thus, the meaning of a term in a statute may be limited, qualified or
specialized by those in immediate association. 38
The Party-List System Desecrated by the OSG Contentions
Notwithstanding the unmistakable statutory policy, the Office of the Solicitor General
submits that RA No. 7941 "does not limit the participation in the party-list system to the
marginalized and underrepresented sectors of society." 39 In fact, it contends that any
party or group that is not disqualified under Section 6 40 of RA 7941 may participate in
the elections. Hence, it admitted during the Oral Argument that even an organization
representing the super rich of Forbes Park or Dasmarias Village could participate in the
party-list elections. 41
The declared policy of RA 7941 contravenes the position of the Office of the Solicitor
General (OSG). We stress that the party-list system seeks to enable certain Filipino
citizens specifically those belonging to marginalized and underrepresented sectors,
organizations and parties to be elected to the House of Representatives. The assertion
of the OSG that the party-list system is not exclusive to the marginalized and
underrepresented disregards the clear statutory policy. Its claim that even the super-rich
and overrepresented can participate desecrates the spirit of the party-list system.
Indeed, the law crafted to address the peculiar disadvantages of Payatas hovel dwellers
cannot be appropriated by the mansion owners of Forbes Park. The interests of these two
sectors are manifestly disparate; hence, the OSG's position to treat them similarly defies
reason and common sense. In contrast, and with admirable candor, Atty. Lorna PatajoKapunan 42 admitted during the Oral Argument that a group of bankers, industrialists and
sugar planters could not join the party-list system as representatives of their respective
sectors. 43
While the business moguls and the mega-rich are, numerically speaking, a tiny minority,
they are neither marginalized nor underrepresented, for the stark reality is that their
economic clout engenders political power more awesome than their numerical limitation.
Traditionally, political power does not necessarily emanate from the size of one's

constituency; indeed, it is likely to arise more directly from the number and amount of
one's bank accounts.
It is ironic, therefore, that the marginalized and underrepresented in our midst are the
majority who wallow in poverty, destitution and infirmity. It was for them that the partylist system was enacted -- to give them not only genuine hope, but genuine power; to
give them the opportunity to be elected and to represent the specific concerns of their
constituencies; and simply to give them a direct voice in Congress and in the larger
affairs of the State. In its noblest sense, the party-list system truly empowers the masses
and ushers a new hope for genuine change. Verily, it invites those marginalized and
underrepresented in the past the farm hands, the fisher folk, the urban poor, even
those in the underground movement to come out and participate, as indeed many of
them came out and participated during the last elections. The State cannot now
disappoint and frustrate them by disabling and desecrating this social justice vehicle.
Because the marginalized and underrepresented had not been able to win in the
congressional district elections normally dominated by traditional politicians and vested
groups, 20 percent of the seats in the House of Representatives were set aside for the
party-list system. In arguing that even those sectors who normally controlled 80 percent
of the seats in the House could participate in the party-list elections for the remaining 20
percent, the OSG and the Comelec disregard the fundamental difference between the
congressional district elections and the party-list elections.
As earlier noted, the purpose of the party-list provision was to open up the system, 44 in
order to enhance the chance of sectoral groups and organizations to gain representation
in the House of Representatives through the simplest scheme possible. 45 Logic shows
that the system has been opened to those who have never gotten a foothold within it -those who cannot otherwise win in regular elections and who therefore need the
"simplest scheme possible" to do so. Conversely, it would be illogical to open the system
to those who have long been within it -- those privileged sectors that have long
dominated the congressional district elections.
The import of the open party-list system may be more vividly understood when
compared to a student dormitory "open house," which by its nature allows outsiders to
enter the facilities. Obviously, the "open house" is for the benefit of outsiders only, not
the dormers themselves who can enter the dormitory even without such special
privilege. In the same vein, the open party-list system is only for the "outsiders" who
cannot get elected through regular elections otherwise; it is not for the non-marginalized
or overrepresented who already fill the ranks of Congress.
Verily, allowing the non-marginalized and overrepresented to vie for the remaining seats
under the party-list system would not only dilute, but also prejudice the chance of the
marginalized and underrepresented, contrary to the intention of the law to enhance it.
The party-list system is a tool for the benefit of the underprivileged; the law could not
have given the same tool to others, to the prejudice of the intended beneficiaries.

This Court, therefore, cannot allow the party-list system to be sullied and prostituted by
those who are neither marginalized nor underrepresented. It cannot let that flicker of
hope be snuffed out. The clear state policy must permeate every discussion of the
qualification of political parties and other organizations under the party-list system.
Refutation of the Separate Opinions
The Separate Opinions of our distinguished colleagues, Justices Jose C. Vitug and Vicente
V. Mendoza, are anchored mainly on the supposed intent of the framers of the
Constitution as culled from their deliberations.
The fundamental principle in constitutional construction, however, is that the primary
source from which to ascertain constitutional intent or purpose is the language of the
provision itself. The presumption is that the words in which the constitutional provisions
are couched express the objective sought to be attained. 46 In other words, verba legis
still prevails. Only when the meaning of the words used is unclear and equivocal should
resort be made to extraneous aids of construction and interpretation, such as the
proceedings of the Constitutional Commission or Convention, in order to shed light on
and ascertain the true intent or purpose of the provision being construed. 47
Indeed, as cited in the Separate Opinion of Justice Mendoza, this Court stated in Civil
Liberties Union v. Executive Secretary 48 that "the debates and proceedings of the
constitutional convention [may be consulted] in order to arrive at the reason and
purpose of the resulting Constitution x x x only when other guides fail as said
proceedings are powerless to vary the terms of the Constitution when the meaning is
clear. Debates in the constitutional convention 'are of value as showing the views of the
individual members, and as indicating the reason for their votes, but they give us no
light as to the views of the large majority who did not talk, much less of the mass or our
fellow citizens whose votes at the polls gave that instrument the force of fundamental
law. We think it safer to construe the constitution from what appears upon its face.' The
proper interpretation therefore depends more on how it was understood by the people
adopting it than in the framers' understanding thereof."
Section 5, Article VI of the Constitution, relative to the party-list system, is couched in
clear terms: the mechanics of the system shall be provided by law. Pursuant thereto,
Congress enacted RA 7941. In understanding and implementing party-list representation,
we should therefore look at the law first. Only when we find its provisions ambiguous
should the use of extraneous aids of construction be resorted to.
But, as discussed earlier, the intent of the law is obvious and clear from its plain words.
Section 2 thereof unequivocally states that the party-list system of electing
congressional representatives was designed to "enable underrepresented sectors,
organizations and parties, and who lack well-defined political constituencies but who
could contribute to the formulation and enactment of appropriate legislation that will
benefit the nation as a whole x x x." The criteria for participation is well defined. Thus,

there is no need for recourse to constitutional deliberations, not even to the proceedings
of Congress. In any event, the framers' deliberations merely express their individual
opinions and are, at best, only persuasive in construing the meaning and purpose of the
constitution or statute.
Be it remembered that the constitutionality or validity of Sections 2 and 5 of RA 7941 is
not an issue here. Hence, they remain parts of the law, which must be applied plainly
and simply.
Fourth Issue:
Grave Abuse of Discretion
From its assailed Omnibus Resolution, it is manifest that the Comelec failed to appreciate
fully the clear policy of the law and the Constitution. On the contrary, it seems to have
ignored the facet of the party-list system discussed above. The OSG as its counsel
admitted before the Court that any group, even the non-marginalized and
overrepresented, could field candidates in the party-list elections.
When a lower court, or a quasi-judicial agency like the Commission on Elections, violates
or ignores the Constitution or the law, its action can be struck down by this Court on the
ground of grave abuse of discretion. 49Indeed, the function of all judicial and quasi-judicial
instrumentalities is to apply the law as they find it, not to reinvent or second-guess it. 50
In its Memorandum, Petitioner Bayan Muna passionately pleads for the outright
disqualification of the major political parties Respondents Lakas-NUCD, LDP, NPC, LP
and PMP on the ground that under Comelec Resolution No. 4073, they have been
accredited as the five (six, including PDP-Laban) major political parties in the May 14,
2001 elections. It argues that because of this, they have the "advantage of getting
official Comelec Election Returns, Certificates of Canvass, preferred poll watchers x x x."
We note, however, that this accreditation does not refer to the party-list election, but,
inter alia, to the election of district representatives for the purpose of determining which
parties would be entitled to watchers under Section 26 of Republic Act No. 7166.
What is needed under the present circumstances, however, is a factual determination of
whether respondents herein and, for that matter, all the 154 previously approved groups,
have the necessary qualifications to participate in the party-list elections, pursuant to
the Constitution and the law.
Bayan Muna also urges us to immediately rule out Respondent Mamamayan Ayaw sa
Droga (MAD), because "it is a government entity using government resources and
privileges." This Court, however, is not a trier of facts. 51 It is not equipped to receive
evidence and determine the truth of such factual allegations.
Basic rudiments of due process require that respondents should first be given an
opportunity to show that they qualify under the guidelines promulgated in this Decision,

before they can be deprived of their right to participate in and be elected under the
party-list system.
Guidelines for Screening Party-List Participants
The Court, therefore, deems it proper to remand the case to the Comelec for the latter to
determine, after summary evidentiary hearings, whether the 154 parties and
organizations allowed to participate in the party-list elections comply with the
requirements of the law. In this light, the Court finds it appropriate to lay down the
following guidelines, culled from the law and the Constitution, to assist the Comelec in its
work.
First, the political party, sector, organization or coalition must represent the marginalized
and underrepresented groups identified in Section 5 of RA 7941. In other words, it must
show -- through its constitution, articles of incorporation, bylaws, history, platform of
government and track record -- that it represents and seeks to uplift marginalized and
underrepresented sectors. Verily, majority of its membership should belong to the
marginalized and underrepresented. And it must demonstrate that in a conflict of
interests, it has chosen or is likely to choose the interest of such sectors.
Second, while even major political parties are expressly allowed by RA 7941 and the
Constitution to participate in the party-list system, they must comply with the declared
statutory policy of enabling "Filipino citizens belonging to marginalized and
underrepresented sectors x x x to be elected to the House of Representatives." In other
words, while they are not disqualified merely on the ground that they are political
parties, they must show, however, that they represent the interests of the marginalized
and underrepresented. The counsel of Aksyon Demokratiko and other similarly situated
political parties admitted as much during the Oral Argument, as the following quote
shows:
"JUSTICE PANGANIBAN: I am not disputing that in my question. All I am saying is, the
political party must claim to represent the marginalized and underrepresented sectors?
ATTY. KAPUNAN: Yes, Your Honor, the answer is yes."52
Third, in view of the objections53 directed against the registration of Ang Buhay Hayaang
Yumabong, which is allegedly a religious group, the Court notes the express
constitutional provision that the religious sector may not be represented in the party-list
system. The extent of the constitutional proscription is demonstrated by the following
discussion during the deliberations of the Constitutional Commission:
"MR. OPLE. x x x
In the event that a certain religious sect with nationwide and even international networks
of members and supporters, in order to circumvent this prohibition, decides to form its
own political party in emulation of those parties I had mentioned earlier as deriving their

inspiration and philosophies from well-established religious faiths, will that also not fall
within this prohibition?
MR. MONSOD. If the evidence shows that the intention is to go around the prohibition,
then certainly the Comelec can pierce through the legal fiction."54
The following discussion is also pertinent:
"MR. VILLACORTA. When the Commissioner proposed "EXCEPT RELIGIOUS GROUPS," he is
not, of course, prohibiting priests, imams or pastors who may be elected by, say, the
indigenous community sector to represent their group.
REV. RIGOS. Not at all, but I am objecting to anybody who represents the Iglesia ni Kristo,
the Catholic Church, the Protestant Church et cetera."55
Furthermore, the Constitution provides that "religious denominations and sects shall not
be registered."56 The prohibition was explained by a member57 of the Constitutional
Commission in this wise: "[T] he prohibition is on any religious organization registering as
a political party. I do not see any prohibition here against a priest running as a candidate.
That is not prohibited here; it is the registration of a religious sect as a political party." 58
Fourth, a party or an organization must not be disqualified under Section 6 of RA 7941,
which enumerates the grounds for disqualification as follows:
"(1) It is a religious sect or denomination, organization or association organized for
religious purposes;
(2) It advocates violence or unlawful means to seek its goal;
(3) It is a foreign party or organization;
(4) It is receiving support from any foreign government, foreign political party,
foundation, organization, whether directly or through any of its officers or members
or indirectly through third parties for partisan election purposes;
(5) It violates or fails to comply with laws, rules or regulations relating to elections;
(6) It declares untruthful statements in its petition;
(7) It has ceased to exist for at least one (1) year; or
(8) It fails to participate in the last two (2) preceding elections or fails to obtain at
least two per centum (2%) of the votes cast under the party-list system in the two
(2) preceding elections for the constituency in which it has registered."59

Note should be taken of paragraph 5, which disqualifies a party or group for violation of
or failure to comply with election laws and regulations. These laws include Section 2 of
RA 7941, which states that the party-list system seeks to "enable Filipino citizens
belonging to marginalized and underrepresented sectors, organizations and parties x x x
to become members of the House of Representatives." A party or an organization,
therefore, that does not comply with this policy must be disqualified.
Fifth, the party or organization must not be an adjunct of, or a project organized or an
entity funded or assisted by, the government. By the very nature of the party-list system,
the party or organization must be a group of citizens, organized by citizens and operated
by citizens. It must be independent of the government. The participation of the
government or its officials in the affairs of a party-list candidate is not only illegal 60 and
unfair to other parties, but also deleterious to the objective of the law: to enable citizens
belonging to marginalized and underrepresented sectors and organizations to be elected
to the House of Representatives.
Sixth, the party must not only comply with the requirements of the law; its nominees
must likewise do so. Section 9 of RA 7941 reads as follows:
"SEC. 9. Qualifications of Party-List Nominees. No person shall be nominated as partylist representative unless he is a natural-born citizen of the Philippines, a registered
voter, a resident of the Philippines for a period of not less than one (1) year immediately
preceding the day of the election, able to read and write, a bona fide member of the
party or organization which he seeks to represent for at least ninety (90) days preceding
the day of the election, and is at least twenty-five (25) years of age on the day of the
election.
In case of a nominee of the youth sector, he must at least be twenty-five (25) but not
more than thirty (30) years of age on the day of the election. Any youth sectoral
representative who attains the age of thirty (30) during his term shall be allowed to
continue in office until the expiration of his term."
Seventh, not only the candidate party or organization must represent marginalized and
underrepresented sectors; so also must its nominees. To repeat, under Section 2 of RA
7941, the nominees must be Filipino citizens "who belong to marginalized and
underrepresented sectors, organizations and parties." Surely, the interests of the youth
cannot be fully represented by a retiree; neither can those of the urban poor or the
working class, by an industrialist. To allow otherwise is to betray the State policy to give
genuine representation to the marginalized and underrepresented.
Eighth, as previously discussed, while lacking a well-defined political constituency, the
nominee must likewise be able to contribute to the formulation and enactment of
appropriate legislation that will benefit the nation as a whole. Senator Jose Lina
explained during the bicameral committee proceedings that "the nominee of a party,
national or regional, is not going to represent a particular district x x x."61

Epilogue
The linchpin of this case is the clear and plain policy of the law: "to enable Filipino
citizens belonging to marginalized and underrepresented sectors, organizations and
parties, and who lack well-defined political constituencies but who could contribute to
the formulation and enactment of appropriate legislation that will benefit the nation as a
whole, to become members of the House of Representatives."
Crucial to the resolution of this case is the fundamental social justice principle that those
who have less in life should have more in law. The party-list system is one such tool
intended to benefit those who have less in life. It gives the great masses of our people
genuine hope and genuine power. It is a message to the destitute and the prejudiced,
and even to those in the underground, that change is possible. It is an invitation for them
to come out of their limbo and seize the opportunity.
Clearly, therefore, the Court cannot accept the submissions of the Comelec and the other
respondents that the party-list system is, without any qualification, open to all. Such
position does not only weaken the electoral chances of the marginalized and
underrepresented; it also prejudices them. It would gut the substance of the party-list
system. Instead of generating hope, it would create a mirage. Instead of enabling the
marginalized, it would further weaken them and aggravate their marginalization.
In effect, the Comelec would have us believe that the party-list provisions of the
Constitution and RA 7941 are nothing more than a play on dubious words, a mockery of
noble intentions, and an empty offering on the altar of people empowerment. Surely, this
could not have been the intention of the framers of the Constitution and the makers of
RA 7941.
WHEREFORE, this case is REMANDED to the Comelec, which is hereby DIRECTED to
immediately conduct summary evidentiary hearings on the qualifications of the party-list
participants in the light of the guidelines enunciated in this Decision. Considering the
extreme urgency of determining the winners in the last party-list elections, the Comelec
is directed to begin its hearings for the parties and organizations that appear to have
garnered such number of votes as to qualify for seats in the House of Representatives.
The Comelec is further DIRECTED to submit to this Court its compliance report within 30
days from notice hereof.1wphi1.nt
The Resolution of this Court dated May 9, 2001, directing the Comelec "to refrain from
proclaiming any winner" during the last party-list election, shall remain in force until after
the Comelec itself will have complied and reported its compliance with the foregoing
disposition.
This Decision is immediately executory upon the Commission on Elections' receipt
thereof. No pronouncement as to costs.

SO ORDERED.