ARTICLE II.

DECLARATION OF PRINCIPLES AND STATE POLICIES

1. Kilosbayan v. Morato [246 SCRA 540 (1995)] and MR [250 SCRA 130 (1995)]
Kilosbayan, Incorporated vs. Morato
July 17, 1995
MENDOZA, J:
FACTS:
This case stems from a decision of the Supreme Court regarding the case GR No. 113375, that invalidated the Lease
Contract of the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management Corp (PGMC) on the
ground that the PGMC had been made in violation of the charter of PCSO.
Both parties have negotiated between themselves and on January 25, 1995, the parties signed an Equipment Lease
Agreement (ELA):
o PGMC leased online lottery equipment and accessories to the PCSO in consideration of a rental equivalent to 4.3% of the
gross amount of ticket sales derived by the PCSO from the operation of the lottery.
o Upon computation, it shall not be less than P35,000 per terminal in commercial operation per year.
o The rental is to be made bi-weekly and if PCSO fails to meet the quota, it shall pay PGMC the remaining balance out of the
proceeds of the ticket sales.
Under the law, 30% of the net receipts from the sale of tickets is allotted to charity (RA 1169, section 6[b])
THE LEASE:
o Term = 8 years
o PCSO is to employ its OWN personnel
o PCSO is responsible for the loss of, or damage to, the equipment
o Upon the expiration of the lease, PCSO may purchase the equipment for 25 million Pesos
A copy of the ELA was furnished to the Court but was assailed by Kilosbayan, Inc. where they argued that the ELA is
the SAME as the first Lease Contract nullified in the previous case.
Kilosbayan petitioned to the Supreme Court where the following issues must be resolved:
ISSUES:
1. Whether the petitioners have Locus Standi NO
2. Whether the amended ELA is valid since it is the same as the nullified contract in the previous case and is in violation of the
following: a) PCSOs charter, b) the law on public bidding of contracts for furnishing supplies, materials and equipment to the
government, c) rules and regulations for the prevention of irregular, unnecessary, excessive expenditures and Section 2 (2) of
Article IX-D of the Constitution ( IS IT VALID?) YES
Held:
1. Respondents question the right of the petitioners to bring this suit since they are not involved in any way to the decision of the
suit.
Petitioners argue that since they were allowed to become parties in the previous case, by the doctrine of the law of the
case, the respondents cannot question their position since it has already been decided on.
The Court views that this is a flawed argument since the doctrine of the law of the case has been defined as the
opinion delivered on a former appeal and that this case is not a continuation from the previous case.
o Whatever the controlling legal rile of decision between the same parties in the same case continues to be the law of the case,
so long as the facts are the same
Neither the doctrine of Stare Decisis is inapplicable in the case based on the previous ruling because it may be
considered as a departure from the settled rulings on the parties involved.
Res judicata is also inapplicable because the conclusiveness of the first judgment is NOT dependent upon its finality. In
the case at bar, the parties are the same BUT THE CASE IS NOT.
Petitioners then invokes Art II of the constitution where the Court replied that Art II are NOT SELF-EXECUTING
provisions.
o They are mere GUIDELINES
Petitioners are NOT THE REAL PARTIES in this case because real parties are those who are:
o Parties to the agreement
o Bound either principally or subsidiarily
o Prejudiced in their rights with respect to one of the contracting parties and can show detriment which would positively result
to them from the contract even though they did not intervene.
o Claim a right to take part in a public bidding but have been illegally excluded from it
2. THE EQUIPMENT LEASE AGREEMENT (ELA)
The void aspects of the previous contract is not in the contract:
o PCSO had neither funds nor expertise to operate online lottery system
o PGMC would exclusively bear the all the costs and expenses relating to PCSOs printing tickets, payment of salaries and
wages of personnel, which the Court considered as an unusual lessor-lessee relationship.
o PGMC would be the operator of the lottery system because of a clause in the contract that would only enable PCSO to operate
the online lottery AFTER the term of the contract.
o The rent was modified
In general, the ELA is a fairer contract
Not subject to public bidding because EO 301 is only applicable to the furnishing supplies
2 a)
RA 1169
o Although the previous case (GR 113375) held that the PCSO does not have the power to enter into ANY contract that would
involve it in any form of collaboration, association or joint venture for sweepstakes and similar activities, it DID NOT
absolutely prohibit PCSO from holding or conducting lottery in collaboration, association or join venture with another party
o It is PROHIBITED from investing in a BUSINESS engaged in SWEEPSTAKES RACES, LOTTERIES AND SIMILAR
ACTIVITIES.
DISPOSITIVE:
Petition dismissed
Concurring: J. Padilla
Locus standi is merely procedural, and should be relaxed on issues of paramount national interest. Since the case involves a form
of gambling (online lotto), standing should not stand in the way of review by the SC.
Separate Concurring: J. Vitug
- Reiterates his opinion in the prior case. Judicial power should not mutate the long-established rules on locus standi or
separation of powers. This case involves a purely political decision which should not be intruded by the courts.
Dissenting: J. Regalado
- In the first lotto case, the Court acted correctly in excepting to the doctrine of standing given the paramount national interest
at hand. Since this case is a reprise of the first, the Court should not hide behind technicalities.
- Law of the Case should apply because although the cases are technically different, the part on standing is virtually identical.
As the Law of the Case doctrine was designed so Court refuse to reopen what has been decided, emphasizing the rule on final
judgments being the final determination of the rights of the parties, the same should apply here.
- If the majority is to be followed, there would be no available judicial remedy against irregularities or excesses in govt
contracts for lack of a party with standing or capacity to sue. Although the majority opinion provides recourse with the CoA or
the Ombudsman, that same recourse requires standing or capacity to sue as well. The Majority has apparently forgotten its
own argument that in the present case petitioners are not the real parties
Dissenting: J. Davide (ponente of first case)
- Prevailing doctrines allow taxpayers to question contracts entered into by the govt or GOCCs if the same potentially
violates the law.
- Same Law of the Case discussion as Regalado, but even further, alleging that the cases involve the same issue of law re:
petitioners legal standing.
- Rules of Court issue was never raised in the prior case, and it was clear that only locus standi was being determined. Even
then, standing admits exceptions (as above).

2. Tondo Medical v. CA [527 SCRA 746 (2007)]

Ponente: Chico-Nazario
Facts:
1. 1999 DOH launched Health Sector Reform Agenda provided general areas of reform:
a. provide fiscal autonomy to government hospitals
b. secure funding for priority public health programs
c. promote the development of local health systems and ensure its effective performance
 d. strengthen the capacity of health regulatory agencies
e. expand the coverage of the National Health Insurance Program
2. PETITIONERS questioned the first reform agenda particularly collection of socialized user fees
and corporate restructuring of government hospitals
3. PETITIONERS questioned administrative orders issued by DOH imposed added burden to
indigent Filipinos who cannot afford to pay for medicine and medical services
4. PETITIONERS HSRA is void violated several constitutional provisions in duty of the state to
promote and protect peoples right to health and well-being
5. May 24, 1999 then President Joseph Ejercito Estrada EO 102: Redirecting the Functions and
Operations of the Department of Health changes in roles, functions, and organizational processes
of DOH
6. EO 102 refocused DOH as a provider of specific health services and technical assistance
7. EO 102 pursuant to Section 17 of LGC RA 7160 a devolution to LGUs of basic services and
facilities and specific health-related functions and responsibilities
8. PETITIONERS EO 102 is void issued in excess of Presidents authority should have been
enacted by Congress legislative function
9. PETITIONERS Rationalization and Streamlining Plan not in accordance with the law was
implemented even before DBMs approval there should have been an Administrative Order issued
by the President to carry out the streamlining
10. Several DOH employees assailed validity of EO 102 they were likely to lose their jobs
suffering from inconvenience of travelling a longer distance to get to new place of work others
relocated to far-flung areas
11. Errors in implementation of RSP
a. Certain employees suffered diminution of benefits
b. Some were assigned to positions they were neither qualified nor suited
c. Employees were transferred during three-month period before national local elections a
violation of Section 2 of RA 7305 Magna Carta for Public Health Workers
12. CA denied petition due to procedural defects
a. Failure to show capacity or authority to sign certification of non-forum shopping
b. Failure to show any particularized interest to bring the suit, or any direct or personal injury
c. Filing out of time (August 15, 1999 beyond 60 days from the time the reorganization
methods were implemented in 2000)
d. Certiorari, prohibition and mandamus will not lie where the President was not acting as
tribunal, board or officer exercising judicial or quasi-judicial functions
13. CA HSRA cannot be declared void aforementioned provisions are not self-executing a not
judicially enforceable constitutional rights only provide guidelines for legislation
14. CA assertion of EO 102 is not a justiciable issue within the realm of political department
15. CA President had the power to issue EO 102 DOH did not implement EO 102 in bad faith or
with grave abuse of discretion
16. CA denied Motion for Reconsideration

Issue: 1. Whether or not HSRA is unconstitutional

2. Whether or not EO 102 is unconstitutional

Held:
1. No, HSRA is not unconstitutional
a. General rule provisions of the Constitution are self-executing legislation is not required for their
enforcement because inaction of Congress can easily nullify mandate of fundamental law
 b. However, some are not self-executing moral incentives to legislation do not embody judicially
enforceable rights merely lay down a general principle cannot give rise to a cause of action
c. Provisions invoked by petitioners not self-executing based on Tan ada vs. Angara and Basco vs.
Philippine Amusement and Gaming Corporation
d. HSRA devoid of any explanation as to how equal protection and due process were violated no
allegations of discrimination or lack of due process
e. Petitioners failed to substantiate how constitutional guarantees were breached
f. Provisions invoked by petitioners mere statements of principles and policies mere directives
addressed to Executive and Legislative Departments
g. Two reasons for denying cause of action to an alleged infringement of broad constitutional
principles: (1) basic considerations of due process; and (2) limitations of judicial power

2. No, EO 102 is not unconstitutional

a. President may direct reorganization of government entities under the Executive Department
through administrative and executive orders
b. President has power to reorganize there is a recurring need to achieve simplicity, economy and
efficiency Office of the President must be capable of being shaped and reshaped in the manner the
Chief Executive deems fit to carry out presidential directives and policies
c. DOH agency under the supervision and control of the President it is part of the Office of the
President Presidents continued authority to reorganize extends to the DOH
d. Issuance of EO 102 well-within the constitutional power of the President
e. DOH Secretary alter ego of the President presumed to be the acts of the President Members
of the Cabinet at all times subject to the disposition of the President acts of the DOH Secretary
are clearly authorized by the President
f. Reorganization was made in good faith none of the petitioners were removed from public service
none was dismissed
g. Petitioners allegations are too general and unsubstantiated
h. Even though petitioners allegations were adequately proven, the validity of EO 102 would not be
affected validity is determined from its general purpose and efficiency to accomplish the end
desired, not from its effects in a particular case
i. Petitioners failed to assert substantial interest requires direct injury as a result of enforcement

3. BCDA v. COA [580 SCRA 295 (2009)]

Ponente: Carpio, J
Facts: The Congress passed RA 7227 that created the Bases Conversion and Development Authority
(BCDA). Section 9 and 10 of RA 7227 gives power to the Board of Directors (board) which includes the
forming of the organizational structure and the adoption of the compensation and benefit scheme that is
likened to that of Bangko Sentral ng Pilipinas. The board followed BSPs scheme and provided P10,000 for
year-end benefit (YEB) to the contractual, regular and permanent employees of BCDA. The board then
increased the YEB to P30,000. Aside from the contractual, regular and permanent employees they also gave
the full-time consultants the YEB. THe Commission on Audit disallowed the granting of the YEB to Board
members and full-time consultants. This being that they are not salaried officials of the government.
Issue/s: 1. WON the Board is entitled to the YEB of BCDA
2. WON the disallowing of the grant of YEB is unconstitutional
Held: 1. No. The board is not entitled to the YEB of BCDA. Section 9 of RA 7227 states that Board
members are entitled to a per diem of not more than P5000 for every board meeting. However, the per diem
collected per month does not exceed the equivalent of four meetings. A DBM Circular Letter states that,
Members of the Board of Directors of agencies are not salaried officials of the government. As non-salaried
officials they are not entitled to YEB unless expressly provided by law. RA 7227 does not state that the
Board members are entitled to YEB.
2. No. The Board alleges that the decision of not granting the board with the YEB is
unconstitutional for it is not consistent with Article II Sections 5 and 18. They said that providing the YEB is
consistent to these articles. Article II is a statement of general ideological principles and policies. It is not a
source of enforceable rights. These are not self-executing provisions.
Disposition: Petition was partially granted with modifications that the Board members and full time
consultants of the BCDA are not required to refund the YEB they have already received

Section 1
1. People v. Gozo [53 SCRA 476 (1973)]
Fernando, J.
Facts:
Lorena Gozo purchased a house and lot located inside US Naval Reservation within the territorial
jurisdiction of Olongapo city.
She demolished the house and built another one it its place without securing a building permit from
the city mayor (because her neighbors and the assistant in the mayors office told her it was not needed)
Dec 29, 1966: A building inspector and a member of the police force apprehended 4 carpenters
working on said house and lot
Lorena Gozo was found guilty by the city court of Olongapo in violation of Municipal Ordinance No.
14, series of 1964.
The court of first instance in Zambales, on appeal, found her guilty on the above facts
Gozo elevated the case to CA questioning the validity of the ordinance in relation to the location of the
lot which is in the naval base.
Her contention was that her house was constructed within the naval bases leased to American armed
forces.

Issue: WoN the Municipal Ordinance is valid within the US naval base

Held: Yes.
Philippine govt. merely consents US to exercise jurisdiction in certain cases.
Philippine Government has not abdicated its sovereignty over the bases as part of the Philippine
territory or divested itself completely of jurisdiction over offenses committed therein.
Under terms of the treaty, US government has prior of preferential but not exclusive jurisdiction
on such offenses.
Philippine Government retains not only jurisdictional right not granted, but also all such ceded
rights as the US military authorities for reasons of their own decline to make us of.
Auto-limitation: Property of a state-force due to which it has the exclusive capacity of legal self-
determination and self-restriction. A state then, if it chooses to, may refrain from the exercise of
what otherwise is illimitable competence
The fact that the lot in question, even if it is located within a US naval base, is still within
Philippine territory. Philippines has sovereignty over it.

Ruling: Appealed decision is affirmed insofar as it found the accused guilty beyond reasonable doubt of a
violation of Municipal Ordinance No. 14 series of 1964.

2. Co Kim Cham v. Valdez Tan Keh [75 PHIL. 113 (1945)]

Facts:
This petition for mandamus in which petitioner prays that the respondent Judge Arsenio Dizon, be ordered to
continue the proceedings in civil case No. 3012 of said court, which were initiated under the regime of the so-
called Republic of the Philippines established during the Japanese military occupation of these Islands. Judge
Arsenio Dizon, refuses to take cognizance of the case because he argues that the proclamation issued on
October 23, 1944 by General Douglas McArthur had the effect of invalidating and nullifying all judicial
proceedings.
Issues:
1. Whether the judicial acts and proceedings of the courts existing in the Philippines under the
Philippine Executive Commission (PEC) and the Republic of the Philippines (ROP) were good and
valid and remained so even after the liberation or reoccupation of the Philippines by the United
States and Filipino forces.
2. Whether the proclamation of Gen. Douglas McArthur that all laws, regulations, and processes of any
other government in the Phil than that of the Commonwealth are null and void and without legal
effect in the areas of the Phil free of enemy occupation and control has invalidated all judgment and
judicial acts and proceedings.
3. Whether the said judicial acts and proceedings were not invalidated, the present court of
Commonwealth may continue proceeding the pending at the time of reoccupation.
Held:
1. YES. It was established in the case that the governments by the PEC and the ROP [ under the Japanese
Occupation] were de facto governments. It necessarily follows that the judicial acts and proceedings
of the courts of justice of those governments, which are not of a political complexion, were good and
valid, and, by virtue of the well-known principle of postliminy (postliminium) in international law,
remained good and valid after the liberation or reoccupation of the Philippines by the American and
Filipino forces under the leadership of General Douglas MacArthur. According to that well-known
principle in international law, the fact that a territory which has been occupied by an enemy comes
again into the power of its legitimate government of sovereignty, "does not, except in a very few cases,
wipe out the effects of acts done by an invader, which for one reason or another it is within his
competence to do.
2. NO. It upheld the doctrine in international law that a belligerent occupant is prohibited from
suspending the use of Courts of Law to assert and enforce their civil rights. The Court holds that the
proclamation was void and had not invalidated the judicial acts and proceedings of the courts of
justice in the Philippines. And that said judicial acts and proceedings were good and valid before and
are now good and valid after the reoccupation or liberation of the Philippines by the American and
Filipino forces.
3. YES. As stated in Executive Order of President McKinley to the Secretary of War on May 19, 1898, "in
practice, they (the municipal laws) are not usually abrogated but are allowed to remain in force and
to be administered by the ordinary tribunals substantially as they were before the occupation. This
enlightened practice is, so far as possible, to be adhered to on the present occasion." Furthermore, it
is a legal maxim, that excepting that of a political nature, "Law once established continues until
changed by the some competent legislative power. It is not change merely by change of sovereignty."
(Joseph H. Beale, Cases on Conflict of Laws, III, Summary Section 9, citing Commonwealth vs.
Chapman, 13 Met., 68.) Additionally, Executive Proclamation No. 37 also shows there is recognition of
the cases as the cases pending to the to-be-abolished Court of Appeals were being given to the
Supreme Court, acknowledging its continuity

3. In re Letter of Associate Justice Puno [210 SCRA 588 (1992)]

4. Republic v. Sandiganbayan [GR 104768 (2003)]

Ponente: Justice Carpio

Facts:
Antecedent Case: Following the EDSA Revolution, President Corazon Aquino issued Executive Order No. 1
creating the Presidential Commission on Good Government (PCGG) tasked to recover all ill-gotten wealth of
former President Ferdinand Marcos, his immediate family, relatives, subordinates, and close associates.
Accordingly, the Chairman, Jovito R. Salonga, created an AFP Anti-Graft Board (AFP Board) tasked to
investigate reports of unexplained wealth and corrupt practices by AFP personnel, whether in the active
service or retired.

In line with this, the AFP Board investigated Major General Josephus Q. Ramas for reports of unexplained
wealth. Findings of his properties included, a house and lot in Quezon City valued at P700,000 and a house
and lot in Cebu City having an area of 3,327 square meters. There was also military equipment/items and
communication facilities and money amounting to P2,870,000 and $50,000 US dollars found in the premises
of Elizabeth Dimaano, Major General Ramas alleged mistress. Sworn statement records disclosed that
Elizabeth Dimaano had no visible means of income and is supported by Ramas. The same confiscated items
were not found in the Major Generals Statement of Assets and Liabilities. Besides that, however, Ramas also
has an unexplained wealth of P104,134.60 disclosed in his Statement of Assets and Liabilities. After the
investigation, PCGG recommended the prosecution of Major General Ramas for violation of RA 3019 (Anti-
Graft and Corrupt Practices Act) and RA 1379 (The Act for the Forfeiture of Unlawfully Acquired Property).

Timeline of Events:
- 1 August 1987 PCGG filed a petition for forfeiture under RA 1379 against Ramas. Before Ramas could
answer the Petition, Solicitor General Francisco Chavez filed an Amended Complaint naming the
Republic of the Philippines as the petitioner , Ramas as the defendant, and Dimaano as the co-
defendant. He alleged that Ramas was the Commanding General of the Philippine Army until 1986
and Dimaano was a confidential agent of the Military Security Unit assigned as a clerk-typist for
Ramas from 1 January 1978 to February 1979.
- Ramas filed an Answer with Special and/or Affirmative Defenses and Compulsory Counterclaim
denying his ownership of the mansion in Cebu and all other items confiscated in the house of
Dimaano.
- Dimaano filed her own Answer admitting her employment as clerk-typist and ownership of the items.
- 9 November 1988, petitioner asked or a deferment of the hearing for lack of preparation for trial and
absence of witnesses.
- 13 April 1989, petitioner filed a motion for leave to amend the complaint saying Dimaano alone
acquired the properties subject to forfeiture.
- 17 April 1989, petitioner proceeded with presenting the case and 3 witnesses, only to ask for a
postponement of the trial again.
- 28 September 1989, petitioner manifested its inability to trial because of absence of witnesses and
further evidence to present. The Sandiganbayan noted that the petitioner has delayed the case for a
over a year because of its postponements.
- 23 March 1990, petitioner admitted its inability to present further evidence
- 18 May 1990, petitioner again expressed its inability to proceed to trial and the Sandiganbayan
granted petitioner 60 days to file an appropriate pleading. While respondents filed their motions to
dismiss based on Republic v. Migrino stating that the PCGG has no jurisdiction to investigate military
officers without showing that they are subordinates of Marcos.
- 18 November 1991, The Sandiganbayan dismissed the case for lack of merit and ordered the return of
the confiscated items to Elizabeth Dimaano.
- 4 December 1991, petitioner filed for its Motion for Reconsideration which was denied on 25 March
1992.

Issue/s:
1.) WON the PCGG has jurisdiction to investigate Ramas and Dimaano.
2.) WON the Sandiganbayan was wrong in concluding the evidence gathered lack merit and there was no
 showing of collusion, conspiracy or relationship by consanguinity or affinity by and between Ramas
and Dimaano.
3.) WON the items confiscated from the house of Dimaano was illegally seized and therefore not
admissible in court.
Ruling:
1.) NO. PCGG has no jurisdiction because they can only investigate the unexplained wealth and corrupt
practices of AFP personnel under either of the two categories:
a.) AFP personnel who have accumulated ill-gotten wealth during the administration of Marcos
by being his immediate family member, relative, subordinate or close associate
b.) AFP personnel involved in other cases of graft and corruption provided the President assigns
their cases to PCGG.
And the PCGG failed to prove that Ramas was a subordinate of Marcos, his mere position does not
automatically make him a subordinate. PCGGs attempt to differentiate Migrinos case was
unsuccessful because unlike in Migrino, where the AFP Board conducted the investigation pursuant
to EO Nos. 1,2, and 14, PCGG recommended that Ramas be prosecuted for violation of RA 3019 and
1379, instead of EO 1. In fact the Ombudsman actually has the jurisdiction to conduct the primary
investigation, not the PCGG.
2.) NO. Petitioner only has itself to blame for the lack of presentation of the evidence. They were given
ample time (4 years pending) to collect and present their case, but they kept on delaying the process.
3.) YES. The items seized in the search were not described in the warrant and there was no legal basis to
seize these items without showing that these items could be subject of warrantless search and
seizure. The warrant cannot be a basis to seize and withhold the items from the possesor.

Notes:
PCGG was vested with the powers to
1. Conduct investigation
2. To promulgate rules and regulations
*as may be necessary in order to accomplish and carry out the purposes of the order

Separate Opinion by Justice Puno:

The Bill of Rights was essentially inoperative during the time of the seize, therefore Dimaano cannot
invoke the right against unreasonable search and seizure. While this is true, the right against unreasonable
search and seizure is a natural right which cannot be denied by the government. Also, even if the Bill of Rights
were not operative, individuals were still under the protection of the International Covenant on Civil and
Political Rights and the Universal Declaration of Human Rights.

Separate Opinion by Justice Vitug:

We are still signatories of the Universal Declaration of Human Rights and are therefore entitled to the
right against arbitrary deprivation of ones property.

Separate Opinion by Justice Tinga:

That while the Aquino government reorganized the government, it did so to protect and stabilize the
revolutionary government and not for the purpose of trampling upon the fundamental rights of the people.

5. VFP v. Reyes [483 SCRA 526 (2006)]

Veterans Federation of the Philippines vs Reyes
Ponente: Justice Chico-Nazario

Facts:
VFP is a corporate body organized under RA No. 2640. Respondent, Angelo Reyes is the Secretary of the DND.
Reyes issued a circular asking for an audit of the records of VFP. The circular also states that this is valid given
that under RA 2640, VFP is under the supervision (overseeing power and making sure subordinates perform
duty) and control (power to alter, modify or nullify what a subordinate has done in performance of his
duties.) of the Secretary of National Defense. VFP filed a Petition for Certiorari with Prohibition to ask the
court to prevent the audit because the VFP is a private corporation and cannot be audited by the government.

Issue: WON VFP created by law is a public office, considering that it does not possess a portion of the
sovereign functions of the government and considering further that, it has no budgetary appropriation from
DBM and that its funds come from membership dues.

Ruling
1. VFP is a public office. In Laurel vs Desierto, public office is defined as right, authority and duty, created
and conferred by law, by which, for a given period, is invested with some portion of the sovereign functions of
the government, to be exercised for the benefit of the public. Included in specific activities that can be
classified as sovereign function are those that either promote social justice or stimulate patriotic sentiments.
VFP whose activities protect the interests of war veterans promotes social justice and rewards patriotism,
thus having sovereign functions.
2. VFPs claim that the DND did not micromanage VFP in the past doesnt have any bearing. Laws are not
repealed by disuse, custom or practice to the contrary RA 2640 specifically places VFP under the control and
supervision of the DND and this law cannot be rendered invalid just because the DND didnt micromanage the
VFP in the past.
3. The DBM opinion that VFP is a non-government organization and that it hasnt been receiving any funds
from the DBM is persuasive as DBM is an expert on determining what various government agencies and
corporations are. However, its opinion is overcome by the opinion of the DND who is clearly more of an expert
with respect to the determination of the entities under it, so VFP is a public office under the supervision and
control of the DND.

6. Javier v. Sandiganbayan [599 SCRA 324 (2009)]

JAVIER VS. SANDIGANBAYAN

Ponente: Justice Peralta

FACTS:
Petitioner was appointed as private sector representative of the National Book Development Board. Part of
her functions is to attend book fairs to establish linkages with international book publishing bodies. She was
given P139,199.00 as traveling expenses for a trip to Madrid to attend a book fair, however, she was not able
to attend said book fair. Despite her cancellation of the trip, she was not able to liquidate or return the cash
advance that was given to her by NBDB.

Petitioner was then charged with Malversation of Public Funds under Art. 217 of the RPC for not liquidating
the cash advance granted to her for the trip. Petitioner failed to submit a counter-affidavit during the
preliminary investigation, thus, the Ombudsman found probable cause to indict the petitioner.

During the prosecution, petitioner pleaded not guilty. Thereafter, she delivered the money averring that as a
private sector representative, she
ISSUES:

RULING:
7. MIAA v. CA [495 SCRA 591 (2006)]

MANILA INTERNATIONAL AIRPORT AUTHORITY v. COURT OF APPEALS

July 20, 2006
CARPIO
FACTS:
Petitioner Manila International Airport Authority (MIAA) operates the Ninoy Aquino International
Airport (NAIA) Complex in Paranaque City under the Revised Charter of the Manila International Airport
(E.O. No. 903) issued by Pres Marcos in July 1983
o EO 909 and 298 amended the MIAA charter
The MIAA charter included the following:
o MIAA is tasked with administering the land, improvements and equipment within the NAIA complex, which
is approximately 600 hectares of land.
o The charter provides that no portion of the land transferred to MIAA shall be disposed of through sale or
any other mode unless approved by the President of the Philippines.
21 March 1997 Office of the Government Corporate Counsel (OGCC) issued Opinion No. 061:
o it opined that the Local Government Code of 1991 withdrew the exemption from real estate tax granted to
MIAA as provided under Sec 21.
28 June 2001 MIAA received a copy of the Final Notices of Real Estate Delinquency from the City of
Paranaque of the taxable years from 1992 2001.
The tax totaled to P624,506,725.42 for the tax due and the penalty.
17 July 2001 the Mayor of Paranaque threatened to sell at a public auction the Airport Lands and
Buildings should MIAA fail to pay the real estate tax delinquency.
9 Aug 2001 OGCC clarified Opinion No. 061 and pointed out that Sec 206 of the Local Government Code
requires persons exempt from real estate tax to show proof of exemption and Section 21 of the MIAA Charter
is the proof.
1 Oct 2001 MIAA filed petition for prohibition and injunction with prayer for preliminary injunction or
temporary restraining order. MIAA sought to restrain the City of Paranaque from imposing real estate tax on,
levying against, and auctioning for public sale the Airport Lands and Building
5 Oct 2001 CA dismissed the petition because MIAA filed it BEYOND the reglementary period of 60-days
and subsequently denied the MR of MIAA on 27 Sept 2002
5 Dec 2002 MIAA filed petition for review
23 Jan 2003 the City of Paranaque posed notices of auction sale at the Barangay Halls of several
barangays and published it in THE PHILIPPINE DAILY INQUIRER
o In the notice, it announced that the highest bidder will obtain the auctioned land on 7 Feb 2003
6 Feb 2003 a day before the auction, MIAA filed an Urgent Ex-Parte and Reiteratory Motion for the
Issuance of a TRO and was granted the very next day (7 Feb 2003)
PETITIONER (MIAA)
The main contention of MIAA is that although the Airport Lands and Buildings is under the name of MIAA,
it CANNOT claim ownership because according to MIAA, it is the Republic of the Philippines who owns the
said land.
MIAA invokes the principle that the government cannot tax itself and that the reason for tax exemption of
public property is that its taxation would not inure to any public advantage since the tax debtor is also the
tax creditor
RESPONDENTS (CA)
CA invoke Sec 193 of Loval Government Code expressly withdrew the tax exemption privileges of
government-owned and controlled corporation (GOCC)
 MIAA cannot claim that they are exempted because an international airport is not among the exceptions
mentioned in Sec 193 of the Local Government Code.
Cite Airport v Marcos Local Government Code has withdrawn exemption from real estate tax granted to
INTERNATIONAL AIR PORTS,
MIAA has already paid some of the real estate tax assessments, therefore it is now ESTOPPED from
claiming that the Airport Lands and Buildings are exempt from real estate tax.
ISSUE:
1. Whether the Airport Lands and Buildings of MIAA are exempt from real estate tax under existing
laws. YES
HELD/RATIO:
1. MIAA is not a Government-Owned or Controlled Corporation
Respondents argue that MIAA is a GOCC and is not exempt from real estate tax
GOCC refers to any agency organized as a stock or non-stock corporation, vested with functions relating
to public needs whether governmental or proprietary in nature.
o Owned by the government DIRECTLY or THROUGH its instrumentalities
o In stock corporations, it must be to the extent of at least 51 percent of its capital stock
MIAA is NOT organized as a STOCK CORPORATION because it has no capital stock divided into shares and
it has no stockholders
o Sec 10 of MIAA charter states that it is not
o Sec 3 of Corp code disqualifies MIAA as a stock corporation
o Sec 11 MIAA remits 20% of gross operating income to National treasury
MIAA is A GOVERNMENT INSTRUMENTALITY vested with corporate powers to perform efficiently its
governmental functions.
o Instrumentality refers to any agency of the National Government, not integrated within the department
framework, vested with special functions or jurisdiction by law, endowed with SOME if not ALL corporate
powers, administering special funds, and enjoying operational autonomy, usually through a charter.
Similarly, Mactan International Airport Authority, The Philippine Ports Authority, UP and BSP exercise
corporate powers but are not organized as stock or non-stock corporations.
In order for Local Government Code to tax, it must be EXPRESSLY STATED in laws empowering LG to tax
National Government.
Airport Lands and Buildings of MIAA are Owned by the Republic
The Airport Lands and Buildings are of PUBLIC DOMAIN
Art 419, 420, 421, 422 of Civil Code all describe what constitute as properties of public domain
o Roads, canals, river, torrents, PORTS and bridges constructed by the state (Art 420)
As properties of public domain, they indisputably belong to the State or the Republic of the Philippines.
Airport Lands and Buildings are Outside the Commerce of Man
Properties of public dominion, cannot be disposed of or even leased by the municipality to private parties.
Also, it cannot be the subject of an auction sale.
PUBLIC LAND LAW
o Sec 83 and 88 pertain to the Presidents power of withdrawing public land for public use.
MIAA is a Mere Trustee of the Republic
Sec 48, Chapter 12, Book I of the Administrative Code allows instrumentalities like MIAA to hold title to
real properties owned by the Republic.
Only the President can sign a deed of conveyance
Transfer to MIAA was meant to implement Reorganization
The MIAA Charter transferred the Airport Lands and Buildings to MIAA without the Republic receiving
cash, promissory notes or even stock
 Whereas clause of the MIAA charter explain the rationale for the transfer the purpose was to reorganize
a division in the Bureau of Air Transportation into a separate and autonomous body
Real Property Owned by the Republic is Not Taxable
Section 234(a) of the Local Government Code exempts from real estate tax any real property owned by
the Republic of the Philippines
Related to Section 133 (o) where it prohibits local governments from imposing taxes on government
owned properties
MIAA, as a government INSTRUMENTALITY, is not a taxable person under Sec 133 (o).
However, the other parts of the Airport that are being leased to private entities are not exempt from tax.
DISPOSITIVE PORTION:
WHEREFORE, we GRANT the petition.
Set Aside the assailed Resolutions of the CA.
We DECLARE the Airport Lands and Buildings of the Manila International Airport Authority EXEMPT
from real estate tax
We declare VOID all the real estate tax assessments, including the final notices of real estate tax
delinquencies
Declare VOID the assailed auction sale.
MAJORITY v Justice Tinga (DISSENTING):
MAJORITY MINORITY

The phrase unless otherwise Sec 193 of Local Government Code

provided by this code is exercised in withdrew the tax exemption of ALL
sec 133 (o) where it expressly persons juridical or natural
prohibited the taxing of national
government

The determinative test should be Determinative test whether MIAA is

whether MIAA is a national a juridical person or not
government instrumentality under Sec
133 (o) of the Local Government Code

Sec 193 and 234 may be examined in

ISOLATION from Sec 133 (o) to
ascertain MIAAs claim if exemption.

Directly contradicts section 133 (o) Exemptions are limited to three

because it would create absurdities
it will make the national government,
which is a juridical person, subject to
tax by the local governments since the
national government is not included in
the enumeration of exempt entities
provided
classes only:
1. Local water districts
2. Corporations registered in RA
6938
3. Non-stock and non-profit hospitals
and educational institutions
1. There is no conflict whatsoever
between the laws
2. Sec 133 limits the grants to local
governments the power to tax. Local
governments have no power to tax the
National Government.
Since Sec 133 precedes Sections 193
and 234, the later provisions should
prevail and that there is an
irreconcilable conflict between the
laws mentioned.

The administrative code does not Government-owned or Controlled

distinguish between one incorporated
under the corporation or under a
special charter. Where the law does
not distinguish, courts should not
distinguish
corporations should apply only to
those under the corporation code and
NOT corporations created by special
charters.

8. Funa v. MECO [GR 193462 (2014)]

9. Philippine Society for the Prevention of Cruelty to Animals v. COA

[GR 169752 (2007)]

PONENTE: AUSTRIA-MARTINEZ, J.
FACTS:
On January 19, 1905, Philippine Society for the Prevention of Cruelty to Animals (PSPCA) was
incorporated as a juridical entity by virtue of Act No. 1285 by the Philippine Commission in order to
enforce laws relating to the cruelty inflicted upon animals and to perform all things which may tend
to alleviate the suffering of animals and promote their welfare.
At the time of its establishment, the Corporation Law was not yet in existence.
In order to promote animal welfare, PSPCA was initially imbued with power to apprehend violators
of animal welfare laws. Also, PSPCA was to share 50% of the fines imposed and collected through its
efforts pursuant to the violations of related laws.
However, Commonwealth Act No. 148 recalled the said powers. President Quezon then issued
Executive Order No. 63 directing the Commission of Public Safety and Mayors of chartered cities and
every municipal president to detail and organize special officers to watch, capture, and prosecute
offenders of criminal-cruelty laws.
On December 1, 2003, an audit team from the Commission on Audit visited petitioners office to
conduct a survey.
Petitioner contends:
PSPCA was a private entity not under COAs jurisdiction. It exercises no governmental
function.
Nowhere in its charter is it indicated that it is a public corpration.
No governmental function
It was granted to be tax-exempt. This fact strengthens its position as a private institution
Employees are covered by SSS not by GSIS
No financial assistance from the government
 No government appointee/representative in its Board of Trustees
Not subject to control / approval by any government agency
Respondents assert:
PSPCA is created by a special charter, thus a government corporation
It exercise sovereign powers
Office of the President exercises supervision (Administrative Code)
PSPCA is a government instrumentality
Attached to Department of Agriculture
ISSUE: Whether or not PSPCA qualifies as a government agency that may be subject to COAs audit authority
HELD: NO. It is not a government agency. Thus, it is not subject to COAs audit
RATIO:
The charter test cannot be applied. Charter test had been introduced by the 1935 Constitution and
not earlier, the test cannot be applied to PSPCA which was incorporated on January 19, 1905. Laws,
generally, have no retroactive effect unless the contrary is provided. None of the exceptions apply in the
instant case.
Charter test: Those with special charters are government corporations.
PSPCAs charter shows that it is not subject to control or supervision by any agency of the State. It
may adopt by-laws for its internal operations.

PSPCAs employees are registered and covered by the SSS at the latters initiative and not through the
GSIS.
MOST RELEVANT:
The fact that a private corporation is impressed with public interest does not make the entity a public
corporation. They may be considered quasi-public corporations which are private corporations that
render public service, supply public wants and pursue other exemplary objectives. The true criterion
to determine whether a corporation is public or private is found in the totality of the relation of the
corporate to the State. It is public if it is created by the latters own agency or instrumentality,
otherwise, it is private.

Section 2
1. Tan ada v. Angara [272 SCRA 18 (1997)]
Ponente: Panganiban , J.
FACTS
The Petitioners argue that the WTO requires the Philippines to place national and products of
member-countries on the same footing as Filipinos and local products and the WTO intrudes, limits,
and /or impairs the constitutional powers of both Congress and the Supreme Court. On April 15, 1994,
the Secretary of the Department of Trade and Industry Respondent Rizalino Navarro had signed the Final
Act Embodying the Results of the Uruguay Round of Multilateral Negotiations (Final Act, for brevity). By
signing the act the Philippines had agreed to submit the WTO Agreement for the consideration of their
respective competent authorities, to seek approval of the Agreement in accordance with their procedures,
and to adopt the Ministerial Declarations and Decisions.
The President of the Philippines had sent two letters to the Senate. The first stated that the Uruguay
Round Final Act is submitted to the Senate. The second letter stated that the Uruguay Round Final Act,
the Agreement Establishing the World Trade Organization, the Ministerial Declarations and Decisions,
and the Understanding on Commitments in Financial Services are hereby submitted to the Senate. It was
for its concurrence pursuant to Section 21, Article VII of the Constitution.
 On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which resolves that the
Senate concurs the ratification by the President of the Philippines of the Agreement Establishing the
World Trade Organization.
On December 16, 1994, the President of the Philippines signed the Instrument of Ratification.
The petitioners filed for nullification of the WTO agreement on grounds of unconstitutionality.

ISSUES:
1.) Whether or not the Court has Jurisdiction over the Controversy.
2.) Whether or not the Provisions of the WTO agreement and its three annexes contravene Section 19,
Article II, and Sections 10 and 12, Article XII, of the Philippine Constitution

HELD:
1. Yes, the Judiciary has the duty to solve the dispute relating to an action of the legislative branch that
infringes the Constitution. The Courts jurisdiction to adjudicate the matters in the petition are set out in
the 1987 Constitution. It states that the Judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable and enforceable, and to determine
whether 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.
2. No, the WTO Agreements provisions and its three annexes do not contravene the Section19, Article II, and
Sections 10 and 12, Article XII of the Philippine Constitution. The respondents countered that the
Charters provisions are not self-executing and are general policies, there nationalistic portions of the
Constitution invoked by petitioners are related to other relevant provisions of Article XII, particularly
Section 1 and 13, if read properly, the cited WTO clauses do not conflict with the Constitution and the
WTO Agreement contains sufficient provisions to protect developing countries like the Philippines from
the harshness of sudden trade liberalization. The Constitution maybe bias in favor of Filipino goods,
services, labor and enterprises, but it recognizes the need for business exchange with the rest of the
world on the bases of equality and reciprocity and limits protection of Filipino enterprises only against
foreign competition and trade practices that are unfair. It does not intend to pursue an isolationist policy,
and does not discourage the unlimited entry of foreign goods, services and investments into the country.

Ruling:
The Petition is dismissed for lack of merit

2. Bayan v. Zamora [GR 138579 (2000)]

FACTS:
The Republic of the Philippines and the United States of America entered into an agreement called
the Visiting Forces Agreement (VFA). The agreement was treated as a treaty by the Philippine
government and was ratified by then-President Joseph Estrada with the concurrence of 2/3 of the
total membership of the Philippine Senate.
The VFA defines the treatment of U.S. troops and personnel visiting the Philippines. It provides for the
guidelines to govern such visits, and further defines the rights of the U.S. and the Philippine
governments in the matter of criminal jurisdiction, movement of vessel and aircraft, importation and
exportation of equipment, materials and supplies.
Petitioners argued, inter alia, that the VFA violates 25, Article XVIII of the 1987 Constitution, which
provides that foreign military bases, troops, or facilities shall not be allowed in the Philippines
 except under a treaty duly concurred in by the Senate . . . and recognized as a treaty by the other
contracting State.

THE ISSUE: Was the VFA unconstitutional?

THE RULING:
[The Court DISMISSED the consolidated petitions, held that the petitioners did not commit grave abuse of
discretion, and sustained the constitutionality of the VFA.]

NO, the VFA is not unconstitutional.

Section 25, Article XVIII disallows foreign military bases, troops, or facilities in the country, unless the
following conditions are sufficiently met, viz: (a) it must be under a treaty; (b) the treaty must be duly
concurred in by the Senate and, when so required by congress, ratified by a majority of the votes cast by the
people in a national referendum; and (c) recognized as a treaty by the other contracting state.

There is no dispute as to the presence of the first two requisites in the case of the VFA. The concurrence
handed by the Senate through Resolution No. 18 is in accordance with the provisions of the Constitution . . .
the provision in [in 25, Article XVIII] requiring ratification by a majority of the votes cast in a national
referendum being unnecessary since Congress has not required it.

This Court is of the firm view that the phrase recognized as a treaty means that the other contracting party
accepts or acknowledges the agreement as a treaty. To require the other contracting state, the United States of
America in this case, to submit the VFA to the United States Senate for concurrence pursuant to its
Constitution, is to accord strict meaning to the phrase.

Well-entrenched is the principle that the words used in the Constitution are to be given their ordinary
meaning except where technical terms are employed, in which case the significance thus attached to them
prevails. Its language should be understood in the sense they have in common use.

Moreover, it is inconsequential whether the United States treats the VFA only as an executive agreement
because, under international law, an executive agreement is as binding as a treaty. To be sure, as long as the
VFA possesses the elements of an agreement under international law, the said agreement is to be taken
equally as a treaty.
The records reveal that the United States Government, through Ambassador Thomas C. Hubbard, has stated
that the United States government has fully committed to living up to the terms of the VFA. For as long as the
United States of America accepts or acknowledges the VFA as a treaty, and binds itself further to comply with
its obligations under the treaty, there is indeed marked compliance with the mandate of the Constitution.

3. Saguisag v. ES [GR 212426 (January 2016)] and MR (July 2016)

4. Bayan v. Romulo [GR 159618 (2011)]
5. Deutsche Bank v. CIR [GR 188550 (2013)]

Ponente: CJ Sereno
Facts:
Deutsche Bank AG Manila Branch (DB Germany) erroneously paid 15% Branch Profit Remittance Tax (BPRT)
of its Regular Banking Unit (RBU) net income instead of the 10% BPRT preferential rate under the RP-
Germany Tax Treaty to the BIR. DB Germany subsequently applied for a refund of the excess 5% BPRT. This,
however, was denied by the Court of Tax Appeals Second Division (CTA 2nd Div) because DB Germany did not
file the tax treaty relief with the International Tax Affairs Division (ITAD) prior to paying its BPRT, and
because it allegedly violated the 15 day period mandated under the BIRs Revenue Memorandum Order No.
1-2000 (RMO No 1-2000). The CTA 2nd Div also relied on the previous ruling in the Mirant case where the
CTA En Banc ruled that before the benefits of the tax treaty may be extended to a foreign corporation wishing
to avail itself thereof, the latter should first invoke the provisions of the tax treaty and prove that they apply to
the corporation. This ruling was later upheld by the CTA En Banc.

Issues
a. Is the Mirant case a binding judicial precedent? NO
b. Does the RP-Germany Tax Treaty take precedence over RMO 1-2000? YES
c. Does RP-Germanys failure to apply for tax relief prior to paying its BPRT bar it from claiming a
refund on the excess 5% payment? NO
d. Is DB Germany entitled to a refund? YES

Ruling
a. The Mirant case is merely a minute resolution and not a binding precedent.
b. Under Sec. 2, Article II of our Constitution, the Philippines adheres to the general principles of
international law as part of the law of the land. Consequently, the BIR must not impose additional
requirements that that would negate the availment of the reliefs provided for under international
agreements. More so when the RP-Germany Tax Treaty does not provide for any prerequisite for the
availment of the benefits under the said agreement. Likewise, there is nothing in RMO No. 1-2000
which would indicate a deprivation of entitlement to a tax treaty relief for failure to comply with the
15-day period.
c. Non-compliance with the 15-day period for prior application should not operate to automatically
divest entitlement to the tax treaty relief especially in claims for refund. It could not have applied for
a tax treaty relief within the period prescribed precisely because it erroneously paid the BPRT not on
the basis of the preferential tax rate under the RP-Germany Tax Treaty, but on the regular rate
prescribed by the National Internal Revenue Code (NIRC) of the Philippines. Therefore, the fact that
DB Germany invoked the provisions of the treaty when it requested for a confirmation from ITAD
before filing an administrative claim for a refund should be deemed substantial compliance with RMO
No. 1-2000.
d. Since DB Germany substantially complied with RMO No. 1-2000, there is no reason to deprive the the
former of the benefit of a preferential tax rate of 10% BPRT in accordance with the RP-Germany Tax
Treaty.

6. CBK Power Company v. CIR [746 SCRA 93 (2015)]

Ponente: Justice Perlas-Bernabe

Facts:

This case is a consolidated petitions for review on certiorari filed with the Supreme Court, seeking to reverse
the decision and resolution of Court of Tax Appeals En Banc amending the decision of granting CBK Power
Company Limited (CBK Power) a refund of its excess payment for withholding tax for taxable years 2001-
2003.

CBK Power is a limited partnership that is primarily engaged in the development and operation of the
Caliraya, Botocan, and Kalayaan hydroelectric power-generating plants in Laguna (CBK Project). To fund the
CBK Project, CBK Power obtained loans from several foreign banks.

In February 2001, CBK Power borrowed money from Industrial Bank of Japan, Fortis-Belgium, Raifessen
Bank, and Mizuho Bank for which it remitted payments from May 2001-May 2003. It allegedly withheld final
taxes from said payments by rates of 15% for Fortis-Belgium, Fortis-Netherlands, and Raifessen Bank, and
20% for Industrial Bank of Japan and Mizuho Bank, and paid the same to the Bureau of Internal Revenue.

CBK Power invoked the relevant tax treaties between the Philippines and the respective countries in which
the banks is a resident, the interest income derived by the said banks are subject only to a tax rate of 10%.
Accordingly, CBK Power filed a claim for refund on April 14, 2003 of its excess taxes allegedly erroneously
withheld and collected for the years 2001 and 2002. Another claim for refund was filed on March 4, 2005 for
the year 2003. But these claims were allegedly ignored by the Commissioner of Internal Revenue which
pushed the petitioner to take the case to the Court of Tax Appeals.

A total of 6,393,267.20 was withheld for the taxable year of 2001; 8,136,174.32 for the year 2002; and
1,143,517.21 for 2003. All three cases were consolidated in a Resolution on August 3, 2005.

CTA First Division granted the petitions and ordered a refund of a total a total amount of 15,672,958.42php
and categorically declared that a ruling from the International Tax Affairs Division (ITAD) is not a prerequisite
for the entitlement of the tax relief sought by the CBK Power. It cited the DA-ITAD Ruling No. 099-03, issued
by the BIR confirming the petitioners claim that the interest payment made to Industrial Bank of Japan and
Raifessen Bank were subject to a final withholding tax rate of only 10%. Another DA-ITAD Ruling No. 126-03
confirmed that interest payment to Fortis-Belgium are also subject to the same tax rate as mandated by the
amended RP-Belgium Tax Treaty. The same tax rate will also apply to the payments made to Fortis-
Netherlands.

The Commissioner filed a motion for reconsideration and the CTA First Division amended its decision and
reduced the amount of refund fto 14,835,720.39php, on the ground that CBK Power failed to obtain a ruling
from ITAD with respect to its transactions with Fortis-Netherlands. The CTA First Division then cited Mirant
Operations Corporation v. Commissioner of Internal Revenue, where the court declared the need to obtain ITAD
ruling before availing the preferential tax rate.

CBK filed a motion for reconsideration but was denied due to lack of merit. CBK Power elevated their case to
the CTA En Banc and filed for petition for review. The Commissioner likewise filed his own motion for review.

The respondent argues that the petitioner failed to exhaust all administrative reliefs before turning to a court
and that the claims for refund were filed beyond the 2-year filing period prescribed by RMO 1-2000.

CTA En Banc denied the petition and affirmed the decision of CTA First Division that a prior application is
indeed a prerequisite to avail a preferential tax rate, under the Revenue Memorandum Order 1-2000. CTA En
Banc also held that the Mirant case has no binding effect as it was only a minute resolution and that the
petitions of CBK Power were within the 2-year period. Also, they affirmed that it was proper for CBK Power to
have filed the said petitions without awaiting the resolutions of its administrative claims for refund before the
BIR or else the 2-year filing period would have lapsed.

CBK Powers motion for partial reconsideration and the Commissioners motion for reconsideration of the
decision of CTA First Division were denied for lack of merit and hence, the petition.

Issue/s: WON a ruling from ITAD is a prerequisite to the entitlement of a preferential tax rate

Ruling:
No.
The Philippine Constitution explicitly provides the adherence to the general principles of international law.
The international principle of pacta sunt servanda or agreements must be kept demands the performance of
good faith on the part of states that enter into an agreement.

The issue of whether the failure to comply with RMO 1-2000 will result to the forfeiture of the availment of
preferential tax rate, was addressed in the case of Deutsche Bank AG Manila Branch v. Commissioner of Internal
Revenue, where the court held that the obligation to comply with tax treaty must take precedence over the
objective of RMO 1-2000. It should be noted that there is not a specific provision in ant tax treaty that
deprives a corporation from availing the tax rate relief if they fail to follow RMO 1-2000.

The court agrees with CTA En Bancs ruling in debunking the claim of the respondent that the petitioner failed
to exhaust all the administrative remedies; had the CBK Power awaited the Commissioners action, the
petitioners would have lost their right to file for the refund because the 2-year period would have come to an
end. There was no violation of Section 229 of National Internal Revenue Code as it only requires that an
administrative be priorly filed, which is exactly what the petitioners did.
7. Lim v. ES [GR 151445 (2002)]

Facts:
In line with President Gloria Macapagal Arroyos pledge to render help to the US in its campaign
against global terrorism, an arrangement for a joint military exercise known as RP-US Balikatan 02-1
Exercises (Balikatan 02-1) was entered between the two countries under the Visiting Force Agreement(VFA)
and pursuant to the Mutual Defense Treaty(MDT). The VFA was a formal agreement in relation to the
treatment of US personnel vising the Philippines. The US government identified the Abu Sayyaf Group(ASG) as
a terrorist group link with Al Qaeda who are responsible for the 911 attack.
Arthur D. Lim(Lim) and Paulino P. Ersando filed a petition for certiorari and prohibition attacking the
constitutionality of Balikatan-02-1 since it allows the US military to participate in areas of armed conflict in
Mindanao.. Lim alleged that Balikatan-02-1 is not covered by the MDT because it only provides for mutual
military assistance in case of armed attack by an external aggressor against the Philippines or the US. They
alleged that the ASG is not an external armed force. Lim also claim that the Visiting Forces Agreement (VFA)
does not authorize American Soldiers to engage in combat operations in Philippine Territory.

Issue/s:
1. WON Balikatan 02-1 is covered by the VFA. (Yes)
2. WON the Balikatan 02-1 is constitutional. (Yes)
Ruling:
1. Yes. The VFA permits US personnel to sojourn in the Philippines to conduct Activities, which was left
undefined to give leeway in negotiation. The activities are subject to the approval of the Philippine
government and US personnel are prohibited from doing anything inconsistent with the spirit of VFA and
from any particular political activity. In this case, the Balikatan 02-1, which provides mutual anti-terrorism
advising, assisting and training exercise, falls under the sanctioned activities under the VFA. These activities
under the Balitakan 02-1 are considered combat-related activities not combat itself.

2. Yes, 2. Yes. It is constitutional given the fact that only combat-related activities are being done. The
1987 Constitution contains key provisions that determines the extent of foreign presence in the Philippines.
Thus in the Declaration of Principles and State Policies, it provides that:

SEC. 2. The Philippines renounces war as an instrument of national policy, adopts the generally accepted
principles of international law as part of the law of the land and adheres to the policy of peace, equality,
justice, freedom, cooperation, and amity with all nations.
SEC. 7. The State shall pursue an independent foreign policy. In its relations with other states the paramount
consideration shall be national sovereignty, territorial integrity, national interest, and the right to self-
determination.
These provisions set a dislike towards foreign military presence or foreign influence in general. Thus, foreign
troops are allowed only by way of direct exception.

Given this, a conflict arises between our fundamental law and our treaty obligations. From the
perspective of public international law, a treaty is favored over municipal law pursuant to the principle of
pacta sunt servanda. Further, a party to a treaty is not allowed to invoke the provisions of its internal law as
justification for its failure to perform a treaty. However, this is contrary to the 1987 Constitution which
provides that:

The Supreme Court shall have the following powers:

(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may
provide, final judgments and order of lower courts in:
(A) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law,
presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.

Notes: On the issue on WON the American troops are engaged in combat alongside Filipino soldiers under the
guise of an alleged training and assistance exercise, the SC cannot take judicial notice because it is a question
of fact, thus it is not fit for a special civil action for certiorari. Furthermore, As a rule, we do not take
cognizance of newspaper or electronic reports per se for the simple reason that facts must be established in
accordance with the rules of evidence.

8. Shangri-La v. Developers Group [GR 159938 (2006)]

Ponente: Garcia, J.

Facts:
DGCI alleges that they own the Shangri-La mark and S logo. They claim that they have registered
ownership of these elements with the Bureau of Patents, Trademarks and Technology Transfer back in Oct.
18, 1982. Since then they have used it on their restaurant businesses. The Kuok Family, on the other hand, has
operated a series of hotels and hotel-related functions as far back as 1969. It was 1962 that they first adopted
the name Shangri-La. It was in 1975 that they officially launched the Shangri-La mark and S logo. They
also made sure to register it in the patent offices of the different countries they did business in. It was on June
21, 1988, that they filed with the BPTTT a petition praying for the cancellation of the registration of the
Shangri-La mark and S logo issued to the DCGI. It should be noted that they only started doing business in
the Philippines in this year. The DCGI filed a complaint for infringement against SLIHM, claiming that theyhave
been the exclusive users of the brand for 8 years. The trial court eventually released its ruling which favors
DCGI with regard to the validity of the registration of the Shangri-La mark and S logo to DCGI. SLIHM then
proceeds to appeal to the CA but to no avail (as the CA only removes the inclusion of attorneys fees in the
reward of DCGI). SLIHM moves for reconsideration but is denied. This brings us to the case at the SC.

Issue:
1) Whether or not the CA erred in refusing to consider that petitioners are entitled to protection under
R.A. No. 166 (the old trademark law)
2) Whether or not the CA erred in refusing to consider that petitioners are entitled to protection under
Paris Convention for the Protection of Industrial Property

Holding:
1) Yes. R.A No. 166 provides that though SLIHM is not able to register the brand as theirs (for they have
not used the brand commercially in the Philippines for 2 months or more), they can still be the valid
 owners of the brand. Ownership requires actual use of the brand. Compared to DCGI, SLIHM has had
more time using the brand. Because of that DCGI lacks the ownership required in registering the
brand. (Note that SLIHM can only claim ownership and not registration of the brand).
2) No. SLIHM cannot be protected by the Paris Convention. Though the Philippines was already a
signatory by the time of this case, the Intellectual Property Code was only enacted during this case.
Applying prospectivity, the provisions in the IPC which allows internationally known brands to
challenge registered similar brands in the Philippines cannot be invoked to protect SLIHM. Because
this law was not yet available, R.A. No. 166, which says that SLIHM cannot register their brand yet,
must overpower the Paris Convention (because municipal laws > international laws).

Disposition:
Petition Granted. It would be wrong to declare SLIHM as infringing on a brand that they themselves created.

9. Pharmaceutical and Health Care Association v. DOH [GR 173034 (2007)]

Ponente: Justice Austria-Martinez

Facts:
Executive Order No. 51, also known as the Milk Code, was issued by President Corazon Aquino on October 28,
1986 by virtue of the legislative powers granted to the President under the Freedom Constitution. One of the
preambular clauses of the Milk Code states that the law seeks to give effect to Article 11 of the International
Code of Marketing of Breastmilk Substitutes (ICMBS), a code adopted by the World Health Assembly (WHA) in
1981. From 1982 to 2006, WHA adopted several Resolutions to the effect that breastfeeding should be
supported, promoted and protected, hence, it should be ensured that nutrition and health claims are not
permitted for breastmilk substitutes.

In 1990, the Philippines ratified the International Convention of the Rights of the Child. Article 24 of said
instrument provides that State Parties should take inappropriate measures to diminish infant and child
mortality and ensure that all segments of society, especially parents and children, are informed of the
advantages of breastfeeding.

On May 15, 2006, the Department of Health (DOH) issued herein assailed Administrative Order No. 2006-
0012 entitled Revised Implementing Rules and Regulations of Executive Order No. 51 (RIRR), which was to
take effect on July 7, 2006.

On June 28, 2006, petitioner, Pharmaceutical and Health Care Association of the Philippines, representing its
members that are manufacturers of breastmilk substitutes, filed the present Petition for Certiorari and
Prohibition with Prayer for the Issuance of a Temporary Restraining Order (TRO) or Writ of Preliminary
Injunction.

Issue/s:
Whether or not the international instruments ICMBS and WHA Resolution adopted by the respondent,
Department of Health, are considered part of law of the land.

Ruling:
Under the 1987 Constitution, international law can become part of the sphere of domestic law either by
transformation or incorporation. Treaties become part of the law of the land through transformation,
pursuant to Article VII, Section 21 of the Constitution, which 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. Thus, treaties or conventional international laws must go through a process prescribed by the
Constitution for it to be transformed into municipal law that can be applied to domestic conflicts.

The ICMBS and WHA Resolutions are not treaties as they have not been transformed by the Senate, as
required by the Constitution.

However, the International Code of Marketing of Breastmilk Substitutes (ICMBS), a code adopted by the World
Health Assembly (WHA), form part of the law of the land. The ICMBS was transformed into domestic law,
through local legislation (concurrence of at least two-thirds of all the members of the Senate), entitled the
Milk Code. Consequently, it is the Milk Code that has the force and effect of law in this jurisdiction, and not the
ICMBS per se.

On the other hand, subsequent WHA Resolutions are considered recommendations and do not come into
force for members. They are merely recommendatory and legally non-binding. It is propounded that WHA
Resolutions constitute soft law, or non-binding norms, principles and practices that only influence state
behaviors. Thus, provisions of the WHA Resolutions cannot be considered as part of the law of the land that
can be implemented by executive agencies, e.g., DOH, without the need of a law enacted by the legislature.

Notes:
1. Doctrine of Incorporation and Doctrine of Transformation Under the 1987 Constitution, international
law can become part of the sphere of domestic law either by transformation or incorporation. Treaties
become part of the law of the land through transformation.
Transformation method requires that an international law be transformed into a domestic law through a
constitutional mechanism such as local legislation concurrence of at least two-thirds of all the members of
the Senate.
Incorporation method applies when, by mere constitutional declaration, international law is deemed to
have the force of domestic law.

2. What gave rise to the issue above:

The ICMBS did not have any provision as to the prohibition of advertisements and promotions of breastmilk
substitutes. Thus, the Milk Code, almost a verbatim reproduction of the ICMBS, also did not have the said
prohibitive provision. Such prohibition was only included in the WHA Resolution, and was subsequently
included and adopted by the DOH in its RIRR. The petitioners claim that the RIRR contains provisions that are
not constitutional and go beyond the law it is supposed to implement, including the prohibitive provision
mentioned. The respondent, DOH, claims that it implements not only the Milk Code, but also various
international instruments regarding infant and young child nutrition.

10. Llamzon, The Generally Accepted Principles of International Law as Philippine Law: Towards a Structurally
Consistent Use of Customary International Law in Philippine Courts, 47 Ateneo L.J. 243 (2002)

Section 3
1. IBP v. Zamora [GR 141284 (2000)]
Section 7
1. Lim v. Exec. Secretary [GR 151445 (2002)]

Section 12
1. Imbong v. Ochoa [GR 204819 (2014)]
2. Wisconsin v. Yoder [40 LW 4476 (1972)]
3. Ginsberg v. New York [390 US 629 (1968)]
4. Orceo v. COMELEC [GR 190779 (2010)]

Section 14
1. Garcia v. Drilon [GR 173267 (2013)]

Section 16
1. Oposa v. Factoran [224 SCRA 792 (1993)]
2. LLDA v. CA [231 SCRA 292 (1994)] and [251 SCRA 42 (1995)]
3. Paje v. Casino [749 SCRA 39 (2015)]
4. International Service v. Greenpeace [GR 209271 (2015)] and MR (2016)
5. West Tower v. FPIC [798 SCRA 292 (2015)]
6. LNL Archipelago v. Agham Party List [GR 209165 (2016)]

Section 19
1. Garcia v. BOI [191 SCRA 288 (1990)]

Section 25
1. Navarro v. ES Ermita, et al. [GR 180050 (2011)]

Section 26
1. Pamatong v. COMELEC [427 SCRA 96 (2004)]

Section 28
1. Neri v. Senate [GR 180643 (2008)]
Ponente: Leonardo-De Castro, J.

Facts:
April 21, 2007 Dept. of Transportation and Communication (DORC) entered a contract with Zhing
Xing Telecommunications Equipment (ZTE) for supply of equipment of services for the National
Broadband network (NBN). This project was financed by Peoples Republic of China.
Various Resolutions were introduced in the Senate regarding this project
o P.S. Res. No.127 (intr. by Sen. Pimentel) Directing in aid of legislations the circumstances
leading to the approval of the contract
o P.S. Res. No. 144 (intr. by Sen. Roxas) Urging President Gloria Arroyo to direct cancellation
of contract.
o P.S. Res. No. 129 (intr. by Sen. Lacson) Conduct inquiry in aid of legislation into national
security implications of awarding deal to Chinese based firm
 o P.S. Res. No. 136 (intr. by Sen. Defensor-Santiago) Conduct inquiry in aid of legislation on
the legal and economic justification of the deal
Respondent initiated investigations and invited petitioner as head of National Economic and
Development Authority (NEDA)
Sept. 26, 2007 Petitioner testified before respondent for 11 hours
o Petitioner disclosed that COMELEC chair Benjamin Abalos offered P200 Million in
exchange of the approval of NBN project
o Petitioner informed President Arroyo of the bribery and was instructed not to accept
o Respondent probed petitioner to further discuss NBN project. Petitioner refused to answer
claiming executive privilege, particularly for the ff questions:
Whether or not Pres. Arroyo followed up the NBN Project
Whether or not she directed him to prioritize it
Whether or not she directed him to approve
Respondent issued Subpoena Ad Testificandum to petitioner requiring him to appear on Nov. 20, 2007
o Exec. Sec. Ermita requested respondents to dispense with petitioners testimony on the
grounds of executive privilege.
Petitioner did not appear before respondent so respondent issued a letter requiring petitioner to
explain why he shouldnt be cited for contempt
o Petitioner replied that it was not his intention to ignore the senate hearing also adding:
Non-appearance was ordered by the president
Conversation w/ president Arroyo dealt with sensitive and national security and
diplomatic matters
He be furnished in advance as what else needs to be clarified
Petiioner filed for certiorari
Respondent found petitioners explanation unsatisfactory, ignored his request and cited him for
contempt.
Petitioner contends that respondent show cause letter and contempt order were issued with grave
abuse of discretion amounting to lack or excess of jurisdiction

Issues:
Whether or not the communications elicited by the three questions are covered by executive privilege
Whether or not respondent commit grave abuse of discretion in issuing the contempt order

Held:
YES. The three questions fall under conversation and correspondence between the president and
public officials necessary in her executive and policy decision- making process. The information sought to
be disclosed might impair our diplomatic as well as economic relations with Peoples Republic of China
o There is a recognized claim of Executive Privilege despite the revocation of EO 464
Revocation of EO 464 does not diminish our concept of executive privilege
Presidential communications privilege is duly acknowledged
Pertains to the communications, documents or other materials that
reflect presidential decision-making and deliberations and that the
President believes should remain confidential. It also covers military or
state secrets and foreign relations.
Elements of Presidential communications privilege
o Communications relate to a quintessential and non-delegable
power of the president (i.e. the power to enter into an
executive agreement with other countries.)
 o Communications are received by close advisers of the president.
(Petitioner is considered to be a close adviser since he is a
member of Presidents cabinet)
o There is no adequate showing of a compelling need that would
justify the limitation of the privilege.
o Claim of Executive Privilege is properly invoked
YES. Undoubtedly, respondents actions constitute grave abuse of discretion for being arbitrary and
for denying petitioner due process of the law. Respondent committed grave abuse in issuing the order
contempt in view of five reasons:
o There was a legitimate claim of executive privilege. Issuance of contempt order suffers
from constitutional infirmity
o Respondent did not comply with the requirement laid down in Senate v. Ermita.
(Invitation should contain possible needed statute which prompted the need for inquiry
and usual indication of the subject inquiry and the questions relative to and in
furtherance of.) Compliance with this requirement is imperative under Sections 21 and
22 of Article VI of the constitution.
o Only minority of the Senate Blue Ribbon Committee was present during deliberation
when the vote needed majority.
o Respondent violated Section 21 of Article VI of the constitution, requiring inquiry be in
accordance with the duly published procedure
o Respondents issuance of contempt order is arbitrary and precipitate.

Ruling:
Petition is hereby granted.

2. Pollo v. Chairperson Karina Constantino-David, et al. [GR 181881 (2011)]

3. PS Bank and Garcia v. Senate Impeachment Court [GR 200238 (2012)]
4. In Re: Production of Court Records [14 February 2012]