Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 134577 November 18, 1998
SEN. MIRIAM DEFENSOR SANTIAGO and SEN. FRANCISCO S. TATAD, petitioners,
vs.
SEN. TEOFISTO T. GUINGONA, JR. and SEN. MARCELO B. FERNAN, respondents.
PANGANIBAN, J.:
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. Constitutional respect and a becoming regard for she sovereign acts, of a coequal branch
prevents this Court from prying into the internal workings of the Senate. Where no provision of the
Constitution or the laws or even the Rules of the Senate is clearly shown to have been violated,
disregarded or overlooked, grave abuse of discretion cannot be imputed to Senate officials for acts
done within their competence and authority. This Court will be neither a tyrant nor a wimp; rather, it will
remain steadfast and judicious in upholding the rule and majesty of the law.
The Case
On July 31, 1998, Senators Miriam Defensor Santiago and Francisco S. Tatad instituted an original
petition forquo warranto under Rule 66, Section 5, Rules of Court, seeking the ouster of Senator
Teofisto T. Guingona, Jr. as minority leader of the Senate and the declaration of Senator Tatad as the
rightful minority leader.
On August 4, 1998, the Court, upon receipt of the Petition, required the respondents and the solicitor
general "to file COMMENT thereon within a non-extendible period of fifteen (15) days from notice." On
August 25, 1998, both respondents and the solicitor general submitted their respective Comments. In
compliance with a Resolution of the Court dated September 1, 1998, petitioners filed their Consolidated
Reply on September 23, 1998. Noting said pleading, this Court gave due course to the petition and
deemed the controversy submitted for decision, without need of memoranda, on September 29, 1998.
In the regular course, the regional trial courts and this Court have concurrent jurisdiction1 to hear and
decide petitions for quo warranto (as well as certiorari, prohibition and mandamus), and a basic
deference to the hierarchy of courts impels a filing of such petitions in the lower tribunals. 2 However, for
special and important reasons or for exceptional and compelling circumstances, as in the present case,
this Court has allowed exceptions to this doctrine.3 In fact, original petitions for certiorari,
prohibition, mandamusand quo warranto assailing acts of legislative officers like the Senate
President4 and the Speaker of the House 5 have been recognized as exceptions to this rule.
The Facts
The Senate of the Philippines, with Sen. John Henry R. Osmea as presiding officer, convened on July
27, 1998 for the first regular session of the eleventh Congress. At the time, in terms of party affiliation,
the composition of the Senate was as follows: 6
10 members Laban ng Masang Pilipino (LAMP)
7 members Lakas-National Union of Christian Democrats-United
Muslim Democrats of the Philippines (Lakas-NUCD-
UMDP)
1 member Liberal Party (LP)
1 member Aksyon Demokrasya
1 member People's Reform Party (PRP)
1 member Gabay Bayan
2 members Independent
provide for such office and, in that event, to determine the procedure of selecting its occupant.
23 total number of senators 7 (The last six members are all classified by petitioners
as "independent".)
On the agenda for the day was the election of officers. Nominated by Sen. Blas F. Ople to the position
of Senate President was Sen. Marcelo B. Fernan. Sen. Francisco S. Tatad was also nominated to the
same position by Sen. Miriam Defenser Santiago. By a vote of 20 to 2, 8 Senator Fernan was declared
the duly elected President of the Senate.
The following were likewise elected: Senator Ople as president pro tempore, and Sen. Franklin M.
Drilon as majority leader.
Senator Tatad thereafter manifested that, with the agreement of Senator Santiago, allegedly the only
other member of the minority, he was assuming the position of minority leader. He explained that those
who had voted for Senator Fernan comprised the "majority," while only those who had voted for him, the
losing nominee, belonged to the "minority."
During the discussion on who should constitute the Senate "minority," Sen. Juan M. Flavier manifested
that the senators belonging to the Lakas-NUCD-UMDP Party numbering seven (7) and, thus, also a
minority had chosen Senator Guingona as the minority leader. No consensus on the matter was
arrived at. The following session day, the debate on the question continued, with Senators Santiago and
Tatad delivering privilege speeches. On the third session day, the Senate met in caucus, but still failed
to resolve the issue.
On July 30, 1998, the majority leader informed the body chat he was in receipt of a letter signed by the
seven Lakas-NUCD-UMDP senators,9 stating that they had elected Senator Guingona as the minority
leader. By virtue thereof, the Senate President formally recognized Senator Guingona as the minority
leader of the Senate.
The following day, Senators Santiago and Tatad filed before this Court the subject petition for quo
warranto, alleging in the main that Senator Guingona had been usurping, unlawfully holding and
exercising the position of Senate minority leader, a position that, according to them, rightfully belonged
to Senator Tatad.
Issues
From the parties' pleadings, the Court formulated the following issues for resolution:
1. Does the Court have jurisdiction over the petition?
2. Was there an actual violation of the Constitution?
3. Was Respondent Guingona usurping, unlawfully holding and exercising the
position of Senate minority leader?
4. Did Respondent Fernan act with grave abuse of discretion in recognizing
Respondent Guingona as the minority leader?
The Court's Ruling
After a close perusal of the pleadings 10 and a careful deliberation on the arguments, pro and con, the
Court finds that no constitutional or legal infirmity or grave abuse of discretion attended the recognition
of and the assumption into office by Respondent Guingona as the Senate minority leader.
First Issue:
The Court's Jurisdiction
Petitioners principally invoke Avelino v. Cuenco 11 in arguing that this Court has jurisdiction to settle the
issue of who is the lawful Senate minority leader. They submit that the definitions of "majority" and
"minority" involve an interpretation of the Constitution, specifically Section 16 (1), Article VI thereof,
stating that "[t]he Senate shall elect its President and the House of Representatives its Speaker, by a
majority vote of all its respective Members."
Respondents and the solicitor general, in their separate Comments, contend in common that the issue
of who is the lawful Senate minority leader is an internal matter pertaining exclusively to the domain of
the legislature, over which the Court cannot exercise jurisdiction without transgressing the principle of
separation of powers. Allegedly, no constitutional issue is involved, as the fundamental law does not
provide for the office of a minority leader in the Senate. The legislature alone has the full discretion to
Respondents also maintain that Avelino cannot apply, because there exists no question involving an
interpretation or application of the Constitution, the laws or even the Rules of the Senate; neither are
there "peculiar circumstances" impelling the Court to assume jurisdiction over the petition. The solicitor
general adds that there is not even any legislative practice to support the petitioners' theory that a
senator who votes for the winning Senate President is precluded from becoming the minority leader.
To resolve the issue of jurisdiction, this Court carefully reviewed and deliberated on the various
important cases involving this very important and basic question, which it has ruled upon in the past.
The early case Avelino v. Cuenco cautiously tackled the scope of the Court's power of judicial review;
that is, questions involving an interpretation or application of a provision of the Constitution or the law,
including the rules of either house of Congress. Within this scope falls the jurisdiction of the Court over
questions on the validity of legislative or executive acts that are political in nature, whenever the tribunal
"finds constitutionally imposed limits on powers or functions conferred upon political bodies." 12
In the aforementioned case, the Court initially declined to resolve the question of who was the rightful
Senate President, since it was deemed a political controversy falling exclusively within the domain of
the Senate. Upon a motion for reconsideration, however, the Court ultimately assumed jurisdiction (1)
"in the light of subsequent events which justify its intervention;" and (2) because the resolution of the
issue hinged on the interpretation of the constitutional provision on the presence of a quorum to hold a
session 13 and therein elect a Senate President.
Justice Feria elucidated in his Concurring Opinion: "[I] concur with the majority that this Court has
jurisdiction over cases like the present . . . so as to establish in this country the judicial supremacy, with
the Supreme Court as the final arbiter, to see that no one branch or agency of the government
transcends the Constitution, not only in justiceable but political questions as well." 14
Justice Perfecto, also concurring, said in part:
Indeed there is no denying that the situation, as obtaining in the upper chamber of
Congress, is highly explosive. It had echoed in the House of Representatives. It has
already involved the President of the Philippines. The situation has created a veritable
national crisis, and it is apparent that solution cannot be expected from any quarter
other than this Supreme Court, upon which the hopes of the people for an effective
settlement are pinned. 15
. . . This case raises vital constitutional questions which no one can settle or decide if
this Court should refuse to decide them. 16
. . . The constitutional question of quorum should not be left unanswered. 17
In Taada v. Cueno, 18 this Court endeavored to define political question. And we said that "it refers to
'those questions which, under the Constitution, are to be decided by the people in their sovereign
capacity, or in regard to which full discretionary authority has been delegated to the legislative or
executive branch of the government.' It is concerned with issues dependent upon the wisdom, not [the]
legality, of a particular measure." 19
The Court ruled that the validity of the selection of members of the Senate Electoral Tribunal by the
senators was not a political question. The choice of these members did not depend on the Senate's "full
discretionary authority," but was subject to mandatory constitutional limitations. 20 Thus, the Court held
that not only was it clearly within its jurisdiction to pass upon the validity of the selection proceedings,
but it was also its duty to consider and determine the issue.
In another landmark case, Lansang v. Garcia, 21 Chief Justice Roberto Concepcion wrote that the Court
"had authority to and should inquire into the existence of the factual bases required by the Constitution
for the suspension of the privilege of the writ [of habeas corpus]." This ruling was made in spite of the
previous pronouncements in Barcelon v. Baker 22 and Montenegro v. Castaeda 23 that "the authority to
decide whether the exigency has arisen requiring suspension (of the privilege . . .) belongs to the
President and his 'decision is final and conclusive' upon the courts and upon all other persons." But the
Chief Justice cautioned: "the function of the Court is merely to check not to supplant the
Executive, or to ascertain merely whether he has gone beyond the constitutional limits of his
jurisdiction, not to exercise the power vested in him or to determine the wisdom of his act."
The eminent Chief Justice aptly explained later in Javellana v. Executive Secretary: 24
The reason why the issue under consideration and other issues of similar character
are justiciable, not political, is plain and simple. One of the principal bases of the non-
justiciability of so-called political questions is the principle of separation of powers
characteristic of the presidential system of government the functions of which are
classified or divided, by reason of their nature, into three (3) categories, namely, 1)
those involving the making of laws, which are allocated to the legislative department;
2) those concerning mainly with the enforcement of such laws and of judicial
decisions applying and/or interpreting the same, which belong to the executive
department; and 3) those dealing with the settlement of disputes, controversies or
conflicts involving rights, duties or prerogatives that are legally demandable and
enforceable, which are apportioned to courts of justice. Within its own sphere
but only within such sphere each department is supreme and independent of the
others, and each is devoid of authority not only to encroach upon the powers or field
of action assigned to any of the other departments, but also to inquire into or pass
upon the advisability or wisdom of the acts performed, measures taken or decisions
made by the other departments provided that such acts, measures or decisions
are within the area allocated thereto by the Constitution.
Accordingly, when the grant of power is qualified, conditional or subject to limitations,
the issue of whether or not the prescribed qualifications or conditions have been met,
or the limitations respected is justiciable or non-political, the crux of the problem being
one oflegality or validity of the contested act, not its wisdom. Otherwise, said
qualifications, conditions or limitations particularly those prescribed by the
Constitution would be set at naught. What is more, the judicial inquiry into such
issue and the settlement thereof are the main functions of the courts of justice under
the presidential form of government adopted in our 1935 Constitution, and the system
of checks and balances, one of its basic predicates. As a consequence, we have
neither the authority nor the discretion to decline passing upon said issue, but
are under the ineluctable obligation made particularly more exacting and
peremptory by our oath, as members of the highest Court of the land, to support and
defend the Constitution to settle it. This explains why, in Miller v. Johnson[92 Ky.
589, 18 SW 522, 523], it was held that courts have a "duty, rather than a power," to
determine whether another branch of the government has "kept within constitutional
limits."
Unlike our previous constitutions, the 1987 Constitution is explicit in defining the scope of judicial power.
The present Constitution now fortifies the authority of the courts to determine in an appropriate action
the validity of the acts of the political departments. It speaks of judicial prerogative in terms ofduty, viz.:
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 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. 25
This express definition has resulted in clearer and more resolute pronouncements of the Court. Daza v.
Singson, 26 Coseteng v. Mitra, Jr. 27 and Guingona Jr. v. Gonzales 28 similarly resolved issues assailing
the acts of the leaders of both houses of Congress in apportioning among political parties the seats to
which each chamber was entitled in the Commission on Appointments. The Court held that the issue
was justiciable, "even if the question were political in nature," since it involved "the legality, not the
wisdom, of the manner of filling the Commission on Appointments as prescribed by [Section 18, Article
VI of] the Constitution."
The same question of jurisdiction was raised in Taada v. Angara, 29 wherein the petitioners sought to
nullify the Senate's concurrence in the ratification of the World Trade Organization (WTO) Agreement.
The Court ruled: "Where an action of the legislative branch is seriously alleged to have infringed the
Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute." The
Court en banc unanimously stressed that in taking jurisdiction over petitions questioning, an act of the
political departments of government, it will not review the wisdom, merits or propriety of such action,
and will strike it down only on either of two grounds: (1) unconstitutionality or illegality and (2) grave
abuse of discretion.
Earlier in Co v. Electoral Tribunal of the House of Representatives 30 (HRET), the Court refused to
reverse a decision of the HRET, in the absence of a showing that said tribunal had committed grave
abuse of discretion amounting to lack of jurisdiction. The Court ruled that full authority had been
conferred upon the electoral tribunals of the House of Representatives and of the Senate as sole
judges of all contests relating to the election, the returns, and the qualifications of their respective
members. Such jurisdiction is original and exclusive. 31 The Court may inquire into a decision or
resolution of said tribunals only if such "decision or resolution was rendered without or in excess of
jurisdiction, or with grave abuse of discretion" 32
Recently, the Court, in Arroyo v. De Venecia, 33 was asked to reexamine the enrolled bill doctrine and to
look beyond the certification of the Speaker of the House of Representatives that the bill, which was
later enacted as Republic Act 8240, was properly approved by the legislative body. Petitioners claimed
that certain procedural rules of the House had been breached in the passage of the bill. They averred
further that a violation of the constitutionally mandated House rules was a violation of the Constitution
itself.
The Court, however, dismissed the petition, because the matter complained of concerned the internal
procedures of the House, with which the Court had no concern. It enucleated: 34
It would-be an 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 their
remedy in that department itself. 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
discretion were it to do so. . . . In the absence of anything to the contrary, the Court
must assume that Congress or any House thereof acted in the good faith belief that
its conduct was permitted by its rules, and deference rather than disrespect is due the
judgment of that body.
In the instant controversy, the petitioners one of whom is Senator Santiago, a well-known
constitutionalist try to hew closely to these jurisprudential parameters. They claim that Section 16 (1),
Article VI of the constitution, has not been observed in the selection of the Senate minority leader. They
also invoke the Court's "expanded" judicial 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 respondents.
Dissenting in part, Mr. Justice Vicente V. Mendoza submits that the Court has no jurisdiction over the
petition. Well-settled is the doctrine, however, that jurisdiction over the subject matter of a case is
determined by the allegations of the complaint or petition, regardless of whether the plaintiff or petitioner
is entitled to the relief asserted. 35 In light of the aforesaid allegations of petitioners, it is clear that this
Court has jurisdiction over the petition. It is well within the power and jurisdiction of the Court to inquire
whether indeed the Senate or its officials committed a violation of the Constitution or gravely abused
their discretion in the exercise of their functions and prerogatives.
Second Issue:
Violation of the Constitution
Having assumed jurisdiction over the petition, we now go to the next crucial question: In recognizing
Respondent Guingona as the Senate minority leader, did the Senate or its officials, particularly Senate
President Fernan, violate the Constitution or the laws?
Petitioners answer the above question in the affirmative. They contend that the constitutional provision
requiring the election of the Senate President "by majority vote of all members" carries with it a judicial
duty to determine the concepts of "majority" and "minority," as well as who may elect a minority leader.
They argue that "majority" in the aforequoted constitutional provision refers to that group of senators
who (1) voted for the winning Senate President and (2) accepted committee chairmanships.
Accordingly, those who voted for the losing nominee and accepted no such chairmanships comprise the
minority, to whom the right to determine the minority leader belongs. As a result, petitioners assert,
Respondent Guingona cannot be the legitimate minority leader, since he voted for Respondent Fernan
as Senate President. Furthermore, the members of the Lakas-NUCD-UMDP cannot choose the minority
leader, because they did not belong to the minority, having voted for Fernan and accepted committee
chairmanships.
We believe, however, that the interpretation proposed by petitioners finds no clear support from the
Constitution, the laws, the Rules of the Senate or even from practices of the Upper House.
The term "majority" has been judicially defined a number of times. When referring to a certain number
out of a total or aggregate, it simply "means the number greater than half or more than half of any
total."36 The plain and unambiguous words of the subject constitutional clause simply mean that the
Senate President must obtain the votes of more than one half of all the senators. Not by any construal
does it thereby delineate who comprise the "majority," much less the "minority," in the said body. And
there is no showing that the framers of our Constitution had in mind other than the usual meanings of
these terms.
In effect, while the Constitution mandates that the President of the Senate must be elected by a number
constituting more than one half of all the members thereof, it does not provide that the members who
will not vote for him shall ipso facto constitute the "minority," who could thereby elect the minority
leader. Verily, no law or regulation states that the defeated candidate shall automatically become the
minority leader.
The Comment 37 of Respondent Guingona furnishes some relevant precedents, which were not
contested in petitioners' Reply. During the eighth Congress, which was the first to convene after the
ratification of the 1987 Constitution, the nomination of Sen. Jovito R Salonga as Senate President was
seconded by a member of the minority, then Sen. Joseph E. Estrada. 38 During the ninth regular
session, when Sen. Edgardo J. Angara assumed the Senate presidency in 1993, a consensus was
reached to assign committee chairmanships to all senators, including those belonging to the
minority. 39 This practice continued during the tenth Congress, where even the minority leader was
allowed to chair a committee. 40 History would also show that the "majority" in either house of Congress
has referred to the political party to which the most number of lawmakers belonged, while the "minority"
normally referred to a party with a lesser number of members.
Let us go back to the definitions of the terms "majority" and "minority." Majority may also refer to "the
group, party, or faction with the larger number of votes," 41 not necessarily more than one half. This is
sometimes referred to as plurality. In contrast, minority is "a group, party, or faction with a smaller
number of votes or adherents than the majority." 42 Between two unequal parts or numbers comprising
a whole or totality, the greater number would obviously be the majority while the lesser would be the
minority. But where there are more than two unequal groupings, it is not as easy to say which
is theminority entitled to select the leader representing all the minorities. In a government with a multi-
party system such as in the Philippines (as pointed out by petitioners themselves), there could be
several minority parties, one of which has to be indentified by the Comelec as the "dominant minority
party" for purposes of the general elections. In the prevailing composition of the present Senate,
members either belong to different political parties or are independent. No constitutional or statutory
provision prescribe which of the many minority groups or the independents or a combination thereof has
the right to select the minority leader.
While the Constitution is explicit on the manner of electing a Senate President and a House Speaker, it
is, however, dead silent on the manner of selecting the other officers in both chambers of Congress. All
that the Charter says is that "[e]ach House shall choose such other officers as it may deem
necessary."43 To our mind, the method of choosing who will be such other officers is merely a derivative
of the exercise of the prerogative conferred by the aforequoted constitutional provision. Therefore, such
method must be prescribed by the Senate itself, not by this Court.
In this regard, the Constitution vests in each house of Congress the power "to determine the rules of its
proceedings." 44 Pursuant thereto, the Senate formulated and adopted a set of rules to govern its
internal affairs. 45 Pertinent to the instant case are Rules I and II thereof, which provide:
Rule I
ELECTIVE OFFICERS
Sec 1. The Senate shall elect, in the manner hereinafter provided, a President, a
President Pro Tempore, a Secretary, and a Sergeant-at-Arms.
These officers shall take their oath of office before entering into the discharge of their
duties.
Rule II
ELECTION OF OFFICER
Sec. 2. The officers of the Senate shall be elected by the majority vote of all its
Members. Should there be more than one candidate for the same office, a nominal
vote shall be taken; otherwise, the elections shall be by viva voce or by resolution.
Notably, the Rules of the Senate do not provide for the positions of majority and minority leaders.
Neither is there an open clause providing specifically for such offices and prescribing the manner of
creating them or of choosing the holders thereof, At any rate, such offices, by tradition and long
practice, are actually extant. But, in the absence of constitutional or statutory guidelines or specific
rules, this Court is devoid of any basis upon which to determine the legality of the acts of the Senate
relative thereto. On grounds of respect for the basic concept of separation of powers, courts may not
intervene in the internal affairs of the legislature; it is not within the province of courts to direct Congress
how to do its work. 46 Paraphrasing the words of Justice Florentino P. Feliciano, this Court is of the
opinion that where no specific, operable norms and standards are shown to exist, then the legislature
must be given a real and effective opportunity to fashion and promulgate as well as to implement them,
before the courts may intervene. 47
Needless to state, legislative rules, unlike statutory laws, do not have the imprints of permanence and
obligatoriness during their effectivity. In fact, they "are subject to revocation, modification or waiver at
the pleasure of the body adopting them." 48 Being merely matters of procedure, their observance are of
no concern to the courts, for said rules may be waived or disregarded by the legislative body 49 at will,
upon the concurrence of a majority.
In view of the foregoing, Congress verily has the power and prerogative to provide for such officers as it
may deem. And it is certainly within its own jurisdiction and discretion to prescribe the parameters for
the exercise of this prerogative. This Court has no authority to interfere and unilaterally intrude into that
exclusive realm, without running afoul of constitutional principles that it is bound to protect and uphold
the very duty that justifies the Court's being. Constitutional respect and a becoming regard for the
sovereign acts of a coequal branch prevents this Court from prying into the internal workings of the
Senate. To repeat, this Court will be neither a tyrant nor a wimp; rather, it will remain steadfast and
judicious in upholding the rule and majesty of the law.
To accede, then, to the interpretation of petitioners would practically amount to judicial legislation, a
clear breach of the constitutional doctrine of separation of powers. If for this argument alone, the petition
would easily fail.
While no provision of the Constitution or the laws or the rules and even the practice of the Senate was
violated, and while the judiciary is without power to decide matters over which full discretionary authority
has been lodged in the legislative department, this Court may still inquire whether an act of Congress or
its officials has been made with grave abuse of discretion. 50 This is the plain implication of Section 1,
Article VIII of the Constitution, which expressly confers upon the judiciary the power and the duty not
only "to settle actual controversies involving rights which are legally demandable and enforceable," but
likewise "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."
Explaining the above-quoted clause, former Chief Justice Concepcion, who was a member of the 1986
Constitutional Commission, said in part: 51
. . . the powers of government are generally considered divided into three branches:
the Legislative, the Executive and the Judiciary. Each one is supreme within its own
sphere and independent of the others. Because of that supremacy[, the] power to
determine whether a given law is valid or not is vested in courts of justice.
Briefly stated, courts of justice determine the limits of power of the agencies and
offices of the government as well as those of its officers. In other words, the judiciary
is the final arbiter on the question whether or not a branch of government or any of its
officials has acted without jurisdiction or in excess of jurisdiction, or so capriciously as
to constitute an abuse of discretion amounting to excess of jurisdiction or lack of
jurisdiction. This is not only a judicial power but a duty to pass judgment on matters of
this nature.
This is the background of paragraph 2 of Section 1, which means that the courts
cannot hereafter evade the duty to settle matters of this nature, by claiming that such
matters constitute a political question.
With this paradigm, we now examine the two other issues challenging the actions, first, of Respondent
Guingona and, second, of Respondent Fernan.
Third Issue:
Usurpation of Office
Usurpation generally refers to unauthorized arbitrary assumption and exercise of power 52 by one
without color of title or who is not entitled by law thereto. 53 A quo warranto proceeding is the proper
legal remedy to determine the right or title to the contested public office and to oust the holder from its
enjoyment. 54 The action may be brought by the solicitor general or a public prosecutor 55 or any person
claiming to be entitled to the public office or position usurped or unlawfully held or exercised by
another. 56 The action shall be brought against the person who allegedly usurped, intruded into or is
unlawfully holding of exercising such office. 57
In order for a quo warranto proceeding to be successful, the person suing must show that he or she has
a clear right to the contested office or to use or exercise the functions of the office allegedly usurped or
unlawfully held by the respondent. 58 In this case, petitioners present no sufficient proof of a clear and
indubitable franchise to the office of the Senate minority leader.
As discussed earlier, the specific norms or standards that may be used in determining who may lawfully
occupy the disputed position has not been laid down by the Constitution, the statutes, or the Senate
itself in which the power has been vested. Absent any clear-cut guideline, in no way can it be said that
illegality or irregularity tainted Respondent Guingona's assumption and exercise of the powers of the
office of Senate minority leader. Furthermore, no grave abuse of discretion has been shown to
characterize any of his specific acts as minority leader.
Fourth Issue:
Fernan's Recognition of Guingona
The all-embracing and plenary power and duty of the Court "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" is restricted only by the definition and confines of the term "grave
abuse of discretion."
By grave abuse of discretion is meant such capricious or whimsical exercise of
judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be
patent and gross as to amount to an evasion of positive duty or a virtual refusal to
perform a duty enjoined by law, or to act at all in contemplation of law as where the
power is exercised in an arbitrary and despotic manner by reason of passion and
hostility. 59
By the above standard, we hold that Respondent Fernan did not gravely abuse his discretion as Senate
President in recognizing Respondent Guingona as the minority leader. Let us recall that the latter
belongs to one of the minority parties in the Senate, the Lakas-NUCD-UMDP. By unanimous resolution
of the members of this party that he be the minority leader, he was recognized as such by the Senate
President. Such formal recognition by Respondent Fernan came only after at least two Senate sessions
and a caucus, wherein both sides were liberally allowed to articulate their standpoints.
Under these circumstances, we believe that the Senate President cannot be accused of "capricious or
whimsical exercise of judgment" or of "an arbitrary and despotic manner by reason of passion or
hostility." Where no provision of the Constitution, the laws or even the rules of the Senate has been
clearly shown to have been violated, disregarded or overlooked, grave abuse of discretion cannot be
imputed to Senate officials for acts done within their competence and authority.
WHEREFORE, for the above reasons, the petition is hereby DISMISSED.
SO ORDERED.
G.R. No. 160261 November 10, 2003
ERNESTO B. FRANCISCO, JR., petitioner,
NAGMAMALASAKIT NA MGA MANANANGGOL NG MGA MANGGAGAWANG PILIPINO, INC., ITS
OFFICERS AND MEMBERS, petitioner-in-intervention,
WORLD WAR II VETERANS LEGIONARIES OF THE PHILIPPINES, INC., petitioner-in-intervention,
vs.
THE HOUSE OF REPRESENTATIVES, REPRESENTED BY SPEAKER JOSE G. DE VENECIA, THE
SENATE, REPRESENTED BY SENATE PRESIDENT FRANKLIN M. DRILON, REPRESENTATIVE
GILBERTO C. TEODORO, JR. AND REPRESENTATIVE FELIX WILLIAM B.
FUENTEBELLA, respondents.
JAIME N. SORIANO, respondent-in-Intervention,
SENATOR AQUILINO Q. PIMENTEL, respondent-in-intervention.
There can be no constitutional crisis arising from a conflict, no matter how passionate and seemingly
irreconcilable it may appear to be, over the determination by the independent branches of government
of the nature, scope and extent of their respective constitutional powers where the Constitution itself
provides for the means and bases for its resolution.
Our nation's history is replete with vivid illustrations of the often frictional, at times turbulent, dynamics of
the relationship among these co-equal branches. This Court is confronted with one such today involving
the legislature and the judiciary which has drawn legal luminaries to chart antipodal courses and not a
few of our countrymen to vent cacophonous sentiments thereon.
There may indeed be some legitimacy to the characterization that the present controversy subject of the
instant petitions whether the filing of the second impeachment complaint against Chief Justice Hilario
G. Davide, Jr. with the House of Representatives falls within the one year bar provided in the
Constitution, and whether the resolution thereof is a political question has resulted in a political crisis.
Perhaps even more truth to the view that it was brought upon by a political crisis of conscience.
In any event, it is with the absolute certainty that our Constitution is sufficient to address all the issues
which this controversy spawns that this Court unequivocally pronounces, at the first instance, that the
feared resort to extra-constitutional methods of resolving it is neither necessary nor legally permissible.
Both its resolution and protection of the public interest lie in adherence to, not departure from, the
Constitution.
In passing over the complex issues arising from the controversy, this Court is ever mindful of the
essential truth that the inviolate doctrine of separation of powers among the legislative, executive or
judicial branches of government by no means prescribes for absolute autonomy in the discharge by
each of that part of the governmental power assigned to it by the sovereign people.
At the same time, the corollary doctrine of checks and balances which has been carefully calibrated by
the Constitution to temper the official acts of each of these three branches must be given effect without
destroying their indispensable co-equality.
Taken together, these two fundamental doctrines of republican government, intended as they are to
insure that governmental power is wielded only for the good of the people, mandate a relationship of
interdependence and coordination among these branches where the delicate functions of enacting,
interpreting and enforcing laws are harmonized to achieve a unity of governance, guided only by what is
in the greater interest and well-being of the people. Verily, salus populi est suprema lex.
Article XI of our present 1987 Constitution provides:
ARTICLE XI
Accountability of Public Officers
SECTION 1. Public office is a public trust. Public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism and justice, and lead modest lives.
SECTION 2. The President, the Vice-President, the Members of the Supreme Court, the
Members of the Constitutional Commissions, and the Ombudsman may be removed from
office, on impeachment for, and conviction of, culpable violation of the Constitution, treason,
bribery, graft and corruption, other high crimes, or betrayal of public trust. All other public
officers and employees may be removed from office as provided by law, but not by
impeachment.
SECTION 3. (1) The House of Representatives shall have the exclusive power to initiate all
cases of impeachment.
(2) A verified complaint for impeachment may be filed by any Member of the House of
Representatives or by any citizen upon a resolution of endorsement by any Member thereof,
which shall be included in the Order of Business within ten session days, and referred to the
proper Committee within three session days thereafter. The Committee, after hearing, and by a
majority vote of all its Members, shall submit its report to the House within sixty session days
from such referral, together with the corresponding resolution. The resolution shall be
calendared for consideration by the House within ten session days from receipt thereof.
(3) A vote of at least one-third of all the Members of the House shall be necessary either to
affirm a favorable resolution with the Articles of Impeachment of the Committee, or override its
contrary resolution. The vote of each Member shall be recorded.
(4) In case the verified complaint or resolution of impeachment is filed by at least one-third of
all the Members of the House, the same shall constitute the Articles of Impeachment, and trial
by the Senate shall forthwith proceed.
(5) No impeachment proceedings shall be initiated against the same official more than once
within a period of one year.
(6) The Senate shall have the sole power to try and decide all cases of impeachment. When
sitting for that purpose, the Senators shall be on oath or affirmation. When the President of the
Philippines is on trial, the Chief Justice of the Supreme Court shall preside, but shall not vote.
No person shall be convicted without the concurrence of two-thirds of all the Members of the
Senate.
(7) Judgment in cases of impeachment shall not extend further than removal from office and
disqualification to hold any office under the Republic of the Philippines, but the party convicted
shall nevertheless be liable and subject to prosecution, trial, and punishment according to law.
(8) The Congress shall promulgate its rules on impeachment to effectively carry out the
purpose of this section. (Emphasis and underscoring supplied)
Following the above-quoted Section 8 of Article XI of the Constitution, the 12th Congress of the House
of Representatives adopted and approved the Rules of Procedure in Impeachment Proceedings (House
Impeachment Rules) on November 28, 2001, superseding the previous House Impeachment
Rules1 approved by the 11th Congress. The relevant distinctions between these two Congresses'
House Impeachment Rules are shown in the following tabulation:
11TH CONGRESS RULES 12TH CONGRESS NEW RULES
RULE II RULE V
INITIATING IMPEACHMENT

Section 2. Mode of Initiating
Impeachment. Impeachment shall be
initiated only by a verified complaint for
impeachment filed by any Member of the
House of Representatives or by any
citizen upon a resolution of endorsement
by any Member thereof or by a verified
complaint or resolution of impeachment
filed by at least one-third (1/3) of all the
Members of the House.
RULE V
BAR AGAINST IMPEACHMENT
Section 14. Scope of Bar. No
impeachment proceedings shall be
initiated against the same official more
than once within the period of one (1)
year.
On July 22, 2002, the House of Representatives adopted a Resolution, 2 sponsored by Representative
Felix William D. Fuentebella, which directed the Committee on Justice "to conduct an investigation, in
aid of legislation, on the manner of disbursements and expenditures by the Chief Justice of the
Supreme Court of the Judiciary Development Fund (JDF)." 3
On June 2, 2003, former President Joseph E. Estrada filed an impeachment complaint4 (first
impeachment complaint) against Chief Justice Hilario G. Davide Jr. and seven Associate Justices 5 of
this Court for "culpable violation of the Constitution, betrayal of the public trust and other high
crimes."6 The complaint was endorsed by Representatives Rolex T. Suplico, Ronaldo B. Zamora and
Didagen Piang Dilangalen,7 and was referred to the House Committee on Justice on August 5, 2003 8 in
BAR AGAINST INITIATION OF
accordance with Section 3(2) of Article XI of the Constitution which reads:
IMPEACHMENT PROCEEDINGS
Section 3(2) A verified complaint for impeachment may be filed by any Member of the House
AGAINST THE SAME OFFICIAL
of Representatives or by any citizen upon a resolution of endorsement by any Member thereof,
Section 16. Impeachment Proceedings
which shall be included in the Order of Business within ten session days, and referred to the
Deemed Initiated. In cases where a
proper Committee within three session days thereafter. The Committee, after hearing, and by a
Member of the House files a verified
majority vote of all its Members, shall submit its report to the House within sixty session days
complaint of impeachment or a citizen
from such referral, together with the corresponding resolution. The resolution shall be
files a verified complaint that is endorsed
calendared for consideration by the House within ten session days from receipt thereof.
by a Member of the House through a
The House Committee on Justice ruled on October 13, 2003 that the first impeachment complaint was
resolution of endorsement against an
"sufficient in form,"9 but voted to dismiss the same on October 22, 2003 for being insufficient in
impeachable officer, impeachment
substance.10 To date, the Committee Report to this effect has not yet been sent to the House in plenary
proceedings against such official are
in accordance with the said Section 3(2) of Article XI of the Constitution.
deemed initiated on the day the
Four months and three weeks since the filing on June 2, 2003 of the first complaint or on October 23,
Committee on Justice finds that the
2003, a day after the House Committee on Justice voted to dismiss it, the second impeachment
verified complaint and/or resolution
complaint11 was filed with the Secretary General of the House12 by Representatives Gilberto C.
against such official, as the case may
Teodoro, Jr. (First District, Tarlac) and Felix William B. Fuentebella (Third District, Camarines Sur)
be, is sufficient in substance, or on the
against Chief Justice Hilario G. Davide, Jr., founded on the alleged results of the legislative inquiry
date the House votes to overturn or
initiated by above-mentioned House Resolution. This second impeachment complaint was
affirm the finding of the said Committee
accompanied by a "Resolution of Endorsement/Impeachment" signed by at least one-third (1/3) of all
that the verified complaint and/or
the Members of the House of Representatives.13
resolution, as the case may be, is not
Thus arose the instant petitions against the House of Representatives, et. al., most of which petitions
sufficient in substance.
contend that the filing of the second impeachment complaint is unconstitutional as it violates the
In cases where a verified complaint or a
provision of Section 5 of Article XI of the Constitution that "[n]o impeachment proceedings shall be
resolution of impeachment is filed or
initiated against the same official more than once within a period of one year."
endorsed, as the case may be, by at
In G.R. No. 160261, petitioner Atty. Ernesto B. Francisco, Jr., alleging that he has a duty as a member
least one-third (1/3) of the Members of
of the Integrated Bar of the Philippines to use all available legal remedies to stop an unconstitutional
the House, impeachment proceedings
impeachment, that the issues raised in his petition for Certiorari, Prohibition and Mandamus are of
are deemed initiated at the time of the
transcendental importance, and that he "himself was a victim of the capricious and arbitrary changes in
filing of such verified complaint or
the Rules of Procedure in Impeachment Proceedings introduced by the 12th Congress," 14 posits that his
resolution of impeachment with the
right to bring an impeachment complaint against then Ombudsman Aniano Desierto had been violated
Secretary General.
due to the capricious and arbitrary changes in the House Impeachment Rules adopted and approved on
November 28, 2001 by the House of Representatives and prays that (1) Rule V, Sections 16 and 17
and Rule III, Sections 5, 6, 7, 8, and 9 thereof be declared unconstitutional; (2) this Court issue a writ of
Section 17. Bar Against Initiation Of
mandamus directing respondents House of Representatives et. al. to comply with Article IX, Section 3
Impeachment Proceedings. Within a
(2), (3) and (5) of the Constitution, to return the second impeachment complaint and/or strike it off the
period of one (1) year from the date
records of the House of Representatives, and to promulgate rules which are consistent with the
impeachment proceedings are deemed
Constitution; and (3) this Court permanently enjoin respondent House of Representatives from
initiated as provided in Section 16
proceeding with the second impeachment complaint.
hereof, no impeachment proceedings, as
In G.R. No. 160262, petitioners Sedfrey M. Candelaria, et. al., as citizens and taxpayers, alleging that
such, can be initiated against the same
the issues of the case are of transcendental importance, pray, in their petition for Certiorari/Prohibition,
official. (Italics in the original; emphasis
the issuance of a writ "perpetually" prohibiting respondent House of Representatives from filing any
and underscoring supplied)
Articles of Impeachment against the Chief Justice with the Senate; and for the issuance of a writ
"perpetually" prohibiting respondents Senate and Senate President Franklin Drilon from accepting any
Articles of Impeachment against the Chief Justice or, in the event that the Senate has accepted the
same, from proceeding with the impeachment trial.
In G.R. No. 160263, petitioners Arturo M. de Castro and Soledad Cagampang, as citizens, taxpayers,
lawyers and members of the Integrated Bar of the Philippines, alleging that their petition for Prohibition
involves public interest as it involves the use of public funds necessary to conduct the impeachment trial
on the second impeachment complaint, pray for the issuance of a writ of prohibition enjoining Congress
from conducting further proceedings on said second impeachment complaint.
In G.R. No. 160277, petitioner Francisco I. Chavez, alleging that this Court has recognized that he
has locus standi to bring petitions of this nature in the cases of Chavez v. PCGG15 and Chavez v. PEA-
Amari Coastal Bay Development Corporation,16 prays in his petition for Injunction that the second
impeachment complaint be declared unconstitutional.
In G.R. No. 160292, petitioners Atty. Harry L. Roque, et. al., as taxpayers and members of the legal
profession, pray in their petition for Prohibition for an order prohibiting respondent House of
Representatives from drafting, adopting, approving and transmitting to the Senate the second
impeachment complaint, and respondents De Venecia and Nazareno from transmitting the Articles of
Impeachment to the Senate.
In G.R. No. 160295, petitioners Representatives Salacnib F. Baterina and Deputy Speaker Raul M.
Gonzalez, alleging that, as members of the House of Representatives, they have a legal interest in
ensuring that only constitutional impeachment proceedings are initiated, pray in their petition for
Certiorari/Prohibition that the second impeachment complaint and any act proceeding therefrom be
declared null and void.
In G.R. No. 160310, petitioners Leonilo R. Alfonso et al., claiming that they have a right to be protected
against all forms of senseless spending of taxpayers' money and that they have an obligation to protect
the Supreme Court, the Chief Justice, and the integrity of the Judiciary, allege in their petition for
Certiorari and Prohibition that it is instituted as "a class suit" and pray that (1) the House Resolution
endorsing the second impeachment complaint as well as all issuances emanating therefrom be
declared null and void; and (2) this Court enjoin the Senate and the Senate President from taking
cognizance of, hearing, trying and deciding the second impeachment complaint, and issue a writ of
prohibition commanding the Senate, its prosecutors and agents to desist from conducting any
proceedings or to act on the impeachment complaint.
In G.R. No. 160318, petitioner Public Interest Center, Inc., whose members are citizens and taxpayers,
and its co-petitioner Crispin T. Reyes, a citizen, taxpayer and a member of the Philippine Bar, both
allege in their petition, which does not state what its nature is, that the filing of the second impeachment
complaint involves paramount public interest and pray that Sections 16 and 17 of the House
Impeachment Rules and the second impeachment complaint/Articles of Impeachment be declared null
and void.
In G.R. No. 160342, petitioner Atty. Fernando P. R. Perito, as a citizen and a member of the Philippine
Bar Association and of the Integrated Bar of the Philippines, and petitioner Engr. Maximo N. Menez, Jr.,
as a taxpayer, pray in their petition for the issuance of a Temporary Restraining Order and Permanent
Injunction to enjoin the House of Representatives from proceeding with the second impeachment
complaint.
In G.R. No. 160343, petitioner Integrated Bar of the Philippines, alleging that it is mandated by the Code
of Professional Responsibility to uphold the Constitution, prays in its petition for Certiorari and
Prohibition that Sections 16 and 17 of Rule V and Sections 5, 6, 7, 8, 9 of Rule III of the House
Impeachment Rules be declared unconstitutional and that the House of Representatives be
permanently enjoined from proceeding with the second impeachment complaint.
In G.R. No. 160360, petitioner-taxpayer Atty. Claro Flores prays in his petition for Certiorari and
Prohibition that the House Impeachment Rules be declared unconstitutional.
In G.R. No. 160365, petitioners U.P. Law Alumni Cebu Foundation Inc., et. al., in their petition for
Prohibition and Injunction which they claim is a class suit filed in behalf of all citizens, citing Oposa v.
Factoran17 which was filed in behalf of succeeding generations of Filipinos, pray for the issuance of a
writ prohibiting respondents House of Representatives and the Senate from conducting further
proceedings on the second impeachment complaint and that this Court declare as unconstitutional the
second impeachment complaint and the acts of respondent House of Representatives in interfering with
the fiscal matters of the Judiciary.
In G.R. No. 160370, petitioner-taxpayer Father Ranhilio Callangan Aquino, alleging that the issues in
his petition for Prohibition are of national and transcendental significance and that as an official of the
Philippine Judicial Academy, he has a direct and substantial interest in the unhampered operation of the
Supreme Court and its officials in discharging their duties in accordance with the Constitution, prays for
the issuance of a writ prohibiting the House of Representatives from transmitting the Articles of
Impeachment to the Senate and the Senate from receiving the same or giving the impeachment
complaint due course.
In G.R. No. 160376, petitioner Nilo A. Malanyaon, as a taxpayer, alleges in his petition for Prohibition
that respondents Fuentebella and Teodoro at the time they filed the second impeachment complaint,
were "absolutely without any legal power to do so, as they acted without jurisdiction as far as the
Articles of Impeachment assail the alleged abuse of powers of the Chief Justice to disburse the (JDF)."
In G.R. No. 160392, petitioners Attorneys Venicio S. Flores and Hector L. Hofilea, alleging that as
professors of law they have an abiding interest in the subject matter of their petition for Certiorari and
Prohibition as it pertains to a constitutional issue "which they are trying to inculcate in the minds of their
students," pray that the House of Representatives be enjoined from endorsing and the Senate from
trying the Articles of Impeachment and that the second impeachment complaint be declared null and
void.
In G.R. No. 160397, petitioner Atty. Dioscoro Vallejos, Jr., without alleging his locus standi, but alleging
that the second impeachment complaint is founded on the issue of whether or not the Judicial
Development Fund (JDF) was spent in accordance with law and that the House of Representatives
does not have exclusive jurisdiction in the examination and audit thereof, prays in his petition "To
Declare Complaint Null and Void for Lack of Cause of Action and Jurisdiction" that the second
impeachment complaint be declared null and void.
In G.R. No. 160403, petitioner Philippine Bar Association, alleging that the issues raised in the filing of
the second impeachment complaint involve matters of transcendental importance, prays in its petition
for Certiorari/Prohibition that (1) the second impeachment complaint and all proceedings arising
therefrom be declared null and void; (2) respondent House of Representatives be prohibited from
transmitting the Articles of Impeachment to the Senate; and (3) respondent Senate be prohibited from
accepting the Articles of Impeachment and from conducting any proceedings thereon.
In G.R. No. 160405, petitioners Democrit C. Barcenas et. al., as citizens and taxpayers, pray in their
petition for Certiorari/Prohibition that (1) the second impeachment complaint as well as the resolution of
endorsement and impeachment by the respondent House of Representatives be declared null and void
and (2) respondents Senate and Senate President Franklin Drilon be prohibited from accepting any
Articles of Impeachment against the Chief Justice or, in the event that they have accepted the same,
that they be prohibited from proceeding with the impeachment trial.
Petitions bearing docket numbers G.R. Nos. 160261, 160262 and 160263, the first three of the eighteen
which were filed before this Court,18 prayed for the issuance of a Temporary Restraining Order and/or
preliminary injunction to prevent the House of Representatives from transmitting the Articles of
Impeachment arising from the second impeachment complaint to the Senate. Petition bearing docket
number G.R. No. 160261 likewise prayed for the declaration of the November 28, 2001 House
Impeachment Rules as null and void for being unconstitutional.
Petitions bearing docket numbers G.R. Nos. 160277, 160292 and 160295, which were filed on October
28, 2003, sought similar relief. In addition, petition bearing docket number G.R. No. 160292 alleged that
House Resolution No. 260 (calling for a legislative inquiry into the administration by the Chief Justice of
the JDF) infringes on the constitutional doctrine of separation of powers and is a direct violation of the
constitutional principle of fiscal autonomy of the judiciary.
On October 28, 2003, during the plenary session of the House of Representatives, a motion was put
forth that the second impeachment complaint be formally transmitted to the Senate, but it was not
carried because the House of Representatives adjourned for lack of quorum,19 and as reflected above,
to date, the Articles of Impeachment have yet to be forwarded to the Senate.
Before acting on the petitions with prayers for temporary restraining order and/or writ of preliminary
injunction which were filed on or before October 28, 2003, Justices Puno and Vitug offered to recuse
themselves, but the Court rejected their offer. Justice Panganiban inhibited himself, but the Court
directed him to participate.
Without necessarily giving the petitions due course, this Court in its Resolution of October 28, 2003,
resolved to (a) consolidate the petitions; (b) require respondent House of Representatives and the
Senate, as well as the Solicitor General, to comment on the petitions not later than 4:30 p.m. of
November 3, 2003; (c) set the petitions for oral arguments on November 5, 2003, at 10:00 a.m.; and (d)
appointed distinguished legal experts as amici curiae.20 In addition, this Court called on petitioners and
respondents to maintain the status quo, enjoining all the parties and others acting for and in their behalf
to refrain from committing acts that would render the petitions moot.
Also on October 28, 2003, when respondent House of Representatives through Speaker Jose C. De
Venecia, Jr. and/or its co-respondents, by way of special appearance, submitted a Manifestation
asserting that this Court has no jurisdiction to hear, much less prohibit or enjoin the House of
Representatives, which is an independent and co-equal branch of government under the Constitution,
from the performance of its constitutionally mandated duty to initiate impeachment cases. On even date,
Senator Aquilino Q. Pimentel, Jr., in his own behalf, filed a Motion to Intervene (Ex Abudante
Cautela)21 and Comment, praying that "the consolidated petitions be dismissed for lack of jurisdiction of
the Court over the issues affecting the impeachment proceedings and that the sole power, authority and
jurisdiction of the Senate as the impeachment court to try and decide impeachment cases, including the
one where the Chief Justice is the respondent, be recognized and upheld pursuant to the provisions of
Article XI of the Constitution."22
Acting on the other petitions which were subsequently filed, this Court resolved to (a) consolidate them
with the earlier consolidated petitions; (b) require respondents to file their comment not later than 4:30
p.m. of November 3, 2003; and (c) include them for oral arguments on November 5, 2003.
On October 29, 2003, the Senate of the Philippines, through Senate President Franklin M. Drilon, filed a
Manifestation stating that insofar as it is concerned, the petitions are plainly premature and have no
basis in law or in fact, adding that as of the time of the filing of the petitions, no justiciable issue was
presented before it since (1) its constitutional duty to constitute itself as an impeachment court
commences only upon its receipt of the Articles of Impeachment, which it had not, and (2) the principal
issues raised by the petitions pertain exclusively to the proceedings in the House of Representatives.
On October 30, 2003, Atty. Jaime Soriano filed a "Petition for Leave to Intervene" in G.R. Nos. 160261,
160262, 160263, 160277, 160292, and 160295, questioning the status quo Resolution issued by this
Court on October 28, 2003 on the ground that it would unnecessarily put Congress and this Court in a
"constitutional deadlock" and praying for the dismissal of all the petitions as the matter in question is not
yet ripe for judicial determination.
On November 3, 2003, Attorneys Romulo B. Macalintal and Pete Quirino Quadra filed in G.R. No.
160262 a "Motion for Leave of Court to Intervene and to Admit the Herein Incorporated Petition in
Intervention."
On November 4, 2003, Nagmamalasakit na mga Manananggol ng mga Manggagawang Pilipino,
Inc. filed a Motion for Intervention in G.R. No. 160261. On November 5, 2003, World War II Veterans
Legionnaires of the Philippines, Inc. also filed a "Petition-in-Intervention with Leave to Intervene" in G.R.
Nos. 160261, 160262, 160263, 160277, 160292, 160295, and 160310.
The motions for intervention were granted and both Senator Pimentel's Comment and Attorneys
Macalintal and Quadra's Petition in Intervention were admitted.
On November 5-6, 2003, this Court heard the views of the amici curiae and the arguments of
petitioners, intervenors Senator Pimentel and Attorney Makalintal, and Solicitor General Alfredo
Benipayo on the principal issues outlined in an Advisory issued by this Court on November 3, 2003, to
wit:
Whether the certiorari jurisdiction of the Supreme Court may be invoked; who can invoke it; on
what issues and at what time; and whether it should be exercised by this Court at this time.
In discussing these issues, the following may be taken up:
a) locus standi of petitioners;
b) ripeness(prematurity; mootness);
c) political question/justiciability;
d) House's "exclusive" power to initiate all cases of impeachment;
e) Senate's "sole" power to try and decide all cases of impeachment;
f) constitutionality of the House Rules on Impeachment vis-a-vis Section 3(5) of
Article XI of the Constitution; and
g) judicial restraint (Italics in the original)
In resolving the intricate conflux of preliminary and substantive issues arising from the instant petitions
as well as the myriad arguments and opinions presented for and against the grant of the reliefs prayed
for, this Court has sifted and determined them to be as follows: (1) the threshold and novel issue of
whether or not the power of judicial review extends to those arising from impeachment proceedings; (2)
whether or not the essential pre-requisites for the exercise of the power of judicial review have been
fulfilled; and (3) the substantive issues yet remaining. These matters shall now be discussed in seriatim.
Judicial Review
As reflected above, petitioners plead for this Court to exercise the power of judicial review to determine
the validity of the second impeachment complaint.
This Court's power of judicial review is conferred on the judicial branch of the government in Section 1,
Article VIII of our present 1987 Constitution:
SECTION 1. The judicial power shall be vested in one Supreme Court and in such lower courts
as may be established by law.
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 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. (Emphasis supplied)
Such power of judicial review was early on exhaustively expounded upon by Justice Jose P. Laurel in
the definitive 1936 case of Angara v. Electoral Commission23 after the effectivity of the 1935
Constitution whose provisions, unlike the present Constitution, did not contain the present provision in
Article VIII, Section 1, par. 2 on what judicial power includes. Thus, Justice Laurel discoursed:
x x x In times of social disquietude or political excitement, the great landmarks of the
Constitution are apt to be forgotten or marred, if not entirely obliterated. In cases of conflict, the
judicial department is the only constitutional organ which can be called upon to determine the
proper allocation of powers between the several departments and among the integral or
constituent units thereof.
As any human production, our Constitution is of course lacking perfection and perfectibility, but
as much as it was within the power of our people, acting through their delegates to so provide,
that instrument which is the expression of their sovereignty however limited, has established a
republican government intended to operate and function as a harmonious whole, under a
system of checks and balances, and subject to specific limitations and restrictions provided in
the said instrument. The Constitution sets forth in no uncertain language the restrictions and
limitations upon governmental powers and agencies. If these restrictions and limitations are
transcended it would be inconceivable if the Constitution had not provided for a mechanism by
which to direct the course of government along constitutional channels, for then the distribution
of powers would be mere verbiage, the bill of rights mere expressions of sentiment, and the
principles of good government mere political apothegms. Certainly, the limitations and
restrictions embodied in our Constitution are real as they should be in any living constitution. In
the United States where no express constitutional grant is found in their constitution, the
possession of this moderating power of the courts, not to speak of its historical origin and
development there, has been set at rest by popular acquiescence for a period of more than
one and a half centuries. In our case, this moderating power is granted, if not expressly, by
clear implication from section 2 of article VIII of our Constitution.
The Constitution is a definition of the powers of government. Who is to determine the nature,
scope and extent of such powers? The Constitution itself has provided for the instrumentality
of the judiciary as the rational way. And when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the other departments; it does not in reality
nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation
assigned to it by the Constitution to determine conflicting claims of authority under the
 Constitution and to establish for the parties in an actual controversy the rights which that
instrument secures and guarantees to them. This is in truth all that is involved in what is
termed "judicial supremacy" which properly is the power of judicial review under the
Constitution. Even then, this power of judicial review is limited to actual cases and
controversies to be exercised after full opportunity of argument by the parties, and limited
further to the constitutional question raised or the very lis mota presented. Any attempt at
abstraction could only lead to dialectics and barren legal questions and to sterile conclusions
unrelated to actualities. Narrowed as its function is in this manner, the judiciary does not pass
upon questions of wisdom, justice or expediency of legislation. More than that, courts accord
the presumption of constitutionality to legislative enactments, not only because the legislature
is presumed to abide by the Constitution but also because 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.24(Italics in the original; emphasis and underscoring supplied)
As pointed out by Justice Laurel, this "moderating power" to "determine the proper allocation of powers"
of the different branches of government and "to direct the course of government along constitutional
channels" is inherent in all courts25 as a necessary consequence of the judicial power itself, which
is "the power of the court to settle actual controversies involving rights which are legally demandable
and enforceable."26
Thus, even in the United States where the power of judicial review is not explicitly conferred upon the
courts by its Constitution, such power has "been set at rest by popular acquiescence for a period of
more than one and a half centuries." To be sure, it was in the 1803 leading case of Marbury v.
Madison27 that the power of judicial review was first articulated by Chief Justice Marshall, to wit:
It is also not entirely unworthy of observation, that in declaring what shall be the supreme law
of the land, the constitution itself is first mentioned; and not the laws of the United States
generally, but those only which shall be made in pursuance of the constitution, have that rank.
Thus, the particular phraseology of the constitution of the United States confirms and
strengthens the principle, supposed to be essential to all written constitutions, that a law
repugnant to the constitution is void; and that courts, as well as other departments, are bound
by that instrument.28(Italics in the original; emphasis supplied)
In our own jurisdiction, as early as 1902, decades before its express grant in the 1935 Constitution, the
power of judicial review was exercised by our courts to invalidate constitutionally infirm acts. 29 And as
pointed out by noted political law professor and former Supreme Court Justice Vicente V.
Mendoza,30 the executive and legislative branches of our government in fact effectively acknowledged
this power of judicial review in Article 7 of the Civil Code, to wit:
Article 7. Laws are repealed only by subsequent ones, and their violation or non-observance
shall not be excused by disuse, or custom or practice to the contrary.
When the courts declare a law to be inconsistent with the Constitution, the former shall be void
and the latter shall govern.
Administrative or executive acts, orders and regulations shall be valid only when they are not
contrary to the laws or the Constitution. (Emphasis supplied)
As indicated in Angara v. Electoral Commission,31 judicial review is indeed an integral component of the
delicate system of checks and balances which, together with the corollary principle of separation of
powers, forms the bedrock of our republican form of government and insures that its vast powers are
utilized only for the benefit of the people for which it serves.
The separation of powers is a fundamental principle in our system of government. It obtains
not through express provision but by actual division in our Constitution. Each department of the
government has exclusive cognizance of matters within its jurisdiction, and is supreme within
its own sphere. But it does not follow from the fact that the three powers are to be kept
separate and distinct that the Constitution intended them to be absolutely unrestrained and
independent of each other. The Constitution has provided for an elaborate system of checks
and balances to secure coordination in the workings of the various departments of the
government. x x x And the judiciary in turn, with the Supreme Court as the final arbiter,
effectively checks the other departments in the exercise of its power to determine the law, and
hence to declare executive and legislative acts void if violative of the Constitution.32 (Emphasis
and underscoring supplied)
In the scholarly estimation of former Supreme Court Justice Florentino Feliciano, "x x x judicial review is
essential for the maintenance and enforcement of the separation of powers and the balancing of powers
among the three great departments of government through the definition and maintenance of the
boundaries of authority and control between them." 33 To him, "[j]udicial review is the chief, indeed the
only, medium of participation or instrument of intervention of the judiciary in that balancing
operation."34
To ensure the potency of the power of judicial review to curb grave abuse of discretion by "any branch
or instrumentalities of government," the afore-quoted Section 1, Article VIII of the Constitution engraves,
for the first time into its history, into block letter law the so-called "expanded certiorari jurisdiction" of this
Court, the nature of and rationale for which are mirrored in the following excerpt from the sponsorship
speech of its proponent, former Chief Justice Constitutional Commissioner Roberto Concepcion:
xxx
The first section starts with a sentence copied from former Constitutions. It says:
The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.
I suppose nobody can question it.
The next provision is new in our constitutional law. I will read it first and explain.
Judicial power includes the duty of courts of justice to settle actual controversies involving
rights which are legally demandable and enforceable and to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part or
instrumentality of the government.
Fellow Members of this Commission, this is actually a product of our experience during martial
law. As a matter of fact, it has some antecedents in the past, but the role of the judiciary during
the deposed regime was marred considerably by the circumstance that in a number of cases
against the government, which then had no legal defense at all, the solicitor general set up the
defense of political questions and got away with it. As a consequence, certain principles
concerning particularly the writ of habeas corpus, that is, the authority of courts to order the
release of political detainees, and other matters related to the operation and effect of martial
law failed because the government set up the defense of political question. And the Supreme
Court said: "Well, since it is political, we have no authority to pass upon it." The Committee on
the Judiciary feels that this was not a proper solution of the questions involved. It did not
merely request an encroachment upon the rights of the people, but it, in effect, encouraged
further violations thereof during the martial law regime. x x x
xxx
Briefly stated, courts of justice determine the limits of power of the agencies and offices of the
government as well as those of its officers. In other words, the judiciary is the final arbiter on
the question whether or not a branch of government or any of its officials has acted without
jurisdiction or in excess of jurisdiction, or so capriciously as to constitute an abuse of discretion
amounting to excess of jurisdiction or lack of jurisdiction. This is not only a judicial power but a
duty to pass judgment on matters of this nature.
This is the background of paragraph 2 of Section 1, which means that the courts cannot
hereafter evade the duty to settle matters of this nature, by claiming that such matters
constitute a political question.35 (Italics in the original; emphasis and underscoring supplied)
To determine the merits of the issues raised in the instant petitions, this Court must necessarily turn to
the Constitution itself which employs the well-settled principles of constitutional construction.
First, verba legis, that is, wherever possible, the words used in the Constitution must be given
their ordinary meaning except where technical terms are employed. Thus, in J.M. Tuason & Co., Inc. v.
Land Tenure Administration,36 this Court, speaking through Chief Justice Enrique Fernando, declared:
 We look to the language of the document itself in our search for its meaning. We do not of
course stop there, but that is where we begin. It is to be assumed that the words in which
constitutional provisions are couched express the objective sought to be attained. They are to
be given theirordinary meaning except where technical terms are employed in which case the
significance thus attached to them prevails. As the Constitution is not primarily a lawyer's
document, it being essential for the rule of law to obtain that it should ever be present in the
people's consciousness, its language as much as possible should be understood in the sense
they have in common use. What it says according to the text of the provision to be construed
compels acceptance and negates the power of the courts to alter it, based on the postulate
that the framers and the people mean what they say. Thus these are the cases where the
need for construction is reduced to a minimum.37 (Emphasis and underscoring supplied)
Second, where there is ambiguity, ratio legis est anima. The words of the Constitution should be
interpreted in accordance with the intent of its framers. And so did this Court apply this principle in Civil
Liberties Union v. Executive Secretary38 in this wise:
A foolproof yardstick in constitutional construction is the intention underlying the provision
under consideration. Thus, it has been held that the Court in construing a Constitution should
bear in mind the object sought to be accomplished by its adoption, and the evils, if any, sought
to be prevented or remedied. A doubtful provision will be examined in the light of the history of
the times, and the condition and circumstances under which the Constitution was framed. The
object is to ascertain the reason which induced the framers of the Constitution to enact the
particular provision and the purpose sought to be accomplished thereby, in order to construe
the whole as to make the words consonant to that reason and calculated to effect that
purpose.39 (Emphasis and underscoring supplied)
As it did in Nitafan v. Commissioner on Internal Revenue40 where, speaking through Madame Justice
Amuerfina A. Melencio-Herrera, it declared:
x x x The ascertainment of that intent is but in keeping with the fundamental principle of
constitutional construction that the intent of the framers of the organic law and of the people
adopting it should be given effect. The primary task in constitutional construction is to ascertain
and thereafter assure the realization of the purpose of the framers and of the people in the
adoption of the Constitution. It may also be safely assumed that the people in ratifying the
Constitution were guided mainly by the explanation offered by the framers.41 (Emphasis and
underscoring supplied)
Finally, ut magis valeat quam pereat. The Constitution is to be interpreted as a whole. Thus,
in Chiongbian v. De Leon,42 this Court, through Chief Justice Manuel Moran declared:
x x x [T]he members of the Constitutional Convention could not have dedicated a provision of
our Constitution merely for the benefit of one person without considering that it could also
affect others. When they adopted subsection 2, they permitted, if not willed, that said provision
should function to the full extent of its substance and its terms, not by itself alone, but in
conjunction with all other provisions of that great document. 43 (Emphasis and underscoring
supplied)
Likewise, still in Civil Liberties Union v. Executive Secretary,44 this Court affirmed that:
It is a well-established rule in constitutional construction that no one provision of the
Constitution is to be separated from all the others, to be considered alone, but that all the
provisions bearing upon a particular subject are to be brought into view and to be so
interpreted as to effectuate the great purposes of the instrument. Sections bearing on a
particular subject should be considered and interpreted together as to effectuate the whole
purpose of the Constitution and one section is not to be allowed to defeat another, if by any
reasonable construction, the two can be made to stand together.
In other words, the court must harmonize them, if practicable, and must lean in favor of a
construction which will render every word operative, rather than one which may make the
words idle and nugatory.45(Emphasis supplied)
If, however, the plain meaning of the word is not found to be clear, resort to other aids is available. In
still the same case of Civil Liberties Union v. Executive Secretary, this Court expounded:
While it is permissible in this jurisdiction to consult the debates and proceedings of the
constitutional convention in order to arrive at the reason and purpose of the resulting
Constitution, resort thereto may be had 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 reasons 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 of 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's understanding
thereof.46 (Emphasis and underscoring supplied)
It is in the context of the foregoing backdrop of constitutional refinement and jurisprudential application
of the power of judicial review that respondents Speaker De Venecia, et. al. and intervenor Senator
Pimentel raise the novel argument that the Constitution has excluded impeachment proceedings from
the coverage of judicial review.
Briefly stated, it is the position of respondents Speaker De Venecia et. al. that impeachment is a political
action which cannot assume a judicial character. Hence, any question, issue or incident arising at any
stage of the impeachment proceeding is beyond the reach of judicial review. 47
For his part, intervenor Senator Pimentel contends that the Senate's "sole power to try" impeachment
cases48 (1) entirely excludes the application of judicial review over it; and (2) necessarily includes the
Senate's power to determine constitutional questions relative to impeachment proceedings. 49
In furthering their arguments on the proposition that impeachment proceedings are outside the scope of
judicial review, respondents Speaker De Venecia, et. al. and intervenor Senator Pimentel rely heavily
on American authorities, principally the majority opinion in the case of Nixon v. United States.50 Thus,
they contend that the exercise of judicial review over impeachment proceedings is inappropriate since it
runs counter to the framers' decision to allocate to different fora the powers to try impeachments and to
try crimes; it disturbs the system of checks and balances, under which impeachment is the only
legislative check on the judiciary; and it would create a lack of finality and difficulty in fashioning
relief.51 Respondents likewise point to deliberations on the US Constitution to show the intent to isolate
judicial power of review in cases of impeachment.
Respondents' and intervenors' reliance upon American jurisprudence, the American Constitution and
American authorities cannot be credited to support the proposition that the Senate's "sole power to try
and decide impeachment cases," as provided for under Art. XI, Sec. 3(6) of the Constitution, is a
textually demonstrable constitutional commitment of all issues pertaining to impeachment to the
legislature, to the total exclusion of the power of judicial review to check and restrain any grave abuse of
the impeachment process. Nor can it reasonably support the interpretation that it necessarily confers
upon the Senate the inherently judicial power to determine constitutional questions incident to
impeachment proceedings.
Said American jurisprudence and authorities, much less the American Constitution, are of dubious
application for these are no longer controlling within our jurisdiction and have only limited persuasive
merit insofar as Philippine constitutional law is concerned. As held in the case of Garcia vs.
COMELEC,52 "[i]n resolving constitutional disputes, [this Court] should not be beguiled by foreign
jurisprudence some of which are hardly applicable because they have been dictated by different
constitutional settings and needs."53 Indeed, although the Philippine Constitution can trace its origins to
that of the United States, their paths of development have long since diverged. In the colorful words of
Father Bernas, "[w]e have cut the umbilical cord."
The major difference between the judicial power of the Philippine Supreme Court and that of the U.S.
Supreme Court is that while the power of judicial review is only impliedly granted to the U.S. Supreme
Court and is discretionary in nature, that granted to the Philippine Supreme Court and lower courts, as
expressly provided for in the Constitution, is not just a power but also a duty, and it was given an
expanded definition to include the power to correct any grave abuse of discretion on the part of any
government branch or instrumentality.
There are also glaring distinctions between the U.S. Constitution and the Philippine Constitution with
respect to the power of the House of Representatives over impeachment proceedings. While the U.S.
Constitution bestows sole power of impeachment to the House of Representatives without
limitation,54 our Constitution, though vesting in the House of Representatives the exclusive power to
initiate impeachment cases,55 provides for several limitations to the exercise of such power as
embodied in Section 3(2), (3), (4) and (5), Article XI thereof. These limitations include the manner of
filing, required vote to impeach, and the one year bar on the impeachment of one and the same official.
Respondents are also of the view that judicial review of impeachments undermines their finality and
may also lead to conflicts between Congress and the judiciary. Thus, they call upon this Court to
exercise judicial statesmanship on the principle that "whenever possible, the Court should defer to the
judgment of the people expressed legislatively, recognizing full well the perils of judicial willfulness and
pride."56
But did not the people also express their will when they instituted the above-mentioned safeguards in
the Constitution? This shows that the Constitution did not intend to leave the matter of impeachment to
the sole discretion of Congress. Instead, it provided for certain well-defined limits, or in the language
of Baker v. Carr,57"judicially discoverable standards" for determining the validity of the exercise of such
discretion, through the power of judicial review.
The cases of Romulo v. Yniguez58 and Alejandrino v. Quezon,59 cited by respondents in support of the
argument that the impeachment power is beyond the scope of judicial review, are not in point. These
cases concern the denial of petitions for writs of mandamus to compel the legislature to perform non-
ministerial acts, and do not concern the exercise of the power of judicial review.
There is indeed a plethora of cases in which this Court exercised the power of judicial review over
congressional action. Thus, in Santiago v. Guingona, Jr.,60 this Court ruled that it is well within the
power and jurisdiction of the Court to inquire whether the Senate or its officials committed a violation of
the Constitution or grave abuse of discretion in the exercise of their functions and prerogatives.
In Tanada v. Angara,61 in seeking to nullify an act of the Philippine Senate on the ground that it
contravened the Constitution, it held that the petition raises a justiciable controversy and that when an
action of the legislative branch is seriously alleged to have infringed the Constitution, it becomes not
only the right but in fact the duty of the judiciary to settle the dispute. In Bondoc v. Pineda,62 this Court
declared null and void a resolution of the House of Representatives withdrawing the nomination, and
rescinding the election, of a congressman as a member of the House Electoral Tribunal for being
violative of Section 17, Article VI of the Constitution. In Coseteng v. Mitra,63 it held that the resolution of
whether the House representation in the Commission on Appointments was based on proportional
representation of the political parties as provided in Section 18, Article VI of the Constitution is subject
to judicial review. In Daza v. Singson,64 it held that the act of the House of Representatives in removing
the petitioner from the Commission on Appointments is subject to judicial review. In Tanada v.
Cuenco,65 it held that although under the Constitution, the legislative power is vested exclusively in
Congress, this does not detract from the power of the courts to pass upon the constitutionality of acts of
Congress. In Angara v. Electoral Commission,66 it ruled that confirmation by the National Assembly of
the election of any member, irrespective of whether his election is contested, is not essential before
such member-elect may discharge the duties and enjoy the privileges of a member of the National
Assembly.
Finally, there exists no constitutional basis for the contention that the exercise of judicial review over
impeachment proceedings would upset the system of checks and balances. Verily, the Constitution is to
be interpreted as a whole and "one section is not to be allowed to defeat another."67 Both are integral
components of the calibrated system of independence and interdependence that insures that no branch
of government act beyond the powers assigned to it by the Constitution.
Essential Requisites for Judicial Review
As clearly stated in Angara v. Electoral Commission, the courts' power of judicial review, like almost all
powers conferred by the Constitution, is subject to several limitations, namely: (1) an actual case or
controversy calling for the exercise of judicial power; (2) the person challenging the act must have
"standing" to challenge; he 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; (3) the question of constitutionality
must be raised at the earliest possible opportunity; and (4) the issue of constitutionality must be the
very lis mota of the case.
x x x Even then, this power of judicial review is limited to actual cases and controversies to be
exercised after full opportunity of argument by the parties, and limited further to the
constitutional question raised or the very lis mota presented. Any attempt at abstraction could
only lead to dialectics and barren legal questions and to sterile conclusions unrelated to
actualities. Narrowed as its function is in this manner, the judiciary does not pass upon
questions of wisdom, justice or expediency of legislation. More than that, courts accord the
presumption of constitutionality to legislative enactments, not only because the legislature is
presumed to abide by the Constitution but also because 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.68 (Italics in the original)
Standing
Locus standi or legal standing or has been defined as a personal and substantial interest in the case
such that the party has sustained or will sustain direct injury as a result of the governmental act that is
being challenged. The gist of the question of standing is whether a party alleges such personal stake in
the outcome of the controversy as to assure that concrete adverseness which sharpens the
presentation of issues upon which the court depends for illumination of difficult constitutional
questions.69
Intervenor Soriano, in praying for the dismissal of the petitions, contends that petitioners do not have
standing since only the Chief Justice has sustained and will sustain direct personal injury. Amicus
curiae former Justice Minister and Solicitor General Estelito Mendoza similarly contends.
Upon the other hand, the Solicitor General asserts that petitioners have standing since this Court had,
in the past, accorded standing to taxpayers, voters, concerned citizens, legislators in cases involving
paramount public interest70 and transcendental importance,71 and that procedural matters are
subordinate to the need to determine whether or not the other branches of the government have kept
themselves within the limits of the Constitution and the laws and that they have not abused the
discretion given to them.72 Amicus curiae Dean Raul Pangalangan of the U.P. College of Law is of the
same opinion, citing transcendental importance and the well-entrenched rule exception that, when the
real party in interest is unable to vindicate his rights by seeking the same remedies, as in the case of
the Chief Justice who, for ethical reasons, cannot himself invoke the jurisdiction of this Court, the courts
will grant petitioners standing.
There is, however, a difference between the rule on real-party-in-interest and the rule on standing, for
the former is a concept of civil procedure73 while the latter has constitutional underpinnings.74 In view of
the arguments set forth regarding standing, it behooves the Court to reiterate the ruling in Kilosbayan,
Inc. v. Morato75 to clarify what is meant by locus standi and to distinguish it from real party-in-interest.
The difference between the rule on standing and real party in interest has been noted by
authorities thus: "It is important to note . . . that standing because of its constitutional and
public policy underpinnings, is very different from questions relating to whether a particular
plaintiff is the real party in interest or has capacity to sue. Although all three requirements are
directed towards ensuring that only certain parties can maintain an action, standing restrictions
require a partial consideration of the merits, as well as broader policy concerns relating to the
proper role of the judiciary in certain areas.
Standing is a special concern in constitutional law because in some cases suits are brought
not by parties who have been personally injured by the operation of a law or by official action
taken, but by concerned citizens, taxpayers or voters who actually sue in the public interest.
Hence the question in standing is whether such parties have "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."
xxx
On the other hand, the question as to "real party in interest" is whether he is "the party who
would be benefited or injured by the judgment, or the 'party entitled to the avails of the
suit.'"76 (Citations omitted)
While rights personal to the Chief Justice may have been injured by the alleged unconstitutional acts of
the House of Representatives, none of the petitioners before us asserts a violation of the personal rights
of the Chief Justice. On the contrary, they invariably invoke the vindication of their own rights as
taxpayers; members of Congress; citizens, individually or in a class suit; and members of the bar and of
the legal profession which were supposedly violated by the alleged unconstitutional acts of the House
of Representatives.
In a long line of cases, however, concerned citizens, taxpayers and legislators when specific
requirements have been met have been given standing by this Court.
When suing as a citizen, the interest of the petitioner assailing the constitutionality of a statute must be
direct and personal. He must be able to show, not only that the law or any government act is invalid, but
also that he sustained or is in imminent danger of sustaining some direct injury as a result of its
enforcement, and not merely that he suffers thereby in some indefinite way. It must appear that the
person complaining has been or is about to be denied some right or privilege to which he is lawfully
entitled or that he is about to be subjected to some burdens or penalties by reason of the statute or act
complained of.77 In fine, when the proceeding involves the assertion of a public right, 78 the mere fact
that he is a citizen satisfies the requirement of personal interest.
In the case of a taxpayer, he is allowed to sue where there is a claim that public funds are illegally
disbursed, or that public money is being deflected to any improper purpose, or that there is a wastage of
public funds through the enforcement of an invalid or unconstitutional law. 79 Before he can invoke the
power of judicial review, however, he must specifically prove that he has sufficient interest in preventing
the illegal expenditure of money raised by taxation and that he would sustain a direct injury as a result
of the enforcement of the questioned statute or contract. It is not sufficient that he has merely a general
interest common to all members of the public.80
At all events, courts are vested with discretion as to whether or not a taxpayer's suit should be
entertained.81 This Court opts to grant standing to most of the petitioners, given their allegation that any
impending transmittal to the Senate of the Articles of Impeachment and the ensuing trial of the Chief
Justice will necessarily involve the expenditure of public funds.
As for a legislator, he is allowed to sue to question the validity of any official action which he claims
infringes his prerogatives as a legislator.82 Indeed, a member of the House of Representatives has
standing to maintain inviolate the prerogatives, powers and privileges vested by the Constitution in his
office.83
While an association has legal personality to represent its members, 84 especially when it is composed
of substantial taxpayers and the outcome will affect their vital interests, 85 the mere invocation by
the Integrated Bar of the Philippines or any member of the legal profession of the duty to preserve the
rule of law and nothing more, although undoubtedly true, does not suffice to clothe it with standing. Its
interest is too general. It is shared by other groups and the whole citizenry. However, a reading of the
petitions shows that it has advanced constitutional issues which deserve the attention of this Court in
view of their seriousness, novelty and weight as precedents.86 It, therefore, behooves this Court to relax
the rules on standing and to resolve the issues presented by it.
In the same vein, when dealing with class suits filed in behalf of all citizens, persons intervening must
be sufficiently numerous to fully protect the interests of all concerned 87 to enable the court to deal
properly with all interests involved in the suit,88 for a judgment in a class suit, whether favorable or
unfavorable to the class, is, under the res judicata principle, binding on all members of the class
whether or not they were before the court.89Where it clearly appears that not all interests can be
sufficiently represented as shown by the divergent issues raised in the numerous petitions before this
Court, G.R. No. 160365 as a class suit ought to fail. Since petitionersadditionally allege standing as
citizens and taxpayers, however, their petition will stand.
The Philippine Bar Association, in G.R. No. 160403, invokes the sole ground of transcendental
importance, while Atty. Dioscoro U. Vallejos, in G.R. No. 160397, is mum on his standing.
There being no doctrinal definition of transcendental importance, the following instructive determinants
formulated by former Supreme Court Justice Florentino P. Feliciano are instructive: (1) the character of
the funds or other assets involved in the case; (2) the presence of a clear case of disregard of a
constitutional or statutory prohibition by the public respondent agency or instrumentality of the
government; and (3) the lack of any other party with a more direct and specific interest in raising the
questions being raised.90 Applying these determinants, this Court is satisfied that the issues raised
herein are indeed of transcendental importance.
In not a few cases, this Court has in fact adopted a liberal attitude on the locus standi of a petitioner
where the petitioner is able to craft an issue of transcendental significance to the people, as when the
issues raised are of paramount importance to the public.91 Such liberality does not, however, mean that
the requirement that a party should have an interest in the matter is totally eliminated. A party must, at
the very least, still plead the existence of such interest, it not being one of which courts can take judicial
notice. In petitioner Vallejos' case, he failed to allege any interest in the case. He does not thus have
standing.
With respect to the motions for intervention, Rule 19, Section 2 of the Rules of Court requires an
intervenor to possess a legal interest in the matter in litigation, or in the success of either of the parties,
or an interest against both, or is so situated as to be adversely affected by a distribution or other
disposition of property in the custody of the court or of an officer thereof. While intervention is not a
matter of right, it may be permitted by the courts when the applicant shows facts which satisfy the
requirements of the law authorizing intervention.92
In Intervenors Attorneys Romulo Macalintal and Pete Quirino Quadra's case, they seek to join
petitioners Candelaria, et. al. in G.R. No. 160262. Since, save for one additional issue, they raise the
same issues and the same standing, and no objection on the part of petitioners Candelaria, et. al. has
been interposed, this Court as earlier stated, granted the Motion for Leave of Court to Intervene and
Petition-in-Intervention.
Nagmamalasakit na mga Manananggol ng mga Manggagawang Pilipino, Inc., et. al. sought to join
petitioner Francisco in G.R. No. 160261. Invoking their right as citizens to intervene, alleging that "they
will suffer if this insidious scheme of the minority members of the House of Representatives is
successful," this Court found the requisites for intervention had been complied with.
Alleging that the issues raised in the petitions in G.R. Nos. 160261, 160262, 160263, 160277, 160292,
160295, and 160310 were of transcendental importance, World War II Veterans Legionnaires of the
Philippines, Inc. filed a "Petition-in-Intervention with Leave to Intervene" to raise the additional issue of
whether or not the second impeachment complaint against the Chief Justice is valid and based on any
of the grounds prescribed by the Constitution.
Finding that Nagmamalasakit na mga Manananggol ng mga Manggagawang Pilipino, Inc., et al. and
World War II Veterans Legionnaires of the Philippines, Inc. possess a legal interest in the matter in
litigation the respective motions to intervene were hereby granted.
Senator Aquilino Pimentel, on the other hand, sought to intervene for the limited purpose of making of
record and arguing a point of view that differs with Senate President Drilon's. He alleges that submitting
to this Court's jurisdiction as the Senate President does will undermine the independence of the Senate
which will sit as an impeachment court once the Articles of Impeachment are transmitted to it from the
House of Representatives. Clearly, Senator Pimentel possesses a legal interest in the matter in
litigation, he being a member of Congress against which the herein petitions are directed. For this
reason, and to fully ventilate all substantial issues relating to the matter at hand, his Motion to Intervene
was granted and he was, as earlier stated, allowed to argue.
Lastly, as to Jaime N. Soriano's motion to intervene, the same must be denied for, while he asserts an
interest as a taxpayer, he failed to meet the standing requirement for bringing taxpayer's suits as set
forth in Dumlao v. Comelec,93 to wit:
 x x x While, concededly, the elections to be held involve the expenditure of public moneys,
nowhere in their Petition do said petitioners allege that their tax money is "being extracted and
spent in violation of specific constitutional protection against abuses of legislative power," or
that there is a misapplication of such funds by respondent COMELEC, or that public money is
being deflected to any improper purpose. Neither do petitioners seek to restrain respondent
from wasting public funds through the enforcement of an invalid or unconstitutional
law.94 (Citations omitted)
In praying for the dismissal of the petitions, Soriano failed even to allege that the act of petitioners will
result in illegal disbursement of public funds or in public money being deflected to any improper
purpose. Additionally, his mere interest as a member of the Bar does not suffice to clothe him with
standing.
Ripeness and Prematurity
In Tan v. Macapagal,95 this Court, through Chief Justice Fernando, held that for a case to be considered
ripe for adjudication, "it is a prerequisite that something had by then been accomplished or performed
by either branch before a court may come into the picture." 96 Only then may the courts pass on the
validity of what was done, if and when the latter is challenged in an appropriate legal proceeding.
The instant petitions raise in the main the issue of the validity of the filing of the second impeachment
complaint against the Chief Justice in accordance with the House Impeachment Rules adopted by the
12th Congress, the constitutionality of which is questioned. The questioned acts having been carried
out, i.e., the second impeachment complaint had been filed with the House of Representatives and the
2001 Rules have already been already promulgated and enforced, the prerequisite that the alleged
unconstitutional act should be accomplished and performed before suit, as Tan v. Macapagal holds, has
been complied with.
Related to the issue of ripeness is the question of whether the instant petitions are premature. Amicus
curiaeformer Senate President Jovito R. Salonga opines that there may be no urgent need for this Court
to render a decision at this time, it being the final arbiter on questions of constitutionality anyway. He
thus recommends that all remedies in the House and Senate should first be exhausted.
Taking a similar stand is Dean Raul Pangalangan of the U.P. College of Law who suggests to this Court
to take judicial notice of on-going attempts to encourage signatories to the second impeachment
complaint to withdraw their signatures and opines that the House Impeachment Rules provide for an
opportunity for members to raise constitutional questions themselves when the Articles of Impeachment
are presented on a motion to transmit to the same to the Senate. The dean maintains that even
assuming that the Articles are transmitted to the Senate, the Chief Justice can raise the issue of their
constitutional infirmity by way of a motion to dismiss.
The dean's position does not persuade. First, the withdrawal by the Representatives of their signatures
would not, by itself, cure the House Impeachment Rules of their constitutional infirmity. Neither would
such a withdrawal, by itself, obliterate the questioned second impeachment complaint since it would
only place it under the ambit of Sections 3(2) and (3) of Article XI of the Constitution 97 and, therefore,
petitioners would continue to suffer their injuries.
Second and most importantly, the futility of seeking remedies from either or both Houses of Congress
before coming to this Court is shown by the fact that, as previously discussed, neither the House of
Representatives nor the Senate is clothed with the power to rule with definitiveness on the issue of
constitutionality, whether concerning impeachment proceedings or otherwise, as said power is
exclusively vested in the judiciary by the earlier quoted Section I, Article VIII of the Constitution.
Remedy cannot be sought from a body which is bereft of power to grant it.
Justiciability
In the leading case of Tanada v. Cuenco,98 Chief Justice Roberto Concepcion defined the term "political
question," viz:
[T]he term "political question" connotes, in legal parlance, what it means in ordinary parlance,
namely, a question of policy. In other words, in the language of Corpus Juris Secundum, it
refers to "those questions which, under the Constitution, are to be decided by the people in
their sovereign capacity, or in regard to which full discretionary authority has been delegated to
the Legislature or executive branch of the Government." It is concerned with issues dependent
upon the wisdom, not legality, of a particular measure.99 (Italics in the original)
Prior to the 1973 Constitution, without consistency and seemingly without any rhyme or reason, this
Court vacillated on its stance of taking cognizance of cases which involved political questions. In some
cases, this Court hid behind the cover of the political question doctrine and refused to exercise its power
of judicial review.100 In other cases, however, despite the seeming political nature of the therein issues
involved, this Court assumed jurisdiction whenever it found constitutionally imposed limits on powers or
functions conferred upon political bodies.101 Even in the landmark 1988 case of Javellana v. Executive
Secretary102 which raised the issue of whether the 1973 Constitution was ratified, hence, in force, this
Court shunted the political question doctrine and took cognizance thereof. Ratification by the people of
a Constitution is a political question, it being a question decided by the people in their sovereign
capacity.
The frequency with which this Court invoked the political question doctrine to refuse to take jurisdiction
over certain cases during the Marcos regime motivated Chief Justice Concepcion, when he became a
Constitutional Commissioner, to clarify this Court's power of judicial review and its application on issues
involving political questions, viz:
MR. CONCEPCION. Thank you, Mr. Presiding Officer.
I will speak on the judiciary. Practically, everybody has made, I suppose, the usual comment that the
judiciary is the weakest among the three major branches of the service. Since the legislature holds the
purse and the executive the sword, the judiciary has nothing with which to enforce its decisions or
commands except the power of reason and appeal to conscience which, after all, reflects the will of
God, and is the most powerful of all other powers without exception. x x x And so, with the body's
indulgence, I will proceed to read the provisions drafted by the Committee on the Judiciary.
The first section starts with a sentence copied from former Constitutions. It says:
The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.
I suppose nobody can question it.
The next provision is new in our constitutional law. I will read it first and explain.
Judicial power includes the duty of courts of justice to settle actual controversies involving
rights which are legally demandable and enforceable and to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part or
instrumentality of the government.
Fellow Members of this Commission, this is actually a product of our experience during martial
law. As a matter of fact, it has some antecedents in the past, but the role of the judiciary during
the deposed regime was marred considerably by the circumstance that in a number of cases
against the government, which then had no legal defense at all, the solicitor general set up the
defense of political questions and got away with it. As a consequence, certain principles
concerning particularly the writ of habeas corpus, that is, the authority of courts to order the
release of political detainees, and other matters related to the operation and effect of martial
law failed because the government set up the defense of political question. And the Supreme
Court said: "Well, since it is political, we have no authority to pass upon it." The Committee on
the Judiciary feels that this was not a proper solution of the questions involved. It did not
merely request an encroachment upon the rights of the people, but it, in effect, encouraged
further violations thereof during the martial law regime. I am sure the members of the Bar are
familiar with this situation. But for the benefit of the Members of the Commission who are not
lawyers, allow me to explain. I will start with a decision of the Supreme Court in 1973 on the
case of Javellana vs. the Secretary of Justice, if I am not mistaken. Martial law was announced
on September 22, although the proclamation was dated September 21. The obvious reason for
the delay in its publication was that the administration had apprehended and detained
prominent newsmen on September 21. So that when martial law was announced on
September 22, the media hardly published anything about it. In fact, the media could not
publish any story not only because our main writers were already incarcerated, but also
because those who succeeded them in their jobs were under mortal threat of being the object
of wrath of the ruling party. The 1971 Constitutional Convention had begun on June 1, 1971
and by September 21 or 22 had not finished the Constitution; it had barely agreed in the
fundamentals of the Constitution. I forgot to say that upon the proclamation of martial law,
some delegates to that 1971 Constitutional Convention, dozens of them, were picked up. One
of them was our very own colleague, Commissioner Calderon. So, the unfinished draft of the
Constitution was taken over by representatives of Malacaang. In 17 days, they finished what
the delegates to the 1971 Constitutional Convention had been unable to accomplish for about
14 months. The draft of the 1973 Constitution was presented to the President around
December 1, 1972, whereupon the President issued a decree calling a plebiscite which
suspended the operation of some provisions in the martial law decree which prohibited
discussions, much less public discussions of certain matters of public concern. The purpose
was presumably to allow a free discussion on the draft of the Constitution on which a plebiscite
was to be held sometime in January 1973. If I may use a word famous by our colleague,
Commissioner Ople, during the interregnum, however, the draft of the Constitution was
analyzed and criticized with such a telling effect that Malacaang felt the danger of its
approval. So, the President suspended indefinitely the holding of the plebiscite and announced
that he would consult the people in a referendum to be held from January 10 to January 15.
But the questions to be submitted in the referendum were not announced until the eve of its
scheduled beginning, under the supposed supervision not of the Commission on Elections, but
of what was then designated as "citizens assemblies or barangays." Thus the barangays came
into existence. The questions to be propounded were released with proposed answers thereto,
suggesting that it was unnecessary to hold a plebiscite because the answers given in the
referendum should be regarded as the votes cast in the plebiscite. Thereupon, a motion was
filed with the Supreme Court praying that the holding of the referendum be suspended. When
the motion was being heard before the Supreme Court, the Minister of Justice delivered to the
Court a proclamation of the President declaring that the new Constitution was already in force
because the overwhelming majority of the votes cast in the referendum favored the
Constitution. Immediately after the departure of the Minister of Justice, I proceeded to the
session room where the case was being heard. I then informed the Court and the parties the
presidential proclamation declaring that the 1973 Constitution had been ratified by the people
and is now in force.
A number of other cases were filed to declare the presidential proclamation null and void. The
main defense put up by the government was that the issue was a political question and that
the court had no jurisdiction to entertain the case.
xxx
The government said that in a referendum held from January 10 to January 15, the vast
majority ratified the draft of the Constitution. Note that all members of the Supreme Court were
residents of Manila, but none of them had been notified of any referendum in their respective
places of residence, much less did they participate in the alleged referendum. None of them
saw any referendum proceeding.
In the Philippines, even local gossips spread like wild fire. So, a majority of the members of the
Court felt that there had been no referendum.
Second, a referendum cannot substitute for a plebiscite. There is a big difference between a
referendum and a plebiscite. But another group of justices upheld the defense that the issue
was a political question. Whereupon, they dismissed the case. This is not the only major case
in which the plea of "political question" was set up. There have been a number of other cases
in the past.
x x x The defense of the political question was rejected because the issue was clearly
justiciable.
xxx
x x x When your Committee on the Judiciary began to perform its functions, it faced the
following questions: What is judicial power? What is a political question?
The Supreme Court, like all other courts, has one main function: to settle actual controversies
involving conflicts of rights which are demandable and enforceable. There are rights which are
guaranteed by law but cannot be enforced by a judiciary party. In a decided case, a husband
complained that his wife was unwilling to perform her duties as a wife. The Court said: "We can
tell your wife what her duties as such are and that she is bound to comply with them, but we
cannot force her physically to discharge her main marital duty to her husband. There are some
rights guaranteed by law, but they are so personal that to enforce them by actual compulsion
would be highly derogatory to human dignity."
This is why the first part of the second paragraph of Section I provides that:
Judicial power includes the duty of courts to settle actual controversies involving rights which
are legally demandable or enforceable . . .
The courts, therefore, cannot entertain, much less decide, hypothetical questions. In a
presidential system of government, the Supreme Court has, also another important function.
The powers of government are generally considered divided into three branches: the
Legislative, the Executive and the Judiciary. Each one is supreme within its own sphere and
independent of the others. Because of that supremacy power to determine whether a given law
is valid or not is vested in courts of justice.
Briefly stated, courts of justice determine the limits of power of the agencies and offices of the
government as well as those of its officers. In other words, the judiciary is the final arbiter on
the question whether or not a branch of government or any of its officials has acted without
jurisdiction or in excess of jurisdiction, or so capriciously as to constitute an abuse of discretion
amounting to excess of jurisdiction or lack of jurisdiction. This is not only a judicial power but a
duty to pass judgment on matters of this nature.
This is the background of paragraph 2 of Section 1, which means that the courts cannot
hereafter evade the duty to settle matters of this nature, by claiming that such matters
constitute a political question.
I have made these extended remarks to the end that the Commissioners may have an initial
food for thought on the subject of the judiciary.103 (Italics in the original; emphasis supplied)
During the deliberations of the Constitutional Commission, Chief Justice Concepcion further clarified the
concept of judicial power, thus:
MR. NOLLEDO. The Gentleman used the term "judicial power" but judicial power is not vested
in the Supreme Court alone but also in other lower courts as may be created by law.
MR. CONCEPCION. Yes.
MR. NOLLEDO. And so, is this only an example?
MR. CONCEPCION. No, I know this is not. The Gentleman seems to identify political
questions with jurisdictional questions. But there is a difference.
MR. NOLLEDO. Because of the expression "judicial power"?
MR. CONCEPCION. No. Judicial power, as I said, refers to ordinary cases but where there is a
question as to whether the government had authority or had abused its authority to the extent
of lacking jurisdiction or excess of jurisdiction, that is not a political question. Therefore, the
court has the duty to decide.
xxx
FR. BERNAS. Ultimately, therefore, it will always have to be decided by the Supreme Court
according to the new numerical need for votes.
On another point, is it the intention of Section 1 to do away with the political question doctrine?
MR. CONCEPCION. No.
FR. BERNAS. It is not.
MR. CONCEPCION. No, because whenever there is an abuse of discretion, amounting to a
lack of jurisdiction. . .
 FR. BERNAS. So, I am satisfied with the answer that it is not intended to do away with the
political question doctrine.
MR. CONCEPCION. No, certainly not.
When this provision was originally drafted, it sought to define what is judicial power. But the
Gentleman will notice it says, "judicial power includes" and the reason being that the definition
that we might make may not cover all possible areas.
FR. BERNAS. So, this is not an attempt to solve the problems arising from the political
question doctrine.
MR. CONCEPCION. It definitely does not eliminate the fact that truly political questions are
beyond the pale of judicial power.104 (Emphasis supplied)
From the foregoing record of the proceedings of the 1986 Constitutional Commission, it is clear that
judicial power is not only a power; it is also a duty, a duty which cannot be abdicated by the mere
specter of this creature called the political question doctrine. Chief Justice Concepcion hastened to
clarify, however, that Section 1, Article VIII was not intended to do away with "truly political questions."
From this clarification it is gathered that there are two species of political questions: (1) "truly political
questions" and (2) those which "are not truly political questions."
Truly political questions are thus beyond judicial review, the reason for respect of the doctrine of
separation of powers to be maintained. On the other hand, by virtue of Section 1, Article VIII of the
Constitution, courts can review questions which are not truly political in nature.
As pointed out by amicus curiae former dean Pacifico Agabin of the UP College of Law, this Court has
in fact in a number of cases taken jurisdiction over questions which are not truly political following the
effectivity of the present Constitution.
In Marcos v. Manglapus,105 this Court, speaking through Madame Justice Irene Cortes, held:
The present Constitution limits resort to the political question doctrine and broadens the scope
of judicial inquiry into areas which the Court, under previous constitutions, would have normally
left to the political departments to decide.106 x x x
In Bengzon v. Senate Blue Ribbon Committee,107 through Justice Teodoro Padilla, this Court declared:
The "allocation of constitutional boundaries" is a task that this Court must perform under the
Constitution. Moreover, as held in a recent case, "(t)he political question doctrine neither
interposes an obstacle to judicial determination of the rival claims. The jurisdiction to delimit
constitutional boundaries has been given to this Court. It cannot abdicate that
obligation mandated by the 1987 Constitution, although said provision by no means does away
with the applicability of the principle in appropriate cases." 108 (Emphasis and underscoring
supplied)
And in Daza v. Singson,109 speaking through Justice Isagani Cruz, this Court ruled:
In the case now before us, the jurisdictional objection becomes even less tenable and decisive.
The reason is that, even if we were to assume that the issue presented before us was political
in nature, we would still not be precluded from resolving it under the expanded jurisdiction
conferred upon us that now covers, in proper cases, even the political question. 110 x x x
(Emphasis and underscoring supplied.)
Section 1, Article VIII, of the Court does not define what are justiciable political questions and non-
justiciable political questions, however. Identification of these two species of political questions may be
problematic. There has been no clear standard. The American case of Baker v. Carr111 attempts to
provide some:
x x x Prominent on the surface of any case held to involve a political question is found
a textually demonstrable constitutional commitment of the issue to a coordinate political
department; or a lack of judicially discoverable and manageable standards for resolving it; or
the impossibility of deciding without an initial policy determination of a kind clearly for non-
judicial discretion; or the impossibility of a court's undertaking independent resolution without
expressing lack of the respect due coordinate branches of government; or an unusual need for
questioning adherence to a political decision already made; or thepotentiality of
embarrassment from multifarious pronouncements by various departments on one
question.112 (Underscoring supplied)
Of these standards, the more reliable have been the first three: (1) a textually demonstrable
constitutional commitment of the issue to a coordinate political department; (2) the lack of judicially
discoverable and manageable standards for resolving it; and (3) the impossibility of deciding without an
initial policy determination of a kind clearly for non-judicial discretion. These standards are not separate
and distinct concepts but are interrelated to each in that the presence of one strengthens the conclusion
that the others are also present.
The problem in applying the foregoing standards is that the American concept of judicial review is
radically different from our current concept, for Section 1, Article VIII of the Constitution provides our
courts with far less discretion in determining whether they should pass upon a constitutional issue.
In our jurisdiction, the determination of a truly political question from a non-justiciable political question
lies in the answer to the question of whether there are constitutionally imposed limits on powers or
functions conferred upon political bodies. If there are, then our courts are duty-bound to examine
whether the branch or instrumentality of the government properly acted within such limits. This Court
shall thus now apply this standard to the present controversy.
These petitions raise five substantial issues:
I. Whether the offenses alleged in the Second impeachment complaint constitute valid
impeachable offenses under the Constitution.
II. Whether the second impeachment complaint was filed in accordance with Section 3(4),
Article XI of the Constitution.
III. Whether the legislative inquiry by the House Committee on Justice into the Judicial
Development Fund is an unconstitutional infringement of the constitutionally mandated fiscal
autonomy of the judiciary.
IV. Whether Sections 15 and 16 of Rule V of the Rules on Impeachment adopted by the 12th
Congress are unconstitutional for violating the provisions of Section 3, Article XI of the
Constitution.
V. Whether the second impeachment complaint is barred under Section 3(5) of Article XI of the
Constitution.
The first issue goes into the merits of the second impeachment complaint over which this Court
has no jurisdiction. More importantly, any discussion of this issue would require this Court to
make a determination of what constitutes an impeachable offense. Such a determination is a
purely political question which the Constitution has left to the sound discretion of the
legislation. Such an intent is clear from the deliberations of the Constitutional Commission.113
Although Section 2 of Article XI of the Constitution enumerates six grounds for impeachment, two of
these, namely, other high crimes and betrayal of public trust, elude a precise definition. In fact, an
examination of the records of the 1986 Constitutional Commission shows that the framers could find no
better way to approximate the boundaries of betrayal of public trust and other high crimes than by
alluding to both positive and negative examples of both, without arriving at their clear cut definition or
even a standard therefor.114 Clearly, the issue calls upon this court to decide a non-justiciable political
question which is beyond the scope of its judicial power under Section 1, Article VIII.
Lis Mota
It is a well-settled maxim of adjudication that an issue assailing the constitutionality of a governmental
act should be avoided whenever possible. Thus, in the case of Sotto v. Commission on Elections,115 this
Court held:
x x x It is a well-established rule that a court should not pass upon a constitutional question
and decide a law to be unconstitutional or invalid, unless such question is raised by the parties
and that when it is raised,if the record also presents some other ground upon which the court
may rest its judgment, that course will be adopted and the constitutional question will be left for
consideration until a case arises in which a decision upon such question will be
unavoidable.116 [Emphasis and underscoring supplied]
The same principle was applied in Luz Farms v. Secretary of Agrarian Reform,117 where this Court
invalidated Sections 13 and 32 of Republic Act No. 6657 for being confiscatory and violative of due
process, to wit:
It has been established that this Court will assume jurisdiction over a constitutional question
only if it is shown that the essential requisites of a judicial inquiry into such a question are first
satisfied. Thus, there must be an actual case or controversy involving a conflict of legal rights
susceptible of judicial determination, the constitutional question must have been opportunely
raised by the proper party, and the resolution of the question is unavoidably necessary to the
decision of the case itself.118 [Emphasis supplied]
Succinctly put, courts will not touch the issue of constitutionality unless it is truly unavoidable and is the
very lis mota or crux of the controversy.
As noted earlier, the instant consolidated petitions, while all seeking the invalidity of the second
impeachment complaint, collectively raise several constitutional issues upon which the outcome of this
controversy could possibly be made to rest. In determining whether one, some or all of the remaining
substantial issues should be passed upon, this Court is guided by the related cannon of adjudication
that "the court should not form a rule of constitutional law broader than is required by the precise facts
to which it is applied."119
In G.R. No. 160310, petitioners Leonilo R. Alfonso, et al. argue that, among other reasons, the second
impeachment complaint is invalid since it directly resulted from a Resolution 120 calling for a legislative
inquiry into the JDF, which Resolution and legislative inquiry petitioners claim to likewise be
unconstitutional for being: (a) a violation of the rules and jurisprudence on investigations in aid of
legislation; (b) an open breach of the doctrine of separation of powers; (c) a violation of the
constitutionally mandated fiscal autonomy of the judiciary; and (d) an assault on the independence of
the judiciary.121
Without going into the merits of petitioners Alfonso, et. al.'s claims, it is the studied opinion of this Court
that the issue of the constitutionality of the said Resolution and resulting legislative inquiry is too far
removed from the issue of the validity of the second impeachment complaint. Moreover, the resolution
of said issue would, in the Court's opinion, require it to form a rule of constitutional law touching on the
separate and distinct matter of legislative inquiries in general, which would thus be broader than is
required by the facts of these consolidated cases. This opinion is further strengthened by the fact that
said petitioners have raised other grounds in support of their petition which would not be adversely
affected by the Court's ruling.
En passant, this Court notes that a standard for the conduct of legislative inquiries has already been
enunciated by this Court in Bengzon, Jr. v. Senate Blue Ribbon Commttee,122 viz:
The 1987 Constitution expressly recognizes the power of both houses of Congress to conduct
inquiries in aid of legislation. Thus, Section 21, Article VI thereof provides:
The Senate or the House of Representatives or any of its respective committees may conduct
inquiries in aid of legislation in accordance with its duly published rules of procedure. The
rights of persons appearing in or affected by such inquiries shall be respected.
The power of both houses of Congress to conduct inquiries in aid of legislation is not, therefore
absolute or unlimited. Its exercise is circumscribed by the afore-quoted provision of the
Constitution. Thus, as provided therein, the investigation must be "in aid of legislation in
accordance with its duly published rules of procedure" and that "the rights of persons
appearing in or affected by such inquiries shall be respected." It follows then that the right
rights of persons under the Bill of Rights must be respected, including the right to due process
and the right not be compelled to testify against one's self. 123
In G.R. No. 160262, intervenors Romulo B. Macalintal and Pete Quirino Quadra, while joining the
original petition of petitioners Candelaria, et. al., introduce the new argument that since the second
impeachment complaint was verified and filed only by Representatives Gilberto Teodoro, Jr. and Felix
William Fuentebella, the same does not fall under the provisions of Section 3 (4), Article XI of the
Constitution which reads:
Section 3(4) In case the verified complaint or resolution of impeachment is filed by at least
one-third of all the Members of the House, the same shall constitute the Articles of
Impeachment, and trial by the Senate shall forthwith proceed.
They assert that while at least 81 members of the House of Representatives signed a Resolution of
Endorsement/Impeachment, the same did not satisfy the requisites for the application of the afore-
mentioned section in that the "verified complaint or resolution of impeachment" was not filed "by at least
one-third of all the Members of the House." With the exception of Representatives Teodoro and
Fuentebella, the signatories to said Resolution are alleged to have verified the same merely as a
"Resolution of Endorsement." Intervenors point to the "Verification" of the Resolution of Endorsement
which states that:
"We are the proponents/sponsors of the Resolution of Endorsement of the abovementioned
Complaint of Representatives Gilberto Teodoro and Felix William B. Fuentebella x x x" 124
Intervenors Macalintal and Quadra further claim that what the Constitution requires in order for said
second impeachment complaint to automatically become the Articles of Impeachment and for trial in the
Senate to begin "forthwith," is that the verified complaint be "filed," not merely endorsed, by at least
one-third of the Members of the House of Representatives. Not having complied with this requirement,
they concede that the second impeachment complaint should have been calendared and referred to the
House Committee on Justice under Section 3(2), Article XI of the Constitution, viz:
Section 3(2) A verified complaint for impeachment may be filed by any Member of the House
of Representatives or by any citizen upon a resolution of endorsement by any Member thereof,
which shall be included in the Order of Business within ten session days, and referred to the
proper Committee within three session days thereafter. The Committee, after hearing, and by a
majority vote of all its Members, shall submit its report to the House within sixty session days
from such referral, together with the corresponding resolution. The resolution shall be
calendared for consideration by the House within ten session days from receipt thereof.
Intervenors' foregoing position is echoed by Justice Maambong who opined that for Section 3 (4), Article
XI of the Constitution to apply, there should be 76 or more representatives who signed and verified the
second impeachment complaint as complainants, signed and verified the signatories to a resolution of
impeachment. Justice Maambong likewise asserted that the Resolution of Endorsement/Impeachment
signed by at least one-third of the members of the House of Representatives as endorsers is not the
resolution of impeachment contemplated by the Constitution, such resolution of endorsement being
necessary only from at least one Member whenever a citizen files a verified impeachment complaint.
While the foregoing issue, as argued by intervenors Macalintal and Quadra, does indeed limit the scope
of the constitutional issues to the provisions on impeachment, more compelling considerations militate
against its adoption as the lis mota or crux of the present controversy. Chief among this is the fact
that only Attorneys Macalintal and Quadra, intervenors in G.R. No. 160262, have raised this issue as a
ground for invalidating the second impeachment complaint. Thus, to adopt this additional ground as the
basis for deciding the instant consolidated petitions would not only render for naught the efforts of the
original petitioners in G.R. No. 160262, but the efforts presented by the other petitioners as well.
Again, the decision to discard the resolution of this issue as unnecessary for the determination of the
instant cases is made easier by the fact that said intervenors Macalintal and Quadra have joined in the
petition of Candelaria, et. al., adopting the latter's arguments and issues as their own. Consequently,
they are not unduly prejudiced by this Court's decision.
In sum, this Court holds that the two remaining issues, inextricably linked as they are, constitute the
very lis mota of the instant controversy: (1) whether Sections 15 and 16 of Rule V of the House
Impeachment Rules adopted by the 12th Congress are unconstitutional for violating the provisions of
Section 3, Article XI of the Constitution; and (2) whether, as a result thereof, the second impeachment
complaint is barred under Section 3(5) of Article XI of the Constitution.
Judicial Restraint
Senator Pimentel urges this Court to exercise judicial restraint on the ground that the Senate, sitting as
an impeachment court, has the sole power to try and decide all cases of impeachment. Again, this
Court reiterates that the power of judicial review includes the power of review over justiciable issues in
impeachment proceedings.
On the other hand, respondents Speaker De Venecia et. al. argue that "[t]here is a moral compulsion for
the Court to not assume jurisdiction over the impeachment because all the Members thereof are subject
to impeachment."125 But this argument is very much like saying the Legislature has a moral compulsion
not to pass laws with penalty clauses because Members of the House of Representatives are subject to
them.
The exercise of judicial restraint over justiciable issues is not an option before this Court. Adjudication
may not be declined, because this Court is not legally disqualified. Nor can jurisdiction be renounced as
there is no other tribunal to which the controversy may be referred."126 Otherwise, this Court would be
shirking from its duty vested under Art. VIII, Sec. 1(2) of the Constitution. More than being clothed with
authority thus, this Court is duty-bound to take cognizance of the instant petitions.127 In the august
words of amicus curiae Father Bernas, "jurisdiction is not just a power; it is a solemn duty which may
not be renounced. To renounce it, even if it is vexatious, would be a dereliction of duty."
Even in cases where it is an interested party, the Court under our system of government cannot inhibit
itself and must rule upon the challenge because no other office has the authority to do so. 128 On the
occasion that this Court had been an interested party to the controversy before it, it has acted upon the
matter "not with officiousness but in the discharge of an unavoidable duty and, as always, with
detachment and fairness."129 After all, "by [his] appointment to the office, the public has laid on [a
member of the judiciary] their confidence that [he] is mentally and morally fit to pass upon the merits of
their varied contentions. For this reason, they expect [him] to be fearless in [his] pursuit to render
justice, to be unafraid to displease any person, interest or power and to be equipped with a moral fiber
strong enough to resist the temptations lurking in [his] office." 130
The duty to exercise the power of adjudication regardless of interest had already been settled in the
case ofAbbas v. Senate Electoral Tribunal.131 In that case, the petitioners filed with the respondent
Senate Electoral Tribunal a Motion for Disqualification or Inhibition of the Senators-Members thereof
from the hearing and resolution of SET Case No. 002-87 on the ground that all of them were interested
parties to said case as respondents therein. This would have reduced the Tribunal's membership to only
its three Justices-Members whose disqualification was not sought, leaving them to decide the matter.
This Court held:
Where, as here, a situation is created which precludes the substitution of any Senator sitting in
the Tribunal by any of his other colleagues in the Senate without inviting the same objections
to the substitute's competence, the proposed mass disqualification, if sanctioned and ordered,
would leave the Tribunal no alternative but to abandon a duty that no other court or body can
perform, but which it cannot lawfully discharge if shorn of the participation of its entire
membership of Senators.
To our mind, this is the overriding consideration that the Tribunal be not prevented from
discharging a duty which it alone has the power to perform, the performance of which is in the
highest public interest as evidenced by its being expressly imposed by no less than the
fundamental law.
It is aptly noted in the first of the questioned Resolutions that the framers of the Constitution
could not have been unaware of the possibility of an election contest that would involve all
Senatorselect, six of whom would inevitably have to sit in judgment thereon. Indeed, such
possibility might surface again in the wake of the 1992 elections when once more, but for the
last time, all 24 seats in the Senate will be at stake. Yet the Constitution provides no scheme
or mode for settling such unusual situations or for the substitution of Senators designated to
the Tribunal whose disqualification may be sought. Litigants in such situations must simply
place their trust and hopes of vindication in the fairness and sense of justice of the Members of
the Tribunal. Justices and Senators, singly and collectively.
Let us not be misunderstood as saying that no Senator-Member of the Senate Electoral
Tribunal may inhibit or disqualify himself from sitting in judgment on any case before said
Tribunal. Every Member of the Tribunal may, as his conscience dictates, refrain from
participating in the resolution of a case where he sincerely feels that his personal interests or
biases would stand in the way of an objective and impartial judgment. What we are merely
saying is that in the light of the Constitution, the Senate Electoral Tribunal cannot legally
function as such, absent its entire membership of Senators and that no amendment of its
Rules can confer on the three Justices-Members alone the power of valid adjudication of a
senatorial election contest.
More recently in the case of Estrada v. Desierto,132 it was held that:
Moreover, to disqualify any of the members of the Court, particularly a majority of them, is
nothing short ofpro tanto depriving the Court itself of its jurisdiction as established by the
fundamental law. Disqualification of a judge is a deprivation of his judicial power. And if that
judge is the one designated by the Constitution to exercise the jurisdiction of his court, as is
the case with the Justices of this Court, the deprivation of his or their judicial power is
equivalent to the deprivation of the judicial power of the court itself. It affects the very heart of
judicial independence. The proposed mass disqualification, if sanctioned and ordered, would
leave the Court no alternative but to abandon a duty which it cannot lawfully discharge if shorn
of the participation of its entire membership of Justices. 133 (Italics in the original)
Besides, there are specific safeguards already laid down by the Court when it exercises its power of
judicial review.
In Demetria v. Alba,134 this Court, through Justice Marcelo Fernan cited the "seven pillars" of limitations
of the power of judicial review, enunciated by US Supreme Court Justice Brandeis in Ashwander v.
TVA135 as follows:
1. The Court will not pass upon the constitutionality of legislation in a friendly, non-adversary
proceeding, declining because to decide such questions 'is legitimate only in the last resort,
and as a necessity in the determination of real, earnest and vital controversy between
individuals. It never was the thought that, by means of a friendly suit, a party beaten in the
legislature could transfer to the courts an inquiry as to the constitutionality of the legislative
act.'
2. The Court will not 'anticipate a question of constitutional law in advance of the necessity of
deciding it.' . . . 'It is not the habit of the Court to decide questions of a constitutional nature
unless absolutely necessary to a decision of the case.'
3. The Court will not 'formulate a rule of constitutional law broader than is required by the
precise facts to which it is to be applied.'
4. The Court will not pass upon a constitutional question although properly presented by the
record, if there is also present some other ground upon which the case may be disposed of.
This rule has found most varied application. Thus, if a case can be decided on either of two
grounds, one involving a constitutional question, the other a question of statutory construction
or general law, the Court will decide only the latter. Appeals from the highest court of a state
challenging its decision of a question under the Federal Constitution are frequently dismissed
because the judgment can be sustained on an independent state ground.
5. The Court will not pass upon the validity of a statute upon complaint of one who fails to
show that he is injured by its operation. Among the many applications of this rule, none is more
striking than the denial of the right of challenge to one who lacks a personal or property right.
Thus, the challenge by a public official interested only in the performance of his official duty will
not be entertained . . . In Fairchild v. Hughes, the Court affirmed the dismissal of a suit brought
by a citizen who sought to have the Nineteenth Amendment declared unconstitutional.
In Massachusetts v. Mellon, the challenge of the federal Maternity Act was not entertained
although made by the Commonwealth on behalf of all its citizens.
6. The Court will not pass upon the constitutionality of a statute at the instance of one who has
availed himself of its benefits.
7. When the validity of an act of the Congress is drawn in question, and even if a serious doubt
of constitutionality is raised, it is a cardinal principle that this Court will first ascertain whether a
 construction of the statute is fairly possible by which the question may be avoided (citations
omitted).
The foregoing "pillars" of limitation of judicial review, summarized in Ashwander v. TVA from different
decisions of the United States Supreme Court, can be encapsulated into the following categories:
1. that there be absolute necessity of deciding a case
2. that rules of constitutional law shall be formulated only as required by the facts of the case
3. that judgment may not be sustained on some other ground
4. that there be actual injury sustained by the party by reason of the operation of the statute
5. that the parties are not in estoppel
6. that the Court upholds the presumption of constitutionality.
As stated previously, parallel guidelines have been adopted by this Court in the exercise of judicial
review:
1. actual case or controversy calling for the exercise of judicial power
2. the person challenging the act must have "standing" to challenge; he 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
3. the question of constitutionality must be raised at the earliest possible opportunity
4. the issue of constitutionality must be the very lis mota of the case.136
Respondents Speaker de Venecia, et. al. raise another argument for judicial restraint the possibility that
"judicial review of impeachments might also lead to embarrassing conflicts between the Congress and
the [J]udiciary." They stress the need to avoid the appearance of impropriety or conflicts of interest in
judicial hearings, and the scenario that it would be confusing and humiliating and risk serious political
instability at home and abroad if the judiciary countermanded the vote of Congress to remove an
impeachable official.137 Intervenor Soriano echoes this argument by alleging that failure of this Court to
enforce its Resolution against Congress would result in the diminution of its judicial authority and erode
public confidence and faith in the judiciary.
Such an argument, however, is specious, to say the least. As correctly stated by the Solicitor General,
the possibility of the occurrence of a constitutional crisis is not a reason for this Court to refrain from
upholding the Constitution in all impeachment cases. Justices cannot abandon their constitutional duties
just because their action may start, if not precipitate, a crisis.
Justice Feliciano warned against the dangers when this Court refuses to act.
x x x Frequently, the fight over a controversial legislative or executive act is not regarded as
settled until the Supreme Court has passed upon the constitutionality of the act involved, the
judgment has not only juridical effects but also political consequences. Those political
consequences may follow even where the Court fails to grant the petitioner's prayer to nullify
an act for lack of the necessary number of votes. Frequently, failure to act explicitly, one way
or the other, itself constitutes a decision for the respondent and validation, or at least quasi-
validation, follows." 138
Thus, in Javellana v. Executive Secretary139 where this Court was split and "in the end there were not
enough votes either to grant the petitions, or to sustain respondent's claims," 140 the pre-existing
constitutional order was disrupted which paved the way for the establishment of the martial law regime.
Such an argument by respondents and intervenor also presumes that the coordinate branches of the
government would behave in a lawless manner and not do their duty under the law to uphold the
Constitution and obey the laws of the land. Yet there is no reason to believe that any of the branches of
government will behave in a precipitate manner and risk social upheaval, violence, chaos and anarchy
by encouraging disrespect for the fundamental law of the land.
Substituting the word public officers for judges, this Court is well guided by the doctrine in People v.
Veneracion, towit:141
Obedience to the rule of law forms the bedrock of our system of justice. If [public officers],
under the guise of religious or political beliefs were allowed to roam unrestricted beyond
boundaries within which they are required by law to exercise the duties of their office, then law
becomes meaningless. A government of laws, not of men excludes the exercise of broad
discretionary powers by those acting under its authority. Under this system, [public officers] are
guided by the Rule of Law, and ought "to protect and enforce it without fear or favor," resist
encroachments by governments, political parties, or even the interference of their own
personal beliefs.142
Constitutionality of the Rules of Procedure
for Impeachment Proceedings
adopted by the 12th Congress
Respondent House of Representatives, through Speaker De Venecia, argues that Sections 16 and 17
of Rule V of the House Impeachment Rules do not violate Section 3 (5) of Article XI of our present
Constitution, contending that the term "initiate" does not mean "to file;" that Section 3 (1) is clear in that
it is the House of Representatives, as a collective body, which has the exclusive power to initiate all
cases of impeachment; that initiate could not possibly mean "to file" because filing can, as Section 3 (2),
Article XI of the Constitution provides, only be accomplished in 3 ways, to wit: (1) by a verified complaint
for impeachment by any member of the House of Representatives; or (2) by any citizen upon a
resolution of endorsement by any member; or (3) by at least 1/3 of all the members of the House.
Respondent House of Representatives concludes that the one year bar prohibiting the initiation of
impeachment proceedings against the same officials could not have been violated as the impeachment
complaint against Chief Justice Davide and seven Associate Justices had not been initiated as the
House of Representatives, acting as the collective body, has yet to act on it.
The resolution of this issue thus hinges on the interpretation of the term "initiate." Resort to statutory
construction is, therefore, in order.
That the sponsor of the provision of Section 3(5) of the Constitution, Commissioner Florenz Regalado,
who eventually became an Associate Justice of this Court, agreed on the meaning of "initiate" as "to
file," as proffered and explained by Constitutional Commissioner Maambong during the Constitutional
Commission proceedings, which he (Commissioner Regalado) as amicus curiae affirmed during the oral
arguments on the instant petitions held on November 5, 2003 at which he added that the act of
"initiating" included the act of taking initial action on the complaint, dissipates any doubt that indeed the
word "initiate" as it twice appears in Article XI (3) and (5) of the Constitution means to file the complaint
and take initial action on it.
"Initiate" of course is understood by ordinary men to mean, as dictionaries do, to begin, to commence,
or set going. As Webster's Third New International Dictionary of the English Language concisely puts it,
it means "to perform or facilitate the first action," which jibes with Justice Regalado's position, and that
of Father Bernas, who elucidated during the oral arguments of the instant petitions on November 5,
2003 in this wise:
Briefly then, an impeachment proceeding is not a single act. It is a comlexus of acts consisting
of a beginning, a middle and an end. The end is the transmittal of the articles of impeachment
to the Senate. The middle consists of those deliberative moments leading to the formulation of
the articles of impeachment. The beginning or the initiation is the filing of the complaint and its
referral to the Committee on Justice.
Finally, it should be noted that the House Rule relied upon by Representatives Cojuangco and
Fuentebella says that impeachment is "deemed initiated" when the Justice Committee votes in
favor of impeachment or when the House reverses a contrary vote of the Committee. Note that
the Rule does not say "impeachment proceedings" are initiated but rather are "deemed
initiated." The language is recognition that initiation happened earlier, but by legal fiction there
is an attempt to postpone it to a time after actual initiation. (Emphasis and underscoring
supplied)
As stated earlier, one of the means of interpreting the Constitution is looking into the intent of the law.
Fortunately, the intent of the framers of the 1987 Constitution can be pried from its records:
MR. MAAMBONG. With reference to Section 3, regarding the procedure and the substantive
provisions on impeachment, I understand there have been many proposals and, I think, these
would need some time for Committee action.
 However, I would just like to indicate that I submitted to the Committee a resolution on
impeachment proceedings, copies of which have been furnished the Members of this body.
This is borne out of my experience as a member of the Committee on Justice, Human Rights
and Good Government which took charge of the last impeachment resolution filed before the
First Batasang Pambansa. For the information of the Committee, the resolution covers several
steps in the impeachment proceedings starting with initiation, action of the Speaker committee
action, calendaring of report, voting on the report, transmittal referral to the Senate, trial and
judgment by the Senate.
xxx
MR. MAAMBONG. Mr. Presiding Officer, I am not moving for a reconsideration of the approval
of the amendment submitted by Commissioner Regalado, but I will just make of record my
thinking that we do not really initiate the filing of the Articles of Impeachment on the floor. The
procedure, as I have pointed out earlier, was that the initiation starts with the filing of the
complaint. And what is actually done on the floor is that the committee resolution containing
the Articles of Impeachment is the one approved by the body.
As the phraseology now runs, which may be corrected by the Committee on Style, it appears
that the initiation starts on the floor. If we only have time, I could cite examples in the case of
the impeachment proceedings of President Richard Nixon wherein the Committee on the
Judiciary submitted the recommendation, the resolution, and the Articles of Impeachment to
the body, and it was the body who approved the resolution. It is not the body which initiates it.
It only approves or disapproves the resolution. So, on that score, probably the Committee on
Style could help in rearranging these words because we have to be very technical about this. I
have been bringing with me The Rules of the House of Representatives of the U.S. Congress.
The Senate Rules are with me. The proceedings on the case of Richard Nixon are with me. I
have submitted my proposal, but the Committee has already decided. Nevertheless, I just want
to indicate this on record.
xxx
MR. MAAMBONG. I would just like to move for a reconsideration of the approval of Section 3
(3). My reconsideration will not at all affect the substance, but it is only in keeping with the
exact formulation of the Rules of the House of Representatives of the United States regarding
impeachment.
I am proposing, Madam President, without doing damage to any of this provision, that on page
2, Section 3 (3), from lines 17 to 18, we delete the words which read: "to initiate impeachment
proceedings" and the comma (,) and insert on line 19 after the word "resolution" the phrase
WITH THE ARTICLES, and then capitalize the letter "i" in "impeachment" and replace the word
"by" with OF, so that the whole section will now read: "A vote of at least one-third of all the
Members of the House shall be necessary either to affirm a resolution WITH THE ARTICLES
of Impeachment OF the Committee or to override its contrary resolution. The vote of each
Member shall be recorded."
I already mentioned earlier yesterday that the initiation, as far as the House of Representatives
of the United States is concerned, really starts from the filing of the verified complaint and
every resolution to impeach always carries with it the Articles of Impeachment. As a matter of
fact, the words "Articles of Impeachment" are mentioned on line 25 in the case of the direct
filing of a verified compliant of one-third of all the Members of the House. I will mention again,
Madam President, that my amendment will not vary the substance in any way. It is only in
keeping with the uniform procedure of the House of Representatives of the United States
Congress. Thank you, Madam President.143 (Italics in the original; emphasis and udnerscoring
supplied)
This amendment proposed by Commissioner Maambong was clarified and accepted by the Committee
on the Accountability of Public Officers.144
It is thus clear that the framers intended "initiation" to start with the filing of the complaint. In his amicus
curiaebrief, Commissioner Maambong explained that "the obvious reason in deleting the phrase "to
initiate impeachment proceedings" as contained in the text of the provision of Section 3 (3) was to settle
and make it understood once and for all that the initiation of impeachment proceedings starts with the
filing of the complaint, and the vote of one-third of the House in a resolution of impeachment does not
initiate the impeachment proceedings which was already initiated by the filing of a verified complaint
under Section 3, paragraph (2), Article XI of the Constitution."145
Amicus curiae Constitutional Commissioner Regalado is of the same view as is Father Bernas, who
was also a member of the 1986 Constitutional Commission, that the word "initiate" as used in Article XI,
Section 3(5) means to file, both adding, however, that the filing must be accompanied by an action to
set the complaint moving.
During the oral arguments before this Court, Father Bernas clarified that the word "initiate," appearing in
the constitutional provision on impeachment, viz:
Section 3 (1) The House of Representatives shall have the exclusive power to initiate all cases
of impeachment.
xxx
(5) No impeachment proceedings shall be initiated against the same official more than once
within a period of one year, (Emphasis supplied)
refers to two objects, "impeachment case" and "impeachment proceeding."
Father Bernas explains that in these two provisions, the common verb is "to initiate." The object in the
first sentence is "impeachment case." The object in the second sentence is "impeachment proceeding."
Following the principle of reddendo singuala sinuilis, the term "cases" must be distinguished from the
term "proceedings." An impeachment case is the legal controversy that must be decided by the Senate.
Above-quoted first provision provides that the House, by a vote of one-third of all its members, can bring
a case to the Senate. It is in that sense that the House has "exclusive power" to initiate all cases of
impeachment. No other body can do it. However, before a decision is made to initiate a case in the
Senate, a "proceeding" must be followed to arrive at a conclusion. A proceeding must be "initiated." To
initiate, which comes from the Latin word initium, means to begin. On the other hand, proceeding is a
progressive noun. It has a beginning, a middle, and an end. It takes place not in the Senate but in the
House and consists of several steps: (1) there is the filing of a verified complaint either by a Member of
the House of Representatives or by a private citizen endorsed by a Member of the House of the
Representatives; (2) there is the processing of this complaint by the proper Committee which may either
reject the complaint or uphold it; (3) whether the resolution of the Committee rejects or upholds the
complaint, the resolution must be forwarded to the House for further processing; and (4) there is the
processing of the same complaint by the House of Representatives which either affirms a favorable
resolution of the Committee or overrides a contrary resolution by a vote of one-third of all the members.
If at least one third of all the Members upholds the complaint, Articles of Impeachment are prepared and
transmitted to the Senate. It is at this point that the House "initiates an impeachment case." It is at this
point that an impeachable public official is successfully impeached. That is, he or she is successfully
charged with an impeachment "case" before the Senate as impeachment court.
Father Bernas further explains: The "impeachment proceeding" is not initiated when the complaint is
transmitted to the Senate for trial because that is the end of the House proceeding and the beginning of
another proceeding, namely the trial. Neither is the "impeachment proceeding" initiated when the House
deliberates on the resolution passed on to it by the Committee, because something prior to that has
already been done. The action of the House is already a further step in the proceeding, not its initiation
or beginning. Rather, the proceeding is initiated or begins, when a verified complaint is filed and
referred to the Committee on Justice for action. This is the initiating step which triggers the series of
steps that follow.
The framers of the Constitution also understood initiation in its ordinary meaning. Thus when a proposal
reached the floor proposing that "A vote of at least one-third of all the Members of the House shall be
necessary toinitiate impeachment proceedings," this was met by a proposal to delete the line on the
ground that the vote of the House does not initiate impeachment proceeding but rather the filing of a
complaint does.146 Thus the line was deleted and is not found in the present Constitution.
Father Bernas concludes that when Section 3 (5) says, "No impeachment proceeding shall be initiated
against the same official more than once within a period of one year," it means that no second verified
complaint may be accepted and referred to the Committee on Justice for action. By his explanation, this
interpretation is founded on the common understanding of the meaning of "to initiate" which means to
begin. He reminds that the Constitution is ratified by the people, both ordinary and sophisticated, as
they understand it; and that ordinary people read ordinary meaning into ordinary words and not
abstruse meaning, they ratify words as they understand it and not as sophisticated lawyers confuse it.
To the argument that only the House of Representatives as a body can initiate impeachment
proceedings because Section 3 (1) says "The House of Representatives shall have the exclusive power
to initiate all cases of impeachment," This is a misreading of said provision and is contrary to the
principle of reddendo singula singulisby equating "impeachment cases" with "impeachment
proceeding."
From the records of the Constitutional Commission, to the amicus curiae briefs of two former
Constitutional Commissioners, it is without a doubt that the term "to initiate" refers to the filing of the
impeachment complaint coupled with Congress' taking initial action of said complaint.
Having concluded that the initiation takes place by the act of filing and referral or endorsement of the
impeachment complaint to the House Committee on Justice or, by the filing by at least one-third of the
members of the House of Representatives with the Secretary General of the House, the meaning of
Section 3 (5) of Article XI becomes clear. Once an impeachment complaint has been initiated, another
impeachment complaint may not be filed against the same official within a one year period.
Under Sections 16 and 17 of Rule V of the House Impeachment Rules, impeachment proceedings
are deemed initiated (1) if there is a finding by the House Committee on Justice that the verified
complaint and/or resolution is sufficient in substance, or (2) once the House itself affirms or overturns
the finding of the Committee on Justice that the verified complaint and/or resolution is not sufficient in
substance or (3) by the filing or endorsement before the Secretary-General of the House of
Representatives of a verified complaint or a resolution of impeachment by at least 1/3 of the members
of the House. These rules clearly contravene Section 3 (5) of Article XI since the rules give the term
"initiate" a meaning different meaning from filing and referral.
In his amicus curiae brief, Justice Hugo Gutierrez posits that this Court could not use contemporaneous
construction as an aid in the interpretation of Sec.3 (5) of Article XI, citing Vera v. Avelino147 wherein
this Court stated that "their personal opinions (referring to Justices who were delegates to the
Constitution Convention) on the matter at issue expressed during this Court's our deliberations stand on
a different footing from the properly recorded utterances of debates and proceedings." Further citing
said case, he states that this Court likened the former members of the Constitutional Convention to
actors who are so absorbed in their emotional roles that intelligent spectators may know more about the
real meaning because of the latter's balanced perspectives and disinterestedness. 148
Justice Gutierrez's statements have no application in the present petitions. There are at present only
two members of this Court who participated in the 1986 Constitutional Commission Chief Justice
Davide and Justice Adolf Azcuna. Chief Justice Davide has not taken part in these proceedings for
obvious reasons. Moreover, this Court has not simply relied on the personal opinions now given by
members of the Constitutional Commission, but has examined the records of the deliberations and
proceedings thereof.
Respondent House of Representatives counters that under Section 3 (8) of Article XI, it is clear and
unequivocal that it and only it has the power to make and interpret its rules governing impeachment. Its
argument is premised on the assumption that Congress has absolute power to promulgate its rules.
This assumption, however, is misplaced.
Section 3 (8) of Article XI provides that "The Congress shall promulgate its rules on impeachment to
effectively carry out the purpose of this section." Clearly, its power to promulgate its rules on
impeachment is limited by the phrase "to effectively carry out the purpose of this section." Hence, these
rules cannot contravene the very purpose of the Constitution which said rules were intended to
effectively carry out. Moreover, Section 3 of Article XI clearly provides for other specific limitations on its
power to make rules, viz:
Section 3. (1) x x x
(2) A verified complaint for impeachment may be filed by any Member of the House of
Representatives or by any citizen upon a resolution of endorsement by any Member thereof,
which shall be included in the Order of Business within ten session days, and referred to the
proper Committee within three session days thereafter. The Committee, after hearing, and by a
majority vote of all its Members, shall submit its report to the House within sixty session days
from such referral, together with the corresponding resolution. The resolution shall be
calendared for consideration by the House within ten session days from receipt thereof.
(3) A vote of at least one-third of all the Members of the House shall be necessary to either
affirm a favorable resolution with the Articles of Impeachment of the Committee, or override its
contrary resolution. The vote of each Member shall be recorded.
(4) In case the verified complaint or resolution of impeachment is filed by at least one-third of
all the Members of the House, the same shall constitute the Articles of Impeachment, and trial
by the Senate shall forthwith proceed.
(5) No impeachment proceedings shall be initiated against the same official more than once
within a period of one year.
It is basic that all rules must not contravene the Constitution which is the fundamental law. If as alleged
Congress had absolute rule making power, then it would by necessary implication have the power to
alter or amend the meaning of the Constitution without need of referendum.
In Osmea v. Pendatun,149 this Court held that it is within the province of either House of Congress to
interpret its rules and that it was the best judge of what constituted "disorderly behavior" of its members.
However, in Paceta v. Secretary of the Commission on Appointments,150 Justice (later Chief Justice)
Enrique Fernando, speaking for this Court and quoting Justice Brandeis in United States v.
Smith,151 declared that where the construction to be given to a rule affects persons other than members
of the Legislature, the question becomes judicial in nature. InArroyo v. De Venecia,152 quoting United
States v. Ballin, Joseph & Co.,153 Justice Vicente Mendoza, speaking for this Court, held that while the
Constitution empowers each house to determine its rules of proceedings, it may not by its rules ignore
constitutional restraints or violate fundamental rights, and further that 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. It is only within these limitations that all matters of method are open to the
determination of the Legislature. In the same case of Arroyo v. De Venecia, Justice Reynato S. Puno, in
his Concurring and Dissenting Opinion, was even more emphatic as he stressed that in the Philippine
setting there is even more reason for courts to inquire into the validity of the Rules of Congress, viz:
With due respect, I do not agree that the issues posed by the petitioner are non-justiciable. Nor
do I agree that we will trivialize the principle of separation of power if we assume jurisdiction
over he case at bar. Even in the United States, the principle of separation of power is no longer
an impregnable impediment against the interposition of judicial power on cases involving
breach of rules of procedure by legislators.
Rightly, the ponencia uses the 1891 case of US v Ballin (144 US 1) as a window to view the
issues before the Court. It is in Ballin where the US Supreme Court first defined the boundaries
of the power of the judiciary to review congressional rules. It held:
"x x x
"The Constitution, in the same section, provides, that each house may determine the rules of
its proceedings." It appears that in pursuance of this authority the House had, prior to that day,
passed this as one of its rules:
Rule XV
3. On the demand of any member, or at the suggestion of the Speaker, the names of members
sufficient to make a quorum in the hall of the House who do not vote shall be noted by the
clerk and recorded in the journal, and reported to the Speaker with the names of the members
voting, and be counted and announced in determining the presence of a quorum to do
business. (House Journal, 230, Feb. 14, 1890)
The action taken was in direct compliance with this rule. The question, therefore, is as to
the validity of this rule, and not what methods the Speaker may of his own motion resort to for
determining the presence of a quorum, nor what matters the Speaker or clerk may of their own
volition place upon the journal. Neither do the advantages or disadvantages, the wisdom or
folly, of such a rule present any matters for judicial consideration. With the courts the question
is only one of power. The Constitution empowers each house to determine its rules of
proceedings. It 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 proceedings
established by the rule and the result which is sought to be attained. But within these
limitations all matters of method are open to the determination of the House, and it is no
impeachment of the rule to say that some other way would be better, more accurate, or even
more just. It is no objection to the validity of a rule that a different one has been prescribed and
in force for a length of time. The power to make rules is not one which once exercised is
exhausted. It is a continuous power, always subject to be exercised by the House, and within
the limitations suggested, absolute and beyond the challenge of any other body or tribunal."
Ballin, clearly confirmed the jurisdiction of courts to pass upon the validity of congressional
rules, i.e, whether they are constitutional. Rule XV was examined by the Court and it was
found to satisfy the test: (1) that it did not ignore any constitutional restraint; (2) it did not
violate any fundamental right; and (3) its method had a reasonable relationship with the result
sought to be attained. By examining Rule XV, the Court did not allow its jurisdiction to be
defeated by the mere invocation of the principle of separation of powers.154
xxx
In the Philippine setting, there is a more compelling reason for courts to categorically reject the
political question defense when its interposition will cover up abuse of power. For section 1,
Article VIII of our Constitution was intentionally cobbled to empower courts "x x x 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." This power is new
and was not granted to our courts in the 1935 and 1972 Constitutions. It was not also xeroxed
from the US Constitution or any foreign state constitution. The CONCOM granted this
enormous power to our courts in view of our experience under martial law where abusive
exercises of state power were shielded from judicial scrutiny by the misuse of the political
question doctrine. Led by the eminent former Chief Justice Roberto Concepcion, the
CONCOM expanded and sharpened the checking powers of the judiciary vis--vis the
Executive and the Legislative departments of government. 155
xxx
The Constitution cannot be any clearer. What it granted to this Court is not a mere power
which it can decline to exercise. Precisely to deter this disinclination, the Constitution imposed
it as a duty of this Court 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. Rightly or wrongly, the Constitution has elongated the checking powers of this
Court against the other branches of government despite their more democratic character, the
President and the legislators being elected by the people.156
xxx
The provision defining judicial power as including the 'duty of the courts of justice. . . 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'
constitutes the capstone of the efforts of the Constitutional Commission to upgrade the powers
of this court vis--vis the other branches of government. This provision was dictated by our
experience under martial law which taught us that a stronger and more independent judiciary is
needed to abort abuses in government. x x x
xxx
In sum, I submit that in imposing to this Court the duty to annul acts of government committed
with grave abuse of discretion, the new Constitution transformed this Court from passivity to
activism. This transformation, dictated by our distinct experience as nation, is not merely
evolutionary but revolutionary.Under the 1935 and the 1973 Constitutions, this Court
approached constitutional violations by initially determining what it cannot do; under the 1987
Constitution, there is a shift in stress this Court is mandated to approach constitutional
violations not by finding out what it should not do but what it must do. The Court must
discharge this solemn duty by not resuscitating a past that petrifies the present.
I urge my brethren in the Court to give due and serious consideration to this new constitutional
provision as the case at bar once more calls us to define the parameters of our power to
review violations of the rules of the House. We will not be true to our trust as the last bulwark
against government abuses if we refuse to exercise this new power or if we wield it with
timidity. To be sure, it is this exceeding timidity to unsheathe the judicial sword that has
increasingly emboldened other branches of government to denigrate, if not defy, orders of our
courts. In Tolentino, I endorsed the view of former Senator Salonga that this novel provision
stretching the latitude of judicial power is distinctly Filipino and its interpretation should not be
depreciated by undue reliance on inapplicable foreign jurisprudence. In resolving the case at
bar, the lessons of our own history should provide us the light and not the experience of
foreigners.157 (Italics in the original emphasis and underscoring supplied)
Thus, the ruling in Osmena v. Pendatun is not applicable to the instant petitions. Here, the third parties
alleging the violation of private rights and the Constitution are involved.
Neither may respondent House of Representatives' rely on Nixon v. US158 as basis for arguing that this
Court may not decide on the constitutionality of Sections 16 and 17 of the House Impeachment Rules.
As already observed, the U.S. Federal Constitution simply provides that "the House of Representatives
shall have the sole power of impeachment." It adds nothing more. It gives no clue whatsoever as to how
this "sole power" is to be exercised. No limitation whatsoever is given. Thus, the US Supreme Court
concluded that there was a textually demonstrable constitutional commitment of a constitutional power
to the House of Representatives. This reasoning does not hold with regard to impeachment power of
the Philippine House of Representatives since our Constitution, as earlier enumerated, furnishes
several provisions articulating how that "exclusive power" is to be exercised.
The provisions of Sections 16 and 17 of Rule V of the House Impeachment Rules which state that
impeachment proceedings are deemed initiated (1) if there is a finding by the House Committee on
Justice that the verified complaint and/or resolution is sufficient in substance, or (2) once the House
itself affirms or overturns the finding of the Committee on Justice that the verified complaint and/or
resolution is not sufficient in substance or (3) by the filing or endorsement before the Secretary-General
of the House of Representatives of a verified complaint or a resolution of impeachment by at least 1/3 of
the members of the House thus clearly contravene Section 3 (5) of Article XI as they give the term
"initiate" a meaning different from "filing."
Validity of the Second Impeachment Complaint
Having concluded that the initiation takes place by the act of filing of the impeachment complaint and
referral to the House Committee on Justice, the initial action taken thereon, the meaning of Section 3 (5)
of Article XI becomes clear. Once an impeachment complaint has been initiated in the foregoing
manner, another may not be filed against the same official within a one year period following Article XI,
Section 3(5) of the Constitution.
In fine, considering that the first impeachment complaint, was filed by former President Estrada against
Chief Justice Hilario G. Davide, Jr., along with seven associate justices of this Court, on June 2, 2003
and referred to the House Committee on Justice on August 5, 2003, the second impeachment complaint
filed by Representatives Gilberto C. Teodoro, Jr. and Felix William Fuentebella against the Chief Justice
on October 23, 2003 violates the constitutional prohibition against the initiation of impeachment
proceedings against the same impeachable officer within a one-year period.
Conclusion
If there is anything constant about this country, it is that there is always a phenomenon that takes the No one is above the law or the Constitution. This is a basic precept in any legal system which
center stage of our individual and collective consciousness as a people with our characteristic flair for recognizes equality of all men before the law as essential to the law's moral authority and that of its
human drama, conflict or tragedy. Of course this is not to demean the seriousness of the controversy agents to secure respect for and obedience to its commands. Perhaps, there is no other government
over the Davide impeachment. For many of us, the past two weeks have proven to be an exasperating, branch or instrumentality that is most zealous in protecting that principle of legal equality other than the
mentally and emotionally exhausting experience. Both sides have fought bitterly a dialectical struggle to Supreme Court which has discerned its real meaning and ramifications through its application to
articulate what they respectively believe to be the correct position or view on the issues involved. numerous cases especially of the high-profile kind in the annals of jurisprudence. The Chief Justice is
Passions had ran high as demonstrators, whether for or against the impeachment of the Chief Justice, not above the law and neither is any other member of this Court. But just because he is the Chief
took to the streets armed with their familiar slogans and chants to air their voice on the matter. Various Justice does not imply that he gets to have less in law than anybody else. The law is solicitous of every
sectors of society - from the business, retired military, to the academe and denominations of faith individual's rights irrespective of his station in life.
offered suggestions for a return to a state of normalcy in the official relations of the governmental The Filipino nation and its democratic institutions have no doubt been put to test once again by this
branches affected to obviate any perceived resulting instability upon areas of national life. impeachment case against Chief Justice Hilario Davide. Accordingly, this Court has resorted to no other
Through all these and as early as the time when the Articles of Impeachment had been constituted, this than the Constitution in search for a solution to what many feared would ripen to a crisis in government.
Court was specifically asked, told, urged and argued to take no action of any kind and form with respect But though it is indeed immensely a blessing for this Court to have found answers in our bedrock of
to the prosecution by the House of Representatives of the impeachment complaint against the subject legal principles, it is equally important that it went through this crucible of a democratic process, if only
respondent public official. When the present petitions were knocking so to speak at the doorsteps of this to discover that it can resolve differences without the use of force and aggression upon each other.
Court, the same clamor for non-interference was made through what are now the arguments of "lack of WHEREFORE, Sections 16 and 17 of Rule V of the Rules of Procedure in Impeachment Proceedings
jurisdiction," "non-justiciability," and "judicial self-restraint" aimed at halting the Court from any move which were approved by the House of Representatives on November 28, 2001 are unconstitutional.
that may have a bearing on the impeachment proceedings. Consequently, the second impeachment complaint against Chief Justice Hilario G. Davide, Jr. which
This Court did not heed the call to adopt a hands-off stance as far as the question of the constitutionality was filed by Representatives Gilberto C. Teodoro, Jr. and Felix William B. Fuentebella with the Office of
of initiating the impeachment complaint against Chief Justice Davide is concerned. To reiterate what the Secretary General of the House of Representatives on October 23, 2003 is barred under paragraph
has been already explained, the Court found the existence in full of all the requisite conditions for its 5, section 3 of Article XI of the Constitution.
exercise of its constitutionally vested power and duty of judicial review over an issue whose resolution SO ORDERED.
precisely called for the construction or interpretation of a provision of the fundamental law of the land.
What lies in here is an issue of a genuine constitutional material which only this Court can properly and
competently address and adjudicate in accordance with the clear-cut allocation of powers under our
system of government. Face-to-face thus with a matter or problem that squarely falls under the Court's
jurisdiction, no other course of action can be had but for it to pass upon that problem head on.
The claim, therefore, that this Court by judicially entangling itself with the process of impeachment has
effectively set up a regime of judicial supremacy, is patently without basis in fact and in law.
This Court in the present petitions subjected to judicial scrutiny and resolved on the merits only the main
issue of whether the impeachment proceedings initiated against the Chief Justice transgressed the
constitutionally imposed one-year time bar rule. Beyond this, it did not go about assuming jurisdiction
where it had none, nor indiscriminately turn justiciable issues out of decidedly political questions.
Because it is not at all the business of this Court to assert judicial dominance over the other two great
branches of the government. Rather, the raison d'etre of the judiciary is to complement the discharge by
the executive and legislative of their own powers to bring about ultimately the beneficent effects of
having founded and ordered our society upon the rule of law.
It is suggested that by our taking cognizance of the issue of constitutionality of the impeachment
proceedings against the Chief Justice, the members of this Court have actually closed ranks to protect a
brethren. That the members' interests in ruling on said issue is as much at stake as is that of the Chief
Justice. Nothing could be farther from the truth.
The institution that is the Supreme Court together with all other courts has long held and been entrusted
with the judicial power to resolve conflicting legal rights regardless of the personalities involved in the
suits or actions. This Court has dispensed justice over the course of time, unaffected by whomsoever
stood to benefit or suffer therefrom, unfraid by whatever imputations or speculations could be made to
it, so long as it rendered judgment according to the law and the facts. Why can it not now be trusted to
wield judicial power in these petitions just because it is the highest ranking magistrate who is involved
when it is an incontrovertible fact that the fundamental issue is not him but the validity of a government
branch's official act as tested by the limits set by the Constitution? Of course, there are rules on the
inhibition of any member of the judiciary from taking part in a case in specified instances. But to
disqualify this entire institution now from the suit at bar is to regard the Supreme Court as likely
incapable of impartiality when one of its members is a party to a case, which is simply a non sequitur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 111097 July 20, 1994
MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,
vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING
CORPORATION,respondents.
Aquilino G. Pimentel, Jr. and Associates for petitioners.
R.R. Torralba & Associates for private respondent.
CRUZ, J.:
There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro
City. Civic organizations angrily denounced the project. The religious elements echoed the objection
and so did the women's groups and the youth. Demonstrations were led by the mayor and the city
legislators. The media trumpeted the protest, describing the casino as an affront to the welfare of the
city.
The trouble arose when in 1992, flush with its tremendous success in several cities, PAGCOR decided
to expand its operations to Cagayan de Oro City. To this end, it leased a portion of a building belonging
to Pryce Properties Corporation, Inc., one of the herein private respondents, renovated and equipped
the same, and prepared to inaugurate its casino there during the Christmas season.
The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On
December 7, 1992, it enacted Ordinance No. 3353 reading as follows:
ORDINANCE NO. 3353
AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND
CANCELLING EXISTING BUSINESS PERMIT TO ANY ESTABLISHMENT FOR
THE USING AND ALLOWING TO BE USED ITS PREMISES OR PORTION
THEREOF FOR THE OPERATION OF CASINO.
BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in
session assembled that:
Sec. 1. That pursuant to the policy of the city banning the operation of casino
within its territorial jurisdiction, no business permit shall be issued to any person,
partnership or corporation for the operation of casino within the city limits.
Sec. 2. That it shall be a violation of existing business permit by any persons,
partnership or corporation to use its business establishment or portion thereof, or
allow the use thereof by others for casino operation and other gambling activities.
Sec. 3. PENALTIES. Any violation of such existing business permit as defined
in the preceding section shall suffer the following penalties, to wit:
a) Suspension of the business permit for sixty
(60) days for the first offense and a fine of
P1,000.00/day
b) Suspension of the business permit for Six (6)
months for the second offense, and a fine of
P3,000.00/day
c) Permanent revocation of the business permit
and imprisonment of One (1) year, for the third
and subsequent offenses.
Sec. 4. This Ordinance shall take effect ten (10) days from publication thereof.
Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading as follows:
ORDINANCE NO. 3375-93
AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING
PENALTY FOR VIOLATION THEREFOR.
WHEREAS, the City Council established a policy as early as 1990 against CASINO
under its Resolution No. 2295;
WHEREAS, on October 14, 1992, the City Council passed another Resolution No.
2673, reiterating its policy against the establishment of CASINO;
WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353,
prohibiting the issuance of Business Permit and to cancel existing Business Permit to
any establishment for the using and allowing to be used its premises or portion
thereof for the operation of CASINO;
WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the Local
Government Code of 1991 (Rep. Act 7160) and under Art. 99, No. (4), Paragraph VI
of the implementing rules of the Local Government Code, the City Council as the
Legislative Body shall enact measure to suppress any activity inimical to public
morals and general welfare of the people and/or regulate or prohibit such activity
pertaining to amusement or entertainment in order to protect social and moral welfare
of the community;
NOW THEREFORE,
BE IT ORDAINED by the City Council in session duly assembled that:
Sec. 1. The operation of gambling CASINO in the City of Cagayan de Oro is
hereby prohibited.
Sec. 2. Any violation of this Ordinance shall be subject to the following penalties:
a) Administrative fine of P5,000.00 shall be imposed against the proprietor,
partnership or corporation undertaking the operation, conduct, maintenance of
gambling CASINO in the City and closure thereof;
b) Imprisonment of not less than six (6) months nor more than one (1) year or a fine in
the amount of P5,000.00 or both at the discretion of the court against the manager,
supervisor, and/or any person responsible in the establishment, conduct and
maintenance of gambling CASINO.
Sec. 3. This Ordinance shall take effect ten (10) days after its publication in a local
newspaper of general circulation.
Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as
intervenor and supplemental petitioner. Their challenge succeeded. On March 31, 1993, the Court of
Appeals declared the ordinances invalid and issued the writ prayed for to prohibit their
enforcement. 1 Reconsideration of this decision was denied on July 13, 1993. 2
Cagayan de Oro City and its mayor are now before us in this petition for review under Rule 45 of the
Rules of Court. 3 They aver that the respondent Court of Appeals erred in holding that:
1. Under existing laws, the Sangguniang Panlungsod of the City of Cagayan de Oro
does not have the power and authority to prohibit the establishment and operation of
a PAGCOR gambling casino within the City's territorial limits.
2. The phrase "gambling and other prohibited games of chance" found in Sec. 458,
par. (a), sub-par. (1) (v) of R.A. 7160 could only mean "illegal gambling."
3. The questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on
that point.
4. The questioned Ordinances are discriminatory to casino and partial to cockfighting
and are therefore invalid on that point.
5. The questioned Ordinances are not reasonable, not consonant with the general
powers and purposes of the instrumentality concerned and inconsistent with the laws
or policy of the State.
6. It had no option but to follow the ruling in the case of Basco, et al. v.
PAGCOR, G.R. No. 91649, May 14, 1991, 197 SCRA 53 in disposing of the issues
presented in this present case.
PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games of
chance, including casinos on land and sea within the territorial jurisdiction of the Philippines. In Basco v.
Philippine Amusements and Gaming Corporation, 4 this Court sustained the constitutionality of the
decree and even cited the benefits of the entity to the national economy as the third highest revenue-
earner in the government, next only to the BIR and the Bureau of Customs.
Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the
purposes indicated in the Local Government Code. It is expressly vested with the police power under
what is known as the General Welfare Clause now embodied in Section 16 as follows:
Sec. 16. General Welfare. Every local government unit shall exercise the
powers expressly granted, those necessarily implied therefrom, as well as powers
necessary, appropriate, or incidental for its efficient and effective governance, and
those which are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure and support,
among other things, the preservation and enrichment of culture, promote health and
safety, enhance the right of the people to a balanced ecology, encourage and support
the development of appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain peace and order, and
preserve the comfort and convenience of their inhabitants.
In addition, Section 458 of the said Code specifically declares that:
Sec. 458. Powers, Duties, Functions and Compensation. (a) The Sangguniang
Panlungsod, as the legislative body of the city, shall enact ordinances, approve
resolutions and appropriate funds for the general welfare of the city and its inhabitants
pursuant to Section 16 of this Code and in the proper exercise of the corporate
powers of the city as provided for under Section 22 of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient and effective
city government, and in this connection, shall:
xxx xxx xxx
(v) Enact ordinances intended to prevent,
suppress and impose appropriate penalties for
habitual drunkenness in public places, vagrancy,
mendicancy, prostitution, establishment and
maintenance of houses of ill repute,gambling and
other prohibited games of chance, fraudulent
devices and ways to obtain money or property,
drug addiction, maintenance of drug dens, drug
pushing, juvenile delinquency, the printing,
distribution or exhibition of obscene or
pornographic materials or publications, and such
other activities inimical to the welfare and morals
of the inhabitants of the city;
This section also authorizes the local government units to regulate properties and businesses within
their territorial limits in the interest of the general welfare. 5
The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod may prohibit the
operation of casinos because they involve games of chance, which are detrimental to the people.
Gambling is not allowed by general law and even by the Constitution itself. The legislative power
conferred upon local government units may be exercised over all kinds of gambling and not only over
"illegal gambling" as the respondents erroneously argue. Even if the operation of casinos may have
been permitted under P.D. 1869, the government of Cagayan de Oro City has the authority to prohibit
them within its territory pursuant to the authority entrusted to it by the Local Government Code.
It is submitted that this interpretation is consonant with the policy of local autonomy as mandated in
Article II, Section 25, and Article X of the Constitution, as well as various other provisions therein
seeking to strengthen the character of the nation. In giving the local government units the power to
prevent or suppress gambling and other social problems, the Local Government Code has recognized
the competence of such communities to determine and adopt the measures best expected to promote
the general welfare of their inhabitants in line with the policies of the State.
The petitioners also stress that when the Code expressly authorized the local government units to
prevent and suppress gambling and other prohibited games of chance, like craps, baccarat, blackjack
and roulette, it meant allforms of gambling without distinction. Ubi lex non distinguit, nec nos distinguere
debemos. 6 Otherwise, it would have expressly excluded from the scope of their power casinos and
other forms of gambling authorized by special law, as it could have easily done. The fact that it did not
do so simply means that the local government units are permitted to prohibit all kinds of gambling within
their territories, including the operation of casinos.
The adoption of the Local Government Code, it is pointed out, had the effect of modifying the charter of
the PAGCOR. The Code is not only a later enactment than P.D. 1869 and so is deemed to prevail in
case of inconsistencies between them. More than this, the powers of the PAGCOR under the decree
are expressly discontinued by the Code insofar as they do not conform to its philosophy and provisions,
pursuant to Par. (f) of its repealing clause reading as follows:
(f) All general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which are
inconsistent with any of the provisions of this Code are hereby repealed or modified
accordingly.
It is also maintained that assuming there is doubt regarding the effect of the Local Government Code on
P.D. 1869, the doubt must be resolved in favor of the petitioners, in accordance with the direction in the
Code calling for its liberal interpretation in favor of the local government units. Section 5 of the Code
specifically provides:
Sec. 5. Rules of Interpretation. In the interpretation of the provisions of this Code,
the following rules shall apply:
(a) Any provision on a power of a local government unit shall be liberally interpreted in
its favor, and in case of doubt, any question thereon shall be resolved in favor of
devolution of powers and of the lower local government unit. Any fair and reasonable
doubt as to the existence of the power shall be interpreted in favor of the local
government unit concerned;
xxx xxx xxx
(c) The general welfare provisions in this Code shall be liberally interpreted to give
more powers to local government units in accelerating economic development and
upgrading the quality of life for the people in the community; . . . (Emphasis supplied.)
Finally, the petitioners also attack gambling as intrinsically harmful and cite various provisions of the
Constitution and several decisions of this Court expressive of the general and official disapprobation of
the vice. They invoke the State policies on the family and the proper upbringing of the youth and, as
might be expected, call attention to the old case of U.S. v. Salaveria,7 which sustained a municipal
ordinance prohibiting the playing of panguingue. The petitioners decry the immorality of gambling. They
also impugn the wisdom of P.D. 1869 (which they describe as "a martial law instrument") in creating
PAGCOR and authorizing it to operate casinos "on land and sea within the territorial jurisdiction of the
Philippines."
This is the opportune time to stress an important point.
The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally
considered inimical to the interests of the people, there is nothing in the Constitution categorically
proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress to
deal with the activity as it sees fit. In the exercise of its own discretion, the legislature may prohibit
gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow
others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but
permits lotteries, cockfighting and horse-racing. In making such choices, Congress has consulted its
own wisdom, which this Court has no authority to review, much less reverse. Well has it been said that
courts do not sit to resolve the merits of conflicting theories. 8 That is the prerogative of the political
departments. It is settled that questions regarding the wisdom, morality, or practicibility of statutes are
not addressed to the judiciary but may be resolved only by the legislative and executive departments, to
which the function belongs in our scheme of government. That function is exclusive. Whichever way
these branches decide, they are answerable only to their own conscience and the constituents who will
ultimately judge their acts, and not to the courts of justice.
The only question we can and shall resolve in this petition is the validity of Ordinance No. 3355 and
Ordinance No. 3375-93 as enacted by the Sangguniang Panlungsod of Cagayan de Oro City. And we
shall do so only by the criteria laid down by law and not by our own convictions on the propriety of
gambling.
The tests of a valid ordinance are well established. A long line of decisions 9 has held that to be valid,
an ordinance must conform to the following substantive requirements:
1) It must not contravene the constitution or any statute.
2) It must not be unfair or oppressive.
3) It must not be partial or discriminatory.
4) It must not prohibit but may regulate trade.
5) It must be general and consistent with public policy.
6) It must not be unreasonable.
We begin by observing that under Sec. 458 of the Local Government Code, local government units are
authorized to prevent or suppress, among others, "gambling and other prohibited games of chance."
Obviously, this provision excludes games of chance which are not prohibited but are in fact permitted by
law. The petitioners are less than accurate in claiming that the Code could have excluded such games
of chance but did not. In fact it does. The language of the section is clear and unmistakable. Under the
rule of noscitur a sociis, a word or phrase should be interpreted in relation to, or given the same
meaning of, words with which it is associated. Accordingly, we conclude that since the word "gambling"
is associated with "and other prohibited games of chance," the word should be read as referring to only
illegal gambling which, like the other prohibited games of chance, must be prevented or suppressed.
We could stop here as this interpretation should settle the problem quite conclusively. But we will not.
The vigorous efforts of the petitioners on behalf of the inhabitants of Cagayan de Oro City, and the
earnestness of their advocacy, deserve more than short shrift from this Court.
The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public policy
embodied therein insofar as they prevent PAGCOR from exercising the power conferred on it to operate
a casino in Cagayan de Oro City. The petitioners have an ingenious answer to this misgiving. They
deny that it is the ordinances that have changed P.D. 1869 for an ordinance admittedly cannot prevail
against a statute. Their theory is that the change has been made by the Local Government Code itself,
which was also enacted by the national lawmaking authority. In their view, the decree has been, not
really repealed by the Code, but merely "modified pro tanto" in the sense that PAGCOR cannot now
operate a casino over the objection of the local government unit concerned. This modification of P.D.
1869 by the Local Government Code is permissible because one law can change or repeal another law.
It seems to us that the petitioners are playing with words. While insisting that the decree has only been
"modifiedpro tanto," they are actually arguing that it is already dead, repealed and useless for all intents
and purposes because the Code has shorn PAGCOR of all power to centralize and regulate casinos.
Strictly speaking, its operations may now be not only prohibited by the local government unit; in fact, the
prohibition is not only discretionary but mandated by Section 458 of the Code if the word "shall" as used
therein is to be given its accepted meaning. Local government units have now no choice but to prevent
and suppress gambling, which in the petitioners' view includes both legal and illegal gambling. Under
this construction, PAGCOR will have no more games of chance to regulate or centralize as they must
all be prohibited by the local government units pursuant to the mandatory duty imposed upon them by
the Code. In this situation, PAGCOR cannot continue to exist except only as a toothless tiger or a white
elephant and will no longer be able to exercise its powers as a prime source of government revenue
through the operation of casinos.
It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause, conveniently
discarding the rest of the provision which painstakingly mentions the specific laws or the parts thereof
which are repealed (or modified) by the Code. Significantly, P.D. 1869 is not one of them. A reading of
the entire repealing clause, which is reproduced below, will disclose the omission:
Sec. 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise known as
the "Local Government Code," Executive Order No. 112 (1987), and Executive Order
No. 319 (1988) are hereby repealed.
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders,
instructions, memoranda and issuances related to or concerning the barangay are
hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital
fund; Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding the Special
Education Fund; Presidential Decree No. 144 as amended by Presidential Decree
Nos. 559 and 1741; Presidential Decree No. 231 as amended; Presidential Decree
No. 436 as amended by Presidential Decree No. 558; and Presidential Decree Nos.
381, 436, 464, 477, 526, 632, 752, and 1136 are hereby repealed and rendered of no
force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-
funded projects.
(e) The following provisions are hereby repealed or amended insofar as they are
inconsistent with the provisions of this Code: Sections 2, 16, and 29 of Presidential
Decree No. 704; Sections 12 of Presidential Decree No. 87, as amended; Sections
52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential Decree No. 463, as
amended; and Section 16 of Presidential Decree No. 972, as amended, and
(f) All general and special laws, acts, city charters, decrees, executive orders,
proclamations and administrative regulations, or part or parts thereof which are
inconsistent with any of the provisions of this Code are hereby repealed or modified
accordingly.
Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a clear
and unmistakable showing of such intention. In Lichauco & Co. v. Apostol, 10 this Court explained:
The cases relating to the subject of repeal by implication all proceed on the
assumption that if the act of later date clearly reveals an intention on the part of the
lawmaking power to abrogate the prior law, this intention must be given effect; but
there must always be a sufficient revelation of this intention, and it has become an
unbending rule of statutory construction that the intention to repeal a former law will
not be imputed to the Legislature when it appears that the two statutes, or provisions,
with reference to which the question arises bear to each other the relation of general
to special.
There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private
respondent points out, PAGCOR is mentioned as the source of funding in two later enactments of
Congress, to wit, R.A. 7309, creating a Board of Claims under the Department of Justice for the benefit
of victims of unjust punishment or detention or of violent crimes, and R.A. 7648, providing for measures
for the solution of the power crisis. PAGCOR revenues are tapped by these two statutes. This would
show that the PAGCOR charter has not been repealed by the Local Government Code but has in fact
been improved as it were to make the entity more responsive to the fiscal problems of the government.
It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably
destructive confrontation, courts must exert every effort to reconcile them, remembering that both laws
deserve a becoming respect as the handiwork of a coordinate branch of the government. On the
assumption of a conflict between P.D. 1869 and the Code, the proper action is not to uphold one and
annul the other but to give effect to both by harmonizing them if possible. This is possible in the case
before us. The proper resolution of the problem at hand is to hold that under the Local Government
Code, local government units may (and indeed must) prevent and suppress all kinds of gambling within
their territories except only those allowed by statutes like P.D. 1869. The exception reserved in such not been modified by the Local Government Code, which empowers the local government units to
laws must be read into the Code, to make both the Code and such laws equally effective and mutually prevent or suppress only those forms of gambling prohibited by law.
complementary. Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be
This approach would also affirm that there are indeed two kinds of gambling, to wit, the illegal and those amended or nullified by a mere ordinance. Hence, it was not competent for the Sangguniang
authorized by law. Legalized gambling is not a modern concept; it is probably as old as illegal gambling, Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for the
if not indeed more so. The petitioners' suggestion that the Code authorizes them to prohibit all kinds of operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all their
gambling would erase the distinction between these two forms of gambling without a clear indication praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public policy announced
that this is the will of the legislature. Plausibly, following this theory, the City of Manila could, by mere therein and are therefore ultra vires and void.
ordinance, prohibit the Philippine Charity Sweepstakes Office from conducting a lottery as authorized by WHEREFORE, the petition is DENIED and the challenged decision of the respondent Court of Appeals
R.A. 1169 and B.P. 42 or stop the races at the San Lazaro Hippodrome as authorized by R.A. 309 and is AFFIRMED, with costs against the petitioners. It is so ordered.
R.A. 983.
In light of all the above considerations, we see no way of arriving at the conclusion urged on us by the
petitioners that the ordinances in question are valid. On the contrary, we find that the ordinances violate
P.D. 1869, which has the character and force of a statute, as well as the public policy expressed in the
decree allowing the playing of certain games of chance despite the prohibition of gambling in general.
The rationale of the requirement that the ordinances should not contravene a statute is obvious.
Municipal governments are only agents of the national government. Local councils exercise only
delegated legislative powers conferred on them by Congress as the national lawmaking body. The
delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a
heresy to suggest that the local government units can undo the acts of Congress, from which they have
derived their power in the first place, and negate by mere ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights wholly
from the legislature. It breathes into them the breath of life, without which they cannot
exist. As it creates, so it may destroy. As it may destroy, it may abridge and control.
Unless there is some constitutional limitation on the right, the legislature might, by a
single act, and if we can suppose it capable of so great a folly and so great a wrong,
sweep from existence all of the municipal corporations in the State, and the
corporation could not prevent it. We know of no limitation on the right so far as to the
corporation themselves are concerned. They are, so to phrase it, the mere tenants at
will of the legislature. 11
This basic relationship between the national legislature and the local government units has not been
enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. Without
meaning to detract from that policy, we here confirm that Congress retains control of the local
government units although in significantly reduced degree now than under our previous Constitutions.
The power to create still includes the power to destroy. The power to grant still includes the power to
withhold or recall. True, there are certain notable innovations in the Constitution, like the direct
conferment on the local government units of the power to tax, 12which cannot now be withdrawn by
mere statute. By and large, however, the national legislature is still the principal of the local government
units, which cannot defy its will or modify or violate it.
The Court understands and admires the concern of the petitioners for the welfare of their constituents
and their apprehensions that the welfare of Cagayan de Oro City will be endangered by the opening of
the casino. We share the view that "the hope of large or easy gain, obtained without special effort, turns
the head of the workman" 13 and that "habitual gambling is a cause of laziness and ruin." 14 In People v.
Gorostiza, 15 we declared: "The social scourge of gambling must be stamped out. The laws against
gambling must be enforced to the limit." George Washington called gambling "the child of avarice, the
brother of iniquity and the father of mischief." Nevertheless, we must recognize the power of the
legislature to decide, in its own wisdom, to legalize certain forms of gambling, as was done in P.D. 1869
and impliedly affirmed in the Local Government Code. That decision can be revoked by this Court only if
it contravenes the Constitution as the touchstone of all official acts. We do not find such contravention
here.
We hold that the power of PAGCOR to centralize and regulate all games of chance, including casinos
on land and sea within the territorial jurisdiction of the Philippines, remains unimpaired. P.D. 1869 has
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 127255 June 26, 1998
JOKER P. ARROYO, EDCEL C. LAGMAN, JOHN HENRY R. OSMEA, WIGBERTO E. TAADA, and
RONALDO B. ZAMORA, petitioners,
vs.
JOSE DE VENECIA, RAUL DAZA, RODOLFO ALBANO, THE EXECUTIVE SECRETARY, THE
SECRETARY OF FINANCE, AND THE COMMISSIONER OF INTERNAL REVENUE, respondents.
MENDOZA, J.:
Petitioners seek a rehearing and reconsideration of the Court's decision dismissing their petition
for certiorari and prohibition. Basically, their contention is that when the Majority Leader (Rep. Rodolfo
Albano) moved for the approval of the conference committee report on the bill that became R.A. No.
8240, leading the Chair (Deputy Speaker Raul Daza) to ask if there was any objection to the motion,
and Rep. Joker P. Arroyo asked, "What is that, Mr. Speaker?", the Chair allegedly ignored him and
instead declared the report approved. Petitioners claim that the question "What is that, Mr. Speaker?"
was a privileged question or a point of order which, under the rules of the House, has precedence over
other matters, with the exception of motions to adjourn.
The contention has no merit. Rep. Arroyo did not have floor. Without first drawing the attention of the
Chair, he simply stood up and started talking. As a result, the Chair did not hear him and proceeded to
ask if there were objections to the Majority Leader's motion. Hearing none, he declared the report
approved. Rule XVI, 96 of the Rules of the House of Representatives provides:
96. Manner of Addressing the Chair. When a member desires to speak, he shall
rise and respectfully address the Chair "Mr. Speaker."
The Rules of the Senate are even more emphatic. Rule XXVI, 59 says:
59. Whenever a Senator wishes to speak, he shall rise and request the President or
the Presiding Officer to allow him to have the floor which consent shall be necessary
before he may proceed.
If various Senators wish to have the floor, the President or Presiding Officer shall
recognize the one who first made the request.
Indeed, the transcript of the proceedings of November 21, 1996 1 shows that after complaining that he
was being "hurried" by the Majority Leader to finish his interpellation of the sponsor (Rep. Javier) of the
conference committee report Rep. Arroyo concluded and then sat down. However, when the Majority
Leader moved for the approval of the conference committee report and the Chair asked if there was any
objection to the motion, Rep. Arroyo stood up again and, without requesting to be recognized, asked,
"What is that, Mr. Speaker?" Apparently, the Chair did not hear Rep. Arroyo since his attention was on
the Majority Leader. Thus, he proceeded to ask if there was any objection and, hearing none, declared
the report approved and brought down the gavel. At that point, Rep. Arroyo shouted, "No, no, no, wait a
minute," and asked what the question was. Only after he had been told that the Chair had called for
objection to the motion for approval of the report did Rep. Arroyo register his objection. It is not,
therefore, true that Rep. Arroyo was ignored. He was simply not heard because he had not first
obtained recognition from the Chair.
Nor is it correct to say that the question ("What is that, Mr. Speaker?'') he was raising was a question of
privilege or a point of older. Rule XX, 121 of the Rules of the House defines a question of privilege as
follows
Sec. 121. Definition. Questions of privilege are those affecting the duties, conduct,
rights, privileges, dignity, integrity or reputation of the House or of its members,
collectively or individually.
while a point of order is defined as follows
Points of order or questions of order are legislative devices used in requiring the
House or any of its Members to observe its own rules and to follow regular or
established parliamentary procedure. In effect, they are either objections to pending
proceedings as violative of some of those rules or demands for immediate return to
the aforementioned parliamentary procedure. 2
Petitioners further charge that there was a disregard of Rule XIX, 112 and Rule XVII, 103 of the
Rules of the House which require that the Chair should state a motion and ask for the individual votes of
the members instead of merely asking whether there was any objection to the motion. As explained
already in the decision in this case, the practice in cases involving the approval of a conference
committee report is for the Chair simply to ask if there are objections to the motion for approval of the
report. This practice is well-established and is as much a part of parliamentary law as the formal rules of
the House. As then Majority Leader Arturo M. Tolentino explained in 1957 when this practice was
questioned:
MR. TOLENTINO. The fact that nobody objects means a unanimous action of the
House. Insofar as the matter of procedure is concerned, this has been a precedent
since I came here seven years ago, and it has been the procedure in this House that
if somebody objects, then a debate follows and after the debate, then the voting
comes in.
xxx xxx xxx
Mr. Speaker, a point of order was raised by the gentleman from Leyte, and I wonder
what his attitude is now on his point of order. I should just like to state that I believe
that we have had a substantial compliance with the Rules. The Rule invoked is not
one that refers to statutory or constitutional requirement, and a substantial
compliance, to my mind, is sufficient. When the Chair announces the vote by saying
"Is there any objection?" and nobody objects, then the Chair announces "The bill is
approved on second reading." If there was any doubt as to the vote, any motion to
divide would have been proper. So, if that motion is not presented, we assume that
the House approves the measure. So I believe there is substantial compliance here,
and if anybody wants a division of the House he can always ask for it, and the Chair
can announce how many are in favor and how many are against. 3
At all events, Rep. Arroyo could have asked for a reconsideration of the ruling of the Chair declaring the
conference committee report approved. It is not true he was prevented from doing so. The session was
suspended, obviously to settle the matter amicably. From all appearances, the misunderstanding was
patched up during the nearly hour-long suspension because, after the session was resumed, Rep.
Arroyo did not say anything anymore. As the Journal of November 21, 1996 of the House shows, the
session was thereafter adjourned.
On the same day, the bill was signed by the Speaker of the House and the President of the Senate, and
certified by the respective secretaries of both houses of Congress as having been finally passed. The
following day, the bill was signed into law by the President of the Philippines.
Finally, petitioners take exception to the following statement in the decision that "The question of
quorum cannot be raised repeatedly especially when the quorum is obviously present for the
purpose of delaying the business of the House." 4 They contend that, following this ruling, even if only
10 members of the House remain in the session hall because the others have gone home, the quorum
may not be questioned.
That was not the situation in this case, however. As noted in the decision, at 11:48 a.m. on November
21, 1996, Rep. Arroyo questioned the existence of a quorum, but after a roll call, it was found that was
one. After that, he announced he would again question the quorum, apparently to delay the voting on
the conference report. Hence, the statement in the decision that the question of quorum cannot
repeatedly be raised for the purpose of delaying the business of the House.
In sum, there is no basis for the charge that the approval of the conference committee report on what
later became R.A. No. 8240 was railroaded through the House of Representatives. Nor is there any
need for petitioners to invoke the power of this Court under Art. VIII, 1 of the Constitution to determine
whether, in enacting R.A. No. 8240, the House of Representatives acted with grave abuse of discretion,
since that is what we have precisely done, although the result of our review may not be what petitioners
want. It should be added that, even if petitioners' allegations are true, the disregard of the rules in this
case would not affect the validity of R.A. No. 8240, the rules allegedly violated being merely internal
rules of procedure of the House rather than constitutional requirements for the enactment of laws. It is
well settled that a legislative act will not be declared invalid for non-compliance with internal rules.
WHEREFORE, the motion for rehearing and reconsideration is DENIED with FINALITY.
SO ORDERED.
EN BANC
[G.R. No. 136760. July 29, 2003]
THE SENATE BLUE RIBBON COMMITTEE, represented by its Chairman, SENATOR AQUILINO Q.
PIMENTEL, JR., petitioner, vs. HON. JOSE B. MAJADUCON, Presiding Judge of Branch 23,
Regional Trial Court of General Santos City, and ATTY. NILO J. FLAVIANO, respondents.
[G.R. No. 138378. July 29, 2003]
AQUILINO Q. PIMENTEL, JR., petitioner, vs. THE HONORABLE JOSE S. MAJADUCON, in his
capacity as Presiding Judge of Branch 23, Regional Trial Court, General Santos
City, respondent.
DECISION
YNARES-SANTIAGO, J.:
For resolution are two consolidated petitions: (a) G.R. No. 136760, for certiorari, prohibition,
mandamus and preliminary injunction, assailing the resolution dated November 11, 1998 of Judge Jose
S. Majaducon of the Regional Trial Court of General Santos City, Branch 23, which denied the Senate
Blue Ribbon Committees motion to dismiss the petition for prohibition, injunction with writ of preliminary
injunction filed by private respondent Atty. Nilo J. Flaviano; and (b) G.R. No. 138378, for review of the
resolution dated April 15, 1999 of respondent Judge Majaducon declaring petitioner Senator Aquilino Q.
Pimentel, Jr. guilty of indirect contempt of court.
The antecedent facts are as follows:
G.R. No. 136760:
On August 28, 1998, Senator Blas F. Ople filed Senate Resolution No. 157 directing the
Committee on National Defense and Security to conduct an inquiry, in aid of legislation, into the charges
of then Defense Secretary Orlando Mercado that a group of active and retired military officers were
organizing a coup detat to prevent the administration of then President Joseph Estrada from probing
alleged fund irregularities in the Armed Forces of the Philippines. [1]
On the same date, Senator Vicente C. Sotto III also filed Resolution No. 160, directing the
appropriate senate committee to conduct an inquiry, in aid of legislation, into the alleged
mismanagement of the funds and investment portfolio of the Armed Forces Retirement and Separation
Benefits System (AFP-RSBS) xxx. [2]
The Senate President referred the two resolutions to the Committee on Accountability of Public
Officers and Investigations (Blue Ribbon Committee) and the Committee on National Defense and
Security.
During the public hearings conducted by the Senate Blue Ribbon Committee (hereafter called the
Committee), it appeared that the AFP-RSBS purchased a lot in General Santos City, designated as Lot
X, MR-1160, for P10,500.00 per square meter from private respondent Atty. Nilo J. Flaviano. However,
the deed of sale filed with the Register of Deeds indicated that the purchase price of the lot was only
P3,000.00 per square meter.
The Committee thereafter caused the service of a subpoena to respondent Atty. Flaviano,
directing him to appear and testify before it. Respondent refused to appear at the hearing.Instead, he
filed a petition for prohibition and preliminary injunction with prayer for temporary restraining order with
the Regional Trial Court of General Santos City, Branch 23, which was docketed as SP Civil Case No.
496.
On October 21, 1998, the trial court issued a Temporary Restraining Order directing the
Committee to CEASE and DESIST from proceeding with the inquiry in P.S. 160 particularly in General
Santos City and/or anywhere in Region XI or Manila on matters affecting the patenting/titling and sale of
Lot X, MR-1160-D to AFP-RSBS, and from issuing subpoenas to witnesses from Region XI, particularly
from General Santos City, pending the hearing of the petition for prohibition and injunction. [3]
On November 5, 1998, the Committee filed a motion to dismiss the petition on the grounds of (a)
lack of jurisdiction, and (b) failure to state a valid cause of action. It further argued that the issuance of
the Temporary Restraining Order was invalid for violating the rule against ex-parte issuance thereof;
and that the same was not enforceable beyond the territorial jurisdiction of the trial court.
On November 11, 1998, the trial court denied petitioners motion to dismiss and granted the writ of
preliminary injunction, thus:
WHEREFORE, PREMISES CONSIDERED, the motion to dismiss is DENIED, and the WRIT OF
PRELIMINARY INJUNCTION is hereby issued against respondent. It is enjoined from enforcing its
subpoenas to petitioner in Region XI to appear and testify before it in any of its inquiry or investigation
anywhere in the Philippines regarding the acquisition by the AFP-RSBS of Lot X, MR-1160-D, located in
General Santos City. The bond of petitioner filed on October 21, 1998, for P500,000.00 for the TRO
also serves as his bond in this injunction.
SO ORDERED.[4]
Hence, the instant petition for certiorari which was docketed as G.R. No. 136760, alleging that
respondent Judge Majaducon committed grave abuse of discretion and/or acted without or in excess of
jurisdiction when he:
I. DENIED PETITIONERS MOTION TO DISMISS THE PETITION FOR PROHIBITION AND
PRELIMINARY INJUNCTION FILED BY PRIVATE RESPONDENT, ATTY. NILO J.
FLAVIANO, AGAINST THE PETITIONER IN SP. CIVIL CASE NO. 496.
II. ISSUED (1) A TEMPORARY RESTRAINING ORDER EX-PARTE FOR A PERIOD OF
TWENTY (20) DAYS AGAINST THE PETITIONER ON OCTOBER 21, 1998, AND
(2) A WRIT OF PRELIMINARY INJUNCTION ON NOVEMBER 11, 1998
ENJOINING THE PETITIONER FROM ENFORCING ITS SUBPOENAS TO
PRIVATE RESPONENT IN REGION XI.
III. APPLIED THE RULING OF BENGZON VS. SENATE BLUE RIBBON IN GRANTING
INJUNCTIVE RELIEF TO PRIVATE RESPONDENT.[5]
G.R. No. 138378:
On January 13, 1999, the newspaper, The Philippine Star published a news report on the filing by
the Committee with this Court of the petition for certiorari which was docketed as G.R. No. 136760. The
news report quoted portions of the petition filed by the Committee, alleging that Regional Trial Court
Judge Majaducon was guilty of gross ignorance of the rules and procedures when he issued the
temporary restraining order and the writ of preliminary injunction because, under the principle of
separation of powers, courts cannot interfere with the exercise by the legislature of its authority to
conduct investigations in aid of legislation.[6]
Reacting to the aforesaid news report, respondent Judge Majaducon motu proprio initiated a
charge for indirect contempt of court against Senator Aquilino Q. Pimentel, Jr., news reporter Perseus
Echeminada, Philippine Star publisher Maximo Soliven, editor-in-chief Ramon J. Farolan, and executive
editor Bobby G. dela Cruz, which was docketed as Special Civil Case No. 496. Judge Majaducon
averred that the news report created in the minds of the reader the impression that he violated the
separation of powers clause of the Constitution and that he was guilty of gross ignorance of the rules
and procedures.
After the respondents submitted their respective answers, a decision was rendered on April 15,
1999 finding petitioner Pimentel guilty of indirect contempt.
Hence, the instant petition based on the following grounds:
 I. THE EXPRESSION GROSS IGNORANCE OF THE RULES OF PROCEDURE OR
GROSS IGNORANCE OF THE LAW IN REFERENCE TO THE RESPONDENTS
EX-PARTE ISSUANCE OF INJUNCTIVE RELIEF IS NOT PEJORATIVE AS TO
CONSTITUTE A GROUND FOR INDIRECT CONTEMPT.
II. THIS HONORABLE COURT ITSELF USES GROSS IGNORANCE OF THE LAW AND
OTHER EXPRESSIONS OF SIMILAR FORCEFUL IMPORT IN DESCRIBING
GROSS AND PALPABLE ERRORS OF JUDGES.
III. BY UPHOLDING HIS CONTEMPT CHARGE AGAINST THE PETITIONER, THE
RESPONDENT JUDGE HAS, IN EFFECT, PREEMPTED THIS HONORABLE
COURT IN RESOLVING THE ISSUES RAISED AGAINST HIM IN G.R. NO. 136760.
IV. THE PUBLICATION BY PHILIPPINE STAR OF THE BLUE RIBBON PETITION IN G.R.
NO. 136760, OR EXCERPTS THEREOF WAS A LEGITIMATE EXERCISE OF
FREEDOM OF EXPRESSION AND OF THE PRESS.
The two petitions, namely, G.R. No. 136760 and G.R. No. 138378, were ordered consolidated on
December 11, 2000.
The issues for resolution in these joint petitions are: (a) whether or not respondent Judge Jose
Majaducon committed grave abuse of discretion when he dismissed petitioners motion to dismiss the
petition for prohibition and issued the writ of preliminary injunction; and (b) whether or not respondent
Judge erred in convicting petitioner Pimentel of indirect contempt of court.
On the first issue, petitioner Committee contends that courts have no jurisdiction to restrain
Congress from performing its constitutionally vested function to conduct investigations in aid of
legislation, following the principle of separation of powers. Moreover, the petition filed by respondent
Flaviano before the trial court failed to state a cause of action considering that the legislative inquiry did
not deal with the issuance of the patent and title to Lot X, MR-1160-D in the name of AFP-RSBS, which
is well within the courts jurisdiction, but with the anomaly in the purchase thereof, which falls squarely
within the ambit of Senate Resolutions Nos. 157[7] and 160.[8]
On the other hand, respondent Flaviano contends that the trial court may properly intervene into
investigations by Congress pursuant to the power of judicial review vested in it by the Constitution. He
avers that he has a valid cause of action to file the petition for prohibition considering that the
Committees investigation will delve into the validity of the patenting and titling of Lot X, MR-1160-D
which, as admitted by petitioner, falls within the competence of judicial courts. In fact, the validity of the
purchase by AFP-RSBS of the subject lot is already the subject of a pending action before the Regional
Trial Court of General Santos City and the Ombudsman of Mindanao. Finally, he cites the case
of Bengzon v. Senate Blue Ribbon Committee,[9] and argues that preliminary injunction may issue in
cases pending before administrative bodies such as the Ombudsman or the Office of the Prosecutor as
long as the right to self-incrimination guaranteed by the Bill of Rights is in danger. Furthermore, an
information against him has been filed with the Sandiganbayan.
We find for petitioner. There is grave abuse of discretion when the respondent acts in a capricious,
whimsical, arbitrary or despotic manner in the exercise of his judgment, as when the assailed order is
bereft of any factual and legal justification.[10] In this case, the assailed resolution of respondent Judge
Majaducon was issued without legal basis.
The principle of separation of powers essentially means that legislation belongs to Congress,
execution to the Executive, and settlement of legal controversies to the Judiciary. Each is prevented
from invading the domain of the others.[11] When the Senate Blue Ribbon Committee served subpoena
on respondent Flaviano to appear and testify before it in connection with its investigation of the alleged
misuse and mismanagement of the AFP-RSBS funds, it did so pursuant to its authority to conduct
inquiries in aid of legislation. This is clearly provided in Article VI, Section 21 of the Constitution, thus:
The Senate or the House of Representatives or any of its respective committees may conduct inquiries
in aid of legislation in accordance with its duly published rules of procedure. The rights of persons
appearing in or affected by such inquiries shall be respected.
Hence, the Regional Trial Court of General Santos City, or any court for that matter, had no
authority to prohibit the Committee from requiring respondent to appear and testify before it.
The ruling in Bengzon, cited by respondent, does not apply in this case. We agree with petitioner
Committee that the factual circumstances therein are different from those in the case at
bar. In Bengzon, no intended legislation was involved and the subject matter of the inquiry was more
within the province of the courts rather than of the legislature. More specifically, the investigation in the
said case was an offshoot of the privilege speech of then Senator Enrile, who urged the Senate to look
into a possible violation of the Anti-Graft and Corrupt Practices Act by the relatives of then President
Corazon Aquino, particularly Mr. Ricardo Lopa, in connection with the alleged sale of 36 to 39
corporations belonging to Benjamin Romualdez. On the other hand, there was in this case a clear
legislative purpose, as stated in Senate Resolution No. 160, and the appropriate Senate Committee
was directed to look into the reported misuse and mismanagement of the AFP-RSBS funds, with the
intention of enacting appropriate legislation to protect the rights and interests of the officers and
members of the Armed Forces of the Philippines. Further, in Bengzon, the validity of the sale of
Romualdezs corporations was pending with the Sandiganbayan when the Senate Blue Ribbon
Committee decided to conduct its investigation. In short, the issue had already been pre-empted by the
court.
In the instant case, the complaint against respondent Flaviano regarding the anomaly in the sale
of Lot X, MR-1160 was still pending before the Office of the Ombudsman when the Committee served
subpoena on him. In other words, no court had acquired jurisdiction over the matter. Thus, there was as
yet no encroachment by the legislature into the exclusive jurisdiction of another branch of the
government. Clearly, there was no basis for the respondent Judge to apply the ruling
in Bengzon. Hence, the denial of petitioners motion to dismiss the petition for prohibition amounted to
grave abuse of discretion.
In G.R. No. 138378, petitioner, Senator Aquilino Pimentel, Jr., contends that respondent judge
erred in finding him, as representative of the Committee, guilty of indirect contempt of court under Rule
71, Section 3(d) of the 1997 Rules of Civil Procedure. According to Pimentel, the phrase gross
ignorance of the rules of law and procedure, which the Committee used in the petition, is not
depreciatory, but merely a description of normal usage in petitions where the acts of lower courts are
challenged before higher judicial bodies. In fact, this Court often uses the phrase in its decisions to
describe judges who commit gross and palpable mistakes in their interpretation and application of the
law. Petitioner further maintains that when the Committee used the phrase, it did so without
malice. Rather, it was only to stress the unfamiliarity of or disregard by the respondent Judge of a basic
rule of procedure, and to buttress its arguments in support of its petition for certiorari.
Petitioner Pimentel also contends that he had no participation in the publication in the Philippine
Star of excerpts from the Committees petition for certiorari. Even assuming arguendothat it was within
his control, he pointed out that he could not have prevented the editors and writers of the newspaper
from publishing the same, lest he violate their constitutional right of free expression. Indeed, the report
by the Philippine Star of the filing of the petition and the reproduction of its contents was a legitimate
exercise of press freedom.
Respondent Judge counters that Pimentel was guilty of indirect contempt of court, first, for causing
the publication of the Committees petition in the Philippine Star notwithstanding that the same was sub
judice; second, for making derogatory remarks in the petition itself which affected the honor and
integrity of the respondent judge and degraded the administration of justice; and third, for making it
appear that an administrative complaint was filed against respondent Judge for gross ignorance of the
law. These, he said, constituted malicious and false report which obstructed the administration of
justice.
Rule 71, Section 3(d) of the 1997 Rules of Civil Procedure provides:
Section 3. Indirect contempt to be punished after charge and hearing. After a charge in writing has been
filed, and an opportunity given to the respondent to comment thereon within such period as may be
fixed by the court and to be heard by himself or counsel, a person guilty of any of the following acts may
be punished for indirect contempt:
xxxxxxxxx
d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the
administration of justice; x x x.
After deliberating on the parties arguments, we find that petitioner Pimentel is not guilty of
improper conduct which obstructs or degrades the administration of justice.
Verily, it does not appear that Pimentel caused the publication in the Philippine Star of the fact of
filing of the petition for certiorari by the Committee and the reproduction of excerpts thereof. He had no
right to choose which news articles will see print in the newspaper. Rather, it is the publisher thereof
which decides which news events will be reported in the broadsheet.In doing so, it is allowed the widest
latitude of choice as to what items should see the light of day so long as they are relevant to a matter of
public interest, pursuant to its right of press freedom.[12]
Respondent Judges allegation that petitioner made it appear that an administrative complaint was
filed against him is without basis. From a careful perusal of the records, it appears that while the
Committee prayed for the imposition of administrative sanctions against respondent Judge Majaducon
for gross ignorance of the law, no formal administrative complaint was instituted separately from the
petition for certiorari.
Finally, the statement that respondent Judge was grossly ignorant of the rules of law and
procedure does not constitute improper conduct that tends to impede, obstruct or degrade the
administration of justice. As correctly argued by petitioner, the phrase gross ignorance of the rules of
law and procedure is ordinarily found in administrative complaints and is a necessary description to
support a petition which seeks the annulment of an order of a judge wherein basic legal principles are
disregarded.
In Spouses Bacar v. Judge De Guzman, Jr.,[13] it was held that when the law is so elementary, not
to know it or to act as if a judge does not know it, constitutes gross ignorance of the law. In this case,
there was no showing that petitioner Pimentel, as representative of the Committee, used the phrase to
malign the trial court. Rather, it was used to express what he believed as a violation of the basic
principle of separation of powers.
In this connection, it bears stressing that the power to declare a person in contempt of court must
be exercised on the preservative, not vindictive principle, and on the corrective and not retaliatory idea
of punishment.[14] This was aptly expressed in the case of Nazareno v. Barnes:[15]
A judge, as a public servant, should not be so thin-skinned or sensitive as to feel hurt or offended if a
citizen expresses an honest opinion about him which may not altogether be flattering to him. After all,
what matters is that a judge performs his duties in accordance with the dictates of his conscience and
the light that God has given him. A judge should never allow himself to be moved by pride, prejudice,
passion, or pettiness in the performance of his duties. He should always bear in mind that the power of
the court to punish for contempt should be exercised for purposes that are impersonal, because that
power is intended as a safeguard not for the judges as persons but for the functions that they exercise.
WHEREFORE, in view of the foregoing, the petitions docketed as G.R. Nos. 136760 and 138378
are GRANTED. The resolution of the Regional Trial Court of General Santos City, Branch 23, in Special
Civil Case No. 496 dated November 11, 1998, which denied the Senate Blue Ribbon Committees
motion to dismiss, is REVERSED and SET ASIDE. The Writ of Preliminary Injunction issued by the trial
court on November 11, 1998 is DISSOLVED. The resolution dated April 15, 1999, which declared
Senator Aquilino Q. Pimentel, Jr. guilty of indirect contempt of court, is REVERSED and SET
ASIDE. The petition for indirect contempt is ordered DISMISSED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 102782 December 11, 1991
THE SOLICITOR GENERAL, RODOLFO A. MALAPIRA, STEPHEN A. MONSANTO, DAN R.
CALDERON, and GRANDY N. TRIESTE, petitioners
vs.
THE METROPOLITAN MANILA AUTHORITY and the MUNICIPALITY OF
MANDALUYONG, respondents.
CRUZ, J.:
In Metropolitan Traffic Command, West Traffic District vs. Hon. Arsenio M. Gonong, G.R. No. 91023,
promulgated on July 13, 1990, 1 the Court held that the confiscation of the license plates of motor
vehicles for traffic violations was not among the sanctions that could be imposed by the Metro Manila
Commission under PD 1605 and was permitted only under the conditions laid dowm by LOI 43 in the
case of stalled vehicles obstructing the public streets. It was there also observed that even the
confiscation of driver's licenses for traffic violations was not directly prescribed by the decree nor was it
allowed by the decree to be imposed by the Commission. No motion for reconsideration of that decision
was submitted. The judgment became final and executory on August 6, 1990, and it was duly entered in
the Book of Entries of Judgments on July 13, 1990.
Subsequently, the following developments transpired:
In a letter dated October 17, 1990, Rodolfo A. Malapira complained to the Court that when he was
stopped for an alleged traffic violation, his driver's license was confiscated by Traffic Enforcer Angel de
los Reyes in Quezon City.
On December 18,1990, the Caloocan-Manila Drivers and Operators Association sent a letter to the
Court asking who should enforce the decision in the above-mentioned case, whether they could seek
damages for confiscation of their driver's licenses, and where they should file their complaints.
Another letter was received by the Court on February 14, 1991, from Stephen L. Monsanto, complaining
against the confiscation of his driver's license by Traffic Enforcer A.D. Martinez for an alleged traffic
violation in Mandaluyong.
This was followed by a letter-complaint filed on March 7, 1991, from Dan R. Calderon, a lawyer, also for
confiscation of his driver's license by Pat. R.J. Tano-an of the Makati Police Force.
Still another complaint was received by the Court dated April 29, 1991, this time from Grandy N. Trieste,
another lawyer, who also protested the removal of his front license plate by E. Ramos of the
Metropolitan Manila Authority-Traffic Operations Center and the confiscation of his driver's license by
Pat. A.V. Emmanuel of the Metropolitan Police Command-Western Police District.
Required to submit a Comment on the complaint against him, Allan D. Martinez invoked Ordinance No.
7, Series of 1988, of Mandaluyong, authorizing the confiscation of driver's licenses and the removal of
license plates of motor vehicles for traffic violations.
For his part, A.V. Emmanuel said he confiscated Trieste's driver's license pursuant to a memorandum
dated February 27, 1991, from the District Commander of the Western Traffic District of the Philippine
National Police, authorizing such sanction under certain conditions.
Director General Cesar P. Nazareno of the Philippine National Police assured the Court in his own
Comment that his office had never authorized the removal of the license plates of illegally parked
vehicles and that he had in fact directed full compliance with the above-mentioned decision in a
memorandum, copy of which he attached, entitled Removal of Motor Vehicle License Plates and dated
February 28, 1991.
Pat. R.J. Tano-an, on the other hand, argued that the Gonong decision prohibited only the removal of
license plates and not the confiscation of driver's licenses.
On May 24, 1990, the Metropolitan Manila Authority issued Ordinance No. 11, Series of 1991,
authorizing itself "to detach the license plate/tow and impound attended/ unattended/ abandoned motor
vehicles illegally parked or obstructing the flow of traffic in Metro Manila."
On July 2, 1991, the Court issued the following resolution:
The attention ofthe Court has been called to the enactment by the Metropolitan Manila
Authority of Ordinance No. 11, Series of 1991, providing inter alia that:
Section 2. Authority to Detach Plate/Tow and Impound. The Metropolitan Manila
Authority, thru the Traffic Operatiom Center, is authorized to detach the license
plate/tow and impound attended/unattended/abandoned motor vehicles illegally
parked or obstructing the flow of traffic in Metro Manila.
The provision appears to be in conflict with the decision of the Court in the case at bar (as
reported in 187 SCRA 432), where it was held that the license plates of motor vehicles may not
be detached except only under the conditions prescribed in LOI 43. Additionally, the Court has
received several complaints against the confiscation by police authorities of driver's licenses
for alleged traffic violations, which sanction is, according to the said decision, not among those
that may be imposed under PD 1605.
To clarify these matters for the proper guidance of law-enforcement officers and motorists, the
Court resolved to require the Metropolitan Manila Authority and the Solicitor General to submit,
within ten (10) days from notice hereof, separate COMMENTS on such sanctions in light of the
said decision.
In its Comment, the Metropolitan Manila Authority defended the said ordinance on the ground that it
was adopted pursuant to the powers conferred upon it by EO 392. It particularly cited Section 2 thereof
vesting in the Council (its governing body) the responsibility among others of:
1. Formulation of policies on the delivery of basic services requiring coordination or
consolidation for the Authority; and
2. Promulgation of resolutions and other issuances of metropolitan wide application, approval
of a code of basic services requiring coordination, and exercise of its rule-making powers.
(Emphasis supplied)
The Authority argued that there was no conflict between the decision and the ordinance because the
latter was meant to supplement and not supplant the latter. It stressed that the decision itself said that
the confiscation of license plates was invalid in the absence of a valid law or ordinance, which was why
Ordinance No. 11 was enacted. The Authority also pointed out that the ordinance could not be attacked
collaterally but only in a direct action challenging its validity.
For his part, the Solicitor General expressed the view that the ordinance was null and void because it
represented an invalid exercise of a delegated legislative power. The flaw in the measure was that it
violated existing law, specifically PD 1605, which does not permit, and so impliedly prohibits, the
removal of license plates and the confiscation of driver's licenses for traffic violations in Metropolitan
Manila. He made no mention, however, of the alleged impropriety of examining the said ordinance in
the absence of a formal challenge to its validity.
On October 24, 1991, the Office of the Solicitor General submitted a motion for the early resolution of
the questioned sanctions, to remove once and for all the uncertainty of their vahdity. A similar motion
was filed by the Metropolitan Manila Authority, which reiterated its contention that the incidents in
question should be dismissed because there was no actual case or controversy before the Court.
The Metropolitan Manila Authority is correct in invoking the doctrine that the validity of a law or act can
be challenged only in a direct action and not collaterally. That is indeed the settled principle. However,
that rule is not inflexible and may be relaxed by the Court under exceptional circumstances, such as
those in the present controversy.
The Solicitor General notes that the practices complained of have created a great deal of confusion
among motorists about the state of the law on the questioned sanctions. More importantly, he maintains
that these sanctions are illegal, being violative of law and the Gonong decision, and should therefore be
stopped. We also note the disturbing report that one policeman who confiscated a driver's license
dismissed the Gonong decision as "wrong" and said the police would not stop their "habit" unless they
received orders "from the top." Regrettably, not one of the complainants has filed a formal challenge to
the ordinances, including Monsanto and Trieste, who are lawyers and could have been more assertive
of their rights.
Given these considerations, the Court feels it must address the problem squarely presented to it and
decide it as categorically rather than dismiss the complaints on the basis of the technical objection
raised and thus, through its inaction, allow them to fester.
The step we now take is not without legal authority or judicial precedent. Unquestionably, the Court has
the power to suspend procedural rules in the exercise of its inherent power, as expressly recognized in
the Constitution, to promulgate rules concerning "pleading, practice and procedure in all courts." 2 In
proper cases, procedural rules may be relaxed or suspended in the interest of substantial justice, which
otherwise may be miscarried because of a rigid and formalistic adherence to such rules.
The Court has taken this step in a number of such cases, notably Araneta vs. Dinglasan, 3 where
Justice Tuason justified the deviation on the ground that "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."
We have made similar rulings in other cases, thus:
Be it remembered that rules of procedure are but mere tools designed to facilitate the
attainment ofjustice. Their strict and rigid application, which would result in technicalities that
tend to frustrate rather than promote substantial justice, must always be avoided. (Aznar III vs.
Bernad, G.R. No. 81190, May 9, 1988, 161 SCRA 276.) Time and again, this Court has
suspended its own rules and excepted a particular case from their operation whenever the
higher interests of justice so require. In the instant petition, we forego a lengthy disquisition of
the proper procedure that should have been taken by the parties involved and proceed directly
to the merits of the case. (Piczon vs. Court of Appeals, 190 SCRA 31).
Three of the cases were consolidated for argument and the other two were argued separately
on other dates. Inasmuch as all of them present the same fundamental question which, in our
view, is decisive, they will be disposed of jointly. For the same reason we will pass up the
objection to the personality or sufficiency of interest of the petitioners in case G.R. No. L-3054
and case G.R. No. L-3056 and the question whether prohibition lies in cases G.R. Nos. L-2044
and L2756. No practical benefit can be gained from a discussion of these procedural matters,
since the decision in the cases wherein the petitioners'cause of action or the propriety of the
procedure followed is not in dispute, will be controlling authority on the others. Above all, 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. (Avelino vs. Cuenco,
G.R. No. L-2821 cited in Araneta vs. Dinglasan, 84 Phil. 368.)
Accordingly, the Court will consider the motion to resolve filed by the Solicitor General a petition for
prohibition against the enforcement of Ordinance No. 11, Series of 1991, of the Metropohtan Manila
Authority, and Ordinance No. 7, Series of 1988, of the Municipality of Mandaluyong. Stephen A.
Monsanto, Rodolfo A. Malapira, Dan R. Calderon, and Grandy N. Trieste are considered co-petitioners
and the Metropolitan Manila Authority and the Municipality of Mandaluyong are hereby impleaded as
respondents. This petition is docketed as G.R. No. 102782. The comments already submitted are duly
noted and shall be taken into account by the Court in the resolution of the substantive issues raised.
It is stressed that this action is not intended to disparage procedural rules, which the Court has
recognized often enough as necessary to the orderly administration of justice. If we are relaxing them in
this particular case, it is because of the failure of the proper parties to file the appropriate proceeding
against the acts complained of, and the necessity of resolving, in the interest of the public, the important
substantive issues raised.
Now to the merits.
The Metro Manila Authority sustains Ordinance No. 11, Series of 1991, under the specific authority
conferred upon it by EO 392, while Ordinance No. 7, Series of 1988, is justified on the basis of the
General Welfare Clause embodied in the Local Government Code. 4 It is not disputed that both

measures were enacted to promote the comfort and convenience of the public and to alleviate the
worsening traffic problems in Metropolitan Manila due in large part to violations of traffic rules.
The Court holds that there is a valid delegation of legislative power to promulgate such measures, it
appearing that the requisites of such delegation are present. These requisites are. 1) the completeness
of the statute making the delegation; and 2) the presence of a sufficient standard. 5
Under the first requirement, the statute must leave the legislature complete in all its terms and provisions such that all the delegate will have to do when the
statute reaches it is to implement it. What only can be delegated is not the discretion to determine what the law shall be but the discretion to determine how
the law shall be enforced. This has been done in the case at bar.
As a second requirement, the enforcement may be effected only in accordance with a sufficient standard, the function of which is to map out the boundaries
of the delegate's authority and thus "prevent the delegation from running riot." This requirement has also been met. It is settled that the "convenience and
welfare" of the public, particularly the motorists and passengers in the case at bar, is an acceptable sufficient standard to delimit the delegate's authority. 6
But the problem before us is not the validity of the delegation of legislative power. The question we must resolve is the validity of the exercise of such
delegated power.
The measures in question are enactments of local governments acting only as agents of the national legislature. Necessarily, the acts of these agents must
reflect and conform to the will of their principal. To test the validity of such acts in the specific case now before us, we apply the particular requisites of a
valid ordinance as laid down by the accepted principles governing municipal corporations.
According to Elliot, a municipal ordinance, to be valid: 1) must not contravene the Constitution or any statute; 2) must not be unfair or oppressive; 3) must
not be partial or discriminatory; 4) must not prohibit but may regulate trade; 5) must not be unreasonable; and 6) must be general and consistent with public
policy. 7
A careful study of the Gonong decision will show that the measures under consideration do not pass the first criterion because they do not conform to
existing law. The pertinent law is PD 1605. PD 1605 does not allow either the removal of license plates or the confiscation of driver's licenses for traffic
violations committed in Metropolitan Manila. There is nothing in the following provisions of the decree authorizing the Metropolitan Manila Commission (and
now the Metropolitan Manila Authority) to impose such sanctions:
Section 1. The Metropolitan Manila Commission shall have the power to impose fines and otherwise discipline drivers and operators of motor
vehicles for violations of traffic laws, ordinances, rules and regulations in Metropolitan Manila in such amounts and under such penalties as
are herein prescribed. For this purpose, the powers of the Land Transportation Commission and the Board of Transportation under existing
laws over such violations and punishment thereof are hereby transferred to the Metropolitan Manila Commission. When the proper penalty to
be imposed is suspension or revocation of driver's license or certificate of public convenience, the Metropolitan Manila Commission or its
representatives shall suspend or revoke such license or certificate. The suspended or revoked driver's license or the report of suspension or
revocation of the certificate of public convenience shall be sent to the Land Transportation Commission or the Board of Transportation, as the
case may be, for their records update.
xxx xxx xxx
Section 3.` Violations of traffic laws, ordinances, rules and regulations, committed within a twelve-month period, reckoned from the date of
birth of the licensee, shall subject the violator to graduated fines as follows: P10.00 for the first offense, P20.00 for the and offense, P50.00 for
the third offense, a one-year suspension of driver's license for the fourth offense, and a revocation of the driver's license for the fifth offense:
Provided, That the Metropolitan Manila Commission may impose higher penalties as it may deem proper for violations of its ordinances
prohibiting or regulating the use of certain public roads, streets and thoroughfares in Metropolitan Manila.
xxx xxx xxx
Section 5. In case of traffic violations, the driver's license shall not be confiscated but the erring driver shall be immediately issued a traffic
citation ticket prescribed by the Metropolitan Manila Commission which shall state the violation committed, the amount of fine imposed for the
violation and an advice that he can make payment to the city or municipal treasurer where the violation was committed or to the Philippine
National Bank or Philippine Veterans Bank or their branches within seven days from the date of issuance of the citation ticket.
If the offender fails to pay the fine imposed within the period herein prescribed, the Metropolitan Manila Commission or the law-enforcement
agency concerned shall endorse the case to the proper fiscal for appropriate proceedings preparatory to the filing of the case with the
competent traffic court, city or municipal court.
If at the time a driver renews his driver's license and records show that he has an unpaid fine, his driver's license shall not be renewed until he
has paid the fine and corresponding surcharges.
xxx xxx xxx
Section 8. Insofar as the Metropolitan Manila area is concerned, all laws, decrees, orders, ordinances, rules and regulations, or parts thereof
inconsistent herewith are hereby repealed or modified accordingly. (Emphasis supplied).
In fact, the above provisions prohibit the imposition of such sanctions in Metropolitan Manila. The Commission was allowed to "impose fines and otherwise
discipline" traffic violators only "in such amounts and under such penalties as are herein prescribed," that is, by the decree itself. Nowhere is the removal of
license plates directly imposed by the decree or at least allowed by it to be imposed by the Commission. Notably, Section 5 thereof expressly provides that
"in case of traffic violations, the driver's license shall not be confiscated." These restrictions are applicable to the Metropolitan Manila Authority and all other
local political subdivisions comprising Metropolitan Manila, including the Municipality of Mandaluyong.
The requirement that the municipal enactment must not violate existing law explains itself. Local political subdivisions are able to legislate only by virtue of a
valid delegation of legislative power from the national legislature (except only that the power to create their own sources of revenue and to levy taxes is
conferred by the Constitution itself). 8They
are mere agents vested with what is called the power of subordinate
legislation. As delegates of the Congress, the local government unit cannot contravene but must obey
at all times the will of their principal. In the case before us, the enactments in question, which are merely
local in origin, cannot prevail against the decree, which has the force and effect of a statute.
The self-serving language of Section 2 of the challenged ordinance is worth noting. Curiously, it is the
measure itself, which was enacted by the Metropolitan Manila Authority, that authorizes the
Metropolitan Manila Authority to impose the questioned sanction.
In Villacorta vs, Bemardo, 9 the Court nullified an ordinance enacted by the Municipal Board of Dagupan
City for being violative of the Land Registration Act. The decision held in part:
In declaring the said ordinance null and void, the court a quo declared:
From the above-recited requirements, there is no showing that would justify the
enactment of the questioned ordinance. Section 1 of said ordinance clearly conflicts
with Section 44 of Act 496, because the latter law does not require subdivision plans
to be submitted to the City Engineer before the same is submitted for approval to and
verification by the General Land Registration Office or by the Director of Lands as
provided for in Section 58 of said Act. Section 2 of the same ordinance also
contravenes the provisions of Section 44 of Act 496, the latter being silent on a
service fee of P0.03 per square meter of every lot subject of such subdivision
application; Section 3 of the ordinance in question also conflicts with Section 44 of Act
496, because the latter law does not mention of a certification to be made by the City
Engineer before the Register of Deeds allows registration of the subdivision plan; and
the last section of said ordinance impose a penalty for its violation, which Section 44
of Act 496 does not impose. In other words, Ordinance 22 of the City of Dagupan
imposes upon a subdivision owner additional conditions.
xxx xxx xxx
The Court takes note of the laudable purpose of the ordinance in bringing to a halt the
surreptitious registration of lands belonging to the government. But as already
intimated above, the powers of the board in enacting such a laudable ordinance
cannot be held valid when it shall impede the exercise of rights granted in a general
law and/or make a general law subordinated to a local ordinance.
We affirm.
To sustain the ordinance would be to open the floodgates to other ordinances amending and
so violating national laws in the guise of implementing them. Thus, ordinances could be
passed imposing additional requirements for the issuance of marriage licenses, to prevent
bigamy; the registration of vehicles, to minimize carnapping; the execution of contracts, to
forestall fraud; the validation of parts, to deter imposture; the exercise of freedom of speech, to
reduce disorder; and so on. The list is endless, but the means, even if the end be valid, would
be ultra vires.
The measures in question do not merely add to the requirement of PD 1605 but, worse, impose
sanctions the decree does not allow and in fact actually prohibits. In so doing, the ordinances disregard
and violate and in effect partially repeal the law.
We here emphasize the ruling in the Gonong case that PD 1605 applies only to the Metropolitan Manila
area. It is an exception to the general authority conferred by R.A. No. 413 on the Commissioner of Land
Transportation to punish violations of traffic rules elsewhere in the country with the sanction therein
prescribed, including those here questioned.
The Court agrees that the challenged ordinances were enacted with the best of motives and shares the
concern of the rest of the public for the effective reduction of traffic problems in Metropolitan Manila
through the imposition and enforcement of more deterrent penalties upon traffic violators. At the same
time, it must also reiterate the public misgivings over the abuses that may attend the enforcement of
such sanction in eluding the illicit practices described in detail in the Gonong decision. At any rate, the
fact is that there is no statutory authority for and indeed there is a statutory prohibition against the
imposition of such penalties in the Metropolitan Manila area. Hence, regardless of their merits, they
cannot be impose by the challenged enactments by virtue only of the delegated legislative powers.
It is for Congress to determine, in the exercise of its own discretion, whether or not to impose such
sanctions, either directly through a statute or by simply delegating authority to this effect to the local
governments in Metropolitan Manila. Without such action, PD 1605 remains effective and continues
prohibit the confiscation of license plates of motor vehicles (except under the conditions prescribed in
LOI 43) and of driver licenses as well for traffic violations in Metropolitan Manila.
WHEREFORE, judgment is hereby rendered:
(1) declaring Ordinance No.11, Seriesof l991,of theMetropolitan Manila Authority and Ordinance No. 7,
Series of 1988 of the Municipality of Mandaluyong, NULL and VOID; and
(2) enjoining all law enforcement authorities in Metropolitan Manila from removing the license plates of
motor vehicles (except when authorized under LOI 43) and confiscating driver licenses for traffic
violations within the said area.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-23825 December 24, 1965
EMMANUEL PELAEZ, petitioner,
vs.
THE AUDITOR GENERAL, respondent.
Zulueta, Gonzales, Paculdo and Associates for petitioner.
Office of the Solicitor General for respondent.
CONCEPCION, J.:
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 No. 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 barrios
composing the new political subdivisions 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 stipulated. 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 barrio implies 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. 2379, 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, 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 divisions thereby affected shall be
made in such manner as may be recommended by the (Insular Auditor) Auditor General and
approved by the (Governor-General) 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 mere transfer 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, 519-5201) 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 oflegislative 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."
Although1a 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.2aIndeed, 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. 2b 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" qualified, not the 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 Governor-General the public welfare requires, he may, by executive order," effect the changes
enumerated therein (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 topromote
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 ofspeculative securities. 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. As above indicated, the creation of
municipalities, is not an administrative function, but one which is essentially and eminently legislative in
character. The question of whether or not "public interest" demands the exercise of such power
is not one of fact. it is "purely a legislativequestion "(Carolina-Virginia Coastal Highway vs. Coastal
Turnpike Authority, 74 S.E. 2d. 310-313, 315-318), or apolitical 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 (Udall vs. Severn, supra, 258-359); 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 metes 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 code making 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 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.
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
vote, 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 morethan 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. 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 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.
G.R. No. 157036 June 9, 2004
FRANCISCO I. CHAVEZ Petitioner,
vs.
HON. ALBERTO G. ROMULO, IN HIS CAPACITY AS EXECUTIVE SECRETARY; DIRECTOR
GENERAL HERMOGENES E. EBDANE, JR., IN HIS CAPACITY AS THE CHIEF OF THE PNP, ET.
AL., respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
The right of individuals to bear arms is not absolute, but is subject to regulation. The maintenance of
peace and order1 and the protection of the people against violence are constitutional duties of the State,
and the right to bear arms is to be construed in connection and in harmony with these constitutional
duties.
Before us is a petition for prohibition and injunction seeking to enjoin the implementation of the
"Guidelines in the Implementation of the Ban on the Carrying of Firearms Outside of
Residence"2 (Guidelines) issued on January 31, 2003, by respondent Hermogenes E. Ebdane, Jr.,
Chief of the Philippine National Police (PNP).
The facts are undisputed:
In January 2003, President Gloria Macapagal-Arroyo delivered a speech before the members
of the PNP stressing the need for a nationwide gun ban in all public places to avert the rising
crime incidents. She directed the then PNP Chief, respondent Ebdane, to suspend the
issuance of Permits to Carry Firearms Outside of Residence (PTCFOR), thus:
 "THERE IS ALSO NEED TO FOCUS ON THE HIGH PROFILE CRIMES THAT TEND
TO DISTURB THE PSYCHOLOGICAL PERIMETERS OF THE COMMUNITY THE
LATEST BEING THE KILLING OF FORMER NPA LEADER ROLLY KINTANAR. I
UNDERSTAND WE ALREADY HAVE THE IDENTITY OF THE CULPRIT. LET US
BRING THEM TO THE BAR OF JUSTICE.
THE NPA WILL FIND IT MORE DIFFICULT TO CARRY OUT THEIR PLOTS IF OUR
LAW ENFORCEMENT AGENCIES CAN RID THEMSELVES OF RASCALS IN
UNIFORM, AND ALSO IF WE ENFORCE A GUN BAN IN PUBLIC PLACES.
THUS, I AM DIRECTING THE PNP CHIEF TO SUSPEND INDEFINITELY THE
ISSUANCE OF PERMIT TO CARRY FIREARMS IN PUBLIC PLACES. THE
ISSUANCE OF PERMITS WILL NOW BE LIMITED ONLY TO OWNERSHIP AND
POSSESSION OF GUNS AND NOT TO CARRYING THEM IN PUBLIC PLACES.
FROM NOW ON, ONLY THE UNIFORMED MEN IN THE MILITARY AND
AUTHORIZED LAW ENFORCEMENT OFFICERS CAN CARRY FIREARMS IN
PUBLIC PLACES, AND ONLY PURSUANT TO EXISTING LAW. CIVILIAN OWNERS
MAY NO LONGER BRING THEIR FIREARMS OUTSIDE THEIR RESIDENCES.
THOSE WHO WANT TO USE THEIR GUNS FOR TARGET PRACTICE WILL BE
GIVEN SPECIAL AND TEMPORARY PERMITS FROM TIME TO TIME ONLY FOR
THAT PURPOSE. AND THEY MAY NOT LOAD THEIR GUNS WITH BULLETS
UNTIL THEY ARE IN THE PREMISES OF THE FIRING RANGE.
WE CANNOT DISREGARD THE PARAMOUNT NEED FOR LAW AND ORDER.
JUST AS WE CANNOT BE HEEDLESS OF OUR PEOPLES ASPIRATIONS FOR
PEACE."
Acting on President Arroyos directive, respondent Ebdane issued the assailed Guidelines quoted as
follows:
"TO : All Concerned
FROM : Chief, PNP
SUBJECT : Guidelines in the Implementation of the Ban on the Carrying of Firearms Outside
of Residence.
DATE : January 31, 2003
1. Reference: PD 1866 dated June 29, 1983 and its Implementing Rules and Regulations.
2. General:
The possession and carrying of firearms outside of residence is a privilege granted by the
State to its citizens for their individual protection against all threats of lawlessness and security.
As a rule, persons who are lawful holders of firearms (regular license, special permit, certificate
of registration or MR) are prohibited from carrying their firearms outside of residence.
However, the Chief, Philippine National Police may, in meritorious cases as determined by him
and under conditions as he may impose, authorize such person or persons to carry firearms
outside of residence.
3. Purposes:
This Memorandum prescribes the guidelines in the implementation of the ban on the carrying
of firearms outside of residence as provided for in the Implementing Rules and Regulations,
Presidential Decree No. 1866, dated June 29, 1983 and as directed by PGMA. It also
prescribes the conditions, requirements and procedures under which exemption from the ban
may be granted.
4. Specific Instructions on the Ban on the Carrying of Firearms:
a. All PTCFOR are hereby revoked. Authorized holders of licensed firearms covered
with valid PTCFOR may re-apply for a new PTCFOR in accordance with the
conditions hereinafter prescribed.
b. All holders of licensed or government firearms are hereby prohibited from carrying
their firearms outside their residence except those covered with mission/letter orders
and duty detail orders issued by competent authority pursuant to Section 5, IRR, PD
1866, provided, that the said exception shall pertain only to organic and regular
employees.
5. The following persons may be authorized to carry firearms outside of residence.
a. All persons whose application for a new PTCFOR has been approved, provided,
that the persons and security of those so authorized are under actual threat, or by the
nature of their position, occupation and profession are under imminent danger.
b. All organic and regular employees with Mission/Letter Orders granted by their
respective agencies so authorized pursuant to Section 5, IRR, PD 1866, provided,
that such Mission/Letter Orders is valid only for the duration of the official mission
which in no case shall be more than ten (10) days.
c. All guards covered with Duty Detail Orders granted by their respective security
agencies so authorized pursuant to Section 4, IRR, PD 1866, provided, that such
DDO shall in no case exceed 24-hour duration. d. Members of duly recognized Gun
Clubs issued Permit to Transport (PTT) by the PNP for purposes of practice and
competition, provided, that such firearms while in transit must not be loaded with
ammunition and secured in an appropriate box or case detached from the person. e.
Authorized members of the Diplomatic Corps. 6. Requirements for issuance of new
PTCFOR: a. Written request by the applicant addressed to Chief, PNP stating his
qualification to possess firearm and the reasons why he needs to carry firearm
outside of residence. b. Xerox copy of current firearm license duly authenticated by
Records Branch, FED; c. Proof of actual threat, the details of which should be issued
by the Chief of Police/Provincial or City Directors and duly validated by C, RIID; d.
Copy of Drug Test Clearance, duly authenticated by the Drug Testing Center, if
photocopied; e. Copy of DI/ RIID clearance, duly authenticated by ODI/RIID, if
photocopied; f. Copy of Neuro-Psychiatric Clearance duly authenticated by NP
Testing Center, if photocopied; g. Copy of Certificate of Attendance to a Gun Safety
Seminar, duly validated by Chief, Operations Branch, FED; h. NBI Clearance; i. Two
(2) ID pictures (2" x 2") taken not earlier than one (1) year from date of filing of
application; and j. Proof of Payment
7. Procedures: a. Applications may be filed directly to the Office of the PTCFOR Secretariat in
Camp Crame. In the provinces, the applications may also be submitted to the Police Regional
Offices (PROs) and Provincial/City Police Offices (P/CPOs) for initial processing before they
are forwarded to the office of the PTCFOR Secretariat. The processors, after ascertaining that
the documentary requirements are in order, shall issue the Order of Payment (OP) indicating
the amount of fees payable by the applicant, who in turn shall pay the fees to the Land Bank.
b. Applications, which are duly processed and prepared in accordance with existing rules and
regulations, shall be forwarded to the OCPNP for approval. c. Upon approval of the
application, OCPNP will issue PTCFOR valid for one (1) year from date of issue. d.
Applications for renewal of PTCFOR shall be processed in accordance with the provisions of
par. 6 above. e. Application for possession and carrying of firearms by diplomats in the
Philippines shall be processed in accordance with NHQ PNP Memo dated September 25,
2000, with Subj: Possession and Carrying of Firearms by Diplomats in the Philippines. 8.
Restrictions in the Carrying of Firearms: a. The firearm must not be displayed or exposed to
public view, except those authorized in uniform and in the performance of their official duties.
b. The firearm shall not be brought inside public drinking and amusement places, and all other
commercial or public establishments."
Petitioner Francisco I. Chavez, a licensed gun owner to whom a PTCFOR has been issued, requested
the Department of Interior and Local Government (DILG) to reconsider the implementation of the
assailed Guidelines. However, his request was denied. Thus, he filed the present petition impleading
public respondents Ebdane, as Chief of PNP; Alberto G. Romulo, as Executive Secretary; and Gerry L.
Barias, as Chief of the PNP-Firearms and Explosives Division. He anchored his petition on the following
grounds:
"I
THE PRESIDENT HAS NO POWER OR AUTHORITY MUCH LESS BY A MERE SPEECH
TO ALTER, MODIFY OR AMEND THE LAW ON FIREARMS BY IMPOSING A GUN BAN
AND CANCELING EXISTING PERMITS FOR GUNS TO BE CARRIED OUTSIDE
RESIDENCES.
II
OFFICIALLY, THERE IS NO PRESIDENTIAL ISSUANCE ON THE GUN BAN; THE
PRESIDENTIAL SPEECH NEVER INVOKED POLICE POWER TO JUSTIFY THE GUN BAN;
THE PRESIDENTS VERBAL DECLARATION ON GUN BAN VIOLATED THE PEOPLES
RIGHT TO PROTECT LIFE AND THEIR PROPERTY RIGHT TO CARRY FIREARMS.
III
THE PNP CHIEF HAS NO POWER OR AUTHORITY TO ISSUE THE QUESTIONED
GUIDELINES BECAUSE:
1) THERE IS NO LAW, STATUTE OR EXECUTIVE ORDER WHICH GRANTS THE
PNP CHIEF THE AUTHORITY TO PROMULGATE THE PNP GUIDELINES.
2) THE IMPLEMENTING RULES AND REGULATIONS OF PD 1866 CANNOT BE
THE SUBJECT OF ANOTHER SET OF IMPLEMENTING GUIDELINES.
3) THE PRESIDENTS SPEECH CANNOT BE A BASIS FOR THE PROMULGATION
OF IMPLEMENTNG GUIDELINES ON THE GUN BAN.
IV
ASSUMING ARGUENDO, THAT THE PNP GUIDELINES IMPLEMENT PD 1866, AND THE
AMENDMENTS THERETO, THE PNP CHIEF STILL HAS NO POWER OR AUTHORITY TO
ISSUE THE SAME BECAUSE
1) PER SEC 6, RA 8294, WHICH AMENDS PD 1866, THE IRR SHALL BE
PROMULGATED JOINTLY BY THE DOJ AND THE DILG.
2) SEC. 8, PD 1866 STATES THAT THE IRR SHALL BE PROMULGATED BY THE
CHIEF OF THE PHILIPPINE CONSTABULARY.
V issue the assailed Guidelines; (2) petitioner does not have a constitutional right to own and carry
THE PNP GUIDELINES VIOLATE THE DUE PROCESS CLAUSE OF THE CONSTITUTION
BECAUSE:
1) THE RIGHT TO OWN AND CARRY A FIREARM IS NECESSARILY
INTERTWINED WITH THE PEOPLES INHERENT RIGHT TO LIFE AND TO
PROTECT LIFE. THUS, THE PNP GUIDELINES DEPRIVE PETITIONER OF THIS
RIGHT WITHOUT DUE PROCESS OF LAW FOR:
A) THE PNP GUIDELINES DEPRIVE PETITIONER OF HIS MOST
POTENT, IF NOT HIS ONLY, MEANS TO DEFEND HIMSELF.
B) THE QUESTIONED GUIDELINES STRIPPED PETITIONER OF HIS
MEANS OF PROTECTION AGAINST CRIME DESPITE THE FACT THAT
THE STATE COULD NOT POSSIBLY PROTECT ITS CITIZENS DUE TO
THE INADEQUACY AND INEFFICIENCY OF THE POLICE FORCE.
2) THE OWNESHIP AND CARRYING OF FIREARMS ARE CONSTITUTIONALLY
PROTECTED PROPERTY RIGHTS WHICH CANNOT BE TAKEN AWAY WITHOUT
DUE PROCESS OF LAW AND WITHOUT JUST CAUSE.
VI
ASSUMING ARGUENDO, THAT THE PNP GUIDELINES WERE ISSUED IN THE
EXERCISE OF POLICE POWER, THE SAME IS AN INVALID EXERCISE THEREOF
SINCE THE MEANS USED THEREFOR ARE UNREASONABLE AND
UNNCESSARY FOR THE ACCOMPLISHMENT OF ITS PURPOSE TO DETER
AND PREVENT CRIME THEREBY BECOMING UNDULY OPPRESSIVE TO LAW-
ABIDING GUN-OWNERS.
VII
THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND CONFISCATORY SINCE IT
REVOKED ALL EXISTING PERMITS TO CARRY WITHOUT, HOWEVER, REFUNDING THE
PAYMENT THE PNP RECEIVED FROM THOSE WHO ALREADY PAID THEREFOR.
VIII
THE PNP GUIDELINES VIOLATE THE EQUAL PROTECTION CLAUSE OF THE
CONSTITUTION BECAUSE THEY ARE DIRECTED AT AND OPPRESSIVE ONLY TO LAW-
ABIDING GUN OWNERS WHILE LEAVING OTHER GUN-OWNERS THE LAWBREAKERS
(KIDNAPPERS, ROBBERS, HOLD-UPPERS, MNLF, MILF, ABU SAYYAF COLLECTIVELY,
AND NPA) UNTOUCHED.
IX
THE PNP GUIDELINES ARE UNJUST, OPPRESSIVE AND UNFAIR BECAUSE THEY WERE
IMPLEMENTED LONG BEFORE THEY WERE PUBLISHED.
X
THE PNP GUIDELINES ARE EFFECTIVELY AN EX POST FACTO LAW SINCE THEY
APPLY RETROACTIVELY AND PUNISH ALL THOSE WHO WERE ALREADY GRANTED
PERMITS TO CARRY OUTSIDE OF RESIDENCE LONG BEFORE THEIR
PROMULGATION."
Petitioners submissions may be synthesized into five (5) major issues:
First, whether respondent Ebdane is authorized to issue the assailed Guidelines;
Second, whether the citizens right to bear arms is a constitutional right?;
Third, whether the revocation of petitioners PTCFOR pursuant to the assailed Guidelines is a
violation of his right to property?;
Fourth, whether the issuance of the assailed Guidelines is a valid exercise of police power?;
and
Fifth, whether the assailed Guidelines constitute an ex post facto law?
The Solicitor General seeks the dismissal of the petition pursuant to the doctrine of hierarchy of courts.
Nonetheless, in refutation of petitioners arguments, he contends that: (1) the PNP Chief is authorized to
firearms; (3) the assailed Guidelines do not violate the due process clause of the Constitution; and (4)
the assailed Guidelines do not constitute an ex post facto law.
Initially, we must resolve the procedural barrier.
On the alleged breach of the doctrine of hierarchy of courts, suffice it to say that the doctrine is not an
iron-clad dictum. In several instances where this Court was confronted with cases of national interest
and of serious implications, it never hesitated to set aside the rule and proceed with the judicial
determination of the cases.3 The case at bar is of similar import as it involves the citizens right to bear
arms.
I
Authority of the PNP Chief
Relying on the principle of separation of powers, petitioner argues that only Congress can withhold his
right to bear arms. In revoking all existing PTCFOR, President Arroyo and respondent Ebdane
transgressed the settled principle and arrogated upon themselves a power they do not possess the
legislative power.
We are not persuaded.
It is true that under our constitutional system, the powers of government are distributed among three
coordinate and substantially independent departments: the legislative, the executive and the judiciary.
Each has exclusive cognizance of the matters within its jurisdiction and is supreme within its own
sphere.4
Pertinently, the power to make laws the legislative power is vested in Congress.5 Congress may not
escape its duties and responsibilities by delegating that power to any other body or authority. Any
attempt to abdicate the power is unconstitutional and void, on the principle that "delegata potestas non
potest delegari" "delegated power may not be delegated."6
The rule which forbids the delegation of legislative power, however, is not absolute and inflexible. It
admits of exceptions. An exception sanctioned by immemorial practice permits the legislative body to
delegate its licensing power to certain persons, municipal corporations, towns, boards, councils,
commissions, commissioners, auditors, bureaus and directors. 7 Such licensing power includes the
power to promulgate necessary rules and regulations.8
The evolution of our laws on firearms shows that since the early days of our Republic, the legislatures
tendency was always towards the delegation of power. Act No. 1780, 9 delegated upon the Governor-
General (now the President) the authority (1) to approve or disapprove applications of any person for a
license to deal in firearms or to possess the same for personal protection, hunting and other lawful
purposes; and (2) to revoke such license any time.10 Further, it authorized him to issue regulations
which he may deem necessary for the proper enforcement of the Act. 11 With the enactment of Act No.
2711, the "Revised Administrative Code of 1917," the laws on firearms were integrated. 12 The Act
retained the authority of the Governor General provided in Act No. 1780. Subsequently, the growing
complexity in the Office of the Governor-General resulted in the delegation of his authority to the Chief
of the Constabulary. On January 21, 1919, Acting Governor-General Charles E. Yeater issued
Executive Order No. 813 authorizing and directing the Chief of Constabulary to act on his behalf in
approving and disapproving applications for personal, special and hunting licenses. This was followed
by Executive Order No. 6114 designating the Philippine Constabulary (PC) as the government custodian
of all firearms, ammunitions and explosives. Executive Order No. 215,15 issued by President Diosdado
Macapagal on December 3, 1965, granted the Chief of the Constabulary, not only the authority to
approve or disapprove applications for personal, special and hunting license, but also the authority to
revoke the same. With the foregoing developments, it is accurate to say that the Chief of the
Constabulary had exercised the authority for a long time. In fact, subsequent issuances such as
Sections 2 and 3 of the Implementing Rules and Regulations of Presidential Decree No.
186616 perpetuate such authority of the Chief of the Constabulary. Section 2 specifically provides that
any person or entity desiring to possess any firearm "shall first secure the necessary
permit/license/authority from the Chief of the Constabulary." With regard to the issuance of PTCFOR,
Section 3 imparts: "The Chief of Constabulary may, in meritorious cases as determined by him and
under such conditions as he may impose, authorize lawful holders of firearms to carry them outside of
residence." These provisions are issued pursuant to the general power granted by P.D. No. 1866
empowering him to promulgate rules and regulations for the effective implementation of the decree. 17 At
this juncture, it bears emphasis that P.D. No. 1866 is the chief law governing possession of firearms in
the Philippines and that it was issued by President Ferdinand E. Marcos in the exercise of his legislative
power.18 In an attempt to evade the application of the above-mentioned laws and regulations, petitioner
argues that the "Chief of the PNP" is not the same as the "Chief of the Constabulary," the PC being a
mere unit or component of the newly established PNP. He contends further that Republic Act No.
829419 amended P.D. No. 1866 such that the authority to issue rules and regulations regarding firearms
is now jointly vested in the Department of Justice and the DILG, not the Chief of the Constabulary. 20
Petitioners submission is bereft of merit.
By virtue of Republic Act No. 6975,21 the Philippine National Police (PNP) absorbed the Philippine
Constabulary (PC). Consequently, the PNP Chief succeeded the Chief of the Constabulary and,
therefore, assumed the latters licensing authority. Section 24 thereof specifies, as one of PNPs
powers, the issuance of licenses for the possession of firearms and explosives in accordance with
law.22 This is in conjunction with the PNP Chiefs "power to issue detailed implementing policies and
instructions" on such "matters as may be necessary to effectively carry out the functions, powers and
duties" of the PNP.23
Contrary to petitioners contention, R.A. No. 8294 does not divest the Chief of the Constabulary (now
the PNP Chief) of his authority to promulgate rules and regulations for the effective implementation of
P.D. No. 1866. For one, R.A. No. 8294 did not repeal entirely P.D. No. 1866. It merely provides for the
reduction of penalties for illegal possession of firearms. Thus, the provision of P.D. No. 1866 granting to
the Chief of the Constabulary the authority to issue rules and regulations regarding firearms remains
effective. Correspondingly, the Implementing Rules and Regulations dated September 15, 1997 jointly
issued by the Department of Justice and the DILG pursuant to Section 6 of R.A. No. 8294 deal only with
the automatic review, by the Director of the Bureau of Corrections or the Warden of a provincial or city
jail, of the records of convicts for violations of P.D. No. 1866. The Rules seek to give effect to the
beneficent provisions of R.A. No. 8294, thereby ensuring the early release and reintegration of the
convicts into the community.
Clearly, both P.D. No. 1866 and R.A. No. 6975 authorize the PNP Chief to issue the assailed
guidelines.
Corollarily, petitioner disputes President Arroyos declaration of a nationwide gun ban, arguing that "she
has no authority to alter, modify, or amend the law on firearms through a mere speech."
First, it must be emphasized that President Arroyos speech was just an expression of her policy and a
directive to her subordinate. It cannot, therefore, be argued that President Arroyo enacted a law through
a mere speech.
Second, at the apex of the entire executive officialdom is the President. Section 17, Article VII of the
Constitution specifies his power as Chief Executive, thus: "The President shall have control of all the
executive departments, bureaus and offices. He shall ensure that the laws be faithfully executed." As
Chief Executive, President Arroyo holds the steering wheel that controls the course of her government.
She lays down policies in the execution of her plans and programs. Whatever policy she chooses, she
has her subordinates to implement them. In short, she has the power of control. Whenever a specific
function is entrusted by law or regulation to her subordinate, she may act directly or merely direct the
performance of a duty.24 Thus, when President Arroyo directed respondent Ebdane to suspend the
issuance of PTCFOR, she was just directing a subordinate to perform an assigned duty. Such act is
well within the prerogative of her office.
II
Right to bear arms: Constitutional or Statutory?
Petitioner earnestly contends that his right to bear arms is a constitutionally-protected right. This, he
mainly anchors on various American authorities. We therefore find it imperative to determine the nature
of the right in light of American jurisprudence.
The bearing of arms is a tradition deeply rooted in the English and American society. It antedates not
only the American Constitution but also the discovery of firearms. 25
A provision commonly invoked by the American people to justify their possession of firearms is the
Second Amendment of the Constitution of the United States of America, which reads:
"A well regulated militia, being necessary for the security of free state, the right of the people to keep
and bear Arms, shall not be infringed."
An examination of the historical background of the foregoing provision shows that it pertains to the
citizens "collective right" to take arms in defense of the State, not to the citizens "individual right" to
own and possess arms. The setting under which the right was contemplated has a profound connection
with the keeping and maintenance of a militia or an armed citizenry. That this is how the right was
construed is evident in early American cases.
The first case involving the interpretation of the Second Amendment that reached the United States
Supreme Court is United States vs. Miller.26 Here, the indictment charged the defendants with
transporting an unregistered "Stevens shotgun" without the required stamped written order, contrary to
the National Firearms Act. The defendants filed a demurrer challenging the facial validity of the
indictment on the ground that the National Firearms Act offends the inhibition of the Second
Amendment. The District Court sustained the demurrer and quashed the indictment. On appeal, the
Supreme Court interpreted the right to bear arms under the Second Amendment as referring to the
collective right of those comprising the Militia a body of citizens enrolled for military discipline. It does
not pertain to the individual right of citizen to bear arm. Miller expresses its holding as follows:
"In the absence of any evidence tending to show that possession or use of a shotgun having a
barrel of less than eighteen inches in length at this time has some reasonable relationship to
the preservation or efficiency of a well regulated militia, we cannot say that the Second
Amendment guarantees the right to keep and bear such an instrument. Certainly it is not within
 judicial notice that this weapon is any part of the ordinary military equipment or that its use
could contribute to the common defense.
The same doctrine was re-echoed in Cases vs. United States.27 Here, the Circuit Court of Appeals held
that theFederal Firearms Act, as applied to appellant, does not conflict with the Second Amendment. It
ruled that:
"While [appellants] weapon may be capable of military use, or while at least familiarity with it
might be regarded as of value in training a person to use a comparable weapon of military type
and caliber, still there is no evidence that the appellant was or ever had been a member of any
military organization or that his use of the weapon under the circumstances disclosed was in
preparation for a military career. In fact, the only inference possible is that the appellant at the
time charged in the indictment was in possession of, transporting, and using the firearm and
ammunition purely and simply on a frolic of his own and without any thought or intention of
contributing to the efficiency of the well regulated militia which the Second amendment was
designed to foster as necessary to the security of a free state."
With the foregoing jurisprudence, it is erroneous to assume that the US Constitution grants upon the
American people the right to bear arms. In a more explicit language, the United States vs.
Cruikshank28 decreed: "The right of the people to keep and bear arms is not a right granted by the
Constitution. Neither is it in any way dependent upon that instrument." Likewise, in People vs.
Persce,29 the Court of Appeals said: "Neither is there any constitutional provision securing the right to
bear arms which prohibits legislation with reference to such weapons as are specifically before us for
consideration. The provision in the Constitution of the United States that the right of the people to keep
and bear arms shall not be infringed is not designed to control legislation by the state."
With more reason, the right to bear arms cannot be classified as fundamental under the 1987 Philippine
Constitution. Our Constitution contains no provision similar to the Second Amendment, as we aptly
observed in the early case of United States vs. Villareal:30
"The only contention of counsel which would appear to necessitate comment is the claim that
the statute penalizing the carrying of concealed weapons and prohibiting the keeping and the
use of firearms without a license, is in violation of the provisions of section 5 of the Philippine
Bill of Rights.
Counsel does not expressly rely upon the prohibition in the United States Constitution against
the infringement of the right of the people of the United States to keep and bear arms (U. S.
Constitution, amendment 2), which is not included in the Philippine Bill. But it may be well, in
passing, to point out that in no event could this constitutional guaranty have any bearing on the
case at bar, not only because it has not been expressly extended to the Philippine Islands, but
also because it has been uniformly held that both this and similar provisions in State
constitutions apply only to arms used in civilized warfare (see cases cited in 40 Cyc., 853, note
18); x x x."
Evidently, possession of firearms by the citizens in the Philippines is the exception, not the rule. The
right to bear arms is a mere statutory privilege, not a constitutional right. It is a mere statutory
creation. What then are the laws that grant such right to the Filipinos? The first real firearm law is Act
No. 1780 enacted by the Philippine Commission on October 12, 1907. It was passed to regulate the
importation, acquisition, possession, use and transfer of firearms. Section 9 thereof provides:
"SECTION 9. Any person desiring to possess one or more firearms for personal protection, or
for use in hunting or other lawful purposes only, and ammunition therefor, shall make
application for a license to possess such firearm or firearms or ammunition as hereinafter
provided. Upon making such application, and before receiving the license, the applicant shall
make a cash deposit in the postal savings bank in the sum of one hundred pesos for each
firearm for which the license is to be issued, or in lieu thereof he may give a bond in such form
as the Governor-General may prescribe, payable to the Government of the Philippine Islands,
in the sum of two hundred pesos for each such firearm: PROVIDED, HOWEVER, That
persons who are actually members of gun clubs, duly formed and organized at the time of the
passage of this Act, who at such time have a license to possess firearms, shall not be required
to make the deposit or give the bond prescribed by this section, and the bond duly executed by
such person in accordance with existing law shall continue to be security for the safekeeping of
such arms."
The foregoing provision was restated in Section 88731 of Act No. 2711 that integrated the firearm laws.
Thereafter, President Ferdinand E. Marcos issued P.D. No. 1866. It codified the laws on illegal
possession, manufacture, dealing in, acquisition of firearms, ammunitions or explosives and imposed
stiffer penalties for their violation. R.A. No. 8294 amended some of the provisions of P.D. No. 1866 by
reducing the imposable penalties. Being a mere statutory creation, the right to bear arms cannot be
considered an inalienable or absolute right.
III
Vested Property Right
Section 1, Article III of the Constitution provides that "no person shall be deprived of life, liberty or
property without due process of law." Petitioner invokes this provision, asserting that the revocation of
his PTCFOR pursuant to the assailed Guidelines deprived him of his "vested property right" without due
process of law and in violation of the equal protection of law.
Petitioner cannot find solace to the above-quoted Constitutional provision.
In evaluating a due process claim, the first and foremost consideration must be whether life, liberty or
property interest exists.32 The bulk of jurisprudence is that a license authorizing a person to enjoy a
certain privilege is neither a property nor property right. In Tan vs. The Director of Forestry,33 we ruled
that "a license is merely a permit or privilege to do what otherwise would be unlawful, and is not a
contract between the authority granting it and the person to whom it is granted; neither is it property or a
property right, nor does it create a vested right." In a more emphatic pronouncement, we held in Oposa
vs. Factoran, Jr.34 that:
"Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a
contract, property or a property right protected by the due process clause of the Constitution."
Petitioner, in arguing that his PTCFOR is a constitutionally protected property right, relied heavily on
Bell vs. Burson35 wherein the U.S. Supreme Court ruled that "once a license is issued, continued
possession may become essential in the pursuit of livelihood. Suspension of issued licenses thus
involves state action that adjudicates important interest of the licensees."
Petitioners reliance on Bell is misplaced. This case involves a drivers license, not a license to bear
arms. The catena of American jurisprudence involving license to bear arms is perfectly in accord with
our ruling that a PTCFOR is neither a property nor a property right. In Erdelyi vs. OBrien,36 the plaintiff
who was denied a license to carry a firearm brought suit against the defendant who was the Chief of
Police of the City of Manhattan Beach, on the ground that the denial violated her constitutional rights to
due process and equal protection of the laws. The United States Court of Appeals Ninth Circuit ruled
that Erdelyi did not have a property interest in obtaining a license to carry a firearm, ratiocinating as
follows:
"Property interests protected by the Due Process Clause of the Fourteenth Amendment do not arise
whenever a person has only an abstract need or desire for, or unilateral expectation of a benefit. x x x
Rather, they arise from legitimate claims of entitlement defined by existing rules or understanding
that stem from an independent source, such as state law. x x x Concealed weapons are closely
regulated by the State of California. x x x Whether the statute creates a property interest in concealed
weapons licenses depends largely upon the extent to which the statute contains mandatory language
that restricts the discretion of the [issuing authority] to deny licenses to applicants who claim to meet the
minimum eligibility requirements. x x x Where state law gives the issuing authority broad discretion to
grant or deny license application in a closely regulated field, initial applicants do not have a property
right in such licenses protected by the Fourteenth Amendment. See Jacobson, supra, 627 F.2d at 180
(gaming license under Nevada law);"
Similar doctrine was announced in Potts vs. City of Philadelphia, 37 Conway vs. King,38 Nichols vs.
County of Sta. Clara,39 and Gross vs. Norton.40 These cases enunciated that the test whether the
statute creates a property right or interest depends largely on the extent of discretion granted to the
issuing authority.
In our jurisdiction, the PNP Chief is granted broad discretion in the issuance of PTCFOR. This is evident
from the tenor of the Implementing Rules and Regulations of P.D. No. 1866 which state that "the Chief
of Constabulary may, in meritorious cases as determined by him and under such conditions as he may
impose, authorize lawful holders of firearms to carry them outside of residence." Following the American
doctrine, it is indeed logical to say that a PTCFOR does not constitute a property right protected under
our Constitution.
Consequently, a PTCFOR, just like ordinary licenses in other regulated fields, may be revoked any time.
It does not confer an absolute right, but only a personal privilege to be exercised under existing
restrictions, and such as may thereafter be reasonably imposed.41 A licensee takes his license subject
to such conditions as the Legislature sees fit to impose, and one of the statutory conditions of this
license is that it might be revoked by the selectmen at their pleasure. Such a license is not a contract,
and a revocation of it does not deprive the defendant of any property, immunity, or privilege within the
meaning of these words in the Declaration of Rights.42The US Supreme Court, in Doyle vs. Continental
Ins. Co,43 held: "The correlative power to revoke or recall a permission is a necessary consequence of
the main power. A mere license by the State is always revocable."
The foregoing jurisprudence has been resonating in the Philippines as early as 1908. Thus, in The
Government of the Philippine Islands vs. Amechazurra44 we ruled:
"x x x no private person is bound to keep arms. Whether he does or not is entirely optional with
himself, but if, for his own convenience or pleasure, he desires to possess arms, he must do
so upon such terms as the Government sees fit to impose, for the right to keep and bear arms
is not secured to him by law. The Government can impose upon him such terms as it pleases.
If he is not satisfied with the terms imposed, he should decline to accept them, but, if for the
purpose of securing possession of the arms he does agree to such conditions, he must fulfill
them."
IV
Police Power
At any rate, assuming that petitioners PTCFOR constitutes a property right protected by the
Constitution, the same cannot be considered as absolute as to be placed beyond the reach of the
States police power. All property in the state is held subject to its general regulations, necessary to the
common good and general welfare.
In a number of cases, we laid down the test to determine the validity of a police measure, thus:
(1) The interests of the public generally, as distinguished from those of a particular class,
require the exercise of the police power; and
(2) The means employed are reasonably necessary for the accomplishment of the purpose
and not unduly oppressive upon individuals.
Deeper reflection will reveal that the test merely reiterates the essence of the constitutional guarantees
of substantive due process, equal protection, and non-impairment of property rights.
It is apparent from the assailed Guidelines that the basis for its issuance was the need for peace and
order in the society. Owing to the proliferation of crimes, particularly those committed by the New
Peoples Army (NPA), which tends to disturb the peace of the community, President Arroyo deemed it
best to impose a nationwide gun ban. Undeniably, the motivating factor in the issuance of the assailed
Guidelines is the interest of the public in general.
The only question that can then arise is whether the means employed are appropriate and reasonably
necessary for the accomplishment of the purpose and are not unduly oppressive. In the instant case,
the assailed Guidelines do not entirely prohibit possession of firearms. What they proscribe is merely
the carrying of firearms outside of residence. However, those who wish to carry their firearms outside of
their residences may re-apply for a new PTCFOR. This we believe is a reasonable regulation. If the
carrying of firearms is regulated, necessarily, crime incidents will be curtailed. Criminals carry their
weapon to hunt for their victims; they do not wait in the comfort of their homes. With the revocation of all
PTCFOR, it would be difficult for criminals to roam around with their guns. On the other hand, it would
be easier for the PNP to apprehend them.
Notably, laws regulating the acquisition or possession of guns have frequently been upheld as
reasonable exercise of the police power.45 In State vs. Reams,46 it was held that the legislature may
regulate the right to bear arms in a manner conducive to the public peace. With the promotion of public
peace as its objective and the revocation of all PTCFOR as the means, we are convinced that the
issuance of the assailed Guidelines constitutes a reasonable exercise of police power. The ruling in
United States vs. Villareal,47 is relevant, thus:
"We think there can be no question as to the reasonableness of a statutory regulation
prohibiting the carrying of concealed weapons as a police measure well calculated to restrict
the too frequent resort to such weapons in moments of anger and excitement. We do not doubt
that the strict enforcement of such a regulation would tend to increase the security of life and
limb, and to suppress crime and lawlessness, in any community wherein the practice of
carrying concealed weapons prevails, and this without being unduly oppressive upon the
individual owners of these weapons. It follows that its enactment by the legislature is a proper
and legitimate exercise of the police power of the state."
V
Ex post facto law
In Mekin vs. Wolfe,48 an ex post facto law has been defined as one (a) which makes an action done
before the passing of the law and which was innocent when done criminal, and punishes such action; or
(b) which aggravates a crime or makes it greater than it was when committed; or (c) which changes the
punishment and inflicts a greater punishment than the law annexed to the crime when it was committed;
or (d) which alters the legal rules of evidence and receives less or different testimony than the law
required at the time of the commission of the offense in order to convict the defendant.
We see no reason to devote much discussion on the matter. Ex post facto law prohibits retrospectivity
of penal laws.49 The assailed Guidelines cannot be considered as an ex post facto law because it is
prospective in its application. Contrary to petitioners argument, it would not result in the punishment of
acts previously committed.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
FIRST DIVISION
[G.R. No. 149724. August 19, 2003]
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, represented herein by its
Secretary, HEHERSON T. ALVAREZ, petitioner, vs. DENR REGION 12
EMPLOYEES, represented by BAGUIDALI KARIM, Acting President of COURAGE (DENR
Region 12 Chapter), respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review assailing the Resolutions dated May 31, 2000[1] of the Court of Appeals
which dismissed the petition for certiorari in CA-G.R. SP No. 58896, and its Resolution dated August
20, 2001[2], which denied the motion for reconsideration.
The facts are as follows:
On November 15, 1999, Regional Executive Director of the Department of Environment and
Natural Resources for Region XII, Israel C. Gaddi, issued a Memorandum [3] directing the immediate
transfer of the DENR XII Regional Offices from Cotabato City to Koronadal (formerly Marbel), South
Cotabato. The Memorandum was issued pursuant to DENR Administrative Order No. 99-14, issued by
then DENR Secretary Antonio H. Cerilles, which reads in part:
Subject: Providing for the Redefinition of Functions and Realignment of Administrative Units in the
Regional and Field Offices:
Pursuant to Executive Order No. 192, dated June 10, 1987 and as an interim administrative
arrangement to improve the efficiency and effectiveness of the Department of Environment and Natural
Resources (DENR) in delivering its services pending approval of the government-wide reorganization
 by Congress, the following redefinition of functions and realignment of administrative units in the
regional and field offices are hereby promulgated:
Section 1. Realignment of Administrative Units:
The DENR hereby adopts a policy to establish at least one Community Environment and Natural
Resources Office (CENRO) or Administrative Unit per Congressional District except in the Autonomous
Region of Muslim Mindanao (ARMM) and the National Capital Region (NCR). The Regional Executive
Directors (REDs) are hereby authorized to realign/relocate existing CENROs and implement this policy
in accordance with the attached distribution list per region which forms part of this Order. Likewise, the
following realignment and administrative arrangements are hereby adopted:
xxxxxxxxx
1.6. The supervision of the Provinces of South Cotabato and Sarangani shall be transferred from
Region XI to XII.[4]
Respondents, employees of the DENR Region XII who are members of the employees
association, COURAGE, represented by their Acting President, Baguindanai A. Karim, filed with the
Regional Trial Court of Cotabato, a petition for nullity of orders with prayer for preliminary injunction.
On December 8, 1999, the trial court issued a temporary restraining order enjoining petitioner from
implementing the assailed Memorandum. The dispositive portion of the Order reads:
WHEREFORE, defendants DENR Secretary Antonio H. Cerilles and Regional Executive Director Israel
C. Gaddi are hereby ordered to cease and desist from doing the act complained of, namely, to stop the
transfer of DENR [Region] 12 offices from Cotabato City to Korandal (Marbel), South Cotabato.
xxx xxx xxx.
SO ORDERED.[5]
Petitioner filed a Motion for Reconsideration with Motion to Dismiss, raising the following grounds:
I.
The power to transfer the Regional Office of the Department of Environment and Natural Resources
(DENR) is executive in nature.
II.
The decision to transfer the Regional Office is based on Executive Order No. 429, which reorganized
Region XII.
III.
The validity of EO 429 has been affirmed by the Honorable Supreme Court in the Case of Chiongbian
vs. Orbos (1995) 245 SCRA 255.
IV.
Since the power to reorganize the Administrative Regions is Executive in Nature citing Chiongbian, the
Honorable Court has no jurisdiction to entertain this petition. [6]
On January 14, 2000, the trial court rendered judgment, the dispositive portion of which reads:
CONSEQUENTLY, order is hereby issued ordering the respondents herein to cease and desist from
enforcing their Memorandum Order dated November 15, 1999 relative to the transfer of the DENR
Regional Offices from Region 12 to Region 11 at Koronadal, South Cotabato for being bereft of legal
basis and issued with grave abuse of discretion amounting to lack or excess of jurisdiction on their part,
and they are further ordered to return back the seat of the DENR Regional Offices 12 to Cotabato City.
SO ORDERED.[7]
Petitioners motion for reconsideration was denied in an Order dated April 10, 2000. A petition
for certiorari under Rule 65 was filed before the Court of Appeals, docketed as CA-G.R. SP No.
58896. The petition was dismissed outright for: (1) failure to submit a written explanation why personal
service was not done on the adverse party; (2) failure to attach affidavit of service; (3) failure to indicate
the material dates when copies of the orders of the lower court were received; (4) failure to attach
certified true copy of the order denying petitioners motion for reconsideration; (5) for improper
verification, the same being based on petitioners knowledge and belief, and (6) wrong remedy of
certiorari under Rule 65 to substitute a lost appeal.[8]
The motion for reconsideration was denied in a resolution dated August 20, 2001. [9] Hence, this
petition based on the following assignment of errors:
I
RULES OF PROCEDURE CAN NOT BE USED TO DEFEAT THE ENDS OF SUBSTANTIAL
JUSTICE
II
THE DECISION OF THE LOWER COURT DATED 14 JANUARY 2000 WHICH WAS AFFIRMED IN
THE QUESTIONED RESOLUTIONS OF THE COURT OF APPEALS DATED 31 MAY 2000 AND 20
AUGUST 2001 IS PATENTLY ILLEGAL AND SHOULD BE NULLIFIED, CONSIDERING THAT:
A. RESPONDENTS HAVE NO CAUSE OF ACTION AGAINST PETITIONER AS THEY
HAVE NO RIGHT TO CAUSE THE DENR REGION 12 OFFICE TO
REMAIN IN COTABATO CITY.
B. THE STATE DID NOT GIVE ITS CONSENT TO BE SUED.
C. THE DECISION OF THE LOWER COURT DATED 14 JANUARY 2000 IS
CONTRARY TO THE RULE OF PRESUMPTION OF REGULARITY IN THE
PERFORMANCE OF OFFICIAL FUNCTIONS.
D. IN ANY EVENT, THE DECISION OF THE LOWER COURT DATED 14 JANUARY
2000 IS CONTRARY TO THE LETTER AND INTENT OF EXECUTIVE
ORDER NO. 429 AND REPUBLIC ACT NO. 6734.
E. THE DETERMINATION OF THE PROPRIETY AND PRACTICALITY OF THE
TRANSFER OF REGIONAL OFFICES IS INHERENTLY EXECUTIVE, AND
THEREFORE, NON-JUSTICIABLE.[10]
In essence, petitioner argues that the trial court erred in enjoining it from causing the transfer of
the DENR XII Regional Offices, considering that it was done pursuant to DENR Administrative Order
99-14.
The issues to be resolved in this petition are: (1) Whether DAO-99-14 and the Memorandum
implementing the same were valid; and (2) Whether the DENR Secretary has the authority to
reorganize the DENR.
Prefatorily, petitioner prays for a liberal application of procedural rules considering the greater
interest of justice.
This Court is fully aware that procedural rules are not to be simply disregarded for these
prescribed procedures ensure an orderly and speedy administration of justice. However, it is equally
true that litigation is not merely a game of technicalities. Time and again, courts have been guided by
the principle that the rules of procedure are not to be applied in a very rigid and technical manner, as
rules of procedure are used only to help secure and not to override substantial justice. [11] Thus, if the
application of the Rules would tend to frustrate rather than promote justice, it is always within the power
of this Court to suspend the rules, or except a particular case from its operation. [12]
Despite the presence of procedural flaws, we find it necessary to address the issues because of
the demands of public interest, including the need for stability in the public service and the serious
implications this case may cause on the effective administration of the executive department. Although
no appeal was made within the reglementary period to appeal, nevertheless, the departure from the
general rule that the extraordinary writ of certiorari cannot be a substitute for the lost remedy of appeal
is justified because the execution of the assailed decision would amount to an oppressive exercise of
judicial authority.[13]
Petitioner maintains that the assailed DAO-99-14 and the implementing memorandum were valid
and that the trial court should have taken judicial notice of Republic Act No. 6734, otherwise known as
An Organic Act for the Autonomous Region in Muslim Mindanao, and its implementing Executive Order
429,[14] as the legal bases for the issuance of the assailed DAO-99-14. Moreover, the validity of R.A.
No. 6734 and E.O. 429 were upheld in the case of Chiongbian v. Orbos.[15] Thus, the respondents
cannot, by means of an injunction, force the DENR XII Regional Offices to remain in Cotabato City, as
the exercise of the authority to transfer the same is executive in nature.
It is apropos to reiterate the elementary doctrine of qualified political agency, thus:
Under this doctrine, which recognizes the establishment of a single executive, 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 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.[16]
This doctrine is corollary to the control power of the President as provided for under Article VII,
Section 17 of the 1987 Constitution, which reads:
Sec. 17. The President shall have control of all the executive departments, bureaus, and offices. He
shall ensure that the laws be faithfully executed.
However, as head of the Executive Department, the President cannot be expected to exercise his
control (and supervisory) powers personally all the time. He may delegate some of his powers to the
Cabinet members except when he is required by the Constitution to act in person or the exigencies of
the situation demand that he acts personally.[17]
In Buklod ng Kawaning EIIB v. Zamora,[18] this Court upheld the continuing authority of the
President to carry out the reorganization in any branch or agency of the executive department. Such
authority includes the creation, alteration or abolition of public offices. [19] The Chief Executives authority
to reorganize the National Government finds basis in Book III, Section 20 of E.O. No. 292, otherwise
known as the Administrative Code of 1987, viz:
Section 20. Residual Powers. Unless Congress provides otherwise, the President shall exercise such
other powers and functions vested in the President which are provided for under the laws and which are
not specifically enumerated above or which are not delegated by the President in accordance with law.
Further, in Larin v. Executive Secretary,[20] this Court had occasion to rule:
This provision speaks of such other powers vested in the President under the law. What law then gives
him the power to reorganize? It is Presidential Decree No. 1772 which amended Presidential Decree
No. 1416. These decrees expressly grant the President of the Philippines the continuing authority to
reorganize the national government, which includes the power to group, consolidate bureaus and
agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities
and to standardize salaries and materials. The validity of these two decrees is unquestionable. The
1987 Constitution clearly provides that all laws, decrees, executive orders, proclamations, letters of
instructions and other executive issuances not inconsistent with this Constitution shall remain operative
until amended, repealed or revoked. So far, there is yet no law amending or repealing said decrees.
Applying the doctrine of qualified political agency, the power of the President to reorganize the
National Government may validly be delegated to his cabinet members exercising control over a
particular executive department. Thus, in DOTC Secretary v. Mabalot,[21] we held that the President
through his duly constituted political agent and alter ego, the DOTC Secretary may legally and validly
decree the reorganization of the Department, particularly the establishment of DOTC-CAR as the
LTFRB Regional Office at the Cordillera Administrative Region, with the concomitant transfer and
performance of public functions and responsibilities appurtenant to a regional office of the LTFRB.
Similarly, in the case at bar, the DENR Secretary can validly reorganize the DENR by ordering the
transfer of the DENR XII Regional Offices from Cotabato City to Koronadal, South Cotabato. The
exercise of this authority by the DENR Secretary, as an alter ego, is presumed to be the acts of the
President for the latter had not expressly repudiated the same.
The trial court should have taken judicial notice of R.A. No. 6734, as implemented by E.O. No.
429, as legal basis of the Presidents power to reorganize the executive department, specifically those
administrative regions which did not vote for their inclusion in the ARMM. It is axiomatic that a court has
the mandate to apply relevant statutes and jurisprudence in determining whether the allegations in a
complaint establish a cause of action. While it focuses on the complaint, a court clearly cannot
disregard decisions material to the proper appreciation of the questions before it. [22] In resolving the
motion to dismiss, the trial court should have taken cognizance of the official acts of the legislative,
executive, and judicial departments because they are proper subjects of mandatory judicial notice as
provided by Section 1 of Rule 129 of the Rules of Court, to wit:
A court shall take judicial notice, without the introduction of evidence, of the existence and territorial
extent of states, their political history, forms of government and symbols of nationality, the law of
nations, the admiralty and maritime courts of the world and their seals, the political constitution and
history of the Philippines, the official acts of the legislative, executive and judicial departments of the
Philippines, the laws of nature, the measure of time, and the geographical divisions. (Emphasis
supplied)
Article XIX, Section 13 of R.A. No. 6734 provides:
SECTION 13. The creation of the Autonomous Region in Muslim Mindanao shall take effect when
approved by a majority of the votes cast by the constituent units provided in paragraph (2) of Sec. 1 of
Article II of this Act in a plebiscite which shall be held not earlier than ninety (90) days or later than one
hundred twenty (120) days after the approval of this Act: Provided, That only the provinces and cities
voting favorably in such plebiscite 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 the aforequoted provision, then President Corazon C. Aquino
issued on October 12, 1990 E.O. 429, Providing for the Reorganization of the Administrative Regions in
Mindanao. Section 4 thereof provides:
SECTION 4. REGION XII, to be known as CENTRAL MINDANAO, shall include the following provinces
and cities:
Provinces
Sultan Kudarat
Cotabato
South Cotabato
Cities
Cotabato
General Santos
The Municipality of Koronadal (Marinduque) in South Cotabato shall serve as the regional center.
In Chiongbian v. Orbos, this Court stressed the rule that the power of the President to reorganize
the administrative regions carries with it the power to determine the regional centers. In identifying the
regional centers, the President purposely intended the effective delivery of the field services of
government agencies.[23] The same intention can be gleaned from the preamble of the assailed DAO-
99-14 which the DENR sought to achieve, that is, to improve the efficiency and effectiveness of the
DENR in delivering its services.
It may be true that the transfer of the offices may not be timely considering that: (1) there are no
buildings yet to house the regional offices in Koronadal, (2) the transfer falls on the month of Ramadan,
(3) the children of the affected employees are already enrolled in schools in Cotabato City, (4) the
Regional Development Council was not consulted, and (5) the Sangguniang Panglungsond, through a
resolution, requested the DENR Secretary to reconsider the orders. However, these concern issues
addressed to the wisdom of the transfer rather than to its legality. It is basic in our form of government
that the judiciary cannot inquire into the wisdom or expediency of the acts of the executive or the
legislative department,[24] for each department is supreme and independent of the others, and each is
devoid of authority not only to encroach upon the powers or field of action assigned to any of the other
department, but also to inquire into or pass upon the advisability or wisdom of the acts performed,
measures taken or decisions made by the other departments. [25]
The Supreme Court should not be thought of as having been tasked with the awesome
responsibility of overseeing the entire bureaucracy. Unless there is a clear showing of constitutional
infirmity or grave abuse of discretion amounting to lack or excess of jurisdiction, the Courts exercise of
the judicial power, pervasive and limitless it may seem to be, still must succumb to the paramount
doctrine of separation of powers.[26] After a careful review of the records of the case, we find that this
jurisprudential element of abuse of discretion has not been shown to exist.
WHEREFORE, in view of the foregoing, the petition for review is GRANTED. The resolutions of
the Court of Appeals in CA-G.R. SP No. 58896 dated May 31, 2000 and August 20, 2001, as well as the
decision dated January 14, 2000 of the Regional Trial Court of Cotabato City, Branch 15, in Civil Case
No 389, are REVERSED and SET ASIDE. The permanent injunction, which enjoined the petitioner from
enforcing the Memorandum Order of the DENR XII Regional Executive Director, is LIFTED.
SO ORDERED.
Vitug, (Acting Chairman), Carpio, and Azcuna, JJ., concur.
Davide, Jr., C.J., (Chairman), abroad, on official business.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 124360 November 5, 1997
FRANCISCO S. TATAD, petitioner,
vs.
THE SECRETARY OF THE DEPARTMENT OF ENERGY AND THE SECRETARY OF THE
DEPARTMENT OF FINANCE, respondents.
G.R. No. 127867 November 5, 1997
EDCEL C. LAGMAN, JOKER P. ARROYO, ENRIQUE GARCIA, WIGBERTO TANADA, FLAG HUMAN
RIGHTS FOUNDATION, INC., FREEDOM FROM DEBT COALITION (FDC), SANLAKAS, petitioners,
vs.
HON. RUBEN TORRES in his capacity as the Executive Secretary, HON. FRANCISCO VIRAY, in his
capacity as the Secretary of Energy, CALTEX Philippines, Inc., PETRON Corporation and PILIPINAS
SHELL Corporation, respondents.
PUNO, J.:
The petitions at bar challenge the constitutionality of Republic Act No. 8180 entitled "An Act
Deregulating the Downstream Oil Industry and For Other Purposes".1 R.A. No. 8180 ends twenty six
(26) years of government regulation of the downstream oil industry. Few cases carry a surpassing
importance on the life of every Filipino as these petitions for the upswing and downswing of our
economy materially depend on the oscillation of oil.
First, the facts without the fat. Prior to 1971, there was no government agency regulating the oil industry
other than those dealing with ordinary commodities. Oil companies were free to enter and exit the
market without any government interference. There were four (4) refining companies (Shell, Caltex,
Bataan Refining Company and Filoil Refining) and six (6) petroleum marketing companies (Esso, Filoil,
Caltex, Getty, Mobil and Shell), then operating in the country.2
In 1971, the country was driven to its knees by a crippling oil crisis. The government, realizing that
petroleum and its products are vital to national security and that their continued supply at reasonable
prices is essential to the general welfare, enacted the Oil Industry Commission Act.3 It created the Oil
Industry Commission (OIC) toregulate the business of importing, exporting, re-exporting, shipping,
transporting, processing, refining, storing, distributing, marketing and selling crude oil, gasoline,
kerosene, gas and other refined petroleum products. The OIC was vested with the power to fix the
market prices of petroleum products, to regulate the capacities of refineries, to license new refineries
and to regulate the operations and trade practices of the industry. 4
In addition to the creation of the OIC, the government saw the imperious need for a more active role of
Filipinos in the oil industry. Until the early seventies, the downstream oil industry was controlled by
multinational companies. All the oil refineries and marketing companies were owned
by foreigners whose economic interests did not always coincide with the interest of the Filipino. Crude
oil was transported to the country by foreign-controlled tankers. Crude processing was done locally by
foreign-owned refineries and petroleum products were marketed through foreign-owned retail outlets.
On November 9, 1973, President Ferdinand E. Marcos boldly created the Philippine National Oil
Corporation (PNOC) to break the control by foreigners of our oil industry. 5 PNOC engaged in the
business of refining, marketing, shipping, transporting, and storing petroleum. It acquired ownership of
ESSO Philippines and Filoil to serve as its marketing arm. It bought the controlling shares of Bataan
Refining Corporation, the largest refinery in the country.6 PNOC later put up its own marketing
subsidiary Petrophil. PNOC operated under the business name PETRON Corporation. For the first
time, there was a Filipino presence in the Philippine oil market.
In 1984, President Marcos through Section 8 of Presidential Decree No. 1956, created the Oil Price
Stabilization Fund (OPSF) to cushion the effects of frequent changes in the price of oil caused by
exchange rate adjustments or increase in the world market prices of crude oil and imported petroleum
products. The fund is used (1) to reimburse the oil companies for cost increases in crude oil and
imported petroleum products resulting from exchange rate adjustment and/or increase in world market
prices of crude oil, and (2) to reimburse oil companies for cost underrecovery incurred as a result of the
reduction of domestic prices of petroleum products. Under the law, the OPSF may be sourced from:
1. any increase in the tax collection from ad valorem tax or customs duty imposed on
petroleum products subject to tax under P.D. No. 1956 arising from exchange rate
adjustment,
2. any increase in the tax collection as a result of the lifting of tax exemptions of
government corporations, as may be determined by the Minister of Finance in
consultation with the Board of Energy,
3. any additional amount to be imposed on petroleum products to augment the
resources of the fund through an appropriate order that may be issued by the Board
of Energy requiring payment of persons or companies engaged in the business of
importing, manufacturing and/or marketing petroleum products, or
4. any resulting peso costs differentials in case the actual peso costs paid by oil
companies in the importation of crude oil and petroleum products is less than the
peso costs computed using the reference foreign exchange rate as fixed by the Board
of Energy.7
By 1985, only three (3) oil companies were operating in the country Caltex, Shell and the
government-owned PNOC.
In May, 1987, President Corazon C. Aquino signed Executive Order No. 172 creating the Energy
Regulatory Board to regulate the business of importing, exporting, re-exporting, shipping, transporting,
processing, refining, marketing and distributing energy resources "when warranted and only when
public necessity requires." The Board had the following powers and functions:
1. Fix and regulate the prices of petroleum products;
2. Fix and regulate the rate schedule or prices of piped
gas to be charged by duly franchised gas companies
which distribute gas by means of underground pipe
system;
3. Fix and regulate the rates of pipeline concessionaries
under the provisions of R.A. No. 387, as amended . . . ;
4. Regulate the capacities of new refineries or additional
capacities of existing refineries and license refineries that
may be organized after the issuance of (E.O. No. 172)
under such terms and conditions as are consistent with
the national interest; and
5. Whenever the Board has determined that there is a
shortage of any petroleum product, or when public interest
so requires, it may take such steps as it may consider
 necessary, including the temporary adjustment of the
levels of prices of petroleum products and the payment to
the Oil Price Stabilization Fund . . . by persons or entities
engaged in the petroleum industry of such amounts as
may be determined by the Board, which may enable the
importer to recover its cost of importation.8
On December 9, 1992, Congress enacted R.A. No. 7638 which created the Department of Energy to
prepare, integrate, coordinate, supervise and control all plans, programs, projects, and activities of the
government in relation to energy exploration, development, utilization, distribution and
conservation.9 The thrust of the Philippine energy program under the law was toward privatization of
government agencies related to energy, deregulation of the power and energy industry and reduction of
dependency on oil-fired plants.10 The law also aimed to encourage free and active participation and
investment by the private sector in all energy activities. Section 5(e) of the law states that "at the end of
four (4) years from the effectivity of this Act, the Department shall, upon approval of the President,
institute the programs and timetable of deregulation of appropriate energy projects and activities of the
energy industry."
Pursuant to the policies enunciated in R.A. No. 7638, the government approved the privatization of
Petron Corporation in 1993. On December 16, 1993, PNOC sold 40% of its equity in Petron Corporation
to the Aramco Overseas Company.
In March 1996, Congress took the audacious step of deregulating the downstream oil industry. It
enacted R.A.No. 8180, entitled the "Downstream Oil Industry Deregulation Act of 1996." Under the
deregulated environment, "any person or entity may import or purchase any quantity of crude oil and
petroleum products from a foreign or domestic source, lease or own and operate refineries and other
downstream oil facilities and market such crude oil or use the same for his own requirement," subject
only to monitoring by the Department of
Energy.11
The deregulation process has two phases: the transition phase and the full deregulation phase. During
the transition phase, controls of the non-pricing aspects of the oil industry were to be lifted. The
following were to be accomplished: (1) liberalization of oil importation, exportation, manufacturing,
marketing and distribution, (2) implementation of an automatic pricing mechanism, (3) implementation of
an automatic formula to set margins of dealers and rates of haulers, water transport operators and
pipeline concessionaires, and (4) restructuring of oil taxes. Upon full deregulation, controls on the price
of oil and the foreign exchange cover were to be lifted and the OPSF was to be abolished.
The first phase of deregulation commenced on August 12, 1996.
On February 8, 1997, the President implemented the full deregulation of the Downstream Oil Industry
through E.O. No. 372.
The petitions at bar assail the constitutionality of various provisions of R.A No. 8180 and E.O. No. 372.
In G.R. No. 124360, petitioner Francisco S. Tatad seeks the annulment of section 5(b) of R.A. No.
8180. Section 5(b) provides:
b) Any law to the contrary notwithstanding and starting with the effectivity of this Act, tariff duty
shall be imposed and collected on imported crude oil at the rate of three percent (3%) and
imported refined petroleum products at the rate of seven percent (7%), except fuel oil and
LPG, the rate for which shall be the same as that for imported crude oil: Provided, That
beginning on January 1, 2004 the tariff rate on imported crude oil and refined petroleum
products shall be the same: Provided, further, That this provision may be amended only by an
Act of Congress.
The petition is anchored on three arguments:
First, that the imposition of different tariff rates on imported crude oil and imported refined petroleum
products violates the equal protection clause. Petitioner contends that the 3%-7% tariff differential
unduly favors the three existing oil refineries and discriminates against prospective investors in the
downstream oil industry who do not have their own refineries and will have to source refined petroleum
products from abroad.
Second, that the imposition of different tariff rates does not deregulate the downstream oil industry but
instead controls the oil industry, contrary to the avowed policy of the law. Petitioner avers that the tariff
differential between imported crude oil and imported refined petroleum products bars the entry of other
players in the oil industry because it effectively protects the interest of oil companies with existing
refineries. Thus, it runs counter to the objective of the law "to foster a truly competitive market."
Third, that the inclusion of the tariff provision in section 5(b) of R.A. No. 8180 violates Section 26(1)
Article VI of the Constitution requiring every law to have only one subject which shall be expressed in its
title. Petitioner contends that the imposition of tariff rates in section 5(b) of R.A. No. 8180 is foreign to
the subject of the law which is the deregulation of the downstream oil industry.
In G.R. No. 127867, petitioners Edcel C. Lagman, Joker P. Arroyo, Enrique Garcia, Wigberto Tanada,
Flag Human Rights Foundation, Inc., Freedom from Debt Coalition (FDC) and Sanlakas contest the
constitutionality of section 15 of R.A. No. 8180 and E.O. No. 392. Section 15 provides:
Sec. 15. Implementation of Full Deregulation. Pursuant to Section 5(e) of Republic Act No.
7638, the DOE shall, upon approval of the President, implement the full deregulation of the
downstream oil industry not later than March 1997. As far as practicable, the DOE shall time
the full deregulation when the prices of crude oil and petroleum products in the world market
are declining and when the exchange rate of the peso in relation to the US dollar is stable.
Upon the implementation of the full deregulation as provided herein, the transition phase is
deemed terminated and the following laws are deemed repealed:
xxx xxx xxx
E.O. No. 372 states in full, viz.:
WHEREAS, Republic Act No. 7638, otherwise known as the "Department of Energy Act of
1992," provides that, at the end of four years from its effectivity last December 1992, "the
Department (of Energy) shall, upon approval of the President, institute the programs and time
table of deregulation of appropriate energy projects and activities of the energy sector;"
WHEREAS, Section 15 of Republic Act No. 8180, otherwise known as the "Downstream Oil
Industry Deregulation Act of 1996," provides that "the DOE shall, upon approval of the
President, implement full deregulation of the downstream oil industry not later than March,
1997. As far as practicable, the DOE shall time the full deregulation when the prices of crude
oil and petroleum products in the world market are declining and when the exchange rate of
the peso in relation to the US dollar is stable;"
WHEREAS, pursuant to the recommendation of the Department of Energy, there is an
imperative need to implement the full deregulation of the downstream oil industry because of
the following recent developments: (i) depletion of the buffer fund on or about 7 February 1997
pursuant to the Energy Regulatory Board's Order dated 16 January 1997; (ii) the prices of
crude oil had been stable at $21-$23 per barrel since October 1996 while prices of petroleum
products in the world market had been stable since mid-December of last year. Moreover,
crude oil prices are beginning to soften for the last few days while prices of some petroleum
products had already declined; and (iii) the exchange rate of the peso in relation to the US
dollar has been stable for the past twelve (12) months, averaging at around P26.20 to one US
dollar;
WHEREAS, Executive Order No. 377 dated 31 October 1996 provides for an institutional
framework for the administration of the deregulated industry by defining the functions and
responsibilities of various government agencies;
WHEREAS, pursuant to Republic Act No. 8180, the deregulation of the industry will foster a
truly competitive market which can better achieve the social policy objectives of fair prices and
adequate, continuous supply of environmentally-clean and high quality petroleum products;
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by the
powers vested in me by law, do hereby declare the full deregulation of the downstream oil
industry.
In assailing section 15 of R.A. No. 8180 and E.O. No. 392, petitioners offer the following submissions:
First, section 15 of R.A. No. 8180 constitutes an undue delegation of legislative power to the President
and the Secretary of Energy because it does not provide a determinate or determinable standard to
guide the Executive Branch in determining when to implement the full deregulation of the downstream
oil industry. Petitioners contend that the law does not define when it is practicable for the Secretary of
Energy to recommend to the President the full deregulation of the downstream oil industry or when the
President may consider it practicable to declare full deregulation. Also, the law does not provide any
specific standard to determine when the prices of crude oil in the world market are considered to be
declining nor when the exchange rate of the peso to the US dollar is considered stable.
Second, petitioners aver that E.O. No. 392 implementing the full deregulation of the downstream oil
industry is arbitrary and unreasonable because it was enacted due to the alleged depletion of the OPSF
fund a condition not found in R.A. No. 8180.
Third, section 15 of R.A. No. 8180 and E.O. No. 392 allow the formation of a de facto cartel among the
three existing oil companies Petron, Caltex and Shell in violation of the constitutional prohibition
against monopolies, combinations in restraint of trade and unfair competition.
Respondents, on the other hand, fervently defend the constitutionality of R.A. No. 8180 and E.O. No.
392. In addition, respondents contend that the issues raised by the petitions are not justiciable as they
pertain to the wisdom of the law. Respondents further aver that petitioners have no locus standi as they
did not sustain nor will they sustain direct injury as a result of the implementation of R.A. No. 8180.
The petitions were heard by the Court on September 30, 1997. On October 7, 1997, the Court ordered
the private respondents oil companies "to maintain the status quo and to cease and desist from
increasing the prices of gasoline and other petroleum fuel products for a period of thirty (30) days . . .
subject to further orders as conditions may warrant."
We shall now resolve the petitions on the merit. The petitions raise procedural and substantive issues
bearing on the constitutionality of R.A. No. 8180 and E.O. No. 392. The procedural issues are: (1)
whether or not the petitions raise a justiciable controversy, and (2) whether or not the petitioners have
the standing to assail the validity of the subject law and executive order. The substantive issues are: (1)
whether or not section 5 (b) violates the one title one subject requirement of the Constitution; (2)
whether or not the same section violates the equal protection clause of the Constitution; (3) whether or
not section 15 violates the constitutional prohibition on undue delegation of power; (4) whether or not
E.O. No. 392 is arbitrary and unreasonable; and (5) whether or not R.A. No. 8180 violates the
constitutional prohibition against monopolies, combinations in restraint of trade and unfair competition.
We shall first tackle the procedural issues. Respondents claim that the avalanche of arguments of the
petitioners assail the wisdom of R.A. No. 8180. They aver that deregulation of the downstream oil
industry is a policy decision made by Congress and it cannot be reviewed, much less be reversed by
this Court. In constitutional parlance, respondents contend that the petitions failed to raise a justiciable
controversy.
Respondents' joint stance is unnoteworthy. Judicial power includes not only the duty of the courts to
settle actual controversies involving rights which are legally demandable and enforceable, but also the
duty to determine whether or not there has been grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the government.12 The courts, as guardians
of the Constitution, have the inherent authority to determine whether a statute enacted by the legislature
transcends the limit imposed by the fundamental law. Where a statute violates the Constitution, it is not
only the right but the duty of the judiciary to declare such act as unconstitutional and void. 13 We held in
the recent case of Tanada v. Angara:14
xxx xxx xxx
In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the
Constitution, the petition no doubt raises a justiciable controversy. Where an action of the
legislative branch is seriously alleged to have infringed the Constitution, it becomes not only
the right but in fact the duty of the judiciary to settle the dispute. The question thus posed is
judicial rather than political. The duty to adjudicate remains to assure that the supremacy of the
Constitution is upheld. Once a controversy as to the application or interpretation of a
constitutional provision is raised before this Court, it becomes a legal issue which the Court is
bound by constitutional mandate to decide.
Even a sideglance at the petitions will reveal that petitioners have raised constitutional issues which
deserve the resolution of this Court in view of their seriousness and their value as precedents. Our
statement of facts and definition of issues clearly show that petitioners are assailing R.A. No. 8180
because its provisions infringe the Constitution and not because the law lacks wisdom. The principle of
separation of power mandates that challenges on the constitutionality of a law should be resolved in our
courts of justice while doubts on the wisdom of a law should be debated in the halls of Congress. Every
now and then, a law may be denounced in court both as bereft of wisdom and constitutionally infirmed.
Such denunciation will not deny this Court of its jurisdiction to resolve the constitutionality of the said
law while prudentially refusing to pass on its wisdom.
The effort of respondents to question the locus standi of petitioners must also fall on barren ground. In
language too lucid to be misunderstood, this Court has brightlined its liberal stance on a
petitioner's locus standi where the petitioner is able to craft an issue of transcendental significance to
the people.15 In Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan,16 we stressed:
xxx xxx xxx
Objections to taxpayers' suit for lack of sufficient personality, standing or interest are, however,
in the main procedural matters. Considering the importance to the public of the cases at bar,
and in keeping with the Court's duty, under the 1987 Constitution, to determine whether or not
the other branches of government have kept themselves within the limits of the Constitution
and the laws and that they have not abused the discretion given to them, the Court has
brushed aside technicalities of procedure and has taken cognizance of these petitions.
There is not a dot of disagreement between the petitioners and the respondents on the far reaching
importance of the validity of RA No. 8180 deregulating our downstream oil industry. Thus, there is no
good sense in being hypertechnical on the standing of petitioners for they pose issues which are
significant to our people and which deserve our forthright resolution.
We shall now track down the substantive issues. In G.R. No. 124360 where petitioner is Senator Tatad,
it 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 ruled18 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. 19 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.20 We shall, however, return to the validity
of this provision when we examine its blocking effect on new entrants to the oil market.
We shall now slide to the substantive issues in G.R. No. 127867. Petitioners assail section 15 of R.A.
No. 8180 which fixes the time frame for the full deregulation of the downstream oil industry. We restate
its pertinent portion for emphasis, viz.:
Sec. 15. Implementation of Full Deregulation Pursuant to section 5(e) of Republic Act No.
7638, the DOE shall, upon approval of the President, implement the full deregulation of the
downstream oil industry not later than March 1997. As far as practicable, the DOE shall time
the full deregulation when the prices of crude oil and petroleum products in the world market
are declining and when the exchange rate of the peso in relation to the US dollar is stable . . .
Petitioners urge that the phrases "as far as practicable," "decline of crude oil prices in the world market"
and "stability of the peso exchange rate to the US dollar" are ambivalent, unclear and inconcrete in
meaning. They submit that they do not provide the "determinate or determinable standards" which can
guide the President in his decision to fully deregulate the downstream oil industry. In addition, they
contend that E.O. No. 392 which advanced the date of full deregulation is void for it illegally considered
the depletion of the OPSF fund as a factor.
The power of Congress to delegate the execution of laws has long been settled by this Court. As early
as 1916 inCompania General de Tabacos de Filipinas vs. The Board of Public Utility
Commissioners,21 this Court thru, Mr. Justice Moreland, held that "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." Over the years, as the legal
engineering of men's relationship became more difficult, Congress has to rely more on the practice of
delegating the execution of laws to the executive and other administrative agencies. Two tests have
been developed to determine whether the delegation of the power to execute laws does not involve the
abdication of the power to make law itself. We delineated the metes and bounds of these tests
in Eastern Shipping Lines, Inc. VS. POEA,22 thus:
There are two accepted tests to determine whether or not there is a valid delegation of
legislative power,viz: the completeness test and the sufficient standard test. Under the first
test, the law must be complete in all its terms and conditions when it leaves the legislative such
that when it reaches the delegate the only thing he will have to do is to enforce it. Under the
sufficient standard test, there must be adequate guidelines or limitations in the law to map out
the boundaries of the delegate's authority and prevent the delegation from running riot. 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.
The validity of delegating legislative power is now a quiet area in our constitutional landscape. As
sagely observed, delegation of legislative power has become an inevitability in light of the increasing
complexity of the task of government. Thus, courts bend as far back as possible to sustain the
constitutionality of laws which are assailed as unduly delegating legislative powers. Citing Hirabayashi
v. United States23 as authority, Mr. Justice Isagani A. Cruz states "that even if the law does not
expressly pinpoint the standard, the courts will bend over backward to locate the same elsewhere in
order to spare the statute, if it can, from constitutional infirmity." 24
Given the groove of the Court's rulings, the attempt of petitioners to strike down section 15 on the
ground of undue delegation of legislative power cannot prosper. Section 15 can hurdle both the
completeness test and the sufficient standard test. It will be noted that Congress expressly provided in
R.A. No. 8180 that full deregulation will start at the end of March 1997, regardless of the occurrence of
any event. Full deregulation at the end of March 1997 is mandatory and the Executive has no discretion
to postpone it for any purported reason. Thus, the law is complete on the question of the final date of full
deregulation. The discretion given to the President is to advance the date of full deregulation before the
end of March 1997. Section 15 lays down the standard to guide the judgment of the President he is
to time it as far as practicable when the prices of crude oil and petroleum products in the world market
are declining and when the exchange rate of the peso in relation to the US dollar isstable.
Petitioners contend that the words "as far as practicable," "declining" and "stable" should have been
defined in R.A. No. 8180 as they do not set determinate or determinable standards. The stubborn
submission deserves scant consideration. The dictionary meanings of these words are well settled and
cannot confuse men of reasonable intelligence. Webster defines "practicable" as meaning possible to
practice or perform, "decline" as meaning to take a downward direction, and "stable" as meaning firmly
established.25 The fear of petitioners that these words will result in the exercise of executive discretion
that will run riot is thus groundless. To be sure, the Court has sustained the validity of similar, if not
more general standards in other cases.26
It ought to follow that the argument that E.O. No. 392 is null and void as it was based on indeterminate
standards set by R.A. 8180 must likewise fail. If that were all to the attack against the validity of E.O.
No. 392, the issue need not further detain our discourse. But petitioners further posit the thesis that the
Executive misapplied R.A. No. 8180 when it considered the depletion of the OPSF fund as a factor in
fully deregulating the downstream oil industry in February 1997. A perusal of section 15 of R.A. No.
8180 will readily reveal that it only enumerated two factors to be considered by the Department of
Energy and the Office of the President, viz.: (1) the time when the prices of crude oil and petroleum
products in the world market are declining, and (2) the time when the exchange rate of the peso in
relation to the US dollar is stable. Section 15 did not mention the depletion of the OPSF fund as a factor
to be given weight by the Executive before ordering full deregulation. On the contrary, the debates in
Congress will show that some of our legislators wanted to impose as a pre-condition to deregulation a
showing that the OPSF fund must not be in deficit.27 We therefore hold that the Executive department
failed to follow faithfully the standards set by R.A. No. 8180 when it considered the extraneous factor of
depletion of the OPSF fund. The misappreciation of this extra factor cannot be justified on the ground
that the Executive department considered anyway the stability of the prices of crude oil in the world
market and the stability of the exchange rate of the peso to the dollar. By considering another factor to
hasten full deregulation, the Executive department rewrote the standards set forth in R.A. 8180. The
Executive is bereft of any right to alter either by subtraction or addition the standards set in R.A. No.
8180 for it has no power to make laws. To cede to the Executive the power to make law is to invite
tyranny, indeed, to transgress the principle of separation of powers. The exercise of delegated power is
given a strict scrutiny by courts for the delegate is a mere agent whose action cannot infringe the terms
of agency. In the cases at bar, the Executive co-mingled the factor of depletion of the OPSF fund with
the factors of decline of the price of crude oil in the world market and the stability of the peso to the US
dollar. On the basis of the text of E.O. No. 392, it is impossible to determine the weight given by the
Executive department to the depletion of the OPSF fund. It could well be the principal consideration for
the early deregulation. It could have been accorded an equal significance. Or its importance could be
nil. In light of this uncertainty, we rule that the early deregulation under E.O. No. 392 constitutes a
misapplication of R.A. No. 8180.
We now come to grips with the contention that some provisions of R.A. No. 8180 violate section 19 of
Article XII of the 1987 Constitution. These provisions are:
(1) Section 5 (b) which states "Any law to the contrary notwithstanding and starting with the
effectivity of this Act, tariff duty shall be imposed and collected on imported crude oil at the rate
of three percent (3%) and imported refined petroleum products at the rate of seven percent
(7%) except fuel oil and LPG, the rate for which shall be the same as that for imported crude
oil. Provided, that beginning on January 1, 2004 the tariff rate on imported crude oil and refined
petroleum products shall be the same. Provided, further, that this provision may be amended
only by an Act of Congress."
(2) Section 6 which states "To ensure the security and continuity of petroleum crude and
products supply, the DOE shall require the refiners and importers to maintain a minimum
inventory equivalent to ten percent (10%) of their respective annual sales volume or forty (40)
days of supply, whichever is lower," and
(3) Section 9 (b) which states "To ensure fair competition and prevent cartels and
monopolies in the downstream oil industry, the following acts shall be prohibited:
xxx xxx xxx
(b) Predatory pricing which means selling or offering to sell any product at a
price unreasonably below the industry average cost so as to attract
customers to the detriment of competitors.
On the other hand, section 19 of Article XII of the Constitution allegedly violated by the aforestated
provisions of R.A. No. 8180 mandates: "The State shall regulate or prohibit monopolies when the public
interest so requires. No combinations in restraint of trade or unfair competition shall be allowed."
A monopoly is a privilege or peculiar advantage vested in one or more persons or companies,
consisting in the exclusive right or power to carry on a particular business or trade, manufacture a
particular article, or control the sale or the whole supply of a particular commodity. It is a form of market
structure in which one or only a few firms dominate the total sales of a product or service. 28 On the other
hand, a combination in restraint of trade is an agreement or understanding between two or more
persons, in the form of a contract, trust, pool, holding company, or other form of association, for the
purpose of unduly restricting competition, monopolizing trade and commerce in a certain commodity,
controlling its, production, distribution and price, or otherwise interfering with freedom of trade without
statutory authority.29 Combination in restraint of trade refers to the means while monopoly refers to the
end.30
Article 186 of the Revised Penal Code and Article 28 of the New Civil Code breathe life to this
constitutional policy. Article 186 of the Revised Penal Code penalizes monopolization and creation of
combinations in restraint of
trade, 31 while Article 28 of the New Civil Code makes any person who shall engage in unfair
competition liable for damages.32
Respondents aver that sections 5(b), 6 and 9(b) implement the policies and objectives of R.A. No. 8180.
They explain that the 4% tariff differential is designed to encourage new entrants to invest in refineries.
They stress that the inventory requirement is meant to guaranty continuous domestic supply of
petroleum and to discourage fly-by-night operators. They also submit that the prohibition against
predatory pricing is intended to protect prospective entrants. Respondents manifested to the Court that
new players have entered the Philippines after deregulation and have now captured 3% 5% of the oil
market.
The validity of the assailed provisions of R.A. No. 8180 has to be decided in light of the letter and spirit
of our Constitution, especially section 19, Article XII. Beyond doubt, the Constitution committed us to the
free enterprise system but it is a system impressed with its own distinctness. Thus, while the
Constitution embraced free enterprise as an economic creed, it did not prohibit per se the operation of
monopolies which can, however, be regulated in the public interest. 33 Thus too, our free enterprise
system is not based on a market of pure and unadulterated competition where the State pursues a strict
hands-off policy and follows the let-the-devil devour the hindmost rule. Combinations in restraint of trade
and unfair competitions are absolutely proscribed and the proscription is directed both against the State
as well as the private sector.34 This distinct free enterprise system is dictated by the need to achieve the
goals of our national economy as defined by section 1, Article XII of the Constitution which are: more
equitable distribution of opportunities, income and wealth; a sustained increase in the amount of goods
and services produced by the nation for the benefit of the people; and an expanding productivity as the
key to raising the quality of life for all, especially the underprivileged. It also calls for the State to protect
Filipino enterprises against unfair competition and trade practices.
Section 19, Article XII of our Constitution is anti-trust in history and in spirit. It espouses competition.
The desirability of competition is the reason for the prohibition against restraint of trade, the reason for
the interdiction of unfair competition, and the reason for regulation of unmitigated monopolies.
Competition is thus the underlying principle of section 19, Article XII of our Constitution which cannot be
violated by R.A. No. 8180. We subscribe to the observation of Prof. Gellhorn that the objective of anti-
trust law is "to assure a competitive economy, based upon the belief that through competition producers
will strive to satisfy consumer wants at the lowest price with the sacrifice of the fewest resources.
Competition among producers allows consumers to bid for goods and services, and thus matches their
desires with society's opportunity costs."35 He adds with appropriateness that there is a reliance upon
"the operation of the 'market' system (free enterprise) to decide what shall be produced, how resources
shall be allocated in the production process, and to whom the various products will be distributed. The
market system relies on the consumer to decide what and how much shall be produced, and on
competition, among producers to determine who will manufacture it."
Again, we underline in scarlet that the fundamental principle espoused by section 19, Article XII of the
Constitution is competition for it alone can release the creative forces of the market. But the competition
that can unleash these creative forces is competition that is fighting yet is fair. Ideally, this kind of
competition requires the presence of not one, not just a few but several players. A market controlled by
one player (monopoly) or dominated by a handful of players (oligopoly) is hardly the market where
honest-to-goodness competition will prevail. Monopolistic or oligopolistic markets deserve our careful
scrutiny and laws which barricade the entry points of new players in the market should be viewed with
suspicion.
Prescinding from these baseline propositions, we shall proceed to examine whether the provisions of
R.A. No. 8180 on tariff differential, inventory reserves, and predatory prices imposed substantial barriers
to the entry and exit of new players in our downstream oil industry. If they do, they have to be struck
down for they will necessarily inhibit the formation of a truly competitive market. Contrariwise, if they are
insignificant impediments, they need not be stricken down.
In the cases at bar, it cannot be denied that our downstream oil industry is operated and controlled by
an oligopoly, a foreign oligopoly at that. Petron, Shell and Caltex stand as the only major league players
in the oil market. All other players belong to the lilliputian league. As the dominant players, Petron, Shell
and Caltex boast of existing refineries of various capacities. The tariff differential of 4% therefore works
to their immense benefit. Yet, this is only one edge of the tariff differential. The other edge cuts and cuts
deep in the heart of their competitors. It erects a high barrier to the entry of new players. New players
that intend to equalize the market power of Petron, Shell and Caltex by building refineries of their own
will have to spend billions of pesos. Those who will not build refineries but compete with them will suffer
the huge disadvantage of increasing their product cost by 4%. They will be competing on an uneven
field. The argument that the 4% tariff differential is desirable because it will induce prospective players
to invest in refineries puts the cart before the horse. The first need is to attract new players and they
cannot be attracted by burdening them with heavy disincentives. Without new players belonging to the
league of Petron, Shell and Caltex, competition in our downstream oil industry is an idle dream.
The provision on inventory widens the balance of advantage of Petron, Shell and Caltex against
prospective new players. Petron, Shell and Caltex can easily comply with the inventory requirement of
R.A. No. 8180 in view of their existing storage facilities. Prospective competitors again will find
compliance with this requirement difficult as it will entail a prohibitive cost. The construction cost of
storage facilities and the cost of inventory can thus scare prospective players. Their net effect is to
further occlude the entry points of new players, dampen competition and enhance the control of the
market by the three (3) existing oil companies.
Finally, we come to the provision on predatory pricing which is defined as ". . . selling or offering to sell
any product at a price unreasonably below the industry average cost so as to attract customers to the
detriment of competitors." Respondents contend that this provision works against Petron, Shell and
Caltex and protects new entrants. The ban on predatory pricing cannot be analyzed in isolation. Its
validity is interlocked with the barriers imposed by R.A. No. 8180 on the entry of new players. The
inquiry should be to determine whether predatory pricing on the part of the dominant oil companies is
encouraged by the provisions in the law blocking the entry of new players. Text-writer
Hovenkamp,36 gives the authoritative answer and we quote:
xxx xxx xxx
The rationale for predatory pricing is the sustaining of losses today that will give a firm
monopoly profits in the future. The monopoly profits will never materialize, however, if the
market is flooded with new entrants as soon as the successful predator attempts to raise its
price. Predatory pricing will be profitable only if the market contains significant barriers to new
entry.
As aforediscsussed, the 4% tariff differential and the inventory requirement are significant barriers which
discourage new players to enter the market. Considering these significant barriers established by R.A.
No. 8180 and the lack of players with the comparable clout of PETRON, SHELL and CALTEX, the
temptation for a dominant player to engage in predatory pricing and succeed is a chilling reality.
Petitioners' charge that this provision on predatory pricing is anti-competitive is not without reason.
Respondents belittle these barriers with the allegation that new players have entered the market since
deregulation. A scrutiny of the list of the alleged new players will, however, reveal that not one belongs
to the class and category of PETRON, SHELL and CALTEX. Indeed, there is no showing that any of
these new players intends to install any refinery and effectively compete with these dominant oil
companies. In any event, it cannot be gainsaid that the new players could have been more in number
and more impressive in might if the illegal entry barriers in R.A. No. 8180 were not erected.
We come to the final point. We now resolve the total effect of the untimely deregulation, the imposition
of 4% tariff differential on imported crude oil and refined petroleum products, the requirement of
inventory and the prohibition on predatory pricing on the constitutionality of R.A. No. 8180. The question
is whether these offending provisions can be individually struck down without invalidating the entire R.A.
No. 8180. The ruling case law is well stated by author Agpalo,37 viz.:
xxx xxx xxx
The general rule is that where part of a statute is void as repugnant to the Constitution, while
another part is valid, the valid portion, if separable from the invalid, may stand and be
enforced. The presence of a separability clause in a statute creates the presumption that the
legislature intended separability, rather than complete nullity of the statute. To justify this
result, the valid portion must be so far independent of the invalid portion that it is fair to
presume that the legislature would have enacted it by itself if it had supposed that it could not
constitutionally enact the other. Enough must remain to make a complete, intelligible and valid
statute, which carries out the legislative intent. . . .
The exception to the general rule is that when the parts of a statute are so mutually dependent
and connected, as conditions, considerations, inducements, or compensations for each other,
as to warrant a belief that the legislature intended them as a whole, the nullity of one part will
vitiate the rest. In making the parts of the statute dependent, conditional, or connected with
one another, the legislature intended the statute to be carried out as a whole and would not
have enacted it if one part is void, in which case if some parts are unconstitutional, all the other
provisions thus dependent, conditional, or connected must fall with them.
R.A. No. 8180 contains a separability clause. Section 23 provides that "if for any reason, any section or
provision of this Act is declared unconstitutional or invalid, such parts not affected thereby shall remain
in full force and effect." This separability clause notwithstanding, we hold that the offending provisions of
R.A. No. 8180 so permeate its essence that the entire law has to be struck down. The provisions on
tariff differential, inventory and predatory pricing are among the principal props of R.A. No. 8180.
Congress could not have deregulated the downstream oil industry without these provisions.
Unfortunately, contrary to their intent, these provisions on tariff differential, inventory and predatory
pricing inhibit fair competition, encourage monopolistic power and interfere with the free interaction of
market forces. R.A. No. 8180 needs provisions to vouchsafe free and fair competition. The need for
these vouchsafing provisions cannot be overstated. Before deregulation, PETRON, SHELL and
CALTEX had no real competitors but did not have a free run of the market because government
controls both the pricing and non-pricing aspects of the oil industry. After deregulation, PETRON,
SHELL and CALTEX remain unthreatened by real competition yet are no longer subject to control by
government with respect to their pricing and non-pricing decisions. The aftermath of R.A. No. 8180 is a
deregulated market where competition can be corrupted and where market forces can be manipulated
by oligopolies.
The fall out effects of the defects of R.A. No. 8180 on our people have not escaped Congress. A lot of
our leading legislators have come out openly with bills seeking the repeal of these odious and offensive
provisions in R.A. No. 8180. In the Senate, Senator Freddie Webb has filed S.B. No. 2133 which is the
result of the hearings conducted by the Senate Committee on Energy. The hearings revealed that
(1) there was a need to level the playing field for the new entrants in the downstream oil industry, and
(2) there was no law punishing a person for selling petroleum products at unreasonable prices. Senator
Alberto G. Romulo also filed S.B. No. 2209 abolishing the tariff differential beginning January 1, 1998.
He declared that the amendment ". . . would mean that instead of just three (3) big oil companies there
will be other major oil companies to provide more competitive prices for the market and the consuming
public." Senator Heherson T . Alvarez, one of the principal proponents of R.A. No. 8180, also filed S.B.
No. 2290 increasing the penalty for violation of its section 9. It is his opinion as expressed in the
explanatory note of the bill that the present oil companies are engaged in cartelization despite
R.A. No. 8180,viz,:
xxx xxx xxx
Since the downstream oil industry was fully deregulated in February 1997, there have been
eight (8) fuel price adjustments made by the three oil majors, namely: Caltex Philippines, Inc.;
Petron Corporation; and Pilipinas Shell Petroleum Corporation. Very noticeable in the price
adjustments made, however, is the uniformity in the pump prices of practically all petroleum
products of the three oil companies. This, despite the fact, that their selling rates should be
determined by a combination of any of the following factors: the prevailing peso-dollar
exchange rate at the time payment is made for crude purchases, sources of crude, and
inventory levels of both crude and refined petroleum products. The abovestated factors should
have resulted in different, rather than identical prices.
The fact that the three (3) oil companies' petroleum products are uniformly priced suggests
collusion, amounting to cartelization, among Caltex Philippines, Inc., Petron Corporation and
Pilipinas Shell Petroleum Corporation to fix the prices of petroleum products in violation of
paragraph (a), Section 9 of R.A. No. 8180.
To deter this pernicious practice and to assure that present and prospective players in the
downstream oil industry conduct their business with conscience and propriety, cartel-like
activities ought to be severely penalized.
Senator Francisco S. Tatad also filed S.B. No. 2307 providing for a uniform tariff rate on imported crude
oil and refined petroleum products. In the explanatory note of the bill, he declared in no uncertain terms
that ". . . the present set-up has raised serious public concern over the way the three oil companies
have uniformly adjusted the prices of oil in the country, an indication of a possible existence of a cartel
or a cartel-like situation within the downstream oil industry. This situation is mostly attributed to the
foregoing provision on tariff differential, which has effectively discouraged the entry of new players in
the downstream oil industry."
In the House of Representatives, the moves to rehabilitate R.A. No. 8180 are equally
feverish. Representative Leopoldo E. San Buenaventura has filed H.B. No. 9826 removing the tariff
differential for imported crude oil and imported refined petroleum products. In the explanatory note of
the bill, Rep. Buenaventura explained:
xxx xxx xxx
As we now experience, this difference in tariff rates between imported crude oil and imported
refined petroleum products, unwittingly provided a built-in-advantage for the three existing oil
refineries in the country and eliminating competition which is a must in a free enterprise
economy. Moreover, it created a disincentive for other players to engage even initially in the
importation and distribution of refined petroleum products and ultimately in the putting up of
refineries. This tariff differential virtually created a monopoly of the downstream oil industry by
the existing three oil companies as shown by their uniform and capricious pricing of their
products since this law took effect, to the great disadvantage of the consuming public.
Thus, instead of achieving the desired effects of deregulation, that of free enterprise and a
level playing field in the downstream oil industry, R.A. 8180 has created an environment
conducive to cartelization, unfavorable, increased, unrealistic prices of petroleum products in
the country by the three existing refineries.
Representative Marcial C. Punzalan, Jr., filed H.B. No. 9981 to prevent collusion among the present oil
companies by strengthening the oversight function of the government, particularly its ability to subject to
a review any adjustment in the prices of gasoline and other petroleum products. In the explanatory note
of the bill, Rep. Punzalan, Jr., said:
xxx xxx xxx
To avoid this, the proposed bill seeks to strengthen the oversight function of government,
particularly its ability to review the prices set for gasoline and other petroleum products. It
grants the Energy Regulatory Board (ERB) the authority to review prices of oil and other
petroleum products, as may be petitioned by a person, group or any entity, and to
subsequently compel any entity in the industry to submit any and all documents relevant to the
imposition of new prices. In cases where the Board determines that there exist collusion,
economic conspiracy, unfair trade practice, profiteering and/or overpricing, it may take any
step necessary to protect the public, including the readjustment of the prices of petroleum
products. Further, the Board may also impose the fine and penalty of imprisonment, as
prescribed in Section 9 of R.A. 8180, on any person or entity from the oil industry who is found
guilty of such prohibited acts.
 By doing all of the above, the measure will effectively provide Filipino consumers with a venue
where their grievances can be heard and immediately acted upon by government.
Thus, this bill stands to benefit the Filipino consumer by making the price-setting process more
transparent and making it easier to prosecute those who perpetrate such prohibited acts as
collusion, overpricing, economic conspiracy and unfair trade.
Representative Sergio A.F . Apostol filed H.B. No. 10039 to remedy an omission in R.A. No. 8180
where there is no agency in government that determines what is "reasonable" increase in the prices of
oil products.Representative Dente O. Tinga, one of the principal sponsors of R.A. No. 8180, filed H.B.
No. 10057 to strengthen its anti-trust provisions. He elucidated in its explanatory note:
xxx xxx xxx
The definition of predatory pricing, however, needs to be tightened up particularly with respect
to the definitive benchmark price and the specific anti-competitive intent. The definition in the
bill at hand which was taken from the Areeda-Turner test in the United States on predatory
pricing resolves the questions. The definition reads, "Predatory pricing means selling or
offering to sell any oil product at a price below the average variable cost for the purpose of
destroying competition, eliminating a competitor or discouraging a competitor from entering the
market."
The appropriate actions which may be resorted to under the Rules of Court in conjunction with
the oil deregulation law are adequate. But to stress their availability and dynamism, it is a good
move to incorporate all the remedies in the law itself. Thus, the present bill formalizes the
concept of government intervention and private suits to address the problem of antitrust
violations. Specifically, the government may file an action to prevent or restrain any act of
cartelization or predatory pricing, and if it has suffered any loss or damage by reason of the
antitrust violation it may recover damages. Likewise, a private person or entity may sue to
prevent or restrain any such violation which will result in damage to his business or property,
and if he has already suffered damage he shall recover treble damages. A class suit may also
be allowed.
To make the DOE Secretary more effective in the enforcement of the law, he shall be given
additional powers to gather information and to require reports.
Representative Erasmo B. Damasing filed H.B. No. 7885 and has a more unforgiving view of R.A. No.
8180. He wants it completely repealed. He explained:
xxx xxx xxx
Contrary to the projections at the time the bill on the Downstream Oil Industry Deregulation
was discussed and debated upon in the plenary session prior to its approval into law, there
aren't any new players or investors in the oil industry. Thus, resulting in practically a cartel or
monopoly in the oil industry by the three (3) big oil companies, Caltex, Shell and Petron. So
much so, that with the deregulation now being partially implemented, the said oil companies
have succeeded in increasing the prices of most of their petroleum products with little or no
interference at all from the government. In the month of August, there was an increase of Fifty
centavos (50) per liter by subsidizing the same with the OPSF, this is only temporary as in
March 1997, or a few months from now, there will be full deregulation (Phase II) whereby the
increase in the prices of petroleum products will be fully absorbed by the consumers since
OPSF will already be abolished by then. Certainly, this would make the lives of our people,
especially the unemployed ones, doubly difficult and unbearable.
The much ballyhooed coming in of new players in the oil industry is quite remote considering
that these prospective investors cannot fight the existing and well established oil companies in
the country today, namely, Caltex, Shell and Petron. Even if these new players will come in,
they will still have no chance to compete with the said three (3) existing big oil companies
considering that there is an imposition of oil tariff differential of 4% between importation of
crude oil by the said oil refineries paying only 3% tariff rate for the said importation and 7%
tariff rate to be paid by businessmen who have no oil refineries in the Philippines but will import
finished petroleum/oil products which is being taxed with 7% tariff rates.
So, if only to help the many who are poor from further suffering as a result of unmitigated
increase in oil products due to deregulation, it is a must that the Downstream Oil Industry
Deregulation Act of 1996, or R.A. 8180 be repealed completely.
Various resolutions have also been filed in the Senate calling for an immediate and comprehensive
review of R.A. No. 8180 to prevent the downpour of its ill effects on the people. Thus, S. Res. No. 574
was filed by Senator Gloria M. Macapagal entitled Resolution "Directing the Committee on Energy to
Inquire Into The Proper Implementation of the Deregulation of the Downstream Oil Industry and Oil Tax
Restructuring As Mandated Under R.A. Nos. 8180 and 8184, In Order to Make The Necessary
Corrections In the Apparent Misinterpretation Of The Intent And Provision Of The Laws And Curb The
Rising Tide Of Disenchantment Among The Filipino Consumers And Bring About The Real Intentions
And Benefits Of The Said Law." Senator Blas P. Ople filed S. Res. No. 664 entitled resolution "Directing
the Committee on Energy To Conduct An Inquiry In Aid Of Legislation To Review The Government's Oil
Deregulation Policy In Light Of The Successive Increases In Transportation, Electricity And Power
Rates, As well As Of Food And Other Prime Commodities And Recommend Appropriate Amendments
To Protect The Consuming Public." Senator Ople observed:
xxx xxx xxx
WHEREAS, since the passage of R.A. No. 8180, the Energy Regulatory Board (ERB) has
imposed successive increases in oil prices which has triggered increases in electricity and
power rates, transportation fares, as well as in prices of food and other prime commodities to
the detriment of our people, particularly the poor;
WHEREAS, the new players that were expected to compete with the oil cartel-Shell, Caltex
and Petron-have not come in;
WHEREAS, it is imperative that a review of the oil deregulation policy be made to consider
appropriate amendments to the existing law such as an extension of the transition phase
before full deregulation in order to give the competitive market enough time to develop;
WHEREAS, the review can include the advisability of providing some incentives in order to
attract the entry of new oil companies to effect a dynamic competitive market;
WHEREAS, it may also be necessary to defer the setting up of the institutional framework for
full deregulation of the oil industry as mandated under Executive Order No. 377 issued by
President Ramos last October 31, 1996 . . .
Senator Alberto G. Romulo filed S. Res. No. 769 entitled resolution "Directing the Committees on
Energy and Public Services In Aid Of Legislation To Assess The Immediate Medium And Long Term
Impact of Oil Deregulation On Oil Prices And The Economy." Among the reasons for the resolution is
the finding that "the requirement of a 40-day stock inventory effectively limits the entry of other oil firms
in the market with the consequence that instead of going down oil prices will rise."
Parallel resolutions have been filed in the House of Representatives. Representative Dante
O. Tinga filed H. Res. No. 1311 "Directing The Committee on Energy To Conduct An Inquiry, In Aid of
Legislation, Into The Pricing Policies And Decisions Of The Oil Companies Since The Implementation of
Full Deregulation Under the Oil Deregulation Act (R.A. No. 8180) For the Purpose of Determining In the
Context Of The Oversight Functions Of Congress Whether The Conduct Of The Oil Companies,
Whether Singly Or Collectively, Constitutes Cartelization Which Is A Prohibited Act Under R.A. No.
8180, And What Measures Should Be Taken To Help Ensure The Successful Implementation Of The
Law In Accordance With Its Letter And Spirit, Including Recommending Criminal Prosecution Of the
Officers Concerned Of the Oil Companies If Warranted By The Evidence, And For Other
Purposes." Representatives Marcial C. Punzalan, Jr. Dante O. Tinga and Antonio E. Bengzon III filed
H.R. No. 894 directing the House Committee on Energy to inquire into the proper implementation of the
deregulation of the downstream oil industry. House Resolution No. 1013 was also filed
by Representatives Edcel C. Lagman, Enrique T . Garcia, Jr. and Joker P. Arroyo urging the President
to immediately suspend the implementation of E.O. No. 392.
In recent memory there is no law enacted by the legislature afflicted with so much constitutional
deformities as R.A. No. 8180. Yet, R.A. No. 8180 deals with oil, a commodity whose supply and price
affect the ebb and flow of the lifeblood of the nation. Its shortage of supply or a slight, upward spiral in
its price shakes our economic foundation. Studies show that the areas most impacted by the movement
of oil are food manufacture, land transport, trade, electricity and water. 38 At a time when our economy is
in a dangerous downspin, the perpetuation of R.A. No. 8180 threatens to multiply the number of our
people with bent backs and begging bowls. R.A. No.8180 with its anti-competition provisions cannot be
allowed by this Court to stand even while Congress is working to remedy its defects.
The Court, however, takes note of the plea of PETRON, SHELL and CALTEX to lift our restraining order
to enable them to adjust upward the price of petroleum and petroleum products in view of the
plummeting value of the peso. Their plea, however, will now have to be addressed to the Energy
Regulatory Board as the effect of the declaration of unconstitutionality of R.A. No. 8180 is to revive the
former laws it repealed.39 The length of our return to the regime of regulation depends on Congress
which can fasttrack the writing of a new law on oil deregulation in accord with the Constitution.
With this Decision, some circles will chide the Court for interfering with an economic decision of
Congress. Such criticism is charmless for the Court is annulling R.A. No. 8180 not because it disagrees
with deregulation as an economic policy but because as cobbled by Congress in its present form, the
law violates the Constitution. The right call therefor should be for Congress to write a new oil
deregulation law that conforms with the Constitution and not for this Court to shirk its duty of striking
down a law that offends the Constitution. Striking down R.A. No. 8180 may cost losses in quantifiable
terms to the oil oligopolists. But the loss in tolerating the tampering of our Constitution is not quantifiable
in pesos and centavos. More worthy of protection than the supra-normal profits of private corporations
is the sanctity of the fundamental principles of the Constitution. Indeed when confronted by a law
violating the Constitution, the Court has no option but to strike it down dead. Lest it is missed, the
Constitution is a covenant that grants and guarantees both the political and economic rights of the
people. The Constitution mandates this Court to be the guardian not only of the people's political rights
but their economic rights as well. The protection of the economic rights of the poor and the powerless is
of greater importance to them for they are concerned more with the exoterics of living and less with the
esoterics of liberty. Hence, for as long as the Constitution reigns supreme so long will this Court be
vigilant in upholding the economic rights of our people especially from the onslaught of the powerful.
Our defense of the people's economic rights may appear heartless because it cannot be half-hearted.
IN VIEW WHEREOF, the petitions are granted. R.A. No. 8180 is declared unconstitutional and E.O. No.
372 void.
SO ORDERED.
Regalado, Davide, Jr., Romero, Bellosillo and Vitug, JJ., concur.
Mendoza, J., concurs in the result.
Narvasa, C.J., is on leave.
Republic of the Philippines
SUPREME COURT
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., Respondent.
x-------------------------x
G.R. No. 168207
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, Respondent.
x-------------------------x
G.R. No. 168461
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 "LEONAS 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, Respondent.
x-------------------------x
G.R. No. 168463
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, Respondent.
x-------------------------x
G.R. No. 168730
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, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
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. 35552 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. 37053 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. 19504 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
oclock 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 theyll 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, thats not true. Its not true
that the e-vat law necessarily increased prices by 10% uniformly isnt it?
ATTY. BANIQUED : No, Your Honor.
J. PANGANIBAN : It is not?
ATTY. BANIQUED : Its not, because, Your Honor, there is an Executive Order that granted the
Petroleum companies some subsidy . . . interrupted
J. PANGANIBAN : Thats 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 its not correct to say that all prices
must go up by 10%.
ATTY. BANIQUED : Youre 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 thats one reason among many others this Court had to issue
TRO because of the confusion in the implementation. Thats why we added as an issue in this case,
even if its 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, isnt it?
ATTY. BANIQUED : Yes, Your Honor.
J. PANGANIBAN : Alright. So thats 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 uniformproviso 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 %).
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 (1, 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
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 forcertiorari 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 1,000,000.00, 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 governments 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.
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."19Thus, 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 latters 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.
...
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.
...
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 Congresss 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.
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 Courts 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 Sec. 107 of NIRC); and 12% VAT
ruling in Arroyo vs. De Venecia, viz.: on sale of services and use or
But the cases, both here and abroad, in varying forms of expression, all deny to the courts the power to lease of properties and a reduced
inquire into allegations that, in enacting a law, a House of Congress failed to comply with its own rules, rate for certain services including
in the absence of showing that there was a violation of a constitutional provision or the rights of private power generation (amending Sec.
individuals. In Osmea v. Pendatun, it was held: "At any rate, courts have declared that the rules 108 of NIRC)
adopted by deliberative bodies are subject to revocation, modification or waiver at the pleasure of the With regard to the "no pass-on" provision
body adopting them.And it has been said that "Parliamentary rules are merely procedural, and with No similar provision Provides that the VAT imposed Provides that the VAT
their observance, the courts have no concern. They may be waived or disregarded by the legislative on power generation and on the imposed on sales of electricity
body." Consequently, "mere failure to conform to parliamentary usage will not invalidate the action sale of petroleum products shall by generation companies and
(taken by a deliberative body) when the requisite number of members have agreed to a particular be absorbed by generation services of transmission
measure."21 (Emphasis supplied) companies or sellers, companies and distribution
The foregoing declaration is exactly in point with the present cases, where petitioners allege respectively, and shall not be companies, as well as those of
irregularities committed by the conference committee in introducing changes or deleting provisions in passed on to consumers franchise grantees of electric
the House and Senate bills. Akin to the Farias case,22 the present petitions also raise an issue utilities shall not apply to
regarding the actions taken by the conference committee on matters regarding Congress compliance residential
with its own internal rules. As stated earlier, one of the most basic and inherent power of the legislature end-users. VAT shall be
is the power to formulate rules for its proceedings and the discipline of its members. Congress is the absorbed by generation,
best judge of how it should conduct its own business expeditiously and in the most orderly manner. It is transmission, and distribution
also the sole companies.
concern of Congress to instill discipline among the members of its conference committee if it believes
With regard to 70% limit on input tax credit
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 Provides that the input tax No similar provision Provides that the input tax
deny a review of the internal proceedings of a co-equal branch of government. credit for capital goods on credit for capital goods on
Moreover, as far back as 1994 or more than ten years ago, in the case of Tolentino vs. Secretary of which a VAT has been paid which a VAT has been paid
Finance,23the Court already made the pronouncement that "[i]f a change is desired in the practice [of shall be equally distributed shall be equally distributed
the Bicameral Conference Committee] it must be sought in Congress since this question is not covered over 5 years or the over 5 years or the
by any constitutional provision but is only an internal rule of each house." 24 To date, Congress has not depreciable life of such depreciable life of such capital
seen it fit to make such changes adverted to by the Court. It seems, therefore, that Congress finds the capital goods; the input tax goods; the input tax credit for
practices of the bicameral conference committee to be very useful for purposes of prompt and efficient credit for goods and services goods and services other than
legislative action. other than capital goods shall capital goods shall not exceed
Nevertheless, just to put minds at ease that no blatant irregularities tainted the proceedings of the not exceed 5% of the total 90% of the output VAT.
bicameral conference committees, the Court deems it necessary to dwell on the issue. The Court amount of such goods and
observes that there was a necessity for a conference committee because a comparison of the services; and for persons
provisions of House Bill Nos. 3555 and 3705 on one hand, and Senate Bill No. 1950 on the other, engaged in retail trading of
reveals that there were indeed disagreements. As pointed out in the petitions, said disagreements were goods, the allowable input tax
as follows: credit shall not exceed 11%
House Bill No. 3555 House Bill No.3705 Senate Bill No. 1950 of the total amount of goods
purchased.
With regard to "Stand-By Authority" in favor of President
With regard to amendments to be made to NIRC provisions regarding income and excise taxes
Provides for 12% VAT on Provides for 12% VAT in general Provides for a single rate of
every sale of goods or on sales of goods or properties 10% VAT on sale of goods or No similar provision No similar provision Provided for amendments to
properties (amending Sec. and reduced rates for sale of properties (amending Sec. several NIRC provisions regard
106 of NIRC); 12% VAT on certain locally manufactured 106 of NIRC), 10% VAT on corporate income, percentage,
importation of goods goods and petroleum products sale of services including sale franchise and excise taxes
(amending Sec. 107 of and raw materials to be used in of electricity by generation The disagreements between the provisions in the House bills and the Senate bill were with regard to (1)
NIRC); and 12% VAT on sale the manufacture thereof companies, transmission and what rate of VAT is to be imposed; (2) whether only the VAT imposed on electricity generation,
of services and use or lease (amending Sec. 106 of NIRC); distribution companies, and transmission and distribution companies should not be passed on to consumers, as proposed in the
of properties (amending Sec. 12% VAT on importation of goods use or lease of properties Senate bill, or both the VAT imposed on electricity generation, transmission and distribution companies
108 of NIRC) and reduced rates for certain (amending Sec. 108 of NIRC) and the VAT imposed on sale of petroleum products should not be passed on to consumers, as
imported products including proposed in the House bill; (3) in what manner input tax credits should be limited; (4) and whether the
petroleum products (amending NIRC provisions on corporate income taxes, percentage, franchise and excise taxes should be
amended.
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%, 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. . . .
...
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 (1,000,000.00):
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 zero-rated 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 lets keep it plain and simple. Lets 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, lets 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.
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. Prado29 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 "No-Amendment
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 In the present cases, petitioners admit that it was indeed House Bill Nos. 3555 and 3705 that initiated
Journal. the move for amending provisions of the NIRC dealing mainly with the value-added tax. Upon
Petitioners argument that the practice where a bicameral conference committee is allowed to add or transmittal of said House bills to the Senate, the Senate came out with Senate Bill No. 1950 proposing
delete provisions in the House bill and the Senate bill after these had passed three readings is in effect amendments not only to NIRC provisions on the value-added tax but also amendments to NIRC
a circumvention of the "no amendment rule" (Sec. 26 (2), Art. VI of the 1987 Constitution), fails to provisions on other kinds of taxes. Is the introduction by the Senate of provisions not dealing directly
convince the Court to deviate from its ruling in the Tolentino case that: with the value- added tax, which is the only kind of tax being amended in the House bills, still within the
Nor is there any reason for requiring that the Committees Report in these cases must have undergone purview of the constitutional provision authorizing the Senate to propose or concur with amendments to
three readings in each of the two houses. If that be the case, there would be no end to negotiation since a revenue bill that originated from the House?
each house may seek modification of the compromise bill. . . . The foregoing question had been squarely answered in the Tolentino case, wherein the Court held,
Art. VI. 26 (2) must, therefore, be construed as referring only to bills introduced for the first time in thus:
either house of Congress, not to the conference committee report. 32 (Emphasis supplied) . . . To begin with, it is not the law but the revenue bill which is required by the Constitution to
The Court reiterates here that the "no-amendment rule" refers only to the procedure to be followed by "originate exclusively" in the House of Representatives. It is important to emphasize this, because a bill
each house of Congress with regard to bills initiated in each of said respective houses, before said bill is originating in the House may undergo such extensive changes in the Senate that the result may be a
transmitted to the other house for its concurrence or amendment. Verily, to construe said provision in a rewriting of the whole. . . . At this point, what is important to note is that, as a result of the Senate action,
way as to proscribe any further changes to a bill after one house has voted on it would lead to absurdity a distinct bill may be produced. To insist that a revenue statute and not only the bill which initiated the
as this would mean that the other house of Congress would be deprived of its constitutional power to legislative process culminating in the enactment of the law must substantially be the same as the
amend or introduce changes to said bill. Thus, Art. VI, Sec. 26 (2) of the Constitution cannot be taken to House bill would be to deny the Senates power not only to "concur with amendments" but also to
mean that the introduction by the Bicameral Conference Committee of amendments and modifications "propose amendments." It would be to violate the coequality of legislative power of the two houses of
to disagreeing provisions in bills that have been acted upon by both houses of Congress is prohibited. Congress and in fact make the House superior to the Senate.
C. R.A. No. 9337 Does Not Violate Article VI, Section 24 of the Constitution on Exclusive Origination of
Revenue Bills Given, then, the power of the Senate to propose amendments, the Senate can propose its own
Coming to the issue of the validity of the amendments made regarding the NIRC provisions on version even with respect to bills which are required by the Constitution to originate in the House.
corporate income taxes and percentage, excise taxes. Petitioners refer to the following provisions, to ...
wit: Indeed, what the Constitution simply means is that the initiative for filing revenue, tariff or tax bills, bills
Section 27 Rates of Income Tax on Domestic Corporation authorizing an increase of the public debt, private bills and bills of local application must come from the
28(A)(1) Tax on Resident Foreign Corporation House of Representatives on the theory that, elected as they are from the districts, the members of the
28(B)(1) Inter-corporate Dividends 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
34(B)(1) Inter-corporate Dividends
perspective. Both views are thereby made to bear on the enactment of such laws.33 (Emphasis
116 Tax on Persons Exempt from VAT supplied)
117 Percentage Tax on domestic carriers and keepers of Garage Since there is no question that the revenue bill exclusively originated in the House of Representatives,
119 Tax on franchises the Senate was acting within its
121 Tax on banks and Non-Bank Financial Intermediaries constitutional power to introduce amendments to the House bill when it included provisions in Senate
148 Excise Tax on manufactured oils and other fuels Bill No. 1950 amending corporate income taxes, percentage, excise and franchise taxes. Verily, Article
151 Excise Tax on mineral products 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.
236 Registration requirements
Furthermore, the amendments introduced by the Senate to the NIRC provisions that had not been
237 Issuance of receipts or sales or commercial invoices touched in the House bills are still in furtherance of the intent of the House in initiating the subject
288 Disposition of Incremental Revenue revenue bills. The Explanatory Note of House Bill No. 1468, the very first House bill introduced on the
Petitioners claim that the amendments to these provisions of the NIRC did not at all originate from the floor, which was later substituted by House Bill No. 3555, stated:
House. They aver that House Bill No. 3555 proposed amendments only regarding Sections 106, 107, One of the challenges faced by the present administration is the urgent and daunting task of solving the
108, 110 and 114 of the NIRC, while House Bill No. 3705 proposed amendments only to Sections 106, countrys serious financial problems. To do this, government expenditures must be strictly monitored
107,108, 109, 110 and 111 of the NIRC; thus, the other sections of the NIRC which the Senate and controlled and revenues must be significantly increased. This may be easier said than done, but
amended but which amendments were not found in the House bills are not intended to be amended by our fiscal authorities are still optimistic the government will be operating on a balanced budget by the
the House of Representatives. Hence, they argue that since the proposed amendments did not year 2009. In fact, several measures that will result to significant expenditure savings have been
originate from the House, such amendments are a violation of Article VI, Section 24 of the Constitution. identified by the administration. It is supported with a credible package of revenue measures that
The argument does not hold water. include measures to improve tax administration and control the leakages in revenues from income taxes
Article VI, Section 24 of the Constitution reads: and the value-added tax (VAT). (Emphasis supplied)
Sec. 24. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local Rep. Eric D. Singson, in his sponsorship speech for House Bill No. 3555, declared that:
application, and private bills shall originate exclusively in the House of Representatives but the Senate In the budget message of our President in the year 2005, she reiterated that we all acknowledged that
may propose or concur with amendments. 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 countrys 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 64.3 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 48.7 billion amount is from the VAT on
twelve goods and services. The rest of the tab 10.5 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 worlds 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 10.5 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.
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.
...
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 countrys 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 %).
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) 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 %).
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 %). (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 Presidents 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 theauthority 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.
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.
...
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.
...
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 %).
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 wordshall 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 Presidents 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.56The 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.
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 (24/5%) or the national
government deficit as a percentage of GDP of the previous year exceeds one and one-half percent
(1%). 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 24/5 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%.
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 %).
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. Natl Govt 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
countrys 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. Thats interest plus amortization of our debt. So clearly, this is not a
sustainable situation. Thats 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 Id 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, weve 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 states economic dilemma is not for the
Court to judge. In theFarias 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
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 businesss 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 taxpayers 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 laymans 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 persons 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
(1,000,000.00): 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 1 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% non-creditable 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.
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 value-added 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 value-added tax imposed in Sections 106 and 108 of this Code,
deduct and withhold the value-added 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 becreditable 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 Congresss
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."
Whats 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 States
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 ones 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 Courts 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.
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 1,500,000.00.88 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 200,000.00. 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
1.5 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 gas92 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 corporations 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 taxpayers ability to pay. This principle was also lifted
from Adam Smiths 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. 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. Avelino101 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.