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G.R. No.

139325 April 12, 2005


PRISCILLA C. MIJARES, LORETTA ANN P. ROSALES, HILDA B. NARCISO, SR. MARIANI
DIMARANAN, SFIC, and JOEL C. LAMANGAN in their behalf and on behalf of the Class
Plaintiffs in Class Action No. MDL 840, United States District Court of Hawaii, Petitioner,
vs.
HON. SANTIAGO JAVIER RANADA, in his capacity as Presiding Judge of Branch 137,
Regional Trial Court, Makati City, and the ESTATE OF FERDINAND E. MARCOS, through its
court appointed legal representatives in Class Action MDL 840, United States District Court of
Hawaii, namely: Imelda R. Marcos and Ferdinand Marcos, Jr.,Respondents.
DECISION
TINGA, J.:
Our martial law experience bore strange unwanted fruits, and we have yet to finish weeding out its
bitter crop. While the restoration of freedom and the fundamental structures and processes of
democracy have been much lauded, according to a significant number, the changes, however, have
not sufficiently healed the colossal damage wrought under the oppressive conditions of the martial
law period. The cries of justice for the tortured, the murdered, and the desaparecidos arouse outrage
and sympathy in the hearts of the fair-minded, yet the dispensation of the appropriate relief due them
cannot be extended through the same caprice or whim that characterized the ill-wind of martial rule.
The damage done was not merely personal but institutional, and the proper rebuke to the iniquitous
past has to involve the award of reparations due within the confines of the restored rule of law.
The petitioners in this case are prominent victims of human rights violations who, deprived of the
1

opportunity to directly confront the man who once held absolute rule over this country, have chosen to
do battle instead with the earthly representative, his estate. The clash has been for now interrupted
by a trial court ruling, seemingly comported to legal logic, that required the petitioners to pay a
whopping filing fee of over Four Hundred Seventy-Two Million Pesos (P472,000,000.00) in order that
they be able to enforce a judgment awarded them by a foreign court. There is an understandable
temptation to cast the struggle within the simplistic confines of a morality tale, and to employ short-
cuts to arrive at what might seem the desirable solution. But easy, reflexive resort to the equity
principle all too often leads to a result that may be morally correct, but legally wrong.
Nonetheless, the application of the legal principles involved in this case will comfort those who
maintain that our substantive and procedural laws, for all their perceived ambiguity and susceptibility
to myriad interpretations, are inherently fair and just. The relief sought by the petitioners is expressly
mandated by our laws and conforms to established legal principles. The granting of this petition for
certiorari is warranted in order to correct the legally infirm and unabashedly unjust ruling of the
respondent judge.
The essential facts bear little elaboration. On 9 May 1991, a complaint was filed with the United
States District Court (US District Court), District of Hawaii, against the Estate of former Philippine
President Ferdinand E. Marcos (Marcos Estate). The action was brought forth by ten Filipino
citizens who each alleged having suffered human rights abuses such as arbitrary detention, torture
2

and rape in the hands of police or military forces during the Marcos regime. The Alien Tort Act was
3

invoked as basis for the US District Court's jurisdiction over the complaint, as it involved a suit by
aliens for tortious violations of international law. These plaintiffs brought the action on their own
4

behalf and on behalf of a class of similarly situated individuals, particularly consisting of all current
civilian citizens of the Philippines, their heirs and beneficiaries, who between 1972 and 1987 were
tortured, summarily executed or had disappeared while in the custody of military or paramilitary
groups. Plaintiffs alleged that the class consisted of approximately ten thousand (10,000) members;
hence, joinder of all these persons was impracticable.
The institution of a class action suit was warranted under Rule 23(a) and (b)(1)(B) of the US Federal
Rules of Civil Procedure, the provisions of which were invoked by the plaintiffs. Subsequently, the US
District Court certified the case as a class action and created three (3) sub-classes of torture,
summary execution and disappearance victims. Trial ensued, and subsequently a jury rendered a
5

verdict and an award of compensatory and exemplary damages in favor of the plaintiff class. Then,
on 3 February 1995, the US District Court, presided by Judge Manuel L. Real, rendered a Final
Judgment (Final Judgment) awarding the plaintiff class a total of One Billion Nine Hundred Sixty Four
Million Five Thousand Eight Hundred Fifty Nine Dollars and Ninety Cents ($1,964,005,859.90).
The Final Judgment was eventually affirmed by the US Court of Appeals for the Ninth Circuit, in a
decision rendered on 17 December 1996. 6

On 20 May 1997, the present petitioners filed Complaint with the Regional Trial Court, City of Makati
(Makati RTC) for the enforcement of the Final Judgment. They alleged that they are members of the
plaintiff class in whose favor the US District Court awarded damages. They argued that since the
7

Marcos Estate failed to file a petition for certiorari with the US Supreme Court after the Ninth Circuit
Court of Appeals had affirmed the Final Judgment, the decision of the US District Court had become
final and executory, and hence should be recognized and enforced in the Philippines, pursuant to
Section 50, Rule 39 of the Rules of Court then in force.8

On 5 February 1998, the Marcos Estate filed a motion to dismiss, raising, among others, the non-
payment of the correct filing fees. It alleged that petitioners had only paid Four Hundred Ten Pesos
(P410.00) as docket and filing fees, notwithstanding the fact that they sought to enforce a monetary
amount of damages in the amount of over Two and a Quarter Billion US Dollars (US$2.25 Billion).
The Marcos Estate cited Supreme Court Circular No. 7, pertaining to the proper computation and
payment of docket fees. In response, the petitioners claimed that an action for the enforcement of a
foreign judgment is not capable of pecuniary estimation; hence, a filing fee of only Four Hundred Ten
Pesos (P410.00) was proper, pursuant to Section 7(c) of Rule 141. 9

On 9 September 1998, respondent Judge Santiago Javier Ranada of the Makati RTC issued the
10

subject Orderdismissing the complaint without prejudice. Respondent judge opined that contrary to
the petitioners' submission, the subject matter of the complaint was indeed capable of pecuniary
estimation, as it involved a judgment rendered by a foreign court ordering the payment of definite
sums of money, allowing for easy determination of the value of the foreign judgment. On that score,
Section 7(a) of Rule 141 of the Rules of Civil Procedure would find application, and the RTC
estimated the proper amount of filing fees was approximately Four Hundred Seventy Two Million
Pesos, which obviously had not been paid.
Not surprisingly, petitioners filed a Motion for Reconsideration, which Judge Ranada denied in
an Order dated 28 July 1999. From this denial, petitioners filed a Petition for Certiorari under Rule 65
assailing the twin orders of respondent judge. They prayed for the annulment of the questioned
11

orders, and an order directing the reinstatement of Civil Case No. 97-1052 and the conduct of
appropriate proceedings thereon.
Petitioners submit that their action is incapable of pecuniary estimation as the subject matter of the
suit is the enforcement of a foreign judgment, and not an action for the collection of a sum of money
or recovery of damages. They also point out that to require the class plaintiffs to pay Four Hundred
Seventy Two Million Pesos (P472,000,000.00) in filing fees would negate and render inutile the liberal
construction ordained by the Rules of Court, as required by Section 6, Rule 1 of the Rules of Civil
Procedure, particularly the inexpensive disposition of every action.
Petitioners invoke Section 11, Article III of the Bill of Rights of the Constitution, which provides that
"Free access to the courts and quasi-judicial bodies and adequate legal assistance shall not be
denied to any person by reason of poverty," a mandate which is essentially defeated by the required
exorbitant filing fee. The adjudicated amount of the filing fee, as arrived at by the RTC, was
characterized as indisputably unfair, inequitable, and unjust.
The Commission on Human Rights (CHR) was permitted to intervene in this case. It urged that the
12

petition be granted and a judgment rendered, ordering the enforcement and execution of the District
Court judgment in accordance with Section 48, Rule 39 of the 1997 Rules of Civil Procedure. For the
CHR, the Makati RTC erred in interpreting the action for the execution of a foreign judgment as a new
case, in violation of the principle that once a case has been decided between the same parties in one
country on the same issue with finality, it can no longer be relitigated again in another country. The
13

CHR likewise invokes the principle of comity, and of vested rights.


The Court's disposition on the issue of filing fees will prove a useful jurisprudential guidepost for
courts confronted with actions enforcing foreign judgments, particularly those lodged against an
estate. There is no basis for the issuance a limited pro hac vice ruling based on the special
circumstances of the petitioners as victims of martial law, or on the emotionally-charged allegation of
human rights abuses.
An examination of Rule 141 of the Rules of Court readily evinces that the respondent judge ignored
the clear letter of the law when he concluded that the filing fee be computed based on the total sum
claimed or the stated value of the property in litigation.
In dismissing the complaint, the respondent judge relied on Section 7(a), Rule 141 as basis for the
computation of the filing fee of over P472 Million. The provision states:
SEC. 7. Clerk of Regional Trial Court.-
(a) For filing an action or a permissive counterclaim or money claim against an estate not
based on judgment, or for filing with leave of court a third-party, fourth-party, etc., complaint, or a
complaint in intervention, and for all clerical services in the same time, if the total sum claimed,
exclusive of interest, or the started value of the property in litigation, is:
1. Less than P 100,00.00 – P 500.00
2. P 100,000.00 or more but less than P 150,000.00 – P 800.00
3. P 150,000.00 or more but less than P 200,000.00 – P 1,000.00
4. P 200,000.00 or more but less than P 250,000.00 – P 1,500.00
5. P 250,000.00 or more but less than P 300,00.00 – P 1,750.00
6. P 300,000.00 or more but not more than P 400,000.00 – P 2,000.00
7. P 350,000.00 or more but not more than P400,000.00 – P 2,250.00
8. For each P 1,000.00 in excess of P 400,000.00 – P 10.00
(Emphasis supplied)
Obviously, the above-quoted provision covers, on one hand, ordinary actions, permissive
counterclaims, third-party, etc. complaints and complaints-in-interventions, and on the other, money
claims against estates which are not based on judgment. Thus, the relevant question for purposes of
the present petition is whether the action filed with the lower court is a "money claim against an estate
not based on judgment."
Petitioners' complaint may have been lodged against an estate, but it is clearly based on a judgment,
the Final Judgment of the US District Court. The provision does not make any distinction between a
local judgment and a foreign judgment, and where the law does not distinguish, we shall not
distinguish.
A reading of Section 7 in its entirety reveals several instances wherein the filing fee is computed on
the basis of the amount of the relief sought, or on the value of the property in litigation. The filing fee
for requests for extrajudicial foreclosure of mortgage is based on the amount of indebtedness or the
mortgagee's claim. In special proceedings involving properties such as for the allowance of wills, the
14

filing fee is again based on the value of the property. The aforecited rules evidently have no
15

application to petitioners' complaint.


Petitioners rely on Section 7(b), particularly the proviso on actions where the value of the subject
matter cannot be estimated. The provision reads in full:
SEC. 7. Clerk of Regional Trial Court.-
(b) For filing
1. Actions where the value of the subject matter cannot be estimated --- P 600.00
2. Special civil actions except judicial foreclosure which shall be governed by paragraph
(a) above ---P 600.00
3. All other actions not involving property --- P 600.00
In a real action, the assessed value of the property, or if there is none, the estimated value, thereof
shall be alleged by the claimant and shall be the basis in computing the fees.
It is worth noting that the provision also provides that in real actions, the assessed value or estimated
value of the property shall be alleged by the claimant and shall be the basis in computing the fees.
Yet again, this provision does not apply in the case at bar. A real action is one where the plaintiff
seeks the recovery of real property or an action affecting title to or recovery of possession of real
property. Neither the complaint nor the award of damages adjudicated by the US District Court
16

involves any real property of the Marcos Estate.


Thus, respondent judge was in clear and serious error when he concluded that the filing fees should
be computed on the basis of the schematic table of Section 7(a), as the action involved pertains to a
claim against an estate based on judgment. What provision, if any, then should apply in determining
the filing fees for an action to enforce a foreign judgment?
To resolve this question, a proper understanding is required on the nature and effects of a foreign
judgment in this jurisdiction.
The rules of comity, utility and convenience of nations have established a usage among civilized
states by which final judgments of foreign courts of competent jurisdiction are reciprocally respected
and rendered efficacious under certain conditions that may vary in different countries. This principle
17

was prominently affirmed in the leading American case of Hilton v. Guyot and expressly recognized
18

in our jurisprudence beginning with Ingenholl v. Walter E. Olsen & Co. The conditions required by the
19

Philippines for recognition and enforcement of a foreign judgment were originally contained in Section
311 of the Code of Civil Procedure, which was taken from the California Code of Civil Procedure
which, in turn, was derived from the California Act of March 11, 1872. Remarkably, the procedural
20

rule now outlined in Section 48, Rule 39 of the Rules of Civil Procedure has remained unchanged
down to the last word in nearly a century. Section 48 states:
SEC. 48. Effect of foreign judgments. — The effect of a judgment of a tribunal of a
foreign country, having jurisdiction to pronounce the judgment is as follows:
(a) In case of a judgment upon a specific thing, the judgment is conclusive upon the title
to the thing;
(b) In case of a judgment against a person, the judgment is presumptive evidence of a
right as between the parties and their successors in interest by a subsequent title;
In either case, the judgment or final order may be repelled by evidence of a want of jurisdiction,
want of notice to the party, collusion, fraud, or clear mistake of law or fact.
There is an evident distinction between a foreign judgment in an action in rem and one in personam.
For an action in rem, the foreign judgment is deemed conclusive upon the title to the thing, while in an
action in personam, the foreign judgment is presumptive, and not conclusive, of a right as between
the parties and their successors in interest by a subsequent title. However, in both cases, the foreign
21

judgment is susceptible to impeachment in our local courts on the grounds of want of jurisdiction or
notice to the party, collusion, fraud, or clear mistake of law or fact. Thus, the party aggrieved by the
22 23 24
foreign judgment is entitled to defend against the enforcement of such decision in the local forum. It is
essential that there should be an opportunity to challenge the foreign judgment, in order for the court
in this jurisdiction to properly determine its efficacy.
25

It is clear then that it is usually necessary for an action to be filed in order to enforce a foreign
judgment , even if such judgment has conclusive effect as in the case of in rem actions, if only for the
26

purpose of allowing the losing party an opportunity to challenge the foreign judgment, and in order for
the court to properly determine its efficacy. Consequently, the party attacking a foreign judgment has
27

the burden of overcoming the presumption of its validity. 28

The rules are silent as to what initiatory procedure must be undertaken in order to enforce a foreign
judgment in the Philippines. But there is no question that the filing of a civil complaint is an
appropriate measure for such purpose. A civil action is one by which a party sues another for the
enforcement or protection of a right, and clearly an action to enforce a foreign judgment is in essence
29

a vindication of a right prescinding either from a "conclusive judgment upon title" or the "presumptive
evidence of a right." Absent perhaps a statutory grant of jurisdiction to a quasi-judicial body, the claim
30

for enforcement of judgment must be brought before the regular courts. 31

There are distinctions, nuanced but discernible, between the cause of action arising from the
enforcement of a foreign judgment, and that arising from the facts or allegations that occasioned the
foreign judgment. They may pertain to the same set of facts, but there is an essential difference in
the right-duty correlatives that are sought to be vindicated. For example, in a complaint for damages
against a tortfeasor, the cause of action emanates from the violation of the right of the complainant
through the act or omission of the respondent. On the other hand, in a complaint for the enforcement
of a foreign judgment awarding damages from the same tortfeasor, for the violation of the same right
through the same manner of action, the cause of action derives not from the tortious act but from the
foreign judgment itself.
More importantly, the matters for proof are different. Using the above example, the complainant will
have to establish before the court the tortious act or omission committed by the tortfeasor, who in turn
is allowed to rebut these factual allegations or prove extenuating circumstances. Extensive litigation
is thus conducted on the facts, and from there the right to and amount of damages are assessed. On
the other hand, in an action to enforce a foreign judgment, the matter left for proof is the foreign
judgment itself, and not the facts from which it prescinds.
As stated in Section 48, Rule 39, the actionable issues are generally restricted to a review of
jurisdiction of the foreign court, the service of personal notice, collusion, fraud, or mistake of fact or
law. The limitations on review is in consonance with a strong and pervasive policy in all legal
systems to limit repetitive litigation on claims and issues. Otherwise known as the policy of
32

preclusion, it seeks to protect party expectations resulting from previous litigation, to safeguard
against the harassment of defendants, to insure that the task of courts not be increased by never-
ending litigation of the same disputes, and – in a larger sense – to promote what Lord Coke in
the Ferrer's Case of 1599 stated to be the goal of all law: "rest and quietness." If every judgment of a
33

foreign court were reviewable on the merits, the plaintiff would be forced back on his/her original
cause of action, rendering immaterial the previously concluded litigation. 34

Petitioners appreciate this distinction, and rely upon it to support the proposition that the subject
matter of the complaintthe enforcement of a foreign judgmentis incapable of pecuniary estimation.
Admittedly the proposition, as it applies in this case, is counter-intuitive, and thus deserves strict
scrutiny. For in all practical intents and purposes, the matter at hand is capable of pecuniary
estimation, down to the last cent. In the assailed Order, the respondent judge pounced upon this point
without equivocation:
The Rules use the term "where the value of the subject matter cannot be estimated." The subject
matter of the present case is the judgment rendered by the foreign court ordering defendant to pay
plaintiffs definite sums of money, as and for compensatory damages. The Court finds that the
value of the foreign judgment can be estimated; indeed, it can even be easily determined. The
Court is not minded to distinguish between the enforcement of a judgment and the amount of said
judgment, and separate the two, for purposes of determining the correct filing fees. Similarly, a
plaintiff suing on promissory note for P1 million cannot be allowed to pay only P400 filing
fees (sic), on the reasoning that the subject matter of his suit is not the P1 million, but the
enforcement of the promissory note, and that the value of such "enforcement" cannot be
estimated. 35

The jurisprudential standard in gauging whether the subject matter of an action is capable of
pecuniary estimation is well-entrenched. The Marcos Estate cites Singsong v. Isabela Sawmill and
Raymundo v. Court of Appeals, which ruled:
[I]n determining whether an action is one the subject matter of which is not capable of pecuniary
estimation this Court has adopted the criterion of first ascertaining the nature of the principal
action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is
considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or
in the courts of first instance would depend on the amount of the claim. However, where the basic
issue is something other than the right to recover a sum of money, where the money claim is
purely incidental to, or a consequence of, the principal relief sought, this Court has considered
such actions as cases where the subject of the litigation may not be estimated in terms of money,
and are cognizable exclusively by courts of first instance (now Regional Trial Courts).
On the other hand, petitioners cite the ponencia of Justice JBL Reyes in Lapitan v. Scandia, from 36

which the rule in Singsong and Raymundo actually derives, but which incorporates this additional
nuance omitted in the latter cases:
xxx However, where the basic issue is something other than the right to recover a sum of money,
where the money claim is purely incidental to, or a consequence of, the principal relief sought, like
in suits to have the defendant perform his part of the contract (specific performance) and
in actions for support, or for annulment of judgment or to foreclose a mortgage, this Court
has considered such actions as cases where the subject of the litigation may not be estimated in
terms of money, and are cognizable exclusively by courts of first instance. 37

Petitioners go on to add that among the actions the Court has recognized as being incapable of
pecuniary estimation include legality of conveyances and money deposits, validity of a mortgage, the
38 39

right to support, validity of documents, rescission of contracts, specific performance, and validity or
40 41 42 43

annulment of judgments. It is urged that an action for enforcement of a foreign judgment belongs to
44

the same class.


This is an intriguing argument, but ultimately it is self-evident that while the subject matter of the
action is undoubtedly the enforcement of a foreign judgment, the effect of a providential award would
be the adjudication of a sum of money. Perhaps in theory, such an action is primarily for "the
enforcement of the foreign judgment," but there is a certain obtuseness to that sort of argument since
there is no denying that the enforcement of the foreign judgment will necessarily result in the award of
a definite sum of money.
But before we insist upon this conclusion past beyond the point of reckoning, we must examine its
possible ramifications. Petitioners raise the point that a declaration that an action for enforcement of
foreign judgment may be capable of pecuniary estimation might lead to an instance wherein a first
level court such as the Municipal Trial Court would have jurisdiction to enforce a foreign judgment.
But under the statute defining the jurisdiction of first level courts, B.P. 129, such courts are not vested
with jurisdiction over actions for the enforcement of foreign judgments.
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts in civil cases. — Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit
Trial Courts shall exercise:
(1) Exclusive original jurisdiction over civil actions and probate proceedings, testate and intestate,
including the grant of provisional remedies in proper cases, where the value of the personal
property, estate, or amount of the demand does not exceed One hundred thousand pesos
(P100,000.00) or, in Metro Manila where such personal property, estate, or amount of the demand
does not exceed Two hundred thousand pesos (P200,000.00) exclusive of interest damages of
whatever kind, attorney's fees, litigation expenses, and costs, the amount of which must be
specifically alleged: Provided, That where there are several claims or causes of action between
the same or different parties, embodied in the same complaint, the amount of the demand shall be
the totality of the claims in all the causes of action, irrespective of whether the causes of action
arose out of the same or different transactions;
(2) Exclusive original jurisdiction over cases of forcible entry and unlawful detainer: Provided, That
when, in such cases, the defendant raises the question of ownership in his pleadings and the
question of possession cannot be resolved without deciding the issue of ownership, the issue of
ownership shall be resolved only to determine the issue of possession.
(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real
property, or any interest therein where the assessed value of the property or interest therein does
not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such
assessed value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest,
damages of whatever kind, attorney's fees, litigation expenses and costs: Provided, That value of
such property shall be determined by the assessed value of the adjacent lots. 45

Section 33 of B.P. 129 refers to instances wherein the cause of action or subject matter pertains to an
assertion of rights and interests over property or a sum of money. But as earlier pointed out, the
subject matter of an action to enforce a foreign judgment is the foreign judgment itself, and the cause
of action arising from the adjudication of such judgment.
An examination of Section 19(6), B.P. 129 reveals that the instant complaint for enforcement of a
foreign judgment, even if capable of pecuniary estimation, would fall under the jurisdiction of the
Regional Trial Courts, thus negating the fears of the petitioners. Indeed, an examination of the
provision indicates that it can be relied upon as jurisdictional basis with respect to actions for
enforcement of foreign judgments, provided that no other court or office is vested jurisdiction over
such complaint:
Sec. 19. Jurisdiction in civil cases. — Regional Trial Courts shall exercise exclusive original
jurisdiction:
xxx
(6) In all cases not within the exclusive jurisdiction of any court, tribunal, person or body exercising
jurisdiction or any court, tribunal, person or body exercising judicial or quasi-judicial functions.
Thus, we are comfortable in asserting the obvious, that the complaint to enforce the US District Court
judgment is one capable of pecuniary estimation. But at the same time, it is also an action based on
judgment against an estate, thus placing it beyond the ambit of Section 7(a) of Rule 141. What
provision then governs the proper computation of the filing fees over the instant complaint? For this
case and other similarly situated instances, we find that it is covered by Section 7(b)(3), involving as it
does, "other actions not involving property."
Notably, the amount paid as docket fees by the petitioners on the premise that it was an action
incapable of pecuniary estimation corresponds to the same amount required for "other actions not
involving property." The petitioners thus paid the correct amount of filing fees, and it was a grave
abuse of discretion for respondent judge to have applied instead a clearly inapplicable rule and
dismissed the complaint.
There is another consideration of supreme relevance in this case, one which should disabuse the
notion that the doctrine affirmed in this decision is grounded solely on the letter of the procedural
rule. We earlier adverted to the the internationally recognized policy of preclusion, as well as the
46

principles of comity, utility and convenience of nations as the basis for the evolution of the rule calling
47

for the recognition and enforcement of foreign judgments. The US Supreme Court in Hilton v.
Guyot relied heavily on the concept of comity, as especially derived from the landmark treatise of
48

Justice Story in his Commentaries on the Conflict of Laws of 1834. Yet the notion of "comity" has
49

since been criticized as one "of dim contours" or suffering from a number of fallacies. Other
50 51

conceptual bases for the recognition of foreign judgments have evolved such as the vested rights
theory or the modern doctrine of obligation. 52

There have been attempts to codify through treaties or multilateral agreements the standards for the
recognition and enforcement of foreign judgments, but these have not borne fruition. The members of
the European Common Market accede to the Judgments Convention, signed in 1978, which
eliminates as to participating countries all of such obstacles to recognition such as reciprocity
and révision au fond. The most ambitious of these attempts is the Convention on the Recognition
53

and Enforcement of Foreign Judgments in Civil and Commercial Matters, prepared in 1966 by the
Hague Conference of International Law. While it has not received the ratifications needed to have it
54

take effect, it is recognized as representing current scholarly thought on the topic. Neither the
55 56

Philippines nor the United States are signatories to the Convention.


Yet even if there is no unanimity as to the applicable theory behind the recognition and enforcement
of foreign judgments or a universal treaty rendering it obligatory force, there is consensus that the
viability of such recognition and enforcement is essential. Steiner and Vagts note:
. . . The notion of unconnected bodies of national law on private international law, each following
a quite separate path, is not one conducive to the growth of a transnational community
encouraging travel and commerce among its members. There is a contemporary resurgence of
writing stressing the identity or similarity of the values that systems of public and private
international law seek to further – a community interest in common, or at least reasonable, rules
on these matters in national legal systems. And such generic principles as reciprocity play an
important role in both fields. 57

Salonga, whose treatise on private international law is of worldwide renown, points out:
Whatever be the theory as to the basis for recognizing foreign judgments, there can be little
dispute that the end is to protect the reasonable expectations and demands of the parties. Where
the parties have submitted a matter for adjudication in the court of one state, and proceedings
there are not tainted with irregularity, they may fairly be expected to submit, within the state or
elsewhere, to the enforcement of the judgment issued by the court. 58

There is also consensus as to the requisites for recognition of a foreign judgment and the defenses
against the enforcement thereof. As earlier discussed, the exceptions enumerated in Section 48, Rule
39 have remain unchanged since the time they were adapted in this jurisdiction from long standing
American rules. The requisites and exceptions as delineated under Section 48 are but a restatement
of generally accepted principles of international law. Section 98 of The Restatement, Second, Conflict
of Laws, states that "a valid judgment rendered in a foreign nation after a fair trial in a contested
proceeding will be recognized in the United States," and on its face, the term "valid" brings into play
requirements such notions as valid jurisdiction over the subject matter and parties. Similarly, the
59

notion that fraud or collusion may preclude the enforcement of a foreign judgment finds affirmation
with foreign jurisprudence and commentators, as well as the doctrine that the foreign judgment must
60

not constitute "a clear mistake of law or fact." And finally, it has been recognized that "public policy"
61

as a defense to the recognition of judgments serves as an umbrella for a variety of concerns in


international practice which may lead to a denial of recognition. 62

The viability of the public policy defense against the enforcement of a foreign judgment has been
recognized in this jurisdiction. This defense allows for the application of local standards in reviewing
63

the foreign judgment, especially when such judgment creates only a presumptive right, as it does in
cases wherein the judgment is against a person. The defense is also recognized within the
64

international sphere, as many civil law nations adhere to a broad public policy exception which may
result in a denial of recognition when the foreign court, in the light of the choice-of-law rules of the
recognizing court, applied the wrong law to the case. The public policy defense can safeguard
65

against possible abuses to the easy resort to offshore litigation if it can be demonstrated that the
original claim is noxious to our constitutional values.
There is no obligatory rule derived from treaties or conventions that requires the Philippines to
recognize foreign judgments, or allow a procedure for the enforcement thereof. However, generally
accepted principles of international law, by virtue of the incorporation clause of the Constitution, form
part of the laws of the land even if they do not derive from treaty obligations. The classical
66

formulation in international law sees those customary rules accepted as binding result from the
combination two elements: the established, widespread, and consistent practice on the part of States;
and a psychological element known as the opinion juris sive necessitates (opinion as to law or
necessity). Implicit in the latter element is a belief that the practice in question is rendered obligatory
by the existence of a rule of law requiring it.
67

While the definite conceptual parameters of the recognition and enforcement of foreign judgments
have not been authoritatively established, the Court can assert with certainty that such an
undertaking is among those generally accepted principles of international law. As earlier 68

demonstrated, there is a widespread practice among states accepting in principle the need for such
recognition and enforcement, albeit subject to limitations of varying degrees. The fact that there is no
binding universal treaty governing the practice is not indicative of a widespread rejection of the
principle, but only a disagreement as to the imposable specific rules governing the procedure for
recognition and enforcement.
Aside from the widespread practice, it is indubitable that the procedure for recognition and
enforcement is embodied in the rules of law, whether statutory or jurisprudential, adopted in various
foreign jurisdictions. In the Philippines, this is evidenced primarily by Section 48, Rule 39 of the Rules
of Court which has existed in its current form since the early 1900s. Certainly, the Philippine legal
system has long ago accepted into its jurisprudence and procedural rules the viability of an action for
enforcement of foreign judgment, as well as the requisites for such valid enforcement, as derived
from internationally accepted doctrines. Again, there may be distinctions as to the rules adopted by
each particular state, but they all prescind from the premise that there is a rule of law obliging states
69

to allow for, however generally, the recognition and enforcement of a foreign judgment. The bare
principle, to our mind, has attained the status of opinio juris in international practice.
This is a significant proposition, as it acknowledges that the procedure and requisites outlined in
Section 48, Rule 39 derive their efficacy not merely from the procedural rule, but by virtue of the
incorporation clause of the Constitution. Rules of procedure are promulgated by the Supreme
Court, and could very well be abrogated or revised by the high court itself. Yet the Supreme Court is
70

obliged, as are all State components, to obey the laws of the land, including generally accepted
principles of international law which form part thereof, such as those ensuring the qualified
recognition and enforcement of foreign judgments. 71

Thus, relative to the enforcement of foreign judgments in the Philippines, it emerges that there is a
general right recognized within our body of laws, and affirmed by the Constitution, to seek recognition
and enforcement of foreign judgments, as well as a right to defend against such enforcement on the
grounds of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or
fact.
The preclusion of an action for enforcement of a foreign judgment in this country merely due to an
exhorbitant assessment of docket fees is alien to generally accepted practices and principles in
international law. Indeed, there are grave concerns in conditioning the amount of the filing fee on the
pecuniary award or the value of the property subject of the foreign decision. Such pecuniary award
will almost certainly be in foreign denomination, computed in accordance with the applicable laws and
standards of the forum. The vagaries of inflation, as well as the relative low-income capacity of the
72

Filipino, to date may very well translate into an award virtually unenforceable in this country, despite
its integral validity, if the docket fees for the enforcement thereof were predicated on the amount of
the award sought to be enforced. The theory adopted by respondent judge and the Marcos Estate
may even lead to absurdities, such as if applied to an award involving real property situated in places
such as the United States or Scandinavia where real property values are inexorably high. We cannot
very well require that the filing fee be computed based on the value of the foreign property as
determined by the standards of the country where it is located.
As crafted, Rule 141 of the Rules of Civil Procedure avoids unreasonableness, as it recognizes that
the subject matter of an action for enforcement of a foreign judgment is the foreign judgment itself,
and not the right-duty correlatives that resulted in the foreign judgment. In this particular
circumstance, given that the complaint is lodged against an estate and is based on the US District
Court's Final Judgment, this foreign judgment may, for purposes of classification under the governing
procedural rule, be deemed as subsumed under Section 7(b)(3) of Rule 141, i.e., within the class of
"all other actions not involving property." Thus, only the blanket filing fee of minimal amount is
required.
Finally, petitioners also invoke Section 11, Article III of the Constitution, which states that "[F]ree
access to the courts and quasi-judicial bodies and adequate legal assistance shall not be denied to
any person by reason of poverty." Since the provision is among the guarantees ensured by the Bill of
Rights, it certainly gives rise to a demandable right. However, now is not the occasion to elaborate on
the parameters of this constitutional right. Given our preceding discussion, it is not necessary to
utilize this provision in order to grant the relief sought by the petitioners. It is axiomatic that the
constitutionality of an act will not be resolved by the courts if the controversy can be settled on other
grounds or unless the resolution thereof is indispensable for the determination of the case.
73 74

One more word. It bears noting that Section 48, Rule 39 acknowledges that the Final Judgment is
not conclusive yet, but presumptive evidence of a right of the petitioners against the Marcos Estate.
Moreover, the Marcos Estate is not precluded to present evidence, if any, of want of jurisdiction, want
of notice to the party, collusion, fraud, or clear mistake of law or fact. This ruling, decisive as it is on
the question of filing fees and no other, does not render verdict on the enforceability of the Final
Judgment before the courts under the jurisdiction of the Philippines, or for that matter any other issue
which may legitimately be presented before the trial court. Such issues are to be litigated before the
trial court, but within the confines of the matters for proof as laid down in Section 48, Rule 39. On the
other hand, the speedy resolution of this claim by the trial court is encouraged, and contumacious
delay of the decision on the merits will not be brooked by this Court.
WHEREFORE, the petition is GRANTED. The assailed orders are NULLIFIED and SET ASIDE, and
a new order REINSTATING Civil Case No. 97-1052 is hereby issued. No costs.
SO ORDERED.
G.R. No. L-49112 February 2, 1979
LEOVILLO C. AGUSTIN, petitioner,
vs.
HON. ROMEO F. EDU, in his capacity as Land Transportation Commissioner; HON. JUAN
PONCE ENRILE, in his capacity as Minister of National Defense; HON. ALFREDO L. JUINIO, in
his capacity as Minister Of Public Works, Transportation and Communications; and HON:
BALTAZAR AQUINO, in his capacity as Minister of Public Highways, respondents.
Leovillo C. Agustin Law Office for petitioner.
Solicitor General Estelito P. Mendoza, Assistant Solicitor General Ruben E. Agpalo and Solicitor
Amado D. Aquino for respondents.

FERNANDO, J.:
The validity of a letter of Instruction providing for an early seaming device for motor vehicles is
1

assailed in this prohibition proceeding as being violative of the constitutional guarantee of due
process and, insofar as the rules and regulations for its implementation are concerned, for
transgressing the fundamental principle of non- delegation of legislative power. The Letter of
Instruction is stigmatized by petitioner who is possessed of the requisite standing, as being arbitrary
and oppressive. A temporary restraining order as issued and respondents Romeo F. Edu, Land
Transportation Commissioner Juan Ponce Enrile, Minister of National Defense; Alfredo L. Juinio,
Minister of Public Works, Transportation and Communications; and Baltazar Aquino, Minister of
Public Highways; were to answer. That they did in a pleading submitted by Solicitor General Estelito
P. Mendoza. Impressed with a highly persuasive quality, it makes devoid clear that the imputation of
2

a constitutional infirmity is devoid of justification The Letter of Instruction on is a valid police power
measure. Nor could the implementing rules and regulations issued by respondent Edu be considered
as amounting to an exercise of legislative power. Accordingly, the petition must be dismissed.
The facts are undisputed. The assailed Letter of Instruction No. 229 of President Marcos, issued on
December 2, 1974, reads in full: "[Whereas], statistics show that one of the major causes of fatal or
serious accidents in land transportation is the presence of disabled, stalled or parked motor vehicles
along streets or highways without any appropriate early warning device to signal approaching
motorists of their presence; [Whereas], the hazards posed by such obstructions to traffic have been
recognized by international bodies concerned with traffic safety, the 1968 Vienna Convention on
Road Signs and Signals and the United Nations Organization (U.N.); [Whereas], the said Vienna
Convention which was ratified by the Philippine Government under P.D. No. 207, recommended the
enactment of local legislation for the installation of road safety signs and devices; [Now, therefore, I,
Ferdinand E. Marcos], President of the Philippines, in the interest of safety on all streets and
highways, including expressways or limited access roads, do hereby direct: 1. That all owners, users
or drivers of motor vehicles shall have at all times in their motor vehicles at least one (1) pair of early
warning device consisting of triangular, collapsible reflectorized plates in red and yellow colors at
least 15 cms. at the base and 40 cms. at the sides. 2. Whenever any motor vehicle is stalled or
disabled or is parked for thirty (30) minutes or more on any street or highway, including expressways
or limited access roads, the owner, user or driver thereof shall cause the warning device mentioned
herein to be installed at least four meters away to the front and rear of the motor vehicle staged,
disabled or parked. 3. The Land Transportation Commissioner shall cause Reflectorized Triangular
Early Warning Devices, as herein described, to be prepared and issued to registered owners of motor
vehicles, except motorcycles and trailers, charging for each piece not more than 15 % of the
acquisition cost. He shall also promulgate such rules and regulations as are appropriate to effectively
implement this order. 4. All hereby concerned shall closely coordinate and take such measures as are
necessary or appropriate to carry into effect then instruction. Thereafter, on November 15, 1976, it
3

was amended by Letter of Instruction No. 479 in this wise. "Paragraph 3 of Letter of Instruction No.
229 is hereby amended to read as follows: 3. The Land transportation Commissioner shall require
every motor vehicle owner to procure from any and present at the registration of his vehicle, one pair
of a reflectorized early warning device, as d bed of any brand or make chosen by mid motor vehicle .
The Land Transportation Commissioner shall also promulgate such rule and regulations as are
appropriate to effectively implement this order.'" There was issued accordingly, by respondent Edu,
4

the implementing rules and regulations on December 10, 1976. They were not enforced as
5

President Marcos on January 25, 1977, ordered a six-month period of suspension insofar as the
installation of early warning device as a pre-registration requirement for motor vehicle was
concerned. Then on June 30, 1978, another Letter of Instruction the lifting of such suspension and
6 7

directed the immediate implementation of Letter of Instruction No. 229 as amended. It was not until
8

August 29, 1978 that respondent Edu issued Memorandum Circular No. 32, worded thus: "In
pursuance of Letter of Instruction No. 716, dated June 30, 1978, the implementation of Letter of
Instruction No. 229, as amended by Letter of Instructions No. 479, requiring the use of Early Warning
Devices (EWD) on motor vehicle, the following rules and regulations are hereby issued: 1. LTC
Administrative Order No. 1, dated December 10, 1976; shall now be implemented provided that the
device may come from whatever source and that it shall have substantially complied with the EWD
specifications contained in Section 2 of said administrative order; 2. In order to insure that every
motor vehicle , except motorcycles, is equipped with the device, a pair of serially numbered stickers,
to be issued free of charge by this Commission, shall be attached to each EWD. The EWD. serial
number shall be indicated on the registration certificate and official receipt of payment of current
registration fees of the motor vehicle concerned. All Orders, Circulars, and Memoranda in conflict
herewith are hereby superseded, This Order shall take effect immediately. It was for immediate
9

implementation by respondent Alfredo L. Juinio, as Minister of Public Works, transportation, and


Communications. 10

Petitioner, after setting forth that he "is the owner of a Volkswagen Beetle Car, Model 13035, already
properly equipped when it came out from the assembly lines with blinking lights fore and aft, which
could very well serve as an early warning device in case of the emergencies mentioned in Letter of
Instructions No. 229, as amended, as well as the implementing rules and regulations in Administrative
Order No. 1 issued by the land transportation Commission," alleged that said Letter of Instruction
11

No. 229, as amended, "clearly violates the provisions and delegation of police power, [sic] * * *: " For
him they are "oppressive, unreasonable, arbitrary, confiscatory, nay unconstitutional and contrary to
the precepts of our compassionate New Society." He contended that they are "infected with
12

arbitrariness because it is harsh, cruel and unconscionable to the motoring public;" are "one-sided,
13

onerous and patently illegal and immoral because [they] will make manufacturers and dealers instant
millionaires at the expense of car owners who are compelled to buy a set of the so-called early
warning device at the rate of P 56.00 to P72.00 per set." are unlawful and unconstitutional and
14

contrary to the precepts of a compassionate New Society [as being] compulsory and confiscatory on
the part of the motorists who could very well provide a practical alternative road safety device, or a
better substitute to the specified set of EWD's." He therefore prayed for a judgment both the
15

assailed Letters of Instructions and Memorandum Circular void and unconstitutional and for a
restraining order in the meanwhile.
A resolution to this effect was handed down by this Court on October 19, 1978: "L-49112 (Leovillo C.
Agustin v. Hon. Romeo F. Edu, etc., et al.) — Considering the allegations contained, the issues
raised and the arguments adduced in the petition for prohibition with writ of p prohibitory and/or
mandatory injunction, the Court Resolved to (require) the respondents to file an answer thereto within
ton (10) days from notice and not to move to dismiss the petition. The Court further Resolved to
[issue] a [temporary restraining order] effective as of this date and continuing until otherwise ordered
by this Court. 16

Two motions for extension were filed by the Office of the Solicitor General and granted. Then on
November 15, 1978, he Answer for respondents was submitted. After admitting the factual allegations
and stating that they lacked knowledge or information sufficient to form a belief as to petitioner
owning a Volkswagen Beetle car," they "specifically deny the allegations and stating they lacked
knowledge or information sufficient to form a belief as to petitioner owning a Volkswagen Beetle
Car, they specifically deny the allegations in paragraphs X and XI (including its subparagraphs 1, 2,
17

3, 4) of Petition to the effect that Letter of Instruction No. 229 as amended by Letters of Instructions
Nos. 479 and 716 as well as Land transportation Commission Administrative Order No. 1 and its
Memorandum Circular No. 32 violates the constitutional provisions on due process of law, equal
protection of law and undue delegation of police power, and that the same are likewise oppressive,
arbitrary, confiscatory, one-sided, onerous, immoral unreasonable and illegal the truth being that said
allegations are without legal and factual basis and for the reasons alleged in the Special and
Affirmative Defenses of this Answer." Unlike petitioner who contented himself with a rhetorical recital
18

of his litany of grievances and merely invoked the sacramental phrases of constitutional litigation, the
Answer, in demonstrating that the assailed Letter of Instruction was a valid exercise of the police
power and implementing rules and regulations of respondent Edu not susceptible to the charge that
there was unlawful delegation of legislative power, there was in the portion captioned Special and
Affirmative Defenses, a citation of what respondents believed to be the authoritative decisions of this
Tribunal calling for application. They are Calalang v. Williams, Morfe v. Mutuc, and Edu v.
19 20

Ericta. Reference was likewise made to the 1968 Vienna Conventions of the United Nations on road
21

traffic, road signs, and signals, of which the Philippines was a signatory and which was duly
ratified. Solicitor General Mendoza took pains to refute in detail, in language calm and
22

dispassionate, the vigorous, at times intemperate, accusation of petitioner that the assailed Letter of
Instruction and the implementing rules and regulations cannot survive the test of rigorous scrutiny. To
repeat, its highly-persuasive quality cannot be denied.
This Court thus considered the petition submitted for decision, the issues being clearly joined. As
noted at the outset, it is far from meritorious and must be dismissed.
1. The Letter of Instruction in question was issued in the exercise of the police power. That is
conceded by petitioner and is the main reliance of respondents. It is the submission of the former,
however, that while embraced in such a category, it has offended against the due process and equal
protection safeguards of the Constitution, although the latter point was mentioned only in passing.
The broad and expansive scope of the police power which was originally Identified by Chief Justice
Taney of the American Supreme Court in an 1847 decision as "nothing more or less than the powers
of government inherent in every sovereignty" was stressed in the aforementioned case of Edu v.
23

Ericta thus: "Justice Laurel, in the first leading decision after the Constitution came into
force, Calalang v. Williams, Identified police power with state authority to enact legislation that may
interfere with personal liberty or property in order to promote the general welfare. Persons and
property could thus 'be subjected to all kinds of restraints and burdens in order to we the general
comfort, health and prosperity of the state.' Shortly after independence in 1948, Primicias v.
Fugoso reiterated the doctrine, such a competence being referred to as 'the power to prescribe
regulations to promote the health, morals, peace, education, good order or safety, and general
welfare of the people. The concept was set forth in negative terms by Justice Malcolm in a pre-
Commonwealth decision as 'that inherent and plenary power in the State which enables it to prohibit
all things hurtful to the comfort, safety and welfare of society. In that sense it could be hardly
distinguishable as noted by this Court in Morfe v. Mutuc with the totality of legislative power. It is in
the above sense the greatest and most powerful at. tribute of government. It is, to quote Justice
Malcolm anew, 'the most essential, insistent, and at least table powers, I extending as Justice Holmes
aptly pointed out 'to all the great public needs.' Its scope, ever-expanding to meet the exigencies of
the times, even to anticipate the future where it could be done, provides enough room for an efficient
and flexible response to conditions and circumstances thus assuring the greatest benefits. In the
language of Justice Cardozo: 'Needs that were narrow or parochial in the past may be interwoven in
the present with the well-being of the nation. What is critical or urgent changes with the time.' The
police power is thus a dynamic agency, suitably vague and far from precisely defined, rooted in the
conception that men in organizing the state and imposing upon its government limitations to
safeguard constitutional rights did not intend thereby to enable an individual citizen or a group of
citizens to obstruct unreasonably the enactment of such salutary measures calculated to communal
peace, safety, good order, and welfare." 24

2. It was thus a heavy burden to be shouldered by petitioner, compounded by the fact that the
particular police power measure challenged was clearly intended to promote public safety. It would be
a rare occurrence indeed for this Court to invalidate a legislative or executive act of that character.
None has been called to our attention, an indication of its being non-existent. The latest decision in
point, Edu v. Ericta, sustained the validity of the Reflector Law, an enactment conceived with the
25

same end in view. Calalang v. Williams found nothing objectionable in a statute, the purpose of which
was: "To promote safe transit upon, and. avoid obstruction on roads and streets designated as
national roads * * *. As a matter of fact, the first law sought to be nullified after the effectivity of the
26

1935 Constitution, the National Defense Act, with petitioner failing in his quest, was likewise
27

prompted by the imperative demands of public safety.


3. The futility of petitioner's effort to nullify both the Letter of Instruction and the implementing rules
and regulations becomes even more apparent considering his failure to lay the necessary factual
foundation to rebut the presumption of validity. So it was held in Ermita-Malate Hotel and Motel
Operators Association, Inc. v. City Mayor of Manila. The rationale was clearly set forth in an excerpt
28

from a decision of Justice Branders of the American Supreme Court, quoted in the opinion: "The
statute here questioned deals with a subject clearly within the scope of the police power. We are
asked to declare it void on the ground that the specific method of regulation prescribed is
unreasonable and hence deprives the plaintiff of due process of law. As underlying questions of fact
may condition the constitutionality of legislation of this character, the presumption of constitutionality
must prevail in the absence of some factual foundation of record in overthrowing the statute. 29

4. Nor did the Solicitor General as he very well could, rely solely on such rebutted presumption of
validity. As was pointed out in his Answer "The President certainly had in his possession the
necessary statistical information and data at the time he issued said letter of instructions, and such
factual foundation cannot be defeated by petitioner's naked assertion that early warning devices 'are
not too vital to the prevention of nighttime vehicular accidents' because allegedly only 390 or 1.5 per
cent of the supposed 26,000 motor vehicle accidents that in 1976 involved rear-end collisions (p. 12
of petition). Petitioner's statistics is not backed up by demonstrable data on record. As aptly stated by
this Honorable Court: Further: "It admits of no doubt therefore that there being a presumption of
validity, the necessity for evidence to rebut it is unavoidable, unless the statute or ordinance is void
on its face, which is not the case here"' * * *. But even as g the verity of petitioner's statistics, is that
not reason enough to require the installation of early warning devices to prevent another 390 rear-end
collisions that could mean the death of 390 or more Filipinos and the deaths that could likewise result
from head-on or frontal collisions with stalled vehicles?" It is quite manifest then that the issuance of
30

such Letter of Instruction is encased in the armor of prior, careful study by the Executive Department.
To set it aside for alleged repugnancy to the due process clause is to give sanction to conjectural
claims that exceeded even the broadest permissible limits of a pleader's well known penchant for
exaggeration.
5. The rather wild and fantastic nature of the charge of oppressiveness of this Letter of Instruction
was exposed in the Answer of the Solicitor General thus: "Such early warning device requirement is
not an expensive redundancy, nor oppressive, for car owners whose cars are already equipped with
1) blinking lights in the fore and aft of said motor vehicles,' 2) "battery-powered blinking lights inside
motor vehicles," 3) "built-in reflectorized tapes on front and rear bumpers of motor vehicles," or 4)
"well-lighted two (2) petroleum lamps (the Kinke) * * * because: Being universal among the signatory
countries to the said 1968 Vienna Conventions, and visible even under adverse conditions at a
distance of at least 400 meters, any motorist from this country or from any part of the world, who sees
a reflectorized rectangular early seaming device installed on the roads, highways or expressways, will
conclude, without thinking, that somewhere along the travelled portion of that road, highway, or
expressway, there is a motor vehicle which is stationary, stalled or disabled which obstructs or
endangers passing traffic. On the other hand, a motorist who sees any of the aforementioned other
built in warning devices or the petroleum lamps will not immediately get adequate advance warning
because he will still think what that blinking light is all about. Is it an emergency vehicle? Is it a law
enforcement car? Is it an ambulance? Such confusion or uncertainty in the mind of the motorist will
thus increase, rather than decrease, the danger of collision. 31

6. Nor did the other extravagant assertions of constitutional deficiency go unrefuted in the Answer of
the Solicitor General "There is nothing in the questioned Letter of Instruction No. 229, as amended, or
in Administrative Order No. 1, which requires or compels motor vehicle owners to purchase the early
warning device prescribed thereby. All that is required is for motor vehicle owners concerned like
petitioner, to equip their motor vehicles with a pair of this early warning device in question, procuring
or obtaining the same from whatever source. In fact, with a little of industry and practical ingenuity,
motor vehicle owners can even personally make or produce this early warning device so long as the
same substantially conforms with the specifications laid down in said letter of instruction and
administrative order. Accordingly the early warning device requirement can neither be oppressive,
onerous, immoral, nor confiscatory, much less does it make manufacturers and dealers of said
devices 'instant millionaires at the expense of car owners' as petitioner so sweepingly concludes * * *.
Petitioner's fear that with the early warning device requirement 'a more subtle racket may be
committed by those called upon to enforce it * * * is an unfounded speculation. Besides, that
unscrupulous officials may try to enforce said requirement in an unreasonable manner or to an
unreasonable degree, does not render the same illegal or immoral where, as in the instant case, the
challenged Letter of Instruction No. 229 and implementing order disclose none of the constitutional
defects alleged against it.32

7 It does appear clearly that petitioner's objection to this Letter of Instruction is not premised on lack
of power, the justification for a finding of unconstitutionality, but on the pessimistic, not to say
negative, view he entertains as to its wisdom. That approach, it put it at its mildest, is distinguished, if
that is the appropriate word, by its unorthodoxy. It bears repeating "that this Court, in the language of
Justice Laurel, 'does not pass upon questions of wisdom justice or expediency of legislation.' As
expressed by Justice Tuason: 'It is not the province of the courts to supervise legislation and keep it
within the bounds of propriety and common sense. That is primarily and exclusively a legislative
concern.' There can be no possible objection then to the observation of Justice Montemayor. 'As long
as laws do not violate any Constitutional provision, the Courts merely interpret and apply them
regardless of whether or not they are wise or salutary. For they, according to Justice Labrador, 'are
not supposed to override legitimate policy and * * * never inquire into the wisdom of the law.' It is thus
settled, to paraphrase Chief Justice Concepcion in Gonzales v. Commission on Elections, that only
congressional power or competence, not the wisdom of the action taken, may be the basis for
declaring a statute invalid. This is as it ought to be. The principle of separation of powers has in the
main wisely allocated the respective authority of each department and confined its jurisdiction to such
a sphere. There would then be intrusion not allowable under the Constitution if on a matter left to the
discretion of a coordinate branch, the judiciary would substitute its own. If there be adherence to the
rule of law, as there ought to be, the last offender should be courts of justice, to which rightly litigants
submit their controversy precisely to maintain unimpaired the supremacy of legal norms and
prescriptions. The attack on the validity of the challenged provision likewise insofar as there may be
objections, even if valid and cogent on is wisdom cannot be sustained. 33

8. The alleged infringement of the fundamental principle of non-delegation of legislative power is


equally without any support well-settled legal doctrines. Had petitioner taken the trouble to acquaint
himself with authoritative pronouncements from this Tribunal, he would not have the temerity to make
such an assertion. An exempt from the aforecited decision of Edu v. Ericta sheds light on the matter:
"To avoid the taint of unlawful delegation, there must be a standard, which implies at the very least
that the legislature itself determines matters of principle and lays down fundamental policy.
Otherwise, the charge of complete abdication may be hard to repel A standard thus defines legislative
policy, marks its maps out its boundaries and specifies the public agency to apply it. It indicates the
circumstances under which the legislative command is to be effected. It is the criterion by which
legislative purpose may be carried out. Thereafter, the executive or administrative office designated
may in pursuance of the above guidelines promulgate supplemental rules and regulations. The
standard may be either express or implied. If the former, the non-delegation objection is easily met.
The standard though does not have to be spelled out specifically. It could be implied from the policy
and purpose of the act considered as a whole. In the Reflector Law clearly, the legislative objective is
public safety. What is sought to be attained as in Calalang v. Williams is "safe transit upon the roads.'
This is to adhere to the recognition given expression by Justice Laurel in a decision announced not
too long after the Constitution came into force and effect that the principle of non-delegation "has
been made to adapt itself to the complexities of modern governments, giving rise to the adoption,
within certain limits, of the principle of "subordinate legislation" not only in the United States and
England but in practically all modern governments.' He continued: 'Accordingly, with the growing
complexity of modern life, the multiplication of the subjects of governmental regulation, and the
increased difficulty of administering the laws, there is a constantly growing tendency toward the
delegation of greater powers by the legislature and toward the approval of the practice by the courts.'
Consistency with the conceptual approach requires the reminder that what is delegated is authority
non-legislative in character, the completeness of the statute when it leaves the hands of Congress
being assumed." 34

9. The conclusion reached by this Court that this petition must be dismissed is reinforced by this
consideration. The petition itself quoted these two whereas clauses of the assailed Letter of
Instruction: "[Whereas], the hazards posed by such obstructions to traffic have been recognized by
international bodies concerned with traffic safety, the 1968 Vienna Convention on Road Signs and
Signals and the United Nations Organization (U.N.); [Whereas], the said Vionna Convention, which
was ratified by the Philippine Government under P.D. No. 207, recommended the enactment of local
legislation for the installation of road safety signs and devices; * * * " It cannot be disputed then that
35

this Declaration of Principle found in the Constitution possesses relevance: "The Philippines * * *
adopts the generally accepted principles of international law as part of the law of the land * * *." The
36

1968 Vienna Convention on Road Signs and Signals is impressed with such a character. It is not for
this country to repudiate a commitment to which it had pledged its word. The concept of Pacta sunt
servanda stands in the way of such an attitude, which is, moreover, at war with the principle of
international morality.
10. That is about all that needs be said. The rather court reference to equal protection did not even
elicit any attempt on the Part of Petitioner to substantiate in a manner clear, positive, and categorical
why such a casual observation should be taken seriously. In no case is there a more appropriate
occasion for insistence on what was referred to as "the general rule" in Santiago v. Far Eastern
Broadcasting Co., namely, "that the constitutionality of a law wig not be considered unless the point
37

is specially pleaded, insisted upon, and adequately argued." "Equal protection" is not a talismanic
38

formula at the mere invocation of which a party to a lawsuit can rightfully expect that success will
crown his efforts. The law is anything but that.
WHEREFORE, this petition is dismissed. The restraining order is lifted. This decision is immediately
executory. No costs
G.R. No. 118295 May 2, 1997
WIGBERTO E. TAÑADA and ANNA DOMINIQUE COSETENG, as members of the Philippine
Senate and as taxpayers; GREGORIO ANDOLANA and JOKER ARROYO as members of the
House of Representatives and as taxpayers; NICANOR P. PERLAS and HORACIO R.
MORALES, both as taxpayers; CIVIL LIBERTIES UNION, NATIONAL ECONOMIC
PROTECTIONISM ASSOCIATION, CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES,
LIKAS-KAYANG KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL RECONSTRUCTION
MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG PILIPINAS, INC., and
PHILIPPINE PEASANT INSTITUTE, in representation of various taxpayers and as non-
governmental organizations, petitioners,
vs.
EDGARDO ANGARA, ALBERTO ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON ALVAREZ,
AGAPITO AQUINO, RODOLFO BIAZON, NEPTALI GONZALES, ERNESTO HERRERA, JOSE
LINA, GLORIA. MACAPAGAL-ARROYO, ORLANDO MERCADO, BLAS OPLE, JOHN OSMEÑA,
SANTANINA RASUL, RAMON REVILLA, RAUL ROCO, FRANCISCO TATAD and FREDDIE
WEBB, in their respective capacities as members of the Philippine Senate who concurred in
the ratification by the President of the Philippines of the Agreement Establishing the World
Trade Organization; SALVADOR ENRIQUEZ, in his capacity as Secretary of Budget and
Management; CARIDAD VALDEHUESA, in her capacity as National Treasurer; RIZALINO
NAVARRO, in his capacity as Secretary of Trade and Industry; ROBERTO SEBASTIAN, in his
capacity as Secretary of Agriculture; ROBERTO DE OCAMPO, in his capacity as Secretary of
Finance; ROBERTO ROMULO, in his capacity as Secretary of Foreign Affairs; and TEOFISTO
T. GUINGONA, in his capacity as Executive Secretary, respondents.

PANGANIBAN, J.:
The emergence on January 1, 1995 of the World Trade Organization, abetted by the membership
thereto of the vast majority of countries has revolutionized international business and economic
relations amongst states. It has irreversibly propelled the world towards trade liberalization and
economic globalization. Liberalization, globalization, deregulation and privatization, the third-
millennium buzz words, are ushering in a new borderless world of business by sweeping away as
mere historical relics the heretofore traditional modes of promoting and protecting national economies
like tariffs, export subsidies, import quotas, quantitative restrictions, tax exemptions and currency
controls. Finding market niches and becoming the best in specific industries in a market-driven and
export-oriented global scenario are replacing age-old "beggar-thy-neighbor" policies that unilaterally
protect weak and inefficient domestic producers of goods and services. In the words of Peter Drucker,
the well-known management guru, "Increased participation in the world economy has become the key
to domestic economic growth and prosperity."
Brief Historical Background
To hasten worldwide recovery from the devastation wrought by the Second World War, plans for the
establishment of three multilateral institutions — inspired by that grand political body, the United
Nations — were discussed at Dumbarton Oaks and Bretton Woods. The first was the World Bank
(WB) which was to address the rehabilitation and reconstruction of war-ravaged and later developing
countries; the second, the International Monetary Fund (IMF) which was to deal with currency
problems; and the third, the International Trade Organization (ITO), which was to foster order and
predictability in world trade and to minimize unilateral protectionist policies that invite challenge, even
retaliation, from other states. However, for a variety of reasons, including its non-ratification by the
United States, the ITO, unlike the IMF and WB, never took off. What remained was only GATT — the
General Agreement on Tariffs and Trade. GATT was a collection of treaties governing access to the
economies of treaty adherents with no institutionalized body administering the agreements or
dependable system of dispute settlement.
After half a century and several dizzying rounds of negotiations, principally the Kennedy Round, the
Tokyo Round and the Uruguay Round, the world finally gave birth to that administering body — the
World Trade Organization — with the signing of the "Final Act" in Marrakesh, Morocco and the
ratification of the WTO Agreement by its members. 1

Like many other developing countries, the Philippines joined WTO as a founding member with the
goal, as articulated by President Fidel V. Ramos in two letters to the Senate (infra), of improving
"Philippine access to foreign markets, especially its major trading partners, through the reduction of
tariffs on its exports, particularly agricultural and industrial products." The President also saw in the
WTO the opening of "new opportunities for the services sector . . . , (the reduction of) costs and
uncertainty associated with exporting . . . , and (the attraction of) more investments into the country."
Although the Chief Executive did not expressly mention it in his letter, the Philippines — and this is of
special interest to the legal profession — will benefit from the WTO system of dispute settlement by
judicial adjudication through the independent WTO settlement bodies called (1) Dispute Settlement
Panels and (2) Appellate Tribunal. Heretofore, trade disputes were settled mainly through
negotiations where solutions were arrived at frequently on the basis of relative bargaining strengths,
and where naturally, weak and underdeveloped countries were at a disadvantage.
The Petition in Brief
Arguing mainly (1) that the WTO requires the Philippines "to place nationals and products of member-
countries on the same footing as Filipinos and local products" and (2) that the WTO "intrudes, limits
and/or impairs" the constitutional powers of both Congress and the Supreme Court, the instant
petition before this Court assails the WTO Agreement for violating the mandate of the 1987
Constitution to "develop a self-reliant and independent national economy effectively controlled by
Filipinos . . . (to) give preference to qualified Filipinos (and to) promote the preferential use of Filipino
labor, domestic materials and locally produced goods."
Simply stated, does the Philippine Constitution prohibit Philippine participation in worldwide trade
liberalization and economic globalization? Does it proscribe Philippine integration into a global
economy that is liberalized, deregulated and privatized? These are the main questions raised in this
petition for certiorari, prohibition and mandamus under Rule 65 of the Rules of Court praying (1) for
the nullification, on constitutional grounds, of the concurrence of the Philippine Senate in the
ratification by the President of the Philippines of the Agreement Establishing the World Trade
Organization (WTO Agreement, for brevity) and (2) for the prohibition of its implementation and
enforcement through the release and utilization of public funds, the assignment of public officials and
employees, as well as the use of government properties and resources by respondent-heads of
various executive offices concerned therewith. This concurrence is embodied in Senate Resolution
No. 97, dated December 14, 1994.
The Facts
On April 15, 1994, Respondent Rizalino Navarro, then Secretary of The Department of Trade and
Industry (Secretary Navarro, for brevity), representing the Government of the Republic of the
Philippines, signed in Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay
Round of Multilateral Negotiations (Final Act, for brevity).
By signing the Final Act, Secretary Navarro on behalf of the Republic of the Philippines, agreed:
2

(a) to submit, as appropriate, the WTO Agreement for the consideration of their respective
competent authorities, with a view to seeking approval of the Agreement in accordance with their
procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
On August 12, 1994, the members of the Philippine Senate received a letter dated August 11, 1994
from the President of the Philippines, stating among others that "the Uruguay Round Final Act is
3

hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the
Constitution."
On August 13, 1994, the members of the Philippine Senate received another letter from the President
of the Philippines likewise dated August 11, 1994, which stated among others that "the Uruguay
4

Round Final Act, the Agreement Establishing the World Trade Organization, the Ministerial
Declarations and Decisions, and the Understanding on Commitments in Financial Services are
hereby submitted to the Senate for its concurrence pursuant to Section 21, Article VII of the
Constitution."
On December 9, 1994, the President of the Philippines certified the necessity of the immediate
adoption of P.S. 1083, a resolution entitled "Concurring in the Ratification of the Agreement
Establishing the World Trade Organization." 5

On December 14, 1994, the Philippine Senate adopted Resolution No. 97 which "Resolved, as it is
hereby resolved, that the Senate concur, as it hereby concurs, in the ratification by the President of
the Philippines of the Agreement Establishing the World Trade Organization." The text of the WTO
6

Agreement is written on pages 137 et seq. of Volume I of the 36-volume Uruguay Round of
Multilateral Trade Negotiations and includes various agreements and associated legal instruments
(identified in the said Agreement as Annexes 1, 2 and 3 thereto and collectively referred to as
Multilateral Trade Agreements, for brevity) as follows:
ANNEX 1
Annex 1A: Multilateral Agreement on Trade in Goods
General Agreement on Tariffs and Trade 1994
Agreement on Agriculture
Agreement on the Application of Sanitary and Phytosanitary Measures
Agreement on Textiles and Clothing
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
Agreement on Implementation of Article VII of the General on Tariffs and Trade 1994
Agreement on Pre-Shipment Inspection
Agreement on Rules of Origin
Agreement on Imports Licensing Procedures
Agreement on Subsidies and Coordinating Measures
Agreement on Safeguards
Annex 1B: General Agreement on Trade in Services and Annexes
Annex 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights

ANNEX 2 Understanding on Rules and Procedures Governing the Settlement of Disputes

ANNEX 3 Trade Policy Review Mechanism

On December 16, 1994, the President of the Philippines signed the Instrument of Ratification,
7

declaring:
NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the Republic of the
Philippines, after having seen and considered the aforementioned Agreement Establishing the
World Trade Organization and the agreements and associated legal instruments included in
Annexes one (1), two (2) and three (3) of that Agreement which are integral parts thereof, signed
at Marrakesh, Morocco on 15 April 1994, do hereby ratify and confirm the same and every Article
and Clause thereof.
To emphasize, the WTO Agreement ratified by the President of the Philippines is composed of the
Agreement Proper and "the associated legal instruments included in Annexes one (1), two (2) and
three (3) of that Agreement which are integral parts thereof."
On the other hand, the Final Act signed by Secretary Navarro embodies not only the WTO Agreement
(and its integral annexes aforementioned) but also (1) the Ministerial Declarations and Decisions and
(2) the Understanding on Commitments in Financial Services. In his Memorandum dated May 13,
1996, the Solicitor General describes these two latter documents as follows:
8

The Ministerial Decisions and Declarations are twenty-five declarations and decisions on a wide
range of matters, such as measures in favor of least developed countries, notification procedures,
relationship of WTO with the International Monetary Fund (IMF), and agreements on technical
barriers to trade and on dispute settlement.
The Understanding on Commitments in Financial Services dwell on, among other things, standstill
or limitations and qualifications of commitments to existing non-conforming measures, market
access, national treatment, and definitions of non-resident supplier of financial services,
commercial presence and new financial service.
On December 29, 1994, the present petition was filed. After careful deliberation on respondents'
comment and petitioners' reply thereto, the Court resolved on December 12, 1995, to give due course
to the petition, and the parties thereafter filed their respective memoranda. The court also requested
the Honorable Lilia R. Bautista, the Philippine Ambassador to the United Nations stationed in
Geneva, Switzerland, to submit a paper, hereafter referred to as "Bautista Paper," for brevity, (1)
9

providing a historical background of and (2) summarizing the said agreements.


During the Oral Argument held on August 27, 1996, the Court directed:
(a) the petitioners to submit the (1) Senate Committee Report on the matter in controversy and (2)
the transcript of proceedings/hearings in the Senate; and
(b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine treaties signed
prior to the Philippine adherence to the WTO Agreement, which derogate from Philippine
sovereignty and (2) copies of the multi-volume WTO Agreement and other documents mentioned
in the Final Act, as soon as possible.
After receipt of the foregoing documents, the Court said it would consider the case submitted for
resolution. In a Compliance dated September 16, 1996, the Solicitor General submitted a printed
copy of the 36-volume Uruguay Round of Multilateral Trade Negotiations, and in another Compliance
dated October 24, 1996, he listed the various "bilateral or multilateral treaties or international
instruments involving derogation of Philippine sovereignty." Petitioners, on the other hand, submitted
their Compliance dated January 28, 1997, on January 30, 1997.
The Issues
In their Memorandum dated March 11, 1996, petitioners summarized the issues as follows:
A. Whether the petition presents a political question or is otherwise not justiciable.
B. Whether the petitioner members of the Senate who participated in the deliberations and voting
leading to the concurrence are estopped from impugning the validity of the Agreement
Establishing the World Trade Organization or of the validity of the concurrence.
C. Whether the provisions of the Agreement Establishing the World Trade Organization
contravene the provisions of Sec. 19, Article II, and Secs. 10 and 12, Article XII, all of the 1987
Philippine Constitution.
D. Whether provisions of the Agreement Establishing the World Trade Organization unduly limit,
restrict and impair Philippine sovereignty specifically the legislative power which, under Sec. 2,
Article VI, 1987 Philippine Constitution is "vested in the Congress of the Philippines";
E. Whether provisions of the Agreement Establishing the World Trade Organization interfere with
the exercise of judicial power.
F. Whether the respondent members of the Senate acted in grave abuse of discretion amounting
to lack or excess of jurisdiction when they voted for concurrence in the ratification of the
constitutionally-infirm Agreement Establishing the World Trade Organization.
G. Whether the respondent members of the Senate acted in grave abuse of discretion amounting
to lack or excess of jurisdiction when they concurred only in the ratification of the Agreement
Establishing the World Trade Organization, and not with the Presidential submission which
included the Final Act, Ministerial Declaration and Decisions, and the Understanding on
Commitments in Financial Services.
On the other hand, the Solicitor General as counsel for respondents "synthesized the several issues
raised by petitioners into the following":
10

1. Whether or not the provisions of the "Agreement Establishing the World Trade Organization and
the Agreements and Associated Legal Instruments included in Annexes one (1), two (2) and three
(3) of that agreement" cited by petitioners directly contravene or undermine the letter, spirit and
intent of Section 19, Article II and Sections 10 and 12, Article XII of the 1987 Constitution.
2. Whether or not certain provisions of the Agreement unduly limit, restrict or impair the exercise
of legislative power by Congress.
3. Whether or not certain provisions of the Agreement impair the exercise of judicial power by this
Honorable Court in promulgating the rules of evidence.
4. Whether or not the concurrence of the Senate "in the ratification by the President of the
Philippines of the Agreement establishing the World Trade Organization" implied rejection of the
treaty embodied in the Final Act.
By raising and arguing only four issues against the seven presented by petitioners, the Solicitor
General has effectively ignored three, namely: (1) whether the petition presents a political question or
is otherwise not justiciable; (2) whether petitioner-members of the Senate (Wigberto E. Tañada and
Anna Dominique Coseteng) are estopped from joining this suit; and (3) whether the respondent-
members of the Senate acted in grave abuse of discretion when they voted for concurrence in the
ratification of the WTO Agreement. The foregoing notwithstanding, this Court resolved to deal with
these three issues thus:
(1) The "political question" issue — being very fundamental and vital, and being a matter that probes
into the very jurisdiction of this Court to hear and decide this case — was deliberated upon by the
Court and will thus be ruled upon as the first issue;
(2) The matter of estoppel will not be taken up because this defense is waivable and the respondents
have effectively waived it by not pursuing it in any of their pleadings; in any event, this issue, even if
ruled in respondents' favor, will not cause the petition's dismissal as there are petitioners other than
the two senators, who are not vulnerable to the defense of estoppel; and
(3) The issue of alleged grave abuse of discretion on the part of the respondent senators will be taken
up as an integral part of the disposition of the four issues raised by the Solicitor General.
During its deliberations on the case, the Court noted that the respondents did not question the locus
standi of petitioners. Hence, they are also deemed to have waived the benefit of such issue. They
probably realized that grave constitutional issues, expenditures of public funds and serious
international commitments of the nation are involved here, and that transcendental public interest
requires that the substantive issues be met head on and decided on the merits, rather than skirted or
deflected by procedural matters. 11

To recapitulate, the issues that will be ruled upon shortly are:


(1) DOES THE PETITION PRESENT A JUSTICIABLE CONTROVERSY? OTHERWISE STATED,
DOES THE PETITION INVOLVE A POLITICAL QUESTION OVER WHICH THIS COURT HAS
NO JURISDICTION?
(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES
CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF THE
PHILIPPINE CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT, RESTRICT, OR
IMPAIR THE EXERCISE OF LEGISLATIVE POWER BY CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE EXERCISE OF
JUDICIAL POWER BY THIS COURT IN PROMULGATING RULES ON EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND ITS
ANNEXES SUFFICIENT AND/OR VALID, CONSIDERING THAT IT DID NOT INCLUDE THE
FINAL ACT, MINISTERIAL DECLARATIONS AND DECISIONS, AND THE UNDERSTANDING
ON COMMITMENTS IN FINANCIAL SERVICES?
The First Issue: Does the Court Have Jurisdiction Over the Controversy?
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 12

"controversy as to the application or interpretation of a constitutional provision is raised before this


Court (as in the instant case), it becomes a legal issue which the Court is bound by constitutional
mandate to decide." 13

The jurisdiction of this Court to adjudicate the matters 14


raised in the petition is clearly set out in the
1987 Constitution, as follows:
15

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.
The foregoing text emphasizes the judicial department's duty and power to strike down grave abuse
of discretion on the part of any branch or instrumentality of government including Congress. It is an
innovation in our political law. As explained by former Chief Justice Roberto Concepcion, "the
16 17

judiciary is the final arbiter on the question of 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. This is not only a judicial power but a duty to
pass judgment on matters of this nature."
As this Court has repeatedly and firmly emphasized in many cases, it will not shirk, digress from or
18

abandon its sacred duty and authority to uphold the Constitution in matters that involve grave abuse
of discretion brought before it in appropriate cases, committed by any officer, agency, instrumentality
or department of the government.
As the petition alleges grave abuse of discretion and as there is no other plain, speedy or adequate
remedy in the ordinary course of law, we have no hesitation at all in holding that this petition should
be given due course and the vital questions raised therein ruled upon under Rule 65 of the Rules of
Court. Indeed, certiorari, prohibition and mandamus are appropriate remedies to raise constitutional
issues and to review and/or prohibit/nullify, when proper, acts of legislative and executive officials. On
this, we have no equivocation.
We should stress that, in deciding to take jurisdiction over this petition, this Court will not review
the wisdom of the decision of the President and the Senate in enlisting the country into the WTO, or
pass upon the merits of trade liberalization as a policy espoused by said international body. Neither
will it rule on the propriety of the government's economic policy of reducing/removing tariffs, taxes,
subsidies, quantitative restrictions, and other import/trade barriers. Rather, it will only exercise its
constitutional duty "to determine whether or not there had been a grave abuse of discretion
amounting to lack or excess of jurisdiction" on the part of the Senate in ratifying the WTO Agreement
and its three annexes.
Second Issue: The WTO Agreementand Economic Nationalism
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the "letter, spirit and intent" of the Constitution mandating "economic
nationalism" are violated by the so-called "parity provisions" and "national treatment" clauses
scattered in various parts not only of the WTO Agreement and its annexes but also in the Ministerial
Decisions and Declarations and in the Understanding on Commitments in Financial Services.
Specifically, the "flagship" constitutional provisions referred to are Sec 19, Article II, and Secs. 10 and
12, Article XII, of the Constitution, which are worded as follows:
Article II
DECLARATION OF PRINCIPLES AND STATE POLICIES
Sec. 19. The State shall develop a self-reliant and independent national economy effectively
controlled by Filipinos.
Article XII
NATIONAL ECONOMY AND PATRIMONY
Sec. 10. . . . The Congress shall enact measures that will encourage the formation and operation
of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and patrimony,
the State shall give preference to qualified Filipinos.
Sec. 12. The State shall promote the preferential use of Filipino labor, domestic materials and
locally produced goods, and adopt measures that help make them competitive.

Petitioners aver that these sacred constitutional principles are desecrated by the following WTO
provisions quoted in their memorandum: 19

a) In the area of investment measures related to trade in goods (TRIMS, for brevity):
Article 2
National Treatment and Quantitative Restrictions.
1. Without prejudice to other rights and obligations under GATT 1994, no Member shall apply
any TRIM that is inconsistent with the provisions of Article II or Article XI of GATT 1994.
2. An illustrative list of TRIMS that are inconsistent with the obligations of general elimination of
quantitative restrictions provided for in paragraph I of Article XI of GATT 1994 is contained in
the Annex to this Agreement." (Agreement on Trade-Related Investment Measures, Vol. 27,
Uruguay Round, Legal Instruments, p. 22121, emphasis supplied).
The Annex referred to reads as follows:
ANNEX
Illustrative List
1. TRIMS that are inconsistent with the obligation of national treatment provided for in paragraph 4
of Article III of GATT 1994 include those which are mandatory or enforceable under domestic law
or under administrative rulings, or compliance with which is necessary to obtain an advantage,
and which require:
(a) the purchase or use by an enterprise of products of domestic origin or from any domestic
source, whether specified in terms of particular products, in terms of volume or value of
products, or in terms of proportion of volume or value of its local production; or
(b) that an enterprise's purchases or use of imported products be limited to an amount related
to the volume or value of local products that it exports.
2. TRIMS that are inconsistent with the obligations of general elimination of quantitative
restrictions provided for in paragraph 1 of Article XI of GATT 1994 include those which are
mandatory or enforceable under domestic laws or under administrative rulings, or compliance with
which is necessary to obtain an advantage, and which restrict:
(a) the importation by an enterprise of products used in or related to the local production that it
exports;
(b) the importation by an enterprise of products used in or related to its local production by
restricting its access to foreign exchange inflows attributable to the enterprise; or
(c) the exportation or sale for export specified in terms of particular products, in terms of
volume or value of products, or in terms of a preparation of volume or value of its local
production. (Annex to the Agreement on Trade-Related Investment Measures, Vol. 27,
Uruguay Round Legal Documents, p. 22125, emphasis supplied).
The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows:
The products of the territory of any contracting party imported into the territory of any other
contracting party shall be accorded treatment no less favorable than that accorded to like
products of national origin in respect of laws, regulations and requirements affecting their
internal sale, offering for sale, purchase, transportation, distribution or use, the provisions of
this paragraph shall not prevent the application of differential internal transportation charges
which are based exclusively on the economic operation of the means of transport and not on
the nationality of the product." (Article III, GATT 1947, as amended by the Protocol Modifying
Part II, and Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in relation to
paragraph 1(a) of the General Agreement on Tariffs and Trade 1994, Vol. 1, Uruguay Round,
Legal Instruments p. 177, emphasis supplied).
(b) In the area of trade related aspects of intellectual property rights (TRIPS, for brevity):
Each Member shall accord to the nationals of other Members treatment no less favourable
than that it accords to its own nationals with regard to the protection of intellectual property. . .
(par. 1 Article 3, Agreement on Trade-Related Aspect of Intellectual Property rights, Vol. 31,
Uruguay Round, Legal Instruments, p. 25432 (emphasis supplied)
(c) In the area of the General Agreement on Trade in Services:
National Treatment
1. In the sectors inscribed in its schedule, and subject to any conditions and qualifications set
out therein, each Member shall accord to services and service suppliers of any other Member,
in respect of all measures affecting the supply of services, treatment no less favourable than it
accords to its own like services and service suppliers.
2. A Member may meet the requirement of paragraph I by according to services and service
suppliers of any other Member, either formally suppliers of any other Member, either formally
identical treatment or formally different treatment to that it accords to its own like services and
service suppliers.
3. Formally identical or formally different treatment shall be considered to be less favourable if
it modifies the conditions of completion in favour of services or service suppliers of the Member
compared to like services or service suppliers of any other Member. (Article XVII, General
Agreement on Trade in Services, Vol. 28, Uruguay Round Legal Instruments, p. 22610
emphasis supplied).
It is petitioners' position that the foregoing "national treatment" and "parity provisions" of the WTO
Agreement "place nationals and products of member countries on the same footing as Filipinos and
local products," in contravention of the "Filipino First" policy of the Constitution. They allegedly render
meaningless the phrase "effectively controlled by Filipinos." The constitutional conflict becomes more
manifest when viewed in the context of the clear duty imposed on the Philippines as a WTO member
to ensure the conformity of its laws, regulations and administrative procedures with its obligations as
provided in the annexed agreements. Petitioners further argue that these provisions contravene
20

constitutional limitations on the role exports play in national development and negate the preferential
treatment accorded to Filipino labor, domestic materials and locally produced goods.
On the other hand, respondents through the Solicitor General counter (1) that such Charter provisions
are not self-executing and merely set out general policies; (2) that these nationalistic portions of the
Constitution invoked by petitioners should not be read in isolation but should be related to other
relevant provisions of Art. XII, particularly Secs. 1 and 13 thereof; (3) that read properly, the cited
WTO clauses do not conflict with Constitution; and (4) that the WTO Agreement contains sufficient
provisions to protect developing countries like the Philippines from the harshness of sudden trade
liberalization.
We shall now discuss and rule on these arguments.
Declaration of Principles Not Self-Executing
By its very title, Article II of the Constitution is a "declaration of principles and state policies." The
counterpart of this article in the 1935 Constitution is called the "basic political creed of the nation" by
21

Dean Vicente Sinco. These principles in Article II are not intended to be self-executing principles
22

ready for enforcement through the courts. They are used by the judiciary as aids or as guides in the
23

exercise of its power of judicial review, and by the legislature in its enactment of laws. As held in the
leading case of Kilosbayan, Incorporated vs. Morato, the principles and state policies enumerated in
24

Article II and some sections of Article XII are not "self-executing provisions, the disregard of which
can give rise to a cause of action in the courts. They do not embody judicially enforceable
constitutional rights but guidelines for legislation."
In the same light, we held in Basco vs. Pagcor that broad constitutional principles need legislative
25

enactments to implement the, thus:


On petitioners' allegation that P.D. 1869 violates Sections 11 (Personal Dignity) 12 (Family) and
13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2
(Educational Values) of Article XIV of the 1987 Constitution, suffice it to state also that these are
merely statements of principles and policies. As such, they are basically not self-executing,
meaning a law should be passed by Congress to clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing principles
ready for enforcement through the courts. They were rather directives addressed to the
executive and to the legislature. If the executive and the legislature failed to heed the directives
of the article, the available remedy was not judicial but political. The electorate could express
their displeasure with the failure of the executive and the legislature through the language of
the ballot. (Bernas, Vol. II, p. 2).
The reasons for denying a cause of action to an alleged infringement of board constitutional principles
are sourced from basic considerations of due process and the lack of judicial authority to wade "into
the uncharted ocean of social and economic policy making." Mr. Justice Florentino P. Feliciano in his
concurring opinion in Oposa vs. Factoran, Jr., explained these reasons as follows:
26

My suggestion is simply that petitioners must, before the trial court, show a more specific legal
right — a right cast in language of a significantly lower order of generality than Article II (15) of the
Constitution — that is or may be violated by the actions, or failures to act, imputed to the public
respondent by petitioners so that the trial court can validly render judgment grating all or part of
the relief prayed for. To my mind, the court should be understood as simply saying that such a
more specific legal right or rights may well exist in our corpus of law, considering the general
policy principles found in the Constitution and the existence of the Philippine Environment Code,
and that the trial court should have given petitioners an effective opportunity so to demonstrate,
instead of aborting the proceedings on a motion to dismiss.
It seems to me important that the legal right which is an essential component of a cause of action
be a specific, operable legal right, rather than a constitutional or statutory policy, for at least two
(2) reasons. One is that unless the legal right claimed to have been violated or disregarded is
given specification in operational terms, defendants may well be unable to defend themselves
intelligently and effectively; in other words, there are due process dimensions to this matter.
The second is a broader-gauge consideration — where a specific violation of law or applicable
regulation is not alleged or proved, petitioners can be expected to fall back on the expanded
conception of judicial power in the second paragraph of Section 1 of Article VIII of the Constitution
which reads:
Sec. 1. . . .
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)
When substantive standards as general as "the right to a balanced and healthy ecology" and "the
right to health" are combined with remedial standards as broad ranging as "a grave abuse of
discretion amounting to lack or excess of jurisdiction," the result will be, it is respectfully submitted,
to propel courts into the uncharted ocean of social and economic policy making. At least in respect
of the vast area of environmental protection and management, our courts have no claim to special
technical competence and experience and professional qualification. Where no specific, operable
norms and standards are shown to exist, then the policy making departments — the legislative
and executive departments — must be given a real and effective opportunity to fashion and
promulgate those norms and standards, and to implement them before the courts should
intervene.
Economic Nationalism Should Be Read with Other Constitutional Mandates to Attain Balanced
Development of Economy
On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying down general principles
relating to the national economy and patrimony, should be read and understood in relation to the
other sections in said article, especially Secs. 1 and 13 thereof which read:
Sec. 1. The goals of the national economy are a 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.
The State shall promote industrialization and full employment based on sound agricultural
development and agrarian reform, through industries that make full and efficient use of human and
natural resources, and which are competitive in both domestic and foreign markets. However, the
State shall protect Filipino enterprises against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall be
given optimum opportunity to develop. . . .
xxx xxx xxx
Sec. 13. The State shall pursue a trade policy that serves the general welfare and utilizes all forms
and arrangements of exchange on the basis of equality and reciprocity.
As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of national economic
development, as follows:
1. A more equitable distribution of opportunities, income and wealth;
2. A sustained increase in the amount of goods and services provided by the nation for the benefit of
the people; and
3. An expanding productivity as the key to raising the quality of life for all especially the
underprivileged.
With these goals in context, the Constitution then ordains the ideals of economic nationalism (1) by
expressing preference in favor of qualified Filipinos "in the grant of rights, privileges and concessions
covering the national economy and patrimony" and in the use of "Filipino labor, domestic materials
27

and locally-produced goods"; (2) by mandating the State to "adopt measures that help make them
competitive; and (3) by requiring the State to "develop a self-reliant and independent national
28

economy effectively controlled by Filipinos." In similar language, the Constitution takes into account
29

the realities of the outside world as it requires the pursuit of "a trade policy that serves the general
welfare and utilizes all forms and arrangements of exchange on the basis of equality ad
reciprocity"; and speaks of industries "which are competitive in both domestic and foreign markets"
30

as well as of the protection of "Filipino enterprises against unfair foreign competition and trade
practices."
It is true that in the recent case of Manila Prince Hotel vs. Government Service Insurance System, et
al., this Court held that "Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory,
31

positive command which is complete in itself and which needs no further guidelines or implementing
laws or rule for its enforcement. From its very words the provision does not require any legislation to
put it in operation. It is per se judicially enforceable." However, as the constitutional provision itself
states, it is enforceable only in regard to "the grants of rights, privileges and concessions covering
national economy and patrimony" and not to every aspect of trade and commerce. It refers to
exceptions rather than the rule. The issue here is not whether this paragraph of Sec. 10 of Art. XII is
self-executing or not. Rather, the issue is whether, as a rule, there are enough balancing provisions in
the Constitution to allow the Senate to ratify the Philippine concurrence in the WTO Agreement. And
we hold that there are.
All told, while the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and
enterprises, at the same time, it recognizes the need for business exchange with the rest of the world
on the bases of equality and reciprocity and limits protection of Filipino enterprises only against
foreign competition and trade practices that are unfair. In other words, the Constitution did not
32

intend to pursue an isolationist policy. It did not shut out foreign investments, goods and services in
the development of the Philippine economy. While the Constitution does not encourage the unlimited
entry of foreign goods, services and investments into the country, it does not prohibit them either. In
fact, it allows an exchange on the basis of equality and reciprocity, frowning only on foreign
competition that is unfair.
WTO Recognizes Need to Protect Weak Economies
Upon the other hand, respondents maintain that the WTO itself has some built-in advantages to
protect weak and developing economies, which comprise the vast majority of its members. Unlike in
the UN where major states have permanent seats and veto powers in the Security Council, in the
WTO, decisions are made on the basis of sovereign equality, with each member's vote equal in
weight to that of any other. There is no WTO equivalent of the UN Security Council.
WTO decides by consensus whenever possible, otherwise, decisions of the Ministerial
Conference and the General Council shall be taken by the majority of the votes cast, except in
cases of interpretation of the Agreement or waiver of the obligation of a member which would
require three fourths vote. Amendments would require two thirds vote in general. Amendments to
MFN provisions and the Amendments provision will require assent of all members. Any member
may withdraw from the Agreement upon the expiration of six months from the date of notice of
withdrawals. 33

Hence, poor countries can protect their common interests more effectively through the WTO than
through one-on-one negotiations with developed countries. Within the WTO, developing countries can
form powerful blocs to push their economic agenda more decisively than outside the Organization.
This is not merely a matter of practical alliances but a negotiating strategy rooted in law. Thus, the
basic principles underlying the WTO Agreement recognize the need of developing countries like the
Philippines to "share in the growth in international trade commensurate with the needs of their
economic development." These basic principles are found in the preamble of the WTO Agreement
34

as follows:
The Parties to this Agreement,
Recognizing that their relations in the field of trade and economic endeavour should be conducted
with a view to raising standards of living, ensuring full employment and a large and steadily
growing volume of real income and effective demand, and expanding the production of and trade
in goods and services, while allowing for the optimal use of the world's resources in accordance
with the objective of sustainable development, seeking both to protect and preserve the
environment and to enhance the means for doing so in a manner consistent with their respective
needs and concerns at different levels of economic development,
Recognizing further that there is need for positive efforts designed to ensure that developing
countries, and especially the least developed among them, secure a share in the growth in
international trade commensurate with the needs of their economic development,
Being desirous of contributing to these objectives by entering into reciprocal and mutually
advantageous arrangements directed to the substantial reduction of tariffs and other barriers to
trade and to the elimination of discriminatory treatment in international trade relations,
Resolved, therefore, to develop an integrated, more viable and durable multilateral trading system
encompassing the General Agreement on Tariffs and Trade, the results of past trade liberalization
efforts, and all of the results of the Uruguay Round of Multilateral Trade Negotiations,
Determined to preserve the basic principles and to further the objectives underlying this
multilateral trading system, . . . (emphasis supplied.)
Specific WTO Provisos Protect Developing Countries
So too, the Solicitor General points out that pursuant to and consistent with the foregoing basic
principles, the WTO Agreement grants developing countries a more lenient treatment, giving their
domestic industries some protection from the rush of foreign competition. Thus, with respect to tariffs
in general, preferential treatment is given to developing countries in terms of the amount of tariff
reduction and the period within which the reduction is to be spread out. Specifically, GATT requires
an average tariff reduction rate of 36% for developed countries to be effected within a period of six (6)
years while developing countries — including the Philippines — are required to effect an average
tariff reduction of only 24% within ten (10) years.
In respect to domestic subsidy, GATT requires developed countries to reduce domestic support to
agricultural products by 20% over six (6) years, as compared to only 13% for developing countries to
be effected within ten (10) years.
In regard to export subsidy for agricultural products, GATT requires developed countries to reduce
their budgetary outlays for export subsidy by 36% and export volumes receiving export subsidy
by 21% within a period of six (6) years. For developing countries, however, the reduction rate is
only two-thirds of that prescribed for developed countries and a longer period of ten (10) years within
which to effect such reduction.
Moreover, GATT itself has provided built-in protection from unfair foreign competition and trade
practices including anti-dumping measures, countervailing measures and safeguards against import
surges. Where local businesses are jeopardized by unfair foreign competition, the Philippines can
avail of these measures. There is hardly therefore any basis for the statement that under the WTO,
local industries and enterprises will all be wiped out and that Filipinos will be deprived of control of the
economy. Quite the contrary, the weaker situations of developing nations like the Philippines have
been taken into account; thus, there would be no basis to say that in joining the WTO, the
respondents have gravely abused their discretion. True, they have made a bold decision to steer the
ship of state into the yet uncharted sea of economic liberalization. But such decision cannot be set
aside on the ground of grave abuse of discretion, simply because we disagree with it or simply
because we believe only in other economic policies. As earlier stated, the Court in taking jurisdiction
of this case will not pass upon the advantages and disadvantages of trade liberalization as an
economic policy. It will only perform its constitutional duty of determining whether the Senate
committed grave abuse of discretion.
Constitution Does Not Rule Out Foreign Competition
Furthermore, the constitutional policy of a "self-reliant and independent national economy" does not
35

necessarily rule out the entry of foreign investments, goods and services. It contemplates neither
"economic seclusion" nor "mendicancy in the international community." As explained by Constitutional
Commissioner Bernardo Villegas, sponsor of this constitutional policy:
Economic self-reliance is a primary objective of a developing country that is keenly aware of
overdependence on external assistance for even its most basic needs. It does not mean autarky
or economic seclusion; rather, it means avoiding mendicancy in the international community.
Independence refers to the freedom from undue foreign control of the national economy,
especially in such strategic industries as in the development of natural resources and public
utilities.
36

The WTO reliance on "most favored nation," "national treatment," and "trade without discrimination"
cannot be struck down as unconstitutional as in fact they are rules of equality and reciprocity that
apply to all WTO members. Aside from envisioning a trade policy based on "equality and
reciprocity," the fundamental law encourages industries that are "competitive in both domestic and
37

foreign markets," thereby demonstrating a clear policy against a sheltered domestic trade
environment, but one in favor of the gradual development of robust industries that can compete with
the best in the foreign markets. Indeed, Filipino managers and Filipino enterprises have shown
capability and tenacity to compete internationally. And given a free trade environment, Filipino
entrepreneurs and managers in Hongkong have demonstrated the Filipino capacity to grow and to
prosper against the best offered under a policy of laissez faire.
Constitution Favors Consumers, Not Industries or Enterprises
The Constitution has not really shown any unbalanced bias in favor of any business or enterprise, nor
does it contain any specific pronouncement that Filipino companies should be pampered with a total
proscription of foreign competition. On the other hand, respondents claim that WTO/GATT aims to
make available to the Filipino consumer the best goods and services obtainable anywhere in the
world at the most reasonable prices. Consequently, the question boils down to whether WTO/GATT
will favor the general welfare of the public at large.
Will adherence to the WTO treaty bring this ideal (of favoring the general welfare) to reality?
Will WTO/GATT succeed in promoting the Filipinos' general welfare because it will — as promised by
its promoters — expand the country's exports and generate more employment?
Will it bring more prosperity, employment, purchasing power and quality products at the most
reasonable rates to the Filipino public?
The responses to these questions involve "judgment calls" by our policy makers, for which they are
answerable to our people during appropriate electoral exercises. Such questions and the answers
thereto are not subject to judicial pronouncements based on grave abuse of discretion.
Constitution Designed to Meet Future Events and Contingencies
No doubt, the WTO Agreement was not yet in existence when the Constitution was drafted and
ratified in 1987. That does not mean however that the Charter is necessarily flawed in the sense that
its framers might not have anticipated the advent of a borderless world of business. By the same
token, the United Nations was not yet in existence when the 1935 Constitution became effective. Did
that necessarily mean that the then Constitution might not have contemplated a diminution of the
absoluteness of sovereignty when the Philippines signed the UN Charter, thereby effectively
surrendering part of its control over its foreign relations to the decisions of various UN organs like the
Security Council?
It is not difficult to answer this question. Constitutions are designed to meet not only the vagaries of
contemporary events. They should be interpreted to cover even future and unknown circumstances. It
is to the credit of its drafters that a Constitution can withstand the assaults of bigots and infidels but at
the same time bend with the refreshing winds of change necessitated by unfolding events. As one
eminent political law writer and respected jurist explains:
38

The Constitution must be quintessential rather than superficial, the root and not the blossom, the
base and frame-work only of the edifice that is yet to rise. It is but the core of the dream that must
take shape, not in a twinkling by mandate of our delegates, but slowly "in the crucible of Filipino
minds and hearts," where it will in time develop its sinews and gradually gather its strength and
finally achieve its substance. In fine, the Constitution cannot, like the goddess Athena, rise full-
grown from the brow of the Constitutional Convention, nor can it conjure by mere fiat an instant
Utopia. It must grow with the society it seeks to re-structure and march apace with the progress of
the race, drawing from the vicissitudes of history the dynamism and vitality that will keep it, far
from becoming a petrified rule, a pulsing, living law attuned to the heartbeat of the nation.
Third Issue: The WTO Agreement and Legislative Power
The WTO Agreement provides that "(e)ach Member shall ensure the conformity of its laws,
regulations and administrative procedures with its obligations as provided in the annexed
Agreements." Petitioners maintain that this undertaking "unduly limits, restricts and impairs
39

Philippine sovereignty, specifically the legislative power which under Sec. 2, Article VI of the 1987
Philippine Constitution is vested in the Congress of the Philippines. It is an assault on the sovereign
powers of the Philippines because this means that Congress could not pass legislation that will be
good for our national interest and general welfare if such legislation will not conform with the WTO
Agreement, which not only relates to the trade in goods . . . but also to the flow of investments and
money . . . as well as to a whole slew of agreements on socio-cultural matters . . . 40

More specifically, petitioners claim that said WTO proviso derogates from the power to tax, which is
lodged in the Congress. And while the Constitution allows Congress to authorize the President to fix
41

tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts, such
authority is subject to "specified limits and . . . such limitations and restrictions" as Congress may
provide, as in fact it did under Sec. 401 of the Tariff and Customs Code.
42

Sovereignty Limited by International Law and Treaties


This Court notes and appreciates the ferocity and passion by which petitioners stressed their
arguments on this issue. However, while sovereignty has traditionally been deemed absolute and all-
encompassing on the domestic level, it is however subject to restrictions and limitations voluntarily
agreed to by the Philippines, expressly or impliedly, as a member of the family of nations.
Unquestionably, the Constitution did not envision a hermit-type isolation of the country from the rest
of the world. In its Declaration of Principles and State Policies, the Constitution "adopts the generally
accepted principles of international law as part of the law of the land, and adheres to the policy of
peace, equality, justice, freedom, cooperation and amity, with all nations." By the doctrine of
43

incorporation, the country is bound by generally accepted principles of international law, which are
considered to be automatically part of our own laws. One of the oldest and most fundamental rules
44

in international law is pacta sunt servanda — international agreements must be performed in good
faith. "A treaty engagement is not a mere moral obligation but creates a legally binding obligation on
the parties . . . A state which has contracted valid international obligations is bound to make in its
legislations such modifications as may be necessary to ensure the fulfillment of the obligations
undertaken." 45

By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their
voluntary act, nations may surrender some aspects of their state power in exchange for greater
benefits granted by or derived from a convention or pact. After all, states, like individuals, live with
coequals, and in pursuit of mutually covenanted objectives and benefits, they also commonly agree to
limit the exercise of their otherwise absolute rights. Thus, treaties have been used to record
agreements between States concerning such widely diverse matters as, for example, the lease of
naval bases, the sale or cession of territory, the termination of war, the regulation of conduct of
hostilities, the formation of alliances, the regulation of commercial relations, the settling of claims, the
laying down of rules governing conduct in peace and the establishment of international
organizations. The sovereignty of a state therefore cannot in fact and in reality be considered
46

absolute. Certain restrictions enter into the picture: (1) limitations imposed by the very nature of
membership in the family of nations and (2) limitations imposed by treaty stipulations. As aptly put by
John F. Kennedy, "Today, no nation can build its destiny alone. The age of self-sufficient nationalism
is over. The age of interdependence is here." 47

UN Charter and Other Treaties Limit Sovereignty


Thus, when the Philippines joined the United Nations as one of its 51 charter members, it consented
to restrict its sovereign rights under the "concept of sovereignty as auto-limitation." -A Under Article 2
47

of the UN Charter, "(a)ll members shall give the United Nations every assistance in any action it takes
in accordance with the present Charter, and shall refrain from giving assistance to any state against
which the United Nations is taking preventive or enforcement action." Such assistance includes
payment of its corresponding share not merely in administrative expenses but also in expenditures for
the peace-keeping operations of the organization. In its advisory opinion of July 20, 1961, the
International Court of Justice held that money used by the United Nations Emergency Force in the
Middle East and in the Congo were "expenses of the United Nations" under Article 17, paragraph 2,
of the UN Charter. Hence, all its members must bear their corresponding share in such expenses. In
this sense, the Philippine Congress is restricted in its power to appropriate. It is compelled to
appropriate funds whether it agrees with such peace-keeping expenses or not. So too, under Article
105 of the said Charter, the UN and its representatives enjoy diplomatic privileges and immunities,
thereby limiting again the exercise of sovereignty of members within their own territory. Another
example: although "sovereign equality" and "domestic jurisdiction" of all members are set forth as
underlying principles in the UN Charter, such provisos are however subject to enforcement measures
decided by the Security Council for the maintenance of international peace and security under
Chapter VII of the Charter. A final example: under Article 103, "(i)n the event of a conflict between the
obligations of the Members of the United Nations under the present Charter and their obligations
under any other international agreement, their obligation under the present charter shall prevail," thus
unquestionably denying the Philippines — as a member — the sovereign power to make a choice as
to which of conflicting obligations, if any, to honor.
Apart from the UN Treaty, the Philippines has entered into many other international pacts — both
bilateral and multilateral — that involve limitations on Philippine sovereignty. These are enumerated
by the Solicitor General in his Compliance dated October 24, 1996, as follows:
(a) Bilateral convention with the United States regarding taxes on income, where the Philippines
agreed, among others, to exempt from tax, income received in the Philippines by, among others,
the Federal Reserve Bank of the United States, the Export/Import Bank of the United States, the
Overseas Private Investment Corporation of the United States. Likewise, in said convention,
wages, salaries and similar remunerations paid by the United States to its citizens for labor and
personal services performed by them as employees or officials of the United States are exempt
from income tax by the Philippines.
(b) Bilateral agreement with Belgium, providing, among others, for the avoidance of double
taxation with respect to taxes on income.
(c) Bilateral convention with the Kingdom of Sweden for the avoidance of double taxation.
(d) Bilateral convention with the French Republic for the avoidance of double taxation.
(e) Bilateral air transport agreement with Korea where the Philippines agreed to exempt from all
customs duties, inspection fees and other duties or taxes aircrafts of South Korea and the regular
equipment, spare parts and supplies arriving with said aircrafts.
(f) Bilateral air service agreement with Japan, where the Philippines agreed to exempt from
customs duties, excise taxes, inspection fees and other similar duties, taxes or charges fuel,
lubricating oils, spare parts, regular equipment, stores on board Japanese aircrafts while on
Philippine soil.
(g) Bilateral air service agreement with Belgium where the Philippines granted Belgian air carriers
the same privileges as those granted to Japanese and Korean air carriers under separate air
service agreements.
(h) Bilateral notes with Israel for the abolition of transit and visitor visas where the Philippines
exempted Israeli nationals from the requirement of obtaining transit or visitor visas for a sojourn in
the Philippines not exceeding 59 days.
(i) Bilateral agreement with France exempting French nationals from the requirement of obtaining
transit and visitor visa for a sojourn not exceeding 59 days.
(j) Multilateral Convention on Special Missions, where the Philippines agreed that premises of
Special Missions in the Philippines are inviolable and its agents can not enter said premises
without consent of the Head of Mission concerned. Special Missions are also exempted from
customs duties, taxes and related charges.
(k) Multilateral convention on the Law of Treaties. In this convention, the Philippines agreed to be
governed by the Vienna Convention on the Law of Treaties.
(l) Declaration of the President of the Philippines accepting compulsory jurisdiction of the
International Court of Justice. The International Court of Justice has jurisdiction in all legal
disputes concerning the interpretation of a treaty, any question of international law, the existence
of any fact which, if established, would constitute a breach "of international obligation."
In the foregoing treaties, the Philippines has effectively agreed to limit the exercise of its sovereign
powers of taxation, eminent domain and police power. The underlying consideration in this partial
surrender of sovereignty is the reciprocal commitment of the other contracting states in granting the
same privilege and immunities to the Philippines, its officials and its citizens. The same reciprocity
characterizes the Philippine commitments under WTO-GATT.
International treaties, whether relating to nuclear disarmament, human rights, the environment, the
law of the sea, or trade, constrain domestic political sovereignty through the assumption of
external obligations. But unless anarchy in international relations is preferred as an alternative, in
most cases we accept that the benefits of the reciprocal obligations involved outweigh the costs
associated with any loss of political sovereignty. (T)rade treaties that structure relations by
reference to durable, well-defined substantive norms and objective dispute resolution procedures
reduce the risks of larger countries exploiting raw economic power to bully smaller countries, by
subjecting power relations to some form of legal ordering. In addition, smaller countries typically
stand to gain disproportionately from trade liberalization. This is due to the simple fact that
liberalization will provide access to a larger set of potential new trading relationship than in case of
the larger country gaining enhanced success to the smaller country's market. 48

The point is that, as shown by the foregoing treaties, a portion of sovereignty may be waived without
violating the Constitution, based on the rationale that the Philippines "adopts the generally accepted
principles of international law as part of the law of the land and adheres to the policy of . . .
cooperation and amity with all nations."
Fourth Issue: The WTO Agreement and Judicial Power
Petitioners aver that paragraph 1, Article 34 of the General Provisions and Basic Principles of the
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) intrudes on the power
49

of the Supreme Court to promulgate rules concerning pleading, practice and procedures. 50

To understand the scope and meaning of Article 34, TRIPS, 51


it will be fruitful to restate its full text as
follows:
Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings in respect of the infringement of the rights of the owner
referred to in paragraph 1 (b) of Article 28, if the subject matter of a patent is a process for
obtaining a product, the judicial authorities shall have the authority to order the defendant to prove
that the process to obtain an identical product is different from the patented process. Therefore,
Members shall provide, in at least one of the following circumstances, that any identical product
when produced without the consent of the patent owner shall, in the absence of proof to the
contrary, be deemed to have been obtained by the patented process:
(a) if the product obtained by the patented process is new;
(b) if there is a substantial likelihood that the identical product was made by the process and
the owner of the patent has been unable through reasonable efforts to determine the process
actually used.
2. Any Member shall be free to provide that the burden of proof indicated in paragraph 1 shall be
on the alleged infringer only if the condition referred to in subparagraph (a) is fulfilled or only if the
condition referred to in subparagraph (b) is fulfilled.
3. In the adduction of proof to the contrary, the legitimate interests of defendants in protecting their
manufacturing and business secrets shall be taken into account.
From the above, a WTO Member is required to provide a rule of disputable (not the words "in the
absence of proof to the contrary") presumption that a product shown to be identical to one produced
with the use of a patented process shall be deemed to have been obtained by the (illegal) use of the
said patented process, (1) where such product obtained by the patented product is new, or (2) where
there is "substantial likelihood" that the identical product was made with the use of the said patented
process but the owner of the patent could not determine the exact process used in obtaining such
identical product. Hence, the "burden of proof" contemplated by Article 34 should actually be
understood as the duty of the alleged patent infringer to overthrow such presumption. Such burden,
properly understood, actually refers to the "burden of evidence" (burden of going forward) placed on
the producer of the identical (or fake) product to show that his product was produced without the use
of the patented process.
The foregoing notwithstanding, the patent owner still has the "burden of proof" since, regardless of
the presumption provided under paragraph 1 of Article 34, such owner still has to introduce evidence
of the existence of the alleged identical product, the fact that it is "identical" to the genuine one
produced by the patented process and the fact of "newness" of the genuine product or the fact of
"substantial likelihood" that the identical product was made by the patented process.
The foregoing should really present no problem in changing the rules of evidence as the present law
on the subject, Republic Act No. 165, as amended, otherwise known as the Patent Law, provides a
similar presumption in cases of infringement of patented design or utility model, thus:
Sec. 60. Infringement. — Infringement of a design patent or of a patent for utility model shall
consist in unauthorized copying of the patented design or utility model for the purpose of trade or
industry in the article or product and in the making, using or selling of the article or product
copying the patented design or utility model. Identity or substantial identity with the patented
design or utility model shall constitute evidence of copying. (emphasis supplied)
Moreover, it should be noted that the requirement of Article 34 to provide a disputable presumption
applies only if (1) the product obtained by the patented process in NEW or (2) there is a substantial
likelihood that the identical product was made by the process and the process owner has not been
able through reasonable effort to determine the process used. Where either of these two provisos
does not obtain, members shall be free to determine the appropriate method of implementing the
provisions of TRIPS within their own internal systems and processes.
By and large, the arguments adduced in connection with our disposition of the third issue —
derogation of legislative power — will apply to this fourth issue also. Suffice it to say that the
reciprocity clause more than justifies such intrusion, if any actually exists. Besides, Article 34 does not
contain an unreasonable burden, consistent as it is with due process and the concept of adversarial
dispute settlement inherent in our judicial system.
So too, since the Philippine is a signatory to most international conventions on patents, trademarks
and copyrights, the adjustment in legislation and rules of procedure will not be substantial. 52

Fifth Issue: Concurrence Only in the WTO Agreement and Not in Other Documents Contained in the
Final Act
Petitioners allege that the Senate concurrence in the WTO Agreement and its annexes — but not in
the other documents referred to in the Final Act, namely the Ministerial Declaration and Decisions and
the Understanding on Commitments in Financial Services — is defective and insufficient and thus
constitutes abuse of discretion. They submit that such concurrence in the WTO Agreement alone is
flawed because it is in effect a rejection of the Final Act, which in turn was the document signed by
Secretary Navarro, in representation of the Republic upon authority of the President. They contend
that the second letter of the President to the Senate which enumerated what constitutes the Final
53

Act should have been the subject of concurrence of the Senate.


"A final act, sometimes called protocol de cloture, is an instrument which records the winding up of
the proceedings of a diplomatic conference and usually includes a reproduction of the texts of
treaties, conventions, recommendations and other acts agreed upon and signed by the
plenipotentiaries attending the conference." It is not the treaty itself. It is rather a summary of the
54

proceedings of a protracted conference which may have taken place over several years. The text of
the "Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations" is
contained in just one page in Vol. I of the 36-volume Uruguay Round of Multilateral Trade
55

Negotiations. By signing said Final Act, Secretary Navarro as representative of the Republic of the
Philippines undertook:
(a) to submit, as appropriate, the WTO Agreement for the consideration of their
respective competent authorities with a view to seeking approval of the Agreement in
accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
The assailed Senate Resolution No. 97 expressed concurrence in exactly what the Final Act required
from its signatories, namely, concurrence of the Senate in the WTO Agreement.
The Ministerial Declarations and Decisions were deemed adopted without need for ratification. They
were approved by the ministers by virtue of Article XXV: 1 of GATT which provides that
representatives of the members can meet "to give effect to those provisions of this Agreement which
invoke joint action, and generally with a view to facilitating the operation and furthering the objectives
of this Agreement." 56

The Understanding on Commitments in Financial Services also approved in Marrakesh does not
apply to the Philippines. It applies only to those 27 Members which "have indicated in their respective
schedules of commitments on standstill, elimination of monopoly, expansion of operation of existing
financial service suppliers, temporary entry of personnel, free transfer and processing of information,
and national treatment with respect to access to payment, clearing systems and refinancing available
in the normal course of business." 57

On the other hand, the WTO Agreement itself expresses what multilateral agreements are deemed
included as its integral parts, as follows:
58

Article II
Scope of the WTO
1. The WTO shall provide the common institutional frame-work for the conduct of trade relations
among its Members in matters to the agreements and associated legal instruments included in the
Annexes to this Agreement.
2. The Agreements and associated legal instruments included in Annexes 1, 2, and 3, (hereinafter
referred to as "Multilateral Agreements") are integral parts of this Agreement, binding on all
Members.
3. The Agreements and associated legal instruments included in Annex 4 (hereinafter referred to
as "Plurilateral Trade Agreements") are also part of this Agreement for those Members that have
accepted them, and are binding on those Members. The Plurilateral Trade Agreements do not
create either obligation or rights for Members that have not accepted them.
4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A (hereinafter
referred to as "GATT 1994") is legally distinct from the General Agreement on Tariffs and Trade,
dated 30 October 1947, annexed to the Final Act adopted at the conclusion of the Second
Session of the Preparatory Committee of the United Nations Conference on Trade and
Employment, as subsequently rectified, amended or modified (hereinafter referred to as "GATT
1947").
It should be added that the Senate was well-aware of what it was concurring in as shown by the
members' deliberation on August 25, 1994. After reading the letter of President Ramos dated August
11, 1994, the59
senators
of the Republic minutely dissected what the Senate was concurring in, as follows: 60

THE CHAIRMAN: Yes. Now, the question of the validity of the submission came up in the first day
hearing of this Committee yesterday. Was the observation made by Senator Tañada that what
was submitted to the Senate was not the agreement on establishing the World Trade Organization
by the final act of the Uruguay Round which is not the same as the agreement establishing the
World Trade Organization? And on that basis, Senator Tolentino raised a point of order which,
however, he agreed to withdraw upon understanding that his suggestion for an alternative solution
at that time was acceptable. That suggestion was to treat the proceedings of the Committee as
being in the nature of briefings for Senators until the question of the submission could be clarified.
And so, Secretary Romulo, in effect, is the President submitting a new . . . is he making a new
submission which improves on the clarity of the first submission?
MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be no
misunderstanding, it was his intention to clarify all matters by giving this letter.
THE CHAIRMAN: Thank you.
Can this Committee hear from Senator Tañada and later on Senator Tolentino since they were the
ones that raised this question yesterday?
Senator Tañada, please.
SEN. TAÑADA: Thank you, Mr. Chairman.
Based on what Secretary Romulo has read, it would now clearly appear that what is being
submitted to the Senate for ratification is not the Final Act of the Uruguay Round, but rather the
Agreement on the World Trade Organization as well as the Ministerial Declarations and Decisions,
and the Understanding and Commitments in Financial Services.
I am now satisfied with the wording of the new submission of President Ramos.
SEN. TAÑADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tañada. Can we hear from Senator Tolentino? And after
him Senator Neptali Gonzales and Senator Lina.
SEN. TOLENTINO, Mr. Chairman, I have not seen the new submission actually transmitted to us
but I saw the draft of his earlier, and I think it now complies with the provisions of the Constitution,
and with the Final Act itself . The Constitution does not require us to ratify the Final Act. It requires
us to ratify the Agreement which is now being submitted. The Final Act itself specifies what is
going to be submitted to with the governments of the participants.
In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives agree: (a) to submit as appropriate the WTO
Agreement for the consideration of the respective competent authorities with a view to seeking
approval of the Agreement in accordance with their procedures.
In other words, it is not the Final Act that was agreed to be submitted to the governments for
ratification or acceptance as whatever their constitutional procedures may provide but it is the
World Trade Organization Agreement. And if that is the one that is being submitted now, I think it
satisfies both the Constitution and the Final Act itself .
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of record. And
they had been adequately reflected in the journal of yesterday's session and I don't see any need
for repeating the same.
Now, I would consider the new submission as an act ex abudante cautela.
THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to make any
comment on this?
SEN. LINA. Mr. President, I agree with the observation just made by Senator Gonzales out of the
abundance of question. Then the new submission is, I believe, stating the obvious and therefore I
have no further comment to make.
Epilogue
In praying for the nullification of the Philippine ratification of the WTO Agreement, petitioners are
invoking this Court's constitutionally imposed duty "to determine whether or not there has been grave
abuse of discretion amounting to lack or excess of jurisdiction" on the part of the Senate in giving its
concurrence therein via Senate Resolution No. 97. Procedurally, a writ of certiorari grounded on
grave abuse of discretion may be issued by the Court under Rule 65 of the Rules of Court when it is
amply shown that petitioners have no other plain, speedy and adequate remedy in the ordinary
course of law.
By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction. Mere abuse of discretion is not enough. It must be grave abuse of
61

discretion as when the power is exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, and must be so patent and so gross as to amount to an evasion of a positive duty
or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. Failure on
62

the part of the petitioner to show grave abuse of discretion will result in the dismissal of the petition.
63

In rendering this Decision, this Court never forgets that the Senate, whose act is under review, is one
of two sovereign houses of Congress and is thus entitled to great respect in its actions. It is itself a
constitutional body independent and coordinate, and thus its actions are presumed regular and done
in good faith. Unless convincing proof and persuasive arguments are presented to overthrow such
presumptions, this Court will resolve every doubt in its favor. Using the foregoing well-accepted
definition of grave abuse of discretion and the presumption of regularity in the Senate's processes,
this Court cannot find any cogent reason to impute grave abuse of discretion to the Senate's exercise
of its power of concurrence in the WTO Agreement granted it by Sec. 21 of Article VII of the
Constitution.64

It is true, as alleged by petitioners, that broad constitutional principles require the State to develop an
independent national economy effectively controlled by Filipinos; and to protect and/or prefer Filipino
labor, products, domestic materials and locally produced goods. But it is equally true that such
principles — while serving as judicial and legislative guides — are not in themselves sources of
causes of action. Moreover, there are other equally fundamental constitutional principles relied upon
by the Senate which mandate the pursuit of a "trade policy that serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality and reciprocity" and the
promotion of industries "which are competitive in both domestic and foreign markets," thereby
justifying its acceptance of said treaty. So too, the alleged impairment of sovereignty in the exercise
of legislative and judicial powers is balanced by the adoption of the generally accepted principles of
international law as part of the law of the land and the adherence of the Constitution to the policy of
cooperation and amity with all nations.
That the Senate, after deliberation and voting, voluntarily and overwhelmingly gave its consent to the
WTO Agreement thereby making it "a part of the law of the land" is a legitimate exercise of its
sovereign duty and power. We find no "patent and gross" arbitrariness or despotism "by reason of
passion or personal hostility" in such exercise. It is not impossible to surmise that this Court, or at
least some of its members, may even agree with petitioners that it is more advantageous to the
national interest to strike down Senate Resolution No. 97. But that is not a legal reason to attribute
grave abuse of discretion to the Senate and to nullify its decision. To do so would constitute grave
abuse in the exercise of our own judicial power and duty. Ineludably, what the Senate did was a valid
exercise of its authority. As to whether such exercise was wise, beneficial or viable is outside the
realm of judicial inquiry and review. That is a matter between the elected policy makers and the
people. As to whether the nation should join the worldwide march toward trade liberalization and
economic globalization is a matter that our people should determine in electing their policy makers.
After all, the WTO Agreement allows withdrawal of membership, should this be the political desire of
a member.
The eminent futurist John Naisbitt, author of the best seller Megatrends, predicts an Asian
Renaissance where "the East will become the dominant region of the world economically, politically
65

and culturally in the next century." He refers to the "free market" espoused by WTO as the "catalyst"
in this coming Asian ascendancy. There are at present about 31 countries including China, Russia
and Saudi Arabia negotiating for membership in the WTO. Notwithstanding objections against
possible limitations on national sovereignty, the WTO remains as the only viable structure for
multilateral trading and the veritable forum for the development of international trade law. The
alternative to WTO is isolation, stagnation, if not economic self-destruction. Duly enriched with
original membership, keenly aware of the advantages and disadvantages of globalization with its on-
line experience, and endowed with a vision of the future, the Philippines now straddles the crossroads
of an international strategy for economic prosperity and stability in the new millennium. Let the
people, through their duly authorized elected officers, make their free choice.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED