CONSTITUTIONAL LAW CASE DIGEST COMPILATION

Article 1 (National Territory)

1) Magallona v. Ermita

FACTS: RA 3046 was passed in 1961 which provides among others the demarcation
lines of the baselines of the Philippines as an archipelago. This is in consonance with
UNCLOS I.

RA 5446 amended RA 3046 in terms of typographical errors and included Section 2

in which the government reserved the drawing of baselines in Sabah in North
Borneo.

RA 9522 took effect on March 2009 amending RA 5446. The amendments, which are
in compliance with UNCLOS III in which the Philippines is one of the signatory,
shortening one baseline while optimizing the other and classifying Kalayaan Group
of Island and Scarborough Shoal as Regimes of Island.

Petitioners in their capacity as taxpayer, citizen and legislator assailed the

constitutionality of RA 9522:- it reduces the territory of the Philippines in violation to
the Constitution and it opens the country to maritime passage of vessels and
aircrafts of other states to the detriment of the economy, sovereignty, national
security and of the Constitution as well. They added that the classification of
Regime of Islands would be prejudicial to the lives of the fishermen.

ISSUE(S):

1. WON the petitioners have locus standi to bring the suit; and
2. WON RA 9522 is unconstitutional

RULING:

Petition is dismissed.

1st Issue:
The SC ruled the suit is not a taxpayer or legislator, but as a citizen suit, since it is
the citizens who will be directly injured and benefitted in affording relief over the
remedy sought.

2nd Issue:
The SC upheld the constitutionality of RA 9522.

First, RA 9522 did not delineate the territory the Philippines but is merely a statutory
tool to demarcate the country’s maritime zone and continental shelf under UNCLOS
III. SC emphasized that UNCLOS III is not a mode of acquiring or losing a territory as
provided under the laws of nations. UNCLOS III is a multi-lateral treaty that is a
result of a long-time negotiation to establish a uniform sea-use rights over maritime
zones (i.e., the territorial waters [12 nautical miles from the baselines], contiguous
zone [24 nautical miles from the baselines], exclusive economic zone [200 nautical
miles from the baselines]), and continental shelves. In order to measure said
distances, it is a must for the state parties to have their archipelagic doctrines
measured in accordance to the treaty—the role played by RA 9522. The contention
of the petitioner that RA 9522 resulted to the loss of 15,000 square nautical miles is
devoid of merit. The truth is, RA 9522, by optimizing the location of base points,
increased the Philippines total maritime space of 145,216 square nautical miles.

Second, the classification of KGI and Scarborough Shoal as Regime of Islands is

consistent with the Philippines’ sovereignty. Had RA 9522 enclosed the islands as
part of the archipelago, the country will be violating UNCLOS III since it categorically
stated that the length of the baseline shall not exceed 125 nautical miles. So what
the legislators did is to carefully analyze the situation: the country, for decades, had
been claiming sovereignty over KGI and Scarborough Shoal on one hand and on the
other hand they had to consider that these are located at non-appreciable distance
from the nearest shoreline of the Philippine archipelago. So, the classification is in
accordance with the Philippines sovereignty and State’s responsible observance of
its pacta sunt servanda obligation under UNCLOS III.

Third, the new base line introduced by RA 9522 is without prejudice with delineation
of the baselines of the territorial sea around the territory of Sabah, situated in North
Borneo, over which the Republic of the Philippines has acquired dominion and
sovereignty.

And lastly, the UNCLOS III and RA 9522 are not incompatible with the Constitution’s
delineation of internal waters. Petitioners contend that RA 9522 transformed the
internal waters of the Philippines to archipelagic waters hence subjecting these
waters to the right of innocent and sea lanes passages, exposing the Philippine
internal waters to nuclear and maritime pollution hazards. The Court emphasized
that the Philippines exercises sovereignty over the body of water lying landward of
the baselines, including the air space over it and the submarine areas underneath,
regardless whether internal or archipelagic waters. However, sovereignty will not
bar the Philippines to comply with its obligation in maintaining freedom of
navigation and the generally accepted principles of international law. It can be
either passed by legislator as a municipal law or in the absence thereof, it is
deemed incorporated in the Philippines law since the right of innocent passage is a
customary international law, thus automatically incorporated thereto.

This does not mean that the states are placed in a lesser footing; it just signifies
concession of archipelagic states in exchange for their right to claim all waters
inside the baseline. In fact, the demarcation of the baselines enables the Philippines
to delimit its exclusive economic zone, reserving solely to the Philippines the
exploitation of all living and non-living resources within such zone. Such a maritime
delineation binds the international community since the delineation is in strict
observance of UNCLOS III. If the maritime delineation is contrary to UNCLOS III, the
international community will of course reject it and will refuse to be bound by it.

The Court expressed that it is within the Congress who has the prerogative to
determine the passing of a law and not the Court. Moreover, such enactment was
necessary in order to comply with the UNCLOS III; otherwise, it shall backfire on the
Philippines for its territory shall be open to seafaring powers to freely enter and
exploit the resources in the waters and submarine areas around our archipelago and
it will weaken the country’s case in any international dispute over Philippine
maritime space.

The enactment of UNCLOS III compliant baselines law for the Philippine archipelago
and adjacent areas, as embodied in RA 9522, allows an internationally-recognized
delimitation of the breadth of the Philippines’ maritime zones and continental shelf.
RA 9522 is therefore a most vital step on the part of the Philippines in safeguarding
its maritime zones, consistent with the Constitution and our national interest

Article 2, Section 1 (Government)

2) Funa v, MECO

FACTS:.
- The Philippines subscribes to the “One China Policy” of the Communist
People’s Republic of China (PROC) under the Joint Communique between RP
and PROC.
- The Philippines ended its diplomatic relations with the government of Taiwan
(nationalist Republic of China ) on June 9 1975.
- Despite this the Philippines and Taiwan maintained an unofficial relationship
facilitated by the Taipei Economic and Cultural Office for Taiwan and the
MANILA ECONOMIC AND CULTURAL OFFICE(MECO) for the Philippines
- MECO was organized on Dec 16 1997 as a non-stock non-profit corporation.
from then on MECO became the corporate entity entrusted by the Philipine
Government with maintaining the friendly and unofficial relations with the
People of Taiwan.
- In order to carry out its functions, MECO was authorized by the Government
to perform certain consular and other functions that relate to the promotion,
protection and facilitation of Philippine interests in Taiwan
o At present, MEco oversees the rights and interests of OFWs in Taiwan,
promotes the Philippines as a tourist and investment destination for
the Taiwanese and facilitates travel of Filipinos and Taiwanese from
Taiwan to the Philippines and vice versa.
- Dennis AB Funa wrote to COA requesting for the latest financial and audit
report of MECO. HE invoked his constitutional right to information on matters
of public concern. He believed that MECO was under the supervision of DTI
and is a GOCC thus subject to the audit jurisdiction of COA.
- COA asst. Commissioner Naranjo issued a memorandum which stated that
MECO is not among the agencies audited by any of the three clusters of the
Corporate Government Sector.
- This prompted Funa to file this mandamus petition in his capacity as
"taxpayer, concerned citizen, a member of the Philippine Bar and law book
author” he alleged that COA neglected its duty under Sec. 2(1) Art IX-D of the
Constitution. He claimed that MECO was a GOCC or at least a government
instrumentality whose funds partake the nature of public funds.
- To support his argument he presented the following points
o It is a non-stock corporation vested with governmental functions
relating to public needs
 o It is controlled by the government thru a board of directors appointed
by the Philippine President
o It is under the operational and policy supervision of DTI
- He also compared MECO with the American Institute in Taiwan. AIT is
supposedly audited by the US Comptroller General.
- MECO: prayed for the dismissal of the mandamus petition on procedural and
substantial grounds.
o Procedural: prematurely filed. Funa never demanded for COA to make
an audit. The only action he took was to request for a copy of the
financial and audit report of MECO. This request was not finally
disposed of by the time the petition was filed
o Substantial: MECO is not a GOCC. The “desire letter” of the President
sends to MECO is merely recommendatory and not binding on the
corporation (in relation to the election of the Board of MECO). In the
end the members are the ones who elect the directors and these
directors are private individuals and not government officials. MECO
also argued that the government merely has a policy supervision over
it. The government merely sees to it that the activities of MECO are in
tune with the One China Policy under the PROC. The day-to-day
operations of MECO are still under the control of the Board.
o It also argued that for MECO to be considered a GOCC would be a
violation of the One China Policy of the PROC
- COA: wanted the petition to be dismissed on procedural grounds and that the
issue is already moot
o Procedural: lacks locus standi Funa wasn’t shown to have been
aggrieved or prejudiced by COA’s failure to Audit MECO. Also, that the
case violated the doctrine of hierarchy of Courts. Funa failed to justify a
direct petition to SC
o Moot: COA Chair already sent a team to Taiwan to audit MECO and
other government agencies based there.
o Although the COA concedes that MECO is within its jurisdiction, it
maintains that MECO is not a GOCC nor is it a Government
instrumentality, instead MECO is a non-governmental entity.
 MECO may still be audited with respect to Verification Fees.
These fees are what MECO collects from Taiwanese employers. A
portion of these fees are remitted to DOLE. ‘Under Sec 26 of PD
1445 or the STATE AUDIT CODE OF THE PHILIPPINES, MECO is a
non-governmental entity required to pay government share and
is subject to partial audit

ISSUES & RATIO.

Whether MECO is a Governmental entity and is subject to the audit
jurisdiction of COA.
MECO is not a GOCC nor is it a Governmental entity, however, certain
transactions of MECO are subject to the audit jurisdiction of COA
(verification fees and consular fees)

Procedural issues:
Mootness: the issue is not moot. Despite the existence of supervening events( the
eventual auditing done by COA in Taiwan), the issue is within the exceptions of rule
on dismissal of moot cases.
-The issue deals with a supposed grave violation of the constitution ( Funa
alleged that COA neglected to audit MECO),
-that the issue is of paramount public interest (the failure of COA to audit
MECO if it was supposed to audit MECO shows that COA failed to fulfill its
duties as guardian of the public treasury AND the status of MECO has a direct
bearing on the country’s commitment to the One China Policy)
-and that it is susceptible to repetition (COA suddenly decided to audit MECO,
unless the issue is decided, the successor of the current COA chair might
decide to not auditing MECO)

Standing: the instant petition raises issues of transcendental importance

Principle of Hierarchy of Courts: transcendental importance of the issues raised in

the mandamus petition, hence the court waives this procedural issue

MAIN ISSUE

Jurisdiction of COA
Under SEC 2(1) ART IX-D of the constitution, COA was vested with the power,
authority and duty to examine, audit and settle the accounts(revenue," "receipts,"
"expenditures" and "uses of funds and property") of the following entitites:
- Government , or any of its subdivisions, agencies and instrumentalities
- GOCCs with original charters
- GOCCs without original charters
- Constitutional bodies, commissions and offices that have been granted fiscal
autonomy under the Constitution and
- Non-governmental entities receiving subsidy or equity, directly or indirectly
from or through the government, which are required by law or the granting
institution to submit to the COA for audit as a condition of subsidy or equity.

Complementing the constitutional power of the COA to audit accounts of "non-

governmental entities receiving subsidy or equity xxx from or through the
government" is Section 29(1)80 of the Audit Code, which grants the COA visitorial
authority over the following non-governmental entities:
1. Non-governmental entities "subsidized by the government";
2. Non-governmental entities "required to pay levy or government share";
3. Non-governmental entities that have "received counterpart funds from the
government"; and
4. Non-governmental entities "partly funded by donations through the government."

The Administrative Code also empowers the COA to examine and audit "the books,
records and accounts" of public utilities "in connection with the fixing of rates of
every nature, or in relation to the proceedings of the proper regulatory agencies, for
purposes of determining franchise tax."

SC: MECO is not a GOCC or Governmental Instrumentality

Government instrumentalities are agencies of the national government that, by
reason of some "special function or jurisdiction" they perform or exercise, are
allotted "operational autonomy" and are "not integrated within the department
framework. They include:
1.regulatory agencies; 2.chartered institutions; 3.government corporate entities or
government instrumentalities with corporate powers (GCE/GICP); and 4. GOCCs

GOCCs: "stock or non-stock" corporations "vested with functions relating to public

needs" that are "owned by the Government directly or through its
instrumentalities."

By definition, three attributes thus make an entity a GOCC: first, its

organization as stock or non-stock corporation; second, the public
character of its function; and third, government ownership over the same.
Possession of all three attributes is necessary to deem an entity a GOCC

MECO is a non-stock corporation based on the records and based on the

fact that its earnings are not distributed as dividends to its members

MECO performs functions with a Public Aspect. MECO was "authorized"

by the Philippine government to perform certain "consular and other
functions" relating to the promotion, protection and facilitation of Philippine
interests in Taiwan. The functions of the MECO are of the kind that would
otherwise be performed by the Philippines’ own diplomatic and consular
organs, if not only for the government’s acquiescence that they instead be
exercised by the MECO.

The MECO Is Not Owned or Controlled by the Government. The "desire

letters" that the President transmits are merely recommendatory and not
binding on it. Under its by-laws, the election of its directors are done by the
members themselves, its officers are elected by the directors and members
are admitted through a unanimous board resolution. None of the
incorporators of MECO were government officials and up to this day, none of
the members, directors or officers are government appointees or public
officers designated by reason of their office.

SC: it is a sui generis entity

Since MECO is not a GOCC, it cannot also be either of the other government
instrumentalities primarily because these instrumentalities are creatures of law
(meaning an actual law was passed for their creation) while MECO was incorporated
under the Corporation code.

The reason behind it being under the supervision of the DTI is because its functions
may result in it engaged in dealings or activities that can directly contradict the
Philippines’ commitment to the One China Policy. This scenario can be avoided if
theExecutive exercises some sort of supervision over it. But this aspect was not
questioned by the petitioner, so this was deemed irrelevant to the issue by the SC.

Certain accounts may be audited by the COA

MECO should be subjected to the auditing of COA as regards its collection of
verification and consular fees.
Pertinent is the provision of the Administrative Code, Section 14(1), Book V thereof,
which authorizes the COA to audit accounts of non–governmental entities “required
to pay xxx or have government share” but only with respect to “funds xxx coming
from or through the government.” The said fees collected by MECO are receivables
of DOLE.

As to the verification fees("service fee for the verification of overseas

employment contracts, recruitment agreement or special powers of attorney"):
Under Section 7 of EO No. 1022, DOLE has the authority to collect verification fees.
But it entered into a series of MoA with MECO authorizing the latter to collect such
fees since the PH does not have an official post in Taiwan.

As to the consular fees: The authority behind “consular fees” is Section 2(6) of
EO No. 15, s. 2001. The said section authorizes the MECO to collect “reasonable
fees” for its performance of consular functions. Evidently, and just like the
peculiarity that attends the DOLE “verification fees,” there is no consular office for
the collection of the “consular fees.” Thus, the authority for the MECO to collect the
“reasonable fees,” vested unto it by the executive order (EO No. 15, s. 2001)

Update of PCA Judgment

3) Permanent Court of Arbitration, South China Sea (SCS) Dispute

Between Philippines and People`s Republic of China