G.R. No. 112399 July 14, 1995REPRESENTATIVE AMADO S. BAGATSING VSCOMMITTEE ON PRIVATIZATIONFACTS OF THE CASE
PETRON was originally registered with the Securitiesand Exchange Commission (SEC) in 1966 under thecorporate name "Esso Philippines, Inc." .ESSO becamea wholly-owned company of the government under thecorporate name PETRON and as a subsidiary of PNOC.PETRON owns the largest, most modern complexrefinery in the Philippines. It is listed as the No. 1corporation in terms of assets and income in thePhilippines in 1993.President Corazon C. Aquino promulgated ProclamationNo. 50 in the exercise of her legislative power underthe Freedom Constitution. Implicit in the Proclamationis the need to raise revenue for the Government andthe ideal of leaving business to the private sector bycreating the committee on privatization. TheGovernment can then concentrate on the delivery of basic services and the performance e of vital publicfunctions. The Presidential Cabinet of President Ramos approvedthe privatization of PETRON as part of the EnergySector Action Plan. PNOC Board of Directors passed aresolution authorizing the company to negotiate andconclude a contract with the consortium of SalomonBrothers of Hongkong Limited and PCI CapitalCorporation for financial advisory services to berendered to PETRON. The Petron Privatization WorkingCommittee (PWC) was thus formed. It finalized aprivatization strategy with 40% of the shares to be soldto a strategic partner and 20% to the general public The President approved the 40% — 40% — 20%privatization strategy of PETRON. The invitation to bid was published in severalnewspapers of general circulation, both local andforeign. The PNOC Board of Directors then passedResolution No. 866, S. 1993, declaring ARAMCO thewinning bidder. PNOC and ARAMCO signed the StockPurchase Agreement, the two companies signed theShareholders' Agreement. The petition for prohibition in G.R. No. 112399 sought:(1) to nullify the bidding conducted for the sale of ablock of shares constituting 40% of the capital stock(40% block) of Petron Corporation (PETRON) and theaward made to Aramco Overseas Company, B.
.(ARAMCO) as the highest bidder and (2) to stop thesale of said block of shares to ARAMCO. The petition forprohibition and
in G.R. No. 115994 sought toannul the sale of the same block of Petron sharessubject of the petition in G.R. No. 112399.ARAMCO entered a limited appearance to question the jurisdiction over its person, alleging that it is a foreigncompany organized under the laws of the Netherlands,that it is not doing nor licensed to do business in thePhilippines, and that it does not maintain an office or abusiness address in and has not appointed a residentagent for the Philippines (
, p. 240).Petitioners however, countered that they filed theaction in their capacity as members of Congress.
WON Petitioners have a locus standi
Petition is dismissed.
Philippine Constitution Association
Hon. Salvador Enriquez
, G.R. No. 113105, August 19, 1994, we heldthat the members of Congress have the legal standingto question the validity of acts of the Executive whichinjures them in their person or the institution of Congress to which they belong. In the latter case, theacts cause derivative but nonetheless substantialinjury which can be questioned by members of Congress (Kennedy
. James, 412 F. Supp. 353 ).In the absence of a claim that the contract in questionviolated the rights of petitioners or impermissiblyintruded into the domain of the Legislature, petitionershave no legal standing to institute the instant action intheir capacity as members of Congress.However, petitioners can bring the action in theircapacity as taxpayers under the doctrine laid downin
, 232 SCRA 110 (1994).Under said ruling, taxpayers may question contractsentered into by the national government orgovernment-owned or controlled corporations allegedto be in contravention of the law. As long as the rulingin
is not reversed, we haveno choice but to follow it and uphold the legal standingof petitioners as taxpayers to institute the presentaction.
The only requirement under R.A. No. 7181 in order toprivatize a strategic industry like PETRON is theapproval of the President. In the case of PETRON'sprivatization, the President gave his approval not onlyonce but twice.PETRON's privatization is also in line with and is part of the Philippine Energy Program under R.A. No. 7638.Section 5(b) of the law provides that the PhilippineEnergy Program shall include a policy direction towardsthe privatization of government agencies related toenergy.
On the claim that there was a failed bidding,petitioners contend that there were only three bidders.One of them, PETRONAS, submitted a bid lower thanthe floor price while a second, failed to pre-qualify.