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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R No. 187167

August 16, 2011

PROF. MERLIN M. MAGALLONA, AKBAYAN PARTY-LIST REP. RISA HONTIVEROS, PROF.
HARRY C. ROQUE, JR., AND UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW
STUDENTS, ALITHEA BARBARA ACAS, VOLTAIRE ALFERES, CZARINA MAY ALTEZ,
FRANCIS ALVIN ASILO, SHERYL BALOT, RUBY AMOR BARRACA, JOSE JAVIER BAUTISTA,
ROMINA BERNARDO, VALERIE PAGASA BUENAVENTURA, EDAN MARRI CAÑETE, VANN
ALLEN DELA CRUZ, RENE DELORINO, PAULYN MAY DUMAN, SHARON ESCOTO, RODRIGO
FAJARDO III, GIRLIE FERRER, RAOULLE OSEN FERRER, CARLA REGINA GREPO, ANNA
MARIE CECILIA GO, IRISH KAY KALAW, MARY ANN JOY LEE, MARIA LUISA MANALAYSAY,
MIGUEL RAFAEL MUSNGI, MICHAEL OCAMPO, JAKLYN HANNA PINEDA, WILLIAM
RAGAMAT, MARICAR RAMOS, ENRIK FORT REVILLAS, JAMES MARK TERRY RIDON,
JOHANN FRANTZ RIVERA IV, CHRISTIAN RIVERO, DIANNE MARIE ROA, NICHOLAS
SANTIZO, MELISSA CHRISTINA SANTOS, CRISTINE MAE TABING, VANESSA ANNE TORNO,
MARIA ESTER VANGUARDIA, and MARCELINO VELOSO III, Petitioners,
vs.
HON. EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE SECRETARY, HON. ALBERTO
ROMULO, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF FOREIGN AFFAIRS,
HON. ROLANDO ANDAYA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF
BUDGET AND MANAGEMENT, HON. DIONY VENTURA, IN HIS CAPACITY AS
ADMINISTRATOR OF THE NATIONAL MAPPING & RESOURCE INFORMATION AUTHORITY,
and HON. HILARIO DAVIDE, JR., IN HIS CAPACITY AS REPRESENTATIVE OF THE
PERMANENT MISSION OF THE REPUBLIC OF THE PHILIPPINES TO THE UNITED
NATIONS,Respondents.
DECISION
CARPIO, J.:
The Case
This original action for the writs of certiorari and prohibition assails the constitutionality of Republic
Act No. 95221(RA 9522) adjusting the country’s archipelagic baselines and classifying the baseline
regime of nearby territories.
The Antecedents
In 1961, Congress passed Republic Act No. 3046 (RA 3046) 2 demarcating the maritime baselines of
the Philippines as an archipelagic State.3 This law followed the framing of the Convention on the
Territorial Sea and the Contiguous Zone in 1958 (UNCLOS I),4 codifying, among others, the
sovereign right of States parties over their "territorial sea," the breadth of which, however, was left
undetermined. Attempts to fill this void during the second round of negotiations in Geneva in 1960
(UNCLOS II) proved futile. Thus, domestically, RA 3046 remained unchanged for nearly five

decades, save for legislation passed in 1968 (Republic Act No. 5446 [RA 5446]) correcting
typographical errors and reserving the drawing of baselines around Sabah in North Borneo.
In March 2009, Congress amended RA 3046 by enacting RA 9522, the statute now under scrutiny.
The change was prompted by the need to make RA 3046 compliant with the terms of the United
Nations Convention on the Law of the Sea (UNCLOS III),5 which the Philippines ratified on 27
February 1984.6 Among others, UNCLOS III prescribes the water-land ratio, length, and contour of
baselines of archipelagic States like the Philippines7 and sets the deadline for the filing of application
for the extended continental shelf.8 Complying with these requirements, RA 9522 shortened one
baseline, optimized the location of some basepoints around the Philippine archipelago and classified
adjacent territories, namely, the Kalayaan Island Group (KIG) and the Scarborough Shoal, as
"regimes of islands" whose islands generate their own applicable maritime zones.
Petitioners, professors of law, law students and a legislator, in their respective capacities as
"citizens, taxpayers or x x x legislators,"9 as the case may be, assail the constitutionality of RA 9522
on two principal grounds, namely: (1) RA 9522 reduces Philippine maritime territory, and logically,
the reach of the Philippine state’s sovereign power, in violation of Article 1 of the 1987
Constitution,10 embodying the terms of the Treaty of Paris11 and ancillary treaties,12 and (2) RA 9522
opens the country’s waters landward of the baselines to maritime passage by all vessels and
aircrafts, undermining Philippine sovereignty and national security, contravening the country’s
nuclear-free policy, and damaging marine resources, in violation of relevant constitutional
provisions.13
In addition, petitioners contend that RA 9522’s treatment of the KIG as "regime of islands" not only
results in the loss of a large maritime area but also prejudices the livelihood of subsistence
fishermen.14 To buttress their argument of territorial diminution, petitioners facially attack RA 9522 for
what it excluded and included – its failure to reference either the Treaty of Paris or Sabah and its use
of UNCLOS III’s framework of regime of islands to determine the maritime zones of the KIG and the
Scarborough Shoal.
Commenting on the petition, respondent officials raised threshold issues questioning (1) the
petition’s compliance with the case or controversy requirement for judicial review grounded on
petitioners’ alleged lack of locus standiand (2) the propriety of the writs of certiorari and prohibition to
assail the constitutionality of RA 9522. On the merits, respondents defended RA 9522 as the
country’s compliance with the terms of UNCLOS III, preserving Philippine territory over the KIG or
Scarborough Shoal. Respondents add that RA 9522 does not undermine the country’s security,
environment and economic interests or relinquish the Philippines’ claim over Sabah.
Respondents also question the normative force, under international law, of petitioners’ assertion that
what Spain ceded to the United States under the Treaty of Paris were the islands and all the
waters found within the boundaries of the rectangular area drawn under the Treaty of Paris.
We left unacted petitioners’ prayer for an injunctive writ.
The Issues
The petition raises the following issues:
1. Preliminarily –
1. Whether petitioners possess locus standi to bring this suit; and

2. Whether the writs of certiorari and prohibition are the proper remedies to assail the
constitutionality of RA 9522.
2. On the merits, whether RA 9522 is unconstitutional.
The Ruling of the Court
On the threshold issues, we hold that (1) petitioners possess locus standi to bring this suit as
citizens and (2) the writs of certiorari and prohibition are proper remedies to test the constitutionality
of RA 9522. On the merits, we find no basis to declare RA 9522 unconstitutional.
On the Threshold Issues
Petitioners Possess Locus
Standi as Citizens
Petitioners themselves undermine their assertion of locus standi as legislators and taxpayers
because the petition alleges neither infringement of legislative prerogative 15 nor misuse of public
funds,16 occasioned by the passage and implementation of RA 9522. Nonetheless, we recognize
petitioners’ locus standi as citizens with constitutionally sufficient interest in the resolution of the
merits of the case which undoubtedly raises issues of national significance necessitating urgent
resolution. Indeed, owing to the peculiar nature of RA 9522, it is understandably difficult to find other
litigants possessing "a more direct and specific interest" to bring the suit, thus satisfying one of the
requirements for granting citizenship standing.17
The Writs of Certiorari and Prohibition
Are Proper Remedies to Test
the Constitutionality of Statutes
In praying for the dismissal of the petition on preliminary grounds, respondents seek a strict
observance of the offices of the writs of certiorari and prohibition, noting that the writs cannot issue
absent any showing of grave abuse of discretion in the exercise of judicial, quasi-judicial or
ministerial powers on the part of respondents and resulting prejudice on the part of petitioners. 18
Respondents’ submission holds true in ordinary civil proceedings. When this Court exercises its
constitutional power of judicial review, however, we have, by tradition, viewed the writs of certiorari
and prohibition as proper remedial vehicles to test the constitutionality of statutes, 19 and indeed, of
acts of other branches of government.20 Issues of constitutional import are sometimes crafted out of
statutes which, while having no bearing on the personal interests of the petitioners, carry such
relevance in the life of this nation that the Court inevitably finds itself constrained to take cognizance
of the case and pass upon the issues raised, non-compliance with the letter of procedural rules
notwithstanding. The statute sought to be reviewed here is one such law.
RA 9522 is Not Unconstitutional
RA 9522 is a Statutory Tool
to Demarcate the Country’s
Maritime Zones and Continental
Shelf Under UNCLOS III, not to
Delineate Philippine Territory
Petitioners submit that RA 9522 "dismembers a large portion of the national territory" 21 because it
discards the pre-UNCLOS III demarcation of Philippine territory under the Treaty of Paris and related

treaties, successively encoded in the definition of national territory under the 1935, 1973 and 1987
Constitutions. Petitioners theorize that this constitutional definition trumps any treaty or statutory
provision denying the Philippines sovereign control over waters, beyond the territorial sea
recognized at the time of the Treaty of Paris, that Spain supposedly ceded to the United States.
Petitioners argue that from the Treaty of Paris’ technical description, Philippine sovereignty over
territorial waters extends hundreds of nautical miles around the Philippine archipelago, embracing
the rectangular area delineated in the Treaty of Paris.22
Petitioners’ theory fails to persuade us.
UNCLOS III has nothing to do with the acquisition (or loss) of territory. It is a multilateral treaty
regulating, among others, 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 that UNCLOS III
delimits.23 UNCLOS III was the culmination of decades-long negotiations among United Nations
members to codify norms regulating the conduct of States in the world’s oceans and submarine
areas, recognizing coastal and archipelagic States’ graduated authority over a limited span of waters
and submarine lands along their coasts.
On the other hand, baselines laws such as RA 9522 are enacted by UNCLOS III States parties to
mark-out specific basepoints along their coasts from which baselines are drawn, either straight or
contoured, to serve as geographic starting points to measure the breadth of the maritime zones and
continental shelf. Article 48 of UNCLOS III on archipelagic States like ours could not be any clearer:
Article 48. Measurement of the breadth of the territorial sea, the contiguous zone, the exclusive
economic zone and the continental shelf. – The breadth of the territorial sea, the contiguous zone,
the exclusive economic zone and the continental shelf shall be measured from archipelagic
baselines drawn in accordance with article 47. (Emphasis supplied)
Thus, baselines laws are nothing but statutory mechanisms for UNCLOS III States parties to delimit
with precision the extent of their maritime zones and continental shelves. In turn, this gives notice to
the rest of the international community of the scope of the maritime space and submarine areas
within which States parties exercise treaty-based rights, namely, the exercise of sovereignty over
territorial waters (Article 2), the jurisdiction to enforce customs, fiscal, immigration, and sanitation
laws in the contiguous zone (Article 33), and the right to exploit the living and non-living resources in
the exclusive economic zone (Article 56) and continental shelf (Article 77).
Even under petitioners’ theory that the Philippine territory embraces the islands and all the
waters within the rectangular area delimited in the Treaty of Paris, the baselines of the Philippines
would still have to be drawn in accordance with RA 9522 because this is the only way to draw the
baselines in conformity with UNCLOS III. The baselines cannot be drawn from the boundaries or
other portions of the rectangular area delineated in the Treaty of Paris, but from the "outermost
islands and drying reefs of the archipelago."24
UNCLOS III and its ancillary baselines laws play no role in the acquisition, enlargement or, as
petitioners claim, diminution of territory. Under traditional international law typology, States acquire
(or conversely, lose) territory through occupation, accretion, cession and prescription, 25 not by
executing multilateral treaties on the regulations of sea-use rights or enacting statutes to comply with
the treaty’s terms to delimit maritime zones and continental shelves. Territorial claims to land
features are outside UNCLOS III, and are instead governed by the rules on general international
law.26

RA 9522’s Use of the Framework
of Regime of Islands to Determine the
Maritime Zones of the KIG and the
Scarborough Shoal, not Inconsistent
with the Philippines’ Claim of Sovereignty
Over these Areas
Petitioners next submit that RA 9522’s use of UNCLOS III’s regime of islands framework to draw the
baselines, and to measure the breadth of the applicable maritime zones of the KIG, "weakens our
territorial claim" over that area.27 Petitioners add that the KIG’s (and Scarborough Shoal’s) exclusion
from the Philippine archipelagic baselines results in the loss of "about 15,000 square nautical miles
of territorial waters," prejudicing the livelihood of subsistence fishermen. 28 A comparison of the
configuration of the baselines drawn under RA 3046 and RA 9522 and the extent of maritime space
encompassed by each law, coupled with a reading of the text of RA 9522 and its congressional
deliberations, vis-à-vis the Philippines’ obligations under UNCLOS III, belie this view.
1avvphi1

The configuration of the baselines drawn under RA 3046 and RA 9522 shows that RA 9522 merely
followed the basepoints mapped by RA 3046, save for at least nine basepoints that RA 9522 skipped
to optimize the location of basepoints and adjust the length of one baseline (and thus comply with
UNCLOS III’s limitation on the maximum length of baselines). Under RA 3046, as under RA 9522,
the KIG and the Scarborough Shoal lie outside of the baselines drawn around the Philippine
archipelago. This undeniable cartographic fact takes the wind out of petitioners’ argument branding
RA 9522 as a statutory renunciation of the Philippines’ claim over the KIG, assuming that baselines
are relevant for this purpose.
Petitioners’ assertion of loss of "about 15,000 square nautical miles of territorial waters" under RA
9522 is similarly unfounded both in fact and law. On the contrary, RA 9522, by optimizing the location
of basepoints, increasedthe Philippines’ total maritime space (covering its internal waters, territorial
sea and exclusive economic zone) by 145,216 square nautical miles, as shown in the table below: 29

Extent of maritime
area using RA 3046,
as amended, taking
into account the
Treaty of Paris’
delimitation (in
square nautical
miles)

Extent of maritime
area using RA 9522,
taking into account
UNCLOS III (in
square nautical
miles)

Internal or
archipelagic
waters

166,858

171,435

Territorial Sea

274,136

32,106

Exclusive
Economic Zone
TOTAL

382,669
440,994

586,210

Thus, as the map below shows, the reach of the exclusive economic zone drawn under RA 9522
even extends way beyond the waters covered by the rectangular demarcation under the Treaty of
Paris. Of course, where there are overlapping exclusive economic zones of opposite or adjacent
States, there will have to be a delineation of maritime boundaries in accordance with UNCLOS III. 30

Further, petitioners’ argument that the KIG now lies outside Philippine territory because the baselines
that RA 9522 draws do not enclose the KIG is negated by RA 9522 itself. Section 2 of the law
commits to text the Philippines’ continued claim of sovereignty and jurisdiction over the KIG and the
Scarborough Shoal:
SEC. 2. The baselines in the following areas over which the Philippines likewise exercises
sovereignty and jurisdiction shall be determined as "Regime of Islands" under the Republic of the
Philippines consistent with Article 121 of the United Nations Convention on the Law of the Sea
(UNCLOS):

a) The Kalayaan Island Group as constituted under Presidential Decree No. 1596 and
b) Bajo de Masinloc, also known as Scarborough Shoal. (Emphasis supplied)
Had Congress in RA 9522 enclosed the KIG and the Scarborough Shoal as part of the Philippine
archipelago, adverse legal effects would have ensued. The Philippines would have committed a
breach of two provisions of UNCLOS III. First, Article 47 (3) of UNCLOS III requires that "[t]he
drawing of such baselines shall not depart to any appreciable extent from the general configuration
of the archipelago." Second, Article 47 (2) of UNCLOS III requires that "the length of the baselines
shall not exceed 100 nautical miles," save for three per cent (3%) of the total number of baselines
which can reach up to 125 nautical miles.31
Although the Philippines has consistently claimed sovereignty over the KIG 32 and the Scarborough
Shoal for several decades, these outlying areas are located at an appreciable distance from the
nearest shoreline of the Philippine archipelago,33 such that any straight baseline loped around them
from the nearest basepoint will inevitably "depart to an appreciable extent from the general
configuration of the archipelago."
The principal sponsor of RA 9522 in the Senate, Senator Miriam Defensor-Santiago, took pains to
emphasize the foregoing during the Senate deliberations:
What we call the Kalayaan Island Group or what the rest of the world call[] the Spratlys and the
Scarborough Shoal are outside our archipelagic baseline because if we put them inside our
baselines we might be accused of violating the provision of international law which states: "The
drawing of such baseline shall not depart to any appreciable extent from the general configuration of
the archipelago." So sa loob ng ating baseline, dapat magkalapit ang mga islands. Dahil malayo ang
Scarborough Shoal, hindi natin masasabing malapit sila sa atin although we are still allowed by
international law to claim them as our own.
This is called contested islands outside our configuration. We see that our archipelago is defined by
the orange line which [we] call[] archipelagic baseline. Ngayon, tingnan ninyo ang maliit na circle
doon sa itaas, that is Scarborough Shoal, itong malaking circle sa ibaba, that is Kalayaan Group or
the Spratlys. Malayo na sila sa ating archipelago kaya kung ilihis pa natin ang dating archipelagic
baselines para lamang masama itong dalawang circles, hindi na sila magkalapit at baka hindi na
tatanggapin ng United Nations because of the rule that it should follow the natural configuration of
the archipelago.34 (Emphasis supplied)
Similarly, the length of one baseline that RA 3046 drew exceeded UNCLOS III’s limits. The need to
shorten this baseline, and in addition, to optimize the location of basepoints using current maps,
became imperative as discussed by respondents:
1avvphi1

[T]he amendment of the baselines law was necessary to enable the Philippines to draw the outer
limits of its maritime zones including the extended continental shelf in the manner provided by Article
47 of [UNCLOS III]. As defined by R.A. 3046, as amended by R.A. 5446, the baselines suffer from
some technical deficiencies, to wit:
1. The length of the baseline across Moro Gulf (from Middle of 3 Rock Awash to Tongquil
Point) is 140.06 nautical miles x x x. This exceeds the maximum length allowed under Article
47(2) of the [UNCLOS III], which states that "The length of such baselines shall not exceed
100 nautical miles, except that up to 3 per cent of the total number of baselines enclosing
any archipelago may exceed that length, up to a maximum length of 125 nautical miles."

2. The selection of basepoints is not optimal. At least 9 basepoints can be skipped or deleted
from the baselines system. This will enclose an additional 2,195 nautical miles of water.
3. Finally, the basepoints were drawn from maps existing in 1968, and not established by
geodetic survey methods. Accordingly, some of the points, particularly along the west coasts
of Luzon down to Palawan were later found to be located either inland or on water, not on
low-water line and drying reefs as prescribed by Article 47. 35
Hence, far from surrendering the Philippines’ claim over the KIG and the Scarborough Shoal,
Congress’ decision to classify the KIG and the Scarborough Shoal as "‘Regime[s] of Islands’ under
the Republic of the Philippines consistent with Article 121" 36 of UNCLOS III manifests the Philippine
State’s responsible observance of its pacta sunt servanda obligation under UNCLOS III. Under
Article 121 of UNCLOS III, any "naturally formed area of land, surrounded by water, which is above
water at high tide," such as portions of the KIG, qualifies under the category of "regime of islands,"
whose islands generate their own applicable maritime zones.37
Statutory Claim Over Sabah under
RA 5446 Retained
Petitioners’ argument for the invalidity of RA 9522 for its failure to textualize the Philippines’ claim
over Sabah in North Borneo is also untenable. Section 2 of RA 5446, which RA 9522 did not repeal,
keeps open the door for drawing the baselines of Sabah:
Section 2. The definition of the baselines of the territorial sea of the Philippine Archipelago as
provided in this Actis without prejudice to the 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. (Emphasis supplied)
UNCLOS III and RA 9522 not
Incompatible with the Constitution’s
Delineation of Internal Waters
As their final argument against the validity of RA 9522, petitioners contend that the law
unconstitutionally "converts" internal waters into archipelagic waters, hence subjecting these waters
to the right of innocent and sea lanes passage under UNCLOS III, including overflight. Petitioners
extrapolate that these passage rights indubitably expose Philippine internal waters to nuclear and
maritime pollution hazards, in violation of the Constitution. 38
Whether referred to as Philippine "internal waters" under Article I of the Constitution 39 or as
"archipelagic waters" under UNCLOS III (Article 49 [1]), 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. UNCLOS III affirms this:
Article 49. Legal status of archipelagic waters, of the air space over archipelagic waters and of their
bed and subsoil. –
1. The sovereignty of an archipelagic State extends to the waters enclosed by the
archipelagic baselines drawn in accordance with article 47, described as archipelagic
waters, regardless of their depth or distance from the coast.

2. This sovereignty extends to the air space over the archipelagic waters, as well as to
their bed and subsoil, and the resources contained therein.
xxxx
4. The regime of archipelagic sea lanes passage established in this Part shall not in other
respects affect the status of the archipelagic waters, including the sea lanes, or the
exercise by the archipelagic State of its sovereignty over such waters and their air
space, bed and subsoil, and the resources contained therein. (Emphasis supplied)
The fact of sovereignty, however, does not preclude the operation of municipal and international law
norms subjecting the territorial sea or archipelagic waters to necessary, if not marginal, burdens in
the interest of maintaining unimpeded, expeditious international navigation, consistent with the
international law principle of freedom of navigation. Thus, domestically, the political branches of the
Philippine government, in the competent discharge of their constitutional powers, may pass
legislation designating routes within the archipelagic waters to regulate innocent and sea lanes
passage.40 Indeed, bills drawing nautical highways for sea lanes passage are now pending in
Congress.41
In the absence of municipal legislation, international law norms, now codified in UNCLOS III, operate
to grant innocent passage rights over the territorial sea or archipelagic waters, subject to the treaty’s
limitations and conditions for their exercise.42 Significantly, the right of innocent passage is a
customary international law,43 thus automatically incorporated in the corpus of Philippine law.44 No
modern State can validly invoke its sovereignty to absolutely forbid innocent passage that is
exercised in accordance with customary international law without risking retaliatory measures from
the international community.
The fact that for archipelagic States, their archipelagic waters are subject to both the right of
innocent passage and sea lanes passage45 does not place them in lesser footing vis-àvis continental coastal States which are subject, in their territorial sea, to the right of innocent
passage and the right of transit passage through international straits. The imposition of these
passage rights through archipelagic waters under UNCLOS III was a concession by archipelagic
States, in exchange for their right to claim all the waters landward of their baselines,regardless of
their depth or distance from the coast, as archipelagic waters subject to their territorial sovereignty.
More importantly, the recognition of archipelagic States’ archipelago and the waters enclosed by
their baselines as one cohesive entity prevents the treatment of their islands as separate islands
under UNCLOS III.46 Separate islands generate their own maritime zones, placing the waters
between islands separated by more than 24 nautical miles beyond the States’ territorial sovereignty,
subjecting these waters to the rights of other States under UNCLOS III. 47
Petitioners’ invocation of non-executory constitutional provisions in Article II (Declaration of
Principles and State Policies)48 must also fail. Our present state of jurisprudence considers the
provisions in Article II as mere legislative guides, which, absent enabling legislation, "do not embody
judicially enforceable constitutional rights x x x."49 Article II provisions serve as guides in formulating
and interpreting implementing legislation, as well as in interpreting executory provisions of the
Constitution. Although Oposa v. Factoran50 treated the right to a healthful and balanced ecology
under Section 16 of Article II as an exception, the present petition lacks factual basis to substantiate
the claimed constitutional violation. The other provisions petitioners cite, relating to the protection of
marine wealth (Article XII, Section 2, paragraph 251 ) and subsistence fishermen (Article XIII, Section
752 ), are not violated by RA 9522.

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.
UNCLOS III favors States with a long coastline like the Philippines. UNCLOS III creates a sui
generis maritime space – the exclusive economic zone – in waters previously part of the high seas.
UNCLOS III grants new rights to coastal States to exclusively exploit the resources found within this
zone up to 200 nautical miles.53 UNCLOS III, however, preserves the traditional freedom of
navigation of other States that attached to this zone beyond the territorial sea before UNCLOS III.
RA 9522 and the Philippines’ Maritime Zones
Petitioners hold the view that, based on the permissive text of UNCLOS III, Congress was not bound
to pass RA 9522.54 We have looked at the relevant provision of UNCLOS III 55 and we find petitioners’
reading plausible. Nevertheless, the prerogative of choosing this option belongs to Congress, not to
this Court. Moreover, the luxury of choosing this option comes at a very steep price. Absent an
UNCLOS III compliant baselines law, an archipelagic State like the Philippines will find itself devoid
of internationally acceptable baselines from where the breadth of its maritime zones and continental
shelf is measured. This is recipe for a two-fronted disaster: first, it sends an open invitation to the
seafaring powers to freely enter and exploit the resources in the waters and submarine areas around
our archipelago; and second, it weakens the country’s case in any international dispute over
Philippine maritime space. These are consequences Congress wisely avoided.
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.
WHEREFORE, we DISMISS the petition.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 183591

October 14, 2008

THE PROVINCE OF NORTH COTABATO, duly represented by GOVERNOR JESUS SACDALAN
and/or VICE-GOVERNOR EMMANUEL PIÑOL, for and in his own behalf, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON
ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO GARCIA, ATTY. LEAH
ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK RYAN SULLIVAN and/or GEN.
HERMOGENES ESPERON, JR., the latter in his capacity as the present and duly-appointed
Presidential Adviser on the Peace Process (OPAPP) or the so-called Office of the Presidential
Adviser on the Peace Process, respondents.
x--------------------------------------------x
G.R. No. 183752

October 14, 2008

CITY GOVERNMENT OF ZAMBOANGA, as represented by HON. CELSO L. LOBREGAT, City
Mayor of Zamboanga, and in his personal capacity as resident of the City of Zamboanga, Rep.
MA. ISABELLE G. CLIMACO, District 1, and Rep. ERICO BASILIO A. FABIAN, District 2, City of
Zamboanga, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL
(GRP), as represented by RODOLFO C. GARCIA, LEAH ARMAMENTO, SEDFREY
CANDELARIA, MARK RYAN SULLIVAN and HERMOGENES ESPERON, in his capacity as the
Presidential Adviser on Peace Process,respondents.
x--------------------------------------------x
G.R. No. 183893

October 14, 2008

THE CITY OF ILIGAN, duly represented by CITY MAYOR LAWRENCE LLUCH CRUZ, petitioner,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE PANEL ON
ANCESTRAL DOMAIN (GRP), represented by SEC. RODOLFO GARCIA, ATTY. LEAH
ARMAMENTO, ATTY. SEDFREY CANDELARIA, MARK RYAN SULLIVAN; GEN. HERMOGENES
ESPERON, JR., in his capacity as the present and duly appointed Presidential Adviser on the
Peace Process; and/or SEC. EDUARDO ERMITA, in his capacity as Executive
Secretary. respondents.
x--------------------------------------------x

G.R. No. 183951

October 14, 2008

THE PROVINCIAL GOVERNMENT OF ZAMBOANGA DEL NORTE, as represented by HON.
ROLANDO E. YEBES, in his capacity as Provincial Governor, HON. FRANCIS H. OLVIS, in his
capacity as Vice-Governor and Presiding Officer of the Sangguniang Panlalawigan, HON.
CECILIA JALOSJOS CARREON, Congresswoman, 1st Congressional District, HON. CESAR G.
JALOSJOS, Congressman, 3rdCongressional District, and Members of the Sangguniang
Panlalawigan of the Province of Zamboanga del Norte, namely, HON. SETH FREDERICK P.
JALOSJOS, HON. FERNANDO R. CABIGON, JR., HON. ULDARICO M. MEJORADA II, HON.
EDIONAR M. ZAMORAS, HON. EDGAR J. BAGUIO, HON. CEDRIC L. ADRIATICO, HON.
FELIXBERTO C. BOLANDO, HON. JOSEPH BRENDO C. AJERO, HON. NORBIDEIRI B.
EDDING, HON. ANECITO S. DARUNDAY, HON. ANGELICA J. CARREON and HON.
LUZVIMINDA E. TORRINO, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL
[GRP], as represented by HON. RODOLFO C. GARCIA and HON. HERMOGENES ESPERON, in
his capacity as the Presidential Adviser of Peace Process, respondents.
x--------------------------------------------x
G.R. No. 183962

October 14, 2008

ERNESTO M. MACEDA, JEJOMAR C. BINAY, and AQUILINO L. PIMENTEL III, petitioners,
vs.
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES PEACE NEGOTIATING PANEL,
represented by its Chairman RODOLFO C. GARCIA, and the MORO ISLAMIC LIBERATION
FRONT PEACE NEGOTIATING PANEL, represented by its Chairman MOHAGHER
IQBAL, respondents.
x--------------------------------------------x
FRANKLIN M. DRILON and ADEL ABBAS TAMANO, petitioners-in-intervention.
x--------------------------------------------x
SEN. MANUEL A. ROXAS, petitioners-in-intervention.
x--------------------------------------------x
MUNICIPALITY OF LINAMON duly represented by its Municipal Mayor NOEL N.
DEANO, petitioners-in-intervention,
x--------------------------------------------x
THE CITY OF ISABELA, BASILAN PROVINCE, represented by MAYOR CHERRYLYN P.
SANTOS-AKBAR,petitioners-in-intervention.
x--------------------------------------------x

THE PROVINCE OF SULTAN KUDARAT, rep. by HON. SUHARTO T. MANGUDADATU, in his
capacity as Provincial Governor and a resident of the Province of Sultan Kudarat, petitioner-inintervention.
x-------------------------------------------x
RUY ELIAS LOPEZ, for and in his own behalf and on behalf of Indigenous Peoples in
Mindanao Not Belonging to the MILF, petitioner-in-intervention.
x--------------------------------------------x
CARLO B. GOMEZ, GERARDO S. DILIG, NESARIO G. AWAT, JOSELITO C. ALISUAG and
RICHALEX G. JAGMIS, as citizens and residents of Palawan, petitioners-in-intervention.
x--------------------------------------------x
MARINO RIDAO and KISIN BUXANI, petitioners-in-intervention.
x--------------------------------------------x
MUSLIM LEGAL ASSISTANCE FOUNDATION, INC (MUSLAF), respondent-in-intervention.
x--------------------------------------------x
MUSLIM MULTI-SECTORAL MOVEMENT FOR PEACE & DEVELOPMENT
(MMMPD), respondent-in-intervention.
x--------------------------------------------x
DECISION
CARPIO MORALES, J.:
Subject of these consolidated cases is the extent of the powers of the President in pursuing the
peace process.While the facts surrounding this controversy center on the armed conflict in Mindanao
between the government and the Moro Islamic Liberation Front (MILF), the legal issue involved has
a bearing on all areas in the country where there has been a long-standing armed conflict. Yet again,
the Court is tasked to perform a delicate balancing act. It must uncompromisingly delineate the
bounds within which the President may lawfully exercise her discretion, but it must do so in strict
adherence to the Constitution, lest its ruling unduly restricts the freedom of action vested by that
same Constitution in the Chief Executive precisely to enable her to pursue the peace process
effectively.
I. FACTUAL ANTECEDENTS OF THE PETITIONS
On August 5, 2008, the Government of the Republic of the Philippines (GRP) and the MILF, through
the Chairpersons of their respective peace negotiating panels, were scheduled to sign a
Memorandum of Agreement on the Ancestral Domain (MOA-AD) Aspect of the GRP-MILF Tripoli
Agreement on Peace of 2001 in Kuala Lumpur, Malaysia.

The MILF is a rebel group which was established in March 1984 when, under the leadership of the
late Salamat Hashim, it splintered from the Moro National Liberation Front (MNLF) then headed by
Nur Misuari, on the ground, among others, of what Salamat perceived to be the manipulation of the
MNLF away from an Islamic basis towards Marxist-Maoist orientations.1
The signing of the MOA-AD between the GRP and the MILF was not to materialize, however, for
upon motion of petitioners, specifically those who filed their cases before the scheduled signing of
the MOA-AD, this Court issued a Temporary Restraining Order enjoining the GRP from signing the
same.
The MOA-AD was preceded by a long process of negotiation and the concluding of several prior
agreements between the two parties beginning in 1996, when the GRP-MILF peace negotiations
began. On July 18, 1997, the GRP and MILF Peace Panels signed the Agreement on General
Cessation of Hostilities. The following year, they signed the General Framework of Agreement of
Intent on August 27, 1998.
The Solicitor General, who represents respondents, summarizes the MOA-AD by stating that the
same contained, among others, the commitment of the parties to pursue peace negotiations, protect
and respect human rights, negotiate with sincerity in the resolution and pacific settlement of the
conflict, and refrain from the use of threat or force to attain undue advantage while the peace
negotiations on the substantive agenda are on-going.2
Early on, however, it was evident that there was not going to be any smooth sailing in the GRP-MILF
peace process. Towards the end of 1999 up to early 2000, the MILF attacked a number of
municipalities in Central Mindanao and, in March 2000, it took control of the town hall of Kauswagan,
Lanao del Norte.3 In response, then President Joseph Estrada declared and carried out an "all-outwar" against the MILF.
When President Gloria Macapagal-Arroyo assumed office, the military offensive against the MILF
was suspended and the government sought a resumption of the peace talks. The MILF, according to
a leading MILF member, initially responded with deep reservation, but when President Arroyo asked
the Government of Malaysia through Prime Minister Mahathir Mohammad to help convince the MILF
to return to the negotiating table, the MILF convened its Central Committee to seriously discuss the
matter and, eventually, decided to meet with the GRP.4
The parties met in Kuala Lumpur on March 24, 2001, with the talks being facilitated by the Malaysian
government, the parties signing on the same date the Agreement on the General Framework for the
Resumption of Peace Talks Between the GRP and the MILF. The MILF thereafter suspended all its
military actions.5
Formal peace talks between the parties were held in Tripoli, Libya from June 20-22, 2001, the
outcome of which was the GRP-MILF Tripoli Agreement on Peace (Tripoli Agreement 2001)
containing the basic principles and agenda on the following aspects of the
negotiation: Security Aspect, Rehabilitation Aspect, and Ancestral Domain Aspect. With regard to
the Ancestral Domain Aspect, the parties in Tripoli Agreement 2001 simply agreed "that the same be
discussed further by the Parties in their next meeting."
A second round of peace talks was held in Cyberjaya, Malaysia on August 5-7, 2001 which ended
with the signing of the Implementing Guidelines on the Security Aspect of the Tripoli Agreement 2001
leading to a ceasefire status between the parties. This was followed by the Implementing Guidelines
on the Humanitarian Rehabilitation and Development Aspects of the Tripoli Agreement 2001, which

was signed on May 7, 2002 at Putrajaya, Malaysia. Nonetheless, there were many incidence of
violence between government forces and the MILF from 2002 to 2003.
Meanwhile, then MILF Chairman Salamat Hashim passed away on July 13, 2003 and he was
replaced by Al Haj Murad, who was then the chief peace negotiator of the MILF. Murad's position as
chief peace negotiator was taken over by Mohagher Iqbal. 6
In 2005, several exploratory talks were held between the parties in Kuala Lumpur, eventually leading
to the crafting of the draft MOA-AD in its final form, which, as mentioned, was set to be signed last
August 5, 2008.
II. STATEMENT OF THE PROCEEDINGS
Before the Court is what is perhaps the most contentious "consensus" ever embodied in an
instrument - the MOA-AD which is assailed principally by the present petitions bearing docket
numbers 183591, 183752, 183893, 183951 and 183962.
Commonly impleaded as respondents are the GRP Peace Panel on Ancestral Domain 7 and the
Presidential Adviser on the Peace Process (PAPP) Hermogenes Esperon, Jr.
On July 23, 2008, the Province of North Cotabato8 and Vice-Governor Emmanuel Piñol filed a
petition, docketed as G.R. No. 183591, for Mandamus and Prohibition with Prayer for the Issuance
of Writ of Preliminary Injunction and Temporary Restraining Order.9 Invoking the right to information
on matters of public concern, petitioners seek to compel respondents to disclose and furnish them
the complete and official copies of the MOA-AD including its attachments, and to prohibit the slated
signing of the MOA-AD, pending the disclosure of the contents of the MOA-AD and the holding of a
public consultation thereon. Supplementarily, petitioners pray that the MOA-AD be declared
unconstitutional.10
This initial petition was followed by another one, docketed as G.R. No. 183752, also for Mandamus
and Prohibition11 filed by the City of Zamboanga,12 Mayor Celso Lobregat, Rep. Ma. Isabelle Climaco
and Rep. Erico Basilio Fabian who likewise pray for similar injunctive reliefs. Petitioners herein
moreover pray that the City of Zamboanga be excluded from the Bangsamoro Homeland and/or
Bangsamoro Juridical Entity and, in the alternative, that the MOA-AD be declared null and void.
By Resolution of August 4, 2008, the Court issued a Temporary Restraining Order commanding and
directing public respondents and their agents to cease and desist from formally signing the MOAAD.13 The Court also required the Solicitor General to submit to the Court and petitioners the official
copy of the final draft of the MOA-AD,14 to which she complied.15
Meanwhile, the City of Iligan16 filed a petition for Injunction and/or Declaratory Relief, docketed
as G.R. No. 183893, praying that respondents be enjoined from signing the MOA-AD or, if the same
had already been signed, from implementing the same, and that the MOA-AD be declared
unconstitutional. Petitioners herein additionally implead Executive Secretary Eduardo Ermita as
respondent.
The Province of Zamboanga del Norte,17 Governor Rolando Yebes, Vice-Governor Francis Olvis,
Rep. Cecilia Jalosjos-Carreon, Rep. Cesar Jalosjos, and the members 18 of the Sangguniang
Panlalawigan of Zamboanga del Norte filed on August 15, 2008 a petition for Certiorari, Mandamus
and Prohibition,19 docketed as G.R. No. 183951. They pray, inter alia, that the MOA-AD be declared

null and void and without operative effect, and that respondents be enjoined from executing the
MOA-AD.
On August 19, 2008, Ernesto Maceda, Jejomar Binay, and Aquilino Pimentel III filed a petition for
Prohibition,20docketed as G.R. No. 183962, praying for a judgment prohibiting and permanently
enjoining respondents from formally signing and executing the MOA-AD and or any other agreement
derived therefrom or similar thereto, and nullifying the MOA-AD for being unconstitutional and illegal.
Petitioners herein additionally implead as respondent the MILF Peace Negotiating Panel
represented by its Chairman Mohagher Iqbal.
Various parties moved to intervene and were granted leave of court to file their petitions-/commentsin-intervention. Petitioners-in-Intervention include Senator Manuel A. Roxas, former Senate
President Franklin Drilon and Atty. Adel Tamano, the City of Isabela21 and Mayor Cherrylyn SantosAkbar, the Province of Sultan Kudarat22 and Gov. Suharto Mangudadatu, the Municipality of Linamon
in Lanao del Norte,23 Ruy Elias Lopez of Davao City and of the Bagobo tribe, Sangguniang
Panlungsod member Marino Ridao and businessman Kisin Buxani, both of Cotabato City; and
lawyers Carlo Gomez, Gerardo Dilig, Nesario Awat, Joselito Alisuag, Richalex Jagmis, all of Palawan
City. The Muslim Legal Assistance Foundation, Inc. (Muslaf) and the Muslim Multi-Sectoral
Movement for Peace and Development (MMMPD) filed their respective Comments-in-Intervention.
By subsequent Resolutions, the Court ordered the consolidation of the petitions. Respondents filed
Comments on the petitions, while some of petitioners submitted their respective Replies.
Respondents, by Manifestation and Motion of August 19, 2008, stated that the Executive
Department shall thoroughly review the MOA-AD and pursue further negotiations to address the
issues hurled against it, and thus moved to dismiss the cases. In the succeeding exchange of
pleadings, respondents' motion was met with vigorous opposition from petitioners.
The cases were heard on oral argument on August 15, 22 and 29, 2008 that tackled the following
principal issues:
1. Whether the petitions have become moot and academic
(i) insofar as the mandamus aspect is concerned, in view of the disclosure of official
copies of the final draft of the Memorandum of Agreement (MOA); and
(ii) insofar as the prohibition aspect involving the Local Government Units is
concerned, if it is considered that consultation has become fait accompli with the
finalization of the draft;
2. Whether the constitutionality and the legality of the MOA is ripe for adjudication;
3. Whether respondent Government of the Republic of the Philippines Peace Panel
committed grave abuse of discretion amounting to lack or excess of jurisdiction when it
negotiated and initiated the MOA vis-à-vis ISSUES Nos. 4 and 5;
4. Whether there is a violation of the people's right to information on matters of public
concern (1987 Constitution, Article III, Sec. 7) under a state policy of full disclosure of all its
transactions involving public interest (1987 Constitution, Article II, Sec. 28) including public
consultation under Republic Act No. 7160 (LOCAL GOVERNMENT CODE OF 1991)[;]

If it is in the affirmative, whether prohibition under Rule 65 of the 1997 Rules of Civil
Procedure is an appropriate remedy;
5. Whether by signing the MOA, the Government of the Republic of the Philippines would be
BINDING itself
a) to create and recognize the Bangsamoro Juridical Entity (BJE) as a separate
state, or a juridical, territorial or political subdivision not recognized by law;
b) to revise or amend the Constitution and existing laws to conform to the MOA;
c) to concede to or recognize the claim of the Moro Islamic Liberation Front for
ancestral domain in violation of Republic Act No. 8371 (THE INDIGENOUS
PEOPLES RIGHTS ACT OF 1997), particularly Section 3(g) & Chapter VII
(DELINEATION, RECOGNITION OF ANCESTRAL DOMAINS)[;]
If in the affirmative, whether the Executive Branch has the authority to so bind the
Government of the Republic of the Philippines;
6. Whether the inclusion/exclusion of the Province of North Cotabato, Cities of Zamboanga,
Iligan and Isabela, and the Municipality of Linamon, Lanao del Norte in/from the areas
covered by the projected Bangsamoro Homeland is a justiciable question; and
7. Whether desistance from signing the MOA derogates any prior valid commitments of the
Government of the Republic of the Philippines.24
The Court, thereafter, ordered the parties to submit their respective Memoranda. Most of the parties
submitted their memoranda on time.
III. OVERVIEW OF THE MOA-AD
As a necessary backdrop to the consideration of the objections raised in the subject five petitions
and six petitions-in-intervention against the MOA-AD, as well as the two comments-in-intervention in
favor of the MOA-AD, the Court takes an overview of the MOA.
The MOA-AD identifies the Parties to it as the GRP and the MILF.
Under the heading "Terms of Reference" (TOR), the MOA-AD includes not only four earlier
agreements between the GRP and MILF, but also two agreements between the GRP and the MNLF:
the 1976 Tripoli Agreement, and the Final Peace Agreement on the Implementation of the 1976
Tripoli Agreement, signed on September 2, 1996 during the administration of President Fidel Ramos.
The MOA-AD also identifies as TOR two local statutes - the organic act for the Autonomous Region
in Muslim Mindanao (ARMM)25 and the Indigenous Peoples Rights Act (IPRA),26 and several
international law instruments - the ILO Convention No. 169 Concerning Indigenous and Tribal
Peoples in Independent Countries in relation to the UN Declaration on the Rights of the Indigenous
Peoples, and the UN Charter, among others.
The MOA-AD includes as a final TOR the generic category of "compact rights entrenchment
emanating from the regime of dar-ul-mua'hada (or territory under compact) and dar-ul-sulh (or
territory under peace agreement) that partakes the nature of a treaty device."

During the height of the Muslim Empire, early Muslim jurists tended to see the world through a
simple dichotomy: there was the dar-ul-Islam (the Abode of Islam) and dar-ul-harb (the Abode
of War). The first referred to those lands where Islamic laws held sway, while the second denoted
those lands where Muslims were persecuted or where Muslim laws were outlawed or
ineffective.27 This way of viewing the world, however, became more complex through the centuries as
the Islamic world became part of the international community of nations.
As Muslim States entered into treaties with their neighbors, even with distant States and intergovernmental organizations, the classical division of the world into dar-ul-Islam and dar-ulharb eventually lost its meaning. New terms were drawn up to describe novel ways of perceiving
non-Muslim territories. For instance, areas like dar-ul-mua'hada (land of compact) and dar-ulsulh (land of treaty) referred to countries which, though under a secular regime, maintained peaceful
and cooperative relations with Muslim States, having been bound to each other by treaty or
agreement. Dar-ul-aman (land of order), on the other hand, referred to countries which, though not
bound by treaty with Muslim States, maintained freedom of religion for Muslims. 28
It thus appears that the "compact rights entrenchment" emanating from the regime of dar-ulmua'hada and dar-ul-sulh simply refers to all other agreements between the MILF and the Philippine
government - the Philippines being the land of compact and peace agreement - that partake of the
nature of a treaty device, "treaty" being broadly defined as "any solemn agreement in writing that
sets out understandings, obligations, and benefits for both parties which provides for a framework
that elaborates the principles declared in the [MOA-AD]."29
The MOA-AD states that the Parties "HAVE AGREED AND ACKNOWLEDGED AS FOLLOWS," and
starts with its main body.
The main body of the MOA-AD is divided into four strands, namely, Concepts and Principles,
Territory, Resources, and Governance.
A. CONCEPTS AND PRINCIPLES
This strand begins with the statement that it is "the birthright of all Moros and all Indigenous peoples
of Mindanao to identify themselves and be accepted as ‘Bangsamoros.'" It defines "Bangsamoro
people" as the natives or original inhabitants of Mindanao and its adjacent islands including
Palawan and the Sulu archipelago at the time of conquest or colonization, and their
descendants whether mixed or of full blood, including their spouses.30
Thus, the concept of "Bangsamoro," as defined in this strand of the MOA-AD, includes not only
"Moros" as traditionally understood even by Muslims,31 but all indigenous peoples of Mindanao and
its adjacent islands. The MOA-AD adds that the freedom of choice of indigenous peoples shall be
respected. What this freedom of choice consists in has not been specifically defined.
The MOA-AD proceeds to refer to the "Bangsamoro homeland," the ownership of which is vested
exclusively in the Bangsamoro people by virtue of their prior rights of occupation.32 Both parties to
the MOA-AD acknowledge that ancestral domain does not form part of the public domain.33
The Bangsamoro people are acknowledged as having the right to self-governance, which right is
said to be rooted on ancestral territoriality exercised originally under the suzerain authority of their
sultanates and the Pat a Pangampong ku Ranaw. The sultanates were described as states or
"karajaan/kadatuan" resembling a body politic endowed with all the elements of a nation-state in the
modern sense.34

The MOA-AD thus grounds the right to self-governance of the Bangsamoro people on the past
suzerain authority of the sultanates. As gathered, the territory defined as the Bangsamoro homeland
was ruled by several sultanates and, specifically in the case of the Maranao, by the Pat a
Pangampong ku Ranaw, a confederation of independent principalities (pangampong) each ruled by
datus and sultans, none of whom was supreme over the others. 35
The MOA-AD goes on to describe the Bangsamoro people as "the ‘First Nation' with defined territory
and with a system of government having entered into treaties of amity and commerce with foreign
nations."
The term "First Nation" is of Canadian origin referring to the indigenous peoples of that territory,
particularly those known as Indians. In Canada, each of these indigenous peoples is equally entitled
to be called "First Nation," hence, all of them are usually described collectively by the plural "First
Nations."36 To that extent, the MOA-AD, by identifying the Bangsamoro people as "the First Nation" suggesting its exclusive entitlement to that designation - departs from the Canadian usage of the
term.
The MOA-AD then mentions for the first time the "Bangsamoro Juridical Entity" (BJE) to which it
grants the authority and jurisdiction over the Ancestral Domain and Ancestral Lands of the
Bangsamoro.37
B. TERRITORY
The territory of the Bangsamoro homeland is described as the land mass as well as the maritime,
terrestrial, fluvial and alluvial domains, including the aerial domain and the atmospheric space above
it, embracing the Mindanao-Sulu-Palawan geographic region.38
More specifically, the core of the BJE is defined as the present geographic area of the ARMM - thus
constituting the following areas: Lanao del Sur, Maguindanao, Sulu, Tawi-Tawi, Basilan, and Marawi
City. Significantly, this core also includes certain municipalities of Lanao del Norte that voted for
inclusion in the ARMM in the 2001 plebiscite.39
Outside of this core, the BJE is to cover other provinces, cities, municipalities and barangays, which
are grouped into two categories, Category A and Category B. Each of these areas is to be subjected
to a plebiscite to be held on different dates, years apart from each other. Thus, Category A areas are
to be subjected to a plebiscite not later than twelve (12) months following the signing of the MOAAD.40 Category B areas, also called "Special Intervention Areas," on the other hand, are to be
subjected to a plebiscite twenty-five (25) years from the signing of a separate agreement - the
Comprehensive Compact.41
The Parties to the MOA-AD stipulate that the BJE shall have jurisdiction over all natural resources
within its "internal waters," defined as extending fifteen (15) kilometers from the coastline of the BJE
area;42 that the BJE shall also have "territorial waters," which shall stretch beyond the BJE internal
waters up to the baselines of the Republic of the Philippines (RP) south east and south west of
mainland Mindanao; and that within these territorialwaters, the BJE and the "Central
Government" (used interchangeably with RP) shall exercise joint jurisdiction, authority and
management over all natural resources.43 Notably, the jurisdiction over the internal waters is not
similarly described as "joint."
The MOA-AD further provides for the sharing of minerals on the territorial waters between the
Central Government and the BJE, in favor of the latter, through production sharing and economic
cooperation agreement.44 The activities which the Parties are allowed to conduct on

the territorial waters are enumerated, among which are the exploration and utilization of natural
resources, regulation of shipping and fishing activities, and the enforcement of police and safety
measures.45 There is no similar provision on the sharing of minerals and allowed activities with
respect to the internal waters of the BJE.
C. RESOURCES
The MOA-AD states that the BJE is free to enter into any economic cooperation and trade relations
with foreign countries and shall have the option to establish trade missions in those countries. Such
relationships and understandings, however, are not to include aggression against the GRP. The BJE
may also enter into environmental cooperation agreements.46
The external defense of the BJE is to remain the duty and obligation of the Central Government. The
Central Government is also bound to "take necessary steps to ensure the BJE's participation in
international meetings and events" like those of the ASEAN and the specialized agencies of the UN.
The BJE is to be entitled to participate in Philippine official missions and delegations for the
negotiation of border agreements or protocols for environmental protection and equitable sharing of
incomes and revenues involving the bodies of water adjacent to or between the islands forming part
of the ancestral domain.47
With regard to the right of exploring for, producing, and obtaining all potential sources of energy,
petroleum, fossil fuel, mineral oil and natural gas, the jurisdiction and control thereon is to be vested
in the BJE "as the party having control within its territorial jurisdiction." This right carries
the proviso that, "in times of national emergency, when public interest so requires," the Central
Government may, for a fixed period and under reasonable terms as may be agreed upon by both
Parties, assume or direct the operation of such resources.48
The sharing between the Central Government and the BJE of total production pertaining to natural
resources is to be 75:25 in favor of the BJE.49
The MOA-AD provides that legitimate grievances of the Bangsamoro people arising from any unjust
dispossession of their territorial and proprietary rights, customary land tenures, or their
marginalization shall be acknowledged. Whenever restoration is no longer possible, reparation is to
be in such form as mutually determined by the Parties.50
The BJE may modify or cancel the forest concessions, timber licenses, contracts or agreements,
mining concessions, Mineral Production and Sharing Agreements (MPSA), Industrial Forest
Management Agreements (IFMA), and other land tenure instruments granted by the Philippine
Government, including those issued by the present ARMM.51
D. GOVERNANCE
The MOA-AD binds the Parties to invite a multinational third-party to observe and monitor the
implementation of the Comprehensive Compact. This compact is to embody the "details for the
effective enforcement" and "the mechanisms and modalities for the actual implementation" of the
MOA-AD. The MOA-AD explicitly provides that the participation of the third party shall not in any way
affect the status of the relationship between the Central Government and the BJE. 52
The "associative" relationship
between the Central Government
and the BJE

The MOA-AD describes the relationship of the Central Government and the BJE as "associative,"
characterizedby shared authority and responsibility. And it states that the structure of governance is
to be based on executive, legislative, judicial, and administrative institutions with defined powers and
functions in the Comprehensive Compact.
The MOA-AD provides that its provisions requiring "amendments to the existing legal framework"
shall take effect upon signing of the Comprehensive Compact and upon effecting the aforesaid
amendments, with due regard to the non-derogation of prior agreements and within the stipulated
timeframe to be contained in the Comprehensive Compact. As will be discussed later, much of
the present controversy hangs on the legality of this provision.
The BJE is granted the power to build, develop and maintain its own institutions inclusive of civil
service, electoral, financial and banking, education, legislation, legal, economic, police and internal
security force, judicial system and correctional institutions, the details of which shall be discussed in
the negotiation of the comprehensive compact.
As stated early on, the MOA-AD was set to be signed on August 5, 2008 by Rodolfo Garcia and
Mohagher Iqbal, Chairpersons of the Peace Negotiating Panels of the GRP and the MILF,
respectively. Notably, the penultimate paragraph of the MOA-AD identifies the signatories as "the
representatives of the Parties," meaning the GRP and MILF themselves, and not merely of the
negotiating panels.53 In addition, the signature page of the MOA-AD states that it is "WITNESSED
BY" Datuk Othman Bin Abd Razak, Special Adviser to the Prime Minister of Malaysia, "ENDORSED
BY" Ambassador Sayed Elmasry, Adviser to Organization of the Islamic Conference (OIC) Secretary
General and Special Envoy for Peace Process in Southern Philippines, and SIGNED "IN THE
PRESENCE OF" Dr. Albert G. Romulo, Secretary of Foreign Affairs of RP and Dato' Seri Utama Dr.
Rais Bin Yatim, Minister of Foreign Affairs, Malaysia, all of whom were scheduled to sign the
Agreement last August 5, 2008.
Annexed to the MOA-AD are two documents containing the respective lists cum maps of the
provinces, municipalities, and barangays under Categories A and B earlier mentioned in the
discussion on the strand on TERRITORY.
IV. PROCEDURAL ISSUES
A. RIPENESS
The power of judicial review is limited to actual cases or controversies. 54 Courts decline to issue
advisory opinions or to resolve hypothetical or feigned problems, or mere academic questions. 55 The
limitation of the power of judicial review to actual cases and controversies defines the role assigned
to the judiciary in a tripartite allocation of power, to assure that the courts will not intrude into areas
committed to the other branches of government.56
An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims,
susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or
dispute. There must be a contrariety of legal rights that can be interpreted and enforced on the basis
of existing law and jurisprudence.57The Court can decide the constitutionality of an act or treaty only
when a proper case between opposing parties is submitted for judicial determination. 58
Related to the requirement of an actual case or controversy is the requirement of ripeness. A
question is ripe for adjudication when the act being challenged has had a direct adverse effect on
the individual challenging it.59 For a case to be considered ripe for adjudication, it is a prerequisite
that something had then been accomplished or performed by either branch before a court may come

into the picture,60 and the petitioner must allege the existence of an immediate or threatened injury to
itself as a result of the challenged action.61 He must show that he has sustained or is immediately in
danger of sustaining some direct injury as a result of the act complained of. 62
The Solicitor General argues that there is no justiciable controversy that is ripe for judicial review in
the present petitions, reasoning that
The unsigned MOA-AD is simply a list of consensus points subject to further negotiations
and legislative enactments as well as constitutional processes aimed at attaining a final
peaceful agreement. Simply put, the MOA-AD remains to be a proposal that does not
automatically create legally demandable rights and obligations until the list of operative acts
required have been duly complied with. x x x
xxxx
In the cases at bar, it is respectfully submitted that this Honorable Court has no authority to
pass upon issues based on hypothetical or feigned constitutional problems or interests
with no concrete bases. Considering the preliminary character of the MOA-AD, there are no
concrete acts that could possibly violate petitioners' and intervenors' rights since the acts
complained of are mere contemplated steps toward the formulation of a final peace
agreement. Plainly, petitioners and intervenors' perceived injury, if at all, is merely imaginary
and illusory apart from being unfounded and based on mere conjectures. (Underscoring
supplied)
The Solicitor General cites63 the following provisions of the MOA-AD:
TERRITORY
xxxx
2. Toward this end, the Parties enter into the following stipulations:
xxxx
d. Without derogating from the requirements of prior agreements, the Government stipulates
to conduct and deliver, using all possible legal measures, within twelve (12) months following
the signing of the MOA-AD, a plebiscite covering the areas as enumerated in the list and
depicted in the map as Category A attached herein (the "Annex"). The Annex constitutes an
integral part of this framework agreement. Toward this end, the Parties shall endeavor to
complete the negotiations and resolve all outstanding issues on the Comprehensive
Compact within fifteen (15) months from the signing of the MOA-AD.
xxxx
GOVERNANCE
xxxx
7. The Parties agree that mechanisms and modalities for the actual implementation of this
MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps to
enable it to occur effectively.

Any provisions of the MOA-AD requiring amendments to the existing legal framework shall
come into forceupon the signing of a Comprehensive Compact and upon effecting the
necessary changes to the legal framework with due regard to non-derogation of prior
agreements and within the stipulated timeframe to be contained in the Comprehensive
Compact.64 (Underscoring supplied)
The Solicitor General's arguments fail to persuade.
Concrete acts under the MOA-AD are not necessary to render the present controversy ripe.
In Pimentel, Jr. v. Aguirre,65 this Court held:
x x x [B]y the mere enactment of the questioned law or the approval of the challenged action,
the dispute is said to have ripened into a judicial controversy even without any other overt
act. Indeed, even a singular violation of the Constitution and/or the law is enough to awaken
judicial duty.
xxxx
By the same token, when an act of the President, who in our constitutional scheme is a
coequal of Congress, is seriously alleged to have infringed the Constitution and the laws x x
x settling the dispute becomes the duty and the responsibility of the courts. 66
In Santa Fe Independent School District v. Doe,67 the United States Supreme Court held that the
challenge to the constitutionality of the school's policy allowing student-led prayers and speeches
before games was ripe for adjudication, even if no public prayer had yet been led under the policy,
because the policy was being challenged as unconstitutional on its face. 68
That the law or act in question is not yet effective does not negate ripeness. For example, in New
York v. United States,69 decided in 1992, the United States Supreme Court held that the action by the
State of New York challenging the provisions of the Low-Level Radioactive Waste Policy Act was ripe
for adjudication even if the questioned provision was not to take effect until January 1, 1996,
because the parties agreed that New York had to take immediate action to avoid the provision's
consequences.70
The present petitions pray for Certiorari,71 Prohibition, and Mandamus. Certiorari and Prohibition are
remedies granted by law when any tribunal, board or officer has acted, in the case of certiorari, or is
proceeding, in the case of prohibition, without or in excess of its jurisdiction or with grave abuse of
discretion amounting to lack or excess of jurisdiction. 72 Mandamus is a remedy granted by law when
any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act
which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully
excludes another from the use or enjoyment of a right or office to which such other is
entitled.73 Certiorari, Mandamus and Prohibition are appropriate remedies to raise constitutional
issues and to review and/or prohibit/nullify, when proper, acts of legislative and executive officials. 74
The authority of the GRP Negotiating Panel is defined by Executive Order No. 3 (E.O. No. 3), issued
on February 28, 2001.75 The said executive order requires that "[t]he government's policy framework
for peace, including the systematic approach and the administrative structure for carrying out the
comprehensive peace process x x x be governed by this Executive Order." 76
The present petitions allege that respondents GRP Panel and PAPP Esperon drafted the terms of
the MOA-AD without consulting the local government units or communities affected, nor informing

them of the proceedings. As will be discussed in greater detail later, such omission, by itself,
constitutes a departure by respondents from their mandate under E.O. No. 3.
Furthermore, the petitions allege that the provisions of the MOA-AD violate the Constitution. The
MOA-AD provides that "any provisions of the MOA-AD requiring amendments to the existing legal
framework shall come into force upon the signing of a Comprehensive Compact and upon effecting
the necessary changes to the legal framework," implying an amendment of the Constitution to
accommodate the MOA-AD. This stipulation, in effect,guaranteed to the MILF the amendment of the
Constitution. Such act constitutes another violation of its authority. Again, these points will be
discussed in more detail later.
As the petitions allege acts or omissions on the part of respondent that exceed their authority, by
violating their duties under E.O. No. 3 and the provisions of the Constitution and statutes, the
petitions make a prima facie case for Certiorari, Prohibition, and Mandamus, and an actual case or
controversy ripe for adjudication exists. When an act of a branch of government 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.77
B. LOCUS STANDI
For a party to have locus standi, one must allege "such a personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon
which the court so largely depends for illumination of difficult constitutional questions." 78
Because constitutional cases are often public actions in which the relief sought is likely to affect
other persons, a preliminary question frequently arises as to this interest in the constitutional
question raised.79
When suing as a citizen, the person complaining must allege that he has been or is about to be
denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to
some burdens or penalties by reason of the statute or act complained of. 80 When the issue concerns
a public right, it is sufficient that the petitioner is a citizen and has an interest in the execution of the
laws.81
For a taxpayer, one is allowed to sue where there is an assertion that public funds are illegally
disbursed or deflected to an illegal purpose, or that there is a wastage of public funds through the
enforcement of an invalid or unconstitutional law.82 The Court retains discretion whether or not to
allow a taxpayer's suit.83
In the case of a legislator or member of Congress, an act of the Executive that injures the institution
of Congress causes a derivative but nonetheless substantial injury that can be questioned by
legislators. A member of the House of Representatives has standing to maintain inviolate the
prerogatives, powers and privileges vested by the Constitution in his office. 84
An organization may be granted standing to assert the rights of its members,85 but the mere
invocation by theIntegrated Bar of the Philippines or any member of the legal profession of the duty
to preserve the rule of law does not suffice to clothe it with standing. 86
As regards a local government unit (LGU), it can seek relief in order to protect or vindicate an
interest of its own, and of the other LGUs.87

Intervenors, meanwhile, may be given legal standing upon showing of facts that satisfy the
requirements of the law authorizing intervention,88 such as a legal interest in the matter in litigation,
or in the success of either of the parties.
In any case, the Court has discretion to relax the procedural technicality on locus standi, given the
liberal attitude it has exercised, highlighted in the case of David v. Macapagal-Arroyo,89 where
technicalities of procedure were brushed aside, the constitutional issues raised being of paramount
public interest or of transcendental importance deserving the attention of the Court in view of their
seriousness, novelty and weight as precedents.90 The Court's forbearing stance on locus standi on
issues involving constitutional issues has for its purpose the protection of fundamental rights.
In not a few cases, the Court, in keeping with its duty under the Constitution to determine whether
the other branches of government have kept themselves within the limits of the Constitution and the
laws and have not abused the discretion given them, has brushed aside technical rules of
procedure.91
In the petitions at bar, petitioners Province of North Cotabato (G.R. No. 183591) Province of
Zamboanga del Norte (G.R. No. 183951), City of Iligan (G.R. No. 183893) and City of
Zamboanga (G.R. No. 183752) and petitioners-in-intervention Province of Sultan Kudarat, City of
Isabela and Municipality of Linamon havelocus standi in view of the direct and substantial injury
that they, as LGUs, would suffer as their territories, whether in whole or in part, are to be included in
the intended domain of the BJE. These petitioners allege that they did not vote for their inclusion in
the ARMM which would be expanded to form the BJE territory. Petitioners' legal standing is thus
beyond doubt.
In G.R. No. 183962, petitioners Ernesto Maceda, Jejomar Binay and Aquilino Pimentel III would
have no standing as citizens and taxpayers for their failure to specify that they would be denied
some right or privilege or there would be wastage of public funds. The fact that they are a former
Senator, an incumbent mayor of Makati City, and a resident of Cagayan de Oro, respectively, is of no
consequence. Considering their invocation of the transcendental importance of the issues at hand,
however, the Court grants them standing.
Intervenors Franklin Drilon and Adel Tamano, in alleging their standing as taxpayers, assert that
government funds would be expended for the conduct of an illegal and unconstitutional plebiscite to
delineate the BJE territory. On that score alone, they can be given legal standing. Their allegation
that the issues involved in these petitions are of "undeniable transcendental importance" clothes
them with added basis for their personality to intervene in these petitions.
With regard to Senator Manuel Roxas, his standing is premised on his being a member of the
Senate and a citizen to enforce compliance by respondents of the public's constitutional right to be
informed of the MOA-AD, as well as on a genuine legal interest in the matter in litigation, or in the
success or failure of either of the parties. He thus possesses the requisite standing as an intervenor.
With respect to Intervenors Ruy Elias Lopez, as a former congressman of the 3rd district of Davao
City, a taxpayer and a member of the Bagobo tribe; Carlo B. Gomez, et al., as members of the IBP
Palawan chapter, citizens and taxpayers; Marino Ridao, as taxpayer, resident and member of
the Sangguniang Panlungsod of Cotabato City; and Kisin Buxani, as taxpayer, they failed to allege
any proper legal interest in the present petitions. Just the same, the Court exercises its discretion to
relax the procedural technicality on locus standigiven the paramount public interest in the issues at
hand.

Intervening respondents Muslim Multi-Sectoral Movement for Peace and Development, an
advocacy group for justice and the attainment of peace and prosperity in Muslim Mindanao;
and Muslim Legal Assistance Foundation Inc., a non-government organization of Muslim lawyers,
allege that they stand to be benefited or prejudiced, as the case may be, in the resolution of the
petitions concerning the MOA-AD, and prays for the denial of the petitions on the grounds therein
stated. Such legal interest suffices to clothe them with standing.
B. MOOTNESS
Respondents insist that the present petitions have been rendered moot with the satisfaction of all the
reliefs prayed for by petitioners and the subsequent pronouncement of the Executive Secretary that
"[n]o matter what the Supreme Court ultimately decides[,] the government will not sign the MOA." 92
In lending credence to this policy decision, the Solicitor General points out that the President had
already disbanded the GRP Peace Panel.93
In David v. Macapagal-Arroyo,94 this Court held that the "moot and academic" principle not being a
magical formula that automatically dissuades courts in resolving a case, it will decide cases,
otherwise moot and academic, if it finds that (a) there is a grave violation of the Constitution; 95 (b) the
situation is of exceptional character and paramount public interest is involved; 96 (c) the constitutional
issue raised requires formulation of controlling principles to guide the bench, the bar, and the
public;97 and (d) the case is capable of repetition yet evading review.98
Another exclusionary circumstance that may be considered is where there is a voluntary cessation of
the activity complained of by the defendant or doer. Thus, once a suit is filed and the doer voluntarily
ceases the challenged conduct, it does not automatically deprive the tribunal of power to hear and
determine the case and does not render the case moot especially when the plaintiff seeks damages
or prays for injunctive relief against the possible recurrence of the violation. 99
The present petitions fall squarely into these exceptions to thus thrust them into the domain of
judicial review. The grounds cited above in David are just as applicable in the present cases as they
were, not only in David, but also in Province of Batangas v. Romulo100 and Manalo v.
Calderon101 where the Court similarly decided them on the merits, supervening events that would
ordinarily have rendered the same moot notwithstanding.
Petitions not mooted
Contrary then to the asseverations of respondents, the non-signing of the MOA-AD and the eventual
dissolution of the GRP Peace Panel did not moot the present petitions. It bears emphasis that the
signing of the MOA-AD did not push through due to the Court's issuance of a Temporary Restraining
Order.
Contrary too to respondents' position, the MOA-AD cannot be considered a mere "list of consensus
points," especially given its nomenclature, the need to have it signed or initialed by all the parties
concerned on August 5, 2008, and the far-reaching Constitutional implications of these
"consensus points," foremost of which is the creation of the BJE.
In fact, as what will, in the main, be discussed, there is a commitment on the part of respondents
to amend and effect necessary changes to the existing legal framework for certain provisions
of the MOA-AD to take effect. Consequently, the present petitions are not confined to the terms
and provisions of the MOA-AD, but to other on-going and future negotiations and agreements

necessary for its realization. The petitions have not, therefore, been rendered moot and academic
simply by the public disclosure of the MOA-AD,102 the manifestation that it will not be signed as well
as the disbanding of the GRP Panel not withstanding.
Petitions are imbued with paramount public interest
There is no gainsaying that the petitions are imbued with paramount public interest, involving a
significant part of the country's territory and the wide-ranging political modifications of affected LGUs.
The assertion that the MOA-AD is subject to further legal enactments including possible
Constitutional amendments more than ever provides impetus for the Court to formulate
controlling principles to guide the bench, the bar, the public and, in this case, the government
and its negotiating entity.
Respondents cite Suplico v. NEDA, et al.103 where the Court did not "pontificat[e] on issues which no
longer legitimately constitute an actual case or controversy [as this] will do more harm than good to
the nation as a whole."
The present petitions must be differentiated from Suplico. Primarily, in Suplico, what was assailed
and eventually cancelled was a stand-alone government procurement contract for a national
broadband network involving a one-time contractual relation between two parties-the government
and a private foreign corporation. As the issues therein involved specific government procurement
policies and standard principles on contracts, the majority opinion in Suplico found nothing
exceptional therein, the factual circumstances being peculiar only to the transactions and parties
involved in the controversy.
The MOA-AD is part of a series of agreements
In the present controversy, the MOA-AD is a significant part of a series of agreements necessary
to carry out the Tripoli Agreement 2001. The MOA-AD which dwells on the Ancestral Domain
Aspect of said Tripoli Agreement is the third such component to be undertaken following the
implementation of the Security Aspect in August 2001 and the Humanitarian, Rehabilitation and
Development Aspect in May 2002.
Accordingly, even if the Executive Secretary, in his Memorandum of August 28, 2008 to the Solicitor
General, has stated that "no matter what the Supreme Court ultimately decides[,] the government
will not sign the MOA[-AD],"mootness will not set in in light of the terms of the Tripoli Agreement
2001.
Need to formulate principles-guidelines
Surely, the present MOA-AD can be renegotiated or another one will be drawn up to carry out the
Ancestral Domain Aspect of the Tripoli Agreement 2001, in another or in any form, which could
contain similar or significantly drastic provisions. While the Court notes the word of the Executive
Secretary that the government "is committed to securing an agreement that is both constitutional and
equitable because that is the only way that long-lasting peace can be assured," it is minded to
render a decision on the merits in the present petitions toformulate controlling principles to guide
the bench, the bar, the public and, most especially, the government in negotiating with the
MILF regarding Ancestral Domain.
Respondents invite the Court's attention to the separate opinion of then Chief Justice Artemio
Panganiban inSanlakas v. Reyes104 in which he stated that the doctrine of "capable of repetition yet

evading review" can override mootness, "provided the party raising it in a proper case has been
and/or continue to be prejudiced or damaged as a direct result of their issuance." They contend that
the Court must have jurisdiction over the subject matter for the doctrine to be invoked.
The present petitions all contain prayers for Prohibition over which this Court exercises original
jurisdiction. While G.R. No. 183893 (City of Iligan v. GRP) is a petition for Injunction and Declaratory
Relief, the Court will treat it as one for Prohibition as it has far reaching implications and raises
questions that need to be resolved.105 At all events, the Court has jurisdiction over most if not the rest
of the petitions.
Indeed, the present petitions afford a proper venue for the Court to again apply the doctrine
immediately referred to as what it had done in a number of landmark cases. 106 There is
a reasonable expectation that petitioners, particularly the Provinces of North Cotabato, Zamboanga
del Norte and Sultan Kudarat, the Cities of Zamboanga, Iligan and Isabela, and the Municipality of
Linamon, will again be subjected to the same problem in the future as respondents' actions are
capable of repetition, in another or any form.
It is with respect to the prayers for Mandamus that the petitions have become moot, respondents
having, by Compliance of August 7, 2008, provided this Court and petitioners with official copies of
the final draft of the MOA-AD and its annexes. Too, intervenors have been furnished, or have
procured for themselves, copies of the MOA-AD.
V. SUBSTANTIVE ISSUES
As culled from the Petitions and Petitions-in-Intervention, there are basically two SUBSTANTIVE
issues to be resolved, one relating to the manner in which the MOA-AD was negotiated and
finalized, the other relating to its provisions, viz:
1. Did respondents violate constitutional and statutory provisions on public consultation and the right
to information when they negotiated and later initialed the MOA-AD?
2. Do the contents of the MOA-AD violate the Constitution and the laws?
ON THE FIRST SUBSTANTIVE ISSUE
Petitioners invoke their constitutional right to information on matters of public concern, as
provided in Section 7, Article III on the Bill of Rights:
Sec. 7. The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to official
acts, transactions, or decisions, as well as to government research data used as basis for
policy development, shall be afforded the citizen, subject to such limitations as may be
provided by law.107
As early as 1948, in Subido v. Ozaeta,108 the Court has recognized the statutory right to examine and
inspect public records, a right which was eventually accorded constitutional status.
The right of access to public documents, as enshrined in both the 1973 Constitution and the 1987
Constitution, has been recognized as a self-executory constitutional right. 109

In the 1976 case of Baldoza v. Hon. Judge Dimaano,110 the Court ruled that access to public records
is predicated on the right of the people to acquire information on matters of public concern since,
undoubtedly, in a democracy, the pubic has a legitimate interest in matters of social and political
significance.
x x x The incorporation of this right in the Constitution is a recognition of the fundamental role of free
exchange of information in a democracy. There can be no realistic perception by the public of the
nation's problems, nor a meaningful democratic decision-making if they are denied access to
information of general interest. Information is needed to enable the members of society to cope with
the exigencies of the times. As has been aptly observed: "Maintaining the flow of such information
depends on protection for both its acquisition and its dissemination since, if either process is
interrupted, the flow inevitably ceases." x x x111
In the same way that free discussion enables members of society to cope with the exigencies of
their time, access to information of general interest aids the people in democratic decision-making
by giving them a better perspective of the vital issues confronting the nation112 so that they may be
able to criticize and participate in the affairs of the government in a responsible, reasonable and
effective manner. It is by ensuring an unfettered and uninhibited exchange of ideas among a wellinformed public that a government remains responsive to the changes desired by the people. 113
The MOA-AD is a matter of public concern
That the subject of the information sought in the present cases is a matter of public concern 114 faces
no serious challenge. In fact, respondents admit that the MOA-AD is indeed of public concern.115 In
previous cases, the Court found that the regularity of real estate transactions entered in the Register
of Deeds,116 the need for adequate notice to the public of the various laws, 117 the civil service eligibility
of a public employee,118 the proper management of GSIS funds allegedly used to grant loans to
public officials,119 the recovery of the Marcoses' alleged ill-gotten wealth, 120 and the identity of partylist nominees,121 among others, are matters of public concern. Undoubtedly, the MOA-AD subject of
the present cases is of public concern, involving as it does the sovereignty and territorial
integrity of the State, which directly affects the lives of the public at large.
Matters of public concern covered by the right to information include steps and negotiations leading
to the consummation of the contract. In not distinguishing as to the executory nature or commercial
character of agreements, the Court has categorically ruled:
x x x [T]he right to information "contemplates inclusion of negotiations leading to the
consummation of the transaction." Certainly, a consummated contract is not a
requirement for the exercise of the right to information. Otherwise, the people can never
exercise the right if no contract is consummated, and if one is consummated, it may be too
late for the public to expose its defects.
Requiring a consummated contract will keep the public in the dark until the contract, which
may be grossly disadvantageous to the government or even illegal, becomes fait accompli.
This negates the State policy of full transparency on matters of public concern, a situation
which the framers of the Constitution could not have intended. Such a requirement will
prevent the citizenry from participating in the public discussion of any proposed contract,
effectively truncating a basic right enshrined in the Bill of Rights. We can allow neither an
emasculation of a constitutional right, nor a retreat by the State of its avowed "policy of full
disclosure of all its transactions involving public interest."122 (Emphasis and italics in the
original)

Intended as a "splendid symmetry"123 to the right to information under the Bill of Rights is the policy of
public disclosure under Section 28, Article II of the Constitution reading:
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and
implements a policy of full public disclosure of all its transactions involving public interest. 124
The policy of full public disclosure enunciated in above-quoted Section 28 complements the right of
access to information on matters of public concern found in the Bill of Rights. The right to information
guarantees the right of the people to demand information, while Section 28 recognizes the duty of
officialdom to give information even if nobody demands.125
The policy of public disclosure establishes a concrete ethical principle for the conduct of public
affairs in a genuinely open democracy, with the people's right to know as the centerpiece. It is a
mandate of the State to be accountable by following such policy.126 These provisions are vital to the
exercise of the freedom of expression and essential to hold public officials at all times accountable to
the people.127
Whether Section 28 is self-executory, the records of the deliberations of the Constitutional
Commission so disclose:
MR. SUAREZ. And since this is not self-executory, this policy will not be enunciated or will
not be in force and effect until after Congress shall have provided it.
MR. OPLE. I expect it to influence the climate of public ethics immediately but, of course, the
implementing law will have to be enacted by Congress, Mr. Presiding Officer.128
The following discourse, after Commissioner Hilario Davide, Jr., sought clarification on the issue, is
enlightening.
MR. DAVIDE. I would like to get some clarifications on this. Mr. Presiding Officer, did I get the
Gentleman correctly as having said that this is not a self-executing provision? It would
require a legislation by Congress to implement?
MR. OPLE. Yes. Originally, it was going to be self-executing, but I accepted an amendment
from Commissioner Regalado, so that the safeguards on national interest are modified by
the clause "as may be provided by law"
MR. DAVIDE. But as worded, does it not mean that this will immediately take effect and
Congress may provide for reasonable safeguards on the sole ground national interest?
MR. OPLE. Yes. I think so, Mr. Presiding Officer, I said earlier that it should
immediately influence the climate of the conduct of public affairs but, of course,
Congress here may no longer pass a law revoking it, or if this is approved, revoking this
principle, which is inconsistent with this policy.129 (Emphasis supplied)
Indubitably, the effectivity of the policy of public disclosure need not await the passing of a
statute. As Congress cannot revoke this principle, it is merely directed to provide for "reasonable
safeguards." The complete and effective exercise of the right to information necessitates that its
complementary provision on public disclosure derive the same self-executory nature. Since both
provisions go hand-in-hand, it is absurd to say that the broader 130 right to information on matters of
public concern is already enforceable while the correlative duty of the State to disclose its

transactions involving public interest is not enforceable until there is an enabling law.Respondents
cannot thus point to the absence of an implementing legislation as an excuse in not effecting such
policy.
An essential element of these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of the State that the
channels for free political discussion be maintained to the end that the government may perceive
and be responsive to the people's will.131Envisioned to be corollary to the twin rights to information
and disclosure is the design for feedback mechanisms.
MS. ROSARIO BRAID. Yes. And lastly, Mr. Presiding Officer, will the people be able to
participate? Will the government provide feedback mechanisms so that the people
can participate and can react where the existing media facilities are not able to
provide full feedback mechanisms to the government? I suppose this will be part of
the government implementing operational mechanisms.
MR. OPLE. Yes. I think through their elected representatives and that is how these courses
take place. There is a message and a feedback, both ways.
xxxx
MS. ROSARIO BRAID. Mr. Presiding Officer, may I just make one last sentence?
I think when we talk about the feedback network, we are not talking about public
officials but also network of private business o[r] community-based organizations that
will be reacting. As a matter of fact, we will put more credence or credibility on the private
network of volunteers and voluntary community-based organizations. So I do not think we
are afraid that there will be another OMA in the making. 132(Emphasis supplied)
The imperative of a public consultation, as a species of the right to information, is evident in the
"marching orders" to respondents. The mechanics for the duty to disclose information and to conduct
public consultation regarding the peace agenda and process is manifestly provided by E.O. No.
3.133 The preambulatory clause of E.O. No. 3 declares that there is a need to further enhance the
contribution of civil society to the comprehensive peace process by institutionalizing the people's
participation.
One of the three underlying principles of the comprehensive peace process is that it "should be
community-based, reflecting the sentiments, values and principles important to all Filipinos" and
"shall be defined not by the government alone, nor by the different contending groups only, but by all
Filipinos as one community."134Included as a component of the comprehensive peace process is
consensus-building and empowerment for peace, which includes "continuing consultations on both
national and local levels to build consensus for a peace agenda and process, and the mobilization
and facilitation of people's participation in the peace process."135
Clearly, E.O. No. 3 contemplates not just the conduct of a plebiscite to effectuate
"continuing" consultations, contrary to respondents' position that plebiscite is "more than
sufficient consultation."136
Further, E.O. No. 3 enumerates the functions and responsibilities of the PAPP, one of which is to
"[c]onductregular dialogues with the National Peace Forum (NPF) and other peace partners to seek
relevant information, comments, recommendations as well as to render appropriate and timely

reports on the progress of the comprehensive peace process."137 E.O. No. 3 mandates the
establishment of the NPF to be "the principal forumfor the PAPP to consult with and seek advi[c]e
from the peace advocates, peace partners and concerned sectors of society on both national and
local levels, on the implementation of the comprehensive peace process, as well as for
government[-]civil society dialogue and consensus-building on peace agenda and initiatives." 138
In fine, E.O. No. 3 establishes petitioners' right to be consulted on the peace agenda, as a
corollary to the constitutional right to information and disclosure.
PAPP Esperon committed grave abuse of discretion
The PAPP committed grave abuse of discretion when he failed to carry out the pertinent
consultation. The furtive process by which the MOA-AD was designed and crafted runs contrary to
and in excess of the legal authority, and amounts to a whimsical, capricious, oppressive, arbitrary
and despotic exercise thereof.
The Court may not, of course, require the PAPP to conduct the consultation in a particular way or
manner. It may, however, require him to comply with the law and discharge the functions within the
authority granted by the President.139
Petitioners are not claiming a seat at the negotiating table, contrary to respondents' retort in justifying
the denial of petitioners' right to be consulted. Respondents' stance manifests the manner by which
they treat the salient provisions of E.O. No. 3 on people's participation. Such disregard of the
express mandate of the President is not much different from superficial conduct toward token
provisos that border on classic lip service.140 It illustrates a gross evasion of positive duty and a
virtual refusal to perform the duty enjoined.
As for respondents' invocation of the doctrine of executive privilege, it is not tenable under the
premises. The argument defies sound reason when contrasted with E.O. No. 3's explicit provisions
on continuing consultation and dialogue on both national and local levels. The executive order
even recognizes the exercise of the public's right even before the GRP makes its official
recommendations or before the government proffers its definite propositions.141 It bear emphasis that
E.O. No. 3 seeks to elicit relevant advice, information, comments and recommendations from the
people through dialogue.
AT ALL EVENTS, respondents effectively waived the defense of executive privilege in view of their
unqualified disclosure of the official copies of the final draft of the MOA-AD. By unconditionally
complying with the Court's August 4, 2008 Resolution, without a prayer for the document's
disclosure in camera, or without a manifestation that it was complying therewith ex abundante ad
cautelam.
Petitioners' assertion that the Local Government Code (LGC) of 1991 declares it a State policy to
"require all national agencies and offices to conduct periodic consultations with appropriate local
government units, non-governmental and people's organizations, and other concerned sectors of the
community before any project or program is implemented in their respective jurisdictions" 142 is welltaken. The LGC chapter on intergovernmental relations puts flesh into this avowed policy:
Prior Consultations Required. - No project or program shall be implemented by government
authoritiesunless the consultations mentioned in Sections 2 (c) and 26 hereof are complied
with, and prior approval of the sanggunian concerned is obtained: Provided, That occupants
in areas where such projects are to be implemented shall not be evicted unless appropriate

relocation sites have been provided, in accordance with the provisions of the
Constitution.143 (Italics and underscoring supplied)
In Lina, Jr. v. Hon. Paño,144 the Court held that the above-stated policy and above-quoted provision of
the LGU apply only to national programs or projects which are to be implemented in a particular local
community. Among the programs and projects covered are those that are critical to the environment
and human ecology including those that may call for the eviction of a particular group of people
residing in the locality where these will be implemented.145 The MOA-AD is one peculiar program
that unequivocally and unilaterally vests ownership of a vast territory to the Bangsamoro
people,146 which could pervasively and drastically result to the diaspora or displacement of a
great number of inhabitants from their total environment.
With respect to the indigenous cultural communities/indigenous peoples (ICCs/IPs), whose interests
are represented herein by petitioner Lopez and are adversely affected by the MOA-AD, the ICCs/IPs
have, under the IPRA, the right to participate fully at all levels of decision-making in matters which
may affect their rights, lives and destinies.147 The MOA-AD, an instrument recognizing ancestral
domain, failed to justify its non-compliance with the clear-cut mechanisms ordained in said
Act,148 which entails, among other things, the observance of the free and prior informed consent of
the ICCs/IPs.
Notably, the IPRA does not grant the Executive Department or any government agency the power to
delineate and recognize an ancestral domain claim by mere agreement or compromise. The
recognition of the ancestral domain is the raison d'etre of the MOA-AD, without which all other
stipulations or "consensus points" necessarily must fail. In proceeding to make a sweeping
declaration on ancestral domain, without complying with the IPRA, which is cited as one of the TOR
of the MOA-AD, respondents clearly transcended the boundaries of their authority. As it
seems, even the heart of the MOA-AD is still subject to necessary changes to the legal framework.
While paragraph 7 on Governance suspends the effectivity of all provisions requiring changes to the
legal framework, such clause is itself invalid, as will be discussed in the following section.
Indeed, ours is an open society, with all the acts of the government subject to public scrutiny and
available always to public cognizance. This has to be so if the country is to remain democratic, with
sovereignty residing in the people and all government authority emanating from them. 149
ON THE SECOND SUBSTANTIVE ISSUE
With regard to the provisions of the MOA-AD, there can be no question that they cannot all be
accommodated under the present Constitution and laws. Respondents have admitted as much in the
oral arguments before this Court, and the MOA-AD itself recognizes the need to amend the existing
legal framework to render effective at least some of its provisions. Respondents, nonetheless,
counter that the MOA-AD is free of any legal infirmity because any provisions therein which are
inconsistent with the present legal framework will not be effective until the necessary changes to that
framework are made. The validity of this argument will be considered later. For now, the Court shall
pass upon how
The MOA-AD is inconsistent with the Constitution and laws as presently worded.
In general, the objections against the MOA-AD center on the extent of the powers conceded therein
to the BJE. Petitioners assert that the powers granted to the BJE exceed those granted to any local
government under present laws, and even go beyond those of the present ARMM. Before assessing
some of the specific powers that would have been vested in the BJE, however, it would be useful to
turn first to a general idea that serves as a unifying link to the different provisions of the MOA-AD,

namely, the international law concept of association. Significantly, the MOA-AD explicitly alludes to
this concept, indicating that the Parties actually framed its provisions with it in mind.
Association is referred to in paragraph 3 on TERRITORY, paragraph 11 on RESOURCES, and
paragraph 4 on GOVERNANCE. It is in the last mentioned provision, however, that the MOA-AD
most clearly uses it to describe the envisioned relationship between the BJE and the Central
Government.
4. The relationship between the Central Government and the Bangsamoro juridical
entity shall beassociative characterized by shared authority and responsibility with a
structure of governance based on executive, legislative, judicial and administrative
institutions with defined powers and functions in the comprehensive compact. A period of
transition shall be established in a comprehensive peace compact specifying the relationship
between the Central Government and the BJE. (Emphasis and underscoring supplied)
The nature of the "associative" relationship may have been intended to be defined more precisely in
the still to be forged Comprehensive Compact. Nonetheless, given that there is a concept of
"association" in international law, and the MOA-AD - by its inclusion of international law instruments
in its TOR- placed itself in an international legal context, that concept of association may be brought
to bear in understanding the use of the term "associative" in the MOA-AD.
Keitner and Reisman state that
[a]n association is formed when two states of unequal power voluntarily establish durable
links. In the basic model, one state, the associate, delegates certain responsibilities to
the other, the principal, while maintaining its international status as a state. Free
associations represent a middle ground between integration and independence. x x
x150 (Emphasis and underscoring supplied)
For purposes of illustration, the Republic of the Marshall Islands and the Federated States of
Micronesia (FSM), formerly part of the U.S.-administered Trust Territory of the Pacific Islands, 151 are
associated states of the U.S. pursuant to a Compact of Free Association. The currency in these
countries is the U.S. dollar, indicating their very close ties with the U.S., yet they issue their own
travel documents, which is a mark of their statehood. Their international legal status as states was
confirmed by the UN Security Council and by their admission to UN membership.
According to their compacts of free association, the Marshall Islands and the FSM generally have
the capacity to conduct foreign affairs in their own name and right, such capacity extending to
matters such as the law of the sea, marine resources, trade, banking, postal, civil aviation, and
cultural relations. The U.S. government, when conducting its foreign affairs, is obligated to consult
with the governments of the Marshall Islands or the FSM on matters which it (U.S. government)
regards as relating to or affecting either government.
In the event of attacks or threats against the Marshall Islands or the FSM, the U.S. government has
the authority and obligation to defend them as if they were part of U.S. territory. The U.S.
government, moreover, has the option of establishing and using military areas and facilities within
these associated states and has the right to bar the military personnel of any third country from
having access to these territories for military purposes.
It bears noting that in U.S. constitutional and international practice, free association is understood as
an international association between sovereigns. The Compact of Free Association is a treaty which
is subordinate to the associated nation's national constitution, and each party may terminate the

association consistent with the right of independence. It has been said that, with the admission of the
U.S.-associated states to the UN in 1990, the UN recognized that the American model of free
association is actually based on an underlying status of independence. 152
In international practice, the "associated state" arrangement has usually been used as a transitional
device of former colonies on their way to full independence. Examples of states that have passed
through the status of associated states as a transitional phase are Antigua, St. Kitts-Nevis-Anguilla,
Dominica, St. Lucia, St. Vincent and Grenada. All have since become independent states. 153
Back to the MOA-AD, it contains many provisions which are consistent with the international legal
concept ofassociation, specifically the following: the BJE's capacity to enter into economic and trade
relations with foreign countries, the commitment of the Central Government to ensure the BJE's
participation in meetings and events in the ASEAN and the specialized UN agencies, and the
continuing responsibility of the Central Government over external defense. Moreover, the BJE's right
to participate in Philippine official missions bearing on negotiation of border agreements,
environmental protection, and sharing of revenues pertaining to the bodies of water adjacent to or
between the islands forming part of the ancestral domain, resembles the right of the governments of
FSM and the Marshall Islands to be consulted by the U.S. government on any foreign affairs matter
affecting them.
These provisions of the MOA indicate, among other things, that the Parties aimed to vest in the
BJE the status of an associated state or, at any rate, a status closely approximating it.
The concept of association is not recognized under the present Constitution
No province, city, or municipality, not even the ARMM, is recognized under our laws as having an
"associative" relationship with the national government. Indeed, the concept implies powers that go
beyond anything ever granted by the Constitution to any local or regional government. It also implies
the recognition of the associated entity as a state. The Constitution, however, does not contemplate
any state in this jurisdiction other than the Philippine State, much less does it provide for a transitory
status that aims to prepare any part of Philippine territory for independence.
Even the mere concept animating many of the MOA-AD's provisions, therefore, already requires for
its validity the amendment of constitutional provisions, specifically the following provisions of Article
X:
SECTION 1. The territorial and political subdivisions of the Republic of the Philippines are
the provinces, cities, municipalities, and barangays. There shall be autonomous
regions in Muslim Mindanao and the Cordilleras as hereinafter provided.
SECTION 15. There shall be created autonomous regions in Muslim Mindanao and in the
Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing
common and distinctive historical and cultural heritage, economic and social structures, and
other relevant characteristics within the framework of this Constitution and the national
sovereignty as well as territorial integrity of the Republic of the Philippines.
The BJE is a far more powerful
entity than the autonomous region
recognized in the Constitution

It is not merely an expanded version of the ARMM, the status of its relationship with the national
government being fundamentally different from that of the ARMM. Indeed, BJE is a state in all but
name as it meets the criteria of a state laid down in the Montevideo Convention,154 namely,
a permanent population, a defined territory, a government, and a capacity to enter into relations with
other states.
Even assuming arguendo that the MOA-AD would not necessarily sever any portion of Philippine
territory, the spirit animating it - which has betrayed itself by its use of the concept of association
- runs counter to the national sovereignty and territorial integrity of the Republic.
The defining concept underlying the relationship between the national government and the
BJE being itself contrary to the present Constitution, it is not surprising that many of the
specific provisions of the MOA-AD on the formation and powers of the BJE are in conflict
with the Constitution and the laws.
Article X, Section 18 of the Constitution provides that "[t]he creation of the autonomous region shall
be effective when approved by a majority of the votes cast by the constituent units in a plebiscite
called for the purpose, provided that only provinces, cities, and geographic areas voting
favorably in such plebiscite shall be included in the autonomous region." (Emphasis supplied)
As reflected above, the BJE is more of a state than an autonomous region. But even assuming that it
is covered by the term "autonomous region" in the constitutional provision just quoted, the MOA-AD
would still be in conflict with it. Under paragraph 2(c) on TERRITORY in relation to 2(d) and 2(e), the
present geographic area of the ARMM and, in addition, the municipalities of Lanao del Norte which
voted for inclusion in the ARMM during the 2001 plebiscite - Baloi, Munai, Nunungan, Pantar,
Tagoloan and Tangkal - are automatically part of the BJE without need of another plebiscite, in
contrast to the areas under Categories A and B mentioned earlier in the overview. That the present
components of the ARMM and the above-mentioned municipalities voted for inclusion therein in
2001, however, does not render another plebiscite unnecessary under the Constitution, precisely
because what these areas voted for then was their inclusion in the ARMM, not the BJE.
The MOA-AD, moreover, would not
comply with Article X, Section 20 of
the Constitution
since that provision defines the powers of autonomous regions as follows:
SECTION 20. Within its territorial jurisdiction and subject to the provisions of this Constitution
and national laws, the organic act of autonomous regions shall provide for legislative powers
over:
(1) Administrative organization;
(2) Creation of sources of revenues;
(3) Ancestral domain and natural resources;
(4) Personal, family, and property relations;
(5) Regional urban and rural planning development;

(6) Economic, social, and tourism development;
(7) Educational policies;
(8) Preservation and development of the cultural heritage; and
(9) Such other matters as may be authorized by law for the promotion of the general welfare
of the people of the region. (Underscoring supplied)
Again on the premise that the BJE may be regarded as an autonomous region, the MOA-AD would
require an amendment that would expand the above-quoted provision. The mere passage of new
legislation pursuant to sub-paragraph No. 9 of said constitutional provision would not suffice, since
any new law that might vest in the BJE the powers found in the MOA-AD must, itself, comply with
other provisions of the Constitution. It would not do, for instance, to merely pass legislation vesting
the BJE with treaty-making power in order to accommodate paragraph 4 of the strand on
RESOURCES which states: "The BJE is free to enter into any economic cooperation and trade
relations with foreign countries: provided, however, that such relationships and understandings do
not include aggression against the Government of the Republic of the Philippines x x x." Under our
constitutional system, it is only the President who has that power. Pimentel v. Executive
Secretary155 instructs:
In our system of government, the President, being the head of state, is regarded as the sole
organ and authority in external relations and is the country's sole representative with
foreign nations. As the chief architect of foreign policy, the President acts as the country's
mouthpiece with respect to international affairs. Hence, the President is vested with the
authority to deal with foreign states and governments, extend or withhold
recognition, maintain diplomatic relations, enter into treaties, and otherwise transact
the business of foreign relations. In the realm of treaty-making, the President has the
sole authority to negotiate with other states. (Emphasis and underscoring supplied)
Article II, Section 22 of the Constitution must also be amended if the scheme envisioned in
the MOA-AD is to be effected. That constitutional provision states: "The State recognizes and
promotes the rights ofindigenous cultural communities within the framework of national unity and
development." (Underscoring supplied) An associative arrangement does not uphold national unity.
While there may be a semblance of unity because of the associative ties between the BJE and the
national government, the act of placing a portion of Philippine territory in a status which, in
international practice, has generally been a preparation for independence, is certainly not conducive
to national unity.
Besides being irreconcilable with the Constitution, the MOA-AD is also inconsistent with prevailing
statutory law, among which are R.A. No. 9054156 or the Organic Act of the ARMM, and the IPRA.157
Article X, Section 3 of the Organic Act of the ARMM is a bar to the adoption of the definition
of "Bangsamoro people" used in the MOA-AD. Paragraph 1 on Concepts and Principles states:
1. It is the birthright of all Moros and all Indigenous peoples of Mindanao to identify
themselves and be accepted as "Bangsamoros". The Bangsamoro people refers to those
who are natives or original inhabitants of Mindanao and its adjacent islands including
Palawan and the Sulu archipelago at the time of conquest or colonization of its descendants
whether mixed or of full blood. Spouses and their descendants are classified as
Bangsamoro. The freedom of choice of the Indigenous people shall be respected. (Emphasis
and underscoring supplied)

This use of the term Bangsamoro sharply contrasts with that found in the Article X, Section 3 of the
Organic Act, which, rather than lumping together the identities of the Bangsamoro and other
indigenous peoples living in Mindanao, clearly distinguishes between Bangsamoro people and
Tribal peoples, as follows:
"As used in this Organic Act, the phrase "indigenous cultural community" refers to Filipino
citizens residing in the autonomous region who are:
(a) Tribal peoples. These are citizens whose social, cultural and economic conditions
distinguish them from other sectors of the national community; and
(b) Bangsa Moro people. These are citizens who are believers in Islam and who have
retained some or all of their own social, economic, cultural, and political institutions."
Respecting the IPRA, it lays down the prevailing procedure for the delineation and recognition of
ancestral domains. The MOA-AD's manner of delineating the ancestral domain of the Bangsamoro
people is a clear departure from that procedure. By paragraph 1 of Territory, the Parties simply agree
that, subject to the delimitations in the agreed Schedules, "[t]he Bangsamoro homeland and historic
territory refer to the land mass as well as the maritime, terrestrial, fluvial and alluvial domains, and
the aerial domain, the atmospheric space above it, embracing the Mindanao-Sulu-Palawan
geographic region."
Chapter VIII of the IPRA, on the other hand, lays down a detailed procedure, as illustrated in the
following provisions thereof:
SECTION 52. Delineation Process. - The identification and delineation of ancestral domains
shall be done in accordance with the following procedures:
xxxx
b) Petition for Delineation. - The process of delineating a specific perimeter may be initiated
by the NCIP with the consent of the ICC/IP concerned, or through a Petition for Delineation
filed with the NCIP, by a majority of the members of the ICCs/IPs;
c) Delineation Proper. - The official delineation of ancestral domain boundaries including
census of all community members therein, shall be immediately undertaken by the Ancestral
Domains Office upon filing of the application by the ICCs/IPs concerned. Delineation will be
done in coordination with the community concerned and shall at all times include genuine
involvement and participation by the members of the communities concerned;
d) Proof Required. - Proof of Ancestral Domain Claims shall include the testimony of elders
or community under oath, and other documents directly or indirectly attesting to the
possession or occupation of the area since time immemorial by such ICCs/IPs in the concept
of owners which shall be any one (1) of the following authentic documents:
1) Written accounts of the ICCs/IPs customs and traditions;
2) Written accounts of the ICCs/IPs political structure and institution;
3) Pictures showing long term occupation such as those of old improvements, burial
grounds, sacred places and old villages;

4) Historical accounts, including pacts and agreements concerning boundaries
entered into by the ICCs/IPs concerned with other ICCs/IPs;
5) Survey plans and sketch maps;
6) Anthropological data;
7) Genealogical surveys;
8) Pictures and descriptive histories of traditional communal forests and hunting
grounds;
9) Pictures and descriptive histories of traditional landmarks such as mountains,
rivers, creeks, ridges, hills, terraces and the like; and
10) Write-ups of names and places derived from the native dialect of the community.
e) Preparation of Maps. - On the basis of such investigation and the findings of fact based
thereon, the Ancestral Domains Office of the NCIP shall prepare a perimeter map, complete
with technical descriptions, and a description of the natural features and landmarks
embraced therein;
f) Report of Investigation and Other Documents. - A complete copy of the preliminary census
and a report of investigation, shall be prepared by the Ancestral Domains Office of the NCIP;
g) Notice and Publication. - A copy of each document, including a translation in the native
language of the ICCs/IPs concerned shall be posted in a prominent place therein for at least
fifteen (15) days. A copy of the document shall also be posted at the local, provincial and
regional offices of the NCIP, and shall be published in a newspaper of general circulation
once a week for two (2) consecutive weeks to allow other claimants to file opposition thereto
within fifteen (15) days from date of such publication: Provided, That in areas where no such
newspaper exists, broadcasting in a radio station will be a valid substitute: Provided, further,
That mere posting shall be deemed sufficient if both newspaper and radio station are not
available;
h) Endorsement to NCIP. - Within fifteen (15) days from publication, and of the inspection
process, the Ancestral Domains Office shall prepare a report to the NCIP endorsing a
favorable action upon a claim that is deemed to have sufficient proof. However, if the proof is
deemed insufficient, the Ancestral Domains Office shall require the submission of additional
evidence: Provided, That the Ancestral Domains Office shall reject any claim that is deemed
patently false or fraudulent after inspection and verification: Provided, further, That in case of
rejection, the Ancestral Domains Office shall give the applicant due notice, copy furnished all
concerned, containing the grounds for denial. The denial shall be appealable to the NCIP:
Provided, furthermore, That in cases where there are conflicting claims among ICCs/IPs on
the boundaries of ancestral domain claims, the Ancestral Domains Office shall cause the
contending parties to meet and assist them in coming up with a preliminary resolution of the
conflict, without prejudice to its full adjudication according to the section below.
xxxx

To remove all doubts about the irreconcilability of the MOA-AD with the present legal system, a
discussion of not only the Constitution and domestic statutes, but also of international law is in order,
for
Article II, Section 2 of the Constitution states that the Philippines "adopts the generally
accepted principles of international law as part of the law of the land."
Applying this provision of the Constitution, the Court, in Mejoff v. Director of Prisons,158 held that the
Universal Declaration of Human Rights is part of the law of the land on account of which it ordered
the release on bail of a detained alien of Russian descent whose deportation order had not been
executed even after two years. Similarly, the Court in Agustin v. Edu159 applied the aforesaid
constitutional provision to the 1968 Vienna Convention on Road Signs and Signals.
International law has long recognized the right to self-determination of "peoples," understood not
merely as the entire population of a State but also a portion thereof. In considering the question of
whether the people of Quebec had a right to unilaterally secede from Canada, the Canadian
Supreme Court in REFERENCE RE SECESSION OF QUEBEC160 had occasion to acknowledge that
"the right of a people to self-determination is now so widely recognized in international conventions
that the principle has acquired a status beyond ‘convention' and is considered a general principle of
international law."
Among the conventions referred to are the International Covenant on Civil and Political Rights 161 and
the International Covenant on Economic, Social and Cultural Rights 162 which state, in Article 1 of both
covenants, that all peoples, by virtue of the right of self-determination, "freely determine their political
status and freely pursue their economic, social, and cultural development."
The people's right to self-determination should not, however, be understood as extending to a
unilateral right of secession. A distinction should be made between the right of internal and external
self-determination. REFERENCE RE SECESSION OF QUEBEC is again instructive:
"(ii) Scope of the Right to Self-determination
126. The recognized sources of international law establish that the right to selfdetermination of a people is normally fulfilled through internal self-determination - a
people's pursuit of its political, economic, social and cultural development within the
framework of an existing state. A right toexternal self-determination (which in this
case potentially takes the form of the assertion of a right to unilateral secession)
arises in only the most extreme of cases and, even then, under carefully defined
circumstances. x x x
External self-determination can be defined as in the following statement from
the Declaration on Friendly Relations, supra, as
The establishment of a sovereign and independent State, the free association or
integration with an independent State or the emergence into any other political status
freely determined by apeople constitute modes of implementing the right of selfdetermination by that people. (Emphasis added)
127. The international law principle of self-determination has evolved within a
framework of respect for the territorial integrity of existing states. The various
international documents that support the existence of a people's right to self-determination

also contain parallel statements supportive of the conclusion that the exercise of such a right
must be sufficiently limited to prevent threats to an existing state's territorial integrity or the
stability of relations between sovereign states.
x x x x (Emphasis, italics and underscoring supplied)
The Canadian Court went on to discuss the exceptional cases in which the right to external selfdetermination can arise, namely, where a people is under colonial rule, is subject to foreign
domination or exploitation outside a colonial context, and - less definitely but asserted by a number
of commentators - is blocked from the meaningful exercise of its right to internal self-determination.
The Court ultimately held that the population of Quebec had no right to secession, as the same is
not under colonial rule or foreign domination, nor is it being deprived of the freedom to make political
choices and pursue economic, social and cultural development, citing that Quebec is equitably
represented in legislative, executive and judicial institutions within Canada, even occupying
prominent positions therein.
The exceptional nature of the right of secession is further exemplified in the REPORT OF THE
INTERNATIONAL COMMITTEE OF JURISTS ON THE LEGAL ASPECTS OF THE AALAND
ISLANDS QUESTION.163 There, Sweden presented to the Council of the League of Nations the
question of whether the inhabitants of the Aaland Islands should be authorized to determine by
plebiscite if the archipelago should remain under Finnish sovereignty or be incorporated in the
kingdom of Sweden. The Council, before resolving the question, appointed an International
Committee composed of three jurists to submit an opinion on the preliminary issue of whether the
dispute should, based on international law, be entirely left to the domestic jurisdiction of Finland. The
Committee stated the rule as follows:
x x x [I]n the absence of express provisions in international treaties, the right of disposing
of national territory is essentially an attribute of the sovereignty of every State.
Positive International Law does not recognize the right of national groups, as such, to
separate themselves from the State of which they form part by the simple expression
of a wish, any more than it recognizes the right of other States to claim such a
separation. Generally speaking, the grant or refusal of the right to a portion of its
population of determining its own political fate by plebiscite or by some other method,
is, exclusively, an attribute of the sovereignty of every State which is definitively
constituted. A dispute between two States concerning such a question, under normal
conditions therefore, bears upon a question which International Law leaves entirely to the
domestic jurisdiction of one of the States concerned. Any other solution would amount to an
infringement of sovereign rights of a State and would involve the risk of creating difficulties
and a lack of stability which would not only be contrary to the very idea embodied in term
"State," but would also endanger the interests of the international community. If this right is
not possessed by a large or small section of a nation, neither can it be held by the State to
which the national group wishes to be attached, nor by any other State. (Emphasis and
underscoring supplied)
The Committee held that the dispute concerning the Aaland Islands did not refer to a question which
is left by international law to the domestic jurisdiction of Finland, thereby applying the exception
rather than the rule elucidated above. Its ground for departing from the general rule, however, was a
very narrow one, namely, the Aaland Islands agitation originated at a time when Finland was
undergoing drastic political transformation. The internal situation of Finland was, according to the
Committee, so abnormal that, for a considerable time, the conditions required for the formation of a
sovereign State did not exist. In the midst of revolution, anarchy, and civil war, the legitimacy of the
Finnish national government was disputed by a large section of the people, and it had, in fact, been

chased from the capital and forcibly prevented from carrying out its duties. The armed camps and
the police were divided into two opposing forces. In light of these circumstances, Finland was not,
during the relevant time period, a "definitively constituted" sovereign state. The Committee,
therefore, found that Finland did not possess the right to withhold from a portion of its population the
option to separate itself - a right which sovereign nations generally have with respect to their own
populations.
Turning now to the more specific category of indigenous peoples, this term has been used, in
scholarship as well as international, regional, and state practices, to refer to groups with distinct
cultures, histories, and connections to land (spiritual and otherwise) that have been forcibly
incorporated into a larger governing society. These groups are regarded as "indigenous" since they
are the living descendants of pre-invasion inhabitants of lands now dominated by others. Otherwise
stated, indigenous peoples, nations, or communities are culturally distinctive groups that find
themselves engulfed by settler societies born of the forces of empire and conquest. 164 Examples of
groups who have been regarded as indigenous peoples are the Maori of New Zealand and the
aboriginal peoples of Canada.
As with the broader category of "peoples," indigenous peoples situated within states do not have a
general right to independence or secession from those states under international law,165 but they do
have rights amounting to what was discussed above as the right to internal self-determination.
In a historic development last September 13, 2007, the UN General Assembly adopted the United
Nations Declaration on the Rights of Indigenous Peoples (UN DRIP) through General Assembly
Resolution 61/295. The vote was 143 to 4, the Philippines being included among those in favor,
and the four voting against being Australia, Canada, New Zealand, and the U.S. The Declaration
clearly recognized the right of indigenous peoples to self-determination, encompassing the
right to autonomy or self-government, to wit:
Article 3
Indigenous peoples have the right to self-determination. By virtue of that right they freely
determine their political status and freely pursue their economic, social and cultural
development.
Article 4
Indigenous peoples, in exercising their right to self-determination, have the right
to autonomy or self-government in matters relating to their internal and local affairs,
as well as ways and means for financing their autonomous functions.
Article 5
Indigenous peoples have the right to maintain and strengthen their distinct political, legal,
economic, social and cultural institutions, while retaining their right to participate fully, if they
so choose, in the political, economic, social and cultural life of the State.
Self-government, as used in international legal discourse pertaining to indigenous peoples, has been
understood as equivalent to "internal self-determination."166 The extent of self-determination provided
for in the UN DRIP is more particularly defined in its subsequent articles, some of which are quoted
hereunder:

Article 8
1. Indigenous peoples and individuals have the right not to be subjected to forced
assimilation or destruction of their culture.
2. States shall provide effective mechanisms for prevention of, and redress for:
(a) Any action which has the aim or effect of depriving them of their integrity as
distinct peoples, or of their cultural values or ethnic identities;
(b) Any action which has the aim or effect of dispossessing them of their lands,
territories or resources;
(c) Any form of forced population transfer which has the aim or effect of violating or
undermining any of their rights;
(d) Any form of forced assimilation or integration;
(e) Any form of propaganda designed to promote or incite racial or ethnic
discrimination directed against them.
Article 21
1. Indigenous peoples have the right, without discrimination, to the improvement of their
economic and social conditions, including, inter alia, in the areas of education, employment,
vocational training and retraining, housing, sanitation, health and social security.
2. States shall take effective measures and, where appropriate, special measures to ensure
continuing improvement of their economic and social conditions. Particular attention shall be
paid to the rights and special needs of indigenous elders, women, youth, children and
persons with disabilities.
Article 26
1. Indigenous peoples have the right to the lands, territories and resources which they
have traditionally owned, occupied or otherwise used or acquired.
2. Indigenous peoples have the right to own, use, develop and control the lands, territories
and resources that they possess by reason of traditional ownership or other traditional
occupation or use, as well as those which they have otherwise acquired.
3. States shall give legal recognition and protection to these lands, territories and resources.
Such recognition shall be conducted with due respect to the customs, traditions and land
tenure systems of the indigenous peoples concerned.
Article 30
1. Military activities shall not take place in the lands or territories of indigenous peoples,
unless justified by a relevant public interest or otherwise freely agreed with or requested by
the indigenous peoples concerned.

2. States shall undertake effective consultations with the indigenous peoples concerned,
through appropriate procedures and in particular through their representative institutions,
prior to using their lands or territories for military activities.
Article 32
1. Indigenous peoples have the right to determine and develop priorities and strategies for
the development or use of their lands or territories and other resources.
2. States shall consult and cooperate in good faith with the indigenous peoples concerned
through their own representative institutions in order to obtain their free and informed
consent prior to the approval of any project affecting their lands or territories and other
resources, particularly in connection with the development, utilization or exploitation of
mineral, water or other resources.
3. States shall provide effective mechanisms for just and fair redress for any such activities,
and appropriate measures shall be taken to mitigate adverse environmental, economic,
social, cultural or spiritual impact.
Article 37
1. Indigenous peoples have the right to the recognition, observance and enforcement of
treaties, agreements and other constructive arrangements concluded with States or their
successors and to have States honour and respect such treaties, agreements and other
constructive arrangements.
2. Nothing in this Declaration may be interpreted as diminishing or eliminating the rights of
indigenous peoples contained in treaties, agreements and other constructive arrangements.
Article 38
States in consultation and cooperation with indigenous peoples, shall take the appropriate
measures, including legislative measures, to achieve the ends of this Declaration.
Assuming that the UN DRIP, like the Universal Declaration on Human Rights, must now be regarded
as embodying customary international law - a question which the Court need not definitively resolve
here - the obligations enumerated therein do not strictly require the Republic to grant the
Bangsamoro people, through the instrumentality of the BJE, the particular rights and powers
provided for in the MOA-AD. Even the more specific provisions of the UN DRIP are general in scope,
allowing for flexibility in its application by the different States.
There is, for instance, no requirement in the UN DRIP that States now guarantee indigenous
peoples their own police and internal security force. Indeed, Article 8 presupposes that it is the State
which will provide protection for indigenous peoples against acts like the forced dispossession of
their lands - a function that is normally performed by police officers. If the protection of a right so
essential to indigenous people's identity is acknowledged to be the responsibility of the State, then
surely the protection of rights less significant to them as such peoples would also be the duty of
States. Nor is there in the UN DRIP an acknowledgement of the right of indigenous peoples to the
aerial domain and atmospheric space. What it upholds, in Article 26 thereof, is the right of
indigenous peoples to the lands, territories and resources which they have traditionally owned,
occupied or otherwise used or acquired.

Moreover, the UN DRIP, while upholding the right of indigenous peoples to autonomy, does not
obligate States to grant indigenous peoples the near-independent status of an associated state. All
the rights recognized in that document are qualified in Article 46 as follows:
1. Nothing in this Declaration may be interpreted as implying for any State, people, group
or person any right to engage in any activity or to perform any act contrary to the Charter of
the United Nations orconstrued as authorizing or encouraging any action which would
dismember or impair, totally or in part, the territorial integrity or political unity of
sovereign and independent States.
Even if the UN DRIP were considered as part of the law of the land pursuant to Article II, Section 2 of
the Constitution, it would not suffice to uphold the validity of the MOA-AD so as to render its
compliance with other laws unnecessary.
It is, therefore, clear that the MOA-AD contains numerous provisions that cannot be
reconciled with the Constitution and the laws as presently worded. Respondents proffer,
however, that the signing of the MOA-AD alone would not have entailed any violation of law or grave
abuse of discretion on their part, precisely because it stipulates that the provisions thereof
inconsistent with the laws shall not take effect until these laws are amended. They cite paragraph 7
of the MOA-AD strand on GOVERNANCE quoted earlier, but which is reproduced below for
convenience:
7. The Parties agree that the mechanisms and modalities for the actual implementation of
this MOA-AD shall be spelt out in the Comprehensive Compact to mutually take such steps
to enable it to occur effectively.
Any provisions of the MOA-AD requiring amendments to the existing legal framework shall
come into force upon signing of a Comprehensive Compact and upon effecting the
necessary changes to the legal framework with due regard to non derogation of prior
agreements and within the stipulated timeframe to be contained in the Comprehensive
Compact.
Indeed, the foregoing stipulation keeps many controversial provisions of the MOA-AD from coming
into force until the necessary changes to the legal framework are effected. While the word
"Constitution" is not mentioned in the provision now under consideration or anywhere else
in the MOA-AD, the term "legal framework" is certainly broad enough to include the
Constitution.
Notwithstanding the suspensive clause, however, respondents, by their mere act of incorporating in
the MOA-AD the provisions thereof regarding the associative relationship between the BJE and the
Central Government, have already violated the Memorandum of Instructions From The President
dated March 1, 2001, which states that the "negotiations shall be conducted in accordance with x x x
the principles of the sovereignty and territorial integrityof the Republic of the Philippines."
(Emphasis supplied) Establishing an associative relationship between the BJE and the Central
Government is, for the reasons already discussed, a preparation for independence, or worse, an
implicit acknowledgment of an independent status already prevailing.
Even apart from the above-mentioned Memorandum, however, the MOA-AD is defective because
the suspensive clause is invalid, as discussed below.
The authority of the GRP Peace Negotiating Panel to negotiate with the MILF is founded on E.O. No.
3, Section 5(c), which states that there shall be established Government Peace Negotiating Panels

for negotiations with different rebel groups to be "appointed by the President as her official
emissaries to conduct negotiations, dialogues, and face-to-face discussions with rebel groups."
These negotiating panels are to report to the President, through the PAPP on the conduct and
progress of the negotiations.
It bears noting that the GRP Peace Panel, in exploring lasting solutions to the Moro Problem through
its negotiations with the MILF, was not restricted by E.O. No. 3 only to those options available under
the laws as they presently stand. One of the components of a comprehensive peace process, which
E.O. No. 3 collectively refers to as the "Paths to Peace," is the pursuit of social, economic, and
political reforms which may require new legislation or even constitutional amendments. Sec. 4(a) of
E.O. No. 3, which reiterates Section 3(a), of E.O. No. 125, 167 states:
SECTION 4. The Six Paths to Peace. - The components of the comprehensive peace
process comprise the processes known as the "Paths to Peace". These component
processes are interrelated and not mutually exclusive, and must therefore be pursued
simultaneously in a coordinated and integrated fashion. They shall include, but may not be
limited to, the following:
a. PURSUIT OF SOCIAL, ECONOMIC AND POLITICAL REFORMS. This component
involves the vigorous implementation of various policies, reforms, programs and
projects aimed at addressing the root causes of internal armed conflicts and social
unrest. This may require administrative action, new legislation or even constitutional
amendments.
x x x x (Emphasis supplied)
The MOA-AD, therefore, may reasonably be perceived as an attempt of respondents to address,
pursuant to this provision of E.O. No. 3, the root causes of the armed conflict in Mindanao. The E.O.
authorized them to "think outside the box," so to speak. Hence, they negotiated and were set on
signing the MOA-AD that included various social, economic, and political reforms which cannot,
however, all be accommodated within the present legal framework, and which thus would require
new legislation and constitutional amendments.
The inquiry on the legality of the "suspensive clause," however, cannot stop here, because it must
be askedwhether the President herself may exercise the power delegated to the GRP Peace
Panel under E.O. No. 3, Sec. 4(a).
The President cannot delegate a power that she herself does not possess. May the President, in the
course of peace negotiations, agree to pursue reforms that would require new legislation and
constitutional amendments, or should the reforms be restricted only to those solutions which the
present laws allow? The answer to this question requires a discussion of the extent of the
President's power to conduct peace negotiations.
That the authority of the President to conduct peace negotiations with rebel groups is not explicitly
mentioned in the Constitution does not mean that she has no such authority. In Sanlakas v.
Executive Secretary,168 in issue was the authority of the President to declare a state of rebellion - an
authority which is not expressly provided for in the Constitution. The Court held thus:
"In her ponencia in Marcos v. Manglapus, Justice Cortes put her thesis into jurisprudence.
There, the Court, by a slim 8-7 margin, upheld the President's power to forbid the return of
her exiled predecessor. The rationale for the majority's ruling rested on the President's

. . . unstated residual powers which are implied from the grant of executive
power and which are necessary for her to comply with her duties under the
Constitution. The powers of the President are not limited to what are expressly
enumerated in the article on the Executive Department and in scattered
provisions of the Constitution. This is so, notwithstanding the avowed intent of the
members of the Constitutional Commission of 1986 to limit the powers of the
President as a reaction to the abuses under the regime of Mr. Marcos, for the result
was a limitation of specific powers of the President, particularly those relating to the
commander-in-chief clause, but not a diminution of the general grant of executive
power.
Thus, the President's authority to declare a state of rebellion springs in the main from
her powers as chief executive and, at the same time, draws strength from her
Commander-in-Chief powers. x x x (Emphasis and underscoring supplied)
Similarly, the President's power to conduct peace negotiations is implicitly included in her powers as
Chief Executive and Commander-in-Chief. As Chief Executive, the President has the general
responsibility to promote public peace, and as Commander-in-Chief, she has the more specific duty
to prevent and suppress rebellion and lawless violence.169
As the experience of nations which have similarly gone through internal armed conflict will show,
however, peace is rarely attained by simply pursuing a military solution. Oftentimes, changes as farreaching as a fundamental reconfiguration of the nation's constitutional structure is required. The
observations of Dr. Kirsti Samuels are enlightening, to wit:
x x x [T]he fact remains that a successful political and governance transition must form the
core of any post-conflict peace-building mission. As we have observed in Liberia and Haiti
over the last ten years, conflict cessation without modification of the political environment,
even where state-building is undertaken through technical electoral assistance and
institution- or capacity-building, is unlikely to succeed. On average, more than 50 percent of
states emerging from conflict return to conflict. Moreover, a substantial proportion of
transitions have resulted in weak or limited democracies.
The design of a constitution and its constitution-making process can play an important role in
the political and governance transition. Constitution-making after conflict is an opportunity to
create a common vision of the future of a state and a road map on how to get there. The
constitution can be partly a peace agreement and partly a framework setting up the rules by
which the new democracy will operate.170
In the same vein, Professor Christine Bell, in her article on the nature and legal status of peace
agreements, observed that the typical way that peace agreements establish or confirm mechanisms
for demilitarization and demobilization is by linking them to new constitutional
structures addressing governance, elections, and legal and human rights institutions. 171
In the Philippine experience, the link between peace agreements and constitution-making has been
recognized by no less than the framers of the Constitution. Behind the provisions of the Constitution
on autonomous regions172is the framers' intention to implement a particular peace agreement,
namely, the Tripoli Agreement of 1976 between the GRP and the MNLF, signed by then
Undersecretary of National Defense Carmelo Z. Barbero and then MNLF Chairman Nur Misuari.

MR. ROMULO. There are other speakers; so, although I have some more questions, I will
reserve my right to ask them if they are not covered by the other speakers. I have only two
questions.
I heard one of the Commissioners say that local autonomy already exists in the
Muslim region; it is working very well; it has, in fact, diminished a great deal of the
problems. So, my question is: since that already exists, why do we have to go into
something new?
MR. OPLE. May I answer that on behalf of Chairman Nolledo. Commissioner Yusup
Abubakar is right thatcertain definite steps have been taken to implement the provisions
of the Tripoli Agreement with respect to an autonomous region in Mindanao. This is a
good first step, but there is no question that this is merely a partial response to the
Tripoli Agreement itself and to the fuller standard of regional autonomy contemplated
in that agreement, and now by state policy.173(Emphasis supplied)
The constitutional provisions on autonomy and the statutes enacted pursuant to them have, to the
credit of their drafters, been partly successful. Nonetheless, the Filipino people are still faced with
the reality of an on-going conflict between the Government and the MILF. If the President is to be
expected to find means for bringing this conflict to an end and to achieve lasting peace in Mindanao,
then she must be given the leeway to explore, in the course of peace negotiations, solutions that
may require changes to the Constitution for their implementation. Being uniquely vested with the
power to conduct peace negotiations with rebel groups, the President is in a singular position to
know the precise nature of their grievances which, if resolved, may bring an end to hostilities.
The President may not, of course, unilaterally implement the solutions that she considers viable, but
she may not be prevented from submitting them as recommendations to Congress, which could
then, if it is minded, act upon them pursuant to the legal procedures for constitutional amendment
and revision. In particular, Congress would have the option, pursuant to Article XVII, Sections 1 and
3 of the Constitution, to propose the recommended amendments or revision to the people, call a
constitutional convention, or submit to the electorate the question of calling such a convention.
While the President does not possess constituent powers - as those powers may be exercised only
by Congress, a Constitutional Convention, or the people through initiative and referendum - she may
submit proposals for constitutional change to Congress in a manner that does not involve the
arrogation of constituent powers.
In Sanidad v. COMELEC,174 in issue was the legality of then President Marcos' act of directly
submitting proposals for constitutional amendments to a referendum, bypassing the interim National
Assembly which was the body vested by the 1973 Constitution with the power to propose such
amendments. President Marcos, it will be recalled, never convened the interim National Assembly.
The majority upheld the President's act, holding that "the urges of absolute necessity" compelled the
President as the agent of the people to act as he did, there being no interim National Assembly to
propose constitutional amendments. Against this ruling, Justices Teehankee and Muñoz Palma
vigorously dissented. The Court's concern at present, however, is not with regard to the point on
which it was then divided in that controversial case, but on that which was not disputed by either
side.
Justice Teehankee's dissent,175 in particular, bears noting. While he disagreed that the President may
directly submit proposed constitutional amendments to a referendum, implicit in his opinion is a
recognition that he would have upheld the President's action along with the majority had the

President convened the interim National Assembly and coursed his proposals through it. Thus
Justice Teehankee opined:
"Since the Constitution provides for the organization of the essential departments of
government, defines and delimits the powers of each and prescribes the manner of the
exercise of such powers, and the constituent power has not been granted to but has been
withheld from the President or Prime Minister, it follows that the President's questioned
decrees proposing and submitting constitutional amendments directly to the people (without
the intervention of the interim National Assembly in whom the power is expressly
vested) are devoid of constitutional and legal basis."176 (Emphasis supplied)
From the foregoing discussion, the principle may be inferred that the President - in the course of
conducting peace negotiations - may validly consider implementing even those policies that require
changes to the Constitution, but she may not unilaterally implement them without the intervention
of Congress, or act in any way as if the assent of that body were assumed as a certainty.
Since, under the present Constitution, the people also have the power to directly propose
amendments through initiative and referendum, the President may also submit her
recommendations to the people, not as a formal proposal to be voted on in a plebiscite similar to
what President Marcos did in Sanidad, but for their independent consideration of whether these
recommendations merit being formally proposed through initiative.
These recommendations, however, may amount to nothing more than the President's suggestions to
the people, for any further involvement in the process of initiative by the Chief Executive may vitiate
its character as a genuine "people's initiative." The only initiative recognized by the Constitution is
that which truly proceeds from the people. As the Court stated in Lambino v. COMELEC:177
"The Lambino Group claims that their initiative is the ‘people's voice.' However, the Lambino
Group unabashedly states in ULAP Resolution No. 2006-02, in the verification of their
petition with the COMELEC, that ‘ULAP maintains its unqualified support to the agenda of
Her Excellency President Gloria Macapagal-Arroyo for constitutional reforms.' The Lambino
Group thus admits that their ‘people's' initiative is an ‘unqualified support to the
agenda' of the incumbent President to change the Constitution. This forewarns the Court to
be wary of incantations of ‘people's voice' or ‘sovereign will' in the present initiative."
It will be observed that the President has authority, as stated in her oath of office, 178 only to preserve
and defend the Constitution. Such presidential power does not, however, extend to allowing her to
change the Constitution, but simply to recommend proposed amendments or revision. As long as
she limits herself to recommending these changes and submits to the proper procedure for
constitutional amendments and revision, her mere recommendation need not be construed as an
unconstitutional act.
The foregoing discussion focused on the President's authority to
propose constitutional amendments, since her authority to propose new legislation is not in
controversy. It has been an accepted practice for Presidents in this jurisdiction to propose new
legislation. One of the more prominent instances the practice is usually done is in the yearly State of
the Nation Address of the President to Congress. Moreover, the annual general appropriations bill
has always been based on the budget prepared by the President, which - for all intents and
purposes - is a proposal for new legislation coming from the President. 179
The "suspensive clause" in the MOA-AD viewed in light of the above-discussed standards

Given the limited nature of the President's authority to propose constitutional amendments,
she cannot guarantee to any third party that the required amendments will eventually be put in
place, nor even be submitted to a plebiscite. The most she could do is submit these proposals as
recommendations either to Congress or the people, in whom constituent powers are vested.
Paragraph 7 on Governance of the MOA-AD states, however, that all provisions thereof which
cannot be reconciled with the present Constitution and laws "shall come into force upon signing of a
Comprehensive Compact and upon effecting the necessary changes to the legal framework." This
stipulation does not bear the marks of a suspensive condition - defined in civil law as a future
and uncertain event - but of a term. It is not a question of whether the necessary changes to the
legal framework will be effected, but when. That there is no uncertainty being contemplated is plain
from what follows, for the paragraph goes on to state that the contemplated changes shall be "with
due regard to non derogation of prior agreements and within the stipulated timeframe to be
contained in the Comprehensive Compact."
Pursuant to this stipulation, therefore, it is mandatory for the GRP to effect the changes to the legal
framework contemplated in the MOA-AD - which changes would include constitutional amendments,
as discussed earlier. It bears noting that,
By the time these changes are put in place, the MOA-AD itself would be counted among the
"prior agreements" from which there could be no derogation.
What remains for discussion in the Comprehensive Compact would merely be the implementing
details for these "consensus points" and, notably, the deadline for effecting the contemplated
changes to the legal framework.
Plainly, stipulation-paragraph 7 on GOVERNANCE is inconsistent with the limits of the
President's authority to propose constitutional amendments, it being a virtual guarantee that
the Constitution and the laws of the Republic of the Philippines will certainly be adjusted to conform
to all the "consensus points" found in the MOA-AD. Hence, it must be struck down
as unconstitutional.
A comparison between the "suspensive clause" of the MOA-AD with a similar provision appearing in
the 1996 final peace agreement between the MNLF and the GRP is most instructive.
As a backdrop, the parties to the 1996 Agreement stipulated that it would be implemented in two
phases. Phase Icovered a three-year transitional period involving the putting up of new
administrative structures through Executive Order, such as the Special Zone of Peace and
Development (SZOPAD) and the Southern Philippines Council for Peace and Development
(SPCPD), while Phase II covered the establishment of the new regional autonomous
government through amendment or repeal of R.A. No. 6734, which was then the Organic Act of the
ARMM.
The stipulations on Phase II consisted of specific agreements on the structure of the expanded
autonomous region envisioned by the parties. To that extent, they are similar to the provisions of the
MOA-AD. There is, however, a crucial difference between the two agreements. While the MOAAD virtually guarantees that the "necessary changes to the legal framework" will be put in
place, the GRP-MNLF final peace agreement states thus: "Accordingly, these provisions [on Phase
II] shall be recommended by the GRP to Congress for incorporation in the amendatory or repealing
law."

Concerns have been raised that the MOA-AD would have given rise to a binding international law
obligation on the part of the Philippines to change its Constitution in conformity thereto, on the
ground that it may be considered either as a binding agreement under international law, or a
unilateral declaration of the Philippine government to the international community that it would grant
to the Bangsamoro people all the concessions therein stated. Neither ground finds sufficient support
in international law, however.
The MOA-AD, as earlier mentioned in the overview thereof, would have included foreign dignitaries
as signatories. In addition, representatives of other nations were invited to witness its signing in
Kuala Lumpur. These circumstances readily lead one to surmise that the MOA-AD would have had
the status of a binding international agreement had it been signed. An examination of the prevailing
principles in international law, however, leads to the contrary conclusion.
The Decision on Challenge to Jurisdiction: Lomé Accord Amnesty180 (the Lomé Accord case) of the
Special Court of Sierra Leone is enlightening. The Lomé Accord was a peace agreement signed on
July 7, 1999 between the Government of Sierra Leone and the Revolutionary United Front (RUF), a
rebel group with which the Sierra Leone Government had been in armed conflict for around eight
years at the time of signing. There were non-contracting signatories to the agreement, among which
were the Government of the Togolese Republic, the Economic Community of West African States,
and the UN.
On January 16, 2002, after a successful negotiation between the UN Secretary-General and the
Sierra Leone Government, another agreement was entered into by the UN and that Government
whereby the Special Court of Sierra Leone was established. The sole purpose of the Special Court,
an international court, was to try persons who bore the greatest responsibility for serious violations of
international humanitarian law and Sierra Leonean law committed in the territory of Sierra Leone
since November 30, 1996.
Among the stipulations of the Lomé Accord was a provision for the full pardon of the members of the
RUF with respect to anything done by them in pursuit of their objectives as members of that
organization since the conflict began.
In the Lomé Accord case, the Defence argued that the Accord created an internationally
binding obligation not to prosecute the beneficiaries of the amnesty provided therein, citing, among
other things, the participation of foreign dignitaries and international organizations in the finalization
of that agreement. The Special Court, however, rejected this argument, ruling that the Lome Accord
is not a treaty and that it can only create binding obligations and rights between the parties in
municipal law, not in international law. Hence, the Special Court held, it is ineffective in depriving an
international court like it of jurisdiction.
"37. In regard to the nature of a negotiated settlement of an internal armed conflict it is easy
to assume and to argue with some degree of plausibility, as Defence counsel for the
defendants seem to have done, that the mere fact that in addition to the parties to the
conflict, the document formalizing the settlement is signed by foreign heads of state
or their representatives and representatives of international organizations, means the
agreement of the parties is internationalized so as to create obligations in
international law.
xxxx
40. Almost every conflict resolution will involve the parties to the conflict and the mediator or
facilitator of the settlement, or persons or bodies under whose auspices the settlement took

place but who are not at all parties to the conflict, are not contracting parties and who do not
claim any obligation from the contracting parties or incur any obligation from the settlement.
41. In this case, the parties to the conflict are the lawful authority of the State and the
RUF which has no status of statehood and is to all intents and purposes a faction
within the state. The non-contracting signatories of the Lomé Agreement were moral
guarantors of the principle that, in the terms of Article XXXIV of the Agreement, "this
peace agreement is implemented with integrity and in good faith by both parties". The
moral guarantors assumed no legal obligation. It is recalled that the UN by its
representative appended, presumably for avoidance of doubt, an understanding of the extent
of the agreement to be implemented as not including certain international crimes.
42. An international agreement in the nature of a treaty must create rights and obligations
regulated by international law so that a breach of its terms will be a breach determined under
international law which will also provide principle means of enforcement. The Lomé
Agreement created neither rights nor obligations capable of being regulated by
international law. An agreement such as the Lomé Agreement which brings to an end
an internal armed conflict no doubt creates a factual situation of restoration of peace
that the international community acting through the Security Council may take note
of. That, however, will not convert it to an international agreement which creates an
obligation enforceable in international, as distinguished from municipal, law. A breach
of the terms of such a peace agreement resulting in resumption of internal armed conflict or
creating a threat to peace in the determination of the Security Council may indicate a
reversal of the factual situation of peace to be visited with possible legal consequences
arising from the new situation of conflict created. Such consequences such as action by the
Security Council pursuant to Chapter VII arise from the situation and not from the
agreement, nor from the obligation imposed by it. Such action cannot be regarded as a
remedy for the breach. A peace agreement which settles an internal armed conflict
cannot be ascribed the same status as one which settles an international armed
conflict which, essentially, must be between two or more warring States. The Lomé
Agreement cannot be characterised as an international instrument. x x x" (Emphasis,
italics and underscoring supplied)
Similarly, that the MOA-AD would have been signed by representatives of States and international
organizations not parties to the Agreement would not have sufficed to vest in it a binding character
under international law.
In another vein, concern has been raised that the MOA-AD would amount to a unilateral declaration
of the Philippine State, binding under international law, that it would comply with all the stipulations
stated therein, with the result that it would have to amend its Constitution accordingly regardless of
the true will of the people. Cited as authority for this view is Australia v. France,181 also known as
the Nuclear Tests Case, decided by the International Court of Justice (ICJ).
In the Nuclear Tests Case, Australia challenged before the ICJ the legality of France's nuclear tests
in the South Pacific. France refused to appear in the case, but public statements from its President,
and similar statements from other French officials including its Minister of Defence, that its 1974
series of atmospheric tests would be its last, persuaded the ICJ to dismiss the case. 182 Those
statements, the ICJ held, amounted to a legal undertaking addressed to the international community,
which required no acceptance from other States for it to become effective.
Essential to the ICJ ruling is its finding that the French government intended to be bound to the
international community in issuing its public statements, viz:

43. It is well recognized that declarations made by way of unilateral acts, concerning legal or
factual situations, may have the effect of creating legal obligations. Declarations of this kind
may be, and often are, very specific. When it is the intention of the State making the
declaration that it should become bound according to its terms, that intention confers
on the declaration the character of a legal undertaking, the State being thenceforth
legally required to follow a course of conduct consistent with the declaration. An
undertaking of this kind, if given publicly, and with an intent to be bound, even though not
made within the context of international negotiations, is binding. In these circumstances,
nothing in the nature of a quid pro quo nor any subsequent acceptance of the declaration,
nor even any reply or reaction from other States, is required for the declaration to take effect,
since such a requirement would be inconsistent with the strictly unilateral nature of the
juridical act by which the pronouncement by the State was made.
44. Of course, not all unilateral acts imply obligation; but a State may choose to take
up a certain position in relation to a particular matter with the intention of being
bound-the intention is to be ascertained by interpretation of the act. When States make
statements by which their freedom of action is to be limited, a restrictive interpretation is
called for.
xxxx
51. In announcing that the 1974 series of atmospheric tests would be the last, the
French Government conveyed to the world at large, including the Applicant, its
intention effectively to terminate these tests. It was bound to assume that other States
might take note of these statements and rely on their being effective. The validity of
these statements and their legal consequences must be considered within the general
framework of the security of international intercourse, and the confidence and trust
which are so essential in the relations among States. It is from the actual substance of
these statements, and from the circumstances attending their making, that the legal
implications of the unilateral act must be deduced. The objects of these statements
are clear and they were addressed to the international community as a whole, and the
Court holds that they constitute an undertaking possessing legal effect. The Court
considers *270 that the President of the Republic, in deciding upon the effective cessation of
atmospheric tests, gave an undertaking to the international community to which his words
were addressed. x x x (Emphasis and underscoring supplied)
As gathered from the above-quoted ruling of the ICJ, public statements of a state representative may
be construed as a unilateral declaration only when the following conditions are present: the
statements were clearly addressed to the international community, the state intended to be bound to
that community by its statements, and that not to give legal effect to those statements would be
detrimental to the security of international intercourse. Plainly, unilateral declarations arise only in
peculiar circumstances.
The limited applicability of the Nuclear Tests Case ruling was recognized in a later case decided by
the ICJ entitled Burkina Faso v. Mali,183 also known as the Case Concerning the Frontier Dispute.
The public declaration subject of that case was a statement made by the President of Mali, in an
interview by a foreign press agency, that Mali would abide by the decision to be issued by a
commission of the Organization of African Unity on a frontier dispute then pending between Mali and
Burkina Faso.

Unlike in the Nuclear Tests Case, the ICJ held that the statement of Mali's President was not a
unilateral act with legal implications. It clarified that its ruling in the Nuclear Tests case rested on the
peculiar circumstances surrounding the French declaration subject thereof, to wit:
40. In order to assess the intentions of the author of a unilateral act, account must be taken
of all the factual circumstances in which the act occurred. For example, in the Nuclear Tests
cases, the Court took the view that since the applicant States were not the only ones
concerned at the possible continuance of atmospheric testing by the French
Government, that Government's unilateral declarations had ‘conveyed to the world at
large, including the Applicant, its intention effectively to terminate these tests‘ (I.C.J.
Reports 1974, p. 269, para. 51; p. 474, para. 53). In the particular circumstances of those
cases, the French Government could not express an intention to be bound otherwise
than by unilateral declarations. It is difficult to see how it could have accepted the
terms of a negotiated solution with each of the applicants without thereby
jeopardizing its contention that its conduct was lawful. The circumstances of the
present case are radically different. Here, there was nothing to hinder the Parties from
manifesting an intention to accept the binding character of the conclusions of the
Organization of African Unity Mediation Commission by the normal method: a formal
agreement on the basis of reciprocity. Since no agreement of this kind was concluded
between the Parties, the Chamber finds that there are no grounds to interpret the declaration
made by Mali's head of State on 11 April 1975 as a unilateral act with legal implications in
regard to the present case. (Emphasis and underscoring supplied)
Assessing the MOA-AD in light of the above criteria, it would not have amounted to a unilateral
declaration on the part of the Philippine State to the international community. The Philippine panel
did not draft the same with the clear intention of being bound thereby to the international community
as a whole or to any State, but only to the MILF. While there were States and international
organizations involved, one way or another, in the negotiation and projected signing of the MOA-AD,
they participated merely as witnesses or, in the case of Malaysia, as facilitator. As held in the Lomé
Accord case, the mere fact that in addition to the parties to the conflict, the peace settlement is
signed by representatives of states and international organizations does not mean that the
agreement is internationalized so as to create obligations in international law.
Since the commitments in the MOA-AD were not addressed to States, not to give legal effect to such
commitments would not be detrimental to the security of international intercourse - to the trust and
confidence essential in the relations among States.
In one important respect, the circumstances surrounding the MOA-AD are closer to that of Burkina
Faso wherein, as already discussed, the Mali President's statement was not held to be a binding
unilateral declaration by the ICJ. As in that case, there was also nothing to hinder the Philippine
panel, had it really been its intention to be bound to other States, to manifest that intention by formal
agreement. Here, that formal agreement would have come about by the inclusion in the MOA-AD of
a clear commitment to be legally bound to the international community, not just the MILF, and by an
equally clear indication that the signatures of the participating states-representatives would
constitute an acceptance of that commitment. Entering into such a formal agreement would not have
resulted in a loss of face for the Philippine government before the international community, which
was one of the difficulties that prevented the French Government from entering into a formal
agreement with other countries. That the Philippine panel did not enter into such a formal agreement
suggests that it had no intention to be bound to the international community. On that ground, the
MOA-AD may not be considered a unilateral declaration under international law.

The MOA-AD not being a document that can bind the Philippines under international law
notwithstanding, respondents' almost consummated act of guaranteeing amendments to the legal
framework is, by itself, sufficient to constitute grave abuse of discretion. The grave abuse lies
not in the fact that they considered, as a solution to the Moro Problem, the creation of a state within
a state, but in their brazen willingness toguarantee that Congress and the sovereign Filipino
people would give their imprimatur to their solution. Upholding such an act would amount to
authorizing a usurpation of the constituent powers vested only in Congress, a Constitutional
Convention, or the people themselves through the process of initiative, for the only way that the
Executive can ensure the outcome of the amendment process is through an undue influence or
interference with that process.
The sovereign people may, if it so desired, go to the extent of giving up a portion of its own territory
to the Moros for the sake of peace, for it can change the Constitution in any it wants, so long as the
change is not inconsistent with what, in international law, is known as Jus Cogens.184 Respondents,
however, may not preempt it in that decision.
SUMMARY
The petitions are ripe for adjudication. The failure of respondents to consult the local government
units or communities affected constitutes a departure by respondents from their mandate under E.O.
No. 3. Moreover, respondents exceeded their authority by the mere act of guaranteeing
amendments to the Constitution. Any alleged violation of the Constitution by any branch of
government is a proper matter for judicial review.
As the petitions involve constitutional issues which are of paramount public interest or of
transcendental importance, the Court grants the petitioners, petitioners-in-intervention and
intervening respondents the requisitelocus standi in keeping with the liberal stance adopted in David
v. Macapagal-Arroyo.
Contrary to the assertion of respondents that the non-signing of the MOA-AD and the eventual
dissolution of the GRP Peace Panel mooted the present petitions, the Court finds that the present
petitions provide an exception to the "moot and academic" principle in view of (a) the grave violation
of the Constitution involved; (b) the exceptional character of the situation and paramount public
interest; (c) the need to formulate controlling principles to guide the bench, the bar, and the public;
and (d) the fact that the case is capable of repetition yet evading review.
The MOA-AD is a significant part of a series of agreements necessary to carry out the GRP-MILF
Tripoli Agreement on Peace signed by the government and the MILF back in June 2001. Hence, the
present MOA-AD can be renegotiated or another one drawn up that could contain similar or
significantly dissimilar provisions compared to the original.
The Court, however, finds that the prayers for mandamus have been rendered moot in view of the
respondents' action in providing the Court and the petitioners with the official copy of the final draft of
the MOA-AD and its annexes.
The people's right to information on matters of public concern under Sec. 7, Article III of the
Constitution is insplendid symmetry with the state policy of full public disclosure of all its transactions
involving public interest under Sec. 28, Article II of the Constitution. The right to information
guarantees the right of the people to demand information, while Section 28 recognizes the duty of
officialdom to give information even if nobody demands. The complete and effective exercise of the
right to information necessitates that its complementary provision on public disclosure derive the

same self-executory nature, subject only to reasonable safeguards or limitations as may be provided
by law.
The contents of the MOA-AD is a matter of paramount public concern involving public interest in the
highest order. In declaring that the right to information contemplates steps and negotiations leading
to the consummation of the contract, jurisprudence finds no distinction as to the executory nature or
commercial character of the agreement.
An essential element of these twin freedoms is to keep a continuing dialogue or process of
communication between the government and the people. Corollary to these twin rights is the design
for feedback mechanisms. The right to public consultation was envisioned to be a species of these
public rights.
At least three pertinent laws animate these constitutional imperatives and justify the exercise of the
people's right to be consulted on relevant matters relating to the peace agenda.
One, E.O. No. 3 itself is replete with mechanics for continuing consultations on both national and
local levels and for a principal forum for consensus-building. In fact, it is the duty of the Presidential
Adviser on the Peace Process to conduct regular dialogues to seek relevant information, comments,
advice, and recommendations from peace partners and concerned sectors of society.
Two, Republic Act No. 7160 or the Local Government Code of 1991 requires all national offices to
conduct consultations before any project or program critical to the environment and human ecology
including those that may call for the eviction of a particular group of people residing in such locality,
is implemented therein. The MOA-AD is one peculiar program that unequivocally and unilaterally
vests ownership of a vast territory to the Bangsamoro people, which could pervasively and
drastically result to the diaspora or displacement of a great number of inhabitants from their total
environment.
Three, Republic Act No. 8371 or the Indigenous Peoples Rights Act of 1997 provides for clear-cut
procedure for the recognition and delineation of ancestral domain, which entails, among other things,
the observance of the free and prior informed consent of the Indigenous Cultural
Communities/Indigenous Peoples. Notably, the statute does not grant the Executive Department or
any government agency the power to delineate and recognize an ancestral domain claim by mere
agreement or compromise.
The invocation of the doctrine of executive privilege as a defense to the general right to information
or the specific right to consultation is untenable. The various explicit legal provisions fly in the face of
executive secrecy. In any event, respondents effectively waived such defense after it unconditionally
disclosed the official copies of the final draft of the MOA-AD, for judicial compliance and public
scrutiny.
In sum, the Presidential Adviser on the Peace Process committed grave abuse of discretion when he
failed to carry out the pertinent consultation process, as mandated by E.O. No. 3, Republic Act No.
7160, and Republic Act No. 8371. The furtive process by which the MOA-AD was designed and
crafted runs contrary to and in excess of the legal authority, and amounts to a whimsical, capricious,
oppressive, arbitrary and despotic exercise thereof. It illustrates a gross evasion of positive duty and
a virtual refusal to perform the duty enjoined.
The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its specific
provisions but the very concept underlying them, namely, the associative relationship envisioned

between the GRP and the BJE, areunconstitutional, for the concept presupposes that the
associated entity is a state and implies that the same is on its way to independence.
While there is a clause in the MOA-AD stating that the provisions thereof inconsistent with the
present legal framework will not be effective until that framework is amended, the same does not
cure its defect. The inclusion of provisions in the MOA-AD establishing an associative relationship
between the BJE and the Central Government is, itself, a violation of the Memorandum of
Instructions From The President dated March 1, 2001, addressed to the government peace panel.
Moreover, as the clause is worded, it virtually guarantees that the necessary amendments to the
Constitution and the laws will eventually be put in place. Neither the GRP Peace Panel nor the
President herself is authorized to make such a guarantee. Upholding such an act would amount to
authorizing a usurpation of the constituent powers vested only in Congress, a Constitutional
Convention, or the people themselves through the process of initiative, for the only way that the
Executive can ensure the outcome of the amendment process is through an undue influence or
interference with that process.
While the MOA-AD would not amount to an international agreement or unilateral declaration binding
on the Philippines under international law, respondents' act of guaranteeing amendments is, by itself,
already a constitutional violation that renders the MOA-AD fatally defective.
WHEREFORE, respondents' motion to dismiss is DENIED. The main and intervening petitions are
GIVEN DUE COURSE and hereby GRANTED.
The Memorandum of Agreement on the Ancestral Domain Aspect of the GRP-MILF Tripoli
Agreement on Peace of 2001 is declared contrary to law and the Constitution.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 104768

July 21, 2003

REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
SANDIGANBAYAN, MAJOR GENERAL JOSEPHUS Q. RAMAS and ELIZABETH
DIMAANO, Respondents.
DECISION
CARPIO, J.:

The Case
Before this Court is a petition for review on certiorari seeking to set aside the Resolutions of the
Sandiganbayan (First Division)1 dated 18 November 1991 and 25 March 1992 in Civil Case No.
0037. The first Resolution dismissed petitioner’s Amended Complaint and ordered the return of the
confiscated items to respondent Elizabeth Dimaano, while the second Resolution denied petitioner’s
Motion for Reconsideration. Petitioner prays for the grant of the reliefs sought in its Amended
Complaint, or in the alternative, for the remand of this case to the Sandiganbayan (First Division) for
further proceedings allowing petitioner to complete the presentation of its evidence.
Antecedent Facts
Immediately upon her assumption to office following the successful EDSA Revolution, then President
Corazon C. Aquino issued Executive Order No. 1 ("EO No. 1") creating the Presidential Commission
on Good Government ("PCGG"). EO No. 1 primarily tasked the PCGG to recover all ill-gotten wealth
of former President Ferdinand E. Marcos, his immediate family, relatives, subordinates and close
associates. EO No. 1 vested the PCGG with the power "(a) to conduct investigation as may be
necessary in order to accomplish and carry out the purposes of this order" and the power "(h) to
promulgate such rules and regulations as may be necessary to carry out the purpose of this order."
Accordingly, the PCGG, through its then Chairman Jovito R. Salonga, created an AFP Anti-Graft
Board ("AFP Board") tasked to investigate reports of unexplained wealth and corrupt practices by
AFP personnel, whether in the active service or retired.2
Based on its mandate, the AFP Board investigated various reports of alleged unexplained wealth of
respondent Major General Josephus Q. Ramas ("Ramas"). On 27 July 1987, the AFP Board issued
a Resolution on its findings and recommendation on the reported unexplained wealth of Ramas. The
relevant part of the Resolution reads:
III. FINDINGS and EVALUATION:
Evidence in the record showed that respondent is the owner of a house and lot located at 15-Yakan
St., La Vista, Quezon City. He is also the owner of a house and lot located in Cebu City. The lot has
an area of 3,327 square meters.
The value of the property located in Quezon City may be estimated modestly at P700,000.00.
The equipment/items and communication facilities which were found in the premises of Elizabeth
Dimaano and were confiscated by elements of the PC Command of Batangas were all covered by
invoice receipt in the name of CAPT. EFREN SALIDO, RSO Command Coy, MSC, PA. These items
could not have been in the possession of Elizabeth Dimaano if not given for her use by respondent
Commanding General of the Philippine Army.
Aside from the military equipment/items and communications equipment, the raiding team was also
able to confiscate money in the amount of P2,870,000.00 and $50,000 US Dollars in the house of
Elizabeth Dimaano on 3 March 1986.

Affidavits of members of the Military Security Unit, Military Security Command, Philippine Army,
stationed at Camp Eldridge, Los Baños, Laguna, disclosed that Elizabeth Dimaano is the mistress of
respondent. That respondent usually goes and stays and sleeps in the alleged house of Elizabeth
Dimaano in Barangay Tengga, Itaas, Batangas City and when he arrives, Elizabeth Dimaano
embraces and kisses respondent. That on February 25, 1986, a person who rode in a car went to
the residence of Elizabeth Dimaano with four (4) attache cases filled with money and owned by
MGen Ramas.
Sworn statement in the record disclosed also that Elizabeth Dimaano had no visible means of
income and is supported by respondent for she was formerly a mere secretary.
Taking in toto the evidence, Elizabeth Dimaano could not have used the military equipment/items
seized in her house on March 3, 1986 without the consent of respondent, he being the Commanding
General of the Philippine Army. It is also impossible for Elizabeth Dimaano to claim that she owns
the P2,870,000.00 and $50,000 US Dollars for she had no visible source of income.
This money was never declared in the Statement of Assets and Liabilities of respondent. There was
an intention to cover the existence of these money because these are all ill-gotten and unexplained
wealth. Were it not for the affidavits of the members of the Military Security Unit assigned at Camp
Eldridge, Los Baños, Laguna, the existence and ownership of these money would have never been
known.
The Statement of Assets and Liabilities of respondent were also submitted for scrutiny and analysis
by the Board’s consultant. Although the amount of P2,870,000.00 and $50,000 US Dollars were not
included, still it was disclosed that respondent has an unexplained wealth of P104,134. 60.
IV. CONCLUSION:
In view of the foregoing, the Board finds that a prima facie case exists against respondent for illgotten and unexplained wealth in the amount of P2,974,134.00 and $50,000 US Dollars.
V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be prosecuted and tried for
violation of RA 3019, as amended, otherwise known as "Anti-Graft and Corrupt Practices Act" and
RA 1379, as amended, otherwise known as "The Act for the Forfeiture of Unlawfully Acquired
Property."3
Thus, on 1 August 1987, the PCGG filed a petition for forfeiture under Republic Act No. 1379 ("RA
No. 1379") 4against Ramas.
Before Ramas could answer the petition, then Solicitor General Francisco I. Chavez filed an
Amended Complaint naming the Republic of the Philippines ("petitioner"), represented by the PCGG,
as plaintiff and Ramas as defendant. The Amended Complaint also impleaded Elizabeth Dimaano
("Dimaano") as co-defendant.

The Amended Complaint alleged that Ramas was the Commanding General of the Philippine Army
until 1986. On the other hand, Dimaano was a confidential agent of the Military Security Unit,
Philippine Army, assigned as a clerk-typist at the office of Ramas from 1 January 1978 to February
1979. The Amended Complaint further alleged that Ramas "acquired funds, assets and properties
manifestly out of proportion to his salary as an army officer and his other income from legitimately
acquired property by taking undue advantage of his public office and/or using his power, authority
and influence as such officer of the Armed Forces of the Philippines and as a subordinate and close
associate of the deposed President Ferdinand Marcos." 5
The Amended Complaint also alleged that the AFP Board, after a previous inquiry, found reasonable
ground to believe that respondents have violated RA No. 1379. 6 The Amended Complaint prayed for,
among others, the forfeiture of respondents’ properties, funds and equipment in favor of the State.
Ramas filed an Answer with Special and/or Affirmative Defenses and Compulsory Counterclaim to
the Amended Complaint. In his Answer, Ramas contended that his property consisted only of a
residential house at La Vista Subdivision, Quezon City, valued at P700,000, which was not out of
proportion to his salary and other legitimate income. He denied ownership of any mansion in Cebu
City and the cash, communications equipment and other items confiscated from the house of
Dimaano.
Dimaano filed her own Answer to the Amended Complaint. Admitting her employment as a clerktypist in the office of Ramas from January-November 1978 only, Dimaano claimed ownership of the
monies, communications equipment, jewelry and land titles taken from her house by the Philippine
Constabulary raiding team.
After termination of the pre-trial,7 the court set the case for trial on the merits on 9-11 November
1988.
On 9 November 1988, petitioner asked for a deferment of the hearing due to its lack of preparation
for trial and the absence of witnesses and vital documents to support its case. The court reset the
hearing to 17 and 18 April 1989.
On 13 April 1989, petitioner filed a motion for leave to amend the complaint in order "to charge the
delinquent properties with being subject to forfeiture as having been unlawfully acquired by
defendant Dimaano alone x x x."8
Nevertheless, in an order dated 17 April 1989, the Sandiganbayan proceeded with petitioner’s
presentation of evidence on the ground that the motion for leave to amend complaint did not state
when petitioner would file the amended complaint. The Sandiganbayan further stated that the
subject matter of the amended complaint was on its face vague and not related to the existing
complaint. The Sandiganbayan also held that due to the time that the case had been pending in
court, petitioner should proceed to present its evidence.
After presenting only three witnesses, petitioner asked for a postponement of the trial.

On 28 September 1989, during the continuation of the trial, petitioner manifested its inability to
proceed to trial because of the absence of other witnesses or lack of further evidence to present.
Instead, petitioner reiterated its motion to amend the complaint to conform to the evidence already
presented or to change the averments to show that Dimaano alone unlawfully acquired the monies
or properties subject of the forfeiture.
The Sandiganbayan noted that petitioner had already delayed the case for over a year mainly
because of its many postponements. Moreover, petitioner would want the case to revert to its
preliminary stage when in fact the case had long been ready for trial. The Sandiganbayan ordered
petitioner to prepare for presentation of its additional evidence, if any.
During the trial on 23 March 1990, petitioner again admitted its inability to present further evidence.
Giving petitioner one more chance to present further evidence or to amend the complaint to conform
to its evidence, the Sandiganbayan reset the trial to 18 May 1990. The Sandiganbayan, however,
hinted that the re-setting was without prejudice to any action that private respondents might take
under the circumstances.
However, on 18 May 1990, petitioner again expressed its inability to proceed to trial because it had
no further evidence to present. Again, in the interest of justice, the Sandiganbayan granted petitioner
60 days within which to file an appropriate pleading. The Sandiganbayan, however, warned
petitioner that failure to act would constrain the court to take drastic action.
Private respondents then filed their motions to dismiss based on Republic v. Migrino. 9 The Court held
in Migrino that the PCGG does not have jurisdiction to investigate and prosecute military officers by
reason of mere position held without a showing that they are "subordinates" of former President
Marcos.
On 18 November 1991, the Sandiganbayan rendered a resolution, the dispositive portion of which
states:
WHEREFORE, judgment is hereby rendered dismissing the Amended Complaint, without
pronouncement as to costs. The counterclaims are likewise dismissed for lack of merit, but the
confiscated sum of money, communications equipment, jewelry and land titles are ordered returned
to Elizabeth Dimaano.
The records of this case are hereby remanded and referred to the Hon. Ombudsman, who has
primary jurisdiction over the forfeiture cases under R.A. No. 1379, for such appropriate action as the
evidence warrants. This case is also referred to the Commissioner of the Bureau of Internal
Revenue for a determination of any tax liability of respondent Elizabeth Dimaano in connection
herewith.
SO ORDERED.
On 4 December 1991, petitioner filed its Motion for Reconsideration.

In answer to the Motion for Reconsideration, private respondents filed a Joint Comment/Opposition
to which petitioner filed its Reply on 10 January 1992.
On 25 March 1992, the Sandiganbayan rendered a Resolution denying the Motion for
Reconsideration.
Ruling of the Sandiganbayan
The Sandiganbayan dismissed the Amended Complaint on the following grounds:
(1.) The actions taken by the PCGG are not in accordance with the rulings of the Supreme
Court in Cruz, Jr. v. Sandiganbayan10 and Republic v. Migrino11 which involve the same
issues.
(2.) No previous inquiry similar to preliminary investigations in criminal cases was conducted
against Ramas and Dimaano.
(3.) The evidence adduced against Ramas does not constitute a prima facie case against
him.
(4.) There was an illegal search and seizure of the items confiscated.
The Issues
Petitioner raises the following issues:
A. RESPONDENT COURT SERIOUSLY ERRED IN CONCLUDING THAT PETITIONER’S
EVIDENCE CANNOT MAKE A CASE FOR FORFEITURE AND THAT THERE WAS NO
SHOWING OF CONSPIRACY, COLLUSION OR RELATIONSHIP BY CONSANGUINITY OR
AFFINITY BY AND BETWEEN RESPONDENT RAMAS AND RESPONDENT DIMAANO
NOTWITHSTANDING THE FACT THAT SUCH CONCLUSIONS WERE CLEARLY
UNFOUNDED AND PREMATURE, HAVING BEEN RENDERED PRIOR TO THE
COMPLETION OF THE PRESENTATION OF THE EVIDENCE OF THE PETITIONER.
B. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE ACTIONS TAKEN
BY THE PETITIONER, INCLUDING THE FILING OF THE ORIGINAL COMPLAINT AND
THE AMENDED COMPLAINT, SHOULD BE STRUCK OUT IN LINE WITH THE RULINGS
OF THE SUPREME COURT IN CRUZ, JR. v. SANDIGANBAYAN, 194 SCRA 474 AND
REPUBLIC v. MIGRINO, 189 SCRA 289, NOTWITHSTANDING THE FACT THAT:
1. The cases of Cruz, Jr. v. Sandiganbayan, supra, and Republic v. Migrino, supra,
are clearly not applicable to this case;
2. Any procedural defect in the institution of the complaint in Civil Case No. 0037 was
cured and/or waived by respondents with the filing of their respective answers with
counterclaim; and

3. The separate motions to dismiss were evidently improper considering that they
were filed after commencement of the presentation of the evidence of the petitioner
and even before the latter was allowed to formally offer its evidence and rest its case;
C. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE ARTICLES AND
THINGS SUCH AS SUMS OF MONEY, COMMUNICATIONS EQUIPMENT, JEWELRY AND
LAND TITLES CONFISCATED FROM THE HOUSE OF RESPONDENT DIMAANO WERE
ILLEGALLY SEIZED AND THEREFORE EXCLUDED AS EVIDENCE.12
The Court’s Ruling
First Issue: PCGG’s Jurisdiction to Investigate Private Respondents
This case involves a revisiting of an old issue already decided by this Court in Cruz, Jr. v.
Sandiganbayan13 and Republic v. Migrino.14
The primary issue for resolution is whether the PCGG has the jurisdiction to investigate and cause
the filing of a forfeiture petition against Ramas and Dimaano for unexplained wealth under RA No.
1379.
We hold that PCGG has no such jurisdiction.
The PCGG created the AFP Board to investigate the unexplained wealth and corrupt practices of
AFP personnel, whether in the active service or retired.15 The PCGG tasked the AFP Board to make
the necessary recommendations to appropriate government agencies on the action to be taken
based on its findings.16 The PCGG gave this task to the AFP Board pursuant to the PCGG’s power
under Section 3 of EO No. 1 "to conduct investigation as may be necessary in order to accomplish
and to carry out the purposes of this order." EO No. 1 gave the PCGG specific responsibilities, to wit:
SEC. 2. The Commission shall be charged with the task of assisting the President in regard to the
following matters:
(a) The recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his
immediate family, relatives, subordinates and close associates, whether located in the Philippines or
abroad, including the takeover and sequestration of all business enterprises and entities owned or
controlled by them, during his administration, directly or through nominees, by taking undue
advantage of their public office and/ or using their powers, authority, influence, connections or
relationship.
(b) The investigation of such cases of graft and corruption as the President may assign to the
Commission from time to time.
x x x.
The PCGG, through the AFP Board, can only investigate the unexplained wealth and corrupt
practices of AFP personnel who fall under either of the two categories mentioned in Section 2 of EO

No. 1. These are: (1) AFP personnel who have accumulated ill-gotten wealth during the
administration of former President Marcos by being the latter’s immediate family, relative,
subordinate or close associate, taking undue advantage of their public office or using their powers,
influence x x x;17 or (2) AFP personnel involved in other cases of graft and corruption provided the
President assigns their cases to the PCGG.18
Petitioner, however, does not claim that the President assigned Ramas’ case to the PCGG.
Therefore, Ramas’ case should fall under the first category of AFP personnel before the PCGG could
exercise its jurisdiction over him. Petitioner argues that Ramas was undoubtedly a subordinate of
former President Marcos because of his position as the Commanding General of the Philippine
Army. Petitioner claims that Ramas’ position enabled him to receive orders directly from his
commander-in-chief, undeniably making him a subordinate of former President Marcos.
We hold that Ramas was not a "subordinate" of former President Marcos in the sense contemplated
under EO No. 1 and its amendments.
Mere position held by a military officer does not automatically make him a "subordinate" as this term
is used in EO Nos. 1, 2, 14 and 14-A absent a showing that he enjoyed close association with former
President Marcos. Migrino discussed this issue in this wise:
A close reading of EO No. 1 and related executive orders will readily show what is contemplated
within the term ‘subordinate.’ The Whereas Clauses of EO No. 1 express the urgent need to recover
the ill-gotten wealth amassed by former President Ferdinand E. Marcos, his immediate family,
relatives, and close associates both here and abroad.
EO No. 2 freezes ‘all assets and properties in the Philippines in which former President Marcos
and/or his wife, Mrs. Imelda Marcos, their close relatives, subordinates, business associates,
dummies, agents, or nominees have any interest or participation.’
Applying the rule in statutory construction known as ejusdem generis that is‘[W]here general words follow an enumeration of persons or things by words of a particular and
specific meaning, such general words are not to be construed in their widest extent, but are to be
held as applying only to persons or things of the same kind or class as those specifically mentioned
[Smith, Bell & Co, Ltd. vs. Register of Deeds of Davao, 96 Phil. 53, 58, citing Black on Interpretation
of Laws, 2nd Ed., 203].’
[T]he term "subordinate" as used in EO Nos. 1 & 2 refers to one who enjoys a close association with
former President Marcos and/or his wife, similar to the immediate family member, relative, and close
associate in EO No. 1 and the close relative, business associate, dummy, agent, or nominee in EO
No. 2.
xxx
It does not suffice, as in this case, that the respondent is or was a government official or employee
during the administration of former President Marcos. There must be a prima facie showing that the

respondent unlawfully accumulated wealth by virtue of his close association or relation with former
Pres. Marcos and/or his wife. (Emphasis supplied)
Ramas’ position alone as Commanding General of the Philippine Army with the rank of Major
General19 does not suffice to make him a "subordinate" of former President Marcos for purposes of
EO No. 1 and its amendments. The PCGG has to provide a prima facie showing that Ramas was a
close associate of former President Marcos, in the same manner that business associates,
dummies, agents or nominees of former President Marcos were close to him. Such close association
is manifested either by Ramas’ complicity with former President Marcos in the accumulation of illgotten wealth by the deposed President or by former President Marcos’ acquiescence in Ramas’
own accumulation of ill-gotten wealth if any.
This, the PCGG failed to do.
Petitioner’s attempt to differentiate the instant case from Migrino does not convince us. Petitioner
argues that unlike in Migrino, the AFP Board Resolution in the instant case states that the AFP Board
conducted the investigation pursuant to EO Nos. 1, 2, 14 and 14-A in relation to RA No. 1379.
Petitioner asserts that there is a presumption that the PCGG was acting within its jurisdiction of
investigating crony-related cases of graft and corruption and that Ramas was truly a subordinate of
the former President. However, the same AFP Board Resolution belies this contention. Although the
Resolution begins with such statement, it ends with the following recommendation:
V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be prosecuted and tried for
violation of RA 3019, as amended, otherwise known as "Anti-Graft and Corrupt Practices Act" and
RA 1379, as amended, otherwise known as "The Act for the Forfeiture of Unlawfully Acquired
Property."20
Thus, although the PCGG sought to investigate and prosecute private respondents under EO Nos.
1, 2, 14 and 14-A, the result yielded a finding of violation of Republic Acts Nos. 3019 and 1379
without any relation to EO Nos. 1, 2, 14 and 14-A. This absence of relation to EO No. 1 and its
amendments proves fatal to petitioner’s case. EO No. 1 created the PCGG for a specific and limited
purpose, and necessarily its powers must be construed to address such specific and limited
purpose.
Moreover, the resolution of the AFP Board and even the Amended Complaint do not show that the
properties Ramas allegedly owned were accumulated by him in his capacity as a "subordinate" of
his commander-in-chief. Petitioner merely enumerated the properties Ramas allegedly owned and
suggested that these properties were disproportionate to his salary and other legitimate income
without showing that Ramas amassed them because of his close association with former President
Marcos. Petitioner, in fact, admits that the AFP Board resolution does not contain a finding that
Ramas accumulated his wealth because of his close association with former President Marcos, thus:
10. While it is true that the resolution of the Anti-Graft Board of the New Armed Forces of the
Philippines did not categorically find a prima facie evidence showing that respondent Ramas

unlawfully accumulated wealth by virtue of his close association or relation with former
President Marcos and/or his wife, it is submitted that such omission was not fatal. The
resolution of the Anti-Graft Board should be read in the context of the law creating the same and the
objective of the investigation which was, as stated in the above, pursuant to Republic Act Nos. 3019
and 1379 in relation to Executive Order Nos. 1, 2, 14 and 14-a;21(Emphasis supplied)
Such omission is fatal. Petitioner forgets that it is precisely a prima facie showing that the ill-gotten
wealth was accumulated by a "subordinate" of former President Marcos that vests jurisdiction on
PCGG. EO No. 122 clearly premises the creation of the PCGG on the urgent need to recover all illgotten wealth amassed by former President Marcos, his immediate family, relatives, subordinates
and close associates. Therefore, to say that such omission was not fatal is clearly contrary to the
intent behind the creation of the PCGG.
In Cruz, Jr. v. Sandiganbayan,23 the Court outlined the cases that fall under the jurisdiction of the
PCGG pursuant to EO Nos. 1, 2,24 14,25 14-A:26
A careful reading of Sections 2(a) and 3 of Executive Order No. 1 in relation with Sections 1, 2 and 3
of Executive Order No. 14, shows what the authority of the respondent PCGG to investigate and
prosecute covers:
(a) the investigation and prosecution of the civil action for the recovery of ill-gotten wealth
under Republic Act No. 1379, accumulated by former President Marcos, his immediate
family, relatives, subordinates and close associates, whether located in the Philippines or
abroad, including the take-over or sequestration of all business enterprises and entities
owned or controlled by them, during his administration, directly or through his nominees, by
taking undue advantage of their public office and/or using their powers, authority and
influence, connections or relationships; and
(b) the investigation and prosecution of such offenses committed in the acquisition of said illgotten wealth as contemplated under Section 2(a) of Executive Order No. 1.
However, other violations of the Anti-Graft and Corrupt Practices Act not otherwise falling
under the foregoing categories, require a previous authority of the President for the
respondent PCGG to investigate and prosecute in accordance with Section 2 (b) of Executive
Order No. 1. Otherwise, jurisdiction over such cases is vested in the Ombudsman and other
duly authorized investigating agencies such as the provincial and city prosecutors, their
assistants, the Chief State Prosecutor and his assistants and the state
prosecutors. (Emphasis supplied)
The proper government agencies, and not the PCGG, should investigate and prosecute forfeiture
petitions not falling under EO No. 1 and its amendments. The preliminary investigation of
unexplained wealth amassed on or before 25 February 1986 falls under the jurisdiction of the
Ombudsman, while the authority to file the corresponding forfeiture petition rests with the Solicitor
General.27 The Ombudsman Act or Republic Act No. 6770 ("RA No. 6770") vests in the Ombudsman
the power to conduct preliminary investigation and to file forfeiture proceedings involving
unexplained wealth amassed after 25 February 1986. 28

After the pronouncements of the Court in Cruz, the PCGG still pursued this case despite the
absence of a prima facie finding that Ramas was a "subordinate" of former President Marcos. The
petition for forfeiture filed with the Sandiganbayan should be dismissed for lack of authority by the
PCGG to investigate respondents since there is no prima facie showing that EO No. 1 and its
amendments apply to respondents. The AFP Board Resolution and even the Amended Complaint
state that there are violations of RA Nos. 3019 and 1379. Thus, the PCGG should have
recommended Ramas’ case to the Ombudsman who has jurisdiction to conduct the preliminary
investigation of ordinary unexplained wealth and graft cases. As stated in Migrino:
[But] in view of the patent lack of authority of the PCGG to investigate and cause the prosecution of
private respondent for violation of Rep. Acts Nos. 3019 and 1379, the PCGG must also be enjoined
from proceeding with the case, without prejudice to any action that may be taken by the proper
prosecutory agency. The rule of law mandates that an agency of government be allowed to exercise
only the powers granted to it.
Petitioner’s argument that private respondents have waived any defect in the filing of the forfeiture
petition by submitting their respective Answers with counterclaim deserves no merit as well.
Petitioner has no jurisdiction over private respondents. Thus, there is no jurisdiction to waive in the
first place. The PCGG cannot exercise investigative or prosecutorial powers never granted to it.
PCGG’s powers are specific and limited. Unless given additional assignment by the President,
PCGG’s sole task is only to recover the ill-gotten wealth of the Marcoses, their relatives and
cronies.29 Without these elements, the PCGG cannot claim jurisdiction over a case.
Private respondents questioned the authority and jurisdiction of the PCGG to investigate and
prosecute their cases by filing their Motion to Dismiss as soon as they learned of the pronouncement
of the Court in Migrino. This case was decided on 30 August 1990, which explains why private
respondents only filed their Motion to Dismiss on 8 October 1990. Nevertheless, we have held that
the parties may raise lack of jurisdiction at any stage of the proceeding. 30 Thus, we hold that there
was no waiver of jurisdiction in this case. Jurisdiction is vested by law and not by the parties to an
action.31
Consequently, the petition should be dismissed for lack of jurisdiction by the PCGG to conduct the
preliminary investigation. The Ombudsman may still conduct the proper preliminary investigation for
violation of RA No. 1379, and if warranted, the Solicitor General may file the forfeiture petition with
the Sandiganbayan.32 The right of the State to forfeit unexplained wealth under RA No. 1379 is not
subject to prescription, laches or estoppel.33
Second Issue: Propriety of Dismissal of Case
Before Completion of Presentation of Evidence
Petitioner also contends that the Sandiganbayan erred in dismissing the case before completion of
the presentation of petitioner’s evidence.
We disagree.

Based on the findings of the Sandiganbayan and the records of this case, we find that petitioner has
only itself to blame for non-completion of the presentation of its evidence. First, this case has been
pending for four years before the Sandiganbayan dismissed it. Petitioner filed its Amended
Complaint on 11 August 1987, and only began to present its evidence on 17 April 1989. Petitioner
had almost two years to prepare its evidence. However, despite this sufficient time, petitioner still
delayed the presentation of the rest of its evidence by filing numerous motions for postponements
and extensions. Even before the date set for the presentation of its evidence, petitioner filed, on 13
April 1989, a Motion for Leave to Amend the Complaint.34 The motion sought "to charge the
delinquent properties (which comprise most of petitioner’s evidence) with being subject to forfeiture
as having been unlawfully acquired by defendant Dimaano alone x x x."
The Sandiganbayan, however, refused to defer the presentation of petitioner’s evidence since
petitioner did not state when it would file the amended complaint. On 18 April 1989, the
Sandiganbayan set the continuation of the presentation of evidence on 28-29 September and 9-11
October 1989, giving petitioner ample time to prepare its evidence. Still, on 28 September 1989,
petitioner manifested its inability to proceed with the presentation of its evidence. The
Sandiganbayan issued an Order expressing its view on the matter, to wit:
The Court has gone through extended inquiry and a narration of the above events because this case
has been ready for trial for over a year and much of the delay hereon has been due to the inability of
the government to produce on scheduled dates for pre-trial and for trial documents and witnesses,
allegedly upon the failure of the military to supply them for the preparation of the presentation of
evidence thereon. Of equal interest is the fact that this Court has been held to task in public about its
alleged failure to move cases such as this one beyond the preliminary stage, when, in view of the
developments such as those of today, this Court is now faced with a situation where a case already
in progress will revert back to the preliminary stage, despite a five-month pause where appropriate
action could have been undertaken by the plaintiff Republic. 35
On 9 October 1989, the PCGG manifested in court that it was conducting a preliminary investigation
on the unexplained wealth of private respondents as mandated by RA No. 1379. 36 The PCGG prayed
for an additional four months to conduct the preliminary investigation. The Sandiganbayan granted
this request and scheduled the presentation of evidence on 26-29 March 1990. However, on the
scheduled date, petitioner failed to inform the court of the result of the preliminary investigation the
PCGG supposedly conducted. Again, the Sandiganbayan gave petitioner until 18 May 1990 to
continue with the presentation of its evidence and to inform the court of "what lies ahead insofar as
the status of the case is concerned x x x."37 Still on the date set, petitioner failed to present its
evidence. Finally, on 11 July 1990, petitioner filed its Re-Amended Complaint. 38 The Sandiganbayan
correctly observed that a case already pending for years would revert to its preliminary stage if the
court were to accept the Re-Amended Complaint.
Based on these circumstances, obviously petitioner has only itself to blame for failure to complete
the presentation of its evidence. The Sandiganbayan gave petitioner more than sufficient time to
finish the presentation of its evidence. The Sandiganbayan overlooked petitioner’s delays and yet
petitioner ended the long-string of delays with the filing of a Re-Amended Complaint, which would
only prolong even more the disposition of the case.

Moreover, the pronouncements of the Court in Migrino and Cruz prompted the Sandiganbayan to
dismiss the case since the PCGG has no jurisdiction to investigate and prosecute the case against
private respondents. This alone would have been sufficient legal basis for the Sandiganbayan to
dismiss the forfeiture case against private respondents.
Thus, we hold that the Sandiganbayan did not err in dismissing the case before completion of the
presentation of petitioner’s evidence.
Third Issue: Legality of the Search and Seizure
Petitioner claims that the Sandiganbayan erred in declaring the properties confiscated from
Dimaano’s house as illegally seized and therefore inadmissible in evidence. This issue bears a
significant effect on petitioner’s case since these properties comprise most of petitioner’s evidence
against private respondents. Petitioner will not have much evidence to support its case against
private respondents if these properties are inadmissible in evidence.
On 3 March 1986, the Constabulary raiding team served at Dimaano’s residence a search warrant
captioned "Illegal Possession of Firearms and Ammunition." Dimaano was not present during the
raid but Dimaano’s cousins witnessed the raid. The raiding team seized the items detailed in the
seizure receipt together with other items not included in the search warrant. The raiding team seized
these items: one baby armalite rifle with two magazines; 40 rounds of 5.56 ammunition; one pistol,
caliber .45; communications equipment, cash consisting of P2,870,000 and US$50,000, jewelry, and
land titles.
Petitioner wants the Court to take judicial notice that the raiding team conducted the search and
seizure "on March 3, 1986 or five days after the successful EDSA revolution." 39 Petitioner argues that
a revolutionary government was operative at that time by virtue of Proclamation No. 1 announcing
that President Aquino and Vice President Laurel were "taking power in the name and by the will of
the Filipino people."40 Petitioner asserts that the revolutionary government effectively withheld the
operation of the 1973 Constitution which guaranteed private respondents’ exclusionary right.
Moreover, petitioner argues that the exclusionary right arising from an illegal search applies only
beginning 2 February 1987, the date of ratification of the 1987 Constitution. Petitioner contends that
all rights under the Bill of Rights had already reverted to its embryonic stage at the time of the
search. Therefore, the government may confiscate the monies and items taken from Dimaano and
use the same in evidence against her since at the time of their seizure, private respondents did not
enjoy any constitutional right.
Petitioner is partly right in its arguments.
The EDSA Revolution took place on 23-25 February 1986. As succinctly stated in President Aquino’s
Proclamation No. 3 dated 25 March 1986, the EDSA Revolution was "done in defiance of the
provisions of the 1973 Constitution."41 The resulting government was indisputably a revolutionary
government bound by no constitution or legal limitations except treaty obligations that the
revolutionary government, as the de jure government in the Philippines, assumed under international
law.

The correct issues are: (1) whether the revolutionary government was bound by the Bill of Rights of
the 1973 Constitution during the interregnum, that is, after the actual and effective take-over of
power by the revolutionary government following the cessation of resistance by loyalist forces up to
24 March 1986 (immediately before the adoption of the Provisional Constitution); and (2) whether
the protection accorded to individuals under the International Covenant on Civil and Political Rights
("Covenant") and the Universal Declaration of Human Rights ("Declaration") remained in effect
during the interregnum.
We hold that the Bill of Rights under the 1973 Constitution was not operative during the interregnum.
However, we rule that the protection accorded to individuals under the Covenant and the Declaration
remained in effect during the interregnum.
During the interregnum, the directives and orders of the revolutionary government were the supreme
law because no constitution limited the extent and scope of such directives and orders. With the
abrogation of the 1973 Constitution by the successful revolution, there was no municipal law higher
than the directives and orders of the revolutionary government. Thus, during the interregnum, a
person could not invoke any exclusionary right under a Bill of Rights because there was neither a
constitution nor a Bill of Rights during the interregnum. As the Court explained in Letter of Associate
Justice Reynato S. Puno:42
A revolution has been defined as "the complete overthrow of the established government in any
country or state by those who were previously subject to it" or as "a sudden, radical and fundamental
change in the government or political system, usually effected with violence or at least some acts of
violence." In Kelsen's book, General Theory of Law and State, it is defined as that which "occurs
whenever the legal order of a community is nullified and replaced by a new order . . . a way not
prescribed by the first order itself."
It was through the February 1986 revolution, a relatively peaceful one, and more popularly known as
the "people power revolution" that the Filipino people tore themselves away from an existing regime.
This revolution also saw the unprecedented rise to power of the Aquino government.
From the natural law point of view, the right of revolution has been defined as "an inherent right of a
people to cast out their rulers, change their policy or effect radical reforms in their system of
government or institutions by force or a general uprising when the legal and constitutional methods
of making such change have proved inadequate or are so obstructed as to be unavailable." It has
been said that "the locus of positive law-making power lies with the people of the state" and from
there is derived "the right of the people to abolish, to reform and to alter any existing form of
government without regard to the existing constitution."
xxx
It is widely known that Mrs. Aquino’s rise to the presidency was not due to constitutional
processes; in fact, it was achieved in violation of the provisions of the 1973 Constitution as a
Batasang Pambansa resolution had earlier declared Mr. Marcos as the winner in the 1986
presidential election. Thus it can be said that the organization of Mrs. Aquino’s Government which
was met by little resistance and her control of the state evidenced by the appointment of the Cabinet

and other key officers of the administration, the departure of the Marcos Cabinet officials, revamp of
the Judiciary and the Military signaled the point where the legal system then in effect, had
ceased to be obeyed by the Filipino. (Emphasis supplied)
To hold that the Bill of Rights under the 1973 Constitution remained operative during the interregnum
would render void all sequestration orders issued by the Philippine Commission on Good
Government ("PCGG") before the adoption of the Freedom Constitution. The sequestration orders,
which direct the freezing and even the take-over of private property by mere executive issuance
without judicial action, would violate the due process and search and seizure clauses of the Bill of
Rights.
During the interregnum, the government in power was concededly a revolutionary government
bound by no constitution. No one could validly question the sequestration orders as violative of the
Bill of Rights because there was no Bill of Rights during the interregnum. However, upon the
adoption of the Freedom Constitution, the sequestered companies assailed the sequestration orders
as contrary to the Bill of Rights of the Freedom Constitution.
In Bataan Shipyard & Engineering Co. Inc. vs. Presidential Commission on Good
Government,43 petitioner Baseco, while conceding there was no Bill of Rights during the interregnum,
questioned the continued validity of the sequestration orders upon adoption of the Freedom
Constitution in view of the due process clause in its Bill of Rights. The Court ruled that the Freedom
Constitution, and later the 1987 Constitution, expressly recognized the validity of sequestration
orders, thus:
If any doubt should still persist in the face of the foregoing considerations as to the validity and
propriety of sequestration, freeze and takeover orders, it should be dispelled by the fact that these
particular remedies and the authority of the PCGG to issue them have received constitutional
approbation and sanction. As already mentioned, the Provisional or "Freedom" Constitution
recognizes the power and duty of the President to enact "measures to achieve the mandate of the
people to . . . (r)ecover ill-gotten properties amassed by the leaders and supporters of the previous
regime and protect the interest of the people through orders of sequestration or freezing of assets or
accounts." And as also already adverted to, Section 26, Article XVIII of the 1987 Constitution treats
of, and ratifies the "authority to issue sequestration or freeze orders under Proclamation No. 3 dated
March 25, 1986."
The framers of both the Freedom Constitution and the 1987 Constitution were fully aware that the
sequestration orders would clash with the Bill of Rights. Thus, the framers of both constitutions had
to include specific language recognizing the validity of the sequestration orders. The following
discourse by Commissioner Joaquin G. Bernas during the deliberations of the Constitutional
Commission is instructive:
FR. BERNAS: Madam President, there is something schizophrenic about the arguments in defense
of the present amendment.
For instance, I have carefully studied Minister Salonga’s lecture in the Gregorio Araneta University
Foundation, of which all of us have been given a copy. On the one hand, he argues that everything

the Commission is doing is traditionally legal. This is repeated by Commissioner Romulo also.
Minister Salonga spends a major portion of his lecture developing that argument. On the other hand,
almost as an afterthought, he says that in the end what matters are the results and not the legal
niceties, thus suggesting that the PCGG should be allowed to make some legal shortcuts, another
word for niceties or exceptions.
Now, if everything the PCGG is doing is legal, why is it asking the CONCOM for special protection?
The answer is clear. What they are doing will not stand the test of ordinary due process, hence they
are asking for protection, for exceptions. Grandes malos, grandes remedios, fine, as the saying
stands, but let us not say grandes malos, grande y malos remedios. That is not an allowable
extrapolation. Hence, we should not give the exceptions asked for, and let me elaborate and give
three reasons:
First, the whole point of the February Revolution and of the work of the CONCOM is to hasten
constitutional normalization. Very much at the heart of the constitutional normalization is the full
effectivity of the Bill of Rights. We cannot, in one breath, ask for constitutional normalization and at
the same time ask for a temporary halt to the full functioning of what is at the heart of
constitutionalism. That would be hypocritical; that would be a repetition of Marcosian protestation of
due process and rule of law. The New Society word for that is "backsliding." It is tragic when we
begin to backslide even before we get there.
Second, this is really a corollary of the first. Habits tend to become ingrained. The committee report
asks for extraordinary exceptions from the Bill of Rights for six months after the convening of
Congress, and Congress may even extend this longer.
Good deeds repeated ripen into virtue; bad deeds repeated become vice. What the committee report
is asking for is that we should allow the new government to acquire the vice of disregarding the Bill
of Rights.
Vices, once they become ingrained, become difficult to shed. The practitioners of the vice begin to
think that they have a vested right to its practice, and they will fight tooth and nail to keep the
franchise. That would be an unhealthy way of consolidating the gains of a democratic revolution.
Third, the argument that what matters are the results and not the legal niceties is an argument that is
very disturbing. When it comes from a staunch Christian like Commissioner Salonga, a Minister, and
repeated verbatim by another staunch Christian like Commissioner Tingson, it becomes doubly
disturbing and even discombobulating. The argument makes the PCGG an auctioneer, placing the
Bill of Rights on the auction block. If the price is right, the search and seizure clause will be sold.
"Open your Swiss bank account to us and we will award you the search and seizure clause. You can
keep it in your private safe."
Alternatively, the argument looks on the present government as hostage to the hoarders of hidden
wealth. The hoarders will release the hidden health if the ransom price is paid and the ransom price
is the Bill of Rights, specifically the due process in the search and seizure clauses. So, there is
something positively revolving about either argument. The Bill of Rights is not for sale to the highest
bidder nor can it be used to ransom captive dollars. This nation will survive and grow strong, only if it

would become convinced of the values enshrined in the Constitution of a price that is beyond
monetary estimation.
For these reasons, the honorable course for the Constitutional Commission is to delete all of Section
8 of the committee report and allow the new Constitution to take effect in full vigor. If Section 8 is
deleted, the PCGG has two options. First, it can pursue the Salonga and the Romulo argument —
that what the PCGG has been doing has been completely within the pale of the law. If sustained, the
PCGG can go on and should be able to go on, even without the support of Section 8. If not
sustained, however, the PCGG has only one honorable option, it must bow to the majesty of the Bill
of Rights.
The PCGG extrapolation of the law is defended by staunch Christians. Let me conclude with what
another Christian replied when asked to toy around with the law. From his prison cell, Thomas More
said, "I'll give the devil benefit of law for my nation’s safety sake." I ask the Commission to give the
devil benefit of law for our nation’s sake. And we should delete Section 8.
Thank you, Madam President. (Emphasis supplied)
Despite the impassioned plea by Commissioner Bernas against the amendment excepting
sequestration orders from the Bill of Rights, the Constitutional Commission still adopted the
amendment as Section 26,44 Article XVIII of the 1987 Constitution. The framers of the Constitution
were fully aware that absent Section 26, sequestration orders would not stand the test of due
process under the Bill of Rights.
Thus, to rule that the Bill of Rights of the 1973 Constitution remained in force during the interregnum,
absent a constitutional provision excepting sequestration orders from such Bill of Rights, would
clearly render all sequestration orders void during the interregnum. Nevertheless, even during the
interregnum the Filipino people continued to enjoy, under the Covenant and the Declaration, almost
the same rights found in the Bill of Rights of the 1973 Constitution.
The revolutionary government, after installing itself as the de jure government, assumed
responsibility for the State’s good faith compliance with the Covenant to which the Philippines is a
signatory. Article 2(1) of the Covenant requires each signatory State "to respect and to ensure to all
individuals within its territory and subject to its jurisdiction the rights 45 recognized in the present
Covenant." Under Article 17(1) of the Covenant, the revolutionary government had the duty to insure
that "[n]o one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or
correspondence."
The Declaration, to which the Philippines is also a signatory, provides in its Article 17(2) that "[n]o
one shall be arbitrarily deprived of his property." Although the signatories to the Declaration did not
intend it as a legally binding document, being only a declaration, the Court has interpreted the
Declaration as part of the generally accepted principles of international law and binding on the
State.46 Thus, the revolutionary government was also obligated under international law to observe
the rights47 of individuals under the Declaration.

The revolutionary government did not repudiate the Covenant or the Declaration during the
interregnum. Whether the revolutionary government could have repudiated all its obligations under
the Covenant or the Declaration is another matter and is not the issue here. Suffice it to say that the
Court considers the Declaration as part of customary international law, and that Filipinos as human
beings are proper subjects of the rules of international law laid down in the Covenant. The fact is the
revolutionary government did not repudiate the Covenant or the Declaration in the same way it
repudiated the 1973 Constitution. As the de jure government, the revolutionary government could not
escape responsibility for the State’s good faith compliance with its treaty obligations under
international law.
It was only upon the adoption of the Provisional Constitution on 25 March 1986 that the directives
and orders of the revolutionary government became subject to a higher municipal law that, if
contravened, rendered such directives and orders void. The Provisional Constitution adopted
verbatim the Bill of Rights of the 1973 Constitution. 48 The Provisional Constitution served as a selflimitation by the revolutionary government to avoid abuses of the absolute powers entrusted to it by
the people.
During the interregnum when no constitution or Bill of Rights existed, directives and orders issued by
government officers were valid so long as these officers did not exceed the authority granted them
by the revolutionary government. The directives and orders should not have also violated the
Covenant or the Declaration. In this case, the revolutionary government presumptively sanctioned
the warrant since the revolutionary government did not repudiate it. The warrant, issued by a judge
upon proper application, specified the items to be searched and seized. The warrant is thus valid
with respect to the items specifically described in the warrant.
However, the Constabulary raiding team seized items not included in the warrant. As admitted by
petitioner’s witnesses, the raiding team confiscated items not included in the warrant, thus:
Direct Examination of Capt. Rodolfo Sebastian
AJ AMORES
Q. According to the search warrant, you are supposed to seize only for weapons. What else, aside
from the weapons, were seized from the house of Miss Elizabeth Dimaano?
A. The communications equipment, money in Philippine currency and US dollars, some jewelries,
land titles, sir.
Q. Now, the search warrant speaks only of weapons to be seized from the house of Elizabeth
Dimaano. Do you know the reason why your team also seized other properties not mentioned in said
search warrant?
A. During the conversation right after the conduct of said raid, I was informed that the reason why
they also brought the other items not included in the search warrant was because the money and
other jewelries were contained in attaché cases and cartons with markings "Sony Trinitron", and I

think three (3) vaults or steel safes. Believing that the attaché cases and the steel safes were
containing firearms, they forced open these containers only to find out that they contained money.
xxx
Q. You said you found money instead of weapons, do you know the reason why your team seized
this money instead of weapons?
A. I think the overall team leader and the other two officers assisting him decided to bring along also
the money because at that time it was already dark and they felt most secured if they will bring that
because they might be suspected also of taking money out of those items, your Honor.49
Cross-examination
Atty. Banaag
Q. Were you present when the search warrant in connection with this case was applied before the
Municipal Trial Court of Batangas, Branch 1?
A. Yes, sir.
Q. And the search warrant applied for by you was for the search and seizure of five (5) baby armalite
rifles M-16 and five (5) boxes of ammunition?
A. Yes, sir.
xxx
AJ AMORES
Q. Before you applied for a search warrant, did you conduct surveillance in the house of Miss
Elizabeth Dimaano?
A. The Intelligence Operatives conducted surveillance together with the MSU elements, your Honor.
Q. And this party believed there were weapons deposited in the house of Miss Elizabeth Dimaano?
A. Yes, your Honor.
Q. And they so swore before the Municipal Trial Judge?
A. Yes, your Honor.
Q. But they did not mention to you, the applicant for the search warrant, any other properties or
contraband which could be found in the residence of Miss Elizabeth Dimaano?

A. They just gave us still unconfirmed report about some hidden items, for instance, the
communications equipment and money. However, I did not include that in the application for search
warrant considering that we have not established concrete evidence about that. So when…
Q. So that when you applied for search warrant, you had reason to believe that only weapons were
in the house of Miss Elizabeth Dimaano?
A. Yes, your Honor.50
xxx
Q. You stated that a .45 caliber pistol was seized along with one armalite rifle M-16 and how many
ammunition?
A. Forty, sir.
Q. And this became the subject of your complaint with the issuing Court, with the fiscal’s office who
charged Elizabeth Dimaano for Illegal Possession of Firearms and Ammunition?
A. Yes, sir.
Q. Do you know what happened to that case?
A. I think it was dismissed, sir.
Q. In the fiscal’s office?
A. Yes, sir.
Q. Because the armalite rifle you seized, as well as the .45 caliber pistol had a Memorandum
Receipt in the name of Felino Melegrito, is that not correct?
A. I think that was the reason, sir.
Q. There were other articles seized which were not included in the search warrant, like for instance,
jewelries. Why did you seize the jewelries?
A. I think it was the decision of the overall team leader and his assistant to bring along also the
jewelries and other items, sir. I do not really know where it was taken but they brought along also
these articles. I do not really know their reason for bringing the same, but I just learned that these
were taken because they might get lost if they will just leave this behind.
xxx
Q. How about the money seized by your raiding team, they were not also included in the search
warrant?

A. Yes sir, but I believe they were also taken considering that the money was discovered to be
contained in attaché cases. These attaché cases were suspected to be containing pistols or other
high powered firearms, but in the course of the search the contents turned out to be money. So the
team leader also decided to take this considering that they believed that if they will just leave the
money behind, it might get lost also.
1âwphi1

Q. That holds true also with respect to the other articles that were seized by your raiding team, like
Transfer Certificates of Title of lands?
A. Yes, sir. I think they were contained in one of the vaults that were opened. 51
It is obvious from the testimony of Captain Sebastian that the warrant did not include the monies,
communications equipment, jewelry and land titles that the raiding team confiscated. The search
warrant did not particularly describe these items and the raiding team confiscated them on its own
authority. The raiding team had no legal basis to seize these items without showing that these items
could be the subject of warrantless search and seizure.52 Clearly, the raiding team exceeded its
authority when it seized these items.
The seizure of these items was therefore void, and unless these items are contraband per se, 53 and
they are not, they must be returned to the person from whom the raiding seized them. However, we
do not declare that such person is the lawful owner of these items, merely that the search and
seizure warrant could not be used as basis to seize and withhold these items from the possessor.
We thus hold that these items should be returned immediately to Dimaano.
WHEREFORE, the petition for certiorari is DISMISSED. The questioned Resolutions of the
Sandiganbayan dated 18 November 1991 and 25 March 1992 in Civil Case No. 0037, remanding the
records of this case to the Ombudsman for such appropriate action as the evidence may warrant,
and referring this case to the Commissioner of the Bureau of Internal Revenue for a determination of
any tax liability of respondent Elizabeth Dimaano, are AFFIRMED.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC

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 nongovernmental 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 thirdmillennium 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 marketdriven 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 andmandamus 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, 2 Secretary Navarro on behalf of the Republic of the Philippines, agreed:
(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, 3 stating among others that "the Uruguay Round Final Act is
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 4 likewise dated August 11, 1994, which stated among others that "the
Uruguay Round Final Act, the Agreement Establishing the World Trade Organization, the Ministerial
Declarations and Decisions, and the Understanding on Commitments in Financial Services are hereby
submitted to the Senate 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." 6 The text of the WTO
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 he
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 7 the Instrument of Ratification,
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, 8 the Solicitor General describes these two latter documents as follows:
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 nonconforming measures, market access, national treatment, and definitions of nonresident 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," 9 for
brevity, (1) 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 respondentmembers 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." 12 Once
a "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
1987 Constitution, 15 as follows:

14

raised in the petition is clearly set out in the

Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether 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. 16 As explained by former Chief Justice Roberto Concepcion, 17 "the
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, 18 it will not shirk, digress from or
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 andmandamus 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 Agreement
and 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
xxx xxx xxx
Sec. 19. The State shall develop a self-reliant and independent national economy
effectively controlled by Filipinos.
xxx xxx xxx
Article XII
NATIONAL ECONOMY AND PATRIMONY
xxx xxx xxx
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.
xxx xxx xxx

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. 20 Petitioners further argue that these provisions
contravene 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 21 is called the "basic political creed of the nation" by
Dean Vicente Sinco. 22 These principles in Article II are not intended to be self-executing principles ready

for enforcement through the courts. 23 They are used by the judiciary as aids or as guides in the 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, 24 the principles and state policies enumerated in 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 25 that broad constitutional principles need legislative
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 inOposa vs. Factoran, Jr., 26 explained these reasons as follows:
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" 27 and in the use of "Filipino labor, domestic materials
and locally-produced goods"; (2) by mandating the State to "adopt measures that help make them
competitive; 28 and (3) by requiring the State to "develop a self-reliant and independent national economy
effectively controlled by Filipinos." 29 In similar language, the Constitution takes into account 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"; 30 and speaks of
industries "which are competitive in both domestic and foreign markets" 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., 31 this Court held that "Sec. 10, second par., Art. XII of the 1987 Constitution is a mandatory, 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. 32 In other words, the Constitution did
not 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 34 of the
WTO Agreement 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" 35 does not
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," 37 the fundamental law encourages industries that are "competitive in both domestic and
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 38 explains:
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." 39 Petitioners maintain that this undertaking "unduly limits, restricts and impairs 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. 41 And while the Constitution allows Congress to authorize the President to fix
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, 42 as in fact it did under Sec. 401 of the Tariff and Customs Code.
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 allencompassing 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." 43 By the doctrine of
incorporation, the country is bound by generally accepted principles of international law, which are
considered to be automatically part of our own laws. 44 One of the oldest and most fundamental rules 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.46 The sovereignty of a state therefore cannot in fact and in reality be considered 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." 47-A Under Article 2
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 peacekeeping 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) 49 intrudes on the power
of the Supreme Court to promulgate rules concerning pleading, practice and procedures. 50
To understand the scope and meaning of Article 34, TRIPS,
follows:

51

it will be fruitful to restate its full text as

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 53 which enumerated
what constitutes the Final 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." 54 It is not the treaty itself. It is rather a summary of the
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 55 in Vol. I of the 36-volume Uruguay Round of Multilateral Trade 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, 58 as follows:
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, 59 the 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. 61 Mere abuse of discretion is not enough. It must be grave abuse of
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. 62 Failure on 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 65 where "the East will become the dominant region of the world economically, politically
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.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 155504

June 26, 2009

PROFESSIONAL VIDEO, INC., Petitioner,
vs.
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY, Respondent.
DECISION
BRION, J.:
We resolve the petition filed by Professional Video, Inc. (PROVI)1 to annul and set aside the
Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 67599, and its subsequent Order denying
PROVI’s motion for reconsideration.3 The assailed CA decision nullified:
a. the Order4 dated July 16, 2001 of the Regional Trial Court (RTC), Pasig City, in Civil Case No.
68527, directing the attachment/garnishment of the properties of respondent Technical Education
and Skills Development Authority (TESDA) amounting to Thirty Five Million Pesos (P35,000,000.00);
and
b. the RTC’s August 24, 2001 Order5 denying respondent TESDA’s motion to discharge/quash writ of
attachment.
THE FACTUAL BACKGROUND
PROVI is an entity engaged in the sale of high technology equipment, information technology
products and broadcast devices, including the supply of plastic card printing and security facilities.
TESDA is an instrumentality of the government established under Republic Act (R.A.) No. 7796 (the
TESDA Act of 1994) and attached to the Department of Labor and Employment (DOLE) to "develop
and establish a national system of skills standardization, testing, and certification in the country." 6 To
fulfill this mandate, it sought to issue security-printed certification and/or identification polyvinyl
(PVC) cards to trainees who have passed the certification process.
TESDA’s Pre-Qualification Bids Award Committee (PBAC) conducted two (2) public biddings on
June 25, 1999 and July 22, 1999 for the printing and encoding of PVC cards. A failure of bidding
resulted in both instances since only two (2) bidders – PROVI and Sirex Phils. Corp. – submitted
proposals.
Due to the failed bidding, the PBAC recommended that TESDA enter into a negotiated contract with
PROVI. On December 29, 1999, TESDA and PROVI signed and executed their "Contract Agreement
Project: PVC ID Card Issuance" (the Contract Agreement) for the provision of goods and services in
the printing and encoding of PVC cards.7 Under this Contract Agreement, PROVI was to provide
TESDA with the system and equipment compliant with the specifications defined in the Technical
Proposal. In return, TESDA would pay PROVI the amount of Thirty-Nine Million Four Hundred and

Seventy-Five Thousand Pesos (P39,475,000) within fifteen (15) days after TESDA’s acceptance of
the contracted goods and services.
On August 24, 2000, TESDA and PROVI executed an "Addendum to the Contract Agreement
Project: PVC ID Card Issuance" (Addendum),8 whose terms bound PROVI to deliver one hundred
percent (100%) of the enumerated supplies to TESDA consisting of five hundred thousand (500,000)
pieces of security foil; five (5) pieces of security die with TESDA seal; five hundred thousand
(500,000) pieces of pre-printed and customized identification cards; one hundred thousand
(100,000) pieces of scannable answer sheets; and five hundred thousand (500,000) customized
TESDA holographic laminate. In addition, PROVI would install and maintain the following equipment:
one (1) unit of Micropoise, two (2) units of card printer, three (3) units of flatbed scanner, one (1) unit
of OMR scanner, one (1) unit of Server, and seven (7) units of personal computer.
TESDA in turn undertook to pay PROVI thirty percent (30%) of the total cost of the supplies within
thirty (30) days after receipt and acceptance of the contracted supplies, with the balance payable
within thirty (30) days after the initial payment.
According to PROVI, it delivered the following items to TESDA on the dates indicated:
Date

Particulars

26 April 2000

48,500 pre-printed cards

P 2,764,500.00

07 June 2000

330,000 pre-printed cards

18,810,000.00

07 August 2000

121,500 pre-printed cards

6,925,500.00

26 April 2000

100,000 scannable answer sheets

600,000.00

06 June 2000

5 Micro-Poise customized die

375,000.00

13 June 2000

35 boxes @ 15,000 imp/box
Custom hologram Foil
Total

Amount

10,000,000.00
P 39,475,000.00

PROVI further alleged that out of TESDA’s liability of P39,475,000.00, TESDA paid PROVI
only P3,739,500.00, leaving an outstanding balance of P35,735,500.00, as evidenced by PROVI’s
Statement of Account.9 Despite the two demand letters dated March 8 and April 27, 2001 that PROVI
sent TESDA,10 the outstanding balance remained unpaid.
On July 11, 2001, PROVI filed with the RTC a complaint for sum of money with damages against
TESDA. PROVI additionally prayed for the issuance of a writ of preliminary attachment/garnishment
against TESDA. The case was docketed as Civil Case No. 68527. In an Order dated July 16, 2001,
the RTC granted PROVI’s prayer and issued a writ of preliminary attachment against the properties
of TESDA not exempt from execution in the amount of P35,000,000.00.11
TESDA responded on July 24, 2001 by filing a Motion to Discharge/Quash the Writ of Attachment,
arguing mainly that public funds cannot be the subject of garnishment.12 The RTC denied TESDA’s
motion, and subsequently ordered the manager of the Land Bank of the Philippines to produce
TESDA’s bank statement for the garnishment of the covered amount.13

Faced with these rulings, TESDA filed a Petition for Certiorari with the CA to question the RTC
orders, imputing grave abuse of discretion amounting to lack or excess of jurisdiction on the trial
court for issuing a writ of preliminary attachment against TESDA’s public funds. 14
The CA set aside the RTC’s orders after finding that: (a) TESDA’s funds are public in nature and,
therefore, exempt from garnishment; and (b) TESDA’s purchase of the PVC cards was a necessary
incident of its governmental function; consequently, it ruled that there was no legal basis for the
issuance of a writ of preliminary attachment/garnishment. 15 The CA subsequently denied PROVI’s
motion for reconsideration;16 hence, the present petition.
THE PETITION
The petition submits to this Court the single issue of whether or not the writ of attachment against
TESDA and its funds, to cover PROVI’s claim against TESDA, is valid. The issue involves a pure
question of law and requires us to determine whether the CA was correct in ruling that the RTC
gravely abused its discretion in issuing a writ of attachment against TESDA.
PROVI argues that the CA should have dismissed TESDA’s petition for certiorari as the RTC did not
commit any grave abuse of discretion when it issued the Orders dated July 16, 2001 and August 24,
2001. According to PROVI, the RTC correctly found that when TESDA entered into a purely
commercial contract with PROVI, TESDA went to the level of an ordinary private citizen and could no
longer use the defense of state immunity from suit. PROVI further contends that it has alleged
sufficient ultimate facts in the affidavit it submitted to support its application for a writ of preliminary
attachment. Lastly, PROVI maintains that sufficient basis existed for the RTC’s grant of the writ of
preliminary attachment, since TESDA fraudulently misapplied or embezzled the money earmarked
for the payment of the contracted supplies and services, as evidenced by the Certification as to
Availability of Funds.
TESDA claims that it entered the Contract Agreement and Addendum in the performance of its
governmental function to develop and establish a national system of skills standardization, testing,
and certification; in the performance of this governmental function, TESDA is immune from suit. Even
assuming that it had impliedly consented to be sued by entering into a contract with PROVI, TESDA
posits that the RTC still did not have the power to garnish or attach its funds since these are public
funds. Lastly, TESDA points out that PROVI failed to comply with the elements for the valid issuance
of a writ of preliminary attachment, as set forth in Section 1, Rule 57 of the 1997 Rules of Civil
Procedure.
THE COURT’S RULING
We find, as the CA did, that the RTC’s questioned order involved a gross misreading of the law and
jurisprudence amounting to action in excess of its jurisdiction. Hence, we resolve to DENY PROVI’s
petition for lack of merit.
TESDA is an instrumentality of the government undertaking governmental functions.
R.A. No. 7796 created the Technical Education and Skills Development Authority or TESDA under
the declared "policy of the State to provide relevant, accessible, high quality and efficient technical
education and skills development in support of the development of high quality Filipino middle-level
manpower responsive to and in accordance with Philippine development goals and
priorities."17 TESDA replaced and absorbed the National Manpower and Youth Council, the Bureau of
Technical and Vocational Education and the personnel and functions pertaining to technicalvocational education in the regional offices of the Department of Education, Culture and Sports and

the apprenticeship program of the Bureau of Local Employment of the DOLE. 18 Thus, TESDA is an
unincorporated instrumentality of the government operating under its own charter.
Among others, TESDA is empowered to: approve trade skills standards and trade tests as
established and conducted by private industries; establish and administer a system of accreditation
of both public and private institutions; establish, develop and support the institutions' trainors' training
and/or programs; exact reasonable fees and charges for such tests and trainings conducted, and
retain such earnings for its own use, subject to guidelines promulgated by the Authority; and perform
such other duties and functions necessary to carry out the provisions of the Act, consistent with the
purposes of the creation of TESDA.19
Within TESDA’s structure, as provided by R.A. No. 7769, is a Skills Standards and Certification
Office expressly tasked, among others, to develop and establish a national system of skills
standardization, testing and certification in the country; and to conduct research and development on
various occupational areas in order to recommend policies, rules and regulations for effective and
efficient skills standardization, testing and certification system in the country.20 The law likewise
mandates that "[T]here shall be national occupational skills standards to be established by TESDAaccredited industry committees. The TESDA shall develop and implement a certification and
accreditation program in which private groups and trade associations are accredited to conduct
approved trade tests, and the local government units to promote such trade testing activities in their
respective areas in accordance with the guidelines to be set by the TESDA. The Secretary of Labor
and Employment shall determine the occupational trades for mandatory certification. All certificates
relating to the national trade skills testing and certification system shall be issued by the TESDA
through its Secretariat."21
All these measures are undertaken pursuant to the constitutional command that "[T]he State affirms
labor as a primary social economic force," and shall "protect the rights of workers and promote their
welfare";22 that "[T]he State shall protect and promote the right of all citizens to quality education at
all levels, and shall take appropriate steps to make such education accessible to all"; 23 in order "to
afford protection to labor" and "promote full employment and equality of employment opportunities
for all."24
Under these terms, both constitutional and statutory, we do not believe that the role and status of
TESDA can seriously be contested: it is an unincorporated instrumentality of the government,
directly attached to the DOLE through the participation of the Secretary of Labor as its Chairman, for
the performance of governmental functions – i.e., the handling of formal and non-formal education
and training, and skills development. As an unincorporated instrumentality operating under a specific
charter, it is equipped with both express and implied powers,25 and all State immunities fully apply to
it.26
TESDA, as an agency of the State, cannot be sued without its consent.
The rule that a state may not be sued without its consent is embodied in Section 3, Article XVI of the
1987 Constitution and has been an established principle that antedates this Constitution. 27 It is as
well a universally recognized principle of international law that exempts a state and its organs from
the jurisdiction of another state.28 The principle is based on the very essence of sovereignty, and on
the practical ground that there can be no legal right as against the authority that makes the law on
which the right depends.29 It also rests on reasons of public policy — that public service would be
hindered, and the public endangered, if the sovereign authority could be subjected to law suits at the
instance of every citizen and, consequently, controlled in the uses and dispositions of the means
required for the proper administration of the government. 30

The proscribed suit that the state immunity principle covers takes on various forms, namely: a suit
against the Republic by name; a suit against an unincorporated government agency; a suit against a
government agency covered by a charter with respect to the agency’s performance of governmental
functions; and a suit that on its face is against a government officer, but where the ultimate liability
will fall on the government. In the present case, the writ of attachment was issued against a
government agency covered by its own charter. As discussed above, TESDA performs governmental
functions, and the issuance of certifications is a task within its function of developing and
establishing a system of skills standardization, testing, and certification in the country. From the
perspective of this function, the core reason for the existence of state immunity applies – i.e., the
public policy reason that the performance of governmental function cannot be hindered or delayed
by suits, nor can these suits control the use and disposition of the means for the performance of
governmental functions. In Providence Washington Insurance Co. v. Republic of the Philippines, 31 we
said:
[A] continued adherence to the doctrine of non-suability is not to be deplored for as against the
inconvenience that may be caused private parties, the loss of governmental efficiency and the
obstacle to the performance of its multifarious functions are far greater if such a fundamental
principle were abandoned and the availability of judicial remedy were not thus restricted. With the
well known propensity on the part of our people to go to court, at the least provocation, the loss of
time and energy required to defend against law suits, in the absence of such a basic principle that
constitutes such an effective obstacle, could very well be imagined.
PROVI argues that TESDA can be sued because it has effectively waived its immunity when it
entered into a contract with PROVI for a commercial purpose. According to PROVI, since the
purpose of its contract with TESDA is to provide identification PVC cards with security seal which
TESDA will thereafter sell to TESDA trainees, TESDA thereby engages in commercial transactions
not incidental to its governmental functions.
TESDA’s response to this position is to point out that it is not engaged in business, and there is
nothing in the records to show that its purchase of the PVC cards from PROVI is for a business
purpose. While TESDA admits that it will charge the trainees with a fee for the PVC cards, it claims
that this fee is only to recover their costs and is not intended for profit.
We agree with TESDA. As the appellate court found, the PVC cards purchased by TESDA from
PROVI are meant to properly identify the trainees who passed TESDA’s National Skills Certification
Program – the program that immediately serves TESDA’s mandated function of developing and
establishing a national system of skills standardization, testing, and certification in the
country.32 Aside from the express mention of this function in R.A. No. 7796, the details of this function
are provided under DOLE Administrative Order No. 157, S. 1992, as supplemented by Department
Order Nos. 3 thru 3-F, S. 1994 and Department Order No. 13, S. 1994.33
Admittedly, the certification and classification of trainees may be undertaken in ways other than the
issuance of identification cards, as the RTC stated in its assailed Order.34 How the mandated
certification is to be done, however, lies within the discretion of TESDA as an incident of its
mandated function, and is a properly delegated authority that this Court cannot inquire into, unless
its exercise is attended by grave abuse of discretion.
That TESDA sells the PVC cards to its trainees for a fee does not characterize the transaction as
industrial or business; the sale, expressly authorized by the TESDA Act,35 cannot be considered
separately from TESDA’s general governmental functions, as they are undertaken in the discharge
of these functions. Along this line of reasoning, we held in Mobil Philippines v. Customs Arrastre
Services:36

Now, the fact that a non-corporate government entity performs a function proprietary in nature does
not necessarily result in its being suable. If said non-governmental function is undertaken as an
incident to its governmental function, there is no waiver thereby of the sovereign immunity from suit
extended to such government entity.
TESDA’s funds are public in character, hence exempt from attachment or garnishment.
Even assuming that TESDA entered into a proprietary contract with PROVI and thereby gave its
implied consent to be sued, TESDA’s funds are still public in nature and, thus, cannot be the valid
subject of a writ of garnishment or attachment. Under Section 33 of the TESDA Act, the TESDA
budget for the implementation of the Act shall be included in the annual General Appropriation Act;
hence, TESDA funds, being sourced from the Treasury, are moneys belonging to the government, or
any of its departments, in the hands of public officials.37 We specifically spoke of the limits in dealing
with this fund in Republic v. Villasor38 when we said:
This fundamental postulate underlying the 1935 Constitution is now made explicit in the revised
charter. It is therein expressly provided, ‘The State may not be sued without its consent.’ A corollary,
both dictated by logic and sound sense, from such a basic concept, is that public funds cannot be
the object of garnishment proceedings even if the consent to be sued had been previously granted
and the state liability adjudged. Thus in the recent case of Commissioner of Public Highways vs. San
Diego, such a well-settled doctrine was restated in the opinion of Justice Teehankee:
The universal rule that where the State gives its consent to be sued by private parties either by
general or special law, it may limit claimant's action 'only up to the completion of proceedings
anterior to the stage of execution' and that the power of the Courts ends when the judgment is
rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious considerations of public
policy. Disbursements of public funds must be covered by the corresponding appropriation as
required by law. The functions and public services rendered by the State cannot be allowed to be
paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as
appropriated by law. [Emphasis supplied.]
We reiterated this doctrine in Traders Royal Bank v. Intermediate Appellate Court, 39 where we said:
The NMPC’s implied consent to be sued notwithstanding, the trial court did not have the power to
garnish NMPC deposits to answer for any eventual judgment against it. Being public funds, the
deposits are not within the reach of any garnishment or attachment proceedings. [Emphasis
supplied.]
As pointed out by TESDA in its Memorandum,40 the garnished funds constitute TESDA’s lifeblood –
in government parlance, its MOOE41 – whose withholding via a writ of attachment, even on a
temporary basis, would paralyze TESDA’s functions and services. As well, these funds also include
TESDA’s Personal Services funds from which salaries of TESDA personnel are sourced. Again and
for obvious reasons, the release of these funds cannot be delayed.
PROVI has not shown that it is entitled to the writ of attachment.
Even without the benefit of any immunity from suit, the attachment of TESDA funds should not have
been granted, as PROVI failed to prove that TESDA "fraudulently misapplied or converted funds
allocated under the Certificate as to Availability of Funds." Section 1, Rule 57 of the Rules of Court
sets forth the grounds for issuance of a writ of preliminary attachment, as follows:

SECTION 1. Grounds upon which attachment may issue. – A plaintiff or any proper party may, at the
commencement of the action or at any time thereafter, have the property of the adverse party
attached as security for the satisfaction of any judgment that may be recovered in the following
cases:
(a) In an action for recovery of a specified amount of money or damages, other than moral
and exemplary, on a cause of action arising from law, contract, quasi-contract, delict or
quasi-delict against a party who is about to depart from the Philippines with intent to defraud
his creditors;
(b) In an action for money or property embezzled or fraudulently misapplied or converted to
his use by a public officer, or an officer of a corporation, or an attorney, factor, broker, agent
or clerk, in the course of his employment as such, or by any other person in a fiduciary
capacity, or for a willful violation of duty;
(c) In an action to recover the possession of property unjustly or fraudulently taken, detained
or converted, when the property or any part thereof, has been concealed, removed or
disposed of to prevent its being found or taken by the applicant or an authorized person;
(d) In an action against a party who has been guilty of fraud in contracting the debt or
incurring the obligation upon which the action is brought, or in concealing or disposing of the
property for the taking, detention or conversion of which the action is brought;
(e) In an action against a party who has removed or disposed of his property, or is about to
do so, with intent to defraud his creditors;
(f) In an action against a party who does not reside and is not found in the Philippines, or on
whom summons may be served by publication. [Emphasis supplied.]
Jurisprudence teaches us that the rule on the issuance of a writ of attachment must be construed
strictly in favor of the defendant. Attachment, a harsh remedy, must be issued only on concrete and
specific grounds and not on general averments merely quoting the words of the pertinent
rules.42 Thus, the applicant’s affidavit must contain statements clearly showing that the ground relied
upon for the attachment exists.
Section 1(b), Rule 57 of the Rules of Court, that PROVI relied upon, applies only where money or
property has been embezzled or converted by a public officer, an officer of a corporation, or some
other person who took advantage of his fiduciary position or who willfully violated his duty.
PROVI, in this case, never entrusted any money or property to TESDA. While the Contract
Agreement is supported by a Certificate as to Availability of Funds (Certificate) issued by the Chief of
TESDA’s Accounting Division, this Certificate does not automatically confer ownership over the funds
to PROVI. Absent any actual disbursement, these funds form part of TESDA’s public funds, and
TESDA’s failure to pay PROVI the amount stated in the Certificate cannot be construed as an act of
fraudulent misapplication or embezzlement. In this regard, Section 86 of Presidential Decree No.
1445 (The Accounting Code) provides:
Section 86. Certificate showing appropriation to meet contract. – Except in a case of a contract for
personal service, for supplies for current consumption or to be carried in stock not exceeding the
estimated consumption for three months, or banking transactions of government-owned or controlled
banks, no contract involving the expenditure of public funds by any government agency shall be

entered into or authorized unless the proper accounting official or the agency concerned shall have
certified to the officer entering into the obligation that funds have been duly appropriated for the
purpose and that the amount necessary to cover the proposed contract for the current fiscal year is
available for expenditure on account thereof, subject to verification by the auditor concerned. The
certification signed by the proper accounting official and the auditor who verified it, shall be attached
to and become an integral part of the proposed contract, and the sum so certified shall not thereafter
be available for expenditure for any other purpose until the obligation of the government agency
concerned under the contract is fully extinguished. [Emphasis supplied.]
By law, therefore, the amount stated in the Certification should be intact and remains devoted to its
purpose since its original appropriation. PROVI can rebut the presumption that necessarily arises
from the cited provision only by evidence to the contrary. No such evidence has been adduced.
Section 1 (d), Rule 57 of the Rules of Court applies where a party is guilty of fraud in contracting a
debt or incurring an obligation, or in concealing or disposing of the property for the taking, detention
or conversion of which the action is brought. In Wee v. Tankiansee, 43 we held that for a writ of
attachment to issue under this Rule, the applicant must sufficiently show the factual circumstances of
the alleged fraud because fraudulent intent cannot be inferred from the debtor’s mere non-payment
of the debt or failure to comply with his obligation. The affidavit, being the foundation of the writ, must
contain particulars showing how the imputed fraud was committed for the court to decide whether or
not to issue the writ. To reiterate, a writ of attachment can only be granted on concrete and specific
grounds and not on general averments merely quoting the words of the rules. 44
The affidavit filed by PROVI through Elmer Ramiro, its President and Chief Executive Officer, only
contained a general allegation that TESDA had fraudulent misapplied or converted the amount
of P10,975,000.00 that was allotted to it. Clearly, we cannot infer any finding of fraud from PROVI’s
vague assertion, and the CA correctly ruled that the lower court acted with grave abuse of discretion
in granting the writ of attachment despite want of any valid ground for its issuance.
1avvphi1

For all these reasons, we support the appellate court’s conclusion that no valid ground exists to
support the grant of the writ of attachment against TESDA. The CA’s annulment and setting aside of
the Orders of the RTC were therefore fully in order.
WHEREFORE, premises considered, we hereby DENY the petition filed by petitioner Professional
Video, Inc., and AFFIRM the Court of Appeals’ Decision dated July 23, 2002, and Resolution of
September 27, 2002, in CA-G.R. SP No. 67599. Costs against the petitioner.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 154705

June 26, 2003

THE REPUBLIC OF INDONESIA, HIS EXCELLENCY AMBASSADOR SOERATMIN, and
MINISTER COUNSELLOR AZHARI KASIM, Petitioners,
vs.
JAMES VINZON, doing business under the name and style of VINZON TRADE AND
SERVICES,Respondent.
DECISION
AZCUNA, J:
This is a petition for review on certiorari to set aside the Decision of the Court of Appeals dated May
30, 2002 and its Resolution dated August 16, 2002, in CA-G.R. SP No. 66894 entitled "The Republic
of Indonesia, His Excellency Ambassador Soeratmin and Minister Counselor Azhari Kasim v. Hon.
Cesar Santamaria, Presiding Judge, RTC Branch 145, Makati City, and James Vinzon, doing
business under the name and style of Vinzon Trade and Services."
Petitioner, Republic of Indonesia, represented by its Counsellor, Siti Partinah, entered into a
Maintenance Agreement in August 1995 with respondent James Vinzon, sole proprietor of Vinzon
Trade and Services. The Maintenance Agreement stated that respondent shall, for a consideration,
maintain specified equipment at the Embassy Main Building, Embassy Annex Building and the
Wisma Duta, the official residence of petitioner Ambassador Soeratmin. The equipment covered by
the Maintenance Agreement are air conditioning units, generator sets, electrical facilities, water
heaters, and water motor pumps. It is likewise stated therein that the agreement shall be effective for
a period of four years and will renew itself automatically unless cancelled by either party by giving
thirty days prior written notice from the date of expiry.1
Petitioners claim that sometime prior to the date of expiration of the said agreement, or before
August 1999, they informed respondent that the renewal of the agreement shall be at the discretion
of the incoming Chief of Administration, Minister Counsellor Azhari Kasim, who was expected to
arrive in February 2000. When Minister Counsellor Kasim assumed the position of Chief of
Administration in March 2000, he allegedly found respondent’s work and services unsatisfactory and
not in compliance with the standards set in the Maintenance Agreement. Hence, the Indonesian
Embassy terminated the agreement in a letter dated August 31, 2000. 2 Petitioners claim, moreover,
that they had earlier verbally informed respondent of their decision to terminate the agreement.
On the other hand, respondent claims that the aforesaid termination was arbitrary and unlawful.
Respondent cites various circumstances which purportedly negated petitioners’ alleged
dissatisfaction over respondent’s services: (a) in July 2000, Minister Counsellor Kasim still requested
respondent to assign to the embassy an additional full-time worker to assist one of his other workers;
(b) in August 2000, Minister Counsellor Kasim asked respondent to donate a prize, which the latter
did, on the occasion of the Indonesian Independence Day golf tournament; and (c) in a letter dated
August 22, 2000, petitioner Ambassador Soeratmin thanked respondent for sponsoring a prize and
expressed his hope that the cordial relations happily existing between them will continue to prosper
and be strengthened in the coming years.

Hence, on December 15, 2000, respondent filed a complaint 3 against petitioners docketed as Civil
Case No. 18203 in the Regional Trial Court (RTC) of Makati, Branch 145. On February 20, 2001,
petitioners filed a Motion to Dismiss, alleging that the Republic of Indonesia, as a foreign sovereign
State, has sovereign immunity from suit and cannot be sued as a party-defendant in the Philippines.
The said motion further alleged that Ambassador Soeratmin and Minister Counsellor Kasim are
diplomatic agents as defined under the Vienna Convention on Diplomatic Relations and therefore
enjoy diplomatic immunity.4 In turn, respondent filed on March 20, 2001, an Opposition to the said
motion alleging that the Republic of Indonesia has expressly waived its immunity from suit. He based
this claim upon the following provision in the Maintenance Agreement:
"Any legal action arising out of this Maintenance Agreement shall be settled according to the laws of
the Philippines and by the proper court of Makati City, Philippines."
Respondent’s Opposition likewise alleged that Ambassador Soeratmin and Minister Counsellor
Kasim can be sued and held liable in their private capacities for tortious acts done with malice and
bad faith.5
On May 17, 2001, the trial court denied herein petitioners’ Motion to Dismiss. It likewise denied the
Motion for Reconsideration subsequently filed.
The trial court’s denial of the Motion to Dismiss was brought up to the Court of Appeals by herein
petitioners in a petition for certiorari and prohibition. Said petition, docketed as CA-G.R. SP No.
66894, alleged that the trial court gravely abused its discretion in ruling that the Republic of
Indonesia gave its consent to be sued and voluntarily submitted itself to the laws and jurisdiction of
Philippine courts and that petitioners Ambassador Soeratmin and Minister Counsellor Kasim waived
their immunity from suit.
On May 30, 2002, the Court of Appeals rendered its assailed decision denying the petition for lack of
merit.6 On August 16, 2002, it denied herein petitioners’ motion for reconsideration. 7
Hence, this petition.
In the case at bar, petitioners raise the sole issue of whether or not the Court of Appeals erred in
sustaining the trial court’s decision that petitioners have waived their immunity from suit by using as
its basis the abovementioned provision in the Maintenance Agreement.
The petition is impressed with merit.
International law is founded largely upon the principles of reciprocity, comity, independence, and
equality of States which were adopted as part of the law of our land under Article II, Section 2 of the
1987 Constitution.8 The rule that a State may not be sued without its consent is a necessary
consequence of the principles of independence and equality of States. 9 As enunciated in Sanders v.
Veridiano II,10 the practical justification for the doctrine of sovereign immunity is that there can be no
legal right against the authority that makes the law on which the right depends. In the case of foreign
States, the rule is derived from the principle of the sovereign equality of States, as expressed in the

maxim par in parem non habet imperium. All states are sovereign equals and cannot assert
jurisdiction over one another.11 A contrary attitude would "unduly vex the peace of nations."12
The rules of International Law, however, are neither unyielding nor impervious to change. The
increasing need of sovereign States to enter into purely commercial activities remotely connected
with the discharge of their governmental functions brought about a new concept of sovereign
immunity. This concept, the restrictive theory, holds that the immunity of the sovereign is recognized
only with regard to public acts or acts jure imperii, but not with regard to private acts or acts jure
gestionis.13
In United States v. Ruiz,14 for instance, we held that the conduct of public bidding for the repair of a
wharf at a United States Naval Station is an act jure imperii. On the other hand, we considered as an
act jure gestionis the hiring of a cook in the recreation center catering to American servicemen and
the general public at the John Hay Air Station in Baguio City,15 as well as the bidding for the
operation of barber shops in Clark Air Base in Angeles City.16
Apropos the present case, the mere entering into a contract by a foreign State with a private party
cannot be construed as the ultimate test of whether or not it is an act jure imperii or jure gestionis.
Such act is only the start of the inquiry. Is the foreign State engaged in the regular conduct of a
business? If the foreign State is not engaged regularly in a business or commercial activity, and in
this case it has not been shown to be so engaged, the particular act or transaction must then be
tested by its nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an
act jure imperii.17
Hence, the existence alone of a paragraph in a contract stating that any legal action arising out of
the agreement shall be settled according to the laws of the Philippines and by a specified court of
the Philippines is not necessarily a waiver of sovereign immunity from suit. The aforesaid provision
contains language not necessarily inconsistent with sovereign immunity. On the other hand, such
provision may also be meant to apply where the sovereign party elects to sue in the local courts, or
otherwise waives its immunity by any subsequent act. The applicability of Philippine laws must be
deemed to include Philippine laws in its totality, including the principle recognizing sovereign
immunity. Hence, the proper court may have no proper action, by way of settling the case, except to
dismiss it.
Submission by a foreign state to local jurisdiction must be clear and unequivocal. It must be given
explicitly or by necessary implication. We find no such waiver in this case.
Respondent concedes that the establishment of a diplomatic mission is a sovereign function. On the
other hand, he argues that the actual physical maintenance of the premises of the diplomatic
mission, such as the upkeep of its furnishings and equipment, is no longer a sovereign function of
the State.18
1âwphi1

We disagree. There is no dispute that the establishment of a diplomatic mission is an act jure imperii.
A sovereign State does not merely establish a diplomatic mission and leave it at that; the
establishment of a diplomatic mission encompasses its maintenance and upkeep. Hence, the State
may enter into contracts with private entities to maintain the premises, furnishings and equipment of

the embassy and the living quarters of its agents and officials. It is therefore clear that petitioner
Republic of Indonesia was acting in pursuit of a sovereign activity when it entered into a contract
with respondent for the upkeep or maintenance of the air conditioning units, generator sets, electrical
facilities, water heaters, and water motor pumps of the Indonesian Embassy and the official
residence of the Indonesian ambassador.
The Solicitor General, in his Comment, submits the view that, "the Maintenance Agreement was
entered into by the Republic of Indonesia in the discharge of its governmental functions. In such a
case, it cannot be deemed to have waived its immunity from suit." As to the paragraph in the
agreement relied upon by respondent, the Solicitor General states that it "was not a waiver of their
immunity from suit but a mere stipulation that in the event they do waive their immunity, Philippine
laws shall govern the resolution of any legal action arising out of the agreement and the proper court
in Makati City shall be the agreed venue thereof. 19
On the matter of whether or not petitioners Ambassador Soeratmin and Minister Counsellor Kasim
may be sued herein in their private capacities, Article 31 of the Vienna Convention on Diplomatic
Relations provides:
xxx
1. A diplomatic agent shall enjoy immunity from the criminal jurisidiction of the receiving State. He
shall also enjoy immunity from its civil and administrative jurisdiction, except in the case of:
(a) a real action relating to private immovable property situated in the territory of the
receiving State, unless he holds it on behalf of the sending State for the purposes of the
mission;
(b) an action relating to succession in which the diplomatic agent is involved as executor,
administrator, heir or legatee as a private person and not on behalf of the sending State;
(c) an action relating to any professional or commercial activity exercised by the diplomatic
agent in the receiving State outside his official functions.
xxx
The act of petitioners Ambassador Soeratmin and Minister Counsellor Kasim in terminating the
Maintenance Agreement is not covered by the exceptions provided in the abovementioned provision.
The Solicitor General believes that said act may fall under subparagraph (c) thereof, 20 but said
provision clearly applies only to a situation where the diplomatic agent engages in any professional
or commercial activity outside official functions, which is not the case herein.
WHEREFORE, the petition is hereby GRANTED. The decision and resolution of the Court of
Appeals in CA G.R. SP No. 66894 are REVERSED and SET ASIDE and the complaint in Civil Case
No. 18203 against petitioners is DISMISSED.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 115634

April 27, 2000

FELIPE CALUB and RICARDO VALENCIA, DEPARTMENT of ENVIRONMENT and NATURAL
RESOURCES (DENR), CATBALOGAN, SAMAR, petitioners,
vs.
COURT OF APPEALS, MANUELA T. BABALCON, and CONSTANCIO ABUGANDA, respondents.

QUISUMBING, J.:
For review is the decision1 dated May 27, 1994, of the Court of Appeals in CA-G.R. SP No. 29191,
denying the petition filed by herein petitioners for certiorari, prohibition and mandamus, in order to
annul the Order dated May 27, 1992, by the Regional Trial Court of Catbalogan, Samar. Said Order
had denied petitioners' (a) Motion to Dismiss the replevin case filed by herein private respondents,
as well as (b) petitioners Motion for Reconsideration of the Order of said trial court dated April 24,
1992, granting an application for a Writ of replevin.2
The pertinent facts of the case, borne by the records, are as follows:
On January 28, 1992, the Forest Protection and Law Enforcement Team of the Community
Environment and Natural Resources Office (CENRO) of the DENR apprehended two (2) motor
vehicles, described as follows:
1. Motor Vehicle with Plate No. HAK-733 loaded with one thousand and twenty six (1,026)
board feet of illegally sourced lumber valued at P8,544.75, being driven by one Pio Gabon
and owned by [a certain] Jose Vargas.
2. Motor Vehicle with Plate No. FCN-143 loaded with one thousand two hundred twenty four
and ninety seven (1,224.97) board feet of illegally-sourced lumber valued at P9,187.27,
being driven by one Constancio Abuganda and owned by [a certain] Manuela Babalcon. . . . 3
Constancio Abuganda and Pio Gabon, the drivers of the vehicles, failed to present proper
documents and/or licenses. Thus, the apprehending team seized and impounded the vehicles and
its load of lumber at the DENR-PENR (Department of Environment and Natural ResourcesProvincial Environment and Natural Resources) Office in Catbalogan. 4 Seizure receipts were issued
but the drivers refused to accept the receipts.5 Felipe Calub, Provincial Environment and Natural
Resources Officer, then filed before the Provincial Prosecutor's Office in Samar, a criminal complaint
against Abuganda, in Criminal Case No. 3795, for violation of Section 68 [78], Presidential Decree
705 as amended by Executive Order 277, otherwise known as the Revised Forestry Code. 6

On January 31, 1992, the impounded vehicles were forcibly taken by Gabon and Abuganda from the
custody of the DENR, prompting DENR Officer Calub this time to file a criminal complaint for grave
coercion against Gabon and Abuganda. The complaint was, however, dismissed by the Public
Prosecutor.7
On February 11, 1992, one of the two vehicles, with plate number FCN 143, was again apprehended
by a composite team of DENR-CENR in Catbalogan and Philippine Army elements of the 802nd
Infantry Brigade at Barangay Buray, Paranas, Samar. It was again loaded with forest products with
an equivalent volume of 1,005.47 board feet, valued at P10,054.70. Calub duly filed a criminal
complaint against Constancio Abuganda, a certain Abegonia, and several John Does, in Criminal
Case No. 3625, for violation of Section 68 [78], Presidential Decree 705 as amended by Executive
Order 277, otherwise known as the Revised Forestry Code. 8
In Criminal Cases Nos. 3795 and 3625, however, Abegonia and Abuganda were acquitted on the
ground of reasonable doubt. But note the trial court ordered that a copy of the decision be furnished
the Secretary of Justice, in order that the necessary criminal action may be filed against Noe
Pagarao and all other persons responsible for violation of the Revised Forestry Code. For it
appeared that it was Pagarao who chartered the subject vehicle and ordered that cut timber be
loaded on it.9
Subsequently, herein private respondents Manuela Babalcon, the vehicle owner, and Constancio
Abuganda, the driver, filed a complaint for the recovery of possession of the two (2) impounded
vehicles with an application for replevin against herein petitioners before the RTC of Catbalogan.
The trial court granted the application for replevin and issued the corresponding writ in an Order
dated April 24, 1992. 10 Petitioners filed a motion to dismiss which was denied by the trial court. 11
Thus, on June 15, 1992, petitioners filed with the Supreme Court the present Petition for Certiorari,
Prohibition and Mandamus with application for Preliminary Injunction and/or a Temporary
Restraining Order. The Court issued a TRO, enjoining respondent RTC judge from conducting
further proceedings in the civil case for replevin; and enjoining private respondents from taking or
attempting to take the motor vehicles and forest products seized from the custody of the petitioners.
The Court further instructed the petitioners to see to it that the motor vehicles and other forest
products seized are kept in a secured place and protected from deterioration, said property being
in custodia legis and subject to the direct order of the Supreme Court. 12 In a Resolution issued on
September 28, 1992, the Court referred said petition to respondent appellate court for appropriate
disposition. 13
On May 27, 1994, the Court of Appeals denied said petition for lack of merit. It ruled that the mere
seizure of a motor vehicle pursuant to the authority granted by Section 68 [78] of P.D. No. 705 as
amended by E.O. No. 277 does not automatically place said conveyance in custodia legis. According
to the appellate court, such authority of the Department Head of the DENR or his duly authorized
representative to order the confiscation and disposition of illegally obtained forest products and the
conveyance used for that purpose is not absolute and unqualified. It is subject to pertinent laws,
regulations, or policies on that matter, added the appellate court. The DENR Administrative Order
No. 59, series of 1990, is one such regulation, the appellate court said. For it prescribes the
guidelines in the confiscation, forfeiture and disposition of conveyances used in the commission of
offenses penalized under Section 68 [78] of P.D. No. 705 as amended by E.O. No. 277. 14
Additionally, respondent Court of Appeals noted that the petitioners failed to observe the procedure
outlined in DENR Administrative Order No. 59, series of 1990. They were unable to submit a report
of the seizure to the DENR Secretary, to give a written notice to the owner of the vehicle, and to
render a report of their findings and recommendations to the Secretary. Moreover, petitioners' failure

to comply with the procedure laid down by DENR Administrative Order No. 59, series of 1990, was
confirmed by the admission of petitioners' counsel that no confiscation order has been issued prior to
the seizure of the vehicle and the filing of the replevin suit. Therefore, in failing to follow such
procedure, according to the appellate court, the subject vehicles could not be considered in custodia
legis. 15
Respondent Court of Appeals also found no merit in petitioners' claim that private respondents'
complaint for replevin is a suit against the State. Accordingly, petitioners could not shield themselves
under the principle of state immunity as the property sought to be recovered in the instant suit had
not yet been lawfully adjudged forfeited in favor of the government. Moreover, according to
respondent appellate court, there could be no pecuniary liability nor loss of property that could ensue
against the government. It reasoned that a suit against a public officer who acted illegally or beyond
the scope of his authority could not be considered a suit against the State; and that a public officer
might be sued for illegally seizing or withholding the possession of the property of another. 16
Respondent court brushed aside other grounds raised by petitioners based on the claim that the
subject vehicles were validly seized and held in custody because they were contradicted by its own
findings. 17 Their petition was found without merit. 18
Now, before us, the petitioners assign the following errors:

19

(1) THE COURT OF APPEALS ERRED IN HOLDING THAT MERE SEIZURE OF A
CONVEYANCE PURSUANT TO SECTION 68-A [78-A] OF P.D. NO. 705 AS AMENDED BY
EXECUTIVE ORDER 277 DOES NOT PLACE SAID CONVEYANCE IN CUSTODIA LEGIS;
(2) THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE OPERATIVE ACT
GIVING RISE FOR THE SUBJECT CONVEYANCE TO BE IN CUSTODIA LEGIS IS ITS
LAWFUL SEIZURE BY THE DENR PURSUANT TO SECTION 68-A [78-A] OF P.D. NO. 705,
AS AMENDED BY E.O. NO. 277; AND
(3) THE COURT OF APPEALS ERRED IN HOLDING THAT THE COMPLAINT FOR
REPLEVIN AGAINST THE PETITIONERS IS NOT A SUIT AGAINST THE STATE.
In brief, the pertinent issues for our consideration are:
(1) Whether or not the DENR-seized motor vehicle, with plate number FCN 143, is
in custodia legis.
(2) Whether or not the complaint for the recovery of possession of impounded vehicles, with
an application for replevin, is a suit against the State.
We will now resolve both issues.
The Revised Forestry Code authorizes the DENR to seize all conveyances used in the commission
of an offense in violation of Section 78. Section 78 states:
Sec. 78. Cutting, Gathering, and/or Collecting Timber, or Other Forest Products without
License. — Any person who shall cut, gather, collect, remove timber or other forest products
from any forestland, or timber from alienable or disposable public land, or from private land,
without any authority, or possess timber or other forest products without the legal documents

as required under existing forest laws and regulations, shall be punished with the penalties
imposed under Articles 309 and 310 of the Revised Penal Code. . .
The Court shall further order the confiscation in favor of the government of the timber or any
forest products cut, gathered, collected, removed, or possessed, as well as the machinery,
equipment, implements and tools illegally used in the area where the timber or forest
products are found.
This provision makes mere possession of timber or other forest products without the accompanying
legal documents unlawful and punishable with the penalties imposed for the crime of theft, as
prescribed in Articles 309-310 of the Revised Penal Code. In the present case, the subject vehicles
were loaded with forest products at the time of the seizure. But admittedly no permit evidencing
authority to possess and transport said load of forest products was duly presented. These products,
in turn, were deemed illegally sourced. Thus there was a prima facie violation of Section 68 [78] of
the Revised Forestry Code, although as found by the trial court, the persons responsible for said
violation were not the ones charged by the public prosecutor.
The corresponding authority of the DENR to seize all conveyances used in the commission of an
offense in violation of Section 78 of the Revised Forestry Code is pursuant to Sections 78-A and 89
of the same Code. They read as follows:
Sec. 78-A. Administrative Authority of the Department Head or His Duly Authorized
Representative to Order Confiscation. — In all cases of violation of this Code or other forest
laws, rules and regulations, the Department Head or his duly authorized representative, may
order the confiscation of any forest products illegally cut, gathered, removed, or possessed
or abandoned, and all conveyances used either by land, water or air in the commission of
the offense and to dispose of the same in accordance with pertinent laws, regulations or
policies on the matter.
Sec. 89. Arrest; Institution of criminal actions. — A forest officer or employee of the Bureau
[Department] or any personnel of the Philippine Constabulary/Philippine National Police shall
arrest even without warrant any person who has committed or is committing in his presence
any of the offenses defined in this Chapter. He shall also seize and confiscate, in favor of the
Government, the tools and equipment used in committing the offense. . . [Emphasis
supplied.]
Note that DENR Administrative Order No. 59, series of 1990, implements Sections 78-A and 89 of
the Forestry Code, as follows:
Sec. 2. Conveyances Subject to Confiscation and Forfeiture. — All conveyances used in the
transport of any forest product obtained or gathered illegally whether or not covered with
transport documents, found spurious or irregular in accordance with Sec. 68-A [78-A] of P.D.
No. 705, shall be confiscated in favor of the government or disposed of in accordance with
pertinent laws, regulations or policies on the matter.
Sec. 4. Who are Authorized to Seize Conveyance. — The Secretary or his duly authorized
representative such as the forest officers and/or natural resources officers, or deputized
officers of the DENR areauthorized to seize said conveyances subject to policies and
guidelines pertinent thereto. Deputized military personnel and officials of other agencies
apprehending illegal logs and other forest products and their conveyances shall notify the
nearest DENR field offices, and turn oversaid forest products and conveyances for proper
action and disposition. In case where the apprehension is made by DENR field officer, the

conveyance shall be deposited with the nearest CENRO/PENRO/RED Office as the case
may be, for safekeeping wherever it is most convenient and secured. [Emphasis supplied.]
Upon apprehension of the illegally-cut timber while being transported without pertinent documents
that could evidence title to or right to possession of said timber, a warrantless seizure of the involved
vehicles and their load was allowed under Section 78 and 89 of the Revised Forestry Code.
Note further that petitioners' failure to observe the procedure outlined in DENR Administrative Order
No. 59, series of 1990 was justifiably explained. Petitioners did not submit a report of the seizure to
the Secretary nor give a written notice to the owner of the vehicle because on the 3rd day following
the seizure, Gabon and Abuganda, drivers of the seized vehicles, forcibly took the impounded
vehicles from the custody of the DENR. Then again, when one of the motor vehicles was
apprehended and impounded for the second time, the petitioners, again were not able to report the
seizure to the DENR Secretary nor give a written notice to the owner of the vehicle because private
respondents immediately went to court and applied for a writ of replevin. The seizure of the vehicles
and their load was done upon their apprehension for a violation of the Revised Forestry Code. It
would be absurd to require a confiscation order or notice and hearing before said seizure could be
effected under the circumstances.
Since there was a violation of the Revised Forestry Code and the seizure was in accordance with
law, in our view the subject vehicles were validly deemed in custodia legis. It could not be subject to
an action for replevin. For it is property lawfully taken by virtue of legal process and considered in the
custody of the law, and not otherwise. 20
In Mamanteo, et. al. v. Deputy Sheriff Magumun, A.M. No. P-98-1264, promulgated on July 28, 1999,
the case involves property to be seized by a Deputy Sheriff in a replevin suit. But said property were
already impounded by the DENR due to violation of forestry laws and, in fact, already forfeited in
favor of the government by order of the DENR. We said that such property was deemed in custodia
legis. The sheriff could not insist on seizing the property already subject of a prior warrant of seizure.
The appropriate action should be for the sheriff to inform the trial court of the situation by way of
partial Sheriff's Return, and wait for the judge's instructions on the proper procedure to be observed.
Note that property that is validly deposited in custodia legis cannot be the subject of a replevin suit.
In Mamanteo v. Deputy Sheriff Magumun, we elucidated further:
. . . the writ of replevin has been repeatedly used by unscrupulous plaintiffs to retrieve their
chattel earlier taken for violation of the Tariff and Customs Code, tax assessment,
attachment or execution. Officers of the court, from the presiding judge to the sheriff, are
implored to be vigilant in their execution of the law otherwise, as in this case, valid seizure
and forfeiture proceedings could easily be undermined by the simple devise of a writ of
replevin. . . 21
On the second issue, is the complaint for the recovery of possession of the two impounded vehicles,
with an application for replevin, a suit against the State?
Well established is the doctrine that the State may not be sued without its consent. 22 And a suit
against a public officer for his official acts is, in effect, a suit against the State if its purpose is to hold
the State ultimately liable. 23However, the protection afforded to public officers by this doctrine
generally applies only to activities within the scope of their authority in good faith and without
willfulness, malice or corruption. 24 In the present case, the acts for which the petitioners are being
called to account were performed by them in the discharge of their official duties. The acts in
question are clearly official in nature. 25 In implementing and enforcing Sections 78-A and 89 of the

Forestry Code through the seizure carried out, petitioners were performing their duties and functions
as officers of the DENR, and did so within the limits of their authority. There was no malice nor bad
faith on their part. Hence, a suit against the petitioners who represent the DENR is a suit against the
State. It cannot prosper without the State's consent.
Given the circumstances in this case, we need not pursue the Office of the Solicitor General's line for
the defense of petitioners concerning exhaustion of administrative remedies. We ought only to recall
that exhaustion must be raised at the earliest time possible, even before filing the answer to the
complaint or pleading asserting a claim, by a motion to dismiss. 26 If not invoked at the proper time,
this ground for dismissal could be deemed waived and the court could take cognizance of the case
and try it. 27
ACCORDINGLY, the Petition is GRANTED, and the assailed Decision of the Court of Appeals in CAG.R. SP No. 29191 is SET ASIDE. Consequently, the Order issued by the Regional Trial Court of
Catbalogan, dated May 27, 1992, and the Writ of replevin issued in the Order dated April 24, 1992,
are ANNULLED. The Sheriff of the Regional Trial Court of Catbalogan, Branch 29, is directed to take
possession of the subject motor vehicle, with plate number FCN 143, for delivery to the custody of
and appropriate disposition by petitioners. Let a copy of this decision be provided the Honorable
Secretary of Justice for his appropriate action, against any and all persons responsible for the
abovecited violation of the Revised Forestry Code.
1âwphi1

Costs against private respondents.

1âwphi1.nêt

SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 102667

February 23, 2000

AMADO J. LANSANG, petitioner,
vs.
COURT OF APPEALS, GENERAL ASSEMBLY OF THE BLIND, INC., and JOSE
IGLESIAS, respondents.
QUISUMBING, J.:
Before us is a petition to review the decision of the Court of Appeals in C.A. G.R. CV No. 27244,
which set aside the ruling of the Regional Trial Court, Manila, Branch 8, in Civil Case No. 88-43887,
and ordered petitioner Amado J. Lansang to pay private respondent Jose Iglesias P50,000.00 in
moral damages, P10,000.00 in exemplary damages and P5,000.00 in attorney's fees.
Like public streets, public parks are beyond the commerce of man. However, private respondents
were allegedly awarded a "verbal contract of lease" in 1970 by the National Parks Development

Committee (NPDC), a government initiated civic body engaged in the development of national parks,
including Rizal Park,1 but actually administered by high profile civic leaders and journalists. Whoever
in NPDC gave such "verbal" accommodation to private respondents was unclear, for indeed no
document or instrument appears on record to show the grantor of the verbal license to private
respondents to occupy a portion of the government park dedicated to the national hero's memory.
Private respondents were allegedly given office and library space as well as kiosks area selling food
and drinks. One such kiosk was located along T.M. Kalaw St., in front of the Army and Navy Club.
Private respondent General Assembly of the Blind, Inc. (GABI) was to remit to NPDC, 40 percent of
the profits derived from operating the kiosks,2 without again anything shown in the record who
received the share of the profits or how they were used or spent.
With the change of government after the EDSA Revolution, the new Chairman of the NPDC, herein
petitioner, sought to clean up Rizal Park. In a written notice dated February 23, 1988 and received
by private respondents on February 29, 1988, petitioner terminated the so-called verbal agreement
with GABI and demanded that the latter vacate the premises and the kiosks it ran privately within the
public park.3 In another notice dated March 5, 1988, respondents were given until March 8, 1988 to
vacate.4
The latter notice was signed by private respondent Iglesias, GABI president, allegedly to indicate his
conformity to its contents. However, Iglesias, who is totally blind, claims that he was deceived into
signing the notice. He was allegedly told by Ricardo Villanueva, then chief warden of Rizal Park, that
he was merely acknowledging receipt of the notice. Although blind, Iglesias as president was
knowledgeable enough to run GABI as well as its business.
On the day of the supposed eviction, GABI filed an action for damages and injunction in the
Regional Trial Court against petitioner, Villanueva, and "all persons acting on their behalf". 5 The trial
court issued a temporary restraining order on the same day.6
The TRO expired on March 28, 1988. The following day, GABI was finally evicted by NPDC.
GABI's action for damages and injunction was subsequently dismissed by the RTC, ruling that the
complaint was actually directed against the State which could not be sued without its consent.
Moreover, the trial court ruled that GABI could not claim damages under the alleged oral lease
agreement since GABI was a mere accommodation concessionaire. As such, it could only recover
damages upon proof of the profits it could realize from the conclusion. The trial court noted that no
such proof was presented.
1âwphi1.nêt

On appeal, the Court of Appeals reversed the decision of the trial court.
The Court of Appeals ruled that the mere allegation that a government official is being sued in his
official capacity is not enough to protect such official from liability for acts done without or in excess
of his authority.7 Granting that petitioner had the authority to evict GABI from Rizal Park, "the abusive
and capricious manner in which that authority was exercised amounted to a legal wrong for which he
must now be held liable for damages"8 according to the Court of Appeals.

The Court of Appeals noted that, as the trial court observed, the eviction of GABI came at the heels
of two significant incidents. First, after private respondent Iglesias extended monetary support to
striking workers of the NPDC, and second, after Iglesias sent the Tanodbayan, a letter on November
26, 1987, denouncing alleged graft and corruption in the NPDC.9 These, according to the Court of
Appeals, should not have been taken against GABI, which had been occupying Rizal Park for nearly
20 years. GABI was evicted purportedly for violating its verbal agreement with NPDC. 10 However, the
Court of Appeals pointed out that NPDC failed to present proof of such violation. 11
The Court of Appeals found petitioner liable for damages under Articles 19, 21, and 24 of the Civil
Code.12
The Court of Appeals absolved from liability all other persons impleaded in GABI's complaint since it
appeared that they were merely acting under the orders of petitioner. The new officers of NPDC,
additionally impleaded by GABI, were likewise absolved from liability, absent any showing that they
participated in the acts complained of. Petitioner was ordered to pay private respondent Iglesias
moral and exemplary damages and attorney's fees.
Hence, this petition, in which petitioner raises the following issues:
I. WHETHER OR NOT RESPONDENT COURT ERRED IN NOT HOLDING THAT PRIVATE
RESPONDENTS' COMPLAINT AGAINST PETITIONER, AS CHAIRMAN OF NPDC, AND
HIS CO-DEFENDANTS IN CIVIL CASE NO. 88-43887, IS IN EFFECT A SUIT AGAINST
THE STATE WHICH CANNOT BE SUED WITHOUT ITS CONSENT.
II. WHETHER OR NOT RESPONDENT COURT ERRED IN NOT HOLDING THAT
PETITIONER'S ACT OF TERMINATING RESPONDENT GABI'S CONCESSION IS VALID
AND DONE IN THE LAWFUL PERFORMANCE OF OFFICIAL DUTY.13
Petitioner insists that the complaint filed against him is in reality a complaint against the State, which
could not prosper without the latter's consent. He anchors his argument on the fact that NPDC is a
government agency, and that when he ordered the eviction of GABI, he was acting in his capacity as
chairman of NPDC. Petitioner avers that the mere allegation that he was being sued in his personal
capacity did not remove the case from the coverage of the law of public officers and the doctrine of
state immunity.
Petitioner points out that Iglesias signed the notice of eviction to indicate his conformity thereto. He
contends that as evidence of private respondents' bad faith, they sued petitioner instead of
complying with their undertaking to vacate their library and kiosk at Rizal Park.
Petitioner adds that during the actual eviction, no untoward incident occurred. GABI's properties
were properly inventoried and stored.
According to petitioner, the Court of Appeals' observation that the eviction was prompted by Iglesias'
support for striking NPDC workers and the letter-complaint sent to the Tanodbayan is merely
conjectural.

Finally, petitioner avers that the move to evict GABI and award the spaces it occupied to another
group was an executive policy decision within the discretion of NPDC. GABI's possession of the
kiosks as concessionaire was by mere tolerance of NPDC and, thus, such possession may be
withdrawn at any time, with or without cause.
On the other hand, private respondents aver that petitioner acted beyond the scope of his authority
when he showed malice and bad faith in ordering GABI's ejectment from Rizal Park. Quoting from
the decision of the Court of Appeals, private respondents argue that petitioner is liable for damages
for performing acts "to injure an individual rather than to discharge a public duty." 14
While private respondents recognize the authority of petitioner to terminate the agreement with GABI
"if [the contract] is prejudicial to the interest of the NPDC," 15 they maintain that petitioner's personal
interest, and not that of the NPDC, was the root cause of GABI's ejecment.
The doctrine of state immunity from suit applies to complaints filed against public officials for acts
done in the performance of their duties. The rule is that the suit must be regarded as one against the
state where satisfaction of the judgment against the public official concerned will require the state
itself to perform a positive act, such as appropriation of the amount necessary to pay the damages
awarded to the plaintiff.16
The rule does not apply where the public official is charged in his official capacity for acts that are
unlawful and injurious to the rights of others.17 Public officials are not exempt, in their personal
capacity, from liability arising from acts committed in bad faith.18
Neither does it apply where the public official is clearly being sued not in his official capacity but in
his personal capacity, although the acts complained of may have been committed while he occupied
a public position.
We are convinced that petitioner is being sued not in his capacity as NPDC chairman but in his
personal capacity. The complaint filed by private respondents in the RTC merely identified petitioner
as chairman of the NPDC, but did not categorically state that he is being sued in that capacity.19 Also,
it is evident from paragraph 4 of said complaint that petitioner was sued allegedly for having
personal motives in ordering the ejectment of GABI from Rizal Park.
4. Defendant AMADO J. LANSANG, JR., the Chairman of the National Parks Development
Committee,acting under the spirit of revenge, ill-will, evil motive and personal resentment
against plaintiff JOSE IGLESIAS, served on the plaintiff corporation a letter, dated February
23, 1988 terminating plaintiffs lease agreement with a demand for the plaintiff corporation to
vacate its office premises. . .20 (Emphasis supplied.)
The parties do not dispute that it was petitioner who ordered the ejectment of GABI from their office
and kiosk at Rizal Park. There is also no dispute that petitioner, as chairman of the NPDC which was
the agency tasked to administer Rizal Park, had the authority to terminate the agreement with
GABI21 and order the organization's ejectment. The question now is whether or not petitioner abused
his authority in ordering the ejectment of private respondents.

We find, however, no evidence of such abuse of authority on record. As earlier stated, Rizal Park is
beyond the commerce of man and, thus, could not be the subject of a lease contract. Admittedly,
there was no written contract. That private respondents were allowed to occupy office and kiosk
spaces in the park was only a matter of accommodation by the previous administrator. This being so,
also admittedly, petitioner may validly discontinue the accommodation extended to private
respondents, who may be ejected from the park when necessary. Private respondents cannot and
does not claim a vested right to continue to occupy Rizal Park.
The Court of Appeals awarded private respondent Iglesias moral and exemplary damages and
attorney's fees. However, we find no evidence on record to support Iglesias' claim that he suffered
moral injury as a result of GABI's ejectment from Rizal Park. Absent any satisfactory proof upon
which the Court may base the amount of damages suffered, the award of moral damages cannot be
sustained.22
Neither can we sustain the award of exemplary damages, which may only be awarded in addition to
moral, temperate, liquidated, or compensatory damages. 23 We also disallow the award for attorney's
fees, which can only be recovered per stipulation of the parties, which is absent in this case. There is
no showing that any of the exceptions justifying the award of attorney's fees absent a stipulation is
present in this case.24
WHEREFORE, the instant petition is GRANTED. The decision of the Court of Appeals in CA-G.R.
CV No. 27244 is hereby SET ASIDE, and the DISMISSAL of the complaint for damages by the trial
court for want of merit is AFFIRMED. No costs.
SO ORDERED.

1âwphi1.nêt

Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 107271

September 10, 2003

CITY OF CALOOCAN and NORMA M. ABRACIA, petitioners,
vs.
HON. MAURO T. ALLARDE, Presiding Judge of Branch 123, RTC of Caloocan City, ALBERTO
A. CASTILLO, Deputy Sheriff of Branch 123, RTC of Caloocan City, and DELFINA
HERNANDEZ SANTIAGO and PHILIPPINE NATIONAL BANK (PNB), respondents.
CORONA, J.:

Assailed in this petition for certiorari is the decision1 dated August 31, 1992, of the Court of Appeals
in CA G.R. SP No. 27423, ordering the Regional Trial Court of Caloocan City, Branch 123, to
implement an alias writ of execution dated January 16, 1992. The dispositive portion read as follows:
WHEREFORE the petition is hereby granted ordering the Regional Trial Court of Kaloocan
City, Branch 123, to immediately effect the alias writ of execution dated January 16, 1992
without further delay.
Counsel for the respondents are warned that a repetition of their contemptuous act to delay
the execution of a final and executory judgment will be dealt with more severely.
SO ORDERED.2
It is important to state at the outset that the dispute between petitioner and private respondent has
been litigated thrice before this Court: first, in G.R. No. L-39288-89, entitled Heirs of Abelardo
Palomique, et al. vs. Marcial Samson, et al., decided on January 31, 1985; second, in G.R. No.
98366, entitled City Government of Caloocan vs. Court of Appeals, et al., resolved on May 16, 1991,
and third, in G.R. No. 102625, entitled Santiago vs. Sto. Tomas, et al., decided on August 1, 1995.
This is not to mention the numerous concurrent efforts by the City Government of Caloocan to seek
relief from other judicial and quasi-judicial bodies. The present petition for certiorari is the fourth time
we are called upon to resolve the dispute.
The factual and procedural antecedents follow.
Sometime in 1972, Marcial Samson, City Mayor of Caloocan City, through Ordinance No. 1749,
abolished the position of Assistant City Administrator and 17 other positions from the plantilla of the
local government of Caloocan. Then Assistant City Administrator Delfina Hernandez Santiago and
the 17 affected employees of the City Government assailed the legality of the abolition before the
then Court of First Instance (CFI) of Caloocan City, Branch 33.
In 1973, the CFI declared the abolition illegal and ordered the reinstatement of all the dismissed
employees and the payment of their back salaries and other emoluments. The City Government of
Caloocan appealed to the Court of Appeals. Respondent Santiago and her co-parties moved for the
dismissal of the appeal for being dilatory and frivolous but the appellate court denied their motion.
Thus, they elevated the case on certiorari before this Court, docketed as G.R. No. L-39288-89, Heirs
of Abelardo Palomique, et al. vs. Marcial Samson, et al. In our Resolution dated January 31, 1985,
we held that the appellate court "erred in not dismissing the appeal," and "that the appeal of the City
Government of Caloocan was frivolous and dilatory." In due time, the resolution lapsed into finality
and entry of judgment was made on February 27, 1985.
In 1986, the City Government of Caloocan paid respondent Santiago P75,083.37 in partial payment
of her backwages, thereby leaving a balance of P530,761.91. Her co-parties were paid in full.3 In
1987, the City of Caloocan appropriated funds for her unpaid back salaries. This was included in
Supplemental Budget No. 3 for the fiscal year 1987. Surprisingly, however, the City later refused to
release the money to respondent Santiago.
Respondent Santiago exerted effort for the execution of the remainder of the money judgment but
she met stiff opposition from the City Government of Caloocan. On February 12, 1991, Judge Mauro
T. Allarde, RTC of Caloocan City, Branch 123, issued a writ of execution for the payment of the
remainder of respondent Santiago’s back salaries and other emoluments. 4

For the second time, the City Government of Caloocan went up to the Court of Appeals and filed a
petition for certiorari, prohibition and injunction to stop the trial court from enforcing the writ of
execution. The CA dismissed the petition and affirmed the order of issuance of the writ of
execution.5 One of the issues raised and resolved therein was the extent to which back salaries and
emoluments were due to respondent Santiago. The appellate court held that she was entitled to her
salaries from October, 1983 to December, 1986.
And for the second time, the City Government of Caloocan appealed to this Court in G.R. No.
98366, City Government of Caloocan vs. Court of Appeals, et al. The petition was dismissed,
through our Resolution of May 16, 1991, for having been filed late and for failure to show any
reversible error on the part of the Court of Appeals. The resolution subsequently attained finality and
the corresponding entry of judgment was made on July 29, 1991.
On motion of private respondent Santiago, Judge Mauro T. Allarde ordered the issuance of an alias
writ of execution on March 3, 1992. The City Government of Caloocan moved to reconsider the
order, insisting in the main that respondent Santiago was not entitled to backwages from 1983 to
1986. The court a quo denied the motion and forthwith issued the alias writ of execution. Unfazed,
the City Government of Caloocan filed a motion to quash the writ, maintaining that the money
judgment sought to be enforced should not have included salaries and allowances for the years
1983-1986. The trial court likewise denied the motion.
On July 27, 1992, Sheriff Alberto A. Castillo levied and sold at public auction one of the motor
vehicles of the City Government of Caloocan, with plate no. SBH-165, for P100,000. The proceeds
of the sale were turned over to respondent Santiago in partial satisfaction of her claim, thereby
leaving a balance of P439,377.14, inclusive of interest. Petitioners filed a motion questioning the
validity of the auction sale of the vehicle with plate no. SBH-165, and a supplemental motion
maintaining that the properties of the municipality were exempt from execution. In his Order dated
October 1, 1992, Judge Allarde denied both motions and directed the sheriff to levy and schedule at
public auction three more vehicles of the City of Caloocan -6</p>
ONE (1) Unit Motor Vehicle (Hunter Station Wagon); Motor No. C-240-199629; Chassis No.
MBB-910369C;
ONE (1) Unit Motor Vehicle (Hunter Series 11-Diesel); Engine No. 4FB1-174328, Chassis
No. MBB-910345C; Plate No. SDL-653;
ONE (1) Unit Motor Vehicle (Hunter Series 11-Diesel); Engine No. 4FB-165196; Chassis No.
MBB 910349C.
All the vehicles, including that previously sold in the auction sale, were owned by the City and
assigned for the use of herein petitioner Norma Abracia, Division Superintendent of Caloocan City,
and other officials of the Division of City Schools.
Meanwhile, the City Government of Caloocan sought clarification from the Civil Service Commission
(CSC) on whether respondent Santiago was considered to have rendered services from 1983-1986
as to be entitled to backwages for that period. In its Resolution No. 91-1124, the CSC ruled in the
negative.
On November 22, 1991, private respondent Santiago challenged the CSC resolution before this
Court in G.R. No. 102625, Santiago vs. Sto. Tomas, et al. On July 8, 1993, we initially dismissed the
petition for lack of merit; however, we reconsidered the dismissal of the petition in our Resolution
dated August 1, 1995, this time ruling in favor of respondent Santiago:

The issue of petitioner Santiago’s right to back salaries for the period from October 1983 to
December 1986 having been resolved in G.R. No. 98366 on 16 May 1991, CSC Resolution
No. 91-1124 promulgated later on 24 September 1991 – in particular, its ruling on the extent
of backwages due petitioner Santiago – was in fact moot and academic at the time of its
promulgation. CSC Resolution No. 91-1124 could not, of course, set aside what had been
judicially decided with finality x x x x the court considers that resort by the City Government
of Caloocan to respondent CSC was but another attempt to deprive petitioner Santiago of
her claim to back salaries x x x and a continuation of the City’s abuse and misuse of the
rules of judicial procedure. The City’s acts have resulted in wasting the precious time and
resources of the courts and respondent CSC. (Underscoring supplied).
On October 5, 1992, the City Council of Caloocan passed Ordinance No. 0134, Series of 1992,
which included the amount of P439,377.14 claimed by respondent Santiago as back salaries, plus
interest.7 Pursuant to the subject ordinance, Judge Allarde issued an order dated November 10,
1992, decreeing that:
WHEREFORE, the City Treasurer (of Caloocan), Norberto Azarcon is hereby ordered to
deliver to this Court within five (5) days from receipt hereof, (a) manager’s check covering
the amount of P439,378.00 representing the back salaries of petitioner Delfina H. Santiago
in accordance with Ordinance No. 0134 S. 1992 and pursuant to the final and executory
decision in these cases.
Then Caloocan Mayor Macario A. Asistio, Jr., however, refused to sign the check intended as
payment for respondent Santiago’s claims. This, despite the fact that he was one of the
signatories of the ordinance authorizing such payment. On April 29, 1993, Judge Allarde
issued another order directing the Acting City Mayor of Caloocan, Reynaldo O. Malonzo, to
sign the check which had been pending before the Office of the Mayor since December 11,
1992. Acting City Mayor Malonzo informed the trial court that "he could not comply with the
order since the subject check was not formally turned over to him by the City Mayor" who
went on official leave of absence on April 15, 1993, and that "he doubted whether he had
authority to sign the same."8
Thus, in an order dated May 7, 1993, Judge Allarde ordered Sheriff Alberto A. Castillo to immediately
garnish the funds of the City Government of Caloocan corresponding to the claim of respondent
Santiago.9 On the same day, Sheriff Alberto A. Castillo served a copy of the Notice of Garnishment
on the Philippine National Bank (PNB), Sangandaan Branch, Caloocan City. When PNB immediately
notified the City of Caloocan of the Notice of Garnishment, the City Treasurer sent a letter-advice
informing PNB that the order of garnishment was "illegal," with a warning that it would hold PNB
liable for any damages which may be caused by the withholding of the funds of the city. PNB opted
to comply with the order of Judge Allarde and released to the Sheriff a manager’s check amounting
to P439,378. After 21 long years, the claim of private respondent Santiago was finally settled in full.
On June 4, 1993, however, while the instant petition was pending, the City Government of Caloocan
filed yet another motion with this Court, a Motion to Declare in Contempt of Court; to Set Aside the
Garnishment and Administrative Complaint against Judge Allarde, respondent Santiago and PNB.
Subsequently, the City Government of Caloocan filed a Supplemental Petition formally impleading
PNB as a party-respondent in this case.
The instant petition for certiorari is directed this time against the validity of the garnishment of the
funds of the City of Caloocan, as well as the validity of the levy and sale of the motor vehicles
belonging to the City of Caloocan. More specifically, petitioners insist that Judge Allarde gravely
abused his discretion in:

(a) ordering the garnishment of the funds of the City of Caloocan deposited with the PNB,
since it is settled that public funds are beyond the reach of garnishment and even with the
appropriation passed by the City Council, the authority of the Mayor is still needed for the
release of the appropriation;
(b) ordering the levy and sale at public auction of three (3) motor vehicles owned by the City
of Caloocan, which vehicles are necessary for public use and cannot be attached nor sold in
an execution sale to satisfy a money judgment against the City of Caloocan;
(c) peremptorily denying petitioner City of Caloocan’s urgent motions to vacate and set aside
the auction sale of the motor vehicle with PLATE NO. SBH-165, notwithstanding that the
auction sale by the Sheriff was tainted with serious irregularities, more particularly:
i. non-compliance with the mandatory posting of the notice of sale;
ii. non-observance of the procedure that a sale through public auction has to be
made and consummated at the time of the auction, at the designated place and upon
actual payment of the purchase price by the winning bidder;
iii. violation of Sec. 21, Rule 39 of the Rules of Court to the effect that sale of
personal property capable of manual delivery ‘must be sold within the view of those
attending the sale;’ and,
iv. the Sheriff’s Certificate of Sale contained false narration of facts respecting the
actual time of the public auction;
(d) the enforcement of the levy made by the Sheriff covering the three (3) motor vehicles
based on an alias writ that has long expired.
The petition has absolutely no merit. The trial court committed no grave abuse of discretion
in implementing the alias writ of execution to settle the claim of respondent Santiago, the
satisfaction of which petitioner had been maliciously evading for 21 years.
Petitioner argues that the garnishment of its funds in PNB was invalid inasmuch as these
were public funds and thus exempt from execution. Garnishment is considered a specie of
attachment by means of which the plaintiff seeks to subject to his claim property of the
defendant in the hands of a third person, or money owed by such third person or garnishee
to the defendant.10
The rule is and has always been that all government funds deposited in the PNB or any other official
depositary of the Philippine Government by any of its agencies or instrumentalities, whether by
general or special deposit, remain government funds and may not be subject to garnishment or levy,
in the absence of a corresponding appropriation as required by law: 11
Even though the rule as to immunity of a state from suit is relaxed, the power of the courts
ends when the judgment is rendered. Although the liability of the state has been judicially
ascertained, the state is at liberty to determine for itself whether to pay the judgment or not,
and execution cannot issue on a judgment against the state. Such statutes do not authorize
a seizure of state property to satisfy judgments recovered, and only convey an implication
that the legislature will recognize such judgment as final and make provision for the
satisfaction thereof.12

The rule is based on obvious considerations of public policy. The functions and public services
rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public
funds from their legitimate and specific objects, as appropriated by law.13
However, the rule is not absolute and admits of a well-defined exception, that is, when there is a
corresponding appropriation as required by law. Otherwise stated, the rule on the immunity of public
funds from seizure or garnishment does not apply where the funds sought to be levied under
execution are already allocated by law specifically for the satisfaction of the money judgment against
the government. In such a case, the monetary judgment may be legally enforced by judicial
processes.
Thus, in the similar case of Pasay City Government, et al. vs. CFI of Manila, Br. X, et al.,14 where
petitioners challenged the trial court’s order garnishing its funds in payment of the contract price for
the construction of the City Hall, we ruled that, while government funds deposited in the PNB are
exempt from execution or garnishment, this rule does not apply if an ordinance has already been
enacted for the payment of the City’s obligations –
Upon the issuance of the writ of execution, the petitioner-appellants moved for its quashal
alleging among other things the exemption of the government from execution. This move on
the part of petitioner-appellants is at first glance laudable for ‘all government funds deposited
with the Philippine National Bank by any agency or instrumentality of the government,
whether by way of general or special deposit, remain government funds and may not be
subject to garnishment or levy.’ But inasmuch as an ordinance has already been enacted
expressly appropriating the amount of P613,096.00 as payment to the respondent-appellee,
then the herein case is covered by the exception to the general rule x x x x
In the instant case, the City Council of Caloocan already approved and passed Ordinance No. 0134,
Series of 1992, allocating the amount of P439,377.14 for respondent Santiago’s back salaries plus
interest. Thus this case fell squarely within the exception. For all intents and purposes, Ordinance
No. 0134, Series of 1992, was the "corresponding appropriation as required by law." The sum
indicated in the ordinance for Santiago were deemed automatically segregated from the other
budgetary allocations of the City of Caloocan and earmarked solely for the City’s monetary obligation
to her. The judgment of the trial court could then be validly enforced against such funds.
Indeed, this conclusion is further buttressed by the Certification issued on December 23, 1992 by
Norberto C. Azarcon, City Treasurer of Caloocan:
CERTIFICATION
This is to certify that according to the records available in this Office the claim for backwages
of the HON. JUDGE DELFINA H. SANTIAGO has been properly obligated and can be
collected in accordance with existing accounting and auditing rules and regulations.
This is to certify further that in case the claim is not collected within the present fiscal year,
such claim shall be entered in the books of Accounts Payable and can still be collected in the
next fiscal year x x x x (Underscoring supplied)
Petitioners’ reliance on Municipality of Makati vs. Court of Appeals, et al.,15 and Commissioner of
Public Highways vs. San Diego,16 does not help their cause.17 Both cases implicitly affirmed that
public funds may be garnished if there is a statute which appropriated the amount so
garnished. Thus, in Municipality of Makati, citing San Diego, we unequivocally held that:

In this jurisdiction, well-settled is the rule that public funds are not subject to levy and
execution, unless otherwise provided by statute x x x x
Similarly, we cannot agree with petitioner’s argument that the appropriation ordinance of the
City Council did not authorize PNB to release the funds because only the City Mayor could
authorize the release thereof. A valid appropriation of public funds lifts its exemption from
execution. Here, the appropriation passed by the City Council of Caloocan providing for the
payment of backwages to respondent was duly approved and signed by both the council and
then Mayor Macario Asistio, Jr. The mayor’s signature approving the budget ordinance was
his assent to the appropriation of funds for respondent Santiago’s backwages. If he did not
agree with such allocation, he could have vetoed the item pursuant to Section 55 of the
Local Government Code.18 There was no such veto.
In view of the foregoing discourse, we dismiss petitioners’ unfounded assertion, probably made more
out of sheer ignorance of prevailing jurisprudence than a deliberate attempt to mislead us, that the
rule that "public funds (are) beyond the reach of levy and garnishment is not qualified by any
condition."19
We now come to the issue of the legality of the levy on the three motor vehicles belonging to the City
of Caloocan which petitioners claimed to be exempt from execution, and which levy was based on
an alias writ that had purportedly expired. Suffice it to say that Judge Allarde, in his Order dated
November 10, 1992,20 already lifted the levy on the three vehicles, thereby formally discharging them
from the jurisdiction of the court and turning them over to the City Government of Caloocan:
x x x x the levy of the three (3) vehicles made by Sheriff Alberto Castillo pursuant to the
Orders of this Court dated October 1 and 8, 1992 is hereby lifted and the said Sheriff is
hereby ordered to return the same to the City Government in view of the satisfaction of the
decision in these cases x x x x
It is thus unnecessary for us to discuss a moot issue.
We turn to the third issue raised by petitioners that the auction sale by Sheriff Alberto A.
Castillo of the motor vehicle with plate no. SBH-165 was tainted with serious irregularities.
We need not emphasize that the sheriff enjoys the presumption of regularity in the
performance of the functions of his office. This presumption prevails in the absence of
substantial evidence to the contrary and cannot be overcome by bare and self-serving
allegations. The petitioners failed to convince us that the auction sale conducted by the
sheriff indeed suffered from fatal flaws. No evidence was adduced to prove that the sheriff
had been remiss in the performance of his duties during the public auction sale. Indeed it
would be injudicious for us to assume, as petitioners want us to do, that the sheriff failed to
follow the established procedures governing public auctions.
On the contrary, a review of the records shows that the sheriff complied with the rules on
public auction. The sale of the City’s vehicle was made publicly in front of the Caloocan City
Hall on the date fixed in the notice – July 27, 1992. In fact, petitioners in their Motion to
Declare in Contempt of Court; to Set Aside the Garnishment and Administrative Complaint
admitted as much:
On July 27, 1992, by virtue of an alias writ of execution issued by the respondent court, a
vehicle owned by the petitioner xxx was levied and sold at public auction for the amount
of P100,000.00 and which amount was immediately delivered to the private respondent x x x
x21

Hence, petitioners cannot now be heard to impugn the validity of the auction sale.
Petitioners, in desperation, likewise make much of the proceedings before the trial court on October
8, 1992, wherein petitioner Norma Abracia, Superintendent of the Division of City Schools of
Caloocan, was commanded to appear and show cause why she should not be cited in contempt for
delaying the execution of judgment. This was in connection with her failure (or refusal) to surrender
the three motor vehicles assigned to the Division of City Schools to the custody of the sheriff.
Petitioner Abracia, assisted by Mr. Ricardo Nagpacan of the Division of City Schools, appeared
during the hearing but requested a ten-day period within which to refer the matter of contempt to a
counsel of her choice. The request was denied by Judge Allarde in his assailed order dated October
8, 1992. Thus petitioner Abracia claimed, inter alia, that: (a) she was denied due process; (b) the
silence of the order of Judge Allarde on her request for time violated an orderly and faithful recording
of the proceedings, and (c) she was coerced into agreeing to surrender the vehicles.
We do not think so. What violates due process is the absolute lack of opportunity to be heard. That
opportunity, the Court is convinced, was sufficiently accorded to petitioner Abracia. She was notified
of the contempt charge against her; she was effectively assisted by counsel when she appeared
during the hearing on October 8, 1992; and she was afforded ample opportunity to answer and
refute the charge against her. The circumstance that she opted not to avail of her chance to be
heard on that occasion by asking for an extension of time within which to hire a counsel of her
choice, a request denied by the trial court, did not transgress nor deprive her of her right to due
process.
Significantly, during the hearing on October 8, 1992, Mr. Nagpacan manifested in open court that,
after conferring with petitioner Abracia, the latter was "willing to surrender these vehicles into the
custody of the sheriff on the condition that the standing motion (for contempt) be withdrawn."22 Her
decision was made freely and voluntarily, and after conferring with her counsel. Moreover, it was
petitioner Abracia herself who imposed the condition that respondent Santiago should withdraw her
motion for contempt in exchange for her promise to surrender the subject vehicles. Thus, petitioner
Abracia’s claim that she was coerced into surrendering the vehicles had no basis.
Even assuming ex gratia argumenti that there indeed existed certain legal infirmities in connection
with the assailed orders of Judge Allarde, still, considering the totality of circumstances of this case,
the nullification of the contested orders would be way out of line. For 21 long years, starting 1972
when this controversy started up to 1993 when her claim was fully paid out of the garnished funds of
the City of Caloocan, respondent Santiago was cruelly and unjustly deprived of what was due her. It
would be, at the very least, merciless and unchristian to make private respondent refund the City of
Caloocan the amount already paid to her, only to force her to go through the same nightmare all over
again.
At any rate, of paramount importance to us is that justice has been served. No right of the public was
violated and public interest was preserved.
Finally, we cannot simply pass over in silence the deplorable act of the former Mayor of Caloocan
City in refusing to sign the check in payment of the City’s obligation to private respondent. It was an
open defiance of judicial processes, smacking of political arrogance, and a direct violation of the very
ordinance he himself approved. Our Resolution in G.R. No. 98366, City Government of Caloocan vs.
Court of Appeals, et al., dated May 16, 1991, dismissing the petition of the City of Caloocan assailing
the issuance of a writ of execution by the trial court, already resolved with finality all impediments to
the execution of judgment in this case. Yet, the City Government of Caloocan, in a blatant display of
malice and bad faith, refused to comply with the decision. Now, it has the temerity to come to this

Court once more and continue inflicting injustice on a hapless citizen, as if all the harm and prejudice
it has already heaped upon respondent Santiago are still not enough.
This Court will not condone the repudiation of just obligations contracted by municipal corporations.
On the contrary, we will extend our aid and every judicial facility to any citizen in the enforcement of
just and valid claims against abusive local government units.
WHEREFORE, the petition is hereby DISMISSED for utter lack of merit. The assailed orders of the
trial court dated October 1, 1992, October 8, 1992 and May 7, 1993, respectively, are AFFIRMED.
Petitioners and their counsels are hereby warned against filing any more pleadings in connection
with the issues already resolved with finality herein and in related cases.
Costs against petitioners.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 154411

June 19, 2003

NATIONAL HOUSING AUTHORITY, Petitioner,
vs.
HEIRS OF ISIDRO GUIVELONDO, court of appeals, HON. ISAIAS DICDICAN, Presiding Judge,
Regional Trial Court, Branch 11, Cebu City, and PASCUAL Y. ABORDO, Sheriff, Regional Trial
Court, Branch 11, Cebu City, Respondents.
DECISION
YNARES-SANTIAGO, J.:
On February 23, 1999, petitioner National Housing Authority filed with the Regional Trial Court of
Cebu City, Branch 11, an Amended Complaint for eminent domain against Associacion Benevola de
Cebu, Engracia Urot and the Heirs of Isidro Guivelondo, docketed as Civil Case No. CEB-23386.
Petitioner alleged that defendant Associacion Benevola de Cebu was the claimant/owner of Lot 108C located in the Banilad Estate, Cebu City; that defendant Engracia Urot was the claimant/owner of
Lots Nos. 108-F, 108-I, 108-G, 6019-A and 6013-A, all of the Banilad Estate; that defendant Heirs of
Isidro Guivelondo were the claimants/owners of Cadastral Lot No. 1613-D located at Carreta,
Mabolo, Cebu City; and that the lands are within a blighted urban center which petitioner intends to
develop as a socialized housing project.1

On November 12, 1999, the Heirs of Isidro Guivelondo, respondents herein, filed a Manifestation
stating that they were waiving their objections to petitioner’s power to expropriate their properties.
Hence, the trial court issued an Order as follows:
WHEREFORE, the Court hereby declares that the plaintiff has a lawful right to expropriate the
properties of the defendants who are heirs of Isidro Guivelondo.
The appointment of commissioners who would ascertain and report to the Court the just
compensation for said properties will be done as soon as the parties shall have submitted to the
Court the names of persons desired by them to be appointed as such commissioners.
SO ORDERED.2
Thereafter, the trial court appointed three Commissioners to ascertain the correct and just
compensation of the properties of respondents. On April 17, 2000, the Commissioners submitted
their report wherein they recommended that the just compensation of the subject properties be fixed
at P11,200.00 per square meter.3 On August 7, 2000, the trial court rendered Partial Judgment
adopting the recommendation of the Commissioners and fixing the just compensation of the lands of
respondent Heirs of Isidro Guivelondo at P11,200.00 per square meter, to wit:
WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by the Court in this
case fixing the just compensation for the lands of the defendants who are the heirs of Isidro
Guivelondo, more particularly Lots Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 15, 16, 19, 20, 6016-F,
6016-H, 6016-E and 6016-D of Csd-10219, which were sought to be expropriated by the plaintiff at
P11,200.00 per square meter and ordering the plaintiff to pay to the said defendants the just
compensation for the said lands computed at P11,200.00 per square meter.
IT IS SO ORDERED.4
Petitioner NHA filed two motions for reconsideration dated August 30, 2000 and August 31, 2000,
assailing the inclusion of Lots 12, 13 and 19 as well as the amount of just compensation,
respectively. Respondent Heirs also filed a motion for reconsideration of the Partial Judgment. On
October 11, 2000, the trial court issued an Omnibus Order denying the motion for reconsideration of
respondent Heirs and the August 31, 2000 motion of petitioner, on the ground that the fixing of the
just compensation had adequate basis and support. On the other hand, the trial court granted
petitioner’s August 30, 2000 motion for reconsideration on the ground that the Commissioner’s
Report did not include Lots 12, 13 and 19 within its coverage. Thus:
WHEREFORE, in view of the foregoing premises, the Court hereby denies the motion of the heirs of
Isidro Guivelondo (with the exception of Carlota Mercado and Juanita Suemith) for reconsideration
of the partial judgment rendered in this case on August 7, 2000 and plaintiff’s motion for
reconsideration of said judgment, dated August 31, 2000.
However, the Court hereby grants the plaintiff’s motion for reconsideration of said judgment, dated
August 30, 2000. Accordingly, the judgment rendered in this case on August 7, 2000 is hereby set

aside insofar as it has fixed just compensations for Lots Nos. 12, 13 and 19 of Csd-10219 because
the fixing of said just compensations appears to lack adequate basis.
SO ORDERED.5
Petitioner filed with the Court of Appeals a petition for certiorari, which was docketed as CA-G.R. SP
No. 61746.6Meanwhile, on October 31, 2000, the trial court issued an Entry of Judgment over the
Partial Judgment dated August 7, 2000 as modified by the Omnibus Order dated October 11,
2000.7 Subsequently, respondent Heirs filed a Motion for Execution, which was granted on
November 22, 2000.
On January 31, 2001, the Court of Appeals dismissed the petition for certiorari on the ground that the
Partial Judgment and Omnibus Order became final and executory when petitioner failed to appeal
the same.8
Petitioner’s Motion for Reconsideration and Urgent Ex-Parte Motion for a Clarificatory Ruling were
denied in a Resolution dated March 18, 2001.9 A petition for review was filed by petitioner with this
Court, which was docketed as G.R. No. 147527. However, the same was denied in a Minute
Resolution dated May 9, 2001 for failure to show that the Court of Appeals committed a reversible
error.10
Petitioner filed a Motion for Reconsideration which was however denied with finality on August 20,
2001.11
Prior to the aforesaid denial of the Motion for Reconsideration, petitioner, on July 16, 2001, filed with
the trial court a Motion to Dismiss Civil Case No. CEB-23386, complaint for eminent domain, alleging
that the implementation of its socialized housing project was rendered impossible by the
unconscionable value of the land sought to be expropriated, which the intended beneficiaries can not
afford.12 The Motion was denied on September 17, 2001, on the ground that the Partial Judgment
had already become final and executory and there was no just and equitable reason to warrant the
dismissal of the case.13 Petitioner filed a Motion for Reconsideration, which was denied in an Order
dated November 20, 2001.14
Petitioner thus filed a petition for certiorari with the Court of Appeals, which was docketed as CAG.R. SP No. 68670, praying for the annulment of the Order of the trial court denying its Motion to
Dismiss and its Motion for Reconsideration.15
On February 5, 2002, the Court of Appeals summarily dismissed the petition. Immediately thereafter,
respondent Sheriff Pascual Y. Abordo of the Regional Trial Court of Cebu City, Branch 11, served on
petitioner a Notice of Levy pursuant to the Writ of Execution issued by the trial court to enforce the
Partial Judgment of August 7, 2000 and the Omnibus Order of October 11, 2000. 16
On February 18, 2002, the Court of Appeals set aside the dismissal of the petition and reinstated the
same.17Thereafter, a temporary restraining order was issued enjoining respondent sheriff to preserve
the status quo.18

On May 27, 2002, respondent sheriff served on the Landbank of the Philippines a Notice of Third
Garnishment against the deposits, moneys and interests of petitioner therein. 19 Subsequently,
respondent sheriff levied on funds and personal properties of petitioner.20
On July 16, 2002, the Court of Appeals rendered the assailed decision dismissing the petition for
certiorari.21
Hence, petitioner filed this petition for review, raising the following issues:
1) WHETHER OR NOT THE STATE CAN BE COMPELLED AND COERCED BY THE
COURTS TO EXERCISE OR CONTINUE WITH THE EXERCISE OF ITS INHERENT
POWER OF EMINENT DOMAIN;
2) WHETHER OR NOT JUDGMENT HAS BECOME FINAL AND EXECUTORY AND IF
ESTOPPEL OR LACHES APPLIES TO GOVERNMENT;
3) WHETHER OR NOT WRITS OF EXECUTION AND GARNISHMENT MAY BE ISSUED
AGAINST THE STATE IN AN EXPROPRIATION WHEREIN THE EXERCISE OF THE
POWER OF EMINENT DOMAIN WILL NOT SERVE PUBLIC USE OR PURPOSE
{APPLICATION OF SUPREME COURT ADMINISTRATIVE CIRCULAR NO. 10-2000}. 22
Respondent Heirs of Isidro Guivelondo filed their Comment, arguing as follows:
I
AS EARLIER UPHELD BY THE HONORABLE COURT, THE JUDGMENT OF THE TRIAL
COURT IS ALREADY FINAL AND EXECUTORY, HENCE, COULD NO LONGER BE
DISTURBED NOR SET ASIDE
II
THE FUNDS AND ASSETS OF THE PETITIONER ARE NOT EXEMPT FROM LEVY AND
GARNISHMENT
III
THE ISSUES RAISED IN THIS SECOND PETITION FOR REVIEW WERE ALREADY
RESOLVED BY THE HONORABLE COURT23
In the early case of City of Manila v. Ruymann,24 the Court was confronted with the question: May the
petitioner, in an action for expropriation, after he has been placed in possession of the property and
before the termination of the action, dismiss the petition? It resolved the issue in the affirmative and
held:
The right of the plaintiff to dismiss an action with the consent of the court is universally recognized
with certain well-defined exceptions. If the plaintiff discovers that the action which he commenced

was brought for the purpose of enforcing a right or a benefit, the advisability or necessity of which he
later discovers no longer exists, or that the result of the action would be different from what he had
intended, then he should be permitted to withdraw his action, subject to the approval of the court.
The plaintiff should not be required to continue the action, subject to some well-defined exceptions,
when it is not to his advantage to do so. Litigation should be discouraged and not encouraged.
Courts should not require parties to litigate when they no longer desire to do so. Courts, in granting
permission to dismiss an action, of course, should always take into consideration the effect which
said dismissal would have upon the rights of the defendant.25
Subsequently, in Metropolitan Water District v. De Los Angeles,26 the Court had occasion to apply the
above-quoted ruling when the petitioner, during the pendency of the expropriation case, resolved
that the land sought to be condemned was no longer necessary in the maintenance and operation of
its system of waterworks. It was held:
It is not denied that the purpose of the plaintiff was to acquire the land in question for a public use.
The fundamental basis then of all actions brought for the expropriation of lands, under the power of
eminent domain, is public use. That being true, the very moment that it appears at any stage of the
proceedings that the expropriation is not for a public use, the action must necessarily fail and should
be dismissed, for the reason that the action cannot be maintained at all except when the
expropriation is for some public use. That must be true even during the pendency of the appeal of at
any other stage of the proceedings. If, for example, during the trial in the lower court, it should be
made to appear to the satisfaction of the court that the expropriation is not for some public use, it
would be the duty and the obligation of the trial court to dismiss the action. And even during the
pendency of the appeal, if it should be made to appear to the satisfaction of the appellate court that
the expropriation is not for public use, then it would become the duty and the obligation of the
appellate court to dismiss it.27
Notably, the foregoing cases refer to the dismissal of an action for eminent domain at the instance of
the plaintiff during the pendency of the case. The rule is different where the case had been decided
and the judgment had already become final and executory.
Expropriation proceedings consists of two stages: first, condemnation of the property after it is
determined that its acquisition will be for a public purpose or public use and, second, the
determination of just compensation to be paid for the taking of private property to be made by the
court with the assistance of not more than three commissioners.28 Thus:
There are two (2) stages in every action for expropriation. The first is concerned with the
determination of the authority of the plaintiff to exercise the power of eminent domain and the
propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of
dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the
property sought to be condemned, for the public use or purpose described in the complaint, upon the
payment of just compensation to be determined as of the date of the filing of the complaint." An order
of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action
and leaves nothing more to be done by the Court on the merits. So, too, would an order of
condemnation be a final one, for thereafter, as the Rules expressly state, in the proceedings before

the Trial Court, "no objection to the exercise of the right of condemnation (or the propriety thereof)
shall be filed or heard."
The second phase of the eminent domain action is concerned with the determination by the Court of
"the just compensation for the property sought to be taken." This is done by the Court with the
assistance of not more than three (3) commissioners. The order fixing the just compensation on the
basis of the evidence before, and findings of, the commissioners would be final, too. It would finally
dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding
the issue. Obviously, one or another of the parties may believe the order to be erroneous in its
appreciation of the evidence or findings of fact or otherwise. Obviously, too, such a dissatisfied party
may seek a reversal of the order by taking an appeal therefrom. 29
The outcome of the first phase of expropriation proceedings, which is either an order of expropriation
or an order of dismissal, is final since it finally disposes of the case. On the other hand, the second
phase ends with an order fixing the amount of just compensation. Both orders, being final, are
appealable.30 An order of condemnation or dismissal is final, resolving the question of whether or not
the plaintiff has properly and legally exercised its power of eminent domain. 31 Once the first order
becomes final and no appeal thereto is taken, the authority to expropriate and its public use can no
longer be questioned.32
The above rule is based on Rule 67, Section 4 of the 1997 Rules of Civil Procedure, which provides:
Order of expropriation. — If the objections to and the defenses against the right of the plaintiff to
expropriate the property are overruled, or when no party appears to defend as required by this Rule,
the court may issue an order of expropriation declaring that the plaintiff has a lawful right to take the
property sought to be expropriated, for the public use or purpose described in the complaint, upon
the payment of just compensation to be determined as of the date of the taking of the property or the
filing of the complaint, whichever came first.
A final order sustaining the right to expropriate the property may be appealed by any party aggrieved
thereby.Such appeal, however, shall not prevent the court from determining the just compensation to
be paid.
After the rendition of such an order, the plaintiff shall not be permitted to dismiss or discontinue the
proceeding except on such terms as the court deems just and equitable. (underscoring ours)
In the case at bar, petitioner did not appeal the Order of the trial court dated December 10, 1999,
which declared that it has a lawful right to expropriate the properties of respondent Heirs of Isidro
Guivelondo. Hence, the Order became final and may no longer be subject to review or reversal in
any court.33 A final and executory decision or order can no longer be disturbed or reopened no matter
how erroneous it may be. Although judicial determinations are not infallible, judicial error should be
corrected through appeals, not through repeated suits on the same claim. 34
Petitioner anchors its arguments on the last paragraph of the above-quoted Rule 67, Section 4. In
essence, it contends that there are just and equitable grounds to allow dismissal or discontinuance
of the expropriation proceedings. More specifically, petitioner alleges that the intended public use

was rendered nugatory by the unreasonable just compensation fixed by the court, which is beyond
the means of the intended beneficiaries of the socialized housing project. The argument is tenuous.
Socialized housing has been recognized as public use for purposes of exercising the power of
eminent domain.
Housing is a basic human need. Shortage in housing is a matter of state concern since it directly and
significantly affects public health, safety, the environment and in sum, the general welfare. The public
character of housing measures does not change because units in housing projects cannot be
occupied by all but only by those who satisfy prescribed qualifications. A beginning has to be made,
for it is not possible to provide housing for all who need it, all at once.
xxx

xxx

xxx

In the light of the foregoing, this Court is satisfied that "socialized housing" falls with the confines of
"public use". xxx xxx xxx. Provisions on economic opportunities inextricably linked with low-cost
housing, or slum clearance, relocation and resettlement, or slum improvement emphasize the public
purpose of the project.35
The public purpose of the socialized housing project is not in any way diminished by the amount of
just compensation that the court has fixed. The need to provide decent housing to the urban poor
dwellers in the locality was not lost by the mere fact that the land cost more than petitioner had
expected. It is worthy to note that petitioner pursued its petition for certiorari with the Court of
Appeals assailing the amount of just compensation and its petition for review with this Court which
eloquently indicates that there still exists a public use for the housing project. It was only after its
appeal and petitions for review were dismissed that petitioner made a complete turn-around and
decided it did not want the property anymore.
Respondent landowners had already been prejudiced by the expropriation case. Petitioner cannot
be permitted to institute condemnation proceedings against respondents only to abandon it later
when it finds the amount of just compensation unacceptable. Indeed, our reprobation in the case of
Cosculluela v. Court of Appeals36 is apropos:
It is arbitrary and capricious for a government agency to initiate expropriation proceedings, seize a
person’s property, allow the judgment of the court to become final and executory and then refuse to
pay on the ground that there are no appropriations for the property earlier taken and profitably used.
We condemn in the strongest possible terms the cavalier attitude of government officials who adopt
such a despotic and irresponsible stance.
In order to resolve the issue of the propriety of the garnishment against petitioner’s funds and
personal properties, there is a need to first determine its true character as a government entity.
Generally, funds and properties of the government cannot be the object of garnishment proceedings
even if the consent to be sued had been previously granted and the state liability adjudged. 37
The universal rule that where the State gives its consent to be sued by private parties either by
general or special law, it may limit claimant’s action "only up to the completion of proceedings

anterior to the stage of execution" and that the power of the Courts ends when the judgment is
rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the corresponding appropriation as required by
law. The functions and public services rendered by the State cannot be allowed to be paralyzed or
disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated
by law.38
However, if the funds belong to a public corporation or a government-owned or controlled
corporation which is clothed with a personality of its own, separate and distinct from that of the
government, then its funds are not exempt from garnishment. 39 This is so because when the
government enters into commercial business, it abandons its sovereign capacity and is to be treated
like any other corporation.40
In the case of petitioner NHA, the matter of whether its funds and properties are exempt from
garnishment has already been resolved squarely against its predecessor, the People’s Homesite
and Housing Corporation (PHHC), to wit:
The plea for setting aside the notice of garnishment was premised on the funds of the People’s
Homesite and Housing Corporation deposited with petitioner being "public in character." There was
not even a categorical assertion to that effect. It is only the possibility of its being "public in
character." The tone was thus irresolute, the approach diffident. The premise that the funds cold be
spoken of as public in character may be accepted in the sense that the People’s Homesite and
Housing Corporation was a government-owned entity. It does not follow though that they were
exempt from garnishment.41
This was reiterated in the subsequent case of Philippine Rock Industries, Inc. v. Board of
Liquidators:42
Having a juridical personality separate and distinct from the government, the funds of such
government-owned and controlled corporations and non-corporate agency, although considered
public in character, are not exempt from garnishment. This doctrine was applied to suits filed against
the Philippine Virginia Tobacco Administration (PNB vs. Pabalan, et al., 83 SCRA 695); the National
Shipyard & Steel Corporation (NASSCO vs. CIR, 118 Phil. 782); the Manila Hotel Company (Manila
Hotel Employees Asso. vs. Manila Hotel Co., 73 Phil. 374); and thePeople's Homesite and Housing
Corporation (PNB vs. CIR, 81 SCRA 314). [emphasis ours]
Hence, it is clear that the funds of petitioner NHA are not exempt from garnishment or execution.
Petitioner’s prayer for injunctive relief to restrain respondent Sheriff Pascual Abordo from enforcing
the Notice of Levy and Garnishment against its funds and properties must, therefore, be denied.
WHEREFORE, in view of the foregoing, the instant petition for review is DENIED. The decision of
the Court of Appeals in CA-G.R. SP No. 68670, affirming the trial court’s Order denying petitioner’s
Motion to Dismiss the expropriation proceedings in Civil Case No. CEB-23386, is AFFIRMED.
Petitioner’s prayer for injunctive relief against the levy and garnishment of its funds and personal
properties is DENIED. The Temporary Restraining Order dated January 22, 2003 is LIFTED.

SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 168289

March 22, 2010

THE MUNICIPALITY OF HAGONOY, BULACAN, represented by the HON. FELIX V. OPLE,
Municipal Mayor, and FELIX V. OPLE, in his personal capacity, Petitioners,
vs.
HON. SIMEON P. DUMDUM, JR., in his capacity as the Presiding Judge of the REGIONAL
TRIAL COURT, BRANCH 7, CEBU CITY; HON. CLERK OF COURT & EX-OFFICIO SHERIFF of
the REGIONAL TRIAL COURT of CEBU CITY; HON. CLERK OF COURT & EX-OFFICIO
SHERIFF of the REGIONAL TRIAL COURT of BULACAN and his DEPUTIES; and EMILY ROSE
GO KO LIM CHAO, doing business under the name and style KD SURPLUS, Respondents.
DECISION
PERALTA, J.:
This is a Joint Petition1 under Rule 45 of the Rules of Court brought by the Municipality of Hagonoy,
Bulacan and its former chief executive, Mayor Felix V. Ople in his official and personal capacity, from
the January 31, 2005 Decision2 and the May 23, 2005 Resolution3 of the Court of Appeals in CAG.R. SP No. 81888. The assailed decision affirmed the October 20, 2003 Order 4 issued by the
Regional Trial Court of Cebu City, Branch 7 in Civil Case No. CEB-28587 denying petitioners’ motion
to dismiss and motion to discharge/dissolve the writ of preliminary attachment previously issued in
the case. The assailed resolution denied reconsideration.
The case stems from a Complaint5 filed by herein private respondent Emily Rose Go Ko Lim Chao
against herein petitioners, the Municipality of Hagonoy, Bulacan and its chief executive, Felix V. Ople
(Ople) for collection of a sum of money and damages. It was alleged that sometime in the middle of
the year 2000, respondent, doing business as KD Surplus and as such engaged in buying and
selling surplus trucks, heavy equipment, machinery, spare parts and related supplies, was contacted
by petitioner Ople. Respondent had entered into an agreement with petitioner municipality through
Ople for the delivery of motor vehicles, which supposedly were needed to carry out certain
developmental undertakings in the municipality. Respondent claimed that because of Ople’s earnest
representation that funds had already been allocated for the project, she agreed to deliver from her
principal place of business in Cebu City twenty-one motor vehicles whose value
totaled P5,820,000.00. To prove this, she attached to the complaint copies of the bills of lading
showing that the items were consigned, delivered to and received by petitioner municipality on
different dates.6 However, despite having made several deliveries, Ople allegedly did not heed
respondent’s claim for payment. As of the filing of the complaint, the total obligation of petitioner had

already totaled P10,026,060.13 exclusive of penalties and damages. Thus, respondent prayed for
full payment of the said amount, with interest at not less than 2% per month, plus P500,000.00 as
damages for business losses, P500,000.00 as exemplary damages, attorney’s fees of P100,000.00
and the costs of the suit.
On February 13, 2003, the trial court issued an Order 7 granting respondent’s prayer for a writ of
preliminary attachment conditioned upon the posting of a bond equivalent to the amount of the claim.
On March 20, 2003, the trial court issued the Writ of Preliminary Attachment8 directing the sheriff "to
attach the estate, real and personal properties" of petitioners.
Instead of addressing private respondent’s allegations, petitioners filed a Motion to Dismiss 9 on the
ground that the claim on which the action had been brought was unenforceable under the statute of
frauds, pointing out that there was no written contract or document that would evince the supposed
agreement they entered into with respondent. They averred that contracts of this nature, before
being undertaken by the municipality, would ordinarily be subject to several preconditions such as a
public bidding and prior approval of the municipal council which, in this case, did not obtain. From
this, petitioners impress upon us the notion that no contract was ever entered into by the local
government with respondent.10 To address the claim that respondent had made the deliveries under
the agreement, they advanced that the bills of lading attached to the complaint were hardly
probative, inasmuch as these documents had been accomplished and handled exclusively by
respondent herself as well as by her employees and agents.11
Petitioners also filed a Motion to Dissolve and/or Discharge the Writ of Preliminary Attachment
Already Issued,12invoking immunity of the state from suit, unenforceability of the contract, and failure
to substantiate the allegation of fraud.13
On October 20, 2003, the trial court issued an Order 14 denying the two motions. Petitioners moved
for reconsideration, but they were denied in an Order15 dated December 29, 2003.
Believing that the trial court had committed grave abuse of discretion in issuing the two orders,
petitioners elevated the matter to the Court of Appeals via a petition for certiorari under Rule 65. In it,
they faulted the trial court for not dismissing the complaint despite the fact that the alleged contract
was unenforceable under the statute of frauds, as well as for ordering the filing of an answer and in
effect allowing private respondent to prove that she did make several deliveries of the subject motor
vehicles. Additionally, it was likewise asserted that the trial court committed grave abuse of discretion
in not discharging/dissolving the writ of preliminary attachment, as prayed for in the motion, and in
effect disregarding the rule that the local government is immune from suit.
On January 31, 2005, following assessment of the parties’ arguments, the Court of Appeals, finding
no merit in the petition, upheld private respondent’s claim and affirmed the trial court’s
order.16 Petitioners moved for reconsideration, but the same was likewise denied for lack of merit and
for being a mere scrap of paper for having been filed by an unauthorized counsel. 17 Hence, this
petition.
In their present recourse, which raises no matter different from those passed upon by the Court of
Appeals, petitioners ascribe error to the Court of Appeals for dismissing their challenge against the

trial court’s October 20 and December 29, 2003 Orders. Again, they reason that the complaint
should have been dismissed at the first instance based on unenforceability and that the motion to
dissolve/discharge the preliminary attachment should have been granted. 18
Commenting on the petition, private respondent notes that with respect to the Court of Appeals’
denial of thecertiorari petition, the same was rightly done, as the fact of delivery may be properly and
adequately addressed at the trial of the case on the merits; and that the dissolution of the writ of
preliminary attachment was not proper under the premises inasmuch as the application for the writ
sufficiently alleged fraud on the part of petitioners. In the same breath, respondent laments that the
denial of petitioners’ motion for reconsideration was rightly done by the Court of Appeals, because it
raised no new matter that had not yet been addressed.19
After the filing of the parties’ respective memoranda, the case was deemed submitted for decision.
We now rule on the petition.
To begin with, the Statute of Frauds found in paragraph (2), Article 1403 of the Civil Code, 20 requires
for enforceability certain contracts enumerated therein to be evidenced by some note or
memorandum. The term "Statute of Frauds" is descriptive of statutes that require certain classes of
contracts to be in writing; and that do not deprive the parties of the right to contract with respect to
the matters therein involved, but merely regulate the formalities of the contract necessary to render it
enforceable.21
In other words, the Statute of Frauds only lays down the method by which the enumerated contracts
may be proved. But it does not declare them invalid because they are not reduced to writing
inasmuch as, by law, contracts are obligatory in whatever form they may have been entered into,
provided all the essential requisites for their validity are present.22 The object is to prevent fraud and
perjury in the enforcement of obligations depending, for evidence thereof, on the unassisted memory
of witnesses by requiring certain enumerated contracts and transactions to be evidenced by a writing
signed by the party to be charged.23 The effect of noncompliance with this requirement is simply that
no action can be enforced under the given contracts.24 If an action is nevertheless filed in court, it
shall warrant a dismissal under Section 1(i),25 Rule 16 of the Rules of Court, unless there has been,
among others, total or partial performance of the obligation on the part of either party.26
It has been private respondent’s consistent stand, since the inception of the instant case that she
has entered into a contract with petitioners. As far as she is concerned, she has already performed
her part of the obligation under the agreement by undertaking the delivery of the 21 motor vehicles
contracted for by Ople in the name of petitioner municipality. This claim is well substantiated — at
least for the initial purpose of setting out a valid cause of action against petitioners — by copies of
the bills of lading attached to the complaint, naming petitioner municipality as consignee of the
shipment. Petitioners have not at any time expressly denied this allegation and, hence, the same is
binding on the trial court for the purpose of ruling on the motion to dismiss. In other words, since
there exists an indication by way of allegation that there has been performance of the obligation on
the part of respondent, the case is excluded from the coverage of the rule on dismissals based on
unenforceability under the statute of frauds, and either party may then enforce its claims against the
other.

No other principle in remedial law is more settled than that when a motion to dismiss is filed, the
material allegations of the complaint are deemed to be hypothetically admitted. 27 This hypothetical
admission, according to Viewmaster Construction Corporation v. Roxas 28 and Navoa v. Court of
Appeals,29 extends not only to the relevant and material facts well pleaded in the complaint, but also
to inferences that may be fairly deduced from them. Thus, where it appears that the allegations in
the complaint furnish sufficient basis on which the complaint can be maintained, the same should not
be dismissed regardless of the defenses that may be raised by the defendants. 30 Stated differently,
where the motion to dismiss is predicated on grounds that are not indubitable, the better policy is to
deny the motion without prejudice to taking such measures as may be proper to assure that the ends
of justice may be served.31
It is interesting to note at this point that in their bid to have the case dismissed, petitioners theorize
that there could not have been a contract by which the municipality agreed to be bound, because it
was not shown that there had been compliance with the required bidding or that the municipal
council had approved the contract. The argument is flawed. By invoking unenforceability under the
Statute of Frauds, petitioners are in effect acknowledging the existence of a contract between them
and private respondent — only, the said contract cannot be enforced by action for being noncompliant with the legal requisite that it be reduced into writing. Suffice it to say that while this
assertion might be a viable defense against respondent’s claim, it is principally a matter of evidence
that may be properly ventilated at the trial of the case on the merits.
Verily, no grave abuse of discretion has been committed by the trial court in denying petitioners’
motion to dismiss this case. The Court of Appeals is thus correct in affirming the same.
We now address the question of whether there is a valid reason to deny petitioners’ motion to
discharge the writ of preliminary attachment.
Petitioners, advocating a negative stance on this issue, posit that as a municipal corporation, the
Municipality of Hagonoy is immune from suit, and that its properties are by law exempt from
execution and garnishment. Hence, they submit that not only was there an error committed by the
trial court in denying their motion to dissolve the writ of preliminary attachment; they also advance
that it should not have been issued in the first place. Nevertheless, they believe that respondent has
not been able to substantiate her allegations of fraud necessary for the issuance of the writ. 32
Private respondent, for her part, counters that, contrary to petitioners’ claim, she has amply
discussed the basis for the issuance of the writ of preliminary attachment in her affidavit; and that
petitioners’ claim of immunity from suit is negated by Section 22 of the Local Government Code,
which vests municipal corporations with the power to sue and be sued. Further, she contends that
the arguments offered by petitioners against the writ of preliminary attachment clearly touch on
matters that when ruled upon in the hearing for the motion to discharge, would amount to a trial of
the case on the merits.33
The general rule spelled out in Section 3, Article XVI of the Constitution is that the state and its
political subdivisions may not be sued without their consent. Otherwise put, they are open to suit but
only when they consent to it. Consent is implied when the government enters into a business
contract, as it then descends to the level of the other contracting party; or it may be embodied in a

general or special law34 such as that found in Book I, Title I, Chapter 2, Section 22 of the Local
Government Code of 1991, which vests local government units with certain corporate powers —one
of them is the power to sue and be sued.
Be that as it may, a difference lies between suability and liability. As held in City of Caloocan v.
Allarde,35 where the suability of the state is conceded and by which liability is ascertained judicially,
the state is at liberty to determine for itself whether to satisfy the judgment or not. Execution may not
issue upon such judgment, because statutes waiving non-suability do not authorize the seizure of
property to satisfy judgments recovered from the action. These statutes only convey an implication
that the legislature will recognize such judgment as final and make provisions for its full satisfaction.
Thus, where consent to be sued is given by general or special law, the implication thereof is limited
only to the resultant verdict on the action before execution of the judgment. 36
Traders Royal Bank v. Intermediate Appellate Court,37 citing Commissioner of Public Highways v.
San Diego,38 is instructive on this point. In that case which involved a suit on a contract entered into
by an entity supervised by the Office of the President, the Court held that while the said entity
opened itself to suit by entering into the subject contract with a private entity; still, the trial court was
in error in ordering the garnishment of its funds, which were public in nature and, hence, beyond the
reach of garnishment and attachment proceedings. Accordingly, the Court ordered that the writ of
preliminary attachment issued in that case be lifted, and that the parties be allowed to prove their
respective claims at the trial on the merits. There, the Court highlighted the reason for the rule, to wit:
The universal rule that where the State gives its consent to be sued by private parties either by
general or special law, it may limit claimant’s action "only up to the completion of proceedings
anterior to the stage of execution" and that the power of the Courts ends when the judgment is
rendered, since government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments, is based on obvious considerations of public policy.
Disbursements of public funds must be covered by the corresponding appropriations as required by
law. The functions and public services rendered by the State cannot be allowed to be paralyzed or
disrupted by the diversion of public funds from their legitimate and specific objects. x x x 39
With this in mind, the Court holds that the writ of preliminary attachment must be dissolved and,
indeed, it must not have been issued in the very first place. While there is merit in private
respondent’s position that she, by affidavit, was able to substantiate the allegation of fraud in the
same way that the fraud attributable to petitioners was sufficiently alleged in the complaint and,
hence, the issuance of the writ would have been justified. Still, the writ of attachment in this case
would only prove to be useless and unnecessary under the premises, since the property of the
municipality may not, in the event that respondent’s claim is validated, be subjected to writs of
execution and garnishment — unless, of course, there has been a corresponding appropriation
provided by law.40
1avvphi1

Anent the other issues raised by petitioners relative to the denial of their motion to dissolve the writ
of attachment, i.e., unenforceability of the contract and the veracity of private respondent’s allegation
of fraud, suffice it to say that these pertain to the merits of the main action. Hence, these issues are
not to be taken up in resolving the motion to discharge, lest we run the risk of deciding or prejudging
the main case and force a trial on the merits at this stage of the proceedings. 41

There is one final concern raised by petitioners relative to the denial of their motion for
reconsideration. They complain that it was an error for the Court of Appeals to have denied the
motion on the ground that the same was filed by an unauthorized counsel and, hence, must be
treated as a mere scrap of paper.42
It can be derived from the records that petitioner Ople, in his personal capacity, filed his Rule 65
petition with the Court of Appeals through the representation of the law firm Chan Robles &
Associates. Later on, municipal legal officer Joselito Reyes, counsel for petitioner Ople, in his official
capacity and for petitioner municipality, filed with the Court of Appeals a Manifestation with Entry of
Appearance43 to the effect that he, as counsel, was "adopting all the pleadings filed for and in behalf
of [Ople’s personal representation] relative to this case."44
It appears, however, that after the issuance of the Court of Appeals’ decision, only Ople’s personal
representation signed the motion for reconsideration. There is no showing that the municipal legal
officer made the same manifestation, as he previously did upon the filing of the petition. 45 From this,
the Court of Appeals concluded that it was as if petitioner municipality and petitioner Ople, in his
official capacity, had never moved for reconsideration of the assailed decision, and adverts to the
ruling in Ramos v. Court of Appeals46 and Municipality of Pililla, Rizal v. Court of Appeals47 that only
under well-defined exceptions may a private counsel be engaged in lawsuits involving a municipality,
none of which exceptions obtains in this case.48
The Court of Appeals is mistaken. As can be seen from the manner in which the Manifestation with
Entry of Appearance is worded, it is clear that petitioner municipality’s legal officer was intent on
adopting, for both the municipality and Mayor Ople, not only the certiorari petition filed with the Court
of Appeals, but also all other pleadings that may be filed thereafter by Ople’s personal
representation, including the motion for reconsideration subject of this case. In any event, however,
the said motion for reconsideration would warrant a denial, because there seems to be no matter
raised therein that has not yet been previously addressed in the assailed decision of the Court of
Appeals as well as in the proceedings below, and that would have otherwise warranted a different
treatment of the issues involved.
WHEREFORE, the Petition is GRANTED IN PART. The January 31, 2005 Decision of the Court of
Appeals in CA-G.R. SP No. 81888 is AFFIRMED insofar as it affirmed the October 20, 2003
Decision of the Regional Trial Court of Cebu City, Branch 7 denying petitioners’ motion to dismiss in
Civil Case No. CEB-28587. The assailed decision is REVERSED insofar as it affirmed the said trial
court’s denial of petitioners’ motion to discharge the writ of preliminary attachment issued in that
case. Accordingly, the August 4, 2003 Writ of Preliminary Attachment issued in Civil Case No. CEB28587 is ordered lifted.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 131544

March 16, 2001

EPG CONSTRUCTION CO., CIPER ELECTRICAL & ENGINEERING, SEPTA CONSTRUCTION
CO., PHIL. PLUMBING CO., HOME CONSTRUCTION INC., WORLD BUILDERS CO., GLASS
WORLD INC., PERFORMANCE BUILDERS DEV'T. CO., DE LEON-ARANETA CONST. CO., J.D.
MACAPAGAL CONST. CO., All represented by their Atty. IN FACT, MARCELO D,
FORONDA, petitioners,
vs.
HON. GREGORIO R. VIGILAR, In His Capacity as Secretary of Public Works and
Highways, respondent.
BUENA, J.:
Sought to be reversed in the instant Petition for Certiorari is the Decision, dated 07 November 1997,
of the Regional Trial Court of Quezon City, Branch 226, in Civil Case No. Q-96-29243, 1 dismissing
the Petition for Mandamus filed by herein petitioners against herein respondent Hon. Gregorio
Vigilar, in his capacity as Secretary of the Department of Public Works and Highways (DPWH).
The tapestry of facts unfurls.
In 1983, the Ministry of Human Settlement, through the BLISS Development Corporation, initiated a
housing project on a government property along the east bank of the Manggahan Floodway in Pasig
City. For this purpose, the Ministry of Human Settlement entered into a Memorandum of Agreement
(MOA) with the Ministry of Public Works and Highways, 2 where the latter undertook to develop the
housing site and construct thereon 145 housing units.
By virtue of the MOA, the Ministry of Public Works and Highways forged individual contracts with
herein petitioners EPG Construction Co., Ciper Electrical and Engineering, Septa Construction Co.,
Phil. Plumbing Co., Home Construction Inc., World Builders Inc., Glass World Inc., Performance
Builders Development Co. and De Leon Araneta Construction Co., for the construction of the
housing units. Under the contracts, the scope of construction and funding therefor covered only
around "2/3 of each housing unit."3 After complying with the terms of said contracts, and by reason of
the verbal request and assurance of then DPWH Undersecretary Aber Canlas that additional funds
would be available and forthcoming, petitioners agreed to undertake and perform "additional
constructions"4 for the completion of the housing units, despite the absence of appropriations and
written contracts to cover subsequent expenses for the "additional constructions."
Petitioners then received payment for the construction work duly covered by the individual written
contracts, thereby leaving an unpaid balance of P5,918,315.63,5 which amount represents the
expenses for the "additional constructions" for the completion of the existing housing units. On 14

November 1988, petitioners sent a demand letter to the DPWH Secretary and submitted that their
claim for payment was favorably recommended by DPWH Assistant Secretary for Legal Services
Dominador Madamba, who recognized the existence of implied contractscovering the additional
constructions. Notwithstanding, DPWH Assistant Secretary Madamba opined that payment of
petitioners' money claims should be based on quantum meruit and should be forwarded to the
Commission on Audit (COA) for its due consideration and approval. The money claims were then
referred to COA which returned the same to the DPWH Auditor for auditorial action. On the basis of
the Inspection Report of the Auditor's Technical Staff, the DPWH Auditor interposed no objection to
the payment of the money claims subject to whatever action the COA may adopt.
In a Second Indorsement dated 27 July 1992, the COA returned the documents to the DPWH,
stating that funds should first be made available before COA could pass upon and act on the money
claims. In a Memorandum dated 30 July 1992, then DPWH Secretary Jose De Jesus requested the
Secretary of Budget and Management to release public funds for the payment of petitioners' money
claims, stating that the "amount is urgently needed in order to settle once and for all this (sic)
outstanding obligations of the government." In a Letter of the Undersecretary of Budget and
Management dated 20 December 1994, the amount of P5,819,316.00 was then released for the
payment of petitioners' money claims, under Advise of Allotment No. A4-1303-04-41-303.
In an Indorsement dated 27 December 1995, the COA referred anew the money claims to the
DPWH pursuant to COA Circular 95-006, thus:
"Respectfully returned thru the Auditor to the Honorable Secretary, Department of Public
Works and Highways, Port Area, Manila, the above-captioned subject (Re: Claim of Ten (10)
contractors for payment of Work accomplishments on the construction of the COGEO II
Housing Project, Pasig, Metro Manila) and reiterating the policy of this office as embodied in
COA Circular No. 95-006 dated May 18, 1995 totally lifting its pre-audit activities on all
financial transactions of the agencies of the government involving
implementation/prosecution of projects and/or payment of claims without exception so as to
vest on agency heads the prerogative to exercise fiscal responsibility thereon.
"The audit of the transaction shall be done after payment."
In a letter dated 26 August 1996, respondent DPWH Secretary Gregorio Vigilar denied the subject
money claims prompting herein petitioners to file before the Regional Trial Court of Quezon City,
Branch 226, a Petition for Mandamus praying that herein respondent be ordered:
"1) To pay petitioners the total of P5,819,316.00;
"2) To pay petitioners moral and exemplary damages in the amount to be fixed by the Court
and sum of P500,000.00 as attorney's fees.
On 18 February 1997, the lower court conducted a pre-trial conference where the parties appeared
and filed their respective pre-trial briefs. Further, respondent submitted a Memorandum to which
petitioners filed a Rejoinder.

On 07 November 1997, the lower court denied the Petition for Mandamus, in a Decision which
disposed as follows:
"WHEREFORE, in view of all the foregoing, the instant Petition for Mandamus is dismissed.
The order of September 24, 1997, submitting the Manifestation and Motion for Resolution, is
hereby withdrawn.
"SO ORDERED."
Hence, this petition where the core issue for resolution focuses on the right of petitioners-contractors
to compensation for a public works housing project.
In the case before us, respondent, citing among others Sections 46 6 and 47,7 Chapter 7, Sub-Title B,
Title I, Book V of the Administrative Code of 1987 (E.O 292), posits that the "existence of
appropriations and availability of funds as certified to and verified by the proper accounting officials
are conditions sine qua non for the execution of government contracts."8 Respondent harps on the
fact that "the additional work was pursued through the verbal request of then DPWH Undersecretary
Aber P. Canlas, despite the absence of the corresponding supplemental contracts and appropriate
funding."9 According to respondent, "sans showing of certificate of availability of funds, the implied
contracts are considered fatally defective and considered inexistent and void ab initio." Respondent
concludes that "inasmuch as the additional work done was pursued in violation of the mandatory
provisions of the laws concerning contracts involving expenditure of public funds and in excess of
the public official's contracting authority, the same is not binding on the government and impose no
liability therefor."10
Although this Court agrees with respondent's postulation that the "implied contracts", which covered
the additional constructions, are void, in view of violation of applicable laws, auditing rules and lack
of legal requirements,11 we nonetheless find the instant petition laden with merit and uphold, in the
interest of substantial justice, petitioners-contractors' right to be compensated for the "additional
constructions" on the public works housing project, applying the principle of quantum meruit.
Interestingly, this case is not of first impression. In Eslao vs. Commission on Audit,12 this Court
likewise allowed recovery by the contractor on the basis of quantum meruit, following our
pronouncement in Royal Trust Construction vs. Commission on Audit,13 thus:
"In Royal Trust Construction vs. COA, a case involving the widening and deepening of the
Betis River in Pampanga at the urgent request of the local officials and with the knowledge
and consent of the Ministry of Public Works, even without a written contract and the covering
appropriation, the project was undertaken to prevent the overflowing of the neighboring
areas and to irrigate the adjacent farmlands. The contractor sought compensation for the
completed portion in the sum of over P1 million. While the payment was favorably
recommended by the Ministry of Public Works, it was denied by the respondent COA on the
ground of violation of mandatory legal provisions as the existence of corresponding
appropriations covering the contract cost. Under COA Res. No. 36-58 dated November 15,
1986, its existing policy is to allow recovery from covering contracts on the basis of quantum

meruit if there is delay in the accomplishment of the required certificate of availability of
funds to support a contract." (Emphasis ours)
In the Royal Construction case, this Court, applying the principle of quantum meruit in allowing
recovery by the contractor, elucidated:
"The work done by it (the contractor) was impliedly authorized and later expressly
acknowledged by the Ministry of Public Works, which has twice recommended favorable
action on the petitioner's request for payment. Despite the admitted absence of a specific
covering appropriation as required under COA Resolution No. 36-58, the petitioner may
nevertheless be compensated for the services rendered by it, concededly for the public
benefit, from the general fund allotted by law to the Betis River project. Substantial
compliance with the said resolution, in view of the circumstances of this case, should
suffice.The Court also feels that the remedy suggested by the respondent, to wit, the filing of
a complaint in court for recovery of the compensation claimed, would entail additional
expense, inconvenience and delay which in fairness should be imposed on the petitioner.
"Accordingly, in the interest of substantial justice and equity, the respondent Commission on
Audit is DIRECTED to determine on a quantum meruit basis the total compensation due to
the petitioner for the services rendered by it in the channel improvement of the Betis River in
Pampanga and to allow the payment thereof immediately upon completion of the said
determination." (Emphasis ours)
Similarly, this Court applied the doctrine of quantum meruit in Melchor vs. Commission on Audit14 and
explained that where payment is based on quantum meruit, the amount of recovery would only be
the reasonable value of the thing or services rendered regardless of any agreement as to value. 15
Notably, the peculiar circumstances present in the instant case buttress petitioners' claim for
compensation for the additional constructions, despite the illegality and void nature of the "implied
contracts" forged between the DPWH and petitioners-contractors. On this matter, it bears stressing
that the illegality of the subject contracts proceeds from an express declaration or prohibition by
law,16 and not from any intrinsic illegality. Stated differently, the subject contracts are not illegal per
se.
Of equal significance are circumstances attendant and peculiar in this case which necessitate
allowance of petitioners' money claims — on the basis of quantum meruit — for work accomplished
on the government housing project.
To begin with, petitioners-contractors assented and agreed to undertake additional constructions for
the completion of the housing units, believing in good faith and in the interest of the government and,
in effect, the public in general, that appropriations to cover the additional constructions and
completion of the public works housing project would be available and forthcoming. On this particular
score, the records reveal that the verbal request and assurance of then DPWH Undersecretary
Canlas led petitioners-contractors to undertake thecompletion of the government housing project,
despite the absence of covering appropriations, written contracts, and certification of availability of
funds, as mandated by law and pertinent auditing rules and issuances. To put it differently, the

"implied contracts," declared void in this case, covered only the completion and final phase of
construction of the housing units, which structures, concededly, were already existing, albeit not yet
finished in their entirety at the time the "implied contracts" were entered into between the
government and the contractors.
Further, petitioners-contractors sent to the DPWH Secretary a demand letter pressing for their
money claims, on the strength of a favorable recommendation from the DPWH Assistant Secretary
for Legal Affairs to the effect that implied contracts existed and that the money claims had ample
basis applying the principle of quantum meruit. Moreover, as can be gleaned from the records, even
the DPWH Auditor interposed no objection to the payment of the money claims, subject to whatever
action the COA may adopt.
Beyond this, the sum of P5,819,316.00 representing the amount of petitioners' money claims, had
already been released by the Department of Budget and Management (DBM), under Advise of
Allotment No. A4-1303-04-41-303. Equally important is the glaring fact that the construction of the
housing units had already been completed by petitioners-contractors and the subject housing units
had been, since their completion, under the control and disposition of the government pursuant to its
public works housing project.
To our mind, it would be the apex of injustice and highly inequitable for us to defeat petitionerscontractors' right to be duly compensated for actual work performed and services rendered, where
both the government and the public have, for years, received and accepted benefits from said
housing project and reaped the fruits of petitioners-contractors' honest toil and labor.
Incidentally, respondent likewise argues that the State may not be sued in the instant case, invoking
the constitutional doctrine of Non-suability of the State,17 otherwise known as the Royal Prerogative
of Dishonesty.
Respondent's argument is misplaced inasmuch as the Principle of State Immunity finds no
application in the case before us.
Under these circumstances, respondent may not validly invoke the Royal Prerogative of
Dishonesty and conveniently hide under the State's cloak of invincibility against suit, considering that
this principle yields to certain settled exceptions. True enough, the rule, in any case, is not absolute
for it does not say that the state may not be sued under any circumstance. 18
Thus, in Amigable vs. Cuenca,19 this Court, in effect, shred the protective shroud which shields the
State from suit, reiterating our decree in the landmark case of Ministerio vs. CFI of Cebu20 that "the
doctrine of governmental immunity from suit cannot serve as an instrument for perpetrating an
injustice on a citizen." It is just as important, if not more so, that there be fidelity to legal norms on the
part of officialdom if the rule of law were to be maintained. 21
Although the Amigable and Ministerio cases generously tackled the issue of the State's immunity
from suit vis a vis the payment of just compensation for expropriated property, this Court nonetheless
finds the doctrine enunciated in the aforementioned cases applicable to the instant controversy,

considering that the ends of justice would be subverted if we were to uphold, in this particular
instance, the State's immunity from suit.
To be sure, this Court — as the staunch guardian of the citizens' rights and welfare — cannot
sanction an injustice so patent on its face, and allow itself to be an instrument in the perpetration
thereof. Justice and equity sternly demand that the State's cloak of invincibility against suit be shred
in this particular instance, and that petitioners-contractors be duly compensated — on the basis
of quantum meruit — for construction done on the public works housing project.
IN VIEW WHEREOF, the instant petition is GRANTED. The assailed decision of the Regional Trial
Court dated 07 November 1997 is REVERSED AND SET ASIDE.
ACCORDINGLY, the Commission on Audit is hereby directed to determine and ascertain with
dispatch, on aquantum meruit basis, the total compensation due to petitioners-contractors for the
additional constructions on the housing project and to allow payment thereof upon the completion of
said determination. No costs.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 176579

June 28, 2011

WILSON P. GAMBOA, Petitioner,
vs.
FINANCE SECRETARY MARGARITO B. TEVES, FINANCE UNDERSECRETARY JOHN P.
SEVILLA, AND COMMISSIONER RICARDO ABCEDE OF THE PRESIDENTIAL COMMISSION
ON GOOD GOVERNMENT (PCGG) IN THEIR CAPACITIES AS CHAIR AND MEMBERS,
RESPECTIVELY, OF THE PRIVATIZATION COUNCIL, CHAIRMAN ANTHONI SALIM OF FIRST
PACIFIC CO., LTD. IN HIS CAPACITY AS DIRECTOR OF METRO PACIFIC ASSET HOLDINGS
INC., CHAIRMAN MANUEL V. PANGILINAN OF PHILIPPINE LONG DISTANCE TELEPHONE
COMPANY (PLDT) IN HIS CAPACITY AS MANAGING DIRECTOR OF FIRST PACIFIC CO., LTD.,
PRESIDENT NAPOLEON L. NAZARENO OF PHILIPPINE LONG DISTANCE TELEPHONE
COMPANY, CHAIR FE BARIN OF THE SECURITIES EXCHANGE COMMISSION, and
PRESIDENT FRANCIS LIM OF THE PHILIPPINE STOCK EXCHANGE, Respondents.
PABLITO V. SANIDAD and ARNO V. SANIDAD, Petitioners-in-Intervention.
DECISION
CARPIO, J.:

The Case
This is an original petition for prohibition, injunction, declaratory relief and declaration of nullity of the
sale of shares of stock of Philippine Telecommunications Investment Corporation (PTIC) by the
government of the Republic of the Philippines to Metro Pacific Assets Holdings, Inc. (MPAH), an
affiliate of First Pacific Company Limited (First Pacific).
The Antecedents
The facts, according to petitioner Wilson P. Gamboa, a stockholder of Philippine Long Distance
Telephone Company (PLDT), are as follows:1
On 28 November 1928, the Philippine Legislature enacted Act No. 3436 which granted PLDT a
franchise and the right to engage in telecommunications business. In 1969, General Telephone and
Electronics Corporation (GTE), an American company and a major PLDT stockholder, sold 26
percent of the outstanding common shares of PLDT to PTIC. In 1977, Prime Holdings, Inc. (PHI)
was incorporated by several persons, including Roland Gapud and Jose Campos, Jr. Subsequently,
PHI became the owner of 111,415 shares of stock of PTIC by virtue of three Deeds of Assignment
executed by PTIC stockholders Ramon Cojuangco and Luis Tirso Rivilla. In 1986, the 111,415
shares of stock of PTIC held by PHI were sequestered by the Presidential Commission on Good
Government (PCGG). The 111,415 PTIC shares, which represent about 46.125 percent of the
outstanding capital stock of PTIC, were later declared by this Court to be owned by the Republic of
the Philippines.2
In 1999, First Pacific, a Bermuda-registered, Hong Kong-based investment firm, acquired the
remaining 54 percent of the outstanding capital stock of PTIC. On 20 November 2006, the InterAgency Privatization Council (IPC) of the Philippine Government announced that it would sell the
111,415 PTIC shares, or 46.125 percent of the outstanding capital stock of PTIC, through a public
bidding to be conducted on 4 December 2006. Subsequently, the public bidding was reset to 8
December 2006, and only two bidders, Parallax Venture Fund XXVII (Parallax) and Pan-Asia
Presidio Capital, submitted their bids. Parallax won with a bid of P25.6 billion or US$510 million.
Thereafter, First Pacific announced that it would exercise its right of first refusal as a PTIC
stockholder and buy the 111,415 PTIC shares by matching the bid price of Parallax. However, First
Pacific failed to do so by the 1 February 2007 deadline set by IPC and instead, yielded its right to
PTIC itself which was then given by IPC until 2 March 2007 to buy the PTIC shares. On 14 February
2007, First Pacific, through its subsidiary, MPAH, entered into a Conditional Sale and Purchase
Agreement of the 111,415 PTIC shares, or 46.125 percent of the outstanding capital stock of PTIC,
with the Philippine Government for the price of P25,217,556,000 or US$510,580,189. The sale was
completed on 28 February 2007.
Since PTIC is a stockholder of PLDT, the sale by the Philippine Government of 46.125 percent of
PTIC shares is actually an indirect sale of 12 million shares or about 6.3 percent of the outstanding
common shares of PLDT.With the sale, First Pacific’s common shareholdings in PLDT
increased from 30.7 percent to 37 percent, thereby increasing the common shareholdings of
foreigners in PLDT to about 81.47 percent. This violates Section 11, Article XII of the 1987

Philippine Constitution which limits foreign ownership of the capital of a public utility to not more than
40 percent.3
On the other hand, public respondents Finance Secretary Margarito B. Teves, Undersecretary John
P. Sevilla, and PCGG Commissioner Ricardo Abcede allege the following relevant facts:
On 9 November 1967, PTIC was incorporated and had since engaged in the business of investment
holdings. PTIC held 26,034,263 PLDT common shares, or 13.847 percent of the total PLDT
outstanding common shares. PHI, on the other hand, was incorporated in 1977, and became the
owner of 111,415 PTIC shares or 46.125 percent of the outstanding capital stock of PTIC by virtue of
three Deeds of Assignment executed by Ramon Cojuangco and Luis Tirso Rivilla. In 1986, the
111,415 PTIC shares held by PHI were sequestered by the PCGG, and subsequently declared by
this Court as part of the ill-gotten wealth of former President Ferdinand Marcos. The sequestered
PTIC shares were reconveyed to the Republic of the Philippines in accordance with this Court’s
decision4 which became final and executory on 8 August 2006.
The Philippine Government decided to sell the 111,415 PTIC shares, which represent 6.4 percent of
the outstanding common shares of stock of PLDT, and designated the Inter-Agency Privatization
Council (IPC), composed of the Department of Finance and the PCGG, as the disposing entity. An
invitation to bid was published in seven different newspapers from 13 to 24 November 2006. On 20
November 2006, a pre-bid conference was held, and the original deadline for bidding scheduled on 4
December 2006 was reset to 8 December 2006. The extension was published in nine different
newspapers.
During the 8 December 2006 bidding, Parallax Capital Management LP emerged as the highest
bidder with a bid of P25,217,556,000. The government notified First Pacific, the majority owner of
PTIC shares, of the bidding results and gave First Pacific until 1 February 2007 to exercise its right
of first refusal in accordance with PTIC’s Articles of Incorporation. First Pacific announced its
intention to match Parallax’s bid.
On 31 January 2007, the House of Representatives (HR) Committee on Good Government
conducted a public hearing on the particulars of the then impending sale of the 111,415 PTIC shares.
Respondents Teves and Sevilla were among those who attended the public hearing. The HR
Committee Report No. 2270 concluded that: (a) the auction of the government’s 111,415 PTIC
shares bore due diligence, transparency and conformity with existing legal procedures; and (b) First
Pacific’s intended acquisition of the government’s 111,415 PTIC shares resulting in First
Pacific’s 100% ownership of PTIC will not violate the 40 percent constitutional limit on foreign
ownership of a public utility since PTIC holds only 13.847 percent of the total outstanding
common shares of PLDT.5 On 28 February 2007, First Pacific completed the acquisition of the
111,415 shares of stock of PTIC.
Respondent Manuel V. Pangilinan admits the following facts: (a) the IPC conducted a public bidding
for the sale of 111,415 PTIC shares or 46 percent of the outstanding capital stock of PTIC (the
remaining 54 percent of PTIC shares was already owned by First Pacific and its affiliates); (b)
Parallax offered the highest bid amounting toP25,217,556,000; (c) pursuant to the right of first
refusal in favor of PTIC and its shareholders granted in PTIC’s Articles of Incorporation, MPAH, a

First Pacific affiliate, exercised its right of first refusal by matching the highest bid offered for PTIC
shares on 13 February 2007; and (d) on 28 February 2007, the sale was consummated when MPAH
paid IPC P25,217,556,000 and the government delivered the certificates for the 111,415 PTIC
shares. Respondent Pangilinan denies the other allegations of facts of petitioner.
On 28 February 2007, petitioner filed the instant petition for prohibition, injunction, declaratory relief,
and declaration of nullity of sale of the 111,415 PTIC shares. Petitioner claims, among others, that
the sale of the 111,415 PTIC shares would result in an increase in First Pacific’s common
shareholdings in PLDT from 30.7 percent to 37 percent, and this, combined with Japanese NTT
DoCoMo’s common shareholdings in PLDT, would result to a total foreign common shareholdings in
PLDT of 51.56 percent which is over the 40 percent constitutional limit.6 Petitioner asserts:
If and when the sale is completed, First Pacific’s equity in PLDT will go up from 30.7 percent to 37.0
percent of its common – or voting- stockholdings, x x x. Hence, the consummation of the sale will put
the two largest foreign investors in PLDT – First Pacific and Japan’s NTT DoCoMo, which is the
world’s largest wireless telecommunications firm, owning 51.56 percent of PLDT common equity. x x
x With the completion of the sale, data culled from the official website of the New York Stock
Exchange (www.nyse.com) showed that those foreign entities, which own at least five percent of
common equity, will collectively own 81.47 percent of PLDT’s common equity. x x x
x x x as the annual disclosure reports, also referred to as Form 20-K reports x x x which PLDT
submitted to the New York Stock Exchange for the period 2003-2005, revealed that First Pacific and
several other foreign entities breached the constitutional limit of 40 percent ownership as early as
2003. x x x"7
Petitioner raises the following issues: (1) whether the consummation of the then impending sale of
111,415 PTIC shares to First Pacific violates the constitutional limit on foreign ownership of a public
utility; (2) whether public respondents committed grave abuse of discretion in allowing the sale of the
111,415 PTIC shares to First Pacific; and (3) whether the sale of common shares to foreigners in
excess of 40 percent of the entire subscribed common capital stock violates the constitutional limit
on foreign ownership of a public utility.8
On 13 August 2007, Pablito V. Sanidad and Arno V. Sanidad filed a Motion for Leave to Intervene
and Admit Attached Petition-in-Intervention. In the Resolution of 28 August 2007, the Court granted
the motion and noted the Petition-in-Intervention.
Petitioners-in-intervention "join petitioner Wilson Gamboa x x x in seeking, among others, to enjoin
and/or nullify the sale by respondents of the 111,415 PTIC shares to First Pacific or assignee."
Petitioners-in-intervention claim that, as PLDT subscribers, they have a "stake in the outcome of the
controversy x x x where the Philippine Government is completing the sale of government owned
assets in [PLDT], unquestionably a public utility, in violation of the nationality restrictions of the
Philippine Constitution."
The Issue

This Court is not a trier of facts. Factual questions such as those raised by petitioner,9 which
indisputably demand a thorough examination of the evidence of the parties, are generally beyond
this Court’s jurisdiction. Adhering to this well-settled principle, the Court shall confine the resolution
of the instant controversy solely on the threshold and purely legal issue of whether the term
"capital" in Section 11, Article XII of the Constitution refers to the total common shares only or to the
total outstanding capital stock (combined total of common and non-voting preferred shares) of PLDT,
a public utility.
The Ruling of the Court
The petition is partly meritorious.
Petition for declaratory relief treated as petition for mandamus
At the outset, petitioner is faced with a procedural barrier. Among the remedies petitioner seeks, only
the petition for prohibition is within the original jurisdiction of this court, which however is not
exclusive but is concurrent with the Regional Trial Court and the Court of Appeals. The actions for
declaratory relief,10 injunction, and annulment of sale are not embraced within the original jurisdiction
of the Supreme Court. On this ground alone, the petition could have been dismissed outright.
While direct resort to this Court may be justified in a petition for prohibition, 11 the Court shall
nevertheless refrain from discussing the grounds in support of the petition for prohibition since on 28
February 2007, the questioned sale was consummated when MPAH paid IPC P25,217,556,000 and
the government delivered the certificates for the 111,415 PTIC shares.
However, since the threshold and purely legal issue on the definition of the term "capital" in Section
11, Article XII of the Constitution has far-reaching implications to the national economy, the Court
treats the petition for declaratory relief as one for mandamus.12
In Salvacion v. Central Bank of the Philippines,13 the Court treated the petition for declaratory relief
as one for mandamus considering the grave injustice that would result in the interpretation of a
banking law. In that case, which involved the crime of rape committed by a foreign tourist against a
Filipino minor and the execution of the final judgment in the civil case for damages on the tourist’s
dollar deposit with a local bank, the Court declared Section 113 of Central Bank Circular No. 960,
exempting foreign currency deposits from attachment, garnishment or any other order or process of
any court, inapplicable due to the peculiar circumstances of the case. The Court held that "injustice
would result especially to a citizen aggrieved by a foreign guest like accused x x x" that would
"negate Article 10 of the Civil Code which provides that ‘in case of doubt in the interpretation or
application of laws, it is presumed that the lawmaking body intended right and justice to prevail.’"
The Court therefore required respondents Central Bank of the Philippines, the local bank, and the
accused to comply with the writ of execution issued in the civil case for damages and to release the
dollar deposit of the accused to satisfy the judgment.
In Alliance of Government Workers v. Minister of Labor,14 the Court similarly brushed aside the
procedural infirmity of the petition for declaratory relief and treated the same as one for mandamus.
In Alliance, the issue was whether the government unlawfully excluded petitioners, who were

government employees, from the enjoyment of rights to which they were entitled under the law.
Specifically, the question was: "Are the branches, agencies, subdivisions, and instrumentalities of
the Government, including government owned or controlled corporations included among the four
‘employers’ under Presidential Decree No. 851 which are required to pay their employees x x x a
thirteenth (13th) month pay x x x ?" The Constitutional principle involved therein affected all
government employees, clearly justifying a relaxation of the technical rules of procedure, and
certainly requiring the interpretation of the assailed presidential decree.
In short, it is well-settled that this Court may treat a petition for declaratory relief as one for
mandamus if the issue involved has far-reaching implications. As this Court held in Salvacion:
The Court has no original and exclusive jurisdiction over a petition for declaratory relief. However,
exceptions to this rule have been recognized. Thus, where the petition has far-reaching
implications and raises questions that should be resolved, it may be treated as one for
mandamus.15 (Emphasis supplied)
In the present case, petitioner seeks primarily the interpretation of the term "capital" in Section 11,
Article XII of the Constitution. He prays that this Court declare that the term "capital" refers to
common shares only, and that such shares constitute "the sole basis in determining foreign equity in
a public utility." Petitioner further asks this Court to declare any ruling inconsistent with such
interpretation unconstitutional.
The interpretation of the term "capital" in Section 11, Article XII of the Constitution has far-reaching
implications to the national economy. In fact, a resolution of this issue will determine whether
Filipinos are masters, or second class citizens, in their own country. What is at stake here is whether
Filipinos or foreigners will have effective control of the national economy. Indeed, if ever there is a
legal issue that has far-reaching implications to the entire nation, and to future generations of
Filipinos, it is the threshhold legal issue presented in this case.
The Court first encountered the issue on the definition of the term "capital" in Section 11, Article XII
of the Constitution in the case of Fernandez v. Cojuangco, docketed as G.R. No. 157360.16 That
case involved the same public utility (PLDT) and substantially the same private respondents. Despite
the importance and novelty of the constitutional issue raised therein and despite the fact that the
petition involved a purely legal question, the Court declined to resolve the case on the merits, and
instead denied the same for disregarding the hierarchy of courts.17 There, petitioner Fernandez
assailed on a pure question of law the Regional Trial Court’s Decision of 21 February 2003 via a
petition for review under Rule 45. The Court’s Resolution, denying the petition, became final on 21
December 2004.
The instant petition therefore presents the Court with another opportunity to finally settle this purely
legal issuewhich is of transcendental importance to the national economy and a fundamental
requirement to a faithful adherence to our Constitution. The Court must forthwith seize such
opportunity, not only for the benefit of the litigants, but more significantly for the benefit of the entire
Filipino people, to ensure, in the words of the Constitution, "a self-reliant and independent national
economy effectively controlled by Filipinos."18 Besides, in the light of vague and confusing
positions taken by government agencies on this purely legal issue, present and future foreign

investors in this country deserve, as a matter of basic fairness, a categorical ruling from this Court on
the extent of their participation in the capital of public utilities and other nationalized businesses.
Despite its far-reaching implications to the national economy, this purely legal issue has remained
unresolved for over 75 years since the 1935 Constitution. There is no reason for this Court to evade
this ever recurring fundamental issue and delay again defining the term "capital," which appears not
only in Section 11, Article XII of the Constitution, but also in Section 2, Article XII on co-production
and joint venture agreements for the development of our natural resources, 19 in Section 7, Article XII
on ownership of private lands,20 in Section 10, Article XII on the reservation of certain investments to
Filipino citizens,21 in Section 4(2), Article XIV on the ownership of educational institutions, 22 and in
Section 11(2), Article XVI on the ownership of advertising companies.23
Petitioner has locus standi
There is no dispute that petitioner is a stockholder of PLDT. As such, he has the right to question the
subject sale, which he claims to violate the nationality requirement prescribed in Section 11, Article
XII of the Constitution. If the sale indeed violates the Constitution, then there is a possibility that
PLDT’s franchise could be revoked, a dire consequence directly affecting petitioner’s interest as a
stockholder.
More importantly, there is no question that the instant petition raises matters of transcendental
importance to the public. The fundamental and threshold legal issue in this case, involving the
national economy and the economic welfare of the Filipino people, far outweighs any perceived
impediment in the legal personality of the petitioner to bring this action.
In Chavez v. PCGG,24 the Court upheld the right of a citizen to bring a suit on matters of
transcendental importance to the public, thus:
In Tañada v. Tuvera, the Court asserted that when the issue concerns a public right and the
object of mandamus is to obtain the enforcement of a public duty, the people are regarded as
the real parties in interest; and because it is sufficient that petitioner is a citizen and as such
is interested in the execution of the laws, he need not show that he has any legal or special
interest in the result of the action. In the aforesaid case, the petitioners sought to enforce their
right to be informed on matters of public concern, a right then recognized in Section 6, Article IV of
the 1973 Constitution, in connection with the rule that laws in order to be valid and enforceable must
be published in the Official Gazette or otherwise effectively promulgated. In ruling for the petitioners’
legal standing, the Court declared that the right they sought to be enforced ‘is a public right
recognized by no less than the fundamental law of the land.’
Legaspi v. Civil Service Commission, while reiterating Tañada, further declared that ‘when a
mandamus proceeding involves the assertion of a public right, the requirement of personal
interest is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the
general ‘public’ which possesses the right.’
Further, in Albano v. Reyes, we said that while expenditure of public funds may not have been
involved under the questioned contract for the development, management and operation of the

Manila International Container Terminal, ‘public interest [was] definitely involved considering the
important role [of the subject contract] . . . in the economic development of the country and
the magnitude of the financial consideration involved.’ We concluded that, as a consequence,
the disclosure provision in the Constitution would constitute sufficient authority for upholding the
petitioner’s standing. (Emphasis supplied)
Clearly, since the instant petition, brought by a citizen, involves matters of transcendental public
importance, the petitioner has the requisite locus standi.
Definition of the Term "Capital" in
Section 11, Article XII of the 1987 Constitution
Section 11, Article XII (National Economy and Patrimony) of the 1987 Constitution mandates the
Filipinization of public utilities, to wit:
Section 11. No franchise, certificate, or any other form of authorization for the operation of a
public utility shall be granted except to citizens of the Philippines or to corporations or
associations organized under the laws of the Philippines, at least sixty per centum of whose
capital is owned by such citizens; nor shall such franchise, certificate, or authorization be
exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right
be granted except under the condition that it shall be subject to amendment, alteration, or repeal by
the Congress when the common good so requires. The State shall encourage equity participation in
public utilities by the general public. The participation of foreign investors in the governing body of
any public utility enterprise shall be limited to their proportionate share in its capital, and all the
executive and managing officers of such corporation or association must be citizens of the
Philippines. (Emphasis supplied)
The above provision substantially reiterates Section 5, Article XIV of the 1973 Constitution, thus:
Section 5. No franchise, certificate, or any other form of authorization for the operation of a
public utility shall be granted except to citizens of the Philippines or to corporations or
associations organized under the laws of the Philippines at least sixty per centum of the
capital of which is owned by such citizens, nor shall such franchise, certificate, or authorization
be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or
right be granted except under the condition that it shall be subject to amendment, alteration, or
repeal by the National Assembly when the public interest so requires. The State shall encourage
equity participation in public utilities by the general public. The participation of foreign investors in the
governing body of any public utility enterprise shall be limited to their proportionate share in the
capital thereof. (Emphasis supplied)
The foregoing provision in the 1973 Constitution reproduced Section 8, Article XIV of the 1935
Constitution, viz:
Section 8. No franchise, certificate, or any other form of authorization for the operation of a
public utility shall be granted except to citizens of the Philippines or to corporations or other
entities organized under the laws of the Philippines sixty per centum of the capital of which is

owned by citizens of the Philippines, nor shall such franchise, certificate, or authorization be
exclusive in character or for a longer period than fifty years. No franchise or right shall be granted to
any individual, firm, or corporation, except under the condition that it shall be subject to amendment,
alteration, or repeal by the Congress when the public interest so requires. (Emphasis supplied)
Father Joaquin G. Bernas, S.J., a leading member of the 1986 Constitutional Commission, reminds
us that the Filipinization provision in the 1987 Constitution is one of the products of the spirit of
nationalism which gripped the 1935 Constitutional Convention.25 The 1987 Constitution "provides for
the Filipinization of public utilities by requiring that any form of authorization for the operation of
public utilities should be granted only to ‘citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines at least sixty per centum of whose capital is owned by
such citizens.’ The provision is [an express] recognition of the sensitive and vital position of
public utilities both in the national economy and for national security."26 The evident purpose of
the citizenship requirement is to prevent aliens from assuming control of public utilities, which may
be inimical to the national interest.27 This specific provision explicitly reserves to Filipino citizens
control of public utilities, pursuant to an overriding economic goal of the 1987 Constitution: to
"conserve and develop our patrimony"28 and ensure "a self-reliant and independent national
economy effectively controlled by Filipinos."29
Any citizen or juridical entity desiring to operate a public utility must therefore meet the minimum
nationality requirement prescribed in Section 11, Article XII of the Constitution. Hence, for a
corporation to be granted authority to operate a public utility, at least 60 percent of its "capital" must
be owned by Filipino citizens.
The crux of the controversy is the definition of the term "capital." Does the term "capital" in Section
11, Article XII of the Constitution refer to common shares or to the total outstanding capital stock
(combined total of common and non-voting preferred shares)?
Petitioner submits that the 40 percent foreign equity limitation in domestic public utilities refers only
to common shares because such shares are entitled to vote and it is through voting that control over
a corporation is exercised. Petitioner posits that the term "capital" in Section 11, Article XII of the
Constitution refers to "the ownership of common capital stock subscribed and outstanding, which
class of shares alone, under the corporate set-up of PLDT, can vote and elect members of the board
of directors." It is undisputed that PLDT’s non-voting preferred shares are held mostly by Filipino
citizens.30 This arose from Presidential Decree No. 217,31 issued on 16 June 1973 by then President
Ferdinand Marcos, requiring every applicant of a PLDT telephone line to subscribe to non-voting
preferred shares to pay for the investment cost of installing the telephone line. 32
Petitioners-in-intervention basically reiterate petitioner’s arguments and adopt petitioner’s definition
of the term "capital."33 Petitioners-in-intervention allege that "the approximate foreign ownership of
common capital stock of PLDT x x x already amounts to at least 63.54% of the total outstanding
common stock," which means that foreigners exercise significant control over PLDT, patently
violating the 40 percent foreign equity limitation in public utilities prescribed by the Constitution.

Respondents, on the other hand, do not offer any definition of the term "capital" in Section 11, Article
XII of the Constitution. More importantly, private respondents Nazareno and Pangilinan of PLDT do
not dispute that more than 40 percent of the common shares of PLDT are held by foreigners.
In particular, respondent Nazareno’s Memorandum, consisting of 73 pages, harps mainly on the
procedural infirmities of the petition and the supposed violation of the due process rights of the
"affected foreign common shareholders." Respondent Nazareno does not deny petitioner’s
allegation of foreigners’ dominating the common shareholdings of PLDT. Nazareno stressed mainly
that the petition "seeks to divest foreign common shareholders purportedly exceeding 40% of
the total common shareholdings in PLDT of their ownership over their shares." Thus, "the
foreign natural and juridical PLDT shareholders must be impleaded in this suit so that they can be
heard."34 Essentially, Nazareno invokes denial of due process on behalf of the foreign common
shareholders.
While Nazareno does not introduce any definition of the term "capital," he states that "among the
factual assertions that need to be established to counter petitioner’s allegations is the
uniform interpretation by government agencies (such as the SEC), institutions and
corporations (such as the Philippine National Oil Company-Energy Development Corporation
or PNOC-EDC) of including both preferred shares and common shares in "controlling
interest" in view of testing compliance with the 40% constitutional limitation on foreign
ownership in public utilities."35
Similarly, respondent Manuel V. Pangilinan does not define the term "capital" in Section 11, Article
XII of the Constitution. Neither does he refute petitioner’s claim of foreigners holding more than 40
percent of PLDT’s common shares. Instead, respondent Pangilinan focuses on the procedural flaws
of the petition and the alleged violation of the due process rights of foreigners. Respondent
Pangilinan emphasizes in his Memorandum (1) the absence of this Court’s jurisdiction over the
petition; (2) petitioner’s lack of standing; (3) mootness of the petition; (4) non-availability of
declaratory relief; and (5) the denial of due process rights. Moreover, respondent Pangilinan alleges
that the issue should be whether "owners of shares in PLDT as well as owners of shares in
companies holding shares in PLDT may be required to relinquish their shares in PLDT and in those
companies without any law requiring them to surrender their shares and also without notice and
trial."
Respondent Pangilinan further asserts that "Section 11, [Article XII of the Constitution] imposes
no nationality requirement on the shareholders of the utility company as a condition for
keeping their shares in the utility company." According to him, "Section 11 does not authorize
taking one person’s property (the shareholder’s stock in the utility company) on the basis of another
party’s alleged failure to satisfy a requirement that is a condition only for that other party’s retention
of another piece of property (the utility company being at least 60% Filipino-owned to keep its
franchise)."36
The OSG, representing public respondents Secretary Margarito Teves, Undersecretary John P.
Sevilla, Commissioner Ricardo Abcede, and Chairman Fe Barin, is likewise silent on the definition of
the term "capital." In its Memorandum37 dated 24 September 2007, the OSG also limits its discussion
on the supposed procedural defects of the petition, i.e. lack of standing, lack of jurisdiction, non-

inclusion of interested parties, and lack of basis for injunction. The OSG does not present any
definition or interpretation of the term "capital" in Section 11, Article XII of the Constitution. The OSG
contends that "the petition actually partakes of a collateral attack on PLDT’s franchise as a public
utility," which in effect requires a "full-blown trial where all the parties in interest are given their day in
court."38
Respondent Francisco Ed Lim, impleaded as President and Chief Executive Officer of the Philippine
Stock Exchange (PSE), does not also define the term "capital" and seeks the dismissal of the
petition on the following grounds: (1) failure to state a cause of action against Lim; (2) the PSE
allegedly implemented its rules and required all listed companies, including PLDT, to make proper
and timely disclosures; and (3) the reliefs prayed for in the petition would adversely impact the stock
market.
In the earlier case of Fernandez v. Cojuangco, petitioner Fernandez who claimed to be a stockholder
of record of PLDT, contended that the term "capital" in the 1987 Constitution refers to shares entitled
to vote or the common shares. Fernandez explained thus:
The forty percent (40%) foreign equity limitation in public utilities prescribed by the Constitution
refers to ownership of shares of stock entitled to vote, i.e., common shares, considering that it is
through voting that control is being exercised. x x x
Obviously, the intent of the framers of the Constitution in imposing limitations and restrictions on fully
nationalized and partially nationalized activities is for Filipino nationals to be always in control of the
corporation undertaking said activities. Otherwise, if the Trial Court’s ruling upholding respondents’
arguments were to be given credence, it would be possible for the ownership structure of a public
utility corporation to be divided into one percent (1%) common stocks and ninety-nine percent (99%)
preferred stocks. Following the Trial Court’s ruling adopting respondents’ arguments, the common
shares can be owned entirely by foreigners thus creating an absurd situation wherein foreigners,
who are supposed to be minority shareholders, control the public utility corporation.
xxxx
Thus, the 40% foreign ownership limitation should be interpreted to apply to both the beneficial
ownership and the controlling interest.
xxxx
Clearly, therefore, the forty percent (40%) foreign equity limitation in public utilities prescribed by the
Constitution refers to ownership of shares of stock entitled to vote, i.e., common shares.
Furthermore, ownership of record of shares will not suffice but it must be shown that the legal and
beneficial ownership rests in the hands of Filipino citizens. Consequently, in the case of petitioner
PLDT, since it is already admitted that the voting interests of foreigners which would gain entry to
petitioner PLDT by the acquisition of SMART shares through the Questioned Transactions is
equivalent to 82.99%, and the nominee arrangements between the foreign principals and the Filipino
owners is likewise admitted, there is, therefore, a violation of Section 11, Article XII of the
Constitution.

Parenthetically, the Opinions dated February 15, 1988 and April 14, 1987 cited by the Trial Court to
support the proposition that the meaning of the word "capital" as used in Section 11, Article XII of the
Constitution allegedly refers to the sum total of the shares subscribed and paid-in by the shareholder
and it allegedly is immaterial how the stock is classified, whether as common or preferred, cannot
stand in the face of a clear legislative policy as stated in the FIA which took effect in 1991 or way
after said opinions were rendered, and as clarified by the above-quoted Amendments. In this regard,
suffice it to state that as between the law and an opinion rendered by an administrative agency, the
law indubitably prevails. Moreover, said Opinions are merely advisory and cannot prevail over the
clear intent of the framers of the Constitution.
In the same vein, the SEC’s construction of Section 11, Article XII of the Constitution is at best
merely advisory for it is the courts that finally determine what a law means. 39
On the other hand, respondents therein, Antonio O. Cojuangco, Manuel V. Pangilinan, Carlos A.
Arellano, Helen Y. Dee, Magdangal B. Elma, Mariles Cacho-Romulo, Fr. Bienvenido F. Nebres, Ray
C. Espinosa, Napoleon L. Nazareno, Albert F. Del Rosario, and Orlando B. Vea, argued that the term
"capital" in Section 11, Article XII of the Constitution includes preferred shares since the Constitution
does not distinguish among classes of stock, thus:
16. The Constitution applies its foreign ownership limitation on the corporation’s "capital," without
distinction as to classes of shares. x x x
In this connection, the Corporation Code – which was already in force at the time the present (1987)
Constitution was drafted – defined outstanding capital stock as follows:
Section 137. Outstanding capital stock defined. – The term "outstanding capital stock", as used in
this Code, means the total shares of stock issued under binding subscription agreements to
subscribers or stockholders, whether or not fully or partially paid, except treasury shares.
Section 137 of the Corporation Code also does not distinguish between common and preferred
shares, nor exclude either class of shares, in determining the outstanding capital stock (the "capital")
of a corporation. Consequently, petitioner’s suggestion to reckon PLDT’s foreign equity only on the
basis of PLDT’s outstanding common shares is without legal basis. The language of the Constitution
should be understood in the sense it has in common use.
xxxx
17. But even assuming that resort to the proceedings of the Constitutional Commission is necessary,
there is nothing in the Record of the Constitutional Commission (Vol. III) – which petitioner
misleadingly cited in the Petition x x x – which supports petitioner’s view that only common shares
should form the basis for computing a public utility’s foreign equity.
xxxx
18. In addition, the SEC – the government agency primarily responsible for implementing the
Corporation Code, and which also has the responsibility of ensuring compliance with the

Constitution’s foreign equity restrictions as regards nationalized activities x x x – has categorically
ruled that both common and preferred shares are properly considered in determining outstanding
capital stock and the nationality composition thereof. 40
We agree with petitioner and petitioners-in-intervention. The term "capital" in Section 11, Article XII of
the Constitution refers only to shares of stock entitled to vote in the election of directors, and thus in
the present case only to common shares,41 and not to the total outstanding capital stock comprising
both common and non-voting preferred shares.
The Corporation Code of the Philippines42 classifies shares as common or preferred, thus:
Sec. 6. Classification of shares. - The shares of stock of stock corporations may be divided into
classes or series of shares, or both, any of which classes or series of shares may have such rights,
privileges or restrictions as may be stated in the articles of incorporation: Provided, That no share
may be deprived of voting rights except those classified and issued as "preferred" or
"redeemable" shares, unless otherwise provided in this Code: Provided, further, That there shall
always be a class or series of shares which have complete voting rights. Any or all of the shares or
series of shares may have a par value or have no par value as may be provided for in the articles of
incorporation: Provided, however, That banks, trust companies, insurance companies, public utilities,
and building and loan associations shall not be permitted to issue no-par value shares of stock.
Preferred shares of stock issued by any corporation may be given preference in the distribution of
the assets of the corporation in case of liquidation and in the distribution of dividends, or such other
preferences as may be stated in the articles of incorporation which are not violative of the provisions
of this Code: Provided, That preferred shares of stock may be issued only with a stated par value.
The Board of Directors, where authorized in the articles of incorporation, may fix the terms and
conditions of preferred shares of stock or any series thereof: Provided, That such terms and
conditions shall be effective upon the filing of a certificate thereof with the Securities and Exchange
Commission.
Shares of capital stock issued without par value shall be deemed fully paid and non-assessable and
the holder of such shares shall not be liable to the corporation or to its creditors in respect thereto:
Provided; That shares without par value may not be issued for a consideration less than the value of
five (P5.00) pesos per share: Provided, further, That the entire consideration received by the
corporation for its no-par value shares shall be treated as capital and shall not be available for
distribution as dividends.
A corporation may, furthermore, classify its shares for the purpose of insuring compliance with
constitutional or legal requirements.
Except as otherwise provided in the articles of incorporation and stated in the certificate of stock,
each share shall be equal in all respects to every other share.
Where the articles of incorporation provide for non-voting shares in the cases allowed by this Code,
the holders of such shares shall nevertheless be entitled to vote on the following matters:

1. Amendment of the articles of incorporation;
2. Adoption and amendment of by-laws;
3. Sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of
the corporate property;
4. Incurring, creating or increasing bonded indebtedness;
5. Increase or decrease of capital stock;
6. Merger or consolidation of the corporation with another corporation or other corporations;
7. Investment of corporate funds in another corporation or business in accordance with this
Code; and
8. Dissolution of the corporation.
Except as provided in the immediately preceding paragraph, the vote necessary to approve a
particular corporate act as provided in this Code shall be deemed to refer only to stocks with voting
rights.
Indisputably, one of the rights of a stockholder is the right to participate in the control or management
of the corporation.43 This is exercised through his vote in the election of directors because it is the
board of directors that controls or manages the corporation. 44 In the absence of provisions in the
articles of incorporation denying voting rights to preferred shares, preferred shares have the same
voting rights as common shares. However, preferred shareholders are often excluded from any
control, that is, deprived of the right to vote in the election of directors and on other matters, on the
theory that the preferred shareholders are merely investors in the corporation for income in the same
manner as bondholders.45 In fact, under the Corporation Code only preferred or redeemable shares
can be deprived of the right to vote.46 Common shares cannot be deprived of the right to vote in any
corporate meeting, and any provision in the articles of incorporation restricting the right of common
shareholders to vote is invalid.47
Considering that common shares have voting rights which translate to control, as opposed to
preferred shares which usually have no voting rights, the term "capital" in Section 11, Article XII of
the Constitution refers only to common shares. However, if the preferred shares also have the right
to vote in the election of directors, then the term "capital" shall include such preferred shares
because the right to participate in the control or management of the corporation is exercised through
the right to vote in the election of directors. In short, the term "capital" in Section 11, Article XII of
the Constitution refers only to shares of stock that can vote in the election of directors.
This interpretation is consistent with the intent of the framers of the Constitution to place in the hands
of Filipino citizens the control and management of public utilities. As revealed in the deliberations of
the Constitutional Commission, "capital" refers to the voting stock or controlling interest of a
corporation, to wit:

MR. NOLLEDO. In Sections 3, 9 and 15, the Committee stated local or Filipino equity and foreign
equity; namely, 60-40 in Section 3, 60-40 in Section 9 and 2/3-1/3 in Section 15.
MR. VILLEGAS. That is right.
MR. NOLLEDO. In teaching law, we are always faced with this question: "Where do we base the
equity requirement, is it on the authorized capital stock, on the subscribed capital stock, or on the
paid-up capital stock of a corporation"? Will the Committee please enlighten me on this?
MR. VILLEGAS. We have just had a long discussion with the members of the team from the UP Law
Center who provided us a draft. The phrase that is contained here which we adopted from the
UP draft is "60 percent of voting stock."
MR. NOLLEDO. That must be based on the subscribed capital stock, because unless declared
delinquent, unpaid capital stock shall be entitled to vote.
MR. VILLEGAS. That is right.
MR. NOLLEDO. Thank you.
With respect to an investment by one corporation in another corporation, say, a corporation with 6040 percent equity invests in another corporation which is permitted by the Corporation Code, does
the Committee adopt the grandfather rule?
MR. VILLEGAS. Yes, that is the understanding of the Committee.
MR. NOLLEDO. Therefore, we need additional Filipino capital?
MR. VILLEGAS. Yes.48
xxxx
MR. AZCUNA. May I be clarified as to that portion that was accepted by the Committee.
MR. VILLEGAS. The portion accepted by the Committee is the deletion of the phrase "voting stock
or controlling interest."
MR. AZCUNA. Hence, without the Davide amendment, the committee report would read:
"corporations or associations at least sixty percent of whose CAPITAL is owned by such citizens."
MR. VILLEGAS. Yes.
MR. AZCUNA. So if the Davide amendment is lost, we are stuck with 60 percent of the capital to be
owned by citizens.
MR. VILLEGAS. That is right.

MR. AZCUNA. But the control can be with the foreigners even if they are the minority. Let us
say 40 percent of the capital is owned by them, but it is the voting capital, whereas, the
Filipinos own the nonvoting shares. So we can have a situation where the corporation is
controlled by foreigners despite being the minority because they have the voting capital. That
is the anomaly that would result here.
MR. BENGZON. No, the reason we eliminated the word "stock" as stated in the 1973 and 1935
Constitutions is that according to Commissioner Rodrigo, there are associations that do not
have stocks. That is why we say "CAPITAL."
MR. AZCUNA. We should not eliminate the phrase "controlling interest."
MR. BENGZON. In the case of stock corporations, it is assumed.49 (Emphasis supplied)
Thus, 60 percent of the "capital" assumes, or should result in, "controlling interest" in the
corporation. Reinforcing this interpretation of the term "capital," as referring to controlling interest or
shares entitled to vote, is the definition of a "Philippine national" in the Foreign Investments Act of
1991,50 to wit:
SEC. 3. Definitions. - As used in this Act:
a. The term "Philippine national" shall mean a citizen of the Philippines; or a domestic partnership or
association wholly owned by citizens of the Philippines; or a corporation organized under the laws
of the Philippines of which at least sixty percent (60%) of the capital stock
outstanding and entitled to vote is owned and held by citizens of the Philippines; or a
corporation organized abroad and registered as doing business in the Philippines under the
Corporation Code of which one hundred percent (100%) of the capital stock outstanding and entitled
to vote is wholly owned by Filipinos or a trustee of funds for pension or other employee retirement or
separation benefits, where the trustee is a Philippine national and at least sixty percent (60%) of the
fund will accrue to the benefit of Philippine nationals: Provided, That where a corporation and its
non-Filipino stockholders own stocks in a Securities and Exchange Commission (SEC) registered
enterprise, at least sixty percent (60%) of the capital stock outstanding and entitled to vote of each of
both corporations must be owned and held by citizens of the Philippines and at least sixty percent
(60%) of the members of the Board of Directors of each of both corporations must be citizens of the
Philippines, in order that the corporation, shall be considered a "Philippine national." (Emphasis
supplied)
In explaining the definition of a "Philippine national," the Implementing Rules and Regulations of the
Foreign Investments Act of 1991 provide:
b. "Philippine national" shall mean a citizen of the Philippines or a domestic partnership or
association wholly owned by the citizens of the Philippines; or a corporation organized under the
laws of the Philippines of which at least sixty percent [60%] of the capital stock outstanding
and entitled to vote is owned and held by citizens of the Philippines; or a trustee of funds for
pension or other employee retirement or separation benefits, where the trustee is a Philippine
national and at least sixty percent [60%] of the fund will accrue to the benefit of the Philippine

nationals; Provided, that where a corporation its non-Filipino stockholders own stocks in a Securities
and Exchange Commission [SEC] registered enterprise, at least sixty percent [60%] of the capital
stock outstanding and entitled to vote of both corporations must be owned and held by citizens of the
Philippines and at least sixty percent [60%] of the members of the Board of Directors of each of both
corporation must be citizens of the Philippines, in order that the corporation shall be considered a
Philippine national. The control test shall be applied for this purpose.
Compliance with the required Filipino ownership of a corporation shall be determined on the
basis of outstanding capital stock whether fully paid or not, but only such stocks which are
generally entitled to vote are considered.
For stocks to be deemed owned and held by Philippine citizens or Philippine nationals, mere
legal title is not enough to meet the required Filipino equity. Full beneficial ownership of the
stocks, coupled with appropriate voting rights is essential. Thus, stocks, the voting rights of
which have been assigned or transferred to aliens cannot be considered held by Philippine
citizens or Philippine nationals.
Individuals or juridical entities not meeting the aforementioned qualifications are considered
as non-Philippine nationals. (Emphasis supplied)
Mere legal title is insufficient to meet the 60 percent Filipino-owned "capital" required in the
Constitution. Full beneficial ownership of 60 percent of the outstanding capital stock, coupled with 60
percent of the voting rights, is required. The legal and beneficial ownership of 60 percent of the
outstanding capital stock must rest in the hands of Filipino nationals in accordance with the
constitutional mandate. Otherwise, the corporation is "considered as non-Philippine national[s]."
Under Section 10, Article XII of the Constitution, Congress may "reserve to citizens of the Philippines
or to corporations or associations at least sixty per centum of whose capital is owned by such
citizens, or such higher percentage as Congress may prescribe, certain areas of investments." Thus,
in numerous laws Congress has reserved certain areas of investments to Filipino citizens or to
corporations at least sixty percent of the "capital" of which is owned by Filipino citizens. Some of
these laws are: (1) Regulation of Award of Government Contracts or R.A. No. 5183; (2) Philippine
Inventors Incentives Act or R.A. No. 3850; (3) Magna Carta for Micro, Small and Medium Enterprises
or R.A. No. 6977; (4) Philippine Overseas Shipping Development Act or R.A. No. 7471; (5) Domestic
Shipping Development Act of 2004 or R.A. No. 9295; (6) Philippine Technology Transfer Act of 2009
or R.A. No. 10055; and (7) Ship Mortgage Decree or P.D. No. 1521. Hence, the term "capital" in
Section 11, Article XII of the Constitution is also used in the same context in numerous
laws reserving certain areas of investments to Filipino citizens.
To construe broadly the term "capital" as the total outstanding capital stock, including both common
and non-voting preferred shares, grossly contravenes the intent and letter of the Constitution that the
"State shall develop a self-reliant and independent national economy effectively controlled by
Filipinos." A broad definition unjustifiably disregards who owns the all-important voting stock, which
necessarily equates to control of the public utility.

We shall illustrate the glaring anomaly in giving a broad definition to the term "capital." Let us
assume that a corporation has 100 common shares owned by foreigners and 1,000,000 non-voting
preferred shares owned by Filipinos, with both classes of share having a par value of one peso
(P1.00) per share. Under the broad definition of the term "capital," such corporation would be
considered compliant with the 40 percent constitutional limit on foreign equity of public utilities since
the overwhelming majority, or more than 99.999 percent, of the total outstanding capital stock is
Filipino owned. This is obviously absurd.
In the example given, only the foreigners holding the common shares have voting rights in the
election of directors, even if they hold only 100 shares. The foreigners, with a minuscule equity of
less than 0.001 percent, exercise control over the public utility. On the other hand, the Filipinos,
holding more than 99.999 percent of the equity, cannot vote in the election of directors and hence,
have no control over the public utility. This starkly circumvents the intent of the framers of the
Constitution, as well as the clear language of the Constitution, to place the control of public utilities in
the hands of Filipinos. It also renders illusory the State policy of an independent national
economy effectively controlled by Filipinos.
The example given is not theoretical but can be found in the real world, and in fact exists in the
present case.
Holders of PLDT preferred shares are explicitly denied of the right to vote in the election of directors.
PLDT’s Articles of Incorporation expressly state that "the holders of Serial Preferred Stock shall
not be entitled to vote at any meeting of the stockholders for the election of directors or for
any other purpose or otherwise participate in any action taken by the corporation or its
stockholders, or to receive notice of any meeting of stockholders." 51
On the other hand, holders of common shares are granted the exclusive right to vote in the election
of directors. PLDT’s Articles of Incorporation52 state that "each holder of Common Capital Stock shall
have one vote in respect of each share of such stock held by him on all matters voted upon by the
stockholders, and the holders of Common Capital Stock shall have the exclusive right to vote
for the election of directors and for all other purposes."53
In short, only holders of common shares can vote in the election of directors, meaning only common
shareholders exercise control over PLDT. Conversely, holders of preferred shares, who have no
voting rights in the election of directors, do not have any control over PLDT. In fact, under PLDT’s
Articles of Incorporation, holders of common shares have voting rights for all purposes, while holders
of preferred shares have no voting right for any purpose whatsoever.
It must be stressed, and respondents do not dispute, that foreigners hold a majority of the
common shares of PLDT. In fact, based on PLDT’s 2010 General Information Sheet (GIS), 54 which is
a document required to be submitted annually to the Securities and Exchange
Commission,55 foreigners hold 120,046,690 common shares of PLDT whereas Filipinos hold only
66,750,622 common shares.56 In other words, foreigners hold 64.27% of the total number of PLDT’s
common shares, while Filipinos hold only 35.73%. Since holding a majority of the common shares
equates to control, it is clear that foreigners exercise control over PLDT. Such amount of control

unmistakably exceeds the allowable 40 percent limit on foreign ownership of public utilities expressly
mandated in Section 11, Article XII of the Constitution.
Moreover, the Dividend Declarations of PLDT for 2009,57 as submitted to the SEC, shows that per
share the SIP58 preferred shares earn a pittance in dividends compared to the common shares.
PLDT declared dividends for the common shares at P70.00 per share, while the declared dividends
for the preferred shares amounted to a measly P1.00 per share.59 So the preferred shares not only
cannot vote in the election of directors, they also have very little and obviously negligible dividend
earning capacity compared to common shares.
As shown in PLDT’s 2010 GIS,60 as submitted to the SEC, the par value of PLDT common shares
is P5.00 per share, whereas the par value of preferred shares is P10.00 per share. In other words,
preferred shares have twice the par value of common shares but cannot elect directors and have
only 1/70 of the dividends of common shares. Moreover, 99.44% of the preferred shares are owned
by Filipinos while foreigners own only a minuscule 0.56% of the preferred shares. 61 Worse, preferred
shares constitute 77.85% of the authorized capital stock of PLDT while common shares constitute
only 22.15%.62 This undeniably shows that beneficial interest in PLDT is not with the non-voting
preferred shares but with the common shares, blatantly violating the constitutional requirement of 60
percent Filipino control and Filipino beneficial ownership in a public utility.
The legal and beneficial ownership of 60 percent of the outstanding capital stock must rest in the
hands of Filipinos in accordance with the constitutional mandate. Full beneficial ownership of 60
percent of the outstanding capital stock, coupled with 60 percent of the voting rights, is
constitutionally required for the State’s grant of authority to operate a public utility. The undisputed
fact that the PLDT preferred shares, 99.44% owned by Filipinos, are non-voting and earn only 1/70
of the dividends that PLDT common shares earn, grossly violates the constitutional requirement of
60 percent Filipino control and Filipino beneficial ownership of a public utility.
In short, Filipinos hold less than 60 percent of the voting stock, and earn less than 60 percent
of the dividends, of PLDT. This directly contravenes the express command in Section 11, Article XII
of the Constitution that "[n]o franchise, certificate, or any other form of authorization for the operation
of a public utility shall be granted except to x x x corporations x x x organized under the laws of the
Philippines, at least sixty per centum of whose capital is owned by such citizens x x x."
To repeat, (1) foreigners own 64.27% of the common shares of PLDT, which class of shares
exercises the soleright to vote in the election of directors, and thus exercise control over PLDT; (2)
Filipinos own only 35.73% of PLDT’s common shares, constituting a minority of the voting stock, and
thus do not exercise control over PLDT; (3) preferred shares, 99.44% owned by Filipinos, have no
voting rights; (4) preferred shares earn only 1/70 of the dividends that common shares earn; 63 (5)
preferred shares have twice the par value of common shares; and (6) preferred shares constitute
77.85% of the authorized capital stock of PLDT and common shares only 22.15%. This kind of
ownership and control of a public utility is a mockery of the Constitution.
Incidentally, the fact that PLDT common shares with a par value of P5.00 have a current stock
market value ofP2,328.00 per share,64 while PLDT preferred shares with a par value of P10.00 per
share have a current stock market value ranging from only P10.92 to P11.06 per share,65 is a glaring

confirmation by the market that control and beneficial ownership of PLDT rest with the common
shares, not with the preferred shares.
Indisputably, construing the term "capital" in Section 11, Article XII of the Constitution to include both
voting and non-voting shares will result in the abject surrender of our telecommunications industry to
foreigners, amounting to a clear abdication of the State’s constitutional duty to limit control of public
utilities to Filipino citizens. Such an interpretation certainly runs counter to the constitutional
provision reserving certain areas of investment to Filipino citizens, such as the exploitation of natural
resources as well as the ownership of land, educational institutions and advertising businesses. The
Court should never open to foreign control what the Constitution has expressly reserved to Filipinos
for that would be a betrayal of the Constitution and of the national interest. The Court must perform
its solemn duty to defend and uphold the intent and letter of the Constitution to ensure, in the words
of the Constitution, "a self-reliant and independent national economy effectively controlled by
Filipinos."
Section 11, Article XII of the Constitution, like other provisions of the Constitution expressly reserving
to Filipinosspecific areas of investment, such as the development of natural resources and
ownership of land, educational institutions and advertising business, is self-executing. There is no
need for legislation to implement these self-executing provisions of the Constitution. The rationale
why these constitutional provisions are self-executing was explained in Manila Prince Hotel v.
GSIS,66 thus:
x x x Hence, unless it is expressly provided that a legislative act is necessary to enforce a
constitutional mandate, the presumption now is that all provisions of the constitution are selfexecuting. If the constitutional provisions are treated as requiring legislation instead of selfexecuting, the legislature would have the power to ignore and practically nullify the mandate of the
fundamental law. This can be cataclysmic. That is why the prevailing view is, as it has always been,
that —
. . . in case of doubt, the Constitution should be considered self-executing rather than non-selfexecuting. . . .Unless the contrary is clearly intended, the provisions of the Constitution
should be considered self-executing, as a contrary rule would give the legislature discretion
to determine when, or whether, they shall be effective. These provisions would be subordinated
to the will of the lawmaking body, which could make them entirely meaningless by simply refusing to
pass the needed implementing statute. (Emphasis supplied)
In Manila Prince Hotel, even the Dissenting Opinion of then Associate Justice Reynato S. Puno, later
Chief Justice, agreed that constitutional provisions are presumed to be self-executing. Justice Puno
stated:
Courts as a rule consider the provisions of the Constitution as self-executing, rather than as
requiring future legislation for their enforcement. The reason is not difficult to discern. For if they are
not treated as self-executing, the mandate of the fundamental law ratified by the sovereign
people can be easily ignored and nullified by Congress. Suffused with wisdom of the ages is
the unyielding rule that legislative actions may give breath to constitutional rights but
congressional inaction should not suffocate them.

Thus, we have treated as self-executing the provisions in the Bill of Rights on arrests, searches and
seizures, the rights of a person under custodial investigation, the rights of an accused, and the
privilege against self-incrimination. It is recognized that legislation is unnecessary to enable courts to
effectuate constitutional provisions guaranteeing the fundamental rights of life, liberty and the
protection of property. The same treatment is accorded to constitutional provisions forbidding the
taking or damaging of property for public use without just compensation. (Emphasis supplied)
Thus, in numerous cases,67 this Court, even in the absence of implementing legislation, applied
directly the provisions of the 1935, 1973 and 1987 Constitutions limiting land ownership to Filipinos.
In Soriano v. Ong Hoo,68this Court ruled:
x x x As the Constitution is silent as to the effects or consequences of a sale by a citizen of his land
to an alien, and as both the citizen and the alien have violated the law, none of them should have a
recourse against the other, and it should only be the State that should be allowed to intervene and
determine what is to be done with the property subject of the violation. We have said that what the
State should do or could do in such matters is a matter of public policy, entirely beyond the scope of
judicial authority. (Dinglasan, et al. vs. Lee Bun Ting, et al., 6 G. R. No. L-5996, June 27,
1956.) While the legislature has not definitely decided what policy should be followed in
cases of violations against the constitutional prohibition, courts of justice cannot go beyond
by declaring the disposition to be null and void as violative of the Constitution. x x x
(Emphasis supplied)
To treat Section 11, Article XII of the Constitution as not self-executing would mean that since the
1935 Constitution, or over the last 75 years, not one of the constitutional provisions expressly
reserving specific areas of investments to corporations, at least 60 percent of the "capital" of which is
owned by Filipinos, was enforceable. In short, the framers of the 1935, 1973 and 1987 Constitutions
miserably failed to effectively reserve to Filipinos specific areas of investment, like the operation by
corporations of public utilities, the exploitation by corporations of mineral resources, the ownership
by corporations of real estate, and the ownership of educational institutions. All the legislatures that
convened since 1935 also miserably failed to enact legislations to implement these vital
constitutional provisions that determine who will effectively control the national economy, Filipinos or
foreigners. This Court cannot allow such an absurd interpretation of the Constitution.
This Court has held that the SEC "has both regulatory and adjudicative functions." 69 Under its
regulatory functions, the SEC can be compelled by mandamus to perform its statutory duty when it
unlawfully neglects to perform the same. Under its adjudicative or quasi-judicial functions, the SEC
can be also be compelled by mandamus to hear and decide a possible violation of any law it
administers or enforces when it is mandated by law to investigate such violation.
1awphi1

Under Section 17(4)70 of the Corporation Code, the SEC has the regulatory function to reject or
disapprove the Articles of Incorporation of any corporation where "the required percentage of
ownership of the capital stock to be owned by citizens of the Philippines has not been
complied with as required by existing laws or the Constitution." Thus, the SEC is the
government agency tasked with the statutory duty to enforce the nationality requirement prescribed
in Section 11, Article XII of the Constitution on the ownership of public utilities. This Court, in a
petition for declaratory relief that is treated as a petition for mandamus as in the present case, can

direct the SEC to perform its statutory duty under the law, a duty that the SEC has apparently
unlawfully neglected to do based on the 2010 GIS that respondent PLDT submitted to the SEC.
Under Section 5(m) of the Securities Regulation Code, 71 the SEC is vested with the "power and
function" to "suspend or revoke, after proper notice and hearing, the franchise or certificate of
registration of corporations, partnerships or associations, upon any of the grounds provided
by law." The SEC is mandated under Section 5(d) of the same Code with the "power and function"
to "investigate x x x the activities of persons to ensure compliance" with the laws and
regulations that SEC administers or enforces. The GIS that all corporations are required to submit to
SEC annually should put the SEC on guard against violations of the nationality requirement
prescribed in the Constitution and existing laws. This Court can compel the SEC, in a petition for
declaratory relief that is treated as a petition for mandamus as in the present case, to hear and
decide a possible violation of Section 11, Article XII of the Constitution in view of the ownership
structure of PLDT’s voting shares, as admitted by respondents and as stated in PLDT’s 2010 GIS
that PLDT submitted to SEC.
WHEREFORE, we PARTLY GRANT the petition and rule that the term "capital" in Section 11, Article
XII of the 1987 Constitution refers only to shares of stock entitled to vote in the election of directors,
and thus in the present case only to common shares, and not to the total outstanding capital stock
(common and non-voting preferred shares). Respondent Chairperson of the Securities and
Exchange Commission is DIRECTED to apply this definition of the term "capital" in determining the
extent of allowable foreign ownership in respondent Philippine Long Distance Telephone Company,
and if there is a violation of Section 11, Article XII of the Constitution, to impose the appropriate
sanctions under the law.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 161872

April 13, 2004

REV. ELLY CHAVEZ PAMATONG, ESQUIRE, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
RESOLUTION
TINGA, J.:
Petitioner Rev. Elly Velez Pamatong filed his Certificate of Candidacy for President on December 17,
2003. Respondent Commission on Elections (COMELEC) refused to give due course to
petitioner’s Certificate of Candidacy in its Resolution No. 6558 dated January 17, 2004. The
decision, however, was not unanimous since Commissioners Luzviminda G. Tancangco and Mehol

K. Sadain voted to include petitioner as they believed he had parties or movements to back up his
candidacy.
On January 15, 2004, petitioner moved for reconsideration of Resolution No.
6558. Petitioner’s Motion for Reconsideration was docketed as SPP (MP) No. 04-001. The
COMELEC, acting on petitioner’s Motion for Reconsideration and on similar motions filed by other
aspirants for national elective positions, denied the same under the aegis of Omnibus Resolution
No. 6604 dated February 11, 2004. The COMELEC declared petitioner and thirty-five (35) others
nuisance candidates who could not wage a nationwide campaign and/or are not nominated by a
political party or are not supported by a registered political party with a national constituency.
Commissioner Sadain maintained his vote for petitioner. By then, Commissioner Tancangco had
retired.
In this Petition For Writ of Certiorari, petitioner seeks to reverse the resolutions which were allegedly
rendered in violation of his right to "equal access to opportunities for public service" under Section
26, Article II of the 1987
Constitution,1 by limiting the number of qualified candidates only to those who can afford to wage a
nationwide campaign and/or are nominated by political parties. In so doing, petitioner argues that the
COMELEC indirectly amended the constitutional provisions on the electoral process and limited the
power of the sovereign people to choose their leaders. The COMELEC supposedly erred in
disqualifying him since he is the most qualified among all the presidential candidates, i.e., he
possesses all the constitutional and legal qualifications for the office of the president, he is capable
of waging a national campaign since he has numerous national organizations under his leadership,
he also has the capacity to wage an international campaign since he has practiced law in other
countries, and he has a platform of government. Petitioner likewise attacks the validity of the form for
theCertificate of Candidacy prepared by the COMELEC. Petitioner claims that the form does not
provide clear and reasonable guidelines for determining the qualifications of candidates since it does
not ask for the candidate’s bio-data and his program of government.
First, the constitutional and legal dimensions involved.
Implicit in the petitioner’s invocation of the constitutional provision ensuring "equal access to
opportunities for public office" is the claim that there is a constitutional right to run for or hold public
office and, particularly in his case, to seek the presidency. There is none. What is recognized is
merely a privilege subject to limitations imposed by law. Section 26, Article II of the Constitution
neither bestows such a right nor elevates the privilege to the level of an enforceable right. There is
nothing in the plain language of the provision which suggests such a thrust or justifies an
interpretation of the sort.
The "equal access" provision is a subsumed part of Article II of the Constitution, entitled "Declaration
of Principles and State Policies." The provisions under the Article are generally considered not selfexecuting,2 and there is no plausible reason for according a different treatment to the "equal access"
provision. Like the rest of the policies enumerated in Article II, the provision does not contain any
judicially enforceable constitutional right but merely specifies a guideline for legislative or executive
action.3 The disregard of the provision does not give rise to any cause of action before the courts. 4

An inquiry into the intent of the framers5 produces the same determination that the provision is not
self-executory. The original wording of the present Section 26, Article II had read, "The State shall
broaden opportunities to public office and prohibit public dynasties." 6 Commissioner (now Chief
Justice) Hilario Davide, Jr. successfully brought forth an amendment that changed the word
"broaden" to the phrase "ensure equal access," and the substitution of the word "office" to "service."
He explained his proposal in this wise:
I changed the word "broaden" to "ENSURE EQUAL ACCESS TO" because what is important
would be equal access to the opportunity. If you broaden, it would necessarily mean that
the government would be mandated to create as many offices as are possible to
accommodate as many people as are also possible. That is the meaning of broadening
opportunities to public service. So, in order that we should not mandate the State to
make the government the number one employer and to limit offices only to what may
be necessary and expedient yet offering equal opportunities to access to it, I change
the word "broaden."7 (emphasis supplied)
Obviously, the provision is not intended to compel the State to enact positive measures that would
accommodate as many people as possible into public office. The approval of the "Davide
amendment" indicates the design of the framers to cast the provision as simply enunciatory of a
desired policy objective and not reflective of the imposition of a clear State burden.
Moreover, the provision as written leaves much to be desired if it is to be regarded as the source of
positive rights. It is difficult to interpret the clause as operative in the absence of legislation since its
effective means and reach are not properly defined. Broadly written, the myriad of claims that can be
subsumed under this rubric appear to be entirely open-ended.8 Words and phrases such as "equal
access," "opportunities," and "public service" are susceptible to countless interpretations owing to
their inherent impreciseness. Certainly, it was not the intention of the framers to inflict on the people
an operative but amorphous foundation from which innately unenforceable rights may be sourced.
As earlier noted, the privilege of equal access to opportunities to public office may be subjected to
limitations. Some valid limitations specifically on the privilege to seek elective office are found in the
provisions9 of the Omnibus Election Code on "Nuisance Candidates" and COMELEC Resolution No.
645210 dated December 10, 2002 outlining the instances wherein the COMELEC may motu
proprio refuse to give due course to or cancel aCertificate of Candidacy.
As long as the limitations apply to everybody equally without discrimination, however, the equal
access clause is not violated. Equality is not sacrificed as long as the burdens engendered by the
limitations are meant to be borne by any one who is minded to file a certificate of candidacy. In the
case at bar, there is no showing that any person is exempt from the limitations or the burdens which
they create.
Significantly, petitioner does not challenge the constitutionality or validity of Section 69 of the
Omnibus Election Code and COMELEC Resolution No. 6452 dated 10 December 2003. Thus, their
presumed validity stands and has to be accorded due weight.

Clearly, therefore, petitioner’s reliance on the equal access clause in Section 26, Article II of the
Constitution is misplaced.
The rationale behind the prohibition against nuisance candidates and the disqualification of
candidates who have not evinced a bona fide intention to run for office is easy to divine. The State
has a compelling interest to ensure that its electoral exercises are rational, objective, and orderly.
Towards this end, the State takes into account the practical considerations in conducting elections.
Inevitably, the greater the number of candidates, the greater the opportunities for logistical
confusion, not to mention the increased allocation of time and resources in preparation for the
election. These practical difficulties should, of course, never exempt the State from the conduct of a
mandated electoral exercise. At the same time, remedial actions should be available to alleviate
these logistical hardships, whenever necessary and proper. Ultimately, a disorderly election is not
merely a textbook example of inefficiency, but a rot that erodes faith in our democratic institutions. As
the United States Supreme Court held:
[T]here is surely an important state interest in requiring some preliminary showing of a
significant modicum of support before printing the name of a political organization and its
candidates on the ballot – the interest, if no other, in avoiding confusion, deception and even
frustration of the democratic [process].11
The COMELEC itself recognized these practical considerations when it promulgated Resolution No.
6558 on 17 January 2004, adopting the study Memorandum of its Law Department dated 11 January
2004. As observed in the COMELEC’s Comment:
There is a need to limit the number of candidates especially in the case of candidates for
national positions because the election process becomes a mockery even if those who
cannot clearly wage a national campaign are allowed to run. Their names would have to be
printed in the Certified List of Candidates, Voters Information Sheet and the Official Ballots.
These would entail additional costs to the government. For the official ballots in automated
counting and canvassing of votes, an additional page would amount to more or less FOUR
HUNDRED FIFTY MILLION PESOS (P450,000,000.00).
xxx[I]t serves no practical purpose to allow those candidates to continue if they cannot wage
a decent campaign enough to project the prospect of winning, no matter how slim. 12
The preparation of ballots is but one aspect that would be affected by allowance of "nuisance
candidates" to run in the elections. Our election laws provide various entitlements for candidates for
public office, such as watchers in every polling place, 13 watchers in the board of canvassers,14 or
even the receipt of electoral contributions.15Moreover, there are election rules and regulations the
formulations of which are dependent on the number of candidates in a given election.
Given these considerations, the ignominious nature of a nuisance candidacy becomes even more
galling. The organization of an election with bona fide candidates standing is onerous enough. To
add into the mix candidates with no serious intentions or capabilities to run a viable campaign would
actually impair the electoral process. This is not to mention the candidacies which are palpably
ridiculous so as to constitute a one-note joke. The poll body would be bogged by irrelevant minutiae

covering every step of the electoral process, most probably posed at the instance of these nuisance
candidates. It would be a senseless sacrifice on the part of the State.
Owing to the superior interest in ensuring a credible and orderly election, the State could exclude
nuisance candidates and need not indulge in, as the song goes, "their trips to the moon on
gossamer wings."
The Omnibus Election Code and COMELEC Resolution No. 6452 are cognizant of the compelling
State interest to ensure orderly and credible elections by excising impediments thereto, such as
nuisance candidacies that distract and detract from the larger purpose. The COMELEC is mandated
by the Constitution with the administration of elections16 and endowed with considerable latitude in
adopting means and methods that will ensure the promotion of free, orderly and honest
elections.17 Moreover, the Constitution guarantees that only bona fidecandidates for public office
shall be free from any form of harassment and discrimination.18 The determination ofbona
fide candidates is governed by the statutes, and the concept, to our mind is, satisfactorily defined in
the Omnibus Election Code.
Now, the needed factual premises.
However valid the law and the COMELEC issuance involved are, their proper application in the case
of the petitioner cannot be tested and reviewed by this Court on the basis of what is now before it.
The assailed resolutions of the COMELEC do not direct the Court to the evidence which it
considered in determining that petitioner was a nuisance candidate. This precludes the Court from
reviewing at this instance whether the COMELEC committed grave abuse of discretion in
disqualifying petitioner, since such a review would necessarily take into account the matters which
the COMELEC considered in arriving at its decisions.
Petitioner has submitted to this Court mere photocopies of various documents purportedly evincing
his credentials as an eligible candidate for the presidency. Yet this Court, not being a trier of facts,
can not properly pass upon the reproductions as evidence at this level. Neither the COMELEC nor
the Solicitor General appended any document to their respective Comments.
The question of whether a candidate is a nuisance candidate or not is both legal and factual. The
basis of the factual determination is not before this Court. Thus, the remand of this case for the
reception of further evidence is in order.
A word of caution is in order. What is at stake is petitioner’s aspiration and offer to serve in the
government. It deserves not a cursory treatment but a hearing which conforms to the requirements
of due process.
As to petitioner’s attacks on the validity of the form for the certificate of candidacy, suffice it to say
that the form strictly complies with Section 74 of the Omnibus Election Code. This provision
specifically enumerates what a certificate of candidacy should contain, with the required information
tending to show that the candidate possesses the minimum qualifications for the position aspired for
as established by the Constitution and other election laws.

IN VIEW OF THE FOREGOING, COMELEC Case No. SPP (MP) No. 04-001 is hereby remanded to
the COMELEC for the reception of further evidence, to determine the question on whether petitioner
Elly Velez Lao Pamatong is a nuisance candidate as contemplated in Section 69 of the Omnibus
Election Code.
The COMELEC is directed to hold and complete the reception of evidence and report its findings to
this Court with deliberate dispatch.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 110526 February 10, 1998
ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS, petitioner,
vs.
PHILIPPINE COCONUT AUTHORITY, respondent.

MENDOZA, J.:
At issue in this case is the validity of a resolution, dated March 24, 1993, of the Philippine Coconut
Authority in which it declares that it will no longer require those wishing to engage in coconut
processing to apply to it for a license or permit as a condition for engaging in such business.
Petitioner Association of Philippine Coconut Desiccators (hereafter referred to as APCD) brought this
suit forcertiorari and mandamus against respondent Philippine Coconut Authority (PCA) to invalidate
the latter's Board Resolution No. 018-93 and the certificates of registration issued under it on the
ground that the resolution in question is beyond the power of the PCA to adopt, and to compel said
administrative agency to comply instead with the mandatory provisions of statutes regulating the
desiccated coconut industry, in particular, and the coconut industry, in general.
As disclosed by the parties' pleadings, the facts are as follows:
On November 5, 1992, seven desiccated coconut processing companies belonging to the APCD
brought suit in the Regional Trial Court, National Capital Judicial Region in Makati, Metro Manila, to
enjoin the PCA from issuing permits to certain applicants for the establishment of new desiccated
coconut processing plants. Petitioner alleged that the issuance of licenses to the applicants would
violate PCA's Administrative Order No. 02, series of 1991, as the applicants were seeking permits to
operate in areas considered "congested" under the administrative order. 1

On November 6, 1992, the trial court issued a temporary restraining order and, on November 25,
1992, a writ of preliminary injunction, enjoining the PCA from processing and issuing licenses to
Primex Products, Inc., Coco Manila, Superstar (Candelaria) and Superstar (Davao) upon the posting
of a bond in the amount of P100,000.00.2
Subsequently and while the case was pending in the Regional Trial Court, the Governing Board of
the PCA issued on March 24, 1993 Resolution No. 018-93, providing for the withdrawal of the
Philippine Coconut Authority from all regulation of the coconut product processing industry. While it
continues the registration of coconut product processors, the registration would be limited to the
"monitoring" of their volumes of production and administration of quality standards. The full text of
the resolution reads:
RESOLUTION NO. 018-93
POLICY DECLARATION DEREGULATING
THE ESTABLISHMENT OF NEW COCONUT
PROCESSING PLANTS
WHEREAS, it is the policy of the State to promote free enterprise unhampered by protective
regulations and unnecessary bureaucratic red tapes;
WHEREAS, the deregulation of certain sectors of the coconut industry, such as marketing of
coconut oils pursuant to Presidential Decree No. 1960, the lifting of export and commodity
clearances under Executive Order No. 1016, and relaxation of regulated capacity for the
desiccated coconut sector pursuant to Presidential Memorandum of February 11, 1988, has
become a centerpiece of the present dispensation;
WHEREAS, the issuance of permits or licenses prior to business operation is a form of
regulation which is not provided in the charter of nor included among the powers of the PCA;
WHEREAS, the Governing Board of PCA has determined to follow and further support the
deregulation policy and effort of the government to promote free enterprise;
NOW THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth,
PCA shall no longer require any coconut oil mill, coconut oil refinery, coconut desiccator,
coconut product processor/factory, coconut fiber plant or any similar coconut processing
plant to apply with PCA and the latter shall no longer issue any form of license or permit as
condition prior to establishment or operation of such mills or plants;
RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the
aforementioned coconut product processors for the purpose of monitoring their volumes of
production, administration of quality standards with the corresponding service fees/charges.
ADOPTED this 24th day of March 1993, at Quezon City. 3
The PCA then proceeded to issue "certificates of registration" to those wishing to operate desiccated
coconut processing plants, prompting petitioner to appeal to the Office of the President of the
Philippines on April 26, 1993 not to approve the resolution in question. Despite follow-up letters sent
on May 25 and June 2, 1993, petitioner received no reply from the Office of the President. The
"certificates of registration" issued in the meantime by the PCA has enabled a number of new
coconut mills to operate. Hence this petition.

Petitioner alleges:
I
RESPONDENT PCA'S BOARD RESOLUTION NO. 018-93 IS NULL AND VOID FOR BEING
AN UNDUE EXERCISE OF LEGISLATIVE POWER BY AN ADMINISTRATIVE BODY.
II
ASIDE FROM BEING ULTRA-VIRES, BOARD RESOLUTION NO. 018-93 IS WITHOUT
ANY BASIS, ARBITRARY, UNREASONABLE AND THEREFORE IN VIOLATION OF
SUBSTANTIVE DUE PROCESS OF LAW.
III
IN PASSING BOARD RESOLUTION NO. 018-93, RESPONDENT PCA VIOLATED THE
PROCEDURAL DUE PROCESS REQUIREMENT OF CONSULTATION PROVIDED IN
PRESIDENTIAL DECREE NO. 1644, EXECUTIVE ORDER NO. 826 AND PCA
ADMINISTRATIVE ORDER NO. 002, SERIES OF 1991.
On the other hand, in addition to answering petitioner's arguments, respondent PCA alleges that this
petition should be denied on the ground that petitioner has a pending appeal before the Office of the
President. Respondent accuses petitioner of forum-shopping in filing this petition and of failing to
exhaust available administrative remedies before coming to this Court. Respondent anchors its
argument on the general rule that one who brings an action under Rule 65 must show that one has
no appeal nor any plain, speedy, and adequate remedy in the ordinary course of law.
I.
The rule of requiring exhaustion of administrative remedies before a party may seek judicial review,
so strenuously urged by the Solicitor General on behalf of respondent, has obviously no application
here. The resolution in question was issued by the PCA in the exercise of its rule-making or
legislative power. However, only judicial review of decisions of administrative agencies made in the
exercise of their quasi-judicial function is subject to the exhaustion doctrine. The exhaustion doctrine
stands as a bar to an action which is not yet complete4 and it is clear, in the case at bar, that after its
promulgation the resolution of the PCA abandoning regulation of the desiccated coconut industry became
effective. To be sure, the PCA is under the direct supervision of the President of the Philippines but there
is nothing in P.D. No. 232, P.D. No. 961, P.D. No. 1468 and P.D. No. 1644 defining the powers and
functions of the PCA which requires rules and regulations issued by it to be approved by the President
before they become effective.
In any event, although the APCD has appealed the resolution in question to the Office of the
President, considering the fact that two months after they had sent their first letter on April 26, 1993
they still had to hear from the President's office, meanwhile respondent PCA was issuing certificates
of registration indiscriminately to new coconut millers, we hold that petitioner was justified in filing
this case on June 25, 1993. 5 Indeed, after writing the Office of the President on April 26, 1993 6 petitioner
sent inquiries to that office not once, but twice, on May 26, 1993 7and on June 2, 1993, 8 but petitioner did
not receive any reply.
II.

We now turn to the merit of the present petition. The Philippine Coconut Authority was originally
created by P.D. 232 on June 30, 1973, to take over the powers and functions of the Coconut
Coordinating Council, the Philippine Coconut Administration and the Philippine Coconut Research
Institute. On June 11, 1978, by P.D. No. 1468, it was made "an independent public corporation . . .
directly reporting to, and supervised by, the President of the Philippines," 9 and charged with carrying
out the State's policy "to promote the rapid integrated development and growth of the coconut and other
palm oil industry in all its aspects and to ensure that the coconut farmers become direct participants in,
and beneficiaries of, such development and growth." 10 through a regulatory scheme set up by law. 11
Through this scheme, the government, on August 28, 1982, temporarily prohibited the opening of
new coconut processing plants and, four months later, phased out some of the existing ones in view
of overproduction in the coconut industry which resulted in cut-throat competition, underselling and
smuggling of poor quality products and ultimately in the decline of the export performance of
coconut-based commodities. The establishment of new plants could be authorized only upon
determination by the PCA of the existence of certain economic conditions and the approval of the
President of the Philippines. Thus, Executive Order No. 826, dated August 28, 1982, provided:
Sec. 1. Prohibition. — Except as herein provided, no government agency or instrumentality
shall hereafter authorize, approve or grant any permit or license for the establishment or
operation of new desiccated coconut processing plants, including the importation of
machinery or equipment for the purpose. In the event of a need to establish a new plant, or
expand the capacity, relocate or upgrade the efficiencies of any existing desiccated plant, the
Philippine Coconut Authority may, upon proper determination of such need and evaluation of
the condition relating to:
a. the existing market demand;
b. the production capacity prevailing in the country or locality;
c. the level and flow of raw materials; and
d. other circumstances which may affect the growth or viability of the industry concerned,
authorize or grant the application for, the establishment or expansion of capacity, relocation
or upgrading of efficiencies of such desiccated coconut processing plant, subject to the
approval of the President.
On December 6, 1982, a phase-out of some of the existing plants was ordered by the government
after finding that "a mere freeze in the present capacity of existing plants will not afford a viable
solution to the problem considering that the total available limited market is not adequate to support
all the existing processing plants, making it imperative to reduce the number of existing processing
plants." 12 Accordingly, it was ordered: 13
Sec. 1. The Philippine Coconut Authority is hereby ordered to take such action as may be
necessary to reduce the number of existing desiccated coconut processing plants to a level which
will insure the survival of the remaining plants. The Authority is hereby directed to determine
which of the existing processing plants should be phased out and to enter into appropriate
contracts with such plants for the above purpose.

It was only on October 23, 1987 when the PCA adopted Resolution No. 058-87, authorizing the
establishment and operation of additional DCN plants, in view of the increased demand for
desiccated coconut products in the world's markets, particularly in Germany, the Netherlands and

Australia. Even then, the opening of new plants was made subject to "such implementing guidelines
to be set forth by the Authority" and "subject to the final approval of the President."
The guidelines promulgated by the PCA, as embodied in Administrative Order No. 002, series of
1991, inter aliaauthorized the opening of new plants in "non-congested areas only as declared by the
PCA" and subject to compliance by applicants with "all procedures and requirements for registration
under Administrative Order No. 003, series of 1981 and this Order." In addition, as the opening of
new plants was premised on the increased global demand for desiccated coconut products, the new
entrants were required to submit sworn statements of the names and addresses of prospective
foreign buyers.
This form of "deregulation" was approved by President Aquino in her memorandum, dated February
11, 1988, to the PCA. Affirming the regulatory scheme, the President stated in her memorandum:
It appears that pursuant to Executive Order No. 826 providing measures for the protection of
the Desiccated Coconut Industry, the Philippine Coconut Authority evaluated the conditions
relating to: (a) the existing market demands; (b) the production capacity prevailing in the
country or locality; (c) the level and flow of raw materials; and (d) other circumstances which
may affect the growth or viability of the industry concerned and that the result of such
evaluation favored the expansion of production and market of desiccated coconut products.
In view hereof and the favorable recommendation of the Secretary of Agriculture, the
deregulation of the Desiccated Coconut Industry as recommended in Resolution No. 058-87
adopted by the PCA Governing Board on October 28, 1987 (sic) is hereby approved. 14
These measures — the restriction in 1982 on entry into the field, the reduction the same year of the
number of the existing coconut mills and then the lifting of the restrictions in 1987 — were adopted
within the framework of regulation as established by law "to promote the rapid integrated
development and growth of the coconut and other palm oil industry in all its aspects and to ensure
that the coconut farmers become direct participants in, and beneficiaries of, such development and
growth." 15 Contrary to the assertion in the dissent, the power given to the Philippine Coconut Authority —
and before it to the Philippine Coconut Administration — "to formulate and adopt a general program of
development for the coconut and other palm oils industry" 16 is not a roving commission to adopt any
program deemed necessary to promote the development of the coconut and other palm oils industry, but
one to be exercised in the context of this regulatory structure.
In plain disregard of this legislative purpose, the PCA adopted on March 24, 1993 the questioned
resolution which allows not only the indiscriminate opening of new coconut processing plants but the
virtual dismantling of the regulatory infrastructure whereby, forsaking controls theretofore placed in
its keeping, the PCA limits its function to the innocuous one of "monitoring" compliance by coconut
millers with quality standards and volumes of production. In effect, the PCA would simply be
compiling statistical data on these matters, but in case of violations of standards there would be
nothing much it would do. The field would be left without an umpire who would retire to the bleachers
to become a mere spectator. As the PCA provided in its Resolution No. 018-93:
NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, that, henceforth,
PCA shall no longer require any coconut oil mill, coconut oil refinery, coconut desiccator,
coconut product processor/factory, coconut fiber plant or any similar coconut processing
plant to apply with PCA and the latter shall no longer issue any form of license or permit as
condition prior to establishment or operation of such mills or plants;

RESOLVED, FURTHER, that the PCA shall limit itself only to simply registering the
aforementioned coconut product processors for the purpose of monitoring their volumes of
production, administration of quality standards with the corresponding service fees/charges.
The issue is not whether the PCA has the power to adopt this resolution to carry out its mandate
under the law "to promote the accelerated growth and development of the coconut and other palm oil
industry." 17 The issue rather is whether it can renounce the power to regulate implicit in the law creating it
for that is what the resolution in question actually is.
Under Art. II, § 3(a) of the Revised Coconut Code (P.D. No. 1468), the role of the PCA is "To
formulate and adopt a general program of development for the coconut and other palm oil industry in
all its aspects." By limiting the purpose of registration to merely "monitoring volumes of production
[and] administration of quality standards" of coconut processing plants, the PCA in effect abdicates
its role and leaves it almost completely to market forces how the coconut industry will develop.
Art. II, § 3 of P.D. No. 1468 further requires the PCA:
(h) To regulate the marketing and the exportation of copra and its by-products by establishing
standards for domestic trade and export and, thereafter, to conduct an inspection of all copra
and its by-products proposed for export to determine if they conform to the standards
established;
Instead of determining the qualifications of market players and preventing the entry into the field of
those who are unfit, the PCA now relies entirely on competition — with all its wastefulness and
inefficiency — to do the weeding out, in its naive belief in survival of the fittest. The result can very
well be a repeat of 1982 when free enterprise degenerated into a "free-for-all," resulting in cut-throat
competition, underselling, the production of inferior products and the like, which badly affected the
foreign trade performance of the coconut industry.
Indeed, by repudiating its role in the regulatory scheme, the PCA has put at risk other statutory
provisions, particularly those of P.D. No. 1644, to wit:
Sec. 1. The Philippine Coconut Authority shall have full power and authority to regulate the
marketing and export of copra, coconut oil and their by-products, in furtherance of the steps
being taken to rationalize the coconut oil milling industry.
Sec. 2. In the exercise of its powers under Section 1 hereof, the Philippine Coconut Authority
may initiate and implement such measures as may be necessary to attain the rationalization
of the coconut oil milling industry, including, but not limited to, the following measures:
(a) Imposition of floor and/or ceiling prices for all exports of copra, coconut oil and their byproducts;
(b) Prescription of quality standards;
(c) Establishment of maximum quantities for particular periods and particular markets;
(d) Inspection and survey of export shipments through an independent international
superintendent or surveyor.

In the exercise of its powers hereunder, the Philippine Coconut Authority shall consult with,
and be guided by, the recommendation of the coconut farmers, through corporations owned
or controlled by them through the Coconut Industry Investment Fund and the private
corporation authorized to be organized under Letter of Instructions No. 926.
and the Revised Coconut Code (P.D. No. 1468), Art. II, § 3, to wit:
(m) Except in respect of entities owned or controlled by the Government or by the coconut
farmers under Sections 9 and 10, Article III hereof, the Authority shall have full power and
authority to regulate the production, distribution and utilization of all subsidized coconutbased products, and to require the submission of such reports or documents as may be
deemed necessary by the Authority to ascertain whether the levy payments and/or subsidy
claims are due and correct and whether the subsidized products are distributed among, and
utilized by, the consumers authorized by the Authority.
The dissent seems to be saying that in the same way that restrictions on entry into the field were
imposed in 1982 and then relaxed in 1987, they can be totally lifted now without prejudice to
reimposing them in the future should it become necessary to do so. There is really no renunciation of
the power to regulate, it is claimed. Trimming down of PCA's function to registration is not an
abdication of the power to regulate but is regulation itself. But how can this be done when, under
Resolution No. 018-93, the PCA no longer requires a license as condition for the establishment or
operation of a plant? If a number of processing firms go to areas which are already congested, the
PCA cannot stop them from doing so. If there is overproduction, the PCA cannot order a cut back in
their production. This is because the licensing system is the mechanism for regulation. Without it the
PCA will not be able to regulate coconut plants or mills.
In the first "whereas" clause of the questioned resolution as set out above, the PCA invokes a policy
of free enterprise that is "unhampered by protective regulations and unnecessary bureaucratic red
tape" as justification for abolishing the licensing system. There can be no quarrel with the elimination
of "unnecessary red tape." That is within the power of the PCA to do and indeed it should eliminate
red tape. Its success in doing so will be applauded. But free enterprise does not call for removal of
"protective regulations."
Our Constitutions, beginning with the 1935 document, have repudiated laissez-faire as an economic
principle. 18Although the present Constitution enshrines free enterprise as a policy, 19 it nonetheless
reserves to the government the power to intervene whenever necessary to promote the general welfare.
This is clear from the following provisions of Art. XII of the Constitution which, so far as pertinent, state:
Sec. 6. . . . Individuals and private groups, including corporations, cooperatives, and similar
collective organizations, shall have the right to own, establish, and operate economic
enterprises, subject to the duty of the State to promote distributive justice and to intervene
when the common good so demands.
Sec. 19. The State shall regulate or prohibit monopolies when the public interest so requires.
No combinations in restraint of trade or unfair competition shall be allowed. (Emphasis
added).
At all events, any change in policy must be made by the legislative department of the government.
The regulatory system has been set up by law. It is beyond the power of an administrative agency to
dismantle it. Indeed, petitioner charges the PCA of seeking to render moot a case filed by some of its
members questioning the grant of licenses to certain parties by adopting the resolution in question. It
is alleged that members of petitioner complained to the court that the PCA had authorized the

establishment and operation of new plants in areas which were already crowded, in violation of its
Administrative Order No. 002, series of 1991. In response, the Regional Trial Court issued a writ of
preliminary injunction, enjoining the PCA from issuing licenses to the private respondent in that case.
These allegations of petitioner have not been denied here. It would thus seem that instead of
defending its decision to allow new entrants into the field against petitioner's claim that the PCA
decision violated the guidelines in Administrative Order No. 002, series of 1991, the PCA adopted
the resolution in question to render the case moot. In so doing, the PCA abdicated its function of
regulation and left the field to untrammeled competition that is likely to resurrect the evils of cutthroat competition, underselling and overproduction which in 1982 required the temporary closing of
the field to new players in order to save the industry.
The PCA cannot rely on the memorandum of then President Aquino for authority to adopt the
resolution in question. As already stated, what President Aquino approved in 1988 was the
establishment and operation of new DCN plants subject to the guidelines to be drawn by the
PCA. 20 In the first place, she could not have intended to amend the several laws already mentioned,
which set up the regulatory system, by a mere memoranda to the PCA. In the second place, even if that
had been her intention, her act would be without effect considering that, when she issued the
memorandum in question on February 11, 1988, she was no longer vested with legislative authority. 21
WHEREFORE, the petition is GRANTED. PCA Resolution No. 018-93 and all certificates of
registration issued under it are hereby declared NULL and VOID for having been issued in excess of
the power of the Philippine Coconut Authority to adopt or issue.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
G.R. No. 193459

February 15, 2011

MA. MERCEDITAS N. GUTIERREZ Petitioner,
vs.
THE HOUSE OF REPRESENTATIVES COMMITTEE ON JUSTICE, RISA HONTIVEROSBARAQUEL, DANILO D. LIM, FELIPE PESTAÑO, EVELYN PESTAÑO, RENATO M. REYES, JR.,
SECRETARY GENERAL OF BAGONG ALYANSANG MAKABAYAN (BAYAN); MOTHER MARY
JOHN MANANZAN, CO-CHAIRPERSON OF PAGBABAGO; DANILO RAMOS, SECRETARYGENERAL OF KILUSANG MAGBUBUKID NG PILIPINAS (KMP); ATTY. EDRE OLALIA, ACTING
SECRETARY GENERAL OF THE NATIONAL UNION OF PEOPLE'S LAWYERS (NUPL);
FERDINAND R. GAITE, CHAIRPERSON, CONFEDERATION FOR UNITY, RECOGNITION AND
ADVANCEMENT OF GOVERNMENT EMPLOYEES (COURAGE); and JAMES TERRY RIDON OF
THE LEAGUE OF FILIPINO STUDENTS (LFS), Respondents.
FELICIANO BELMONTE, JR., Respondent-Intervenor.
DECISION
CARPIO MORALES, J.:

The Ombudsman, Ma. Merceditas Gutierrez (petitioner), challenges via petition for certiorari and
prohibition the Resolutions of September 1 and 7, 2010 of the House of Representatives Committee
on Justice (public respondent).
Before the 15th Congress opened its first session on July 26, 2010 (the fourth Monday of July, in
accordance with Section 15, Article VI of the Constitution) or on July 22, 2010, private respondents
Risa Hontiveros-Baraquel, Danilo Lim, and spouses Felipe and Evelyn Pestaño (Baraquel group)
filed an impeachment complaint1 against petitioner, upon the endorsement of Party-List
Representatives Arlene Bag-ao and Walden Bello.2
A day after the opening of the 15th Congress or on July 27, 2010, Atty. Marilyn Barua-Yap, Secretary
General of the House of Representatives, transmitted the impeachment complaint to House Speaker
Feliciano Belmonte, Jr.3who, by Memorandum of August 2, 2010, directed the Committee on Rules
to include it in the Order of Business.4
On August 3, 2010, private respondents Renato Reyes, Jr., Mother Mary John Mananzan, Danilo
Ramos, Edre Olalia, Ferdinand Gaite and James Terry Ridon (Reyes group) filed another
impeachment complaint5 against petitioner with a resolution of endorsement by Party-List
Representatives Neri Javier Colmenares, Teodoro Casiño, Rafael Mariano, Luzviminda Ilagan,
Antonio Tinio and Emerenciana de Jesus.6 On even date, the House of Representatives provisionally
adopted the Rules of Procedure in Impeachment Proceedings of the 14th Congress. By letter still of
even date,7 the Secretary General transmitted the Reyes group’s complaint to Speaker Belmonte
who, by Memorandum of August 9, 2010,8 also directed the Committee on Rules to include it in the
Order of Business.
On August 10, 2010, House Majority Leader Neptali Gonzales II, as chairperson of the Committee
on Rules,9instructed Atty. Artemio Adasa, Jr., Deputy Secretary General for Operations, through Atty.
Cesar Pareja, Executive Director of the Plenary Affairs Department, to include the two complaints in
the Order of Business,10which was complied with by their inclusion in the Order of Business for the
following day, August 11, 2010.
On August 11, 2010 at 4:47 p.m., during its plenary session, the House of
Representatives simultaneouslyreferred both complaints to public respondent.11
After hearing, public respondent, by Resolution of September 1, 2010, found both complaints
sufficient in form, which complaints it considered to have been referred to it at exactly the same time.
Meanwhile, the Rules of Procedure in Impeachment Proceedings of the 15th Congress was
published on September 2, 2010.
On September 6, 2010, petitioner tried to file a motion to reconsider the September 1, 2010
Resolution of public respondent. Public respondent refused to accept the motion, however, for
prematurity; instead, it advised petitioner to await the notice for her to file an answer to the
complaints, drawing petitioner to furnish copies of her motion to each of the 55 members of public
respondent.
After hearing, public respondent, by Resolution of September 7, 2010, found the two complaints,
which both allege culpable violation of the Constitution and betrayal of public trust,12 sufficient in
substance. The determination of the sufficiency of substance of the complaints by public respondent,
which assumed hypothetically the truth of their allegations, hinged on the issue of whether valid
judgment to impeach could be rendered thereon. Petitioner was served also on September 7, 2010 a
notice directing her to file an answer to the complaints within 10 days. 13

Six days following her receipt of the notice to file answer or on September 13, 2010, petitioner filed
with this Court the present petition with application for injunctive reliefs. The following day or on
September 14, 2010, the Court En Banc RESOLVED to direct the issuance of a status quo
ante order14 and to require respondents to comment on the petition in 10 days. The Court
subsequently, by Resolution of September 21, 2010, directed the Office of the Solicitor General
(OSG) to file in 10 days its Comment on the petition
The Baraquel group which filed the first complaint, the Reyes group which filed the second
complaint, and public respondent (through the OSG and private counsel) filed their respective
Comments on September 27, 29 and 30, 2010.
Speaker Belmonte filed a Motion for Leave to Intervene dated October 4, 2010 which the Court
granted by Resolution of October 5, 2010.
Under an Advisory15 issued by the Court, oral arguments were conducted on October 5 and 12,
2010, followed by petitioner’s filing of a Consolidated Reply of October 15, 2010 and the filing by the
parties of Memoranda within the given 15-day period.
The petition is harangued by procedural objections which the Court shall first resolve.
Respondents raise the impropriety of the remedies of certiorari and prohibition. They argue that
public respondent was not exercising any judicial, quasi-judicial or ministerial function in taking
cognizance of the two impeachment complaints as it was exercising a political act that is
discretionary in nature,16 and that its function is inquisitorial that is akin to a preliminary
investigation.17
These same arguments were raised in Francisco, Jr. v. House of Representatives. 18 The argument
that impeachment proceedings are beyond the reach of judicial review was debunked in this wise:
The major difference between the judicial power of the Philippine Supreme Court and that of the
U.S. Supreme Court is that while the power of judicial review is only impliedly granted to the U.S.
Supreme Court and is discretionary in nature, that granted to the Philippine Supreme Court and
lower courts, as expressly provided for in the Constitution, is not just a power but also a duty, and it
was given an expanded definition to include the power to correct any grave abuse of discretion on
the part of any government branch or instrumentality.
There are also glaring distinctions between the U.S. Constitution and the Philippine Constitution with
respect to the power of the House of Representatives over impeachment proceedings. While the
U.S. Constitution bestows sole power of impeachment to the House of Representatives without
limitation, our Constitution, though vesting in the House of Representatives the exclusive power to
initiate impeachment cases, provides for several limitations to the exercise of such power as
embodied in Section 3(2), (3), (4) and (5), Article XI thereof. These limitations include the manner of
filing, required vote to impeach, and the one year bar on the impeachment of one and the same
official.
Respondents are also of the view that judicial review of impeachments undermines their finality and
may also lead to conflicts between Congress and the judiciary. Thus, they call upon this Court to
exercise judicial statesmanship on the principle that "whenever possible, the Court should defer to
the judgment of the people expressed legislatively, recognizing full well the perils of judicial
willfulness and pride."

But did not the people also express their will when they instituted the above-mentioned safeguards
in the Constitution? This shows that the Constitution did not intend to leave the matter of
impeachment to the sole discretion of Congress. Instead, it provided for certain well-defined limits, or
in the language of Baker v. Carr,"judicially discoverable standards" for determining the validity of the
exercise of such discretion, through the power of judicial review.
xxxx
There is indeed a plethora of cases in which this Court exercised the power of judicial review over
congressional action. Thus, in Santiago v. Guingona, Jr., this Court ruled that it is well within the
power and jurisdiction of the Court to inquire whether the Senate or its officials committed a violation
of the Constitution or grave abuse of discretion in the exercise of their functions and prerogatives.
In Tañada v. Angara, in seeking to nullify an act of the Philippine Senate on the ground that it
contravened the Constitution, it held that the petition raises a justiciable controversy and that when
an action of the legislative branch is seriously alleged to have infringed the Constitution, it becomes
not only the right but in fact the duty of the judiciary to settle the dispute. In Bondoc v. Pineda, this
Court declared null and void a resolution of the House of Representatives withdrawing the
nomination, and rescinding the election, of a congressman as a member of the House Electoral
Tribunal for being violative of Section 17, Article VI of the Constitution. In Coseteng v. Mitra, it held
that the resolution of whether the House representation in the Commission on Appointments was
based on proportional representation of the political parties as provided in Section 18, Article VI of
the Constitution is subject to judicial review. In Daza v. Singson, it held that the act of the House of
Representatives in removing the petitioner from the Commission on Appointments is subject to
judicial review. In Tañada v. Cuenco, it held that although under the Constitution, the legislative
power is vested exclusively in Congress, this does not detract from the power of the courts to pass
upon the constitutionality of acts of Congress. In Angara v. Electoral Commission, it ruled that
confirmation by the National Assembly of the election of any member, irrespective of whether his
election is contested, is not essential before such member-elect may discharge the duties and enjoy
the privileges of a member of the National Assembly.
Finally, there exists no constitutional basis for the contention that the exercise of judicial review over
impeachment proceedings would upset the system of checks and balances. Verily, the Constitution
is to be interpreted as a whole and "one section is not to be allowed to defeat another." Both are
integral components of the calibrated system of independence and interdependence that insures
that no branch of government act beyond the powers assigned to it by the Constitution. 19 (citations
omitted; italics in the original; underscoring supplied)
Francisco characterizes the power of judicial review as a duty which, as the expanded certiorari
jurisdiction20 of this Court reflects, includes the power to "determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government."21
In the present case, petitioner invokes the Court’s expanded certiorari jurisdiction, using the special
civil actions of certiorari and prohibition as procedural vehicles. The Court finds it well-within its
power to determine whether public respondent committed a violation of the Constitution or gravely
abused its discretion in the exercise of its functions and prerogatives that could translate as lack or
excess of jurisdiction, which would require corrective measures from the Court.
Indubitably, the Court is not asserting its ascendancy over the Legislature in this instance, but simply
upholding the supremacy of the Constitution as the repository of the sovereign will. 22

Respondents do not seriously contest all the essential requisites for the exercise of judicial review,
as they only assert that the petition is premature and not yet ripe for adjudication since petitioner has
at her disposal a plain, speedy and adequate remedy in the course of the proceedings before public
respondent. Public respondent argues that when petitioner filed the present petition 23 on September
13, 2010, it had not gone beyond the determination of the sufficiency of form and substance of the
two complaints.
An aspect of the "case-or-controversy" requirement is the requisite of ripeness. 24 The question of
ripeness is especially relevant in light of the direct, adverse effect on an individual by the challenged
conduct.25 In the present petition, there is no doubt that questions on, inter alia, the validity of the
simultaneous referral of the two complaints and on the need to publish as a mode of promulgating
the Rules of Procedure in Impeachment Proceedings of the House (Impeachment Rules) present
constitutional vagaries which call for immediate interpretation.
The unusual act of simultaneously referring to public respondent two impeachment complaints
presents a novel situation to invoke judicial power. Petitioner cannot thus be considered to have
acted prematurely when she took the cue from the constitutional limitation that only one
impeachment proceeding should be initiated against an impeachable officer within a period of one
year.
And so the Court proceeds to resolve the substantive issue ─ whether public respondent
committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing its two
assailed Resolutions. Petitioner basically anchors her claim on alleged violation of the due process
clause (Art. III, Sec. 1) and of the one-year bar provision (Art. XI, Sec 3, par. 5) of the Constitution.
Due process of law
Petitioner alleges that public respondent’s chairperson, Representative Niel Tupas, Jr. (Rep. Tupas),
is the subject of an investigation she is conducting, while his father, former Iloilo Governor Niel
Tupas, Sr., had been charged by her with violation of the Anti-Graft and Corrupt Practices Act before
the Sandiganbayan. To petitioner, the actions taken by her office against Rep. Tupas and his father
influenced the proceedings taken by public respondent in such a way that bias and vindictiveness
played a big part in arriving at the finding of sufficiency of form and substance of the complaints
against her.
The Court finds petitioner’s allegations of bias and vindictiveness bereft of merit, there being hardly
any indication thereof. Mere suspicion of partiality does not suffice.26
The act of the head of a collegial body cannot be considered as that of the entire body itself. So
GMCR, Inc. v. Bell Telecommunications Phils.27 teaches:
First. We hereby declare that the NTC is a collegial body requiring a majority vote out of the three
members of the commission in order to validly decide a case or any incident therein. Corollarily, the
vote alone of the chairman of the commission, as in this case, the vote of Commissioner Kintanar,
absent the required concurring vote coming from the rest of the membership of the commission to at
least arrive at a majority decision, is not sufficient to legally render an NTC order, resolution or
decision.
Simply put, Commissioner Kintanar is not the National Telecommunications Commission. He alone
does not speak and in behalf of the NTC. The NTC acts through a three-man body x x x. 28

In the present case, Rep. Tupas, public respondent informs, did not, in fact, vote and merely
presided over the proceedings when it decided on the sufficiency of form and substance of the
complaints.29
Even petitioner’s counsel conceded during the oral arguments that there are no grounds to compel
the inhibition of Rep. Tupas.
JUSTICE CUEVAS:
Well, the Committee is headed by a gentleman who happened to be a respondent in the charges
that the Ombudsman filed. In addition to that[,] his father was likewise a respondent in another case.
How can he be expected to act with impartiality, in fairness and in accordance with law under that
matter, he is only human we grant him that benefit.
JUSTICE MORALES:
Is he a one-man committee?
JUSTICE CUEVAS:
He is not a one-man committee, Your Honor, but he decides.
JUSTICE MORALES:
Do we presume good faith or we presume bad faith?
JUSTICE CUEVAS:
We presume that he is acting in good faith, Your Honor, but then (interrupted)
JUSTICE MORALES:
So, that he was found liable for violation of the Anti Graft and Corrupt Practices Act, does that mean
that your client will be deprived of due process of law?
JUSTICE CUEVAS:
No, what we are stating, Your Honor, is that expectation of a client goes with the Ombudsman, which
goes with the element of due process is the lack of impartiality that may be expected of him.
JUSTICE MORALES:
But as you admitted the Committee is not a one-man committee?
JUSTICE CUEVAS:
That is correct, Your Honor.
JUSTICE MORALES:

So, why do you say then that there is a lack of impartiality?
JUSTICE CUEVAS:
Because if anything before anything goes (sic) he is the presiding officer of the committee as in this
case there were objections relative to the existence of the implementing rules not heard, there was
objection made by Congressman Golez to the effect that this may give rise to a constitutional crisis.
JUSTICE MORALES:
That called for a voluntary inhibition. Is there any law or rule you can cite which makes it mandatory
for the chair of the committee to inhibit given that he had previously been found liable for violation of
a law[?]
JUSTICE CUEVAS:
There is nothing, Your Honor. In our jurisprudence which deals with the situation whereby with that
background as the material or pertinent antecedent that there could be no violation of the right of the
petitioner to due process. What is the effect of notice, hearing if the judgment cannot come from an
impartial adjudicator.30 (emphasis and underscoring supplied)
Petitioner contends that the "indecent and precipitate haste" of public respondent in finding the two
complaints sufficient in form and substance is a clear indication of bias, she pointing out that it only
took public respondent five minutes to arrive thereat.
lawphi1

An abbreviated pace in the conduct of proceedings is not per se an indication of bias, however. So
Santos-Concio v. Department of Justice31 holds:
Speed in the conduct of proceedings by a judicial or quasi-judicial officer cannot per se be instantly
attributed to an injudicious performance of functions. For one’s prompt dispatch may be another’s
undue haste. The orderly administration of justice remains as the paramount and constant
consideration, with particular regard of the circumstances peculiar to each case.
The presumption of regularity includes the public officer’s official actuations in all phases of work.
Consistent with such presumption, it was incumbent upon petitioners to present contradictory
evidence other than a mere tallying of days or numerical calculation. This, petitioners failed to
discharge. The swift completion of the Investigating Panel’s initial task cannot be relegated as
shoddy or shady without discounting the presumably regular performance of not just one but five
state prosecutors.32 (italics in the original; emphasis and underscoring supplied)
Petitioner goes on to contend that her participation in the determination of sufficiency of form and
substance was indispensable. As mandated by the Impeachment Rules, however, and as, in fact,
conceded by petitioner’s counsel, the participation of the impeachable officer starts with the filing of
an answer.
JUSTICE MORALES:
Is it not that the Committee should first determine that there is sufficiency in form and
substance before she is asked to file her answer (interrupted)
JUSTICE CUEVAS:

That is correct, Your Honor.
JUSTICE MORALES:
During which she can raise any defenses she can assail the regularity of the proceedings and
related irregularities?
JUSTICE CUEVAS:
Yes. We are in total conformity and in full accord with that statement, Your Honor, because it is only
after a determination that the complaint is sufficient in form and substance that a complaint may be
filed, Your Honor, without that but it may be asked, how is not your action premature, Your Honor, our
answer is- no, because of the other violations involved and that is (interrupted). 33 (emphasis and
underscoring supplied)
Rule III(A) of the Impeachment Rules of the 15th Congress reflects the impeachment procedure at
the Committee-level, particularly Section 534 which denotes that petitioner’s initial participation in the
impeachment proceedings – the opportunity to file an Answer – starts after the Committee on Justice
finds the complaint sufficient in form and substance. That the Committee refused to accept
petitioner’s motion for reconsideration from its finding of sufficiency of form of the impeachment
complaints is apposite, conformably with the Impeachment Rules.
Petitioner further claims that public respondent failed to ascertain the sufficiency of form and
substance of the complaints on the basis of the standards set by the Constitution and its own
Impeachment Rules.35
The claim fails.
The determination of sufficiency of form and substance of an impeachment complaint is an exponent
of the express constitutional grant of rule-making powers of the House of Representatives which
committed such determinative function to public respondent. In the discharge of that power and in
the exercise of its discretion, the House has formulated determinable standards as to the form and
substance of an impeachment complaint. Prudential considerations behoove the Court to respect the
compliance by the House of its duty to effectively carry out the constitutional purpose, absent any
contravention of the minimum constitutional guidelines.
Contrary to petitioner’s position that the Impeachment Rules do not provide for comprehensible
standards in determining the sufficiency of form and substance, the Impeachment Rules are clear in
echoing the constitutional requirements and providing that there must be a "verified complaint or
resolution,"36 and that the substance requirement is met if there is "a recital of facts constituting the
offense charged and determinative of the jurisdiction of the committee."37
Notatu dignum is the fact that it is only in the Impeachment Rules where a determination of
sufficiency of form and substance of an impeachment complaint is made necessary. This
requirement is not explicitly found in the organic law, as Section 3(2), Article XI of the Constitution
basically merely requires a "hearing."38 In the discharge of its constitutional duty, the House deemed
that a finding of sufficiency of form and substance in an impeachment complaint is vital "to effectively
carry out" the impeachment process, hence, such additional requirement in the Impeachment Rules.
Petitioner urges the Court to look into the narration of facts constitutive of the offenses vis-à-vis her
submissions disclaiming the allegations in the complaints.

This the Court cannot do.
Francisco instructs that this issue would "require the Court to make a determination of what
constitutes an impeachable offense. Such a determination is a purely political question which the
Constitution has left to the sound discretion of the legislature. Such an intent is clear from the
deliberations of the Constitutional Commission. x x x x Clearly, the issue calls upon this court to
decide a non-justiciable political question which is beyond the scope of its judicial power[.]" 39 Worse,
petitioner urges the Court to make a preliminary assessment of certain grounds raised, upon a
hypothetical admission of the facts alleged in the complaints, which involve matters of defense.
In another vein, petitioner, pursuing her claim of denial of due process, questions the lack of or, more
accurately, delay in the publication of the Impeachment Rules.
To recall, days after the 15th Congress opened on July 26, 2010 or on August 3, 2010, public
respondent provisionally adopted the Impeachment Rules of the 14th Congress and thereafter
published on September 2, 2010 its Impeachment Rules, admittedly substantially identical with that
of the 14th Congress, in two newspapers of general circulation. 40
Citing Tañada v. Tuvera,41 petitioner contends that she was deprived of due process since the
Impeachment Rules was published only on September 2, 2010 a day after public respondent ruled
on the sufficiency of form of the complaints. She likewise tacks her contention on Section 3(8),
Article XI of the Constitution which directs that "Congress shall promulgate its rules on impeachment
to effectively carry out the purpose of this section."
Public respondent counters that "promulgation" in this case refers to "the publication of rules in any
medium of information, not necessarily in the Official Gazette or newspaper of general circulation." 42
Differentiating Neri v. Senate Committee on Accountability of Public Officers and
Investigations43 which held that the Constitution categorically requires publication of the rules of
procedure in legislative inquiries, public respondent explains that the Impeachment Rules is intended
to merely enable Congress to effectively carry outthe purpose of Section 3(8), Art. XI of Constitution.
Black’s Law Dictionary broadly defines promulgate as
To publish; to announce officially; to make public as important or obligatory. The formal act of
announcing a statute or rule of court. An administrative order that is given to cause an agency law or
regulation to become known or obligatory.44 (emphasis supplied)
While "promulgation" would seem synonymous to "publication," there is a statutory difference in their
usage.
The Constitution notably uses the word "promulgate" 12 times. 45 A number of those instances
involves the promulgation of various rules, reports and issuances emanating from Congress, this
Court, the Office of the Ombudsman as well as other constitutional offices.
To appreciate the statutory difference in the usage of the terms "promulgate" and "publish," the case
of the Judiciary is in point. In promulgating rules concerning the protection and enforcement of
constitutional rights, pleading, practice and procedure in all courts, the Court has invariably required
the publication of these rules for their effectivity. As far as promulgation of judgments is concerned,
however, promulgation means "the delivery of the decision to the clerk of court for filing and
publication."46

Section 4, Article VII of the Constitution contains a similar provision directing Congress to
"promulgate its rules for the canvassing of the certificates" in the presidential and vice presidential
elections. Notably, when Congress approved its canvassing rules for the May 14, 2010 national
elections on May 25, 2010,47 it did not require the publication thereof for its effectivity. Rather,
Congress made the canvassing rules effective upon its adoption.
In the case of administrative agencies, "promulgation" and "publication" likewise take on different
meanings as they are part of a multi-stage procedure in quasi-legislation. As detailed in one
case,48 the publication of implementing rules occurs after their promulgation or adoption.
Promulgation must thus be used in the context in which it is generally understood—that is, to make
known. Generalia verba sunt generaliter inteligencia. What is generally spoken shall be generally
understood. Between the restricted sense and the general meaning of a word, the general must
prevail unless it was clearly intended that the restricted sense was to be used. 49
Since the Constitutional Commission did not restrict "promulgation" to "publication," the former
should be understood to have been used in its general sense. It is within the discretion of Congress
to determine on how to promulgate its Impeachment Rules, in much the same way that the Judiciary
is permitted to determine that to promulgate a decision means to deliver the decision to the clerk of
court for filing and publication.
It is not for this Court to tell a co-equal branch of government how to promulgate when the
Constitution itself has not prescribed a specific method of promulgation. The Court is in no position
to dictate a mode of promulgation beyond the dictates of the Constitution.
Publication in the Official Gazette or a newspaper of general circulation is but one avenue for
Congress to make known its rules. Jurisprudence emphatically teaches that
x x x in the absence of constitutional or statutory guidelines or specific rules, this Court is devoid of
any basis upon which to determine the legality of the acts of the Senate relative thereto. On grounds
of respect for the basic concept of separation of powers, courts may not intervene in
the internal affairs of the legislature; it is not within the province of courts to direct Congress how to
do its work. In the words of Justice Florentino P. Feliciano, this Court is of the opinion that where no
specific, operable norms and standards are shown to exist, then the legislature must be given a real
and effective opportunity to fashion and promulgate as well as to implement them, before the courts
may intervene.50 (italics in the original; emphasis and underscoring supplied; citations omitted)
Had the Constitution intended to have the Impeachment Rules published, it could have stated so as
categorically as it did in the case of the rules of procedure in legislative inquiries, per Neri. Other
than "promulgate," there is no other single formal term in the English language to appropriately refer
to an issuance without need of it being published.
IN FINE, petitioner cannot take refuge in Neri since inquiries in aid of legislation under Section 21,
Article VI of the Constitution is the sole instance in the Constitution where there is a categorical
directive to duly publish a set of rules of procedure. Significantly notable in Neri is that with respect
to the issue of publication, the Court anchored its ruling on the 1987 Constitution’s directive, without
any reliance on or reference to the 1986 case of Tañada v. Tuvera.51 Tañada naturally could neither
have interpreted a forthcoming 1987 Constitution nor had kept a tight rein on the Constitution’s
intentions as expressed through the allowance of either a categorical term or a general sense of
making known the issuances.

From the deliberations of the Constitutional Commission, then Commissioner, now retired Associate
Justice Florenz Regalado intended Section 3(8), Article XI to be the vehicle for the House to fill the
gaps in the impeachment process.
MR. REGALADO. Mr. Presiding Officer, I have decided to put in an additional section because, for
instance, under Section 3 (2), there is mention of indorsing a verified complaint for impeachment by
any citizen alleging ultimate facts constituting a ground or grounds for impeachment. In other words,
it is just like a provision in the rules of court. Instead, I propose that this procedural requirement, like
indorsement of a complaint by a citizen to avoid harassment or crank complaints, could very well be
taken up in a new section 4 which shall read as follows: THE CONGRESS SHALL PROMULGATE
ITS RULES ON IMPEACHMENT TO EFFECTIVELY CARRY OUT THE PURPOSES THEREOF. I
think all these other procedural requirements could be taken care of by the Rules of
Congress.52 (emphasis and underscoring supplied)
The discussion clearly rejects the notion that the impeachment provisions are not self-executing.
Section 3(8) does not, in any circumstance, operate to suspend the entire impeachment mechanism
which the Constitutional Commission took pains in designing even its details.
As against constitutions of the past, modern constitutions have been generally drafted upon a
different principle and have often become in effect extensive codes of laws intended to operate
directly upon the people in a manner similar to that of statutory enactments, and the function of
constitutional conventions has evolved into one more like that of a legislative body. Hence, unless it
is expressly provided that a legislative act is necessary to enforce a constitutional
mandate, the presumption now is that all provisions of the constitution are self-executing. If
the constitutional provisions are treated as requiring legislation instead of self-executing, the
legislature would have the power to ignore and practically nullify the mandate of the fundamental
law. This can be cataclysmic. That is why the prevailing view is, as it has always been, that —
. . . in case of doubt, the Constitution should be considered self-executing rather than nonself-executing . . . . Unless the contrary is clearly intended, the provisions of the Constitution should
be considered self-executing, as a contrary rule would give the legislature discretion to determine
when, or whether, they shall be effective. These provisions would be subordinated to the will of the
lawmaking body, which could make them entirely meaningless by simply refusing to pass the
needed implementing statute.53 (emphasis and underscoring supplied)
Even assuming arguendo that publication is required, lack of it does not nullify the proceedings
taken prior to the effectivity of the Impeachment Rules which faithfully comply with the relevant selfexecuting provisions of the Constitution. Otherwise, in cases where impeachment complaints are
filed at the start of each Congress, the mandated periods under Section 3, Article XI of the
Constitution would already run or even lapse while awaiting the expiration of the 15-day period of
publication prior to the effectivity of the Impeachment Rules. In effect, the House would already
violate the Constitution for its inaction on the impeachment complaints pending the completion of the
publication requirement.
Given that the Constitution itself states that any promulgation of the rules on impeachment is aimed
at "effectively carry[ing] out the purpose" of impeachment proceedings, the Court finds no grave
abuse of discretion when the House deemed it proper to provisionally adopt the Rules on
Impeachment of the 14th Congress, to meet the exigency in such situation of early filing and in
keeping with the "effective" implementation of the "purpose" of the impeachment provisions. In other
words, the provisional adoption of the previous Congress’ Impeachment Rules is within the power of
the House to promulgate its rules on impeachment to effectively carry out the avowed purpose.

Moreover, the rules on impeachment, as contemplated by the framers of the Constitution, merely aid
or supplement the procedural aspects of impeachment. Being procedural in nature, they may be
given retroactive application to pending actions. "It is axiomatic that the retroactive application of
procedural laws does not violate any right of a person who may feel that he is adversely affected,
nor is it constitutionally objectionable. The reason for this is that, as a general rule, no vested right
may attach to, nor arise from, procedural laws."54 In the present case, petitioner fails to allege any
impairment of vested rights.
It bears stressing that, unlike the process of inquiry in aid of legislation where the rights of witnesses
are involved, impeachment is primarily for the protection of the people as a body politic, and not for
the punishment of the offender.55
Even Neri concedes that the unpublished rules of legislative inquiries were not considered null and
void in its entirety. Rather,
x x x [o]nly those that result in violation of the rights of witnesses should be considered null and void,
considering that the rationale for the publication is to protect the rights of witnesses as expressed in
Section 21, Article VI of the Constitution. Sans such violation, orders and proceedings are
considered valid and effective.56 (emphasis and underscoring supplied)
Petitioner in fact does not deny that she was fully apprised of the proper procedure. She even
availed of and invoked certain provisions57 of the Impeachment Rules when she, on September 7,
2010, filed the motion for reconsideration and later filed the present petition. The Court thus finds no
violation of the due process clause.
The one-year bar rule
Article XI, Section 3, paragraph (5) of the Constitution reads: "No impeachment proceedings shall
be initiatedagainst the same official more than once within a period of one year."
Petitioner reckons the start of the one-year bar from the filing of the first impeachment complaint
against her on July 22, 2010 or four days before the opening on July 26, 2010 of the 15th Congress.
She posits that within one year from July 22, 2010, no second impeachment complaint may be
accepted and referred to public respondent.
On the other hand, public respondent, respondent Reyes group and respondent-intervenor submit
that the initiation starts with the filing of the impeachment complaint and ends with the referral to the
Committee, followingFrancisco, but venture to alternatively proffer that the initiation ends somewhere
between the conclusion of the Committee Report and the transmittal of the Articles of Impeachment
to the Senate. Respondent Baraquel group, meanwhile, essentially maintains that under either the
prevailing doctrine or the parties’ interpretation, its impeachment complaint could withstand
constitutional scrutiny.
Contrary to petitioner’s asseveration, Francisco58 states that the term "initiate" means to file the
complaint andtake initial action on it.59 The initiation starts with the filing of the complaint which must
be accompanied with an action to set the complaint moving. It refers to the filing of the impeachment
complaint coupled with Congress’ taking initial action of said complaint. The initial action taken by
the House on the complaint is the referral of the complaint to the Committee on Justice.
Petitioner misreads the remark of Commissioner Joaquin Bernas, S.J. that "no second verified
impeachment may be accepted and referred to the Committee on Justice for action" 60 which

contemplates a situation where a first impeachment complaint had already been referred. Bernas
and Regalado, who both acted as amici curiae inFrancisco, affirmed that the act of
initiating includes the act of taking initial action on the complaint.
From the records of the Constitutional Commission, to the amicus curiae briefs of two former
Constitutional Commissioners, it is without a doubt that the term "to initiate" refers to the filing of the
impeachment complaint coupled with Congress' taking initial action of said complaint.
Having concluded that the initiation takes place by the act of filing and referral or endorsement of the
impeachment complaint to the House Committee on Justice or, by the filing by at least one-third61 of
the members of the House of Representatives with the Secretary General of the House, the meaning
of Section 3 (5) of Article XI becomes clear. Once an impeachment complaint has been initiated,
another impeachment complaint may not be filed against the same official within a one year
period.62 (emphasis and underscoring supplied)
The Court, in Francisco, thus found that the assailed provisions of the 12th Congress’ Rules of
Procedure in Impeachment Proceedings ─ Sections 1663 and 1764 of Rule V thereof ─ "clearly
contravene Section 3(5) of Article XI since they g[a]ve the term ‘initiate’ a meaning different
from filing and referral."65
Petitioner highlights certain portions of Francisco which delve on the relevant records of the
Constitutional Commission, particularly Commissioner Maambong’s statements 66 that the initiation
starts with the filing of the complaint.
Petitioner fails to consider the verb "starts" as the operative word. Commissioner Maambong was all
too keen to stress that the filing of the complaint indeed starts the initiation and that the
House’s action on the committee report/resolution is not part of that initiation phase.
Commissioner Maambong saw the need "to be very technical about this," 67 for certain exchanges in
the Constitutional Commission deliberations loosely used the term, as shown in the following
exchanges.
MR. DAVIDE. That is for conviction, but not for initiation. Initiation of impeachment proceedings still
requires a vote of one-fifth of the membership of the House under the 1935 Constitution.
MR. MONSOD. A two-thirds vote of the membership of the House is required to initiate proceedings.
MR. DAVIDE. No. for initiation of impeachment proceedings, only one-fifth vote of the membership
of the House is required; for conviction, a two-thirds vote of the membership is required.
xxxx
MR. DAVIDE. However, if we allow one-fifth of the membership of the legislature to overturn a report
of the committee, we have here Section 3 (4) which reads:
No impeachment proceedings shall be initiated against the same official more than once within a
period of one year.
So, necessarily, under this particular subsection, we will, in effect, disallow one-fifth of the members
of the National Assembly to revive an impeachment move by an individual or an ordinary Member.

MR. ROMULO. Yes. May I say that Section 3 (4) is there to look towards the possibility of a very
liberal impeachment proceeding. Second, we were ourselves struggling with that problem where we
are faced with just a verified complaint rather than the signatures of one-fifth, or whatever it is we
decide, of the Members of the House. So whether to put a period for the Committee to report,
whether we should not allow the Committee to overrule a mere verified complaint, are some of the
questions we would like to be discussed.
MR. DAVIDE. We can probably overrule a rejection by the Committee by providing that it can be
overturned by, say, one-half or a majority, or one-fifth of the members of the legislature, and
that such overturning will not amount to a refiling which is prohibited under Section 3 (4).
Another point, Madam President. x x x68 (emphasis and underscoring supplied)
An apparent effort to clarify the term "initiate" was made by Commissioner Teodulo Natividad:
MR. NATIVIDAD. How many votes are needed to initiate?
MR. BENGZON. One-third.
MR. NATIVIDAD. To initiate is different from to impeach; to impeach is different from to convict.
To impeach means to file the case before the Senate.
MR. REGALADO. When we speak of "initiative," we refer here to the Articles of Impeachment.
MR. NATIVIDAD. So, that is the impeachment itself, because when we impeach, we are charging
him with the Articles of Impeachment. That is my understanding.69 (emphasis and underscoring
supplied)
Capping these above-quoted discussions was the explanation of Commissioner Maambong
delivered on at least two occasions:
[I]
MR. MAAMBONG. Mr. Presiding Officer, I am not moving for a reconsideration of the approval of the
amendment submitted by Commissioner Regalado, but I will just make of record my thinking that we
do not really initiate the filing of the Articles of Impeachment on the floor. The procedure, as I have
pointed out earlier, was that the initiation starts with the filing of the complaint. And what is actually
done on the floor is that the committee resolution containing the Articles of Impeachment is the one
approved by the body.
As the phraseology now runs, which may be corrected by the Committee on Style, it appears that
the initiation starts on the floor. If we only have time, I could cite examples in the case of the
impeachment proceedings of President Richard Nixon wherein the Committee on the Judiciary
submitted the recommendation, the resolution, and the Articles of Impeachment to the body, and it
was the body who approved the resolution. It is not the body which initiates it. It only approves or
disapproves the resolution. So, on that score, probably the Committee on Style could help in
rearranging the words because we have to be very technical about this. I have been bringing with
me The Rules of the House of Representatives of the U.S. Congress. The Senate Rules are with
me. The proceedings on the case of Richard Nixon are with me. I have submitted my proposal, but
the Committee has already decided. Nevertheless, I just want to indicate this on record.

Thank you, Mr. Presiding Officer.70 (italics in the original; emphasis and underscoring supplied)
[II]
MR. MAAMBONG. I would just like to move for a reconsideration of the approval of Section 3 (3). My
reconsideration will not at all affect the substance, but it is only with keeping with the exact
formulation of the Rules of the House of Representatives of the United States regarding
impeachment.
I am proposing, Madam President, without doing damage to any of its provision, that on page 2,
Section 3 (3), from lines 17 to 18, we delete the words which read: "to initiate impeachment
proceedings" and the comma (,) and insert on line 19 after the word "resolution" the phrase WITH
THE ARTICLES, and then capitalize the letter "i" in "impeachment" and replace the word "by" with
OF, so that the whole section will now read: "A vote of at least one-third of all the Members of the
House shall be necessary either to affirm a resolution WITH THE ARTICLES of impeachment OF the
committee or to override its contrary resolution. The vote of each Member shall be recorded."
I already mentioned earlier yesterday that the initiation, as far as the House of Representatives of
the United States is concerned, really starts from the filing of the verified complaint and every
resolution to impeach always carries with it the Articles of Impeachment. As a matter of fact, the
words "Articles of Impeachment" are mentioned on line 25 in the case of the direct filing of a verified
complaint of one-third of all the Members of the House. I will mention again, Madam President, that
my amendment will not vary the substance in any way. It is only in keeping with the uniform
procedure of the House of Representatives of the United States Congress.
Thank you, Madam President.71 (emphasis and underscoring supplied)
To the next logical question of what ends or completes the initiation, Commissioners Bernas and
Regalado lucidly explained that the filing of the complaint must be accompanied by the referral to the
Committee on Justice, which is the action that sets the complaint moving. Francisco cannot be any
clearer in pointing out the material dates.
Having concluded that the initiation takes place by the act of filing of the impeachment complaint and
referral to the House Committee on Justice, the initial action taken thereon, the meaning of Section 3
(5) of Article XI becomes clear. Once an impeachment complaint has been initiated in the foregoing
manner, another may not be filed against the same official within a one year period following Article
XI, Section 3(5) of the Constitution.
In fine, considering that the first impeachment complaint was filed by former President Estrada
against Chief Justice Hilario G. Davide, Jr., along with seven associate justices of this Court,
on June 2, 2003 and referred to the House Committee on Justice on August 5, 2003,
the second impeachment complaint filed by Representatives Gilberto C. Teodoro, Jr. and Felix
William Fuentebella against the Chief Justice on October 23, 2003 violates the constitutional
prohibition against the initiation of impeachment proceedings against the same impeachable officer
within a one-year period.72 (emphasis, italics and underscoring supplied)
These clear pronouncements notwithstanding, petitioner posits that the date of referral was
considered irrelevant in Francisco. She submits that referral could not be the reckoning point of
initiation because "something prior to that had already been done," 73 apparently citing Bernas’
discussion.

The Court cannot countenance any attempt at obscurantism.
What the cited discussion was rejecting was the view that the House’s action on the committee
report initiates the impeachment proceedings. It did not state that to determine the initiating step,
absolutely nothing prior to it must be done. Following petitioner’s line of reasoning, the verification of
the complaint or the endorsement by a member of the House – steps done prior to the filing – would
already initiate the impeachment proceedings.
Contrary to petitioner’s emphasis on impeachment complaint, what the Constitution mentions is
impeachment "proceedings." Her reliance on the singular tense of the word "complaint" 74 to denote
the limit prescribed by the Constitution goes against the basic rule of statutory construction that a
word covers its enlarged and plural sense.75
The Court, of course, does not downplay the importance of an impeachment complaint, for it is the
matchstick that kindles the candle of impeachment proceedings. The filing of an impeachment
complaint is like the lighting of a matchstick. Lighting the matchstick alone, however, cannot light up
the candle, unless the lighted matchstick reaches or torches the candle wick. Referring the complaint
to the proper committee ignites the impeachment proceeding. With a simultaneous referral of
multiple complaints filed, more than one lighted matchsticks light the candle at the same time. What
is important is that there should only be ONE CANDLE that is kindled in a year, such that once the
candle starts burning, subsequent matchsticks can no longer rekindle the candle.
A restrictive interpretation renders the impeachment mechanism both illusive and illusory.
For one, it puts premium on senseless haste. Petitioner’s stance suggests that whoever files the first
impeachment complaint exclusively gets the attention of Congress which sets in motion an
exceptional once-a-year mechanism wherein government resources are devoted. A prospective
complainant, regardless of ill motives or best intentions, can wittingly or unwittingly desecrate the
entire process by the expediency of submitting a haphazard complaint out of sheer hope to be the
first in line. It also puts to naught the effort of other prospective complainants who, after diligently
gathering evidence first to buttress the case, would be barred days or even hours later from filing an
impeachment complaint.
Placing an exceedingly narrow gateway to the avenue of impeachment proceedings turns its
laudable purpose into a laughable matter. One needs only to be an early bird even without seriously
intending to catch the worm, when the process is precisely intended to effectively weed out "worms"
in high offices which could otherwise be ably caught by other prompt birds within the ultra-limited
season.
Moreover, the first-to-file scheme places undue strain on the part of the actual complainants, injured
party or principal witnesses who, by mere happenstance of an almost always unforeseeable filing of
a first impeachment complaint, would be brushed aside and restricted from directly participating in
the impeachment process.
Further, prospective complainants, along with their counsel and members of the House of
Representatives who sign, endorse and file subsequent impeachment complaints against the same
impeachable officer run the risk of violating the Constitution since they would have already initiated a
second impeachment proceeding within the same year. Virtually anybody can initiate a second or
third impeachment proceeding by the mere filing of endorsed impeachment complaints. Without any
public notice that could charge them with knowledge, even members of the House of
Representatives could not readily ascertain whether no other impeachment complaint has been filed
at the time of committing their endorsement.

The question as to who should administer or pronounce that an impeachment proceeding has been
initiated rests also on the body that administers the proceedings prior to the impeachment trial. As
gathered from Commissioner Bernas’ disquisition76 in Francisco, a proceeding which "takes place not
in the Senate but in the House"77precedes the bringing of an impeachment case to the Senate. In
fact, petitioner concedes that the initiation of impeachment proceedings is within the sole and
absolute control of the House of Representatives. 78 Conscious of the legal import of each step, the
House, in taking charge of its own proceedings, must deliberately decide to initiate an impeachment
proceeding, subject to the time frame and other limitations imposed by the Constitution. This
chamber of Congress alone, not its officers or members or any private individual, should own up to
its processes.
The Constitution did not place the power of the "final say" on the lips of the House Secretary General
who would otherwise be calling the shots in forwarding or freezing any impeachment complaint.
Referral of the complaint to the proper committee is not done by the House Speaker alone either,
which explains why there is a need to include it in the Order of Business of the House. It is the
House of Representatives, in public plenary session, which has the power to set its own chamber
into special operation by referring the complaint or to otherwise guard against the initiation of a
second impeachment proceeding by rejecting a patently unconstitutional complaint.
Under the Rules of the House, a motion to refer is not among those motions that shall be decided
without debate, but any debate thereon is only made subject to the five-minute rule. 79 Moreover, it is
common parliamentary practice that a motion to refer a matter or question to a committee may be
debated upon, not as to the merits thereof, but only as to the propriety of the referral. 80 With respect
to complaints for impeachment, the House has the discretion not to refer a subsequent impeachment
complaint to the Committee on Justice where official records and further debate show that an
impeachment complaint filed against the same impeachable officer has already been referred to the
said committee and the one year period has not yet expired, lest it becomes instrumental in
perpetrating a constitutionally prohibited second impeachment proceeding. Far from being
mechanical, before the referral stage, a period of deliberation is afforded the House, as the
Constitution, in fact, grants a maximum of three session days within which to make the proper
referral.
As mentioned, one limitation imposed on the House in initiating an impeachment proceeding deals
with deadlines. The Constitution states that "[a] verified complaint for impeachment may be filed by
any Member of the House of Representatives or by any citizen upon a resolution or endorsement by
any Member thereof, which shall be included in the Order of Business within ten session days, and
referred to the proper Committee within three session days thereafter."
In the present case, petitioner failed to establish grave abuse of discretion on the allegedly "belated"
referral of the first impeachment complaint filed by the Baraquel group. For while the said complaint
was filed on July 22, 2010, there was yet then no session in Congress. It was only four days later or
on July 26, 2010 that the 15th Congress opened from which date the 10-day session period started
to run. When, by Memorandum of August 2, 2010, Speaker Belmonte directed the Committee on
Rules to include the complaint in its Order of Business, it was well within the said 10-day session
period.81
There is no evident point in rushing at closing the door the moment an impeachment complaint is
filed. Depriving the people (recall that impeachment is primarily for the protection of the people as a
body politic) of reasonable access to the limited political vent simply prolongs the agony and
frustrates the collective rage of an entire citizenry whose trust has been betrayed by an impeachable
officer. It shortchanges the promise of reasonable opportunity to remove an impeachable officer
through the mechanism enshrined in the Constitution.

But neither does the Court find merit in respondents’ alternative contention that the initiation of the
impeachment proceedings, which sets into motion the one-year bar, should include or await, at the
earliest, the Committee on Justice report. To public respondent, the reckoning point of initiation
should refer to the disposition of the complaint by the vote of at least one-third (1/3) of all the
members of the House.82 To the Reyes group, initiation means the act of transmitting the Articles of
Impeachment to the Senate.83 To respondent-intervenor, it should last until the Committee on
Justice’s recommendation to the House plenary.84
The Court, in Francisco, rejected a parallel thesis in which a related proposition was inputed in the
therein assailed provisions of the Impeachment Rules of the 12th Congress. The present case
involving an impeachment proceeding against the Ombudsman offers no cogent reason for the
Court to deviate from what was settled inFrancisco that dealt with the impeachment proceeding
against the then Chief Justice. To change the reckoning point of initiation on no other basis but to
accommodate the socio-political considerations of respondents does not sit well in a court of law.
x x x We ought to be guided by the doctrine of stare decisis et non quieta movere. This doctrine,
which is really "adherence to precedents," mandates that once a case has been decided one way,
then another case involving exactly the same point at issue should be decided in the same manner.
This doctrine is one of policy grounded on the necessity for securing certainty and stability of judicial
decisions. As the renowned jurist Benjamin Cardozo stated in his treatise The Nature of the Judicial
Process:
It will not do to decide the same question one way between one set of litigants and the opposite way
between another. "If a group of cases involves the same point, the parties expect the same decision.
It would be a gross injustice to decide alternate cases on opposite principles. If a case was decided
against me yesterday when I was a defendant, I shall look for the same judgment today if I am
plaintiff. To decide differently would raise a feeling of resentment and wrong in my breast; it would be
an infringement, material and moral, of my rights." Adherence to precedent must then be the rule
rather than the exception if litigants are to have faith in the even-handed administration of justice in
the courts.85
As pointed out in Francisco, the impeachment proceeding is not initiated "when the House
deliberates on the resolution passed on to it by the Committee, because something prior to that has
already been done. The action of the House is already a further step in the proceeding, not its
initiation or beginning. Rather, the proceeding is initiated or begins, when a verified complaint is filed
and referred to the Committee on Justice for action. This is the initiating step which triggers the
series of steps that follow."86
Allowing an expansive construction of the term "initiate" beyond the act of referral allows the
unmitigated influx of successive complaints, each having their own respective 60-session-day period
of disposition from referral. Worse, the Committee shall conduct overlapping hearings until and
unless the disposition of one of the complaints ends with the affirmance of a resolution for
impeachment or the overriding87 of a contrary resolution (as espoused by public respondent), or the
House transmits the Articles of Impeachment (as advocated by the Reyes group), 88 or the Committee
on Justice concludes its first report to the House plenary regardless of the recommendation (as
posited by respondent-intervenor). Each of these scenarios runs roughshod the very purpose behind
the constitutionally imposed one-year bar. Opening the floodgates too loosely would disrupt the
series of steps operating in unison under one proceeding.
The Court does not lose sight of the salutary reason of confining only one impeachment proceeding
in a year. Petitioner concededly cites Justice Adolfo Azcuna’s separate opinion that concurred with
the Francisco ruling.89Justice Azcuna stated that the purpose of the one-year bar is two-fold: "to

prevent undue or too frequentharassment; and 2) to allow the legislature to do its principal task [of]
legislation," with main reference to the records of the Constitutional Commission, that reads:
MR. ROMULO. Yes, the intention here really is to limit. This is not only to protect public officials who,
in this case, are of the highest category from harassment but also to allow the legislative body to do
its work which is lawmaking. Impeachment proceedings take a lot of time. And if we allow multiple
impeachment charges on the same individual to take place, the legislature will do nothing else but
that.90 (underscoring supplied)
It becomes clear that the consideration behind the intended limitation refers to the element of time,
and not the number of complaints. The impeachable officer should defend himself in only one
impeachment proceeding, so that he will not be precluded from performing his official functions and
duties. Similarly, Congress should run only one impeachment proceeding so as not to leave it with
little time to attend to its main work of law-making. The doctrine laid down in Francisco that initiation
means filing and referral remains congruent to the rationale of the constitutional provision.
Petitioner complains that an impeachable officer may be subjected to harassment by the filing of
multiple impeachment complaints during the intervening period of a maximum of 13 session days
between the date of the filing of the first impeachment complaint to the date of referral.
As pointed out during the oral arguments91 by the counsel for respondent-intervenor, the framework
of privilege and layers of protection for an impeachable officer abound. The requirements or
restrictions of a one-year bar, a single proceeding, verification of complaint, endorsement by a
House member, and a finding of sufficiency of form and substance – all these must be met before
bothering a respondent to answer – already weigh heavily in favor of an impeachable officer.
Aside from the probability of an early referral and the improbability of inclusion in the agenda of a
complaint filed on the 11th hour (owing to pre-agenda standard operating procedure), the number of
complaints may still be filtered or reduced to nil after the Committee decides once and for all on the
sufficiency of form and substance. Besides, if only to douse petitioner’s fear, a complaint will not last
the primary stage if it does not have the stated preliminary requisites.
To petitioner, disturbance of her performance of official duties and the deleterious effects of bad
publicity are enough oppression.
Petitioner’s claim is based on the premise that the exertion of time, energy and other resources runs
directly proportional to the number of complaints filed. This is non sequitur. What the Constitution
assures an impeachable officer is not freedom from arduous effort to defend oneself, which depends
on the qualitative assessment of the charges and evidence and not on the quantitative aspect of
complaints or offenses. In considering the side of the impeachable officers, the Constitution does not
promise an absolutely smooth ride for them, especially if the charges entail genuine and grave
issues. The framers of the Constitution did not concern themselves with the media tolerance level or
internal disposition of an impeachable officer when they deliberated on the impairment of
performance of official functions. The measure of protection afforded by the Constitution is that if the
impeachable officer is made to undergo such ride, he or she should be made to traverse it just once.
Similarly, if Congress is called upon to operate itself as a vehicle, it should do so just once. There is
no repeat ride for one full year. This is the whole import of the constitutional safeguard of one-year
bar rule.
Applicability of the Rules on Criminal Procedure

On another plane, petitioner posits that public respondent gravely abused its discretion when it
disregarded its own Impeachment Rules, the same rules she earlier chastised.
In the exercise of the power to promulgate rules "to effectively carry out" the provisions of Section 3,
Article XI of the Constitution, the House promulgated the Impeachment Rules, Section 16 of which
provides that "the Rules ofCriminal Procedure under the Rules of Court shall, as far as practicable,
apply to impeachment proceedings before the House."
Finding that the Constitution, by express grant, permits the application of additional adjective rules
that Congress may consider in effectively carrying out its mandate, petitioner either asserts or rejects
two procedural devices.
First is on the "one offense, one complaint" rule. By way of reference to Section 16 of the
Impeachment Rules, petitioner invokes the application of Section 13, Rule 110 of the Rules on
Criminal Procedure which states that "[a] complaint or information must charge only one offense,
except when the law prescribes a single punishment for various offenses." To petitioner, the two
impeachment complaints are insufficient in form and substance since each charges her with both
culpable violation of the Constitution and betrayal of public trust. She concludes that public
respondent gravely abused its discretion when it disregarded its own rules.
Petitioner adds that heaping two or more charges in one complaint will confuse her in preparing her
defense; expose her to the grave dangers of the highly political nature of the impeachment process;
constitute a whimsical disregard of certain rules; impair her performance of official functions as well
as that of the House; and prevent public respondent from completing its report within the deadline.
Public respondent counters that there is no requirement in the Constitution that an impeachment
complaint must charge only one offense, and the nature of impeachable offenses precludes the
application of the above-said Rule on Criminal Procedure since the broad terms cannot be defined
with the same precision required in defining crimes. It adds that the determination of the grounds for
impeachment is an exercise of political judgment, which issue respondent-intervenor also considers
as non-justiciable, and to which the Baraquel group adds that impeachment is a political process and
not a criminal prosecution, during which criminal prosecution stage the complaint or information
referred thereto and cited by petitioner, unlike an impeachment complaint, must already be in the
name of the People of the Philippines.
The Baraquel group deems that there are provisions92 outside the Rules on Criminal Procedure that
are more relevant to the issue. Both the Baraquel and Reyes groups point out that even if Sec. 13 of
Rule 110 is made to apply, petitioner’s case falls under the exception since impeachment prescribes
a single punishment – removal from office and disqualification to hold any public office – even for
various offenses. Both groups also observe that petitioner concededly and admittedly was not keen
on pursuing this issue during the oral arguments.
Petitioner’s claim deserves scant consideration.
Without going into the effectiveness of the suppletory application of the Rules on Criminal
Procedure in carrying out the relevant constitutional provisions, which prerogative the Constitution
vests on Congress, and without delving into the practicability of the application of the one offense
per complaint rule, the initial determination of which must be made by the House 93 which has yet to
pass upon the question, the Court finds that petitioner’s invocation of that particular rule of Criminal
Procedure does not lie. Suffice it to state that the Constitution allows the indictment for multiple
impeachment offenses, with each charge representing an article of impeachment, assembled in one

set known as the "Articles of Impeachment."94 It, therefore, follows that an impeachment complaint
need not allege only one impeachable offense.
The second procedural matter deals with the rule on consolidation. In rejecting a consolidation,
petitioner maintains that the Constitution allows only one impeachment complaint against her within
one year.
Records show that public respondent disavowed any immediate need to consolidate. Its chairperson
Rep. Tupas stated that "[c]onsolidation depends on the Committee whether to consolidate[;
c]onsolidation may come today or may come later on after determination of the sufficiency in form
and substance," and that "for purposes of consolidation, the Committee will decide when is the time
to consolidate[, a]nd if, indeed, we need to consolidate." 95 Petitioner’s petition, in fact, initially
describes the consolidation as merely "contemplated."96
Since public respondent, whether motu proprio or upon motion, did not yet order a consolidation, the
Court will not venture to make a determination on this matter, as it would be premature, conjectural
or anticipatory.97
Even if the Court assumes petitioner’s change of stance that the two impeachment complaints
were deemedconsolidated,98 her claim that consolidation is a legal anomaly fails. Petitioner’s theory
obviously springs from her "proceeding = complaint" equation which the Court already brushed
aside.
WHEREFORE, the petition is DISMISSED. The assailed Resolutions of September 1, 2010 and
September 7, 2010 of public respondent, the House of Representatives Committee on Justice,
are NOT UNCONSTITUTIONAL. The Status Quo Ante Order issued by the Court on September 14,
2010 is LIFTED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 173034

October 9, 2007

PHARMACEUTICAL AND HEALTH CARE ASSOCIATION OF THE PHILIPPINES, petitioner,
vs.
HEALTH SECRETARY FRANCISCO T. DUQUE III; HEALTH UNDER SECRETARIES DR.
ETHELYN P. NIETO, DR. MARGARITA M. GALON, ATTY. ALEXANDER A. PADILLA, & DR. JADE
F. DEL MUNDO; and ASSISTANT SECRETARIES DR. MARIO C. VILLAVERDE, DR. DAVID J.
LOZADA, AND DR. NEMESIO T. GAKO, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
The Court and all parties involved are in agreement that the best nourishment for an infant is
mother's milk. There is nothing greater than for a mother to nurture her beloved child straight from

her bosom. The ideal is, of course, for each and every Filipino child to enjoy the unequaled benefits
of breastmilk. But how should this end be attained?
Before the Court is a petition for certiorari under Rule 65 of the Rules of Court, seeking to nullify
Administrative Order (A.O.) No. 2006-0012 entitled, Revised Implementing Rules and
Regulations of Executive Order No. 51, Otherwise Known as The "Milk Code," Relevant
International Agreements, Penalizing Violations Thereof, and for Other Purposes (RIRR).
Petitioner posits that the RIRR is not valid as it contains provisions that are not constitutional and go
beyond the law it is supposed to implement.
Named as respondents are the Health Secretary, Undersecretaries, and Assistant Secretaries of the
Department of Health (DOH). For purposes of herein petition, the DOH is deemed impleaded as a
co-respondent since respondents issued the questioned RIRR in their capacity as officials of said
executive agency.1
Executive Order No. 51 (Milk Code) was issued by President Corazon Aquino on October 28, 1986
by virtue of the legislative powers granted to the president under the Freedom Constitution. One of
the preambular clauses of the Milk Code states that the law seeks to give effect to Article 112 of the
International Code of Marketing of Breastmilk Substitutes (ICMBS), a code adopted by the World
Health Assembly (WHA) in 1981. From 1982 to 2006, the WHA adopted several Resolutions to the
effect that breastfeeding should be supported, promoted and protected, hence, it should be ensured
that nutrition and health claims are not permitted for breastmilk substitutes.
In 1990, the Philippines ratified the International Convention on the Rights of the Child. Article 24 of
said instrument provides that State Parties should take appropriate measures to diminish infant and
child mortality, and ensure that all segments of society, specially parents and children, are informed
of the advantages of breastfeeding.
On May 15, 2006, the DOH issued herein assailed RIRR which was to take effect on July 7, 2006.
However, on June 28, 2006, petitioner, representing its members that are manufacturers of
breastmilk substitutes, filed the present Petition for Certiorari and Prohibition with Prayer for the
Issuance of a Temporary Restraining Order (TRO) or Writ of Preliminary Injunction.
The main issue raised in the petition is whether respondents officers of the DOH acted without or in
excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction,
and in violation of the provisions of the Constitution in promulgating the RIRR. 3
On August 15, 2006, the Court issued a Resolution granting a TRO enjoining respondents from
implementing the questioned RIRR.
After the Comment and Reply had been filed, the Court set the case for oral arguments on June 19,
2007. The Court issued an Advisory (Guidance for Oral Arguments) dated June 5, 2007, to wit:
The Court hereby sets the following issues:
1. Whether or not petitioner is a real party-in-interest;
2. Whether Administrative Order No. 2006-0012 or the Revised Implementing Rules and
Regulations (RIRR) issued by the Department of Health (DOH) is not constitutional;

2.1 Whether the RIRR is in accord with the provisions of Executive Order No. 51 (Milk Code);
2.2 Whether pertinent international agreements1 entered into by the Philippines are part of
the law of the land and may be implemented by the DOH through the RIRR; If in the
affirmative, whether the RIRR is in accord with the international agreements;
2.3 Whether Sections 4, 5(w), 22, 32, 47, and 52 of the RIRR violate the due process clause
and are in restraint of trade; and
2.4 Whether Section 13 of the RIRR on Total Effect provides sufficient standards.
_____________
1 (1) United Nations Convention on the Rights of the Child; (2) the WHO and Unicef "2002
Global Strategy on Infant and Young Child Feeding;" and (3) various World Health Assembly
(WHA) Resolutions.
The parties filed their respective memoranda.
The petition is partly imbued with merit.
On the issue of petitioner's standing
With regard to the issue of whether petitioner may prosecute this case as the real party-in-interest,
the Court adopts the view enunciated in Executive Secretary v. Court of Appeals, 4 to wit:
The modern view is that an association has standing to complain of injuries to its members.
This view fuses the legal identity of an association with that of its members. An association
has standing to file suit for its workers despite its lack of direct interest if its members
are affected by the action. An organization has standing to assert the concerns of its
constituents.
xxxx
x x x We note that, under its Articles of Incorporation, the respondent was organized x x x to
act as the representative of any individual, company, entity or association on matters related
to the manpower recruitment industry, and to perform other acts and activities necessary to
accomplish the purposes embodied therein. The respondent is, thus, the appropriate
party to assert the rights of its members, because it and its members are in every
practical sense identical. x x x The respondent [association] is but the medium
through which its individual members seek to make more effective the expression of
their voices and the redress of their grievances. 5 (Emphasis supplied)
which was reasserted in Purok Bagong Silang Association, Inc. v. Yuipco,6 where the Court ruled that
an association has the legal personality to represent its members because the results of the case
will affect their vital interests.7
Herein petitioner's Amended Articles of Incorporation contains a similar provision just like in
Executive Secretary, that the association is formed "to represent directly or through approved
representatives the pharmaceutical and health care industry before the Philippine Government and
any of its agencies, the medical professions and the general public."8 Thus, as an organization,

petitioner definitely has an interest in fulfilling its avowed purpose of representing members who are
part of the pharmaceutical and health care industry. Petitioner is duly authorized 9to take the
appropriate course of action to bring to the attention of government agencies and the courts any
grievance suffered by its members which are directly affected by the RIRR. Petitioner, which is
mandated by its Amended Articles of Incorporation to represent the entire industry, would be remiss
in its duties if it fails to act on governmental action that would affect any of its industry members, no
matter how few or numerous they are. Hence, petitioner, whose legal identity is deemed fused with
its members, should be considered as a real party-in-interest which stands to be benefited or injured
by any judgment in the present action.
On the constitutionality of the provisions of the RIRR
First, the Court will determine if pertinent international instruments adverted to by respondents are
part of the law of the land.
Petitioner assails the RIRR for allegedly going beyond the provisions of the Milk Code, thereby
amending and expanding the coverage of said law. The defense of the DOH is that the RIRR
implements not only the Milk Code but also various international instruments 10 regarding infant and
young child nutrition. It is respondents' position that said international instruments are deemed part
of the law of the land and therefore the DOH may implement them through the RIRR.
The Court notes that the following international instruments invoked by respondents, namely: (1) The
United Nations Convention on the Rights of the Child; (2) The International Covenant on Economic,
Social and Cultural Rights; and (3) the Convention on the Elimination of All Forms of Discrimination
Against Women, only provide in general terms that steps must be taken by State Parties to diminish
infant and child mortality and inform society of the advantages of breastfeeding, ensure the health
and well-being of families, and ensure that women are provided with services and nutrition in
connection with pregnancy and lactation. Said instruments do not contain specific provisions
regarding the use or marketing of breastmilk substitutes.
The international instruments that do have specific provisions regarding breastmilk substitutes are
the ICMBS and various WHA Resolutions.
Under the 1987 Constitution, international law can become part of the sphere of domestic law either
bytransformation or incorporation.11 The transformation method requires that an international law
be transformed into a domestic law through a constitutional mechanism such as local legislation.
The incorporation method applies when, by mere constitutional declaration, international law is
deemed to have the force of domestic law.12
Treaties become part of the law of the land through transformation pursuant to Article VII, Section
21 of the Constitution which provides that "[n]o treaty or international agreement shall be valid and
effective unless concurred in by at least two-thirds of all the members of the Senate." Thus, treaties
or conventional international law must go through a process prescribed by the Constitution for it to
be transformed into municipal law that can be applied to domestic conflicts. 13
The ICMBS and WHA Resolutions are not treaties as they have not been concurred in by at least
two-thirds of all members of the Senate as required under Section 21, Article VII of the 1987
Constitution.
However, the ICMBS which was adopted by the WHA in 1981 had been transformed into domestic
law through local legislation, the Milk Code. Consequently, it is the Milk Code that has the force and
effect of law in this jurisdiction and not the ICMBS per se.

The Milk Code is almost a verbatim reproduction of the ICMBS, but it is well to emphasize at this
point that the Code did not adopt the provision in the ICMBS absolutely prohibiting advertising or
other forms of promotion to the general public of products within the scope of the ICMBS.
Instead, the Milk Code expressly provides that advertising, promotion, or other marketing
materials may be allowed if such materials are duly authorized and approved by the InterAgency Committee (IAC).
On the other hand, Section 2, Article II of the 1987 Constitution, to wit:
SECTION 2. The Philippines renounces war as an instrument of national policy, adopts the
generally accepted principles of international law as part of the law of the land and
adheres to the policy of peace, equality, justice, freedom, cooperation and amity with all
nations. (Emphasis supplied)
embodies the incorporation method.14
In Mijares v. Ranada,15 the Court held thus:
[G]enerally 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 formulation in international law sees those customary rules
accepted as binding result from the combination [of] 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.16 (Emphasis supplied)
"Generally accepted principles of international law" refers to norms of general or customary
international law which are binding on all states, 17 i.e., renunciation of war as an instrument of
national policy, the principle of sovereign immunity,18 a person's right to life, liberty and due
process,19 and pacta sunt servanda,20 among others. The concept of "generally accepted principles
of law" has also been depicted in this wise:
Some legal scholars and judges look upon certain "general principles of law" as a primary source of
international law because they have the "character of jus rationale" and are "valid through all
kinds of human societies." (Judge Tanaka in his dissenting opinion in the 1966 South West Africa
Case, 1966 I.C.J. 296). O'Connell holds that certain priniciples are part of international law
because they are "basic to legal systems generally" and hence part of the jus gentium. These
principles, he believes, are established by a process of reasoning based on the common identity of
all legal systems. If there should be doubt or disagreement, one must look to state practice and
determine whether the municipal law principle provides a just and acceptable solution. x x
x 21 (Emphasis supplied)
Fr. Joaquin G. Bernas defines customary international law as follows:
Custom or customary international law means "a general and consistent practice of states
followed by them from a sense of legal obligation [opinio juris]." (Restatement) This
statement contains the two basic elements of custom: the material factor, that is, how
states behave, and the psychological orsubjective factor, that is, why they behave the
way they do.

xxxx
The initial factor for determining the existence of custom is the actual behavior of states. This
includes several elements: duration, consistency, and generality of the practice of states.
The required duration can be either short or long. x x x
xxxx
Duration therefore is not the most important element. More important is the consistency and
the generality of the practice. x x x
xxxx
Once the existence of state practice has been established, it becomes necessary to
determine why states behave the way they do. Do states behave the way they do
because they consider it obligatory to behave thus or do they do it only as a matter of
courtesy? Opinio juris, or the belief that a certain form of behavior is obligatory, is
what makes practice an international rule. Without it, practice is not law.22 (Underscoring
and Emphasis supplied)
Clearly, customary international law is deemed incorporated into our domestic system. 23
WHA Resolutions have not been embodied in any local legislation. Have they attained the status of
customary law and should they then be deemed incorporated as part of the law of the land?
The World Health Organization (WHO) is one of the international specialized agencies allied with the
United Nations (UN) by virtue of Article 57,24 in relation to Article 6325 of the UN Charter. Under the
1946 WHO Constitution, it is the WHA which determines the policies of the WHO,26 and has the
power to adopt regulations concerning "advertising and labeling of biological, pharmaceutical and
similar products moving in international commerce,"27 and to "make recommendations to members
with respect to any matter within the competence of the Organization."28 The legal effect of its
regulations, as opposed to recommendations, is quite different.
Regulations, along with conventions and agreements, duly adopted by the WHA bind member
states thus:
Article 19. The Health Assembly shall have authority to adopt conventions or agreements
with respect to any matter within the competence of the Organization. A two-thirds vote of the
Health Assembly shall be required for the adoption of such conventions or agreements,
which shall come into force for each Member when accepted by it in accordance with
its constitutional processes.
Article 20. Each Member undertakes that it will, within eighteen months after the adoption
by the Health Assembly of a convention or agreement, take action relative to the
acceptance of such convention or agreement. Each Member shall notify the DirectorGeneral of the action taken, and if it does not accept such convention or agreement within
the time limit, it will furnish a statement of the reasons for non-acceptance. In case of
acceptance, each Member agrees to make an annual report to the Director-General in
accordance with Chapter XIV.

Article 21. The Health Assembly shall have authority to adopt regulations concerning: (a)
sanitary and quarantine requirements and other procedures designed to prevent the
international spread of disease; (b) nomenclatures with respect to diseases, causes of death
and public health practices; (c) standards with respect to diagnostic procedures for
international use; (d) standards with respect to the safety, purity and potency of biological,
pharmaceutical and similar products moving in international commerce; (e) advertising and
labeling of biological, pharmaceutical and similar products moving in international commerce.
Article 22. Regulations adopted pursuant to Article 21 shall come into force for all
Members after due notice has been given of their adoption by the Health Assembly except
for such Members as may notify the Director-General of rejection or reservations within the
period stated in the notice. (Emphasis supplied)
On the other hand, under Article 23, recommendations of the WHA do not come into force for
members, in the same way that conventions or agreements under Article 19 and regulations under
Article 21 come into force. Article 23 of the WHO Constitution reads:
Article 23. The Health Assembly shall have authority to make recommendations to
Members with respect to any matter within the competence of the Organization. (Emphasis
supplied)
The absence of a provision in Article 23 of any mechanism by which the recommendation would
come into force for member states is conspicuous.
The former Senior Legal Officer of WHO, Sami Shubber, stated that WHA recommendations are
generally not binding, but they "carry moral and political weight, as they constitute the judgment on a
health issue of the collective membership of the highest international body in the field of
health."29 Even the ICMBS itself was adopted as a mere recommendation, as WHA Resolution No.
34.22 states:
"The Thirty-Fourth World Health Assembly x x x adopts, in the sense of Article 23 of the
Constitution, the International Code of Marketing of Breastmilk Substitutes annexed to the
present resolution." (Emphasis supplied)
The Introduction to the ICMBS also reads as follows:
In January 1981, the Executive Board of the World Health Organization at its sixty-seventh
session, considered the fourth draft of the code, endorsed it, and unanimously
recommended to the Thirty-fourth World Health Assembly the text of a resolution by which it
would adopt the code in the form of a recommendation rather than a regulation. x x x
(Emphasis supplied)
The legal value of WHA Resolutions as recommendations is summarized in Article 62 of the WHO
Constitution, to wit:
Art. 62. Each member shall report annually on the action taken with respect to
recommendations made to it by the Organization, and with respect to conventions,
agreements and regulations.
Apparently, the WHA Resolution adopting the ICMBS and subsequent WHA Resolutions urging
member states to implement the ICMBS are merely recommendatory and legally non-binding. Thus,

unlike what has been done with the ICMBS whereby the legislature enacted most of the
provisions into law which is the Milk Code, the subsequent WHA Resolutions,30 specifically
providing for exclusive breastfeeding from 0-6 months, continued breastfeeding up to 24
months, and absolutely prohibiting advertisements and promotions of breastmilk substitutes,
have not been adopted as a domestic law.
It is propounded that WHA Resolutions may constitute "soft law" or non-binding norms, principles
and practices that influence state behavior.31
"Soft law" does not fall into any of the categories of international law set forth in Article 38, Chapter
III of the 1946 Statute of the International Court of Justice. 32 It is, however, an expression of nonbinding norms, principles, and practices that influence state behavior.33 Certain declarations and
resolutions of the UN General Assembly fall under this category.34 The most notable is the UN
Declaration of Human Rights, which this Court has enforced in various cases,
specifically, Government of Hongkong Special Administrative Region v. Olalia,35 Mejoff v. Director of
Prisons,36 Mijares v. Rañada37 and Shangri-la International Hotel Management, Ltd. v. Developers
Group of Companies, Inc..38
The World Intellectual Property Organization (WIPO), a specialized agency attached to the UN with
the mandate to promote and protect intellectual property worldwide, has resorted to soft law as a
rapid means of norm creation, in order "to reflect and respond to the changing needs and demands
of its constituents."39 Other international organizations which have resorted to soft law include the
International Labor Organization and the Food and Agriculture Organization (in the form of
the Codex Alimentarius).40
WHO has resorted to soft law. This was most evident at the time of the Severe Acute Respiratory
Syndrome (SARS) and Avian flu outbreaks.
Although the IHR Resolution does not create new international law binding on WHO
member states, it provides an excellent example of the power of "soft law" in
international relations. International lawyers typically distinguish binding rules of
international law-"hard law"-from non-binding norms, principles, and practices that
influence state behavior-"soft law." WHO has during its existence generated many
soft law norms, creating a "soft law regime" in international governance for public
health.
The "soft law" SARS and IHR Resolutions represent significant steps in laying the political
groundwork for improved international cooperation on infectious diseases. These resolutions
clearly define WHO member states' normative duty to cooperate fully with other countries
and with WHO in connection with infectious disease surveillance and response to outbreaks.
This duty is neither binding nor enforceable, but, in the wake of the SARS epidemic,
the duty is powerful politically for two reasons. First, the SARS outbreak has taught the
lesson that participating in, and enhancing, international cooperation on infectious disease
controls is in a country's self-interest x x x if this warning is heeded, the "soft law" in the
SARS and IHR Resolution could inform the development of general and consistent state
practice on infectious disease surveillance and outbreak response, perhaps crystallizing
eventually into customary international law on infectious disease prevention and control. 41
In the Philippines, the executive department implemented certain measures recommended by WHO
to address the outbreaks of SARS and Avian flu by issuing Executive Order (E.O.) No. 201 on April
26, 2003 and E.O. No. 280 on February 2, 2004, delegating to various departments broad powers to

close down schools/establishments, conduct health surveillance and monitoring, and ban importation
of poultry and agricultural products.
It must be emphasized that even under such an international emergency, the duty of a state to
implement the IHR Resolution was still considered not binding or enforceable, although said
resolutions had great political influence.
As previously discussed, for an international rule to be considered as customary law, it must be
established that such rule is being followed by states because they consider it obligatory to comply
with such rules (opinio juris). Respondents have not presented any evidence to prove that the WHA
Resolutions, although signed by most of the member states, were in fact enforced or practiced by at
least a majority of the member states; neither have respondents proven that any compliance by
member states with said WHA Resolutions was obligatory in nature.
Respondents failed to establish that the provisions of pertinent WHA Resolutions are customary
international law that may be deemed part of the law of the land.
Consequently, legislation is necessary to transform the provisions of the WHA Resolutions into
domestic law. The provisions of the WHA Resolutions cannot be considered as part of the law
of the land that can be implemented by executive agencies without the need of a law enacted
by the legislature.
Second, the Court will determine whether the DOH may implement the provisions of the WHA
Resolutions by virtue of its powers and functions under the Revised Administrative Code even in the
absence of a domestic law.
Section 3, Chapter 1, Title IX of the Revised Administrative Code of 1987 provides that the DOH
shall define the national health policy and implement a national health plan within the framework
of the government's general policies and plans, and issue orders and regulations concerning the
implementation of established health policies.
It is crucial to ascertain whether the absolute prohibition on advertising and other forms of promotion
of breastmilk substitutes provided in some WHA Resolutions has been adopted as part of the
national health policy.
Respondents submit that the national policy on infant and young child feeding is embodied in A.O.
No. 2005-0014, dated May 23, 2005. Basically, the Administrative Order declared the following policy
guidelines: (1) ideal breastfeeding practices, such as early initiation of breastfeeding, exclusive
breastfeeding for the first six months, extended breastfeeding up to two years and beyond; (2)
appropriate complementary feeding, which is to start at age six months; (3) micronutrient
supplementation; (4) universal salt iodization; (5) the exercise of other feeding options; and (6)
feeding in exceptionally difficult circumstances. Indeed, the primacy of breastfeeding for children is
emphasized as a national health policy. However, nowhere in A.O. No. 2005-0014 is it declared
that as part of such health policy, the advertisement or promotion of breastmilk substitutes
should be absolutely prohibited.
The national policy of protection, promotion and support of breastfeeding cannot automatically be
equated with a total ban on advertising for breastmilk substitutes.
In view of the enactment of the Milk Code which does not contain a total ban on the advertising and
promotion of breastmilk substitutes, but instead, specifically creates an IAC which will regulate said

advertising and promotion, it follows that a total ban policy could be implemented only pursuant to a
law amending the Milk Code passed by the constitutionally authorized branch of government, the
legislature.
Thus, only the provisions of the Milk Code, but not those of subsequent WHA Resolutions, can
be validly implemented by the DOH through the subject RIRR.
Third, the Court will now determine whether the provisions of the RIRR are in accordance with those
of the Milk Code.
In support of its claim that the RIRR is inconsistent with the Milk Code, petitioner alleges the
following:
1. The Milk Code limits its coverage to children 0-12 months old, but the RIRR extended its
coverage to "young children" or those from ages two years old and beyond:

MILK CODE

RIRR

WHEREAS, in order to ensure that safe and
Section 2. Purpose – These Revised Rules
adequate nutrition for infants is provided, there and Regulations are hereby promulgated to
is a need to protect and promote breastfeeding ensure the provision of safe and adequate
and to inform the public about the proper use of nutrition for infants and young children by the
breastmilk substitutes and supplements and
promotion, protection and support of
related products through adequate, consistent breastfeeding and by ensuring the proper use
and objective information and appropriate
of breastmilk substitutes, breastmilk
regulation of the marketing and distribution of supplements and related products when these
the said substitutes, supplements and related are medically indicated and only when
products;
necessary, on the basis of adequate
information and through appropriate marketing
SECTION 4(e). "Infant" means a person falling and distribution.
within the age bracket of 0-12 months.
Section 5(ff). "Young Child" means a person
from the age of more than twelve (12) months
up to the age of three (3) years (36 months).

2. The Milk Code recognizes that infant formula may be a proper and possible substitute for
breastmilk in certain instances; but the RIRR provides "exclusive breastfeeding for infants
from 0-6 months" and declares that "there is no substitute nor replacement for breastmilk":

MILK CODE

RIRR

WHEREAS, in order to ensure that safe and
Section 4. Declaration of Principles – The
adequate nutrition for infants is provided, there following are the underlying principles from
is a need to protect and promote breastfeeding which the revised rules and regulations are
and to inform the public about the proper use of

breastmilk substitutes and supplements and
related products through adequate, consistent
and objective information and appropriate
regulation of the marketing and distribution of
the said substitutes, supplements and related
products;

premised upon:
a. Exclusive breastfeeding is for infants from 0
to six (6) months.
b. There is no substitute or replacement for
breastmilk.

3. The Milk Code only regulates and does not impose unreasonable requirements for
advertising and promotion; RIRR imposes an absolute ban on such activities for breastmilk
substitutes intended for infants from 0-24 months old or beyond, and forbids the use of
health and nutritional claims. Section 13 of the RIRR, which provides for a "total effect" in the
promotion of products within the scope of the Code, is vague:

MILK CODE

RIRR

SECTION 6. The General Public and
Mothers. –

Section 4. Declaration of Principles – The
following are the underlying principles from
which the revised rules and regulations are
premised upon:

(a) No advertising, promotion or other
marketing materials, whether written, audio or
visual, for products within the scope of this
Code shall be printed, published, distributed,
exhibited and broadcast unless such materials
are duly authorized and approved by an interagency committee created herein pursuant to
the applicable standards provided for in this
Code.

xxxx
f. Advertising, promotions, or sponsor-shipsof
infant formula, breastmilk substitutes and other
related products are prohibited.
Section 11. Prohibition – No advertising,
promotions, sponsorships, or marketing
materials and activities for breastmilk
substitutes intended for infants and young
children up to twenty-four (24) months, shall be
allowed, because they tend to convey or give
subliminal messages or impressions that
undermine breastmilk and breastfeeding or
otherwise exaggerate breastmilk substitutes
and/or replacements, as well as related
products covered within the scope of this Code.
Section 13. "Total Effect" - Promotion of
products within the scope of this Code must be
objective and should not equate or make the
product appear to be as good or equal to
breastmilk or breastfeeding in the advertising
concept. It must not in any case undermine
breastmilk or breastfeeding. The "total effect"
should not directly or indirectly suggest that

buying their product would produce better
individuals, or resulting in greater love,
intelligence, ability, harmony or in any manner
bring better health to the baby or other such
exaggerated and unsubstantiated claim.
Section 15. Content of Materials. - The
following shall not be included in advertising,
promotional and marketing materials:
a. Texts, pictures, illustrations or information
which discourage or tend to undermine the
benefits or superiority of breastfeeding or which
idealize the use of breastmilk substitutes and
milk supplements. In this connection, no
pictures of babies and children together with
their mothers, fathers, siblings, grandparents,
other relatives or caregivers (or yayas) shall be
used in any advertisements for infant formula
and breastmilk supplements;
b. The term "humanized," "maternalized,"
"close to mother's milk" or similar words in
describing breastmilk substitutes or milk
supplements;
c. Pictures or texts that idealize the use of
infant and milk formula.
Section 16. All health and nutrition claims for
products within the scope of the Code are
absolutely prohibited. For this purpose, any
phrase or words that connotes to increase
emotional, intellectual abilities of the infant and
young child and other like phrases shall not be
allowed.

4. The RIRR imposes additional labeling requirements not found in the Milk Code:

MILK CODE

SECTION 10. Containers/Label. –

RIRR

Section 26. Content – Each container/label
shall contain such message, in both Filipino
(a) Containers and/or labels shall be designed and English languages, and which message
to provide the necessary information about the cannot be readily separated therefrom, relative

appropriate use of the products, and in such a the following points:
way as not to discourage breastfeeding.
(a) The words or phrase "Important Notice" or
(b) Each container shall have a clear,
"Government Warning" or their equivalent;
conspicuous and easily readable and
understandable message in Pilipino or English (b) A statement of the superiority of
printed on it, or on a label, which message can breastfeeding;
not readily become separated from it, and
which shall include the following points:
(c) A statement that there is no substitute for
(i) the words "Important Notice" or their
equivalent;
(ii) a statement of the superiority of
breastfeeding;

breastmilk;
(d) A statement that the product shall be used
only on the advice of a health worker as to the
need for its use and the proper methods of use;

(e) Instructions for appropriate prepara-tion,
(iii) a statement that the product shall be used and a warning against the health hazards of
only on the advice of a health worker as to the inappropriate preparation; and
need for its use and the proper methods of use;
and
(f) The health hazards of unnecessary or
(iv) instructions for appropriate preparation,
and a warning against the health hazards of
inappropriate preparation.

improper use of infant formula and other
related products including information that
powdered infant formula may contain
pathogenic microorganisms and must be
prepared and used appropriately.

5. The Milk Code allows dissemination of information on infant formula to health
professionals; the RIRR totally prohibits such activity:

MILK CODE

RIRR

SECTION 7. Health Care System. –

Section 22. No manufacturer, distributor, or
representatives of products covered by the
Code shall be allowed to conduct or be
involved in any activity on breastfeeding
promotion, education and production of
Information, Education and Communication
(IEC) materials on breastfeeding, holding of or
participating as speakers in classes or
seminars for women and children activities and
to avoid the use of these venues to market
their brands or company names.

(b) No facility of the health care system shall
be used for the purpose of promoting infant
formula or other products within the scope of
this Code. This Code does not, however,
preclude the dissemination of information to
health professionals as provided in Section
8(b).
SECTION 8. Health Workers. -

(b) Information provided by manufacturers and SECTION 16. All health and nutrition claims for
distributors to health professionals regarding products within the scope of the Code are
products within the scope of this Code shall be absolutely prohibited. For this purpose, any

restricted to scientific and factual matters and
such information shall not imply or create a
belief that bottle-feeding is equivalent or
superior to breastfeeding. It shall also include
the information specified in Section 5(b).

phrase or words that connotes to increase
emotional, intellectual abilities of the infant and
young child and other like phrases shall not be
allowed.

6. The Milk Code permits milk manufacturers and distributors to extend assistance in
research and continuing education of health professionals; RIRR absolutely forbids the
same.

MILK CODE

RIRR

SECTION 8. Health Workers –

Section 4. Declaration of Principles –

(e) Manufacturers and distributors of products
within the scope of this Code may assist in the
research, scholarships and continuing
education, of health professionals,in
accordance with the rules and regulations
promulgated by the Ministry of Health.

The following are the underlying principles from
which the revised rules and regulations are
premised upon:
i. Milk companies, and their
representatives,should not form part of any
policymaking body or entity in relation to the
advancement of breasfeeding.
SECTION 22. No manufacturer, distributor, or
representatives of products covered by the
Code shall be allowed to conduct or be
involved in any activity on breastfeeding
promotion, education and production of
Information, Education and Communication
(IEC) materials on breastfeeding, holding of or
participating as speakers in classes or
seminars for women and children activitiesand
to avoid the use of these venues to market
their brands or company names.
SECTION 32. Primary Responsibility of
Health Workers - It is the primary
responsibility of the health workers to promote,
protect and support breastfeeding and
appropriate infant and young child feeding.
Part of this responsibility is to continuously
update their knowledge and skills on
breastfeeding. No assistance, support, logistics
or training from milk companies shall be
permitted.

7. The Milk Code regulates the giving of donations; RIRR absolutely prohibits it.

MILK CODE

RIRR

SECTION 6. The General Public and
Mothers. –

Section 51. Donations Within the Scope of
This Code - Donations of products, materials,
defined and covered under the Milk Code and
these implementing rules and regulations, shall
(f) Nothing herein contained shall prevent
donations from manufacturers and distributors be strictly prohibited.
of products within the scope of this Code upon
request by or with the approval of the Ministry Section 52. Other Donations By Milk
of Health.
Companies Not Covered by this Code. Donations of products, equipments, and the
like, not otherwise falling within the scope of
this Code or these Rules, given by milk
companies and their agents, representatives,
whether in kind or in cash, may only be
coursed through the Inter Agency Committee
(IAC), which shall determine whether such
donation be accepted or otherwise.

8. The RIRR provides for administrative sanctions not imposed by the Milk Code.

MILK CODE

RIRR

Section 46. Administrative Sanctions. –The
following administrative sanctions shall be
imposed upon any person, juridical or natural,
found to have violated the provisions of the
Code and its implementing Rules and
Regulations:
a) 1st violation – Warning;
b) 2nd violation – Administrative fine of a
minimum of Ten Thousand (P10,000.00) to
Fifty Thousand (P50,000.00) Pesos, depending
on the gravity and extent of the violation,
including the recall of the offending product;
c) 3rd violation – Administrative Fine of a
minimum of Sixty Thousand (P60,000.00) to
One Hundred Fifty Thousand (P150,000.00)
Pesos, depending on the gravity and extent of
the violation, and in addition thereto, the recall

of the offending product, and suspension of the
Certificate of Product Registration (CPR);
d) 4th violation –Administrative Fine of a
minimum of Two Hundred Thousand
(P200,000.00) to Five Hundred (P500,000.00)
Thousand Pesos, depending on the gravity and
extent of the violation; and in addition thereto,
the recall of the product, revocation of the
CPR, suspension of the License to Operate
(LTO) for one year;
e) 5th and succeeding repeated violations –
Administrative Fine of One Million
(P1,000,000.00) Pesos, the recall of the
offending product, cancellation of the CPR,
revocation of the License to Operate (LTO) of
the company concerned, including the
blacklisting of the company to be furnished the
Department of Budget and Management
(DBM) and the Department of Trade and
Industry (DTI);
f) An additional penalty of Two Thou-sand Five
Hundred (P2,500.00) Pesos per day shall be
made for every day the violation continues
after having received the order from the IAC or
other such appropriate body, notifying and
penalizing the company for the infraction.
For purposes of determining whether or not
there is "repeated" violation, each product
violation belonging or owned by a company,
including those of their subsidiaries, are
deemed to be violations of the concerned milk
company and shall not be based on the
specific violating product alone.

9. The RIRR provides for repeal of existing laws to the contrary.
The Court shall resolve the merits of the allegations of petitioner seriatim.
1. Petitioner is mistaken in its claim that the Milk Code's coverage is limited only to children 0-12
months old. Section 3 of the Milk Code states:
SECTION 3. Scope of the Code – The Code applies to the marketing, and practices related
thereto, of the following products: breastmilk substitutes, including infant formula; other milk
products, foods and beverages, including bottle-fed complementary foods, when marketed or

otherwise represented to be suitable, with or without modification, for use as a partial or total
replacement of breastmilk; feeding bottles and teats. It also applies to their quality and
availability, and to information concerning their use.
Clearly, the coverage of the Milk Code is not dependent on the age of the child but on the kind of
product being marketed to the public. The law treats infant formula, bottle-fed complementary food,
and breastmilk substitute as separate and distinct product categories.
Section 4(h) of the Milk Code defines infant formula as "a breastmilk substitute x x x to satisfy the
normal nutritional requirements of infants up to between four to six months of age, and adapted to
their physiological characteristics"; while under Section 4(b), bottle-fed complementary food refers to
"any food, whether manufactured or locally prepared, suitable as a complement to breastmilk or
infant formula, when either becomes insufficient to satisfy the nutritional requirements of the infant."
An infant under Section 4(e) is a person falling within the age bracket 0-12 months. It is the
nourishment of this group of infants or children aged 0-12 months that is sought to be promoted and
protected by the Milk Code.
But there is another target group. Breastmilk substitute is defined under Section 4(a) as "any food
being marketed or otherwise presented as a partial or total replacement for breastmilk, whether or
not suitable for that purpose."This section conspicuously lacks reference to any particular agegroup of children. Hence, the provision of the Milk Code cannot be considered exclusive for
children aged 0-12 months. In other words, breastmilk substitutes may also be intended for young
children more than 12 months of age. Therefore, by regulating breastmilk substitutes, the Milk Code
also intends to protect and promote the nourishment of children more than 12 months old.
Evidently, as long as what is being marketed falls within the scope of the Milk Code as provided in
Section 3, then it can be subject to regulation pursuant to said law, even if the product is to be used
by children aged over 12 months.
There is, therefore, nothing objectionable with Sections 242 and 5(ff)43 of the RIRR.
2. It is also incorrect for petitioner to say that the RIRR, unlike the Milk Code, does not recognize that
breastmilk substitutes may be a proper and possible substitute for breastmilk.
The entirety of the RIRR, not merely truncated portions thereof, must be considered and construed
together. As held in De Luna v. Pascual,44 "[t]he particular words, clauses and phrases in the Rule
should not be studied as detached and isolated expressions, but the whole and every part thereof
must be considered in fixing the meaning of any of its parts and in order to produce a harmonious
whole."
Section 7 of the RIRR provides that "when medically indicated and only when necessary, the use of
breastmilk substitutes is proper if based on complete and updated information." Section 8 of the
RIRR also states that information and educational materials should include information on the proper
use of infant formula when the use thereof is needed.
Hence, the RIRR, just like the Milk Code, also recognizes that in certain cases, the use of
breastmilk substitutes may be proper.
3. The Court shall ascertain the merits of allegations 345 and 446 together as they are interlinked with
each other.

To resolve the question of whether the labeling requirements and advertising regulations under the
RIRR are valid, it is important to deal first with the nature, purpose, and depth of the regulatory
powers of the DOH, as defined in general under the 1987 Administrative Code, 47 and as delegated in
particular under the Milk Code.
Health is a legitimate subject matter for regulation by the DOH (and certain other administrative
agencies) in exercise of police powers delegated to it. The sheer span of jurisprudence on that
matter precludes the need to further discuss it..48 However, health information, particularly advertising
materials on apparently non-toxic products like breastmilk substitutes and supplements, is a
relatively new area for regulation by the DOH.49
As early as the 1917 Revised Administrative Code of the Philippine Islands, 50 health information was
already within the ambit of the regulatory powers of the predecessor of DOH. 51 Section 938 thereof
charged it with the duty to protect the health of the people, and vested it with such powers as "(g) the
dissemination of hygienic information among the people and especially the inculcation of
knowledge as to the proper care of infantsand the methods of preventing and combating
dangerous communicable diseases."
Seventy years later, the 1987 Administrative Code tasked respondent DOH to carry out the state
policy pronounced under Section 15, Article II of the 1987 Constitution, which is "to protect and
promote the right to health of the people and instill health consciousness among them."52 To that
end, it was granted under Section 3 of the Administrative Code the power to "(6) propagate health
information and educate the populationon important health, medical and environmental matters
which have health implications."53
When it comes to information regarding nutrition of infants and young children, however, the Milk
Code specifically delegated to the Ministry of Health (hereinafter referred to as DOH) the power to
ensure that there is adequate, consistent and objective information on breastfeeding and use of
breastmilk substitutes, supplements and related products; and the power to control such
information. These are expressly provided for in Sections 12 and 5(a), to wit:
SECTION 12. Implementation and Monitoring –
xxxx
(b) The Ministry of Health shall be principally responsible for the implementation and
enforcement of the provisions of this Code. For this purpose, the Ministry of Health shall
have the following powers and functions:
(1) To promulgate such rules and regulations as are necessary or proper for the
implementation of this Code and the accomplishment of its purposes and objectives.
xxxx
(4) To exercise such other powers and functions as may be necessary for or
incidental to the attainment of the purposes and objectives of this Code.
SECTION 5. Information and Education –
(a) The government shall ensure that objective and consistent information is provided on
infant feeding, for use by families and those involved in the field of infant nutrition. This

responsibility shall cover the planning, provision, design and dissemination of information,
and the control thereof, on infant nutrition. (Emphasis supplied)
Further, DOH is authorized by the Milk Code to control the content of any information on
breastmilk vis-à-visbreastmilk substitutes, supplement and related products, in the following manner:
SECTION 5. x x x
(b) Informational and educational materials, whether written, audio, or visual, dealing with the
feeding of infants and intended to reach pregnant women and mothers of infants, shall
include clear information on all the following points: (1) the benefits and superiority of
breastfeeding; (2) maternal nutrition, and the preparation for and maintenance of
breastfeeding; (3) the negative effect on breastfeeding of introducing partial bottlefeeding; (4)
the difficulty of reversing the decision not to breastfeed; and (5) where needed, the proper
use of infant formula, whether manufactured industrially or home-prepared. When such
materials contain information about the use of infant formula, they shall include the
social and financial implications of its use; the health hazards of inappropriate foods
or feeding methods; and, in particular, the health hazards of unnecessary or improper
use of infant formula and other breastmilk substitutes. Such materials shall not use
any picture or text which may idealize the use of breastmilk substitutes.
SECTION 8. Health Workers –
xxxx
(b) Information provided by manufacturers and distributors to health professionals regarding
products within the scope of this Code shall be restricted to scientific and factual
matters, and such information shall not imply or create a belief that bottlefeeding is
equivalent or superior to breastfeeding. It shall also include the information specified
in Section 5(b).
SECTION 10. Containers/Label –
(a) Containers and/or labels shall be designed to provide the necessary information about
the appropriate use of the products, and in such a way as not to discourage
breastfeeding.
xxxx
(d) The term "humanized," "maternalized" or similar terms shall not be used. (Emphasis
supplied)
The DOH is also authorized to control the purpose of the information and to whom such information
may be disseminated under Sections 6 through 9 of the Milk Code54 to ensure that the information
that would reach pregnant women, mothers of infants, and health professionals and workers in the
health care system is restricted to scientific and factual matters and shall not imply or create a belief
that bottlefeeding is equivalent or superior to breastfeeding.
It bears emphasis, however, that the DOH's power under the Milk Code to control information
regarding breastmilk vis-a-vis breastmilk substitutes is not absolute as the power to control does

not encompass the power to absolutely prohibit the advertising, marketing, and promotion of
breastmilk substitutes.
The following are the provisions of the Milk Code that unequivocally indicate that the control over
information given to the DOH is not absolute and that absolute prohibition is not contemplated by the
Code:
a) Section 2 which requires adequate information and appropriate marketing and distribution
of breastmilk substitutes, to wit:
SECTION 2. Aim of the Code – The aim of the Code is to contribute to the provision
of safe and adequate nutrition for infants by the protection and promotion of
breastfeeding and by ensuring the proper use of breastmilk substitutes and
breastmilk supplements when these are necessary, on the basis of adequate
information and through appropriate marketing and distribution.
b) Section 3 which specifically states that the Code applies to the marketing of and practices
related to breastmilk substitutes, including infant formula, and to information concerning their
use;
c) Section 5(a) which provides that the government shall ensure that objective and
consistent information is provided on infant feeding;
d) Section 5(b) which provides that written, audio or visual informational and educational
materials shall not use any picture or text which may idealize the use of breastmilk
substitutes and should include information on the health hazards of unnecessary or improper
use of said product;
e) Section 6(a) in relation to Section 12(a) which creates and empowers the IAC to review
and examine advertising, promotion, and other marketing materials;
f) Section 8(b) which states that milk companies may provide information to health
professionals but such information should be restricted to factual and scientific matters and
shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding;
and
g) Section 10 which provides that containers or labels should not contain information that
would discourage breastfeeding and idealize the use of infant formula.
It is in this context that the Court now examines the assailed provisions of the RIRR regarding
labeling and advertising.
Sections 1355 on "total effect" and 2656 of Rule VII of the RIRR contain some labeling requirements,
specifically: a) that there be a statement that there is no substitute to breastmilk; and b) that there be
a statement that powdered infant formula may contain pathogenic microorganisms and must be
prepared and used appropriately. Section 1657 of the RIRR prohibits all health and nutrition claims for
products within the scope of the Milk Code, such as claims of increased emotional and intellectual
abilities of the infant and young child.
These requirements and limitations are consistent with the provisions of Section 8 of the Milk Code,
to wit:

SECTION 8. Health workers xxxx
(b) Information provided by manufacturers and distributors to health professionals regarding
products within the scope of this Code shall be restricted to scientific and factual matters,
and such informationshall not imply or create a belief that bottlefeeding
is equivalent or superior to breastfeeding. It shall also include the information specified in
Section 5.58 (Emphasis supplied)
and Section 10(d)59 which bars the use on containers and labels of the terms "humanized,"
"maternalized," or similar terms.
These provisions of the Milk Code expressly forbid information that would imply or create a belief
that there is any milk product equivalent to breastmilk or which is humanized or maternalized, as
such information would be inconsistent with the superiority of breastfeeding.
It may be argued that Section 8 of the Milk Code refers only to information given to health workers
regarding breastmilk substitutes, not to containers and labels thereof. However, such restrictive
application of Section 8(b) will result in the absurd situation in which milk companies and distributors
are forbidden to claim to health workers that their products are substitutes or equivalents of
breastmilk, and yet be allowed to display on the containers and labels of their products the exact
opposite message. That askewed interpretation of the Milk Code is precisely what Section 5(a)
thereof seeks to avoid by mandating that all information regarding breastmilk vis-a-visbreastmilk
substitutes be consistent, at the same time giving the government control over planning, provision,
design, and dissemination of information on infant feeding.
Thus, Section 26(c) of the RIRR which requires containers and labels to state that the product
offered is not a substitute for breastmilk, is a reasonable means of enforcing Section 8(b) of the Milk
Code and deterring circumvention of the protection and promotion of breastfeeding as embodied in
Section 260 of the Milk Code.
Section 26(f)61 of the RIRR is an equally reasonable labeling requirement. It implements Section 5(b)
of the Milk Code which reads:
SECTION 5. x x x
xxxx
(b) Informational and educational materials, whether written, audio, or visual, dealing with the
feeding of infants and intended to reach pregnant women and mothers of infants, shall
include clear information on all the following points: x x x (5) where needed, the proper use of
infant formula, whether manufactured industrially or home-prepared. When such materials
contain information about the use of infant formula, they shall include the social and financial
implications of its use; the health hazards of inappropriate foods or feeding methods;
and, in particular, the health hazards of unnecessary or improper use of infant formula
and other breastmilk substitutes. Such materials shall not use any picture or text which
may idealize the use of breastmilk substitutes. (Emphasis supplied)
The label of a product contains information about said product intended for the buyers thereof. The
buyers of breastmilk substitutes are mothers of infants, and Section 26 of the RIRR merely adds a

fair warning about the likelihood of pathogenic microorganisms being present in infant formula and
other related products when these are prepared and used inappropriately.
Petitioner’s counsel has admitted during the hearing on June 19, 2007 that formula milk is prone to
contaminations and there is as yet no technology that allows production of powdered infant formula
that eliminates all forms of contamination.62
Ineluctably, the requirement under Section 26(f) of the RIRR for the label to contain the message
regarding health hazards including the possibility of contamination with pathogenic microorganisms
is in accordance with Section 5(b) of the Milk Code.
The authority of DOH to control information regarding breastmilk vis-a-vis breastmilk substitutes and
supplements and related products cannot be questioned. It is its intervention into the area of
advertising, promotion, and marketing that is being assailed by petitioner.
In furtherance of Section 6(a) of the Milk Code, to wit:
SECTION 6. The General Public and Mothers. –
(a) No advertising, promotion or other marketing materials, whether written, audio or visual,
for products within the scope of this Code shall be printed, published, distributed, exhibited
and broadcast unless such materials are duly authorized and approved by an inter-agency
committee created herein pursuant to the applicable standards provided for in this Code.
the Milk Code invested regulatory authority over advertising, promotional and marketing materials to
an IAC, thus:
SECTION 12. Implementation and Monitoring (a) For purposes of Section 6(a) of this Code, an inter-agency committee composed of the
following members is hereby created:

Minister of Health

-------------------

Chairman

Minister of Trade and Industry

-------------------

Member

Minister of Justice

-------------------

Member

Minister of Social Services and Development

-------------------

Member

The members may designate their duly authorized representative to every meeting of the
Committee.

The Committee shall have the following powers and functions:
(1) To review and examine all advertising. promotion or other marketing materials,
whether written, audio or visual, on products within the scope of this Code;
(2) To approve or disapprove, delete objectionable portions from and prohibit the
printing, publication, distribution, exhibition and broadcast of, all advertising
promotion or other marketing materials, whether written, audio or visual, on products
within the scope of this Code;
(3) To prescribe the internal and operational procedure for the exercise of its powers
and functions as well as the performance of its duties and responsibilities; and
(4) To promulgate such rules and regulations as are necessary or proper for
the implementation of Section 6(a) of this Code. x x x (Emphasis supplied)
However, Section 11 of the RIRR, to wit:
SECTION 11. Prohibition – No advertising, promotions, sponsorships, or marketing materials
and activities for breastmilk substitutes intended for infants and young children up to twentyfour (24) months, shall be allowed, because they tend to convey or give subliminal
messages or impressions that undermine breastmilk and breastfeeding or otherwise
exaggerate breastmilk substitutes and/or replacements, as well as related products covered
within the scope of this Code.
prohibits advertising, promotions, sponsorships or marketing materials and activities for breastmilk
substitutes in line with the RIRR’s declaration of principle under Section 4(f), to wit:
SECTION 4. Declaration of Principles –
xxxx
(f) Advertising, promotions, or sponsorships of infant formula, breastmilk substitutes and
other related products are prohibited.
The DOH, through its co-respondents, evidently arrogated to itself not only the regulatory authority
given to the IAC but also imposed absolute prohibition on advertising, promotion, and marketing.
Yet, oddly enough, Section 12 of the RIRR reiterated the requirement of the Milk Code in Section 6
thereof for prior approval by IAC of all advertising, marketing and promotional materials prior to
dissemination.
Even respondents, through the OSG, acknowledged the authority of IAC, and repeatedly insisted,
during the oral arguments on June 19, 2007, that the prohibition under Section 11 is not actually
operational, viz:
SOLICITOR GENERAL DEVANADERA:
xxxx

x x x Now, the crux of the matter that is being questioned by Petitioner is whether or not
there is an absolute prohibition on advertising making AO 2006-12 unconstitutional. We
maintained that what AO 2006-12 provides is not an absolute prohibition because Section 11
while it states and it is entitled prohibition it states that no advertising, promotion,
sponsorship or marketing materials and activities for breast milk substitutes intended for
infants and young children up to 24 months shall be allowed because this is the standard
they tend to convey or give subliminal messages or impression undermine that breastmilk or
breastfeeding x x x.
We have to read Section 11 together with the other Sections because the other Section,
Section 12, provides for the inter agency committee that is empowered to process and
evaluate all the advertising and promotion materials.
xxxx
What AO 2006-12, what it does, it does not prohibit the sale and manufacture, it simply
regulates the advertisement and the promotions of breastfeeding milk substitutes.
xxxx
Now, the prohibition on advertising, Your Honor, must be taken together with the provision on
the Inter-Agency Committee that processes and evaluates because there may be some
information dissemination that are straight forward information dissemination. What the AO
2006 is trying to prevent is any material that will undermine the practice of breastfeeding,
Your Honor.
xxxx
ASSOCIATE JUSTICE SANTIAGO:
Madam Solicitor General, under the Milk Code, which body has authority or power to
promulgate Rules and Regulations regarding the Advertising, Promotion and Marketing of
Breastmilk Substitutes?
SOLICITOR GENERAL DEVANADERA:
Your Honor, please, it is provided that the Inter-Agency Committee, Your Honor.
xxxx
ASSOCIATE JUSTICE SANTIAGO:
x x x Don't you think that the Department of Health overstepped its rule making authority
when it totally banned advertising and promotion under Section 11 prescribed the total effect
rule as well as the content of materials under Section 13 and 15 of the rules and regulations?
SOLICITOR GENERAL DEVANADERA:
Your Honor, please, first we would like to stress that there is no total absolute ban. Second,
the Inter-Agency Committee is under the Department of Health, Your Honor.

xxxx
ASSOCIATE JUSTICE NAZARIO:
x x x Did I hear you correctly, Madam Solicitor, that there is no absolute ban on advertising of
breastmilk substitutes in the Revised Rules?
SOLICITOR GENERAL DEVANADERA:
Yes, your Honor.
ASSOCIATE JUSTICE NAZARIO:
But, would you nevertheless agree that there is an absolute ban on advertising of breastmilk
substitutes intended for children two (2) years old and younger?
SOLICITOR GENERAL DEVANADERA:
It's not an absolute ban, Your Honor, because we have the Inter-Agency Committee that can
evaluate some advertising and promotional materials, subject to the standards that we have
stated earlier, which are- they should not undermine breastfeeding, Your Honor.
xxxx
x x x Section 11, while it is titled Prohibition, it must be taken in relation with the other
Sections, particularly 12 and 13 and 15, Your Honor, because it is recognized that the InterAgency Committee has that power to evaluate promotional materials, Your Honor.
ASSOCIATE JUSTICE NAZARIO:
So in short, will you please clarify there's no absolute ban on advertisement regarding milk
substitute regarding infants two (2) years below?
SOLICITOR GENERAL DEVANADERA:
We can proudly say that the general rule is that there is a prohibition, however, we take
exceptions and standards have been set. One of which is that, the Inter-Agency Committee
can allow if the advertising and promotions will not undermine breastmilk and breastfeeding,
Your Honor.63
Sections 11 and 4(f) of the RIRR are clearly violative of the Milk Code.
However, although it is the IAC which is authorized to promulgate rules and regulations for the
approval or rejection of advertising, promotional, or other marketing materials under Section 12(a) of
the Milk Code, said provision must be related to Section 6 thereof which in turn provides that the
rules and regulations must be "pursuant to the applicable standards provided for in this Code." Said
standards are set forth in Sections 5(b), 8(b), and 10 of the Code, which, at the risk of being
repetitious, and for easy reference, are quoted hereunder:
SECTION 5. Information and Education –

xxxx
(b) Informational and educational materials, whether written, audio, or visual, dealing with the
feeding of infants and intended to reach pregnant women and mothers of infants, shall
include clear information on all the following points: (1) the benefits and superiority of
breastfeeding; (2) maternal nutrition, and the preparation for and maintenance of
breastfeeding; (3) the negative effect on breastfeeding of introducing partial bottlefeeding; (4)
the difficulty of reversing the decision not to breastfeed; and (5) where needed, the proper
use of infant formula, whether manufactured industrially or home-prepared. When such
materials contain information about the use of infant formula, they shall include the social
and financial implications of its use; the health hazards of inappropriate foods of feeding
methods; and, in particular, the health hazards of unnecessary or improper use of infant
formula and other breastmilk substitutes. Such materials shall not use any picture or text
which may idealize the use of breastmilk substitutes.
xxxx
SECTION 8. Health Workers. –
xxxx
(b) Information provided by manufacturers and distributors to health professionals regarding
products within the scope of this Code shall be restricted to scientific and factual matters and
such information shall not imply or create a belief that bottle feeding is equivalent or superior
to breastfeeding. It shall also include the information specified in Section 5(b).
xxxx
SECTION 10. Containers/Label –
(a) Containers and/or labels shall be designed to provide the necessary information about
the appropriate use of the products, and in such a way as not to discourage breastfeeding.
(b) Each container shall have a clear, conspicuous and easily readable and understandable
message in Pilipino or English printed on it, or on a label, which message can not readily
become separated from it, and which shall include the following points:
(i) the words "Important Notice" or their equivalent;
(ii) a statement of the superiority of breastfeeding;
(iii) a statement that the product shall be used only on the advice of a health worker
as to the need for its use and the proper methods of use; and
(iv) instructions for appropriate preparation, and a warning against the health hazards
of inappropriate preparation.
Section 12(b) of the Milk Code designates the DOH as the principal implementing agency for the
enforcement of the provisions of the Code. In relation to such responsibility of the DOH, Section 5(a)
of the Milk Code states that:

SECTION 5. Information and Education –
(a) The government shall ensure that objective and consistent information is provided on
infant feeding, for use by families and those involved in the field of infant nutrition. This
responsibility shall cover the planning, provision, design and dissemination of information,
and the control thereof, on infant nutrition. (Emphasis supplied)
Thus, the DOH has the significant responsibility to translate into operational terms the
standards set forth in Sections 5, 8, and 10 of the Milk Code, by which the IAC shall screen
advertising, promotional, or other marketing materials.
It is pursuant to such responsibility that the DOH correctly provided for Section 13 in the RIRR which
reads as follows:
SECTION 13. "Total Effect" - Promotion of products within the scope of this Code must be
objective and should not equate or make the product appear to be as good or equal to
breastmilk or breastfeeding in the advertising concept. It must not in any case undermine
breastmilk or breastfeeding. The "total effect" should not directly or indirectly suggest that
buying their product would produce better individuals, or resulting in greater love,
intelligence, ability, harmony or in any manner bring better health to the baby or other such
exaggerated and unsubstantiated claim.
Such standards bind the IAC in formulating its rules and regulations on advertising, promotion, and
marketing. Through that single provision, the DOH exercises control over the information content of
advertising, promotional and marketing materials on breastmilk vis-a-vis breastmilk substitutes,
supplements and other related products. It also sets a viable standard against which the IAC may
screen such materials before they are made public.
In Equi-Asia Placement, Inc. vs. Department of Foreign Affairs,64 the Court held:
x x x [T]his Court had, in the past, accepted as sufficient standards the following: "public
interest," "justice and equity," "public convenience and welfare," and "simplicity, economy
and welfare."65
In this case, correct information as to infant feeding and nutrition is infused with public interest and
welfare.
4. With regard to activities for dissemination of information to health professionals, the Court also
finds that there is no inconsistency between the provisions of the Milk Code and the RIRR. Section
7(b)66 of the Milk Code, in relation to Section 8(b)67 of the same Code, allows dissemination of
information to health professionals but suchinformation is restricted to scientific and factual
matters.
Contrary to petitioner's claim, Section 22 of the RIRR does not prohibit the giving of information to
health professionals on scientific and factual matters. What it prohibits is the involvement of the
manufacturer and distributor of the products covered by the Code in activities for the promotion,
education and production of Information, Education and Communication (IEC) materials regarding
breastfeeding that are intended forwomen and children. Said provision cannot be construed to
encompass even the dissemination of information to health professionals, as restricted by the
Milk Code.

5. Next, petitioner alleges that Section 8(e)68 of the Milk Code permits milk manufacturers and
distributors to extend assistance in research and in the continuing education of health professionals,
while Sections 22 and 32 of the RIRR absolutely forbid the same. Petitioner also assails Section
4(i)69 of the RIRR prohibiting milk manufacturers' and distributors' participation in any policymaking
body in relation to the advancement of breastfeeding.
Section 4(i) of the RIRR provides that milk companies and their representatives should not form part
of any policymaking body or entity in relation to the advancement of breastfeeding. The Court finds
nothing in said provisions which contravenes the Milk Code. Note that under Section 12(b) of the
Milk Code, it is the DOH which shall be principally responsible for the implementation and
enforcement of the provisions of said Code. It is entirely up to the DOH to decide which entities to
call upon or allow to be part of policymaking bodies on breastfeeding. Therefore, the RIRR's
prohibition on milk companies’ participation in any policymaking body in relation to the advancement
of breastfeeding is in accord with the Milk Code.
Petitioner is also mistaken in arguing that Section 22 of the RIRR prohibits milk companies from
giving reasearch assistance and continuing education to health professionals. Section 2270 of the
RIRR does not pertain to research assistance to or the continuing education of health
professionals; rather, it deals with breastfeeding promotion and education for women and
children. Nothing in Section 22 of the RIRR prohibits milk companies from giving assistance for
research or continuing education to health professionals; hence, petitioner's argument against this
particular provision must be struck down.
It is Sections 971 and 1072 of the RIRR which govern research assistance. Said sections of the RIRR
provide thatresearch assistance for health workers and researchers may be allowed upon
approval of an ethics committee, and with certain disclosure requirements imposed on the
milk company and on the recipient of the research award.
The Milk Code endows the DOH with the power to determine how such research or educational
assistance may be given by milk companies or under what conditions health workers may accept the
assistance. Thus, Sections 9 and 10 of the RIRR imposing limitations on the kind of research done
or extent of assistance given by milk companies are completely in accord with the Milk Code.
Petitioner complains that Section 3273 of the RIRR prohibits milk companies from giving assistance,
support, logistics or training to health workers. This provision is within the prerogative given to the
DOH under Section 8(e)74 of the Milk Code, which provides that manufacturers and distributors of
breastmilk substitutes may assist in researches, scholarships and the continuing education, of health
professionals in accordance with the rules and regulations promulgated by the Ministry of Health,
now DOH.
6. As to the RIRR's prohibition on donations, said provisions are also consistent with the Milk Code.
Section 6(f) of the Milk Code provides that donations may be made by manufacturers and
distributors of breastmilk substitutesupon the request or with the approval of the DOH. The law
does not proscribe the refusal of donations. The Milk Code leaves it purely to the discretion of the
DOH whether to request or accept such donations. The DOH then appropriately exercised its
discretion through Section 5175 of the RIRR which sets forth its policy not to request or approve
donations from manufacturers and distributors of breastmilk substitutes.
It was within the discretion of the DOH when it provided in Section 52 of the RIRR that any donation
from milk companies not covered by the Code should be coursed through the IAC which shall
determine whether such donation should be accepted or refused. As reasoned out by respondents,
the DOH is not mandated by the Milk Code to accept donations. For that matter, no person or entity

can be forced to accept a donation. There is, therefore, no real inconsistency between the RIRR and
the law because the Milk Code does not prohibit the DOH from refusing donations.
7. With regard to Section 46 of the RIRR providing for administrative sanctions that are not found in
the Milk Code, the Court upholds petitioner's objection thereto.
Respondent's reliance on Civil Aeronautics Board v. Philippine Air Lines, Inc.76 is misplaced. The
glaring difference in said case and the present case before the Court is that, in the Civil Aeronautics
Board, the Civil Aeronautics Administration (CAA) was expressly granted by the law (R.A. No.
776) the power to impose fines and civil penalties, while the Civil Aeronautics Board (CAB) was
granted by the same law the power to review on appeal the order or decision of the CAA and to
determine whether to impose, remit, mitigate, increase or compromise such fine and civil penalties.
Thus, the Court upheld the CAB's Resolution imposing administrative fines.
In a more recent case, Perez v. LPG Refillers Association of the Philippines, Inc.,77 the Court upheld
the Department of Energy (DOE) Circular No. 2000-06-10
implementing Batas Pambansa (B.P.) Blg. 33. The circular provided for fines for the commission of
prohibited acts. The Court found that nothing in the circular contravened the law because the DOE
was expressly authorized by B.P. Blg. 33 and R.A. No. 7638 to impose fines or penalties.
In the present case, neither the Milk Code nor the Revised Administrative Code grants the DOH the
authority to fix or impose administrative fines. Thus, without any express grant of power to fix or
impose such fines, the DOH cannot provide for those fines in the RIRR. In this regard, the DOH
again exceeded its authority by providing for such fines or sanctions in Section 46 of the RIRR. Said
provision is, therefore, null and void.
The DOH is not left without any means to enforce its rules and regulations. Section 12(b) (3) of the
Milk Code authorizes the DOH to "cause the prosecution of the violators of this Code and other
pertinent laws on products covered by this Code." Section 13 of the Milk Code provides for the
penalties to be imposed on violators of the provision of the Milk Code or the rules and regulations
issued pursuant to it, to wit:
SECTION 13. Sanctions –
(a) Any person who violates the provisions of this Code or the rules and regulations
issued pursuant to this Code shall, upon conviction, be punished by a penalty of two (2)
months to one (1) year imprisonment or a fine of not less than One Thousand Pesos
(P1,000.00) nor more than Thirty Thousand Pesos (P30,000.00) or both. Should the offense
be committed by a juridical person, the chairman of the Board of Directors, the president,
general manager, or the partners and/or the persons directly responsible therefor, shall be
penalized.
(b) Any license, permit or authority issued by any government agency to any health worker,
distributor, manufacturer, or marketing firm or personnel for the practice of their profession or
occupation, or for the pursuit of their business, may, upon recommendation of the Ministry of
Health, be suspended or revoked in the event of repeated violations of this Code, or of the
rules and regulations issued pursuant to this Code. (Emphasis supplied)
8. Petitioner’s claim that Section 57 of the RIRR repeals existing laws that are contrary to the RIRR
is frivolous.

Section 57 reads:
SECTION 57. Repealing Clause - All orders, issuances, and rules and regulations or parts
thereof inconsistent with these revised rules and implementing regulations are hereby
repealed or modified accordingly.
Section 57 of the RIRR does not provide for the repeal of laws but only orders, issuances and rules
and regulations. Thus, said provision is valid as it is within the DOH's rule-making power.
An administrative agency like respondent possesses quasi-legislative or rule-making power or the
power to make rules and regulations which results in delegated legislation that is within the confines
of the granting statute and the Constitution, and subject to the doctrine of non-delegability and
separability of powers.78 Such express grant of rule-making power necessarily includes the power to
amend, revise, alter, or repeal the same.79 This is to allow administrative agencies flexibility in
formulating and adjusting the details and manner by which they are to implement the provisions of a
law,80 in order to make it more responsive to the times. Hence, it is a standard provision in
administrative rules that prior issuances of administrative agencies that are inconsistent therewith
are declared repealed or modified.
In fine, only Sections 4(f), 11 and 46 are ultra vires, beyond the authority of the DOH to promulgate
and in contravention of the Milk Code and, therefore, null and void. The rest of the provisions of the
RIRR are in consonance with the Milk Code.
Lastly, petitioner makes a "catch-all" allegation that:
x x x [T]he questioned RIRR sought to be implemented by the Respondents is unnecessary
and oppressive, and is offensive to the due process clause of the Constitution, insofar
as the same is in restraint of trade and because a provision therein is inadequate to
provide the public with a comprehensible basis to determine whether or not they have
committed a violation.81 (Emphasis supplied)
Petitioner refers to Sections 4(f),82 4(i),83 5(w),84 11,85 22,86 32,87 46,88 and 5289 as the provisions that
suppress the trade of milk and, thus, violate the due process clause of the Constitution.
The framers of the constitution were well aware that trade must be subjected to some form of
regulation for the public good. Public interest must be upheld over business interests. 90 In Pest
Management Association of the Philippines v. Fertilizer and Pesticide Authority,91 it was held thus:
x x x Furthermore, as held in Association of Philippine Coconut Desiccators v. Philippine
Coconut Authority,despite the fact that "our present Constitution enshrines free
enterprise as a policy, it nonetheless reserves to the government the power to
intervene whenever necessary to promote the general welfare." There can be no
question that the unregulated use or proliferation of pesticides would be hazardous to our
environment. Thus, in the aforecited case, the Court declared that "free enterprise does not
call for removal of ‘protective regulations’." x x x It must be clearly explained and
proven by competent evidence just exactly how such protective regulation would
result in the restraint of trade. [Emphasis and underscoring supplied]
In this case, petitioner failed to show that the proscription of milk manufacturers’ participation in any
policymaking body (Section 4(i)), classes and seminars for women and children (Section 22); the
giving of assistance, support and logistics or training (Section 32); and the giving of donations

(Section 52) would unreasonably hamper the trade of breastmilk substitutes. Petitioner has not
established that the proscribed activities are indispensable to the trade of breastmilk substitutes.
Petitioner failed to demonstrate that the aforementioned provisions of the RIRR are unreasonable
and oppressive for being in restraint of trade.
Petitioner also failed to convince the Court that Section 5(w) of the RIRR is unreasonable and
oppressive. Said section provides for the definition of the term "milk company," to wit:
SECTION 5 x x x. (w) "Milk Company" shall refer to the owner, manufacturer, distributor of
infant formula, follow-up milk, milk formula, milk supplement, breastmilk substitute or
replacement, or by any other description of such nature, including their representatives who
promote or otherwise advance their commercial interests in marketing those products;
On the other hand, Section 4 of the Milk Code provides:
(d) "Distributor" means a person, corporation or any other entity in the public or private sector
engaged in the business (whether directly or indirectly) of marketing at the wholesale or retail
level a product within the scope of this Code. A "primary distributor" is a manufacturer's sales
agent, representative, national distributor or broker.
xxxx
(j) "Manufacturer" means a corporation or other entity in the public or private sector engaged
in the business or function (whether directly or indirectly or through an agent or and entity
controlled by or under contract with it) of manufacturing a products within the scope of this
Code.
Notably, the definition in the RIRR merely merged together under the term "milk company" the
entities defined separately under the Milk Code as "distributor" and "manufacturer." The RIRR also
enumerated in Section 5(w) the products manufactured or distributed by an entity that would qualify
it as a "milk company," whereas in the Milk Code, what is used is the phrase "products within the
scope of this Code." Those are the only differences between the definitions given in the Milk Code
and the definition as re-stated in the RIRR.
Since all the regulatory provisions under the Milk Code apply equally to both manufacturers and
distributors, the Court sees no harm in the RIRR providing for just one term to encompass both
entities. The definition of "milk company" in the RIRR and the definitions of "distributor" and
"manufacturer" provided for under the Milk Code are practically the same.
The Court is not convinced that the definition of "milk company" provided in the RIRR would bring
about any change in the treatment or regulation of "distributors" and "manufacturers" of breastmilk
substitutes, as defined under the Milk Code.
Except Sections 4(f), 11 and 46, the rest of the provisions of the RIRR are in consonance with the
objective, purpose and intent of the Milk Code, constituting reasonable regulation of an industry
which affects public health and welfare and, as such, the rest of the RIRR do not constitute illegal
restraint of trade nor are they violative of the due process clause of the Constitution.
WHEREFORE, the petition is PARTIALLY GRANTED. Sections 4(f), 11 and 46 of Administrative
Order No. 2006-0012 dated May 12, 2006 are declared NULL and VOID for being ultra vires. The
Department of Health and respondents are PROHIBITED from implementing said provisions.

The Temporary Restraining Order issued on August 15, 2006 is LIFTED insofar as the rest of the
provisions of Administrative Order No. 2006-0012 is concerned.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 144681

June 21, 2004

PROFESSIONAL REGULATION COMMISSION (PRC), CHAIRMAN HERMOGENES P. POBRE,
ASSOCIATE COMMISSIONER ARMANDO PASCUAL, BOARD OF MEDICINE, CHAIRMAN
RODOLFO P. DE GUZMAN, JOSE S. RAMIREZ, JUANITO B. BILLOTE, RUBEN R.
POLICARPIO, EDGARDO T. FERNANDO and RICARDO D. FULGENCIO II, petitioners,
vs.
ARLENE V. DE GUZMAN, VIOLETA V. MENESES, CELERINA S. NAVARRO, JOSE RAMONCITO
P. NAVARRO, ARNEL V. HERRERA and GERALDINE ELIZABETH M. PAGILAGAN, ELNORA R.
RAQUENO, MARISSA A. REGODON, LAURA M. SANTOS, KARANGALAN D. SERRANO,
DANILO A. VILLAVER, MARIA ROSARIO L. LEONOR, ALICIA S. LIZANO, MARITEL M.
ECHIVERRI, BERNADETTE T. MENDOZA, FERNANDO F. MANDAPAT, ALELI A. GOLLAYAN,
ELCIN C. ARRIOLA, HERMINIGILDA E. CONEJOS, SALLY B. BUNAGAN, ROGELIO B.
ANCHETA, OSCAR H. PADUA, JR., EVELYN D. GRAJO, EVELYN S. ACOSTA, MARGARITA
BELINDA L. VICENCIO, VALENTINO P. ARBOLEDA, EVELYN O. RAMOS, ACHILLES J.
PERALTA, CORAZON M. CRUZ, LEUVINA P. CHICO, JOSEPH A. JAO, MA. LUISA S.
GUTIERREZ, LYDIA C. CHAN, OPHELIA C. HIDALGO, FERNANDO T. CRUZ, MELVIN M. USITA,
RAFAEL I. TOLENTINO, GRACE E. UY, CHERYL R. TRIGUERO, MICHAEL L. SERRANO,
FEDERICO L. CASTILLO, MELITA J. CAÑEDO, SAMUEL B. BANGOY, BERNARDITA B. SY,
GLORIA T. JULARBAL, FREDERICK D. FRANCISCO, CARLOS M. BERNARDO, JR., HUBERT
S. NAZARENO, CLARISSA B. BACLIG, DAYMINDA G. BONTUYAN, BERNADETTE H.
CABUHAT, NANCY J. CHAVEZ, MARIO D. CUARESMA, ERNESTO L. CUE, EVELYN C.
CUNDANGAN, RHONEIL R. DEVERATURDA, DERILEEN D. DORADO, SAIBZUR N. EDDING,
VIOLETA C. FELIPE, HERMINIO V. FERNANDEZ, JR., MARIA VICTORIA M. LACSAMANA,
NORMA G. LAFAVILLA, RUBY B. LANTIN, MA. ELOISA Q. MALLARI, CLARISA SJ. NICOLAS,
PERCIVAL H. PANGILINAN, ARNULFO A. SALVADOR, ROBERT B. SANCHEZ, MERLY D. STA.
ANA and YOLANDA P. UNICA, respondents.
DECISION
TINGA, J.:
This petition for review under Rule 45 of the 1997 Rules of Civil Procedure seeks to nullify the D E C
I S I O N,1dated May 16, 2000, of the Court of Appeals in CA-G.R. SP No. 37283. The appellate
court affirmed the judgment2 dated December 19, 1994, of the Regional Trial Court (RTC) of Manila,
Branch 52, in Civil Case No. 93-66530. The trial court allowed the respondents to take their

physician’s oath and to register as duly licensed physicians. Equally challenged is the R E S O L U T
I O N3 promulgated on August 25, 2000 of the Court of Appeals, denying petitioners’ Motion for
Reconsideration.
The facts of this case are as follows:
The respondents are all graduates of the Fatima College of Medicine, Valenzuela City, Metro
Manila. They passed the Physician Licensure Examination conducted in February 1993 by
the Board of Medicine (Board). Petitioner Professional Regulation Commission (PRC) then
released their names as successful examinees in the medical licensure examination.
Shortly thereafter, the Board observed that the grades of the seventy-nine successful
examinees from Fatima College in the two most difficult subjects in the medical licensure
exam, Biochemistry (Bio-Chem) and Obstetrics and Gynecology (OB-Gyne), were unusually
and exceptionally high. Eleven Fatima examinees scored 100% in Bio-Chem and ten got
100% in OB-Gyne, another eleven got 99% in Bio-Chem, and twenty-one scored 99% in OBGyne. The Board also observed that many of those who passed from Fatima got marks of
95% or better in both subjects, and no one got a mark lower than 90%. A comparison of the
performances of the candidates from other schools was made. The Board observed that
strangely, the unusually high ratings were true only for Fatima College examinees. It was a
record-breaking phenomenon in the history of the Physician Licensure Examination.
On June 7, 1993, the Board issued Resolution No. 19, withholding the registration as physicians of
all the examinees from the Fatima College of Medicine. 4 The PRC asked the National Bureau of
Investigation (NBI) to investigate whether any anomaly or irregularity marred the February 1993
Physician Licensure Examination.
Prior to the NBI investigation, the Board requested Fr. Bienvenido F. Nebres, S.J., an expert
mathematician and authority in statistics, and later president of the Ateneo de Manila University, to
conduct a statistical analysis of the results in Bio-Chem and Ob-Gyne of the said examination.
On June 10, 1993, Fr. Nebres submitted his report. He reported that a comparison of the scores in
Bio-Chem and Ob-Gyne, of the Fatima College examinees with those of examinees from De La
Salle University and Perpetual Help College of Medicine showed that the scores of Fatima College
examinees were not only incredibly high but unusually clustered close to each other. He concluded
that there must be some unusual reason creating the clustering of scores in the two subjects. It must
be a cause "strong enough to eliminate the normal variations that one should expect from the
examinees [of Fatima College] in terms of talent, effort, energy, etc." 5
For its part, the NBI found that "the questionable passing rate of Fatima examinees in the [1993]
Physician Examination leads to the conclusion that the Fatima examinees gained early access to the
test questions."6
On July 5, 1993, respondents Arlene V. De Guzman, Violeta V. Meneses, Celerina S. Navarro, Jose
Ramoncito P. Navarro, Arnel V. Herrera, and Geraldine Elizabeth M. Pagilagan (Arlene V. De
Guzman et al., for brevity) filed a special civil action for mandamus, with prayer for preliminary

mandatory injunction docketed as Civil Case No. 93-66530 with the Regional Trial Court (RTC) of
Manila, Branch 52. Their petition was adopted by the other respondents as intervenors.
Meanwhile, the Board issued Resolution No. 26, dated July 21, 1993, charging respondents with
"immorality, dishonest conduct, fraud, and deceit" in connection with the Bio-Chem and Ob-Gyne
examinations. It recommended that the test results of the Fatima examinees be nullified. The case
was docketed as Adm. Case No. 1687 by the PRC.
On July 28, 1993, the RTC issued an Order in Civil Case No. 93-66530 granting the preliminary
mandatory injunction sought by the respondents. It ordered the petitioners to administer the
physician’s oath to Arlene V. De Guzman et al., and enter their names in the rolls of the PRC.
The petitioners then filed a special civil action for certiorari with the Court of Appeals to set aside the
mandatory injunctive writ, docketed as CA-G.R. SP No. 31701.
On October 21, 1993, the appellate court decided CA-G.R. SP No. 31701, with the dispositive
portion of theDecision ordaining as follows:
WHEREFORE, this petition is GRANTED. Accordingly, the writ of preliminary mandatory
injunction issued by the lower court against petitioners is hereby nullified and set aside.
SO ORDERED.7
Arlene V. de Guzman, et al., then elevated the foregoing Decision to this Court in G.R. No. 112315.
In ourResolution dated May 23, 1994, we denied the petition for failure to show reversible error on
the part of the appellate court.
Meanwhile, on November 22, 1993, during the pendency of the instant petition, the pre-trial
conference in Civil Case No. 93-66530 was held. Then, the parties, agreed to reduce the testimonies
of their respective witnesses to sworn questions-and-answers. This was without prejudice to crossexamination by the opposing counsel.
On December 13, 1993, petitioners’ counsel failed to appear at the trial in the mistaken belief that
the trial was set for December 15. The trial court then ruled that petitioners waived their right to
cross-examine the witnesses.
On January 27, 1994, counsel for petitioners filed a Manifestation and Motion stating the reasons for
her non-appearance and praying that the cross-examination of the witnesses for the opposing
parties be reset. The trial court denied the motion for lack of notice to adverse counsel. It also denied
the Motion for Reconsideration that followed on the ground that adverse counsel was notified less
than three (3) days prior to the hearing.
Meanwhile, to prevent the PRC and the Board from proceeding with Adm. Case No. 1687, the
respondents herein moved for the issuance of a restraining order, which the lower court granted in
its Order dated April 4, 1994.

The petitioners then filed with this Court a petition for certiorari docketed as G.R. No. 115704, to
annul the Ordersof the trial court dated November 13, 1993, February 28, 1994, and April 4, 1994.
We referred the petition to the Court of Appeals where it was docketed as CA-G.R. SP No. 34506.
On August 31, 1994, the appellate court decided CA-G.R. SP No. 34506 as follows:
WHEREFORE, the present petition for certiorari with prayer for temporary restraining
order/preliminary injunction is GRANTED and the Orders of December 13, 1993, February 7,
1994, February 28, 1994, and April 4, 1994 of the RTC-Manila, Branch 52, and all further
proceedings taken by it in Special Civil Action No. 93-66530 are hereby DECLARED NULL
and VOID. The said RTC-Manila is ordered to allow petitioners’ counsel to cross-examine the
respondents’ witnesses, to allow petitioners to present their evidence in due course of trial,
and thereafter to decide the case on the merits on the basis of the evidence of the parties.
Costs against respondents.
IT IS SO ORDERED.8
The trial was then set and notices were sent to the parties.
A day before the first hearing, on September 22, 1994, the petitioners filed an Urgent Ex-Parte
Manifestation and Motion praying for the partial reconsideration of the appellate court’s decision in
CA-G.R. SP No. 34506, and for the outright dismissal of Civil Case No. 93-66530. The petitioners
asked for the suspension of the proceedings.
In its Order dated September 23, 1994, the trial court granted the aforesaid motion, cancelled the
scheduled hearing dates, and reset the proceedings to October 21 and 28, 1994.
Meanwhile, on October 25, 1994, the Court of Appeals denied the partial motion for reconsideration
in CA-G.R. SP No. 34506. Thus, petitioners filed with the Supreme Court a petition for review
docketed as G.R. No. 117817, entitled Professional Regulation Commission, et al. v. Court of
Appeals, et al.
On November 11, 1994, counsel for the petitioners failed to appear at the trial of Civil Case No. 9366530. Upon motion of the respondents herein, the trial court ruled that herein petitioners waived
their right to cross-examine the herein respondents. Trial was reset to November 28, 1994.
On November 25, 1994, petitioners’ counsel moved for the inhibition of the trial court judge for
alleged partiality. On November 28, 1994, the day the Motion to Inhibit was to be heard, petitioners
failed to appear. Thus, the trial court denied the Motion to Inhibit and declared Civil Case No. 9366530 deemed submitted for decision.
On December 19, 1994, the trial court handed down its judgment in Civil Case No. 93-66530, the
fallo of which reads:

WHEREFORE, judgment is rendered ordering the respondents to allow the petitioners and
intervenors (except those with asterisks and footnotes in pages 1 & 2 of this decision)
[sic],9 to take the physician’s oath and to register them as physicians.
It should be made clear that this decision is without prejudice to any administrative
disciplinary action which may be taken against any of the petitioners for such causes and in
the manner provided by law and consistent with the requirements of the Constitution as any
other professionals.
No costs.
SO ORDERED.10
As a result of these developments, petitioners filed with this Court a petition for review on certiorari
docketed as G.R. No. 118437, entitled Professional Regulation Commission v. Hon. David G.
Nitafan, praying inter alia, that (1) G.R. No. 118437 be consolidated with G.R. No. 117817; (2) the
decision of the Court of Appeals dated August 31, 1994 in CA-G.R. SP No. 34506 be nullified for its
failure to decree the dismissal of Civil Case No. 93-66530, and in the alternative, to set aside the
decision of the trial court in Civil Case No. 93-66530, order the trial court judge to inhibit himself, and
Civil Case No. 93-66530 be re-raffled to another branch.
On December 26, 1994, the petitioners herein filed their Notice of Appeal11 in Civil Case No. 9366530, thereby elevating the case to the Court of Appeals, where it was docketed as CA-G.R. SP
No. 37283.
In our Resolution of June 7, 1995, G.R. No. 118437 was consolidated with G.R. No. 117817.
On July 9, 1998, we disposed of G.R. Nos. 117817 and 118437 in this wise:
WHEREFORE, the petition in G.R. No. 117817 is DISMISSED for being moot. The petition in
G.R. No. 118437 is likewise DISMISSED on the ground that there is a pending appeal before
the Court of Appeals. Assistant Solicitor General Amparo M. Cabotaje-Tang is advised to be
more circumspect in her dealings with the courts as a repetition of the same or similar acts
will be dealt with accordingly.
SO ORDERED.12
While CA-G.R. SP No. 37283 was awaiting disposition by the appellate court, Arnel V. Herrera, one
of the original petitioners in Civil Case No. 93-66530, joined by twenty-seven intervenors, to wit:
Fernando F. Mandapat, Ophelia C. Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando
T. Cruz, Marissa A. Regodon, Ma. Eloisa Q. Mallari-Largoza, Cheryl R. Triguero, Joseph A. Jao,
Bernadette H. Cabuhat, Evelyn S. Acosta-Cabanes, Laura M. Santos, Maritel M. Echiverri,
Bernadette C. Escusa, Carlosito C. Domingo, Alicia S. Lizano, Elnora R. Raqueno-Rabaino, Saibzur
N. Edding, Derileen D. Dorado-Edding, Robert B. Sanchez, Maria Rosario L. Leonor-Lacandula,
Geraldine Elizabeth M. Pagilagan-Palma, Margarita Belinda L. Vicencio-Gamilla, Herminigilda E.
Conejos, Leuvina P. Chico-Paguio, Elcin C. Arriola-Ocampo, and Jose Ramoncito P. Navarro,

manifested that they were no longer interested in proceeding with the case and moved for its
dismissal. A similar manifestation and motion was later filed by intervenors Mary Jean I. YebanMerlan, Michael L. Serrano, Norma G. Lafavilla, Arnulfo A. Salvador, Belinda C. Rabara, Yolanda P.
Unica, Dayminda G. Bontuyan, Clarissa B. Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda,
Aleli A. Gollayan, Evelyn C. Cundangan, Frederick D. Francisco, Violeta V. Meneses, Melita J.
Cañedo, Clarisa SJ. Nicolas, Federico L. Castillo, Karangalan D. Serrano, Danilo A. Villaver, Grace
E. Uy, Lydia C. Chan, and Melvin M. Usita. The Court of Appeals ruled that its decision in CA-G.R.
SP No. 37283 would not apply to them.
On May 16, 2000, the Court of Appeals decided CA-G.R. SP No. 37283, with the following fallo, to
wit:
WHEREFORE, finding no reversible error in the decision appealed from, We hereby AFFIRM
the same and DISMISS the instant appeal.
No pronouncement as to costs.
SO ORDERED.13
In sustaining the trial court’s decision, the appellate court ratiocinated that the respondents complied
with all the statutory requirements for admission into the licensure examination for physicians in
February 1993. They all passed the said examination. Having fulfilled the requirements of Republic
Act No. 2382,14 they should be allowed to take their oaths as physicians and be registered in the rolls
of the PRC.
Hence, this petition raising the following issues:
I
WHETHER OR NOT RESPONDENTS HAVE A VALID CAUSE OF ACTION FOR
MANDAMUS AGAINST PETITIONERS IN THE LIGHT OF THE RESOLUTION OF THIS
HONORABLE COURT IN G.R. NO. 112315 AFFIRMING THE COURT OF APPEALS’
DECISION DECLARING THAT IF EVER THERE IS SOME DOUBT AS TO THE MORAL
FITNESS OF EXAMINEES, THE ISSUANCE OF LICENSE TO PRACTICE MEDICINE IS
NOT AUTOMATICALLY GRANTED TO THE SUCCESSFUL EXAMINEES.
II
WHETHER OR NOT THE PETITION FOR MANDAMUS COULD PROCEED DESPITE THE
PENDENCY OF ADMINISTRATIVE CASE NO. 1687, WHICH WAS PRECISELY LODGED
TO DETERMINE THE MORAL FITNESS OF RESPONDENTS TO BECOME DOCTORS. 15
To our mind, the only issue is: Did the Court of Appeals commit a reversible error of law in sustaining
the judgment of the trial court that respondents are entitled to a writ of mandamus?

The petitioners submit that a writ of mandamus will not lie in this case. They point out that for a writ
of mandamus to issue, the applicant must have a well-defined, clear and certain legal right to the
thing demanded and it is the duty of the respondent to perform the act required. Thus, mandamus
may be availed of only when the duty sought to be performed is a ministerial and not a discretionary
one. The petitioners argue that the appellate court’s decision in CA-G.R. SP No. 37283 upholding
the decision of the trial court in Civil Case No. 93-66530 overlooked its own pronouncement in CAG.R. SP No. 31701. The Court of Appeals held in CA-G.R. SP No. 31701 that the issuance of a
license to engage in the practice of medicine becomes discretionary on the PRC if there exists some
doubt that the successful examinee has not fully met the requirements of the law. The petitioners
stress that this Court’s Resolution dated May 24, 1994 in G.R. No. 112315 held that there was no
showing "that the Court of Appeals had committed any reversible error in rendering the questioned
judgment" in CA-G.R. SP No. 31701. The petitioners point out that our Resolution in G.R. No.
112315 has long become final and executory.
Respondents counter that having passed the 1993 licensure examinations for physicians, the
petitioners have the obligation to administer to them the oath as physicians and to issue their
certificates of registration as physicians pursuant to Section 2016 of Rep. Act No. 2382. The Court of
Appeals in CA-G.R. SP No. 37283, found that respondents complied with all the requirements of
Rep. Act No. 2382. Furthermore, respondents were admitted by the Medical Board to the licensure
examinations and had passed the same. Hence, pursuant to Section 20 of Rep. Act No. 2382, the
petitioners had the obligation to administer their oaths as physicians and register them.
Mandamus is a command issuing from a court of competent jurisdiction, in the name of the state or
the sovereign, directed to some inferior court, tribunal, or board, or to some corporation or person
requiring the performance of a particular duty therein specified, which duty results from the official
station of the party to whom the writ is directed, or from operation of law.17 Section 3 of Rule 6518 of
the 1997 Rules of Civil Procedure outlines two situations when a writ of mandamus may issue, when
any tribunal, corporation, board, officer or person unlawfully (1) neglects the performance of an act
which the law specifically enjoins as a duty resulting from an office, trust, or station; or (2) excludes
another from the use and enjoyment of a right or office to which the other is entitled.
We shall discuss the issues successively.
1. On The Existence of a Duty of the Board of Medicine To Issue Certificates of Registration as
Physicians under Rep. Act No. 2382.
For mandamus to prosper, there must be a showing that the officer, board, or official concerned, has
a clear legal duty, not involving discretion.19 Moreover, there must be statutory authority for the
performance of the act,20 and the performance of the duty has been refused.21 Thus, it must be
pertinently asked now: Did petitioners have the duty to administer the Hippocratic Oath and register
respondents as physicians under the Medical Act of 1959?
As found by the Court of Appeals, on which we agree on the basis of the records:
It bears emphasizing herein that petitioner-appellees and intervenor-appellees have fully
complied with all the statutory requirements for admission into the licensure examinations for

physicians conducted and administered by the respondent-appellants on February 12, 14, 20
and 21, 1993. Stress, too, must be made of the fact that all of them successfully passed the
same examinations.22
The crucial query now is whether the Court of Appeals erred in concluding that petitioners should
allow the respondents to take their oaths as physicians and register them, steps which would enable
respondents to practice the medical profession23 pursuant to Section 20 of the Medical Act of 1959?
The appellate court relied on a single provision, Section 20 of Rep. Act No. 2382, in concluding that
the petitioners had the ministerial obligation to administer the Hippocratic Oath to respondents and
register them as physicians. But it is a basic rule in statutory construction that each part of a statute
should be construed in connection with every other part to produce a harmonious whole, not
confining construction to only one section.24 The intent or meaning of the statute should be
ascertained from the statute taken as a whole, not from an isolated part of the provision. Accordingly,
Section 20, of Rep. Act No. 2382, as amended should be read in conjunction with the other
provisions of the Act. Thus, to determine whether the petitioners had the ministerial obligation to
administer the Hippocratic Oath to respondents and register them as physicians, recourse must be
had to the entirety of the Medical Act of 1959.
A careful reading of Section 20 of the Medical Act of 1959 discloses that the law uses the word
"shall" with respect to the issuance of certificates of registration. Thus, the petitioners "shall sign and
issue certificates of registration to those who have satisfactorily complied with the requirements of
the Board." In statutory construction the term "shall" is a word of command. It is given imperative
meaning. Thus, when an examinee satisfies the requirements for the grant of his physician’s license,
the Board is obliged to administer to him his oath and register him as a physician, pursuant to
Section 20 and par. (1) of Section 2225 of the Medical Act of 1959.
However, the surrounding circumstances in this case call for serious inquiry concerning the
satisfactory compliance with the Board requirements by the respondents. The unusually high scores
in the two most difficult subjects was phenomenal, according to Fr. Nebres, the consultant of PRC on
the matter, and raised grave doubts about the integrity, if not validity, of the tests. These doubts have
to be appropriately resolved.
Under the second paragraph of Section 22, the Board is vested with the power to conduct
administrative investigations and "disapprove applications for examination or registration," pursuant
to the objectives of Rep. Act No. 2382 as outlined in Section 1 26 thereof. In this case, after the
investigation, the Board filed before the PRC, Adm. Case No. 1687 against the respondents to
ascertain their moral and mental fitness to practice medicine, as required by Section 9 27 of Rep. Act
No. 2382. In its Decision dated July 1, 1997, the Board ruled:
WHEREFORE, the BOARD hereby CANCELS the respondents[’] examination papers in the
Physician Licensure Examinations given in February 1993 and further DEBARS them from
taking any licensure examination for a period of ONE (1) YEAR from the date of the
promulgation of this DECISION. They may, if they so desire, apply for the scheduled
examinations for physicians after the lapse of the period imposed by the BOARD.

SO ORDERED.28
Until the moral and mental fitness of the respondents could be ascertained, according to petitioners,
the Board has discretion to hold in abeyance the administration of the Hippocratic Oath and the
issuance of the certificates to them. The writ of mandamus does not lie to compel performance of an
act which is not duly authorized.
The respondents nevertheless argue that under Section 20, the Board shall not issue a certificate of
registration only in the following instances: (1) to any candidate who has been convicted by a court
of competent jurisdiction of any criminal offense involving moral turpitude; (2) or has been found
guilty of immoral or dishonorable conduct after the investigation by the Board; or (3) has been
declared to be of unsound mind. They aver that none of these circumstances are present in their
case.
Petitioners reject respondents’ argument. We are informed that in Board Resolution No. 26, 29 dated
July 21, 1993, the Board resolved to file charges against the examinees from Fatima College of
Medicine for "immorality, dishonesty, fraud, and deceit in the Obstetrics-Gynecology and
Biochemistry examinations." It likewise sought to cancel the examination results obtained by the
examinees from the Fatima College.
Section 830 of Rep. Act No. 2382 prescribes, among others, that a person who aspires to practice
medicine in the Philippines, must have "satisfactorily passed the corresponding Board Examination."
Section 22, in turn, provides that the oath may only be administered "to physicians who qualified in
the examinations." The operative word here is "satisfactorily," defined as "sufficient to meet a
condition or obligation" or "capable of dispelling doubt or ignorance." 31 Gleaned from Board
Resolution No. 26, the licensing authority apparently did not find that the respondents "satisfactorily
passed" the licensure examinations. The Board instead sought to nullify the examination results
obtained by the respondents.
2. On the Right Of The Respondents To Be Registered As Physicians
The function of mandamus is not to establish a right but to enforce one that has been established by
law. If no legal right has been violated, there can be no application of a legal remedy, and the writ of
mandamus is a legal remedy for a legal right.32 There must be a well-defined, clear and certain legal
right to the thing demanded.33 It is long established rule that a license to practice medicine is a
privilege or franchise granted by the government.34
It is true that this Court has upheld the constitutional right 35 of every citizen to select a profession or
course of study subject to a fair, reasonable, and equitable admission and academic
requirements.36 But like all rights and freedoms guaranteed by the Charter, their exercise may be so
regulated pursuant to the police power of the State to safeguard health, morals, peace, education,
order, safety, and general welfare of the people.37 Thus, persons who desire to engage in the learned
professions requiring scientific or technical knowledge may be required to take an examination as a
prerequisite to engaging in their chosen careers. This regulation takes particular pertinence in the
field of medicine, to protect the public from the potentially deadly effects of incompetence and
ignorance among those who would practice medicine. In a previous case, it may be recalled, this

Court has ordered the Board of Medical Examiners to annul both its resolution and certificate
authorizing a Spanish subject, with the degree of Licentiate in Medicine and Surgery from the
University of Barcelona, Spain, to practice medicine in the Philippines, without first passing the
examination required by the Philippine Medical Act.38 In another case worth noting, we upheld the
power of the State to upgrade the selection of applicants into medical schools through admission
tests.39
It must be stressed, nevertheless, that the power to regulate the exercise of a profession or pursuit
of an occupation cannot be exercised by the State or its agents in an arbitrary, despotic, or
oppressive manner. A political body that regulates the exercise of a particular privilege has the
authority to both forbid and grant such privilege in accordance with certain conditions. Such
conditions may not, however, require giving up ones constitutional rights as a condition to acquiring
the license.40 Under the view that the legislature cannot validly bestow an arbitrary power to grant or
refuse a license on a public agency or officer, courts will generally strike down license legislation that
vests in public officials discretion to grant or refuse a license to carry on some ordinarily lawful
business, profession, or activity without prescribing definite rules and conditions for the guidance of
said officials in the exercise of their power.41
In the present case, the aforementioned guidelines are provided for in Rep. Act No. 2382, as
amended, which prescribes the requirements for admission to the practice of medicine, the
qualifications of candidates for the board examinations, the scope and conduct of the examinations,
the grounds for denying the issuance of a physician’s license, or revoking a license that has been
issued. Verily, to be granted the privilege to practice medicine, the applicant must show that he
possesses all the qualifications and none of the disqualifications. Furthermore, it must appear that
he has fully complied with all the conditions and requirements imposed by the law and the licensing
authority. Should doubt taint or mar the compliance as being less than satisfactory, then the privilege
will not issue. For said privilege is distinguishable from a matter of right, which may be demanded if
denied. Thus, without a definite showing that the aforesaid requirements and conditions have been
satisfactorily met, the courts may not grant the writ of mandamus to secure said privilege without
thwarting the legislative will.
3. On the Ripeness of the Petition for Mandamus
Lastly, the petitioners herein contend that the Court of Appeals should have dismissed the petition
for mandamus below for being premature. They argue that the administrative remedies had not been
exhausted. The records show that this is not the first time that petitioners have sought the dismissal
of Civil Case No. 93-66530. This issue was raised in G.R. No. 115704, which petition we referred to
the Court of Appeals, where it was docketed as CA-G.R. SP No. 34506. On motion for
reconsideration in CA-G.R. SP No. 34506, the appellate court denied the motion to dismiss on the
ground that the prayers for the nullification of the order of the trial court and the dismissal of Civil
Case No. 93-66530 were inconsistent reliefs. In G.R. No. 118437, the petitioners sought to nullify the
decision of the Court of Appeals in CA-G.R. SP No. 34506 insofar as it did not order the dismissal of
Civil Case No. 93-66530. In our consolidated decision, dated July 9, 1998, in G.R. Nos. 117817 &
118437, this Court speaking through Justice Bellosillo opined that:

Indeed, the issue as to whether the Court of Appeals erred in not ordering the dismissal of
Civil Case No. 93-66530 sought to be resolved in the instant petition has been rendered
meaningless by an event taking place prior to the filing of this petition and denial thereof
should follow as a logical consequence.42 There is no longer any justiciable controversy so
that any declaration thereon would be of no practical use or value. 43 It should be recalled that
in its decision of 19 December 1994 the trial court granted the writ of mandamus prayed for
by private respondents, which decision was received by petitioners on 20 December 1994.
Three (3) days after, or on 23 December 1994, petitioners filed the instant petition. By then,
the remedy available to them was to appeal the decision to the Court of Appeals, which they
in fact did, by filing a notice of appeal on 26 December 1994.44
The petitioners have shown no cogent reason for us to reverse the aforecited ruling. Nor will their
reliance upon the doctrine of the exhaustion of administrative remedies in the instant case advance
their cause any.
Section 2645 of the Medical Act of 1959 provides for the administrative and judicial remedies that
respondents herein can avail to question Resolution No. 26 of the Board of Medicine, namely: (a)
appeal the unfavorable judgment to the PRC; (b) should the PRC ruling still be unfavorable, to
elevate the matter on appeal to the Office of the President; and (c) should they still be unsatisfied, to
ask for a review of the case or to bring the case to court via a special civil action of certiorari. Thus,
as a rule, mandamus will not lie when administrative remedies are still available. 46 However, the
doctrine of exhaustion of administrative remedies does not apply where, as in this case, a pure
question of law is raised.47 On this issue, no reversible error may, thus, be laid at the door of the
appellate court in CA-G.R. SP No. 37283, when it refused to dismiss Civil Case No. 93-66530.
As we earlier pointed out, herein respondents Arnel V. Herrera, Fernando F. Mandapat, Ophelia C.
Hidalgo, Bernadette T. Mendoza, Ruby B. Lantin-Tan, Fernando T. Cruz, Marissa A. Regodon, Ma.
Eloisa Q. Mallari-Largoza, Cheryl R. Triguero, Joseph A. Jao, Bernadette H. Cabuhat, Evelyn S.
Acosta-Cabanes, Laura M. Santos, Maritel M. Echiverri, Bernadette C. Escusa, Carlosito C.
Domingo, Alicia S. Lizano, Elnora R. Raqueno-Rabaino, Saibzur N. Edding, Derileen D. DoradoEdding, Robert B. Sanchez, Maria Rosario Leonor-Lacandula, Geraldine Elizabeth M. PagilaganPalma, Margarita Belinda L. Vicencio-Gamilla, Herminigilda E. Conejos, Leuvina P. Chico-Paguio,
Elcin C. Arriola-Ocampo, and Jose Ramoncito P. Navarro manifested to the Court of Appeals during
the pendency of CA-G.R. SP No. 37283, that they were no longer interested in proceeding with the
case and moved for its dismissal insofar as they were concerned. A similar manifestation and motion
were later filed by intervenors Mary Jean I. Yeban-Merlan, Michael L. Serrano, Norma G. Lafavilla,
Arnulfo A. Salvador, Belinda C. Rabarra, Yolanda P. Unica, Dayminda G. Bontuyan, Clarissa B.
Baclig, Ma. Luisa S. Gutierrez, Rhoneil R. Deveraturda, Aleli A. Gollayan, Evelyn C. Cundangan,
Frederick D. Francisco, Violeta V. Meneses, Melita J. Cañedo, Clarisa SJ. Nicolas, Federico L.
Castillo, Karangalan D. Serrano, Danilo A. Villaver, Grace E. Uy, Lydia C. Chan, and Melvin M. Usita.
Following these manifestations and motions, the appellate court in CA-G.R. SP No. 37283 decreed
that its ruling would not apply to them. Thus, inasmuch as the instant case is a petition for review of
the appellate court’s ruling in CA-G.R. SP No. 37283, a decision which is inapplicable to the
aforementioned respondents will similarly not apply to them.

As to Achilles J. Peralta, Evelyn O. Ramos, Sally B. Bunagan, Rogelio B. Ancheta, Oscar H. Padua,
Jr., Evelyn D. Grajo, Valentino P. Arboleda, Carlos M. Bernardo, Jr., Mario D. Cuaresma, Violeta C.
Felipe, Percival H. Pangilinan, Corazon M. Cruz and Samuel B. Bangoy, herein decision shall not
apply pursuant to the Orders of the trial court in Civil Case No. 93-66530, dropping their names from
the suit.
Consequently, this Decision is binding only on the remaining respondents, namely: Arlene V. de
Guzman, Celerina S. Navarro, Rafael I. Tolentino, Bernardita B. Sy, Gloria T. Jularbal, Hubert S.
Nazareno, Nancy J. Chavez, Ernesto L. Cue, Herminio V. Fernandez, Jr., Maria Victoria M.
Lacsamana and Merly D. Sta. Ana, as well as the petitioners.
WHEREFORE, the instant petition is GRANTED. Accordingly, (1) the assailed decision dated May
16, 2000, of the Court of Appeals, in CA-G.R. SP No. 37283, which affirmed the judgment dated
December 19, 1994, of the Regional Trial Court of Manila, Branch 52, in Civil Case No. 93-66530,
ordering petitioners to administer the physician’s oath to herein respondents as well as the resolution
dated August 25, 2000, of the appellate court, denying the petitioners’ motion for reconsideration, are
REVERSED and SET ASIDE; and (2) the writ of mandamus, issued in Civil Case No. 93-66530, and
affirmed by the appellate court in CA-G.R. SP No. 37283 is NULLIFIED AND SET ASIDE.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 101083 July 30, 1993
JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, minors, and
represented by their parents ANTONIO and RIZALINA OPOSA, ROBERTA NICOLE SADIUA,
minor, represented by her parents CALVIN and ROBERTA SADIUA, CARLO, AMANDA SALUD
and PATRISHA, all surnamed FLORES, minors and represented by their parents ENRICO and
NIDA FLORES, GIANINA DITA R. FORTUN, minor, represented by her parents SIGRID and
DOLORES FORTUN, GEORGE II and MA. CONCEPCION, all surnamed MISA, minors and
represented by their parents GEORGE and MYRA MISA, BENJAMIN ALAN V. PESIGAN, minor,
represented by his parents ANTONIO and ALICE PESIGAN, JOVIE MARIE ALFARO, minor,
represented by her parents JOSE and MARIA VIOLETA ALFARO, MARIA CONCEPCION T.
CASTRO, minor, represented by her parents FREDENIL and JANE CASTRO, JOHANNA
DESAMPARADO,
minor, represented by her parents JOSE and ANGELA DESAMPRADO, CARLO JOAQUIN T.
NARVASA, minor, represented by his parents GREGORIO II and CRISTINE CHARITY
NARVASA, MA. MARGARITA, JESUS IGNACIO, MA. ANGELA and MARIE GABRIELLE, all
surnamed SAENZ, minors, represented by their parents ROBERTO and AURORA SAENZ,
KRISTINE, MARY ELLEN, MAY, GOLDA MARTHE and DAVID IAN, all surnamed KING, minors,
represented by their parents MARIO and HAYDEE KING, DAVID, FRANCISCO and THERESE

VICTORIA, all surnamed ENDRIGA, minors, represented by their parents BALTAZAR and
TERESITA ENDRIGA, JOSE MA. and REGINA MA., all surnamed ABAYA, minors, represented
by their parents ANTONIO and MARICA ABAYA, MARILIN, MARIO, JR. and MARIETTE, all
surnamed CARDAMA, minors, represented by their parents MARIO and LINA CARDAMA,
CLARISSA, ANN MARIE, NAGEL, and IMEE LYN, all surnamed OPOSA, minors and
represented by their parents RICARDO and MARISSA OPOSA, PHILIP JOSEPH, STEPHEN
JOHN and ISAIAH JAMES, all surnamed QUIPIT, minors, represented by their parents JOSE
MAX and VILMI QUIPIT, BUGHAW CIELO, CRISANTO, ANNA, DANIEL and FRANCISCO, all
surnamed BIBAL, minors, represented by their parents FRANCISCO, JR. and MILAGROS
BIBAL, and THE PHILIPPINE ECOLOGICAL NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the Secretary of the
Department of Environment and Natural Resources, and THE HONORABLE ERIBERTO U.
ROSARIO, Presiding Judge of the RTC, Makati, Branch 66, respondents.
Oposa Law Office for petitioners.
The Solicitor General for respondents.

DAVIDE, JR., J.:
In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology
which the petitioners dramatically associate with the twin concepts of "inter-generational
responsibility" and "inter-generational justice." Specifically, it touches on the issue of whether the
said petitioners have a cause of action to "prevent the misappropriation or impairment" of Philippine
rainforests and "arrest the unabated hemorrhage of the country's vital life support systems and
continued rape of Mother Earth."
The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati,
Metro Manila) of the Regional Trial Court (RTC), National Capital Judicial Region. The principal
plaintiffs therein, now the principal petitioners, are all minors duly represented and joined by their
respective parents. Impleaded as an additional plaintiff is the Philippine Ecological Network, Inc.
(PENI), a domestic, non-stock and non-profit corporation organized for the purpose of, inter alia,
engaging in concerted action geared for the protection of our environment and natural resources.
The original defendant was the Honorable Fulgencio S. Factoran, Jr., then Secretary of the
Department of Environment and Natural Resources (DENR). His substitution in this petition by the
new Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper motion by the
petitioners. 1 The complaint 2 was instituted as a taxpayers' class suit 3 and alleges that the plaintiffs "are
all citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and enjoyment
of the natural resource treasure that is the country's virgin tropical forests." The same was filed for
themselves and others who are equally concerned about the preservation of said resource but are "so
numerous that it is impracticable to bring them all before the Court." The minors further asseverate that
they "represent their generation as well as generations yet unborn." 4 Consequently, it is prayed for that
judgment be rendered:

. . . ordering defendant, his agents, representatives and other persons acting in his
behalf to —
(1) Cancel all existing timber license agreements in the country;
(2) Cease and desist from receiving, accepting, processing, renewing or approving
new timber license agreements.
and granting the plaintiffs ". . . such other reliefs just and equitable under the premises." 5
The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands
has a land area of thirty million (30,000,000) hectares and is endowed with rich, lush and verdant
rainforests in which varied, rare and unique species of flora and fauna may be found; these
rainforests contain a genetic, biological and chemical pool which is irreplaceable; they are also the
habitat of indigenous Philippine cultures which have existed, endured and flourished since time
immemorial; scientific evidence reveals that in order to maintain a balanced and healthful ecology,
the country's land area should be utilized on the basis of a ratio of fifty-four per cent (54%) for forest
cover and forty-six per cent (46%) for agricultural, residential, industrial, commercial and other uses;
the distortion and disturbance of this balance as a consequence of deforestation have resulted in a
host of environmental tragedies, such as (a) water shortages resulting from drying up of the water
table, otherwise known as the "aquifer," as well as of rivers, brooks and streams, (b) salinization of
the water table as a result of the intrusion therein of salt water, incontrovertible examples of which
may be found in the island of Cebu and the Municipality of Bacoor, Cavite, (c) massive erosion and
the consequential loss of soil fertility and agricultural productivity, with the volume of soil eroded
estimated at one billion (1,000,000,000) cubic meters per annum — approximately the size of the
entire island of Catanduanes, (d) the endangering and extinction of the country's unique, rare and
varied flora and fauna, (e) the disturbance and dislocation of cultural communities, including the
disappearance of the Filipino's indigenous cultures, (f) the siltation of rivers and seabeds and
consequential destruction of corals and other aquatic life leading to a critical reduction in marine
resource productivity, (g) recurrent spells of drought as is presently experienced by the entire
country, (h) increasing velocity of typhoon winds which result from the absence of windbreakers, (i)
the floodings of lowlands and agricultural plains arising from the absence of the absorbent
mechanism of forests, (j) the siltation and shortening of the lifespan of multi-billion peso dams
constructed and operated for the purpose of supplying water for domestic uses, irrigation and the
generation of electric power, and (k) the reduction of the earth's capacity to process carbon dioxide
gases which has led to perplexing and catastrophic climatic changes such as the phenomenon of
global warming, otherwise known as the "greenhouse effect."
Plaintiffs further assert that the adverse and detrimental consequences of continued and
deforestation are so capable of unquestionable demonstration that the same may be submitted as a
matter of judicial notice. This notwithstanding, they expressed their intention to present expert
witnesses as well as documentary, photographic and film evidence in the course of the trial.
As their cause of action, they specifically allege that:
CAUSE OF ACTION

7. Plaintiffs replead by reference the foregoing allegations.
8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares
of rainforests constituting roughly 53% of the country's land mass.
9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million
hectares of said rainforests or four per cent (4.0%) of the country's land area.
10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth
rainforests are left, barely 2.8% of the entire land mass of the Philippine archipelago
and about 3.0 million hectares of immature and uneconomical secondary growth
forests.
11. Public records reveal that the defendant's, predecessors have granted timber
license agreements ('TLA's') to various corporations to cut the aggregate area of
3.89 million hectares for commercial logging purposes.
A copy of the TLA holders and the corresponding areas covered is hereto attached
as Annex "A".
12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25
hectares per hour — nighttime, Saturdays, Sundays and holidays included — the
Philippines will be bereft of forest resources after the end of this ensuing decade, if
not earlier.
13. The adverse effects, disastrous consequences, serious injury and irreparable
damage of this continued trend of deforestation to the plaintiff minor's generation and
to generations yet unborn are evident and incontrovertible. As a matter of fact, the
environmental damages enumerated in paragraph 6 hereof are already being felt,
experienced and suffered by the generation of plaintiff adults.
14. The continued allowance by defendant of TLA holders to cut and deforest the
remaining forest stands will work great damage and irreparable injury to plaintiffs —
especially plaintiff minors and their successors — who may never see, use, benefit
from and enjoy this rare and unique natural resource treasure.
This act of defendant constitutes a misappropriation and/or impairment of the natural
resource property he holds in trust for the benefit of plaintiff minors and succeeding
generations.
15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology
and are entitled to protection by the State in its capacity as the parens patriae.
16. Plaintiff have exhausted all administrative remedies with the defendant's office.
On March 2, 1990, plaintiffs served upon defendant a final demand to cancel all
logging permits in the country.

A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".
17. Defendant, however, fails and refuses to cancel the existing TLA's to the
continuing serious damage and extreme prejudice of plaintiffs.
18. The continued failure and refusal by defendant to cancel the TLA's is an act
violative of the rights of plaintiffs, especially plaintiff minors who may be left with a
country that is desertified (sic), bare, barren and devoid of the wonderful flora, fauna
and indigenous cultures which the Philippines had been abundantly blessed with.
19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to
the public policy enunciated in the Philippine Environmental Policy which, in pertinent
part, states that it is the policy of the State —
(a) to create, develop, maintain and improve conditions under which man and nature
can thrive in productive and enjoyable harmony with each other;
(b) to fulfill the social, economic and other requirements of present and future
generations of Filipinos and;
(c) to ensure the attainment of an environmental quality that is conductive to a life of
dignity and well-being. (P.D. 1151, 6 June 1977)
20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's
is contradictory to the Constitutional policy of the State to —
a. effect "a more equitable distribution of opportunities, income and wealth" and
"make full and efficient use of natural resources (sic)." (Section 1, Article XII of the
Constitution);
b. "protect the nation's marine wealth." (Section 2, ibid);
c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section
14, Article XIV,id.);
d. "protect and advance the right of the people to a balanced and healthful ecology in
accord with the rhythm and harmony of nature." (Section 16, Article II, id.)
21. Finally, defendant's act is contrary to the highest law of humankind — the natural
law — and violative of plaintiffs' right to self-preservation and perpetuation.
22. There is no other plain, speedy and adequate remedy in law other than the
instant action to arrest the unabated hemorrhage of the country's vital life support
systems and continued rape of Mother Earth. 6

On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the
complaint based on two (2) grounds, namely: (1) the plaintiffs have no cause of action against him
and (2) the issue raised by the plaintiffs is a political question which properly pertains to the
legislative or executive branches of Government. In their 12 July 1990 Opposition to the Motion, the
petitioners maintain that (1) the complaint shows a clear and unmistakable cause of action, (2) the
motion is dilatory and (3) the action presents a justiciable question as it involves the defendant's
abuse of discretion.
On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to
dismiss. 7 In the said order, not only was the defendant's claim — that the complaint states no cause of
action against him and that it raises a political question — sustained, the respondent Judge further ruled
that the granting of the relief prayed for would result in the impairment of contracts which is prohibited by
the fundamental law of the land.
Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of
Court and ask this Court to rescind and set aside the dismissal order on the ground that the
respondent Judge gravely abused his discretion in dismissing the action. Again, the parents of the
plaintiffs-minors not only represent their children, but have also joined the latter in this case. 8
On 14 May 1992, We resolved to give due course to the petition and required the parties to submit
their respective Memoranda after the Office of the Solicitor General (OSG) filed a Comment in behalf
of the respondents and the petitioners filed a reply thereto.
Petitioners contend that the complaint clearly and unmistakably states a cause of action as it
contains sufficient allegations concerning their right to a sound environment based on Articles 19, 20
and 21 of the Civil Code (Human Relations), Section 4 of Executive Order (E.O.) No. 192 creating
the DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (Philippine Environmental Policy),
Section 16, Article II of the 1987 Constitution recognizing the right of the people to a balanced and
healthful ecology, the concept of generational genocide in Criminal Law and the concept of man's
inalienable right to self-preservation and self-perpetuation embodied in natural law. Petitioners
likewise rely on the respondent's correlative obligation per Section 4 of E.O. No. 192, to safeguard
the people's right to a healthful environment.
It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in
granting Timber License Agreements (TLAs) to cover more areas for logging than what is available
involves a judicial question.
Anent the invocation by the respondent Judge of the Constitution's non-impairment clause,
petitioners maintain that the same does not apply in this case because TLAs are not contracts. They
likewise submit that even if TLAs may be considered protected by the said clause, it is well settled
that they may still be revoked by the State when the public interest so requires.
On the other hand, the respondents aver that the petitioners failed to allege in their complaint a
specific legal right violated by the respondent Secretary for which any relief is provided by law. They
see nothing in the complaint but vague and nebulous allegations concerning an "environmental right"
which supposedly entitles the petitioners to the "protection by the state in its capacity as parens

patriae." Such allegations, according to them, do not reveal a valid cause of action. They then
reiterate the theory that the question of whether logging should be permitted in the country is a
political question which should be properly addressed to the executive or legislative branches of
Government. They therefore assert that the petitioners' resources is not to file an action to court, but
to lobby before Congress for the passage of a bill that would ban logging totally.
As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done
by the State without due process of law. Once issued, a TLA remains effective for a certain period of
time — usually for twenty-five (25) years. During its effectivity, the same can neither be revised nor
cancelled unless the holder has been found, after due notice and hearing, to have violated the terms
of the agreement or other forestry laws and regulations. Petitioners' proposition to have all the TLAs
indiscriminately cancelled without the requisite hearing would be violative of the requirements of due
process.
Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil
Case No. 90-777 as a class suit. The original defendant and the present respondents did not take
issue with this matter. Nevertheless, We hereby rule that the said civil case is indeed a class suit.
The subject matter of the complaint is of common and general interest not just to several, but to all
citizens of the Philippines. Consequently, since the parties are so numerous, it, becomes
impracticable, if not totally impossible, to bring all of them before the court. We likewise declare that
the plaintiffs therein are numerous and representative enough to ensure the full protection of all
concerned interests. Hence, all the requisites for the filing of a valid class suit under Section 12, Rule
3 of the Revised Rules of Court are present both in the said civil case and in the instant petition, the
latter being but an incident to the former.
This case, however, has a special and novel element. Petitioners minors assert that they represent
their generation as well as generations yet unborn. We find no difficulty in ruling that they can, for
themselves, for others of their generation and for the succeeding generations, file a class suit. Their
personality to sue in behalf of the succeeding generations can only be based on the concept of
intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned.
Such a right, as hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety. 9 Such rhythm and
harmony indispensably include, inter alia, the judicious disposition, utilization, management, renewal and
conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other
natural resources to the end that their exploration, development and utilization be equitably accessible to
the present as well as future generations. 10 Needless to say, every generation has a responsibility to the
next to preserve that rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put
a little differently, the minors' assertion of their right to a sound environment constitutes, at the same time,
the performance of their obligation to ensure the protection of that right for the generations to come.
The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits
of the petition.
After a careful perusal of the complaint in question and a meticulous consideration and evaluation of
the issues raised and arguments adduced by the parties, We do not hesitate to find for the
petitioners and rule against the respondent Judge's challenged order for having been issued with

grave abuse of discretion amounting to lack of jurisdiction. The pertinent portions of the said order
reads as follows:
xxx xxx xxx
After a careful and circumspect evaluation of the Complaint, the Court cannot help
but agree with the defendant. For although we believe that plaintiffs have but the
noblest of all intentions, it (sic) fell short of alleging, with sufficient definiteness, a
specific legal right they are seeking to enforce and protect, or a specific legal wrong
they are seeking to prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the
Court notes that the Complaint is replete with vague assumptions and vague
conclusions based on unverified data. In fine, plaintiffs fail to state a cause of action
in its Complaint against the herein defendant.
Furthermore, the Court firmly believes that the matter before it, being impressed with
political color and involving a matter of public policy, may not be taken cognizance of
by this Court without doing violence to the sacred principle of "Separation of Powers"
of the three (3) co-equal branches of the Government.
The Court is likewise of the impression that it cannot, no matter how we stretch our
jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing
timber license agreements in the country and to cease and desist from receiving,
accepting, processing, renewing or approving new timber license agreements. For to
do otherwise would amount to "impairment of contracts" abhored (sic) by the
fundamental law. 11
We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient
definiteness a specific legal right involved or a specific legal wrong committed, and that the
complaint is replete with vague assumptions and conclusions based on unverified data. A reading of
the complaint itself belies these conclusions.
The complaint focuses on one specific fundamental legal right — the right to a balanced and
healthful ecology which, for the first time in our nation's constitutional history, is solemnly
incorporated in the fundamental law. Section 16, Article II of the 1987 Constitution explicitly provides:
Sec. 16. The State shall protect and advance the right of the people to a balanced
and healthful ecology in accord with the rhythm and harmony of nature.
This right unites with the right to health which is provided for in the preceding section
of the same article:
Sec. 15. The State shall protect and promote the right to health of the people and
instill health consciousness among them.
While the right to a balanced and healthful ecology is to be found under the Declaration of Principles
and State Policies and not under the Bill of Rights, it does not follow that it is less important than any

of the civil and political rights enumerated in the latter. Such a right belongs to a different category of
rights altogether for it concerns nothing less than self-preservation and self-perpetuation — aptly and
fittingly stressed by the petitioners — the advancement of which may even be said to predate all
governments and constitutions. As a matter of fact, these basic rights need not even be written in the
Constitution for they are assumed to exist from the inception of humankind. If they are now explicitly
mentioned in the fundamental charter, it is because of the well-founded fear of its framers that unless
the rights to a balanced and healthful ecology and to health are mandated as state policies by the
Constitution itself, thereby highlighting their continuing importance and imposing upon the state a
solemn obligation to preserve the first and protect and advance the second, the day would not be too
far when all else would be lost not only for the present generation, but also for those to come —
generations which stand to inherit nothing but parched earth incapable of sustaining life.
The right to a balanced and healthful ecology carries with it the correlative duty to refrain from
impairing the environment. During the debates on this right in one of the plenary sessions of the
1986 Constitutional Commission, the following exchange transpired between Commissioner Wilfrido
Villacorta and Commissioner Adolfo Azcuna who sponsored the section in question:
MR. VILLACORTA:
Does this section mandate the State to provide sanctions against all
forms of pollution — air, water and noise pollution?
MR. AZCUNA:
Yes, Madam President. The right to healthful (sic) environment
necessarily carries with it the correlative duty of not impairing the
same and, therefore, sanctions may be provided for impairment of
environmental balance. 12
The said right implies, among many other things, the judicious management and conservation of the
country's forests.
Without such forests, the ecological or environmental balance would be irreversiby disrupted.
Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as
well as the other related provisions of the Constitution concerning the conservation, development
and utilization of the country's natural resources, 13 then President Corazon C. Aquino promulgated on
10 June 1987 E.O. No. 192, 14 Section 4 of which expressly mandates that the Department of
Environment and Natural Resources "shall be the primary government agency responsible for the
conservation, management, development and proper use of the country's environment and natural
resources, specifically forest and grazing lands, mineral, resources, including those in reservation and
watershed areas, and lands of the public domain, as well as the licensing and regulation of all natural
resources as may be provided for by law in order to ensure equitable sharing of the benefits derived
therefrom for the welfare of the present and future generations of Filipinos." Section 3 thereof makes the
following statement of policy:

Sec. 3. Declaration of Policy. — It is hereby declared the policy of the State to ensure
the sustainable use, development, management, renewal, and conservation of the
country's forest, mineral, land, off-shore areas and other natural resources, including
the protection and enhancement of the quality of the environment, and equitable
access of the different segments of the population to the development and the use of
the country's natural resources, not only for the present generation but for future
generations as well. It is also the policy of the state to recognize and apply a true
value system including social and environmental cost implications relative to their
utilization, development and conservation of our natural resources.
This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of
1987, 15specifically in Section 1 thereof which reads:
Sec. 1. Declaration of Policy. — (1) The State shall ensure, for the benefit of the
Filipino people, the full exploration and development as well as the judicious
disposition, utilization, management, renewal and conservation of the country's
forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural
resources, consistent with the necessity of maintaining a sound ecological balance
and protecting and enhancing the quality of the environment and the objective of
making the exploration, development and utilization of such natural resources
equitably accessible to the different segments of the present as well as future
generations.
(2) The State shall likewise recognize and apply a true value system that takes into
account social and environmental cost implications relative to the utilization,
development and conservation of our natural resources.
The above provision stresses "the necessity of maintaining a sound ecological balance and
protecting and enhancing the quality of the environment." Section 2 of the same Title, on the other
hand, specifically speaks of the mandate of the DENR; however, it makes particular reference to the
fact of the agency's being subject to law and higher authority. Said section provides:
Sec. 2. Mandate. — (1) The Department of Environment and Natural Resources shall
be primarily responsible for the implementation of the foregoing policy.
(2) It shall, subject to law and higher authority, be in charge of carrying out the State's
constitutional mandate to control and supervise the exploration, development,
utilization, and conservation of the country's natural resources.
Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as
the bases for policy formulation, and have defined the powers and functions of the DENR.
It may, however, be recalled that even before the ratification of the 1987 Constitution, specific
statutes already paid special attention to the "environmental right" of the present and future
generations. On 6 June 1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152
(Philippine Environment Code) were issued. The former "declared a continuing policy of the State (a)

to create, develop, maintain and improve conditions under which man and nature can thrive in
productive and enjoyable harmony with each other, (b) to fulfill the social, economic and other
requirements of present and future generations of Filipinos, and (c) to insure the attainment of an
environmental quality that is conducive to a life of dignity and well-being." 16 As its goal, it speaks of
the "responsibilities of each generation as trustee and guardian of the environment for succeeding
generations." 17 The latter statute, on the other hand, gave flesh to the said policy.
Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is
as clear as the DENR's duty — under its mandate and by virtue of its powers and functions under
E.O. No. 192 and the Administrative Code of 1987 — to protect and advance the said right.
A denial or violation of that right by the other who has the corelative duty or obligation to respect or
protect the same gives rise to a cause of action. Petitioners maintain that the granting of the TLAs,
which they claim was done with grave abuse of discretion, violated their right to a balanced and
healthful ecology; hence, the full protection thereof requires that no further TLAs should be renewed
or granted.
A cause of action is defined as:
. . . an act or omission of one party in violation of the legal right or rights of the other;
and its essential elements are legal right of the plaintiff, correlative obligation of the
defendant, and act or omission of the defendant in violation of said legal right. 18
It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails
to state a cause of action, 19 the question submitted to the court for resolution involves the sufficiency of
the facts alleged in the complaint itself. No other matter should be considered; furthermore, the truth of
falsity of the said allegations is beside the point for the truth thereof is deemed hypothetically admitted.
The only issue to be resolved in such a case is: admitting such alleged facts to be true, may the court
render a valid judgment in accordance with the prayer in the complaint? 20 InMilitante vs.
Edrosolano, 21 this Court laid down the rule that the judiciary should "exercise the utmost care and
circumspection in passing upon a motion to dismiss on the ground of the absence thereof [cause of
action] lest, by its failure to manifest a correct appreciation of the facts alleged and deemed hypothetically
admitted, what the law grants or recognizes is effectively nullified. If that happens, there is a blot on the
legal order. The law itself stands in disrepute."
After careful examination of the petitioners' complaint, We find the statements under the introductory
affirmative allegations, as well as the specific averments under the sub-heading CAUSE OF
ACTION, to be adequate enough to show, prima facie, the claimed violation of their rights. On the
basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It bears stressing,
however, that insofar as the cancellation of the TLAs is concerned, there is the need to implead, as
party defendants, the grantees thereof for they are indispensable parties.
The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy
formulation or determination by the executive or legislative branches of Government is not squarely
put in issue. What is principally involved is the enforcement of a right vis-a-vis policies already
formulated and expressed in legislation. It must, nonetheless, be emphasized that the political
question doctrine is no longer, the insurmountable obstacle to the exercise of judicial power or the

impenetrable shield that protects executive and legislative actions from judicial inquiry or review. The
second paragraph of section 1, Article VIII of the Constitution states that:
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.
Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz, a
distinguished member of this Court, says:
The first part of the authority represents the traditional concept of judicial power,
involving the settlement of conflicting rights as conferred as law. The second part of
the authority represents a broadening of judicial power to enable the courts of justice
to review what was before forbidden territory, to wit, the discretion of the political
departments of the government.
As worded, the new provision vests in the judiciary, and particularly the Supreme
Court, the power to rule upon even the wisdom of the decisions of the executive and
the legislature and to declare their acts invalid for lack or excess of jurisdiction
because tainted with grave abuse of discretion. The catch, of course, is the meaning
of "grave abuse of discretion," which is a very elastic phrase that can expand or
contract according to the disposition of the judiciary.
In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:
In the case now before us, the jurisdictional objection becomes even less tenable
and decisive. The reason is that, even if we were to assume that the issue presented
before us was political in nature, we would still not be precluded from revolving it
under the expanded jurisdiction conferred upon us that now covers, in proper cases,
even the political question. Article VII, Section 1, of the Constitution clearly provides: .
..
The last ground invoked by the trial court in dismissing the complaint is the non-impairment of
contracts clause found in the Constitution. The court a quo declared that:
The Court is likewise of the impression that it cannot, no matter how we stretch our
jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing
timber license agreements in the country and to cease and desist from receiving,
accepting, processing, renewing or approving new timber license agreements. For to
do otherwise would amount to "impairment of contracts" abhored (sic) by the
fundamental law. 24
We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping
pronouncement. In the first place, the respondent Secretary did not, for obvious reasons, even
invoke in his motion to dismiss the non-impairment clause. If he had done so, he would have acted

with utmost infidelity to the Government by providing undue and unwarranted benefits and
advantages to the timber license holders because he would have forever bound the Government to
strictly respect the said licenses according to their terms and conditions regardless of changes in
policy and the demands of public interest and welfare. He was aware that as correctly pointed out by
the petitioners, into every timber license must be read Section 20 of the Forestry Reform Code (P.D.
No. 705) which provides:
. . . Provided, That when the national interest so requires, the President may amend,
modify, replace or rescind any contract, concession, permit, licenses or any other
form of privilege granted herein . . .
Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not
a contract, property or a property right protested by the due process clause of the
Constitution. In Tan vs. Director of Forestry, 25 this Court held:
. . . A timber license is an instrument by which the State regulates the utilization and
disposition of forest resources to the end that public welfare is promoted. A timber
license is not a contract within the purview of the due process clause; it is only a
license or privilege, which can be validly withdrawn whenever dictated by public
interest or public welfare as in this case.
A license is merely a permit or privilege to do what otherwise would be unlawful, and
is not a contract between the authority, federal, state, or municipal, granting it and the
person to whom it is granted; neither is it property or a property right, nor does it
create a vested right; nor is it taxation (37 C.J. 168). Thus, this Court held that the
granting of license does not create irrevocable rights, neither is it property or property
rights (People vs. Ong Tin, 54 O.G. 7576).
We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: 26
. . . Timber licenses, permits and license agreements are the principal instruments by
which the State regulates the utilization and disposition of forest resources to the end
that public welfare is promoted. And it can hardly be gainsaid that they merely
evidence a privilege granted by the State to qualified entities, and do not vest in the
latter a permanent or irrevocable right to the particular concession area and the
forest products therein. They may be validly amended, modified, replaced or
rescinded by the Chief Executive when national interests so require. Thus, they are
not deemed contracts within the purview of the due process of law clause
[See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v.
Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302].
Since timber licenses are not contracts, the non-impairment clause, which reads:
Sec. 10. No law impairing, the obligation of contracts shall be passed.
cannot be invoked.

27

In the second place, even if it is to be assumed that the same are contracts, the instant case does
not involve a law or even an executive issuance declaring the cancellation or modification of existing
timber licenses. Hence, the non-impairment clause cannot as yet be invoked. Nevertheless, granting
further that a law has actually been passed mandating cancellations or modifications, the same
cannot still be stigmatized as a violation of the non-impairment clause. This is because by its very
nature and purpose, such as law could have only been passed in the exercise of the police power of
the state for the purpose of advancing the right of the people to a balanced and healthful ecology,
promoting their health and enhancing the general welfare. In Abe vs. Foster Wheeler
Corp. 28 this Court stated:
The freedom of contract, under our system of government, is not meant to be
absolute. The same is understood to be subject to reasonable legislative regulation
aimed at the promotion of public health, moral, safety and welfare. In other words,
the constitutional guaranty of non-impairment of obligations of contract is limited by
the exercise of the police power of the State, in the interest of public health, safety,
moral and general welfare.
The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine American
Life Insurance Co. vs. Auditor General, 30 to wit:
Under our form of government the use of property and the making of contracts are
normally matters of private and not of public concern. The general rule is that both
shall be free of governmental interference. But neither property rights nor contract
rights are absolute; for government cannot exist if the citizen may at will use his
property to the detriment of his fellows, or exercise his freedom of contract to work
them harm. Equally fundamental with the private right is that of the public to regulate
it in the common interest.
In short, the non-impairment clause must yield to the police power of the state.

31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with
respect to the prayer to enjoin the respondent Secretary from receiving, accepting, processing,
renewing or approving new timber licenses for, save in cases of renewal, no contract would have as
of yet existed in the other instances. Moreover, with respect to renewal, the holder is not entitled to it
as a matter of right.
WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the
challenged Order of respondent Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby
set aside. The petitioners may therefore amend their complaint to implead as defendants the holders
or grantees of the questioned timber license agreements.
No pronouncement as to costs. SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC
G.R. No. 127882

December 1, 2004

LA BUGAL-B'LAAN TRIBAL ASSOCIATION, INC., Represented by its Chairman F'LONG
MIGUEL M. LUMAYONG; WIGBERTO E. TAÑADA; PONCIANO BENNAGEN; JAIME TADEO;
RENATO R. CONSTANTINO JR.; F'LONG AGUSTIN M. DABIE; ROBERTO P. AMLOY; RAQIM L.
DABIE; SIMEON H. DOLOJO; IMELDA M. GANDON; LENY B. GUSANAN; MARCELO L.
GUSANAN; QUINTOL A. LABUAYAN; LOMINGGES D. LAWAY; BENITA P. TACUAYAN; Minors
JOLY L. BUGOY, Represented by His Father UNDERO D. BUGOY and ROGER M. DADING;
Represented by His Father ANTONIO L. DADING; ROMY M. LAGARO, Represented by His
Father TOTING A. LAGARO; MIKENY JONG B. LUMAYONG, Represented by His Father
MIGUEL M. LUMAYONG; RENE T. MIGUEL, Represented by His Mother EDITHA T. MIGUEL;
ALDEMAR L. SAL, Represented by His Father DANNY M. SAL; DAISY RECARSE,
Represented by Her Mother LYDIA S. SANTOS; EDWARD M. EMUY; ALAN P. MAMPARAIR;
MARIO L. MANGCAL; ALDEN S. TUSAN; AMPARO S. YAP; VIRGILIO CULAR; MARVIC M.V.F.
LEONEN; JULIA REGINA CULAR, GIAN CARLO CULAR, VIRGILIO CULAR JR., Represented
by Their Father VIRGILIO CULAR; PAUL ANTONIO P. VILLAMOR, Represented by His Parents
JOSE VILLAMOR and ELIZABETH PUA-VILLAMOR; ANA GININA R. TALJA, Represented by
Her Father MARIO JOSE B. TALJA; SHARMAINE R. CUNANAN, Represented by Her Father
ALFREDO M. CUNANAN; ANTONIO JOSE A. VITUG III, Represented by His Mother ANNALIZA
A. VITUG, LEAN D. NARVADEZ, Represented by His Father MANUEL E. NARVADEZ JR.;
ROSERIO MARALAG LINGATING, Represented by Her Father RIO OLIMPIO A. LINGATING;
MARIO JOSE B. TALJA; DAVID E. DE VERA; MARIA MILAGROS L. SAN JOSE; Sr. SUSAN O.
BOLANIO, OND; LOLITA G. DEMONTEVERDE; BENJIE L. NEQUINTO;1 ROSE LILIA S.
ROMANO; ROBERTO S. VERZOLA; EDUARDO AURELIO C. REYES; LEAN LOUEL A. PERIA,
Represented by His Father ELPIDIO V. PERIA;2 GREEN FORUM PHILIPPINES; GREEN FORUM
WESTERN VISAYAS (GF-WV); ENVIRONMENTAL LEGAL ASSISTANCE CENTER (ELAC);
KAISAHAN TUNGO SA KAUNLARAN NG KANAYUNAN AT REPORMANG PANSAKAHAN
(KAISAHAN);3PARTNERSHIP FOR AGRARIAN REFORM and RURAL DEVELOPMENT
SERVICES, INC. (PARRDS); PHILIPPINE PARTNERSHIP FOR THE DEVELOPMENT OF HUMAN
RESOURCES IN THE RURAL AREAS, INC. (PHILDHRRA); WOMEN'S LEGAL BUREAU (WLB);
CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES, INC. (CADI); UPLAND
DEVELOPMENT INSTITUTE (UDI); KINAIYAHAN FOUNDATION, INC.; SENTRO NG
ALTERNATIBONG LINGAP PANLIGAL (SALIGAN); and LEGAL RIGHTS AND NATURAL
RESOURCES CENTER, INC. (LRC), petitioners,
vs.
VICTOR O. RAMOS, Secretary, Department of Environment and Natural Resources (DENR);
HORACIO RAMOS, Director, Mines and Geosciences Bureau (MGB-DENR); RUBEN TORRES,
Executive Secretary; and WMC (PHILIPPINES), INC.,4 respondents.

RESOLUTION

PANGANIBAN, J.:

All mineral resources are owned by the State. Their exploration, development and utilization (EDU)
must always be subject to the full control and supervision of the State. More specifically, given the
inadequacy of Filipino capital and technology in large-scale EDU activities, the State may secure the
help of foreign companies in all relevant matters -- especially financial and technical assistance -provided that, at all times, the State maintains its right of full control. The foreign assistor or
contractor assumes all financial, technical and entrepreneurial risks in the EDU activities; hence, it
may be given reasonable management, operational, marketing, audit and other prerogatives to
protect its investments and to enable the business to succeed.
Full control is not anathematic to day-to-day management by the contractor, provided that the State
retains the power to direct overall strategy; and to set aside, reverse or modify plans and actions of
the contractor. The idea of full control is similar to that which is exercised by the board of directors of
a private corporation: the performance of managerial, operational, financial, marketing and other
functions may be delegated to subordinate officers or given to contractual entities, but the board
retains full residual control of the business.
Who or what organ of government actually exercises this power of control on behalf of the State?
The Constitution is crystal clear: the President. Indeed, the Chief Executive is the official
constitutionally mandated to "enter into agreements with foreign owned corporations." On the other
hand, Congress may review the action of the President once it is notified of "every contract entered
into in accordance with this [constitutional] provision within thirty days from its execution." In contrast
to this express mandate of the President and Congress in the EDU of natural resources, Article XII of
the Constitution is silent on the role of the judiciary. However, should the President and/or Congress
gravely abuse their discretion in this regard, the courts may -- in a proper case -- exercise their
residual duty under Article VIII. Clearly then, the judiciary should not inordinately interfere in the
exercise of this presidential power of control over the EDU of our natural resources.
The Constitution should be read in broad, life-giving strokes. It should not be used to strangulate
economic growth or to serve narrow, parochial interests. Rather, it should be construed to grant the
President and Congress sufficient discretion and reasonable leeway to enable them to attract foreign
investments and expertise, as well as to secure for our people and our posterity the blessings of
prosperity and peace.
On the basis of this control standard, this Court upholds the constitutionality of the Philippine Mining
Law, its Implementing Rules and Regulations -- insofar as they relate to financial and technical
agreements -- as well as the subject Financial and Technical Assistance Agreement (FTAA). 5
Background
The Petition for Prohibition and Mandamus before the Court challenges the constitutionality of (1)
Republic Act No. [RA] 7942 (The Philippine Mining Act of 1995); (2) its Implementing Rules and
Regulations (DENR Administrative Order No. [DAO] 96-40); and (3) the FTAA dated March 30,
1995,6 executed by the government with Western Mining Corporation (Philippines), Inc. (WMCP). 7
On January 27, 2004, the Court en banc promulgated its Decision8 granting the Petition and
declaring the unconstitutionality of certain provisions of RA 7942, DAO 96-40, as well as of the entire
FTAA executed between the government and WMCP, mainly on the finding that FTAAs are service
contracts prohibited by the 1987 Constitution.
The Decision struck down the subject FTAA for being similar to service contracts,9 which, though
permitted under the 1973 Constitution,10 were subsequently denounced for being antithetical to the

principle of sovereignty over our natural resources, because they allowed foreign control over the
exploitation of our natural resources, to the prejudice of the Filipino nation.
The Decision quoted several legal scholars and authors who had criticized service contracts
for, inter alia, vesting in the foreign contractor exclusive management and control of the enterprise,
including operation of the field in the event petroleum was discovered; control of production,
expansion and development; nearly unfettered control over the disposition and sale of the products
discovered/extracted; effective ownership of the natural resource at the point of extraction; and
beneficial ownership of our economic resources. According to the Decision, the 1987 Constitution
(Section 2 of Article XII) effectively banned such service contracts.
Subsequently, respondents filed separate Motions for Reconsideration. In a Resolution dated March
9, 2004, the Court required petitioners to comment thereon. In the Resolution of June 8, 2004, it set
the case for Oral Argument on June 29, 2004.
After hearing the opposing sides, the Court required the parties to submit their respective
Memoranda in amplification of their arguments. In a Resolution issued later the same day, June 29,
2004, the Court noted, inter alia, the Manifestation and Motion (in lieu of comment) filed by the Office
of the Solicitor General (OSG) on behalf of public respondents. The OSG said that it was not
interposing any objection to the Motion for Intervention filed by the Chamber of Mines of the
Philippines, Inc. (CMP) and was in fact joining and adopting the latter's Motion for Reconsideration.

Memoranda were accordingly filed by the intervenor as well as by petitioners, public respondents,
and private respondent, dwelling at length on the three issues discussed below. Later, WMCP
submitted its Reply Memorandum, while the OSG -- in obedience to an Order of this Court -- filed a
Compliance submitting copies of more FTAAs entered into by the government.
Three Issues Identified by the Court
During the Oral Argument, the Court identified the three issues to be resolved in the present
controversy, as follows:
1. Has the case been rendered moot by the sale of WMC shares in WMCP to Sagittarius (60 percent
of Sagittarius' equity is owned by Filipinos and/or Filipino-owned corporations while 40 percent is
owned by Indophil Resources NL, an Australian company) and by the subsequent transfer and
registration of the FTAA from WMCP to Sagittarius?
2. Assuming that the case has been rendered moot, would it still be proper to resolve the
constitutionality of the assailed provisions of the Mining Law, DAO 96-40 and the WMCP FTAA?
3. What is the proper interpretation of the phrase Agreements Involving Either Technical or Financial
Assistancecontained in paragraph 4 of Section 2 of Article XII of the Constitution?
Should the Motion for Reconsideration Be Granted?
Respondents' and intervenor's Motions for Reconsideration should be granted, for the reasons
discussed below. The foregoing three issues identified by the Court shall now be taken up seriatim.
First Issue:

Mootness
In declaring unconstitutional certain provisions of RA 7942, DAO 96-40, and the WMCP FTAA, the
majority Decision agreed with petitioners' contention that the subject FTAA had been executed in
violation of Section 2 of Article XII of the 1987 Constitution. According to petitioners, the FTAAs
entered into by the government with foreign-owned corporations are limited by the fourth paragraph
of the said provision to agreements involving only technical or financial assistance for large-scale
exploration, development and utilization of minerals, petroleum and other mineral oils. Furthermore,
the foreign contractor is allegedly permitted by the FTAA in question to fully manage and control the
mining operations and, therefore, to acquire "beneficial ownership" of our mineral resources.
The Decision merely shrugged off the Manifestation by WMPC informing the Court (1) that on
January 23, 2001, WMC had sold all its shares in WMCP to Sagittarius Mines, Inc., 60 percent of
whose equity was held by Filipinos; and (2) that the assailed FTAA had likewise been transferred
from WMCP to Sagittarius.11 The ponenciadeclared that the instant case had not been rendered
moot by the transfer and registration of the FTAA to a Filipino-owned corporation, and that the
validity of the said transfer remained in dispute and awaited final judicial determination. 12 Patently
therefore, the Decision is anchored on the assumption that WMCP had remained
aforeign corporation.
The crux of this issue of mootness is the fact that WMCP, at the time it entered into the
FTAA, happened to be wholly owned by WMC Resources International Pty., Ltd. (WMC), which in
turn was a wholly owned subsidiary of Western Mining Corporation Holdings Ltd., a publicly listed
major Australian mining and exploration company.
The nullity of the FTAA was obviously premised upon the contractor being a foreign corporation.
Had the FTAA been originally issued to a Filipino-owned corporation, there would have been no
constitutionality issue to speak of. Upon the other hand, the conveyance of the WMCP FTAA to a
Filipino corporation can be likened to the sale of land to a foreigner who subsequently acquires
Filipino citizenship, or who later resells the same land to a Filipino citizen. The conveyance would be
validated, as the property in question would no longer be owned by a disqualified vendee.
And, inasmuch as the FTAA is to be implemented now by a Filipino corporation, it is no longer
possible for the Court to declare it unconstitutional. The case pending in the Court of Appeals is a
dispute between two Filipino companies (Sagittarius and Lepanto), both claiming the right to
purchase the foreign shares in WMCP. So, regardless of which side eventually wins, the FTAA would
still be in the hands of a qualified Filipino company. Considering that there is no longer any
justiciable controversy, the plea to nullify the Mining Law has become a virtual petition for declaratory
relief, over which this Court has no original jurisdiction.
In their Final Memorandum, however, petitioners argue that the case has not become moot,
considering the invalidity of the alleged sale of the shares in WMCP from WMC to Sagittarius, and of
the transfer of the FTAA from WMCP to Sagittarius, resulting in the change of contractor in the FTAA
in question. And even assuming that the said transfers were valid, there still exists an actual case
predicated on the invalidity of RA 7942 and its Implementing Rules and Regulations (DAO 96-40).
Presently, we shall discuss petitioners' objections to the transfer of both the shares and the
FTAA. We shall take up the alleged invalidity of RA 7942 and DAO 96-40 later on in the discussion
of the third issue.
No Transgression of the Constitution
by the Transfer of the WMCP Shares

Petitioners claim, first, that the alleged invalidity of the transfer of the WMCP shares to Sagittarius
violates the fourth paragraph of Section 2 of Article XII of the Constitution; second, that it is contrary
to the provisions of the WMCP FTAA itself; and third, that the sale of the shares is suspect and
should therefore be the subject of a case in which its validity may properly be litigated.
On the first ground, petitioners assert that paragraph 4 of Section 2 of Article XII permits the
government to enter into FTAAs only with foreign-owned corporations. Petitioners insist that the first
paragraph of this constitutional provision limits the participation of Filipino corporations in the
exploration, development and utilization of natural resources to only three species of contracts -production sharing, co-production and joint venture -- to the exclusion of all other arrangements or
variations thereof, and the WMCP FTAA may therefore not be validly assumed and implemented by
Sagittarius. In short, petitioners claim that a Filipino corporation is not allowed by the Constitution to
enter into an FTAA with the government.
However, a textual analysis of the first paragraph of Section 2 of Article XII does not support
petitioners' argument. The pertinent part of the said provision states: "Sec. 2. x x x The exploration,
development and utilization of natural resources shall be under the full control and supervision of the
State. The State may directly undertake such activities, or it may enter into co-production, joint
venture, or production-sharing agreements with Filipino citizens, or corporations or associations at
least sixty per centum of whose capital is owned by such citizens. x x x." Nowhere in the provision is
there any express limitation or restriction insofar as arrangements other than the three
aforementioned contractual schemes are concerned.
Neither can one reasonably discern any implied stricture to that effect. Besides, there is no basis to
believe that the framers of the Constitution, a majority of whom were obviously concerned with
furthering the development and utilization of the country's natural resources, could have wanted to
restrict Filipino participation in that area. This point is clear, especially in the light of the overarching
constitutional principle of giving preference and priority to Filipinos and Filipino corporations in the
development of our natural resources.
Besides, even assuming (purely for argument's sake) that a constitutional limitation barring Filipino
corporations from holding and implementing an FTAA actually exists, nevertheless, such provision
would apply only to the transfer of the FTAA to Sagittarius, but definitely not to the sale of WMC's
equity stake in WMCP to Sagittarius. Otherwise, an unreasonable curtailment of property rights
without due process of law would ensue. Petitioners' argument must therefore fail.
FTAA Not Intended
Solely for Foreign Corporation
Equally barren of merit is the second ground cited by petitioners -- that the FTAA was intended to
apply solely to a foreign corporation, as can allegedly be seen from the provisions therein. They
manage to cite only one WMCP FTAA provision that can be regarded as clearly intended to apply
only to a foreign contractor: Section 12, which provides for international commercial arbitration under
the auspices of the International Chamber of Commerce, after local remedies are exhausted. This
provision, however, does not necessarily imply that the WMCP FTAA cannot be transferred to and
assumed by a Filipino corporation like Sagittarius, in which event the said provision should simply be
disregarded as a superfluity.
No Need for a Separate
Litigation of the Sale of Shares

Petitioners claim as third ground the "suspicious" sale of shares from WMC to Sagittarius; hence, the
need to litigate it in a separate case. Section 40 of RA 7942 (the Mining Law) allegedly requires the
President's prior approval of a transfer.
A re-reading of the said provision, however, leads to a different conclusion. "Sec.
40. Assignment/Transfer -- A financial or technical assistance agreement may be assigned or
transferred, in whole or in part, to a qualified person subject to the prior approval of the President:
Provided, That the President shall notify Congress of every financial or technical assistance
agreement assigned or converted in accordance with this provision within thirty (30) days from the
date of the approval thereof."
Section 40 expressly applies to the assignment or transfer of the FTAA, not to the sale and transfer
of shares of stock in WMCP. Moreover, when the transferee of an FTAA is
another foreign corporation, there is a logical application of the requirement of prior approval by the
President of the Republic and notification to Congress in the event of assignment or transfer of an
FTAA. In this situation, such approval and notification are appropriate safeguards, considering that
the new contractor is the subject of a foreign government.
On the other hand, when the transferee of the FTAA happens to be a Filipino corporation, the need
for such safeguard is not critical; hence, the lack of prior approval and notification may not be
deemed fatal as to render the transfer invalid. Besides, it is not as if approval by the President is
entirely absent in this instance. As pointed out by private respondent in its Memorandum,13 the issue
of approval is the subject of one of the cases brought by Lepanto against Sagittarius in GR No.
162331. That case involved the review of the Decision of the Court of Appeals dated November 21,
2003 in CA-GR SP No. 74161, which affirmed the DENR Order dated December 31, 2001 and the
Decision of the Office of the President dated July 23, 2002, both approving the assignment of the
WMCP FTAA to Sagittarius.
Petitioners also question the sale price and the financial capacity of the transferee. According to the
Deed of Absolute Sale dated January 23, 2001, executed between WMC and Sagittarius, the price
of the WMCP shares was fixed at US$9,875,000, equivalent to P553 million at an exchange rate of
56:1. Sagittarius had an authorized capital stock of P250 million and a paid up capital of P60 million.
Therefore, at the time of approval of the sale by the DENR, the debt-to-equity ratio of the transferee
was over 9:1 -- hardly ideal for an FTAA contractor, according to petitioners.
However, private respondents counter that the Deed of Sale specifically provides that the payment of
the purchase price would take place only after Sagittarius' commencement of commercial production
from mining operations, if at all. Consequently, under the circumstances, we believe it would not be
reasonable to conclude, as petitioners did, that the transferee's high debt-to-equity ratio per se
necessarily carried negative implications for the enterprise; and it would certainly be improper to
invalidate the sale on that basis, as petitioners propose.
FTAA Not Void,
Thus Transferrable
To bolster further their claim that the case is not moot, petitioners insist that the FTAA is void and,
hence cannot be transferred; and that its transfer does not operate to cure the constitutional infirmity
that is inherent in it; neither will a change in the circumstances of one of the parties serve to ratify the
void contract.
While the discussion in their Final Memorandum was skimpy, petitioners in their Comment (on the
MR) did ratiocinate that this Court had declared the FTAA to be void because, at the time it was

executed with WMCP, the latter was a fully foreign-owned corporation, in which the former vested full
control and management with respect to the exploration, development and utilization of mineral
resources, contrary to the provisions of paragraph 4 of Section 2 of Article XII of the Constitution.
And since the FTAA was per se void, no valid right could be transferred; neither could it be ratified,
so petitioners conclude.
Petitioners have assumed as fact that which has yet to be established. First and foremost, the
Decision of this Court declaring the FTAA void has not yet become final. That was precisely the
reason the Court still heard Oral Argument in this case. Second, the FTAA does not vest in the
foreign corporation full control and supervision over the exploration, development and utilization of
mineral resources, to the exclusion of the government. This point will be dealt with in greater detail
below; but for now, suffice it to say that a perusal of the FTAA provisions will prove that the
government has effective overall direction and control of the mining operations, including marketing
and product pricing, and that the contractor's work programs and budgets are subject to its review
and approval or disapproval.
As will be detailed later on, the government does not have to micro-manage the mining operations
and dip its hands into the day-to-day management of the enterprise in order to be considered as
having overall control and direction. Besides, for practical and pragmatic reasons, there is a need for
government agencies to delegate certain aspects of the management work to the contractor. Thus
the basis for declaring the FTAA void still has to be revisited, reexamined and reconsidered.
Petitioners sniff at the citation of Chavez v. Public Estates Authority,14 and Halili v. CA,15 claiming that
the doctrines in these cases are wholly inapplicable to the instant case.
Chavez clearly teaches: "Thus, the Court has ruled consistently that where a Filipino citizen sells
land to an alien who later sells the land to a Filipino, the invalidity of the first transfer is corrected by
the subsequent sale to a citizen. Similarly, where the alien who buys the land subsequently acquires
Philippine citizenship, the sale is validated since the purpose of the constitutional ban to limit land
ownership to Filipinos has been achieved. In short, the law disregards the constitutional
disqualification of the buyer to hold land if the land is subsequently transferred to a qualified party, or
the buyer himself becomes a qualified party."16
In their Comment, petitioners contend that in Chavez and Halili, the object of the transfer (the land)
was not what was assailed for alleged unconstitutionality. Rather, it was the transaction that was
assailed; hence subsequent compliance with constitutional provisions would cure its infirmity. In
contrast, in the instant case it is the FTAA itself, the object of the transfer, that is being assailed as
invalid and unconstitutional. So, petitioners claim that the subsequent transfer of a void FTAA to a
Filipino corporation would not cure the defect.
Petitioners are confusing themselves. The present Petition has been filed, precisely because the
grantee of the FTAA was a wholly owned subsidiary of a foreign corporation. It cannot be gainsaid
that anyone would have asserted that the same FTAA was void if it had at the outset been issued to
a Filipino corporation. The FTAA, therefore, is not per se defective or unconstitutional. It was
questioned only because it had been issued to an allegedly non-qualified, foreign-owned
corporation.
We believe that this case is clearly analogous to Halili, in which the land acquired by a non-Filipino
was re-conveyed to a qualified vendee and the original transaction was thereby cured.
Paraphrasing Halili, the same rationale applies to the instant case: assuming arguendo the invalidity
of its prior grant to a foreign corporation, the disputed FTAA -- being now held by a Filipino
corporation -- can no longer be assailed; the objective of the constitutional provision -- to keep the

exploration, development and utilization of our natural resources in Filipino hands -- has been
served.
More accurately speaking, the present situation is one degree better than that obtaining in Halili, in
which the original sale to a non-Filipino was clearly and indisputably violative of the constitutional
prohibition and thus voidab initio. In the present case, the issuance/grant of the subject FTAA to the
then foreign-owned WMCP was notillegal, void or unconstitutional at the time. The matter had to be
brought to court, precisely for adjudication as to whether the FTAA and the Mining Law had indeed
violated the Constitution. Since, up to this point, the decision of this Court declaring the FTAA void
has yet to become final, to all intents and purposes, the FTAA must be deemed valid and
constitutional.17
At bottom, we find completely outlandish petitioners' contention that an FTAA could be entered into
by the government only with a foreign corporation, never with a Filipino enterprise. Indeed, the
nationalistic provisions of the Constitution are all anchored on the protection of Filipino interests.
How petitioners can now argue that foreigners have the exclusive right to FTAAs totally overturns the
entire basis of the Petition -- preference for the Filipino in the exploration, development and
utilization of our natural resources. It does not take deep knowledge of law and logic to understand
that what the Constitution grants to foreigners should be equally available to Filipinos.
Second Issue:
Whether the Court Can Still Decide the Case,
Even Assuming It Is Moot
All the protagonists are in agreement that the Court has jurisdiction to decide this controversy, even
assuming it to be moot.
Petitioners stress the following points. First, while a case becomes moot and academic when "there
is no more actual controversy between the parties or no useful purpose can be served in passing
upon the merits,"18 what is at issue in the instant case is not only the validity of the WMCP FTAA, but
also the constitutionality of RA 7942 and its Implementing Rules and Regulations. Second, the acts
of private respondent cannot operate to cure the law of its alleged unconstitutionality or to divest this
Court of its jurisdiction to decide. Third, the Constitution imposes upon the Supreme Court the duty
to declare invalid any law that offends the Constitution.
Petitioners also argue that no amendatory laws have been passed to make the Mining Act of 1995
conform to constitutional strictures (assuming that, at present, it does not); that public respondents
will continue to implement and enforce the statute until this Court rules otherwise; and that the said
law continues to be the source of legal authority in accepting, processing and approving numerous
applications for mining rights.
Indeed, it appears that as of June 30, 2002, some 43 FTAA applications had been filed with the
Mines and Geosciences Bureau (MGB), with an aggregate area of 2,064,908.65 hectares -- spread
over Luzon, the Visayas and Mindanao19 -- applied for. It may be a bit far-fetched to assert, as
petitioners do, that each and every FTAA that was entered into under the provisions of the Mining
Act "invites potential litigation" for as long as the constitutional issues are not resolved with finality.
Nevertheless, we must concede that there exists the distinct possibility that one or more of the future
FTAAs will be the subject of yet another suit grounded on constitutional issues.
But of equal if not greater significance is the cloud of uncertainty hanging over the mining industry,
which is even now scaring away foreign investments. Attesting to this climate of anxiety is the fact

that the Chamber of Mines of the Philippines saw the urgent need to intervene in the case and to
present its position during the Oral Argument; and that Secretary General Romulo Neri of the
National Economic Development Authority (NEDA) requested this Court to allow him to speak,
during that Oral Argument, on the economic consequences of the Decision of January 27, 2004. 20
We are convinced. We now agree that the Court must recognize the exceptional character of the
situation and the paramount public interest involved, as well as the necessity for a ruling to put an
end to the uncertainties plaguing the mining industry and the affected communities as a result of
doubts cast upon the constitutionality and validity of the Mining Act, the subject FTAA and future
FTAAs, and the need to avert a multiplicity of suits. ParaphrasingGonzales v. Commission on
Elections,21 it is evident that strong reasons of public policy demand that the constitutionality issue be
resolved now.22
In further support of the immediate resolution of the constitutionality issue, public respondents
cite Acop v. Guingona,23 to the effect that the courts will decide a question -- otherwise moot and
academic -- if it is "capable of repetition, yet evading review."24 Public respondents ask the Court to
avoid a situation in which the constitutionality issue may again arise with respect to another FTAA,
the resolution of which may not be achieved until after it has become too late for our mining industry
to grow out of its infancy. They also recall Salonga v. Cruz Paño,25 in which this Court declared
that "(t)he Court also has the duty to formulate guiding and controlling constitutional principles,
precepts, doctrines or rules. It has the symbolic function of educating the bench and bar on the
extent of protection given by constitutional guarantees. x x x."
The mootness of the case in relation to the WMCP FTAA led the undersigned ponente to state in his
dissent to the Decision that there was no more justiciable controversy and the plea to nullify the
Mining Law has become a virtual petition for declaratory relief.26 The entry of the Chamber of Mines
of the Philippines, Inc., however, has put into focus the seriousness of the allegations of
unconstitutionality of RA 7942 and DAO 96-40 which converts the case to one for prohibition 27 in the
enforcement of the said law and regulations.
Indeed, this CMP entry brings to fore that the real issue in this case is whether paragraph 4 of
Section 2 of Article XII of the Constitution is contravened by RA 7942 and DAO 96-40, not whether it
was violated by specific acts implementing RA 7942 and DAO 96-40. "[W]hen an act of the
legislative department is seriously alleged to have infringed the Constitution, settling the controversy
becomes the duty of this Court. By the mere enactment of the questioned law or the approval of the
challenged action, the dispute is said to have ripened into a judicial controversy even without any
other overt act."28 This ruling can be traced from Tañada v. Angara,29 in which the Court said:
"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.
xxxxxxxxx
"As this Court has repeatedly and firmly emphasized in many cases, it will not shirk, digress
from or 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." 30
Additionally, the entry of CMP into this case has also effectively forestalled any possible objections
arising from the standing or legal interest of the original parties.

For all the foregoing reasons, we believe that the Court should proceed to a resolution of the
constitutional issues in this case.
Third Issue:
The Proper Interpretation of the Constitutional Phrase
"Agreements Involving Either Technical or Financial Assistance"
The constitutional provision at the nucleus of the controversy is paragraph 4 of Section 2 of Article
XII of the 1987 Constitution. In order to appreciate its context, Section 2 is reproduced in full:
"Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral
oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and
other natural resources are owned by the State. With the exception of agricultural lands, all
other natural resources shall not be alienated. The exploration, development and utilization
of natural resources shall be under the full control and supervision of the State. The State
may directly undertake such activities, or it may enter into co-production, joint venture or
production-sharing agreements with Filipino citizens or corporations or associations at least
sixty per centum of whose capital is owned by such citizens. Such agreements may be for a
period not exceeding twenty-five years, renewable for not more than twenty-five years, and
under such terms and conditions as may be provided by law. In cases of water rights for
irrigation, water supply, fisheries, or industrial uses other than the development of water
power, beneficial use may be the measure and limit of the grant.
"The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea,
and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino
citizens.
"The Congress may, by law, allow small-scale utilization of natural resources by Filipino
citizens, as well as cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes, bays and lagoons.
"The President may enter into agreements with foreign-owned corporations involving
either technical or financial assistance for large-scale exploration, development, and
utilization of minerals, petroleum, and other mineral oils according to the general terms
and conditions provided by law, based on real contributions to the economic growth and
general welfare of the country. In such agreements, the State shall promote the development
and use of local scientific and technical resources.
"The President shall notify the Congress of every contract entered into in accordance with
this provision, within thirty days from its execution." 31
No Restriction of Meaning by
a Verba Legis Interpretation
To interpret the foregoing provision, petitioners adamantly assert that the language of the
Constitution should prevail; that the primary method of interpreting it is to seek the ordinary meaning
of the words used in its provisions. They rely on rulings of this Court, such as the following:
"The fundamental principle in constitutional construction however is that the primary source
from which to ascertain constitutional intent or purpose is the language of the provision itself.

The presumption is that the words in which the constitutional provisions are couched
express the objective sought to be attained. In other words, verba legis prevails. Only when
the meaning of the words used is unclear and equivocal should resort be made to
extraneous aids of construction and interpretation, such as the proceedings of the
Constitutional Commission or Convention to shed light on and ascertain the true intent or
purpose of the provision being construed."32
Very recently, in Francisco v. The House of Representatives,33 this Court indeed had the occasion to
reiterate the well-settled principles of constitutional construction:
"First, verba legis, that is, wherever possible, the words used in the Constitution must be
given theirordinary meaning except where technical terms are employed. x x x.
xxxxxxxxx
"Second, where there is ambiguity, ratio legis est anima. The words of the Constitution
should be interpreted in accordance with the intent of its framers. x x x.
xxxxxxxxx
"Finally, ut magis valeat quam pereat. The Constitution is to be interpreted as a whole."34
For ease of reference and in consonance with verba legis, we reconstruct and stratify the
aforequoted Section 2 as follows:
1. All natural resources are owned by the State. Except for agricultural lands, natural
resources cannot be alienated by the State.
2. The exploration, development and utilization (EDU) of natural resources shall be under the
full control and supervision of the State.
3. The State may undertake these EDU activities through either of the following:
(a) By itself directly and solely
(b) By (i) co-production; (ii) joint venture; or (iii) production sharing agreements with
Filipino citizens or corporations, at least 60 percent of the capital of which is owned
by such citizens
4. Small-scale utilization of natural resources may be allowed by law in favor of Filipino
citizens.
5. For large-scale EDU of minerals, petroleum and other mineral oils, the President may
enter into "agreements with foreign-owned corporations involving either technical or financial
assistance according to the general terms and conditions provided by law x x x."
Note that in all the three foregoing mining activities -- exploration, development and utilization -- the
State may undertake such EDU activities by itself or in tandem with Filipinos or Filipino corporations,
except in two instances:first, in small-scale utilization of natural resources, which Filipinos may be
allowed by law to undertake; andsecond, in large-scale EDU of minerals, petroleum and mineral oils,

which may be undertaken by the State via "agreements with foreign-owned corporations involving
either technical or financial assistance" as provided by law.
Petitioners claim that the phrase "agreements x x x involving either technical or financial
assistance" simply means technical assistance or financial assistance agreements, nothing more
and nothing else. They insist that there is no ambiguity in the phrase, and that a plain reading of
paragraph 4 quoted above leads to the inescapable conclusion that what a foreign-owned
corporation may enter into with the government is merely an agreement
for either financial or technical assistance only, for the large-scale exploration, development and
utilization of minerals, petroleum and other mineral oils; such a limitation, they argue, excludes
foreign management and operation of a mining enterprise. 35
This restrictive interpretation, petitioners believe, is in line with the general policy enunciated by the
Constitution reserving to Filipino citizens and corporations the use and enjoyment of the country's
natural resources. They maintain that this Court's Decision36 of January 27, 2004 correctly declared
the WMCP FTAA, along with pertinent provisions of RA 7942, void for allowing a foreign contractor to
have direct and exclusive management of a mining enterprise. Allowing such a privilege not only
runs counter to the "full control and supervision" that the State is constitutionally mandated to
exercise over the exploration, development and utilization of the country's natural resources; doing
so also vests in the foreign company "beneficial ownership" of our mineral resources. It will be
recalled that the Decision of January 27, 2004 zeroed in on "management or other forms of
assistance" or other activities associated with the "service contracts" of the martial law regime,
since "the management or operation of mining activities by foreign contractors, which is the primary
feature of service contracts, was precisely the evil that the drafters of the 1987 Constitution sought
to eradicate."
On the other hand, the intervenor37 and public respondents argue that the FTAA allowed by
paragraph 4 is not merely an agreement for supplying limited and specific financial or technical
services to the State. Rather, such FTAA is a comprehensive agreement for the foreign-owned
corporation's integrated exploration, development and utilization of mineral, petroleum or other
mineral oils on a large-scale basis. The agreement, therefore, authorizes the foreign contractor's
rendition of a whole range of integrated and comprehensive services, ranging from the discovery to
the development, utilization and production of minerals or petroleum products.
We do not see how applying a strictly literal or verba legis interpretation of paragraph 4 could
inexorably lead to the conclusions arrived at in the ponencia. First, the drafters' choice of words -their use of the phraseagreements x x x involving either technical or financial assistance -- does not
indicate the intent to exclude other modes of assistance. The drafters opted to use involving when
they could have simply said agreements forfinancial or technical assistance, if that was their
intention to begin with. In this case, the limitation would be very clear and no further debate would
ensue.
In contrast, the use of the word "involving" signifies the possibility of the inclusion of other forms
of assistance or activities having to do with, otherwise related to or compatible with financial or
technical assistance. The word "involving" as used in this context has three connotations that can be
differentiated thus:one, the sense of "concerning," "having to do with," or "affecting"; two, "entailing,"
"requiring," "implying" or "necessitating"; and three, "including," "containing" or "comprising."38
Plainly, none of the three connotations convey a sense of exclusivity. Moreover, the word "involving,"
when understood in the sense of "including," as in including technical or financial
assistance, necessarily implies that there are activities other than those that are being included. In

other words, if an agreement includes technical or financial assistance, there is apart from such
assistance -- something else already in, and covered or may be covered by, the said agreement.
In short, it allows for the possibility that matters, other than those explicitly mentioned, could be
made part of the agreement. Thus, we are now led to the conclusion that the use of the word
"involving" implies that these agreements with foreign corporations are not limited to mere financial
or technical assistance. The difference in sense becomes very apparent when we juxtapose
"agreements for technical or financial assistance" against "agreements including technical or
financial assistance." This much is unalterably clear in a verba legisapproach.
Second, if the real intention of the drafters was to confine foreign corporations to financial or
technical assistance and nothing more, their language would have certainly been so unmistakably
restrictive and stringent as to leave no doubt in anyone's mind about their true intent. For example,
they would have used the sentence foreign corporations are absolutely prohibited from
involvement in the management or operation of mining or similar ventures or words of similar import.
A search for such stringent wording yields negative results. Thus, we come to the inevitable
conclusion that there was a conscious and deliberate decision to avoid the use of restrictive
wording that bespeaks an intent not to use the expression "agreements x x x involving either
technical or financial assistance" in an exclusionary and limiting manner.
Deletion of "Service Contracts" to
Avoid Pitfalls of Previous Constitutions,
Not to Ban Service Contracts Per Se
Third, we do not see how a verba legis approach leads to the conclusion that "the management or
operation of mining activities by foreign contractors, which is the primary feature of service
contracts, was precisely the evil that the drafters of the 1987 Constitution sought to
eradicate." Nowhere in the above-quoted Section can be discerned the objective to keep out of
foreign hands the management or operation of mining activities or the plan to eradicate service
contracts as these were understood in the 1973 Constitution. Still, petitioners maintain that the
deletion or omission from the 1987 Constitution of the term "service contracts" found in the 1973
Constitution sufficiently proves the drafters' intent to exclude foreigners from the management of the
affected enterprises.
To our mind, however, such intent cannot be definitively and conclusively established from the mere
failure to carry the same expression or term over to the new Constitution, absent a more specific,
explicit and unequivocal statement to that effect. What petitioners seek (a complete ban on foreign
participation in the management of mining operations, as previously allowed by the earlier
Constitutions) is nothing short of bringing about a momentous sea change in the economic and
developmental policies; and the fundamentally capitalist, free-enterprise philosophy of our
government. We cannot imagine such a radical shift being undertaken by our government, to the
great prejudice of the mining sector in particular and our economy in general, merely on the basis of
the omission of the terms service contract from or the failure to carry them over to the new
Constitution. There has to be a much more definite and even unarguable basis for such a drastic
reversal of policies.
Fourth, a literal and restrictive interpretation of paragraph 4, such as that proposed by petitioners,
suffers from certain internal logical inconsistencies that generate ambiguities in the understanding of