You are on page 1of 7

8/14/2015 G.R. No.

92024

TodayisFriday,August14,2015

RepublicofthePhilippines
SUPREMECOURT
Manila

ENBANC

G.R.No.92024November9,1990

CONGRESSMANENRIQUET.GARCIA(SecondDistrictofBataan),petitioner,
vs.
THEBOARDOFINVESTMENTS,THEDEPARTMENTOFTRADEANDINDUSTRY,LUZONPETROCHEMICAL
CORPORATION,andPILIPINASSHELLCORPORATION,respondents.

AbrahamC.LaVinaforpetitioner.

Sycip,Salazar,Hernandez&GatmaitanforLuzonPetrochemicalCorporation.

Romulo,Mabanta,Buenaventura,Sayoc&DelosAngelesforPilipinasShellPetroleumCorporation.

GUTIERREZ,JR.,J.:

ThisisapetitiontoannulandsetasidethedecisionoftheBoardofInvestments(BOI)/DepartmentofTradeand
Industry(DTI)approvingthetransferofthesiteoftheproposedpetrochemicalplantfromBataantoBatangasand
theshiftoffeedstockforthatplantfromnaphthaonlytonaphthaand/orliquefiedpetroleumgas(LPG).

ThispetitionisasequeltothepetitioninG.R.No.88637entitled"CongressmanEnriqueT.Garciav.theBoardof
Investments",September7,1989,wherethisCourtissuedadecision,orderingtheBOIasfollows:

WHEREFORE,thepetitionforcertiorariisgranted.TheBoardofInvestmentsisordered:(1)topublish
the amended application for registration of the Bataan Petrochemical Corporation, (2) to allow the
petitionertohaveaccesstoitsrecordsontheoriginalandamendedapplicationsforregistration,asa
petrochemicalmanufacturer,oftherespondentBataanPetrochemicalCorporation,excluding,however,
privilegedpaperscontainingitstradesecretsandotherbusinessandfinancialinformation,and(3)to
setforhearingthepetitioner'soppositiontotheamendedapplicationinorderthathemaypresentat
suchhearingalltheevidenceinhispossessioninsupportofhisoppositiontothetransferofthesiteof
theBPCpetrochemicalplanttoBatangasprovince.Thehearingshallnotexceedaperiodoften(10)
days from the date fixed by the BOI, notice of which should be served by personal service to the
petitionerthroughcounsel,atleastthree(3)daysinadvance.Thehearingsmaybeheldfromdayto
day for a period of ten (10) days without postponements. The petition for a writ of prohibition or
preliminaryinjunctionisdenied.Nocosts.(Rollo,pages450451)

However,actingonthepetitioner'smotionforpartialreconsiderationaskingthatweruleontheimportofP.D.Nos.
949and1803andontheforeigninvestor'sclaimofrightoffinalchoiceofplantsite,inthelightoftheprovisionsof
theConstitutionandtheOmnibusInvestmentsCodeof1987,thisCourtonOctober24,1989,madetheobservation
that P.D. Nos. 949 and 1803 "do not provide that the Limay site should be the only petrochemical zone in the
country,norprohibittheestablishmentofapetrochemicalplantelsewhereinthecountry,thattheestablishmentofa
petrochemicalplantinBatangasdoesnotviolateP.D.No.949andP.D.No.1803.

Our resolution skirted the issue of whether the investor given the initial inducements and other circumstances
surrounding its first choice of plant site may change it simply because it has the final choice on the matter. The
Courtmerelyruledthatthepetitionerappearstohavelostinterestinthecasebyhisfailuretoappearatthehearing
thatwassetbytheBOIafterreceiptofthedecision,sohemaybedeemedtohavewaivedthefruitofthejudgment.
Onthisground,themotionforpartialreconsiderationwasdenied.

Amotionforreconsiderationofsaidresolutionwasfiledbythepetitioneraskingthatweresolvethebasicissueof
whetherornottheforeigninvestorhastherightoffinalchoiceofplantsitethatthenonattendanceofthepetitioner
at the hearing was because the decision was not yet final and executory and that the petitioner had not therefor

http://www.lawphil.net/judjuris/juri1990/nov1990/gr_92024_1990.html 1/7
8/14/2015 G.R. No. 92024
waivedtherighttoahearingbeforetheBOI.

IntheCourt'sresolutiondatedJanuary17,1990,westated:

Doestheinvestorhavea"rightoffinalchoice"ofplantsite?Neitherunderthe1987Constitutionnorin
the Omnibus Investments Code is there such a 'right of final choice.' In the first place, the investor's
choice is subject to processing and approval or disapproval by the BOI (Art. 7, Chapter II, Omnibus
InvestmentsCode).BysubmittingitsapplicationandamendedapplicationtotheBOIforapproval,the
investor recognizes the sovereign prerogative of our Government, through the BOI, to approve or
disapprove the same after determining whether its proposed project will be feasible, desirable and
beneficialtoourcountry.ByaskingthathisoppositiontotheLPC'samendedapplicationbeheardby
theBOI,thepetitionerlikewiseacknowledgesthattheBOI,nottheinvestor,hasthelastwordorthe
"finalchoice"onthematter.

Secondly,asthiscasehasshown,evenachoicethathadbeenapprovedbytheBOImaynotbe'final',
forsuperveningcircumstancesandchangesintheconditionsofaplacemaydictateacorresponding
changeinthechoiceofplantsiteinorderthattheprojectwillnotfail.Afterall,ourcountrywillbenefit
onlywhenaprojectsucceeds,notwhenitfails.(Rollo,pp.538539)

Nevertheless,themotionforreconsiderationofthepetitionerwasdenied.

A minority composed of Justices MelencioHerrera, Gancayco, Sarmiento and this ponente voted to grant the
motionforreconsiderationstatingthatthehearingsetbytheBOIwasprematureasthedecisionoftheCourtwas
not yet final and executory that as contended by the petitioner the Court must first rule on whether or not the
investorhastherightoffinalchoiceofplantsiteforiftherulingisintheaffirmative,thehearingwouldbeauseless
exercisethatintheOctober19,1989resolution,theCourtwhileupholdingvalidityofthetransferoftheplantsite
didnotruleontheissueofwhohasthefinalchoicethattheyagreewiththeobservationofthemajoritythat"the
investorhasnofinalchoiceeitherunderthe1987ConstitutionorintheOmnibusInvestmentsCodeandthatitisthe
BOIwhodecidesforthegovernment"andthatthepleaofthepetitionershouldbegrantedtogivehimthechanceto
showthejustnessofhisclaimandtoenabletheBOItogiveasecondhardlookatthematter.

Thus, the herein petition which relies on the ruling of the Court in the resolution of January 17, 1990 in G.R. No.
88637thattheinvestorhasnorightoffinalchoiceunderthe1987ConstitutionandtheOmnibusInvestmentsCode.

UnderP.D.No.1803datedJanuary16,1981,576hectaresofthepublicdomainlocatedinLamao,Limay,Bataan
werereservedforthePetrochemicalIndustrialZoneundertheadministration,management,andownershipofthe
PhilippineNationalOilCompany(PNOC).

TheBataanRefiningCorporation(BRC)isawhollygovernmentownedcorporation,locatedatBataan.Itproduces
60%ofthenationaloutputofnaphtha.

Taiwanese investors in a petrochemical project formed the Bataan Petrochemical Corporation (BPC) and applied
withBOIforregistrationasanewdomesticproducerofpetrochemicals.ItsapplicationspecifiedBataanastheplant
site.Oneofthetermsandconditionsforregistrationoftheprojectwastheuseof"naphthacracker"and"naphtha"
asfeedstockorfuelforitspetrochemicalplant.ThepetrochemicalplantwastobeajointventurewithPNOC.BPC
wasissuedacertificateofregistrationonFebruary24,1988byBOI.

BPCwasgivenpioneerstatusandaccordedfiscalandotherincentivesbyBOI,like:(1)exemptionfromtaxeson
rawmaterials,(2)repatriationoftheentireproceedsofliquidationinvestmentsincurrencyoriginallymadeandatthe
exchange rate obtaining at the time of repatriation and (3) remittance of earnings on investments. As additional
incentive,theHouseofRepresentativesapprovedabillintroducedbythepetitionereliminatingthe48%advalorem
taxonnaphthaifandwhenitisusedasrawmaterialsinthepetrochemicalplant.(G.R.No.88637,September7,
1989,pp.23.Rollo,pp.441442)

However, in February, 1989, A.T. Chong, chairman of USI Far East Corporation, the major investor in BPC,
personally delivered to Trade Secretary Jose Concepcion a letter dated January 25, 1989 advising him of BPC's
desiretoamendtheoriginalregistrationcertificationofitsprojectbychangingthejobsitefromLimay,Bataan,to
Batangas.Thereasonadducedforthetransferwastheinsurgencyandunstablelaborsituation,andthepresencein
Batangasofahugeliquefiedpetroleumgas(LPG)depotownedbythePhilippineShellCorporation.

The petitioner vigorously opposedthe proposal andnolessthanPresidentAquinoexpressed herpreference that


theplantbeestablishedinBataaninaconferencewiththeTaiwaneseinvestors,theSecretaryofNationalDefense
andTheChiefofStaffoftheArmedForces.

DespitespeechesintheSenateandHouseopposingtheTransferoftheprojecttoBatangas,BPCfiledonApril11,
1989itsrequestforapprovaloftheamendments.Itsapplicationisasfollows:"(l)increasingtheinvestmentamount
fromUS$220milliontoUS$320million(2)increasingtheproductioncapacityofitsnaphthacracker,polythylene

http://www.lawphil.net/judjuris/juri1990/nov1990/gr_92024_1990.html 2/7
8/14/2015 G.R. No. 92024
plantandpolypropyleneplant(3)changingthefeedstockfromnaphthaonlyto"naphthaand/orliquefiedpetroleum
gas"and(4)transferringthejobsitefromLimay,Bataan,toBatangas.(AnnexBtoPetitionRollo,p.25)

NotwithstandingoppositionfromanyquartersandtherequestofthepetitioneraddressedtoSecretaryConcepcion
tobefurnishedacopyoftheproposedamendmentwithitsattachmentswhichwasdeniedbytheBOIonMay25,
1989,BOIapprovedtherevisionoftheregistrationofBPC'spetrochemicalproject.(Petition,AnnexFRollo,p.32
Seepp.4to6,DecisioninG.R.No.88637supra.)

BOIViceChairmanTomasI.AlcantaratestifyingbeforetheCommitteeonWaysandMeansoftheSenateasserted
that:

TheBOIhastakenapublicpositionpreferringBataanoverBatangasasthesiteofthepetrochemical
complex, as this would provide a better distribution of industries around the Metro Manila area. ... In
advocatingthechoiceofBataanastheprojectsiteforthepetrochemicalcomplex,theBOI,however,
madeitclear,andIwouldliketorepeatthisthattheBOImadeitclearinitsviewthattheBOIorthe
governmentforthatmattercouldonlyrecomendastowheretheprojectshouldbelocated.TheBOI
recognizesandrespecttheprinciplethatthefinalchouceisstillwiththeproponentwhowouldinthe
finalanalysisprovidethefundingorriskcapitalfortheproject.(Petition,P.13AnnexDtothepetition)

ThispositionhasnotbeendeniedbyBOIinitspleadingsinG.R.No.88637andinthepresentpetition.

Section1,ArticleVIIIofthe1987Constitutionprovides:

SECTION1.ThejudicialpowershallbevestedinoneSupremeCourtandinsuchlowercourtsasmay
beestablishedbylaw.

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
instrumentalityoftheGovernment.

There is before us an actual controversy whether the petrochemical plant should remain in Bataan or should be
transferredtoBatangas,andwhetheritsfeedstockoriginallyofnaphthaonlyshouldbechangedtonaphthaand/or
liquefied petroleum gas as the approved amended application of the BPC, now Luzon Petrochemical Corporation
(LPC),shows.AndinthelightofthecategoricaladmissionoftheBOIthatitistheinvestorwhohasthefinalchoice
ofthesiteandthedecisiononthefeedstock,whetherornotitconstitutesagraveabuseofdiscretionfortheBOIto
yieldtothewishesoftheinvestor,nationalinterestnotwithstanding.

WerulethattheCourthasaconstitutionaldutytostepintothiscontroversyanddeterminetheparamountissue.We
grantthepetition.

First,BataanwastheoriginalchoiceastheplantsiteoftheBOItowhichtheBPCagreed.Thatiswhyitorganized
itselfintoacorporationbearingthenameBataan.Thereisavailable576hectaresofpubliclandpreciselyreserved
asthepetrochemicalzoneinLimay,BataanunderP.D.No.1803.Thereisnoneedtobuyexpensiverealestatefor
thesiteunlikeintheproposedtransfertoBatangas.Thesiteistheresultofcarefulstudylongbeforeanycovetous
interests intruded into the choice. The site is ideal. It is not unduly constricted and allows for expansion. The
respondentshavenotshownnorreiteratedthattheallegedpeaceandordersituationinBataanorunstablelabor
situation warrant a transfer of the plant site to Batangas. Certainly, these were taken into account when the firm
nameditselfBataanPetrochemicalCorporation.Moreover,theevidenceprovesthecontrary.

Second,theBRC,agovernmentownedFilipinocorporation,locatedinBataanproduces60%ofthenationaloutput
ofnaphthawhichcanbeusedasfeedstockfortheplantinBataan.Itcanprovidethefeedstockrequirementofthe
plant.Ontheotherhand,thecountryisshortofLPGandthereisneedtoimportthesameforuseoftheplantin
Batangas. The local production thereof by Shell can hardly supply the needs of the consumers for cooking
purposes.Scarcedollarswillbediverted,unnecessarily,fromvitallyessentialprojectsinordertofeedthefurnaces
ofthetransferredpetrochemicalplant.

Third,naphthaasfeedstockhasbeenexemptedbylawfromtheadvaloremtaxbytheapprovalofRepublicActNo.
6767byPresidentAquinobutexcludingLPGfromexemptionfromadvaloremtax.Thelawwasenactedspecifically
forthepetrochemicalindustry.ThepolicydeterminationbybothCongressandthePresidentisclear.NeitherBOI
nor a foreign investor should disregard or contravene expressed policy by shifting the feedstock from naphtha to
LPG.

Fourth, under Section 10, Article XII of the 1987 Constitution, it is the duty of the State to "regulate and exercise
authority over foreign investments within its national jurisdiction and in accordance with its national goals and
priorities."ThedevelopmentofaselfreliantandindependentnationaleconomyeffectivelycontrolledbyFilipinosis
mandatedinSection19,ArticleIIoftheConstitution.

http://www.lawphil.net/judjuris/juri1990/nov1990/gr_92024_1990.html 3/7
8/14/2015 G.R. No. 92024
In Article 2 of the Omnibus Investments Code of 1987 "the sound development of the national economy in
consonancewiththeprinciplesandobjectivesofeconomicnationalism"isthesetgoalofgovernment.

Fifth, with the admitted fact that the investor is raising the greater portion of the capital for the project from local
sourcesbywayofloanwhichledtothesocalled"petroscamscandal",thecapitalrequirementswouldbegreatly
minimizedifLPCdoesnothavetobuythelandfortheprojectanditsfeedstockshallbelimitedtonaphthawhichis
certainlymoreeconomical,morereadilyavailablethanLPG,anddoesnothavetobeimported.

Sixth,iftheplantsiteismaintainedinBataan,thePNOCshallbeapartnerintheventuretothegreatbenefitand
advantage of the government which shall have a participation in the management of the project instead of a firm
whichisahugemultinationalcorporation.

In the light of all the clear advantages manifest in the plant's remaining in Bataan, practically nothing is shown to
justifythetransfertoBatangasexceptanearabsolutediscretiongivenbyBOItoinvestorsnotonlytofreelychoose
thesitebuttotransferitfromtheirownfirstchoiceforreasonswhichremainmurkytosaytheleast.

AndthisbringsustoaprimeconsiderationwhichtheCourtcannotrightlyignore.

Section1,ArticleXIIoftheConstitutionprovidesthat:

xxxxxxxxx

TheStateshallpromoteindustrializationandfullemploymentbasedonsoundagriculturaldevelopment
and agrarian reform, through industries that make full and efficient use of human and natural
resources,andwhicharecompetitiveinbothdomesticandforeignmarkets.However,theStateshall
protectFilipinoenterprisesagainstunfairforeigncompetitionandtradepractices.

xxxxxxxxx

Every provision of the Constitution on the national economy and patrimony is infused with the spirit of national
interest.Thenonalienationofnaturalresources,theState'sfullcontroloverthedevelopmentandutilizationofour
scarceresources,agreementswithforeignersbeingbasedonrealcontributionstotheeconomicgrowthandgeneral
welfareofthecountryandtheregulationofforeigninvestmentsinaccordancewithnationalgoalsandprioritiesare
tooexplicitnottobenoticedandunderstood.

A petrochemical industry is not an ordinary investment opportunity. It should not be treated like a garment or
embroideryfirm,ashoemakingventure,orevenanassemblerofcarsormanufacturerofcomputerchips,where
the BOI reasoning may be accorded fuller faith and credit. The petrochemical industry is essential to the national
interest. In other ASEAN countries like Indonesia and Malaysia, the government superintends the industry by
controllingtheupstreamorcrackerfacility.

InthisparticularBPCventure,notonlyhastheGovernmentgivenunprecedentedfavors,amongthem:

(1) For an initial authorized capital of only P20 million, the Central Bank gave an eligible relending
creditorrelendingfacilityworthUS$50millionandadebttoswaparrangementforUS$30millionora
totalaccommodationofUS$80millionwhichatcurrentexchangeratesisaroundP2080million.

(2) A major part of the company's capitalization shall not come from foreign sources but from loans,
initially a Pl Billion syndicated loan, to be given by both government banks and a consortium of
Philippineprivatebanksorincommonparlance,acaseof'guiniguisasasarilingmanteca.'

(3)Taxexemptionsandprivilegesweregivenaspartofits'preferredpioneerstatus.'

(4) Loan applications of other Philippine firms will be crowded out of the Asian Development Bank
portfoliobecauseofthepetrochemicalfirm'smassiveloanrequest.(Takenfromtheproceedingsbefore
theSenateBlueRibbonCommittee).

but through its regulatory agency, the BOI, it surrenders even the power to make a company abide by its initial
choice,a choice free from any suspicion of unscrupulous machinations and a choice which is undoubtedly in the
bestinterestsoftheFilipinopeople.

TheCourt,therefore,holdsandfindsthattheBOIcommittedagraveabuseofdiscretioninapprovingthetransferof
the petrochemical plant from Bataan to Batangas and authorizing the change of feedstock from naphtha only to
naphthaand/orLPGforthemainreasonthatthefinalsayisintheinvestorallothercircumstancestothecontrary
notwithstanding.Nocogentadvantagetothegovernmenthasbeenshownbythistransfer.Thisisarepudiationof
theindependentpolicyofthegovernmentexpressedinnumerouslawsandtheConstitutiontorunitsownaffairsthe
wayitdeemsbestforthenationalinterest.

http://www.lawphil.net/judjuris/juri1990/nov1990/gr_92024_1990.html 4/7
8/14/2015 G.R. No. 92024
OnecanbutrememberthewordsofagreatFilipinoleaderwhoinpartsaidhewouldnotmindhavingagovernment
runlikehellbyFilipinosthanonesubservienttoforeigndictation.Inthiscase,itisnotevenaforeigngovernment
butanordinaryinvestorwhomtheBOIallowstodictatewhatweshalldowithourheritage.

WHEREFORE,thepetitionisherebygranted.ThedecisionoftherespondentBoardofInvestmentsapprovingthe
amendment of the certificate of registration of the Luzon Petrochemical Corporation on May 23, 1989 under its
Resolution No. 193, Series of 1989, (Annex F to the Petition) is SET ASIDE as NULL and VOID. The original
certificateofregistrationofBPC'(nowLPC)ofFebruary24,1988withBataanastheplantsiteandnaphthaasthe
feedstockis,therefore,orderedmaintained.

SOORDERED.

Cruz,Gancayco,Padilla,Bidin,SarmientoandMedialdea,JJ.,concur.

Fernan,C.J.,Paras,JJ.,tooknopart.

Feliciano,J.,isonleave.

SeparateOpinions

GRIOAQUINO,J.,dissentingOpinion:

Thisisthepetitioner'ssecondpetitionforcertiorariandprohibitionwithapplicationforatemporaryrestrainingorder
or preliminary injunction against the respondents Board of Investments (BOI), Department of Trade and Industry
(DTI),theLuzonPetrochemicalCorporation(LPC),formerlyBataanPetrochemicalCorporation,andPilipinasShell
Corporation(SHELL)onthetransferoftheLPCpetrochemicalplantsitefromBataantoBatangas.Thefirstcase
wasdocketedinthisCourtasG.R.No.88637andwasdecidedonSeptember7,1989.Consistentwithmyopinion
inthefirstcase,Ivoteoncemoretodenythepetition.

Thepetitionerfiledthissecondpetitionsupposedly"upontheauthorityandstrength"ofthisCourt'sstatementinits
ResolutionofJanuary9,1990inG.R.No.88637thattheforeigninvestor(LPC)doesnothavearightoffinalchoice
ofplantsitebecauseitschoiceissubjecttoapprovalordisapprovalbytheBOI(p.3,Rollo).Ergo,theBOIhasthe
"finalchoice."

Petitioner contends that since the BOI had earlier approved Bataan as the plant site of the LPG petrochemical
complex,andof"naphthaonly"asthefeedstock,thatapprovalwas"final"andmaynotbechanged.Hence,theBOI
allegedlyabuseditsdiscretion:(1)inapprovingthetransferoftheLPC'splantsitefromBataantoBatangas(inspite
oftheBOI'sinitialpreferenceforBataan)"uponthefalseandunlawfulthesisthattheforeigninvestorhastherightof
finalchoicebyplantsite"(p.13,Rollo),and(2)inallowingtheLPCtoshiftfeedstockfromnaphthaonly,tonaphtha
and/or LPG, despite the disadvantages of using LPG. Petitioner prays the Court to annul the BOI's action and
prohibitLPCfromtransferringitsplantsitetoBatangasandshiftingfeedstocktonaphthaand/orLPG(p.22,Rollo).

Thepetitionisnotwelltaken.Thereisnoprovisioninthe1987InvestmentsCodeprohibitingtheamendmentofthe
investor'sapplicationforregistrationofitsproject,suchas,inthiscase,itsplantsite,thefeedstocktobeused,and
thecapitalizationoftheproject.

NeitherdoesthelawprohibittheBOIfromapprovingtheamendedapplication.

SincetheinvestormayamenditsapplicationandtheBOImayapproveordisapprovetheamendments,whenmay
theBOIbedeemedtohavemadea"finalchoice"regardingthoseaspectsoftheprojectwhichhavebeenchanged?

OnlytheBOIortheChiefExecutiveiscompetenttoanswerthatquestion,forthematterofchoosinganappropriate
sitefortheinvestor'sprojectisapoliticalandeconomicdecisionwhich,underoursystemofseparationofpowers,
only the executive branch, as implementor of policy formulated by the legislature (in this case, the policy of
encouraging and inviting foreign investments into our country), is empowered to make. It is not for this Court to
determinewhatis,orshouldbe,theBOI's"finalchoice"ofplantsiteandfeedstock,for,aswesaidinourdecisionin
G.R.No.88637:

ThisCourt...doesnotpossessthenecessarytechnologyandscientificexpertisetodetailewhether
thetransferoftheproposedBPC(nowLPC)petrochemicalcomplexfromBataantoBatangasandthe
change of fuel from 'naphtha only to naphtha and/or LPG' will be best for the project and for our
country.ThisCourtisnotabouttodelveintotheeconomicsandpoliticsofthiscase.Itisconcerned
simplywiththeallegedviolationofdueprocessandtheallegedextralimitationofpoweranddiscretion

http://www.lawphil.net/judjuris/juri1990/nov1990/gr_92024_1990.html 5/7
8/14/2015 G.R. No. 92024
onthepartofthepublicrespondentsinapprovingthetransferoftheprojecttoBatangaswithoutgiving
duenoticeandanopportunitytobeheardtothevocalopponentsofthatmove."(pp.445446,Rolloof
G.R.No.88637.)

AlthoughwedidsayinourdecisioninG.R.No.88637thattheBOI,nottheforeigninvestor,hastherightof"final
choice" of plant site for the LPC project, the Court would be overstepping the bounds of its jurisdiction were it to
usurptheprerogativeoftheBOItomakethatchoiceorchangeit.

The petitioner's contention that the BOI abused its discretion in approving the transfer of the LPC plant site to
BatangasbecausetheBOI,ineffect,yieldedtotheinvestor'schoice,isnotwelltaken.Therecordshowsthatthe
BOIapprovedthetransferbecause"theBOIrecognizesthejustificationgivenbytheproponentoftheproject(p.30,
Rollo). The fact that the petitioner disagrees with the BOI's decision does not make it wrong. The petitioner's
recourse against the BOI's action is by an appeal to the President (Sec. 36, 1987 Investments Code), not to this
Court.

ThisCourt,intheexerciseofitsjudicialpower,mayreviewandannulexecutiveaswellaslegislativeactionswhen
theyclashwiththeConstitutionorwithexistinglaws,orwhenanybranchorinstrumentalityoftheGovernmenthas
actedwithgraveabuseofdiscretionamountingtolackorexcessofjurisdiction(Sec.1,Art.VIII,1987Constitution)
buttheCourtmaynotdomorethanthat.Itmaynotmakethedecisionsthattheexecutiveshouldhavemadenor
pass the laws that the legislature should have passed. Not even the much publicized "petroscam" involving the
financialarrangements(nottheissueinthiscase)fortheLPCprojectwouldjustifytheinterventionofthiscourtina
matterthatpertainstotheexclusivedomainoftheexecutivedepartment.Thecourtdoesnothaveapanaceaforall
theillsthatafflictourcountrynorasolutionforeveryproblemthatbesetsit.

Did the BOI gravely abuse its discretion in approving the LPC's amended application for registration of its
petrochemical project to warrant the intervention of this Court? Grave abuse of discretion implies such capricious
andwhimsicalexerciseofjudgmentasisequivalenttolackofjurisdiction(AbadSantosvs.Prov.ofTarlac,67Phil.
480Alafrizvs.Nable,70Phil.278).

InlightoftheLPC'sjustificationsforthetransferofitsprojectsiteandtheshiftfromonekindoffeedstocktotwo,we
are not prepared to hold that the BOI's decision to approve the changes was the product of a capricious and
arbitraryexerciseofjudgmentonitspart,despitetheseeminglyimpressiveargumentsofthepetitionershowingthe
advantagesofestablishingthepetrochemicalplantinBataanandofusingnaphthaonlyasfeedstock.Wearenot
preparedtosubstitutethejudgmentoftheBOIonthismatterwithonecraftedbythisCourt.

Withregardtothescandalouslyliberalfinancialaccommodationsthatlocalbankshaveallegedlyagreedtograntto
theLPC(thesocalled"petroscam")toenableittoraiseamajorpartofitscapitalrequirementsfromlocalsources
(hence,abetrayalofthepeople'sexpectationthatforeigninvestorswillbringinforeignexchangetofinancetheir
projectsinthiscountry)itissignificantthatthepetitionerhasnotledanoutcryforthedisapprovalandcancellation
of the project on this score. Apparently, the petitioner is not seriously disturbed by the moral implications of the
"scam"providedthepetrochemicalplantissetupinBataan.

ThedecisionoftheBOItoallowthetransferoftheLPCpetrochemicalprojecttoBatangasandshiftfeedstockfrom
naphthaonlytonaphthaand/orLPG,mayappeartothepetitionertobeextremelyunwiseandinadvisable,butthe
Court may not, for that reason annul the BOI's action or prohibit it from acting on a matter that lies within its
particularsphereofcompetence,fortheCourtisnotajudgeofthewisdomandsoundnessoftheactionsofthetwo
othercoequalbranchesoftheGovernment,butonlyoftheirlegalityandconstitutionality.

WHEREFORE,Ivotetodenythepetitionforcertiorariandprohibitionforlackofmerit.

MelencioHerrera,NarvasaandRegalado,JJ.,concur.

MELENCIOHERRERA,J.,dissenting:

Consistent with my dissent in G.R. No. 88637, the first petition, I concur in the dissent herein of Mme. Justice
Aquino and merely wish to add that in its Decision, the majority has actually imposed its own views on matters
fallingwithinthecompetenceofapolicymakingbodyoftheGovernment.Itdecideduponthewisdomofthetransfer
of the site of the proposed project (pp. 89) the reasonableness of the feedstock to be used (pp. 89) the
undesirabilityofthecapitalizationaspectoftheproject(p.10),andinjecteditsownconceptofthenationalinterest
asregardstheestablishmentofabasicindustryofstrategicimportancetothecountry(p.13).

It is true that the judicial power embodied in Article VIII of the 1987 Constitution speaks of the duty of Courts of
justice to determine whether or not there has been grave abuse of discretion amounting to lack or excess of
jurisdictiononthepartofanybranchorinstrumentalityoftheGovernment.Bynomeans,however,doesitvestin
theCourtsthepowertoentertherealmofpolicyconsiderationsundertheguiseofthecommissionofgraveabuse
ofdiscretion.

http://www.lawphil.net/judjuris/juri1990/nov1990/gr_92024_1990.html 6/7
8/14/2015 G.R. No. 92024
ButthisisexactlywhatthemajorityDecisionhasresultedin.Ithasmadeasweepingpolicydeterminationandhas
unwittinglytransformeditselfintowhatmightbetermeda"governmentbytheJudiciary,"somethingneverintended
bytheframersoftheConstitutionwhentheyprovidedforseparationofpowersamongthethreecoequalbranches
ofgovernmentandexcludedtheJudiciaryfrompolicymaking.

TheLawphilProjectArellanoLawFoundation

http://www.lawphil.net/judjuris/juri1990/nov1990/gr_92024_1990.html 7/7