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G.R. No. 113375 May 5, 1994


PCSO decided to establish an on-line lottery system for the purpose of increasing its revenue
base and diversifying its sources of funds. After learning of the same, the Berjaya Group
Berhad, a multinational company and one of the ten largest public companies in Malaysia,
became interested to offer its services and resources to PCSO. As an initial step, Berjaya Group
Berhad organized with some Filipino investors a Philippine corporation known as the Philippine
Gaming Management Corporation (PGMC), which was intended to be the medium through
which the technical and management services required for the project would be offered and
delivered to PCSO. Considering the Constitutions citizenship requirement, the PGMC claims that
the Berjaya Group undertook to reduce its equity stakes in PGMC to 40% by selling 35% out of
the original 75% foreign stockholdings to local investors.

Office of the President announced that it had given the respondent PGMC the go-signal to
operate the country's on-line lottery system and that the corresponding implementing contract
would be submitted thereafter.

KILOSBAYAN sent an open letter to Presidential Ramos strongly opposing the setting up to the
on-line lottery system on the basis of serious moral and ethical considerations. Nevertheless, an
agreement denominated as "Contract of Lease" was finally executed by respondent PCSO and
respondent PGMC. The President, per the press statement issued by the Office of the President,
approved it on 20 December 1993.

KILOSBAYAN, a non-stock domestic corporation composed of civic-spirited citizens, pastors,

priests, nuns, and lay leaders who are committed to the cause of truth, justice, and national
renewal, along with Senators Webb and Taada and Representative Joker Arroyo acting in their
capacities as members of Congress and as taxpayers and concerned citizens of the Philippines,
want to nullify the said contract. They claim that the Office of the President, acting through
Executive Secretary Guingona and/or Assistant Executive Secretary for Legal Affairs Corona,
and the PCSO gravely abused their discretion and/or functions tantamount to lack of jurisdiction
and/or authority in respectively. Moreover, they alleged that PCSO is prohibited from holding
and conducting lotteries "in collaboration, association or joint venture with any person,
association, company or entity" pursuant to its charter, a Congressional franchise is required
before any person may be allowed to establish and operate said telecommunications system,
among others.
Meanwhile, PGMC asserts that it is merely an independent contractor for a piece of work, (i.e.,
the building and maintenance of a lottery system to be used by PCSO in the operation of its
lottery franchise) and not a co-operator of the lottery franchise with PCSO, nor is PCSO sharing
its franchise, 'in collaboration, association or joint venture' with PGMC; and that the petitioners
do not appear to have the legal standing or real interest in the subject contract and in obtaining
the reliefs sought. Guingona, Corona, and PCSO assert similar counter-arguments.

WON petitioners have locus standi.
Yes. A party's standing before this Court is a procedural technicality which it may, in the
exercise of its discretion, set aside in view of the importance of the issues raised. In the
landmark Emergency Powers Cases, this Court brushed aside this technicality because the
transcendental importance to the public of these cases demands that they be settled promptly
and definitely, brushing aside, if we must, technicalities of procedure. Insofar as taxpayers' suits
are concerned, this Court had declared that it is not devoid of discretion as to whether or not it
should be entertained, or that it enjoys an open discretion to entertain the same or not. Several
cases were cited to bolster this claim, and one of those was from Association of Small
Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform. It declared: With
particular regard to the requirement of proper party as applied in the cases before us, we hold
that the same is satisfied by the petitioners and intervenors because each of them has
sustained or is in danger of sustaining an immediate injury as a result of the acts or measures
complained of. And even if, strictly speaking, they are not covered by the definition, it is still
within the wide discretion of the Court to waive the requirement and so remove the impediment
to its addressing and resolving the serious constitutional questions raised.

In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to question
the constitutionality of several executive orders issued by President Quirino although they were
invoking only an indirect and general interest shared in common with the public. The Court
dismissed the objective that they were not proper parties and ruled that the transcendental
importance to the public of these cases demands that they be settled promptly and definitely,
brushing aside, if we must, technicalities of procedure. We have since then applied this
exception in many other cases.

Likewise, SC finds the instant petition to be of transcendental importance to the public. The
issues it raised are of paramount public interest. The ramifications of such issues immeasurably
affect the social, economic, and moral well-being of the people even in the remotest barangays
of the country and the counter-productive and retrogressive effects of the envisioned on-line
lottery system are as staggering as the billions in pesos it is expected to raise. The legal
standing then of the petitioners deserves recognition and, in the exercise of its sound
discretion, this Court hereby brushes aside the procedural barrier which the respondents tried
to take advantage of.