Polirev - July 18, 2019

EN BANC
JULY 3, 2018
G.R. No. 199802
CONGRESSMAN HERMILANDO I. MANDANAS; MAYOR EFREN B. DIONA; MAYOR ANTONINO A. AURELIO;

KAGA WAD MARIOILAGAN;BARANGAY CHAIR PERLITO MANALO; BARANGA Y CHAIR MEDEL
MEDRANO;BARANGAY KAGA WAD CRIS RAMOS; BARANGA Y KAGA WAD ELISA D. BALBAGO, and ATTY.
JOSE MALVAR VILLEGAS, Petitioners
vs.
EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; SECRETARY CESAR PURISIMA, Department of Finance;
SECRETARY FLORENCIO H. ABAD, Department of Budget and Management; COMMISSIONER KIM JACINTO-
HENARES, Bureau of Internal Revenue; and NATIONAL TREASURER ROBERTO TAN, Bureau of the
Treasury, Respondents
G.R. No. 208488
HONORABLE ENRIQUE T. GARCIA, JR., in his personal and official capacity as Representative of the
2ndDistrict of the Province of Bataan, Petitioner
vs.
HONORABLE [PAQUITO) N. OCHOA, JR., Executive Secretary; HONORABLE CESAR V. PURISIMA,
Secretary, Department of Finance; HONORABLE FLORENCIO H. ABAD, Secretary, Department of Budget and
Management; HONORABLE KIM S. JACINTO-HENARES, Commissioner, Bureau of Internal Revenue; and
HONORABLE ROZZANO RUFINO B. BIAZON, Commissioner, Bureau of Customs, Respondents
DECISION
BERSAMIN, J.:
The petitioners hereby challenge the manner in which the just share in the national taxes of the local government
units (LGUs) has been computed.
Antecedents
One of the key features of the 1987 Constitution is its push towards decentralization of government and local
autonomy. Local autonomy has two facets, the administrative and the fiscal. Fiscal autonomy means that local
governments have the power to create their own sources of revenue in addition to their equitable share in the national
taxes released by the National Government, as well as the power to allocate their resources in accordance with their
own priorities. Such autonomy is as indispensable to the viability of the policy of decentralization as the other.
1
Implementing the constitutional mandate for decentralization and local autonomy, Congress enacted Republic Act
No. 7160, otherwise known as the Local Government Code (LGC), in order to guarantee the fiscal autonomy of the
LGUs by specifically providing that:
SECTION 284. Allotment of Internal Revenue Taxes. - Local government units shall have a share in the national
internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows:
(a) On the first year of the effectivity of this Code, thirty percent (30%); (b) On the second year, thirty-five percent
(35%); and
(c) On the third year and thereafter, forty percent (40%).
Provided, That in the event that the National Government incurs an unmanageable public sector deficit, the President
of the Philippines is hereby authorized, upon the recommendation of Secretary of Finance, Secretary of Interior and
Local Government, and Secretary of Budget and Management, and subject to consultation with the presiding officers
of both Houses of Congress and the presidents of the "liga", to make the necessary adjustments in the internal
revenue allotment of local government units but in no case shall the allotment be less than thirty percent (30%) of the
collection of national internal revenue taxes of the third fiscal year preceding the current fiscal year: Provided, further,
That in the first year of the effectivity of this Code, the local government units shall, in addition to the thirty percent
(30%) internal revenue allotment which shall include the cost of devolved functions for essential public services, be
entitled to receive the amount equivalent to the cost of devolved personal services.
The share of the LGUs, heretofore known as the Internal Revenue Allotment (IRA), has been regularly released to
the LGUs. According to the implementing rules and regulations of the LGC, the IRA is determined on the basis of the
actual collections of the National Internal Revenue Taxes (NIRTs) as certified by the Bureau of Internal Revenue
(BIR).2
G.R. No. 199802 (Mandanas, et al.) is a special civil action for certiorari, prohibition and mandamus assailing the
manner the General Appropriations Act (GAA) for FY 2012 computed the IRA for the LGUs.
Mandanas, et al. allege herein that certain collections of NIR Ts by the Bureau of Customs (BOC) - specifically:
excise taxes, value added taxes (VATs) and documentary stamp taxes (DSTs) - have not been included in the base
amounts for the computation of the IRA; that such taxes, albeit collected by the BOC, should form part of the base
from which the IRA should be computed because they constituted NIRTs; that, consequently, the release of the
additional amount of ₱60,750,000,000.00 to the LGUs as their IRA for FY 2012 should be ordered; and that for the
same reason the LGUs should also be released their unpaid IRA for FY 1992 to FY 2011, inclusive, totaling
₱438,103,906,675.73.
In G.R. No. 208488, Congressman Enrique Garcia, Jr., the lone petitioner, seeks the writ of mandamus to compel the
respondents thereat to compute the just share of the LGUs on the basis of all national taxes. His petition insists on a
literal reading of Section 6, Article X of the 1987 Constitution. He avers that the insertion by Congress of the
words internal revenue in the phrase national taxes found in Section 284 of the LGC caused the diminution of the
base for determining the just share of the LGUs, and should be declared unconstitutional; that, moreover, the
exclusion of certain taxes and accounts pursuant to or in accordance with special laws was similarly constitutionally
untenable; that the VA Ts and excise taxes collected by the BOC should be included in the computation of the IRA;
and that the respondents should compute the IRA on the basis of all national tax collections, and thereafter distribute
any shortfall to the LGUs.
It is noted that named as common respondents were the then incumbent Executive Secretary, Secretary of Finance,
the Secretary of the Department of Budget and Management (DBM), and the Commissioner of Internal Revenue. In
addition, Mandanas, et al. impleaded the National Treasurer, while Garcia added the Commissioner of Customs.
The cases were consolidated on October 22, 2013. In the meanwhile, Congressman Garcia, Jr. passed away. Jose
3
Enrique Garcia III, who was subsequently elected to the same congressional post, was substituted for Congressman
Garcia, Jr. as the petitioner in G.R. No. 208488 under the resolution promulgated on August 23, 2016. 4
In response to the petitions, the several respondents, represented by the Office of the Solicitor General (OSG), urged
the dismissal of the petitions upon procedural and substantive considerations.
Anent the procedural considerations, the OSG argues that the petitions are procedurally defective because,
firstly, mandamus does not lie in order to achieve the reliefs sought because Congress may not be compelled to
appropriate the sums allegedly illegally withheld for to do so will violate the doctrine of separation of powers; and,
secondly, mandamus does not also lie to compel the DBM to release the amounts to the LGUs because such
disbursements will be contrary to the purposes specified in the GAA; that Garcia has no clear legal right to sustain his
suit for mandamus; that the filing of Garcia's suit violates the doctrine of hierarchy of courts; and that Garcia's petition
seeks declaratory relief but the Court cannot grant such relief in the exercise of its original jurisdiction.
On the substantive considerations, the OSG avers that Article 284 of the LGC is consistent with the mandate of
Section 6, Article X of the 1987 Constitution to the effect that the LGUs shall have a just share in the national taxes;
that the determination of the just share is within the discretion of Congress; that the limitation under the LGC of the
basis for the just share in the NIRTs was within the powers granted to Congress by the 1987 Constitution; that the
LGUs have been receiving their just share in the national taxes based on the correct base amount; that Congress has
the authority to exclude certain taxes from the base amount in computing the IRA; that there is a distinction between
the VA Ts, excise taxes and DSTs collected by the BIR, on one hand, and the VA Ts, excise taxes and DSTs
collected by the BOC, on the other, thereby warranting their different treatment; and that Development Budget
Coordination Committee (DBCC) Resolution No. 2003-02 dated September 4, 2003 has limited the base amount for
the computation of the IRA to the "cash collections based on the BIR data as reconciled with the Bureau of Treasury;"
and that the collection of such national taxes by the BOC should be excluded.
Issues
The issues for resolution are limited to the following, namely:
I.
Whether or not Mandamus is the proper vehicle to assail the constitutionality of the relevant provisions of the GAA
and the LGC;
II.
Whether or not Section 284 of the LGC is unconstitutional for being repugnant to Section 6, Article X of the 1987
Constitution;
III.
Whether or not the existing shares given to the LGUs by virtue of the GAA is consistent with the constitutional
mandate to give LGUs a 'just share" to national taxes following Article X, Section 6 of the 1987 Constitution;
IV.
Whether or not the petitioners are entitled to the reliefs prayed for.
Simply stated, the petitioners raise the novel question of whether or not the exclusion of certain national taxes from
the base amount for the computation of the just share of the LGUs in the national taxes is constitutional.
Ruling of the Court
The petitions are partly meritorious.
I
Mandamus is an improper remedy
Mandanas, et al. seek the writs of certiorari, prohibition and mandamus, while Garcia prays for the writ
of mandamus. Both groups of petitioners impugn the validity of Section 284 of the LGC.
The remedy of mandamus is defined in Section 3, Rule 65 of the Rules of Court, which provides:
Section 3. Petition for mandamus. - 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 and enjoyment of a right or office to which such other is entitled, and there
is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a
verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered
commanding the respondent, immediately or at some other time to be specified by the court, to do the act required to
be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the
wrongful acts of the respondent.
The petition shall also contain a sworn certification of non-forum shopping as provided in the third paragraph of
section 3, Rule 46.
For the writ of mandamus to issue, the petitioner must show that the act sought to be performed or compelled is
ministerial on the part of the respondent. An act is ministerial when it does not require the exercise of judgment and
the act is performed pursuant to a legal mandate. The burden of proof is on the mandamus petitioner to show that he
is entitled to the performance of a legal right, and that the respondent has a corresponding duty to perform the act.
The writ of mandamus may not issue to compel an official to do anything that is not his duty to do, or that is his duty
not to do, or to obtain for the petitioner anything to which he is not entitled by law. 5
Considering that its determination of what constitutes the just share of the LGUs in the national taxes under the 1987
Constitution is an entirely discretionary power, Congress cannot be compelled by writ of mandamus to act either way.
The discretion of Congress thereon, being exclusive, is not subject to external direction; otherwise, the delicate
balance underlying our system of government may be unduly disturbed. This conclusion should at once then demand
the dismissal of the Garcia petition in G.R. No. 208488, but we do not dismiss it. Garcia has attributed the non-
release of some portions of their IRA balances to an alleged congressional indiscretion - the diminution of the base
amount for computing the LGU's just share. He has asserted that Congress altered the constitutional base not only by
limiting the base to the NIRTs instead of including therein all national taxes, but also by excluding some national
taxes and revenues that only benefitted a few LGUs to the detriment of the rest of the LGUs.
Garcia's petition, while dubbed as a petition for mandamus, is also a petition for certiorari because it alleges that
Congress thereby committed grave abuse of discretion amounting to lack or excess of jurisdiction. It is worth
reminding that the actual nature of every action is determined by the allegations in the body of the pleading or the
complaint itself, not by the nomenclature used to designate the same. Moreover, neither should the prayer for relief
6
be controlling; hence, the courts may still grant the proper relief as the facts alleged in the pleadings and the evidence
introduced may warrant even without a prayer for specific remedy. 7
In this regard, Garcia's allegation of the unconstitutionality of the insertion by Congress of the words internal
revenue in the phrase national taxes justifies treating his petition as one for certiorari. It becomes our duty, then, to
assume jurisdiction over his petition. In Araullo v. Aquino III, the Court has emphatically opined that the
8
Court's certiorari jurisdiction under the expanded judicial power as stated in the second paragraph of Section 1,
Article VIII of the Constitution can be asserted:
xxxx to set right and undo any act of grave abuse of discretion amounting to lack or excess of jurisdiction by any
branch or instrumentality of the Government, the Court is not at all precluded from making the inquiry provided the
challenge was properly brought by interested or affected parties. The Court has been thereby entrusted expressly or
by necessary implication with both the duty and the obligation of determining, in appropriate cases, the validity of any
assailed legislative or executive action. This entrustment is consistent with the republican system of checks and
balances. 9
Further, observing that one of the reliefs being sought by Garcia is identical to the main relief sought by Mandanas, et
al., the Court should rightly dwell on the substantive arguments posited by Garcia to the extent that they are relevant
to the ultimate resolution of these consolidated suits.
II.
Municipal corporations and their relationship with Congress
The correct resolution and fair disposition of the issues interposed for our consideration require a review of the basic
principles underlying our system of local governments, and of the extent of the autonomy granted to the LGUs by the
1987 Constitution.
Municipal corporations are now commonly known as local governments. They are the bodies politic established by
law partly as agencies of the State to assist in the civil governance of the country. Their chief purpose has been to
regulate and administer the local and internal affairs of the cities, municipalities or districts. They are legal institutions
formed by charters from the sovereign power, whereby the populations within communities living within prescribed
areas have formed themselves into bodies politic and corporate, and assumed their corporate names with the right of
continuous succession and for the purposes and with the authority of subordinate self-government and improvement
and the local administration of the affairs of the State. 10
Municipal corporations, being the mere creatures of the State, are subject to the will of Congress, their creator. Their
continued existence and the grant of their powers are dependent on the discretion of Congress. On this matter, Judge
John F. Dillon of the State of Iowa in the United States of America enunciated in Merriam v. Moody's Executors the 11
rule of statutory construction that came to be oft-mentioned as Dillon's Rule, to wit:
[A] municipal corporation possesses and can exercise the following powers and no others: First, those granted in
express words; second, those necessarily implied or necessarily incident to the powers expressly granted; third,
those absolutely essential to the declared objects and purposes of the corporation-not simply convenient but
indispensible; fourth, any fair doubt as to the existence of a power is resolved by the courts against the corporation-
against the existence of the powers. 12
The formulation of Dillon's Rule has since undergone slight modifications. Judge Dillon himself introduced some of
the modifications through his post-Merriam writings with the objective of alleviating the original formulation's
harshness. The word fairly was added to the second proviso; the word absolutely was deleted from the third proviso;
and the words reasonable and substantial were added to the fourth proviso, thusly:
x x x second, those necessarily or fairly implied in or incident to the powers expressly granted; third, those essential
to x x x. Any fair, reasonable, doubt.13
The modified Dillon's Rule has been followed in this jurisdiction, and has remained despite both the 1973 Constitution
and the 1987 Constitution mandating autonomy for local governments. This has been made evident in several rulings
of the Court, one of which was that handed down in Magtajas v. Pryce Properties Corporation, lnc.: 14
In light of all the above considerations, we see no way of arriving at the conclusion urged on us by the petitioners that
the ordinances in question are valid. On the contrary, we find that the ordinances violate P.D. 1869, which has the
character and force of a statute, as well as the public policy expressed in the decree allowing the playing of certain
games of chance despite the prohibition of gambling in general.
The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal
governments are only agents of the national government. Local councils exercise only delegated legislative
powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to
the principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local
government units can undo the acts of Congress, from which they have derived their power in the first place,
and negate by mere ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature. It
breathes into them the breath of life, without which they cannot exist. As it creates, so it may destroy. As it
may destroy, it may abridge and control. Unless there is some constitutional limitation on the right, the
legislature might, by a single act, and if we can suppose it capable of so great a folly and so great a wrong,
sweep from existence all of the municipal corporations in the State, and the corporation could not prevent it.
We know of no limitation on the right so far as to the corporation themselves are concerned. They are, so to
phrase it, the mere tenants at will of the legislature.
This basic relationship between the national legislature and the local government units has not been
enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. Without
meaning to detract from that policy, we here confirm that Congress retains control of the local government
units although in significantly reduced degree now than under our previous Constitutions. The power to
create still includes the power to destroy. The power to grant still includes the power to withhold or recall.
True, there are certain notable innovations in the Constitution, like the direct conferment on the local
government units of the power to tax, which cannot now be withdrawn by mere statute. By and large,
however, the national legislature is still the principal of the local government units, which cannot defy its will
or modify or violate it. [Bold underscoring supplied for emphasis]
Also, in the earlier ruling in Ganzon v. Court of Appeals, the Court has pointed out that the 1987 Constitution, in
15
mandating autonomy for the LGUs, did not intend to deprive Congress of its authority and prerogatives over the
LGUs.
Nonetheless, the LGC has tempered the application of Dillon's Rule in the Philippines by providing a norm of
interpretation in favor of the LGUs in its Section 5(a), to wit:
xxxx
(a) Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt,
any question thereon shall be resolved in favor of devolution of powers and of the local government unit. Any fair
and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government
unit concerned; [Bold underscoring supplied for emphasis]
xxxx
III.
The extent of local autonomy in the Philippines
Regardless, there remains no question that Congress possesses and wields plenary power to control and direct the
destiny of the LGUs, subject only to the Constitution itself, for Congress, just like any branch of the Government,
should bow down to the majesty of the Constitution, which is always supreme.
The 1987 Constitution limits Congress' control over the LGUs by ordaining in Section 25 of its Article II that: "The
State shall ensure the autonomy of local governments." The autonomy of the LGUs as thereby ensured does not
contemplate the fragmentation of the Philippines into a collection of mini-states, or the creation of imperium in
16
imperio. The grant of autonomy simply means that Congress will allow the LGUs to perform certain functions and
17
exercise certain powers in order not for them to be overly dependent on the National Government subject to the
limitations that the 1987 Constitution or Congress may impose. Local autonomy recognizes the wholeness of the
18
Philippine society in its ethnolinguistic, cultural, and even religious diversities.

19
The constitutional mandate to ensure local autonomy refers to decentralization. In its broad or general sense,
20
decentralization has two forms in the Philippine setting, namely: the decentralization of power and the
decentralization of administration. The decentralization of power involves the abdication of political power in favor of
the autonomous LGUs as to grant them the freedom to chart their own destinies and to shape their futures with
minimum intervention from the central government. This amounts to self-immolation because the autonomous LGUs
thereby become accountable not to the central authorities but to their constituencies. On the other hand, the
decentralization of administration occurs when the central government delegates administrative powers to the LGUs
as the means of broadening the base of governmental powers and of making the LGUs more responsive and
accountable in the process, and thereby ensure their fullest development as self-reliant communities and more
effective partners in the pursuit of the goals of national development and social progress. This form of
decentralization further relieves the central government of the burden of managing local affairs so that it can
concentrate on national concerns. 21
Two groups of LGUs enjoy decentralization in distinct ways. The decentralization of power has been given to the
regional units (namely, the Autonomous Region for Muslim Mindanao [ARMM] and the constitutionally-mandated
Cordillera Autonomous Region [CAR]). The other group of LGUs (i.e., provinces, cities, municipalities and barangays)
enjoy the decentralization of administration. The distinction can be reasonably understood. The provinces, cities,
22
municipalities and barangays are given decentralized administration to make governance at the local levels more
directly responsive and effective. In turn, the economic, political and social developments of the smaller political units
are expected to propel social and economic growth and development. In contrast, the regional autonomy of the
23
ARMM and the CAR aims to permit determinate groups with common traditions and shared social-cultural
characteristics to freely develop their ways of life and heritage, to exercise their rights, and to be in charge of their
own affairs through the establishment of a special governance regime for certain member communities who choose
their own authorities from within themselves, and exercise the jurisdictional authority legally accorded to them to
decide their internal community affairs. 24
It is to be underscored, however, that the decentralization of power in favor of the regional units is not unlimited but
involves only the powers enumerated by Section 20, Article X of the 1987 Constitution and by the acts of Congress.
For, with various powers being devolved to the regional units, the grant and exercise of such powers should always
be consistent with and limited by the 1987 Constitution and the national laws. In other words, the powers are
25
guardedly, not absolutely, abdicated by the National Government.
Illustrative of the limitation is what transpired in Serna v. Commission on Elections, where the Court struck down
26
Section 19, Article VI of Republic Act No. 9054 (An Act to Strengthen and Expand the Organic Act for the
Autonomous Region in Muslim Mindanao, Amending for the Purpose Republic Act No. 6734, entitled "An Act
Providing for the Autonomous Region in Muslim Mindanao," as Amended) insofar as the provision granted to the
ARMM the power to create provinces and cities, and consequently declared as void Muslim Mindanao Autonomy Act
No. 201 creating the Province of Shariff Kabunsuan for being contrary to Section 5, Article VI and Section 20, Article
X of the 1987 Constitution, as well as Section 3 of the Ordinance appended to the 1987 Constitution. The Court
clarified therein that only Congress could create provinces and cities. This was because the creation of provinces and
cities necessarily entailed the creation of legislative districts, a power that only Congress could exercise pursuant to
Section 5, Article VI of the 1987 Constitution and Section 3 of the Ordinance appended to the Constitution; as such,
the ARMM would be thereby usurping the power of Congress to create legislative districts and national offices. 27
The 1987 Constitution has surely encouraged decentralization by mandating that a system of decentralization be
instituted through the LGC in order to enable a more responsive and accountable local government structure. It has
28
also delegated the power to tax to the LGUs by authorizing them to create their own sources of income that would
make them self-reliant. It further ensures that each and every LGU will have a just share in national taxes as well in
29
the development of the national wealth. 30
The LGC has further delineated in its Section 3 the different operative principles of decentralization to be adhered to
consistently with the constitutional policy on local autonomy, viz.:
Sec. 3. Operative Principles of Decentralization-
The formulation and implementation of policies and measures on local autonomy shall be guided by the following
operative principles:
(a) There shall be an effective allocation among the different local government units of their
respective powers, functions, responsibilities, and resources;
(b) There shall be established in every local government unit an accountable, efficient, and
dynamic organizational structure and operating mechanism that will meet the priority needs and
service requirements of its communities;
(c) Subject to civil service law, rules and regulations, local officials and employees paid wholly or
mainly from local funds shall be appointed or removed, according to merit and fitness, by the
appropriate appointing authority;
(d) The vesting of duty, responsibility, and accountability in local government units shall be
accompanied with provision for reasonably adequate resources to discharge their powers and
effectively carry out their functions: hence, they shall have the power to create and broaden their
own sources of revenue and the right to a just share in national taxes and an equitable share in the
proceeds of the utilization and development of the national wealth within their respective areas;
(e) Provinces with respect to component cities and municipalities, and cities and municipalities with
respect to component barangays, shall ensure that the acts of their component units are within the
scope of their prescribed powers and functions;
(f) Local government units may group themselves, consolidate or coordinate their efforts, services,
and resources commonly beneficial to them;
(g) The capabilities of local government units, especially the municipalities and barangays, shall be
enhanced by providing them with opportunities to participate actively in the implementation of
national programs and projects;
(h) There shall be a continuing mechanism to enhance local autonomy not only by legislative
enabling acts but also by administrative and organizational reforms;
(i) Local government units shall share with the national government the responsibility in the
management and maintenance of ecological balance within their territorial jurisdiction, subject to
the provisions of this Code and national policies;
(j) Effective mechanisms for ensuring the accountability of local government units to their
respective constituents shall be strengthened in order to upgrade continually the quality of local
leadership;
(k) The realization of local autonomy shall be facilitated through improved coordination of national
government policies and programs an extension of adequate technical and material assistance to
less developed and deserving local government units;
(l) The participation of the private sector in local governance, particularly in the delivery of basic
services, shall be encouraged to ensure the viability of local autonomy as an alternative strategy for
sustainable development; and
(m) The national government shall ensure that decentralization contributes to the continuing
improvement of the performance of local government units and the quality of community life.
Based on the foregoing delineation, decentralization can be considered as the decision by the central government to
empower its subordinates, whether geographically or functionally constituted, to exercise authority in certain areas. It
involves decision-making by subnational units, and is typically a delegated power, whereby a larger government
chooses to delegate authority to more local governments. It is also a process, being the set of policies, electoral or
31
constitutional reforms that transfer responsibilities, resources or authority from the higher to the lower levels of
government. It is often viewed as a shift of authority towards local governments and away from the central
32
government, with total government authority over society and economy imagined as fixed. 33
As a system of transferring authority and power from the National Government to the LGUs, decentralization in the
Philippines may be categorized into four, namely: (1) political decentralization or devolution; (2) administrative
decentralization or deconcentration; (3) fiscal decentralization; and (4) policy or decision-making decentralization.
Political decentralization or devolution occurs when there is a transfer of powers, responsibilities, and resources from
the central government to the LOU s for the performance of certain functions. It is a more liberal form of
decentralization because there is an actual transfer of powers and responsibilities. It aims to grant greater autonomy
to the LGUs in cognizance of their right to self-government, to make them self-reliant, and to improve their
administrative and technical capabilities. It is an act by which the National Government confers power and authority
34
upon the various LGUs to perform specific functions and responsibilities. It encompasses reforms to open sub-
35
national representation and policies to "devolve political authority or electoral capacities to sub-national actors.
" Section 16 to Section 19 of the LGC characterize political decentralization in the LGC as different LGUs
36
empowered to address the different needs of their constituents. In contrast, devolution in favor of the regional units is
more expansive because they are given the authority to regulate a wider array of subjects, including personal, family
and property relations.
Administrative decentralization or deconcentration involves the transfer of functions or the delegation of authority and
responsibility from the national office to the regional and local offices. Consistent with this concept, the LGC has
37
created the Local School Boards, the Local Health Boards and the Local Development Councils, and has
38 39 40
transferred some of the authority from the agencies of the National Government, like the Department of Education
and the Department of Health, to such bodies to better cope up with the needs of particular localities.
Fiscal decentralization means that the LGUs have the power to create their own sources of revenue in addition to
their just share in the national taxes released by the National Government. It includes the power to allocate their
resources in accordance with their own priorities. It thus extends to the preparation of their budgets, so that the local
officials have to work within the constraints of their budgets. The budgets are not formulated at the national level and
imposed on local governments, without regard as to whether or not they are relevant to local needs and resources.
Hence, the necessity of a balancing of viewpoints and the harmonization of proposals from both local and national
officials, who in any case are partners in the attainment of national goals, is recognized and addressed. 41
Fiscal decentralization emanates from a specific constitutional mandate that is expressed in several provisions of
Article X (Local Government) of the 1987 Constitution, specifically: Section 5; Section 6; and Section 7.
42 43 44
The constitutional authority extended to each and every LGU to create its own sources of income and revenue has
been formalized from Section 128 to Section 133 of the LGC. To implement the LGUs' entitlement to the just share in
the national taxes, Congress has enacted Section 284 to Section 288 of the LGC. Congress has further enacted
Section 289 to Section 294 of the LGC to define the share of the LGUs in the national wealth. Indeed, the
requirement for the automatic release to the LGUs of their just share in the national taxes is but the consequence of
the constitutional mandate for fiscal decentralization. 45
For sure, fiscal decentralization does not signify the absolute freedom of the LGUs to create their own sources of
revenue and to spend their revenues unrestrictedly or upon their individual whims and caprices. Congress has
subjected the LGUs' power to tax to the guidelines set in Section 130 of the LGC and to the limitations stated in
Section 133 of the LGC. The concept of local fiscal autonomy does not exclude any manner of intervention by the
National Government in the form of supervision if only to ensure that the local programs, fiscal and otherwise, are
consistent with the national goals. 46
Lastly, policy- or decision-making decentralization exists if at least one sub-national tier of government has exclusive
authority to make decisions on at least one policy issue. 47
In fine, certain limitations are and can be imposed by Congress in all the forms of decentralization, for local
autonomy, whether as to power or as to administration, is not absolute. The LGUs remain to be the tenants of the will
of Congress subject to the guarantees that the Constitution itself imposes.
IV.
Section 284 of the LGC deviates from the plain language
of Section 6 of Article X of the 1987 Constitution
Section 6, Article X the 1987 Constitution textually commands the allocation to the LGUs of a just share in the
national taxes, viz.:
Section 6. Local government units shall have a just share, as determined by law, in the national taxes which shall be
automatically released to them.
Section 6, when parsed, embodies three mandates, namely: (1) the LGUs shall have a just share in the national
taxes; (2) the just share shall be determined by law; and (3) the just share shall be automatically released to the
LGUs. 48
Congress has sought to carry out the second mandate of Section 6 by enacting Section 284, Title III (Shares of Local
Government Units in the Proceeds of National Taxes), of the LGC, which is again quoted for ready reference:
Section 284. Allotment of Internal Revenue Taxes. - Local government units shall have a share in the national internal
revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows:
(a) On the first year of the effectivity of this Code, thirty percent (30%);
(b) On the second year, thirty-five percent (35%); and
Provided, That in the event that the national government incurs an unmanageable public sector deficit, the President
Local Government and Secretary of Budget and Management, and subject to consultation with the presiding officers
of both Houses of Congress and the presidents of the "liga", to make the necessary adjustments in the internal.
revenue allotment of local government units but in no case shall the allotment be less than thirty percent (30%) of the
collection of national internal revenue taxes of the third fiscal year preceding the current fiscal year: Provided, further,
That in the first year of the effectivity of this Code, the local government units shall, in addition to the thirty percent
(30%) internal revenue allotment which shall include the cost of devolved functions for essential public services, be
entitled to receive the amount equivalent to the cost of devolved personal services.
There is no issue as to what constitutes the LGUs' just share expressed in percentages of the national
taxes (i.e.,30%, 35% and 40% stipulated in subparagraphs (a), (b), and (c) of Section 284 ). Yet, Section
6, supra, mentions national taxes as the source of the just share of the LGUs while Section 284 ordains that
the share of the LG Us be taken from national internal revenue taxes instead.
Has not Congress thereby infringed the constitutional provision?
Garcia contends that Congress has exceeded its constitutional boundary by limiting to the NIRTs the base from which
to compute the just share of the LGUs.
We agree with Garcia's contention.
Although the power of Congress to make laws is plenary in nature, congressional lawmaking remains subject to the
limitations stated in the 1987 Constitution. The phrase national internal revenue taxes engrafted in Section 284 is
49
undoubtedly more restrictive than the term national taxes written in Section 6. As such, Congress has actually
departed from the letter of the 1987 Constitution stating that national taxes should be the base from which the just
share of the LGU comes. Such departure is impermissible. Verba legis non est recedendum (from the words of a
statute there should be no departure). Equally impermissible is that Congress has also thereby curtailed the
50
guarantee of fiscal autonomy in favor of the LGUs under the 1987 Constitution.
Taxes are the enforced proportional contributions exacted by the State from persons and properties pursuant to its
sovereignty in order to support the Gove1nment and to defray all the public needs. Every tax has three elements,
namely: (a) it is an enforced proportional contribution from persons and properties; (b) it is imposed by the State by
virtue of its sovereignty; and (c) it is levied for the support of the Government. Taxes are classified into national and
51
local. National taxes are those levied by the National Government, while local taxes are those levied by the LGUs. 52
What the phrase national internal revenue taxes as used in Section 284 included are all the taxes enumerated in
Section 21 of the National Internal Revenue Code (NIRC), as amended by R.A. No. 8424, viz.:
Section 21. Sources of Revenue. - The following taxes, fees and charges are deemed to be national internal revenue
taxes:
(a) Income tax;
(b) Estate and donor's taxes;
(c) Value-added tax;
(d) Other percentage taxes;
(e) Excise taxes;
(f) Documentary stan1p taxes; and
(g) Such other taxes as arc or hereafter may be imposed and collected by the Bureau of Internal
Revenue.
In view of the foregoing enumeration of what are the national internal revenue taxes, Section 284 has effectively
deprived the LGUs from deriving their just share from other national taxes, like the customs duties.
Strictly speaking, customs duties are also taxes because they are exactions whose proceeds become public funds.
According to Garcia v. Executive Secretary, customs duties is the nomenclature given to taxes imposed on the
53
importation and exportation of commodities and merchandise to or from a foreign country. Although customs duties
have either or both the generation of revenue and the regulation of economic or social activity as their moving
purposes, it is often difficult to say which of the two is the principal objective in a particular instance, for, verily,
customs duties, much like internal revenue taxes, are rarely designed to achieve only one policy objective. We 54
further note that Section 102(00) of R.A. No. 10863 (Customs Modernization and Tariff Act) expressly includes all
fees and charges imposed under the Act under the blanket term of taxes.
It is clear from the foregoing clarification that the exclusion of other national taxes like customs duties from the base
for determining the just share of the LG Us contravened the express constitutional edict in Section 6, Article X the
1987 Constitution.
Still, the OSG posits that Congress can manipulate, by law, the base of the allocation of the just share in the national
taxes of the LGUs.
The position of the OSG cannot be sustained. Although it has the primary discretion to determine and fix the just
share of the LGUs in the national taxes (e.g., Section 284 of the LGC), Congress cannot disobey the express
mandate of Section 6, Article X of the 1987 Constitution for the just share of the LGUs to be derived from the national
taxes. The phrase as determined by law in Section 6 follows and qualifies the phrase just share, and cannot be
construed as qualifying the succeeding phrase in the national taxes. The intent of the people in respect of Section 6 is
really that the base for reckoning the just share of the LGUs should includes all national taxes. To read Section 6
differently as requiring that the just share of LGUs in the national taxes shall be determined by law is tantamount to
the unauthorized revision of the 1987 Constitution.
V.
Congress can validly exclude taxes that will constitute the base amount for
the computation of the IRA only if a Constitutional provision allows such exclusion
Garcia submits that even assuming that the present version of Section 284 of the LGC is constitutionally valid, the
implementation thereof has been erroneous because Section 284 does not authorize any exclusion or deduction from
the collections of the NIRTs for purposes of the computation of the allocations to the LGUs. He further submits that
the exclusion of certain NIRTs diminishes the fiscal autonomy granted to the LGUs. He claims that the following
NIRTs have been illegally excluded from the base for determining the fair share of the LGUs in the IRA, to wit:
(1) NIRTs collected by the cities and provinces and divided exclusively among the LGUs of the Autonomous
Region for Muslim Mindanao (ARMM), the regional government and the central government, pursuant to
Section 15 in relation to Section 9, Article IX of R.A. No. 9054 (An Act to Strengthen and Expand the
55 56
Organic Act for the Autonomous Region in Muslim Mindanao, amending for the purpose Republic Act No.
6734, entitled An Act providing for an Organic Act for the Autonomous Region in Muslim Mindanao);
(2) The shares in the excise taxes on mineral products of the different LG Us, as provided in Section 287 of
the NIRC in relation to Section 290 of the LGC;
57 58
(3) The shares of the relevant LGUs in the franchise taxes paid by Manila Jockey Club, Inc. and Philippine
59
Racing Club, Inc.; 60
(4) The shares of various municipalities in VAT collections under R.A. No. 7643 (An Act to Empower the
Commissioner of Internal Revenue to Require the Payment of the Value Added Tax Every Month and to
Allow Local Government Units to Share in VAT Revenue, Amending for this Purpose Certain Sections of the
National Internal Revenue Code) as embodied in Section 283 of the NIRC; 61
(5) The shares of relevant LGUs in the proceeds of the sale and conversion of former military bases in
accordance with R.A. No. 7227 (Bases Conversion and Development Act of 1992); 62
(6) The shares of different LGUs in the excise taxes imposed on locally manufactured Virginia tobacco
products as provided in Section 3 of R.A. No. 7171 (An Act to Promote the Development of the Farmers in
the Virginia Tobacco Producing Provinces), and as now provided in Section 289 of the NIRC; 63
(7) The shares of different LGUs in the incremental revenues from Burley and native tobacco products under
Section 8 of R.A. No. 8240 (An Act Amending Sections 138, 140 and 142 of the National Internal Revenue
Code as Amended and for Other Purposes) and as now provided in Section 288 of the NIRC; and 64
(8) The share of the Commission of Audit (COA) in the NIRTs as provided in Section 24p) of P.D. No.
1445 (Government Auditing Code of the Philippines) in relation to Section 284 of the NIRC.
65 66
Garcia insists that the foregoing taxes and revenues should have been included by Congress and, by extension, the
BIR in the base for computing the IRA on the strength of the cited provisions; that the LGC did not authorize such
exclusion; and that the continued exclusion has undermined the fiscal autonomy guaranteed by the 1987
Constitution.
The insistence of Garcia is valid to an extent.
An examination of the above-enumerated laws confirms that the following have been excluded from the base for
reckoning the just share of the LGUs as required by Section 6, Article X of the 1987 Constitution, namely:
(a) The share of the affected LGUs in the proceeds of the sale and conversion of former military bases in accordance
with R.A. No. 7227;
(b) The share of the different LGUs in the excise taxes imposed on locally manufactured Virginia tobacco products as
provided for in Section 3, R.A. No. 7171, and as now provided in Section 289 of the NIRC;
(c) The share of the different LGU s in incremental revenues from Burley and native tobacco products under Section
8 of R.A. No. 8240, and as now provided for in Section 288 of the NIRC;
(d) The share of the COA in the NIRTs as provided in Section 24(3) of P.D. No. 1445 in relation to Section 284 of the
67
NIRC;
(e) The shares of the different LGUs in the excise taxes on mineral products, as provided in Section 287 of the NIRC
in relation to Section 290 of the LGC;
(f) The NIRTs collected by the cities and provinces and divided exclusively among the LGUs of the ARMM, the
regional government and the central government, pursuant to Section 15 in relation to Section 9, Article IX of R. A.
68 69
No. 9054; and
(g) The shares of the relevant LG Us in the franchise taxes paid by Manila Jockey Club, Inc., and the Philippine
Racing Club, Inc.
Anent the share of the affected LG Us in the proceeds of the sale and conversion of the former military bases
pursuant to R.A. No. 7227, the exclusion is warranted for the reason that such proceeds do not come from a tax, fee
or exaction imposed on the sale and conversion.
As to the share of the affected LGUs in the excise taxes imposed on locally manufactured Virginia tobacco products
under R.A. No. 7171 (now Section 289 of the NIRC); the share of the affected LGUs in incremental revenues from
Burley and native tobacco products under Section 8, R.A. No. 8240 (now Section 288 of the NIRC); the share of the
COA in the NIRTs pursuant to Section 24(3) of P.D. No. 1445 in relation to Section 284 of the NIRC; and the share of
the host LGUs in the franchise taxes paid by the Manila Jockey Club, Inc., and Philippine Racing Club, Inc., under
Section 6 of R.A. No. 6631 and Section 8 of R:A. No. 6632, respectively, the exclusion is also justified. Although such
shares involved national taxes as defined under the NIRC, Congress had the authority to exclude them by virtue of
their being taxes imposed for special purposes. A reading of Section 288 and Section 289 of the NIRC and Section
24(3) of P.D. No. 1445 in relation to Section 284 of the NIRC reveals that all such taxes are levied and collected for a
special purpose. The same is true for the franchise taxes paid under Section 6 of R.A. No. 6631 and Section 8 of
70
R.A. No. 6632, inasmuch as certain percentages of the franchise taxes go to different beneficiaries. The exclusion
conforms to Section 29(3), Article VI of the 1987 Constitution, which states:
Section 29. x x x
xxxx
(3) All money collected on any tax levied for a special purpose shall be treated as a special fund and paid out
for such purpose only. If the purpose for which a special fund was created has been fulfilled or abandoned, the
balance, if any, shall be transferred to the general funds of the Government. [Bold emphasis supplied]
The exclusion of the share of the different LGUs in the excise taxes imposed on mineral products pursuant to Section
287 of the NIRC in relation to Section 290 of the LGC is premised on a different constitutional provision. Section 7,
Article X of the 1987 Constitution allows affected LGUs to have an equitable share in the proceeds of the utilization of
the nation's national wealth "within their respective areas," to wit:
Section 7. Local governments shall be entitled to an equitable share in the proceeds of the utilization and
development of the national wealth within their respective areas, in the manner provided by law, including sharing the
same with the inhabitants by way of direct benefits.
This constitutional provision is implemented by Section 287 of the NIRC and Section 290 of the LGC thusly:
SEC. 287. Shares of Local Government Units in the Proceeds from the Development and Utilization of the National
Wealth. - Local Government units shall have an equitable share in the proceeds derived from the utilization and
development of the national wealth, within their respective areas, including sharing the same with the inhabitants by
way of direct benefits.
(A) Amount of Share of Local Government Units. - Local government units shall, in addition to the internal revenue
allotment, have a share of forty percent (40'Yo) of the gross collection derived by the national government from the
preceding fiscal year from excise taxes on mineral products, royalties, and such other taxes, fees or charges,
including related surcharges, interests or fines, and from its share in any co-production, joint venture or production
sharing agreement in the utilization and development of the national wealth within their territorial jurisdiction.
(B) Share of the Local Governments from Any Government Agency or Government-owned or - Controlled
Corporation. - Local Government Units shall have a share, based on the preceding fiscal year, from the proceeds
derived by any government agency or government-owned or controlled corporation engaged in the utilization and
development of the national wealth based on the following formula, whichever will produce a higher share for the
local government unit:
(1) One percent (l %) of the gross sales or receipts of the preceding calendar year, or
(2) Forty percent (40%) of the excise taxes on mineral products, royalties, and such other taxes, fees or charges,
including related surcharges, interests or fines the government agency or government-owned or -controlled
corporations would have paid if it were not otherwise exempt. [Bold emphasis supplied]
SEC. 290. Amount of Share of Local Government Units. - Local government units shall, in addition to the internal
revenue allotment, have a share of forty percent ( 40%) of the gross collection derived by the national government
from the preceding fiscal year from mining taxes, royalties, forestry and fishery charges, and such other taxes, fees,
or charges, including related surcharges, interests, or fines, and from its share in any co-production, joint venture or
production sharing agreement in the utilization and development of the national wealth within their territorial
jurisdiction. [Bold emphasis supplied]
Lastly, the NIRTs collected by the provinces and cities within the ARMM whose portions are distributed to the
ARMM's provincial, city and regional governments are also properly excluded for such taxes are intended to truly
enable a sustainable and feasible autonomous region as guaranteed by the 1987 Constitution. The mandate under
Section 15 to Section 21, Article X of the 1987 Constitution is to allow the separate development of peoples with
distinctive cultures and traditions in the autonomous areas. The grant of autonomy to the autonomous regions
71
includes the right of self-determination-which in turn ensures the right of the peoples residing therein to the necessary
level of autonomy that will guarantee the support of their own cultural identities, the establishment of priorities by their
respective communities' internal decision-making processes and the management of collective matters by
themselves. As such, the NIRTs collected by the provinces and cities within the ARMM will ensure local autonomy
72
and their very existence with a continuous supply of funding sourced from their very own areas. The ARMM will
become self-reliant and dynamic consistent with the dictates of the 1987 Constitution.
The shares of the municipalities in the VATs collected pursuant to R.A. No. 7643 should be included in determining
the base for computing the just share because such VATs are national taxes, and nothing can validly justify their
exclusion.
In recapitulation, the national taxes to be included in the base for computing the just share the LGUs shall henceforth
be, but shall not be limited to, the following:
1. The NIRTs enumerated in Section 21 of the NIRC, as amended, to be inclusive of the VA Ts, excise taxes, and
DSTs collected by the BIR and the BOC, and their deputized agents;
2. Tariff and customs duties collected by the BOC;
3. 50% of the VATs collected in the ARMM, and 30% of all other national taxes collected in the ARMM; the remaining
50% of the VA Ts and 70% of the collections of the other national taxes in the ARMM shall be the exclusive share of
the ARMM pursuant to Section 9 and Section 15 of R.A. No. 9054;
4. 60% of the national taxes collected from the exploitation and development of the national wealth; the remaining
40% will exclusively accrue to the host LGUs pursuant to Section 290 of the LGC;
5. 85% of the excise taxes collected from locally manufactured Virginia and other tobacco products; the remaining
15% shall accrue to the special purpose funds pursuant created in R.A. No. 7171 and R.A. No. 7227;
6. The entire 50% of the national taxes collected under Section 106, Section 108 and Section 116 of the NIRC in
excess of the increase in collections for the immediately preceding year; and
7. 5% of the franchise taxes in favor of the national government paid by franchise holders in accordance with Section
6 of R.A. No. 6631 and Section 8 of R.A. No. 6632.
VI.
Entitlement to the reliefs sought
The petitioners' prayer for the payment of the arrears of the LGUs' just share on the theory that the computation of
the base amount had been unconstitutional all along cannot be granted.
It is true that with our declaration today that the IRA is not in accordance with the constitutional determination of the
just share of the LGUs in the national taxes, logic demands that the LGUs should receive the difference between
the just share they should have received had the LGC properly reckoned such just share from all national taxes, on
the one hand, and the share - represented by the IRA- the LGUs have actually received since the effectivity of the
IRA under the LGC, on the other. This puts the National Government in arrears as to the just share of the LGUs. A
legislative or executive act declared void for being unconstitutional cannot give rise to any right or obligation. 73
Yet, the Court has conceded in Arau/lo v. Aquino III that:

74
x x x the generality of the rule makes us ponder whether rigidly applying the rule may at times be
impracticable or wasteful. Should we not recognize the need to except from the rigid application of the rule
the instances in which the void law or executive act produced an almost irreversible result?
The need is answered by the doctrine of operative fact. The doctrine, definitely not a novel one, has been
exhaustively explained in De Agbayani v. Philippine National Bank:
The decision now on appeal reflects the orthodox view that an unconstitutional act, for that matter an executive order
or a municipal ordinance likewise suffering from that infirmity, cannot be the source of any legal rights or duties. Nor
can it justify any official act taken under it. Its repugnancy to the fundamental law once judicially declared results in its
being to all intents and purposes a mere scrap of paper. As the new Civil Code puts it: 'When the courts declare a law
to be inconsistent with the Constitution, the former shall be void and the latter shall govern.' Administrative or
executive acts, orders and regulations shall be valid only when they are not contrary to the laws of the Constitution. It
is understandable why it should be so, the Constitution being supreme and paramount. Any legislative or executive
act contrary to its terms cannot survive.
Such a view has support in logic and possesses the merit of simplicity. It may not however be sufficiently
realistic. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or
executive act must have been in force and had to be complied with. This is so as until after the judiciary, in
an appropriate case, declares its invalidity, it is entitled to obedience and respect. Parties may have acted
under it and may have changed their positions. What could be more fitting than that in a subsequent
litigation regard be had to what has been done while such legislative or executive act was in operation and
presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being nullified, its
existence as a fact must be reckoned with. This is merely to reflect awareness that precisely because the
judiciary is the governmental organ which has the final say on whether or not a legislative or executive
measure is valid, a period of time may have elapsed before it can exercise the power of judicial review that
may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness and justice then, if
there be no recognition of what had transpired prior to such adjudication.
In the language of an American Supreme Court decision: ‘The actual existence of a statute, prior to such a
determination [of unconstitutionality], is an operative fact and may have consequences which cannot justly be
ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to
invalidity may have to be considered in various aspects, with respect to particular relations, individual and corporate,
and particular conduct, private and official.'
The doctrine of operative fact recognizes the existence of the law or executive act prior to the determination of its
unconstitutionality as an operative fact that produced consequences that cannot always be erased, ignored or
disregarded. In short, it nullifies the void law or executive act but sustains its effects. It provides an exception to the
general rule that a void or unconstitutional law produces no effect. But its use must be subjected to great scrutiny
75
and circumspection, and it cannot be invoked to validate an unconstitutional law or executive act, but is resorted to
only as a matter of equity and fair play. It applies only to cases where extraordinary circumstances exist, and only
76
when the extraordinary circumstances have met the stringent conditions that will permit its application.
Conformably with the foregoing pronouncements in Araullo v. Aquino III, the effect of our declaration through this
decision of the unconstitutionality of Section 284 of the LGC and its related laws as far as they limited the source of
the just share of the LGUs to the NIRTs is prospective. It cannot be otherwise.
VII.
Automatic release of the LGUs' just share in the National Taxes
Section 6, Article X of the 1987 Constitution commands that the just share of the LGUs in national taxes shall
be automatically released to them. The term automatic connotes something mechanical, spontaneous and
perfunctory; and, in the context of this case, the LGUs are not required to perform any act or thing in order to
receive their just share in the national taxes.77
Before anything, we must highlight that the 1987 Constitution includes several provisions that actually deal with and
authorize the automatic release of funds by the National Government.
To begin with, Section 3 of Article VIII favors the Judiciary with the automatic and regular release of its
appropriations:
Section 3. The Judiciary shall enjoy fiscal autonomy. Appropriations for the Judiciary may not be reduced by the
legislature below the amount appropriated for the previous year and, after approval, shall be automatically and
regularly released.
Then there is Section 5 of Article IX(A), which contains the common provision in favor of the Constitutional
Commissions:
Section 5. The Commission shall enjoy fiscal autonomy. Their approved annual appropriations shall be automatically
and regularly released.
Section 14 of Article XI extends to the Office of the Ombudsman a similar privilege:
Section 14. The Office of the Ombudsman shall enjoy fiscal autonomy. Its approved annual appropriations shall be
automatically and regularly released.
Section 17(4) of Article XIII replicates the privilege in favour of the Commission on Human Rights:
Section 17(4) The approved annual appropriations of the Commission shall be automatically and regularly released.
The foregoing constitutional provisions share two aspects. The first relates to the grant of fiscal autonomy, and the
second concerns the automatic release of funds. The common denominator of the provisions is that the automatic
78
release of the appropriated amounts is predicated on the approval of the annual appropriations of the offices or
agencies concerned.
Directly contrasting with the foregoing provisions is Section 6, Article X of the 1987 Constitution because the latter
provision forthrightly ordains that the "(l)ocal government units shall have a just share, as determined by law, in the
national taxes which shall be automatically released to them." Section 6 does not mention of appropriation as a
condition for the automatic release of the just share to the LGUs. This is because Congress not only already
determined the just share through the LGC's fixing the percentage of the collections of the NIRTs to constitute
such fair share subject to the power of the President to adjust the same in order to manage public sector deficits
subject to limitations on the adjustments, but also explicitly authorized such just share to be "automatically
released" to the LGUs in the proportions and regularity set under Section 285 of the LGC without need of annual
79
appropriation. To operationalize the automatic release without need of appropriation, Section 286 of the LGC clearly
provides that the automatic release of the just share directly to the provincial, city, municipal or barangay treasurer,
as the case may be, shall be "without need of any further action," viz.:
Section 286. Automatic Release of Shares. - (a) The share of each local government unit shall be released,
without need of any further action; directly to the provincial, city, municipal or barangay treasurer, as the
case may be, on a quarterly basis within five (5) days after the end of each quarter, and which shall not be
subject to any lien or holdback that may be imposed by the National Government for whatever purpose. x x x
(Bold emphasis supplied)
The 1987 Constitution is forthright and unequivocal in ordering that the just share of the LGUs in the national taxes
shall be automatically released to them. With Congress having established the just share through the LGC, it seems
to be beyond debate that the inclusion of the just share of the LGUs in the annual GAAs is unnecessary, if not
superfluous. Hence, the just share of the LGUs in the national taxes shall be released to them without need of yearly
appropriation.
1. DECLARES the phrase "internal revenue" appearing in Section 284 of Republic Act No. 7160 (Local Government
Code) UNCONSTITUTIONAL, and DELETES the phrase from Section 284.
Section 284, as hereby modified, shall henceforth read as follows:
Section 284. Allotment of Taxes. - Local government units shall have a share in the national taxes based on the
collection of the third fiscal year preceding the current fiscal year as follows:
Provided, That in the event that the national government incurs an unmanageable public sector deficit, the President
Local Government and Secretary of Budget and Management, and subject to consultation with the presiding officers
of both Houses of Congress and the presidents of the "liga", to make the necessary adjustments in the allotment of
local government units but in no case shall the allotment be less than thirty percent (30%) of the collection of national
taxes of the third fiscal year preceding the current fiscal year; Provided, further, That in the first year of the effectivity
of this Code, the local government units shall, in addition to the thirty percent (30%) allotment which shall include the
cost of devolved functions for essential public services, be entitled to receive the amount equivalent to the cost of
devolved personal services.
The phrase "internal revenue" is likewise hereby DELETED from the related sections of Republic Act No. 7160 (Local
Government Code), specifically Section 285, Section 287, and Section 290, which provisions shall henceforth read as
follows:
Section 285. Allocation to Local Government Units. - The share of local government units in the allotment shall be
collected in the following manner:
(a) Provinces - Twenty-three percent (23%);
(b) Cities - Twenty-three percent (23%);
(c) Municipalities - Thirty-four percent (34%); and
(d) Barangays - Twenty percent (20%)
Provided, however, That the share of each province, city, and municipality shall be determined on the basis of the
following formula:
(a) Population -- Fifty percent (50%);
(b) Land Area-· Twenty-five percent (25%); and
(c) Equal sharing--Twenty-five percent (25%)
Provided, further. That the share of each barangay with a population of not less than one hundred (100) inhabitants
shall not be less than Eighty thousand (₱80,000.00) per annum chargeable against the twenty percent (20%) share of
the barangay from the allotment, and the balance to be allocated on the basis of the following formula:
(a) On the first year of the effoctivity of this Code:
(1) Population - Forty percent (40%); and
(2) Equal sharing - Sixty percent (50%)
(b) On the second year:
(1) Population - Fifty percent (50%); and
(2) Equal sharing - Fifty percent (50%)
(c) On the third year and thereafter.
(1) Population - Sixty percent (60%); and
(2) Equal sharing - Forty percent (40%).
Provided, finally, That the financial requirements of barangays created by local government units after the effectivity
of this Code shall be the responsibility of the local government unit concerned.
xxxx
Sectfon 287. Local Development Projects. - Each local government unit shall appropriate in its annual budget no less
than twenty percent (20%) of its annual allotment for development projects. Copies of the development plans of local
government units shall be furnished the Department of Interior and Local Government.
xxxx
Section 290. Amount of Share of Local Government Units. - Local government units shall, in addition to the
allotment, have a share of forty percent (40%) of the gross collection derived by the national government from the
preceding fiscal year from mining taxes, royalties, forestry and fishery charges, and such other taxes, fees, or
charges, including related surcharges, interests, or fines, and from its share in any co-production, joint venture or
production sharing agreement in the utilization and development of the national wealth within their territorial
jurisdiction.
Article 378, Article 379, Article 380, Article 382, Article 409, Article 461, and related provisions of the Implementing
Rules and Regulations of R.A. No. 7160 are hereby MODIFIED to reflect the deletion of the phrase "internal revenue"
as directed herein.
Henceforth, any mention of "Internal Revenue Allotment" or "IRA" in Republic Act No. 7160 (Local Government
Code) and its Implementing Rules and Regulations shall be understood as pertaining to the allotment of the Local
Government Units derived from the national taxes;
2. ORDERS the SECRETARY OF THE DEPARTMENT OF FINANCE; the SECRETARY OF THE DEPARTMENT
OF BUDGET AND MANAGEMENT; the COMMISSIONER OF INTERNAL REVENUE; the COMMISSIONER OF
CUSTOMS; and the NATIONAL TREASURER to include ALL COLLECTIONS OF NATIONAL TAXES in the
computation of the base of the just share of the Local Government Units according to the ratio provided in the now-
modified Section 284 of Republic Act No. 7160 (Local Government Code) except those accruing to special purpose
funds and special allotments for the utilization and development of the national wealth.
For this purpose, the collections of national taxes for inclusion in the base of the just share the Local Government
Units shall include, but shall not be limited to, the following:
(a) The national internal revenue taxes enumerated in Section 21 of the National Internal Revenue Code, as
amended, collected by the Bureau of Internal Revenue and the Bureau of Customs;
(b) Tariff and customs duties collected by the Bureau of Customs;
(c) 50% of the value-added taxes collected in the Autonomous Region in Muslim Mindanao, and 30% of all
other national tax collected in the Autonomous Region in Muslim Mindanao.
The remaining 50% of the collections of value-added taxes and 70% of the collections of the other national
taxes in the Autonomous Region in Muslim Mindanao shall be the exclusive share of the Autonomous
Region in Muslim Mindanao pursuant to Section 9 and Section 15 of Republic Act No. 9054.
(d) 60% of the national taxes collected from the exploitation and development of the national wealth.
The remaining 401% of the national taxes collected from the exploitation and development of the national
wealth shall exclusively accrue to the host Local Government Units pursuant to Section 290 of Republic Act
No. 7160 (Local Government Code);
(e) 85% of the excise taxes collected from locally manufactured Virginia and other tobacco products.
The remaining 15% shall accrue to the special purpose funds created by Republic Act No. 7171 and
Republic Act No. 7227;
(f) The entire 50% of the national taxes collected under Sections 106, 108 and 116 of the NIRC as provided
under Section 283 of the NIRC; and
(g) 5% of the 25% franchise taxes given to the National Government under Section 6 of Republic Act No.
6631 and Section 8 of Republic Act No. 6632.
3. DECLARES that:
(a) The apportionment of the 25% of the franchise taxes collected from the Manila Jockey Club and
Philippine Racing Club, Inc. - that is, five percent (5%) to the National Government; five percent (5%) to the
host municipality or city; seven percent (7%) to the Philippine Charity Sweepstakes Office; six percent (6%)
to the Anti-Tuberculosis Society; and two percent (2%) to the White Cross pursuant to Section 6 of Republic
Act No. 6631 and Section 8 of Republic Act No. 6632 - is VALID;
(b) Section 8 and Section 12 of Republic Act No. 7227 are VALID; and, ACCORDINGLY, the proceeds from
the sale of the former military bases converted to alienable lands thereunder are EXCLUDED from the
computation of the national tax allocations of the Local Government Units; and
(c) Section 24(3) of Presidential Decree No. 1445, in relation to Section 284 of the National Internal
Revenue Code, apportioning one-half of one percent (1/2of1%) of national tax collections as the auditing fee
of the Commission on Audit is VALID;
4. DIRECTS the Bureau of Internal Revenue and the Bureau of Customs and their deputized collecting agents to
certify all national tax collections, pursuant to Article 3 78 of the Implementing Rules and Regulations of R.A. No.
7160;
5. DISMISSES the claims of the Local Government Units for the settlement by the National Government of arrears in
the just share on the ground that this decision shall have PROSPECTIVE APPLICATION; and
6. COMMANDS the AUTOMATIC RELEASE WITHOUT NEED OF FURTHER ACTION of the just shares of the
Local Government Units in the national taxes, through their respective provincial, city, municipal, or barangay
treasurers, as the case may be, on a quarterly basis but not beyond five (5) days from the end of each quarter, as
directed in Section 6, Article X of the 1987 Constitution and Section 286 of Republic Act No. 7160 (Local Government
Code), and operationalized by Article 383 of the Implementing Rules and Regulations of RA 7160.
Let a copy of this decision be furnished to the President of the Republic of the Philippines, the President of the
Senate, and the Speaker of the House of Representatives for their information and guidance.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Acting Chief Justice
I concur
TERESITA J. LEONARDO-DE CASTRO
PRESBITERO J. VELASCO, JR.
Associate Justice
Associate Justice
DIOSDADO M. PERALTA MARIANO C. DEL CASTILLO

Associate Justice Associate Justice
(I dissent. see separate opinion)

ESTELA M. PERLAS-BERNABE
MARVIC M.V.F. LEONEN *
Associate Justice
Associate Justice
(no part prior OSG action) (I dissent. see separate opinion)

FRANCIS H. JARDELEZA ALFREDO BENJAMIN S. CAGUIOA *

SAMUEL R. MARTIRES *
NOEL GIMENEZ TIJAM
(I dissent)
ALEXANDER G. GESMUNDO
ANDRES B. REYES, JR. *
Associate Justice
Associate Justice
CERTIFICATION
Pursuant to the Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
ANTONIO T. CARPIO
Acting Chief Justice
Footnotes
1
Pimentel, Jr. v. Aguirre, G.R. No. 132988, July 19, 2000, 336 SCRA 201, 218.
2
Article 378, Administrative Order No. 270, Series of 1992.
3
Rollo (G.R. No. 208488), p. 50.
4
Id. at 310.
5
In the Matter of: Save the Supreme Court Judicial Independence and Fiscal Autonomy Movement v.
Abolition of Judiciary Development Fund (JDF) and Reduction of Fiscal Autonomy, UDK-15143, January 21,
2015, 746 SCRA 352, 371, citing Uy Kiao Eng v. Lee, G.R. No. 176831, January 15, 2010, 610 SCRA
211,217.
6
Ruby Shelter Builders and Realty Development Corporation v. Formaran, III, G.R. No. 175914, February
10, 2009.
7
Evangelista v. Santiago, G.R. No. 157447, April 29, 2005, 457 SCRA 744, 762.
8
G.R. No. 209287, July 1, 2014, 728 SCRA 1.
9
Id. at 75.
10
Black's Law Dictionary, 6th ed., Nolan, J., & Nolan-Haley, J., West Group, St. Paul, Minnesota, 1990,
p.1017.
11
25 Iowa 163 (1868).
12
Id. at 170.
l J. Dillon, Municipal Corporations, § 89 (3rd Ed. 1881). See Dean, K.D., The Dillon Rule - a Limit on Local
13
Government Powers, Missouri Law Review, Vol. 41, Issue 4, Fall 1976, p. 547.
G.R. No. 111097, July 20, 1994, 234 SCRA 255, 272-273, citing The City of Clinton v. The Cedar Rapids
14
and Missouri River Railroad Company, 24 Iowa (1868): 455 at 475.
15
G.R. No. 93252, August 5, 1991, 200 SCRA 271, 281.
16
Id. at 281.
17
Land Transportation Office v. City of Butuan, G.R. No. 131512, January 20, 2000, 322 SCRA 805, 808.
18
See Ganzon v. Court of Appeals, note 15.
19
Disomangcop v. Datumanong, G.R. No. 149848, November 25, 2004, 444 SCRA 203, 227.
Basco v. Philippine Amusement and Gaming Corporation, G.R. No. 91649, May 14, 1991, 197 SCRA 52,
20
65.
21
Limbona v. Mange/in, G.R. No. 80391, February 28, 1989, 170 SCRA 786, 795.
22
In Cordillera Board Coalition v. Commission on Audit, G.R. No. 79956, January 29, 1990, 181 SCRA 495,
506, the Court observed that: "It must be clarified that the constitutional guarantee of local autonomy in the
Constitution [Art. X, sec. 2] refers to the administrative autonomy of local government units or, cast in more
technical language, the decentralization of government authority [Villegas v. Subido, G.R. No. L-31004,
January 8, 1971, 37 SCRA l]. Local autonomy is not unique to the 1987 Constitution, it being guaranteed
also under the 1973 Constitution [Art. II, sec. 10]. And while there was no express guarantee under the 1935
Constitution, the Congress enacted the Local Autonomy Act (R.A. No. 2264) and the Decentralization Act
(R.A. No. 5185), which ushered the irreversible march towards further enlargement of local autonomy in the
country [Villegas v. Subido, supra.]
On the other hand, the creation of autonomous regions in Muslim Mindanao and the Cordilleras,
which is peculiar to the 1987 Constitution, contemplates the grant of political autonomy and not just
administrative autonomy to these regions. Thus, the provision in the Constitution for an
autonomous regional government with a basic structure consisting of an executive department and
a legislative assembly and special courts with personal, family and property law jurisdiction in each
of the autonomous regions [Art. X, sec. 18]"
23
Pimentel v. Aguirre, supra note 1, at 217.
24
Disomangcop v. Datumanong, supra note 19, at 231.
25
Section 20, Article X of the 1987 Constitution states:
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 ofrevenues;
(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.
26
G.R. No. 177597, July 16, 2008, 558 SCRA 700, 743-744.
27
Id. at 730-732.
28
See Article X, Section 3.
29
Id., Section 5.
30
Id., Section 5 and Section 6.
31
32
Does Decentralization Improve Perceptions of Accountability? Attitudinal Evidence from
Colombia.Escobar-Lemmon, M. & Ross, A. Midwest Political Science Association, American Journal of
Political Science, Vol, 58, No. 1 (January 2014), p. 176 accessed at http://www.jstor.org/stable/I 0.1017
/s002238 I 612000667 last October 4, 2017.
33
Comparative Federalism and Decentralization: On Meaning and Measurement. Rodden, J. Comprative
Politics, Ph.D. Programs in Political Science, City University of New York. Comparative politics, Vol. 36, No.
4 (July 2004), p. 482. Accessed at http://www.jstor.org/stable/4150172 last October 6, 2017.
34
35
Section 17, LGC.
36
Does Decentralization Improve Perceptions of Accountability? Attitudinal Evidence from
Colombia.Escobar-Lemmon, M. & Ross, A. Midwest Political Science Association, American Journal of
Political Science, Vol, 58, No. 1 (January 2014), p. 176 accessed at http://www.jstor.org/stable/10.10 l
7/s00223816 l 2000667 last October 4, 2017.
37
38
Section 98, LGC.
39
Section 102, LGC.
40
Section 107, LGC.
41
Pimentel, Jr. v. Aguirre, supra note I, at 218.
42
Section 5. Each local government unit shall have the power to create its own sources of revenues and to
levy taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide,
consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to
the local governments.
Section 6. Local government units shall have a just share, as determined by law, in the national taxes
43
which shall be automatically released to them.

Section 7. Local governments shall be entitled to an equitable share in the proceeds of the utilization and
44
development of the national wealth within their respective areas, in the manner provided by law, including
sharing the same with the inhabitants by way of direct benefits.
45
Province of Batangas v. Romulo, G.R. No. 152774, May 27, 2004, 429 SCRA 736, 760.
46
Pimentel, Jr. v. Aguirre, supra note 1.
Decentralization and Intrastate Struggles: Chechnya, Punjab, and Quebec. Bakke, K. Cambridge
47
University Press, New York, 2015, p. 12.
48
Province of Batangas v. Romulo, supra note 45.
49
See Marcos v. Manglapus, G.R. No. 88211, September 15, 1989, 177 SCRA 668, 689.
50
Chavez v. Judicial and Bar Council, G.R. No. 202242. July 17, 2012, 676 SCRA 579, 598.
51
Republic v. COCOFED, G.R. No. 147062-64, December 14, 2001, 372 SCRA 462, 482.
52
A ban, Law of Basic Taxation in the Philippines, Revised Ed. 2001, p. 27.
53
G.R. No. 101273, July 3, 1992, 211SCRA219, 227
54
Id.
SECTION 15. Collection and Sharing of Internal Revenue Taxes. - The share of the central government or
55
national government of all current year collections of internal revenue taxes, within the area of autonomy
shall, for a period of five (5) years be allotted for the Regional Government in the Annual Appropriations Act.
The Bureau Of Internal Revenue (BIR) or the duly authorized treasurer of the city or municipality
concerned, as the case may be, shall continue to collect such taxes and remit the share to the
Regional Autonomous Government and the central government or national government through
duly accredited depository bank within thirty (30) days from the end of each quarter of the current
year;
Fifty percent (50%) of the share of the central government or national government of the yearly
incremental revenue from tax collections under Sections 106 (value-added tax on sales of goods or
properties), 108 (value-added tax on sale of services and use or lease of properties) and 116 (tax
on persons exempt from value-added tax) of the National Internal Revenue Code (NIRC) shall be
shared by the Regional Government and the local government units within the area of autonomy as
follows:
(a) twenty percent (20%) shall accrue to the city or municipality where such taxes are
collected; and
(b) eighty percent (80%) shall accrue to the Regional Government.
In all cases, the Regional Government shall remit to the local government units their respective
shares within sixty (60) days from the end of each quarter of the current taxable year. The
provinces, cities, municipalities, and barangay within the area of autonomy shall continue to receive
their respective shares in the Internal Revenue Allotment (IRA), as provided for in Section 284 of
Republic Act No. 7160, the Local Government Code of 1991. The five-year (5) period herein
abovementioned may be extended upon mutual agreement of the central government or national
government and the Regional Government.
56
Section 9. Sharing of Internal Revenue, Natural Resources Taxes, Fees and Charges. - The collections of
a province or city from national internal revenue taxes, fees and charges, and taxes imposed on natural
resources, shall be distributed as follows:
(a) Thirty-five percent (35%) to the province or city;
(b) Thirty-five percent (35%) to the regional government; and
(c) Thirty percent (30%) to the central government or national government.
The share of the province shall be apportioned as follows: forty-five percent (45%) to the province,
thirty-five percent (35%) to the municipality and twenty percent (20%) to the barangay.
The share of the city shall be distributed as follows: fifty percent (50%) to the city and fifty percent
(50%) to the barangay concerned.
The province or city concerned shall automatically retain its share and remit the shares of
the Regional Government and the central government or national government to their
respective treasurers who shall, after deducting the share of the Regional Government as
mentioned in paragraphs (b) and (c) of this Section, remit the balance to the national
government within the first five (5) days of every month after the collections were made.
The remittance of the shares of the provinces, cities, municipalities, and barangay in the internal
revenue taxes, fees, and charges and the taxes, fees, and charges on the use, development, and
operation of natural resources within the autonomous region shall be governed by law enacted by
the Regional Assembly. The remittances of the share of the central government or national
government of the internal revenue taxes, fees, and charges and on the taxes, fees, and charges
on the use, development, and operation of the natural resources within the autonomous region
shall be governed by the rules and regulations promulgated by the Department of Finance of the
central government or national government.
Officials who fail to remit the shares of the central government or national government, the
Regional Government and the local government units concerned in the taxes, fees, and charges
mentioned above may be suspended or removed from office by order of the Secretary of Finance in
cases involving the share of the central government or national government or by the Regional
Governor in cases involving the share of the Regional Government and by the proper local
government executive in cases involving the share of local government. [Bold emphasis supplied]
57
SEC. 287. Shares of Local Government Units in the Proceeds from the Development and Utilization of the
National Wealth. - Local Government units shall have an equitable share in the proceeds derived from the
utilization and development of the national wealth, within their respective areas, including sharing the same
with the inhabitants by way of direct benefits.
(A) Amount of Share of Local Government Units. - Local government units shall, in addition to
the internal revenue allotment, have a share of forty percent (40%) of the gross collection
derived by the national government from the preceding fiscal year from excise taxes on
mineral products, royalties, and such other taxes, fees or charges, including related.
surcharges, interests or fines, and from its share in any co-production, joint venture or
production sharing agreement in the utilization and development of the national wealth
within their territorial jurisdiction.
(B) Share of the Local Governments from Any Government Agency or Government-owned or -
Controlled Corporation. - Local Government Units shall have a share, based on the preceding fiscal
year, from the proceeds derived by any government agency or government-owned or controlled
corporation engaged in the utilization and development of the national wealth based on the
following formula, whichever will produce a higher share for the local government unit:
(1) One percent (1 %) of the gross sales or receipts of the preceding calendar year, or
(2) Forty percent (40%) of the excise taxes on mineral products, royalties, and such other
taxes, fees or charges, including related surcharges, interests or fines the government
agency or government-owned or -controlled corporations would have paid if it were not
otherwise exempt.
(C) Allocation of Shares. - The share in the preceding Section shall be distributed in the following
manner:
(1) Where the natural resources are located in the province:
(a) Province - twenty percent (20%)
(b) Component city/municipality - forty-five percent (45%); and
(c) Barangay - thirty-five percent (35%)
Provided, however, That where the natural resources are located in two (2) or more
provinces, or in two (2) or more component cities or municipalities or in two (2) or more
barangays, their respective shares shall be computed on the basis of: (1) Population -
seventy percent (70%); and (2) Land area - thirty percent (30%).
(2) Where the natural resources are located in a highly urbanized or independent
component city:
(a) City - sixty - five percent (65%); and
(b) Barangay - thirty - five percent (35%)
Provided, however, That where the natural resources are located in two (2) or more cities, the
allocation of shares shall be based on the formula on population and land area as specified in
subsection (C)(l) hereof. [Bold emphasis supplied]
58
SEC. 290. Amount of Share of Local Government Units. - Local government units shall, in addition to
the internal revenue allotment, have a share of forty percent ( 40%) of the gross collection derived by
the national government from the preceding fiscal year from mining taxes, royalties, forestry and
fishery charges, and such other taxes, fees, or charges, including related surcharges, interests, or fines,
and from its share in any co-production, joint venture or production sharing agreement in the utilization and
development of the national wealth within their territorial jurisdiction. (Bold emphasis supplied)
Section 6 of R.A. No. 6631 (An Act granting Manila Jockey Club, Inc. a Franchise to Construct, Operate
59
and Maintain a Race Track for Horse Racing in the City of Manila or in the Province of Bulacan) states:
Section 6. In consideration of the franchise and rights herein granted to the Manila Jockey Club,
Inc., the grantee shall pay into the national Treasury a franchise tax equal to twenty-five per centum
(25%) of its gross earnings from the horse races authorized to be held under this franchise which is
equivalent to the eight and one-half per centum (8 ½ %) of the total wager funds or gross receipts
on the sale of betting tickets during the racing day as mentioned in Section four hereof, allotted as
follows: a) National Government, five per centum (5%); b) the city or municipality where the race
track is located, five per centum (5%); c) Philippine Charity Sweepstakes Office, seven per centum
(7%); d) Philippine Anti-Tuberculosis Society, six per centum (6%); and e) White Cross, two per
centum (2%). The said tax shall be paid monthly and shall be in lieu of any and all taxes, except the
income tax of any kind, nature and description levied, established or collected by any authority
whether barrio, municipality, city, provincial or national, now or in the future, on its properties,
whether real or personal, and profits, from which taxes the grantee is hereby expressly excepted.
(Bold emphasis supplied)
60
Section 8 of Republic Act 6632 (An Act granting the Philippine Racing Club, Inc., a franchise to operate
and maintain a race track for Horse Racing in the Province of Rizal) provides: Section 8. In consideration of
the franchise and rights herein granted to the Philippine Racing Club, Inc., the grantee shall pay into the
National Treasury a franchise tax equal to twenty-five per centum (25%) of its gross earnings from the horse
races authorized to be held under this franchise which is equivalent to the eight and one fourth per centum
(8 1/4%) of the total wager funds or gross receipts on the sale of betting tickets during the racing day as
mentioned in Section six hereof, allotted as follows: a) National Government, five per centum (5%); the
Municipality of Makati, five per centum (5%); b) Philippine Charity Sweepstakes Office, seven per centum
(7%); c) Philippine Anti-Tuberculosis Society, six per centum (6%); and d) White Cross, two per centum
(2%). The said tax shall be paid monthly and shall be in lieu of any and all taxes, except the income tax, of
any kind, nature and description levied, established or collected by any authority whether barrio,
municipality, city, provincial or national, on its properties, whether real or personal, from which taxes the
grantee is hereby expressly exempted. (Bold emphasis supplied)
61
Disposition of National Internal Revenue. - National Internal revenue collected and not applied as herein
above provided or otherwise specially disposed of by law shall accrue to the National Treasury and shall be
available for the general purposes of the Government, with the exception of the amounts set apart by way of
allotment as provided for under Republic Act No. 7160, otherwise known as the Local Government Code of
1991.
In addition to the internal revenue allotment as provided for in the preceding paragraph, fifty
percent (50%) of the national taxes collected under Sections 106, 108 and 116 of this Code in
excess of the increase in collections for the immediately preceding year shall be distributed as
follows:
(a) Twenty percent (20%) shall accrue to the city or municipality where such taxes are
collected and shall be allocated in accordance with Section 150 of Republic Act No. 7160,
otherwise known as the Local Government Code of 1991; and
(b) Eighty percent (80%) shall accrue to the National Government. (Bold emphasis
supplied)
62
R.A. No. 7227 (Bases Conversion and Development Act of 1992) states:
Section 8. Funding Scheme. – x x x
The President is hereby authorized to sell the above lands, in whole or in part, which are hereby
declared alienable and disposable pursuant to the provisions of existing laws and regulations
governing sales of government properties: Provided, That no sale or disposition of such lands will
be undertaken until a development plan embodying projects for conversion shall be approved by
the President in accordance with paragraph (b ), Section 4, of this Act. However, six (6) months
after approval of this Act, the President shall authorize the Conversion Authority to dispose of
certain areas in Fort Bonifacio and Villamor as the latter so determines. The Conversion Authority
shall provide the President a report on any such disposition or plan for disposition within one (1)
month from such disposition or preparation of such plan. The proceeds from any sale, after
deducting all expenses related to the sale, of portions of Metro Manila military camps as authorized
under this Act, shall be used for the following purposes with their corresponding percent shares of
proceeds:
(1) Thirty-two and five-tenths percent (35.5%) - To finance the transfer of the AFP military
camps and the construction of new camps, the self-reliance and modernization program of
the AFP, the concessional and long-term housing loan assistance and livelihood
assistance to AFP officers and enlisted men and their families, and the rehabilitation and
expansion of the AFP's medical facilities;
(2) Fifty percent (50%) - To finance the conversion and the commercial uses of the Clark
and Subic military reservations and their extentions:
(3) Five Percent (5%) - To finance the concessional and long-term housing Joan
assistance for the homeless of Metro Manila, Olongapo City, Angeles City and other
affected municipalities contiguous to the base areas as mandated herein; and
(4) The balance shall accrue and be remitted to the National Treasury to be appropriated
thereafter by Congress for the sole purpose of financing programs and projects vital for
the economic upliftment of the Filipino people.
Provided, That, in the case of Fort Bonifacio, two and five tenths percent (2.5%) of the
proceeds thereof in equal shares shall each go to the Municipalities of Makati, Taguig and
Pateros: Provided, further, That in no case shall farmers affected be denied due
compensation.
With respect to the military reservations and their extensions, the President upon recommendation
of the Conversion Authority or the Subic Authority when it concerns the Subic Special Economic
Zone shall likewise be authorized to sell or dispose those portions of lands which the Conversion
Authority or the Subic Authority may find essential for the development of their projects. (Bold
emphasis supplied)
Section 12. Subic Special Economic Zone. - Subject to the concurrence by resolution of
the sangguniang panlungsod of the City of Olongapo and the sangguniang bayan of the
Municipalities of Subic, Morong and Hermosa, there is hereby created a Special Economic and
Free-port Zone consisting of the City of Olongapo and the Municipality of Subic, Province of
Zambales, the lands occupied by the Subic Naval Base and its contiguous extensions as
embraced, covered, and defined by the 1947 Military Bases Agreement between the Philippines
and the United States of America as amended, and within the territorial jurisdiction of the
Municipalities of Morong and Hennosa, Province of Bataan, hereinafter referred to as the Subic
Special Economic Zone whose metes and bounds shall be delineated in a proclamation to be
issued by the President of the Philippines. Within thirty (30) days after the approval of this Act, each
local government unit shall submit its resolution of concurrence to join the Subic Special Economic
Zone to the office of the President. Thereafter, the President of the Philippines shall issue a
proclamation defining the metes and bounds of the Zone as provided herein. The abovementioned
zone shall be subject to the following policies:
xxxx
(c) The provisions of existing laws, rules and regulations to the contrary notwithstanding, no taxes,
local and national, shall be imposed within the Subic Special Economic Zone. In lieu of paying
taxes, three percent (3%) of the gross income earned by all businesses and enterprises within the
Subic Special Economic: Zone shall be remitted to the National Government, one percent (1%)
each to the local government units affected by the declaration of the zone in proportion to their
population area, and other factors. In addition, there is hereby established a development fund of
one percent (1%) of the gross income earned by all businesses and enterprises within the Subic
Special Economic Zone to be utilized for the development of municipalities outside the City of
Olongapo and the Municipality of Subic, and other municipalities contiguous to the base areas.
In case of conflict between national and local laws with respect to tax exemption privileges in the
Subic Special Economic Zone, the same shall be resolved in favor of the latter; (Bold emphasis
supplied)
xxxx
63
The NIRC provides in Section 289 as follows:
Section 289. Special Financial Support to Beneficiary Provinces Producing Virginia

Tobacco. - The financial support given by the National Government for the beneficiary
provinces shall be constituted and collected from the proceeds of fifteen percent (15%) of
the excise taxes on locally manufactured Virginia-type of cigarettes.
The funds allotted shall be divided among the beneficiary provinces pro-rata according to
the volume of Virginia tobacco production.
Provinces producing Virginia tobacco shall be the beneficiary provinces under Republic Act No.
7171. Provided, however, that to qualify as beneficiary under R.A. No. 7171, a province must have
an average annual production of Virginia leaf tobacco in an amount not less than one million kilos:
Provided, further, that the Department of Budget and Management (DBM) shall each year
determine the beneficiary provinces and their computed share of the funds under R.A. No. 7171,
referring to the National Tobacco Administration (NT A) records of tobacco acceptances, at the
tobacco trading centers for the immediate past year.
The Secretary of Budget and Management is hereby directed to retain annually the said
funds equivalent to fifteen percent (15%) of excise taxes on locally manufactured Virginia-
type cigarettes to be remitted to the beneficiary provinces qualified under R.A. No. 7171.
The provisions of existing laws to the contrary notwithstanding, the fifteen percent (15%)
share from government revenues mentioned in R.A. No. 7171 and due to the Virginia
tobacco-producing provinces shall be directly remitted to the provinces concerned.
Provided, That this Section shall be implemented in accordance with the guidelines of
Memorandum Circular No. 61-A dated November 28, 1993, which amended Memorandum Circular
No. 61, entitled 'Prescribing Guidelines for Implementing Republic Act No. 7171', dated January 1,
1992.
Provided, further, That in addition to the local government units mentioned in the above circular, the
concerned officials in the province shall be consulted as regards the identification of projects to be
financed. [Bold emphasis supplied]
64
Section 288. Disposition of Incremental Revenues. -
xxxx
(B) Incremental Revenues from Republic Act No. 8240. - Fifteen percent (15%) of the
incremental revenue collected from the excise tax on tobacco products under R. A. No. 8240
shall be allocated and divided among the provinces producing burley and native tobacco in
accordance with the volume of tobacco leaf production. The fund shall be exclusively utilized
for programs to promote economically viable alternatives for tobacco farmers and workers such as:
(1) Programs that will provide inputs, training, and other support for tobacco farmers who
shift to production of agricultural products other than tobacco including, but not limited to,
high-value crops, spices, rice, com, sugarcane, coconut, livestock and fisheries;
(2) Programs that will provide financial support for tobacco farmers who are displaced or
who cease to produce tobacco;
(3) Cooperative programs to assist tobacco farmers in planting alternative crops or

implementing other livelihood projects;
(4) Livelihood programs and projects that will promote, enhance, and develop the tourism
potential of tobacco-growing provinces;
(5) Infrastructure projects such as farm to market roads, schools, hospitals, and rural
health facilities; and
(6) Agro-industrial projects that will enable tobacco farmers to be involved in the
management and subsequent ownership of projects, such as post-harvest and secondary
processing like cigarette manufacturing and by-product utilization.
The Department of Budget and Management, in consultation with the Department of Agriculture,
shall issue rules and regulations governing the allocation and disbursement of this fund, not later
than one hundred eighty (180) days from the effectivity of this Act. [Bold emphasis supplied]
65
Section 24. Appropriations and funding.
xxxx
3. A maximum of one-half of one per-centum (1/2 of 1 %) of the collections from national internal
revenue taxes not otherwise accruing to Special funds or Special Accounts in the General Fund of
the National Government, upon authority from the Minister (Secretary) of Finance, shall be
deducted from such collections and shall be remitted to the National Treasury to cover the cost of
auditing services rendered to local government units;
66
SEC. 284. Allotment for the Commission on Audit. - One-half of one percent (1/2 of 1 %) of the collections
from the national internal revenue taxes not otherwise accruing to special accounts in the general fund of the
national government shall accrue to the Commission on Audit as a fee for auditing services rendered to local
government units, excluding maintenance, equipment, and other operating expenses as provided for in
Section 21 of Presidential Decree No. 898.
The Secretary of Finance is hereby authorized to deduct from the monthly internal revenue tax
collections an amount equivalent to the percentage as herein fixed, and to remit the same directly
to the Commission on Audit under such rules and regulations as may be promulgated by the
Secretary of Finance and the Chairman of the Commission on Audit.
67
Section 24. Appropriations and funding.
xxxx
3. A maximum of one-half of one per-centum (1/2 of 1 %) of the collections from national internal
revenue taxes not otherwise accruing to Special Funds or Special Accounts in the General Fund of
the National Government, upon authority from the Minister (Secretary) of Finance, shall be
deducted from such collections and shall be remitted to the National Treasury to cover the cost of
auditing services rendered to local government units;
SECTION 15. Collection and Sharing of Internal Revenue Taxes. - The share of the central government or
68
national government of all current year collections of internal revenue taxes, within the area of autonomy
shall, for a period of five (5) years be allotted for the Regional Government in the Annual Appropriations Act.
The Bureau Of Internal Revenue (BIR) or the duly authorized treasurer of the city or municipality
concerned, as the case may be, shall continue to collect such taxes and remit the share to the
Regional Autonomous Government and the central government or national government through
duly accredited depository bank within thirty (30) days from the end of each quarter of the current
year;
Fifty percent (50%) of the share of the central government or national government of the
yearly incremental revenue from tax collections under Sections 106 (value-added tax on
sales of goods or properties), 108 (value-added tax on sale of services and use or lease of
properties) and 116 (tax on persons exempt from value-added tax) of the National Internal
Revenue Code (NIRC) shall be shared by the Regional Government and the local
government units within the area of autonomy as follows:
(a) twenty percent (20%) shall accrue to the City or municipality where such taxes are
collected; and
(b) eighty percent (80%) shall accrue to the Regional Government.

In all cases, the Regional Government shall remit to the local government units their respective
shares within sixty (60) days from the end of each quarter of the current taxable year. The
provinces, cities, municipalities, and barangay within the area of autonomy shall continue to receive
their respective shares in the Internal Revenue Allotment (IRA), as provided for in Section 284 of
Republic Act No. 7160, the Local Government Code of 1991. The five-year (5) period herein
abovementioned may be extended upon mutual agreement of the central government or national
government and the Regional Government.
69
Section 9. Sharing of Internal Revenue, Natural Resources Taxes, Fees and Charges. - The collections of
a province or city from national internal revenue taxes, fees and charges, and taxes imposed on natural
resources, shall be distributed as follows:
(a) Thirty-five percent (35%) to the province or city;
(b) Thirty-five percent (35%) to the regional government; and
(c) Thirty percent (30%) to the central government or national government.
The share of the province shall be apportioned as follows: forty-five percent (45%) to the province,
thirty-five percent (35%) to the municipality and twenty percent (20%) to the barangay.
The share of the city shall be distributed as follows: fifty percent (50%) to the city and fifty percent
(50%) to the barangay concerned.
The province or city concerned shall automatically retain its share and remit the shares of the
Regional Government and the central government or national government to their respective
treasurers who shall, after deducting the share of the Regional Government as mentioned in
paragraphs (b) and (c) of this Section, remit the balance to the national government within the first
five (5) days of every month after the collections were made.
The remittance of the shares of the provinces, cities, municipalities, and barangay in the internal
revenue taxes, fees, and charges and the taxes, fees, and charges on the use, development, and
operation of natural resources within the autonomous region shall be governed by law enacted by
the Regional Assembly.
The remittances of the share of the central government or national government of the internal
revenue taxes, fees, and charges and on the taxes, fees, and charges on the use, development,
and operation of the natural resources within the autonomous region shall be governed by the rules
and regulations promulgated by the Department of Finance of the central government or national
government.
Officials who fail to remit the shares of the central government or national government, the
Regional Government and the local government units concerned in the taxes, fees, and charges
mentioned above may be suspended or removed from office by order of the Secretary of Finance in
cases involving the share of the central government or national government or by the Regional
Governor in cases involving the share of the Regional Government and by the proper local
government executive in cases involving the share of local government. [Emphasis Supplied]
70
Section 288 of the NIRC (formerly Section 8 of R.A. No. 8240) imposed an excise tax on tobacco products,
a. percentage of which is to be allocated and divided among the provinces producing Burley and native
tobacco in accordance with the volume of tobacco production. Such share received would then be allocated
by the recipient LG Us for the benefit of the farmers and workers, through any of the programs set by the
law.
Section 289 of the NIRC gives the concerned LGUs a share in the excise taxes imposed on locally
manufactured Virginia tobacco products. The LGUs consist of the provinces and their subdivisions
producing Virginia tobacco. This share is considered by Congress as the National Government's
financial support to the beneficiary LG Us producing Virginia tobacco.
The share of the COA from the NIRT is an aliquot part of the NIRTs, and serves the special
purpose of defraying the cost of auditing services rendered to the LGUs.
71
72
Id. at 230.
Commissioner of Internal Revenue v. San Roque Power Corporation, G.R. Nos. 187485, 196113 and
73
197156, October 8, 2013, 707 SCRA 66, 77.
74
Supra note 8.
75
Id., citing Yap v. Thenamaris Ship's Management, G.R. No. 179532, May 30 201 l, 649 SCRA 369, 381.
ld., citing League of' Cities Philippi;;es v. COMJ.,'LEC G .R. No. 176951, August 24, 2010, 628 SCRA 819,
76
833.
77
See Province of Batangas v. Romu1o, supra note 45.
Commission on Human Rights Employees' Association (CHREA) v. Commission on Human Rights, G.R.
78
No. 155336, July 21, 2006, 496 SCRA 226, 315-316.
79
Section 285. Allocation to Local Government Units. - The share of local government units in the internal
revenue allotment shall be collected in the following manner:
(a) Provinces - Twenty-three percent (23%):
(c) Municipalities - Thirty-four percent (3•1%); and
Provided, however, That the share of each province, city, and municipality shall be detern1ined on
the basis of the following formula:
(a) Population - Fifty percent (50%);
(b) Land Area - Twenty-five percent (25%); and
(c) Equal sharing - Twenty-five percent (25%)
Provided, further, That the share of each barangay with a population of not less than one hundred (
100) inhabitants shall not be less than Eighty thousand (₱80,000.00) per annumchargeable against
the twenty percent (20%) share of the barangay from the internal revenue allotment, and the
balance to be allocated on the basis of the following formula:
(a) On the first year of the effcct1vity of this Code:
(1) Population - Forty percent (40%); and
(2) Equal sharing - Sixty percent (60%)

(l) Population - Fifty percent (50%); and
(2) Equal sharing - Fifty percent (50%)
(c) On the third year and thereafter:
(1) Population - Sixty percent (60%); and
(2) Equal sharing - Forty percent (40%)
Provided, finally, That the financial requirements of barangays created by local government units
after the effectivity of this Code shall be the responsibility of the local government unit concerned.
EN BANC
G.R. No. 180050 April 12, 2011
RODOLFO G. NAVARRO, VICTOR F. BERNAL, and RENE O. MEDINA, Petitioners,

vs.
EXECUTIVE SECRETARY EDUARDO ERMITA, representing the President of the Philippines; Senate of the
Philippines, represented by the SENATE PRESIDENT; House of Representatives, represented by the HOUSE
SPEAKER; GOVERNOR ROBERT ACE S. BARBERS, representing the mother province of Surigao del Norte;
GOVERNOR GERALDINE ECLEO VILLAROMAN, representing the new Province of Dinagat
Islands,Respondents,
CONGRESSMAN FRANCISCO T. MATUGAS, HON. SOL T. MATUGAS, HON. ARTURO CARLOS A. EGAY, JR.,
HON. SIMEON VICENTE G. CASTRENCE, HON. MAMERTO D. GALANIDA, HON. MARGARITO M. LONGOS,
and HON. CESAR M. BAGUNDOL, Intervenors.
RESOLUTION
NACHURA, J.:
For consideration of the Court is the Urgent Motion to Recall Entry of Judgment dated October 20, 2010 filed by
Movant-Intervenors1 dated and filed on October 29, 2010, praying that the Court (a) recall the entry of judgment, and
(b) resolve their motion for reconsideration of the July 20, 2010 Resolution.
To provide a clear perspective of the instant motion, we present hereunder a brief background of the relevant
antecedents—
On October 2, 2006, the President of the Republic approved into law Republic Act (R.A.) No. 9355 (An Act Creating
the Province of Dinagat Islands).2 On December 3, 2006, the Commission on Elections (COMELEC) conducted the
mandatory plebiscite for the ratification of the creation of the province under the Local Government Code (LGC). 3The
plebiscite yielded 69,943 affirmative votes and 63,502 negative votes. 4 With the approval of the people from both the
mother province of Surigao del
Norte and the Province of Dinagat Islands (Dinagat), the President appointed the interim set of provincial officials who
took their oath of office on January 26, 2007. Later, during the May 14, 2007 synchronized elections, the Dinagatnons
elected their new set of provincial officials who assumed office on July 1, 2007. 5
On November 10, 2006, petitioners Rodolfo G. Navarro, Victor F. Bernal and Rene O. Medina, former political
leaders of Surigao del Norte, filed before this Court a petition for certiorari and prohibition (G.R. No. 175158)
challenging the constitutionality of R.A. No. 9355.6 The Court dismissed the petition on technical grounds. Their
motion for reconsideration was also denied.7
Undaunted, petitioners, as taxpayers and residents of the Province of Surigao del Norte, filed another petition for
certiorari8 seeking to nullify R.A. No. 9355 for being unconstitutional. They alleged that the creation of Dinagat as a
new province, if uncorrected, would perpetuate an illegal act of Congress, and would unjustly deprive the people of
Surigao del Norte of a large chunk of the provincial territory, Internal Revenue Allocation (IRA), and rich resources
from the area. They pointed out that when the law was passed, Dinagat had a land area of 802.12 square kilometers
only and a population of only 106,951, failing to comply with Section 10, Article X of the Constitution and of Section
461 of the LGC, on both counts, viz.—
Constitution, Article X – Local Government
Section 10. No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary
substantially altered, except in accordance with the criteria established in the local government code and subject to
the approval by a majority of the votes cast in a plebiscite in the political units directly affected.
LGC, Title IV, Chapter I
Section 461. Requisites for Creation. – (a) A province may be created if it has an average annual income, as certified
by the Department of Finance, of not less than Twenty million pesos (₱20,000,000.00) based on 1991 constant prices
and either of the following requisites:
(i) a continuous territory of at least two thousand (2,000) square kilometers, as certified by the
Lands Management Bureau; or
(ii) a population of not less than two hundred fifty thousand (250,000) inhabitants as certified by the
National Statistics Office:
Provided, That, the creation thereof shall not reduce the land area, population, and income of the
original unit or units at the time of said creation to less than the minimum requirements prescribed
herein.
(b) The territory need not be contiguous if it comprises two (2) or more islands or is separated by a
chartered city or cities which do not contribute to the income of the province.
(c) The average annual income shall include the income accruing to the general fund, exclusive of
special funds, trust funds, transfers, and non-recurring income. (Emphasis supplied.)
On February 10, 2010, the Court rendered its Decision 9 granting the petition.10 The Decision declared R.A. No. 9355
unconstitutional for failure to comply with the requirements on population and land area in the creation of a province
under the LGC. Consequently, it declared the proclamation of Dinagat and the election of its officials as null and void.
The Decision likewise declared as null and void the provision on Article 9(2) of the Rules and Regulations
Implementing the LGC (LGC-IRR), stating that, "[t]he land area requirement shall not apply where the proposed
province is composed of one (1) or more islands" for being beyond the ambit of Article 461 of the LGC, inasmuch as
such exemption is not expressly provided in the law. 11
The Republic, represented by the Office of the Solicitor General, and Dinagat filed their respective motions for
reconsideration of the Decision. In its Resolution12 dated May 12, 2010,13 the Court denied the said motions.14
Unperturbed, the Republic and Dinagat both filed their respective motions for leave of court to admit their second
motions for reconsideration, accompanied by their second motions for reconsideration. These motions were
eventually "noted without action" by this Court in its June 29, 2010 Resolution. 15
Meanwhile, the movants-intervenors filed on June 18, 2010 a Motion for Leave to Intervene and to File and to Admit
Intervenors’ Motion for Reconsideration of the Resolution dated May 12, 2010. They alleged that the COMELEC
issued Resolution No. 8790, relevant to this case, which provides—
RESOLUTION NO. 8790
WHEREAS, Dinagat Islands, consisting of seven (7) municipalities, were previously components of the First
Legislative District of the Province of Surigao del Norte. In December 2006 pursuant to Republic Act No. 9355, the
Province of Dinagat Island[s] was created and its creation was ratified on 02 December 2006 in the Plebiscite for this
purpose;
WHEREAS, as a province, Dinagat Islands was, for purposes of the May 10, 2010 National and Local Elections,
allocated one (1) seat for Governor, one (1) seat for Vice Governor, one (1) for congressional seat, and ten (10)
Sangguniang Panlalawigan seats pursuant to Resolution No. 8670 dated 16 September 2009;
WHEREAS, the Supreme Court in G.R. No. 180050 entitled "Rodolfo Navarro, et al., vs. Executive Secretary
Eduardo Ermita, as representative of the President of the Philippines, et al." rendered a Decision, dated 10 February
2010, declaring Republic Act No. 9355 unconstitutional for failure to comply with the criteria for the creation of a
province prescribed in Sec. 461 of the Local Government Code in relation to Sec. 10, Art. X, of the 1987 Constitution;
WHEREAS, respondents intend to file Motion[s] for Reconsideration on the above decision of the Supreme Court;
WHEREAS, the electoral data relative to the: (1) position for Member, House of Representatives representing the
lone congressional district of Dinagat Islands, (2) names of the candidates for the aforementioned position, (3)
position for Governor, Dinagat Islands, (4) names of the candidates for the said position, (5) position of the Vice
Governor, (6) the names of the candidates for the said position, (7) positions for the ten (10) Sangguniang
Panlalawigan Members and, [8] all the names of the candidates for Sangguniang Panlalawigan Members, have
already been configured into the system and can no longer be revised within the remaining period before the
elections on May 10, 2010.
NOW, THEREFORE, with the current system configuration, and depending on whether the Decision of the Supreme
Court in Navarro vs. Ermita is reconsidered or not, the Commission RESOLVED, as it hereby RESOLVES, to declare
that:
a. If the Decision is reversed, there will be no problem since the current system configuration is in
line with the reconsidered Decision, meaning that the Province of Dinagat Islands and the Province
of Surigao del Norte remain as two (2) separate provinces;
b. If the Decision becomes final and executory before the election, the Province of Dinagat Islands
will revert to its previous status as part of the First Legislative District, Surigao del Norte.
But because of the current system configuration, the ballots for the Province of Dinagat Islands will,
for the positions of Member, House of Representatives, Governor, Vice Governor and Members,
Sangguniang Panlalawigan, bear only the names of the candidates for the said positions.
Conversely, the ballots for the First Legislative District of Surigao del Norte, will, for the position of
Governor, Vice Governor, Member, House of Representatives, First District of Surigao del Norte
and Members, Sangguniang Panlalawigan, show only candidates for the said position. Likewise,
the whole Province of Surigao del Norte, will, for the position of Governor and Vice Governor, bear
only the names of the candidates for the said position[s].
Consequently, the voters of the Province of Dinagat Islands will not be able to vote for the
candidates of Members, Sangguniang Panlalawigan, and Member, House [of] Representatives,
First Legislative District, Surigao del Norte, and candidates for Governor and Vice Governor for
Surigao del Norte. Meanwhile, voters of the First Legislative District of Surigao del Norte, will not be
able to vote for Members, Sangguniang Panlalawigan and Member, House of Representatives,
Dinagat Islands. Also, the voters of the whole Province of Surigao del Norte, will not be able to vote
for the Governor and Vice Governor, Dinagat Islands. Given this situation, the Commission will
postpone the elections for Governor, Vice Governor, Member, House of Representatives, First
Legislative District, Surigao del Norte, and Members, Sangguniang Panlalawigan, First Legislative
District, Surigao del Norte, because the election will result in [a] failure to elect, since, in actuality,
there are no candidates for Governor, Vice Governor, Members, Sangguniang Panlalawigan, First
Legislative District, and Member, House of Representatives, First Legislative District (with Dinagat
Islands) of Surigao del Norte.
c. If the Decision becomes final and executory after the election, the Province of Dinagat Islands
will revert to its previous status as part of the First Legislative District of Surigao del Norte. The
result of the election will have to be nullified for the same reasons given in Item "b" above. A
special election for Governor, Vice Governor, Member, House of Representatives, First Legislative
District of Surigao del Norte, and Members, Sangguniang Panlalawigan, First District, Surigao del
Norte (with Dinagat Islands) will have to be conducted.
xxxx
SO ORDERED.
They further alleged that, because they are the duly elected officials of Surigao del Norte whose positions will be
affected by the nullification of the election results in the event that the May 12, 2010 Resolution is not reversed, they
have a legal interest in the instant case and would be directly affected by the declaration of nullity of R.A. No. 9355.
Simply put, movants-intervenors’ election to their respective offices would necessarily be annulled since Dinagat
Islands will revert to its previous status as part of the First Legislative District of Surigao del Norte and a special
election will have to be conducted for governor, vice governor, and House of Representatives member and
Sangguniang Panlalawigan member for the First Legislative District of Surigao del Norte. Moreover, as residents of
Surigao del Norte and as public servants representing the interests of their constituents, they have a clear and strong
interest in the outcome of this case inasmuch as the reversion of Dinagat as part of the First Legislative District of
Surigao del Norte will affect the latter province such that: (1) the whole administrative set-up of the province will have
to be restructured; (2) the services of many employees will have to be terminated; (3) contracts will have to be
invalidated; and (4) projects and other developments will have to be discontinued. In addition, they claim that their
rights cannot be adequately pursued and protected in any other proceeding since their rights would be foreclosed if
the May 12, 2010 Resolution would attain finality.
In their motion for reconsideration of the May 12, 2010 Resolution, movants-intervenors raised three (3) main
arguments to challenge the above Resolution, namely: (1) that the passage of R.A. No. 9355 operates as an act of
Congress amending Section 461 of the LGC; (2) that the exemption from territorial contiguity, when the intended
province consists of two or more islands, includes the exemption from the application of the minimum land area
requirement; and (3) that the Operative Fact Doctrine is applicable in the instant case.
In the Resolution dated July 20, 2010,16 the Court denied the Motion for Leave to Intervene and to File and to Admit
Intervenors’ Motion for Reconsideration of the Resolution dated May 12, 2010 on the ground that the allowance or
disallowance of a motion to intervene is addressed to the sound discretion of the Court, and that the appropriate time
to file the said motion was before and not after the resolution of this case.
On September 7, 2010, movants-intervenors filed a Motion for Reconsideration of the July 20, 2010 Resolution, citing
several rulings17 of the Court, allowing intervention as an exception to Section 2, Rule 19 of the Rules of Court that it
should be filed at any time before the rendition of judgment. They alleged that, prior to the May 10, 2010 elections,
their legal interest in this case was not yet existent. They averred that prior to the May 10, 2010 elections, they were
unaware of the proceedings in this case. Even for the sake of argument that they had notice of the pendency of the
case, they pointed out that prior to the said elections, Sol T. Matugas was a simple resident of Surigao del Norte,
Arturo Carlos A. Egay, Jr. was a member of the Sangguniang Panlalawigan of the Second District of Surigao del
Norte, and Mamerto D. Galanida was the Municipal Mayor of Socorro, Surigao del Norte, and that, pursuant to
COMELEC Resolution No. 8790, it was only after they were elected as Governor of Surigao del Norte, Vice Governor
of Surigao del Norte and Sangguniang Panlalawigan Member of the First District of Surigao del Norte, respectively,
that they became possessed with legal interest in this controversy.
On October 5, 2010, the Court issued an order for Entry of Judgment, stating that the decision in this case had
become final and executory on May 18, 2010. Hence, the above motion.
At the outset, it must be clarified that this Resolution delves solely on the instant Urgent Motion to Recall Entry of
Judgment of movants-intervenors, not on the second motions for reconsideration of the original parties, and neither
on Dinagat’s Urgent Omnibus Motion, which our
esteemed colleague, Mr. Justice Arturo D. Brion considers as Dinagat’s third motion for reconsideration. Inasmuch as
the motions for leave to admit their respective motions for reconsideration of the May 12, 2010 Resolution and the
aforesaid motions for reconsideration were already noted without action by the Court, there is no reason to treat
Dinagat’s Urgent Omnibus Motion differently. In relation to this, the Urgent Motion to Recall Entry of Judgment of
movants-intervenors could not be considered as a second motion for reconsideration to warrant the application of
Section 3, Rule 15 of the Internal Rules of the Supreme Court.18 It should be noted that this motion prays for the recall
of the entry of judgment and for the resolution of their motion for reconsideration of the July 20, 2010 Resolution
which remained unresolved. The denial of their motion for leave to intervene and to admit motion for reconsideration
of the May 12, 2010 Resolution did not rule on the merits of the motion for reconsideration of the May 12, 2010
Resolution, but only on the timeliness of the intended intervention. Their motion for reconsideration of this denial
elaborated on movants-intervenors’ interest in this case which existed only after judgment had been rendered. As
such, their motion for intervention and their motion for reconsideration of the May 12, 2010 Resolution merely stand
as an initial reconsideration of the said resolution.
With due deference to Mr. Justice Brion, there appears nothing in the records to support the claim that this was a ploy
of respondents’ legal tactician to reopen the case despite an entry of judgment. To be sure, it is actually COMELEC
Resolution No. 8790 that set this controversy into motion anew. To reiterate, the pertinent portion of the Resolution
reads:
c. If the Decision becomes final and executory after the election, the Province of Dinagat Islands will revert to its
previous status as part of the First Legislative District of Surigao del Norte. The result of the election will have to be
nullified for the same reasons given in Item "b" above. A special election for Governor, Vice Governor, Member,
House of Representatives, First Legislative District of Surigao del Norte, and Members, Sangguniang Panlalawigan,
First District, Surigao del Norte (with Dinagat Islands) will have to be conducted. (Emphasis supplied.)
Indeed, COMELEC Resolution No. 8790 spawned the peculiar circumstance of proper party interest for movants-
intervenors only with the specter of the decision in the main case becoming final and executory. More importantly, if
the intervention be not entertained, the movants-intervenors would be left with no other remedy as regards to the
impending nullification of their election to their respective positions. Thus, to the Court’s mind, there is an imperative
to grant the Urgent Motion to Recall Entry of Judgment by movants-intervenors.
It should be remembered that this case was initiated upon the filing of the petition for certiorari way back on October
30, 2007. At that time, movants-intervenors had nothing at stake in the outcome of this case. While it may be argued
that their interest in this case should have commenced upon the issuance of COMELEC Resolution No. 8790, it is
obvious that their interest in this case then was more imaginary than real. This is because COMELEC Resolution No.
8790 provides that should the decision in this case attain finality prior to the May 10, 2010 elections, the election of
the local government officials stated therein would only have to be postponed. Given such a scenario, movants-
intervenors would not have suffered any injury or adverse effect with respect to the reversion of Dinagat as part of
Surigao del Norte since they would simply have remained candidates for the respective positions they have vied for
and to which they have been elected.
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." 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.19
It cannot be denied that movants-intervenors will suffer direct injury in the event their Urgent Motion to Recall Entry of
Judgment dated October 29, 2010 is denied and their Motion for Leave to Intervene and to File and to Admit
Intervenors’ Motion for Reconsideration of the Resolution dated May 12, 2010 is denied with finality. Indeed, they
have sufficiently shown that they have a personal and substantial interest in the case, such that if the May 12, 2010
Resolution be not reconsidered, their election to their respective positions during the May 10, 2010 polls and its
concomitant effects would all be nullified and be put to naught. Given their unique circumstances, movants-
intervenors should not be left without any remedy before this Court simply because their interest in this case became
manifest only after the case had already been decided. The consequences of such a decision would definitely work to
their disadvantage, nay, to their utmost prejudice, without even them being parties to the dispute. Such decision
would also violate their right to due process, a right that cries out for protection. Thus, it is imperative that the
movants-intervenors be heard on the merits of their cause. We are not only a court of law, but also of justice and
equity, such that our position and the dire repercussions of this controversy should be weighed on the scales of
justice, rather than dismissed on account of mootness.
The "moot and academic" principle is not a magical formula that can automatically dissuade the courts from resolving
a case. Courts will decide cases, otherwise moot and academic, if: (1) there is a grave violation of the Constitution;
(2) there is an exceptional character of the situation and the paramount public interest is involved; (3) the
constitutional issue raised requires formation of controlling principles to guide the bench, the bar, and the public; and
(4) the case is capable of repetition yet evading review.20 The second exception attends this case.
This Court had taken a liberal attitude in the case of David v. Macapagal-Arroyo,21 where technicalities of procedure
on locus standi were brushed aside, because the constitutional issues raised were of paramount public interest or of
transcendental importance deserving the attention of the Court. Along parallel lines, the motion for intervention should
be given due course since movants-intervenors have shown their substantial legal interest in the outcome of this
case, even much more than petitioners themselves, and because of the novelty, gravity, and weight of the issues
involved.
Undeniably, the motion for intervention and the motion for reconsideration of the May 12, 2010 Resolution of
movants-intervenors is akin to the right to appeal the judgment of a case, which, though merely a statutory right that
must comply with the requirements of the rules, is an essential part of our judicial system, such that courts should
proceed with caution not to deprive a party of the right to question the judgment and its effects, and ensure that every
party-litigant, including those who would be directly affected, would have the amplest opportunity for the proper and
just disposition of their cause, freed from the constraints of technicalities. 22
Verily, the Court had, on several occasions, sanctioned the recall entries of judgment in light of attendant
extraordinary circumstances.23 The power to suspend or even disregard rules of procedure can be so pervasive and
compelling as to alter even that which this Court itself had already declared final. 24 In this case, the compelling
concern is not only to afford the movants-intervenors the right to be heard since they would be adversely affected by
the judgment in this case despite not being original parties thereto, but also to arrive at the correct interpretation of
the provisions of the LGC with respect to the creation of local government units. In this manner, the thrust of the
Constitution with respect to local autonomy and of the LGC with respect to decentralization and the attainment of
national goals, as hereafter elucidated, will effectively be realized.
On the merits of the motion for intervention, after taking a long and intent look, the Court finds that the first and
second arguments raised by movants-intervenors deserve affirmative consideration.
It must be borne in mind that the central policy considerations in the creation of local government units are economic
viability, efficient administration, and capability to deliver basic services to their constituents. The criteria prescribed
by the LGC, i.e., income, population and land area, are all designed to accomplish these results. In this light,
Congress, in its collective wisdom, has debated on the relative weight of each of these three criteria, placing
emphasis on which of them should enjoy preferential consideration.
Without doubt, the primordial criterion in the creation of local government units, particularly of a province, is economic
viability. This is the clear intent of the framers of the LGC. In this connection, the following excerpts from
congressional debates are quoted hereunder—
HON. ALFELOR. Income is mandatory. We can even have this doubled because we thought…
CHAIRMAN CUENCO. In other words, the primordial consideration here is the economic viability of the new local
government unit, the new province?
xxxx
HON. LAGUDA. The reason why we are willing to increase the income, double than the House version, because we
also believe that economic viability is really a minimum. Land area and population are functions really of the viability
of the area, because you have an income level which would be the trigger point for economic development,
population will naturally increase because there will be an immigration. However, if you disallow the particular area
from being converted into a province because of the population problems in the beginning, it will never be able to
reach the point where it could become a province simply because it will never have the economic take off for it to
trigger off that economic development.
Now, we’re saying that maybe Fourteen Million Pesos is a floor area where it could pay for overhead and provide a
minimum of basic services to the population. Over and above that, the provincial officials should be able to trigger off
economic development which will attract immigration, which will attract new investments from the private sector. This
is now the concern of the local officials. But if we are going to tie the hands of the proponents, simply by telling them,
"Sorry, you are now at 150 thousand or 200 thousand," you will never be able to become a province because nobody
wants to go to your place. Why? Because you never have any reason for economic viability.
xxxx
CHAIRMAN PIMENTEL. Okay, what about land area?
HON. LUMAUIG. 1,500 square kilometers
HON. ANGARA. Walang problema ‘yon, in fact that’s not very critical, ‘yong land area because…
CHAIRMAN PIMENTEL. Okay, ya, our, the Senate version is 3.5, 3,500 square meters, ah, square kilometers.
HON. LAGUDA. Ne, Ne. A province is constituted for the purpose of administrative efficiency and delivery of basic
services.
CHAIRMAN PIMENTEL. Right.
HON. LAGUDA. Actually, when you come down to it, when government was instituted, there is only one central
government and then everybody falls under that. But it was later on subdivided into provinces for purposes of
administrative efficiency.
CHAIRMAN PIMENTEL. Okay.
HON. LAGUDA. Now, what we’re seeing now is that the administrative efficiency is no longer there precisely because
the land areas that we are giving to our governors is so wide that no one man can possibly administer all of the
complex machineries that are needed.
Secondly, when you say "delivery of basic services," as pointed out by Cong. Alfelor, there are sections of the
province which have never been visited by public officials, precisely because they don’t have the time nor the energy
anymore to do that because it’s so wide. Now, by compressing the land area and by reducing the population
requirement, we are, in effect, trying to follow the basic policy of why we are creating provinces, which is to deliver
basic services and to make it more efficient in administration.
CHAIRMAN PIMENTEL. Yeah, that’s correct, but on the assumption that the province is able to do it without being a
burden to the national government. That’s the assumption.
HON. LAGUDA. That’s why we’re going into the minimum income level. As we said, if we go on a minimum income
level, then we say, "this is the trigger point at which this administration can take place." 25
Also worthy of note are the requisites in the creation of a barangay, a municipality, a city, and a province as provided
both in the LGC and the LGC-IRR, viz.—
For a Barangay:
LGC: SEC. 386. Requisites for Creation. – (a) A barangay may be created out of a contiguous territory which has a
population of at least two thousand (2,000) inhabitants as certified by the National Statistics Office except in cities
and municipalities within Metro Manila and other metropolitan political subdivisions or in highly urbanized cities where
such territory shall have a certified population of at least five thousand (5,000) inhabitants: Provided, That the
creation thereof shall not reduce the population of the original barangay or barangays to less than the minimum
requirement prescribed herein.
To enhance the delivery of basic services in the indigenous cultural communities, barangays may
be created in such communities by an Act of Congress, notwithstanding the above requirement.
(b) The territorial jurisdiction of the new barangay shall be properly identified by metes and bounds
or by more or less permanent natural boundaries. The territory need not be contiguous if it
comprises two (2) or more islands.
(c) The governor or city mayor may prepare a consolidation plan for barangays, based on the
criteria prescribed in this Section, within his territorial jurisdiction. The plan shall be submitted to the
sangguniang panlalawigan or sangguniang panlungsod concerned for appropriate action. In the
case of municipalities within the Metropolitan Manila area and other metropolitan political
subdivisions, the barangay consolidation plan can be prepared and approved by the sangguniang
bayan concerned.
LGC-IRR: ARTICLE 14. Barangays. – (a) Creation of barangays by the sangguniang panlalawigan shall require prior
recommendation of the sangguniang bayan.
(b) New barangays in the municipalities within MMA shall be created only by Act of Congress,
subject to the limitations and requirements prescribed in this Article.
(c) Notwithstanding the population requirement, a barangay may be created in the indigenous
cultural communities by Act of Congress upon recommendation of the LGU or LGUs where the
cultural community is located.
(d) A barangay shall not be created unless the following requisites are present:
(1) Population – which shall not be less than two thousand (2,000) inhabitants, except in
municipalities and cities within MMA and other metropolitan political subdivisions as may
be created by law, or in highly-urbanized cities where such territory shall have a
population of at least five thousand (5,000) inhabitants, as certified by the NSO. The
creation of a barangay shall not reduce the population of the original barangay or
barangays to less than the prescribed minimum/
(2) Land Area – which must be contiguous, unless comprised by two (2) or more islands.
The territorial jurisdiction of a barangay sought to be created shall be properly identified by
metes and bounds or by more or less permanent natural boundaries.
Municipality:
LGC: SEC. 442. Requisites for Creation. – (a) A municipality may be created if it has an average annual income, as
certified by the provincial treasurer, or at least Two million five hundred thousand pesos (P2,500,000.00) for the last
two (2) consecutive years based on the 1991 constant prices; a population of at least twenty-five thousand (25,000)
inhabitants as certified by the National Statistics Office; and a contiguous territory of at least fifty (50) square
kilometers as certified by the Lands
Management Bureau: Provided, That the creation thereof shall not reduce the land area, population
or income of the original municipality or municipalities at the time of said creation to less than the
minimum requirements prescribed herein.
(b) The territorial jurisdiction of a newly-created municipality shall be properly identified by metes
and bounds. The requirement on land area shall not apply where the municipality proposed to be
created is composed of one (1) or more islands. The territory need not be contiguous if it comprises
two (2) or more islands.
(c) The average annual income shall include the income accruing to the general fund of the
municipality concerned, exclusive of special funds, transfers and non-recurring income.
(d) Municipalities existing as of the date of effectivity of this Code shall continue to exist and
operate as such. Existing municipal districts organized pursuant to presidential issuances or
executive orders and which have their respective set of elective municipal officials holding office at
the time of the effectivity of this Code shall henceforth be considered regular municipalities.
LGC-IRR: ARTICLE 13. Municipalities. – (a) Requisites for Creation – A municipality shall not be created unless the
following requisites are present:
(i) Income – An average annual income of not less than Two Million Five Hundred Thousand Pesos
(₱2,500,000.00), for the immediately preceding two (2) consecutive years based on 1991 constant
prices, as certified by the provincial treasurer. The average annual income shall include the income
accruing to the general fund, exclusive of special funds, special accounts, transfers, and
nonrecurring income;
(ii) Population – which shall not be less than twenty five thousand (25,000) inhabitants, as certified
by NSO; and
(iii) Land area – which must be contiguous with an area of at least fifty (50) square kilometers, as
certified by LMB. The territory need not be contiguous if it comprises two (2) or more islands. The
requirement on land area shall not apply where the proposed municipality is composed of one (1)
or more islands. The territorial jurisdiction of a municipality sought to be created shall be properly
identified by metes and bounds.
The creation of a new municipality shall not reduce the land area, population, and income of the
original LGU or LGUs at the time of said creation to less than the prescribed minimum
requirements. All expenses incidental to the creation shall be borne by the petitioners.
City:
LGC: SEC. 450. Requisites for Creation. – (a) A municipality or a cluster of barangays may be converted into a
component city if it has an average annual income, as certified by the Department of Finance, of at least Twenty
million pesos (₱20,000,000.00) for the last two (2) consecutive years based on 1991 constant prices, and if it has
either of the following requisities:
(i) a contiguous territory of at least one hundred (100) square kilometers, as certified by
the Lands Management Bureau; or,
(ii) a population of not less than one hundred fifty thousand (150,000) inhabitants, as
certified by the National Statistics Office: Provided, That, the creation thereof shall not
reduce the land area, population, and income of the original unit or units at the time of said
creation to less than the minimum requirements prescribed herein.
(b) The territorial jurisdiction of a newly-created city shall be properly identified by metes and
bounds. The requirement on land area shall not apply where the city proposed to be created is
composed of one (1) or more islands. The territory need not be contiguous if it comprises two (2) or
more islands.
special funds, transfers, and non-recurring income.
LGC-IRR: ARTICLE 11. Cities. – (a) Requisites for creation – A city shall not be created unless the following
requisites on income and either population or land area are present:
(1) Income – An average annual income of not less than Twenty Million Pesos (₱20,000,000.00),
for the immediately preceding two (2) consecutive years based on 1991 constant prices, as
certified by DOF. The average annual income shall include the income accruing to the general
fund, exclusive of special funds, special accounts, transfers, and nonrecurring income; and
(2) Population or land area – Population which shall not be less than one hundred fifty thousand
(150,000) inhabitants, as certified by the NSO; or land area which must be contiguous with an area
of at least one hundred (100) square kilometers, as certified by LMB. The territory need not be
contiguous if it comprises two (2) or more islands or is separated by a chartered city or cities which
do not contribute to the income of the province. The land area requirement shall not apply where
the proposed city is composed of one (1) or more islands. The territorial jurisdiction of a city sought
to be created shall be properly identified by metes and bounds.
The creation of a new city shall not reduce the land area, population, and income of the original LGU or LGUs at the
time of said creation to less than the prescribed minimum requirements. All expenses incidental to the creation shall
be borne by the petitioners.
Provinces:
LGC: SEC. 461. Requisites for Creation. – (a) A province may be created if it has an average annual income, as
certified by the Department of Finance, of not less than Twenty million pesos (₱20,000,000.00) based on 1991 prices
(i) a contiguous territory of at least two thousand (2,000) square kilometers, as certified by
the Lands Management Bureau; or,
(ii) a population of not less than two hundred fifty thousand (250,000) inhabitants as
certified by the National Statistics Office:
Provided, That the creation thereof shall not reduce the land area, population, and income of the
herein.
special funds, trust funds, transfers, and non-recurring income.
LGC-IRR: ARTICLE 9. Provinces. – (a) Requisites for creation – A province shall not be created unless the following
requisites on income and either population or land area are present:
(1) Income – An average annual income of not less than Twenty Million pesos (₱20,000,000.00) for
the immediately preceding two (2) consecutive years based on 1991 constant prices, as certified by
DOF. The average annual income shall include the income accruing to the general fund, exclusive
of special funds, special accounts, transfers, and non-recurring income; and
(2) Population or land area – Population which shall not be less than two hundred fifty thousand
(250,000) inhabitants, as certified by NSO; or land area which must be contiguous with an area of
at least two thousand (2,000) square kilometers, as certified by LMB. The territory need not be
contiguous if it comprises two (2) or more islands or is separated by a chartered city or cities which
do not contribute to the income of the province. The land area requirement shall not apply where
the proposed province is composed of one (1) or more islands. The territorial jurisdiction of a
province sought to be created shall be properly identified by metes and bounds.
The creation of a new province shall not reduce the land area, population, and income of the original LGU or LGUs at
the time of said creation to less than the prescribed minimum requirements. All expenses incidental to the creation
shall be borne by the petitioners. (Emphasis supplied.)
It bears scrupulous notice that from the above cited provisions, with respect to the creation of barangays, land area is
not a requisite indicator of viability. However, with respect to the creation of municipalities, component cities, and
provinces, the three (3) indicators of viability and projected capacity to provide services, i.e., income, population, and
land area, are provided for.
But it must be pointed out that when the local government unit to be created consists of one (1) or more islands, it is
exempt from the land area requirement as expressly provided in Section 442 and Section 450 of the LGC if the local
government unit to be created is a municipality or a component city, respectively. This exemption is absent in the
enumeration of the requisites for the creation of a province under Section 461 of the LGC, although it is expressly
stated under Article 9(2) of the LGC-IRR.
There appears neither rhyme nor reason why this exemption should apply to cities and municipalities, but not to
provinces. In fact, considering the physical configuration of the Philippine archipelago, there is a greater likelihood
that islands or group of islands would form part of the land area of a newly-created province than in most cities or
municipalities. It is, therefore, logical to infer that the genuine legislative policy decision was expressed in Section 442
(for municipalities) and Section 450 (for component cities) of the LGC, but was inadvertently omitted in Section 461
(for provinces). Thus, when the exemption was expressly provided in Article 9(2) of the LGC-IRR, the inclusion was
intended to correct the congressional oversight in Section 461 of the LGC – and to reflect the true legislative intent. It
would, then, be in order for the Court to uphold the validity of Article 9(2) of the LGC-IRR.
This interpretation finds merit when we consider the basic policy considerations underpinning the principle of local
autonomy.
Section 2 of the LGC, of which paragraph (a) is pertinent to this case, provides—
Sec. 2. Declaration of Policy. – (a) It is hereby declared the policy of the State that the territorial and political
subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest
development as self-reliant communities and make them more effective partners in the attainment of national goals.
Toward this end, the State shall provide for a more responsive and accountable local government structure instituted
through a system of decentralization whereby local government units shall be given more powers, authority,
responsibilities, and resources. The process of decentralization shall proceed from the national government to the
local government units.
This declaration of policy is echoed in Article 3(a) of the LGC-IRR26 and in the Whereas clauses of Administrative
Order No. 270,27 which read—
WHEREAS, Section 25, Article II of the Constitution mandates that the State shall ensure the autonomy of local
governments;
WHEREAS, pursuant to this declared policy, Republic Act No. 7160, otherwise known as the Local Government
Code of 1991, affirms, among others, that the territorial and political subdivisions of the State shall enjoy genuine and
meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make
them more effective partners in the attainment of national goals;
WHEREAS, Section 533 of the Local Government Code of 1991 requires the President to convene an Oversight
Committee for the purpose of formulating and issuing the appropriate rules and regulations necessary for the efficient
and effective implementation of all the provisions of the said Code; and
WHEREAS, the Oversight Committee, after due deliberations and consultations with all the concerned sectors of
society and consideration of the operative principles of local autonomy as provided in the Local Government Code of
1991, has completed the formulation of the implementing rules and regulations; x x x
Consistent with the declared policy to provide local government units genuine and meaningful local autonomy,
contiguity and minimum land area requirements for prospective local government units should be liberally construed
in order to achieve the desired results. The strict interpretation adopted by the February 10, 2010 Decision could
prove to be counter-productive, if not outright absurd, awkward, and impractical. Picture an intended province that
consists of several municipalities and component cities which, in themselves, also consist of islands. The component
cities and municipalities which consist of islands are exempt from the minimum land area requirement, pursuant to
Sections 450 and 442, respectively, of the LGC. Yet, the province would be made to comply with the minimum land
area criterion of 2,000 square kilometers, even if it consists of several islands. This would mean that Congress has
opted to assign a distinctive preference to create a province with contiguous land area over one composed of islands
— and negate the greater imperative of development of self-reliant communities, rural progress, and the delivery of
basic services to the constituency. This preferential option would prove more difficult and burdensome if the 2,000-
square-kilometer territory of a province is scattered because the islands are separated by bodies of water, as
compared to one with a contiguous land mass.
Moreover, such a very restrictive construction could trench on the equal protection clause, as it actually defeats the
purpose of local autonomy and decentralization as enshrined in the Constitution. Hence, the land area requirement
should be read together with territorial contiguity.
Another look at the transcript of the deliberations of Congress should prove enlightening:
CHAIRMAN ALFELOR. Can we give time to Congressman Chiongbian,28 with respect to his…
CHAIRMAN LINA. Okay.
HON. CHIONGBIAN. At the outset, Chairman Lina, we would like to apprise the distinguished Senator about the
action taken by the House, on House Bill No. 7166. This was passed about two years ago and has been pending in
the Senate for consideration. This is a bill that I am not the only one involved, including our distinguished Chairman
here. But then we did want to sponsor the bill, being the Chairman then of the Local Government.
So, I took the cudgels for the rest of the Congressmen, who were more or less interested in the creation of the new
provinces, because of the vastness of the areas that were involved.
At any rate, this bill was passed by the House unanimously without any objection. And as I have said a while ago,
that this has been pending in the Senate for the last two years. And Sen. Pimentel himself was just in South Cotabato
and he delivered a speech that he will support this bill, and he says, that he will incorporate this in the Local
Government Code, which I have in writing from him. I showed you the letter that he wrote, and naturally, we in the
House got hold of the Senate version. It becomes an impossibility for the whole Philippines to create a new province,
and that is quite the concern of the respective Congressmen.
Now, insofar as the constitutional provision is concerned, there is nothing to stop the mother province from voting
against the bill, if a province is going to be created.
So, we are talking about devolution of powers here. Why is the province not willing to create another province, when
it can be justified. Even Speaker Mitra says, what will happen to Palawan? We won’t have one million people there,
and if you look at Palawan, there will be about three or four provinces that will comprise that island. So, the
development will be hampered.
Now, I would like to read into the record the letter of Sen. Pimentel, dated November 2, 1989. This was practically
about a year after 7166 was approved by the House, House Bill 7166.
On November 2, 1989, the Senator wrote me:
"Dear Congressman Chiongbian:
We are in receipt of your letter of 17 October. Please be informed that your House No. 7166 was incorporated in the
proposed Local Government Code, Senate Bill No. 155, which is pending for second reading.
Thank you and warm regards.
Very truly yours,"

That is the very context of the letter of the Senator, and we are quite surprised that the Senate has adopted another
position.
So, we would like – because this is a unanimously approved bill in the House, that’s the only bill that is involving the
present Local Government Code that we are practically considering; and this will be a slap on the House, if we do not
approve it, as approved by the lower House. This can be [an] irritant in the approval of the Conference Committee
Report. And I just want to manifest that insofar as the creation of the province, not only in my province, but the other
provinces. That the mother province will participate in the plebiscite, they can defeat the province, let’s say, on the
basis of the result, the province cannot be created if they lose in the plebiscite, and I don’t see why, we should put
this stringent conditions to the private people of the devolution that they are seeking.
So, Mr. Senator, I think we should consider the situation seriously, because, this is an approved version of the House,
and I will not be the one to raise up and question the Conference Committee Report, but the rest of the House that
are interested in this bill. And they have been approaching the Speaker about this. So, the Speaker reminded me to
make sure that it takes the cudgel of the House approved version.
So, that’s all what I can say, Mr. Senator, and I don’t believe that it is not, because it’s the wish of the House, but
because the mother province will participate anyhow, you vote them down; and that is provided for in the Constitution.
As a matter of fact, I have seen the amendment with regards to the creation of the city to be urbanized, subject to the
plebiscite. And why should we not allow that to happen in the provinces! In other words, we don’t want the people
who wants to create a new province, as if they are left in the devolution of powers, when they feel that they are far
away from civilization.
Now, I am not talking about other provinces, because I am unaware, not aware of their situation. But the province of
South Cotabato has a very unique geographical territorial conglomerations. One side is in the other side of the Bay,
of Sarangani Bay. The capital town is in the North; while these other municipalities are in the East and in the West.
And if they have to travel from the last town in the eastern part of the province, it is about one hundred forty
kilometers to the capital town. And from the West side, it is the same distance. And from the North side, it is about
one hundred kilometers. So that is the problem there. And besides, they have enough resources and I feel that, not
because I am interested in the province, I am after their welfare in the future. Who am I to dictate on those people? I
have no interest but then I am looking at the future development of these areas.
As a matter of fact, if I am in politics, it’s incidental; I do not need to be there, but I can foresee what the creation of a
new province will bring to these people. It will bring them prosperity; it will bring them more income, and it will
encourage even foreign investors. Like the PAP now, they are concentrating in South Cotabato, especially in the City
of
General Santos and the neighboring municipalities, and they are quite interested and even the AID people are asking
me, "What is holding the creation of a new province when practically you need it?" It’s not 20 or 30 kilometers from
the capital town; it’s about 140 kilometers. And imagine those people have to travel that far and our road is not like
Metropolitan Manila. That is as far as from here to Tarlac. And there are municipalities there that are just one
municipality is bigger than the province of La Union. They have the income. Of course, they don’t have the population
because that’s a part of the land of promise and people from Luzon are migrating everyday because they feel that
there are more opportunities here.
So, by creating the new provinces, not only in my case, in the other cases, it will enhance the development of the
Philippines, not because I am interested in my province. Well, as far as I am concerned, you know, I am in the twilight
years of my life to serve and I would like to serve my people well. No personal or political interest here. I hope the
distinguished Chairman of the Committee will appreciate the House Bill 7166, which the House has already approved
because we don’t want them to throw the Conference Committee Report after we have worked that the house Bill has
been, you know, drawn over board and not even considered by the Senate. And on top of that, we are considering a
bill that has not yet been passed. So I hope the Senator will take that into account.
Thank you for giving me this time to explain.
CHAIRMAN LINA. Thank you very much, Congressman James. We will look into the legislative history of the Senate
version on this matter of creation of provinces. I am sure there was an amendment. As I said, I’ll look into it. Maybe
the House version was incorporated in toto, but maybe during the discussion, their amendments were introduced
and, therefore, Senator Pimentel could not hold on to the original version and as a result new criteria were
introduced.
But because of the manifestation that you just made, we will definitely, when we reach a book, Title IV, on the matter
of provinces, we will look at it sympathetically from your end so that the objective that you want [to] achieve can be
realized. So we will look at it with sympathy. We will review our position on the matter, how we arrived at the Senate
version and we will adopt an open mind definitely when we come into it.
CHAIRMAN ALFELOR. Kanino ‘yan?
CHAIRMAN LINA. Book III.
CHAIRMAN ALFELOR. Title?
CHAIRMAN LINA. Title IV.
CHAIRMAN ALFELOR. I have been pondering on the case of James, especially on economic stimulation of a certain
area. Like our case, because I put myself on our province, our province is quite very big. It’s composed of four (4)
congressional districts and I feel it should be five now. But during the Batasan time, four of us talked and conversed
proposing to divide the province into two.
There are areas then, when since time immemorial, very few governors ever tread on those areas. That is, maybe
you’re acquainted with the Bondoc Peninsula of Quezon, fronting that is Ragay Gulf. From Ragay there is a long
stretch of coastal area. From Albay going to Ragay, very few governors ever tread [there] before, even today. That
area now is infested with NPA. That is the area of Congressman Andaya.
Now, we thought that in order to stimulate growth, maybe provincial aid can be extended to these areas. With a big or
a large area of a province, a certain administrator or provincial governor definitely will have no sufficient time. For me,
if we really would like to stimulate growth, I believe that an area where there is physical or geographical
impossibilities, where administrators can penetrate, I think we have to create certain provisions in the law where
maybe we can treat it with special considerations.
Now, we went over the graduate scale of the Philipppine Local Government Data as far as provinces are concerned.
It is very surprising that there are provinces here which only composed of six municipalities, eight municipalities,
seven municipalities. Like in Cagayan, Tuguegarao, there are six municipalities. Ah, excuse me, Batanes.
CHAIRMAN LINA. Will you look at the case of --- how many municipalities are there in Batanes province?
CHAIRMAN ALFELOR. Batanes is only six.
CHAIRMAN LINA. Six town. Siquijor?
CHAIRMAN ALFELOR. Siquijor. It is region?
CHAIRMAN LINA. Seven.
CHAIRMAN ALFELOR.L Seven. Anim.
CHAIRMAN LINA. Six also.
CHAIRMAN ALFELOR. Six also.
CHAIRMAN LINA. It seems with a minimum number of towns?

CHAIRMAN ALFELOR. The population of Siquijor is only 70 thousand, not even one congressional district. But
tumaas in 1982. Camiguin, that is Region 9. Wala dito. Nagtataka nga ako ngayon.
CHAIRMAN LINA. Camiguin, Camiguin.
CHAIRMAN ALFELOR. That is region? Camiguin has five municipalities, with a population of 63 thousand. But we do
not hold it against the province because maybe that’s one stimulant where growth can grow, can start. The land area
for Camiguin is only 229 square kilometers. So if we hard fast on requirements of, we set a minimum for every
province, palagay ko we just leave it to legislation, eh. Anyway, the Constitution is very clear that in case we would
like to divide, we submit it to a plebiscite. Pabayaan natin ang tao. Kung maglalagay tayo ng set ng minimum, tila
yata mahihirapan tayo, eh. Because what is really the thrust of the Local Government Code? Growth. To devolve
powers in order for the community to have its own idea how they will stimulate growth in their respective areas.
So, in every geographical condition, mayroon sariling id[i]osyncracies eh, we cannot make a generalization.
CHAIRMAN LINA. Will the creation of a province, carved out of the existing province because of some geographical
id[i]osyncracies, as you called it, stimulate the economic growth in the area or will substantial aid coming from the
national government to a particular area, say, to a municipality, achieve the same purpose?
CHAIRMAN ALFELOR. Ano tayo dito sa budget. All right, here is a province. Usually, tinitingnan lang yun, provision
eh, hindi na yung composition eh. You are entitled to, say, 20% of the area.
There’s a province of Camarines Sur which have the same share with that of Camiguin and Siquijor, but Camiguin is
composed only of five municipalities; in Siquijor, it’s composed of six, but the share of Siquijor is the same share with
that of the province of Camarines Sur, having a bigger area, very much bigger.
That is the budget in process.
CHAIRMAN LINA. Well, as I said, we are going to consider this very seriously and even with sympathy because of
the explanation given and we will study this very carefully. 29
The matters raised during the said Bicameral Conference Committee meeting clearly show the manifest intention of
Congress to promote development in the previously underdeveloped and uninhabited land areas by allowing them to
directly share in the allocation of funds under the national budget. It should be remembered that, under Sections 284
and 285
of the LGC, the IRA is given back to local governments, and the sharing is based on land area, population, and local
revenue.30
Elementary is the principle that, if the literal application of the law results in absurdity, impossibility, or injustice, then
courts may resort to extrinsic aids of statutory construction, such as the legislative history of the law,31 or may
consider the implementing rules and regulations and pertinent executive issuances in the nature of executive and/or
legislative construction. Pursuant to this principle, Article 9(2) of the LGC-IRR should be deemed incorporated in the
basic law, the LGC.
It is well to remember that the LGC-IRR was formulated by the Oversight Committee consisting of members of both
the Executive and Legislative departments, pursuant to Section 533 32 of the LGC. As Section 533 provides, the
Oversight Committee shall formulate and issue the appropriate rules and regulations necessary for the efficient and
effective implementation of any and all provisions of this Code, thereby ensuring compliance with the principles of
local autonomy as defined under the Constitution. It was also mandated by the Constitution that a local government
code shall be enacted by Congress, to wit—
Section 3. The Congress shall enact a local government code which shall provide for a more responsive and
accountable local government structure instituted through a system of decentralization with effective mechanisms of
recall, initiative, and referendum, allocate among the different local government units their powers, responsibilities,
and resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and
functions and duties of local officials, and all other matters relating to the organization and operation of the local units.
(Emphasis supplied.)
These State policies are the very reason for the enactment of the LGC, with the view to attain decentralization and
countryside development. Congress saw that the old LGC, Batas Pambansa Bilang 337, had to be replaced with a
new law, now the LGC of 1991, which is more dynamic and cognizant of the needs of the Philippines as an
archipelagic country. This accounts for the exemption from the land area requirement of local government units
composed of one or more islands, as expressly stated under Sections 442 and 450 of the LGC, with respect to the
creation of municipalities and cities, but inadvertently omitted from Section 461 with respect to the creation of
provinces. Hence, the void or missing detail was filled in by the Oversight Committee in the LGC-IRR.
With three (3) members each from both the Senate and the House of Representatives, particularly the chairpersons
of their respective Committees on Local Government, it cannot be gainsaid that the inclusion by the Oversight
Committee of the exemption from the land area requirement with respect to the creation of provinces consisting of
one (1) or more islands was intended by Congress, but unfortunately not expressly stated in Section 461 of the LGC,
and this intent was echoed through an express provision in the LGC-IRR. To be sure, the Oversight Committee did
not just arbitrarily and whimsically insert such an exemption in Article 9(2) of the LGC-IRR. The Oversight Committee
evidently conducted due deliberation and consultations with all the concerned sectors of society and considered the
operative principles of local autonomy as provided in the LGC when the IRR was formulated.33 Undoubtedly, this
amounts not only to an executive construction, entitled to great weight and respect from this Court, 34 but to legislative
construction as well, especially with the inclusion of representatives from the four leagues of local government units
as members of the Oversight Committee.
With the formulation of the LGC-IRR, which amounted to both executive and legislative construction of the LGC, the
many details to implement the LGC had already been put in place, which Congress understood to be impractical and
not too urgent to immediately translate into direct amendments to the LGC. But Congress, recognizing the capacity
and viability of Dinagat to become a full-fledged province, enacted R.A. No. 9355, following the exemption from the
land area requirement, which, with respect to the creation of provinces, can only be found as an express provision in
the LGC-IRR. In effect, pursuant to its plenary legislative powers, Congress breathed flesh and blood into that
exemption in Article 9(2) of the LGC-IRR and transformed it into law when it enacted R.A. No. 9355 creating the
Island Province of Dinagat.
Further, the bill that eventually became R.A. No. 9355 was filed and favorably voted upon in both Chambers of
Congress. Such acts of both Chambers of Congress definitively show the clear legislative intent to incorporate into
the LGC that exemption from the land area requirement, with respect to the creation of a province when it consists of
one or more islands, as expressly provided only in the LGC-IRR. Thereby, and by necessity, the LGC was amended
by way of the enactment of R.A. No. 9355.
What is more, the land area, while considered as an indicator of viability of a local government unit, is not conclusive
in showing that Dinagat cannot become a province, taking into account its average annual income of ₱82,696,433.23
at the time of its creation, as certified by the Bureau of Local Government Finance, which is four times more than the
minimum requirement of ₱20,000,000.00 for the creation of a province. The delivery of basic services to its
constituents has been proven possible and sustainable. Rather than looking at the results of the plebiscite and the
May 10, 2010 elections as mere fait accompli circumstances which cannot operate in favor of Dinagat’s existence as
a province, they must be seen from the perspective that Dinagat is ready and capable of becoming a province. This
Court should not be instrumental in stunting such capacity. As we have held in League of Cities of the Philippines v.
Commission on Elections35 —
Ratio legis est anima. The spirit rather than the letter of the law. A statute must be read according to its spirit or intent,
for what is within the spirit is within the statute although it is not within its letter, and that which is within the letter but
not within the spirit is not within the statute. Put a bit differently, that which is within the intent of the lawmaker is as
much within the statute as if within the letter, and that which is within the letter of the statute is not within the statute
unless within the intent of the lawmakers. Withal, courts ought not to interpret and should not accept an interpretation
that would defeat the intent of the law and its legislators.
So as it is exhorted to pass on a challenge against the validity of an act of Congress, a co-equal branch of
government, it behooves the Court to have at once one principle in mind: the presumption of constitutionality of
statutes. This presumption finds its roots in the tri-partite system of government and the corollary separation of
powers, which enjoins the three great departments of the government to accord a becoming courtesy for each other’s
acts, and not to interfere inordinately with the exercise by one of its official functions. Towards this end, courts ought
to reject assaults against the validity of statutes, barring of course their clear unconstitutionality. To doubt is to
sustain, the theory in context being that the law is the product of earnest studies by Congress to ensure that no
constitutional prescription or concept is infringed. Consequently, before a law duly challenged is nullified, an
unequivocal breach of, or a clear conflict with, the Constitution, not merely a doubtful or argumentative one, must be
demonstrated in such a manner as to leave no doubt in the mind of the Court.
WHEREFORE, the Court resolved to:
1. GRANT the Urgent Motion to Recall Entry of Judgment by movants-intervenors, dated and filed on
October 29, 2010;
2. RECONSIDER and SET ASIDE the July 20, 2010 Resolution, and GRANT the Motion for Leave to
Intervene and to File and to Admit Intervenors’ Motion for Reconsideration of the Resolution dated July 20,
2010;
3. GRANT the Intervenors’ Motion for Reconsideration of the Resolution dated May 12, 2010. The May 12,
2010 Resolution is RECONSIDERED and SET ASIDE. The provision in Article 9(2) of the Rules and
Regulations Implementing the Local Government Code of 1991 stating, "The land area requirement shall not
apply where the proposed province is composed of one (1) or more islands," is declared VALID.
Accordingly, Republic Act No. 9355 (An Act Creating the Province of Dinagat Islands) is declared as VALID
and CONSTITUTIONAL, and the proclamation of the Province of Dinagat Islands and the election of the
officials thereof are declared VALID; and
4. The petition is DISMISSED.
No pronouncement as to costs.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA

Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
ANTONIO T. CARPIO CONCHITA CARPIO MORALES

PRESBITERO J. VELASCO, JR. TERESITA J. LEONARDO-DE CASTRO

ARTURO D. BRION DIOSDADO M. PERALTA

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.

JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA

MARIA LOURDES P.A. SERENO

Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Resolution had been
reached in consultation before the case was assigned to the writer of the opinion of the Court.
RENATO C. CORONA
Chief Justice
Footnotes
1Congressman Francisco T. Matugas (incumbent Congressman of the First Legislative District of Surigao
del Norte), Hon. Sol T. Matugas, Hon. Arturo Carlos A. Egay, Jr. (incumbent Governor and Vice Governor,
respectively, of the Province of Surigao del Norte), Hon. Simeon Vicente G. Castrence, Hon. Mamerto D.
Galanida, Hon. Margarito M. Longos, and Hon. Cesar M. Bagundol (incumbent Board Members of the First
Provincial District of Surigao del Norte).
2Passed by the House of Representatives and the Senate on August 28, 2006 and August 14, 2006,
respectively.
3
R.A. No. 7160, Sec. 10.
SECTION. 10. Plebiscite Requirement. – No creation, division, merger, abolition, or substantial

alteration of boundaries of local government units shall take effect unless approved by a majority of
the votes cast in a plebiscite called for the purpose in the political unit or units directly affected.
Said plebiscite shall be conducted by the Commission on Elections (COMELEC) within one
hundred twenty (120) days from the date of effectivity of the law or ordinance effecting such action,
unless said law or ordinance fixes another date.
4
Rollo, pp. 124-127.
5 Id. at 143.
6 Rollo (G.R. No. 175158), pp. 3-20.
7
Per the November 28, 2006 Resolution, the Court dismissed the petition due to its defective or insufficient
verification and certification of non-forum shopping and the failure of petitioners’ counsel to indicate an
updated Integrated Bar of the Philippines official receipt. In its February 13, 2007 Resolution, the Court
dismissed the petition with finality. On April 11, 2007, an Entry of Judgment was issued. (Id. at 77A and
112.)
8 Rollo, pp. 3-43.
9
Id. at 736-765.
Penned by Associate Justice Diosdado M. Peralta, with Chief Justice Reynato S. Puno (now retired) and
10
Associate Justices Antonio T. Carpio, Conchita Carpio Morales, Arturo D. Brion, Mariano C. Del Castillo,
Martin S. Villarama, Jr., Jose Portugal Perez, and Jose Catral Mendoza, concurring.
11
Dissented to by Associate Justice Antonio Eduardo B. Nachura, joined by Associate Justices Renato C.
Corona (now Chief Justice), Presbitero J. Velasco, Jr., Teresita J. Leonardo-De Castro, Lucas P. Bersamin,
and Roberto A. Abad.
Penned by Associate Justice Diosdado M. Peralta, with Chief Justice Reynato S. Puno (now retired) and
12
Associate Justices Antonio T. Carpio, Conchita Carpio-Morales, Arturo D. Brion, Mariano C. Del Castillo,
Martin S. Villarama, Jr., and Jose Catral Mendoza, concurring.
13Dissented to by Associate Justice Jose Portugal Perez, joined by Associate Justices Renato C. Corona
(now Chief Justice), Antonio Eduardo B. Nachura, Teresita J. Leonardo-De Castro, Lucas P. Bersamin, and
Roberto A. Abad.
14 Rollo, pp. 984-997.
15 Id. at 1153-1154.
16
Id. at 1155- 1158.
17Quinto v. Commission on Elections, G.R. No. 189698, February 22, 2010, 613 SCRA 385; Office of the
Ombudsman v. Miedes, Sr., G.R. No. 176409, February 27, 2008, 547 SCRA 148; Pinlac v. Court of
Appeals, 457 Phil. 527 (2003); Mago v. Court of Appeals, 363 Phil. 225 (1999); Lim v. Pacquing, G.R. No.
115044, January 27, 1995, 240 SCRA 649; Tahanan Development Corporation v. Court of Appeals, 203
Phil. 652 (1982); and Director of Lands v. Court of Appeals, 181 Phil. 432 (1979).
18 Sec. 3. Second Motion for Reconsideration. – The Court shall not entertain a second motion for
reconsideration and any exception to this rule can only be granted in the higher interest of just by the Court
en banc upon a vote of at least two-thirds of its actual membership. There is reconsideration "in the higher
interest of justice" when the assailed decision is not only legally erroneous, but is likewise patently unjust
and potentially capable of causing unwarranted and irremediable injury or damage to the parties. A second
motion for reconsideration can only be entertained before the ruling sought to be reconsidered becomes
final by operation of law or by the Court’s declaration.
19The Province of North Cotabato v. Republic, G.R. No. 183591, October 14, 2008, 568 SCRA 402, citing
Firestone Ceramics, Inc. v. Court of Appeals, 372 Phil. 401 (1999) and Vicente V. Mendoza, JUDICIAL
REVIEW OF CONSTITUTIONAL QUESTIONS 137 (2004).
20
David v. Macapagal-Arroyo, G.R. No. 171396, May 3, 2006, 489 SCRA 160.
21
Id. at 223.
22See Tan Tiac Chiong v. Hon. Rodrigo Cosico, 434 Phil. 753 (2002); People v. Hon. Chavez, 411 Phil. 482
(2001).
23 Id.
24
Manotok IV v. Heirs of Homer L. Barque, G.R. Nos. 162335 & 162605, December 18, 2008, 574 SCRA
468, 492.
Bicameral Conference Committee Meeting of the Committee on Local Government, May 22, 1991, 4th
25
Regular Session, pp. 57-67.
26ARTICLE 3. Declaration of Policy. – (a) It is hereby declared the policy of the Sate that the territorial and
political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to
attain their fullest development as self-reliant communities and make them more effective partners in the
attainment of national goals. Toward this end, the State shall provide for a more responsive and accountable
local government structure instituted through a system of decentralization whereby local government units
(LGUs) shall be given more powers, authority, responsibilities, and resources. The process of
decentralization shall proceed from the National Government to the LGUs.
27 Prescribing the Implementing Rules and Regulations of the Local Government Code of 1991.
28
Congressman Chiongbian is one of the sponsors of House Bill No. 34061, the House of Representatives
version of the proposed Local Government Code.
29 Bicameral Conference Committee on Local Government (Book III), March 13, 1991, pp. 18-28.
30Section 284. Allotment of Internal Revenue Taxes. – Local government units shall have a share in the
national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal
year as follows:
(c) On the third year and thereafter, forty percent (40%):
Provided, That in the event that the National Government incurs an unmanageable public sector
deficit, the President of the Philippines is hereby authorized, upon the recommendation of the
Secretary of Finance, Secretary of Interior and Local Government, and Secretary of Budget and
Management, and subject to consultation with the presiding officers of both Houses of Congress
and the presidents of the "liga", to make the necessary adjustments in the internal revenue
allotment of local government units but in no case shall the allotment be less than thirty percent
(30%) of the collection of national internal revenue taxes of the third fiscal year preceding the
current fiscal year: Provided, further, That in the first year of the effectivity of this Code, the local
government units shall, in addition to the thirty percent (30%) internal revenue allotment which shall
include the cost of devolved functions for essential public services, be entitled to receive the
amount equivalent to the cost of devolved personal services.
Section 285. Allocation to Local Government Units. – The share of local government units in the
internal revenue allotment shall be allocated in the following manner:
(a) Provinces – Twenty-three percent (23%);
(b) Cities – Twenty-three percent (23%);
(c) Municipalities – Thirty-four percent (34%); and
(d) Barangays – Twenty percent (20%):
Provided, however, That the share of each province, city, and municipality shall be determined on
the basis of the following formula:
(a) Population – Fifty percent (50%);
(b) Land Area – Twenty-five percent (25%) and
(c) Equal Sharing – Twenty-five percent (25%):
Provided, further, That the share of each barangay with a population of not less than one hundred
(100) inhabitants shall not be less than Eighty thousand pesos (₱80,000.00) per annum chargeable
against the twenty percent (20%) share of the barangay from the internal revenue allotment, and
the balance to be allocated on the basis of the following formula:
(a) On the first year of the effectivity of this Code:
(1) Population – Forty percent (40%); and

(2) Equal Sharing – Sixty percent (60%)
(1) Population – Fifty percent (50%); and
(2) Equal Sharing – Fifty percent (50%)
(c) On the third year and thereafter:
(1) Population – Sixty percent (60%); and
(2) Equal Sharing – Forty percent (40%):
Provided, finally, That the financial requirements of barangays created by local government units
after the effectivity of this Code shall be the responsibility of the local government unit concerned.
Commissioner of Internal Revenue v. Solidbank Corp., 462 Phil. 96, 129-131, 416 SCRA 436 (2003);
31
Republic v. Court of Appeals, 359 Phil. 530, 559; 299 SCRA 199 (1998).
32Sec. 533. Formulation of Implementing Rules and Regulations.—(a) Within one (1) month after the
approval of this Code, the President shall convene the Oversight Committee as herein provided for. The said
Committee shall formulate and issue the appropriate rules and regulations necessary for the efficient and
effective implementation of any and all provisions of this Code, thereby ensuring compliance with the
principles of local autonomy as defined under the Constitution.
(b) The Committee shall be composed of the following:
(1) The Executive Secretary, who shall be the Chairman;
(2) Three (3) members of the Senate to be appointed by the President of the Senate, to
include the Chairman of the Committee on Local Government;
(3) Three (3) members of the House of Representatives to be appointed by the Speaker,
to include the Chairman of the Committee on Local Government;
(4) The Cabinet, represented by the following:
(i) Secretary of the Interior and Local Government;
(ii) Secretary of Finance;
(iii) Secretary of Budget and Management; and
(5) One (1) representative from each of the following;
(i) The League of Provinces;
(ii) The League of Cities;
(iii) The League of Municipalities; and
(iv) The Liga ng mga Barangay.

(c) The Committee shall submit its report and recommendation to the President within two (2)
months after its organization. If the President fails to act within thirty (30) days from receipt thereof,
the recommendation of the Oversight Committee shall be deemed approved. Thereafter, the
Committee shall supervise the transfer of such powers and functions mandated under this Code to
the local government units, together with the corresponding personnel, properties, assets and
liabilities of the offices or agencies concerned, with the least possible disruptions to existing
programs and projects. The Committee shall likewise recommend the corresponding appropriations
necessary to effect the said transfer.
For this purpose, the services of a technical staff shall be enlisted from among the qualified
employees of Congress, the government offices, and the leagues constituting the Committee.
(d) The funding requirements and the secretariat of the Committee shall be provided by the Office
of the Executive Secretary.
(e) The sum of Five million pesos (₱5,000,000.00), which shall be charged against the Contingent
Fund, is hereby allotted to the Committee to fund the undertaking of an information campaign on
this Code. The Committee shall formulate the guidelines governing the conduct of said campaign,
and shall determine the national agencies or offices to be involved for this purpose. (Emphasis
supplied.)
As found in the Whereas clauses of Administrative Order No. 270 prescribing the Implementing Rules and
33
Regulations of the Local Government Code of 1991, viz.:
WHEREAS, the Oversight Committee, after due deliberations and consultations with all the
concerned sectors of society and consideration of the operative principles of local autonomy as
provided in the Local Government Code of 1991, has completed the formulation of the
implementing rules and regulations. (Emphasis supplied.)
34
Galarosa v. Valencia, G.R. No. 109455, November 11, 1993, 227 SCRA 728.
35
G.R. Nos. 176951, 177499, and 178056, December 21, 2009, 608 SCRA 636, 644-645.
The Lawphil Project - Arellano Law Foundation
DISSENTING OPINION
CARPIO, J.:
I join Justice Diosdado M. Peralta and Justice Arturo D. Brion in their dissents. I file this separate dissenting opinion
because the majority’s ruling today, legitimizing the creation of a province in blatant violation of the Constitution and
the Local Government Code, opens the floodgates to the proliferation of pygmy provinces and legislative districts,
mangling sacred and fundamental principles governing our democratic way of life and exacerbating the scourge of
local dynastic politics.
First. The Dinagat Islands province simply does not meet the criteria for the creation of a province. To
implement the Constitution and for reasons of political practicality and economic viability, Section 461 of the Local
Government Code bars the creation of provinces unless two of three minimum requirements are met. Section 461
of the Code provides:
SEC. 461. Requisites for Creation. - (a) A province may be created if it has an average annual income, as certified
by the Department of Finance, of not less than Twenty million pesos (₱20,000,000.00) based on 1991 prices and
either of the following requisites:
the Lands Management Bureau; or
(ii) a population of not less than two hundred fifty thousand (250,000) inhabitants as certified
by the National Statistics Office:
Provided, that the creation thereof shall not reduce the land area, population, and income of the original unit
or units at the time of said creation to less than the minimum requirements prescribed herein.
(c) The average annual income shall include the income accruing to the general fund, exclusive of special
funds, trust funds, transfers, and non-recurring income. (Emphasis supplied)
Section 461 requires a province to meet the minimum income requirement and either the minimum land area or
minimum population requirement. In short, two of the three minimum requirements must be satisfied, with the
minimum income requirement one of the two. The Dinagat Islands province, whose income at the time of its
creation in 2006 was ₱82,696,433.22, satisfies only the minimum income requirement. The Dinagat Islands
province does not meet either the minimum land area requirement or the minimum population
requirement. Indisputably, Dinagat Islands cannot qualify as a province under Section 461 of the Local Government
Code, the law that governs the creation of provinces.
Based on the 2000 census, Dinagat Islands’ population stood only at 106,951, less than half of the statutory minimum
of 250,000. In the census conducted seven years later in 2007, one year after its creation, its population grew by only
13,862, reaching 120,813, still less than half of the minimum population required. The province does not fare any
better in land area, with its main island, one sub-island and around 47 islets covering only 802.12 square kilometers,
less than half of the 2,000 square kilometers minimum land area required.
The Local Government Code contains no exception to the income and population or land area requirements in
creating provinces. What the Code relaxed was the contiguity rule for provinces consisting of "two (2) or more islands
or is separated by a chartered city or cities which do not contribute to the income of the province." The minimum land
area of 2,000 square kilometers in the Code for the creation of a province was never changed, and no exception
was ever created by law. Hence, the exception created in the implementing rule1 of the Local Government Code,
exempting provinces "composed of one (1) or more islands" from the minimum land area requirement, is void for
being ultra vires, granting a statutory exception that the Local Government Code clearly withheld. The implementing
rule, being a mere administrative regulation to implement the Local Government Code, cannot amend the Code but
must conform to the Code. Only Congress, and not any other body, is constitutionally empowered to create, through
amendatory legislation, exceptions to the land area requirement in Section 461 of the Code.
The majority argues that since the exception of island provinces from the minimum land area requirement was
inserted in the implementing rules by the congressional Oversight Committee, the Court should extend great weight
to this "legislative construction" of the Code. This is gross error. First, in Macalintal v. Comelec,2 we ruled that a
congressional oversight committee has no power to approve or disapprove the implementing rules of laws because
the implementation of laws is purely an executive function. The intrusion of the congressional Oversight Committee in
the drafting of implementing rules is a violation of the separation of powers enshrined in the Constitution. This Court
cannot allow such intrusion without violating the Constitution. Second, Congress has no power to construe the law.
Only the courts are vested with the power to construe the law. Congress may provide in the law itself a definition of
terms but it cannot define or construe the law through its Oversight Committee after it has enacted the law because
such power belongs to the courts.
It is not difficult to see why Congress allowed an exception to the land area requirement in the creation of
municipalities3 and cities4 but withheld it for provinces. The province, as the largest political and corporate
subdivision of local governance in this country, serves as the geographic base from which municipalities, cities and
even another province will be carved, fostering local development. Today’s majority ruling, allowing the creation of an
island province irrespective of population and land area so long as it has ₱20 million annual income, wipes away the
territorial and population tiering among provinces, cities and municipalities the Local Government Code has carefully
structured, reducing provinces to the level of a rich municipality, 5 unable to host otherwise qualified new smaller local
government units for sheer lack of space.
Despite the majority’s ingenious resort to "legislative construction" in the implementing rules to exempt Dinagat
Islands from the minimum land area requirement, the majority cannot escape one glaring fact: Dinagat Islands
province satisfies only the minimum income requirement under Section 461 of the Local Government Code. Even
assuming that the minimum land area requirement does not apply to island provinces, an assumption that is
devoid of any legal basis, Dinagat Islands still fail to meet the minimum population requirement. Under
Section 461 of the Code, two of the three minimum requirements must be satisfied in the creation of a province, with
the income requirement being one of the two minimum requirements. The majority’s ruling today creates the Dinagat
Islands province despite the indisputable fact that it satisfies only one of the two necessary requirements prescribed
in Section 461. The majority’s ruling clearly violates Section 461 of the Code, no question about it.
Second. It is mandatory that a province must have a population of at least 250,000. The 1987 Constitution mandates
that "each province[,] shall have at least one representative."6 In Sema v. Commission on Elections,7we
categorically ruled that "the power to create a province or city inherently involves the power to create a
legislative district." Thus, when Congress creates a province it necessarily creates at the same time a legislative
district. The province must comply with the minimum population of 250,000 because the Constitution mandates that
250,000 shall be the minimum population for the creation of legislative districts. 8
The Constitution provides for proportional representation in the House of Representatives when it declares that
"legislative districts [shall be] apportioned among provinces, cities, and the Metropolitan Manila area in
accordance with the number of their respective inhabitants x x x ." This means that for every given number of
inhabitants, "provinces, cities and the Metropolitan Manila area" will be entitled to one representative. In
consonance with this constitutional rule on proportional representation and in compliance with the Equal Protection
Clause, the minimum population for the creation of legislative districts in provinces and cities must be the same.
Since the Constitution expressly provides that the minimum population of legislative districts in cities shall be
250,000,9 then it necessarily follows that the minimum population of legislative districts in provinces shall also be
250,000. Otherwise, there will be a blatant violation of two fundamental principles of our democratic system – the
constitutional requirement of proportional representation in the House of Representatives for "provinces, cities and
the Metropolitan Manila area" and the "one person, one vote" rule rooted in the Equal Protection Clause.
Moreover, to treat land area as an alternative to the minimum population requirement (based on the conjunctive
"either" in Section 461) destroys the supremacy of the Constitution, making the statutory text prevail over the clear
constitutional language mandating a minimum population through the requirement of proportional representation in
the apportionment of all legislative districts. In short, in the creation of a province neither Congress nor the
Executive can replace the minimum population requirement with a land area requirement because the
creation of a province necessarily creates at the same time a legislative district, which under the Constitution
must have a minimum population of 250,000.
Because of the majority’s ruling today, the House of Representatives will now count among its members a
representative of a "premium" district consisting, as of the 2007 census, of only 120,813 constituents, well below the
minimum population of 250,000 his peers from the other regular districts represent. This malapportionment tolerates,
on the one hand, vote undervaluation in overpopulated districts, and, on the other hand, vote overvaluation in
underpopulated ones, in clear breach of the "one person, one vote" rule rooted in the Equal Protection Clause. To
illustrate, the 120,813 inhabitants of Dinagat Islands province are entitled to send one representative to the House of
Representatives. In contrast, a legislative district in Metro Manila needs 250,000 inhabitants to send one
representative to the House of Representatives. Thus, one vote in Dinagat Islands has the weight of more than
two votes in Metro Manila for the purpose of representation in the House of Representatives. This is not what
our "one person, one vote" representative democracy is all about.
What special and compelling circumstances have the majority found that entitle the inhabitants of Dinagat Islands to
such a privileged position? Do the inhabitants of Dinagat Islands have more than twice the IQ of inhabitants of Metro
Manila? Do the inhabitants of Dinagat Islands pay more than twice the amount of taxes that inhabitants of Metro
Manila pay? Are the inhabitants of Dinagat Islands the chosen people of God to lead this country to greatness? Have
the Filipino people, in a plebiscite, agreed to confer on the inhabitants of Dinagat Islands such privileged position,
which is the only constitutionally justifiable way to grant such privileged status? Indeed, the gross malapportionment
this case presents is just as constitutionally damaging as that in Aquino v. Commission on Elections10 where the
population of the reapportioned five legislative districts in Camarines Sur, based on relevant census, fluctuated from a
high of 439,043 (Third District) to a low of 176,383 (First District).
Aquino v. Commission on Elections, and now this Dinagat Islands province case, will mangle beyond recognition the
bedrock constitutional principles of proportional representation in the House of Representatives, as well as the
egalitarian rule of "one person, one vote" universally honored in all modern civilized societies and rooted in the Equal
Protection Clause. With Aquino v. Commission on Elections, a legislative district in provinces can be created with no
minimum population requirement. Thus, a municipality with a population of only 25,000 can have a legislative district.
With this Dinagat Islands province case, a province, and necessarily a legislative district, can be created with a
population of only 120,000 or even less. In fact, under both Aquino v. Commission on Electionsand this Dinagat
Islands province case, there is no minimum population requirement whatsoever in the creation of legislative
districts in provinces, and thus even a barangay with a population of 1,000 can be a legislative district. In
sharp contrast, a legislative district in cities can only be created with a minimum population of 250,000 as expressly
required in the Constitution. To repeat, the majority has thrown into the dustbin of history the bedrock democratic
principles of proportional representation in the House of Representatives and the "one person, one vote" rule rooted
in the Equal Protection Clause − both of which are enshrined in our Constitution and in our democratic way of
life. Where is the majority of this Court bringing our representative democracy?
Third. Quasi-malapportionment laws like RA 9355 are double-edged knives thrust at the heart of the anti-dynastic
vision of the 1987 Constitution – it fosters entrenchment of political dynasties and fuels feudalistic practices by
assuring political dynasties easy access to public funds.
Members of Congress are entitled to an equal share of pork barrel funds regardless of the size of their constituencies.
Thus, each seat in the House of Representatives translates to a potent platform for congressmen to cultivate
patronage by doling out development, livelihood and support projects using pork barrel funds allocated in annual
budgets. For each new province created – entailing at the same time the creation of a legislative district – a pipeline
to a huge pool of resources is opened, with the Congressman enjoying wide discretion on how and where he will
dispense such legislative largesse.
Under the majority’s ruling, not only land area but also population is immaterial in creating island provinces. This is
an open invitation to ruling political clans strategically situated in this country’s thousands of islands to sponsor the
creation of more underpopulated provinces within their political bailiwicks, 11 enabling them to capture more pork barrel
funds, thus tightening their grip on the levers of power. This inevitably fuels the feudal practices plaguing Philippine
local politics by fortifying patron (congressman) — ward (constituents) relations upon which dynastic politics thrive. All
this at the expense of taxpayers, mostly residing in city legislative districts with minimum populations of 250,000, who
surely would not want their taxes to be spent as pork barrel funds of political dynasties in underpopulated legislative
districts in island provinces.
The 1987 Constitution is not neutral on the scourge of dynastic politics, a phenomenon that concentrates political
power and public resources within the control of few families whose members alternately hold elective offices, deftly
skirting term limits. Its exclusionary effect on access to public service led the framers of the 1987 Constitution to
mandate that the State "guarantee equal access to opportunities for public service" and that Congress
"prohibitpolitical dynasties x x x."12 To the Filipino people’s misfortune, Congress’ non-implementation of this
constitutional directive is now aggravated by this Court’s wantonly loose translation of the Constitution’s
apportionment standard of proportional representation. 13 Thus, instead of ensuring compliance with the Constitution’s
mandate prohibiting political dynasties, this Court has turned complicit to local politicians’ predilection for dynastic
entrenchment.
Fourth. Far from being dispensable components in the creation of local government units, population and land area –
not income – are the pivotal factors in funding local government units. Under the Local Government Code, these
components determine 75% of the share from the national taxes (Internal Revenue Allotment or IRA) each local
government unit receives, the lifeblood of their operations, based on the following formula:
1. Population – Fifty percent (50%)
2. Land Area – Twenty-five percent (25%)
3. Equal sharing – Twenty-five percent (25%).14
xxxx
Thus, population, with a weight of 50%, ranks first in importance in determining the financial entitlement of local
government units, followed by land area with a weight of 25%.
By treating Dinagat Islands’ land area of 802.12 square kilometers as compliant with the 2,000 square kilometers
minimum under Section 461, the majority effectively included in their land area computation the enclosed
marine area or waters of Dinagat Islands. This disposition not only reverses, without cause, decades’ old
jurisprudence,15 it also wreaks havoc on the national government’s allocation of the internal revenue allotment to
existing island provinces which would be justified in invoking today’s ruling to clamor for increased revenue shares
due to increased "land area." In short, other island provinces, like Romblon, Marinduque, Sulu, Tawi-Tawi and
Palawan, can now claim their enclosed marine areas as part of their "land area" in computing their share of the IRA.16
On the part of landlocked provinces hosting large bodies of water, like Rizal, Laguna, Batangas, Cavite and Lanao
del Sur, the situation is reversed. Finding themselves holding, but not surrounded by, water, the submerged territory,
no matter how large, is excluded from the computation of their land area, thus proportionately lowering their share in
the revenue allotment compared to their island counterparts.
Thus, in its zeal to legalize the creation of an obviously disqualified local government unit, the majority unwittingly
creates classes of elite and disadvantaged provinces, using the most arbitrary factor of geographic accident as basis
for classification. Even under the most benign equal protection analysis, this does not pass constitutional muster.
Fifth. The Constitution and the Local Government Code are normative guides for courts to reasonably interpret and
give expression to the will of the Filipino people as encoded in their provisions. Members of this Court go beyond the
bounds of their sworn duties when they second guess the intent of the Constitution’s framers and the people’s
elected representatives, pretending to act as if they themselves have been accorded electoral mandate to amend
statutes as they see fit. No amount of rhetoric singing paeans to the virtues of promoting local autonomy can hide the
blatant judicial legislation the majority has succeeded in doing here today, to the detriment of the Constitution’s
requirements of proportional representation in the House of Representatives, equal protection under the law and the
prohibition against political dynasties, not to mention the blatant violation of Section 461 of the Local Government
Code.
Accordingly, I vote to DENY the Motion to Recall Entry of Judgment, the Motion for Leave to Intervene and to File and
Admit Intervenors’ Motion for Reconsideration of the Resolution dated 20 July 2010, and the Motion for
Reconsideration of the Resolution dated 12 May 2010 filed by the intervenors.
ANTONIO T. CARPIO
Associate Justice
Footnotes
1Article 9, paragraph 2 ("[T]he land area requirement shall not apply where the proposed province is
composed of one or more islands. x x x x")
2 G.R. No. 157013, 10 July 2003.
3
Section 442 (b) ("The territorial jurisdiction of a newly-created municipality shall be properly identified by
metes and bounds. The requirement on land area shall not apply where the municipality proposed to
be created is composed of one (1) or more islands. x x x x") (emphasis supplied).
4Section 450 (b) ("The territorial jurisdiction of a newly-created city shall be properly identified by metes and
bounds. The requirement on land area shall not apply where the city proposed to be created is
composed of one (1) or more islands. x x x x") (emphasis supplied).
5Which, under Section 442, must have minimum income, population and land area of ₱2.5 million (based
on 1991 prices), 25,000 and 50 square kilometers (contiguous), respectively.
6
Section 5(3), Article VI of the 1987 Constitution provides: "Each legislative district shall comprise, as far as
practicable, contiguous, compact, and adjacent territory. Each city with a population of at least two
hundred fifty thousand, or each province, shall have at least one representative." (Emphasis supplied)
7 G.R. Nos. 177597 & 178628, 16 July 2008.
8 Id.
9 Id.
10 G.R. No. 189793, 617 SCRA 623 (2010).
11Much like in the creation of legislative districts, the creation of local government units is done at the behest
of legislators representing the relevant locality.
12
Section 26, Article II (emphasis supplied).
13 Paradigmatically shown in Aquino v. Commission on Elections, G.R. No. 189793, 617 SCRA 623 (2010).
14
Section 285.
15In Tan v. Commission on Elections (No. L-73155, 11 July 1986, 142 SCRA 727), we rejected as baseless
the claim that "territory" for purposes of the creation of a province, includes submerged land: "The use of the
word territory in this particular provision of the Local Government Code and in the very last sentence thereof,
clearly reflects that "territory" as therein used, has reference only to the mass of land area and excludes
the waters over which the political unit exercises control." (Id. at 749; emphasis supplied).
Others island provinces would be Cebu, Bohol, Masbate, Catanduanes, Batanes, Basilan, Siquijor, and
16
Camiguin.
DISSENTING OPINION
BRION, J.:
I join the Dissents of Justices Antonio T. Carpio and Diosdado M. Peralta on the strict merits of the case – on why,
based on the merits, Republic Act No. 9355 (RA 9355), otherwise known as An Act Creating the Province of Dinagat
Islands, should be declared unconstitutional.
Additionally, I submit this Dissenting Opinion to express my objections in the strongest terms against the
transgressions the Court committed in ruling on this case. The result, which is obvious to those who have been
following the developments in this case and current Supreme Court rulings, is another flip-flop, made worse by the
violations of the Court’s own Internal Rules.1 This is not, of course, the Court’s first flip-flop in recent memory; we did
a couple of remarkable somersaults in our rulings in the case of League of Cities of the Philippines, et al. v.
Comelec.2 This Dissent is written in the hope that the Court’s violation of its own rules in this case will be the last, and
that the Court will re-think its disposition of this case.
The Court rendered its Decision in this case on February 10, 2010, declaring RA 9355 unconstitutional. The Office of
the Solicitor General (OSG), in behalf of the respondents, and respondent Governor Geraldine Ecleo-Villaroman filed
their separate Motions for Reconsideration. These were their first motions for reconsideration.
On May 12, 2010, the Court denied these motions for lack of merit.
On May 26 and 28, 2010, respondent Governor Ecleo-Villaroman and the OSG respectively filed their 2nd Motions
for Reconsideration. The Court simply noted these motions without action as they are prohibited pleadings under
Section 2, Rule 52 of the Rules of Court. This procedural rule states:
Sec. 2. Second Motion for Reconsideration. – No second motion for reconsideration of a judgment or final resolution
by the same party shall be entertained.
The Court’s Decision of February 10, 2010 became final and executory, and Entry of Judgment was made by the
Clerk of Court on May 18, 2010. At that point, the Decision of the Court should have been beyond recall.
On June 18, 2010 (or a full month after entry of judgment), new parties, namely – Congressman Francisco T.
Matugas, Hon. Sol T. Matugas, Hon. Arturo Carlos A. Egay, Jr., Hon. Vicente G. Castrence, Hon. Mamerto D.
Galamida, Hon. Margarito M. Longos, and Hon. Cesar M. Bagundol, filed a Motion for Leave to Intervene and to File
and to Admit Intervenors’ Motion for Reconsideration of the Resolution dated May 12, 2010. They prayed that they be
allowed to intervene in the case since they were the newly elected officials of Surigao del Norte in the May 10, 2010
elections, who were in danger of losing their positions once the Court's February 10, 2010 decision, declaring R.A.
No. 9355 unconstitutional, attained finality. Effectively, they took up the cause of the original respondent Province of
Surigao del Norte then represented by former Governor Robert Ace Barbers.
The Court denied the motion in its Resolution of July 20, 2010, pursuant to Section 2, Rule 19 of the Rules of Court
which allows a motion for intervention only before the rendition of judgment by the trial court. Applying this rule to an
action originally filed with the Court, we ruled that a motion for intervention could only be filed before, and not after,
the final judgment in the case.
Respondent Governor Ecleo-Villaroman filed, on October 22, 2010, an Urgent Omnibus Motion (To Resolve Motion
for Leave of Court to Admit 2nd Motion for Reconsideration and, to Set Aside Entry of Judgment). Thus, despite the
Entry of Judgment, she sought the Court’s ruling on her 2nd Motion for Reconsideration that had simply been Noted
Without Action by the Court for being a prohibited pleading. The ploy to reopen the case and escape from the
consequences of the final judgment was apparent from the move to set aside the Entry of Judgment. Effectively, she
was moving for the third time to secure the review of the February 10, 2010 Decision that had been declared final,
and to re-submit the case for another deliberation on the merits.
Side by side with the original respondent, the would-be intervenors - despite the lack of personality to act on the
case - filed on October 29, 2010 an Urgent Motion to Recall Entry of Judgment. Of course, this move was duly
orchestrated with the respondents whose own motions were filed a week earlier. This was a motion the would-be
intervenors had no personality to file since their proposed intervention, at that point, stood denied.
The Court en banc deliberated on the case and by a vote of 9 in favor and 6 against, decided to lift the entry of
judgment and allow the intervention of the new parties. By the same vote, it voted to completely reverse the Decision
of February 10, 2010 and declare RA 9355, entitled An Act Creating the Province of Dinagat Islands, constitutional.
In acting as it did, the Court did not hesitate, by a 9-6 vote, to disregard existing rules that the Court itself created.
After this vote, the ponente modified the majority resolution in reaction to the original version of this Dissent. This
time, the majority Resolution claimed that it was acting only on the would-be intervenors' Motion to Lift Entry of
Judgment, not on the original respondents' motion to set aside judgment. The ploy apparently was to avoid the
Dissent's position that the Court acted on a prohibited 2nd motion for reconsideration without the required
vote.
The Court, for reasons of its own, has chosen to live with the public fiction that 2nd motions for reconsideration are
prohibited pleadings pursuant to Section 2, Rule 52 of the Rules of Court, cited and quoted above. In actual practice,
exceptions to this Rule are allowed and what governs is Section 3, Rule 15 of the Internal Rules of the Supreme
Court which provides:
Sec. 3. Second Motion for Reconsideration. – The Court shall not entertain a second motion for reconsideration and
any exception to this rule can only be granted in the higher interest of justice by the Court en banc upon a vote of at
least two-thirds of its actual membership. There is reconsideration "in the higher interest of justice" when the assailed
decision is not only legally erroneous, but is likewise patently unjust and potentially capable of causing unwarranted
and irremediable injury or damage to the parties. A second motion for reconsideration can only be entertained before
the ruling sought to be reconsidered becomes final by operation of law or by the Court’s declaration. [Emphases
supplied.]
In the present case, the Court simply noted without action respondent Governor Ecleo-Villaroman’s and the OSG’s
2nd motions for reconsideration because they are prohibited pleadings. The Court thereafter declared its judgment
final, and entry of judgment followed. Thus, when Governor Ecleo-Villaroman sought to lift the entry of judgment, her
motion – which sought to reopen the case for another review – was effectively a third motion for reconsideration that
should have been governed by Section 3, Rule 15 of the Internal Rules. With the modified position that the Court
was acting on the movants-intervenors' motion to lift entry of judgment, the majority sought to avoid the
restrictive rule on 2nd motions for reconsideration.
How the Court acted on the respondents’ and would-be intervenors' motions is interesting.
a. Violation of the Rule on Reconsideration. By a 9-6 vote, the Court declared the entry of judgment lifted. In
so doing, it completely disregarded its own rule that any 2nd motion for reconsideration can only be
entertained through a vote of 2/3 of the actual membership, or of 10 members, of the Court. It likewise
disregarded the rule that a second motion for reconsideration can only be entertained before the ruling
sought to be reconsidered becomes final by operation of law or by the Court’s declaration. It conveniently
forgot, too, when it subsequently claimed that the motion it was considering was not by respondent
Governor Ecleo but by the would-be intervenors, that what an original party could no longer do with respect
to a final decision, would-be intervenors – practically representing the same interests and who had not even
been recognized by this Court – cannot also do; otherwise, what is directly prohibited is allowed through
indirect means. Unbelievably, among the majority's supporting arguments to support their violation, was that
(1) a motion to lift entry of final judgment is not a motion for reconsideration of the decision sought to be
declared non-final; and that (2) no exact provision of the Internal Rules covers the lifting of an entered final
judgment.
b. Violation of the Rule on Finality of Judgments. Worse than the above transgression, the Court turned a
blind eye to the finality of the judgment it had reached in the case.
The judgment in a case becomes final by operation of law (after the lapse of fifteen [15] days from the parties’ receipt
of the judgment) or upon the Court’s declaration of the judgment’s finality. Entry of Judgment by the Clerk of Court
follows the finality of a judgment, i.e., if no motion for reconsideration is filed with the Court within fifteen (15) days
from the parties’ receipt of the judgment.
As mentioned above, no second motion for reconsideration can be entertained once a judgment has become final. In
this case, the Court disregarded its own rules and entertained a motion to lift the entry of judgment and to reopen the
case. It was not an ordinary violation as the judgment lifted was already final. The respondent Governor's motion to
lift entry of judgment was effectively a third motion for reconsideration (as its objective is to open the final decision for
another consideration) and its consequences need no elaborate argument to be understood. For the would-be
intervenors, it was a matter of putting the cart before the horse – a move to lift the entry of judgment even before the
would-be intervenors had their personality recognized by the Court.
The principle of immutability of a final judgment stands as one of the pillars supporting a strong, credible and effective
court. To quote what this Court has repeatedly stated on this principle:
"It is a hornbook rule that once a judgment has become final and executory, it may no longer be modified in any
respect, even if the modification is meant to correct an erroneous conclusion of fact or law, and regardless of whether
the modification is attempted to be made by the court rendering it or by the highest court of the land, as what remains
to be done is the purely ministerial enforcement or execution of the judgment.
The doctrine of finality of judgment is grounded on fundamental considerations of public policy and sound practice
that at the risk of occasional errors, the judgment of adjudicating bodies must become final and executory on some
definite date fixed by law. [x x x ], the Supreme Court reiterated that the doctrine of immutability of judgment is
adhered to by necessity notwithstanding occasional errors that may result thereby, since litigations must somehow
come to an end for otherwise, it would "be even more intolerable than the wrong and injustice it is designed to
protect."3 [Emphases supplied.]
This same principle, incidentally, is what we teach students in law schools as a basic bedrock principle in
the administration of justice. This is the same principle, too, that is often asked in the bar
examinations.Unfortunately, this is the same principle that the Court violated, through a 9-6 vote, when it decided to
lift its Entry of Judgment and to entertain the reopening of the final judgment in the case for renewed consideration.
This, indeed, is a most unusual move. Did the Majority truly fail to appreciate that the lifting of the entry of judgment is
no different in effect from entertaining a motion for reconsideration, and can be made, if at all, by the actual parties,
not by would-be intervenors? If a 2nd motion for reconsideration is prohibited and requires a 2/3 vote, can a vote that
removes the character of finality from a judgment be any less?
c. Violation of the Rule on Intervention. The Court disregarded as well the rule on interventions. 4 The motion for
intervention was initially denied since the Court’s decision was already final, and intervention could no longer
be allowed. To go around this rule, the would-be intervenors, without first successfully securing leave to intervene,
instead filed its own motion to lift entry of judgment – the same 2nd motion from the original respondents that the
Court previously simply noted without action. The Court granted the motion to lift judgment by a 9-6 vote, under the
fiction that it was an intervening party, not the barred original respondents, who had asked for it.
To complete this blow-by-blow account, the respondents’ legal tactician used the ploy of first reopening the case
(initially through the original respondents, and subsequently solely through the would-be intervenors), and thereafter
moved to allow intervention since the original respondents had by then exhausted their arguments for the
constitutionality of RA 9355. On two previous attempts, the original respondents had failed. To get around the
insurmountable block posed by the rule on 2nd motions for reconsideration, they fell back on their modified
Resolution with the position that another party – the would-be intervenors – wanted to lift the entry of judgment. Once
the entry of judgment was lifted and intervention was allowed, it was an easy step to reopen the arguments, add to
what the original respondents presented, and submit the case for a ruling on the merits. The same magic numbers of
course prevailed all throughout: 9 to 6.
In this manner, the original and final ruling of the Court, in what is commonly known as the "Dinagat case" was
reversed. Unlike the case of Lazarus who rose from the dead through a miracle, Dinagat resurrected because the
Court disregarded its own rules and established jurisprudential principles. Of course, it can similarly be called a
miracle as no reversal could have taken place if just one of the series of transgressions pointed out did not take
place. How such resurrection can happen in the Supreme Court is a continuing source of wonder!
ARTURO D. BRION
Associate Justice
Footnotes
1 A.M. No. 10-4-20-SC, The Internal Rules of the Supreme Court, effective May 22, 2010.
2
G.R. Nos. 176951, 177499 & 178056, February 15, 2011.
3
Vios v. Pantangco, Jr., G.R. No. 163103, February 6, 2009, citing Coca-Cola Bottlers Philippines, Inc.,
Sales Force Union-PTGWO-BALAIS v. Coca-Cola Bottlers, Philippines, Inc., G.R. No. 155651, July 28,
2005, 464 SCRA 507, 513-514; Apo Fruits Corp. v. CA, G.R. No. 164195, December 4, 2009, citing Siy v.
National Labor Relations Commission, G.R. No. 158971, August 25, 2005, 468 SCRA 154, 161-162, Kline v.
Murray, 257 P. 465, 79 Mont. 530, Flores v. Court of Appeals, G.R. Nos. 97556 & 101152, July 29,
1996, Land Bank of the Philippines v. Arceo, G.R. No. 158270, July 21, 2008, 559 SCRA 85, Temic
Semiconductors, Inc. Employees Union (TSIEU)-FFW v. Federation of Free Workers (FFW), G.R. No.
160993, May 20, 2008, 554 SCRA 122, 134; Session Delights Ice and Cream Fast Foods v. CA, G.R. No.
172149, February 8, 2010, citing Equitable Bank Corp. v. Sadac, G.R. No. 164772, June 8, 2006, 490 SCRA
380, 417; and Navarro v. Metropolitan Bank and Trust Company, G.R. No. 165697, August 4, 2009,
citing Yau v. Silverio, Sr., G.R. No. 158848, February 4, 2008, 543 SCRA 520, Social Security System v.
Isip, G.R. No. 165417, April 4, 2007, 520 SCRA 310, Lim v. Jabalde, G.R. No. 36786, April 17, 1989, 172
SCRA 211 (1983).
4 Section 2, Rule 19 of the 1997 Rules of Civil Procedure reads: Time to intervene. – The motion to
intervene may be filed at any time before rendition of judgment by the trial court. A copy of the pleading-in-
intervention shall be attached to the motion and served on the original parties.
DISSENTING OPINION
PERALTA, J.:
With due respect to the ponente, I register my dissent.
On February 10, 2010, the Court rendered a Decision in the instant case, the dispositive portion of which reads:
WHEREFORE, the petition is GRANTED. Republic Act No. 9355, otherwise known as An Act Creating the Province
of Dinagat Islands, is hereby declared unconstitutional. The proclamation of the Province of Dinagat Islands and the
election of the officials thereof are declared NULL and VOID. The provision in Article 9 (2) of the Rules and
Regulations Implementing the Local Government Code of 1991 stating, "The land area requirement shall not apply
where the proposed province is composed of one (1) or more islands," is declared NULL and VOID.
The Office of the Solicitor General (OSG) filed a motion for reconsideration in behalf of public respondents, and
respondent Governor Geraldine Ecleo-Villaroman, representing the New Province of Dinagat Islands, also filed a
separate motion for reconsideration of the Decision dated February 10, 2010.
On May 12, 2010, the Court issued a Resolution denying the motions for reconsideration of the OSG and respondent
Governor Geraldine Ecleo- Villaroman, representing the New Province of Dinagat Islands, for lack of merit. A copy of
the Resolution dated May 12, 2010 was received by the OSG on May 13, 2010, while respondent Governor
Geraldine Ecleo-Villaroman, representing the New Province of Dinagat Islands, received a copy of the said
Resolution on May 14, 2010.
The Decision dated February 10, 2010 became final and executory on May 18, 2010, as evidenced by the Entry of
Judgment1 issued by the Clerk of Court.
On May 26, 2010, respondent New Province of Dinagat Islands, represented by Governor Geraldine Ecleo-
Villaroman, filed a Motion for Leave to Admit Motion for Reconsideration (of the Resolution dated May 12, 2010) and
the said Motion for Reconsideration, while on May 28, 2010, the OSG filed a Motion for Leave to File the Attached
2nd Motion for Reconsideration (of the Resolution dated May 12, 2010) and the aforesaid Motion for Reconsideration.
On June 29, 2010, the Court noted without action the foregoing motions of respondents, as the said pleadings were
considered second motions for reconsideration of the Decision, which shall not be entertained by the Court, in
accordance with Section 2, Rule 52 of the Rules of Court, thus:
SEC. 2. Second motion for reconsideration. — No second motion for reconsideration of a judgment or final resolution
On June 18, 2010, movants-intervenors Congressman Francisco T. Matugas, Hon. Sol T. Matugas, Hon. Arturo
Carlos A. Egay, Jr., Hon. Simeon Vicente G. Castrence, Hon. Mamerto D. Galanida, Hon. Margarito M. Longos, and
Hon. Cesar M. Bagundol filed a Motion for Leave to Intervene and to File and to Admit Intervenors’ Motion for
Reconsideration of the Resolution dated May 12, 2010.
Movants-intervenors claimed that they have legal interest in this case as they are the duly elected officials 2 of Surigao
del Norte in the May 10, 2010 elections, and their positions will be affected by the nullification of the election results in
the event that the Resolution dated May 12, 2010 in this case is not reversed and set aside.
On March 9, 2010, the Commission on Elections issued Resolution No. 8790, 3 the pertinent portion of which reads:
xxxx
NOW, THEREFORE, with the current system configuration, and depending on whether the Decision of the Supreme
Court in Navarro vs. Ermita is reconsidered or not, the Commission RESOLVED, as it hereby RESOLVES, to declare
that:
a. If the Decision is reversed, there will be no problem since the current system configuration is in line with
the reconsidered Decision, meaning that the Province of Dinagat Islands and the Province of Surigao del
Norte remain as two separate provinces;
b. If the Decision becomes final and executory before the election, the Province of Dinagat Islands will revert
to its previous status as part of the First Legislative District, Surigao del Norte.
xxxx
c. If the Decision becomes final and executory after the election, the Province of Dinagat Islands will revert
to its previous status as part of the First Legislative District of Surigao del Norte.
The result of the election will have to be nullified for the same reasons given in item "b" above. A special election for
Governor, Vice Governor, Member, House of Representatives, First Legislative District of Surigao del Norte, and
Members, Sangguniang Panlalawigan, First District, Surigao del Norte (with Dinagat Islands) will have to be
conducted.
Since movants-intervenors’ elective positions would be adversely affected if the Resolution dated May 12, 2010
would not be reversed, they prayed that they be allowed to intervene in this case and to file their Intervenors’ Motion
for Reconsideration of the Resolution dated May 12, 2010, and that their motion for reconsideration be admitted by
the Court.
In a Resolution dated July 20, 2010, the Court denied the Motion for Leave to Intervene and to File and to Admit
Intervenors’ Motion for Reconsideration of the Resolution dated May 12, 2010. The Court held that, fundamentally,
the allowance or disallowance of a motion to intervene is addressed to the sound discretion of the court. 4 Under
Section 2, Rule 19 of the Rules of Court, a motion to intervene may be filed at any time before rendition of judgment
by the trial court. The Court ruled that since this case originated from an original action filed before this Court, the
appropriate time to file the motion-in-intervention is before and not after resolution of this case, citing Republic v.
Gingoyon.5
It should be noted that this case was decided on February 10, 2010, and the motions for reconsideration of the
Decision were denied in the Resolution dated May 12, 2010. The Decision dated February 10, 2010 became final and
executory on May 18, 2010. Movants-intervenors’ Motion for Leave to Intervene and to File and to Admit Intervenors’
Motion for Reconsideration of the Resolution dated May 12, 2010 was filed only on June 18, 2010, clearly after the
Decision dated February 10, 2010 had became final and executory; hence, the said motion was correctly denied.
The ponente submits that the Court should grant movants-intervenors’ motion for reconsideration of the July 20, 2010
Resolution, in full agreement with their position that their interest in this case arose only after they were elected to
their respective positions during the May 10, 2010 elections.
As stated by the ponente, in their motion for reconsideration of the May 12, 2010 Resolution, movants-intervenors
raised three main arguments: (1) that the passage of R.A. No. 9355 operates as an act of Congress amending
Section 461 of R.A. No. 7160 (the Local Government Code of 1991); (2) that the exemption from territorial contiguity,
when the intended province consists of two or more islands, includes the exemption from the application of the
minimum land area requirement; and (3) that the Operative Fact Doctrine is applicable in the instant case.
On the merits of the motion for intervention, the ponente urges the Court to take a hard and intent look at the first and
second arguments raised by movants-intervenors.
Movants-intervenors contended that R.A. No. 9355 is equivalent to the passage of an amendatory law to the Local
Government Code, as
instructed in the case of League of Cities of the Phils., et al. v. COMELEC, et al.: 6
Consistent with its plenary legislative power on the matter, Congress can, via either a consolidated set of laws or a
much simpler, single-subject enactment, impose the said verifiable criteria of viability. These criteria need not be
embodied in the local government code, albeit this code is the ideal repository to ensure, as much as possible, the
element of uniformity. Congress can even, after making a codification, enact an amendatory law, adding to the
existing layers of indicators earlier codified, just as efficaciously as it may reduce the same. In this case, the
amendatory RA 9009 upped the already codified income requirement from PhP 20 million to PhP 100 million. At the
end of the day, the passage of amendatory laws is no different from the enactment of laws, i.e., the cityhood laws
specifically exempting a particular political subdivision from the criteria earlier mentioned. Congress, in enacting the
exempting law/s, effectively decreased the already codified indicators. (Emphasis and [u]nderscoring supplied [by
movants-intervenors].)
Defining legislative power, movants-intervenors cited Yakazi Torres Manufacturing, Inc. v. Court of Appeals, 7 thus:
The legislative power has been described generally as the power to make, alter, and repeal laws. The authority to
amend, change, or modify a law is thus part of such legislative power. It is the peculiar province of the legislature to
prescribe general rules for the government of society. (Emphasis and [u]nderscoring supplied [by movants-
intervenors].)
In view of the foregoing, movants-intervenors argued that the Local Government Code is susceptible to all legislative
processes, including amendments, repeals or modifications. They asserted that there is no impediment for another
statute, including R.A. No. 9355, to amend or modify the Local Government Code as regards the criteria established
for the creation of a province. They noted that R.A. No 9355 relied on Article 9 (paragraph 2) of the Rules and
Regulations Implementing the Local Government Code of 1991, particularly the provision that "[t]he land area
requirement shall not apply where the proposed province is composed of one (1) or more islands." Movants-
intervenors asserted that the said provision should be deemed incorporated in R.A. No. 9355; hence, they purported
that the land area requirement in the Local Government Code was modified by R.A. No. 9355. They contended that
"R.A. No. 9355, with the incorporated Article 9 (2) of the IRR of the Local Government Code, became part of the
Local Government Code."
Movants-intervenors’ argument is unmeritorious. As cited in Yakazi Torres Manufacturing, Inc. v. Court of Appeals,
legislative power is the power to make, alter, and repeal laws; thus, the authority to amend, change, or modify a law
is part of such legislative power. However, in this case, R.A. No. 9355, is not a law amending the Local Government
Code on the criteria for the creation of a province. Instead, R.A. No. 9355 is a statute creating the Province of Dinagat
Islands; hence, subject to the constitutional provision on the creation of a province. The constitutional provision on the
creation of a province found in Section 10, Article X of the Constitution states:
SEC. 10. No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary
approval by a majority of the votes cast in a plebiscite in the political units directly affected. 8
Pursuant to the Constitution, the Local Government Code of 1991, in Section 461 thereof, prescribed the criteria for
the creation of a province.9 Hence, R.A. No. 9355 did not amend the Local Government Code, but was subject to the
criteria contained in Section 461 of the Local Government Code in creating the Province of Dinagat Islands.
Moreover, Section 6 of the Local Government Code provides:
SEC. 6. Authority to Create Local Government Units. – A local government unit may be created, divided, merged,
abolished, or its boundaries substantially altered either by law enacted by Congress in the case of a province, city,
municipality, or any other political subdivision, or by ordinance passed by the sangguniang panlalawigan or
sangguniang panlungsod concerned in the case of a barangay located within its territorial jurisdiction, subject to such
limitations and requirements prescribed in this Code. (Emphasis and underscoring supplied.)
Thus, even the Local Government Code clearly provides that Congress may enact a law creating a local government
unit, which in this case involves the creation of a province, but such creation is subject to such limitations and
requirements prescribed in the Local Government Code. Hence, the creation of the Province of Dinagat Islands is
subject to the requirements contained in Section 461 of the Local Government Code. Since R.A. No. 9355 failed to
comply with the land area or population requirement in the creation of the province, it was declared unconstitutional in
the Decision dated February 10, 2010.
League of Cities of the Philippines v. Commission on Elections, which was cited by movants-intervenors, does not
apply to this case. The Court held in its Resolution dated May 12, 2010, thus:
In League of Cities of the Philippines v. Commission on Elections, the Court held that the 16 cityhood laws, whose
validity were questioned therein, were constitutional mainly because it found that the said cityhood laws merely
carried out the intent of R.A. No. 9009, now Sec. 450 of the Local Government Code, to exempt therein respondents
local government units (LGUs) from the P100 million income requirement since the said LGUs had pending cityhood
bills long before the enactment of R.A. No. 9009. Each one of the 16 cityhood laws contained a provision exempting
the municipality covered from the P100 million income requirement.
In this case, R.A. No. 9355 was declared unconstitutional because there was utter failure to comply with either the
population or territorial requirement for the creation of a province under Section 461 of the Local Government Code.
Contrary to the contention of the movants-intervenors, Article 9 (2) of the Rules and Regulations Implementing the
Local Government Code, which exempts a proposed province from the land area requirement if it is composed of one
or more islands, cannot be deemed incorporated in R.A. No. 9355, because rules and regulations cannot go beyond
the terms and provisions of the basic law. Thus, in the Decision dated February 10, 2010, the Court held that Article 9
(2) of the Implementing Rules of the Local Government Code is null and void, because the exemption is not found in
Section 461 of the Local Government Code.10 There is no dispute that in case of discrepancy between the basic law
and the rules and regulations implementing the said law, the basic law prevails, because the rules and regulations
cannot go beyond the terms and provisions of the basic law. 11
Next, movants-intervenors stated that assuming that Section 461 of the Local Government Code was not amended
by R.A. No. 9355, they still sought reconsideration of the Resolution dated May 12, 2010, as they adopted the
interpretation of the ponente and Justice Perez of Section 461 of the Local Government Code in their respective
dissenting opinions. They asserted that the correct interpretation of Section 461 of the Local Government Code is that
of Justice Nachura.
It must be stressed that the movants-intervenors’ assertion was already answered in the Resolution dated May 12,
2010, denying the motions for reconsideration of the OSG and Governor Geraldine Ecleo-Villaroman, representing
the Province of Dinagat Islands. The Court, in the said Resolution, answered the same contention, thus:
The movants now argue that the correct interpretation of Sec. 461 of the Local Government Code is the one stated in
the Dissenting Opinion of Associate Justice Antonio B. Nachura.
In his Dissenting Opinion, Justice Nachura agrees that R.A. No. 9355 failed to comply with the population
requirement. However, he contends that the Province of Dinagat Islands did not fail to comply with the territorial
requirement because it is composed of a group of islands; hence, it is exempt from compliance not only with the
territorial contiguity requirement, but also with the 2,000-square- kilometer land area criterion in Sec. 461 of the Local
Government Code, which is reproduced for easy reference:
SEC. 461. Requisites for Creation. -- (a) A province may be created if it has an average annual income, as certified
by the Department of Finance, of not less than Twenty million pesos (P20,000,000.00) based on 1991 constant prices
(i) a contiguous territory of at least two thousand (2,000) square kilometers, as certified by the
National Statistics Office: Provided, That, the creation thereof shall not reduce the land area,
population, and income of the original unit or units at the time of said creation to less than the
minimum requirements prescribed herein.
(b) The territory need not be contiguous if it comprises two (2) or more islands or is separated by a chartered
city or cities which do not contribute to the income of the province.
funds, trust funds, transfers, and non-recurring income.
Justice Nachura contends that the stipulation in paragraph (b) qualifies not merely the word "contiguous" in
paragraph (a) (i) in the same provision, but rather the entirety of paragraph (a) (i) that reads:
(i) a contiguous territory of at least two thousand (2,000) square kilometers, as certified by the Lands Management
Bureau[.]
He argues that the whole paragraph on contiguity and land area in paragraph (a) (i) above is the one being referred
to in the exemption from the territorial requirement in paragraph (b). Thus, he contends that if the province to be
created is composed of islands, like the one in this case, then, its territory need not be contiguous and need not have
an area of at least 2,000 square kilometers. He asserts that this is because as the law is worded, contiguity and land
area are not two distinct and separate requirements, but they qualify each other. An exemption from one of the two
component requirements in paragraph (a) (i) allegedly necessitates an exemption from the other component
requirement because the non-attendance of one results in the absence of a reason for the other component
requirement to effect a qualification.
Similarly, the OSG contends that when paragraph (b) of Section 461 of the Local Government Code provides that the
"territory need not be contiguous if it comprises two (2) or more islands," it necessarily dispenses the 2,000 sq. km.
land area requirement, lest such exemption would not make sense. The OSG argues that in stating that a "territory
need not be contiguous if it comprises two (2) or more islands," the law could not have meant to define the obvious.
The land mass of two or more island will never be contiguous as it is covered by bodies of water. It is then but logical
that the territory of a proposed province that is composed of one or more islands need not be contiguous or be at
least 2,000 sq. km.
The Court is not persuaded.
Section 7, Chapter 2 (entitled General Powers and Attributes of Local Government Units) of the Local Government
Code provides:
SEC. 7. Creation and Conversion.—As a general rule, the creation of a local government unit or its conversion from
one level to another level shall be based on verifiable indicators of viability and projected capacity to provide services,
to wit:
(a) Income.—It must be sufficient, based on acceptable standards, to provide for all essential government
facilities and services and special functions commensurate with the size of its population, as expected of the
local government unit concerned;
(b) Population.—It shall be determined as the total number of inhabitants within the territorial jurisdiction of
the local government unit concerned; and
(c) Land area.—It must be contiguous, unless it comprises two (2) or more islands or is separated by a local
government unit independent of the others; properly identified by metes and bounds with technical
descriptions; and sufficient to provide for such basic services and facilities to meet the requirements of its
populace.
Compliance with the foregoing indicators shall be attested to by the Department of Finance (DOF), the National
Statistics Office (NSO), and the Lands Management Bureau (LMB) of the Department of Environment and Natural
Resources (DENR).
It must be emphasized that Section 7 above, which provides for the general rule in the creation of a local government
unit, states in paragraph ( c ) thereof that the land area must be contiguous and sufficient to provide for such basic
services and facilities to meet the requirements of its populace.
Therefore, there are two requirements for land area: (1) The land area must be contiguous; and (2) the land area
must be sufficient to provide for such basic services and facilities to meet the requirements of its populace. A
sufficient land area in the creation of a province is at least 2,000 square kilometers, as provided by Section 461 of the
Local Government Code.
Thus, Section 461 of the Local Government Code, providing the requisites for the creation of a province, specifically
states the requirement of "a contiguous territory of at least two thousand (2,000) square kilometers."
Hence, contrary to the arguments of both movants, the requirement of a contiguous territory and the requirement of a
land area of at least 2,000 square kilometers are distinct and separate requirements for land area under paragraph
(a) (i) of Section 461 and Section 7 (c) of the Local Government Code.
However, paragraph (b) of Section 461 provides two instances of exemption from the requirement of territorial
contiguity, thus:
(b) The territory need not be contiguous if it comprises two (2) or more islands or is separated by a chartered city or
cities which do not contribute to the income of the province.
Contrary to the contention of the movants, the exemption above pertains only to the requirement of territorial
contiguity. It clearly states that the requirement of territorial contiguity may be dispensed with in the case of a
province comprising two or more islands or is separated by a chartered city or cities which do not contribute to the
income of the province.
Nowhere in paragraph (b) is it expressly stated or may it be implied that when a province is composed of two or more
islands or when the territory of a province is separated by a chartered city or cities, such province need not comply
with the land area requirement of at least 2,000 square kilometers or the requirement in paragraph (a) (i) of Section
461of the Local Government Code.
Where the law is free from ambiguity, the court may not introduce exceptions or conditions where none is provided
from considerations of convenience, public welfare, or for any laudable purpose; neither may it engraft into the law
qualifications not contemplated, nor construe its provisions by taking into account questions of expediency, good
faith, practical utility and other similar reasons so as to relax non-compliance therewith. Where the law speaks in
clear and categorical language, there is no room for interpretation, but only for application. 1avvphi1
Further, movants-intervenors pointed out that pursuant to R.A. No. 9355, the Province of Dinagat Islands has been
organized and is functioning as a province, which cannot just be ignored. Thus, a more realistic and pragmatic view
should have been adopted by the Court in its Resolution
dated May 12, 2010 following the Operative Fact Doctrine, citing Planters Products, Inc. v. Fertiphil Corporation.12
In Planters Products, Inc. v. Fertiphil Corporation, petitioner Planters Products, Inc. (PPI) and private respondent
Fertiphil were private corporations, which were both engaged in the importation and distribution of fertilizers,
pesticides and agricultural chemicals. On June 3, 1985, then President Ferdinand Marcos issued LOI No. 1465,
which provides:
3. The Administrator of the Fertilizer Pesticide Authority to include in its fertilizer pricing formula a capital contribution
component of not less than ₱10 per bag. This capital contribution shall be collected until adequate capital is raised to
make PPI viable. Such capital contribution shall be applied by FPA to all domestic sales of fertilizers in the
Philippines. (Underscoring supplied)
Pursuant to the LOI, Fertiphil paid ₱10.00 for every bag of fertilizer it sold in the domestic market to the Fertilizer and
Pesticide Authority (FPA), which amount FPA remitted to the depositary bank of PPI. Fertiphil paid FPA
₱6,689,144.00 from July 8, 1985 to January 24, 1986.
After the 1986 EDSA Revolution, FPA voluntarily stopped the imposition of the ₱10.00 levy. Fertiphil demanded from
PPI a refund of the amounts it paid under LOI No. 1465, but PPI refused to accede to the demand. Fertiphil filed a
complaint for collection and damages against FPA and PPI with the Regional Trial Court (RTC) of Makati City. It
questioned the constitutionality of LOI No. 1465 for being unjust, unreasonable, oppressive, invalid and an unlawful
imposition that amounted to a denial of due process of law. Fertiphil alleged that the LOI solely favored PPI, a
privately owned corporation, which used the proceeds to maintain its monopoly of the fertilizer industry.
The RTC ruled in favor of Fertiphil, and ordered PPI to pay Fertiphil the sum of ₱6,698,144.00 with interest at 12%
from the time of judicial demand; the sum of ₱100,000.00 as attorney’s fees; and the cost of suit. Ruling that the
imposition of the ₱10.00 levy was an exercise of the State’s inherent power of taxation, the RTC invalidated the levy
for violating the basic principle that taxes can only be levied for public purpose. On appeal, the Court of Appeals
affirmed the RTC Decision, but deleted the award of attorney’s fees.
The Court upheld the decision of the Court of Appeals as LOI No. 1465 failed to comply with the public purpose
requirement for tax laws. As regards the argument of PPI that Fertiphil cannot seek a refund based on the Operative
Fact Doctrine, the Court held:
The general rule is that an unconstitutional law is void; the doctrine of operative fact is inapplicable.
PPI also argues that Fertiphil cannot seek a refund even if LOI No. 1465 is declared unconstitutional. It banks on the
doctrine of operative fact, which provides that an unconstitutional law has an effect before being declared
unconstitutional. PPI wants to retain the levies paid under LOI No. 1465 even if it is subsequently declared to be
unconstitutional.
We cannot agree. It is settled that no question, issue or argument will be entertained on appeal, unless it has been
raised in the court a quo. PPI did not raise the applicability of the doctrine of operative fact with the RTC and the CA.
It cannot belatedly raise the issue with Us in order to extricate itself from the dire effects of an unconstitutional law.
At any rate, We find the doctrine inapplicable. The general rule is that an unconstitutional law is void. It produces no
rights, imposes no duties and affords no protection. It has no legal effect. It is, in legal contemplation, inoperative as if
it has not been passed. Being void, Fertiphil is not required to pay the levy. All levies paid should be refunded in
accordance with the general civil code principle against unjust enrichment. The general rule is supported by Article 7
of the Civil Code, which provides:
ART. 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not be excused by
disuse or custom or practice to the contrary.
When the courts declare a law to be inconsistent with the Constitution, the former shall be void and the latter shall
govern.
The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity and fair play. It
nullifies the effects of an unconstitutional law by recognizing that the existence of a statute prior to a determination of
unconstitutionality is an operative fact and may have consequences which cannot always be ignored. The past
cannot always be erased by a new judicial declaration.
The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on those who have
relied on the invalid law. Thus, it was applied to a criminal case when a declaration of unconstitutionality would put
the accused in double jeopardy or would put in limbo the acts done by a municipality in reliance upon a law creating
it.
Here, We do not find anything iniquitous in ordering PPI to refund the amounts paid by Fertiphil under LOI No. 1465.
It unduly benefited from the levy. It was proven during the trial that the levies paid were remitted and deposited to its
bank account. Quite the reverse, it would be inequitable and unjust not to order a refund. To do so would unjustly
enrich PPI at the expense of Fertiphil. Article 22 of the Civil Code explicitly provides that "every person who, through
an act of performance by another comes into possession of something at the expense of the latter without just or
legal ground shall return the same to him." We cannot allow PPI to profit from an unconstitutional law. Justice and
equity dictate that PPI must refund the amounts paid by Fertiphil. 13
In this case, the general rule applies that an unconstitutional law is void, and produces no legal effect. As stated in
the decision above, the doctrine of operative fact, as an exception to the general rule, only applies as a matter of
equity and fair play. The said doctrine recognizes that the actual existence of a statute prior to a determination of
unconstitutionality is an operative fact, and may have consequences which cannot always be ignored. The doctrine
was applied to a criminal case when a declaration of unconstitutionality would put the accused in double jeopardy 14or
would put in limbo the acts done by a municipality in reliance upon a law creating it in the case of Municipality of
Malabang v. Benito.15
In Municipality of Malabang v. Benito, the Court ruled that Executive Order 386 creating the Municipality of Malabang
is void, and respondent officials were permanently restrained from performing the duties and functions of their
respective offices. Nevertheless, the Court stated there was no basis for respondent officials’ apprehension that the
invalidation of the executive order creating Balabagan would have the effect of unsettling many an act done in
reliance upon the validity of the creation of that municipality, citing Chicot County Drainage District v. Baxter State
Bank, thus:16
x x x The actual existence of a statute, prior to such a determination, is an operative fact and may have
consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The
effect of the subsequent ruling as to invalidity may have to be considered in various aspects – with respect to
particular relations, individual and corporate, and particular conduct, private and official. Questions of rights claimed
to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of
public policy in the light of the nature both of the statute and of its previous application, demand examination. These
questions are among the most difficult of those which have engaged the attention of courts, state and federal, and it
is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity
cannot be justified.17
Therefore, based on the foregoing, any question on the validity of acts done before the invalidation of R.A. No. 9355
may be raised before the courts.
Lastly, movants-intervenors contended that the inhabitants of the Province of Dinagat Islands have expressed their
will, through their votes in a plebiscite, to be a province; hence, the Court should uphold the will of the people and
uphold the validity of R.A. No. 9355.
The contention does not persuade. The validity of R.A. No. 9355 creating the province of Dinagat Islands depends on
its compliance with Section 10, Article X of the Constitution, which states:
SEC. 10. No province, city, municipality, or barangay may be created, divided, merged, abolished, or its boundary
approval by a majority of the votes cast in a plebiscite in the political units directly affected.18
Although the political units directly affected by the creation of the Province of Dinagat Islands approved the creation
of the said province, R.A. No. 9355 failed to comply with the criteria for the creation of the province contained in
Section 461 of the Local Government Code; hence, it was declared unconstitutional.
As cited in the Resolution dated May 12, 2010, Tan v. Comelec19 held:
x x x [T]he fact that such plebiscite had been held and a new province proclaimed and its officials appointed, the case
before Us cannot truly be viewed as already moot and academic. Continuation of the existence of this newly
proclaimed province which petitioners strongly profess to have been illegally born, deserves to be inquired into by this
Tribunal so that, if indeed, illegality attaches to its creation, the commission of that error should not provide the very
excuse for perpetuation of such wrong. For this court to yield to the respondents’ urging that, as there has been fait
accompli, then this Court should passively accept and accede to the prevailing situation is an unacceptable
suggestion. Dismissal of the instant petition, as respondents so propose is a proposition fraught with mischief.
Respondents’ submission will create a dangerous precedent. Should this Court decline now to perform its duty of
interpreting and indicating what the law is and should be, this might tempt again those who strut about in the corridors
of power to recklessly and with ulterior motives, create, merge, divide and/or alter the boundaries of political
subdivisions, either brazenly or stealthily, confident that this Court will abstain from entertaining future challenges to
their acts if they manage to bring about a fait accompli.
In view of the foregoing, the Court acted in accordance with its sound discretion in denying movants-intervenors’
Motion for Leave to Intervene and to File and to Admit Intervenors’ Motion for Reconsideration of the Resolution
dated May 12, 2010 as the issues raised by them lacked merit or had already been resolved by the Court in its
Decision dated February 10, 2010 and its Resolution dated May 12, 2010 denying respondents’ Motion for
Reconsideration. Moreover, under Section 2, Rule 19 of the Rules of Court, a motion to intervene may be filed at any
time before rendition of judgment by the trial court. Since this case originated from an original action filed before this
Court, the Court properly ruled that the appropriate time to file the motion-in-intervention is before and not after
resolution of this case, citing Republic v. Gingoyon. 20 Further, when movants-intervenors filed their Motion for Leave
to Intervene and to File and to Admit Intervenors’ Motion for Reconsideration of the Resolution dated May 12, 2010
on June 18, 2010, the Decision of February 10, 2010 had already become final and executory on May 18, 2010.
Aside from urging the Court to take a hard look on the first and second arguments raised by movants-intervenors, the
ponente also wants the Court to consider his arguments for a reconsideration of the Decision in this case.
The ponente states that the Court must bear in mind that the central policy considerations in the creation of local
government units are economic viability, efficient administration and capability to deliver basic services, and the
criteria prescribed by the Local Government Code, i.e., income, population and land area, are all designed to
accomplish these results. He adds that in this light, Congress, in its collective wisdom, has debated on the relative
weight of each of these three criteria, placing emphasis on which of them should enjoy preferential consideration. The
ponente calls the attention of the majority to the primordial criterion of economic viability in the creation of local
government units, particularly of a province, as intended by the framers of R.A. No. 7160.
The argument of the ponente has been discussed in his earlier Dissenting Opinion. It must be pointed out that from
the congressional debates cited by the ponente, the framers of R.A. No. 7160 or the Local Government Code of 1991
finally came out with the end result, that is, Section 461 of R.A. No. 7160, which is the basis for the creation of a
province. Section 461 of R.A. No. 7160 provides:
SEC. 461. Requisites for Creation. -- (a) A province may be created if it has an average annual income, as certified
by the Department of Finance, of not less than Twenty million pesos (P20,000,000.00) based on 1991 constant prices
Provided, That, the creation thereof shall not reduce the land area, population, and income of the original
unit or units at the time of said creation to less than the minimum requirements prescribed herein.
funds, trust funds, transfers, and non-recurring income.
Thus, the requisites for the creation of a province, as provided by R.A. No. 7160, is an annual income of not less than
₱20 million and either a contiguous territory of at least two thousand (2,000) square kilometers, as certified by the
Lands Management Bureau, or a population of not less than two hundred fifty thousand (250,000) inhabitants as
certified by the National Statistics Office. As the wordings of the law are plain and clear, compliance with the territorial
requirement or population requirement cannot be made light of or disregarded.
In this case, R.A. 9355 creating the Province of Dinagat Islands failed to comply with either the territorial or the
population requirement of the Local Government Code. The Court stated in its Resolution dated May 12, 2010, thus:
As the law-making branch of the government, indeed, it was the Legislature that imposed the criteria for the creation
of a province as contained in Sec. 461 of the Local Government Code. No law has yet been passed amending Sec.
461 of the Local Government Code, so only the criteria stated therein are the bases for the creation of a province.
The Constitution clearly mandates that the criteria in the Local Government Code must be followed in the creation of
a province; hence, any derogation of or deviation from the criteria prescribed in the Local Government Code violates
Section 10, Art. X of the Constitution.
Further, the ponente states that the provisions of both R.A. No 7160 and the Rules and Regulations Implementing the
Local Government Code of 1991 (LGC-IRR) show that with respect to the creation of municipalities, component
cities, and provinces, the three indicators of viability and projected capacity to provide services, i.e., income,
population, and land area, are provided for. He points out that the exemption from the land area requirement when
the local government unit to be created consists of one (1) or more islands is expressly provided in Section 442 and
Section 450 of R.A. No. 7160 and the LGC-IRR with respect to the creation of municipalities and component cities,
respectively, but the exemption is absent in the enumeration of the requisites for the creation of a province under
Section 461 of R.A. No. 7160, but is expressly stated under Article 9 (2) of the LGC-IRR.
The ponente opines that there does not appear any rhyme or reason why this exemption should apply to cities and
municipalities, but not to provinces. He stated that considering the physical configuration of the Philippine
archipelago, there is a greater likelihood that islands or groups of islands would form part of the land area of a newly-
created province than in most cities or municipalities. According to the ponente, it is, therefore, logical to infer that the
genuine legislative policy decision was expressed in Section 442 (for municipalities) and Section 450 (for cities) of
R.A. No. 7160, but was inadvertently omitted in Section 461 (for provinces).
The ponente submits that when the exemption was expressly provided in Article 9(2) of the LGC-IRR, the inclusion
was intended to correct the congressional oversight in Section 461 of R.A. No. 7160 -- and reflect the true legislative
intent; thus, it would be in order for the Court to uphold the validity of Article 9(2), LGC-IRR.
The ponente also submits that Article 9(2) of the LGC-IRR amounts to an executive construction of the provisions,
policies, and principles of R.A. No. 7160, entitled to great weight and respect. He contends that it is actually a detail
expressly provided by the Oversight Committee to fill in the void, honest mistake and oversight committed by
Congress in Section 461 of R.A. No. 7160, taking into account the spirit and intent of the law.
The ponente’s argument does not persuade. The Local Government Code took effect on January 1, 1992, so 19
years have lapsed since its enactment. If the Legislature committed the "congressional oversight in Section 461 of
R.A. No. 7160" as alleged by Justice Nachura, it would have amended Section 461, which is a function of Congress.
Substantial "oversights" in the basic law, particularly as alleged with respect to Section 461 of R.A. No. 7160, cannot
be corrected in the implementing rules thereof, as it is settled rule that the implementing rules of the basic law cannot
go beyond the scope of the basic law. 1aw phi 1
Moreover, it should be pointed out that a province is "composed of a cluster of municipalities, or municipalities and
component cities,"21 and, therefore, has a bigger land area than that of a municipality and a city, as provided by law. It
is noted that the former Local Government Code (Batas Pambansa Blg. 337) did not provide for a required land area
in the creation of a municipality and a city, but provided for a required land area in the creation of a province, which is
3,500 square kilometers, now lessened to 2,000 square kilometers in the present Local Government Code. If only the
income matters in the creation of a province, then there would be no need for the distinctions in the population and
land area requirements provided for a municipality, city and province in the present Local Government Code. It may
be stated that unlike a municipality and a city, the territorial requirement of a province contained in Section 461 22 of
the Local Government Code follows the general rule in Section 7, Chapter 2 (entitled General Powers and Attributes
of Local Government Units) of the same Code, thus:
SEC. 7. Creation and Conversion.—As a general rule, the creation of a local government unit or its conversion from
one level to another level shall be based on verifiable indicators of viability and projected capacity to provide services,
to wit:
(a) Income.—It must be sufficient, based on acceptable standards, to provide for all essential government
facilities and services and special functions commensurate with the size of its population, as expected of the
local government unit concerned;
(b) Population.—It shall be determined as the total number of inhabitants within the territorial jurisdiction of
the local government unit concerned; and
(c) Land area.—It must be contiguous, unless it comprises two (2) or more islands or is separated by a local
government unit independent of the others; properly identified by metes and bounds with technical
descriptions; and sufficient to provide for such basic services and facilities to meet the requirements of its
populace.
Compliance with the foregoing indicators shall be attested to by the Department of Finance (DOF), the National
Statistics Office (NSO), and the Lands Management Bureau (LMB) of the Department of Environment and Natural
Resources (DENR).23
Moreover, the argument that Article 9(2) of the LGC-IRR amounts to an executive construction of the provisions,
policies, and principles of R.A. No. 7160, entitled to great weight and respect, citing the case of Galarosa v.
Valencia,24 has already been ruled upon in the Decision dated February 10, 2010, thus:
Further, citing Galarosa v. Valencia, the Office of the Solicitor General contends that the IRRs issued by the
Oversight Committee composed of members of the legislative and executive branches of the government are entitled
to great weight and respect, as they are in the nature of executive construction.
The case is not in point. In Galarosa, the issue was whether or not Galarosa could continue to serve as a member of
the Sangguniang Bayan beyond June 30, 1992, the date when the term of office of the elective members of
the Sangguniang Bayan of Sorsogon expired. Galarosa was the incumbent president of the Katipunang Bayan or
Association of Barangay Councils (ABC) of the Municipality of Sorsogon, Province of Sorsogon; and was appointed
as a member of the Sangguniang Bayan (SB) of Sorsogon pursuant to Executive Order No. 342 in relation to Section
146 of Batas Pambansa Blg. 337, the former Local Government Code.
Section 494 of the Local Government Code of 1991 states that the duly elected presidents of the liga [ng mga
barangay] at the municipal, city and provincial levels, including the component cities and municipalities of
Metropolitan Manila, shall serve as ex officio members of the sangguniang bayan, sangguniang panglungsod, and
sangguniang panlalawigan, respectively. They shall serve as such only during their term of office as presidents of
the liga chapters which, in no case, shall be beyond the term of office of the sanggunian concerned. The section,
however, does not fix the specific duration of their term as liga president. The Court held that this was left to the by-
laws of the liga pursuant to Article 211(g) of the Rules and Regulations Implementing the Local Government Code of
1991. Moreover, there was no indication that Sections 491 and 494 should be given retroactive effect to adversely
affect the presidents of the ABC; hence, the said provisions were to be applied prospectively.
The Court stated that there is no law that prohibits ABC presidents from holding over as members of
the Sangguniang Bayan. On the contrary, the IRR, prepared and issued by the Oversight Committee upon specific
mandate of Section 533 of the Local Government Code, expressly recognizes and grants the hold-over authority to
the ABC presidents under Article 210, Rule XXIX. The Court upheld the application of the hold-over doctrine in the
provisions of the IRR and the issuances of the DILG, whose purpose was to prevent a hiatus in the government
pending the time when the successor may be chosen and inducted into office.
The Court held that Section 494 of the Local Government Code could not have been intended to allow a gap in the
representation of the barangays, through the presidents of the ABC, in the sanggunian. Since the term of office of
the punong barangays elected in the March 28, 1989 election and the term of office of the presidents of the ABC had
not yet expired, and taking into account the special role conferred upon, and the broader powers and functions vested
in the barangays by the Code, it was inferred that the Code never intended to deprive the barangays of their
representation in the sangguniang bayan during the interregnum when the liga had yet to be formally organized with
the election of its officers.
Under the circumstances prevailing in Galarosa, the Court considered the relevant provisions in the IRR formulated
by the Oversight Committee and the pertinent issuances of the DILG in the nature of executive construction, which
were entitled to great weight and respect.
Courts determine the intent of the law from the literal language of the law within the law’s four corners. If the language
of the law is plain, clear and unambiguous, courts simply apply the law according to its express terms. If a literal
application of the law results in absurdity, impossibility or injustice, then courts may resort to extrinsic aids of statutory
construction like the legislative history of the law, or may consider the implementing rules and regulations and
pertinent executive issuances in the nature of executive construction.
In this case, the requirements for the creation of a province contained in Section 461 of the Local Government Code
are clear, plain and unambiguous, and its literal application does not result in absurdity or injustice. Hence, the
provision in Article 9(2) of the IRR exempting a proposed province composed of one or more islands from the land-
area requirement cannot be considered an executive construction of the criteria prescribed by the Local Government
Code. It is an extraneous provision not intended by the Local Government Code, and is, therefore, null and void.
The ponente also stated that it may be well to remember basic policy considerations underpinning the principle of
local autonomy, and cited Section 2, R.A. No 7160, which provides:
Sec. 2. Declaration of Policy. - (a) It is hereby declared the policy of the State that the territorial and political
subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to attain their fullest
development as self-reliant communities and make them more effective partners in the attainment of national goals.
Toward this end, the State shall provide for a more responsive and accountable local government structure instituted
through a system of decentralization whereby local government units shall be given more powers, authority,
responsibilities, and resources. The process of decentralization shall proceed from the National Government to the
local government units.
Indeed, the policy of the State is that "the territorial and political subdivisions of the State shall enjoy genuine and
meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make
them more effective partners in the attainment of national goals."
However, it must stressed that in the creation of the territorial and political subdivisions of the State, the requirements
provided by the Local Government Code must also be complied with, which R.A. No. 9355 failed to do.
Further, the ponente states that consistent with the declared policy to provide local government units local autonomy,
he submits that the territory, contiguity and minimum land area requirements for prospective local government units
should be construed liberally in order to achieve the desired results. He adds that this liberal interpretation is more
appropriate, taking into account the rules on construction of the LGC, viz:
SEC. 5. Rules of Interpretation. - In the interpretation of the provisions of this Code, the following rules shall apply:
xxxx
(c) The general welfare provisions in this Code shall be liberally interpreted to give more powers to local government
units in accelerating economic development and upgrading the quality of life for the people in the community;
The ponente seeks for a liberal interpretation as regards the territorial requirement in the creation of a province based
on the rules of interpretation of the general welfare provisions of the Local Government Code. General welfare is
clarified in Section 16 of the Local Government Code, thus:
Sec. 16. General Welfare.—Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment
of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support
the development of appropriate and self-reliant scientific and technological capabilities, improve public morals,
enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and
order, and preserve the comfort and convenience of their inhabitants.
The Local Government Code provides that it is "[t]he general welfare provisions in this Code which shall be liberally
interpreted to give more powers to local government units in accelerating economic development and upgrading the
quality of life for the people in the community." Nowhere is it stated therein that the provisions for the creation of a
local government unit, the province in particular, should be liberally interpreted. Moreover, since the criteria for the
creation of a province under the Local Government Code are clear, there is no room for interpretation, but only
application.
To reiterate, the constitutional basis for the creation of a province is laid down in Section 10, Article X of the
Constitution, which provides that no province may be created, divided, merged, abolished, or its boundary
substantially altered, except in accordance with the criteria established in the Local Government Code and subject to
approval by a majority of the votes cast in a plebiscite in the political units directly affected. The criteria for the
creation of a province are found in Section 461 of the Local Government Code. Moreover, Section 6 of the Local
Government Code provides that "[a] local government unit may be created xxx by law enacted by congress in the
case of a province xxx subject to such limitations and requirements prescribed in this Code."
Based on the criteria for the creation of a province provided for in Section 461 of the Local Government, the Court
found that R.A. No. 9355 creating the Province of Dinagat Islands failed to comply with the population or territorial
requirement; hence, R.A. No. 9355 was declared unconstitutional.
The Decision in this case was promulgated on February 10, 2010. The motions for reconsideration of the Decision
was denied on May 12, 2010. The Decision of February 10, 2010 became final and executory on May 18, 2010, as
evidenced by the Entry of Judgment25 issued by the Clerk of Court. Movants-intervenors filed their Motion for Leave to
Intervene and to File and to Admit Intervenors’ Motion for Reconsideration of the Resolution dated May 12, 201 only
on June 18, 2010, or after the resolution of the case and one month after the Decision in this case already became
final and executory. Hence, the Court properly denied the said motion.
The ponente contends that there is an imperative to grant the Urgent Motion to Recall Entry of Judgment filed on
October 29, 2010 by movants-intervenors for the simple reason that the Entry of Judgment was prematurely issued
on October 5, 2010 in view of the pendency of the movants-intervenor’s motion for reconsideration of the July 20,
2010 Resolution, which was filed on September 7, 2010.
I cannot agree with such contention. Although Entry of Judgment was made on October 5, 2010, it must be borne in
mind that the Decision in this case became final and executory on May 18, 2010, as evidenced by the Entry of
Judgment26 issued by the Clerk of Court. If the Court follows Section 2, Rule 36 of the Rules of Court, the date of
finality of the judgment is deemed to be the date of its entry, thus:
Sec. 2. Entry of judgments and final orders.—If no appeal or motion for new trial or reconsideration is filed within the
time provided in these Rules, the judgment or final order shall forthwith be entered by the clerk in the book of entries
of judgments. The date of finality of the judgment or final order shall be deemed to be the date of its entry. The record
shall contain the dispositive part of the judgment or final order and shall be signed by the clerk, with a certificate that
such judgment of final order has become final and executory.
The amendment in Section 2 above makes finality and entry simultaneous by operation of law, and eliminates the
confusion and guesswork whenever the parties could not have access, for one reason or another, to the Book of
Entries of Judgments.27 It also avoids the usual problem where the physical act of writing out the entry is delayed by
neglect or sloth.28
In addition, the Court properly denied on July 20, 2010 the movants-intervenors’ Motion for Leave to Intervene and to
File and to Admit Intervenors’ Motion for Reconsideration of the Resolution dated May 12, 2010, since it was filed
after the resolution of the case and after the Decision in this case had become final and executory on May 18, 2010.
With the denial of the Motion for Leave to Intervene and to File and to Admit Intervenors’ Motion for Reconsideration
of the Resolution dated May 12, 2010, the movants-intervenors’ did not have legal standing to intervene; hence, their
motion for reconsideration of the July 20, 2010 Resolution has no bearing on the validity of the Entry of Judgment that
was recorded in the Book of Entries of Judgments on October 5, 2010. Therefore, the Entry of Judgment cannot be
recalled on the ground of pendency of the movants-intervenor’s motion for reconsideration of the July 20, 2010
Resolution.
Since movants-intervenors’ Motion for Leave to Intervene and to File and to Admit Intervenors’ Motion for
Reconsideration of the Resolution dated May 12, 2010 was denied in the Resolution dated July 20, 2010, the motion
for reconsideration of the July 20, 2010 Resolution filed on September 7, 2010 by movants-intervenors was
recommended to also be denied, but has yet to be acted on by the Court.
Further, on October 22, 2010, respondent New Province of Dinagat Islands, represented by Governor Geraldine
Ecleo-Villaroman, filed an Urgent Omnibus Motion (To resolve Motion for Leave of Court to Admit Second Motion for
Reconsideration and, to set aside Entry of Judgment). Respondent admitted that it filed the Motion for Leave of Court
to Admit Second Motion for Reconsideration on May 26, 2010, twelve (12) days after receipt of the Resolution dated
May 12, 2010 denying respondents’ motion for reconsideration.
It should be pointed out that the Court has acted on respondent New Province of Dinagat Islands’ Motion for Leave of
Court to Admit Second Motion for Reconsideration and the aforesaid Motion for Reconsideration, which were filed on
May 26, 2010 (after the Decision had become final and executory on May 18, 2010), in the Court’s Resolution dated
June 26, 2010. Treated as a second motion for reconsideration of the Decision, which is disallowed, the Court
resolved to note without action the said motions in view of the Resolution dated May 12, 2010 denying the motions for
reconsideration of the February 10, 2010 Decision. Section 2, Rule 52 of the Rules of Court states:
SEC. 2. Second motion for reconsideration.—No second motion for reconsideration of a judgment or final resolution
As the decision in this case became final and executory on May 18, 2010, the decision is unalterable. In Gomez v.
1avvphi 1
Correa,29 the Court held:
It is settled that when a final judgment is executory, it becomes immutable and unalterable. The judgment may no
longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous
conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it
or by the highest Court of the land. The doctrine is founded on considerations of public policy and sound practice that,
at the risk of occasional errors, judgments must become final at some definite point in time.
The only recognized exceptions are the correction of clerical errors or the making of so-called nunc pro tunc entries in
which case there is no prejudice to any party, and where the judgment is void.
To stress, the motion for reconsideration filed by movants-intervenors on the denial of the motion for internvention
should have been denied since to grant the same would be tantamount to reopening a case which is already final.
Worse, movants-intervenors are not even original parties to the present case and therefore are not in a position to file
a motion to recall a judgment which is already final and executory.
In view of the foregoing, I maintain that the movants-intervenors’ Motion for Leave to Intervene and to File and to
Admit Intervenors’ Motion for Reconsideration of the Resolution dated May 12, 2010, which was filed only on June
18, 2010 or after resolution of the case and after the Decision of February 10, 2010 had become final and executory
on May 18, 2010, was properly denied in the Resolution dated July 20, 2010. Consequently, I maintain my stand that
movants-intervenor’s Motion for Reconsideration of the Resolution dated July 20, 2010, which motion was filed on
September 7, 2010, be denied for lack of merit. Further, it is recommended that movants-intervenors’ Urgent Motion
to Recall Entry of Judgment filed on October 29, 2010, and the Omnibus Motion (To resolve Motion for Leave of
Court to Admit Second Motion for Reconsideration and to set aside Entry of Judgment) filed on October 22, 2010 by
respondent New Province of Dinagat Islands, represented by Governor Geraldine Ecleo-Villaroman, be likewise
denied for lack of merit.
DIOSDADO M. PERALTA
Associate Justice
Footnotes
1 Rollo, p. 1202.
2Based on the results of the May 10, 2010 elections, movant Congressman Francisco T. Matugas is the
Congressman-Elect of the First Legislative District of Surigao del Norte; movants Hon. Sol T. Matugas and
Hon. Arturo Carlos A. Egay, Jr. are the Governor-Elect and Vice-Governor-Elect, respectively, of the
Province of Surigao del Norte; while movants Hon. Simeon Vicente G. Castrence, Hon. Mamerto D.
Galanida, Hon. Margarito M. Longos, and Hon. Cesar M. Bagundol are the Board Members-Elect of the First
Provincial District of Surigao del Norte.
3
Entitled IN THE MATTER OF THE EFFECT OF THE DECISION OF THE SUPREME COURT IN THE
CASE OF "RODOLFO G. NAVARRO, ET. AL, vs. EXECUTIVE SECRETARY EDUARDO ERMITA
representing the President of the Philippines, ET. AL" (G.R. No. 180050), DECLARING THE CREATION OF
THE PROVINCE OF DINAGAT ISLANDS AS UNCONSTITUTIONAL THEREBY REVERTING SAID
PROVINCE TO ITS PREVIOUS STATUS AS PART OF THE PROVINCE OF SURIGAO DEL NORTE.
4 Citing Heirs of Geronimo Restrivera v. De Guzman, G.R. No. 146540, July 14, 2004, 434 SCRA 456.
5
G.R. No. 166429, February 1, 2006, 481 SCRA 457.
6 G.R. Nos. 176951, 177499, 178056, December 21, 2009, 608 SCRA 636.
7 G.R. No. 130584, June 27, 2006, 493 SCRA 86, 97.
8 Emphasis supplied.
9SEC. 461. Requisites for Creation. -- (a) A province may be created if it has an average annual income, as
certified by the Department of Finance, of not less than Twenty million pesos (₱20,000,000.00) based on
1991 constant prices and either of the following requisites:
herein.
special funds, trust funds, transfers, and non-recurring income. (Emphasis supplied.)
For comparison, Section 461 of the Local Government Code of 1991 and Article 9 of the Rules and
10
Regulations Implementing the Local Government Code of 1991 are reproduced:
The Local Government Code
SEC. 461. Requisites for Creation. -- (a) A province may be created if it has an average annual
income, as certified by the Department of Finance, of not less than Twenty million pesos
(₱20,000,000.00) based on 1991 constant prices and either of the following requisites:
herein.
Rules and Regulations Implementing the Local Government Code of 1991
ART. 9. Provinces.—(a) Requisites for creation—A province shall not be created unless the
following requisites on income and either population or land area are present:
(1) Income — An average annual income of not less than Twenty Million Pesos
(₱20,000,000.00) for the immediately preceding two (2) consecutive years based on 1991
constant prices, as certified by DOF. The average annual income shall include the income
accruing to the general fund, exclusive of special funds, special accounts, transfers, and
nonrecurring income; and
(2) Population or land area - Population which shall not be less than two hundred fifty
thousand (250,000) inhabitants, as certified by National Statistics Office; or land area
which must be contiguous with an area of at least two thousand (2,000) square kilometers,
as certified by LMB. The territory need not be contiguous if it comprises two (2) or more
islands or is separated by a chartered city or cities which do not contribute to the income
of the province. The land area requirement shall not apply where the proposed province is
composed of one (1) or more islands. The territorial jurisdiction of a province sought to be
created shall be properly identified by metes and bounds. (Emphasis supplied.)
11 Hijo Plantation, Inc. v. Central Bank, G.R. No. L-34526, August 9, 1988, 164 SCRA 192.
12
G.R. No. 166006, March 14, 2008, 548 SCRA 485.
13
Emphasis supplied.
14 Tan v. Barrios, G.R. Nos. 85481-82, October 18, 1990, 190 SCRA 686.
15 No. L-28113, March 28, 1969.
16 308 U.S. 371, 374 (1940).
17
Municipality of Malabang v. Benito, supra note 15, p. 540.
18
Emphasis supplied.
19 No. L-73155, July 11, 1986, 142 SCRA 727, 741-742.
20 G.R. No. 166429, February 1, 2006, 481 SCRA 457.
21 Section 459, The Local Government Code of 1991.
22SEC. 461. Requisites for Creation. -- (a) A province may be created if it has an average annual income, as
certified by the Department of Finance, of not less than Twenty million pesos (P20,000,000.00) based on
1991 constant prices and either of the following requisites:
herein.
23 Emphasis supplied.
24
G.R. No. 109455, November 11, 1993, 227 SCRA 728.
25 Rollo, p. 1202.
26 Id. at 1202.
27 Florenz D. Regalado, Remedial Law Compendium, Vol. I, Eight Revised Edition, © 2002, p. 381.
28 Id.
29 G.R. No. 153923, October 2, 2009, 602 SCRA 40, 46-47.
CONCURRING OPINION
DEL CASTILLO, J.:
Great cases, like hard cases, make bad law. For great cases are called great not by reason of their real importance in
shaping the law of the future, but because of some accident of immediate overwhelming interest which appeals to the
feelings and distorts the judgment. These immediate interests exercise a kind of hydraulic pressure which makes
what previously was clear seem doubtful, and before which even well settled principles of law will bend.
Justice Oliver Wendell Holmes
Northern Securities Co. v. United States 1
On the abstract principles which govern courts in construing legislative acts, no difference of opinion can exist. It is
only in the application of those principles that the difference discovers itself.
Chief Justice John Marshall
United States v. Fisher2
Considering the circumstances which supervened after the promulgation of the Decision on February 10, 2010 and
Resolution dated May 12, 2010, I find myself reconsidering my previous position. Mr. Justice Antonio Eduardo B.
Nachura has himself identified factors not previously considered by this Court, which, in my view, warrant a reversal
of our previous rulings.
The case before us concerns the proper interpretation of Section 461 of Republic Act (RA) No. 7160, also known as
the Local Government Code (LGC), which prescribes the criteria for the creation of a province as follows:
SEC. 461. Requisites for Creation. – (a) A province may be created if it has an average annual income, as certified
by the Department of Finance, of not less than Twenty million pesos (₱20,000,000.00) based on 1991 constant prices
(i) a contiguous territory of at least two thousand (2,000) square kilometers as certified by the
Provided, That, the creation thereof shall not reduce the land area, population, and income of the original
unit or units at the time of said creation to less than the minimum requirements prescribed herein.
funds, trust funds, transfers, and non-recurring income.3 (Underscoring supplied)
To implement the provisions of the LGC, the Oversight Committee (created pursuant to Sec. 533 of the LGC)
formulated the Implementing Rules and Regulations to carry out the provisions of the law. Article 9 of said Rules and
Regulations provides:
Art. 9 Provinces – (a) Requisites for Creation. – A province shall not be created unless the following requisites on
income and either population or land area are present:
(i) Income - An average annual income of not less than Twenty million pesos (₱20,000,000.00) for the
immediately preceding two (2) consecutive years based on 1991 constant prices, as certified by the DOF.
The average annual income shall include the income accruing to the general fund, exclusive of special
funds, special accounts, transfers, and non-recurring income; and
(ii) Population or land area – Population shall not be less than two hundred fifty thousand (250,000)
inhabitants, as certified by NSO; or land area which must be contiguous with an area of at least two
thousand (2,000) square kilometers, as certified by LMB. The territory need not be contiguous if it comprises
two (2) or more islands or is separated by a chartered city or cities which do not contribute to the income of
the province. The land area requirement shall not apply where the proposed province is composed of one
(1) or more islands. The territorial jurisdiction of a province sought to be created shall be properly identified
by metes and bounds.
Since our May 12, 2010 ruling (which denied respondents’ respective Motions for Reconsideration), the Office of the
Solicitor General (representing the Republic of the Philippines) and Gov. Geraldine Ecleo Villaroman (representing
the new Province of the Dinagat Islands), each sought leave to file a Second Motion for Reconsideration on May 27,
2010 and May 26, 2010, respectively, which motions were noted without action. The winning candidates for provincial
and congressional seats in Surigao del Norte also sought to intervene in this case; however, their motion for
intervention was denied on July 20, 2010.
Subsequent to the Motions for Reconsideration, Justice Nachura has taken pains to compare the requisites for the
creation of the different local government units (LGUs) in order to highlight what, in my view, is a glaring
inconsistency in the provisions of the law. To summarize:
LGU Land Area Requirement

Barangay No minimum land area requirement. Rather, the barangay
must be created out of a contiguous territory with a
population of at least two thousand (2,000) inhabitants [Sec.
386(a), LGC]
The territory need not be contiguous if it comprises two (2)

or more islands. [Sec. 386(b), LGC]
Municipality Contiguous territory of at least fifty (50) square kilometers
Note – the land area requirement is IN ADDITION to the

income requirement of at least Two Million Five Hundred
Thousand Pesos (PhP2,500,000.00) in average annual
income for the last 2 consecutive years AND the population
requirement of at least Twenty Five Thousand (25,000)
inhabitants. [Sec. 442(a), LGC]
The requirement on land area shall not apply where the

municipality proposed to be created is composed of one (1)
or more islands. The territory need not be contiguous if it
comprises two (2) or more islands. [Sec. 442(b), LGC]
City Contiguous territory of at least one hundred (100) square
kilometers
Note – a city must have an average annual income of at

least Twenty Million Pesos (PhP20,000,000.00) for the last
2 consecutive years AND comply with either the land area
requirement OR have a population of at least one hundred
fifty thousand (150,000) inhabitants. [Sec. 450(a), LGC]
The requirement on land area shall not apply where the city
proposed to be created is composed of one (1) or more
islands. The territory need not be contiguous if it comprises
two (2) or more islands. [Sec 450(b), LGC]
Province Contiguous territory of at least two thousand (2,000) square
kilometers.
Note – a province must have an average annual income of

at least Twenty Million Pesos (PhP20,000,000.00) AND
comply with either the land area requirement OR have a
population of at least two hundred fifty thousand (250,000)
inhabitants. [Sec. 461(a), LGC]
The territory need not be contiguous if it comprises two (2)

or more islands or is separated by a chartered city or cities
which do not contribute to the income of the province. [Sec
461(b), LGC]
As Justice Nachura points out, as regards the creation of barangays, land area is not included as a requirement.
However, a minimum land area is provided for the creation of municipalities, cities, and provinces. Furthermore, while
an exemption4 is provided for municipalities and cities in cases where the LGU concerned is composed of one or
more islands, in stark contrast, no such exemption exists with respect to provinces.
It is not difficult to see why no exemption is needed for barangays – why exempt them from a requirement that does
not even apply to them? In fact, the inclusion of the clause "[t]he territory need not be contiguous if it comprises two
(2) or more islands" in Sec. 386(b) of the LGC appears to be surplusage. But I cannot see why there would be a
difference in treatment between cities and municipalities, on one hand, and provinces, on the other. In fact, as Justice
Nachura points out, this may lead to anomalous results. This leads me to conclude that Justice Nachura’s
interpretation is indeed correct – that the legislature fully intended to exempt LGUs from the land area requirement in
cases where the LGU concerned encompassed two or more islands, as provided in Section 442 (for municipalities)
and Section 450 (for cities), but this legislative policy was not carried over to Section 461 (for provinces).
Consequently, Article 9(2) of the LGC’s Implementing Rules and Regulations were precisely enacted in order to
correct the congressional oversight.
Our esteemed colleague, Mr. Justice Diosdado M. Peralta, suggests that this interpretation is implausible because
even if there were any such oversight, Congress had every opportunity in the last 19 years to correct its mistake. To
this I would only observe that Congress has never, in the last 19 years, been faced with a situation where an
amendment to Section 461 of the LGC was necessary or desirable, and no case concerning the land area
requirement for provinces has ever been brought before this Court since the LGC’s enactment.5 The only case that
has mentioned the land area requirement for provinces, Tan v. Commission on Elections, 6 (regarding the invalidation
of Batas Pambansa Bilang 885 which created the province of Negros Del Norte) dealt with the matter only
tangentially, at best.7
Justice Peralta also opines that there is no need to search for the legislative intent, since the language of the law is
plain, clear, and unambiguous. I would submit, however, that it is equally true that the statute must be read as a
whole, that its clauses and phrases are not detached and isolated expressions, but that each and every part must be
considered in order to ascertain its meaning.8
Therefore, the statute, read as a whole, in the light of its legislative history, cannot be said to preclude the
interpretation placed on it by the majority. But in interpreting a statute [such as the Local Government Code], we
cannot take one sentence, one section, or even the entire statute alone and say that it has a "plain meaning" as if
there were an objective formula in the few words simply waiting to be grasped by the courts. Instead the statute must
be read as a whole, taking all of its provisions and reading them in the context of the legal fabric to which they are to
be applied. An interpretation that creates an admittedly anomalous result is not salved by the majority's apologia that,
if we read the statute in that fashion, Congress created the anomaly. Instead the question is whether the statute read
as a whole was intended by Congress to create such results. The law is not an isolated bundle of capricious and
inconsistent commands by a legislature presumed to react mindlessly.9
It is also relevant that the Senate and the House of Representatives, represented by the Office of the Solicitor
General, have asserted that Congress intended that provinces composed of one or more islands should be exempted
from the 2,000 sq. km. land area requirement. Surely, the legislature’s will in this case should be given deference, as
a co-equal branch of government operating within its area of constitutional authority.
I also cannot help but note that the Dinagat Islands is not the first small island-province which has been separated
from a larger province through legislative imprimatur. The Court may take judicial notice of the fact that the island-
provinces of Batanes (previously annexed to Cagayan),10 Camiguin (previously a sub-province of Misamis
Oriental),11 Siquijor (previously a sub-province of Negros Oriental),12 Biliran (previously a sub-province of
Leyte),13Guimaras (previously a sub-province of Iloilo),14 and Marinduque (previously annexed to Tayabas) 15 also
have land areas of well below 1,000 square kilometers each.
To be clear, I am not making an equal protection argument, since none of these provinces were created under the
auspices of the LGC. I only point this out to show that Congress, in drafting the LGC, was cognizant of the special
circumstances surrounding the creation of island-provinces, and evidently intended that economic development be a
more significant consideration than size. The Congressional deliberations bear this out:
CHAIRMAN Will you look at the case of – how many municipalities are there in
LINA: Batanes province?
CHAIRMAN Batanes is only six.
ALFELOR:
CHAIRMAN Six town. Siquijor?
LINA:
CHAIRMAN Siquijor. It is region?
ALFELOR:
CHAIRMAN Seven.
LINA:
CHAIRMAN Seven. Anim.
ALFELOR:
CHAIRMAN Six also.
LINA:
CHAIRMAN Six also.
ALFELOR:
CHAIRMAN It seems with a minimum number of towns?
LINA:
CHAIRMAN The population of Siquijor is only 70 thousand, not even one
ALFELOR: congressional district. But tumaas in 1982. Camiguin, that is Region 9.
Wala dito. Nagtataka nga ako ngayon.
CHAIRMAN Camiguin, Camiguin.
LINA:
CHAIRMAN That is region? Camiguin has five municipalities, with a population of 63
ALFELOR: thousand. But we do not hold it against the province because maybe
that’s one stimulant where growth can grow, can start. The land area for
Camiguin is only 229 square kilometers. So if we hard fast on
requirements of, we set a minimum for every province, palagay ko we
just leave it to legislation, eh. Anyway, the Constitution is very clear that
in case we would like to divide, we submit it to a plebiscite. Pabayaan
natin ang tao. Kung maglalagay tayo ng set ng minimum, tila yata
mahihirapan tayo eh. Because what is really the thrust of the Local
Government Code? Growth. To devolve powers in order for the
community to have its own idea how they will stimulate growth in their
respective areas.
So in every geographical condition, mayroong sariling idiosyncrasies eh.

We cannot make a generalization.16
Though this Court certainly has the authority to override the legislative interpretation, I do not believe it is appropriate
or necessary in this instance. Rather, we should acknowledge the "strong presumption that a legislature understands
and correctly appreciates the needs of its own people [and] that its laws are directed to problems made manifest by
experience."17
I do not propose that the Court overturn its settled precedent to the effect that Implementing Rules and Regulations
cannot go beyond the terms of the statute. But under these limited circumstances – where a reading of the entire law
reveals inconsistencies which this Court must reconcile, where the legislature has informed the Court of its intentions
in drafting the law, and where the legislative history of the LGC leads one to the inescapable conclusion that the
primary consideration in the creation of provinces is actually administrative convenience, economic viability, and
capacity for development - then it would be far more just to give effect to the will of the legislature in this case.
In the words of Mr. Justice Isagani Cruz:
But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its purposes. It is a
cardinal rule that, in seeking the meaning of the law, the first concern of the judge should be to discover in its
provisions the intent of the lawmaker. Unquestionably, the law should never be interpreted in such a way as to cause
injustice as this is never within the legislative intent. An indispensable part of that intent, in fact, for we presume the
good motives of the legislature, is to render justice.
Thus, we interpret and apply the law not independently of but in consonance with justice. Law and justice are
inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid, may seem
arbitrary when applied in a particular case because of its peculiar circumstances. In such a situation, we are not
bound, because only of our nature and functions, to apply them just the same, in slavish obedience to their language.
What we do instead is find a balance between the word and the will, that justice may be done even as the law is
obeyed.
As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded, yielding like
robots to the literal command without regard to its cause and consequence. "Courts are apt to err by sticking too
closely to the words of a law," so we are warned, by Justice Holmes again, "where these words import a policy that
goes beyond them." While we admittedly may not legislate, we nevertheless have the power to interpret the law in
such a way as to reflect the will of the legislature. While we may not read into the law a purpose that is not there, we
nevertheless have the right to read out of it the reason for its enactment. In doing so, we defer not to "the letter that
killeth" but to "the spirit that vivifieth," to give effect to the law maker's will.
The spirit, rather than the letter of a statute determines its construction, hence, a statute must be read according to its
spirit or intent. For what is within the spirit is within the letter but although it is not within the letter thereof, and that
which is within the letter but not within the spirit is not within the statute. Stated differently, a thing which is within the
intent of the lawmaker is as much within the statute as if within the letter; and a thing which is within the letter of the
statute is not within the statute unless within the intent of the lawmakers.18
For these reasons, I thus concur in the opinion of Justice Nachura.
MARIANO C. DEL CASTILLO

Associate Justice
Footnotes
1 193 U.S. 197, 400-411 (1904) (Holmes, J. dissenting).
2
6 U.S. 358 (1805).
3 Article X, Section 10 of the Constitution also provides that "[n]o province, city, municipality, or barangay
may be created, divided, merged, abolished or its boundary substantially altered, except in accordance with
the criteria established in the local government code and subject to approval by a majority of the votes cast
in a plebiscite in the political units directly affected."
4That "[t]he requirement on land area shall not apply where the city proposed to be created is composed of
one (1) or more islands."
5Since the effectivity of the Local Government Code on January 11, 1992, no issue has been raised
concerning the land area requirement of provinces. The following provinces have been successfully created
since 1992 – Biliran, Guimaras, Saranggani, Kalinga, Apayao, Compostela Valley, and Zamboanga
Sibugay, and all of them had land areas of more than 2,000 sq. km. each.
Biliran and Guimaras (previously subprovinces of Leyte and Iloilo, respectively) were converted into
regular provinces, pursuant to Sec. 462 of the Local Government Code. Sec. 462 provides:
SEC. 462. Existing Sub-Provinces. - Existing subprovinces are hereby converted into regular
provinces upon approval by a majority of the votes cast in a plebiscite to be held in the said
subprovinces and the original provinces directly affected. The plebiscite shall be conducted by the
Comelec simultaneously with the national elections following the effectivity of this Code.
Saranggani was separated from South Cotabato in accordance with Republic Act No. 7228, An Act
Creating The Province Of Sarangani (1992). It has a land area of 3,972 sq. km.
(http://www.sarangani.gov.ph/seventowns.php).
Kalinga-Apayao was separated into the provinces of Kalinga and Apayao by virtue of Republic Act
No. 7878, An Act Converting The Sub-Provinces Of Kalinga And Apayao Into Regular Provinces To
Be Known As The Province Of Kalinga And The Province Of Apayao, Amending For The Purpose
Republic Act No. 4695 (1995). Kalinga has a land area of 3,164.3 sq. km.
(http://www.nscb.gov.ph/rucar/fnf_kalinga.htm) while Apayao has a land area of 4,120 sq. km.
(http://www.nscb.gov.ph/rucar/fnf_apayao.htm)
Compostela Valley was separated from Davao by virtue of Republic Act No. 8470, An Act Creating
The Province Of Compostela Valley From The Province Of Davao Del Norte, And For Other
Purposes (1998), and has a land area of 4,667 sq. km.
(http://www.nscb.gov.ph/ru11/prov_profile/comval.htm).
Zamboanga Sibugay was separated from Zamboanga del Sur by virtue of Republic Act No. 8973,
An Act Creating The Province Of Zamboanga Sibugay From The Province Of Zamboanga Del Sur
And For Other Purposes (2000). It has a land area of 3,362.22 sq. km.
(http://www.zamboanga.com/zs/).
6 226 Phil. 624 (1986).
7
Tan v. Commission on Elections did not directly discuss the requirement of land area under Batas
Pambansa Bilang 337, but rather, concerned the proper construction of the "unit or units affected" for a
plebiscite. However, the Court did state that the "territory" in Section 197 of Batas Pambansa Bilang 337
was intended to apply to land area only.
8Philippine International Trading Corporation v. Commission on Audit, G.R. No. 183517, June 22, 2010,
citing Land Bank of the Philippines v. AMS Farming Corporation, G.R. No. 174971, October 15, 2008, 569
SCRA 154, 183, Mactan-Cebu International Airport Authority v. Urgello, G.R. No. 162288, April 4, 2007, 520
SCRA 515, 535, and Smart Communications, Inc. v. The City of Davao, G.R. No. 155491, September 16,
2008, 565 SCRA 237, 247-248.
9United States v Acres of Land Situated in Grenada and Yalobusha Counties Mississippi Jg [1983] USCA5
583; 704 F.2d 800; 20 ERC 1025 (12 May 1983).
10Act No. 1952, An Act to Provide for the Establishment of the Province of Batanes; to Amend Paragraph
Seven of Section Sixty Eight of Act Numbered Eleven Hundred Eighty Nine in Certain Particulars; to
Authorize the Approval of the Governor-General to extend the Time for the Payment without Penalty and
Taxes and Licenses; to Amend Section Five of Act Numbered Fifteen Hundred and Eighty Two entitled the
"Election Law" by Increasing the Number of Delegates to the Philippine Assembly to Eighty One, and for
other Purposes (1909).
Republic Act No. 4669, An Act Separating the Subprovince of Camiguin from the Province of Misamis
11
Oriental and Establishing it as an Independent Province (1966).
Republic Act No. 6398, An Act Separating the Subprovince of Siquijor from the Province of Oriental
12
Negros and Establishing it as an Independent Province (1971).
13 Sec. 462 of the Local Government Code.
14
Id.
15
Act No. 2880, An Act Authorizing the Separation of the Subprovince of Marinduque from the Province of
Tayabas and the Reestablishment of the Former Province of Marinduque, and for other Purposes (1920).
16Bicameral Conference Committee on Local Government (Book III), March 13, 1991, pp. 18-28, in FN 14 of
Justice Nachura’s Reflections.
Enron Corp. v. Spring Independent School District, 922 S.W. 2d 931; Middleton v. Texas Power & Light
17
Co. (1919), 249 U.S. 152, at 157.
18 Alonzo v. Intermediate Appellate Court, 234 Phil. 267, 272-273 (1987).

CONCURRING OPINION
ABAD, J.:
I fully concur in the resolution that Justice Antonio Eduardo Nachura wrote for the majority. I would want, however, to
reply briefly to the somewhat harsh criticism hurled against the Court in connection with its action.
The Court is accused of "flip-flopping" in this case as in the others before it, specifically the case of the sixteen
municipalities that Congress converted into cities. Since the Court is a collegial body, the implication is that its
members or the majority collectively flip-flopped in their decisions.
But, as I said in my concurring opinion in the Court’s April 12, 2011 resolution in the League of Cities case, 1 the
charge is unfair, as it is baseless. The Court is not a living person whose decisions and actions are ruled by the
whims of one mind. As a collegial body, the Court acts by consensus among its fifteen members.
In the League of Cities,2 neither all the Justices nor most of them did a somersault as implicitly suggested. Congress
passed a number of laws converting sixteen municipalities into cities. The League of Cities assailed these laws as
unconstitutional on the ground that the sixteen municipalities involved did not meet the P100 million minimum income
requirement of the Local Government Code. For their part, the municipalities countered that their laws constituted
valid legislative amendments of such requirement.
The Court originally voted in the case on November 18, 2008. A majority of six Justices voted to annul the laws, five
members dissented, and four took no part (6-5-4). The lead of those who voted to annul the laws firmed up with an
increase of 2 votes when the Court took up the motion for reconsideration of the sixteen municipalities on March 31,
2009. The vote was 7-5-2.
But when on April 28, 2009 the Court acted on the sixteen municipalities’ second motion for reconsideration, the vote
resulted in a tie, 6-6-3. The Court was divided in its interpretation of this 6-6 result. One group argued that the failure
of the minority to muster a majority vote had the effect of maintaining the Court’s last ruling. Some argued, however,
that since the Constitution required a majority vote for declaring laws passed by Congress unconstitutional, the new
voting restored the constitutionality of the subject laws. When a re-voting took place on December 21, 2009 to clear
up the issue, the result shifted in favor of upholding the constitutionality of the laws of the sixteen municipalities, 6-4-3
(2 vacancies), with the new majority voting to uphold the constitutionality of the laws that converted the sixteen
municipalities into cities.
But when the Court voted on the motion for reconsideration of the losing League of Cities on August 24, 2010, the
majority shifted anew on a vote of 7-6-2. The sixteen municipalities filed a motion for reconsideration of the new
decision and voting took place on February 15, 2011, resulting in a vote of 7-6-2 in favor of again upholding the
constitutionality of the laws of the sixteen municipalities.
To repeat what I said in my concurring opinion in the League of Cities, 3 those who say that the Court, acting through
its members, flipped-flopped in the League of Cities case should consider the following:
One. The Justices did not on each occasion simply decide to change their minds. There were pending motions for
reconsideration in the case and the Justices had a duty to vote on them on the dates the matters came up for
decision.
The Court is no orchestra with its members playing one tune under the baton of a maestro. They bring with them a
diversity of views, which is what the Constitution prizes, for it is this diversity that filters out blind or dictated
conformity.
Two. Of twenty-three Justices who voted in the case at any of its various stages, twenty stood by their original
positions. They never reconsidered their views. Only three did so and not on the same occasion, showing no
wholesale change of votes at any time.
Three. To flip-flop means to vote for one proposition at first (take a stand), shift to the opposite proposition upon the
second vote (flip), and revert to his first position upon the third (flop). Not one of the twenty-three Justices flipped-
flopped.
Four. The three Justices who changed their votes did not do so in one direction. Justice Velasco changed his vote
from a vote to annul to a vote to uphold; Justice Villarama from a vote to uphold to a vote to annul; and Justice
Mendoza from a vote to annul to a vote to uphold. None of them flipped-flopped since the three never changed their
votes afterwards.
Notably, no one can dispute the right of a judge, acting on a motion for reconsideration that the losing party files, to
change his mind regarding the case. The rules are cognizant of the fact that human judges could err and that it would
merely be fair and right for them to correct their perceived errors upon a motion for reconsideration. Even God, who
had decided to destroy the Israelites for worshipping a golden calf, reconsidered after Moses stood in the gap for
them.4
Five. Evidently, the voting in the League of Cities is not a case of massive flip-flopping by the Justices of the Court.
Rather, it is a case of tiny shifts in the votes, occasioned by the consistently slender margin that one view held over
the other. This reflected the nearly even soundness of the opposing advocacies of the contending sides.
Six. It did not help that in one year alone in 2009, seven Justices retired and were replaced by an equal number. It is
such that the resulting change in the combinations of minds produced multiple shifts in the outcomes of the voting. No
law or rule requires succeeding Justices to adopt the views of their predecessors. Indeed, preordained conformity is
anathema to a democratic system.
In this Dinagat Islands case the vote changed when, acting on the intervention of a third party with genuine interest in
the outcome of the case, the majority in the Court was persuaded to change its mind and uphold the act of Congress
in creating the province. The previous voting was too close and it took the vote of just two Justices, changing their
previous positions, to ensnare the victory from those who oppose the conversion of the Dinagat Islands into a
province.
Neither the Court nor its Justices flip-flopped in this case. They did not take one position, later moved to the opposite
position, and then reverted to the first. They merely exercised their right to reconsider an erroneous ruling.
The charge of flip-flopping is unfair.
ROBERTO A. ABAD
Associate Justice
Footnotes
1 G.R, 176951, League of Cities, et al., vs. Commission on Elections, et al., April 12, 2011,
2 Supra.
3 Supra.
4 Exodus 32:7-14
EN BANC
G.R. No. 203974 April 22, 2014
AURELIO M. UMALI, Petitioner,

vs.
COMMISSION ON ELECTIONS, JULIUS CESAR V. VERGARA, and THE CITY GOVERNMENT OF
CABANATUAN, Respondents.
x-----------------------x
G.R. No. 204371
J.V. BAUTISTA, Petitioner,

vs.
COMMISSION ON ELECTIONS, Respondent.
DECISION
VELASCO, JR., J.:
Before the Court is the consolidated case for Petition for Certiorari and Prohibition with prayer for injunctive relief, docket as
G.R. No. 203974, assailing Minute Resolution No. 12-07971 and Minute Resolution No. 12-09252 dated September 11, 2012
and October 16, 2012, respectively, both promulgated by public respondent Commission on Elections (COMELEC), and
Petition for Mandamus, docketed G.R. No. 204371, seeking to compel public respondent to implement the same.
The Facts
On July 11, 2011, the Sangguniang Panglungsod of Cabanatuan City passed Resolution No. 183-2011, requesting the
President to declare the conversion of Cabanatuan City from a component city of the province of Nueva Ecija into a highly
urbanized city (HUC). Acceding to the request, the President issued Presidential Proclamation No. 418, Series of 2012,
proclaiming the City of Cabanatuan as an HUC subject to "ratification in a plebiscite by the qualified voters therein, as
provided for in Section 453 of the Local Government Code of 1991."
Respondent COMELEC, acting on the proclamation, issued the assailed Minute Resolution No. 12-0797 which reads:
WHEREFORE, the Commission RESOLVED, as it hereby RESOLVES, that for purposes of the plebiscite for the conversion
of Cabanatuan City from component city to highly-urbanized city, only those registered residents of Cabanatuan City should
participate in the said plebiscite.
The COMELEC based this resolution on Sec. 453 of the Local Government Code of 1991 (LGC), citing conversion cases
involving Puerto Princesa City in Palawan, Tacloban City in Southern Leyte, and Lapu-Lapu City in Cebu, where only the
residents of the city proposed to be converted were allowed to vote in the corresponding plebiscite.
In due time, petitioner Aurelio M. Umali, Governor of Nueva Ecija, filed a Verified Motion for Reconsideration, maintaining
that the proposed conversion in question will necessarily and directly affect the mother province of Nueva Ecija. His main
argument is that Section 453 of the LGC should be interpreted in conjunction with Sec. 10, Art. X of the Constitution. He
argues that while the conversion in question does not involve the creation of a new or the dissolution of an existing city, the
spirit of the Constitutional provision calls for the people of the local government unit (LGU) directly affected to vote in a
plebiscite whenever there is a material change in their rights and responsibilities. The phrase "qualified voters therein" used
in Sec. 453 of the LGC should then be interpreted to refer to the qualified voters of the units directly affected by the
conversion and not just those in the component city proposed to be upgraded. Petitioner Umali justified his position by
enumerating the various adverse effects of the Cabanatuan City’s conversion and how it will cause material change not only
in the political and economic rights of the city and its residents but also of the province as a whole.
To the Verified Motion for Reconsideration, private respondent Julius Cesar Vergara, city mayor of Cabanatuan, interposed
an opposition on the ground that Sec. 10, Art. X does not apply to conversions, which is the meat of the matter. He likewise
argues that a specific provision of the LGC, Sec. 453, as couched, allows only the qualified voters of Cabanatuan City to
vote in the plebiscite. Lastly, private respondent pointed out that when Santiago City was converted in 1994 from a
municipality to an independent component city pursuant to Republic Act No. (RA) 7720, the plebiscite held was limited to the
registered voters of the then municipality of Santiago.
Following a hearing conducted on October 4, 2012, 3 the COMELEC En Banc on October 16, 2012, in E.M No. 12-045
(PLEB), by a vote of 5-24 ruled in favor of respondent Vergara through the assailed Minute Resolution 12-0925. The
dispositive portion reads:
The Commission, taking into consideration the arguments of counsels including the Reply-memorandum of Oppositor, after
due deliberation, RESOLVED, as it hereby RESOLVES, as follows:
1) To DENY the Motion for Reconsideration of oppositor Governor Aurelio M. Umali; and
2) To SCHEDULE the conduct of Plebiscite for the conversion of Cabanatuan City from component city into highly-
urbanized city with registered residents only of Cabanatuan City to participate in said plebiscite.
Let the Deputy Executive Director for Operations implement this resolution.
SO ORDERED.
Hence, the Petition for Certiorari with prayer for injunctive relief, docketed as G.R. No. 203974, on substantially the same
arguments earlier taken by petitioner Umali before the poll body. On the other hand, public respondent COMELEC, through
the Office of the Solicitor General, maintained in its Comment that Cabanatuan City is merely being converted from a
component city into an HUC and that the political unit directly affected by the conversion will only be the city itself. It argues
that in this instance, no political unit will be created, merged with another, or will be removed from another LGU, and that no
boundaries will be altered. The conversion would merely reinforce the powers and prerogatives already being exercised by
the city, with the political unit’s probable elevation to that of an HUC as demanded by its compliance with the criteria
established under the LGC. Thus, the participation of the voters of the entire province in the plebiscite will not be necessary.
Private respondent will later manifest that it is adopting the Comment of the COMELEC.
Meanwhile, on October 25, 2012, respondent COMELEC promulgated Resolution No. 9543, which adopted a calendar of
activities and periods of prohibited acts in connection with the conversion of Cabanatuan City into an HUC. The Resolution
set the conduct of the plebiscite on December 1, 2012. Thereafter, a certain Dr. Rodolfo B. Punzalan filed a Petition for
Declaratory Relief which was raffled to the Regional Trial Court (RTC), Branch 40 in Palayan City. In the said case,
Punzalan prayed that Minute Resolution No. 12-0797 be declared unconstitutional, that the trial court decree that all
qualified voters of the province of Nueva Ecija be included in the plebiscite, and that a Temporary Restraining Order (TRO)
be issued enjoining public respondent from implementing the questioned resolution. On October 19, 2012, the RTC granted
the prayer for a TRO.
On November 6, 2012, public respondent through Minute Resolution No. 12-0989 suspended the preparations for the event
in view of the TRO issued by the RTC. On November 27, 2012, the plebiscite was once again rescheduled to give way to
the May 13, 2013 national, local and ARMM regional elections as per Resolution No. 9563.
After this development, petitioner J.V. Bautista, on December 3, 2012, filed a case before this Court for Mandamus,
docketed as G.R. No. 204371, praying that public respondent be ordered to schedule the plebiscite either on December 15
or 22, 2012. Petitioner Bautista argued that since the TRO issued by the RTC has already expired, the duty of the public
respondent to hold the plebiscite has become mandatory and ministerial. Petitioner Bautista also alleged that the delay in
holding the plebiscite is inexcusable given the requirement that it should be held within a period of 120 days form the date of
the President’s declaration.
In its Comment to the Bautista petition, public respondent justified its position by arguing that mandamus will not issue to
enforce a right which is in substantial dispute. With all the legal conflicts surrounding the case, it cannot be said that there is
a clear showing of petitioner Bautista’s entitlement to the relief sought. Respondent COMELEC likewise relied on Sec. 5 of
the Omnibus Election Code to justify the postponements, citing incidents of violence that ensued in the locality during the
plebiscite period.
After the conclusion of the 2013 elections, public respondent issued Resolution No. 1353 scheduling the plebiscite to
January 25, 2014. However, a TRO was issued by this Court on January 15, 2014 in G.R. No. 203974 to suspend the
conduct of the plebiscite for Cabanatuan City’s conversion. Given the intertwining factual milieu of the two petitions before
the Court, both cases were consolidated on March 18, 2014.
The Issue
The bone of contention in the present controversy boils down to whether the qualified registered voters of the entire province
of Nueva Ecija or only those in Cabanatuan City can participate in the plebiscite called for the conversion of Cabanatuan
City from a component city into an HUC.
Resolving the Petition for Certiorari either way will necessarily render the Petition for Mandamus moot and academic for
ultimately, the public respondent will be ordered to hold the plebiscite. The only variation will be as regards its participants.
The Court’s Ruling
The Petition for Certiorari is meritorious.
Sec. 453 of the LGC should be interpreted in accordance with Sec. 10, Art. X of the Constitution
Petitioner Umali asseverates that Sec. 10, Art. X of the Constitution should be the basis for determining the qualified voters
who will participate in the plebiscite to resolve the issue. Sec. 10, Art. X reads:
Section 10, Article X. – No province, city, municipality, or barangay may be created, divided, merged, abolished, or its
boundary substantially altered, except in accordance with the criteria established in the local government code and subject
to approval by a majority of the votes cast in a plebiscite in the political units directly affected. (emphasis supplied)
Petitioner Umali elucidates that the phrase "political units directly affected" necessarily encompasses not only Cabanatuan
City but the entire province of Nueva Ecija. Hence, all the registered voters in the province are qualified to cast their votes in
resolving the proposed conversion of Cabanatuan City.
On the other hand, respondents invoke Sec. 453 of the LGC to support their claim that only the City of Cabanatuan should
be allowed to take part in the voting. Sec. 453 states:
Section 453. Duty to Declare Highly Urbanized Status. – It shall be the duty of the President to declare a city as highly
urbanized within thirty (30) days after it shall have met the minimum requirements prescribed in the immediately preceding
Section, upon proper application therefor and ratification in a plebiscite by the qualified voters therein. (emphasis supplied)
Respondents take the phrase "registered voters therein" in Sec. 453 as referring only to the registered voters in the city
being converted, excluding in the process the voters in the remaining towns and cities of Nueva Ecija.
Before proceeding to unravel the seeming conflict between the two provisions, it is but proper that we ascertain first the
relationship between Sec. 10, Art. X of the Constitution and Sec. 453 of the LGC.
First of all, we have to restate the general principle that legislative power cannot be delegated. Nonetheless, the general rule
barring delegation is subject to certain exceptions allowed in the Constitution, namely:
(1) Delegation by Congress to the President of the power to fix "tariff rates, import and export quotas, tonnage and
wharfage dues, and other duties or imposts within the framework of the national development program of the
Government" under Section 28(2) of Article VI of the Constitution; and
(2) Delegation of emergency powers by Congress to the President "to exercise powers necessary and proper to
carry out a declared national policy" in times of war and other national emergency under Section 23(2) of Article VI
of the Constitution.
The power to create, divide, merge, abolish or substantially alter boundaries of provinces, cities, municipalities or barangays,
which is pertinent in the case at bar, is essentially legislative in nature. 5 The framers of the Constitution have, however,
allowed for the delegation of such power in Sec. 10, Art. X of the Constitution as long as (1) the criteria prescribed in the
LGC is met and (2) the creation, division, merger, abolition or the substantial alteration of the boundaries is subject to the
approval by a majority vote in a plebiscite.
True enough, Congress delegated such power to the Sangguniang Panlalawigan or Sangguniang Panlungsod to create
barangays pursuant to Sec. 6 of the LGC, which provides:
Section 6. Authority to Create Local Government Units. - A local government unit may be created, divided, merged,
abolished, or its boundaries substantially altered either by law enacted by Congress in the case of a province, city,
municipality, or any other political subdivision, or by ordinance passed by the sangguniang panlalawigan or sangguniang
panlungsod concerned in the case of a barangay located within its territorial jurisdiction, subject to such limitations and
requirements prescribed in this Code." (emphasis supplied)
The guidelines for the exercise of this authority have sufficiently been outlined by the various LGC provisions detailing the
requirements for the creation of barangays 6, municipalities7, cities8, and provinces9. Moreover, compliance with the plebiscite
requirement under the Constitution has also been directed by the LGC under its Sec. 10, which reads:
Section 10. Plebiscite Requirement. – No creation, division, merger, abolition, or substantial alteration of boundaries of local
government units shall take effect unless approved by a majority of the votes cast in a plebiscite called for the purpose in the
political unit or units directly affected." (emphasis supplied)
With the twin criteria of standard and plebiscite satisfied, the delegation to LGUs of the power to create, divide, merge,
abolish or substantially alter boundaries has become a recognized exception to the doctrine of non-delegation of legislative
powers.
Likewise, legislative power was delegated to the President under Sec. 453 of the LGC quoted earlier, which states:
Section 453. Duty to Declare Highly Urbanized Status. – It shall be the duty of the President to declare a city as highly
urbanized within thirty (30) days after it shall have met the minimum requirements prescribed in the immediately preceding
Section, upon proper application therefor and ratification in a plebiscite by the qualified voters therein.
In this case, the provision merely authorized the President to make a determination on whether or not the requirements
under Sec. 45210 of the LGC are complied with. The provision makes it ministerial for the President, upon proper application,
to declare a component city as highly urbanized once the minimum requirements, which are based on certifiable and
measurable indices under Sec. 452, are satisfied. The mandatory language "shall" used in the provision leaves the
President with no room for discretion.
In so doing, Sec. 453, in effect, automatically calls for the conduct of a plebiscite for purposes of conversions once the
requirements are met. No further legislation is necessary before the city proposed to be converted becomes eligible to
become an HUC through ratification, as the basis for the delegation of the legislative authority is the very LGC.
In view of the foregoing considerations, the Court concludes that the source of the delegation of power to the LGUs under
Sec. 6 of the LGC and to the President under Sec. 453 of the same code is none other than Sec. 10, Art. X of the
Constitution.
Respondents, however, posit that Sec. 453 of the LGC is actually outside the ambit of Sec. 10, Art. X of the Constitution,
considering that the conversion of a component city to an HUC is not "creation, division, merge, abolition or substantial
alternation of boundaries" encompassed by the said constitutional provision.
This proposition is bereft of merit.
First, the Court’s pronouncement in Miranda vs. Aguirre11 is apropos and may be applied by analogy. While Miranda involves
the downgrading, instead of upgrading, as here, of an independent component city into a component city, its application to
the case at bar is nonetheless material in ascertaining the proper treatment of conversions. In that seminal case, the Court
held that the downgrading of an independent component city into a component city comes within the purview of Sec. 10, Art.
X of the Constitution.
In Miranda, the rationale behind the afore-quoted constitutional provision and its application to cases of conversion were
discussed thusly:
A close analysis of the said constitutional provision will reveal that the creation, division, merger, abolition or substantial
alteration of boundaries of local government units involve a common denominator - - - material change in the political and
economic rights of the local government units directly affected as well as the people therein. It is precisely for this reason
that the Constitution requires the approval of the people "in the political units directly affected." It is not difficult to appreciate
the rationale of this constitutional requirement. The 1987 Constitution, more than any of our previous Constitutions, gave
more reality to the sovereignty of our people for it was borne out of the people power in the 1986 EDSA revolution. Its
Section 10, Article X addressed the undesirable practice in the past whereby local government units were created,
abolished, merged or divided on the basis of the vagaries of politics and not of the welfare of the people. Thus, the consent
of the people of the local government unit directly affected was required to serve as a checking mechanism to any exercise
of legislative power creating, dividing, abolishing, merging or altering the boundaries of local government units. It is one
instance where the people in their sovereign capacity decide on a matter that affects them - - - direct democracy of the
people as opposed to democracy thru people’s representatives. This plebiscite requirement is also in accord with the
philosophy of the Constitution granting more autonomy to local government units.12
It was determined in the case that the changes that will result from the conversion are too substantial that there is a
necessity for the plurality of those that will be affected to approve it. Similar to the enumerated acts in the constitutional
provision, conversions were found to result in material changes in the economic and political rights of the people and LGUs
affected. Given the far-reaching ramifications of converting the status of a city, we held that the plebiscite requirement under
the constitutional provision should equally apply to conversions as well. Thus, RA 8528 13 was declared unconstitutional in
Miranda on the ground that the law downgraded Santiago City in Isabela without submitting it for ratification in a plebiscite, in
contravention of Sec. 10, Art. X of the Constitution.
Second, while conversion to an HUC is not explicitly provided in Sec. 10, Art. X of the Constitution we nevertheless observe
that the conversion of a component city into an HUC is substantial alteration of boundaries.
As the phrase implies, "substantial alteration of boundaries" involves and necessarily entails a change in the geographical
configuration of a local government unit or units. However, the phrase "boundaries" should not be limited to the mere
physical one, referring to the metes and bounds of the LGU, but also to its political boundaries. It also connotes a
modification of the demarcation lines between political subdivisions, where the LGU’s exercise of corporate power ends and
that of the other begins. And as a qualifier, the alteration must be "substantial" for it to be within the ambit of the
constitutional provision.
Pertinent is Art. 12(c) of the LGC’s Implementing Rules and Regulations, which reads:
Art. 12. Conversion of a Component City into a Highly Urbanized City. –
xxxx
(c) Effect of Conversion – The conversion of a component city into a highly-urbanized city shall make it independent of the
province where it is geographically located. (emphasis added)
Verily, the upward conversion of a component city, in this case Cabanatuan City, into an HUC will come at a steep price. It
can be gleaned from the above-cited rule that the province will inevitably suffer a corresponding decrease in territory brought
about by Cabanatuan City’s gain of independence. With the city’s newfound autonomy, it will be free from the oversight
powers of the province, which, in effect, reduces the territorial jurisdiction of the latter. What once formed part of Nueva Ecija
will no longer be subject to supervision by the province. In more concrete terms, Nueva Ecija stands to lose 282.75 sq. km.
of its territorial jurisdiction with Cabanatuan City’s severance from its mother province. This is equivalent to carving out
almost 5% of Nueva Ecija’s 5,751.3 sq. km. area. This sufficiently satisfies the requirement that the alteration be
"substantial."
Needless to stress, the alteration of boundaries would necessarily follow Cabanatuan City’s conversion in the same way that
creations, divisions, mergers, and abolitions generally cannot take place without entailing the alteration. The enumerated
acts, after all, are not mutually exclusive, and more often than not, a combination of these acts attends the reconfiguration of
LGUs.
In light of the foregoing disquisitions, the Court rules that conversion to an HUC is substantial alternation of boundaries
governed by Sec. 10, Art. X and resultantly, said provision applies, governs and prevails over Sec. 453 of the LGC.
Moreover, the rules of statutory construction dictate that a particular provision should be interpreted with the other relevant
provisions in the law The Court finds that it is actually Sec. 10 of the LGC which is undeniably the applicable provision on the
conduct of plebiscites. The title of the provision itself, "Plebiscite Requirement", makes this obvious. It requires a majority of
the votes cast in a plebiscite called for the purpose in the political unit or units directly affected. On the other hand, Sec. 453
of the LGC, entitled "Duty to Declare Highly Urbanized Status", is only on the duty to declare a city as highly urbanized. It
mandates the Office of the President to make the declaration after the city has met the requirements under Sec. 452, and
upon proper application and ratification in a plebiscite. The conduct of a plebiscite is then a requirement before a declaration
can be made. Thus, the Court finds that Sec. 10 of the LGC prevails over Sec. 453 of the LGC on the plebiscite requirement.
We now take the bull by the horns and resolve the issue whether Sec. 453 of the LGC trenches on Sec. 10, Art. X of the
Constitution.
Hornbook doctrine is that neither the legislative, the executive, nor the judiciary has the power to act beyond the
Constitution’s mandate. The Constitution is supreme; any exercise of power beyond what is circumscribed by the
Constitution is ultra vires and a nullity. As elucidated by former Chief Justice Enrique Fernando in Fernandez v. Cuerva: 14
Where the assailed legislative or executive act is found by the judiciary to be contrary to the Constitution, it is null and void.
As the new Civil Code puts it: "When the courts declare a law to be inconsistent with the Constitution, the former shall be
void and the latter shall govern." Administrative or executive acts, orders and regulations shall be valid only when they are
not contrary to the laws or the Constitution. The above provision of the civil Code reflects the orthodox view that an
unconstitutional act, whether legislative or executive, is not a law, confers no rights, imposes no duties, and affords no
protection. x x x
Applying this orthodox view, a law should be construed in harmony with and not in violation of the Constitution. 15 In a long
line of cases, the cardinal principle of construction established is that a statute should be interpreted to assure its being in
consonance with, rather than repugnant to, any constitutional command or prescription.16 If there is doubt or uncertainty as to
the meaning of the legislative, if the words or provisions are obscure or if the enactment is fairly susceptible of two or more
constitution, that interpretation which will avoid the effect of unconstitutionality will be adopted, even though it may be
necessary, for this purpose, to disregard the more usual or apparent import of the language used. 17
Pursuant to established jurisprudence, the phrase "by the qualified voters therein" in Sec. 453 should be construed in a
manner that will avoid conflict with the Constitution. If one takes the plain meaning of the phrase in relation to the declaration
by the President that a city is an HUC, then, Sec. 453 of the LGC will clash with the explicit provision under Sec. 10, Art. X
that the voters in the "political units directly affected" shall participate in the plebiscite. Such construction should be avoided
in view of the supremacy of the Constitution. Thus, the Court treats the phrase "by the qualified voters therein" in Sec. 453 to
mean the qualified voters not only in the city proposed to be converted to an HUC but also the voters of the political units
directly affected by such conversion in order to harmonize Sec. 453 with Sec. 10, Art. X of the Constitution.
The Court finds that respondents are mistaken in construing Sec. 453 in a vacuum. Their interpretation of Sec. 453 of the
LGC runs afoul of Sec. 10, Art. X of the Constitution which explicitly requires that all residents in the "political units directly
affected" should be made to vote.
Respondents make much of the plebiscites conducted in connection with the conversion of Puerto Princesa City, Tacloban
City and Lapu-Lapu City where the ratification was made by the registered voters in said cities alone. It is clear, however,
that the issue of who are entitled to vote in said plebiscites was not properly raised or brought up in an actual controversy.
The issue on who will vote in a plebiscite involving a conversion into an HUC is a novel issue, and this is the first time that
the Court is asked to resolve the question. As such, the past plebiscites in the aforementioned cities have no materiality or
relevance to the instant petition. Suffice it to say that conversion of said cities prior to this judicial declaration will not be
affected or prejudiced in any manner following the operative fact doctrine―that “the actual existence of a statute prior to
such a determination is an operative fact and may have consequences which cannot always be erased by a new judicial
declaration.”18
The entire province of Nueva Ecija will be directly

affected by Cabanatuan City’s conversion
After the Court has resolved the seeming irreconcilability of Sec. 10, Art. X of the Constitution and Sec. 453 of the LGC, it is
now time to elucidate the meaning of the phrase "political units directly affected" under Sec. 10, Art. X.
a. "Political units directly affected" defined
In identifying the LGU or LGUs that should be allowed to take part in the plebiscite, what should primarily be determined is
whether or not the unit or units that desire to participate will be "directly affected" by the change. To interpret the phrase, Tan
v. COMELEC19 and Padilla v. COMELEC20 are worth revisiting.
We have ruled in Tan, involving the division of Negros Occidental for the creation of the new province of Negros del Norte,
that the LGUs whose boundaries are to be altered and whose economy would be affected are entitled to participate in the
plebiscite. As held:
It can be plainly seen that the aforecited constitutional provision makes it imperative that there be first obtained "the approval
of a majority of votes in the plebiscite in the unit or units affected" whenever a province is created, divided or merged and
there is substantial alteration of the boundaries. It is thus inescapable to conclude that the boundaries of the existing
province of Negros Occidental would necessarily be substantially altered by the division of its existing boundaries in order
that there can be created the proposed new province of Negros del Norte. Plain and simple logic will demonstrate than that
two political units would be affected.
The first would be the parent province of Negros Occidental because its boundaries would be substantially altered. The
other affected entity would be composed of those in the area subtracted from the mother province to constitute the proposed
province of Negros del Norte.21
xxxx
To form the new province of Negros del Norte no less than three cities and eight municipalities will be subtracted from the
parent province of Negros Occidental. This will result in the removal of approximately 2,768.4 square kilometers from the
land area of an existing province whose boundaries will be consequently substantially altered. It becomes easy to realize
that the consequent effects of the division of the parent province necessarily will affect all the people living in the separate
areas of Negros Occidental and the proposed province of Negros del Norte. The economy of the parent province as well as
that of the new province will be inevitably affected, either for the better or for the worse. Whatever be the case, either or both
of these political groups will be affected and they are, therefore, the unit or units referred to in Section 3 of Article XI of the
Constitution which must be included in the plebiscite contemplated therein. 22 (emphasis added)
Sec. 3, Art. XI of the 1973 Constitution, as invoked in Tan, states:
SEC. 3. No province, city, municipality or barrio may be created, divided, merged abolished, or its boundary substantially
altered, except in accordance with the criteria established in the local government code, and subject to the approval by a
majority of the votes in a plebiscite in the unit or units affected. (emphasis added)
Despite the change in phraseology compared to what is now Sec. 10, Art. X, we affirmed our ruling in Tan in the latter case
of Padilla. As held, the removal of the phrase "unit or" only served to sustain the earlier finding that what is contemplated by
the phase "political units directly affected" is the plurality of political units which would participate in the plebiscite. As
reflected in the journal of the Constitutional Commission:23
Mr. Maambong: While we have already approved the deletion of "unit or," I would like to inform the Committee that under the
formulation in the present Local Government Code, the words used are actually "political unit or units." However, I do not
know the implication of the use of these words. Maybe there will be no substantial difference, but I just want to inform the
Committee about this.
Mr. Nolledo: Can we not adhere to the original "unit or units"? Will there be no objection on the part of the two Gentlemen
from the floor?
Mr. Davide: I would object. I precisely asked for the deletion of the words "unit or" because in the plebiscite to be conducted,
it must involve all the units affected. If it is the creation of a barangay plebiscite because it is affected. It would mean a loss
of a territory. (emphasis added)
The same sentiment was shared by the Senate during its deliberations on Senate Bill No. 155––the predecessor of the
LGC––thus:
Senator Guingona. Can we make that clearer by example? Let us assume that a province has municipalities and there is a
merger of two municipalities. Would this therefore mean that the plebiscite will be conducted within the two merged
municipalities and not in the eight other municipalities?
Senator Pimentel. The whole province, Mr. President, will be affected, and that is the reason we probably have to involve the
entire province.
Senator Guingona. So the plebiscite will not be held only in the two municipalities which are being merged, but the entire
province will now have to undergo.
Senator Pimentel. I suppose that was the ruling in the Negros del Norte case.
Senator Guingona. Supposing it refers to barangays, will the entire municipality have to vote? There are two barangays
being merged, say, out of 100 barangays. Would the entire municipality have to participate in the plebiscite?
Senator Pimentel. Yes, Mr. President, because the municipality is affected directly by the merger of two of its barangay.
Senator Guingona. And, if, out of 100 barangay, 51 are being merged, abolished, whatever, would the rest of the
municipality not participate in the plebiscite?
Senator Pimentel. Do all the 51 barangay that the Gentleman mentioned, Mr. President, belong to one municipality?
Senator Guingona. Yes.
Senator Pimentel. Then it will only involve the municipality where the 51 barangays belong.
Senator Guingona. Yes. So, the entire municipality will now have to undergo a plebiscite.
Senator Pimentel. That is correct, Mr. President.
Senator Guingona. In the earlier example, if it is only a merger of two municipalities, let us say, in a province with 10
municipalities – the entire province – will the other municipalities although not affected also have to participate in the
plebiscite?
Senator Pimentel. Yes. The reason is that the municipalities are within the territorial boundaries of the province itself, it will
have to be altered as a result of the two municipalities that the Gentleman mentioned. 24
In the more recent case of Miranda, the interpretation in Tan and Padilla was modified to include not only changes in
economic but also political rights in the criteria for determining whether or not an LGU shall be considered "directly affected."
Nevertheless, the requirement that the plebiscite be participated in by the plurality of political units directly affected
remained.
b. Impact on Economic Rights
To recall, it was held in Miranda that the changes that will result in the downgrading of an LGU from an independent
component city to a component city cannot be categorized as insubstantial, thereby necessitating the conduct of a plebiscite
for its ratification. In a similar fashion, herein petitioner Umali itemized the adverse effects of Cabanatuan City’s conversion
to the province of Nueva Ecija to justify the province’s participation in the plebiscite to be conducted.
Often raised is that Cabanatuan City’s conversion into an HUC and its severance from Nueva Ecija will result in the
reduction of the Internal Revenue Allotment (IRA) to the province based on Sec. 285 of the LGC. The law states:
Section 285. Allocation to Local Government Units. - The share of local government units in the internal revenue allotment
shall be collected in the following manner:
(a) Provinces - Twenty-three percent (23%);
(c) Municipalities - Thirty-four percent (34%); and
Provided, however, That the share of each province, city, and municipality shall be determined on the basis of the following
formula:
(a) Population - Fifty percent (50%);
(b) Land Area - Twenty-five percent (25%); and

(c) Equal sharing - Twenty-five percent (25%)
In our earlier disquisitions, we have explained that the conversion into an HUC carries the accessory of substantial alteration
of boundaries and that the province of Nueva Ecija will, without a doubt, suffer a reduction in territory because of the
severance of Cabanatuan City. The residents of the city will cease to be political constituencies of the province, effectively
reducing the latter’s population. Taking this decrease in territory and population in connection with the above formula, it is
conceded that Nueva Ecija will indeed suffer a reduction in IRA given the decrease of its multipliers’ values. As assessed by
the Regional Director of the Department of Budget and Management (DBM) for Region III:25
Basis for IRA Province of Cabanatuan Province of

Computation Nueva Ecija City Nueva Ecija Net
of Cabanatuan
City
No. of Population 1,843,853 259,267 259,267
CY 2007 Census
Land Area 5,751.33 282.75 5,468.58
(sq. km.)
IRA Share of Actual IRA Estimated IRA Reduction

Nueva Ecija Share share excluding
Cabanatuan
City
Based on ₱800,772,618.45 ₱688,174,751.66 ₱112,597,866.79
Population
Based on Land ₱263,470,472.62 ₱250,517,594.56 P 12,952,878.06
Area
Total ₱125,550,744.85
Clear as crystal is that the province of Nueva Ecija will suffer a substantial reduction of its share in IRA once Cabanatuan
City attains autonomy. In view of the economic impact of Cabanatuan City’s conversion, petitioner Umali’s contention, that
its effect on the province is not only direct but also adverse, deserves merit.
Moreover, his claim that the province will lose shares in provincial taxes imposed in Cabanatuan City is well-founded. This is
based on Sec. 151 of the LGC, which states:
SECTION 151. Scope of Taxing Powers. – Except as otherwise provided in this Code, the city, may levy the taxes, fees, and
charges which the province or municipality may impose: Provided, however, That the taxes, fees and charges levied and
collected by highly urbanized and independent component cities shall accrue to them and distributed in accordance with the
provisions of this Code. (emphasis added)
Once converted, the taxes imposed by the HUC will accrue to itself. Prior to this, the province enjoys the prerogative to
impose and collect taxes such as those on sand, gravel and other quarry resources, 26 professional taxes,27 and amusement
taxes28 over the component city. While, it may be argued that this is not a derogation of the province’s taxing power because
it is in no way deprived of its right to collect the mentioned taxes from the rest of its territory, the conversion will still reduce
the province’s taxing jurisdiction, and corollary to this, it will experience a corresponding decrease in shares in local tax
collections. This reduction in both taxing jurisdiction and shares poses a material and substantial change to the province’s
economic rights, warranting its participation in the plebiscite.
To further exemplify the impact of these changes, a perusal of Secs. 452(a) and 461(a) of the LGC is in order, viz:
Section 452. Highly Urbanized Cities.
(a) Cities with a minimum population of two hundred thousand (200,000) inhabitants as certified by the National
Statistics Office, and within the latest annual income of at least Fifty Million Pesos (₱50,000,000.00) based on
1991 constant prices, as certified by the city treasurer, shall be classified as highly urbanized cities.
Section 461. Requisites for Creation.

(a) A province may be created if it has an average annual income, as certified by the Department of Finance, of not less
than Twenty million pesos (₱20,000,000.00) based on 1991 constant prices and either of the following requisites:
(i) a contiguous territory of at least two thousand (2,000) square kilometers, as certified by the Lands Management
Bureau; or
(ii) a population of not less than two hundred fifty thousand (250,000) inhabitants as certified by the National
Statistics Office:
Provided, That, the creation thereof shall not reduce the land area, population, and income of the original unit or units at the
time of said creation to less than the minimum requirements prescribed herein.
A component city’s conversion into an HUC and its resultant autonomy from the province is a threat to the latter’s economic
viability. Noteworthy is that the income criterion for a component city to be converted into an HUC is higher than the income
requirement for the creation of a province. The ensuing reduction in income upon separation would clearly leave a crippling
effect on the province’s operations as there would be less funding to finance infrastructure projects and to defray overhead
costs. Moreover, the quality of services being offered by the province may suffer because of looming austerity measures.
These are but a few of the social costs of the decline in the province’s economic performance, which Nueva Ecija is bound
to experience once its most progressive city of Cabanatuan attains independence.
c. Impact on Political Rights
Aside from the alteration of economic rights, the political rights of Nueva Ecija and those of its residents will also be affected
by Cabanatuan’s conversion into an HUC. Notably, the administrative supervision of the province over the city will effectively
be revoked upon conversion. Secs. 4 and 12, Art. X of the Constitution read:
Sec. 4. The President of the Philippines shall exercise general supervision over local governments. Provinces with respect
to component cities and municipalities, and cities and municipalities with respect to component barangays shall ensure that
the acts of their component units are within the scope of their prescribed powers and functions.
Sec 12. Cities that are highly urbanized, as determined by law, and component cities whose charters prohibit their voters
from voting for provincial elective officials, shall be independent of the province. The voters of component cities within a
province, whose charters contain no such prohibition, shall not be deprived of their right to vote for elective provincial
officials.
Duties, privileges and obligations appertaining to HUCs will attach to Cabanatuan City if it is converted into an HUC. This
includes the right to be outside the general supervision of the province and be under the direct supervision of the President.
An HUC is not subject to provincial oversight because the complex and varied problems in an HUC due to a bigger
population and greater economic activity require greater autonomy.29 The provincial government stands to lose the power to
ensure that the local government officials of Cabanatuan City act within the scope of its prescribed powers and functions, 30 to
review executive orders issued by the city mayor, and to approve resolutions and ordinances enacted by the city
council.31 The province will also be divested of jurisdiction over disciplinary cases concerning the elected city officials of the
new HUC, and the appeal process for administrative case decisions against barangay officials of the city will also be
modified accordingly.32 Likewise, the registered voters of the city will no longer be entitled to vote for and be voted upon as
provincial officials.33
In cutting the umbilical cord between Cabanatuan City and the province of Nueva Ecija, the city will be separated from the
territorial jurisdiction of the province, as earlier explained. The provincial government will no longer be responsible for
delivering basic services for the city residents’ benefit. Ordinances and resolutions passed by the provincial council will no
longer cover the city. Projects queued by the provincial government to be executed in the city will also be suspended if not
scrapped to prevent the LGU from performing functions outside the bounds of its territorial jurisdiction, and from expending
its limited resources for ventures that do not cater to its constituents.
1âwphi1
In view of these changes in the economic and political rights of the province of Nueva Ecija and its residents, the entire
province certainly stands to be directly affected by the conversion of Cabanatuan City into an HUC. Following the doctrines
in Tan and Padilla, all the qualified registered voters of Nueva Ecija should then be allowed to participate in the plebiscite
called for that purpose.
Respondents’ apprehension that requiring the entire province to participate in the plebiscite will set a dangerous precedent
leading to the failure of cities to convert is unfounded. Their fear that provinces will always be expected to oppose the
conversion in order to retain the city’s dependence is speculative at best. In any event, any vote of disapproval cast by those
directly affected by the conversion is a valid exercise of their right to suffrage, and our democratic processes are designed to
uphold the decision of the majority, regardless of the motive behind the vote. It is unfathomable how the province can be
deprived of the opportunity to exercise the right of suffrage in a matter that is potentially deleterious to its economic viability
and could diminish the rights of its constituents. To limit the plebiscite to only the voters of the areas to be partitioned and
seceded from the province is as absurd and illogical as allowing only the secessionists to vote for the secession that they
demanded against the wishes of the majority and to nullify the basic principle of majority rule. 34
WHEREFORE, premises considered, the Petition for Certiorari, docketed as G.R. No. 203974, is hereby GRANTED.
COMELEC Minute Resolution No. 12-0797 dated September 11, 2012 and Minute Resolution No. 12-0925 dated October
16, 2012 are hereby declared NULL and VOID. Public respondent COMELEC is hereby enjoined from implementing the said
Resolutions. Additionally, COMELEC is hereby ordered to conduct a plebiscite for the purpose of converting Cabanatuan
City into a Highly Urbanized City to be participated in by the qualified registered voters of Nueva Ecij a within 120 days from
the finality of this Decision. The Petition for Mandamus, docketed as G.R. No. 204371, is hereby DISMISSED.
SO ORDERED.

Associate Justice
WE CONCUR:
I join Dissent of J. Leonen

MA. LOURDES P. A. SERENO
Chief Justice
ANTONIO T. CARPIO TERESITA J. LEONARDO-DE CASTRO

ARTURO D. BRION DIOSDADO M. PERALTA

LUCAS P. BERSAMIN MARIANO C. DEL CASTILLO

Took no part. I join the Dissent of J. Leonen

ROBERTO A. ABAD MARTIN S. VILLARAMA, JR.
I join the dissent of J. Leonen

JOSE PORTUGAL PEREZ
JOSE CATRAL MENDOZA
Associate Justice
Associate Justice
BIENVENIDO L. REYES ESTELA M. PERLAS-BERNABE

I dissent. See Separate Opinion

MARVIC MARIO VICTOR F. LEONEN
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the opinion of the Court.
MA. LOURDES P. A. SERENO

Chief Justice
CERTIFIED TRUE COPY
ENRIQUE ESGUERRA-VIDAL
Clerk of Court
OCC-En Banc
Supreme Court
Footnotes
1
Rollo, pp. 113-115.
2
Id. at 64-65.
3
Id. at 143-146.
4
COMELEC Chairperson Sixto Brillantes and Commissioner Armando Velasco cast the dissenting votes.
5
Mendenilla v. Onandia, 115 Phil. 534 (1962).
6
RA 7160, Sec. 385-386
7
Id., Sec. 441-442
8
Id., Sec. 449-450
9
Id., Sec. 460-461
10
Section 452. Highly Urbanized Cities.
(a) Cities with a minimum population of two hundred thousand (200,000) inhabitants as certified by the
National Statistics Office, and within the latest annual income of at least Fifty Million Pesos
(₱50,000,000.00) based on 1991 constant prices, as certified by the city treasurer, shall be classified as
highly urbanized cities.
(b) Cities which do not meet above requirements shall be considered component cities of the province in
which they are geographically located. If a component city is located within the boundaries of two (2) or
more provinces, such city shall be considered a component of the province of which it used to be a
municipality.
(c) Qualified voters of highly urbanized cities shall remain excluded from voting for elective provincial
officials.
Unless otherwise provided in the Constitution or this Code, qualified voters of independent component
cities shall be governed by their respective charters, as amended, on the participation of voters in
provincial elections.
Qualified voters of cities who acquired the right to vote for elective provincial officials prior to the
classification of said cities as highly-urbanized after the ratification of the Constitution and before the
effectivity of this Code, shall continue to exercise such right.
11
G.R. No. 133064, September 16, 1999, 314 SCRA 603.
12
Id. at 610.
An Act Amending Certain Sections of Republic Act Numbered 7720 – An Act Converting the Municipality of
13
Santiago into an Independent Component City to Be Known as the City of Santiago.
14
No. L-21114, November 28, 1967, 21 SCRA 1095, 1106.
15
Garcia v. COMELEC, G.R. No. 111230, September 30, 1994, 237 SCRA 279, 291
16
Mutuc v. COMELEC, G.R. No. 32717, Nov. 26, 1970, 36 SCRA 228.
17
Garcia v. COMELEC, supra note 15.
18
Fernandez v. Cuerva, supra note 14.
19
No. L-73155, July 11, 1986, 142 SCRA 727.
20
G.R. No. 103328, October 19, 1992, 214 SCRA 735.
21
Tan v. COMELEC, supra note 19, at 742-743.
22
Id. at 745-746.
23
III RECORD, CONSTITUTIONAL COMMISSION 486.
24
Senate Bill No. 155, II RECORDS OF THE SENATE 121, 4th Regular Session (July 26, 1990).
25
Rollo, p. 89.
26
RA 7160, Sec. 138.
27
Id., Sec. 139.
28
Id., Sec. 140.
29
De Leon, Hector S. & De Leon, Hector Jr., TEXTBOOK ON THE PHILIPPINE CONSTITUTION (2011).
30
LGC, Section 29. Provincial Relations with Component Cities and Municipalities. - The province, through the
governor, shall ensure that every component city and municipality within its territorial jurisdiction acts within the
scope of its prescribed powers and functions. Highly urbanized cities and independent component cities shall be
independent of the province.
Id., Section 465. The Chief Executive: Powers, Duties, Functions, and Compensation.
xxxx
(b) For efficient, effective and economical governance the purpose of which is the general welfare of the
province and its inhabitants pursuant to Section 16 of this Code, the provincial governor shall:
xxxx
(2) Enforce all laws and ordinances relative to the governance of the province and the exercise of the
appropriate corporate powers provided for under Section 22 of this Code, implement all approved
policies, programs, projects, services and activities of the province and, in addition to the foregoing, shall:
(i) Ensure that the acts of the component cities and municipalities of the province and of its officials and
employees are within the scope of their prescribed powers, duties and functions.
31
Id., Section 30. Review of Executive Orders. -
(a) Except as otherwise provided under the Constitution and special statutes, the governor shall review
all executive orders promulgated by the component city or municipal mayor within his jurisdiction. The
city or municipal mayor shall review all executive orders promulgated by the punong barangay within his
jurisdiction. Copies of such orders shall be forwarded to the governor or the city or municipal mayor, as
the case may be, within three (3) days from their issuance. In all instances of review, the local chief
executive concerned shall ensure that such executive orders are within the powers granted by law and in
conformity with provincial, city, or municipal ordinances.
(b) If the governor or the city or municipal mayor fails to act on said executive orders within thirty (30)
days after their submission, the same shall be deemed consistent with law and therefore valid.
xxxx
Id., Section 455. Chief Executive; Powers, Duties and Compensation.
xxxx
city and its inhabitants pursuant to Section 16 of this Code, the city mayor shall:
(1) Exercise general supervision and control over all programs, projects, services, and activities of the
city government. and in this connection, shall:
xxxx
(xii) Furnish copies of executive orders issued by him, to the provincial governor in the case of
component city mayors, to the Office of the President in the case of highly-urbanized city mayors and to
their respective metropolitan council chairmen in the case of mayors of cities in the Metropolitan Manila
Area and other metropolitan political subdivisions, within seventy-two (72) hours after their issuances;
xxxx
(xx) Submit to the provincial governor, in case of component cities; to the Office of the President, in the
case of highly-urbanized cities; to their respective metropolitan authority council chairmen and to the
Office of the President, in case of cities of the Metropolitan Manila Area and other metropolitan political
subdivisions, the following reports: an annual report containing a summary of all matters pertinent to the
management, administration and development of the city and all information and data relative to its
political, social and economic conditions; and supplemental reports when unexpected events and
situations arise at any time during the year, particularly when man-made or natural disasters or calamities
affect the general welfare of the city, province, region or country.
32
Id., Section 67. Administrative Appeals. - Decisions in administrative cases may, within thirty (30) days from
receipt thereof, be appealed to the following:
(a) The sangguniang panlalawigan, in the case of decisions of the sangguniang panlungsod of
component cities and the sangguniang bayan; and
(b) The Office of the President, in the case of decisions of the sangguniang panlalawigan and the
sangguniang panlungsod of highly urbanized cities and independent component cities.
Decisions of the Office of the President shall be final and executory.
33
Id., Secs. 451-452(c).
34
Tan v. COMELEC, supra note 19, at 747, Concurring Opinion, Teehankee, C.J.
EN BANC
G.R. No. 207257 February 3, 2015
HON. RAMON JESUS P. PAJE, in his capacity as SECRETARY OF THE DEPARTMENT OF ENVIRONMENT
AND NATURAL RESOURCES (DENR), Petitioner,
vs.
HON. TEODORO A. CASIÑO, HON. RAYMOND V. PALATINO, HON. RAFAEL V. MARIANO, HON.
EMERENCIANA A. DE JESUS, CLEMENTE G. BAUTISTA, JR., HON. ROLEN C. PAULINO, HON. EDUARDO
PIANO, HON. JAMES DE LOS REYES, HON. AQUILINO Y. CORTEZ, JR., HON. SARAH LUGERNA LIPUMANO-
GARCIA, NORAIDA VELARMINO, BIANCA CHRISTINE GAMBOA ESPINOS, CHARO SIMONS, GREGORIO
LLORCA MAGDARAOG, RUBELH PERALTA, ALEX CORPUS HERMOSO, RODOLFO SAMBAJON, REV. FR.
GERARDO GREGORIO P. JORGE, CARLITO A. BALOY, OFELIA D. PABLO, MARIO ESQUILLO, ELLE
LATINAZO, EVANGELINE Q. RODRIGUEZ, JOHN CARLO DELOS REYES, Respondents.
x-----------------------x
G.R. No. 207276
REDONDO PENINSULA ENERGY, INC., Petitioner,

vs.
EMERENCIANA A. DE JESUS, CLEMENTE G. BAUTISTA, JR., HON. ROLEN C. PAULINO, HON. EDUARDO
PIANO, HON. JAMES DE LOS REYES, HON. AQUILINO Y. CORTEZ, JR., HON. SARAH LUGERNA LIPUMANO-
GARCIA, NORAIDA VELARMINO, BIANCA CHRISTINE GAMBOA ESPINOS, CHARO SIMONS, GREGORIO
LLORCA MAGDARAOG, RUBELH PERALTA, ALEX CORPUS HERMOSO, RODOLFO SAMBAJON, REV. FR.
GERARDO GREGORIO P. JORGE, CARLITO A. BALOY, OFELIA D. PABLO, MARIO ESQUILLO, ELLE
LATINAZO, EVANGELINE Q. RODRIGUEZ, JOHN CARLO DELOS REYES, RAMON JESUS P. PAJE, in his
capacity as SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES AND
SUBIC BAY METROPOLITAN AUTHORITY, Respondents.
x-----------------------x
G.R. No. 207282
HON. TEODORO A. CASIÑO, HON. RAYMOND V. PALATINO, HON. EMERENCIANA A. DE JESUS, CLEMENTE
G. BAUTISTA, JR., HON. RAFAEL V. MARIANO, HON. ROLEN C. PAULINO, HON. EDUARDO PIANO, HON.
JAMES DE LOS REYES, HON. AQUILINO Y. CORTEZ, JR., HON. SARAH LUGERNA LIPUMANO-GARCIA,
NORAIDA VELARMINO, BIANCA CHRISTINE GAMBOA ESPINOS, CHARO SIMONS, GREGORIO LLORCA
MAGDARAOG, RUBELH PERALTA, ALEX CORPUS HERMOSA, RODOLFO SAMBAJON, ET AL., Petitioners,
vs.
RAMON JESUS P. PAJE in his capacity as SECRETARY OF THE DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES, SUBIC BAY METROPOLITAN AUTHORITY, AND REDONDO PENINSULA ENERGY,
INC., Respondents.
x-----------------------x
G.R. No. 207366
SUBIC BAY METROPOLITAN AUTHORITY, Petitioner,

vs.
EMERENCIANA A. DE JESUS, HON. ROLEN C. PAULINO, HON EDUARDO PIANO, HON. JAMES DE LOS
REYES, HON. AQUILINO Y. CORTEZ, JR., HON. SARAH LUGERNA LIPUMANOGARCIA, NORAIDA
VELARMINO, BIANCA CHRISTINE GAMBOA, GREGORIO LLORCA MAGDARAOG, RUBELHPERALTA, ALEX
CORPUS HERMOSO, RODOLFO SAMBAJON, REV. FR. GERARDO GREGORIO P. JORGE, CARLITO A.
BALOY, OFELIA D. PABLO, MARIO ESQUILLO, ELLE·LATINAZO, EV ANGELINE Q. RODRIGUEZ, JOHN
CARLO DELOS REYES, HON. RAMON JESUS P. PAJE, in his capacity as SECRETARY OF THE
DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES AND REDONDO PENINSULA ENERGY,
INC.,Respondents.
DECISION
DEL CASTILLO, J.:
Before this Court are consolidated Petitions for Review on Certiorari assailing the Decision dated January 30, 2013
1 2
and the Resolution dated May 22, 2013 of the Court of Appeals (CA) in CA-G.R. SP No. 00015, entitled "Hon.
3
Teodoro A. Casiño, et al. v. Hon. Ramon Jesus P. Paje, et al."
Factual Antecedents
In February 2006, Subic Bay Metropolitan Authority· (SBMA), a government agency organized and established under
Republic Act No. (RA) 7227, and Taiwan Cogeneration Corporation (TCC) entered into a Memorandum of
4
Understanding (MOU) expressing their intention to build a power plant in Subic Bay which would supply reliable and
affordable power to Subic Bay Industrial Park (SBIP). 5
On July 28, 2006, SBMA and TCC entered into another MOU, whereby TCC undertook to build and operatea coal-
fired power plant. In the said MOU, TCC identified 20 hectares of land at SitioNaglatore, Mt. Redondo, Subic Bay
6
Freeport Zone (SBFZ) as the suitable area for the project and another site of approximately 10 hectares tobe used as
an ash pond. TCC intends to lease the property from SBMA for a term of 50 years with rent fixed at$3.50 per square
7
meter, payable in 10 equal 5-year installments.

8
On April 4, 2007, the SBMA Ecology Center issued SBFZ Environmental Compliance Certificate (ECC) No. EC-
SBFZ-ECC-69-21-500 in favor of Taiwan Cogeneration International Corporation (TCIC), a subsidiary of TCC, for the
9
construction, installation,and operation of 2x150-MW Circulating Fluidized Bed (CFB) Coal-Fired Thermal Power
Plant at Sitio Naglatore. 10
On June 6, 2008, TCC assigned all its rights and interests under the MOU dated July 28, 2006 to Redondo Peninsula
Energy, Inc. (RP Energy), a corporation duly organized and existing under the laws of the Philippines with the
11
primary purpose of building, owning, and operating powerplants in the Philippines, among others. Accordingly, an
12
Addendum to the said MOU was executed by SBMA and RP Energy. 13
RP Energy then contracted GHD Pty, Ltd. (GHD) to prepare an Environmental Impact Statement (EIS) for the
proposed coal-fired power plant and to assist RP Energy in applying for the issuance ofan ECC from the Department
of Environment and Natural Resources (DENR). On August 27, 2008, the Sangguniang Panglungsodof Olongapo
14
City issued Resolution No. 131, Series of 2008, expressing the city government’s objection to the coal-fired power
plant as an energy source and urging the proponent to consider safer alternative sources ofenergy for Subic Bay. 15
On December 22, 2008, the DENR, through former Secretary Jose L. Atienza, Jr., issued an ECC for the proposed
2x150-MW coal-fired power plant. 16
Sometime thereafter, RP Energy decided to include additional components in its proposed coal-fired power plant.
Due to the changes in the project design, which involved the inclusion of a barge wharf, seawater intake breakwater,
subsea discharge pipeline, raw water collection system, drainage channel improvement, and a 230kV double-circuit
transmission line, RP Energy requested the DENR Environmental Management Bureau(DENR-EMB) to amend its
17
ECC. In support of its request, RP Energy submitted to the DENR-EMBan Environmental Performance Report and
18
Management Plan (EPRMP), which was prepared by GHD. 19
On June 8, 2010, RP Energy and SBMA entered into a Lease and Development Agreement (LDA) over a
380,004.456-square meter parcel of land to be used for building and operating the coal-fired power plant.
20
On July 8, 2010, the DENR-EMBissued an amended ECC (first amendment) allowing the inclusion ofadditional
components, among others. 21
Several months later, RP Energy again requested the DENR-EMB to amend the ECC. Instead of constructing a
22
2x150-MW coal-fired power plant, as originally planned, it now sought toconstruct a 1x300-MWcoal-fired power
plant. In support of its request, RP Energy submitted a Project Description Report (PDR) to the DENR-EMB.
23 24
On May 26, 2011, the DENR-EMB granted the request and further amended the ECC (second amendment). 25
On August 1, 2011, the Sangguniang Panglalawiganof Zambales issued Resolution No. 2011-149, opposing the
establishment of a coal-fired thermal power plant at SitioNaglatore, Brgy. Cawag, Subic, Zambales. 26
On August 11, 2011, the Liga ng mga Barangayof Olongapo City issued Resolution No. 12, Series of 2011,
expressing its strong objection to the coal-fired power plant as an energy source. 27
On July 20, 2012, Hon. Teodoro A. Casiño, Hon. Raymond V. Palatino, Hon. Rafael V. Mariano, Hon. Emerenciana
A. De Jesus, Clemente G. Bautista, Jr., Hon. Rolen C. Paulino,Hon. Eduardo Piano, Hon. James de los Reyes, Hon.
Aquilino Y. Cortez, Jr., Hon. Sarah Lugerna Lipumano-Garcia, Noraida Velarmino, Bianca Christine Gamboa
Espinos, Charo Simons, Gregorio Llorca Magdaraog, Rubelh Peralta, Alex Corpus Hermoso,Rodolfo Sambajon, Rev.
Fr. Gerardo Gregorio P. Jorge, Carlito A. Baloy, Ofelia D. Pablo, Mario Esquillo, Elle Latinazo, Evangeline Q.
Rodriguez, and John Carlo delos Reyes (Casiño Group) filed before this Court a Petition for Writ of Kalikasan against
RP Energy, SBMA, and Hon. Ramon Jesus P. Paje, in his capacity as Secretary of the DENR. 28
On July 31, 2012, this Court resolved, among others, to: (1) issue a Writ of Kalikasan; and (2) refer the case to the
CA for hearing and reception of evidence and rendition of judgment. While the case was pending, RP Energy
29
applied for another amendment to its ECC (third amendment) and submitted another EPRMP to the DENR-EMB,
proposing the construction and operation of a 2x300-MW coal-fired power plant. 30
On September 11, 2012, the Petition for Writ of Kalikasanwas docketed as CA-G.R. SP No. 00015 and raffled to the
Fifteenth Division of the CA. In the Petition, the Casiño Group alleged, among others, that the power plant project
31
would cause grave environmental damage; that it would adversely affect the health of the residents of the
32
municipalities of Subic,Zambales, Morong, Hermosa, and the City of Olongapo; that the ECC was issued and the
33
LDA entered into without the prior approval of the concerned sanggunians as required under Sections 26 and 27 of
the Local Government Code (LGC); that the LDA was entered into without securing a prior certification from the
34
National Commission on Indigenous Peoples (NCIP) as required under Section 59 of RA8371 or the Indigenous
Peoples’ Rights Act of 1997 (IPRA Law); that Section 8.3 of DENR Administrative Order No. 2003-30 (DAO 2003-
35
30) which allowsamendments of ECCs is ultra viresbecause the DENR has no authority to decide on requests for
amendments of previously issued ECCs in the absence of a new EIS; and that due to the nullity of Section 8.3 of
36
DAO 2003-30, all amendments to RP Energy’s ECC are null and void. 37
On October 29, 2012, the CA conducted a preliminary conference wherein the parties, with their respective counsels,
appeared except for Hon. Teodoro A. Casiño, Hon. Rafael V. Mariano, Hon. Emerencia A. De Jesus, Clemente G.
Bautista, Mario Esquillo, Elle Latinazo,Evangeline Q. Rodriguez, and the SBMA. The matters taken up during the
38
preliminary conference were embodied in the CA’s Resolution dated November 5, 2012, to wit:
I. ISSUES
A. Petitioners (Casiño Group)
1. Whether x x x the DENR Environmental Compliance Certificate (‘ECC’ x x x) in favor of RP Energy for a
2x150 MW Coal-Fired Thermal Power Plant Project (‘Power Plant,’ x x x ) and its amendment to 1x300 MW
Power Plant, and the Lease and Development Agreement between SBMA and RP Energy complied with the
Certification Precondition as required under Section 59 of Republic Act No. 8371 or the Indigenous People’s
Rights Act of 1997 (‘IPRA Law,’ x x x);
2. Whether x x x RP Energy can proceed with the construction and operation of the 1x300 MW Power Plant
without prior consultation with and approval of the concerned local government units (‘LGUs,’ x x x ),
pursuant to Sections 26 and 27 of Republic Act No. 7160 or the Local Government Code;
3. Whether x x x Section 8.3 of DENRAdministrative Order No. 2003-30 (‘DAO No. 2003-30,’ x x x )
providing for the amendment of an ECC is null and void for being ultra vires; and
4. Whether x x x the amendment of RPEnergy’s ECC under Section 8.3 of DAO No. 2003-30 is null and
void.
B. Respondent RP Energy
1. Whether x x x Section 8.3 of DAO No. 2003-30 can be collaterally attacked;
1.1 Whether x x x the same is valid until annulled;
2. Whether x x x petitioners exhausted their administrative remedies with respect to the amended ECC for
the 1x300 MW Power Plant;
2.1 Whether x x x the instant Petition is proper;
3. Whether x x x RP Energycomplied with all the procedures/requirements for the issuance of the DENR
ECC and its amendment;
3.1 Whether x x x a Certificate of Non-Overlap from the National Commission on Indigenous

Peoples is applicable in the instant case;
4. Whether x x x the LGU’s approval under Sections 26 and 27 of the Local Government Code is
necessaryfor the issuance of the DENR ECC and its amendments, and what constitutes LGU approval;
5. Whether x x x there is a threatened or actual violation of environmental laws to justify the Petition;
5.1 Whether x x x the approved 1x300 MW Power Plant complied with the accepted legal
standards on thermal pollution of coastal waters, air pollution, water pollution, and acid deposits on
aquatic and terrestrial ecosystems; and
6. Whether x x x the instant Petition should be dismissed for failure to comply with the requirements of
properverification and certification of nonforum shopping with respect to some petitioners.
C. Respondent DENR Secretary Paje
1. Whether x x x the issuance of the DENR ECC and its amendment in favor of RP Energy requires
compliance with Section 59 of the IPRA Law, as well as Sections 26 and 27 of the Local Government Code;
2. Whether x x x Section 8.3 of DAO No. 2003-30 can be collaterally attacked in this proceeding; and
3. Whether x x x Section 8.3 of DAO No. 2003-30 is valid.
II. ADMISSIONS/DENIALS
Petitioners, through Atty. Ridon, admittedall the allegations in RP Energy’s Verified Return, except the following:
1. paragraphs 1.4 to 1.7;
2. paragraphs 1.29 to 1.32; and
3. paragraphs 1.33 to 1.37.
Petitioners made no specific denial withrespect to the allegations of DENR Secretary Paje’s Verified Return. x x x
Respondent RP Energy proposed the following stipulations, which were all admitted by petitioners, through Atty.
Ridon, viz:
1. The 1x300 MW Power Plant is not yet operational;
2. At present, there is no environmental damage;
3. The 1x300 MW Power Plant project is situated within the Subic Special Economic Zone; and
4. Apart from the instant case, petitioners have not challenged the validity of Section 8.3 of DAO No. 2003-
30.
Public respondent DENR Secretary Paje did not propose any matter for stipulation. 39
Thereafter, trial ensued.
The Casiño Group presented three witnesses, namely: (1) Raymond V. Palatino, a two-term representativeof the
KabataanPartylist in the House of Representatives; (2) Alex C. Hermoso, the convenor of the Zambales-Olongapo
40
City Civil Society Network,a director of the PREDA Foundation, and a member of the Zambales Chapter of the Kaya
41
NatinMovement and the Zambales Chapter of the People Power Volunteers for Reform; and (3) Ramon Lacbain, the
42
ViceGovernor of the Province of Zambales. 43
RP Energy presented five witnesses,namely: (1) JunisseP. Mercado (Ms. Mercado), an employee of GHD and the
Project Directorof ongoing projects for RP Energy regarding the proposed power plant project; (2) Juha Sarkki (Engr.
44
Sarkki), a Master of Science degree holder inChemical Engineering; (3) Henry K. Wong, a degree holder of Bachelor
45
of Science Major in Mechanical Engineering from Worcester Polytechnic Institute; (4) Dr. Ely Anthony R. Ouano (Dr.
46
Ouano), a licensed Chemical Engineer, Sanitary Engineer, and Environmental Planner in the Philippines; and (5) 47
David C. Evangelista (Mr. Evangelista), a Business Development Analyst working for RP Energy. 48
SBMA, for its part, presented its Legal Department Manager, Atty. Von F. Rodriguez (Atty. Rodriguez). 49
The DENR, however, presented no evidence. 50
Meanwhile, on October 31, 2012, a Certificate of Non-Overlap (CNO) was issued in connection with RP Energy’s
application for the 2x300-MW coal-fired power plant. 51
On November 15, 2012, the DENR-EMB granted RP Energy’s application for the third amendment to its ECC,
approving the construction and operation of a 2x300-MW coal-fired power plant, among others. 52
Ruling of the Court of Appeals
On January 30, 2013, the CA rendereda Decision denying the privilege of the writ of kalikasanand the application for
an environment protection order due to the failure of the Casiño Group to prove that its constitutional right to a
balanced and healthful ecology was violated or threatened. The CA likewise found no reason to nullify Section 8.3
53
ofDAO No. 2003-30. It said that the provision was not ultra vires,as the express power of the Secretary of the DENR,
the Director and Regional Directors of the EMB to issue an ECC impliedly includes the incidental power to amend the
same. In any case, the CA ruled that the validity of the said section could not becollaterally attacked in a petition for
54
a writ of kalikasan.55
Nonetheless, the CA resolved to invalidate the ECC dated December 22, 2008 for non-compliance with Section 59 of
the IPRA Law and Sections 26 and 27 of the LGC and for failure of Luis Miguel Aboitiz (Mr. Aboitiz), Director of RP
56 57
Energy, to affix his signature in the Sworn Statement of Full Responsibility, which is an integral part of the ECC. Also 58
declared invalid were the ECC first amendment dated July 8, 2010 and the ECC second amendment dated May 26,
2011 in view of the failure of RP Energy to comply with the restrictions set forth in the ECC, which specifically require
that "any expansion of the project beyond the project description or any change in the activity x x x shall be subject to
a new Environmental Impact Assessment." However, as to the ECC third amendment dated November 15, 2012, the
59
CA decided not to rule on its validity since it was not raised as an issue during the preliminary conference. 60
The CA also invalidated the LDA entered into by SBMA and RP Energy as it was issued without the prior consultation
and approval of all the sanggunians concerned as required under Sections 26 and 27 of the LGC, and in violation of
61
Section 59, Chapter VIII ofthe IPRA Law, which enjoins all departments and other governmental agencies from
granting any lease without a prior certification that the area affected does not overlap with any ancestral
domain. The CA noted that no CNO was secured from the NCIP prior to the execution of the LDA, and that the
62 63
CNO dated October 31, 2012 was secured during the pendency of the case and was issued in connection with RP
Energy’s application for a 2x300-MW coalfired power plant. 64
Thus, the CA disposed of the case in this wise:
WHEREFORE, premises considered, judgment is hereby rendered DENYING the privilege of the writ of kalikasan
and the application for an environmental protection order. The prayer to declare the nullity of Section 8.3 of the DENR
Administrative Order No. 2003-30 for being ultra vires is DENIED; and the following are all declared INVALID:
1. The Environmental Compliance Certificate (ECC Ref. Code: 0804-011-4021) dated 22 December 2008
issued in favor of respondent Redondo Peninsula Energy, Inc. by former Secretary Jose L. Atienza, Jr. of
the Department of Environment and Natural Resources;
2. The ECC first amendment dated 08 July 2010 and ECC second amendment dated 26 May 2011, both
issued in favor ofrespondent Redondo Peninsula Energy, Inc. by OIC Director Atty. Juan Miguel T. Cunaof
the Department of Environment and Natural Resources, Environmental Management Bureau; and
3. The Lease and Development Agreement dated 08 June 2010 entered into by respondents Subic Bay
Metropolitan Authority and Redondo Peninsula Energy, Inc. involving a parcel of land consisting of
₱380,004.456 square meters.
SO ORDERED. 65
The DENR and SBMA separately moved for reconsideration. RP Energy filed a Motion for Partial
66
Reconsideration, attaching thereto a signed Statement of Accountability. The Casiño Group, on the other hand,
67 68
filed Omnibus Motions for Clarification and Reconsideration. 69
On May 22, 2013, the CAissued a Resolution denying the aforesaid motions for lack of merit. The CA opined that
70
the reliefs it granted in its Decision are allowed under Section 15, Rule 7 of the Rules of Procedure for Environmental
Cases as the reliefs enumerated therein are broad, comprehensive, and nonexclusive. In fact, paragraph (e) of the
71
saidprovision allows the granting of "such other reliefs" in consonance with the objective, purpose, and intent of the
Rules. SBMA’s contention that the stoppage of a project for non-compliance with Section 59 of the IPRA Law may
72
only be done by the indigenous cultural communities or indigenous peoples was also brushed aside by the CA as the
Casiño Group did not file a case under the IPRA Law but a Petition for a Writ of Kalikasan, which is available to all
natural or juridical persons whose constitutional right to a balanced and healthful ecology is violated, or threatened to
be violated. As to RP Energy’s belated submission of a signed Statement of Accountability, the CA gaveno weight
73
and credenceto it as the belated submission of such document, long after the presentation of evidence of the parties
had been terminated, is not in accord with the rules of fair play. Neither was the CA swayed by the argument that the
74
omitted signature of Luis Miguel Aboitiz is a mere formal defect, which does not affect the validity of the entire
document. The dispositive portion of the Resolution reads: WHEREFORE,premises considered, respondents Subic
75
Bay Metropolitan Authority’s Motion for Reconsideration dated 18 February 2013, Department of Environment and
Natural Resources Secretary Ramon Jesus P. Paje’s Motion for Reconsideration dated 19 February 2013, and
Redondo Peninsula Energy, Inc.’s Motion for Partial Reconsideration dated 22 February 2013, as well as petitioners’
OmnibusMotions for Clarification and Reconsideration dated 25 February 2013,are all DENIED for lack of merit.
SO ORDERED. 76
Unsatisfied, the parties appealed to this Court.
The Casiño Group’s arguments
The Casiño Group, in essence, argues that it is entitled to a Writ of Kalikasan as it was able to prove that the
operation of the power plant would cause environmental damage and pollution, and that thiswould adversely affect
the residents of the provinces of Bataan and Zambales, particularly the municipalities of Subic, Morong, Hermosa,
and the City of Olongapo. It cites as basis RP Energy’s EIS, which allegedly admits that acid rain may occur in the
combustion of coal; that the incidence of asthma attacks among residents in the vicinity of the project site may
77
increasedue to exposure to suspended particles from plant operations; and that increased sulfur oxides (SOx) and
78
nitrogen oxides (NOx) emissions may occur during plant operations. It also claims that when the SBMA conducted
79
Social Acceptability Policy Consultations with different stakeholders on the proposed power plant, the results
indicated that the overall persuasion of the participants was a clear aversion to the project due to environmental,
health, economic and socio-cultural concerns. Finally, it contends that the ECC third amendment should also be
80
nullified for failure to comply with the procedures and requirements for the issuance of the ECC. 81
The DENR’s arguments
The DENR imputes error on the CAin invalidating the ECC and its amendments, arguing that the determination of the
validity of the ECC as well as its amendments is beyond the scope of a Petition for a Writ of Kalikasan. And even if it
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is within the scope, there is no reason to invalidate the ECC and its amendments as these were issued in accordance
with DAO No. 2003-30. The DENR also insists that contrary to the view of the CA, a new EIS was no longer
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necessary since the first EIS was still within the validity period when the first amendment was requested, and that this
is precisely the reason RP Energy was only required to submit an EPRMP in support of its application for the first
amendment. As to the second amendment, the DENR-EMB only required RP Energy to submit documents to
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support the proposed revision considering that the change in configuration of the power plant project, from 2x150MW
to 1x300MW, was not substantial. Furthermore, the DENR argues that no permits, licenses, and/or clearances from
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other government agencies are required in the processing and approval of the ECC. Thus, non-compliance with
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Sections 26 and 27 of the LGC as well as Section 59 ofthe IPRA Law is not a ground to invalidate the ECC and its
amendments. The DENR further posits that the ECC is not a concession, permit, or license but is a document
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certifying that the proponent has complied with all the requirements of the EIS System and has committed to
implement the approved Environmental Management Plan. The DENR invokes substantial justice so that the
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belatedly submitted certified true copy of the ECC containing the signature of Mr. Aboitiz on the Statement of
Accountability may be accepted and accorded weight and credence. 89
SBMA’s arguments
For its part, SBMA asserts that since the CA did not issue a Writ of Kalikasan, it should not have invalidated the LDA
and that in doing so, the CA acted beyond its powers. SBMA likewise puts in issue the legal capacity of the Casiño
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Group to impugn the validity of the LDA and its failure to exhaust administrative remedies. In any case, SBMA
91 92
contends that there is no legal basis to invalidate the LDA as prior consultation under Sections 26 and 27 of the LGC
is not required in this case considering that the area is within the SBFZ. Under RA 7227, it is the SBMA which has
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exclusive jurisdiction over projects and leases within the SBFZ and that in case of conflict between the LGC and RA
7227, it is the latter, a special law, which must prevail. Moreover, the lack of prior certification from the NCIP is
94
alsonot a ground to invalidate a contract. If at all, the only effect of non-compliance with the said requirement under
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Section 59 of the IPRA Law is the stoppage or suspension of the project. Besides, the subsequent issuance of a
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CNO has cured any legal defect found in the LDA. 97
RP Energy’s arguments
RP Energy questions the proprietyof the reliefs granted by the CA considering that it did not issue a writ of
kalikasanin favor of the Casiño Group. RP Energy is of the view that unless a writ of kalikasanis issued, the CA has
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no power to grant the reliefs prayed for in the Petition. And even if it does, the reliefs are limited to those enumerated
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in Section 15, Rule 7 of the Rules of Procedure for Environmental Cases and that the phrase "such other reliefs" in
paragraph (e) should be limited only to those of the same class or general nature as the four other reliefs
enumerated. As to the validity of the LDA, the ECC and its amendments, the arguments of RP Energy are basically
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the same arguments interposed by SBMA and the DENR. RP Energy maintains that the ECC and its amendments
were obtained in compliance with the DENR rules and regulations; that a CNO is not necessary in the execution of
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anLDA and in the issuance of the ECC and its amendments; and that prior approval of the local governments, which
102
may be affected by the project, are not required because under RA 7227, the decision of the SBMA shall prevail in
matters affecting the Subic Special Economic Zone (SSEZ), except in matters involving defense and security. RP 103
Energy also raises the issue of non-exhaustion of administrative remedies on the part of the Casiño
Group. Preliminaries
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This case affords us an opportunity to expound on the nature and scope of the writ of kalikasan. It presents some
interesting questions about law and justice in the context of environmental cases, which we will tackle in the main
body of this Decision.
But we shall first address some preliminary matters, in view of the manner by which the appellate court disposed of
this case.
The Rules on the Writ of Kalikasan, which is Part III of the Rules of Procedure for Environmental Cases, was
105 106
issued by the Court pursuant to its power to promulgate rules for the protection and enforcement of constitutional
rights, in particular, the individual’s rightto a balanced and healthful ecology. Section 1 of Rule 7 provides:
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Section 1. Nature of the writ.- The writ is a remedy available to a natural or juridical person, entity authorized by law,
people’s organization, nongovernmental organization, or any public interest group accredited by or registered with
any government agency, on behalf of persons whose constitutional right to a balanced and healthful ecology is
violated, or threatened with violation by an unlawful act or omission of a public official or employee, or private
individual or entity, involving environmental damage of such magnitude as to prejudice the life, health or property of
inhabitants in two or more cities or provinces.
The writ is categorized as a special civil action and was, thus, conceptualized as an extraordinary remedy,which aims
to provide judicial relief from threatened or actual violation/s of the constitutional right to a balanced and healthful
ecology of a magnitude or degree of damage that transcends political and territorial boundaries. It is intended "to
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provide a strongerdefense for environmental rights through judicial efforts where institutional arrangements of
enforcement, implementation and legislation have fallen short" and seeks "to address the potentially exponential
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nature of large-scale ecological threats." 111
Under Section 1 of Rule 7, the following requisites must be present to avail of this extraordinary remedy: (1) there is
an actual or threatened violation of the constitutional right to a balanced and healthful ecology; (2) the actual or
threatened violation arises from an unlawful act or omission of a public official or employee, or private individual or
entity; and (3) the actual or threatened violation involves or will lead to an environmental damage of such magnitude
as to prejudice the life, health or property ofinhabitants in two or more cities or provinces.
Expectedly, the Rules do not definethe exact nature or degree of environmental damage but only that it must be
sufficientlygrave, in terms of the territorial scope of such damage, so as tocall for the grant ofthis extraordinary
remedy. The gravity ofenvironmental damage sufficient to grant the writ is, thus, to be decided on a case-to-case
basis.
If the petitioner successfully proves the foregoing requisites, the court shall render judgment granting the privilege of
the writ of kalikasan. Otherwise, the petition shall be denied. If the petition is granted, the court may grant the reliefs
provided for under Section 15of Rule 7, to wit: Section 15. Judgment.- Within sixty (60) daysfrom the time the petition
is submitted for decision, the court shall render judgment granting or denying the privilege of the writ of kalikasan.
The reliefs that may be granted under the writ are the following:
(a) Directing respondent to permanently cease and desist from committing acts or neglecting the
performance of a duty in violation of environmental laws resulting in environmental destruction or damage;
(b) Directing the respondent public official, government agency, private person or entity to protect, preserve,
rehabilitate or restore the environment;
(c) Directing the respondent public official, government agency, private person or entity to monitor strict
compliance with the decision and orders of the court;
(d) Directing the respondent public official, government agency, or private person or entity to make periodic
reports on the execution of the final judgment; and
(e) Such other reliefs which relate to the right of the people to a balanced and healthful ecology or to the
protection, preservation, rehabilitation or restoration of the environment, except the award of damages to
individual petitioners.
It must be noted, however,that the above enumerated reliefs are non-exhaustive. The reliefs that may be granted
under the writ are broad, comprehensive and non-exclusive. 112
Prescinding from the above, the DENR, SBMA and RP Energy are one in arguing that the reliefs granted by the
appellate court, i.e.invalidating the ECC and its amendments, are improper because it had deniedthe Petition for Writ
of Kalikasanupon a finding that the Casiño Group failed to prove the alleged environmental damage, actual or
threatened, contemplated under the Rules.
Ordinarily, no reliefs could and should be granted. But the question may be asked, could not the appellate court have
granted the Petition for Writ of Kalikasanon the ground of the invalidity of the ECC for failure to comply with certain
laws and rules?
This question is the starting point for setting up the framework of analysis which should govern writ of kalikasan
cases.
In their Petition for Writ of Kalikasan, the Casiño Group’s allegations, relative to the actual or threatened violation of
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the constitutional right to a balanced and healthful ecology, may be grouped into two.
The first set of allegations deals withthe actual environmental damage that will occur if the power plant project
isimplemented. The Casiño Group claims that the construction and operation of the power plant will result in (1)
thermal pollution of coastal waters, (2) air pollution due to dust and combustion gases, (3) water pollution from toxic
coal combustion waste, and (4) acid deposition in aquatic and terrestrial ecosystems, which will adversely affect the
residents of the Provinces of Bataan and Zambales, particularly the Municipalities of Subic, Morong and Hermosa,
and the City of Olongapo.
The second set of allegations deals with the failureto comply with certain laws and rules governing or relating to the
issuance ofan ECC and amendments thereto. The Casiño Group claims that the ECC was issued in violation of (1)
the DENR rules on the issuance and amendment of an ECC, particularly, DAO 2003-30 and the Revised Procedural
Manual for DAO 2003-30 (Revised Manual), (2) Section 59 of the IPRA Law,and (3) Sections 26 and 27 of the LGC.
In addition, it claims that the LDA entered into between SBMA and RP Energy violated Section 59 of the IPRA Law.
As to the first set of allegations, involving actual damage to the environment, it is not difficult to discern that, if they
are proven, then the Petition for Writ of Kalikasan could conceivably be granted.
However, as to the second set of allegations, a nuanced approach is warranted. The power of the courts to nullify an
ECC existed even prior to the promulgation of the Rules on the Writ of Kalikasanfor judicial review of the acts of
administrative agencies or bodies has long been recognized subject, of course, to the doctrine of exhaustion of
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administrative remedies. 115
But the issue presented before us is nota simple case of reviewing the acts of an administrative agency, the DENR,
which issued the ECC and its amendments. The challenge to the validity ofthe ECC was raised in the context of a writ
of kalikasancase. The question then is, can the validity of an ECC be challenged viaa writ of kalikasan?
We answer in the affirmative subject to certain qualifications.
As earlier noted, the writ of kalikasanis principally predicated on an actual or threatened violation of the constitutional
right to a balanced and healthful ecology, which involves environmental damage of a magnitude that transcends
political and territorial boundaries. A party, therefore, who invokes the writ based on alleged defects or irregularities in
the issuance of an ECC must not only allege and prove such defects or irregularities, but mustalso provide a causal
link or, at least, a reasonable connection between the defects or irregularities in the issuance of an ECC and the
actual or threatened violation of the constitutional right to a balanced and healthful ecology of the magnitude
contemplated under the Rules. Otherwise, the petition should be dismissed outright and the action re-filed before the
proper forum with due regard to the doctrine of exhaustion of administrative remedies. This must be so ifwe are to
preserve the noble and laudable purposes of the writ against those who seek to abuse it.
An example of a defect or an irregularity in the issuance of an ECC, which could conceivably warrant the granting of
the extraordinary remedy of the writ of kalikasan, is a case where there are serious and substantial
misrepresentations or fraud in the application for the ECC, which, if not immediately nullified, would cause actual
negative environmental impacts of the magnitude contemplated under the Rules, because the government
agenciesand LGUs, with the final authority to implement the project, may subsequently rely on such substantially
defective or fraudulent ECC in approving the implementation of the project.
To repeat, in cases of defects or irregularities in the issuance of an ECC, it is not sufficient to merely allege such
defects or irregularities, but to show a causal link or reasonable connection with the environmental damage of the
magnitude contemplated under the Rules. In the case at bar, no such causal link or reasonable connection was
shown or even attempted relative to the aforesaid second set of allegations. It is a mere listing of the perceived
defects or irregularities in the issuance of the ECC. This would havebeen sufficient reason to disallow the resolution
of such issues in a writ of kalikasan case.
However, inasmuch as this is the first time that we lay down this principle, we have liberally examined the alleged
defects or irregularities in the issuance of the ECC and find that there is only one group of allegations, relative to the
ECC, that can be reasonably connected to anenvironmental damageof the magnitude contemplated under the Rules.
This is withrespect to the allegation that there was no environmental impact assessment relative to the first and
second amendments to the subject ECC. If this were true, then the implementation of the project can conceivably
actually violate or threaten to violate the right to a healthful and balanced ecology of the inhabitants near the vicinity
of the power plant. Thus, the resolution of such an issue could conceivably be resolved in a writ of kalikasan case
provided that the case does not violate, or is anexception to the doctrine of exhaustion of administrative remedies and
primary jurisdiction.
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As to the claims that the issuance of the ECC violated the IPRA Law and LGC and that the LDA, likewise, violated the
IPRA Law, we find the same not to be within the coverage of the writ of kalikasanbecause, assuming there was non-
compliance therewith, no reasonable connection can be made to an actual or threatened violation of the right to a
balanced and healthful ecology of the magnitude contemplated under the Rules.
To elaborate, the alleged lackof approval of the concerned sanggunians over the subject project would not lead toor
is not reasonably connected with environmental damage but, rather, it is an affront to the local autonomy of LGUs.
Similarly, the alleged lack of a certificate precondition that the project site does not overlap with an ancestral domain
would not result inor is not reasonably connected with environmental damage but, rather, it is an impairment of the
right of Indigenous Cultural Communities/Indigenous Peoples (ICCs/IPs) to their ancestral domains. These alleged
violationscould be the subject of appropriate remedies before the proper administrative bodies (like the NCIP) or a
separate action to compel compliance before the courts, as the case may be. However, the writ of kalikasan would
not be the appropriate remedy to address and resolve such issues.
Be that as it may, we shall resolve both the issues proper in a writ of kalikasan case and those which are not,
commingled as it were here, because of the exceptional character of this case. We take judicial notice of the looming
power crisis that our nation faces. Thus, the resolution of all the issues in this case is of utmost urgency and
necessity in order to finally determine the fate of the project center of this controversy. If we were to resolve only the
issues proper in a writ of kalikasancase and dismiss those not proper therefor, that will leave such unresolved issues
open to another round of protracted litigation. In any case, we find the records sufficient to resolve all the issues
presented herein. We also rule that, due to the extreme urgency of the matter at hand, the present case is an
exception to the doctrine of exhaustion of administrative remedies. As we have often ruled, in exceptional cases, we
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can suspend the rules of procedure in order to achieve substantial justice, and to address urgent and paramount
State interests vital to the life of our nation.
Issues
In view of the foregoing, we shall resolve the following issues:
1. Whether the Casiño Group was able to prove that the construction and operation of the power plant will
cause grave environmental damage.
1.1. The alleged thermal pollution of coastal waters, air pollution due to dust and combustion
gases, water pollution from toxic coal combustion waste, and acid deposition to aquatic and
terrestrial ecosystems that will becaused by the project.
1.2. The alleged negative environmental assessment of the project by experts in a report generated
during the social acceptability consultations.
1.3. The alleged admissions of grave environmental damage in the EIS itself of the project.
2. Whether the ECC is invalid for lackof signature of Mr. Luis Miguel Aboitiz, as representative of RP Energy,
in the Statement of Accountability of the ECC.
3. Whether the first and second amendments to the ECC are invalid for failure to undergo a new
environmental impact assessment (EIA) because of the utilization of inappropriate EIA documents.
4. Whether the Certificate of Non-Overlap, under Section 59 of the IPRA Law, is a precondition to the
issuanceof an ECC and the lack of its prior issuance rendered the ECC invalid.
5. Whether the Certificate of Non-Overlap, under Section 59 of the IPRA Law, is a precondition to the
consummation of the Lease and Development Agreement (LDA) between SBMA and RPEnergy and the
lack of its prior issuance rendered the LDA invalid.
6. Whether compliance with Section 27, in relation to Section 26, of the LGC (i.e., approval of the concerned
sanggunianrequirement) is necessary prior to the implementation of the power plant project.
7. Whether the validity of the third amendment to the ECC can be resolved in this case.
Ruling
The parties to this case appealed from the decision of the appellate court pursuant to Section 16, Rule7 of the Rules
of Procedure for Environmental Cases, viz:
Section 16. Appeal.- Within fifteen (15) days from the date of notice of the adverse judgment or denialof motion for
reconsideration, any party may appeal to the Supreme Court under Rule45 of the Rules of Court. The appeal may
raise questions of fact. (Emphasis supplied)
It is worth noting that the Rules on the Writ of Kalikasan allow the parties to raise, on appeal, questions of fact— and,
thus, constitutes an exception to Rule 45 of the Rules of Court— because ofthe extraordinary nature of the
circumstances surrounding the issuance of a writ of kalikasan. Thus, we shall review both questions of law and fact
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in resolving the issues presented in this case.
We now rule on the above-mentioned issues in detail.
I.
Whether the Casiño Group was able to prove that the construction and operation of the power plant will cause grave
environmental damage.
The alleged thermal pollution of coastal

waters, air pollution due to dust and
combustion gases, water pollution from
toxic coal combustion waste, and acid
deposition in aquatic and terrestrial
ecosystems that willbe caused by the
project.
As previously noted, the Casiño Group alleged that the construction and operation of the power plant shall adversely
affect the residents of the Provinces of Bataan and Zambales, particularly, the Municipalities of Subic, Morong and
Hermosa, and the City of Olongapo, as well as the sensitive ecological balance of the area. Their claims of ecological
damage may be summarized as follows:
1. Thermal pollution of coastal waters. Due to the discharge of heated water from the operation of the plant,
they claim that the temperature of the affected bodies of water will rise significantly. This will have adverse
effects on aquatic organisms. It will also cause the depletion of oxygen in the water. RP Energy claims that
there will beno more than a 3°C increase in water temperature but the Casiño Group claims that a 1°C to
2°C rise can already affect the metabolism and other biological functions of aquatic organisms such
asmortality rate and reproduction.
2. Air pollution due to dust and combustion gases. While the Casiño Group admits that Circulating Fluidized
Bed (CFB) Coal technology, which will be used in the power plant, is a clean technology because it reduces
the emission of toxic gases, it claims that volatile organic compounds, specifically, polycyclic aromatic
hydrocarbons (PAHs) will also be emitted under the CFB. PAHs are categorized as pollutants with
carcinogenic and mutagenic characteristics. Carbon monoxide, a poisonous gas, and nitrous oxide, a lethal
global warming gas, will also be produced.
3. Water pollution from toxic coal combustion waste. The waste from coal combustion or the residues from
burning pose serious environmental risk because they are toxic and may cause cancer and birth defects.
Their release to nearby bodies of water will be a threatto the marine ecosystem of Subic Bay. The project is
located in a flood-prone area and is near three prominent seismic faults as identified by Philippine Institute of
Volcanology and Seismology. The construction of an ash pond in an area susceptible to flooding and
earthquake also undermines SBMA’s duty to prioritize the preservation of the water quality in Subic Bay.
4. Acid deposition in aquatic and terrestrial ecosystems. The power plant will release 1,888 tons of nitrous
oxides and 886 tons of sulfur dioxide per year. These oxides are responsible for acid deposition. Acid
deposition directly impacts aquatic ecosystems. It is toxic to fish and other aquatic animals. It will also
damage the forests near Subic Bay as well as the wildlife therein. This will threaten the stability of the
biological diversity of the Subic Bay Freeport which was declared as one of the ten priority sites among the
protected areas in the Philippines and the Subic Watershed and Forest Reserve. This will also have an
adverse effect on tourism. 119
In its January 30, 2013 Decision, the appellate court ruled that the Casiño Group failed to prove the above
allegations.
We agree with the appellate court.
Indeed, the three witnesses presented by the Casiño Group are not experts on the CFB technology or on
environmental matters. These witnesses even admitted on cross-examination that theyare not competent to testify on
the environmental impact of the subject project. What is wanting in their testimonies is their technical knowledgeof the
project design/implementation or some other aspects of the project, even those not requiring expertknowledge, vis-à-
vis the significant negative environmental impacts which the Casiño Group alleged will occur. Clearly, the Casiño
Group failed to carry the onusof proving the alleged significant negative environmental impacts of the project. In
comparison, RP Energy presented several experts to refute the allegations of the Casiño Group.
As aptly and extensively discussed by the appellate court:
Petitioners presented three (3) witnesses, namely, Palatino, Hermoso, and Lacbain, all of whom are not experts on
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the CFB technology or even on environmental matters. Petitioners did not present any witness from Morong or
Hermosa. Palatino, a former freelance writer and now a Congressman representing the Kabataan Partylist, with a
degree of BS Education major in Social Studies, admitted that he is not a technical expert. Hermoso, a Director of the
PREDA foundation which is allegedly involved on environmental concerns, and a member of Greenpeace, is not an
expert on the matter subject of this case. He is a graduate of BS Sociology and a practicing business director
involved in social development and social welfare services. Lacbain, incumbent ViceGovernor of the Province of
Zambales, anaccounting graduate with a Master in Public Administration, was a former BancoFilipino teller,
entertainment manager, disco manager, marketing manager and college instructor, and is also not an expert on the
CFB technology. Lacbain also admitted that he is neither a scientist nor an expert on matters of the environment.
Petitioners cited various scientific studies or articles and websites culled from the internet. However, the said
scientific studiesand articles including the alleged Key Observations and Recommendations on the EIS of the
Proposed RPE Project by Rex Victor O. Cruz (Exhibit "DDDDD") attached to the Petition, were not testified to by an
expert witness, and are basically hearsay in nature and cannot be given probative weight. The article purportedly
written by Rex Victor O. Cruz was not even signed by the said author, which fact was confirmed by Palatino.
Petitioners’ witness, Lacbain, admitted that he did not personally conduct any study on the environmental or health
effects of a coal-firedpower plant, but only attended seminars and conferences pertaining to climate change; and that
the scientific studies mentioned in the penultimate whereas clause of Resolution No. 2011-149 (Exhibit "AAAAA") of
the Sangguniang Panlalawiganof Zambales is based on what he read on the internet, seminars he attended and what
he heard from unnamed experts in the field of environmental protection.
In his Judicial Affidavit (Exhibit "HHHHH"), Palatino stated that he was furnished by the concerned residents the Key
Observations and Recommendations on the EIS of Proposed RPE Project by Rex Victor O. Cruz, and that he merely
received and read the five (5) scientific studies and articles which challenge the CFB technology. Palatino also
testified that: he was only furnished by the petitioners copies of the studies mentioned in his Judicial Affidavit and he
did not participate in the execution, formulation or preparation of any of the said documents; he does not personally
know Rex Cruz or any of the authors of the studies included in his Judicial Affidavit; he did not read other materials
about coal-fired power plants; he is not aware of the acceptable standards as far as the operation of a coal-fired
power plant is concerned; petitioner Velarmino was the one who furnished him copies of the documents in reference
to the MOU and some papers related to the case; petitioner Peralta was the one who e-mailed to him the soft copy
ofall the documents [letters (a) to (o) of his Judicial Affidavit], except the LGU Resolutions; and he has never been at
the actual Power Plant projectsite. It must be noted that petitioners Velarmino and Peralta were never presented as
witnesses in this case. In addition, Palatino did not identify the said studies but simplyconfirmed that the said studies
were attached to the Petition.
Indeed, under the rules of evidence, a witness can testify only to those facts which the witness knows of his orher
personal knowledge, that is, which are derived from the witness’ own perception. Concomitantly, a witness may not
testify on matters which he or she merely learned from others either because said witness was told or read or heard
those matters. Such testimony is considered hearsay and may not be received as proof of the truth of what the
witness has learned. This is known as the hearsay rule. Hearsay is notlimited to oral testimony or statements; the
general rule that excludes hearsay as evidence applies to written, as well as oral statements. There are several
exceptions to the hearsay rule under the Rules of Court, among which are learned treatises under Section 46 of Rule
130, viz:
"SEC. 46. Learned treatises. -A published treatise, periodical or pamphlet on a subjectof history, law, science, or art
is admissible as tending to prove the truth of a matter stated therein if the court takes judicial notice, or a witness
expert in the subject testifies, that the writer of the statement in the treatise, periodical or pamphlet is recognized in
his profession or calling as expert in the subject."
The alleged scientific studies mentioned in the Petition cannot be classified as learned treatises. We cannot take
judicial notice of the same, and no witness expert in the subjectmatter of this case testified, that the writers of the said
scientific studies are recognized in their profession or calling as experts in the subject.
In stark contrast, respondent RP Energy presented several witnesses on the CFB technology.
In his Judicial Affidavit, witness Wong stated that he obtained a Bachelor of Science, Major in Mechanical
Engineering from Worcester Polytechnic Institute; he is a Consulting Engineer of Steam Generators of URS; he was
formerly connected with Foster Wheeler where he held the positions of site commissioning engineer, testing
engineer, instrumentation and controls engineer, mechanical equipment department manager, director of boiler
performance and mechanical design engineering and pulverized coal product director. He explained that: CFB stands
for Circulating Fluidized Bed; it is a process by which fuel is fed to the lower furnace where it is burned in an upward
flow of combustion air; limestone, which is used as sulfur absorbent, is also fed to the lower furnace along with the
fuel; the mixture offuel, ash, and the boiler bed sorbent material is carried to the upper part of the furnace and into a
cyclone separator; the heavier particles which generally consist of the remaining uncombusted fuel and absorbent
material are separated in the cyclone separator and are recirculated to the lower furnace to complete the combustion
of any unburned particles and to enhance SO2 capture by the sorbent; fly ash and flue gas exit the cyclone and the
fly ash is collected in the electrostatic precipitator; furnace temperature is maintained in the range of 800° to 900° C
by suitable heat absorbing surface; the fuel passes through a crusher that reduces the size to an appropriate size
prior to the introduction into the lower furnace along with the limestone; the limestone is used as a SO2 sorbent which
reacts with the sulfur oxides to form calcium sulfate, an inert and stable material; air fans at the bottom of the furnace
create sufficient velocity within the steam generator to maintain a bed of fuel, ash, and limestone mixture; secondary
air is also introduced above the bed to facilitate circulation and complete combustion of the mixture; the combustion
process generates heat, which then heats the boiler feedwater flowing through boiler tube bundles under pressure;
the heat generated in the furnace circuit turns the water to saturated steam which is further heated to superheated
steam; this superheated steam leaves the CFB boiler and expands through a steam turbine; the steam turbine is
directly connected to a generator that turns and creates electricity; after making its way through the steam turbine, the
low-pressure steam is exhausted downwards into a condenser; heat is removed from the steam, which cools and
condenses into water (condensate); the condensate is then pumped back through a train of feedwater heaters to
gradually increase its temperature beforethis water is introduced to the boiler to start the process all over again; and
CFB technology has advantagesover pulverized coal firing without backend cleanup systems, i.e., greater fuel
flexibility, lower SO2 and NOx emissions. Moreover, Wong testified, inter alia, that: CFBs have a wider range of
flexibility so they can environmentally handle a wider range of fuel constituents, mainly the constituent sulfur; and is
capable of handling different types of coal within the range of the different fuelconstituents; since CFB is the newer
technology than the PC or stalker fire, it has better environmental production; 50 percent ofthe electric generation in
the United States is still produced by coal combustion; and the CFB absorbs the sulfur dioxide before it is emitted;
and there will be a lower percentage of emissions than any other technology for the coal.
In his Judicial Affidavit, Sarrki, stated that: he is the Chief Engineer for Process Concept in FosterWheeler; he was a
Manager of Process Technology for Foster Wheeler from 1995 to 2007; and he holds a Master of Science degree in
Chemical Engineering.He explained that: CFB boilers will emit PAHs but only in minimal amounts, while BFB will
produce higher PAH emissions; PAH is a natural product of any combustion process; even ordinary burning, such as
cooking or driving automobiles, will have some emissions that are not considered harmful; it is only when emissions
are of a significant level that damage may be caused; a CFB technology has minimal PAH emissions; the high
combustion efficiency of CFB technology, due to long residence time of particles inside the boiler, leads to minimal
emissions of PAH; other factors such as increase in the excess air ratio[,] decrease in Ca/S, as well as decrease in
the sulfur and chlorine contents of coal will likewise minimize PAH production; and CFB does not cause emissions
beyond scientificallyacceptable levels. He testified, inter alia, that: the CFB technology is used worldwide; they have a
50% percent share of CFB market worldwide; and this will be the first CFB by Foster Wheeler in the Philippines;
Foster Wheeler manufactures and supplies different type[s] of boilers including BFB, but CFB is always applied on
burning coal, so they do not apply any BFB for coal firing; CFB has features which have much better combustion
efficiency, much lower emissions and it is more effective as a boiler equipment; the longer the coal stays inthe
combustion chamber, the better it is burned; eight (8) seconds is already beyond adequate but it keeps a margin; in
CFB technology, combustion technology is uniform throughout the combustion chamber; high velocity is used in CFB
technology, that is vigorous mixing or turbulence; turbulence is needed to get contact between fuel and combustion
air; and an important feature of CFB is air distribution.
In his Judicial Affidavit, Ouano stated that: he is a licensed Chemical Engineer, Sanitary Engineer and Environmental
Planner in the Philippines; he is also a chartered Professional Engineer inAustralia and a member of the colleges of
environmental engineers and chemical engineers of the Institution of Engineers (Australia); he completed his
Bachelor in Chemical Engineering in 1970, Master of Environmental Engineering in 1972 and Doctor of
Environmental Engineering in 1974; he also graduated from the University of Sydney Law School with the degree of
Master of Environmental Law in 2002 and PhD in Law from Macquarie University in 2007. He explained in his Judicial
Affidavit that: the impacts identified and analyzed in the EIA process are all potential or likely impacts; there are a
larger number of EIA techniques for predicting the potential environmental impacts; it is important to note that all
those methods and techniques are only for predicting the potential environmental impacts, not the real impacts;
almost all environmental systems are non-linear and they are subject to chaotic behavior that even the most
sophisticated computer could not predict accurately; and the actual or real environmental impact could only be
established when the project is in actual operation. He testified, inter alia, that: the higher the temperature the higher
the nitrous oxide emitted; in CFB technology, the lower the temperature, the lower is the nitrogen oxide; and it still
has a nitrogen oxide but not as high as conventional coal; the CFB is the boiler; from the boiler itself,different pollution
control facilities are going to be added; and for the overall plant with the pollution control facilities, the particulate
matters, nitrogen oxide and sulfur dioxide are under control. (Citations omitted) 121
We also note that RP Energy controverted in detail the afore-summarized allegations of the Casiño Group on the four
areas of environmental damage that will allegedly occur upon the construction and operation of the power plant:
1. On thermal pollution of coastal waters.
As to the extent of the expected rise in water temperature once the power plant is operational, Ms. Mercado stated in
her JudicialAffidavit thus:
Q: What was the result of the Thermal Plume Modeling that was conducted for RP Energy?
A: The thermal dispersion modeling results show that largest warming change (0.95°C above ambient) is observed in
the shallowest (5 m) discharge scenario. The warmest surface temperature change for the deepest (30 m) scenario is
0.18°C. All the simulated scenarios comply with the DAO 90-35 limit for temperature rise of 3°C within the defined 70
x 70 m mixing zone. The proposed power plant location is near the mouth of Subic Bay, thus the tidal currents
influence the behavior of thermal discharge plume. Since the area is well-flushed, mixing and dilution of the thermal
discharge is expected.
It also concluded that corals are less likely to be affected by the cooling water discharge as corals may persist in
shallow marine waterswith temperatures ranging from 18°C to 36°C. The predicted highest temperature of 30.75°C,
from the 0.95°C increase in ambient in the shallowest (5 m) discharge scenario, is within this range. 122
In the same vein, Dr. Ouano stated in his Judicial Affidavit:
Q: In page 41, paragraph 99 of the Petition, it was alleged that: "x x x a temperature change of 1°C to 2°C canalready
affect the metabolism and other biological functions of aquatic organisms such as mortality rate and reproduction."
What is your expert opinion, if any, on this matter alleged by the Petitioners?
A: Living organisms have proven time and again that they are very adaptable to changes in the environment. Living
organisms have been isolated in volcanic vents under the ocean living on the acidic nutrient soup of sulfur and other
minerals emitted by the volcano to sub-freezing temperature in Antarctica. Asa general rule, metabolism and
reproductive activity [increase] with temperature until a maximum is reached after which [they decline]. For this
reason, during winter, animals hibernate and plants become dormant after shedding their leaves. It is on the onset of
spring that animals breed and plants bloom when the air and water are warmer. At the middle of autumn when the
temperature drops to single digit, whales, fish, birds and other living organisms, which are capable of migrating, move
to the other end of the globe where spring is just starting. In the processes of migration, those migratory species have
to cross the tropics where the temperature is not just one or two degrees warmer but 10 to 20 degrees warmer. When
discussing the impact of 1 to 2 degrees temperature change and its impact on the ecosystem, the most important
factors to consider are – (1) Organism Type – specifically its tolerance to temperature change (mammals have higher
tolerance); (2) Base Temperature – it is the temperature over the optimum temperature such that an increasewill
result in the decline in number of the organisms; (3) Mobility or Space for Migration (i.e., an aquarium with limited
space or an open ocean that the organism can move to a space more suited to [a] specific need, such as the
migratory birds); and (4) Ecosystem Complexity and Succession. The more complex the ecosystem the more stable it
is as succession and adaptation [are] more robust.
Normally, the natural variation in water temperature between early morning to late afternoon could be several
degrees (four to five degrees centigrade and up to ten degrees centigrade on seasonal basis). Therefore, the less
than one degree centigrade change predicted by the GHD modeling would have minimal impact. 123
On cross-examination, Dr. Ouano further explained—
ATTY. AZURA:
x x x When you say Organism Type – you mentioned that mammals have a higher tolerance for temperature change?
DR. OUANO:
Yes.
ATTY. AZURA:
What about other types of organisms, Dr. Ouano? Fish for example?
DR. OUANO:
Well, mammals have high tolerance because mammals are warm[- ]blooded. Now, when it comes to cold[-]blooded
animals the tolerance is much lower. But again when you are considering x x x fish [e]specially in open ocean you
have to remember that nature by itself is x x x very brutal x x x where there is always the prey-predator relationship.
Now, most of the fish that we have in open sea [have] already a very strong adaptability mechanism.And in fact,
Kingman back in 1964 x x x studied the coal reefaround the gulf of Oman where the temperature variation on day to
day basis varied not by 1 degree to 2 degrees but by almost 12 degrees centigrade. Now, in the Subic Bay area
which when you’re looking at it between daytime variation, early dawn when it is cold, the air is cold, the sea
temperature, sea water is quite cold. Then by 3:00 o’clock in the afternoon it starts to warm up. Sothe variation [in
the] Subic Bay area is around 2 to 4 degrees by natural variation from the sun as well as from the current that goes
around it. So when you are talking about what the report has said of around 1 degree change, the total impact x x x
on the fishes will be minimal. x x x
ATTY. AZURA:
x x x So, you said, Dr. Ouano, that fish, while they have a much lower tolerance for temperature variation, are still
very adaptable. What about other sea life, Dr. Ouano, for example, sea reptiles?
DR. OUANO:
That’s what I said. The most sensitive part of the marine ecology is physically the corals because corals are non-
migratory, they are fix[ed]. Second[ly] x x x corals are also highly dependent on sunlight penetration. If they are
exposed out of the sea, they die; if theyare so deep, they die. And that is why I cited Kingman in his studies of coral
adaptability [in] the sea ofOman where there was a very high temperature variation, [they] survived.
ATTY. AZURA:
Would you be aware, Dr. Ouano, if Kingman has done any studies in Subic Bay?
DR. OUANO:
Not in Subic Bay but I have reviewedthe temperature variation, natural temperature variation from the solar side, the
days side as well as the seasonal variation. There are two types of variation since temperatures are very critical. One
is the daily, which means from early morning to around 3:00 o’clock, and the other one is seasonal variation because
summer, December, January, February are the cold months and then by April, May we are having warm temperature
where the temperature goes around 32-33 degrees; Christmas time, it drops to around 18 to 20 degrees so it[']sa
variation of around seasonal variation of 14 degrees although some of the fish might even migrate and that is why I
was trying to put in corals because they are the ones that are really fix[ed]. They are not in a position to migrate in
this season.
ATTY. AZURA:
To clarify. You said that the most potentially sensitive part of the ecosystem would be the corals. DR. OUANO:
Or threatened part because they are the ones [that] are not in a position to migrate.
ATTY AZURA:
In this case, Dr. Ouano, with respectto this project and the projected temperature change, will the corals in Subic Bay
be affected?
DR. OUANO:
As far as the outlet is concerned, they have established it outside the coral area. By the time it reaches the coral area
the temperature variation, as per the GHD study is very small, it[’]s almost negligible.
ATTY AZURA:
Specifically, Dr. Ouano, what does negligible mean, what level of variation are we talking about?
DR. OUANO:
If you are talking about a thermometer, you might be talking about, normally about .1 degrees centigrade. That’sthe
one that you could more or less ascertain. x x x
ATTY. AZURA:
Dr. Ouano, you mentioned in youranswer to the same question, Question 51, that there is a normal variation in water
temperature. In fact, you said there is a variation throughout the day, daily and also throughout the year, seasonal.
Just to clarify, Dr. Ouano. When the power plant causes the projected temperature change of 1 degree to 2 degrees
Celsius this will be in addition to existing variations? What I mean, Dr. Ouano, just so I can understand, how will that
work? How will the temperature change caused by the power plant work with the existing variation? DR. OUANO:
There is something like what we call the zonal mixing. This is an area of approximately one or two hectares where the
pipe goes out, the hot water goes out. So that x x x, we have to accept x x x that [throughout it] the zone will be a
disturb[ed] zone. After that one or two hectares park the water temperature is well mixed [so] that the temperature
above the normal existing variation now practically drops down to almost the normal level. 124
2. On air pollution due todust and combustion gases.
To establish that the emissions from the operation of the power plant would be compliant with the standards under
the Clean Air Act, Ms. Mercado stated in her Judicial Affidavit thus:
125
271. Q: What was the result of the Air Dispersion Modeling that was conducted for RP Energy?
A: The Air Dispersion Modeling predicted that the Power Plant Project will produce the following emissions,which
[are] fully compliant with the standards set by DENR:
Predicted GLC for 1-hr

126
National Ambient Air Quality
averaging period Guideline Values
SO2 45.79 µg/Nm3 340 µg/Nm3
NO2 100.8 µg/Nm3 260 µg/Nm3
CO 10 µg/Nm3 35 µg/Nm3
Predicted GLC for 8-hr averaging National Ambient Air Quality

period Guideline Values
CO 0.19 mg/ncm 10 µg/Nm3
Predicted GLC for 24-hr averaging National Ambient Air Quality

SO2 17.11 µg/Nm3 180 µg/Nm3
NO2 45.79 µg/Nm3 150 µg/Nm3
Predicted GLC for 1-yr averaging National Ambient Air Quality

SO2 6.12 µg/Nm3 80 µg/Nm3
NO2 No standard ---
CO No standard ---
272. Q: What other findings resulted from the Air Dispersion Modeling, if any?
A: It also established that the highest GLC to CleanAir Act Standards ratio among possible receptors was located 1.6
km North NorthEast ("NNE") of the Power Plant Project. Further, this ratio was valued only at 0.434 or less than half
of the upper limit set out in the Clean Air Act. This means that the highest air ambient quality disruption will happen
only 1.6 km NNE of the Power Plant Project, and that such disruption would still be compliant with the standards
imposed by the Clean Air Act. 127
The Casiño Group argued, however, that, as stated inthe EIS, during upset conditions, significant negative
environmental impact will result from the emissions. This claim was refuted by RP Energy’s witness during cross-
examination:
ATTY. AZURA:
If I may refer you to another page of the same annex, Ms. Mercado, that’s page 202 of the same document, the
August 2012. Fig. 2-78 appears to show, there’s a Table, Ms. Mercado, the first table, the one on top appears to
show a comparison in normal and upset conditions. I noticed, Ms. Mercado, that the black bars are much higher than
the bars in normal condition. Can you state what this means?
MS. MERCADO:
It means there are more emissions that could potentially be released when it is under upset condition.
ATTY. AZURA:
I also noticed, Ms. Mercado, at the bottom part of this chart there are Receptor IDs, R1, R2, R3 and so forth and on
page 188 of this same document, Annex "9-Mercado," there is a list identifying these receptors, for example,
Receptor 6, Your Honor, appears to have been located in Olongapo City, Poblacion. Just so I can understand, Ms.
Mercado, does that mean that if upset condition[s] were to occur, the Olongapo City Poblacion will be affected by the
emissions? MS. MERCADO:
All it means is that there will be higher emissions and a higher ground concentration. But you might want to alsopay
attention to the "y axis," it says there GLC/CAA [Ground Level Concentration/Clean Air Act limit]. So it means that
even under upset conditions… say for R6, the ground level concentration for upset condition is still around .1 or 10%
percent only of the Clean Air Act limit. So it’s still much lower than the limit.
ATTY. AZURA:
But that would mean, would it not, Ms. Mercado, that in the event of upset conditions[,] emissionswould increase in
the Olongapo City Poblacion?
MS. MERCADO:
Not emissions will increase. The emissions will be the same but the ground level concentration, the GLC, will be
higher if you compare normal versus upset. But even if it[’]s under upset conditions, it is still only around 10% percent
of the Clean Air Act Limit.
xxxx
J. LEAGOGO:
So you are trying to impress upon this Court that even if the plant is in an upset condition, it will emit less than what
the national standards dictate?
MS. MERCADO:
Yes, Your Honor. 128

With respect to the claims that the powerplant will release dangerous PAHs and CO, Engr. Sarrki stated in his
Judicial Affidavit thus:
Q: In page 42, paragraph 102 of the Petition, the Petitioners alleged that Volatile Organic Compounds ("VOC")
specifically Polycyclic Aromatic Hydrocarbon ("PAH") will be emitted even by CFB boilers. What can you say about
this?
A: Actually, the study cited by the Petitioners does not apply to the present case because it does not refer to CFB
technology. The study refers to a laboratory-scale tubular Bubbling Fluidized Bed ("BFB") test rig and not a CFB. CFB
boilers will emit PAHs but only in minimal amounts. Indeed, a BFB will produce higher PAH emissions.
xxxx
Q: Why can the study cited by Petitioners not apply in the present case?
A: The laboratory-scale BFB used in the study only has one (1) air injection point and does not replicate the staged-
air combustion process of the CFB that RP Energy will use. Thisstaged-air process includes the secondary air.
Injecting secondary air into the system will lead to more complete combustion and inhibits PAH production. There is a
study entitled "Polycyclic Aromatic Hydrocarbon (PAH) Emissions from a Coal-Fired Pilot FBC System" byKunlei Liu,
Wenjun Han, Wei-Ping Pan, John T. Riley found in the Journal of Hazardous Materials B84 (2001) where the findings
are discussed.
Also, the small-scale test rig utilized in the study does not simulate the process conditions (hydrodynamics, heat
transfer characteristics, solid and gas mixing behavior, etc.) seen in a large scale utility boiler, like those which would
be utilized by the Power Plant Project.
xxxx
Q: Aside from residence time of particles and secondary air, what other factors, if any, reduce PAH production?
A: Increase in the excess air ratio will also minimizePAH production. Furthermore, decrease in Calcium to Sulfur
moral ratio ("Ca/S"), as well as decrease in the sulfur and chlorine contents of coal will likewise minimize PAH
production. This is also based on the study entitled "Polycyclic Aromatic Hydrocarbon (PAH) Emissions from a Coal-
Fired Pilot FBC System" by Kunlei Liu, Wenjun Han, Wei-Ping Pan, John T. Riley.
In RP Energy’s Power Plant Project, the projected coal to be utilized has low sulfur and chlorine contents minimizing
PAH production. Also, due to optimum conditions for the in-furnace SO2capture, the Ca/S will be relatively low,
decreasing PAH production.
Q: In paragraph 104 of the Petition, it was alleged that "Carbon monoxide (CO), a poisonous, colorless and odorless
gas is also produced when there is partial oxidation or when there is not enough oxygen (O2) to form carbon dioxide
(CO2)." What can you say about this?
A: CFB technology reduces the CO emissions of the Power Plant Project to safe amounts. In fact, I understand that
the projected emissions level of the Power Plant Project compl[ies]with the International Finance Corporation ("IFC")
standards. Furthermore, characteristics of CFB technology such as long residence time, uniform temperature and
high turbulence provide an effective combustion environment which results [in] lower and safer CO emissions.
Q: I have no further questions for youat the moment. Is there anything you wish to add to the foregoing?
A: Yes. PAH is a natural product of ANY combustion process. Even ordinary burning, such as cooking or driving
automobiles, will have some emissions that are not considered harmful. It is only when emissions are of a significant
level that damage may be caused.
Given that the Power Plant Project will utilize CFB technology, it will have minimal PAH emissions. The high
combustion efficiency of CFB technology, due to the long residence time of particles inside the boiler, leads to the
minimal emissions of PAH. Furthermore,other factors such as increase in the excess air ratio, decrease in Ca/S, as
well as decrease in the sulfur and chlorine contents of coal will likewise minimize PAH production. CFB does not
cause emissions beyond scientifically acceptable levels, and we are confident it will not result in the damage
speculated by the Petitioners. 129
3. On water pollution from toxic coal combustion waste.
With regard to the claim that coal combustion waste produced by the plant will endanger the health of the inhabitants
nearby, Dr. Ouano stated in his Judicial Affidavit thus:
Q: In page 43, paragraph 110 of the Petition, it was alleged that: "[s]olid coal combustion waste is highly toxic and is
said to cause birth defects and cancer risks among others x x x." What is your expert opinion, if any, on this matter
alleged by the Petitioners?
A: Coal is geologically compressed remains of living organisms that roamed the earth several million years ago. In
the process of compression, some of the minerals in the soil, rocks or mud, the geologic media for compression, are
also imparted into the compressed remains. If the compressing media of mud, sediments and rocks contain high
concentration of mercury, uranium, and other toxic substances, the coal formed will likewise contain high
concentration of those substances. If the compressing materials have low concentration of those substances, then
the coal formed will likewise have low concentration of those substances. If the coal does not contain excessive
quantities of toxic substances, the solid residues are even used in agriculture to supply micronutrients and improve
the potency of fertilizers. It is used freely as a fill material in roads and other construction activities requiring large
volume of fill and as additive in cement manufacture. After all, diamonds that people love to hang around their necks
and keep close to the chest are nothing more than the result of special geologic action, as those in volcanic pipes on
coal.130
RP Energy further argued, a matter which the Casiño Group did not rebut or refute, that the waste generated by the
plant will be properly handled, to wit:
4.1.49 When coal is burned in the boiler furnace, two by-products are generated - bottom and fly ash.
Bottom ash consists oflarge and fused particles that fall to the bottom of the furnace and mix with the bed
media.Fly ash includes finegrained and powdery particles that are carried away by flue gas into the
electrostatic precipitator, which is then sifted and collected. These by-products are non-hazardous materials.
In fact, a coal power plant’s Fly Ash, Bottom Ash and Boiler Slag have consequent beneficial uses which
"generate significant environmental, economic, and performance benefits." Thus, fly ash generated during
the process will be sold and transported to cement manufacturing facilities or other local and international
industries.
4.1.50 RP Energy shall also install safety measures to insure that waste from burning of coal shall be
properly handled and stored.
4.1.51 Bottom ash will be continuously collected from the furnace and transferred through a series of screw
and chain conveyors and bucket elevator to the bottom ash silo. The collection and handling system is
enclosed to prevent dust generation. Discharge chutes will be installed at the base of the bottom ash silo for
unloading. Open trucks will be used to collect ash through the discharge chutes. Bottom ash will be sold,
and unsold ash will be stored in ash cells. A portion of the bottom ash will be reused as bed materialthrough
the installation of a bed media regeneration system (or ash recycle). Recycled bottom ash will be sieved
using a vibrating screen and transported to a bed material surge bin for re-injection into the boiler.
4.1.52 Fly ash from the electrostatic precipitator is pneumatically removed from the collection hopper using
compressed air and transported in dry state to the fly ash silo. Two discharge chutes will be installed at the
base of the fly ash silo. Fly ash can either be dry-transferred through a loading spout into an enclosed lorry
or truck for selling, re-cycling, or wet-transferred through a wet unloader into open dump trucks and
transported to ash cells. Fly ash discharge will operate in timed cycles, with an override function to
achievecontinuous discharge if required. Fly ash isolation valves in each branch line will prevent leakage
and backflow into non-operating lines.
4.1.53 Approximately 120,000m² will be required for the construction of the ash cell. Ash will be stacked
along the sloping hill, within a grid of excavations (i.e. cells) with a 5m embankment. Excavated soils will be
used for embankment construction and backfill. To prevent infiltration [of] ash deposits into the groundwater,
a clay layer with minimum depth of400mm will be laid at the base of each cell. For every 1-m depth of ash
deposit, a 10-cm soil backfill will be applied to immobilize ash and prevent migration via wind. Ash cell walls
will be lined with high-density polyethylene to prevent seepage. This procedure and treatment method is in
fact suitable for disposal of toxic and hazardous wastes although fly ash is not classified as toxic and
hazardous materials. 131
Anent the claims that the plant is susceptible to earthquake and landslides, Dr. Ouano testified thus:
J. LEAGOGO:
In terms of fault lines, did you study whether this project site is in any fault line?
DR. OUANO:
There are some fault linesand in fact, in the Philippines it is very difficult to find an area except Palawan where there
is no fault line within 20 to 30 [kilometers]. But then fault lines as well as earthquakes really [depend] upon your
engineering design. I mean, Sto. Tomas University has withstood all the potential earthquakes we had in Manila[,]
even sometimes it[’]s intensity 8 or so because the design for it back in 1600 they are already using what we call
floating foundation. So if the engineering side for it[,] technology is there to withstand the expected fault line
[movement]. J. LEAGOGO:
What is the engineering side of the project? You said UST is floating.
DR. OUANO:
The foundation, that means to say you don’t break…
J. LEAGOGO:
Floating foundation. What about this, what kind of foundation?
DR. OUANO:
It will now depend on their engineering design, the type of equipment…
J. LEAGOGO:
No, but did you read it in their report?
DR. OUANO: It[’]s not there in their report because it will depend on the supplier, the equipment supplier.
J. LEAGOGO:
So it[’]s not yet there?
DR. OUANO:
It[’]s not yet there in the site but it is also covered inour Building Code what are the intensities of earthquakes
expected of the different areas in the Philippines.
J. LEAGOGO:
Have you checked our geo-hazard maps in the Philippines to check on this project site?
DR. OUANO:
Yes. It is included there in the EIA Report.
J. LEAGOGO:
It[’]s there?
DR. OUANO:
It[’]s there. 132
4. On acid deposition in aquatic and terrestrial ecosystems.
Relative to the threat of acid rain, Dr. Ouano stated in his Judicial Affidavit, thus:
Q: In page 44, paragraph 114 of the Petition, it was alleged that "the coalfired power plant will release 1,888 tons of
nitrous oxides (NOx) per year and 886 tons of sulfur dioxide (SO2) per year. These oxides are the precursors to the
formation of sulfuric acid and nitric acid which are responsible for acid deposition." Whatis your expert opinion on this
matter alleged by the Petitioners?
A: NO2 is found in the air, water and soil from natural processes such as lightning, bacterial activities and geologic
activities as well as from human activities such as power plants and fertilizer usage in agriculture. SO2 is also found
in air, water and soil from bacterial, geologic and human activities. NO2 and SO2 in the air are part of the natural
nitrogen and sulfur cycle to widely redistribute and recycle those essential chemicals for use by plants. Without the
NO2 and SO2 in the air, plant and animal life would be limited to small areas of this planet where nitrogen and sulfur
are found in abundance. With intensive agricultural practices, nitrogen and sulfur are added in the soil as fertilizers.
Acid rain takes place when the NO2 and SO2 concentration are excessive or beyond those values set in the air
quality standards. NO2 and SO2 in the air in concentrations lower than those set in the standards have beneficial
effect to the environment and agriculture and are commonly known as micronutrients. 133
On clarificatory questions from the appellate court, the matter was further dissected thus:
J. LEAGOGO:
x x x The project will release 1,888 tons of nitrous oxide per year. And he said, yes; that witness answered, yes, itwill
produce 886 tons of sulfur dioxide per year. And he also answered yes, that these oxides are the precursors to the
formation of sulfuric acid and nitric acid. Now my clarificatory question is, with this kind of releases there will be acid
rain?
DR. OUANO:
No.
J. LEAGOGO:
Why?
DR. OUANO:
Because it[’]s so dilute[d].
J. LEAGOGO:
It will?
DR. OUANO:
Because the acid concentration is so dilute[d] so that it is not going to cause acid rain.
J. LEAGOGO:
The acid concentration is so diluted that it will not cause acid rain?
DR. OUANO:
Yes .
J. LEAGOGO:
What do you mean it[’]s so diluted? How will it be diluted?
DR. OUANO:
Because it[’]s going to be mixed withthe air in the atmosphere; diluted in the air in the atmosphere. And besides this
886 tons, this is not released in one go, it is released almost throughout the year.
J. LEAGOGO:
You also answered in Question No. 61, "acid raintakes place when the NO2 AND SO2 concentration are excessive."
So whendo you consider it as excessive?
DR. OUANO:
That is something when you are talking about acid…
J. LEAGOGO:
In terms of tons of nitrous oxide and tons of sulfur oxide, when do you consider it as excessive?
DR. OUANO:
It is in concentration not on tons weight, Your Honor.
J. LEAGOGO:
In concentration?
DR. OUANO:
In milligrams per cubic meter, milligrams per standard cubic meter.
J. LEAGOGO:
So being an expert, whatwill be the concentration of this kind of 1,888 tons of nitrous oxide? What will be the
concentration in terms of your…?
DR. OUANO:
If the concentration is in excess ofsomething like 8,000 micrograms per standard cubic meters, then there isalready
potential for acid rain.
J. LEAGOGO:
I am asking you, Dr. Ouano, you said it will release 1,888 tons of nitrous oxide?
DR. OUANO:
Yes .
J. LEAGOGO:
In terms of concentration, what will that be?
DR. OUANO:
In terms of the GHD study that will result [in] 19 milligrams per standard cubic meters and the time when acid rain will
start [is when the concentration gets] around 8,000 milligrams per standard cubic meters. So we have 19 compared
to 8,000. So weare very, very safe.
J. LEAGOGO:
What about SO2?
DR. OUANO:
SO2, we are talking about ... youwon’t mind if I go to my codigo. For sulfur dioxide this acid rain most likely will start
at around 7,000 milligrams per standard cubic meter but then … sorry, it[’]s around 3,400 micrograms per cubic
meter. That is the concentration for sulfur dioxide, and in our plant it will be around 45 micrograms per standard cubic
meter. So the acid rain will start at 3,400 and the emission is estimated here to result to concentration of 45.7
micrograms.
J. LEAGOGO:
That is what GHD said in their report.
DR. OUANO:
Yes. So that is the factor of x x x safety that we have. 134
Apart from the foregoing evidence, wealso note that the above and other environmental concerns are extensively
addressed in RP Energy’s Environmental Management Plan or Program(EMP). The EMP is "a section in the EIS that
details the prevention, mitigation, compensation, contingency and monitoring measures to enhance positive impacts
and minimize negative impacts and risks of a proposed project or undertaking." One of the conditions of the ECC is
135
that RP Energy shall strictly comply with and implement its approved EMP. The Casiño Group failed to contest, with
proof, the adequacy of the mitigating measures stated in the aforesaid EMP.
In upholding the evidence and arguments of RP Energy, relative to the lack of proof as to the alleged significant
environmental damage that will be caused by the project, the appellate court relied mainly on the testimonies of
experts, which we find to be in accord withjudicial precedents. Thus, we ruled in one case:
Although courts are not ordinarily bound by testimonies of experts, they may place whatever weight they choose
upon such testimonies in accordance with the facts of the case. The relative weight and sufficiency of expert
testimony is peculiarly within the province of the trial court to decide, considering the ability and character of the
witness, his actions upon the witness stand, the weight and process of the reasoning by which he has supported his
opinion, his possible bias in favor of the side for whom he testifies,the fact that he is a paid witness, the relative
opportunities for study and observation of the matters about which he testifies, and any other matters which serve to
illuminate his statements. The opinion of the expert may not be arbitrarily rejected; it isto be considered by the court
in view of all the facts and circumstances in the case and when common knowledge utterly fails, the expert opinion
may be given controlling effects (20 Am. Jur., 1056-1058). The problem of the credibility of the expert witness and the
evaluation of his testimony is left to the discretion of the trial court whose ruling thereupon is not reviewable inthe
absence of an abuse of that discretion. 136
Hence, we sustain the appellate court’s findings that the Casiño Group failed to establish the alleged grave
environmental damage which will be caused by the construction and operation of the power plant.
In another vein, we, likewise, agree with the observationsof the appellate court that the type of coal which shall be
used in the power plant has important implications as to the possible significant negative environmental impacts of
the subject project. However, there is no coal supply agreement, as of yet, entered into by RP Energy with a third-
137
party supplier. In accordance with the terms and conditions of the ECC and in compliance with existing environmental
laws and standards, RP Energy is obligated to make use of the proper coal type that will not cause significant
negative environmental impacts.
The alleged negative environmental

assessment of the project by experts in a
report generated during the social
acceptability consultations
The Casiño Group also relies heavily on a report on the social acceptability process of the power plant project to
bolster itsclaim that the project will cause grave environmental damage. We purposely discuss this matter in this
separate subsection for reasons which will be made clear shortly.
But first we shall present the pertinent contents of this report.
According to the Casiño Group, from December 7 to 9, 2011, the SBMA conducted social acceptabilitypolicy
consultations with different stakeholders on RP Energy’s proposed 600 MW coal plant project at the Subic Bay
Exhibition and Convention Center. The results thereof are contained in a document prepared by SBMA entitled "Final
Report: Social Acceptability Process for RP Energy, Inc.’s 600-MW Coal Plant Project" (Final Report). We notethat
SBMA adopted the Final Report as a common exhibit with the Casiño Group in the course of the proceedings before
the appellate court.
The Final Report stated that there was a clear aversion to the concept of a coal-fired power plant from the
participants. Their concerns included environmental, health, economic and socio-cultural factors. Pertinent to this
case is the alleged assessment, contained in the Final Report, of the potential effects of the project by three experts:
(1) Dr. Rex Cruz (Dr. Cruz), Chancellor of the University of the Philippines, Los Baños and a forest ecology expert,
(2) Dr. Visitacion Antonio, a toxicologist, who related information as to public health; and (3) Andre Jon Uychiaco, a
marine biologist.
The Final Report stated these experts’alleged views on the project, thus:
IV. EXPERTS’ OPINION
xxxx
The specialists shared the judgment that the conditions were not present to merit the operation of a coal-fired power
plant,and to pursue and carry out the project with confidence and assurance that the natural assets and ecosystems
within the Freeport area would not be unduly compromised, or that irreversible damage would not occur and that the
threats to the flora and fauna within the immediate community and its surroundings would be adequately addressed.
The three experts were also of the same opinion that the proposed coal plant project would pose a wide range of
negative impacts on the environment, the ecosystems and human population within the impact zone.
The specialists likewise deemed the Environment Impact Assessment (EIA) conducted by RPEI to be incomplete and
limited in scope based on the following observations:
i. The assessment failed to include areas 10km. to 50km. from the operation site, although according tothe
panel, sulfur emissions could extend as far as 40-50 km.
ii. The EIA neglected to include other forests in the Freeport in its scope and that there were no specific
details on the protection of the endangered flora and endemic fauna in the area. Soil, grassland, brush land,
beach forests and home gardens were also apparently not included in the study.
iii. The sampling methods used inthe study were limited and insufficient for effective long-term monitoring of
surface water, erosion control and terrestrial flora and fauna.
The specialists also discussed the potential effects of an operational coalfired power plant [on] its environs and the
community therein. Primary among these were the following:
i. Formation of acid rain, which would adversely affect the trees and vegetation in the area which, in turn,
would diminish forest cover. The acid rain would apparently worsen the acidity of the soil in the Freeport.
ii. Warming and acidification of the seawater in the bay, resulting in the bio-accumulationof contaminants
and toxic materials which would eventually lead to the overall reduction of marine productivity.
iii. Discharge of pollutants such as Nitrous Oxide, Sodium Oxide, Ozone and other heavy metals suchas
mercury and lead to the surrounding region, which would adversely affect the health of the populace in the
vicinity.
V. FINDINGS
Based on their analyses of the subject matter, the specialists recommended that the SBMA re-scrutinize the coal-
fired power plant project with the following goals in mind:
i. To ensure its coherence and compatibility to [the] SBMA mandate, vision, mission and development plans,
including its Protected Area Management Plan;
ii. To properly determine actual and potential costs and benefits;
iii. To effectively determine the impacts on environment and health; and
iv. To ensure a complete and comprehensive impacts zone study.
The specialists also urged the SBMA to conduct a Comprehensive Cost And Benefit Analysis Of The Proposed Coal
Plant Project Relative To Each Stakeholder Which Should Include The Environment As Provider Of Numerous
Environmental Goods And Services.
They also recommended an Integrated/Programmatic Environmental Impact Assessmentto accurately determine the
environmental status of the Freeport ecosystem as basis and reference in evaluating future similar projects. The need
for a more Comprehensive Monitoring System for the Environment and Natural Resourceswas also reiterated by the
panel.138
Of particular interest are the alleged key observations of Dr. Cruz on the EIS prepared by RP Energy relative to the
project:
Key Observations and Recommendations on the EIS of Proposed RPE Project

Rex Victor O. Cruz
Based on SBMA SAP on December 7-9, 2011
1. The baseline vegetation analysis was limited only within the project site and its immediate vicinity. No
vegetation analysis was done in the brushland areas in the peninsula which is likely to be affected in the
event acid rain forms due to emissions from the power plant.
2. The forest in the remaining forests inthe Freeport was not considered as impact zone as indicated by the
lack ofdescription of these forests and the potential impacts the project might have on these forests. This
appears to be a key omission in the EIS considering that these forests are well within 40 to 50 km away from
the site and that there are studies showing that the impacts of sulphur emissions can extend as far as 40 to
50 km away from the source.
3. There are 39 endemic fauna and 1 endangered plant species (Molave) in the proposed project site. There
will be a need to make sure that these species are protected from being damaged permanently in wholesale.
Appropriate measures such as ex situconservation and translocation if feasible must be implemented.
4. The Project site is largely in grassland interspersed with some trees. These plants if affected by acid rain
or by sulphur emissions may disappear and have consequences on the soil properties and hydrological
processes in the area. Accelerated soil erosion and increased surface runoff and reduced infiltration of
rainwater into the soil.
5. The rest of the peninsula is covered with brushland but were never included as part of the impact zone.
6. There are home gardens along the coastal areas of the site planted to ornamental and agricultural crops
which are likely to be affected by acid rain.
7. There is also a beach forest dominated by aroma, talisai and agoho which will likely be affectedalso by
acid rain.
8. There are no Environmentally Critical Areas within the 1 km radius from the project site. However, the
OlongapoWatershed Forest Reserve, a protected area is approximately 10 kmsouthwest of the projectsite.
Considering the prevailing wind movement in the area, this forest reserve is likely to be affected by acid rain
if it occurs from the emission of the power plant. This forest reserve is however not included as partof the
potential impact area.
9. Soil in the project site and the peninsula is thin and highly acidic and deficient in NPK with moderate to
severe erosion potential. The sparse vegetation cover in the vicinity of the projectsite is likely a result of the
highly acidic soil and the nutrient deficiency. Additional acidity may result from acid rain that may form in the
area which could further make it harder for the plants to grow in the area that in turn could exacerbate the
already severe erosion in the area. 10. There is a need to review the proposalto ensure that the proposed
project is consistent with the vision for the Freeport as enunciated in the SBMA Master Plan and the
Protected Area Management Plan. This will reinforce the validity and legitimacy of these plans as a
legitimate framework for screening potential locators in the Freeport. Itwill also reinforce the trust and
confidence of the stakeholders on the competence and authority of the SBMA that would translate in
stronger popular support to the programs implemented in the Freeport.
11. The EGF and Trust Fund (Table 5.13) should be made clear that the amounts are the minimum amount
and that adequate funds will be provided by the proponent as necessary beyond the minimum amounts.
Furthermore the basis for the amounts allocated for the items (public liability and rehabilitation) in Trust Fund
and in EGF (tree planting and landscaping, artificial reef establishment) must be clarified. The specific
damages and impacts that will be covered by the TF and EGF must also be presented clearly at the outset
to avoid protracted negotiations in the event of actual impacts occurring in the future.
12. The monitoring plan for terrestrial flora and fauna is not clear on the frequency of measurement. More
importantly, the proposed method of measurement (sampling transect) while adequate for estimating the
diversity of indices for benchmarking is not sufficient for long[-]term monitoring. Instead, long[-]term
monitoringplots (at least 1 hectare in size) should be established to monitor the long[-]term impacts of the
project on terrestrial flora and fauna.
13. Since the proposed monitoring of terrestrial flora and fauna is limited to the vicinity of the project site, it
will be useful not only for mitigating and avoiding unnecessary adverse impacts ofthe project but also for
improving management decisions if long[-]term monitoring plots for the remaining natural forests in the
Freeport are established. These plots will also be useful for the study of the dynamic interactions of
terrestrial flora and fauna with climate change, farming and other human activities and the resulting
influences on soil, water, biodiversity, and other vital ecosystem services in the Freeport. 139
We agree with the appellate court that the alleged statements by these experts cannot be given weight because they
are hearsay evidence. None of these alleged experts testified before the appellate court to confirm the pertinent
contents of the Final Report. No reason appears in the records of this case as to why the Casiño Group failed to
present these expert witnesses.
We note, however, that these statements, on their face, especially the observations of Dr. Cruz, raise serious
objections to the environmental soundness of the project, specifically, the EIS thereof.It brings to fore the question of
whether the Court can, on its own, compel the testimonies of these alleged experts in order to shed light on these
matters in view of the rightat stake— not just damage to the environment but the health, well-being and,ultimately, the
livesof those who may be affected by the project.
The Rules of Procedure for Environmental Cases liberally provide the courts with means and methods to obtain
sufficient information in order to adequately protect orsafeguard the right to a healthful and balanced ecology. In
Section 6 (l) of Rule 3 (Pre-Trial), when there is a failure to settle, the judge shall, among others, determine the
140
necessity of engaging the services of a qualified expert as a friend of the court (amicus curiae). While, in Section
12 of Rule 7 (Writ of Kalikasan), a party may avail of discovery measures: (1) ocular inspection and (2) production
141
or inspection of documents or things. The liberality of the Rules in gathering and even compelling information,
specifically with regard to the Writ of Kalikasan, is explained in this wise: [T]he writ of kalikasanwas refashioned as a
tool to bridge the gap between allegation and proof by providing a remedy for would-be environmental litigants to
compel the production of information within the custody of the government. The writ would effectively serve as a
remedy for the enforcement of the right to information about the environment. The scope of the fact-finding power
could be: (1) anything related to the issuance, grant of a government permit issued or information controlled by the
government or private entity and (2) [i]nformation contained in documents such as environmental compliance
certificate (ECC) and other government records. In addition, the [w]rit may also be employed to compel the
production of information, subject to constitutional limitations. This function is analogous to a discovery measure, and
may be availed of upon application for the writ. 142
Clearly, in environmental cases, the power toappoint friends of the court in order to shed light on matters requiring
special technical expertise as well as the power to order ocular inspections and production of documents or things
evince the main thrust of, and the spirit behind, the Rules to allow the court sufficient leeway in acquiring the
necessary information to rule on the issues presented for its resolution, to the end that the right toa healthful and
balanced ecology may be adequately protected. To draw a parallel, in the protection of the constitutional rights of an
accused, when life or liberty isat stake, the testimonies of witnesses may be compelled as an attribute of the Due
Process Clause. Here, where the right to a healthful and balanced ecology of a substantial magnitude is at stake,
should we not tread the path of caution and prudence by compelling the testimonies of these alleged experts?
After due consideration, we find that, based on the statements in the Final Report, there is no sufficiently compelling
reason to compel the testimonies of these alleged expert witnesses for the following reasons.
First, the statementsare not sufficiently specificto point to us a flaw (or flaws) in the study or design/implementation
(or some other aspect) of the project which provides a causal link or, at least, a reasonable connection between the
construction and operation ofthe project vis-à-vis potential grave environmental damage. In particular, they do not
explain why the Environmental Management Plan (EMP) contained in the EIS of the project will notadequately
address these concerns.
Second, some of the concerns raisedin the alleged statements, like acid rain, warming and acidification of the
seawater, and discharge of pollutants were, as previously discussed, addressed by the evidence presented by RP
Energy before the appellate court. Again, these alleged statements do not explain why such concerns are not
adequately covered by the EMP of RP Energy.
Third, the key observations of Dr. Cruz, while concededly assailing certain aspects of the EIS, do not clearly and
specifically establish how these omissions have led to the issuance of an ECC that will pose significant negative
environmental impacts once the project is constructed and becomes operational. The recommendations stated
therein would seem to suggest points for improvement in the operation and monitoring of the project,but they do not
clearly show why such recommendations are indispensable for the project to comply with existing environmental laws
and standards, or how non-compliance with such recommendations will lead to an environmental damage of the
magnitude contemplatedunder the writ of kalikasan. Again, these statements do not state with sufficient particularity
how the EMP in the EIS failed to adequately address these concerns.
Fourth, because the reason for the non-presentation of the alleged expert witnesses does not appear on record, we
cannot assume that their testimonies are being unduly suppressed.
By ruling that we do not find a sufficiently compelling reason to compel the taking of the testimonies of these alleged
expert witnesses in relation to their serious objections to the power plant project, we do not foreclose the possibility
that their testimonies could later on be presented, in a proper case, to more directly, specifically and sufficientlyassail
the environmental soundness of the project and establish the requisite magnitude of actualor threatened
environmental damage, if indeed present. After all, their sense ofcivic duty may well prevail upon them to voluntarily
testify, if there are truly sufficient reasons tostop the project, above and beyond their inadequate claims in the Final
Report that the project should not be pursued. As things now stand,however, we have insufficient bases to compel
their testimonies for the reasons already proffered.
The alleged admissions of grave

environmental damage in the EIS of the
project.
In their Omnibus Motions for Clarification and Reconsideration before the appellate court and Petition for Review
before thisCourt, the Casiño Group belatedly claims that the statements in the EIS prepared by RPEnergy
established the significant negative environmental impacts of the project. They argue in this manner:
Acid Rain
35. According to RP Energy’s Environmental Impact Statement for its proposed 2 x 150 MW Coal-Fired Thermal
Power Plant Project, acid rain may occur in the combustion of coal, to wit – x x x x
During the operation phase, combustion of coal will result in emissions of particulates SOx and NOx. This may
contribute to the occurrence of acid rain due to elevated SO2 levels in the atmosphere. High levels of NO2 emissions
may give rise to health problems for residents within the impact area.
xxxx
Asthma Attacks
36. The same EPRMP mentioned the incidence of asthma attacks [as a] result of power plant operations, to wit –
143
xxxx
The incidence of asthma attacks among residents in the vicinity of the project site may increase due to exposure to
suspended particulates from plant operations. 144
RP Energy, however, counters that the above portions of the EIS were quoted out of context. As to the subject of acid
rain, the EIS states in full:
Operation
During the operation phase, combustion of coal will result in emissions of particulates, SOx and NOx. This may
contribute to the occurrence of acid rain due to elevated SO2 levels in the atmosphere. High levels of NO2 emissions
may give rise to health problems for residents within the impact area. Emissions may also have an effect
onvegetation (Section 4.1.4.2). However, the use of CFBC technology is a built-in measure that results in reduced
emission concentrations. SOx emissions will beminimised by the inclusion of a desulfurisation process, whilst NOx
emissions will be reduced as the coal is burned at a temperature lower than that required to oxidise
nitrogen. (Emphasis supplied)
145
As to the subject of asthma attacks, the EIS states in full:
The incidence of asthma attacks among residents in the vicinity of the project site may increase due to exposureto
suspended particulates from plant operations. Coal and ash particulates may also become suspended and dispersed
into the air during unloading and transport, depending on wind speed and direction. However, effect on air quality due
to windblown coal particulates will be insignificant as the coal handling system will have enclosures (i.e. enclosed
conveyors and coal dome) to eliminate the exposure of coal to open air, and therefore greatly reduce the potential for
particulates from being carried away by wind (coalhandling systems, Section 3.4.3.3). In addition, the proposed
process will include an electrostaticprecipitator that will remove fly ash from the flue gas prior to its release through
the stacks, and so particulates emissions will be minimal. (Emphasis supplied)
146
We agree with RP Energy that, while the EIS discusses the subjects of acid rain and asthma attacks, it goes on to
state that there are mitigating measures that will be put in place to prevent these ill effects. Quite clearly, the Casiño
Group quoted piecemeal the EIS in sucha way as to mislead this Court as to its true and full contents.
We deplore the way the Casiño Group has argued this point and we take this time to remind it that litigants should not
trifle withcourt processes. Along the same lines, we note how the Casiño Group has made serious allegations in its
Petition for Writ of Kalikasanbut failed to substantiate the same in the course of the proceedings before the appellate
court. In particular, during the preliminary conference of this case, the Casiño Group expressly abandoned its factual
claims on the alleged grave environmental damage that will be caused by the power plant (i.e., air, water and land
pollution) and, instead, limited itself to legal issues regarding the alleged non-compliance of RP Energy with certain
laws and rules in the procurement of the ECC. We also note how the Casiño Group failed to comment on the
147
subject Petitions before this Court, which led this Court to eventually dispense with its comment. We must express
148
our disapproval over the way it has prosecuted itsclaims, bordering as it does on trifling with court processes. We
deem itproper, therefore, to admonishit to be more circumspect in how it prosecutesits claims.
In sum, we agree with the appellate court that the Casiño Group failed to substantiate its claims thatthe construction
and operation of the power plant will cause environmental damage of the magnitude contemplated under the writ of
kalikasan. The evidence it presented is inadequate to establish the factual bases of its claims.
II.
Whether the ECC is invalid for lack of signature of Mr. Luis Miguel Aboitiz (Mr. Aboitiz), as representative of RP
Energy, in the Statement of Accountability of the ECC.
The appellate court ruled that the ECC is invalid because Mr. Aboitiz failed to sign the Statement of Accountability
portion of the ECC.
We shall discuss the correctness ofthis ruling on both procedural and substantive grounds. Procedurally, we cannot
fault the DENR for protesting the manner by which the appellate court resolved the issue of the aforesaid lack of
signature. We agree with the DENR that this issue was not among those raised by the Casiño Group in its Petition for
Writ of Kalikasan. What is more, this was not one of the triable issues specificallyset during the preliminary
149
conference of this case. 150
How then did the issue oflack of signature arise?
A review of the voluminous records indicates that the matterof the lack of signature was discussed, developed or
surfaced only inthe course of the hearings, specifically, on clarificatory questions from the appellate court, to wit:
J. LEAGOGO:
I would also show to you your ECC, that’s page 622 of the rollo. I am showing to you this Environmental Compliance
Certificate dated December 22, 2008 issued by Sec. Jose L. Atienza, Jr. of the DENR. This is your "Exhibit "18."
Would you like to go over this? Are you familiar with this document?
MS. MERCADO:
Yes, it[’]s my Annex "3," Your Honor.
J. LEAGOGO:
I would like to refer you to page 3 of the ECC dated December 22, 2008. Page 2 refers to the Environmental
Compliance Certificate, ECC Ref. No. 0804-011-4021. That’s page 2 of the letter dated December 22, 2008. And on
page 3, Dr. Julian Amador recommended approval and it was approved by Sec. Atienza. You see that on page 3?
MS. MERCADO:
Yes, Your Honor.
J. LEAGOGO:
Okay. On the same page, page 3, there’s a Statement of Accountability.
MS. MERCADO:
Yes, Your Honor.
J. LEAGOGO:
Luis, who is Luis Miguel Aboitiz?
MS. MERCADO:
During that time he was the authorized representative of RP Energy,
Your Honor.
J. LEAGOGO:
Now, who is the authorized representative of RP Energy?
MS. MERCADO:
It would be Mr. Aaron Domingo, I believe.
J. LEAGOGO:
Please tell the Court why this was not signed by Mr. Luis Miguel Aboitiz, the Statement of Accountability?
Because the Statement of Accountability says, "Mr. Luis Miguel Aboitiz, Director, representing Redondo Peninsula
Energy with office address located at 110 Legaspi Street, Legaspi Village, Makati City, takes full responsibility in
complying with all conditions in thisEnvironmental Compliance Certificate [ECC][.]" Will you tell this Court why this
was not signed?
MS. MERCADO:
It was signed, Your Honor, but this copy wasn’t signed. My apologies, I was the one who provided this, I believe, to
the lawyers. This copy was not signed because during….
J. LEAGOGO:
But this is your exhibit, this is yourExhibit "18" and this is not signed. Do you agree with me that your Exhibit "18" is
not signed by Mr. Aboitiz?
MS. MERCADO:
That’s correct, Your Honor. 151
We find this line of questioning inadequate to apprise the parties that the lack of signature would be a key issue in
this case; as in fact it became decisive in the eventual invalidation of the ECC by the appellate court.
Concededly, a court has the power to suspend its rules of procedure in order to attain substantial justice so that it has
the discretion, in exceptional cases, to take into consideration matters not originally within the scope of the issues
raised in the pleadings or set during the preliminary conference, in order to prevent a miscarriage of justice. In the
case at bar, the importance of the signature cannot be seriously doubted because it goes into the consent and
commitment of the project proponent to comply with the conditions of the ECC, which is vital to the protection of the
right to a balanced and healthful ecology of those who may be affected by the project. Nonetheless, the power of a
court tosuspend its rules of procedure in exceptional cases does not license it to foist a surprise on the parties in a
given case. To illustrate, in oral arguments before this Court, involving sufficiently important public interest cases, we
note that individual members of the Court, from time to time, point out matters that may not have been specifically
covered by the advisory (the advisory delineates the issues to be argued and decided). However, a directive is given
to the concerned parties to discuss the aforesaid matters in their memoranda. Such a procedure ensures that, at the
very least, the parties are apprised that the Court has taken an interest in such matters and may adjudicate the case
on the basis thereof. Thus, the parties are given an opportunity to adequately argue the issue or meet the issue head-
on. We, therefore, find that the appellate court should have, at the very least, directed RP Energy and the DENR to
discuss and elaborate on the issue of lack of signature in the presentation of their evidence and memoranda,
beforemaking a definitive ruling that the lack thereof invalidated the ECC.This is in keeping with the basic tenets of
due process.
At any rate, we shall disregard the procedural defect and rule directly on whether the lack of signature invalidated the
ECC in the interest of substantial justice.
The laws governing the ECC, i.e., PresidentialDecree No. (PD) 1151 and PD 1586, do not specifically state that the
lack of signature in the Statement of Accountability has the effect of invalidating the ECC. Unlike in wills or donations,
where failure to comply withthe specific form prescribed by law leads to its nullity, the applicable laws here are
152
silentwith respect to the necessity of a signature in the Statement of Accountability and the effect of the lack thereof.
This is, of course, understandable because the Statement of Accountability is a mere off-shoot of the rule-making
powers of the DENR relative tothe implementation of PD 1151 and PD 1586. To determine, therefore, the effect of
the lack of signature, we must look atthe significance thereof under the Environmental Impact Assessment (EIA)
Rules of the DENR and the surrounding circumstances of this case.
To place this issue in its proper context, a helpful overview of the stages of the EIA process, taken from the Revised
Manual, is reproduced below:
Figure 1-3 Overview of Stages of the Philippine EIA Process 153
1.0 Screeningdetermines if a project is covered or not covered by the

SCREENING PEISS. If a project is covered, screening further determines what
154
document type the project should prepare to secure the needed

approval, and what the rest of the requirements are in terms of EMB
office of application, endorsing and decision authorities, duration of
processing.
2.0 SCOPING Scopingis a Proponent-driven multi-sectoral formal process of
determining the focused Terms of Reference of the EIA Study.
Scoping identifies the most significant issues/impacts of a proposed
project, and then, delimits the extent of baseline information to those
necessary to evaluate and mitigate the impacts. The need for and
scope of an Environmental Risk Assessment (ERA) is also done
during the scoping session. Scoping is done with the local community
through Public Scoping and with a third party EIA Review Committee
(EIARC) through Technical Scoping, both with the participation of the
DENR-EMB. The process results in a signed Formal Scoping
Checklist by the review team, with final approval by the EMB Chief.
EIA STUDY and The EIA Studyinvolves a description of the proposed project and its
3.0 REPORT alternatives, characterization of the project environment, impact
PREPARATION identification and prediction, evaluation of impact significance, impact
mitigation, formulation of Environmental Management and Monitoring
Plan, withcorresponding cost estimates and institutional support
commitment. The study results are presented in an EIA Reportfor
which an outline is prescribed by EMB for every major document type
EIA REPORT Review of EIA Reportsnormally entails an EMB procedural screening
4.0 REPORT for compliance with minimum requirements specified during Scoping,
and followed by a substantive review of either composed third party
EVALUATION experts commissioned by EMB as the EIA Review Committee for
PEIS/EIS-based applications, or DENR/EMB internal specialists, the
Technical Committee, for IEE-based applications. EMB evaluates the
EIARC recommendations and the public’s inputs during public
consultations/hearings in the process of recommending a decision on
the application. The EIARC Chair signs EIARC recommendations
including issues outside the mandate of the EMB. The entire EIA
review and evaluation process is summarized in the Review Process
Report (RPR) of the EMB, which includes a draft decision document.
5.0 DECISION Decision Making involves evaluation of EIA recommendations and the
MAKING draft decision document, resulting to the issuance of an ECC, CNC or
Denial Letter. When approved, a covered project is issued its
certificate of Environmental Compliance Commitment (ECC) while an
application of a non-covered project is issued a Certificate of Non-
Coverage (CNC). Endorsing and deciding authorities are designated
by AO 155 42, and further detailed in this Manual for every report
type. Moreover, the Proponent signs a sworn statement of full
responsibility on implementation of its commitments prior to the
release of the ECC. 156 The ECC is then transmitted to concerned
LGUs and other GAs for integration into their decisionmaking process.
The regulated part of EIA Review is limited to the processes within
EMB control. The timelines for the issuance of decision documents
provided for in AO 42 and DAO 2003-30 are applicable only from the
time the EIA Report is accepted for substantive review to the time a
decision is issued on the application.
MONITORING. Monitoring, Validation and Evaluation/Audit stage assesses
6.0 performance of the Proponent against the ECC and itscommitments in
VALIDATION, the Environmental Management and Monitoring Plans to ensure
and actual impacts of the project are adequately prevented or mitigated.
EVALUATION/
AUDIT
The signing of the Statement of Accountability takes placeat the Decision Making Stage. After a favorable review of
its ECC application, the project proponent, through its authorized representative, is made to sign a sworn statement
of full responsibility on the implementation ofits commitments prior to the official release of the ECC.
The definition of the ECC in the Revised Manual highlights the importance of the signing of the Statement of
Accountability:
Environmental Compliance Certificate (ECC) - a certificate of Environmental Compliance Commitment to which the
Proponent conforms with, after DENR-EMB explains the ECC conditions, by signing the sworn undertaking of full
responsibility over implementation of specified measures which are necessary to comply with existing environmental
regulations or to operate within best environmental practices that are not currently covered by existing laws. It is a
document issued by the DENR/EMB after a positive review of an ECC application, certifying that the Proponent has
complied with all the requirements of the EIS System and has committed to implement its approved Environmental
Management Plan. The ECC also provides guidance to other agencies and to LGUs on EIA findings and
recommendations, which need to be considered in their respective decision-making process. (Emphasis supplied)
157
As can be seen, the signing of the Statement of Accountabilityis an integral and significant component of the EIA
process and the ECC itself. The evident intention is to bind the project proponentto the ECC conditions, which will
ensure that the project will not cause significant negative environmental impacts by the "implementation of specified
measures which are necessary to comply with existing environmental regulations or tooperate within best
environmental practices that are not currently covered by existing laws." Indeed, the EIA process would be a
meaningless exercise if the project proponent shall not be strictly bound to faithfully comply withthe conditions
necessary toadequately protect the right of the people to a healthful and balanced ecology.
Contrary to RP Energy’s position, we, thus, find that the signature of the project proponent’s representative in the
Statement of Accountability is necessary for the validity of the ECC. It is not, as RP Energy would have it, a mere
formality and its absence a mere formal defect.
The question then is, was the absence of the signature of Mr. Aboitiz, as representative of RP Energy, in the
Statement of Accountability sufficient ground to invalidate the ECC?
Viewed within the particular circumstances of this case, we answer in the negative.
While it is clear that the signing of the Statement of Accountability is necessary for the validity ofthe ECC, we cannot
close oureyes to the particular circumstances of this case. So often have we ruled that this Court is not merely a court
of law but a court of justice. We find that there are several circumstances present in this case which militate against
the invalidation of the ECC on this ground.
We explain.
First, the reason for the lack of signature was not adequately taken into consideration by the appellate court. To
reiterate, the matter surfaced during the hearing of this case on clarificatory questions by the appellate court, viz:
J. LEAGOGO:
Please tell the Court why this was not signed by Mr. Luis Miguel Aboitiz, the Statement of Accountability?
Because the Statement of Accountability says, "Mr. Luis Miguel Aboitiz, Director, representing Redondo Peninsula
Energy with office address located at 110 Legaspi Street, Legaspi Village, Makati City, takes full responsibility in
complying with all conditions in this Environmental Compliance Certificate [ECC][.]" Will you tell this Court why this
was not signed?
MS. MERCADO:
It was signed, Your Honor, but this copy wasn’t signed. My apologies, I was the one who provided this, I believe, to
the lawyers. This copy was not signed because during…
J. LEAGOGO:
But this is your exhibit, this is yourExhibit "18" and this is not signed. Do you agree with me that your Exhibit "18" is
not signed by Mr. Aboitiz?
MS. MERCADO:
That’s correct, Your Honor. (Emphasis supplied)
158
Due to the inadequacy of the transcriptand the apparent lack of opportunity for the witness to explain the lack of
signature, we find that the witness’ testimony does not, by itself, indicate that there was a deliberate or malicious
intent not to sign the Statement of Accountability.
Second, as previously discussed, the concerned parties to this case, specifically, the DENR and RP Energy, werenot
properly apprised that the issue relative to the lack of signature would be decisive inthe determination of the validity of
the ECC. Consequently, the DENR and RPEnergy cannot be faulted for not presenting proof during the course ofthe
hearings to squarely tackle the issue of lack of signature.
Third, after the appellate court ruled in its January 30, 2013 Decision that the lack of signature invalidated the
ECC,RP Energy attached, to its Motion for Partial Reconsideration, a certified true copy of the ECC, issued by the
DENREMB, which bore the signature of Mr. Aboitiz. The certified true copy of the ECC showed that the Statement of
Accountability was signed by Mr. Aboitiz on December 24, 2008. 159
The authenticity and veracity of this certified true copy of the ECC was not controverted by the Casiño Group in
itscomment on RP Energy’s motion for partial reconsideration before the appellate court nor in their petition before
this Court. Thus, in accordance with the presumption of regularity in the performance of official duties, it remains
uncontroverted that the ECC on file with the DENR contains the requisite signature of Mr. Aboitiz in the Statement of
Accountability portion.
As previously noted, the DENR and RPEnergy were not properly apprised that the issue relative to the lack
ofsignature would be decisive in the determination of the validity of the ECC. As a result, we cannot fault RP Energy
for submitting the certified true copy of the ECC only after it learned that the appellate court had invalidated the ECC
on the ground of lack ofsignature in its January 30, 2013 Decision.
We note, however, that, as previously discussed, the certified true copy of the Statement of Accountability was signed
by Mr. Aboitiz on December 24, 2008 or two days after the ECC’s official release on December 22, 2008. The
aforediscussed rules under the Revised Manual, however, state that the proponent shall sign the sworn statement of
full responsibility on implementation of its commitments priorto the release of the ECC. Itwould seem that the ECC
was first issued, then it was signed by Mr. Aboitiz, and thereafter, returned to the DENR to serve as its file copy.
Admittedly, there is lack of strict compliance with the rules although the signature ispresent. Be thatas it may, we find
nothing in the records to indicate that this was done with bad faith or inexcusable negligence because of the
inadequacy of the evidence and arguments presented, relative to the issue of lack of signature, in view of the manner
this issue arose in this case, as previously discussed. Absent such proof, we are not prepared to rule that the
procedure adopted by the DENR was done with bad faithor inexcusable negligence but we remind the DENR to be
more circumspect in following the rules it provided in the Revised Manual. Thus, we rule that the signature
requirement was substantially complied with pro hac vice.
Fourth, we partly agree with the DENRthat the subsequent letter-requests for amendments to the ECC, signed by Mr.
Aboitiz on behalf of RP Energy, indicate its implied conformity to the ECC conditions. In practical terms, if future
litigation should occur due to violations of the ECC conditions, RP Energy would be estopped from denying its
consent and commitment to the ECC conditions even if there was no signature in the Statement of Accountability.
However, we note that the Statement of Accountability precisely serves to obviate any doubt as to the consent and
commitment of the project proponent to the ECC conditions. At any rate, the aforesaid letter-requests do additionally
indicate RP Energy’s conformity to the ECC conditions and, thus, negate a pattern to maliciously evade accountability
for the ECC conditions or to intentionally create a "loophole" in the ECC to be exploited in a possible futurelitigation
over non-compliance with the ECC conditions.
In sum, we rule that the appellate court erred when it invalidated the ECC on the ground of lack of signature of Mr.
Aboitiz in the ECC’s Statement of Accountability relative to the copy of the ECC submitted by RP Energy to the
appellate court. While the signature is necessary for the validity of the ECC, the particular circumstances of this case
show that the DENR and RP Energy were not properly apprised of the issue of lack ofsignature in order for them to
present controverting evidence and arguments on this point, as the matter only developed during the course of the
proceedings upon clarificatory questions from the appellate court. Consequently, RP Energy cannot be faulted for
submitting the certified true copy of the ECC only after it learned that the ECC had been invalidated on the ground of
lack of signature in the January 30, 2013 Decision of the appellate court.
The certified true copy of the ECC, bearing the signature of Mr. Aboitiz in the Statement of Accountability portion, was
issued by the DENR-EMB and remains uncontroverted. Itshowed that the Statement of Accountability was signed by
Mr. Aboitiz on December 24, 2008. Although the signing was done two days after the official release of the ECC on
December 22, 2008, absent sufficient proof, we are not prepared to rule that the procedure adoptedby the DENR was
done with bad faith or inexcusable negligence. Thus, werule that the signature requirement was substantially
complied with pro hac vice.
III.
Whether the first and second amendments to the ECC are invalid for failure to undergo a new environmental impact
assessment (EIA) because of the utilization of inappropriate EIA documents.
Upholding the arguments of the Casiño Group, the appellate court ruled that the first and second amendments tothe
ECC were invalid because the ECC contained an express restriction that any expansion of the project beyond the
project description shall be the subject of a new EIA. It found that both amendments failed to comply with the
appropriate EIA documentary requirements under DAO 2003-30 and the Revised Manual. In particular, it found that
the Environmental Performance Report and Management Plan (EPRMP) and Project Description Report (PDR),
which RP Energy submitted tothe DENR, relative to the application for the first and second amendments,
respectively, were not the proper EIA document type. Hence, the appellate court ruled that the aforesaid
amendments were invalid.
Preliminarily, we must state that executive actions carry presumptive validity so that the burden of proof is on the
Casiño Group to show that the procedure adopted bythe DENR in granting the amendments to the ECC were done
with grave abuse of discretion. More so here because the administration of the EIA process involves special technical
skill or knowledge which the law has specifically vested in the DENR.
After our own examination of DAO 2003-30 and the Revised Manual as well as the voluminous EIA documents of RP
Energy appearing in the records of this case, we find that the appellate court made an erroneous interpretation and
application of the pertinent rules.
We explain.
As a backgrounder, PD 1151 set the Philippine Environment Policy. Notably, this law recognized the right ofthe
people to a healthful environment. Pursuant thereto, in every action, project or undertaking, which significantly
160
affects the quality of the environment, all agencies and instrumentalities of the national government, including
government-owned or -controlled corporations, as well as private corporations, firms, and entities were required to
prepare, file and include a statement (i.e., Environmental Impact Statement or EIS) containing:
(a) the environmental impact of the proposed action, project or undertaking;
(b) any adverse environmental effect which cannot be avoided should the proposal be implemented;
(c) alternative to the proposed action;
(d) a determination that the short-term uses of the resources of the environment are consistent with the
maintenance and enhancement of the longterm productivity of the same; and
(e) whenever a proposal involves the use of depletable or non-renewable resources, a finding must be made
that such use and commitment are warranted. 161
To further strengthen and develop the EIS, PD1586 was promulgated, which established the Philippine
Environmental Impact Statement System (PEISS). The PEISS is "a systems-oriented and integrated approach to the
EIS system to ensure a rational balance between socio-economic development and environmental protection for the
benefit of present and future generations." The ECC requirement ismandated under Section 4 thereof:
162
SECTION 4. Presidential Proclamation ofEnvironmentally Critical Areas and Projects. The President of the
Philippines may, on his own initiative or upon recommendation of the National Environmental Protection Council, by
proclamation declare certain projects, undertakings or areas in the country as environmentally critical. No person,
partnership or corporation shall undertake or operate any such declared environmentally critical project or area
without first securing an Environmental Compliance Certificate issued by the President or his dulyauthorized
representative. x x x (Emphasis supplied)
The PEISS consists of the Environmental Impact Assessment (EIA) process, which is mandatory for private orpublic
projects thatmay significantly affect the quality of the environment. It involves evaluating and predicting the likely
impacts of the project on the environment, designing appropriate preventive, mitigating and enhancement measures
addressing these consequences to protect the environment and the community’s welfare. 163
PD 1586 was implemented by DAO 2003-30 which, in turn, set up a system or procedure to determine when a project
is required to secure an ECC and when it is not. When an ECC is not required, the project proponent procures a
Certificate of Non-Coverage (CNC). As part of the EIA process, the project proponent is required to submit certain
164
studies or reports (i.e., EIA document type) to the DENR-EMB, which willbe used in the review process in assessing
the environmental impact of the project and the adequacy of the corresponding environmental management plan or
program to address such environmental impact. This will then be part of the bases to grant or deny the application for
an ECC or CNC, as the case may be.
Table 1-4 of the Revised Manual summarizes the required EIA document type for each project category. It classifies
a project as belonging to group I, II, III, IV or V, where:
I- Environmentally Critical Projects (ECPs) in either Environmentally Critical Area (ECA) or Non-
Environmentally Critical Area (NECA),
II- Non-Environmentally Critical Projects (NECPs) in ECA,
III- NECPs in NECA,
IV- Co-located Projects, and
V- Unclassified Projects.
The aforesaid table then further classifies a project, as pertinent to this case, as belonging to category A,B or C,
where:
A- new;
B- existing projects for modification or re-start up; and
C- operating projects without an ECC.
Finally, the aforesaid table considers whether the project is single or co-located. After which, it states the
165
appropriateEIA document typeneeded for the application for an ECC or CNC, as the case may be.
The appropriate EIA document type vis-à-vis a particular project depends on the potential significant environmental
impact of the project. At the highest level would be an ECP, such as the subject project. The hierarchy of EIA
document type, based on comprehensiveness and detail of the study or report contained therein, insofar as single
projects are concerned, is as follows:
1. Environmental Impact Statement (EIS),

166
2. Initial Environmental Examination (IEE) Report,

167
3. Initial Environmental Examination (IEE) Checklist Report,

168
4. Environmental Performance Report and Management Plan (EPRMP), and

169
5. Project Description (PD) or Project Description Report (PDR).
170
Thus, in the course of RP Energy’s application for anECC, it was required by the DENR-EMB to submit an EIS
because the subject project is: an ECP, new and a single project.
The present controversy, however, revolves around, not an application for an ECC, but amendments thereto.
RP Energy requested the subject first amendment to its ECC due to its desire to modify the project design through
the inclusion of a barge wharf, seawater intake breakwater, subsea discharge pipeline, raw water collection system,
drainage channel improvement and a 230-kV double transmission line. The DENR-EMB determined that this was a
major amendment and, thus, required RP Energy to submit an EPRMP.
The Casiño Group argued, and the appellate court sustained, that an EPRMP is not the correct EIA document type
based on the definition of an EPRMP in DAO 2003-30 and the Revised Manual.
In DAO 2003-30, an EPRMP is defined as:
Environmental Performance Report and Management Plan (EPRMP) — documentation of the actual cumulative
environmental impacts and effectiveness of current measures for single projects that are already operating but
without ECC's, i.e., Category A-3. For Category B-3 projects, a checklist form of the EPRMP would
suffice; (Emphasis supplied)
171
Further, the table in Section 5 of DAO 2003-30 states that an EPRMP is required for "A-2: Existing and to
beexpanded (including undertakings that have stopped operations for more than 5 years and plan to re-start with or
without expansion) and A-3: Operating without ECC."
On the other hand, the Revised Manual delineates when an EPRMP is the proper EIA document type, thus:
For operating projects with previous ECCs but planning or applying for clearance to modify/expand or re-start
operations, or for projects operating without an ECCbut applying to secure one to comply with PD 1586 regulations,
the appropriate document is not an EIS but an EIA Report incorporating the project’s environmental performance and
its current Environmental Management Plan. This report isx x x anx x x Environmental Performance Report and
Management Plan (EPRMP) for single project applications x x x (Emphasis supplied)
172
In its "Glossary," the Revised Manual defines an EPRMP as:
Environmental Performance Report and Management Plan (EPRMP) - documentation of the actual cumulative
environmental impacts and effectiveness of current measures for single projects that are already operating but
without ECCs. (Emphasis supplied)
173
Finally, Table 1-4, in the Revised Manual, states that an EPRMP is required for "Item I-B: Existing Projects for
Modification or Re-start up (subject to conditions in Annex 2-1c) and I-C: Operating without ECC."
From these definitions and tables, an EPRMP is, thus, the required EIA document type for an ECP-single project
which is:
1. Existing and to be expanded (including undertakings that have stopped operations for more than 5 years
and plan to re-start with or without expansion);
2. Operating but without ECCs;
3. Operating projects with previous ECCs but planning or applying for clearance to modify/expand orre-start
operations; and
4. Existing projects for modification or re-start up.

It may be observed that, based from the above, DAO2003-30 and the Revised Manual appear to use the terms
"operating"and "existing" interchangeably. In the case at bar, the subject project has not yet been constructed
although there have been horizontal clearing operations at the project site.
On its face, therefore, the theory of the Casiño Group, as sustained by the appellate court — that the EPRMP is not
the appropriate EIA document type— seems plausible because the subject project is not: (1) operating/existing with a
previous ECC but planning or applying for modification or expansion, or (2) operating but without an ECC. Instead,
the subject project is an unimplemented or a non-implemented, hence,non-operating project with a previous ECC but
planning for modification or expansion.
The error in the above theory lies in the failure to consider or trace the applicable provisions of DAO 2003-30 and the
Revised Manual on amendments to an ECC.
The proper starting point in determining the validity of the subject first amendment, specifically, the propriety of the
EIA document type (i.e., EPRMP) which RP Energy submitted in relation to its application for the aforesaid
amendment, must of necessity be the rules on amendments to an ECC. This is principally found in Section
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8.3,Article II of DAO 2003-03, viz:
8.3 Amending an ECC
Requirements for processing ECC amendments shall depend on the nature of the request but shall be focused on the
information necessary to assess the environmental impact of such changes.
8.3.1. Requests for minor changes to ECCs such as extension of deadlines for submission of post-
ECC requirements shall be decided upon by the endorsing authority.
8.3.2. Requests for major changes to ECCs shall be decided upon by the deciding authority.
8.3.3. For ECCs issued pursuant to an IEE or IEE checklist, the processing of the amendment
application shall not exceed thirty (30) working days; and for ECCs issued pursuant to an EIS, the
processing shall not exceed sixty (60) working days. Provisions on automatic approval related to
prescribed timeframes under AO 42 shall also apply for the processing of applications to amend
ECCs. (Emphasis supplied)
Implementing the afore-quoted section, the Revised Manual pertinently states in Section 2.2, paragraph 16:
16) Application Process for ECC Amendments
Figure 2-4 presents how Proponents may request for minor or major changes in their ECCs. Annex 2-1c provides a
decision chart for the determination of requirements for project modifications, particularly for delineating which
application scenarios will require EPRMP (which will be subject to Figure 2-1 process) or other support
documentations (which will be subject to Figure 2-4 process). Figure 2-4, in turn, provides:
Figure 2-4. Flowchart on Request for ECC Amendments 175
Scenario 1: Request for Minor Scenario 2: Request for Major Amendments

Amendments
1. Expansion of project area w/in catchment
1. Typographical error described in EIA
2. Extension of deadlines for 2. Increase in production capacity or auxiliary

submission of post-ECC requirement/s component of the original project
3. Extension of ECC validity 3. Change/s in process flow or technology
4. Change in company
name/ownership 4. Addition of new product
5. Decrease in land/project area or 5. Integration of ECCs for similar or dissimilar

production capacity but contiguous projects (NOTE: ITEM#5 IS
PROPONENT’S OPTION, NOT EMB’S)
6. Other amendments deemed
6. Revision/Reformatting of ECC Conditions
"minor" at the discretion of the
EMB CO/RO Director 7. Other amendments deemed "major" at the
discretion of the EMB CO/RO Director
1 [Start] 1[Start]
Within three (3) years from ECC Within three (3) years from ECC issuance (for
issuance (for projects not started) OR
176
projects not started) OR at any time during
177
at any time during project project implementation, the Proponent prepares

implementation, the Proponent and submits to the ECC-endorsing DENR-EMB
prepares and submits to the ECC- office a LETTER-REQUESTfor ECC
endorsing DENR-EMB office a amendments, including data/information,
LETTER-REQUEST for ECC reports or documents to substantiate the
amendment, including requested revisions.
data/information, reports or documents
to substantiate the requested revisions. 2
For projects that have started implementation,
EMB evaluates request based on Annex 2-
1cfor various scenarios of project modification.
Documentary requirements may range from a
2 Letter-Request to an EPRMP to the EMB
CO/RO while for those with Programmatic ECC,
a PEPRMP may need to be submitted to the
EMB CO to support the request. It is important
to note that for operating projects, the
appropriate document is not an EIS but an EIA
Report incorporating the project’s historical
environmental performance and its current
EMP, subject to specific documentary
requirements detailed in Annex 2-1cfor every
modification scenario.
The ECC-endorsing EMB office For EPRMP/PEPRMP-based requests, EMB

assigns a Case Handler to evaluate forms a Technical/Review Committee to
the request evaluate the request. For other requests, a
Case Handler may solely undertake the
evaluation. EMB CO and RO will process
P/EPRMP for PECC/ECC under Groups I and II
respectively. (Go to Figure 2-1)
3 4
ECC-endorsing Authority decides on ECC-endorsing/issuing Authority (per Table 1-

the Letter-Request, based on CH 4) decides on Letter
recommendation Requests/EPRMP/PEPRMP/Other documents
based on EMB CH and/or Tech/Review
Committee recommendations.
Maximum Processing Time to Max Processing Time to Issuance of Decision
Issuance of Decision
EMB CO 7 workdays CO CO EPRMP RO RO
PEPRMP PEPRMP EPRMP
EMB RO 7 workdays 120 90 60 30
workdays workdays workdays workdays

Other document applications: max 30 workdays
(EMB CO and RO)
Noteworthy in the above, which is pertinent to the issue at hand, is that the amendment process squarely applies to
projects not started, such as the subject project, based on the phrase "[w]ithin three (3) years from ECC issuance (for
projects not started) x x x".
Annex 2-1c, in turn, provides a "Decision Chart for Determination of Requirements For Project Modification." We
reproduce below the first three columns of Annex 2-1c, as are pertinent to the issue at hand:
ANNEX 2-1c
DECISION CHART FOR DETERMINATION OF REQUIREMENTS FOR PROJECT MODIFICATION 178
Proposed Modifications Analysis of Proposed Resulting Decision

to the Current Project Modifications Document/Type of EIA
Report Required
Operational projects, or
those which have stopped
for ≤5 years and plan to re-
start
For Groups I and II
EISbased Projects with an
ECC applying for
modification
1. Expansion of Since the modification will ECC Amendment /Letter
land/project area w/in be in an area already Request with brief
catchment or described and evaluated in description of activities in
environment described the original EIA Report, the additional area
in the original EIA incremental impacts from
Report additional land development
will have been addressed in
the approved EMP
2. Expansion of It is assumed the ECC Amendment
land/project area modification proposal may /Environmental
OUTSIDE catchment have significant potential Performance Report and
or environment impacts due to absence of Management Plan (EPRMP)
described in the prior assessment as to how
original EIA Report the project may affect the
proposed expansion area
3. Increase in capacity or Non-exceedance of PDR ECC Amendment /Letter
auxiliary component of (non covered project) Request with brief
the original project threshold is assumed that description of additional
which will eithernot capacity or component
entail exceedance of impacts are not significant;
PDR (non-covered
project) thresholds or Modification scenario and
EMP & ERA can still decision process are
address impacts & applicable to both
risks arising from nonimplemented and
modification operating projects issued
ECCs
4. Increase in capacity or Exceedance of PDR (non- ECC Amendment
auxiliary component of covered) threshold is /Environmental
the original project assumed that impacts may Performance Report and
which will either be potentially significant, Management Plan (EPRMP)
exceed PDR particularly if modification
(noncovered project) will result to a next higher
thresholds, or EMP & level of threshold range
ERA cannot address
impacts and risks Modification scenario and
arising from decision process are
modification applicable to both
nonimplemented and
operating projects with or
without issued ECCs
5. Change/s in process EMP and ERA can still ECC Amendment /Letter
flow or technology address impacts & risks Request with brief process
arising from modification description
EMP and ERA cannot ECC Amendment
address impacts & risks /Environmental
arising from modification Performance Report and
Management Plan (EPRMP)
6. Additional component Activity is directly lessening ECC Amendment /Letter
or products which will or mitigating the project’s Request with consolidated
enhance the impacts on the environment. Project Description Report
environment (e.g. due However, to ensure there is of new project component
to compliance to new no component in the and integrated EMP
stringent modification which fall under
requirements) or covered project types, EMB
lessen impacts on the will require disclosure of the
environment (e.g. thru description of the
utilization of waste into components and process
new products) with which the new product
will be developed.
7. Downgrade project No incremental adverse From ECC Amendment to
size or area or other impacts; may result to lower Relief of ECC Commitments
units of measure of project threshold or may (Conversion to CNC):
thresholds limits result to non-coverage /Letter-Request only
8. Conversion to new Considered new application New ECC /EIS
project type (e.g. but with lesser data
bunker-fired plant to requirements since most
gas-fired) facilities are established;
environmental performance
in the past will serve as
baseline; However, for
operating projects, there
may be need to request for
Relief from ECC
Commitment prior to
applying for new project
type to ensure no balance of
environmental
accountabilities from the
current project
9. Integration of ECCs for No physical change in ECC Amendment /Letter
similar or contiguous project size/area; no change Request with consolidated
projects in process/technology but Project Description Report
improved management of and integrated EMP
(Note: Integration of continuous projects by
ECCs is at the option having an integrated
of the Proponent to planning document in the
request/apply) form or an integrated ECC
(ECC conditions will be
harmonized across projects;
conditions relating to
requirements within other
agencies’ mandates will be
deleted)
10. Revision/ Reformatting No physical change on the ECC Amendment /Letter
of ECC Conditions project but ECC conditions Request only
relating to requirements
within other agencies’
mandates will be deleted
We now apply these provisions to the case at bar.
To reiterate, the first amendment to the ECC was requested by RP Energy due to its planned change of project
design involving the inclusion of a barge wharf, seawater intake breakwater, subseadischarge pipeline, raw water
collection system, drainage channel improvement and a 230-kV double transmission line. The DENR-EMB
determined that the proposed modifications involved a major amendment because it will result in anincrease in
179
capacity or auxiliary component, as per Scenario 2,Item #2 of Figure 2-4:
Scenario 2: Request for Major Amendments
1. Expansion of project area w/in catchment described in EIA
2. Increase in production capacity or auxiliary component of the original project 180
3. Change/s in process flow or technology
4. Addition of new product
5. Integration of ECCs for similar or dissimilar but contiguous projects (NOTE: ITEM#5 IS PROPONENT’S
OPTION, NOT EMB’S)
6. Revision/Reformatting of ECC Conditions
7. Other amendments deemed "major at the discretion of the EMB CO/RO Director
The Casiño Group does not controvert this finding by the DENR-EMB and we find the same reasonably supported by
the evidence on record considering that, among others, the construction of a 230-kVdouble transmission line would
result in major activities outside the project site which could have significant environmental impacts.
Consequently, the amendment was considered asfalling under Item#4 of Annex 2-1c, and, thus, the appropriate EIA
document typeis an EPRMP, viz:
4. Increase in capacity or Exceedance of PDR (non- ECC Amendment
auxiliary component of covered) thresholds is /Environmental
the original project which assumed that impacts may Performance Report and
will either exceed PDR be potentially significant, Management Plan
(non-covered project) particularly if modification (EPRMP) 182
thresholds, or EMP & will result to a next higher

ERA cannot address level of threshold range
impacts and risks arising
from modification Modification scenario and
decision process are
applicable to both
nonimplemented and
operating projects with or
without issued ECCs 181
Note that the Chart expressly states that, "[m]odification scenario and decision process are applicable to both non-
implementedand operating projects withor without ECCs." To recall, the subject project has not been constructed
183
and is not yet operational, although horizontal clearing activities have already been undertaken at the project site.
Thus, the subject project may be reasonably classified as a non-implemented project with an issued ECC, which falls
under Item#4 and, hence, an EPRMP is the appropriate EIA document type.
This lengthy explanation brings us toa simple conclusion. The definitions in DAO 2003-30 and the Revised Manual,
stating that the EPRMP is applicable to (1) operating/existing projectswith a previous ECC but planning or applying
for modification or expansion, or (2) operating projects but without an ECC, were not an exclusive list.
The afore-discussed provisions of Figure 2-4, in relation to Annex 2-1c, plainly show that the EPRMP can, likewise,
be used as an appropriate EIA document type for a single, non-implemented project applying for a major amendment
to its ECC, involving an increase in capacity or auxiliary component, which will exceed PDR (non-covered project)
thresholds, or result in the inability of the EMP and ERA to address the impacts and risks arising from the
modification, such as the subject project.
That the proposed modifications in the subject project fall under this class or type of amendment was a determination
made by the DENR-EMBand, absent a showing of grave abuse of discretion, the DENR-EMB’s findings are entitled
to great respect because it is the administrative agency with the special competence or expertise to administer or
implement the EIS System. The apparent confusion of the Casiño Group and the appellate court is understandable.
They had approached the issue with a legal training mindset or background. As a general proposition, the definition of
terms in a statute or rule is controlling as to its nature and scope within the context of legal or judicial proceedings.
Thus, since the procedure adopted by the DENR-EMB seemed to contradict or go beyond the definition of terms in
the relevant issuances, the Casiño Group and the appellate court concluded that the procedure was infirm.
However, a holistic reading of DAO2003-30 and the Revised Manual will show that such a legalistic approach inits
interpretation and application is unwarranted. This is primarily because the EIA process is a system, not a set of rigid
rules and definitions. In the EIA process, there is much room for flexibility in the determination and use ofthe
appropriate EIA document type as the foregoing discussion has shown. To our mind, whatshould be controlling is
184
the guiding principle set in DAO 2003-30 in the evaluation of applications for amendments to ECCs, as stated in
Section 8.3 thereof: "[r]equirements for processing ECC amendments shall depend on the nature of the requestbut
shall be focused on theinformation necessary to assess the environmental impact of such changes." 185
This brings us to the next logicalquestion, did the EPRMP provide the necessary information in order for the DENR-
EMB to assess the environmental impact of RP Energy’s request relative to the first amendment?
We answer in the affirmative.
In the first place, the Casiño Group never attempted to prove that the subject EPRMP, submitted by RP Energy to the
DENR-EMB, was insufficient for purposes of evaluating the environmental impact of the proposed modifications to
the original project design. There is no claim that the data submitted were falsified or misrepresented. Neither was
there an attempt to subpoena the review process documents of the DENR to establish thatthe grant of the
amendment to the ECC was done with grave abuse of discretion or to the grave prejudice of the right to a healthful
environment of those who will beaffected by the project. Instead, the Casiño Group relied solely on the definition of
terms in DAO 2003-30 and the Revised Manual, which approach, as previously discussed,was erroneous.
At any rate, we have examined the contents of the voluminous EPRMP submitted by RP Energy and wefind therein
substantial sections explaining the proposed changes as well as the adjustments that will be made in the
environmental management plan in order to address the potential environmental impacts of the proposed
modifications to the original project design. These are summarized in the "Project Fact Sheet" of the EPRMP and
186
extensively discussed in Section 4 thereof. Absent any claim or proof to the contrary, we have no bases to conclude
187
that these data were insufficient to assess the environmental impact of the proposed modifications. In accordance
with the presumption of regularity in the performance of official duties, the DENR-EMB must be deemed to have
adequately assessed the environmental impact of the proposed changes, before granting the request under the first
amendment to the subject ECC.
In sum, the Revised Manual permits the use of an EPRMP, as the appropriate EIA document type, for major
amendments to an ECC, even for an unimplemented or non-implementedproject with a previous ECC, such as the
subject project. Consequently, we find that the procedure adopted by the DENR, in requiring RP Energy to submitan
EPRMP in order to undertake the environmental impact assessment of the planned modifications to the original
project design, relative to the first amendment to the ECC, suffers from no infirmity.
We apply the same framework of analysis in determining the propriety of a PDR, as the appropriate EIA document
type, relative to the second amendment to the subject ECC.
Again, the Casiño Group, as sustained by the appellate court, relied on the definitions of a PDR in DAO 2003-30 and
the Revised Manual:
Project Description (PD) — document, which may also be a chapter in an EIS, that describes the nature,
configuration, use of raw materials and natural resources, production system, waste or pollution generation and
control and the activities of a proposed project. It includes a description of the use of human resources as well as
activity timelines, during the pre-construction, construction, operation and abandonment phases. It is tobe used for
reviewing co-located and single projects under Category C, aswell as for Category D projects. 188
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a) For new projects: x x x For non-covered projects in Groups II and III, a x x x Project Description Report (PDR) is
the appropriate document to secure a decision from DENR/EMB. The PDR is a "must" requirement for environmental
enhancement and mitigation projects in both ECAs (Group II) and NECAs (Group III) to allow EMB to confirm the
benign nature of proposed operations for eventual issuance of a Certificate ofNon-Coverage (CNC). All other Group
III (non-covered) projects do not need to submit PDRs – application is at the option of the Proponent should it need a
CNC for its own purposes, e.g. financing pre-requisite. For Group V projects, a PDR is required to ensure new
processes/technologies or any new unlisted project does not pose harm to the environment. The Group V PDR is a
basis for either issuance of a CNC or classification of the project into its proper project group.
b) For operating projects with previous ECCs but planning or applying for clearance to modify/expand or re-start
operations, or for projects operating without an ECC but applying to secure oneto comply with PD 1586 regulations,
the appropriate document is not an EIS but an EIA Report incorporating the project’s environmental performance and
its current Environmental Management Plan. This report is either an (6) Environmental Performance Report and
Management Plan (EPRMP) for single project applications or a (7) Programmatic EPRMP (PEPRMP) for co-located
project applications. However, for small project modifications, an updating of the project description or the
Environmental Management Plan with the use of the proponent’s historical performance and monitoring records may
suffice.
189
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Project Description (PD) - document, which may also be a chapter in an EIS, that describes the nature, configuration,
use of raw materials and natural resources, production system, waste or pollution generation and control and the
activities of a proposed project. It includes a description of the use of human resources as well as activity timelines,
during the pre-construction, construction, operation and abandonment phases. 190
We will no longer delve intothe details of these definitions. Suffice it to state, similar to the discussion on the EPRMP,
that if we go by the strict limits of these definitions, the PDR relative to the subject second amendment would not fall
squarely under any of the above.
However, again, these are not the only provisions governing the PDR in the Revised Manual.
After the favorable grant of the first amendment, RP Energy applied for another amendment to its ECC, this time
inconsideration of its plan to change the configuration of the project from 2 x 150 MWto 1 x 300 MW. In practical
terms, this meant that the subject project will still produce 300 MW of electricity but will now make use of only one
boiler (instead of two) to achieve greater efficiency in the operations of the plant. The DENR-EMB determined this
191
amendment to be minor, under Scenario 1, Item#6 of Figure 2-4:
Scenario 1: Request for Minor
Amendments
1. Typographical error
2. Extension of deadlines for submission of post-ECC requirement/s
3. Extension of ECC validity
4. Change in company name/ownership
5. Decrease in land/project area or production capacity
6. Other amendments deemed "minor" at the discretion of the EMB CO/RO Director 192
— because (1) there is no increase in capacity; (2) it does not constitute any significant impact; and (3) its EMP and
ERA as specified in the submitted EPRMP remain the same. Relative to Annex 2-1c, the requested amendment
193
was, in turn, determinedto fall under Item#3:
3. Increase in capacity or Non-exceedance of PDR ECC Amendment /Letter

auxiliary component of (non covered project) Request with brief
the original project thresholds is assumed that description of additional
which will either not impacts are not significant; capacity or component 195
entail exceedance of
PDR (non-covered Modification scenario and
project) thresholds or decision process are
EMP & ERA can still applicable to both non-
address impacts & risks implemented and operating
arising from projects issued ECCs 194
modification
We make the same observation, as before, that the above applies to an unimplemented or non-implemented project
with a previous ECC, like the subject project. Although it may be noted thatthe proposed modification does not
squarely fall under Item#3, considering that, as previously mentioned,there will be no increase in capacity relative to
the second amendment, still, we find nothing objectionable to this classification by the DENR-EMB, for it seems plain
enough that this classification was used because the modification was deemed too minor to require a detailed project
study like an EIS or EPRMP. Since this is the classification most relevant and closely related to the intended
amendment, following the basic precept that the greater includes the lesser, the DENR-EMB reasonably exercised its
discretion in merely requiring a letter request with a brief description of the modification.
As earlier noted, the PDR is the EIA document type with the least detail, and, thus, applicable to such minor
modifications. Thus, the DENR-EMB cannot be faulted for requiring RPEnergy to submit a PDR relative to its
application for the second amendment. Consequently, as before, we findthat the Revised Manual supports the
procedure adopted by the DENR-EMB in requiring RP Energy to submit a PDR in order to assess the environmental
impact of the planned modifications relative to the second amendment.
In their Petition before this Court, the Casiño Group boldly asserts that "[t]here is nothing in the Project Description
Report that provides an environmental impact assessment of the effects of constructing and operating a single 300-
MW generating unit." However, to our dismay, as in their other serious allegations in their Petition for Writ
196
ofKalikasan, the same is, likewise, baseless. Apart from such a sweeping claim, the Casiño Group has provided no
evidence or argument to back up the same.
An examination of the PDR readily reveals that it contains the details of the proposed modifications and an express
197
finding that no significant environmental impact will be generated bysuch modifications, as in fact it is expected that
the operation of the power plant will become more efficient as a result of the change from 2 x 150 MW to 1 x 300 MW
configuration. Consequently, the PDR merely reiterates the same mitigating measures that will presumably address
198
the minor modifications to the project design. Again, no evidence was presented to show substantial errors or
misrepresentations in these data or their inadequacy for providing the bases for the DENR-EMB to assess the
environmental impact of the proposed modifications under the second amendment.
In fine, absent proof to the contrary, bearing in mind that allegations are not proof, we sustain the procedure
adoptedby the DENR-EMB in requiring RP Energy to submit a PDR and, on the basis thereof, approving the request
for the second amendment.
In another vein, we note that the appellate court proceeded from the erroneous premise that the EIA is a document,
when it repeatedly stated that the amendments to the ECC require a new EIA, and not merely an EPRMP or PDR.
The appellate court relied on the provisoin the ECC, which stated that "[a]ny expansion of the project beyond the
project description or any change in the activity or transfer of location shall besubject to a new Environmental Impact
Assessment." 199
However, as correctly pointed out by the DENR and RP Energy, the EIA is not a document but a process:
Environmental Impact Assessment (EIA) — processthat involves evaluating and predicting the likely impacts of a
project (including cumulative impacts) on the environment during construction, commissioning, operation and
abandonment. It also includes designing appropriate preventive, mitigating and enhancement measures addressing
these consequences to protect the environment and the community's welfare.The process is undertaken by, among
others, the project proponent and/orEIA Consultant, EMB, a Review Committee, affected communities and other
stakeholders. (Emphasis supplied)
200
When the provisoin the ECC, therefore, states that a new EIA shall beconducted, this simply means that the project
proponent shall be required to submit such study or report, as warranted by the DENR Rules and circumstances,
which will sufficiently aid the DENR in making a new EIA and, thus, determine whether to grant the proposed
amendment (or project modification). Aswe have seen, consistent with DAO 2003-30 and the Revised Manual, the
DENR required RP Energy to submit an EPRMP and a PDR relative to the latter’s request involving the first and
second amendments, respectively, which led to the new EIA of the project in compliance with the provisoof the ECC.
Verily, the various EIA documents, such as the EPRMP and PDR, are mere tools used by the DENR to assess the
environmental impact of a particular project. These documents are flexibly used by the DENR, as the circumstances
warrant, in order to adequately assess the impacts of a new project or modifications thereto. Being the administrative
agency entrusted with the determination of which EIA document type applies to a particular application for an
amendment to an ECC, falling as it does within its particular technical expertise, wemust accord great respect to its
determination, absent a showing of grave abuse of discretion or patent illegality.
In sum, we find that the appellate court erred when it ruled that the first and second amendments to the subject ECC
wereinvalid for failure to comply with a new EIA and for violating DAO 2003-30 and the Revised Manual. The
appellate court failed to properly consider the applicable provisions in DAO 2003-30 and the Revised Manual on
amendments to ECCs. Our examination of the provisions on amendments to ECCs, as well as the EPRMP and PDR
themselves, shows that the DENR reasonably exercised its discretion in requiring an EPRMP and a PDR for the first
and second amendments, respectively. Through these documents, which the DENR reviewed, a new EIA was
conducted relative to the proposed project modifications. Hence, absent sufficient showing of grave abuse of
discretion or patent illegality, relative to both the procedure and substance of the amendment process, we uphold the
validity of these amendments.
IV.
Whether the Certificate of Non-Overlap (CNO), under Section 59 of the IPRA Law, is a precondition to the issuance
of anECC and the lack of its prior issuance rendered the ECC invalid.
The appellate court ruled that the ECC issued in favor of RP Energy on December 22, 2008 is invalid because the
CNO covering the subject project was issued only on October 31, 2012 or almost fouryears from the timeof issuance
of the ECC. Thus, the ECC was issued in violation of Section 59 of the IPRA Law and its implementing rules which
require that a CNO be obtained prior to the issuance of a government agency of, among others, a license or permit.
In so ruling, the appellate court implicitly upheld the Casiño Group’s argument that the ECC is a form of government
license or permit pursuant to Section 4 of PD 1586 which requires all entities to securean ECC before (1) engaging in
an environmentally critical project or (2) implementing a project within an environmentally critical area.
The DENR and RP Energy, however, argue that an ECC is not the license or permit contemplated under Section 59
of the IPRA Law and its implementing rules as may be deduced from the definition, nature and scope of an ECC
under DAO 2003-03 and the Revised Manual. The DENR explains that the issuance of an ECC does not exempt the
project proponent from securing other permits and clearances as required under existing laws, including the CNO,
and that the final decision on whether a project will be implemented lies with the concerned local government unit/s or
the lead government agency which has sectoral mandate to promote the government programwhere the project
belongs.
We agree with the DENR and RP Energy.
Section 59, Chapter VIII of the IPRA Law provides:
SEC. 59. Certification Precondition. All departments and other governmental agencies shall henceforth be strictly
enjoined from issuing, renewing, or granting any concession,license or lease, or entering into any production-sharing
agreement, without prior certification from the NCIP that the area affected does not overlap with any ancestral
domain.Such certification shall only be issued after a field-based investigation is conducted by the Ancestral Domains
Office of the area concerned: Provided, That no certification shall be issued by the NCIP without the free and prior
informed and written consent of ICCs/IPs concerned: Provided, further, That no department, government agency or
government-owned or -controlled corporation may issue new concession, license, lease, or production sharing
agreement while there is a pending application for a CADT: Provided, finally, That the ICCs/IPs shall have the right to
stop or suspend, in accordance with this Act, any project that has not satisfied the requirement of this consultation
process. (Emphasis supplied)
While Section 9, Part II, Rule VIII of National Commission on Indigenous Peoples (NCIP) Administrative Order No.
01-98 states:
201
SECTION 9. Certification Precondition Prior to Issuance of any Permits or Licenses. —
a. Need for Certification. No department of government or other agencies shall issue, renew or grant
anyconcession, license, lease, permit, or enter into any production sharing agreement without a prior
certification from the NCIP that the area affected does not overlap any ancestral domain.
b. Procedure for Issuance ofCertification by NCIP.
1) The certification, above mentioned, shall be issued by the Ancestral Domain Office, only after a
field based investigation that such areas are not within any certified or claimed ancestral domains.
2) The certification shall be issued only upon the free, prior, informed and written consent of the
ICCs/IPs who will be affected by the operation of such concessions, licenses or leases or
production-sharing agreements. A written consent for the issuance of such certification shall be
signed by at least a majority of the representatives of all the households comprising the concerned
ICCs/IPs. (Emphasis supplied)
As may be deduced from its subtitle, Section 59 requires as a precondition, relative to the issuance of any
concession, license, lease or agreement over natural resources, a certification issued by the NCIP that the area
subject thereof does not lie within any ancestral domain. This is in keeping with the State policy to protect the rights
202
of Indigenous Cultural Communities/Indigenous Peoples (ICCs/IPs) to their ancestral domains in order to ensure their
economic, social and cultural well-being as well as to recognize the applicability of customary laws governing
property rights or relations in determining the ownership and extent of such ancestral domain. 203
The IPRA Law and its implementing rules do not define the terms "license" and "permit" so that resort to their plain or
ordinary meaning in relation to the intendment of the law is appropriate.
A "license" has been defined as "a governmental permission to perform a particular act (such as getting married),
conduct a particular business or occupation, operate machinery or vehicles after proving capacity and ability to do so
safely, or use property for a certain purpose" while a "permit" has been defined as "a license or other document
204
given by an authorized public official or agency (building inspector, department ofmotor vehicles) to allow a person or
business to perform certain acts." 205
The evident intention of Section 59, in requiring the CNO prior to the issuance of a license or permit, is to prevent the
implementation of a project that may impair the right of ICCs/IPs to their ancestral domains. The law seeks to ensure
that a project willnot overlap with any ancestral domain prior to its implementation and thereby pre-empt any potential
encroachment of, and/or damage to the ancestral domains of ICCs/IPs without their prior and informed consent.
With these considerationsin mind, we now look atthe definition, nature and scope of an ECC in order to determine if it
falls within the ambit of a "license" or "permit" to which the CNO requirement, under Section 59 of the IPRA Law and
its implementing rules, finds application. Section 4 of PD 1586 provides, in part:
SECTION 4. Presidential Proclamation of Environmentally Critical Areas and Projects. — The President of the
partnership or corporation shall undertake or operate any suchdeclared environmentally critical project or area
without first securing an Environmental Compliance Certificate issued by the President orhis duly authorized
representative.For the proper management of said critical project or area, the President may by his proclamation
reorganize such government offices, agencies, institutions, corporations or instrumentalities including the re-
alignment of government personnel, and their specific functionsand responsibilities. (Emphasis supplied)
While the above statutory provision reveals that the ECC is an indispensable requirement before (1) the conduct of
an environmentally critical project or (2) the implementation of a project inan environmentally critical area, it does not
follow that the ECC is the "license" or "permit" contemplated under Section 59 of the IPRA Law and its implementing
rules.
Section 3(d), Article I of DAO 2003-03 defines an ECC in this wise:
SECTION 3. Definition of Terms. —
For the purpose of this Order, the following definitions shall be applied:
xxxx
d. Environmental Compliance Certificate (ECC) — document issued by the DENR/EMB after a positive review of an
ECC application, certifying that based on the representations of the proponent, the proposed project or undertaking
will not cause significant negative environmental impact. The ECC also certifies that the proponent has complied with
all the requirements of the EIS System and has committed to implement its approved Environmental Management
Plan. The ECC contains specific measures and conditions that the project proponent has to undertake beforeand
during the operation of a project, and in some cases, during the project's abandonment phase to mitigate identified
environmental impacts.
In turn, Section 1.0, paragraphs 3 and 6 of the Revised Manual provide, in part:
3) Purpose of the EIA Process

As a basic principle, EIA is used to enhance planning and guide decisionmaking. In this Manual, EIA is primarily
presented in the context of a requirement to integrate environmental concerns in the planning process of projects at
the feasibility stage. Through the EIA Process, adverse environmental impacts of proposed actions are considerably
reduced through a reiterative review process of project siting, design and other alternatives, and the subsequent
formulation of environmental management and monitoring plans. A positive determination by the DENR-EMB results
to the issuance of an Environmental Compliance Commitment (ECC) document, to be conformed to by the Proponent
and represents the project’s Environmental Compliance Certificate. The release of the ECC allows the project to
proceed to the next stage of project planning, which is the acquisition of approvals from other government agencies
and LGUs, after which the project can start implementation.
xxxx
6) The EIA Process inRelation to Other Agencies’ Requirements It is inherent upon the EIA Process to undertake a
comprehensive and integrated approach in the review and evaluation of environment-related concerns of government
agencies (GAs), local government units (LGUs) and the general public. The subsequent EIA findings shall provide
guidance and recommendations to these entities as a basis for their decision making process.
a) An Inter-agency MOA on EIS Streamlining was entered into in 1992 by 29 government agencies wherein
ECC of covered projects was agreed to be a prerequisite of all other subsequent government approvals;
b) DENR Memo Circular No. 2007-08 issued on 13 July 2007 reiterates in effect the intent of the MOA and
reinforces the role of the ECC/CNC as a guidance document to other agencies and LGUs, as follows:
i) "No permits and/or clearances issued by other National Government Agencies and Local
Government Units shall be required in the processing of ECC or CNC applications.
ii) The findings and recommendations ofthe EIA shall be transmitted to relevant government
agencies for them to integrate in their decision making prior to the issuance of clearances, permits
and licenses under their mandates.
iii) The issuance of an ECC or CNC for a project under the EIS System does not exempt the
Proponent from securing other government permits and clearances as required by other laws. The
current practice of requiring various permits, clearancesand licenses only constrains the EIA
evaluation process and negates the purpose and function of the EIA."
iv) Henceforth, all related previous instructions and other issuances shall be made consistent with
the Circular.
c) "Permits, licenses and clearances" are inclusive of other national and local government approvals such as
endorsements, resolutions, certifications, plans and programs, which have to be cleared/approved or other
government documents required within the respective mandates and jurisdiction of these agencies/LGUs.
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f) The final decision whether a project will be implemented or not lies either with the LGUs who have spatial
jurisdiction over the project or with the lead government agency who has sectoral mandate to promote the
government program where the project belongs, e.g. DOE for energy projects; DENR-MGB for mining
projects.(Emphasis supplied)
As can be seen, the issuance of the ECC does not, by and of itself, authorize the implementation of the project.
Although it is indispensable before the covered project can be commenced, asper Section 4 of PD 1586,the
issuanceof the ECC does not, as of yet, result inthe implementation of the project. Rather, the ECC is intended to,
among others, provide guidance or act as a decision-making tool to other government agencies and LGUs which
have the final authority to grant licenses or permits, such as building permits or licenses to operate, that will ultimately
result in, or authorize the implementation of the project or the conduct of specific activities.
As a consequence, we find that the CNO requirement under Section 59 of the IPRA Law is not required to be
obtained prior to the issuance of an ECC. As previously discussed, Section 59 aims to forestall the implementation of
a project that may impair the right of ICCs/IPs totheir ancestral domains, by ensuring or verifying that a project will not
overlap with any ancestral domain prior to its implementation. However, because the issuance of an ECC does not
result in the implementation of the project, there is no necessity to secure a CNO prior to an ECC’s issuance as the
goal orpurpose, which Section 59 seeks to achieve, is, at the time of the issuance of an ECC, not yet applicable.
In sum, we find that the ECC is not the license or permit contemplated under Section 59 of the IPRA Law and its
implementing rules. Hence, there is no necessity to secure the CNO under Section 59 before an ECC may be issued
and the issuance of the subject ECC without first securing the aforesaid certification does not render it invalid.
V.
Whether the Certificate of Non-Overlap (CNO), under Section 59 of the IPRA Law, is a precondition to the
consummation of the Lease and Development Agreement (LDA) between SBMA and RP Energy and the lack of its
prior issuance rendered the LDA invalid.
We now turn to the applicability of Section 59 of the IPRA Law to the LDA entered into between the SBMA and RP
Energy on June 8, 2010. Similar to the ECC, the LDA was entered into prior to the issuance ofthe CNO on October
31, 2012.
Before this Court, SBMA and RP Energy reiterate their arguments on why the CNO is no longer necessary in the
instant case, to wit:
1. Prior to entering into the LDA withRP Energy, SBMA entered into a lease agreement with HHIC - 206
Philippines, Inc. and a CNO was already issued therefor which, for all intents and purposes, is applicable to
the area leased by RP Energy being part of contiguous lots in Redondo Peninsula.
2. The site of the power plant project is very distant from the boundaries of the lone area at the Subic Bay
Freeport Zone covered by an Aeta Community’s Certificate of Ancestral Domain Title (CADT).
3. There was no indigenous community within the vicinity of the project area as stated in RP Energy’s EIS.
4. The land where the project is located was subsequently classified as industrial by the SBMA. 5. The
scoping/procedural screening checklist classified as "not relevant" the issue of indigenous people.
6. Ms. Mercado, who was part of the team which prepared the EIS, testified that she visited the project site
ten or more times and did not see any Aeta communities there.
7. Mr. Evangelista testified that the project site used to be a firing range of the U.S. Armed Forces which
would make it impossible to be a settlement area of indigenous communities.
8. Atty. Rodriguez stated that the project site is not covered by a CADT and that from the start of
negotiations on the LDA, the SBMA Ecology Center verified with the NCIP that there was no application for
said area to be covered by a CADT.
RP Energy further argues that, in any case, as a matter of prudence, it secured a CNO from the NCIP. On October
31, 2012, the NCIP issued the subject CNO over the project site, which should erase any doubt as to whether it
overlaps with an ancestral domain.
Upholding the arguments of the Casiño Group, the appellate court ruled that SBMA failed to comply with the CNO
requirement and, thus, the LDA entered into between SBMA and RP Energy is invalid. It rejected the reasons given
by SBMA and RP Energy, to wit:
1. RP Energy’s reliance on its own field investigation that no indigenous community was found within the
vicinity is unavailing because it was not the field investigation by the NCIP required by the IPRA Law.
2. RP Energy acknowledged that Aetas were among the earliest settlers in the municipality where the
project will be built. Hence, it was not clearly shown that in 2008, at the time the LDA was entered into, there
were no indigenouscommunities in the project site.
3. SBMA’s representation that the project site is industrial relies on a letter dated March 5, 2008 and the
scoping checklist, which are hearsay evidence.
4. The statements of Atty. Rodriguez have no probative value because he is not an officer of SBMA Ecology
Center oran officer of NCIP.
5. At the time the CNO was issued on October 31, 2012, and the field investigation relative thereto was
conducted by the NCIP, the project site no longer reflected the actual condition on December 22, 2008 when
the LDA was entered into because the households which occupied the site had already been relocated by
then.
6. SBMA, prior to entering into a lease agreement with HHIC, secured a CNO, but oddly did not do the same
with respect to the lease agreement with RP Energy, considering that both leases cover lands located within
the same peninsula. RP Energy appears to have been accorded a different treatment.
7. The CNO issued in favor of HHIC cannot justify the lack of a CNO for the power plant project because the
two projects are situated in different locations: the HHIC project is located in Sitio Agusuhin,while the power
plant project is located in Sitio Naglatore.
While we agree with the appellate court that a CNO should have been secured prior to the consummation of the LDA
between SBMAand RP Energy, and not after, as was done here, we find that, under the particular circumstances of
this case, the subsequent and belated compliance withthe CNO requirement does not invalidate the LDA.
For convenience, and as starting point of ouranalysis, we reproduce Section 59 of the IPRA Law below:
SEC. 59. Certification Precondition. All departments and other governmental agencies shall henceforth be strictly
enjoined from issuing, renewing, or granting any concession, license or lease, or entering into any productionsharing
agreement, without prior certification from the NCIP that the area affected does not overlap with any ancestral
domain.Such certification shall only be issued after a field-based investigation is conducted by the Ancestral Domains
Office of the area concerned: Provided, That no certification shall be issued by the NCIP without the free and prior
informed and written consent of ICCs/IPs concerned: Provided, further, That no department, government agency or
government-owned or -controlled corporation may issue new concession, license, lease, or production sharing
agreement while there is a pending application for a CADT: Provided, finally, That the ICCs/IPs shall have the right to
stop or suspend, in accordance with this Act, any project that has not satisfied the requirement of this consultation
The law is clear but its actual operation or application should not be interpreted beyond the bounds of reason or
practicality.
We explain.
Indeed, a CNO is required prior to the grant of a lease by all government agencies, including the SBMA. Again, the
evident intention is to prevent the impairment of the right of ICCs/IPs to their ancestral domains. A lease, such as the
LDA under consideration, would result in, among others, granting RP Energy the right to the use and enjoyment of
the project site to the exclusion of third parties. As such, the lease could conceivably encroach on an ancestral
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domain if the CNO is not first obtained.
However, implicit in the operation of Section 59 is the practical reality that the concerned government agency must
make a preliminary determinationon whether or not to obtain the required certification in the first place. To expound, a
government agency, which wishes to lease part of its property located near Padre Faura Street, Manila City could
not, and should not be reasonably expected to obtain the CNO, as it is obviously inapplicable to its planned lease. In
contrast, a government agency, which intends to lease a property in a valley or mountainous region, where
indigenous communities are known to reside, conduct hunting activities, perform rituals, or carry out some other
activities, should be reasonably expected to secure the CNO prior to consummating the planned lease with third
persons.
Even if the indigenous community does not actuallyreside on the proposed lease site, the government agency would
still be required to obtain the CNO preciselyto rule out the possibility that the proposed lease site encroaches upon an
ancestral domain. The reason for this is that an ancestral domain does not only cover the lands actually occupied by
an indigenous community, but all areas where they have a claim of ownership, through time immemorial use, such as
hunting, burial or worship grounds and to which they have traditional access for their subsistence and other traditional
activities.
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The wording of the law itself seems to presuppose that if the concession, lease, license or production-sharing
agreement is over natural resources, then the CNO should be first obtained. This is because the lastterm,
"production-sharing agreement," normally refers to natural resources. But the problem arises as to what should be
considered "natural resources"; for a vacant lot, nearPadre Faura Street, or a forest land, in Mt. Banahaw, could both
beconsidered as "natural resources," depending on the restrictive or expansive understanding of that term.
After due consideration, we find that the proper rule of action, for purposes of application of Section 59, is that all
government offices should undertake proper and reasonable diligence in making a preliminary determination on
whether to secure the CNO, bearing in mind the primordial State interest in protecting the rights of ICCs/IPs to their
ancestral domains. They should consider the nature and location of the areas involved; the historical background of
the aforesaid areas relative to the occupation, use or claim of ownership by ICCs/IPs; the present and actual
condition of the aforesaid areas likethe existence of ICCs/IPs within the area itself or within nearby territories; and
such other considerations that would help determine whether a CNO should be first obtained prior to granting a
concession, lease, license or permit, or entering into a production-sharing agreement.
If there are circumstances that indicate that a claim of ownership by ICCs/IPs may be present or a claim of ownership
may be asserted in the future, no matter how remote, the proper and prudent course ofaction is to obtain the CNO. In
case of doubt, the doubt should be resolved in favor of securing the CNO and, thus, the government agency is under
obligation tosecure the aforesaid certification in order to protect the interests and rights of ICCs/IPs to their ancestral
domains. This must be so if we are to accord the proper respect due to, and adequately safeguard the interests and
rights of, our brothers and sisters belonging to ICCs/IPs in consonance with the constitutional policy to promote and
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protect the rights of ICCS/IPs as fleshed out in the IPRA Law and its implementing rules.
In the case at bar, we find, applying this rule of action, that the SBMA should have first secured a CNO before
entering into the LDA with RP Energy for the following reasons.
First, the Subic area is historicallyknown to be the home of our brothers and sisters belonging to the Aeta
communities. In particular, the EIS itself of RP Energy noted that Aeta communities originally occupiedthe proposed
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project site of the power plant. Thus, even if we assume that, at the time of the ocular inspection of the proposed
project site in 2008, there were no Aeta communities seen thereat, as claimed by RP Energy, the exercise of
reasonable prudence should have moved SBMA and RP Energy to secure a CNO in order to rule out the possibility
that the project site may overlap with an ancestral domain. This is especially so, in view of the observation previously
made, that lack of actual occupation by an indigenous community ofthe area does not necessarily mean that it is not
a part of anancestral domain because the latter encompasses areas that are not actually occupied by
indigenouscommunities but are used for other purposes like hunting, worship or burial grounds.
Second, SBMA and RP Energy claim that the SBMA Ecology Center verified with the NCIP that the project site does
not overlap with an ancestral domain. However, the person, who allegedly did the verification, and the officer from the
NCIP, who was contacted in this alleged verification, were not presented in court. Assuming that this verification did
take place and that the SBMA Ecology Center determined that there is no pendingapplication for a CADT covering
the project site and that the presently recognized CADT of Aeta communities is too far away from the project site, it
still does not follow that the CNO under Section 59 should have been dispensed with. The acts of individual members
ofa government agency, who allegedly checked with the NCIP that the project site does not overlap with an ancestral
domain, cannot substitute for the CNO required by law. The reason is obvious. Such posture would circumvent the
noble and laudable purposes of the law in providing the CNO as the appropriate mechanism in order to validly and
officially determine whether a particular project site does not overlap with an ancestral domain. It would open the
doors to abuse because a government agency can easily claim that it checked with the NCIP regarding any
application for an ancestral domain over a proposed project site while stopping short of securing a CNO. To reiterate,
the legally mandated manner to verify if a project site overlaps with an ancestral domain is the CNO,and not through
personal verification by members of a government agency with the NCIP.
Third, that the project site was formerlyused as the firing range of the U.S. Armed Forces does not preclude the
possibility that a present orfuture claim of ancestral domain may be made over the aforesaid site. The concept of an
ancestral domain indicates that, even if the use ofan area was interrupted by the occupation of foreign forces, it may
still be validly claimed to be an ancestral domain.
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Fourth, that the project site was subsequently classified by the SBMA as forming part of an industrial zone does not
exempt it from the CNO requirement. The change in the classification of the land is not an exception to the CNO
requirement under the IPRA Law. Otherwise, government agencies can easily defeat the rights of ICCs/IPs through
the conversion of land use.
Fifth, SBMA argues that the CNO issued to HHIC should, for all intents and purposes, be applicable to RP Energy.
However, ascorrectly ruled by the appellate court, the CNO issued to HHIC’s shipyard cannot be extended to RP
Energy’s project site because they involve two different locations although found within the same land mass. The
CNO issued in favor of HHIC clearly states that the findings in the CNO are applicable only to the shipyard location of
HHIC. Last, the steps taken by SBMA, in securing a CNO prior to its lease agreement with HHIC, was the proper and
prudent course of action that should have been applied to the LDA with RP Energy. It does notmatter that HHIC itself
asked for the CNO prior to entering into a lease agreement with SBMA, as claimed by SBMA, while RP Energy did
not make such a request because, as we have discussed, SBMA had the obligation, given the surrounding
circumstances, to secure a CNO in order to rule out the possibility that the project site overlapped with an ancestral
domain.
All in all, we find, applying the foregoing rule of action,that SBMA should have secured a CNO before entering into
the LDA with RP Energy. Considering that Section 59 is a prohibitory statutory provision, a violation thereof would
ordinarily result in the nullification of the contract. However, we rule that the harsh consequences of such a ruling
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should not be applied to the case at bar.
The reason is that this is the first time that we lay down the foregoing rule of action so much so that it would be
inequitable to retroactively apply its effects with respect to the LDA entered into between SBMA and RPEnergy. We
also note that, under the particular circumstances of this case, there is no showing that SBMA and RP Energy had a
deliberate or ill intent to escape, defeat or circumvent the mandate of Section 59 of the IPRA Law. On the contrary,
they appear to have believed in good faith, albeiterroneously, that a CNO was no longer needed because of the
afore-discussed defenses they raised herein. When the matter of lack of a CNO relative to the LDA was brought to
their attention, through the subject Petition for Writ ofKalikasan filed by the Casiño Group, RP Energy, with the
endorsement of SBMA, promptly undertook to secure the CNO, which was issued on October 31, 2012 and stated
that the project site does not overlap with any ancestral domain.213
Thus, absent proof to the contrary, weare not prepared to rule that SBMA and RP Energy acted inbad faith or with
inexcusable negligence, considering that the foregoing rule of action has not heretofore been laiddown by this Court.
As a result, we hold that the LDA should notbe invalidated due to equitable considerations present here.
By so ruling, we clarify that we reject RP Energy’s claim that the belated submission of the CNO is an "over
compliance" on its part. Quite the contrary, as we have discussed, the CNO should have been first secured given the
surrounding circumstances of this case.
In the same vein, we reject SBMA’s argument thatthe belated application for, and submission of the CNO cured
whatever defect the LDA had. We have purposely avoided a ruling to the effect that a CNO secured subsequent to
the concession, lease, license, permit or production-sharing agreement will cure the defect. Such a ruling would lead
to abuse of the CNO requirement since the defect can be cured anyway by a subsequent and belated application for
a CNO. Government agencies and third parties, either through deliberate intent or negligence, may view it as an
excuse not to timely and promptly secure the CNO, even when the circumstances warrant the application for a CNO
under the aforediscussed rule of action, tothe damage and prejudice of ICCs/IPs. Verily, once the concession, lease,
license or permit is issued, or the agreement is entered into without the requisite CNO, consequent damages will
have already occurred if it later turns out that the site overlaps with anancestral domain. This is so even if the
ICCs/IPs can have the project stopped upon discovery thatit overlapped with their ancestral domain under the last
proviso of Section 59. To prevent this evil, compliance with the CNO requirement should be followed through the
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aforediscussed rule of action.

In sum, we rule that a CNO should have been secured prior to the consummation of the LDA between SBMA and RP
Energy. However, considering that this is the first time we lay down the rule of action appropriate to the application of
Section 59, we refrain from invalidating the LDA due to equitable considerations.
VI.
Whether compliance with Section 27, inrelation to Section 26, of the LGC (i.e., approval of the concerned
sanggunianrequirement) is necessary prior to the implementation of the power plant project.
Sustaining the arguments ofthe Casiño Group, the appellate court ruled that the subject project cannot beconstructed
and operated until after the prior approval of the concerned sanggunianrequirement, under Section 27 of the LGC, is
complied with. Hence, the ECC and LDA could not be validly granted and entered into without first complying with the
aforesaid provision. It held that all the requisites for the application of the aforesaid provision are present. As to the
pertinent provisions of RA 7227 or "TheBases Conversion and Development Act of 1992," which grants broad powers
of administration to the SBMA over the Subic Special Economic Zone(SSEZ), the appellate court ruled that RA 7227
contains a provision recognizing the basic autonomy ofthe LGUs which joined the SSEZ. Thus, the LGC and RA
7227should be harmonized whereby the concerned sanggunian’spower to approve under Section 27 must be
respected.
The DENR impliedly agrees with the Casiño Group that compliance with Section 27 is still required but without clearly
elaborating its reasons therefor.
The SBMA and RP Energy, however, argue that the prior approval of the concerned sanggunianrequirement, under
Section 27, is inapplicable to the subject project because it is located within the SSEZ. The LGC and RA 7227 cannot
be harmonized because of the clear mandate of the SBMA to govern and administer all investments and businesses
within the SSEZ. Hence, RA 7227 should be deemed as carving out an exception to the prior approval of the
concerned sanggunianrequirement insofar as the SSEZ is concerned.
We agree with the SBMA and RP Energy.
Preliminarily, we note that Sections 26 and 27 of the LGC contemplate two requirements: (1) prior consultations and
(2) prior approval of the concerned sanggunian,viz:
SECTION 26. Duty of National Government Agencies in the Maintenance of Ecological Balance. — It shall be the
duty of every national agency or government-owned or -controlled corporation authorizing or involved in the planning
and implementation of any project or program that may cause pollution, climatic change, depletion of non-renewable
resources, loss of cropland, rangeland, or forest cover, and extinction of animal or plant species, to consult with the
local government units, non governmental organizations, and other sectors concerned and explain the goals and
objectives of the project or program, its impact upon the peopleand the community in terms of environmental or
ecological balance, and the measures that will be undertaken to prevent or minimize the adverse effects thereof.
(Emphasis supplied)
SECTION 27. Prior Consultations Required. — No project or program shall be implemented by government
authorities unless 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. (Emphasis supplied)
In the case at bar, the Casiño Group only questions the alleged lack of the prior approval of the concerned
sanggunians under Section 27 of the LGC. Thus, we shall limit our discussion to the resolution of this issue.
(Parenthetically, we note that prior consultations, as required by Section 26 of the LGC, appear to have been
complied with. This may begleaned from the EIS of RPEnergy which contains the documentation of the extensive
public consultations held, under the supervision of the DENR-EMB, relative to the subject project, as required by the
EIA process, as well as the socialacceptability policy consultations conducted by the SBMA, which generated the
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document entitled "Final Report: Social Acceptability Process for RP Energy, Inc.’s 600-MW Coal Plant Project," as
noted and discussed in an earlier subsection. )216
We also note that the Casiño Group argues that the approval of the concerned sanggunian requirement was
necessary prior to the issuance of the ECC and the consummation of the LDA; the absence of which invalidated the
ECC and LDA.
We shall no longer discuss at length whether the approval of the concerned sanggunian requirement must be
complied with prior to the issuance of an ECC. As discussed in an earlier subsection, the issuance of an ECC does
not, by itself, result in the implementation of the project. Hence, the purpose or goal of Sections 26 and 27 of the
LGC,like Section 59 of the IPRA Law, does not yet obtain and, thus, the ECC may be issued evenwithout prior
compliance with Sections 26 and 27 of the LGC.
We, thus, limit the discussion as to whether the approval of the concerned sanggunian requirement should have been
complied with prior to the consummation of the LDA, considering that the LDA is part of the implementation of the
subject project and already vests in RP Energy the right to the use and enjoyment of the project site, asin fact
horizontal clearing activities were already undertaken by RP Energy at the project site by virtue of the LDA.
The prior approval of the concerned sanggunian requirement is an attribute and implementation of the local autonomy
granted to, and enjoyed by LGUs under the Constitution. The LGU has the duty to protect its constituents and
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interests in the implementation of the project. Hence, the approval of the concerned sanggunian is required by law to
ensure thatlocal communities partake in the fruits of their own backyard. 218
For Section 27, in relation to Section 26, to apply, the following requisites must concur: (1) the planning and
implementation of the project or program is vested in a national agency or government-owned and-controlled
corporation, i.e., national programs and/or projects which are to be implemented in a particular local community; and
(2) the project or program may cause pollution, climatic change, depletion of non-renewable resources, loss of
cropland, rangeland, or forest cover, extinction of animal or plant species, or call for the eviction of a particular group
of people residing in the locality where the project will be implemented. 219
In the case at bar, the two requisites are evidently present: (1) the planning and implementation of the subject project
involves the Department of Energy, DENR, and SBMA; and (2) the subject project may cause pollution, climatic
change, depletion of non-renewable resources, loss of cropland, rangeland, or forest cover, and extinction of animal
or plant species,or call for the eviction of a particular group of people residing in the locality where the project will be
implemented. Hence, Section 27 of the LGC should ordinarily apply.
It is not disputed that no approval was sought from the concerned sangguniansrelative to the subject project. Whatis
1a\^/phi 1
more, the affected LGUs have expressed their strong oppositions to the project through various sanggunian
resolutions. However, it is also undisputed that the subject project is located within the SSEZ and, thus, under the
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territorial jurisdiction of the SBMA pursuant to RA 7227.
Thus, we are tasked to determine the applicability of the prior approval of the concerned sanggunian requirement,
under Section 27 of the LGC, relative to a project within the territorial jurisdiction of the SBMA under RA 7227.
RA 7227 was passed on March 13, 1992 in the aftermath of the Mount Pinatubo eruption and the closure of the Subic
Naval Base ofthe U.S. Armed Forces. It sought to revivethe affected areas by creating and developing the SSEZ into
a "self-sustaining industrial, commercial, financial and investment center to generate employment opportunities in and
around the zone and to attract and promote productive foreign investments." The SSEZ covered the City of
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Olangapo and Municipality of Subic in the Province ofZambales and the lands and its contiguous extensions
occupied by the former U.S. Naval Base, which traversed the territories of the Municipalities of Hermosa and Morong
in the Province of Bataan. Under Section 12 of RA 7227, the creation of the SSEZ was made subject to the
concurrence by resolution of the respective sanggunians of the City of Olongapo and the Municipalities of Subic,
Morong and Hermosa, viz:
SECTION 12. Subic Special Economic Zone. — Subject to the concurrence by resolution of the sangguniang
panlungsod of the City of Olongapo and the sangguniang bayanof the Municipalities of Subic, Morong and Hermosa,
there is hereby created a Special Economic and Free-port Zone consisting of the City of Olongapo and the
Municipality of Subic, Province of Zambales, the lands occupied by the Subic Naval Base and its contiguous
extensions as embraced, covered, and defined by the 1947 Military Bases Agreement between the Philippines and
the United States of America as amended, and within the territorial jurisdiction of the Municipalities of Morong and
Hermosa, Province of Bataan, hereinafter referred to as the Subic Special Economic Zone whose metes and bounds
shall be delineated in a proclamation to be issued by the President of the Philippines. Within thirty (30) days after the
approval of this Act, each local government unit shall submit its resolution of concurrence to join the Subic Special
Economic Zone to the office of the President. Thereafter, the President of the Philippines shall issue a proclamation
defining the metes and bounds of the Zone as provided herein.
Subsequently, the aforesaid sanggunians submitted their respective resolutions of concurrence and the President
issued Presidential Proclamation No. 532, Series of 1995, defining the metes and bounds of the SSEZ.
In Executive Secretary v. Southwing Heavy Industries, Inc., we described the concept of SSEZ as a Freeport:
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The Freeport was designed to ensurefree flow or movement of goods and capital within a portion of the Philippine
territory in order to attract investors to invest their capital in a business climate with the least governmental
intervention. The concept ofthis zone was explained by Senator Guingona in this wise:
Senator Guingona. Mr. President, the special economic zone is successful in many places, particularly Hong Kong,
which is a free port. The difference between a special economic zone and an industrial estate is simply expansive in
the sense that the commercial activities, including the establishment of banks, services, financial institutions, agro-
industrial activities, maybe agriculture to a certain extent.
This delineates the activities that would have the least of government intervention, and the running of the affairs of
the special economic zone would be run principally by the investors themselves, similar toa housing subdivision,
where the subdivision owners elect their representatives to run the affairs of the subdivision, toset the policies, to set
the guidelines.
We would like to see Subic area converted into a little Hong Kong, Mr. President, where there is a hub of free port
and free entry, free duties and activities to a maximum spur generation of investment and jobs.
While the investor is reluctant to come in the Philippines, as a rule, because of red tape and perceived delays, we
envision this special economic zone to be an area where there will be minimum government interference.
The initial outlay may not only come from the Government or the Authority as envisioned here, but from them
themselves, because they would be encouraged to invest not only for the land but also for the buildings and factories.
As long as they are convinced that in such an area they can do business and reap reasonable profits, thenmany from
other parts, both local and foreign, would invest, Mr. President. (Emphasis in the original)
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To achieve the above-mentioned purposes, the law created SBMA to administer the SSEZ. In the process, SBMA
was granted broad and enormous powers as provided for under Section 13(b) of RA 7227:
Sec. 13. The Subic Bay Metropolitan Authority. –
xxxx
(b) Powers and functions of the Subic Bay Metropolitan Authority - The Subic Bay Metropolitan Authority,
otherwise knownas the Subic Authority, shall have the following powers and function: (1) To operate,
administer, manage and develop the ship repair and ship building facility, container port, oil storage and
refueling facility and Cubi Air Base within the Subic Special Economic and Free-port Zone as a free market
in accordance with the policies set forth in Section 12 of this Act;
(2) To accept any local or foreign investment, business or enterprise, subject only to such rules and
regulations to be promulgated by the Subic Authority in conformity with the policies of the
Conversion Authority without prejudice to the nationalization requirements provided for in the
Constitution;
(3) To undertake and regulate the establishment, operation and maintenance of utilities, other
services and infrastructure in the Subic Special Economic Zone including shipping and related
business, stevedoring and port terminal services or concessions, incidental thereto and airport
operations in coordination with the Civil Aeronautics Board, and to fix just and reasonable rates,
fares charges and other prices therefor;
(4) To construct, acquire, own, lease, operate and maintain on its own or through contract,
franchise, license permits bulk purchase from the private sector and build-operate transfer scheme
or joint-venture the required utilities and infrastructurein coordination with local government units
and appropriate government agencies concerned and inconformity with existing applicable laws
therefor;
(5) To adopt, alter and use a corporate seal; to contract, lease, sell, dispose, acquire and own
properties; to sue and be sued in order to carry out its duties and functions as provided for in this
Act and to exercise the power of eminent domain for public use and public purpose;
(6) Within the limitation provided by law, to raise and/or borrow the necessary funds from local and
international financial institutions and to issue bonds, promissory notes and other securities for that
purpose and to secure the same by guarantee, pledge, mortgage deed of trust, or assignment of its
properties held by the Subic Authority for the purpose of financing its projects and programs within
the framework and limitation of this Act;
(7) To operate directly or indirectly or license tourism related activities subject to priorities and
standards set by the Subic Authority including games and amusements, except horse racing, dog
racing and casino gambling which shall continue to be licensed by the Philippine Amusement and
Gaming Corporation (PAGCOR) upon recommendation of the Conversion Authority; to maintain
and preserve the forested areas as a national park;
(8) To authorize the establishment ofappropriate educational and medical institutions;
(9) To protect, maintain and develop the virgin forests within the baselands, which will be
proclaimed as a national park and subject to a permanent total log ban, and for this purpose, the
rules and regulations of the Department of Environment and Natural Resources and other
government agencies directly involved in the above functions shall be implemented by the Subic
Authority;
(10) To adopt and implement measures and standards for environmental pollution control of all
areas within its territory, including but not limited to all bodies of water and to enforce the same. For
which purpose the Subic Authority shall create an Ecology Center; and
(11) To exercise such powers as may be essential, necessary or incidental to the powers granted
to it hereunder as well as to carry out the policies and objectives of this Act. (Emphasis supplied)
The Implementing Rules of RA 7227 further provide:
Sec. 11. Responsibilities of the SBMA. Other than the powers and functions prescribed in Section 10 of these Rules,
the SBMA shall have the following responsibilities:
(a) The SBMA shall exercise authority and jurisdiction over all economic activity within the SBF 224
xxxx
(f) Consistent with the Constitution, the SBMA shall have the following powers to enforce the law and these Rules in
the SBF:
xxxx
(8) to issue, alter, modify, suspend or revoke for cause, any permit, certificate, license, visa or privilege allowed under
the Act or these Rules;
xxxx
(11) to promulgate such other rules, regulations and circulars as may be necessary, proper or incidental to carry out
the policies and objectives of the Act, these Rules, as well as the powers and duties of the SBMA thereunder. 225
As can be seen, the SBMA was given broad administrative powers over the SSEZ and these necessarily include the
power to approve or disapprove the subject project, which is within its territorial jurisdiction. But, as previously
discussed, the LGC grants the concerned sangguniansthe power to approve and disapprove this same project. The
SBMA asserts that its approval of the project prevails over the apparent disapproval of the concerned sanggunians.
There is, therefore, a real clash between the powers granted under these two laws.
Which shall prevail?
Section 12 of RA 7227 provides:
Sec. 12. Subic Special Economic Zone. x x x
The abovementioned zone shall be subjected to the following policies:
(a) Within the framework and subject to the mandate and limitations of the Constitution and the pertinent provisions of
the Local Government Code, the Subic Special Economic Zone shall bedeveloped into a self-sustaining, industrial,
commercial, financial and investment center to generate employment opportunities in and around the zone and to
attract and promote productive foreign investments;
xxxx
(i) Except as herein provided, the local government units comprising the Subic Special Economic Zone shall retain
their basic autonomy and identity. The cities shall be governed by their respective charters and the municipalities
shall operate and function in accordance with Republic Act No. 7160, otherwise known as the Local Government
Code of 1991. (Emphasis supplied)
This section sets out the basic policies underlying the creation of the SSEZ. Indeed, as noted by the appellate court,
Section 12(i) expressly recognizes the basic autonomy and identity of the LGUscomprising the SSEZ. However, the
clause "[e]xcept as herein provided" unambiguously provides that the LGUs do not retain their basic autonomy and
identitywhen it comes to matters specified by the law as falling under the powers, functions and prerogatives of the
SBMA.
In the case at bar, we find that the power to approve or disapprove projects within the SSEZ is one such power over
which the SBMA’s authority prevails over the LGU’s autonomy. Hence, there isno need for the SBMA to secure the
approval of the concerned sangguniansprior to the implementation of the subject project.
This interpretation is based on the broad grant of powers to the SBMA over all administrative matters relating to the
SSEZ under Section 13 of RA 7227, as afore-discussed. Equally important, under Section 14, other than those
involving defense and security, the SBMA’s decision prevails in case of conflict between the SBMA and the LGUs in
all matters concerning the SSEZ, viz.:
Sec. 14. Relationship with the Conversion Authority and the Local Government Units.
(a) The provisions of existing laws, rules and regulations to the contrary notwithstanding, the Subic Authority
shall exercise administrative powers, rule-making and disbursement of funds over the Subic Special
Economic Zonein conformity with the oversight function of the Conversion Authority.
(b) In case of conflict between the Subic Authority and the local government units concerned on matters
affecting the Subic Special Economic Zone other than defense and security, the decision of the
SubicAuthority shall prevail. (Emphasis supplied)
Clearly, the subject project does not involve defense or security, but rather business and investment to further the
development of the SSEZ. Such is in line with the objective of RA 7227 to develop the SSEZ into a self-sustaining
industrial, commercial, financial and investment center. Hence, the decision of the SBMA would prevail over the
apparent objections of the concerned sanggunians of the LGUs.
Significantly, the legislative deliberations on RA 7227, likewise, support and confirm the foregoing interpretation. As
earlier noted, Section 13 b(4) of RA 7227 provides:
Sec. 13. The Subic Bay Metropolitan Authority. –
xxxx
(b) Powers and functions of the Subic Bay Metropolitan Authority - The Subic Bay Metropolitan Authority, otherwise
knownas the Subic Authority, shall have the following powers and function: x x x x
(4) To construct, acquire, own, lease, operate and maintain on its own or through contract, franchise, license permits
bulk purchase from the private sector and build-operate transfer scheme or joint-venture the required utilities and
infrastructure in coordination with local government units and appropriate government agencies concerned and in
conformity with existing applicable laws therefor;
In the Senate, during the period of amendments, when the provision which would eventually become the afore-
quoted Section 13 b(4) of RA 7227 was under consideration, the following exchanges took place:
Senator Laurel. Mr. President.
The President. Senator Laurel is recognized.
Senator Laurel. Relative to line 27 up to line 31 of page 16, regarding the provision to the effect that the Authoritywill
have the following functions: "to construct, acquire, own, etcetera," that is all right.
My motion is that we amend this particular line, starting from the word "structures", by deleting the words that follow
on line 31, which states: "in coordination with local government unitsand", and substitute the following in place of
those words: "SUBJECT TO THE APPROVAL OF THE SANGGUNIAN OF THE AFFECTED LOCAL GOVERNMENT
UNITS AND IN COORDINATION WITH."
So, this paragraph will read, as follows: "to construct, own, lease, operate, and maintain on its own or through
contract, franchise, license permits, bulk purchase from the private sector and build-operate-transfer scheme or joint
venture the required utilities and infrastructure SUBJECT TO THE APPROVAL OF THE SANGGUNIAN OF THE
AFFECTED LOCAL GOVERNMENT UNITS AND IN coordination with appropriate government agencies concerned
and in conformity with existing applicable laws therefor."
The President. What does the Sponsor say?
Senator Shahani. I believe this would cripple the Authority. I would like to remind our Colleagues that in the Board of
Directors, the representatives of the local government units that agree to join with the Subic Special Economic Zone
will be members of the Board so that they will have a say, Mr. President. But if we say "subject," that is a very strong
word. It really means that they will be the ones to determine the policy.
So, I am afraid that I cannot accept this amendment, Mr. President.
Senator Laurel. May I respond or react, Mr. President.
The President. Yes.
Senator Laurel. The Constitution is there,very categorical inthe promotion and encouragement of local autonomy, and
mandating Congress to enact the necessary Local Government Code with emphasis on local autonomy.
We have now Section 27 of the new Local Government Code which actually provides that for every projectin any
local government territory, the conformity or concurrence of the Sanggunian of every such local government unit shall
be secured in the form of resolution—the consent of the Sanggunian.
The President. Well, both sides have already been heard. There is the Laurel amendment that would make the power
of the Subic Bay Metropolitan Authority to construct, acquire, own, lease, operate and maintain on its own or through
contract, franchise, license, permits, bulk purchases from private sector, buildoperate-and-transfer scheme, or joint
venture, the required utilities and infrastructure, subject to approval by the appropriate Sanggunian of the local
government concerned.
This amendment to the amendment has been rejected by the Sponsor. So, we are voting now on this amendment.
As many as are in favor of the Laurel amendment, say Aye. (Few Senators: Aye.)
Those who are against the said amendment, say Nay. (Several Senators: Nay.)
Senator Laurel. Mr. President, may I ask for a nominal voting.
The President. A nominal voting should beupon the request of one-fifth of the Members of the House, but we can
accommodate the Gentleman by asking for a division of the House. Therefore, those in favor of the Laurel
amendment, please raise their right hands. (Few Senators raised their right hands.)
Senator Laurel. I was asking, Mr. President, for a nominal voting. The President. A nominal voting can be had only
upon motion ofone-fifth of the Members of the Body. Senator Laurel. That is correct, Mr. President. But this issuch an
important issue being presented to us, because this question is related to the other important issue, which is: May an
elected public official of a particular government unit, such as a town or municipality, participate as a member of the
Board of Directors of this particular zone.
The President. The ruling of the Chair stands. The division of the House is hereby directed.
As many as are infavor of the Laurel amendment, please raised (sic) their right hands. (Few Senators raised their
right hands.)
As many as are against the said amendment, please do likewise. (Several Senators raised their right hands.)
The amendment is lost. (Emphasis supplied)

226
Indubitably, the legislature rejected the attempts to engraft Section 27’s prior approval of the concerned sanggunian
requirement under the LGC into RA 7227. Hence, the clear intent was to do awaywith the approval requirement of the
concerned sangguniansrelative to the power ofthe SBMA to approve or disapprove a project within the SSEZ.
The power to create the SSEZ is expressly recognized in Section 117 of the LGC, viz.:
TITLE VIII.
Autonomous Special Economic Zones
SECTION 117. Establishment of Autonomous Special Economic Zones. — The establishment by law of autonomous
special economic zones in selected areas of the country shall be subject to concurrence by the local government
units included therein.
When the concerned sanggunians opted to join the SSEZ, they were, thus, fully aware that this would lead to some
diminution of their local autonomy in order to gain the benefits and privileges of being a part of the SSEZ.
Further, the point of Senator Shahani that the representation of the concerned LGUs in the Board of Directors will
compensate for the diminution of their local autonomy and allow them to be represented in the decision-making of the
SBMA is not lost on us. This is expressly provided for in Section 13(c) of RA 7227, viz:
SECTION 13. The Subic Bay Metropolitan Authority. —
xxxx
(c) Board of Directors. — The powers of the Subic Authority shall be vested in and exercised by a Board of Directors,
hereinafter referred to as the Board, which shall be composed of fifteen (15) members, to wit:
(1) Representatives of the local government units that concur to join the Subic Special Economic Zone;
(2) Two (2) representatives from the National Government;
(3) Five (5) representatives from the private sector coming from the present naval stations, public works
center, ship repair facility, naval supply depot and naval air station; and
(4) The remaining balance to complete the Board shall be composed of representatives from the business
and investment sectors. (Emphasis supplied)
SBMA’s undisputed claim is that, during the board meeting when the subject project was approved, exceptfor one, all
the representatives of the concerned LGUs were present and voted to approve the subject project. Verily, the
227
wisdom of the law creating the SSEZ; the wisdom of the choice of the concerned LGUs to join the SSEZ; and the
wisdom ofthe mechanism of representation of the concerned LGUs in the decision-making process of the SBMA are
matters outside the scope of the power of judicial review. We can only interpret and apply the law as we find it.
In sum, we find that the implementation of the project is not subject to the prior approval of the concerned
sanggunians, under Section 27 of the LGC, and the SBMA’s decision to approve the project prevails over the
apparent objections of the concerned sangguniansof the LGUs, by virtue ofthe clear provisions of RA 7227. Thus,
there was no infirmity when the LDA was entered into between SBMA and RP Energy despite the lack of approval of
the concerned sanggunians. VII.
Whether the validity of the third amendment to the ECC can be resolved by the Court.
The Casiño Group argues that the validity of the third amendment should have been resolved by the appellate court
because it is covered by the broad issues set during the preliminary conference.
RP Energy counters that this issue cannot be resolved because it was expressly excluded during the preliminary
conference.
The appellate court sustained the position of RP Energy and ruled that this issue was not included in the preliminary
conference so that it cannot be resolved without violating the right todue process of RP Energy.
We agree with the appellate court.
Indeed, the issue of the validity of the third amendment to the ECC was not part of the issues set during the
preliminary conference, as it appears at that time that the application for the third amendment was still ongoing. The
following clarificatory questions during the aforesaid conference confirm this, viz.:
J. LEAGOGO:
So what are you questioning in your Petition?
ATTY. RIDON:
We are questioning the validity of the amendment, Your Honor.
J. LEAGOGO:
Which amendment?
ATTY. RIDON:
From 2 x 150 to 1 x 300, Your Honor.
J. LEAGOGO:
Your Petition does not involve the 2 x 300 which is still pending with the DENR. Because you still have remedies
there, you can make your noise there, you can question it to your heart[’]s content because it is still pending
xxxx
J. LEAGOGO:
Atty. Ridon, I go back to my question. We’re not yet talking of the legal points here. I’m just talking of what are you
questioning. You are questioning the 1 x 300?
ATTY. RIDON:
Yes, Your Honor.
J. LEAGOGO:
Because it was 2 x 150 and then 1 x 300?
ATTY. RIDON:
Yes, Your Honor.
J. LEAGOGO:
Up to that point?
ATTY. RIDON:
Yes, Your Honor.
J. LEAGOGO:
Because there is no amended ECC yet for the 2 x 300 or 600. That’s clear enough for all of us.
ATTY. RIDON:
Yes, Your Honor. 228
Given the invocation of the right to due process by RP Energy, we must sustain the appellate court’s finding that the
issue as to the validity of the third amendment cannot be adjudicated in this case.
Refutation of the Partial Dissent.
Justice Leonen partially dissents from the foregoing disposition on the following grounds:
(a) Environmental cases, such asa petition for a writ of kalikasan, should not, in general,be litigated viaa
representative, citizen or class suit because of the danger of misrepresenting the interests— and thus,
barring future action due to res judicata— of those not actually present in the prosecution of the case, either
because they do not yet exist, like the unborn generations, or because the parties bringing suit do not
accurately represent the interests ofthe group they represent or the class to which they belong. As an
exception, such representative, citizen or class suit may be allowed subject to certain conditions; and
(b) The amendments to the ECC, granted by the DENR in favor of RP Energy, are void for failure to submit
a new EIS in support of the applications for these amendments to the subject ECC, and a petition for writ of
kalikasanis not the proper remedy to raise a defect inthe ECC.
We disagree.
A.
Justice Leonen’s proposition that environmental cases should not, in general, be litigated via a representative, citizen
or class suit is both novel and ground-breaking. However, it isinappropriate to resolve such an important issue in this
case, in view of the requisites for the exercise of our power of judicial review, because the matter was not raised by
the parties so that the issue was not squarely tackled and fully ventilated. The proposition will entail, as Justice
Leonen explains, an abandonment or, at least, a modification of our ruling in the landmark case of Oposa v.
Factoran. It will also require an amendment or a modification of Section 5 (on citizen suits), Rule 2 ofthe Rules of
229
Procedure for Environmental Cases. Hence, it is more appropriate to await a case where such issues and arguments
are properly raisedby the parties for the consideration of the Court.
B.
Justice Leonen reasons that the amendments to the subject ECC are void because the applications therefor were
unsupported by anEIS, as required by PD 1151 and PD 1586. The claim is made that an EIS is required by law, even
if the amendment to the ECC is minor, because an EIS is necessary to determine the environmental impact of the
proposed modifications to the original project design. The DENR rules, therefore, which permit the modification of the
original project design without the requisite EIS, are void for violating PD 1151 and PD 1586.
We disagree.
Indeed, Section 4 of PD 1151 sets out the basic policy of requiring an EIS in every action, project or undertaking that
significantly affects the quality of the environment, viz:
SECTION 4. Environmental Impact Statements. — Pursuant to the above enunciated policies and goals, all agencies
and instrumentalities of the national government, including government-owned or -controlled corporations, as well as
private corporations, firms and entities shall prepare, file and include in every action, projector undertaking which
significantly affects the quality of the environmenta detailed statement on —
(a) the environmental impact of the proposed action, project or undertaking;
(b) any adverse environmental effect which cannot be avoided should the proposal be implemented;
(c) alternative to the proposed action;
(d) a determination that the short-term uses of the resources of the environment are consistent with the
maintenance and enhancement of the long-term productivity of the same; and
(e) whenever a proposal involves the use of depletable or nonrenewable resources, a finding must be made
that such use and commitment are warranted.
Before an environmental impact statement is issued by a lead agency, all agencies having jurisdiction over, or special
expertise on, the subject matter involved shall comment on the draft environmental impact statement made by the
lead agency within thirty (30) days from receipt of the same. (Emphasis supplied)
As earlier stated, the EIS was subsequently developed and strengthened through PD 1586 which established the
Philippine Environmental Impact Statement System. Sections 4 and 5 of PD 1586 provide:
SECTION 4. Presidential Proclamation of Environmentally Critical Areas and Projects. The President of the
1avvphi1
partnership or corporation shall undertake or operate any such declared environmentally critical project or area
without first securing an Environmental Compliance Certificate issued by the President or his duly authorized
representative. For the proper management of said critical project or area, the President may by his proclamation
reorganize such government offices, agencies, institutions, corporations or instrumentalities including the re-
alignment of government personnel, and their specific functions and responsibilities.
For the same purpose as above, the Ministry of Human Settlements shall: (a) prepare the proper land or water use
pattern for said critical project(s) or area(s); (b) establish ambient environmental quality standards; (c) develop a
program of environmental enhancement or protective measures against calamituous factors such as earthquake,
floods, water erosion and others, and (d) perform such other functions as may be directed by the President from time
to time.
SECTION 5. Environmentally Non-Critical Projects. — All other projects, undertakings and areas not declared by the
President as environmentally critical shall be considered as non-critical and shall not be required to submit an
environmental impact statement. The National Environmental Protection Council, thru the Ministry of Human
Settlements may however require non-critical projects and undertakings to provide additional environmental
safeguards as it may deem necessary. (Emphasis supplied)
These laws were, in turn, implemented by DAO 2003-30 and the Revised Manual.
As correctly noted by Justice Leonen,Presidential Proclamation No. 2146 was subsequently issued which, among
others, classified fossil-fueled power plants as environmentally critical projects.
In conformity with the above-quoted laws and their implementing issuances, the subject project, a coal power plant,
was classified by the DENR as an environmentally critical project, new and single. Hence, RP Energy was required to
submit an EIS in support of its application for an ECC. RP Energy thereafter complied with the EIS requirement and
the DENR, after review, evaluation and compliance with the other steps provided in its rules, issued an ECC in favor
of RP Energy. As can be seen, the EIS requirement was duly complied with.
Anent Justice Leonen’s argument thatthe subsequent amendments to the ECC were void for failure to prepare and
submit a new EIS relative to these amendments, it is important to note thatPD 1586 does not state the procedure to
be followed when there is an application for an amendment to a previously issued ECC. There is nothing in PD 1586
which expressly requires an EIS for an amendment to an ECC.
In footnote 174 of the ponencia, it is stated:
Parenthetically, we must mention that the validity of the rules providing for amendments to the ECC was challenged
by the Casiño Group on the ground that it is ultra vires before the appellate court. It argued that the laws governing
the ECC do not expressly permit the amendment of an ECC. However, the appellate court correctly ruled that the
validity of the rules cannot be collaterally attacked. Besides,the power of the DENR to issue rules on amendments of
an ECC is sanctioned under the doctrine of necessary implication. Considering that the greater power todeny or grant
an ECC is vested by law in the President or his authorized representative, the DENR, there is no obstacle to the
exercise of the lesser or implied power to amend the ECC for justifiable reasons. This issue was no longer raised
before this Court and, thus, we no longertackle the same here.
Because PD 1586 did not expressly provide the procedure to be followed in case of an application for an amendment
toa previously issued ECC, the DENR exercised its discretion, pursuant to its delegated authority to implement this
law, in issuing DAO 2003-30 and the Revised Manual.
Justice Leonen’s argument effectively challenges the validity of the provisions in DAO 2003-30 and the Revised
Manual relative to amendments to an ECC for being contrary to PD 1151 and 1586.
We disagree.
First, to repeat, there is nothing in PD 1586 which expressly requires an EIS for an amendment to an ECC.
Second, as earlier noted, the proposition would constitute a collateral attack on the validity of DAO 2003-30 and the
Revised Manual, which is not allowed under the premises. The Casiño Group itself has abandoned this claim before
this Court so that the issue is not properly before this Court for its resolution.
Third, assuming that a collateral attack on the validity of DAO 2003-30 and the Revised Manual can be allowed in this
case, the rules on amendments appear to be reasonable, absent a showing of grave abuse of discretion or patent
illegality.
Essentially, the rules take into consideration the nature of the amendment in determining the proper Environmental
Impact Assessment (EIA) document type that the project proponent will submit in support of its application for an
amendment to its previously issued ECC. A minor amendment will require a less detailed EIA document type, like a
Project Description Report (PDR), while a major amendment will require a more detailed EIA document type, like an
Environmental Performance Report and Management Plan (EPRMP) or even an EIS. 230
The rules appear to be based on the premise that it would be unduly burden some or impractical to require a project
proponent to submit a detailed EIA document type, like an EIS, for amendments that, upon preliminary evaluation by
the DENR, will not cause significant environmental impact. In particular, as applied to the subject project, the DENR
effectively determined that it is impractical to requireRP Energy to, in a manner of speaking, start from scratch by
submitting a new EIS in support of its application for the first amendment to its previously issued ECC, considering
that the existing EIS may be supplemented by an EPRMP to adequately evaluate the environmental impact of the
proposed modifications under the first amendment. The same reasoning may be applied to the PDR relative to the
second amendment. As previously discussed, the Casiño Group failed to provethat the EPRMP and PDR were
inadequate to assess the environmental impact of the planned modifications under the first and second amendments,
respectively. On the contrary, the EPRMP and PDR appeared to contain the details of the planned modifications and
the corresponding adjustments to bemade in the environmental management plan or mitigating measures inorder to
address the potential impacts of these planned modifications. Hence, absent sufficient proof, there is no basis to
conclude that the procedure adopted by the DENR was done with grave abuse of discretion.
Justice Leonen’s proposition would effectively impose a stringent requirement of an EIS for each and every proposed
amendment to an ECC, no matter how minor the amendment may be. While this requirement would seem ideal, in
order to ensure that the environmental impact of the proposed amendment is fully taken into consideration, the
pertinent laws do not, however, expressly require that such a procedure be followed.As already discussed, the DENR
appear to have reasonably issued DAO 2003-30 and the Revised Manualrelative to the amendment process of an
ECC, by balancing practicality vis-à-vis the need for sufficient information in determining the environmental impact of
the proposed amendment to an ECC. In fine, the Court cannot invalidate the rules which appear to be reasonable,
absent a showing of grave abuse of discretion or patent illegality.
We next tackle Justice Leonen’s argument that a petition for certiorari,and not a writ of kalikasan,is the proper remedy
to question a defect in an ECC.
In general, the proper procedure to question a defectin an ECC is to follow the appeal process provided in DAO
2003-30 and the Revised Manual. After complying with the proper administrative appeal process, recourse may be
made to the courts in accordance with the doctrine of exhaustion of administrative remedies. However, as earlier
discussed, in exceptional cases, a writ of kalikasan may be availed of to challenge defects in the ECC providedthat
(1) the defects are causally linked or reasonably connected to an environmental damage of the nature and
magnitudecontemplated under the Rules on Writ of Kalikasan, and (2) the case does not violate, or falls under an
exception to, the doctrine of exhaustion of administrative remedies and/or primary jurisdiction.
As previously discussed, in the case at bar, only the allegation with respect to the lack of an EIA relative to the first
and second amendments to the subject ECC may be reasonably connected to such an environmental damage.
Further, given the extreme urgency of resolving the issue due to the looming power crisis, this case may be
considered as falling under an exception to the doctrine of exhaustion of administrative remedies. Thus, the aforesaid
issue may be conceivably resolved in a writ of kalikasan case.
More importantly, we have expressly ruled that this case is an exceptional case due to the looming power crisis, so
that the rules of procedure may be suspended in order to address issues which, ordinarily, the Court would not
consider proper in a writ of kalikasan case. Hence, all issues, including those not proper in a writ of kalikasan case,
were resolved here in order to forestall another round of protracted litigation relative to the implementation of the
subject project.
Conclusion
We now summarize our findings:
1. The appellate court correctly ruled that the Casiño Group failed to substantiate its claims thatthe
construction and operation of the power plant will cause environmental damage of the magnitude
contemplated under the writ of kalikasan. On the other hand, RP Energy presented evidenceto establish that
the subject project will not cause grave environmental damage, through its Environmental Management
Plan, which will ensure thatthe project will operate within the limits of existing environmental laws and
standards;
2. The appellate court erred when it invalidated the ECC on the ground of lack of signature of Mr. Aboitiz in
the ECC’s Statement of Accountability relative to the copy of the ECC submitted by RP Energy to the
appellate court. While the signature is necessary for the validity of the ECC, the particular circumstances of
this case show that the DENR and RP Energy were not properly apprised of the issue of lack of signature in
order for them to present controverting evidence and arguments on this point, as the issue only arose during
the course of the proceedings upon clarificatory questions from the appellate court. Consequently, RP
Energy cannot be faulted for submitting the certified true copy of the ECC only after it learned that the ECC
had been invalidatedon the ground of lack of signature in the January 30, 2013 Decision of the appellate
court. The certified true copy of the ECC, bearing the signature of Mr. Aboitiz in the Statement of
Accountability portion, was issued by the DENR-EMB, and remains uncontroverted. It showed that the
Statement of Accountability was signed by Mr. Aboitiz on December 24, 2008. Because the signing was
done after the official release of the ECC on December 22, 2008, wenote that the DENR did not strictly
follow its rules, which require that the signing of the Statement of Accountability should be done before the
official release of the ECC. However, considering that the issue was not adequately argued norwas
evidence presented before the appellate court on the circumstances at the time of signing, there is
insufficient basis to conclude that the procedure adoptedby the DENR was tainted with bad faith or
inexcusable negligence. We remind the DENR, however, to be more circumspect in following its rules. Thus,
we rule that the signature requirement was substantially complied with pro hac vice.
3. The appellate court erred when it ruled that the first and second amendments to the ECC were invalid for
failure to comply with a new EIA and for violating DAO 2003-30 and the Revised Manual. It failed to properly
consider the applicable provisions in DAO 2003-30 and the Revised Manual for amendment to ECCs. Our
own examination of the provisions on amendments to ECCs in DAO 2003-30 and the Revised Manual, as
wellas the EPRMP and PDR themselves, shows that the DENR reasonably exercised its discretion in
requiring an EPRMP and a PDR for the first and second amendments, respectively. Through these
documents, which the DENR reviewed, a new EIA was conducted relative to the proposed project
modifications. Hence, absent sufficient showing of grave abuse of discretion or patent illegality, relative to
both the procedure and substance of the amendment process, we uphold the validity of these amendments;
4. The appellate court erred when it invalidated the ECC for failure to comply with Section 59 of the IPRA
Law. The ECC is not the license or permit contemplated under Section 59 of the IPRA Law and its
1âwphi1
implementing rules. Hence, there is no necessity to secure the CNO under Section 59 before an ECC may
be issued, and the issuance of the subject ECC without first securing the aforesaid certification does not
render it invalid;
5. The appellate court erred when it invalidated the LDA between SBMA and RP Energy for failure to comply
withSection 59 of the IPRA Law. While we find that a CNO should have been secured prior to the
consummation of the LDA between SBMA and RP Energy, considering that this is the first time we lay down
the rule of action appropriate to the application of Section 59, we refrain from invalidating the LDA for
reasons of equity;
6. The appellate court erred when it ruled that compliance with Section 27, in relation to Section 26, of the
LGC (i.e., approval of the concerned sanggunian requirement) is necessary prior to issuance of the
subjectECC. The issuance of an ECC does not, by itself, result inthe implementation of the project. Hence,
there is no necessity to secure prior compliance with the approval of the concerned sanggunian
requirement, and the issuance of the subject ECC without first complying with the aforesaid requirement
does not render it invalid. The appellate court also erred when it ruled that compliance with the aforesaid
requirement is necessary prior to the consummation of the LDA. By virtue of the clear provisions of RA
7227, the project is not subject to the aforesaid requirement and the SBMA’s decision to approve the project
prevails over the apparent objections of the concerned sanggunians. Thus, the LDA entered into between
SBMA and RP Energy suffers from no infirmity despite the lack of approval of the concerned sanggunians;
and
7. The appellate court correctly ruled thatthe issue as to the validity of the third amendment to the ECC
cannot be resolved in this case because it was not one of the issues set during the preliminary conference,
and would, thus, violate RP Energy’s right to due process. WHEREFORE, the Court resolves to:
1. DENY the Petition in G.R. No. 207282; and
2. GRANT the Petitions in G.R.Nos. 207257, 207366 and 207276:
2.1. The January 30, 2013 Decision and May 22, 2013 Resolution of the Court of Appeals
in CA-G.R. SP No. 00015 are reversed and set aside;
2.2. The Petition for Writ of Kalikasan, docketed as CA-G.R. SP No. 00015, is denied for
insufficiency of evidence;
2.3. The validity of the December 22, 2008 Environmental Compliance Certificate, as well
as the July 8, 2010 first amendment and the May 26, 2011 second amendment thereto,
issued by the Department of Environment and Natural Resources in favor of Redondo
Peninsula Energy, Inc., are upheld; and
2.4. The validity of the June 8, 2010 Lease and Development Agreement between Subic
Bay Metropolitan Authority and Redondo Peninsula Energy, Inc. is upheld.
SO ORDERED.

Associate Justice
WE CONCUR:

Chief Justice
(Please see Concurring Opinion)

ANTONIO T. CARPIO
Associate Justice
Associate Justice
(On leave)
TERESITA J. LEONARDO-DE CASTRO
ARTURO D. BRION*
Associate Justice
Associate Justice
DIOSDADO M. PERALTA LUCAS P. BERSAMIN

MARTIN S. VILLARAMA, JR. JOSE PORTUGAL PEREZ

JOSE CATRAL MENDOZA BIENVENIDO L. REYES

ESTELA M. PERLAS-BERNABE MARVIC M.V.F. LEONEN

FRANCIS H. JARDELEZA**
Associate Justice
CERTIFICATION
I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to
the writer ofth'e opinion of the Court.

Chief Justice
Footnotes
* On leave.
** No part.
1
Rollo (G.R. No. 207257), pp. 122-153; rollo (G.R. No. 207276), Volume I, pp. 13-105; rollo (G.R. 207282),
pp. 2-50; and rollo (G.R. No. 207366), pp. 117-149.
2
Rollo (G.R. No. 207257), pp. 158-258; penned by Associate Justice Celia C. Librea-Leagogo and
concurred in by Associate Justices Franchito N. Diamante and Melchor Quirino C. Sadang.
3
Id. at 259-266.
4
The Bases Conversion and Development Act of 1992.
5
Rollo (G.R. No. 207257), p. 210.
6
Id.
7
Id. at 210-211.
8
Id. at 159.
9
Id.
10
Id. at 211.
11
Id.
12
Rollo (G.R. No. 207276), Volume I, p. 24.
13
Rollo (G.R. No. 207257), p. 160.
14
Id. at 167 and 211.
15
Id. at 160.
16
Id. at 213.
17
Id. at 179.
18
Id. at 167.
19
Id.
20
Id. at 211.
21
Id. at 165.
22
Id. at 216.
23
Id. at 165.
24
Id at 216.
25
Id.
26
Id. at 160.
27
Id.
28
Id. at 159.
29
Id.
30
Id. at 179.
31
Id. at 159.
32
Id. at 163.
33
Id.
34
Id. at 161.
35
Id. at 160-161.
36
Id. at 162.
37
Id.
38
Id. at 170.
39
Id. at 170-172.
40
Id. at 173.
41
People’s Recovery Empowerment and Development Assistance
42
Rollo (G.R. No. 207257), p. 175.
43
Id.
44
Id. at 178.
45
Id. at 184.
46
Id. at 187.
47
Id. at 190.
48
Id. at 195.
49
Id. at 199.
50
Id. at 203.
51
Id. at 178.
52
Id. at 198.
53
Id. at 239-247.
54
Id. at 236-239.
55
Id. at 239.
56
Id. at 222-228.
57
Id. at 230-236.
58
Id. at 213-216.
59
Id. at 216-222.
60
Id. at 213.
61
Id. at 230-236.
62
Id. at 222-230.
63
Id. at 223-224.
64
Id.
65
Id. at 247-248.
66
Id. at 260.
67
Id.
68
Id. at 262.
69
Id. at 260-261.
70
Id. at 259-266.
71
Id. at 261.
72
Id.
73
Id. at 262.
74
Id. at 264.
75
Id. at 262-263.
76
Id. at 265.
77
Rollo (G.R. No. 207282), p. 26.
78
Id. at 27.
79
Id. at 27-28.
80
Id. at 29-36.
81
Id. at 39-44.
82
Rollo (G.R. No. 207257), pp. 133-137.
83
Id. at 148-152.
84
Id. at 150-151.
85
Id. at 151-152.
86
Id. at 141.
87
Id. at 138-145.
88
Id. at 140.
89
Id. at 145-148.
90
Rollo (G.R. No. 207366), pp. 134-137.
91
Id. at 136-137 and 140-141.
92
Id. at 141-142.
93
Id. at 142-147.
94
Id.
95
Id. at 138-139.
96
Id.
97
Id.
98
Rollo (G.R. No. 207276), Volume I, pp. 32-37.
99
Id. at 37-41.
100
Id. at 41-43.
101
Id. at 52-77.
102
Id. at 78-87.
103
Id. at 87-102.
104
Id. at 44-52.
105
Rule 7, Part III, Rules of Procedure for Environmental Cases
106
A.M. No. 09-6-8-SC dated April 13, 2010
107
ARTICLE VIII, Section 5(5) of the Constitution provides:
Section 5. The Supreme Court shall have the following powers:
xxxx
5. Promulgate rules concerning the protection and enforcement of constitutional rights, pleading,
practice, and procedure in all courts, the admission to the practice of law, the integrated bar, and
legal assistance to the under privileged. Such rules shall provide a simplified and inexpensive
procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade,
and shall not diminish, increase, or modify substantive rights. Rules of procedure of special courts
and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court.
108
Article II, Section 16, Constitution.
The Rationale and Annotation to the Rules of Procedure for Environmental Cases issued by the Supreme
109
Court [hereafter Annotation], p. 133.
110
Annotation, p. 78.
111
Annotation, p. 78-79.
112
Annotation, p. 139.
113
Rollo (G.R. 207282), pp. 2-50.
114
See Rule 43, Rules of Court.
115
See Bangus Fry Fisherfolk v. Lanzanas, 453 Phil. 479, 494 (2003).
It should be noted that the Rules on the Writ of Kalikasan were promulgated with due regard to the
116
doctrine of exhaustion of administrative remedies and primary jurisdiction. (Annotation, p. 100).
117
Boracay Foundation v. The Province of Aklan, G.R. No. 196870, June 26,2012, 674 SCRA 555, 604.
118
Annotation, p. 140.
119
CA rollo, Volume I, pp. 41-47.
120
Referred to as the Casiño Group in this case.
121
Rollo (G.R. No. 207257), pp. 241-245.
122
123
CA rollo, Volume XVI, pp. 5856-5857.
124
TSN, December 12, 2012, pp. 179-186.
RA 8749 entitled "An Act Providing for a Comprehensive Air Pollution Control Policy and for Other
125
Purposes"; also known as "The Philippine Clean Air Act of 1999."
126
Refers to ground level concentrations.
127
128
TSN, December 5, 2012, pp. 162-164, 169.
129
CA rollo, Volume XV, pp. 5763-5765.
130
CA rollo, Volume XVI, p. 5857.
131
Rollo (G.R. No. 207282), pp. 342-343.
132
TSN, December 12, 2012, pp. 171-174.
133
CA Rollo, Volume XVI, p. 5859.
134
TSN, December 12, 2012, pp. 141-148.
135
Section 3(l), DAO 2003-30.
136
Salomon v. Intermediate Appellate Court, 263 Phil. 1068, 1077 (1990).
137
The appellate court noted, thus:
However, while the CFB technology appears to be a better choice compared with the traditional
technology for operating power plants, it cannot be declared, at this point in time, that the CFB
technology to be used by RP Energy in its Power Plant project will not cause any environmental
damage or harm. Sarkki, who is one of the members of the team that developed the CFB
technology and an employee of Foster Wheeler (manufacturer of the CFB boilers) testified that: it
depends on the kind of coal and the technology to be used in burning the coal; semirara coal is
known to have very high fouling characteristics and it was not in the interest of RP Energy to utilize
said coal; and high fouling means ash is melting in low temperature and collected on its surfaces
and making it impossible to continue the operation of a boiler; RP Energy has not yet ordered any
CFB boiler from Foster Wheeler, and manufacturing has not started because there is no finalized
contract; and RP Energy is still finalizing its coal contract. Wong testified that he was not shown
any coal supply agreement. Ouano testified that, per report, there are no coal and equipment
supply agreements yet and that he recommended to RP Energy the Indonesian coal because it has
much lower volatile matter and it is better than semirara coal. Mercado also testified that she did
not see any coal supply agreement with a supplier. Evangelista testified that RP Energy already
selected Foster Wheeler as the supplier for the Power Plant project's boiler but there is no
purchase agreement yet in connection with the equipment to be used. Thus, since RP Energy has,
as yet, no equipment purchase agreement in connection with its proposed CFB Coal-Fired Power
Plant project nor a coal supply agreement that comply with the recommendations of the various
engineers on CFB technology, there is no scientific certainty of its environmental effect. [Rollo
(G.R. No. 207257), pp. 245-246]
138
CA rollo, Volume I, pp. 127-129.
139
Id. at 131-132.
140
SEC. 6. Failure to settle.- If there is no full settlement, the judge shall:
xxxx
(l) Determine the necessity of engaging the services of a qualified expert as a friend of the court
(amicus curiae); x x x
141
SEC. 12. Discovery Measures.— A party may file a verified motion for the following reliefs:
(a) Ocular Inspection; order — The motion must show that an ocular inspection order is necessary
to establish the magnitude of the violation or the threat as to prejudice the life, health or property of
inhabitants in two or more cities or provinces. It shall state in detail the place or places to be
inspected. It shall be supported by affidavits of witnesses having personal knowledge of the
violation or threatened violation of environmental law.
After hearing, the court may order any person in possession or control of a designated land or other
property to permit entry for the purpose of inspecting or photographing the property or any relevant
object or operation thereon. The order shall specify the person or persons authorized to make the
inspection and the date, time, place and manner of making the inspection and may prescribe other
conditions to protect the constitutional rights of all parties.
(b) Production or inspection of documents or things;order —The motion must show that a
production order is necessary to establish the magnitude of the violation or the threat as to
prejudice the life, health or property of inhabitants in two or more cities or provinces.
After hearing, the court may order any person in possession, custody or control of any designated
documents, papers, books, accounts, letters, photographs, objects or tangible things, or objects in
digitized or electronic form, which constitute or contain evidence relevant to the petition or the
return, to produce and permit their inspection, copying or photographing by or on behalf of the
movant.
The production order shall specify the person or persons authorized to make the production and
the date, time, place and manner of making the inspection or production and may prescribe other
conditions to protect the constitutional rights of all parties.
142
Annotation, p. 80.
143
Environmental Performance Report and Management Plan.
144
Rollo (G.R. 207282), pp. 21-22.
145
CA rollo, Volume III, p. 847.
146
Id.
147
TSN, October 29, 2012, p. 82; see also issues for the Casiño Group in preliminary conference.
148
In its Resolution dated July 23, 2013, the Court required the adverse parties to comment within ten days
from notice on the separate Petitions for Review on Certiorariin G.R. Nos. 207257, 207276, 207282 and
207366. Then in its Resolution dated April 1, 2014, the Court resolved to, among others, dispense with the
filing of the comment of respondents Casiño, et al. (Casiño Group) in G.R. No. 207276. Additionally, the
Court, among others, noted in its Resolution dated June 10, 2014, SBMA’s Manifestation and Motion to
Resolve dated May 21, 2014 praying, among others, that respondents Casiño, et al. (Casiño Group) be
deemed to have waived their right to file their comment with respect to the Petition for Review on Certiorari
dated July 15, 2013 in G.R. No. 207366.
As earlier noted, the groundsraised by the Casiño Group in its Petition for Writ of Kalikasanwere limited to
149
whether: (1) the power plant project would cause grave environmental damage; (2) it would adversely affect
the health of the residents of the municipalities of Subic, Zambales, Morong, Hermosa, and the City of
Olongapo; (3) the ECC was issued and the LDA entered into without the prior approval of the sanggunians
concerned as required under Sections 26 and 27 of the Local Government Code (LGC); (4) the LDA was
entered into without securing a prior certification from the NCIP as required under Section 59 of the IPRA
Law; (5) Section 8.3 of DAO 2003-30 which allows amendments of ECCs is ultra viresbecause the DENR
has no authority to decide on requests for amendments of previously issued ECCs in the absence of a new
EIS; and (6) due to the nullity of Section 8.3 of DAO 2003-30, all amendments to RP Energy’s ECC are null
and void.
150
As narrated earlier, the issues set during the preliminary conference were limited to:
I. ISSUES
A. Petitioners (Casiño Group)
1. Whether x x x the DENR Environmental Compliance Certificate (‘ECC’ x x x) in favor of

RP Energy for a 2x150 MW Coal-Fired Thermal Power Plant Project (‘Power Plant,’ x x x)
and its amendment to 1x300 MW Power Plant, and the Lease and Development
Agreement between SBMA and RP Energy complied with the Certification Precondition as
required under Section 59 of Republic Act No. 8371 or the Indigenous People’s Rights Act
of 1997 (‘IPRA Law,’ x x x);
2. Whether x x x RP Energy can proceed with the construction and operation of the 1x300
MW Power Plant without prior consultation with and approval of the concerned local
government units (‘LGUs,’ x x x), pursuant to Sections 26 and 27 of Republic Act No. 7160
or the Local Government Code;
3. Whether x x x Section 8.3 of DENR Administrative Order No. 2003-30 (‘DAO No. 2003-
30,’ x x x) providing for the amendment of an ECC is null and void for being ultra vires;
and
4. Whether x x x the amendment of RP Energy’s ECC under Section 8.3 of DAO No.
2003-30 is null and void.
B. Respondent RP Energy
1. Whether x x x Section 8.3 of DAO No. 2003-30 can be collaterally attacked;
1.1 Whether x x x the same is valid until annulled;
2. Whether x x x petitioners exhausted their administrative remedies with respect to the

amended ECC for the 1x300 MW Power Plant;
2.1 Whether x x x the instant Petition is proper;

3. Whether x x x RP Energy complied with all the procedures/requirements for the
issuance of the DENR ECC and its amendment;
3.1 Whether x x x a Certificate of Non-Overlap from the National Commission on

Indigenous Peoples is applicable in the instant case;
4. Whether x x x the LGU’s approval under Sections 26 and 27 of the Local Government
Code is necessary for the issuance of the DENR ECC and its amendments, and what
constitutes LGU approval;
5. Whether x x x there is a threatened or actual violation of environmental laws to justify

the Petition;
5.1 Whether x x x the approved 1x300 MW Power Plant complied with the
accepted legal standards on thermal pollution of coastal waters, air pollution,
water pollution, and acid deposits on aquatic and terrestrial ecosystems; and
6. Whether x x x the instant Petition should be dismissed for failure to comply with the
requirements of proper verification and certification of non-forum shopping with respect to
some petitioners.
C. Respondent DENR Secretary Paje
1. Whether x x x the issuance of the DENR ECC and its amendment in favor of RP Energy
requires compliance with Section 59 of the IPRA Law, as well as Sections 26 and 27 of
the Local Government Code;
2. Whether x x x Section 8.3 of DAO No. 2003-30 can be collaterally attacked in this
proceeding; and
3. Whether x x x Section 8.3 of DAO No. 2003-30 is valid.
Concededly, the issue as to "whether x x x RP Energy complied with all the

procedures/requirements for the issuance of the DENR ECC and its amendment" is broad enough
to include the issue of the lack of signature. That this was, however, contemplated by the parties or
the appellate court is negated by the context in which the issue arose, as will be discussed in what
follows.
151
TSN, December 12, 2012, pp. 63-67.
152
See CIVIL CODE, Art. 745 and 749.
153
Revised Procedural Manual for DAO 2003-30 (Revised Manual), p. 15.
154
Philippine Environmental Impact Statement System.
155
Administrative Order.
156
Underline supplied for this sentence.
157
Revised Manual, p. 9 and Glossary, letter h; Section 3(d), Article I, DAO 2003-30.
158
TSN, December 12, 2012, pp. 65-67.
159
CA rollo, Volume XVII, pp. 7010-7011.
160
Section 3 of PD 1151 provides:
SECTION 3. Right to a Healthy Environment. — In furtherance of these goals and policies, the
Government recognizes the right of the people to a healthful environment. It shall be the duty and
responsibility of each individual to contribute to the preservation and enhancement of the Philippine
environment.
161
Section 4, PD 1151.
162
Section 1, Article I, DAO 2003-30.
163
Section 3(h), Article I,DAO 2003-30.
Under Section 3(a), Article I of DAO 2003-30, a CNC is "a certification issued by the EMB certifying that,
164
based on the submitted project description, the project isnot covered by the EIS System and is not required
to secure an ECC."
As distinguished from single projects, co-located projects/undertakings are defined under Section 3(b),
165
Article I of DAO 2003-30 as "projects, or series of similar projects or a project subdivided to several phases
and/or stages by the same proponent, located in contiguous areas."
Section 3(k), Article I of DAO 2003-30 defines an EIS as a "document, prepared and submitted by the
166
project proponent and/or EIA Consultant that serves as an application for an ECC. It is a comprehensive
study of the significant impacts of a project on the environment. It includes an Environmental Management
Plan/ Program that the proponent will fund and implement to protect the environment."
Section 3(s), Article I of DAO 2003-30 defines an IEE as a "document similar to an EIS, but with reduced
167
details and depth of assessment and discussion."
Section 3(t), Article I of DAO 2003-30 defines an IEE Checklist Report as a "simplified checklist version of
168
an IEE Report, prescribed by the DENR, to be filled up by a proponent to identify and assess a project's
environmental impacts and the mitigation/enhancement measures to address such impacts."
Section 3(p), Article I of DAO 2003-30 defines an EPRMP as a "documentation of the actual cumulative
169
environmental impacts and effectiveness of current measures for single projects that are already operating
but without ECC’s, i.e., Category A-3. For Category B-3 projects, a checklist form of the EPRMP would
suffice."
Section 3(x), Article I of DAO 2003-30 defines a PD as a "document, which may also be a chapter in an
170
EIS, that describes the nature, configuration, use of raw materials and natural resources, production system,
waste or pollution generation and control and the activities of a proposed project. It includes a description of
the use of human resources as well as activity timelines, during the pre-construction, construction, operation
and abandonment phases. It is to be used for reviewing co-located and single projects under Category C, as
well as for Category D projects."
171
Section 3(p), Article I, DAO 2003-30.
172
Section 1.0, paragraph 8 (b), Revised Manual.
173
Glossary, letter (t), Revised Manual.
Parenthetically, we must mention that the validity of the rules providing for amendments to the ECC was
174
challenged by the Casiño Group on the ground that it is ultra viresbefore the appellate court. [It] argued that
the laws governing the ECC do not expressly permit the amendment of an ECC. However, the appellate
court correctly ruled that the validity of the rules cannot be collaterally attacked. Besides, the power of the
DENR to issue rules on amendments of an ECC is sanctioned under the doctrine of necessary implication.
Considering that the greater power to deny or grant an ECC is vested by law in the President or his
authorized representative, the DENR, there is no obstacle to the exercise of the lesser or implied power to
amend the ECC for justifiable reasons. This issue was nolonger raised before this Court and, thus, we no
longer tackle the same here.
175
Footnotes omitted.
176
Underline supplied.
177
Underline supplied.
178
Footnotes omitted.
179
Rollo (G.R. No. 207257), pp. 150-151. (DENR’s Petition, pp. 29-30)
180
Underline supplied.
181
Underline supplied.
182
Underline supplied.
183
Emphasis supplied.
184
To illustrate the flexibility of the EIA documents used in the EIA process, we can look at the EPRMP itself.
The contents of an EPRMP, under Section 5.2.5, Article II of DAO 2003-30, are as follows:
5.2.5. x x x
The EPRMP shall contain the following:
a. Project Description;
b. Baseline conditions for critical environmental parameters;
c. Documentation of the environmental performance based on the current/past

environmental management measures implemented;
d. Detailed comparative description of the proposed project expansion and/or process

modification with corresponding material and energy balances in the case of process
industries[;] and
e. EMP based on an environmental management system framework and standard set by

EMB.
As previously demonstrated, the EPRMP is not justused for ECPs, which are operating but without
an ECC or operating with a previous ECC but planning for expansion or re-start, but for major
amendments to a non-implemented project with a previous ECC, such as the subject project.
Section 5.2.5(c), however, requires that an EPRMP should contain "[d]ocumentation of the
environmental performance based on the current/past environmental management measures
implemented." This would be inapplicable to a nonimplemented project. Thus, the project
proponent merely notes in the EPRMP that there are no current/past environmental management
measures implemented because the project is not yet implemented. As can be seen, the use of the
EPRMP is flexible enough to accommodate such different project types, whether implemented or
not, for as long as the necessary information is obtained in order to assess the environmental
impact of the proposed changes to the original project design/description.
185
Emphasis supplied.
186
CA rollo, Volume IV, pp. 1129-1132.
Excerpts from Section 4 of the EPRMP ("Baseline Environmental Conditions for Critical
187
Environmental Parameters, Impact Assessment and Mitigation") are reproduced below:
4.1 The Land
4.1.1 Existing Condition
The proposed route of the transmission line will traverse grasslands with sloping terrain, ranging
from 3-50% slopes as shown in Figure 30 and Figure 31. x x x
4.1.2 Impacts
Construction of the transmission line components will include minimal civil and electrical works.
Tower structures will be pre-assembled in a workshop and transported to designated locations for
erection and linkage. Excavation and clearing activities will be minimal and short-term, whilst
generated spoils will be low/negligible in terms of volume.
xxxx
4.1.3 Mitigation
Generated spoils will be used as backfill material for aesthetic rehabilitation and stabilisation, if
necessary. Slope stabilisation, and inspection and testing of the transmission line components will
be conducted prior to project turnover for quality assurance and structural integrity. Proper handling
and transport of the tower structures, aswell as safe practice for electrical works will be
disseminated and complied with across all personnel and involved contractors.
An integrated foundation system consisting of combined footings will be employed in order to

ensure adequate footing embedment and tower stabilization. Soil stabilisation and slope protection
measures will be implemented to significantly reduce erosion potential of mountain soil.
Tower installation and related activities will only commence upon finalisation of agreement between
the proponent and concerned stakeholders (i.e.,regulatory agencies). Disputes and discussions
over lease agreement and right-of-way permitting works will be placed through due legal process of
the SBMA.
xxxx
4.2 The Water
xxxx
The Subic Bay is rich in marine biodiversity including coral reef areas, seagrass patches, fisheries
and coastal resources. x x x
4.2.2 Impacts
The additional RPE project facilities, except for the transmission line, will have impacts on water
quality and ecology for both freshwater and marine components, as these will be located along the
coastline or involve the use of freshwater resources.
The construction phase entails earth-moving activities, both inland and offshore. The initial concern
upon implementation of the project is the degradation of the reef area within the proposed RPE
project site, resulting from high sediment influx either via soil erosion, surface run-off or re-
suspension.
xxxx
4.2.3 Mitigation
The following mitigating measures may be applied in order to minimize the potential impacts of the
proposed project on marine resources. Whilst these measures will aid in minimizing the perceived
impacts, mortalities of coastal resources may still occur as individuals of different coral and
seagrass species have different levels of environmental sensitivity. Likewise, mortalities may also
be influenced by a variety of factors unrelated to the proposed project such as water temperature
fluctuations due to climatic phenomenon.
● Placing mooring buoys within the area encompassed by offshore construction work
would allow construction barges to dock onto them during the construction of the coal pier
and other offshore project facilities. The mooring buoys will negate the need to use chain
anchors to prevent these vessels from drifting towards the reef or seagrass areas.
● During the driving of the pier piles, the use of silt curtains to minimise suspended
sediments from reaching the coral community will aid the chance of survival of many coral
colonies. The coral community in the area is dominated by massive growth forms which
are more resilient to sedimentation compared to branching colonies. Whilst this is true,
these massive forms still have a maximum tolerance threshold, hence the use of
mitigating measures is imperative. Sediment curtains will greatly improve the chances of
survival of these corals during the construction phase by constraining the movement of
liberated silt.
● The operators of construction equipment, as well ascontractors, will need to be informed

of the location of the fragile coral community and seagrass bed in the area, so that they
will work in a manner that will minimise the effects on these areas. This condition can be
included in their contracts.
● Alignment and/or integration of mitigations withthe Subic Coastal Resources

Management Plan.
● Overall, the primary impact that needs to be mitigated is sedimentation resulting from
heavy equipment manoeuvring to construct the coal pier and other structures and from
increased traffic in the project area due to vehicles working inland and construction barges
working offshore.
xxxx
4.3 The Air
Baseline conditions for this module as reported in the EIS (GHD, 2008) are appropriate and
sufficient to describe site conditions for the additional RPE components. A brief summary to
highlight the key impacts and mitigation for this module are presented below.

The air shed of the proposed project site falls under the category of Type I climate, which is
characterized by two pronounced seasons, generally dry season from December to May, and wet
season from June to November.
4.3.2 Impacts
Dust and noise generation resulting from earthmoving activities (i.e., excavation, scraping and
leveling methods) is of significant concern. Concentration of suspended particulates in the
atmosphere is likely to increase for the duration of the construction phase. Similarly, high noise
levels within the immediate impact area will be experienced.
4.3.3 Mitigation
The proponent will implement control measures addressed at reducing noise levels and dust
concentrations. Regular wetting of construction grounds, as well as putting up perimeter wall
around major construction areas will limit the re-suspension of dust. Installation of noise barriers
(i.e., vegetation buffer, noise wall) around the construction area and noise reduction technology for
vehicles and equipment (i.e., mufflers) will significantly reduce the impacts of construction noise to
nearby communities. In addition, construction activities contributing to high-noise levels will be
scheduled during daytime. x x x (CA rollo, Volume IV, pp. 1193-1194, 1200-1201, 1204)
188
Section 3(x), Article I, DAO 2003-30.
189
Section 1.0, paragraph 8 (a) and (b), Revised Manual.
190
Glossary, letter aa, Revised Manual.
191
Rollo (G.R. No. 207257), pp. 151-152. (DENR’s Petition pp. 30-31)
192
Underline supplied.
193
Supra note 191.
194
Underline supplied.
195
Underline supplied.
196
Rollo (G.R. No. 207282) p. 9. (Casiño Group Petition, p. 8)
197
CA rollo, Volume V, pp. 1444-1448.
198
The PDR states, in part:
RPE now proposes to construct a single high-efficiency 300-MW (net) circulating-fluidized-bed

coal-fired generating unit for Phase 1 of the project, instead of two less-efficient 150-MW units, the
environmental impacts of which are unchanged from the original proposal. (CA rollo, Volume V, p.
1441)
199
Rollo (G.R. No. 207257), p. 68.
200
Section 3(h), Article I, DAO 2003-30.
Rules and Regulations implementing Republic Act No. 8371, otherwise known as "The Indigenous
201
Peoples’ Rights Act of 1997."

202
Cruz v. Sec. of Environment & Natural Resources, 400 Phil. 904, 1012 (2000).
203
RA 8371, Section 2 (b).
204
<http://legal-dictionary.thefreedictionary.com/license> (visited 27 November 2014).
205
<http://legal-dictionary.thefreedictionary.com/permit> (visited 27 November 2014).
206
Hanjin Heavy Industries and Construction
207
Article 1643 of the Civil Code provides:
ARTICLE 1643. In the lease of things, one of the parties binds himself to give to another the
enjoyment or use of a thing for a price certain, and for a period which may be definite or indefinite.
However, no lease for more than ninety-nine years shall be valid.
208
This is the clear import of the definition of "ancestral domains" in Section 3(a) of the IPRA Law, viz:
SECTION 3. Definition of Terms. — For purposes of this Act, the following terms shall mean:
a) Ancestral Domains — Subject to Section 56 hereof, refer to all areas generally belonging to
ICCs/IPs comprising lands, inland waters, coastal areas, and natural resources therein, held under
a claim of ownership, occupied or possessed by ICCs/IPs, by themselves or through their
ancestors, communally or individually since time immemorial, continuously to the present except
when interrupted by war, force majeure or displacement by force, deceit, stealth or as a
consequence of government projects or any other voluntary dealings entered into by government
and private individuals/corporations, and which are necessary to ensure their economic, social and
cultural welfare. It shall include ancestral lands, forests, pasture, residential, agricultural, and other
lands individually owned whether alienable and disposable or otherwise, hunting grounds, burial
grounds, worship areas, bodies of water, mineral and other natural resources, and lands which may
no longer be exclusively occupied by ICCs/IPs but from which they traditionally had access to for
their subsistence and traditional activities, particularly the home ranges of ICCs/IPs who are still
nomadic and/or shifting cultivators; x x x (Emphasis supplied)
209
The following are the relevant constitutional provisions:
Article II, Section 22: The State recognizes and promotes the rights of indigenous cultural
communities within the framework of national unity and development.
Article XII, Section 5: The State, subject to the provisions of this Constitution and national
development policies and programs, shall protect the rights of indigenous cultural communities to
their ancestral lands to ensure their economic, social, and cultural well-being.
The Congress may provide for the applicability of customary laws governing property rights and
relations in determining the ownership and extent of ancestral domain.
ARTICLE XIV, Section 17: The State shall recognize, respect, and protect the rights of indigenous
cultural communities to preserve and develop their cultures, traditions, and institutions. It shall
consider these rights in the formulation of national plans and policies.
ARTICLE XIII, Section 6: The State shall apply the principles of agrarian reform or stewardship,
whenever applicable in accordance with law, in the disposition or utilization of other natural
resources, including lands of the public domain under lease or concession suitable to agriculture,
subject to prior rights, homestead rights of small settlers, and the rights of indigenous communities
to their ancestral lands.
The State may resettle landless farmers and farmworkers in its own agricultural estates which shall
be distributed to them in the manner provided by law.
Article XVI, Section 12: The Congress may create a consultative body to advise the President on
policies affecting indigenous cultural communities, the majority of the members of which shall come
from such communities.
Article VI, Section 5(2): The party-list representatives shall constitute twenty per centum of the total
number of representatives including those under the party list. For three consecutive terms after the
ratification of this Constitution, one-half of the seats allocated to party-list representatives shall be
filled, as provided by law, by selection or election from the labor, peasant, urban poor, indigenous
cultural communities, women, youth, and such other sectors as may be provided by law, except the
religious sector.
210
RP Energy’s EIS dated September 2008 stated, in part:
4.4.1.1.4 Indigenous People
The Aetas are acknowledged to be one of the earliest settlers in the municipality. Historically, as
lowlanders came to Subic, Aetas were displaced and wereforced to flee to the hinterlands. While a
number of Aetas have managed to be integrated within the mainstream of development activities in
the municipality, many have remained deprived of public services such as health, social welfare
and basic education. Aeta families are scattered in some barangays in Subic, such as: Batiawan
and Naugsol. There are no Aeta communities identified within the vicinity of the project areas." (CA
rollo, Volume III, p. 857)
This is the clear implication of the clause "except when interrupted by war, force majeure or displacement
211
by force, deceit, stealth or as a consequence of government projects or any other voluntary dealings entered
into by government and private individuals/corporations" in the definition of "ancestral domain," in the IPRA
Law viz:
SECTION 3. Definition of Terms. — For purposes of this Act, the following terms shall mean:
a) Ancestral Domains — Subject to Section 56 hereof, refer to all areas generally belonging to
ICCs/IPs comprising lands, inland waters, coastal areas, and natural resources therein, held under
a claim of ownership, occupied or possessed by ICCs/IPs, by themselves or through their
ancestors, communally or individually since time immemorial, continuously to the present except
when interrupted by war, force majeure or displacement by force, deceit, stealth or as a
consequence of government projects or any other voluntary dealings entered into by government
and private individuals/corporations, and which are necessary to ensure their economic, social and
cultural welfare. It shall include ancestral lands, forests, pasture, residential, agricultural, and other
lands individually owned whether alienable and disposable or otherwise, hunting grounds, burial
grounds, worship areas, bodies of water, mineral and other natural resources, and lands which may
no longer be exclusively occupied by ICCs/IPs but from which they traditionally had access to for
their subsistence and traditional activities, particularly the home ranges of ICCs/IPs who are still
nomadic and/or shifting cultivators; x x x (Emphasis supplied)
212
Article 5 of the Civil Code provides:
ARTICLE 5. Acts executed against the provisions of mandatory or prohibitory laws shall be void,
except when the law itself authorizes their validity.
213
The Certificate of Non-Overlap with Control No. RIII-CNO-12-10-0011 issued on 31 October 2012 stated:
"THIS IS TO CERTIFY that based on the findings of the FBI Team in its report dated October 8,
2012 and submitted by Ms. Candida P. Cabinta, Provincial Officer, the applied site/s for
Certification Precondition situated at Subic Bay Freeport Zone (SBFZ) Sitio Naglatore, Brgy.
Cawag, Subic, Zambales covering an aggregate area of Thirty Eight (38.00) hectares more or less,
does not affect/overlap with any ancestral domain.
THIS CERTIFICATIONis issued to SBMA-REDONDO PENINSULA ENERGY CORPORATION

with office address at Unit 304 The Venue, Rizal Highway, Subic Bay Industrial Park, Phase I,
Subic Bay Freeport Zone 2222 in connection with the application for 600 MW Circulating Fluidized
Bed (CFB) Coal Fired Power Plant before the Ecology Center, Subic Bay Metropolitan Authority. x
x x x (CA rollo, Volume XVI, p. 6495)
214
SECTION 59. Certification Precondition. — All departments and other governmental agencies shall
henceforth be strictly enjoined from issuing, renewing, or granting any concession, license or lease, or
entering into any production-sharing agreement, without prior certification from the NCIP that the area
affected does not overlap with any ancestral domain. Such certification shall only be issued after a
fieldbased investigation is conducted by the Ancestral Domains Office of the area concerned: Provided, That
no certification shall be issued by the NCIP without the free and prior informed and written consent of
ICCs/IPs concerned: Provided, further, That no department, government agency or government-owned or -
controlled corporation may issue new concession, license, lease, or production sharing agreement while
there is a pending application for a CADT: Provided, finally, That the ICCs/IPs shall have the right to stop or
suspend, in accordance with this Act, any project that has not satisfied the requirement of this consultation
The DENR, in assessing ECC applications, requires project proponents to conduct public
215
participation/consultation. Section 5.3, Article II of DAO 2003-30 on public hearing/consultation requirements

provides, in part:
Proponents should initiate public consultations early in order to ensure that environmentally
relevant concerns of stakeholders are taken into consideration in the EIA study and the formulation
of the management plan. All public consultations and public hearings conducted during the EIA
process are to be documented. x x x
In any event, there appears to be no good reason why the subject project should not comply with the prior
216
consultations requirement under Section 26, in relation to Section 27, of the LGC. There would be no conflict
with RA 7227 because prior consultations do not impair the power of the SBMA to approve or disapprove a
project within the SSEZ, i.e. the results of the public consultations do not bind or compel the SBMA to either
approve or disapprove the project or program. Seediscussion, infra.
217
Article X, Section 2 of the Constitution provides:
The territorial and political subdivisions shall enjoy local autonomy.
218
Alvarez v. Picop, 538 Phil 348, 402-403 (2006).
219
Lina, Jr. v. Paño, 416 Phil. 438, 449-450 (2001).
220
Supra notes 15, 26, and 27.
221
RA 7227, Section 12(a).
222
518 Phil 103 (2006).
223
Id. at124-125.
224
Subic Bay Freeport; also referred to as the SSEZ.
Section 11 of the "Rules and Regulations Implementing the Provisions Relative to the Subic Special
225
Economic and Freeport Zone and the Subic Bay Metropolitan Authority Under Republic Act No. 7227,
Otherwise Known as the ‘Bases Conversion and Development Act of 1992."
226
III RECORDS, SENATE 8TH CONGRESS, 59TH SESSION, 613 (January 29, 1992).
227
CA rollo, Volume XVII, p. 6893. (Motion for Reconsideration of SBMA)
228
TSN, October 29, 2012, pp. 47, 50-51.
229
G.R. No. 101083, July 30, 1993, 224 SCRA 792 (1993).
Note that in Item #8 of the "DECISION CHART FOR DETERMINATION OF REQUIREMENTS FOR
230
PROJECT MODIFICATION," a new EIS canbe required for the amendment covered therein:
8. Conversion to new Considered new application but with lesser data New
project type (e.g. ECC
bunkerfired plant requirements since most facilities are established; /EIS
to gas-fired) environmental performance in the past will serve as
baseline; However, for operating projects, there may be
need to request for Relief from ECC Commitment prior to
applying for new project type to ensure no balance of
environmental accountabilities from the current project
SECOND DIVISION
G.R. No. 198860 July 23, 2012
ABRAHAM RIMANDO, Petitioner,

vs.
NAGUILIAN EMISSION TESTING CENTER, INC., represented by its President, ROSEMARIE LLARENAS and
HON. COURT OF APPEALS, Respondents.
RESOLUTION
REYES, J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul and set aside
1
Decision dated March 30, 2011 of the Court of Appeals (CA) in CA-G.R. SP NO. 112152.
2
The Facts
The present controversy stemmed from a petition for mandamus and damages filed before Branch 67 of the Regional
Trial Court (RTC) of Bauang, La Union, by Naguilian Emission Testing Center, Inc., represented by its President,
Rosemarie Llarenas (respondent) against Abraham P. Rimando (petitioner), who, at the time material to the case,
was the sitting mayor of the Municipality of Naguilian, La Union.
The petition prayed for the issuance of a writ of mandamus to compel the petitioner to issue a business permit in
favor of the respondent.
In support of its plea, the respondent claimed that its business is being conducted on a parcel of land which formerly
belonged to the national government but later on certified by the Department of Environment and Natural Resources
(DENR) as an alienable and disposable land of the public domain. The respondent had operated its business of
emission testing on the land from 2005 to 2007. On January 18, 2008, the respondent filed an application for the
renewal of its business permit and paid the corresponding fees therefor.
The petitioner, however, refused to issue a business permit unless and until the respondent executes a contract of
lease with the Municipality of Naguilian. The respondent was amenable to signing such contract subject to some
proposed revisions, which, however, were not acceptable to the petitioner. The parties did not reach a common
ground hence, the petition for mandamus.
The Ruling of the RTC
On May 26, 2009, the RTC denied the petition for lack of merit based on the ratiocinations that: (a) the Municipality of
3
Naguilian is the declared owner of the subject parcel of land by virtue of Tax Declaration No. 002-01197; (b) under
Section 6A.01 of the Revenue Code of the Municipality of Naguilian, the municipality has the right to require the
petitioner to sign a contract of lease because its business operation is being conducted on a real property owned by
the municipality; and (c) a mayor’s duty to issue business permits is discretionary in nature which may not be
enforced by a mandamus writ. The decretal portion of the decision reads:
WHEREFORE, premises considered, the petition is DENIED for lack of merit.
SO ORDERED. 4
The Ruling of the CA
Unwaivering, the respondent appealed to the CA. In its Decision dated March 30, 2011, the CA held that the appeal
5
was dismissible on the ground of mootness considering that the period for which the business period was being
sought had already lapsed. As such, any ruling on the matter would bring no practical relief. Nonetheless, the CA
proceeded to resolve the issues involved in the appeal for academic purposes.
The CA disagreed with the RTC and found that the factual milieu of the case justifies the issuance of a writ of
mandamus. The CA reasoned that the tax declaration in the name of the municipality was insufficient basis to require
the execution of a contract of lease as a condition sine qua non for the renewal of a business permit. The CA further
observed that Sangguniang Bayan Resolution No. 2007-81, upon which the municipality anchored its imposition of
rental fees, was void because it failed to comply with the requirements of the Local Government Code and its
Implementing Rules and Regulations.
The CA held that the petitioner may not be held liable for damages since his action or inaction, for that matter, was
done in the performance of official duties that are legally protected by the presumption of good faith. The CA likewise
stressed that the civil action filed against the petitioner had already become moot and academic upon the expiration
of his term as the mayor of Naguilian, La Union.
Despite its incessant declarations on the mootness of the case, the CA disposed of the appeal in this wise:
WHEREFORE, the Decision dated 26 May 2009 of the Regional Trial Court, First Judicial Region, Bauang, La Union,
Branch 67, in Special Civil Action Case No. 72-BG, is hereby REVERSED and SET ASIDE.
SO ORDERED. 6
The petitioner moved for reconsideration questioning the pronouncement of the CA that Sangguniang Bayan
7
Resolution No. 2007-81 was void and arguing that a petition for mandamus is not the proper vehicle to determine the
issue on the ownership of the subject land. The motion was denied in the CA Resolution dated September 30, 2011.
8
The petitioner is now before this Court reiterating the arguments raised in his motion for reconsideration.
Our Ruling
We agree with the CA that the petition for mandamus has already become moot and academic owing to the
expiration of the period intended to be covered by the business permit.
An issue or a case becomes moot and academic when it ceases to present a justiciable controversy so that a
determination thereof would be without practical use and value or in the nature of things, cannot be enforced. In such
9 10
cases, there is no actual substantial relief to which the applicant would be entitled to and which would be negated by
the dismissal of the petition. As a rule, courts decline jurisdiction over such case, or dismiss it on ground of
11
mootness. 12
The objective of the petition for mandamus to compel the petitioner to grant a business permit in favor of respondent
corporation for the period 2008 to 2009 has already been superseded by the passage of time and the expiration of
the petitioner’s term as mayor. Verily then, the issue as to whether or not the petitioner, in his capacity as mayor, may
be compelled by a writ of mandamus to release the respondent’s business permit ceased to present a justiciable
controversy such that any ruling thereon would serve no practical value. Should the writ be issued, the petitioner can
no longer abide thereby; also, the effectivity date of the business permit no longer subsists.
While the CA is not precluded from proceeding to resolve the otherwise moot appeal of the respondent, we find that
the decretal portion of its decision was erroneously couched.
The CA’s conclusions on the issue of ownership over the subject land and the invalidity of Sangguniang Bayan
Resolution No. 2007-81, aside from being unsubstantiated by convincing evidence, can no longer be practically
utilized in favor of the petitioner. Thus, the overriding and decisive factor in the final disposition of the appeal was its
mootness and the CA should have dismissed the same along with the petition for mandamus that spawned it.
More importantly, a mayor cannot be compelled by mandamus to issue a business permit since the exercise of the
same is a delegated police power hence, discretionary in nature. This was the pronouncement of this Court in Roble
Arrastre, Inc. v. Hon. Villaflor where a determination was made on the nature of the power of a mayor to grant
13
business permits under the Local Government Code, viz: 14
Central to the resolution of the case at bar is a reading of Section 444(b)(3)(iv) of the Local Government Code of
1991, which provides, thus:
SEC. 444. The Chief Executive: Powers, Duties, Functions and Compensation.
municipality and its inhabitants pursuant to Section 16 of this Code, the municipal mayor shall:
xxxx
3) Initiate and maximize the generation of resources and revenues, and apply the same to the
implementation of development plans, program objectives and priorities as provided for under Section 18 of
this Code, particularly those resources and revenues programmed for agro-industrial development and
country-wide growth and progress, and relative thereto, shall:
xxxx
(iv) Issue licenses and permits and suspend or revoke the same for any violation of the conditions upon
which said licenses or permits had been issued, pursuant to law or ordinance.
As Section 444(b)(3)(iv) so states, the power of the municipal mayor to issue licenses is pursuant to Section 16 of the
Local Government Code of 1991, which declares:
SEC. 16. General Welfare. – Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective
governance, and those which are essential to the promotion of the general welfare. Within their respective territorial
jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment
of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support
the development of appropriate and self-reliant scientific and technological capabilities, improve public morals,
enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and
order, and preserve the comfort and convenience of their inhabitants.
Section 16, known as the general welfare clause, encapsulates the delegated police power to local
governments. Local government units exercise police power through their respective legislative bodies. Evidently, the
1âwphi1
Local Government Code of 1991 is unequivocal that the municipal mayor has the power to issue licenses and permits
and suspend or revoke the same for any violation of the conditions upon which said licenses or permits had been
issued, pursuant to law or ordinance. x x x
xxxx
Section 444(b)(3)(iv) of the Local Government Code of 1991, whereby the power of the respondent mayor to issue
license and permits is circumscribed, is a manifestation of the delegated police power of a municipal corporation.
Necessarily, the exercise thereof cannot be deemed ministerial. As to the question of whether the power is validly
exercised, the matter is within the province of a writ of certiorari, but certainly, not of mandamus. (Citations omitted)
15
Indeed, as correctly ruled by the RTC, the petition for mandamus filed by the respondent is incompetent to compel
the exercise of a mayor’s discretionary duty to issue business permits.
WHEREFORE, premises considered, the Decision dated March 30, 2011 of the Court of Appeals in CA-G.R. SP No.
112152 is hereby SET ASIDE. The Decision dated May 26, 2009 of the Regional Trial Court of Bauang, La Union is
REINSTATED.
SO ORDERED.
BIENVENIDO L. REYES
Associate justice
WE CONCUR:
ANTONIO T. CARPIO
Senior Associate Justice
Chairperson, Second Division

Associate justice
JIOSE PORTUGAL PEREZ

Associate justice

Associate justice
CERTIFICATION
I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned
to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 296, The Judiciary Act of 1948, as amended)
Footnotes
* Additional member per Special Order No. 1257 dated July 19, 2012, in lieu of the absence of Associate
Justice Arturo D. Brion.
1
Rollo, pp. 4-20.
2
Penned by Associate Justice Japar B. Dimaampao, with Associate Justices Mariflor P. Punzalan Castillo
and Jane Aurora C. Lantion, concurring; id. at 22-22.
3
Under the sala of Judge Ferdinand A. Fe; id. at 46-49.
4
Id. at 49.
5
Supra note 2.
6
Rollo, p. 33.
7
Id. at 34-41.
8
Id. at 42-43.
9
Philippine Airlines, Inc. v. Pascua, 456 Phil. 425, 436 (2003).
Lanuza, Jr. v. Yuchengco, 494 Phil. 125, 133 (2005); See also Gonzales v. Narvasa, 392 Phil.518, 522
10
(2000); Villarico v. Court of Appeals, 424 Phil. 26 (2002); King v. Court of Appeals, 514 Phil. 465, 470
(2005).
11
Soriano Vda. De Dabao v. Court of Appeals, 469 Phil. 928 (2004).
Gunsi, Sr. v. Commissioners, The Commission on Elections, G.R. No. 168792, February 23, 2009, 580
12
SCRA 70, 76.
13
531 Phil. 30 (2006).
Although the case involved the issuance of a business permit for arrastre service, the general power of a
14
mayor to issue business permits is encapsulated in the same legal provision of the Local Government Code
without distinguishing the nature of the business for which a permit is sought.
15
Supra note 13, at 43-46.
FIRST DIVISION
[G.R. No. 131481, March 16 : 2011]
BUKLOD NANG MAGBUBUKID SA LUPAING RAMOS, INC., PETITIONER, VS. E. M. RAMOS AND SONS, INC., RESPONDENT.
[G.R. No. 131624]
DEPARTMENT OF AGRARIAN REFORM, PETITIONER, VS. E. M. RAMOS AND SONS, INC., RESPONDENT.
DECISION
LEONARDO-DE CASTRO, J.:
Before the Court are consolidated Petitions for Review on Certiorari, under Rule 45 of the 1997 Rules of Civil Procedure, filed by the Buklod ng
Maqbubukid Sa Lupaing Ramos, Inc. (Buklod) and the Department of Agrarian Regorm (DAR), assailing the Decision [1] dated March 26, 1997
and the Resolution[2] dated November 24, 1997 of the Court of Appeals in CA G.R. SP No. 40950.
The Court of Appeals declared the parcels of land owned by E.M. Ramos and Sons, Inc. (EMRASON), located in Barangay Langkaan,
DasmariÃ±as, Cavite (subject property), exempt from the coverage of the Comprehensive Agrarian Reform Program (CARP), thus, nullifying
and setting aside the Decision[3] dated February 7, 1996 and Resolution[4] dated May 14, 1996 of the Office of hte President (OP) in O.P. Case
No. 5461.
Quoted hereunder are the facts of the case as found by the Court of Appeals:
At the core of the controversy are several parcels of unirrigated land (303.38545 hectares) which from part of a larger expanse with an area
of 372 hectares situated at Barangay Langkaan, DasmariÃ±as, Cavite. Originally owned by the MAnila Golf and Country Club, he property
was aquired by the [herein repondent EMRASON] in 1965 for the purpose of developing the same into a residential subdivision known as
"Traveller's Life Homes".
Sometime in 1971, the Municipal Council of DasmariÃ±as, Cavite, acting pursuant to Republic Act (R.A.) No. 2264, otherwise known as the
"Loval Autonomy Act", enacteed Municipal Ordinance No. 1, hereinafter referred to as Ordinance No. 1, enitled "An Ordinance Providing
Subdivision Regulation and Providing Penalties for Violation Thereof."
In May, 1972, [respondent] E.M. Ramos and Sons, Inc., applied for an authority to convert and development its aforementioned 372-hectare
property into a residential subdivision, ataching to the apllication detailed development plans and development proposals from Bancom
Development Corporation and San Miguel Corporation. Acting thereon the Municipal Council of DasmariÃ±as, Cavite passed on July 9, 1972
Municipal Ordinance No. 29-A (Ordinance "No. 29-A, for brevity), approving [EMRASON's] application. Ordinance No. 29-A pertinently reads:
"Resolved, as it is hereby resolved, to approve the application for subdivision containing an area of Three Hundred Seventy-Two (372)
Hectares situated in Barrios Bocal and Langkaan, named as Traveller's Life Homes.
Resolved that the Municipal Ordinance regarding subdivision regulations existing in this municipality shall be strictly followed by the
subdivision ".
Subsequently, [EMRASON] paid the fees, dues and licenses needed to proceed with property development.
It appears, however, that the actual implementation of the subdivision project suffered delay owing to the confluence of events. Among these
was the fact that the property in question was then mortgaged to, and the titles thereto were in the possession of, the Overseas Bank of
Manila, which during the period material was under liquidation.
On June 15. 1988, Republic Act No. 6657, otherwise known as the Comprehensive Agrarian Reform Law or CARL, took effect, ushering in a
new process of land classification, acquisition and distribution.
On September 23, 1988, the Municipal Mayor of DasmariÃ±as, Cavite addressed a letter to [EMRASON], stating in part, as follows:
"In reply to your letter of June 2, 1988, we wish to clarify that the Municipality of DasmariÃ±as, Cavite, has approved the development of
your property situated in Barrios Bukal and Langkaan, DasmariÃ±as, Cavite, with a total area of 3 72 hectares, more or less, into residential,
industrial, commercial and golf course project.
This conversion conforms with the approved Development Plan of the Municipality of DasmariÃ±as Cavite ".
Then came the Aquino government's plan to convert the tenanted neighboring property of the National Development Company (NDC) into an
industrial estate to be managed through a joint venture scheme by NDC and the Marubeni Corporation. Part of the overall conversion package
called for providing the tenant-farmers, opting to remain at the NDC property, with three (3) hectares each. However, the size of the NDC
property turned out to be insufficient for both the demands of the proposed industrial project as well as the government's commitment to the
tenant-farmers. To address this commitment, the Department of Agrarian Reform (DAR) was thus tasked with acquiring additional lands from
the nearby areas. The DAR earmarked for this purpose the subject property of [EMRASON].
On August 29, 1990, then OAR Secretary Benjamin Leong sent out the first of four batches of notices of acquisition, each of which drew
protest from [EMRASON]. All told, these notices covered 303.38545 hectares of land situated at Barangay Langkaan, DasmariÃ±as, Cavite
owned by [EMRASON].
In the meantime, [EMRASON] filed with the Department of Agrarian Reform Adjudication Board (DARAB), Region IV, Pasig, Metro Manila,
separate petitions to nullify the first three sets of the above notices. Collectively docketed as DARAB Case No. IV-Ca-0084-92, these petitions
were subsequently referred to the Office of the Regional Director, Region IV, which had jurisdiction thereon. In his referral action, the
Provincial Agrarian Adjudicator directed the DAR Region IV, through its Operations Division, to conduct a hearing and/or investigation lo
determine whether or not the subject property is covered by the Comprehensive Agrarian Reform Program (CARP) and, if not, to cancel the
notices of acquisition.
Forthwith, the DAR regional office conducted an on-site inspection of the subject property.
In the course of the hearing, during which [EMRASON] offered Exhibits :'A" to "UU-2" as documentary evidence, [EMRASON] received another
set of notices of acquisition. As lo be expected, [EMRASON] again protested.
On August 28, 1992, the Legal Division of DAR, Region IV, through Hearing Officer Victor Baguilat, rendered a decision declaring as null and
void all the notices of acquisitions, observing that the property covered thereby is, pursuant to Department of Justice (DOJ) Opinion No. 44,
series of 1990, exempt from CARP. The dispositive portion of the decision reads, as follows;
''WHEREFORE, in the light of the foregoing x x x, considering that the notices of acquisition dated August 29, 1990 relative to the 39 hectares
partly covered by Transfer Certificate of Title No. T-19298; notices of acquisition all dated April 3, 1991 relative to the 131.41975 hectares
partly covered by Transfer Certificates of Title Nos. x x x; notices of acquisition all dated August 28, 1991 relative lo the 56.9201 hectares
covered by Transfer Certificates of Title Nos. x x x; and notices of acquisition all dated May 15, 1992 relative to the 76.0456 covered by
Transfer Certificates of Title Nos. xx, all located at Barangay Langkaan, DasmariÃ±as, Cavite and owned by petitioner EM RAMOS and SONS,
INC. are null and void on the ground that the subject properties are exempted from CARP coverage pursuant to DOJ Opinion No. 44, Series of
1990, therefore, the aforesaid notices of acquisition be cancelled and revoked. "
The DOJ Opinion adverted to, rendered by then Justice Secretary Franklin Drilon, clarified that lands already converted to non-agricultural
uses before June 15, 1988 were no longer covered by CARP.
On September 3, 1992, the Region IV DAR Regional Director motu propio elevated the case to the Office of the Agrarian Reform Secretary, it
being his view that Hearing Officer Baguilat's decision ran contrary to the department's official position "to pursue the coverage of the same
properties and its eventual distribution to qualified beneficiaries particularly the Langkaan farmers in fulfillment of the commitment of the
government to deliver to them the balance of thirty-nine hectares x x x".
On January 6, 1993, the herein respondent DAR Secretary Ernesto Garilao [(DAR Secretary Garilao)] issued an order, the decretal portion
of which partly reads:
"WHEREFORE, in the interest of law and justice, an order is hereby rendered:
1. Affirming the Notices of Acquisition dated August 29, 1990, April 3, 1991, August 28, 1991 and May 15, 1992 covering 303.38545
hectares of the property owned by the E.M. RAMOS & SONS, INC, located at Barangay Langkaan, Dasmarinas, Cavite x x x;
xxxx
3. Directing the OAR field officials concerned to pursue (he coverage under RA 6657 of the properties of E.M. Ramos & Sons, Inc. for which
subject Notices of Acquisition had been issued.
SO ORDERED".
Its motion for reconsideration of the aforesaid order having been denied by the [DAR Secretary Garilao] in his subsequent order of January 6,
1993, [EMRASON] appealed to the Office of the President where the recourse was docketed as O.P. Case No. 5461.
On February 7, 1996, the Office of the President, through herein respondent Deputy Executive Secretary Renato C. Corona [(Deputy
Executive Secretary Corona)], rendered the herein assailed decision x x x, dismissing [EMRASON's] appeal on the strength of the following
observation:
"To recapitulate, this Office holds that [EMRASON's] property has remained AGRICULTURAL in classification and therefore falls within the
coverage of the CARP, on the basis of the following:br>
1. [EMRASON] failed to comply with the mandatory requirements and conditions of Municipal Ordinance Nos. 1 and 29-A, specifically,
among others, the need for approval of the National Planning Commission through the Highway District Engineer, and the
Bureau of Lands before final submission to the Municipal Council and Municipal Mayor;
2. [EMRASON] failed to comply with Administrative Order No. 152, dated December 16, 1968, and
3. The certification of the Human Settlements Regulatory Commission (HSRC) in 1981 and the Housing and Land Use Regulatory
Board (HLRB) in 1992 that the property of [EMRASON] is agricultural".
Undaunted, [EMRASON] interposed a motion for reconsideration, followed later by another motion whereunder it invited attention to legal
doctrines involving land conversion recently enunciated by no less than the Office of the President itself.
On May 14, 1996, the [Deputy Executive Secretary Corona] came out with his second challenged issuance denying [EMRASON's]
aforementioned motion for reconsideration x x x.[5]
From the denial of its Motion for Reconsideration by the OP, EMRASON filed a Petition for Review with the Court of Appeals, which was
docketed as CA-G.R. SP No. 40950.
On July 3, 1996, the Court of Appeals issued a Temporary Restraining Order (TRO), [6] which enjoined then DAR Secretary Ernesto Garilao and
Deputy Executive Secretary Renato C. Corona from implementing the OP Decision of February 7, 1996 and Resolution of May 14, 1996 until
further orders from the court. On September 17, 1996, the appellate court issued a Resolution[8] granting the prayer of EMRASON for the
issuance of a writ of preliminary injunction. The writ of preliminary injunction[9] was actually issued on September 30, 1996 after EMRASON
posted the required bond of P500,000,00.
The DAR Secretary filed a Motion for Reconsideration of the Resolution dated September 17, 1996 of the Court of Appeals, with the prayer
that the writ of preliminary injunction already issued be lifted, recalled and/or dissolved.
At this juncture, the DAR had already prepared Certificates of Land Ownership Award (CLOAs) to distribute the subject property to farmer-
beneficiaries. However, the writ of preliminary injunction issued by the Court of Appeals enjoined the release of the CLOAs. Buklod, on behalf
of the alleged 300 farmer-beneficiaries of the subject property, filed a Manifestation and Omnibus Motion, wherein it moved that it be allowed
to intervene as an indispensable party in CA-G.R. SP No. 40950; that the writ of preliminary injunction be immediately dissolved, having been
issued in violation of Section 55 of the CARL; and that the Petition for Review of EMRASON be dismissed since the appropriate remedy should
have been a petition for certiorari before the Supreme Court.
On March 26, 1997, the Court of Appeals promulgated its assailed Decision.
The Court of Appeals allowed the intervention of Buklod because -the latter's participation was "not being in any way prejudicial to the
interest of the original parties, nor will such intervention change the factual legal complexion of the case." The appellate court, however,
affirmed the propriety of the remedy availed by EMRASON given that under Section 5 of Supreme Court Revised Administrative Circular No.
1-95 dated May 16, 1995, appeals from judgments or final orders of the OP or the DAR under the CARL shall be taken to the Court of
Appeals, through a verified petition for review; and that under Section 3 of the same Administrative Circular, such a petition for review may
raise questions of facts, law, or mixed questions of facts and law.
Ultimately, the Court of Appeals ruled in favor of EMRASON because the subject property was already converted/classified as residential by
the Municipality of DasmariÃ±as prior to the effectivity of the CARL. The appellate court reasoned:
For one, whether or not the Municipality of DasmariÃ±as, Cavite had in place in the early seventies a general subdivision plan is to us of no
moment. The absence of such general plan at that time cannot be taken, for the nonce, against the [herein respondent EMRASON]. To our
mind, the more weighty consideration is the accomplished fact that the municipality, conformably with its statutory-conferred local autonomy,
had passed a subdivision measure, I.e., Ordinance No. 1, and had approved in line thereto, through the medium of Ordinance No. 29-A,
[EMRASON's] application for subdivision, or with like effect approved the conversion/classification of the lands in dispute as residential.
Significantly, the Municipal Mayor of DasmariÃ±as, Cavite, in his letter of September 23, 1988 to [EMRASON], clarified that such conversion
conforms with the approved development plan of the municipality.
For another, the requirement prescribed by the cited Section 16[a] of Ordinance No. 1 relates to the approval in the first instance by the
National Planning Commission of the final plat of the scheme of the subdivision, not the conversion from agricultural to residential itself. As
[EMRASON] aptly puts it:
"x x x the final plat or final plan, map or chart of the subdivision is not a condition sine qua non for the conversion x x x as the conversion
was already done by the Municipal Council of DasmariÃ±as, Cavite. Municipal Ordinance NO. 29-A merely required that the final plat, or final
plan x x x of the subdivision be done in conformity with Municipal Ordinance No. 1, the same to be followed by (he subdivision itself.
[EMRASON] therefore did not have to undertake the immediate actual development of the subject parcel of lands as the same had already
been converted and declared residential by law. x x x " (Petition, pp. 17 and 18).
[EMRASON's] pose has the merit of logic. As may be noted, Ordinance No. 29-A contained two (2) resolutory portions, each interrelated to,
but nonetheless independent of, the other. The first resolution, reading -
"Resolved, as it is hereby resolved, to approve the application for subdivision containing an area of Three Hundred Seventy-Two (372)
Hectares situated in Barrios Bocal and Langkaan, named as Travellers Life Homes "
approved the application for subdivision or the conversion of the 372-hectare area into residential, while the second, reading -
"Resolved that the Municipal Ordinance regarding subdivision regulations existing in this municipality shall be strictly followed by the
subdivision "
provides that the subdivision owner/developer shall follow subdivision regulations, it will be noted further that the second resolution already
referred to the [EMRASON's] property as "'subdivision", suggesting that the Municipal Council already considered as of that moment
[EMRASON's] area to be for residential use.
Another requirement which [EMRASON] allegedly failed to comply with is found in Administrative Order (A.O.) No. 152, series of 1968, which
pertinently provides -
"1. All Municipal Boards or City Councils, and all Municipal Councils in cities and municipalities in which a subdivision ordinance is in force,
shall submit three copies of every proposed subdivision plan for which approval is sought together with the subdivision ordinance, to the
National Planning Commission for comment and recommendation ".
This Court is at a loss to understand how [EMRASON] could be expected to heed a directive addressed to local government legislative bodies.
From a perusal of the title of A.O. No. 152, it is at once obvious from whom it exacts compliance with its command, thus: "REQUIRING THE
MUNICIPAL BOARDS OR CITY COUNCILS AND MUNICIPAL COUNCILS TO SUBMIT PROPOSED ORDINANCES AND SUBDIVISION PLANS TO THE
NATIONAL PLANNING COMMISSION FOR COMMENT AND RECOMMENDATION, BEFORE TAKING ACTION ON THE SAME, AND TO FORWARD A
COPY OF THEIR APPROVED SUBDIVISION ORDINANCES TO THE SAID COMMISSION".
To be sure, [EMRASON] cannot be made to bear the consequences for the non-compliance, if this be the case, by the Municipal Council of
Dasmarinas, Cavite with what A.O. 152 required. A converse proposition would be antithetical to the sporting idea of fair play.[11]
As for the other requirements which EMRASON purportedly failed to comply with, the Court of Appeals held that these became obligatory only
after the subject property was already converted to non-agricultural, to wit:
Foregoing considered, this Court holds that everything needed to validly effect the conversion of the disputed area to residential had been
accomplished. The only conceivable step yet to be taken relates to the obtention of a conversion order from the DAR, or its predecessor, the
Ministry of Agrarian Reform (MAR.) under its rather intricate procedure established under Memorandum Circular No. 11-79. But then, this
omission can hardly prejudice the [herein respondent EMRASON] for the DAR7MAR guidelines were promulgated only in 1979, at which time
the conversion of [EMRASON's] property was already a fait accompli.
Like the conversion procedure set up under Memorandum Circular No. 11-79, the revised methodology under the CARL cannot also be made
to apply retroactively to lands duly converted/classified as residential under the aegis of the Local Autonomy Act. For, as a rule, a statute is
not intended to affect transactions which occurred before it becomes operational (Tolentino, COMMENTARIES AND JURISPRUDENCE ON
THE CIVIL CODE, Vol. I, 1983 ed.; p. 23). And as the landmark case of Natalia Realty, Inc. vs. Department of Agrarian Reform, 225
SCRA 278, teaches:
"Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands previously converted to non-
agricultural uses prior to the effectively of CARL by government agencies other than respondent DAR x x x.
xxxx
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is hound by such conversion. It was therefore error to
include the underdeveloped portions x x x within the coverage of CARL".
It may be so, as the assailed decision stated, that in Natalia the lands therein involved received a locational clearance from the Housing and
Land Use Regulatory Board (HLRB, formerly the Human Settlement Regulatory Commission [HSRC], as residential or commercial, a factor
[EMRASON] cannot assert in its favor. This dissimilarity, however, hardly provides a compelling justification not to apply the lessons
of Natalia. This is because the property involved in this case, unlike that in Natalia, underwent classification/conversion before the creation
on May 13, 1976 of the HSRC, then known as the Human Settlements Regulatory Commission (P.D. No. 933). Furthermore, what is
recognized as the HSRC's authority to classify and to approve subdivisions and comprehensive land use development plans of local
governments devolved on that agency only upon its reorganization on February 7, 1981, with the issuance of Executive Order No. 648 known
as the Charter of the Human Settlements Regulatory Commission. Section 5 of the same executive order invested the HSRC with the
above classifying and approving authority. In fine, the property of [EMRASON] went into the process of conversion at the time when the
intervention thereon of the HSRC, which was even then non-existent, was unnecessary. Shortly before the creation of the HSRC, it would
appear that to provincial, city, or municipal councils/boards, as the case may be, belong the prerogative, albeit perhaps not exclusive, to
classify private lands within their respective territorial jurisdiction and approve their conversion from agricultural to residential or other non-
agricultural uses. To paraphrase the holding in Patalinghug vs. Court of Appeals, 229 SCRA 554, once a local government has, pursuant to
its police power, reclassified an area as residential, that determination ought to prevail and must be respected.[12]
The Court of Appeals further observed that the subject property has never been devoted to any agricultural activity and is, in fact, more
suitable for non-agricultural purposes, thus:
It is worthy to note that the CARL defines "agricultural lands" as "lands devqtedto agricultural activity x x x and not classified as mineral,
forest, residential, commercial or industrial lands" (Sec. 3[c]). Guided by this definition, it is clear that [herein respondent EMRASON's] area
does not fall under the category of agricultural lands. For, let alone the reality that the property is not devoted to some agricultural activity,
being in fact unirrigated, and, as implied in the decision of the DAR Hearing Officer Victor Baguilat, without duly instituted tenants, the same
had been effectively classified as residential. The bare circumstance of its not being actually developed as subdivision or that it is
underdeveloped would not alter the conclusion. For, according to Natalia, what actually determines the applicability of the CARL to a given
piece of land is its previous classification and not its current use or stages of development as non-agricultural property.
As a pragmatic consideration, the disputed area, in terms of its location in relation to existing commercial/industrial sites and its major
economic use, is more suitable for purposes other than agriculture. In this connection, this Court notes that the property is situated at the
heart of the CALABARZON, and, as Annex "C" of the petition demonstrates, lies adjacent to huge industrial/commercial complexes. The San
Miguel-Monterey meat plant, the NDC-Marubeni complex and the Reynolds Aluminum plant may be mentioned. For sure, the Sangguniang
Panlalawigan of Cavite, obviously cognizant of the economic potential of certain areas in the Municipality of DasmariÃ±as has, by Resolution
No. 105, series of 1988. declared defined tracts of lands in the Municipality of DasmariÃ±as as "industrial-residential-institutional mix."[13]
As a last point, the Court of Appeals justified its issuance of a writ of preliminary injunction enjoining the implementation of the OP Decision
dated February 7, 1996 and Resolution dated May 14, 1996, viz:
As a final consideration, we will address the [herein petitioners] OAR Secretary's and Buklod's joint concern regarding the propriety of the
preliminary injunction issued in this case. They alleged that the issuance is violative of Section 55 of the CARL which reads:
"SEC. 55. No Restraining Order or Preliminary
Injunction. - No Court in the Philippines shall have jurisdiction to issue any restraining order or writ of preliminary injunction against the PARC
or any of its duly authorized or designated agencies in any case, dispute, controversy arising from, necessary to, or in connection with the
application, implementation, enforcement, or interpretation of this Act and other pertinent laws on agrarian reform". (Underscoring added.)
As will be noted, the aforequoted section specifically mentions the Presidential Agrarian Reform Council (PARC) of which the DAR Secretary is
the Vice Chairman, or any of its duly designated agencies as protected from an injunctive action of any court. These agencies include the
PARC Executive Committee, the PARC Secretariat, which the DAR Secretary heads, and. on the local level, the different Agrarian Reform
Action Committees (Sees. 41 to 45, R.A. No. 6657).
From the records, there is no indication that the [petitioner] Agrarian Reform Secretaryacted vis-a-vis the present controversy for, or as
an agency of, the PARC. Hence, he cannot rightfully invoke Section 55 of the CARL and avail himself of the protective mantle afforded by that
provision. The PARC, it bears to stress, is a policy-formulating and coordinating body (Sec. 18. E.O. 229, July 22, 1987) without express
adjudicatory mandate, unlike the DAR Secretary who, as department head, is "vested with primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have exclusive jurisdiction over all matters involving the implementation of agrarian reform" (Sec. 50. R.A.
6657). Thus, it is easy lo accept the proposition that the [petitioner] Agrarian Reform Secretary issued his challenged orders in the
exercise of his quasi-judicial power as department head.[14]
In the end, the Court of Appeals decreed:
WHEREFORE, the instant petition for review is hereby GRANTED. Accordingly, the challenged decision dated February 7, 1996 and the
resolution of May 14, 1996 of the Office of the President in O.P. Case No. 5461 are hereby NULLIFIED, VACATED and SET ASIDE, and the
notices of acquisition issued by the Department of Agrarian Reform covering the 372-hectare property of the [herein respondent EMRASON]
at Barangay Langkaan, DasmariÃ±as, Cavite declared VOID.
The writ of preliminary injunction issued by this Court on September 30, 1996 is hereby made permanent. [15]
Buklod and DAR. filed their respective Motions for Reconsideration of the foregoing Decision but both Motions were denied by the Court of
Appeals in a Resolution dated November 24, 1997.
Aggrieved, Buklod and DAR filed the instant Petitions, which were consolidated by this Court in a Resolution [16] dated August 19, 1998.
In G.R. No. 131481, Buklod raises the following arguments:
1] THE MUNICIPAL ORDINANCE INVOKED BY [EMRASON] AS CONVERSION OF THE PROPERTY IN QUESTION ENACTED ON JULY 9, 1972 BY
THE MUNICIPAL COUNCIL OF DASMARIÃ‘AS, CAVITE IS IMPOTENT BECAUSE THE MUNICIPAL ORDINANCE IMPOSED CONDITIONS WHICH
[EMRASON] NEVER COMPLIED. NO COMPLIANCE NO CONVERSION.
2] AT THE TIME THE ALLEGED ORDINANCE WAS ENACTED, A LAND REFORM LAW WAS ALREADY IN EFFECT GRANTING SECURITY OF TENURE
TO THE FARMERS SO THAT A LANDOWNER CANNOT ARBITRARILY CONVERT AN AGRICULTURAL LAND INTO A DIFFERENT CLASSIFICATION
WITHOUT COMPLYING WITH LEGAL REQUIREMENTS (R.A. 3844).
3] A MERE MUNICIPAL ORDINANCE CANNOT NEGATE LAND REFORM RIGHTS GRANTED TO THE FARMERS BY LEGISLATIVE ENACTMENT
UNDER R.A. 3844 AND SUBSEQUENT LAWS. LAND REFORM LAW BEING A SOCIAL LEGISLATION IS PARAMOUNT.
4] LAND REFORM IS A CONSTITUTIONAL MANDATE FOR THE BENEFIT OF THE LANDLESS FARMERS SO THAT THE LAND REFORM LAW
SHOULD BE CONSTRUED AND APPLIED IN ORDER TO ATTAIN THE LEGISLATIVE INTENT OF RELIEVING THE FARMERS FROM THEIR POVERTY
AND BONDAGE. THE COURT OF APPEALS IGNORED THIS CONSTITUTIONAL MANDATE TO FAVOR THE LANDLORD [EMRASON].
5] THE COURT OF APPEALS ISSUED A RESTRAINING ORDER/INJUNCTION AGAINST THE CLEAR PROHIBITION IN THE CARL (SEC. 55 RA
6657) AND SO FAR DEPARTED FROM THE USUAL COURSE OF BY REFUSING TO GRANT THE PETITIONER FARMERS A HEARING INSPITE OF
THE PROCEDURE PRESCRIBED BY RA 7902 (SEC. ]).[17]
In G.R. No. 131624, the DAR ascribes the following errors on the part of the Court of Appeals:
I.
THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE MUNICIPALITY OF DASMARIÃ‘AS, CAVITE, WAS AUTHORIZED,
UNDER THE LOCAL AUTONOMY ACT, TO CLASSIFY AND/OR RECLASSIFY LANDS CONSIDERING THAT WHAT WAS CONFERRED THEREUNDER
WAS ONLY ZONING AUTHORITY, THUS, RENDER THE EXERCISE THEREOF BY THE MUNICIPAL COUNCIL OF DASMARIÃ‘AS, CAVITE, ULTRA
VIRES;
II.
EVEN ASSUMING, IN GRATIA ARGUMENTI, THAT THE AUTHORITY TO CLASSIFY AND RECLASSIFY LANDS IS POSSESSED BY MUNICIPAL
CORPORATIONS, STILL THE HONORABLE COURT OF APPEALS ERRED WHEN IT CONSIDERED THE ALLEGED PASSAGE OF ORDINANCE NO. 29-
A OF THE MUNICIPAL COUNCIL OF DASMARIÃ‘AS, CAVITE, AS A VALID MEASURE RECLASSIFYING SUBJECT AGRICULTURAL LAND TO NON-
AGRICULTURAL USE CONSIDERING THAT THE SAID APPROVAL OF THE SUBDIVISION, PER LETTER OF THE MUNICIPAL MAYOR, FAILED TO
COMPLY WITH EXISTING RULES AND REGULATIONS ON THE MATTER AND, THEREFORE, NONCOMPLYING AND INEFFECTUAL; AND
III.
THE HONORABLE COURT OF APPEALS ERRED WHEN IT APPLIED THE RULING OF THE HONORABLE COURT IN THE NATALIA REALTY CASE DUE
TO SUBSTANTIAL DISSIMILARITY IN FACTUAL SETTING AND MILIEU.[18]
At the crux of the present controversy is the question of whether the subject property could be placed under the CARP.
DAR asserts that the subject property could be compulsorily acquired by the State from EMRASON and distributed to qualified farmer-
beneficiaries under the CARP since it was still agricultural land when the CARL became effective on June 15, 1988. Ordinance Nos. 1 and 29-
A, approved by the Municipality of DasmariÃ±as on July 13, 1971 and July 9, 1972, respectively, did not reclassify the subject property from
agricultural to non-agricultural. The power to reclassify lands is an inherent power of the National Legislature under Section 9 of
Commonwealth Act No. 141, otherwise known as the Public Land Act, as amended, which, absent a specific delegation, could not be exercised
by any local government unit (LGU). The Local Autonomy Act of 1959 - in effect when the Municipality of DasmariÃ±as approved Ordinance
Nos. 1 and 29-A - merely delegated to cities and municipalities zoning authority, to be understood as the regulation of the uses of property in
accordance with the existing character of the land and structures. It was only Section 20 of Republic Act No. 7160, otherwise known as the
Local Government Code of 1991, which extended to cities and municipalities limited authority to reclassity agricultural lands.
DAR also argues that even conceding that cities and municipalities were already authorized in 1972 to issue an ordinance reclassifying lands
from agricultural to non-agricultural, Ordinance No. 29-A of the Municipality of DasmariÃ±as was not valid since it failed to comply with
Section 3 of the Local Autonomy Act of 1959, Section 16(a) of Ordinance No. 1 of the Municipality of Dasmarinas, and Administrative Order
No. 152 dated December 16, 1968, which all required review and approval of such an ordinance by the National Planning Commission (NPC).
Subsequent developments further necessitated review and approval of Ordinance No. 29-A by the Human Settlements Regulatory
Commission (HSRC), which later became the Housing and Land Use Regulatory Board (HLURB).
DAR further avers that the reliance by the Court of Appeals -on Natalia Realty, Inc. v. Department of Agrarian Reform [19] (Natalia Realty
case) is misplaced because the lands involved therein were converted from agricultural to residential use by Presidential Proclamation No.
1637, issued pursuant to the authority delegated to the President under Section 71, et seq., of the Public Land Act.[20]
Buklod adopts the foregoing arguments of DAR. In addition, it submits that prior to Ordinance Nos. 1 and 29-A, there were already laws
implementing agrarian reform, particularly: (1) Republic Act No. 3844, otherwise known as the Agricultural Land Reform Code, in effect since
August 8, 1963, and subsequently amended by Republic Act No. 6389 on September 1.0, 1971, after which it became known as the Code of
Agrarian Reforms; and (2) Presidential Decree No. 27, otherwise known as the Tenants Emancipation Decree, which took effect on November
19, 1972. Agricultural land could not be converted for the purpose of evading land reform for there were already laws granting farmer-tenants
security of tenure, protection from ejectment without just cause, and vested rights to the land they work on.
Buklod contends that EMRASON failed to comply with Section 36 of the Code of Agrarian Reforms, which provided that the conversion of land
should be implemented within one year, otherwise, the conversion is deemed in bad faith. Given the failure of EMRASON to comply with many
other requirements for a valid conversion, the subject property has remained agricultural. Simply put, no compliance means no conversion.
In fact, Buklod points out, the subject property is still declared as "agricultural" for real estate tax purposes. Consequently, EMRASON is now
estopped from insisting that the subject property is actually "residential."
Furthermore, Buklod posits that land reform is a constitutional mandate which should be given paramount consideration. Pursuant to said
constitutional mandate, the Legislature enacted the CARL. It is a basic legal principle that a legislative statute prevails over a mere municipal
ordinance.
Finally, Buklod questions the issuance by the Court of Appeals of a writ of preliminary injunction enjoining the distribution of the subject
property to the farmer-beneficiaries in violation of Section 55 of the CARL; as well as the refusal of the appellate court to hold a hearing
despite Section 1 of Republic Act No. 7902,[21] prescribing the procedure for reception of evidence before the Court of Appeals. At such a
hearing, Buklod intended to present evidence that the subject property is actually agricultural and that Buklod members have been working
on said property for decades, qualifying them as farmer-beneficiaries.
EMRASON, on the other hand, echoes the ruling of the Court of Appeals that the subject property is exempt from CARP because it had already
been reclassified as residential with the approval of Ordinance No. 29-A by the Municipality of DasmariÃ±as on July 9, 1972. EMRASON
cites Ortigas & Co., Ltd. Partnership v. Feati Bank and Trust Co.[22] (Ortigas case) where this Court ruled that a municipal council is
empowered to adopt zoning and subdivision ordinances or regulations under Section 3 of the Local Autonomy Act of 1959.
Still relying on the Ortigas case, EMRASON avows that the Municipality of DasmariÃ±as, taking into account the conditions prevailing in the
area, could validly zone and reclassify the subject property in the exercise of its police power in order to safeguard the health, safety, peace,
good order, and general welfare of the people in the locality. EMRASON describes the whole area surrounding the subject property as
residential subdivisions (i.e., Don Gregorio, Metro Gate, Vine Village, and Cityland Greenbreeze 1 and 2 Subdivisions) and industrial estates
(i.e., Reynolds Aluminum Philippines, Inc. factory; NDC-Marubeni industrial complex, San Miguel Corporation-Monterey cattle and piggery
farm and slaughterhouse), traversed by national highways (i.e., Emilio Aguinaldo National Highway, Trece Martirez, Puerto Azul Road, and
Governor's Drive). EMRASON mentions that on March 25, 1988, the Sangguniang Panlalawiganof the Province of Cavite passed Resolution No.
105 which declared the area where subject property is located as "industrial-residential-institutional mix."
EMRASON further maintains that Ordinance No. 29-A of the Municipality of DasmariÃ±as is valid. Ordinance No. 29-A is complete in itself, and
there is no more need to comply with the alleged requisites which DAR and Buklod are insisting upon. EMRASON quotes from Patalinghug v.
Court of Appeals[23](Patalinghug case) that "once a local government has reclassified an area as commercial, that determination for zoning
purposes must prevail."
EMRASON points out that Ordinance No. 29-A, reclassifying the subject property, was approved by the Municipality of DasmariÃ±as on July 9,
1972. Executive Order No. 648, otherwise known as the Charter of the Human Settlements Regulatory Commission (HSRC Charter) - which
conferred upon the HSRC the power and duty to review, evaluate, and approve or disapprove comprehensive land use and development plans
and zoning ordinances of LGUs - was issued only on February 7, 1981. The exercise by HSRC of such power could not be applied retroactively
to this case without impairing vested rights of EMRASON. EMRASON disputes as well the absolute necessity of submitting Ordinance No. 29-A
to the NPC for approval. Based on the language of Section 3 of the Local Autonomy Act of 1959, which used the word "may," review by the
NPC of the local planning and zoning ordinances was merely permissive. EMRASON additionally posits that Ordinance No. 1 of the Municipality
of DasmariÃ±as simply required approval by the NPC of the final plat or plan, map, or chart of the subdivision, and not of the rcclassification
and/or conversion by the Municipality of the subject property from agricultural to residential. As for Administrative Order No. 152 dated
December 16, 1968, it was directed to and should have been complied with by the city and municipal boards and councils. Thus, EMRASON
should not be made to suffer for the non-compliance by the Municipal Council of Dasmarinas with said administrative order.
EMRASON likewise reasons that since the subject property was already reclassified as residential with the mere approval of Ordinance No. 29-
A by the Municipality of Dasmarinas, then EMRASON did not have to immediately undertake actual development of the subject property.
Reclassification and/or conversion of a parcel of land are different from the implementation of the conversion.
EMRASOK is resolute in its stance that the Court of Appeals correctly applied the Natalia Realty case to the present case since both have
similar facts; the only difference being that the former involves a presidential fiat while the latter concerns a legislative fiat.
EMRASON denies that the Buklod members are farmer-tenants of the subject property. The subject property has no farmer-tenants because,
as the Court of Appeals observed, the property is unirrigated and not devoted to any agricultural activity. The subject property was placed
under the CARP only to accommodate the farmer-tenants of the NDC property who were displaced by the NDC-Marubeni Industrial Project.
Moreover, the Buklod members are still undergoing a screening process before the DAR-Region IV, and are yet to be declared as qualified
farmer-beneficiaries of the subject property. Hence, Buklod members tailed to establish they already have vested right over the subject
property.
EMRASON urges the Court not to consider issues belatedly raised by Buklod, It may be recalled that Buklod intervened in CA-G.R. SP No.
40950 just before the Court of Appeals rendered judgment in said case. When the appellate court promulgated its Decision on March 26, 1997
favoring EMRASON, Buklod filed a Motion for Reconsideration of said judgment, to which EMRASON, in turn, filed a Comment and Opposition.
In its Reply to the aforementioned Comment and Opposition of EMRASON, Buklod raised new factual matters, specifically, that: (1) EMRASON
has not even subdivided the title to the subject property 27 years after its purported reclassification/conversion; (2) EMRASON never
obtained a development permit nor mayor's permit to operate a business in Dasmarinas; and (3) the farmer-tenants represented by Buklod
have continuously cultivated the subject property. There was no cogent or valid reason for the Court oi' Appeals to allow Buklod to present
evidence to substantiate the foregoing allegations. The DAR Region IV Hearing Officer already conducted extensive hearings during which the
farmers were duly represented. Likewise, Buklod raises for the first time in its Petition before this Court the argument that the Tenants
Emancipation Decree prescribes a procedure for conversion which EMRASON failed to comply with.
Lastly, EMRASON defends the issuance by the Court of Appeals of a writ of preliminary injunction in CA-G.R. SP No. 40950. Section 55 of the
CARL is inapplicable to the case at bar because said provision only prohibits the issuance by a court of a TRO or writ of preliminary injunction
"against the PARC or any ol^ its duly authorized or designated agencies." As the Court of Appeals declared, the PARC is a policy-formulating
and coordinating body. There is no indication whatsoever that the DAR Secretary was acting herein as an agent of the PARC. The DAR
Secretary issued the orders of acquisition for the subject property in the exercise of his quasi-judicial powers as department head.
The Court, after consideration of the issues and arguments in the Petitions at bar, affirms the Court of Appeals and rules in favor of
EMRASON.
CARP coverage limited to agricultural land
Section 4, Chapter II of the CARL, as amended,24 particularly defines the coverage of the CARP, to wit:
SEC. 4. Scope. - The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of tenurial arrangement and commodity
produced, all public and private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other
lands of the public domain suitable for agriculture: Provided, That landholdings of landowners with a total area of five (5) hectares and below
shall not be covered for acquisition and distribution to qualified beneficiaries.
More specifically, the following lands are covered by the CARP:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands
to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account ecological, developmental and
equity considerations, shall have determined by law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised
thereon.
A comprehensive inventory system in consonance with the national land use plan shall be instituted by the Department of Agrarian Reform
(DAR), in accordance with the Local Government Code, for the purpose of properly identifying and classifying farmlands within one (1) year
from effectivity of this /Vet. without prejudice to the implementation of the land acquisition and distribution." (Emphases supplied.)
Section 3(c), Chapter I of the CARL further narrows down the definition of agricultural land that is subject to CARP to "land devoted to
agricultural activity as defined in this Act and not classified as mineral, forest, residential, commercial or industrial land."
The CARL took effect on June 15, 1988. To be exempt from the CARP, the subject property should have already been reclassified as
residential prior to said date.
The Local Autonomy Act of 1959
The Local Autonomy Act of 1959, precursor of the Local Government Code of 1991, provided;
SEC. 3. Additional powers of provincial boards, municipal boards or city councils and municipal and regularly organized municipal district
councils. - x x x
xxxx
Power to adopt zoning and planning ordinances. â€” Any provision of law to the contrary notwithstanding, Municipal Boards or City Councils in
cities, and Municipal Councils in municipalities are hereby authorized to adopt zoning and subdivision ordinances or regulations for their
respective cities and municipalities subject to the approval of the City Mayor or Municipal Mayor, as the case may be. Cities and
municipalities may, however, consult the National Planning Commission on matters pertaining to planning and zoning. (Emphases
supplied.)
Pursuant to the foregoing provision, the Municipal Council of DasmariÃ±as approved Ordinance No. 1 on July 13, 1971, which laid down
the general subdivision regulations for the municipality; and Resolution No. 29-A on July 9, 1972, which approved the application for
subdivision of the subject property.
The Court observes that the OP, the Court of Appeals, and even the parties themselves referred to Resolution No. 29-A as an ordinance.
Although it may not be its official designation, calling Resolution No. 29-A as Ordinance No. 29-A is not completely inaccurate. In the Ortigas
& Co. case, the Court found it immaterial that the then Municipal Council of Mandaluyong declared certain lots as part of the commercial and
industrial zone through a resolution, rather than an ordinance, because:
Section 3 of R.A. No. 2264, otherwise known as the Local Autonomy Act, empowers a Municipal Council "to adopt zoning and subdivision
ordinances or regulations" for the municipality. Clearly, the law docs not restrict the exercise of the power through an ordinance.
Therefore, granting that Resolution No. 27 is not an ordinance, it certainly is a regulatory measure within the intendment or ambit of
the word "regulation" under the provision. As a matter oi' fact the same section declares that the power exists "(A)ny provision of law to
the contrary notwithstanding x x x."[25] (Emphases supplied.)
Zoning and reclassification
Section 3(c), Chapter I of the CARL provides that a parcel oi^ land reclassified for non-agricultural uses prior to June 15, 1988 shall no
longer be considered agricultural land subject to CARP. The Court is now faced with the question of whether Resolution No. 29-A of the
Municipality of DasmariÃ±as dated July 9, 1972, which approved the subdivision of the subject property for residential purposes, had also
reclassified the same from agricultural to residential.
Zoning classification is an exercise by the local government of police power, not the power of eminent domain. A zoning ordinance is defined
as a local city or municipal legislation which logically arranges, prescribes, defines, and apportions a given political subdivision into specific
land uses as present and future projection of needs.[26]
The Court gave a more extensive explanation of zoning in Pampanga Bus Company, Inc. v. Municipality of Tarlac,[27] thus:
The appellant argues that Ordinance No. 1 is a zoning ordinance which the Municipal Council is authorized to adopt. McQuillin in his treaties
on Municipal Corporations (Volume 8, 3rd ed.) says:
Zoning is governmental regulation of the uses of land and buildings according to districts or zones. It is comprehensive where it is governed
by a single plan for the entire municipality and prevails throughout the municipality in accordance with that plan. It is partial or limited where
it is applicable only to a certain part of the municipality or to certain uses. Fire limits, height districts and building regulations are forms of
partial or limited zoning or use regulation that are antecedents of modern comprehensive zoning, (pp. 11-12.)
The term "zoning," ordinarily used with the connotation of comprehensive or general zoning, refers to governmental regulation of the uses of
land and buildings according to districts or zones. This regulation must and does utilize classification of uses within districts as well as
classification of districts, inasmuch as it manifestly is impossible to deal specifically with each of the innumerable uses made of land and
buildings. Accordingly, (zoning has been defined as the confining of certain classes of buildings and uses to certain localities, areas, districts
or zones.) It has been stated that zoning is the regulation by districts of building development and uses of property, and that the term
"zoning" is not only capable of this definition but has acquired a technical and artificial meaning in accordance therewith. (Zoning is the
separation of the municipality into districts and the regulation of buildings and structures within the districts so created, in accordance with
their construction, and nature and extent of their use. It is a dedication of districts delimited to particular uses designed to subserve the
general welfare.) Numerous other definitions of zoning more or less in accordance with these have been given in the cases, (pp. 27-28.)[28]
According to Section 1(b) of Ordinance No. 1, "[s]ubdivision means the division of a tract or parcel of land into two or more lots, sites or other
divisions for the purpose, whether immediate or future, o[f| a sale or building development. It includes resubdivision, and when appropriate
to the context, relates to the process of subdividing as to the land of territory subdivided." Subdivision ordinances or regulations such as
Resolution No. 29-A, in relation to Ordinance No. 1, constitute partial or limited zoning, for they are applicable to a specific property in the
city or municipality to be devoted for a certain use.
Section 9 of the Public Land Act - cited by the DAR and Buklod as the purported delegation by the National Legislature of the power to
reclassify - is immaterial to the instant cases. Said provision reads:
SEC. 9. For the purpose of their administration and disposition, the lands of the public domain alienable or open to disposition shall be
classified, according to the use or purposes to which such lands are destined, as follows:
(a) Agricultural;
(b) Residential, commercial, industrial, or for similar productive purposes;
(c) Educational, charitable, or other similar purposes; and
(d) Reservations for townsites and for public and quasi-public uses.
The President, upon recommendation by the Secretary of Agriculture and Natural Resources, shall from time to time make the classifications
provided for in this section, and may, at any time and in a similar manner, transfer lands from one class to another. (Emphasis supplied.)
The power delegated to the President under the aforequoted provision of the Public Land Act is limited to the classification of lands of the
public domain that are alienable or open to disposition. It finds no application in the present cases for the simple reason that the
subject property involved herein is no longer part of the public domain. The subject property is already privately owned and accordingly
covered by certificates of title.
The concept that concerns this Court in the instant cases is the reclassification of agricultural lands. In Alarcon v. Court of Appeals,[29] the
Court had the occasion to define and distinguish reclassification from conversion as follows:
Conversion is the act of changing the current use of a piece of agricultural land into some other use as approved by the Department of
Agrarian Reform. Reclassification, on the other hand, is the act of specifying how agricultural lands shall be utilized for non-agricultural uses
such as residential, industrial, commercial, as embodied in the land use plan, subject to the requirements and procedure for land use
conversion, x x x. (Italics supplied.)
Reclassification also includes the reversion of non-agricultural lands to agricultural use.[31]
Under the present Local Government Code, it is clear that the authority to reclassify agricultural lands primarily resides in the sanggunian of
the city or municipality. Said provision reads in full:
Sec. 20. Reclassification of Lands. - (a) A city or municipality may, through an ordinance passed by the sanggunian after conducting
public hearing for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their utilization or
disposition in the following cases: (X) when the land ceases to be economically feasible and sound for agricultural purposes as determined by
the Department of Agriculture or (2) where the land shall have substantially greater economic value for residential, commercial, or industrial
purposes, as determined by the sanggunian concerned: Provided, That such reclassification shall be limited to the following percentage of the
total agricultural land area at the time of the passage of the ordinance:
(1) For highly urbanized and independent component cities, fifteen percent (15%);
(2) For component cities and first to the third class municipalities, ten percent (10%); and
(3) For fourth to sixth class municipalities, five percent (5%): Provided, further, That agricultural lands distributed to agrarian reform
beneficiaries pursuant to Republic Act Numbered Sixty-six hundred fifty-seven (R.A. No. 6657), otherwise known as "The Comprehensive
Agrarian Reform Law", shall not be affected by the said reclassification and the conversion of such lands into other purposes shall be
governed by Section 65 of said Act.
(b) The President may, when public interest so requires and upon recommendation of the National Economic and Development Authority,
authorize a city or municipality to reclassify lands in excess of the limits set in the next preceding paragraph.
(c) The local government units shall, in conformity with existing laws, continue to prepare their respective comprehensive land use
plans enacted through zoning ordinances which shall be the primary and dominant bases for the future use of land resources: Provided,
That the requirements for food production, human settlements, and industrial expansion shall be taken into consideration in the preparation
of such plans.
(d) When approval by a national agency is required for reclassification, such approval shall not be unreasonably withheld. Failure to act on
a proper and complete application for reclassification within three (3) months from receipt of the same shall be deemed as approval thereof.
(e) Nothing in this Section shall be construed as repealing, amending, or modifying in any manner the provisions of R.A. No. 6657.
(Emphases supplied.)
Prior to the Local Government Code of 1991, the Local Autonomy Act of 1959 was silent on the authority to reclassify agricultural lands. What
the earlier statute expressly granted to city and municipal boards and councils, under Section 3 thereof, was the power to adopt zoning and
subdivision ordinances and regulations.
DAR and Buklod insist that zoning is merely the regulation of land use based on the existing characterof the property and the structures
thereon; and that zoning is a lesser power compared to reclassification so that the delegation of the former to the local government should
not be deemed to include the latter.
Such arguments are easily refuted by reference to the definitions of zoning and reclassification earlier presented herein, which support a more
extensive concept of zoning than that which DAR and BUKLOD assert.
By virtue of a zoning ordinance, the local legislature may arrange, prescribe, define, and apportion the land within its political jurisdiction into
specific uses based not only on the present, but also on the future projection of needs. To limit zoning to the existing character of the
property and the structures thereon would completely negate the power of the local legislature to plan land use in its city or municipality.
Under such circumstance, zoning would involve no planning at all, only the rubber-stamping by the local legislature of the current use of the
land.
Moreover, according to the definition of reclassification, the specified non-agricultural use of the land must be embodied in a land use plan,
and the land use plan is enacted through a zoning ordinance. Thus, zoning and planning ordinances take precedence over reclassification.
The reclassification of land use is dependent on the zoning and land use plan, not the other way around.
It may, therefore, be reasonably presumed that when city and municipal boards and councils approved an ordinance delineating an area or
district in their cities or municipalities as residential, commercial, or industrial zone, pursuant to the power granted to them under Section 3 of
the Local Autonomy Act of 1959, they were, at the same time, reclassifying any agricultural lands within the zone for non-agri cultural use;
hence, ensuring the implementation of and compliance with their zoning ordinances. The logic and practicality behind such a presumption is
more evident when considering the approval by local legislative bodies of subdivision ordinances and regulations. The approval by city and
municipal boards and councils of an application for subdivision through an ordinance should already be understood to include approval of the
reclassification of the land, covered by said application, from agricultural to the intended non-agricultural use. Otherwise, the approval of the
subdivision application would serve no practical effect; for as long as the property covered by the application remains classified as
agricultural, it could not be subdivided and developed for non-agricultural use.
A liberal interpretation of the zoning power of city and municipal boards and councils, as to include the power to accordingly reclassify the
lands within the zones, would be in accord with the avowed legislative intent behind the Local Autonomy Act of 1959, which was to increase
the autonomy of local governments. Section 12 of the Local Autonomy Act of 1959 itself laid down rules for interpretation of the said statute:
SEC. 12. Rules for the interpretation of the Local Autonomy Act. -
1. Implied power of a province, a city or municipality shall be liberally construed in its favor. Any fair and reasonable doubt as to the
existence of the power should be interpreted in favor of the local government and it shall be presumed to exist.
2. The general welfare clause shall be liberally interpreted in case of doubt so as to give more power to local governments in
promoting the economic condition, social welfare and material progress of the people in the community.
3. Vested rights existing at the time of the promulgation of this law arising out of a contract between a province, city or municipality on one
hand and a third party on the other, should be governed by the original terms and provisions of the same, and in no case would this act
infringe existing rights.
Moreover, the regulation by local legislatures of land use in their respective territorial jurisdiction through zoning and reclassification is an
exercise of police power. In Binay v. Domingo,32] the Court recognized that police power need not always be expressly delegated, it may also
be inferred:
The police power is a governmental function, an inherent attribute of sovereignty, which was born with civilized government. It is founded
largely on the maxims, "Sic utere tuo et alienum non laedas" and "Salus populi est suprema lex" Its fundamental purpose is securing the
general welfare, comfort and convenience of the people.
Police power is inherent in the state but not in municipal corporations (Balacuit v. CFI of Agusan del Norte, 163 SCRA 182). Before a
municipal corporation may exercise such power, there must be a valid delegation of such power by the legislature which is the repository of
the inherent powers of the State. A valid delegation of police power may arise from express delegation, or be inferred from the
mere fact of the creation of the municipal corporation; and as a general rule, municipal corporations may exercise police
powers within the fair intent and purpose of their creation which are reasonably proper to give effect to the powers expressly
granted, and statutes conferring powers on public corporations have been construed as empowering them to do the things
essential to the enjoyment of life and desirable for the safety of the people. (62 C.J.S., p. 277). The so-called inferred police powers
of such corporations are as much delegated powers as arc those conferred in express terms, the inference of their delegation growing out of
the fact of the creation of the municipal corporation and the additional fact that the corporation can only fully accomplish the objects of its
creation by exercising such powers. (Crawfordsville vs. Braden, 28 N.E. 849). Furthermore, municipal corporations, as governmental
agencies, must have such measures of the power as are necessary to enable them to perform their governmental functions. The
power is a continuing one, founded on public necessity. (62 C.J.S. p. 273) Thus, not only does the State effectuate its purposes through the
exercise of the police power but the municipality does also. (U.S. v. Salaveria, 39 Phil. 102).
Municipal governments exercise this power under the general welfare clause: pursuant thereto they are clothed with authority to "enact
such ordinances and issue such regulations as may be necessary to carry out and discharge the responsibilities conferred upon it by law, and
such as shall be necessary and proper to provide for the health, safety, comfort and convenience, maintain peace and order, improve public
morals, promote the prosperity and general welfare of the municipality and the inhabitants thereof, and insure the protection of property
therein." (Sections 91, 149, 177 and 208, BP 337). And under Section 7 of BP 337, "every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers necessary and proper for governance such as to promote health
and safety, enhance prosperity, improve morals, and maintain peace and order in the local government unit, and preserve the comfort and
convenience of the inhabitants therein."
Police power is the power to prescribe regulations to promote the health, morals, peace, education, good order or safety and general
welfare of the people. It is the most essential, insistent, and illimitable of powers. In a sense it is the greatest and most powerful attribute of
the government. It is elastic and must be responsive to various social conditions. (Sangalang, el al. vs. IAC, 176 SCRA 719). On it depends
the security of social order, the life and health of the citizen, the comfort of an existence in a thickly populated community, the enjoyment of
private and social life, and the beneficial use of property, and it has been said to be the very foundation on which our social system rests. (16
C.J.S., p. 896) However, it is not confined within narrow circumstances of precedents resting on past conditions; it must follow the legal
progress of a democratic way of life. (Sangalang, el al. vs. IAC, supra).
xxxx
In the case of Sangalang vs. IAC, supra, We ruled that police power is not capable of an exact definition but has been, purposely, veiled in
general terms to underscore its all-comprehensiveness. Its scope, over-expanding to meet the exigencies of the times, even to anticipate the
future where it could be done, provides enough room for an efficient and flexible response to conditions and circumstances thus assuring the
greatest benefits.
The police power of a municipal corporation is broad, and has been said to be commensurate with, but not to exceed, the duty to provide for
the real needs of the people in their health, safely, comfort, and convenience as consistently as may be with private rights. It extends to all
the great public needs, and, in a broad sense includes all legislation and almost every function of the municipal government. It covers a wide
scope of subjects, and, while it is especially occupied with whatever affects the peace, security, health, morals, and general welfare of the
community, it is not limited thereto, but is broadened to deal with conditions which exists so as to bring out of them the greatest welfare of
the people by promoting public convenience or general prosperity, and to everything worthwhile for the preservation of comfort of the
inhabitants of the corporation (62 C.J.S. Sec. 128). Thus, it is deemed inadvisable to attempt to frame any definition which shall absolutely
indicate the limits of police power.[33] (Emphases supplied.)
Based on the preceding discussion, it cannot be said that the power to reclassify agricultural land was first delegated to the city and municipal
legislative bodies under Section 26 of the Local Government Code of 1991. Said provision only articulates a power of local legislatures, which,
previously, had only been implied or inferred.
Compliance with other requirements or conditions
Resolution No. 29-A is a valid ordinance, which, upon its approval on July 9, 1972, immediately effected the zoning and reclassifying of the
subject property for residential use. It need not comply with any of the requirements or conditions which DAR and Buklod are insisting upon.
DAR and Buklod aver that Resolution No. 29-A was not reviewed and approved by the NPC, in violation of the line in Section 3 of the Local
Autonomy Act of 1959, stating that "[c]ities and municipalities may, however, consult the National Planning Commission on matters
pertaining to planning and zoning." Consideration must be given, however, to the use of the word "may" in the said sentence. Where the
provision reads "may," this word shows that it is not mandatory but discretionary. It is an auxiliary verb indicating liberty, opportunity,
permission and possibility.[34] The use of the word "may" in a statute denotes that it is directory in nature and generally permissive only. The
"plain meaning rule" or verba legis in statutory construction is thus applicable in this case. Where the words of a statute are clear, plain, and
free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. [35] Since consultation with the NPC was
merely discretionary, then there were only two mandatory requirements for a valid zoning or subdivision ordinance or regulation under
Section 3 of the Local Autonomy Act of 1959, namely, that (1) the ordinance or regulation be adopted by the city or municipal board or
council; and (2) it be approved by the city or municipal mayor, both of which were complied with byl Resolution No. 29-A.
Section 16(a) of Ordinance No. 1 of the Municipality of DasmariÃ±as likewise mentions the NPC, to wit:
a. Final plat of subdivision - As essential requirements before a subdivision is accepted for verification by the Bureau of Lands, the final plat of
the scheme of the subdivision must comply with the provision of this ordinance. Application for plat approval shall be submitted to the
Municipal Mayor and shall be forwarded to the National Planning Commission thru the Highway District Engineer for comment
and/or recommendations, before action is taken by the Municipal Council. The final approval of the plat shall be made by the
Municipal Mayor upon recommendation of the Municipal Council by means of a resolution. (Emphasis supplied.)
The aforementioned provision of Ordinance No. 1 refers to the final plat of the subdivision. The term plat includes "plat, plan, plot or
replot."[36] It must be distinguished from the application for subdivision.
The Court concurs with the analysis of the Court of Appeals that Resolution No. 29-A actually contains two resolutions. The first reads:
Resolved, As it is hereby Resolved to approve the application for subdivision containing an area of Three Hundred Seventy-Two Hectares
(372) situated in barrio Bocal and Langkaan, named as Travellers Life Homes. [37] (Efriphasis supplied.)
It is manifest, even from just a plain reading of said resolution, that the application for subdivision covering the subject property was
categorically and unconditionally approved by the Municipality of Dasmarinas. As a consequence of such approval, the subject property is
immediately deemed zoned and reclassified as residential.
Meanwhile, the second resolution in Resolution No. 29-A states:
Resolved, that this municipal ordinance regarding subdivision regulations existing in this municipality shall be strictly followed by
the subdivision.[38] (Emphases supplied.)
Significantly, this second resolution already refers to a "subdivision," supporting the immediately executory nature of the First resolution. The
municipal ordinance which the subdivision must follow is Ordinance No. 1, the general subdivision regulations of the Municipality of
Dasmarinas. Most provisions of Ordinance No. 1 laid down the minimum standards for the streets, roadways, sidewalks, intersections, lots
and blocks, and other improvements in the subdivision, with which the final plat must comply or conform. Irrefragably, the review of the final
plat of the subdivision calls for a certain level of technical expertise; hence, the directive to the Municipal Mayor to refer the final plat to the
NPC, through the Highway District Engineer, for comments and recommendation, before the same is approved by the Municipal Council, then
the Mayor.
In relation to the preceding paragraph, Administrative Order No. 152 dated December 16, 1968 required city and municipal boards and
councils to submit proposed subdivision ordinances and plans or forward approved subdivision ordinances to the NPC. The OP imposed such a
requirement because "it has come to the attention of [the] Office that the minimum standards of such ordinances regarding design, servicing
and streets, and open spaces for parks and other recreational purposes are not being complied with[.]" [39] Review by the NPC of the proposed
subdivision plan was for the purpose of determining "if it conforms with the subdivision ordinance." [40]
It is apparent that Section 16(a) of Ordinance No. 1 and Administrative Ordinance No. 152 contained the same directive: that the final plat of
the subdivision be reviewed by the NPC to determine its conformity with the minimum standards set in the subdivision ordinance of the
municipality. A closer scrutiny will reveal that Section 16(a) of Ordinance No. 1 and Administrative Order No. 152 related to the duties and
responsibilities of local government and NPC officials as regards the final plat of the subdivision. There is no evidence to establish that the
concerned public officers herein did not follow the review process for the final plat as provided in Section 16(a) of Ordinance No. 1 and
Administrative Order No. 152 before approving the same. Under Section 3(m), Rule 131 of the Rules of Court, there is a presumption that
official duty has been regularly performed. Thus, in the absence of evidence to the contrary, there is a presumption that public officers
performed their official duties regularly and legally and in compliance with applicable laws, in good faith, and in the exercise of sound
judgment.[41] And - just as the Court of Appeals observed - even if it is established that the accountable public officials failed to comply with
their duties and responsibilities under Section 16(a) of Ordinance No. 1 and Administrative Order No. 152, it would be contrary to the
fundamental precepts of fair play to make EMRASON bear the consequences of such non-compliance.
Although the two resolutions in Resolution No. 29-A may be related to the same subdivision, they are independent and separate. Non-
compliance with the second resolution may result in the delay or discontinuance of subdivision development, or even the imposition of the.
penalties[42] provided in Ordinance No. 1, but not the annulment or reversal of the first resolution and its consequences.
The Court again agrees with the Court of Appeals that Resolution No. 29-A need not be subjected to review and approval by the
HSRC/HLURB. Resolution No. 29-A was approved by the Municipality of Dasmarinas on July 9, 1972, at which time, there was even no
HSRC/HLURB to speak of.
The earliest predecessor of the HSRC, the Task Force on Human Settlements, was created through Executive Order No. 419 more than a year
later on September 19, 1973. And even then, the Task Force had no power to review and approve zoning and subdivision ordinances and
regulations.
It was only on August 9, 1978, with the issuance of Letter of Instructions No. 729, that local governments were required to submit their
existing land use plans, zoning ordinances, enforcement systems, and procedures to the Ministry of Human Settlements for review and
ratification.
The HSRC was eventually established on February 7, 1981. Section 5(b) of the HSRC Charter43 contained the explicit mandate for the
HSRC to:
b. Review, evaluate and approve or disapprove comprehensive land use development plans and zoning ordinances of local
government; and the zoning component of civil works and infrastructure projects of national, regional and local governments; subdivisions,
condominiums or estate development projects including industrial estates, of both the public and private sectors and urban renewal plans,
programs and projects: Provided, that the land use Development Plans and Zoning Ordinances of Local Governments herein subject to review,
evaluation and approval of the commission shall respect the classification of public lands for forest purposes as certified by the Ministry of
Natural Resources: Provided, further, that the classification of specific alienable and disposable lands by the Bureau of Lands shall be in
accordance with the relevant zoning ordinance of: Local government where it exists; and provided, finally, that in cities and municipalities
where there are as yet no zoning ordinances, the Bureau of Lands may dispose of specific alienable and disposable lands in accordance with
its own classification scheme subject to the condition that the classification of these lands may be subsequently change by the local
governments in accordance with their particular zoning ordinances which may be promulgated later. (Emphases supplied.)
Neither the Ministry of Human Settlements nor the HSRC, however, could have exercised its power of review retroactively absent an express
provision to that effect in Letter of Instructions No. 729 or the HSRC Charter, respectively. A sound cannon of statutory construction is that
a statute operates prospectively only and never retroactively, unless the legislative intent to the contrary is made manifest either by the
express terms oi' the statute or by necessary implication. Article 4 of the Civil Code provides that: "Laws shall have no retroactive effect,
unless the contrary is provided." Hence, in order that a law may have retroactive effect, it is necessary that an express provision to this effect
be made in the law, otherwise nothing should be understood which is not embodied in the law. Furthermore, it must be borne in mind that a
law is a rule established to guide our actions without no binding effect until it is enacted, wherefore, it has no application to past times but
only to future time, and that is why it is said that the law looks to the future only and has no retroactive effect unless the legislator may have
formally given that effect to some legal provisions.[44]
Subsequent zoning ordinances
Still by the authority vested upon it by Section 3 of the Local Autonomy Act, the Sangguniang Bayan of DasmariÃ±as subsequently enacted a
Comprehensive Zoning Ordinance, ratified by the HLURB under Board Resolution No. 42-A-3 dated February 11, 1981 (1981
Comprehensive Zoning Ordinance of Dasmarinas). Upon the request of the DAR, Engr. Alfredo Gil M. Tan, HLURB Regional Technical
Coordinator, issued a certification[45] dated September 10, 1992 stating that per the 1981 Comprehensive Zoning Ordinance of Dasmarinas,
the subject property was within the agricultural zone. Does this mean that the subject property reverted from residential to agricultural
classification?
The Court answers in the negative. While the subject property may be physically located within an agricultural zone under the 1981
Comprehensive Zoning Ordinance of Dasmarinas, said property retained its residential classification.
According to Section 17, the Repealing Clause, of the 1981 Comprehensive Zoning Ordinance of Dasmarinas: "AH other ordinances, rules or
regulations in conflict with the provision of this Ordinance are hereby repealed: Provided, that rights that have vested before the
cffectivity of this Ordinance shall not be impaired."
In Ayog v. Cusi, Jr.,[46] the Court expounded on vested right and its protection:
That vested right has to be respected. It could not be abrogated by the new Constitution. Section 2, Article XIII of the 1935 Constitution
allows private corporations to purchase public agricultural lands not exceeding one thousand and twenty-four hectares. Petitioners' prohibition
action is barred by the doctrine of vested rights in constitutional law.
"All right is vested when the right to enjoyment has become the property of some particular person or persons as a present interest" (16
C.J.S. 1173). It is "the privilege to enjoy property legally vested, to enforce contracts, and enjoy the rights of property conferred by the
existing law" (12 C.J.S. 955, Note 46, No. 6) or "some right or interest in property which has become fixed and established and is no longer
open to doubt or controversy" (Downs vs. Blount, 170 Fed. 15, 20, cited in Balboa vs. Farrales, 51 Phil. 498, 502).
The due process clause prohibits the annihilation of vested rights. "A state may not impair vested rights by legislative enactment, by
the enactment or by the subsequent repeal of a municipal ordinance, or by a change in the constitution of the State, except in a
legitimate exercise of the police power" (16 C.J.S. 1177-78).
It has been observed that, generally, the term "vested right" expresses the concept of present fixed interest, which in right reason and
natural justice should be protected against arbitrary State action, or an innately just and imperative right which an enlightened free society,
sensitive to inherent and irrefragable individual rights, cannot deny (16 C.J.S. 1174, Note 71, No. 5, citing Pennsylvania Greyhound Lines,
Inc. vs. Rosenthal, 192 Atl. 2nd 587).47 (Emphasis supplied.)
It is true that protection of vested rights is not absolute and must yield to the exercise of police power:
A law enacted in the exercise of police power to regulate or govern certain activities or transactions could be given retroactive effect and may
reasonably impair vested rights or contracts. Police power legislation is applicable not only to future contracts, but equally to Ihose already in
existence. Non-impairment of contracts or vested rights clauses will have to yield to the superior and legitimate exercise by the State of police
power to promote the health, morals, peace, education, good order, safety, and general welfare of the people, x x x.[48]
Nonetheless, the Sangguniang Bayan of DasmariÃ±as in this case, in its exercise of police power through the enactment of the 1981
Comprehensive Zoning Ordinance, itself abided by the general rule and included in the very same ordinance an express commitment to honor
rights that had already vested under previous ordinances, rules, and regulations. EMRASON acquired the vested right to use and develop the
subject property as a residential subdivision on July 9, 1972 with the approval of Resolution No. 29-A by the Municipality of Dasmarinas. Such
right cannot be impaired by the subsequent enactment of the 1981 Comprehensive Zoning Ordinance of Dasmarinas, in which the subject
property was included in an agricultural zone. Hence, the Municipal Mayor of Dasmariflas had been continuously and consistently recognizing
the subject property as a residential subdivision.[49]
Incidentally, EMRASON mentions Resolution No. 105, Defining and Declaring the Boundaries of Industrial and Residential Land Use Plan in the
Municipalities of Imus and Parts of Dasmariflas, Carmona, Gen. Mariano Alvarez, Gen. Trias, Silang, Tanza, Naic, Rosario, and Trece Martires
City, Province o[ Cavite, approved by the Sangguniang Panlalawigan of Cavite on March 25, 1988. The Sangguniang Panlalawigan determined
that "the lands extending from the said designated industrial areas would have greater economic value for residential and institutional uses,
and would serve the interest and welfare for the greatest good of the greatest number of people."50 Resolution No. 105, approved by the
HLURB in 1990, partly reads:
Tracts of land in the Municipality of Carmona from the People's Technology Complex to parts of the Municipality of Silang, parts of
the Municipalities of DasmariÃ±as, General Trias, Trece Martires City, Municipalities of Tanza and Naic forming the strip of land traversed
by the Puerto Azul Road extending two kilometers more or less from each side of the road which are hereby declared as industrial-
residential-institutional mix. (Emphases supplied.)
There is no question that the subject property is located within the afore-described area. And even though Resolution No. 105 has no direct
bearing on the classification of the subject property prior to the CARL - it taking effect only in 1990 after being approved by the HLURB - it is
a confirmation that at present, the subject property and its surrounding areas are deemed by the Province of Cavite better suited and
prioritized for industrial and residential development, than agricultural purposes.
CARP exemption
The Court reiterates that since July 9, 1972, upon approval of Resolution No. 29-A by the Municipality of Dasmarinas, the subject property
had been reclassified from agricultural to residential. The tax declarations covering the subject property, classifying the same as agricultural,
cannot prevail over Resolution No. 29-A. The following pronouncements of the Court in the Patalinghug case are of particular relevance
herein:
The reversal by the Court of Appeals of the trial court's decision was based on Tepoot's building being declared for taxation purposes as
residential. It is our considered view, however, that a tax declaration is not conclusive of (he nature of the property for zoning
purposes. A property may have been declared by its owner as residential for real estate taxation purposes but it may well be within a
commercial zone. A discrepancy may thus exist in the determination of the nature of property for real estate taxation purposes vis-a-vis the
determination of a property for zoning purposes.
xxxx
The trial court's determination that Mr. Tepoot's building is commercial and, therefore, Sec. 8 is inapplicable, is strengthened by the fact that
the Sangguniang Panlungsod has declared the questioned area as commercial or C-2. Consequently, even if Tepoot's building was declared
for taxation purposes as residential, once a local government has reclassified an area as commercial, that determination for zoning
purposes must prevail. While the commercial character of the questioned vicinity has been declared thru the ordinance, private
respondents have failed to present convincing arguments to substantiate their claim that Cabaguio Avenue, where the funeral parlor was
constructed, was still a residential zone. Unquestionably, the operation of a funeral parlor constitutes a "commercial purpose," as gleaned
from Ordinance No. 363.[52] (Emphases supplied.)
Since the subject property had been reclassified as residential land by virtue of Resolution No. 29-A dated July 9, 1972, it is no longer
agricultural land by the time the CARL took effect on June 15, 1988 and is, therefore, exempt from the CARP.
This is not the first time that the Court made such a ruling.
In the Natalia Realty case, Presidential Proclamation No. 1637 dated April 18, 1979 set aside land in the Municipalities of Antipolo, San
Mateo, and Montalban, Province of Rizal, as townsite areas. The properties owned by Natalia Realty, Inc. (Natalia properties) were situated
within the areas proclaimed as townsite reservation. The developer of the Natalia properties was granted the necessary clearances and
permits by the PJSRC for the development of a subdivision in the area. Thus, the Natalia properties later became the Antipolo Hills
Subdivision. Following the effectivity of the CARL on June 15, 1988, the DAR placed the undeveloped portions of the Antipolo Hills
Subdivision under the CARP. For having done so, the Court found that the DAR committed grave abuse of discretion, thus:
Section 4 of R.A. 6657 provides that the CARL shall "cover, regardless of tenurial arrangement and commodity produced, all public and
private agricultural lands." As to what constitutes "agricultural land," it is referred to as "land devoted to agricultural activity as defined in this
Act and not classified as mineral, forest, residential, commercial or industrial land." The deliberations of the Constitutional Commission
confirm this limitation. "Agricultural lands" arc only those lands which are "arable and suitable agricultural lands" and "do not include
commercial, industrial and residential lands."
Based on the foregoing, it is clear that the undeveloped portions of the Antipolo Hills Subdivision cannot in any language be considered as
"agricultural lands." These lots were intended for residential use. They ceased to be agricultural lands upon approval of their
inclusion in the Lungsod Silangan Reservation. Even today, the areas in question continue to be developed as a low-cost housing
subdivision, albeit at a snail's pace, x x x The enormity of the resources needed for developing a subdivision may have delayed its
completion but this does not detract from the fact that these lands are still residential lands and outside the ambit of the CARL.
Indeed, lands not devoted to agricultural activity are outside the coverage of CARL. These include lands previously converted to non-
agricultural uses prior to the eifectivity of CARL by government agencies other than respondent OAR. In its Revised Rules and Regulations
Governing Conversion of Private Agricultural Lands to Non-Agricultural Uses, DAR itself defined ''agricultural land" thus -
"x x x Agricultural land refers to those devoted to agricultural activity as defined in R.A. 6657 and not classified as mineral or forest by the
Department of Environment and Natural Resources (DENR) and its predecessor agencies, and not classified in town plans and zoning
ordinances as approved by the Housing and Land Use Regulatory Board (BLURB) and its preceding competent authorities prior to 15 June
1988 for residential, commercial or industrial use."
Since the NATALIA lands were converted prior to 15 June 1988, respondent DAR is bound by such conversion. It was therefore error to
include the undeveloped portions of the Antipolo Hills Subdivision within the coverage of CARL.
Be that as it may, the Secretary of Justice, responding to a query by the Secretary of Agrarian Reform, noted in an Opinion that lands covered
by Presidential Proclamation No. 1637, inter alia, of which the NATALIA lands are part, having been reserved for townsite purposes "to be
developed as human settlements by the proper land and housing agency," are "not deemed 'agricultural lands' within the meaning and intent
of Section 3 (c) of R.A. No. 6657." Not being deemed "agricultural lands," they are outside the coverage of CARL. [53] (Emphases supplied.)
That the land in the Natalia Realty case was reclassified as residential by a presidential proclamation, while the subject property herein was
reclassified as residential by a local ordinance, will not preclude the application of the ruling of this Court in the former to the latter. The
operative fact that places a parcel of land beyond the ambit of the CARL is its valid reclassification from agricultural to non-agricultural prior
to the effectivity of the CARL on June 15, 1988, not by how or whose authority it was reclassified.
In Pasong Bayabas Farmers Association, Inc. v. Court of Appeals[54] (Pasong Bayabas case), the Court made the following findings:
Under Section 3(c) of Rep. Acl No. 6657. agricultural lands refer to lands devoted to agriculture as conferred in the said law and not classified
as industrial land. Agricultural lands are only those lands which are arable or suitable lands that do not include commercial, industrial and
residential lands. Section 4(e) of the law provides that it covers all private lands devoted to or suitable for agriculture regardless of the
agricultural products raised or that can be raised thereon. Rep. Act No. 6657 took effect only on June 15, 1988. But long before the law
took effect, the property subject of the suit had already been reclassified and converted from agricultural to non-agricultural or
residential land by the following administrative agencies: (a) the Bureau of Lands, when it approved the subdivision plan of the
property consisting of 728 subdivision lots; (b) the National Planning Commission which approved the subdivision plan subdivided by the
LDC/CAI for the development of the property into a low-cost housing project; (c) the Municipal Council of Carmona, Cavite, when it
approved Kapasiyahang Blg. 30 on May 30, 1976; (d) Agrarian Reform Minister Conrado F. Estrella, on July 3, 1979, when he granted
the application of the respondent for the development of the Hakone Housing Project with an area of 35.80 hectares upon the
recommendation of the Agrarian Reform Team, Regional Director of Region IV, which found, after verification and investigation, that the
property was not covered by P.D. No. 27, it being untenanted and not devoted to the production of palay/or corn and that the property was
suitable for conversion to residential subdivision: (e) by the Ministry of Local Government and Community Development; (f) the Human
Settlements Regulatory Commission which issued a location clearance, development permit, Certificate of Inspection and License to Sell to
the LDC/private respondent: and, (g) the Housing and Land Use Regulatory Board which also issued to the respondent CAI/LDC a license to
sell the subdivision lots." (Emphases supplied.)
Noticeably, there were several government agencies which reclassified and converted the property from agricultural to non-agricultural in
the Pasong Bayabas case. The CARL though does not specify which specific government agency should have done the reclassification. To be
exempt from CARP, all that is needed is one valid reclassification of the land from agricultural to non-agricultural by a duly authorized
government agency before June 15, 1988, when the CARL took effect. All similar actions as regards the land subsequently rendered by other
government agencies shall merely serve as confirmation of the reclassification. The Court actually recognized in the Pasong Bayabas case the
power of the local government to convert or reclassify lands through a zoning ordinance:
Section 3 of Rep. Act No. 2264, amending the Local Government Code, specifically empowers municipal and/or city councils to
adopt zoning and subdivision ordinances or regulations in consultation with the National Planning Commission. A zoning
ordinance prescribes, defines, and apportions a given political subdivision into specific land uses as present and future projection of
needs. The power of the local government to convert or reclassify lands to residential lands to non-agricultural lands
rcclassificd is not subject to the approval of the Department of Agrarian Reform. Section 65 of Rep. Act No. 6657 relied upon by the
petitioner applies only to applications by the landlord or the beneficiary for the conversion of lands previously placed under the agrarian
reform law after the lapse of five years from its award. It docs not apply to agricultural lands already converted as residential lands prior to
the passage of Rep. Act No. 6657.[56] (Emphases supplied.)
At the very beginning of Junto v. Garilao,[57] the Court already declared that:
Lands already classified and identified as commercial, industrial or residential before June 15, 1988 - the date of effectivity of the
Comprehensive Agrarian Reform Law (CARL) - are outside the coverage of this law. Therefore, they no longer need any conversion clearance
from the Department of Agrarian Reform (DAR).[58]
The Court then proceeded to uphold the authority of the City Council of Bacolod to reclassify as residential a parcel of land through Resolution
No. 5153-A, series of 1976. The reclassification was later affirmed by the HSRC. Resultantly, the Court sustained the DAR Order dated
September 13, 1994, exempting the same parcel of land from CARP Coverage.
The writ of preliminary injunction
Any objection of Buklod against the issuance by the Court of Appeals of a writ of preliminary injunction, enjoining then DAR Secretary Garilao
and Deputy Executive Secretary Corona from implementing the OP Decision of February 7, 1996 and Resolution of May 14, 1996 during the
pendency of CA-G.R. SP No. 40950, had been rendered moot and academic when the appellate court already promulgated its Decision in said
case on March 26, 1997 which made the injunction permanent. As the Court held in Kho v. Court of Appeals[59]:
We cannot likewise overlook the decision of the trial court in the case for final injunction and damages. The dispositive portion of said decision
held that the petitioner does not have trademark rights on the name and container of the beauty cream product. The said decision on the
merits of the trial court rendered the issuance of the writ of a preliminary injunction moot and academic notwithstanding the fact that the
same has been appealed in the Court of Appeals. This is supported by our ruling in La Vista Association, Inc. v. Court of Appeals, to wit:
Considering that preliminary injunction is a provisional remedy which may be granted at any time after the commencement of the action and
before judgment when it is established that the plaintiff is entitled to the relief demanded and only when his complaint shows facts entitling
such reliefs xxx and it appearing that the trial court had already granted the issuance of a final injunction in favor of petitioner in its decision
rendered after trial on the merits xxx the Court resolved to Dismiss the instant petition having been rendered moot and academic. An
injunction issued by the trial court after it has already made a clear pronouncement as to the plaintiffs right thereto, that is, after the same
issue has been decided on the merits, the trial court having appreciated the evidence presented, is proper, notwithstanding the fact that the
decision rendered is not yet final xxx. Being an ancillary remedy, the proceedings for preliminary injunction cannot stand separately or
proceed independently of the decision rendered on the merit of the main case for injunction. The merit of the main case having been already
determined in favor of the applicant, the preliminary determination of its non-existence ceases to have any force and effect, (italics supplied)
La Vista categorically pronounced that the issuance of a final injunction renders any question on the preliminary injunctive order moot and
academic despite the fact that the decision granting a final injunction is pending appeal. Conversely, a decision denying the applicant-
plaintiffs right to a final injunction, although appealed, renders moot and academic any objection to the prior dissolution of a writ of
preliminary injunction.[60]
Issues belatedly raised
Buklod sought to intervene in CA-G.R. SP No. 40950, then pending before the Court of Appeals, by filing a Manifestation and Omnibus Motion
in which it argued only two points: (1) the writ of preliminary injunction be immediately dissolved for having been issued in violation of
Section 55 of the CARL; and (2) that the Petition for Review of EMRASON be dismissed for being the wrong remedy.
It was only after the Court of Appeals rendered its Decision dated March 26, 1997 unfavorable to both DAR and Buklod did Buklod raise in its
Motion for Reconsideration several other issues, both factual and legal,[61] directly assailing the exemption of the subject property from the
CARP. The Court of Appeals refused to consider said issues because they were raised by Buklod for the first time in its Motion for
Reconsideration.
Buklod persistently raises the same issues before this Court, and the Court, once more, refuses to take cognizance of the same.
As a rule, no issue may be raised on appeal unless it has been brought before the lower tribunal for its consideration. Higher courts are
precluded from entertaining matters neither alleged in the pleadings nor raised during the proceedings below, but ventilated for the first time
only in a motion for reconsideration or on appeal.[62] The issues were first raised only in the Motion for Reconsideration of the Decision of the
Court of Appeals, thus, it is as if they were never duly raised in that court at all. "Hence, this Court cannot now, for the first time on appeal,
entertain these issues, for to do so would plainly violate the basic rule of fair play, justice and due process. The Court reiterates and
emphasizes the well-settled rule that an issue raised for the first time on appeal and not raised timely in the proceedings in the lower court is
barred by estoppel.[63]
Indeed, there are exceptions to the aforecited rule that no question may be raised for the first time on appeal. Though not raised below, the
issue of lack of jurisdiction over the subject matter may be considered by the reviewing court, as it may be raised at any stage. The said court
may also consider an issue not properly raised during trial when there is plain error. Likewise, it may entertain such arguments when there
are jurisprudential developments affecting the issues, or when the issues raised present a matter of public policy.[64] Buklod, however, did not
allege, much less argue, that its case falls under any of these exceptions.
Nonetheless, even when duly considered by this Court, the issues belatedly raised by Buklod are without merit.
Contrary to the contention of Buklod, there is no necessity to carry out the conversion of the subject property to a subdivision within one
year, at the risk of said property reverting to agricultural classification.
Section 36(1) of the Agricultural Land Reform Code, in effect since August 8, 1963, provided:
SEC. 36. Possession of Landholding; Exceptions.â€” Notwithstanding any agreement as to the period or future surrender, of the land, an
agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by
the Court in a judgment that is final and executory if after due hearing it is shown that:
(1) The agricultural lessor-owner or a member of his immediate family will personally cultivate the landholding or will convert the landholding,
if suitably located, into residential, factory, hospital or school site or other useful non-agricultural purposes: Provided, That the agricultural
lessee shall be entitled to disturbance compensation equivalent to five years rental on his landholding in addition to his rights under Sections
twenty-five and thirty-four, except when the land owned and leased by the agricultural lessor is not more than five hectares, in which case
instead of disturbance compensation the lessee may be entitled to an advanced notice of at least one agricultural year before ejectment
proceedings are filed against him: Provided, further, That should the landholder not cultivate the land himself for three years or fail to
substantially carry out such conversion within one year after the dispossession of the tenant, it shall be presumed that he
acted in bad faith and the tenant shall have the right to demand possession of the land and recover damages for any loss
incurred by him because of said dispossessions; xxx. (Emphasis supplied.)
On September 10, 1971, the Agricultural Land Reform Code was amended and it came to be known as the Code of Agrarian Reforms. After
its amendment, Section 36(1) stated:
(1) The landholding is declared by the department head upon recommendation of the National Planning Commission to be suited for
residential, commercial, industrial or some other urban purposes: Provided, That the agricultural lessee shall be entitled to disturbance
compensation equivalent to five times the average of the gross harvests on his landholding during the last five preceding calendar years.
At the time Resolution No. 29-A was enacted by the Municipality of Dasmarinas on July 9, 1972, the Code of Agrarian Reforms was already
in effect. The amended Section 36(3) thereof no longer contained the one-year time frame within which conversion should be carried out.
More importantly, Section 36(1) of the Code o[ Agrarian Reforms would apply only if the land in question was subject of an agricultural
leasehold, a fact that was not established in the proceedings below. It may do well for the Buklod members to remember that they filed their
present Petition to seek award of ownership over portions of the subject property as qualified farmer-beneficiaries under the CARP; and not
payment of disturbance compensation as agricultural lessees under the Code of Agrarian Reforms. The insistence by Buklod on the requisites
under Section 36(1) of the Agricultural Land Reform Code/Code of Agrarian Reforms only serves to muddle the issues rather than support its
cause.
Buklod likewise invokes the vested rights of its members under the Agricultural Land Reform Code/Code of Agrarian Reforms and the Tenants
Emancipation Decree, which preceded the CARP. Yet, for the Buklod
members to be entitled to any of the rights and benefits under the said laws, it is incumbent upon them to prove first that they qualify as
agricultural lessees or farm workers of the subject property, as defined in Section 166(2) [65] and (15)[66]of the Code of Agrarian Reforms;
and/or they are tenant-farmers of private agricultural lands primarily devoted to rice and corn, under a system of share-crop or lease
tenancy, and are members of a duly recognized farmer's cooperative, as required by the Tenants Emancipation Decree. None of these
determinative facts were established by Buklod.
Buklod counters that it precisely moved for a hearing before the Court of Appeals so that it could present evidence to prove such facts, but
the appellate court erroneously denied its motion.
The Court finds that the Court of Appeals did not err on this matter.
In the recent case of Office of the Ombudsman v. Sison,[67] the Court expounded on the rules on intervention:
It is fundamental that the allowance or disallowance of a Motion 10 Intervene is addressed to the sound discretion of the court. The
permissive tenor of the rules shows the intention lo give to the court the full measure of discretion in permitting or disallowing the
intervention, thus:
SECTION 1. Who may intervene, - A person who has a Icga) interest in the mailer in litigation, or in the success of either of the parties, or
an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the
court or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the
intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intcrvenor's rights may
be fully protected in a separate proceeding.
SECTION 2. Time to intervene. - The motion to intervene may be filed al any time before rendition of judgment by the trial court. A
copy of the pleading-in-intervention shall be attached to the motion and served on the original parties. (Emphasis supplied.)
Simply, intervention is a procedure by which third persons, not originally parties to the suit but claiming an interest in the subject matter,
come into the case in order to protect their right or interpose their claim. Its main purpose is to settle in one action and by a single judgment
all conflicting claims of, or the whole controversy among, the persons involved.
To warrant intervention under Rule 19 of the Rules of Court, two requisites must concur: (1) the movant has a legal interest in the matter in
litigation; and (2) intervention must not unduly delay or prejudice the adjudication of the rights of the parties, nor should the claim of the
intervenor be capable of being properly decided in a separate proceeding. The interest,' which entitles one to intervene, must involve the
matter in litigation and of such direct and immediate character that the intervenor will either gain or lose by the direct legal operation and
effect of the judgment.[68]
To apply the rules strictly, the motion of Buklod to intervene was filed too late. According to Section 2, Rule 19 of the Rules of Civil Procedure,
"a motion to intervene may be filed at any time before rendition of judgment by the trial court." Judgment was already rendered in DARAB
Case No. IV-Ca-0084-92 (the petition of EMRASON to nullify the notices of acquisition over the subject property), not only by the DAR
Hearing Officer, who originally heard the case, but also the DAR Secretary, and then the OP, on appeal.
Buklod only sought to intervene when the case was already before the Court of Appeals. The appellate court, in the exercise of its discretion,
still allowed the intervention of Buklod in CA-G.R. SP No. 40950 only because it was "not being in any way prejudicial to the interest of the
original parties, nor will such intervention change the factual legal complexion of the case."[69] The intervention of Buklod challenged
only the remedy availed by EMRASON and the propriety of the preliminary injunction issued by the Court of Appeals, which were directly and
adequately addressed by the appellate court in its Decision dated March 26, 1997.
The factual matters raised by Buklod in its Motion for Reconsideration of the March 26, 1997 Decision of the Court of Appeals, and which it
sought to prove by evidence, inevitably changes "the factual legal complexion of the case." The allegations of Buklod that its members are
tenant-farmers of the subject property who acquired vested rights under previous agrarian reform laws, go against the findings of the DAR
Region IV Hearing Officer, adopted by the DAR Secretary, the OP, and Court of Appeals, that the subject property was being acquired under
the CARP for distribution to the tenant-farmers of the neighboring NDC property, after a determination that the latter property was
insufficient for the needs of both the NDC-Marubeni industrial estate and the tenant-farmers.
Furthermore, these new claims of Buklod are beyond the appellate jurisdiction of the Court of Appeals, being within the primary jurisdiction of
the DAR. As Section 50 of the CARL, as amended, reads:
SEC. 50. Quasi-Judicial Powers of the DAR. - The DAR is hereby vested with primary jurisdiction to determine and adjudicate agrarian reform
matters and shall have exclusive original jurisdiction over all matters involving the implementation of agrarian reform, except those falling
under the exclusive jurisdiction of the Department of Agriculture (DA) and the Department of Environment and Natural Resources (DENR).
In fact, records reveal that Buklod already sought remedy from the DARAB. DARAB Case No. IV-CA-0261, entitled Buklod nang Magbubukid
sa Lupaing Ramos, rep. by Edgardo Mendoza, et at. v. E.M. Ramos and Sons, Inc., et al., was pending at about the same time as DARAB Case
No. lV-Ca-0084-92, the petition of EMRASON for nullification of the notices of acquisition covering the subject property. These two cases were
initially consolidated before the DARAB Region IV. The DARAB Region IV eventually dismissed DARAB Case No. IV-Ca-0084-92 and referred
the same to the DAR Region IV Office, which had jurisdiction over the case. Records failed to reveal the outcome of DARAB Case No. IV-CA-
0261,
On a final note, this Court has stressed more than once that social justice - or any justice for that matter - is for the deserving, whether he be
a millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, the Court is called upon to tilt the balance in
favor of the poor to whom the Constitution fittingly extends its sympathy and compassion. But never is it justified to give preference to the
poor simply because they are poor, or to reject the rich simply because they are rich, for justice must always be served for poor and rich
alike, according to the mandate of the law.[70] Vigilance over the rights of the landowners is equally important because social justice cannot be
invoked to trample on the rights of property owners, who under our Constitution and laws are also entitled to protection.[71]
WHEREFORE, the Petitions for Review filed by the Buklod Nang Magbubukid Sa Lupaing Ramos, Inc. in G.R. No. 131481 and the Department
of Agrarian Reform in G.R. No. 131624 are hereby DENIED. The Decision dated March 26, 1997 and the Resolution dated November 24,
1997 of the Court of Appeals in CA-G.R. SP No. 40950 are hereby AFFIRMED.
SO ORDERED.
Velasco, Jr., J., (Acting Chairperson), Del Castillo, Perez, and Mendoza,* JJ., concur.
Endnotes:
*
Per Raffle dated July 19,2010.
Rollo (G.R. No. 131481), pp. 22-41; penned by Associate Justice Cancio C. Garcia with Associate Justices Eugenio S. LAbitoria and Oswaldo
[1]
D. Agcaoili, concurring.
[2]
Id. at 54-59.
[3]
Rollo (G.R. No. 131624), pp. 89-109; penned by Deputy Executive Secretary Renato C. Corona (now Chief Justice of this Court).
[4]
Id. at 110-113.
[5]
Rollo (G.R. No. 131481), pp. 22-27.
[6]
CA rollo, p. 96; penned by Associate Justice Cancio C. Garcia with Associate Justices Romeo J. Callejo and Anemia G. Tuquero, concurring.
[7]
Now Chief Justice of the Supreme Court.
[8]
CA rallo, p. 107-109.
[9]
Id. at 164-165.
[10]
Rollo (G.R. No. 131481), p. 29.
[11]
Id. at 34-36.
[12]
Id. at 36-37.
[13]
Id. at 38.
[14]
Id. at 40.
[15]
Id. at 41.
[16]
Id. al 103.
[17]
Id. at 13-14.
[18]
Rollo (G.R. No. 131624), pp. 16-17.
[19]
G.R. No. 103302, August 12, 1993,225 SCRA 278.
[36]
Section 1(d) of Ordinance No.1.
[37]
Exhibit "G," Exhibits Folder, p. 42.
[38]
Id.
[20]
Section 72 of the Public Land Act, in particular, reads:
SEC. 72. The Secretary of Agriculture and Natural Resources, if he approves the recommendations of the Director of Lands, shall submit the
matter to the President of the end that the latter may issue a proclamation reserving the land surveyed, or such part thereof as he may deem
proper, as a town site, and a certified copy of such proclamation shall be sent to the Director of Lands and another to the Register of Deeds of
the province in which the surveyed land lies.
An Act Expanding the Jurisdiction of the Court of Appeals, Amending for the Purpose Section Nine of Batas Pambansa Big. 129, as
[21]
Amended. Known as the Judiciary Reorganization Act of 1980. 22
[22]
183 Phil. 176(1979).
[23]
G.R. No. 104786, Januarv 27, 1994, 229 SCRA 554, 559.
The latest amendment to the CARL is Republic Act "No. 9700, entitled "An Act Strengthening the Comprehensive Agrarian Reform Program
[24]
(CARP), Extending the Acquisition and Distribution of All Agricultural Lands, Instituting Necessary Reforms, Amending for the Purpose Certain
Provisions of Republic Act No. 6657, Otherwise Known as the Comprehensive Agrarian Reform Law of 1988, as Amended, and Appropriating
Funds Therefor[,]" or more commonly known as the CARPER Law, which took effect on July 1, 2009 and extended CARP implementation for
another five years, or until June 30, 2014.
[25]
Ortigas & Co., Ltd. Partnership v. Feati Bank and Trust Co., supra note 22 at 186-187.
[26]
Sta. Rosa Realty Development Corporation v. Court of Appeals, 419 Phil. 457, 476 (2001).
[27]
113 Phil. 789(1961).
[28]
Id. at 800-801.
[29]
453 Phil. 373(2003).
[30]
Id. at 382-383.
[31]
DAR Administrative Order No. 1, series of 1999.
[32]
G.R. No. 92389, September 11, 1991,201 SCRA 508.
[33]
Id. at 513-515.
[34]
Caltex (Philippines), Inc. v. Court of Appeals, G.R. "No. 97753, August 10, 1992, 212 SCRA 448, 463.
[35]
National Federation of Labor v. National Labor Relations Commission, 383 Phil. 910, 917-918 (2000).
[39]
Office ofthe President Administrative Order No, 152, dated December 16, 1968.
[40]
Id.
[41]
United BF Homeowners' Association, Inc. v. The (Municipal) City Mayor, ParaÃ±aque City, G.R. No. 141010, February 7,2007,515 SCRA 1,
12.
PENALTY. Violation of any provision or provisions of this ordinance shall upon conviction, be penalized by a fine of not more than TWO
[42]
HUNDRED PESOS (P200.00) or by imprisonment of not more than SIX MONTHS (6) or by both fine and imprisonment in the discretion of the
court. Each day that the violation of this ordinance continues shall be deemed a separate offense, after the date of the court decision is
rendered.
If the violation is committed by a firm, a corporation, partnership or any other juridical person, the manager managing partners of the person
changed with the management, of such firm, corporation, partnership or juridical person shall be criminally reasonable.
[43]
Executive Order No. 648.
[44]
Lepanto Consolidated Mining Co. v. WMC Resources Int'l Ply. Ltd.,G.R. No. 162331, November 20, 2006, 507 SCRA 315, 328.
[45]
DAR records, p. 273.
[46]
16 204 Phil. 126(1982).
[47]
Id. at 135.
[48]
Ortigas & Co., Ltd, v. Court of Appeals, 400 Phil. 615, 622-623 (2000).
See the List of Subdivisions within the Jurisdiction of Dasmarinas, Cavite (Exhibits Folder, Exhibit "QQ." pp. 195-200) and Certification
[49]
dated September 23, 1988 (Exhibits Folder, Exhibit "S,"p. 116).
[50]
Resolution No. 105, Office of Sangguniang Panlalawigan, Province of Cavite, Id.
[51]
CA RP exemption
[52]
Patalinghug v. Court of Appeals, supra note 23 at 558-559.
[53]
Natalia Realty, Inc. v. Department of Agrarian Reform,, supra note 19 at 282-284.
[54]
473 Phil. 64 (2004).
[55]
Id. at 92-93.
[56]
Id. at 94-95.
[57]
503 Phil, 154(2005).
[58]
Id. at 157.
[59]
429 Phil. 1-10(2002).
[60]
Id. at 151-152.
[61]
1) UNDER THE LAW APPLICABLE AT THE TIME OF THE ALLEGED
CONVERSION, [EMRASON] HAD ONE (1) YEAR WITHIN WHICH TO IMPLEMENT THE CONVERSION; OTHERWISE, THE CONVERSION IS
DEEMED TO BE IN BAD FAITH (Sec. 36 Agricultural Land Reform Code, R.A. 3844).
2) BY VIRTUE OF THE AGRICULTURAL LAND REFORM CODE (R.A. 3844) WHICH TOOK EFFECT ON AUGUST 8, 1963; THE FARMERS
CULTIVATING THE PROPERTY WERE GRANTED A LEGISLATIVE SECURITY OF TENURE AS AGRICULTURAL LESSEE (Sec. 7) WHICH CANNOT BE
NEGATED BY A MERE MUNICIPAL ORDINANCE;
3) SINCE 1972 TO THE PRESENT, [EMRASON] DID NOT PERFORM ANY ACT TO IMPLEMENT THE ALLEGED CONVERSION OF THE PROPERTY
INTO A RESIDENTIAL SUBDIVISION SUCH AS SUBDIVIDING THE TITLES IN ACCORDANCE WITH A SUBDIVISION PLAN; DECLARING THE
PROPERTY AS RESIDENTIAL LOTS AND OBTAINING THE PROPER DOCUMENTATION FROM GOVERNMENT OFFICES;
4) [EMRASON] IS ESTOPPED FROM INVOKING THE ALLEGED CONVERSION IN 1972 BECAUSE IT CONTINUED TO USE THE FOR
AGRICULTURAL ACTIVITY BY LEASING THE SAME FOR AGRICULTURAL PURPOSES AND PAYING REAL ESTATE TAX THEREON UNDER
"AGRICULTURAL PROPERTY;"
5) THE LEASEHOLD TENANCY UNDER R.A. 3844 IS MANDATORY SO THAT THE FARMERS REPRESENTED BY HEREIN INTERVENOR HAVE A
VESTED RIGHT OVER. THE PROPERTY (Sec. 4);
6) GIVEN THE MANDATE OF THE 1987 CONSTITUTION FOR A MEANINGFUL LAND REFORM, IT IS INEVITABLE THAT THE PROPERTY IN
QUESTION IS SUBJECT TO LAND REFORM;
7) FINDINGS OF FACT BY THE DAR IS CONCLUSIVE WHICH SHOULD NOT BE IGNORED IN THE ABSENCE OF COMPELLING REASONS, THE
PRESENCE OF MORE THAN 300 FARMERS WITHIN THE PROPERTY IN QUESTION WHO HAVE CULTIVATED THE LAND FOR DECADES
CLEARLY SHOWS THE IMPERATIVE NECESSITY OF GRANTING THE FARMERS THE SALUTARY EFFECTS OF LAND REFORM. (CA rollo, pp.
281-282.)
[62]
Prudential Bank v. Lim, G.R. No. 136371, November 11, 2005, 474 SCRA 485, 498.
[63]
Sanchez v. Court of Appeals, 345 Phil. 155, 185-186 (1997).
[64]
Del Rosario v. Bonga, 402 Phil. 949, 960 (2001).
[65]
SEC. 166. Definition of Terms. -As used in Chapter 1 of this Code:
xxxx
(2) "Agricultural lessee" means a person who, by himself and with the aid available from within his immediate farm household, cultivates the
land belonging to, or possessed by, another with the latter's consent for purposes of production, for a price certain in money or in produce or
both. It is distinguished from civil Jaw lessee as understood in the Civil Code of the Philippines.
[66]
SEC. 166. Definition of Terms. - As used in Chapter I of this Code:
xxxx
(15) "Farm worker" includes any agricultural wage, salary or piece worker but is not limited to a farm worker of a particular farm employer
unless this Code explicitly stales otherwise and any individual whose work has ceased as consequence of, or in connection with, a current
agrarian dispute or an unfair labor practice and who has not obtained a substantially equivalent and regular employment.
[67]
G.R. No. 185954, February 16,2010, 612 SCRA 702.
[68]
Id. at 712-713.
[69]
Rollo (G.R. No. 131481), p. 29.
[70]
Gelos v. Court of Appeals, G.R. No. 86186, May 8, 1992, 208 SCRA 608, 616.
[71]
Land Bank of the Philippines v. Court of Appeals, 319 Phil. 246, 262 (1995).

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EN BANC

G.R. No. 199802

CONGRESSMAN HERMILANDO I. MANDANAS; MAYOR EFREN B. DIONA; MAYOR ANTONINO A. AURELIO;

G.R. No. 208488

(c) On the third year and thereafter, forty percent (40%).

The issues for resolution are limited to the following, namely:

Ruling of the Court

The petitions are partly meritorious.

rule of statutory construction that came to be oft-mentioned as Dillon's Rule, to wit:

Philippine society in its ethnolinguistic, cultural, and even religious diversities.

guardedly, not absolutely, abdicated by the National Government.

the development of the national wealth. 30

Sec. 3. Operative Principles of Decentralization-

(b) On the second year, thirty-five percent (35%); and

(c) On the third year and thereafter, forty percent (40%).

Has not Congress thereby infringed the constitutional provision?

We agree with Garcia's contention.

(a) Income tax;

(b) Estate and donor's taxes;

(c) Value-added tax;

(d) Other percentage taxes;

(e) Excise taxes;

(f) Documentary stan1p taxes; and

Racing Club, Inc.; 60

The insistence of Garcia is valid to an extent.

No. 9054; and

2. Tariff and customs duties collected by the BOC;

Yet, the Court has conceded in Arau/lo v. Aquino III that:

Section 14 of Article XI extends to the Office of the Ombudsman a similar privilege:

Section 284, as hereby modified, shall henceforth read as follows:

(b) On the second year, thirty-five percent (35%); and

(c) On the third year and thereafter, forty percent (40%).

(a) Provinces - Twenty-three percent (23%);

(b) Cities - Twenty-three percent (23%);

(c) Municipalities - Thirty-four percent (34%); and

(d) Barangays - Twenty percent (20%)

(a) Population -- Fifty percent (50%);

(b) Land Area-· Twenty-five percent (25%); and

(c) Equal sharing--Twenty-five percent (25%)

(a) On the first year of the effoctivity of this Code:

(1) Population - Forty percent (40%); and

(2) Equal sharing - Sixty percent (50%)

(b) On the second year:

(1) Population - Fifty percent (50%); and

(2) Equal sharing - Fifty percent (50%)

(c) On the third year and thereafter.

(1) Population - Sixty percent (60%); and

(2) Equal sharing - Forty percent (40%).

(b) Tariff and customs duties collected by the Bureau of Customs;

DIOSDADO M. PERALTA MARIANO C. DEL CASTILLO

(I dissent. see separate opinion)

(no part prior OSG action) (I dissent. see separate opinion)

Associate Justice Associate Justice

and Missouri River Railroad Company, 24 Iowa (1868): 455 at 475.

(1) Administrative organization;

(2) Creation of sources ofrevenues;

(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;

(8) Preservation and development of the cultural heritage; and

which shall be automatically released to them.

University Press, New York, 2015, p. 12.