DECISION

CARPIO MORALES, J.:

Before the Court are six petitions challenging the constitutionality of Republic Act No.
9372 (RA 9372), An Act to Secure the State and Protect our People from Terrorism,
otherwise known as the Human Security Act of 2007,[1] signed into law on March 6,
2007.
Following the effectivity of RA 9372 on July 15, 2007,[2] petitioner Southern Hemisphere
Engagement Network, Inc., a non-government organization, and Atty. Soliman Santos,
Jr., a concerned citizen, taxpayer and lawyer, filed a petition for certiorari and prohibition
on July 16, 2007 docketed as G.R. No. 178552. On even date, petitioners Kilusang
Mayo Uno (KMU), National Federation of Labor Unions-Kilusang Mayo Uno (NAFLU-
KMU), and Center for Trade Union and Human Rights (CTUHR), represented by their
respective officers[3] who are also bringing the action in their capacity as citizens, filed a
petition for certiorari and prohibition docketed as G.R. No. 178554.

The following day, July 17, 2007, organizations Bagong Alyansang Makabayan
(BAYAN), General Alliance Binding Women for Reforms, Integrity, Equality, Leadership
and Action (GABRIELA), Kilusang Magbubukid ng Pilipinas (KMP), Movement of
Concerned Citizens for Civil Liberties (MCCCL), Confederation for Unity, Recognition
and Advancement of Government Employees (COURAGE), Kalipunan ng Damayang
Mahihirap (KADAMAY), Solidarity of Cavite Workers (SCW), League of Filipino
Students (LFS), Anakbayan, Pambansang Lakas ng Kilusang Mamamalakaya
(PAMALAKAYA), Alliance of Concerned Teachers (ACT), Migrante, Health Alliance for
Democracy (HEAD), and Agham, represented by their respective officers, [4] and joined
by concerned citizens and taxpayers Teofisto Guingona, Jr., Dr. Bienvenido Lumbera,
Renato Constantino, Jr., Sister Mary John Manansan, OSB, Dean Consuelo Paz, Atty.
Josefina Lichauco, Retired Col. Gerry Cunanan, Carlitos Siguion-Reyna, Dr. Carolina
Pagaduan-Araullo, Renato Reyes, Danilo Ramos, Emerenciana de Jesus, Rita Baua
and Rey Claro Casambre filed a petition for certiorari and prohibition docketed as G.R.
No. 178581.
On August 6, 2007, Karapatan and its alliance member organizations Hustisya,
Desaparecidos, Samahan ng mga Ex-Detainees Laban sa Detensyon at para sa
Amnestiya (SELDA), Ecumenical Movement for Justice and Peace (EMJP), and
Promotion of Church Peoples Response (PCPR), which were represented by their
respective officers[5] who are also bringing action on their own behalf, filed a petition for
certiorari and prohibition docketed as G.R. No. 178890.

On August 29, 2007, the Integrated Bar of the Philippines (IBP), Counsels for the
Defense of Liberty (CODAL),[6] Senator Ma. Ana Consuelo A.S. Madrigal, Sergio
Osmea III, and Wigberto E. Taada filed a petition for certiorari and prohibition docketed
as G.R. No. 179157.

Bagong Alyansang Makabayan-Southern Tagalog (BAYAN-ST), other regional chapters

and organizations mostly based in the Southern Tagalog Region,[7] and
individuals[8] followed suit by filing on September 19, 2007 a petition for certiorari and
prohibition docketed as G.R. No. 179461 that replicates the allegations raised in the
BAYAN petition in G.R. No. 178581.

Impleaded as respondents in the various petitions are the Anti-Terrorism

Council[9]composed of, at the time of the filing of the petitions, Executive Secretary
Eduardo Ermita as Chairperson, Justice Secretary Raul Gonzales as Vice Chairperson,
and Foreign Affairs Secretary Alberto Romulo, Acting Defense Secretary and National
Security Adviser Norberto Gonzales, Interior and Local Government Secretary Ronaldo
Puno, and Finance Secretary Margarito Teves as members. All the petitions, except
that of the IBP, also impleaded Armed Forces of the Philippines (AFP) Chief of Staff
Gen. Hermogenes Esperon and Philippine National Police (PNP) Chief Gen. Oscar
Calderon.

The Karapatan, BAYAN and BAYAN-ST petitions likewise impleaded President Gloria
Macapagal-Arroyo and the support agencies for the Anti-Terrorism Council like the
National Intelligence Coordinating Agency, National Bureau of Investigation, Bureau of
Immigration, Office of Civil Defense, Intelligence Service of the AFP, Anti-
Money Laundering Center, Philippine Center on Transnational Crime, and the PNP
intelligence and investigative elements.

The petitions fail.

Petitioners resort to certiorari is

improper

Preliminarily, certiorari does not lie against respondents who do not exercise judicial or
quasi-judicial functions. Section 1, Rule 65 of the Rules of Court is clear:

Section 1. Petition for certiorari.When any tribunal, board or

officer exercising judicial or quasi-judicial functions has acted
without or in excess of its or his jurisdiction, or with grave abuse
of discretion amounting to lack or excess of jurisdiction, and there
is no appeal, nor any plain, speedy, and adequate remedy in the
ordinary course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and praying
that judgment be rendered annulling or modifying the proceedings of
such tribunal, board or officer, and granting such incidental reliefs as
law and justice may require. (Emphasis and underscoring supplied)

Parenthetically, petitioners do not even allege with any modicum of particularity how
respondents acted without or in excess of their respective jurisdictions, or with grave
abuse of discretion amounting to lack or excess of jurisdiction.
The impropriety of certiorari as a remedy aside, the petitions fail just the same.

In constitutional litigations, the power of judicial review is limited by four exacting

requisites, viz: (a) there must be an actual case or controversy; (b) petitioners must
possess locus standi; (c) the question of constitutionality must be raised at the earliest
opportunity; and (d) the issue of constitutionality must be the lis mota of the case.[10]

In the present case, the dismal absence of the first two requisites, which are the most
essential, renders the discussion of the last two superfluous.

Petitioners lack locus standi

Locus standi or legal standing requires 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.[11]

Anak Mindanao Party-List Group v. The Executive Secretary[12] summarized the rule
on locus standi, thus:

Locus standi or legal standing has been defined as a personal and

substantial interest in a case such that the party has sustained or will
sustain direct injury as a result of the governmental act that is being
challenged. The gist of the question on standing is whether a party alleges
such personal stake in the outcome of the controversy as to assure that
concrete adverseness which sharpens the presentation of issues upon
which the court depends for illumination of difficult constitutional
questions.

[A] party who assails the constitutionality of a statute must have a direct
and personal interest. It must show not only that the law or any
governmental act is invalid, but also that it sustained or is in immediate
danger of sustaining some direct injury as a result of its
enforcement, and not merely that it suffers thereby in some indefinite
way. It must show that it has been or is about to be denied some right or
privilege to which it is lawfully entitled or that it is about to be subjected to
some burdens or penalties by reason of the statute or act complained of.

For a concerned party to be allowed to raise a constitutional question, it

must show that (1) it has personally suffered some actual or
threatened injury as a result of the allegedly illegal conduct of the
government, (2) the injury is fairly traceable to the challenged action, and
(3) the injury is likely to be redressed by a favorable action. (emphasis and
underscoring supplied.)
Petitioner-organizations assert locus standi on the basis of being suspected communist
fronts by the government, especially the military; whereas individual petitioners
invariably invoke the transcendental importance doctrine and their status as citizens and
taxpayers.

While Chavez v. PCGG[13] holds that transcendental public importance dispenses with
the requirement that petitioner has experienced or is in actual danger of suffering direct
and personal injury, cases involving the constitutionality of penal legislation belong to an
altogether different genus of constitutional litigation. Compelling State and societal
interests in the proscription of harmful conduct, as will later be elucidated, necessitate a
closer judicial scrutiny of locus standi.

Petitioners have not presented any personal stake in the outcome of the
controversy.None of them faces any charge under RA 9372.

KARAPATAN, Hustisya, Desaparecidos, SELDA, EMJP and PCR, petitioners inG.R.

No. 178890, allege that they have been subjected to close security surveillance by state
security forces, their members followed by suspicious persons and vehicles with dark
windshields, and their offices monitored by men with military build. They likewise claim
that they have been branded as enemies of the [S]tate.[14]

Even conceding such gratuitous allegations, the Office of the Solicitor General (OSG)
correctly points out that petitioners have yet to show any connection between the
purported surveillance and the implementation of RA 9372.

BAYAN, GABRIELA, KMP, MCCCL, COURAGE, KADAMAY, SCW, LFS,

Anakbayan, PAMALAKAYA, ACT, Migrante, HEAD and Agham, petitioner-
organizations in G.R. No. 178581, would like the Court to take judicial notice of
respondents alleged action of tagging them as militant organizations fronting for the
Communist Party of the Philippines (CPP) and its armed wing, the National Peoples
Army (NPA). The tagging, according to petitioners, is tantamount to the effects of
proscription without following the procedure under the law. [15] The petition of BAYAN-
ST, et al. in G.R. No. 179461 pleads the same allegations.

The Court cannot take judicial notice of the alleged tagging of petitioners.

Generally speaking, matters of judicial notice have three material

requisites: (1) the matter must be one of common and general
knowledge; (2) it must be well and authoritatively settled and not
doubtful or uncertain; and (3) it must be known to be within the limits of
the jurisdiction of the court. The principal guide in determining what facts
may be assumed to be judicially known is that of notoriety. Hence, it can
be said that judicial notice is limited to facts evidenced by public records
and facts of general notoriety. Moreover, a judicially noticed fact must be
one not subject to a reasonable dispute in that it is either: (1) generally
known within the territorial jurisdiction of the trial court; or (2) capable of
 accurate and ready determination by resorting to sources whose
accuracy cannot reasonably be questionable.

Things of common knowledge, of which courts take judicial matters

coming to the knowledge of men generally in the course of the ordinary
experiences of life, or they may be matters which are generally accepted
by mankind as true and are capable of ready and unquestioned
demonstration. Thus, facts which are universally known, and which may
be found in encyclopedias, dictionaries or other publications, are judicially
noticed, provided, they are of such universal notoriety and so generally
understood that they may be regarded as forming part of the common
knowledge of every person. As the common knowledge of man ranges far
and wide, a wide variety of particular facts have been judicially noticed as
being matters of common knowledge. But a court cannot take judicial
notice of any fact which, in part, is dependent on the existence or
non-existence of a fact of which the court has no constructive
knowledge.[16] (emphasis and underscoring supplied.)

No ground was properly established by petitioners for the taking of judicial

notice.Petitioners apprehension is insufficient to substantiate their plea. That no specific
charge or proscription under RA 9372 has been filed against them, three years after its
effectivity, belies any claim of imminence of their perceived threat emanating from the
so-called tagging.

The same is true with petitioners KMU, NAFLU and CTUHR in G.R. No. 178554, who
merely harp as well on their supposed link to the CPP and NPA. They fail to
particularize how the implementation of specific provisions of RA 9372 would result in
direct injury to their organization and members.

While in our jurisdiction there is still no judicially declared terrorist organization, the
United States of America[17] (US) and the European Union[18] (EU) have both classified
the CPP, NPA and Abu Sayyaf Group as foreign terrorist organizations. The Court takes
note of the joint statement of Executive Secretary Eduardo Ermita and Justice Secretary
Raul Gonzales that the Arroyo Administration would adopt the US and EU classification
of the CPP and NPA as terrorist organizations.[19] Such statement
notwithstanding, there is yet to be filed before the courts an application to declare
the CPP and NPA organizations as domestic terrorist or outlawed organizations
under RA 9372. Again, RA 9372 has been in effect for three years now. From July
2007 up to the present, petitioner-organizations have conducted their activities fully and
freely without any threat of, much less an actual, prosecution or proscription under RA
9372.

Parenthetically, the Fourteenth Congress, in a resolution initiated by Party-list

Representatives Saturnino Ocampo, Teodoro Casio, Rafael Mariano and Luzviminda
Ilagan,[20] urged the government to resume peace negotiations with the NDF by
removing the impediments thereto, one of which is the adoption of designation of the
CPP and NPA by the US and EU as foreign terrorist organizations. Considering the
policy statement of the Aquino Administration[21] of resuming peace talks with the NDF,
the government is not imminently disposed to ask for the judicial proscription of the
CPP-NPA consortium and its allied organizations.

More important, there are other parties not before the Court with direct and specific
interests in the questions being raised.[22] Of recent development is the filing of
the first case for proscription under Section 17[23] of RA 9372 by the Department of
Justice before the Basilan Regional Trial Court against the Abu
[24]
Sayyaf Group. Petitioner-organizations do not in the least allege any link to the Abu
Sayyaf Group.

Some petitioners attempt, in vain though, to show the imminence of a prosecution under
RA 9372 by alluding to past rebellion charges against them.

In Ladlad v. Velasco,[25] the Court ordered the dismissal of rebellion charges filed in
2006 against then Party-List Representatives Crispin Beltran and Rafael Mariano of
Anakpawis, Liza Maza of GABRIELA, and Joel Virador, Teodoro Casio and Saturnino
Ocampo of Bayan Muna. Also named in the dismissed rebellion charges were
petitioners Rey Claro Casambre, Carolina Pagaduan-Araullo, Renato Reyes, Rita Baua,
Emerencia de Jesus and Danilo Ramos; and accused of being front organizations for
the Communist movement were petitioner-organizations KMU, BAYAN, GABRIELA,
PAMALAKAYA, KMP, KADAMAY, LFS and COURAGE.[26]

The dismissed rebellion charges, however, do not save the day for petitioners. For one,
those charges were filed in 2006, prior to the enactment of RA 9372, and dismissed by
this Court. For another, rebellion is defined and punished under the Revised Penal
Code. Prosecution for rebellion is not made more imminent by the enactment of RA
9372, nor does the enactment thereof make it easier to charge a person with rebellion,
its elements not having been altered.

Conversely, previously filed but dismissed rebellion charges bear no relation to

prospective charges under RA 9372. It cannot be overemphasized that three years after
the enactment of RA 9372, none of petitioners has been charged.

Petitioners IBP and CODAL in G.R. No. 179157 base their claim of locus standi on their
sworn duty to uphold the Constitution. The IBP zeroes in on Section 21 of RA 9372
directing it to render assistance to those arrested or detained under the law.

The mere invocation of the duty to preserve the rule of law does not, however, suffice to
clothe the IBP or any of its members with standing. [27] The IBP failed to sufficiently
demonstrate how its mandate under the assailed statute revolts against its constitutional
rights and duties. Moreover, both the IBP and CODAL have not pointed to even a single
arrest or detention effected under RA 9372.
Former Senator Ma. Ana Consuelo Madrigal, who claims to have been the subject of
political surveillance, also lacks locus standi. Prescinding from the veracity, let alone
legal basis, of the claim of political surveillance, the Court finds that she has not shown
even the slightest threat of being charged under RA 9372. Similarly lacking in locus
standi are former Senator Wigberto Taada and Senator Sergio Osmea III, who cite
their being respectively a human rights advocate and an oppositor to the passage of RA
9372. Outside these gratuitous statements, no concrete injury to them has been
pinpointed.

Petitioners Southern Hemisphere Engagement Network and Atty. Soliman Santos

Jr. in G.R. No. 178552 also conveniently state that the issues they raise are of
transcendental importance, which must be settled early and are of far-reaching
implications, without mention of any specific provision of RA 9372 under which they
have been charged, or may be charged. Mere invocation of human rights advocacy has
nowhere been held sufficient to clothe litigants with locus standi. Petitioners must show
an actual, or immediate danger of sustaining, direct injury as a result of the laws
enforcement. To rule otherwise would be to corrupt the settled doctrine of locus standi,
as every worthy cause is an interest shared by the general public.

Neither can locus standi be conferred upon individual petitioners

as taxpayers and citizens. A taxpayer suit is proper only when there is an exercise of
the spending or taxing power of Congress,[28] whereas citizen standing must rest on
direct and personal interest in the proceeding.[29]

RA 9372 is a penal statute and does not even provide for any appropriation from
Congress for its implementation, while none of the individual petitioner-citizens has
alleged any direct and personal interest in the implementation of the law.

It bears to stress that generalized interests, albeit accompanied by the assertion of a

public right, do not establish locus standi. Evidence of a direct and personal interest is
key.

Petitioners fail to present an actual case

or controversy

By constitutional fiat, judicial power operates only when there is an actual case or
controversy.

Section 1. The judicial power shall be vested in one Supreme Court and in
such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of jurisdiction on the part
of any branch or instrumentality of the Government.[30] (emphasis and
underscoring supplied.)
As early as Angara v. Electoral Commission,[31] the Court ruled that the power of judicial
review is limited to actual cases or controversies to be exercised after full opportunity of
argument by the parties. Any attempt at abstraction could only lead to dialectics and
barren legal questions and to sterile conclusions unrelated to actualities.
An actual case or controversy means an existing case or controversy that is appropriate
or ripe for determination, not conjectural or anticipatory, lest the decision of the court
would amount to an advisory opinion.[32]

Information Technology Foundation of the Philippines v. COMELEC[33] cannot be more

emphatic:

[C]ourts do not sit to adjudicate mere academic questions

to satisfy scholarly interest, however intellectually
challenging. The controversy must be justiciabledefinite and concrete,
touching on the legal relations of parties having adverse legal
interests. In other words, the pleadings must show an active
antagonistic assertion of a legal right, on the one hand, and a
denial thereof on the other hand; that is, it must concern a real and
not merely a theoretical question or issue. There ought to
be an actual and substantial controversyadmitting of specific relief
through a decree conclusive in nature, as distinguished from an
opinion advising what the law would be upon a hypothetical state of
facts. (Emphasis and underscoring supplied)

Thus, a petition to declare unconstitutional a law converting

the Municipality of Makati into a Highly Urbanized City was held to be premature as it
was tacked on uncertain, contingent events.[34] Similarly, a petition that fails to allege
that an application for a license to operate a radio or television station has been denied
or granted by the authorities does not present a justiciable controversy, and merely
wheedles the Court to rule on a hypothetical problem.[35]

The Court dismissed the petition in Philippine Press Institute v. Commission on

Elections[36] for failure to cite any specific affirmative action of the Commission on
Elections to implement the assailed resolution. It refused, in Abbas v. Commission on
Elections,[37] to rule on the religious freedom claim of the therein petitioners based
merely on a perceived potential conflict between the provisions of the Muslim Code and
those of the national law, there being no actual controversy between real litigants.

The list of cases denying claims resting on purely hypothetical or anticipatory grounds
goes on ad infinitum.

The Court is not unaware that a reasonable certainty of the occurrence of a perceived
threat to any constitutional interest
suffices to provide a basis for mounting a constitutional challenge. This, however, is
qualified by the requirement that there must be sufficient facts to enable the Court to
intelligently adjudicate the issues.[38]
Very recently, the US Supreme Court, in Holder v. Humanitarian Law Project,[39]allowed
the pre-enforcement review of a criminal statute, challenged on vagueness
grounds, since plaintiffs faced a credible threat of prosecution and should not be
required to await and undergo a criminal prosecution as the sole means of seeking
relief.[40] The plaintiffs therein filed an action before a federal court to assail the
constitutionality of the material support statute, 18 U.S.C. 2339B (a) (1), [41]proscribing
the provision of material support to organizations declared by the Secretary of State as
foreign terrorist organizations. They claimed that they intendedto provide support for the
humanitarian and political activities of two such organizations.

Prevailing American jurisprudence allows an adjudication on the merits when an

anticipatory petition clearly shows that the challenged prohibition forbids the
conduct or activity that a petitioner seeks to do, as there would then be a
justiciable controversy.[42]

Unlike the plaintiffs in Holder, however, herein petitioners have failed to show that the
challenged provisions of RA 9372 forbid constitutionally
protected conduct or activity that they seek to do. No demonstrable threat has been
established, much less a real and existing one.

Petitioners obscure allegations of sporadic surveillance and supposedly being

tagged as communist fronts in no way approximate a credible threat of
prosecution. From these allegations, the Court is being lured to render an advisory
opinion, which is not its function.[43]

Without any justiciable controversy, the petitions have become pleas for declaratory
relief, over which the Court has no original jurisdiction. Then again, declaratory actions
characterized by double contingency, where both the activity the petitioners intend to
undertake and the anticipated reaction to it of a public official are merely theorized, lie
beyond judicial review for lack of ripeness.[44]

The possibility of abuse in the implementation of RA 9372 does not avail to take the
present petitions out of the realm of the surreal and merely imagined. Such possibility is
not peculiar to RA 9372 since the exercise of any power granted by law may be
abused.[45] Allegations of abuse must be anchored on real events before courts may
step in to settle actual controversies involving rights which are legally demandable
and enforceable.

A facial invalidation of a statute is allowed only

in free speech cases, wherein certain rules of
constitutional litigation are rightly excepted
Petitioners assail for being intrinsically vague and impermissibly broad the definition of
the crime of terrorism[46] under RA 9372 in that terms like widespread and extraordinary
fear and panic among the populace and coerce the government to give in to an
unlawful demand are nebulous, leaving law enforcement agencies with no standard to
measure the prohibited acts.

Respondents, through the OSG, counter that the doctrines of void-for-vagueness and
overbreadth find no application in the present case since these doctrines apply only to
free speech cases; and that RA 9372 regulates conduct, not speech.

For a jurisprudentially guided understanding of these doctrines, it is imperative to outline

the schools of thought on whether the void-for-vagueness and overbreadth doctrines
are equally applicable grounds to assail a penal statute.

Respondents interpret recent jurisprudence as slanting toward the idea of limiting the
application of the two doctrines to free speech cases. They particularly cite Romualdez
v. Hon. Sandiganbayan[47] and Estrada v. Sandiganbayan.[48]

The Court clarifies.

At issue in Romualdez v. Sandiganbayan was whether the word intervene in Section

5[49] of the Anti-Graft and Corrupt Practices Act was intrinsically vague and
impermissibly broad. The Court stated that the overbreadth and the vagueness
doctrines have special application only to free-speech cases, and are not appropriate
for testing the validity of penal statutes.[50] It added that, at any rate, the challenged
provision, under which the therein petitioner was charged, is not vague.[51]

While in the subsequent case of Romualdez v. Commission on Elections,[52] the Court

stated that a facial invalidation of criminal statutes is not appropriate, it nonetheless
proceeded to conduct a vagueness analysis, and concluded that the therein subject
election offense[53] under the Voters Registration Act of 1996, with which the therein
petitioners were charged, is couched in precise language.[54]

The two Romualdez cases rely heavily on the Separate Opinion[55] of Justice Vicente V.
Mendoza in the Estrada case, where the Court found the Anti-Plunder Law (Republic
Act No. 7080) clear and free from ambiguity respecting the definition of the crime of
plunder.

The position taken by Justice Mendoza in Estrada relates these two doctrines to the
concept of a facial invalidation as opposed to an as-applied challenge. He basically
postulated that allegations that a penal statute is vague and overbroad do not justify a
facial review of its validity. The pertinent portion of the Concurring Opinion of Justice
Mendoza, which was quoted at length in the main Estrada decision, reads:
A facial challenge is allowed to be made to a vague statute and to
one which is overbroad because of possible "chilling effect" upon protected
speech. The theory is that "[w]hen statutes regulate or proscribe speech
and no readily apparent construction suggests itself as a vehicle for
rehabilitating the statutes in a single prosecution, the transcendent value to
all society of constitutionally protected expression is deemed to justify
allowing attacks on overly broad statutes with no requirement that the
person making the attack demonstrate that his own conduct could not be
regulated by a statute drawn with narrow specificity." The possible harm to
society in permitting some unprotected speech to go unpunished is
outweighed by the possibility that the protected speech of others may be
deterred and perceived grievances left to fester because of possible
inhibitory effects of overly broad statutes.

This rationale does not apply to penal statutes. Criminal statutes

have general in terrorem effect resulting from their very existence, and, if
facial challenge is allowed for this reason alone, the State may well be
prevented from enacting laws against socially harmful conduct. In the area
of criminal law, the law cannot take chances as in the area of free speech.

The overbreadth and vagueness doctrines then have special

application only to free speech cases. They are inapt for testing the
validity of penal statutes. As the U.S. Supreme Court put it, in an opinion by
Chief Justice Rehnquist, "we have not recognized an 'overbreadth' doctrine
outside the limited context of the First Amendment." In Broadrick v.
Oklahoma, the Court ruled that "claims of facial overbreadth have been
entertained in cases involving statutes which, by their terms, seek to
regulate only spoken words" and, again, that "overbreadth claims, if
entertained at all, have been curtailed when invoked against ordinary
criminal laws that are sought to be applied to protected conduct." For this
reason, it has been held that "a facial challenge to a legislative act is the
most difficult challenge to mount successfully, since the challenger must
establish that no set of circumstances exists under which the Act would be
valid." As for the vagueness doctrine, it is said that a litigant may challenge
a statute on its face only if it is vague in all its possible applications. "A
plaintiff who engages in some conduct that is clearly proscribed cannot
complain of the vagueness of the law as applied to the conduct of others."

In sum, the doctrines of strict scrutiny, overbreadth, and

vagueness are analytical tools developed for testing "on their faces"
statutes in free speech casesor, as they are called in American law, First
Amendment cases. They cannot be made to do service when what is
involved is a criminal statute. With respect to such statute, the established
rule is that "one to whom application of a statute is constitutional will not be
heard to attack the statute on the ground that impliedly it might also be
taken as applying to other persons or other situations in which its
application might be unconstitutional." As has been pointed out, "vagueness
challenges in the First Amendment context, like overbreadth challenges
typically produce facial invalidation, while statutes found vague as a
 matter of due process typically are invalidated [only] 'as applied' to a
particular defendant." Consequently, there is no basis for petitioner's
claim that this Court review the Anti-Plunder Law on its face and in its
entirety.

Indeed, "on its face" invalidation of statutes results in striking them

down entirely on the ground that they might be applied to parties not before
the Court whose activities are constitutionally protected. It constitutes a
departure from the case and controversy requirement of the Constitution
and permits decisions to be made without concrete factual settings and in
sterile abstract contexts. But, as the U.S. Supreme Court pointed out
in Younger v. Harris

[T]he task of analyzing a proposed statute, pinpointing

its deficiencies, and requiring correction of these deficiencies
before the statute is put into effect, is rarely if ever an
appropriate task for the judiciary. The combination of the
relative remoteness of the controversy, the impact on the
legislative process of the relief sought, and above all the
speculative and amorphous nature of the required line-by-line
analysis of detailed statutes, . . . ordinarily results in a kind of
case that is wholly unsatisfactory for deciding constitutional
questions, whichever way they might be decided.

For these reasons, "on its face" invalidation of statutes has been
described as "manifestly strong medicine," to be employed "sparingly and
only as a last resort," and is generally disfavored. In determining the
constitutionality of a statute, therefore, its provisions which are alleged to
have been violated in a case must be examined in the light of the conduct
with which the defendant is charged.[56] (Underscoring supplied.)

The confusion apparently stems from the interlocking relation of

the overbreadth and vagueness doctrines as grounds for a facial or as-
applied challenge against a penal statute (under a claim of violation of due process of
law) or a speech regulation (under a claim of abridgement of the freedom of speech and
cognate rights).

To be sure, the doctrine of vagueness and the doctrine of overbreadth do not operate
on the same plane.

A statute or act suffers from the defect of vagueness when it lacks comprehensible
standards that men of common intelligence must necessarily guess at its meaning and
differ as to its application. It is repugnant to the Constitution in two respects: (1) it
violates due process for failure to accord persons, especially the parties targeted by it,
fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled discretion in
carrying out its provisions and becomes an arbitrary flexing of the Government
muscle.[57] The overbreadth doctrine, meanwhile, decrees that a governmental purpose
to control or prevent activities constitutionally subject to state regulations may not be
achieved by means which sweep unnecessarily broadly and thereby invade the area of
protected freedoms.[58]

As distinguished from the vagueness doctrine, the overbreadth doctrine assumes that
individuals will understand what a statute prohibits and will accordingly refrain from that
behavior, even though some of it is protected.[59]

A facial challenge is likewise different from an as-applied challenge.

Distinguished from an as-applied challenge which considers only extant facts

affecting real litigants, a facial invalidation is an examination of the entire law,
pinpointing its flaws and defects, not only on the basis of its actual operation to the
parties, but also on the assumption or prediction that its very existence may cause
others not before the court to refrain from constitutionally protected speech or
activities.[60]

Justice Mendoza accurately phrased the subtitle[61] in his concurring opinion that the
vagueness and overbreadth doctrines, as grounds for a facial challenge, are not
applicable to penal laws. A litigant cannot thus successfully mount
a facialchallenge against a criminal statute on either vagueness or overbreadth
grounds.

The allowance of a facial challenge in free speech cases is justified by the aim to avert
the chilling effect on protected speech, the exercise of which should not at all times be
abridged.[62] As reflected earlier, this rationale is inapplicable to plain penal statutes that
generally bear an in terrorem effect in deterring socially harmful conduct.In fact, the
legislature may even forbid and penalize acts formerly considered innocent and lawful,
so long as it refrains from diminishing or dissuading the exercise of constitutionally
protected rights.[63]

The Court reiterated that there are critical limitations by which a criminal statute may be
challenged and underscored that an on-its-face invalidation of penal statutes x x x may
not be allowed.[64]

[T]he rule established in our jurisdiction is, only statutes on free speech,
religious freedom, and other fundamental rights may be facially
challenged. Under no case may ordinary penal statutes be subjected to
a facial challenge. The rationale is obvious. If a facial challenge to a penal
statute is permitted, the prosecution of crimes may be hampered. No
prosecution would be possible. A strong criticism against employing a facial
challenge in the case of penal statutes, if the same is allowed, would
effectively go against the grain of the doctrinal requirement of an existing
and concrete controversy before judicial power may be appropriately
 exercised. A facial challenge against a penal statute is, at best, amorphous
and speculative. It would, essentially, force the court to consider third
parties who are not before it. As I have said in my opposition to the
allowance of a facial challenge to attack penal statutes, such a test will
impair the States ability to deal with crime. If warranted, there would be
nothing that can hinder an accused from defeating the States power to
prosecute on a mere showing that, as applied to third parties, the penal
statute is vague or overbroad, notwithstanding that the law is clear as
applied to him.[65] (Emphasis and underscoring supplied)

It is settled, on the other hand, that the application of the overbreadth doctrine is
limited to a facial kind of challenge and, owing to the given rationale of a facial
challenge, applicable only to free speech cases.

By its nature, the overbreadth doctrine has to necessarily apply a facial type of
invalidation in order to plot areas of protected speech, inevitably almost always under
situations not before the court, that are impermissibly swept by the substantially
overbroad regulation. Otherwise stated, a statute cannot be properly analyzed for being
substantially overbroad if the court confines itself only to facts as applied to the litigants.

The most distinctive feature of the overbreadth technique is that it marks an

exception to some of the usual rules of constitutional litigation. Ordinarily, a
particular litigant claims that a statute is unconstitutional as applied to him
or her; if the litigant prevails, the courts carve away the unconstitutional
aspects of the law by invalidating its improper applications on a case to
case basis. Moreover, challengers to a law are not permitted to raise the
rights of third parties and can only assert their own interests. In overbreadth
analysis, those rules give way; challenges are permitted to raise the rights
of third parties; and the court invalidates the entire statute "on its face," not
merely "as applied for" so that the overbroad law becomes unenforceable
until a properly authorized court construes it more narrowly. The factor that
motivates courts to depart from the normal adjudicatory rules is the concern
with the "chilling;" deterrent effect of the overbroad statute on third parties
not courageous enough to bring suit. The Court assumes that an overbroad
laws "very existence may cause others not before the court to refrain from
constitutionally protected speech or expression." An overbreadth ruling is
designed to remove that deterrent effect on the speech of those third
parties.[66] (Emphasis in the original omitted; underscoring supplied.)

In restricting the overbreadth doctrine to free speech claims, the Court, in at least two
cases,[67] observed that the US Supreme Court has not recognized an overbreadth
doctrine outside the limited context of the First Amendment,[68] and that claims of facial
overbreadth have been entertained in cases involving statutes which, by their terms,
seek to regulate only spoken words.[69] In Virginia v. Hicks,[70] it was held that rarely, if
ever, will an overbreadth challenge succeed against a law or regulation that is not
specifically addressed to speech or speech-related conduct. Attacks on overly broad
statutes are justified by the transcendent value to all society of constitutionally protected
expression.[71]

Since a penal statute may only be assailed for

being vague as applied to petitioners, a limited
vagueness analysis of the definition of terrorism in
RA 9372 is legally impermissible absent an actual
or imminent charge against them

While Estrada did not apply the overbreadth doctrine, it did not preclude the operation of
the vagueness test on the Anti-Plunder Law as applied to the therein petitioner, finding,
however, that there was no basis to review the law on its face and in its entirety. [72] It
stressed that statutes found vague as a matter of due processtypically are invalidated
only 'as applied' to a particular defendant.[73]

American jurisprudence[74] instructs that vagueness challenges that do not involve the
First Amendment must be examined in light of the specific facts of the case at hand and
not with regard to the statute's facial validity.

For more than 125 years, the US Supreme Court has evaluated defendants claims that
criminal statutes are unconstitutionally vague, developing a doctrine hailed as among
the most important guarantees of liberty under law.[75]

In this jurisdiction, the void-for-vagueness doctrine asserted under the due process
clause has been utilized in examining the constitutionality of criminal statutes. In at least
three cases,[76] the Court brought the doctrine into play in analyzing an ordinance
penalizing the non-payment of municipal tax on fishponds, the crime of illegal
recruitment punishable under Article 132(b) of the Labor Code, and the vagrancy
provision under Article 202 (2) of the Revised Penal Code. Notably, the petitioners in
these three cases, similar to those in the two Romualdez and Estradacases, were
actually charged with the therein assailed penal statute, unlike in the present case.

There is no merit in the claim that RA 9372

regulates speech so as to permit a facial
analysis of its validity

From the definition of the crime of terrorism in the earlier cited Section 3 of RA 9372, the
following elements may be culled: (1) the offender commits an act punishable under any
of the cited provisions of the Revised Penal Code, or under any of the enumerated
special penal laws; (2) the commission of the predicate crime sows and creates a
condition of widespread and extraordinary fear and panic among the populace; and (3)
the offender is actuated by the desire to coerce the government to give in to an unlawful
demand.
In insisting on a facial challenge on the invocation that the law penalizes speech,
petitioners contend that the element of unlawful demand in the definition of
terrorism[77] must necessarily be transmitted through some form of expression protected
by the free speech clause.

The argument does not persuade. What the law seeks to penalize is conduct, not
speech.

Before a charge for terrorism may be filed under RA 9372, there must first be a
predicate crime actually committed to trigger the operation of the key qualifying phrases
in the other elements of the crime, including the coercion of the government to accede
to an unlawful demand. Given the presence of the first element, any attempt at singling
out or highlighting the communicative component of the prohibition cannot recategorize
the unprotected conduct into a protected speech.

Petitioners notion on the transmission of message is entirely inaccurate, as it unduly

focuses on just one particle of an element of the crime. Almost every commission of a
crime entails some mincing of words on the part of the offender like in declaring to
launch overt criminal acts against a victim, in haggling on the amount of ransom or
conditions, or in negotiating a deceitful transaction. An analogy in
one U.S. case[78]illustrated that the fact that the prohibition on discrimination in hiring on
the basis of race will require an employer to take down a sign reading White Applicants
Only hardly means that the law should be analyzed as one regulating speech rather
than conduct.
Utterances not elemental but inevitably incidental to the doing of the criminal conduct
alter neither the intent of the law to punish socially harmful conduct nor the essence of
the whole act as conduct and not speech. This holds true a fortiori in the present case
where the expression figures only as an inevitable incident of making the element of
coercion perceptible.

[I]t is true that the agreements and course of conduct here were as in most
instances brought about through speaking or writing. But it has never been
deemed an abridgement of freedom of speech or press to make a course of
conduct illegal merely because the conduct was, in part,
initiated, evidenced, or carried out by means of language, either spoken,
written, or printed. Such an expansive interpretation of the constitutional
guaranties of speech and press would make it practically impossible ever to
enforce laws against agreements in restraint of trade as well as many other
agreements and conspiracies deemed injurious to society. [79] (italics and
underscoring supplied)

Certain kinds of speech have been treated as unprotected conduct, because they
merely evidence a prohibited conduct.[80] Since speech is not involved here, the Court
cannot heed the call for a facial analysis.
IN FINE, Estrada and the other cited authorities engaged in a vagueness analysis of the
therein subject penal statute as applied to the therein petitioners inasmuch as they
were actually charged with the pertinent crimes challenged on vagueness grounds.The
Court in said cases, however, found no basis to review the assailed penal statute on its
face and in its entirety.

In Holder, on the other hand, the US Supreme Court allowed the pre-enforcement
review of a criminal statute, challenged on vagueness grounds, since the therein
plaintiffs faced a credible threat of prosecution and should not be required to await
and undergo a criminal prosecution as the sole means of seeking relief.

As earlier reflected, petitioners have established neither an actual charge nor a

credible threat of prosecution under RA 9372. Even a limited vagueness analysis of
the assailed definition of terrorism is thus legally impermissible. The Court reminds
litigants that judicial power neither contemplates speculative counseling on a statutes
future effect on hypothetical scenarios nor allows the courts to be used as an extension
of a failed legislative lobbying in Congress.
WHEREFORE, the petitions are DISMISSED.

SO ORDERED.
 EN BANC

G.R. No. 122846 January 20, 2009

WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA. MESA

TOURIST & DEVELOPMENT CORPORATION, Petitioners,
vs.
CITY OF MANILA, represented by DE CASTRO, MAYOR ALFREDO S.
LIM, Respondent.

DECISION

Tinga, J.:

With another city ordinance of Manila also principally involving the tourist district as
subject, the Court is confronted anew with the incessant clash between government
power and individual liberty in tandem with the archetypal tension between law and
morality.

In City of Manila v. Laguio, Jr.,1 the Court affirmed the nullification of a city ordinance
barring the operation of motels and inns, among other establishments, within the
Ermita-Malate area. The petition at bar assails a similarly-motivated city ordinance that
prohibits those same establishments from offering short-time admission, as well as pro-
rated or "wash up" rates for such abbreviated stays. Our earlier decision tested the city
ordinance against our sacred constitutional rights to liberty, due process and equal
protection of law. The same parameters apply to the present petition.

This Petition2 under Rule 45 of the Revised Rules on Civil Procedure, which seeks the
reversal of the Decision3 in C.A.-G.R. S.P. No. 33316 of the Court of Appeals,
challenges the validity of Manila City Ordinance No. 7774 entitled, "An Ordinance
Prohibiting Short-Time Admission, Short-Time Admission Rates, and Wash-Up Rate
Schemes in Hotels, Motels, Inns, Lodging Houses, Pension Houses, and Similar
Establishments in the City of Manila" (the Ordinance).

I.

The facts are as follows:

On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into law the
Ordinance.4 The Ordinance is reproduced in full, hereunder:

SECTION 1. Declaration of Policy. It is hereby the declared policy of the City

Government to protect the best interest, health and welfare, and the morality of its
constituents in general and the youth in particular.
SEC. 2. Title. This ordinance shall be known as "An Ordinance" prohibiting short time
admission in hotels, motels, lodging houses, pension houses and similar establishments
in the City of Manila.

SEC. 3. Pursuant to the above policy, short-time admission and rate [sic], wash-up rate
or other similarly concocted terms, are hereby prohibited in hotels, motels, inns, lodging
houses, pension houses and similar establishments in the City of Manila.

SEC. 4. Definition of Term[s]. Short-time admission shall mean admittance and charging
of room rate for less than twelve (12) hours at any given time or the renting out of rooms
more than twice a day or any other term that may be concocted by owners or managers
of said establishments but would mean the same or would bear the same meaning.

SEC. 5. Penalty Clause. Any person or corporation who shall violate any provision of
this ordinance shall upon conviction thereof be punished by a fine of Five Thousand
(₱5,000.00) Pesos or imprisonment for a period of not exceeding one (1) year or both
such fine and imprisonment at the discretion of the court; Provided, That in case of [a]
juridical person, the president, the manager, or the persons in charge of the operation
thereof shall be liable: Provided, further, That in case of subsequent conviction for the
same offense, the business license of the guilty party shall automatically be cancelled.

SEC. 6. Repealing Clause. Any or all provisions of City ordinances not consistent with
or contrary to this measure or any portion hereof are hereby deemed repealed.

SEC. 7. Effectivity. This ordinance shall take effect immediately upon approval.

Enacted by the city Council of Manila at its regular session today, November 10, 1992.

Approved by His Honor, the Mayor on December 3, 1992.

On December 15, 1992, the Malate Tourist and Development Corporation (MTDC) filed
a complaint for declaratory relief with prayer for a writ of preliminary injunction and/or
temporary restraining order ( TRO)5 with the Regional Trial Court (RTC) of Manila,
Branch 9 impleading as defendant, herein respondent City of Manila (the City)
represented by Mayor Lim.6 MTDC prayed that the Ordinance, insofar as it includes
motels and inns as among its prohibited establishments, be declared invalid and
unconstitutional. MTDC claimed that as owner and operator of the Victoria Court in
Malate, Manila it was authorized by Presidential Decree (P.D.) No. 259 to admit
customers on a short time basis as well as to charge customers wash up rates for stays
of only three hours.

On December 21, 1992, petitioners White Light Corporation (WLC), Titanium

Corporation (TC) and Sta. Mesa Tourist and Development Corporation (STDC) filed a
motion to intervene and to admit attached complaint-in-intervention7 on the ground that
the Ordinance directly affects their business interests as operators of drive-in-hotels and
motels in Manila.8 The three companies are components of the Anito Group of
Companies which owns and operates several hotels and motels in Metro Manila.9

On December 23, 1992, the RTC granted the motion to intervene.10 The RTC also
notified the Solicitor General of the proceedings pursuant to then Rule 64, Section 4 of
the Rules of Court. On the same date, MTDC moved to withdraw as plaintiff. 11

On December 28, 1992, the RTC granted MTDC's motion to withdraw.12 The RTC
issued a TRO on January 14, 1993, directing the City to cease and desist from
enforcing the Ordinance.13 The City filed an Answer dated January 22, 1993 alleging
that the Ordinance is a legitimate exercise of police power.14

On February 8, 1993, the RTC issued a writ of preliminary injunction ordering the city to
desist from the enforcement of the Ordinance.15 A month later, on March 8, 1993, the
Solicitor General filed his Comment arguing that the Ordinance is constitutional.

During the pre-trial conference, the WLC, TC and STDC agreed to submit the case for
decision without trial as the case involved a purely legal question. 16 On October 20,
1993, the RTC rendered a decision declaring the Ordinance null and void. The
dispositive portion of the decision reads:

WHEREFORE, in view of all the foregoing, [O]rdinance No. 7774 of the City of Manila is
hereby declared null and void.

Accordingly, the preliminary injunction heretofor issued is hereby made permanent.

SO ORDERED.17

The RTC noted that the ordinance "strikes at the personal liberty of the individual
guaranteed and jealously guarded by the Constitution." 18 Reference was made to the
provisions of the Constitution encouraging private enterprises and the incentive to
needed investment, as well as the right to operate economic enterprises. Finally, from
the observation that the illicit relationships the Ordinance sought to dissuade could
nonetheless be consummated by simply paying for a 12-hour stay, the RTC likened the
law to the ordinance annulled in Ynot v. Intermediate Appellate Court,19 where the
legitimate purpose of preventing indiscriminate slaughter of carabaos was sought to be
effected through an inter-province ban on the transport of carabaos and carabeef.

The City later filed a petition for review on certiorari with the Supreme Court.20 The
petition was docketed as G.R. No. 112471. However in a resolution dated January 26,
1994, the Court treated the petition as a petition for certiorari and referred the petition to
the Court of Appeals.21

Before the Court of Appeals, the City asserted that the Ordinance is a valid exercise of
police power pursuant to Section 458 (4)(iv) of the Local Government Code which
confers on cities, among other local government units, the power:
[To] regulate the establishment, operation and maintenance of cafes, restaurants,
beerhouses, hotels, motels, inns, pension houses, lodging houses and other similar
establishments, including tourist guides and transports.22

The Ordinance, it is argued, is also a valid exercise of the power of the City under
Article III, Section 18(kk) of the Revised Manila Charter, thus:

"to enact all ordinances it may deem necessary and proper for the sanitation and safety,
the furtherance of the prosperity and the promotion of the morality, peace, good order,
comfort, convenience and general welfare of the city and its inhabitants, and such
others as be necessary to carry into effect and discharge the powers and duties
conferred by this Chapter; and to fix penalties for the violation of ordinances which shall
not exceed two hundred pesos fine or six months imprisonment, or both such fine and
imprisonment for a single offense.23

Petitioners argued that the Ordinance is unconstitutional and void since it violates the
right to privacy and the freedom of movement; it is an invalid exercise of police power;
and it is an unreasonable and oppressive interference in their business.

The Court of Appeals reversed the decision of the RTC and affirmed the constitutionality
of the Ordinance.24 First, it held that the Ordinance did not violate the right to privacy or
the freedom of movement, as it only penalizes the owners or operators of
establishments that admit individuals for short time stays. Second, the virtually limitless
reach of police power is only constrained by having a lawful object obtained through a
lawful method. The lawful objective of the Ordinance is satisfied since it aims to curb
immoral activities. There is a lawful method since the establishments are still allowed to
operate. Third, the adverse effect on the establishments is justified by the well-being of
its constituents in general. Finally, as held in Ermita-Malate Motel Operators Association
v. City Mayor of Manila, liberty is regulated by law.

TC, WLC and STDC come to this Court via petition for review on certiorari. 25 In their
petition and Memorandum, petitioners in essence repeat the assertions they made
before the Court of Appeals. They contend that the assailed Ordinance is an invalid
exercise of police power.

II.

We must address the threshold issue of petitioners’ standing. Petitioners allege that as
owners of establishments offering "wash-up" rates, their business is being unlawfully
interfered with by the Ordinance. However, petitioners also allege that the equal
protection rights of their clients are also being interfered with. Thus, the crux of the
matter is whether or not these establishments have the requisite standing to plead for
protection of their patrons' equal protection rights.

Standing or locus standi is the ability of a party to demonstrate to the court sufficient
connection to and harm from the law or action challenged to support that party's
participation in the case. More importantly, the doctrine of standing is built on the
principle of separation of powers,26 sparing as it does unnecessary interference or
invalidation by the judicial branch of the actions rendered by its co-equal branches of
government.

The requirement of standing is a core component of the judicial system derived directly
from the Constitution.27 The constitutional component of standing doctrine incorporates
concepts which concededly are not susceptible of precise definition. 28 In this jurisdiction,
the extancy of "a direct and personal interest" presents the most obvious cause, as well
as the standard test for a petitioner's standing.29 In a similar vein, the United States
Supreme Court reviewed and elaborated on the meaning of the three constitutional
standing requirements of injury, causation, and redressability in Allen v. Wright.30

Nonetheless, the general rules on standing admit of several exceptions such as the
overbreadth doctrine, taxpayer suits, third party standing and, especially in the
Philippines, the doctrine of transcendental importance.31

For this particular set of facts, the concept of third party standing as an exception and
the overbreadth doctrine are appropriate. In Powers v. Ohio,32 the United States
Supreme Court wrote that: "We have recognized the right of litigants to bring actions on
behalf of third parties, provided three important criteria are satisfied: the litigant must
have suffered an ‘injury-in-fact,’ thus giving him or her a "sufficiently concrete interest" in
the outcome of the issue in dispute; the litigant must have a close relation to the third
party; and there must exist some hindrance to the third party's ability to protect his or
her own interests."33 Herein, it is clear that the business interests of the petitioners are
likewise injured by the Ordinance. They rely on the patronage of their customers for
their continued viability which appears to be threatened by the enforcement of the
Ordinance. The relative silence in constitutional litigation of such special interest groups
in our nation such as the American Civil Liberties Union in the United States may also
be construed as a hindrance for customers to bring suit.34

American jurisprudence is replete with examples where parties-in-interest were allowed

standing to advocate or invoke the fundamental due process or equal protection claims
of other persons or classes of persons injured by state action. In Griswold v.
Connecticut,35 the United States Supreme Court held that physicians had standing to
challenge a reproductive health statute that would penalize them as accessories as well
as to plead the constitutional protections available to their patients. The Court held that:

"The rights of husband and wife, pressed here, are likely to be diluted or adversely
affected unless those rights are considered in a suit involving those who have this kind
of confidential relation to them."36

An even more analogous example may be found in Craig v. Boren,37 wherein the United
States Supreme Court held that a licensed beverage vendor has standing to raise the
equal protection claim of a male customer challenging a statutory scheme prohibiting
the sale of beer to males under the age of 21 and to females under the age of 18. The
United States High Court explained that the vendors had standing "by acting as
advocates of the rights of third parties who seek access to their market or function." 38

Assuming arguendo that petitioners do not have a relationship with their patrons for the
former to assert the rights of the latter, the overbreadth doctrine comes into play. In
overbreadth analysis, challengers to government action are in effect permitted to raise
the rights of third parties. Generally applied to statutes infringing on the freedom of
speech, the overbreadth doctrine applies when a statute needlessly restrains even
constitutionally guaranteed rights.39 In this case, the petitioners claim that the Ordinance
makes a sweeping intrusion into the right to liberty of their clients. We can see that
based on the allegations in the petition, the Ordinance suffers from overbreadth.

We thus recognize that the petitioners have a right to assert the constitutional rights of
their clients to patronize their establishments for a "wash-rate" time frame.

III.

To students of jurisprudence, the facts of this case will recall to mind not only the
recent City of Manila ruling, but our 1967 decision in Ermita-Malate Hotel and Motel
Operations Association, Inc., v. Hon. City Mayor of Manila.40Ermita-Malate concerned
the City ordinance requiring patrons to fill up a prescribed form stating personal
information such as name, gender, nationality, age, address and occupation before they
could be admitted to a motel, hotel or lodging house. This earlier ordinance was
precisely enacted to minimize certain practices deemed harmful to public morals. A
purpose similar to the annulled ordinance in City of Manila which sought a blanket ban
on motels, inns and similar establishments in the Ermita-Malate area. However, the
constitutionality of the ordinance in Ermita-Malate was sustained by the Court.

The common thread that runs through those decisions and the case at bar goes beyond
the singularity of the localities covered under the respective ordinances. All three
ordinances were enacted with a view of regulating public morals including particular
illicit activity in transient lodging establishments. This could be described as the middle
case, wherein there is no wholesale ban on motels and hotels but the services offered
by these establishments have been severely restricted. At its core, this is another case
about the extent to which the State can intrude into and regulate the lives of its citizens.

The test of a valid ordinance is well established. A long line of decisions including City
of Manila has held that for an ordinance to be valid, it must not only be within the
corporate powers of the local government unit to enact and pass according to the
procedure prescribed by law, it must also conform to the following substantive
requirements: (1) must not contravene the Constitution or any statute; (2) must not be
unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but
may regulate trade; (5) must be general and consistent with public policy; and (6) must
not be unreasonable.41
The Ordinance prohibits two specific and distinct business practices, namely wash rate
admissions and renting out a room more than twice a day. The ban is evidently sought
to be rooted in the police power as conferred on local government units by the Local
Government Code through such implements as the general welfare clause.

A.

Police power, while incapable of an exact definition, has been purposely veiled in
general terms to underscore its comprehensiveness to meet all exigencies and provide
enough room for an efficient and flexible response as the conditions warrant. 42 Police
power is based upon the concept of necessity of the State and its corresponding right to
protect itself and its people.43 Police power has been used as justification for numerous
and varied actions by the State. These range from the regulation of dance halls, 44 movie
theaters,45 gas stations46 and cockpits.47 The awesome scope of police power is best
demonstrated by the fact that in its hundred or so years of presence in our nation’s legal
system, its use has rarely been denied.

The apparent goal of the Ordinance is to minimize if not eliminate the use of the
covered establishments for illicit sex, prostitution, drug use and alike. These goals, by
themselves, are unimpeachable and certainly fall within the ambit of the police power of
the State. Yet the desirability of these ends do not sanctify any and all means for their
achievement. Those means must align with the Constitution, and our emerging
sophisticated analysis of its guarantees to the people. The Bill of Rights stands as a
rebuke to the seductive theory of Macchiavelli, and, sometimes even, the political
majorities animated by his cynicism.

Even as we design the precedents that establish the framework for analysis of due
process or equal protection questions, the courts are naturally inhibited by a due
deference to the co-equal branches of government as they exercise their political
functions. But when we are compelled to nullify executive or legislative actions, yet
another form of caution emerges. If the Court were animated by the same passing
fancies or turbulent emotions that motivate many political decisions, judicial integrity is
compromised by any perception that the judiciary is merely the third political branch of
government. We derive our respect and good standing in the annals of history by acting
as judicious and neutral arbiters of the rule of law, and there is no surer way to that end
than through the development of rigorous and sophisticated legal standards through
which the courts analyze the most fundamental and far-reaching constitutional
questions of the day.

B.

The primary constitutional question that confronts us is one of due process, as

guaranteed under Section 1, Article III of the Constitution. Due process evades a
precise definition.48 The purpose of the guaranty is to prevent arbitrary governmental
encroachment against the life, liberty and property of individuals. The due process
guaranty serves as a protection against arbitrary regulation or seizure. Even
corporations and partnerships are protected by the guaranty insofar as their property is
concerned.

The due process guaranty has traditionally been interpreted as imposing two related but
distinct restrictions on government, "procedural due process" and "substantive due
process." Procedural due process refers to the procedures that the government must
follow before it deprives a person of life, liberty, or property.49 Procedural due process
concerns itself with government action adhering to the established process when it
makes an intrusion into the private sphere. Examples range from the form of notice
given to the level of formality of a hearing.

If due process were confined solely to its procedural aspects, there would arise absurd
situation of arbitrary government action, provided the proper formalities are followed.
Substantive due process completes the protection envisioned by the due process
clause. It inquires whether the government has sufficient justification for depriving a
person of life, liberty, or property.50

The question of substantive due process, moreso than most other fields of law, has
reflected dynamism in progressive legal thought tied with the expanded acceptance of
fundamental freedoms. Police power, traditionally awesome as it may be, is now
confronted with a more rigorous level of analysis before it can be upheld. The vitality
though of constitutional due process has not been predicated on the frequency with
which it has been utilized to achieve a liberal result for, after all, the libertarian ends
should sometimes yield to the prerogatives of the State. Instead, the due process
clause has acquired potency because of the sophisticated methodology that has
emerged to determine the proper metes and bounds for its application.

C.

The general test of the validity of an ordinance on substantive due process grounds is
best tested when assessed with the evolved footnote 4 test laid down by the U.S.
Supreme Court in U.S. v. Carolene Products.51 Footnote 4 of the Carolene Products
case acknowledged that the judiciary would defer to the legislature unless there is a
discrimination against a "discrete and insular" minority or infringement of a "fundamental
right."52 Consequently, two standards of judicial review were established: strict scrutiny
for laws dealing with freedom of the mind or restricting the political process, and the
rational basis standard of review for economic legislation.

A third standard, denominated as heightened or immediate scrutiny, was later adopted

by the U.S. Supreme Court for evaluating classifications based on gender 53 and
legitimacy.54 Immediate scrutiny was adopted by the U.S. Supreme Court in
Craig,55 after the Court declined to do so in Reed v. Reed.56 While the test may have
first been articulated in equal protection analysis, it has in the United States since been
applied in all substantive due process cases as well.
We ourselves have often applied the rational basis test mainly in analysis of equal
protection challenges.57 Using the rational basis examination, laws or ordinances are
upheld if they rationally further a legitimate governmental interest. 58 Under intermediate
review, governmental interest is extensively examined and the availability of less
restrictive measures is considered.59 Applying strict scrutiny, the focus is on the
presence of compelling, rather than substantial, governmental interest and on the
absence of less restrictive means for achieving that interest.

In terms of judicial review of statutes or ordinances, strict scrutiny refers to the standard
for determining the quality and the amount of governmental interest brought to justify
the regulation of fundamental freedoms.60 Strict scrutiny is used today to test the validity
of laws dealing with the regulation of speech, gender, or race as well as other
fundamental rights as expansion from its earlier applications to equal protection. 61 The
United States Supreme Court has expanded the scope of strict scrutiny to protect
fundamental rights such as suffrage,62 judicial access63and interstate travel.64

If we were to take the myopic view that an Ordinance should be analyzed strictly as to
its effect only on the petitioners at bar, then it would seem that the only restraint
imposed by the law which we are capacitated to act upon is the injury to property
sustained by the petitioners, an injury that would warrant the application of the most
deferential standard – the rational basis test. Yet as earlier stated, we recognize the
capacity of the petitioners to invoke as well the constitutional rights of their patrons –
those persons who would be deprived of availing short time access or wash-up rates to
the lodging establishments in question.

Viewed cynically, one might say that the infringed rights of these customers were are
trivial since they seem shorn of political consequence. Concededly, these are not the
sort of cherished rights that, when proscribed, would impel the people to tear up their
cedulas. Still, the Bill of Rights does not shelter gravitas alone. Indeed, it is those
"trivial" yet fundamental freedoms – which the people reflexively exercise any day
without the impairing awareness of their constitutional consequence – that accurately
reflect the degree of liberty enjoyed by the people. Liberty, as integrally incorporated as
a fundamental right in the Constitution, is not a Ten Commandments-style enumeration
of what may or what may not be done; but rather an atmosphere of freedom where the
people do not feel labored under a Big Brother presence as they interact with each
other, their society and nature, in a manner innately understood by them as inherent,
without doing harm or injury to others.

D.

The rights at stake herein fall within the same fundamental rights to liberty which we
upheld in City of Manila v. Hon. Laguio, Jr. We expounded on that most primordial of
rights, thus:

Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include

"the right to exist and the right to be free from arbitrary restraint or servitude. The term
cannot be dwarfed into mere freedom from physical restraint of the person of the citizen,
but is deemed to embrace the right of man to enjoy the facilities with which he has been
endowed by his Creator, subject only to such restraint as are necessary for the common
welfare."[65] In accordance with this case, the rights of the citizen to be free to use his
faculties in all lawful ways; to live and work where he will; to earn his livelihood by any
lawful calling; and to pursue any avocation are all deemed embraced in the concept of
liberty.[66]

The U.S. Supreme Court in the case of Roth v. Board of Regents, sought to clarify the
meaning of "liberty." It said:

While the Court has not attempted to define with exactness the liberty . . . guaranteed
[by the Fifth and Fourteenth Amendments], the term denotes not merely freedom from
bodily restraint but also the right of the individual to contract, to engage in any of the
common occupations of life, to acquire useful knowledge, to marry, establish a home
and bring up children, to worship God according to the dictates of his own conscience,
and generally to enjoy those privileges long recognized . . . as essential to the orderly
pursuit of happiness by free men. In a Constitution for a free people, there can be no
doubt that the meaning of "liberty" must be broad indeed. 67 [Citations omitted]

It cannot be denied that the primary animus behind the ordinance is the curtailment of
sexual behavior. The City asserts before this Court that the subject establishments
"have gained notoriety as venue of ‘prostitution, adultery and fornications’ in Manila
since they ‘provide the necessary atmosphere for clandestine entry, presence and exit
and thus became the ‘ideal haven for prostitutes and thrill-seekers.’"68 Whether or not
this depiction of a mise-en-scene of vice is accurate, it cannot be denied that legitimate
sexual behavior among willing married or consenting single adults which is
constitutionally protected69 will be curtailed as well, as it was in the City of Manila case.
Our holding therein retains significance for our purposes:

The concept of liberty compels respect for the individual whose claim to privacy and
interference demands respect. As the case of Morfe v. Mutuc, borrowing the words of
Laski, so very aptly stated:

Man is one among many, obstinately refusing reduction to unity. His separateness, his
isolation, are indefeasible; indeed, they are so fundamental that they are the basis on
which his civic obligations are built. He cannot abandon the consequences of his
isolation, which are, broadly speaking, that his experience is private, and the will built
out of that experience personal to himself. If he surrenders his will to others, he
surrenders himself. If his will is set by the will of others, he ceases to be a master of
himself. I cannot believe that a man no longer a master of himself is in any real sense
free.

Indeed, the right to privacy as a constitutional right was recognized in Morfe, the
invasion of which should be justified by a compelling state interest. Morfe accorded
recognition to the right to privacy independently of its identification with liberty; in itself it
is fully deserving of constitutional protection. Governmental powers should stop short of
certain intrusions into the personal life of the citizen.70

We cannot discount other legitimate activities which the Ordinance would proscribe or
impair. There are very legitimate uses for a wash rate or renting the room out for more
than twice a day. Entire families are known to choose pass the time in a motel or hotel
whilst the power is momentarily out in their homes. In transit passengers who wish to
wash up and rest between trips have a legitimate purpose for abbreviated stays in
motels or hotels. Indeed any person or groups of persons in need of comfortable private
spaces for a span of a few hours with purposes other than having sex or using illegal
drugs can legitimately look to staying in a motel or hotel as a convenient alternative.

E.

That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a
product and the petitioners of lucrative business ties in with another constitutional
requisite for the legitimacy of the Ordinance as a police power measure. It must appear
that the interests of the public generally, as distinguished from those of a particular
class, require an interference with private rights and the means must be reasonably
necessary for the accomplishment of the purpose and not unduly oppressive of private
rights.71 It must also be evident that no other alternative for the accomplishment of the
purpose less intrusive of private rights can work. More importantly, a reasonable relation
must exist between the purposes of the measure and the means employed for its
accomplishment, for even under the guise of protecting the public interest, personal
rights and those pertaining to private property will not be permitted to be arbitrarily
invaded.72

Lacking a concurrence of these requisites, the police measure shall be struck down as
an arbitrary intrusion into private rights. As held in Morfe v. Mutuc, the exercise of police
power is subject to judicial review when life, liberty or property is affected. 73 However,
this is not in any way meant to take it away from the vastness of State police power
whose exercise enjoys the presumption of validity.74

Similar to the Comelec resolution requiring newspapers to donate advertising space to

candidates, this Ordinance is a blunt and heavy instrument.75 The Ordinance makes no
distinction between places frequented by patrons engaged in illicit activities and patrons
engaged in legitimate actions. Thus it prevents legitimate use of places where illicit
activities are rare or even unheard of. A plain reading of section 3 of the Ordinance
shows it makes no classification of places of lodging, thus deems them all susceptible to
illicit patronage and subject them without exception to the unjustified prohibition.

The Court has professed its deep sentiment and tenderness of the Ermita-Malate area,
its longtime home,76 and it is skeptical of those who wish to depict our capital city – the
Pearl of the Orient – as a modern-day Sodom or Gomorrah for the Third World set.
Those still steeped in Nick Joaquin-dreams of the grandeur of Old Manila will have to
accept that Manila like all evolving big cities, will have its problems. Urban decay is a
fact of mega cities such as Manila, and vice is a common problem confronted by the
modern metropolis wherever in the world. The solution to such perceived decay is not to
prevent legitimate businesses from offering a legitimate product. Rather, cities revive
themselves by offering incentives for new businesses to sprout up thus attracting the
dynamism of individuals that would bring a new grandeur to Manila.

The behavior which the Ordinance seeks to curtail is in fact already prohibited and could
in fact be diminished simply by applying existing laws. Less intrusive measures such as
curbing the proliferation of prostitutes and drug dealers through active police work would
be more effective in easing the situation. So would the strict enforcement of existing
laws and regulations penalizing prostitution and drug use. These measures would have
minimal intrusion on the businesses of the petitioners and other legitimate merchants.
Further, it is apparent that the Ordinance can easily be circumvented by merely paying
the whole day rate without any hindrance to those engaged in illicit activities. Moreover,
drug dealers and prostitutes can in fact collect "wash rates" from their clientele by
charging their customers a portion of the rent for motel rooms and even apartments.

IV.

We reiterate that individual rights may be adversely affected only to the extent that may
fairly be required by the legitimate demands of public interest or public welfare. The
State is a leviathan that must be restrained from needlessly intruding into the lives of its
citizens. However well-intentioned the Ordinance may be, it is in effect an arbitrary and
whimsical intrusion into the rights of the establishments as well as their patrons. The
Ordinance needlessly restrains the operation of the businesses of the petitioners as well
as restricting the rights of their patrons without sufficient justification. The Ordinance
rashly equates wash rates and renting out a room more than twice a day with immorality
without accommodating innocuous intentions.

The promotion of public welfare and a sense of morality among citizens deserves the
full endorsement of the judiciary provided that such measures do not trample rights this
Court is sworn to protect.77 The notion that the promotion of public morality is a function
of the State is as old as Aristotle.78 The advancement of moral relativism as a school of
philosophy does not de-legitimize the role of morality in law, even if it may foster wider
debate on which particular behavior to penalize. It is conceivable that a society with
relatively little shared morality among its citizens could be functional so long as the
pursuit of sharply variant moral perspectives yields an adequate accommodation of
different interests.79

To be candid about it, the oft-quoted American maxim that "you cannot legislate
morality" is ultimately illegitimate as a matter of law, since as explained by Calabresi,
that phrase is more accurately interpreted as meaning that efforts to legislate morality
will fail if they are widely at variance with public attitudes about right and wrong. 80 Our
penal laws, for one, are founded on age-old moral traditions, and as long as there are
widely accepted distinctions between right and wrong, they will remain so oriented.
Yet the continuing progression of the human story has seen not only the acceptance of
the right-wrong distinction, but also the advent of fundamental liberties as the key to the
enjoyment of life to the fullest. Our democracy is distinguished from non-free societies
not with any more extensive elaboration on our part of what is moral and immoral, but
from our recognition that the individual liberty to make the choices in our lives is innate,
and protected by the State. Independent and fair-minded judges themselves are under
a moral duty to uphold the Constitution as the embodiment of the rule of law, by reason
of their expression of consent to do so when they take the oath of office, and because
they are entrusted by the people to uphold the law.81

Even as the implementation of moral norms remains an indispensable complement to

governance, that prerogative is hardly absolute, especially in the face of the norms of
due process of liberty. And while the tension may often be left to the courts to relieve, it
is possible for the government to avoid the constitutional conflict by employing more
judicious, less drastic means to promote morality.

WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals

is REVERSED, and the Decision of the Regional Trial Court of Manila, Branch 9,
is REINSTATED. Ordinance No. 7774 is hereby declared UNCONSTITUTIONAL. No
pronouncement as to costs.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 166715 August 14, 2008

ABAKADA GURO PARTY LIST (formerly AASJS)1 OFFICERS/MEMBERS SAMSON

S. ALCANTARA, ED VINCENT S. ALBANO, ROMEO R. ROBISO, RENE B.
GOROSPE and EDWIN R. SANDOVAL, petitioners,
vs.
HON. CESAR V. PURISIMA, in his capacity as Secretary of Finance, HON.
GUILLERMO L. PARAYNO, JR., in his capacity as Commissioner of the Bureau of
Internal Revenue, and HON. ALBERTO D. LINA, in his Capacity as Commissioner
of Bureau of Customs, respondents.

DECISION

CORONA, J.:

This petition for prohibition1 seeks to prevent respondents from implementing and
enforcing Republic Act (RA) 93352(Attrition Act of 2005).

RA 9335 was enacted to optimize the revenue-generation capability and collection of

the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC). The law
intends to encourage BIR and BOC officials and employees to exceed their revenue
targets by providing a system of rewards and sanctions through the creation of a
Rewards and Incentives Fund (Fund) and a Revenue Performance Evaluation Board
(Board).3 It covers all officials and employees of the BIR and the BOC with at least six
months of service, regardless of employment status.4

The Fund is sourced from the collection of the BIR and the BOC in excess of their
revenue targets for the year, as determined by the Development Budget and
Coordinating Committee (DBCC). Any incentive or reward is taken from the fund and
allocated to the BIR and the BOC in proportion to their contribution in the excess
collection of the targeted amount of tax revenue.5

The Boards in the BIR and the BOC are composed of the Secretary of the Department
of Finance (DOF) or his/her Undersecretary, the Secretary of the Department of Budget
and Management (DBM) or his/her Undersecretary, the Director General of the National
Economic Development Authority (NEDA) or his/her Deputy Director General, the
Commissioners of the BIR and the BOC or their Deputy Commissioners, two
representatives from the rank-and-file employees and a representative from the officials
nominated by their recognized organization.6
Each Board has the duty to (1) prescribe the rules and guidelines for the allocation,
distribution and release of the Fund; (2) set criteria and procedures for removing from
the service officials and employees whose revenue collection falls short of the target; (3)
terminate personnel in accordance with the criteria adopted by the Board; (4) prescribe
a system for performance evaluation; (5) perform other functions, including the issuance
of rules and regulations and (6) submit an annual report to Congress.7

The DOF, DBM, NEDA, BIR, BOC and the Civil Service Commission (CSC) were
tasked to promulgate and issue the implementing rules and regulations of RA 9335, 8 to
be approved by a Joint Congressional Oversight Committee created for such purpose. 9

Petitioners, invoking their right as taxpayers filed this petition challenging the
constitutionality of RA 9335, a tax reform legislation. They contend that, by establishing
a system of rewards and incentives, the law "transform[s] the officials and employees of
the BIR and the BOC into mercenaries and bounty hunters" as they will do their best
only in consideration of such rewards. Thus, the system of rewards and incentives
invites corruption and undermines the constitutionally mandated duty of these officials
and employees to serve the people with utmost responsibility, integrity, loyalty and
efficiency.

Petitioners also claim that limiting the scope of the system of rewards and incentives
only to officials and employees of the BIR and the BOC violates the constitutional
guarantee of equal protection. There is no valid basis for classification or distinction as
to why such a system should not apply to officials and employees of all other
government agencies.

In addition, petitioners assert that the law unduly delegates the power to fix revenue
targets to the President as it lacks a sufficient standard on that matter. While Section
7(b) and (c) of RA 9335 provides that BIR and BOC officials may be dismissed from the
service if their revenue collections fall short of the target by at least 7.5%, the law does
not, however, fix the revenue targets to be achieved. Instead, the fixing of revenue
targets has been delegated to the President without sufficient standards. It will therefore
be easy for the President to fix an unrealistic and unattainable target in order to dismiss
BIR or BOC personnel.

Finally, petitioners assail the creation of a congressional oversight committee on the

ground that it violates the doctrine of separation of powers. While the legislative function
is deemed accomplished and completed upon the enactment and approval of the law,
the creation of the congressional oversight committee permits legislative participation in
the implementation and enforcement of the law.

In their comment, respondents, through the Office of the Solicitor General, question the
petition for being premature as there is no actual case or controversy yet. Petitioners
have not asserted any right or claim that will necessitate the exercise of this Court’s
jurisdiction. Nevertheless, respondents acknowledge that public policy requires the
resolution of the constitutional issues involved in this case. They assert that the
allegation that the reward system will breed mercenaries is mere speculation and does
not suffice to invalidate the law. Seen in conjunction with the declared objective of RA
9335, the law validly classifies the BIR and the BOC because the functions they perform
are distinct from those of the other government agencies and instrumentalities.
Moreover, the law provides a sufficient standard that will guide the executive in the
implementation of its provisions. Lastly, the creation of the congressional oversight
committee under the law enhances, rather than violates, separation of powers. It
ensures the fulfillment of the legislative policy and serves as a check to any over-
accumulation of power on the part of the executive and the implementing agencies.

After a careful consideration of the conflicting contentions of the parties, the Court finds
that petitioners have failed to overcome the presumption of constitutionality in favor of
RA 9335, except as shall hereafter be discussed.

Actual Case And Ripeness

An actual case or controversy involves a conflict of legal rights, an assertion of opposite

legal claims susceptible of judicial adjudication.10 A closely related requirement is
ripeness, that is, the question must be ripe for adjudication. And a constitutional
question is ripe for adjudication when the governmental act being challenged has a
direct adverse effect on the individual challenging it.11 Thus, to be ripe for judicial
adjudication, the petitioner must show a personal stake in the outcome of the case or an
injury to himself that can be redressed by a favorable decision of the Court. 12

In this case, aside from the general claim that the dispute has ripened into a judicial
controversy by the mere enactment of the law even without any further overt
act,13 petitioners fail either to assert any specific and concrete legal claim or to
demonstrate any direct adverse effect of the law on them. They are unable to show a
personal stake in the outcome of this case or an injury to themselves. On this account,
their petition is procedurally infirm.

This notwithstanding, public interest requires the resolution of the constitutional issues
raised by petitioners. The grave nature of their allegations tends to cast a cloud on the
presumption of constitutionality in favor of the law. And where an action of the legislative
branch is alleged to have infringed the Constitution, it becomes not only the right but in
fact the duty of the judiciary to settle the dispute.14

Accountability of
Public Officers

Section 1, Article 11 of the Constitution states:

Sec. 1. Public office is a public trust. Public officers and employees must at all
times be accountable to the people, serve them with utmost responsibility,
integrity, loyalty, and efficiency, act with patriotism, and justice, and lead modest
lives.
Public office is a public trust. It must be discharged by its holder not for his own
personal gain but for the benefit of the public for whom he holds it in trust. By
demanding accountability and service with responsibility, integrity, loyalty, efficiency,
patriotism and justice, all government officials and employees have the duty to be
responsive to the needs of the people they are called upon to serve.

Public officers enjoy the presumption of regularity in the performance of their duties.
This presumption necessarily obtains in favor of BIR and BOC officials and employees.
RA 9335 operates on the basis thereof and reinforces it by providing a system of
rewards and sanctions for the purpose of encouraging the officials and employees of
the BIR and the BOC to exceed their revenue targets and optimize their revenue-
generation capability and collection.15

The presumption is disputable but proof to the contrary is required to rebut it. It cannot
be overturned by mere conjecture or denied in advance (as petitioners would have the
Court do) specially in this case where it is an underlying principle to advance a declared
public policy.

Petitioners’ claim that the implementation of RA 9335 will turn BIR and BOC officials
and employees into "bounty hunters and mercenaries" is not only without any factual
and legal basis; it is also purely speculative.

A law enacted by Congress enjoys the strong presumption of constitutionality. To justify

its nullification, there must be a clear and unequivocal breach of the Constitution, not a
doubtful and equivocal one.16 To invalidate RA 9335 based on petitioners’ baseless
supposition is an affront to the wisdom not only of the legislature that passed it but also
of the executive which approved it.

Public service is its own reward. Nevertheless, public officers may by law be rewarded
for exemplary and exceptional performance. A system of incentives for exceeding the
set expectations of a public office is not anathema to the concept of public
accountability. In fact, it recognizes and reinforces dedication to duty, industry,
efficiency and loyalty to public service of deserving government personnel.

In United States v. Matthews,17 the U.S. Supreme Court validated a law which awards
to officers of the customs as well as other parties an amount not exceeding one-half of
the net proceeds of forfeitures in violation of the laws against smuggling.
Citing Dorsheimer v. United States,18 the U.S. Supreme Court said:

The offer of a portion of such penalties to the collectors is to stimulate and

reward their zeal and industry in detecting fraudulent attempts to evade payment
of duties and taxes.

In the same vein, employees of the BIR and the BOC may by law be entitled to a reward
when, as a consequence of their zeal in the enforcement of tax and customs laws, they
exceed their revenue targets. In addition, RA 9335 establishes safeguards to ensure
that the reward will not be claimed if it will be either the fruit of "bounty hunting or
mercenary activity" or the product of the irregular performance of official duties. One of
these precautionary measures is embodied in Section 8 of the law:

SEC. 8. Liability of Officials, Examiners and Employees of the BIR and the BOC.
– The officials, examiners, and employees of the [BIR] and the [BOC] who violate
this Act or who are guilty of negligence, abuses or acts of malfeasance or
misfeasance or fail to exercise extraordinary diligence in the performance of their
duties shall be held liable for any loss or injury suffered by any business
establishment or taxpayer as a result of such violation, negligence, abuse,
malfeasance, misfeasance or failure to exercise extraordinary diligence.

Equal Protection

Equality guaranteed under the equal protection clause is equality under the same
conditions and among persons similarly situated; it is equality among equals, not
similarity of treatment of persons who are classified based on substantial differences in
relation to the object to be accomplished.19 When things or persons are different in fact
or circumstance, they may be treated in law differently. In Victoriano v. Elizalde Rope
Workers’ Union,20 this Court declared:

The guaranty of equal protection of the laws is not a guaranty of equality in the
application of the laws upon all citizens of the [S]tate. It is not, therefore, a
requirement, in order to avoid the constitutional prohibition against inequality, that
every man, woman and child should be affected alike by a statute. Equality of
operation of statutes does not mean indiscriminate operation on persons merely
as such, but on persons according to the circumstances surrounding them. It
guarantees equality, not identity of rights. The Constitution does not require
that things which are different in fact be treated in law as though they were
the same. The equal protection clause does not forbid discrimination as to
things that are different. It does not prohibit legislation which is limited
either in the object to which it is directed or by the territory within which it is to
operate.

The equal protection of the laws clause of the Constitution allows classification.
Classification in law, as in the other departments of knowledge or practice, is the
grouping of things in speculation or practice because they agree with one
another in certain particulars. A law is not invalid because of simple inequality.
The very idea of classification is that of inequality, so that it goes without saying
that the mere fact of inequality in no manner determines the matter of
constitutionality. All that is required of a valid classification is that it be
reasonable, which means that the classification should be based on
substantial distinctions which make for real differences, that it must be
germane to the purpose of the law; that it must not be limited to existing
conditions only; and that it must apply equally to each member of the
class. This Court has held that the standard is satisfied if the classification or
 distinction is based on a reasonable foundation or rational basis and is not
palpably arbitrary.

In the exercise of its power to make classifications for the purpose of enacting
laws over matters within its jurisdiction, the state is recognized as enjoying a
wide range of discretion. It is not necessary that the classification be based on
scientific or marked differences of things or in their relation. Neither is it
necessary that the classification be made with mathematical nicety. Hence,
legislative classification may in many cases properly rest on narrow distinctions,
for the equal protection guaranty does not preclude the legislature from
recognizing degrees of evil or harm, and legislation is addressed to evils as they
may appear.21 (emphasis supplied)

The equal protection clause recognizes a valid classification, that is, a classification that
has a reasonable foundation or rational basis and not arbitrary.22 With respect to RA
9335, its expressed public policy is the optimization of the revenue-generation capability
and collection of the BIR and the BOC.23 Since the subject of the law is the revenue-
generation capability and collection of the BIR and the BOC, the incentives and/or
sanctions provided in the law should logically pertain to the said agencies. Moreover,
the law concerns only the BIR and the BOC because they have the common distinct
primary function of generating revenues for the national government through the
collection of taxes, customs duties, fees and charges.

The BIR performs the following functions:

Sec. 18. The Bureau of Internal Revenue. – The Bureau of Internal Revenue,
which shall be headed by and subject to the supervision and control of the
Commissioner of Internal Revenue, who shall be appointed by the President
upon the recommendation of the Secretary [of the DOF], shall have the following
functions:

(1) Assess and collect all taxes, fees and charges and account for all
revenues collected;

(2) Exercise duly delegated police powers for the proper performance of its
functions and duties;

(3) Prevent and prosecute tax evasions and all other illegal economic activities;

(4) Exercise supervision and control over its constituent and subordinate units;
and

(5) Perform such other functions as may be provided by law.24

xxx xxx xxx (emphasis supplied)

On the other hand, the BOC has the following functions:

Sec. 23. The Bureau of Customs. – The Bureau of Customs which shall be
headed and subject to the management and control of the Commissioner of
Customs, who shall be appointed by the President upon the recommendation of
the Secretary[of the DOF] and hereinafter referred to as Commissioner, shall
have the following functions:

(1) Collect custom duties, taxes and the corresponding fees, charges and
penalties;

(2) Account for all customs revenues collected;

(3) Exercise police authority for the enforcement of tariff and customs laws;

(4) Prevent and suppress smuggling, pilferage and all other economic frauds
within all ports of entry;

(5) Supervise and control exports, imports, foreign mails and the clearance of
vessels and aircrafts in all ports of entry;

(6) Administer all legal requirements that are appropriate;

(7) Prevent and prosecute smuggling and other illegal activities in all ports under
its jurisdiction;

(8) Exercise supervision and control over its constituent units;

(9) Perform such other functions as may be provided by law.25

xxx xxx xxx (emphasis supplied)

Both the BIR and the BOC are bureaus under the DOF. They principally perform the
special function of being the instrumentalities through which the State exercises one of
its great inherent functions – taxation. Indubitably, such substantial distinction is
germane and intimately related to the purpose of the law. Hence, the classification and
treatment accorded to the BIR and the BOC under RA 9335 fully satisfy the demands of
equal protection.

Undue Delegation

Two tests determine the validity of delegation of legislative power: (1) the completeness
test and (2) the sufficient standard test. A law is complete when it sets forth therein the
policy to be executed, carried out or implemented by the delegate. 26 It lays down a
sufficient standard when it provides adequate guidelines or limitations in the law to map
out the boundaries of the delegate’s authority and prevent the delegation from running
riot.27 To be sufficient, the standard must specify the limits of the delegate’s authority,
announce the legislative policy and identify the conditions under which it is to be
implemented.28

RA 9335 adequately states the policy and standards to guide the President in fixing
revenue targets and the implementing agencies in carrying out the provisions of the law.
Section 2 spells out the policy of the law:

SEC. 2. Declaration of Policy. – It is the policy of the State to optimize the

revenue-generation capability and collection of the Bureau of Internal Revenue
(BIR) and the Bureau of Customs (BOC) by providing for a system of rewards
and sanctions through the creation of a Rewards and Incentives Fund and a
Revenue Performance Evaluation Board in the above agencies for the purpose
of encouraging their officials and employees to exceed their revenue targets.

Section 4 "canalized within banks that keep it from overflowing"29 the delegated power
to the President to fix revenue targets:

SEC. 4. Rewards and Incentives Fund. – A Rewards and Incentives Fund,

hereinafter referred to as the Fund, is hereby created, to be sourced from the
collection of the BIR and the BOC in excess of their respective revenue targets
of the year, as determined by the Development Budget and Coordinating
Committee (DBCC), in the following percentages:

Excess of Collection of the Percent (%) of the Excess Collection

Excess the Revenue to Accrue to the Fund
Targets
30% or below – 15%
More than 30% – 15% of the first 30% plus 20% of the
remaining excess

The Fund shall be deemed automatically appropriated the year immediately

following the year when the revenue collection target was exceeded and shall be
released on the same fiscal year.

Revenue targets shall refer to the original estimated revenue collection

expected of the BIR and the BOC for a given fiscal year as stated in the
Budget of Expenditures and Sources of Financing (BESF) submitted by the
President to Congress. The BIR and the BOC shall submit to the DBCC the
distribution of the agencies’ revenue targets as allocated among its revenue
districts in the case of the BIR, and the collection districts in the case of the BOC.

xxx xxx xxx (emphasis supplied)

Revenue targets are based on the original estimated revenue collection expected
respectively of the BIR and the BOC for a given fiscal year as approved by the DBCC
and stated in the BESF submitted by the President to Congress. 30 Thus, the
determination of revenue targets does not rest solely on the President as it also
undergoes the scrutiny of the DBCC.

On the other hand, Section 7 specifies the limits of the Board’s authority and identifies
the conditions under which officials and employees whose revenue collection falls short
of the target by at least 7.5% may be removed from the service:

SEC. 7. Powers and Functions of the Board. – The Board in the agency shall
have the following powers and functions:

xxx xxx xxx

(b) To set the criteria and procedures for removing from service officials and
employees whose revenue collection falls short of the target by at least
seven and a half percent (7.5%), with due consideration of all relevant
factors affecting the level of collection as provided in the rules and regulations
promulgated under this Act, subject to civil service laws, rules and
regulations and compliance with substantive and procedural due process:
Provided, That the following exemptions shall apply:

1. Where the district or area of responsibility is newly-created, not

exceeding two years in operation, as has no historical record of collection
performance that can be used as basis for evaluation; and

2. Where the revenue or customs official or employee is a recent

transferee in the middle of the period under consideration unless the
transfer was due to nonperformance of revenue targets or potential
nonperformance of revenue targets: Provided, however, That when the
district or area of responsibility covered by revenue or customs officials or
employees has suffered from economic difficulties brought about by
natural calamities or force majeure or economic causes as may be
determined by the Board, termination shall be considered only after
careful and proper review by the Board.

(c) To terminate personnel in accordance with the criteria adopted in the

preceding paragraph: Provided, That such decision shall be immediately
executory: Provided, further, That the application of the criteria for the
separation of an official or employee from service under this Act shall be
without prejudice to the application of other relevant laws on accountability
of public officers and employees, such as the Code of Conduct and Ethical
Standards of Public Officers and Employees and the Anti-Graft and Corrupt
Practices Act;

xxx xxx xxx (emphasis supplied)

Clearly, RA 9335 in no way violates the security of tenure of officials and employees of
the BIR and the BOC. The guarantee of security of tenure only means that an employee
cannot be dismissed from the service for causes other than those provided by law and
only after due process is accorded the employee.31 In the case of RA 9335, it lays down
a reasonable yardstick for removal (when the revenue collection falls short of the target
by at least 7.5%) with due consideration of all relevant factors affecting the level of
collection. This standard is analogous to inefficiency and incompetence in the
performance of official duties, a ground for disciplinary action under civil service
laws.32 The action for removal is also subject to civil service laws, rules and regulations
and compliance with substantive and procedural due process.

At any rate, this Court has recognized the following as sufficient standards: "public
interest," "justice and equity," "public convenience and welfare" and "simplicity,
economy and welfare."33 In this case, the declared policy of optimization of the revenue-
generation capability and collection of the BIR and the BOC is infused with public
interest.

Separation Of Powers

Section 12 of RA 9335 provides:

SEC. 12. Joint Congressional Oversight Committee. – There is hereby created a

Joint Congressional Oversight Committee composed of seven Members from the
Senate and seven Members from the House of Representatives. The Members
from the Senate shall be appointed by the Senate President, with at least two
senators representing the minority. The Members from the House of
Representatives shall be appointed by the Speaker with at least two members
representing the minority. After the Oversight Committee will have approved the
implementing rules and regulations (IRR) it shall thereafter become functus
officio and therefore cease to exist.

The Joint Congressional Oversight Committee in RA 9335 was created for the purpose
of approving the implementing rules and regulations (IRR) formulated by the DOF,
DBM, NEDA, BIR, BOC and CSC. On May 22, 2006, it approved the said IRR. From
then on, it became functus officio and ceased to exist. Hence, the issue of its alleged
encroachment on the executive function of implementing and enforcing the law may be
considered moot and academic.

This notwithstanding, this might be as good a time as any for the Court to confront the
issue of the constitutionality of the Joint Congressional Oversight Committee created
under RA 9335 (or other similar laws for that matter).

The scholarly discourse of Mr. Justice (now Chief Justice) Puno on the concept of
congressional oversight in Macalintal v. Commission on Elections34 is illuminating:

Concept and bases of congressional oversight

Broadly defined, the power of oversight embraces all activities undertaken
by Congress to enhance its understanding of and influence over
the implementation of legislation it has enacted. Clearly, oversight
concerns post-enactment measures undertaken by Congress: (a) to
monitor bureaucratic compliance with program objectives, (b) to determine
whether agencies are properly administered, (c) to eliminate executive
waste and dishonesty, (d) to prevent executive usurpation of legislative
authority, and (d) to assess executive conformity with the congressional
perception of public interest.

The power of oversight has been held to be intrinsic in the grant of legislative
power itself and integral to the checks and balances inherent in a democratic
system of government. x x x x x x x x x

Over the years, Congress has invoked its oversight power with increased
frequency to check the perceived "exponential accumulation of power" by the
executive branch. By the beginning of the 20th century, Congress has delegated
an enormous amount of legislative authority to the executive branch and the
administrative agencies. Congress, thus, uses its oversight power to make sure
that the administrative agencies perform their functions within the authority
delegated to them. x x x x x x x x x

Categories of congressional oversight functions

The acts done by Congress purportedly in the exercise of its oversight powers
may be divided into three categories,
namely: scrutiny, investigation and supervision.

a. Scrutiny

Congressional scrutiny implies a lesser intensity and continuity of attention

to administrative operations. Its primary purpose is to determine economy
and efficiency of the operation of government activities. In the exercise of
legislative scrutiny, Congress may request information and report from the
other branches of government. It can give recommendations or pass
resolutions for consideration of the agency involved.

xxx xxx xxx

b. Congressional investigation

While congressional scrutiny is regarded as a passive process of looking

at the facts that are readily available, congressional investigation involves
a more intense digging of facts. The power of Congress to conduct
investigation is recognized by the 1987 Constitution under section 21,
Article VI, xxx xxx xxx
 c. Legislative supervision

The third and most encompassing form by which Congress exercises its
oversight power is thru legislative supervision. "Supervision" connotes a
continuing and informed awareness on the part of a congressional committee
regarding executive operations in a given administrative area. While both
congressional scrutiny and investigation involve inquiry into past executive
branch actions in order to influence future executive branch
performance, congressional supervision allows Congress to scrutinize the
exercise of delegated law-making authority, and permits Congress to retain part
of that delegated authority.

Congress exercises supervision over the executive agencies through its veto
power. It typically utilizes veto provisions when granting the President or an
executive agency the power to promulgate regulations with the force of law.
These provisions require the President or an agency to present the proposed
regulations to Congress, which retains a "right" to approve or disapprove any
regulation before it takes effect. Such legislative veto provisions usually provide
that a proposed regulation will become a law after the expiration of a certain
period of time, only if Congress does not affirmatively disapprove of the
regulation in the meantime. Less frequently, the statute provides that a proposed
regulation will become law if Congress affirmatively approves it.

Supporters of legislative veto stress that it is necessary to maintain the balance

of power between the legislative and the executive branches of government as it
offers lawmakers a way to delegate vast power to the executive branch or to
independent agencies while retaining the option to cancel particular exercise of
such power without having to pass new legislation or to repeal existing law. They
contend that this arrangement promotes democratic accountability as it provides
legislative check on the activities of unelected administrative agencies. One
proponent thus explains:

It is too late to debate the merits of this delegation policy: the policy is too
deeply embedded in our law and practice. It suffices to say that the
complexities of modern government have often led Congress-whether by
actual or perceived necessity- to legislate by declaring broad policy goals
and general statutory standards, leaving the choice of policy options to the
discretion of an executive officer. Congress articulates legislative aims, but
leaves their implementation to the judgment of parties who may or may
not have participated in or agreed with the development of those aims.
Consequently, absent safeguards, in many instances the reverse of our
constitutional scheme could be effected: Congress proposes, the
Executive disposes. One safeguard, of course, is the legislative power to
enact new legislation or to change existing law. But without some means
of overseeing post enactment activities of the executive branch, Congress
would be unable to determine whether its policies have been implemented
 in accordance with legislative intent and thus whether legislative
intervention is appropriate.

Its opponents, however, criticize the legislative veto as undue encroachment

upon the executive prerogatives. They urge that any post-enactment
measures undertaken by the legislative branch should be limited to
scrutiny and investigation; any measure beyond that would undermine the
separation of powers guaranteed by the Constitution. They contend that
legislative veto constitutes an impermissible evasion of the President’s veto
authority and intrusion into the powers vested in the executive or judicial
branches of government. Proponents counter that legislative veto enhances
separation of powers as it prevents the executive branch and independent
agencies from accumulating too much power. They submit that reporting
requirements and congressional committee investigations allow Congress to
scrutinize only the exercise of delegated law-making authority. They do not allow
Congress to review executive proposals before they take effect and they do not
afford the opportunity for ongoing and binding expressions of congressional
intent. In contrast, legislative veto permits Congress to participate prospectively
in the approval or disapproval of "subordinate law" or those enacted by the
executive branch pursuant to a delegation of authority by Congress. They further
argue that legislative veto "is a necessary response by Congress to the accretion
of policy control by forces outside its chambers." In an era of delegated authority,
they point out that legislative veto "is the most efficient means Congress has yet
devised to retain control over the evolution and implementation of its policy as
declared by statute."

In Immigration and Naturalization Service v. Chadha, the U.S. Supreme Court

resolved the validity of legislative veto provisions. The case arose from the
order of the immigration judge suspending the deportation of Chadha pursuant to
§ 244(c)(1) of the Immigration and Nationality Act. The United States House of
Representatives passed a resolution vetoing the suspension pursuant to §
244(c)(2) authorizing either House of Congress, by resolution, to invalidate the
decision of the executive branch to allow a particular deportable alien to remain
in the United States. The immigration judge reopened the deportation
proceedings to implement the House order and the alien was ordered deported.
The Board of Immigration Appeals dismissed the alien’s appeal, holding that it
had no power to declare unconstitutional an act of Congress. The United States
Court of Appeals for Ninth Circuit held that the House was without constitutional
authority to order the alien’s deportation and that § 244(c)(2) violated the
constitutional doctrine on separation of powers.

On appeal, the U.S. Supreme Court declared § 244(c)(2) unconstitutional. But

the Court shied away from the issue of separation of powers and instead
held that the provision violates the presentment clause and bicameralism. It held
that the one-house veto was essentially legislative in purpose and effect. As
such, it is subject to the procedures set out in Article I of the Constitution
 requiring the passage by a majority of both Houses and presentment to the
President. x x x x x x x x x

Two weeks after the Chadha decision, the Court upheld, in memorandum
decision, two lower court decisions invalidating the legislative veto provisions in
the Natural Gas Policy Act of 1978 and the Federal Trade Commission
Improvement Act of 1980. Following this precedence, lower courts invalidated
statutes containing legislative veto provisions although some of these provisions
required the approval of both Houses of Congress and thus met the
bicameralism requirement of Article I. Indeed, some of these veto provisions
were not even exercised.35 (emphasis supplied)

In Macalintal, given the concept and configuration of the power of congressional

oversight and considering the nature and powers of a constitutional body like the
Commission on Elections, the Court struck down the provision in RA 9189 (The
Overseas Absentee Voting Act of 2003) creating a Joint Congressional Committee. The
committee was tasked not only to monitor and evaluate the implementation of the said
law but also to review, revise, amend and approve the IRR promulgated by the
Commission on Elections. The Court held that these functions infringed on the
constitutional independence of the Commission on Elections.36

With this backdrop, it is clear that congressional oversight is not unconstitutional per se,
meaning, it neither necessarily constitutes an encroachment on the executive power to
implement laws nor undermines the constitutional separation of powers. Rather, it is
integral to the checks and balances inherent in a democratic system of government. It
may in fact even enhance the separation of powers as it prevents the over-accumulation
of power in the executive branch.

However, to forestall the danger of congressional encroachment "beyond the legislative

sphere," the Constitution imposes two basic and related constraints on Congress. 37 It
may not vest itself, any of its committees or its members with either executive or judicial
power.38 And, when it exercises its legislative power, it must follow the "single, finely
wrought and exhaustively considered, procedures" specified under the
Constitution,39 including the procedure for enactment of laws and presentment.

Thus, any post-enactment congressional measure such as this should be limited to

scrutiny and investigation. In particular, congressional oversight must be confined to the
following:

(1) scrutiny based primarily on Congress’ power of appropriation and the budget
hearings conducted in connection with it, its power to ask heads of departments
to appear before and be heard by either of its Houses on any matter pertaining to
their departments and its power of confirmation40 and

(2) investigation and monitoring41 of the implementation of laws pursuant to the

power of Congress to conduct inquiries in aid of legislation.42
Any action or step beyond that will undermine the separation of powers guaranteed by
the Constitution. Legislative vetoes fall in this class.

Legislative veto is a statutory provision requiring the President or an administrative

agency to present the proposed implementing rules and regulations of a law to
Congress which, by itself or through a committee formed by it, retains a "right" or
"power" to approve or disapprove such regulations before they take effect. As such, a
legislative veto in the form of a congressional oversight committee is in the form of an
inward-turning delegation designed to attach a congressional leash (other than through
scrutiny and investigation) to an agency to which Congress has by law initially
delegated broad powers.43It radically changes the design or structure of the
Constitution’s diagram of power as it entrusts to Congress a direct role in enforcing,
applying or implementing its own laws.44

Congress has two options when enacting legislation to define national policy within the
broad horizons of its legislative competence.45 It can itself formulate the details or it can
assign to the executive branch the responsibility for making necessary managerial
decisions in conformity with those standards.46 In the latter case, the law must be
complete in all its essential terms and conditions when it leaves the hands of the
legislature.47 Thus, what is left for the executive branch or the concerned administrative
agency when it formulates rules and regulations implementing the law is to fill up details
(supplementary rule-making) or ascertain facts necessary to bring the law into actual
operation (contingent rule-making).48

Administrative regulations enacted by administrative agencies to implement and

interpret the law which they are entrusted to enforce have the force of law and are
entitled to respect.49 Such rules and regulations partake of the nature of a statute 50and
are just as binding as if they have been written in the statute itself. As such, they have
the force and effect of law and enjoy the presumption of constitutionality and legality
until they are set aside with finality in an appropriate case by a competent
court.51 Congress, in the guise of assuming the role of an overseer, may not pass upon
their legality by subjecting them to its stamp of approval without disturbing the
calculated balance of powers established by the Constitution. In exercising discretion to
approve or disapprove the IRR based on a determination of whether or not they
conformed with the provisions of RA 9335, Congress arrogated judicial power unto
itself, a power exclusively vested in this Court by the Constitution.

Considered Opinion of
Mr. Justice Dante O. Tinga

Moreover, the requirement that the implementing rules of a law be subjected to approval
by Congress as a condition for their effectivity violates the cardinal constitutional
principles of bicameralism and the rule on presentment.52

Section 1, Article VI of the Constitution states:

 Section 1. The legislative power shall be vested in the Congress of the
Philippines which shall consist of a Senate and a House of
Representatives, except to the extent reserved to the people by the provision on
initiative and referendum. (emphasis supplied)

Legislative power (or the power to propose, enact, amend and repeal laws)53 is vested
in Congress which consists of two chambers, the Senate and the House of
Representatives. A valid exercise of legislative power requires the act of both
chambers. Corrollarily, it can be exercised neither solely by one of the two chambers
nor by a committee of either or both chambers. Thus, assuming the validity of a
legislative veto, both a single-chamber legislative veto and a congressional committee
legislative veto are invalid.

Additionally, Section 27(1), Article VI of the Constitution provides:

Section 27. (1) Every bill passed by the Congress shall, before it becomes a
law, be presented to the President. If he approves the same, he shall sign it,
otherwise, he shall veto it and return the same with his objections to the House
where it originated, which shall enter the objections at large in its Journal and
proceed to reconsider it. If, after such reconsideration, two-thirds of all the
Members of such House shall agree to pass the bill, it shall be sent, together with
the objections, to the other House by which it shall likewise be reconsidered, and
if approved by two-thirds of all the Members of that House, it shall become a law.
In all such cases, the votes of each House shall be determined by yeas or nays,
and the names of the members voting for or against shall be entered in its
Journal. The President shall communicate his veto of any bill to the House where
it originated within thirty days after the date of receipt thereof; otherwise, it shall
become a law as if he had signed it. (emphasis supplied)

Every bill passed by Congress must be presented to the President for approval or veto.
In the absence of presentment to the President, no bill passed by Congress can
become a law. In this sense, law-making under the Constitution is a joint act of the
Legislature and of the Executive. Assuming that legislative veto is a valid legislative act
with the force of law, it cannot take effect without such presentment even if approved by
both chambers of Congress.

In sum, two steps are required before a bill becomes a law. First, it must be approved
by both Houses of Congress.54Second, it must be presented to and approved by the
President.55 As summarized by Justice Isagani Cruz56 and Fr. Joaquin G. Bernas,
S.J.57, the following is the procedure for the approval of bills:

A bill is introduced by any member of the House of Representatives or the

Senate except for some measures that must originate only in the former
chamber.
 The first reading involves only a reading of the number and title of the measure
and its referral by the Senate President or the Speaker to the proper committee
for study.

The bill may be "killed" in the committee or it may be recommended for approval,
with or without amendments, sometimes after public hearings are first held
thereon. If there are other bills of the same nature or purpose, they may all be
consolidated into one bill under common authorship or as a committee bill.

Once reported out, the bill shall be calendared for second reading. It is at this
stage that the bill is read in its entirety, scrutinized, debated upon and amended
when desired. The second reading is the most important stage in the passage of
a bill.

The bill as approved on second reading is printed in its final form and copies
thereof are distributed at least three days before the third reading. On the third
reading, the members merely register their votes and explain them if they are
allowed by the rules. No further debate is allowed.

Once the bill passes third reading, it is sent to the other chamber, where it will
also undergo the three readings. If there are differences between the versions
approved by the two chambers, a conference committee 58 representing both
Houses will draft a compromise measure that if ratified by the Senate and the
House of Representatives will then be submitted to the President for his
consideration.

The bill is enrolled when printed as finally approved by the Congress, thereafter
authenticated with the signatures of the Senate President, the Speaker, and the
Secretaries of their respective chambers…59

The President’s role in law-making.

The final step is submission to the President for approval. Once approved, it
takes effect as law after the required publication.60

Where Congress delegates the formulation of rules to implement the law it has enacted
pursuant to sufficient standards established in the said law, the law must be complete in
all its essential terms and conditions when it leaves the hands of the legislature. And it
may be deemed to have left the hands of the legislature when it becomes effective
because it is only upon effectivity of the statute that legal rights and obligations become
available to those entitled by the language of the statute. Subject to the indispensable
requisite of publication under the due process clause,61 the determination as to when a
law takes effect is wholly the prerogative of Congress.62 As such, it is only upon its
effectivity that a law may be executed and the executive branch acquires the duties and
powers to execute the said law. Before that point, the role of the executive branch,
particularly of the President, is limited to approving or vetoing the law.63
From the moment the law becomes effective, any provision of law that empowers
Congress or any of its members to play any role in the implementation or enforcement
of the law violates the principle of separation of powers and is thus unconstitutional.
Under this principle, a provision that requires Congress or its members to approve the
implementing rules of a law after it has already taken effect shall be unconstitutional, as
is a provision that allows Congress or its members to overturn any directive or ruling
made by the members of the executive branch charged with the implementation of the
law.

Following this rationale, Section 12 of RA 9335 should be struck down as

unconstitutional. While there may be similar provisions of other laws that may be
invalidated for failure to pass this standard, the Court refrains from invalidating them
wholesale but will do so at the proper time when an appropriate case assailing those
provisions is brought before us.64

The next question to be resolved is: what is the effect of the unconstitutionality of
Section 12 of RA 9335 on the other provisions of the law? Will it render the entire law
unconstitutional? No.

Section 13 of RA 9335 provides:

SEC. 13. Separability Clause. – If any provision of this Act is declared invalid by
a competent court, the remainder of this Act or any provision not affected by such
declaration of invalidity shall remain in force and effect.

In Tatad v. Secretary of the Department of Energy,65 the Court laid down the following
rules:

The general rule is that where part of a statute is void as repugnant to the
Constitution, while another part is valid, the valid portion, if separable from the
invalid, may stand and be enforced. The presence of a separability clause in a
statute creates the presumption that the legislature intended separability, rather
than complete nullity of the statute. To justify this result, the valid portion must be
so far independent of the invalid portion that it is fair to presume that the
legislature would have enacted it by itself if it had supposed that it could not
constitutionally enact the other. Enough must remain to make a complete,
intelligible and valid statute, which carries out the legislative intent. x x x

The exception to the general rule is that when the parts of a statute are so
mutually dependent and connected, as conditions, considerations, inducements,
or compensations for each other, as to warrant a belief that the legislature
intended them as a whole, the nullity of one part will vitiate the rest. In making the
parts of the statute dependent, conditional, or connected with one another, the
legislature intended the statute to be carried out as a whole and would not have
enacted it if one part is void, in which case if some parts are unconstitutional, all
 the other provisions thus dependent, conditional, or connected must fall with
them.

The separability clause of RA 9335 reveals the intention of the legislature to isolate and
detach any invalid provision from the other provisions so that the latter may continue in
force and effect. The valid portions can stand independently of the invalid section.
Without Section 12, the remaining provisions still constitute a complete, intelligible and
valid law which carries out the legislative intent to optimize the revenue-generation
capability and collection of the BIR and the BOC by providing for a system of rewards
and sanctions through the Rewards and Incentives Fund and a Revenue Performance
Evaluation Board.

To be effective, administrative rules and regulations must be published in full if their

purpose is to enforce or implement existing law pursuant to a valid delegation. The IRR
of RA 9335 were published on May 30, 2006 in two newspapers of general
circulation66 and became effective 15 days thereafter.67 Until and unless the contrary is
shown, the IRR are presumed valid and effective even without the approval of the Joint
Congressional Oversight Committee.

WHEREFORE, the petition is hereby PARTIALLY GRANTED. Section 12 of RA 9335

creating a Joint Congressional Oversight Committee to approve the implementing rules
and regulations of the law is declared UNCONSTITUTIONAL and
therefore NULL and VOID. The constitutionality of the remaining provisions of RA 9335
is UPHELD. Pursuant to Section 13 of RA 9335, the rest of the provisions remain in
force and effect.

SO ORDERED.
 E N B AN C

BARANGAY ASSOCIATION FOR G.R. No. 179271

NATIONAL ADVANCEMENT
AND TRANSPARENCY (BANAT),
Petitioner,

- versus -

COMMISSION ON ELECTIONS
(sitting as the National Board of
Canvassers),
Respondent.

ARTS BUSINESS AND SCIENCE

PROFESSIONALS,
Intervenor.

AANGAT TAYO,
Intervenor.

COALITION OF ASSOCIATIONS
OF SENIOR CITIZENS IN THE
PHILIPPINES, INC. (SENIOR
CITIZENS),
Intervenor.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - x
BAYAN MUNA, ADVOCACY FOR G.R. No. 179295
TEACHER EMPOWERMENT
THROUGH ACTION, COOPERATION Present:
AND HARMONY TOWARDS
EDUCATIONAL REFORMS, INC., PUNO, C.J.,
and ABONO, QUISUMBING,
Petitioners, YNARES-SANTIAGO,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
- versus - CARPIO MORALES,
TINGA,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA, and
 BERSAMIN, JJ.

COMMISSION ON ELECTIONS, Promulgated:

Respondent.
_______________________

x---------------------------------------------------x

DECISION

CARPIO, J.:

The Case

Petitioner in G.R. No. 179271 Barangay Association for National Advancement and
Transparency (BANAT) in a petition for certiorari and mandamus,[1] assails the
Resolution[2] promulgated on 3 August 2007 by the Commission on Elections
(COMELEC) in NBC No. 07-041 (PL). The COMELECs resolution in NBC No. 07-041
(PL) approved the recommendation of Atty. Alioden D. Dalaig, Head of the National
Board of Canvassers (NBC) Legal Group, to deny the petition of BANAT for being
moot. BANAT filed before the COMELEC En Banc, acting as NBC, a Petition to
Proclaim the Full Number of Party-List Representatives Provided by the Constitution.

The following are intervenors in G.R. No. 179271: Arts Business and Science
Professionals (ABS), Aangat Tayo (AT), and Coalition of Associations of Senior Citizens
in the Philippines, Inc. (Senior Citizens).

Petitioners in G.R. No. 179295 Bayan Muna, Abono, and Advocacy for Teacher
Empowerment Through Action, Cooperation and Harmony Towards Educational
Reforms (A Teacher) in a petition for certiorari with mandamus and prohibition,[3]assails
NBC Resolution No. 07-60[4] promulgated on 9 July 2007. NBC No. 07-60 made a
partial proclamation of parties, organizations and coalitions that obtained at least two
percent of the total votes cast under the Party-List System. The COMELEC announced
that, upon completion of the canvass of the party-list results, it would determine the total
number of seats of each winning party, organization, or coalition in accordance
with Veterans Federation Party v. COMELEC[5] (Veterans).

Estrella DL Santos, in her capacity as President and First Nominee of the Veterans
Freedom Party, filed a motion to intervene in both G.R. Nos. 179271 and 179295.

The Facts
The 14 May 2007 elections included the elections for the party-list representatives.The
COMELEC counted 15,950,900 votes cast for 93 parties under the Party-List System.[6]
On 27 June 2002, BANAT filed a Petition to Proclaim the Full Number of Party-List
Representatives Provided by the Constitution, docketed as NBC No. 07-041 (PL) before
the NBC. BANAT filed its petition because [t]he Chairman and the Members of the
[COMELEC] have recently been quoted in the national papers that the [COMELEC] is
duty bound to and shall implement the Veterans ruling, that is, would apply the
Panganiban formula in allocating party-list seats.[7] There were no intervenors in
BANATs petition before the NBC. BANAT filed a memorandum on 19 July 2007.
On 9 July 2007, the COMELEC, sitting as the NBC, promulgated NBC Resolution No.
07-60. NBC Resolution No. 07-60 proclaimed thirteen (13) parties as winners in the
party-list elections, namely: Buhay Hayaan Yumabong (BUHAY), Bayan Muna, Citizens
Battle Against Corruption (CIBAC), Gabrielas Women Party (Gabriela), Association of
Philippine Electric Cooperatives (APEC), A Teacher, Akbayan! Citizens Action Party
(AKBAYAN), Alagad, Luzon Farmers Party (BUTIL), Cooperative-Natco Network Party
(COOP-NATCCO), Anak Pawis, Alliance of Rural Concerns (ARC), and Abono. We
quote NBC Resolution No. 07-60 in its entirety below:

WHEREAS, the Commission on Elections sitting en banc as National

Board of Canvassers, thru its Sub-Committee for Party-List, as of 03 July
2007, had officially canvassed, in open and public proceedings, a total
of fifteen million two hundred eighty three thousand six hundred
fifty-nine (15,283,659) votes under the Party-List System of
Representation, in connection with the National and Local Elections
conducted last 14 May 2007;
WHEREAS, the study conducted by the Legal and Tabulation Groups of
the National Board of Canvassers reveals that the projected/maximum
total party-list votes cannot go any higher than sixteen million seven
hundred twenty three thousand one hundred twenty-one
(16,723,121) votes given the following statistical data:

Projected/Maximum Party-List Votes for May 2007 Elections

i. Total party-list votes already 15,283,659

canvassed/tabulated
ii. Total party-list votes remaining uncanvassed/
untabulated (i.e. canvass deferred) 1,337,032
iii. Maximum party-list votes (based on 100%
outcome) from areas not yet submitted for
canvass (Bogo, Cebu; Bais City; Pantar, Lanao
del Norte; and Pagalungan, Maguindanao) 102,430
Maximum Total Party-List Votes 16,723,121

WHEREAS, Section 11 of Republic Act No. 7941 (Party-List System Act)

provides in part:
 The parties, organizations, and coalitions receiving at least
two percent (2%) of the total votes cast for the party-list
system shall be entitled to one seat each: provided, that those
garnering more than two percent (2%) of the votes shall be
entitled to additional seats in proportion to their total number
of votes: provided, finally, that each party, organization, or
coalition shall be entitled to not more than three (3) seats.
WHEREAS, for the 2007 Elections, based on the above projected total of
party-list votes, the presumptive two percent (2%) threshold can be
pegged at three hundred thirty four thousand four hundred sixty-two
(334,462) votes;
WHEREAS, the Supreme Court, in Citizens Battle Against Corruption
(CIBAC) versus COMELEC, reiterated its ruling in Veterans Federation
Party versus COMELEC adopting a formula for the additional seats of
each party, organization or coalition receving more than the required two
percent (2%) votes, stating that the same shall be determined only after all
party-list ballots have been completely canvassed;

WHEREAS, the parties, organizations, and coalitions that have thus far
garnered at least three hundred thirty four thousand four hundred
sixty-two (334,462) votes are as follows:

RANK PARTY/ORGANIZATION/ VOTES

COALITION RECEIVED
1 BUHAY 1,163,218
2 BAYAN MUNA 972,730
3 CIBAC 760,260
4 GABRIELA 610,451
5 APEC 538,971
6 A TEACHER 476,036
7 AKBAYAN 470,872
8 ALAGAD 423,076
9 BUTIL 405,052
10 COOP-NATCO 390,029
11 BATAS 386,361
12 ANAK PAWIS 376,036
13 ARC 338,194
14 ABONO 337,046
WHEREAS, except for Bagong Alyansang Tagapagtaguyod ng Adhikaing
Sambayanan (BATAS), against which an URGENT PETITION FOR
CANCELLATION/REMOVAL OF REGISTRATION AND
DISQUALIFICATION OF PARTY-LIST NOMINEE (With Prayer for the
Issuance of Restraining Order) has been filed before the Commission,
docketed as SPC No. 07-250, all the parties, organizations and coalitions
included in the aforementioned list are therefore entitled to at least one
seat under the party-list system of representation in the meantime.

NOW, THEREFORE, by virtue of the powers vested in it by the

Constitution, the Omnibus Election Code, Executive Order No. 144,
Republic Act Nos. 6646, 7166, 7941, and other election laws, the
Commission on Elections, sitting en banc as the National Board of
Canvassers, hereby RESOLVES to PARTIALLY PROCLAIM, subject to
certain conditions set forth below, the following parties, organizations and
coalitions participating under the Party-List System:

1 Buhay Hayaan Yumabong BUHAY

2 Bayan Muna BAYAN MUNA
3 Citizens Battle Against Corruption CIBAC
4 Gabriela Womens Party GABRIELA
5 Association of Philippine Electric APEC
Cooperatives
6 Advocacy for Teacher Empowerment A TEACHER
Through Action, Cooperation and
Harmony Towards Educational Reforms,
Inc.
7 Akbayan! Citizens Action Party AKBAYAN
8 Alagad ALAGAD
9 Luzon Farmers Party BUTIL
10 Cooperative-Natco Network Party COOP-NATCCO
11 Anak Pawis ANAKPAWIS
12 Alliance of Rural Concerns ARC
13 Abono ABONO

This is without prejudice to the proclamation of other parties,

organizations, or coalitions which may later on be established to have
obtained at least two percent (2%) of the total actual votes cast under the
Party-List System.
 The total number of seats of each winning party, organization or coalition
shall be determined pursuant to Veterans Federation Party versus
COMELEC formula upon completion of the canvass of the party-list
results.

The proclamation of Bagong Alyansang Tagapagtaguyod ng Adhikaing

Sambayanan (BATAS) is hereby deferred until final resolution of SPC No.
07-250, in order not to render the proceedings therein moot and
academic.

Finally, all proclamation of the nominees of concerned parties,

organizations and coalitions with pending disputes shall likewise be held in
abeyance until final resolution of their respective cases.

Let the Clerk of the Commission implement this Resolution, furnishing a

copy thereof to the Speaker of the House of Representatives of the
Philippines.

SO ORDERED.[8] (Emphasis in the original)

Pursuant to NBC Resolution No. 07-60, the COMELEC, acting as NBC, promulgated
NBC Resolution No. 07-72, which declared the additional seats allocated to the
appropriate parties. We quote from the COMELECs interpretation of
the Veteransformula as found in NBC Resolution No. 07-72:

WHEREAS, on July 9, 2007, the Commission on Elections sitting en

banc as the National Board of Canvassers proclaimed thirteen (13)
qualified parties, organization[s] and coalitions based on the presumptive
two percent (2%) threshold of 334,462 votes from the projected maximum
total number of party-list votes of 16,723,121, and were thus given one (1)
guaranteed party-list seat each;
WHEREAS, per Report of the Tabulation Group and Supervisory
Committee of the National Board of Canvassers, the projected maximum
total party-list votes, as of July 11, 2007, based on the votes actually
canvassed, votes canvassed but not included in Report No. 29, votes
received but uncanvassed, and maximum votes expected for Pantar,
Lanao del Norte, is 16,261,369; and that the projected maximum total
votes for the thirteen (13) qualified parties, organizations and coalition[s]
are as follows:

Party-List Projected total number of

votes
1 BUHAY 1,178,747
 2 BAYAN MUNA 977,476
3 CIBAC 755,964
4 GABRIELA 621,718
5 APEC 622,489
6 A TEACHER 492,369
7 AKBAYAN 462,674
8 ALAGAD 423,190
9 BUTIL 409,298
10 COOP-NATCO 412,920
11 ANAKPAWIS 370,165
12 ARC 375,846
13 ABONO 340,151

WHEREAS, based on the above Report, Buhay Hayaan

Yumabong (Buhay) obtained the highest number of votes among the
thirteen (13) qualified parties, organizations and coalitions, making it the
first party in accordance with Veterans Federation Party versus
COMELEC, reiterated in Citizens Battle Against Corruption (CIBAC)
versus COMELEC;
WHEREAS, qualified parties, organizations and coalitions participating
under the party-list system of representation that have obtained one
guaranteed (1) seat may be entitled to an additional seat or seats based
on the formula prescribed by the Supreme Court in Veterans;
WHEREAS, in determining the additional seats for the first party, the
correct formula as expressed in Veterans, is:

Number of votes of first party Proportion of votes of first

- - - - - - - - - - - - - - - - - - - - - = party relative to total votes for
Total votes for party-list system party-list system

wherein the proportion of votes received by the first party (without

rounding off) shall entitle it to additional seats:

Proportion of votes received Additional seats

by the first party
Equal to or at least 6% Two (2) additional
seats
Equal to or greater than 4% but less than One (1) additional seat
6%
Less than 4% No additional seat
WHEREAS, applying the above formula, Buhay obtained the following
percentage:

1,178,747
- - - - - - - - = 0.07248 or 7.2%
16,261,369

which entitles it to two (2) additional seats.

WHEREAS, in determining the additional seats for the other qualified

parties, organizations and coalitions, the correct formula as expressed
in Veterans and reiterated in CIBAC is, as follows:

No. of votes of
concerned party No. of additional
Additional seats for = ------------------- x seats allocated to
a concerned party No. of votes of first party
first party

WHEREAS, applying the above formula, the results are as follows:

Party List Percentage Additional Seat

BAYAN MUNA 1.65 1
CIBAC 1.28 1
GABRIELA 1.05 1
APEC 1.05 1
A TEACHER 0.83 0
AKBAYAN 0.78 0
ALAGAD 0.71 0
BUTIL 0.69 0
COOP-NATCO 0.69 0
ANAKPAWIS 0.62 0
ARC 0.63 0
ABONO 0.57 0

NOW THEREFORE, by virtue of the powers vested in it by the

Constitution, Omnibus Election Code, Executive Order No. 144, Republic
Act Nos. 6646, 7166, 7941 and other elections laws, the Commission on
Elections en banc sitting as the National Board of Canvassers, hereby
 RESOLVED, as it hereby RESOLVES, to proclaim the following parties,
organizations or coalitions as entitled to additional seats, to wit:

Party List Additional Seats

BUHAY 2
BAYAN MUNA 1
CIBAC 1
GABRIELA 1
APEC 1

This is without prejudice to the proclamation of other parties, organizations

or coalitions which may later on be established to have obtained at least
two per cent (2%) of the total votes cast under the party-list system to
entitle them to one (1) guaranteed seat, or to the appropriate percentage
of votes to entitle them to one (1) additional seat.
Finally, all proclamation of the nominees of concerned parties,
organizations and coalitions with pending disputes shall likewise be held in
abeyance until final resolution of their respective cases.

Let the National Board of Canvassers Secretariat implement this

Resolution, furnishing a copy hereof to the Speaker of the House of
Representatives of the Philippines.

SO ORDERED.[9]

Acting on BANATs petition, the NBC promulgated NBC Resolution No. 07-88 on 3
August 2007, which reads as follows:

This pertains to the Petition to Proclaim the Full Number of Party-List

Representatives Provided by the Constitution filed by the Barangay
Association for National Advancement and Transparency (BANAT).

Acting on the foregoing Petition of the Barangay Association for National

Advancement and Transparency (BANAT) party-list, Atty. Alioden D.
Dalaig, Head, National Board of Canvassers Legal Group submitted his
comments/observations and recommendation thereon [NBC 07-041 (PL)],
which reads:

COMMENTS / OBSERVATIONS:

Petitioner Barangay Association for National Advancement

and Transparency (BANAT), in its Petition to Proclaim the
Full Number of Party-List Representatives Provided by the
Constitution prayed for the following reliefs, to wit:

1. That the full number -- twenty percent (20%) -- of Party-

List representatives as mandated by Section 5, Article VI of
the Constitution shall be proclaimed.

2. Paragraph (b), Section 11 of RA 7941 which prescribes

the 2% threshold votes, should be harmonized with Section
5, Article VI of the Constitution and with Section 12 of the
same RA 7941 in that it should be applicable only to the first
party-list representative seats to be allotted on the basis of
their initial/first ranking.

3. The 3-seat limit prescribed by RA 7941 shall be applied;

and

4. Initially, all party-list groups shall be given the number of

seats corresponding to every 2% of the votes they received
and the additional seats shall be allocated in accordance
with Section 12 of RA 7941, that is, in proportion to the
percentage of votes obtained by each party-list group in
relation to the total nationwide votes cast in the party-list
election, after deducting the corresponding votes of those
which were allotted seats under the 2% threshold rule. In
fine, the formula/procedure prescribed in the ALLOCATION
OF PARTY-LIST SEATS, ANNEX A of COMELEC
RESOLUTION 2847 dated 25 June 1996, shall be used for
[the] purpose of determining how many seats shall be
proclaimed, which party-list groups are entitled to
representative seats and how many of their nominees shall
seat [sic].

5. In the alternative, to declare as unconstitutional Section 11

of Republic Act No. 7941 and that the procedure in allocating
seats for party-list representative prescribed by Section 12 of
RA 7941 shall be followed.

RECOMMENDATION:

The petition of BANAT is now moot and academic.

The Commission En Banc in NBC Resolution No. 07-60

promulgated July 9, 2007 re In the Matter of the Canvass of
Votes and Partial Proclamation of the Parties, Organizations
and Coalitions Participating Under the Party-List System
 During the May 14, 2007 National and Local
Elections resolved among others that the total number of
seats of each winning party, organization or coalition shall be
determined pursuant to the Veterans Federation
Party versus COMELEC formula upon completion of the
canvass of the party-list results.
WHEREFORE, premises considered, the National Board of Canvassers
RESOLVED, as it hereby RESOLVES, to approve and adopt the
recommendation of Atty. Alioden D. Dalaig, Head, NBC Legal Group, to
DENY the herein petition of BANAT for being moot and academic.
Let the Supervisory Committee implement this resolution.
SO ORDERED.[10]

BANAT filed a petition for certiorari and mandamus assailing the ruling in NBC
Resolution No. 07-88. BANAT did not file a motion for reconsideration of NBC
Resolution No. 07-88.

On 9 July 2007, Bayan Muna, Abono, and A Teacher asked the COMELEC, acting as
NBC, to reconsider its decision to use the Veterans formula as stated in its NBC
Resolution No. 07-60 because the Veterans formula is violative of the Constitution and
of Republic Act No. 7941 (R.A. No. 7941). On the same day, the COMELEC denied
reconsideration during the proceedings of the NBC.[11]

Aside from the thirteen party-list organizations proclaimed on 9 July 2007, the
COMELEC proclaimed three other party-list organizations as qualified parties entitled to
one guaranteed seat under the Party-List System: Agricultural Sector Alliance of the
Philippines, Inc. (AGAP),[12] Anak Mindanao (AMIN),[13] and An Waray.[14] Per the
certification[15] by COMELEC, the following party-list organizations have been
proclaimed as of 19 May 2008:

Party-List No. of Seat(s)

1.1 Buhay 3
1.2 Bayan Muna 2
1.3 CIBAC 2
1.4 Gabriela 2
1.5 APEC 2
1.6 A Teacher 1
1.7 Akbayan 1
1.8 Alagad 1
1.9 Butil 1
1.10 Coop-Natco [sic] 1
 1.11 Anak Pawis 1
1.12 ARC 1
1.13 Abono 1
1.14 AGAP 1
1.15 AMIN 1

The proclamation of Bagong Alyansang Tagapagtaguyod ng Adhikaing Sambayanan

(BATAS), against which an Urgent Petition for Cancellation/Removal of Registration and
Disqualification of Party-list Nominee (with Prayer for the Issuance of Restraining Order)
has been filed before the COMELEC, was deferred pending final resolution of SPC No.
07-250.

Issues

BANAT brought the following issues before this Court:

1. Is the twenty percent allocation for party-list representatives provided in

Section 5(2), Article VI of the Constitution mandatory or is it merely a
ceiling?

2. Is the three-seat limit provided in Section 11(b) of RA

7941 constitutional?

3. Is the two percent threshold and qualifier votes prescribed by the same
Section 11(b) of RA 7941 constitutional?

4. How shall the party-list representatives be allocated?[16]

Bayan Muna, A Teacher, and Abono, on the other hand, raised the following issues in
their petition:

I. Respondent Commission on Elections, acting as National Board

of Canvassers, committed grave abuse of discretion amounting to lack or
excess of jurisdiction when it promulgated NBC Resolution No. 07-60 to
implement the First-Party Rule in the allocation of seats to qualified party-
list organizations as said rule:

A. Violates the constitutional principle of proportional representation.

B. Violates the provisions of RA 7941 particularly:

1. The 2-4-6 Formula used by the First Party Rule in allocating additional
seats for the First Party violates the principle of proportional
representation under RA 7941.
 2. The use of two formulas in the allocation of additional seats, one for the
First Party and another for the qualifying parties, violates Section 11(b) of
RA 7941.

3. The proportional relationships under the First Party Rule are different
from those required under RA 7941;

C. Violates the Four Inviolable Parameters of the Philippine party-list

system as provided for under the same case of Veterans Federation
Party, et al. v. COMELEC.

II. Presuming that the Commission on Elections did not commit

grave abuse of discretion amounting to lack or excess of jurisdiction when
it implemented the First-Party Rule in the allocation of seats to qualified
party-list organizations, the same being merely in consonance with the
ruling in Veterans Federations Party, et al. v. COMELEC, the instant
Petition is a justiciable case as the issues involved herein are
constitutional in nature, involving the correct interpretation and
implementation of RA 7941, and are of transcendental importance to our
nation.[17]

Considering the allegations in the petitions and the comments of the parties in these
cases, we defined the following issues in our advisory for the oral arguments set on 22
April 2008:

1. Is the twenty percent allocation for party-list representatives in Section

5(2), Article VI of the Constitution mandatory or merely a ceiling?

2. Is the three-seat limit in Section 11(b) of RA 7941 constitutional?

3. Is the two percent threshold prescribed in Section 11(b) of RA 7941 to

qualify for one seat constitutional?

4. How shall the party-list representative seats be allocated?

5. Does the Constitution prohibit the major political parties

from participating in the party-list elections? If not, can the major political
parties be barred from participating in the party-list elections?[18]

The Ruling of the Court

The petitions have partial merit. We maintain that a Philippine-style party-list election
has at least four inviolable parameters as clearly stated in Veterans. For easy reference,
these are:
 First, the twenty percent allocation the combined number of all party-list
congressmen shall not exceed twenty percent of the total membership of
the House of Representatives, including those elected under the party list;

Second, the two percent threshold only those parties garnering a minimum
of two percent of the total valid votes cast for the party-list system are
qualified to have a seat in the House of Representatives;

Third, the three-seat limit each qualified party, regardless of the number of
votes it actually obtained, is entitled to a maximum of three seats; that is,
one qualifying and two additional seats;

Fourth, proportional representation the additional seats which a qualified

party is entitled to shall be computed in proportion to their total number of
votes.[19]

However, because the formula in Veterans has flaws in its mathematical interpretation
of the term proportional representation, this Court is compelled to revisit the formula for
the allocation of additional seats to party-list organizations.

Number of Party-List Representatives:

The Formula Mandated by the Constitution

Section 5, Article VI of the Constitution provides:

Section 5. (1) The House of Representatives shall be composed of not

more than two hundred and fifty members, unless otherwise fixed by law,
who shall be elected from legislative districts apportioned among the
provinces, cities, and the Metropolitan Manila area in accordance with the
number of their respective inhabitants, and on the basis of a uniform and
progressive ratio, and those who, as provided by law, shall be elected
through a party-list system of registered national, regional, and sectoral
parties or organizations.

(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.
The first paragraph of Section 11 of R.A. No. 7941 reads:

Section 11. Number of Party-List Representatives. The party-list

representatives shall constitute twenty per centum (20%) of the total
number of the members of the House of Representatives including those
under the party-list.
xxx

Section 5(1), Article VI of the Constitution states that the House of Representatives shall
be composed of not more than two hundred and fifty members, unless otherwise fixed
by law. The House of Representatives shall be composed of district representatives and
party-list representatives. The Constitution allows the legislature to modify the number
of the members of the House of Representatives.
Section 5(2), Article VI of the Constitution, on the other hand, states the ratio of party-list
representatives to the total number of representatives. We compute the number of seats
available to party-list representatives from the number of legislative districts. On this
point, we do not deviate from the first formula in Veterans, thus:

Number of seats Number of seats available to

available to legislative x .20 = party-list representatives
districts
.80

This formula allows for the corresponding increase in the number of seats available for
party-list representatives whenever a legislative district is created by law. Since the
14th Congress of the Philippines has 220 district representatives, there are 55 seats
available to party-list representatives.

220 x .20 = 55
.80

After prescribing the ratio of the number of party-list representatives to the total number
of representatives, the Constitution left the manner of allocating the seats available
to party-list representatives to the wisdom of the legislature.

Allocation of Seats for Party-List Representatives:

The Statutory Limits Presented by the Two Percent Threshold
and the Three-Seat Cap

All parties agree on the formula to determine the maximum number of seats reserved
under the Party-List System, as well as on the formula to determine the guaranteed
seats to party-list candidates garnering at least two-percent of the total party-list votes.
However, there are numerous interpretations of the provisions of R.A. No. 7941 on the
allocation of additional seats under the Party-List System. Veteransproduced the First
Party Rule,[20] and Justice Vicente V. Mendozas dissent in Veterans presented
Germanys Niemeyer formula[21] as an alternative.

The Constitution left to Congress the determination of the manner of allocating the seats
for party-list representatives. Congress enacted R.A. No. 7941, paragraphs (a) and (b)
of Section 11 and Section 12 of which provide:

Section 11. Number of Party-List Representatives. x x x

In determining the allocation of seats for the second vote, [22] the following
procedure shall be observed:

(a) The parties, organizations, and coalitions shall be ranked from the
highest to the lowest based on the number of votes they garnered during
the elections.

(b) The parties, organizations, and coalitions receiving at least two percent
(2%) of the total votes cast for the party-list system shall be entitled to one
seat each: Provided, That those garnering more than two percent
(2%) of the votes shall be entitled to additional seats in proportion to
their total number of votes:Provided, finally, That each party,
organization, or coalition shall be entitled to not more than three (3) seats.

Section 12. Procedure in Allocating Seats for Party-List

Representatives. The COMELEC shall tally all the votes for the parties,
organizations, or coalitions on a nationwide basis, rank them according to
the number of votes received and allocate party-list representatives
proportionately according to the percentage of votes obtained by each
party, organization, or coalition as against the total nationwide votes cast
for the party-list system. (Emphasis supplied)

In G.R. No. 179271, BANAT presents two interpretations through three formulas to
allocate party-list representative seats.

The first interpretation allegedly harmonizes the provisions of Section 11(b) on the 2%
requirement with Section 12 of R.A. No. 7941. BANAT described this procedure as
follows:

(a) The party-list representatives shall constitute twenty percent (20%) of

the total Members of the House of Representatives including those from
the party-list groups as prescribed by Section 5, Article VI of the
Constitution, Section 11 (1st par.) of RA 7941 and Comelec Resolution No.
2847 dated 25 June 1996. Since there are 220 District Representatives in
 the 14th Congress, there shall be 55 Party-List Representatives. All seats
shall have to be proclaimed.

(b) All party-list groups shall initially be allotted one (1) seat for every two
per centum (2%) of the total party-list votes they obtained; provided, that
no party-list groups shall have more than three (3) seats (Section 11, RA
7941).

(c) The remaining seats shall, after deducting the seats obtained by the
party-list groups under the immediately preceding paragraph and after
deducting from their total the votes corresponding to those seats, the
remaining seats shall be allotted proportionately to all the party-list groups
which have not secured the maximum three (3) seats under the 2%
threshold rule, in accordance with Section 12 of RA 7941.[23]

Forty-four (44) party-list seats will be awarded under BANATs first interpretation.

The second interpretation presented by BANAT assumes that the 2% vote requirement
is declared unconstitutional, and apportions the seats for party-list representatives by
following Section 12 of R.A. No. 7941. BANAT states that the COMELEC:

(a) shall tally all the votes for the parties, organizations, or coalitions on a
nationwide basis;
(b) rank them according to the number of votes received; and,
(c) allocate party-list representatives proportionately according to
the percentage of votes obtained by each party, organization or coalition
as against the total nationwide votes cast for the party-list system.[24]

BANAT used two formulas to obtain the same results: one is based on the proportional
percentage of the votes received by each party as against the total nationwide party-list
votes, and the other is by making the votes of a party-list with a median percentage of
votes as the divisor in computing the allocation of seats.[25]Thirty-four (34) party-list
seats will be awarded under BANATs second interpretation.

In G.R. No. 179295, Bayan Muna, Abono, and A Teacher criticize both the COMELECs
original 2-4-6 formula and the Veterans formula for systematically preventing all the
party-list seats from being filled up. They claim that both formulas do not factor in the
total number of seats alloted for the entire Party-List System.Bayan Muna, Abono, and
A Teacher reject the three-seat cap, but accept the 2% threshold. After determining the
qualified parties, a second percentage is generated by dividing the votes of a qualified
party by the total votes of all qualified parties only.The number of seats allocated to a
qualified party is computed by multiplying the total party-list seats available with the
second percentage. There will be a first round of seat allocation, limited to using the
whole integers as the equivalent of the number of seats allocated to the concerned
party-list. After all the qualified parties are given their seats, a second round of seat
allocation is conducted. The fractions, or remainders, from the whole integers are
ranked from highest to lowest and the remaining seats on the basis of this ranking are
allocated until all the seats are filled up.[26]

We examine what R.A. No. 7941 prescribes to allocate seats for party-list
representatives.

Section 11(a) of R.A. No. 7941 prescribes the ranking of the participating parties from
the highest to the lowest based on the number of votes they garnered during the
elections.

Table 1. Ranking of the participating parties from the highest to the lowest
based on the number of votes garnered during the elections.[27]

Votes Votes
Rank Party Rank Party
Garnered Garnered
1 BUHAY 1,169,234 48 KALAHI 88,868
2 BAYAN 979,039 49 APOI 79,386
MUNA
3 CIBAC 755,686 50 BP 78,541
4 GABRIELA 621,171 51 AHONBAYAN 78,424
5 APEC 619,657 52 BIGKIS 77,327
6 A TEACHER 490,379 53 PMAP 75,200
7 AKBAYAN 466,112 54 AKAPIN 74,686
8 ALAGAD 423,149 55 PBA 71,544
9 COOP- 409,883 56 GRECON 62,220
NATCCO
10 BUTIL 409,160 57 BTM 60,993
11 BATAS 385,810 58 A SMILE 58,717
12 ARC 374,288 59 NELFFI 57,872
13 ANAKPAWIS 370,261 60 AKSA 57,012
14 ABONO 339,990 61 BAGO 55,846
15 AMIN 338,185 62 BANDILA 54,751
16 AGAP 328,724 63 AHON 54,522
17 AN WARAY 321,503 64 ASAHAN MO 51,722
18 YACAP 310,889 65 AGBIAG! 50,837
19 FPJPM 300,923 66 SPI 50,478
20 UNI-MAD 245,382 67 BAHANDI 46,612
21 ABS 235,086 68 ADD 45,624
22 KAKUSA 228,999 69 AMANG 43,062
23 KABATAAN 228,637 70 ABAY PARAK 42,282
24 ABA-AKO 218,818 71 BABAE KA 36,512
25 ALIF 217,822 72 SB 34,835
26 SENIOR 213,058 73 ASAP 34,098
CITIZENS
27 AT 197,872 74 PEP 33,938
28 VFP 196,266 75 ABA 33,903
ILONGGO
29 ANAD 188,521 76 VENDORS 33,691
30 BANAT 177,028 77 ADD-TRIBAL 32,896
31 ANG 170,531 78 ALMANA 32,255
KASANGGA
32 BANTAY 169,801 79 AANGAT KA 29,130
PILIPINO
33 ABAKADA 166,747 80 AAPS 26,271
34 1-UTAK 164,980 81 HAPI 25,781
35 TUCP 162,647 82 AAWAS 22,946
36 COCOFED 155,920 83 SM 20,744
37 AGHAM 146,032 84 AG 16,916
38 ANAK 141,817 85 AGING 16,729
PINOY
39 ABANSE! 130,356 86 APO 16,421
PINAY
40 PM 119,054 87 BIYAYANG 16,241
BUKID
41 AVE 110,769 88 ATS 14,161
42 SUARA 110,732 89 UMDJ 9,445
43 ASSALAM 110,440 90 BUKLOD 8,915
FILIPINA
44 DIWA 107,021 91 LYPAD 8,471
45 ANC 99,636 92 AA-KASOSYO 8,406
 46 SANLAKAS 97,375 93 KASAPI 6,221
47 ABC 90,058 TOTAL 15,950,900

The first clause of Section 11(b) of R.A. No. 7941 states that parties, organizations, and
coalitions receiving at least two percent (2%) of the total votes cast for the party-list
system shall be entitled to one seat each. This clause guarantees a seat to the two-
percenters. In Table 2 below, we use the first 20 party-list candidates for illustration
purposes. The percentage of votes garnered by each party is arrived at by dividing the
number of votes garnered by each party by 15,950,900, the total number of votes cast
for all party-list candidates.

Table 2. The first 20 party-list candidates and their respective percentage

of votes garnered over the total votes for the party-list.[28]

Votes
Garnered over
Votes Guaranteed
Rank Party Total Votes
Garnered Seat
for Party-List,
in %
1 BUHAY 1,169,234 7.33% 1
2 BAYAN MUNA 979,039 6.14% 1
3 CIBAC 755,686 4.74% 1
4 GABRIELA 621,171 3.89% 1
5 APEC 619,657 3.88% 1
6 A TEACHER 490,379 3.07% 1
7 AKBAYAN 466,112 2.92% 1
8 ALAGAD 423,149 2.65% 1
9 COOP-NATCCO 409,883 2.57% 1
10 BUTIL 409,160 2.57% 1
11 BATAS[29] 385,810 2.42% 1
12 ARC 374,288 2.35% 1
13 ANAKPAWIS 370,261 2.32% 1
14 ABONO 339,990 2.13% 1
15 AMIN 338,185 2.12% 1
16 AGAP 328,724 2.06% 1
17 AN WARAY 321,503 2.02% 1
Total 17
 18 YACAP 310,889 1.95% 0
19 FPJPM 300,923 1.89% 0
20 UNI-MAD 245,382 1.54% 0

From Table 2 above, we see that only 17 party-list candidates received at least 2% from
the total number of votes cast for party-list candidates. The 17 qualified party-list
candidates, or the two-percenters, are the party-list candidates that are entitled to one
seat each, or the guaranteed seat. In this first round of seat allocation, we distributed 17
guaranteed seats.
The second clause of Section 11(b) of R.A. No. 7941 provides that those garnering
more than two percent (2%) of the votes shall be entitled to additional seats in
proportion to their total number of votes. This is where petitioners and intervenors
problem with the formula in Veterans lies. Veterans interprets the clause in proportion to
their total number of votes to be in proportion to the votes of the first party. This
interpretation is contrary to the express language of R.A. No. 7941.

We rule that, in computing the allocation of additional seats, the continued operation of
the two percent threshold for the distribution of the additional seats as found in the
second clause of Section 11(b) of R.A. No. 7941 is unconstitutional. This Court finds
that the two percent threshold makes it mathematically impossible to achieve the
maximum number of available party list seats when the number of available party list
seats exceeds 50. The continued operation of the two percent threshold in the
distribution of the additional seats frustrates the attainment of the permissive ceiling that
20% of the members of the House of Representatives shall consist of party-list
representatives.

To illustrate: There are 55 available party-list seats. Suppose there are 50 million votes
cast for the 100 participants in the party list elections. A party that has two percent of
the votes cast, or one million votes, gets a guaranteed seat. Let us further assume that
the first 50 parties all get one million votes. Only 50 parties get a seat despite the
availability of 55 seats. Because of the operation of the two percent threshold, this
situation will repeat itself even if we increase the available party-list seats to 60 seats
and even if we increase the votes cast to 100 million. Thus, even if the maximum
number of parties get two percent of the votes for every party, it is always impossible for
the number of occupied party-list seats to exceed 50 seats as long as the two percent
threshold is present.

We therefore strike down the two percent threshold only in relation to the distribution of
the additional seats as found in the second clause of Section 11(b) of R.A. No.
7941. The two percent threshold presents an unwarranted obstacle to the full
implementation of Section 5(2), Article VI of the Constitution and prevents the
attainment of the broadest possible representation of party, sectoral or group interests
in the House of Representatives.[30]
In determining the allocation of seats for party-list representatives under Section 11 of
R.A. No. 7941, the following procedure shall be observed:

1. The parties, organizations, and coalitions shall be ranked from the highest
to the lowest based on the number of votes they garnered during the elections.

2. The parties, organizations, and coalitions receiving at least two percent

(2%) of the total votes cast for the party-list system shall be entitled to one guaranteed
seat each.

3. Those garnering sufficient number of votes, according to the ranking in

paragraph 1, shall be entitled to additional seats in proportion to their total number of
votes until all the additional seats are allocated.

4. Each party, organization, or coalition shall be entitled to not more than

three (3) seats.

In computing the additional seats, the guaranteed seats shall no longer be included
because they have already been allocated, at one seat each, to every two-
percenter.Thus, the remaining available seats for allocation as additional seats are the
maximum seats reserved under the Party List System less the guaranteed
seats. Fractional seats are disregarded in the absence of a provision in R.A. No. 7941
allowing for a rounding off of fractional seats.

In declaring the two percent threshold unconstitutional, we do not limit our allocation of
additional seats in Table 3 below to the two-percenters. The percentage of votes
garnered by each party-list candidate is arrived at by dividing the number of votes
garnered by each party by 15,950,900, the total number of votes cast for party-list
candidates. There are two steps in the second round of seat allocation. First, the
percentage is multiplied by the remaining available seats, 38, which is the difference
between the 55 maximum seats reserved under the Party-List System and the 17
guaranteed seats of the two-percenters. The whole integer of the product of the
percentage and of the remaining available seats corresponds to a partys share in the
remaining available seats. Second, we assign one party-list seat to each of the parties
next in rank until all available seats are completely distributed. We distributed all of the
remaining 38 seats in the second round of seat allocation. Finally, we apply the three-
seat cap to determine the number of seats each qualified party-list candidate is
entitled. Thus:

Table 3. Distribution of Available Party-List Seats

 Votes Guaranteed Additional (B) plus
Applying
Garnered Seat Seats (C), in
the three
over whole
seat cap
Total integers
Votes for
Votes
Rank Party Party
Garnered
List, in %
(First (Second
Round) Round)
(E)
(A) (B) (C) (D)
1 BUHAY 1,169,234 7.33% 1 2.79 3 N.A.
2 BAYAN 979,039 6.14% 1 2.33 3 N.A.
MUNA
3 CIBAC 755,686 4.74% 1 1.80 2 N.A.
4 GABRIELA 621,171 3.89% 1 1.48 2 N.A.
5 APEC 619,657 3.88% 1 1.48 2 N.A.
6 A Teacher 490,379 3.07% 1 1.17 2 N.A.
7 AKBAYAN 466,112 2.92% 1 1.11 2 N.A.
8 ALAGAD 423,149 2.65% 1 1.01 2 N.A.
9[31] COOP- 409,883 2.57% 1 1 2 N.A.
NATCCO
10 BUTIL 409,160 2.57% 1 1 2 N.A.
11 BATAS 385,810 2.42% 1 1 2 N.A.
12 ARC 374,288 2.35% 1 1 2 N.A.
13 ANAKPAWIS 370,261 2.32% 1 1 2 N.A.
14 ABONO 339,990 2.13% 1 1 2 N.A.
15 AMIN 338,185 2.12% 1 1 2 N.A.
16 AGAP 328,724 2.06% 1 1 2 N.A.
17 AN WARAY 321,503 2.02% 1 1 2 N.A.
18 YACAP 310,889 1.95% 0 1 1 N.A.
19 FPJPM 300,923 1.89% 0 1 1 N.A.
20 UNI-MAD 245,382 1.54% 0 1 1 N.A.
21 ABS 235,086 1.47% 0 1 1 N.A.
22 KAKUSA 228,999 1.44% 0 1 1 N.A.
23 KABATAAN 228,637 1.43% 0 1 1 N.A.
 24 ABA-AKO 218,818 1.37% 0 1 1 N.A.
25 ALIF 217,822 1.37% 0 1 1 N.A.
26 SENIOR 213,058 1.34% 0 1 1 N.A.
CITIZENS
27 AT 197,872 1.24% 0 1 1 N.A.
28 VFP 196,266 1.23% 0 1 1 N.A.
29 ANAD 188,521 1.18% 0 1 1 N.A.
30 BANAT 177,028 1.11% 0 1 1 N.A.
31 ANG 170,531 1.07% 0 1 1 N.A.
KASANGGA
32 BANTAY 169,801 1.06% 0 1 1 N.A.
33 ABAKADA 166,747 1.05% 0 1 1 N.A.
34 1-UTAK 164,980 1.03% 0 1 1 N.A.
35 TUCP 162,647 1.02% 0 1 1 N.A.
36 COCOFED 155,920 0.98% 0 1 1 N.A.
Total 17 55

Applying the procedure of seat allocation as illustrated in Table 3 above, there are 55
party-list representatives from the 36 winning party-list organizations. All 55 available
party-list seats are filled. The additional seats allocated to the parties with sufficient
number of votes for one whole seat, in no case to exceed a total of three seats for each
party, are shown in column (D).

Participation of Major Political Parties in Party-List Elections

The Constitutional Commission adopted a multi-party system that allowed all political
parties to participate in the party-list elections. The deliberations of the
Constitutional Commission clearly bear this out, thus:

MR. MONSOD. Madam President, I just want to say that we suggested or

proposed the party list system because we wanted to open up the political
system to a pluralistic society through a multiparty system. x x x We are
for opening up the system, and we would like very much for the
sectors to be there. That is why one of the ways to do that is to put a
ceiling on the number of representatives from any single party that
can sit within the 50 allocated under the party list system. x x x.

xxx
MR. MONSOD. Madam President, the candidacy for the 198 seats is not
limited to political parties. My question is this: Are we going to classify for
example Christian Democrats and Social Democrats as political
parties? Can they run under the party list concept or must they be under
the district legislation side of it only?

MR. VILLACORTA. In reply to that query, I think these parties that the
Commissioner mentioned can field candidates for the Senate as well as
for the House of Representatives. Likewise, they can also field sectoral
candidates for the 20 percent or 30 percent, whichever is adopted, of
the seats that we are allocating under the party list system.

MR. MONSOD. In other words, the Christian Democrats can field district
candidates and can also participate in the party list system?

MR. VILLACORTA. Why not? When they come to the party list
system, they will be fielding only sectoral candidates.

MR. MONSOD. May I be clarified on that? Can UNIDO participate in the

party list system?

MR. VILLACORTA. Yes, why not? For as long as they field candidates
who come from the different marginalized sectors that we shall
designate in this Constitution.

MR. MONSOD. Suppose Senator Taada wants to run under BAYAN

group and says that he represents the farmers, would he qualify?

MR. VILLACORTA. No, Senator Taada would not qualify.

MR. MONSOD. But UNIDO can field candidates under the party list
system and say Juan dela Cruz is a farmer. Who would pass on whether
he is a farmer or not?

MR. TADEO. Kay Commissioner Monsod, gusto ko lamang linawin

ito. Political parties, particularly minority political parties, are not
prohibited to participate in the party list election if they can prove
that they are also organized along sectoral lines.

MR. MONSOD. What the Commissioner is saying is that all political

parties can participate because it is precisely the contention of political
parties that they represent the broad base of citizens and that all sectors
are represented in them.Would the Commissioner agree?

MR. TADEO. Ang punto lamang namin, pag pinayagan mo ang UNIDO na
isang political party, it will dominate the party list at mawawalang saysay
din yung sector.Lalamunin mismo ng political parties ang party list
system. Gusto ko lamang bigyan ng diin ang reserve. Hindi ito reserve
seat sa marginalized sectors. Kung titingnan natin itong 198 seats,
reserved din ito sa political parties.

MR. MONSOD. Hindi po reserved iyon kasi anybody can run there. But
my question to Commissioner Villacorta and probably also to
Commissioner Tadeo is that under this system, would UNIDO be banned
from running under the party list system?

MR. VILLACORTA. No, as I said, UNIDO may field sectoral

candidates. On that condition alone, UNIDO may be allowed to
register for the party list system.

MR. MONSOD. May I inquire from Commissioner Tadeo if he shares that

answer?

MR. TADEO. The same.

MR. VILLACORTA. Puwede po ang UNIDO, pero sa sectoral lines.

xxxx

MR. OPLE. x x x In my opinion, this will also create the stimulus for
political parties and mass organizations to seek common ground. For
example, we have the PDP-Laban and the UNIDO. I see no reason why
they should not be able to make common goals with mass organizations
so that the very leadership of these parties can be transformed through
the participation of mass organizations. And if this is true of the
administration parties, this will be true of others like the Partido ng Bayan
which is now being formed. There is no question that they will be attractive
to many mass organizations. In the opposition parties to which we belong,
there will be a stimulus for us to contact mass organizations so that with
their participation, the policies of such parties can be radically transformed
because this amendment will create conditions that will challenge both the
mass organizations and the political parties to come together. And the
party list system is certainly available, although it is open to all the
parties. It is understood that the parties will enter in the roll of the
COMELEC the names of representatives of mass organizations affiliated
with them.So that we may, in time, develop this excellent system that they
have in Europe where labor organizations and cooperatives, for example,
distribute themselves either in the Social Democratic Party and the
Christian Democratic Party in Germany, and their very presence there has
a transforming effect upon the philosophies and the leadership of those
parties.
 It is also a fact well known to all that in the United States, the AFL-CIO
always vote with the Democratic Party. But the businessmen, most of
them, always vote with the Republican Party, meaning that there is no
reason at all why political parties and mass organizations should not
combine, reenforce, influence and interact with each other so that the very
objectives that we set in this Constitution for sectoral representation are
achieved in a wider, more lasting, and more institutionalized way.
Therefore, I support this [Monsod-Villacorta] amendment. It installs
sectoral representation as a constitutional gift, but at the same time, it
challenges the sector to rise to the majesty of being elected
representatives later on through a party list system; and even beyond that,
to become actual political parties capable of contesting political power in
the wider constitutional arena for major political parties.

x x x [32] (Emphasis supplied)

R.A. No. 7941 provided the details for the concepts put forward by the Constitutional
Commission. Section 3 of R.A. No. 7941 reads:

Definition of Terms. (a) The party-list system is a mechanism of

proportional representation in the election of representatives to the House
of Representatives from national, regional and sectoral parties or
organizations or coalitions thereof registered with the Commission on
Elections (COMELEC). Component parties or organizations of a coalition
may participate independently provided the coalition of which they form
part does not participate in the party-list system.

(b) A party means either a political party or a sectoral party or a coalition

of parties.

(c) A political party refers to an organized group of citizens advocating an

ideology or platform, principles and policies for the general conduct of
government and which, as the most immediate means of securing their
adoption, regularly nominates and supports certain of its leaders and
members as candidates for public office.

It is a national party when its constituency is spread over the geographical

territory of at least a majority of the regions. It is a regional party when its
constituency is spread over the geographical territory of at least a majority
of the cities and provinces comprising the region.

(d) A sectoral party refers to an organized group of citizens belonging to

any of the sectors enumerated in Section 5 hereof whose principal
advocacy pertains to the special interests and concerns of their sector,
 (e) A sectoral organization refers to a group of citizens or a coalition of
groups of citizens who share similar physical attributes or characteristics,
employment, interests or concerns.

(f) A coalition refers to an aggrupation of duly registered national, regional,

sectoral parties or organizations for political and/or election purposes.

Congress, in enacting R.A. No. 7941, put the three-seat cap to prevent any party from
dominating the party-list elections.

Neither the Constitution nor R.A. No. 7941 prohibits major political parties from
participating in the party-list system. On the contrary, the framers of the Constitution
clearly intended the major political parties to participate in party-list elections through
their sectoral wings. In fact, the members of the Constitutional Commission voted down,
19-22, any permanent sectoral seats, and in the alternative the reservation of the party-
list system to the sectoral groups.[33] In defining a party that participates in party-list
elections as either a political party or a sectoral party, R.A. No. 7941 also clearly
intended that major political parties will participate in the party-list elections.Excluding
the major political parties in party-list elections is manifestly against the Constitution, the
intent of the Constitutional Commission, and R.A. No. 7941. This Court cannot engage
in socio-political engineering and judicially legislate the exclusion of major political
parties from the party-list elections in patent violation of the Constitution and the law.

Read together, R.A. No. 7941 and the deliberations of the Constitutional Commission
state that major political parties are allowed to establish, or form coalitions with, sectoral
organizations for electoral or political purposes. There should not be a problem if, for
example, the Liberal Party participates in the party-list election through the Kabataang
Liberal ng Pilipinas (KALIPI), its sectoral youth wing. The other major political parties
can thus organize, or affiliate with, their chosen sector or sectors. To further illustrate,
the Nacionalista Party can establish a fisherfolk wing to participate in the party-list
election, and this fisherfolk wing can field its fisherfolk nominees. Kabalikat ng Malayang
Pilipino (KAMPI) can do the same for the urban poor.

The qualifications of party-list nominees are prescribed in Section 9 of R.A. No. 7941:

Qualifications of Party-List Nominees. No person shall be nominated as

party-list representative unless he is a natural born citizen of the
Philippines, a registered voter, a resident of the Philippines for a period of
not less than one (1) year immediately preceding the day of the elections,
able to read and write, bona fide member of the party or organization
which he seeks to represent for at least ninety (90) days preceding the
day of the election, and is at least twenty-five (25) years of age on the day
of the election.
 In case of a nominee of the youth sector, he must at least be twenty-five
(25) but not more than thirty (30) years of age on the day of the
election. Any youth sectoral representative who attains the age of thirty
(30) during his term shall be allowed to continue until the expiration of his
term.

Under Section 9 of R.A. No. 7941, it is not necessary that the party-list organizations
nominee wallow in poverty, destitution and infirmity[34] as there is no financial status
required in the law. It is enough that the nominee of the sectoral
party/organization/coalition belongs to the marginalized and underrepresented
sectors,[35] that is, if the nominee represents the fisherfolk, he or she must be a
fisherfolk, or if the nominee represents the senior citizens, he or she must be a senior
citizen.

Neither the Constitution nor R.A. No. 7941 mandates the filling-up of the entire 20%
allocation of party-list representatives found in the Constitution. The Constitution, in
paragraph 1, Section 5 of Article VI, left the determination of the number of the
members of the House of Representatives to Congress: The House of Representatives
shall be composed of not more than two hundred and fifty members, unless otherwise
fixed by law, x x x. The 20% allocation of party-list representatives is merely a ceiling;
party-list representatives cannot be more than 20% of the members of the House of
Representatives. However, we cannot allow the continued existence of a provision in
the law which will systematically prevent the constitutionally allocated 20% party-list
representatives from being filled. The three-seat cap, as a limitation to the number of
seats that a qualified party-list organization may occupy, remains a valid statutory
device that prevents any party from dominating the party-list elections.Seats for party-
list representatives shall thus be allocated in accordance with the procedure used in
Table 3 above.

However, by a vote of 8-7, the Court decided to continue the ruling

in Veteransdisallowing major political parties from participating in the party-list elections,
directly or indirectly. Those who voted to continue disallowing major political parties
from the party-list elections joined Chief Justice Reynato S. Puno in his separate
opinion. On the formula to allocate party-list seats, the Court is unanimous in concurring
with this ponencia.

WHEREFORE, we PARTIALLY GRANT the petition. We SET ASIDE the Resolution of

the COMELEC dated 3 August 2007 in NBC No. 07-041 (PL) as well as the Resolution
dated 9 July 2007 in NBC No. 07-60. We declare unconstitutional the two percent
threshold in the distribution of additional party-list seats. The allocation of additional
seats under the Party-List System shall be in accordance with the procedure used in
Table 3 of this Decision. Major political parties are disallowed from participating in party-
list elections. This Decision is immediately executory. No pronouncement as to costs.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 166471 March 22, 2011

TAWANG MULTI-PURPOSE COOPERATIVE Petitioner,

vs.
LA TRINIDAD WATER DISTRICT, Respondent.

DECISION

CARPIO, J.:

The Case

This is a petition for review on certiorari under Rule 45 of the Rules of Court. The
petition1 challenges the 1 October 2004 Judgment2 and 6 November 2004 Order3 of the
Regional Trial Court (RTC), Judicial Region 1, Branch 62, La Trinidad, Benguet, in Civil
Case No. 03-CV-1878.

The Facts

Tawang Multi-Purpose Cooperative (TMPC) is a cooperative, registered with the

Cooperative Development Authority, and organized to provide domestic water services
in Barangay Tawang, La Trinidad, Benguet.

La Trinidad Water District (LTWD) is a local water utility created under Presidential
Decree (PD) No. 198, as amended. It is authorized to supply water for domestic,
industrial and commercial purposes within the municipality of La Trinidad, Benguet.

On 9 October 2000, TMPC filed with the National Water Resources Board (NWRB) an
application for a certificate of public convenience (CPC) to operate and maintain a
waterworks system in Barangay Tawang. LTWD opposed TMPC’s application. LTWD
claimed that, under Section 47 of PD No. 198, as amended, its franchise is exclusive.
Section 47 states that:

Sec. 47. Exclusive Franchise. No franchise shall be granted to any other person or
agency for domestic, industrial or commercial water service within the district or any
portion thereof unless and except to the extent that the board of directors of said district
consents thereto by resolution duly adopted, such resolution, however, shall be subject
to review by the Administration.
In its Resolution No. 04-0702 dated 23 July 2002, the NWRB approved TMPC’s
application for a CPC. In its 15 August 2002 Decision,4 the NWRB held that LTWD’s
franchise cannot be exclusive since exclusive franchises are unconstitutional and found
that TMPC is legally and financially qualified to operate and maintain a waterworks
system. NWRB stated that:

With respect to LTWD’s opposition, this Board observes that:

1. It is a substantial reproduction of its opposition to the application for water permits

previously filed by this same CPC applicant, under WUC No. 98-17 and 98-62 which
was decided upon by this Board on April 27, 2000. The issues being raised by
Oppositor had been already resolved when this Board said in pertinent portions of its
decision:

"The authority granted to LTWD by virtue of P.D. 198 is not Exclusive. While Barangay
Tawang is within their territorial jurisdiction, this does not mean that all others are
excluded in engaging in such service, especially, if the district is not capable of
supplying water within the area. This Board has time and again ruled that the "Exclusive
Franchise" provision under P.D. 198 has misled most water districts to believe that it
likewise extends to be [sic] the waters within their territorial boundaries. Such
ideological adherence collides head on with the constitutional provision that "ALL
WATERS AND NATURAL RESOURCES BELONG TO THE STATE". (Sec. 2, Art. XII)
and that "No franchise, certificate or authorization for the operation of public [sic] shall
be exclusive in character".

xxxx

All the foregoing premises all considered, and finding that Applicant is legally and
financially qualified to operate and maintain a waterworks system; that the said
operation shall redound to the benefit of the homeowners/residents of the subdivision,
thereby, promoting public service in a proper and suitable manner, the instant
application for a Certificate of Public Convenience is, hereby, GRANTED.5

LTWD filed a motion for reconsideration. In its 18 November 2002 Resolution, 6 the
NWRB denied the motion.

LTWD appealed to the RTC.

The RTC’s Ruling

In its 1 October 2004 Judgment, the RTC set aside the NWRB’s 23 July 2002
Resolution and 15 August 2002 Decision and cancelled TMPC’s CPC. The RTC held
that Section 47 is valid. The RTC stated that:

The Constitution uses the term "exclusive in character". To give effect to this provision,
a reasonable, practical and logical interpretation should be adopted without disregard to
the ultimate purpose of the Constitution. What is this ultimate purpose? It is for the
state, through its authorized agencies or instrumentalities, to be able to keep and
maintain ultimate control and supervision over the operation of public utilities. Essential
part of this control and supervision is the authority to grant a franchise for the operation
of a public utility to any person or entity, and to amend or repeal an existing franchise to
serve the requirements of public interest. Thus, what is repugnant to the Constitution is
a grant of franchise "exclusive in character" so as to preclude the State itself from
granting a franchise to any other person or entity than the present grantee when public
interest so requires. In other words, no franchise of whatever nature can preclude the
State, through its duly authorized agencies or instrumentalities, from granting franchise
to any person or entity, or to repeal or amend a franchise already granted.
Consequently, the Constitution does not necessarily prohibit a franchise that is
exclusive on its face, meaning, that the grantee shall be allowed to exercise this present
right or privilege to the exclusion of all others. Nonetheless, the grantee cannot set up
its exclusive franchise against the ultimate authority of the State.7

TMPC filed a motion for reconsideration. In its 6 November 2004 Order, the RTC denied
the motion. Hence, the present petition.

Issue

TMPC raises as issue that the RTC erred in holding that Section 47 of PD No. 198, as
amended, is valid.

The Court’s Ruling

The petition is meritorious.

What cannot be legally done directly cannot be done indirectly. This rule is basic and, to
a reasonable mind, does not need explanation. Indeed, if acts that cannot be legally
done directly can be done indirectly, then all laws would be illusory.

In Alvarez v. PICOP Resources, Inc.,8 the Court held that, "What one cannot do directly,
he cannot do indirectly."9 In Akbayan Citizens Action Party v. Aquino,10 quoting Agan,
Jr. v. Philippine International Air Terminals Co., Inc.,11 the Court held that, "This Court
has long and consistently adhered to the legal maxim that those that cannot be done
directly cannot be done indirectly."12 In Central Bank Employees Association, Inc. v.
Bangko Sentral ng Pilipinas,13the Court held that, "No one is allowed to do indirectly
what he is prohibited to do directly."14

The President, Congress and the Court cannot create directly franchises for the
operation of a public utility that are exclusive in character. The 1935, 1973 and 1987
Constitutions expressly and clearly prohibit the creation of franchises that are exclusive
in character. Section 8, Article XIII of the 1935 Constitution states that:
No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or other
entities organized under the laws of the Philippines, sixty per centum of the capital of
which is owned by citizens of the Philippines, nor shall such franchise, certificate or
authorization be exclusive in character or for a longer period than fifty years.
(Empahsis supplied)

Section 5, Article XIV of the 1973 Constitution states that:

No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or
associations organized under the laws of the Philippines at least sixty per centum of the
capital of which is owned by such citizens, nor shall such franchise, certificate or
authorization be exclusive in character or for a longer period than fifty years.
(Emphasis supplied)

Section 11, Article XII of the 1987 Constitution states that:

No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or
associations organized under the laws of the Philippines, at least sixty per centum of
whose capital is owned by such citizens, nor shall such franchise, certificate or
authorization be exclusive in character or for a longer period than fifty years.
(Emphasis supplied)

Plain words do not require explanation. The 1935, 1973 and 1987 Constitutions are
clear — franchises for the operation of a public utility cannot be exclusive in character.
The 1935, 1973 and 1987 Constitutions expressly and clearly state that, "nor shall
such franchise x x x be exclusive in character." There is no exception.

When the law is clear, there is nothing for the courts to do but to apply it. The duty of the
Court is to apply the law the way it is worded. In Security Bank and Trust Company v.
Regional Trial Court of Makati, Branch 61,15 the Court held that:

Basic is the rule of statutory construction that when the law is clear and
unambiguous, the court is left with no alternative but to apply the same according
to its clear language. As we have held in the case of Quijano v. Development Bank of
the Philippines:

"x x x We cannot see any room for interpretation or construction in the clear and
unambiguous language of the above-quoted provision of law. This Court had
steadfastly adhered to the doctrine that its first and fundamental duty is the
application of the law according to its express terms, interpretation being called for
only when such literal application is impossible. No process of interpretation or
construction need be resorted to where a provision of law peremptorily calls for
application. Where a requirement or condition is made in explicit and
unambiguous terms, no discretion is left to the judiciary. It must see to it that its
mandate is obeyed."16(Emphasis supplied)

In Republic of the Philippines v. Express Telecommunications Co., Inc.,17 the Court held
that, "The Constitution is quite emphatic that the operation of a public utility shall not be
exclusive."18 In Pilipino Telephone Corporation v. National Telecommunications
Commission,19 the Court held that, "Neither Congress nor the NTC can grant an
exclusive ‘franchise, certificate, or any other form of authorization’ to operate a public
utility."20 In National Power Corp. v. Court of Appeals,21 the Court held that, "Exclusivity
of any public franchise has not been favored by this Court such that in most, if not all,
grants by the government to private corporations, the interpretation of rights, privileges
or franchises is taken against the grantee."22 In Radio Communications of the
Philippines, Inc. v. National Telecommunications Commission,23 the Court held that,
"The Constitution mandates that a franchise cannot be exclusive in nature." 24

Indeed, the President, Congress and the Court cannot create directly franchises that are
exclusive in character. What the President, Congress and the Court cannot legally do
directly they cannot do indirectly. Thus, the President, Congress and the Court cannot
create indirectly franchises that are exclusive in character by allowing the Board of
Directors (BOD) of a water district and the Local Water Utilities Administration (LWUA)
to create franchises that are exclusive in character.

In PD No. 198, as amended, former President Ferdinand E. Marcos (President Marcos)

created indirectly franchises that are exclusive in character by allowing the BOD of
LTWD and the LWUA to create directly franchises that are exclusive in character.
Section 47 of PD No. 198, as amended, allows the BOD and the LWUA to create
directly franchises that are exclusive in character. Section 47 states:

Sec. 47. Exclusive Franchise. No franchise shall be granted to any other person or
agency for domestic, industrial or commercial water service within the district or any
portion thereof unless and except to the extent that the board of directors of said
district consents thereto by resolution duly adopted, such resolution, however,
shall be subject to review by the Administration. (Emphasis supplied)

In case of conflict between the Constitution and a statute, the Constitution always
prevails because the Constitution is the basic law to which all other laws must conform
to. The duty of the Court is to uphold the Constitution and to declare void all laws that
do not conform to it.

In Social Justice Society v. Dangerous Drugs Board,25 the Court held that, "It is basic
that if a law or an administrative rule violates any norm of the Constitution, that issuance
is null and void and has no effect. The Constitution is the basic law to which all laws
must conform; no act shall be valid if it conflicts with the Constitution." 26 In Sabio v.
Gordon,27 the Court held that, "the Constitution is the highest law of the land. It is the
‘basic and paramount law to which all other laws must conform.’"28 In Atty. Macalintal v.
Commission on Elections,29the Court held that, "The Constitution is the fundamental
and paramount law of the nation to which all other laws must conform and in
accordance with which all private rights must be determined and all public authority
administered. Laws that do not conform to the Constitution shall be stricken down for
being unconstitutional."30 In Manila Prince Hotel v. Government Service Insurance
System,31 the Court held that:

Under the doctrine of constitutional supremacy, if a law or contract violates any norm
of the constitution that law or contract whether promulgated by the legislative or
by the executive branch or entered into by private persons for private purposes is null
and void and without any force and effect. Thus, since the Constitution is the
fundamental, paramount and supreme law of the nation, it is deemed written in
every statute and contract."32 (Emphasis supplied)

To reiterate, the 1935, 1973 and 1987 Constitutions expressly prohibit the creation of
franchises that are exclusive in character. They uniformly command that "nor shall
such franchise x x x be exclusive in character." This constitutional prohibition is
absolute and accepts no exception. On the other hand, PD No. 198, as amended,
allows the BOD of LTWD and LWUA to create franchises that are exclusive in
character. Section 47 states that, "No franchise shall be granted to any other person or
agency x x x unless and except to the extent that the board of directors consents
thereto x x x subject to review by the Administration." Section 47 creates a glaring
exception to the absolute prohibition in the Constitution. Clearly, it is patently
unconstitutional.

Section 47 gives the BOD and the LWUA the authority to make an exception to the
absolute prohibition in the Constitution. In short, the BOD and the LWUA are given the
discretion to create franchises that are exclusive in character. The BOD and the LWUA
are not even legislative bodies. The BOD is not a regulatory body but simply a
management board of a water district. Indeed, neither the BOD nor the LWUA can be
granted the power to create any exception to the absolute prohibition in the Constitution,
a power that Congress itself cannot exercise.

In Metropolitan Cebu Water District v. Adala,33 the Court categorically declared Section
47 void. The Court held that:

Nonetheless, while the prohibition in Section 47 of P.D. 198 applies to the issuance of
CPCs for the reasons discussed above, the same provision must be deemed void ab
initio for being irreconcilable with Article XIV, Section 5 of the 1973
Constitution which was ratified on January 17, 1973 — the constitution in force when
P.D. 198 was issued on May 25, 1973. Thus, Section 5 of Art. XIV of the 1973
Constitution reads:

"SECTION 5. No franchise, certificate, or any other form of authorization for the

operation of a public utility shall be granted except to citizens of the Philippines or to
corporations or associations organized under the laws of the Philippines at least sixty
per centum of the capital of which is owned by such citizens, nor shall such franchise,
certificate, or authorization be exclusive in character or for a longer period than fifty
years. Neither shall any such franchise or right be granted except under the condition
that it shall be subject to amendment, alteration, or repeal by the Batasang Pambansa
when the public interest so requires. The State shall encourage equity participation in
public utiltities by the general public. The participation of foreign investors in the
governing body of any public utility enterprise shall be limited to their proportionate
share in the capital thereof."

This provision has been substantially reproduced in Article XII Section 11 of the 1987
Constitution, including the prohibition against exclusive franchises.

xxxx

Since Section 47 of P.D. 198, which vests an "exclusive franchise" upon public
utilities, is clearly repugnant to Article XIV, Section 5 of the 1973 Constitution, it is
unconstitutional and may not, therefore, be relied upon by petitioner in support of its
opposition against respondent’s application for CPC and the subsequent grant thereof
by the NWRB.

WHEREFORE, Section 47 of P.D. 198 is unconstitutional.34 (Emphasis supplied)

The dissenting opinion declares Section 47 valid and constitutional. In effect, the
dissenting opinion holds that (1) President Marcos can create indirectly franchises that
are exclusive in character; (2) the BOD can create directly franchises that are exclusive
in character; (3) the LWUA can create directly franchises that are exclusive in character;
and (4) the Court should allow the creation of franchises that are exclusive in character.

Stated differently, the dissenting opinion holds that (1) President Marcos can violate
indirectly the Constitution; (2) the BOD can violate directly the Constitution; (3) the
LWUA can violate directly the Constitution; and (4) the Court should allow the violation
of the Constitution.

The dissenting opinion states that the BOD and the LWUA can create franchises that
are exclusive in character "based on reasonable and legitimate grounds," and such
creation "should not be construed as a violation of the constitutional mandate on the
non-exclusivity of a franchise" because it "merely refers to regulation" which is part of
"the government’s inherent right to exercise police power in regulating public utilities"
and that their violation of the Constitution "would carry with it the legal presumption that
public officers regularly perform their official functions." The dissenting opinion states
that:

To begin with, a government agency’s refusal to grant a franchise to another entity,

based on reasonable and legitimate grounds, should not be construed as a violation of
the constitutional mandate on the non-exclusivity of a franchise; this merely refers to
regulation, which the Constitution does not prohibit. To say that a legal provision is
unconstitutional simply because it enables a government instrumentality to determine
the propriety of granting a franchise is contrary to the government’s inherent right to
exercise police power in regulating public utilities for the protection of the public and the
utilities themselves. The refusal of the local water district or the LWUA to consent to the
grant of other franchises would carry with it the legal presumption that public officers
regularly perform their official functions.

The dissenting opinion states two "reasonable and legitimate grounds" for the creation
of exclusive franchise: (1) protection of "the government’s investment,"35 and (2)
avoidance of "a situation where ruinous competition could compromise the supply of
public utilities in poor and remote areas."36

There is no "reasonable and legitimate" ground to violate the Constitution. The

Constitution should never be violated by anyone. Right or wrong, the President,
Congress, the Court, the BOD and the LWUA have no choice but to follow the
Constitution. Any act, however noble its intentions, is void if it violates the Constitution.
This rule is basic.

In Social Justice Society,37 the Court held that, "In the discharge of their defined
functions, the three departments of government have no choice but to yield
obedience to the commands of the Constitution. Whatever limits it imposes must
be observed."38 In Sabio,39 the Court held that, "the Constitution is the highest law of
the land. It is ‘the basic and paramount law to which x x x all persons, including
the highest officials of the land, must defer. No act shall be valid, however noble
its intentions, if it conflicts with the Constitution.’"40 In Bengzon v. Drilon,41 the
Court held that, "the three branches of government must discharge their respective
functions within the limits of authority conferred by the Constitution." 42 In Mutuc v.
Commission on Elections,43 the Court held that, "The three departments of
government in the discharge of the functions with which it is [sic] entrusted have
no choice but to yield obedience to [the Constitution’s] commands. Whatever
limits it imposes must be observed."44

Police power does not include the power to violate the Constitution. Police power is the
plenary power vested in Congress to make laws not repugnant to the Constitution.
This rule is basic.

In Metropolitan Manila Development Authority v. Viron Transportation Co., Inc.,45 the

Court held that, "Police power is the plenary power vested in the legislature to make,
ordain, and establish wholesome and reasonable laws, statutes and ordinances, not
repugnant to the Constitution."46 In Carlos Superdrug Corp. v. Department of Social
Welfare and Development,47 the Court held that, police power "is ‘the power vested in
the legislature by the constitution to make, ordain, and establish all manner of
wholesome and reasonable laws, statutes, and ordinances x x x not repugnant to the
constitution.’"48 In Metropolitan Manila Development Authority v. Garin,49 the Court
held that, "police power, as an inherent attribute of sovereignty, is the power vested by
the Constitution in the legislature to make, ordain, and establish all manner of
wholesome and reasonable laws, statutes and ordinances x x x not repugnant to the
Constitution."50

There is no question that the effect of Section 47 is the creation of franchises that are
exclusive in character. Section 47 expressly allows the BOD and the LWUA to create
franchises that are exclusive in character.

The dissenting opinion explains why the BOD and the LWUA should be allowed to
create franchises that are exclusive in character — to protect "the government’s
investment" and to avoid "a situation where ruinous competition could compromise the
supply of public utilities in poor and remote areas." The dissenting opinion declares that
these are "reasonable and legitimate grounds." The dissenting opinion also states that,
"The refusal of the local water district or the LWUA to consent to the grant of other
franchises would carry with it the legal presumption that public officers regularly perform
their official functions."

When the effect of a law is unconstitutional, it is void. In Sabio,51 the Court held that, "A
statute may be declared unconstitutional because it is not within the legislative
power to enact; or it creates or establishes methods or forms that infringe constitutional
principles; or its purpose or effect violates the Constitution or its basic
principles."52 The effect of Section 47 violates the Constitution, thus, it is void.

In Strategic Alliance Development Corporation v. Radstock Securities Limited,53 the

Court held that, "This Court must perform its duty to defend and uphold the
Constitution."54 In Bengzon,55 the Court held that, "The Constitution expressly confers
on the judiciary the power to maintain inviolate what it decrees." 56 In Mutuc,57 the Court
held that:

The concept of the Constitution as the fundamental law, setting forth the criterion for the
validity of any public act whether proceeding from the highest official or the lowest
functionary, is a postulate of our system of government. That is to manifest fealty to the
rule of law, with priority accorded to that which occupies the topmost rung in the legal
hierarchy. The three departments of government in the discharge of the functions with
which it is [sic] entrusted have no choice but to yield obedience to its commands.
Whatever limits it imposes must be observed. Congress in the enactment of statutes
must ever be on guard lest the restrictions on its authority, whether substantive or
formal, be transcended. The Presidency in the execution of the laws cannot ignore or
disregard what it ordains. In its task of applying the law to the facts as found in deciding
cases, the judiciary is called upon to maintain inviolate what is decreed by the
fundamental law. Even its power of judicial review to pass upon the validity of the acts
of the coordinate branches in the course of adjudication is a logical corollary of this
basic principle that the Constitution is paramount. It overrides any governmental
measure that fails to live up to its mandates. Thereby there is a recognition of its being
the supreme law.58
Sustaining the RTC’s ruling would make a dangerous precedent. It will allow Congress
to do indirectly what it cannot do directly. In order to circumvent the constitutional
prohibition on franchises that are exclusive in character, all Congress has to do is to
create a law allowing the BOD and the LWUA to create franchises that are exclusive in
character, as in the present case.

WHEREFORE, we GRANT the petition. We DECLARE Section 47 of Presidential

Decree No. 198 UNCONSTITUTIONAL. We SET ASIDE the 1 October 2004 Judgment
and 6 November 2004 Order of the Regional Trial Court, Judicial Region 1, Branch 62,
La Trinidad, Benguet, in Civil Case No. 03-CV-1878 and REINSTATE the 23 July 2002
Resolution and 15 August 2002 Decision of the National Water Resources Board.

SO ORDERED.