G.R. No. 193978               February 28, 2012 On July 26, 2010, Pres.
010, Pres. Aquino made public in his the Board of Directors/Trustees until December 31,
JELBERT B. GALICTO, Petitioner,  allowances, bonuses and other benefits of Officers
vs.
H.E. PRESIDENT BENIGNO SIMEON C. AQUINO
III, in his capacity as President of the Republic of
the Philippines; ATTY. PAQUITO N. OCHOA, JR.,
in his capacity as Executive Secretary; and
FLORENCIO B. ABAD, in his capacity as
Secretary of the Department of Budget and
Management, Respondents.
RESOLUTION
BRION, J.:
Before us is a Petition for Certiorari and Prohibition
with Application for Writ of Preliminary Injunction
and/or Temporary Restraining Order,1 seeking to
nullify and enjoin the implementation of Executive
Order No. (EO) 7 issued by the Office of the President
on September 8, 2010. Petitioner Jelbert B. Galicto
asserts that EO 7 is unconstitutional for having been
issued beyond the powers of the President and for
being in breach of existing laws.
The petitioner is a Filipino citizen and an employee of
the Philippine Health Insurance Corporation
(PhilHealth).2 He is currently holding the position of
Court Attorney IV and is assigned at the PhilHealth
Regional Office CARAGA.3
Respondent Benigno Simeon C. Aquino III is the
President of the Republic of the Philippines (Pres.
Aquino); he issued EO 7 and has the duty of
implementing it. Respondent Paquito N. Ochoa, Jr. is
the incumbent Executive Secretary and, as the alter
ego of Pres. Aquino, is tasked with the
implementation of EO 7. Respondent Florencio B.
Abad is the incumbent Secretary of the Department of
Budget and Management (DBM) charged with the
implementation of EO 7.4
The Antecedent Facts
first State of the Nation Address the alleged excessive
and Members of the Board of Directors of the Manila
Waterworks and Sewerage System – a government
owned and controlled corporation (GOCC) which has
been unable to meet its standing
obligations.5 Subsequently, the Senate of the
Philippines (Senate), through the Senate Committee
on Government Corporations and Public Enterprises,
conducted an inquiry in aid of legislation on the
reported excessive salaries, allowances, and other
benefits of GOCCs and government financial
institutions (GFIs).6
Based on its findings that "officials and governing
boards of various [GOCCs] and [GFIs] x x x have
been granting themselves unwarranted allowances,
bonuses, incentives, stock options, and other benefits
[as well as other] irregular and abusive practices,"7 the
Senate issued Senate Resolution No. 17 "urging the
President to order the immediate suspension of the
unusually large and apparently excessive allowances,
bonuses, incentives and other perks of members of
the governing boards of [GOCCs] and [GFIs]."8
Heeding the call of Congress, Pres. Aquino, on
September 8, 2010, issued EO 7, entitled "Directing
the Rationalization of the Compensation and Position
Classification System in the [GOCCs] and [GFIs], and
for Other Purposes." EO 7 provided for the guiding
principles and framework to establish a fixed
compensation and position classification system for
GOCCs and GFIs. A Task Force was also created to
review all remunerations of GOCC and GFI
employees and officers, while GOCCs and GFIs were
ordered to submit to the Task Force information
regarding their compensation. Finally, EO 7 ordered
(1) a moratorium on the increases in the salaries and
other forms of compensation, except salary
adjustments under EO 8011 and EO 900, of all
GOCC and GFI employees for an indefinite period to
be set by the President,9 and (2) a suspension of all
allowances, bonuses and incentives of members of
2010.10
EO 7 was published on September 10, 2010.11 It took
effect on September 25, 2010 and precluded the
Board of Directors, Trustees and/or Officers of
GOCCs from granting and releasing bonuses and
allowances to members of the board of directors, and
from increasing salary rates of and granting new or
additional benefits and allowances to their employees.
The Petition
The petitioner claims that as a PhilHealth employee,
he is affected by the implementation of EO 7, which
was issued with grave abuse of discretion amounting
to lack or excess of jurisdiction, based on the
following arguments:
I.
EXECUTIVE ORDER NO. 7 IS NULL AND VOID
FOR LACK OF LEGAL BASIS DUE TO THE
FOLLOWING GROUNDS:
A. P.D. 985 IS NOT APPLICABLE AS BASIS FOR
EXECUTIVE ORDER NO. 7 BECAUSE THE
GOVERNMENT-OWNED AND CONTROLLED
CORPORATIONS WERE SUBSEQUENTLY
GRANTED THE POWER TO FIX COMPENSATION
LONG AFTER SUCH POWER HAS BEEN
REVOKED BY P.D. 1597 AND R.A. 6758.
B. THE GOVERNMENT-OWNED AND
CONTROLLED CORPORATIONS DO NOT NEED
TO HAVE ITS COMPENSATION PLANS, RATES
AND POLICIES REVIEWED BY THE DBM AND
APPROVED BY THE PRESIDENT BECAUSE P.D.
1597 REQUIRES ONLY THE GOCCs TO REPORT
TO THE OFFICE TO THE PRESIDENT THEIR
COMPENSATION PLANS AND RATES BUT THE
SAME DOES NOT GIVE THE PRESIDENT THE
POWER OF CONTROL OVER THE FISCAL POWER
OF THE GOCCs.
C. J.R. NO. 4, [SERIES] 2009 IS NOT APPLICABLE
AS LEGAL BASIS BECAUSE IT HAD NOT RIPENED
INTO X X X LAW, THE SAME NOT HAVING BEEN
PUBLISHED.
D. ASSUMING ARGUENDO THAT J.R. NO. 1, S.
2004 (sic) AND J.R. 4, S. 2009 ARE VALID, STILL
THEY ARE NOT APPLICABLE AS LEGAL BASIS
BECAUSE THEY ARE NOT LAWS WHICH MAY
VALIDLY DELEGATE POWER TO THE PRESIDENT
TO SUSPEND THE POWER OF THE BOARD TO
FIX COMPENSATION.
II.
EXECUTIVE ORDER NO. 7 IS INVALID FOR
DIVESTING THE BOARD OF DIRECTORS OF [THE]
GOCCS OF THEIR POWER TO FIX THE
COMPENSATION, A POWER WHICH IS A
LEGISLATIVE GRANT AND WHICH COULD NOT
BE REVOKED OR MODIFIED BY AN EXECUTIVE
FIAT.
III.
EXECUTIVE ORDER NO. 7 IS BY SUBSTANCE A
LAW, WHICH IS A DEROGATION OF
CONGRESSIONAL PREROGATIVE AND IS
THEREFORE UNCONSTITUTIONAL.
IV.
THE ACTS OF SUSPENDING AND IMPOSING
MORATORIUM ARE ULTRA VIRES ACTS
BECAUSE J.R. NO. 4 DOES NOT EXPRESSLY
AUTHORIZE THE PRESIDENT TO EXERCISE
SUCH POWERS.
V.
EXECUTIVE ORDER NO. 7 IS AN INVALID
ISSUANCE BECAUSE IT HAS NO SUFFICIENT
STANDARDS AND IS THEREFORE ARBITRARY,
UNREASONABLE AND A VIOLATION OF
SUBSTANTIVE DUE PROCESS.
VI.
EXECUTIVE ORDER NO. 7 INVOLVES THE
DETERMINATION AND DISCRETION AS TO WHAT
THE LAW SHALL BE AND IS THEREFORE INVALID
FOR ITS USURPATION OF LEGISLATIVE POWER.
VII.
CONSISTENT WITH THE DECISION OF THE
SUPREME COURT IN PIMENTEL V. AGUIRRE
CASE, EXECUTIVE ORDER NO. 7 IS ONLY
DIRECTORY AND NOT MANDATORY.12
The Case for the Respondents
On December 13, 2010, the respondents filed their
Comment. They pointed out the following procedural
defects as grounds for the petition’s dismissal: (1) the
petitioner lacks locus standi; (2) the petitioner failed to
attach a board resolution or secretary’s certificate
authorizing him to question EO 7 in behalf of
PhilHealth; (3) the petitioner’s signature does not
indicate his PTR Number, Mandatory Continuing
Legal Education (MCLE) Compliance Number and
Integrated Bar of the Philippines (IBP) Number; (4)
the jurat of the Verification and Certification of Non-
Forum Shopping failed to indicate a valid identification
card as provided under A.M. No. 02-8-13-SC; (5) the
President should be dropped as a party respondent
as he is immune from suit; and (6) certiorari is not
applicable to this case.13
The respondents also raised substantive defenses to
support the validity of EO 7. They claim that the
President exercises control over the governing boards
of the GOCCs and GFIs; thus, he can fix their
compensation packages. In addition, EO 7 was
issued in accordance with law for the purpose of
controlling the grant of excessive salaries,
allowances, incentives and other benefits to GOCC
and GFI employees. They also advocate the validity
of Joint Resolution (J.R.) No. 4, which they point to as
the authority for issuing EO 7.14
Meanwhile, on June 6, 2011, Congress enacted
Republic Act (R.A.) No. 10149,15 otherwise known as
the "GOCC Governance Act of 2011." Section 11 of
RA 10149 expressly authorizes the President to fix
the compensation framework of GOCCs and GFIs.
The Court’s Ruling
We resolve to DISMISS the petition for its patent
formal and procedural infirmities, and for having been
mooted by subsequent events.
A. Certiorari is not the proper remedy.
Under the Rules of Court, petitions for Certiorari and
Prohibition are availed of to question judicial, quasi-
judicial and mandatory acts. Since the issuance of an
EO is not judicial, quasi-judicial or a mandatory act, a
petition for certiorari and prohibition is an incorrect
remedy; instead a petition for declaratory relief under
Rule 63 of the Rules of Court, filed with the Regional
Trial Court (RTC), is the proper recourse to assail the
validity of EO 7:
Section 1. Who may file petition. Any person
interested under a deed, will, contract or other written
instrument, whose rights are affected by a statute,
executive order or regulation, ordinance, or any other
governmental regulation may, before breach or
violation thereof, bring an action in the appropriate
Regional Trial Court to determine any question of
construction or validity arising, and for a declaration of
his rights or duties, thereunder. (Emphases ours.)
Liga ng mga Barangay National v. City Mayor of
Manila16 is a case in point.17 In Liga, we dismissed the
petition for certiorari to set aside an EO issued by a
City Mayor and insisted that a petition for declaratory
relief should have been filed with the RTC. We
painstakingly ruled:
After due deliberation on the pleadings filed, we
resolve to dismiss this petition for certiorari.
First, the respondents neither acted in any judicial or
quasi-judicial capacity nor arrogated unto themselves
any judicial or quasi-judicial prerogatives. A petition
for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure is a special civil action that may be invoked
only against a tribunal, board, or officer exercising
judicial or quasi-judicial functions.
Section 1, Rule 65 of the 1997 Rules of Civil
Procedure provides:
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, or 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.
Elsewise stated, for a writ of certiorari to issue, the
following requisites must concur: (1) it must be
directed against a tribunal, board, or officer exercising
judicial or quasi-judicial functions; (2) the tribunal,
board, or officer must have acted without or in excess
of jurisdiction or with grave abuse of discretion
amounting [to] lack or excess of jurisdiction; and (3)
there is no appeal or any plain, speedy, and adequate
remedy in the ordinary course of law.
A respondent is said to be
exercising judicial function  where he has  the power to
determine what the law is and what the legal rights of
the parties are, and then undertakes to determine
these questions and adjudicate upon the rights of the
parties.
Quasi-judicial function,  on the other hand, is "a term
which applies to the actions, discretion, etc., of public
administrative officers or bodies … required to
investigate facts or ascertain the existence of facts,
hold hearings, and draw conclusions from them as a
basis for their official action and to exercise discretion
of a judicial nature."
Before a tribunal, board, or officer may exercise
judicial or quasi-judicial acts, it is necessary that there
be a law that gives rise to some specific rights of
persons or property under which adverse claims to
such rights are made, and the controversy ensuing
therefrom is brought before a tribunal, board, or
officer clothed with power and authority to determine
the law and adjudicate the respective rights of the
contending parties.
The respondents do not fall within the ambit
of tribunal, board, or officer exercising judicial or
quasi-judicial functions.  As correctly pointed out by
the respondents, the enactment by the City Council of
Manila of the assailed ordinance and the issuance by
respondent Mayor of the questioned executive order
were done in the exercise of legislative and executive
functions, respectively, and not of judicial or quasi-
judicial functions. On this score alone, certiorari will
not lie.
Second, although the instant petition is styled as a
petition for certiorari, in essence, it seeks the
declaration by this Court of the unconstitutionality or
illegality of the questioned ordinance and executive
order. It, thus, partakes of the nature of a petition for
declaratory relief over which this Court has only
appellate, not original, jurisdiction. Section 5, Article
VIII of the Constitution provides:
Sec. 5. The Supreme Court shall have the following
powers:
(1) Exercise original jurisdiction over cases affecting
ambassadors, other public ministers and consuls, and
over petitions for certiorari, prohibition,
mandamus, quo warranto, and habeas corpus.
(2) Review, revise, reverse, modify, or affirm on
appeal or certiorari as the law or the Rules of Court
may provide, final judgments and orders of lower
courts in:
(a) All cases in which the constitutionality or validity of
any treaty, international or executive agreement, law,
presidential decree, proclamation, order,
instruction, ordinance, or regulation is in question.
(Italics supplied).
As such, this petition must necessar[ily] fail, as this
Court does not have original jurisdiction over a
petition for declaratory relief even if only questions of
law are involved.18
Likewise, in Southern Hemisphere Engagement
Network, Inc. v. Anti Terrorism Council,19 we similarly
dismissed the petitions for certiorari and prohibition
challenging the constitutionality of R.A. No. 9372,
otherwise known as the "Human Security Act of
2007," since the respondents therein (members of the
Anti-Terrorism Council) did not exercise judicial or
quasi-judicial functions.
While we have recognized in the past that we can
exercise the discretion and rulemaking authority we
are granted under the Constitution,20 and set aside
procedural considerations to permit parties to bring a
suit before us at the first instance through certiorari
and/or prohibition,21 this liberal policy remains to be an
exception to the general rule, and thus, has its limits.
In Concepcion v. Commission on Elections
(COMELEC),22 we emphasized the importance of
availing of the proper remedies and cautioned against
the wrongful use of certiorari in order to assail the
quasi-legislative acts of the COMELEC, especially by
the wrong party. In ruling that liberality and the
transcendental doctrine cannot trump blatant
disregard of procedural rules, and considering that the
petitioner had other available remedies (such as a
petition for declaratory relief with the appropriate RTC
under the terms of Rule 63 of the Rules of Court), as
in this case, we categorically ruled:
The petitioner’s unusual approaches and use of Rule
65 of the Rules of Court do not appear to us to be the
result of any error in reading Rule 65, given the way
the petition was crafted. Rather, it was a backdoor
approach to achieve what the petitioner could not
directly do in his individual capacity under Rule 65. It
was, at the very least, an attempted bypass of other
available, albeit lengthier, modes of review that the
Rules of Court provide. While we stop short of
concluding that the petitioner’s approaches constitute
an abuse of process through a manipulative reading
and application of the Rules of Court, we nevertheless
resolve that the petition should be dismissed for its
blatant violation of the Rules. The transgressions
alleged in a petition, however weighty they may
sound, cannot be justifications for blatantly
disregarding the rules of procedure, particularly when
remedial measures were available under these same
rules to achieve the petitioner’s objectives. For our
part, we cannot and should not – in the name of
liberality and the "transcendental importance" doctrine
– entertain these types of petitions. As we held in the
very recent case of Lozano, et al. vs. Nograles, albeit
from a different perspective, our liberal approach has
its limits and should not be abused.23 [emphasis
supplied]
B. Petitioner lacks locus standi.
"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."24 This requirement
of standing relates to the constitutional mandate that
this Court settle only actual cases or controversies.25
Thus, as a general rule, a party is allowed to "raise a
constitutional question" when (1) he can show that he
will personally suffer some actual or threatened injury
because 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.26
Jurisprudence defines interest as "material interest,
an interest in issue and to be affected by the decree,
as distinguished from mere interest in the question
involved, or a mere incidental interest. By real interest
is meant a present substantial interest, as
distinguished from a mere expectancy or a future,
contingent, subordinate, or consequential interest."27
To support his claim that he has locus standi to file
the present petition, the petitioner contends that as an
employee of PhilHealth, he "stands to be prejudiced
by [EO] 7, which suspends or imposes a moratorium
on the grants of salary increases or new or increased
benefits to officers and employees of GOCC[s] and x
x x curtail[s] the prerogative of those officers who are
to fix and determine his compensation."28 The
petitioner also claims that he has standing as a
member of the bar in good standing who has an
interest in ensuring that laws and orders of the
Philippine government are legally and validly issued
and implemented.
The respondents meanwhile argue that the petitioner
is not a real party-in-interest since future increases in
salaries and other benefits are merely contingent
events or expectancies.29 The petitioner, too, is not
asserting a public right for which he is entitled to seek
judicial protection. Section 9 of EO 7 reads:
Section 9. Moratorium on Increases in Salaries,
Allowances, Incentives and Other Benefits. –
Moratorium on increases in the rates of salaries, and
the grant of new increases in the rates of allowances,
incentives and other benefits, except salary
adjustments pursuant to Executive Order No. 8011
dated June 17, 2009 and Executive Order No. 900
dated June 23, 2010, are hereby imposed until
specifically authorized by the President. [emphasis
ours]
In the present case, we are not convinced that the
petitioner has demonstrated that he has a personal
stake or material interest in the outcome of the case
because his interest, if any, is speculative and based
on a mere expectancy. In this case, the curtailment of
future increases in his salaries and other benefits
cannot but be characterized as contingent events or
expectancies. To be sure, he has no vested rights to
salary increases and, therefore, the absence of such
right deprives the petitioner of legal standing to assail
EO 7.
It has been held that as to the element of injury, such
aspect is not something that just anybody with some
grievance or pain may assert. It has to be direct and
substantial to make it worth the court’s time, as well
as the effort of inquiry into the constitutionality of the
acts of another department of government. If the
asserted injury is more imagined than real, or is
merely superficial and insubstantial, then the courts
may end up being importuned to decide a matter that
does not really justify such an excursion into
constitutional adjudication.30 The rationale for this
constitutional requirement of locus standi is by no
means trifle. Not only does it assure the vigorous
adversary presentation of the case; more importantly,
it must suffice to warrant the Judiciary’s overruling the
determination of a coordinate, democratically elected
organ of government, such as the President, and the
clear approval by Congress, in this case. Indeed, the
rationale goes to the very essence of representative
democracies.31
Neither can the lack of locus standi be cured by the
petitioner’s claim that he is instituting the present
petition as a member of the bar in good standing who
has an interest in ensuring that laws and orders of the
Philippine government are legally and validly issued.
This supposed interest has been branded by the
Court in Integrated Bar of the Phils. (IBP) v. Hon.
Zamora,32 "as too general an interest which is shared
by other groups and [by] the whole citizenry."33 Thus,
the Court ruled in IBP that the mere invocation by the
IBP of its duty to preserve the rule of law and nothing
more, while undoubtedly true, is not sufficient to
clothe it with standing in that case. The Court made a
similar ruling in Prof. David v. Pres. Macapagal-
Arroyo34 and held that the petitioners therein, who are
national officers of the IBP, have no legal standing,
having failed to allege any direct or potential injury
which the IBP, as an institution, or its members may
suffer as a consequence of the issuance of
Presidential Proclamation No. 1017 and General
Order No. 5.35
We note that while the petition raises vital
constitutional and statutory questions concerning the
power of the President to fix the compensation
packages of GOCCs and GFIs with possible
implications on their officials and employees, the
same cannot "infuse" or give the petitioner locus
standi under the transcendental importance or
paramount public interest doctrine. In Velarde v.
Social Justice Society,36 we held that even if the Court
could have exempted the case from the stringent
locus standi requirement, such heroic effort would be
futile because the transcendental issue could not be
resolved any way, due to procedural infirmities and
shortcomings, as in the present case.37 In other words,
giving due course to the present petition which is
saddled with formal and procedural infirmities
explained above in this Resolution, cannot but be an
exercise in futility that does not merit the Court’s
liberality. As we emphasized in Lozano v.
Nograles,38 "while the Court has taken an
increasingly liberal approach to the rule of locus
standi, evolving from the stringent requirements
of ‘personal injury’ to the broader ‘transcendental
importance’ doctrine, such liberality is not to be
abused."39
Finally, since the petitioner has failed to demonstrate
a material and personal interest in the issue in
dispute, he cannot also be considered to have filed
the present case as a representative of PhilHealth. In
this regard, we cannot ignore or excuse the blatant
failure of the petitioner to provide a Board Resolution
or a Secretary’s Certificate from PhilHealth to act as
its representative.
C. The petition has a defective jurat.
The respondents claim that the petition should be
dismissed for failing to comply with Section 3, Rule 7
of the Rules of Civil Procedure, which requires the
party or the counsel representing him to sign the
pleading and indicate an address that should not be a
post office box. The petition also allegedly violated the
Supreme Court En Banc Resolution dated November
12, 2001, requiring counsels to indicate in their
pleadings their Roll of Attorneys Number, their PTR
Number and their IBP Official Receipt or Lifetime
Member Number; otherwise, the pleadings would be
considered unsigned and dismissible. Bar Matter No.
1922 likewise states that a counsel should note down
his MCLE Certificate of Compliance or Certificate of
Exemption in the pleading, but the petitioner had
failed to do so.40
We do not see any violation of Section 3, Rule 7 of
the Rules of Civil Procedure as the petition bears the
petitioner’s signature and office address. The present
suit was brought before this Court by the petitioner
himself as a party litigant and not through counsel.
Therefore, the requirements under the Supreme Court
En Banc Resolution dated November 12, 2001 and
Bar Matter No. 1922 do not apply. In Bar Matter No.
1132, April 1, 2003, we clarified that a party who is
not a lawyer is not precluded from signing his own
pleadings as this is allowed by the Rules of Court; the
purpose of requiring a counsel to indicate his IBP
Number and PTR Number is merely to protect the
public from bogus lawyers. A similar construction
should be given to Bar Matter No. 1922, which
requires lawyers to indicate their MCLE Certificate of
Compliance or Certificate of Exemption; otherwise,
the provision that allows parties to sign their own
pleadings will be negated.
However, the point raised by the respondents
regarding the petitioner’s defective jurat is correct.
Indeed, A.M. No. 02-8-13-SC, dated February 19,
2008, calls for a current identification document
issued by an official agency bearing the photograph
and signature of the individual as competent evidence
of identity. Nevertheless, we hasten to clarify that the
defective jurat in the Verification/Certification of Non-
Forum Shopping is not a fatal defect, as we held in In-
N-Out Burger, Inc. v. Sehwani, Incorporated.41 The
verification is only a formal, not a jurisdictional,
requirement that the Court may waive.
D. The petition has been mooted by supervening
events.
Because of the transitory nature of EO 7, it has been
pointed out that the present case has already been
rendered moot by these supervening events: (1) the
lapse on December 31, 2010 of Section 10 of EO 7
that suspended the allowances and bonuses of the
directors and trustees of GOCCs and GFIs; and (2)
the enactment of R.A. No. 10149 amending the
provisions in the charters of GOCCs and GFIs
empowering their board of directors/trustees to
determine their own compensation system, in favor of
the grant of authority to the President to perform this
act.
With the enactment of the GOCC Governance Act of
2011, the President is now authorized to fix the
compensation framework of GOCCs and GFIs. The
pertinent provisions read:
Section 5. Creation of the Governance Commission
for Government-Owned or -Controlled Corporations.
— There is hereby created an advisory, monitoring,
and oversight body with authority to formulate,
implement and coordinate policies to be known as the
Governance Commission for Government-Owned or-
Controlled Corporations, hereinafter referred to as the
GCG, which shall be attached to the Office of the
President. The GCG shall have the following powers
and functions:
xxxx
h) Conduct compensation studies, develop and
recommend to the President a competitive
compensation and remuneration system which shall
attract and retain talent, at the same time allowing the
GOCC to be financially sound and sustainable;
xxxx
Section 8. Coverage of the Compensation and
Position Classification System. — The GCG, after
conducting a compensation study, shall develop a
Compensation and Position Classification System
which shall apply to all officers and employees of the
GOCCs whether under the Salary Standardization
Law or exempt therefrom and shall consist of classes
of positions grouped into such categories as the GCG
may determine, subject to approval of the President.
Section 9. Position Titles and Salary Grades. — All
positions in the Positions Classification System, as
determined by the GCG and as approved by the
President, shall be allocated to their proper position
titles and salary grades in accordance with an Index
of Occupational Services, Position Titles and Salary
Grades of the Compensation and Position
Classification System, which shall be prepared by the
GCG and approved by the President.
academic exercise. Any further discussion of the
constitutionality of EO 7 serves no useful purpose
since such issue is moot in its face in light of the
enactment of R.A. No. 10149. In the words of the
eminent constitutional law expert, Fr. Joaquin Bernas,
S.J., "the Court normally [will not] entertain a petition
touching on an issue that has become moot because
x x x there would [be] no longer x x x a ‘flesh and
blood’ case for the Court to resolve."44

xxxx All told, in view of the supervening events rendering

the petition moot, as well as its patent formal and
[N]o GOCC shall be exempt from the coverage of the procedural infirmities, we no longer see any reason
Compensation and Position Classification System for the Court to resolve the other issues raised in the
developed by the GCG under this Act. certiorari petition.

As may be gleaned from these provisions, the new WHEREFORE, premises considered, the petition is
law amended R.A. No. 7875 and other laws that DISMISSED. No costs.
enabled certain GOCCs and GFIs to fix their own
compensation frameworks; the law now authorizes SO ORDERED.
the President to fix the compensation and position
classification system for all GOCCs and GFIs, as well ARTURO D. BRION
as other entities covered by the law. This means that, Associate Justice
the President can now reissue an EO containing
these same provisions without any legal
constraints.1âwphi1

A moot case is "one that ceases to present a

justiciable controversy by virtue of supervening
events, so that a declaration thereon would be of no
practical use or value."42 "[A]n action is considered
‘moot’ when it no longer presents a justiciable
controversy because the issues involved have
become academic or dead[,] or when the matter in
dispute has already been resolved and hence, one is
not entitled to judicial intervention unless the issue is
likely to be raised again between the parties x x x.
Simply stated, there is nothing for the x x x court to
resolve as [its] determination x x x has been
overtaken by subsequent events."43

This is the present situation here. Congress, thru R.A.

No. 10149, has expressly empowered the President
to establish the compensation systems of GOCCs
and GFIs. For the Court to still rule upon the
supposed unconstitutionality of EO 7 will merely be an
G.R. No. 192791               April 24, 2012
DENNIS A. B. FUNA, Petitioner, vs.
THE CHAIRMAN, COMMISSION ON AUDIT,
REYNALDO A. VILLAR, Respondent.
DECISION
In this Petition for Certiorari and Prohibition under
Rule 65, Dennis A. B. Funa challenges the
constitutionality of the appointment of Reynaldo A.
Villar as Chairman of the Commission on Audit and
accordingly prays that a judgment issue "declaring the
unconstitutionality" of the appointment.
The facts of the case are as follows:
On February 15, 2001, President Gloria Macapagal-
Arroyo (President Macapagal-Arroyo) appointed
Guillermo N. Carague (Carague) as Chairman of the
Commission on Audit (COA) for a term of seven (7)
years, pursuant to the 1987 Constitution.1 Carague’s
term of office started on February 2, 2001 to end on
February 2, 2008.
Meanwhile, on February 7, 2004, President
Macapagal-Arroyo appointed Reynaldo A. Villar
(Villar) as the third member of the COA for a term of
seven (7) years starting February 2, 2004 until
February 2, 2011.
Following the retirement of Carague on February 2,
2008 and during the fourth year of Villar as COA
Commissioner, Villar was designated as Acting
Chairman of COA from February 4, 2008 to April 14,
2008. Subsequently, on April 18, 2008, Villar was
nominated and appointed as Chairman of the COA.
Shortly thereafter, on June 11, 2008, the Commission
on Appointments confirmed his appointment. He was
to serve as Chairman of COA, as expressly indicated
in the appointment papers, until the expiration of the
original term of his office as COA Commissioner or on
February 2, 2011. Challenged in this recourse, Villar,
in an obvious bid to lend color of title to his hold on
the chairmanship, insists that his appointment as
COA Chairman accorded him a fresh term of seven
(7) years which is yet to lapse. He would argue, in
fine, that his term of office, as such chairman, is up to
February 2, 2015, or 7 years reckoned from February
2, 2008 when he was appointed to that position.
Meanwhile, Evelyn R. San Buenaventura (San
Buenaventura) was appointed as COA Commissioner
to serve the unexpired term of Villar as Commissioner
or up to February 2, 2011.
Before the Court could resolve this petition, Villar, via
a letter dated February 22, 2011 addressed to
President Benigno S. Aquino III, signified his intention
to step down from office upon the appointment of his
replacement. True to his word, Villar vacated his
position when President Benigno Simeon Aquino III
named Ma. Gracia Pulido-Tan (Chairman Tan) COA
Chairman. This development has rendered this
petition and the main issue tendered therein moot and
academic.
case is considered moot and academic when its
purpose has become stale,2 or when it ceases to
present a justiciable controversy owing to the onset of
supervening events,3 so that a resolution of the case
or a declaration on the issue would be of no practical
value or use.4 In such instance, there is no actual
substantial relief which a petitioner would be entitled
to, and which will anyway be negated by the dismissal
of the basic petition.5 As a general rule, it is not within
Our charge and function to act upon and decide a
moot case. However, in David v. Macapagal-
Arroyo,6 We acknowledged and accepted certain
exceptions to the issue of mootness, thus:
The "moot and academic" principle is not a magical
formula that can automatically dissuade the courts in
resolving a case. Courts will decide cases, otherwise
moot and academic, if: first, there is a grave violation
of the Constitution, second, the exceptional character
of the situation and the paramount public interest is
involved, third, when constitutional issue raised
requires formulation of controlling principles to guide
the bench, the bar, and the public, and fourth, the
case is capable of repetition yet evading review.
Although deemed moot due to the intervening
appointment of Chairman Tan and the resignation of
Villar, We consider the instant case as falling within
the requirements for review of a moot and academic
case, since it asserts at least four exceptions to the
mootness rule discussed in David, namely: there is a
grave violation of the Constitution; the case involves a
situation of exceptional character and is of paramount
public interest; the constitutional issue raised requires
the formulation of controlling principles to guide the
bench, the bar and the public; and the case is capable
of repetition yet evading review.7 The situation
presently obtaining is definitely of such exceptional
nature as to necessarily call for the promulgation of
principles that will henceforth "guide the bench, the
bar and the public" should like circumstance arise.
Confusion in similar future situations would be
smoothed out if the contentious issues advanced in
the instant case are resolved straightaway and settled
definitely. There are times when although the dispute
has disappeared, as in this case, it nevertheless cries
out to be addressed. To borrow from Javier v.
Pacificador,8 "Justice demands that we act then, not
only for the vindication of the outraged right, though
gone, but also for the guidance of and as a restraint in
the future."
Both procedural and substantive issues are raised in
this proceeding. The procedural aspect comes down
to the question of whether or not the following
requisites for the exercise of judicial review of an
executive act obtain in this petition, viz: (1) there must
be an actual case or justiciable controversy before the
court; (2) the question before it must be ripe for
adjudication; (3) the person challenging the act must
be a proper party; and (4) the issue of constitutionality
must be raised at the earliest opportunity and must be
the very litis mota of the case.9
To Villar, all the requisites have not been met, it being
alleged in particular that petitioner, suing as a
taxpayer and citizen, lacks the necessary standing to
challenge his appointment.10 On the other hand, the
Office of the Solicitor General (OSG), while
recognizing the validity of Villar’s appointment for the
period ending February 11, 2011, has expressed the
view that petitioner should have had filed a petition for
declaratory relief or quo warranto under Rule 63 or
Rule 66, respectively, of the Rules of Court instead of
certiorari under Rule 65.
Villar’s posture on the absence of some of the
mandatory requisites for the exercise by the Court of
its power of judicial review must fail. As a general
rule, a petitioner must have the necessary personality
or standing (locus standi) before a court will recognize
the issues presented. In Integrated Bar of the
Philippines v. Zamora, We defined locus standi as:
x x x a personal and substantial interest in the case
such that the party has sustained or will sustain a
direct injury as a result of the governmental act that is
being challenged. The term "interest" means a
material interest, an interest in issue affected by the
decree, as distinguished from mere interest in the
question involved, or a mere incidental interest. The
gist of the question of standing is whether a party
alleges "such personal stake in the outcome of the
controversy as to assure the concrete adverseness
which sharpens the presentation of issues upon which
the court depends for illumination of difficult
constitutional questions."11
To have legal standing, therefore, a suitor must show
that he has sustained or will sustain a "direct injury"
as a result of a government action, or have a "material
interest" in the issue affected by the challenged
official act.12 However, the Court has time and again
acted liberally on the locus standi requirements and
has accorded certain individuals, not otherwise
directly injured, or with material interest affected, by a
Government act, standing to sue provided a
constitutional issue of critical significance is at
stake.13 The rule on locus standi is after all a mere
procedural technicality in relation to which the Court,
in a catena of cases involving a subject of
transcendental import, has waived, or relaxed, thus
allowing non-traditional plaintiffs, such as concerned
citizens, taxpayers, voters or legislators, to sue in the
public interest, albeit they may not have been
personally injured by the operation of a law or any
other government act.14 In David, the Court laid out
the bare minimum norm before the so-called "non-
traditional suitors" may be extended standing to sue,
thusly:
1.) For taxpayers, there must be a claim of illegal
disbursement of public funds or that the tax measure
is unconstitutional;
2.) For voters, there must be a showing of obvious
interest in the validity of the election law in question;
3.) For concerned citizens, there must be a showing
that the issues raised are of transcendental
importance which must be settled early; and
4.) For legislators, there must be a claim that the
official action complained of infringes their
prerogatives as legislators.
This case before Us is of transcendental importance,
since it obviously has "far-reaching implications," and
there is a need to promulgate rules that will guide the
bench, bar, and the public in future analogous cases.
We, thus, assume a liberal stance and allow petitioner
to institute the instant petition.
Anent the aforestated posture of the OSG, there is no
serious disagreement as to the propriety of the
availment of certiorari as a medium to inquire on
whether the assailed appointment of respondent Villar
as COA Chairman infringed the constitution or was
infected with grave abuse of discretion. For under the
expanded concept of judicial review under the 1987
Constitution, the corrective hand of certiorari may be
invoked not only "to settle actual controversies
involving rights which are legally demandable and
enforceable," but also "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."15 "Grave
abuse of discretion" denotes:
such capricious and whimsical exercise of judgment
as is equivalent to lack of jurisdiction, or, in other
words, where the power is exercised in an arbitrary or
despotic manner by reason of passion or personal
hostility, and it must be so patent and gross as to
amount to an evasion of positive duty or to a virtual
refusal to perform the duty enjoined or to act in
contemplation of law.16
We find the remedy of certiorari applicable to the
instant case in view of the allegation that then
President Macapagal-Arroyo exercised her appointing
power in a manner constituting grave abuse of
discretion.
This brings Us to the pivotal substantive issue of
whether or not Villar’s appointment as COA
Chairman, while sitting in that body and after having
served for four (4) years of his seven (7) year term as
COA commissioner, is valid in light of the term
limitations imposed under, and the circumscribing
concepts tucked in, Sec. 1 (2), Art. IX(D) of the
Constitution, which reads:
(2) The Chairman and Commissioners [on Audit] shall
be appointed by the President with the consent of the
Commission on Appointments for a term of seven
years without reappointment. Of those first appointed,
the Chairman shall hold office for seven years, one
commissioner for five years, and the other
commissioner for three years, without reappointment.
Appointment to any vacancy shall be only for the
unexpired portion of the term of the predecessor. In
no case shall any member be appointed or
designated in a temporary or acting capacity.
(Emphasis added.)17
And if valid, for how long can he serve?
At once clear from a perusal of the aforequoted
provision are the defined restricting features in the
matter of the composition of COA and the
appointment of its members (commissioners and
chairman) designed to safeguard the independence
and impartiality of the commission as a body and that
of its individual members.18 These are, first, the
rotational plan or the staggering term in the
commission membership, such that the appointment
of commission members subsequent to the original
set appointed after the effectivity of the 1987
Constitution shall occur every two years; second, the
maximum but a fixed term-limit of seven (7) years for
all commission members whose appointments came
about by reason of the expiration of term save the
aforementioned first set of appointees and those
made to fill up vacancies resulting from certain
causes; third, the prohibition against reappointment of
commission members who served the full term of
seven years or of members first appointed under the
Constitution who served their respective terms of
office; fourth, the limitation of the term of a member to
the unexpired portion of the term of the predecessor;
and fifth, the proscription against temporary
appointment or designation.
To elucidate on the mechanics of and the adverted
limitations on the matter of COA-member
appointments with fixed but staggered terms of office,
the Court lays down the following postulates
deducible from pertinent constitutional provisions, as
construed by the Court:
1. The terms of office and appointments of the first set
of commissioners, or the seven, five and three-year
termers referred to in Sec. 1(2), Art. IX(D) of the
Constitution, had already expired. Hence, their
respective terms of office find relevancy for the most
part only in understanding the operation of the
rotational plan. In Gaminde v. Commission on
Audit,19 the Court described how the smooth
functioning of the rotational system contemplated in
said and like provisions covering the two other
independent commissions is achieved thru the
staggering of terms:
x x x [T]he terms of the first Chairmen and
Commissioners of the Constitutional Commissions
under the 1987 Constitution must start on a common
date [February 02, 1987, when the 1987 Constitution
was ratified] irrespective of the variations in the dates
of appointments and qualifications of the appointees
in order that the expiration of the first terms of seven,
five and three years should lead to the regular
recurrence of the two-year interval between the
expiration of the terms.
x x x In case of a belated appointment, the interval
between the start of the terms and the actual
appointment shall be counted against the
appointee.20 (Italization in the original; emphasis
added.)
Early on, in Republic v. Imperial,21 the Court wrote of
two conditions, "both indispensable to [the]
workability" of the rotational plan. These conditions
may be described as follows: (a) that the terms of the
first batch of commissioners should start on a
common date; and (b) that any vacancy due to death,
resignation or disability before the expiration of the
term should be filled only for the unexpired balance of
the term. Otherwise, Imperial continued, "the
regularity of the intervals between appointments
would be destroyed." There appears to be near
unanimity as to the purpose/s of the rotational system,
as originally conceived, i.e., to place in the
commission a new appointee at a fixed interval (every
two years presently), thus preventing a four-year
administration appointing more than one permanent
and regular commissioner,22 or to borrow from
Commissioner Monsod of the 1986 CONCOM, "to
prevent one person (the President of the Philippines)
from dominating the commissions."23 It has been
declared too that the rotational plan ensures
continuity in, and, as indicated earlier, secure the
independence of, the commissions as a body.24
2.  An appointment to any vacancy in COA, which
arose from an expiration of a term, after the first
chairman and commissioners appointed under the
1987 Constitution have bowed out, shall, by express
constitutional fiat, be for a term of seven (7) years,
save when the appointment is to fill up a vacancy for
the corresponding unserved term of an outgoing
member. In that case, the appointment shall only be
for the unexpired portion of the departing
commissioner’s term of office. There can only be an
unexpired portion when, as a direct result of his
demise, disability, resignation or impeachment, as the
case may be, a sitting member is unable to complete
his term of office.25 To repeat, should the vacancy
arise out of the expiration of the term of the
incumbent, then there is technically no unexpired
portion to speak of. The vacancy is for a new and
complete seven-year term and, ergo, the appointment
thereto shall in all instances be for a maximum seven
(7) years.
3. Sec. 1(2), Art. IX(D) of the 1987 Constitution
prohibits the "reappointment" of a member of COA
after his appointment for seven (7) years. Writing for
the Court in Nacionalista Party v. De Vera,26 a case
involving the promotion of then COMELEC
Commissioner De Vera to the position of chairman,
then Chief Justice Manuel Moran called attention to
the fact that the prohibition against "reappointment"
comes as a continuation of the requirement that the
commissioners––referring to members of the
COMELEC under the 1935 Constitution––shall hold
office for a term of nine (9) years. This sentence
formulation imports, notes Chief Justice Moran, that
reappointment is not an absolute prohibition.
4. The adverted system of regular rotation or the
staggering of appointments and terms in the
membership for all three constitutional commissions,
namely the COA, Commission on Elections
(COMELEC) and Civil Service Commission (CSC)
found in the 1987 Constitution was patterned after the
amended 1935 Constitution for the appointment of the
members of COMELEC27 with this difference: the
1935 version entailed a regular interval of vacancy
every three (3) years, instead of the present two (2)
years and there was no express provision on
appointment to any vacancy being limited to the
unexpired portion of the his predecessor’s term. The
model 1935 provision reads:
Section 1. There shall be an independent
Commission on Elections composed of a Chairman
and two other members to be appointed by the
President with the consent of the Commission on
Appointments, who shall hold office for a term of nine
years and may not be reappointed. Of the Members
of the Commission first appointed, one shall hold
office for nine years, another for six years and the
third for three years. x x x
Petitioner now asseverates the view that Sec. 1(2),
Art. IX(D) of the 1987 Constitution proscribes
reappointment of any kind within the commission, the
point being that a second appointment, be it for the
same position (commissioner to another position of
commissioner) or upgraded position (commissioner to
chairperson) is a prohibited reappointment and is a
nullity ab initio. Attention is drawn in this regard to the
Court’s disposition in Matibag v. Benipayo.28
Villar’s promotional appointment, so it is argued, is
void from the start, constituting as it did a
reappointment enjoined by the Constitution, since it
actually needed another appointment to a different
office and requiring another confirmation by the
Commission on Appointments.
Central to the adjudication of the instant petition is the
correct meaning to be given to Sec. 1(2), Article IX(D)
of the Constitution on the ban against reappointment
in relation to the appointment issued to respondent
Villar to the position of COA Chairman.
Without question, the parties have presented two (2)
contrasting and conflicting positions. Petitioner
contends that Villar’s appointment is proscribed by the
constitutional ban on reappointment under the
aforecited constitutional provision. On the other hand,
respondent Villar initially asserted that his
appointment as COA Chairman is valid up to
February 2, 2015 pursuant to the same provision.
The Court finds petitioner’s position bereft of merit.
The flaw lies in regarding the word "reappointment"
as, in context, embracing any and all species of
appointment.
The rule is that if a statute or constitutional provision
is clear, plain and free from ambiguity, it must be
given its literal meaning and applied without
attempted interpretation.29 This is known as the plain
meaning rule enunciated by the maxim verba legis
non est recedendum, or from the words of a statute
there should be no departure.30
The primary source whence to ascertain constitutional
intent or purpose is the language of the provision
itself.31 If possible, the words in the Constitution must
be given their ordinary meaning, save where technical
terms are employed. J.M. Tuason & Co., Inc. v. Land
Tenure Administration illustrates the verbal legis rule
in this wise:
We look to the language of the document itself in our
search for its meaning. We do not of course stop
there, but that is where we begin. It is to be assumed
that the words in which constitutional provisions are
couched express the objective sought to be attained.
They are to be given their ordinary meaning except
where technical terms are employed in which case
the significance thus attached to them prevails. As the
Constitution is not primarily a lawyer’s document, it
being essential for the rule of law to obtain that it
should ever be present in the people’s
consciousness, its language as much as possible
should be understood in the sense they have in
common use. What it says according to the text of the
provision to be construed compels acceptance and
negates the power of the courts to alter it, based on
the postulate that the framers and the people mean
what they say. Thus there are cases where the need
for construction is reduced to a minimum.32 (Emphasis
supplied.)
Let us dissect and examine closely the provision in
question:
(2) The Chairman and Commissioners [on Audit] shall
be appointed by the President with the consent of the
Commission on Appointments for a term of seven
years without reappointment. Of those first appointed,
the Chairman shall hold office for seven years, one
commissioner for five years, and the other
commissioner for three years, without reappointment.
Appointment to any vacancy shall be only for the
unexpired portion of the term of the predecessor. x x x
(Emphasis added.)
The first sentence is unequivocal enough. The COA
Chairman shall be appointed by the President for a
term of seven years, and if he has served the full
term, then he can no longer be reappointed or
extended another appointment. In the same vein, a
Commissioner who was appointed for a term of seven
years who likewise served the full term is barred from
being reappointed. In short, once the Chairman or
Commissioner shall have served the full term of
seven years, then he can no longer be reappointed to
either the position of Chairman or Commissioner. The
obvious intent of the framers is to prevent the
president from "dominating" the Commission by
allowing him to appoint an additional or two more
commissioners.
The same purpose obtains in the second sentence of
Sec. 1(2). The Constitutional Convention barred
reappointment to be extended to commissioner-
members first appointed under the 1987 Constitution
to prevent the President from controlling the
commission. Thus, the first Chairman appointed
under the 1987 Constitution who served the full term
of seven years can no longer be extended a
reappointment. Neither can the Commissioners first
appointed for the terms of five years and three years
be eligible for reappointment. This is the plain
meaning attached to the second sentence of Sec.
1(2), Article IX(D).
On the other hand, the provision, on its face, does not
prohibit a promotional appointment from
commissioner to chairman as long as the
commissioner has not served the full term of seven
years, further qualified by the third sentence of Sec.
1(2), Article IX (D) that "the appointment to any
vacancy shall be only for the unexpired portion of the
term of the predecessor." In addition, such
promotional appointment to the position of Chairman
must conform to the rotational plan or the staggering
of terms in the commission membership such that the
aggregate of the service of the Commissioner in said
position and the term to which he will be appointed to
the position of Chairman must not exceed seven
years so as not to disrupt the rotational system in the
commission prescribed by Sec. 1(2), Art. IX(D).
In conclusion, there is nothing in Sec. 1(2), Article
IX(D) that explicitly precludes a promotional
appointment from Commissioner to Chairman,
provided it is made under the aforestated
circumstances or conditions.
It may be argued that there is doubt or ambiguity on
whether Sec. 1(2), Art. IX(D), as couched, allows a
promotional appointment from Commissioner to
Chairman. Even if We concede the existence of an
ambiguity, the outcome will remain the same. J.M.
Tuason & Co., Inc.33 teaches that in case of doubt as
to the import and react of a constitutional provision,
resort should be made to extraneous aids of
construction, such as debates and proceedings of the
Constitutional Convention, to shed light on and
ascertain the intent of the framers or the purpose of
the provision being construed.
The understanding of the Convention as to what was
meant by the terms of the constitutional provision
which was the subject of the deliberation goes a long
way toward explaining the understanding of the
people when they ratified it. The Court applied this
principle in Civil Liberties Union v. Executive
Secretary:
A foolproof yardstick in constitutional construction is
the intention underlying the provision under
consideration. Thus, it has been held that the Court in
construing a Constitution should bear in mind the
object sought to be accomplished by its adoption, and
the evils, if any, sought to be prevented or remedied.
A doubtful provision will be examined in the light of
the history of the times, and the condition and
circumstances under which the Constitution was
framed. The object is to ascertain the reason which
induced the framers of the Constitution to enact the
particular provision and the purpose sought to be
accomplished thereby, in order to construe the whole
as to make the words consonant to that reason and
calculated to effect that purpose.34 (Emphasis added.)
And again in Nitafan v. Commissioner on Internal
Revenue:
x x x The ascertainment of that intent is but in keeping
with the fundamental principle of constitutional
construction that the intent of the framers of the
organic law and of the people adopting it should be
given effect. The primary task in constitutional
construction is to ascertain and thereafter assure the
realization of the purpose of the framers and of the
people in the adoption of the Constitution. It may also
be safely assumed that the people in ratifying the
Constitution were guided mainly by the explanation
offered by the framers.35 (Emphasis added.)
Much weight and due respect must be accorded to
the intent of the framers of the Constitution in
interpreting its provisions.
Far from prohibiting reappointment of any kind,
including a situation where a commissioner is
upgraded to the position of chairman, the 1987
Constitution in fact unequivocally allows promotional
appointment, but subject to defined parameters. The
ensuing exchanges during the deliberations of the
1986 Constitutional Commission (CONCOM) on a
draft proposal of what would eventually be Sec. 1(2),
Art. IX(D) of the present Constitution amply support
the thesis that a promotional appointment is allowed
provided no one may be in the COA for an aggregate
threshold period of 7 years:
MS. AQUINO: In the same paragraph, I would
propose an amendment x x x. Between x x x the
sentence which begins with "In no case," insert THE
APPOINTEE SHALL IN NO CASE SERVE AN
AGGREGATE PERIOD OF MORE THAN SEVEN
YEARS. I was thinking that this may approximate the
situation wherein a commissioner is first appointed as
chairman. I am willing to withdraw that amendment if
there is a representation on the part of the Committee
that there is an implicit intention to prohibit a term that
in the aggregate will exceed more than seven years. If
that is the intention, I am willing to withdraw my
amendment.
MR. MONSOD: If the [Gentlewoman] will read the
whole Article, she will notice that there is no
reappointment of any kind and, therefore, as a whole
there is no way somebody can serve for more than
seven years. The purpose of the last sentence is to
make sure that this does not happen by including in
the appointment both temporary and acting
capacities.
MS. AQUINO. Yes. Reappointment is fine; that is
accounted for. But I was thinking of a situation
wherein a commissioner is upgraded to a position of
chairman. But if this provision is intended to cover that
kind of situation, then I am willing to withdraw my
amendment.
MR. MONSOD. It is covered.
MR. FOZ. There is a provision on line 29 precisely to
cover that situation. It states: "Appointment to any
vacancy shall be only for the unexpired portion of the
predecessor." In other words, if there is upgrading of
position from commissioner to chairman, the
appointee can serve only the unexpired portion of the
term of the predecessor.
MS. AQUINO: But we have to be very specific x x x
because it might shorten the term because he serves
only the unexpired portion of the term of the
predecessor.
MR. FOZ: He takes it at his own risk. He knows that
he will only have to serve the unexpired portion of the
term of the predecessor. (Emphasis added.)36
The phrase "upgrading of position" found in the
underscored portion unmistakably shows that Sec.
1(2), Art. IX(D) of the 1987 Constitution, for all its
caveat against reappointment, does not per se
preclude, in any and all cases, the promotional
appointment or upgrade of a commissioner to
chairman, subject to this proviso: the appointee’s
tenure in office does not exceed 7 years in all. Indeed,
such appointment does not contextually come within
the restricting phrase "without reappointment" twice
written in that section. Delegate Foz even cautioned,
as a matter of fact, that a sitting commissioner
accepting a promotional appointment to fill up an
unexpired portion pertaining to the higher office does
so at the risk of shortening his original term. To
illustrate the Foz’s concern: assume that Carague left
COA for reasons other than the expiration of his
threshold 7-year term and Villar accepted an
appointment to fill up the vacancy. In this situation,
the latter can only stay at the COA and served the
unexpired portion of Carague’s unexpired term as
departing COA Chairman, even if, in the process, his
(Villar’s) own 7-year term as COA commissioner has
not yet come to an end. In this illustration, the
inviolable regularity of the intervals between
appointments in the COA is preserved.
Moreover, jurisprudence tells us that the word
"reappointment" means a second appointment to one
and the same office.37 As Justice Arsenio Dizon
(Justice Dizon) aptly observed in his dissent in Visarra
v. Miraflor,38 the constitutional prohibition against the
reappointment of a commissioner refers to his second
appointment to the same office after holding it for nine
years.39 As Justice Dizon observed, "[T]he occupant of
an office obviously needs no such second
appointment unless, for some valid cause, such as
the expiration of his term or resignation, he had
ceased to be the legal occupant thereof." 40 The
inevitable implication of Justice Dizon’s cogent
observation is that a promotion from commissioner to
chairman, albeit entailing a second appointment,
involves a different office and, hence, not, in the strict
legal viewpoint, a reappointment. Stated a bit
differently, "reappointment" refers to a movement to
one and the same office. Necessarily, a movement to
a different position within the commission (from
Commissioner to Chairman) would constitute an
appointment, or a second appointment, to be precise,
but not reappointment.
A similar opinion was expressed in the same Visarra
case by the concurring Justice Angelo Bautista,
although he expressly alluded to a promotional
appointment as not being a prohibited appointment
under Art. X of the 1935 Constitution.
Petitioner’s invocation of Matibag as additional
argument to contest the constitutionality of Villar’s
elevation to the COA chairmanship is inapposite. In
Matibag, then President Macapagal-Arroyo appointed,
ad interim, Alfredo Benipayo as COMELEC Chairman
and Resurreccion Borra and Florentino Tuason as
Commissioners, each for a term of office of seven (7)
years. All three immediately took their oath of, and
assumed, office. These appointments were twice
renewed because the Commission on Appointments
failed to act on the first two ad interim appointments.
Via a petition for prohibition, some disgruntled
COMELEC officials assail as infirm the appointments
of Benipayo, et al.
Matibag lists (4) four situations where the prohibition
on reappointment would arise, or to be specific, where
the proviso "[t]he Chairman and the Commissioners
shall be appointed x x x for a term of seven years
without reappointment" shall apply. Justice Antonio T.
Carpio declares in his dissent that Villar’s
appointment falls under a combination of two of the
four situations.
Conceding for the nonce the correctness of the
premises depicted in the situations referred to in
Matibag, that case is of doubtful applicability to the
instant petition. Not only is it cast against a different
milieu, but the lis mota of the case, as expressly
declared in the main opinion, "is the very
constitutional issue raised by petitioner."41 And what
is/are this/these issue/s? Only two defined issues
in Matibag are relevant, viz: (1) the nature of an ad
interim appointment and subsumed thereto the effect
of a by-passed ad interim appointment; and (2) the
constitutionality of renewals of ad interim
appointments. The opinion defined these issues in the
following wise: "Petitioner [Matibag] filed the instant
petition questioning the appointment and the right to
remain in office of Benipayo, Borra and Tuason as
Chairman and Commissioners of the COMELEC,
respectively. Petitioner claims that the ad interim
appointments of Benipayo, et al. violate the
constitutional provisions on the independence of
COMELEC, as well as on the prohibitions on
temporary appointments and reappointments of its
Chairman and members." As may distinctly be noted,
an upgrade or promotion was not in issue in Matibag.
We shall briefly address the four adverted situations
outlined in Matibag, in which, as there urged, the
uniform proviso on no reappointment––after a
member of any of the three constitutional
commissions is appointed for a term of seven (7)
years––shall apply. Matibag made the following
formulation:
The first situation is where an ad interim appointee
after confirmation by the Commission on
Appointments serves his full 7-year term. Such
person cannot be reappointed whether as a member
or as chairman because he will then be actually
serving more than seven (7) years.
The second situation is where the appointee, after
confirmation, serves part of his term and then resigns
before his seven-year term of office ends. Such
person cannot be reappointed whether as a member
or as chair to a vacancy arising from retirement
because a reappointment will result in the appointee
serving more than seven years.
The third situation is where the appointee is confirmed
to serve the unexpired portion of someone who died
or resigned, and the appointee completes the
unexpired term. Such person cannot be reappointed
whether as a member or as chair to a vacancy arising
from retirement because a reappointment will result in
the appointee also serving more than seven (7) years.
The fourth situation is where the appointee has
previously served a term of less than seven (7) years,
and a vacancy arises from death or resignation. Even
if it will not result in his serving more than seven
years, a reappointment of such person to serve an
unexpired term is also prohibited because his
situation will be similar to those appointed under the
second sentence of Sec. 1(20), Art. IX-C of the
Constitution [referring to the first set of appointees
(the 5 and 3 year termers) whose term of office are
less than 7 years but are barred from being
reappointed under any situation]."42 (Words in
brackets and emphasis supplied.)
The situations just described constitute an obiter
dictum, hence without the force of adjudication, for the
corresponding formulation of the four situations was
not in any way necessary to resolve any of the
determinative issues specifically defined in Matibag.
An opinion entirely unnecessary for the decision of
the case or one expressed upon a point not
necessarily involved in the determination of the case
is an obiter.43
There can be no serious objection to the scenarios
depicted in the first, second and third situations, both
hewing with the proposition that no one can stay in
any of the three independent commissions for an
aggregate period of more than seven (7) years. The
fourth situation, however, does not commend itself for
concurrence inasmuch as it is basically predicated on
the postulate that reappointment, as earlier herein
defined, of any kind is prohibited under any and all
circumstances. To reiterate, the word "reappointment"
means a second appointment to one and the same
office; and Sec. 1(2), Art. IX(D) of the 1987
Constitution and similar provisions do not
peremptorily prohibit the promotional appointment of a
commissioner to chairman, provided the new
appointee’s tenure in both capacities does not exceed
seven (7) years in all. The statements in Matibag
enunciating the ban on reappointment in the
aforecited fourth situation, perforce, must be
abandoned, for, indeed, a promotional appointment
from the position of Commissioner to that of Chairman
is constitutionally permissible and not barred by Sec.
1(2), Art. IX (D) of the Constitution.
One of the aims behind the prohibition on
reappointment, petitioner urges, is to ensure and
preserve the independence of COA and its
members,44 citing what the dissenting Justice J.B.L
Reyes wrote in Visarra, that once appointed and
confirmed, the commissioners should be free to act as
their conscience demands, without fear of retaliation
or hope or reward. Pursued to its logical conclusion,
petitioner’s thesis is that a COA member may no
longer act with independence if he or she can be
rewarded with a promotion or appointment, for then
he or she will do the bidding of the appointing
authority in the hope of being promoted or
reappointed.
The unstated reason behind Justice J.B.L. Reyes’
counsel is that independence is really a matter of
choice. Without taking anything away from the gem
imparted by the eminent jurist, what Chief Justice
Moran said on the subject of independence is just as
logically sound and perhaps even more compelling,
as follows:
A Commissioner, hopeful of reappointment may strive
to do good. Whereas, without that hope or other hope
of material reward, his enthusiasm may decline as the
end of his term approaches and he may even lean to
abuses if there is no higher restrain in his moral
character. Moral character is no doubt the most
effective safeguard of independence. With moral
integrity, a commissioner will be independent with or
without the possibility of reappointment.45
The Court is likewise unable to sustain Villar’s
proposition that his promotional appointment as COA
Chairman gave him a completely fresh 7-year term––
from February 2008 to February 2015––given his four
(4)-year tenure as COA commissioner devalues all
the past pronouncements made by this Court, starting
in De Vera, then Imperial, Visarra, and finally Matibag.
While there had been divergence of opinion as to the
import of the word "reappointment," there has been
unanimity on the dictum that in no case can one be a
COA member, either as chairman or commissioner, or
a mix of both positions, for an aggregate term of more
than 7 years. A contrary view would allow a
circumvention of the aggregate 7-year service
limitation and would be constitutionally offensive as it
would wreak havoc to the spirit of the rotational
system of succession. Imperial, passing upon the
rotational system as it applied to the then
organizational set-up of the COMELEC, stated:
The provision that of the first three commissioners
appointed "one shall hold office for 9 years, another
for 6 years and the third for 3 years," when taken
together with the prescribed term of office for 9 years
without reappointment, evinces a deliberate plan to
have a regular rotation or cycle in the membership of
the commission, by having subsequent members
appointable only once every three years.46
To be sure, Villar’s appointment as COA Chairman
partakes of a promotional appointment which, under
appropriate setting, would be outside the purview of
the constitutional reappointment ban in Sec 1(2), Art.
IX(D) of the Constitution. Nonetheless, such
appointment, even for the term appearing in the
underlying appointment paper, ought still to be struck
down as unconstitutional for the reason as shall be
explained.
Consider:
In a mandatory tone, the aforecited constitutional
provision decrees that the appointment of a COA
member shall be for a fixed 7-year term if the vacancy
results from the expiration of the term of the
predecessor. We reproduce in its pertinent part the
provision referred to:
(2) The Chairman and Commissioners [on Audit] shall
be appointed x x x for a term of seven years without
reappointment. x x x Appointment to any vacancy
shall be only for the unexpired portion of the term of
the predecessor. x x x
Accordingly, the promotional appointment as COA
Chairman of Villar for a stated fixed term of less than
seven (7) years is void for violating a clear, but
mandatory constitutional prescription. There can be
no denying that the vacancy in the position of COA
chairman when Carague stepped down in February 2,
2008 resulted from the expiration of his 7-year term.
Hence, the appointment to the vacancy thus created
ought to have been one for seven (7) years in line
with the verbal legis approach47 of interpreting the
Constitution. It is to be understood, however, following
Gaminde, that in case of a belated appointment, the
interval between the start of the term and the actual
appointment shall be counted against the 7-year term
of the appointee. Posing, however, as an
insurmountable barrier to a full 7-year appointment for
Villar is the rule against one serving the commission
for an aggregate term of more than seven (7) years.
Where the Constitution or, for that matter, a statute,
has fixed the term of office of a public official, the
appointing authority is without authority to specify in
the appointment a term shorter or longer than what
the law provides. If the vacancy calls for a full seven-
year appointment, the President is without discretion
to extend a promotional appointment for more or for
less than seven (7) years. There is no in between. He
or she cannot split terms. It is not within the power of
the appointing authority to override the positive
provision of the Constitution which dictates that the
term of office of members of constitutional bodies
shall be seven (7) years.48 A contrary reasoning
"would make the term of office to depend upon the
pleasure or caprice of the [appointing authority] and
not upon the will [of the framers of the Constitution] of
the legislature as expressed in plain and undoubted
language in the law."49
In net effect, then President Macapagal-Arroyo could
not have had, under any circumstance, validly
appointed Villar as COA Chairman, for a full 7-year
appointment, as the Constitution decrees, was not
legally feasible in light of the 7-year aggregate rule.
Villar had already served 4 years of his 7-year term as
COA Commissioner. A shorter term, however, to
comply with said rule would also be invalid as the
corresponding appointment would effectively breach
the clear purpose of the Constitution of giving to every
appointee so appointed subsequent to the first set of
commissioners, a fixed term of office of 7 years. To
recapitulate, a COA commissioner like respondent
Villar who serves for a period less than seven (7)
years cannot be appointed as chairman when such
position became vacant as a result of the expiration of
the 7-year term of the predecessor (Carague). Such
appointment to a full term is not valid and
constitutional, as the appointee will be allowed to
serve more than seven (7) years under the
constitutional ban.
On the other hand, a commissioner who resigned
before serving his 7- year term can be extended an
appointment to the position of chairman for the
unexpired period of the term of the latter, provided the
aggregate of the period he served as commissioner
and the period he will serve as chairman will not
exceed seven (7) years. This situation will only obtain
when the chairman leaves the office by reason of
death, disability, resignation or impeachment. Let us
consider, in the concrete, the situation of then
Chairman Carague and his successor, Villar. Carague
was appointed COA Chairman effective February 2,
2001 for a term of seven (7) years, or up to February
2, 2008. Villar was appointed as Commissioner on
February 2, 2004 with a 7-year term to end on
February 2, 2011. If Carague for some reason
vacated the chairmanship in 2007, then Villar can
resign as commissioner in the same year and later be
appointed as chairman to serve only up to February 2,
2008, the end of the unexpired portion of Carague’s
term. In this hypothetical scenario, Villar’s
appointment to the position of chairman is valid and
constitutional as the aggregate periods of his two (2)
appointments will only be five (5) years which neither
distorts the rotational scheme nor violates the rule
that the sum total of said appointments shall not
exceed seven (7) years. Villar would, however, forfeit
two (2) years of his original seven (7)-year term as
Commissioner, since, by accepting an upgraded
appointment to Carague’s position, he agreed to
serve the unexpired portion of the term of the
predecessor. As illustrated earlier, following Mr. Foz’s
line, if there is an upgrading of position from
commissioner to chairman, the appointee takes the
risk of cutting short his original term, knowing pretty
well before hand that he will serve only the unexpired
portion of the term of his predecessor, the outgoing
COA chairman.
In the extreme hypothetical situation that Villar
vacates the position of chairman for causes other
than the expiration of the original term of Carague, the
President can only appoint the successor of Villar for
the unexpired portion of the Carague term in line with
Sec. 1(2), Art. IX(D) of the Constitution. Upon the
expiration of the original 7-year term of Carague, the
President can appoint a new chairman for a term of
seven (7) full years.
In his separate dissent, my esteemed colleague, Mr.
Justice Mendoza, takes strong exception to the view
that the promotional appointment of a sitting
commissioner is plausible only when he is appointed
to the position of chairman for the unexpired portion of
the term of said official who leaves the office by
reason of any the following reasons: death, disability,
resignation or impeachment, not when the vacancy
arises out as a result of the expiration of the 7-year
term of the past chairman. There is nothing in the
Constitution, so Justice Mendoza counters, that
restricts the promotion of an incumbent commissioner
to the chairmanship only in instances where the
tenure of his predecessor was cut short by any of the
four events referred to. As earlier explained, the
majority view springs from the interplay of the
following premises: The explicit command of the
Constitution is that the "Chairman and the
Commissioners shall be appointed by the President x
x x for a term of seven years [and] appointment to any
vacancy shall be only for the unexpired portion of the
term of the predecessor." To repeat, the President
has two and only two options on term appointments.
Either he extends an appointment for a full 7-year
term when the vacancy results from the expiration of
term, or for a shorter period corresponding to the
unexpired term of the predecessor when the vacancy
occurs by reason of death, physical disability,
resignation or impeachment. If the vacancy calls for a
full seven-year appointment, the Chief Executive is
barred from extending a promotional appointment for
less than seven years. Else, the President can trifle
with terms of office fixed by the Constitution.
Justice Mendoza likewise invites attention to an
instance in history when a commissioner had been
promoted chairman after the expiration of the term of
his predecessor, referring specifically to the
appointment of then COMELEC Commissioner
Gaudencio Garcia to succeed Jose P. Carag after the
expiration of the latter’s term in 1959 as COMELEC
chairman. Such appointment to the position of
chairman is not constitutionally permissible under the
1987 Constitution because of the policy and intent of
its framers that a COA member who has served his
full term of seven (7) years or even for a shorter
period can no longer be extended another
appointment to the position of chairman for a full term
of seven (7) years. As revealed in the deliberations of
the Constitutional Commission that crafted the 1987
Constitution, a member of COA who also served as a
commissioner for less than seven (7) years in said
position cannot be appointed to the position of
chairman for a full term of seven (7) years since the
aggregate will exceed seven (7) years. Thus, the
adverted Garcia appointment in 1959 made under the
1935 Constitution cannot be used as a precedent to
an appointment of such nature under the 1987
Constitution. The dissent further notes that the
upgrading remained uncontested. In this regard,
suffice it to state that the promotion in question was
either legal or it was not. If it were not, no amount of
repetitive practices would clear it of invalidating taint.
Lastly, Villar’s appointment as chairman ending
February 2, 2011 which Justice Mendoza considers
as valid is likewise unconstitutional, as it will destroy
the rationale and policy behind the rotational system
or the staggering of appointments and terms in COA
as prescribed in the Constitution. It disturbs in a way
the staggered rotational system of appointment under
Sec. 1(2), Art. IX(D) of the 1987 Constitution.
Consider: If Villar’s term as COA chairman up to
February 2, 2011 is viewed as valid and constitutional
as espoused by my esteemed colleague, then two
vacancies have simultaneously occurred and two (2)
COA members going out of office at once, opening
positions for two (2) appointables on that date as
Commissioner San Buenaventura’s term also expired
on that day. This is precisely one of the mischiefs the
staggering of terms and the regular intervals
appointments seek to address. Note that San
Buenaventura was specifically appointed to succeed
Villar as commissioner, meaning she merely occupied
the position vacated by her predecessor whose term
as such commissioner expired on February 2, 2011.
The result is what the framers of the Constitution
doubtless sought to avoid, a sitting President with a 6-
year term of office, like President Benigno C. Aquino
III, appointing all or at least two (2) members of the
three-man Commission during his term. He appointed
Ma. Gracia Pulido-Tan as Chairman for the term
ending February 2, 2015 upon the relinquishment of
the post by respondent Villar, and Heidi Mendoza was
appointed Commissioner for a 7-year term ending
February 2, 2018 to replace San Buenaventura. If
Justice Mendoza’s version is adopted, then situations
like the one which obtains in the Commission will
definitely be replicated in gross breach of the
Constitution and in clear contravention of the intent of
its framers. Presidents in the future can easily control
the Commission depriving it of its independence and
impartiality.
To sum up, the Court restates its ruling on Sec. 1(2),
Art. IX(D) of the Constitution, viz:
1. The appointment of members of any of the three
constitutional commissions, after the expiration of the
uneven terms of office of the first set of
commissioners, shall always be for a fixed term of
seven (7) years; an appointment for a lesser period is
void and unconstitutional.
The appointing authority cannot validly shorten the full
term of seven (7) years in case of the expiration of the
term as this will result in the distortion of the rotational
system prescribed by the Constitution.
2. Appointments to vacancies resulting from certain
causes (death, resignation, disability or impeachment)
shall only be for the unexpired portion of the term of
the predecessor, but such appointments cannot be
less than the unexpired portion as this will likewise
disrupt the staggering of terms laid down under Sec.
1(2), Art. IX(D).
3. Members of the Commission, e.g. COA,
COMELEC or CSC, who were appointed for a full
term of seven years and who served the entire period,
are barred from reappointment to any position in the
Commission. Corollarily, the first appointees in the
Commission under the Constitution are also covered
by the prohibition against reappointment.
4. A commissioner who resigns after serving in the
Commission for less than seven years is eligible for
an appointment to the position of Chairman for the
unexpired portion of the term of the departing
chairman. Such appointment is not covered by the
ban on reappointment, provided that the aggregate
period of the length of service as commissioner and
the unexpired period of the term of the predecessor
will not exceed seven (7) years and provided further
that the vacancy in the position of Chairman resulted
from death, resignation, disability or removal by
impeachment. The Court clarifies that
"reappointment" found in Sec. 1(2), Art. IX(D) means
a movement to one and the same office
(Commissioner to Commissioner or Chairman to
Chairman). On the other hand, an appointment
involving a movement to a different position or office
(Commissioner to Chairman) would constitute a new
appointment and, hence, not, in the strict legal sense,
a reappointment barred under the Constitution.
5. Any member of the Commission cannot be
appointed or designated in a temporary or acting
capacity.
WHEREFORE the petition is PARTLY GRANTED.
The appointment of then Commissioner Reynaldo A.
Villar to the position of Chairman of the Commission
on Audit to replace Guillermo N. Carague, whose
term of office as such chairman has expired, is hereby
declared UNCONSTITUTIONAL for violation of Sec.
1(2), Art. IX(D) of the Constitution.
SO ORDERED.
PRESBITERO J. VELASCO JR.
Associate Justice
G.R. No. 202242               July 17, 2012
FRANCISCO I. CHAVEZ, Petitioner,  witness to the deplorable practice of aspirants
vs.
JUDICIAL AND BAR COUNCIL, SEN. FRANCIS
JOSEPH G. ESCUDERO and REP. NIEL C. TUPAS,
JR.,Respondents.
DECISION
MENDOZA, J.:
The issue at hand has been in hibernation until the
unexpected departure of Chief Justice Renato C.
Corona on May 29, 2012, and the nomination of
former Solicitor General Francisco I. Chavez
(petitioner), as his potential successor, triggered the
filing of this case. The issue has constantly been
nagging legal minds, yet remained dormant for lack of
constitutional challenge.
As the matter is of extreme urgency considering the
constitutional deadline in the process of selecting the
nominees for the vacant seat of the Chief Justice, the
Court cannot delay the resolution of the issue a day
longer. Relegating it in the meantime to the back
burner is not an option.
Does the first paragraph of Section 8, Article VIII of
the 1987 Constitution allow more than one (1)
member of Congress to sit in the JBC? Is the practice
of having two (2) representatives from each house of
Congress with one (1) vote each sanctioned by the
Constitution? These are the pivotal questions to be
resolved in this original action for prohibition and
injunction.
Long before the naissance of the present
Constitution, the annals of history bear witness to the
fact that the exercise of appointing members of the
Judiciary has always been the exclusive prerogative
of the executive and legislative branches of the
government. Like their progenitor of American origins,
both the Malolos Constitution1 and the 1935
Constitution2 had vested the power to appoint the
members of the Judiciary in the President, subject to
confirmation by the Commission on Appointments. It
was during these times that the country became
seeking confirmation of their appointment in the
Judiciary to ingratiate themselves with the members
of the legislative body.3
Then, with the fusion of executive and legislative
power under the 1973 Constitution,4 the appointment
of judges and justices was no longer subject to the
scrutiny of another body. It was absolute, except that
the appointees must have all the qualifications and
none of the disqualifications.
Prompted by the clamor to rid the process of
appointments to the Judiciary from political pressure
and partisan activities,5 the members of the
Constitutional Commission saw the need to create a
separate, competent and independent body to
recommend nominees to the President. Thus, it
conceived of a body representative of all the
stakeholders in the judicial appointment process and
called it the Judicial and Bar Council (JBC). Its
composition, term and functions are provided under
Section 8, Article VIII of the Constitution, viz:
Section 8. (1) A Judicial and Bar Council is hereby
created under the supervision of the Supreme Court
composed of the Chief Justice as ex officio Chairman,
the Secretary of Justice, and a representative of the
Congress as ex officio Members, a representative of
the Integrated Bar, a professor of law, a retired
Member of the Supreme Court, and a representative
of the private sector.
(2) The regular members of the Council shall be
appointed by the President for a term of four years
with the consent of the Commission on Appointments.
Of the Members first appointed, the representative of
the Integrated Bar shall serve for four years, the
professor of law for three years, the retired Justice for
two years, and the representative of the private sector
for one year.
(3) The Clerk of the Supreme Court shall be the
Secretary ex officio of the Council and shall keep a
record of its proceedings.
(4) The regular Members of the Council shall receive
such emoluments as may be determined by the
Supreme Court. The Supreme Court shall provide in
its annual budget the appropriations for the Council.
(5) The Council shall have the principal function of
recommending appointees to the Judiciary. It may
exercise such other functions and duties as the
Supreme Court may assign to it.
In compliance therewith, Congress, from the moment
of the creation of the JBC, designated one
representative to sit in the JBC to act as one of the ex
officio members.6 Perhaps in order to give equal
opportunity to both houses to sit in the exclusive
body, the House of Representatives and the Senate
would send alternate representatives to the JBC. In
other words, Congress had only one (1)
representative.
In 1994, the composition of the JBC was substantially
altered. Instead of having only seven (7) members, an
eighth (8th) member was added to the JBC as two (2)
representatives from Congress began sitting in the
JBC - one from the House of Representatives and
one from the Senate, with each having one-half (1/2)
of a vote.7 Then, curiously, the JBC En Banc, in
separate meetings held in 2000 and 2001, decided to
allow the representatives from the Senate and the
House of Representatives one full vote each.8 At
present, Senator Francis Joseph G. Escudero and
Congressman Niel C. Tupas, Jr. (respondents)
simultaneously sit in the JBC as representatives of
the legislature.
It is this practice that petitioner has questioned in this
petition,9 setting forth the following
GROUNDS FOR ALLOWANCE OF THE PETITION
I
Article VIII, Section 8, Paragraph 1 is clear, definite
and needs no interpretation in that the JBC shall have
only one representative from Congress.
II
The framers of the Constitution clearly envisioned,
contemplated and decided on a JBC composed of
only seven (7) members.
III
Had the framers of the Constitution intended that the
JBC composed of the one member from the Senate
and one member from the House of Representatives,
they could have easily said so as they did in the other
provisions of the Constitution.
IV
The composition of the JBC providing for three ex-
officio members is purposely designed for a balanced
representation of each of the three branches of the
government.
V established, the Framers originally envisioned a
One of the two (2) members of the JBC from
Congress has no right (not even ½ right) to sit in the
said constitutional body and perform the duties and
functions of a member thereof.
VI
The JBC cannot conduct valid proceedings as its
composition is illegal and unconstitutional.10
On July 9, 2012, the JBC filed its Comment.11 It,
however, abstained from recommending on how this
constitutional issue should be disposed in gracious
deference to the wisdom of the Court. Nonetheless,
the JBC was more than generous enough to offer the
insights of various personalities previously connected
with it.12
Through the Office of the Solicitor General (OSG),
respondents defended their position as members of
the JBC in their Comment13 filed on July 12, 2012.
According to them, the crux of the controversy is the
phrase "a representative of Congress."14 Reverting to
the basics, they cite Section 1, Article VI of the
Constitution15 to determine the meaning of the term
"Congress." It is their theory that the two houses, the
Senate and the House of Representatives, are
permanent and mandatory components of
"Congress," such that the absence of either divests
the term of its substantive meaning as expressed
under the Constitution. In simplistic terms, the House
of Representatives, without the Senate and vice-
versa, is not Congress.16 Bicameralism, as the system
of choice by the Framers, requires that both houses
exercise their respective powers in the performance
of its mandated duty which is to legislate. Thus, when
Section 8(1), Article VIII of the Constitution speaks of
"a representative from Congress," it should mean one
representative each from both Houses which
comprise the entire Congress.17
Tracing the subject provision’s history, the
respondents claim that when the JBC was
unicameral legislative body, thereby allocating "a
representative of the National Assembly" to the JBC.
The phrase, however, was not modified to
aptly jive with the change to bicameralism, the
legislative system finally adopted by the Constitutional
Commission on July 21, 1986. According to
respondents, if the Commissioners were made aware
of the consequence of having a bicameral legislature
instead of a unicameral one, they would have made
the corresponding adjustment in the representation of
Congress in the JBC.18
The ambiguity having resulted from a plain case of
inadvertence, the respondents urge the Court to look
beyond the letter of the disputed provision because
the literal adherence to its language would produce
absurdity and incongruity to the bicameral nature of
Congress.19 In other words, placing either of the
respondents in the JBC will effectively deprive a
house of Congress of its representation. In the same
vein, the electorate represented by Members of
Congress will lose their only opportunity to participate
in the nomination process for the members of the
Judiciary, effectively diminishing the republican nature
of the government.20
The respondents further argue that the allowance of
two (2) representatives of Congress to be members of
the JBC does not render the latter’s purpose
nugatory. While they admit that the purpose in
creating the JBC was to insulate appointments to the
Judiciary from political influence, they likewise
cautioned the Court that this constitutional vision did
not intend to entirely preclude political factor in said
appointments. Therefore, no evil should be perceived
in the current set-up of the JBC because two (2)
members coming from Congress, whose membership
to certain political parties is irrelevant, does not
necessarily amplify political partisanship in the JBC.
In fact, the presence of two (2) members from
Congress will most likely provide balance as against
the other six (6) members who are undeniably
presidential appointees.21
The Issues
In resolving the procedural and substantive issues
arising from the petition, as well as the myriad of
counter-arguments proffered by the respondents, the
Court synthesized them into two:
(1) Whether or not the conditions sine qua non for the
exercise of the power of judicial review have been
met in this case; and
(2) Whether or not the current practice of the JBC to
perform its functions with eight (8) members, two (2)
of whom are members of Congress, runs counter to
the letter and spirit of the 1987 Constitution.
The Power of Judicial Review
In its Comment, the JBC submits that petitioner is
clothed with locus standi to file the petition, as a
citizen and taxpayer, who has been nominated to the
position of Chief Justice.22
For the respondents, however, petitioner has no "real
interest" in questioning the constitutionality of the
JBC’s current composition.23 As outlined in
jurisprudence, it is well-settled that for locus standi to
lie, petitioner must exhibit that he has been denied, or
is about to be denied, of a personal right or privilege
to which he is entitled. Here, petitioner failed to
manifest his acceptance of his recommendation to the
position of Chief Justice, thereby divesting him of a
substantial interest in the controversy. Without his
name in the official list of applicants for the post, the
respondents claim that there is no personal stake on
the part of petitioner that would justify his outcry of
unconstitutionality. Moreover, the mere allegation that
this case is of transcendental importance does not
excuse the waiver of the rule on locus standi,
because, in the first place, the case lacks the
requisites therefor. The respondents also question
petitioner’s belated filing of the petition.24 Being aware
that the current composition of the JBC has been in
practice since 1994, petitioner’s silence for eighteen
(18) years show that the constitutional issue being
raised before the Court does not comply with the
"earliest possible opportunity" requirement.
Before addressing the above issues in seriatim, the
Court deems it proper to first ascertain the nature of
the petition. Pursuant to the rule that the nature of an
action is determined by the allegations therein and the
character of the relief sought, the Court views the
petition as essentially an action for declaratory relief
under Rule 63 of the 1997 Rules of Civil Procedure.25
The Constitution as the subject matter, and the
validity and construction of Section 8 (1), Article VIII
as the issue raised, the petition should properly be
considered as that which would result in the
adjudication of rights sans the execution process
because the only relief to be granted is the very
declaration of the rights under the document sought to
be construed. It being so, the original jurisdiction over
the petition lies with the appropriate Regional Trial
Court (RTC). Notwithstanding the fact that only
questions of law are raised in the petition, an action
for declaratory relief is not among those within the
original jurisdiction of this Court as provided in
Section 5, Article VIII of the Constitution.26
At any rate, due to its serious implications, not only to
government processes involved but also to the
sanctity of the Constitution, the Court deems it more
prudent to take cognizance of it. After all, the petition
is also for prohibition under Rule 65 seeking to enjoin
Congress from sending two (2) representatives with
one (1) full vote each to the JBC.
The Courts’ power of judicial review, like almost all
other powers conferred by the Constitution, is subject
to several limitations, namely: (1) there must be an
actual case or controversy calling for the exercise of
judicial power; (2) the person challenging the act must
have "standing" to challenge; he must have a
personal and substantial interest in the case, such
that he has sustained or will sustain, direct injury as a
result of its enforcement; (3) the question of
constitutionality must be raised at the earliest possible
opportunity; and (4) the issue of constitutionality must
be the very lis mota of the case.27 Generally, a party
will be allowed to litigate only when these conditions
sine qua non are present, especially when the
constitutionality of an act by a co-equal branch of
government is put in issue.
Anent locus standi, the question to be answered is
this: does the party possess a personal stake in the
outcome of the controversy as to assure that there is
real, concrete and legal conflict of rights and duties
from the issues presented before the Court? In David
v. Macapagal-Arroyo,28 the Court summarized the
rules on locus standi as culled from jurisprudence.
There, it was held that taxpayers, voters, concerned
citizens, and legislators may be accorded standing to
sue, provided that the following requirements are met:
(1) cases involve constitutional issues; (2) for
taxpayers, there must be a claim of illegal
disbursement of public funds or that the tax measure
is unconstitutional; (3) for voters, there must be a
showing of obvious interest in the validity of the
election law in question; (4) for concerned citizens,
there must be a showing that the issues raised are of
transcendental importance which must be settled
early; and (5) for legislators, there must be a claim
that the official action complained of infringes upon
their prerogatives as legislators.
In public suits, the plaintiff, representing the general
public, asserts a "public right" in assailing an allegedly
illegal official action. The plaintiff may be a person
who is affected no differently from any other person,
and can be suing as a "stranger," or as a "citizen" or
"taxpayer." Thus, taxpayers have been allowed to sue
where there is a claim that public funds are illegally
disbursed or that public money is being deflected to
any improper purpose, or that public funds are wasted
through the enforcement of an invalid or
unconstitutional law. Of greater import than the
damage caused by the illegal expenditure of public
funds is the mortal wound inflicted upon the
fundamental law by the enforcement of an invalid
statute.29
In this case, petitioner seeks judicial intervention as a
taxpayer, a concerned citizen and a nominee to the
position of Chief Justice of the Supreme Court. As a
taxpayer, petitioner invokes his right to demand that
the taxes he and the rest of the citizenry have been
paying to the government are spent for lawful
purposes. According to petitioner, "since the JBC
derives financial support for its functions, operation
and proceedings from taxes paid, petitioner
possesses as taxpayer both right and legal standing
to demand that the JBC’s proceedings are not tainted
with illegality and that its composition and actions do
not violate the Constitution."30
Notably, petitioner takes pains in enumerating past
actions that he had brought before the Court where
his legal standing was sustained. Although this
inventory is unnecessary to establish locus
standi because obviously, not every case before the
Court exhibits similar issues and facts, the Court
recognizes the petitioner’s right to sue in this case.
Clearly, petitioner has the legal standing to bring the
present action because he has a personal stake in the
outcome of this controversy.
The Court disagrees with the respondents’ contention
that petitioner lost his standing to sue because he is
not an official nominee for the post of Chief Justice.
While it is true that a "personal stake" on the case is
imperative to have locus standi, this is not to say that
only official nominees for the post of Chief Justice can
come to the Court and question the JBC composition
for being unconstitutional. The JBC likewise screens
and nominates other members of the Judiciary. Albeit
heavily publicized in this regard, the JBC’s duty is not
at all limited to the nominations for the highest
magistrate in the land. A vast number of aspirants to
judicial posts all over the country may be affected by
the Court’s ruling. More importantly, the legality of the
very process of nominations to the positions in the
Judiciary is the nucleus of the controversy. The Court
considers this a constitutional issue that must be
passed upon, lest a constitutional process be plagued
by misgivings, doubts and worse, mistrust. Hence, a
citizen has a right to bring this question to the Court,
clothed with legal standing and at the same time,
armed with issues of transcendental importance to
society. The claim that the composition of the JBC is
illegal and unconstitutional is an object of concern, not
just for a nominee to a judicial post, but for all citizens
who have the right to seek judicial intervention for
rectification of legal blunders.
With respect to the question of transcendental
importance, it is not difficult to perceive from the
opposing arguments of the parties that the
determinants established in jurisprudence are
attendant in this case: (1) the character of the funds
or other assets involved in the case; (2) the presence
of a clear case of disregard of a constitutional or
statutory prohibition by the public respondent agency
or instrumentality of the government; and (3) the lack
of any other party with a more direct and specific
interest in the questions being raised.31 The
allegations of constitutional violations in this case are
not empty attacks on the wisdom of the other
branches of the government. The allegations are
substantiated by facts and, therefore, deserve an
evaluation from the Court. The Court need not
elaborate on the legal and societal ramifications of the
issues raised. It cannot be gainsaid that the JBC is a
constitutional innovation crucial in the selection of the
magistrates in our judicial system.
The Composition of the JBC
Central to the resolution of the foregoing petition is an
understanding of the composition of the JBC as
stated in the first paragraph of Section 8, Article VIII of
the Constitution. It reads:
Section 8. (1) A Judicial and Bar Council is hereby
created under the supervision of the Supreme Court
composed of the Chief Justice as ex officio Chairman,
the Secretary of Justice, and a representative of the
Congress as ex officio Members, a representative of
the Integrated Bar, a professor of law, a retired
Member of the Supreme Court, and a representative
of the private sector.
From a simple reading of the above-quoted provision,
it can readily be discerned that the provision is clear
and unambiguous. The first paragraph calls for the
creation of a JBC and places the same under the
supervision of the Court. Then it goes to its
composition where the regular members are
enumerated: a representative of the Integrated Bar, a
professor of law, a retired member of the Court and a
representative from the private sector. On the second
part lies the crux of the present controversy. It
enumerates the ex officio or special members of the
JBC composed of the Chief Justice, who shall be its
Chairman, the Secretary of Justice and "a
representative of Congress."
As petitioner correctly posits, the use of the singular
letter "a" preceding "representative of Congress" is
unequivocal and leaves no room for any other
construction. It is indicative of what the members of
the Constitutional Commission had in mind, that is,
Congress may designate only one (1) representative
to the JBC. Had it been the intention that more than
one (1) representative from the legislature would sit in
the JBC, the Framers could have, in no uncertain
terms, so provided.
One of the primary and basic rules in statutory
construction is that where the words of a statute are
clear, plain, and free from ambiguity, it must be given
its literal meaning and applied without attempted
interpretation.32 It is a well-settled principle of
constitutional construction that the language
employed in the Constitution must be given their
ordinary meaning except where technical terms are
employed. As much as possible, the words of the
Constitution should be understood in the sense they
have in common use. What it says according to the
text of the provision to be construed compels
acceptance and negates the power of the courts to
alter it, based on the postulate that the framers and
the people mean what they say.33 Verba legis non est
recedendum – from the words of a statute there
should be no departure.34
The raison d’ être for the rule is essentially two-
fold: First, because it is assumed that the words in
which constitutional provisions are couched express
the objective sought to be attained;35 and second,
because the Constitution is not primarily a lawyer’s
document but essentially that of the people, in whose
consciousness it should ever be present as an
important condition for the rule of law to prevail. 36
Moreover, under the maxim noscitur a sociis, where a
particular word or phrase is ambiguous in itself or is
equally susceptible of various meanings, its correct
construction may be made clear and specific by
considering the company of words in which it is
founded or with which it is associated.37 This is
because a word or phrase in a statute is always used
in association with other words or phrases, and its
meaning may, thus, be modified or restricted by the
latter.38 The particular words, clauses and phrases
should not be studied as detached and isolated
expressions, but the whole and every part of the
statute must be considered in fixing the meaning of
any of its parts and in order to produce a harmonious
whole. A statute must be so construed as to
harmonize and give effect to all its provisions
whenever possible.39 In short, every meaning to be
given to each word or phrase must be ascertained
from the context of the body of the statute since a
word or phrase in a statute is always used in
association with other words or phrases and its
meaning may be modified or restricted by the latter.
Applying the foregoing principle to this case, it
becomes apparent that the word "Congress" used in
Article VIII, Section 8(1) of the Constitution is used in
its generic sense. No particular allusion whatsoever is
made on whether the Senate or the House of
Representatives is being referred to, but that, in either
case, only a singular representative may be allowed
to sit in the JBC. The foregoing declaration is but
sensible, since, as pointed out by an esteemed former
member of the Court and consultant of the JBC in his
memorandum,40 "from the enumeration of the
membership of the JBC, it is patent that each
category of members pertained to a single individual
only."41
Indeed, the spirit and reason of the statute may be
passed upon where a literal meaning would lead to
absurdity, contradiction, injustice, or defeat the clear
purpose of the lawmakers.42 Not any of these
instances, however, is present in the case at
bench. Considering that the language of the subject
constitutional provision is plain and unambiguous,
there is no need to resort extrinsic aids such as
records of the Constitutional Commission.
Nevertheless, even if the Court should proceed to
look into the minds of the members of the
Constitutional Commission, it is undeniable from the
records thereof that it was intended that the JBC be
composed of seven (7) members only. Thus:
MR. RODRIGO: Let me go to another point then.
On page 2, Section 5, there is a novel provision about
the appointments of members of the Supreme Court
and judges of the lower courts. At present it is the
President who appoints them. If there is a
Commission on Appointments, then it is the President
with the confirmation of the Commission on
Appointment. In this proposal, we would like to
establish a new office, a sort of a board composed of
seven members called the Judicial and Bar Council.
And while the President will still appoint the member
of the judiciary, he will be limited to the
recommendees of this Council.
x x x           x x x          x x x
MR. RODRIGO. Of the seven members of the
Judicial and Bar Council, the President appoints four
of them who are regular members.
x x x           x x x          x x x
MR. CONCEPCION. The only purpose of the
Committee is to eliminate partisan politics.43
x x x           x x x          x x x
MR. RODRIGO. If my amendment is approved, then
the provision will be exactly the same as the provision
in the 1935 Constitution, Article VIII, Section 5.
x x x           x x x          x x x
If we do not remove the proposed amendment on the
creation of the Judicial and Bar Council, this will be a
diminution of the appointing power of the highest
magistrate of the land, of the
President of the Philippines elected by all the Filipino
people. The appointing power will be limited by a
group of seven people who are not elected by the
people but only appointed.
Mr. Presiding Officer, if this Council is created, there
will be no uniformity in our constitutional provisions on
appointments. The members of the Judiciary will be
segregated from the rest of the government. Even a
municipal judge cannot be appointed by the President
except upon recommendation or nomination of the
three names by this Committee of seven people,
commissioners of the Commission on Elections, the
COA and the Commission on Civil Service…even
ambassadors, generals of the Army will not come
under this restriction. Why are we going to segregate
the Judiciary from the rest of our government in the
appointment of high-ranking officials?
Another reason is that this Council will be ineffective.
It will just besmirch the honor of our President without
being effective at all because this Council will be
under the influence of the President. Four out of
seven are appointees of the President and they can
be reappointed when their term ends. Therefore, they
would be kowtow the President. A fifth member is the
Minister of Justice, an alter ego of the President.
Another member represents the Legislature. In all
probability, the controlling part in the legislature
belongs to the President and, therefore, this
representative form the National Assembly is also
under the influence of the President. And may I say,
Mr. Presiding Officer, that event the Chief Justice of
the Supreme Court is an appointee of the President.
So it is futile he will be influence anyway by the
President.44 [Emphases supplied]
At this juncture, it is worthy to note that the seven-
member composition of the JBC serves a practical
purpose, that is, to provide a solution should there be
a stalemate in voting. This underlying reason leads
the Court to conclude that a single vote may not be
divided into half (1/2), between two representatives of
Congress, or among any of the sitting members of the
JBC for that matter. This unsanctioned practice can
possibly cause disorder and eventually muddle the
JBC’s voting process, especially in the event a tie is
reached. The aforesaid purpose would then be
rendered illusory, defeating the precise mechanism
which the Constitution itself created. While it would be
unreasonable to expect that the Framers provide for
every possible scenario, it is sensible to presume that
they knew that an odd composition is the best means
to break a voting deadlock.
The respondents insist that owing to the bicameral
nature of Congress, the word "Congress" in Section
8(1), Article VIII of the Constitution should be read as
including both the Senate and the House of
Representatives. They theorize that it was so worded
because at the time the said provision was being
drafted, the Framers initially intended a unicameral
form of Congress.
Then, when the Constitutional Commission eventually
adopted a bicameral form of Congress, the Framers,
through oversight, failed to amend Article VIII, Section
8 of the Constitution.45 On this score, the Court cites
the insightful analysis of another member of the Court
and JBC consultant, retired Justice Consuelo Ynares-
Santiago.46 Thus:
A perusal of the records of the Constitutional
Commission reveals that the composition of the JBC
reflects the Commission’s desire "to have in the
Council a representation for the major elements of the
community." xxx The ex-officio members of the
Council consist of representatives from the three main
branches of government while the regular members
are composed of various stakeholders in the
judiciary. The unmistakeable tenor of Article VIII,
Section 8(1) was to treat each ex-officio member
as representing one co-equal branch of
government. xxxThus, the JBC was designed to
have seven voting members with the three ex-
officio members having equal say in the choice of
judicial nominees.
x x x           x x x          x x x
No parallelism can be drawn between the
representative of Congress in the JBC and the
exercise by Congress of its legislative powers
under Article VI and constituent powers under
Article XVII of the Constitution. Congress, in
relation to the executive and judicial branches of
government, is constitutionally treated as another co-
equal branch of in the matter of its representative in
the JBC. On the other hand, the exercise of legislative
and constituent powers requires the Senate and
House of Representatives to coordinate and act as
distinct bodies in furtherance of Congress’ role under
our constitutional scheme. While the latter justifies
and, in fact, necessitates the separateness of the
two houses of Congress as they relate inter se, no
such dichotomy need be made when Congress
interacts with the other two co-equal branches of
government.
It is more in keeping with the co-equal nature of
the three governmental branches to assign the
same weight to considerations that any of its
representatives may have regarding aspiring
nominees to the judiciary. The representatives of
the Senate and the House of Representatives act
as such for one branch and should not have any
more quantitative influence as the other branches
in the exercise of prerogatives evenly bestowed
upon the three. Sound reason and principle of
equality among the three branches support this
conclusion. [Emphases and underscoring supplied]
More than the reasoning provided in the above
discussed rules of constitutional construction, the
Court finds the above thesis as the paramount
justification of the Court’s conclusion that "Congress,"
in the context of JBC representation, should be
considered as one body. It is evident that the
definition of "Congress" as a bicameral body refers to
its primary function in government - to legislate.47 In
the passage of laws, the Constitution is explicit in the
distinction of the role of each house in the process.
The same holds true in Congress’ non-legislative
powers such as, inter alia, the power of
appropriation,48 the declaration of an existence of a
state of war,49 canvassing of electoral returns for the
President and Vice-President,50 and impeachment.51 In
the exercise of these powers, the Constitution
employs precise language in laying down the roles
which a particular house plays, regardless of whether
the two houses consummate an official act by voting
jointly or separately. An inter-play between the two
houses is necessary in the realization of these powers
causing a vivid dichotomy that the Court cannot
simply discount. Verily, each house is constitutionally
granted with powers and functions peculiar to its
nature and with keen consideration to 1) its
relationship with the other chamber; and 2) in
consonance with the principle of checks and
balances, to the other branches of government.
This, however, cannot be said in the case of JBC
representation because no liaison between the two
houses exists in the workings of the JBC. No
mechanism is required between the Senate and the
House of Representatives in the screening and
nomination of judicial officers. Hence, the term
"Congress" must be taken to mean
the entirelegislative department. A fortiori, a pretext of
oversight cannot prevail over the more pragmatic
scheme which the Constitution laid with firmness, that
is, that the JBC has a seat for a single representative
of Congress, as one of the co-equal branches of
government.
Doubtless, the Framers of our Constitution intended
to create a JBC as an innovative solution in response
to the public clamor in favor of eliminating politics in
the appointment of members of the Judiciary.52 To
ensure judicial independence, they adopted a holistic
approach and hoped that, in creating a JBC, the
private sector and the three branches of government
would have an active role and equal voice in the
selection of the members of the Judiciary.
Therefore, to allow the Legislature to have more
quantitative influence in the JBC by having more than
one voice speak, whether with one full vote or one-
half (1/2) a vote each, would, as one former
congressman and member of the JBC put it, "negate
the principle of equality among the three branches of
government which is enshrined in the Constitution."53
To quote one former Secretary of Justice:
The present imbalance in voting power between the
Legislative and the other sectors represented in the
JBC must be corrected especially when considered
vis-à-vis the avowed purpose for its creation, i.e., to
insulate the appointments in the Judiciary against
political influence. By allowing both houses of
Congress to have a representative in the JBC and by
giving each representative one (1) vote in the Council,
Congress, as compared to the other members of the
JBC, is accorded greater and unwarranted influence
in the appointment of judges.54[Emphasis supplied]
It is clear, therefore, that the Constitution mandates
that the JBC be composed of seven (7) members
only. Thus, any inclusion of another member, whether
with one whole vote or half (1/2) of it, goes against
that mandate. Section 8(1), Article VIII of the
Constitution, providing Congress with an equal voice
with other members of the JBC in recommending
appointees to the Judiciary is explicit. Any
circumvention of the constitutional mandate should
not be countenanced for the Constitution is the
supreme law of the land. The Constitution is the basic
and paramount law to which all other laws must
conform and to which all persons, including the
highest officials of the land, must defer. Constitutional
doctrines must remain steadfast no matter what may
be the tides of time. It cannot be simply made to sway
and accommodate the call of situations and much
more tailor itself to the whims and caprices of the
government and the people who run it.55 Hence, any
act of the government or of a public official or
employee which is contrary to the Constitution is
illegal, null and void.
As to the effect of the Court’s finding that the current
composition of the JBC is unconstitutional, it bears
mentioning that as a general rule, an unconstitutional
act is not a law; it confers no rights; it imposes no
duties; it affords no protection; it creates no office; it is
inoperative as if it has not been passed at all.56 This
rule, however, is not absolute. In the interest of fair
play under the doctrine of operative facts, actions
previous to the declaration of unconstitutionality are
legally recognized. They are not nullified. In Planters
Products, Inc. v. Fertiphil Corporation,57the Court
explained:
The doctrine of operative fact, as an exception to the
general rule, only applies as a matter of equity and
fair play.1âwphi1 It nullifies the effects of an
unconstitutional law by recognizing that the existence
of a statute prior to a determination of
unconstitutionality is an operative fact and may have
consequences which cannot always be ignored. The
past cannot always be erased by a new judicial
declaration.
The doctrine is applicable when a declaration of
unconstitutionality will impose an undue burden on
those who have relied on the invalid law. Thus, it was JOSE CATRAL MENDOZA
applied to a criminal case when a declaration of Associate Justice
unconstitutionality would put the accused in double
jeopardy or would put in limbo the acts done by a
municipality in reliance upon a law creating it.
Considering the circumstances, the Court finds the
exception applicable in this case and holds that
notwithstanding its finding of unconstitutionality in the
current composition of the JBC, all its prior official
actions are nonetheless valid.
At this point, the Court takes the initiative to clarify
that it is not in a position to determine as to who
should remain as the sole representative of Congress
in the JBC. This is a matter beyond the province of
the Court and is best left to the determination of
Congress.
Finally, while the Court finds wisdom in respondents'
contention that both the Senate and the House of
Representatives should be equally represented in the
JBC, the Court is not in a position to stamp its
imprimatur on such a construction at the risk of
expanding the meaning of the Constitution as
currently worded. Needless to state, the remedy lies
in the amendment of this constitutional provision. The
courts merely give effect to the lawgiver's intent. The
solemn power and duty of the Court to interpret and
apply the law does not include the power to correct,
by reading into the law what is not written therein.
WHEREFORE, the petition is GRANTED. The current
numerical composition of the Judicial and Bar Council
IS declared UNCONSTITUTIONAL. The Judicial and
Bar Council is hereby enjoined to reconstitute itself so
that only one ( 1) member of Congress will sit as a
representative in its proceedings, in accordance with
Section 8( 1 ), Article
VIII of the 1987 Constitution.
This disposition is immediately executory.
SO ORDERED.
G.R. No. 192088               October 9, 2012
INITIATIVES FOR DIALOGUE AND
EMPOWERMENT THROUGH ALTERNATIVE
LEGAL SERVICES, INC. (IDEALS, INC.),
represented by its Executive Director, Mr.
Edgardo Ligon, and FREEDOM FROM DEBT
COALITION (FDC), represented by its Vice
President Rebecca L. Malay, AKBAYAN CITIZEN'S
ACTION PARTY, represented by its Chair
Emeritus Loretta Anne P. Rosales, ALLIANCE OF
PROGRESSIVE LABOR, represented by its
Chairperson, Daniel L. Edralin, REP. WALDEN
BELLO, in his capacity as duly-elected Member of
the House of Representatives, Petitioners,  the electric power industry, including the privatization
vs.
POWER SECTOR ASSETS AND LIABILITIES
MANAGEMENT CORPORATION (PSALM),
represented by its Acting President and Chief
Executive Officer Atty. Ma. Luz L. Caminero,
METROPOLITAN WATERWORKS AND
SEWERAGE SYSTEM (MWSS), represented by its
Administrator Atty. Diosdado M. Allado,
NATIONAL IRRIGATION ADMINISTRATION (NIA),
represented by its Administrator Carlos S.
Salazar, KOREA WATER RESOURCES
CORPORATION, represented by its Chief
Executive Officer, Kim Kuen-Ho and/or Attorneys-
in-fact, Atty. Anna Bianca L. Torres and Atty.
Luther D. Ramos, FIRST GEN NORTHERN
ENERGY CORP., represented by its President, Mr.
Federico R. Lopez, SAN MIGUEL CORP.,
represented by its President, Mr. Ramon S. Ang,
SNABOITIZ POWER-PANGASINAN INC.,
represented by its President, Mr. Antonio R.
Moraza, TRANS-ASIA OIL AND ENERGY
DEVELOPMENT CORPORATION, represented by
its President and CEO, Mr. Francisco L. Viray, and
DMCI POWER CORP., represented by its
President, Mr. Nestor Dadivas,Respondents.
DECISION
VILLARAMA, J.:
Before us is a petition for certiorari and prohibition
seeking to permanently enjoin the sale of the Angat
Hydro-Electric Power Plant (AHEPP) to Korea Water
Resources Corporation (K-Water) which won the
public bidding conducted by the Power Sector Assets
and Liabilities Management Corporation (PSALM).
The Facts
Respondent PSALM is a government-owned and
controlled corporation created by virtue of Republic
Act No. 9136,1otherwise known as the "Electric Power
Industry Reform Act of 2001" (EPIRA). The
EPIRAprovided a framework for the restructuring of
of the assets of the National Power Corporation
(NPC), the transition to the desired competitive
structure, and the definition of the responsibilities of
the various government agencies and private entities.
Said law mandated PSALM to manage the orderly
sale, disposition, and privatization of NPC generation
assets, real estate and other disposable assets, and
Independent Power Producer (IPP) contracts with the
objective of liquidating all NPC financial obligations
and stranded contract costs in an optimal manner,
which liquidation is to be completed within PSALM’s
25-year term of existence.2
Sometime in August 2005, PSALM commenced the
privatization of the 246-megawatt (MW) AHEPP
located in San Lorenzo, Norzagaray, Bulacan.
AHEPP’s main units built in 1967 and 1968, and 5
auxiliary units, form part of the Angat Complex which
includes the Angat Dam, Angat Reservoir and the
outlying watershed area. A portion of the AHEPP - the
10 MW Auxiliary Unit No. 4 completed on June 16,
1986 and the 18 MW Auxiliary Unit No. 5 completed
on January 14, 1993 - is owned by respondent
Metropolitan Waterworks and Sewerage System
(MWSS).3 The main units produce a total of 200 MW
of power while the auxiliary units yield the remaining
46 MW of power. The Angat Dam and AHEPP are
utilized for power generation, irrigation, water supply
and flood control purposes. Because of its multi-
functional design, the operation of the Angat Complex
involves various government agencies, namely: (1)
NPC; (2) National Water Resources Board (NWRB);
(3) MWSS; (4) respondent National Irrigation
Administration (NIA); and (5) Philippine Atmospheric,
Geophysical and Astronomical Services
Administration (PAG-ASA).
On December 15, 2009, PSALM’s Board of Directors
approved the Bidding Procedures for the privatization
of the AHEPP. An Invitation to Bid was published on
January 11, 12 and 13, 2010 in three major national
newspapers. Subject of the bid was the AHEPP
consisting of 4 main units and 3 auxiliary units with an
aggregate installed capacity of 218 MW. The two
auxiliary units owned by MWSS were excluded from
the bid.
The following terms and conditions for the purchase
of AHEPP were set forth in the Bidding Package:
IB-05 CONDITION OF THE SALE
The Asset shall be sold on an "AS IS, WHERE
IS" basis.
The Angat Dam (which is part of the Non-Power
Components) is a multi-purpose hydro facility which
currently supplies water for domestic use, irrigation
and power generation. The four main units of the
Angat Plant release water to an underground trailrace
that flows towards the Bustos Dam which is owned
and operated by the National Irrigation Administration
("NIA") and provides irrigation requirements to certain
areas in Bulacan. The water from the auxiliary units 1,
2 and 3 flows to the Ipo Dam which is owned and
operated by MWSS and supplies domestic water to
Metro Manila and other surrounding cities.
The priority of water usage under Philippine Law
would have to be observed by the Buyer/Operator.
The Winning Bidder/Buyer shall be requested to enter
into an operations and maintenance agreement with
PSALM for the Non-Power Components in
accordance with the terms and conditions of the O &
M Agreement to be issued as part of the Final
Transaction Documents. The Buyer, as Operator,
shall be required to operate and maintain the Non-
Power Components at its own cost and expense.
PSALM is currently negotiating a water protocol
agreement with various parties which are currently the
MWSS, NIA, the National Water Resources Board
and NPC. If required by PSALM, the Buyer will be
required to enter into the said water protocol
agreement as a condition to the award of the Asset.
The Buyer shall be responsible for securing the
necessary rights to occupy the land underlying the
Asset.4 (Emphasis supplied.)
All participating bidders were required to comply with
the following:
(a) submission of a Letter of Interest; (b) execution of
Confidentiality Agreement and Undertaking; and (c)
payment of a non-refundable fee of US$ 2,500 as
Participation Fee.5 After holding pre-bid conferences
and forum discussions with various stakeholders,
PSALM received the following bids from six
competing firms:
US$
K-Water
440,880,000.00
First Gen Northern Energy 365,000,678.00
Corporation  
San Miguel Corporation 312,500,000.00
SNAboitiz Power-Pangasinan,
256,000,000.00
Inc.
Trans-Asia Oil & Energy 237,000,000.00
Development Corporation  
DMCI Power Corporation 188,890,000.00
On May 5, 2010, and after a post-bid evaluation,
PSALM’s Board of Directors approved and confirmed
the issuance of a Notice of Award to the highest
bidder, K-Water.6
On May 19, 2010, the present petition with prayer for
a temporary restraining order (TRO) and/or writ of
preliminary injunction was filed by the Initiatives for
Dialogue and Empowerment Through Alternative
Legal Services, Inc. (IDEALS), Freedom from Debt
Coalition (FDC), AKBAYAN Citizen’s Action Party
(AKBAYAN) and Alliance of Progressive Labor.
On May 24, 2010, this Court issued a Status QuoAnte
Order directing the respondents to maintain the status
quo prevailing before the filing of the petition and to
file their respective Comments on the petition.7
Arguments of the Parties
Petitioners contend that PSALM gravely abused its
discretion when, in the conduct of the bidding it
disregarded and violated the people’s right to
information guaranteed under the Constitution, as
follows: (1) the bidding process was commenced by
PSALM without having previously released to the
public critical information such as the terms and
conditions of the sale, the parties qualified to bid and
the minimum bid price, as laid down in the case of
Chavez v. Public Estates Authority8 ; (2) PSALM
refused to divulge significant information requested by
petitioners, matters which are of public concern; and
(3) the bidding was not conducted in an open and
transparent manner, participation was indiscriminately
restricted to the private sectors in violation of the
EPIRA which provides that its provisions shall be
"construed in favor of the establishment, promotion,
preservation of competition and people empowerment
so that the widest participation of the people, whether
directly or indirectly, is ensured."9
Petitioners also assail the PSALM in not offering the
sale of the AHEPP to MWSS which co-owned the
Angat Complex together with NPC and NIA. Being a
mere co-owner, PSALM cannot sell the AHEPP
without the consent of co-owners MWSS and NIA,
and being an indivisible thing, PSALM has a positive
obligation to offer its undivided interest to the other
co-owners before selling the same to an outsider.
Hence, PSALM’s unilateral disposition of the said
hydro complex facility violates the Civil Code rules on
co-ownership (Art. 498) and Sec. 47 (e) of the EPIRA
which granted PSALM the legal option of transferring
possession, control and operation of NPC generating
assets like the AHEPP to another entity in order "to
protect potable water, irrigation and all other
requirements imbued with public interest."
As to the participation in the bidding of and award of
contract to K-Water which is a foreign corporation,
petitioners contend that PSALM clearly violated the
constitutional provisions on the appropriation and
utilization of water as a natural resource, as
implemented by the Water Code of the Philippines
limiting water rights to Filipino citizens and
corporations which are at least 60% Filipino-owned.
Further considering the importance of the Angat Dam
which is the source of 97% of Metro Manila’s water
supply, as well as irrigation for farmlands in 20
municipalities and towns in Pampanga and Bulacan,
petitioners assert that PSALM should prioritize such
domestic and community use of water over that of
power generation.
They maintain that the Philippine Government, along
with its agencies and subdivisions, have an obligation
under international law, to recognize and protect the
legally enforceable human right to water of petitioners
and the public in general.
Petitioners cite the Advisory on the "Right to Water in
Light of the Privatization of the Angat Hydro-Electric
Power Plant"10 dated November 9, 2009 issued by the
Commission on Human Rights (CHR) urging the
Government to revisit and reassess its policy on water
resources vis-à-vis its concurrent obligations under
international law to provide, and ensure and sustain,
among others, "safe, sufficient, affordable and
convenient access to drinking water." Since
investment in hydropower business is primarily driven
by generation of revenues both for the government
and private sector, the CHR warns that once the
AHEPP is privatized, there will be less accessible
water supply, particularly for those living in Metro
Manila and the Province of Bulacan and nearby areas
which are currently benefited by the AHEPP. The
CHR believes that the management of AHEPP is
better left to MWSS being a government body and
considering the public interest involved. However,
should the decision to privatize the AHEPP become
inevitable, the CHR strongly calls for specific and
concrete safeguards to ensure the right to water of all,
as the domestic use of water is more fundamental
than the need for electric power.
Petitioners thus argue that the protection of their right
to water and of public interest requires that the
bidding process initiated by PSALM be declared null
and void for violating such right, as defined by
international law and by domestic law establishing the
State’s obligation to ensure water security for its
people.
In its Comment With Urgent Motion to Lift Status Quo
Ante Order, respondent PSALM prayed for the
dismissal of the petition on the following procedural
grounds: (a) a petition for certiorari is not the proper
remedy because PSALM was not acting as a tribunal
or board exercising judicial or quasi-judicial functions
when it commenced the privatization of AHEPP; (b)
the present petition is rendered moot by the issuance
of a Notice of Award in favor of K-Water; (c) assuming
the petition is not mooted by such contract award, this
Court has no jurisdiction over the subject matter of the
controversy involving a political question, and also
because if it were the intent of Congress to exclude
the AHEPP in the privatization of NPC assets, it
should have clearly expressed such intent as it did
with the Agus and Pulangui power plants under Sec.
47 of the EPIRA; (d) petitioners’ lack of standing to
question the bidding process for failure to show any
injury as a result thereof, while Rep. Walden Bello
likewise does not have such legal standing in his
capacity as a duly elected member of the House of
Representatives as can be gleaned from the rulings in
David v. Arroyo11 and Philippine Constitutional
Association v. Enriquez.12
On the alleged violation of petitioners’ right to
information, PSALM avers that it conducted the
bidding in an open and transparent manner, through a
series of events in accordance with the governing
rules on public bidding. The non-disclosure of certain
information in the invitation to bid was
understandable, such as the minimum or reserve
price which are still subject to negotiation and
approval of PSALM’s Board of Directors. The ruling in
Chavez v. Public Estates Authority13 is inapplicable
since it involved government property which has
become unserviceable or was no longer needed and
thus fell under Sec. 79 of the Government Auditing
Code whereas the instant case concerns a
hydroelectric power plant adjacent to a dam which still
provides water supply to Metro Manila. In the bidding
for the AHEPP, PSALM claims that it relied on the
Rules and Regulations Implementing the EPIRA, as
well as COA Circular No. 89-296 on the general
procedures for bidding by government agencies and
instrumentalities of assets that will be divested or
government property that will be disposed of. PSALM
likewise avers that it was constrained to deny
petitioner IDEALS’ letter dated April 20, 2010
requesting documents relative to the privatization of
Angat Dam due to non-submission of a Letter of
Interest, Confidentiality and Undertaking and non-
payment of the Participation Fee. With regard to
IDEALS’ request for information about the winning
bidder, as contained in its letter dated May 14, 2010,
the same was already referred to respondent K-
Water’s counsel for appropriate action.
In any case, PSALM maintains that not all details
relative to the privatization of the AHEPP can be
readily disclosed; the confidentiality of certain matters
was necessary to ensure the optimum bid price for
the property.
PSALM further refutes the assertion of petitioners that
the Angat Complex is an indivisible system and co-
owned with MWSS and NIA. It contends that MWSS’s
contribution in the funds used for the construction of
the AHEPP did not give rise to a regime of co-
ownership as the said funds were merely in exchange
for the supply of water that MWSS would get from the
Angat Dam, while the Umiray-AngatTransbasin
Rehabilitation Project the improvement and repair of
which were funded by MWSS, did not imply a co-
ownership as these facilities are located in remote
places. Moreover, PSALM points out that PSALM,
MWSS and NIA each was issued a water permit, and
are thus holders of separate water rights.
On the alleged violation of petitioners’ and the
people’s right to water, PSALM contends that such is
baseless and proceeds from the mistaken assumption
that the Angat Dam was sold and as a result thereof,
the continuity and availability of domestic water
supply will be interrupted. PSALM stresses that only
the hydroelectric facility is being sold and not the
Angat Dam which remains to be owned by PSALM,
and that the NWRB still governs the water allocation
therein while the NPC-FFWSDO still retains exclusive
control over the opening of spillway gates during rainy
season. The foregoing evinces the continued
collective control by government agencies over the
Angat Dam, which in the meantime, is in dire need of
repairs, the cost of which cannot be borne by the
Government.
PSALM further debunks the nationality issue raised
by petitioners, citing previous opinions rendered by
the Department of Justice (DOJ) consistently holding
that the utilization of water by a hydroelectric power
plant does not constitute appropriation of water from
its natural source considering that the source of water
(dam) that enters the intake gate of the power plant is
an artificial structure. Moreover, PSALM is mindful of
the State’s duty to protect the public’s right to water
when it sold the AHEPP. In fact, such concern as
taken into consideration by PSALM in devising a
privatization scheme for the AHEPP whereby the
water allocation is continuously regulated by the
NWRB and the dam and its spillway gates remain
under the ownership and control of NPC.
In its Comment,14 respondent MWSS asserts that by
virtue of its various statutory powers since its creation
in 1971, which includes the construction, maintenance
and operation of dams, reservoir and other
waterworks within its territorial jurisdiction, it has
supervision and control over the Angat Dam given
that the Angat Reservoir supplies approximately 97%
of the water requirements of Metro Manila. Over the
course of its authority over the Angat Dam, Dykes and
Reservoir, MWSS has incurred expenses to maintain
their upkeep, improve and upgrade their facilities.
Thus, in 1962, MWSS contributed about 20% for the
construction cost of the Angat Dam and Dykes (then
equivalent to about ₱ 21 million); in 1992, MWSS
contributed about ₱ 218 million for the construction of
Auxiliary Unit No. 5; in 1998, MWSS contributed ₱
73.5 million for the construction cost of the low level
outlet; and subsequently, MWSS invested ₱ 3.3 billion
to build the Umiray-AngatTransbasin Tunnel to
supplement the water supply available from the Angat
Dam, which tunnel contributes a minimum of about 9
cubic meters per second to the Angat Reservoir, thus
increasing power generation. MWSS argues that its
powers over waterworks are vested upon it by a
special law (MWSS Charter) which prevails over the
EPIRA which is a general law, as well as other special
laws, issuances and presidential edicts. And as
contained in Sec. 1 of the MWSS Charter, which
remains valid and effective, it is expressly provided
that the establishment, operation and maintenance of
waterworks systems must always be supervised by
the State.
MWSS further alleges that after the enactment of
EPIRA, it had expressed the desire to acquire
ownership and control of the AHEPP so as not to
leave the operation of the Angat Reservoir to private
discretion that may prejudice the water allocation to
MWSS as dictated by NWRB rules.
Representations were thereafter made with the Office
of the President (OP) for the turn over of the
management of these facilities to MWSS, and joint
consultation was also held with PSALM officials for
the possibility of a Management Committee to
manage and control the Angat Dam Complex under
the chairmanship of the water sector, which position
was supported by former Secretary
HermogenesEbdane of the Department of Public
Works and Highways (DPWH). In March 2008,
PSALM proposed the creation of an inter-agency
technical working group (TWG) to draft the
Operations and Maintenance (O & M) Agreement for
the AHEPP that will be in effect after its privatization.
PSALM likewise sought the view of the Office of the
Government Corporate Counsel (OGCC) which
opined that PSALM may turn over the facility to a
qualified entity such as MWSS without need of public
bidding. In 2009, various local governments
supported the transfer of the control and management
of the AHEPP to MWSS, while the League of Cities
and Municipalities interposed its opposition to the
privatization of the AHEPP fearing that it might
increase the cost of water in Metro Manila, and also
because it will be disadvantageous to the national
government since the AHEPP only contributes 246
MW of electricity to the Luzon Grid. Even the CHR
has advised the Government to reassess its
privatization policy and to always consider paramount
the most basic resources necessary and
indispensable for human survival, which includes
water.
MWSS further avers that upon the facilitation of the
OGCC and participated in by various stakeholders,
including its two concessionaires, Manila Water
Company, Inc. and Maynilad Water Services, Inc.,
various meetings and conferences were held relative
to the drafting of the
Memorandum of Agreement on the Angat Water
Protocol. On April 20, 2010, the final draft of the
Angat Water Protocol was finally complete. However,
as of June 18, 2010, only MWSS and NIA signed the
said final draft. MWSS thus contends that PSALM
failed to institute any safeguards as prescribed in Sec.
47 of the EPIRA when it proceeded with the
privatization of the AHEPP.
As to the issue of nationality requirement in the
appropriation of water resources under the
Constitution, MWSS cites the case of Manila Prince
Hotel v. Government Service Insurance
System15 which interpreted paragraph 2, Sec. 10, Art.
XII of the 1987 Constitution providing that "in the grant
of rights, privileges, and concessions covering the
national economy and patrimony, the State shall give
preference to qualified Filipinos" to imply "a
mandatory, positive command which is complete in
itself and which needs no further guidelines or
implementing laws or rules for its enforcement x xx
and is per se judicially enforceable." In this case, the
AHEPP is in dire danger of being wholly-owned by a
Korean corporation which probably merely considers
it as just another business opportunity, and as such
cannot be expected to observe and ensure the
smooth facilitation of the more critical purposes of
water supply and irrigation.
Respondent First Gen Northern Energy Corporation
(FGNEC) also filed a Comment16 disagreeing with the
contentions of petitioners and respondent MWSS on
account of the following: (1) the NPC charter vested
upon it complete jurisdiction and control over
watersheds like the Angat Watershed surrounding the
reservoir of the power plants, and hence Art. 498 of
the Civil Code is inapplicable; (2) NPC, MWSS and
NIA are not co-owners of the various rights over the
Angat Dam as in fact each of them holds its own
water rights; (3) the State through the EPIRA
expressly mandates PSALM to privatize all NPC
assets, which necessarily includes the AHEPP; (4)
the privatization of the AHEPP will not affect the
priority of water for domestic and municipal uses as
there are sufficient safeguards to ensure the same,
and also because the Water Code specifically
mandates that such use shall take precedence over
other uses, and even the EPIRA itself gives priority to
use of water for domestic and municipal purposes
over power generation; (5) the Water Protocol also
safeguards priority of use of water for domestic
purposes; (6) the bidding procedure for the AHEPP
was valid, and the bidding was conducted by PSALM
in an open and transparent manner; and (7) the right
to information of petitioners and the public in general
was fully satisfied, and PSALM adopted reasonable
rules and regulations for the orderly conduct of its
functions pursuant to its mandate under the EPIRA.
FGNEC nevertheless prays of this Court to declare
the nationality requirements for the ownership,
operation and maintenance of the AHEPP as
prescribed by the Constitution and pertinent laws.
Considering the allegation of petitioners that K-Water
is owned by the Republic of South Korea, FGNEC
asserts that PSALM should not have allowed said
entity to participate in the bidding because under our
Constitution, the exploration, development and
utilization of natural resources are reserved to Filipino
citizens or to corporations with 60% of their capital
being owned by Filipinos.
Respondent NIA filed its Comment17 stating that its
interest in this case is limited only to the protection of
its water allocation drawn from the Angat Dam as
determined by the NWRB. Acknowledging that it has
to share the meager water resources with other
government agencies in fulfilment of their respective
mandate, NIA submits that it is willing to sit down and
discuss issues relating to water allocation, as
evidenced by the draft Memorandum of Agreement on
the Angat Water Protocol. Since the reliefs prayed for
in the instant petition will not be applicable to NIA
which was not involved in the bidding conducted by
PSALM, it will thus not be affected by the outcome of
the case.
Respondents San Miguel Corporation (SMC), DMCI
Power Corporation, Trans-Asia Oil and Energy
Development Corporation and SNAboitiz Power-
Pangasinan, Inc. filed their respective
Comments18 with common submission that they are
not real parties-in-interest and should be excluded
from the case. They assert that PSALM acted
pursuant to its mandate to privatize the AHEPP when
it conducted the bidding, and there exists no reason
for them to take any action to invalidate the said
bidding wherein they lost to the highest bidder K-
Water.
On its part, respondent K-Water filed a Manifestation
In Lieu of Comment19 stating that it is not in a position
to respond to petitioners’ allegations, having justifiably
relied on the mandate and expertise of PSALM in the
conduct of public bidding for the privatization of the
AHEPP and had no reason to question the legality or
constitutionality of the privatization process, including
the bidding. K-Water submits that its participation in
the bidding for the AHEPP was guided at all times by
an abiding respect for the Constitution and the laws of
the Philippines, and hopes for a prompt resolution of
the present petition to further strengthen and enhance
the investment environment – considering the level of
investment entailed, not only in financial terms – by
providing a definitive resolution and reliable guidance
for investors, whether Filipino or foreign, as basis for
effective investment and business decisions.
In their Consolidated Reply,20 petitioners contend that
the instant petition is not mooted with the issuance of
a Notice of Award to K-Water because the
privatization of AHEPP is not finished until and unless
the deed of absolute sale has been executed. They
cite the ruling in David v. Arroyo,21 that courts will
decide cases, otherwise moot and academic, if:
first, there is a grave violation of the Constitution;
second, the exceptional character of the situation and
the paramount public interest is involved; third, when
constitutional issue raised requires formulation of
controlling principles to guide the bench, the bar and
the public; and fourth, the case is capable of repetition
yet evading review.
Petitioners reiterate their legal standing to file the
present suit in their capacity as taxpayers, or as
Filipino citizens asserting the promotion and
protection of a public right, aside from being directly
injured by the proceedings of PSALM. As to the
absence of Certification and Verification of Non-
Forum Shopping from petitioner Bello in the file copy
of PSALM, the same was a mere inadvertence in
photocopying the same.
On the matter of compliance with an open and
transparent bidding, petitioners also reiterate as held
in Chavez v. Public Estates Authority,22 that the
Court’s interpretation of public bidding applies to any
law which requires public bidding, especially since
Sec. 79 of the Government Auditing Code does not
enumerate the data that must be disclosed to the
public. PSALM should have followed the minimum
requirements laid down in said case instead of
adopting the "format generally used by government
entities in their procurement of goods, infrastructure
and consultancy services," considering that what was
involved in Chavez is an amended Joint Venture
Agreement which seeks to transfer title and
ownership over government property. Petitioners
point out that the requirement under COA Circular 89-
296 as regards confidentiality covers only sealed
proposals and not all information relating to the
AHEPP privatization. PSALM’s simple referral of
IDEALS’ request letter to the counsel of K-Water is
very telling, indicating PSALM’s limited knowledge
about a company it allowed to participate in the
bidding and which even won the bidding.
On the transfer of water rights to K-Water, petitioners
reiterate that this violates the Water Code, and
contrary to PSALM’s statements, once NPC transfers
its water permit to K-Water, in accordance with the
terms of the Asset Purchase Agreement, NPC gives
up its authority to extract or utilize water from the
Angat River. Petitioners further assert that the terms
of the sale of AHEPP allowing the buyer the operation
and management of the Non-Power Components,
constitutes a relinquishment of government control
over the Angat Dam, in violation of Art. XII, Sec. 2 of
the Constitution. PSALM likewise has not stated that
all stakeholders have signed the Water Protocol.
Such absence of a signed Water Protocol is alarming
in the light of PSALM’s pronouncement that the terms
of the sale to K-Water would still subject to
negotiation. Is PSALM’s refusal to sign the Water
Protocol part of its strategy to negotiate the terms of
the sale with the bidders? If so, then PSALM is
blithely and cavalierly bargaining away the Filipinos’
right to water.
Responding to the claims of MWSS in its Comment,
PSALM contends that MWSS’s allegations regarding
the bidding process is belied by MWSS’s own
admission that it held discussions with PSALM to
highlight the important points and issues surrounding
the AHEPP privatization that needed to be threshed
out. Moreover, MWSS also admits having
participated, along with other agencies and
stakeholders, various meetings and conferences
relative to the drafting of a Memorandum of
Agreement on the Angat Water Protocol.
As regards the Angat Dam, PSALM emphasizes that
MWSS never exercised jurisdiction and control over
the said facility. PSALM points out that the Angat
Dam was constructed in 1967, or four years before
the enactment of Republic Act No. 6234, upon the
commissioning thereof by the NPC and the
consequent construction by Grogun, Inc., a private
corporation. MWSS’ attempt to base its claim of
jurisdiction over the Angat Dam upon its
characterization of EPIRA as a general law must
likewise fail. PSALM explains that EPIRA cannot be
classified as a general law as it applies to a particular
portion of the State, i.e., the energy sector. The
EPIRA must be deemed an exception to the provision
in the Revised MWSS Charter on MWSS’s general
jurisdiction over waterworks systems.
PSALM stresses that pursuant to the EPIRA, PSALM
took ownership of all existing NPC generation assets,
liabilities, IPP contracts, real estate and other
disposable assets, which necessarily includes the
AHEPP Complex, of which the Angat Dam is part. As
to the OGCC opinion cited by MWSS to support its
position that control and management of the Angat
Dam Complex should be turned over to MWSS, the
OGCC had already issued a second opinion dated
August 20, 2008 which clarified the tenor of its earlier
Opinion No. 107, s. 2008, stating that "the disposal of
the Angat HEPP by sale through public bidding – the
principal mode of disposition under EPIRA – remains
PSALM’s primary option." Moreover, as pointed out
by the National Economic Development Authority
(NEDA) in its letter dated September 16, 2009, the
ownership and operation of a hydropower plant goes
beyond the mandate of MWSS. This view is
consistent with the provisions of EPIRA mandating
the transfer of ownership and control of NPC
generation assets, IPP Contracts, real estate and
other disposable assets to a private person or entity.
Consequently, a transfer to another government entity
of the said NPC assets would be a clear violation of
the EPIRA. Even assuming such is allowed by
EPIRA, it would not serve the objective of the EPIRA,
i.e., that of liquidating all NPC’s financial obligations
and would merely transfer NPC’s debts from the
hands of one government entity to another, the funds
that would be utilized by MWSS in the acquisition of
the AHEPP would doubtless come from the pockets
of the Filipino people.
As regards the opposition of various local government
units to the sale of the AHEPP, PSALM said that a
forum was held specifically to address their concerns.
After the said forum, these LGUs did not anymore
raise the same concerns; such inaction on their part
could be taken as an acquiescence to, and
acceptance of, the explanations made by PSALM
during the forum.
PSALM had made it clear that it is only the AHEPP
and not the Angat Dam which was being privatized.
The same wrong premise underpinned the position of
the CHR with its erroneous allegation that MWSS is
allowed, under its Revised Charter, to operate and
maintain a power plant.
PSALM further contends that the sale of AHEPP to K-
Water did not violate the Constitution’s provision on
the State’s natural resources and neither is the ruling
in Manila Prince Hotel applicable as said case was
decided under different factual circumstances. It
reiterates that the AHEPP, being a generation asset,
can be sold to a foreign entity, under the EPIRA, in
accordance with the policy reforms said law
introduced in the power sector; the EPIRA aims to
enable open access in the electricity market and then
enable the government to concentrate more fully on
the supply of basic needs to the Filipino people.
Owing to the competitive and open nature of the
generation sector, foreign corporation may own
generation assets.
Issues
The present controversy raised the following issues:
1) Legal standing of petitioners;
2) Mootness of the petition;
3) Violation of the right to information;
4) Ownership of the AHEPP;
5) Violation of Sec. 2, Art. XII of the Constitution;
6) Violation of the Water Code provisions on the grant
of water rights; and
7) Failure of PSALM to comply with Sec. 47 (e) of
EPIRA.
Mootness and Locus Standi
PSALM’s contention that the present petition had
already been mooted by the issuance of the Notice of
Award to K-Water is misplaced. Though petitioners
had sought the immediate issuance of injunction
against the bidding commenced by PSALM --
specifically enjoining it from proceeding to the next
step of issuing a notice of award to any of the bidders
-- they further prayed that PSALM be permanently
enjoined from disposing of the AHEPP through
privatization. The petition was thus filed not only as a
means of enforcing the State’s obligation to protect
the citizens’ "right to water" that is recognized under
international law and legally enforceable under our
Constitution, but also to bar a foreign corporation from
exploiting our water resources in violation of Sec. 2,
Art. XII of the 1987 Constitution. If the impending sale
of the AHEPP to K-Water indeed violates the
Constitution, it is the duty of the Court to annul the
contract award as well as its implementation. As this
Court held in Chavez v. Philippine Estates
Authority,23 "supervening events, whether intended or
accidental, cannot prevent the Court from rendering a
decision if there is a grave violation of the
Constitution."
We also rule that petitioners possess the requisite
legal standing in filing this suit as citizens and
taxpayers.
"Legal standing" or locus standi has been defined as
a personal and substantial interest in the case such
that the party has sustained or will sustain direct injury
as a result of the governmental act that is being
challenged, alleging more than a generalized
grievance. The gist of the question of 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."24 This Court,
however, has adopted a liberal attitude on the locus
standi of a petitioner where the petitioner is able to
craft an issue of transcendental significance to the
people, as when the issues raised are of paramount
importance to the public.25Thus, when the proceeding
involves the assertion of a public right, the mere fact
that the petitioner is a citizen satisfies the requirement
of personal interest.26
There can be no doubt that the matter of ensuring
adequate water supply for domestic use is one of
paramount importance to the public. That the
continued availability of potable water in Metro Manila
might be compromised if PSALM proceeds with the
privatization of the hydroelectric power plant in the
Angat Dam Complex confers upon petitioners such
personal stake in the resolution of legal issues in a
petition to stop its implementation.
Moreover, we have held that if the petition is
anchored on the people’s right to information on
matters of public concern, any citizen can be the real
party in interest. The requirement of personal interest
is satisfied by the mere fact that the petitioner is a
citizen, and therefore, part of the general public which
possesses the right. There is no need to show any
special interest in the result. It is sufficient that
petitioners are citizens and, as such, are interested in
the faithful execution of the laws.27
Violation of Right to Information
The people’s right to information is provided in
Section 7, Article III of the Constitution, which reads:
Sec. 7. The right of the people to information on
matters of public concern shall be recognized. Access
to official records, and to documents, and papers
pertaining to official acts, transactions, or decisions,
as well as to government research data used as basis
for policy development, shall be afforded the citizen,
subject to such limitations as may be provided by law.
(Emphasis supplied.)
The people’s constitutional right to information is
intertwined with the government’s constitutional duty
of full public disclosure of all transactions involving
public interest.28 Section 28, Article II of the
Constitution declares the State policy of full
transparency in all transactions involving public
interest, to wit:
Sec. 28. Subject to reasonable conditions prescribed
by law, the State adopts and implements a policy of
full public disclosure of all its transactions involving
public interest. (Italics supplied.)
The foregoing constitutional provisions seek to
promote transparency in policy-making and in the
operations of the government, as well as provide the
people sufficient information to exercise effectively
other constitutional rights. They are also essential to
hold public officials "at all times x xx accountable to
the people," for unless citizens have the proper
information, they cannot hold public officials
accountable for anything. Armed with the right
information, citizens can participate in public
discussions leading to the formulation of government
policies and their effective implementation. An
informed citizenry is essential to the existence and
proper functioning of any democracy.29
Consistent with this policy, the EPIRA was enacted to
provide for "an orderly and transparent privatization"
of NPC’s assets and liabilities.30 Specifically, said law
mandated that "all assets of NPC shall be sold in an
open and transparent manner through public
bidding."31
In Chavez v. Public Estates Authority32 involving the
execution of an Amended Joint Venture Agreement
on the disposition of reclaimed lands without public
bidding, the Court held:
x x xBefore the consummation of the contract, PEA
must, on its own and without demand from anyone,
disclose to the public matters relating to the
disposition of its property. These include the size,
location, technical description and nature of the
property being disposed of, the terms and conditions
of the disposition, the parties qualified to bid, the
minimum price and similar information. PEA must
prepare all these data and disclose them to the public
at the start of the disposition process, long before the
consummation of the contract, because the
Government
Auditing Code requires public bidding. If PEA fails to
make this disclosure, any citizen can demand from
PEA this information at any time during the bidding
process.
Information, however, on on-going evaluation or
review of bids or proposals being undertaken by the
bidding or review committee is not immediately
accessible under the right to information. While the
evaluation or review is still on-going, there are no
"official acts, transactions, or decisions" on the bids or
proposals. However, once the committee makes its
official recommendation, there arises a "definite
proposition" on the part of the government. From this
moment, the public’s right to information attaches,
and any citizen can access all the non-proprietary
information leading to such definite proposition. In
Chavez v. PCGG, the Court ruled as follows:
"Considering the intent of the framers of the
Constitution, we believe that it is incumbent upon the
PCGG and its officers, as well as other government
representatives, to disclose sufficient public
information on any proposed settlement they have
decided to take up with the ostensible owners and
holders of ill-gotten wealth. Such information, though,
must pertain to definite propositions of the
government not necessarily to intra-agency or inter-
agency recommendations or communications during
the stage when common assertions are still in the
process of being formulated or are in the "exploratory"
stage. There is need, of course, to observe the same
restrictions on disclosure of information in general, as
discussed earlier – such as on matters involving
national security, diplomatic or foreign relations,
intelligence and other classified information."
(Emphasis supplied.)
Chavez v. Public Estates Authority thus laid down the
rule that the constitutional right to information includes
official information on on-going negotiations before a
final contract. The information, however, must
constitute definite propositions by the government and
should not cover recognized exceptions like privileged
information, military and diplomatic secrets and
similar matters affecting national security and public
order. In addition, Congress has prescribed other
limitations on the right to information in several
legislations.33
In this case, petitioners’ first letter dated April 20,
2010 requested for documents such as Terms of
Reference and proposed bids submitted by the
bidders. At that time, the bids were yet to be
submitted at the bidding scheduled on April 28, 2010.
It is also to be noted that PSALM’s website carried
news and updates on the sale of AHEPP, providing
important information on bidding activities and
clarifications regarding the terms and conditions of the
Asset Purchase Agreement (APA) to be signed by
PSALM and the winning bidder (Buyer).34
In Chavez v. National Housing Authority,35 the Court
held that pending the enactment of an enabling law,
the release of information through postings in public
bulletin boards and government websites satisfies the
constitutional requirement, thus:
It is unfortunate, however, that after almost twenty
(20) years from birth of the 1987 Constitution, there is
still no enabling law that provides the mechanics for
the compulsory duty of government agencies to
disclose information on government transactions.
Hopefully, the desired enabling law will finally see the
light of day if and when Congress decides to approve
the proposed "Freedom of Access to Information Act."
In the meantime, it would suffice that government
agencies post on their bulletin boards the documents
incorporating the information on the steps and
negotiations that produced the agreements and the
agreements themselves, and if finances permit, to
upload said information on their respective websites
for easy access by interested parties. Without any law
or regulation governing the right to disclose
information, the NHA or any of the respondents
cannot be faulted if they were not able to disclose
information relative to the SMDRP to the public in
general.36 (Emphasis supplied.)
The Court, however, distinguished the duty to
disclose information from the duty to permit access to
information on matters of public concern under Sec.
7, Art. III of the Constitution. Unlike the disclosure of
information which is mandatory under the
Constitution, the other aspect of the people’s right to
know requires a demand or request for one to gain
access to documents and paper of the particular
agency. Moreover, the duty to disclose covers only
transactions involving public interest, while the duty to
allow access has a broader scope of information
which embraces not only transactions involving public
interest, but any matter contained in official
communications and public documents of the
government agency.37 Such relief must be granted to
the party requesting access to official records,
documents and papers relating to official acts,
transactions, and decisions that are relevant to a
government contract.
Here, petitioners’ second letter dated May 14, 2010
specifically requested for detailed information
regarding the winning bidder, such as company
profile, contact person or responsible officer, office
address and Philippine registration. But before
PSALM could respond to the said letter, petitioners
filed the present suit on May 19, 2010. PSALM’s
letter-reply dated May 21, 2010 advised petitioners
that their letter-re quest was referred to the counsel of
K-Water. We find such action insufficient compliance
with the constitutional requirement and inconsistent
with the policy under EPIRA to implement the
privatization of NPC assets in an "open and
transparent" manner. PSALM’s evasive response to
the request for information was unjustified because all
bidders were required to deliver documents such as
company profile, names of authorized
officers/representatives, financial and technical
experience.
Consequently, this relief must be granted to
petitioners by directing PSALM to allow petitioners
access to the papers and documents relating to the
company profile and legal capacity of the winning
bidder. Based on PSALM’s own press releases, K-
Water is described as a Korean firm with extensive
experience in implementing and managing water
resources development projects in South Korea, and
also contributed significantly to the development of
that country’s heavy and chemical industries and the
modernization of its national industrial structure.
AngatHEPP is Under the Jurisdiction of
the Department of Energy Through NPC
It must be clarified that though petitioners had alleged
a co-ownership by virtue of the joint supervision in the
operation of the Angat Complex by MWSS, NPC and
NIA, MWSS actually recognized the ownership and
jurisdiction of NPC over the hydroelectric power plant
itself. While MWSS had initially sought to acquire
ownership of the AHEPP without public bidding, it
now prays that PSALM be ordered to turn over the
possession and control of the said facility to MWSS.
MWSS invokes its own authority or "special powers"
by virtue of its general jurisdiction over waterworks
systems, and in consideration of its substantial
investments in the construction of two auxiliary units
in the AHEPP, as well as the construction of the
Umiray-AngatTransbasin Tunnel to supplement the
water intake at the Angat Reservoir which resulted in
increased power generation.
Records disclosed that as early as December 2005,
following the decision of PSALM’s Board of Directors
to commence the sale process of the AHEPP along
with Magat and AmlanHEPPs in August 2005, MWSS
was actively cooperating and working with PSALM
regarding the proposed Protocol for the Privatization
of the AHEPP, specifically on the terms and
conditions for the management, control and operation
of the Angat Dam Complex taking into consideration
the concerns of its concessionaires. A Technical
Working Group (TWG) similar to that formed for the
Operation and Management Agreement of
Pantabangan and Magat dams was created,
consisting of representatives from PSALM, MWSS
and other concerned agencies, to formulate strategies
for the effective implementation of the privatization of
AHEPP and appropriate structure for the operation
and management of the Angat Dam Complex.38
In March 2008, PSALM sought legal advice from the
OGCC on available alternatives to a sale structure for
the AHEPP. On May 27, 2008, then Government
Corporate Counsel Alberto C. Agra issued Opinion
No. 107, s. 200839stating that PSALM is not limited to
"selling" as a means of fulfilling its mandate under the
EPIRA, and that in dealing with the AHEPP, PSALM
has the following options:
1. Transfer the ownership, possession, control, and
operation of the Angat Facility to another entity, which
may or may not be a private enterprise, as specifically
provided under Section 47 (e) of RA 9136;
2. Transfer the Angat Facility, through whatever form,
to another entity for the purpose of protecting the
public interest.40
The OGCC cited COA Circular No. 89-296 which
provides that government property or assets that are
no longer serviceable or needed "may be transferred
to other government entities/agencies without cost or
at an appraised value upon authority of the head or
governing body of the agency or corporation, and
upon due accomplishment of an Invoice and Receipt
of Property." Pointing out the absence of any
prohibition under R.A. No. 9136 and its IRR for
PSALM to transfer the AHEPP to another government
instrumentality, and considering that MWSS is
allowed under its charter to acquire the said facility,
the OGCC expressed the view that PSALM may, "in
the interest of stemming a potential water crisis, turn
over the ownership, operations and management of
the Angat Facility to a qualified entity, such as the
MWSS, without need of public bidding as the latter is
also a government entity."41
Consequently, MWSS requested the Office of the
President (OP) to exclude the AHEPP from the list of
NPC assets to be privatized under the EPIRA. Said
request was endorsed to the Department of Finance
(DOF) which requested the National Economic
Development Authority (NEDA) to give its comments.
Meanwhile, on August 20, 2008, the OGCC issued a
Clarification42 on its Opinion No. 107, s. 2008 stating
that the tenor of the latter issuance was "permissive"
and "necessarily, the disposal of the AHEPP by sale
through public bidding – the principal mode of
disposition under x xx R.A. 9136 – remains PSALM’s
primary option." The OGCC further explained its
position, thus:
If, in the exercise of PSALM’s discretion, it determines
that privatization by sale through public bidding is the
best mode to fulfill its mandate under R.A. 9136, and
that this mode will not contravene the State’s declared
policy on water resources, then the same is legally
permissible.
Finally, in OGCC Opinion No. 107 s. 2008, this Office
underscored "the overriding policy of the State x xx
recognizing that ‘water is vital to national development
x xx’ and the crucial role which the Angat Facility
plays in the uninterrupted and adequate supply and
distribution of potable water to residents of Metro
Manila." This Office reiterates "the primacy of the
State’s interest in mitigating the possible deleterious
effects of an impending "water crisis" encompassing
areas even beyond Metro Manila." Any transfer of the
AHEPP to be undertaken by PSALM – whether to a
private or public entity – must not contravene the
State’s declared policy of ensuring the flow of clean,
potable water under RA 6395 and 9136, and
Presidential Decree 1067. Hence, said transfer and/or
privatization scheme must ensure the preservation of
the AHEPP as a vital source of water for Metro Manila
and the surrounding provinces.43(Emphasis supplied.)
On September 16, 2009, NEDA Deputy Director
General Rolando G. Tungpalan, by way of comment
to MWSS’s position, wrote the DOF stating that
MWSS’s concern on ensuring an uninterrupted and
adequate supply of water for domestic use is amply
protected and consistently addressed in the EPIRA.
Hence, NEDA concluded that there appears to be no
basis to exclude AHEPP from the list of NPC
generation assets to be privatized and no compelling
reason to transfer its management, operations and
control to MWSS.44 NEDA further pointed out that:
Ownership and operation of a hydropower plant,
however, goes beyond the mandate of MWSS.To
operate a power generation plant, given the sector’s
legislative setup would require certification and
permits that has to be secured by the operator.
MWSS does not have the technical capability to
undertake the operation and maintenance of the
AHEPP nor manage the contract of a contracted
private party to undertake the task for MWSS. While
MWSS may tap NPC to operate and maintain the
AHEPP, this, similar to contracting out a private party,
may entail additional transaction costs, and ultimately
result to higher generation rates.45 (Emphasis
supplied.)
Thereafter, MWSS sought the support of the DPWH
in a letter dated September 24, 2009 addressed to
then Secretary Hermogenes E. Ebdane, Jr., for the
exclusion of the AHEPP from the list of NPC assets to
be privatized and instead transfer the ownership,
possession and control thereof to MWSS with
reasonable compensation. Acting on the said request,
Secretary Ebdane, Jr. wrote a memorandum for the
President recommending that "the Angat Dam be
excluded from the list of NPC assets to be privatized,
and that the ownership, management and control of
the Dam be transferred from NPC to MWSS, with
reasonable compensation."46
Based on the foregoing factual backdrop, there
seems to be no dispute as to the complete jurisdiction
of NPC over the government-owned Angat Dam and
AHEPP.
The Angat Reservoir and Dam were constructed from
1964 to 1967 and have become operational since
1968. They have multiple functions:
1) To provide irrigation to about 31,000 hectares of
land in 20 municipalities and towns in Pampanga and
Bulacan;
2) To supply the domestic and industrial water
requirements of residents in Metro Manila;
3) To generate hydroelectric power to feed the Luzon
Grid; and
4) To reduce flooding to downstream towns and
villages.47
The Angat Dam is a rockfill dam with a spillway
equipped with three gates at a spilling level of 219
meters and has storage capacity of about 850 million
cubic meters. Water supply to the MWSS is released
through five auxiliary turbines where it is diverted to
the two tunnels going to the Ipo Dam.48 The Angat
Dam is one of the dams under the management of
NPC while the La Mesa and Ipo dams are being
managed by MWSS. MWSS is a government
corporation existing by virtue of R.A. No.
6234.49 NAPOCOR or NPC is also a government-
owned corporation created under Commonwealth Act
(C.A.) No. 120,50 which, among others, was vested
with the following powers under Sec. 2, paragraph (g):
(g) To construct, operate and maintain power plants,
auxiliary plants, dams, reservoirs, pipes, mains,
transmission lines, power stations and substations,
and other works for the purpose of developing
hydraulic power from any river, creek, lake, spring
and waterfall in the Philippines and supplying such
power to the inhabitants thereof; to acquire, construct,
install, maintain, operate and improve gas, oil, or
steam engines, and/or other prime movers,
generators and other machinery in plants and/or
auxiliary plants for the production of electric power; to
establish, develop, operate, maintain and administer
power and lighting system for the use of the
Government and the general public; to sell electric
power and to fix the rates and provide for the
collection of the charges for any service rendered:
Provided, That the rates of charges shall not be
subject to revision by the Public Service Commission;
x x x x (Emphasis supplied.)
On September 10, 1971, R.A. No. 6395 was enacted
which revised the charter of NPC, extending its
corporate life to the year 2036. NPC thereafter
continued to exercise complete jurisdiction over dams
and power plants including the Angat Dam, Angat
Reservoir and AHEPP. While the NPC was expressly
granted authority to construct, operate and maintain
power plants, MWSS was not vested with similar
function. Section 3 (f), (o) and (p) of R.A. No. 6234
provides that MWSS’s powers and attributes include
the following –
(f) To construct, maintain, and operate dams,
reservoirs, conduits, aqueducts, tunnels, purification
plants, water mains, pipes, fire hydrants, pumping
stations, machineries and other waterworks for the
purpose of supplying water to the inhabitants of its
territory, for domestic and other purposes; and to
purify, regulate and control the use, as well as prevent
the wastage of water;
xxxx
(o) To assist in the establishment, operation and
maintenance of waterworks and sewerage systems
within its jurisdiction under cooperative basis;
(p) To approve and regulate the establishment and
construction of waterworks and sewerage systems in
privately owned subdivisions within its jurisdiction; x
xx. (Emphasis supplied.)
On December 9, 1992, by virtue of R.A. No.
7638,51 NPC was placed under the Department of
Energy (DOE) as one of its attached agencies.
Aside from its ownership and control of the Angat
Dam and AHEPP, NPC was likewise mandated to
exercise complete jurisdiction and control over its
watershed, pursuant to Sec. 2 (n) and (o) of R.A. No.
6395 for development and conservation purposes:
(n) To exercise complete jurisdiction and control over
watersheds surrounding the reservoirs of plants
and/or projects constructed or proposed to be
constructed by the Corporation. Upon determination
by the Corporation of the areas required for
watersheds for a specific project, the Bureau of
Forestry, the Reforestation Administration and the
Bureau of Lands shall, upon written advice by the
Corporation, forthwith surrender jurisdiction to the
Corporation of all areas embraced within the
watersheds, subject to existing private rights, the
needs of waterworks systems, and the requirements
of domestic water supply;
(o) In the prosecution and maintenance of its projects,
the Corporation shall adopt measures to prevent
environmental pollution and promote the
conservation, development and maximum utilization
of natural resources; and
x x x x (Emphasis supplied.)
On December 4, 1965, Presidential Proclamation No.
505 was issued amending Proclamation No. 71 by
transferring the administration of the watersheds
established in Montalban, San Juan del Monte,
Norzagaray, Angat, San Rafael, Peñaranda and
Infanta, Provinces of Rizal, Bulacan, Nueva Ecija and
Quezon, to NPC. Subsequent executive issuances
Presidential Decree (P.D.) No. 1515 which was
signed in June 1978 and amended by P.D. No. 1749
in December 1980 led to the creation of the NPC
Watershed Management Division which presently has
11 watershed areas under its management.52
Privatization of AHEPP Mandatory Under EPIRA
With the advent of EPIRA in 2001, PSALM came into
existence for the principal purpose of managing the
orderly sale, privatization and disposition of
generation assets, real estate and other disposable
assets of the NPC including IPP Contracts.
Accordingly, PSALM was authorized to take title to
and possession of, those assets transferred to it.
EPIRA mandated that all such assets shall be sold
through public bidding with the exception of Agus and
Pulangui complexes in Mindanao, the privatization of
which was left to the discretion of PSALM in
consultation with Congress,53 thus:
Sec. 47. NPC Privatization. – Except for the assets of
SPUG, the generation assets, real estate, and other
disposable assets as well as IPP contracts of NPC
shall be privatized in accordance with this Act. Within
six (6) months from the effectivity of this Act, the
PSALM Corp. shall submit a plan for the endorsement
by the Joint Congressional Power Commission and
the approval of the President of the Philippines, on
the total privatization of the generation assets, x xx of
NPC and thereafter, implement the same, in
accordance with the following guidelines, except as
provided for in paragraph (f) herein:
x xxx
(d) All assets of NPC shall be sold in an open and
transparent manner through public bidding, x xx;
x xxx
(f) The Agus and the Pulangui complexes in
Mindanao shall be excluded from among the
generation companies that will be initially privatized.
Their ownership shall be transferred to the PSALM
Corp. and both shall continue to be operated by the
NPC. Said complexes may be privatized not earlier
than ten (10) years from the effectivity of this Act, x
xx.The privatization of Agus and Pulangui complexes
shall be left to the discretion of PSALM Corp. in
consultation with Congress;
x xxx (Emphasis supplied.)
The intent of Congress not to exclude the AHEPP
from the privatization of NPC generation assets is
evident from the express provision exempting only the
aforesaid two power plants in Mindanao. Had the
legislature intended that PSALM should likewise be
allowed discretion in case of NPC generation assets
other than those mentioned in Sec. 47, it could have
explicitly provided for the same. But the EPIRA
exempted from privatization only those two plants in
Mindanao and the Small Power Utilities Group
(SPUG).54 Expressiouniusestexclusioalterius, the
express inclusion of one implies the exclusion of all
others.55
It is a settled rule of statutory construction that the
express mention of one person, thing, or
consequence implies the exclusion of all others. The
rule is expressed in the familiar maxim,
expressiouniusestexclusioalterius.
The rule of expressiouniusestexclusioalterius is
formulated in a number of ways. One variation of the
rule is principle that what is expressed puts an end to
that which is implied. Expressiumfacitcessaretacitum.
Thus, where a statute, by its terms, is expressly
limited to certain matters, it may not, by interpretation
or construction, be extended to other matters.
x xxx
The rule of expressiouniusestexclusioalterius and its
variations are canons of restrictive interpretation.
They are based on the rules of logic and the natural
workings of the human mind. They are predicated
upon one’s own voluntary act and not upon that of
others. They proceed from the premise that the
legislature would not have made specified
enumeration in a statute had the intention been not to
restrict its meaning and confine its terms to those
expressly mentioned.56
The Court therefore cannot sustain the position of
petitioners, adopted by respondent MWSS, that
PSALM should have exercised the discretion not to
proceed with the privatization of AHEPP, or at least
the availability of the option to transfer the said facility
to another government entity such as MWSS. Having
no such discretion in the first place, PSALM
committed no grave abuse of discretion when it
commenced the sale process of AHEPP pursuant to
the EPIRA.
In any case, the Court finds that the operation and
maintenance of a hydroelectric power plant is not
among the statutorily granted powers of MWSS.
Although MWSS was granted authority to construct
and operate dams and reservoirs, such was for the
specific purpose of supplying water for domestic and
other uses, and the treatment, regulation and control
of water usage, and not power
generation.57 Moreover, since the sale of AHEPP by
PSALM merely implements the legislated reforms for
the electric power industry through schemes that aim
"to enhance the inflow of private capital and broaden
the ownership base of the power generation,
transmission and distribution sectors,"58 the proposed
transfer to MWSS which is another government entity
contravenes that State policy. COA Circular No. 89-
296 likewise has no application to NPC generating
assets which are still serviceable and definitely
needed by the Government for the purpose of
liquidating NPC’s accumulated debts amounting to
billions in US Dollars. Said administrative circular
cannot prevail over the EPIRA, a special law
governing the disposition of government properties
under the jurisdiction of the DOE through NPC.
Sale of Government-Owned AHEPP
to a Foreign Corporation Not Prohibited
But Only Filipino Citizens and Corporations
60% of whose capital is owned by Filipinos
May be Granted Water Rights
The core issue concerns the legal implications of the
acquisition by K-Water of the AHEPP in relation to the
constitutional policy on our natural resources.
Sec. 2, Art. XII of the 1987 Constitution provides in
part:
SEC.2. All lands of the public domain, waters,
minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber,
wildlife, flora and fauna, and other natural resources
are owned by the State. With the exception of
agricultural lands, all other natural resources shall not
be alienated. The exploration, development, and
utilization of natural resources shall be under the full
control and supervision of the State. The State may
directly undertake such activities, or it may enter into
co-production, joint venture, or production-sharing
agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose
capital is owned by such citizens. Such agreements
may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and
under such terms and conditions as may be provided
by law. In case of water rights for irrigation, water
supply, fisheries, or industrial uses other than the
development of water power, beneficial use may be
the measure and limit of the grant.
x xxx (Emphasis supplied.)
The State’s policy on the management of water
resources is implemented through the regulation of
water rights. Presidential Decree No. 1067, otherwise
known as "The Water Code of the Philippines" is the
basic law governing the ownership, appropriation
utilization, exploitation, development, conservation
and protection of water resources and rights to land
related thereto. The National Water Resources
Council (NWRC) was created in 1974 under P.D. No.
424 and was subsequently renamed as National
Water Resources Board (NWRB) pursuant to
Executive Order No. 124-A.59 The NWRB is the chief
coordinating and regulating agency for all water
resources management development activities which
is tasked with the formulation and development of
policies on water utilization and appropriation, the
control and supervision of water utilities and
franchises, and the regulation and rationalization of
water rates.60
The pertinent provisions of Art. 3, P.D. No. 1067
provide:
Art. 3. The underlying principles of this code are:
a. All waters belong to the State.
b. All waters that belong to the State can not be the
subject to acquisitive prescription.
c. The State may allow the use or development of
waters by administrative concession.
d. The utilization, exploitation, development,
conservation and protection of water resources shall
be subject to the control and regulation of the
government through the National Water Resources
Council x xx
e. Preference in the use and development of waters
shall consider current usages and be responsive to
the changing needs of the country.
x xxx
Art. 9. Waters may be appropriated and used in
accordance with the provisions of this Code.
Appropriation of water, as used in this Code, is the
acquisition of rights over the use of waters or the
taking or diverting of waters from a natural source in
the manner and for any purpose allowed by law.
Art. 10. Water may be appropriated for the following
purposes:
x xxx
(d) Power generation
x xxx
Art. 13. Except as otherwise herein provided, no
person including government instrumentalities or
government-owned or controlled corporations, shall
appropriate water without a water right, which shall be
evidenced by a document known as a water permit.
Water right is the privilege granted by the government
to appropriate and use water.
x xxx
Art. 15. Only citizens of the Philippines, of legal age,
as well as juridical persons, who are duly qualified by
law to exploit and develop water resources, may
apply for water permits. (Emphasis supplied.)
It is clear that the law limits the grant of water rights
only to Filipino citizens and juridical entities duly
qualified by law to exploit and develop water
resources, including private corporations with sixty
percent of their capital owned by Filipinos. In the case
of Angat River, the NWRB has issued separate water
permits to MWSS, NPC and NIA.61
Under the EPIRA, the generation of electric power, a
business affected with public interest, was opened to
private sector and any new generation company is
required to secure a certificate of compliance from the
Energy Regulatory Commission (ERC), as well as
health, safety and environmental clearances from the
concerned government agencies. Power generation
shall not be considered a public utility operation,62 and
hence no franchise is necessary. Foreign investors
are likewise allowed entry into the electric power
industry. However, there is no mention of water rights
in the privatization of multi-purpose hydropower
facilities. Section 47 (e) addressed the issue of water
security, as follows:
(e) In cases of transfer of possession, control,
operation or privatization of multi-purpose hydro
facilities, safeguards shall be prescribed to ensure
that the national government may direct water usage
in cases of shortage to protect potable water,
irrigation, and all other requirements imbued with
public interest;
x xxx (Emphasis supplied.)
This provision is consistent with the priority accorded
to domestic and municipal uses of water63 under the
Water Code, thus:
Art. 22. Between two or more appropriators of water
from the same sources of supply, priority in time of
appropriation shall give the better right, except that in
times of emergency the use of water for domestic and
municipal purposes shall have a better right over all
other uses; Provided, That, where water shortage is
recurrent and the appropriator for municipal use has a
lower priority in time of appropriation, then it shall be
his duty to find an alternative source of supply in
accordance with conditions prescribed by the Board.
(Emphasis supplied.)
Rule 23, Section 6 of the Implementing Rules and
Regulations (IRR) of the EPIRA provided for the
structure of appropriation of water resources in multi-
purpose hydropower plants which will undergo
privatization, as follows:
Section 6. Privatization of Hydroelectric Generation
Plants.
(a) Consistent with Section 47(e) of the Act and
Section 4(f) of this Rule, the Privatization of hydro
facilities of NPC shall cover the power component
including assignable long-term water rights
agreements for the use of water, which shall be
passed onto and respected by the buyers of the
hydroelectric power plants.
(b) The National Water Resources Board (NWRB)
shall ensure that the allocation for irrigation, as
indicated by the NIA and requirements for domestic
water supply as provided for by the appropriate Local
Water District(s) are recognized and provided for in
the water rights agreements. NPC or PSALM may
also impose additional conditions in the shareholding
agreement with the winning bidders to ensure national
security, including, but not limited to, the use of water
during drought or calamity.
(c) Consistent with Section 34(d) of the Act, the NPC
shall continue to be responsible for watershed
rehabilitation and management and shall be entitled
to the environmental charge equivalent to one-fourth
of one centavo per kilowatt-hour sales
(P0.0025/kWh), which shall form part of the Universal
Charge. This environmental fund shall be used solely
for watershed rehabilitation and management and
shall bemanaged by NPC under existing
arrangements. NPC shall submit an annual report to
the DOE detailing the progress of the water shed
rehabilitation program.
(d) The NPC and PSALM or NIA, as the case may be,
shall continue to be responsible for the dam structure
and all other appurtenant structures necessary for the
safe and reliable operation of the hydropower plants.
The NPC and PSALM or NIA, as the case may be,
shall enter into an operations and maintenance
agreement with the private operator of the power
plant to cover the dam structure and all other
appurtenant facilities. (Emphasis supplied.)
In accordance with the foregoing implementing
regulations, and in furtherance of the Asset Purchase
Agreement64(APA), PSALM, NPC and K-Water
executed on April 28, 2010 an Operations and
Maintenance Agreement65 (O & M Agreement) for the
administration, rehabilitation, operation, preservation
and maintenance, by K-Water as the eventual owner
of the AHEPP, of the Non-Power Components
meaning the Angat Dam, non-power equipment,
facilities, installations, and appurtenant devices and
structures, including the water sourced from the
Angat Reservoir.
It is the position of PSALM that as the new owner only
of the hydroelectric power plant, K-Water will be a
mere operator of the Angat Dam. In the power
generation activity, K-Water will have to utilize the
waters already extracted from the river and
impounded on the dam. This process of generating
electric power from the dam water entering the power
plant thus does not constitute appropriation within the
meaning of natural resource utilization in the
Constitution and the Water Code.
The operation of a typical hydroelectric power plant
has been described as follows:
Hydroelectric energy is produced by the force of
falling water. The capacity to produce this energy is
dependent on both the available flow and the height
from which it falls. Building up behind a high dam,
water accumulates potential energy. This is
transformed into mechanical energy when the water
rushes down the sluice and strikes the rotary blades
of turbine. The turbine's rotation spins electromagnets
which generate current in stationary coils of wire.
Finally, the current is put through a transformer where
the voltage is increased for long distance
transmission over power lines.66
Foreign ownership of a hydropower facility is not
prohibited under existing laws. The construction,
rehabilitation and development of hydropower plants
are among those infrastructure projects which even
wholly-owned foreign corporations are allowed to
undertake under the Amended Build-Operate-
Transfer (Amended BOT) Law (R.A. No. 7718).67
Beginning 1987, the policy has been openness to
foreign investments as evident in the fiscal incentives
provided for the restructuring and privatization of the
power industry in the Philippines, under the Power
Sector Restructuring Program (PSRP) of the Asian
Development Bank.
The establishment of institutional and legal framework
for the entry of private sector in the power industry
began with the issuance by President Corazon C.
Aquino of Executive Order No. 215 in 1987. Said
order allowed the entry of private sector – the IPPs –
to participate in the power generation activities in the
country. The entry of IPPs was facilitated and made
attractive through the first BOT Law in 1990 (R.A. No.
6957) which aimed to "minimize the burden of
infrastructure projects on the national government
budget, minimize external borrowing for infrastructure
projects, and use the efficiency of the private sector in
delivering a public good." In 1993, the Electric Power
Crisis Act was passed giving the President
emergency powers to urgently address the power
crisis in the country.68 The full implementation of the
restructuring and privatization of the power industry
was achieved when Congress passed the EPIRA in
2001.
With respect to foreign investors, the nationality issue
had been framed in terms of the character or nature
of the power generation process itself, i.e., whether
the activity amounts to utilization of natural resources
within the meaning of Sec. 2, Art. XII of the
Constitution. If so, then foreign companies cannot
engage in hydropower generation business; but if not,
then government may legally allow even foreign-
owned companies to operate hydropower facilities.
The DOJ has consistently regarded hydropower
generation by foreign entities as not constitutionally
proscribed based on the definition of water
appropriation under the Water Code, thus:
Opinion No. 173, 1984
This refers to your request for opinion on the
possibility of granting water permits to foreign
corporations authorized to do business in the
Philippines x xx
x xxx
x xx while the Water Code imposes a nationality
requirement for the grant of water permits, the same
refers to the privilege "to appropriate and use water."
This should be interpreted to mean the extraction of
water from its natural source (Art. 9, P.D. No. 1067).
Once removed therefrom, they cease to be a part of
the natural resources of the country and are the
subject of ordinary commerce and may be acquired
by foreigners (Op. No. 55, series of 1939). x xx in
case of a contract of lease, the water permit shall be
secured by the lessor and included in the lease as an
improvement. The water so removed from the natural
source may be appropriated/used by the foreign
corporation leasing the property.
Opinion No. 14, S. 1995
The nationality requirement imposed by the Water
Code refers to the privilege "to appropriate and use
water." This, we have consistently interpreted to mean
the extraction of water directly from its natural source.
Once removed from its natural source the water
ceases to be a part of the natural resources of the
country and may be subject of ordinary commerce
and may even be acquired by foreigners. (Secretary
of Justice Op. No. 173, s. 1984; No. 24, s. 1989; No.
100 s. 1994)
In fine, we reiterate our earlier view that a foreign
entity may legally process or treat water after its
removal from a natural source by a qualified person,
natural or juridical.
Opinion No. 122, s. 1998
The crucial issue at hand is the determination of
whether the utilization of water by the power plant to
be owned and operated by a foreign-owned
corporation (SRPC) will violate the provisions of the
Water Code.
As proposed, the participation of SRPC to the
arrangement commences upon construction of the
power station, consisting of a dam and a power plant.
After the completion of the said station, its ownership
and control shall be turned over to NPC. However,
SRPC shall remain the owner of the power plant and
shall operate it for a period of twenty-five (25) years.
It appears that the dam, which will be owned and
controlled by NPC, will block the natural flow of the
river. The power plant, which is situated next to it, will
entirely depend upon the dam for its water supply
which will pass through an intake gate situated one
hundred (100) meters above the riverbed. Due to the
distance from the riverbed, water could not enter the
power plant absent the dam that traps the flow of the
river. It appears further that no water shall enter the
power tunnel without specific dispatch instructions
from NPC, and such supplied water shall be used
only by SRPC for power generation and not for any
other purpose. When electricity is generated therein,
the same shall be supplied to NPC for distribution to
the public. These facts x xx viewed in relation to the
Water Code, specifically Article 9 thereof, x xx clearly
show that there is no circumvention of the law.
This Department has declared that the nationality
requirement imposed by the Water Code refers to the
privilege "to appropriate and use water" and has
interpreted this phrase to mean the extraction of water
directly from its natural source (Secretary of Justice
Opinion No. 14, s. 1995). "Natural" is defined as that
which is produced without aid of stop, valves, slides,
or other supplementary means (see Webster’s New
International Dictionary, Second Edition, p. 1630).
The water that is used by the power plant could not
enter the intake gate without the dam, which is a man-
made structure. Such being the case, the source of
the water that enters the power plant is of artificial
character rather than natural. This Department is
consistent in ruling, that once water is removed from
its natural source, it ceases to be a part of the natural
resources of the country and may be the subject of
ordinary commerce and may even be acquired by
foreigners. (Ibid., No. 173, s. 1984; No. 24, s. 1989;
No. 100, s. 1994).
It is also significant to note that NPC, a government-
owned and controlled corporation, has the effective
control over all elements of the extraction process,
including the amount and timing thereof considering
that x xx the water will flow out of the power tunnel
and through the power plant, to be used for the
generation of electricity, only when the Downstream
Gates are opened, which occur only upon the specific
water release instructions given by NPC to SRPC.
This specific feature of the agreement, taken together
with the above-stated analysis of the source of water
that enters the plant, support the view that the
nationality requirement embodied in Article XII,
Section 2 of the present Constitution and in Article 15
of the Water Code, is not violated.69
(Emphasis supplied.)
The latest executive interpretation is stated in DOJ
Opinion No. 52, s. 2005 which was rendered upon the
request of PSALM in connection with the proposed
sale structure for the privatization of hydroelectric and
geothermal generation assets (Gencos) of NPC.
PSALM sought a ruling on the legality of its proposed
privatization scheme whereby the non-power
components (dam, reservoir and appurtenant
structures and watershed area) shall be owned by the
State through government entities like NPC or NIA
which shall exercise control over the release of water,
while the ownership of the power components (power
plant and related facilities) is open to both Filipino
citizens/corporations and 100% foreign-owned
corporations.
Sustaining the position of PSALM, then Secretary
Raul M. Gonzalez opined:
Premised on the condition that only the power
components shall be transferred to the foreign bidders
while the non-power components/structures shall be
retained by state agencies concerned, we find that
both PSALM’s proposal and position are tenable.
x xxx
x xx as ruled in one case by a U.S. court:
Where the State of New York took its natural
resources consisting of Saratoga Spring and, through
a bottling process, put those resources into preserved
condition where they could be sold to the public in
competition with private waters, the state agencies
were not immune from federal taxes imposed upon
bottled waters on the theory that state was engaged
in the sale of "natural resources."
Applied to the instant case, and construed in relation
to the earlier-mentioned constitutional inhibition, it
would appear clear that while both waters and
geothermal steam are, undoubtedly "natural
resources", within the meaning of Section 2 Article XII
of the present Constitution, hence, their exploitation,
development and utilization should be limited to
Filipino citizens or corporations or associations at
least sixty per centum of the capital of which is owned
by Filipino citizens, the utilization thereof can be
opened even to foreign nationals, after the same have
been extracted from the source by qualified persons
or entities. The rationale is because, since they no
longer form part of the natural resources of the
country, they become subject to ordinary commerce.
A contrary interpretation, i.e., that the removed or
extracted natural resources would remain inalienable
especially to foreign nationals, can lead to absurd
consequences, e.g. that said waters and geothermal
steam, and any other extracted natural resources,
cannot be acquired by foreign nationals for sale within
or outside the country, which could not have been
intended by the framers of the Constitution.
The fact that under the proposal, the non-power
components and structures shall be retained and
maintained by the government entities concerned is,
to us, not only a sufficient compliance of constitutional
requirement of "full control and supervision of the
State" in the exploitation, development and utilization
of natural resources. It is also an enough safeguard
against the evil sought to be avoided by the
constitutional reservation x xx.70 (Italics in the original,
emphasis supplied.)
Appropriation of water, as used in the Water
Code refers to the "acquisition of rights over the use
of waters or the taking or diverting of waters from a
natural source in the manner and for any purpose
allowed by law."71 This definition is not as broad as the
concept of appropriation of water in American
jurisprudence:
An appropriation of water flowing on the public
domain consists in the capture, impounding, or
diversion of it from its natural course or channel and
its actual application to some beneficial use private or
personal to the appropriator, to the entire exclusion
(or exclusion to the extent of the water appropriated)
of all other persons. x xx72
On the other hand, "water right" is defined in
the Water Code as the privilege granted by the
government to appropriate and use water.73 Black’s
Law Dictionary defined "water rights" as "a legal right,
in the nature of a corporeal hereditament, to use the
water of a natural stream or water furnished through a
ditch or canal, for general or specific purposes, such
as irrigation, mining, power, or domestic use, either to
its full capacity or to a measured extent or during a
defined portion of the time," or "the right to have the
water flow so that some portion of it may be reduced
to possession and be made private property of
individual, and it is therefore the right to divert water
from natural stream by artificial means and apply the
same to beneficial use."74
Under the Water Code concept of appropriation, a
foreign company may not be said to be
"appropriating" our natural resources if it utilizes the
waters collected in the dam and converts the same
into electricity through artificial devices. Since the
NPC remains in control of the operation of the dam by
virtue of water rights granted to it, as determined
under DOJ Opinion No. 122, s. 1998, there is no legal
impediment to foreign-owned companies undertaking
the generation of electric power using waters already
appropriated by NPC, the holder of water permit.
Such was the situation of hydropower projects under
the BOT contractual arrangements whereby foreign
investors are allowed to finance or undertake
construction and rehabilitation of infrastructure
projects and/or own and operate the facility
constructed. However, in case the facility requires a
public utility franchise, the facility operator must be a
Filipino corporation or at least 60% owned by
Filipino.75
With the advent of privatization of the electric power
industry which resulted in its segregation into four
sectors -- generation, transmission, distribution and
supply – NPC’s generation and transmission functions
were unbundled. Power generation and transmission
were treated as separate sectors governed by distinct
rules under the new regulatory framework introduced
by EPIRA. The National Transmission Corporation
(TRANSCO) was created to own and operate the
transmission assets and perform the transmission
functions previously under NPC. While the NPC
continues to undertake missionary electrification
programs through the SPUG, PSALM was also
created to liquidate the assets and liabilities of NPC.
Under the EPIRA, NPC’s generation function was
restricted as it was allowed to "generate and sell
electricity only from the undisposed generating assets
and IPP contracts of PSALM" and was prohibited from
incurring "any new obligations to purchase power
through bilateral contracts with generation companies
or other suppliers."76 PSALM, on the other hand, was
tasked "to structure the sale, privatization or
disposition of NPC assets and IPP contracts and/or
their energy output based on such terms and
conditions which shall optimize the value and sale
prices of said assets."77 In the case of multi-purpose
hydropower plants, the IRR of R.A. No. 9136 provided
that their privatization would extend to water rights
which shall be transferred or assigned to the buyers
thereof, subject to safeguards mandated by Sec.
47(e) to enable the national government to direct
water usage in cases of shortage to protect water
requirements imbued with public interest.
Accordingly, the Asset Purchase Agreement executed
between PSALM and K-Water stipulated:
2.04 Matters Relating to the Non-Power Component
x xxx
Matters relating to Water Rights
NPC has issued a certification (the "Water
Certification") wherein NPC consents, subject to
Philippine Law, to the (i) transfer of the Water Permit
to the BUYER or its Affiliate, and (ii) use by the
BUYER or its Affiliate of the water covered by the
Water Permit from Closing Date up to a maximum
period of one (1) year thereafter to enable the BUYER
to appropriate and use water sourced from Angat
reservoir for purposes of power generation; provided,
that should the consent or approval of any
Governmental Body be required for either (i) or (ii),
the BUYER must secure such consent or approval.
The BUYER agrees and shall fully comply with the
Water Permit and the Water Certification. x xx
x xxx
Multi-Purpose Facility
The BUYER is fully aware that the Non-Power
Components is a multi-purpose hydro-facility and the
water is currently being appropriated for domestic
use, municipal use, irrigation and power generation.
Anything in this Agreement notwithstanding, the
BUYER shall, at all times even after the Payment
Date, fully and faithfully comply with Philippine Law,
including the Instructions, the Rule Curve and assured notwithstanding the privatized power
Operating Guidelines and the Water generation business.
Protocol.78 (Emphasis supplied.)
Section 6 (a) of the IRR of R.A. No. 9136 insofar as it
Lease or transfer of water rights is allowed under the directs the transfer of water rights in the privatization
Water Code, subject to the approval of NWRB after of multi-purpose hydropower facilities, is thus merely
due notice and hearing.79 However, lessees or directory.
transferees of such water rights must comply with the
citizenship requirement imposed by the Water Code It is worth mentioning that the Water Code explicitly
and its IRR. But regardless of such qualification of provides that Filipino citizens and juridical persons
water permit holders/transferees, it is to be noted that who may apply for water permits should be "duly
there is no provision in the EPIRA itself authorizing qualified by law to exploit and develop water
the NPC to assign or transfer its water rights in case resources."
of transfer of operation and possession of multi-
purpose hydropower facilities. Since only the power Thus, aside from the grant of authority to construct
plant is to be sold and privatized, the operation of the and operate dams and power plants, NPC’s Revised
non-power components such as the dam and Charter specifically authorized it –
reservoir, including the maintenance of the
(f) To take water from any public stream, river, creek,
surrounding watershed, should remain under the
lake, spring or waterfall in the Philippines, for the
jurisdiction and control of NPC which continue to be a
purposes specified in this Act; to intercept and divert
government corporation. There is therefore no
the flow of waters from lands of riparian owners and
necessity for NPC to transfer its permit over the water
from persons owning or interested in waters which are
rights to K-Water. Pursuant to its purchase and
or may be necessary for said purposes, upon
operation/management contracts with K-Water, NPC
payment of just compensation therefor; to alter,
may authorize the latter to use water in the dam to
straighten, obstruct or increase the flow of water in
generate electricity.
streams or water channels intersecting or connecting
therewith or contiguous to its works or any part
NPC’s water rights remain an integral aspect of its
thereof: Provided, That just compensation shall be
jurisdiction and control over the dam and reservoir.
paid to any person or persons whose property is,
That the EPIRAitselfdid not ordain any transfer of
directly or indirectly, adversely affected or damaged
water rights leads us to infer that Congress intended
thereby.80
NPC to continue exercising full supervision over the
dam, reservoir and, more importantly, to remain in
The MWSS is likewise vested with the power to
complete control of the extraction or diversion of
construct, maintain and operate dams and reservoirs
water from the Angat River. Indeed, there can be no
for the purpose of supplying water for domestic and
debate that the best means of ensuring that
other purposes, as well to construct, develop,
PSALM/NPC can fulfill the duty to prescribe
maintain and operate such artesian wells and springs
"safeguards to enable the national government to
as may be needed in its operation within its
direct water usage to protect potable water, irrigation,
territory.81 On the other hand, NIA, also a water permit
and all other requirements imbued with public
holder in Angat River, is vested with similar authority
interest" is for it to retain the water rights over those
to utilize water resources, as follows:
water resources from where the dam waters are
extracted. In this way, the State’s full supervision and (b) To investigate all available and possible water
control over the country’s water resources is also resources in the country for the purpose of utilizing
the same for irrigation, and to plan, design and
construct the necessary projects to make the ten to
twenty-year period following the approval of this Act
as the Irrigation Age of the Republic of the
Philippines;82
(c) To construct multiple-purpose water resources
projects designed primarily for irrigation, and
secondarily for hydraulic power development and/or
other uses such as flood control, drainage, land
reclamation, domestic water supply, roads and
highway construction and reforestation, among
others, provided, that the plans, designs and the
construction thereof, shall be undertaken in
coordination with the agencies concerned;83
To reiterate, there is nothing in the EPIRAwhich
declares that it is mandatory for PSALM or NPC to
transfer or assign NPC’s water rights to buyers of its
multi-purpose hydropower facilities as part of the
privatization process. While PSALM was mandated to
transfer the ownership of all hydropower plants except
those mentioned in Sec. 47 (f), any transfer of
possession, operation and control of the multi-
purpose hydropower facilities, the intent to preserve
water resources under the full supervision and control
of the State is evident when PSALM was obligated to
prescribe safeguards to enable the national
government to direct water usage to domestic and
other requirements "imbued with public interest."
There is no express requirement for the transfer of
water rights in all cases where the operation of
hydropower facilities in a multi-purpose dam complex
is turned over to the private sector.
As the new owner of the AHEPP, K-Water will have to
utilize the waters in the Angat Dam for hydropower
generation. Consistent with the goals of the EPIRA,
private entities are allowed to undertake power
generation activities and acquire NPC’s generation
assets. But since only the hydroelectric power plants
and appurtenances are being sold, the privatization
scheme should enable the buyer of a hydroelectric
power plant in NPC’s multi-purpose dam complex to
have beneficialuse of the waters diverted or collected
in the Angat Dam for its hydropower generation
activities, and at the same time ensure that the NPC
retains full supervision and control over the extraction
and diversion of waters from the Angat River.
In fine, the Court rules that while the sale of AHEPP
to a foreign corporation pursuant to the privatization
mandated by the EPIRA did not violate Sec. 2, Art. XII
of the 1987 Constitution which limits the exploration,
development and utilization of natural resources
under the full supervision and control of the State or
the State’s undertaking the same through joint
venture, co-production or production sharing
agreements with Filipino corporations 60% of the
capital of which is owned by Filipino citizens, the
stipulation in the Asset Purchase Agreement and
Operations and Maintenance Agreement whereby
NPC consents to the transfer of water rights to the
foreign buyer, K-Water, contravenes the aforesaid
constitutional provision and the Water Code.1âwphi1
Section 6, Rule 23 of the IRR of EPIRA, insofar as it
ordered NPC’s water rights in multi-purpose
hydropower facilities to be included in the sale
thereof, is declared as merely directoryand not an
absolute condition in the privatization scheme. In this
case, we hold that NPC shall continue to be the
holder of the water permit even as the operational
control and day-to-day management of the AHEPP is
turned over to K-Water under the terms and
conditions of their APA and O & M Agreement,
whereby NPC grants authority to K-Water to utilize
the waters diverted or collected in the Angat Dam for
hydropower generation. Further, NPC and K-Water
shall faithfully comply with the terms and conditions of
the Memorandum of Agreement on Water Protocol,
as well as with such other regulations and issuances
of the NWRB governing water rights and water usage.
WHEREFORE, the present petition for certiorari and
prohibition with prayer for injunctive relief/s
is PARTLY GRANTED.
The following DISPOSITIONS are in ORDER:
1) The bidding conducted and the Notice of Award
issued by PSALM in favor of the winning bidder,
KOREA WATER RESOURCES CORPORATION (K-
WATER), are declared VALID and LEGAL;
2) PSALM is directed to FURNISH the petitioners with
copies of all documents and records in its files
pertaining to K-Water;
3) Section 6 (a), Rule 23, IRR of the EPIRA, is hereby
declared as merely DIRECTORY, and not an absolute
condition in all cases where NPC-owned hydropower
generation facilities are privatized;
4) NPC shall CONTINUE to be the HOLDER of Water
Permit No. 6512 issued by the National Water
Resources Board. NPC shall authorize K-Water to
utilize the waters in the Angat Dam for hydropower
generation, subject to the NWRB’s rules and
regulations governing water right and usage. The
Asset Purchase Agreement and Operation &
Management Agreement between NPC/PSALM and
K- Water are thus amended accordingly.
Except for the requirement of securing a water permit,
K-Water remains BOUND by its undertakings and
warranties under the APA and O & M Agreement;
5) NPC shall be a CO-PARTY with K-Water in the
Water Protocol Agreement with MWSS and NIA, and
not merely as a conforming authority or agency; and
6) The Status Quo Ante Order issued by this Court on
May 24, 2010 is hereby LIFTED and SET ASIDE.
No pronouncement as to costs.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice
G.R. No. 192986               January 15, 2013
ADVOCATES FOR TRUTH IN LENDING, INC. and
EDUARDO B. OLAGUER, Petitioners,  — The Monetary Board may fix the maximum rates of
vs.
BANGKO SENTRAL MONETARY BOARD,
represented by its Chairman, GOVERNOR
ARMANDO M. TETANGCO, JR., and its incumbent
members: JUANITA D. AMATONG, ALFREDO C.
ANTONIO, PETER FA VILA, NELLY F.
VILLAFUERTE, IGNACIO R. BUNYE and CESAR V.
PURISIMA, Respondents.
DECISION
REYES, J.:
Petitioners, claiming that they are raising issues of
transcendental importance to the public, filed directly
with this Court this Petition for Certiorari under Rule
65 of the 1997 Rules of Court, seeking to declare that
the Bangko Sentral ng Pilipinas Monetary Board
(BSP-MB), replacing the Central Bank Monetary
Board (CB-MB) by virtue of Republic Act (R.A.) No.
7653, has no authority to continue enforcing Central
Bank Circular No. 905,1 issued by the CB-MB in 1982,
which "suspended" Act No. 2655, or the Usury Law of
1916.
Factual Antecedents
Petitioner "Advocates for Truth in Lending, Inc."
(AFTIL) is a non-profit, non-stock corporation
organized to engage in pro bono concerns and
activities relating to money lending issues. It was
incorporated on July 9, 2010,2 and a month later, it
filed this petition, joined by its founder and president,
Eduardo B. Olaguer, suing as a taxpayer and a
citizen.
R.A. No. 265, which created the Central Bank (CB) of
the Philippines on June 15, 1948, empowered the CB-
MB to, among others, set the maximum interest rates
which banks may charge for all types of loans and
other credit operations, within limits prescribed by the
Usury Law. Section 109 of R.A. No. 265 reads:
Sec. 109. Interest Rates, Commissions and Charges.
interest which banks may pay on deposits and on
other obligations.
The Monetary Board may, within the limits prescribed
in the Usury Law fix the maximum rates of interest
which banks may charge for different types of loans
and for any other credit operations, or may fix the
maximum differences which may exist between the
interest or rediscount rates of the Central Bank and
the rates which the banks may charge their customers
if the respective credit documents are not to lose their
eligibility for rediscount or advances in the Central
Bank.
Any modifications in the maximum interest rates
permitted for the borrowing or lending operations of
the banks shall apply only to future operations and not
to those made prior to the date on which the
modification becomes effective.
In order to avoid possible evasion of maximum
interest rates set by the Monetary Board, the Board
may also fix the maximum rates that banks may pay
to or collect from their customers in the form of
commissions, discounts, charges, fees or payments
of any sort. (Underlining ours)
On March 17, 1980, the Usury Law was amended by
Presidential Decree (P.D.) No. 1684, giving the CB-
MB authority to prescribe different maximum rates of
interest which may be imposed for a loan or renewal
thereof or the forbearance of any money, goods or
credits, provided that the changes are effected
gradually and announced in advance. Thus, Section
1-a of Act No. 2655 now reads:
Sec. 1-a. The Monetary Board is hereby authorized to
prescribe the maximum rate or rates of interest for the
loan or renewal thereof or the forbearance of any
money, goods or credits, and to change such rate or
rates whenever warranted by prevailing economic and
social conditions: Provided, That changes in such rate
or rates may be effected gradually on scheduled
dates announced in advance.
In the exercise of the authority herein granted the
Monetary Board may prescribe higher maximum rates
for loans of low priority, such as consumer loans or
renewals thereof as well as such loans made by
pawnshops, finance companies and other similar
credit institutions although the rates prescribed for
these institutions need not necessarily be uniform.
The Monetary Board is also authorized to prescribe
different maximum rate or rates for different types of
borrowings, including deposits and deposit
substitutes, or loans of financial intermediaries.
(Underlining and emphasis ours)
In its Resolution No. 2224 dated December 3,
1982,3 the CB-MB issued CB Circular No. 905, Series
of 1982, effective on January 1, 1983. Section 1 of the
Circular, under its General Provisions, removed the
ceilings on interest rates on loans or forbearance of
any money, goods or credits, to wit:
Sec. 1. The rate of interest, including commissions,
premiums, fees and other charges, on a loan or
forbearance of any money, goods, or credits,
regardless of maturity and whether secured or
unsecured, that may be charged or collected by any
person, whether natural or juridical, shall not be
subject to any ceiling prescribed under or pursuant to
the Usury Law, as amended. (Underscoring and
emphasis ours)
The Circular then went on to amend Books I to IV of
the CB’s "Manual of Regulations for Banks and Other
Financial Intermediaries" (Manual of Regulations) by
removing the applicable ceilings on specific interest
rates. Thus, Sections 5, 9 and 10 of CB Circular No.
905 amended Book I, Subsections 1303, 1349,
1388.1 of the Manual of Regulations, by removing the
ceilings for interest and other charges, commissions,
premiums, and fees applicable to commercial banks;
Sections 12 and 17 removed the interest ceilings for
thrift banks (Book II, Subsections 2303, 2349);
Sections 19 and 21 removed the ceilings applicable to
rural banks (Book III, Subsection 3152.3-c); and,
Sections 26, 28, 30 and 32 removed the ceilings for
non-bank financial intermediaries (Book IV,
Subsections 4303Q.1 to 4303Q.9, 4303N.1, 4303P).4
On June 14, 1993, President Fidel V. Ramos signed
into law R.A. No. 7653 establishing the Bangko
Sentral ng Pilipinas (BSP) to replace the CB. The
repealing clause thereof, Section 135, reads:
Sec. 135. Repealing Clause. — Except as may be
provided for in Sections 46 and 132 of this Act,
Republic Act No. 265, as amended, the provisions of
any other law, special charters, rule or regulation
issued pursuant to said Republic Act No. 265, as
amended, or parts thereof, which may be inconsistent
with the provisions of this Act are hereby repealed.
Presidential Decree No. 1792 is likewise repealed.
Petition for Certiorari
To justify their skipping the hierarchy of courts and
going directly to this Court to secure a writ of
certiorari, petitioners contend that the transcendental
importance of their Petition can readily be seen in the
issues raised therein, to wit:
a) Whether under R.A. No. 265 and/or P.D. No. 1684,
the CB-MB had the statutory or constitutional
authority to prescribe the maximum rates of interest
for all kinds of credit transactions and forbearance of
money, goods or credit beyond the limits prescribed in
the Usury Law;
b) If so, whether the CB-MB exceeded its authority
when it issued CB Circular No. 905, which removed
all interest ceilings and thus suspended Act No. 2655
as regards usurious interest rates;
c) Whether under R.A. No. 7653, the new BSP-MB
may continue to enforce CB Circular No. 905.5
Petitioners attached to their petition copies of several
Senate Bills and Resolutions of the 10th Congress,
which held its sessions from 1995 to 1998, calling for
investigations by the Senate Committee on Banks
and Financial Institutions into alleged unconscionable
commercial rates of interest imposed by these
entities. Senate Bill (SB) Nos. 376 and 1860,7 filed by
Senator Vicente C. Sotto III and the late Senator Blas
F. Ople, respectively, sought to amend Act No. 2655
by fixing the rates of interest on loans and
forbearance of credit; Philippine Senate Resolution
(SR) No. 1053,8 10739 and 1102,10 filed by Senators
Ramon B. Magsaysay, Jr., Gregorio B. Honasan and
Franklin M. Drilon, respectively, urged the aforesaid
Senate Committee to investigate ways to curb the
high commercial interest rates then obtaining in the
country; Senator Ernesto Maceda filed SB No. 1151
to prohibit the collection of more than two months of
advance interest on any loan of money; and Senator
Raul Roco filed SR No. 114411seeking an
investigation into an alleged cartel of commercial
banks, called "Club 1821", reportedly behind the
regime of high interest rates. The petitioners also
attached news clippings12 showing that in February
1998 the banks’ prime lending rates, or interests on
loans to their best borrowers, ranged from 26% to
31%.
Petitioners contend that under Section 1-a of Act No.
2655, as amended by P.D. No. 1684, the CB-MB was
authorized only to prescribe or set the maximum rates
of interest for a loan or renewal thereof or for the
forbearance of any money, goods or credits, and to
change such rates whenever warranted by prevailing
economic and social conditions, the changes to be
effected gradually and on scheduled dates; that
nothing in P.D. No. 1684 authorized the CB-MB to lift
or suspend the limits of interest on all credit
transactions, when it issued CB Circular No. 905.
They further insist that under Section 109 of R.A. No.
265, the authority of the CB-MB was clearly only to fix
the banks’ maximum rates of interest, but always
within the limits prescribed by the Usury Law.
Thus, according to petitioners, CB Circular No. 905,
which was promulgated without the benefit of any
prior public hearing, is void because it violated Article
5 of the New Civil Code, which provides that "Acts
executed against the provisions of mandatory or
prohibitory laws shall be void, except when the law
itself authorizes their validity."
They further claim that just weeks after the issuance
of CB Circular No. 905, the benchmark 91-day
Treasury bills (T-bills),13 then known as "Jobo"
bills14 shot up to 40% per annum, as a result. The
banks immediately followed suit and re-priced their
loans to rates which were even higher than those of
the "Jobo" bills. Petitioners thus assert that CB
Circular No. 905 is also unconstitutional in light of
Section 1 of the Bill of Rights, which commands that
"no person shall be deprived of life, liberty or property
without due process of law, nor shall any person be
denied the equal protection of the laws."
Finally, petitioners point out that R.A. No. 7653 did not
re-enact a provision similar to Section 109 of R.A. No.
265, and therefore, in view of the repealing clause in
Section 135 of R.A. No. 7653, the BSP-MB has been
stripped of the power either to prescribe the maximum
rates of interest which banks may charge for different
kinds of loans and credit transactions, or to suspend
Act No. 2655 and continue enforcing CB Circular No.
905.
Ruling
The petition must fail.
A. The Petition is procedurally infirm.
The decision on whether or not to accept a petition for
certiorari, as well as to grant due course thereto, is
addressed to the sound discretion of the court.15 A
petition for certiorari being an extraordinary remedy,
the party seeking to avail of the same must strictly
observe the procedural rules laid down by law, and
non-observance thereof may not be brushed aside as
mere technicality.16
As provided in Section 1 of Rule 65, a writ of certiorari
is directed against a tribunal exercising judicial or
quasi-judicial functions.17 Judicial functions are
exercised by a body or officer clothed with authority to
determine what the law is and what the legal rights of
the parties are with respect to the matter in
controversy. Quasi-judicial function is a term that
applies to the action or discretion of public
administrative officers or bodies given the authority to
investigate facts or ascertain the existence of facts,
hold hearings, and draw conclusions from them as a
basis for their official action using discretion of a
judicial nature.18
The CB-MB (now BSP-MB) was created to perform
executive functions with respect to the establishment,
operation or liquidation of banking and credit
institutions, and branches and agencies thereof.19 It
does not perform judicial or quasi-judicial functions.
Certainly, the issuance of CB Circular No. 905 was
done in the exercise of an executive function.
Certiorari will not lie in the instant case.20
B. Petitioners have no locus standi to file the Petition
Locus standi is defined as "a right of appearance in a
court of justice on a given question." In private suits,
Section 2, Rule 3 of the 1997 Rules of Civil Procedure
provides that "every action must be prosecuted or
defended in the name of the real party in interest,"
who is "the party who stands to be benefited or
injured by the judgment in the suit or the party entitled
to the avails of the suit." Succinctly put, a party’s
standing is based on his own right to the relief
sought.21
Even in public interest cases such as this petition, the
Court has generally adopted the "direct injury" test
that the person who impugns the validity of a statute
must have "a personal and substantial interest in the
case such that he has sustained, or will sustain direct
injury as a result."22 Thus, while petitioners assert a
public right to assail CB Circular No. 905 as an illegal
executive action, it is nonetheless required of them to
make out a sufficient interest in the vindication of the
public order and the securing of relief. It is significant
that in this petition, the petitioners do not allege that
they sustained any personal injury from the issuance
of CB Circular No. 905.
Petitioners also do not claim that public funds were
being misused in the enforcement of CB Circular No.
905. In Kilosbayan, Inc. v. Morato,23 involving the on-
line lottery contract of the PCSO, there was no
allegation that public funds were being misspent,
which according to the Court would have made the
action a public one, "and justify relaxation of the
requirement that an action must be prosecuted in the
name of the real party-in-interest." The Court held,
moreover, that the status of Kilosbayan as a people’s
organization did not give it the requisite personality to
question the validity of the contract. Thus:
Petitioners do not in fact show what particularized
interest they have for bringing this suit. It does not
detract from the high regard for petitioners as civic
leaders to say that their interest falls short of that
required to maintain an action under the Rule 3, Sec.
2.24
C. The Petition raises no issues of transcendental
importance.
In the 1993 case of Joya v. Presidential Commission
on Good Government,25 it was held that no question
involving the constitutionality or validity of a law or
governmental act may be heard and decided by the
court unless there is compliance with the legal
requisites for judicial inquiry, namely: (a) that the
question must be raised by the proper party; (b) that
there must be an actual case or controversy; (c) that
the question must be raised at the earliest possible
opportunity; and (d) that the decision on the
constitutional or legal question must be necessary to
the determination of the case itself.
In Prof. David v. Pres. Macapagal-Arroyo,26 the Court
summarized the requirements before taxpayers,
voters, concerned citizens, and legislators can be
accorded a standing to sue, viz:
(1) the cases involve constitutional issues;
(2) for taxpayers, there must be a claim of illegal
disbursement of public funds or that the tax measure
is unconstitutional;
(3) for voters, there must be a showing of obvious
interest in the validity of the election law in question;
(4) for concerned citizens, there must be a showing
that the issues raised are of transcendental
importance which must be settled early; and
(5) for legislators, there must be a claim that the
official action complained of infringes upon their
prerogatives as legislators.
While the Court may have shown in recent decisions
a certain toughening in its attitude concerning the
question of legal standing, it has nonetheless always
made an exception where the transcendental
importance of the issues has been established,
notwithstanding the petitioners’ failure to show a
direct injury.27 In CREBA v. ERC,28 the Court set out
the following instructive guides as determinants on
whether a matter is of transcendental importance,
namely: (1) the character of the funds or other assets
involved in the case; (2) the presence of a clear case
of disregard of a constitutional or statutory prohibition
by the public respondent agency or instrumentality of
the government; and (3) the lack of any other party
with a more direct and specific interest in the
questions being raised. Further, the Court stated in
Anak Mindanao Party-List Group v. The Executive
Secretary29 that the rule on standing will not be
waived where these determinants are not established.
In the instant case, there is no allegation of misuse of
public funds in the implementation of CB Circular No.
905. Neither were borrowers who were actually
affected by the suspension of the Usury Law joined in
this petition. Absent any showing of transcendental
importance, the petition must fail.
More importantly, the Court notes that the instant
petition adverted to the regime of high interest rates
which obtained at least 15 years ago, when the
banks’ prime lending rates ranged from 26% to
31%,30 or even 29 years ago, when the 91-day Jobo
bills reached 40% per annum. In contrast, according
to the BSP, in the first two (2) months of 2012 the
bank lending rates averaged 5.91%, which implies
that the banks’ prime lending rates were lower;
moreover, deposit interests on savings and long-term
deposits have also gone very low, averaging 1.75%
and 1.62%, respectively.31
Judging from the most recent auctions of T-bills, the
savings rates must be approaching 0%.1âwphi1 In
the auctions held on November 12, 2012, the rates of
3-month, 6-month and 1-year T-bills have dropped to
0.150%, 0.450% and 0.680%,
respectively.32 According to Manila Bulletin, this very
low interest regime has been attributed to "high
liquidity and strong investor demand amid positive
economic indicators of the country."33
While the Court acknowledges that cases of
transcendental importance demand that they be
settled promptly and definitely, brushing aside, if we
must, technicalities of procedure,34 the delay of at
least 15 years in the filing of the instant petition has
actually rendered moot and academic the issues it
now raises.
For its part, BSP-MB maintains that the petitioners’
allegations of constitutional and statutory violations of
CB Circular No. 905 are really mere challenges made
by petitioners concerning the wisdom of the Circular.
It explains that it was in view of the global economic
downturn in the early 1980’s that the executive
department through the CB-MB had to formulate
policies to achieve economic recovery, and among
these policies was the establishment of a market-
oriented interest rate structure which would require
the removal of the government-imposed interest rate
ceilings.35
D. The CB-MB merely suspended the effectivity of the
Usury Law when it issued CB Circular No. 905.
The power of the CB to effectively suspend the Usury
Law pursuant to P.D. No. 1684 has long been
recognized and upheld in many cases. As the Court
explained in the landmark case of Medel v.
CA,36 citing several cases, CB Circular No. 905 "did
not repeal nor in anyway amend the Usury Law but
simply suspended the latter’s effectivity;"37that "a CB
Circular cannot repeal a law, [for] only a law can
repeal another law;"38 that "by virtue of CB Circular
No. 905, the Usury Law has been rendered
ineffective;"39 and "Usury has been legally non-
existent in our jurisdiction. Interest can now be
charged as lender and borrower may agree upon."40
In First Metro Investment Corp. v. Este Del Sol
Mountain Reserve, Inc.41 cited in DBP v. Perez,42 we
also belied the contention that the CB was engaged in
self-legislation. Thus:
Central Bank Circular No. 905 did not repeal nor in
any way amend the Usury Law but simply suspended
the latter’s effectivity. The illegality of usury is wholly
the creature of legislation. A Central Bank Circular
cannot repeal a law. Only a law can repeal another
law. x x x.43
In PNB v. Court of Appeals,44 an escalation clause in
a loan agreement authorized the PNB to unilaterally
increase the rate of interest to 25% per annum, plus a
penalty of 6% per annum on past dues, then to 30%
on October 15, 1984, and to 42% on October 25,
1984. The Supreme Court invalidated the rate
increases made by the PNB and upheld the 12%
interest imposed by the CA, in this wise:
P.D. No. 1684 and C.B. Circular No. 905 no more
than allow contracting parties to stipulate freely
regarding any subsequent adjustment in the interest
rate that shall accrue on a loan or forbearance of
money, goods or credits. In fine, they can agree to
adjust, upward or downward, the interest previously
stipulated. x x x.45
Thus, according to the Court, by lifting the interest
ceiling, CB Circular No. 905 merely upheld the
parties’ freedom of contract to agree freely on the rate
of interest. It cited Article 1306 of the New Civil Code,
under which the contracting parties may establish
such stipulations, clauses, terms and conditions as
they may deem convenient, provided they are not
contrary to law, morals, good customs, public order,
or public policy.
E. The BSP-MB has authority to enforce CB Circular
No. 905.
Section 1 of CB Circular No. 905 provides that "The
rate of interest, including commissions, premiums,
fees and other charges, on a loan or forbearance of
any money, goods, or credits, regardless of maturity
and whether secured or unsecured, that may be
charged or collected by any person, whether natural
or juridical, shall not be subject to any ceiling
prescribed under or pursuant to the Usury Law, as
amended." It does not purport to suspend the Usury
Law only as it applies to banks, but to all lenders.
Petitioners contend that, granting that the CB had
power to "suspend" the Usury Law, the new BSP-MB
did not retain this power of its predecessor, in view of
Section 135 of R.A. No. 7653, which expressly
repealed R.A. No. 265. The petitioners point out that
R.A. No. 7653 did not reenact a provision similar to
Section 109 of R.A. No. 265.
A closer perusal shows that Section 109 of R.A. No.
265 covered only loans extended by banks, whereas
under Section 1-a of the Usury Law, as amended, the
BSP-MB may prescribe the maximum rate or rates of
interest for all loans or renewals thereof or the
forbearance of any money, goods or credits, including
those for loans of low priority such as consumer
loans, as well as such loans made by pawnshops,
finance companies and similar credit institutions. It
even authorizes the BSP-MB to prescribe different
maximum rate or rates for different types of
borrowings, including deposits and deposit
substitutes, or loans of financial intermediaries.
Act No. 2655, an earlier law, is much broader in
scope, whereas R.A. No. 265, now R.A. No. 7653,
merely supplemented it as it concerns loans by banks
and other financial institutions. Had R.A. No. 7653
been intended to repeal Section 1-a of Act No. 2655,
it would have so stated in unequivocal terms.
Moreover, the rule is settled that repeals by
implication are not favored, because laws are
presumed to be passed with deliberation and full
knowledge of all laws existing pertaining to the
subject.46 An implied repeal is predicated upon the
condition that a substantial conflict or repugnancy is
found between the new and prior laws. Thus, in the
absence of an express repeal, a subsequent law
cannot be construed as repealing a prior law unless
an irreconcilable inconsistency and repugnancy exists
in the terms of the new and old laws.47 We find no
such conflict between the provisions of Act 2655 and
R.A. No. 7653.
F. The lifting of the ceilings for interest rates does not
authorize stipulations charging excessive,
unconscionable, and iniquitous interest.
It is settled that nothing in CB Circular No. 905 grants
lenders a carte blanche authority to raise interest
rates to levels which will either enslave their
borrowers or lead to a hemorrhaging of their
assets.48 As held in Castro v. Tan:49
The imposition of an unconscionable rate of interest
on a money debt, even if knowingly and voluntarily
assumed, is immoral and unjust. It is tantamount to a
repugnant spoliation and an iniquitous deprivation of
property, repulsive to the common sense of man. It
has no support in law, in principles of justice, or in the
human conscience nor is there any reason
whatsoever which may justify such imposition as
righteous and as one that may be sustained within the
sphere of public or private morals.50
Stipulations authorizing iniquitous or unconscionable
interests have been invariably struck down for being
contrary to morals, if not against the law.51 Indeed,
under Article 1409 of the Civil Code, these contracts
are deemed inexistent and void ab initio, and
therefore cannot be ratified, nor may the right to set
up their illegality as a defense be waived.
Nonetheless, the nullity of the stipulation of usurious
interest does not affect the lender’s right to recover
the principal of a loan, nor affect the other terms
thereof.52 Thus, in a usurious loan with mortgage, the
right to foreclose the mortgage subsists, and this right
can be exercised by the creditor upon failure by the
debtor to pay the debt due. The debt due is
considered as without the stipulated excessive
interest, and a legal interest of 12% per annum will be
added in place of the excessive interest formerly
imposed,53following the guidelines laid down in the
landmark case of Eastern Shipping Lines, Inc. v.
Court of Appeals,54 regarding the manner of
computing legal interest:
II. With regard particularly to an award of interest in
the concept of actual and compensatory damages,
the rate of interest, as well as the accrual thereof, is
imposed, as follows:
1. When the obligation is breached, and it consists in
the payment of a sum of money, i.e., a loan or
forbearance of money, the interest due should be that
which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In the
absence of stipulation, the rate of interest shall be
12% per annum to be computed from default, i.e.,
from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil
Code.
2. When an obligation, not constituting a loan or
forbearance of money, is breached, an interest on the
amount of damages awarded may be imposed at the
discretion of the court at the rate of 6% per annum.
No interest, however, shall be adjudged on
unliquidated claims or damages except when or until
the demand can be established with reasonable
certainty. Accordingly, where the demand is
established with reasonable certainty, the interest
shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code) but
when such certainty cannot be so reasonably
established at the time the demand is made, the
interest shall begin to run only from the date the
judgment of the court is made (at which time the
quantification of damages may be deemed to have
been reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on
the amount finally adjudged.
3. When the judgment of the court awarding a sum of
money becomes final and executory, the rate of legal
interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 12% per annum from
such finality until its satisfaction, this interim period
being deemed to be by then an equivalent to a
forbearance of credit.55 (Citations omitted)
The foregoing rules were further clarified in Sunga-
Chan v. Court of Appeals, 56 as follows:
Eastern Shipping Lines, Inc. synthesized the rules on
the imposition of interest, if proper, and the applicable
rate, as follows: The 12% per annum rate under CB
Circular No. 416 shall apply only to loans or
forbearance of money, goods, or credits, as well as to
judgments involving such loan or forbearance of
money, goods, or credit, while the 6% per annum
under Art. 2209 of the Civil Code applies "when the
transaction involves the payment of indemnities in the
concept of damage arising from the breach or a delay
in the performance of obligations in general," with the
application of both rates reckoned "from the time the
complaint was filed until the [adjudged] amount is fully
paid." In either instance, the reckoning period for the
commencement of the running of the legal interest
shall be subject to the condition "that the courts are
vested with discretion, depending on the equities of
each case, on the award of interest."57 (Citations
omitted)
WHEREFORE, premises considered, the Petition for
certiorari is DISMISSED.
SO ORDERED.
BIENVENIDO L. REYES
Associate Justice
G.R. No. 191644               February 19, 2013
DENNIS A.B. FUNA, Petitioner,  petitioner, in his capacity as a taxpayer, a concerned
vs.
CTING SECRETARY OF JUSTICE ALBERTO C.
AGRA, IN HIS OFFICIAL CONCURRENT
CAPACITIES AS ACTING SECRETARY OF THE
DEPARTMENT OF JUSTICE AND AS ACTING
SOLICITOR GENERAL, EXECUTIVE SECRETARY
LEANDRO R. MENDOZA, OFFICE OF THE
PRESIDENT, Respondents.
DECISION
BERSAMIN, J.:
Section 13, Article VII of the 1987 Constitution
expressly prohibits the President, Vice-President, the
Members of the Cabinet, and their deputies or
assistants from holding any other office or
employment during their tenure unless otherwise
provided in the Constitution. Complementing the
prohibition is Section 7, paragraph (2), Article IX-B of
the 1987 Constitution, which bans any appointive
official from holding any other office or employment in
the Government or any subdivision, agency or
instrumentality thereof, including government-owned
or controlled corporations or their subsidiaries, unless
otherwise allowed by law or the primary functions of
his position.
These prohibitions under the Constitution are at the
core of this special civil action for certiorari and
prohibition commenced on April 7, 2010 to assail the
designation of respondent Hon. Alberto C. Agra, then
the Acting Secretary of Justice, as concurrently the
Acting Solicitor General.
Antecedents
The petitioner alleges that on March 1, 2010,
President Gloria M. Macapagal-Arroyo appointed
Agra as the Acting Secretary of Justice following the
resignation of Secretary Agnes VST Devanadera in
order to vie for a congressional seat in Quezon
Province; that on March 5, 2010, President Arroyo
designated Agra as the Acting Solicitor General in a
concurrent capacity;1 that on April 7, 2010, the
citizen and a lawyer, commenced this suit to
challenge the constitutionality of Agra’s concurrent
appointments or designations, claiming it to be
prohibited under Section 13, Article VII of the 1987
Constitution; that during the pendency of the suit,
President Benigno S. Aquino III appointed Atty. Jose
Anselmo I. Cadiz as the Solicitor General; and that
Cadiz assumed as the Solicitor General and
commenced his duties as such on August 5, 2010.2
Agra renders a different version of the antecedents.
He represents that on January 12, 2010, he was then
the Government Corporate Counsel when President
Arroyo designated him as the Acting Solicitor General
in place of Solicitor General Devanadera who had
been appointed as the Secretary of Justice;3 that on
March 5, 2010, President Arroyo designated him also
as the Acting Secretary of Justice vice Secretary
Devanadera who had meanwhile tendered her
resignation in order to run for Congress representing
a district in Quezon Province in the May 2010
elections; that he then relinquished his position as the
Government Corporate Counsel; and that pending the
appointment of his successor, Agra continued to
perform his duties as the Acting Solicitor General.4
Notwithstanding the conflict in the versions of the
parties, the fact that Agra has admitted to holding the
two offices concurrently in acting capacities is settled,
which is sufficient for purposes of resolving the
constitutional question that petitioner raises herein.
The Case
In Funa v. Ermita,5 the Court resolved a petition
for certiorari, prohibition and mandamus  brought by
herein petitioner assailing the constitutionality of the
designation of then Undersecretary of the Department
of Transportation and Communications (DOTC) Maria
Elena H. Bautista as concurrently the Officer-in-
Charge of the Maritime Industry Authority. The
petitioner has adopted here the arguments he
advanced in Funa v. Ermita, and he has rested his
grounds of challenge mainly on the pronouncements
in Civil Liberties Union v. Executive
Secretary6and Public Interest Center, Inc. v. Elma.7
What may differentiate this challenge from those in
the others is that the appointments being hereby
challenged were in acting or temporary capacities.
Still, the petitioner submits that the prohibition under
Section 13, Article VII of the 1987 Constitution does
not distinguish between an appointment or
designation of a Member of the Cabinet in an acting
or temporary capacity, on the one hand, and one in a
permanent capacity, on the other hand; and that
Acting Secretaries, being nonetheless Members of
the Cabinet, are not exempt from the constitutional
ban. He emphasizes that the position of the Solicitor
General is not an ex officio  position in relation to the
position of the Secretary of Justice, considering that
the Office of the Solicitor General (OSG) is an
independent and autonomous office attached to the
Department of Justice (DOJ).8 He insists that the fact
that Agra was extended an appointment as the Acting
Solicitor General shows that he did not occupy that
office in an ex officio  capacity because an ex
officio  position does not require any further warrant or
appointment.
Respondents contend, in contrast, that Agra’s
concurrent designations as the Acting Secretary of
Justice and Acting Solicitor General were only in a
temporary capacity, the only effect of which was to
confer additional duties to him. Thus, as the Acting
Solicitor General and Acting Secretary of Justice,
Agra was not "holding" both offices in the strict
constitutional sense.9 They argue that an
appointment, to be covered by the constitutional
prohibition, must be regular and permanent, instead
of a mere designation.
Respondents further contend that, even on the
assumption that Agra’s concurrent designation
constituted "holding of multiple offices," his continued
service as the Acting Solicitor General was akin to a
hold-over; that upon Agra’s designation as the Acting
Secretary of Justice, his term as the Acting Solicitor
General expired in view of the constitutional
prohibition against holding of multiple offices by the
Members of the Cabinet; that under the principle of
hold-over, Agra continued his service as the Acting
Solicitor General "until his successor is elected and
qualified"10 to "prevent a hiatus in the government
pending the time when a successor may be chosen
and inducted into office;"11 and that during his
continued service as the Acting Solicitor General, he
did not receive any salaries and emoluments from the
OSG after becoming the Acting Secretary of Justice
on March 5, 2010.12
Respondents point out that the OSG’s independence
and autonomy are defined by the powers and
functions conferred to that office by law, not by the
person appointed to head such office;13 and that
although the OSG is attached to the DOJ, the DOJ’s
authority, control and supervision over the OSG are
limited only to budgetary purposes.14
In his reply, petitioner counters that there was no
"prevailing special circumstance" that justified the
non-application to Agra of Section 13, Article VII of
the 1987 Constitution;15 that the temporariness of the
appointment or designation is not an excuse to
disregard the constitutional ban against holding of
multiple offices by the Members of the Cabinet;16 that
Agra’s invocation of the principle of hold-over is
misplaced for being predicated upon an erroneous
presentation of a material fact as to the time of his
designation as the Acting Solicitor General and Acting
Secretary of Justice; that Agra’s concurrent
designations further violated the Administrative Code
of 1987 which mandates that the OSG shall be
autonomous and independent.17
Issue
Did the designation of Agra as the Acting Secretary of
Justice, concurrently with his position of Acting
Solicitor General, violate the constitutional prohibition
against dual or multiple offices for the Members of the
Cabinet and their deputies and assistants?
Ruling
The petition is meritorious.
The designation of Agra as Acting Secretary of
Justice concurrently with his position of Acting
Solicitor General was unconstitutional and void for
being in violation of the constitutional prohibition
under Section 13, Article VII of the 1987 Constitution.
1.
Requisites of judicial review not in issue
The power of judicial review is subject to limitations,
to wit: (1) there must be an actual case or controversy
calling for the exercise of judicial power; (2) the
person challenging the act must have the standing to
assail the validity of the subject act or issuance, that
is, he must have a personal and substantial interest in
the case such that he has sustained, or will sustain,
direct injury as a result of its enforcement; (3) the
question of constitutionality must be raised at the
earliest opportunity; and (4) the issue of
constitutionality must be the very lis mota  of the
case.18
Here, the OSG does not dispute the justiciability and
ripeness for consideration and resolution by the Court
of the matter raised by the petitioner. Also, the locus
standi of the petitioner as a taxpayer, a concerned
citizen and a lawyer to bring a suit of this nature has
already been settled in his favor in rulings by the
Court on several other public law litigations he
brought. In Funa v. Villar,19 for one, the Court has
held:
To have legal standing, therefore, a suitor must show
that he has sustained or will sustain a "direct injury"
as a result of a government action, or have a "material
interest" in the issue affected by the challenged
official act. However, the Court has time and again
acted liberally on the locus standi  requirements
and has accorded certain individuals, not
otherwise directly injured, or with material interest
affected, by a Government act, standing to sue
provided a constitutional issue of critical
significance is at stake. The rule on locus
standi  is after all a mere procedural technicality in
relation to which the Court, in a catena  of cases
involving a subject of transcendental import, has
waived, or relaxed, thus allowing non-traditional
plaintiffs, such as concerned citizens, taxpayers,
voters or legislators, to sue in the public interest,
albeit they may not have been personally injured
by the operation of a law or any other government
act. In David, the Court laid out the bare minimum
norm before the so-called "non-traditional
suitors" may be extended standing to sue, thusly:
1.) For taxpayers, there must be a claim of illegal
disbursement of public funds or that the tax measure
is unconstitutional;
2.) For voters, there must be a showing of obvious
interest in the validity of the election law in question;
3.) For concerned citizens, there must be a showing
that the issues raised are of transcendental
importance which must be settled early; and
4.) For legislators, there must be a claim that the
official action complained of infringes their
prerogatives as legislators.
This case before Us is of transcendental
importance, since it obviously has "far-reaching
implications," and there is a need to promulgate
rules that will guide the bench, bar, and the public
in future analogous cases. We, thus, assume a
liberal stance and allow petitioner to institute the
instant petition.20 (Bold emphasis supplied)
In Funa v. Ermita,21 the Court recognized the locus
standi of the petitioner as a taxpayer, a concerned
citizen and a lawyer because the issue raised therein
involved a subject of transcendental importance
whose resolution was necessary to promulgate rules
to guide the Bench, Bar, and the public in similar
cases.
But, it is next posed, did not the intervening
appointment of and assumption by Cadiz as the
Solicitor General during the pendency of this suit
render this suit and the issue tendered herein moot
and academic?
A moot and academic case is one that ceases to
present a justiciable controversy by virtue of
supervening events, so that a declaration thereon
would be of no practical use or value.22 Although the
controversy could have ceased due to the intervening
appointment of and assumption by Cadiz as the
Solicitor General during the pendency of this suit, and
such cessation of the controversy seemingly rendered
moot and academic the resolution of the issue of the
constitutionality of the concurrent holding of the two
positions by Agra, the Court should still go forward
and resolve the issue and not abstain from exercising
its power of judicial review because this case comes
under several of the well-recognized exceptions
established in jurisprudence. Verily, the Court did not
desist from resolving an issue that a supervening
event meanwhile rendered moot and academic if any
of the following recognized exceptions obtained,
namely: (1) there was a grave violation of the
Constitution; (2) the case involved a situation of
exceptional character and was of paramount public
interest; (3) the constitutional issue raised required
the formulation of controlling principles to guide the
Bench, the Bar and the public; and (4) the case was
capable of repetition, yet evading review.23
It is the same here. The constitutionality of the
concurrent holding by Agra of the two positions in the
Cabinet, albeit in acting capacities, was an issue that
comes under all the recognized exceptions. The issue
involves a probable violation of the Constitution, and
relates to a situation of exceptional character and of
paramount public interest by reason of its
transcendental importance to the people. The
resolution of the issue will also be of the greatest
value to the Bench and the Bar in view of the broad
powers wielded through said positions. The situation
further calls for the review because the situation is
capable of repetition, yet evading review.24 In other
words, many important and practical benefits are still
to be gained were the Court to proceed to the ultimate
resolution of the constitutional issue posed.
2.
Unconstitutionality of Agra’s concurrent
designation as Acting Secretary of Justice and
Acting Solicitor General
At the center of the controversy is the correct
application of Section 13, Article VII of the 1987
Constitution, viz:
Section 13. The President, Vice-President, the
Members of the Cabinet, and their deputies or
assistants shall not, unless otherwise provided in this
Constitution, hold any other office or employment
during their tenure. They shall not, during said tenure,
directly or indirectly practice any other profession,
participate in any business, or be financially interested
in any contract with, or in any franchise, or special
privilege granted by the Government or any
subdivision, agency, or instrumentality thereof,
including government-owned or controlled
corporations or their subsidiaries. They shall strictly
avoid conflict of interest in the conduct of their office.
A relevant and complementing provision is Section 7,
paragraph (2), Article IX-B of the 1987 Constitution, to
wit:
Section 7. x x x
Unless otherwise allowed by law or the primary
functions of his position, no appointive official shall
hold any other office or employment in the
Government or any subdivision, agency or
instrumentality thereof, including government-owned
or controlled corporations or their subsidiaries.
The differentiation of the two constitutional provisions
was well stated in Funa v. Ermita,25 a case in which
the petitioner herein also assailed the designation of
DOTC Undersecretary as concurrent Officer-in-
Charge of the Maritime Industry Authority, with the
Court reiterating its pronouncement in Civil Liberties
Union v. The Executive Secretary26 on the intent of
the Framers behind these provisions of the
Constitution, viz:
Thus, while all other appointive officials in the civil
service are allowed to hold other office or employment
in the government during their tenure when such is
allowed by law or by the primary functions of their
positions, members of the Cabinet, their deputies and
assistants may do so only when expressly authorized
by the Constitution itself. In other words, Section 7,
Article IX-B is meant to lay down the general rule
applicable to all elective and appointive public
officials and employees, while Section 13, Article
VII is meant to be the exception applicable only to
the President, the Vice-President, Members of the
Cabinet, their deputies and assistants.
xxxx
Since the evident purpose of the framers of the 1987
Constitution is to impose a stricter prohibition on the
President, Vice-President, members of the Cabinet,
their deputies and assistants with respect to holding
multiple offices or employment in the government
during their tenure, the exception to this prohibition
must be read with equal severity. On its face, the
language of Section 13, Article VII is prohibitory so
that it must be understood as intended to be a
positive and unequivocal negation of the privilege of
holding multiple government offices or employment.
Verily, wherever the language used in the constitution
is prohibitory, it is to be understood as intended to be
a positive and unequivocal negation. The phrase
"unless otherwise provided in this Constitution"
must be given a literal interpretation to refer only
to those particular instances cited in the
Constitution itself, to wit: the Vice-President being
appointed as a member of the Cabinet under Section
3, par. (2), Article VII; or acting as President in those
instances provided under Section 7, pars. (2) and (3),
Article VII; and, the Secretary of Justice being ex-
officio  member of the Judicial and Bar Council by
virtue of Section 8 (1), Article VIII. (Bold emphasis
supplied.)
Being designated as the Acting Secretary of Justice
concurrently with his position of Acting Solicitor
General, therefore, Agra was undoubtedly covered by
Section 13, Article VII, supra, whose text and spirit
were too clear to be differently read. Hence, Agra
could not validly hold any other office or employment
during his tenure as the Acting Solicitor General,
because the Constitution has not otherwise so
provided.27
It was of no moment that Agra’s designation was in an
acting or temporary capacity. The text of Section
13, supra, plainly indicates that the intent of the
Framers of the Constitution was to impose a stricter
prohibition on the President and the Members of his
Cabinet in so far as holding other offices or
employments in the Government or in government-
owned or government controlled-corporations was
concerned.28 In this regard, to hold an office means to
possess or to occupy the office, or to be in
possession and administration of the office, which
implies nothing less than the actual discharge of the
functions and duties of the office.29 Indeed, in the
language of Section 13 itself, supra, the Constitution
makes no reference to the nature of the appointment
or designation. The prohibition against dual or
multiple offices being held by one official must be
construed as to apply to all appointments or
designations, whether permanent or temporary, for it
is without question that the avowed objective of
Section 13, supra, is to prevent the concentration of
powers in the Executive Department officials,
specifically the President, the Vice-President, the
Members of the Cabinet and their deputies and
assistants.30 To construe differently is to "open the
veritable floodgates of circumvention of an important
constitutional disqualification of officials in the
Executive Department and of limitations on the
President’s power of appointment in the guise of
temporary designations of Cabinet Members,
undersecretaries and assistant secretaries as officers-
in-charge of government agencies, instrumentalities,
or government-owned or controlled corporations."31
According to Public Interest Center, Inc. v. Elma,32 the
only two exceptions against the holding of multiple
offices are: (1) those provided for under the
Constitution, such as Section 3, Article VII,
authorizing the Vice President to become a member
of the Cabinet; and (2) posts occupied by Executive
officials specified in Section 13, Article VII without
additional compensation in ex officio capacities as
provided by law and as required by the primary
functions of the officials’ offices. In this regard, the
decision in Public Interest Center, Inc. v.
Elma  adverted to the resolution issued on August 1,
1991 in Civil Liberties Union v. The Executive
Secretary, whereby the Court held that the phrase
"the Members of the Cabinet, and their deputies or
assistants" found in Section 13, supra, referred only to
the heads of the various executive departments, their
undersecretaries and assistant secretaries, and did
not extend to other public officials given the rank of
Secretary, Undersecretary or Assistant
Secretary.33 Hence, in Public Interest Center, Inc. v.
Elma, the Court opined that the prohibition under
Section 13 did not cover Elma, a Presidential
Assistant with the rank of Undersecretary.34
It is equally remarkable, therefore, that Agra’s
designation as the Acting Secretary of Justice was not
in an ex officio  capacity, by which he would have
been validly authorized to concurrently hold the two
positions due to the holding of one office being the
consequence of holding the other. Being included in
the stricter prohibition embodied in Section 13, supra,
Agra cannot liberally apply in his favor the broad
exceptions provided in Section 7, paragraph 2, Article
IX-B of the Constitution ("Unless otherwise allowed by
law or the primary functions of his position") to justify
his designation as Acting Secretary of Justice
concurrently with his designation as Acting Solicitor
General, or vice versa. Thus, the Court has said –
[T]he qualifying phrase "unless otherwise provided in
this Constitution" in Section 13, Article VII cannot
possibly refer to the broad exceptions provided under
Section 7, Article IX-B of the 1987 Constitution. To
construe said qualifying phrase as respondents would
have us do, would render nugatory and meaningless
the manifest intent and purpose of the framers of the
Constitution to impose a stricter prohibition on the
President, Vice-President, Members of the Cabinet,
their deputies and assistants with respect to holding
other offices or employment in the government during
their tenure. Respondents’ interpretation that Section
13 of Article VII admits of the exceptions found in
Section 7, par. (2) of Article IX-B would obliterate the
distinction so carefully set by the framers of the
Constitution as to when the highranking officials of the
Executive Branch from the President to Assistant
Secretary, on the one hand, and the generality of civil
servants from the rank immediately below Assistant
Secretary downwards, on the other, may hold any
other office or position in the government during their
tenure.35
To underscore the obvious, it is not sufficient for Agra
to show that his holding of the other office was
"allowed by law or the primary functions of his
position." To claim the exemption of his concurrent
designations from the coverage of the stricter
prohibition under Section 13, supra, he needed to
establish herein that his concurrent designation was
expressly allowed by the Constitution. But, alas, he
did not do so.
To be sure, Agra’s concurrent designations as Acting
Secretary of Justice and Acting Solicitor General did
not come within the definition of an ex
officio  capacity.  Had either of his concurrent
designations been in an ex officio capacity in relation
to the other, the Court might now be ruling in his
favor.
The import of an ex officio  capacity has been fittingly
explained in Civil Liberties Union v. Executive
Secretary,36 as follows:
x x x. The term ex officio  means "from office; by virtue
of office." It refers to an "authority derived from official
character merely, not expressly conferred upon the
individual character, but rather annexed to the official
position." Ex officio likewise denotes an "act done in
an official character, or as a consequence of office,
and without any other appointment or authority other
than that conferred by the office." An ex
officio  member of a board is one who is a member by
virtue of his title to a certain office, and without further
warrant or appointment. x x x.
xxxx
The ex officio position being actually and in legal
contemplation part of the principal office, it follows
that the official concerned has no right to receive
additional compensation for his services in the said
position. The reason is that these services are already
paid for and covered by the compensation attached to
his principal office. x x x.
Under the Administrative Code of 1987, the DOJ is
mandated to "provide the government with a principal
law agency which shall be both its legal counsel and
prosecution arm; administer the criminal justice
system in accordance with the accepted processes
thereof consisting in the investigation of the crimes,
prosecution of offenders and administration of the
correctional system; implement the laws on the
admission and stay of aliens, citizenship, land titling
system, and settlement of land problems involving
small landowners and members of indigenous cultural
minorities; and provide free legal services to indigent
members of the society."37 The DOJ’s specific powers
and functions are as follows:
(1) Act as principal law agency of the government and
as legal counsel and representative thereof,
whenever so required;
(2) Investigate the commission of crimes, prosecute
offenders and administer the probation and correction
system;
(3) Extend free legal assistance/representation to
indigents and poor litigants in criminal cases and non-
commercial civil disputes;
(4) Preserve the integrity of land titles through proper
registration;
(5) Investigate and arbitrate untitled land disputes
involving small landowners and members of
indigenous cultural communities;
(6) Provide immigration and naturalization regulatory
services and implement the laws governing
citizenship and the admission and stay of aliens;
(7) Provide legal services to the national government
and its functionaries, including government-owned or
controlled corporations and their subsidiaries; and
(8) Perform such other functions as may be provided
by law.38
On the other hand, the Administrative Code of
1987 confers upon the Office of the Solicitor General
the following powers and functions, to wit:
The Office of the Solicitor General shall represent the
Government of the Philippines, its agencies and
instrumentalities and its officials and agents in any
litigation, proceeding, investigation or matter requiring
the services of lawyers. When authorized by the
President or head of the office concerned, it shall also
represent government owned or controlled
corporations. The Office of the Solicitor General shall
discharge duties requiring the services of lawyers. It
shall have the following specific powers and functions:
1. Represent the Government in the Supreme Court
and the Court of Appeals in all criminal proceedings;
represent the Government and its officers in the
Supreme Court, the Court of Appeals, and all other
courts or tribunals in all civil actions and special
proceedings in which the Government or any officer
thereof in his official capacity is a party.
2. Investigate, initiate court action, or in any manner
proceed against any person, corporation or firm for
the enforcement of any contract, bond, guarantee,
mortgage, pledge or other collateral executed in favor
of the Government. Where proceedings are to be
conducted outside of the Philippines the Solicitor
General may employ counsel to assist in the
discharge of the aforementioned responsibilities.
3. Appear in any court in any action involving the
validity of any treaty, law, executive order or
proclamation, rule or regulation when in his judgment
his intervention is necessary or when requested by
the Court.
4. Appear in all proceedings involving the acquisition
or loss of Philippine citizenship.
5. Represent the Government in all land registration
and related proceedings. Institute actions for the
reversion to the Government of lands of the public
domain and improvements thereon as well as lands
held in violation of the Constitution.
6. Prepare, upon request of the President or other
proper officer of the National Government, rules and
guidelines for government entities governing the
preparation of contracts, making investments,
undertaking of transactions, and drafting of forms or
other writings needed for official use, with the end in
view of facilitating their enforcement and insuring that
they are entered into or prepared conformably with
law and for the best interests of the public.
7. Deputize, whenever in the opinion of the Solicitor
General the public interest requires, any provincial or
city fiscal to assist him in the performance of any
function or discharge of any duty incumbent upon
him, within the jurisdiction of the aforesaid provincial
or city fiscal. When so deputized, the fiscal shall be
under the control and supervision of the Solicitor
General with regard to the conduct of the proceedings
assigned to the fiscal, and he may be required to
render reports or furnish information regarding the
assignment.
8. Deputize legal officers of government departments,
bureaus, agencies and offices to assist the Solicitor
General and appear or represent the Government in
cased involving their respective offices, brought
before the courts and exercise supervision and
control over such legal Officers with respect to such
cases.
9. Call on any department, bureau, office, agency or
instrumentality of the Government for such service,
assistance and cooperation as may be necessary in
fulfilling its functions and responsibilities and for this
purpose enlist the services of any government official
or employee in the pursuit of his tasks.
10. Departments, bureaus, agencies, offices,
instrumentalities and corporations to whom the Office
of the Solicitor General renders legal services are
authorized to disburse funds from their sundry
operating and other funds for the latter Office. For this
purpose, the Solicitor General and his staff are
specifically authorized to receive allowances as may
be provided by the Government offices,
instrumentalities and corporations concerned, in
addition to their regular compensation.
11. Represent, upon the instructions of the President,
the Republic of the Philippines in international
litigations, negotiations or conferences where the
legal position of the Republic must be defended or
presented.
12. Act and represent the Republic and/or the people
before any court, tribunal, body or commission in any
matter, action or proceedings which, in his opinion
affects the welfare of the people as the ends of justice
may require; and
13. Perform such other functions as may be provided
by law.39
The foregoing provisions of the applicable laws show
that one position was not derived from the other.
Indeed, the powers and functions of the OSG are
neither required by the primary functions nor included
by the powers of the DOJ, and vice versa. The OSG,
while attached to the DOJ,40 is not a constituent unit of
the latter,41 as, in fact, the Administrative Code of
1987 decrees that the OSG is independent and
autonomous.42 With the enactment of Republic Act
No. 9417,43 the Solicitor General is now vested with a
cabinet rank, and has the same qualifications for
appointment, rank, prerogatives, salaries, allowances,
benefits and privileges as those of the Presiding
Justice of the Court of Appeals.44
Moreover, the magnitude of the scope of work of the
Solicitor General, if added to the equally demanding
tasks of the Secretary of Justice, is obviously too
much for any one official to bear. Apart from the sure
peril of political pressure, the concurrent holding of
the two positions, even if they are not entirely
incompatible, may affect sound government
operations and the proper performance of duties.
Heed should be paid to what the Court has pointedly
observed in Civil Liberties Union v. Executive
Secretary: 45
Being head of an executive department is no mean
job. It is more than a full-time job, requiring full
attention, specialized knowledge, skills and expertise.
If maximum benefits are to be derived from a
department head’s ability and expertise, he should be
allowed to attend to his duties and responsibilities
without the distraction of other governmental offices
or employment. He should be precluded from
dissipating his efforts, attention and energy among
too many positions of responsibility, which may result
in haphazardness and inefficiency. Surely the
advantages to be derived from this concentration of
attention, knowledge and expertise, particularly at this
stage of our national and economic development, far
outweigh the benefits, if any, that may be gained from
a department head spreading himself too thin and
taking in more than what he can handle.
It is not amiss to observe, lastly, that assuming that
Agra, as the Acting Solicitor General, was not covered
by the stricter prohibition under Section 13, supra,
due to such position being merely vested with a
cabinet rank under Section 3, Republic Act No. 9417,
he nonetheless remained covered by the general
prohibition under Section 7, supra. Hence, his
concurrent designations were still subject to the
conditions under the latter constitutional provision. In
this regard, the Court aptly pointed out in Public
Interest Center, Inc. v. Elma:46
The general rule contained in Article IX-B of the 1987
Constitution permits an appointive official to hold
more than one office only if "allowed by law or by the
primary functions of his position." In the case
of Quimson v. Ozaeta, this Court ruled that, "[t]here is
no legal objection to a government official occupying
two government offices and performing the functions
of both as long as there is no incompatibility." The
crucial test in determining whether incompatibility
exists between two offices was laid out in People v.
Green - whether one office is subordinate to the
other, in the sense that one office has the right to
interfere with the other.
[I]ncompatibility between two offices, is an
inconsistency in the functions of the two; x x x Where
one office is not subordinate to the other, nor the
relations of the one to the other such as are
inconsistent and repugnant, there is not that
incompatibility from which the law declares that the
acceptance of the one is the vacation of the other.
The force of the word, in its application to this matter
is, that from the nature and relations to each other, of
the two places, they ought not to be held by the same
person, from the contrariety and antagonism which
would result in the attempt by one person to faithfully
and impartially discharge the duties of one, toward the
incumbent of the other. X x x The offices must
subordinate, one [over] the other, and they must, per
se, have the right to interfere, one with the other,
before they are incompatible at common law. x x x.
xxxx
While Section 7, Article IX-B of the 1987 Constitution
applies in general to all elective and appointive
officials, Section 13, Article VII, thereof applies in
particular to Cabinet secretaries, undersecretaries
and assistant secretaries. In the Resolution in Civil
Liberties Union v. Executive Secretary, this Court
already clarified the scope of the prohibition provided
in Section 13, Article VII of the 1987 Constitution.
Citing the case of US v. Mouat, it specifically identified
the persons who are affected by this prohibition as
secretaries, undersecretaries and assistant
secretaries; and categorically excluded public officers
who merely have the rank of secretary,
undersecretary or assistant secretary.
Another point of clarification raised by the Solicitor
General refers to the persons affected by the
constitutional prohibition. The persons cited in the
constitutional provision are the "Members of the
Cabinet, their deputies and assistants." These terms
must be given their common and general acceptation
as referring to the heads of the executive
departments, their undersecretaries and assistant
secretaries. Public officials given the rank equivalent
to a Secretary, Undersecretary, or Assistant
Secretary are not covered by the prohibition, nor is
the Solicitor General affected thereby. (Italics
supplied).
It is clear from the foregoing that the strict prohibition
under Section 13, Article VII of the 1987 Constitution
is not applicable to the PCGG Chairman nor to the
CPLC, as neither of them is a secretary,
undersecretary, nor an assistant secretary, even if the
former may have the same rank as the latter
positions.
It must be emphasized, however, that despite the
non-applicability of Section 13, Article VII of the 1987
Constitution to respondent Elma, he remains covered
by the general prohibition under Section 7, Article IX-
B and his appointments must still comply with the
standard of compatibility of officers laid down therein;
failing which, his appointments are hereby
pronounced in violation of the Constitution.47
Clearly, the primary functions of the Office of the
Solicitor General are not related or necessary to the
primary functions of the Department of Justice.
Considering that the nature and duties of the two
offices are such as to render it improper, from
considerations of public policy, for one person to
retain both,48 an incompatibility between the offices
exists, further warranting the declaration of Agra’s
designation as the Acting Secretary of Justice,
concurrently with his designation as the Acting
Solicitor General, to be void for being in violation of
the express provisions of the Constitution.
3.
Effect of declaration of unconstitutionality of
Agra’s concurrent appointment; the de
facto  officer doctrine
In view of the application of the stricter prohibition
under Section 13, supra, Agra did not validly hold the
position of Acting Secretary of Justice concurrently
with his holding of the position of Acting Solicitor
General. Accordingly, he was not to be considered as
a de jure officer for the entire period of his tenure as
the Acting Secretary of Justice. A de jure officer is
one who is deemed, in all respects, legally appointed
and qualified and whose term of office has not
expired.49
That notwithstanding, Agra was a de facto officer
during his tenure as Acting Secretary of Justice.
In Civil Liberties Union v. Executive Secretary,50 the
Court said:
During their tenure in the questioned positions,
respondents may be considered de facto  officers and
as such entitled to emoluments for actual services
rendered. It has been held that "in cases where there
is no de jure, officer, a de facto  officer, who, in good
faith has had possession of the office and has
discharged the duties pertaining thereto, is legally
entitled to the emoluments of the office, and may in
an appropriate action recover the salary, fees and
other compensations attached to the office. This
doctrine is, undoubtedly, supported on equitable
grounds since it seems unjust that the public should
benefit by the services of an officer de facto and then
be freed from all liability to pay any one for such
services. Any per diem, allowances or other
emoluments received by the respondents by virtue of
actual services rendered in the questioned positions
may therefore be retained by them.
A de facto officer is one who derives his appointment
from one having colorable authority to appoint, if the
office is an appointive office, and whose appointment
is valid on its face.51 He may also be one who is in
possession of an office, and is discharging its duties
under color of authority, by which is meant authority
derived from an appointment, however irregular or
informal, so that the incumbent is not a mere
volunteer.52 Consequently, the acts of the de
facto  officer are just as valid for all purposes as those
of a de jure officer, in so far as the public or third
persons who are interested therein are concerned. 53
In order to be clear, therefore, the Court holds that all
official actions of Agra as a de facto Acting Secretary
of Justice, assuming that was his later designation,
were presumed valid, binding and effective as if he
was the officer legally appointed and qualified for the
office. 54 This clarification is necessary in order to
protect the sanctity of the dealings by the public with
persons whose ostensible authority emanates from
the State. 55 Agra's official actions covered by this
claritlcation extend to but are not limited to the
promulgation of resolutions on petitions for review
filed in the Department of Justice, and the issuance of
department orders, memoranda and circulars relative
to the prosecution of criminal cases.
WHEREFORE, the Comi GRANTS the petition
for certiorari and prohibition; ANNULS AND
VOIDS the designation of Hon. Alberto C. Agra as the
Acting Secretary of Justice in a concurrent capacity
with his position as the Acting Solicitor General for
being unconstitutional and violative of Section 13,
Article VII of the 1987 Constitution;
and DECLARES that l-Ion. Alberto C. Agra was a de
facto  officer during his tenure as Acting Secretary of
Justice.
No pronouncement on costs of suit.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice

G.R. Nos. L-68379-81 September 22, 1986
EVELIO B. JAVIER, petitioner, 
vs.
THE COMMISSION ON ELECTIONS, and ARTURO
F. PACIFICADOR, respondents.
Raul S. Roco and Lorna Patajo-Kapunan for
petitioner.
CRUZ, J.:
The new Solicitor General has moved to dismiss this
petition on the ground that as a result of supervening
events it has become moot and academic. It is not as
simple as that. Several lives have been lost in
connection with this case, including that of the
petitioner himself. The private respondent is now in
hiding. The purity of suffrage has been defiled and the
popular will scorned through a confabulation of those
in authority. This Court cannot keep silent in the face
of these terrible facts. The motion is denied.
The petitioner and the private respondent were
candidates in Antique for the Batasang Pambansa in
the May 1984 elections. The former appeared to
enjoy more popular support but the latter had the
advantage of being the nominee of the KBL with all its
perquisites of power. On May 13, 1984, the eve of the
elections, the bitter contest between the two came to
a head when several followers of the petitioner were
ambushed and killed, allegedly by the latter's men.
Seven suspects, including respondent Pacificador,
are now facing trial for these murders. The incident
naturally heightened tension in the province and
sharpened the climate of fear among the electorate.
Conceivably, it intimidated voters against supporting
the Opposition candidate or into supporting the
candidate of the ruling party.
It was in this atmosphere that the voting was held,
and the post-election developments were to run true
to form. Owing to what he claimed were attempts to
railroad the private respondent's proclamation, the
petitioner went to the Commission on Elections to
question the canvass of the election returns. His
complaints were dismissed and the private
respondent was proclaimed winner by the Second
Division of the said body. The petitioner thereupon
came to this Court, arguing that the proclamation was
void because made only by a division and not by the
Commission on Elections en banc as required by the
Constitution. Meanwhile, on the strength of his
proclamation, the private respondent took his oath as
a member of the Batasang Pambansa.
The case was still being considered by this Court
when on February 11, 1986, the petitioner was
gunned down in cold blood and in broad daylight. The
nation, already indignant over the obvious
manipulation of the presidential elections in favor of
Marcos, was revolted by the killing, which flaunted a
scornful disregard for the law by the assailants who
apparently believed they were above the law. This
ruthless murder was possibly one of the factors that
strengthened the cause of the Opposition in the
February revolution that toppled the Marcos regime
and installed the present government under President
Corazon C. Aquino.
The abolition of the Batasang Pambansa and the
disappearance of the office in dispute between the
petitioner and the private respondent-both of whom
have gone their separate ways-could be a convenient
justification for dismissing this case. But there are
larger issues involved that must be resolved now,
once and for all, not only to dispel the legal
ambiguities here raised. The more important purpose
is to manifest in the clearest possible terms that this
Court will not disregard and in effect condone wrong
on the simplistic and tolerant pretext that the case has
become moot and academic.
The Supreme Court is not only the highest arbiter of
legal questions but also the conscience of the
government. The citizen comes to us in quest of law
but we must also give him justice. The two are not
always the same. There are times when we cannot
grant the latter because the issue has been settled
and decision is no longer possible according to the
law. But there are also times when although the
dispute has disappeared, as in this case, it
nevertheless cries out to be resolved. Justice
demands that we act then, not only for the vindication
of the outraged right, though gone, but also for the
guidance of and as a restraint upon the future.
It is a notorious fact decried by many people and even
by the foreign press that elections during the period of
the Marcos dictatorship were in the main a
desecration of the right of suffrage. Vote-buying,
intimidation and violence, illegal listing of voters,
falsified returns, and other elections anomalies
misrepresented and vitiated the popular will and led to
the induction in office of persons who did not enjoy
the confidence of the sovereign electorate. Genuine
elections were a rarity. The price at times was human
lives. The rule was chicanery and irregularity, and on
all levels of the polls, from the barangay to the
presidential. This included the rigged plebiscites and
referenda that also elicited the derision and provoked
the resentments of the people.
Antique in 1984 hewed to the line and equaled if it did
not surpass the viciousness of elections in other
provinces dominated by the KBL. Terrorism was a
special feature, as demonstrated by the killings
previously mentioned, which victimized no less than
one of the main protagonists and implicated his rival
as a principal perpetrator. Opposition leaders were in
constant peril of their lives even as their supporters
were gripped with fear of violence at the hands of the
party in power.
What made the situation especially deplorable was
the apparently indifferent attitude of the Commission
on Elections toward the anomalies being committed. It
is a matter of record that the petitioner complained
against the terroristic acts of his opponents. All the
electoral body did was refer the matter to the Armed
Forces without taking a more active step as befitted
its constitutional role as the guardian of free, orderly
and honest elections. A more assertive stance could
have averted the Sibalom election eve massacre and
saved the lives of the nine victims of the tragedy.
Public confidence in the Commission on Elections
was practically nil because of its transparent bias in
favor of the administration. This prejudice left many
opposition candidates without recourse except only to
this Court.
Alleging serious anomalies in the conduct of the
elections and the canvass of the election returns, the
petitioner went to the Commission on Elections to
prevent the impending proclamation of his rival, the
private respondent herein. 1 Specifically, the petitioner
charged that the elections were marred by "massive
terrorism, intimidation, duress, vote-buying, fraud,
tampering and falsification of election returns under
duress, threat and intimidation, snatching of ballot
boxes perpetrated by the armed men of respondent
Pacificador." 2 Particular mention was made of the
municipalities of Caluya, Cabate, Tibiao, Barbaza,
Laua-an, and also of San Remigio, where the
petitioner claimed the election returns were not placed
in the ballot boxes but merely wrapped in cement
bags or Manila paper.
On May 18, 1984, the Second Division of the
Commission on Elections directed the provincial
board of canvassers of Antique to proceed with the
canvass but to suspend the proclamation of the
winning candidate until further orders.3 On June 7,
1984, the same Second Division ordered the board to
immediately convene and to proclaim the winner
without prejudice to the outcome of the case before
the Commission.4 On certiorari before this Court, the
proclamation made by the board of canvassers was
set aside as premature, having been made before the
lapse of the 5-day period of appeal, which the
petitioner had seasonably made. 5 Finally, on July 23,
1984, the Second Division promulgated the decision
now subject of this petition which inter alia proclaimed
Arturo F. Pacificador the elected assemblyman of the
province of Antique. 6
This decision was signed by Chairman Victoriano
Savellano and Commissioners Jaime Opinion and
Froilan M. Bacungan. Previously asked to inhibit
himself on the ground that he was a former law
partner of private respondent Pacificador, Opinion
had refused.7
The petitioner then came to this Court, asking us to
annul the said decision.
The core question in this case is one of jurisdiction, to
wit: Was the Second Division of the Commission on
Elections authorized to promulgate its decision of July
23, 1984, proclaiming the private respondent the
winner in the election?
The applicable provisions are found in Article XII-C,
Sections 2 and 3, of the 1973 Constitution.
Section 2 confers on the Commission on Elections the
power to:
(2) Be the sole judge of all contests relating to the
election, returns and qualifications of all member of
the Batasang Pambansa and elective provincial and
city officials.
Section 3 provides:
The Commission on Elections may sit  en banc or in
three divisions. All election cases may be heard and
decided by divisions except contests involving
members of the Batasang Pambansa, which shall be
heard and decided en banc. Unless otherwise
provided by law, all election cases shall be decided
within ninety days from the date of their submission
for decision.
While both invoking the above provisions, the
petitioner and the respondents have arrived at
opposite conclusions. The records are voluminous
and some of the pleadings are exhaustive and in part
even erudite. And well they might be, for the noble
profession of the law-despite all the canards that have
been flung against it-exerts all efforts and considers
all possible viewpoints in its earnest search of the
truth.
The petitioner complains that the Proclamation made
by the Second Division is invalid because all contests
involving the members of the Batasang Pambansa
come under the jurisdiction of the Commission on
Elections en banc. This is as it should be, he says, to
insure a more careful decision, considering the
importance of the offices involved. The respondents,
for their part, argue that only contests need to be
heard and decided en banc and all other cases can
be-in fact, should  be-filed with and decided only by
any of the three divisions.
The former Solicitor General makes much of this
argument and lays a plausible distinction between the
terms "contests" and "cases" to prove his
point. 8 Simply put, his contention is that the pre-
proclamation controversy between the petitioner and
the private respondent was not yet a contest at that
time and therefore could be validly heard by a mere
division of the Commission on Elections, consonant
with Section 3. The issue was at this stage still
administrative and so was resoluble by the
Commission under its power to administer all laws
relative to the conduct of elections,9 not its authority
as sole judge of the election contest.
A contest, according to him, should involve a
contention between the parties for the same office "in
which the contestant seeks not only to oust the
intruder but also to have himself inducted into the
office." 10 No proclamation had as yet been made
when the petition was filed and later decided. Hence,
since neither the petitioner nor the private respondent
had at that time assumed office, there was no
Member of the Batasang Pambansa from Antique
whose election, returns or qualifications could be
examined by the Commission on Elections en banc.
In providing that the Commission on Elections could
act in division when deciding election cases,
according to this theory, the Constitution was laying
down the general rule. The exception was the election
contest involving the members of the Batasang
Pambansa, which had to be heard and decided  en
banc. 11 The en banc requirement would apply only
from the time a candidate for the Batasang Pambansa
was proclaimed as winner, for it was only then that a
contest could be permitted under the law. All matters
arising before such time were, necessarily, subject to
decision only by division of the Commission as these
would come under the general heading of "election
cases."
As the Court sees it, the effect of this interpretation
would be to divide the jurisdiction of the Commission
on Elections into two, viz.: (1) over matters
arising before the proclamation, which should be
heard and decided by division in the exercise of its
administrative power; and (2) over matters
arising after the proclamation, which could be heard
and decided only en banc in the exercise of its judicial
power. Stated otherwise, the Commission as a whole
could not act as sole judge as long as one of its
divisions was hearing a pre-proclamation matter
affecting the candidates for the Batasang Pambansa
because there was as yet no contest; or to put it still
another way, the Commission en banc could not do
what one of its divisions was competent to do, i.e.,
decide a pre-proclamation controversy. Moreover, a
mere division of the Commission on Elections could
hear and decide, save only those involving the
election, returns and qualifications of the members of
the Batasang Pambansa, all cases involving elective
provincial and city officials from start to
finish, including pre-proclamation controversies and
up to the election protest. In doing so, it would
exercise first administrative and then judicial powers.
But in the case of the Commission en banc, its
jurisdiction would begin  only after the proclamation
was made and a contest was filed  and not at any time
and on any matter before that, and always in the
exercise only of judicial power.
This interpretation would give to the part more powers
than were enjoyed by the whole, granting to the
division while denying to the banc. We do not think
this was the intention of the Constitution. The framers
could not have intended such an irrational rule.
We believe that in making the Commission on
Elections the sole judge of all contests involving the
election, returns and qualifications of the members of
the Batasang Pambansa and elective provincial and
city officials, the Constitution intended to give it full
authority to hear and decide these cases from
beginning to end and on all matters related thereto,
including those arising before the proclamation of the
winners.
It is worth observing that the special procedure for the
settlement of what are now called "pre-proclamation
controversies" is a relatively recent innovation in our
laws, having been introduced only in 1978, through
P.D. No. 1296, otherwise known as the 1978 Election
Code. Section 175 thereof provided:
Sec. 175. Suspension and annulment of
proclamation.-The Commission shall be the sole
judge of all pre-proclamation controversies and any of
its decisions, orders or rulings shall be final and
executory. It may, motu proprio or upon written
petition, and after due notice and hearing order the
suspension of the proclamation of a candidate-elect
or annul any proclamation, if one has been made, on
any of the grounds mentioned in Sections 172, 173
and 174 thereof.
Before that time all proceedings affecting the election,
returns and qualifications of public officers came
under the complete jurisdiction of the competent court
or tribunal from beginning to end and in the exercise
of judicial power only. It therefore could not have been
the intention of the framers in 1935, when the
Commonwealth Charter was adopted, and even in
1973, when the past Constitution was imposed, to
divide the electoral process into the pre-proclamation
stage and the post-proclamation stage and to provide
for a separate jurisdiction for each stage, considering
the first administrative and the second judicial.
Besides, the term "contest" as it was understood at
the time Article XII-C. Section 2(2) was incorporated
in the 1973 Constitution did not follow the strict
definition of a contention between the parties for the
same office. Under the Election Code of 1971, which
presumably was taken into consideration when the
1973 Constitution was being drafted, election contests
included the quo warranto petition that could be filed
by any voter on the ground of disloyalty or ineligibility
of the contestee although such voter was himself not
claiming the office involved. 12
The word "contests" should not be given a restrictive
meaning; on the contrary, it should receive the widest
possible scope conformably to the rule that the words
used in the Constitution should be interpreted
liberally. As employed in the 1973 Constitution, the
term should be understood as referring to any matter
involving the title or claim of title to an elective office,
made before or after proclamation of the winner,
whether or not the contestant is claiming the office in
dispute. Needless to stress, the term should be given
a consistent meaning and understood in the same
sense under both Section 2(2) and Section 3 of Article
XII-C of the Constitution.
The phrase "election, returns and qualifications"
should be interpreted in its totality as referring to all
matters affecting the validity of the contestee's title.
But if it is necessary to specify, we can say that
"election" referred to the conduct of the polls,
including the listing of voters, the holding of the
electoral campaign, and the casting and counting of
the votes; "returns" to the canvass of the returns and
the proclamation of the winners, including questions
concerning the composition of the board of
canvassers and the authenticity of the election returns
and "qualifications" to matters that could be raised in
a  quo warranto proceeding against the proclaimed
winner, such as his disloyalty or ineligibility or the
inadequacy of his certificate of candidacy.
All these came under the exclusive jurisdiction of the
Commission on Elections insofar as they applied to
the members of the defunct Batasang Pambansa and,
under Article XII-C, Section 3, of the 1973
Constitution, could be heard and decided by it only en
banc.
We interpret "cases" as the generic term denoting the
actions that might be heard and decided by the
Commission on Elections, only by division as a
general rule except where the case was a "contest"
involving members of the Batasang Pambansa, which
had to be heard and decided en banc.
As correctly observed by the petitioner, the purpose of
Section 3 in requiring that cases involving members of
the Batasang Pambansa be heard and decided by the
Commission en banc was to insure the most careful
consideration of such cases. Obviously, that objective
could not be achieved if the Commission could act en
banc only after the proclamation had been made, for
it might then be too late already. We are all-too-
familiar with the grab-the-proclamation-and-delay-the-
protest strategy of many unscrupulous candidates
which has resulted in the frustration of the popular will
and the virtual defeat of the real winners in the
election. The respondent's theory would make this
gambit possible for the pre- proclamation
proceedings, being summary in nature, could be
hastily decided by only three members in division,
without the care and deliberation that would have
otherwise been observed by the Commission en
banc.
After that, the delay. The Commission  en banc might
then no longer be able to rectify in time the
proclamation summarily and not very judiciously
made by the division. While in the end the protestant
might be sustained, he might find himself with only a
Phyrric victory because the term of his office would
have already expired.
It may be argued that in conferring the initial power to
decide the pre- proclamation question upon the
division, the Constitution did not intend to prevent the
Commission en banc from exercising the power
directly, on the theory that the greater power
embraces the lesser. It could if it wanted to but then it
could also allow the division to act for it. That
argument would militate against the purpose of the
provision, which precisely limited all questions
affecting the election contest, as distinguished from
election cases in general, to the jurisdiction of the
Commission en banc as sole judge thereof. "Sole
judge" excluded not only all other tribunals but also
and even the division of the Commission A decision
made on the contest by less than the Commission en
banc would not meet the exacting standard of care
and deliberation ordained by the Constitution
Incidentally, in making the Commission the "sole
judge" of pre- proclamation controversies in Section
175, supra, the law was obviously referring to the
body sitting en banc. In fact, the pre-proclamation
controversies involved in Aratuc vs. Commission on
Elections, 13 where the said provision was applied,
were heard and decided en banc.
Another matter deserving the highest consideration of
this Court but accorded cavalier attention by the
respondent Commission on Elections is due process
of law, that ancient guaranty of justice and fair play
which is the hallmark of the free society.
Commissioner Opinion ignored it. Asked to inhibit
himself on the ground that he was formerly a law
partner of the private respondent, he obstinately
insisted on participating in the case, denying he was
biased. 14
Given the general attitude of the Commission on
Elections toward the party in power at the time, and
the particular relationship between Commissioner
Opinion and MP Pacificador, one could not be at least
apprehensive, if not certain, that the decision of the
body would be adverse to the petitioner. As in fact it
was. Commissioner Opinion's refusal to inhibit himself
and his objection to the transfer of the case to another
division cannot be justified by any criterion of
propriety. His conduct on this matter belied his
wounded protestations of innocence and proved the
motives of the Second Division when it rendered its
decision.
This Court has repeatedly and consistently demanded
"the cold neutrality of an impartial judge" as the
indispensable imperative of due process. 15 To bolster
that requirement, we have held that the judge must
not only be impartial but must also appear to be
impartial as an added assurance to the parties that
his decision will be just.16 The litigants are entitled to
no less than that. They should be sure that when their
rights are violated they can go to a judge who shall
give them justice. They must trust the judge,
otherwise they will not go to him at all. They must
believe in his sense of fairness, otherwise they will not
seek his judgment. Without such confidence, there
would be no point in invoking his action for the justice
they expect.
Due process is intended to insure that confidence by
requiring compliance with what Justice Frankfurter
calls the rudiments of fair play. Fair play cans for
equal justice. There cannot be equal justice where a
suitor approaches a court already committed to the
other party and with a judgment already made and
waiting only to be formalized after the litigants shall
have undergone the charade of a formal hearing.
Judicial (and also extra-judicial) proceedings are not
orchestrated plays in which the parties are supposed
to make the motions and reach the denouement
according to a prepared script. There is no writer to
foreordain the ending. The judge will reach his
conclusions only after all the evidence is in and all the
arguments are filed, on the basis of the established
facts and the pertinent law.
The relationship of the judge with one of the parties
may color the facts and distort the law to the prejudice
of a just decision. Where this is probable or even only
posssible, due process demands that the judge inhibit
himself, if only out of a sense of delicadeza. For like
Caesar's wife, he must be above suspicion.
Commissioner Opinion, being a lawyer, should have
recognized his duty and abided by this well-known
rule of judicial conduct. For refusing to do so, he
divested the Second Division of the necessary vote
for the questioned decision, assuming it could act,
and rendered the proceeding null and void. 17
Since this case began in 1984, many significant
developments have taken place, not the least
significant of which was the February revolution of
"people power" that dislodged the past regime and
ended well nigh twenty years of travail for this captive
nation. The petitioner is gone, felled by a hail of
bullets sprayed with deadly purpose by assassins
whose motive is yet to be disclosed. The private
respondent has disappeared with the "pomp of
power" he had before enjoyed. Even the Batasang
Pambansa itself has been abolished, "an iniquitous
vestige of the previous regime" discontinued by the
Freedom Constitution. It is so easy now, as has been
suggested not without reason, to send the recrds of
this case to the archives and say the case is finished
and the book is closed.
But not yet.
Let us first say these meager words in tribute to a
fallen hero who was struck down in the vigor of his
youth because he dared to speak against tyranny.
Where many kept a meekly silence for fear of
retaliation, and still others feigned and fawned in
hopes of safety and even reward, he chose to fight.
He was not afraid. Money did not tempt him. Threats
did not daunt him. Power did not awe him. His was a
singular and all-exacting obsession: the return of
freedom to his country. And though he fought not in
the barricades of war amid the sound and smoke of
shot and shell, he was a soldier nonetheless, fighting
valiantly for the liberties of his people against the
enemies of his race, unfortunately of his race too, who
would impose upon the land a perpetual night of dark
enslavement. He did not see the breaking of the
dawn, sad to say, but in a very real sense Evelio B.
Javier made that dawn draw nearer because he was,
like Saul and Jonathan, "swifter than eagles and
stronger than lions."
A year ago this Court received a letter which began: "I
am the sister of the late Justice Calixto Zaldivar. I am
the mother of Rhium Z. Sanchez, the grandmother of
Plaridel Sanchez IV and Aldrich Sanchez, the aunt of
Mamerta Zaldivar. I lost all four of them in the election
eve ambush in Antique last year." She pleaded, as so
did hundreds of others of her provincemates in
separate signed petitions sent us, for the early
resolution of that horrible crime, saying: "I am 82
years old now. I am sick. May I convey to you my
prayer in church and my plea to you, 'Before I die, I
would like to see justice to my son and grandsons.'
May I also add that the people of Antique have not
stopped praying that the true winner of the last
elections will be decided upon by the Supreme Court
soon."
That was a year ago and since then a new
government has taken over in the wake of the
February revolution. The despot has escaped, and
with him, let us pray, all the oppressions and
repressions of the past have also been banished
forever. A new spirit is now upon our land. A new
vision limns the horizon. Now we can look forward
with new hope that under the Constitution of the
future every Filipino shall be truly sovereign in his own
country, able to express his will through the pristine
ballow with only his conscience as his counsel.
This is not an impossible dream. Indeed, it is an
approachable goal. It can and will be won if we are
able at last, after our long ordeal, to say never again
to tyranny. If we can do this with courage and
conviction, then and only then, and not until then, can
we truly say that the case is finished and the book is
closed.
WHEREFORE, let it be spread in the records of this
case that were it not for the supervening events that
have legally rendered it moot and academic, this
petition would have been granted and the decision of
the Commission on Elections dated July 23, 1984, set
aside as violative of the Constitution.
SO ORDERED.

G.R. No. 133486           January 28, 2000
ABS-CBN BROADCASTING
CORPORATION, petitioner,  survey.
vs.
COMMISSION ON ELECTIONS, respondent.
PANGANIBAN, J.:
The holding of exit polls and the dissemination of their
results through mass media constitute an essential
part of the freedoms of speech and of the press.
Hence, the Comelec cannot ban them totally in the
guise of promoting clean, honest, orderly and credible
elections. Quite the contrary, exit polls — properly
conducted and publicized — can be vital tools in
eliminating the evils of election-fixing and fraud.
Narrowly tailored countermeasures may be
prescribed by the Comelec so as to minimize or
suppress the incidental problems in the conduct of
exit polls, without transgressing in any manner the
fundamental rights of our people.
The Case and the Facts
Before us is a Petition for Certiorari under Rule 65 of
the Rules of Court assailing Commission on Elections
(Comelec) en banc Resolution No. 98-14191 dated
April 21, 1998. In the said Resolution, the poll body
RESOLVED to approve the issuance of a restraining
order to stop ABS-CBN or any other groups, its
agents or representatives from conducting such exit
survey and to authorize the Honorable Chairman to
issue the same.
The Resolution was issued by the Comelec allegedly
upon "information from [a] reliable source that ABS-
CBN (Lopez Group) has prepared a project, with PR
groups, to conduct radio-TV coverage of the elections
. . . and to make [an] exit survey of the . . . vote during
the elections for national officials particularly for
President and Vice President, results of which shall
be [broadcast] immediately."2 The electoral body
believed that such project might conflict with the
official Comelec count, as well as the unofficial quick
count of the National Movement for Free Elections
(Namfrel). It also noted that it had not authorized or
deputized Petitioner ABS-CBN to undertake the exit
On May 9, 1998, this Court issued the Temporary
Restraining Order prayed for by petitioner. We
directed the Comelec to cease and desist, until further
orders, from implementing the assailed Resolution or
the restraining order issued pursuant thereto, if any.
In fact, the exit polls were actually conducted and
reported by media without any difficulty or problem.
The Issues
Petitioner raises this lone issue: "Whether or not the
Respondent Commission acted with grave abuse of
discretion amounting to a lack or excess of jurisdiction
when it approved the issuance of a restraining order
enjoining the petitioner or any [other group], its agents
or representatives from conducting exit polls during
the . . . May 11 elections."3
In his Memorandum,4 the solicitor general, in seeking
to dismiss the Petition, brings up additional issues: (1)
mootness and (2) prematurity, because of petitioner's
failure to seek a reconsideration of the assailed
Comelec Resolution.
The Court's Ruling
The Petition5 is meritorious.
Procedural Issues:
Mootness and Prematurity
The solicitor general contends that the petition is moot
and academic, because the May 11, 1998 election
has already been held and done with. Allegedly, there
is no longer any actual controversy before us.
The issue is not totally moot. While the assailed
Resolution referred specifically to the May 11, 1998
election, its implications on the people's fundamental
freedom of expression transcend the past election.
The holding of periodic elections is a basic feature of
our democratic government. By its very nature, exit
polling is tied up with elections. To set aside the
resolution of the issue now will only postpone a task
that could well crop up again in future elections.6
In any event, in Salonga v. Cruz Paño, the Court had
occasion to reiterate that it "also has the duty to
formulate guiding and controlling constitutional
principles, precepts, doctrines, or rules. It has the
symbolic function of educating bench and bar on the
extent of protection given by constitutional
guarantees."7 Since the fundamental freedoms of
speech and of the press are being invoked here, we
have resolved to settle, for the guidance of posterity,
whether they likewise protect the holding of exit polls
and the dissemination of data derived therefrom.
The solicitor general further contends that the Petition
should be dismissed for petitioner's failure to exhaust
available remedies before the issuing forum,
specifically the filing of a motion for reconsideration.
This Court, however, has ruled in the past that this
procedural requirement may be glossed over to
prevent a miscarriage of justice,8 when the issue
involves the principle of social justice or the protection
of labor,9 when the decision or resolution sought to be
set aside is a nullity,10 or when the need for relief is
extremely urgent and certiorari is the only adequate
and speedy remedy available.11
The instant Petition assails a Resolution issued by the
Comelec en banc on April 21, 1998, only twenty (20)
days before the election itself. Besides, the petitioner
got hold of a copy thereof only on May 4, 1998. Under
the circumstances, there was hardly enough
opportunity to move for a reconsideration and to
obtain a swift resolution in time or the May 11, 1998
elections. Moreover, not only is time of the essence;
the Petition involves transcendental constitutional
issues. Direct resort to this Court through a special
civil action for certiorari is therefore justified.
Main Issue:
Validity of Conducting Exit Polls
An exit poll is a species of electoral survey conducted
by qualified individuals or groups of individuals for the
purpose of determining the probable result of an
election by confidentially asking randomly selected
voters whom they have voted for, immediately after
they have officially cast their ballots. The results of the
survey are announced to the public, usually through
the mass media, to give an advance overview of how,
in the opinion of the polling individuals or
organizations, the electorate voted. In our electoral
history, exit polls had not been resorted to until the
recent May 11, 1998 elections.
In its Petition, ABS-CBN Broadcasting Corporation
maintains that it is a responsible member of the mass
media, committed to report balanced election-related
data, including "the exclusive results of Social
Weather Station (SWS) surveys conducted in fifteen
administrative regions."
It argues that the holding of exit polls and the
nationwide reporting their results are valid exercises
of the freedoms of speech and of the press. It submits
that, in precipitately and unqualifiedly restraining the
holding and the reporting of exit polls, the Comelec
gravely abused its discretion and grossly violated the
petitioner's constitutional rights.
Public respondent, on the other hand, vehemently
denies that, in issuing the assailed Resolution, it
gravely abused its discretion. It insists that the
issuance thereof was "pursuant to its constitutional
and statutory powers to promote a clean, honest,
orderly and credible May 11, 1998 elections"; and "to
protect, preserve and maintain the secrecy and
sanctity of the ballot." It contends that "the conduct of
exit surveys might unduly confuse and influence the
voters," and that the surveys were designed "to
condition the minds of people and cause confusion as
to who are the winners and the [losers] in the
election," which in turn may result in "violence and
anarchy."
Public respondent further argues that "exit surveys
indirectly violate the constitutional principle to
preserve the sanctity of the ballots," as the "voters are
lured to reveal the contents of ballots," in violation of
Section 2, Article V of the Constitution;12 and relevant
provisions of the Omnibus Election Code.13 It submits
that the constitutionally protected freedoms invoked
by petitioner "are not immune to regulation by the
State in the legitimate exercise of its police power,"
such as in the present case.
The solicitor general, in support of the public
respondent, adds that the exit polls pose a "clear and
present danger of destroying the credibility and
integrity of the electoral process," considering that
they are not supervised by any government agency
and can in general be manipulated easily. He insists
that these polls would sow confusion among the
voters and would undermine the official tabulation of
votes conducted by the Commission, as well as the
quick count undertaken by the Namfrel.
Admittedly, no law prohibits the holding and the
reporting of exit polls. The question can thus be more
narrowly defined: May the Comelec, in the exercise of
its powers, totally ban exit polls? In answering this
question, we need to review quickly our jurisprudence
on the freedoms of speech and of the press.
Nature and Scope of Freedoms of Speech and of the
Press
The freedom of expression is a fundamental principle
of our democratic government. It "is a 'preferred' right
and, therefore, stands on a higher level than
substantive economic or other liberties. . . . [T]his
must be so because the lessons of history, both
political and legal, illustrate that freedom of thought
and speech is the indispensable condition of nearly
every other form of freedom."14
Our Constitution clearly mandates that no law shall be
passed abridging the freedom of speech or of the
press.15 In the landmark case Gonzales
v. Comelec,16 this Court enunciated that at the very
least, free speech and a free press consist of the
liberty to discuss publicly and truthfully any matter of
public interest without prior restraint.
The freedom of expression is a means of assuring
individual self-fulfillment, of attaining the truth, of
securing participation by the people in social and
political decision-making, and of maintaining the
balance between stability and change.17 It represents
a profound commitment to the principle that debates
on public issues should be uninhibited, robust, and
wide open.18 It means more than the right to approve
existing political beliefs or economic arrangements, to
lend support to official measures, or to take refuge in
the existing climate of opinion on any of public
consequence. And paraphrasing the eminent Justice
Oliver Wendell Holmes,19 we stress that the freedom
encompasses the thought we hate, no less than the
thought we agree with.
Limitations
The realities of life in a complex society, however,
preclude an absolute exercise of the freedoms of
speech and of the press. Such freedoms could not
remain unfettered and unrestrained at all times and
under all circumstances.20They are not immune to
regulation by the State in the exercise of its police
power.21 While the liberty to think is absolute, the
power to express such thought in words and deeds
has limitations.
In Cabansag v. Fernandez22 this Court had occasion
to discuss two theoretical test in determining the
validity of restrictions to such freedoms, as follows:
These are the "clear and present danger" rule and the
"dangerous tendency" rule. The first, as interpreted in
a number of cases, means that the evil consequence
of the comment or utterance must be "extremely
serious and the degree of imminence extremely high"
before the utterance can be punished. The danger to
be guarded against is the "substantive evil" sought to
be prevented. . . .23
The "dangerous tendency" rule, on the other
hand, . . . may be epitomized as follows: if the words
uttered create a dangerous tendency which the state
has a right to prevent, then such words are
punishable. It is not necessary that some definite or
immediate acts of force, violence, or unlawfulness be
advocated. It is sufficient that such acts be advocated
in general terms. Nor is it necessary that the language
used be reasonably calculated to incite persons to
acts of force, violence, or unlawfulness. It is sufficient
if the natural tendency and probable effect of the
utterance be to bring about the substantive evil which
the legislative body seeks to prevent.24
Unquestionably, this Court adheres to the "clear and
present danger" test. It implicitly did in its earlier
decisions in Primicias v. Fugoso25 and American Bible
Society v. City of Manila;26 as well as in later
ones, Vera v. Arca,27 Navarro v. Villegas,28 Imbong
v. Ferrer,29 Blo Umpar Adiong v. Comelec30 and, more
recently, in Iglesia ni Cristo v. MTRCB.31In setting the
standard or test for the "clear and present danger"
doctrine, the Court echoed the words of Justice
Holmes: "The question in every case is whether the
words used are used in such circumstances and are
of such a nature as to create a clear and present
danger that they will bring about the substantive evils
that Congress has a right to prevent. It is a question
of proximity and degree."32
A limitation on the freedom of expression may be
justified only by a danger of such substantive
character that the state has a right to prevent. Unlike
in the "dangerous tendency" doctrine, the danger
must not only be clear but also present. "Present"
refers to the time element; the danger must not only
be probable but very likely to be inevitable.33The evil
sought to be avoided must be so substantive as to
justify a clamp over one's mouth or a restraint of a
writing instrument.34
Justification for a Restriction
Doctrinally, the Court has always ruled in favor of the
freedom of expression, and any restriction is treated
an exemption. The power to exercise prior restraint is
not to be presumed; rather the presumption is against
its validity.35 And it is respondent's burden to
overthrow such presumption. Any act that restrains
speech should be greeted with furrowed brows,36 so it
has been said.
To justify a restriction, the promotion of a substantial
government interest must be clearly shown.37 Thus:
A government regulation is sufficiently justified if it is
within the constitutional power of the government, if it
furthers an important or substantial government
interest; if the governmental interest is unrelated to
the suppression of free expression; and if the
incidental restriction on alleged First Amendment
freedoms is no greater than is essential to the
furtherance of that interest.38
Hence, even though the government's purposes are
legitimate and substantial, they cannot be pursued by
means that broadly stifle fundamental personal
liberties, when the end can be more narrowly
achieved.39
The freedoms of speech and of the press should all
the more be upheld when what is sought to be
curtailed is the dissemination of information meant. to
add meaning to the equally vital right of suffrage.40 We
cannot support any ruling or order "the effect of which
would be to nullify so vital a constitutional right as free
speech."41 When faced with borderline situations in
which the freedom of a candidate or a party to speak
or the freedom of the electorate to know is invoked
against actions allegedly made to assure clean and
free elections, this Court shall lean in favor of
freedom. For in the ultimate analysis, the freedom of
the citizen and the State's power to regulate should
not be antagonistic. There can be no free and honest
elections if, in the efforts to maintain them, the
freedom to speak and the right to know are unduly
curtailed.42
True, the government has a stake in protecting the
fundamental right to vote by providing voting places
that are safe and accessible. It has the duty to secure
the secrecy of the ballot and to preserve the sanctity
and the integrity of the electoral process. However, in
order to justify a restriction of the people's freedoms
of speech and of the press, the state's responsibility
of ensuring orderly voting must far outweigh them.
These freedoms have additional importance, because
exit polls generate important research data which may
be used to study influencing factors and trends in
voting behavior. An absolute prohibition would thus be
unreasonably restrictive, because it effectively
prevents the use of exit poll data not only for election-
day projections, but also for long-term research.43
Comelec Ban on Exit Polling
In the case at bar, the Comelec justifies its assailed
Resolution as having been issued pursuant to its
constitutional mandate to ensure a free, orderly,
honest, credible and peaceful election. While
admitting that "the conduct of an exit poll and the
broadcast of the results thereof [are] . . . an exercise
of press freedom," it argues that "[p]ress freedom may
be curtailed if the exercise thereof creates a clear and
present danger to the community or it has a
dangerous tendency." It then contends that "an exit
poll has the tendency to sow confusion considering
the randomness of selecting interviewees, which
further make[s] the exit poll highly unreliable. The
probability that the results of such exit poll may not be
in harmony with the official count made by the
Comelec . . . is ever present. In other words, the exit
poll has a clear and present danger of destroying the
credibility and integrity of the electoral process."
Such arguments are purely speculative and clearly
untenable. First, by the very nature of a survey, the
interviewees or participants are selected at random,
so that the results will as much as possible be
representative or reflective of the general sentiment or
view of the community or group polled. Second, the
survey result is not meant to replace or be at par with
the official Comelec count. It consists merely of the
opinion of the polling group as to who the electorate in
general has probably voted for, based on the limited
data gathered from polled individuals. Finally, not at
stake here are the credibility and the integrity of the
elections, which are exercises that are separate and
independent from the exit polls. The holding and the
reporting of the results of exit polls cannot undermine
those of the elections, since the former is only part of
the latter. If at all, the outcome of one can only be
indicative of the other.
The Comelec's concern with the possible
noncommunicative effect of exit polls — disorder and
confusion in the voting centers — does not justify a
total ban on them. Undoubtedly, the assailed
Comelec Resolution is too broad, since its application
is without qualification as to whether the polling is
disruptive or not.44 Concededly, the Omnibus Election
Code prohibits disruptive behavior around the voting
centers.45 There is no showing, however, that exit
polls or the means to interview voters cause chaos in
voting centers. Neither has any evidence been
presented proving that the presence of exit poll
reporters near an election precinct tends to create
disorder or confuse the voters.
Moreover, the prohibition incidentally prevents the
collection of exit poll data and their use for any
purpose. The valuable information and ideas that
could be derived from them, based on the voters'
answer to the survey questions will forever remain
unknown and unexplored. Unless the ban is
restrained, candidates, researchers, social scientists
and the electorate in general would be deprived of
studies on the impact of current events and of
election-day and other factors on voters'
choices.1âwphi1.nêt
In Daily Herald Co. v. Munro,46 the US Supreme Court
held that a statute, one of the purposes of which was
to prevent the broadcasting of early returns, was
unconstitutional because such purpose was
impermissible, and the statute was neither narrowly
tailored to advance a state interest nor the least
restrictive alternative. Furthermore, the general
interest of the State in insulating voters from outside
influences is insufficient to justify speech regulation.
Just as curtailing election-day broadcasts and
newspaper editorials for the reason that they might
indirectly affect the voters' choices is impermissible,
so is impermissible, so is regulating speech via an
exit poll restriction.47
The absolute ban imposed by the Comelec cannot,
therefore, be justified. It does not leave open any
alternative channel of communication to gather the
type of information obtained through exit polling. On
the other hand, there are other valid and reasonable
ways and means to achieve the Comelec end of
avoiding or minimizing disorder and confusion that
may be brought about by exit surveys.
For instance, a specific limited area for conducting
exit polls may be designated. Only professional
survey groups may be allowed to conduct the same.
Pollsters may be kept at a reasonable distance from
the voting center. They may be required to explain to
voters that the latter may refuse interviewed, and that
the interview is not part of the official balloting
process. The pollsters may further be required to
wear distinctive clothing that would show they are not
election officials.48 Additionally, they may be required
to undertake an information campaign on the nature
of the exercise and the results to be obtained
therefrom. These measures, together with a general
prohibition of disruptive behavior, could ensure a
clean, safe and orderly election.
For its part, petitioner ABS-CBN explains its survey
methodology as follows: (1) communities are
randomly selected in each province; (2) residences to
be polled in such communities are also chosen at
random; (3) only individuals who have already voted,
as shown by the indelible ink on their fingers, are
interviewed; (4) the interviewers use no cameras of
any sort; (5) the poll results are released to the public
only on the day after the elections.49 These
precautions, together with the possible measures
earlier stated, may be undertaken to abate the
Comelec's fear, without consequently and unjustifiably
stilling the people's voice.
With the foregoing premises, we conclude that the
interest of the state in reducing disruption is
outweighed by the drastic abridgment of the
constitutionally guaranteed rights of the media and
the electorate. Quite the contrary, instead of
disrupting elections, exit polls — properly conducted
and publicized — can be vital tools for the holding of
honest, orderly, peaceful and credible elections; and
for the elimination of election-fixing, fraud and other
electoral ills.
Violation of Ballot Secrecy
The contention of public respondent that exit polls
indirectly transgress the sanctity and the secrecy of
the ballot is off-tangent to the real issue. Petitioner
does not seek access to the ballots cast by the voters.
The ballot system of voting is not at issue here.
The reason behind the principle of ballot secrecy is to
avoid vote buying through voter identification. Thus,
voters are prohibited from exhibiting the contents of
their official ballots to other persons, from making
copies thereof, or from putting distinguishing marks
thereon so as to be identified. Also proscribed is
finding out the contents of the ballots cast by
particular voters or disclosing those of disabled or
illiterate voters who have been assisted. Clearly, what
is forbidden is the association of voters with their
respective votes, for the purpose of assuring that the
votes have been cast in accordance with the
instructions of a third party. This result cannot,
however, be achieved merely through the voters'
verbal and confidential disclosure to a pollster of
whom they have voted for.
In exit polls, the contents of the official ballot are not
actually exposed. Furthermore, the revelation of
whom an elector has voted for is not compulsory, but
voluntary. Voters may also choose not to reveal their
identities. Indeed, narrowly tailored countermeasures
may be prescribed by the Comelec, so as to minimize
or suppress incidental problems in the conduct of exit
polls, without transgressing the fundamental rights of
our people.
WHEREFORE, the Petition is GRANTED, and the
Temporary Restraining Order issued by the Court on
May 9, 1998 is made PERMANENT. Assailed Minute
Resolution No. 98-1419 issued by the Comelec en
banc on April 21, 1998 is hereby NULLIFIED and SET
ASIDE. No costs.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Quisumbing,
Purisima, Buena, Gonzaga-Reyes, Ynares-Santiago
and De Leon, Jr., JJ., concur.
Kapunan, J., see dissenting opinion.
Vitug, J., please see separate opinion.
Melo and Mendoza, JJ., are join the separate opinion
of Justice Vitug.
Pardo, J., took no part.
Separate Opinions
KAPUNAN, J., dissenting opinion;
I share the view of Justice Jose C. Vitug in his
Separate Opinion that the case is technically moot.
Since the Comelec has not declared exit polls to be
illegal and neither did the petitioner present its
methodology or system of conducting the exit polls to
the poll body, the nullification of the Comelec's
questioned resolution is bereft of empirical basis. The
decision of this Court constitutes a mere academic
exercise in view of the premature nature of the issues
and the lack of "concreteness" of the controversy. I
wish however, to express my thoughts on a few
material points.
The majority opinion cites the general rules that any
restrictions to freedom of expression would be
burdened with a presumption of invalidity and should
be greeted with "furrowed brews."1 While this has
been the traditional approach, this rules does not
apply where, as in this case, the Comelec exercised
its Constitutional functions of securing the secrecy
and sanctity of the ballots and ensuring the integrity of
the elections. Thus, Mr. Justice Feliciano in National
Press (NPC) v. Comelec2 wrote:
The technical effect of Article IX (C) (4) of the
Constitution may be seen to be that no presumption
of invalidity arises in respect of supervisory or
regulatory authority on the part of the COMELEC for
the purpose of securing equal opportunity among
candidates for political office, although such
supervision or regulation may result in some limitation
of the right of free speech and free press. For
supervision or regulation of the operations of media
enterprises is scarcely conceivable without such
accompanying limitation. Thus, the applicable rule is
the general, time honored one — that a statute is
presumed to be constitutional and that the party
asserting its unconstitutionality must discharge the
burden of clearly and convincingly proving that
assertion.3
The NPC decision holds that if the right to free speech
collides with a norm of constitutional stature,4 the rule
on heavy presumption of invalidity does not apply.
Our Constitution mandates the Comelec to enforce
and administer laws and regulations relative to the
conduct of elections and to secure the secrecy and
sanctity of the ballots to ensure orderly, honest,
credible and peaceful elections.5 This Constitutional
provision effectively displaces the general
presumption of invalidity in favor of the presumption
that Comelec acted in the exercise of its
constitutionally mandated powers. If no presumption
of invalidity arises, I see no occasion for the
application of the "clear and present danger test." As
this Court, through Mr. Justice Mendoza, succinctly
observed:
. . . the clear-and-present danger test is not, however,
a sovereign remedy for all free speech problems. As
has been pointed out by a thoughtful student of
constitutional law, it was originally formulated for the
criminal law and only later appropriated for free
speech cases. For the criminal law is necessarily
concerned with the line at which innocent preparation
ends and guilty conspiracy or attempt begins. Clearly,
it is inappropriate as a test for determining the
constitutional validity of law which, like §11(b) of R.A.
No. 6646, are not concerned with the content of
political ads but only with their incidents. To apply the
clear-and-present danger test to such regulatory
measures would be like using a sledgehammer to
drive a nail when a regular hammer is all that is
needed.6
On the matter of methodology in conducting polls,
petitioner gave assurance that the exit poll results will
only be made public a day after the elections, in order
to allay fears of "trending," "bandwagon-effect" or
disruption. This offers little comfort considering the
state of our country's electoral system. Unlike in other
countries where voting and counting are
computerized, our elections are characterized by
snail-paced counting. It is not infrequent that
postponement, failure or annulment of elections occur
in some areas designated as election hot spots.7 Such
being the case, exit poll results made public after the
day of voting in the regular elections but before the
conduct of special elections in these areas may
potentially pose the danger of "trending,"
"bandwagon-effect" and disruption of elections.
In view of the foregoing discussion, I believe the
Comelec committed no abuse of discretion in issuing
the assailed temporary restraining order stopping
petitioner from conducting exit polls. I, therefore, vote
to DENY the petition.
VITUG, J., separate opinion;
The instant petition, now technically moot, presents
issues so significantly that a slights change of
circumstances can have a decisive effect on, and
possibly spell a difference in, the final outcome of the
case. I am not inclined to take the case in an
academic fashion and pass upon the views expressed
by either party in preemptive judgment.

While I understand what the  ponencia is saying quite

laudably, I also appreciate, upon the other hand, the
concern of the Commission on Elections, i.e., that the
conduct of exit polls can have some adverse effects
on the need to preserve the sanctity of the ballot. The
Commission performs an indispensable task of
ensuring free, honest, and orderly elections and of
guarding against any frustration of the true will of the
people. Expectedly, it utilizes all means available
within its power and authority to prevent the electoral
process from being manipulated and rendered an
absurdity. Like my colleagues, I greatly prize the
freedom of expression but, so also, I cherish no less
the right of the people to express their will by means
of the ballot. In any case, I must accept the reality that
the right to information and free speech is not
illimitable and immune from the valid exercise of an
ever demanding and pervasive police power. Whether
any kind of restraint should be upheld or declared
invalid in the proper balancing of interest is one that
must be resolved at any given moment, not on
perceived circumstances, but on prevailing facts.

Neither of the advocations proffered by the parties in

this instance, I believe, should be foreclosed by the
Court at this time.

I vote, therefore, to dismiss the petition on the

foregoing thesis.

G.R. No. 148208             December 15, 2004
CENTRAL BANK (now Bangko Sentral ng
Pilipinas) EMPLOYEES ASSOCIATION,
INC., petitioner,  Article II, Section 15(c) of R.A. No. 7653 provides:
vs.
BANGKO SENTRAL NG PILIPINAS and the
EXECUTIVE SECRETARY, respondents.
DECISION
PUNO, J.:
Can a provision of law, initially valid,
become subsequently unconstitutional, on the
ground that its continuedoperation would violate the
equal protection of the law? We hold that with the
passage of the subsequent laws amending the
charter of seven (7) other governmental financial
institutions (GFIs), the continued operation of the
last proviso of Section 15(c), Article II of Republic Act
(R.A.) No. 7653, constitutes invidious discrimination
on the 2,994 rank-and-file employees of the Bangko
Sentral ng Pilipinas (BSP).
I.
The Case
First the facts.
On July 3, 1993, R.A. No. 7653 (the New Central
Bank Act) took effect. It abolished the old Central
Bank of the Philippines, and created a new BSP.
On June 8, 2001, almost eight years after the
effectivity of R.A. No. 7653, petitioner Central Bank
(now BSP) Employees Association, Inc., filed a
petition for prohibition against BSP and the Executive
Secretary of the Office of the President, to restrain
respondents from further implementing the
last proviso in Section 15(c), Article II of R.A. No.
7653, on the ground that it is unconstitutional.
Section 15. Exercise of Authority - In the exercise of
its authority, the Monetary Board shall:
xxx       xxx       xxx
(c) establish a human resource management system
which shall govern the selection, hiring, appointment,
transfer, promotion, or dismissal of all personnel.
Such system shall aim to establish professionalism
and excellence at all levels of the Bangko Sentral in
accordance with sound principles of management.
A compensation structure, based on job evaluation
studies and wage surveys and subject to the Board's
approval, shall be instituted as an integral component
of the Bangko Sentral's human resource development
program: Provided, That the Monetary Board shall
make its own system conform as closely as possible
with the principles provided for under Republic Act
No. 6758 [Salary Standardization Act]. Provided,
however, That compensation and wage structure
of employees whose positions fall under salary
grade 19 and below shall be in accordance with
the rates prescribed under Republic Act No.
6758. [emphasis supplied]
The thrust of petitioner's challenge is that the
above proviso makes
an unconstitutional cut between two classes of
employees in the BSP, viz: (1) the BSP officers or
those exempted from the coverage of the Salary
Standardization Law (SSL) (exempt class); and (2)
the rank-and-file (Salary Grade [SG] 19 and below),
or those not exempted from the coverage of the SSL
(non-exempt class). It is contended that this
classification is "a classic case of class legislation,"
allegedly not based on substantial distinctions which
make real differences, but solely on the SG of the
BSP personnel's position. Petitioner also claims that it
is not germane to the purposes of Section 15(c),
Article II of R.A. No. 7653, the most important of
which is to establish professionalism and
excellence at all levels in the BSP.1 Petitioner offers
the following sub-set of arguments:
a. the legislative history of R.A. No. 7653 shows that
the questioned proviso does not appear in the original
and amended versions of House Bill No. 7037, nor in
the original version of Senate Bill No. 1235; 2
b. subjecting the compensation of the BSP rank-and-
file employees to the rate prescribed by the SSL
actually defeats the purpose of the law3 of establishing
professionalism and excellence at all levels in the
BSP; 4(emphasis supplied)
c. the assailed proviso was the product of
amendments introduced during the deliberation of
Senate Bill No. 1235, without showing its relevance to
the objectives of the law, and even admitted by one
senator as discriminatory against low-salaried
employees of the BSP;5
d. GSIS, LBP, DBP and SSS personnel are all
exempted from the coverage of the SSL; thus within
the class of rank-and-file personnel of government
financial institutions (GFIs), the BSP rank-and-file are
also discriminated upon;6 and
e. the assailed proviso has caused the demoralization
among the BSP rank-and-file and resulted in the
gross disparity between their compensation and that
of the BSP officers'.7
In sum, petitioner posits that the classification is not
reasonable but arbitrary and capricious, and violates
the equal protection clause of the
Constitution.8 Petitioner also stresses: (a) that R.A.
No. 7653 has a separability clause, which will allow
the declaration of the unconstitutionality of
the proviso in question without affecting the other
provisions; and (b) the urgency and propriety of the
petition, as some 2,994 BSP rank-and-file
employees have been prejudiced since 1994 when
the proviso was implemented. Petitioner concludes
that: (1) since the inequitable proviso has no force
and effect of law, respondents' implementation of
such amounts to lack of jurisdiction; and (2) it has no
appeal nor any other plain, speedy and adequate
remedy in the ordinary course except through this
petition for prohibition, which this Court should take
cognizance of, considering the transcendental
importance of the legal issue involved.9
Respondent BSP, in its comment,10 contends that the
provision does not violate the equal protection clause
and can stand the constitutional test, provided it is
construed in harmony with other provisions of the
same law, such as "fiscal and administrative
autonomy of BSP," and the mandate of the Monetary
Board to "establish professionalism and excellence at
all levels in accordance with sound principles of
management."
The Solicitor General, on behalf of respondent
Executive Secretary, also defends the validity of the
provision. Quite simplistically, he argues that the
classification is based on actual and real
differentiation, even as it adheres to the enunciated
policy of R.A. No. 7653 to establish professionalism
and excellence within the BSP subject to prevailing
laws and policies of the national government.11
II.
Issue
Thus, the sole - albeit significant - issue to be
resolved in this case is whether the last paragraph of
Section 15(c), Article II of R.A. No. 7653, runs afoul of
the constitutional mandate that "No person shall be. . .
denied the equal protection of the laws."12
III.
Ruling
A. UNDER THE PRESENT STANDARDS OF
EQUAL PROTECTION,
SECTION 15(c), ARTICLE II OF R.A. NO. 7653 IS
VALID.
Jurisprudential standards for equal protection
challenges indubitably show that the classification
created by the questioned proviso, on its face and in
its operation, bears no constitutional infirmities.
It is settled in constitutional law that the "equal
protection" clause does not prevent the Legislature
from establishing classes of individuals or objects
upon which different rules shall operate - so long as
the classification is not unreasonable. As held
in Victoriano v. Elizalde Rope Workers'
Union,13 and reiterated in a long line of cases:14
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 state. 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. (citations omitted)
Congress is allowed a wide leeway in providing for a
valid classification.15 The equal protection clause is
not infringed by legislation which applies only to those
persons falling within a specified class.16 If the
groupings are characterized by substantial
distinctions that make real differences, one class may
be treated and regulated differently from
another.17 The classification must also be germane to
the purpose of the law and must apply to all those
belonging to the same class.18
In the case at bar, it is clear in the legislative
deliberations that the exemption of officers (SG 20
and above) from the SSL was intended to address the
BSP's lack of competitiveness in terms of attracting
competent officers and executives. It was not
intended to discriminate against the rank-and-file. If
the end-result did in fact lead to a disparity of
treatment between the officers and the rank-and-file in
terms of salaries and benefits, the discrimination or
distinction has a rational basis and is not palpably,
purely, and entirely arbitrary in the legislative sense. 19
That the provision was a product of amendments
introduced during the deliberation of the Senate Bill
does not detract from its validity. As early as 1947
and reiterated in subsequent cases,20 this Court has
subscribed to the conclusiveness of an enrolled bill to
refuse invalidating a provision of law, on the ground
that the bill from which it originated contained no such
provision and was merely inserted by the bicameral
conference committee of both Houses.
Moreover, it is a fundamental and familiar teaching
that all reasonable doubts should be resolved in favor
of the constitutionality of a statute.21 An act of the
legislature, approved by the executive, is presumed to
be within constitutional limitations.22 To justify the
nullification of a law, there must be a clear and
unequivocal breach of the Constitution, not a doubtful
and equivocal breach.23
B. THE ENACTMENT, HOWEVER, OF
SUBSEQUENT LAWS -
EXEMPTING ALL OTHER RANK-AND-FILE
EMPLOYEES
OF GFIs FROM THE SSL - RENDERS THE
CONTINUED
APPLICATION OF THE CHALLENGED PROVISION
A VIOLATION OF THE EQUAL PROTECTION
CLAUSE.
While R.A. No. 7653 started as a valid measure well
within the legislature's power, we hold that
the enactment of subsequent laws exempting all
rank-and-file employees of other GFIs leeched all
validity out of the challenged proviso.
1. The concept of relative constitutionality.
The constitutionality of a statute cannot, in every
instance, be determined by a mere comparison of its
provisions with applicable provisions of the
Constitution, since the statute may be constitutionally
valid as applied to one set of facts and invalid in its
application to another.24
A statute valid at one time may become void at
another time because of altered
circumstances.25 Thus, if a statute in its practical
operation becomes arbitrary or confiscatory, its
validity, even though affirmed by a former
adjudication, is open to inquiry and investigation in the
light of changed conditions.26
Demonstrative of this doctrine is Vernon Park Realty
v. City of Mount Vernon,27 where the Court of
Appeals of New York declared as unreasonable and
arbitrary a zoning ordinance which placed the
plaintiff's property in a residential district, although it
was located in the center of a business area. Later
amendments to the ordinance then prohibited the use
of the property except for parking and storage of
automobiles, and service station within a parking
area. The Court found the ordinance to constitute an
invasion of property rights which was contrary to
constitutional due process. It ruled:
While the common council has the unquestioned right
to enact zoning laws respecting the use of property in
accordance with a well-considered and
comprehensive plan designed to promote public
health, safety and general welfare, such power is
subject to the constitutional limitation that it may not
be exerted arbitrarily or unreasonably and this is so
whenever the zoning ordinance precludes the use of
the property for any purpose for which it is reasonably
adapted. By the same token, an ordinance valid
when adopted will nevertheless be stricken down
as invalid when, at a later time, its operation
under changed conditions proves
confiscatory such, for instance, as when the greater
part of its value is destroyed, for which the courts will
afford relief in an appropriate case.28 (citations
omitted, emphasis supplied)
In the Philippine setting, this Court declared the
continued enforcement of a valid law as
unconstitutional as a consequence of significant
changes in circumstances. Rutter v.
Esteban29 upheld the constitutionality of the
moratorium law - its enactment and operation being a
valid exercise by the State of its police power30 - but
also ruled that the continued enforcement of the
otherwise valid law would be unreasonable and
oppressive. It noted the subsequent changes in the
country's business, industry and agriculture. Thus, the
law was set aside because its continued operation
would be grossly discriminatory and lead to the
oppression of the creditors. The landmark ruling
states:31
The question now to be determined is, is the period
of eight (8) years which Republic Act No. 342 grants
to debtors of a monetary obligation contracted before
the last global war and who is a war sufferer with a
claim duly approved by the Philippine War Damage
Commission reasonable under the present
circumstances?
It should be noted that Republic Act No. 342 only
extends relief to debtors of prewar obligations who
suffered from the ravages of the last war and who
filed a claim for their losses with the Philippine War
Damage Commission. It is therein provided that said
obligation shall not be due and demandable for a
period of eight (8) years from and after settlement of
the claim filed by the debtor with said Commission.
The purpose of the law is to afford to prewar debtors
an opportunity to rehabilitate themselves by giving
them a reasonable time within which to pay their
prewar debts so as to prevent them from being
victimized by their creditors. While it is admitted in
said law that since liberation conditions have
gradually returned to normal, this is not so with regard
to those who have suffered the ravages of war and so
it was therein declared as a policy that as to them the
debt moratorium should be continued in force
(Section 1).
But we should not lose sight of the fact that these
obligations had been pending since 1945 as a result
of the issuance of Executive Orders Nos. 25 and 32
and at present their enforcement is still inhibited
because of the enactment of Republic Act No. 342
and would continue to be unenforceable during the
eight-year period granted to prewar debtors to afford
them an opportunity to rehabilitate themselves, which
in plain language means that the creditors would have
to observe a vigil of at least twelve (12) years before
they could effect a liquidation of their investment
dating as far back as 1941. his period seems to us
unreasonable, if not oppressive. While the purpose of
Congress is plausible, and should be commended,
the relief accorded works injustice to creditors who
are practically left at the mercy of the debtors. Their
hope to effect collection becomes extremely remote,
more so if the credits are unsecured. And the injustice
is more patent when, under the law, the debtor is not
even required to pay interest during the operation of
the relief, unlike similar statutes in the United States.
xxx       xxx       xxx
In the face of the foregoing observations, and
consistent with what we believe to be as the only
course dictated by justice, fairness and
righteousness, we feel that the only way open to us
under the present circumstances is to declare that
the continued operation and enforcement of
Republic Act No. 342 at the present time is
unreasonable and oppressive, and should not be
prolonged a minute longer, and, therefore, the
same should be declared null and void and
without effect. (emphasis supplied, citations omitted)
2. Applicability of the equal protection clause.
In the realm of equal protection, the U.S. case
of Atlantic Coast Line R. Co. v. Ivey32 is illuminating.
The Supreme Court of Florida ruled against the
continued application of statutes authorizing the
recovery of double damages plus attorney's fees
against railroad companies, for animals killed on
unfenced railroad right of way without proof of
negligence. Competitive motor carriers, though
creating greater hazards, were not subjected to
similar liability because they were not yet in
existence when the statutes were enacted. The Court
ruled that the statutes became invalid as denying
"equal protection of the law," in view of changed
conditions since their enactment.
In another U.S. case, Louisville & N.R. Co. v.
Faulkner,33 the Court of Appeals of Kentucky declared
unconstitutional a provision of a statute which
imposed a duty upon a railroad company of proving
that it was free from negligence in the killing or injury
of cattle by its engine or cars. This, notwithstanding
that the constitutionality of the statute, enacted in
1893, had been previously sustained. Ruled the
Court:
The constitutionality of such legislation was sustained
because it applied to all similar corporations and had
for its object the safety of persons on a train and the
protection of property…. Of course, there were no
automobiles in those days.
The subsequent inauguration and development of
transportation by motor vehicles on the public
highways by common carriers of freight and
passengers created even greater risks to the safety of
occupants of the vehicles and of danger of injury and
death of domestic animals. Yet, under the law the
operators of that mode of competitive transportation
are not subject to the same extraordinary legal
responsibility for killing such animals on the public
roads as are railroad companies for killing them on
their private rights of way.
The Supreme Court, speaking through Justice
Brandeis in Nashville, C. & St. L. Ry. Co. v. Walters,
294 U.S. 405, 55 S.Ct. 486, 488, 79 L.Ed. 949, stated,
"A statute valid when enacted may become invalid
by change in the conditions to which it is
applied. The police power is subject to the
constitutional limitation that it may not be exerted
arbitrarily or unreasonably." A number of prior
opinions of that court are cited in support of the
statement. The State of Florida for many years had a
statute, F.S.A. § 356.01 et seq. imposing
extraordinary and special duties upon railroad
companies, among which was that a railroad
company was liable for double damages and an
attorney's fee for killing livestock by a train without the
owner having to prove any act of negligence on the
part of the carrier in the operation of its train. In
Atlantic Coast Line Railroad Co. v. Ivey, it was held
that the changed conditions brought about by motor
vehicle transportation rendered the statute
unconstitutional since if a common carrier by motor
vehicle had killed the same animal, the owner would
have been required to prove negligence in the
operation of its equipment. Said the court, "This
certainly is not equal protection of the
law."34 (emphasis supplied)
Echoes of these rulings resonate in our case
law, viz:
[C]ourts are not confined to the language of the
statute under challenge in determining whether that
statute has any discriminatory effect. A statute
nondiscriminatory on its face may be grossly
discriminatory in its operation. Though the law
itself be fair on its face and impartial in appearance,
yet, if it is applied and administered by public authority
with an evil eye and unequal hand, so as practically to
make unjust and illegal discriminations between
persons in similar circumstances, material to their
rights, the denial of equal justice is still within the
prohibition of the Constitution.35 (emphasis supplied,
citations omitted)
[W]e see no difference between a law which
denies equal protection and a law which permits
of such denial. A law may appear to be fair on its
face and impartial in appearance, yet, if it permits of
unjust and illegal discrimination, it is within the
constitutional prohibition….. In other words, statutes
may be adjudged unconstitutional because of their
effect in operation…. If a law has the effect of denying
the equal protection of the law it is unconstitutional.
….36 (emphasis supplied, citations omitted
3. Enactment of R.A. Nos. 7907 + 8282 + 8289 +
8291 + 8523 + 8763
+ 9302 = consequential unconstitutionality of
challenged proviso.
According to petitioner, the last proviso of Section
15(c), Article II of R.A. No. 7653 is also violative of the
equal protection clause because after it was enacted,
the charters of the GSIS, LBP, DBP and SSS were
also amended, but the personnel of the latter GFIs
were all exempted from the coverage of the
SSL.37 Thus, within the class of rank-and-file
personnel of GFIs, the BSP rank-and-file are also
discriminated upon.
Indeed, we take judicial notice that after the new BSP
charter was enacted in 1993, Congress also
undertook the amendment of the charters of the
GSIS, LBP, DBP and SSS, and three other GFIs,
from 1995 to 2004, viz:
1. R.A. No. 7907 (1995) for Land Bank of the
Philippines (LBP);
2. R.A. No. 8282 (1997) for Social Security System
(SSS);
3. R.A. No. 8289 (1997) for Small Business
Guarantee and Finance Corporation, (SBGFC);
4. R.A. No. 8291 (1997) for Government Service
Insurance System (GSIS);
5. R.A. No. 8523 (1998) for Development Bank of the
Philippines (DBP);
6. R.A. No. 8763 (2000) for Home Guaranty
Corporation (HGC);38 and
7. R.A. No. 9302 (2004) for Philippine Deposit
Insurance Corporation (PDIC).
It is noteworthy, as petitioner points out, that the
subsequent charters of the seven other GFIs
share this common proviso: a blanket exemption
of all their employees from the coverage of the SSL,
expressly or impliedly, as illustrated below:
1. LBP (R.A. No. 7907)
Section 10. Section 90 of [R.A. No. 3844] is hereby
amended to read as follows:
Section 90. Personnel. -
xxx       xxx       xxx
All positions in the Bank shall be governed by a
compensation, position classification system and
qualification standards approved by the Bank's Board
of Directors based on a comprehensive job analysis
and audit of actual duties and responsibilities. The
compensation plan shall be comparable with the
prevailing compensation plans in the private sector
and shall be subject to periodic review by the Board
no more than once every two (2) years without
prejudice to yearly merit reviews or increases based
on productivity and profitability. The Bank shall
therefore be exempt from existing laws, rules and
regulations on compensation, position
classification and qualification standards. It shall
however endeavor to make its system conform as
closely as possible with the principles under Republic
Act No. 6758. (emphasis supplied)
xxx       xxx       xxx
2. SSS (R.A. No. 8282)
Section 1. [Amending R.A. No. 1161, Section 3(c)]:
xxx       xxx       xxx
(c)The Commission, upon the recommendation of the
SSS President, shall appoint an actuary and such
other personnel as may [be] deemed necessary; fix
their reasonable compensation, allowances and other
benefits; prescribe their duties and establish such
methods and procedures as may be necessary to
insure the efficient, honest and economical
administration of the provisions and purposes of this
Act: Provided, however, That the personnel of the
SSS below the rank of Vice President shall be
appointed by the SSS President: Provided, further,
That the personnel appointed by the SSS President,
except those below the rank of assistant manager,
shall be subject to the confirmation by the
Commission; Provided further, That the personnel of
the SSS shall be selected only from civil service
eligibles and be subject to civil service rules and
regulations: Provided, finally, That the SSS shall be
exempt from the provisions of Republic Act No.
6758 and Republic Act No. 7430. (emphasis
supplied)
3. SBGFC (R.A. No. 8289)
Section 8. [Amending R.A. No. 6977, Section 11]:
xxx       xxx       xxx
The Small Business Guarantee and Finance
Corporation shall:
xxx       xxx       xxx
(e) notwithstanding the provisions of Republic Act
No. 6758, and Compensation Circular No. 10,
series of 1989 issued by the Department of Budget
and Management, the Board of Directors of SBGFC
shall have the authority to extend to the
employees and personnel thereof the allowance
and fringe benefits similar to those extended to
and currently enjoyed by the employees and
personnel of other government financial
institutions. (emphases supplied)
4. GSIS (R.A. No. 8291)
Section 1. [Amending Section 43(d)].
xxx       xxx       xxx
Sec. 43. Powers and Functions of the Board of
Trustees. - The Board of Trustees shall have the
following powers and functions:
xxx       xxx       xxx
(d) upon the recommendation of the President and
General Manager, to approve the GSIS'
organizational and administrative structures and
staffing pattern, and to establish, fix, review, revise
and adjust the appropriate compensation package for
the officers and employees of the GSIS with
reasonable allowances, incentives, bonuses,
privileges and other benefits as may be necessary or
proper for the effective management, operation and
administration of the GSIS, which shall be exempt
from Republic Act No. 6758, otherwise known as
the Salary Standardization Law and Republic Act
No. 7430, otherwise known as the Attrition
Law. (emphasis supplied)
xxx       xxx       xxx
5. DBP (R.A. No. 8523)
Section 6. [Amending E.O. No. 81, Section 13]:
Section 13. Other Officers and Employees. - The
Board of Directors shall provide for an organization
and staff of officers and employees of the Bank and
upon recommendation of the President of the Bank,
fix their remunerations and other emoluments. All
positions in the Bank shall be governed by the
compensation, position classification system and
qualification standards approved by the Board of
Directors based on a comprehensive job analysis of
actual duties and responsibilities. The compensation
plan shall be comparable with the prevailing
compensation plans in the private sector and shall be
subject to periodic review by the Board of Directors
once every two (2) years, without prejudice to yearly
merit or increases based on the Bank's productivity
and profitability. The Bank shall, therefore, be
exempt from existing laws, rules, and regulations
on compensation, position classification and
qualification standards. The Bank shall however,
endeavor to make its system conform as closely
as possible with the principles under
Compensation and Position Classification Act of
1989 (Republic Act No. 6758, as
amended). (emphasis supplied)
6. HGC (R.A. No. 8763)
Section 9. Powers, Functions and Duties of the Board
of Directors. - The Board shall have the following
powers, functions and duties:
xxx       xxx       xxx
(e) To create offices or positions necessary for the
efficient management, operation and administration of
the Corporation: Provided, That all positions in the
Home Guaranty Corporation (HGC) shall be governed
by a compensation and position classification system
and qualifications standards approved by the
Corporation's Board of Directors based on a
comprehensive job analysis and audit of actual duties
and responsibilities: Provided, further, That the
compensation plan shall be comparable with the
prevailing compensation plans in the private
sector and which shall be exempt from Republic
Act No. 6758, otherwise known as the Salary
Standardization Law, and from other laws, rules
and regulations on salaries and
compensations; and to establish a Provident Fund
and determine the Corporation's and the employee's
contributions to the Fund; (emphasis supplied)
xxx       xxx       xxx
7. PDIC (R.A. No. 9302)
Section 2. Section 2 of [Republic Act No. 3591, as
amended] is hereby further amended to read:
xxx       xxx       xxx
3.
xxx       xxx       xxx
A compensation structure, based on job evaluation
studies and wage surveys and subject to the Board's
approval, shall be instituted as an integral component
of the Corporation's human resource development
program: Provided, That all positions in the
Corporation shall be governed by a compensation,
position classification system and qualification
standards approved by the Board based on a
comprehensive job analysis and audit of actual duties
and responsibilities. The compensation plan shall
be comparable with the prevailing compensation
plans of other government financial
institutions and shall be subject to review by the
Board no more than once every two (2) years without
prejudice to yearly merit reviews or increases based
on productivity and profitability. The Corporation
shall therefore be exempt from existing laws,
rules and regulations on compensation, position
classification and qualification standards. It shall
however endeavor to make its system conform as
closely as possible with the principles under Republic
Act No. 6758, as amended. (emphases supplied)
Thus, eleven years after the amendment of the
BSP charter, the rank-and-file of seven other GFIs
were granted the exemption that was specifically
denied to the rank-and-file of the BSP. And as if to
add insult to petitioner's injury, even the Securities
and Exchange Commission (SEC) was granted the
same blanket exemption from the SSL in 2000!39
The prior view on the constitutionality of R.A. No.
7653 was confined to an evaluation of its
classification between the rank-and-file and the
officers of the BSP, found reasonable because there
were substantial distinctions that made real
differences between the two classes.
The above-mentioned subsequent enactments,
however, constitute significant changes in
circumstancethat considerably alter the
reasonability of the continued operation of the
last proviso  of Section 15(c), Article II of Republic
Act No. 7653, thereby exposing the proviso  to
more serious scrutiny. This time, the scrutiny
relates to the constitutionality of the classification -
albeit made indirectly as a consequence of the
passage of eight other laws - between the rank-and-
file of the BSP and the seven other GFIs. The
classification must not only be reasonable, but must
also apply equally to all members of the
class. The proviso  may be fair on its face and
impartial in appearance but it cannot be grossly
discriminatory in its operation, so as practically to
make unjust distinctions between persons who are
without differences.40
Stated differently, the second level of inquiry deals
with the following questions: Given that Congress
chose to exempt other GFIs (aside the BSP) from the
coverage of the SSL, can the exclusion of the rank-
and-file employees of the BSP stand constitutional
scrutiny in the light of the fact that Congress did not
exclude the rank-and-file employees of the other
GFIs?  Is Congress' power to classify so unbridled as
to sanction unequal and discriminatory treatment,
simply because the inequity manifested itself, not
instantly through a single overt act, but gradually and
progressively, through seven separate acts of
Congress? Is the right to equal protection of the law
bounded in time and space that: (a) the right can only
be invoked against a classification made directly and
deliberately, as opposed to a discrimination that
arises indirectly, or as a consequence of several other
acts; and (b) is the legal analysis confined to
determining the validity within the parameters of the
statute or ordinance (where the inclusion or exclusion
is articulated), thereby proscribing any evaluation vis-
à-vis the grouping, or the lack thereof, among several
similar enactments made over a period of time?
In this second level of scrutiny, the inequality of
treatment cannot be justified on the mere assertion
that each exemption (granted to the seven other
GFIs) rests "on a policy determination by the
legislature." All legislative enactments necessarily
rest on a policy determination - even those that
have been declared to contravene the Constitution.
Verily, if this could serve as a magic wand to sustain
the validity of a statute, then no due process and
equal protection challenges would ever prosper.
There is nothing inherently sacrosanct in a policy
determination made by Congress or by the Executive;
it cannot run riot and overrun the ramparts of
protection of the Constitution.
In fine, the "policy determination" argument may
support the inequality of treatment between the rank-
and-file and the officers of the BSP, but it cannot
justify the inequality of treatment between BSP rank-
and-file and other GFIs' who are similarly situated. It
fails to appreciate that what is at issue in the second
level of scrutiny is not the declared policy of each
law per se, but the oppressive results of Congress'
inconsistent and unequal policytowards the BSP
rank-and-file and those of the seven other GFIs. At
bottom, the second challenge to the constitutionality
of Section 15(c), Article II of Republic Act No. 7653 is
premised precisely on the irrational
discriminatory policy adopted by Congress in its
treatment of persons similarly situated. In the field
of equal protection, the guarantee that "no person
shall be … denied the equal protection of the laws"
includes the prohibition against enacting laws that
allow invidious discrimination, directly or
indirectly. If a law has the effect of denying the equal
protection of the law, or permits such denial, it is
unconstitutional.41
It is against this standard that the disparate treatment
of the BSP rank-and-file from the other GFIs cannot
stand judicial scrutiny. For as regards the exemption
from the coverage of the SSL, there exist no
substantial distinctions so as to differentiate, the BSP
rank-and-file from the other rank-and-file of the seven
GFIs. On the contrary, our legal history shows that
GFIs have long been recognized as comprising
one distinct class, separate from other
governmental entities.
Before the SSL, Presidential Decree (P.D.) No. 985
(1976) declared it as a State policy (1) to provide
equal pay for substantially equal work, and (2) to base
differences in pay upon substantive differences in
duties and responsibilities, and qualification
requirements of the positions. P.D. No. 985 was
passed to address disparities in pay among similar or
comparable positions which had given rise to
dissension among government employees. But even
then, GFIs and government-owned and/or
controlled corporations (GOCCs) were already
identified as a distinct class among government
employees. Thus, Section 2 also provided, "[t]hat
notwithstanding a standardized salary system
established for all employees, additional financial
incentives may be established by government
corporation and financial institutions for their
employees to be supported fully from their corporate
funds and for such technical positions as may be
approved by the President in critical government
agencies."42
The same favored treatment is made for the GFIs and
the GOCCs under the SSL. Section 3(b) provides that
one of the principles governing the Compensation and
Position Classification System of the Government is
that: "[b]asic compensation for all personnel in the
government and government-owned or controlled
corporations and financial institutions shall generally
be comparable with those in the private sector doing
comparable work, and must be in accordance with
prevailing laws on minimum wages."
Thus, the BSP and all other GFIs and GOCCs were
under the unified Compensation and Position
Classification System of the SSL,43 but rates of pay
under the SSL were determined on the basis of,
among others, prevailing rates in the private sector for
comparable work. Notably, the Compensation and
Position Classification System was to be governed by
the following principles: (a) just and equitable wages,
with the ratio of compensation between pay
distinctions maintained at equitable levels;44 and (b)
basic compensation generally comparable with the
private sector, in accordance with prevailing laws on
minimum wages.45 Also, the Department of Budget
and Management was directed to use, as guide for
preparing the Index of Occupational Services, the
Benchmark Position Schedule, and the following
factors:46
(1) the education and experience required to perform
the duties and responsibilities of the positions;
(2) the nature and complexity of the work to be
performed;
(3) the kind of supervision received;
(4) mental and/or physical strain required in the
completion of the work;
(5) nature and extent of internal and external
relationships;
(6) kind of supervision exercised;
(7) decision-making responsibility;
(8) responsibility for accuracy of records and reports;
(9) accountability for funds, properties and equipment;
and
(10) hardship, hazard and personal risk involved in
the job.
The Benchmark Position Schedule enumerates the
position titles that fall within Salary Grades 1 to 20.
Clearly, under R.A. No. 6758, the rank-and-file of all
GFIs were similarly situated in all aspects pertaining
to compensation and position classification, in
consonance with Section 5, Article IX-B of the 1997
Constitution.47
Then came the enactment of the amended charter
of the BSP, implicitly exempting the Monetary Board
from the SSL by giving it express authority to
determine and institute its own compensation and
wage structure. However, employees whose positions
fall under SG 19 and below were specifically limited to
the rates prescribed under the SSL.
Subsequent amendments to the charters of other
GFIs followed. Significantly, each government
financial institution (GFI) was not only expressly
authorized to determine and institute its own
compensation and wage structure, but also explicitly
exempted - without distinction as to salary grade
or position - all employees of the GFI from the
SSL.
It has been proffered that legislative deliberations
justify the grant or withdrawal of exemption from the
SSL, based on the perceived need "to fulfill the
mandate of the institution concerned considering,
among others, that: (1) the GOCC or GFI is
essentially proprietary in character; (2) the GOCC or
GFI is in direct competition with
their  [sic] counterparts in the private sector, not only
in terms of the provisions of goods or services, but
also in terms of hiring and retaining competent
personnel; and (3) the GOCC or GFI are or
were  [sic] experiencing difficulties filling up plantilla
positions with competent personnel and/or retaining
these personnel. The need for the scope of
exemption necessarily varies with the particular
circumstances of each institution, and the
corresponding variance in the benefits received by
the employees is merely incidental."
The fragility of this argument is manifest. First, the
BSP is the central monetary authority,48 and
the banker of the government and all its political
subdivisions.49 It has the sole power and authority to
issue currency;50 provide policy directions in the areas
of money, banking, and credit; and supervise banks
and regulate finance companies and non-bank
financial institutions performing quasi-banking
functions, including the exempted GFIs.51 Hence,
the argument that the rank-and-file employees of the
seven GFIs were exempted because of the
importance of their institution's mandate cannot stand
any more than an empty sack can stand.
Second, it is certainly misleading to say that "the
need for the scope of exemption necessarily varies
with the particular circumstances of each
institution." Nowhere in the deliberations is there a
cogent basis for the exclusion of the BSP rank-and-
file from the exemption which was granted to the
rank-and-file of the other GFIs and the SEC. As point
in fact, the BSP and the seven GFIs are similarly
situated in so far as Congress deemed it necessary
for these institutions to be exempted from the SSL.
True, the SSL-exemption of the BSP and the seven
GFIs was granted in the amended charters of each
GFI, enacted separately and over a period of time.
But it bears emphasis that, while each GFI has a
mandate different and distinct from that of another,
the deliberations show that the raison d'être of the
SSL-exemption was inextricably linked to  and for the
most part based on factors common to the eight
GFIs, i.e., (1) the pivotal role they play in the
economy; (2) the necessity of hiring and retaining
qualified and effective personnel to carry out the GFI's
mandate; and (3) the recognition that the
compensation package of these GFIs is not
competitive, and fall substantially below industry
standards. Considering further that (a) the BSP was
the first GFI granted SSL exemption; and (b) the
subsequent exemptions of other GFIs did not
distinguish between the officers and the rank-and-file;
it is patent that the classification made between the
BSP rank-and-file and those of the other seven
GFIs was inadvertent, and NOT intended, i.e., it was
not based on any substantial distinction vis-à-vis the
particular circumstances of each GFI. Moreover, the
exemption granted to two GFIs makes express
reference to allowance and fringe benefits similar to
those extended to and currently enjoyed by the
employees and personnel of other
GFIs,52 underscoring that GFIs are a particular class
within the realm of government entities.
It is precisely this unpremeditated discrepancy in
treatment of the rank-and-file of the BSP - made
manifest and glaring with each and every
consequential grant of blanket exemption from the
SSL to the other GFIs - that cannot be rationalized or
justified. Even more so, when the SEC - which is not
a GFI - was given leave to have a compensation plan
that "shall be comparable with the prevailing
compensation plan in the [BSP] and other
[GFIs],"53then granted a blanket exemption from the
SSL, and its rank-and-file endowed a more preferred
treatment than the rank-and-file of the BSP.
The violation to the equal protection clause becomes
even more pronounced when we are faced with this
undeniable truth: that if Congress had enacted a law
for the sole purpose of exempting the eight GFIs from
the coverage of the SSL, the exclusion of the BSP
rank-and-file employees would have been devoid of
any substantial or material basis. It bears no moment,
therefore, that the unlawful discrimination was not a
direct result arising from one law. "Nemo potest
facere per alium quod non potest facere per
directum." No one is allowed to do indirectly what he
is prohibited to do directly.
It has also been proffered that "similarities alone are
not sufficient to support the conclusion that rank-and-
file employees of the BSP may be lumped together
with similar employees of the other GOCCs for
purposes of compensation, position classification and
qualification standards. The fact that certain persons
have some attributes in common does not
automatically make them members of the same class
with respect to a legislative classification." Cited is the
ruling in Johnson v. Robinson:54 "this finding of
similarity ignores that a common characteristic shared
by beneficiaries and nonbeneficiaries alike, is not
sufficient to invalidate a statute when other
characteristics peculiar to only one group rationally
explain the statute's different treatment of the two
groups."
The reference to Johnson is inapropos. In Johnson,
the US Court sustained the validity of the
classification as there were quantitative and
qualitative distinctions, expressly recognized by
Congress, which formed a rational basis for the
classification limiting educational benefits to military
service veterans as a means of helping them readjust
to civilian life. The Court listed the peculiar
characteristics as follows:
First, the disruption caused by military service is
quantitatively greater than that caused by alternative
civilian service. A conscientious objector performing
alternative service is obligated to work for two years.
Service in the Armed Forces, on the other hand,
involves a six-year commitment…
xxx       xxx       xxx
Second, the disruptions suffered by military veterans
and alternative service performers are qualitatively
different. Military veterans suffer a far greater loss of
personal freedom during their service careers.
Uprooted from civilian life, the military veteran
becomes part of the military establishment, subject to
its discipline and potentially hazardous duty.
Congress was acutely aware of the peculiar
disabilities caused by military service, in consequence
of which military servicemen have a special need for
readjustment benefits…55 (citations omitted)
In the case at bar, it is precisely the fact that as
regards the exemption from the SSL, there are no
characteristics peculiar only to the seven GFIs or
their rank-and-file so as to justify the exemption
which BSP rank-and-file employees were
denied (not to mention the anomaly of the SEC
getting one). The distinction made by the law is not
only superficial,56 but also arbitrary. It is not based on
substantial distinctions that make real differences
between the BSP rank-and-file and the seven other
GFIs.
Moreover, the issue in this case is not - as the
dissenting opinion of Mme. Justice Carpio-Morales
would put it - whether "being an employee of a GOCC
or GFI is reasonable and sufficient basis for
exemption" from R.A. No. 6758. It is Congress itself
that distinguished the GFIs from other
government agencies, not once but eight times,
through the enactment of R.A. Nos. 7653, 7907,
8282, 8289, 8291, 8523, 8763, and 9302. These laws
may have created a "preferred sub-class within
government employees," but the present challenge is
not directed at the wisdom of these laws. Rather, it is
a legal conundrum involving the exercise of legislative
power, the validity of which must be measured not
only by looking at the specific exercise in and by
itself  (R.A. No. 7653), but also as to the legal
effects  brought about by seven separate exercises -
albeit indirectly and without intent.
Thus, even if petitioner had not alleged "a comparable
change in the factual milieu as regards the
compensation, position classification and qualification
standards of the employees of the BSP (whether of
the executive level or of the rank-and-file) since the
enactment of the new Central Bank Act" is of no
moment. In GSIS v. Montesclaros,57 this Court
resolved the issue of constitutionality notwithstanding
that claimant had manifested that she was no longer
interested in pursuing the case, and even when the
constitutionality of the said provision was not squarely
raised as an issue, because the issue involved not
only the claimant but also others similarly situated and
whose claims GSIS would also deny based on the
challenged proviso. The Court held that social justice
and public interest demanded the resolution of the
constitutionality of the proviso. And so it is with the
challenged proviso  in the case at bar.
It bears stressing that the exemption from the SSL is
a "privilege" fully within the legislative prerogative to
give or deny. However, its subsequent grant to the
rank-and-file of the seven other GFIs and continued
denial to the BSP rank-and-file employees breached
the latter's right to equal protection. In other words,
while the granting of a privilege per se is a matter of
policy exclusively within the domain and prerogative
of Congress, the validity or legality of the exercise of
this prerogative is subject to judicial review.58 So when
the distinction made is superficial, and not based on
substantial distinctions that make real differences
between those included and excluded, it becomes a
matter of arbitrariness that this Court has the duty and
the power to correct.59 As held in the United Kingdom
case of Hooper v. Secretary of State for Work and
Pensions,60 once the State has chosen to confer
benefits, "discrimination" contrary to law may occur
where favorable treatment already afforded to one
group is refused to another, even though the State is
under no obligation to provide that favorable
treatment. 61
The disparity of treatment between BSP rank-and-file
and the rank-and-file of the other seven GFIs
definitely bears the unmistakable badge of invidious
discrimination - no one can, with candor and fairness,
deny the discriminatory character of the subsequent
blanket and total exemption of the seven other GFIs
from the SSL when such was withheld from the
BSP. Alikes are being treated as unalikes without
any rational basis.
Again, it must be emphasized that the equal
protection clause does not demand absolute
equality but it requires that all persons shall be
treated alike, under like circumstances and
conditions both as to privileges conferred and
liabilities enforced. Favoritism and undue
preference cannot be allowed. For the principle is that
equal protection and security shall be given to every
person under circumstances which, if not identical,
are analogous. If law be looked upon in terms of
burden or charges, those that fall within a class
should be treated in the same fashion; whatever
restrictions cast on some in the group is equally
binding on the rest.62
In light of the lack of real and substantial distinctions
that would justify the unequal treatment between the
rank-and-file of BSP from the seven other GFIs, it is
clear that the enactment of the seven subsequent
charters has rendered the continued application of the
challenged proviso anathema to the equal protection
of the law, and the same should be declared as an
outlaw.
IV.
Equal Protection Under International Lens
In our jurisdiction, the standard and analysis of
equal protection challenges in the main have followed
the "rational basis" test, coupled with a deferential
attitude to legislative classifications63 and a reluctance
to invalidate a law unless there is a showing of a clear
and unequivocal breach of the Constitution. 64
A. Equal Protection in the United States
In contrast, jurisprudence in the U.S. has gone
beyond the static "rational basis" test. Professor
Gunther highlights the development in equal
protection jurisprudential analysis, to wit: 65
Traditionally, equal protection supported only
minimal judicial intervention in most contexts.
Ordinarily, the command of equal protection was only
that government must not impose differences in
treatment "except upon some reasonable
differentiation fairly related to the object of regulation."
The old variety of equal protection scrutiny focused
solely on the means used by the legislature: it
insisted merely that the classification in the
statute reasonably relates to the legislative
purpose. Unlike substantive due process, equal
protection scrutiny was not typically concerned with
identifying "fundamental values" and restraining
legislative ends. And usually the rational
classification requirement was readily satisfied: the
courts did not demand a tight fit between classification
and purpose; perfect congruence between means and
ends was not required.
xxx       xxx       xxx
[From marginal intervention to major cutting
edge: The Warren Court's "new equal protection" and
the two-tier approach.]
From its traditional modest role, equal
protection burgeoned into a major intervention
tool during the Warren era, especially in the 1960s.
The Warren Court did not abandon the deferential
ingredients of the old equal protection: in most areas
of economic and social legislation, the demands
imposed by equal protection remained as minimal as
ever…But the Court launched an equal protection
revolution by finding large new areas for strict rather
than deferential scrutiny. A sharply differentiated two-
tier approach evolved by the late 1960s: in addition
to the deferential "old" equal protection, a "new" equal
protection, connoting strict scrutiny, arose…. The
intensive review associated with the new equal
protection imposed two demands - a demand not
only as to means but also one as to ends.
Legislation qualifying for strict scrutiny required a far
closer fit between classification and statutory purpose
than the rough and ready flexibility traditionally
tolerated by the old equal protection: means had to
be shown "necessary" to achieve statutory ends,
not merely "reasonably related" ones. Moreover,
equal protection became a source of ends scrutiny as
well: legislation in the areas of the new equal
protection had to be justified by "compelling" state
interests, not merely the wide spectrum of "legitimate"
state ends.
The Warren Court identified the areas appropriate
for strict scrutiny by searching for two
characteristics: the presence of a "suspect"
classification; or an impact on "fundamental" rights or
interests. In the category of "suspect classifications,"
the Warren Court's major contribution was to intensify
the strict scrutiny in the traditionally interventionist
area of racial classifications. But other cases also
suggested that there might be more other suspect
categories as well: illegitimacy and wealth for
example. But it was the 'fundamental interests"
ingredient of the new equal protection that proved
particularly dynamic, open-ended, and amorphous…..
[Other fundamental interests included voting, criminal
appeals, and the right of interstate travel ….]
xxx       xxx       xxx
The Burger Court and Equal Protection.
The Burger Court was reluctant to expand the
scope of the new equal protection, although its
best established ingredient retains vitality. There
was also mounting discontent with the rigid two-tier
formulations of the Warren Court's equal protection
doctrine. It was prepared to use the clause as an
interventionist tool without resorting to the strict
language of the new equal protection…. [Among the
fundamental interests identified during this time were
voting and access to the ballot, while "suspect"
classifications included sex, alienage and
illegitimacy.]
xxx       xxx       xxx
Even while the two-tier scheme has often been
adhered to in form, there has also been an
increasingly noticeable resistance to the sharp
difference between deferential "old" and
interventionist "new" equal protection. A number of
justices sought formulations that would blur the sharp
distinctions of the two-tiered approach or that would
narrow the gap between strict scrutiny and deferential
review. The most elaborate attack came from Justice
Marshall, whose frequently stated position was
developed most elaborately in his dissent in
the Rodriguez case: 66
The Court apparently seeks to establish [that] equal
protection cases fall into one of two neat categories
which dictate the appropriate standard of review
- strict scrutiny or mere rationality. But this (sic)
Court's [decisions] defy such easy categorization. A
principled reading of what this Court has done reveals
that it has applied a spectrum of standards in
reviewing discrimination allegedly violative of the
equal protection clause. This spectrum clearly
comprehends variations in the degree of care with
which Court will scrutinize particular classification,
depending, I believe, on the constitutional and
societal importance of the interests adversely affected
and the recognized invidiousness of the basis upon
which the particular classification is drawn.
Justice Marshall's "sliding
scale" approach describes many of the modern
decisions, although it is a formulation that the majority
refused to embrace. But the Burger Court's results
indicate at least two significant changes in equal
protection law: First, invocation of the "old" equal
protection formula no longer signals, as it did with the
Warren Court, an extreme deference to legislative
classifications and a virtually automatic validation of
challenged statutes. Instead, several cases, even
while voicing the minimal "rationality" "hands-off"
standards of the old equal protection, proceed to find
the statute unconstitutional. Second, in some areas
the modern Court has put forth standards for equal
protection review that, while clearly more intensive
than the deference of the "old" equal protection, are
less demanding than the strictness of the "new" equal
protection. Sex discrimination is the best established
example of an "intermediate" level of review. Thus,
in one case, the Court said that "classifications by
gender must serve important governmental
objectives and must be substantially related to
achievement of those objectives." That standard is
"intermediate" with respect to both ends and means:
where ends must be "compelling" to survive strict
scrutiny and merely "legitimate" under the "old" mode,
"important" objectives are required here; and where
means must be "necessary" under the "new" equal
protection, and merely "rationally related" under the
"old" equal protection, they must be "substantially
related" to survive the "intermediate" level of review.
(emphasis supplied, citations omitted)
B. Equal Protection in Europe
The United Kingdom and other members of the
European Community have also gone forward in
discriminatory legislation and jurisprudence. Within
the United Kingdom domestic law, the most extensive
list of protected grounds can be found in Article 14 of
the European Convention on Human
Rights (ECHR). It prohibits discrimination on grounds
such as "sex, race, colour, language, religion, political
or other opinion, national or social origin, association
with a national minority, property, birth or other
status." This list is illustrative and not
exhaustive. Discrimination on the basis of race,
sex and religion is regarded as grounds that
require strict scrutiny. A further indication that
certain forms of discrimination are regarded
as particularly suspect under the Covenant can be
gleaned from Article 4, which, while allowing states to
derogate from certain Covenant articles in times of
national emergency, prohibits derogation by
measures that discriminate solely on the grounds of
"race, colour, language, religion or social origin."67
Moreover, the European Court of Human
Rights has developed a test of justification which
varies with the ground of discrimination. In
the Belgian Linguistics case68 the European Court
set the standard of justification at a low level:
discrimination would contravene the Convention only
if it had no legitimate aim, or there was no reasonable
relationship of proportionality between the means
employed and the aim sought to be realised.69 But
over the years, the European Court has developed
a hierarchy of grounds covered by Article 14 of
the ECHR, a much higher level of justification
being required in respect of those regarded as
"suspect" (sex, race, nationality, illegitimacy, or
sexual orientation) than of others. Thus,
in Abdulaziz, 70 the European Court declared that:
. . . [t]he advancement of the equality of the sexes is
today a major goal in the member States of the
Council of Europe. This means that very weighty
reasons would have to be advanced before a
difference of treatment on the ground of sex could be
regarded as compatible with the Convention.
And in Gaygusuz v. Austria,71 the European
Court held that "very weighty reasons would have
to be put forward before the Court could regard a
difference of treatment based exclusively on the
ground of nationality as compatible with the
Convention."72 The European Court will then permit
States a very much narrower margin of
appreciation in relation to discrimination on grounds
of sex, race, etc., in the application of the Convention
rights than it will in relation to distinctions drawn by
states between, for example, large and small land-
owners. 73
C. Equality under International Law
The principle of equality has long been recognized
under international law. Article 1 of the Universal
Declaration of Human Rights proclaims that all
human beings are born free and equal in dignity
and rights. Non-discrimination, together with equality
before the law and equal protection of the law without
any discrimination, constitutes basic principles in the
protection of human rights. 74
Most, if not all, international human rights
instruments include some prohibition on
discrimination and/or provisions about equality.75 The
general international provisions pertinent to
discrimination and/or equality are the International
Covenant on Civil and Political Rights (ICCPR);76 the
International Covenant on Economic, Social and
Cultural Rights (ICESCR); the International
Convention on the Elimination of all Forms of Racial
Discrimination (CERD);77 the Convention on the
Elimination of all Forms of Discrimination against
Women (CEDAW); and the Convention on the Rights
of the Child (CRC).
In the broader international context, equality is also
enshrined in regional instruments such as the
American Convention on Human Rights;78 the African
Charter on Human and People's Rights;79 the
European Convention on Human Rights;80 the
European Social Charter of 1961 and revised Social
Charter of 1996; and the European Union Charter of
Rights (of particular importance to European states).
Even the Council of the League of Arab States has
adopted the Arab Charter on Human Rights in 1994,
although it has yet to be ratified by the Member States
of the League.81
The equality provisions in these instruments do
not merely function as traditional "first
generation" rights, commonly viewed as
concerned only with constraining rather than
requiring State action. Article 26 of the ICCPR
requires "guarantee[s]" of "equal and effective
protection against discrimination" while Articles 1 and
14 of the American and European Conventions oblige
States Parties "to ensure ... the full and free exercise
of [the rights guaranteed] ... without any
discrimination" and to "secure without discrimination"
the enjoyment of the rights guaranteed.82 These
provisions impose a measure of positive
obligation on States Parties to take steps to
eradicate discrimination.
In the employment field, basic detailed minimum
standards ensuring equality and prevention of
discrimination, are laid down in the ICESCR83 and in a
very large number of Conventions administered by
the International Labour Organisation, a United
Nations body. 84 Additionally, many of the other
international and regional human rights instruments
have specific provisions relating to employment.85
The United Nations Human Rights Committee has
also gone beyond the earlier tendency to view the
prohibition against discrimination (Article 26) as
confined to the ICCPR
rights.86 In Broeks87 and Zwaan-de Vries,88the issue
before the Committee was whether discriminatory
provisions in the Dutch Unemployment Benefits Act
(WWV) fell within the scope of Article 26. The Dutch
government submitted that discrimination in social
security benefit provision was not within the scope of
Article 26, as the right was contained in the ICESCR
and not the ICCPR. They accepted that Article 26
could go beyond the rights contained in the Covenant
to other civil and political rights, such as
discrimination in the field of taxation, but contended
that Article 26 did not extend to the social, economic,
and cultural rights contained in ICESCR. The
Committee rejected this argument. In its view, Article
26 applied to rights beyond the Covenant including
the rights in other international treaties such as the
right to social security found in ICESCR:
Although Article 26 requires that legislation should
prohibit discrimination, it does not of itself contain any
obligation with respect to the matters that may be
provided for by legislation. Thus it does not, for
example, require any state to enact legislation to
provide for social security. However, when such
legislation is adopted in the exercise of a State's
sovereign power, then such legislation must comply
with Article 26 of the Covenant.89
Breaches of the right to equal protection occur directly
or indirectly. A classification may be struck down if it
has the purpose or effect of violating the right to
equal protection. International law recognizes
that discrimination may occur indirectly, as the
Human Rights Committee90 took into account the
definitions of discrimination adopted by CERD and
CEDAW in declaring that:
. . . "discrimination" as used in the [ICCPR] should be
understood to imply any distinction, exclusion,
restriction or preference which is based on any
ground such as race, colour, sex, language, religion,
political or other opinion, national or social origin,
property, birth or other status, and which has
the purpose or effect of nullifying or impairing the
recognition, enjoyment or exercise by all persons,
on an equal footing, of all rights and
freedoms. 91 (emphasis supplied)
Thus, the two-tier analysis made in the case at bar
of the challenged provision, and its conclusion of
unconstitutionality by subsequent operation, are
in cadence and in consonance with the
progressive trend of other jurisdictions and in
international law. There should be no hesitation in
using the equal protection clause as a major cutting
edge to eliminate every conceivable irrational
discrimination in our society. Indeed, the social justice
imperatives in the Constitution, coupled with the
special status and protection afforded to labor,
compel this approach.92
Apropos the special protection afforded to labor under
our Constitution and international law, we held in
International School Alliance of Educators v.
Quisumbing: 93
That public policy abhors inequality and discrimination
is beyond contention. Our Constitution and laws
reflect the policy against these evils. The Constitution
in the Article on Social Justice and Human Rights
exhorts Congress to "give highest priority to the
enactment of measures that protect and enhance the
right of all people to human dignity, reduce social,
economic, and political inequalities." The very broad
Article 19 of the Civil Code requires every person, "in
the exercise of his rights and in the performance of
his duties, [to] act with justice, give everyone his due,
and observe honesty and good faith."
International law, which springs from general
principles of law, likewise proscribes discrimination.
General principles of law include principles of
equity, i.e., the general principles of fairness and
justice, based on the test of what is reasonable. The
Universal Declaration of Human Rights, the
International Covenant on Economic, Social, and
Cultural Rights, the International Convention on the
Elimination of All Forms of Racial Discrimination, the
Convention against Discrimination in Education, the
Convention (No. 111) Concerning Discrimination in
Respect of Employment and Occupation - all embody
the general principle against discrimination, the very
antithesis of fairness and justice. The Philippines,
through its Constitution, has incorporated this
principle as part of its national laws.
In the workplace, where the relations between capital
and labor are often skewed in favor of capital,
inequality and discrimination by the employer are all
the more reprehensible.
The Constitution specifically provides that labor is
entitled to "humane conditions of work." These
conditions are not restricted to the physical workplace
- the factory, the office or the field - but include as well
the manner by which employers treat their
employees.
The Constitution also directs the State to promote
"equality of employment opportunities for all."
Similarly, the Labor Code provides that the State shall
"ensure equal work opportunities regardless of sex,
race or creed." It would be an affront to both the spirit
and letter of these provisions if the State, in spite of its
primordial obligation to promote and ensure equal
employment opportunities, closes its eyes to unequal
and discriminatory terms and conditions of
employment.
xxx       xxx       xxx
Notably, the International Covenant on Economic,
Social, and Cultural Rights, in Article 7 thereof,
provides:
The States Parties to the present Covenant recognize
the right of everyone to the enjoyment of just and
[favorable] conditions of work, which ensure, in
particular:
a. Remuneration which provides all workers, as a
minimum, with:
i. Fair wages and equal remuneration for work of
equal value without distinction of any kind, in
particular women being guaranteed conditions of work
not inferior to those enjoyed by men, with equal pay
for equal work;
xxx       xxx       xxx
The foregoing provisions impregnably institutionalize
in this jurisdiction the long honored legal truism of
"equal pay for equal work." Persons who work with
substantially equal qualifications, skill, effort and
responsibility, under similar conditions, should be paid
similar salaries. (citations omitted)
Congress retains its wide discretion in providing for a
valid classification, and its policies should be
accorded recognition and respect by the courts of
justice except when they run afoul of the
Constitution.94 The deference stops where the
classification violates a fundamental right, or
prejudices persons accorded special protection
by the Constitution. When these violations arise,
this Court must discharge its primary role as the
vanguard of constitutional guaranties, and require a
stricter and more exacting adherence to
constitutional limitations. Rational basis should not
suffice.
Admittedly, the view that prejudice to persons
accorded special protection by the Constitution
requires a stricter judicial scrutiny finds no support in
American or English jurisprudence. Nevertheless,
these foreign decisions and authorities are not per
se controlling in this jurisdiction. At best, they are
persuasive and have been used to support many of
our decisions.95 We should not place undue and
fawning reliance upon them and regard them as
indispensable mental crutches without which we
cannot come to our own decisions through the
employment of our own endowments. We live in a
different ambience and must decide our own
problems in the light of our own interests and needs,
and of our qualities and even idiosyncrasies as a
people, and always with our own concept of law and
justice.96 Our laws must be construed in accordance
with the intention of our own lawmakers and such
intent may be deduced from the language of each law
and the context of other local legislation related
thereto. More importantly, they must be construed to
serve our own public interest which is the be-all and
the end-all of all our laws. And it need not be stressed
that our public interest is distinct and different from
others.97
In the 2003 case of Francisco v. House of
Representatives, this Court has stated that:
"[A]merican jurisprudence and authorities, much less
the American Constitution, are of dubious application
for these are no longer controlling within our
jurisdiction and have only limited persuasive merit
insofar as Philippine constitutional law is concerned....
[I]n resolving constitutional disputes, [this Court]
should not be beguiled by foreign jurisprudence some
of which are hardly applicable because they have
been dictated by different constitutional settings and
needs."98 Indeed, although the Philippine Constitution
can trace its origins to that of the United States, their
paths of development have long since diverged. 99
Further, the quest for a better and more "equal" world
calls for the use of equal protection as a tool of
effective judicial intervention.
Equality is one ideal which cries out for bold attention
and action in the Constitution. The Preamble
proclaims "equality" as an ideal precisely in protest
against crushing inequities in Philippine society. The
command to promote social justice in Article II,
Section 10, in "all phases of national development,"
further explicitated in Article XIII, are clear commands
to the State to take affirmative action in the direction
of greater equality.… [T]here is thus in the Philippine
Constitution no lack of doctrinal support for a more
vigorous state effort towards achieving a reasonable
measure of equality.100
Our present Constitution has gone further in
guaranteeing vital social and economic rights to
marginalized groups of society, including
labor.101 Under the policy of social justice, the law
bends over backward to accommodate the interests
of the working class on the humane justification that
those with less privilege in life should have more in
law.102 And the obligation to afford protection to labor
is incumbent not only on the legislative and executive
branches but also on the judiciary to translate this
pledge into a living reality.103 Social justice calls for the
humanization of laws and the equalization of social
and economic forces by the State so that justice in its
rational and objectively secular conception may at
least be approximated.104
V.
A Final Word
Finally, concerns have been raised as to the propriety
of a ruling voiding the challenged provision. It has
been proffered that the remedy of petitioner is not with
this Court, but with Congress, which alone has the
power to erase any inequity perpetrated by R.A. No.
7653. Indeed, a bill proposing the exemption of the
BSP rank-and-file from the SSL has supposedly been
filed.
Under most circumstances, the Court will exercise
judicial restraint in deciding questions of
constitutionality, recognizing the broad discretion
given to Congress in exercising its legislative power.
Judicial scrutiny would be based on the "rational
basis" test, and the legislative discretion would be
given deferential treatment. 105
But if the challenge to the statute is premised on
the denial of a fundamental right, or the
perpetuation of prejudice against persons favored
by the Constitution with special protection,
judicial scrutiny ought to be more strict. A weak
and watered down view would call for the abdication
of this Court's solemn duty to strike down any law
repugnant to the Constitution and the rights it
enshrines. This is true whether the actor committing
the unconstitutional act is a private person or the
government itself or one of its instrumentalities.
Oppressive acts will be struck down regardless of the
character or nature of the actor. 106
Accordingly, when the grant of power is qualified,
conditional or subject to limitations, the issue on
whether or not the prescribed qualifications or
conditions have been met, or the limitations
respected, is justiciable or non-political, the crux of
the problem being one of legality or validity of the
contested act, not its wisdom. Otherwise, said
qualifications, conditions or limitations - particularly
those prescribed or imposed by the Constitution -
would be set at naught. What is more, the judicial
inquiry into such issue and the settlement thereof are
the main functions of courts of justice under the
Presidential form of government adopted in our 1935
Constitution, and the system of checks and balances,
one of its basic predicates. As a consequence, We
have neither the authority nor the discretion to
decline passing upon said issue, but are under
the ineluctable obligation - made particularly more
exacting and peremptory by our oath, as
members of the highest Court of the land, to
support and defend the Constitution - to settle
it. This explains why, in Miller v. Johnson, it was held
that courts have a "duty, rather than a power", to
determine whether another branch of the government
has "kept within constitutional limits." Not satisfied
with this postulate, the court went farther and stressed
that, if the Constitution provides how it may be
amended - as it is in our 1935 Constitution - "then,
unless the manner is followed, the judiciary as the
interpreter of that constitution, will declare the
amendment invalid." In fact, this very Court - speaking
through Justice Laurel, an outstanding authority on
Philippine Constitutional Law, as well as one of the
highly respected and foremost leaders of the
Convention that drafted the 1935 Constitution -
declared, as early as July 15, 1936, that "(i)n times of
social disquietude or political excitement, the great
landmarks of the Constitution are apt to be forgotten
or marred, if not entirely obliterated. In cases of
conflict, the judicial department is the only
constitutional organ which can be called upon to
determine the proper allocation of powers between
the several departments" of the
government.107 (citations omitted; emphasis supplied)
In the case at bar, the challenged proviso operates on
the basis of the salary grade or officer-employee
status. It is akin to a distinction based on
economic class and status, with the higher grades
as recipients of a benefit specifically withheld from the
lower grades. Officers of the BSP now receive higher
compensation packages that are competitive with the
industry, while the poorer, low-salaried employees are
limited to the rates prescribed by the SSL. The
implications are quite disturbing: BSP rank-and-file
employees are paid the strictly regimented rates of
the SSL while employees higher in rank - possessing
higher and better education and opportunities for
career advancement - are given higher compensation
packages to entice them to stay. Considering that
majority, if not all, the rank-and-file employees
consist of people whose status and rank in life are
less and limited, especially in terms of job
marketability, it is they - and not the officers - who
have the real economic and financial need  for the
adjustment This is in accord with the policy of the
Constitution "to free the people from poverty, provide
adequate social services, extend to them a decent
standard of living, and improve the quality of life for
all."108 Any act of Congress that runs counter to
this constitutional desideratum deserves strict
scrutiny by this Court before it can pass muster.
To be sure, the BSP rank-and-file employees merit
greater concern from this Court. They represent
the more impotent rank-and-file government
employees who, unlike employees in the private
sector, have no specific right to organize as a
collective bargaining unit and negotiate for better
terms and conditions of employment, nor the power to
hold a strike to protest unfair labor practices. Not only
are they impotent as a labor unit, but their efficacy to
lobby in Congress is almost nil as R.A. No. 7653
effectively isolated them from the other GFI rank-and-
file in compensation. These BSP rank-and-file
employees represent the politically powerless and
they should not be compelled to seek a political
solution to their unequal and iniquitous
treatment. Indeed, they have waited for many years
for the legislature to act. They cannot be asked to wait
some more for discrimination cannot be given any
waiting time. Unless the equal protection clause of the
Constitution is a mere platitude, it is the Court's duty
to save them from reasonless discrimination.
IN VIEW WHEREOF, we hold that the continued
operation and implementation of the last proviso of
Section 15(c), Article II of Republic Act No. 7653 is
unconstitutional.
Davide, Jr., C.J., Quisumbing, Ynares-Santiago,
Sandoval-Gutierrez, Austria-Martinez, Azcuna, Tinga,
and Chico-Nazario, JJ., concur.
Panganiban, Carpio, Carpio-Morales, and Garcia,
JJ., see dissenting.
Corona, and Callejo, Sr., JJ., on leave.
CONCURRING OPINION
CHICO-NAZARIO,  J.:
Does Sec. 15(c), Article II, Republic Act No.
6753,1 which allows the exemption of BSP employees
occupying salary grade (SG) 20 and above from the
coverage of Rep. Act No. 67582 result in a denial of
petitioner's constitutional right to equal protection of
the law?
I submit that it does and said provision should
therefore be declared unconstitutional on the ground
that the division between BSP employees covered
from SG 19 down and from SG 20 up is purely
arbitrary. Even given the wide discretion vested in
Congress to make classifications, it is nonetheless
clear that the lawmaking body abused its discretion in
making such classification.
It is not disputed that all that is required for a valid
classification is that it must be reasonable, i.e., that it
must be based on substantial distinctions which make
for real differences; it must be germane to the
purpose of the law; it must not be limited to existing
conditions and it must apply equally to each member
of the class.3
In the instant case, the classification was justified on
the need of the BSP to compete in the labor market
for economists, accountants, lawyers, experts in
security, printing, commercial and rural banking,
financial intermediation fund management, and other
highly technical and professional personnel,4 which it
could not do unless personnel occupying top positions
are exempted from the coverage of Rep. Act No.
6758, the Salary Standardization Law.
Under Rep. Act No. 6758, however, professional
supervisory positions are covered by SG 9 to SG 33
which includes:
(R)esponsible positions of a managerial character
involving the exercise of management functions such
as planning, organizing, directing, coordinating,
controlling and overseeing within delegated authority
the activities of an organization, a unit thereof or of a
group, requiring some degree of professional,
technical or scientific knowledge and experience,
application of managerial or supervisory skills
required to carry out their basic duties and
responsibilities involving functional guidance and
control, leadership, as well as line supervision. These
positions require intense and thorough knowledge of
a specialized field usually acquired from completion of
a bachelor's degree or higher degree courses.
The positions in this category are assigned Salary
Grade 9 to Salary Grade 33.5 (Underscoring supplied)
SG 33 is assigned to the President of the Philippines;
SG 32 is for the Vice-President, Senate President,
Speaker of the House and Chief Justice of this Court.
SG 31 is for senators, associate justices of this Court,
chairpersons of the constitutional commissions,
department secretaries and other positions of
equivalent rank while SG 30 is assigned to the
constitutional commissioners and other positions of
equivalent rank.6
Economists, accountants, lawyers and other highly
technical and professional personnel are covered
under SG 9 to 29 as already adverted to.
Classification in law is the grouping of persons/objects
because they agree with one another in certain
particulars and differ from others in those same
particulars. In the instant case, however, SG 20 and
up do not differ from SG 19 and down in terms of
technical and professional expertise needed as the
entire range of positions all "require intense and
thorough knowledge of a specialized field usually
acquired from completion of a bachelor's degree or
higher courses."
Consequently, if BSP needs an exemption from Rep.
Act No. 6758 for key positions in order that it may hire
the best and brightest economists, accountants,
lawyers and other technical and professional people,
the exemption must not begin only in SG 20.
Under the circumstances, the cut-off point, the
great divide, between SG 19 and 20 is entirely
arbitrary as it does not have a reasonable or rational
foundation. This conclusion finds support in no less
than the records of the congressional deliberations,
the bicameral conference committee having pegged
the cut-off period at SG 20 despite previous
discussions in the Senate that the "executive group"
is "probably" SG 23 and above.7
Moreover, even assuming that the classification is
reasonable, nonetheless, its continued operation will
result in hostile discrimination against those
occupying grades 19 and below.
As pointed out by Mr. Justice Puno, some other
government corporations, by law, now exempt all their
employees from the coverage of Rep. Act No. 6758.
BSP employees occupying SG 19 and below,
however, shall remain under Rep. Act No. 6758
considering the rule that the subject classification, to
be valid, must not be limited only to conditions
existing as of the time the law was passed. Thus,
while BSP employees from SG 19 down will continue
to be covered under Rep. Act No. 6758, other
government employees of the same class and
occupying the same positions in government
corporations will be exempt.
I therefore concur with Justice Puno in that respect
and, considering his thorough discussion, I have
nothing more to add thereto.
DISSENTING OPINION
PANGANIBAN, J.:
With all due respect, I dissent. I believe that it would
be uncalled for, untimely and imprudent for this Court
to void the last proviso of the second paragraph of
Section 15(c) of Chapter 1 of Article II of Republic Act
(RA) 7653. In the first place, the assailed provision is
not unconstitutional, either on its face or as applied,
and the theory of relativeconstitutionality finds no
application to the case at bar. In the second place, a
becoming respect on the part of this Court for
Congress as a coequal and coordinate branch of
government dictates that Congress should be given
ample opportunity to study the situation, weigh its
options and exercise its constitutional prerogative to
enact whatever legislation it may deem appropriate to
address the alleged inequity pointed out by petitioner.
For the record, I am not against the exemption from
the Salary Standardization Law of the Bangko Sentral
ng Pilipinas (BSP) rank and file employees (with
Salary Grade 19 and below). Neither am I against
increases in their pay. I simply submit that (1) the
factual milieu of this case does not show a denial of
equal protection, (2) the theory of relative
constitutionality does not come into play, and (3)
petitioner should have addressed its plaint, not to this
Court, but to Congress in the first instance. I am
confident that given sufficient opportunity, the
legislature will perform its constitutional duty
accordingly. Hence, there is no need or warrant
for this Court to intervene in legislative work.
Theory of Relative Constitutionality
Not Applicable to Extraneous Circumstances
The ponencia advocates the application of the theory
of relative constitutionality  to the present case. The
theory says that a statute valid at one time may
become unconstitutional at another, because
of altered circumstances or changed conditions that
make the practical operation of such a statute
arbitrary or confiscatory. Thus, the provisions of that
statute, which may be valid as applied to one set of
facts but invalid as applied to another, cannot be
merely compared with those applicable under the
Constitution.
From the manner in which it has been utilized in
American and Philippine jurisprudence, however, this
novel theory finds relevance only when the factual
situation covered by an assailed law changes, not
when another law is passed pertaining to subjects not
directly covered by the former. Thus, the theory
applies only when circumstances that were
specifically addressed upon the passage of the law
change. It does not apply to changes or alterations
extraneous to those specifically addressed. To prove
my point, allow me then to tackle seriatim the cases
relied upon in the ponencia.1
Cited American Cases
Not Applicable to and
Not in Pari Materia with
Present Facts
Medill.2 The constitutionality issue in Medill v.
State  was raised by a bankruptcy trustee in regard to
a statute exempting damages that were awarded to
the claimants who suffered as a result of an
automobile accident.3Specifically, the contested
provision exempted from "attachment, garnishment,
or sale on any final process issued from any court" (1)
general damages and (2) future special damages
awarded in rights of action filed for injuries that were
caused to the person of a debtor or of a relative.4
The Supreme Court of Minnesota said that the
general damages portion of the right of action filed by
claimants for personal injuries sustained in fact
represented the monetary restoration of the physically
and mentally damaged person; hence, claims for such
damages could never constitute unreasonable
amounts for exemption purposes.5Such claims were
thus fully exempt. It added that the legislature had
assigned the role of determining the amounts that
were reasonable to the state's judicial process.6
While a statute may be constitutional and valid as
applied to one set of facts and invalid in its application
to another, the said Court limited its discussion only
to the set of facts as presented before it7 and held that
the statute was "not unconstitutional."8 Distinguishing
the facts of that case from those found in its earlier
rulings,9 it concluded that -- by limiting the assets that
were available for distribution to creditors10 -- the
contested provision therein was a bankruptcy relief for
protecting not only human capital,11 but also the
debtor's fundamental needs.
Cook.12 The bankruptcy trustee in In re Cook also
objected to the same statutory exemption, inter alia,
asserted by the debtors in another personal injury
claim.
The US Bankruptcy Court, following Medill, held that
such exemption was "violative of x x x the Minnesota
Constitution,"13 as applied to pre-petition special
damages,14 but not as applied to general
damages.15 The statute did not provide for any
limitation on the amount of exemption as to the former
type of damages.16 Neither did it set any objective
criteria by which the bankruptcy court may limit its
size.17
Nashville.18 The plaintiff in Nashville v.
Walters  questioned the constitutionality of a
Tennessee statute imposing upon railroad companies
one half of the total cost of grade separation in every
instance that the state's Highway Commission issued
an order for the elimination of a grade crossing. The
plaintiff rested its contention not on the exercise of
police power that promoted the safety of travel, but on
the arbitrariness and unreasonableness of the
imposition that deprived it of property without due
process of law.19
Reversing the judgment that the Supreme Court of
Tennessee had rendered against the plaintiff, the US
Supreme Court however did not declare the statute
unconstitutional.20 Instead, it remanded the case,
because the determination of facts showing
arbitrariness and unreasonableness should have
been made by the Tennessee Supreme Court in the
first place.21 It enumerated the revolutionary changes
incident to transportation wrought in the 1930s by the
widespread introduction of motor vehicles; the
assumption by the federal government of the
functions of a road builder; the resulting depletion of
rail revenues; the change in the character,
construction and use of highways; the change in the
occasion for the elimination of grade crossings, and in
the purpose and beneficiaries of such elimination; and
the change in the relative responsibility of railroads
and vehicles moving on the highways.22 In addition, it
held that the promotion of public convenience did not
justify requiring a railroad company -- any more than
others -- to spend money, unless it was shown that
the duty to provide such convenience rested upon
that company.23 Providing an underpass at one's own
expense for private convenience, and not primarily as
a safety measure, was a denial of due process.24
Atlantic.25 In Atlantic v. Ivey, the plaintiff filed an action
for damages against the railroad company for the
killing of a cow on an unfenced right of way of the
railway. The defendant pointed out that the original
Florida Act of 1889 and its later amendments in the
1940s had required railroad companies to fence their
tracks for the protection and safety of the traveling
public and their property against livestock roaming at
large. Thus, the defendant averred that -- without
imposing a similar fencing requirement on the owners
of automobiles, trucks and buses that carry
passengers upon unfenced public highways of the
state where such vehicles operated -- the equal
protection guarantees of the state and federal
constitutions would be violated.26
Reversing the lower court's judgment for the plaintiff,
the Supreme Court of Florida held that the application
of the contested statutes under then existing
conditions was violative of the equal protection
clause.27 Citing Nashville, that Court took judicial
notice of the fact that there were no motor carriers on
public roads when the statutes were originally
enacted. It also reasoned that the statutes were
enacted in the exercise of the state's police
power28 and were intended for the protection of
everyone against accidents involving public
transportation. Although motor-driven vehicles and
railroad carriers were under a similar obligation to
protect everyone against accidents to life and
property when conducting their respective
businesses, the hazard of accidents by reason of
cattle straying onto the line of traffic of motor-driven
vehicles was greater than that which arose when
cattle strayed onto the line of traffic of railroad
carriers.29 Yet the burden of expenses and penalties
that were rendered in favor of individuals who were
neither shippers nor passengers was imposed only on
railroad carriers.30
In addition, the railroad carriers would be held liable
for attorney's fees and double the value of the animals
killed in their railways, without even requiring the
plaintiffs who had sued them to prove the negligence
of such carriers in operating their
equipment.31 Although it was argued that motor-driven
vehicles had no authority to fence on state and county
highways over which they operated, the legislature
could nevertheless authorize and require them to
provide similar protection; or, in default thereof, to
suffer similar penalties that were incidental to using
such public roads for generating profit and serving the
public.32
Louisville.33 The plaintiff in Louisville v. Faulkner also
filed an action against defendant-railroad company to
recover the value of her mule that had strayed from
her premises and got struck and killed by the
company's train.34 The judgment of the lower court for
the plaintiff was based on the fact that the defendant
did not offer any evidence to rebut the prima facie
presumption of the latter's negligence under Kentucky
statutes.35
The Court of Appeals of Kentucky held the contested
provision unconstitutional and reversed the said
judgment.36Citing both Nashville and Atlantic, the
appellate court said that because such legislation
applied to all similar corporations and was aimed at
the safety of all persons on a train and the protection
of their property, it was sustained from its inception in
1893; however, under changed conditions, it could no
longer be so. The court recognized the fact that, in the
1950s, the inauguration and development of
transportation by motor vehicles on public highways
created even greater risks, not only to the occupants
of such vehicles but also to domestic animals.37 Yet,
the operators of these vehicles were not subjected to
the same extraordinary legal responsibility of proving
that for the killing of those animals on public roads,
they were free from negligence, unlike railroad
companies that struck and killed such animals on
private rights of way.38
Vernon.39 The plaintiff in Vernon v. City of Mount
Vernon sought to declare unconstitutional a city
zoning ordinance which had limited the business use
of its realty, locally known as the "Plaza," only to the
parking of automobiles and its incidental services.40
The Court of Appeals of New York ruled that the
ordinance was unconstitutional.41 That ruling also
affirmed the unanimous judgment earlier rendered in
favor of the plaintiff. Again citing Nashville, the New
York court ruled in the main that, no matter how
compelling and acute the community traffic problem
might be as to reach a strangulation point, the
solution did not lie in placing an undue and
uncompensated burden on a landowner in the guise
of a regulation issued for a public purpose.42 Although
for a long time the plaintiff's land had already been
devoted to parking, the ordinance that prohibited any
other use for it was not "a reasonable exercise of the
police power."43
While the city's common council had the right to pass
ordinances respecting the use of property according
to well-considered and comprehensive plans
designed to promote public health, safety and general
welfare, the exercise of such right was still subject to
the constitutional limitation that it may not be exerted
arbitrarily or unreasonably. Thus, the zoning
ordinance could not preclude the use of property for
any purpose for which it was reasonably
adapted.44Although valid when adopted in 1927, the
ordinance was stricken down, because its operation
under changed conditions in the 1950s proved
confiscatory, especially when the value of the greater
part of the land -- to be used, for instance, in the
erection of a retail shopping center -- was destroyed.45
Finally, Murphy v. Edmonds.46 An automobile driver
and her husband brought action against a tractor-
trailer driver and his employer and sought damages
for the severe injuries she had sustained in a collision.
Raised in issue mainly was the constitutionality of the
statutory cap on noneconomic damages in personal
injury actions.47
Affirming the judgment of the Court of Special
Appeals rejecting all challenges to the validity of the
law, the Court of Appeals of Maryland held that there
was no irrationality, arbitrariness, or violation of equal
protection in the legislative classification drawn
between (1) the less seriously injured tort claimants
whose noneconomic damages were less than the
statutory cap; and (2) the more seriously injured tort
claimants whose noneconomic damages were greater
than, and thus subject to, the statutory cap.48 Although
no express equal protection clause could be found in
Maryland's Constitution, the due process clause
therein nevertheless embodied equal protection to the
same extent as that found in the Fourteenth
Amendment49 of the federal Constitution.50
Indeed, the right to recover full damages for a
noneconomic injury was recognized by common law
even before the adoption of the state's Constitution,
but the said court declared that there was no vested
interest in any rule ordained by common
law.51 Concluding that only the traditional "rational
basis test" should be used, the appellate court also
rejected the lower court's view of the right to press a
claim for pain and suffering as an "important right"
requiring a "heightened scrutiny test" of the legislative
classification.52 Under the "rational basis test," such
legislative classification enjoyed a strong presumption
of constitutionality and, not being clearly arbitrary,
could not therefore be invalidated.53
Moreover, the law was an economic response to a
legislatively perceived crisis concerning not only the
availability, but also the cost of liability insurance in
the state.54 Putting a statutory cap on noneconomic
damages was "reasonably related to a legitimate
legislative objective,"55 for it led to a greater ease in
the calculation of insurance premiums, thus making
the market more attractive to insurers. Also, it
ultimately reduced the cost of such premiums and
made insurance more affordable to individuals and
organizations that perform needed medical services.56
From the foregoing discussion, it is immediately
evident that not one of the above-cited cases is
either applicable to or in pari materia with the
present case.
Medill not only upheld the constitutionality of the
contested provision therein, but also categorically
stated that the peculiar facts of the case prompted
such declaration. General damages were declared
exempt; the law allowing their exemption was
constitutional. Cook simply affirmed Medill when the
same contested provision was applied to an issue
similar to that which was raised in the latter case, but
then declared that provision unconstitutional when
applied to another issue. Thus, while general
damages were also declared exempt, the claims for
special damages filed prior to the filing of a petition for
relief were not, and the law allowing the latter's
exemption was unconstitutional.
The court's action was to be expected, because the
issue on special damages in Cook was not at all
raised in Medill, and there was no precedent on the
matter in Minnesota, other than the obiter dictum -- if
it can be called one -- in the latter case.57 Had that
issue been raised in Medill, a similar conclusion would
inevitably have been reached. In fact, that case
already stated that while the court "need not decide
whether special damages incurred prior to judgment x
x x [were] to be exempt in order to decide the
question"58 on general damages raised therein, it felt
that exempting special damages appeared
reasonable and likely to be applied, following an
earlier ruling in another case.59
Moreover, the facts of both Medill and Cook are not at
all akin to so-called "changed conditions" prompting
the declarations of constitutionality in the former and
unconstitutionality in the latter. Such "altered
circumstances" or "changed conditions" in these two
cases refer to the non-exemption of special damages
-- a subject matter distinct and separable, although
covered by the same assailed statute. In
fact, Cook precisely emphasized that "where a statute
is not inherently unconstitutional, it may be found
constitutional as applied to some separable subject
matters, and unconstitutional as applied to
others."60 In other words, it was the application of the
contested provision therein to an entirely different and
separable subject matter -- not the contested
provision itself -- that was declared unconstitutional,
but the statute itself was not inherently
unconstitutional to begin with.
Equally important, Nashville skirted the issue on
constitutionality. The "changed conditions" referred to
in that case, as well as in Atlantic and Louisville, were
the revolutionary changes in the mode of
transportation that were specifically covered by the
statutes respectively imposing additional costs upon
railroad companies only, requiring the fencing of their
tracks, or solely compelling them to present evidence
to rebut the presumption of their negligence.
In Vernon, these "changed conditions" were deemed
to be the economic changes in the 1950s, through
which the normal business use of the land was unduly
limited by the zoning ordinance that was intended to
address the acute traffic problem in the community.
Nashville simply took judicial notice of the change in
conditions which, together with the continued
imposition of statutory charges and fees, caused
deprivation of property without due process of
law. Atlantic, Louisville and Vernon all relied
upon Nashville, but then went further by rendering
their respective contested provisions unconstitutional,
because -- in the application of such provisions under
"changed conditions" -- those similarly situated were
no longer treated alike.
Finally, Murphy -- obviously misplaced because it
made no reference at all to the quoted sentence in
the ponencia -- even upheld the validity of its
contested provision. There was no trace, either, of
any "changed conditions." If at all, the legislative
classification therein was declared constitutional,
because it was in fact a valid economic response to a
legislatively perceived crisis concerning the
availability and cost of liability insurance.
In the present case, no "altered circumstances" or
"changed conditions" in the application of the assailed
provision can be found. It verily pertains to only one
subject matter, not separable subject matters as
earlier pointed out in both Medill and Cook. Hence, its
application remains and will remain consistent. Not
inherently unconstitutional to begin with, it cannot
now be declared unconstitutional. Moreover, herein
petitioner miserably fails to demonstrate -- unlike
in Nashville, Atlantic, Louisville, and Vernon -- how
those similarly situated have not been treated alike in
the application of the assailed provision.
Ponencia's Reference to
"Changed Conditions" Misplaced
From Nashville to Murphy, it can be seen that all the
contested statutes were passed in the exercise of
police power -- the inherent power of the State to
regulate liberty and property for the promotion of the
general welfare.61 The police measure may be struck
down when an activity or property that ought to be
regulated does not affect the public welfare; or when
the means employed are not reasonably necessary
for the accomplishment of the statute's purpose, and
they become unduly oppressive upon individuals.62 As
Justice Brandeis stresses in Nashville, "it may not be
exerted arbitrarily or unreasonably."63
In the case before us today, the assailed provision
can be considered a police measure that regulates
the income of BSP employees. Indisputably, the
regulation of such income affects the public welfare,
because it concerns not only these employees, but
also the public in general -- from whose various
credits the banks earn their income, the CB generates
its revenues, and eventually these employees get
their salaries and other emoluments.
Additionally, with the passage of RAs 6758 and 7653,
the means employed by the State to accomplish its
objectives are not unduly oppressive. They are in
fact reasonably necessary, not only to attract the
best and brightest bank regulatory personnel, but
also to establish professionalism and excellence
within the BSP in accordance with sound
principles of management. Nothing, therefore, is
arbitrary in the assailed provision; it cannot be
stricken down.
With due respect, the ponencia's reference to
"changed conditions" is totally misplaced. In the
above-cited US cases, this phrase never referred to
subsequent laws or executive pronouncements, but
rather to the facts and circumstances that the law or
ordinance specifically addressed upon its passage or
adoption. A statute that is declared invalid because of
a change in circumstances affecting its validity
belongs only to a class of emergency laws.64 Being a
manifestation of the State's exercise of its police
power, it is valid at the time of its enactment.
In contrast thereto, RA 7653 cannot be regarded
as an emergency measure that is merely
temporary in operation. It is not even a statute
limited to the exigency that brought it about. The
facts and circumstances it specifically addressed
upon its passage have not been shown to have
changed at all. Hence, the assailed provision of
such a declaratory statute cannot be invalidated.
Unlike congested traffic or motor-driven vehicles on
public roads, the payment of salaries at differing
scales in various GFIs vis-à-vis in the BSP, is not
such a change in conditions as would cause
deprivation of property without due process of law.
Petitioner's members have not been deprived of their
right to income as mandated by law. They have not
received less than what they were entitled to ever
since RA 7653 was passed eleven years ago.
To repeat, the factual situation that the assailed
provision specifically addressed upon passage of
this law has not changed. The same substantive
rights to a competitive and structured human
resource development program existing then still
exist now. Only the laws external to and not
amendatory of this law did. Even if these new
laws were to be considered as "changed
conditions," those who have been affected in the
BSP (as will be shown later) are not at all similarly
situated as those in the GFIs to compel their like
treatment in application.
In addition, the rulings in all the above-cited American
cases -- although entitled to great weight65 -- are
merely of persuasive effect in our jurisdiction66 and
cannot be stare decisis.67 These are not direct rulings
of our Supreme Court68 that form part of the Philippine
legal system.69
Granting gratia argumenti that the cited cases are to
be considered binding precedents in our
jurisdiction, Nashville -- the only one federal in
character -- does not even make a categorical
declaration on constitutionality.
Furthermore, Murphy maintains that "[s]imply
because a legal principle is part of the common law x
x x does not give it any greater degree of insulation
from legislative change."70 Common law, after all, is
"a growing and ever-changing system of legal
principles and theories x x x."71
Every statute is presumed constitutional.72 This axiom
reflects the respect that must be accorded to the
wisdom, integrity and patriotism of the legislature that
passed it and to the executive who approved
it.73 Understandably, therefore, the judiciary should be
reluctant to invalidate laws.74 Medill precisely
emphasizes that the "court's power to declare a
statute unconstitutional should be exercised with
extreme caution and only when absolutely
necessary."75 Although that case continues by saying
that unless it is inherently unconstitutional, a law
"must stand or fall x x x not upon assumptions" the
court may make, the ponencia is still dauntless in
relying thereon to support its arguments.
Rutter Does Not Even Apply
Again with due respect, the ponencia's citation of a
local case, Rutter,76 is also inappropriate. In the said
case, appellant instituted an action to recover the
balance, and interest thereon, of a contract of sale
entered into barely four months prior to the outbreak
of the Second World War.77 The lower court, however,
rendered judgment78 for appellee who set up as
defense79 the moratorium clause embodied in RA
342.80 The lower court reasoned further that the
obligation sought to be enforced was not yet
demandable under that law.81
Reversing the judgment, this Court invalidated82 the
moratorium clause,83 not because the law was
unconstitutional, but because both its continued
operation and enforcement had become
unreasonable and oppressive under postwar
circumstances of observable reconstruction,
rehabilitation and recovery of the country's general
financial condition.84 The forced vigil suffered by
prewar creditors was not only unwittingly extended
from eight to twelve years, but was also imposed
without providing for the payment of the
corresponding interest in the interim.85
Thus, the success of their collection efforts, especially
when their credits were unsecured, was extremely
remote.86Moreover, the settlement of claims filed with
the United States-Philippine War Damage
Commission was not only uncertain but was also
practically futile, for it depended entirely on the
appropriations to be made by the US Congress.
The contested clause in Rutter was definitely a
remedial measure passed to accord prewar debtors
who suffered the ravages of war an opportunity to
rehabilitate themselves within a reasonable time and
to pay their prewar debts thereafter, thus preventing
them from being victimized in the interim by their
prewar creditors. The purpose having been achieved
during the eight-year period, there was therefore no
more reason for the law. Cessante ratione legis
cessat et ipsa lex. When the reason for the law
ceases, the law itself ceases. But it does not become
unconstitutional.
The altered circumstances or changed
conditions in Rutter were specifically the very
circumstances that the law addressed at its passage;
they were not at all extraneous circumstances like
subsequent laws or executive pronouncements. The
eight-year moratorium period having lapsed, the
debtors' concerns had been adequately addressed. It
was now the turn of the creditors to be protected for
the pre-war loans they granted.
In stark contrast, the contested proviso in the instant
case is not a remedial measure. It is not subject to a
period within which a right of action or a remedy is
suspended. Since the reason for the law still subsists,
the law itself including the challenged proviso must
continue in existence and operation.
Relative Constitutionality
Not Based on Positive Law
Applying the concept of relative
constitutionality strongly advocated in the ponencia,
therefore, not only goes beyond the parameters of
traditional constitutionalism, but also finds no express
basis in positive law.87 While it has been asserted that
"a statute valid when enacted may become invalid by
change in conditions to which it is applied,"88 the
present case has shown no such change in conditions
that would warrant the invalidation of the assailed
provision if applied under such conditions. Hence, no
semblance of constitutional impuissance, other than
its conjured possibility, can be seen. In a
constitutional order that commands respect for
coequal branches of government, speculation by the
judiciary becomes incendiary and deserves no
respectable place in our judicial chronicles.
The ponencia further contends that the principles of
international law can operate to render a valid law
unconstitutional. The generally accepted definition
states that international law is a body of legal rules
that apply between sovereign states and such other
entities as have been granted international
personality.89 Government employees at the BSP with
salary grades 19 and below are not such entities
vested with international personality; any possible
discrimination as to them, in the light of the principles
and application of international law would be too far-
fetched.
The dangerous consequences of the majority's
Decision in the present case cannot and should not
be ignored. Will there now be an automatic SSL
exemption for employees of other GFIs and financial
regulatory agencies? Will such exemption not infringe
on Congress' prerogative? The ponencia  overlooks
the fact that the Bangko Sentral is not a GFI, but a
regulatory body of GFIs and other financial/banking
institutions. Therefore, it should not be compared with
them. There is no parity. The Bangko Sentral is more
akin to the Insurance Commission, the National
Telecommunications Commission, and the Energy
Regulatory Commission. Should not more appropriate
comparisons be made with such regulatory bodies
and their employees?
Respect for
Coequal Branch
The trust reposed in this Court is "not to formulate
policy but to determine its legality as tested by the
Constitution."90 "It does not extend to an unwarranted
intrusion into that broad and legitimate sphere of
discretion enjoyed by the political branches to
determine the policies to be pursued. This Court
should ever be on the alert lest, without design or
intent, it oversteps the boundary of judicial
competence."91 Judicial activism should not be
allowed to become judicial exuberance. "As was so
well put by Justice Malcolm: 'Just as the Supreme
Court, as the guardian of constitutional rights, should
not sanction usurpations by any other department of
the government, so should it as strictly confine its
own sphere of influence to the powers expressly or by
implication conferred on it by the Organic Act.'"92
Since Congress itself did not commit any
constitutional violation or gravely abusive conduct
when it enacted RA 7653, it should not be summarily
blamed for what the ponencia calls "altered
circumstances."93 Congress should be given the
opportunity to correct the problem, if any. I repeat, I
am not against exemption from the SSL of Bangko
Sentral employees with salary grades 19 and below.
Neither am I against increases in their pay. However,
it is Congress, not this Court, that should provide a
solution to their predicament, at least in the first
instance.
The remedy against any perceived legislative failure
to enact corrective legislation is a resort, not to this
Court, but to the bar of public opinion. The electorate
can refuse to return to Congress members who, in
their view, have been remiss in the discharge of their
constitutional duties.94 Our Constitution presumes
that, absent any inference of antipathy, improvident
legislative decisions "will eventually be rectified by the
democratic processes;"95 and that judicial intervention
is unwarranted, no matter how unwisely a political
branch may have acted.96
It is only the legislature, not the courts, that "must be
appealed to for the change."97 If, however, Congress
decides to act, the choice of appropriate measure lies
within its discretion. Once determined, the measure
chosen cannot be attacked on the ground that it is not
the best solution, or that it is unwise or
inefficacious.98 A law that advances a legitimate
governmental interest will be sustained, even if
it "works to the disadvantage of a particular group, or
x x x the rationale for it seems tenuous."99 To compel
this Court to make a more decisive but unnecessary
action in advance of what Congress will do is a
downright derogation of the Constitution itself, for it
converts the judiciary into a super-legislature and
invests it with a power that to it has never belonged.100
In the words of the great Sir William
Blackstone, "there is no court that has power to
defeat the intent of the Legislature, when couched in
such evident and express words, as leave no doubt
whether it was the intent of the Legislature, or
no[t]."101 As Rousseau further puts it, "according to
the fundamental compact, only the general will can
bind the individuals, and there can be no assurance
that a particular will is in conformity with the general
will, until it has been put to the free vote of the
people."102 Thus, instead of this Court invalidating a
sovereign act, Congress should be given the
opportunity to enact the appropriate measure to
address the so-called "changed conditions."
We cannot second-guess the mind of the
legislature as the repository of the sovereign will.
For all we know, amidst the fiscal crisis and
financial morass we are experiencing, Congress
may altogether remove the blanket exemption, put
a salary cap on the highest echelons,103 lower the
salary grade scales subject to SSL exemption,
adopt performance-based compensation
structures, or even amend or repeal the SSL itself,
but within the constitutional mandate that "at the
earliest possible time, the Government shall
increase the salary scales of x x x officials and
employees of the National
Government."104 Legislative reforms of whatever
nature or scope may be taken one step at a time,
addressing phases of problems that seem to the
legislative mind most acute.105 Rightly so, our
legislators must have "flexibility and freedom
from judicial oversight in shaping and limiting
their remedial efforts."106 Where there are
plausible reasons for their action, the Court's
"inquiry is at an end."107
Under the doctrine of separation of powers and the
concomitant respect for coequal and coordinate
branches of government, the exercise of prudent
restraint by this Court would still be best under the
present circumstances.
Not Grossly Discriminatory
There is no question that Congress neither violated
the Constitution nor gravely abused its discretion
when it enacted "The New Central Bank Act" to
establish and organize the BSP in 1993.108 Indeed,
RA 7653 is a valid legislative measure. Even the
majority concedes that in enacting that law, Congress
was well within its legislative powers. However,
the ponencia argues that the subsequent enactment
of laws granting "blanket exemption" from the
coverage of the SSL of all employees in seven
GFIs109 has made the contested proviso "grossly
discriminatory in its operation"110 and therefore
unconstitutional.
This conclusion, to my mind, is a non sequitur. The
mere possible effect of related or unrelated laws on
another law does not ipso facto make the latter
unconstitutional. Besides, as already discussed, the
theory of relative constitutionality is plainly
inapplicable to the present facts. Moreover,
the ponencia has assumed without proof that the BSP
rank and file employees are factually and actually
similarly situated as the rank and filers of Land Bank,
SSS, GSIS, etc., and it is clear from the discussion in
Mme. Justice Carpio Morales' Dissenting Opinion
that that is not really the case. In fact, there exist
some substantial differences in scope of work, job
responsibilities and so forth that would negate
the ponencia's assumption
No Indicium of Urgency
Other than its bare assertion that the continued
implementation of the assailed provision111 would
cause "irreparable damage and prejudice"112 to its
members, petitioner also fails to show a minimum
indicium of such extreme urgency as would impel this
Court to second-guess Congress.
Briefly, petitioner contends that (1) the creation of two
classes of employees within the BSP based on the
salary grade corresponding to their positions113 is
unreasonable, arbitrary and capricious class
legislation;114 and (2) the law itself discriminates
against rank and file employees of the BSP vis-à-vis
those of GFIs.115
These contentions are utterly unsubstantiated. They
find no support in law for granting the relief prayed for.
While it is true that all employees of the BSP are
appointed under the authority of the Monetary Board,
observe the same set of office rules and regulations,
and perform their work in practically the same
offices,116 it is equally true that the levels of difficulty
and responsibility for BSP employees with salary
grades 19 and below are different from those of other
BSP employees with salary grades 20 and above. All
those classes of position belonging to the
Professional Supervisory Category117 of the Position
Classification System118 under RA 6758, for instance,
are obviously not subjected to the same levels of
difficulty, responsibility, and qualification requirements
as those belonging to the Professional Non-
Supervisory Category,119 although to both categories
are assigned positions that include salary grades 19
and 20.120 To assert, as petitioner does, that the
statutory classification is just an "artifice based on
arbitrariness,"121 without more, is nothing more than
throwing a few jabs at an imaginary foe.
In like manner, petitioner's denunciation of the proviso
for allegedly discriminating against its members vis-à-
vis the rank and filers of other GFIs ignores the fact
that the BSP and the GFIs cited in the ponencia do
not belong to the same category of government
institutions, although it may be said that both are,
broadly speaking, "involved" in banking and
finance.122 While the former performs primarily
governmental or regulatory functions, the latter
execute purely proprietary ones.
Moreover, the extent of damage or prejudice inflicted
upon the BSP rank and file employees as a result of
the proviso is not shown by any evidence on record.
Indeed, neither the petitioner nor
the ponencia demonstrate the injuries sustained.123
There is no indication whatsoever of the precise
nature and extent of damages caused or to be
caused to petitioner's members by the continued
implementation of such provision. Surely, with no leg
to stand on, the allegation of petitioner that there is
great disparity in compensation, allowances or
benefits, cannot be considered to be stigmatizing and
wounding to the psyche of thousands of its
members.124 In fact, BSP employees, in general, also
share the same tribulations of workers and
employees in other regulatory government
offices.125 Not even petitioner's broad and bare claim
of "transcendental importance"126 can ipso
facto generate alacrity on the part of this Court.
In the United States more than sixty years ago,
Justice Brandeis delineated the famous canons of
avoidance under which their Supreme Court had
refrained from passing upon constitutional questions.
One such canon is that the Court must "not anticipate
a question of constitutional law in advance of the
necessity of deciding it x x x. It is not the habit of the
Court to decide questions of a constitutional nature
unless absolutely necessary to a decision of the
case."127 In addition, the Court must not "pass upon a
constitutional question although properly presented
by the record, if there is also present some other
ground upon which the case may be disposed of."128
Applying to this case the contours of constitutional
avoidance Brandeis brilliantly summarized, this Court
may choose to ignore the constitutional question
presented by petitioner, since there is indeed some
other ground upon which this case can be disposed of
-- its clear lack of urgency, by reason of which
Congress should be allowed to do its primary task of
reviewing and possibly amending the law.
Taking cognizance of this case and disposing of, or
altogether ignoring, the constitutional question leads
us to the same inevitable conclusion: the assailed
provision should not be declared "unconstitutional,
unless it is clearly so."129 Whichever path is chosen by
this Court, I am of the firm belief that such provision
cannot and should not be declared unconstitutional.
Since the authority to declare a legal provision void is
of a "delicate and awful nature,"130the Court should
"never resort to that authority, but in a clear and
urgent case."131 If ever there is doubt -- and clearly
there is, as manifested herein by a sharply divided
Court -- "the expressed will of the legislature should
be sustained."132
Indeed, this Court is of the unanimous opinion that
the assailed provision was at the outset constitutional;
however, with recent amendments to related
laws,133  the majority now feels that said provision
could no longer pass constitutional muster. To nail my
colors to the mast, such proclivity to declare it
immediately unconstitutional not only imprudently
creeps into the legislative sphere, but also sorely
clings to the strands of obscurantism. Future changes
in both legislation and its executive implementation
should certainly not be the benchmark for a
preemptive declaration of unconstitutionality,
especially when the said provision is not even
constitutionally infirm to begin with.
Moreover, the congressional enactment into law of
pending bills134 on the compensation of BSP
employees -- or even those related thereto -- will
certainly affect the assailed provision. This Court
should bide its time, for it has neither the authority nor
the competence to contemplate laws, much less to
create or amend them.
Given the current status of these pending bills, the
arguments raised by petitioner against the assailed
provision become all the more tenuous and
amorphous. I feel we should leave that provision
untouched, and instead just accord proper courtesy to
our legislators to determine at the proper time and in
the manner they deem best the appropriate content of
any modifications to it. Besides, there is an
omnipresent presumption of constitutionality in every
legislative enactment.135 No confutation of the proviso
was ever shown before; none should be considered
now.
Congress Willing
to Perform Duty
Far from being remiss in its duty, Congress is in fact
presently deliberating upon HB 00123, which
precisely seeks to amend RA 7653 by, inter alia,
exempting from the SSL136 all positions in the
BSP.137 Accordingly, this Court should not
preempt Congress, especially when the latter has
already shown its willingness and ability to
perform its constitutional duty.138 After all,
petitioner has not proven any extreme urgency for this
Court to shove Congress aside in terms of providing
the proper solution. Lawmaking is not a pool this
Court should wade into.
The Monetary Board has enough leeway to devise its
own human resource management system, subject to
the standards of professionalism and excellence that
are in accordance with sound principles of
management.139 This system must also be in close
conformity to the principles provided for, as well as
with the rates prescribed, under RA 6758.
More specifically, there should be "equal pay for
substantially equal work" and any differences in pay
should be based "upon substantive differences in
duties and responsibilities, and qualification
requirements of the positions."140 In determining the
basic compensation of all government personnel, due
regard should be given by the said Board to the
prevailing rates for comparable work in the private
sector.141 Furthermore, the reasonableness of such
compensation should be in proportion to the national
budget142 and to the possible erosion in purchasing
power as a result of inflation and other factors.143 It
should also abide by the Index of Occupational
Services prepared by the Department of Budget and
Management in accordance with the Benchmark
Position Schedule and other factors prescribed
thereunder.144
This Court has not been apprised as to how precisely
the human resource management system of the BSP
has been misused. In the absence of any evidence to
the contrary, it is therefore presumed that the law has
been obeyed,145 and that official duty has been
regularly performed146 in implementing the said law.
Where additional implementing rules would still be
necessary to put the assailed provision into continued
effect, any "attack on their constitutionality would be
premature."147
Surely, it would be wise "not to anticipate the serious
constitutional law problems that would arise under
situations where only a tentative judgment is dictated
by prudence."148 Attempts "at abstraction could only
lead to dialectics and barren legal questions and to
sterile conclusions unrelated to actualities."149 A
judicial determination is fallow when inspired by
purely cerebral casuistry or emotional puffery,
especially during rowelling times.
No Denial of Equal Protection
Even if the matter of urgency is set aside for the
nonce, and the Court exercises its power of judicial
review150 over acts of the legislature,151 I respectfully
submit that the Petition should still be dismissed
because the assailed provision's continued operation
will not result in a denial of equal protection.
Neither the passage of RA 7653 nor its
implementation has been "committed with grave
abuse of discretion amounting to lack or excess of
jurisdiction."152 Every statute is intended by the
legislature to operate "no further than may be
necessary to effectuate"153 its specific purpose. In the
absence of a clear finding as to its arbitrary, whimsical
or capricious application, the assailed provision
cannot be struck down as violative of the fundamental
law.
Moreover, "[u]nder the 'enrolled bill doctrine,'154 the
signing of a bill by the Speaker of the House and the
Senate President and the certification of the
[s]ecretaries of both Houses of Congress that it was
passed, are conclusive"155"not only of its provisions
but also of its due enactment."156 It is therefore futile
to welter in the thought that the original and amended
versions of the corresponding bill have no reference
to the proviso in question.157 Floor deliberations are
either expansive or restrictive. Bills filed cannot be
expected to remain static; they transmute in form and
substance. Whatever doubts there may be as to the
validity of any provision therein must necessarily be
resolved in its favor.
Brief Background of the
Equal Protection Clause
Despite the egalitarian commitment in the Declaration
of Independence that "all men are created equal," the
framers of the original Constitution of the United
States omitted any constitutional rule of equal
protection. Not until 1868, when the Fourteenth
Amendment thereto was ratified by the legislatures of
the several states of the Union,158 did the concept of
equal protection have a constitutional basis;159 and not
until the modern era did the United States Supreme
Court give it enduring constitutional significance.
From its inception, therefore, the equal protection
clause in "the broad and benign provisions of the
Fourteenth Amendment"160 already sought "to place
all persons similarly situated upon a plane of equality
and to render it impossible for any class to obtain
preferred treatment."161 Its original understanding was
the proscription only of certain discriminatory acts
based on race,162 although its proper construction,
when called to the attention of the US Supreme Court
in the Slaughter-House Cases, first involved exclusive
privileges.163 Eventually, other disfavored bases of
governmental action were identified. Labeled as
morally irrelevant
traits, gender, illegitimacy and alienagewere included
in this list.
Today, this clause is "the single most important
concept x x x for the protection of individual
rights."164 It does not, however, create substantive
rights.165 Its guaranty is merely "a pledge of the
protection of equal laws."166 Its "promise that no
person shall be denied the equal protection of the
laws must coexist with the practical necessity that
most legislation classifies for one purpose or another,
with resulting disadvantage to various groups or
persons."167
As mirrored in our Constitution,168 this clause enjoys
the interpretation given by its American framers169 and
magistrates. In fact, a century ago, this Court already
enunciated that "the mere act of cession of the
Philippines to the United States did not extend the
[US] Constitution here, except such parts as fall
within the general principles of fundamental
limitations in favor of personal rights formulated in the
[US] Constitution and its amendments, and which
exist rather by inference and the general spirit of the
[US] Constitution, and except those express
provisions of the [US] Constitution which prohibit
Congress from passing laws in their contravention
under any circumstances x x x."170 Being one such
limitation in favor of personal rights enshrined in the
Fourteenth Amendment, equal protection is thus
deemed extended to our jurisdiction.
Notably, Justice Malcolm himself said that the
constitutional law of Spain, then in effect, was
"entirely abrogated by the change of
sovereignty."171 As a result, it was the constitutional
law of the United States that was transposed to our
fledgling political and legal system. To be precise, the
principal organic acts of the Philippines included
President McKinley's Instructions to the Second
Philippine Commission of April 7, 1900, to which this
Court recognized the United States Constitution as a
limitation172 upon the powers of the military governor
then in charge of the Philippine Islands.173
In a catena of constitutional cases decided after the
change in sovereignty, this Court consistently held
that the equal protection clause requires all persons
or things similarly situated to "be treated alike, both
as to rights conferred and responsibilities imposed.
Similar subjects x x x should not be treated
differently, so as to give undue favor to some and
unjustly discriminate against others."174
Being a constitutional limitation first
recognized175 in Rubi176 -- citing Yick Wo177 -- as one
"derived from the Fourteenth Amendment to the
United States Constitution,"178 this clause prescribes
certain requirements for validity: the challenged
statute must be applicable to all members of a class,
reasonable, and enforced by the regular methods of
procedure prescribed, rather than by purely arbitrary
means.179 Its reasonableness must meet the
requirements enumerated in Vera180 and later
summarized in Cayat.181
Three Tests
Passed by Assailed Provision
I respectfully submit that the assailed provision
passes the three-tiered standard of review for equal
protection that has been developed by the courts
through all these years.
The Rational Basis Test
Under the first tier or the rational relationship or
rational basis test, courts will uphold a classification if
it bears a rational relationship to an accepted
governmental end.182 In other words, it must be
"rationally related to a legitimate state interest."183 To
be reasonable, such classification must be (1) based
on substantial distinction that makes for real
differences; (2) germane to the purposes of the law;
(3) not limited to existing conditions only; and (4)
equally applicable to all members of the same
class.184
Murphy states that when a governmental
classification is attacked on equal protection grounds,
such classification is in most instances reviewed
under the standard rational basis test.185 Accordingly,
courts will not overturn that classification, unless the
varying treatments of different groups are so
unrelated to the achievement of any legitimate
purpose that the courts can only conclude that the
governmental actions are irrational.186 A classification
must "be reasonable, not arbitrary, and x x x rest
upon some ground of difference having a fair and
substantial relation to the object of the legislation, so
that all persons similarly circumstanced shall be
treated alike."187
All these conditions are met in the present case. The
retention of the best and the brightest officials in an
independent central monetary authority188 is a valid
governmental objective that can be reasonably met by
a corresponding exemption from a salary
standardization scheme that is based on graduated
salary levels. The legislature in fact enjoys a wide
berth in continually classifying whenever it enacts a
law,189 provided that no persons similarly situated
within a given class are treated differently. To contend
otherwise is to be presumptuous about the legislative
intent or lack of it.
Whether it would have been a better policy to make a
more comprehensive classification "is not our
province to decide."190 The absence of legislative facts
supporting a classification chosen has no significance
in the rational basis test.191 In fact, "a legislative
choice is not subject to courtroom fact-finding and
may be based on rational speculation unsupported by
evidence or empirical data."192 Requiring Congress to
justify its efforts may even "lead it to refrain from
acting at all."193 In addition, Murphy holds that the
statutory classification "enjoys a strong presumption
of constitutionality, and a reasonable doubt as to its
constitutionality is sufficient to sustain it."194
Respectfully, therefore, I again differ from
the ponencia's contention that the amendments of the
charters of the seven GFIs from 1995 to 2004195 have
already "unconstitutionalized" the continued
implementation of the BSP proviso. Be it remembered
that the first six GFIs mentioned by Mr. Justice Puno
-- namely the LBP, SSS, SBGFC, GSIS, DBP and
HGC -- do not stand in the same class and category
as the BSP.196
While the BSP, as mentioned earlier, is
a regulatory agency
performing governmental functions, the six
aforementioned GFIs perform proprietary functions
that chiefly compete with private banks and other non-
bank financial institutions. Thus, the so-called concept
of relative constitutionality again finds no application.
Under the rational relationship test, there can be no
unequal protection of the law between employees of
the BSP and those of the GFIs. Further, the equal
protection clause "guarantees equality, not identity of
rights."197 A law remains valid even if it is limited "in
the object to which it is directed."198
"Defining the class of persons subject to a regulatory
requirement x x x inevitably requires that some
persons who have an almost equally strong claim to
favored treatment be placed on different sides of the
line, and the fact that the line might have been drawn
differently at some points is a matter for legislative,
rather than judicial, consideration."199 In fact, as long
as "the basic classification is rationally based, uneven
effects upon particular groups within a class are
ordinarily of no constitutional concern."200 "It is not the
province of this Court to create substantive
constitutional rights in the name of guaranteeing
equal protection of the laws."201
On the other hand, the Philippine Deposit Insurance
Corporation (PDIC) is also a government regulatory
agency almost on the same level of importance as the
BSP. However, its charter was only amended very
recently -- to be more precise, on July 27,
2004.202 Consequently, it would be most unfair to
implicitly accuse Congress of inaction, discrimination
and unequal treatment. Comity with and courtesy to a
coequal branch dictate that our lawmakers be given
sufficient time and leeway to address the alleged
problem of differing pay scales. "Only by faithful
adherence to this guiding principle of judicial review
of legislation is it possible to preserve to the
legislative branch its rightful independence and its
ability to function."203 Besides, it is a cardinal rule that
courts first ascertain whether construction of a statute
is fairly possible by which any constitutional question
therein may be avoided.204
To explain further, while the possible changes
contemplated by Congress in HB 00123 are similar, if
not identical, to those found in the amended charters
of the seven other GFIs already mentioned, the
governmental objectives as explicitly stated in the
explanatory note remain -- to ascertain BSP's
effectiveness and to strengthen its supervisory
capability in promoting a more stable banking system.
This fact merely confirms that the present
classification and distinction under the assailed
provision still bear a rational relationship to the same
legitimate governmental objectives and should,
therefore, not be invalidated.
The validity of a law is to be determined not by
its effects on a particular case or by an incidental
result arising therefrom, but by the purpose and
efficacy of the law in accomplishing that effect or
result.205 This point confirms my earlier position that
the enactment of a law is not the same as
its operation. Unlike Vera in which the Court
invalidated the law on probation because of the
unequal effect in the operation of such law,206 the
assailed provision in the present case suffers from no
such invidious discrimination. It very well achieves its
purpose, and it applies equally to all government
employees within the BSP. Furthermore, the
application of this provision is not made subject to
any discretion, uneven appropriation of funds, or time
limitation. Consequently, such a law neither denies
equal protection nor permits of such denial.
The Strict Scrutiny Test
Under the second tier or the strict scrutiny test, the
Court will require the government to show a
compelling or overriding end to justify (1) the limitation
on fundamental rights or (2) the implication of suspect
classes.207 Where a statutory classification impinges
upon a fundamental right or burdens a suspect class,
such classification is subjected to strict scrutiny.208 It
will be upheld only if it is shown to be "suitably
tailored to serve a compelling state interest."209
Therefore, all legal restrictions that curtail the civil
rights of a suspect class, like a single racial or ethnic
group, are immediately suspect. "That is not to say
that all such restrictions are unconstitutional. It is to
say that courts must subject them to the most rigid
scrutiny."210 Pressing public necessity, for instance,
may justify the existence of those restrictions, but
antagonism toward such suspect classes never can.
To date, no American case -- federal or state --
has yet been decided involving equal pay
schemes as applied either to government
employees vis-à-vis private ones, or within the
governmental ranks. Salary grade or class of
position is not a fundamental right like
marriage,211 procreation,212 voting,213 speech214and
interstate travel.215 American courts have in fact
even refused to declare government employment
a fundamental right.216
As to suspect classes, non-exempt government
employees (those with salary grades below 20) are
not a group "saddled with such disabilities, or
subjected to such a history of purposeful unequal
treatment, or relegated to such a position of political
powerlessness, as to command extraordinary
protection from the majoritarian political
process."217 They are a group so much unlike
race,218 nationality,219 alienage220 or denominational
preference221-- factors that are "seldom relevant to the
achievement of any legitimate state interest that laws
grounded in such considerations are deemed to
reflect prejudice and antipathy x x x."222
Again, with due respect, the ponencia's223 reference to
Yick Wo,224 therefore, is unbefitting. Indeed that case
held that "[t]hough the law itself be fair on its face and
impartial in appearance, yet, if it is applied and
administered by public authority with an evil eye and
an unequal hand, so as practically to make unjust and
illegal discriminations between persons in similar
circumstances, material to their rights, the denial of
equal justice is still within the prohibition of the
[C]onstitution."225 The facts in Yick Wo clearly point
out that the questioned ordinances therein --
regulating the use of wooden buildings in the
business of keeping and conducting laundries --
operated in hostility to the race and nationality to
which plaintiffs belonged, being aliens and subjects of
the Emperor of China.226 To a board of supervisors
was given the arbitrary power to withhold permits to
carry on a harmless and useful occupation on which
the plaintiffs depended for livelihood.227
In contrast, no such arbitrariness is found in the case
at bar. Neither is there any allegation of abuse of
discretion in the implementation of a human resource
development program. There is also no allegation of
hostility shown toward employees receiving salaries
below grade 20.
In fact, for purposes of equal protection analysis,
financial need alone does not identify a suspect
class.228 And even if it were to consider government
pay to be akin to wealth, it has already been held that
"where wealth is involved, the Equal Protection
Clause does not require absolute equality or precisely
equal advantages."229 After all, a law does not
become invalid "because of simple
inequality,"230 financial or otherwise.
Since employment in the government is not a
fundamental right and government employees below
salary grade 20 are not a suspect class, the
government is not required to present a compelling
objective to justify a possible infringement under the
strict scrutiny test. The assailed provision thus cannot
be invalidated via the strict scrutiny gauntlet. "In areas
of social and economic policy, a statutory
classification that neither proceeds along suspect
lines nor infringes fundamental constitutional rights
must be upheld against equal protection challenge if
there is any reasonably conceivable state of facts that
could provide a rational basis for the classification."231
The Intensified Means Test
Under the third tier or the intensified means test, the
Court should accept the legislative end, but should
closely scrutinize its relationship to the classification
made.232 There exist classifications that are subjected
to a higher or intermediate degree of scrutiny than the
deferential or traditional rational basis test. These
classifications, however, have not been deemed to
involve suspect classes or fundamental rights; thus,
they have not been subjected to the strict scrutiny
test. In other words, such classifications must be
"substantially related to a sufficiently important
governmental interest."233 Examples of these so-
called "quasi-suspect" classifications are those based
on gender,234 legitimacy under certain
circumstances,235 legal residency with regard to
availment of free public education, civil service
employment preference for armed forces veterans
who are state residents upon entry to military service,
and the right to practice for compensation the
profession for which certain persons have been
qualified and licensed.236
Non-exempt government employees may be
a sensitive but not a suspect class, and their
employment status may be important although not
fundamental. Yet, the enactment of the assailed
provision is a reasonable means by which the State
seeks to advance its interest.237 Since such
provision sufficiently serves important governmental
interests and is substantially related to the
achievement thereof, then, again it stands.
"In the area of economics and social welfare, a State
does not violate the Equal Protection Clause merely
because the classifications made by its laws are
imperfect. If the classification has some 'reasonable
basis,' it does not offend the Constitution simply
because the classification 'is not made with
mathematical nicety or because in practice it results
in some inequality.'"238 "The very idea of classification
is that of inequality, so that x x x the fact of inequality
in no manner determines the matter of
constitutionality."239
A statute, therefore, "is not invalid under the
Constitution because it might have gone farther than
it did, or because it may not succeed in bringing
about the result that it tends to produce."240 Congress
does not have to "strike at all evils at the same
time."241 Quoting Justice Holmes, a law "aimed at
what is deemed an evil, and hitting it presumably
where experience shows it to be most felt, is not to be
upset by thinking up and enumerating other instances
to which [the law] might have been applied equally
well, so far as the court can see. That is for the
legislature to judge[,] unless the case is very
clear."242 This Court is without power to disturb a
legislative judgment, unless "there is no fair reason
for the law that would not require with equal force its
extension to others whom it leaves untouched."243 To
find fault with a legislative policy "is not to establish
the invalidity of the law based upon it."244
Epilogue
After that rather lengthy discourse, permit me to
summarize. I respectfully submit that the assailed
provision is not unconstitutional either on its face or
as applied.
First, the theory of relative constitutionality is
inapplicable to and not in pari materia with the present
facts. It pertains only to the circumstances that an
assailed law specifically addressed upon its passage,
and not to extraneous circumstances.
The American cases cited in the ponencia prove my
point. The laws therein that have been declared
invalid because of "altered circumstances" or
"changed conditions" are of the emergency type
passed in the exercise of the State's police power,
unlike the law involved in the present case. Moreover,
our ruling in Rutter does not apply, because the
assailed provision in the present case is not a
remedial measure subject to a period within which a
right of action or a remedy is suspended. Since the
reason for the passage of the law still continues, the
law itself must continue.
Second, this Court should respect Congress as a
coequal branch of government. No urgency has been
shown as to require the peremptory striking down of
the assailed provision, and no injuries have been
demonstrated to have been sustained as to require
immediate action on the judiciary's part.
The legislative classification of BSP employees into
exempt and non-exempt, based on the salary grade
of their positions, and their further distinction (albeit
perhaps not by design) from the employees of various
GFIs are nevertheless valid and reasonable in
achieving the standards of professionalism and
excellence within the BSP -- standards that are in
accordance with sound principles of management and
the other principles provided for under RA 6758. They
are employees not subjected to the same levels of
difficulty, responsibility, and qualification
requirements. Besides, the BSP performs primarily
governmental or regulatory  functions, while the GFIs
cited in the ponencia execute purely proprietary ones.
Congress is in fact presently deliberating upon
possible amendments to the assailed provision. Since
there is no question that it validly exercised its power
and did not gravely abuse its discretion when it
enacted the law, its will must be sustained. Under the
doctrine of separation of powers with concomitant
respect for coequal and coordinate branches of
government, this Court has neither the authority nor
the competence to create or amend laws.
Third, the assailed provision passes the three-tiered
standard of review for equal protection. It is both a
social and an economic measure rationally related to
a governmental end that is not prohibited. Since
salary grade, class of position, and government
employment are not fundamental or constitutional
rights, and non-exempt government employees or
their financial need are not suspect classes, the
government is not at all required to show a compelling
state interest to justify the classification made. The
provision is also substantially related to the
achievement of sufficiently important governmental
objectives. A law does not become invalid because of
simple inequality, or because it did not strike at all
evils at the same time.
At bottom, whichever constitutional test is used,
the assailed provision is not unconstitutional.
Moreover, a thorough scrutiny of the Petition
reveals that the issue of equal protection has
been raised only in regard to the
unconstitutionality of the proviso at its
inception,245 and not by reason of the alleged
"changed conditions" propounded by
the ponencia. With greater reason then that the
Petition should be denied.
In our jurisdiction, relative constitutionality is a rarely
utilized theory having radical consequences; hence, I
believe it should not be imposed by the Court
unilaterally. Even in the US, it applies only when there
is a change in factual circumstances covered by the
law, not when there is an enactment of another law
pertaining to subjects not directly covered by the
assailed law. Whether factual conditions have so
changed as to call for a partial or even a total
abrogation of the law is a matter that rests primarily
within the constitutional prerogative of Congress to
determine.246 To justify a judicial nullification, the
constitutional breach of a legal provision must be very
clear and unequivocal, not doubtful or
argumentative.247
In short, this Court can go no further than to inquire
whether Congress had the power to enact a law; it
cannot delve into the wisdom of policies it adopts or
into the adequacy under existing conditions of
measures it enacts.248 The equal protection clause is
not a license for the courts "to judge the wisdom,
fairness, or logic of legislative choices."249 Since
relative constitutionality was not discussed by the
parties in any of their pleadings, fundamental
fairness and evenhandedness still dictate that
Congress be heard on this concept before the
Court imposes it in a definitive ruling.
Just a final observation at this juncture. It seems to
me that when RA 7653 was enacted, the real focus of
the second paragraph of Section 15(c) of Chapter 1 of
Article II of the statute was to enable the officers and
executives of the BSP to enjoy a wider scope of
exemption from the Compensation Classification
System than that stated in the last part of Section 9 of
the Salary Standardization Law. As can be gleaned
from the deliberations on the bill, the mention of BSP
employees with salary grade 19 and below seems to
have been purely incidental in the process of defining
who were part of the executive and officer corps. It
appears that the "classification" (if we can call it that)
of the rank and filers with salary grade 19 and below,
via the challenged proviso, came about not by design.
And it was only after the later pieces of legislation
were promulgated affecting the charters of the LBP,
GSIS, SSS, DBP, etc. that the proviso came to be
considered as "discriminatory."
In these trying times, I cannot but sympathize with the
BSP rank and filers on account of the situation they
have found themselves in, and I do not mean to
begrudge them the opportunity to receive a higher
compensation package than what they are receiving
now. However, they are operating on the simplistic
assumption that, being rank and file employees
employed in a GFI, they are automatically entitled to
the same benefits, privileges, increases and the like
enjoyed by any other rank and file employee of a GFI,
seeing as they are all working for one and the same
government anyway.
It could also have something to do with the fact that
Central Bank employees were quite well paid in the
past. They may have overlooked the fact that the
different GFIs are regulated by their respective
charters, and are mandated to perform different
functions (governmental or proprietary).
Consequently, their requirements and priorities are
likewise different, and differ in importance in the
overall scheme of things, thus necessitating some
degree of differentiation and calibration in respect of
resource allocation, budgets and appropriations, and
the like.
The long and short of it is that there can be no such
thing as an automatic entitlement to increases in
compensation, benefits and so forth, whether we
consider the BSP rank and filers similarly situated
along with other rank and filers of GFIs, or as being in
a class by themselves. This is because the BSP is,
strictly speaking, not a GFI but rather, the regulatory
agency of GFIs.
The foregoing becomes even more starkly clear when
mention is again made of the fiscal/budget deficit
hobbling the national government, which has, not
surprisingly, triggered waves of belt tightening
measures throughout every part of the bureaucracy.
This particular scenario puts Congress somewhat at
odds with itself. On the one hand, it is studying HB
00123 with the end in view of precisely addressing the
principal concern of the petitioner. On the other hand,
it is also looking into how the various exemptions from
the Salary Standardization Law can be rationalized or
done away with, in the hope of ultimately reducing the
gargantuan deficit.
Thankfully, the Court is not the one having to grapple
with such a conundrum. It behooves us to give
Congress, in the exercise of its constitutional mandate
and prerogative, as much elbow room and breathing
space as it needs in order to tackle and perhaps
vanquish the many headed monster.
And while we all watch from the sidelines, we can all
console ourselves and one another that after all,
whether we find ourselves classified-out as BSP rank
and filers, or officers and executives, or employees
and members of the judiciary, we are -- all of us -- in
the same boat, for we have all chosen to be in "public
service," as the term is correctly understood. And
what is public service if it does not entail a certain
amount of personal sacrifice on the part of each one
of us, all for the greater good of our society and
country. We each make our respective sacrifices,
sharing in the burden today, in the hope of a better
tomorrow for our children and loved ones, and our
society as a whole. It makes us strong. For this we
can be thankful as well.
WHEREFORE, I vote to DISMISS the Petition. I
maintain that the last proviso of the second paragraph
of Section 15(c) of Chapter 1 of Article II of Republic
Act No. 7653 is constitutional. Congress should be
given adequate opportunity to enact the appropriate
legislation that will address the issue raised by
petitioner and clear the proviso of
any possible or perceived  infringement of the equal
protection clause. At the very least, Congress and
herein respondents should be given notice and
opportunity to respond to the possible application
of the theory of relative constitutionality before it
is, if at all, imposed by this Court.
DISSENTING OPINION
CARPIO, J.:
I dissent from the majority opinion.
First, the majority opinion does not annul a law but
enacts a pending bill in Congress into law. The
majority opinion invades the legislative domain by
enacting into law a bill that the 13th Congress is now
considering for approval. The majority opinion does
this in the guise of annulling a proviso in Section
15(c), Article II of Republic Act No. 7653 ("RA 7653").
Second, the majority opinion erroneously classifies
the Bangko Sentral ng Pilipinas ("BSP"), a regulatory
agency exercising sovereign functions, in the same
category as non-regulatory corporations exercising
purely commercial functions like Land Bank of the
Philippines ("LBP"), Social Security System ("SSS"),
Government Service Insurance System ("GSIS"),
Development Bank of the Philippines ("DBP"), Small
Borrowers Guarantee Fund Corporation ("SBGFC"),
and Home Guarantee Corporation ("HGC").
Usurpation of Legislative Power
There is a bill now pending in Congress, House Bill
No. 123, seeking to exempt the rank-and-file
employees of BSP from the Salary Standardization
Law ("SSL"). A similar bill was filed in the
12th Congress together with the bill exempting from
the SSL all officials and employees of Philippine
Deposit Insurance Corporation ("PDIC"). The bill
exempting PDIC employees from SSL was approved
on 27 July 2004 in the dying days of the
12th Congress. However, due to lack of time, the bill
exempting BSP rank-and-file employees did not reach
third reading.
What the majority opinion wants is to preempt
Congress by declaring through a judicial decision that
BSP rank-and-file employees are now exempt from
the SSL. The majority opinion seeks to legislate the
exemption from SSL by declaring void the proviso in
Section 15(c), Article II of RA 7653 ("proviso"), which
states:
A compensation structure, based on job evaluation
studies and wage surveys and subject to the Board's
approval, shall be instituted as an integral component
of the Bangko Sentral's human resource development
program: Provided, That the Monetary Board shall
make its own system conform as closely as possible
with the principles provided for under Republic Act
No. 6758. Provided, however, That compensation
and wage structure of employees whose positions
fall under salary grade 19 and below shall be in
accordance with the rates prescribed under
Republic Act No. 6758. (Emphasis supplied)
The majority opinion justifies its action by saying
that while the proviso was valid when first
enacted, it is now invalid because its continued
operation is discriminatory against BSP rank-and-file
employees. All officials and employees of other
government financial institutions ("GFIs") like GSIS,
LBP, DBP, SSS, SBGFC, HGC and PDIC are now
exempt from the SSL. Congress granted the
exemptions over the years, for LBP in 1995, SSS in
1997, GSIS in 1997, SBGFC in 1997, DBP in 1998,
HGC in 2000, and PDIC in 2004.
Among the GFIs granted exemption from SSL, only
PDIC is a regulatory agency. PDIC received its SSL
exemption only this year - 2004. PDIC is the first
regulatory GFI whose rank-and-file employees are
exempt from the SSL. Rank-and-file employees of
BSP, a GFI exercising regulatory functions, cannot at
this time claim any unreasonable or oppressive delay
in securing legislative exemption from SSL, assuming
Congress is disposed to grant an exemption.
At this time, this Court cannot say that the continued
validity of the proviso in Section 15(c) of RA 7653 is
unreasonable and oppressive on BSP rank-and-file
employees. This Court cannot say that Congress
gravely abused its jurisdiction in not exempting BSP
rank-and-file employees from the SSL at the same
time as PDIC. Congress is now considering BSP's
exemption, and this Court cannot imperiously
conclude that Congress had more than enough time
to act on BSP's exemption.
Even if Congress does not act on BSP's exemption
for more than one year, it does not follow that this
Court should then exempt BSP rank-and-file
employees from the SSL. As the law now stands,
PDIC is the only regulatory GFI whose rank-and-file
employees are exempt from SSL. All other GFIs
exercising regulatory functions are not exempt from
the SSL, including BSP whose rank-and file
employees are subject to the SSL.
The grant of exemption to PDIC is the legislative act
that is questionable for being discriminatory against
all other self-sustaining government agencies
exercising regulatory functions. Such grant to one
regulatory agency, without a similar grant to other
regulatory agencies whose incomes exceed their
expenses, creates a class of exemption that has
dubious basis. In short, the singular exemption of
PDIC from the SSL discriminates against all other
self-sustaining government agencies that exercise
regulatory functions.
The grant of SSL exemption to GFIs has ramifications
on the deepening budget deficit of the government.
Under Republic Act No. 76561, all GFIs are required
to remit to the National Treasury at least 50% of their
annual net earnings. This remittance forms part of the
government revenues that fund the annual
appropriations act. If the remittances from GFIs
decrease, the national revenues funding the annual
appropriations act correspondingly decrease. This
results in widening even more the budget deficit.
A bigger budget deficit means there are no revenues
to fund salary increases of all government
employees who are paid out of the annual
appropriations act. The exemption of GFIs from SSL
may delay or even prevent a general increase in the
salary of all government employees, including rank-
and-file employees in the judiciary. This Court cannot
simply ordain an exemption from SSL without
considering serious ramifications on fiscal policies of
the government. This is a matter better left to the
Executive and Legislative Departments. This Court
cannot intrude into fiscal policies that are the province
of the Executive and Legislative Departments.
Indeed, Congress should pass a law rationalizing the
exemptions of all government agencies from the SSL.
The piecemeal grant of exemptions is creating
distortions in the salary structure of government
employees similarly situated. Such rationalization,
however, is not the function of the Court. Even as a
practical matter, this Court does not have the
necessary data to rationalize the exemptions of all
government agencies from the SSL.
The power of judicial review of legislative acts
presumes that Congress has enacted a law that may
violate the Constitution. This Court cannot exercise its
power of judicial review before Congress has enacted
the questioned law. In this case, Congress is still
considering the bill exempting BSP rank-and-file
employees from the SSL. There is still no opportunity
for this Court to exercise its review power because
there is nothing to review.
The majority opinion, however, claims that because of
the failure of Congress to enact the bill exempting
BSP rank-and-file employees from the SSL, this Court
should now annul the proviso in Section 15(c) of RA
7653 to totally exempt BSP from the SSL. This is no
longer an exercise of the power of judicial review but
an exercise of the power of legislation - a power that
this Court does not possess. The power to exempt a
government agency from the SSL is a legislative
power, not a judicial power. By annulling a prior valid
law that has the effect of exempting BSP from the
SSL, this Court is exercising a legislative power.
The power of judicial review is the power to strike
down an unconstitutional act of a department or
agency of government, not the power to initiate or
perform an act that is lodged in another department or
agency of government. If this Court strikes down the
law exempting PDIC from the SSL because it is
discriminatory against other government agencies
similarly situated, this Court is exercising its judicial
review power. The effect is to revert PDIC to its
previous situation of being subject to the SSL, the
same situation governing BSP and other agencies
similarly situated.
However, by annulling the proviso in Section 15(c) of
RA 7653, BSP is not reverted to its previous
situation but brought to a new situation that BSP
cannot attain without a new legislation. Other
government agencies similarly situated as BSP
remain in their old situation – still being subject to the
SSL. This is not an annulment of a legislative act but
an enactment of legislation exempting one agency
from the SSL without exempting the remaining
agencies similarly situated.
The majority opinion cites Rutter v. Esteban2 as
precedent for declaring the proviso in Section 15(c) of
RA 7653 unconstitutional. Rutter is not applicable to
the present case. In Rutter, the Court declared on 18
May 1953 that while the Debt Moratorium Law was
valid when enacted on 26 July 1948, its "continued
operation and enforcement x x x is unreasonable and
oppressive, and should not be prolonged a minute
longer." With the discontinuance of the effectivity of
the Debt Moratorium Law, the debtors who benefited
from the law were returned to their original
situation prior to the enactment of the law. This
meant that the creditors could resume collecting from
the debtors the debts the payment of which was
suspended by the Debt Moratorium Law. The
creditors and debtors were restored to their
original situation before the enactment of the Debt
Moratorium Law. No debtor or creditor was placed
in a new situation that required the enactment of a
new law.
In the present case, declaring the proviso in Section
15(c) of RA 7653 no longer legally effective does not
restore the BSP rank-and-file employees to their
original situation, which subjected them to the SSL.
Instead, the discontinuance of the validity of the
proviso brings the BSP rank-and-file employees to
a new situation that they are not entitled without
the enactment of a new law. The effect of the
majority decision is to legislate a new law that brings
the BSP rank-and–file employees to a new situation.
Clearly, the Rutter doctrine does not apply to the
present case.
Erroneous Classification of BSP as GFI
Similar to LBP, DBP and Others
The majority opinion classifies BSP as a GFI just like
GSIS, LBP, DBP, SSS, SBGFC, HGC and PDIC.
Here lies the basic error of the majority opinion. GSIS,
LBP, DBP, SSS, SBGFC and HGC are GFIs but are
not regulatory agencies. BSP and PDIC are GFIs
but are also regulatory agencies just like other
governmental regulatory agencies. The majority
opinion is comparing apples with oranges. GFIs that
do not exercise regulatory functions operate just like
commercial financial institutions. However, GFIs that
exercise regulatory functions, like BSP and PDIC, are
unlike commercial financial institutions. BSP and
PDIC exercise sovereign functions unlike the other
non-regulatory GFIs.
Non-regulatory GFIs derive their income solely from
commercial transactions. They compete head on with
private financial institutions. Their operating
expenses, including employees' salaries, come from
their own self-generated income from commercial
activities. However, regulatory GFIs like BSP and
PDIC derive their income from fees, charges and
other impositions that all banks are by law
required to pay. Regulatory GFIs have no
competitors in the private sector. Obviously, BSP and
PDIC do not belong to the same class of GFIs as
LBP, SSS, GSIS, SBGFC, DBP and HGC.
Exempting non-regulatory GFIs from the SSL is
justified because these GFIs operate just like private
commercial entities. Their revenues, from which they
pay the salaries of their employees, come solely from
commercial operations. None of their revenues
comes from mandatory government exactions.
This is not the case of GFIs like BSP and PDIC which
impose regulatory fees and charges.
Conclusion
Under the Constitution, Congress is an independent
department that is a co-equal of the Supreme Court.
This Court has always accorded Congress the great
respect that it deserves under the Constitution. The
power to legislate belongs to Congress. The power to
review enacted legislation belongs to the Supreme
Court. The Supreme Court has no power to declare a
pending bill in Congress as deemed enacted into law.
That is not the power to review legislation but the
power to usurp a legislative function.
The majority opinion is leading this Court into
usurping the primary jurisdiction of Congress to enact
laws. The majority opinion brings this Court and
Congress into a needless clash of powers - whether
the power of judicial review of legislative acts includes
the power to initiate legislative acts if this Court
becomes impatient with the pace of legislative
process. Clearly, this Court does not have the power
to legislate. Congress has a right to guard zealously
its primary power to enact laws as much as this Court
has a right to guard zealously its power to review
enacted legislations.
Accordingly, I vote to dismiss the petition.
DISSENTING OPINION
CARPIO MORALES, J.:
Is being an employee of a Government Owned or
Controlled Corporation (GOCC) or a Government
Financial Institution (GFI) a reasonable and sufficient
basis for exemption from the compensation and
position classification system for all government
personnel provided in Republic Act No. 6758,1 entitled
Compensation and Position Classification Act of
1989, also known as the Salary Standardization Law?
The main opinion, by simultaneously applying two
different standards for determining compliance with
the constitutional requirement of equal protection - the
"rational basis test" and the "strict scrutiny test" -
under the rubric of "relative constitutionality," holds
that it is.
Upon studied reflection, however, I find that such
conclusion is contrary to the weight of the applicable
legal authorities; involves an evaluation of the wisdom
of the law and a pre-emption of the congressional
power of appropriation, which are both beyond the
scope of judicial review; and results in increased,
rather than reduced, inequality within the government
service - creating, as it does, a preferred sub-class of
government employees, i.e.employees of GFIs,
devoid of either a rational factual basis or a
discernable public purpose for such classification.
Consequently, I am constrained to respectfully
register my dissent.
The relevant antecedents of this case are as follows:
On August 21, 1989, R.A. No. 6758 (the Salary
Standardization Law), amending Presidential Decree
No. 985 (the Old Salary Standardization Law), was
enacted2 in response to the mandate to provide for a
standardized compensation scale for all government
employees, including those employed in GOCCs,
under Section 5, Article IX-B, of the Constitution:
Sec. 5. The Congress shall provide for the
standardization of compensation of government
officials and employees, including those in
government-owned or controlled corporations with
original charters, taking into account the nature of the
responsibilities pertaining to, and the qualifications
required for their positions.
This provision was taken from the 1973 Constitution
in order to address the wide disparity of compensation
between government employees employed in
proprietary corporations and those strictly performing
governmental functions, the disparity, having been
brought about by the increasing number of
exemptions of proprietary corporations through
special legislation from the coverage of the then
Integrated Reorganization Plan of 1972.3 Part III,
Chapter II, Article II of the latter stated:
Article II - Reexamination of the WAPCO4  Plans
After thirteen years in operation, the WAPCO Plans
have been undermined by the increasing number of
exemptions from its coverage through special
legislation. Moreover, through court decisions and the
opinions of the Secretary of Justice, the so-called
proprietary corporations are no longer subject to the
Plans Through collective bargaining, employees of
government corporations have been able to secure
not only higher salaries but liberal fringe benefits as
well. As revealed by the 1970 Presidential Committee
to Study Corporate Salary Scales, the average
compensation in some of these corporations, using
the average compensation of positions covered by the
WAPCO Plans as base (100%), is as follows: DBP -
203%, CB - 196%, GSIS -147%, SSS - 150%, and
NWSA - 111%.5
Thus, the stated policy behind the Salary
Standardization Law is to provide equal pay for
substantially equal work and to base differences in
pay upon substantive differences in duties and
responsibilities, and qualification requirements of the
positions, while giving due regard to, among others,
prevailing rates in the private sector for comparable
work:
SECTION 2. Statement of Policy. — It is hereby
declared the policy of the State to provide equal
pay for substantially equal work and to base
differences in pay upon substantive differences in
duties and responsibilities, and qualification
requirements of the positions. In determining
rates of pay, due regard shall be given to, among
others, prevailing rates in the private sector for
comparable work. For this purpose, the Department
of Budget and Managements (DBM) is hereby
directed to establish and administer a unified
Compensation and Position Classification System,
hereinafter referred to as the System, as provided for
in Presidential Decree No. 985, as amended, that
shall be applied for all government entities, as
mandated by the Constitution.
xxx (Emphasis supplied)
The Salary Standardization Law applies to all
positions, whether elective or appointive within the
entire length and breadth of the Civil Service including
those in the GOCCs and GFIs:
Sec. 4. Coverage. — The Compensation and
Position Classification System herein provided
shall apply to all positions, appointive or elective,
on full or part-time basis, now existing or
hereafter created in the government, including
government-owned or controlled corporations
and government financial institutions.
The term "government" refers to the Executive, the
Legislative and the Judicial Branches and the
Constitutional Commissions and shall include all, but
shall not be limited to, departments, bureaus, offices,
boards, commissions, courts, tribunals, councils,
authorities, administrations, centers, institutes, state
colleges and universities, local government units, and
the armed forces. The term "government-owned or
controlled corporations and financial institutions" shall
include all corporations and financial institutions
owned or controlled by the National Government,
whether such corporations and financial institutions
perform governmental or proprietary functions.
(Emphasis and underscoring supplied)
Nota bene, Section 21 of the Salary Standardization
Law provides that "[a]ll provisions of Presidential
Decree No. 985, as amended by Presidential Decree
No. 1597, which are not inconsistent with this Act and
are not expressly modified, revoked or repealed in
this Act shall continue to be in full force and effect."
Thus, the definition of terms found in Section 3 of P.D.
No. 985 continues to be applicable to the Salary
Standardization Law, including:
SECTION 3. Definition of Terms. — As used in this
Decree, the following shall mean:
xxx
c. Class (of position) — The basic unit of the Position
Classification System. A class consists of all those
positions in the system which are sufficiently similar
as to (1) kind or subject matter of work, (2) level of
difficulty and responsibility, and (3) the qualification
requirements of the work, to warrant similar treatment
in personnel and pay administration.
d. Class Specification or Standards — A written
description of a class of position(s). It distinguishes
the duties, responsibilities and qualification
requirements of positions in a given class from those
of other classes in the Position Classification System.
e. Classification — The act of arranging positions
according to broad occupational groupings and
determining differences of classes within each group.
xxx
g. Compensation or Pay System — A system for
determining rates of pay for positions and employees
based on equitable principles to be applied uniformly
to similar cases. It consists, among others, of the
Salary and Wage Schedules for all positions, and the
rules and regulations for its administration.
h. Grade — Includes all classes of positions which,
although different with respect to kind or subject
matter of work, are sufficiently equivalent as to level
of difficulty and responsibility and level of qualification
requirements of the work to warrant the inclusion of
such classes of positions within one range of basic
compensation.
xxx
m. Position — A set of duties and responsibilities,
assigned or delegated by competent authority and
performed by an individual either on full-time or part-
time basis. A position may be filled or vacant.
n. Position Classification — The grouping of positions
into classes on the basis of similarity of kind and level
of work, and the determination of the relative worth of
those classes of positions.
o. Position Classification System — A system for
classifying positions by occupational groups, series
and classes, according to similarities or differences in
duties and responsibilities, and qualification
requirements. It consists of (1) classes and class
specifications and (2) the rules and regulations for its
installation and maintenance and for the
interpretation, amendment and alternation of the
classes and class specifications to keep pace with the
changes in the service and the positions therein.
xxx
q. Reclassification or Reallocation — A change in the
classification of a position either as a result of a
change in its duties and responsibilities sufficient to
warrant placing the position in a different class, or as
result of a reevaluation of a position without a
significant change in duties and responsibilities.
r. Salary or Wage Adjustment — A salary or wage
increase towards the minimum of the grade, or an
increase from a non-prescribed rate to a prescribed
rate within the grade.
s. Salary or Wage Grade — The numerical place on
the salary or Wage Schedule representing multiple
steps or rates which is assigned to a class.
t. Salary or Wage Schedule — A numerical structure
in the Compensation System consisting of several
grades, each grade with multiple steps with a
percentage differential throughout the pay table. A
classified position is assigned a corresponding grade
in the Schedule.
u. Salary or Wage Step Increment — An increase in
salary or wage from one step to another step within
the grade from the minimum to maximum. Also known
as within grade increase.
xxx
At the same time, Section 16 of the Salary
Standardization Law expressly repealed all laws,
decrees, executive orders, corporate charters, and
other issuances or parts thereof that exempted
government agencies, including GOCCs and GFIs
from the coverage of the new Compensation and
Position Classification System:
Sec. 16. Repeal of Special Salary Laws and
Regulations. — All laws, decrees, executive orders,
corporate charters, and other issuances or parts
thereof, that exempt agencies from the coverage of
the System, or that authorize and fix position
classification, salaries, pay rates or allowances of
specified positions, or groups of officials and
employees or of agencies, which are inconsistent with
the System, including the proviso under Section 2,
and Section 16 of Presidential Decree No. 985 are
hereby repealed.
Thus, all exemptions from the integrated
Compensation Classification System granted prior to
the effectivity of the Salary Standardization Law,
including those under Sections 26 and 167 of
Presidential Decree No. 985 (the Old Salary
Standardization Law) as well as under the respective
GOCC and GFI charters, were repealed8, subject to
the non-diminution provision of Section 12.9 As a
result, the general rule is that all government
employees, including employees of GOCCs and
GFIs, are covered by the Compensation Classification
System provided for by the Salary Standardization
Law.
Nonetheless, Congress acknowledged the need of
GOCCs and GFIs performing proprietary functions to
maintain competitive salaries comparable to the
private sector with respect to key top-level positions in
order not to lose these personnel to the private sector.
Thus, Section 9 of the Salary Standardization Law
empowers the President, in truly exceptional cases, to
approve higher compensation, exceeding Salary
Grade 30, to the chairman, president, general
manager, and the board of directors of government-
owned or controlled corporations and financial
institutions:
SECTION 9. Salary Grade Assignments for Other
Positions. — For positions below the Officials
mentioned under Section 8 hereof and their
equivalent, whether in the National Government, local
government units, government-owned or controlled
corporations or financial institutions, the Department
of Budget and Management is hereby directed to
prepare the Index of Occupational Services to be
guided by the Benchmark Position Schedule
prescribed hereunder and the following factors: (1)
the education and experience required to perform the
duties and responsibilities of the positions; (2) the
nature and complexity of the work to be performed;
(3) the kind of supervision received; (4) mental and/or
physical strain required in the completion of the work;
(5) nature and extent of internal and external
relationships; (6) kind of supervision exercised; (7)
decision-making responsibility; (8) responsibility for
accuracy of records and reports; (9) accountability for
funds, properties and equipment; and (10) hardship,
hazard and personal risk involved in the job.
xxx
In no case shall the salary of the chairman,
president, general manager or administrator, and
the board of directors of government-owned or
controlled corporations and financial institutions
exceed Salary Grade 30: Provided, That the
President may, in truly exceptional cases,
approve higher compensation for the aforesaid
officials. (Emphasis and underscoring supplied)
On July 3, 1993, Republic Act. No. 7653, The New
Central Bank Act, took effect. Section 15 (c) thereof
authorizes the Monetary Board of the Bangko Sentral
ng Pilipinas (BSP) to institute a compensation
structure based on job evaluation studies and wage
surveys as an integral component of the BSP's
human resource development program, thereby
implicitly providing for a wider scope of exemption
from the Compensation Classification System than
that found in the last paragraph of Section 9 of the
Salary Standardization Law, to wit:
SEC. 15. Exercise of Authority. - In the exercise of its
authority, the Monetary Board shall:
xxx
(c) establish a human resource management system
which shall govern the selection, hiring, appointment,
transfer, promotion, or dismissal of all personnel.
Such system shall aim to establish professionalism
and excellence at all levels of the Bangko Sentral in
accordance with sound principles of management.
A compensation structure, based on job
evaluation studies and wage surveys and subject
to the Board's approval, shall be instituted as an
integral component of the Bangko Sentral's
human resource development program: Provided,
That the Monetary Board shall make its own system
conform as closely as possible with the principles
provided for under Republic Act No. 6758. Provided,
however, That compensation and wage structure
of employees whose positions fall under salary
grade 19 and below shall be in accordance with
the rates prescribed under Republic Act No.
6758. (Emphasis supplied; italics in the original)
However, the last proviso of Section 15 (c) expressly
provides that the compensation and wage structure of
employees whose positions fall under Salary Grade
(SG) 19 and below shall, like all other government
employees, be in accordance with the rates
prescribed under the Salary Standardization Law.
Thus, on account of the above-quoted provision, BSP
rank and file employees with (SG) 19 and below, like
their counterparts in the other branches of the civil
service, are paid in accordance with the rates
prescribed in the New Salary Scale under the Salary
Standardization Law, while officers with SG 20 and
above are exempt from the coverage of said law, they
being paid pursuant to the New Salary Scale
containing Salary Grades A to J10 issued by the
Monetary Board which took effect on January 1, 2000.
The Case for the Petitioner
The Central Bank (now Bangko Sentral ng Pilipinas)
Employees Association, Inc., via the instant petition
for prohibition filed on June 8, 2001, seeks to prohibit
herein respondents BSP and the Executive Secretary
of the Office of the President from further
implementing the last proviso of Chapter I, Article II,
Section 15 (c) of The New Central Bank Act, which it
assails as unconstitutional for violating the equal
protection clause,11 hence, null and void.
It is petitioner's allegation that the application of the
Compensation Classification System under the Salary
Standardization Law to the rank and file employees,
but not the BSP's officers, would violate the equal
protection clause as the former are placed in a less
favorable position compared to the latter.
Petitioner asserts that the classification of BSP
employees into two classes based solely on the SG of
their positions is not based on substantial distinctions
which make real differences. For, so petitioner
contends, all BSP personnel are similarly situated
since, regardless of the salary grade, they are
appointed by the Monetary Board and required to
possess civil service eligibilities, observe the same
office rules and regulations, and work at the same
national or regional offices, and, even if their
individual duties differ, directly or indirectly their work
would still pertain to the operation and functions of the
BSP.12 More specifically, it argues that there is
"nothing between SGs 19 and 20 that should warrant
the parting of the BSP 'Red Sea' of civil servants into
two distinct camps of the privileged and the less
privileged."13
Petitioner further submits that the personnel of the
Government Service Insurance System (GSIS), Land
Bank of the Philippines (LBP), Development Bank of
the Philippines (DBP) and the Social Security System
(SSS) are all exempted from the coverage of the
Salary Standardization Law. Thus, within the class of
rank and file personnel of government financial
institutions, the BSP rank and file personnel are also
discriminated upon.14
The Case for Respondent Executive Secretary
On the other hand, respondent Executive Secretary,
through the Solicitor General, contends that the
assailed proviso does not violate the equal protection
clause. He submits that the classification of BSP
employees relative to compensation structure is
based on actual and real differentiation between
employees exercising managerial functions and the
rank and file,15 even as it strictly adheres to the
enunciated policy in The New Central Bank Act to
establish professionalism and excellence within the
BSP subject to prevailing laws and policies of the
national government.16
In addition, he notes that Article II, Section 15 (c)
serves as an exemption to the Salary Standardization
Law which, for all intents and purposes is a general
law applicable to all government employees. As such,
the provision exempting certain BSP employees from
its coverage must be strictly construed.17
The Case for Respondent Bangko Sentral
Likewise advancing the view that the assailed proviso
is constitutional, respondent BSP argues that
Congress, in passing the New Central Bank Act, has
in fact determined that there are substantial reasons
for classifying BSP employees into those covered by
the Salary Standardization Law and those not
covered by the Salary Standardization Law.18
However, BSP additionally claims that while the
assailed proviso is constitutional, the manner by
which it is implemented may give rise to the question
of constitutional infirmity.19 It thus proffers that the
assailed provision should be interpreted together with
the other provisions of The New Central Bank Act,
such as that vesting it with "fiscal and administrative
autonomy" and that directing the Monetary Board to
"establish professionalism and excellence in all levels
in accordance with sound principles of
management."20 It concludes that the assailed
provision does not adopt provisions of the Salary
Standardization Law in their entirety, but refers only to
the basic pay of the employees and does not cover
other benefits which it (the BSP) may deem
necessary to grant its employees.21
Admittedly, the BSP Monetary Board has endeavored
to grant additional allowances to the "rank and file" so
that they may be given substantially similar benefits
being enjoyed by the officers. The Commission on
Audit (COA), however, disallowed these additional
allowances on the ground that the grant of the same
violates the provisions of the Salary Standardization
Law and The New Central Bank Act.22
Issues for Resolution
In essence, petitioner asserts that its members are
similarly situated to both the executive/officer corps of
the BSP and the rank and file employees of the LBP,
DBP, SSS and GSIS such that the operation of the
equal protection guaranty in either case would entitle
them to be placed under a compensation and position
classification system outside of that mandated by the
Salary Standardization Law.
Clearly, the resolution of the instant petition hinges on
a determination of whether the right of petitioner's
members to the equal protection of the laws has been
violated by (a) the classification in The New Central
Bank Act between the executive personnel (those
with SG 20 and above), who are exempt from the
Compensation Classification System mandated under
the Salary Standardization Law, and the rank and file
employees (those with SG 19 and below) who are
covered by the latter; and/or (b) the disparity in
treatment between the rank and file employees of the
BSP and the rank and file employees of the LBP,
DBP, SSS and GSIS, who were subsequently
exempted from said Compensation Classification
System by their amended charters.
Put differently, the instant Petition presents two
principal issues for resolution: (1) whether the
distinction between managerial and rank and file
employees in The New Central Bank Act partakes of
an invidious discrimination proscribed by the equal
protection clause; and (2) whether, by operation of the
equal protection clause, the rank and file employees
of the BSP are entitled to exemption from the
Compensation Classification System mandated under
the Salary Standardization Law as a consequence of
the exemption of the rank and file employees of the
LBP, DBP, SSS and GSIS.
Standards for Equal Protection Analysis
Before proceeding to resolve these issues, it may
serve the ends of clarity to first review the basic
framework by which the courts analyze challenges to
the constitutionality of statutes as well as the
standards by which compliance with the equal
protection clause may be determined.
Presumption of Constitutionality
It is a basic axiom of constitutional law that all
presumptions are indulged in favor of constitutionality
and a liberal interpretation of the constitution in favor
of the constitutionality of legislation should be
adopted. Thus, if any reasonable basis may be
conceived which supports the statute, the same
should be upheld. Consequently, the burden is
squarely on the shoulders of the one alleging
unconstitutionality to prove invalidity beyond a
reasonable doubt by negating all possible bases for
the constitutionality of a statute.23 Verily, to doubt is to
sustain.24
The rationale for this presumption in favor of
constitutionality and the corresponding restraint on
the part of the judicial branch was expounded upon by
Justice Laurel in the case of People v. Vera,25 viz:
This court is not unmindful of the fundamental criteria
in cases of this nature that all reasonable doubts
should be resolved in favor of the constitutionality of a
statute. An act of the legislature approved by the
executive, is presumed to be within constitutional
limitations. The responsibility of upholding the
Constitution rests not on the courts alone but on the
legislature as well. "The question of the validity of
every statute is first determined by the legislative
department of the government itself." (U. S. vs. Ten
Yu [1912], 24 Phil., 1, 10; Case vs. Board of Health
and Heiser [1913], 24 Phil., 250, 276; U. S. vs. Joson
[1913], 26 Phil., 1.) And a statute finally comes before
the courts sustained by the sanction of the
executive. The members of the Legislature and the
Chief Executive have taken an oath to support the
Constitution and it must be presumed that they
have been true to this oath and that in enacting
and sanctioning a particular law they did not
intend to violate the Constitution. The courts
cannot but cautiously exercise its power to
overturn the solemn declarations of two of the
three grand departments of the government. (6 R.
C. L., p. 101.) Then, there is that peculiar political
philosophy which bids the judiciary to reflect the
wisdom of the people as expressed through an
elective Legislature and an elective Chief
Executive. It follows, therefore, that the courts will
not set aside a law as violative of the Constitution
except in a clear case. This is a proposition too plain
to require a citation of authorities.26 (Emphasis and
underscoring supplied)
Indeed, it has been observed that classification is the
essence of legislation.27 On this point, the observation
of the United States Supreme Court in the recent
case of Personnel Administrator of Massachusetts v.
Feeney28 is illuminating:
The equal protection guarantee of the Fourteenth
Amendment does not take from the States all power
of classification. Most laws classify, and many
affect certain groups unevenly, even though the
law itself treats them no differently from all other
members of the class described by the law. When
the basic classification is rationally based, uneven
effects upon particular groups within a class are
ordinarily of no constitutional concern. The calculus
of effects, the manner in which a particular law
reverberates in a society is a legislative and not a
judicial responsibility. In assessing an equal
protection challenge, a court is called upon only to
measure the basic validity of the legislative
classification. When some other independent right
is not at stake and when there is no "reason to
infer antipathy," it is presumed that "even
improvident decisions will eventually be rectified
by the democratic process ...."29 (Emphasis
supplied; citations omitted)
Hence, in enacting laws, the legislature is accorded
the widest scope of discretion within the bounds of the
Constitution; and the courts, in exercising their power
of judicial review, do not inquire into the wisdom of the
law. On this point, this Court in Ichong, etc., et al. v.
Hernandez, etc., and Sarmiento,30 stated:
e. Legislative discretion not subject to judicial review.
— the case of People v. Cayat33 to wit:
Now, in this matter of equitable balancing, what is the
proper place and role of the courts? It must not be
overlooked, in the first place, that the legislature,
which is the constitutional repository of police
power and exercises the prerogative of
determining the policy of the State, is by force of
circumstances primarily the judge of necessity,
adequacy or reasonableness and wisdom, of any
law promulgated in the exercise of the police
power, or of the measures adopted to implement
the public policy or to achieve public interest. On
the other hand, courts, although zealous
guardians of individual liberty and right, have
nevertheless evinced a reluctance to interfere
with the exercise of the legislative prerogative.
They have done so early where there has been a
clear, patent or palpable arbitrary and
unreasonable abuse of the legislative prerogative.
Moreover, courts are not supposed to override
legitimate policy, and courts never inquire into the
wisdom of the law.31 (Emphasis supplied)
Only by faithful adherence to this principle of judicial
review is it possible to preserve to the legislature its
prerogatives under the Constitution and its ability to
function.32
The presumption of constitutionality notwithstanding,
the courts are nevertheless duty bound to strike down
any statute which transcends the bounds of the
Constitution including any classification which is
proven to be unreasonable, arbitrary, capricious or
oppressive.
The question that arises then is by what standard(s)
should the reasonableness, and therefore the validity,
of a legislative classification be measured?
The Rational Basis Test
It may be observed that, in the Philippines, the
traditional and oft-applied standard is the so-called
"rational basis test," the requisites of which were first
summarized by Justice (later Chief Justice) Moran in
It is an established principle of constitutional law that
the guaranty of the equal protection of the laws is not
violated by a legislation based on reasonable
classification. And the classification, to be
reasonable, (1) must rest on substantial
distinctions; (2) must be germane to the purposes
of the law; (3) must not be limited to existing
conditions only; and (4) must apply equally to all
members of the same class.34(Emphasis supplied;
citations omitted)
To the foregoing may be added the following
observations of the Court in Philippine Judges
Association, v. Prado,35to wit:
The equal protection of the laws is embraced in the
concept of due process, as every unfair discrimination
offends the requirements of justice and fair play. It
has nonetheless been embodied in a separate clause
in Article III Sec. 1, of the Constitution to provide for a
more specific guaranty against any form of undue
favoritism or hostility from the government.
Arbitrariness in general may be challenged on the
basis of the due process clause. But if the particular
act assailed partakes of an unwarranted partiality or
prejudice, the sharper weapon to cut it down is the
equal protection clause.
According to a long line of decisions, equal
protection simply requires that all persons or
things similarly situated should be treated alike,
both as to rights conferred and responsibilities
imposed. Similar subjects, in other words, should
not be treated differently, so as to give undue
favor to some and unjustly discriminate against
others.
The equal protection clause does not require the
universal application of the laws on all persons or
things without distinction. This might in fact
sometimes result in unequal protection, as where,
for example, a law prohibiting mature books to all
persons, regardless of age, would benefit the morals
of the youth but violate the liberty of adults. What the
clause requires is equality among equals as
determined according to a valid classification. By
classification is meant the grouping of persons or
things similar to each other in certain particulars
and different from all others in these same
particulars.36(Emphasis supplied; footnotes omitted)
The Rational Basis Test has been described as
adopting a "deferential" attitude towards legislative
classifications. As previously discussed, this
"deference" comes from the recognition that
classification is often an unavoidable element of the
task of legislation which, under the separation of
powers embodied in our Constitution, is primarily the
prerogative of Congress.
Indeed, in the United States, from where the equal
protection provision of our Constitution has its roots,
the Rational Basis Test remains a primary standard
for evaluating the constitutionality of a statute.
Thus, in Lying v. International Union, United
Automobile, Aerospace and Agricultural Implement
Workers of America, UAW,37 where a statute
providing that no household may become eligible to
participate in the food stamp program while any of its
members are on strike, or receive an increase in the
allotment of food stamps already being received
because the income of the striking member has
decreased, the U.S. Supreme Court held:
Because the statute challenged here has no
substantial impact on any fundamental interest
and does not "affect with particularity any
protected class," we confine our consideration to
whether the statutory classification is "rationally
related to a legitimate governmental interest." We
have stressed that this standard of review is
typically quite deferential; legislative
classifications are "presumed to be valid," largely
for the reason that "the drawing of lines that
create distinctions is peculiarly a legislative task
and unavoidable one."
xxx
We have little trouble in concluding that § 109 is
rationally related to the legitimate governmental
objective of avoiding undue favoritism to one side or
the other in private labor disputes. The Senate Report
declared: "Public policy demands an end to the food
stamp subsidization of all strikers who become
eligible for the program solely through the temporary
loss of income during a strike. Union strike funds
should be responsible for providing support and
benefits to strikers during labor-management
disputes." It was not part of the purposes of the Food
Stamp Act to establish a program that would serve as
a weapon in labor disputes; the Act was passed to
alleviate hunger and malnutrition and to strengthen
the agricultural economy. The Senate Report stated
that "allowing strikers to be eligible for food stamps
has damaged the program's public integrity" and thus
endangers these other goals served by the program.
Congress acted in response to these problems.
xxx
It is true that in terms of the scope and extent of their
ineligibility for food stamps, § 109 is harder on strikers
than on "voluntary quitters." But the concern about
neutrality in labor disputes does not arise with respect
to those who, for one reason or another, simply quit
their jobs. As we have stated in a related context,
even if the statute "provides only 'rough justice,' its
treatment ... is far from irrational." Congress need
not draw a statutory classification to the
satisfaction of the most sharp-eyed observers in
order to meet the limitations that the Constitution
imposes in this setting. And we are not authorized
to ignore Congress' considered efforts to avoid
favoritism in labor disputes, which are evidenced
also by the two significant provisos contained in
the statute. The first proviso preserves eligibility for
the program of any household that was eligible to
receive stamps "immediately prior to such strike." The
second proviso makes clear that the statutory
ineligibility for food stamps does not apply "to any
household that does not contain a member on strike,
if any of its members refuses to accept employment at
a plant or site because of a strike or lockout." In light
of all this, the statute is rationally related to the stated
objective of maintaining neutrality in private labor
disputes.38 (Emphasis and underscoring supplied;
citations and footnotes omitted)
More recently, the American Court summarized the
principles behind the application of the Rational Basis
Test in its jurisdiction in Federal Communications
Commission v. Beach Communications, Inc.,39 as
follows:
Whether embodied in the Fourteenth Amendment or
inferred from the Fifth, equal protection is not a
license for courts to judge the wisdom, fairness,
or logic of legislative choices. In areas of social
and economic policy, a statutory classification
that neither proceeds along suspect lines nor
infringes fundamental constitutional rights must
be upheld against equal protection challenge if
there is any reasonably conceivable state of facts
that could provide a rational basis for the
classification. See Sullivan v. Stroop, 496 U.S. 478,
485, 110 S.Ct. 2499, 2504, 110 L.Ed.2d 438
(1990); Bowen v. Gilliard, 483 U.S. 587, 600-603, 107
S.Ct. 3008, 3016- 3018, 97 L.Ed.2d 485
(1987); United States Railroad Retirement Bd. v. Fritz,
449 U.S. 166, 174-179, 101 S.Ct. 453, 459-462, 66
L.Ed.2d 368 (1980); Dandridge v, Williams, 397 U.S.
471, 484-485, 90 S.Ct. 1153, 1161, 25 L.Ed.2d 491
(1970). Where there are "plausible reasons" for
Congress' action, "our inquiry is at an
end." United States Railroad Retirement Bd. v. Fritz,
supra, 449 U.S., at 179, 101 S.Ct. at 461. This
standard of review is a paradigm of judicial
restraint. "The Constitution presumes that, absent
some reason to infer antipathy, even improvident
decisions will eventually be rectified by the
democratic process and that judicial intervention
is generally unwarranted no matter how unwisely
we may think a political branch has acted." Vance
v. Bradley, 440 U.S. 93, 97, 99 S.Ct. 939, 942-943, 59
L.Ed.2d 171 (1979).
On rational-basis review, a classification in a
statute such as the Cable Act comes to us bearing
a strong presumption of validity, see Lyng v.
Automobile Workers, 485 U.S. 360, 370, 108 S.Ct.
1184, 1192, 99 L.Ed.2d 380 (1988),and those
attacking the rationality of the legislative
classification have the burden "to negative every
conceivable basis which might support
it." Lehnhausen v. Lake Shore Auto Parts Co., 410
U.S. 356, 364, 93 S.Ct. 1001. 1006, 35 L.Ed.2d 351
(1973) (internal quotation marks omitted). See
also Hodel v. Indiana, 452 U.S. 314, 331-332, 101
S.Ct. 2376, 2387, 69 L.Ed.2d 40 (1981). Moreover,
because we never require a legislature to articulate its
reasons for enacting a statute, it is entirely irrelevant
for constitutional purposes whether the conceived
reason for the challenged distinction actually
motivated the legislature. United States Railroad
Retirement Bd. v. Fritz, supra, 449 U.S., at 179, 101
S.Ct., at 461. See Flemming v. Nestor, 363 U.S. 603,
612, 80 S.Ct. 1367, 1373, 4 L.Ed.2d 1435 (1960).
Thus, the absence of "'legislative facts' " explaining
the distinction "[o]n the record," 294 U.S.App.D.C., at
389, 959 F.2d, at 987, has no significance in rational-
basis analysis. See Nordlinger v. Hahn, 505 U.S. 1,
15, 112 S.Ct. 2326, 2334, 120 L.Ed.2d 1 (1992) In
other words, a legislative choice is not subject to
courtroom fact-finding and may be based on rational
speculation unsupported by evidence or empirical
data. See Vance v. Bradley, supra, 440 U.S., at 111,
99 S.Ct., at 949. See also Minnesota v. Clover Leaf
Creamery Co., 449 U.S. 456, 464, 101 S.Ct. 715,
723, 66 L.Ed.2d 659 (1981). "'Only by faithful
adherence to this guiding principle of judicial
review of legislation is it possible to preserve to
the legislative branch its rightful independence
and its ability to function.'" Lehnhausen, supra, 410
U.S., at 365, 93 S.Ct., at 1006 (quoting Carmichael v.
Southern Coal & Coke Co., 301 U.S. 495, 510, 57
S.Ct. 868, 872, 81 L.Ed. 1245 (1937)).
These restraints on judicial review have added
force "where the legislature must necessarily
engage in a process of line-drawing." United
States Railroad Retirement Bd. v. Fritz, 449 U.S., at
179, 101 S.Ct., at 461. Defining the class of
persons subject to a regulatory requirement--
much like classifying governmental
beneficiaries--"inevitably requires that some
persons who have an almost equally strong claim
to favored treatment be placed on different sides
of the line, and the fact [that] the line might have
been drawn differently at some Points is a matter
for legislative, rather than judicial,
consideration." Ibid. (internal quotation marks and
citation omitted). The distinction at issue here
represents such a line: By excluding from the
definition of "cable system" those facilities that serve
commonly owned or managed buildings without using
public rights-of-way, § 602(7)(B) delineates the
bounds of the regulatory field. Such scope-of-
coverage provisions are unavoidable components of
most economic or social legislation. In establishing
the franchise requirement, Congress had to draw the
line somewhere; it had to choose which facilities to
franchise. This necessity renders the precise
coordinates of the resulting legislative judgment
virtually unreviewable, since the legislature must
be allowed leeway to approach a perceived
problem incrementally. See, e.g., Williamson v. Lee
Optical of Okla., Inc., 348 U.S. 483, 75 S.Ct. 461, 99
L.Ed. 563 (1955):
"The problem of legislative classification is a
perennial one, admitting of no doctrinaire
definition. Evils in the same field may be of
different dimensions and proportions, requiring
different remedies. Or so the legislature may
think. Or the reform may take one step at a time,
addressing itself to the phase of the problem
which seems most acute to the legislative mind.
The legislature may select one phase of one field
and apply a remedy there, neglecting the others.
The prohibition of the Equal Protection Clause
goes no further than the invidious
discrimination."40 (Emphasis and underscoring
supplied; footnotes omitted)
Deferential or not, in the Philippines, the Rational
Basis Test has proven to be an effective tool for
curbing invidious discrimination.
Thus, in People v. Vera,41 this Court held as
unconstitutional Section 11 of Act No. 4221, which
provided that the Probation Law "shall apply only in
those provinces in which the respective provincial
boards have provided for the salary of a probation
officer at rates not lower than those now provided for
provincial fiscals."42 The Court held that the
challenged provision was an undue delegation of
legislative power since it left the operation or non-
operation of the law entirely up to the absolute and
unlimited (and therefore completely arbitrary)
discretion of the provincial boards.43 The Court went
on to demonstrate that this unwarranted delegation of
legislative power created "a situation in which
discrimination and inequality [were] permitted or
allowed"44 since "a person otherwise coming within
the purview of the law would be liable to enjoy the
benefits of probation in one province while another
person similarly situated in another province would be
denied those same benefits,"45 despite the absence of
substantial differences germane to the purpose of the
law. For this reason the questioned provision was
also held unconstitutional and void for being
repugnant to the equal protection clause.46
In Viray v. City of Caloocan,47 the Court invalidated on
equal protection grounds, among others, an
Ordinance providing for the collection of "entrance
fees" for cadavers coming from outside Caloocan City
for burial in private cemeteries within the city. The city
government had sought to justify the fees as an
exercise of police power claiming that policemen
using the city's motorcycles or cars had to be
assigned to escort funeral processions and reroute
traffic to minimize public inconvenience.48 This Court,
through Justice J.B.L. Reyes held that:
While undeniably the above-described activity of city
officers is called for by every funeral procession, yet
we are left without explanation why the Ordinance
should collect the prescribed fees solely in the case of
cadavers coming from places outside the territory of
Caloocan City for burial in private cemeteries within
the City. Surely, whether the corpse comes from
without or within the City limits, and whether interment
is to be made in private or public cemeteries, the City
police must regulate traffic, and must use their City
cars or motorcycles to maintain order; and the City
streets must suffer some degree of erosion. Clearly,
then, the ordinance in question does unjustifiably
discriminate against private cemeteries, in violation of
the equal protection clause of the Constitution, a
defect adequate to invalidate the questioned portion
of the measure.49(Italics in the original)
In Philippine Judges Association. v. Prado,50 this
Court ruled that Section 35 of R.A. No.
7354,51 withdrawing the franking privileges of the
Judiciary52 but retaining the same for the President,
the Vice-President, Senators and Members of the
House of Representatives, and others,53 violated the
equal protection clause. In analyzing the questioned
legislative classification, the Court concluded that the
only reasonable criteria for classification vis-à-vis the
grant of the franking privilege was "the
perceived need of the grantee for the
accommodation, which would justify a waiver of
substantial revenue by the Corporation in the interest
of providing for a smoother flow of communication
between the government and the people."54 The Court
then went on to state that:
Assuming that basis, we cannot understand why, of
all the departments of the government, it is the
Judiciary that has been denied the franking privilege.
There is no question that if there is any major branch
of the government that needs the privilege, it is the
Judicial Department, as the respondents themselves
point out. Curiously, the respondents would justify the
distinction on the basis precisely of this need and, oh
this basis, deny the Judiciary the franking privilege
while extending it to others less deserving.
xxx
In lumping the Judiciary with the other offices from
which the franking privilege has been withdrawn,
Section 35 has placed the courts of justice in a
category to which it does not belong. If it recognizes
the need of the President of the Philippines and the
members of Congress for the franking privilege, there
is no reason why it should not recognize a similar and
in fact greater need on the part of the Judiciary for
such privilege. While we may appreciate the
withdrawal of the franking privilege from the Armed
Forces of the Philippines Ladies Steering Committee,
we fail to understand why the Supreme Court should
be similarly treated as that Committee. And while we
may concede the need of the National Census and
Statistics Office for the franking privilege, we are
intrigued that a similar if not greater need is not
recognized in the courts of justice.
xxx
We are unable to agree with the respondents that
Section 35 of R.A. No. 7354 represents a valid
exercise of discretion by the Legislature under the
police power. On the contrary, we find its repealing
clause to be a discriminatory provision that denies the
Judiciary the equal protection of the laws guaranteed
for all persons or things similarly situated. The
distinction made by the law is superficial. It is not
based on substantial distinctions that make real
differences between the Judiciary and the grantees of
the franking privilege.
This is not a question of wisdom or power into which
the Judiciary may not intrude. It is a matter of
arbitrariness that this Court has the duty and power to
correct.55
More recently, in Government Service Insurance
System v. Montesclaros,56 this Court ruled that the
proviso in Section 18 of P.D. No.1146,57 which
prohibited a dependent spouse from receiving
survivorship pension if such dependent spouse
married the pensioner within three years before the
pensioner qualified for the pension, was
unconstitutional for, among others, violating the equal
protection clause. Said the Court:
The surviving spouse of a government employee is
entitled to receive survivor's benefits under a pension
system. However, statutes sometimes require that the
spouse should have married the employee for a
certain period before the employee's death to prevent
sham marriages contracted for monetary gain. One
example is the Illinois Pension Code which restricts
survivor's annuity benefits to a surviving spouse who
was married to a state employee for at least one year
before the employee's death. The Illinois pension
system classifies spouses into those married less
than one year before a member's death and those
married one year or more. The classification seeks to
prevent conscious adverse risk selection of deathbed
marriages where a terminally ill member of the
pension system marries another so that person
becomes eligible for benefits. In Sneddon v. The
State Employee's Retirement System of Illinois, the
Appellate Court of Illinois held that such classification
was based on difference in situation and
circumstance, bore a rational relation to the purpose
of the statute, and was therefore not in violation of
constitutional guarantees of due process and equal
protection.
A statute based on reasonable classification does not
violate the constitutional guaranty of the equal
protection of the law. The requirements for a valid and
reasonable classification are: (1) it must rest on
substantial distinctions; (2) it must be germane to the
purpose of the law; (3) it must not be limited to
existing conditions only; and (4) it must apply equally
to all members of the same class. Thus, the law may
treat and regulate one class differently from another
class provided there are real and substantial
differences to distinguish one class from another.
The proviso in question does not satisfy these
requirements. The proviso discriminates against the
dependent spouse who contracts marriage to the
pensioner within three years before the pensioner
qualified for the pension. Under the proviso, even if
the dependent spouse married the pensioner more
than three years before the pensioner's death, the
dependent spouse would still not receive survivorship
pension if the marriage took place within three years
before the pensioner qualified for pension. The object
of the prohibition is vague. There is no reasonable
connection between the means employed and the
purpose intended. The law itself does not provide any
reason or purpose for such a prohibition. If the
purpose of the proviso is to prevent "deathbed
marriages," then we do not see why the proviso
reckons the three-year prohibition from the date the
pensioner qualified for pension and not from the date
the pensioner died. The classification does not rest on
substantial distinctions. Worse, the classification
lumps all those marriages contracted within three
years before the pensioner qualified for pension as
having been contracted primarily for financial
convenience to avail of pension benefits. (Footnotes
omitted)
Even in the American context, the application of the
"deferential" Rational Basis Test has not automatically
resulted in the affirmation of the challenged
legislation.
Thus, in City of Cleburne Texas v. Cleburne Living
Center,58 a city's zoning ordinance requiring a special
permit for the operation of a group home for the
mentally retarded was challenged on equal protection
grounds. The American Court, ruling that the Rational
Basis Test was applicable and limiting itself to the
facts of the particular case, held that there was no
rational basis for believing that the mentally retarded
condition of those living in the affected group home
posed any special threat to the city's legitimate
interests any more than those living in boarding
houses, nursing homes and hospitals, for which no
special permit was required. Thus, it concluded, the
permit requirement violated the respondent's right to
equal protection.59
And, in Romer v. Evans,60 the U.S. Supreme Court
invalidated Amendment 2 of the Colorado State
Constitution which precluded all legislative, executive,
or judicial action at any level of state or local
government designed to protect the status of persons
based on their homosexual orientation, conduct,
practices or relationships.61
Strict Scrutiny
While in the Philippines the Rational Basis Test has,
so far, served as a sufficient standard for evaluating
governmental actions against the Constitutional
guaranty of equal protection, the American Federal
Supreme Court, as pointed out in the main opinion,
has developed a more demanding standard as a
complement to the traditional deferential test, which it
applies in certain well-defined circumstances. This
more demanding standard is often referred to as Strict
Scrutiny.
Briefly stated, Strict Scrutiny is applied when the
challenged statute either (1) classifies on the basis of
an inherently suspect characteristic or (2) infringes
fundamental constitutional rights.62 With respect to
such classifications, the usual presumption of
constitutionality is reversed, and it is incumbent upon
the government to demonstrate that its classification
has been narrowly tailored to further compelling
governmental interests,63 otherwise the law shall be
declared unconstitutional for being violative of the
Equal Protection Clause.
The central purpose of the Equal Protection Clause
was to eliminate racial discrimination emanating from
official sources in the States.64 Like other rights
guaranteed by the post-Civil War Amendments, the
Equal Protection Clause (also known as the
Fourteenth Amendment) was motivated in large part
by a desire to protect the civil rights of African-
Americans recently freed from slavery. Thus, initially,
the U.S. Supreme Court attempted to limit the scope
of the Equal Protection Clause to discrimination
claims brought by African-Americans.65 In Strauder v.
West Virginia,66 the American Supreme Court in
striking down a West Virginia statute which prohibited
a "colored man" from serving in a jury, traced the
roots of the Equal Protection Clause:
This is one of a series of constitutional provisions
having a common purpose; namely, securing to a
race recently emancipated, a race that through many
generations had been held in slavery, all the civil
rights that the superior race enjoy. The true spirit and
meaning of the amendments, as we said in
the Slaughter-House Cases (16 Wall. 36), cannot be
understood without keeping in view the history of the
times when they were adopted, and the general
objects they plainly sought to accomplish. At the time
when they were incorporated into the Constitution, it
required little knowledge of human nature to
anticipate that those who had long been regarded as
an inferior and subject race would, when suddenly
raised to the rank of citizenship, be looked upon with
jealousy and positive dislike, and that State laws
might be enacted or enforced to perpetuate the
distinctions that had before existed, xxx To quote the
language used by us in the Slaughter-House Cases,
"No one can fail to be impressed with the one
pervading purpose found in all the amendments, lying
at the foundation of each, and without which none of
them would have been suggested,--we mean the
freedom of the slave race, the security and firm
establishment of that freedom, and the protection of
the newly made freeman and citizen from the
oppressions of those who had formerly exercised
unlimited dominion over them." So again: "The
existence of laws in the States where the newly
emancipated negroes resided, which discriminated
with gross injustice and hardship against them as a
class, was the evil to be remedied, and by it [the
Fourteenth Amendment] such laws were forbidden. If,
however, the States did not conform their laws to its
requirements, then, by the fifth section of the article of
amendment, Congress was authorized to enforce it by
suitable legislation." And it was added, "We doubt
very much whether any action of a State, not directed
by way of discrimination against the negroes, as a
class, will ever be held to come within the purview of
this provision."
x x x It ordains that no State shall deprive any person
of life, liberty, or property, without due process of law,
or deny to any person within its jurisdiction the equal
protection of the laws. What is this but declaring that
the law in the States shall be the same for the black
as for the white; that all persons, whether colored or
white, shall stand equal before the laws of the States,
and, in regard to the colored race, for whose
protection the amendment was primarily designed,
that no discrimination shall be made against them by
law because of their color? The words of the
amendment, it is true, are prohibitory, but they contain
a necessary implication of a positive immunity, or
right, most valuable to the colored race,--the right to
exemption from unfriendly legislation against them
distinctively as colored,--exemption from legal
discriminations, implying inferiority in civil society,
lessening the security of their enjoyment of the rights
which others enjoy, and discriminations which are
steps towards reducing them to the condition of a
subject race.
That the West Virginia statute respecting juries--the
statute that controlled the selection of the grand and
petit jury in the case of the plaintiff in error--is such a
discrimination ought not to be doubted. Nor would it
be if the persons excluded by it were white men. If in
those States where the colored people constitute a
majority of the entire population a law should be
enacted excluding all white men from jury service,
thus denying to them the privilege of participating
equally with the blacks in the administration of justice,
we apprehend no one would be heard to claim that it
would not be a denial to white men of the equal
protection of the laws. Nor if a law should be passed
excluding all naturalized Celtic Irishmen, would there
by any doubt of its inconsistency with the spirit of the
amendment. The very fact that colored people are
singled out and expressly denied by a statute all right
to participate in the administration of the law, as
jurors, because of their color, though they are
citizens, and may be in other respects fully qualified,
is practically a brand upon them, affixed by the law,
an assertion of their inferiority, and a stimulant to that
race prejudice which is an impediment to securing to
individuals of the race that equal justice which the law
aims to secure to all others.67
Over the years however, the Equal Protection Clause
has been applied against unreasonable governmental
discrimination directed at any identifiable group.68 In
what Laurence H. Tribe and Michael C. Dorf call the
most famous footnote in American constitutional
law,69 Justice Stone in U.S. v. Carolene Products
Co.70 maintained that state-sanctioned discriminatory
practices against discrete and insular minorities are
entitled to a diminished presumption of
constitutionality:
xxx the existence of facts supporting the legislative
judgment is to be presumed, for regulatory legislation
affecting ordinary commercial transactions is not to be
pronounced unconstitutional unless in the light of the
facts made known or generally assumed it is of such
a character as to preclude the assumption that it rests
upon some rational basis within the knowledge and
experience of the legislators. [FN4] xxx
FN4 There may be narrower scope for operation
of the presumption of constitutionality when
legislation appears on its face to be within a
specific prohibition of the Constitution, such as
those of the first ten Amendments, which are
deemed equally specific when held to be
embraced within the Fourteenth. See Stromberg v.
California, 283 U.S. 359, 369, 370, 51 S.Ct. 532, 535,
536, 75 L.Ed. 1117, 73 A.L.R. 1484; Lovell v. Griffin,
303 U.S. 444, 58 S.Ct. 666, 82 L.Ed. 949,decided
March 28, 1938.
It is unnecessary to consider now whether legislation
which restricts those political processes which can
ordinarily be expected to bring about repeal of
undesirable legislation, is to be subjected to more
exacting judicial scrutiny under the general
prohibitions of the Fourteenth Amendment than are
most other types of legislation. On restrictions upon
the right to vote, see Nixon v. Herndon, 273 U.S. 536,
47 S.Ct. 446, 71 L.Ed. 759; Nixon v. Condon, 286
U.S. 73, 52 S.Ct. 484, 76 L.Ed. 984, 88 A.L.R. 458;
on restraints upon the dissemination of information,
see Near v. Minnesota, 283 U.S. 697, 713 -- 714,
718--720, 722, 51 S.Ct. 625, 630, 632, 633, 75 L.Ed.
1357; Grosjean v. American Press Co., 297 U.S. 233,
56 S.Ct. 444, 80 L.Ed. 660; Lovell v. Griffin, supra; on
interferences with political organizations,
see Stromberg v. California, supra. 283 U.S. 359,
369, 51 S.Ct. 532, 535, 75 L.Ed. 1117, 73 A.L.R.
1484; Fiske v. Kansas. 274 U.S. 380, 47 S.Ct. 655,
71 L.Ed. 1108; Whitney v. California, 274 U.S. 357,
373-- 378, 47 S.Ct. 641, 647. 649, 71 L.Ed. 1095;
Herndon v. Lowry. 301 U.S. 242, 57 S.Ct. 732, 81
L.Ed. 1066; and see Holmes, J., in Gitlow v. New
York, 268 U.S. 652, 673, 45 S.Ct. 625, 69 L.Ed. 1138;
as to prohibition of peaceable assembly, see De
Jonge v. Oregon, 299 U.S. 353, 365, 57 S.Ct. 255,
260, 81 L.Ed. 278.
Nor need we enquire whether similar considerations
enter into the review of statutes directed at particular
religious, Pierce v. Society of Sisters. 268 U.S. 510,
45 S.Ct. 571, 69 L.Ed. 1070, 39. A.L.R. 468, or
national, Meyer v. Nebraska, 262 U.S. 390, 43 S.Ct.
625, 67 L.Ed. 1042, 29 A.L.R. 1446; Bartels v. Iowa,
262 U.S. 404, 43 S.Ct. 628, 67 L.Ed. 1047; Farrington
v. Tokushige, 273 U.S. 284, 47 S.Ct. 406, 71 L.Ed.
646, or racial minorities. Nixon v. Herndon, supra;
Nixon v. Condon, supra; whether prejudice against
discrete and insular minorities may be a special
condition, which tends seriously to curtail the
operation of those political processes ordinarily
to be relied upon to protect minorities, and which
may call for a correspondingly more searching
judicial inquiry.Compare McCulloch v. Maryland, 4
Wheat. 316, 428, 4 L.Ed. 579; South Carolina State
Highway Department v, Barnwell Bros., 303 U.S. 177,
58 S.Ct. 510, 82 L.Ed. 734, decided February 14,
1938, note 2, and cases cited.71 (Emphasis and
underscoring supplied)
The use of the term "suspect" originated in the case
of Korematsu v. U.S.72 In Korematsu,73 the American
Supreme Court upheld the constitutionality of Civilian
Exclusion Order No. 34 of the Commanding General
of the Western Command, U.S. Army, which directed
that all persons of Japanese ancestry should be
excluded from San Leandro California, a military area,
beginning May 9, 1942. However, in reviewing the
validity of laws which employ race as a means of
classification, the Court held:
It should be noted, to begin with, that all legal
restrictions which curtail the civil rights of a single
racial group are immediately suspect. That is not
to say that all such restrictions are
unconstitutional. It is to say that courts must
subject them to the most rigid scrutiny. Pressing
public necessity may sometimes justify the existence
of such restrictions; racial antagonism never
can.74 (Emphasis and underscoring supplied)
Racial classifications are generally thought to be
"suspect" because throughout the United States'
history these have generally been used to
discriminate officially against groups which are
politically subordinate and subject to private prejudice
and discrimination.75 Thus, the U.S. Supreme Court
has "consistently repudiated distinctions between
citizens solely because of their ancestry as being
odious to a free people whose institutions are founded
upon the doctrine of equality."76 The underlying
rationale of the suspect classification theory is that
where legislation affects discrete and insular
minorities, the presumption of constitutionality fades
because traditional political processes may have
broken down.77 Moreover, classifications based on
race, alienage or national origin are so seldom
relevant to the achievement of any legitimate state
interest that laws grounded on such considerations
are deemed to reflect prejudice and antipathy - a view
that those in the burdened class are not as worthy or
deserving as others.78
Almost three decades after Korematsu, in the
landmark case of San Antonio Independent School
District v. Rodriguez,79 the U.S. Supreme Court in
identifying a "suspect class" as a class saddled with
such disabilities, or subjected to such a history of
purposeful unequal treatment, or relegated to such a
position of political powerlessness as to command
extraordinary protection from the majoritarian political
process,80 articulated that suspect classifications were
not limited to classifications based on race, alienage
or national origin but could also be applied to other
criteria such as religion.81 Thus, the U.S. Supreme
Court has ruled that suspect classifications deserving
of Strict Scrutiny include those based on race or
national origin82, alienage83 and religion84 while
classifications based on gender85, illegitimacy86,
financial need87, conscientious objection88 and
age89 have been held not to constitute suspect
classifications.
As priorly mentioned, the application of Strict Scrutiny
has not been limited to statutes which proceed along
suspect lines but has been utilized on statutes
infringing upon fundamental constitutionally protected
rights. Most fundamental rights cases decided in the
United States require equal protection analysis
because these cases would involve a review of
statutes which classify persons and impose differing
restrictions on the ability of a certain class of persons
to exercise a fundamental right.90 Fundamental rights
include only those basic liberties explicitly or implicitly
guaranteed by the U.S. Constitution.91 And precisely
because these statutes affect fundamental liberties,
any experiment involving basic freedoms which the
legislature conducts must be critically examined under
the lens of Strict Scrutiny.
Fundamental rights which give rise to Strict Scrutiny
include the right of procreation,92 the right to
marry,93 the right to exercise First Amendment
freedoms such as free speech, political expression,
press, assembly, and so forth,94the right to
travel,95 and the right to vote.96
Because Strict Scrutiny involves statutes which either
classifies on the basis of an inherently suspect
characteristic or infringes fundamental constitutional
rights, the presumption of constitutionality is reversed;
that is, such legislation is assumed to be
unconstitutional until the government demonstrates
otherwise. The government must show that the
statute is supported by a compelling governmental
interest and the means chosen to accomplish that
interest are narrowly tailored.97 Gerald Gunther
explains as follows:
... The intensive review associated with the new equal
protection imposed two demands a demand not only
as to means but also as to ends. Legislation qualifying
for strict scrutiny required a far closer fit between
classification and statutory purpose than the rough
and ready flexibility traditionally tolerated by the old
equal protection: means had to be shown "necessary"
to achieve statutory ends, not merely "reasonably
related." Moreover, equal protection became a source
of ends scrutiny as well: legislation in the areas of the
new equal protection had to be justified by
"compelling" state interests, not merely the wide
spectrum of "legitimate" state ends.98
Furthermore, the legislature must adopt the least
burdensome or least drastic means available for
achieving the governmental objective.99
While Strict Scrutiny has, as yet, not found
widespread application in this jurisdiction, the tenet
that legislative classifications involving fundamental
rights require a more rigorous justification under more
stringent standards of analysis has been
acknowledged in a number of Philippine
cases.100 Since the United States' conception of the
Equal Protection Clause was largely influenced by its
history of systematically discriminating along racial
lines, it is perhaps no surprise that the Philippines
which does not have any comparable experience has
not found a similar occasion to apply this particular
American approach of Equal Protection.
Intermediate Scrutiny
The Rational Basis Test and Strict Scrutiny form what
Gerald Gunther termed as the two-tier approach to
equal protection analysis - the first tier consisting of
the Rational Basis Test (also called by Gunther as the
old equal protection) while the second tier consisting
of Strict Scrutiny (also called by Gunther as the new
equal protection).101 Gunther however described the
two-tier approach employed by the U.S. Supreme
Court as being rigid, criticizing the aggressive new
equal protection for being "strict in theory and fatal in
fact"102 and the deferential old equal protection as
"minimal scrutiny in theory and virtually none in
fact."103
Gunther's sentiments were also shared by certain
members of the Burger Court, most notably Justice
Marshall who advocated a Sliding Scale Approach
which he elaborated on in his dissenting opinion
in San Antonio Independent School District v.
Rodriguez:104
To begin, I must once more voice my disagreement
with the Court's rigidified approach to equal protection
analysis. See Dandridge v. Williams, 397 U.S. 471,
519--521, 90 S.Ct. 1153, 1178--1180, 25 L.Ed.2d 491
(1970) (dissenting opinion); Richardson v. Belcher,
404 U.S. 78, 90, 92 S.Ct. 254, 261, 30 L.Ed.2d 231
(1971)(dissenting opinion). The Court apparently
seeks to establish today that equal protection cases
fall into one of two neat categories which dictate the
appropriate standard of review--strict scrutiny or mere
rationality. But this Court's decisions in the field of
equal protection defy such easy categorization. A
principled reading of what this Court has done reveals
that it has applied a spectrum of standards in
reviewing discrimination allegedly violative of the
Equal Protection Clause. This spectrum clearly
comprehends variations in the degree of care with
which the Court will scrutinize particular
classifications, depending, I believe, on the
constitutional and societal importance of the interest
adversely affected and the recognized invidiousness
of the basis upon which the particular classification is
drawn. I find in fact that many of the Court's recent
decisions embody the very sort of reasoned approach
to equal protection analysis for which I previously
argued--that is, an approach in which 'concentration
(is) placed upon the character of the classification in
question, the relative importance to individuals in the
class discriminated against of the governmental
benefits that they do not receive, and the asserted
state interests in support of the
classification.' Dandridge v. Williams, supra, 397 U.S.,
at 520--521, 90 S.Ct., at 1180 (dissenting opinion).105
Shortly before his retirement in 1991, Justice Marshall
suggested to the Supreme Court that it adopt a
Sliding Scale that would embrace a spectrum of
standards of review.106
Other sources of discontent in the U.S. Supreme
Court are Justice Stevens who argues for a return to
the Rational Basis Test which he believes to be
adequate to invalidate all invidious forms of
discrimination and Chief Justice Rehnquist who is
disgruntled with the Court's special solicitude for the
claims of discrete and insular minorities.107
Yet, despite numerous criticisms from American legal
luminaries, the U.S. Supreme Court has not done
away with the Rational Basis Test and Strict Scrutiny
as they continue to remain viable approaches in equal
protection analysis. On the contrary, the American
Court has developed yet a third tier of equal
protection review, falling between the Rational Basis
Test and Strict Scrutiny -Intermediate Scrutiny (also
known as Heightened Scrutiny).
The U.S. Supreme Court has generally applied
Intermediate or Heightened Scrutiny when the
challenged statute's classification is based on either
(1) gender or (2) illegitimacy.108
Gender-based classifications are presumed
unconstitutional as such classifications generally
provide no sensible ground for differential treatment.
In City of Cleburne, Texas v. Cleburne Living
Center,109 the United States Supreme Court said:
"[W]hat differentiates sex from such nonsuspect
statuses as intelligence or physical disability ... is that
the sex characteristic frequently bears no relation to
ability to perform or contribute to society." Frontiero v.
Richardson, 411 U.S. 677, 686, 93 S.Ct. 1764, 1770,
36 L.Ed.2d 583 (1973) (plurality opinion). Rather than
resting on meaningful considerations, statutes
distributing benefits and burdens between the sexes
in different ways very likely reflect outmoded notions
of the relative capabilities of men and women.110
In the same manner, classifications based on
illegitimacy are also presumed unconstitutional as
illegitimacy is beyond the individual's control and
bears no relation to the individual's ability to
participate in and contribute to society.111 Similar to
Strict Scrutiny, the burden of justification for the
classification rests entirely on the Appropriate Standard for 
government.112 Thus, the government must show at Evaluating the Present Case
least that the statute serves an important purpose and
that the discriminatory means employed is Which of the foregoing three standards should be
substantially related to the achievement of those applied in arriving at a resolution of the instant
objectives.113 petition?
Summary of the American Supreme Court Impropriety of a double standard for evaluating
Approach to Equal Protection compliance with the equal protection guaranty
In fine, the three standards currently employed by the As noted earlier, the main opinion, in arriving at its
U.S. Federal Supreme Court for determining the conclusion, simultaneously makes use of both the
constitutional validity of a statutory classification in the Rational Basis Test and the Strict Scrutiny Test. Thus,
light of the equal protection clause maybe in assessing the validity of the classification between
summarized114 as follows: executive and rank and file employees in Section 15
(c) of The New Central Bank Act, the Rational Basis
Equal Protection Standards Test was applied. In evaluating the distinction
between the rank and file employees of the BSP and
  Rational Basis Strict Scrutiny the rank and file employees of the LBP, DBP, SSS
and GSIS, the Strict Scrutiny Test was employed.
Applicable To Legislative Legislative
classifications classifications affectingfundamental
Despite my best efforts, I fail to see the justification for
in general, such suspect classes. the use of this "double standard" in determining the
as those constitutionality of the questioned proviso. Why a
pertaining to "deferential test" for one comparison (between the
economic or executives and rank and file of the BSP) and a "strict
social test" for the other (between the rank and file of the
legislation, BSP and the rank and file of the other GOCCs/GFIs)?
which do not
affect As the preceding review of the standards developed
fundamental by the U.S. Federal Supreme Court shows, the choice
rights or suspect of the appropriate test for evaluating a legislative
classes; or is not classification is dependent on the nature of the rights
based on gender affected (i.e.whether "fundamental" or not) and the
or illegitimacy. character of the persons allegedly discriminated
against (i.e. whether belonging to a "suspect class" or
Legislative Must Must be compelling.not). As determined by these two parameters, the
Purpose be legitimate. scope of application of each standard is distinct and
exclusive of the others. Indeed, to my knowledge, the
Relationship of Classification Classification must be
American Court has never applied more than one
Classification to must narrowly tailored standard to a given set of facts, and where one
Purpose be rationally purpose. standard was found to be appropriate, the U.S.
related to the Supreme Court has deliberately eschewed any
legislative discussion of another.115
purpose.
Assuming that the equal protection standards evolved
by the U.S. Supreme Court may be adopted in this
jurisdiction, there is no reason why the exclusive
manner of their application should not be adopted
also.
In the present case, the persons allegedly
discriminated against (i.e. the rank and file employees
of the BSP) and the rights they are asserting (to be
exempted from the Compensation Classification
System prescribed by the Salary Standardization
Law) remain the same, whether the classification
under review is between them and the executive
officers of the BSP or the rank and file employees of
the LBP, DBP, SSS and GSIS.
It therefore stands to reason that the test or standard
— whether Rational Basis, Strict Scrutiny or
Intermediate Scrutiny - against which petitioner's
claims should be measured should likewise be the
same, regardless of whether the evaluation pertains
to the constitutionality of (1) the classification
expressly made in Section 15 (c) of The New Central
Bank Act or (2) the classification resulting from the
amendments of the charters of the other
GOCCs/GFIs.
To illustrate further, if petitioner's constitutional
challenge is premised on the denial of a "fundamental
right" or the perpetuation of prejudice against a
"suspect class," as suggested (but not fully
explicated) in the closing pages of the main opinion;
then, following the trend in American jurisprudence,
the Strict Scrutiny Test would be applicable, whether
the classification being reviewed is that between the
officers and rank and file of the BSP or between the
rank and file of the BSP and the rank and file of the
other GOCCs/GFIs.
But certainly, the same group of BSP rank and file
personnel cannot be considered a "non-suspect
class" when compared to the BSP executive corps,
but members of a "suspect class" when compared to
the rank and file employees of the other
GOCCs/GFIs. Neither could the rights they assert be
simultaneously "fundamental" and "less than
fundamental." Consequently, it would be improper to
apply the Rational Basis Test as the standard for one
comparison and the Strict Scrutiny Test for the other.
To do so would be to apply the law unevenly and,
accordingly, deny the persons concerned "the equal
protection of the laws."
"Relative Constitutionality" Not A
Justification for the Double Standard
It would appear that the employment of a "double
standard" in the present case is sought to be justified
somehow by the concept of relative constitutionality
invoked by the main opinion. Thus, the main opinion
holds that the "subsequent enactments, however,
constitute significant changes in circumstance that
considerably alter the reasonability of the continued
operation of the last proviso of Section 15 (c), Article
II of Republic Act No. 7653, and exposes
the proviso to more serious scrutiny."
The ponencia likewise invites this Court to reflect on
the following questions: "Given that Congress chose
to exempt other GFIs (aside the BSP) from the
coverage of the SSL, can the exclusion of the rank-
and-file employees of the BSP stand constitutional
scrutiny in the light of the fact that Congress did not
exclude the rank-and-file employees of the other
GFIs? Is Congress' power to classify unbridled as to
sanction unequal and discriminatory treatment, simply
because the inequity manifested not instantly through
a single overt act, but gradually through seven
separate acts? Is the right to equal protection
bounded in time and space that: (a) the right can be
invoked only against classification made directly and
deliberately, as opposed to discrimination that arises
indirectly as a consequence of several other acts?
and (b) is the legal analysis confined to determining
the validity within the parameters of the statute x x x
thereby proscribing any evaluation vis-à-vis the
groupings or the lack thereof among several similar
enactments made over a period of time?"116
To clarify, it was never suggested that judicial review
should be confined or limited to the questioned statute
itself without considering other related laws. It is well
within the powers of this Court to resolve the issue of
whether the subsequent amendments of the charters
of other GOCCs and other GFIs altered the
constitutionality of Section 15 (c) of the New Central
Bank Act.
It is, however, what to me is the improper resort by
the main opinion to relative constitutionality, and as to
be subsequently demonstrated, the use of an
inappropriate standard for equal protection analysis,
that constrained me to register my dissent.
As illustrated in the main opinion, "relative
constitutionality" refers to the principle that a statute
may be constitutionally valid as" applied to one set of
facts and invalid in its application to another set of
facts. Thus, a statute valid at one time may become
void at another time because of altered factual
circumstances.
This principle is really a corollary to the requirements
that a valid classification (a) must be based on real
and substantial (not merely superficial) distinctions
and (b) must not be limited to existing conditions only.
"Substantial distinctions" must necessarily be derived
from the objective factual circumstances of the
classes or groups that a statute seeks to differentiate.
The classification must be real and factual and not
wholly abstract, artificial, or contrived. Thus,
in Victoriano v. Elizalde Rope Workers' Union,117 this
Court stated:
We believe that Republic Act No. 3350 satisfies the
aforementioned requirements. The Act classifies
employees and workers, as to the effect and
coverage of union shop security agreements, into
those who by reason of their religious beliefs and
convictions cannot sign up with a labor union, and
those whose religion does not prohibit membership in
labor unions. The classification rests on real or
substantial, not merely imaginary or whimsical,
distinctions. There is such real distinction in the
beliefs, feelings and sentiments of employees.
Employees do not believe in the same religious faith
and different religions differ in their dogmas and
cannons. Religious beliefs, manifestations and
practices, though they are found in all places, and in
all times, take so many varied forms as to be almost
beyond imagination. There are many views that
comprise the broad spectrum of religious beliefs
among the people. There are diverse manners in
which beliefs, equally paramount in the lives of their
possessors, may be articulated. Today the country is
far more heterogenous in religion than before,
differences in religion do exist, and these differences
are important and should not be ignored.118 (Emphasis
supplied)
In the words of Justice Jackson of the U.S. Supreme
Court in Walters v. City of St. Louis, Missouri:119
x x x Equal protection does not require identity of
treatment. It only requires that classification rest
on real and not feigned differences, that the
distinctions have some relevance to the purpose
for which the classification is made, and that the
different treatments be not so disparate, relative
to the difference in classification, as to be wholly
arbitrary, x x x120 (Emphasis and underscoring
supplied)
For this reason, in reviewing legislation challenged on
equal protection grounds - particularly when a statute
otherwise valid on its face is alleged to be
discriminatory in its application - a court must often
look beyond the four corners of the statute and
carefully examine the factual circumstances of the
case before it.
Thus, in Ermita-Malate Hotel and Motel Operations
Associations, Inc. v. Hon. City Mayor of Manila,121 this
Court, in reversing a trial court decision invalidating
an ordinance regulating the operation of motels and
hotels in Manila, held:
Primarily what calls for a reversal of such a decision is
the absence of any evidence to offset the
presumption of validity that attaches to a challenged
statute or ordinance. As was expressed categorically
by Justice Malcolm: "The presumption is all in favor of
validity . . . . The action of the elected representatives
of the people cannot be lightly set aside. The
councilors must, in the very nature of things, be
familiar with the necessities of their particular
municipality and with all the facts and circumstances
which surround the subject and necessitate action.
The local legislative body, by enacting the ordinance,
has in effect given notice that the regulations are
essential to the well being of the people . . . . The
Judiciary should not lightly set aside legislative action
when there is not a clear invasion of personal or
property rights under the guise of police regulation."
It admits of no doubt therefore that there being a
presumption of validity, the necessity for
evidence to rebut it is unavoidable, unless the
statute or ordinance is void on its face, which is
not the case here. The principle has been nowhere
better expressed than in the leading case of
O'Gorman & Young v. Hartford Fire Insurance Co.,
where the American Supreme Court through Justice
Brandeis tersely and succinctly summed up the
matter thus: "The statute here questioned deals with a
subject clearly within the scope of the police power.
We are asked to declare it void on the ground that the
specific method of regulation prescribed is
unreasonable and hence deprives the plaintiff of due
process of law. As underlying questions of fact
may condition the constitutionality of legislation
of this character, the presumption of
constitutionality must prevail in the absence
of some factual foundation of record for
overthrowing the statute." No such factual
foundation being laid in the present case, the lower
court deciding the matter on the pleadings and the
stipulation of facts, the presumption of validity must
prevail and the judgment against the ordinance set
aside.122 (Emphasis and underscoring supplied)
And in Peralta v. Commission on Elections,123 this
Court stated:
The equal protection clause does not forbid all legal
classifications. What [it] proscribes is a classification
which is arbitrary and unreasonable. It is not violated
by a reasonable classification based upon substantial
distinctions, where the classification is germane to the
purpose of the law and applies equally to all those
belonging to the same class. The equal protection
clause is not infringed by legislation which applies
only to those persons falling within a specified class, if
it applies alike to all persons within such class, and
reasonable grounds exist for making a distinction
between those who fall within the class and those
who do not. There is, of course, no concise or easy
answer as to what an arbitrary classification is.
No definite rule has been or can be laid down on
the basis of which such question may be
resolved. The determination must be made in
accordance with the facts presented by the
particular case. The general rule, which is well-
settled by the authorities, is that a classification,
to be valid, must rest upon material
differences between the persons, activities or
things included and those excluded.' There must,
in other words, be a basis for
distinction. Furthermore, such classification must be
germane and pertinent to the purpose of the law. And,
finally, the basis of classification must, in general, be
so drawn that those who stand in substantially the
same position with respect to the law are treated
alike, x x x124(Emphasis and underscoring supplied)
A similar thought was expressed in Medill v. State of
Minnesota,125 cited in the main opinion,126 where the
State Supreme Court of Minnesota127 reversed a
decision of the U.S. Bankruptcy Court and held that a
statute exempting "[r]ights of action for injuries to the
person of the debtor or of a relative" from
"attachment, garnishment, or sale on any final
process, issued from any court," did not contravene
the provisions of the Minnesota Constitution limiting
exemptions to a "reasonable amount" to be
determined by law. The Minnesota Court held:
x x x we must determine here whether there is an
objective measure which limits the amount or extent
of the personal injury right of action exemption since
there is no dollar limit or "to the extent reasonably
necessary" limiting language on the face of the
provision. The trustee argues that the case is
"incredibly simple" because there is no language on
the face of the statute purporting to limit the
exemption. The state and debtors argue that the
judicial determination of general damages in a
personal injury action is based on objective criteria;
therefore, the amount of the exemption is reasonable
and "determined by law" under article 1, section 12.
We think that the latter interpretation is reasonable
and that the trustee has failed to meet his burden of
proving beyond a reasonable doubt that the provision
is unconstitutional.
xxx
Here, the resolution of the Medills' personal injury
action involved a judicial determination of an amount
that reasonably compensated them for their injuries.
The Medills' recovery was reasonably limited by a
jury's determination of damages, which was then
approved by a court. Contrary to the trustee's
argument, we believe that the limits on out-of-court
settlements are similarly reasonable. First, unless a
statute is inherently unconstitutional, "its validity
must stand or fall upon the record before the
court and not upon assumptions this court might
[otherwise] make * * *." Grobe v. Oak Center
Creamery Co , 262 Minn. 60, 63, 113 N.W.2d 458,
460 (1962). Moreover, even in the case of an out-of-
court settlement, the "inherent" limitation on the right
of action still exists; the amount of a settlement is
limited to or by the extent of injury, and no party will
agree to an "unreasonable" settlement.
The trustee vigorously argues that the court must go
considerably beyond the plain language of the statute
and rules of statutory construction to impose the
required constitutional limit on the exemption
provision at issue here. However, the
constitutionality of a statute cannot in every
instance be determined by a mere comparison of
its provisions with the applicable provisions of
the constitution. A statute may be constitutional
and valid as applied to one set of facts and invalid
in its application to another. Grobe, 262 Minn, at
62, 113 N.W.2d at 460. Thus, unless we find the
exemption unconstitutional on its face, it must be
unconstitutional as applied to the facts of the
instant case in order to be stricken.128(Emphasis
supplied)
This does not mean that the factual differences must
be prominent for the distinction between two classes
to be substantial. Nor are fine distinctions between
two classes, otherwise sharing several common
attributes, prohibited. Thus, the Court in Peralta, went
on to state:
x x x It is, however, conceded that it is almost
impossible in some matters to foresee and provide for
every imaginable and exceptional case. Exactness in
division is impossible and never looked for in
applying the legal test. All that is required is that
there must be, in general, some reasonable basis
on general lines for the division. Classification
which has some reasonable basis does not offend
the equal protection clause merely because it is
not made with mathematical nicety. (Emphasis
supplied; citations omitted)
The pronouncement in Victoriano v. Elizalde Rope
Workers' Union,129 is also instructive:
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.130 (Emphasis
supplied; citations omitted)
To be sure, this Court has adjudged as valid statutes
providing for differences in treatment between: inter-
urban buses and provincial buses;131 taxpayers
receiving compensation income and other
taxpayers;132 male overseas workers and female
overseas workers;133 electric cooperatives and other
cooperatives;134 businesses inside the secured area of
the Subic Special Economic Zone and those outside
the secured area;135 public officers with pending
criminal cases which have not yet gone to trial and
those with cases wherein trial has already
commenced;136 and City and Municipal Election
Officers of the Commission On Elections (COMELEC)
and other COMELEC officials.137
Nevertheless, to be substantial, these distinctions, no
matter how finely drawn, must still be rooted on
some objective factual foundation; and cannot be left
to the arbitrary, whimsical or capricious imagination of
the law maker.
Thus, relative constitutionality, as I understand it,
merely acknowledges that the factual
circumstances which form the bases for the
substantial and real distinctions between two
classes may change over time. Thus, it is entirely
possible that a legislative classification held to be
valid at one time upon a particular state of facts may
be subsequently invalidated if the factual basis for the
substantial distinctions that existed between the two
classes has ceased to exist. Cessante ratione legis,
cessat ipsa lex.138
Just such a possibility was acknowledged by the U.S.
Supreme Court in Chastleton Corporation v.
Sinclair,139where the Court, speaking through Justice
Holmes, declared:
The original Act of October 22, 1919, c. 80, tit. 2, 41
Stat. 297, considered in Block v. Hirsh, was limited to
expire in two years. Section 122. The Act of August
24, 1921, c. 91, 42 Stat. 200, purported to continue it
in force, with some amendments, until May 22, 1922.
On that day a new act declared that the emergency
described in the original title 2 still existed, reenacted
with further amendments the amended Act of 1919,
and provided that it was continued until May 22, 1924.
Act of May 22, 1922, c. 197, 42 Stat. 543.
We repeat what was stated in Block v. Hirsh, as to the
respect due to a declaration of this kind by the
Legislature so far as it relates to present facts. But
even as to them a Court is not at liberty to shut its
eyes to an obvious mistake, when the validity of the
law depends upon the truth of what is declared. And
still more obviously so far as this declaration looks to
the future it can be no more than prophecy and is
liable to be controlled by events. A law depending
upon the existence of an emergency or
other certain state of facts to uphold it may cease
to operate if the emergency ceases or the facts
change even though valid when passed, x x
x140 (Emphasis supplied; citations omitted)
Indeed, this appears to be the thrust of the cases
cited141 by the main opinion to illustrate relative
constitutionality:
The case of Vernon Park Realty v. City of Mount
Vernon142 concerned a parcel of land adjacent to a
railroad station and located in the middle of a highly
developed business district had continually been used
as a car park. In 1927 it was placed in a Residence 'B'
district under a zoning ordinance under which its use
as a car park remained a valid nonconforming use. In
1951, the area was sold to Vernon Park Realty which
applied for, but did not obtain, a permit to build a retail
shopping center (prohibited under the 1927
ordinance). In 1952, after Vernon Park had brought
suit to declare the 1927 ordinance unconstitutional,
the city's common council amended the zoning
ordinance to prohibit the use of the property for any
purpose except the parking and storage of
automobiles and the continuance of prior
nonconforming uses. The Court of Appeals of New
York found the 1927 zoning ordinance and the 1952
amendment illegal and void, ruling that:
While the common council has the unquestioned right
to enact zoning laws respecting the use of property in
accordance with a well-considered and
comprehensive plan designed to promote public
health, safety and general welfare, such power is
subject to the constitutional limitation that it may not
be exerted arbitrarily or unreasonably and this is so
whenever the zoning ordinance precludes the use of
the property for any purpose for which it is reasonably
adapted. By the same token, an ordinance valid
when adopted will nevertheless be stricken down
as invalid when, at a later time, its operation
under changed conditions proves confiscatory
such, for instance, as when the greater part of its
value is destroyed for which the courts will afford
relief in an appropriate case.143 (Emphasis supplied;
citations omitted)
In Nashville, Chatanooga & St. Louise Railways v.
Walters,144 the petitioners questioned the
constitutionality of a provision of the Tennessee
Public Acts of 1921, which authorized the state
highway commissioner to require the separation of
grades whenever a state highway crosses a railroad if
in its discretion "the elimination of such grade
crossing is necessary for the protection of persons
traveling on any such highway or any such railroad"
and requiring the railroad company to pay in every
case, one-half of the total cost of the separation of
grades. In remanding the case to the Supreme Court
of Tennessee, the U.S. Federal Supreme Court
declared:
The Supreme Court [of Tennessee] declined to
consider the Special facts relied upon as showing that
the order, and the statute as applied, were arbitrary
and unreasonable; and did not pass upon the
question whether the evidence sustained those
findings. It held that the statute was, upon its face,
constitutional; that when it was passed the state had,
in the exercise of its police power, authority to impose
upon railroads one-half of the cost of eliminating
existing or future grade crossings; and that the court
could not "any more" consider "whether the provisions
of the act in question have been rendered
burdensome or unreasonable by changed economic
and transportation conditions," than it "could consider
changed mental attitudes to determine the
constitutionality or enforceability of a statute." A rule
to the contrary is settled by the decisions of this
Court. A statute valid as to one set of facts may be
invalid as to another. A statute valid when
enacted may become invalid by change in the
conditions to which it is applied. The police power
is subject to the constitutional limitation that it may not
be exerted arbitrarily or unreasonably. To this
limitation, attention was specifically called in cases
which have applied most broadly the power to impose
upon railroads the cost of separation of grades.
First. Unless the evidence and the special facts relied
upon were of such a nature that they could not
conceivably establish that the action of the state in
imposing upon the railway one-half of the cost of the
underpass was arbitrary and unreasonable, the
Supreme Court [of Tennessee] obviously erred in
refusing to consider them. The charge of
arbitrariness is based primarily upon the
revolutionary changes incident to transportation
wrought in recent years by the widespread
introduction of motor vehicles; the assumption by
the federal government of the functions of road
builder; the resulting depletion of rail revenues;
the change in the character, the construction, and
the use of highways; the change in the occasion
for elimination of grade crossings, in the purpose
of such elimination, and in the chief beneficiaries
thereof; and the change in the relative
responsibility of the railroads and vehicles
moving on the highways as elements of danger
and causes of accidents. x x x
xxx
Second. x x x The promotion of public convenience
will not justify requiring of a railroad, any more than of
others, the expenditure of money, unless it can be
shown that a duty to provide the particular
convenience rests upon it.145 (Emphasis supplied;
citations omitted)
In Atlantic Coast Line Railroad Co. v. Ivey,146 an
action for damages was filed against the Atlantic
Coast Line Railroad Company for the killing of a cow
on an unfenced right of way under certain Florida
statutes authorizing the recovery of double damages
plus attorney's fees for animals killed on unfenced
railroad right of way, without proof of negligence. The
railroad company alleged that several changes in
economic, transportation and safety conditions had
occurred since these statutes were passed in
1899147 and that, in view of these changes, it was
unfair, unjust and inequitable to require railroad
companies to fence their tracks to protect against
livestock roaming at large without making a similar
requirement for the owners of automobiles, trucks and
buses carrying passengers on the unfenced public
highways. In ruling that the questioned statutes
violated the equal protection guaranty, the Supreme
Court of Florida reasoned:
It stands adjudicated that the purpose of the statutes,
supra, is the protection against accidents to life and
property in conducting public transportation and that
such statutes are in the exercise of the police power.
It cannot be questioned that those transportation
companies engaged as common carriers on the
public roads and those so engaged on their privately
owned roads such as railroad companies, owe like
duties to the public and are under like obligations for
the protection against accidents to life and property in
conducting such business.
It is well settled that a statute valid when enacted
may become invalid by. change in conditions to
which it is applied. The allegations of the pleas are
sufficient to show, and the demurrer admits, that
compliance with the statute places a burden of
expense on the railroad company to provide for the
safety of life and property of those whom it assumes
to serve which is not required to be borne by
competitive motor carriers which subject the lives and
property of those whom they assume to serve to
greater hazards of the identical character which the
railroad is required to so guard against and it is also
shown that under the statutes penalties are imposed
on the railway carrier in favor of individuals who are
neither shippers nor passengers.
Under the statutes, as shown by the record here, the
railway common carrier is not only required to carry
the burden of fencing its traffic line for the protection
of the persons and property it transports, while other-
common carriers are not required to provide the like
protection, but in addition to this, there is another
gross inequality imposed by the statute, viz: Under
the statutes the plaintiff to whom the carrier, as
such, was under no obligations, was allowed to
recover double the value of the animal killed, plus
$50 as attorney's fees, and was not required to
prove any act of negligence on the part of the
carrier in the operation of its equipment, while if a
common carrier bus or truck had by the operation
of its equipment killed the same animal in the
same locality, the plaintiff would have been
required to prove negligence in the operation of
the equipment and the common carrier would
have been liable only for the value of the animal.
This certainly is not equal protection of the
law.148 (Emphasis and underscoring supplied;
citations omitted)
Similarly, the case of Louisville & Nashville Railroad
Co. v. Faulkner149 concerned an action to recover the
value of a mule killed by the railroad company's train
under a Kentucky statute which made the killing or
injury of cattle by railroad engines or cars prima
facie evidence of negligence on the part of the
railroad's agents or servants. The Kentucky Supreme
Court, following the rulings in Nashville and Atlantic
Coast, adjudged the questioned statute to be
unconstitutional, viz:
The present statute which places the duty upon a
railroad company to prove it was free from negligence
in killing an animal upon its track is an act of 1893.
The genesis of the legislation, however, goes back to
the beginning of railroad transportation in the
state. The constitutionality of such legislation was
sustained because it applied to all similar
corporations and had for its object the safety of
persons on a train and the protection of
property. Louisville & N. R. Co. v. Belcher, 89 Ky.
193, 12 S.W. 195,11 Ky.Law Rep. 393, a decision
rendered in 1889.
Of course, there were no automobiles in those
days. The subsequent inauguration and
development of transportation by motor vehicles
on the public highways by common carriers of
freight and passengers created even greater risks
to the safety of occupants of the vehicles and of
danger of injury and death of domestic animals.
Yet, under the law the operators of that mode of
competitive transportation are not subject to the
same extraordinary legal responsibility for killing
such animals on the public roads as are railroad
companies for killing them on their private rights
of way.
The Supreme Court, speaking through Justice
Brandeis in Nashville, C. & St. L. Ry. Co. v. Walters,
294 U.S. 405, 55 S.Ct. 486, 488. 79 L.Ed. 949,
stated, 'A statute valid when enacted may become
invalid by change in the conditions to which it is
applied. The police power is subject to the limitation
that it may not be exerted arbitrarily or unreasonably.'
A number of prior opinions of that court are cited in
support of the statement. See 11 Am.Jur.,
Constitutional Law, § 102.
The State of Florida for many years had a
statute, F.S.A. § 356.01 et seq. imposing
extraordinary and special duties upon railroad
companies, among which was that a railroad
company was liable for double damages and an
attorney's fee for killing livestock by a train without the
owner having to prove any act of negligence on the
part of the carrier in the operation of his train.
In Atlantic Coast Line Railroad Co. v. Ivey, 148 Fla.
680, 5 So.2d 244, 247, 139 A.L.R. 973, it was held
that the changed conditions brought about by
motor vehicle transportation rendered the statute
unconstitutional since if a common carrier by
motor vehicle had killed the same animal, the
owner would have been required to prove
negligence in the operation of its equipment. Said
the court, 'This certainly is not equal protection of
the law.'
As stated in Markendorf v. Friedman, 280 Ky. 484,
133 S.W.2d 516, 127 A.L.R. 416, appeal dismissed
Friedman v.. Markendorf, 309 U.S. 627, 60 S.Ct. 610,
84 L.Ed. 987, the purpose of the provisions of §§
3and 59 of the Kentucky Constitution and of the
Fourteenth Amendment to the Federal
Constitution is to place all persons similarly
situated upon a plane of equality and to render it
impossible for any class to obtain preferred
treatment. Applying this proscription of inequality and
unreasonable discrimination, we held invalid an
amendment to a statute regulating motor
transportation for hire which exempted from the
operation of the statute such vehicles engaged in
transporting farm products. Priest v. State Tax
Commission, 258 Ky. 391, 80 S.W.2d 43.
We, therefore, hold that the part of KRS
277.330 which imposes a duty upon a railroad
company of proving that it was free from negligence in
the killing or injury of cattle by its engine or cars is
invalid and unconstitutional.150 (Emphasis supplied;
underscoring in the original)
Finally, in Rutter v. Esteban,151 this Court invalidated
Section 2 of R.A. No. 342 providing for an eight-year
moratorium period within which a creditor could not
demand payment of a monetary obligation contracted
before December 8, 1941 (counted from the
settlement of the war damage claim of the debtor)
after taking judicial notice of the significant change in
the nation's economic circumstances in 1953, thus it
held:
xxx We do not need to go far to appreciate this
situation. We can see it and feel it as we gaze around
to observe the wave of reconstruction and
rehabilitation that has swept the country since
liberation thanks to the aid of America and the innate
progressive spirit of our people. This aid and this spirit
have worked wonders in so short a time that it can
now be safely stated that in the main the financial
condition of our country and our people, individually
and collectively, has practically returned to normal
notwithstanding occasional reverses caused by local
dissidence and the sporadic disturbance of peace and
order in our midst. Business, industry and agriculture
have picked up and developed at such stride that we
can say that we are now well on the road to recovery
and progress. This is so not only as far as our
observation and knowledge are capable to take note
and comprehend but also because of the official
pronouncements made by our Chief Executive in
public addresses and in several messages he
submitted to Congress on the general state of the
nation, x x x
xxx
In the face of the foregoing observations, and
consistent with what we believe to be as the only
course dictated by justice, fairness and
righteousness, we feel that the only way open to us
under the present circumstances is to declare that
the continued operation and enforcement of
Republic Act No. 342 at the present time is
unreasonable and oppressive, and should not be
prolonged a minute longer, and, therefore, the same
should be declared null and void and without effect. x
x x152 (Emphasis supplied)
As the financial ruin and economic devastation which
provided the rationale for the enactment of R.A. No.
342 was no longer present, this Court did not hesitate
to rule that the continued enforcement of the statute
was "unreasonable and oppressive, and should not
be prolonged a minute longer."
In the case at bar, however, petitioner does not allege
a comparable change in the factual milieu as regards
the compensation, position classification and
qualifications standards of the employees of the BSP
(whether of the executive level or of the rank and file)
since the enactment of The New Central Bank Act.
Neither does the main opinion identify the
relevant factual changes which may have occurred
vis-à-vis the BSP personnel that may justify the
application of the principle of relative constitutionality
as above-discussed. Nor, to my knowledge, are there
any relevant factual changes of which this Court may
take judicial knowledge. Hence, it is difficult to see
how relative constitutionality may be applied to the
instant petition.
Moreover, even if such factual changes were alleged
and proved or judicially discoverable, still there
is absolutely nothing in any of the cases above-cited
which would justify the simultaneous application of
both the Rational Basis Test and the Strict Scrutiny
Test. In fact, in the case of Louisville & Nashville
Railroad Co.,153 wherein a statute previously held to
have complied with the requirements of the equal
protection clause in 1889 was subsequently ruled to
have violated the equal protection guaranty in 1957
due to changed factual conditions, the only
test applied in both instances was the Rational Basis
Test.154
It is true that petitioner alleges that its members' claim
to exemption from the Compensation Classification
System under the Salary Standardization Law was
bolstered by the amendments to the charters of the
LBP, DBP, SSS and GSIS, which exempted all the
employees of these GOCCs/GFIs from said
Compensation Classification System. However, these
subsequent amendments do
not constitute factual changes in the context of
relative constitutionality. Rather, they
involve subsequent legislative classifications which
should be evaluated in accordance with the
appropriate standard.
To assess the validity of the questioned proviso in the
light of subsequent legislation, all that need be
applied is the familiar rule that statutes that are in pari
materia155 should be read together. As this Court
declared in City of Naga v. Agna,156 viz:
x x x Every new statute should be construed in
connection with those already existing in relation
to the same subject matter and all should be
made to harmonize and stand together, if they can
be done by any fair and reasonable
interpretation . . . It will also be noted that Section
2309 of the Revised Administrative Code and Section
2 of Republic Act No. 2264 (Local Autonomy Act)
refer to the same subject matter — enactment and
effectivity of a tax ordinance. In this respect they can
be considered in pari materia. Statutes are said to
be in pari materia when they relate to the same
person or thing, or to the same class of persons
or things, or have the same purpose or object.
When statutes are in pari materia, the rule of
statutory construction dictates that they should
be construed together. This is
because enactments of the same legislature on
the same subject matter are supposed to form
part of one uniform system; that later statutes are
supplementary or complimentary to the earlier
enactments and in the passage of its acts the
legislature is supposed to have in mind the
existing legislation on the same subject and to
have enacted its new act with reference thereto.
Having thus in mind the previous statutes relating
to the same subject matter, whenever the
legislature enacts a new law, it is deemed to have
enacted the new provision in accordance with the
legislative policy embodied in those prior statutes
unless there is an express repeal of the old and
they all should be construed
together.157 (Emphasis and underscoring supplied;
citations omitted)
Here, it can be said that the Salary Standardization
Law, the New Central Bank Act, and the amended
charters of the other GOCCs and GFIs are in pari
materia insofar as they pertain to compensation and
position classification system(s) covering government
employees. Consequently, the provisions of these
statutes concerning compensation and position
classification, including the legislative classifications
made therein, should all be read and evaluated
together in the light of the equal protection clause.
Consequently, the relevant question is whether these
statutes, taken together as one uniform system of
compensation for government employees, comply
with the requisites of the equal protection guaranty.
Rational Basis Test Appropriate to the Case at Bar
Turning then to the determination of the standard
appropriate to the issues presented by the instant
petition, it is immediately apparent that Intermediate
Scrutiny, inasmuch as its application has been limited
only to classifications based on gender and
illegitimacy, finds no application to the case at bar.
The choice of the appropriate standard is thus
narrowed between Strict Scrutiny and the Rational
Basis Test. As has been observed, Strict Scrutiny has
been applied in the American context when a
legislative classification intrudes upon a fundamental
right or classifies on the basis of an inherently suspect
characteristic.
Strict Scrutiny cannot be applied in the case at bar
since nowhere in the petition does petitioner allege
that Article II, Section 15 (c) of the New Central Bank
Act burdens a fundamental right of its members. The
petition merely states that "the proviso in
question violates the right to equal protection of
the laws of the BSP rank and file employees who
are members of the petitioner."158 While it is true that
the Equal Protection Clause is found in the Bill of
Rights of both the American and Philippine
Constitutions, for strict scrutiny to apply there must be
a violation of a Constitutional right other than the right
to equal protection of the laws. To hold otherwise
would be absurd as any invocation of a violation of
the equal protection clause would automatically result
in the application of Strict Scrutiny.
In Vacco v. Quill,159 several physicians challenged a
New York statute which prohibits assistance to
suicide. They argued that although it was consistent
with the standards of their medical practice to
prescribe lethal medication for mentally competent,
terminally ill patients who are suffering great pain and
desire a doctor's help in taking their own lives, they
are deterred from doing so by New York's ban on
assisting suicide.160 They contend that because New
York permits a competent person to refuse life-
sustaining medical treatment and because the refusal
of such treatment is "essentially the same thing" as
physician-assisted suicide, the ban violates the Equal
Protection Clause.161 A unanimous U.S. Supreme
Court applied the Rational Basis Test as the statute
did not infringe fundamental rights. Moreover, the
Court held that the guarantee of equal protection is
not a source of substantive rights or liberties.
The Equal Protection Clause commands that no State
shall "deny to any person within its jurisdiction the
equal protection of the laws." This provision creates
no substantive rights. San Antonio Independent
School Dist. v. Rodriguez, 411 U.S. 1, 33, 93 S.Ct.
1278. 1296-1297, 36 L.Ed.2d 16 (1973); id., at 59, 93
S.Ct., at 1310 (Stewart, J., concurring). Instead, it
embodies a general rule that States must treat like
cases alike but may treat unlike cases
accordingly. Plyler v. Doe. 457 U.S. 202, 216, 102
S.Ct. 2382, 2394, 72 L.Ed.2d 786 (1982) ("'[T]he
Constitution does not require things which are
different in fact or opinion to be treated in law as
though they were the same'") (quoting Tigner v.
Texas, 310 U.S. 141, 147, 60 S.Ct. 879, 882, 84 L.Ed.
1124 (1940)). If a legislative classification or
distinction "neither burdens a fundamental right nor
targets a suspect class, we will uphold [it] so long as it
bears a rational relation to some legitimate
end." Romer v. Evans, 517 U.S. 620, 631, 116 S.Ct.
1620, 1627, 134 L.Ed.2d 855 (1996).
New York's statutes outlawing assisting suicide
affect and address matters of profound
significance to all New Yorkers alike. They neither
infringe fundamental rights nor involve suspect
classifications.Washington v. Glucksberg, at 719-
728, 117 S.Ct., at 2267-2271; see 80 F.3d, at
726; San Antonio School Dist., 411 U.S., at 28, 93
S.Ct., at 1294 ("The system of alleged discrimination
and the class it defines have none of the traditional
indicia of suspectness"); id., at 33-35, 93 S.Ct., at
1296-1298 (courts must look to the Constitution, not
the "importance" of the asserted right, when deciding
whether an asserted right is "fundamental"). These
laws are therefore entitled to a "strong presumption of
validity." Heller v. Doe, 509 U.S. 312, 319, 113 S.Ct.
2637, 2642, 125 L.Ed.2d 257 (1993).162 (Emphasis
and underscoring supplied)
Neither does the main opinion identify what
fundamental right the challenged proviso of the New
Central Bank Act infringes upon. Instead
the ponencia cites the following Constitutional
provisions:
PREAMBLE:
We, the sovereign Filipino people, imploring the aid of
Almighty God, in order to build a just and humane
society and establish a Government that shall
embody our ideals and aspirations, promote the
common good, conserve and develop our patrimony,
and secure to ourselves and our posterity the
blessings of independence and democracy under the
rule of law and a regime of truth, justice, freedom,
love, equality, and peace, do ordain and promulgate
this Constitution.
ARTICLE II: Declaration of Principles and State
Policies
SECTION 9. The State shall promote a just and
dynamic social order that will ensure the prosperity
and independence of the nation and free the people
from poverty through policies that provide adequate
social service, promote full employment, a rising
standard of living, and an improved quality of life for
all.
SECTION 10. The State shall promote social justice
in all phases of national development.
SECTION 11. The State values the dignity of every
human person and guarantees full respect for human
rights.
SECTION 18. The State affirms labor as a primary
social economic force. It shall protect the rights of
workers and promote their welfare.
ARTICLE III: Bill of Rights
SECTION 1. No person shall be deprived of life,
liberty, or property without due process of law, nor
shall any person be denied the equal protection of the
laws.
ARTICLE IX: Constitutional Commissions
B. The Civil Service Commission
SECTION 5. The Congress shall provide for the
standardization of compensation of government
officials, including those in government-owned or
controlled corporations with original charters, taking
into account the nature of the responsibilities
pertaining to, and the qualifications required for their
positions.
ARTICLE XII: National Economy and Patrimony
SECTION 1. The goals of the national economy are a
more equitable distribution of opportunities, income,
and wealth; a sustained increase in the amount of
goods and services produced by the nation for the
benefit of the people; and an expanding productivity
as the key raising the quality of life for all, especially
the underprivileged.
The State shall promote industrialization and full
employment based on sound agricultural
development and agrarian reform, through industries
that make full and efficient use of human and natural
resources, and which are competitive in both
domestic and foreign markets. However, the State
shall protect Filipino enterprises against unfair foreign
competition and trade practices.
In pursuit of these goals, all sectors of the economy
and all regions of the country shall be given optimum
opportunity to develop. Private enterprises, including
corporations, cooperatives, and similar collective
organizations, shall be encouraged to broaden the
base of their ownership.
SECTION 22. Acts which circumvent or negate any of
the provisions of this Article shall be considered
inimical to the national interest and subject to criminal
and civil sanctions, as may be provided by law.
ARTICLE XIII: Social Justice and Human Rights
SECTION 1. The Congress shall give highest priority
to the enactment of measures that protect and
enhance the right of all the people to human dignity,
reduce social, economic, and political inequalities,
and remove cultural inequities by equitably diffusing
wealth and political power for the common good.
To this end, the State shall regulate the acquisition,
ownership, use, and disposition of property and its
increments.
Labor
SECTION 3. The State shall afford full protection to
labor, local and oversea, organized and unorganized,
and promote full employment and equality of
employment opportunities for all.
It shall guarantee the rights of all workers to self-
organizations, and peaceful concerted activities,
including the right to strike in accordance with law.
They shall be entitled to security of tenure, humane
conditions of work, and a living wage. They shall also
participate in policy and decision-making processes
affecting their rights and benefits as may be provided
by law.
The State shall promote the principle of shared
responsibility between workers and employers and
the preferential use of voluntary modes in settling
disputes, including conciliation, and shall enforce their
mutual compliance therewith to foster industrial
peace.
The State shall regulate the relations between
workers and employers, recognizing the right of labor
to its just share in the fruits of production and the right
of enterprises to reasonable returns on investments,
and to expansion and growth.
With the exception of Section 1, Article III and Section
3, Article XIII, the foregoing Constitutional provisions
do not embody any particular right but espouse
principles and policies.163 As previously discussed,
mere reliance on the Equal Protection Clause which is
in the Bill of Rights is not sufficient to justify the
application of Strict Scrutiny. While Section 3 of
Article XIII enumerates the seven basic rights of
workers - the right to organize, the right to conduct
collective bargaining or negotiation with management,
the right to engage in peaceful concerted activities
including the right to strike in accordance with law, the
right to enjoy security of tenure, the right to work
under humane conditions, the right to receive a living
wage, and the right to participate in policy and
decision-processes affecting their rights and benefits
as may be provided by law - I fail to see how Article II,
Section 15 (c) of the New Central Bank Act can
impinge on any of these seven rights.
Another reason why Strict Scrutiny is inappropriate is
the absence of a classification which is based on an
inherently suspect characteristic. There is no suspect
class involved in the case at bar. By no stretch of the
imagination can the rank and file employees of the
BSP be considered a suspect class - a class saddled
with such disabilities, or subjected to such a history of
purposeful unequal treatment, or relegated to such a
position of political powerlessness as to command
extraordinary protection from the majoritarian political
process. As examined earlier, in applying this
definition of suspect class, the U.S. Supreme Court
has labeled very few classifications as suspect. In
particular, the Court has limited the term suspect
class to classifications based on race or national
origin, alienage and religion. It is at once apparent
that Article II, Section 15 (c) of the New Central Bank
Act, in exempting the BSP officers from the coverage
of the Salary Standardization Law and not exempting
the rank and file employees of the BSP, does not
classify based on race, national origin, alienage or
religion.
The main opinion however seeks to justify the
application of Strict Scrutiny on the theory that the
rank and file employees of the BSP constitute a
suspect class "considering that majority (if not all) of
the rank and file employees consist of people whose
status and rank in life are less and limited, especially
in terms of job marketability, it is they - and not the
officers - who have the real economic and financial
need for the adjustment." The ponencia concludes
that since the challenged proviso operates on the
basis of the salary grade or office-employee status a
distinction based on economic class and status is
created.
With all due respect, the main opinion fails to show
that financial need is an inherently suspect trait. The
claim that the rank and file employees of the BSP are
an economically disadvantaged group is unsupported
by the facts on record. Moreover, as priorly
discussed, classifications based on financial need
have been characterized by the U.S. Supreme Court
as not suspect. Instead, the American Court has
resorted to the Rational Basis Test.
The case of San Antonio Independent School District
v. Rodriguez164 is instructive. In the said case, the
financing of public elementary and secondary schools
in Texas is a product of state and local participation.
Almost half of the revenues are derived from a largely
state-funded program designed to provide a basic
minimum educational offering in every school. Each
district supplements state aid through an ad valorem
tax on property within its jurisdiction. A class action
suit was brought on behalf of school children said to
be members of poor families who reside in school
districts having a low property tax base. They argue
that the Texas system's reliance on local property
taxation favors the more affluent and violates the
equal protection clause because of substantial inter-
district disparities in per pupil expenditures resulting
primarily from differences in the value of assessable
property among the districts. The Court held that
wealth discrimination alone does not provide
adequate basis for invoking strict scrutiny.165
The wealth discrimination discovered by the District
Court in this case, and by several other courts that
have recently struck down school-financing laws in
other States, is quite unlike any of the forms of wealth
discrimination heretofore reviewed by this Court.
Rather than focusing on the unique features of the
alleged discrimination, the courts in these cases have
virtually assumed their findings of a suspect
classification through a simplistic process of
analysis: since, under the traditional systems of
financing public schools, some poorer people
receive less expensive educations than other
more affluent people, these systems discriminate
on the basis of wealth. This approach largely
ignores the hard threshold questions, including
whether it makes a difference for purposes of
consideration under the Constitution that the
class of disadvantaged 'poor' cannot be identified
or defined in customary equal protection terms,
and whether the relative--rather than absolute--
nature of the asserted deprivation is of significant
consequence. Before a State's laws and the
justifications for the classifications they create are
subjected to strict judicial scrutiny, we think these
threshold considerations must be analyzed more
closely than they were in the court below.
The case comes to us with no definitive
description of the classifying facts or delineation
of the disfavored class. Examination of the District
Court's opinion and of appellees' complaint, briefs,
and contentions at oral argument suggests, however,
at least three ways in which the discrimination
claimed here might be described. The Texas system
of school financing might be regarded as
discriminating (1) against 'poor' persons whose
incomes fall below some identifiable level of
poverty or who might be characterized as
functionally 'indigent, or (2) against those who are
relatively poorer than others, or (3) against all
those who, irrespective of their personal incomes,
happen to reside in relatively poorer school
districts. Our task must be to ascertain whether, in
fact, the Texas system has been shown to
discriminate on any of these possible bases and, if so,
whether the resulting classification may be regarded
as suspect.
The precedents of this Court provide the proper
starting point. The individuals, or groups of
individuals, who constituted the class
discriminated against in our prior cases shared
two distinguishing characteristics: because of
their impecunity they were completely unable to
pay for some desired benefit, and as a
consequence, they sustained an absolute
deprivation of a meaningful opportunity to enjoy
that benefit. In Griffin v. Illinois, 351 U.S. 12, 76 S.Ct.
585, 100 L.Ed. 891 (1956), and its progeny the Court
invalidated state laws that prevented an indigent
criminal defendant from acquiring a transcript, or an
adequate substitute for a transcript, for use at several
stages of the trial and appeal process. The payment
requirements in each case were found to occasion de
facto discrimination against those who, because of
their indigency, were totally unable to pay for
transcripts. And the Court in each case emphasized
that no constitutional violation would have been
shown if the State had provided some 'adequate
substitute' for a full stenographic transcript.
xxx
Only appellees' first possible basis for describing the
class disadvantaged by the Texas school-financing
system--discrimination against a class of defineably
'poor' persons--might arguably meet the criteria
established in these prior cases. Even a cursory
examination, however, demonstrates that neither of
the two distinguishing characteristics of wealth
classifications can be found here. First, in support of
their charge that the system discriminates against
the 'poor,' appellees have made no effort to
demonstrate that it operates to the peculiar
disadvantage of any class fairly definable as
indigent, or as composed of persons whose
incomes are beneath any designated poverty
level. Indeed, there is reason to believe that the
poorest families are not necessarily clustered in the
poorest property districts. xxx
Second, neither appellees nor the District Court
addressed the fact that, unlike each of the
foregoing cases, lack of personal resources has
not occasioned an absolute deprivation of the
desired benefit.The argument here is not that the
children in districts having relatively low assessable
property values are receiving no public education;
rather, it is that they are receiving a poorer quality
education than that available to children in districts
having more assessable wealth. Apart from the
unsettled and disputed question whether the quality of
education may be determined by the amount of
money expended for it, a sufficient answer to
appellees' argument is that, at least where wealth is
involved, the Equal Protection Clause does not
require absolute equality or precisely equal
advantages. Nor indeed, in view of the infinite
variables affecting the educational process, can any
system assure equal quality of education except in
the most relative sense. Texas asserts that the
Minimum Foundation Program provides an 'adequate'
education for all children in the State. By providing 12
years of free public-school education, and by assuring
teachers, books, transportation, and operating funds,
the Texas Legislature has endeavored to 'guarantee,
for the welfare of the state as a whole, that all people
shall have at least an adequate program of education.
xxx
For these two reasons--the absence of any
evidence that the financing system discriminates
against any definable category of 'poor' people or
that it results in the absolute deprivation of
education--the disadvantaged class is not
susceptible of identification in traditional terms.
xxx
This brings us, then, to the third way in which the
classification scheme might be defined--district wealth
discrimination. Since the only correlation indicated by
the evidence is between district property wealth and
expenditures, it may be argued that discrimination
might be found without regard to the individual income
characteristics of district residents. Assuming a
perfect correlation between district property wealth
and expenditures from top to bottom, the
disadvantaged class might be viewed as
encompassing every child in every district except the
district that has the most assessable wealth and
spends the most on education. Alternatively, as
suggested in Mr. Justice MARSHALL'S dissenting
opinion the class might be defined more restrictively
to include children in districts with assessable
property which falls below the statewide average, or
median, or below some other artificially defined level.
However described, it is clear that appellees' suit
asks this Court to extend its most exacting
scrutiny to review a system that allegedly
discriminates against a large, diverse, and
amorphous class, unified only by the common
factor of residence in districts that happen to
have less taxable wealth than other districts. The
system of alleged discrimination and the class it
defines have none of the traditional indicia of
suspectness: the class is not saddled with such
disabilities, or subjected to such a history of
purposeful unequal treatment, or relegated to
such a position of political powerlessness as to
command extraordinary protection from the
majoritarian political process.
We thus conclude that the Texas system does not
operate to the peculiar disadvantage of any suspect
class. But in recognition of the fact that this Court
has never heretofore held that wealth
discrimination alone provides an adequate basis
for invoking strict scrutiny, appellees have not
relied solely on this contention. x x x166 (Emphasis and
underscoring supplied; citations and footnotes
omitted)
To further bolster the theory that a classification
based on financial need is inherently suspect, the
main opinion cites a number of international
conventions as well as foreign and international
jurisprudence, but to no avail.
The reliance by the main opinion on these
international conventions is misplaced.
The ponencia cites the American Convention on
Human Rights, the African Charter of Human and
Peoples' Rights, the European Convention on Human
Rights, the European Social Charter of 1996 and the
Arab Charter on Human Rights of 1994. It should be
noted that the Philippines is not a signatory to any of
these conventions.
The main opinion also cites the Universal Declaration
of Human Rights, the International Covenant on Civil
and Political Rights, the International Covenant on
Economic, Social and Cultural Rights, the
International Convention on the Elimination of all
Forms of Racial Discrimination, the Convention on the
Elimination of all Forms of Discrimination against
Women and the Convention on the Rights of the
Child. While it is true that these instruments which the
Philippines is a party to include provisions prohibiting
discrimination, none of them explicitly prohibits
discrimination on the basis of financial need.
While certain conventions mention that distinctions
based on "other status" is prohibited, the scope of this
term is undefined. Even Gay Moon, on whom the
main opinion relies, explains thus:
The [UN Human Rights] Committee provides little
guidance on how it decides whether a difference in
treatment comes within the rubric of "other status". Its
approach to this issue lacks consistency and
transparency.167
Furthermore, the U.K. cases cited in the main opinion
are not in point since these cases do not support the
thesis that classification based on financial need is
inherently suspect. In Hooper v. Secretary of State for
Work and Pension168 the discrimination in question
was based on gender, that is, whether the widowers
are entitled to the pension granted by the State to
widows. In Abdulaziz, Cabales and Balkandali v.
United Kingdom169 the discrimination was based on
sex and race; In Wilson and Others v. United
Kingdom170 the questioned law allows employers to
discriminate against their employees who were trade
union members.
Notably, the main opinion, after discussing lengthily
the developments in equal protection analysis in the
United States and Europe, and finding no support
thereto, incongruously concluded that "in resolving
constitutional disputes, this Court should not be
beguiled by foreign jurisprudence some of which are
hardly applicable because they have been dictated by
different constitutional settings and needs."171 After an
excessive dependence by the main opinion to
American jurisprudence it contradicted itself when it
stated that "American jurisprudence and authorities,
much less the American Constitution, are of dubious
application for these are no longer controlling within
our jurisdiction and have only limited persuasive
merit."172
Intrinsic Constitutionality of Section 15(c)
of the New Central Bank Act
Is the classification between the officers and rank and
file employees in Section 15 (c) of the New Central
Bank Act in violation of the equal protection clause?
Petitioner, contending that there are no substantial
distinctions between these two groups of BSP
employees, argues that it is.
On the other hand, the main opinion, applying the
Rational Basis Test, finds the classification between
the executive level and the rank and file of the BSP to
be based on substantial and real differences which
are germane to the purpose of the law. Thus, it
concludes:
In the case at bar, it is clear in the legislative
deliberations that the exemption of officers (SG 20
and above) from the SSL was intended to address the
BSP's lack of competitiveness in terms of attracting
competent officers and executives. It was not
intended to discriminate against the rank-and-file. If
the end-result did in fact lead to a disparity of
treatment between the officers and the rank-and-file in
terms of salaries and benefits, the discrimination or
distinction has a rational basis and is not palpably,
purely, and entirely arbitrary in the legislative sense.
and declines to grant the petition on this ground.
For her part, Justice Chico-Nazario, in her separate
concurring opinion, sides with petitioner believing that
the difference in treatment is "purely arbitrary" and
thus violates the Constitutional guaranty of equal
protection of the laws.
On this point, I am in accord with the main opinion.
For ease of reference, Section 15 (c) is reproduced
hereunder:
SEC. 15. Exercise of Authority. — In the exercise of
its authority, the Monetary Board shall:
xxx
(c) establish a human resource management system
which shall govern the selection, hiring, appointment,
transfer, promotion, or dismissal of all personnel.
Such system shall aim to establish professionalism
and excellence at all levels of the Bangko Sentral in
accordance with sound principles of management.
A compensation structure, based on job
evaluation studies and wage surveys and subject
to the Board's approval, shall be instituted as an
integral component of the Bangko
Sentral's human resource development
program: Provided, That the Monetary Board shall
make its own system conform as closely as possible
with the principles provided for under Republic Act
No. 6758. Provided, however, That compensation
and wage structure of employees whose positions
fall under salary grade 19 and below shall be in
accordance with the rates prescribed under
Republic Act No. 6758. (Emphasis supplied)
It is readily apparent that Section 15 (c), by implicitly
exempting the executive corps of the BSP (those with
SG 20 and above) from the Compensation
Classification System under the Salary
Standardization Law, makes a classification between
the officers and the rank and file of the BSP and, who,
like all other government employees, are squarely
within the ambit of the Compensation Classification
System by the Salary Standardization Law.
To be valid, therefore, the difference in treatment as
to compensation between the executive level and the
rank and file of the BSP must be based on real
differences between the two groups. Moreover, this
classification must also have a rational relationship to
the purpose of the New Central Bank Act.
An examination of the legislative history of the New
Central Bank Act may thus prove useful.
Legislative History of the New Central Bank Act
An examination of the legislative deliberations of both
the House of Representatives and the Senate shows
that it was never the intention of both houses to
provide all BSP personnel with a blanket exemption
from the coverage of the Salary Standardization Law.
Thus, while House Bill No. 7037 (the House of
Representatives version of the New Central Bank Act)
did not expressly mention that the Salary
Standardization Law was to apply to a particular
category of BSP employees, the deliberations in the
lower house show that the position and compensation
plans which the BSP was authorized to adopt were to
be in accordance with the provisions of applicable
laws, including the Salary Standardization Law:
MR. JAVIER (E.). No, Mr. Speaker, we have that
phrase in Section 14 (c). The power to organize, the
power to classify positions, the power to adopt
compensation plans are subject to the provisions of
applicable laws. The bill is clear, so I do not think we
should have a quarrel on whether the Monetary Board
has absolute power over the organization and
compensation plans of the Bangko Sentral ng
Pilipinas. Of course, this power is subject to
applicable laws, and one of these laws is the
Salary Standardization Law, Mr. Speaker.
MR. ARROYO. To cut the argument short, Mr.
Speaker, in effect, he is now saying that the proposed
bill will authorize the Bangko Sentral to fix its own
salary scale for its employees?
MR. JAVIER (E.). That is correct, Mr. Speaker, but in
accordance with the provisions of applicable laws.
MR. ARROYO. I am only asking if it will be able to fix
its own salary scale.
MR. JAVIER (E.). Yes, in accordance with the
provisions of applicable laws.
MR. ARROYO. May I know Mr. Speaker, what is
the applicable law that will curtail this?
MR. JAVIER (E.). The Salary Standardization Law.
MR. ARROYO. So, the Gentleman is now
suggesting that the Standardization Law will
apply to this?
MR. JAVIER (E.). Yes, Mr. Speaker.173 (Emphasis
supplied)
In fact, the deliberations show that, in keeping with
the recognition in Section 9174 of the Salary
Standardization Law that compensation higher than
SG 30 might be necessary in certain exceptional
cases to attract and retain competent top-level
personnel, the initial intention of the drafters of the
House Bill was to exempt only the Governor and the
Monetary Board from the coverage of the
Compensation Classification System:
MR. LACSON. Mr. Speaker, Section 12 mentions
only the remuneration of the governor and the
members of the monetary board.
MR. CHAVES. So, it will not cover any other
employees of the Central Bank because the
limitation set forth under the Salary
Standardization Law will apply to them. I just want
to make that sure because if it is not clear in the
law, then we can refer to the debates on the floor.
MR. LACSON. Mr. Speaker, Section 12 mentions
only the governor and the members of the
monetary board. All the rest in the lower echelons
are covered by law.
MR. CHAVES. In other words, I just want to make it
clear whether or not they are covered by the Salary
Standardization Law because later on if there is any
conflict on the remuneration of employees lower than
the governor and members of the Monetary Board,
we have limits set under the Salary Standardization
Law.
MR. LACSON. Under the Salary Standardization
Law.175 (Emphasis and underscoring supplied)
The application of the Salary Standardization Law to
all other personnel of the BSP raised some concerns,
however, on the part of some legislators. They felt the
need to reconcile the demand for competent people to
help in the management of the economy with the
provisions of the Salary Standardization Law.176 The
Senate thus sought to address these concerns by
allowing the BSP to determine a separate salary scale
for the executive level.
The purpose behind the exemption of officers with SG
20 and above from the Salary Standardization Law
was to increase the BSP's competitiveness in the
industry's labor market such that by offering attractive
salary packages, top executives and officials would
be enticed and competent officers would be deterred
from leaving.
Senator Maceda. x x x
We have a salary grade range, if I am not mistaken,
Mr. President, up to Grade 32. Those executive
types are probably between Grade 23 to Grade 32.
If we really want to make sure that the vice-
president types of the banks will come in, it
should be cut off at around Grade 23 level and
that the Standardization Act should still refer to
those around Grade 22 and below. But if we cut it
off at Grade 9 and below, we are just hitting only the
drivers, the janitors, the filing clerks, the messengers.
The Gentleman will only be cutting off a part of my
heart again if he does that. My heart bleeds for this
people, Mr. President.
Senator Osmeña. If that is an amendment, Mr.
President, I move that we reconsider the prior
approval of my amendment which was accepted by
the Sponsor, and I will accept the amendment of
Senator Maceda that the grade level should not be
Grade 9 but Grade 22 instead.
Senator Maceda. After consulting the principal
Author of the Standardization Law, the
distinguished Majority Leader, he confirms that
the executive group is really Grade 23 and above.
I think that is where the Gentleman really wants to
have some leeway to get some people in at the
executive level. So I propose the amendment to
the amendment to Grade 22 and
below.177 (Underscoring supplied; emphasis in the
original)
Ultimately, the Bicameral Conference Committee on
Banks, in consultation with the BSP, determined that
the BSP's executive level began at SG 20 and
resolved to exempt those at that level and above from
the Compensation Classification System under the
Salary Standardization Law, leaving the rank-and-file
employees, or those personnel with a SG of 19 and
below, under the coverage of the said compensation
system. This is clear from the deliberations as
reproduced by the petitioner itself:
CHAIRMAN ROCO. x x x x x x x x x
Number 4, on compensation of personnel. We have
checked. The exemption from the Salary
Standardization Law shall apply only from Salary
Grade 21 and above. The division chief is salary
grade 22.
CHAIRMAN ZAMORA. I understood, Mr. Chairman,
from the Central Bank itself that their range for
rank-and-file starts from range 19 and
downward. So what we should propose is that we
subject all personnel to salary standardization
starting from range 19 going down, and exempt
them from range 20 and going up.
CHAIRMAN ROCO. That will cover also assistant
division chiefs?
CHAIRMAN ZAMORA. That includes assistant
division chiefs, division chiefs, and obviously higher
personnel.
CHAIRMAN ROCO. Yes, because in terms of x x x
We are being more generous than original. So
assistant division chiefs shall be exempted already
from the salary standardization.178 (Emphasis and
underscoring supplied)
The Classification is Based on Real Differences
between  degree or higher courses.
the Officers and the Rank and File of the BSP, and
is  Consequently, if BSP needs an exemption from R.A.
Germane to the Purpose of the Law
As pointed out by the Office of the Solicitor
General,179 the foregoing classification of BSP
personnel into managerial and rank-and-file is based
on real differences as to the scope of work and
degree of responsibility between these two classes of
employees. At the same time, the exemption of the
BSP managerial personnel from the Salary
Standardization Law bears a rational relationship to
the purpose of the New Central Bank Act.180 In the
words of the Solicitor General:
x x x Article II, Section 15 (c) of RA 7653
was purposely adopted to attract highly
competent personnel, to ensure professionalism
and excellence at the BSP as well as to ensure its
independence through fiscal and administrative
autonomy in the conduct of monetary policy. This
purpose is undoubtedly being assured by
exempting the executive/management level from
the Salary Standardization Law so that the best
and the brightest may be induced to join the
BSP. After all, the managers/executives are the ones
responsible for running the BSP and for implementing
its monetary policies.181 (Emphasis and underscoring
supplied)
In the light of the foregoing, Justice Chico-Nazario's
conclusion that the distinction is "purely arbitrary"
does not appear to hold water.
In support of her view, Justice Chico-Nazario cites
Section 5 (a) of the Salary Standardization Law,
which provides that positions in the Professional
Supervisory Category are assigned SG 9 to SG 33.
Thus, she argues:
x x x SG 20 and up do not differ from SG 19 and
down in terms of technical and professional expertise
needed as the entire range of positions all 'require
intense and thorough knowledge of a specialized field
usually acquired from completion of a bachelor's
No. 6758 for key positions in order that it may hire the
best and brightest economists, accountants, lawyers
and other technical and professional people, the
exemption must not begin only in SG 20.
However, it is clear that while it is possible to
group classes of positions according to the four main
categories as provided under Section 5 of the Salary
Standardization Law, viz:
SECTION 5. Position Classification System. —
The Position Classification System shall consist
of classes of positions grouped into four main
categories, namely: professional supervisory,
professional non-supervisory, sub-professional
supervisory, and sub-professional non-
supervisory, and the rules and regulations for its
implementation.
Categorization of these classes of positions shall be
guided by the following considerations:
(a) Professional Supervisory Category. — This
category includes responsible positions of a
managerial character involving the exercise of
management functions such as planning, organizing,
directing, coordinating, controlling and overseeing
within delegated authority the activities of an
organization, a unit thereof or of a group, requiring
some degree of professional, technical or scientific
knowledge and experience, application of managerial
or supervisory skills required to carry out their basic
duties and responsibilities involving functional
guidance and control, leadership, as well as line
supervision. These positions require intensive and
thorough knowledge of a specialized field usually
acquired from completion of a bachelor's degree or
higher degree courses.
The positions in this category are assigned Salary
Grade 9 to Salary Grade 33.
(b) Professional Non-Supervisory Category. —
This category includes positions performing task
which usually require the exercise of a particular
profession or application of knowledge acquired
through formal training in a particular field or just the
exercise of a natural, creative and artistic ability or
talent in literature, drama, music and other branches
of arts and letters. Also included are positions
involved in research and application of professional
knowledge and methods to a variety of technological,
economic, social, industrial and governmental
functions; the performance of technical tasks auxiliary
to scientific research and development; and in the
performance of religious, educational, legal, artistic or
literary functions.
These positions require thorough knowledge in the
field of arts and sciences or learning acquired through
completion of at least four (4) years of college studies.
The positions in this category are assigned Salary
Grade 8 to Salary Grade 30.
(c) Sub-Professional Supervisory Category. —
This category includes positions performing
supervisory functions over a group of employees
engaged in responsible work along technical, manual
or clerical lines of work which are short of professional
work, requiring training and moderate experience or
lower training but considerable experience and
knowledge of a limited subject matter or skills in arts,
crafts or trades. These positions require knowledge
acquired from secondary or vocational education or
completion of up to two (2) years of college education.
The positions in this category are assigned Salary
President of the Senate
Grade 4 to Salary Grade 18.
(d) Sub-Professional Non-Supervisory Speaker of the House of Representatives
Category. — This category includes positions
involves in structured work in support of office or fiscal
operations or those engaged in crafts, trades or Chief Justice of the Supreme Court
manual work. These positions usually require skills
acquired through training and experience of Senator
completion of elementary education, secondary or
vocational education or completion of up to two (2)
years of college education. Member of the House of Representatives
The positions in this category are assigned Salary
Grade 1 to Salary Grade 10. (Emphasis supplied) Associate Justices of the Supreme Court
the same does not preclude classifying classes of
Chairman of a Constitutional Commission
positions, although different with respect to kind or
under Article IX, 1987 Constitution
subject matter of work, according to level of difficulty
and responsibility and level of
qualification requirements - that is, according to Member of a Constitutional Commission
grade.182 under Article IX, 1987 Constitution
It should be borne in mind that the concept of "grade"
from the Old Salary Standardization Law is The Department of Budget and Management is
hereby authorized to determine the officials who are
maintained in the present one. Thus Sections 8 and 9
of the present Salary Standardization Law provide for of equivalent rank to the foregoing Officials, where
the general assignment of the various salary grades applicable, and may be assigned the same Salary
to certain positions in the civil service according to the Grades based on the following guidelines:
degree of responsibility and level of qualifications
GRADE 33 — This Grade is assigned to the
required:
President of the Republic of the Philippines as the
SECTION 8. Salaries of Constitutional Officials highest position in the government. No other position
and their Equivalent. — Pursuant to Section 17, in the government service is considered to be of
Article XVIII of the Constitution, the salary of the equivalent rank.
following officials shall be in accordance with the
GRADE 32 — This Grade is limited to the Vice-
Salary Grades indicated hereunder:
President of the Republic of the Philippines and those
positions which head the Legislative and Judicial
Branches of the government, namely: the Senate
President, Speaker of the House of Representatives
and Chief Justice of the Supreme Court. No other
President of the Philippines
positions in the government service are considered to
be of equivalent rank.
Vice-President of the Philippines
GRADE 31 — This Grade is assigned to Senators
and Members of the House of Representatives and
those with equivalent rank as follows: the Executive
Secretary, Department Secretary, Presidential
Spokesman, Ombudsman, Press Secretary,
Presidential Assistant with Cabinet Rank, Presidential
Adviser, National Economic and Development
Authority Director General, Court of Appeals
Presiding Justice, Sandiganbayan Presiding Justice,
Secretary of the Senate, Secretary of the House of
Representatives, and President of the University of
the Philippines.
An entity with a broad functional scope of operations
and wide area of coverage ranging from top level
policy formulation to the provision of technical and
administrative support to the units under it, with
functions comparable to the aforesaid positions in the
preceding paragraph, can be considered
organizationally equivalent to a Department, and its
head to that of a Department Secretary.
GRADE 30 — Positions included are those of
Department Undersecretary, Cabinet Undersecretary,
Presidential Assistant, Solicitor General, Government
Corporate Counsel, Court Administrator of the
Supreme Court, Chief of Staff of the Office of the
Vice-President, National Economic and Development
Authority Deputy Director General, Presidential
Management Staff Executive Director, Deputy
Ombudsman, Associate Justices of the Court of
Appeals, Associate Justices of the Sandiganbayan,
Special Prosecutor, University of the Philippines
Executive Vice-President, Mindanao State University
President, Polytechnic University of the Philippines
President of and President of other state universities
and colleges of the same class.
Heads of councils, commissions, boards and similar
entities whose operations cut across offices or
departments or are serving a sizeable portion of the
general public and whose coverage is nationwide or
whose functions are comparable to the aforecited
positions in the preceding paragraph, may be placed
at this level.
The equivalent rank of positions not mentioned herein funds, properties and equipment; and (10) hardship,
or those that may be created hereafter shall be hazard and personal risk involved in the job.
determined based on these guidelines.
Benchmark Position Schedule
The Provisions of this Act as far as they upgrade the
compensation of Constitutional Officials and their
equivalent under this section shall, however, take Position Title
effect only in accordance with the Constitution:
Provided, That with respect to the President and Vice-
Laborer I
President of the Republic of the Philippines, the
President of the Senate, the Speaker of the House of
Representatives, the Senators, and the Members of Messenger
the House of Representatives, no increase in salary
shall take effect even beyond 1992, until this Act is
amended: Provided, further, That the implementation Clerk I
of this Act with respect to Assistant Secretaries and
Undersecretaries shall be deferred for one (1) year
Driver I
from the effectivity of this Act and for Secretaries, until
July 1, 1992: Provided, finally, That in the case of
Assistant Secretaries, Undersecretaries and Stenographer I
Secretaries, the salary rates authorized herein shall
be used in the computation of the retirement benefits
Mechanic I
for those who retire under the existing retirement laws
within the aforesaid period.
Carpenter II
SECTION 9. Salary Grade Assignments for Other
Positions. — For positions below the Officials
mentioned under Section 8 hereof and their Electrician II
equivalent, whether in the National Government, local
government units, government-owned or controlled
Secretary I
corporations or financial institutions, the Department
of Budget and Management is hereby directed to
prepare the Index of Occupational Services to be Bookkeeper
guided by the Benchmark Position Schedule
prescribed hereunder and the following factors: (1)
the education and experience required to perform the Administrative Assistant
duties and responsibilities of the positions; (2) the
nature and complexity of the work to be performed; Education Research Assistant I
(3) the kind of supervision received; (4) mental and/or
physical strain required in the completion of the work;
(5) nature and extent of internal and external Cashier I
relationships; (6) kind of supervision exercised; (7)
decision-making responsibility; (8) responsibility for
Nurse I
accuracy of records and reports; (9) accountability for
 exceptional cases, approve higher compensation for
Teacher I
the aforesaid officials. (Emphasis supplied)
Agrarian Reform Program Technologist Thus, while the positions of Agriculturist I with SG 11
and the President of the Philippines with SG 33 may
both belong to the Professional Supervisory Category
Budget Officer I because of the nature of their duties and
responsibilities as well as the knowledge and
experience required to discharge them, nevertheless,
Chemist I
there can be no doubt that the level of difficulty and
responsibility of the latter is significantly greater than
Agriculturist I that of the former.
It may be that the legislature might have chosen the
Social Welfare Officer I four categories of the position classification system as
the basis for the classification in Section 15 (c), as
Engineer I suggested by Justice Chico-Nazario, or even that no
distinction might have been made at all. But these are
matters pertaining to the wisdom of the legislative
Veterinarian I classification and not to its constitutional validity as
measured against the requirements of the equal
protection clause. As this Court stated in Ichong v.
Legal Officer I
Hernandez:183
Administrative Officer II x x x Some may disagree with the wisdom of the
legislature's classification. To this we answer, that
this is the prerogative of the law-making power.
Dentist II Since the Court finds that the classification is
actual, real and reasonable, and all persons of
one class are treated alike, and as it cannot be
Postmaster IV
said that the classification is patently
unreasonable and unfounded, it is on duty bound to
Forester III declare that the legislature acted within its legitimate
prerogative and it cannot declare that the act
transcends the limit of equal protection established by
Associate Professor I
the Constitution.184 (Emphasis and underscoring
supplied)
Rural Health Physician
At this juncture, it is curious to note that while the
main opinion initially states that the classification
In no case shall the salary of the chairman, president,
contained in Section 15 (c) of the New Central Bank
general manager or administrator, and the board of
Act "has a rational basis and is not palpably, purely,
directors of government-owned or controlled
and entirely arbitrary in the legislative sense," and is
corporations and financial institutions exceed Salary
thus valid on its face; the same opinion subsequently
Grade 30: Provided, That the President may, in truly
opines that:
In the case at bar, the challenged proviso operates
on the basis of salary grade or officer-employee
status. It is a distinction based on economic class
and status, with the higher grades as recipients of a
benefit specifically withheld from the lower grades.
(Emphasis and underscoring supplied)
Significantly, petitioner never advanced this argument
anywhere in its pleadings. Moreover, there is
absolutely nothing in the pleadings or records of this
petition to suggest that: (1) petitioner's members
belong to a separate economic class than those with
SG 20 and above; and (2) that the distinction between
the officers and the rank and file in Section 15(c) is
based on such economic status.
What is more, the foregoing statement flies in the face
of a basis of classification well-established in our law
and jurisprudence.
Indeed, the distinction between "officers" and
"employees" in the government service was clearly
established as early as 1917 with the enactment of
the Old Revised Administrative Code and later
incorporated into the language of the Constitution:
In terms of personnel, the system includes both
"officers and employees." The distinction between
these two types of government personnel is
expressed by Section 2 of the Old Revised
Administrative Code (1917) thus:
Employee, when generally used in reference to
persons in the public service, includes any person in
the service of the Government or any branch thereof
of whatever grade or class. Officer, as distinguished
from clerk or employee, refers to those officials
whose duties, not being of a clerical or manual
nature, may be considered to involve the exercise
of discretion in the performance of the functions
of government, whether such duties are precisely
defined by law or not.
Officer, when used with reference to a person having
authority to do a particular act or perform a particular
function in the exercise of governmental power, shall
include any Government employee, agent, or body
having authority to do the act or exercise of the
function in question.
It is in these senses that the terms "officers and
employees" are used in the Constitution and it is
this sense which should also be applied, mutatis
mutandis, to officers and employees of
government-owned and or controlled
corporations with original charter.185 (Emphasis
supplied; italics in the original)
Clearly, classification on the basis of salary grade or
between officers and rank and file employees within
the civil service are intended to be rationally and
objectively based on merit, fitness and degree of
responsibility, and not on economic status. As this
Court summarized in Rodrigo v. Sandiganbayan:186
Section 5, Article IX-C of the Constitution provides
that:
The Congress shall provide for the standardization of
compensation of government officials and employees,
including those in government-owned or controlled
corporations with original charters, taking into account
the nature of the responsibilities pertaining to, and the
qualifications required for their positions.
This provision is not unique to the 1987 Constitution.
The 1973 Constitution, in Section 6, Article XII
thereof, contains a very similar provision pursuant to
which then President Marcos, in the exercise of his
legislative powers, issued Presidential Decree No.
985.
However, with the advent of the new Constitution, and
in compliance therewith, Congress enacted R.A. No.
6758. Section 2 thereof declares it the policy of the
State "to provide equal pay for substantially equal
work and to base differences in pay upon substantive
differences in duties and responsibilities, and
qualification requirements of the positions."
To give life to this policy, as well as the constitutional
prescription to "(take) into account the nature of the
responsibilities pertaining to, and the qualifications
required" for the positions of government officials and
employees, Congress adopted the scheme employed
in P.D. No. 985 for classifying positions with
comparable responsibilities and qualifications for the
purpose of according such positions similar salaries.
This scheme is known as the "Grade," defined in P.D.
No. 985 as:
Includ[ing] all classes of positions which, although
different with respect to kind or subject matter of work,
are sufficiently equivalent as to level of difficulty and
responsibilities and level of qualification requirements
of the work to warrant the inclusion of such classes of
positions within one range of basic compensation.
The Grade is therefore a means of grouping positions
"sufficiently equivalent as to level of difficulty and
responsibilities and level of qualification requirements
of the work" so that they may be lumped together in
"one range of basic compensation."
Thus, Congress, under Section 8 of R.A. No. 6758,
fixed the Salary Grades of officials holding
constitutional positions, as follows xxx
xxx
x x x Congress delegated the rest of this tedious task
(of fixing Salary Grades) to the DBM, subject to the
standards contained in R.A. No. 6758, by authorizing
the DBM to "determine the officials who are of
equivalent rank to the foregoing officials, where
applicable," and to assign them the same Salary
Grades subject to a set of guidelines found in said
section.
For positions below those mentioned under Section 8,
Section 9 directs the DBM to prepare the "Index of
Occupational Services" guided by (a) the Benchmark
Position prescribed in Section 9, and (b) the following
factors:
(1) the education and experience required to perform
the duties and responsibilities of the position;
(2) nature and complexity of the work to be
performed;
(3) the kind of supervision received;
(4) mental and/or physical strain required in the
completion of the work;
(5) nature and extent of internal and external
relationships;
(6) kind of supervision exercised;
(7) decision-making responsibility;
(8) responsibility for accuracy of records and reports;
(9) accountability for funds, properties and equipment;
and
(10) hardship, hazard and personal risk involved in
the job.
Pursuant to such authority, the DBM drafted the 1989
Index of Occupational Services, Position Titles and
Salary Grades, later revised in 1997. x x
x187 (Emphasis supplied)
In view of the foregoing, the statement in the latter
portion of the main opinion to the effect that the
classification between the officers and the rank and
file of the BSP is founded on economic status, and
not on the level of difficulty and responsibility as well
as the qualification requirements of the work to be
performed, must be considered extremely suspect - a
conclusion without legal or factual tether bordering on
sophistry.
En passant, it may be observed that the distinction
between the managerial personnel and the rank and
file of the BSP in the New Central Bank Act is similar
to the distinction between Justices, Judges and those
of equivalent judicial rank on the one hand and other
court personnel on the other hand in R.A. No.
9227.188 In furtherance of the declared policy "to
guarantee the independence of the Judiciary x x x
ensure impartial administration of justice, as well as
an effective and efficient system worthy of public trust
and confidence,"189 Section 2 of R.A. No. 9227
provides:
Sec. 2. Grant of Special Allowances. - All justices,
judges and all other positions* in the Judiciary with
the equivalent rank of justices of the Court of Appeals
and judges of the Regional Trial Court as authorized
under existing laws shall be granted special
allowances equivalent to one hundred percent (100%)
of the basic monthly salary specified for their
respective salary grades under Republic Act No.
6758, as amended, otherwise known as the Salary
Standardization Law, to be implemented for a period
of four (4) years.
The grant of special allowances shall be implemented
uniformly in such sums or amounts equivalent to
twenty-five percent (25%) of the basic salaries of the
positions covered hereof. Subsequent implementation
shall be in such sums and amounts and up to the
extent only that can be supported by the funding
source specified in Section 3 hereof.
Under the foregoing, personnel with judicial
rank190 are entitled to the grant of certain special
allowances while the other personnel of the judiciary
are not. The reason for the difference in treatment
may be gleaned from the legislative
deliberations191 wherein the legislature, while
acknowledging the need to augment the salaries and
emoluments of members of the judiciary in order to
attract and retain competent personnel and insulate
them from possible outside influence, nevertheless
had to take into consideration the limited resources of
the government as well as the primary aim of the law,
and consequently prioritized those holding judicial
offices or with judicial rank over other court personnel.
The Subsequent Amendment of the Charters of
the
other GOCCs and GFIs Did Not Alter the
Constitutionality of Section 15 (c)
By operation of the equal protection clause, are the
rank and file employees of the BSP entitled to
exemption from the Compensation Classification
System provided for under the Salary Standardization
Law as a consequence of the exemption of the rank
and file employees of certain other GOCCs and
GFIs?
Petitioner argues in the affirmative maintaining that:
This Honorable Court may take judicial notice of the
fact that the rank-and-file employees of the other
government financial institutions, such as the
Government Service Insurance System (GSIS), Land
Bank of the Philippines (LBP), Development Bank of
the Philippines (DBP), and the Social Security System
(SSS), together with the officers of such
institutions, are exempted from the coverage of the
SSL under their respective charters x x x Thus,
within the class of rank-and-file employees of the
government financial institutions, the rank-and-
file employees of the BSP are also discriminated
upon.192(Emphasis supplied)
The charters of the GOCCs/GFIs adverted to by
petitioner, together with their relevant provisions are
as follows:
(1) R.A. No. 7907, which took effect on February 23,
1995 and amended Section 90 of R.A. 3844, the
Agrarian Land Reform Code, giving the Board of
Directors of the LBP authority to approve the bank's
own compensation, position classification system and
qualification standards:
SECTION 10. Section 90 of the same Act is hereby
amended to read as follows:
"Sec. 90. Personnel. — The Board of Directors shall
provide for an organization and staff of officers and
employees of the Bank and upon recommendation of
the President of the Bank, appoint and fix their
remunerations and other emoluments, and remove
such officers and employees: Provided, That the
Board shall have exclusive and final authority to
promote, transfer, assign or reassign personnel of the
Bank, any provisions of existing law to the contrary
notwithstanding.
All positions in the Bank shall be governed by a
compensation, position classification system and
qualification standards approved by the Bank's Board
of Directors based on a comprehensive job analysis
and audit of actual duties and responsibilities. The
compensation plan shall be comparable with the
prevailing compensation plans in the private sector
and shall be subject to periodic review by the Board
no more than once every two (2) years without
prejudice to yearly merit reviews or increases based
on productivity and profitability. The Bank shall
therefore be exempt from existing laws, rules and
regulations on compensation, position
classification and qualification standards. It shall
however endeavor to make its system conform as
closely as possible with the principles under
Republic Act No. 6758.
The Bank officers and employees, including all
members of the Board, shall not engage directly or
indirectly in partisan activities or take part in any
election except to vote.
No officer or employee of the Bank subject to the Civil
Service Law and Regulations shall be removed or
suspended except for cause as provided by law."
(Emphasis supplied)
(2) R.A. No. 8282, the Social Security System Act of
1997, approved on May 1, 1997, Section 3 (c) of
which exempts all SSS employees from the
provisions of the Salary Standardization Law:
Section 3. x x x
(c) The Commission, upon the recommendation of the
SSS President, shall appoint an actuary and such
other personnel as may be deemed necessary; fix
their reasonable compensation, allowances and other
benefits, prescribe their duties and establish such
methods and procedures as may be necessary to
insure the efficient, honest and economical
administration of the provisions and purposes of this
Act: Provided, however, That the personnel of the
SSS below the rank of Vice-President shall be
appointed by the SSS President: Provided, further,
That the personnel appointed by the SSS President,
except those below the rank of assistant manager,
shall be subject to the confirmation by the
Commission: Provided, further, That the personnel of
the SSS shall be selected only from civil service
eligibles and be subject to civil service rules and
regulations: Provided, finally, That the SSS shall be
exempt from the provisions of Republic Act No.
6758 and Republic Act No. 7430. (Underscoring
supplied)
(3) R.A. No. 8291, the Government Service Insurance
System Act of 1997, approved on May 31, 1997,
which empowers its Board of Trustees of the GSIS to
approve a compensation and position classification
system and qualifications standards for its employees:
SECTION 43. Powers and Functions of the Board of
Trustees. — The Board of Trustees shall have the
following powers and functions:
xxx
(d) upon the recommendation of the President and
General Manager, to approve the GSIS'
organizational and administrative structures and
staffing pattern, and to establish, fix, review, revise
and adjust the appropriate compensation package for
the officers and the employees of the GSIS with
reasonable allowances, incentives, bonuses,
privileges and other benefits as may be necessary or
proper for the effective management, operation and
administration of the GSIS, which shall be exempt
from Republic Act No. 6758, otherwise known as
the Salary Standardization Law and Republic Act
No. 7430, otherwise known as the Attrition Law;
x x x (Emphasis supplied)
(4) R.A. No. 8523, which amended the Charter of the
DBP on May 31, 1997 and exempted the bank from
the coverage of the existing Salary Standardization
Law:
SECTION 6. Section 13 of the same Charter is
hereby amended to read as follows:
"SEC. 13. Other Officers and Employees. — The
Board of Directors shall provide for an organization
and staff of officers and employees of the Bank and
upon recommendation of the President of the Bank,
fix their remunerations and other emoluments. All
positions in the Bank shall be governed by the
compensation, position classification system and
qualification standards approved by the Board of
Directors based on a comprehensive job analysis of
actual duties and responsibilities. The compensation
plan shall be comparable with the prevailing
compensation plans in the private sector and shall be
subject to periodic review by the Board of Directors
once every two (2) years, without prejudice to yearly
merit or increases based on the Bank's productivity
and profitability. The Bank shall, therefore, be
exempt from existing laws, rules, and regulations
on compensation, position classification and
qualification standard. The Bank shall however,
endeavor to make its system conform as possible
with the principles under Compensation and
Position Classification Act of 1989 (Republic Act
No. 6758, as amended).
No officer or employee of the Bank subject to Civil
Service Law shall be dismissed except for cause as
provided by law." (Underscoring supplied)
Following this second line of argument, it appears that
petitioner bases its claim to exemption from the
Compensation Classification System of the Salary
Standardization Law not only on (1) a direct challenge
to the constitutionality of the proviso in Section 15(c)
of The New Central Bank Act, which expressly places
the rank and file employees of the BSP under the
coverage of the former; but also on (2) an indirect
assertion that the rank and file employees of the BSP
are entitled to benefit from the subsequent
exemptions of the rank and file personnel of certain
GOCCs/GFIs from the coverage of the Salary
Standardization Law.
This second argument, that the rank and file
employees of the BSP may benefit from subsequent
classifications in other statutes pertaining to other GFI
employees, on the theory that the former and the
latter are identically or analogously situated
(i.e. members of the same class), is not entirely new
and is apparently founded on the fourth requisite of
the Rational Basis Test - that is, that a reasonable
classification must apply equally to all members of the
same class.
Thus, in Rubio v People's Homesite & Housing
Corporation,193 the Court applied Section 76 of B.P.
Blg. 337, the old Local Government Code, to benefit
employees of the People's Homesite & Housing
Corporation who had been illegally dismissed some
23 years earlier, even though the latter were not local
government employees. The Court, speaking through
Justice (later Chief Justice) Andres Narvasa held:
Batas Pambansa Bilang 337, otherwise known as the
Local Government Code, was passed by the
legislature and became effective on February 10,
1983. Section 76 thereof (under Title Four: Personnel
Administration) provides as follows:
SEC. 76. Abolition of Position. — When the position
of an official or employee under the civil service is
abolished by law or ordinance the official or employee
so affected shall be reinstated in another vacant
position without diminution of salary. Should such
position not be available, the official or employee
affected shall be granted a separation pay equivalent
to one month salary for every year of service over and
above the monetary privileges granted to officials and
employees under existing law.
To be sure, the provision on its face is apparently
intended for the benefit only of officers and
employees in the local political subdivisions. The
Court however sees no reason why it should not
be applied as well to other personnel of the
government, including those in the People's
Homesite and Housing Corporation, which was
then considered part of the Civil Service. A
contrary conclusion would make the provision
questionable under the equal protection clause of
the Constitution as there appears to be no
substantial distinction between civil servants in
the local government and those in other branches
of government to justify their disparate
treatment. Since the petitioners are "employees
under the civil service," the matter of their
reinstatement to their former positions at this time
should logically and justly be governed by the above
cited statute although enacted many years after the
abolition of their positions. And since, too, it may
reasonably be assumed that reinstatement to their
former positions is no longer possible, or feasible, or
even desired or desirable, the petitioners or their heirs
must be deemed entitled to receive the separation
pay provided by said BP Blg. 337.194 (Emphasis
supplied)
Some Basic Principles of  Turning now to the reasonableness of legislative
Legislative Classification
Considering that the thrust of petitioner's second
argument is that its members belong to the same
class as other GFI employees (such that they are also
entitled to exemption from the Compensation
Classification System of the Salary Standardization
Law), a brief discussion on legislative classification is
in order.
As adverted to earlier, classification has been defined
as "the grouping of persons or things similar to each
other in certain particulars and different from all other
in these same particulars."195 To this may be added
the following observations of Joseph Tussman and
Jacobus tenBroek in their influential article196 on The
Equal Protection of the Laws,197 viz:
We begin with an elementary proposition: To define a
class is simply to designate a quality or
characteristic or trait or relation, or any
combination of these, the possession of which, by
an individual, determines his membership in or
inclusion within the class. A legislature defines a
class, or "classifies," when it enacts a law applying to
"all aliens ineligible for citizenship," or "all persons
convicted of three felonies," or "all citizens between
the ages of 19 and 25" or "foreign corporations doing
business within the state."
This sense of "classify" (i.e., "to define a class") must
be distinguished from the sense in which "to classify"
refers to the act of determining whether an individual
is a member of a particular class, that is, whether the
individual possesses the traits which define the class.
xxx
It is also elementary that membership in a class is
determined by the possession of the traits which
define that class. Individual X is a member of
class A if, and only if, X possesses the traits which
define class A. Whatever the defining characteristics
of a class may be, every member of that class will
possess those characteristics
classifications, the cue is to be taken from our earlier
reference to the requirement that those similarly
situated be similarly treated. A reasonable
classification is one which includes all who are
similarly situated and none who are not. The
question is, however, what does that ambiguous
and crucial phrase "similarly situated" mean? And
in answering this question we must first dispose
of two errors into which the Court has sometimes
fallen.
First, "similarly situated" cannot mean simply
"similar in the possession of the classifying trait."
All members of any class are similarly situated in
this respect and consequently, any classification
whatsoever would be reasonable by this test. x x x
xxx
The second error in the interpretation of the
meaning of similarly situated arises out of the
notion that some classes are unnatural or
artificial. That is, a classification is sometimes
held to be unreasonable if it includes individuals
who do not belong to the same "natural"
class. We call this an error without pausing to fight
the ancient controversy about the natural status of
classes. All legislative classifications are artificial in
the sense that they are artifacts, no matter what the
defining traits may be. And they are all real enough
for the purposes of law, whether they be the class of
American citizens of Japanese ancestry, or the class
of makers of margarine, or the class of stockyards
receiving more than one hundred head of cattle per
day, or the class of feeble-minded confined to
institutions.
The issue is not whether, in defining a class, the
legislature has carved the universe at a natural joint. If
we want to know if such classifications are
reasonable, it is fruitless to consider whether or not
they correspond to some "natural" grouping or
separate those who naturally belong together.
But if we avoid these two errors, where are we to look
for the test of similarity of situation which determines
the reasonableness of a classification? The
inescapable answer is that we must look beyond
the classification to the purpose of the law. A
reasonable classification is one which includes all
persons who are similarly situated with respect to
the purpose of the law.198 (Emphasis and
underscoring supplied; italics in the original)
Moreover, Tussman and tenBroek go on to describe
the task of the courts in evaluating the
reasonableness of a legislative classification:
Since it is impossible to judge the reasonableness
of a classification without relating it to the
purpose of the law, the first phase of the judicial
task is the identification of the law's purpose. x x x
xxx
It is thus evident that the attempt to identify the
purpose of a law - an attempt made mandatory by the
equal protection requirement - involves the Court in
the thornier aspects of judicial review. At best, the
Court must uncritically and often unrealistically accept
a legislative avowal at its face value. Wt worst, it must
challenge legislative integrity and push beyond the
express statement into unconfined realms of
inference. Having accepted or discovered the elusive
"purpose" the Court must then, under the
discriminatory legislation doctrine, make a judgment
as to the purity of legislative motive and, under
substantive equal protection, determine the legitimacy
of the end. Only after the purpose of the law has thus
been discovered and subjected to this scrutiny can
the Court proceed with the classification problem.
x x x Except when the class in the law is itself defined
by the mischief [to be eliminated], the assertion that
any particular relation holds between the
[classifying trait and the purpose] is an empirical
statement.The mere assertion that a particular
relation exists does not establish the truth of the
assertion. A legislature may assert that all "three-time
felons" are "hereditary criminals" and that all
"hereditary criminals" are "three-time felons." But
whether this is the case is a question of fact, not
fiat.
Consequently, the Court, in determining the
actual relation between the classes [i.e. the
classifying trait and the purpose of the law] is
engaged in fact-finding or in criticism of
legislative fact finding. Thus the Court is confronted
with a number of alternative formulations of the
question: 1) what is the legislative belief about the
relation between the classes? and, 2) is this belief
reasonable? or simply, 3) what relation exists
between the two classes?199
With the foregoing in mind, the relevant question then
(as regards petitioner's second line of argument) is
whether in fact petitioner's members and the other
GFI employees are so similarly situated as to
members of a single class for purposes of
compensation and position classification.
There is no Basis for the Classification of
GFI Employees as a Discrete Class, entitled
to "Special Treatment" with respect to
Compensation Classification
Without identifying the legislative purpose for
exemption from the coverage of the Compensation
Classification System mandated by the Salary
Standardization Law, the main opinion concludes that
the classifying trait among those exempted from the
coverage is their status as GFI employees. On this
basis, it would grant the instant petition upon the
assumption that "there exist no substantial distinctions
so as to differentiate the BSP rank and file from the
other rank and file of the [other] GFIs."
The foregoing tacitly rests on the assumptions
that, with respect to their compensation, position
classification and qualifications standards, (1) the
rank-and-file employees of the BSP together with the
rank-and-file employees of the LBP, SSS, GSIS and
DBP belong to a single class; and (2) there are no
reasonable distinctions between the rank-and-file
employees of the BSP and the exempted employees
of the other GOCCs/GFIs.
However, these assumptions are unfounded, and the
assertion that "GFIs have long been recognized as
one distinct class, separate from other governmental
entities" is demonstrably false.
As previously discussed, Section 2 of P.D.
985200 cited in support of the foregoing proposition has
been expressly repealed by Section 16 of Salary
Standardization Law.
Sec. 16. Repeal of Special Salary Laws and
Regulations. — All laws, decrees, executive orders,
corporate charters, and other issuances or parts
thereof, that exempt agencies from the coverage
of the System, or that authorize and fix position
classification, salaries, pay rates or allowances of
specified positions, or groups of officials and
employees or of agencies, which are inconsistent with
the System, including the proviso under Section
2, and Section 16 of Presidential Decree No. 985
are hereby repealed. (Emphasis supplied)
Moreover, neither the text nor the legislative record of
the Salary Standardization Law manifests the intent to
provide "favored treatment" for GOCCs and GFIs.
Thus, Section 3 (b), erroneously cited by the main
opinion, provides for the general principle that
compensation for all government personnel, whether
employed in a GOCC/GFI or not, should generally be
comparable with that in the private sector, to wit:
SECTION 3. General Provisions. — The following
principles shall govern the Compensation and
Position Classification System of the Government:
(a) All government personnel shall be paid just and
equitable wages; and while pay distinctions must
necessarily exist in keeping with work distinctions, the
ratio of compensation for those occupying higher
ranks to those at lower ranks should be maintained at
equitable levels, giving due consideration to higher
percentage of increases to lower level positions and
lower percentage increases to higher level positions;
(b) Basic compensation for all personnel in the
government and government-owned or controlled
corporations and financial institutions shall
generally be comparable with those in the private
sector doing comparable work, and must be in
accordance with prevailing laws on minimum
wages;
(c) The total compensation provided for government
personnel must be maintained at a reasonable level in
proportion to the national budget;
(d) A review of government compensation rates,
taking into account possible erosion in purchasing
power due to inflation and other factors, shall be
conducted periodically. (Emphasis and underscoring
supplied)
Indeed, Section 4 of the Salary Standardization Law
expressly provides the general rule that GFIs, like
other GOCCs and all other members of the civil
service, are within the coverage of the law:
SECTION 4. Coverage. — The Compensation and
Position Classification System herein provided
shall apply to all positions, appointive or elective,
on full or part-time basis, now existing or
hereafter created in the government, including
government-owned or controlled corporations
and government financial institutions.
The term "government" refers to the Executive, the
Legislative and the Judicial Branches and the
Constitutional Commissions and shall include all, but
shall not be limited to, departments, bureaus, offices,
boards, commissions, courts, tribunals, councils,
authorities, administrations, centers, institutes, state
colleges and universities, local government units, and
the armed forces. The term "government-owned or
controlled corporations and financial institutions"
shall include all corporations and financial
institutions owned or controlled by the National
Government, whether such corporations and
financial institutions perform governmental or
proprietary functions. (Emphasis and underscoring
supplied)
Furthermore, a reading of the deliberations on what
eventually became the Salary Standardization Law
leaves no doubt that one of its goals was to provide
for a common compensation system for all so that the
stark disparities in pay between employees of the
GOCCs and GFIs and other government employees
would be minimized if not eliminated, as the following
excerpt plainly shows:
Senator Guingona. Mrs. President, the PNB and
DBP transferred nonperforming assets and liabilities
to the National Government in the sum of over P120
billion in 1986. They are reportedly having profits of, I
think over P1 billion. They have not declared
dividends so that the National Government is the one
that absorbed the indebtedness. The financial
institutions are enjoying clean books and increased
profits. Yet, employees of these institutions are
receiving far more, whereas, the employees of the
National Government which absorbed the
nonperforming assets are receiving less. And the
Central Bank is dumping into the National
Government liabilities of more than P5 billion...
Senator Romulo. Eventually P34 billion.
Senator Guingona. And, yet, the janitor in the
Central Bank is receiving a higher rate of salary than
the clerk or even the minor executives in some
National Government agencies and bureaus. This
does not seem just and violates the equal pay for
equal work principle which the distinguished Sponsor
has nobly established in the policy statement.201
Thus, during the Bicameral Conference Committee
deliberations, the sentiment was that exemptions from
the general Compensation Classification System
applicable to all government employees would be
limited only to key positions in order not to lose these
personnel to the private sector. A provision was
moreover inserted empowering the President to, in
truly exceptional cases, approve higher
compensation, exceeding Salary Grade 30, to the
chairman, president, general manger, and the board
of directors of government-owned or controlled
corporations and financial institutions:202
SEC. CARAGUE. Actually, we are requesting that
government corporations that are performing
proprietary functions and therefore competing
with the private sector should evolve a salary
structure in respect to key positions. There are
some positions in banking, for example, that are not
present in the ordinary government offices.
I can understand for example, if the government
corporation, like NIA, it is performing a governmental
function. I believe it is not strictly a proprietary
function - NIA and NAWASA. But there are
government corporations that are engaged in very
obviously proprietary type of function. For example,
transportation companies of the government; banking
institution; insurance functions. I feel that they have
to be competitive with the private sector, not with
respect to all positions. Like, for example, janitor
or messenger, because there is no danger of
losing this out to the private sector; you can
always get this. But there are certain key position
- even the key men of the government
corporations performing proprietary functions,
sometimes they got - the market analyst,
commodities analyst and so on - they have certain
functions that are not normal in government, and
it is very difficult to get this specialists.
So, I was wondering if we could provide a provision
that government corporations engaged in proprietary
activities, that positions that are peculiar to them
should be allowed a different compensation structure.
THE CHAIRMAN (Rep. Andaya). But that can be
solved, when implemented, you just assign him a
higher rate.203 (Underscoring supplied)
xxx
THE CHAIRMAN (Sen. Rasul). Mr. Chairman, I am
just wondering if perhaps we should also include
"financial institutions," not just "government-owned or
controlled corporation."
SEC. CARAGUE. I think it is broad enough, Madam
Senator.
THE CHAIRMAN (Sen. Rasul). Broad enough?
SEC. CARAGUE. Yes.
THE CHAIRMAN (Rep. Andaya). It covers
everybody. Everybody is covered that way.
REP. LAGUDA. Mr. Chairman, if we go back to the
amendment of Senator Rasul, I think what she has
put there is that it is the President's discretion,
because in the House version, it is an across-the-
board-thing. There is no mention of the President's
discretion here. So maybe we should accept the
amendment of Senator Rasul that "it is the President
who shall decide." In other words, when she said "the
President may," it is the discretion of the President
rather than automatic.
SEC.CARAGUE. Yes. Like for example, there are, I
think, quite a number of Vice Presidents that really
are also important because it is very difficult if the
President will have a salary that is so way, way above
the Vice Presidents. And usually the Vice Presidents
are the ones that support, that provided teamwork for
the President.
Sometimes there are certain key people, like money
market specialists that are difficult to keep because
they easily transfer to another company.
xxx
SEC. CARAGUE. In the end, Your Honor, it may be
more expensive to limit the salaries of these kind of
people because if you don't get good people, the
viability of the corporation, the profitability goes down.
So you actually, in the end, lose more. You don't see
it because it is just loss of revenue, in lack of
profitability, but actually it costs you more. And that is
the problem of this kind of...204 (Emphasis and
underscoring supplied)
What is more, the exemption of the personnel of the
Securities and Exchange Commission (SEC)" from
the coverage of the Compensation Classification
System, as pointed out in the main opinion,205 only
underscores the error in maintaining employment in a
GFI as the defining trait of employees exempted from
said System.
In actual fact, the employees of a number of GFIs
remain within the coverage of the Compensation
Classification System,206 while employees of several
other GOCCs207 and government agencies208 have
been exempted from the same. Hence, GFI
employment, as advocated by the main opinion,
cannot be reasonably considered to be the basis for
exemption for the Compensation Classification
System of the Salary Standardization Law.
Curiously, how could the exemption of the SEC
personnel "add insult to petitioner's injury" when,
going by what the main opinion holds to be the
defining characteristic of the class to which
petitioner's members belong - that is, employment in
a GFI, the two groups of employees would obviously
not be comparable?
Mere Employment in a GOCC or GFI is not
Determinative of Exemption from the Salary
Standardization Law
More importantly, an examination of the legislative
proceedings leading up to the amendment of the
charters of the GOCCs and GFIs exempted from the
coverage of the Compensation Classification System
discloses that mereemployment in a GFI was not the
decisive characteristic which prompted the legislature
to provide for such exemption.
Thus, Republic Act No. 3844 (R.A. No. 3844)
otherwise known as the "Agrarian Reform Code"
created the Land Bank which is mandated to be the
financing arm of the Agrarian Reform Program of the
government. More specifically, the Land Bank is
tasked to be the primary government agency in the
mobilization and the provision of credit to the small
farmers and fisher folk sector in their various
economic activities such as production, processing,
storage, transport and the marketing of farm produce.
Since its inception, the Land Bank has transformed
into a universal bank, seeking to continually fortify the
agricultural sector by delivering countryside credit and
support services.
In order to continue performing its mandate of
providing non-traditional banking services and
developmental assistance to farmers and fishermen,
Congress saw the need to strengthen the bank by
introducing amendments to R.A. No. 3844. Republic
Act No. 7907 (R.A. No. 7907) amended R.A. No.
3844 by strengthening the Land Bank not only for the
purpose of implementing agrarian reform, but also to
make it more competitive with foreign banks.209
One of the salient points of R.A. No. 7907 is the
exemption of all of the Land Bank's personnel from
the Salary Standardization Law, authorizing at the
same time its board of directors to provide
compensation, position classification system and
qualification standards.
The discussion of the House of Representatives'
Committee on Banks and Financial Intermediaries
reveals the surrounding circumstances then
prevailing, which prompted Congress to exempt the
Land Bank from the Salary Standardization Law. The
Committee likewise recognized the* role of the rank
and file employees in fulfilling its unique task of
providing credit to support the agricultural sector.
MR. GOLEZ. Madam Speaker, the points of the
distinguished sponsor are very well taken. But what I
would like to emphasize is that the Land Bank as
already stated, is not just almost unique, it is unique.
It cannot be likened to a conventional commercial
bank even in the case of the Philippine National Bank
where its employees can very easily move from one
bank to another. An employee, an average employee
in the Philippine National Bank can easily transfer to a
private commercial bank and vice-versa. So in fact
we are witnessing almost on a daily basis these
periodic transfers, piracy of executives,
employees from one commercial bank to another.
However, in the case of the Land Bank precisely
because of its very unique operations, the very
life of the viability of the Land Bank of the
Philippines depends decisively and critically on
its core group, which in this particular case would
be the rank and file, the technical employee below
the level of managers. They are not substitutable
at all. They are very critical. And as such, the
position of this Representation, Madam Speaker,
Your Honor, is that that critical role gives them the
importance as well as the inherent right to be
represented in the highest policy making body of the
bank.210(Emphasis supplied)
xxx
MR. APOSTOL. Now, may I know why the employees
of Land Bank should be exempted from the
compensation and position classification?
MR. FUENTEBELLA. Are we now in Section 87, your
Honor?
MR. APOSTOL. Yes.
MR. FUENTEBELLA. The present compensation
package of the employees of the bank are no
longer competitive with the banking industry. In
fact, the turnover of bank personnel is concerned,
I think they had a turnover of more than 127 rank
and file and more than 43 or 50 officer level. For
the reason that the present compensation through
bank officers and personnel are no longer competitive
with the other banks despite the fact that there is a
provision in our Constitution and this is sanctioned by
existing provisions of the Civil Service, that we ma
enact laws to make the position classification of
certain sectors in the government comparable with
the same industry. That is the reason why...
MR. APOSTOL. Is it not that the compensation of
officials and employees of the Land Bank must be
similar or comparable to the salaries and
compensation of government banks or financial
institutions?
MR. FUENTEBELLA. Yes. In fact, the Philippine
National Bank has a better financial compensation
package compared to the Land Bank.
MR. APOSTOL. Yes, it should and it must because
PNB is already privatized, Land Bank is not yet.
MR. FUENTEBELLA. Not yet, your Honor.
MR. APOSTOL. If the compensation package of the
employees of Land Bank should be similar to PNB,
then why not privatize so that Land Bank will be
exempted from this...
MR. FUENTEBELLA. Well, as I said, your Honor, in
due time, we can go into that aspect of privatization.
We are not closing our eyes to that possibility. But for
the moment that the bank is still tasked with
numerous problems, particularly on agrarian reform,
and for as long as the bank has not been able to
perform its major task in helping the government
provide the necessary mechanisms to solve and
address the problems of agrarian reform, then we
cannot talk about privatization yet. Because the
function of the bank is not purely for profit orientation,
your Honor. Whatever profits are generated under the
commercial banking transactions are channeled to the
agrarian sector, which is a losing proposition
actually.211 (Emphasis supplied)
Like the Land Bank, the Development Bank of the
Philippines (DBP), the country's premier development
bank, was also exempt from the Salary
Standardization Law. Republic Act No. 8523 (RA
8523) amended Executive Order No. 81 otherwise
known as the "1986 Revised Charter of the
Development Bank of the Philippines" to enable DBP
to effectively contribute to the nation's attainment of
its socio-economic objectives and fill the gaps left by
the private sector which might be unwilling or
unprepared to take on critical projects and programs.
The bottom line of this bill which seeks to amend the
existing charter of the Development Bank of the
Philippines is to enable the DBP as the country's
premier development bank to effectively contribute to
the nation's attainment of its socio-economic
objectives, such as the alleviation of poverty, creation
of employment opportunities, and provision of basic
needs such as food, shelter, health and education.
Given the present state of financial intermediation and
capital markets in the Philippines, economic activities
and projects still remain which private financial
institutions may not be willing to finance because of
the risks involves. And even if some of these private
institutions are willing to do so, they may not have the
capability to assist such projects and activities.
Development lending is much more than simply
providing medium to long-term funds to economically
viable projects.
The proposed DBP charter amendment will help
remodel DBP in the financial community as a
predominantly development bank that works closely
with individuals, institutions and associations which
can provide resources and other types of assistance
to projects with clearly-defined development impact.212
In order to achieve DBP's vision as the country's
premier development bank in a rapidly growing
economic environment, the legislature sought to (1)
increase the authorized capital of DBP from P5 billion
to P10 billion; and (2) restructure DBP's organization
into one which is market-responsive, product focused,
horizontally aligned, and with a lean, highly motivated
work force by removing the DBP from the coverage of
the Salary Standardization Law. The DBP's
exemption from the Salary Standardization Law was
justified by the fact that it is an institution engaged in
development activities which should be given the
same opportunities as the private sector to
compete.213
The exemption from the Salary Standardization Law
does not only involve banks but government entities
that manage pension funds such as the SSS and the
GSIS.
Republic Act No. 1161 (R.A. No. 1161) established
the SSS pursuant to a state policy of providing
meaningful protection to members and their
beneficiaries against the hazards of disability,
sickness, maternity, old age, death, and other
contingencies, resulting in loss of income or financial
burden. Republic Act No. 8282 amended R.A. No.
1161 by providing for better benefit packages,
expansion of coverage, flexibility in investments,
stiffer penalties for violators of the law, condonation of
penalties of delinquent employers and the
establishment of a voluntary provident fund for
members.
The fund that the SSS administers comes from the
compulsory remittances of the employer on behalf of
his employees. The House of Representatives noted
that the fund in 1996 amounted 5.5 billion dollars, the
sheer enormity of which necessitated that it be
exempt from the Salary Standardization Law in order
for it to attract quality personnel to ensure that the
funds will not be mismanaged, abused or dissipated
due to the negligence of its personnel. Moreover, the
SSS, like the Land Bank and the DBP, was facing a
massive exodus of its personnel who were migrating
to greener pastures.
MR. VALENCIA. x x x Now, the other law refers to
the law on salary standardization. Again, we are in a
situation where we are competing for personnel
with the private sector, especially the financial
institutions. We compete with banks, we compete
with insurance companies for people. So what
happens invariably is we lost our people after we
have trained them, after they have proven
themselves with a track record, with the very low
pay that is being given to our people. We believe
that with the magnitude of the accountability that
we have, (We are accountable for 5.5 billion
dollars, some 132 million pesos) ah, we think that
we deserve the quality of people to ensure that
these funds...and the pay out by the billions of
pesos in terms of benefits and we collect by the
billions of pesos, we believe that the magnitude of
money and accountability we have is even higher
than that of the local financial institutions. And the
pay, for example, of the Administrator is similar to a
small branch in a bank. So, I don't think our pay will
be very competitive but certainly it's too low
considering the accountability that is on the shoulder
of the employees. If we end up with poor quality of
personnel, what would happen is these funds could
be mismanaged, abused or just out of pure
negligence could be dissipated.
HON. PADILLA. Mr. Chairman.
THE CHAIRMAN. Congressman Padilla.
HON. PADILLA. With the Standardization Law, how
can we resolve that problem just mentioned by the
Administrator?
MR. VALENCIA. What will happen, Sir, is that we will
ask outside assistance to work out a salary structure
that would be modest but at the same time at least
make it more difficult (sic) that will attract new people,
new blood to the System - quality personnel, and will
also help make it a bit more difficult for private sector
to pirate from the institution.214 (Emphasis supplied)
As the SSS exercises the same functions as the GSIS
- the handling of sensitive and important funds - the
GSIS' exemption from the Salary Standardization Law
was easily justifiable, viz:
HON. TUAZON. xxx Now, the GSIS and the SSS,
they are more or less performing the same
functions.So I am asking whether in the proposed
amendments on the charter of the GSIS they also
have similar proposal, because if I still recall, there
was a time when the GSIS employees were the envy
- not the SSS because the SSS has never been the
envy of government employees because they really
never have been paid very good salaries. — There
was a time when the GSIS was the envy of other
government employees because they had fat
bonuses, they had quarterly bonus, they had mid-year
bonus, they had 3 months bonus, Christmas bonus
and their salaries were very much higher than their
counterparts in the government and they are saying,
"By golly, the GSIS, they are only using the funds of
the government employees and yet they are receiving
fat salaries from the contributions of the government
employees. That was one of the complaints I was
hearing at that time - I was still First Year College -,
so the next time I realized, all these fat salaries of the
Central Bank... Central Bank was also the envy of the
other government employees, PNB, but SSS has
never been noted to be paying fat salaries that will be
sufficient to attract well qualified employees from the
other sectors. So, the reason for my question is that, if
we grant SSS, we have also to grant GSIS on the
rationale that they are both performing the same
functions.215 (Emphasis supplied)
In sum, the basis for the exemption of certain
employees of GOCCs or GFIs from the coverage of
the Salary Standardization Law rests not on the mere
fact that they are employees of GOCCs or GFIs, but
on a policy determination by the legislature that such
exemption is needed to fulfill the mandate of the
institution concerned considering, among others, that:
(1) the GOCC or GFI is essentially proprietary in
character; (2) the GOCC or GFI is in direct
competition with their counterparts in the private
sector, not only in terms of the provision of goods or
services, but also in terms of hiring and retaining
competent personnel; and (3) the GOCC or GFI are
or were experiencing difficulties filling up plantilla
positions with competent personnel and/or retaining
these personnel. The need for and the scope of
exemption necessarily varies with the particular
circumstances of each institution, and the
corresponding variance in the benefits received by the
employees is merely incidental.
There are real differences between the Rank & 
File of the BSP and the Exempted Rank & File
Employees of the other GOCCs/GFIs
There can be no doubt that the employees of the BSP
share a common attribute with the employees of the
LBP, SSS, GSIS and DBP in that all are employees of
GOCCs performing fiduciary functions. It may also be
reasonable to assume that BSP employees with SG
19 and below perform functions analogous to those
carried out by employees of the other GOCCs with
the corresponding salary grades.
Nonetheless, these similarities alone are not sufficient
to support the conclusion that rank-and-file
employees of the BSP may be lumped together with
similar employees of the other GOCCs for purposes
of compensation, position classification and
qualifications standards. The fact that certain persons
have some attributes in common does not
automatically make them members of the same class
with respect to a legislative classification. Thus,
in Johnson, et al. v. Robison, et al,.,216 involving the
alleged violation of a conscientious objector's right to
equal protection, the U.S. Supreme Court had
occasion to observe:
Of course, merely labeling the class of beneficiaries
under the Act as those having served on active duty
in the Armed Services cannot rationalize a statutory
discrimination against conscientious objectors who
have performed alternative civilian service, if, in fact,
the lives of the latter were equally disrupted and
equally in need of readjustment. The District Court
found that military veterans and alternative service
performers share the characteristic during their
respective service careers of "inability to pursue the
educational and economic objectives that persons not
subject to the draft law could pursue." But this finding
of similarity ignores that a common characteristic
shared by beneficiaries and nonbeneficiaries alike, is
not sufficient to invalidate a statute when other
characteristics peculiar to only one group
rationally explain the statute's different treatment
of the two groups. Congress expressly recognized
that significant differences exist between military
service veterans and alternative service performers,
particularly in respect of the Act's purpose to provide
benefits to assist in readjusting to civilian life. These
differences "afford the basis for a different treatment
within a constitutional framework."217 (Underscoring
and emphasis supplied; citations omitted)
Indeed, from the foregoing examination of the
legislative records of the amended charters of the
exempt GOCCs and GFIs, the following real and
material differences are readily manifest:
First, unlike the LBP, DBP, SSS and GSIS, the BSP,
in particular the Central Monetary
Authority,218 performs a primarily government function,
not a proprietary or business function. In this respect
it is more similar to the other government agencies
involved in the management of the economy, such as
the National Economic Development Authority
(NEDA), than a commercial bank.
Second, while the importance of its functions is
undoubted, the BSP, unlike the LBP, DBP, SSS and
GSIS, is not subject to cut throat competition or the
pressures of either the financial or job markets.
Third, there is no indication in the record that the
BSP, unlike the LBP, DBP, SSS and GSIS, is
experiencing difficulty in filling up or maintaining
competent personnel in the positions with SG 19 and
below.
The Questioned Proviso Cannot be
Considered Oppressive or Discriminatory
in Its Implementation
Given the factual basis for the classification between
exempt and non-exempt employees (i.e. real
distinctions as to the proprietary or governmental
character of the GOCC/GFI, competition with the
private sector, and difficulty in attracting and
maintaining competent personnel) and the reasonable
relationship of this classification to the attainment of
the objectives of the laws involved, the
questioned proviso cannot be considered oppressive
or discriminatory in its implementation.
Significantly, neither the petitioner nor the main
opinion demonstrates what injuries petitioner's
members have sustained as a result of the proviso in
Section 15 (c) of The New Central Bank Act, whether
or not the same is read together with subsequent
legislative enactments. This is unsurprising for how
could a provision which places the BSP rank and file
at par with all other government employees in terms
of compensation and position classification be
considered oppressive or discriminatory?
Moreover, Congressional records show that House
Bill 123 has been filed with the present Thirteenth
Congress219seeking to amend The New Central Bank
Act by, among other things, exempting all positions in
the BSP from the Salary Standardization Law. Thus, it
cannot be said that Congress has closed its mind to
all possibility of amending the New Central Bank Act
to provide for the exemption of the BSP rank and file
from the Compensation Classification System of the
Salary Standardization Law.
In fine, judged under the Rational Basis Test, the
classification in Section 15 (c) of the New Central
Bank Act complies with the requirements of the equal
protection clause, even taken together with the
subsequent amendments of the charters of the other
GOCCs and GFIs.
Petitioner's Members' Remedy is with Congress
and  solution, rings hollow.
Not With The Courts
While the main opinion acknowledges the propriety of
judicial restraint "under most circumstances" when
deciding questions of constitutionality, in recognition
of the "broad discretion given to Congress in
exercising its legislative power," it nevertheless
advocates active intervention with respect to the
exemption of the BSP rank and file employees from
the Compensation Classification System of the Salary
Standardization Law.
Considering, however, that the record fails to show (1)
that the statutory provision in question affects either a
fundamental right or a suspect class, and, more
importantly, (2) that the classification contained
therein was completely bereft of any possible rational
and real basis, it would appear that judicial restraint is
not merely preferred but is in fact mandatory, lest this
Court stray from its function of adjudication and
trespass into the realm of legislation.
To be sure, inasmuch as exemption from the Salary
Standardization Law requires a factually grounded
policy determination by the legislature that such
exemption is necessary and desirable for a
government agency or GOCC to accomplish its
purpose, the appropriate remedy of petitioner is with
Congress and not with the courts. As the branch of
government entrusted with the plenary power to make
and amend laws,220 it is well within the powers of
Congress to grant exceptions to, or to amend where
necessary, the Salary Standardization Law, where the
public good so requires. At the same time, in line with
its duty to determine the proper allocation of powers
between the several departments,221 this Court is
naturally hesitant to intrude too readily into the
domain of another co-equal branch of government
where the absence of reason and the vice of
arbitrariness are not clearly and unmistakably
established.
The contention in the main opinion that herein
petitioner represents the "politically powerless," and
therefore should not be compelled to seek a political
First, as pointed out by the U.S. Supreme Court
in City of Cleburne Texas v. Cleburne Living
Center,222 "[a]ny minority can be said to be powerless
to assert direct control over the legislature, but if that
were a criterion for higher level scrutiny by the courts,
much economic and social legislation would now be
suspect."223
Second, there is nothing of record which would
explain why the rank and file employees of the BSP in
particular should be considered more "powerless"
than the rank and file employees of the other GOCCs
and GFIs, particularly those to whom Congress has
granted exemption.
Third, as already mentioned, House Bill 123,
providing for, among others, the exemption of all BSP
employees from the coverage of the Compensation
Classification System of the Salary Standardization
Law is already pending in Congress. Thus, it would
seem that the petitioner and its members are not
without any support from within that legislative body.
Moreover, in view of the tight fiscal and budgetary
situation confronting the national government, both
the executive and legislative branches of the
government are actively reassessing the statutes
which have exempted certain GOCCs and GFIs from
the Salary Standardization Law, as reported in a
number of newspapers of general circulation.224
Thus, in line with the austerity program set under
Administrative Order 130 issued by the President on
August 31, 2004, the Department of Budget and
Management is reviewing the pay packages of 1,126
GOCCs and their subsidiaries,225 particularly those
which have been exempted from the Compensation
Classification System of the Salary Standardization
Law,226 to bring their salaries at par with national
agencies.227 Additionally, the Department of Budget
has moved for the removal of all the exemptions of
the GOCCs from the Salary Standardization law and
the slashing of salaries of some GOCC officials to
help ease the government's financial problems.228
There have also been suggestions to shift to a
performance-based compensation structure,229 or to
amend the charters of the GOCCs exempted from the
Salary Standardization Law to allow the President to
set limits on the compensation230 received by their
personnel. Budget Secretary Emilia Boncodin has
also disclosed that the President had mandated "a cut
in pay of members of the board and officers of
GOCCs that are not competing with the private
sector," adding that those who "d[o] not compete with
the private sector would have to observe the Salary
Standardization Law."231
Together with these developments, House Majority
Leader Prospero Nograles has called on Congress to
step in and institute amendments to existing charters
of GFI's and GOCCs232 which have been exempted
from the Compensation Classification System of the
Salary Standardization Law; and, thereafter, pass a
law standardizing the salaries of GOCC and GFI
employees and executives.233 Other members of the
House of Representatives, particularly the party-list
lawmakers, have suggested a cut on the salary
schemes of GOCC executives, with the funds saved
to be channeled to a "special fund" for giving lowly
paid government employees a salary increase.234
Whether any of the foregoing measures will actually
be implemented by the Congress still remains to be
seen. However, what is important is that Congress is
actively reviewing the policies concerning GOCCs
and GFIs with respect to the Salary Standardization
Law.
Hence, for this Court to intervene now, when no
intervention is called for, would be to prematurely
curtail the public debate on the issue of compensation
of the employees of the GOCCs and GFIs, and
effectively substitute this Court's policy judgments for
those of the legislature, with whom the "power of the
purse" is constitutionally lodged. Such would not only
constitute an improper exercise of the Court's power
of judicial review, but may also effectively stunt the
growth and maturity of the nation as a political body
as well.
In this regard, it may be worthwhile to reflect upon the
words of Mr. Chief Justice Berger of the American
Court in his dissenting opinion in Plyler v. Doe,235 to
wit:
The Court makes no attempt to disguise that it is
acting to make up for Congress' lack of "effective
leadership" in dealing with the serious national
problems caused by the influx of uncountable millions
of illegal aliens across our borders. The failure of
enforcement of the immigration laws over more than a
decade and the inherent difficulty and expense of
sealing our vast borders have combined to create a
grave socioeconomic dilemma. It is a dilemma that
has not yet been fully assessed, let alone
addressed. However, it is not the function of the
Judiciary to provide "effective leadership" simply
because the political branches of government fail
to do so.
The Court's holding today manifests the justly
criticized judicial tendency to attempt speedy and
wholesale formulation of "remedies" for the
failures - or simply the laggard pace - of the
political processes of our system of
government. The Court employs, and in my view
abuses, the Fourteenth Amendment in an effort to
become an omnipotent and omniscient problem
solver. That the motives for doing so are noble
and compassionate does not alter the fact that the
Court distorts our constitutional function to make
amends for the defaults of others.
xxx
The Constitution does not provide a cure for
every social ill, nor does it vest judges with a
mandate to try to remedy every social
problem. Moreover, when this Court rushes to
remedy what it perceives to be the failing of the
political processes, it deprives those processes of
an opportunity to function.When the political
institutions are not forced to exercise
constitutionally allocated powers and
responsibilities, those powers, like muscles not
used, tend to atrophy. Today's cases, I regret to
say, present yet another example of unwarranted
judicial action which in the long run tends to
contribute to the weakening of our political
processes.236(Emphasis supplied; citations and
footnotes omitted)
The Social Justice Provisions of the Constitution
do 
not Justify the Grant of the Instant Petition
May this Court depart from established rules in equal
protection analysis to grant a group of government
employees, the Bangko Sentral ng Pilipinas' rank and
file, adjustments in their salaries and wages? Can the
exemption from a law mandating the salary
standardization of all government employees be
justified based on the economic and financial needs
of the employees, and on the assertion that those
who have less in life should have more in law? Can
the social justice provisions in the Constitution
override the strong presumption of constitutionality of
the law and place the burden, under the test of "strict
scrutiny", upon the government to demonstrate that its
classification has been narrowly tailored to further
compelling governmental interests?
Notwithstanding the lack of support from both local
and foreign jurisprudence to justify the grant of the
instant petition, the main opinion maintains that the
policy of social justice and the special protection
afforded to labor237require the use of equal protection
as a tool of effective intervention, and the adoption of
a less deferential attitude by this Court to legislative
classification.238
The citation of the social justice provisions of the
Constitution are non sequitur. As previously
discussed, neither the petitioner nor the main opinion
has clearly explained how a provision placing the rank
and file of the BSP on equal footing with all other
government employees in terms of compensation and
position classification can be considered oppressive
or discriminatory.
In this regard, the citation of International School
Alliance of Educators v. Quisumbing239 is doubly
ironic. For to demonstrate the institutionalization of
the principle of "equal pay for equal work" in our legal
system, footnote 22 of the decision refers specifically
to the Salary Standardization Law as embodying said
principle:
Indeed, the government employs this rule "equal pay
for equal work" in fixing the compensation of
government employees. Thus, Republic Act No. 6758
(An Act Prescribing a Revised Compensation and
Position Classification System in Government and for
Other Purposes) declares it "the policy of the State to
provide equal pay for substantially equal work and to
base differences in pay upon substantive differences
in duties and responsibilities, and qualification
requirements of the positions. See also the Preamble
of Presidential Decree No. 985 (A Decree Revising
the Position Classification and Compensation
Systems in the National Government, and Integrating
the same)240
At the same time, the General Provisions of the
Salary Standardization Law clearly incorporate the
spirit and intent of the social justice provisions cited in
the main opinion, to wit:
SECTION 3. General Provisions. — The following
principles shall govern the Compensation and
Position Classification System of the Government:
(a) All government personnel shall be paid just and
equitable wages; and while pay distinctions must
necessarily exist in keeping with work distinctions, the
ratio of compensation for those occupying higher
ranks to those at lower ranks should be maintained at
equitable levels, giving due consideration to higher
percentage of increases to lower level positions and
lower percentage increases to higher level positions;
(b) Basic compensation for all personnel in the
government and government-owned or controlled
corporations and financial institutions shall generally
be comparable with those in the private sector doing
comparable work, and must be in accordance with
prevailing laws on minimum wages;
(c) The total compensation provided for government
personnel must be maintained at a reasonable level in
proportion to the national budget;
(d) A review of government compensation rates,
taking into account possible erosion in purchasing
power due to inflation and other factors, shall be
conducted periodically.
How then are the aims of social justice served by
removing the BSP rank and file personnel from the
ambit of the Salary Standardization Law? In the
alternative, what other public purpose would be
served by ordering such an exemption? Surely to
grant the rank and file of the BSP exemption solely for
the reason that other GOCC or GFI employees have
been exempted, without regard for the reasons which
impelled the legislature to provide for those
exemptions, would be to crystallize into our law what
Justice Holmes sardonically described as "merely
idealizing envy."241
Similarly, the justification that petitioner and its
members represent "the more impotent rank and file
government employees who, unlike employees in the
private sector, have no specific rights to organize as a
collective bargaining unit and negotiate for better
terms and conditions for employment, nor the power
to hold a strike to protest unfair labor practices" is
unconvincing. This Court's discussion of the
differences between employment in the GOCCs/GFIs
and the private sector, to my mind, is more insightful:
The general rule in the past and up to the present is
that "the terms and conditions of employment in the
Government, including any political subdivision or
instrumentality thereof are governed by law" (Section
11, the Industrial Peace Act, R.A. No. 875, as
amended and Article 277, the Labor Code, P.D. No.
442, as amended). Since the terms and conditions
of government employment are fixed by law,
government workers cannot use the same
weapons employed by workers in the private
sector to secure concessions from their
employers. The principle behind labor unionism in
private industry is that industrial peace cannot be
secured through compulsion by law. Relations
between private employers and their employees
rest on an essentially voluntary basis. Subject to
the minimum requirements of wage laws and
other labor and welfare legislation, the terms and
conditions of employment in the unionized private
sector are settled through the process of
collective bargaining. In government employment,
however, it is the legislature and, where properly
given delegated power, the administrative heads
of government which fix the terms and conditions
of employment. And this is effected through
statutes or administrative circulars, rules, and
regulations, not through collective bargaining
agreements.
xxx
Personnel of government-owned or controlled
corporations are now part of the civil service. It
would not be fair to allow them to engage in
concerted activities to wring higher salaries or
fringe benefits from Government even as other
civil service personnel such as the hundreds of
thousands of public school teachers, soldiers,
policemen, health personnel, and other
government workers are denied the right to
engage in similar activities.
To say that the words "all employers" in P.D. No. 851
includes the Government and all its agencies,
instrumentalities, and government-owned or
controlled corporations would also result in
nightmarish budgetary problems.
For instance, the Supreme Court is trying its best to
alleviate the financial difficulties of courts, judges, and
court personnel in the entire country but it can do so
only within the limits of budgetary appropriations.
Public school teachers have been resorting to what
was formerly unthinkable, to mass leaves and
demonstrations, to get not a 13th-month pay but
promised increases in basic salaries and small
allowances for school uniforms. The budget of the
Ministry of Education, Culture and Sports has to be
supplemented every now and then for this purpose.
The point is, salaries and fringe benefits of those
embraced by the civil service are fixed by law. Any
increases must come from law, from appropriations or
savings under the law, and not from concerted
activity.
The Government Corporate Counsel, Justice Manuel
Lazaro, in his consolidated comment for respondents
GSIS, MWSS, and PVTA gives the background of the
amendment which includes every government-owned
or controlled corporation in the embrace of the civil
service:
xxx
'"Moreover, determination of employment conditions
as well as supervision of the management of the
public service is in the hands of legislative bodies. It is
further emphasized that government agencies in the
performance of their duties have a right to demand
undivided allegiance from their workers and must
always maintain a pronounced esprit de corps or firm
discipline among their staff members. It would be
highly incompatible with these requirements of the
public service, if personnel took orders from union
leaders or put solidarity with members of the working
class above solidarity with the Government. This
would be inimical to the public interest.
xxx
"Similarly, Delegate Leandro P. Garcia, expressing
support for the inclusion of government-owned or
controlled corporations in the Civil Service, argued:
"'It is meretricious to contend that because
Government-owned or controlled corporations
yield profits, their employees are entitled to better
wages and fringe benefits than employees of
Government other than Government-owned and
controlled corporations which are not making
profits. There is no gainsaying the fact that the
capital they use is the people's money.' (see:
Records of the 1971 Constitutional Convention).
"Summarizing the deliberations of the 1971
Constitutional Convention on the inclusion of
Government-owned or controlled corporations, Dean
Joaquin G. Bernas, SJ., of the Ateneo de Manila
University Professional School of Law, stated
that government-owned corporations came under
attack as milking cows of a privileged few
enjoying salaries far higher than their
counterparts in the various branches of
government, while the capital of these
corporations belongs to the Government and
government money is pumped into them
whenever on the brink of disaster, and they
should therefore come under the stric[t]
surveillance of the Civil Service System. (Bernas,
The 1973 Philippine Constitution, Notes and Cases,
1974 ed., p. 524)."
xxx
Section 6, Article XII-B of the Constitution gives
added reasons why the government employees
represented by the petitioners cannot expect
treatment in matters of salaries different from that
extended to all others government personnel. The
provision states:
"SEC. 6. The National Assembly shall provide for the
standardization of compensation of government
officials and employees, including those in
government-owned or controlled corporations, taking
into account the nature of the responsibilities
pertaining to, and the qualifications required for the
positions concerned."
It is the legislature or, in proper cases, the
administrative heads of government and not the
collective bargaining process nor the
concessions wrung by labor unions from
management that determine how much the
workers in government-owned or controlled
corporations may receive in terms of salaries,
13th month pay, and other conditions or terms of
employment. There are government institutions
which can afford to pay two weeks, three weeks, or
even 13th-month salaries to their personnel from their
budgetary appropriations. However, these payments
must be pursuant to law or regulation.242(Emphasis
supplied)
Certainly, social justice is more than picking and
choosing lines from Philippine and foreign
instruments, statutes and jurisprudence, like ripe
cherries, in an effort to justify preferential treatment of
a favored group. In the immortal words of Justice
Laurel in Calalang v. Williams:243
The petitioner finally avers that the rules and
regulations complained of infringe upon the
constitutional precept regarding the promotion of
social justice to insure the well-being and economic not, to my mind, automatically justify their exemption
security of all the people. The promotion of social from the Compensation Classification System
justice, however, is to be achieved not through a provided for by the Salary Standardization Law. In my
mistaken sympathy towards any given group. humble view, the equal protection clause ought not to
Social justice is "neither communism, nor be used as a means of "reserving greener pastures to
despotism, nor atomism, nor anarchy," but the sacred cows" in contravention of the Constitutional
humanization of laws and the equalization of mandate to "provide for the standardization of
social and economic forces by the State so that compensation of government officials and employees,
justice in its rational and objectively secular including those in government-owned or controlled
conception may at least be approximated.Social corporations with original charters, taking into account
justice means the promotion of the welfare of all the the nature of the responsibilities pertaining to, and the
people, the adoption by the Government of measures qualifications required for their positions."
calculated to insure economic stability of all the
competent elements of society, through the WHEREFORE, I vote to deny the instant petition.
maintenance of a proper economic and social
equilibrium in the interrelations of the members of the
community, constitutionally, through the adoption of
measures legally justifiable, or extra-constitutionally,
through the exercise of powers underlying the
existence of all governments on the time-honored
principle of salus populi est suprema lex244 (Emphasis
and underscoring supplied)

Postscript

I agree wholeheartedly with the main opinion's

statement that "[t]here should be no hesitation in
using the equal protection clause as a major cutting
edge to eliminate every conceivable irrational G.R. No. 74457 March 20, 1987
discrimination in our society."
RESTITUTO YNOT, petitioner, 
However, because I find that the classification vs.
contained in the questioned proviso is based on real INTERMEDIATE APPELLATE COURT, THE
differences between the executive level and the rank STATION COMMANDER, INTEGRATED NATIONAL
and file of the BSP; is rationally related to the POLICE, BAROTAC NUEVO, ILOILO and THE
attainment of the objectives of the new Central Bank REGIONAL DIRECTOR, BUREAU OF ANIMAL
Act; and, further, that the subsequent amendments to INDUSTRY, REGION IV, ILOILO CITY, respondents.
the charters of certain other GOCCs and GFIs did not
materially affect the rational basis for this Ramon A. Gonzales for petitioner.
classification, I do not believe that the classification in
the case at bar is impressed with the vice of
irrationality.
CRUZ, J.:
The mere fact that petitioner's members are
The essence of due process is distilled in the
employees of the Bangko Sentral ng Pilipinas,
immortal cry of Themistocles to Alcibiades "Strike —
admittedly perhaps the biggest among the GFIs, does
but hear me first!" It is this cry that the petitioner in
effect repeats here as he challenges the
constitutionality of Executive Order No. 626-A.
The said executive order reads in full as follows:
WHEREAS, the President has given orders
prohibiting the interprovincial movement of carabaos
and the slaughtering of carabaos not complying with
the requirements of Executive Order No. 626
particularly with respect to age;
WHEREAS, it has been observed that despite such
orders the violators still manage to circumvent the
prohibition against inter-provincial movement of
carabaos by transporting carabeef instead; and
WHEREAS, in order to achieve the purposes and
objectives of Executive Order No. 626 and the
prohibition against interprovincial movement of
carabaos, it is necessary to strengthen the said
Executive Order and provide for the disposition of the
carabaos and carabeef subject of the violation;
NOW, THEREFORE, I, FERDINAND E. MARCOS,
President of the Philippines, by virtue of the powers
vested in me by the Constitution, do hereby
promulgate the following:
SECTION 1. Executive Order No. 626 is hereby
amended such that henceforth, no carabao
regardless of age, sex, physical condition or purpose
and no carabeef shall be transported from one
province to another. The carabao or carabeef
transported in violation of this Executive Order as
amended shall be subject to confiscation and
forfeiture by the government, to be distributed to
charitable institutions and other similar institutions as
the Chairman of the National Meat Inspection
Commission may ay see fit, in the case of carabeef,
and to deserving farmers through dispersal as the
Director of Animal Industry may see fit, in the case of
carabaos.
SECTION 2. This Executive Order shall take effect
immediately.
Done in the City of Manila, this 25th day of October, in
the year of Our Lord, nineteen hundred and eighty.
(SGD.) FERDINAND E. MARCOS
President
Republic of the Philippines
The petitioner had transported six carabaos in a pump
boat from Masbate to Iloilo on January 13, 1984,
when they were confiscated by the police station
commander of Barotac Nuevo, Iloilo, for violation of
the above measure. 1 The petitioner sued for
recovery, and the Regional Trial Court of Iloilo City
issued a writ of replevin upon his filing of
a supersedeas bond of P12,000.00. After considering
the merits of the case, the court sustained the
confiscation of the carabaos and, since they could no
longer be produced, ordered the confiscation of the
bond. The court also declined to rule on the
constitutionality of the executive order, as raise by the
petitioner, for lack of authority and also for its
presumed validity. 2
The petitioner appealed the decision to the
Intermediate Appellate Court,* 3 which upheld the trial
court, ** and he has now come before us in this
petition for review on certiorari.
The thrust of his petition is that the executive order is
unconstitutional insofar as it authorizes outright
confiscation of the carabao or carabeef being
transported across provincial boundaries. His claim is
that the penalty is invalid because it is imposed
without according the owner a right to be heard before
a competent and impartial court as guaranteed by due
process. He complains that the measure should not
have been presumed, and so sustained, as
constitutional. There is also a challenge to the
improper exercise of the legislative power by the
former President under Amendment No. 6 of the 1973
Constitution. 4
While also involving the same executive order, the
case of Pesigan v. Angeles  5 is not applicable here.
The question raised there was the necessity of the
previous publication of the measure in the Official
Gazette before it could be considered enforceable.
We imposed the requirement then on the basis of due
process of law. In doing so, however, this Court did
not, as contended by the Solicitor General, impliedly
affirm the constitutionality of Executive Order No. 626-
A. That is an entirely different matter.
This Court has declared that while lower courts
should observe a becoming modesty in examining
constitutional questions, they are nonetheless not
prevented from resolving the same whenever
warranted, subject only to review by the highest
tribunal. 6 We have jurisdiction under the Constitution
to "review, revise, reverse, modify or affirm on appeal
or certiorari, as the law or rules of court may provide,"
final judgments and orders of lower courts in, among
others, all cases involving the constitutionality of
certain measures. 7 This simply means that the
resolution of such cases may be made in the first
instance by these lower courts.
And while it is true that laws are presumed to be
constitutional, that presumption is not by any means
conclusive and in fact may be rebutted. Indeed, if
there be a clear showing of their invalidity, and of the
need to declare them so, then "will be the time to
make the hammer fall, and heavily," 8 to recall Justice
Laurel's trenchant warning. Stated otherwise, courts
should not follow the path of least resistance by
simply presuming the constitutionality of a law when it
is questioned. On the contrary, they should probe the
issue more deeply, to relieve the abscess,
paraphrasing another distinguished jurist, 9 and so
heal the wound or excise the affliction.
Judicial power authorizes this; and when the exercise
is demanded, there should be no shirking of the task
for fear of retaliation, or loss of favor, or popular
censure, or any other similar inhibition unworthy of the
bench, especially this Court.
The challenged measure is denominated an executive
order but it is really presidential decree, promulgating
a new rule instead of merely implementing an existing
law. It was issued by President Marcos not for the
purpose of taking care that the laws were faithfully
executed but in the exercise of his legislative authority
under Amendment No. 6. It was provided thereunder
that whenever in his judgment there existed a grave
emergency or a threat or imminence thereof or
whenever the legislature failed or was unable to act
adequately on any matter that in his judgment
required immediate action, he could, in order to meet
the exigency, issue decrees, orders or letters of
instruction that were to have the force and effect of
law. As there is no showing of any exigency to justify
the exercise of that extraordinary power then, the
petitioner has reason, indeed, to question the validity
of the executive order. Nevertheless, since the
determination of the grounds was supposed to have
been made by the President "in his judgment, " a
phrase that will lead to protracted discussion not
really necessary at this time, we reserve resolution of
this matter until a more appropriate occasion. For the
nonce, we confine ourselves to the more fundamental
question of due process.
It is part of the art of constitution-making that the
provisions of the charter be cast in precise and
unmistakable language to avoid controversies that
might arise on their correct interpretation. That is the
Ideal. In the case of the due process clause, however,
this rule was deliberately not followed and the wording
was purposely kept ambiguous. In fact, a proposal to
delineate it more clearly was submitted in the
Constitutional Convention of 1934, but it was rejected
by Delegate Jose P. Laurel, Chairman of the
Committee on the Bill of Rights, who forcefully argued
against it. He was sustained by the body. 10
The due process clause was kept intentionally vague
so it would remain also conveniently resilient. This
was felt necessary because due process is not, like
some provisions of the fundamental law, an "iron rule"
laying down an implacable and immutable command
for all seasons and all persons. Flexibility must be the
best virtue of the guaranty. The very elasticity of the
due process clause was meant to make it adapt easily
to every situation, enlarging or constricting its
protection as the changing times and circumstances
may require.
Aware of this, the courts have also hesitated to adopt
their own specific description of due process lest they
confine themselves in a legal straitjacket that will
deprive them of the elbow room they may need to
vary the meaning of the clause whenever indicated.
Instead, they have preferred to leave the import of the
protection open-ended, as it were, to be "gradually
ascertained by the process of inclusion and exclusion
in the course of the decision of cases as they
arise." 11 Thus, Justice Felix Frankfurter of the U.S.
Supreme Court, for example, would go no farther than
to define due process — and in so doing sums it all
up — as nothing more and nothing less than "the
embodiment of the sporting Idea of fair play." 12
When the barons of England extracted from their
sovereign liege the reluctant promise that that Crown
would thenceforth not proceed against the life liberty
or property of any of its subjects except by the lawful
judgment of his peers or the law of the land, they
thereby won for themselves and their progeny that
splendid guaranty of fairness that is now the hallmark
of the free society. The solemn vow that King John
made at Runnymede in 1215 has since then
resounded through the ages, as a ringing reminder to
all rulers, benevolent or base, that every person,
when confronted by the stern visage of the law, is
entitled to have his say in a fair and open hearing of
his cause.
The closed mind has no place in the open society. It
is part of the sporting Idea of fair play to hear "the
other side" before an opinion is formed or a decision
is made by those who sit in judgment. Obviously, one
side is only one-half of the question; the other half
must also be considered if an impartial verdict is to be
reached based on an informed appreciation of the
issues in contention. It is indispensable that the two
sides complement each other, as unto the bow the
arrow, in leading to the correct ruling after
examination of the problem not from one or the other
perspective only but in its totality. A judgment based
on less that this full appraisal, on the pretext that a
hearing is unnecessary or useless, is tainted with the
vice of bias or intolerance or ignorance, or worst of all,
in repressive regimes, the insolence of power.
The minimum requirements of due process are notice
and hearing 13 which, generally speaking, may not be
dispensed with because they are intended as a
safeguard against official arbitrariness. It is a
gratifying commentary on our judicial system that the
jurisprudence of this country is rich with applications
of this guaranty as proof of our fealty to the rule of law
and the ancient rudiments of fair play. We have
consistently declared that every person, faced by the
awesome power of the State, is entitled to "the law of
the land," which Daniel Webster described almost two
hundred years ago in the famous Dartmouth College
Case, 14 as "the law which hears before it condemns,
which proceeds upon inquiry and renders judgment
only after trial." It has to be so if the rights of every
person are to be secured beyond the reach of officials
who, out of mistaken zeal or plain arrogance, would
degrade the due process clause into a worn and
empty catchword.
This is not to say that notice and hearing are
imperative in every case for, to be sure, there are a
number of admitted exceptions. The conclusive
presumption, for example, bars the admission of
contrary evidence as long as such presumption is
based on human experience or there is a rational
connection between the fact proved and the fact
ultimately presumed therefrom. 15 There are
instances when the need for expeditions action will
justify omission of these requisites, as in the summary
abatement of a nuisance per se, like a mad dog on
the loose, which may be killed on sight because of the
immediate danger it poses to the safety and lives of
the people. Pornographic materials, contaminated
meat and narcotic drugs are inherently pernicious and
may be summarily destroyed. The passport of a
person sought for a criminal offense may be cancelled
without hearing, to compel his return to the country he
has fled. 16 Filthy restaurants may be summarily
padlocked in the interest of the public health and
bawdy houses to protect the public morals. 17 In such
instances, previous judicial hearing may be omitted
without violation of due process in view of the nature
of the property involved or the urgency of the need to
protect the general welfare from a clear and present
danger.
The protection of the general welfare is the particular
function of the police power which both restraints and
is restrained by due process. The police power is
simply defined as the power inherent in the State to
regulate liberty and property for the promotion of the
general welfare. 18 By reason of its function, it
extends to all the great public needs and is described
as the most pervasive, the least limitable and the
most demanding of the three inherent powers of the
State, far outpacing taxation and eminent domain.
The individual, as a member of society, is hemmed in
by the police power, which affects him even before he
is born and follows him still after he is dead — from
the womb to beyond the tomb — in practically
everything he does or owns. Its reach is virtually
limitless. It is a ubiquitous and often unwelcome
intrusion. Even so, as long as the activity or the
property has some relevance to the public welfare, its
regulation under the police power is not only proper
but necessary. And the justification is found in the
venerable Latin maxims, Salus populi est suprema
lex and Sic utere tuo ut alienum non laedas, which
call for the subordination of individual interests to the
benefit of the greater number.
It is this power that is now invoked by the government
to justify Executive Order No. 626-A, amending the
basic rule in Executive Order No. 626, prohibiting the
slaughter of carabaos except under certain
conditions. The original measure was issued for the
reason, as expressed in one of its Whereases, that
"present conditions demand that the carabaos and the
buffaloes be conserved for the benefit of the small
farmers who rely on them for energy needs." We
affirm at the outset the need for such a measure. In
the face of the worsening energy crisis and the
increased dependence of our farms on these
traditional beasts of burden, the government would
have been remiss, indeed, if it had not taken steps to
protect and preserve them.
A similar prohibition was challenged in United States
v. Toribio, 19 where a law regulating the registration,
branding and slaughter of large cattle was claimed to
be a deprivation of property without due process of
law. The defendant had been convicted thereunder
for having slaughtered his own carabao without the
required permit, and he appealed to the Supreme
Court. The conviction was affirmed. The law was
sustained as a valid police measure to prevent the
indiscriminate killing of carabaos, which were then
badly needed by farmers. An epidemic had stricken
many of these animals and the reduction of their
number had resulted in an acute decline in
agricultural output, which in turn had caused an
incipient famine. Furthermore, because of the scarcity
of the animals and the consequent increase in their
price, cattle-rustling had spread alarmingly,
necessitating more effective measures for the
registration and branding of these animals. The Court
held that the questioned statute was a valid exercise
of the police power and declared in part as follows:
To justify the State in thus interposing its authority in
behalf of the public, it must appear, first, that the
interests of the public generally, as distinguished from
those of a particular class, require such interference;
and second, that the means are reasonably
necessary for the accomplishment of the purpose,
and not unduly oppressive upon individuals. ...
From what has been said, we think it is clear that the
enactment of the provisions of the statute under
consideration was required by "the interests of the
public generally, as distinguished from those of a
particular class" and that the prohibition of the
slaughter of carabaos for human consumption, so
long as these animals are fit for agricultural work or
draft purposes was a "reasonably necessary"
limitation on private ownership, to protect the
community from the loss of the services of such
animals by their slaughter by improvident owners,
tempted either by greed of momentary gain, or by a
desire to enjoy the luxury of animal food, even when
by so doing the productive power of the community
may be measurably and dangerously affected.
In the light of the tests mentioned above, we hold with
the Toribio Case that the carabao, as the poor man's
tractor, so to speak, has a direct relevance to the
public welfare and so is a lawful subject of Executive
Order No. 626. The method chosen in the basic
measure is also reasonably necessary for the
purpose sought to be achieved and not unduly
oppressive upon individuals, again following the
above-cited doctrine. There is no doubt that by
banning the slaughter of these animals except where
they are at least seven years old if male and eleven
years old if female upon issuance of the necessary
permit, the executive order will be conserving those
still fit for farm work or breeding and preventing their
improvident depletion.
But while conceding that the amendatory measure
has the same lawful subject as the original executive
order, we cannot say with equal certainty that it
complies with the second requirement, viz., that there
be a lawful method. We note that to strengthen the
original measure, Executive Order No. 626-A imposes
an absolute ban not on the slaughter  of the carabaos
but on their movement, providing that "no carabao
regardless of age, sex, physical condition or purpose
(sic) and no carabeef shall be transported from one
province to another." The object of the prohibition
escapes us. The reasonable connection between the
means employed and the purpose sought to be
achieved by the questioned measure is missing
We do not see how the prohibition of the inter-
provincial transport of carabaos can prevent their
indiscriminate slaughter, considering that they can be
killed anywhere, with no less difficulty in one province
than in another. Obviously, retaining the carabaos in
one province will not prevent their slaughter there,
any more than moving them to another province will
make it easier to kill them there. As for the carabeef,
the prohibition is made to apply to it as otherwise, so
says executive order, it could be easily circumvented
by simply killing the animal. Perhaps so. However, if
the movement of the live animals for the purpose of
preventing their slaughter cannot be prohibited, it
should follow that there is no reason either to prohibit
their transfer as, not to be flippant dead meat.
Even if a reasonable relation between the means and
the end were to be assumed, we would still have to
reckon with the sanction that the measure applies for
violation of the prohibition. The penalty is outright
confiscation of the carabao or carabeef being
transported, to be meted out by the executive
authorities, usually the police only. In the Toribio
Case, the statute was sustained because the penalty
prescribed was fine and imprisonment, to be imposed
by the court after trial and conviction of the accused.
Under the challenged measure, significantly, no such
trial is prescribed, and the property being transported
is immediately impounded by the police and declared,
by the measure itself, as forfeited to the government.
In the instant case, the carabaos were arbitrarily
confiscated by the police station commander, were
returned to the petitioner only after he had filed a
complaint for recovery and given a supersedeas  bond
of P12,000.00, which was ordered confiscated upon
his failure to produce the carabaos when ordered by
the trial court. The executive order defined the
prohibition, convicted the petitioner and immediately
imposed punishment, which was carried out forthright.
The measure struck at once and pounced upon the
petitioner without giving him a chance to be heard,
thus denying him the centuries-old guaranty of
elementary fair play.
It has already been remarked that there are occasions
when notice and hearing may be validly dispensed
with notwithstanding the usual requirement for these
minimum guarantees of due process. It is also
conceded that summary action may be validly taken
in administrative proceedings as procedural due
process is not necessarily judicial only. 20 In the
exceptional cases accepted, however. there is a
justification for the omission of the right to a previous
hearing, to wit, the immediacy of the problem sought
to be corrected and the  urgency of the need to correct
it.
In the case before us, there was no such pressure of
time or action calling for the petitioner's peremptory
treatment. The properties involved were not even
inimical per se as to require their instant destruction.
There certainly was no reason why the offense
prohibited by the executive order should not have
been proved first in a court of justice, with the
accused being accorded all the rights safeguarded to
him under the Constitution. Considering that, as we
held in Pesigan v. Angeles, 21 Executive Order No.
626-A is penal in nature, the violation thereof should
have been pronounced not by the police only but by a
court of justice, which alone would have had the
authority to impose the prescribed penalty, and only
after trial and conviction of the accused.
We also mark, on top of all this, the questionable
manner of the disposition of the confiscated property
as prescribed in the questioned executive order. It is
there authorized that the seized property shall "be
distributed to charitable institutions and other similar
institutions as the Chairman of the National Meat
Inspection Commission may see fit, in the case of
carabeef, and to deserving farmers through dispersal
as the Director of Animal Industry may see fit, in the
case of carabaos." (Emphasis supplied.) The
phrase "may see fit" is an extremely generous and
dangerous condition, if condition it is. It is laden with
perilous opportunities for partiality and abuse, and
even corruption. One searches in vain for the usual
standard and the reasonable guidelines, or better still,
the limitations that the said officers must observe
when they make their distribution. There is none.
Their options are apparently boundless. Who shall be
the fortunate beneficiaries of their generosity and by
what criteria shall they be chosen? Only the officers
named can supply the answer, they and they alone
may choose the grantee as they see fit, and in their
own exclusive discretion. Definitely, there is here a
"roving commission," a wide and sweeping authority
that is not "canalized within banks that keep it from
overflowing," in short, a clearly profligate and
therefore invalid delegation of legislative powers.
To sum up then, we find that the challenged measure
is an invalid exercise of the police power because the
method employed to conserve the carabaos is not
reasonably necessary to the purpose of the law and,
worse, is unduly oppressive. Due process is violated
because the owner of the property confiscated is
denied the right to be heard in his defense and is
immediately condemned and punished. The
conferment on the administrative authorities of the
power to adjudge the guilt of the supposed offender is
a clear encroachment on judicial functions and
militates against the doctrine of separation of powers.
There is, finally, also an invalid delegation of
legislative powers to the officers mentioned therein
who are granted unlimited discretion in the distribution
of the properties arbitrarily taken. For these reasons,
we hereby declare Executive Order No. 626-A
unconstitutional.
We agree with the respondent court, however, that
the police station commander who confiscated the
petitioner's carabaos is not liable in damages for
enforcing the executive order in accordance with its
mandate. The law was at that time presumptively
valid, and it was his obligation, as a member of the
police, to enforce it. It would have been impertinent of
him, being a mere subordinate of the President, to
declare the executive order unconstitutional and, on
his own responsibility alone, refuse to execute it.
Even the trial court, in fact, and the Court of Appeals
itself did not feel they had the competence, for all their
superior authority, to question the order we now
annul.
The Court notes that if the petitioner had not seen fit
to assert and protect his rights as he saw them, this
case would never have reached us and the taking of
his property under the challenged measure would
have become a faitaccompli despite its invalidity. We
commend him for his spirit. Without the present
challenge, the matter would have ended in that pump
boat in Masbate and another violation of the
Constitution, for all its obviousness, would have been
perpetrated, allowed without protest, and soon
forgotten in the limbo of relinquished rights.

The strength of democracy lies not in the rights it

guarantees but in the courage of the people to invoke
them whenever they are ignored or violated. Rights
are but weapons on the wall if, like expensive
tapestry, all they do is embellish and impress. Rights,
as weapons, must be a promise of protection. They
become truly meaningful, and fulfill the role assigned
to them in the free society, if they are kept bright and
sharp with use by those who are not afraid to assert
them.

WHEREFORE, Executive Order No. 626-A is hereby

declared unconstitutional. Except as affirmed above,
the decision of the Court of Appeals is reversed.
The supersedeas bond is cancelled and the amount
thereof is ordered restored to the petitioner. No costs.

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Gutierrez,

Jr., Paras, Gancayco, Padilla Bidin Sarmiento and
Cortes, JJ., concur.

Melencio-Herrera and Feliciano, JJ., are on leave.

G.R. No. 182065               October 27, 2009

EVELYN ONGSUCO and ANTONIA

SALAYA, Petitioners, 
vs.
HON. MARIANO M. MALONES, both in his private
and official capacity as Mayor of the Municipality
of Maasin, Iloilo, Respondent.

DECISION

CHICO-NAZARIO, J.:

This is a Petition for Review on Certiorari under Rule

45 of the Rules of Court, assailing the Decision1 dated
28 November 2006, rendered by the Court of Appeals
in CA-G.R. SP No. 86182, which affirmed the
Decision2 dated 15 July 2003, of the Regional Trial
Court (RTC), Branch 39, of Iloilo City, in Civil Case
No. 25843, dismissing the special civil action for
Mandamus/Prohibition with Prayer for Issuance of a
Temporary Restraining Order and/or Writ of
Preliminary Injunction, filed by petitioners Evelyn
Ongsuco and Antonia Salaya against respondent
Mayor Mariano Malones of the Municipality of Maasin,
Iloilo.
Petitioners are stall holders at the Maasin Public
Market, which had just been newly renovated. In a
letter3 dated 6 August 1998, the Office of the
Municipal Mayor informed petitioners of a meeting
scheduled on 11 August 1998 concerning the
municipal public market. Revenue measures were
discussed during the said meeting, including the
increase in the rentals for the market stalls and the
imposition of "goodwill fees" in the amount of
₱20,000.00,4payable every month.
On 17 August 1998, the Sangguniang Bayan of
Maasin approved Municipal Ordinance No. 98-01,
entitled "The Municipal Revised Revenue Code." The
Code contained a provision for increased rentals for
the stalls and the imposition of goodwill fees in the
amount of ₱20,000.00 and ₱15,000.00 for stalls
located on the first and second floors of the municipal
public market, respectively. The same Code
authorized respondent to enter into lease contracts
over the said market stalls,5 and incorporated a
standard contract of lease for the stall holders at the
municipal public market.
Only a month later, on 18 September 1998,
the Sangguniang Bayan of Maasin approved
Resolution No. 68, series of 1998,6 moving to have
the meeting dated 11 August 1998 declared
inoperative as a public hearing, because majority of
the persons affected by the imposition of the goodwill
fee failed to agree to the said measure. However,
Resolution No. 68, series of 1998, of
the Sangguniang Bayan of Maasin was vetoed by
respondent on 30 September 1998.7
After Municipal Ordinance No. 98-01 was approved
on 17 August 1998, another purported public hearing
was held on 22 January 1999.8
On 9 June 1999, respondent wrote a letter to
petitioners informing them that they were occupying
stalls in the newly renovated municipal public market
without any lease contract, as a consequence of
which, the stalls were considered vacant and open for
qualified and interested applicants.9
This prompted petitioners, together with other
similarly situated stall holders at the municipal public
market,10 to file before the RTC on 25 June 1999 a
Petition for Prohibition/Mandamus, with Prayer for
Issuance of Temporary Restraining Order and/or Writ
of Preliminary Injunction,11 against respondent. The
Petition was docketed as Civil Case No. 25843.
Petitioners alleged that they were bona fide
occupants of the stalls at the municipal public market,
who had been religiously paying the monthly rentals
for the stalls they occupied.
Petitioners argued that public hearing was mandatory
in the imposition of goodwill fees. Section 186 of the
Local Government Code of 1991 provides that an
ordinance levying taxes, fees, or charges shall not be
enacted without any prior hearing conducted for the
purpose. Municipal Ordinance No. 98-01, imposing
goodwill fees, is invalid on the ground that the
conferences held on 11 August 1998 and 22 January
1999 could not be considered public hearings.
According to Article 277(b)(3) of the Implementing
Rules and Regulations of the Local Government
Code:
(3) The notice or notices shall specify the date or
dates and venue of the public hearing or hearings.
The initial public hearing shall be held not earlier than
ten (10) days from the sending out of the notice or
notices, or the last day of publication, or date of
posting thereof, whichever is later. (Emphasis ours.)
The letter from the Office of the Municipal Mayor was
sent to stall holders on 6 August 1998, informing the
latter of the meeting to be held, as was in fact held, on
11 August 1998, only five days after notice.12
Hence, petitioners prayed that respondent be
enjoined from imposing the goodwill fees pending the
determination of the reasonableness thereof, and
from barring petitioners from occupying the stalls at
the municipal public market and continuing with the
operation of their businesses.
Respondent, in answer, maintained that Municipal
Ordinance No. 98-01 is valid. He reasoned that
Municipal Ordinance No. 98-01 imposed goodwill fees
to raise income to pay for the loan obtained by the
Municipality of Maasin for the renovation of its public
market. Said ordinance is not per se a tax or revenue
measure, but involves the operation and management
of an economic enterprise of the Municipality of
Maasin as a local government unit; thus, there was no
mandatory requirement to hold a public hearing for
the enactment thereof. And, even granting that a
public hearing was required, respondent insisted that
public hearings take place on 11 August 1998 and 22
January 1999.
Respondent further averred that petitioners were
illegally occupying the market stalls, and the only way
petitioners could legitimize their occupancy of said
market stalls would be to execute lease contracts with
the Municipality of Maasin. While respondent admitted
that petitioners had been paying rentals for their
market stalls in the amount of ₱45.00 per month prior
to the renovation of the municipal public market,
respondent asserted that no rentals were paid or
collected from petitioners ever since the renovation
began.
Respondent sought from the RTC an award for moral
damages in the amount of not less than ₱500,000.00,
for the social humiliation and hurt feelings he suffered
by reason of the unjustified filing by petitioners of Civil
Case No. 25843; and an order for petitioners to
vacate the renovated market stalls and pay
reasonable rentals from the date they began to
occupy said stalls until they vacate the same. 13
The RTC subsequently rendered a Decision14 on 15
July 2003 dismissing the Petition in Civil Case No.
25843.
The RTC found that petitioners could not avail
themselves of the remedy of mandamus or
prohibition. It reasoned that mandamus would not lie
in this case where petitioners failed to show a clear
legal right to the use of the market stalls without
paying the goodwill fees imposed by the municipal
government. Prohibition likewise would not apply to
the present case where respondent’s acts, sought to
be enjoined, did not involve the exercise of judicial or
quasi-judicial functions.
The RTC also dismissed the Petition in Civil Case No.
25843 on the ground of non-exhaustion of
administrative remedies. Petitioners’ failure to
question the legality of Municipal Ordinance No. 98-
01 before the Secretary of Justice, as provided under
Section 187 of the Local Government
Code,15 rendered the Petition raising the very same
issue before the RTC premature.
The dispositive part of the RTC Decision dated 15
July 2003 reads:
WHEREFORE, in view of all the foregoing, and
finding the petition without merit, the same is, as it is
hereby ordered, dismissed. 16
On 12 August 2003, petitioners and their co-plaintiffs
filed a Motion for Reconsideration.17 The RTC denied
petitioners’ Motion for Reconsideration in a Resolution
dated 18 June 2004.18
While Civil Case No. 25843 was pending, respondent
filed before the 12th Municipal Circuit Trial Court
(MCTC) of Cabatuan-Maasin, Iloilo City a case in
behalf of the Municipality of Maasin against petitioner
Evelyn Ongsuco, entitled Municipality of Maasin v.
Ongsuco, a Complaint for Unlawful Detainer with
Damages, docketed as MCTC Civil Case No. 257. On
18 June 2002, the MCTC decided in favor of the
Municipality of Maasin and ordered petitioner
Ongsuco to vacate the market stalls she occupied,
Stall No. 1-03 and Stall No. 1-04, and to pay monthly
rentals in the amount of ₱350.00 for each stall from
October 2001 until she vacates the said market
stalls.19 On appeal, Branch 36 of the RTC of Maasin,
Iloilo City, promulgated a Decision, dated 29 April
2003, in a case docketed as Civil Case No. 02-27229
affirming the decision of the MCTC. A Writ of
Execution was issued by the MCTC on 8 December
2003.20
Petitioners, in their appeal before the Court of
Appeals, docketed as CA-G.R. SP No. 86182,
challenged the dismissal of their Petition for
Prohibition/Mandamus docketed as Civil Case No.
25843 by the RTC. Petitioners explained that they did
appeal the enactment of Municipal Ordinance No. 98-
01 before the Department of Justice, but their appeal
was not acted upon because of their failure to attach
a copy of said municipal ordinance. Petitioners
claimed that one of their fellow stall holders, Ritchelle
Mondejar, wrote a letter to the Officer-in-Charge
(OIC), Municipal Treasurer of Maasin, requesting a
copy of Municipal Ordinance No. 98-01, but received
no reply.21
In its Decision dated 28 November 2006 in CA-G.R.
SP No. 86182, the Court of Appeals again ruled in
respondent’s favor.
The Court of Appeals declared that the "goodwill fee"
was a form of revenue measure, which the
Municipality of Maasin was empowered to impose
under Section 186 of the Local Government Code.
Petitioners failed to establish any grave abuse of
discretion committed by respondent in enforcing
goodwill fees.
The Court of Appeals additionally held that even if
respondent acted in grave abuse of discretion,
petitioners’ resort to a petition for prohibition was
improper, since respondent’s acts in question herein
did not involve the exercise of judicial, quasi-judicial,
or ministerial functions, as required under Section 2,
Rule 65 of the Rules of Court. Also, the filing by
petitioners of the Petition for Prohibition/Mandamus
before the RTC was premature, as they failed to
exhaust administrative remedies prior thereto. The
appellate court did not give any weight to petitioners’
assertion that they filed an appeal challenging the
legality of Municipal Ordinance No. 98-01 before the
Secretary of Justice, as no proof was presented to
support the same.
In the end, the Court of Appeals decreed:
WHEREFORE, in view of the foregoing, this Court
finds the instant appeal bereft of merit. The assailed
decision dated July 15, 2003 as well as the
subsequent resolution dated 18 June 2004 are hereby
AFFIRMED and the instant appeal is hereby
DISMISSED. 22
Petitioners filed a Motion for Reconsideration23 of the
foregoing Decision, but it was denied by the Court of
Appeals in a Resolution24 dated 8 February 2008.
Hence, the present Petition, where petitioners raise
the following issues:
I
WHETHER OR NOT THE PETITIONERS HAVE
EXHAUSTED ADMINISTRATIVE REMEDIES
BEFORE FILING THE INSTANT CASE IN COURT;
II
WHETHER OR NOT EXHAUSTION OF
ADMINISTRATIVE REMEDIES IS APPLICABLE IN
THIS CASE; AND
III
WHETHER OR NOT THE APPELLEE MARIANO
MALONES WHO WAS THEN THE MUNICIPAL
MAYOR OF MAASIN, ILOILO HAS COMMITTED
GRAVE ABUSE OF DISCRETION.25
After a close scrutiny of the circumstances that gave
rise to this case, the Court determines that there is no
need for petitioners to exhaust administrative
remedies before resorting to the courts.
The findings of both the RTC and the Court of
Appeals that petitioners’ Petition for
Prohibition/Mandamus in Civil Case No. 25843 was
premature is anchored on Section 187 of the Local
Government Code, which reads:
Section 187. Procedure for Approval and Effectivity of
Tax Ordinances and Revenue Measures; Mandatory
Public Hearings.—The procedure for approval of local
tax ordinances and revenue measures shall be in
accordance with the provisions of this Code:
Provided, That public hearings shall be conducted for
the purpose prior to the enactment thereof: Provided,
further, That any question on the constitutionality or
legality of tax ordinances or revenue measures may
be raised on appeal within thirty (30) days from the
effectivity thereof to the Secretary of Justice who shall
render a decision within sixty (60) days from the date
of receipt of the appeal: Provided, however, That such
appeal shall not have the effect of suspending the
effectivity of the ordinance and the accrual and
payment of the tax, fee, or charge levied therein:
Provided, finally, That within thirty (30) days after
receipt of the decision or the lapse of the sixty-day
period without the Secretary of Justice acting upon
the appeal, the aggrieved party may file appropriate
proceedings with a court of competent jurisdiction.
(Emphasis ours.)
It is true that the general rule is that before a party is
allowed to seek the intervention of the court, he or
she should have availed himself or herself of all the
means of administrative processes afforded him or
her. Hence, if resort to a remedy within the
administrative machinery can still be made by giving
the administrative officer concerned every opportunity
to decide on a matter that comes within his or her
jurisdiction, then such remedy should be exhausted
first before the court’s judicial power can be sought.
The premature invocation of the intervention of the
court is fatal to one’s cause of action. The doctrine of
exhaustion of administrative remedies is based on
practical and legal reasons. The availment of
administrative remedy entails lesser expenses and
provides for a speedier disposition of controversies.
Furthermore, the courts of justice, for reasons of
comity and convenience, will shy away from a dispute
until the system of administrative redress has been
completed and complied with, so as to give the
administrative agency concerned every opportunity to
correct its error and dispose of the case. However,
there are several exceptions to this rule. 26
The rule on the exhaustion of administrative remedies
is intended to preclude a court from arrogating unto
itself the authority to resolve a controversy, the
jurisdiction over which is initially lodged with an
administrative body of special competence. Thus, a
case where the issue raised is a purely legal question,
well within the competence; and the jurisdiction of the
court and not the administrative agency, would clearly
constitute an exception.27 Resolving questions of law,
which involve the interpretation and application of
laws, constitutes essentially an exercise of judicial
power that is exclusively allocated to the Supreme
Court and such lower courts the Legislature may
establish. 28
In this case, the parties are not disputing any factual
matter on which they still need to present evidence.
The sole issue petitioners raised before the RTC in
Civil Case No. 25843 was whether Municipal
Ordinance No. 98-01 was valid and enforceable
despite the absence, prior to its enactment, of a public
hearing held in accordance with Article 276 of the
Implementing Rules and Regulations of the Local
Government Code. This is undoubtedly a pure
question of law, within the competence and
jurisdiction of the RTC to resolve.
Paragraph 2(a) of Section 5, Article VIII of the
Constitution, expressly establishes the appellate
jurisdiction of this Court, and impliedly recognizes the
original jurisdiction of lower courts over cases
involving the constitutionality or validity of an
ordinance:
Section 5. The Supreme Court shall have the
following powers:
xxxx
(2) Review, revise, reverse, modify or affirm on
appeal or certiorari, as the law or the Rules of Court
may provide, final judgments and orders of lower
courts in:
(a) All cases in which the constitutionality or validity of
any treaty, international or executive agreement, law,
presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question. (Emphases
ours.)
In J.M. Tuason and Co., Inc. v. Court of
Appeals,29 Ynot v. Intermediate Appellate Court,30 and
Commissioner of Internal Revenue v. Santos,31 the
Court has affirmed the jurisdiction of the RTC to
resolve questions of constitutionality and validity of
laws (deemed to include local ordinances) in the first
instance, without deciding questions which pertain to
legislative policy.
Although not raised in the Petition at bar, the Court is
compelled to discuss another procedural issue,
specifically, the declaration by the RTC, and affirmed
by the Court of Appeals, that petitioners availed
themselves of the wrong remedy in filing a Petition for
Prohibition/Mandamus before the RTC.
Sections 2 and 3, Rule 65 of the Rules of the Rules of
Court lay down under what circumstances petitions
for prohibition and mandamus may be filed, to wit:
SEC. 2. Petition for prohibition. – When the
proceedings of any tribunal, corporation, board, officer
or person, whether exercising judicial, quasi-judicial or
ministerial functions, are 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 or any other 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 commanding the
respondent to desist from further proceedings in the
action or matter specified therein, or otherwise
granting such incidental reliefs as law and justice may
require.
SEC. 3. Petition for mandamus. – When any tribunal,
corporation, board, officer or person unlawfully
neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office,
trust, or station, or unlawfully excludes another from
the use and enjoyment of a right or office to which
such other is entitled, and there is no other plain,
speedy and adequate remedy in the ordinary course
of law, the person aggrieved thereby may file a
verified petition in the proper court, alleging the facts
with certainty and praying that judgment be rendered
commanding the respondent, immediately or at some
other time to be specified by the court, to do the act
required to be done to protect the rights of the
petitioner, and to pay the damages sustained by the
petitioner by reason of the wrongful acts of the
respondent. (Emphases ours.)
In a petition for prohibition against any tribunal,
corporation, board, or person -- whether exercising
judicial, quasi-judicial, or ministerial functions -- who
has acted without or in excess of jurisdiction or with
grave abuse of discretion, the petitioner prays that
judgment be rendered, commanding the
respondent to desist from further proceeding in the
action or matter specified in the petition.32 On the
other hand, the remedy of mandamus lies to
compelperformance of a ministerial duty.33 The
petitioner for such a writ should have a well-defined,
clear and certain legal right to the performance of the
act, and it must be the clear and imperative duty of
respondent to do the act required to be done.34
In this case, petitioners’ primary intention is to prevent
respondent from implementing Municipal Ordinance
No. 98-01, i.e., by collecting the goodwill fees from
petitioners and barring them from occupying the stalls
at the municipal public market. Obviously, the writ
petitioners seek is more in the nature of prohibition
(commanding desistance), rather than mandamus
(compelling performance).
For a writ of prohibition, the requisites are: (1) the
impugned act must be that of a "tribunal, corporation,
board, officer, or person, whether exercising judicial,
quasi-judicial or ministerial functions"; and (2) there is
no plain, speedy, and adequate remedy in the
ordinary course of law."35
The exercise of judicial function consists of the power
to determine what the law is and what the legal rights
of the parties are, and then to adjudicate upon the
rights of the parties. The term quasi-judicial function
applies to the action and discretion of public
administrative officers or bodies that are required to
investigate facts or ascertain the existence of facts,
hold hearings, and draw conclusions from them as a
basis for their official action and to exercise discretion
of a judicial nature. In implementing Municipal
Ordinance No. 98-01, respondent is not called upon
to adjudicate the rights of contending parties or to
exercise, in any manner, discretion of a judicial
nature.
A ministerial function is one that an officer or tribunal
performs in the context of a given set of facts, in a
prescribed manner and without regard for the
exercise of his or its own judgment, upon the propriety
or impropriety of the act done.36
The Court holds that respondent herein is performing
a ministerial function.
It bears to emphasize that Municipal Ordinance No.
98-01 enjoys the presumption of validity, unless
declared otherwise. Respondent has the duty to carry
out the provisions of the ordinance under Section 444
of the Local Government Code:
Section 444. The Chief Executive: Powers, Duties,
Functions and Compensation. – (a) The Municipal
mayor, as the chief executive of the municipal
government, shall exercise such powers and perform
such duties and functions as provided by this Code
and other laws.
(b) For efficient, effective and economical governance
the purpose of which is the general welfare of the
municipality and its inhabitants pursuant to Section 16
of this Code, the Municipal mayor shall:
xxxx
(2) Enforce all laws and ordinances relative to the
governance of the municipality and the exercise of its
corporate powers provided for under Section 22 of
this Code, implement all approved policies, programs,
projects, services and activities of the municipality x x
x.
xxxx
(3) Initiate and maximize the generation of resources
and revenues, and apply the same to the
implementation of development plans, program
objectives sand priorities as provided for under
Section 18 of this Code, particularly those resources
and revenues programmed for agro-industrial
development and country-wide growth and progress,
and relative thereto, shall:
xxxx
(iii) Ensure that all taxes and other revenues of the
municipality are collected, and that municipal funds
are applied in accordance with law or ordinance to the
payment of expenses and settlement of obligations of
the municipality; x x x. (Emphasis ours.)
Municipal Ordinance No. 98-01 imposes increased
rentals and goodwill fees on stall holders at the
renovated municipal public market, leaving
respondent, or the municipal treasurer acting as his
alter ego, no discretion on whether or not to collect
the said rentals and fees from the stall holders, or
whether or to collect the same in the amounts fixed by
the ordinance.
The Court further notes that respondent already
deemed petitioners’ stalls at the municipal public
market vacated. Without such stalls, petitioners would
be unable to conduct their businesses, thus, depriving
them of their means of livelihood. It is imperative on
petitioners’ part to have the implementation of
Municipal Ordinance No. 98-01 by respondent
stopped the soonest. As this Court has established in
its previous discussion, there is no more need for
petitioners to exhaust administrative remedies,
considering that the fundamental issue between them
and respondent is one of law, over which the courts
have competence and jurisdiction. There is no other
plain, speedy, and adequate remedy for petitioners in
the ordinary course of law, except to seek from the
courts the issuance of a writ of prohibition
commanding respondent to desist from continuing to
implement what is allegedly an invalid ordinance.1 a
vv p h i 1
This brings the Court to the substantive issue in this
Petition on the validity of Municipal Ordinance N. 98-
01.
Respondent maintains that the imposition of goodwill
fees upon stall holders at the municipal public market
is not a revenue measure that requires a prior public
hearing. Rentals and other consideration for
occupancy of the stalls at the municipal public market
are not matters of taxation.
Respondent’s argument is specious.
Article 219 of the Local Government Code provides
that a local government unit exercising its power to
impose taxes, fees and charges should comply with
the requirements set in Rule XXX, entitled "Local
Government Taxation":
Article 219. Power to Create Sources of Revenue.—
Consistent with the basic policy of local autonomy,
each LGU shall exercise its power to create its own
sources of revenue and to levy taxes, fees, or
charges, subject to the provisions of this Rule. Such
taxes, fees, or charges shall accrue exclusively to the
LGU. (Emphasis ours.)
Article 221(g) of the Local Government Code of 1991
defines "charges" as:
Article 221. Definition of Terms.
xxxx
(g) Charges refer to pecuniary liability, as rents or
fees against persons or property. (Emphasis ours.)
Evidently, the revenues of a local government unit do
not consist of taxes alone, but also other fees and
charges. And rentals and goodwill fees, imposed by
Municipal Ordinance No. 98-01 for the occupancy of
the stalls at the municipal public market, fall under the
definition of charges.
For the valid enactment of ordinances imposing
charges, certain legal requisites must be met. Section
186 of the Local Government Code identifies such
requisites as follows:
Section 186. Power to Levy Other Taxes, Fees or
Charges.—Local government units may exercise the
power to levy taxes, fees or charges on any base or
subject not otherwise specifically enumerated herein
or taxed under the provisions of the National Internal
Revenue Code, as amended, or other applicable
laws: Provided, That the taxes, fees or charges shall
not be unjust, excessive, oppressive, confiscatory or
contrary to declared national policy: Provided, further,
That the ordinance levying such taxes, fees or
charges shall not be enacted without any prior public
hearing conducted for the purpose. (Emphasis ours.)
Section 277 of the Implementing Rules and
Regulations of the Local Government Code
establishes in detail the procedure for the enactment
of such an ordinance, relevant provisions of which are
reproduced below:
Section 277. Publication of Tax Ordinance and
Revenue Measures.—x x x.
xxxx
(b) The conduct of public hearings shall be governed
by the following procedure:
xxxx
(2) In addition to the requirement for publication or
posting, the sanggunian concerned shall cause the
sending of written notices of the proposed ordinance,
enclosing a copy thereof, to the interested or affected
parties operating or doing business within the
territorial jurisdiction of the LGU concerned.
(3) The notice or notices shall specify the date or
dates and venue of the public hearing or hearings.
The initial public hearing shall be held not earlier than
ten (10) days from the sending out of the notice or
notices, or the last day of publication, or date of
posting thereof, whichever is later;
xxxx
(c) No tax ordinance or revenue measure shall be
enacted or approved in the absence of a public
hearing duly conducted in the manner provided under
this Article. (Emphases ours.)
It is categorical, therefore, that a public hearing be
held prior to the enactment of an ordinance levying
taxes, fees, or charges; and that such public hearing
be conducted as provided under Section 277 of the
Implementing Rules and Regulations of the Local
Government Code.
There is no dispute herein that the notices sent to
petitioners and other stall holders at the municipal
public market were sent out on 6 August 1998,
informing them of the supposed "public hearing" to be
held on 11 August 1998. Even assuming that
petitioners received their notice also on 6 August
1998, the "public hearing" was already scheduled,
and actually conducted, only five days later, on 11
August 1998. This contravenes Article 277(b)(3) of
the Implementing Rules and Regulations of the Local
Government Code which requires that the public
hearing be held no less than ten days from the time
the notices were sent out, posted, or published.
When the Sangguniang Bayan of Maasin sought to
correct this procedural defect through Resolution No.
68, series of 1998, dated 18 September 1998,
respondent vetoed the said resolution. Although the
Sangguniang Bayan may have had the power to
override respondent’s veto,37 it no longer did so.
The defect in the enactment of Municipal Ordinance Chairperson Associate Justice
No. 98 was not cured when another public hearing
was held on 22 January 1999, after the questioned ROBERTO A. ABAD**
ordinance was passed by the Sangguniang Bayan Associate Justice
and approved by respondent on 17 August 1998.
Section 186 of the Local Government Code ATTESTATION
prescribes that the public hearing be held prior to the
I attest that the conclusions in the above Decision
enactment by a local government unit of an ordinance
were reached in consultation before the case was
levying taxes, fees, and charges.
assigned to the writer of the opinion of the Court’s
Since no public hearing had been duly conducted Division.
prior to the enactment of Municipal Ordinance No. 98-
ANTONIO T. CARPIO
01, said ordinance is void and cannot be given any
Associate Justice
effect. Consequently, a void and ineffective ordinance
Chairperson, Third Division
could not have conferred upon respondent the
jurisdiction to order petitioners’ stalls at the municipal CERTIFICATION
public market vacant.
Pursuant to Section 13, Article VIII of the Constitution,
IN VIEW OF THE FOREGOING, the instant Petition is and the Division Chairperson’s Attestation, it is hereby
GRANTED. The assailed Decision dated 28 certified that the conclusions in the above Decision
November 2006 of the Court of Appeals in CA-G.R. were reached in consultation before the case was
SP No. 86182 is REVERSED and SET ASIDE. assigned to the writer of the opinion of the Court’s
Municipal Ordinance No. 98-01 is DECLARED void Division.
and ineffective, and a writ of prohibition is ISSUED
commanding the Mayor of the Municipality of Maasin, REYNATO S. PUNO
Iloilo, to permanently desist from enforcing the said Chief Justice
ordinance. Petitioners are also DECLARED as lawful G.R. No. L-23127 April 29, 1971
occupants of the market stalls they occupied at the
time they filed the Petition for Mandamus/Prohibition FRANCISCO SERRANO DE AGBAYANI, plaintiff-
docketed as Civil Case No. 25843. In the event that appellee, 
they were deprived of possession of the said market vs.
stalls, petitioners are entitled to recover possession of PHILIPPINE NATIONAL BANK and THE
these stalls. PROVINCIAL SHERIFF OF PANGASINAN,
defendants, PHILIPPINE NATIONAL
SO ORDERED. BANK, defendant-appellant.

MINITA V. CHICO-NAZARIO Dionisio E. Moya for plaintiff-appellee.

Associate Justice
Ramon B. de los Reyes for defendant-appellant.
WE CONCUR:

LEONARDO A. QUISUMBING*
Associate Justice FERNANDO, J.:

ANTONIO T. CARPIO DIOSDADO M. A correct appreciation of the controlling doctrine as to

Associate Justice PERALTA the effect, if any, to be attached to a statute
subsequently adjudged invalid, is decisive of this
appeal from a lower court decision. Plaintiff Francisco
Serrano de Agbayani, now appellee, was able to
obtain a favorable judgment in her suit against
defendant, now appellant Philippine National Bank,
permanently enjoining the other defendant, the
Provincial Sheriff of Pangasinan, from proceeding
with an extra-judicial foreclosure sale of land
belonging to plaintiff mortgaged to appellant Bank to
secure a loan declared no longer enforceable, the
prescriptive period having lapsed. There was thus a
failure to sustain the defense raised by appellant that
if the moratorium under an Executive Order and later
an Act subsequently found unconstitutional were to be
counted in the computation, then the right to foreclose
the mortgage was still subsisting. In arriving at such a
conclusion, the lower court manifested a tenacious
adherence to the inflexible view that an
unconstitutional act is not a law, creating no rights
and imposing no duties, and thus as inoperative as if
it had never been. It was oblivious to the force of the
principle adopted by this Court that while a statute's
repugnancy to the fundamental law deprives it of its
character as a juridical norm, its having been
operative prior to its being nullified is a fact that is not
devoid of legal consequences. As will hereafter be
explained, such a failing of the lower court resulted in
an erroneous decision. We find for appellant
Philippine National Bank, and we reverse.
There is no dispute as to the facts. Plaintiff obtained
the loan in the amount of P450.00 from defendant
Bank dated July 19, 1939, maturing on July 19, 1944,
secured by real estate mortgage duly registered
covering property described in T.C.T. No. 11275 of
the province of Pangasinan. As of November 27,
1959, the balance due on said loan was in the amount
of P1,294.00. As early as July 13 of the same year,
defendant instituted extra-judicial foreclosure
proceedings in the office of defendant Provincial
Sheriff of Pangasinan for the recovery of the balance
of the loan remaining unpaid. Plaintiff countered with
his suit against both defendants on August 10, 1959,
her main allegation being that the mortgage sought to
be foreclosed had long prescribed, fifteen years
having elapsed from the date of maturity, July 19,
1944. She sought and was able to obtain a writ of
preliminary injunction against defendant Provincial
Sheriff, which was made permanent in the decision
now on appeal. Defendant Bank in its answer prayed
for the dismissal of the suit as even on plaintiff's own
theory the defense of prescription would not be
available if the period from March 10, 1945, when
Executive Order No. 321 was issued, to July 26, 1948,
when the subsequent legislative act2 extending the
period of moratorium was declared invalid, were to be
deducted from the computation of the time during
which the bank took no legal steps for the recovery of
the loan. As noted, the lower court did not find such
contention persuasive and decided the suit in favor of
plaintiff.
Hence this appeal, which, as made clear at the
outset, possesses merit, there being a failure on the
part of the lower court to adhere to the applicable
constitutional doctrine as to the effect to be given to a
statute subsequently declared invalid.
1. The decision now on appeal reflects the orthodox
view that an unconstitutional act, for that matter an
executive order or a municipal ordinance likewise
suffering from that infirmity, cannot be the source of
any legal rights or duties. Nor can it justify any official
act taken under it. Its repugnancy to the fundamental
law once judicially declared results in its being to all
intents and purposes a mere scrap of paper. As the
new Civil Code puts it: "When the courts declare a law
to be inconsistent with the Constitution, the former
shall be void and the latter shall govern.
Administrative or executive acts, orders and
regulations shall be valid only when they are not
contrary to the laws of the Constitution.3 It is
understandable why it should be so, the Constitution
being supreme and paramount. Any legislative or
executive act contrary to its terms cannot survive.
Such a view has support in logic and possesses the
merit of simplicity. It may not however be sufficiently
realistic. It does not admit of doubt that prior to the
declaration of nullity such challenged legislative or
executive act must have been in force and had to be
complied with. This is so as until after the judiciary, in
an appropriate case, declares its invalidity, it is
entitled to obedience and respect. Parties may have
acted under it and may have changed their positions.
What could be more fitting than that in a subsequent
litigation regard be had to what has been done while
such legislative or executive act was in operation and
presumed to be valid in all respects. It is now
accepted as a doctrine that prior to its being nullified,
its existence as a fact must be reckoned with. This is
merely to reflect awareness that precisely because
the judiciary is the governmental organ which has the
final say on whether or not a legislative or executive
measure is valid, a period of time may have elapsed
before it can exercise the power of judicial review that
may lead to a declaration of nullity. It would be to
deprive the law of its quality of fairness and justice
then, if there be no recognition of what had transpired
prior to such adjudication.
In the language of an American Supreme Court
decision: "The actual existence of a statute, prior to
such a determination [of unconstitutionality], is an
operative fact and may have consequences which
cannot justly be ignored. The past cannot always be
erased by a new judicial declaration. The effect of the
subsequent ruling as to invalidity may have to be
considered in various aspects, with respect to
particular relations, individual and corporate, and
particular conduct, private and official."4 This
language has been quoted with approval in a
resolution in Araneta v. Hill5 and the decision
in Manila Motor Co., Inc. v. Flores.6 An even more
recent instance is the opinion of Justice Zaldivar
speaking for the Court in Fernandez v. Cuerva and
Co.7
2. Such an approach all the more commends itself
whenever police power legislation intended to
promote public welfare but adversely affecting
property rights is involved. While subject to be
assailed on due process, equal protection and non-
impairment grounds, all that is required to avoid the
corrosion of invalidity is that the rational basis or
reasonableness test is satisfied. The legislature on
the whole is not likely to allow an enactment suffering,
to paraphrase Cardozo, from the infirmity of out
running the bounds of reason and resulting in sheer
oppression. It may be of course that if challenged, an
adverse judgment could be the result, as its running
counter to the Constitution could still be shown. In the
meanwhile though, in the normal course of things, it
has been acted upon by the public and accepted as
valid. To ignore such a fact would indeed be the
fruitful parent of injustice. Moreover, as its
constitutionality is conditioned on its being fair or
reasonable, which in turn is dependent on the actual
situation, never static but subject to change, a
measure valid when enacted may subsequently, due
to altered circumstances, be stricken down.
That is precisely what happened in connection with
Republic Act No. 342, the moratorium legislation,
which continued Executive Order No. 32, issued by
the then President Osmeña, suspending the
enforcement of payment of all debts and other
monetary obligations payable by war sufferers. So it
was explicitly held in Rutter v. Esteban8where such
enactment was considered in 1953 "unreasonable
and oppressive, and should not be prolonged a
minute longer, and, therefore, the same should be
declared null and void and without effect."9 At the time
of the issuance of the above Executive Order in 1945
and of the passage of such Act in 1948, there was a
factual justification for the moratorium. The
Philippines was confronted with an emergency of
impressive magnitude at the time of her liberation
from the Japanese military forces in 1945. Business
was at a standstill. Her economy lay prostrate.
Measures, radical measures, were then devised to
tide her over until some semblance of normalcy could
be restored and an improvement in her economy
noted. No wonder then that the suspension of
enforcement of payment of the obligations then
existing was declared first by executive order and
then by legislation. The Supreme Court was right
therefore in rejecting the contention that on its face,
the Moratorium Law was unconstitutional, amounting
as it did to the impairment of the obligation of
contracts. Considering the circumstances confronting
the legitimate government upon its return to the
Philippines, some such remedial device was needed
and badly so. An unyielding insistence then on the
rights to property on the part of the creditors was not
likely to meet with judicial sympathy. Time passed
however, and conditions did change.
When the legislation was before this Court in 1953,
the question before it was its satisfying the rational
basis test, not as of the time of its enactment but as of
such date. Clearly, if then it were found unreasonable,
the right to non-impairment of contractual obligations
must prevail over the assertion of community power to
remedy an existing evil. The Supreme Court was
convinced that such indeed was the case. As stated
in the opinion of Justice Bautista Angelo: "But we
should not lose sight of the fact that these obligations
had been pending since 1945 as a result of the
issuance of Executive Orders Nos. 25 and 32 and at
present their enforcement is still inhibited because of
the enactment of Republic Act No. 342 and would
continue to be unenforceable during the eight-year
period granted to prewar debtors to afford them an
opportunity to rehabilitate themselves, which in plain
language means that the creditors would have to
observe a vigil of at least twelve (12) years before
they could affect a liquidation of their investment
dating as far back as 1941. This period seems to us
unreasonable, if not oppressive. While the purpose of
Congress is plausible, and should be commended,
the relief accorded works injustice to creditors who
are practically left at the mercy of the debtors. Their
hope to effect collection becomes extremely remote,
more so if the credits are unsecured. And the injustice
is more patent when, under the law the debtor is not
even required to pay interest during the operation of
the relief, unlike similar statutes in the United
States. 10 The conclusion to which the foregoing
considerations inevitably led was that as of the time of
adjudication, it was apparent that Republic Act No.
342 could not survive the test of validity. Executive
Order No. 32 should likewise be nullified. That before
the decision they were not constitutionally infirm was
admitted expressly. There is all the more reason then
to yield assent to the now prevailing principle that the
existence of a statute or executive order prior to its
being adjudged void is an operative fact to which legal
consequences are attached.
3. Precisely though because of the judicial recognition
that moratorium was a valid governmental response
to the plight of the debtors who were war sufferers,
this Court has made clear its view in a series of cases
impressive in their number and unanimity that during
the eight-year period that Executive Order No. 32 and
Republic Act No. 342 were in force, prescription did
not run. So it has been held from Day v. Court of
First 
Instance, 11 decided in 1954, to Republic v.
Hernaez, 12 handed down only last year. What is
deplorable is that as of the time of the lower court
decision on January 27, 1960, at least eight decisions
had left no doubt as to the prescriptive period being
tolled in the meanwhile prior to such adjudication of
invalidity. 13 Speaking of the opposite view entertained
by the lower court, the present Chief Justice, in Liboro
v. Finance and Mining Investments Corp. 14has
categorized it as having been "explicitly and
consistently rejected by this Court." 15
The error of the lower court in sustaining plaintiff's suit
is thus manifest. From July 19, 1944, when her loan
matured, to July 13, 1959, when extra-judicial
foreclosure proceedings were started by appellant
Bank, the time consumed is six days short of fifteen
years. The prescriptive period was tolled however,
from March 10, 1945, the effectivity of Executive
Order No. 32, to May 18, 1953, when the decision
of Rutter v. Esteban was promulgated, covering eight
years, two months and eight days. Obviously then,
when resort was had extra-judicially to the foreclosure
of the mortgage obligation, there was time to spare
before prescription could be availed of as a defense.
WHEREFORE, the decision of January 27, 1960 is
reversed and the suit of plaintiff filed August 10, 1959
dismissed. No costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal,
Zaldivar, Castro, Teehankee, Barredo, Villamor, and
Makasiar, JJ., concur.
 
Footnotes
1 Under Executive Order No. 32 providing for a debt
moratorium, it was specifically stated: "Enforcement of
payment of all debts and other monetary obligations
payable within the Philippines, except debts and other
monetary obligations entered into in any area after
declaration by Presidential Proclamation that such
area has been freed from enemy occupation and
control, is temporarily suspended pending action by
the Commonwealth Government." Executive Order
No. 32 was issued on March 10, 1945. Executive
Order No. 32 amended Executive Order No. 25
(1944).
2 According to the declaration of policy in Republic
Act No. 342 (1948), Executive Order No. 32 remains
in full force and effect for the war sufferers as for them
the emergency created by the last war was still
existent. Then came this specific provision: "All debts
and other monetary obligations payable by private
parties within the Philippines originally incurred or
contracted before December 8, 1941, and still
remaining unpaid, any provision or provisions in the
contract creating the same or in any subsequent
agreement affecting such obligation to the contrary
notwithstanding, shall not be due and demandable for
a period of eight (8) years from and after settlement of
the war damage claim of the debtor by the United
States Philippine War Damage Commission, without
prejudice, however, to any voluntary agreement which
the interested parties may enter into after the
approval of this Act for the settlement of said
obligations."  12 L-24137, January 30, 1970, 31 SCRA 219, citing
Sec. 2.
3 ART. 7. In the classic language of Justice Field: "An
unconstitutional Act is not a law; it confers no rights; it
imposes no duties; it affords no protection; it creates
no office; it is in legal contemplation as inoperative as
though it had never been." Norton v. Shelly County, 13 Day v. Court of First Instance of Tarlac, 94 Phil.
118 US 425 (1886). 816 (1954); Montilla v. Pacific Commercial Company,
98 Phil. 133 (1955); Pacific Commercial Co. v.
4 Chicot County Drainage Dist. v. Baxter States Bank Aquino, 100 Phil. 961 (1957); Bachrach Motor Co.,
308 US 371, 374 (1940). Inc. v. Chua Tua Tian 101 Phil. 184 (1957); Liboro v.
Finance and Mining Investment Corp., 102 Phil. 489
5 93 Phil. 1002 (1953). (1957); Rio y Compania v. Jolkipli, 105 Phil. 447
(1959); People v. Jollifee, 105 Phil. 677 (1959) ; Uy
6 99 Phil. 738 (1956).
Hoo & Co., Inc. v. Tan, 105 Phil. 716 (1959).
7 L-21114, Nov. 28, 1967, 21 SCRA 1095.
14 102 Phil. 489 (1957).
8 93 Phil. 68 (1953). Rutter v. Esteban was
15 Ibid., p. 493.
subsequently cited in the following cases: Araneta v.
Hill, 93 Phil. 1002 (1953); Londres v. National Life
Insurance Co., 94 Phil. 627 (1954); Dizon v. Ocampo,
94 Phil. 803 (1954); De Leon v. Ibañez, 95 Phil. 119
(1954); Picornell and Co. v. Cordovan 95 Phil. 632
(1954); Berg v. Teus, 96 Phil. 102 (1954); Herrera v.
Arellano, 97 Phil. 776 (1955); Chua Lamko v. Dioso,
97 Phil. 821 (1955); Rio y Cia v. Sandoval, 100 Phil.
407 (1956); Gonzaga v. Rehabilitation Finance Corp.,
100 Phil. 892 (1957); Pacific Commercial Co. v.
Aquino, 100 Phil. 961 (1957); Bachrach motor Co.,
Inc. v. Chua Tua Hian, 101 Phil. 194 (1957); Liboro v.
Finance and Mining Investment Corp., 102 Phil. 489 G.R. No. 104732 June 22, 1993
1957); Rio y Compania v. Jolkipli 105 Phil. 447
(1959); People v. Jolliffe 105 Phil. 677 (1959); Uy Hoo ROBERTO A. FLORES, DANIEL Y. FIGUEROA,
and Co., Inc. v. Tan, 105 Phil. 717 (1959); Compania ROGELIO T. PALO, DOMINGO A. JADLOC,
Maritima v. Court of Appeals and Libby, McNeill and CARLITO T. CRUZ and MANUEL P.
Libby (Phil.), Inc., 108 Phil. 469 (1960). REYES, Petitioner, vs. HON. FRANKLIN M. DRILON,
Executive Secretary, and RICHARD J.
9 Ibid., p. 82. The same conclusion obtains in the GORDON, Respondents.
opinion of the Court as regards Executive Order No.
32. Isagani M. Jungco, Valeriano S. Peralta, Miguel
Famularcano, Jr. and Virgilio E. Acierto for
10 Ibid., p. 77. petitioners.
11 94 Phil. 816.
BELLOSILLO, J.:
The constitutionality of Sec. 13, par. (d), of R.A.
Republic v. Grijaldo, L-20240, December 31, 1965, 15 7227, 1otherwise known as the "Bases Conversion
SCRA 681; Republic v. Rodriguez, L-18967, January and Development Act of 1992," under which
31, 1966, 16 SCRA 53; Nielson and Co., Inc. v.
respondent Mayor Richard J. Gordon of Olongapo
Lepanto Consolidated Mining Co., L-21601, City was appointed Chairman and Chief Executive
December 28, 1968, 26 SCRA 540.
Officer of the Subic Bay Metropolitan Authority
(SBMA), is challenged in this original petition with
prayer for prohibition, preliminary injunction and
temporary restraining order "to prevent useless and
unnecessary expenditures of public funds by way of
salaries and other operational expenses attached to
the office . . . ." 2Paragraph (d) reads -
(d) Chairman administrator  - The President shall
appoint a professional manager as administrator of
the Subic Authority with a compensation to be
determined by the Board subject to the approval of
the Secretary of Budget, who shall be the ex
oficio  chairman of the Board and who shall serve as
the chief executive officer of the Subic
Authority: Provided, however, That for the first year of
its operations from the effectivity of this Act, the
mayor of the City of Olongapo shall be appointed as
the chairman and chief executive officer of the Subic
Authority (emphasis supplied).
Petitioners, who claim to be taxpayers, employees of
the U.S. Facility at the Subic, Zambales, and officers
and members of the Filipino Civilian Employees
Association in U.S. Facilities in the Philippines,
maintain that the proviso in par. (d) of Sec. 13 herein-
above quoted in italics infringes on the following
constitutional and statutory provisions: (a) Sec. 7, first
par., Art. IX-B, of the Constitution, which states that
"[n]o elective official shall be eligible for appointment
or designation in any capacity to any public officer or
position during his tenure," 3because the City Mayor of
Olongapo City is an elective official and the subject
posts are public offices; (b) Sec. 16, Art. VII, of the
Constitution, which provides that "[t]he President shall
. . . . appoint all other officers of the Government
whose appointments are not otherwise provided for
by law, and those whom he may be authorized by law
to appoint", 4since it was Congress through the
questioned proviso and not the President who
appointed the Mayor to the subject posts; 5and, (c)
Sec. 261, par. (g), of the Omnibus Election Code,
which says:
Sec. 261. Prohibited Acts. - The following shall be
guilty of an election offense: . . . (g) Appointment of
new employees, creation of new position, promotion,
or giving salary increases. - During the period of forty-
five days before a regular election and thirty days
before a special election, (1) any head, official or
appointing officer of a government office, agency or
instrumentality, whether national or local, including
government-owned or controlled corporations, who
appoints or hires any new employee, whether
provisional, temporary or casual, or creates and fills
any new position, except upon prior authority of the
Commission. The Commission shall not grant the
authority sought unless it is satisfied that the position
to be filled is essential to the proper functioning of the
office or agency concerned, and that the position shall
not be filled in a manner that may influence the
election. As an exception to the foregoing provisions,
a new employee may be appointed in case of urgent
need: Provided, however, That notice of the
appointment shall be given to the Commission within
three days from the date of the appointment. Any
appointment or hiring in violation of this provision shall
be null and void. (2) Any government official who
promotes, or gives any increase of salary or
remuneration or privilege to any government official or
employee, including those in government-owned or
controlled corporations . . . .
for the reason that the appointment of respondent
Gordon to the subject posts made by respondent
Executive Secretary on 3 April 1992 was within the
prohibited 45-day period prior to the 11 May 1992
Elections.chanroblesvirtualawlibrarychanrobles virtual
law library
The principal question is whether the proviso in Sec.
13, par. (d), of R.A. 7227 which states, "Provided,
however, That for the first year of its operations from
the effectivity of this Act, the mayor of the City of
Olongapo shall be appointed as the chairman and
chief executive officer of the Subic Authority," violates
the constitutional proscription against appointment or
designation of elective officials to other government
posts.chanroblesvirtualawlibrarychanrobles virtual law
library
In full, Sec. 7 of Art. IX-B of the Constitution provides:
No elective official shall be eligible for appointment or
designation in any capacity to any public office or
position during his
tenure.chanroblesvirtualawlibrarychanrobles virtual
law library
Unless otherwise allowed by law or by the primary
functions of his position, no appointive official shall
hold any other office or employment in the
Government or any subdivision, agency or
instrumentality thereof, including government-owned
or controlled corporations or their subsidiaries.
The section expresses the policy against the
concentration of several public positions in one
person, so that a public officer or employee may
serve full-time with dedication and thus be efficient in
the delivery of public services. It is an affirmation that
a public office is a full-time job. Hence, a public officer
or employee, like the head of an executive
department described in Civil Liberties Union v.
Executive Secretary, G.R. No. 83896, and Anti-Graft
League of the Philippines, Inc. v. Philip Ella C. Juico,
as Secretary of Agrarian Reform, G.R. No. 83815, 6". .
. . should be allowed to attend to his duties and
responsibilities without the distraction of other
governmental duties or employment. He should be
precluded from dissipating his efforts, attention and
energy among too many positions of responsibility,
which may result in haphazardness and inefficiency . .
. ."chanrobles virtual law library
Particularly as regards the first paragraph of Sec. 7,
"(t)he basic idea really is to prevent a situation where
a local elective official will work for his appointment in
an executive position in government, and thus neglect
his constituents . . . ." 7chanrobles virtual law library
In the case before us, the subject proviso directs the
President to appoint an elective official, i.e., the Mayor
of Olongapo City, to other government posts (as
Chairman of the Board and Chief Executive Officer of
SBMA). Since this is precisely what the constitutional
proscription seeks to prevent, it needs no stretching of
the imagination to conclude that
the  proviso  contravenes Sec. 7, first par., Art. IX-B, of
the Constitution. Here, the fact that the expertise of an
elective official may be most beneficial to the higher
interest of the body politic is of no
moment.chanroblesvirtualawlibrarychanrobles virtual
law library
It is argued that Sec. 94 of the Local Government
Code (LGC) permits the appointment of a local
elective official to another post if so allowed by law or
by the primary functions of his office. 8But, the
contention is fallacious. Section 94 of the LGC is not
determinative of the constitutionality of Sec. 13, par.
(d), of R.A. 7227, for no legislative act can prevail
over the fundamental law of the land. Moreover, since
the constitutionality of Sec. 94 of LGC is not the issue
here nor is that section sought to be declared
unconstitutional, we need not rule on its validity.
Neither can we invoke a practice otherwise
unconstitutional as authority for its
validity.chanroblesvirtualawlibrarychanrobles virtual
law library
In any case, the view that an elective official may be
appointed to another post if allowed by law or by the
primary functions of his office, ignores the clear-cut
difference in the wording of the two (2) paragraphs of
Sec. 7, Art.  hence, an excepted circumstance, citing Civil
IX-B, of the Constitution. While the second paragraph
authorizes holding of multiple offices by
an appointive official when allowed by law or by the
primary functions of his position, the first paragraph
appears to be more stringent by not providing any
exception to the rule against appointment or
designation of an elective official to the government
post, except as are particularly recognized in the
Constitution itself, e.g., the President as head of the
economic and planning agency; 9the Vice-President,
who may be appointed Member of the Cabinet; 10and,
a member of Congress who may be designated ex
officio  member of the Judicial and Bar
Council. 11chanrobles virtual law library
The distinction between the first and second
paragraphs of Sec. 7, Art. IX-B, was not accidental
when drawn, and not without reason. It was purposely
sought by the drafters of the Constitution as shown in
their deliberation, thus -
MR. MONSOD. In other words, what then
Commissioner is saying, Mr. Presiding Officer, is that
the prohibition is more strict with respect to elective
officials, because in the case of appointive officials,
there may be a law that will allow them to hold other
positions.chanroblesvirtualawlibrarychanrobles virtual
law library
MR. FOZ. Yes, I suggest we make that difference,
because in the case of appointive officials, there will
be certain situations where the law should allow them
to hold some other positions. 12chanrobles virtual law
library
The distinction being clear, the exemption allowed to
appointive officials in the second paragraph cannot be
extended to elective officials who are governed by the
first paragraph.chanroblesvirtualawlibrarychanrobles
virtual law library
It is further argued that the SBMA posts are merely ex
officio  to the position of Mayor of Olongapo City,
Liberties Union v. Executive Secretary, 13where we
stated that the prohibition against the holding of any
other office or employment by the President, Vice-
President, Members of the Cabinet, and their deputies
or assistants during their tenure, as provided  in Sec.
13, Art. VII, of the Constitution, does not comprehend
additional duties and functions required by the
primary functions of the officials concerned, who are
to perform them in an ex officio capacity as provided
by law, without receiving any additional compensation
therefor.chanroblesvirtualawlibrarychanrobles virtual
law library
This argument is apparently based on a wrong
premise. Congress did not contemplate making the
subject SBMA posts as ex officio  or automatically
attached to the Office of the Mayor of Olongapo City
without need of appointment. The phrase "shall be
appointed" unquestionably shows the intent to make
the SBMA posts appointive and not merely adjunct to
the post of Mayor of Olongapo City. Had it been the
legislative intent to make the subject positions ex
officio, Congress would have, at least, avoided the
word "appointed" and, instead, "ex officio" would have
been used. 14chanrobles virtual law library
Even in the Senate deliberations, the Senators were
fully aware that subject  proviso  may contravene Sec.
7, first par., Art. IX-B, but they nevertheless passed
the bill and decided to have the controversy resolved
by the courts. Indeed, the Senators would not have
been concerned with the effects of Sec. 7, first par.,
had they considered the SBMA posts as ex
officio.chanroblesvirtualawlibrarychanrobles virtual
law library
Cognizant of the complication that may arise from the
way the subject proviso  was stated, Senator Rene
Saguisag remarked that "if the Conference Committee
just said "the Mayor shall be the Chairman" then that
should foreclose the issue. It is a legislative
choice." 15The Senator took a view that the
constitutional proscription against appointment of
elective officials may have been sidestepped if
Congress attached the SBMA posts to the Mayor of
Olongapo City instead of directing the President to
appoint him to the post. Without passing upon this
view of Senator Saguisag, it suffices to state that
Congress intended the posts to be appointive, thus
nibbling in the bud the argument that they are ex
officio.chanroblesvirtualawlibrarychanrobles virtual
law library
The analogy with the position of Chairman of the
Metro Manila Authority made by respondents cannot
be applied to uphold the constitutionality of the
challenged proviso since it is not put in issue in the
present case. In the same vein, the argument that if
no elective official may be appointed or designated to
another post then Sec. 8, Art. IX-B, of the Constitution
allowing him to receive double compensation 16would
be useless, is non sequitur  since Sec. 8 does not
affect the constitutionality of the subject proviso. In
any case, the Vice-President for example, an elective
official who may be appointed to a cabinet post under
Sec. 3, Art. VII, may receive the compensation
attached to the cabinet position if specifically
authorized by
law.chanroblesvirtualawlibrarychanrobles virtual law
library
Petitioners also assail the legislative encroachment
on the appointing authority of the President. Section
13, par. (d), itself vests in the President the power to
appoint the Chairman of the Board and the Chief
Executive Officer of SBMA, although he really has no
choice under the law but to appoint the Mayor of
Olongapo City.chanroblesvirtualawlibrarychanrobles
virtual law library
As may be defined, an "appointment" is "[t]he
designation of a person, by the person or persons
having authority therefor, to discharge the duties of
some office or trust," 17or "[t]he selection or
designation of a person, by the person or persons
having authority therefor, to fill an office or public
function and discharge the duties of the same. 18In his
treatise, Philippine Political  power to choose and constitutes an irregular
Law, 19Senior Associate Justice Isagani A. Cruz
defines appointment as "the selection, by the authority
vested with the power, of an individual who is to
exercise the functions of a given office."chanrobles
virtual law library
Considering that appointment calls for a selection, the
appointing power necessarily exercises a discretion.
According to Woodbury, J., 20"the choice of a person
to fill an office constitutes the essence of his
appointment," 21and Mr. Justice Malcolm adds that an
"[a]ppointment to office is intrinsically an executive act
involving the exercise of discretion." 22In Pamantasan
ng Lungsod ng Maynila v. Intermediate Appellate
Court  23we held:
The power to appoint is, in essence, discretionary.
The appointing power has the right of choice which he
may exercise freely according to his judgment,
deciding for himself who is best qualified among those
who have the necessary qualifications and eligibilities.
It is a prerogative of the appointing power . . . .
Indeed, the power of choice is the heart of the power
to appoint. Appointment involves an exercise of
discretion of whom to appoint; it is not a ministerial act
of issuing appointment papers to the appointee. In
other words, the choice of the appointee is a
fundamental component of the appointing
power.chanroblesvirtualawlibrarychanrobles virtual
law library
Hence, when Congress clothes the President with the
power to appoint an officer, it (Congress) cannot at
the same time limit the choice of the President to only
one candidate. Once the power of appointment is
conferred on the President, such conferment
necessarily carries the discretion of whom to appoint.
Even on the pretext of prescribing the qualifications of
the officer, Congress may not abuse such power as to
divest the appointing authority, directly or indirectly, of
his discretion to pick his own choice. Consequently,
when the qualifications prescribed by Congress can
only be met by one individual, such enactment
effectively eliminates the discretion of the appointing
restriction on the power of appointment. 24chanrobles
virtual law library
In the case at bar, while Congress willed that the
subject posts be filled with a presidential appointee for
the first year of its operations from the effectivity of
R.A. 7227, the proviso nevertheless limits the
appointing authority to only one eligible, i.e., the
incumbent Mayor of Olongapo City. Since only one
can qualify for the posts in question, the President is
precluded from exercising his discretion to choose
whom to appoint. Such supposed power of
appointment, sans the essential element of choice, is
no power at all and goes against the very nature itself
of appointment.chanroblesvirtualawlibrarychanrobles
virtual law library
While it may be viewed that the  proviso merely sets
the qualifications of the officer during the first year of
operations of SBMA, i.e., he must be the Mayor of
Olongapo City, it is manifestly an abuse of
congressional authority to prescribe qualifications
where only one, and no other, can qualify.
Accordingly, while the conferment of the appointing
power on the President is a perfectly valid legislative
act, the proviso limiting his choice to one is certainly
an encroachment on his
prerogative.chanroblesvirtualawlibrarychanrobles
virtual law library
Since the ineligibility of an elective official for
appointment remains all throughout his tenure or
during his incumbency, he may however resign first
from his elective post to cast off the constitutionally-
attached disqualification before he may be considered
fit for appointment. The deliberation in the
Constitutional Commission is enlightening:
MR. DAVIDE. On Section 4, page 3, line 8, I propose
the substitution of the word "term" with
TENURE.chanroblesvirtualawlibrarychanrobles virtual
law library
MR. FOZ. The effect of the proposed amendment is
to make possible for one to resign from his
position.chanroblesvirtualawlibrarychanrobles virtual
law library
MR. DAVIDE. Yes, we should allow that
prerogative.chanroblesvirtualawlibrarychanrobles
virtual law library
MR. FOZ. Resign from his position to accept an
executive
position.chanroblesvirtualawlibrarychanrobles virtual
law library
MR. DAVIDE. Besides, it may turn out in a given case
that because of, say, incapacity, he may leave the
service, but if he is prohibited from being appointed
within the term for which he was elected, we may be
depriving the government of the needed expertise of
an individual. 25chanrobles virtual law library
Consequently, as long as he is an incumbent, an
elective official remains ineligible for appointment to
another public
office.chanroblesvirtualawlibrarychanrobles virtual law
library
Where, as in the case of respondent Gordon, an
incumbent elective official was, notwithstanding his
ineligibility, appointed to other government posts, he
does not automatically forfeit his elective office nor
remove his ineligibility imposed by the Constitution.
On the contrary, since an incumbent elective official is
not eligible to the appointive position, his appointment
or designation thereto cannot be valid in view of his
disqualification or lack of eligibility. This provision
should not be confused with Sec. 13, Art. VI, of the
Constitution where "(n)o Senator or Member of the
House of Representatives may hold any other office
or employment in the Government . . . during his term
without forfeiting his seat . . . ." The difference
between the two provisions is significant in the sense
that incumbent national legislators lose their elective
posts only after they have been appointed to another
government office, while other incumbent elective
officials must first resign their posts before they can
be appointed, thus running the risk of losing the
elective post as well as not being appointed to the
other post. It is therefore clear that ineligibility is not
directly related with forfeiture of office. ". . . . The
effect is quite different where it is
expressly provided by law that a person holding one
office shall be ineligible to another. Such a provision
is held to incapacitate the incumbent of an office from
accepting or holding a second office (State ex rel. Van
Antwerp v Hogan, 283 Ala. 445, 218 So 2d 258;
McWilliams v Neal, 130 Ga 733, 61 SE 721) and to
render his election or appointment to the latter office
void (State ex rel. Childs v Sutton, 63 Minn 147, 65
NW 262. Annotation: 40 ALR 945) or voidable (Baskin
v State, 107 Okla 272, 232 p 388, 40 ALR
941)." 26"Where the constitution, or statutes declare
that persons holding one office shall be ineligible for
election or appointment to another office, either
generally or of a certain kind, the prohibition has been
held to incapacitate the incumbent of the first office to
hold the second so that any attempt to hold the
second is void (Ala. - State ex rel. Van Antwerp v.
Hogan, 218 So 2d 258, 283 Ala 445)." 27chanrobles
virtual law library
As incumbent elective official, respondent Gordon is
ineligible for appointment to the position of Chairman
of the Board and Chief Executive of SBMA; hence, his
appointment thereto pursuant to a legislative act that
contravenes the Constitution cannot be sustained. He
however remains Mayor of Olongapo City, and his
acts as SBMA official are not necessarily null and
void; he may be considered a de facto officer, "one
whose acts, though not those of a lawful officer, the
law, upon principles of policy and justice, will hold
valid so far as they involve the interest of the public
and third persons, where the duties of the office were
exercised . . . . under color of a known election or
appointment, void because the officer was not
eligible, or because there was a want of power in the
electing or appointing body, or by reason of some
defect or irregularity in its exercise, such ineligibility,
want of power or defect being unknown to the
public . . . . [or] under color of an election, or
appointment, by or pursuant to a public
unconstitutional law, before the same is adjudged to
be such(State vs. Carroll, 38 Conn., 499; Wilcox vs.
Smith, 5 Wendell [N.Y.], 231; 21 Am. Dec., 213;
Sheehan's Case, 122 Mass, 445, 23 Am. Rep.,
323)." 28chanrobles virtual law library
Conformably with our ruling in Civil Liberties Union,
any and all per diems, allowances and other
emoluments which may have been received by
respondent Gordon pursuant to his appointment may
be retained by
him.chanroblesvirtualawlibrarychanrobles virtual law
library
The illegality of his appointment to the SBMA posts
being now evident, other matters affecting the legality
of the questioned  proviso  as well as the appointment
of said respondent made pursuant thereto need no
longer be
discussed.chanroblesvirtualawlibrarychanrobles
virtual law library
In thus concluding as we do, we can only share the
lament of Sen. Sotero Laurel which he expressed in
the floor deliberations of S.B. 1648, precursor of R.A.
7227, when he articulated -
. . . . (much) as we would like to have the present
Mayor of Olongapo City as the Chief Executive of this
Authority that we are creating; (much) as I, myself,
would like to because I know the capacity, integrity,
industry and dedication of Mayor Gordon; (much) as
we would like to give him this terrific, burdensome and
heavy responsibility, we cannot do it because of the
constitutional prohibition which is very clear. It says:
"No elective official shall be appointed or designated
to another position in any capacity." 29chanrobles
virtual law library
For, indeed, "a Constitution must be firm and
immovable, like a mountain amidst the strife of storms
or a rock in the ocean amidst the raging of the
waves." 30One of the characteristics of the
Constitution is permanence, i.e., "its capacity to resist
capricious or whimsical change dictated not by
legitimate needs but only by passing fancies,
temporary passions or occasional infatuations of the
people with ideas or personalities . . . . Such a
Constitution is not likely to be easily tampered with to
suit political expediency, personal ambitions or ill-
advised agitation for change." 31chanrobles virtual law
library
Ergo, under the Constitution, Mayor Gordon has a
choice. We have no
choice.chanroblesvirtualawlibrarychanrobles virtual
law library
WHEREFORE, the  proviso  in par. (d), Sec. 13, of
R.A. 7227, which states: ". . . Provided, however,
That for the first year of its operations from the
effectivity of this Act, the Mayor of the City of
Olongapo shall be appointed as the chairman and
chief executive officer of the Subic Authority," is
declared unconstitutional; consequently, the
appointment pursuant thereto of the Mayor of
Olongapo City, respondent Richard J. Gordon,
is INVALID, hence NULL and
VOID.chanroblesvirtualawlibrarychanrobles virtual law
library
However, all per diems, allowances and other
emoluments received by respondent Gordon, if any,
as such Chairman and Chief Executive Officer may
be retained by him, and all acts otherwise legitimate
done by him in the exercise of his authority as
officer de facto of SBMA are hereby
UPHELD.chanroblesvirtualawlibrarychanrobles virtual
law library
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Bidin, Griño-Aquino,
Regalado, Davide, Jr., Romero, Nocon, Melo and
Quiason, JJ.,
concur.chanroblesvirtualawlibrarychanrobles virtual
law library
Padilla, J., is on leave.
Endnotes:
1 An Act Accelerating the Conversion of Military
Reservations into Other Productive Uses, Creating
the Bases Conversion and Development Authority for
this Purpose, Providing Funds Therefor and for Other
Purposes," approved 13 March 1992, to take effect
upon its publication in a newspaper of general
circulation.chanrobles virtual law library
2 See "Action to Declare Unconstitutional Provisions
of R.A. 7227 with Prohibition and Application for a
Writ of Preliminary Injunction," dated 7 April 1992, p.
6; Rollo p. 7.chanrobles virtual law library
3 Sec. 7, Art. IX-B, provides: "No elective official shall
be eligible for appointment or designation in any
capacity to any public office or position during his
tenure.chanrobles virtual law library
"Unless otherwise allowed by law or by the primary
functions of his position, no appointive official shall
hold any other office or employment in the
Government or any subdivision, agency or
instrumentality thereof, including government-owned
or controlled corporations or their subsidiaries."
4 Sec. 16, Art. VII, provides: "The President shall
nominate and, with the consent of the Commission on
Appointments, appoint the heads of the executive
departments, ambassadors, other public ministers
and consuls, or officers of the armed forces from the
rank of colonel or naval captain, and other officers
whose appointments are not vested in him in this
Constitution. He shall also appoint all other officers of
the Government whose appointments are not
otherwise provided for by law, and those whom he
may be authorized by law to appoint. The Congress
may, by law, vest the appointment of other officers
lower in rank in the President alone, in the courts, or
in the heads of departments, agencies, commission,
or boards.chanrobles virtual law library
"The President shall have the power to make
appointments during the recess of the Congress,
whether voluntary or compulsory, but such
appointments shall be effective only until disapproval
by the Commission on Appointments or until the next
adjournment of the Congress."
5 Petitioners allege that the  proviso  constitutes a
"limitation to the power of appointment of the
President and therefore violates the separation of
powers" and that "Congress cannot create the
position and at the same time specify the person to fill
up such position" (Petition, pp. 4-5; Rollo, pp. 5-
6).chanrobles virtual law library
6 G.R. Nos. 83896 and 83815 were consolidated and
decided jointly on 22 February 1991, 194 SCRA 317,
339.chanrobles virtual law library
7 Record of the Constitutional Commission, Vol. 1, p.
546.chanrobles virtual law library
8 Sec. 94. Appointment of Elective and Appointive
Local Officials; Candidates Who Lost in an Election. -
(a) No elective or appointive local official shall be
eligible for appointment or designation in any capacity
to any public office or position during his
tenure.chanrobles virtual law library
"Unless otherwise allowed by law or by the primary
functions of his position, no elective or appointive
local official shall hold any other office or employment
in the government or any subdivision, agency or
instrumentality thereof, including government-owned
or controlled corporations or their
subsidiaries.chanrobles virtual law library
"(b) Except for losing candidates in barangay
elections, no candidate who lost in any election shall,
within one (1) year after such election, be appointed
to any office in the government or any government-
owned or controlled corporations or in any of their
subsidiaries."
9 Sec. 9, Art. XII, of the Constitution.chanrobles
virtual law library
10 Sec. 3, second par., Art. VII, of the
Constitution.chanrobles virtual law library
11 Sec. 8, par. (1), Art. VIII, of the Constitution. This
particular provision was approved in anticipation of a
unicameral legislature. However, as it turn out, we
adopted instead a bicameral form of government so
that the seat allocated to the representative of
Congress has to be split between a member of the
Senate and a member of the House of
Representative. Each being entitled to one-half vote
in the deliberations in the Judicial and Bar
Council.chanrobles virtual law library
12 Record of the Constitutional Commission, Vol. 5,
p. 156.chanrobles virtual law library
Section 4 of the Proposed Resolution No. 468, the
precursor of the first paragraph of Sec. 7, read:
"Unless otherwise provided by law, no elective official
shall be eligible for appointment or designation in a
temporary or acting capacity to any public office or
position during his term" (Record of the Constitutional
Commission, Vol. 1, p. 524).chanrobles virtual law
library
The following were reactions on the floor:
FR. BERNAS. On page 3, Section 4, line 5, the
provision begins with the phrase "Unless
otherwise provided by law" which does not exist in
the 1973 Constitution. This was inserted in a 1981
amendment. We know the reason why this was put
here. It practically renders the provision useless
because the whole matter becomes discretionary with
the legislature. It is one of those instance in the 1973
Constitution, as amended and constantly reamended,
where they threw in the phrase "Unless
otherwise provided by law" precisely to give the
President a free hand in his decree-making
power.chanrobles virtual law library
xxx xxx xxx
MR. FOZ. As presently worded now, the provision
would allow the legislature to really provide otherwise,
meaning, to allow an elective official to be appointed
to an executive office. (Ibid., Vol. 1, p. 539.)
xxx xxx xxx
MR. COLAYCO . . . . The way I understand this is that
we are giving the legislature the power to authorize
the appointment or designation in a temporary or
acting capacity of an elective official to any public
office or position during his term, Am I right?
MR. FOZ. If a law is passed regarding this matter,
then such law may reverse this provision as worded,
but we have said earlier that we will entertain
suggestions from the floor.chanrobles virtual law
library
MR. COLAYCO. Personally, I find the policy
established in this provision meritorious. To make it a
firm policy, I suggest that we delete the prefatory
phrase "Unless otherwise  provided  by law.chanrobles
virtual law library
MR. FOZ. We agree with the Commissioner (Ibid.,
Vol. 1, p. 549).chanrobles virtual law library
As revised, known later as Sec. 4 of Resolution No.
10, and approved on third reading, the subject section
read: "No elective official shall be eligible for
appointment or designation in any capacity to any
public office or position during his tenure" (Ibid., Vol.
II, p. 788).chanrobles virtual law library
13 Supra, p. 335.chanrobles virtual law library
14 . . . . When, in the exigencies of government, it is
necessary to create and define new duties, the
legislative department has the discretion to determine
whether additional offices shall be created, or these
duties shall be attached to and become ex
officio  duties of existing offices. The power extends to
the consolidation of offices resulting in abolishing one
and attaching its powers and duties to the other. It
matters not that the name commission or board is
given to the body created . . . ." (Tayloe v. Davis, 212
Ala 282, 102 So. 433, 40 ALR 1052,
1057).chanrobles virtual law library
15 Transcripts of Session Proceedings, Senate, 6
February 1992, p. 57.chanrobles virtual law library
16 Sec. 8, Art. IX-B, provides: "No elective or
appointive public officer or employee shall receive
additional, double, or indirect compensation, unless
specifically authorized by law, nor accept without the
consent of the Congress, any present, emolument,
office, or title of any kind from any foreign
government.chanrobles virtual law library
"Pensions or gratuities shall not be considered as
additional, double, or indirect compensation."
17 Black's Law Dictionary, 4th ed., p. 128 citing In re
Nicholson's Estate, 104 Colo, 561, 93 P. 2d 880,
884.chanrobles virtual law library
18 Ibid., citing State v. Braman, 173 Wis. 596, 181
N.W. 729, 730.chanrobles virtual law library
19 1987 ed., p. 180.chanrobles virtual law library
20 Floyd R. Mechem, A Treatise on the Law of Public
Offices and Officers (1890), p. 48, citing In Johnston
v. Wilson, 2 N.H. 205, 9 Am. Dec. 50.chanrobles
virtual law library
21 Mechem, ibid., citing Marbury v. Madison, I Cranch
(U.S.) 137; Craig v. Norfolk, I Mod. 122.chanrobles
virtual law library
22 Concepcion v. Paredes, No. 17539, 23 December
1921; 42 Phil. 599, 603, citing Keim vs. U.S. (1900),
177 U.S., 290.chanrobles virtual law library
23 G.R. No. 65439, 13 November 1985; 140 SCRA
22, 35.chanrobles virtual law library
24 While it is inarguable that Congress has plenary
authority to prescribe qualifications to a public office, it
"may not however prescribe qualifications such that
the President is entirely stripped of discretion, thus
converting appointment to a mere ministerial act"
(Gonzales, Neptali A., Administrative Law, Law on
Public Officers and Election Law, 1966 ed., p. 173,
citing Manalang v. Quitoriano, No. L-6898, 30 April
1954; 94 Phil. 903).chanrobles virtual law library
25 Record of the Constitutional Commission, vol. 1, p.
G.R. No. 102232 March 9, 1994
VIOLETA ALDOVINO, ALI ALIBASA, FELIX
BALINO, DIONISIO BALLESTEROS, JOSE N.
BALEIN, JR., FREDDIE CAUTON, JANE CORROS,
ROBERTO CRUZ, TRINIDAD DACUMOS,
ANGELITA DIMAPILIS, ANDREA ESTONILO,
EFREN FONTANILLA, MARY PAZ FRIGILLANA,
MANUEL HENSON, SAMUEL HIPOL, MERLENE
IBALIO, MAGDALENA JAMILLA, ALEXANDER
JUSTINIANI, ROMULO MIRADOR, JULIO
MIRAVITE, DANTE NAGTALON, CLARITA
NAMUCO, ALICIA ORBITA, ANGELITA PUCAN,
MYRNA P. SALVADOR, LIBRADA TANTAY, and
ARACELI J. DE VEYRA, petitioners,  cases of Abrogar v.  Garrucho, Jr.,
vs.
SECRETARY RAFAEL ALUNAN III, DEPARTMENT
OF TOURISM and SECRETARY GUILLERMO M.
CARAGUE, DEPARTMENT OF BUDGET AND
MANAGEMENT, respondents.
JOSEPHINE G. ANDAYA, ROSALINDA T.
ATIENZA, JOSE M. BALDOVINO, JR., ASUNCION
C. BRIONES, RIZALINA P. ESPIRITU, MARIBELLE
A. GARCIA, ABDULIA T. LANDINGIN, FLORITA O.
OCAMPO, ROLANDO SISON, LOURDES V.
TAMAYO, and ROLANDO VALDEZ, intervenors.
ERLINDA PIZA, ELEONOR SAGNIT, FIDEL
SEVIDAL, CONCEPCION TIMARIO, ELOISA
ALONZO, ANGELITO DELA CRUZ, ROLANDO C.
CAGASCA, LYNIE ARCENAS, MARIA EMMA
JASMIN, ALFONSO ANGELES, MACACUNA
PANGANDAMAN, ROSALITA MAUNA, ROMEO
PADILLA, ASCENSION PADILLA, CRISPULO
PADILLA, VIRGILIO DEJERO, MEDARDO ILAO,
ROSITA SOMERA, ARMANDO CRUZ, CATALINO
DABU, FRANCISCO VILLARAIZ, NORMA
JUMILLA, KENNEDY BASA, and ARMANDO
MENDOZA, intervenors.
ANICITA S. BALUYUT, ANTONINO D. EDRALIN,
EVELYN A. ENRIQUEZ, MA. VICTORIA L.
JACOBO, DANIEL M. MANAMTAM, JESSIE C.
MANRIQUE, ENCARNACION T. RADAZA, and
MARIO P. RUIVIVAR, intervenors.
AMOR T. MEDINA and FELIX L.
POLIQUIT, intervenors.
Leven S. Puno for petitioners.
The Solicitor General for respondents.
BELLOSILLO, J.:
ASSERTING that their plight is similar to petitioners'
in Mandani v. Gonzales,1 and in the consolidated
and Arnaldo v.  Garrucho, Jr.,  2 herein petitioners and
intervenors seek reinstatement and payment of back
wages.
Section 29 of Executive Order No. 120, which took
effect upon its approval on 30 January 1987,
reorganizing the then Ministry of Tourism, provides
that incumbents whose positions are not included in
the new position structure and staffing pattern or who
are not reappointed are deemed separated from the
service. Pursuant thereto, the then Ministry of
Tourism (MOT, now Department of Tourism, DOT)
issued various office orders and memoranda
declaring all positions thereat vacant,3 and effecting
the separation of many of its employees,4 which led to
the Mandani, Abrogar and Arnaldo cases, as well as
the instant petition.
In Mandani, we declared null and void all office orders
and memoranda issued pursuant to E.O. 120 and
directed "public respondents or their successors . . .
to immediately restore the petitioners to their positions
without loss of seniority rights and with back salaries
computed under the new staffing pattern from the
dates of their invalid terminations at rates not lower
than their former salaries."5
In Abrogar and Arnaldo, we ordered the reinstatement
of petitioners "to their former positions without loss of
seniority rights and with back salaries computed
under the new staffing pattern from the dates of their
invalid dismissals at rates not lower than their former
salaries, provided, however, that no supervening
event shall have occured which would otherwise
disqualify them for such reinstatement, and provided,
further, that whatever benefits they may have
received from the Government by reason of their
termination shall be reimbursed through reasonable
salary deduction."6
Herein petitioners and intervenors claiming that they
should not be deprived of the relief granted to their
former co-employees plead for reinstatement "without
loss of seniority rights and with back salaries
computed under the new staffing pattern from dates
of their invalid termination at rates not lower than their
former salaries."7
Decisive in this recourse is the determination of
whether the separation of herein petitioners and
intervenors from service was pursuant to office orders
and memoranda declared void in Mandani.
Except for petitioners Samuel Hipol, Jane Corros and
Myrna Salvador, intervenors Concepcion Timario,
Efren Fontanilla, Ascension Padilla and Evelyn
Enriquez, public respondents do not dispute that
petitioners and intervenors were unseated from the
then Ministry of Tourism, pursuant to office orders and
memoranda issued under E.O. No. 120. Public
respondents nevertheless pray for the denial of the
petition not only because petitioners and intervenors
failed to exhaust administrative remedies and that
their claims are barred by laches, but also in view of
the disruption of the present organizational set-up if
reinstatement is directed.
The Solicitor General argues that while petitioners
and intervenors (except petitioners Samuel Hipol,
Jane Corros and Efren Fontanilla) were dismissed
contemporaneously with their colleagues
in Mandani (filed 3 June 1987 and decided 4 June
1990), Abrogar (filed 31 October 1990 and decided
6 August 1991) and Arnaldo (filed 7 January 1991
and decided 6 August 1991), they filed this petition
and the interventions only in October 1991, and
February, March, May and July 1992, or more than
four (4) years later, hence, laches has set in. In reply,
petitioners and intervenors explain —
. . . since the time these DOT employees were
illegally dismissed in May, 1987, most of them
returned to the far away provinces of their origin
because they became jobless. It was only by the slow
and unreliable communication of word of mouth that
they came to know much later on that they are (sic)
entitled to be reinstated to the DOT . . . 8
The doctrine of laches is "principally a question of
inequity of permitting a claim to be enforced, this
inequity being founded on some change in . . . the
relation of parties."9 In the case at bar, equity, if ever
invoked, must lean in favor of petitioners and
intervenors who were unjustly injured by public
respondents' unlawful acts. The prejudice from the
high-handed violation of the rights of petitioners and
intervenors resulting in their loss of employment is far
more serious than the inconvenience to public
respondents in rectifying their own mistakes.
Moreover, petitioners and intervenors cannot be
deemed to have slept on their rights considering, as
we should, the following unrebutted allegations in the
main petition:
7. Petitioners protested their illegal termination from
the DOT. Many of them questioned their termination
with the Department of Labor and Employment where
they filed a Complaint against the DOT and its top
officials for illegal dismissal. . . . Some of them
questioned their illegal termination before the Civil
Service Commission.
8. Many of petitioners joined a picket and
demonstration held by illegally terminated employees
of the DOT before its office at the DOT building at the
Luneta Park.
9. Petitioners were forced to receive their separation
or retirement benefits from the DOT, but all under
protest. The others continued to fight their cases with
the Department of Labor and Employment even if
they got their separation and/or retirement benefits.
xxx xxx xxx
11. After the finality of this Decision (Mandani) . . .
many other terminated employees of the DOT wrote
to then DOT Secretary Peter D. Garrucho, Jr., as the
successor-in-interest of former Sec. Jose U.
Gonzales, and DBM Secretary Guillermo Carague,
asking that following the Decision in this Mandani
vs.  Gonzalez case and being similarly situated as the
twenty-eight (28) petitioners therein, that they be
reinstated to their former or equivalent positions in the
DOT and/or to be paid their back wages. Then . . .
DOT Secretary Garrucho and DBM Sec. Carague
never responded to these letters and did not reinstate
and/or pay any of their back wages.
xxx xxx xxx
16. Following the Decision of this Honorable Court in
the Mandani vs. Gonzalez case and its Resolution in
the consolidated cases of Abrogar
vs.  Garrucho and Arnaldo vs.  Garrucho, petitioners
made representations with the DOT to be reinstated
and/or paid their back
wages . . . . 10
Neither could petitioners and intervenors be faulted
for not joining in the previous petitions because, as
we held in Cristobal v.  Melchor (No. L- 43203, 29 July
1977; 78 SCRA 175, 183, 187) —
More importantly, Cristobal could be expected —
without necessarily spending time and money by
going to court — to relie upon the outcome of the
case filed by his co-employees to protect his interests
considering the similarity of his situation to that of the
plaintiffs therein and the identical relief being sought.
On this point, We find a statement of Justice Louis
Brandeis of the United States Supreme Court in
Southern Pacific vs. Bogert, relevant and persuasive,
and We quote;
The essence of laches is not merely lapse of time. It
is essential that there be also acquiescence in the
alleged wrong or lack of diligence in seeking a
remedy. Here plaintiffs, or others representing them,
protested . . . and ever since they have . . . persisted
in the diligent pursuit of a remedy . . . Where the
cause of action is of such a nature that a suit to
enforce it would be brought on behalf, not only of the
plaintiff, but of all persons similarly situated, it is not
essential that each such person should intervened
(sic) in the suit brought in order that he be deemed
thereafter free from the laches which bars those who
sleep on their rights (citations omitted).
xxx xxx xxx
This Court, applying the principle of equity, need not
be bound by the rigid application of the law, but rather
its action should conform to the conditions or
exigencies to a given problem or situation in order to
grant a relief that will serve the ends of justice.
To paraphrase then Chief Justice John Edwin
Marshall of the United States Supreme Court, let us
to (do) complete justice and not do justice by halves
("The court of equity in all cases delights to do
complete justice and not by halves." Marshall,
C.  J. — Knight vs.  Knight, 3 P.  Wms. 331,
334; Corbet v.Johnson, 1 Brock, 77, 81 — both cited
in Hefner, et al. vs. Northwestern Mutual Life
Insurance Co., 123 U.S., 309, 313).
We emphasize that prescription was never raised
here as an issue; at most, it is deemed waived.
In Fernandez v.Grolier International, Inc., 11 we stated:
In the case of Director of Lands v. Dano (96 SCRA
161, 165), this Court held that "inasmuch as petitioner
had never pleaded the statute of limitations, he is
deemed to have waived the same".
In the cited case of Directors of Lands v.  Dano, the
Director of Lands, who was similarly situated as public
respondents herein who represent the Government,
was deemed to have waived the defense of
prescription "inasmuch as petitioner had never
pleaded the statute of limitations."
The matter of prescription, we reiterate, may not be
considered at this late stage, not only because it was
never raised and therefore now foreclosed, but more
importantly, because it must yield to the higher
interest of justice. Incidentally, it is only in the dissent
that the question of prescription is introduced. Not
even the Government raised it.
In 1977, we in fact relaxed the rule on prescription
in Cristobal v. Melchor12 to give way to a
determination of the case on the merits where, like in
this case, "[i]t was an act of the government through
its responsible
officials . . . which contributed to the alleged delay in
the filing of . . . complaint for reinstatement." But, we
need not go back that far. On 15 August 1991, the
Court En Banc granted the related petition in
intervention of Alberto A. Peralta,
et al., 13 in the consolidated cases of Abrogar
v.  Garrucho, and Arnaldo v.  Garrucho, even if filed on
1 August 1991 or two months after the four-year
prescriptive period, which lapsed on the 14th and 28th
of May 1991. As we ruled in Cristobal v. Melchor, 14 "it
is indeed the better rule that courts, under the
principle of equity, will not be guided or bound strictly
by the statute of limitations or the doctrine of laches
when to do so manifest wrong and injustice would
result."
The principle that prescription does not run against
the State, which contemplates a situation where a
private party cannot defeat the claim of the State by
raising the defense of prescription, is inapplicable
because in this case the private parties are the ones
filing a suit against the State. Consequently, we
reiterate our pronouncement in Fernandez v.  Grolier
International, Inc.,15 that "[i]t is true that there are
exceptions to the rule that an action will not be
declared to have prescribed if prescription is not
expressly invoked (Garcia vs. Mathis, 100 SCRA
250). However, where considerations of substantial
justice come in (as in this case when the very
employment, and therefore the lifeblood, of each
petitioner/intervenor is involved), it is better to resolve
the issues on the basic merits of the case instead of
applying the rule on prescription which the private
respondent waived when it was not pleaded."
Anyhow, it was public respondents who created the
problem of petitioners and intervenors by illegally
abolishing their positions and terminating their
services in outrageous disregard of the basic
protection accorded civil servants, hence our
repeated pronouncement that it was unconstitutional.
An unconstitutional act is not a law; it confers no
rights; it imposes no duties; it affords no protection; it
creates no office; it is, in legal contemplation,
inoperative, as if it had not been passed. It is
therefore stricken from the statute books and
considered never to have existed at all. Not only the
parties but all persons are bound by the declaration of
unconstitutionality which means that no one may
thereafter invoke it nor may the courts be permitted to
apply it in subsequent cases. It is, in other words, a
total nullity. 16 Plainly, it was as if petitioners and
intervenors were never served their termination
orders and, consequently, were never separated from
the service, The fact that they were not able to
assume office and exercise their duties is attributable
to the continuing refusal of public respondents to take
them in unless they first obtained court orders,
perhaps, for government budgetary and accounting
purposes. Under the circumstances, the more prudent
thing that public respondents could have done upon
receipt of the decision in Mandani, if they were
earnest in making amends and restoring petitioners
and intervenors to their positions, was to inform the
latter of the nullification of their termination orders and
to return to work and resume their functions. After all,
many of them were supposed to be waiting for
instructions from the DOT because in their termination
orders it promised to directly contact them by
telephone, telegram or written notice as soon as
funds for their separation would be available. 17
Furthermore, the representations to DOT made by
petitioners and intervenors for their reinstatement
partook of the nature of an administrative proceeding,
and public respondents also failed to raise the issue
of prescription therein. As already adverted to, that
issue was never raised before us. In reciting the
alleged instances of delay in bringing up this suit, the
Solicitor General simply referred to laches, not
prescription. Since this case is an original action, and
if we treat the petition and interventions as ordinary
complaints, the failure of public respondents to raise
the issue of prescription in their comments cannot be
interpreted any less than a waiver of that defense.
For, defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed
waived, except the failure to state a cause of action
which may be alleged in a later pleading, if one is
permitted. 18
Above all, what public respondents brought up was
the doctrine of laches, not prescription; and laches is
different from prescription. The defense of laches
applies independently of prescription. While
prescription is concerned with the fact of delay, laches
is concerned with the effect of delay. Prescription is a
matter of time; laches is a question of inequity of
permitting a claim to be enforced, this inequity being
founded on some change in the condition of the
property or the relation of the parties. Prescription is
statutory; laches is not. Laches applies in equity,
whereas prescription applies at law. Prescription is
based on fixed time, laches is not. 19 In any case, it
can be said that the prescriptive period was tolled with
the filing of the termination cases before the
Department of Labor and Employment and the Civil
Service Commission, the pendency of which is
acknowledged in the Comment and Memorandum of
public respondents.
Incidentally, even the picketing of the premises and
the placards demanding their immediate
reinstatement could not be any less than written
demands sufficient to interrupt the period of
prescription. As we noted earlier, "[a]fter the finality of
this Decision (Mandani) . . . many other terminated
employees of the DOT wrote to then DOT Secretary
Peter D. Garrucho, Jr . . . and DBM Secretary
Guillermo Carague asking that following the Decision
in this Mandani vs. Gonzalez case and being similarly
situated as the twenty-eight (28) petitioners
therein . . . they be reinstated to their former or
equivalent positions in the DOT and/or to be paid their
back wages." But "[t]hen . . . DOT Secretary Garrucho
and DBM Sec. Carague never responded to these
letters," 20 so that it may be said that the period that
was interrupted never started to run again against
petitioner and intervenors.
The requirement of prior resort to administrative
remedies is not an absolute rule and this did not bar
direct access to this Court in the analogous cases
of Dario v.  Mison, 21 and Mandani v. Gonzalez, 22 thus
—
The Court disregards the questions raised as to
procedure, failure to exhaust administrative remedies,
the standing of certain parties to sue (this was raised
by the Civil Service Commission in G.R. No. 86241,
and failure to exhaust administrative remedies was
raised in G.R. Nos. 81954 and 81917 by the Solicitor
General), and other technical objections, for two
reasons, "[b]ecause of the demands of public interest,
including the need for stability in the public service"
(Sarmiento III v. Mison, G.R. No. 79974, December
17, 1987, 153 SCRA 549, 551-552) and because of
the serious implications of these cases on the
administration of the Philippine civil service and the
rights of public servants.
On the argument that existing organizational set-up
would be disrupted if reinstatement be directed, we
need only reiterate our 18 October 1990 Resolution
in Mandani that —
An erring head of a Department, Bureau, or Office
cannot avoid reinstatement, payment of back pay,
and other acts of compliance with the orders of this
Court by interposing changes effected subsequent to
his unlawful acts and claiming that such changes
make it difficult to obey this Court's orders.
The basic principle to be applied whenever the Court
declares an administrative official to have acted in an
unlawful manner is for that official to undo the harmful
effects of his illegal act and to accord to the aggrieved
parties restoration or restitution in good faith to make
up for the deprivations which may have been suffered
because of his act. 23
Petitioners and intervenors, who are similarly situated
as their counterparts
in Mandani, Abrogar and Arnaldo, deserve no less
than equal treatment.
The Solicitor General takes exception to petitioner
Samuel Hipol who was separated from the service
under an order of 19 May 1986 issued pursuant to
Sec. 2, Art. III, of Proclamation No. 3, and not under
E.O. No. 120.24 In reply, petitioner Hipol admits that
he was "in the process of working for his
reinstatement/reappointment at the DOT when . . . all
positions thereat were declared vacant . . ." 25 Since
his separation from service was not under void orders
issued pursuant to E.O. No. 120 and, worse, he was
not even an incumbent when E.O. No. 120 was
issued, Hipol could not be considered as in the same
situation as the petitioners
in Mandani, Abrogar and Arnaldo.
A parallel case is that of intervenor Concepcion
Timario who, according to the Solicitor General,
resigned effective 28 May 1987 and was not
separated under any of the invalid
orders. 26 Intervenor Timario however contends that
she is entitled to relief because her courtesy
resignation was accepted on 9 June 1987 or during
the period positions were declared vacant pursuant to
MOT Office Order No. 9-87. 27 It is significant to note
that Timario's letter of resignation cited "professional
reasons" as cause for her abdication28 which,
obviously, pertains to the nature of her work.
Moreover, conspicuously absent is the customary
order requiring the filing of courtesy resignations.
Timario may not be permitted to characterize, by way
of self-serving assertions, that her resignation was
merely a courtesy resignation pursuant to any of the
voided office orders or memoranda.
The claim of the Solicitor General that petitioners
Jane Corros and Efren Fontanilla were not employees
of the Ministry of Tourism because their names did
not appear in the regular plantilla of the Ministry of
Tourism,29 is specious since the listing of names in the
plantilla is not a conclusive evidence of employment.
Nonetheless, in view of the incessant allegation of the
Solicitor General that Corros and Fontanilla were not
employees of the Ministry, and considering the
photocopies of Fontanilla's appointment papers and
termination order submitted by him, 30 as well as the
bare assertion of petitioner Corros that she was for 11
years PRO I in the Licensing Division of the Ministry
and that her name could not be found in the plantilla
because she is now Jane Ombawa in view of her
marriage,31 the fact of employment should be
threshed out first in a proper forum as this Court is not
a trier of facts.
The Solicitor General contends that since petitioner
Myrna Salvador was a casual employee,32 intervenor
Ascension Padilla was a temporary appointee whose
appointment expired 20 February 1987,33 and
intervenor Evelyn Enriquez was also a temporary
appointee, 34 their appointments are terminable at the
pleasure of the appointing authority. Considering
however that the office orders and memoranda which
directed the separation of petitioners and intervenors
were annulled, hence in legal contemplation did not
exist, the effect is, as if the termination did not occur.
However, since the determination in this case is
limited only to the extent of the nullity of said orders
and memoranda, the reinstatement of Salvador,
Padilla and Enriquez cannot be ordered in the instant
proceeding.
The Solicitor General also seeks dismissal of the
petition and intervention against intervenors Rizalina
T. Espiritu, Abdulia T. Landingin, Medardo Ilao, Rosita
Somera, Armando Cruz, Catalino Dabu, Francisco
Villaraiz, Norma Jumilia, Kennedy Basa, Rolando G.
Cagasca and Alfonso Angeles because they were
already reinstated. However, because of the
unrefuted allegation that these employees were not
yet paid their respective back wages, then to that
extent, their petitions must be granted.
In computing back wages, we cannot blindly accept
the allegation of petitioners and intervenors that since
their separation from the service in 1987, or about
seven (7) years ago, they have been jobless hence
entitled to full back wages. Conformably with existing
jurisprudence, the award of back wages should not
exceed a period of five (5) years. 35
In the final analysis, the dissent admits that petitioners
and intervenors truly deserve the reliefs they pray for
except that their cause of action has allegedly
prescribed. Shall we now frustrate their rightful claims
on a ground that was never raised, nor even hinted at,
by public respondents in the entire proceeding? That
would be antithetic to our concept of social justice; at
the very least, it is subversive of the rudiments of
fairplay.
WHEREFORE, the instant petition is GRANTED.
Petitioners Violeta Aldovino, Ali Alibasa, Felix Balino,
Dionisio Ballesteros, Jose N. Balein, Jr., Freddie
Cauton, Roberto Cruz, Trinidad Dacumos, Angelita
Dimapilis, Andrea Estonilo, Mary Paz Frigillana,
Manuel Henson, Merlene Ibalio, Magdalena Jamilla,
Alexander Justiniani, Romulo Mirador, Julio Miravite,
Dante Nagtalon, Clarita Namuco, Alicia Orbita,
Angelita Pucan, Myrna P. Salvador,
Librada Tantay, and Araceli De Veyra, and
intervenors Josephine G. Andaya, Rosalinda T.
Atienza, Jose M. Baldovino, Jr., Asuncion C. Briones,
Maribelle A. Garcia, Florita O. Ocampo, Rolando
Sison, Lourdes B. Tamayo, Rolando Valdez, Erlinda
Piza, Eleonor Sagnit, Fidel Sevidal, Eloisa Alonzo,
Angelito Dela Cruz, Lynie Arcenas, Maria Emma
Jasmin, Macacuna Pangandaman, Rosalia Mauna,
Romeo Padilla, Ascencion Padilla, Crispulo Padilla,
Virgilio Dejero, Armando Mendoza, Anicita S. Baluyut,
Antonio D. Edralin, Evelyn A. Enriquez, Ma. Victoria
L. Jacobo, Daniel M. Manamtam, Jessie C. Manrique,
Encarnacion T. Radaza, Mario P. Ruivivar, Amor T.
Medina, and Felix L. Poliquit, are ordered
REINSTATED immediately to their former positions
without loss of seniority rights and with back salaries
computed under the new staffing pattern from the
dates of their invalid dismissals at rates not lower that
their former salaries but not to exceed a period of five
(5) years, provided, however, that no supervening
event shall have occured which would otherwise
disqualify then from such reinstatement,
and provided, further, that whatever benefits they
may have received from the Government by reason of
their termination shall be reimbursed through
reasonable salary deductions.
Public respondents are likewise ordered to pay
intervenors Rizalina P. Espiritu, Abdulia T. Landingin,
Medardo Ilao, Rosita Somera, Armando Cruz,
Catalino Dabu, Francisco Villaraiz, Norma Jumilia,
Kennedy Basa, Rolando G. Cagasca and Alfonso
Angeles their back salaries similarly under the above-
quoted conditions.
As regards petitioners Samuel Hipol, Jane Corros and
Efren Fontanilla, their petition is DISMISSED, as well
as the petition in intervention of Concepcion Timario.
SO ORDERED.
Padilla, Bidin, Regalado, Romero, Nocon, Melo,
Quiason, Vitug and Kapunan, JJ., concur.
Puno, J., took no part.
 
 
 
Separate Opinions
 
DAVIDE, JR., J.,  dissenting:
I fully agree with the majority opinion that the
separation from the service of petitioners and
intervenors (save petitioners Samuel Hipol, Jane
Corros, and Efren Fontanilla) was made pursuant to
the office orders and memoranda declared void
in Mandani vs. Gonzales (186 SCRA 108 [1990]).
Said case and the subsequent consolidated cases
of Abrogar vs. Garrucho, Jr. and Arnaldo
vs.  Garrucho, Jr. (G.R. Nos. 95773 and 96533, 6
August 1991) would have necessarily benefited
petitioners and intervenors and made their
reinstatement inevitable were it not for their failure to
bring the action within the prescriptive period. It is on
this point that I am constrained to disagree with the
majority opinion.
I gather from the majority opinion that, as admitted by
petitioners and intervenors, the illegal dismissal took
place in May 1987. This petition was filed only in
October 1991. The interventions were filed in
February, April, May and July, 1992 (Ponencia, 5, last
paragraph) or more than four years after the cause of
action had accrued. The petitions in Mandani,
Abrogar and Arnaldo were filed on 3 June 1987, 31
October 1990, and 7 January 1991, respectively, or
all before the expiration of the four-year period. An
illegal dismissal is an injury to a person's rights.
Accordingly, pursuant to Article 1146 of the Civil
Code, an action for reinstatement and back salaries
must be filed within four years from the accrual of the
cause of action or from the illegal dismissal. Since the
instant petition and the interventions were filed long
after the lapse of the four-year period, this Court is left
with no other choice except to dismiss this case. The
Office of the Solicitor General is correct on this point.
Another obstacle to this petition is that it is
for  mandamus  (Petition, 2) which must be filed within
one year after dismissal. In Madrigal vs. Lecaroz (191
SCRA 20, 25-16 [1990], this Court, through Mr.
Justice Leo Medialdea, held:
The unbending jurisprudence in this jurisdiction is to
the effect that a petition for quo
warranto and mandamus affecting titles to public
office must be filed within one (1) year from the date
the petitioner is ousted from his position (Galano, et
al. v. Roxas, G.R. No. L-31241, September 12, 1975,
67 SCRA 8; Cornejo v. Secretary of Justice, G.R. No.
L-32818,
June 28, 1974, 57 SCRA 663; Sison v. Pangramuyen,
etc. et al., G.R. No.
L-40295, July 31, 1978, 84 SCRA 364; Cui v. Cui,
G.R. No. L-18727, August 31, 1964, 11 SCRA 755;
Villaruz v. Zaldivar, G.R. No. L-22754, December 31,
1965, 15 SCRA 710; Villegas v. De la Cruz, G.R. No.
L-23752, December 31, 1965, 15 SCRA 720; De la
Maza v. Ochave, G.R. No. L-22336, May 23, 1967, 20
SCRA 142; Alejo v. Marquez, G.R. No.
L-29053, February 27, 1971, 37 SCRA 762). The
reason behind this ruling was expounded in the case
of Unabia v. City Mayor, etc., 99 Phil. 253 where We
said:
. . . [W]e note that in actions of quo warranto involving
right to an office, the action must be instituted within
the period of one year. This has been the law in the
island since 1901, the period having been originally
fixed in Section 216 of the Code of Civil Procedure
(Act No. 190). We find this provision to be an
expression of policy on the part of the State that
persons claiming a right to an office of which they are
illegally dispossessed should immediately take steps
to recover said office and that if they do not do so
within a period of one year, they shall be considered
as having lost their right thereto by abandonment.
There are weighty reasons of public policy and
convenience that demand the adoption of a similar
period for persons claiming rights to positions in the
civil service. There must be stability in the service so
that public business may (sic) be unduly retarded;
delays in the statement of the right to positions in the
service must be discouraged. The following
considerations as to public officers, by Mr. Justice
Bengzon, may well be applicable to employees in the
civil service:
Furthermore, constitutional rights may certainly be
waived, and the inaction of the officer for one year
could be validly considered as waiver, i.e., a
renunciation which no principle of justice may prevent,
he being at liberty to resign his position anytime he
pleases.
And there is good justification for the limitation period;
it is not proper that the title to public office should be
subjected to continued uncertainly (sic), and the
peoples' interest requires that such right should be
determined as speedily as practicable. (Tumulak vs.
Egay, 46 Off. Gaz., [8], 3693, 3695.)
Further, the Government must be immediately
informed or advised if any person claims to be entitled
to an office or a position in civil service as against
another actually holding it, so that the Government
may not be faced with the predicament of having to
pay two salaries, one, for the person actually holding
the office, although illegally, and another, for one not
actually rendering service although entitled to do so.
We hold that in view of the policy of the State
contained in the law fixing the period of one year
within which actions for quo warranto may be
instituted, any person claiming right to a position in
the civil service should also be required to file his
petition for reinstatement within the period of one
year, otherwise he is thereby considered as having
abandoned his office.
The principle of equity which the majority opinion
invokes is inapplicable. Equity is available only in the
absence of positive law. As beautifully expressed by
this Court through Mr. Justice Isagani A. Cruz
in Aguila vs. Court of First Instance of Batangas (160
SCRA 352, 359-360 [1988]):
For all its conceded merits, equity is available only in
the absence of law and not as its replacement. Equity
is described as justice outside legality, which simply
means that it cannot supplant although it may, as
often happens, supplement the law. We said it in an
earlier case [Zabat Jr. vs. CA, 142 SCRA 587], and
we repeat it now, that all abstract arguments based
only on equity should yield to positive rules, which
pre-empt and prevail over such persuasions.
Emotional appeals for justice, while they may wring
the heart of the Court, cannot justify disregard of the
mandate of the law as long as it remains in force. The
applicable maxim, which goes back to the ancient
days of the Roman jurists — and is now still
reverently observed — is aequetas nunquam
contravenit legis.
In my view, petitioners and intervenors only desire to
take advantage of our rulings
in Mandani, Abrogar and Arnaldo. Initially, they had
no interest, or had lost any, in seeking judicial remedy
after their dismissal. They really did not care much
about their separation from the service. Otherwise,
they would not have wasted precious time waiting for
a herald to bring them good tidings. In short, they
chose to sleep on their rights. The laws aid those who
are vigilant, not those who sleep upon their rights.
To meet the above disquisition, the modified majority
opinion now claims that since the defense of
prescription was never raised by the respondents, it is
deemed waived; and that the following unrebutted
allegations in the main petition bring them within our
ruling in Cristobal vs.  Melchor (78 SCRA 175 [1977]):
7. Petitioners protested their illegal termination from
the DOT. Many of them questioned their termination
with the Department of Labor and Employment where
they filed a Complaint against the DOT and its top
officials for illegal dismissal . . . Some of them
questioned their illegal termination before the Civil
Service Commission.
8. Many of petitioners joined a picket and
demonstration held by illegally terminated employees
of the DOT before its office at the DOT building at the
Luneta Park.
9. Petitioners were forced to receive their separation
or retirement benefits from the DOT, but all under
protest. The others continued to fight their cases with
the Department of Labor and Employment even if
they got their separation and/or retirement benefits.
xxx xxx xxx
11. After the finality of this Decision (Mandani) . . .
many other terminated employees of the DOT wrote
to then DOT Secretary Peter D. Garrucho, Jr., as the
successor-in-interest of former Sec. Jose U.
Gonzalez, and DBM Secretary Guillermo Carague,
asking that following the Decision in this Mandani
vs.  Gonzalez  case and being similarly situated as the
twenty-eight (28) petitioners therein, that they be
reinstated to their former or equivalent positions in the
DOT and/or to be paid their back wages. Then . . .
DOT Secretary Garrucho and DBM Sec. Carague
never responded to these letters and did not reinstate
and/or pay any of their back wages.
xxx xxx xxx
16. Following the Decision of this Honorable Court in
the Mandani vs. Gonzalez case and its Resolution in
the consolidated cases of Abrogar
vs.  Garrucho and Arnaldo vs.  Garrucho, petitioners
made representations with the DOT to be reinstated
and/or paid their back
wages . . . (Ponencia, 6-7)
While it may be true that the public respondents,
through the Office of the Solicitor General, did not
raise the defense of prescription, it cannot be denied
that the allegations in the petition clearly show that
the petitioners' cause of action has indeed prescribed.
In Gulang vs. Nadayag (214 SCRA 355, 362-363
[1992], citing Philippine National Bank vs. Pacific
Commission House
(27 SCRA 766 [1969]; Garcia vs.  Mathis (100 SCRA
250 [1980]); and Aznar III vs.  Bernad (161 SCRA
[1988]), we held:
There is also authority to the effect that the defense of
prescription is not deemed waived, even if not
pleaded in a motion to dismiss or in the answer, if
plaintiff's allegation in the complaint or the evidence
he present shows clearly that the action has
prescribed.
Cristobal vs. Melchor has a very peculiar factual
backdrop which justified an exception to the general
rule. In the said case, this Court found the following:
2. It was an act of the government through its
responsible officials more particularly then Executive
Secretary Amelito Mutuc and his successors which
contributed to the alleged delay in the filing of
Cristobal's present complaint for reinstatement.
The evidence of Cristobal establish the following:
After the Ingles suit was filed in court, the dismissed
employees, Cristobal included, continued to seek
reconsideration of their dismissal. It was then that
Executive Secretary Mutuc assured the employees
that without prejudice to the continuation of the civil
action, he would work for their reinstatement.
Accordingly, some of the dismissed employees were
recalled to their respective positions in the Office of
the President among whom were the plaintiffs in the
civil case and several others who were not parties
therein. Secretary Mutuc even tried to place the
others outside of the Malacañang Office. An affidavit
of Emiliano Punzal, retired Presidential Records
Officer, attests to the fact that Jose C. Cristobal "was
among those in the list of separated employees
ordered for placement to a position commensurate to
his qualification and experience." In the meantime,
however, Secretary Mutuc was replaced by other
Executive Secretaries to whom Cristobal over and
over again presented his request for reinstatement
and who gave the same assurance that Cristobal
would be recalled and re-employed at "the opportune
time".
It was this continued promise of the government
officials concerned which led Cristobal to bide his time
and wait for the Office of the President to comply with
its commitment. Furthermore, he had behind him the
decision of the Supreme Court in Ingles
vs.  Mutuc which he believed should be applied in his
favor. But when Cristobal, in answer to his various
letters, received the letter of May 19, 1971 from the
Office of the President denying his reinstatement and
declaring the matters "definitely closed" because of
his failure to file an action in court within one year
from his separation, it was only then that he saw the
necessity of seeking redress from the courts.
In the instant case, the petitioners, as shown in the
aforequoted paragraphs in their main petition,
explicitly admit that they protested their illegal
termination from the DOT; many of them questioned
their termination with the Department of Labor and
Employment (DOLE); and some of them questioned
such illegal termination before the Civil Service
Commission (CSC). Considering that they ultimately
took this recourse after four years, it would be safe to
presume that the decisions of the DOLE and the CSC
were adverse to them; they took no further action
thereon, and allowed the decisions to become final.
The petitioners then should not be permitted to
belatedly re-litigate the matter by way of mandamus.
WHEREFORE, I vote to DENY the petition for want of
merit.
Cruz and Feliciano, JJ., concur.
# Separate Opinions
DAVIDE, JR., J.,  dissenting:
I fully agree with the majority opinion that the
separation from the service of petitioners and
intervenors (save petitioners Samuel Hipol, Jane
Corros, and Efren Fontanilla) was made pursuant to
the office orders and memoranda declared void
in Mandani vs. Gonzales (186 SCRA 108 [1990]).
Said case and the subsequent consolidated cases
of Abrogar vs. Garrucho, Jr. and Arnaldo
vs.  Garrucho, Jr. (G.R. Nos. 95773 and 96533, 6
August 1991) would have necessarily benefited
petitioners and intervenors and made their
reinstatement inevitable were it not for their failure to
bring the action within the prescriptive period. It is on
this point that I am constrained to disagree with the
majority opinion.
I gather from the majority opinion that, as admitted by
petitioners and intervenors, the illegal dismissal took
place in May 1987. This petition was filed only in
October 1991. The interventions were filed in
February, April, May and July, 1992 (Ponencia, 5, last
paragraph) or more than four years after the cause of
action had accrued. The petitions in Mandani,
Abrogar and Arnaldo were filed on 3 June 1987, 31
October 1990, and 7 January 1991, respectively, or
all before the expiration of the four-year period. An
illegal dismissal is an injury to a person's rights.
Accordingly, pursuant to Article 1146 of the Civil
Code, an action for reinstatement and back salaries
must be filed within four years from the accrual of the
cause of action or from the illegal dismissal. Since the
instant petition and the interventions were filed long
after the lapse of the four-year period, this Court is left
with no other choice except to dismiss this case. The
Office of the Solicitor General is correct on this point.
Another obstacle to this petition is that it is
for  mandamus  (Petition, 2) which must be filed within
one year after dismissal. In Madrigal vs. Lecaroz (191
SCRA 20, 25-16 [1990], this Court, through Mr.
Justice Leo Medialdea, held:
The unbending jurisprudence in this jurisdiction is to
the effect that a petition for quo
warranto and mandamus affecting titles to public
office must be filed within one (1) year from the date
the petitioner is ousted from his position (Galano, et
al. v. Roxas, G.R. No. L-31241, September 12, 1975,
67 SCRA 8; Cornejo v. Secretary of Justice, G.R. No.
L-32818,
June 28, 1974, 57 SCRA 663; Sison v. Pangramuyen,
etc. et al., G.R. No.
L-40295, July 31, 1978, 84 SCRA 364; Cui v. Cui,
G.R. No. L-18727, August 31, 1964, 11 SCRA 755;
Villaruz v. Zaldivar, G.R. No. L-22754, December 31,
1965, 15 SCRA 710; Villegas v. De la Cruz, G.R.  after their dismissal. They really did not care much
No. L-23752, December 31, 1965, 15 SCRA 720; De
la Maza v. Ochave, G.R. No. L-22336, May 23, 1967,
20 SCRA 142; Alejo v. Marquez, G.R. No. L-29053,
February 27, 1971, 37 SCRA 762). The reason
behind this ruling was expounded in the case of
Unabia v. City Mayor, etc., 99 Phil. 253 where We
said:
. . . [W]e note that in actions of quo warranto involving
right to an office, the action must be instituted within
the period of one year. This has been the law in the
island since 1901, the period having been originally
fixed in Section 216 of the Code of Civil Procedure
(Act No. 190). We find this provision to be an
expression of policy on the part of the State that
persons claiming a right to an office of which they are
illegally dispossessed should immediately take steps
to recover said office and that if they do not do so
within a period of one year, they shall be considered
as having lost their right thereto by abandonment.
There are weighty reasons of public policy and
convenience that demand the adoption of a similar
period for persons claiming rights to positions in the
civil service. There must be stability in the service so
that public business may (sic) be unduly retarded;
delays in the statement of the right to positions in the
service must be discouraged. The following
considerations as to public officers, by Mr. Justice
Bengzon, may well be applicable to employees in the
civil service:
Furthermore, constitutional rights may certainly be
waived, and the inaction of the officer for one year
could be validly considered as waiver, i.e., a
renunciation which no principle of justice may prevent,
he being at liberty to resign his position anytime he
pleases.
And there is good justification for the limitation period;
it is not proper that the title to public office should be
subjected to continued uncertainly (sic), and the
peoples' interest requires that such right should be
determined as speedily as practicable. (Tumulak vs.
Egay, 46 Off. Gaz., [8], 3693, 3695.)
Further, the Government must be immediately
informed or advised if any person claims to be entitled
to an office or a position in civil service as against
another actually holding it, so that the Government
may not be faced with the predicament of having to
pay two salaries, one, for the person actually holding
the office, although illegally, and another, for one not
actually rendering service although entitled to do so.
We hold that in view of the policy of the State
contained in the law fixing the period of one year
within which actions for quo warranto may be
instituted, any person claiming right to a position in
the civil service should also be required to file his
petition for reinstatement within the period of one
year, otherwise he is thereby considered as having
abandoned his office.
The principle of equity which the majority opinion
invokes is inapplicable. Equity is available only in the
absence of positive law. As beautifully expressed by
this Court through Mr. Justice Isagani A. Cruz
in Aguila vs. Court of First Instance of Batangas (160
SCRA 352, 359-360 [1988]):
For all its conceded merits, equity is available only in
the absence of law and not as its replacement. Equity
is described as justice outside legality, which simply
means that it cannot supplant although it may, as
often happens, supplement the law. We said it in an
earlier case [Zabat Jr.  vs. CA, 142 SCRA 587], and
we repeat it now, that all abstract arguments based
only on equity should yield to positive rules, which
pre-empt and prevail over such persuasions.
Emotional appeals for justice, while they may wring
the heart of the Court, cannot justify disregard of the
mandate of the law as long as it remains in force. The
applicable maxim, which goes back to the ancient
days of the Roman jurists — and is now still
reverently observed — is aequetas nunquam
contravenit legis.
In my view, petitioners and intervenors only desire to
take advantage of our rulings
in Mandani, Abrogar and Arnaldo. Initially, they had
no interest, or had lost any, in seeking judicial remedy
about their separation from the service. Otherwise,
they would not have wasted precious time waiting for
a herald to bring them good tidings. In short, they
chose to sleep on their rights. The laws aid those who
are vigilant, not those who sleep upon their rights.
To meet the above disquisition, the modified majority
opinion now claims that since the defense of
prescription was never raised by the respondents, it is
deemed waived; and that the following unrebutted
allegations in the main petition bring them within our
ruling in Cristobal vs.  Melchor (78 SCRA 175 [1977]):
7. Petitioners protested their illegal termination from
the DOT. Many of them questioned their termination
with the Department of Labor and Employment where
they filed a Complaint against the DOT and its top
officials for illegal dismissal . . . Some of them
questioned their illegal termination before the Civil
Service Commission.
8. Many of petitioners joined a picket and
demonstration held by illegally terminated employees
of the DOT before its office at the DOT building at the
Luneta Park.
9. Petitioners were forced to receive their separation
or retirement benefits from the DOT, but all under
protest. The others continued to fight their cases with
the Department of Labor and Employment even if
they got their separation and/or retirement benefits.
xxx xxx xxx
11. After the finality of this Decision (Mandani) . . .
many other terminated employees of the DOT wrote
to then DOT Secretary Peter D. Garrucho, Jr., as the
successor-in-interest of former Sec. Jose U.
Gonzalez, and DBM Secretary Guillermo Carague,
asking that following the Decision in this Mandani
vs.  Gonzalez  case and being similarly situated as the
twenty-eight (28) petitioners therein, that they be
reinstated to their former or equivalent positions in the
DOT and/or to be paid their back wages. Then . . .
DOT Secretary Garrucho and DBM Sec. Carague
never responded to these letters and did not reinstate
and/or pay any of their back wages.
xxx xxx xxx
16. Following the Decision of this Honorable Court in
the Mandani vs. Gonzalez case and its Resolution in
the consolidated cases of Abrogar
vs.  Garrucho and Arnaldo vs.  Garrucho, petitioners
made representations with the DOT to be reinstated
and/or paid their back
wages . . . (Ponencia, 6-7)
While it may be true that the public respondents,
through the Office of the Solicitor General, did not
raise the defense of prescription, it cannot be denied
that the allegations in the petition clearly show that
the petitioners' cause of action has indeed prescribed.
In Gulang vs. Nadayag (214 SCRA 355, 362-363
[1992], citing Philippine National Bank vs. Pacific
Commission House
(27 SCRA 766 [1969]; Garcia vs.  Mathis (100 SCRA
250 [1980]); and Aznar III vs.  Bernad (161 SCRA
[1988]), we held:
There is also authority to the effect that the defense of
prescription is not deemed waived, even if not
pleaded in a motion to dismiss or in the answer, if
plaintiff's allegation in the complaint or the evidence
he present shows clearly that the action has
prescribed.
Cristobal vs. Melchor has a very peculiar factual
backdrop which justified an exception to the general
rule. In the said case, this Court found the following:
2. It was an act of the government through its
responsible officials more particularly then Executive
Secretary Amelito Mutuc and his successors which
contributed to the alleged delay in the filing of
Cristobal's present complaint for reinstatement.
The evidence of Cristobal establish the following:
After the Ingles suit was filed in court, the dismissed
employees, Cristobal included, continued to seek
reconsideration of their dismissal. It was then that
Executive Secretary Mutuc assured the employees
that without prejudice to the continuation of the civil
action, he would work for their reinstatement.
Accordingly, some of the dismissed employees were
recalled to their respective positions in the Office of
the President among whom were the plaintiffs in the
civil case and several others who were not parties
therein. Secretary Mutuc even tried to place the
others outside of the Malacañang Office. An affidavit
of Emiliano Punzal, retired Presidential Records
Officer, attests to the fact that Jose C. Cristobal "was
among those in the list of separated employees
ordered for placement to a position commensurate to
his qualification and experience." In the meantime,
however, Secretary Mutuc was replaced by other
Executive Secretaries to whom Cristobal over and
over again presented his request for reinstatement
and who gave the same assurance that Cristobal
would be recalled and re-employed at "the opportune
time".
It was this continued promise of the government
officials concerned which led Cristobal to bide his time
and wait for the Office of the President to comply with
its commitment. Furthermore, he had behind him the
decision of the Supreme Court in Ingles
vs.  Mutuc which he believed should be applied in his
favor. But when Cristobal, in answer to his various
letters, received the letter of May 19, 1971 from the
Office of the President denying his reinstatement and
declaring the matters "definitely closed" because of
his failure to file an action in court within one year
from his separation, it was only then that he saw the
necessity of seeking redress from the courts.
In the instant case, the petitioners, as shown in the
aforequoted paragraphs in their main petition,
explicitly admit that they protested their illegal
termination from the DOT; many of them questioned
their termination with the Department of Labor and
Employment (DOLE); and some of them questioned
such illegal termination before the Civil Service
Commission (CSC). Considering that they ultimately
took this recourse after four years, it would be safe to
presume that the decisions of the DOLE and the CSC
were adverse to them; they took no further action
thereon, and allowed the decisions to become final.
The petitioners then should not be permitted to
belatedly re-litigate the matter by way of mandamus.
WHEREFORE, I vote to DENY the petition for want of
merit.
Cruz and Feliciano, JJ., concur.
G.R. No. 101083 July 30, 1993
JUAN ANTONIO, ANNA ROSARIO and JOSE
ALFONSO, all surnamed OPOSA, minors, and
represented by their parents ANTONIO and
RIZALINA OPOSA, ROBERTA NICOLE SADIUA,
minor, represented by her parents CALVIN and
ROBERTA SADIUA, CARLO, AMANDA SALUD and
PATRISHA, all surnamed FLORES, minors and
represented by their parents ENRICO and NIDA
FLORES, GIANINA DITA R. FORTUN, minor,
represented by her parents SIGRID and DOLORES
FORTUN, GEORGE II and MA. CONCEPCION, all
surnamed MISA, minors and represented by their
parents GEORGE and MYRA MISA, BENJAMIN
ALAN V. PESIGAN, minor, represented by his
parents ANTONIO and ALICE PESIGAN, JOVIE
MARIE ALFARO, minor, represented by her
parents JOSE and MARIA VIOLETA ALFARO,
MARIA CONCEPCION T. CASTRO, minor,
represented by her parents FREDENIL and JANE
CASTRO, JOHANNA DESAMPARADO,  and other persons acting in his behalf to —
minor, represented by her parents JOSE and
ANGELA DESAMPRADO, CARLO JOAQUIN T.
NARVASA, minor, represented by his parents
GREGORIO II and CRISTINE CHARITY NARVASA,
MA. MARGARITA, JESUS IGNACIO, MA. ANGELA
and MARIE GABRIELLE, all surnamed SAENZ,
minors, represented by their parents ROBERTO
and AURORA SAENZ, KRISTINE, MARY ELLEN,
MAY, GOLDA MARTHE and DAVID IAN, all
surnamed KING, minors, represented by their
parents MARIO and HAYDEE KING, DAVID,
FRANCISCO and THERESE VICTORIA, all
surnamed ENDRIGA, minors, represented by their
parents BALTAZAR and TERESITA ENDRIGA,
JOSE MA. and REGINA MA., all surnamed ABAYA,
minors, represented by their parents ANTONIO
and MARICA ABAYA, MARILIN, MARIO, JR. and
MARIETTE, all surnamed CARDAMA, minors,
represented by their parents MARIO and LINA
CARDAMA, CLARISSA, ANN MARIE, NAGEL, and
IMEE LYN, all surnamed OPOSA, minors and
represented by their parents RICARDO and
MARISSA OPOSA, PHILIP JOSEPH, STEPHEN
JOHN and ISAIAH JAMES, all surnamed QUIPIT,
minors, represented by their parents JOSE MAX
and VILMI QUIPIT, BUGHAW CIELO, CRISANTO,
ANNA, DANIEL and FRANCISCO, all surnamed
BIBAL, minors, represented by their parents
FRANCISCO, JR. and MILAGROS BIBAL, and THE
PHILIPPINE ECOLOGICAL NETWORK,
INC., petitioners,  instituted as a taxpayers' class suit3 and alleges that
vs.
THE HONORABLE FULGENCIO S. FACTORAN,
JR., in his capacity as the Secretary of the
Department of Environment and Natural
Resources, and THE HONORABLE ERIBERTO U.
ROSARIO, Presiding Judge of the RTC, Makati,
Branch 66, respondents.
Oposa Law Office for petitioners.
The Solicitor General for respondents.
DAVIDE, JR., J.:
In a broader sense, this petition bears upon the right
of Filipinos to a balanced and healthful ecology which
the petitioners dramatically associate with the twin
concepts of "inter-generational responsibility" and
"inter-generational justice." Specifically, it touches on
the issue of whether the said petitioners have a cause
of action to "prevent the misappropriation or
impairment" of Philippine rainforests and "arrest the
unabated hemorrhage of the country's vital life
support systems and continued rape of Mother Earth."
The controversy has its genesis in Civil Case No. 90-
77 which was filed before Branch 66 (Makati, Metro
Manila) of the Regional Trial Court (RTC), National
Capital Judicial Region. The principal plaintiffs
therein, now the principal petitioners, are all minors
duly represented and joined by their respective
parents. Impleaded as an additional plaintiff is the
Philippine Ecological Network, Inc. (PENI), a
domestic, non-stock and non-profit corporation
organized for the purpose of, inter alia, engaging in
concerted action geared for the protection of our
environment and natural resources. The original
defendant was the Honorable Fulgencio S. Factoran,
Jr., then Secretary of the Department of Environment
and Natural Resources (DENR). His substitution in
this petition by the new Secretary, the Honorable
Angel C. Alcala, was subsequently ordered upon
proper motion by the petitioners.1 The complaint2 was
the plaintiffs "are all citizens of the Republic of the
Philippines, taxpayers, and entitled to the full benefit,
use and enjoyment of the natural resource treasure
that is the country's virgin tropical forests." The same
was filed for themselves and others who are equally
concerned about the preservation of said resource but
are "so numerous that it is impracticable to bring them
all before the Court." The minors further asseverate
that they "represent their generation as well as
generations yet unborn."4 Consequently, it is prayed
for that judgment be rendered:
. . . ordering defendant, his agents, representatives
(1) Cancel all existing timber license agreements in
the country;
(2) Cease and desist from receiving, accepting,
processing, renewing or approving new timber license
agreements.
and granting the plaintiffs ". . . such other reliefs just
and equitable under the premises."5
The complaint starts off with the general averments
that the Philippine archipelago of 7,100 islands has a
land area of thirty million (30,000,000) hectares and is
endowed with rich, lush and verdant rainforests in
which varied, rare and unique species of flora and
fauna may be found; these rainforests contain a
genetic, biological and chemical pool which is
irreplaceable; they are also the habitat of indigenous
Philippine cultures which have existed, endured and
flourished since time immemorial; scientific evidence
reveals that in order to maintain a balanced and
healthful ecology, the country's land area should be
utilized on the basis of a ratio of fifty-four per cent
(54%) for forest cover and forty-six per cent (46%) for
agricultural, residential, industrial, commercial and
other uses; the distortion and disturbance of this
balance as a consequence of deforestation have
resulted in a host of environmental tragedies, such as
(a) water shortages resulting from drying up of the
water table, otherwise known as the "aquifer," as well
as of rivers, brooks and streams, (b) salinization of
the water table as a result of the intrusion therein of
salt water, incontrovertible examples of which may be
found in the island of Cebu and the Municipality of
Bacoor, Cavite, (c) massive erosion and the
consequential loss of soil fertility and agricultural
productivity, with the volume of soil eroded estimated
at one billion (1,000,000,000) cubic meters per annum
— approximately the size of the entire island of
Catanduanes, (d) the endangering and extinction of
the country's unique, rare and varied flora and fauna,
(e) the disturbance and dislocation of cultural
communities, including the disappearance of the
Filipino's indigenous cultures, (f) the siltation of rivers
and seabeds and consequential destruction of corals
and other aquatic life leading to a critical reduction in
marine resource productivity, (g) recurrent spells of
drought as is presently experienced by the entire
country, (h) increasing velocity of typhoon winds
which result from the absence of windbreakers, (i) the
floodings of lowlands and agricultural plains arising
from the absence of the absorbent mechanism of
forests, (j) the siltation and shortening of the lifespan
of multi-billion peso dams constructed and operated
for the purpose of supplying water for domestic uses,
irrigation and the generation of electric power, and (k)
the reduction of the earth's capacity to process carbon
dioxide gases which has led to perplexing and
catastrophic climatic changes such as the
phenomenon of global warming, otherwise known as
the "greenhouse effect."
Plaintiffs further assert that the adverse and
detrimental consequences of continued and
deforestation are so capable of unquestionable
demonstration that the same may be submitted as a
matter of judicial notice. This notwithstanding, they
expressed their intention to present expert witnesses
as well as documentary, photographic and film
evidence in the course of the trial.
As their cause of action, they specifically allege that:
CAUSE OF ACTION
7. Plaintiffs replead by reference the foregoing
allegations.
8. Twenty-five (25) years ago, the Philippines had
some sixteen (16) million hectares of rainforests
constituting roughly 53% of the country's land mass.
9. Satellite images taken in 1987 reveal that there
remained no more than 1.2 million hectares of said
rainforests or four per cent (4.0%) of the country's
land area.
10. More recent surveys reveal that a mere 850,000
hectares of virgin old-growth rainforests are left,
barely 2.8% of the entire land mass of the Philippine
archipelago and about 3.0 million hectares of
immature and uneconomical secondary growth
forests.
11. Public records reveal that the defendant's,
predecessors have granted timber license
agreements ('TLA's') to various corporations to cut the
aggregate area of 3.89 million hectares for
commercial logging purposes.
A copy of the TLA holders and the corresponding
areas covered is hereto attached as Annex "A".
12. At the present rate of deforestation, i.e. about
200,000 hectares per annum or 25 hectares per hour
— nighttime, Saturdays, Sundays and holidays
included — the Philippines will be bereft of forest
resources after the end of this ensuing decade, if not
earlier.
13. The adverse effects, disastrous consequences,
serious injury and irreparable damage of this
continued trend of deforestation to the plaintiff minor's
generation and to generations yet unborn are evident
and incontrovertible. As a matter of fact, the
environmental damages enumerated in paragraph 6
hereof are already being felt, experienced and
suffered by the generation of plaintiff adults.
14. The continued allowance by defendant of TLA
holders to cut and deforest the remaining forest
stands will work great damage and irreparable injury
to plaintiffs — especially plaintiff minors and their
successors — who may never see, use, benefit from
and enjoy this rare and unique natural resource
treasure.
This act of defendant constitutes a misappropriation
and/or impairment of the natural resource property he
holds in trust for the benefit of plaintiff minors and
succeeding generations.
15. Plaintiffs have a clear and constitutional right to a
balanced and healthful ecology and are entitled to
protection by the State in its capacity as the parens
patriae.
16. Plaintiff have exhausted all administrative
remedies with the defendant's office. On March 2,
1990, plaintiffs served upon defendant a final demand
to cancel all logging permits in the country.
A copy of the plaintiffs' letter dated March 1, 1990 is
hereto attached as Annex "B".
17. Defendant, however, fails and refuses to cancel
the existing TLA's to the continuing serious damage
and extreme prejudice of plaintiffs.
18. The continued failure and refusal by defendant to
cancel the TLA's is an act violative of the rights of
plaintiffs, especially plaintiff minors who may be left
with a country that is desertified (sic), bare, barren
and devoid of the wonderful flora, fauna and
indigenous cultures which the Philippines had been
abundantly blessed with.
19. Defendant's refusal to cancel the aforementioned
TLA's is manifestly contrary to the public policy
enunciated in the Philippine Environmental Policy
which, in pertinent part, states that it is the policy of
the State —
(a) to create, develop, maintain and improve
conditions under which man and nature can thrive in
productive and enjoyable harmony with each other;
(b) to fulfill the social, economic and other
requirements of present and future generations of
Filipinos and;
(c) to ensure the attainment of an environmental
quality that is conductive to a life of dignity and well-
being. (P.D. 1151, 6 June 1977)
20. Furthermore, defendant's continued refusal to
cancel the aforementioned TLA's is contradictory to
the Constitutional policy of the State to —
a. effect "a more equitable distribution of
opportunities, income and wealth" and "make full and
efficient use of natural resources (sic)." (Section 1,
Article XII of the Constitution);
b. "protect the nation's marine wealth." (Section
2, ibid);
c. "conserve and promote the nation's cultural
heritage and resources (sic)" (Section 14, Article
XIV, id.);
d. "protect and advance the right of the people to a
balanced and healthful ecology in accord with the
rhythm and harmony of nature." (Section 16, Article
II, id.)
21. Finally, defendant's act is contrary to the highest
law of humankind — the natural law — and violative
of plaintiffs' right to self-preservation and
perpetuation.
22. There is no other plain, speedy and adequate
remedy in law other than the instant action to arrest
the unabated hemorrhage of the country's vital life
support systems and continued rape of Mother
Earth. 6
On 22 June 1990, the original defendant, Secretary
Factoran, Jr., filed a Motion to Dismiss the complaint
based on two (2) grounds, namely: (1) the plaintiffs
have no cause of action against him and (2) the issue
raised by the plaintiffs is a political question which
properly pertains to the legislative or executive
branches of Government. In their 12 July 1990
Opposition to the Motion, the petitioners maintain that
(1) the complaint shows a clear and unmistakable
cause of action, (2) the motion is dilatory and (3) the
action presents a justiciable question as it involves
the defendant's abuse of discretion.
On 18 July 1991, respondent Judge issued an order
granting the aforementioned motion to dismiss.7 In the
said order, not only was the defendant's claim — that
the complaint states no cause of action against him
and that it raises a political question — sustained, the
respondent Judge further ruled that the granting of the
relief prayed for would result in the impairment of
contracts which is prohibited by the fundamental law
of the land.
Plaintiffs thus filed the instant special civil action
for certiorari under Rule 65 of the Revised Rules of
Court and ask this Court to rescind and set aside the
dismissal order on the ground that the respondent
Judge gravely abused his discretion in dismissing the
action. Again, the parents of the plaintiffs-minors not
only represent their children, but have also joined the
latter in this case.8
On 14 May 1992, We resolved to give due course to
the petition and required the parties to submit their
respective Memoranda after the Office of the Solicitor
General (OSG) filed a Comment in behalf of the
respondents and the petitioners filed a reply thereto.
Petitioners contend that the complaint clearly and
unmistakably states a cause of action as it contains
sufficient allegations concerning their right to a sound
environment based on Articles 19, 20 and 21 of the
Civil Code (Human Relations), Section 4 of Executive
Order (E.O.) No. 192 creating the DENR, Section 3 of
Presidential Decree (P.D.) No. 1151 (Philippine
Environmental Policy), Section 16, Article II of the
1987 Constitution recognizing the right of the people
to a balanced and healthful ecology, the concept of
generational genocide in Criminal Law and the
concept of man's inalienable right to self-preservation
and self-perpetuation embodied in natural law.
Petitioners likewise rely on the respondent's
correlative obligation per Section 4 of E.O. No. 192, to
safeguard the people's right to a healthful
environment.
It is further claimed that the issue of the respondent
Secretary's alleged grave abuse of discretion in
granting Timber License Agreements (TLAs) to cover
more areas for logging than what is available involves
a judicial question.
Anent the invocation by the respondent Judge of the
Constitution's non-impairment clause, petitioners
maintain that the same does not apply in this case
because TLAs are not contracts. They likewise submit
that even if TLAs may be considered protected by the
said clause, it is well settled that they may still be
revoked by the State when the public interest so
requires.
On the other hand, the respondents aver that the
petitioners failed to allege in their complaint a specific
legal right violated by the respondent Secretary for
which any relief is provided by law. They see nothing
in the complaint but vague and nebulous allegations
concerning an "environmental right" which supposedly
entitles the petitioners to the "protection by the state
in its capacity as parens patriae." Such allegations,
according to them, do not reveal a valid cause of
action. They then reiterate the theory that the
question of whether logging should be permitted in
the country is a political question which should be
properly addressed to the executive or legislative
branches of Government. They therefore assert that
the petitioners' resources is not to file an action to
court, but to lobby before Congress for the passage of
a bill that would ban logging totally.
As to the matter of the cancellation of the TLAs,
respondents submit that the same cannot be done by
the State without due process of law. Once issued, a
TLA remains effective for a certain period of time —
usually for twenty-five (25) years. During its effectivity,
the same can neither be revised nor cancelled unless
the holder has been found, after due notice and
hearing, to have violated the terms of the agreement
or other forestry laws and regulations. Petitioners'
proposition to have all the TLAs indiscriminately
cancelled without the requisite hearing would be
violative of the requirements of due process.
Before going any further, We must first focus on some
procedural matters. Petitioners instituted Civil Case
No. 90-777 as a class suit. The original defendant and
the present respondents did not take issue with this
matter. Nevertheless, We hereby rule that the said
civil case is indeed a class suit. The subject matter of
the complaint is of common and general interest not
just to several, but to all citizens of the Philippines.
Consequently, since the parties are so numerous, it,
becomes impracticable, if not totally impossible, to
bring all of them before the court. We likewise declare
that the plaintiffs therein are numerous and
representative enough to ensure the full protection of
all concerned interests. Hence, all the requisites for
the filing of a valid class suit under Section 12, Rule 3
of the Revised Rules of Court are present both in the
said civil case and in the instant petition, the latter
being but an incident to the former.
This case, however, has a special and novel element.
Petitioners minors assert that they represent their
generation as well as generations yet unborn. We find
no difficulty in ruling that they can, for themselves, for
others of their generation and for the succeeding
generations, file a class suit. Their personality to sue
in behalf of the succeeding generations can only be
based on the concept of intergenerational
responsibility insofar as the right to a balanced and
healthful ecology is concerned. Such a right, as
hereinafter expounded, considers  While the right to a balanced and healthful ecology is
the "rhythm and harmony of nature." Nature means
the created world in its entirety.9 Such rhythm and
harmony indispensably include, inter alia, the
judicious disposition, utilization, management,
renewal and conservation of the country's forest,
mineral, land, waters, fisheries, wildlife, off-shore
areas and other natural resources to the end that their
exploration, development and utilization be equitably
accessible to the present as well as future
generations. 10Needless to say, every generation has
a responsibility to the next to preserve that rhythm
and harmony for the full enjoyment of a balanced and
healthful ecology. Put a little differently, the minors'
assertion of their right to a sound environment
constitutes, at the same time, the performance of their
obligation to ensure the protection of that right for the
generations to come.
The locus standi of the petitioners having thus been
addressed, We shall now proceed to the merits of the
petition.
After a careful perusal of the complaint in question
and a meticulous consideration and evaluation of the
issues raised and arguments adduced by the parties,
We do not hesitate to find for the petitioners and rule
against the respondent Judge's challenged order for
having been issued with grave abuse of discretion
amounting to lack of jurisdiction. The pertinent
portions of the said order reads as follows:
xxx xxx xxx
After a careful and circumspect evaluation of the
Complaint, the Court cannot help but agree with the
defendant. For although we believe that plaintiffs have
but the noblest of all intentions, it (sic) fell short of
alleging, with sufficient definiteness, a specific legal
right they are seeking to enforce and protect, or a
specific legal wrong they are seeking to prevent and
redress (Sec. 1, Rule 2, RRC). Furthermore, the
Court notes that the Complaint is replete with vague
assumptions and vague conclusions based on
unverified data. In fine, plaintiffs fail to state a cause
of action in its Complaint against the herein
defendant.
Furthermore, the Court firmly believes that the matter
before it, being impressed with political color and
involving a matter of public policy, may not be taken
cognizance of by this Court without doing violence to
the sacred principle of "Separation of Powers" of the
three (3) co-equal branches of the Government.
The Court is likewise of the impression that it cannot,
no matter how we stretch our jurisdiction, grant the
reliefs prayed for by the plaintiffs,  i.e., to cancel all
existing timber license agreements in the country and
to cease and desist from receiving, accepting,
processing, renewing or approving new timber license
agreements. For to do otherwise would amount to
"impairment of contracts" abhored (sic) by the
fundamental law. 11
We do not agree with the trial court's conclusions that
the plaintiffs failed to allege with sufficient definiteness
a specific legal right involved or a specific legal wrong
committed, and that the complaint is replete with
vague assumptions and conclusions based on
unverified data. A reading of the complaint itself belies
these conclusions.
The complaint focuses on one specific fundamental
legal right — the right to a balanced and healthful
ecology which, for the first time in our nation's
constitutional history, is solemnly incorporated in the
fundamental law. Section 16, Article II of the 1987
Constitution explicitly provides:
Sec. 16. The State shall protect and advance the right
of the people to a balanced and healthful ecology in
accord with the rhythm and harmony of nature.
This right unites with the right to health which is
provided for in the preceding section of the same
article:
Sec. 15. The State shall protect and promote the right
to health of the people and instill health
consciousness among them.
to be found under the Declaration of Principles and
State Policies and not under the Bill of Rights, it does
not follow that it is less important than any of the civil
and political rights enumerated in the latter. Such a
right belongs to a different category of rights
altogether for it concerns nothing less than self-
preservation and self-perpetuation — aptly and
fittingly stressed by the petitioners — the
advancement of which may even be said to predate
all governments and constitutions. As a matter of fact,
these basic rights need not even be written in the
Constitution for they are assumed to exist from the
inception of humankind. If they are now explicitly
mentioned in the fundamental charter, it is because of
the well-founded fear of its framers that unless the
rights to a balanced and healthful ecology and to
health are mandated as state policies by the
Constitution itself, thereby highlighting their continuing
importance and imposing upon the state a solemn
obligation to preserve the first and protect and
advance the second, the day would not be too far
when all else would be lost not only for the present
generation, but also for those to come — generations
which stand to inherit nothing but parched earth
incapable of sustaining life.
The right to a balanced and healthful ecology carries
with it the correlative duty to refrain from impairing the
environment. During the debates on this right in one
of the plenary sessions of the 1986 Constitutional
Commission, the following exchange transpired
between Commissioner Wilfrido Villacorta and
Commissioner Adolfo Azcuna who sponsored the
section in question:
MR. VILLACORTA:
Does this section mandate the State to provide
sanctions against all forms of pollution — air, water
and noise pollution?
MR. AZCUNA:
Yes, Madam President. The right to healthful (sic)
environment necessarily carries with it the correlative
duty of not impairing the same and, therefore,
sanctions may be provided for impairment of
environmental balance. 12
The said right implies, among many other things, the
judicious management and conservation of the
country's forests.
Without such forests, the ecological or environmental
balance would be irreversiby disrupted.
Conformably with the enunciated right to a balanced
and healthful ecology and the right to health, as well
as the other related provisions of the Constitution
concerning the conservation, development and
utilization of the country's natural resources, 13 then
President Corazon C. Aquino promulgated on 10
June 1987 E.O. No. 192, 14 Section 4 of which
expressly mandates that the Department of
Environment and Natural Resources "shall be the
primary government agency responsible for the
conservation, management, development and proper
use of the country's environment and natural
resources, specifically forest and grazing lands,
mineral, resources, including those in reservation and
watershed areas, and lands of the public domain, as
well as the licensing and regulation of all natural
resources as may be provided for by law in order to
ensure equitable sharing of the benefits derived
therefrom for the welfare of the present and future
generations of Filipinos." Section 3 thereof makes the
following statement of policy:
Sec. 3. Declaration of Policy. — It is hereby declared
the policy of the State to ensure the sustainable use,
development, management, renewal, and
conservation of the country's forest, mineral, land, off-
shore areas and other natural resources, including the
protection and enhancement of the quality of the
environment, and equitable access of the different
segments of the population to the development and
the use of the country's natural resources, not only for
the present generation but for future generations as
well. It is also the policy of the state to recognize and
apply a true value system including social and
environmental cost implications relative to their
utilization, development and conservation of our
natural resources.
This policy declaration is substantially re-stated it Title
XIV, Book IV of the Administrative Code of
1987,15 specifically in Section 1 thereof which reads:
Sec. 1. Declaration of Policy. — (1) The State shall
ensure, for the benefit of the Filipino people, the full
exploration and development as well as the judicious
disposition, utilization, management, renewal and
conservation of the country's forest, mineral, land,
waters, fisheries, wildlife, off-shore areas and other
natural resources, consistent with the necessity of
maintaining a sound ecological balance and
protecting and enhancing the quality of the
environment and the objective of making the
exploration, development and utilization of such
natural resources equitably accessible to the different
segments of the present as well as future
generations.
(2) The State shall likewise recognize and apply a
true value system that takes into account social and
environmental cost implications relative to the
utilization, development and conservation of our
natural resources.
The above provision stresses "the necessity of
maintaining a sound ecological balance and
protecting and enhancing the quality of the
environment." Section 2 of the same Title, on the
other hand, specifically speaks of the mandate of the
DENR; however, it makes particular reference to the
fact of the agency's being subject to law and higher
authority. Said section provides:
Sec. 2. Mandate. — (1) The Department of
Environment and Natural Resources shall be primarily
responsible for the implementation of the foregoing
policy.
(2) It shall, subject to law and higher authority, be in
charge of carrying out the State's constitutional
mandate to control and supervise the exploration,
development, utilization, and conservation of the
country's natural resources.
Both E.O. NO. 192 and the Administrative Code of
1987 have set the objectives which will serve as the
bases for policy formulation, and have defined the
powers and functions of the DENR.
It may, however, be recalled that even before the
ratification of the 1987 Constitution, specific statutes
already paid special attention to the "environmental
right" of the present and future generations. On 6
June 1977, P.D. No. 1151 (Philippine Environmental
Policy) and P.D. No. 1152 (Philippine Environment
Code) were issued. The former "declared a continuing
policy of the State (a) to create, develop, maintain and
improve conditions under which man and nature can
thrive in productive and enjoyable harmony with each
other, (b) to fulfill the social, economic and other
requirements of present and future generations of
Filipinos, and (c) to insure the attainment of an
environmental quality that is conducive to a life of
dignity and well-being." 16 As its goal, it speaks of the
"responsibilities of each generation as trustee and
guardian of the environment for succeeding
generations." 17 The latter statute, on the other hand,
gave flesh to the said policy.
Thus, the right of the petitioners (and all those they
represent) to a balanced and healthful ecology is as
clear as the DENR's duty — under its mandate and by
virtue of its powers and functions under E.O. No. 192
and the Administrative Code of 1987 — to protect and
advance the said right.
A denial or violation of that right by the other who has
the corelative duty or obligation to respect or protect
the same gives rise to a cause of action. Petitioners
maintain that the granting of the TLAs, which they
claim was done with grave abuse of discretion,
violated their right to a balanced and healthful
ecology; hence, the full protection thereof requires
that no further TLAs should be renewed or granted.
A cause of action is defined as:
. . . an act or omission of one party in violation of the
legal right or rights of the other; and its essential
elements are legal right of the plaintiff, correlative
obligation of the defendant, and act or omission of the
defendant in violation of said legal right. 18
It is settled in this jurisdiction that in a motion to
dismiss based on the ground that the complaint fails
to state a cause of action, 19 the question submitted to
the court for resolution involves the sufficiency of the
facts alleged in the complaint itself. No other matter
should be considered; furthermore, the truth of falsity
of the said allegations is beside the point for the truth
thereof is deemed hypothetically admitted. The only
issue to be resolved in such a case is: admitting such
alleged facts to be true, may the court render a valid
judgment in accordance with the prayer in the
complaint? 20 In Militante vs. Edrosolano, 21 this Court
laid down the rule that the judiciary should "exercise
the utmost care and circumspection in passing upon a
motion to dismiss on the ground of the absence
thereof [cause of action] lest, by its failure to manifest
a correct appreciation of the facts alleged and
deemed hypothetically admitted, what the law grants
or recognizes is effectively nullified. If that happens,
there is a blot on the legal order. The law itself stands
in disrepute."
After careful examination of the petitioners' complaint,
We find the statements under the introductory
affirmative allegations, as well as the specific
averments under the sub-heading CAUSE OF
ACTION, to be adequate enough to show, prima
facie, the claimed violation of their rights. On the basis
thereof, they may thus be granted, wholly or partly,
the reliefs prayed for. It bears stressing, however, that
insofar as the cancellation of the TLAs is concerned,
there is the need to implead, as party defendants, the
grantees thereof for they are indispensable parties.
The foregoing considered, Civil Case No. 90-777 be
said to raise a political question. Policy formulation or
determination by the executive or legislative branches
of Government is not squarely put in issue. What is
principally involved is the enforcement of a right vis-a-
vis policies already formulated and expressed in
legislation. It must, nonetheless, be emphasized that
the political question doctrine is no longer, the
insurmountable obstacle to the exercise of judicial
power or the impenetrable shield that protects
executive and legislative actions from judicial inquiry
or review. The second paragraph of section 1, Article
VIII of the Constitution states that:
Judicial power includes the duty of the courts of
justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to
determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or
instrumentality of the Government.
Commenting on this provision in his book, Philippine
Political Law, 22 Mr. Justice Isagani A. Cruz, a
distinguished member of this Court, says:
The first part of the authority represents the traditional
concept of judicial power, involving the settlement of
conflicting rights as conferred as law. The second part
of the authority represents a broadening of judicial
power to enable the courts of justice to review what
was before forbidden territory, to wit, the discretion of
the political departments of the government.
As worded, the new provision vests in the judiciary,
and particularly the Supreme Court, the power to rule
upon even the wisdom of the decisions of the
executive and the legislature and to declare their acts
invalid for lack or excess of jurisdiction because
tainted with grave abuse of discretion. The catch, of
course, is the meaning of "grave abuse of discretion,"
which is a very elastic phrase that can expand or
contract according to the disposition of the judiciary.
In Daza vs. Singson, 23 Mr. Justice Cruz, now
speaking for this Court, noted:
In the case now before us, the jurisdictional objection
becomes even less tenable and decisive. The reason
is that, even if we were to assume that the issue
presented before us was political in nature, we would
still not be precluded from revolving it under the
expanded jurisdiction conferred upon us that now
covers, in proper cases, even the political question.
Article VII, Section 1, of the Constitution clearly
provides: . . .
The last ground invoked by the trial court in
dismissing the complaint is the non-impairment of
contracts clause found in the Constitution. The
court a quo declared that:
The Court is likewise of the impression that it cannot,
no matter how we stretch our jurisdiction, grant the
reliefs prayed for by the plaintiffs, i.e., to cancel all
existing timber license agreements in the country and
to cease and desist from receiving, accepting,
processing, renewing or approving new timber license
agreements. For to do otherwise would amount to
"impairment of contracts" abhored (sic) by the
fundamental law. 24
We are not persuaded at all; on the contrary, We are
amazed, if not shocked, by such a sweeping
pronouncement. In the first place, the respondent
Secretary did not, for obvious reasons, even invoke in
his motion to dismiss the non-impairment clause. If he
had done so, he would have acted with utmost
infidelity to the Government by providing undue and
unwarranted benefits and advantages to the timber
license holders because he would have forever bound
the Government to strictly respect the said licenses
according to their terms and conditions regardless of
changes in policy and the demands of public interest
and welfare. He was aware that as correctly pointed
out by the petitioners, into every timber license must
be read Section 20 of the Forestry Reform Code (P.D.
No. 705) which provides:
. . . Provided, That when the national interest so
requires, the President may amend, modify, replace
or rescind any contract, concession, permit, licenses
or any other form of privilege granted herein . . .
Needless to say, all licenses may thus be revoked or
rescinded by executive action. It is not a contract,
property or a property right protested by the due
process clause of the Constitution. In Tan vs. Director
of Forestry, 25 this Court held:
. . . A timber license is an instrument by which the
State regulates the utilization and disposition of forest
resources to the end that public welfare is promoted.
A timber license is not a contract within the purview of
the due process clause; it is only a license or
privilege, which can be validly withdrawn whenever
dictated by public interest or public welfare as in this
case.
A license is merely a permit or privilege to do what
otherwise would be unlawful, and is not a contract
between the authority, federal, state, or municipal,
granting it and the person to whom it is granted;
neither is it property or a property right, nor does it
create a vested right; nor is it taxation (37 C.J. 168).
Thus, this Court held that the granting of license does
not create irrevocable rights, neither is it property or
property rights (People vs. Ong Tin, 54 O.G. 7576).
We reiterated this pronouncement in Felipe Ysmael,
Jr. & Co., Inc. vs. Deputy Executive Secretary: 26
. . . Timber licenses, permits and license agreements
are the principal instruments by which the State
regulates the utilization and disposition of forest
resources to the end that public welfare is promoted.
And it can hardly be gainsaid that they merely
evidence a privilege granted by the State to qualified
entities, and do not vest in the latter a permanent or
irrevocable right to the particular concession area and
the forest products therein. They may be validly
amended, modified, replaced or rescinded by the
Chief Executive when national interests so require.
Thus, they are not deemed contracts within the
purview of the due process of law clause
[See  Sections 3(ee) and 20 of Pres. Decree No. 705,
as amended. Also, Tan v. Director of Forestry, G.R.
No. L-24548, October 27, 1983, 125 SCRA 302].
Since timber licenses are not contracts, the non-
impairment clause, which reads:
Sec. 10. No law impairing, the obligation of contracts
shall be passed. 27
cannot be invoked.
In the second place, even if it is to be assumed that
the same are contracts, the instant case does not
involve a law or even an executive issuance declaring
the cancellation or modification of existing timber
licenses. Hence, the non-impairment clause cannot
as yet be invoked. Nevertheless, granting further that
a law has actually been passed mandating
cancellations or modifications, the same cannot still
be stigmatized as a violation of the non-impairment
clause. This is because by its very nature and
purpose, such as law could have only been passed in
the exercise of the police power of the state for the
purpose of advancing the right of the people to a
balanced and healthful ecology, promoting their
health and enhancing the general welfare. In Abe vs.
Foster Wheeler 
Corp. 28 this Court stated:
The freedom of contract, under our system of
government, is not meant to be absolute. The same is
understood to be subject to reasonable legislative
regulation aimed at the promotion of public health,
moral, safety and welfare. In other words, the
constitutional guaranty of non-impairment of
obligations of contract is limited by the exercise of the
police power of the State, in the interest of public
health, safety, moral and general welfare.
The reason for this is emphatically set forth in Nebia
vs. New York, 29 quoted in Philippine American Life
Insurance Co. vs. Auditor General,30 to wit:
Under our form of government the use of property and
the making of contracts are normally matters of
private and not of public concern. The general rule is
that both shall be free of governmental interference.
But neither property rights nor contract rights are
absolute; for government cannot exist if the citizen
may at will use his property to the detriment of his
fellows, or exercise his freedom of contract to work
them harm. Equally fundamental with the private right
is that of the public to regulate it in the common
interest.
In short, the non-impairment clause must yield to the
police power of the state. 31
Finally, it is difficult to imagine, as the trial court did,
how the non-impairment clause could apply with
respect to the prayer to enjoin the respondent
Secretary from receiving, accepting, processing,
renewing or approving new timber licenses for, save
in cases of renewal, no contract would have as of yet
existed in the other instances. Moreover, with respect
to renewal, the holder is not entitled to it as a matter
of right.
WHEREFORE, being impressed with merit, the
instant Petition is hereby GRANTED, and the
challenged Order of respondent Judge of 18 July
1991 dismissing Civil Case No. 90-777 is hereby set
aside. The petitioners may therefore amend their
complaint to implead as defendants the holders or
grantees of the questioned timber license
agreements.
No pronouncement as to costs.
SO ORDERED.
Cruz, Padilla, Bidin, Griño-Aquino, Regalado,
Romero, Nocon, Bellosillo, Melo and Quiason, JJ.,
concur.
Narvasa, C.J., Puno and Vitug, JJ., took no part.
 
 
 
Separate Opinions
 
FELICIANO, J.,  concurring
I join in the result reached by my distinguished brother
in the Court, Davide, Jr., J., in this case which, to my
mind, is one of the most important cases decided by
this Court in the last few years. The seminal principles
laid down in this decision are likely to influence
profoundly the direction and course of the protection
and management of the environment, which of course
embraces the utilization of all the natural resources in
the territorial base of our polity. I have therefore
sought to clarify, basically to myself, what the Court
appears to be saying.
The Court explicitly states that petitioners have
the locus standi necessary to sustain the bringing
and, maintenance of this suit (Decision, pp. 11-
12). Locus standi is not a function of petitioners' claim
that their suit is properly regarded as a class suit. I
understand locus standi to refer to the legal interest
which a plaintiff must have in the subject matter of the
suit. Because of the very broadness of the concept of
"class" here involved — membership in this "class"
appears to embrace everyone living in the country
whether now or in the  contamination of ground water resources; loss of
future — it appears to me that everyone who may be
expected to benefit from the course of action
petitioners seek to require public respondents to take,
is vested with the necessary locus standi. The Court
may be seen therefore to be recognizing
a beneficiaries' right of action in the field of
environmental protection, as against both the public
administrative agency directly concerned and the
private persons or entities operating in the field or
sector of activity involved. Whether such beneficiaries'
right of action may be found under any and all
circumstances, or whether some failure to act, in the
first instance, on the part of the governmental agency
concerned must be shown ("prior exhaustion of
administrative remedies"), is not discussed in the
decision and presumably is left for future
determination in an appropriate case.
The Court has also declared that the complaint has
alleged and focused upon "one specific fundamental
legal right — the right to a balanced and healthful
ecology" (Decision, p. 14). There is no question that
"the right to a balanced and healthful ecology" is
"fundamental" and that, accordingly, it has been
"constitutionalized." But although it is fundamental in
character, I suggest, with very great respect, that it
cannot be characterized as "specific," without doing
excessive violence to language. It is in fact very
difficult to fashion language more comprehensive in
scope and generalized in character than a right to "a
balanced and healthful ecology." The list of particular
claims which can be subsumed under this rubic
appears to be entirely open-ended: prevention and
control of emission of toxic fumes and smoke from
factories and motor vehicles; of discharge of oil,
chemical effluents, garbage and raw sewage into
rivers, inland and coastal waters by vessels, oil rigs,
factories, mines and whole communities; of dumping
of organic and inorganic wastes on open land, streets
and thoroughfares; failure to rehabilitate land after
strip-mining or open-pit mining; kaingin or slash-and-
burn farming; destruction of fisheries, coral reefs and
other living sea resources through the use of
dynamite or cyanide and other chemicals;
certain species of fauna and flora; and so on. The
other statements pointed out by the Court: Section 3,
Executive Order No. 192 dated 10 June 1987; Section
1, Title XIV, Book IV of the 1987 Administrative Code;
and P.D. No. 1151, dated 6 June 1977 — all appear
to be formulations of  policy, as general and abstract
as the constitutional statements of basic policy in
Article II, Section 16 ("the right — to a balanced and
healthful ecology") and 15 ("the right to health").
P.D. No. 1152, also dated 6 June 1977, entitled "The
Philippine Environment Code," is, upon the other
hand, a compendious collection of more "specific
environment management policies" and "environment
quality standards" (fourth "Whereas" clause,
Preamble) relating to an extremely wide range of
topics:
(a) air quality management;
(b) water quality management;
(c) land use management;
(d) natural resources management and conservation
embracing:
(i) fisheries and aquatic resources;
(ii) wild life;
(iii) forestry and soil conservation;
(iv) flood control and natural calamities;
(v) energy development;
(vi) conservation and utilization of surface and ground
water
(vii) mineral resources
Two (2) points are worth making in this connection.
Firstly, neither petitioners nor the Court has identified
the particular provision or provisions (if any) of the
Philippine Environment Code which give rise to a
specific legal right which petitioners are seeking to
enforce. Secondly, the Philippine Environment Code
identifies with notable care the particular government
agency charged with the formulation and
implementation of guidelines and programs dealing
with each of the headings and sub-headings
mentioned above. The Philippine Environment Code
does not, in other words, appear to contemplate
action on the part of  private persons who are
beneficiaries of implementation of that Code.
As a matter of logic, by finding petitioners' cause of
action as anchored on a legal right comprised in the
constitutional statements above noted, the Court is in
effect saying that Section 15 (and Section 16) of
Article II of the Constitution are self-executing and
judicially enforceable even in their present form. The
implications of this doctrine will have to be explored in
future cases; those implications are too large and far-
reaching in nature even to be hinted at here.
My suggestion is simply that petitioners must, before
the trial court, show a more specific legal right — a
right cast in language of a significantly lower order of
generality than Article II (15) of the Constitution —
that is or may be violated by the actions, or failures to
act, imputed to the public respondent by petitioners so
that the trial court can validly render judgment
granting all or part of the relief prayed for. To my
mind, the Court should be understood as simply
saying that such a more specific legal right or
rights may  well exist in our corpus of law, considering
the general policy principles found in the Constitution
and the existence of the Philippine Environment
Code, and that the trial court should have given
petitioners an effective opportunity so to demonstrate,
instead of aborting the proceedings on a motion to
dismiss.
It seems to me important that the legal right which is
an essential component of a cause of action be a
specific, operable legal right, rather than a
constitutional or statutory  policy, for at least two (2)
reasons. One is that unless the legal right claimed to
have been violated or disregarded is given
specification in operational terms, defendants may
well be unable to defend themselves intelligently and
effectively; in other words, there are due process
dimensions to this matter.
The second is a broader-gauge consideration —
where a specific violation of law or applicable
regulation is not alleged or proved, petitioners can be
expected to fall back on the expanded conception of
judicial power in the second paragraph of Section 1 of
Article VIII of the Constitution which reads:
Section 1. . . .
Judicial power includes the duty of the courts of
justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to
determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or
instrumentality of the Government. (Emphasis
supplied)
When substantive standards as general as "the right
to a balanced and healthy ecology" and "the right to
health" are combined with remedial standards as
broad ranging as "a grave abuse of discretion
amounting to lack or excess of jurisdiction," the result
will be, it is respectfully submitted, to propel courts
into the uncharted ocean of social and economic
policy making. At least in respect of the vast area of
environmental protection and management, our
courts have no claim to special technical competence
and experience and professional qualification. Where
no specific, operable norms and standards are shown
to exist, then the policy making departments — the
legislative and executive departments — must be
given a real and effective opportunity to fashion and
promulgate those norms and standards, and to
implement them before the courts should intervene.
My learned brother Davide, Jr., J., rightly insists that
the timber companies, whose concession agreements
or TLA's petitioners demand public respondents
should cancel, must be impleaded in the proceedings
below. It might be asked that, if petitioners'
entitlement to the relief demanded is not dependent
upon proof of breach by the timber companies of one
or more of the specific terms and conditions of their
concession agreements (and this, petitioners implicitly
assume), what will those companies litigate about?
The answer I suggest is that they may seek to dispute
the existence of the specific legal right petitioners
should allege, as well as the reality of the claimed
factual nexus between petitioners' specific legal rights
and the claimed wrongful acts or failures to act of
public respondent administrative agency. They may
also controvert the appropriateness of the remedy or
remedies demanded by petitioners, under all the
circumstances which exist.
I vote to grant the Petition for Certiorari because the
protection of the environment, including the forest
cover of our territory, is of extreme importance for the
country. The doctrines set out in the Court's decision
issued today should, however, be subjected to closer
examination.
 
 
# Separate Opinions
FELICIANO, J.,  concurring
I join in the result reached by my distinguished brother
in the Court, Davide, Jr., J., in this case which, to my
mind, is one of the most important cases decided by
this Court in the last few years. The seminal principles
laid down in this decision are likely to influence
profoundly the direction and course of the protection
and management of the environment, which of course
embraces the utilization of all the natural resources in
the territorial base of our polity. I have therefore
sought to clarify, basically to myself, what the Court
appears to be saying.
The Court explicitly states that petitioners have
the locus standi necessary to sustain the bringing
and, maintenance of this suit (Decision, pp. 11-
12). Locus standi is not a function of petitioners' claim
that their suit is properly regarded as a class suit. I
understand locus standi to refer to the legal interest
which a plaintiff must have in the subject matter of the
suit. Because of the very broadness of the concept of
"class" here involved — membership in this "class"
appears to embrace everyone living in the country
whether now or in the  contamination of ground water resources; loss of
future — it appears to me that everyone who may be
expected to benefit from the course of action
petitioners seek to require public respondents to take,
is vested with the necessary locus standi. The Court
may be seen therefore to be recognizing
a beneficiaries' right of action in the field of
environmental protection, as against both the public
administrative agency directly concerned and the
private persons or entities operating in the field or
sector of activity involved. Whether such beneficiaries'
right of action may be found under any and all
circumstances, or whether some failure to act, in the
first instance, on the part of the governmental agency
concerned must be shown ("prior exhaustion of
administrative remedies"), is not discussed in the
decision and presumably is left for future
determination in an appropriate case.
The Court has also declared that the complaint has
alleged and focused upon "one specific fundamental
legal right — the right to a balanced and healthful
ecology" (Decision, p. 14). There is no question that
"the right to a balanced and healthful ecology" is
"fundamental" and that, accordingly, it has been
"constitutionalized." But although it is fundamental in
character, I suggest, with very great respect, that it
cannot be characterized as "specific," without doing
excessive violence to language. It is in fact very
difficult to fashion language more comprehensive in
scope and generalized in character than a right to "a
balanced and healthful ecology." The list of particular
claims which can be subsumed under this rubic
appears to be entirely open-ended: prevention and
control of emission of toxic fumes and smoke from
factories and motor vehicles; of discharge of oil,
chemical effluents, garbage and raw sewage into
rivers, inland and coastal waters by vessels, oil rigs,
factories, mines and whole communities; of dumping
of organic and inorganic wastes on open land, streets
and thoroughfares; failure to rehabilitate land after
strip-mining or open-pit mining; kaingin or slash-and-
burn farming; destruction of fisheries, coral reefs and
other living sea resources through the use of
dynamite or cyanide and other chemicals;
certain species of fauna and flora; and so on. The
other statements pointed out by the Court: Section 3,
Executive Order No. 192 dated 10 June 1987; Section
1, Title XIV, Book IV of the 1987 Administrative Code;
and P.D. No. 1151, dated 6 June 1977 — all appear
to be formulations of  policy, as general and abstract
as the constitutional statements of basic policy in
Article II, Section 16 ("the right — to a balanced and
healthful ecology") and 15 ("the right to health").
P.D. No. 1152, also dated 6 June 1977, entitled "The
Philippine Environment Code," is, upon the other
hand, a compendious collection of more "specific
environment management policies" and "environment
quality standards" (fourth "Whereas" clause,
Preamble) relating to an extremely wide range of
topics:
(a) air quality management;
(b) water quality management;
(c) land use management;
(d) natural resources management and conservation
embracing:
(i) fisheries and aquatic resources;
(ii) wild life;
(iii) forestry and soil conservation;
(iv) flood control and natural calamities;
(v) energy development;
(vi) conservation and utilization of surface and ground
water
(vii) mineral resources
Two (2) points are worth making in this connection.
Firstly, neither petitioners nor the Court has identified
the particular provision or provisions (if any) of the
Philippine Environment Code which give rise to a
specific legal right which petitioners are seeking to
enforce. Secondly, the Philippine Environment Code
identifies with notable care the particular government
agency charged with the formulation and
implementation of guidelines and programs dealing
with each of the headings and sub-headings
mentioned above. The Philippine Environment Code
does not, in other words, appear to contemplate
action on the part of  private persons who are
beneficiaries of implementation of that Code.
As a matter of logic, by finding petitioners' cause of
action as anchored on a legal right comprised in the
constitutional statements above noted, the Court is in
effect saying that Section 15 (and Section 16) of
Article II of the Constitution are self-executing and
judicially enforceable even in their present form. The
implications of this doctrine will have to be explored in
future cases; those implications are too large and far-
reaching in nature even to be hinted at here.
My suggestion is simply that petitioners must, before
the trial court, show a more specific legal right — a
right cast in language of a significantly lower order of
generality than Article II (15) of the Constitution —
that is or may be violated by the actions, or failures to
act, imputed to the public respondent by petitioners so
that the trial court can validly render judgment
granting all or part of the relief prayed for. To my
mind, the Court should be understood as simply
saying that such a more specific legal right or
rights may  well exist in our corpus of law, considering
the general policy principles found in the Constitution
and the existence of the Philippine Environment
Code, and that the trial court should have given
petitioners an effective opportunity so to demonstrate,
instead of aborting the proceedings on a motion to
dismiss.
It seems to me important that the legal right which is
an essential component of a cause of action be a
specific, operable legal right, rather than a
constitutional or statutory  policy, for at least two (2)
reasons. One is that unless the legal right claimed to
have been violated or disregarded is given
specification in operational terms, defendants may
well be unable to defend themselves intelligently and
effectively; in other words, there are due process
dimensions to this matter.
The second is a broader-gauge consideration —
where a specific violation of law or applicable
regulation is not alleged or proved, petitioners can be
expected to fall back on the expanded conception of
judicial power in the second paragraph of Section 1 of
Article VIII of the Constitution which reads:
Section 1. . . .
Judicial power includes the duty of the courts of
justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to
determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or
instrumentality of the Government. (Emphasis
supplied)
When substantive standards as general as "the right
to a balanced and healthy ecology" and "the right to
health" are combined with remedial standards as
broad ranging as "a grave abuse of discretion
amounting to lack or excess of jurisdiction," the result
will be, it is respectfully submitted, to propel courts
into the uncharted ocean of social and economic
policy making. At least in respect of the vast area of
environmental protection and management, our
courts have no claim to special technical competence
and experience and professional qualification. Where
no specific, operable norms and standards are shown
to exist, then the policy making departments — the
legislative and executive departments — must be
given a real and effective opportunity to fashion and
promulgate those norms and standards, and to
implement them before the courts should intervene.
My learned brother Davide, Jr., J., rightly insists that
the timber companies, whose concession agreements
or TLA's petitioners demand public respondents
should cancel, must be impleaded in the proceedings
below. It might be asked that, if petitioners'
entitlement to the relief demanded is not dependent
upon proof of breach by the timber companies of one
or more of the specific terms and conditions of their
concession agreements (and this, petitioners implicitly
assume), what will those companies litigate about?
The answer I suggest is that they may seek to dispute
the existence of the specific legal right petitioners
should allege, as well as the reality of the claimed
factual nexus between petitioners' specific legal rights
and the claimed wrongful acts or failures to act of
public respondent administrative agency. They may
also controvert the appropriateness of the remedy or
remedies demanded by petitioners, under all the
circumstances which exist.
I vote to grant the Petition for Certiorari because the
protection of the environment, including the forest
cover of our territory, is of extreme importance for the
country. The doctrines set out in the Court's decision
issued today should, however, be subjected to closer
examination.
G.R. No. 159357             April 28, 2004
Brother MARIANO "MIKE" Z. VELARDE, petitioner, 
vs.
SOCIAL JUSTICE SOCIETY, respondent.
DECISION
PANGANIBAN, J.:
A decision that does not conform to the form and
substance required by the Constitution and the law is
void and deemed legally inexistent. To be valid,
decisions should comply with the form, the procedure
and the substantive requirements laid out in the
Constitution, the Rules of Court and relevant
circulars/orders of the Supreme Court. For the
guidance of the bench and the bar, the Court hereby
discusses these forms, procedures and requirements.
The Case
Before us is a Petition for Review1 under Rule 45 of
the Rules of Court, assailing the June 12, 2003
Decision2 and July 29, 2003 Order3 of the Regional
Trial Court (RTC) of Manila (Branch 49).4
The challenged Decision was the offshoot of a
Petition for Declaratory Relief5 filed before the RTC-
Manila by herein Respondent Social Justice Society
(SJS) against herein Petitioner Mariano "Mike" Z.
Velarde, together with His Eminence, Jaime Cardinal
Sin, Executive Minister Eraño Manalo, Brother Eddie
Villanueva and Brother Eliseo F. Soriano as co-
respondents. The Petition prayed for the resolution of
the question "whether or not the act of a religious
leader like any of herein respondents, in endorsing
the candidacy of a candidate for elective office or in
urging or requiring the members of his flock to vote for
a specified candidate, is violative of the letter or spirit
of the constitutional provisions x x x."6
Alleging that the questioned Decision did not contain
a statement of facts and a dispositive portion, herein
petitioner filed a Clarificatory Motion and Motion for
Reconsideration before the trial court. Soriano, his co-
respondent, similarly filed a separate Motion for
Reconsideration. In response, the trial court issued
the assailed Order, which held as follows:
"x x x [T]his Court cannot reconsider, because what it
was asked to do, was only to clarify a Constitutional
provision and to declare whether acts are violative
thereof. The Decision did not make a dispositive
portion because a dispositive portion is required only
in coercive reliefs, where a redress from wrong
suffered and the benefit that the prevailing party
wronged should get. The step that these movants
have to take, is direct appeal under Rule 45 of the
Rules of Court, for a conclusive interpretation of the
Constitutional provision to the Supreme Court."7
The Antecedent Proceedings
On January 28, 2003, SJS filed a Petition for
Declaratory Relief ("SJS Petition") before the RTC-
Manila against Velarde and his aforesaid co-
respondents. SJS, a registered political party, sought
the interpretation of several constitutional
provisions,8 specifically on the separation of church
and state; and a declaratory judgment on the
constitutionality of the acts of religious leaders
endorsing a candidate for an elective office, or urging
or requiring the members of their flock to vote for a
specified candidate.
The subsequent proceedings were recounted in the
challenged Decision in these words:
"x x x. Bro. Eddie Villanueva submitted, within the
original period [to file an Answer], a Motion to
Dismiss. Subsequently, Executive Minister Eraño
Manalo and Bro. Mike Velarde, filed their Motions to
Dismiss. While His Eminence Jaime Cardinal L. Sin,
filed a Comment and Bro. Eli Soriano, filed an Answer
within the extended period and similarly prayed for the
dismissal of the Petition. All sought the dismissal of
the Petition on the common grounds that it does not
state a cause of action and that there is no justiciable
controversy. They were ordered to submit a pleading
by way of advisement, which was closely followed by
another Order denying all the Motions to Dismiss.
Bro. Mike Velarde, Bro. Eddie Villanueva and
Executive Minister Eraño Manalo moved to reconsider
the denial. His Eminence Jaime Cardinal L. Sin,
asked for extension to file memorandum. Only Bro. Eli
Soriano complied with the first Order by submitting his
Memorandum. x x x.
"x x x the Court denied the Motions to Dismiss, and
the Motions for Reconsideration filed by Bro. Mike
Velarde, Bro. Eddie Villanueva and Executive Minister
Eraño Manalo, which raised no new arguments other
than those already considered in the motions to
dismiss x x x."9
After narrating the above incidents, the trial court said
that it had jurisdiction over the Petition, because "in
praying for a determination as to whether the actions
imputed to the respondents are violative of Article II,
Section 6 of the Fundamental Law, [the Petition] has
raised only a question of law."10 It then proceeded to a
lengthy discussion of the issue raised in the Petition –
the separation of church and state – even tracing, to
some extent, the historical background of the
principle. Through its discourse, the court a
quo opined at some point that the "[e]ndorsement of
specific candidates in an election to any public office
is a clear violation of the separation clause."11
After its essay on the legal issue, however, the trial
court failed to include a dispositive portion in its
assailed Decision. Thus, Velarde and Soriano filed
separate Motions for Reconsideration which, as
mentioned earlier, were denied by the lower court.
Hence, this Petition for Review.12
This Court, in a Resolution13 dated September 2,
2003, required SJS and the Office of the Solicitor
General (OSG) to submit their respective comments.
In the same Resolution, the Court gave the other
parties -- impleaded as respondents in the original
case below --the opportunity to comment, if they so
desired.
On April 13, 2004, the Court en banc conducted an
Oral Argument.14
The Issues
In his Petition, Brother Mike Velarde submits the
following issues for this Court’s resolution:
"1. Whether or not the Decision dated 12 June 2003
rendered by the court a quo was proper and valid;
"2. Whether or not there exists justiceable controversy
in herein respondent’s Petition for declaratory relief;
"3. Whether or not herein respondent has legal
interest in filing the Petition for declaratory relief;
"4. Whether or not the constitutional question sought
to be resolved by herein respondent is ripe for judicial
determination;
"5. Whether or not there is adequate remedy other
than the declaratory relief; and,
"6. Whether or not the court a quo has jurisdiction
over the Petition for declaratory relief of herein
respondent."15
During the Oral Argument, the issues were narrowed
down and classified as follows:
"A. Procedural Issues
"Did the Petition for Declaratory Relief raise a
justiciable controversy? Did it state a cause of action?
Did respondent have any legal standing to file the
Petition for Declaratory Relief?
"B. Substantive Issues
"1. Did the RTC Decision conform to the form and
substance required by the Constitution, the law and
the Rules of Court?
"2. May religious leaders like herein petitioner, Bro.
Mike Velarde, be prohibited from endorsing
candidates for public office? Corollarily, may they be
banned from campaigning against said candidates?"
The Court’s Ruling
The Petition of Brother Mike Velarde is meritorious.
Procedural Issues:
Requisites of Petitions for Declaratory Relief
Section 1 of Rule 63 of the Rules of Court, which
deals with petitions for declaratory relief, provides in
part:
"Section 1. Who may file petition.- Any person
interested under a deed, will, contract or other written
instrument, whose rights are affected by a statute,
executive order or regulation, ordinance, or any other
governmental regulation may, before breach or
violation thereof, bring an action in the appropriate
Regional Trial Court to determine any question of
construction or validity arising, and for a declaration of
his rights or duties thereunder."
Based on the foregoing, an action for declaratory
relief should be filed by a person interested under a
deed, a will, a contract or other written instrument,
and whose rights are affected by a statute, an
executive order, a regulation or an ordinance. The
purpose of the remedy is to interpret or to determine
the validity of the written instrument and to seek a
judicial declaration of the parties’ rights or duties
thereunder.16 The essential requisites of the action are
as follows: (1) there is a justiciable controversy; (2)
the controversy is between persons whose interests
are adverse; (3) the party seeking the relief has a
legal interest in the controversy; and (4) the issue is
ripe for judicial determination.17
Justiciable Controversy
Brother Mike Velarde contends that the SJS Petition
failed to allege, much less establish before the trial
court, that there existed a justiciable controversy or an
adverse legal interest between them; and that SJS
had a legal right that was being violated or threatened
to be violated by petitioner. On the contrary, Velarde
alleges that SJS premised its action on mere
speculations, contingent events, and hypothetical
issues that had not yet ripened into an actual
controversy. Thus, its Petition for Declaratory Relief
must fail.
A justiciable controversy refers to an existing case or
controversy that is appropriate or ripe for judicial
determination, not one that is conjectural or merely
anticipatory.18 The SJS Petition for Declaratory Relief
fell short of this test. It miserably failed to allege an
existing controversy or dispute between the petitioner
and the named respondents therein. Further, the
Petition did not sufficiently state what specific legal
right of the petitioner was violated by the respondents
therein; and what particular act or acts of the latter
were in breach of its rights, the law or the
Constitution.
As pointed out by Brother Eliseo F. Soriano in his
Comment,19 what exactly has he done that merited
the attention of SJS? He confesses that he does not
know the answer, because the SJS Petition (as well
as the assailed Decision of the RTC) "yields nothing
in this respect." His Eminence, Jaime Cardinal Sin,
adds that, at the time SJS filed its Petition on January
28, 2003, the election season had not even started
yet; and that, in any event, he has not been actively
involved in partisan politics.
An initiatory complaint or petition filed with the trial
court should contain "a plain, concise and direct
statement of the ultimate facts on which the party
pleading relies for his claim x x x."20 Yet, the SJS
Petition stated no ultimate facts.
Indeed, SJS merely speculated or anticipated without
factual moorings that, as religious leaders, the
petitioner and his co-respondents below had
endorsed or threatened to endorse a candidate or
candidates for elective offices; and that such actual or
threatened endorsement "will enable [them] to elect
men to public office who [would] in turn be forever
beholden to their leaders, enabling them to control the
government"[;]21 and "pos[ing] a clear and present
danger of serious erosion of the people’s faith in the
electoral process[;] and reinforc[ing] their belief that
religious leaders determine the ultimate result of
elections,"22 which would then be violative of the
separation clause.
Such premise is highly speculative and merely
theoretical, to say the least. Clearly, it does not suffice
to constitute a justiciable controversy. The Petition
does not even allege any indication or manifest intent
on the part of any of the respondents below to
champion an electoral candidate, or to urge their so-
called flock to vote for, or not to vote for, a particular
candidate. It is a time-honored rule that sheer
speculation does not give rise to an actionable right.
Obviously, there is no factual allegation that SJS’
rights are being subjected to any threatened,
imminent and inevitable violation that should be
prevented by the declaratory relief sought. The
judicial power and duty of the courts to settle actual
controversies involving rights that are legally
demandable and enforceable23 cannot be exercised
when there is no actual or threatened violation of a
legal right.
All that the 5-page SJS Petition prayed for was "that
the question raised in paragraph 9 hereof be
resolved."24 In other words, it merely sought an
opinion of the trial court on whether the speculated
acts of religious leaders endorsing elective candidates
for political offices violated the constitutional principle
on the separation of church and state. SJS did not
ask for a declaration of its rights and duties; neither
did it pray for the stoppage of any threatened violation
of its declared rights. Courts, however, are proscribed
from rendering an advisory opinion.25
Cause of Action
Respondent SJS asserts that in order to maintain a
petition for declaratory relief, a cause of action need
not be alleged or proven. Supposedly, for such
petition to prosper, there need not be any violation of
a right, breach of duty or actual wrong committed by
one party against the other.
Petitioner, on the other hand, argues that the subject
matter of an action for declaratory relief should be a
deed, a will, a contract (or other written instrument), a
statute, an executive order, a regulation or an
ordinance. But the subject matter of the SJS Petition
is "the constitutionality of an act of a religious leader
to endorse the candidacy of a candidate for elective
office or to urge or require the members of the flock to
vote for a specified candidate."26According to
petitioner, this subject matter is "beyond the realm of
an action for declaratory relief."27 Petitioner avers that
in the absence of a valid subject matter, the Petition
fails to state a cause of action and, hence, should
have been dismissed outright by the court a quo.
A cause of action is an act or an omission of one
party in violation of the legal right or rights of another,
causing injury to the latter.28 Its essential elements are
the following: (1) a right in favor of the plaintiff; (2) an
obligation on the part of the named defendant to
respect or not to violate such right; and (3) such
defendant’s act or omission that is violative of the
right of the plaintiff or constituting a breach of the
obligation of the former to the latter.29
The failure of a complaint to state a cause of action is
a ground for its outright dismissal.30 However, in
special civil actions for declaratory relief, the concept
of a cause of action under ordinary civil actions does
not strictly apply. The reason for this exception is that
an action for declaratory relief presupposes that there
has been no actual breach of the instruments involved
or of rights arising thereunder.31 Nevertheless, a
breach or violation should be impending, imminent or
at least threatened.
A perusal of the Petition filed by SJS before the RTC
discloses no explicit allegation that the former had
any legal right in its favor that it sought to protect. We
can only infer the interest, supposedly in its favor,
from its bare allegation that it "has thousands of
members who are citizens-taxpayers-registered
voters and who are keenly interested in a judicial
clarification of the constitutionality of the partisan
participation of religious leaders in Philippine politics
and in the process to insure adherence to the
Constitution by everyone x x x."32
Such general averment does not, however, suffice to
constitute a legal right or interest. Not only is the
presumed interest not personal in character; it is
likewise too vague, highly speculative and
uncertain.33 The Rules require that the interest must
be material to the issue and affected by the
questioned act or instrument, as distinguished from
simple curiosity or incidental interest in the question
raised.34
To bolster its stance, SJS cites the Corpus Juris
Secundum and submits that the "[p]laintiff in a
declaratory judgment action does not seek to enforce
a claim against [the] defendant, but seeks a judicial
declaration of [the] rights of the parties for the
purpose of guiding [their] future conduct, and the
essential distinction between a ‘declaratory judgment
action’ and the usual ‘action’ is that no actual wrong
need have been committed or loss have occurred in
order to sustain the declaratory judgment action,
although there must be no uncertainty that the loss
will occur or that the asserted rights will be invaded."35
SJS has, however, ignored the crucial point of its own
reference – that there must be no uncertainty that the
loss will occur or that the asserted rights will be
invaded. Precisely, as discussed earlier, it merely
conjectures that herein petitioner (and his co-
respondents below) might actively participate in
partisan politics, use "the awesome voting strength of
its faithful flock [to] enable it to elect men to public
office x x x, enabling [it] to control the government."36
During the Oral Argument, though, Petitioner Velarde
and his co-respondents below all strongly asserted
that they had not in any way engaged or intended to
participate in partisan politics. They all firmly assured
this Court that they had not done anything to trigger
the issue raised and to entitle SJS to the relief sought.
Indeed, the Court finds in the Petition for Declaratory
Relief no single allegation of fact upon which SJS
could base a right of relief from the named
respondents. In any event, even granting that it
sufficiently asserted a legal right it sought to protect,
there was nevertheless no certainty that such right
would be invaded by the said respondents. Not even
the alleged proximity of the elections to the time the
Petition was filed below (January 28, 2003) would
have provided the certainty that it had a legal right
that would be jeopardized or violated by any of those
respondents.
Legal Standing
Legal standing or locus standi has been defined as a
personal and substantial interest in the case, such
that the party has sustained or will sustain direct injury
as a result of the challenged act.37 Interest means a
material interest in issue that is affected by the
questioned act or instrument, as distinguished from a
mere incidental interest in the question involved.38
Petitioner alleges that "[i]n seeking declaratory relief
as to the constitutionality of an act of a religious
leader to endorse, or require the members of the
religious flock to vote for a specific candidate, herein
Respondent SJS has no legal interest in the
controversy";39 it has failed to establish how the
resolution of the proffered question would benefit or
injure it.
Parties bringing suits challenging the constitutionality
of a law, an act or a statute must show "not only that
the law [or act] is invalid, but also that [they have]
sustained or [are] in immediate or imminent danger of
sustaining some direct injury as a result of its
enforcement, and not merely that [they] suffer thereby
in some indefinite way."40 They must demonstrate that
they have been, or are about to be, denied some right
or privilege to which they are lawfully entitled, or that
they are about to be subjected to some burdens or
penalties by reason of the statute or act complained
of.41
First, parties suing as taxpayers must specifically
prove that they have sufficient interest in preventing
the illegal expenditure of money raised by
taxation.42 A taxpayer’s action may be properly
brought only when there is an exercise by Congress
of its taxing or spending power.43 In the present case,
there is no allegation, whether express or implied, that
taxpayers’ money is being illegally disbursed.
Second, there was no showing in the Petition for
Declaratory Relief that SJS as a political party or its
members as registered voters would be adversely
affected by the alleged acts of the respondents below,
if the question at issue was not resolved. There was
no allegation that SJS had suffered or would be
deprived of votes due to the acts imputed to the said
respondents. Neither did it allege that any of its
members would be denied the right of suffrage or the
privilege to be voted for a public office they are
seeking.
Finally, the allegedly keen interest of its "thousands of
members who are citizens-taxpayers-registered
voters" is too general44 and beyond the contemplation
of the standards set by our jurisprudence. Not only is
the presumed interest impersonal in character; it is
likewise too vague, highly speculative and uncertain
to satisfy the requirement of standing.45
Transcendental Importance
In any event, SJS urges the Court to take cognizance
of the Petition, even sans legal standing, considering
that "the issues raised are of paramount public
interest."
In not a few cases, the Court has liberalized the locus
standi requirement when a petition raises an issue of
transcendental significance or paramount importance
to the people.46 Recently, after holding that the IBP
had no locus standi to bring the suit, the Court in IBP
v. Zamora47 nevertheless entertained the Petition
therein. It noted that "the IBP has advanced
constitutional issues which deserve the attention of
this Court in view of their seriousness, novelty and
weight as precedents."48
Similarly in the instant case, the Court deemed the
constitutional issue raised in the SJS Petition to be of
paramount interest to the Filipino people. The issue
did not simply concern a delineation of the separation
between church and state, but ran smack into the
governance of our country. The issue was both
transcendental in importance and novel in nature,
since it had never been decided before.
The Court, thus, called for Oral Argument to
determine with certainty whether it could resolve the
constitutional issue despite the barren allegations in
the SJS Petition as well as the abbreviated
proceedings in the court below. Much to its chagrin,
however, counsels for the parties -- particularly for
Respondent SJS -- made no satisfactory allegations
or clarifications that would supply the deficiencies
hereinabove discussed. Hence, even if the Court
would exempt this case from the stringent locus
standi requirement, such heroic effort would be futile
because the transcendental issue cannot be resolved
anyway.
Proper Proceedings Before the Trial Court
To prevent a repetition of this waste of precious
judicial time and effort, and for the guidance of the
bench and the bar, the Court reiterates
the elementary procedure49 that must be followed by
trial courts in the conduct of civil cases.50
Prefatorily, the trial court may -- motu proprio or upon
motion of the defendant -- dismiss a complaint51 (or
petition, in a special civil action) that does not allege
the plaintiff’s (or petitioner’s) cause or causes of
action.52 A complaint or petition should contain "a
plain, concise and direct statement of the ultimate
facts on which the party pleading relies for his claim
or defense."53 It should likewise clearly specify the
relief sought.54
Upon the filing of the complaint/petition and the
payment of the requisite legal fees, the clerk of court
shall forthwith issue the corresponding summons to
the defendants or the respondents, with a directive
that the defendant answer55 within 15 days, unless a
different period is fixed by the court.56 The summons
shall also contain a notice that if such answer is not
filed, the plaintiffs/petitioners shall take a judgment by
default and may be granted the relief applied
for.57 The court, however, may -- upon such terms as
may be just -- allow an answer to be filed after the
time fixed by the Rules.58
If the answer sets forth a counterclaim or cross-claim,
it must be answered within ten (10) days from
service.59 A reply may be filed within ten (10) days
from service of the pleading responded to.60
When an answer fails to tender an issue or admits the
material allegations of the adverse party’s pleading,
the court may, on motion of that party, direct judgment
on such pleading (except in actions for declaration of
nullity or annulment of marriage or for legal
separation).61 Meanwhile, a party seeking to recover
upon a claim, a counterclaim or crossclaim -- or to
obtain a declaratory relief -- may, at any time after the
answer thereto has been served, move for a summary
judgment in its favor.62 Similarly, a party against whom
a claim, a counterclaim or crossclaim is asserted -- or
a declaratory relief sought -- may, at any time, move
for a summary judgment in its favor.63 After the motion
is heard, the judgment sought shall be rendered
forthwith if there is a showing that, except as to the
amount of damages, there is no genuine issue as to
any material fact; and that the moving party is entitled
to a judgment as a matter of law.64
Within the time for -- but before -- filing the answer to
the complaint or petition, the defendant may file a
motion to dismiss based on any of the grounds stated
in Section 1 of Rule 16 of the Rules of Court. During
the hearing of the motion, the parties shall submit
their arguments on the questions of law, and their
evidence on the questions of fact.65 After the hearing,
the court may dismiss the action or claim, deny the
motion, or order the amendment of the pleadings. It
shall not defer the resolution of the motion for the
reason that the ground relied upon is not indubitable.
In every case, the resolution shall state clearly and
distinctly the reasons therefor.66
If the motion is denied, the movant may file an answer
within the balance of the period originally prescribed
to file an answer, but not less than five (5) days in any
event, computed from the receipt of the notice of the
denial. If the pleading is ordered to be amended, the
defendant shall file an answer within fifteen (15) days,
counted from the service of the amended pleading,
unless the court provides a longer period.67
After the last pleading has been served and filed, the
case shall be set for pretrial,68 which is a mandatory
proceeding.69 A plaintiff’s/ petitioner’s (or its duly
authorized representative’s) non-appearance at the
pretrial, if without valid cause, shall result in the
dismissal of the action with prejudice, unless the court
orders otherwise. A similar failure on the part of the
defendant shall be a cause for allowing the
plaintiff/petitioner to present evidence ex parte, and
the court to render judgment on the basis thereof.70
The parties are required to file their pretrial briefs;
failure to do so shall have the same effect as failure to
appear at the pretrial.71 Upon the termination thereof,
the court shall issue an order reciting in detail the
matters taken up at the conference; the action taken
on them, the amendments allowed to the pleadings;
and the agreements or admissions, if any, made by
the parties regarding any of the matters
considered.72 The parties may further avail
themselves of any of the modes of discovery,73 if they
so wish.
Thereafter, the case shall be set for trial,74 in which
the parties shall adduce their respective evidence in
support of their claims and/or defenses. By their
written consent or upon the application of either party,
or on its own motion, the court may also order any or
all of the issues to be referred to a commissioner, who
is to be appointed by it or to be agreed upon by the
parties.75 The trial or hearing before the commissioner
shall proceed in all respects as it would if held before
the court.76
Upon the completion of such proceedings, the
commissioner shall file with the court a written report
on the matters referred by the parties.77 The report
shall be set for hearing, after which the court shall
issue an order adopting, modifying or rejecting it in
whole or in part; or recommitting it with instructions; or
requiring the parties to present further evidence
before the commissioner or the court.78
Finally, a judgment or final order determining the
merits of the case shall be rendered. The decision
shall be in writing, personally and directly prepared by
the judge, stating clearly and distinctly the facts and
the law on which it is based, signed by the issuing
magistrate, and filed with the clerk of court.79
Based on these elementary guidelines, let us examine
the proceedings before the trial court in the instant
case.
First, with respect to the initiatory pleading of the SJS.
Even a cursory perusal of the Petition immediately
reveals its gross inadequacy. It contained no
statement of ultimate facts upon which the petitioner
relied for its claim. Furthermore, it did not specify the
relief it sought from the court, but merely asked it to
answer a hypothetical question.
Relief, as contemplated in a legal action, refers to a
specific coercive measure prayed for as a result of a
violation of the rights of a plaintiff or a petitioner.80 As
already discussed earlier, the Petition before the trial
court had no allegations of fact81 or of any specific
violation of the petitioner’s rights, which the
respondents had a duty to respect. Such deficiency
amounted to a failure to state a cause of action;
hence, no coercive relief could be sought and
adjudicated. The Petition evidently lacked substantive
requirements and, we repeat, should have been
dismissed at the outset.
Second, with respect to the trial court proceedings.
Within the period set to file their respective answers to
the SJS Petition, Velarde, Villanueva and Manalo filed
Motions to Dismiss; Cardinal Sin, a Comment; and
Soriano, within a priorly granted extended period, an
Answer in which he likewise prayed for the dismissal
of the Petition.82 SJS filed a Rejoinder to the Motion of
Velarde, who subsequently filed a Sur-Rejoinder.
Supposedly, there were "several scheduled settings,
in which the "[c]ourt was apprised of the respective
positions of the parties."83 The nature of such settings
-- whether pretrial or trial hearings -- was not
disclosed in the records. Before ruling on the Motions
to Dismiss, the trial court issued an Order84 dated May
8, 2003, directing the parties to submit their
memoranda. Issued shortly thereafter was another
Order85 dated May 14, 2003, denying all the Motions
to Dismiss.
In the latter Order, the trial court perfunctorily ruled:
"The Court now resolves to deny the Motions to
Dismiss, and after all the memoranda are submitted,
then, the case shall be deemed as submitted for
resolution."86
Apparently, contrary to the requirement of Section 2
of Rule 16 of the Rules of Court, the Motions were not
heard. Worse, the Order purportedly resolving the
Motions to Dismiss did not state any reason at all for
their denial, in contravention of Section 3 of the said
Rule 16. There was not even any statement of the
grounds relied upon by the Motions; much less, of the
legal findings and conclusions of the trial court.
Thus, Velarde, Villanueva and Manalo moved for
reconsideration. Pending the resolution of these
Motions for Reconsideration, Villanueva filed a Motion
to suspend the filing of the parties’ memoranda. But
instead of separately resolving the pending Motions
fairly and squarely, the trial court again transgressed
the Rules of Court when it immediately proceeded to
issue its Decision, even before tackling the issues
raised in those Motions.
Furthermore, the RTC issued its "Decision" without
allowing the parties to file their answers. For this
reason, there was no joinder of the issues. If only it
had allowed the filing of those answers, the trial court
would have known, as the Oral Argument revealed,
that the petitioner and his co-respondents below had
not committed or threatened to commit the act
attributed to them (endorsing candidates) -- the act
that was supposedly the factual basis of the suit.
Parenthetically, the court a quo further failed to give a
notice of the Petition to the OSG, which was entitled
to be heard upon questions involving the
constitutionality or validity of statutes and other
measures.87
Moreover, as will be discussed in more detail, the
questioned Decision of the trial court was utterly
wanting in the requirements prescribed by the
Constitution and the Rules of Court.
All in all, during the loosely abbreviated proceedings
of the case, the trial court indeed acted with
inexplicable haste, with total ignorance of the law --
or, worse, in cavalier disregard of the rules of
procedure -- and with grave abuse of discretion.
Contrary to the contentions of the trial judge and of
SJS, proceedings for declaratory relief must still follow
the process described above -- the petition must state
a cause of action; the proceedings must undergo the
procedure outlined in the Rules of Court; and the
decision must adhere to constitutional and legal
requirements.
First Substantive Issue:
Fundamental Requirements of a Decision
The Constitution commands that "[n]o decision shall
be rendered by any court without expressing therein
clearly and distinctly the facts and the law on which it
is based. No petition for review or motion for
reconsideration of a decision of the court shall be
refused due course or denied without stating the basis
therefor."88
Consistent with this constitutional mandate, Section 1
of Rule 36 of the Rules on Civil Procedure similarly
provides:
"Sec. 1. Rendition of judgments and final orders. – A
judgment or final order determining the merits of the
case shall be in writing personally and directly
prepared by the judge, stating clearly and distinctly
the facts and the law on which it is based, signed by
him and filed with the clerk of court."
In the same vein, Section 2 of Rule 120 of the Rules
of Court on Criminal Procedure reads as follows:
"Sec. 2. Form and contents of judgments. -- The
judgment must be written in the official language,
personally and directly prepared by the judge and
signed by him and shall contain clearly and distinctly
a statement of the facts proved or admitted by the
accused and the law upon which the judgment is
based.
"x x x           x x x           x x x."
Pursuant to the Constitution, this Court also issued on
January 28, 1988, Administrative Circular No. 1,
prompting all judges "to make complete findings of
facts in their decisions, and scrutinize closely the legal
aspects of the case in the light of the evidence
presented. They should avoid the tendency to
generalize and form conclusions without detailing the
facts from which such conclusions are deduced."
In many cases,89 this Court has time and time again
reminded "magistrates to heed the demand of Section
14, Article VIII of the Constitution." The Court, through
Chief Justice Hilario G. Davide Jr. in Yao v. Court of
Appeals,90discussed at length the implications of this
provision and strongly exhorted thus:
"Faithful adherence to the requirements of Section 14,
Article VIII of the Constitution is indisputably a
paramount component of due process and fair play. It
is likewise demanded by the due process clause of
the Constitution. The parties to a litigation should be
informed of how it was decided, with an explanation of
the factual and legal reasons that led to the
conclusions of the court. The court cannot simply say
that judgment is rendered in favor of X and against Y
and just leave it at that without any justification
whatsoever for its action. The losing party is entitled
to know why he lost, so he may appeal to the higher
court, if permitted, should he believe that the decision
should be reversed. A decision that does not clearly
and distinctly state the facts and the law on which it is
based leaves the parties in the dark as to how it was
reached and is precisely prejudicial to the losing
party, who is unable to pinpoint the possible errors of
the court for review by a higher tribunal. More than
that, the requirement is an assurance to the parties
that, in reaching judgment, the judge did so through
the processes of legal reasoning. It is, thus, a
safeguard against the impetuosity of the judge,
preventing him from deciding ipse dixit. Vouchsafed
neither the sword nor the purse by the Constitution
but nonetheless vested with the sovereign prerogative
of passing judgment on the life, liberty or property of
his fellowmen, the judge must ultimately depend on
the power of reason for sustained public confidence in
the justness of his decision."
In People v. Bugarin,91 the Court also explained:
"The requirement that the decisions of courts must be
in writing and that they must set forth clearly and
distinctly the facts and the law on which they are
based serves many functions. It is intended, among
other things, to inform the parties of the reason or
reasons for the decision so that if any of them
appeals, he can point out to the appellate court the
finding of facts or the rulings on points of law with
which he disagrees. More than that, the requirement
is an assurance to the parties that, in reaching
judgment, the judge did so through the processes of
legal reasoning. x x x."
Indeed, elementary due process demands that the
parties to a litigation be given information on how the
case was decided, as well as an explanation of the
factual and legal reasons that led to the conclusions
of the court.92
In Madrid v. Court of Appeals,93 this Court had
instructed magistrates to exert effort to ensure that
their decisions would present a comprehensive
analysis or account of the factual and legal findings
that would substantially address the issues raised by
the parties.
In the present case, it is starkly obvious that the
assailed Decision contains no statement of facts --
much less an assessment or analysis thereof -- or of
the court’s findings as to the probable facts. The
assailed Decision begins with a statement of the
nature of the action and the question or issue
presented. Then follows a brief explanation of the
constitutional provisions involved, and what the
Petition sought to achieve. Thereafter, the ensuing
procedural incidents before the trial court are tracked.
The Decision proceeds to a full-length opinion on the
nature and the extent of the separation of church and
state. Without expressly stating the final conclusion
she has reached or specifying the relief granted or
denied, the trial judge ends her "Decision" with the
clause "SO ORDERED."
What were the antecedents that necessitated the
filing of the Petition? What exactly were the distinct
facts that gave rise to the question sought to be
resolved by SJS? More important, what were the
factual findings and analysis on which the trial court
based its legal findings and conclusions? None were
stated or implied. Indeed, the RTC’s Decision cannot
be upheld for its failure to express clearly and
distinctly the facts on which it was based. Thus, the
trial court clearly transgressed the constitutional
directive.
The significance of factual findings lies in the value of
the decision as a precedent. How can it be so if one
cannot apply the ruling to similar circumstances,
simply because such circumstances are unknown?
Otherwise stated, how will the ruling be applied in the
future, if there is no point of factual comparison?
Moreover, the court a quo did not include a resolutory
or dispositive portion in its so-called Decision. The
importance of such portion was explained in the early
case Manalang v. Tuason de Rickards,94 from which
we quote:
"The resolution of the Court on a given issue as
embodied in the dispositive part of the decision or
order is the investitive or controlling factor that
determines and settles the rights of the parties and
the questions presented therein, notwithstanding the
existence of statements or declaration in the body of
said order that may be confusing."
The assailed Decision in the present case leaves us
in the dark as to its final resolution of the Petition. To
recall, the original Petition was for declaratory relief.
So, what relief did the trial court grant or deny? What
rights of the parties did it conclusively declare? Its
final statement says, "SO ORDERED." But what
exactly did the court order? It had the temerity to label
its issuance a "Decision," when nothing was in fact
decided.
Respondent SJS insists that the dispositive portion
can be found in the body of the assailed Decision. It
claims that the issue is disposed of and the Petition
finally resolved by the statement of the trial court
found on page 10 of its 14-page Decision, which
reads: "Endorsement of specific candidates in an
election to any public office is a clear violation of the
separation clause."95
We cannot agree.
In Magdalena Estate, Inc. v. Caluag,96 the obligation
of the party imposed by the Court was allegedly
contained in the text of the original Decision. The
Court, however, held:
"x x x The quoted finding of the lower court cannot
supply deficiencies in the dispositive portion. It is a
mere opinion of the court and the rule is settled that
where there is a conflict between the dispositive part
and the opinion, the former must prevail over the
latter on the theory that the dispositive portion is the
final order while the opinion is merely a statement
ordering nothing." (Italics in the original)
Thus, the dispositive portion cannot be deemed to be
the statement quoted by SJS and embedded in the
last paragraph of page 10 of the assailed 14-page
Decision. If at all, that statement is merely an answer
to a hypothetical legal question and just a part of the
opinion of the trial court. It does not conclusively
declare the rights (or obligations) of the parties to the
Petition. Neither does it grant any -- much less, the
proper -- relief under the circumstances, as required
of a dispositive portion.
Failure to comply with the constitutional injunction is a
grave abuse of discretion amounting to lack or excess
of jurisdiction. Decisions or orders issued in careless
disregard of the constitutional mandate are a patent
nullity and must be struck down as void.97
Parts of a Decision
In general, the essential parts of a good decision
consist of the following: (1) statement of the case; (2)
statement of facts; (3) issues or assignment of errors;
(4) court ruling, in which each issue is, as a rule,
separately considered and resolved; and, finally, (5)
dispositive portion. The ponente may also opt to
include an introduction or a prologue as well as an
epilogue, especially in cases in which controversial or
novel issues are involved.98
An introduction may consist of a concise but
comprehensive statement of the principal factual or
legal issue/s of the case. In some cases -- particularly
those concerning public interest; or involving
complicated commercial, scientific, technical or
otherwise rare subject matters -- a longer introduction
or prologue may serve to acquaint readers with the
specific nature of the controversy and the issues
involved. An epilogue may be a summation of the
important principles applied to the resolution of the
issues of paramount public interest or significance. It
may also lay down an enduring philosophy of law or
guiding principle.
Let us now, again for the guidance of the bench and
the bar, discuss the essential parts of a good
decision.
1. Statement of the Case
The Statement of the Case consists of a legal
definition of the nature of the action. At the first
instance, this part states whether the action is a civil
case for collection, ejectment, quieting of title,
foreclosure of mortgage, and so on; or, if it is a
criminal case, this part describes the specific charge
-- quoted usually from the accusatory portion of the
information -- and the plea of the accused. Also
mentioned here are whether the case is being
decided on appeal or on a petition for certiorari, the
court of origin, the case number in the trial court, and
the dispositive portion of the assailed decision.
In a criminal case, the verbatim reproduction of the
criminal information serves as a guide in determining
the nature and the gravity of the offense for which the
accused may be found culpable. As a rule, the
accused cannot be convicted of a crime different from
or graver than that charged.
Also, quoting verbatim the text of the information is
especially important when there is a question on the
sufficiency of the charge, or on whether qualifying and
modifying circumstances have been adequately
alleged therein.
To ensure that due process is accorded, it is
important to give a short description of the
proceedings regarding the plea of the accused.
Absence of an arraignment, or a serious irregularity
therein, may render the judgment void, and further
consideration by the appellate court would be futile. In
some instances, especially in appealed cases, it
would also be useful to mention the fact of the
appellants’ detention, in order to dispose of the
preliminary query -- whether or not they have
abandoned their appeal by absconding or jumping
bail.
Mentioning the court of origin and the case number
originally assigned helps in facilitating the
consolidation of the records of the case in both the
trial and the appellate courts, after entry of final
judgment.
Finally, the reproduction of the decretal portion of the
assailed decision informs the reader of how the
appealed case was decided by the court a quo.
2. Statement of Facts
There are different ways of relating the facts of the
case. First, under the objective or reportorial method,
the judge summarizes -- without comment -- the
testimony of each witness and the contents of each
exhibit. Second, under the synthesis method, the
factual theory of the plaintiff or prosecution and then
that of the defendant or defense is summarized
according to the judge’s best light. Third, in the
subjective method, the version of the facts accepted
by the judge is simply narrated without explaining
what the parties’ versions are. Finally, through a
combination of objective and subjective means, the
testimony of each witness is reported and the judge
then formulates his or her own version of the facts.
In criminal cases, it is better to present both the
version of the prosecution and that of the defense, in
the interest of fairness and due process. A detailed
evaluation of the contentions of the parties must
follow. The resolution of most criminal cases, unlike
civil and other cases, depends to a large extent on the
factual issues and the appreciation of the evidence.
The plausibility or the implausibility of each version
can sometimes be initially drawn from a reading of the
facts. Thereafter, the bases of the court in arriving at
its findings and conclusions should be explained.
On appeal, the fact that the assailed decision of the
lower court fully, intelligently and correctly resolved all
factual and legal issues involved may partly explain
why the reviewing court finds no reason to reverse the
findings and conclusions of the former. Conversely,
the lower court’s patent misappreciation of the facts or
misapplication of the law would aid in a better
understanding of why its ruling is reversed or
modified.
In appealed civil cases, the opposing sets of facts no
longer need to be presented. Issues for resolution
usually involve questions of law, grave abuse of
discretion, or want of jurisdiction; hence, the facts of
the case are often undisputed by the parties. With few
exceptions, factual issues are not entertained in non-
criminal cases. Consequently, the narration of facts
by the lower court, if exhaustive and clear, may be
reproduced; otherwise, the material factual
antecedents should be restated in the words of the
reviewing magistrate.
In addition, the reasoning of the lower court or body
whose decision is under review should be laid out, in
order that the parties may clearly understand why the
lower court ruled in a certain way, and why the
reviewing court either finds no reason to reverse it or
concludes otherwise.
3. Issues or Assignment of Errors
Both factual and legal issues should be stated. On
appeal, the assignment of errors, as mentioned in the
appellant’s brief, may be reproduced in toto and
tackled seriatim, so as to avoid motions for
reconsideration of the final decision on the ground
that the court failed to consider all assigned errors
that could affect the outcome of the case. But when
the appellant presents repetitive issues or when the
assigned errors do not strike at the main issue, these
may be restated in clearer and more coherent terms.
Though not specifically questioned by the parties,
additional issues may also be included, if deemed
important for substantial justice to be rendered. Note
that appealed criminal cases are given de
novo review, in contrast to noncriminal cases in which
the reviewing court is generally limited to issues
specifically raised in the appeal. The few exceptions
are errors of jurisdiction; questions not raised but
necessary in arriving at a just decision on the case; or
unassigned errors that are closely related to those
properly assigned, or upon which depends the
determination of the question properly raised.
4. The Court’s Ruling
This part contains a full discussion of the specific
errors or issues raised in the complaint, petition or
appeal, as the case may be; as well as of other issues
the court deems essential to a just disposition of the
case. Where there are several issues, each one of
them should be separately addressed, as much as
practicable. The respective contentions of the parties
should also be mentioned here. When procedural
questions are raised in addition to substantive ones, it
is better to resolve the former preliminarily.
5. The Disposition or Dispositive Portion
In a criminal case, the disposition should include a
finding of innocence or guilt, the specific crime
committed, the penalty imposed, the participation of
the accused, the modifying circumstances if any, and
the civil liability and costs. In case an acquittal is
decreed, the court must order the immediate release
of the accused, if detained, (unless they are being
held for another cause) and order the director of the
Bureau of Corrections (or wherever the accused is
detained) to report, within a maximum of ten (10) days
from notice, the exact date when the accused were
set free.
In a civil case as well as in a special civil action, the
disposition should state whether the complaint or
petition is granted or denied, the specific relief
granted, and the costs. The following test of
completeness may be applied. First, the parties
should know their rights and obligations. Second, they
should know how to execute the decision under
alternative contingencies. Third, there should be no
need for further proceedings to dispose of the
issues. Fourth, the case should be terminated by
according the proper relief. The "proper relief" usually
depends upon what the parties seek in their
pleadings. It may declare their rights and duties,
command the performance of positive prestations, or
order them to abstain from specific acts. The
disposition must also adjudicate costs.
The foregoing parts need not always be discussed in
sequence. But they should all be present and plainly
identifiable in the decision. Depending on the writer’s
character, genre and style, the language should be
fresh and free-flowing, not necessarily stereotyped or
in a fixed form; much less highfalutin, hackneyed and
pretentious. At all times, however, the decision must
be clear, concise, complete and correct.
Second Substantive Issue:
Religious Leaders’ Endorsement
of Candidates for Public Office
The basic question posed in the SJS Petition --
WHETHER ENDORSEMENTS OF CANDIDACIES
BY RELIGIOUS LEADERS IS UNCONSTITUTIONAL
-- undoubtedly deserves serious consideration. As
stated earlier, the Court deems this constitutional
issue to be of paramount interest to the Filipino
citizenry, for it concerns the governance of our
country and its people. Thus, despite the obvious
procedural transgressions by both SJS and the trial
court, this Court still called for Oral Argument, so as
not to leave any doubt that there might be room to
entertain and dispose of the SJS Petition on the
merits.
Counsel for SJS has utterly failed, however, to
convince the Court that there are enough factual and
legal bases to resolve the paramount issue. On the
other hand, the Office of the Solicitor General has
sided with petitioner insofar as there are no facts
supporting the SJS Petition and the assailed
Decision.
We reiterate that the said Petition failed to state
directly the ultimate facts that it relied upon for its
claim. During the Oral Argument, counsel for SJS
candidly admitted that there were no factual
allegations in its Petition for Declaratory Relief.
Neither were there factual findings in the assailed
Decision. At best, SJS merely asked the trial court to
answer a hypothetical question. In effect, it merely
sought an advisory opinion, the rendition of which was
beyond the court’s constitutional mandate and
jurisdiction.99
Indeed, the assailed Decision was rendered in clear
violation of the Constitution, because it made no
findings of facts and final disposition. Hence, it is void
and deemed legally inexistent. Consequently, there is
nothing for this Court to review, affirm, reverse or
even just modify.
Regrettably, it is not legally possible for the Court to
take up, on the merits, the paramount question
involving a constitutional principle. It is a time-honored
rule that "the constitutionality of a statute [or act] will
be passed upon only if, and to the extent that, it is
directly and necessarily involved in a justiciable
controversy and is essential to the protection of the
rights of the parties concerned."100
WHEREFORE, the Petition for Review of Brother
Mike Velarde is GRANTED. The assailed June 12,
2003 Decision and July 29, 2003 Order of the
Regional Trial Court of Manila (Branch 49) are
hereby DECLARED NULL AND VOID and thus SET
ASIDE. The SJS Petition for Declaratory Relief
is DISMISSED for failure to state a cause of action.

Let a copy of this Decision be furnished the Office of

the Court Administrator to evaluate and recommend
whether the trial judge may, after observing due
process, be held administratively liable for rendering a
decision violative of the Constitution, the Rules of
Court and relevant circulars of this Court. No costs.

SO ORDERED.

Davide, Jr., Puno, Panganiban, Quisumbing, Ynares-

Santiago, Sandoval-Gutierrez, Carpio, Austria-
Martinez, Corona, Carpio-Morales, Callejo, Sr.,
Azcuna, and Tinga, JJ., concur.

G.R. No. 162230               April 28, 2010

ISABELITA C. VINUYA, VICTORIA C. DELA PEÑA,

HERMINIHILDA MANIMBO, LEONOR H.
SUMAWANG, CANDELARIA L. SOLIMAN, MARIA
L. QUILANTANG, MARIA L. MAGISA, NATALIA M.
ALONZO, LOURDES M. NAVARO, FRANCISCA M.
ATENCIO, ERLINDA MANALASTAS, TARCILA M.
SAMPANG, ESTER M. PALACIO, MAXIMA R.
DELA CRUZ, BELEN A. SAGUM, FELICIDAD
TURLA, FLORENCIA M. DELA PEÑA, EUGENIA M.
LALU, JULIANA G. MAGAT, CECILIA SANGUYO,
ANA ALONZO, RUFINA P. MALLARI, ROSARIO M.
ALARCON, RUFINA C. GULAPA, ZOILA B.
MANALUS, CORAZON C. CALMA, MARTA A.
GULAPA, TEODORA M. HERNANDEZ, FERMIN B.
DELA PEÑA, MARIA DELA PAZ B. CULALA,
ESPERANZA MANAPOL, JUANITA M. BRIONES,
VERGINIA M. GUEVARRA, MAXIMA ANGULO,
EMILIA SANGIL, TEOFILA R. PUNZALAN,
JANUARIA G. GARCIA, PERLA B. BALINGIT,
BELEN A. CULALA, PILAR Q. GALANG, ROSARIO
C. BUCO, GAUDENCIA C. DELA PEÑA, RUFINA Q.
CATACUTAN, FRANCIA A. BUCO, PASTORA C.
GUEVARRA, VICTORIA M. DELA CRUZ,
PETRONILA O. DELA CRUZ, ZENAIDA P. DELA
CRUZ, CORAZON M. SUBA, EMERINCIANA A.
VINUYA, LYDIA A. SANCHEZ, ROSALINA M.
BUCO, PATRICIA A. BERNARDO, LUCILA H.
PAYAWAL, MAGDALENA LIWAG, ESTER C.
BALINGIT, JOVITA A. DAVID, EMILIA C.
MANGILIT, VERGINIA M. BANGIT, GUILLERMA S.
BALINGIT, TERECITA PANGILINAN, MAMERTA C.
PUNO, CRISENCIANA C. GULAPA, SEFERINA S.
TURLA, MAXIMA B. TURLA, LEONICIA G.
GUEVARRA, ROSALINA M. CULALA, CATALINA
Y. MANIO, MAMERTA T. SAGUM, CARIDAD L.
TURLA, et al. In their capacity and as members of
the “Malaya Lolas Organization”, Petitioners,
vs.
THE HONORABLE EXECUTIVE SECRETARY
ALBERTO G. ROMULO, THE HONORABLE
SECRETARY OF FOREIGN AFFAIRS DELIA
DOMINGO-ALBERT, THE HONORABLE
SECRETARY OF JUSTICE MERCEDITAS N.
GUTIERREZ, and THE HONORABLE SOLICITOR
GENERAL ALFREDO L. BENIPAYO, Respondents.
DECISION
DEL CASTILLO, J.:
The Treaty of Peace with Japan, insofar as it barred
future claims such as those asserted by plaintiffs in
these actions, exchanged full compensation of
plaintiffs for a future peace. History has vindicated the
wisdom of that bargain. And while full compensation
for plaintiffs’ hardships, in the purely economic sense,
has been denied these former prisoners and
countless other survivors of the war, the
immeasurable bounty of life for themselves and their
posterity in a free society and in a more peaceful
world services the debt.1
There is a broad range of vitally important areas that
must be regularly decided by the Executive
Department without either challenge or interference
by the Judiciary. One such area involves the delicate
arena of foreign relations. It would be strange indeed
if the courts and the executive spoke with different
voices in the realm of foreign policy. Precisely
because of the nature of the questions presented, and
the lapse of more than 60 years since the conduct
complained of, we make no attempt to lay down
general guidelines covering other situations not
involved here, and confine the opinion only to the very
questions necessary to reach a decision on this
matter.
Factual Antecedents
This is an original Petition for Certiorari under Rule 65
of the Rules of Court with an application for the
issuance of a writ of preliminary mandatory injunction
against the Office of the Executive Secretary, the
Secretary of the Department of Foreign Affairs (DFA),
the Secretary of the Department of Justice (DOJ), and
the Office of the Solicitor General (OSG).
Petitioners are all members of the MALAYA LOLAS, a
non-stock, non-profit organization registered with the
Securities and Exchange Commission, established for
the purpose of providing aid to the victims of rape by
Japanese military forces in the Philippines during the
Second World War.
Petitioners narrate that during the Second World War,
the Japanese army attacked villages and
systematically raped the women as part of the
destruction of the village. Their communities were
bombed, houses were looted and burned, and
civilians were publicly tortured, mutilated, and
slaughtered. Japanese soldiers forcibly seized the
women and held them in houses or cells, where they
were repeatedly raped, beaten, and abused by
Japanese soldiers. As a result of the actions of their
Japanese tormentors, the petitioners have spent their
lives in misery, having endured physical injuries, pain
and disability, and mental and emotional suffering.2
Petitioners claim that since 1998, they have
approached the Executive Department through the
DOJ, DFA, and OSG, requesting assistance in filing a
claim against the Japanese officials and military
officers who ordered the establishment of the “comfort
women” stations in the Philippines. However, officials
of the Executive Department declined to assist the
petitioners, and took the position that the individual
claims of the comfort women for compensation had
already been fully satisfied by Japan’s compliance
with the Peace Treaty between the Philippines and
Japan.
Issues
Hence, this petition where petitioners pray for this
court to (a) declare that respondents committed grave
abuse of discretion amounting to lack or excess of
discretion in refusing to espouse their claims for the
crimes against humanity and war crimes committed
against them; and (b) compel the respondents to
espouse their claims for official apology and other
forms of reparations against Japan before the
International Court of Justice (ICJ) and other
international tribunals.
Petitioners’ arguments
Petitioners argue that the general waiver of claims
made by the Philippine government in the Treaty of
Peace with Japan is void. They claim that the comfort
women system established by Japan, and the brutal
rape and enslavement of petitioners constituted a
crime against humanity,3 sexual slavery,4 and
torture.5 They allege that the prohibition against these
international crimes is jus cogens norms from which
no derogation is possible; as such, in waiving the
claims of Filipina comfort women and failing to
espouse their complaints against Japan, the
Philippine government is in breach of its legal
obligation not to afford impunity for crimes against
humanity. Finally, petitioners assert that the Philippine
government’s acceptance of the “apologies” made by
Japan as well as funds from the Asian Women’s Fund
(AWF) were contrary to international law.
Respondents’ Arguments
Respondents maintain that all claims of the
Philippines and its nationals relative to the war were
dealt with in the San Francisco Peace Treaty of 1951
and the bilateral Reparations Agreement of 1956.6
Article 14 of the Treaty of Peace7 provides:
Article 14. Claims and Property
a) It is recognized that Japan should pay reparations
to the Allied Powers for the damage and suffering
caused by it during the war. Nevertheless it is also
recognized that the resources of Japan are not
presently sufficient, if it is to maintain a viable
economy, to make complete reparation for all such
damage and suffering and at the present time meet its
other obligations.
b) Except as otherwise provided in the present Treaty,
the Allied Powers waive all reparations claims of the
Allied Powers, other claims of the Allied Powers and
their nationals arising out of any actions taken by
Japan and its nationals in the course of the
prosecution of the war, and claims of the Allied
Powers for direct military costs of occupation.
In addition, respondents argue that the apologies
made by Japan8 have been satisfactory, and that
Japan had addressed the individual claims of the
women through the atonement money paid by the
Asian Women’s Fund.
Historical Background
The comfort women system was the tragic legacy of
the Rape of Nanking. In December 1937, Japanese
military forces captured the city of Nanking in China
and began a “barbaric campaign of terror” known as
the Rape of Nanking, which included the rapes and
murders of an estimated 20,000 to 80,000 Chinese
women, including young girls, pregnant mothers, and
elderly women.9
In reaction to international outcry over the incident,
the Japanese government sought ways to end
international condemnation10 by establishing the
“comfort women” system. Under this system, the
military could simultaneously appease soldiers’ sexual
appetites and contain soldiers’ activities within a
regulated environment.11 Comfort stations would also
prevent the spread of venereal disease among
soldiers and discourage soldiers from raping
inhabitants of occupied territories.12
Daily life as a comfort woman was “unmitigated
misery.”13 The military forced victims into barracks-
style stations divided into tiny cubicles where they
were forced to live, sleep, and have sex with as many
30 soldiers per day.14 The 30 minutes allotted for
sexual relations with each soldier were 30-minute
increments of unimaginable horror for the
women.15 Disease was rampant.16 Military doctors
regularly examined the women, but these checks
were carried out to prevent the spread of venereal
diseases; little notice was taken of the frequent
cigarette burns, bruises, bayonet stabs and even
broken bones inflicted on the women by soldiers.
Fewer than 30% of the women survived the
war.17 Their agony continued in having to suffer with
the residual physical, psychological, and emotional
scars from their former lives. Some returned home
and were ostracized by their families. Some
committed suicide. Others, out of shame, never
returned home.18
Efforts to Secure Reparation
The most prominent attempts to compel the Japanese
government to accept legal responsibility and pay
compensatory damages for the comfort women
system were through a series of lawsuits, discussion
at the United Nations (UN), resolutions by various
nations, and the Women’s International Criminal
Tribunal. The Japanese government, in turn,
responded through a series of public apologies and
the creation of the AWF.19
Lawsuits
In December 1991, Kim Hak-Sun and two other
survivors filed the first lawsuit in Japan by former
comfort women against the Japanese government.
The Tokyo District Court however dismissed their
case.20 Other suits followed,21 but the Japanese
government has, thus far, successfully caused the
dismissal of every case.22
Undoubtedly frustrated by the failure of litigation
before Japanese courts, victims of the comfort women
system brought their claims before the United States
(US). On September 18, 2000, 15 comfort women
filed a class action lawsuit in the US District Court for
the District of Columbia23 “seeking money damages
for [allegedly] having been subjected to sexual slavery
and torture before and during World War II,” in
violation of “both positive and customary international
law.” The case was filed pursuant to the Alien Tort
Claims Act (“ATCA”),24 which allowed the plaintiffs to
sue the Japanese government in a US federal district
court.25 On October 4, 2001, the district court
dismissed the lawsuit due to lack of jurisdiction over
Japan, stating that “[t]here is no question that this
court is not the appropriate forum in which plaintiffs
may seek to reopen x x x discussions nearly half a
century later x x x [E]ven if Japan did not enjoy
sovereign immunity, plaintiffs’ claims are non-
justiciable and must be dismissed.”
The District of Columbia Court of Appeals affirmed the
lower court’s dismissal of the case.26 On appeal, the
US Supreme Court granted the women’s petition for
writ of certiorari, vacated the judgment of the District
of Columbia Court of Appeals, and remanded the
case.27 On remand, the Court of Appeals affirmed its
prior decision, noting that “much as we may feel for
the plight of the appellants, the courts of the US
simply are not authorized to hear their case.”28 The
women again brought their case to the US Supreme
Court which denied their petition for writ of certiorari
on February 21, 2006.
Efforts at the United Nations
In 1992, the Korean Council for the Women Drafted
for Military Sexual Slavery by Japan (KCWS),
submitted a petition to the UN Human Rights
Commission (UNHRC), asking for assistance in
investigating crimes committed by Japan against
Korean women and seeking reparations for former
comfort women.29 The UNHRC placed the issue on its
agenda and appointed Radhika Coomaraswamy as
the issue’s special investigator. In 1996,
Coomaraswamy issued a Report reaffirming Japan’s
responsibility in forcing Korean women to act as sex
slaves for the imperial army, and made the following
recommendations:
A. At the national level
137. The Government of Japan should:
(a) Acknowledge that the system of comfort stations
set up by the Japanese Imperial Army during the
Second World War was a violation of its obligations
under international law and accept legal responsibility
for that violation;
(b) Pay compensation to individual victims of
Japanese military sexual slavery according to
principles outlined by the Special Rapporteur of the
Sub-Commission on Prevention of Discrimination and
Protection of Minorities on the right to restitution,
compensation and rehabilitation for victims of grave
violations of human rights and fundamental freedoms.
A special administrative tribunal for this purpose
should be set up with a limited time-frame since many
of the victims are of a very advanced age;
(c) Make a full disclosure of documents and materials
in its possession with regard to comfort stations and
other related activities of the Japanese Imperial Army
during the Second World War;
(d) Make a public apology in writing to individual
women who have come forward and can be
substantiated as women victims of Japanese military
sexual slavery;
(e) Raise awareness of these issues by amending
educational curricula to reflect historical realities;
(f) Identify and punish, as far as possible, perpetrators
involved in the recruitment and institutionalization of
comfort stations during the Second World War.
Gay J. McDougal, the Special Rapporteur for the UN
Sub-Commission on Prevention of Discrimination and
Protection of Minorities, also presented a report to the
Sub-Committee on June 22, 1998 entitled
Contemporary Forms of Slavery: Systematic Rape,
Sexual Slavery and Slavery-like Practices During
Armed Conflict. The report included an appendix
entitled An Analysis of the Legal Liability of the
Government of Japan for ‘Comfort Women Stations’
established during the Second World War,30 which
contained the following findings:
68. The present report concludes that the Japanese
Government remains liable for grave violations of
human rights and humanitarian law, violations that
amount in their totality to crimes against humanity.
The Japanese Government’s arguments to the
contrary, including arguments that seek to attack the
underlying humanitarian law prohibition of
enslavement and rape, remain as unpersuasive today
as they were when they were first raised before the
Nuremberg war crimes tribunal more than 50 years
ago. In addition, the Japanese Government’s
argument that Japan has already settled all claims
from the Second World War through peace treaties
and reparations agreements following the war
remains equally unpersuasive. This is due, in large
part, to the failure until very recently of the Japanese
Government to admit the extent of the Japanese
military’s direct involvement in the establishment and
maintenance of these rape centres. The Japanese
Government’s silence on this point during the period
in which peace and reparations agreements between
Japan and other Asian Governments were being
negotiated following the end of the war must, as a
matter of law and justice, preclude Japan from relying
today on these peace treaties to extinguish liability in
these cases.
69. The failure to settle these claims more than half a
century after the cessation of hostilities is a testament
to the degree to which the lives of women continue to
be undervalued. Sadly, this failure to address crimes
of a sexual nature committed on a massive scale
during the Second World War has added to the level
of impunity with which similar crimes are committed
today. The Government of Japan has taken some
steps to apologize and atone for the rape and
enslavement of over 200,000 women and girls who
were brutalized in “comfort stations” during the
Second World War. However, anything less than full
and unqualified acceptance by the Government of
Japan of legal liability and the consequences that flow
from such liability is wholly inadequate. It must now
fall to the Government of Japan to take the necessary
final steps to provide adequate redress.
The UN, since then, has not taken any official action
directing Japan to provide the reparations sought.
Women’s International War Crimes
Tribunal
The Women’s International War Crimes Tribunal
(WIWCT) was a “people’s tribunal” established by a
number of Asian women and human rights
organizations, supported by an international coalition
of non-governmental organizations.31 First proposed
in 1998, the WIWCT convened in Tokyo in 2000 in
order to “adjudicate Japan’s military sexual violence,
in particular the enslavement of comfort women, to
bring those responsible for it to justice, and to end the
ongoing cycle of impunity for wartime sexual violence
against women.”
After examining the evidence for more than a year,
the “tribunal” issued its verdict on December 4, 2001,
finding the former Emperor Hirohito and the State of
Japan guilty of crimes against humanity for the rape
and sexual slavery of women.32 It bears stressing,
however, that although the tribunal included
prosecutors, witnesses, and judges, its judgment was
not legally binding since the tribunal itself was
organized by private citizens.
Action by Individual Governments
On January 31, 2007, US Representative Michael
Honda of California, along with six co-sponsor
representatives, introduced House Resolution 121
which called for Japanese action in light of the
ongoing struggle for closure by former comfort
women. The Resolution was formally passed on July
30, 2007,33 and made four distinct demands:
[I]t is the sense of the House of Representatives that
the Government of Japan (1) should formally
acknowledge, apologize, and accept historical
responsibility in a clear and unequivocal manner for
its Imperial Armed Forces’ coercion of young women
into sexual slavery, known to the world as “comfort
women”, during its colonial and wartime occupation of
Asia and the Pacific Islands from the 1930s through
the duration of World War II; (2) would help to resolve
recurring questions about the sincerity and status of
prior statements if the Prime Minister of Japan were to
make such an apology as a public statement in his
official capacity; (3) should clearly and publicly refute
any claims that the sexual enslavement and trafficking
of the “comfort women” for the Japanese Imperial
Army never occurred; and (4) should educate current
and future generations about this horrible crime while
following the recommendations of the international
community with respect to the “comfort women.”34
In December 2007, the European Parliament, the
governing body of the European Union, drafted a
resolution similar to House Resolution 121.35 Entitled,
“Justice for Comfort Women,” the resolution
demanded: (1) a formal acknowledgment of
responsibility by the Japanese government; (2) a
removal of the legal obstacles preventing
compensation; and (3) unabridged education of the
past. The resolution also stressed the urgency with
which Japan should act on these issues, stating: “the
right of individuals to claim reparations against the
government should be expressly recognized in
national law, and cases for reparations for the
survivors of sexual slavery, as a crime under
international law, should be prioritized, taking into
account the age of the survivors.”
The Canadian and Dutch parliaments have each
followed suit in drafting resolutions against Japan.
Canada’s resolution demands the Japanese
government to issue a formal apology, to admit that
its Imperial Military coerced or forced hundreds of
thousands of women into sexual slavery, and to
restore references in Japanese textbooks to its war
crimes.36 The Dutch parliament’s resolution calls for
the Japanese government to uphold the 1993
declaration of remorse made by Chief Cabinet
Secretary Yohei Kono.
The Foreign Affairs Committee of the United
Kingdom’s Parliament also produced a report in
November, 2008 entitled, “Global Security: Japan and
Korea” which concluded that Japan should
acknowledge the pain caused by the issue of comfort
women in order to ensure cooperation between Japan
and Korea.
Statements of Remorse made by representatives of
the Japanese government
Various officials of the Government of Japan have
issued the following public statements concerning the
comfort system:
a) Statement by the Chief Cabinet Secretary Yohei
Kono in 1993:
The Government of Japan has been conducting a
study on the issue of wartime “comfort women” since
December 1991. I wish to announce the findings as a
result of that study.
As a result of the study which indicates that comfort
stations were operated in extensive areas for long
periods, it is apparent that there existed a great
number of comfort women. Comfort stations were
operated in response to the request of the military
authorities of the day. The then Japanese military
was, directly or indirectly, involved in the
establishment and management of the comfort
stations and the transfer of comfort women. The
recruitment of the comfort women was conducted
mainly by private recruiters who acted in response to
the request of the military. The Government study has
revealed that in many cases they were recruited
against their own will, through coaxing coercion, etc.,
and that, at times, administrative/military personnel
directly took part in the recruitments. They lived in
misery at comfort stations under a coercive
atmosphere.
As to the origin of those comfort women who were
transferred to the war areas, excluding those from
Japan, those from the Korean Peninsula accounted
for a large part. The Korean Peninsula was under
Japanese rule in those days, and their recruitment,
transfer, control, etc., were conducted generally
against their will, through coaxing, coercion, etc.
Undeniably, this was an act, with the involvement of
the military authorities of the day, that severely injured
the honor and dignity of many women. The
Government of Japan would like to take this
opportunity once again to extend its sincere apologies
and remorse to all those, irrespective of place of
origin, who suffered immeasurable pain and incurable
physical and psychological wounds as comfort
women.
It is incumbent upon us, the Government of Japan, to
continue to consider seriously, while listening to the
views of learned circles, how best we can express this
sentiment.
We shall face squarely the historical facts as
described above instead of evading them, and take
them to heart as lessons of history. We hereby
reiterated our firm determination never to repeat the
same mistake by forever engraving such issues in our
memories through the study and teaching of history.
As actions have been brought to court in Japan and
interests have been shown in this issue outside
Japan, the Government of Japan shall continue to pay
full attention to this matter, including private
researched related thereto.
b) Prime Minister Tomiichi Murayama’s Statement in
1994
On the issue of wartime “comfort women”, which
seriously stained the honor and dignity of many
women, I would like to take this opportunity once
again to express my profound and sincere remorse
and apologies”
c) Letters from the Prime Minister of Japan to
Individual Comfort Women
The issue of comfort women, with the involvement of
the Japanese military authorities at that time, was a
grave affront to the honor and dignity of a large
number of women.
As Prime Minister of Japan, I thus extend anew my
most sincere apologies and remorse to all the women
who endured immeasurable and painful experiences
and suffered incurable physical and psychological
wounds as comfort women.
I believe that our country, painfully aware of its moral
responsibilities, with feelings of apology and remorse,
should face up squarely to its past history and
accurately convey it to future generations.
d) The Diet (Japanese Parliament) passed resolutions
in 1995 and 2005
Solemnly reflecting upon the many instances of
colonial rule and acts of aggression that occurred in
modern world history, and recognizing that Japan
carried out such acts in the past and inflicted suffering
on the people of other countries, especially in Asia,
the Members of this House hereby express deep
remorse. (Resolution of the House of Representatives
adopted on June 9, 1995)
e) Various Public Statements by Japanese Prime
Minister Shinzo Abe
I have talked about this matter in the Diet sessions
last year, and recently as well, and to the press. I
have been consistent. I will stand by the Kono
Statement. This is our consistent position. Further, we
have been apologizing sincerely to those who
suffered immeasurable pain and incurable
psychological wounds as comfort women. Former
Prime Ministers, including Prime Ministers Koizumi
and Hashimoto, have issued letters to the comfort
women. I would like to be clear that I carry the same
feeling. This has not changed even slightly. (Excerpt
from Remarks by Prime Minister Abe at an Interview
by NHK, March 11, 2007).
I am apologizing here and now. I am apologizing as
the Prime Minister and it is as stated in the statement
by the Chief Cabinet Secretary Kono. (Excerpt from
Remarks by Prime Minister Abe at the Budget
Committee, the House of Councilors, the Diet of
Japan, March 26, 2007).
I am deeply sympathetic to the former comfort women
who suffered hardships, and I have expressed my
apologies for the extremely agonizing circumstances
into which they were placed. (Excerpt from Telephone
Conference by Prime Minister Abe to President
George W. Bush, April 3, 2007).
I have to express sympathy from the bottom of my
heart to those people who were taken as wartime
comfort women. As a human being, I would like to
express my sympathies, and also as prime minister of
Japan I need to apologize to them. My administration
has been saying all along that we continue to stand
by the Kono Statement. We feel responsible for
having forced these women to go through that
hardship and pain as comfort women under the
circumstances at the time. (Excerpt from an interview
article “A Conversation with Shinzo Abe” by the
Washington Post, April 22, 2007).
x x x both personally and as Prime Minister of Japan,
my heart goes out in sympathy to all those who
suffered extreme hardships as comfort women; and I
expressed my apologies for the fact that they were
forced to endure such extreme and harsh conditions.
Human rights are violated in many parts of the world
during the 20th Century; therefore we must work to
make the 21st Century a wonderful century in which
no human rights are violated. And the Government of
Japan and I wish to make significant contributions to
that end. (Excerpt from Prime Minister Abe’s remarks
at the Joint Press Availability after the summit
meeting at Camp David between Prime Minister Abe
and President Bush, April 27, 2007).
The Asian Women’s Fund
Established by the Japanese government in 1995, the
AWF represented the government’s concrete attempt
to address its moral responsibility by offering
monetary compensation to victims of the comfort
women system.37 The purpose of the AWF was to
show atonement of the Japanese people through
expressions of apology and remorse to the former
wartime comfort women, to restore their honor, and to
demonstrate Japan’s strong respect for women.38
The AWF announced three programs for former
comfort women who applied for assistance: (1) an
atonement fund paying ¥2 million (approximately
$20,000) to each woman; (2) medical and welfare
support programs, paying ¥2.5-3 million ($25,000-
$30,000) for each woman; and (3) a letter of apology
from the Japanese Prime Minister to each woman.
Funding for the program came from the Japanese
government and private donations from the Japanese
people. As of March 2006, the AWF provided ¥700
million (approximately $7 million) for these programs
in South Korea, Taiwan, and the Philippines; ¥380
million (approximately $3.8 million) in Indonesia; and
¥242 million (approximately $2.4 million) in the
Netherlands.
On January 15, 1997, the AWF and the Philippine
government signed a Memorandum of Understanding
for medical and welfare support programs for former
comfort women. Over the next five years, these were
implemented by the Department of Social Welfare
and Development.
Our Ruling
Stripped down to its essentials, the issue in this case
is whether the Executive Department committed
grave abuse of discretion in not espousing petitioners’
claims for official apology and other forms of
reparations against Japan.
The petition lacks merit.
From a Domestic Law Perspective, the Executive
Department has the exclusive prerogative to
determine whether to espouse petitioners’ claims
against Japan.
Baker v. Carr39 remains the starting point for analysis
under the political question doctrine. There the US
Supreme Court explained that:
x x x Prominent on the surface of any case held to
involve a political question is found a textually
demonstrable constitutional commitment of the issue
to a coordinate political department or a lack of
judicially discoverable and manageable standards for
resolving it, or the impossibility of deciding without an
initial policy determination of a kind clearly for non-
judicial discretion; or the impossibility of a court’s
undertaking independent resolution without
expressing lack of the respect due coordinate
branches of government; or an unusual need for
unquestioning adherence to a political decision
already made; or the potentiality of embarrassment
from multifarious pronouncements by various
departments on question.
In Tañada v. Cuenco,40 we held that political
questions refer “to those questions which, under the
Constitution, are to be decided by the people in their
sovereign capacity, or in regard to which full
discretionary authority has been delegated to the
legislative or executive branch of the government. It is
concerned with issues dependent upon the wisdom,
not legality of a particular measure.”
Certain types of cases often have been found to
present political questions.41 One such category
involves questions of foreign relations. It is well-
established that “[t]he conduct of the foreign relations
of our government is committed by the Constitution to
the executive and legislative—’the political’—
departments of the government, and the propriety of
what may be done in the exercise of this political
power is not subject to judicial inquiry or
decision.”42 The US Supreme Court has further
cautioned that decisions relating to foreign policy are
delicate, complex, and involve large elements of
prophecy. They are and should be undertaken only by
those directly responsible to the people whose
welfare they advance or imperil. They are decisions of
a kind for which the Judiciary has neither aptitude,
facilities nor responsibility.43
To be sure, not all cases implicating foreign relations
present political questions, and courts certainly
possess the authority to construe or invalidate treaties
and executive agreements.44 However, the question
whether the Philippine government should espouse
claims of its nationals against a foreign government is
a foreign relations matter, the authority for which is
demonstrably committed by our Constitution not to the
courts but to the political branches. In this case, the
Executive Department has already decided that it is to
the best interest of the country to waive all claims of
its nationals for reparations against Japan in the
Treaty of Peace of 1951. The wisdom of such
decision is not for the courts to question. Neither
could petitioners herein assail the said determination
by the Executive Department via the instant petition
for certiorari.
In the seminal case of US v. Curtiss-Wright Export
Corp.,45 the US Supreme Court held that “[t]he
President is the sole organ of the nation in its external
relations, and its sole representative with foreign
relations.”
It is quite apparent that if, in the maintenance of our
international relations, embarrassment—perhaps
serious embarrassment—is to be avoided and
success for our aims achieved, congressional
legislation which is to be made effective through
negotiation and inquiry within the international field
must often accord to the President a degree of
discretion and freedom from statutory restriction
which would not be admissible where domestic affairs
alone involved. Moreover, he, not Congress, has the
better opportunity of knowing the conditions which
prevail in foreign countries, and especially is this true
in time of war. He has his confidential sources of
information. He has his agents in the form of
diplomatic, consular and other officials. x x x
This ruling has been incorporated in our jurisprudence
through Bayan v. Executive Secretary46 and Pimentel
v. Executive Secretary;47 its overreaching principle
was, perhaps, best articulated in (now Chief) Justice
Puno’s dissent in Secretary of Justice v. Lantion:48
x x x The conduct of foreign relations is full of
complexities and consequences, sometimes with life
and death significance to the nation especially in
times of war. It can only be entrusted to that
department of government which can act on the basis
of the best available information and can decide with
decisiveness. x x x It is also the President who
possesses the most comprehensive and the most
confidential information about foreign countries for our
diplomatic and consular officials regularly brief him on
meaningful events all over the world. He has also
unlimited access to ultra-sensitive military intelligence
data. In fine, the presidential role in foreign affairs is
dominant and the President is traditionally accorded a
wider degree of discretion in the conduct of foreign
affairs. The regularity, nay, validity of his actions are
adjudged under less stringent standards, lest their
judicial repudiation lead to breach of an international
obligation, rupture of state relations, forfeiture of
confidence, national embarrassment and a plethora of
other problems with equally undesirable
consequences.
The Executive Department has determined that taking
up petitioners’ cause would be inimical to our
country’s foreign policy interests, and could disrupt
our relations with Japan, thereby creating serious
implications for stability in this region. For us to
overturn the Executive Department’s determination
would mean an assessment of the foreign policy
judgments by a coordinate political branch to which
authority to make that judgment has been
constitutionally committed.
In any event, it cannot reasonably be maintained that
the Philippine government was without authority to
negotiate the Treaty of Peace with Japan. And it is
equally true that, since time immemorial, when
negotiating peace accords and settling international
claims:
x x x [g]overnments have dealt with x x x private
claims as their own, treating them as national assets,
and as counters, `chips’, in international bargaining.
Settlement agreements have lumped, or linked,
claims deriving from private debts with others that
were intergovernmental in origin, and concessions in
regard to one category of claims might be set off
against concessions in the other, or against larger
political considerations unrelated to debts.49
Indeed, except as an agreement might otherwise
provide, international settlements generally wipe out
the underlying private claims, thereby terminating any
recourse under domestic law. In Ware v. Hylton,50 a
case brought by a British subject to recover a debt
confiscated by the Commonwealth of Virginia during
the war, Justice Chase wrote:
I apprehend that the treaty of peace abolishes the
subject of the war, and that after peace is concluded,
neither the matter in dispute, nor the conduct of either
party, during the war, can ever be revived, or brought
into contest again. All violences, injuries, or damages
sustained by the government, or people of either,
during the war, are buried in oblivion; and all those
things are implied by the very treaty of peace; and
therefore not necessary to be expressed. Hence it
follows, that the restitution of, or compensation for,
British property confiscated, or extinguished, during
the war, by any of the United States, could only be
provided for by the treaty of peace; and if there had
been no provision, respecting these subjects, in the
treaty, they could not be agitated after the treaty, by
the British government, much less by her subjects in
courts of justice. (Emphasis supplied).
This practice of settling claims by means of a peace
treaty is certainly nothing new. For instance, in
Dames & Moore v. Regan,51 the US Supreme Court
held:
Not infrequently in affairs between nations,
outstanding claims by nationals of one country
against the government of another country are
“sources of friction” between the two
sovereigns. United States v. Pink, 315 U.S. 203, 225,
62 S.Ct. 552, 563, 86 L.Ed. 796 (1942). To resolve
these difficulties, nations have often entered into
agreements settling the claims of their respective
nationals. As one treatise writer puts it, international
agreements settling claims by nationals of one state
against the government of another “are established
international practice reflecting traditional international
theory.” L. Henkin, Foreign Affairs and the
Constitution 262 (1972). Consistent with that principle,
the United States has repeatedly exercised its
sovereign authority to settle the claims of its nationals
against foreign countries. x x x Under such
agreements, the President has agreed to renounce or
extinguish claims of United States nationals against
foreign governments in return for lump-sum payments
or the establishment of arbitration procedures. To be
sure, many of these settlements were encouraged by
the United States claimants themselves, since a
claimant’s only hope of obtaining any payment at all
might lie in having his Government negotiate a
diplomatic settlement on his behalf. But it is also
undisputed that the “United States has sometimes
disposed of the claims of its citizens without their
consent, or even without consultation with them,
usually without exclusive regard for their interests, as
distinguished from those of the nation as a whole.”
Henkin, supra, at 262-263. Accord, Restatement
(Second) of Foreign Relations Law of the United
States § 213 (1965) (President “may waive or settle a
claim against a foreign state x x x [even] without the
consent of the [injured] national”). It is clear that the
practice of settling claims continues today.
Respondents explain that the Allied Powers
concluded the Peace Treaty with Japan not
necessarily for the complete atonement of the
suffering caused by Japanese aggression during the
war, not for the payment of adequate reparations, but
for security purposes. The treaty sought to prevent
the spread of communism in Japan, which occupied a
strategic position in the Far East. Thus, the Peace
Treaty compromised individual claims in the collective
interest of the free world.
This was also the finding in a similar case involving
American victims of Japanese slave labor during the
war.52 In a consolidated case in the Northern District
of California,53the court dismissed the lawsuits filed,
relying on the 1951 peace treaty with
Japan,54 because of the following policy
considerations:
The official record of treaty negotiations establishes
that a fundamental goal of the agreement was to
settle the reparations issue once and for all. As the
statement of the chief United States negotiator, John
Foster Dulles, makes clear, it was well understood
that leaving open the possibility of future claims would
be an unacceptable impediment to a lasting peace:
Reparation is usually the most controversial aspect of
peacemaking. The present peace is no exception.
On the one hand, there are claims both vast and just.
Japan’s aggression caused tremendous cost, losses
and suffering.
On the other hand, to meet these claims, there stands
a Japan presently reduced to four home islands which
are unable to produce the food its people need to live,
or the raw materials they need to work. x x x
The policy of the United States that Japanese liability
for reparations should be sharply limited was informed
by the experience of six years of United States-led
occupation of Japan. During the occupation the
Supreme Commander of the Allied Powers (SCAP)
for the region, General Douglas MacArthur,
confiscated Japanese assets in conjunction with the
task of managing the economic affairs of the
vanquished nation and with a view to reparations
payments. It soon became clear that Japan’s financial
condition would render any aggressive reparations
plan an exercise in futility. Meanwhile, the importance
of a stable, democratic Japan as a bulwark to
communism in the region increased. At the end of
1948, MacArthur expressed the view that “[t]he use of
reparations as a weapon to retard the reconstruction
of a viable economy in Japan should be combated
with all possible means” and “recommended that the
reparations issue be settled finally and without delay.”
That this policy was embodied in the treaty is clear
not only from the negotiations history but also from
the Senate Foreign Relations Committee report
recommending approval of the treaty by the Senate.
The committee noted, for example:
Obviously insistence upon the payment of reparations
in any proportion commensurate with the claims of the
injured countries and their nationals would wreck
Japan’s economy, dissipate any credit that it may
possess at present, destroy the initiative of its people,
and create misery and chaos in which the seeds of
discontent and communism would flourish. In short,
[it] would be contrary to the basic purposes and policy
of x x x the United States x x x.
We thus hold that, from a municipal law perspective,
that certiorari will not lie. As a general principle—and
particularly here, where such an extraordinary length
of time has lapsed between the treaty’s conclusion
and our consideration—the Executive must be given
ample discretion to assess the foreign policy
considerations of espousing a claim against Japan,
from the standpoint of both the interests of the
petitioners and those of the Republic, and decide on
that basis if apologies are sufficient, and whether
further steps are appropriate or necessary.
The Philippines is not under any international
obligation to espouse petitioners’ claims.
In the international sphere, traditionally, the only
means available for individuals to bring a claim within
the international legal system has been when the
individual is able to persuade a government to bring a
claim on the individual’s behalf.55 Even then, it is not
the individual’s rights that are being asserted, but
rather, the state’s own rights. Nowhere is this position
more clearly reflected than in the dictum of the
Permanent Court of International Justice (PCIJ) in the
1924 Mavrommatis Palestine Concessions Case:
By taking up the case of one of its subjects and by
resorting to diplomatic action or international judicial
proceedings on his behalf, a State is in reality
asserting its own rightto ensure, in the person of its
subjects, respect for the rules of international law. The
question, therefore, whether the present dispute
originates in an injury to a private interest, which in
point of fact is the case in many international
disputes, is irrelevant from this standpoint. Once a
State has taken up a case on behalf of one of its
subjects before an international tribunal, in the eyes of
the latter the State is sole claimant.56
Since the exercise of diplomatic protection is the right
of the State, reliance on the right is within the
absolute discretion of states, and the decision
whether to exercise the discretion may invariably be
influenced by political considerations other than the
legal merits of the particular claim.57 As clearly stated
by the ICJ in
Barcelona Traction:
The Court would here observe that, within the limits
prescribed by international law, a State may exercise
diplomatic protection by whatever means and to
whatever extent it thinks fit, for it is its own right that
the State is asserting. Should the natural or legal
person on whose behalf it is acting consider that their
rights are not adequately protected, they have no
remedy in international law. All they can do is resort to
national law, if means are available, with a view to
furthering their cause or obtaining redress. The
municipal legislator may lay upon the State an
obligation to protect its citizens abroad, and may also
confer upon the national a right to demand the
performance of that obligation, and clothe the right
with corresponding sanctions. However, all these
questions remain within the province of municipal law
and do not affect the position
internationally.58 (Emphasis supplied)
The State, therefore, is the sole judge to decide
whether its protection will be granted, to what extent it
is granted, and when will it cease. It retains, in this
respect, a discretionary power the exercise of which
may be determined by considerations of a political or
other nature, unrelated to the particular case.
The International Law Commission’s (ILC’s) Draft
Articles on Diplomatic Protection fully support this
traditional view. They (i) state that “the right of
diplomatic protection belongs to or vests in the
State,”59 (ii) affirm its discretionary nature by clarifying
that diplomatic protection is a “sovereign prerogative”
of the State;60 and (iii) stress that the state “has the
right to exercise diplomatic protection on behalf of a
national. It is under no duty or obligation to do so.”61
It has been argued, as petitioners argue now, that the
State has a duty to protect its nationals and act on
his/her behalf when rights are injured.62 However, at
present, there is no sufficient evidence to establish a
general international obligation for States to exercise
diplomatic protection of their own nationals
abroad.63 Though, perhaps desirable, neither state
practice nor opinio juris has evolved in such a
direction. If it is a duty internationally, it is only a moral
and not a legal duty, and there is no means of
enforcing its fulfillment.64
We fully agree that rape, sexual slavery, torture, and
sexual violence are morally reprehensible as well as
legally prohibited under contemporary international
law.65 However, petitioners take quite a theoretical
leap in claiming that these proscriptions automatically
imply that that the Philippines is under a non-
derogable obligation to prosecute international
crimes, particularly since petitioners do not demand
the imputation of individual criminal liability, but seek
to recover monetary reparations from the state of
Japan. Absent the consent of states, an applicable
treaty regime, or a directive by the Security Council,
there is no non-derogable duty to institute
proceedings against Japan. Indeed, precisely
because of states’ reluctance to directly prosecute
claims against another state, recent developments
support the modern trend to empower individuals to
directly participate in suits against perpetrators of
international crimes.66 Nonetheless, notwithstanding
an array of General Assembly resolutions calling for
the prosecution of crimes against humanity and the
strong policy arguments warranting such a rule, the
practice of states does not yet support the present
existence of an obligation to prosecute international
crimes.67 Of course a customary duty of prosecution is
ideal, but we cannot find enough evidence to
reasonably assert its existence. To the extent that any
state practice in this area is widespread, it is in the
practice of granting amnesties, immunity, selective
prosecution, or de facto impunity to those who commit
crimes against humanity.”68
Even the invocation of jus cogens norms and erga
omnes obligations will not alter this analysis. Even if
we sidestep the question of whether jus cogens
norms existed in 1951, petitioners have not deigned
to show that the crimes committed by the Japanese
army violated jus cogens prohibitions at the time the
Treaty of Peace was signed, or that the duty to
prosecute perpetrators of international crimes is an
erga omnes obligation or has attained the status of
jus cogens.
The term erga omnes (Latin: in relation to everyone)
in international law has been used as a legal term
describing obligations owed by States towards the
community of states as a whole. The concept was
recognized by the ICJ in Barcelona Traction:
x x x an essential distinction should be drawn
between the obligations of a State towards the
international community as a whole, and those arising
vis-à-vis another State in the field of diplomatic
protection. By their very nature, the former are the
concern of all States. In view of the importance of the
rights involved, all States can be held to have a legal
interest in their protection; they are obligations erga
omnes.
Such obligations derive, for example, in contemporary
international law, from the outlawing of acts of
aggression, and of genocide, as also from the
principles and rules concerning the basic rights of the
human person, including protection from slavery and
racial discrimination. Some of the corresponding
rights of protection have entered into the body of
general international law … others are conferred by
international instruments of a universal or quasi-
universal character.
The Latin phrase, ‘erga omnes,’ has since become
one of the rallying cries of those sharing a belief in the
emergence of a value-based international public
order. However, as is so often the case, the reality is
neither so clear nor so bright. Whatever the relevance
of obligations erga omnes as a legal concept, its full
potential remains to be realized in practice.69
The term is closely connected with the international
law concept of jus cogens. In international law, the
term “jus cogens” (literally, “compelling law”) refers to
norms that command peremptory authority,
superseding conflicting treaties and custom. Jus
cogens norms are considered peremptory in the
sense that they are mandatory, do not admit
derogation, and can be modified only by general
international norms of equivalent authority.70
Early strains of the jus cogens doctrine have existed
since the 1700s,71 but peremptory norms began to
attract greater scholarly attention with the publication
of Alfred von Verdross’s influential 1937 article,
Forbidden Treaties in International Law.72 The
recognition of jus cogens gained even more force in
the 1950s and 1960s with the ILC’s preparation of the
Vienna Convention on the Law of Treaties
(VCLT).73 Though there was a consensus that certain
international norms had attained the status of jus
cogens,74 the ILC was unable to reach a consensus
on the proper criteria for identifying peremptory
norms.
After an extended debate over these and other
theories of jus cogens, the ILC concluded ruefully in
1963 that “there is not as yet any generally accepted
criterion by which to identify a general rule of
international law as having the character of jus
cogens.”75 In a commentary accompanying the draft
convention, the ILC indicated that “the prudent course
seems to be to x x x leave the full content of this rule
to be worked out in State practice and in the
jurisprudence of international tribunals.”76 Thus, while
the existence of jus cogens in international law is
undisputed, no consensus exists on its
substance,77 beyond a tiny core of principles and
rules.78
Of course, we greatly sympathize with the cause of
petitioners, and we cannot begin to comprehend the
unimaginable horror they underwent at the hands of
the Japanese soldiers. We are also deeply concerned
that, in apparent contravention of fundamental
principles of law, the petitioners appear to be without
a remedy to challenge those that have offended them
before appropriate fora. Needless to say, our
government should take the lead in protecting its
citizens against violation of their fundamental human
rights. Regrettably, it is not within our power to order
the Executive Department to take up the petitioners’
cause. Ours is only the power to urge  and exhort  the
Executive Department to take up petitioners’ cause.
WHEREFORE, the Petition is hereby DISMISSED.
SO ORDERED.MARIANO C. DEL CASTILLO
Associate Justice