1. Republic v.

Rosemoor
G.R. No. 149927, March 30, 2004
FACTS:
The 4 petitioners in this case after having been granted permission to prospect for marble
deposits in the mountains of Biak-na-Bato, San Miguel, Bulacan, succeeded in discovering
marble deposits of high quality and in commercial quantities in Mount Mabio which forms part
of the Biak-na-Bato mountain range. Thereafter petitioners applied with the Bureau of Mines,
now Mines and Geosciences Bureau, for the issuance of the corresponding license to exploit said
marble deposits.
Shortly after Respondent Ernesto R. Maceda was appointed Minister of DENR,
petitioners License No. 33 was cancelled by him through his letter to ROSEMOOR MINING
AND DEVELOPMENT CORPORATION.
The trial court ruled that Proclamation No. 84, which confirmed the cancellation of the
license, was an ex post facto law; as such, it violated Section 3 of Article XVIII of the 1987
Constitution. On appeal, CA affirmed the decision of the trial court. Hence this petition.
ISSUE:
WON the license is valid.
RULING:
No. The license in question, QLP No. 33, is dated August 3, 1982, and it was issued in
the name of Rosemoor Mining Development Corporation. The terms of the license allowed the
corporation to extract and dispose of marbleized limestone from a 330.3062-hectare land in San
Miguel, Bulacan. The license is, however, subject to the terms and conditions of PD 463, the
governing law at the time it was granted; as well as to the rules and regulations promulgated
thereunder. By the same token, Proclamation No. 2204 -- which awarded to Rosemoor the right
of development, exploitation, and utilization of the mineral site -- expressly cautioned that the
grant was subject to "existing policies, laws, rules and regulations."
The license was thus subject to Section 69 of PD 463, which reads:

"Section 69. Maximum Area of Quarry License Notwithstanding the provisions of Section 14
hereof, a quarry license shall cover an area of not more than one hundred (100) hectares in any
one province and not more than one thousand (1,000) hectares in the entire Philippines."

The language of PD 463 is clear. It states in categorical and mandatory terms that a quarry
license, like that of respondents, should cover a maximum of 100 hectares in any given province.
This law neither provides any exception nor makes any reference to the number of applications
for a license.
 2. Philippine Geothermal Inc. v. NAPOCOR
G.R. No. 144302, May 27,2004
FACTS:
The National Power Corporation (NPC) entered into a service contract with Philippine
Geothermal, Inc. (PGI), a corporation organized and existing under the laws of California,
United States of America, for the exploration and exploitation of geothermal resources covering
the Tiwi and Mak-Ban Geothermal Fields. The term of this contract shall be twenty-five (25)
years renewable for another twenty-five (25) years upon the option of PGI. NPC, however, was
doubtful whether a renewal would be constitutional in light of Section 2, Article XII of the 1987
Constitution.
On August 21, 1996, the NPC filed before the Regional Trial Court (RTC) of Quezon
City a petition for declaratory relief against PGI praying for the determination of the
constitutionality of Section 3 of the service contract. The RTC denied the motion to dismiss on
the ground that the legality or constitutionality of the renewal of the service contract is an issue
which only a regular court of justice may resolve or settle.
Pending decision of the petition by the Court of Appeals, PGI and NPC filed on July 10,
1998 a joint motion to suspend proceedings as the parties were exploring the possibility of
amicable settlement.
ISSUE:
WON the compromise agreement by the parties is valid.
RULING:
Yes. The Compromise Agreement is not contrary to law because it in fact directly
addressed to the very heart of the constitutional issues involved in this controversy. Thus [PGI]
and [NPC] have agreed to terminate the Service Contract subject matter of the dispute, in
favor of a new Geothermal Sales Contract and a PD 1442 Geothermal Service Contract,
and PGI has committed to form a Philippine company for the development and operation
of the Tiwi and Mak-Ban steamfields (Sec. 6.1 thereof) on a going-forward basis, thereby
effectively erasing any doubt as to the legality of the compromise.

The Compromise Agreement is not contrary to morals. The arrangement is commercially

advantageous to the Government of the Philippines, NPC, PSALM and the consuming public.

The Compromise Agreement is not contrary to public policy. It has been categorically
declared by the state that private sector participation and privatization of state-owned enterprises
and their assets is encouraged in order to accelerate economic progress and development as
evidenced by various laws and issuances.
3. Ten Forty Realty v. Lorenzana
G.R. No. 151212. September 10, 2003

FACTS:
An ejectment suit was filed by petitioner Ten Forty against Marina Cruz alleging that the
former is the true and absolute owner of a parcel of land and residential house located in
Olongapo City with an area of 324 square meters having acquired said property from Barbara
Galino by virtue of Deed of Absolute Sale. After few years, petitioner Ten Forty learned that
same property was sold to Cruz who immediately occupied the property.
Failure to arrive at an amicable settlement, a demand letter was sent to respondent Cruz
to vacate and pay reasonable amount for the occupation of the same, however, Cruz refused to
vacate the premises. MTCC ruled in favor of petitioner and ordered respondent to vacate the
property and surrender the possession thereof to Ten Forty.
RTC reversed MTCC’s decision and ruled that the execution of Deed of Absolute Sale in
favor of petitioner Ten Forty without actual transfer of the physical possession did not have the
effect of making the petitioner the owner of the property because there was no delivery of the
object of the sale. An appeal was submitted to Court of Appeals which sustained the ruling of
RTC.
ISSUE:
WON respondents possession or occupation of the said property is in the nature of an
exercise of ownership which should put the herein petitioner on guard.
RULING:
Yes. While corporations cannot acquire land of the public domain, they can however
acquire private land. According to the certification by the City Planning and Development Office
of Olongapo City, the contested property in this case is alienable and disposable public land. It
was for this reason that respondent Cruz filed a miscellaneous sales application to acquire it.
On the other hand, petitioner Ten Forty Realty has not presented proof that, at the time it
purchased the property from Galino, the property had ceased to be of the public domain and was
already private land.
The established rule is that alienable and disposable land of the public domain held and
occupied by a possessor -- personally or through predecessors-in-interest, openly, continuously,
and exclusively for 30 years -- is ipso jure converted to private property by the mere lapse of
time.
Hence, the SC affirms the appellate courts ruling that respondent is entitled to
possession de facto.
 4. Garcia v. Board of Investments
G.R. No. 92024 November 9, 1990
FACTS:
Former Bataan Petrochemical Corporation (BPC), now Luzon Petrochemical
Corporation, formed by a group of Taiwanese investors, was granted by the BOI for the transfer
of its proposed plant site from Bataan to Batangas and the shift of the plant’s feedstock or fuel
for its petrochemical plant from “naphta only” to “naptha and/or liquefied petroleum gas. In
February 1989, one year after the BPC began its production in Bataan, the corporation applied to
the BOI to have its plant site transferred from Bataan to Batangas. Despite vigorous opposition
from petitioner Cong. Enrique Garcia and others, the BOI granted private respondent BPC’s
application, stating that the investors have the final choice as to where to have their plant site
because they are the ones who risk capital for the project.

ISSUE:
WON BOI committed a grave abuse of discretion in yielding to the application of the
investors without considering the national interest

RULING:
Yes. Under Section 10, Article XII of the 1987 Constitution, it is the duty of the State to
"regulate and exercise authority over foreign investments within its national jurisdiction and in
accordance with its national goals and priorities." The development of a self-reliant and
independent national economy effectively controlled by Filipinos is mandated in Section 19,
Article II of the Constitution.
Moreover, Section 1, Article XII of the Constitution provides that: 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.
Every provision of the Constitution on the national economy and patrimony is infused with
the spirit of national interest. The non-alienation of natural resources, the State's full control over
the development and utilization of our scarce resources, agreements with foreigners being based
on real contributions to the economic growth and general welfare of the country and the
regulation of foreign investments in accordance with national goals and priorities are too explicit
not to be noticed and understood. A petrochemical industry is not an ordinary investment
opportunity. It should not be treated like a garment or embroidery firm, a shoe-making venture,
or even an assembler of cars or manufacturer of computer chips, where the BOI reasoning may
be accorded fuller faith and credit. The petrochemical industry is essential to the national
interest. In other ASEAN countries like Indonesia and Malaysia, the government superintends
the industry by controlling the upstream or cracker facility.
5. Manila Prince Hotel v. GSIS
G.R. No. 122156 February 3, 1997

FACTS:
Petitioner, a domestic corporation, filed a petition for prohibition and mandamus to stop
the Government Service Insurance System (GSIS) from selling the controlling shares (51%) of
the Manila Hotel Corporation to Renong Berhad, a foreign corporation. Allegedly, the sale
violates the second paragraph of section 10, Article XII of the Constitution.
The petitioner argues that the State shall give preference to qualified Filipinos as
mentioned in the FiIipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of
rights, privileges, and concessions covering the national economy and patrimony. Opposing,
respondents maintain that the provision is not self-executing but requires an implementing
legislation for its enforcement. Corollarily, both parties ask whether the 51% shares form part of
the national economy and patrimony covered by the protective mantle of the Constitution.
ISSUE:
WON the sale violates the second paragraph of section 10, Article XII of the
Constitution.
RULING:
Yes. Sec. 10, second par., Art. XII of the of the 1987 Constitution is a mandatory,
positive command which is complete in itself and which needs no further guidelines or
implementing laws or rules for its enforcement. It is per se judicially enforceable. When the
Constitution mandates that [i]n the grant of rights, privileges, and concessions covering national
economy and patrimony, the State shall give preference to qualified Filipinos, it means just that
— qualified Filipinos shall be preferred.
Further, when the Constitution speaks of national patrimony, it refers not only to the
natural resources of the Philippines, but also to the cultural heritage of the Filipinos. Manila
Hotel has become a landmark — a living testimonial of Philippine heritage.
The refusal of respondent GSIS to execute the corresponding documents with petitioner
as provided in the bidding rules after the latter has matched the bid of the Malaysian firm clearly
constitutes grave abuse of discretion and a clear violation to the Filipino First Policy enshrined in
Sec. 10, second par., Art. XII of the of the 1987 Constitution.
6. Tanada v. Angara, et al.
G.R. No. 118295 May 2, 1997

FACTS:
The Philippines joined World Trade Organization as a founding member. Petitioners
argue that the "letter, spirit and intent" of the Constitution mandating "economic nationalism" are
violated by the so-called "parity provisions" and "national treatment" of the WTO Agreement as
it "place nationals and products of member countries on the same footing as Filipinos and local
products," in contravention of the "Filipino First" policy of the Constitution. The "flagship"
constitutional provisions referred to are Sec 19, Article II, and Secs. 10 and 12, Article XII, of
the Constitution.
On the other hand, respondents through the Solicitor General counter that such Charter
provisions are not self-executing and merely set out general policies and that the cited WTO
clauses do not conflict with Constitution.
ISSUE:
WON Article II and Article XII are intended to be self-executing principles.
RULING:
No. By its very title, Article II of the Constitution is a "declaration of principles and state
policies." These principles in Article II are not intended to be self-executing principles ready for
enforcement through the courts. They are used by the judiciary as aids or as guides in the
exercise of its power of judicial review, and by the legislature in its enactment of laws.
It is true that in the recent case of Manila Prince Hotel vs. Government Service Insurance
System, et al., this Court held that "Sec. 10, second par., Art. XII of the 1987 Constitution is a
mandatory, positive command which is complete in itself and which needs no further guidelines
or implementing laws or rule for its enforcement. From its very words the provision does not
require any legislation to put it in operation. It is per se judicially enforceable." However, as the
constitutional provision itself states, it is enforceable only in regard to "the grants of rights,
privileges and concessions covering national economy and patrimony" and not to every aspect of
trade and commerce. It refers to exceptions rather than the rule.
Further, the Constitution ordains the ideals of economic nationalism (1) by expressing
preference in favor of qualified Filipinos "in the grant of rights, privileges and concessions
covering the national economy and patrimony" and in the use of "Filipino labor, domestic
materials and locally-produced goods. The Constitution takes into account the realities of the
outside world as it requires the pursuit of "a trade policy that serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality ad reciprocity"; and
speaks of industries "which are competitive in both domestic and foreign markets" as well as of
the protection of "Filipino enterprises against unfair foreign competition and trade practices."

7. Tatad v. Garcia Jr.,

G.R. No. 114222, April 6, 1995

FACTS:

In 1989, DOTC planned to construct a light railway transit line along EDSA, a major
thoroughfare in Metropolitan Manila, which shall traverse the cities of Pasay, Quezon,
Mandaluyong and Makati. In accordance with the provisions of BOT Law, a notice advertising
the prequalification of bidders was published. Five groups responded to the invitation. Thereafter
letters were sent to President Aquino recommending the award of the EDSA LRT III project to
the sole complying bidder, the EDSA LRT Consortium, and requesting for authority to negotiate
with the said firm for the contract.

Executive Secretary Franklin Drilon, who replaced Executive Secretary Orbos, informed
Secretary Prado that the President could not grant the requested approval for the following
reasons:

(1) that DOTC failed to conduct actual public bidding in compliance with Section 5 of the BOT
Law;
(2) that the law authorized public bidding as the only mode to award BOT projects, and the
prequalification proceedings was not the public bidding contemplated under the law;
(3) that Item 14 of the Implementing Rules and Regulations of the BOT Law which authorized
negotiated award of contract in addition to public bidding was of doubtful legality; and
(4) that congressional approval of the list of priority projects under the BOT or BT Scheme
provided in the law had not yet been granted at the time the contract was awarded.

ISSUE:
WON respondent EDSA LRT Corporation, Ltd., a foreign corporation, may own EDSA
LRT III, a public utility?

RULING:
YES, the Supreme Court held that it is true that the Constitution requires a franchise for the
operation of a public utility. However, it does not require a franchise before one can own the
facilities needed to operate a public utility so long as it does not operate them to serve the
public.

Section 11 of Article XII of the Constitution provides:

No franchise, certificate or any other form of authorization for the operation of a public

utility shall be granted except to citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines at least sixty per centum of whose capital is owned
by such citizens, nor shall such franchise, certificate or authorization be exclusive character or
for a longer period than fifty years
 The right to operate a public utility may exist independently and separately from the
ownership of the facilities thereof. While private respondent is the owner of the facilities
necessary to operate the EDSA. LRT III, it admits that it is not enfranchised to operate a public
In view of this incapacity, private respondent and DOTC agreed that on completion date, private
respondent will immediately deliver possession of the LRT system by way of lease for 25 years,
during which period DOTC shall operate the same as a common carrier and private respondent
shall provide technical maintenance and repair services to DOTC.

Mere formation of a public utility corporation does not ipso facto characterize the

corporation as one operating a public utility. The moment for determining the requisite Filipino
nationality is when the entity applies for a franchise, certificate or any other form of
authorization for that purpose.
8. Associated Communications v. NTC
G.R. No. 144109, February 17, 2003

FACTS:
Act No. 3846, entitled "An Act Providing for the Regulation of Radio Stations and Radio
Communications in the Philippines and for Other Purposes,". Congress enacted in 1965 R.A. No.
4551 which gave the grantees a 50-year franchise. In 1969, the franchise was transferred to
petitioner Associated Communications & Wireless Services – United Broadcasting Network, Inc.
through Congress’ Concurrent Resolution No. 58. Petitioner ACWS then engaged in the
installation and operation of several radio stations around the country.
In 1974, P.D. No. 576-A, "Regulating the Ownership and Operation of Radio and
Television Stations and for other Purposes" was issued. A few years later or in 1979, E.O. No.
546 was issued. It integrated the Board of Communications and the Telecommunications
Control Bureau into the NTC. Among the powers vested in the NTC under Sec. 15 of E.O. No.
546 are the following:
a. Issue Certificate of Public Convenience for the operation of communication utilities
and services, radio communications systems, wire or wireless telephone or telegraph system,
radio and television broadcasting system and other similar public utilities;
c. Grant permits for the use of radio frequencies for wireless telephone and telegraph
systems and radio communication systems including amateur radio stations and radio and
television broadcasting systems
Upon termination of petitioner’s franchise on December 31, 1981 pursuant to P.D. No.
576-A, it continued operating its radio stations under permits granted by the NTC.

ISSUE:

WON a congressional franchise is a condition sine qua non in the operation of a radio and
television broadcasting system.

RULING:

YES, the Supreme Court held that a congressional franchise is required for the operation
of radio and television broadcasting stations as this requirement under Act No. 3846 was not
expressly repealed by P.D. No. 576-A nor E.O. No. 546.

The appellate court correctly ruled that a congressional franchise is necessary for petitioner
to operate television Channel 25. A textual interpretation of Section 6 of P.D. No. 576-A yields
the same interpretation that after December 31, 1981, a franchise is still necessary to operate
radio and television stations.  P.D. No. 576-A did not dispense with the requirement of a
congressional franchise. It merely abolished the Board of Communications and the
Telecommunications Control Bureau under the Reorganization Plan and transferred their
functions to the NTC, including the power to issue Certificates of Public Convenience (CPC)
and grant permits for the use of frequencies.

9. JG Summit Holdings Inc. v. CA,

G.R. No. 124293, September 24, 2003

FACTS:

A Joint Venture Agreement (JVA) was entered by a government corporation, National

Investment and Development Corporation (NIDC) with a Japanese corporation, Kawasaki Heavy
Industries, Ltd. (Kawasaki) for a shipyard business, Philippine Shipyard and Engineering
Corporation (PHILSECO). After negotiations, it was agreed that Kawasaki’s right of first refusal
under the JVA be “exchanged” for the right to top by 5% the highest bid for said shares.
Kawasaki informed that Philyards Holdings, Inc. (PHI), in which it was a stockholder, would
exercise this right in its stead. Petitioner JG Summit Holdings was declared highest bidder. Even
so, because of the right to top by 5% percent the highest bid, Kawasaki/PHI’s was able to top the
winning bid. JG Summit protested, contending that PHILSECO, as a shipyard is a public utility
and, hence, must observe the 60%-40% Filipino-foreign capitalization. By buying 87.67% of
PHILSECO’s capital stock at bidding, Kawasaki/PHI in effect now owns more than 40% of the
stock, thus violative of the laws.

ISSUE:

WON PHILSECO, a shipyard, is a public utility and hence Kawasaki, a foreign

corporation, can acquire only a maximum of 40% of its capital.

RULING:

NO. PHILSECO is not considered a public utility. First, because a shipyard which is a place or
enclosure where ships are built or repaired is in its nature serves a limited clientele and not
legally obliged to render its services indiscriminately to the public. While the business may be
regulated for public good, it does not justify the qualifications for public utility which implies
public use and service to the public hence it must be engaged in regularly supplying the public
with some commodity or service of public consequence. Second, it is not declared as public
utility by law. Based on its legislative history, since the enactment of Act No. 2307 which
created the Public Utility Commision (PUC) until repealed by Commonwealth Act No. 146
establishing Public Service Commission, a shipyard was a public utility and should abide by the
Filipino citizenship requirement of 60-40 capital of a corporation. Thereafter, Pres. Marcos
issued PD No. 666 which removed the shipbuilding and ship repair industry from the list of
public utilities thereby freeing it from the 60-40 citizenship requirement. Batas Pambansa Blg.
391 repealed the PD No. 666 and reverted shipyards as public utilities. Then Pres. Aquino’s EO
No. 226 repealed the previous laws with no revival of the principle that shipyards are public
utilities. Thus, absent of such legislation declaring the same, a shipyard reverts back to its status
as a non-public utility.
Therefore, there was nothing preventing Kawasaki from acquiring more than 40% of
PHILSECO’s total capitalization. The JVA should also be interpreted as the phrase “maintaining
a proportion of 60%-40%” refers to their respective share of the burden each time the Board of
Directors decides to increase the subscription to reach the target paid-up capital of P312 million.
It does not bind the parties to maintain the sharing scheme all throughout the existence of their
partnership.

10. Eastern Assurance v. LTFRB

G.R. No. 149717, October 7, 2003

FACTS:

In its desire to improve public service and its assistance to the victims of road accidents
involving Public Utility Vehicles (PUV), the LTFRB conducted a thorough investigation on the
sufficiency of existing insurance policies for PUVs. In its investigation, the Board discovered
that insurance coverage of PUVs was only P50,000.00 for the entire vehicle regardless of the
number of passengers or persons killed or injured. Thereafter, the Board issued Memorandum
Circular No. 99-011 fixing the insurance coverage of PUVs on the basis of the number of
persons that may be killed or injured instead of the entire vehicle alone. The coverage is
denominated as Passenger Accident Insurance Coverage (PAIC), which fixes the coverage of
P50,000.00 per passenger.

During the effectivity of Memorandum Circular No. 99-011, the Board received several
complaints from various transport organizations. Consequently, the Board held a series of
meetings with the various transport groups as well as representatives of several insurance
companies and officials of the Insurance Commission. The LTFRB made a one-month
nationwide information campaign on the nature of the two-group system and of the blacklisting
scheme. And in a meeting with the different insurance companies, including the representative of
EASCO, the Insurance Commission representative read before the participants the insurance
firms blacklisted by RTC of Quezon City which includes EASCO. The purpose of this
information is to afford the blacklisted firms an opportunity to clear their records and settle the
claims against them. Claiming that M.C. No. 2001-001 and the implementing Circulars had
deprived it of its right to engage in the passenger accident insurance business, EASCO filed a
Petition for Certiorari and Prohibition with the CA questioning the validity of those issuances.

ISSUE:

WON Memorandum Circular No. 2001-001 and the subsequent implementing Circulars
violate the constitutional proscription against monopoly as well as unfair competition and
combination in restraint of trade.

RULING:

NO, the subject Memorandum Circulars were issued for purposes of promoting public
interest; and of protecting the riding public and PUV operators from being defrauded by fake,
undervalued or misrepresented insurance policies.
 The Court ruled that while embracing free enterprise as an economic creed, the
Constitution does not totally prohibit the operation of monopolies. However, it mandates the
State to regulate them when public interest so requires pursuant to the constitutional provision in
Sec. 19, Article XII, “The State shall regulate or prohibit monopolies when the public interest so
requires. No combinations in restraint of trade or unfair competition shall be allowed.”

Furthermore, PUVs, as common carriers, are engaged in a business affected with public
interest. To assure compensation to victims in cases of death or injuries of passengers (Art. 1756,
Civil Code), PUVs are required to obtain insurance policies. Even with this insurance
requirement, the riding public remains at risk of inadequate cover, because many insurance
companies are individually incapable of meeting the compensation standards. Worse, the
pernicious competition and fraudulent practices have resulted in failure to meet the compensation
requirements of the law.

Indeed, in authorizing and regulating the two insurance monopolies, the LTFRB acted
within its prerogatives in promoting public interest and protecting the riding public. After all, the
consortia are open to all insurance companies, including petitioner. There is no discrimination
against any legitimate insurer. On the whole, the public is given protection without unfair
competition or undue restraint of trade. As the CA pointed out, the two consortia are not engaged
in the insurance business; they merely serve as service arms of their respective members.
11. TATAD v. SECRETARY OF DOE (1997)
FACTS:
RA No. 8180 entitled “An Act Deregulating the Downstream Oil Industry and For Other
Purposes” was enacted by Congress on March 1996; It aimed to deregulate the downstream oil
industry in the Philippines by mandating that “any person or entity may import or purchase any
quantity of crude oil and petroleum products from a foreign or domestic source, lease or own and
operate refineries and other downstream oil facilities and market such crude oil or use the same
for his own requirement," subject only to monitoring by the Department of Energy.
Under RA 8180, tariff duty shall be imposed and collected on imported crude oil at the
rate of three percent (3%) and imported refined petroleum products at the rate of seven percent
(7%), except fuel oil and LPG, the rate for which shall be the same as that for imported crude oil.
Petitioners contend that this provision is unconstitutional since it allows the formation of a de
facto cartel among the three existing oil companies – Petron, Caltex, and Shell – in violation of
the constitution prohibition against monopolies, combinations in restraint of trade, and unfair
competition.
ISSUE:
WON RA 8180 is unconstitutional?
RULING:
Yes. Section 19 of Article XII of the Constitution allegedly violated by the aforestated
provisions of R.A. No. 8180 mandates: "The State shall regulate or prohibit monopolies when
the public interest so requires. No combinations in restraint of trade or unfair competition shall
be allowed." Section 19, Article XII of our Constitution is anti-trust in history and in spirit. Its
underlying principle is the encouragement of competition. In the cases at bar, it cannot be denied
that our downstream oil industry is operated and controlled by an oligopoly, a foreign oligopoly
at that. Petron, Shell and Caltex stand as the only major league players in the oil market. The
tariff differential imposed by RA 8180 works to their immense benefit because it erects a high
barrier to the entry of new players in the oil industry. Those who will not build refineries but
compete with them will suffer the huge disadvantage of increasing their product cost by 4%.
They will be competing on an uneven field.
Despite RA 8180 having a separability clause, the Court saw it fit to strike down the
entire law since contrary to their intent, the provisions on tariff differential, inventory and
predatory pricing inhibit fair competition, encourage monopolistic power and interfere with the
free interaction of market forces. Before deregulation, PETRON, SHELL and CALTEX had no
real competitors but did not have a free run of the market because government controls both the
pricing and non-pricing aspects of the oil industry. After deregulation, PETRON, SHELL and
CALTEX remain unthreatened by real competition yet are no longer subject to control by
government with respect to their pricing and non-pricing decisions. The aftermath of R.A. No.
8180 is a deregulated market where competition can be corrupted and where market forces can
be manipulated by oligopolies.
12. PLDT v. The National Telecommunications Commission and Cellcom
G.R. No. 88404 October 18, 1990

FACTS:
RA 2090, was enacted granting Felix Alberto and Company, Incorporated, a Franchise to
Establish Radio Stations for Domestic and Transoceanic Telecommunications. Felix Alberto &
Co., Inc. (FACI) was the original corporate name, which was changed to ETCI. ETCI filed an
application with public respondent NTC for the issuance of a Certificate of Public Convenience
and Necessity (CPCN with a prayer for provisional authority to operate Phase A of its proposal.

PLDT filed an Opposition. NTC overruled PLDT's Opposition. NTC granted ETCI provisional
authority to install, operate and maintain a cellular mobile telephone system initially in Metro
Manila, Phase A only, subject to a condition that ETCI and PLDT shall enter into an
interconnection agreement for the provision of adequate interconnection facilities between
applicant's cellular mobile telephone switch and the public switched telephone network and shall
jointly submit such interconnection agreement to the Commission for approval.

ISSUE:
WON the decision of NTC is correct.
RULING:

YES. Rep. Act No. 6849, or the Municipal Telephone Act of 1989 mandates
interconnection providing as it does that "all domestic telecommunications carriers or utilities
shall be interconnected to the public switch telephone network." Such regulation of the use and
ownership of telecommunications systems is in the exercise of the plenary police power of the
State for the promotion of the general welfare. The 1987 Constitution recognizes the existence of
that power when it provides.

SEC. 6. The use of property bears a social function, and all economic agents shall
contribute to the common good. Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have the right to own, establish, and
operate economic enterprises, subject to the duty of the State to promote distributive justice and
to intervene when the common good so demands (Article XII).

interconnection which has been required of PLDT is a form of "intervention" with

property rights dictated by "the objective of government to promote the rapid expansion of
telecommunications services in all areas of the Philippines, ... to maximize the use of
telecommunications facilities available, ... in recognition of the vital role of communications in
nation building ... and to ensure that all users of the public telecommunications service have
access to all other users of the service wherever they may be within the Philippines at an
acceptable standard of service and at reasonable cost" (DOTC Circular No. 90-248).
Undoubtedly, the encompassing objective is the common good. The NTC, as the regulatory
agency of the State, merely exercised its delegated authority to regulate the use of
telecommunications networks when it decreed interconnection.
The decisive considerations are public need, public interest, and the common good.
Those were the overriding factors which motivated NTC in granting provisional authority to
ETCI. Article II, Section 24 of the 1987 Constitution, recognizes the vital role of
communication and information in nation building. It is likewise a State policy to provide
the environment for the emergence of communications structures suitable to the balanced
flow of information into, out of, and across the country (Article XVI, Section 10, Ibid.). A
modern and dependable communications network rendering efficient and reasonably priced
services is also indispensable for accelerated economic recovery and development. To these
public and national interests, public utility companies must bow and yield.