Self-executory and non-self-executory

Manila Prince Hotel v GSIS

GR No. 122156, Feb 3, 1997

FACTS
- GSIS (respondent) decided to sell 30% to 51% of shares of Manila Hotel Corporation
(MHC) through a public bidding as part of the Philippine privatization under.

- Whereas the winning bidder will be the one to provide management expertise and/or
international marketing/reservation system, and financial support that will strengthen the
profitability and performance of Manila Hotel.

- During the bidding period, only two bidders participated (1) Manila Prince Hotel
(petitioner) is a Filipino corporation who offered to buy 51% of the corporations share at
Php41.58 per share or Php15,300,000.00; (2) Renong Berhad, Malaysian firm, with ITT-
Sheraton as its hotel operator, which offered to buy 51% of the corporation’s share at
Php44.00 per share or Php2,420,000.00, this amount is more than the bid of the
petitioner.

- On Sept. 28, 1995, the petitioner sent a letter of intent to the respondent to match the bid
price of Renong Berhad. Also, on Oct. 10, 1995 the petitioner sent a manager’s check
amounting to Php33,000,000.00 as a bid security. However, the respondent refuse to
accept the check.

- On Oct. 17, 1995 the petitioner file for prohibition and mandamus at the Supreme Court
which then on Oct. 18, 1995, issued a TRO enjoining respondent from perfecting and
consummating the sale to Renong Berhad.

ISSUE(s)
Whether Sec. 10 of Art. 12 Philippine Constitution’s provision is self-executory.

- Sec. 10, Art. 12 – the state shall promote the preferential use of Filipino labor,
domestic materials and locally produced goods and adopts measures that help
make them competitive.

RULING
YES, Whereas, Manila Hotel Corporation (MHC) and the Office of the Government Corporate
Counsel are directed to cease and desist from selling 51% of the shares of the Manila Hotel
Corporation to Renong Berhad, and to accept the matching bid of the petitioner (Manila Prince
Hotel Corporation) to purchase the subject 51% of the shares of the MHC at Php44.00 per
share and thereafter to execute necessary agreements and documents to effect the sale, to
issue necessary clearances and to do such other acts and deeds as may be for necessary for
the purpose.

DOCTRINE
In case of doubt, the Constitution should be considered self-executing rather than non-self-
executing.

Unless the contrary is clearly intended, the provisions of the Constitution should be considered
self-executing, as a contrary rule would give the legislature discretion to determine when, or
whether, they shall be effective. These provisions would be subordinated to the will of the
lawmaking body, which could make them entirely meaningless by simply refusing to pass the
needed implementing statute.

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. From its very words the provision does not require any
legislation to put it in operation. It is per se judicially enforceable When our 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
As regards our national patrimony, a member of the 1986 Constitutional Commission   explains —34

The patrimony of the Nation that should be conserved and developed refers
not only to out rich natural resources but also to the cultural heritage of out
race. It also refers to our intelligence in arts, sciences and letters. Therefore,
we should develop not only our lands, forests, mines and other natural
resources but also the mental ability or faculty of our people.

We agree. In its plain and ordinary meaning, the term patrimony pertains to heritage.   When the
35

Constitution speaks of national patrimony, it refers not only to the natural resources of the
Philippines, as the Constitution could have very well used the term natural resources, but also to
the cultural heritage of the Filipinos.

The Filipino First Policy is a product of Philippine nationalism. It is embodied in the 1987 Constitution
not merely to be used as a guideline for future legislation but primarily to be enforced; so must it be
enforced.

Tondo Medical Hospital v CA

FACTS
- In 1999, the Department of Health (DOH) launched the Health Sector Reform Agenda
(HSRA). However, the petitioners alleged that the implementation of HRSA had resulted
in making free medicine and free medical services inaccessible to economically
disadvantaged Filipino. Furthermore, the petitioners alleged that the HRSA is void for
being in violation of constitutional provisions (Art. 2 Sec 1, Art 2 Sec 5, Sec 9, Sec
10, Sec 11, Sec 13, Sec 15, Sec 18; Art. 15 Sec 1, Sec 3(2); Art. 13 Sec 11 & Sec 14)

- ART. III, SEC. 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 law.

- ART II, SEC. 5. The maintenance of peace and order, the protection of life, liberty, and
property, and the promotion of the general welfare are essential for the enjoyment of all the
people of the blessings of democracy.

- ART II, SEC. 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 services, promote full employment, a rising standard of living
and an improved quality of life for all.

- ART II, SEC. 10. The State shall promote social justice in all phases of national
development.

- ART II, SEC. 11. The State values the dignity of every human person and guarantees full
respect for human rights.

- ART II, SEC. 13. The State recognizes the vital role of the youth in nation-building and shall
promote and protect their physical, moral, spiritual, intellectual and social well-being x x x.

- ART II, SEC. 18. The State affirms labor as a primary social economic force. It shall protect
the rights of workers and promote their welfare.

- ART XV, SEC. 1. The State recognizes the Filipino family as the foundation of the nation.
Accordingly, it shall strengthen its solidarity and actively promote its total development.

- ART XV, SEC. 3. The State shall defend:

- xxxx
 - (2) the right of children to assistance, including proper care and nutrition, and special
protection from all forms of neglect, abuse, cruelty, exploitation and other conditions
prejudicial to their development.

- xxxx

- ART XIII, SEC. 14. The State shall protect working women by providing safe and healthful
working conditions, taking into account their maternal functions, and such facilities and
opportunities that will enhance their welfare and enable them to realize their full potential in
the service of the nation.

- ART II, SEC. 15. The State shall protect and promote the right to health of the people and
instill health consciousness among them.

- ART XIII, SEC. 11. The State shall adopt an integrated and comprehensive approach to
health development which shall endeavor to make essential goods, health and other social
services available to all people at affordable cost. There shall be priority for the needs of the
underprivileged sick, elderly, disabled, women, and children. The State shall endeavor to
provide free medical care to paupers.

-
- On May 24, 1999 former Pres. Joseph Ejercito Estrada issued Executive Order No.
102, entitled “Redirecting the Functions and Operations of the Department of
Health” which changes in the roles, functions, and organizational processes of
the DOH.
- Sec. 4 of EO No. 102, states the preparation of Rationalized and Streamlining Plan
(RSP) which shall be the basis of the intended changes in the roles, functions, and
organizational processed of the DOH.
- However, the petitioners contended that the law, EO No. 102, should be enacted by
Congress in exercise of its legislative power. Thus, the petitioners argued that EO
No. 102 is void, for the reason of excess us of President’s authority.
- The petitioners claim the RSP was not in accordance with the law. Moreover, the RSP
was allegedly implemented even if the DBM did not approved it.
- The Court of Appeals (CA) denied the petition due to numbers of procedural
defects, which then proved fatal. Thus, it explains that the implementation of HRSA
cannot be declared void for violating the various sections and articles of the Phil.
Constitution.
- On Mar. 7, 2005, petitioners filed a motion for reconsiderations. However, the petition
was denied thru a resolution.

ISSUE
Whether or not the HRSA and EO No. 102 violates various constitutional provisions (e.g. Sec.
10, Art 2 of the 1987 Phil. Consti), which could be grounds for their nullification.

RULING
No, the court finds the petition to be without merit.

DOCTRINE
Generally, the provisions of the Philippine Constitution are considered self-executing
and do not require future legislation for their enforcement. If they are not treated as self-
executory, the mandate of the fundamental law can be easily nullified by the inaction of
congress. However, some provisions have already been categorically declared by its
court as non-self-executory.
Title: JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA,
minors, et. Al. vs THE HONORABLE FULGENCIO S. FACTORAN, JR., SCRA 792 G.R. No.
101083 Date of Promulgation: July 30, 1993 Ponente: Davide, Jr., J.

Facts:

The controversy begun as Civil Case No. 90-77 which was filed before the RTC of Makati City
Branch 66

The principal petitioners, are all minors duly represented and joined by their respective parents,
and the Philippine Ecological Network, Inc. (PENI), a domestic, non-stock and non-profit
corporation and engage in the activities of promoting the protection of our environment and
natural resources. The complaint was instituted as a taxpayers' class suit and alleges that 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 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.

It is prayed for that judgment be rendered ordering defendant, his agents, representatives and
other persons acting in his behalf to: (1) Cancel all existing timber license agreements (TLAs) in
the country; (2) Cease and desist from receiving, accepting, processing, renewing or approving
new TLAs. and (3) granting the plaintiffs such other reliefs just and equitable under the
premises.

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. And that the adverse and detrimental
consequences of continued and deforestation in the Philippines are so capable of
unquestionable demonstration that the same may be submitted as a matter of judicial notice.

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.

On 18 July 1991, Makati RTC issued an order granting the aforementioned motion to dismiss. 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 asked the Court to rescind and set aside the dismissal order on the ground
that the respondent Judge gravely abused his discretion in dismissing the action.

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, the right of the people to a
balanced and healthful ecology, the concept of generational genocide and the concept of man's
inalienable right to self-preservation and selfperpetuation. 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. Non-impairment clause does not
apply in this case because TLAs are not contracts. 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.

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.

Issue/s:

Whether or not the 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.

Ruling: (YES)

RIGHT TO A BALANCED AND HEALTHFUL ECOLOGY:

The complaint focuses on 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). 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.

While the right to a balanced and healthful ecology is 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.

The right to a balanced and healthful ecology carries with it the correlative duty to refrain
from impairing the environment. 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 irreversibly disrupted.
Conformably with the enunciated right to a balanced and healthful ecology and the right to
health, then President Corazon C. Aquino promulgated on 10 June 1987 E.O. No. 192,
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." -

This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative
Code of 1987. It 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.

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.

On 6 June 1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152 (Philippine
Environment Code) were issued. As its goal, it speaks of the "responsibilities of each generation
as trustee and guardian of the environment for succeeding generations." 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 correlative duty or obligation
to respect or protect the same gives rise to a cause of action.

CAUSE OF ACTION: -

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.

The question submitted to the court for resolution involves the sufficiency of the facts alleged in
the complaint itself.

Falsity of the said allegations is beside the point for the truth thereof is deemed hypothetically
admitted.

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.

NON-IMPAIRMENT OF CONTRACTS:

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 declared that 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 amount to impairment of contracts abhorred by the fundamental law.

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 . . .

Tan vs. Director of Forestry:. . .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.

Since timber licenses are not contracts, the non-impairment clause cannot be invoked.

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.

Abe vs. Foster Wheeler Corp.: 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.

In short, the non-impairment clause must yield to the police power of the state. All Concurring
Separate Opinions
NATIONAL TERRITOTY

Prof. Merlin M. Magallona vs. Hon. Eduardo Ermita

G.R. No. 187167 August 16, 2011

Facts:

In 1961, Congress passed Republic Act No. 3046 demarcating the maritime baselines of the
Philippines as an archipelagic State. In March 2009, Congress amended RA 3046 by
enacting RA 9522, the statute now under scrutiny. The change was prompted by the need to
make RA 3046 compliant with the terms of the United Nations Convention on the Law of the
Sea (UNCLOS III), which the Philippines ratified on 27 February 1984. Among others, UNCLOS
III prescribes the water-land ratio, length, and contour of baselines of archipelagic States
like the Philippines and sets the deadline for the filing of application for the extended
continental shelf. Complying with these requirements, RA 9522 shortened one baseline,
optimized the location of some basepoints around the Philippine archipelago and
classified adjacent territories, namely, the Kalayaan Island Group (KIG) and the
Scarborough Shoal, as "regimes of islands" whose islands generate their own applicable
maritime zones. Petitioners assail the constitutionality of RA 9522 on two principal grounds,
namely: (1) RA 9522 reduces Philippine maritime territory, and logically, the reach of the
Philippine state’s sovereign power, in violation of Article 1 of the 1987 Constitution, embodying
the terms of the Treaty of Paris and ancillary treaties, and (2) RA 9522 opens the country’s
waters landward of the baselines to maritime passage by all vessels and aircrafts, undermining
Philippine sovereignty and national security, contravening the country’s nuclear-free policy, and
damaging marine resources, in violation of relevant constitutional provisions.

Issue:

1. Whether RA 9522 is constitutional

2. Whether RA 9522 use of the framework of the regime islands to determine the maritime
zones of the KIG and the scarborough shoal, inconsistent with the Philippines claim of
sovereignty over these areas.
3. Whether UNCLOS III and RA 9522 compatible with the constitution’s delineation of
internal waters.
4. Whether RA 9522 failed to textualize the Philippine claim over Sabah in North Borneo
5. Whether Congress was not bound to pass RA 9522.

Ruling:

1. No, RA 9522 is Not Unconstitutional RA 9522 is a Statutory Tool to Demarcate the

Country’s Maritime Zones and Continental Shelf Under UNCLOS III, not to Delineate
Philippine Territory UNCLOS III has nothing to do with the acquisition (or loss) of
territory. It is a multilateral treaty regulating, among others, sea-use rights over maritime
zones (i.e., the territorial waters [12 nautical miles from the baselines], contiguous zone
 [24 nautical miles from the baselines], exclusive economic zone [200 nautical miles from
the baselines]), and continental shelves that UNCLOS III delimits
On the other hand, baselines laws such as RA 9522 are enacted by UNCLOS III States
parties to mark-out specific basepoints along their coasts from which baselines are
drawn, either straight or contoured, to serve as geographic starting points to measure
the breadth of the maritime zones and continental shelf. In turn, this gives notice to the
rest of the international community of the scope of the maritime space and submarine
areas within which States parties exercise treaty-based rights, namely, the exercise of
sovereignty over territorial waters (Article 2), the jurisdiction to enforce customs, fiscal,
immigration, and sanitation laws in the contiguous zone (Article 33), and the right to
exploit the living and non-living resources in the exclusive economic zone (Article 56)
and continental shelf (Article 77).

Even under petitioners’ theory that the Philippine territory embraces the islands and all
the waters within the rectangular area delimited in the Treaty of Paris, the baselines
of the Philippines would still have to be drawn in accordance with RA 9522
because this is the only way to draw the baselines in conformity with UNCLOS III.
The baselines cannot be drawn from the boundaries or other portions of the rectangular
area delineated in the Treaty of Paris, but from the "outermost islands and drying reefs
of the archipelago."

Under traditional international law typology, States acquire (or conversely, lose) territory
through occupation, accretion, cession and prescription, not by executing multilateral
treaties on the regulations of sea-use rights or enacting statutes to comply with the
treaty’s terms to delimit maritime zones and continental shelves. Territorial claims to land
features are outside UNCLOS III, and are instead governed by the rules on general
international law.

2. NO, The use of the framework of the regime islands to determine the maritime zones of
the KIG and the scarborough shoal, is not inconsistent with the Philippines claim of
sovereignty over these areas.

The configuration of the baselines drawn under RA 3046 and RA 9522 shows that RA
9522 merely followed the basepoints mapped by RA 3046, save for at least nine
basepoints that RA 9522 skipped to optimize the location of basepoints and adjust the
length of one baseline (and thus comply with UNCLOS III’s limitation on the maximum
length of baselines). Under RA 3046, as under RA 9522, the KIG and the Scarborough
Shoal lie outside of the baselines drawn around the Philippine archipelago. This
undeniable cartographic fact takes the wind out of petitioners’ argument branding RA
9522 as a statutory renunciation of the Philippines’ claim over the KIG, assuming that
baselines are relevant for this purpose.

Petitioners’ assertion of loss of "about 15,000 square nautical miles of territorial waters"
under RA 9522 is similarly unfounded both in fact and law. On the contrary, RA 9522, by
optimizing the location of basepoints, increased the Philippines’ total maritime space
(covering its internal waters, territorial sea and exclusive economic zone) by 145,216
square nautical miles, 

the reach of the exclusive economic zone drawn under RA 9522 even extends way beyond the
waters covered by the rectangular demarcation under the Treaty of Paris. Of course, where
there are overlapping exclusive economic zones of opposite or adjacent States, there will have
to be a delineation of maritime boundaries in accordance with UNCLOS III.

Had Congress in RA 9522 enclosed the KIG and the Scarborough Shoal as part of the
Philippine archipelago, adverse legal effects would have ensued. The Philippines would have
committed a breach of two provisions of UNCLOS III. First, Article 47 (3) of UNCLOS III
requires that "[t]he drawing of such baselines shall not depart to any appreciable extent
from the general configuration of the archipelago." Second, Article 47 (2) of UNCLOS III
requires that "the length of the baselines shall not exceed 100 nautical miles," save for
three per cent (3%) of the total number of baselines which can reach up to 125 nautical
miles.31

Although the Philippines has consistently claimed sovereignty over the KIG 32 and the
Scarborough Shoal for several decades, these outlying areas are located at an
appreciable distance from the nearest shoreline of the Philippine archipelago, 33 such that
any straight baseline loped around them from the nearest basepoint will inevitably
"depart to an appreciable extent from the general configuration of the archipelago."

we are still allowed by internal law to claim them as our own.

This is called c

ested islands outside our configuration. 

3. Yes UNCLOS III and RA 9522 are compatible with the constitutions delineation of
internal waters.

The fact of sovereignty, however, does not preclude the operation of municipal and
international law norms subjecting the territorial sea or archipelagic waters to necessary,
if not marginal, burdens in the interest of maintaining unimpeded, expeditious
international navigation, consistent with the international law principle of freedom of
navigation. Thus, domestically, the political branches of the Philippine government,
in the competent discharge of their constitutional powers, may pass legislation
designating routes within the archipelagic waters to regulate innocent and sea
lanes passage.

4. No, RA 9522 did not fail to textualize the Philippine claim over Sabah in North Borneo
Section 2 of RA 5446, which RA 9522 did not repeal, keeps open the door for drawing
the baselines of Sabah: Section 2. The definition of the baselines of the territorial sea of
the Philippine Archipelago as provided in this Act is without prejudice to the delineation
of the baselines of the territorial sea around the territory of Sabah, situated in North
Borneo, over which the Republic of the Philippines has acquired dominion and
sovereignty
5. No, the prerogative belongs to Congress, not to the Court. Absent an UNCLOS III
compliant baselines law, an archipelagic State like the Philippines will find itself devoid of
internationally acceptable baselines from where the breadth of its maritime zones and
continental shelf is measured. This is recipe for a two-fronted disaster: first, it sends
an open invitation to the seafaring powers to freely enter and exploit the
resources in the waters and submarine areas around our archipelago;
and second, it weakens the country’s case in any international dispute over
Philippine maritime space. These are consequences Congress wisely avoided. The
enactment of UNCLOS III compliant baselines law for the Philippine archipelago and
adjacent areas, as embodied in RA 9522, allows an internationally-recognized
delimitation of the breadth of the Philippines’ maritime zones and continental shelf. RA
9522 is therefore a most vital step on the part of the Philippines in safeguarding its
maritime zones, consistent with the Constitution and our national interest.

FACTS:
On 22 January 2013, the Philippines instituted arbitral proceedings against China in a
dispute concerning their respective “maritime entitlements” and the legality of Chinese
activities in the South China Sea. In response, by a diplomatic note dated 19 February
2013 addressed to the Philippines, China expressed its rejection of the arbitration.
In China’s view, the Arbitral Tribunal did not have jurisdiction in the case because
China’s acceptance of dispute settlement under the UN Convention on the Law of the
Sea (UNCLOS) – the basis put forward by the Philippines – was limited and excluded
sea boundary delimitations and the determination of historic titles. Since then, China
has continuously refused either to accept or to participate in the arbitral proceedings
initiated by the Philippines. The tribunal, however, did not see this as an obstacle: on 29
October 2015, it delivered its first award finding that it had jurisdiction, and, on 12 July
2016, its award deciding on the merits of the dispute.
ISSUE:
a. Whether the “nine-dash line” and China’s claim to historic rights in the South China
Sea is in conformity with the UNCLOS.
b. Whether the status of certain maritime features in the South China Sea is legal.
c. Whether the Chinese activities in the South China Sea are of legal basis.
RULING:

THE “NINE-DASH LINE” AND THE ALLEGED CHINESE HISTORIC

RIGHTS

No, it first observed that this area – in which China claimed rights, “formed in
the long historical course”, to living and non-living resources (i.e. fisheries and
petroleum resources) – partially overlaps with areas that would otherwise
comprise the exclusive economic zone (EEZ) or the continental shelf (CS) of
the Philippines. In the view of the tribunal, UNCLOS establishes a
comprehensive maritime zones regime and allocates rights in these areas to
the coastal state and other states: in the areas of the EEZ and the CS, the
coastal state enjoys exclusive sovereign rights to the exploitation of living and
non-living natural resources. Concerning the rights of other states in these
areas, the tribunal found that UNCLOS does not permit the preservation of
historic rights of any state within the EEZ or the CS of another state.
Therefore, after the entry into force of UNCLOS, the historic rights that might
have existed for China within the “nine-dash line” in areas that would
otherwise include the EEZ or the CS of the Philippines were superseded by
the maritime zones’ regime created by UNCLOS. That means the pre-existing
historic rights no longer exist as they are not compatible with UNCLOS.
Accordingly, the tribunal concluded that China’s claims were contrary to
UNCLOS and exceeded the geographic limits imposed by it.

THE STATUS OF MARITIME FEATURES

In a next step, the tribunal determined the legal status of certain maritime
features occupied by China in the South China Sea. Determining whether
these are “islands", “rocks", “low-tide elevations” (LTEs) or “submerged
banks” is important because, unlike fully entitled islands, rocks which cannot
sustain human habitation or economic life of their own do not generate an
EEZ and a CS. Consequently, rocks do not give rights to resource exploitation
beyond their territorial sea. Furthermore, LTEs or submerged banks do not
generate any maritime zone. The tribunal found most disputed maritime
features not to be capable of generating an EEZ or CS: it
classified Scarborough Shoal as a rock, and among those features in the
Spratly Islands, it found Mischief Reef, Subi Reef and Second Thomas Shoal
to be LTEs, and Johnson Reef, Cuarteron Reef and Fiery Cross Reef to be
mere rocks. However, contrary to the Philippines’ position, the tribunal
concluded that Gaven Reef (North) and McKennan Reef are rocks that are
not capable of generating an EEZ or a CS.

The tribunal assessed the status of these features taking into consideration
their natural condition, prior to human modifications. In this respect, the
Tribunal emphasized that China’s construction of installations and significant
reclamation work as well as its maintenance of military or governmental
personnel or civilians cannot enhance a feature’s status from rock or a LTE to
a fully entitled island capable of generating an EEZ and a CS.

CHINESE ACTIVITIES IN THE SOUTH CHINA SEA

The tribunal also ruled on the legality of activities of Chinese officials and
Chinese vessels in the areas of the South China Sea located within the
Philippines’ EEZ and CS. It concluded that China breached the provisions of
UNCLOS, in particular by (a) temporarily prohibiting fishing in areas of the
South China Sea falling within the Philippines’ EEZ, (b) failing to prevent
Chinese vessels from fishing in the Philippines’ EEZ at Mischief Reef and
Second Thomas Shoal and (c) preventing Filipino fishermen from engaging in
traditional fishing at Scarborough Shoal. Regarding China’s construction of
artificial islands, installations and structures at Mischief Reef – a LTE which is
part of the Philippines’ EEZ and CS – without the authorization of the
Philippines, the tribunal also found China to have violated UNCLOS.

In addition, with respect to the protection and preservation of the marine

environment in the South China Sea, the tribunal found that China breached
UNCLOS since it failed to prevent fishermen from Chinese flagged vessels
from harvesting (a) endangered species on a significant scale and (b) in such
a manner as to destroy the coral reef ecosystem. Furthermore, the tribunal
held that China’s land reclamation and construction of artificial islands,
installations and structures in the Spratly Islands caused severe, irreparable
harm to the coral reef ecosystem.

THE AFTERMATH OF THE TRIBUNAL’S DECISION

The Philippines welcomed the award, which vindicated most of its claims, and
stated that it remained open to negotiate with China. Conversely, China
rejected the decision as illegal, null and void and therefore without any binding
effect on itself. Other countries, including the United States, Vietnam,
Australia and Japan, backed the Philippines and called on China to respect
the tribunal’s decision. On the other hand, Cambodia supported China’s non-
acceptance of the award. ASEAN members issued a joint communiqué
reaffirming the need to avoid actions that might escalate tensions in the South
China Sea and to seek the peaceful resolution of disputes in accordance with
international law, including UNCLOS.

The tribunal’s ruling is certainly a legal victory for the Philippines over China
as the judges agreed unanimously on almost all the questions submitted by
the Philippines, including a declaration from the tribunal that China is obliged
to comply with UNCLOS and that the award is legally binding on China. There
is no enforcement mechanism as such under UNCLOS in the event that
China fails to comply with the tribunal’s decision, but the Philippines could
either resort to diplomatic ways (bilateral or multilateral negotiations within the
framework of international organizations) or have recourse to further
arbitration under UNCLOS. Moreover, other states and non-state actors could
take further actions (i.e. economic sanctions) to put pressure on Beijing to
shift its behavior. But, beyond China’s non-compliance attitude, the award has
a value for the states bordering the South China Sea and the rest of the
international community for two reasons: (a) the tribunal’s ruling clarified the
respective rights and obligations of both China and the Philippines in the
South China Sea, thereby facilitating their further relations, and (b) the
Tribunal’s findings might have an impact on policy considerations and
decision-making of other states as it clarified important legal issues in
UNCLOS.

To sum up, it is too early to tell to what extent the tribunal’s decision will
actually play a role at both regional and international levels. Nonetheless,
what we do know is that, at the moment, things are moderately quiet in the
South China Sea comparing to two years ago. Whether this situation could be
linked to the tribunal’s ruling is open for discussion. In the meanwhile, it is
hard to believe, for instance, that countries such as Japan with Okinotorishima
or the United States with Johnson’s Island will withdraw their claims over
 features that they assert to be fully entitled islands and not mere rocks. In
addition, Vietnam continues its land reclamation and construction of two large
hangars on Spratly Island in response to China’s construction of military
facilities in the Spratlys. Thus, while the tribunal’s intention appeared to be
that of making a path forward to solve the problem between China and the
Philippines, the long-term effects of its award are still to be seen in the
incoming years.

William C. Raegan, etc, petitioner vs. Commissioner of Internal Revenue, respondent

G.R.No. L-26379 , Dec, 27, 1969

Facts:
Petitioner William C. Reagan, at one time a civilian employee of an American corporation
providing technical assistance to the United States Air Force in the Philippines. He would
dispute the payment of the income tax assessed on him by respondent Commissioner of
Internal Revenue on an amount realized by him on a sale of his automobile to a member of the
United States Marine Corps, the transaction having taken place at the Clark Field Air Base at
Pampanga. It is his contention, seriously and earnestly expressed, that in legal contemplation
the sale was made outside Philippine territory and therefore beyond our jurisdictional power to
tax. that the trading firm as purchaser of army goods must respond for the sales taxes due from
an importer, as the American armed forces being exempt could not be taxed as such under the
National Internal Revenue Code.

Issue:
Whether the Clark Field Air Base is a foreign property therefore excluded from the power of
Philippine taxation.

Ruling:

No, Clark Field Air Base is not a foreign property therefore petitioner is not excluded from the
power of Philippine taxation. in People v. Acierto states that "By the [Military Bases] Agreement,
it should be noted, the Philippine Government merely consents that the United States exercise
jurisdiction in certain cases. The consent was given purely as a matter of comity, courtesy, or
expediency over the bases as part of the Philippine territory or divested itself completely of
jurisdiction over offenses committed therein. The areas covered by the United States Military
Bases are not foreign territories both in the political and geographical sense and "All
exceptions, therefore, to the full and complete power of a nation within its own territories, must
be traced up to the consent of the nation itself. They can flow from no other legitimate source.
Therefore, the decision of the Court of Tax Appeals of May 12, 1966 denying the refund of
P2,979.00 as the income tax paid by petitioner is affirmed. With costs against petitioner.