November 11, 2023

PREAMBLE, 1987 Constitution

• 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 I

NATIONAL TERRITORY

The national territory comprises the Philippine archipelago, with all the islands and waters embraced
therein, and all other territories over which the Philippines has sovereignty or jurisdiction, consisting of
its terrestrial, fluvial and aerial domains, including its territorial sea, the seabed, the subsoil, the insular
shelves, and other submarine areas. The waters around, between, and connecting the islands of the
archipelago, regardless of their breadth and dimensions, form part of the internal waters of the
Philippines.

ARTICLE II

Article II

DECLARATION OF PRINCIPLES AND STATE POLICIES

PRINCIPLES

Section 1. The Philippines is a democratic and republican State. Sovereignty resides in the people and
all government authority emanates from them.

Section 2. The Philippines renounces war as an instrument of national policy, adopts the generally
accepted principles of international law as part of the law of the land and adheres to the policy of peace,
equality, justice, freedom, cooperation, and amity with all nations.

Section 3. Civilian authority is, at all times, supreme over the military. The Armed Forces of the
Philippines is the protector of the people and the State. Its goal is to secure the sovereignty of the State
and the integrity of the national territory.

Section 4. The prime duty of the Government is to serve and protect the people. The Government may
call upon the people to defend the State and, in the fulfillment thereof, all citizens may be required,
under conditions provided by law, to render personal, military or civil service.

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

Section 6. The separation of Church and State shall be inviolable.

STATE POLICIES

Section 7. The State shall pursue an independent foreign policy. In its relations with other states, the
paramount consideration shall be national sovereignty, territorial integrity, national interest, and the
right to self-determination.

Section 8. The Philippines, consistent with the national interest, adopts and pursues a policy of freedom
from nuclear weapons in its territory.
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 services, 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 12. The State recognizes the sanctity of family life and shall protect and strengthen the family
as a basic autonomous social institution. It shall equally protect the life of the mother and the life of
the unborn from conception. The natural and primary right and duty of parents in the rearing of the
youth for civic efficiency and the development of moral character shall receive the support of the
Government.

Section 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. It shall inculcate in the youth
patriotism and nationalism, and encourage their involvement in public and civic affairs.

Section 14. The State recognizes the role of women in nation-building, and shall ensure the
fundamental equality before the law of women and men.

Section 15. The State shall protect and promote the right to health of the people and instill health
consciousness among them.

Section 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.

Section 17. The State shall give priority to education, science and technology, arts, culture, and sports
to foster patriotism and nationalism, accelerate social progress, and promote total human liberation
and development.

Section 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.

Section 19. The State shall develop a self-reliant and independent national economy effectively
controlled by Filipinos.

Section 20. The State recognizes the indispensable role of the private sector, encourages private
enterprise, and provides incentives to needed investments.

Section 21. The State shall promote comprehensive rural development and agrarian reform.

Section 22. The State recognizes and promotes the rights of indigenous cultural communities within
the framework of national unity and development.

Section 23. The State shall encourage non-governmental, community-based, or sectoral organizations
that promote the welfare of the nation.

Section 24. The State recognizes the vital role of communication and information in nation-building.

Section 25. The State shall ensure the autonomy of local governments.

Section 26. The State shall guarantee equal access to opportunities for public service, and prohibit
political dynasties as may be defined by law.

Section 27. The State shall maintain honesty and integrity in the public service and take positive and
effective measures against graft and corruption.

Section 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.
 G.R. No. 146710-15
Estrada vs. Arroyo
JOSEPH E. ESTRADA vs. ANIANO DESIERTO, in his capacity as Ombudsman, RAMON GONZALES,
VOLUNTEERS AGAINST CRIME AND CORRUPTION, GRAFT FREE PHILIPPINES FOUNDATION, INC.,
LEONARD DE VERA, DENNIS FUNA, ROMEO CAPULONG and ERNESTO B. FRANCISCO, JR.
G.R. No. 146710-15
March 2, 2001

FACTS: On October 4, 2000, then President Joseph Estrada was embroiled in a corruption
scandal after a close friend, Ilocos Sur Governor Luis Chavit Singson, revealed that Estrada and
his family allegedly received money from Jueteng lords.

The revelation prompted Senator Teofisto Guingona to deliver a privilege speech, detailing the
anomalies done by President Estrada. The public now calls for Estrada’s resignation. Eventually,
he had to face an impeachment trial in the Senate by December 7.

On January 16, 2001, in a vote of 11-10, the Senator-Judges ruled against opening the second
envelope which allegedly contains evidence wherein Estrada held P3.3 billion in a secret bank
account under the name “Jose Velarde.”
At this point, everyone snapped. The prosecutors tendered their resignation – prompting the
Senate to postpone the impeachment proceedings indefinitely. People started marching
towards EDSA to call for Estrada’s resignation. On January 19, both the AFP and PNP declared
that they are withdrawing their support of the Estrada administration.

On January 20, (12 noon), Chief Justice Davide administered Vice President Gloria Macapagal
Arroyo’s oath as the new President of the Republic of the Philippines. At around 2:30 PM,
Estrada and his family hurriedly left Malacanang. Estrada then issued the following statement:

“At twelve o’clock noon today, Vice President Gloria Macapagal-Arroyo took her oath as
President of the Republic of the Philippines. While along with many other legal minds of our
country, I have strong and serious doubts about the legality and constitutionality of her
proclamation as President, I do not wish to be a factor that will prevent the restoration of unity
and order in our civil society.

It is for this reason that I now leave Malacañang Palace, the seat of the presidency of this
country, for the sake of peace and in order to begin the healing process of our nation. I leave the
Palace of our people with gratitude for the opportunities given to me for service to our people. I
will not shirk from any future challenges that may come ahead in the same service of our country.

I call on all my supporters and followers to join me in to promotion of a constructive national

spirit of reconciliation and solidarity. May the Almighty bless our country and beloved people.

MABUHAY! (Sgd.) JOSEPH EJERCITO ESTRADA”

It also appears that on the same day, January 20, 2001, he signed the following letter (sent to
House Speaker Fuentebella and Senate President Pimentel):

“Sir: By virtue of the provisions of Section 11, Article VII of the Constitution, I am hereby
transmitting this declaration that I am unable to exercise the powers and duties of my office. By
operation of law and the Constitution, the Vice-President shall be the Acting President. (Sgd.)
JOSEPH EJERCITO ESTRADA”
On January 22, now President Arroyo started discharging her functions as President. She
appointed new cabinet members, ambassadors and special envoys. Foreign state leaders also
expressed their recognition to Arroyo’s administration (including then President George Bush
from the White House). Congress issued House Resolution 175 to express support to the new
admin. The court also issued the following Resolution in Administrative Matter No. 01-1-05-SC,
to wit:

“A.M. No. 01-1-05-SC — In re: Request of Vice President Gloria Macapagal-Arroyo to Take her
Oath of Office as President of the Republic of the Philippines before the Chief Justice — Acting
on the urgent request of Vice President Gloria Macapagal-Arroyo to be sworn in as President of
the Republic of the Philippines, addressed to the Chief Justice and confirmed by a letter to the
Court, dated January 20, 2001, which request was treated as an administrative matter, the court
Resolve unanimously to confirm the authority given by the twelve (12) members of the Court
then present to the Chief Justice on January 20, 2001 to administer the oath of office of Vice
President Gloria Macapagal-Arroyo as President of the Philippines, at noon of January 20, 2001.

This resolution is without prejudice to the disposition of any justiciable case that may be filed by
a proper party.”
The Senate then passed Resolution No. 83 which officially moved to terminate the impeachment
proceeding. Senator Miriam Defensor-Santiago stated “for the record” that she voted against
the closure of the impeachment court on the grounds that the Senate had failed to decide on
the impeachment case and that the resolution left open the question of whether Estrada was
still qualified to run for another elective post.

Estrada on the other hand is now facing charges of plunder, graft, and corruption under the
office of the Ombudsman. He then filed a writ of preliminary injunction to enjoin the
Ombudsman from “conducting any further proceedings in or any other criminal complaint that
may be filed in his office, until after the term of petitioner as President is over.

Thru another counsel, Estrada filed for Quo Warranto. He prayed for judgment to confirm him
as the lawful and incumbent President of the Republic of the Philippines temporarily unable to
discharge the duties of his office, and declaring respondent (Arroyo) to have taken her oath as
and to be holding the Office of the President, only in an acting capacity.

ISSUES:
1. WON Estrada officially resigned as a president.
2. WON Estrada is only temporarily unable to act as president.
3. WON the prosecution of Estrada should be enjoined due to prejudicial publicity.
HELD:
(1) YES. – please also read Section 8, Article VII of the Constitution

We hold that the resignation of the petitioner cannot be doubted. It was confirmed by his
leaving Malacañang. In the press release containing his final statement: (1) he acknowledged
the oath-taking of the respondent as President of the Republic albeit with reservation about its
legality; (2) he emphasized he was leaving the Palace, the seat of the presidency, for the sake of
peace and in order to begin the healing process of our nation.

He also called on his supporters to join him in the promotion of a constructive national spirit of
reconciliation and solidarity. Certainly, the national spirit of reconciliation and solidarity could
not be attained if he did not give up the presidency. The press release was petitioner’s
valedictory, his final act of farewell.

As to the second letter (addressed to Fuentebella and Pimentel), the court held that it is
wrapped in mystery since Estrada did not reveal the circumstances that led to its preparation.
It was all too easy for him to tell the Filipino people in his press release that he was temporarily
unable to govern and that he was leaving the reins of government to respondent Arroyo for the
time bearing.

Under any circumstance, however, the mysterious letter cannot negate the resignation of
Estrada. If it was prepared before the press release as a later act. If, however, it was prepared
after the press release, still, it commands scant legal significance. Estrada’s resignation from the
presidency cannot be the subject of a changing caprice nor of a whimsical will especially if the
resignation is the result of his reputation by the people.

Petitioner contends that the impeachment proceeding is an administrative investigation that,

under section 12 of RA 3019, bars him from resigning. The court held otherwise. The exact
nature of an impeachment proceeding is debatable.

Even assuming arguendo that it is an administrative proceeding, it can not be considered

pending at the time Estrada resigned because the process already broke down when a majority
of the senator-judges voted against the opening of the second envelope, the public and private
prosecutors walked out, the public prosecutors filed their Manifestation of Withdrawal of
Appearance, and the proceedings were postponed indefinitely. There was, in effect, no
impeachment case pending against Estrada when he resigned.

(2) NO – please read section 11, Article VII of the Constitution.

By virtue of the said letter, Estrada has officially resigned and has in effect, relinquished his
powers as president.

Even if the petitioner can prove that he did not resign, still, he cannot successfully claim that he
is a President on leave on the ground that he is merely unable to govern temporarily. That claim
has been laid to rest by Congress and the decision that respondent Arroyo is the de jure,
president made by a co-equal branch of government cannot be reviewed by this Court.

(3) NO

Estrada also contends that respondent Ombudsman should be stopped from conducting the
investigation of the cases filed against him due to the barrage of prejudicial publicity on his guilt.
He submits that the respondent Ombudsman has developed bias and is all set file the criminal
cases violation of his right to due process.

The court held that to warrant a finding of prejudicial publicity, there must be allegation and
proof that the judges have been unduly influenced, not simply that they might be, by the barrage
of publicity.

There is not enough evidence to warrant this Court to enjoin the preliminary investigation of
the petitioner by the respondent Ombudsman. Petitioner needs to offer more than hostile
headlines to discharge his burden of proof.

The accuracy of the news reports referred to by the petitioner cannot be the subject of judicial
notice by this Court especially in light of the denials of the respondent Ombudsman as to his
alleged prejudice and the presumption of good faith and regularity in the performance of official
duty to which he is entitled.

PETITION IS DISMISSED.

***Renouncing War & Doctrine of Incorporation and Transformation (Sec.2, Art II; Sec 21,
Art.VII)
• Art. 2 Section 2. The Philippines renounces war as an instrument of national policy, adopts the generally
accepted principles of international law as part of the law of the land and adheres to the policy of peace,
equality, justice, freedom, cooperation, and amity with all nations.
• Art. VII Section 21. No treaty or international agreement shall be valid and effective unless concurred in
by at least two-thirds of all the Members of the Senate.

G.R. No. L-7995

Inchong vs. Hernandez

Facts: Petitioner, for and in his own behalf and on behalf of other alien residents, corporations
and partnerships adversely affected by the provisions of Republic Act No. 1180, brought this
action to obtain a judicial declaration that said Act is unconstitutional, and to enjoin the
Secretary of Finance and all other persons acting under him, particularly city and municipal
treasurers, from enforcing its provisions. Petitioner attacks the constitutionality of the Act,
contending among others that: it denies to alien residents the equal protection of the laws and
deprives them of their liberty and property without due process of law; it violates international
and treaty obligations of the Republic of the Philippines; and its provisions against the
transmission by aliens of their retail business thru hereditary succession, and those requiring
100% Filipino capitalization for a corporation or entity to entitle it to engage in the retail
business, violate the spirit of Sections 1 and 5, Article XIII and Section 8 of Article XIV of the
Constitution.

Republic Act No. 1180 is entitled “An Act to Regulate the Retail Business.” In effect it nationalizes
the retail trade business. The main provisions of the Act are: (1) a prohibition against persons,
not citizens of the Philippines, and against associations, partnerships, or corporations the capital
of which are not wholly owned by citizens of the Philippines, from engaging directly or indirectly
in the retail trade; (2) an exception from the above prohibition in favor of aliens actually engaged
in said business on May 15, 1954, who are allowed to continue to engage therein, unless their
licenses are forfeited in accordance with the law, until their death or voluntary retirement in
case of natural persons, and for ten years after the approval of the Act or until the expiration of
term in case of juridical persons; (3) an exception therefrom in favor of citizens and juridical
entities of the United States; (4) a provision for the forfeiture of licenses (to engage in the retail
business) for violation of the laws on nationalization, economic control weights and measures
and labor and other laws relating to trade, commerce and industry; (5) a prohibition against the
establishment or opening by aliens actually engaged in the retail business of additional stores
or branches of retail business, (6) a provision requiring aliens actually engaged in the retail
business to present for registration with the proper authorities a verified statement concerning
their businesses, giving, among other matters, the nature of the business, their assets and
liabilities and their offices and principal offices of juridical entities; and (7) a provision allowing
the heirs of aliens now engaged in the retail business who die, to continue such business for a
period of six months for purposes of liquidation.
Held: The Court held that the Act was approved in the exercise of the police power. It has been
said that police power is so far-reaching in scope, that it has become almost impossible to limit
its sweep. As it derives its existence from the very existence of the State itself, it does not need
to be expressed or defined in its scope; it is said to be co- extensive with self-protection and
survival, and as such it is the most positive and active of all governmental processes, the most
essential, insistent and illimitable. Especially is it so under a modern democratic framework
where the demands of society and of nations have multiplied to almost unimaginable
proportions; the field and scope of police power has become almost boundless, just as the fields
of public interest and public welfare have become almost all- embracing and have transcended
human foresight. Otherwise stated, as we cannot foresee the needs and demands of public
interest and welfare in this constantly changing and progressive world, so we cannot delimit
beforehand the extent or scope of police power by which and through which the State seeks to
attain or achieve public interest or welfare. So it is that Constitutions do not define the scope or
extent of the police power of the State; what they do is to set forth the limitations thereof. The
most important of these are the due process clause and the equal protection clause.

The equal protection of the law clause is against undue favor and individual or class privilege, as
well as hostile discrimination or the oppression of inequality. It is not intended to prohibit
legislation, which is limited either in the object to which it is directed or by territory within which
it is to operate. It does not demand absolute equality among residents; it merely requires that
all persons shall be treated alike, under like circumstances and conditions both as to privileges
conferred and liabilities enforced. 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 exists for making a distinction between those who
fall within such class and those who do not.

The due process clause has to do with the reasonableness of legislation enacted in pursuance
of the police power, Is there public interest, a public purpose; is public welfare involved? Is the
Act reasonably necessary for the accomplishment of the legislature’s purpose; is it not
unreasonable, arbitrary or oppressive? Is there sufficient foundation or reason in connection
with the matter involved; or has there not been a capricious use of the legislative power? Can
the aims conceived be achieved by the means used, or is it not merely an unjustified
interference with private interest? These are the questions that we ask when the due process
test is applied.

The conflict, therefore, between police power and the guarantees of due process and equal
protection of the laws is more apparent than real. Properly related, the power and the
guarantees are supposed to coexist. The balancing is the essence or, shall it be said, the
indispensable means for the attainment of legitimate aspirations of any democratic society.
There can be no absolute power, whoever exercise it, for that would be tyranny. Yet there can
neither be absolute liberty, for that would mean license and anarchy. So the State can deprive
persons of life, liberty and property, provided there is due process of law; and persons may be
classified into classes and groups, provided everyone is given the equal protection of the law.
The test or standard, as always, is reason. The police power legislation must be firmly grounded
on public interest and welfare, and a reasonable relation must exist between purposes and
means. And if distinction and classification has been made, there must be a reasonable basis for
said distinction.

The disputed law was enacted to remedy a real actual threat and danger to national economy
posed by alien dominance and control of the retail business and free citizens and country from
such dominance and control; that the enactment clearly falls within the scope of the police
power of the State, thru which and by which it protects its own personality and insures its
security and future; that the law does not violate the equal protection clause of the Constitution
because sufficient grounds exist for the distinction between alien and citizen in the exercise of
the occupation regulated, nor the due process of law clause, because the law is prospective in
operation and recognizes the privilege of aliens already engaged in the occupation and
reasonably protects their privilege; that the wisdom and efficacy of the law to carry out its
objectives appear to us to be plainly evident — as a matter of fact it seems not only appropriate
but actually necessary — and that in any case such matter falls within the prerogative of the
Legislature, with whose power and discretion the Judicial department of the Government may
not interfere; that the provisions of the law are clearly embraced in the title, and this suffers
from no duplicity and has not misled the legislators or the segment of the population affected;
and that it cannot be said to be void for supposed conflict with treaty obligations because no
treaty has actually been entered into on the subject and the police power may not be curtailed
or surrendered by any treaty or any other conventional agreement. The Treaty of Amity
between the Republic of the Philippines and the Republic of China of April 18, 1947 is also
claimed to be violated by the law in question. All that the treaty guarantees is equality of
treatment to the Chinese nationals “upon the same terms as the nationals of any other country.”
But the nationals of China are not discriminated against because nationals of all other countries,
except those of the United States, who are granted special rights by the Constitution, are all
prohibited from engaging in the retail trade. But even supposing that the law infringes upon the
said treaty, the treaty is always subject to qualification or amendment by a subsequent law ,
and the same may never curtail or restrict the scope of the police power of the State.

*** CIVILIAN SUPREMACY / ART. 2 SEC.5

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

*** SEPARATION OF CHURCH and STATE / ART. 2 SEC. 6

Section 6. The separation of Church and State shall be inviolable.

G.R. No. L-45459

Aglipay vs. Ruiz

FACTS:

The government had authorized a special stamp issue on the occasion of the observance in
Manila of the 33rd International Eucharistic Congress under the sponsorship of the Catholic
Church. The petitioner, as head of the Philippine Independent Church, assailed the measure,
contending that it violated the Constitution because it benefited a particular religion; thus he
sought to prohibit the issuance and selling of the stamps commemorative of the event.

ISSUE:

Whether or not the authorized stamp issue be declared invalid for violating the principle of
separation of Church and State.

RULING:

No.

The Supreme Court, on examining the background facts, discovered that although the original
design of the stamp featured a Catholic chalice, this was later rejected in favor a map of the
Philippines under which appeared the caption, “”Seat XXXIII International Eucharistic Congress,
Feb. 3-7,1937.” What was emphasized, therefore, is not the Eucharistic Congress itself but
Manila, as the seat of that congress. The issuance of the postage stamps in question was not
inspired by any sectarian denomination. The only purpose was “to advertise the Philippines and
attract more tourist to this country.” The stamps were not issue and sold for the benefit of the
Roman Catholic Church. Nor were money derived from the sale of the stamps given to that
church. The officials concerned merely took advantage of an event considered of international
importance “to give publicity to the Philippines and its people”.

While it is obvious that the issuance and sale of the stamps in question may be said to be
inseparably linked with an event of a religious character, the resulting propaganda, if any,
received by the Roman Catholic Church, was not the aim and purpose of the Government. The
Government should not be embarrassed in its activities simply because of incidental results,
more or less religious in character, if the purpose had in view is one which could legitimately be
undertaken by appropriate legislation. The main purpose should not be frustrated by its
subordinate to mere incidental results not contemplated.

Therefore, the stamp issue was held to be not invalid.

Facts:
The Director of Post announced that he would order the issues of postage stamps commemorating the
celebration of City of Manila of the 33rd International Eucharistic Congress organized by the Roman Catholic
Church pursuant to Act No. 4052 for the purpose of appropriating funds for the making of new postage
stamps. Aglipay requested Atty. Vicente Sotto to denounce the matter to the President. It was alleged that
Ruiz is in direct violation of the Constitution by issuing and selling postage stamps commemorative of the
33rd International Eucharistic Congress. That such act was violative of Art. VI, Sec. 23 (3) of the Philippines,
to wit:
No public money or property shall ever be appropriated, applied, or used, directly or indirectly, for the use,
benefit, or support of any sect, church, denomination, secretarian, institution, or system of religion, or for
the use, benefit, or support of any priest, preacher, minister, or other religious teacher or dignitary as such,
except when such priest, preacher, minister, or dignitary is assigned to the armed forces or to any penal
institution, orphanage, or leprosarium.
The prohibition herein expressed is a direct corollary of the principle of separation of church and state.
Issue:
Is the production and selling of the International Eucharistic Congress commemorative stamps violation of
the separation of Church and State and Art. VI, Sec. 23 (3)?

Ruling:
No, we are much impressed with the vehement appeal of counsel for the petitioner to maintain inviolate the
complete separation of church and state and curb any attempt to infringe by indirection a constitutional
inhibition. Indeed, in the Philippines, once the scene of religious intolerance and prescription, care should
be taken that at this stage of our political development nothing is done by the Government or its officials
that may lead to the belief that the Government is taking sides or favoring a particular religious sect or
institution. But, upon very serious reflection, examination of Act No. 4052, and scrutiny of the attending
circumstances, we have come to the conclusion that there has been no constitutional infraction in the case
at bar, Act No. 4052 grants the Director of Posts, with the approval of the Secretary of Public Works and
Communications, discretion to misuse postage stamps with new designs "as often as may be deemed
advantageous to the Government.”

Act No. 4052 contemplates no religious purpose. What it gives is the discretionary powers to determine
when the issuance of special postage stamps would be advantageous to the government.

G.R. No. 223395

Peralta vs. PhilPost
FACTS: On May 10, 2014, respondent Philippine Postal Corporation (PhilPost) issued a stamp
commemorating Iglesia ni Cristo's (INC's) Centennial Celebration. The design of the stamp
showed a photo of INC founder, the late Felix Y. Manalo (Manalo) with the designation on the
left side containing the words "Felix Y. Manalo, 1886-1963 First Executive Minister of Iglesia ni
Cristo," with the Central Temple of the religious group at the background. At the right side of
Manalo's photo is the INC's centennial logo which contained a torch enclosed by a two
concentric circles containing the words "IGLESIA NI CRISTO CENTENNIAL 1914-2014." On June
16, 2014, petitioner Renato V. Peralta (petitioner) filed a complaint for injunction with the
Regional Trial Court (RTC), Br. 33 of Manila, assailing the constitutionality of the printing,
issuance and distribution of the INC commemorative centennial stamps, allegedly paid for by
respondent PhilPost using public funds. Respondents maintained that no public funds were
disbursed in the printing of the INC commemorative stamps. They alleged that there was a
Memorandum of Agreement (MOA) dated May 7, 2014 executed between PhilPost and INC,
where it was provided that the costs of printing will be borne by INC. On July 25, 2014, the RTC
issued an Order, denying petitioner's application for the issuance of a preliminary injunction and
dismissing the action. It ruled that it was not a taxpayer's suit and that it did not violate Section
29 (2), Article VI of the 1987 Philippine Constitution. Petitioner appealed the RTC's decision with
the CA, but the same was denied in its July 24, 2015 decision. The CA ruled that although the
action is considered as a taxpayer's suit, the printing and issuance of the commemorative stamp
did not violate the Constitution.

ISSUES:
Whether the printing, issuance and distribution of the INC commemorative centennial stamps
by the Philpost is unconstitutional.

RULING:
No, the Court refused to declare unconstitutional the INC's commemorative stamp, it merely
applied jurisprudentially sanctioned policy of benevolent neutrality. The Court found no reason
or basis to grant the petition. The Court also emphasized that the Constitution establishes
separation of the Church and the State, and not separation of religion and state. The petition
was denied and the decision of the Court of Appeals affirmed. The Court agreed to Philpost’s
view that the printing and issuance of the assailed commemorative stamps were not inspired by
any sectarian denomination. The stamps were neither for the benefit of INC, nor money derived
from their sale inured to its benefit. The stamps delivered to INC were not free of charge and
whatever income derived from the sale to INC and of the excess to the postal clients were not
given to INC, but went to the coffers of PhilPost.

Case No. 172 The printing of the INC commemorative stamp is no different. It is simply an
acknowledgment of INC's existence for a hundred years. It does not necessarily equate to the
State sponsoring the INC. As to the use of the government's machinery in printing and
distribution of the 1.2 million stamps, this Court did not find that the same amounted to
sponsorship of INC as a religion considering that the same is no different from other stamps
issued by PhilPost acknowledging persons and events of significance to the country, such as
those printed celebrating National Artists, past Philippine Presidents, and events of
organizations, religious or not. The Court noted that PhilPost had also issued stamps for the
Catholic Church such as those featuring Heritage Churches, 15th International Eucharistic
Congress, and Pope Francis. In the past, the Bureau of Posts also printed stamps celebrating 300
years of Islam in the 1980s. Likewise, records did not disclose that PhilPost has exclusively or
primarily used its resources to benefit INC, to the prejudice of other religions. Finally, other than
this single transaction with INC, the Court did not find PhilPost to have been unnecessarily
involved in INC's affairs. Hence, the Court is not convinced that PhilPost has actually used its
resources to endorse, nor encourage Filipinos to join INC or observe the latter's doctrines. On
the contrary, this Court agreed with respondents that the printing of the INC commemorative
stamp was endeavored merely as part of PhilPost's ordinary business. In the same vein, The
Court did not find that there was illegal disbursement of funds under Section 29 (2) of Article VI
of the Constitution. Section 29 (2), Article VI of the 1987 Constitution provides, "No public money
or property shall be appropriated, applied, paid, or employed, directly or indirectly, for the use,
benefit, or support of any sect, church, denomination, sectarian institution, or system of religion,
or of any priest, preacher, minister, or other religious teacher, or dignitary as such, except when
such priest, preacher, minister, or dignitary is assigned to the armed forces, or to any penal
institution, or government orphanage or leprosarium." The word "apply" means "to use or
employ for a particular purpose." "Appropriate" means "to prescribe a particular use for
particular moneys or to designate or destine a fund or property for a distinct use, or for the
payment of a particular demand." The words "pay" and "employ" should be understood to mean
that what is prohibited is the use of public money or property for the sole purpose of benefiting
or supporting any church. The prohibition contemplates a scenario where the appropriation is
primarily intended for the furtherance of a particular church. It has also been held that the
aforecited constitutional provision “does not inhibit the use of public property for religious
purposes when the religious character of such use is merely incidental to a temporary use which
is available indiscriminately to the public in general.” Hence, a public street may be used for a
religious procession even as it is available for a civic parade, in the same way that a public plaza
is not barred to a religious rally if it may also be used for a political assemblage. In relation
thereto, the phrase "directly or indirectly" refers to the manner of appropriation of public money
or property, not as to whether a particular act involves a direct or a mere incidental benefit to
any church. Otherwise, the framers of the Constitution would have placed it before "use, benefit
or support" to describe the same. Even the exception to the same provision bolsters this
interpretation. The exception contemplates a situation wherein public funds are paid to a priest,
preacher, minister, or other religious teacher, or dignitary because they rendered service in the
armed forces, or to any penal institution, or government orphanage or leprosarium. That a priest
belongs to a particular church and the latter may have benefited from the money he received is
of no moment, for the purpose of the payment of public funds is merely to compensate the
priest for services rendered and for which other persons, who will perform the same services
will also be compensated in the same manner. Ut magis valeat quam pereat. The Constitution is
to be interpreted as a whole. As such, the foregoing interpretation finds support in the
Establishment Clause, which is as clear as daylight in stating that what is proscribed is the
passage of any law which tends to establish a religion, not merely to accommodate the free
exercise thereof.

Case No. 172 ADDITIONAL INFORMATION Legal Standing of a taxpayer: A taxpayer is allowed to
sue where there is a claim that public funds are illegally disbursed, or that the public money is
being deflected to any improper purpose, or that there is wastage of public funds through the
enforcement of an invalid or unconstitutional law. A person suing as a taxpayer, however, must
show that the act complained of directly involves the illegal disbursement of public funds derived
from taxation. He must also prove that he has sufficient interest in preventing the illegal
expenditure of money raised by taxation and that he will sustain a direct injury because of the
enforcement of the questioned statute or contract. The 1987 Constitution expressly provides for
the policy of separation of the Church and the State ARTICLE II DECLARATION OF PRINCIPLES
AND STATE POLICIES PRINCIPLES Section 6. The separation of Church and State shall be
inviolable. — ARTICLE III BILL OF RIGHTS – NON–ESTABLISHMENT CLAUSE Section 5. No law shall
be made respecting an establishment of religion, or prohibiting the free exercise thereof. The
free exercise and enjoyment of religious profession and worship, without discrimination or
preference, shall forever be allowed. No religious test shall be required for the exercise of civil
or political rights. ARTICLE VI THE LEGISLATIVE DEPARTMENT Section 29. (2) No public money or
property shall be appropriated, applied, paid, or employed, directly or indirectly, for the use,
benefit, or support of any sect, church, denomination, sectarian institution, or system of religion,
or of any priest, preacher, minister, other religious teacher, or dignitary as such, except when
such priest, preacher, minister, or dignitary is assigned to the armed forces, or to any penal
institution, or government orphanage or leprosarium.

***DUTY OF THE GOVERNMENT; PEOPLE TO DEFEND THE STATE / ART.2 SEC.4

Art.2 Section 4. The prime duty of the Government is to serve and protect the people. The
Government may call upon the people to defend the State and, in the fulfillment thereof, all
citizens may be required, under conditions provided by law, to render personal, military or civil
service.

***EQUALITY OF MEN AND WOMEN / ART.2 SEC. 14

Art. 2 Section 14. The State recognizes the role of women in nation-building, and shall ensure
the fundamental equality before the law of women and men.

***PROTECTION TO LABOR / ART. 2 SEC. 18

Art. 2 Section 18. The State affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare.

***HONEST PUBLIC SERVICE AND FULL PUBLIC DISCLOSURE / ART. 2 SEC. 27

Art. 2 Section 27. The State shall maintain honesty and integrity in the public service and take
positive and effective measures against graft and corruption.

***AUTONOMY OF LOCAL GOVERNMENTS / ART. 2 SEC. 25

Art. 2 Section 25. The State shall ensure the autonomy of local governments.

***PROMOTION OF HEALTH AND ECOLOGY / ART. 2 SEC. 15

Art. 2 Section 15. The State shall protect and promote the right to health of the people and instill
health consciousness among them.

G.R. No. 105087

Oposa vs. Factoran

***DOCTRINE OF SEPARATION OF POWERS

• Separation of powers, therefore, refers to the division of government responsibilities into
distinct branches to limit any one branch from exercising the core functions of another.
The intent is to prevent the concentration of power and provide for checks and balances.
• One basic corollary in a presidential system of government is the principle of separation
of powers wherein legislation belongs to Congress, execution to the Executive, and
settlement of legal controversies to the Judiciary.
 G.R. No. 102781
Maceda vs Vasquez
Facts:
Petitioner Bonifacio Sanz Maceda, Presiding Judge of Branch 12 of the Regional Trial Court of Antique,
seeks the review of the following orders of the Office of the Ombudsman
Allegations against the petitioner Maceda ... respondent Napoleon A. Abiera of the Public Attorney's
Office alleged that petitioner had falsified his Certificate of Service... by certifying "that all civil and criminal
cases which have been submitted for decision or determination for a period of 90 days have been
determined and decided... when in truth and in fact, petitioner knew that no decision had... been rendered
in five (5) civil and ten (10) criminal cases that have been submitted for decision. Respondent Abiera
further alleged that petitioner similarly falsified his certificates of service for... a total of seventeen (17)
months.
Petitioner's contentions

On the other hand, petitioner contends that he had been granted bythis Court an extension of ninety (90)
days to decide the aforementioned cases.
Petitioner also contends that the Ombudsman has no jurisdiction over said case... since the offense
charged arose from the judge's... performance of his official duties, which is under the control and
supervision of the Supreme Court. Furthermore, the investigation of the Ombudsman constitutes an
encroachment into the Supreme Court's constitutional duty of supervision over all inferior courts.
Issues:
(1)... whether the Office of the Ombudsman could entertain a criminal complaint for the alleged
falsification of a judge's certification submitted to the
Supreme Court
(2)... assuming that it can, whether a referral should be made first to the Supreme Court.

Ruling:
The Court disagrees with the first part of petitioner's basic argument.
A judge who falsifies his certificate of service is... administratively liable to the Supreme Court for serious
misconduct and inefficiency under Section 1, Rule 140 of the Rules of Court, and criminally liable to the
State under the Revised Penal Code for his felonious act.
However, We agree with petitioner that in the absence of any administrative action taken against him by
this Court with regard to his certificates of service, the investigation being conducted by the Ombudsman
encroaches into the court's power of administrative... supervision over all courts and its personnel, in
violation of the doctrine of separation of powers.
Article VIII, section 6 of the 1987 Constitution exclusively vests in the Supreme Court administrative
supervision over all courts and court personnel, from the Presiding Justice of the Court of Appeals down to
the lowest municipal trial court clerk. By virtue of this power,... it is only the Supreme Court that can
oversee the judges' and court personnel's compliance with all laws, and take the proper administrative
action against them if they commit any violation thereof. No other branch of government may intrude into
this power, without running afoul... of the doctrine of separation of powers.
The Ombudsman cannot justify its investigation of petitioner on the powers granted to it by the
Constitution,... likewise undermines the independence of the judiciary.
In fine, where a criminal complaint against a judge or other court employee arises from their administrative
duties, the Ombudsman must defer action on said complaint and refer the same to this Court for
determination whether said judge or court employee had... acted within the scope of their administrative
duties.
WHEREFORE, the instant petition is hereby GRANTED. The Ombudsman is hereby directed to dismiss the
complaint filed bypublic respondent Atty. Napoleon A. Abiera and to refer the same to this Court for
appropriate action.

***FULL TEXT

1. REMEDIAL LAW; JURISDICTION; OFFICE OF THE OMBUDSMAN HAS JURISDICTION TO

INVESTIGATE OFFENSE COMMITTED BY JUDGE WHETHER OR NOT OFFENSE RELATES TO
OFFICIAL DUTIES; REASON. — Petitioner also contends that the Ombudsman has no jurisdiction
over said cases despite this Court's ruling in Orap vs. Sandiganbayan, since the offense charged
arose from the judge's performance of his official duties, which is under the control and
supervision of the Supreme Court . . . The Court disagrees with the first part of petitioner's basic
argument. There is nothing in the decision in Orap that would restrict it only to offenses
committed by a judge unrelated to his official duties. A judge who falsifies his certificate of
service is administratively liable to the Supreme Court for serious misconduct and inefficiency
under Section 1, Rule 140 of the Rules of Court, and criminally liable to the State under the
Revised Penal Code for his felonious act.

2. ID.; ID.; ID.; JURISDICTION TO INVESTIGATE OFFENSE RELATED TO OFFICIAL DUTIES SUBJECT
TO PRIOR ADMINISTRATIVE ACTION TAKEN AGAINST JUDGE BY SUPREME COURT; REASON. —
However, We agree with petitioner that in the absence of any administrative action taken
against him by this Court with regard to his certificates of service, the investigation being
conducted by the Ombudsman encroaches into the Court's power of administrative supervision
over all courts and its personnel, in violation of the doctrine of separation of powers.

3. ID.; ID.; ID.; ID.; PROCEDURE TO BE OBSERVED BY OMBUDSMAN REGARDING COMPLAINT

AGAINST JUDGE OR OTHER COURT EMPLOYEE; PURPOSE. — Thus, the Ombudsman should first
refer the matter of petitioner's certificates of service to this Court for determination of whether
said certificates reflected the true status of his pending case load, as the Court has the necessary
records to make such a determination . . . In fine, where a criminal complaint against a judge or
other court employee arises from their administrative duties, the Ombudsman must defer
action on said complaint and refer the same to this Court for determination whether said judge
or court employee had acted within the scope of their administrative duties.

4. ID.; ID.; ID.; ID.; OMBUDSMAN CANNOT SUBPOENA SUPREME COURT AND ITS PERSONNEL;
REASON. — The Ombudsman cannot compel this Court, as one of the three branches of
government, to submit its records, or to allow its personnel to testify on this matter, as
suggested by public respondent Abiera in his affidavit-complaint. The rationale for the foregoing
pronouncement is evident in this case. Administratively, the question before Us is this: should a
judge, having been granted by this Court an extension of time to decide cases before him, report
these cases in his certificate of service? As this question had not yet been raised with, much less
resolved by, this Court, how could the Ombudsman resolve the present criminal complaint that
requires the resolution of said question?

DECISION

NOCON, J p:

The issue in this petition for certiorari with prayer for preliminary mandatory injunction and/or
restraining order is whether the Office of the Ombudsman could entertain a criminal complaint
for the alleged falsification of a judge's certification submitted to the Supreme Court, and
assuming that it can, whether a referral should be made first to the Supreme Court.

Petitioner Bonifacio Sanz Maceda, Presiding Judge of Branch 12 of the Regional Trial Court of
Antique, seeks the review of the following orders of the Office of the Ombudsman: (1) the Order
dated September 18, 1991 denying the ex-parte motion to refer to the Supreme Court filed by
petitioner; and (2) the Order dated November 22, 1951 denying petitioner's motion for
reconsideration and directing petitioner to file his counter-affidavit and other controverting
evidences.

In his affidavit-complaint dated April 18, 1991 filed before the Office of the Ombudsman,
respondent Napoleon A. Abiera of the Public Attorney's Office alleged that petitioner had
falsified his Certificate of Service 1 dated February 6, 1989, by certifying "that all civil and
criminal cases which have been submitted for decision or determination for a period of 90 days
have been determined and decided on or before January 31, 1998," when in truth and in fact,
petitioner knew that no decision had been rendered in five (5) civil and ten (10) criminal cases
that have been submitted for decision. Respondent Abiera further alleged that petitioner
similarly falsified his certificates of service for the months of February, April, May, June, July and
August, all in 1989; and the months beginning January up to September 1990, or for a total of
seventeen (17) months.

On the other hand, petitioner contends that he had been granted by this Court an extension of
ninety (90) days to decide the aforementioned cases.

Petitioner also contends that the Ombudsman has no jurisdiction over said case despite this
Court's ruling in Orap vs. Sandiganbayan, 2 since the offense charged arose from the judge's
performance of his official duties, which is under the control and supervision of the Supreme
Court. Furthermore, the investigation of the Ombudsman constitutes an encroachment into the
Supreme Court's constitutional duty of supervision over all inferior courts.

The Court disagrees with the first Part of petitioner's basic argument. There is nothing in the
decision in Orap that would restrict it only to offenses committed by a judge unrelated to his
official duties. A judge who falsifies his certificate of service is administratively liable to the
Supreme Court for serious misconduct and inefficiency under Section 1, Rule 140 of the Rules
of Court, and criminally liable to the State under the Revised Penal Code for his felonious act.

However, We agree with petitioner that in the absence of any administrative action taken
against him by this Court with regard to his certificates of service, the investigation being
conducted by the Ombudsman encroaches into the Court's power of administrative supervision
over all courts and its personnel, in violation of the doctrine of separation of powers.

Article VIII, section 6 of the 1987 Constitution exclusively vests in the Supreme Court
administrative supervision over all courts and court personnel, from the Presiding Justice of the
Court of Appeals down to the lowest municipal trial court clerk. By virtue of this power, it is only
the Supreme Court that can oversee the judges' and court personnel's compliance with all laws,
and take the proper administrative action against them if they commit any violation thereof. No
other branch of government may intrude into this power, without running afoul of the doctrine
of separation of powers.

The Ombudsman cannot justify its investigation of petitioner on the powers granted to it by the
Constitution, 3 for such a justification not only runs counter to the specific mandate of the
Constitution granting supervisory powers to the Supreme Court over all courts and their
personnel, but likewise undermines the independence of the judiciary.

Thus, the Ombudsman should first refer the matter of petitioner's certificates of service to this
Court for determination of whether said certificates reflected the true status of his pending case
load, as the Court has the necessary records to make such a determination. The Ombudsman
cannot compel this Court, as one of the three branches of government, to submit its records, or
to allow its personnel to testify on this matter, as suggested by public respondent Abiera in his
affidavit-complaint. 4

The rationale for the foregoing pronouncement is evident in this case. Administratively. the
question before Us is this: should a judge, having been granted by this Court an extension of
time to decide cases before him, report these cases in his certificate of service? As this question
had not yet been raised with, much less resolved by, this Court. how could the Ombudsman
resolve the present criminal complaint that requires the resolution of said question?

In fine, where a criminal complaint against a Judge or other court employee arises from their
administrative duties, the Ombudsman must defer action on said complaint and refer the same
to this Court for determination whether said Judge or court employee had acted within the
scope of their administrative duties.
WHEREFORE, the instant petition is hereby GRANTED. The Ombudsman is hereby directed to
dismiss the complaint filed by public respondent Atty. Napoleon A. Abiera and to refer the same
to this Court for appropriate action.

SO ORDERED.

***POTESTAS DELEGATA NON POTEST DELEGARE

• Delegata potestas non potest delegari is a principle in constitutional and
administrative law that means in Latin that "no delegated powers can be
further delegated". Alternatively, it can be stated delegatus non potest
delegare ("one to whom power is delegated cannot himself further delegate
that power").

G.R. No. 144463

Jaworski vs PAGCOR
SENATOR ROBERT S. JAWORSKI, petitioner,
vs.
PHILIPPINE AMUSEMENT AND GAMING CORPORATION and SPORTS AND GAMES ENTERTAINMENT
CORPORATION, respondents.

DECISION

YNARES-SANTIAGO, J.:

The instant petition for certiorari and prohibition under Rule 65 of the Rules of Court seeks to
nullify the "Grant of Authority and Agreement for the Operation of Sports Betting and Internet
Gaming," executed by respondent Philippine Amusement and Gaming Corporation (hereinafter
referred to as PAGCOR) in favor of respondent Sports and Games and Entertainment
Corporation (also referred to as SAGE).

The facts may be summarized as follows:

PAGCOR is a government owned and controlled corporation existing under Presidential

Decree No. 1869 issued on July 11, 1983 by then President Ferdinand Marcos. Pertinent
provisions of said enabling law read:

SECTION 1. Declaration of Policy. – It is hereby declared to be the policy of the State

to centralize and integrate all games of chance not heretofore authorized by
existing franchises or permitted by law in order to attain the following objectives:

xxx xxx xxx

b) To establish and operate clubs and casinos, for amusement and

recreation, including sports, gaming pools (basketball, football, lotteries,
etc.) and such other forms of amusement and recreation including games of
chance, which may be allowed by law within the territorial jurisdiction of the
Philippines and which will: x x x (3) minimize, if not totally eradicate, the evils,
malpractices and corruptions that are normally prevalent in the conduct and
operation of gambling clubs and casinos without direct government
involvement.
 xxx xxx xxx

TITLE IV – GRANT OF FRANCHISE

Sec.10. Nature and term of franchise. – Subject to the terms and conditions established in this
Decree, the Corporation is hereby granted for a period of twenty-five (25) years, renewable for
another twenty-five (25) years, the rights, privileges and authority to operate and maintain
gambling casinos, clubs, and other recreation or amusement places, sports, gaming pools, i.e.
basketball, football, lotteries, etc. whether on land or sea, within the territorial jurisdiction of
the Republic of the Philippines.

On March 31, 1998, PAGCOR’s board of directors approved an instrument denominated as

"Grant of Authority and Agreement for the Operation of Sports Betting and Internet Gaming",
which granted SAGE the authority to operate and maintain Sports Betting station in PAGCOR’s
casino locations, and Internet Gaming facilities to service local and international bettors,
provided that to the satisfaction of PAGCOR, appropriate safeguards and procedures are
established to ensure the integrity and fairness of the games.

On September 1, 1998, PAGCOR, represented by its Chairperson, Alicia Ll. Reyes, and SAGE,
represented by its Chairman of the Board, Henry Sy, Jr., and its President, Antonio D. Lacdao,
executed the above-named document.

Pursuant to the authority granted by PAGCOR, SAGE commenced its operations by conducting
gambling on the Internet on a trial-run basis, making pre-paid cards and redemption of winnings
available at various Bingo Bonanza outlets.

Petitioner, in his capacity as member of the Senate and Chairman of the Senate Committee on
Games, Amusement and Sports, files the instant petition, praying that the grant of authority by
PAGCOR in favor of SAGE be nullified. He maintains that PAGCOR committed grave abuse of
discretion amounting to lack or excess of jurisdiction when it authorized SAGE to operate
gambling on the internet. He contends that PAGCOR is not authorized under its legislative
franchise, P.D. 1869, to operate gambling on the internet for the simple reason that the said
decree could not have possibly contemplated internet gambling since at the time of its
enactment on July 11, 1983 the internet was yet inexistent and gambling activities were
confined exclusively to real-space. Further, he argues that the internet, being an international
network of computers, necessarily transcends the territorial jurisdiction of the Philippines, and
the grant to SAGE of authority to operate internet gambling contravenes the limitation in
PAGCOR’s franchise, under Section 14 of P.D. No. 1869 which provides:

Place. – The Corporation [i.e., PAGCOR] shall conduct gambling activities or games of
chance on land or water within the territorial jurisdiction of the Republic of the
Philippines. x x x

Moreover, according to petitioner, internet gambling does not fall under any of the categories
of the authorized gambling activities enumerated under Section 10 of P.D. No. 1869 which
grants PAGCOR the "right, privilege and authority to operate and maintain gambling casinos,
clubs, and other recreation or amusement places, sports gaming pools, within the territorial
jurisdiction of the Republic of the Philippines."1 He contends that internet gambling could not
have been included within the commonly accepted definition of "gambling casinos", "clubs" or
"other recreation or amusement places" as these terms refer to a physical structure in real-
space where people who intend to bet or gamble go and play games of chance authorized by
law.

The issues raised by petitioner are as follows:

 I. WHETHER OR NOT RESPONDENT PAGCOR IS AUTHORIZED UNDER P.D. NO. 1869 TO
OPERATE GAMBLING ACTIVITIES ON THE INTERNET;

II. WHETHER RESPONDENT PAGCOR ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION,

OR GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION,
WHEN IT AUTHORIZED RESPONDENT SAGE TO OPERATE INTERNET GAMBLING ON THE
BASIS OF ITS RIGHT "TO OPERATE AND MAINTAIN GAMBLING CASINOS, CLUBS AND
OTHER AMUSEMENT PLACES" UNDER SECTION 10 OF P.D. 1869;

III. WHETHER RESPONDENT PAGCOR ACTED WITHOUT OR IN EXCESS OF ITS JURISDICTION

OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF
JURISDICTION WHEN IT GRANTED AUTHORITY TO SAGE TO OPERATE GAMBLING
ACTIVITIES IN THE INTERNET.

The above-mentioned issues may be summarized into a single pivotal question: Does PAGCOR’s
legislative franchise include the right to vest another entity, SAGE in this case, with the authority
to operate Internet gambling? Otherwise put, does Presidential Decree No. 1869 authorize
PAGCOR to contract any part of its franchise to SAGE by authorizing the latter to operate
Internet gambling?

Before proceeding with our main discussion, let us first try to hurdle a number of important
procedural matters raised by the respondents.

In their separate Comments, respondents PAGCOR and SAGE insist that petitioner has no legal
standing to file the instant petition as a concerned citizen or as a member of the Philippine
Senate on the ground that he is not a real party-in-interest entitled to the avails of the suit. In
this light, they argue that petitioner does not have the requisite personal and substantial
interest to impugn the validity of PAGCOR’s grant of authority to SAGE.

Objections to the legal standing of a member of the Senate or House of Representative to

maintain a suit and assail the constitutionality or validity of laws, acts, decisions, rulings, or
orders of various government agencies or instrumentalities are not without precedent.
Ordinarily, before a member of Congress may properly challenge the validity of an official act of
any department of the government there must be an unmistakable showing that the challenged
official act affects or impairs his rights and prerogatives as legislator.2 However in a number of
cases,3 we clarified that where a case involves an issue of utmost importance, or one of
overreaching significance to society, the Court, in its discretion, can brush aside procedural
technicalities and take cognizance of the petition. Considering that the instant petition involves
legal questions that may have serious implications on public interests, we rule that petitioner
has the requisite legal standing to file this petition.

Respondents likewise urge the dismissal of the petition for certiorari and prohibition because
under Section 1, Rule 65 of the 1997 Rules of Civil Procedure, these remedies should be directed
to any tribunal, board, officer or person whether exercising judicial, quasi-judicial, or ministerial
functions. They maintain that in exercising its legally-mandated franchise to grant authority to
certain entities to operate a gambling or gaming activity, PAGCOR is not performing a judicial or
quasi-judicial act. Neither should the act of granting licenses or authority to operate be
construed as a purely ministerial act. According to them, in the event that this Court takes
cognizance of the instant petition, the same should be dismissed for failure of petitioner to
observe the hierarchy of courts.

Practically the same procedural infirmities were raised in Del Mar v. Philippine Amusement and
Gaming Corporation where an almost identical factual setting obtained. Petitioners therein filed
a petition for injunction directly before the Court which sought to enjoin respondent from
operating the jai-alai games by itself or in joint venture with another corporate entity allegedly
in violation of law and the Constitution. Respondents contended that the Court had no
jurisdiction to take original cognizance of a petition for injunction because it was not one of the
actions specifically mentioned in Section 1 of Rule 56 of the 1997 Rules of Civil Procedure.
Respondents likewise took exception to the alleged failure of petitioners to observe the doctrine
on hierarchy of courts. In brushing aside the apparent procedural lapse, we held that "x x x this
Court has the discretionary power to take cognizance of the petition at bar if compelling
reasons, or the nature and importance of the issues raised, warrant the immediate exercise of
its jurisdiction."4

In the case at bar, we are not inclined to rule differently. The petition at bar seeks to nullify, via
a petition for certiorari and prohibition filed directly before this Court, the "Grant of Authority
and Agreement for the Operation of Sports Betting and Internet Gaming" by virtue of which
SAGE was vested by PAGCOR with the authority to operate on-line Internet gambling. It is well
settled that averments in the complaint, and not the nomenclature given by the parties,
determine the nature of the action.5 Although the petition alleges grave abuse of discretion on
the part of respondent PAGCOR, what it primarily seeks to accomplish is to prevent the
enforcement of the "Grant of Authority and Agreement for the Operation of Sports Betting and
Internet Gaming." Thus, the action may properly be characterized as one for Prohibition under
Section 2 of Rule 65, which incidentally, is another remedy resorted to by petitioner.

Granting arguendo that the present action cannot be properly treated as a petition for
prohibition, the transcendental importance of the issues involved in this case warrants that we
set aside the technical defects and take primary jurisdiction over the petition at bar. One cannot
deny that the issues raised herein have potentially pervasive influence on the social and moral
well being of this nation, specially the youth; hence, their proper and just determination is an
imperative need. This is in accordance with the well-entrenched principle that rules of
procedure are not inflexible tools designed to hinder or delay, but to facilitate and promote the
administration of justice. Their strict and rigid application, which would result in technicalities
that tend to frustrate, rather than promote substantial justice, must always be eschewed.6

Having disposed of these procedural issues, we now come to the substance of the action.

A legislative franchise is a special privilege granted by the state to corporations. It is a privilege

of public concern which cannot be exercised at will and pleasure, but should be reserved for
public control and administration, either by the government directly, or by public agents, under
such conditions and regulations as the government may impose on them in the interest of the
public. It is Congress that prescribes the conditions on which the grant of the franchise may be
made. Thus the manner of granting the franchise, to whom it may be granted, the mode of
conducting the business, the charter and the quality of the service to be rendered and the duty
of the grantee to the public in exercising the franchise are almost always defined in clear and
unequivocal language.7

After a circumspect consideration of the foregoing discussion and the contending positions of
the parties, we hold that PAGCOR has acted beyond the limits of its authority when it passed on
or shared its franchise to SAGE.

In the Del Mar case where a similar issue was raised when PAGCOR entered into a joint venture
agreement with two other entities in the operation and management of jai alai games, the
Court,8 in an En Banc Resolution dated 24 August 2001, partially granted the motions for
clarification filed by respondents therein insofar as it prayed that PAGCOR has a valid franchise,
but only by itself (i.e. not in association with any other person or entity), to operate, maintain
and/or manage the game of jai-alai.

In the case at bar, PAGCOR executed an agreement with SAGE whereby the former grants the
latter the authority to operate and maintain sports betting stations and Internet gaming
operations. In essence, the grant of authority gives SAGE the privilege to actively participate,
partake and share PAGCOR’s franchise to operate a gambling activity. The grant of franchise is
a special privilege that constitutes a right and a duty to be performed by the grantee. The
grantee must not perform its activities arbitrarily and whimsically but must abide by the limits
set by its franchise and strictly adhere to its terms and conditionalities. A corporation as a
creature of the State is presumed to exist for the common good. Hence, the special privileges
and franchises it receives are subject to the laws of the State and the limitations of its charter.
There is therefore a reserved right of the State to inquire how these privileges had been
employed, and whether they have been abused.9

While PAGCOR is allowed under its charter to enter into operator’s and/or management
contracts, it is not allowed under the same charter to relinquish or share its franchise, much less
grant a veritable franchise to another entity such as SAGE. PAGCOR can not delegate its power
in view of the legal principle of delegata potestas delegare non potest, inasmuch as there is
nothing in the charter to show that it has been expressly authorized to do so. In Lim v.
Pacquing,10 the Court clarified that "since ADC has no franchise from Congress to operate the
jai-alai, it may not so operate even if it has a license or permit from the City Mayor to operate
the jai-alai in the City of Manila." By the same token, SAGE has to obtain a separate legislative
franchise and not "ride on" PAGCOR’s franchise if it were to legally operate on-line Internet
gambling.

WHEREFORE, in view of all the foregoing, the instant petition is GRANTED. The "Grant of
Authority and Agreement to Operate Sports Betting and Internet Gaming" executed by PAGCOR
in favor of SAGE is declared NULL and VOID.

SO ORDERED.

***PERMISSIBLE DELEGATION

***TARIFF POWERS OF THE PRESIDENT / ART. 6 SEC. 28 (2)

Art. 6 SECTION 28. (1) The rule of taxation shall be uniform and equitable. The Congress shall
evolve a progressive system of taxation.

(2) The Congress may, by law, authorize the President to fix within specified limits, and subject
to such limitations and restrictions as it may impose, tariff rates, import and export quotas,
tonnage and wharfage dues, and other duties or imposts within the framework of the national
development program of the Government.

***EMERGENCY POWERS TO THE PRESIDENT / ART.6 SEC.23(2)

Art. 6 SECTION 23. (1) The Congress, by a vote of two-thirds of both Houses in joint session
assembled, voting separately, shall have the sole power to declare the existence of a state of
war.

(2) In times of war or other national emergency, the Congress may, by law, authorize the
President, for a limited period and subject to such restrictions as it may prescribe, to exercise
powers necessary and proper to carry out a declared national policy. Unless sooner withdrawn
by resolution of the Congress, such powers shall cease upon the next adjournment thereof.

***DELEGATION TO THE PEOPLE / Art.6 Sec. 32 / Art.10 Sec. 10 / Art.17 Sec. 2

Art. 6 SECTION 32. The Congress shall, as early as possible, provide for a system of initiative and
referendum, and the exceptions therefrom, whereby the people can directly propose and enact
laws or approve or reject any act or law or part thereof passed by the Congress or local legislative
body after the registration of a petition therefor signed by at least ten per centum of the total
number of registered voters, of which every legislative district must be represented by at least three
per centum of the registered voters thereof.

Art. 10 Section 10. No province, city, municipality, or barangay may be created, divided, merged,
abolished, or its boundary substantially altered, except in accordance with the criteria established in
the local government code and subject to approval by a majority of the votes cast in a plebiscite in the
political units directly affected.

Art.17 Section 2. Amendments to this Constitution may likewise be directly proposed by the
people through initiative upon a petition of at least twelve per centum of the total number of
registered voters, of which every legislative district must be represented by at least three per
centum of the registered voters therein. No amendment under this section shall be authorized
within five years following the ratification of this Constitution nor oftener than once every five
years thereafter.

The Congress shall provide for the implementation of the exercise of this right.