EN BANC [G.R. Nos. 95203-05 : December 18, 1990.] 192 SCRA 363 SENA !R ERNES ! "ACEDA, Petitioner, vs.

ENERG# REG$%A !R# B!ARD &ERB'( "ARCE%! N. )ERNAND!, A%E*ANDR! B. A)$R!NG( RE+ ,. AN -!NGC!( ./0 !SCAR E. A%A, 1/ 23e1r co44ec215e o661c1.4 c.7.c121es .s C3.1rm./ ./0 "embers o6 23e Bo.r0 &ERB', res7ec215e48( CA A%-N! "ACARA-G, 1/ 31s 9:.0r:74e o661c1.4 c.7.c121es .s E;ec:215e Secre2.r8, C3.1rm./ o6 <3141771/e N.21o/.4 !14 Com7./8( !661ce o6 23e E/er=8 A66.1rs, ./0 >123 "AN$E% ES RE%%A, 1/ 23e1r res7ec215e o661c1.4 c.7.c121es .s C3.1rm./ ./0 <res10e/2 o6 23e <e2ro/ Cor7or.21o/( <-%-<-NAS S?E%% <E R!%E$" C!R<!RA -!N( >123 CESAR B$ENA,EN $RA ./0 RE# GA"B!A .s c3.1rm./ ./0 <res10e/2, res7ec215e48( CA% E+ <?-%-<<-NES >123 )RANC-S AB%AN, <res10e/2 ./0 C31e6 E;ec:215e !661cer( ./0 23e <res10e/2s o6 <3141771/e <e2ro4e:m De.4er@s Assoc1.21o/, C.42e; De.4er@s Co., <e2ro/ De.4er@s Asso., S3e44 De.4er@s Asso. o6 23e <314., %19:e61e0 <e2ro4e:m G.s -/s212:2e o6 23e <314s., ./8 ./0 .44 co/cer/e0 =.so41/e ./0 7e2ro4 0e.4ers or s2.21o/s( ./0 s:c3 o23er 7erso/s, o661c1.4s, ./0 7.r21es, .c21/= 6or ./0 o/ 23e1r be3.46( or 1/ re7rese/2.21o/ o6 ./0Aor :/0er 23e1r .:23or128, Respondents. [G.R. Nos. 95119-21 : December 18, 1990.] 192 SCRA 363 !%-,ER !. %!BAN!, Petitioner, vs. ENERG# REG$%A !R# B!ARD &ERB', <-%-<-NAS S?E%% <E R!%E$" C!R<!RA -!N, CA% E+ &<?-%.', -NC., ./0 <E R!N C!R<!RA -!N, Respondents. DEC-S-!N SAR"-EN !, J.: The petitioners pray for injunctive relief, to stop the Energy Regulatory Board (Board hereinafter) from implementing its Order, dated September !, !""#, mandating a provisional increase in the prices of petroleum and petroleum products, as follo$s% &RO'()TS *+ &ESOS &ER ,*TER O&S&remium .asoline !/00## Regular .asoline !/00## 1vturbo !/2334 5erosene !/ 4## 'iesel Oil !/ 4## -uel Oil !/4"## -eedstoc6 !/4"## ,&. #/2420 1sphalts /0!3# Thinners !/0! ! !

*t appears that on September !#, !""#, )alte7 (&hilippines), *nc/, &ilipinas Shell &etroleum )orporation, and &etron )orporation proferred separate applications $ith the Board for permission to increase the $holesale posted prices of petroleum products, as follo$s% )alte7 &8/ 3"0 per liter Shell /#882 per liter &etron /## per liter and mean$hile, for provisional authority to increase temporarily such $holesale posted prices pending further proceedings/
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On September !, !""#, the Board, in a joint (on three applications) Order granted provisional relief as follo$s% :;ERE-ORE, considering the foregoing, and pursuant to Section 2 of E7ecutive Order +o/ !0 , this Board hereby grants herein applicants< prayer for provisional relief and, accordingly, authori=es said applicants a $eighted average provisional increase of O+E &ESO 1+' -ORT>9T:O )E+T1?OS (&!/4 ) per liter in the $holesale posted prices of their various petroleum products enumerated belo$, refined and@or mar6eted by them locally/ 8 The petitioners submit that the above Order had been issued $ith grave abuse of discretion, tantamount to lac6 of jurisdiction, and correctible by Certiorari/ The petitioner, Senator Ernesto Aaceda, 4 also submits that the same $as issued $ithout proper notice and hearing in violation of Section 8, paragraph (e), of E7ecutive Order +o/ !0 B that the Board, in decreeing an increase, had created a ne$ source for the Oil &rice Stabili=ation -und (O&S-), or other$ise that it had levied a ta7, a po$er vested in the legislature, and@or that it had Cre9collectedC, by an act of ta7ation, ad valorem ta7es on oil $hich Republic 1ct +o/ 3"3D had abolished/ The petitioner, 1tty/ Oliver ,o=ano, D li6e$ise argues that the Board<s Order $as issued $ithout notice and hearing, and hence, $ithout due process of la$/ The intervenor, the Trade (nion of the &hilippines and 1llied Services (T(&1S@-SA)9 :/-/T/(/, 3 argues on the other hand, that the increase cannot be allo$ed since the respondents oil companies had not e7hausted their e7isting oil stoc6 $hich they had bought at old prices and that they cannot be allo$ed to charge ne$ rates for stoc6 purchased at such lo$er rates/ The )ourt set the cases (in ./R/ +os/ "D #89#D) for hearing on October D, !""#, in $hich Senator Aaceda and his counsel, 1tty/ 1le7ander &adilla, argued/ The Solicitor .eneral, on behalf of the Board, also presented his arguments, together $ith Board )ommissioner Re7 Tantiangco/ 1ttys/ -ederico 1li6pala, Er/ and Eoselia &oblador represented the oil firms (&etron and )alte7, respectively)/ The parties $ere thereafter reFuired to submit their memorandums after $hich, the )ourt considered the cases submitted for resolution/ On +ovember #, !""#, the )ourt ordered these cases consolidated/ On +ovember 0, !""#, $e gave due course to both petitions/ The )ourt finds no merit in these petitions/ Senator Aaceda and 1tty/ ,o=ano, in Fuestioning the lac6 of a hearing, have overloo6ed the provisions of Section 2 of E7ecutive Order +o/ !0 , $hich $e Fuote% CSE)T*O+ 2/ 1uthority to .rant &rovisional Relief / G The Board may, upon the filing of an application, petition or complaint or at any stage thereafter and $ithout prior hearing, on the basis of supporting papers duly verified or authenticated, grant provisional relief on motion of a party in the case or on its o$n initiative, $ithout prejudice to a final decision after hearing, should the Board find that the pleadings, together $ith such

affidavits, documents and other evidence $hich may be submitted in support of the motion, substantially support the provisional order% &rovided, That the Board shall immediately schedule and conduct a hearing thereon $ithin thirty (8#) days thereafter, upon publication and notice to all affected parties/
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1s the Order itself indicates, the authority for provisional increase falls $ithin the above provision/ There is no merit in the Senator<s contention that the CapplicableC provision is Section 8, paragraph (e) of the E7ecutive Order, $hich $e Fuote% (e) :henever the Board has determined that there is a shortage of any petroleum product, or $hen public interest so reFuires, it may ta6e such steps as it may consider necessary, including the temporary adjustment of the levels of prices of petroleum products and the payment to the Oil &rice Stabili=ation -und created under &residential 'ecree +o/ !"D3 by persons or entities engaged in the petroleum industry of such amounts as may be determined by the Board, $hich $ill enable the importer to recover its cost of importation/ :hat must be stressed is that $hile under E7ecutive Order +o/ !0 , a hearing is indispensable, it does not preclude the Board from ordering, e7 parte, a provisional increase, as it did here, subject to its final disposition of $hether or not% (!) to ma6e it permanentB ( ) to reduce or increase it furtherB or (8) to deny the application/ Section 80 paragraph (e) is a6in to a temporary restraining order or a $rit of preliminary attachment issued by the courts, $hich are given e7 parte, and $hich are subject to the resolution of the main case/ Section 8, paragraph (e) and Section 2 do not negate each other, or other$ise, operate e7clusively of the other, in that the Board may resort to one but not to both at the same time/ Section 8(e) outlines the jurisdiction of the Board and the grounds for $hich it may decree a price adjustment, subject to the reFuirements of notice and hearing/ &ending that, ho$ever, it may order, under Section 2, an authority to increase provisionally, $ithout need of a hearing, subject to the final outcome of the proceeding/ The Board, of course, is not prevented from conducting a hearing on the grant of provisional authority G $hich is of course, the better procedure G ho$ever, it cannot be stigmati=ed later if it failed to conduct one/ 1s $e held in )iti=ens< 1lliance for )onsumer &rotection v/ Energy Regulatory Board/ 0 *n the light of Section 2 Fuoted above, public respondent Board need not even have conducted formal hearings in these cases prior to issuance of its Order of !4 1ugust !"20 granting a provisional increase of prices/ The Board, upon its o$n discretion and on the basis of documents and evidence submitted by private respondents, could have issued an order granting provisional relief immediately upon filing by private respondents of their respective applications/ *n this respect, the )ourt considers the evidence presented by private respondents in support of their applications G i/e/, evidence sho$ing that importation costs of petroleum products had gone upB that the peso had depreciated in valueB and that the Oil &rice Stabili=ation -und (O&S-) had by then been depleted G as substantial and hence constitutive of at least prima facie basis for issuance by the Board of a provisional relief order granting an increase in the prices of petroleum products/ 2 :e do not therefore find the challenged action of the Board to have been done in violation of the due process clause/ The petitioners may contest ho$ever, the applications at the hearings proper/ Senator Aaceda<s attac6 on the Order in Fuestion on premises that it constitutes an act of ta7ation or that it negates the effects of Republic 1ct +o/ 3"3D, cannot prosper/ Republic 1ct +o/ 3"3D operated to lo$er ta7es on petroleum and petroleum products by imposing specific ta7es rather than ad valorem ta7es thereonB it is, not, ho$ever, an insurance against an Coil hi6eC, $henever $arranted, or is it a price control mechanism

on petroleum and petroleum products/ The statute had possibly forestalled a larger hi6e, but it operated no more/
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The Board Order authori=ing the proceeds generated by the increase to be deposited to the O&S- is not an act of ta7ation/ *t is authori=ed by &residential 'ecree +o/ !"D3, as amended by E7ecutive Order +o/ !80, as follo$s% SE)T*O+ 2/ There is hereby created a Trust 1ccount in the boo6s of accounts of the Ainistry of Energy to be designated as Oil &rice Stabili=ation -und (O&S-) for the purpose of minimi=ing freFuent price changes brought about by e7change rate adjustments and@or changes in $orld mar6et prices of crude oil and imported petroleum products/ The Oil &rice Stabili=ation -und (O&S-) may be sourced from any of the follo$ing% a) 1ny increase in the ta7 collection from ad valorem ta7 or customs duty imposed on petroleum products subject to ta7 under this 'ecree arising from e7change rate adjustment, as may be determined by the Ainister of -inance in consultation $ith the Board of EnergyB b) 1ny increase in the ta7 collection as a result of the lifting of ta7 e7emptions of government corporations, as may be determined by the Ainister of -inance in consultation $ith the Board of EnergyB c) 1ny additional amount to be imposed on petroleum products to augment the resources of the -und through an appropriate Order that may be issued by the Board of Energy reFuiring payment by persons or companies engaged in the business of importing, manufacturing and@or mar6eting petroleum productsB d) 1ny resulting peso cost differentials in case the actual peso costs paid by oil companies in the importation of crude oil and petroleum products is less than the peso costs computed using the reference foreign e7change rates as fi7ed by the Board of Energy/ 1nent claims that oil companies cannot charge ne$ prices for oil purchased at old rates, suffice it to say that the increase in Fuestion $as not prompted alone by the increase in $orld oil prices arising from tension in the &ersian .ulf/ :hat the )ourt gathers from the pleadings as $ell as events of $hich it ta6es judicial notice, is that% (!) as of Eune 8#, !""#, the O&S- has incurred a deficit of &3/! BillionB ( ) the e7change rate has fallen to & 2/## to H!/##B (8) the country<s balance of payments is e7pected to reach H! BillionB (4) our trade deficit is at H /2DD Billion as of the first nine months of the year/ Evidently, authorities have been unable to collect enough ta7es necessary to replenish the O&S- as provided by &residential 'ecree +o/ !"D3, and hence, there $as no available alternative but to hi6e e7isting prices/ The O&S-, as the )ourt held in the aforecited )1)& cases, must not be understood to be a funding designed to guarantee oil firms< profits although as a subsidy, or a trust account, the )ourt has no doubt that oil firms ma6e money from it/ 1s $e held there, ho$ever, the O&S- $as established precisely to protect the consuming public from the erratic movement of oil prices and to preclude oil companies from ta6ing advantage of fluctuations occurring every so often/ 1s a buffer mechanism, it stabili=es domestic prices by bringing about a uniform rate rather than leaving pricing to the caprices of the mar6et/ *n all li6elihood, therefore, an oil hi6e $ould have probably been imminent, $ith or $ithout trouble in the .ulf, although trouble $ould have probably aggravated it/
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The )ourt is not to be understood as having prejudged the justness of an oil price increase amid the above premises/ :hat the )ourt is saying is that it thin6s that based thereon, the .overnment has made out a prima facie case to justify the provisional increase in Fuestion/ ,et the )ourt therefore ma6e clear that these findings are not finalB the burden, ho$ever, is on the petitioners< shoulders to demonstrate the fact that the present economic picture does not $arrant a permanent increase/

There is no doubt that the increase in oil prices in Fuestion (not to mention another one impending, $hich the )ourt understands has been under consideration by policy9 ma6ers) spells hard(er) times for the -ilipino people/ The )ourt can not, ho$ever, debate the $isdom of policy or the logic behind it (unless it is other$ise arbitrary), not because the )ourt agrees $ith policy, but because the )ourt is not the suitable forum for debate/ *t is a Fuestion best judged by the political leadership $hich after all, determines policy, and ultimately, by the electorate, that stands to be better for it or $orse off, either in the short or long run/ 1t this point, the )ourt shares the indignation of the people over the conspiracy of events and regrets its o$n po$erlessness, if by this 'ecision it has been po$erless/ The constitutional scheme of things has simply left it $ith no choice/ *n fine, $e find no grave abuse of discretion committed by the respondent Board in issuing its Fuestioned Order/ :;ERE-ORE, these petitions are '*SA*SSE'/ +o costs/ SO OR'ERE'/ Narvasa, Gutierrez, Jr ., Cruz, Gancayco, Bidin, Grio Aquino, Medialdea and Re alado, JJ., concur. !ernan, C.J., Melencio"#errera and Padilla, JJ., no part. !eliciano, J., is on leave. Se7.r.2e !71/1o/s PARA$, J., dissentin : * dissent/ *n fi7ing the oil prices complained of, the Energy Regulatory Board (ERB) gravely abused its discretion G (!) in approving the prices $ithout due process of la$, and ( ) in e7ercising the ta7ing po$er in gross violation of the !"20 )onstitution $hich vests such po$er only in )ongress/
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:ith respect to due process, it $ill be noted that it is Sec/ 8(e) (and not Sec/ 2) of E7/ Order +o/ !0 $hich should apply to the instant case (and therefore a hearing is essential) ! for it is Sec/ 8(e) that refers to Cthe temporary adjustment of the levels of prices of petroleum productsC or instances C$hen public interest so reFuires/C Sec/ 2, $hich is relied upon by the majority opinion, does +OT spea6 of price increases/ 1dditionally it is clear that in the instant case, Cpublic interestC Ialso mentioned in Sec/ 8 (e)J necessitated a prior hearing/ 1nent the unconstitutional use of the ta7ing po$er, the decision of the majority says that Cthe Board Order authori=ing the proceeds generated by the increasesC is Cauthori=ed by &residential 'ecree +o/ !4D3, as amended by E7ecutive Order +o/ !80C (See 'ecision, pp/ 092)/ 1ssuming that such is authori=ed by la$, still a la$, no matter ho$ imperative, cannot prevail over the )onstitution $hich grants only to )ongress the po$er to ta7/ 1nd indeed, there can be no denying the fact that $hen revenue is earned by the government from the consuming public (e7cept $hen only licenses are concerned) there is an e7ercise of the ta7ing po$er/ * am of course a$are of the dangerous economic Fuagmire to $hich our country has been plunged by the sadism precipitating the Aiddle East crisis, but certainly one error cannot be corrected by another error/ Besides there are more significant and clear9cut reasons for our economic crisis% namely, the intentional depreciation (actually, a devaluation) of our already demeaned currency, our unfortunate liberali=ation of imports, and our slavish subservience to the dictates of the *A-/
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%ndnotes
!/ Rollo, 4D/ / *d/, 8 / 8/ *d/, 4494D/ 4/ ;e is the petitioner in ./R/ +os/ "D #89#D/ D/ ;e is the other petitioner in ./R/ +os/ "D!!"9 !/ 3/ *t is the intervenor in ./R/ +os/ "D #89#D/ 0/ +os/ 022229"#, 0"D#!9#8, 0"D"#9" , Eune 8, !"22, !3 S)R1 D !/ 2/ Supra, at D8D/

PARA$, J., dissentin :

!/ The majority opinion itself concedes that $hen See/ 8(e) is applicable, a hearing is indispensable (See 'ecision, p/ 3)/