Southern Cross Cement Vs Phil Cement Manufacturers

4/2/2017 G.R.No.
158540
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CustomSearch
RepublicofthePhilippines
SUPREMECOURT
Manila
SECONDDIVISION
G.R.No.158540July8,2004
SOUTHERNCROSSCEMENTCORPORATION,petitioner,
vs.
THEPHILIPPINECEMENTMANUFACTURERSCORP.,THESECRETARYOFTHEDEPARTMENTOFTRADE&
INDUSTRY,THESECRETARYOFTHEDEPARTMENTOFFINANCE,andTHECOMMISSIONEROFTHE
BUREAUOFCUSTOMS,respondents.
DECISION
TINGA,J.:
"Good fences make good neighbors," so observed Robert Frost, the archetype of traditional New England
detachment. The Frost ethos has been heeded by nations adjusting to the effects of the liberalized global
market.1ThePhilippines,forone,enactedRepublicAct(Rep.Act)No.8751(ontheimpositionofcountervailing
duties),Rep.ActNo.8752(ontheimpositionofantidumpingduties)and,finally,Rep.ActNo.8800,alsoknown
astheSafeguardMeasuresAct("SMA")2soonafteritjoinedtheGeneralAgreementonTariffandTrade(GATT)
andtheWorldTradeOrganization(WTO)Agreement.3
The SMA provides the structure and mechanics for the imposition of emergency measures, including tariffs, to
protect domestic industries and producers from increased imports which inflict or could inflict serious injury on
them.4ThewisdomofthepoliciesbehindtheSMA,however,isnotputintoquestionbythepetitionatbar.The
questionssubmittedtotheCourtrelatetothemeansandtheproceduresordainedinthelawtoensurethatthe
determinationoftheimpositionornonimpositionofasafeguardmeasureisproper.
AntecedentFacts
Petitioner Southern Cross Cement Corporation ("Southern Cross") is a domestic corporation engaged in the
business of cement manufacturing, production, importation and exportation. Its principal stockholders are
Taiheiyo Cement Corporation and Tokuyama Corporation, purportedly the largest cement manufacturers in
Japan.5
Private respondent Philippine Cement Manufacturers Corporation6 ("Philcemcor") is an association of domestic

cement manufacturers. It has eighteen (18) members,7 per Record. While Philcemcor heralds itself to be an
association of domestic cement manufacturers, it appears that considerable equity holdings, if not controlling
interests in at least twelve (12) of its membercorporations, were acquired by the three largest cement
manufacturersintheworld,namelyFinanciereLafargeS.A.ofFrance,CemexS.A.deC.V.ofMexico,andHolcim
Ltd.ofSwitzerland(formerlyHolderbankFinanciereGlaris,Ltd.,thenHolderfinB.V.).8
On22May2001,respondentDepartmentofTradeandIndustry("DTI")acceptedanapplicationfromPhilcemcor,
alleging that the importation of gray Portland cement9 in increased quantities has caused declines in domestic
production,capacityutilization,marketshare,salesandemploymentaswellascauseddepressedlocalprices.
Accordingly,Philcemcorsoughttheimpositionatfirstofprovisional,thenlater,definitivesafeguardmeasureson
theimportofcementpursuanttotheSMA.Philcemcorfiledtheapplicationinbehalfoftwelve(12)ofitsmember
companies.10
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After preliminary investigation, the Bureau of Import Services of the DTI, determined that critical circumstances
existed justifying the imposition of provisional measures.11 On 7 November 2001, the DTI issued an Order,
imposingaprovisionalmeasureequivalenttoTwentyPesosandSixtyCentavos(P20.60)perforty(40)kilogram
bagonallimportationsofgrayPortlandcementforaperiodnotexceedingtwohundred(200)daysfromthedate
of issuance by the Bureau of Customs (BOC) of the implementing Customs Memorandum Order.12 The
correspondingCustomsMemorandumOrderwasissuedon10December2001,totakeeffectthatsamedayand
toremaininforcefortwohundred(200)days.13
In the meantime, the Tariff Commission, on 19 November 2001, received a request from the DTI for a formal
investigationtodeterminewhetherornottoimposeadefinitivesafeguardmeasureonimportsofgrayPortland
cement, pursuant to Section 9 of the SMA and its Implementing Rules and Regulations. A notice of
commencement of formal investigation was published in the newspapers on 21 November 2001. Individual
notices were likewise sent to concerned parties, such as Philcemcor, various importers and exporters, the
Embassies of Indonesia, Japan and Taiwan, contractors/builders associations, industry associations, cement
workers' groups, consumer groups, nongovernment organizations and concerned government agencies.14 A
preliminary conference was held on 27 November 2001, attended by several concerned parties, including
Southern Cross.15 Subsequently, the Tariff Commission received several position papers both in support and
against Philcemcor's application.16 The Tariff Commission also visited the corporate offices and manufacturing
facilitiesofeachoftheapplicantcompanies,aswellasthatofSouthernCrossandtwoothercementimporters.17
On 13 March 2002, the Tariff Commission issued its Formal Investigation Report ("Report"). Among the factors
studiedbytheTariffCommissioninitsReportwerethemarketshareofthedomesticindustry,18productionand
sales,19 capacity utilization,20 financial performance and profitability,21 and return on sales.22 The Tariff
Commissionarrivedatthefollowingconclusions:
1. The circumstances provided in Article XIX of GATT 1994 need not be demonstrated since the product
under consideration (gray Portland cement) is not the subject of any Philippine obligation or tariff
concession under the WTO Agreement. Nonetheless, such inquiry is governed by the national legislation
(R.A.8800)andthetermsandconditionsoftheAgreementonSafeguards.
2. The collective output of the twelve (12) applicant companies constitutes a major proportion of the total
domesticproductionofgrayPortlandcementandblendedPortlandcement.
3.LocallyproducedgrayPortlandcementandblendedPortlandcement(Pozzolan)are"like"toimported
grayPortlandcement.
4. Gray Portland cement is being imported into the Philippines in increased quantities, both in absolute
terms and relative to domestic production, starting in 2000. The increase in volume of imports is recent,
sudden,sharpandsignificant.
5. The industry has not suffered and is not suffering significant overall impairment in its condition, i.e.,
seriousinjury.
6.ThereisnothreatofseriousinjurythatisimminentfromimportsofgrayPortlandcement.
7. Causation has become moot and academic in view of the negative determination of the elements of
seriousinjuryandimminentthreatofseriousinjury.23
Accordingly,theTariffCommissionmadethefollowingrecommendation,towit:
The elements of serious injury and imminent threat of serious injury not having been established, it is
herebyrecommendedthatnodefinitivegeneralsafeguardmeasurebeimposedontheimportationofgray
Portlandcement.24
TheDTIreceivedtheReporton14March2002.Afterreviewingthereport,thenDTISecretaryManuelRoxasII
("DTISecretary")disagreedwiththeconclusionoftheTariffCommissionthattherewasnoseriousinjurytothe
local cement industry caused by the surge of imports.25 In view of this disagreement, the DTI requested an
opinion from the Department of Justice ("DOJ") on the DTI Secretary's scope of options in acting on the
Commission'srecommendations.Subsequently,thenDOJSecretaryHernandoPerezrenderedanopinionstating
thatSection13oftheSMAprecludedareviewbytheDTISecretaryoftheTariffCommission'snegativefinding,
orfindingthatadefinitivesafeguardmeasureshouldnotbeimposed.26
On 5 April 2002, the DTI Secretary promulgated a Decision. After quoting the conclusions of the Tariff
Commission, the DTI Secretary noted the DTI's disagreement with the conclusions. However, he also cited the
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DOJOpinionadvisingtheDTIthatitwasboundbythenegativefindingoftheTariffCommission.Thus,heruled
asfollows:
TheDTIhasnoalternativebuttoabidebythe[Tariff]Commission'srecommendations.
INVIEWOFTHEFOREGOING,andinaccordancewithSection13ofRA8800whichstates:
"In the event of a negative final determination or if the cash bond is in excess of the
definitive safeguard duty assessed, the Secretary shall immediately issue, through the
SecretaryofFinance,awritteninstructiontotheCommissionerofCustoms,authorizingthe
returnofthecashbondortheremainderthereof,asthecasemaybe,previouslycollectedas
provisionalgeneralsafeguardmeasurewithinten(10)daysfromthedateafinaldecisionhas
beenmadeProvided,thatthegovernmentshallnotbeliableforanyinterestontheamount
to be returned. The Secretary shall not accept for consideration another petition from the
same industry, with respect to the same imports of the product under consideration within
one(1)yearafterthedateofrenderingsuchadecision."
TheDTIherebyissuesthefollowing:
The application for safeguard measures against the importation of gray Portland cement filed by
PHILCEMCOR(CaseNo.022001)isherebydenied.27(Emphasisintheoriginal)
PhilcemcorreceivedacopyoftheDTIDecisionon12April2002.Tendayslater,itfiledwiththeCourtofAppeals
aPetitionforCertiorari,ProhibitionandMandamus28seekingtosetasidetheDTIDecision,aswellastheTariff
Commission'sReport.PhilcemcorlikewiseappliedforaTemporaryRestrainingOrder/InjunctiontoenjointheDTI
andtheBOCfromimplementingthequestionedDecisionandReport.ItprayedthattheCourtofAppealsdirect
the DTI Secretary to disregard the Report and to render judgment independently of the Report. Philcemcor
arguedthattheDTISecretary,vestedasheisunderthelawwiththepowerofreview,isnotboundtoadoptthe
recommendations of the Tariff Commission and, that the Report is void, as it is predicated on a flawed
framework,inconsistentinferencesanderroneousmethodology.29
On 10 June 2002, Southern Cross filed its Comment.30 It argued that the Court of Appeals had no jurisdiction
over Philcemcor's Petition, for it is on the Court of Tax Appeals ("CTA") that the SMA conferred jurisdiction to
reviewrulingsoftheSecretaryinconnectionwiththeimpositionofasafeguardmeasure.Itlikewisearguedthat
Philcemcor'sresorttothespecialcivilactionofcertiorariisimproper,consideringthatwhatPhilcemcorsoughtto
rectifyisanerrorofjudgmentandnotanerrorofjurisdictionorgraveabuseofdiscretion,andthatapetitionfor
reviewwiththeCTAwasavailableasaplain,speedyandadequateremedy.Finally,SouthernCrossechoedthe
DOJOpinionthatSection13oftheSMAprecludesareviewbytheDTISecretaryofanegativefindingoftheTariff
Commission.
After conducting a hearing on 19 June 2002 on Philcemcor's application for preliminary injunction, the Court of
Appeals'TwelfthDivision31grantedthewritsoughtinitsResolutiondated21June2002.32Sevendayslater,on
28June2002,thetwohundred(200)dayperiodfortheimpositionoftheprovisionalmeasureexpired.Despite
the lapse of the period, the BOC continued to impose the provisional measure on all importations of Portland
cement made by Southern Cross. The uninterrupted assessment of the tariff, according to Southern Cross,
workedtoitsdetrimenttothepointthatthecontinuedimpositionwouldeventuallyleadtoitsclosure.33
Southern Cross timely filed a Motion for Reconsideration of the Resolution on 9 September 2002. Alleging that
Philcemcorwasnotentitledtoprovisionalrelief,SouthernCrosslikewisesoughtaclarificatoryorderastowhether
the grant of the writ of preliminary injunction could extend the earlier imposition of the provisional measure
beyond the two hundred (200)day limit imposed by law. The appeals' court failed to take immediate action on
Southern Cross's motion despite the four (4) motions for early resolution the latter filed between September of
2002andFebruaryof2003.Aftersix(6)months,on19February2003,theCourtofAppealsdirectedPhilcemcor
to comment on Southern Cross's Motion for Reconsideration.34 After Philcemcor filed its Opposition35 on 13
March2003,SouthernCrossfiledanothersetoffour(4)motionsforearlyresolution.
Despite the efforts of Southern Cross, the Court of Appeals failed to directly resolve the Motion for
Reconsideration. Instead, on 5 June 2003, it rendered a Decision,36 granting in part Philcemcor's petition. The
appellate court ruled that it had jurisdiction over the petition for certiorari since it alleged grave abuse of
discretion. It refused to annul the findings of the Tariff Commission, citing the rule that factual findings of
administrative agencies are binding upon the courts and its corollary, that courts should not interfere in matters
addressed to the sound discretion and coming under the special technical knowledge and training of such
agencies.37 Nevertheless, it held that the DTI Secretary is not bound by the factual findings of the Tariff
Commission since such findings are merely recommendatory and they fall within the ambit of the Secretary's
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discretionary review. It determined that the legislative intent is to grant the DTI Secretary the power to make a
finaldecisionontheTariffCommission'srecommendation.38ThedispositiveportionoftheDecisionreads:
WHEREFORE, based on the foregoing premises, petitioner's prayer to set aside the findings of the Tariff
CommissioninitsassailedReportdatedMarch13,2002isDENIED.Ontheotherhand,theassailedApril
5, 2002 Decision of the Secretary of the Department of Trade and Industry is hereby SET ASIDE.
Consequently, the case is REMANDED to the public respondent Secretary of Department of Trade and
IndustryforafinaldecisioninaccordancewithRA8800anditsImplementingRulesandRegulations.
SOORDERED.39
On23June2003,SouthernCrossfiledthepresentpetition,assailingtheappellatecourt'sDecisionfordeparting
from the accepted and usual course of judicial proceedings, and not deciding the substantial questions in
accordance with law and jurisprudence. The petition argues in the main that the Court of Appeals has no
jurisdiction over Philcemcor's petition, the proper remedy being a petition for review with the CTA conformably
withtheSMA,andthatthefactualfindingsoftheTariffCommissionontheexistenceornonexistenceconditions
warrantingtheimpositionofgeneralsafeguardmeasuresarebindingupontheDTISecretary.
The timely filing of Southern Cross's petition before this Court necessarily prevented the Court of Appeals
Decisionfrombecomingfinal.40Yeton25June2003,theDTISecretaryissuedanewDecision,rulingthistime
that that in light of the appellate court's Decision there was no longer any legal impediment to his deciding
Philcemcor's application for definitive safeguard measures.41 He made a determination that, contrary to the
findingsoftheTariffCommission,thelocalcementindustryhadsufferedseriousinjuryasaresultoftheimport
surges.42Accordingly,heimposedadefinitivesafeguardmeasureontheimportationofgrayPortlandcement,in
the form of a definitive safeguard duty in the amount of P20.60/40 kg. bag for three years on imported gray
PortlandCement.43
On7July2003,SouthernCrossfiledwiththeCourta"VeryUrgentApplicationforaTemporaryRestrainingOrder
and/orAWritofPreliminaryInjunction"("TROApplication"),seekingtoenjointheDTISecretaryfromenforcinghis
Decision of 25 June 2003 in view of the pending petition before this Court. Philcemcor filed an opposition,
claiming, among others, that it is not this Court but the CTA that has jurisdiction over the application under the
law.
On1August2003,SouthernCrossfiledwiththeCTAaPetitionforReview,assailingtheDTISecretary's25June
2003Decisionwhichimposedthedefinitesafeguardmeasure.Prescindingfromthisaction,Philcemcorfiledwith
thisCourtaManifestationandMotiontoDismissinregardtoSouthernCross'spetition,allegingthatitdeliberately
andwillfullyresortedtoforumshopping.ItpointsoutthatSouthernCross'sTROApplicationseekstoenjointhe
DTI Secretary's second decision, while its Petition before the CTA prays for the annulment of the same
decision.44
ReiteratingitsCommentonSouthernCross'sPetitionforReview,PhilcemcoralsoarguesthattheCTA,beinga
specialcourtoflimitedjurisdiction,couldonlyreviewtherulingoftheDTISecretarywhenasafeguardmeasureis
imposed,andthatthefactualfindingsoftheTariffCommissionarenotbindingontheDTISecretary.45
AftergivingduecoursetoSouthernCross'sPetition,theCourtcalledthecasefororalargumenton18February
2004.46Attheoralargument,attendedbythecounselforPhilcemcorandSouthernCrossandtheOfficeofthe
Solicitor General, the Court simplified the issues in this wise: (i) whether the Decision of the DTI Secretary is
appealabletotheCTAortheCourtofAppeals(ii)assumingthattheCourtofAppealshasjurisdiction,whetherits
Decisionisinaccordancewithlawand,(iii)whetheraTemporaryRestrainingOrderiswarranted.47
During the oral arguments, counsel for Southern Cross manifested that due to the imposition of the general
safeguardmeasures,SouthernCrosswasforcedtoceaseoperationsinthePhilippinesinNovemberof2003.48
ProprietyoftheTemporaryRestrainingOrder
BeforethemeritsofthePetition,abriefcommentonSouthernCross'sapplicationforprovisionalrelief.Itsought
to enjoin the DTI Secretary from enforcing the definitive safeguard measure he imposed in his 25 June 2003
Decision. The Court did not grant the provisional relief for it would be tantamount to enjoining the collection of
taxes, a peremptory judicial act which is traditionally frowned upon,49 unless there is a clear statutory basis for
it.50Inthatregard,Section218oftheTaxReformActof1997prohibitsanycourtfromgrantinganinjunctionto
restrainthecollectionofanynationalinternalrevenuetax,feeorchargeimposedbytheinternalrevenuecode.51
A similar philosophy is expressed by Section 29 of the SMA, which states that the filing of a petition for review
beforetheCTAdoesnotstop,suspend,orotherwisetolltheimpositionorcollectionoftheappropriatetariffduties
or the adoption of other appropriate safeguard measures.52 This evinces a clear legislative intent that the
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imposition of safeguard measures, despite the availability of judicial review, should not be enjoined
notwithstandinganytimelyappealoftheimposition.
TheForumShoppingIssue
In the same breath, we are not convinced that the allegation of forumshopping has been duly proven, or that
sanctionshouldbefalluponSouthernCrossanditscounsel.ThestandardbySection5,Rule7ofthe1997Rules
ofCivilProcedureinorderthatsanctionmaybehadisthat"theactsofthepartyorhiscounselclearlyconstitute
willfulanddeliberateforumshopping."53Thestandardimpliesamaliciousintenttosubvertproceduralrules,and
suchstateofmindisnotevidentinthiscase.
TheJurisdictionalIssue
Ontothemeritsofthepresentpetition.
InitsassailedDecision,theCourtofAppeals,afterassertingonlyinbriefthatithadjurisdictionoverPhilcemcor's
Petition,discussedtheissueofwhetherornottheDTISecretaryisboundtoadoptthenegativerecommendation
oftheTariffCommissionontheapplicationforsafeguardmeasure.TheCourtofAppealsmaintainedthatithad
jurisdictionoverthepetition,asitallegedgraveabuseofdiscretiononthepartoftheDTISecretary,thus:
A perusal of the instant petition reveals allegations of grave abuse of discretion on the part of the DTI
SecretaryinrenderingtheassailedApril5,2002Decisionwhereinitwasruledthathehadnoalternative
buttoabidebythefindingsoftheCommissiononthematterofsafeguardmeasuresforthelocalcement
industry.Abuseofdiscretionisadmittedlywithintheambitofcertiorari.
Grave abuse of discretion implies such capricious and whimsical exercise of judgment as is equivalent to
lack of jurisdiction. It is alleged that, in the assailed Decision, the DTI Secretary gravely abused his
discretioninwantonlyevadingtodischargehisdutytorenderanindependentdeterminationordecisionin
imposingadefinitivesafeguardmeasure.54
WedonotdoubtthattheCourtofAppeals'certioraripowersextendtocorrectinggraveabuseofdiscretiononthe
part of an officer exercising judicial or quasijudicial functions.55 However, the special civil action of certiorari is
available only when there is no plain, speedy and adequate remedy in the ordinary course of law.56 Southern
Crossreliesonthislimitation,stressingthatSection29oftheSMAisaplain,speedyandadequateremedyinthe
ordinarycourseoflawwhichPhilcemcordidnotavailof.TheSectionreads:
Section 29. Judicial Review. Any interested party who is adversely affected by the ruling of the
SecretaryinconnectionwiththeimpositionofasafeguardmeasuremayfilewiththeCTA,apetition
for review of such ruling within thirty (30) days from receipt thereof. Provided, however, that the filing of
suchpetitionforreviewshallnotinanywaystop,suspendorotherwisetolltheimpositionorcollectionof
theappropriatetariffdutiesortheadoptionofotherappropriatesafeguardmeasures,asthecasemaybe.
The petition for review shall comply with the same requirements and shall follow the same rules of
procedureandshallbesubjecttothesamedispositionasinappealsinconnectionwithadverserulingson
taxmatterstotheCourtofAppeals.57(Emphasissupplied)
ItisnotdifficulttodivinewhythelegislaturesingledouttheCTAasthecourtwithjurisdictiontoreviewtherulingof
theDTISecretaryinconnectionwiththeimpositionofasafeguardmeasure.TheCourthaslongrecognizedthe
legislativedeterminationtovestsoleandexclusivejurisdictiononmattersinvolvinginternalrevenueandcustoms
duties to such a specialized court.58 By the very nature of its function, the CTA is dedicated exclusively to the
studyandconsiderationoftaxproblemsandhasnecessarilydevelopedanexpertiseonthesubject.59
At the same time, since the CTA is a court of limited jurisdiction, its jurisdiction to take cognizance of a case
shouldbeclearlyconferredandshouldnotbedeemedtoexistonmereimplication.60Concededly,Rep.ActNo.
1125, the statute creating the CTA, does not extend to it the power to review decisions of the DTI Secretary in
connectionwiththeimpositionofsafeguardmeasures.61Ofcourse,atthattimewhichwasbeforetheadventof
tradeliberalizationthenotionofsafeguardmeasuresorsafetynetswasnotyetinvogue.
Undeniably,however,theSMAexpandedthejurisdictionoftheCTAbyincludingreviewoftherulingsoftheDTI
Secretary in connection with the imposition of safeguard measures. However, Philcemcor and the public
respondents agree that the CTA has appellate jurisdiction over a decision of the DTI Secretary imposing a
safeguardmeasure,butnotwhenhisrulingisnottoimposesuchmeasure.
In a related development, Rep. Act No. 9282, enacted on 30 March 2004, expressly vests unto the CTA
jurisdictionover"[d]ecisionsoftheSecretaryofTradeandIndustry,incaseofnonagriculturalproduct,commodity
orarticlexxxinvolvingxxxsafeguardmeasuresunderRepublicActNo.8800,whereeitherpartymayappeal
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thedecisiontoimposeornottoimposesaidduties."62HadRep.ActNo.9282alreadybeeninforceatthe
beginningoftheincidentssubjectofthiscase,therewouldhavebeennoneedtomakeanydeeperinquiryasto
theextentoftheCTA'sjurisdiction.ButasRep.ActNo.9282cannotbeappliedretroactivelytothepresentcase,
thequestionofwhethersuchjurisdictionextendstoadecisionnottoimposeasafeguardmeasurewillhavetobe
settledprincipallyonthebasisoftheSMA.
UnderSection29oftheSMA,therearethreerequisitestoenabletheCTAtoacquirejurisdictionoverthepetition
forreviewcontemplatedtherein:(i)theremustbearulingbytheDTISecretary(ii)thepetitionmustbefiledby
aninterestedpartyadverselyaffectedbytherulingand(iii)suchrulingmustbeinconnectionwiththeimposition
ofasafeguardmeasure.Thefirsttworequisitesareclearlypresent.Thethirdrequisitedeservescloserscrutiny.
Contrary to the stance of the public respondents and Philcemcor, in this case where the DTI Secretary decides
nottoimposeasafeguardmeasure,itistheCTAwhichhasjurisdictiontoreviewhisdecision.Thereasonsareas
follows:
First.Splitjurisdictionisabhorred.
Essentially,respondents'positionisthatjudicialreviewoftheDTISecretary'srulingisexercisedbytwodifferent
courts, depending on whether or not it imposes a safeguard measure, and in either case the court exercising
jurisdictiondoessototheexclusionoftheother.Thus,iftheDTIdecisioninvolvestheimpositionofasafeguard
measureitistheCTAwhichhasappellatejurisdictionotherwise,itistheCourtofAppeals.Suchsetupisasnovel
andunusualasitiscumbersomeandunwise.Essentially,respondentsadvocatethatSection29oftheSMAhas
establishedsplitappellatejurisdictionoverrulingsoftheDTISecretaryontheimpositionofsafeguardmeasure.
This interpretation cannot be favored, as the Court has consistently refused to sanction split jurisdiction.63 The
poweroftheDTISecretarytoadoptorwithholdasafeguardmeasureemanatesfromthesamestatutorysource,
anditbogglesthemindwhytheappealmodalitywouldbesuchthatoneappellatecourtisqualifiedifwhatistobe
reviewed is a positive determination, and it is not if what is appealed is a negative determination. In deciding
whether or not to impose a safeguard measure, provisional or general, the DTI Secretary would be evaluating
onlyonebodyoffactsandapplyingthemtoonesetoflaws.Thereviewingtribunalwillbecalledupontoexamine
thesamefactsandthesamelaws,whetherornotthedeterminationispositiveornegative.
In short, if we were to rule for respondents we would be confirming the exercise by two judicial bodies of
jurisdiction over basically the same subject matterprecisely the splitjurisdiction situation which is anathema to
the orderly administration of justice.64 The Court cannot accept that such was the legislative motive especially
consideringthatthelawexpresslyconfersontheCTA,thetribunalwiththespecializedcompetenceovertaxand
tariffmatters,theroleofjudicialreviewwithoutmentionofanyothercourtthatmayexercisecorollaryorancillary
jurisdiction in relation to the SMA. The provision refers to the Court of Appeals but only in regard to procedural
rulesanddispositionsofappealsfromtheCTAtotheCourtofAppeals.65
TheprincipleenunciatedinTejadav.HomesteadPropertyCorporation66isapplicabletothecaseatbar:
The Court agrees with the observation of the [that] when an administrative agency or body is conferred
quasijudicialfunctions,allcontroversiesrelatingtothesubjectmatterpertainingtoitsspecialization
are deemed to be included within the jurisdiction of said administrative agency or body. Split
jurisdictionisnotfavored.67
Second.TheinterpretationoftheprovisionsoftheSMAfavorsvestinguntrammeledappellatejurisdictiononthe
CTA.
AplainreadingofSection29oftheSMArevealsthatCongressdidnotexpresslybartheCTAfromreviewinga
negative determination by the DTI Secretary nor conferred on the Court of Appeals such review authority.
Respondentsnote,ontheotherhand,thatneitherdidthelawexpresslygranttotheCTAthepowertoreviewa
negativedetermination.However,underthecleartextofthelaw,theCTAisvestedwithjurisdictiontoreviewthe
ruling of the DTI Secretary "in connection with the imposition of a safeguard measure." Had the law been
couched instead to incorporate the phrase "the ruling imposing a safeguard measure," then respondent's claim
would have indisputable merit. Undoubtedly, the phrase "in connection with" not only qualifies but clarifies the
succeedingphrase"impositionofasafeguardmeasure."Asexpoundedlater,thephrasealsoencompassesthe
oppositeorconverserulingwhichisthenonimpositionofasafeguardmeasure.
IntheAmericancaseofShawv.DeltaAirLines,Inc.,68 the United States Supreme Court, in interpreting a key

provisionoftheEmployeeRetirementSecurityActof1974,construedthephrase"relatesto"initsnormalsense
whichisthesameas"ifithasconnectionwithorreferenceto."69Thereisnoseriousdisputethatthephrase"in
connectionwith"issynonymousto"relatesto"or"referenceto,"andthatallthreephrasesarebroadlyexpansive.
Thisisaffirmednotjustbyjurisprudentialfiat,butalsotheacquiredconnotativemeaningof"inconnectionwith"in
common parlance. Consequently, with the use of the phrase "in connection with," Section 29 allows the CTA to
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reviewnotonlytherulingimposingasafeguardmeasure,butallotherrulingsrelatedorhavereferencetothe
applicationforsuchmeasure.
Now,letusdeterminethemaximumscopeandreachofthephrase"inconnectionwith"asusedinSection29of
theSMA.Aliteralistreadingorlinguisticsurveymaynotsatisfy.EventheUSSupremeCourtinNewYorkState
Blue Cross Plans v. Travelers Ins.70 conceded that the phrases "relate to" or "in connection with" may be
extended to the farthest stretch of indeterminacy for, universally, relations or connections are infinite and stop
nowhere.71 Thus, in the case the US High Court, examining the same phrase of the same provision of law
involved in Shaw, resorted to looking at the statute and its objectives as the alternative to an "uncritical
literalism."72 A similar inquiry into the other provisions of the SMA is in order to determine the scope of review
accordedthereintotheCTA.73
TheauthoritytodecideonthesafeguardmeasureisvestedintheDTISecretaryinthecaseofnonagricultural
products,andintheSecretaryoftheDepartmentofAgricultureinthecaseofagriculturalproducts.74Section29
islikewiseexplicitthatonlytherulingsoftheDTISecretaryortheAgricultureSecretarymaybereviewedbythe
CTA.75 Thus, the acts of other bodies that were granted some powers by the SMA, such as the Tariff
Commission,arenotsubjecttodirectreviewbytheCTA.
Under the SMA, the Department Secretary concerned is authorized to decide on several matters. Within thirty
(30) days from receipt of a petition seeking the imposition of a safeguard measure, or from the date he made
motuproprioinitiation,theSecretaryshallmakeapreliminarydeterminationonwhethertheincreasedimportsof
theproductunderconsiderationsubstantiallycauseorthreatentocauseseriousinjurytothedomesticindustry.76
Such ruling is crucial since only upon the Secretary's positive preliminary determination that a threat to the
domesticindustryexistsshallthematterbereferredtotheTariffCommissionforformalinvestigation,thistime,to
determine whether the general safeguard measure should be imposed or not.77 Pursuant to a positive
preliminarydetermination,theSecretarymayalsodecidethattheimpositionofaprovisionalsafeguardmeasure
wouldbewarrantedunderSection8oftheSMA.78TheSecretaryisalsoauthorizedtodecide,afterreceiptofthe
report of the Tariff Commission, whether or not to impose the general safeguard measure, and if in the
affirmative,whatgeneralsafeguardmeasuresshouldbeapplied.79Evenafterthegeneralsafeguardmeasureis
imposed, the Secretary is empowered to extend the safeguard measure,80 or terminate, reduce or modify his
previousrulingsonthegeneralsafeguardmeasure.81
WiththeexplicitgrantofcertainpowersinvolvingsafeguardmeasuresbytheSMAontheDTISecretary,itfollows
thatheisempoweredtoruleonseveralissues.Thesearetheissueswhichariseinconnectionwith,orinrelation
to, the imposition of a safeguard measure. They may arise at different stages the preliminary investigation
stage,thepostformalinvestigationstage,orthepostsafeguardmeasurestageyetalltheseissuesdobecome
ripeforresolutionbecauseaninitiatoryactionhasbeentakenseekingtheimpositionofasafeguardmeasure.It
is the initiatory action for the imposition of a safeguard measure that sets the wheels in motion, allowing the
Secretarytomakesuccessiverulings,beginningwiththepreliminarydetermination.
Clearly,therefore,thescopeandreachofthephrase"inconnectionwith,"asintendedbyCongress,pertaintoall
rulings of the DTI Secretary or Agriculture Secretary which arise from the time an application or motu proprio
initiationfortheimpositionofasafeguardmeasureistaken.Indeed,theincidentswhichrequireresolutioncome
to the fore only because there is an initial application or action seeking the imposition of a safeguard measure.
Fromthelegislativestandpoint,itwasamatterofsenseandpracticalitytolumpupthequestionsrelatedtothe
initiatoryapplicationoractionforsafeguardmeasureandtoassignonlyonecourtandthatistheCTAtoinitially
review all the rulings related to such initiatory application or action. Both directions Congress put in place by
employingthephrase"inconnectionwith"inthelaw.
GiventherelativeexpanseofdecisionssubjecttojudicialreviewbytheCTAunderSection29,wedonotdoubt
thatanegativerulingrefusingtoimposeasafeguardmeasurefallswithinthescopeofitsjurisdiction.Onaliteral
level,suchnegativerulingis"arulingoftheSecretaryinconnectionwiththeimpositionofasafeguardmeasure,"
asitisoneofthepossibleoutcomesthatmayresultfromtheinitialapplicationoractionforasafeguardmeasure.
Onamorecriticallevel,therulingsoftheDTISecretaryinconnectionwithasafeguardmeasure,howeverdiverse
theoutcomemaybe,arisefromthesamegrantofjurisdictionontheDTISecretarybytheSMA.82Therefusalby
the DTI Secretary to grant a safeguard measure involves the same grant of authority, the same statutory
prescriptions,andthesamedegreeofdiscretionastheimpositionbytheDTISecretaryofasafeguardmeasure.
The position of the respondents is one of "uncritical literalism"83 incongruent with the animus of the law.
Moreover, a fundamentalist approach to Section 29 is not warranted, considering the absurdity of the
consequences.
Third.InterpretatioTalisInAmbiguisSemperFiendaEst,UtEviturInconveniensEtAbsurdum.84
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Even assuming arguendo that Section 29 has not expressly granted the CTA jurisdiction to review a negative
rulingoftheDTISecretary,theCourtisprecludedfromfavoringaninterpretationthatwouldcauseinconvenience
andabsurdity.85 Adopting the respondents' position favoring the CTA's minimal jurisdiction would unnecessarily
leadtoillogicalandonerousresults.
Indeed, it is illiberal to assume that Congress had intended to provide appellate relief to rulings imposing a
safeguardmeasurebutnottothosedecliningtoimposethemeasure.Respondentsmightarguethattherightto
relieffromanegativerulingisnotlostsincetheapplicantcould,asPhilcemcordid,questionsuchrulingthrougha
special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure, in lieu of an appeal to the
CTA.Yetthesetworeliefsareofdifferingnaturesandgravamen.Whileanappealmaybepredicatedonerrorsof
fact or errors of law, a special civil action for certiorari is grounded on grave abuse of discretion or lack of or
excessofjurisdictiononthepartofthedecider.Foraspecialcivilactionforcertioraritosucceed,itisnotenough
thatthequestionedactoftherespondentiswrong.AstheCourtclarifiedinSempiov.CourtofAppeals:
Atribunal,boardorofficeractswithoutjurisdictionifit/hedoesnothavethelegalpowertodeterminethe
case. There is excess of jurisdiction where, being clothed with the power to determine the case, the
tribunal, board or officer oversteps its/his authority as determined by law. And there is grave abuse of
discretionwherethetribunal,boardorofficeractsinacapricious,whimsical,arbitraryordespoticmanner
in the exercise of his judgment as to be said to be equivalent to lack of jurisdiction. Certiorari is often
resorted to in order to correct errors of jurisdiction. Where the error is one of law or of fact, which is a
mistakeofjudgment,appealistheremedy.86
ItisveryconceivablethattheDTISecretary,afterdeliberatethoughtandcarefulevaluationoftheevidence,may
eithermakeanegativepreliminarydeterminationasheissoempoweredunderSection7oftheSMA,orrefuseto
adoptthedefinitivesafeguardmeasureunderSection13ofthesamelaw.Adoptingtherespondents'theory,this
negative ruling is susceptible to reversal only through a special civil action for certiorari, thus depriving the
affectedpartythechancetoelevatetherulingonappealontherudimentarygroundsoferrorsinfactorinlaw.
Instead,anddespitewhateverindicationsthattheDTISecretaryactedwithmeasureandwithintheboundsofhis
jurisdiction are, the aggrieved party will be forced to resort to a gymnastic exercise, contorting the straight and
narrowinanefforttodiscombobulatethecourtsintobelievingthatwhatwaswithinwasactuallybeyondandwhat
was studied and deliberate actually whimsical and capricious. What then would be the remedy of the party
aggrieved by a negative ruling that simply erred in interpreting the facts or the law? It certainly cannot be the
specialcivilactionforcertiorari,forastheCourtheldinSilveriov.CourtofAppeals:"Certiorariisaremedynarrow
initsscopeandinflexibleinitscharacter.Itisnotageneralutilitytoolinthelegalworkshop."87
Fortunately,thistheoreticalquandaryneednotcometopass.Section29oftheSMAiswordedinsuchawaythat
itplacesundertheCTA'sjudicialreviewallrulingsoftheDTISecretary,whichareconnectedwiththeimposition
of a safeguard measure. This is sound and proper in light of the specialized jurisdiction of the CTA over tax
matters.Inthesamewaythataquestionofwhethertotaxornottotaxisproperlyataxmatter,soisthequestion
ofwhethertoimposeornottoimposeadefinitivesafeguardmeasure.
Onanothernote,thesecondparagraphofSection29similarlyrevealsthelegislativeintentthatrulingsoftheDTI
SecretaryoversafeguardmeasuresshouldfirstbereviewedbytheCTAandnottheCourtofAppeals.Itreads:
The petition for review shall comply with the same requirements and shall follow the same rules of
procedureandshallbesubjecttothesamedispositionasinappealsinconnectionwithadverserulingson
taxmatterstotheCourtofAppeals.
ThisistheonlypassageintheSMAinwhichtheCourtofAppealsismentioned.TheexpresswishofCongressis
thatthepetitionconformtotherequirementsandprocedureunderRule43oftheRulesofCivilProcedure.Since
CongressmandatedthattheformandprocedureadoptedbeanalogoustoareviewofaCTArulingbytheCourt
of Appeals, the legislative contemplation could not have been that the appeal be directly taken to the Court of
Appeals.
IssueofBindingEffectofTariff
Commission'sFactualDetermination
onDTISecretary.
ThenextissueforresolutioniswhetherthefactualdeterminationmadebytheTariffCommissionundertheSMA
isbindingontheDTISecretary.Otherwisestated,thequestioniswhethertheDTISecretarymayimposegeneral
safeguardmeasuresintheabsenceofapositivefinaldeterminationbytheTariffCommission.
TheCourtofAppealsrelieduponSection13oftheSMAinrulingthatthefindingsoftheTariffCommissiondonot
necessarilyconstituteafinaldecision.Section13detailstheprocedurefortheadoptionofasafeguardmeasure,
as well as the steps to be taken in case there is a negative final determination. The implication of the Court of
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Appeals'holdingisthattheDTISecretarymayadoptadefinitivesafeguardmeasure,notwithstandinganegative
determinationmadebytheTariffCommission.
Undoubtedly, Section 13 prescribes certain limitations and restrictions before general safeguard measures may
be imposed. However, the most fundamental restriction on the DTI Secretary's power in that respect is
containedinSection5oftheSMAthatthereshouldfirstbeapositivefinaldeterminationoftheTariff
CommissionwhichtheCourtofAppealscuriouslyallbutignored.Section5reads:
Sec. 5. Conditions for the Application of General Safeguard Measures. The Secretary shall apply a
general safeguard measure upon a positive final determination of the [Tariff] Commission that a
product is being imported into the country in increased quantities, whether absolute or relative to the
domestic production, as to be a substantial cause of serious injury or threat thereof to the domestic
industry however, in the case of nonagricultural products, the Secretary shall first establish that the
applicationofsuchsafeguardmeasureswillbeinthepublicinterest.(emphasissupplied)
TheplainmeaningofSection5showsthatitistheTariffCommissionthathasthepowertomakea"positivefinal
determination."ThispowerlodgedintheTariffCommission,mustbedistinguishedfromthepowertoimposethe
generalsafeguardmeasurewhichisproperlyvestedontheDTISecretary.88
All in all, there are two condition precedents that must be satisfied before the DTI Secretary may impose a
general safeguard measure on grey Portland cement. First, there must be a positive final determination by the
TariffCommissionthataproductisbeingimportedintothecountryinincreasedquantities(whetherabsoluteor
relativetodomesticproduction),astobeasubstantialcauseofseriousinjuryorthreattothedomesticindustry.
Second, in the case of nonagricultural products the Secretary must establish that the application of such
safeguardmeasuresisinthepublicinterest.89 As Southern Cross argues, Section 5 is quite clearcut, and it is
impossibletofinagleadifferentconclusioneventhroughoverarchingmethodsofstatutoryconstruction.Thereis
nosafernorbettersettledcanonofinterpretationthatwhenlanguageisclearandunambiguousitmustbeheldto
meanwhatitplainlyexpresses:90InthequotablewordsofanillustriousmemberofthisCourt,thus:
[I]fastatuteisclear,plainandfreefromambiguity,itmustbegivenitsliteralmeaningandappliedwithout
attempted interpretation. The verba legis or plain meaning rule rests on the valid presumption that the
wordsemployedbythelegislatureinastatutecorrectlyexpressitsintentorwillandprecludethecourtfrom
construingitdifferently.Thelegislatureispresumedtoknowthemeaningofthewords,tohaveusedwords
advisedly,andtohaveexpresseditsintentbytheuseofsuchwordsasarefoundinthestatute.91
Moreover,Rule5oftheImplementingRulesandRegulationsoftheSMA,92whichinterpretsSection5ofthelaw,
likewiserequiresapositivefinaldeterminationonthepartoftheTariffCommissionbeforetheapplicationofthe
generalsafeguardmeasure.
TheSMAestablishesadistinctallocationoffunctionsbetweentheTariffCommissionandtheDTISecretary.The
plain meaning of Section 5 shows that it is the Tariff Commission that has the power to make a "positive final
determination." This power, which belongs to the Tariff Commission, must be distinguished from the power to
impose general safeguard measure properly vested on the DTI Secretary. The distinction is vital, as a "positive
finaldetermination"clearlyantecedes,asaconditionprecedent,theimpositionofageneralsafeguardmeasure.
At the same time, a positive final determination does not necessarily result in the imposition of a general
safeguard measure. Under Section 5, notwithstanding the positive final determination of the Tariff Commission,
the DTI Secretary is tasked to decide whether or not that the application of the safeguard measures is in the
publicinterest.
It is also clear from Section 5 of the SMA that the positive final determination to be undertaken by the Tariff
Commissiondoesnotentailameregatheringofstatisticaldata.Inordertoarriveatsuchdetermination,ithasto
establishcausallinkagesfromthestatisticsthatitcompilesandevaluates:afterfindingthereisanimportationin
increased quantities of the product in question, that such importation is a substantial cause of serious threat or
injurytothedomesticindustry.
TheCourtofAppealsreliesheavilyonthelegislativerecordofacongressionaldebateduringdeliberationsonthe
SMA to assert a purported legislative intent that the findings of the Tariff Commission do not bind the DTI
Secretary.93Yetasexplainedearlier,theplainmeaningofSection5emphasizesthatonlyiftheTariffCommission
renders a positive determination could the DTI Secretary impose a safeguard measure. Resort to the
congressional records to ascertain legislative intent is not warranted if a statute is clear, plain and free from
ambiguity.Thelegislatureispresumedtoknowthemeaningofthewords,tohaveusedwordsadvisedly,andto
haveexpresseditsintentbytheuseofsuchwordsasarefoundinthestatute.94
Indeed,thelegislativerecord,ifatalltobeavailedof,shouldbeapproachedwithextremecaution,aslegislative
debatesandproceedingsarepowerlesstovarythetermsofthestatutewhenthemeaningisclear.95Ourholding
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inCivilLibertiesUnionv.ExecutiveSecretary96on the resort to deliberations of the constitutional convention to

interprettheConstitutionislikewiseappropriateinascertainingstatutoryintent:
While it is permissible in this jurisdiction to consult the debates and proceedings of the constitutional
conventioninordertoarriveatthereasonandpurposeoftheresultingConstitution,resorttheretomaybe
had only when other guides fail as said proceedings are powerless to vary the terms of the Constitution
whenthemeaningisclear.Debatesintheconstitutionalconvention"areofvalueasshowingtheviewsof
the individual members, and as indicating the reasons for their votes, but they give us no light as to the
views of the large majority who did not talk xxx. We think it safer to construe the constitution from what
appearsuponitsface."97
Moreover, it is easy to selectively cite passages, sometimes out of their proper context, in order to assert a
misleadinginterpretation.Theeffectcanbedangerous.Minorityorsolitaryviews,anecdotalruminations,oreven
theoccasionalcrudewitticisms,mayimproperlyacquirethemantleoflegislativeintentbythesolevirtueoftheir
publication in the authoritative congressional record. Hence, resort to legislative deliberations is allowable when
thestatuteiscraftedinsuchamannerastoleaveroomfordoubtontherealintentofthelegislature.
Section 5 plainly evinces legislative intent to restrict the DTI Secretary's power to impose a general safeguard
measurebypreconditioningsuchimpositiononapositivedeterminationbytheTariffCommission.Suchlegislative
intentshouldbegivenfullforceandeffect,astheexecutivepowertoimposedefinitivesafeguardmeasuresisbut
adelegatedpowerthepoweroftaxation,bynatureandbycommandofthefundamentallaw,beingapreserve
ofthelegislature.98Section28(2),ArticleVIofthe1987Constitutionconfirmsthedelegationoflegislativepower,
yet ensures that the prerogative of Congress to impose limitations and restrictions on the executive exercise of
thispower:
The Congress may, by law, authorize the President to fix within specified limits, and subject to such
limitationsandrestrictionsasitmayimpose,tariffrates,importandexportquotas,tonnageandwharfage
dues, and other duties or imposts within the framework of the national development program of the
Government.99
ThesafeguardmeasureswhichtheDTISecretarymayimposeundertheSMAmaytakethefollowingvariations,
towit:(a)anincreasein,orimpositionofanydutyontheimportedproduct(b)adecreaseinortheimpositionof
atariffratequotaontheproduct(c)amodificationorimpositionofanyquantitativerestrictionontheimportation
oftheproductintothePhilippines(d)oneormoreappropriateadjustmentmeasures,includingtheprovisionof
tradeadjustmentassistanceand(e)anycombinationoftheabovedescribedactions.Exceptfortheprovisionof
tradeadjustmentassistance,themeasuresenumeratedbytheSMAareessentiallyimposts,whichpreciselyare
thesubjectofdelegationunderSection28(2),ArticleVIofthe1987Constitution.100
ThisdelegationofthetaxationpowerbythelegislativetotheexecutiveisauthorizedbytheConstitutionitself.101
Atthesametime,theConstitutionalsograntsthedelegatingauthority(Congress)therighttoimposerestrictions
andlimitationsonthetaxationpowerdelegatedtothePresident.102 The restrictions and limitations imposed by
Congresstakeonthemantleofaconstitutionalcommand,whichtheexecutivebranchisobligedtoobserve.
TheSMAempoweredtheDTISecretary,asalteregoofthePresident,103toimposedefinitivegeneralsafeguard
measures, which basically are tariff imposts of the type spoken of in the Constitution. However, the law did not
grant him full, uninhibited discretion to impose such measures. The DTI Secretary authority is derived from the
SMAitdoesnotflowfromanyinherentexecutivepower.Thus,thelimitationsimposedbySection5areabsolute,
warrantedastheyarebyaconstitutionalfiat.104
Philcemcorcitesour1912rulinginLambv.Phipps105toassertthattheDTISecretary,havingthefinaldecision
on the safeguard measure, has the power to evaluate the findings of the Tariff Commission and make an
independentjudgmentthereon.Giventheconstitutionalandstatutorylimitationsgoverningthepresentcase,the
citationismisplaced.Lambpertained to the discretion of the Insular Auditor of the Philippine Islands, whom, as
theCourtrecognized,"[t]hestatutesoftheUnitedStatesrequire[d]xxxtoexercisehisjudgmentuponthelegality
xxx[of]provisionsoflawandresolutionsofCongressprovidingforthepaymentofmoney,themeansofprocuring
testimonyuponwhichhemayact."106
ThusinLamb,whiletheCourtrecognizedthewidelatitudeofdiscretionthatmayhavebeenvestedontheInsular
Auditor,italsorecognizedthatsuchlatitudeflowedfrom,andisconsequentlylimitedby,statutorygrant.However,
inthiscase,theprovisionoftheConstitutioninpointexpresslyrecognizestheauthorityofCongresstoprescribe
limitations in the case of tariffs, export/import quotas and other such safeguard measures. Thus, the broad
discretiongrantedtotheInsularAuditorofthePhilippineIslandscannotbeanalogoustothediscretionoftheDTI
SecretarywhichiscircumscribedbySection5oftheSMA.
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For that matter, Cario v. Commissioner on Human Rights,107 likewise cited by Philcemcor, is also inapplicable
owing to the different statutory regimes prevailing over that case and the present petition. In Cario, the Court
ruled that the constitutional power of the Commission on Human Rights (CHR) to investigate human rights'
violationsdidnotextendtoadjudicatingclaimsonthemerits.108PhilcemcorclaimsthatthefunctionsoftheTariff
Commissionbeing"onlyinvestigatory,"itcouldneitherdecidenoradjudicate.109
TheapplicablelawgoverningtheissueinCarioisSection18,ArticleXIIIoftheConstitution,whichdelineatesthe
powers and functions of the CHR. The provision does not vest on the CHR the power to adjudicate cases, but
onlytoinvestigateallformsofhumanrightsviolations.110Yet,withoutmodifyingthethoroughdisquisitionofthe
CourtinCarioonthegenerallimitationsontheinvestigatorypower,theprecedentisinapplicablebecauseofthe
differenceintheinvolvedstatutoryframeworks.TheConstitutiondoesnotreposebindingeffectontheresultsof
theCHR'sinvestigation.111Ontheotherhand,throughSection5oftheSMAandundertheauthorityofSection
28(2),ArticleVIoftheConstitution,CongressdidintendtobindtheDTISecretarytothedeterminationmadeby
the Tariff Commission.112 It is of no consequence that such determination results from the exercise of
investigatorypowersbytheTariffCommissionsinceCongressiswellwithinitsconstitutionalmandatetolimitthe
authorityoftheDTISecretarytoimposesafeguardmeasuresinthemannerthatitseesfit.
TheCourtofAppealsandPhilcemcoralsorelyonSection13oftheSMAandRule13oftheSMA'sImplementing
RulesinsupportoftheviewthattheDTISecretarymaydecideindependentlyofthedeterminationmadebythe
TariffCommission.Admittedly,therearecertaininfelicitiesinthelanguageofSection13andRule13.Butreliance
shouldnotbeplacedonthetextualimprecisions.Rather,Section13andRule13mustbeviewedinlightofthe
fundamentalprescriptionimposedbySection5.113
Section13oftheSMAlaysdowntheproceduretobefollowedaftertheTariffCommissionrendersitsreport.The
provisionreadsinfull:
SEC. 13. Adoption of Definitive Measures. Upon its positive determination, the Commission shall
recommendtotheSecretaryanappropriatedefinitivemeasure,intheformof:
(a)Anincreasein,orimpositionof,anydutyontheimportedproduct
(b)Adecreaseinortheimpositionofatariffratequota(MAV)ontheproduct
(c) A modification or imposition of any quantitative restriction on the importation of the product into the
Philippines
(d)Oneormoreappropriateadjustmentmeasures,includingtheprovisionoftradeadjustmentassistance
(e)Anycombinationofactionsdescribedinsubparagraphs(a)to(d).
TheCommissionmayalsorecommendotheractions,includingtheinitiationofinternationalnegotiationsto
address the underlying cause of the increase of imports of the product, to alleviate the injury or threat
thereoftothedomesticindustry,andtofacilitatepositiveadjustmenttoimportcompetition.
Thegeneralsafeguardmeasureshallbelimitedtotheextentofredressingorpreventingtheinjuryandto
facilitate adjustment by the domestic industry from the adverse effects directly attributed to the increased
imports:Provided,however,That when quantitative import restrictions are used, such measures shall not
reducethequantityofimportsbelowtheaverageimportsforthethree(3)precedingrepresentativeyears,
unlessclearjustificationisgiventhatadifferentlevelisnecessarytopreventorremedyaseriousinjury.
Ageneralsafeguardmeasureshallnotbeappliedtoaproductoriginatingfromadevelopingcountryifits
shareoftotalimportsoftheproductislessthanthreepercent(3%):Provided,however, That developing
countrieswithlessthanthreepercent(3%)sharecollectivelyaccountfornotmorethanninepercent(9%)
ofthetotalimports.
Thedecisionimposingageneralsafeguardmeasure,thedurationofwhichismorethanone(1)year,shall
bereviewedatregularintervalsforpurposesofliberalizingorreducingitsintensity.Theindustrybenefiting
fromtheapplicationofageneralsafeguardmeasureshallberequiredtoshowpositiveadjustmentwithin
theallowableperiod.Ageneralsafeguardmeasureshallbeterminatedwherethebenefitingindustryfails
toshowanyimprovement,asmaybedeterminedbytheSecretary.
The Secretary shall issue a written instruction to the heads of the concerned government agencies to
implement the appropriate general safeguard measure as determined by the Secretary within fifteen (15)
daysfromreceiptofthereport.
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In the event of a negative final determination, or if the cash bond is in excess of the definitive safeguard
duty assessed, the Secretary shall immediately issue, through the Secretary of Finance, a written
instruction to the Commissioner of Customs, authorizing the return of the cash bond or the remainder
thereof,asthecasemaybe,previouslycollectedasprovisionalgeneralsafeguardmeasurewithinten(10)
daysfromthedateafinaldecisionhasbeenmade:Provided,Thatthegovernmentshallnotbeliablefor
anyinterestontheamounttobereturned.TheSecretaryshallnotacceptforconsiderationanotherpetition
fromthesameindustry,withrespecttothesameimportsoftheproductunderconsiderationwithinone(1)
yearafterthedateofrenderingsuchadecision.
Whenthedefinitivesafeguardmeasureisintheformofatariffincrease,suchincreaseshallnotbesubject
orlimitedtothemaximumlevelsoftariffassetforthinSection401(a)oftheTariffandCustomsCodeofthe
Philippines.
To better comprehend Section 13, note must be taken of the distinction between the investigatory and
recommendatoryfunctionsoftheTariffCommissionundertheSMA.
The word "determination," as used in the SMA, pertains to the factual findings on whether there are increased
imports into the country of the product under consideration, and on whether such increased imports are a
substantial cause of serious injury or threaten to substantially cause serious injury to the domestic industry.114
The SMA explicitly authorizes the DTI Secretary to make a preliminary determination,115 and the Tariff
Commission to make the final determination.116 The distinction is fundamental, as these functions are not
interchangeable. The Tariff Commission makes its determination only after a formal investigation process, with
suchinvestigationinitiatedonlyifthereisapositivepreliminarydeterminationbytheDTISecretaryunderSection
7oftheSMA.117Ontheotherhand,theDTISecretarymayimposedefinitivesafeguardmeasureonlyifthereisa
positivefinaldeterminationmadebytheTariffCommission.118
In contrast, a "recommendation" is a suggested remedial measure submitted by the Tariff Commission under
Section13aftermakingapositivefinaldeterminationinaccordancewithSection5.TheTariffCommissionisnot
empoweredtomakearecommendationabsentapositivefinaldeterminationonitspart.119UnderSection13,the
Tariff Commission is required to recommend to the [DTI] Secretary an "appropriate definitive measure."120The
Tariff Commission "may also recommend other actions, including the initiation of international negotiations to
addresstheunderlyingcauseoftheincreaseofimportsoftheproducts,toalleviatetheinjuryorthreatthereofto
thedomesticindustryandtofacilitatepositiveadjustmenttoimportcompetition."121
The recommendations of the Tariff Commission, as rendered under Section 13, are not obligatory on the DTI
Secretary. Nothing in the SMA mandates the DTI Secretary to adopt the recommendations made by the Tariff
Commission. In fact, the SMA requires that the DTI Secretary establish that the application of such safeguard
measures is in the public interest, notwithstanding the Tariff Commission's recommendation on the appropriate
safeguardmeasurebasedonitspositivefinaldetermination.122ThenonbindingforceoftheTariffCommission's
recommendations is congruent with the command of Section 28(2), Article VI of the 1987 Constitution that only
the President may be empowered by the Congress to impose appropriate tariff rates, import/export quotas and
othersimilarmeasures.123ItistheDTISecretary,asalteregoofthePresident,whoundertheSMAmayimpose
such safeguard measures subject to the limitations imposed therein. A contrary conclusion would in essence
undulyarrogatetotheTariffCommissiontheexecutivepowertoimposetheappropriatetariffmeasures.Thatis
whytheSMAempowerstheDTISecretarytoadoptsafeguardmeasuresotherthanthoserecommendedbythe
TariffCommission.
Unlike the recommendations of the Tariff Commission, its determination has a different effect on the DTI
Secretary.OnlyonthebasisofapositivefinaldeterminationmadebytheTariffCommissionunderSection5can
the DTI Secretary impose a general safeguard measure. Clearly, then the DTI Secretary is bound by the
determinationmadebytheTariffCommission.
SomeconfusionmayarisebecausethesixthparagraphofSection13124usesthevariantword"determined"ina
differentcontext,asitcontemplates"theappropriategeneralsafeguardmeasureasdeterminedbytheSecretary
withinfifteen(15)daysfromreceiptofthereport."Quiteplainly,theword"determined"inthiscontextpertainsto
the DTI Secretary's power of choice of the appropriate safeguard measure, as opposed to the Tariff
Commission's power to determine the existence of conditions necessary for the imposition of any safeguard
measure.InrelationtoSection5,suchchoicealsorelatestothemandateoftheDTISecretarytoestablishthat
theapplicationofsafeguardmeasuresisinthepublicinterest,alsowithinthefifteen(15)dayperiod.Nothingin
Section 13 contradicts the instruction in Section 5 that the DTI Secretary is allowed to impose the general
safeguardmeasuresonlyifthereisapositivedeterminationmadebytheTariffCommission.
Unfortunately, Rule 13.2 of the Implementing Rules of the SMA is captioned "Final Determination by the
Secretary."TheassailedDecisionandPhilcemcorlatchonthisphraseologytoimplythatthefactualdetermination
rendered by the Tariff Commission under Section 5 may be amended or reversed by the DTI Secretary. Of
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course,implementingrulesshouldconform,notclash,withthelawthattheyseektoimplement,foraregulation
whichoperatestocreatearuleoutofharmonywiththestatuteisanullity.125Yetimperfectdraftsmanshipaside,
nothing in Rule 13.2 implies that the DTI Secretary can set aside the determination made by the Tariff
Commission under the aegis of Section 5. This can be seen by examining the specific provisions of Rule 13.2,
thus:
RULE13.2.FinalDeterminationbytheSecretary
RULE 13.2.a. Within fifteen (15) calendar days from receipt of the Report of the Commission, the
Secretary shall make a decision, taking into consideration the measures recommended by the
Commission.
RULE 13.2.b. If the determination is affirmative, the Secretary shall issue, within two (2) calendar
days after making his decision, a written instruction to the heads of the concerned government
agencies to immediately implement the appropriate general safeguard measure as determined by
him. Provided, however, that in the case of nonagricultural products, the Secretary shall first
establishthattheimpositionofthesafeguardmeasurewillbeinthepublicinterest.
RULE13.2.c.Withintwo(2)calendardaysaftermakinghisdecision,theSecretaryshallalsoorder
itspublicationintwo(2)newspapersofgeneralcirculation.HeshallalsofurnishacopyofhisOrder
tothepetitionerandotherinterestedparties,whetheraffirmativeornegative.(Emphasissupplied.)
Moreover,theDTISecretarydoesnothavethepowertoreviewthefindingsoftheTariffCommissionforitisnot
subordinatetotheDepartmentofTradeandIndustry("DTI").Itfallsunderthesupervision,notoftheDTInorof
the Department of Finance (as mistakenly asserted by Southern Cross),126 but of the National Economic
Development Authority, an independent planning agency of the government of coequal rank as the
DTI.127AsthesupervisionandcontrolofaDepartmentSecretaryislimitedtothebureaus,offices,andagencies
underhim,128theDTISecretarygenerallycannotexercisereviewauthorityoveractionsoftheTariffCommission.
Neither does the SMA specifically authorize the DTI Secretary to alter, amend or modify in any way the
determinationmadebytheTariffCommission.ThemostthattheDTISecretarycoulddotoexpressdispleasure
overtheTariffCommission'sactionsistoignoreitsrecommendation,butnotitsdetermination.
The word "determination" as used in Rule 13.2 of the Implementing Rules is dissonant with the same word as
employedintheSMA,whichinthelattercaseisundeviatinglyinreferencetothedeterminationmadebytheTariff
Commission. Beyond the resulting confusion, however, the divergent use in Rule 13.2 is explicable as the Rule
textuallypertainstothepoweroftheDTISecretarytoreviewtherecommendationsoftheTariffCommission,not
thelatter'sdetermination.Indeed,anexaminationofthespecificprovisionsshowthatthereisnorealconflictto
reconcile. Rule 13.2 respects the logical order imposed by the SMA. The Rule does not remove the essential
requirement under Section 5 that a positive final determination be made by the Tariff Commission before a
definitivesafeguardmeasuremaybeimposedbytheDTISecretary.
TheassailedDecisioncharacterizesthefindingsoftheTariffCommissionasmerelyrecommendatoryandpoints
totheDTISecretaryastheauthoritywhorendersthefinaldecision.129Atthesametime,Philcemcorassertsthat
the Tariff Commission's functions are merely investigatory, and as such do not include the power to decide or
adjudicate. These contentions, viewed in the context of the fundamental requisite set forth by Section 5, are
untenable. They run counter to the statutory prescription that a positive final determination made by the Tariff
Commissionshouldfirstbeobtainedbeforethedefinitivesafeguardmeasuresmaybelaiddown.
WasitanomalousforCongresstohaveprovidedforasystemwherebytheTariffCommissionmayprecludethe
DTI,anofficeofhigherrank,fromimposingasafeguardmeasure?Ofcourse,thisCourtdoesnotinquireintothe
wisdomofthelegislaturebutonlychartstheboundariesofpowersandfunctionssetinitsenactments.Butthen,it
isnotdifficulttoseetheinternallogicofthisstatutoryframework.
For one, as earlier stated, the DTI cannot exercise review powers over the Tariff Commission which is not its
subordinateoffice.
Moreover, the mechanism established by Congress establishes a measure of check and balance involving two
different governmental agencies with disparate specializations. The matter of safeguard measures is of such
national importance that a decision either to impose or not to impose then could have ruinous effects on
companies doing business in the Philippines. Thus, it is ideal to put in place a system which affords all due
deliberationandcallstoforevariousgovernmentalagenciesexercisingtheirparticularspecializations.
Finally,ifthisarrangementdrawnupbyCongressmakesitdifficulttoobtainageneralsafeguardmeasure,itis
becausesuchsafeguardmeasureistheexception,ratherthantherule.ThePhilippinesisobligedtoobserveits
obligations under the GATT, under whose framework trade liberalization, not protectionism, is laid down. Verily,
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the GATT actually prescribes conditions before a membercountry may impose a safeguard measure. The
pertinentportionoftheGATTAgreementonSafeguardsreads:
2. A Member may only apply a safeguard measure to a product only if that member has determined,
pursuant to the provisions set out below, that such product is being imported into its territory in such
increasedquantities,absoluteorrelativetodomesticproduction,andundersuchconditionsastocauseor
threaten to cause serious injury to the domestic industry that produces like or directly competitive
products.130
3. (a) A Member may apply a safeguard measure only following an investigation by the competent
authoritiesofthatMemberpursuanttoprocedurespreviouslyestablishedandmadepublicinconsonance
with Article X of the GATT 1994. This investigation shall include reasonable public notice to all interested
partiesandpublichearingsorotherappropriatemeansinwhichimporters,exportersandotherinterested
partiescouldpresentevidenceandtheirviews,includingtheopportunitytorespondtothepresentationsof
other parties and to submit their views, inter alia, as to whether or not the application of a safeguard
measurewouldbeinthepublicinterest.Thecompetentauthoritiesshallpublishareportsettingforththeir
findingsandreasonedconclusionsreachedonallpertinentissuesoffactandlaw.131
TheSMAwasdesignednottocontradicttheGATT,buttocomplementit.ThetworequisiteslaiddowninSection
5forapositivefinaldeterminationarethesameconditionsprovidedundertheGATTAgreementonSafeguards
fortheapplicationofsafeguardmeasuresbyamembercountry.Moreover,theinvestigatoryprocedurelaiddown
bytheSMAconformstotheprocedurerequiredbytheGATTAgreementonSafeguards.Congresshaschosen
the Tariff Commission as the competent authority to conduct such investigation. Southern Cross stresses that
applying the provision of the GATT Agreement on Safeguards, the Tariff Commission is clearly empowered to
arrive at binding conclusions.132 We agree: binding on the DTI Secretary is the Tariff Commission's
determinations on whether a product is imported in increased quantities, absolute or relative to domestic
production and whether any such increase is a substantial cause of serious injury or threat thereof to the
domesticindustry.133
SatisfiedaswearewiththeproperstatutoryparadigmwithinwhichtheSMAshouldbeanalyzed,theflawsinthe
reasoning of the Court of Appeals and in the arguments of the respondents become apparent. To better
understand the dynamics of the procedure set up by the law leading to the imposition of definitive safeguard
measures,abriefstepbysteprecountthereofisinorder.
1. After the initiation of an action involving a general safeguard measure,134 the DTI Secretary makes a
preliminarydeterminationwhethertheincreasedimportsoftheproductunderconsiderationsubstantiallycauseor
threaten to substantially cause serious injury to the domestic industry,135 and whether the imposition of a
provisionalmeasureiswarrantedunderSection8oftheSMA.136Ifthepreliminarydeterminationisnegative,itis
impliedthatnofurtheractionwillbetakenontheapplication.
2. When his preliminary determination is positive, the Secretary immediately transmits the records covering the
applicationtotheTariffCommissionforimmediateformalinvestigation.137
3. The Tariff Commission conducts its formal investigation, keyed towards making a final determination. In the
process,itholdspublichearings,providinginterestedpartiestheopportunitytopresentevidenceorotherwisebe
heard.138 To repeat, Section 5 enumerates what the Tariff Commission is tasked to determine: (a) whether a
productisbeingimportedintothecountryinincreasedquantities,irrespectiveofwhethertheproductisabsolute
or relative to the domestic production and (b) whether the importation in increased quantities is such that it
causes serious injury or threat to the domestic industry.139 The findings of the Tariff Commission as to these
mattersconstitutethefinaldetermination,whichmaybeeitherpositiveornegative.
4.UnderSection13oftheSMA,iftheTariffCommissionmakesapositivedetermination,theTariffCommission
"recommends to the [DTI] Secretary an appropriate definitive measure." The Tariff Commission "may also
recommendotheractions,includingtheinitiationofinternationalnegotiationstoaddresstheunderlyingcauseof
the increase of imports of the products, to alleviate the injury or threat thereof to the domestic industry, and to
facilitatepositiveadjustmenttoimportcompetition."140
5.IftheTariffCommissionmakesapositivefinaldetermination,theDTISecretaryisthentodecide,withinfifteen
(15)daysfromreceiptofthereport,astowhatappropriatesafeguardmeasuresshouldheimpose.
6.However,iftheTariffCommissionmakesanegativefinaldetermination,theDTISecretarycannotimposeany
definitivesafeguardmeasure.UnderSection13,heisinstructedinsteadtoreturnwhatevercashbondwaspaid
bytheapplicantupontheinitiationoftheactionforsafeguardmeasure.
TheEffectoftheCourt'sDecision
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The Court of Appeals erred in remanding the case back to the DTI Secretary, with the instruction that the DTI
SecretarymayimposeageneralsafeguardmeasureevenifthereisnopositivefinaldeterminationfromtheTariff
Commission.Morecrucially,theCourtofAppealscouldnothaveacquiredjurisdictionoverPhilcemcor'spetition
forcertiorariinthefirstplace,asSection29oftheSMAproperlyvestsjurisdictionontheCTA.Consequently,the
assailedDecisionisanabsolutenullity,andwedeclareitassuch.
What is the effect of the nullity of the assailed Decision on the 5 June 2003 Decision of the DTI Secretary
imposing the general safeguard measure? We have recognized that any initial judicial review of a DTI ruling in
connection with the imposition of a safeguard measure belongs to the CTA. At the same time, the Court also
recognizes the fundamental principle that a null and void judgment cannot produce any legal effect. There is
sufficientcausetoestablishthatthe5June2003DecisionoftheDTISecretaryresultedfromtheassailedCourt
of Appeals Decision, even if the latter had not yet become final. Conversely, it can be concluded that it was
because of the putative imprimatur of the Court of Appeals' Decision that the DTI Secretary issued his ruling
imposingthesafeguardmeasure.Sincethe5June2003DecisionderivesitslegaleffectfromthevoidDecisionof
theCourtofAppeals,thisrulingoftheDTISecretaryisconsequentlyvoid.Thespringcannotrisehigherthanthe
source.
TheDTISecretaryhimselfacknowledgedthathedrewstimulatingforcefromtheappellatecourt'sDecisionforin
hisown5June2003Decision,hedeclared:
Fromtheaforementionedruling,theCAhasremandedthecasetotheDTISecretaryforafinaldecision.
Thus,thereisnolegalimpedimentfortheSecretarytodecideontheapplication.141
The inescapable conclusion is that the DTI Secretary needed the assailed Decision of the Court of Appeals to
justifyhisrenderingasecondDecision.HeexplicitlyinvokedtheCourtofAppeals'Decisionasbasisforrendering
his 5 June 2003 ruling, and implicitly recognized that without such Decision he would not have the authority to
revokehispreviousrulingandrenderanew,obverseruling.
Itisclearthenthatthe25June2003DecisionoftheDTISecretaryisaproductofthevoidDecision,itbeingan
attempt to carry out such null judgment. There is therefore no choice but to declare it void as well, lest we
sanctiontheperverseexistenceofafruitfromanonexistenttree.Itdoesnotevenmatterwhatthedispositionof
the 25 June 2003 Decision was, its nullity would be warranted even if the DTI Secretary chose to uphold his
earlierrulingdenyingtheapplicationforsafeguardmeasures.
ItisalsoanunfortunatespectacletobeholdtheDTISecretary,seekingtoenforceajudicialdecisionwhichisnot
yetfinalandactuallypendingreviewonappeal.Haditbeenajudgewhoattemptedtoenforceadecisionthatis
not yet final and executory, he or she would have readily been subjected to sanction by this Court. The DTI
SecretarymaybebeyondtheambitofadministrativereviewbythisCourt,butwearecapacitatedtoallocatethe
boundariessetbythelawofthelandandtoexactfealtytothelegalorder,especiallyfromtheinstrumentalities
andofficialsofgovernment.
WHEREFORE,thepetitionisGRANTED.TheassailedDecisionoftheCourtofAppealsisDECLAREDNULLAND
VOID and SET ASIDE. The Decision of the DTI Secretary dated 25 June 2003 is also DECLARED NULL AND
VOIDandSETASIDE.NoCosts.
SOORDERED.
Puno,(Chairman),Quisumbing,AustriaMartinez,andCallejo,Sr.,JJ.,concur.
Footnotes
1Globalizationis"theremovalofbarrierstofreetradeandthecloserintegrationofnationaleconomies."In
recenttimes,protestsagainstglobalizationhaveenteredanewstage.Riotsanddemonstrationsagainst
thepoliciesofandactionsbyinstitutionsofglobalizationhavebecomecommonplaceevenindeveloped
countries.France'sJacquesChirachasexpressedconcernthatglobalizationisnotmakinglifebetterfor
thosemostinneedofitspromisedbenefits.J.Stiglitz,,GlobalizationandItsDiscontents,pp.14(2002).
2ThepolicyobjectivethatguidestheGeneralSafeguardMeasuresActisenunciatedinSection2thereof,
whichreads:
"Section2.DeclarationofPolicy.TheStateshallpromotethecompetitivenessofdomestic
industriesandproducersbasedonsoundindustrialandagriculturaldevelopmentpolicies,andthe
efficientuseofhuman,naturalandtechnicalresources.Inpursuitofthisgoalandinthepublic
interest,theStateshallprovidesafeguardmeasurestoprotectdomesticindustriesandproducers
4/2/2017 G.R.No.158540
fromincreasedimportswhichcauseorthreatentocauseseriousinjurytothosedomesticindustries
andproducers."
3GATTwasacollectionoftreatiesgoverningaccesstotheeconomicsoftreatyadherentswithno
institutionalizedbodyadministeringtheagreementsordependablesystemofdisputesettlement.(See
Taadav.Angara,338Phil.546,556(1997))Originallyformulatedin1947,theGATTwasupdatedin1994
totakeintoaccountsubstantiveandinstitutionalchangesnegotiatedintheUruguayRound.A
comprehensivehistoryoftheGATTisrecountedinFootnoteNo.1ofTaadav.Angara,id.at557561.
4Supranote2.
5Rollo,p.14.
6PhilcemcorhassincerenameditselftheCementManufacturersAssociationofthePhilippines.Rollo,p.
1364.
7UnionCementCorporation,NorthernCementCorporation,LimayGrindingMillCorporation,Republic
CementCorporation,ContinentalOperatingCorporation,RizalCementCompany,Inc.,SolidCement
Corporation,FRCementCorporation,UnionCementCorporation,FortuneCementCorporation,Apo
CementCorporation,LloydsRichfieldIndustrialCorporation,GrandCementManufacturingCorporation,
AlsonsCementCorporation,IliganCementCorporation,MindanaoPortlandCementCorporation,Pacific
CementCompany,Inc.,andUnionCementCorporation.Vide"StaffReportonFormalInvestigationof
SafeguardMeasuresCaseAgainstImportationsofGrayPortlandCement."Rollo,p.132.
8Vide"StaffReportonFormalInvestigationofSafeguardMeasuresCaseAgainstImportationsofGray
PortlandCement."Rolloat133.ThisfactwasconfirmedbycounselforPhilcemcorduringtheoral
argumentbeforethisCourton18February2004.SeeTSN,pp.157158,18February2004.
9Philcemcor'sapplicationcoveredgrayPortlandcementofalltypesandexcludedwhitePortlandcement,
aluminouscement,andmasonrycement.Rollo,p.127.
10Namely,Philcemcorinbehalfoftwelve(12)ofitsmembercompanies,asfollows:AlsonsCement
CorporationApoCementCorporationContinentalOperatingCorporation,FortuneCementCorporation
FRCementCorporationIliganCementCorporationLloydsRichfieldIndustrialCorporationMindanao
PortlandCementCorporationRepublicCementCorporationRizalCementCompany,Inc.SolidCement
CorporationandUnionCementCorporation.Theothercementproducers(i.e.,LimayGrindingMill
CorporationandPacificCementPhilippines,Inc.)thatdidnotjointheapplicationneverthelesssupported
theapplicationfortheimpositionofthesafeguardmeasures.Rollo,p.127.LimayGrindingMillCorporation
andPacificCementPhilippines,Inc.didnotjointheapplicationyetneverthelesssupportedthesame.Id.
11Ibid.
12Id.at128.
13Ibid.CustomsMemorandumOrderNo.382001directedthatallimportationsfromallcountriesofgray
Portlandcement,includingblendedPortlandcementthatcontainspozzolan,slagorotheradditives,
whetherinbulkorbags,classifiedunderHSCodes2523.2900and2523.9000,shallbeimposed,in
additiontotaxesanddutiesandothercharges,acashbondamountingtoP20.60per40kg.bagorits
equivalentinbulk.
14Id.at129.
15AlsoinattendancewererepresentativesfromPhilcemcor,Lafarge,Cemex,TCCCementCorporation,
SouthernCrossCementCorporation,PriceWaterhouseCoopers,SamstoneInfraConstructionSupply,
WestpointIndustrialSalesCompany,CohacoTradingCorporation,PhilippineConstructorsAssociation,
ConfederationofHomeownersAssociationforReformsonGovernanceandEnvironment,Ssangyong
Corporation,NationalConstructorsAssociationofthePhilippines,PrivateSectorConsultativeCouncilfor
Shelter,FairTradeAlliance,PhilippineCementWorkers'Council,RefractoriesCorporationofthe
Philippines,EmbassyofJapan,EmbassyofIndonesia,theHouseofRepresentatives,andArellanoLaw
School.Id.at130.
16Ibid.Positionpaperssupportingtheapplicationwerereceivedfrom:PhilcemcorRefractories
CorporationofthePhilippinesTigerMachineryandIndustrialCorporationCembagPlasticIndustries,Ltd.
UnionLockIndustrialandTradingCorporationRefratradeIndustrialResources.Inc.,CAPPIndustries,Inc.
NobleEnergyArcmanCorporationUnitedBagManufacturingCorporationIGNISLtd.,Accufloor,Inc.
4/2/2017 G.R.No.158540
PrimexInternationalPhilippines,Inc.andAlliedDistributor.Ontheotherhand,position
papers/manifestationsopposingtheapplicationweresubmittedby:SouthernCrossTaiheiyoCement
CorporationTCCCementCorporationTaiwanCementCorporationCohacoTradingCorporation
SamstoneInfraConstructionSupplyConsumersUnionofthePhilippinesConfederationofHomeowners
AssociationforReformsonGovernanceandEnvironmentPhilippineConstructorsAssociationandthe
EmbassyofIndonesia.
17Thevisitswereconductedduringtheperiodof10December2001to17January2002.Theinformation
gatheredorverifiedduringthevisitspertainedtosuchmattersastheproductionprocess,productionlines,
machineryandequipment,qualitytestresults,plantcapacities,productionlevels,productioncost,sales,
sellingprices,loans,employment,inventorylevels,companyownership,andplantshutdownsor
mothballingplans.Id.at131.
18TheTariffCommissionconcludedthatwhilethemarketshareofthedomesticindustry(i.e.,the
applicantcompanies)haddeclinedfromalmost99%in1998to80%in2001,thelocalindustryremained
thesignificantlydominantmarketplayer.Id.at290291.
19TheReportdeterminedthatwhiledomesticsalesoftheapplicantcompanieshaddeclinedsince1998,
suchdeclinewasoffsetbyanincreaseinexportsalesvolume.Thedomesticindustrylikewisesuffereda
declineinproductionintheyear2000,whenimportsstartedtosurge,atarateof5%fromtheprevious
year,yetsuchdeclinewasnotsharpnorsignificantenoughrelativetotheyearspriortothesurgeto
constituteseriousimpairmentintheproductionandsalesoftheindustry.Id.at292.
20Anenttheapplicantcompanies,itwasfoundthatwhileindustrycapacityutilizationdeclinedfrom1996to
1999,thedeclinewasactuallyarrestedin2000,theyearimportssurged.Capacityutilizationdiddeclinein
thefirstthreequartersof2001relativetothesameperiodin2000,yetsuchdeclinewasnotsudden,sharp,
norsignificantenoughinthecontemplationofthelawastoconstituteseriousimpairmentoftheindustry's
overallcondition.Id.at294.
21Itwasdeterminedthattotalsalesrevenuesoftheapplicantcompaniesintheyear2000,whenimports
surged,hadactuallypeakedatP25.97billionpesos,thehighestlevelinatleastfiveyears.Theapplicant
companies'incomefromoperationshadlikewiseregisteredaprofitofP1.98billionin2000,representingan
upturnof175.51%from1999,beforeimportssurged,whenatotallossofP2.62billionwasincurredby
thesecompanies.Id.at296.
22AccordingtotheTariffCommission,anegativereturnonsalesoftheapplicantcompanieswas
registeredin1999,whenimportshadnotyetsurged,duetoadeficitfromoperationsofP2.62billionin
1999.However,asimportssurgedin2000,theapplicantcompanieshadregisteredapositivereturnof
7.62%,asoperatingincomeofP1.98billionwasrealizedforthatyear.Id.at298.
23Id.at302.
24Id.at303.
25Rollo,p.343.
26Id.at334341.
27Rollo,pp.343345.
28Id.at345416.
29Amongotherclaims,PhilcemcorallegedthattheTariffCommissionarbitrarilyignoredthenatureofthe
cementindustryinevaluatingtheinjuryfactors.Rollo,p.394.
30Rollo,pp.418490.
31ChairedbyAssociateJusticePortiaAlioHormachuelos,andwithJusticesElviJohnS.Asuncionand
EdgardoF.Sundiamasmembers.
32Rollo,pp.492493.PennedbyJusticeE.J.S.Asuncion,concurredinbyJusticesP.AlioHormachuelos
andE.F.Sundiam.ThedispositiveportionoftheWritofPreliminaryInjunctionreadsasfollows:
"NOW,THEREFORE,You,thepublicrespondents,theHon.SecretaryoftheDept.ofTrade&
Industry,theTariffCommission,theHon.CommissioneroftheBureauofCustoms,andtheHon.
4/2/2017 G.R.No.158540
SecretaryoftheDept.ofFinanceoranyofyouragentsorrepresentatives,areherebyrestrained
andprohibitedfromenforcingthedecisiondatedApril5,2002oftheHon.SecretaryManuelA.
RoxasIIoftheDept.ofTrade&IndustryinDTISGNo.022001.
SOORDERED."(Rollo,p.496)
33Rollo,p.24.
34Id.atp.594.The19February2003ResolutionoftheCourtofAppealsalsograntedtheMotionfor
InterventionfiledbyVicenteT.Lao.However,despiteduenotice,Laofailedtofilehiscommentin
intervention.SeeRollo,p.72.
35Inthemeantime,frustratedbythefailureoftheCourtofAppealstoresolveSouthernCross'sMotionfor
Reconsideration,SouthernCrossfiledaPetitionforCertiorariwiththisCourton12March2003.SeeRollo,
pp.596654.OwingtothependingMotionforReconsiderationbeforetheCourtofAppeals,theSupreme
CourtFirstDivisiondismissedSouthernCross'sfirstPetitionforCertiorariasprematureinaResolution
dated17March2003.Rollo,p.655.
36Rollo,pp.6784.PennedbyJusticeE.J.S.Asuncion,concurredinbyJusticesP.AlioHormachuelos
andE.F.Sundiam.
37Rollo,pp.7576,citingLitonjuav.CourtofAppeals,286SCRA136(1998)andSta.InesMelaleForest
ProductsCorporationv.Macaraig,299SCRA491(1998).
38Id.at82.
39Id.at83.
40SeeSection2,Rule36,1997RulesofCivilProcedure.
41Rollo,p.685.PriortothepromulgationofthisnewDecision,SouthernCrosswasalreadyapprehensive
thattheDTISecretarymightactfavorablyonPhilcemcor'spetitioninlightoftheCourtofAppealsruling.
SouthernCrosssentaletterdated19June2003toDTISecretaryRoxas,informinghimthatSouthern
CrosswouldbeappealingtheCourtofAppealsDecisiontotheSupremeCourt,andthat"[w]etrustthat,in
accordancewiththeRulesofCourt,youwillrefrainfromassumingjurisdictionorfromtakinganyactionon
theApplicationforSafeguardMeasuresfiledbyPhilcemcoruntilaftertheSupremeCourtshallhavefinally
decidedonourappealxxx."SeeRollo,pp.679680.
42AmongthefactorscitedbytheDTIasbasisforholdingthattherewasseriousinjurywasthedeclinein
salesvolumesduringtheperiodoftheimportsurge,salesvolumedecreasingby11.72%in2000,andby
13.28%duringthefirstthreequartersof2001.Italsocitedthedeclineinthedomesticindustry'smarket
sharefrom98.60%in1998to79.23%in2001,representinga20%drop.Theimportsurgehadalso
causedtheidlingofseven(7)drykilns,adeclineinactualproductionofthedomesticindustryby7.2%from
1998to2001adecreaseincapacityutilizationandnetlossestothedomesticindustryamountingto
aroundP7.7billionin1999andP5.5billionin2000.SeeRollo,pp.688690.
43Rollo,pp.681699.
44ThereisacertainnoveltytoPhilcemcor'sclaim,consideringthatthepurportedcommonidentityof
causesofactionarosenotwiththefilingoftheinitiatorypleading,butwiththeancillaryactionforinjunction.
Wedonotdoubtthatforumshoppingcanbecommittedeveniftheidenticalrelieforcauseofactionis
soughtorassertedbeforeadifferentforumnotintheinitiatorypleading,butinanapplicationforprovisional
relief.Forumshoppingisfrowneduponasitaffordsthelitiganttheopportunitytoavailofthesamerelief
basedonthesamecauseofactionbeforedifferentjurisdictions.Forsolongasthecourtsortribunalsare
capacitatedtograntthereliefssought,themodethroughwhichtheredressissoughtbecomesimmaterial.
45Rollo,pp.9521005.
46InaResolutiondated4February2004.SeeRollo,p.1191.
47TSN,18February2004,p.3.
48Ibid.
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49Seee.g.,Churchillv.Rafferty,32Phil.580,582583(1915)Davidv.Hon.Ramos,90Phil.351,354356
(1951).
50Seee.g.,Section11,Rep.ActNo.1125.
51SeeSection218,Rep.ActNo.8424.
53SeeSection5,Rule7,1997RulesofCivilProcedure.
54Rollo,p.74.
55SeeSection1,Rule65inrelationtoSection4,Rule65,1997RulesofCivilProcedure."Theoriginal
jurisdictionoftheCourtofAppealsoverspecialcivilactionsfor,interalia,certiorari,isvesteduponitin
Section9(l)ofB.P.Blg.129.ThisjurisdictionisconcurrentwiththeSupremeCourtandtheRegionalTrial
Court."Atty.Paav.CourtofAppeals,347Phil.122,137(1997).
56SeeSection1,Rule65,1997RulesofCivilProcedure.SeealsoBuildingCareCorp.v.NLRC,335Phil.
1131,1138(1997)Bernardov.CourtofAppeals,341Phil.413,425(1997)BFCorporationv.Courtof
Appeals,351Phil.507,519(1998)Tanv.Sandiganbayan,354Phil.463,469(1998).
57BeforethepassageofRANo.9282on30March2004,appealfromthedecisionsoftheCourtofTax
AppealswastotheCourtofAppeals.
58SecretaryofFinancev.Agana,G.R.No.L36276,17January1975,62SCRA68,73."TheCTAisa
highlyspecializedbodyspecificallycreatedforthepurposeofreviewingtaxcases,"Phil.RefiningCo.v.CA,
326Phil.680,689(1996)CIRv.CA,338Phil.322,336(1997).
59CommissionerofInternalRevenuev.CA,363Phil.239,246(1999).
60PhilippinePortsAuthorityv.Fuentes,G.R.No.91259,16April1991,195SCRA790,796.
61SeeSection7,Rep.ActNo.1125.ButseealsoSection7,Rep.ActNo.9282.
62SeeSection7,Rep.ActNo.9282(2004).
63See,e.g.,ALUv.Gomez,125Phil.717,722(1967).
64ALUv.Gomez,supranote60AtlasConsolidatedv.CourtofAppeals,G.R.No.54305,February14,
1990,182SCRA166,181.
65Supranote55.Also,beforetheenactmentofR.A.No.9282,decisionsoftheCTAwereappealableto
theCourtofAppeals.
66G.R.No.79622,29September1989,178SCRA164.
67Tejadav.HomesteadPropertyCorporation,id.at168.
68463US85(1983).
69Id.at9697(1983),citingSinclairRefiningCo.v.JenkinsPetroleumProcessCo.,289US689,695
(1933)andBlack'sLawDictionary1158(5thed1979),whichstates"Relate.Tostandinsomerelationto
havebearingorconcerntopertainrefertobringintoassociationwithorconnectionwith."
70514US645(1995).
71Id.at656.
72Id.at656.SeealsoEgelhoffv.Egelhoff,000U.S.991529(2001).
73"Courtsmustgiveeffecttothegenerallegislativeintentthatcanbediscoveredfromorisunraveledby
thefourcornersofthestatute,andinordertodiscoversaidintent,thewholestatute,andnotonlya
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particularprovisionthereof,shouldbeconsidered."CIRv.TMXSales,G.R.No.83736,15January1992,
205SCRA184,188,citingManilaLodgeNo.761,etal.vs.CourtofAppeals,etal.,73SCRA162(1976).
74SeeSection4(n),ChapterI,Rep.ActNo.8800.
75SeeSection29,Rep.ActNo.8800,infra,inrelationtoSection4(n),ChapterI,Rep.ActNo.8800.
76Section7,Rep.ActNo.8800.
77Ibid.
79Id.atSec.13.
80Id.atSec.19.
81Id.atSec.18.
82AccordTejada,supranote61.
83Supranote66.
84"Wherethereisambiguity,suchinterpretationaswillavoidinconvenienceandabsurdityistobe
adopted."
85CIRv.TMXSales,supranote66.
86Sempiov.CourtofAppeals,331Phil.912,922923(1996).
87Silveriov.CourtofAppeals,225Phil.459,474(1986),citingStatev.Dawson,325S.W.97.99.Seealso
SanMiguelFoods,Inc.v.Hon.Laguesma,331Phil.356,376(1996).
88ThedistinctionmustalsobelaidbetweenthepoweroftheDTISecretarytoimposeaprovisional
safeguardmeasureunderSection8oftheSMAandageneralsafeguardmeasureunderSection13.
UnderSection8,thedecisiontoimposeaprovisionalsafeguardmeasureisclearlywithinthesole
discretionoftheDTISecretary,withoutneedtotakeintoaccountwhatothergovernmentalagenciesmay
say.YetunderSection13,inrelationtoSection8oftheSMA,thedecisionbytheDTISecretarytoimpose
thegeneralsafeguardmeasureisindubitablypredicatedonapositivefinaldeterminationbytheTariff
Commission.
90Sutherland,StatutesandStatutoryConstruction,Vol.2A,5thed.,p.81(1973).
91Republicv.CourtofAppeals,G.R.Nos.103882&105276,25November1998,299SCRA199,270
271,J.Puno,concurring.SeealsoGlobeMackayCableandRadioCorp.v.NLRC,G.R.No.82511,3
March1992,206SCRA701,711,citingR.Agpalo,StatutoryConstruction,p.94(1990)Victoriav.
COMELEC,G.R.No.109005,10January1994,229SCRA269,273Supt.Fianzav.PLEB,G.R.Nos.
109638&109639,31March1995,243SCRA165,178.
92JointAdministrativeOrderNo.0300,promulgatedon9August2000,andsignedbythethen
SecretariesofTradeandIndustry,AgricultureandFinance,aswellastheCommissioneroftheBureauof
CustomsandtheChairmanoftheTariffCommission.
93SeeRollo,pp.8182.
94Supranote91.
95SeeCivilLibertiesUnionv.ExecutiveSecretary,G.R.Nos.83896&8381522February1991,194
SCRA317,337.
96Ibid.
4/2/2017 G.R.No.158540
97Id.at337.
98SeeSection24,ArticleVI,Constitution."Thepoweroftaxationbeinglegislative,alltheincidentsare
withinthecontroloftheLegislature."Sarasolav.Trinidad,40Phil.252,263(1919),citingGenetv.Cityof
Brooklyn[1885],99N.Y.,296.SeealsoNationalDentalSupplyv.Meer,90Phil.265,268269(1951)
PepsiColaBottlingCompanyofthePhilippines,Inc.v.MunicipalityofTanauan,et.al.,161Phil.591,600
(1976).
99ArticleVI,Section28(2),1987Constitution.SeeSection13,Rep.ActNo.8800.
100"Thus,ourfundamentalalsodistinguishesbetweentaxes,ontheonehand,and"imposts"thatisto
say,tariffratesordutiesimposedfortheimportationofgoodsontheother."Procter&GamblePhil.Mfg.
Corp.v.Comm.ofCustoms,132Phil.169,175(1968).
101AsopinedbyJusticeIreneCortes,theindubitableauthorityinAdministrativeLaw,"Wherethe
Constitutionitselfauthorizesthedelegationtherecanobviouslybenoobjectiontoitprovidedthe
constitutionalconditionsaremet."I.Cortes,PhilippineAdministrativeLaw:CasesandMaterials12(1963).
102Supranote99.
103"Withoutminimizingtheimportanceoftheheadsofthevariousdepartments,theirpersonalityisin
realitybuttheprojectionofthatofthePresident.Statedotherwise,andasforciblycharacterizedbyChief
JusticeTaftoftheSupremeCourtoftheUnitedStates,'eachheadofadepartmentis,andmustbe,the
President'salteregointhemattersofthatdepartmentwherethePresidentisrequiredbylawtoexercise
authority'"Villenav.SecretaryofInterior,67Phil.451,464(1939).
104Supranote89.
10522Phil.456(1912).
106Lambv.Phipps,22Phil.456,480(1912).ThestatutoryauthoritycitedbytheCourtinLambsisRev.
Stat.ofU.S.,secs.184,187,269,277.
107G.R.No.96681,2December1991,204SCRA483.
108Id.at496.
109ThefunctionsoftheTariffCommissionaretraditionallyinvestigatory.Forexample,boththelawthat
createdtheTariffCommissionandtheTariffandCustomsCodemandatetheCommissiontoinvestigate,
amongothers,theadministration,fiscalandindustrialeffectsofthetarifflawsofthiscountry.SeeSection5,
Rep.ActNo.911&Section505,Rep.ActNo.1937.EvenintheSMA,theprocessbywhichtheTariff
Commissionarrivesatitsdeterminationisdenominatedasa"formalinvestigation."
110SeeSection18(1),ArticleXIII,Constitution.
111ConstitutionalCommissionerFr.JoaquinBernas,citingtheRecordofthe1986Constitutional
Commission,saysthatfortheprosecutionofhumanrightsviolations,theCHRwouldhavetorelyonthe
appropriategovernmentagenciessuchastheFiscal'sOffice.J.Bernas,TheIntentofthe1986Constitution
Writers1014(1995),citingIVRecordoftheConstitutionalCommission:ProceedingsandDebates712.
112Supranotes89and99.
113Ironically,theCourtofAppealsinvokesthedoctrinethat"astatutemustbeconstruedastoharmonize
andgiveeffecttoallitsprovisionswheneverpossible,"seerollo,p.79,whilefailingtotakeintoaccount
Section5ofRep.ActNo.8800.
114SeeSections5,7,8,12&13,Rep.ActNo.8800.
117SeealsoSection9,Rep.ActNo.8800.
4/2/2017 G.R.No.158540
118Supranote89.
120"Uponitspositivedetermination,theCommissionshallrecommendtotheSecretaryanappropriate
definitivemeasurexxx."Supranote89.
122SeeSection5,Rep.ActNo.8800,inrelationtoSection13,Rep.ActNo.8800.
123Supranote99.
124"TheSecretaryshallissueawritteninstructiontotheheadsoftheconcernedgovernmentagenciesto
implementtheappropriategeneralsafeguardmeasureasdeterminedbytheSecretarywithinfifteen(15)
daysfromreceiptofthereport."
125Regidorv.Chiongbian,G.R.No.85815,19May1989,173SCRA507,512citingCommissionerof
InternalRevenuev.Vda.dePrieto,L13912,September30,1950."Aruleorregulationthatwasissuedto
implementalawmaynotgobeyondthetermsandprovisionsofthelaw."Regidorv.Chiongbian,id.citing
Peoplev.Lim,108Phil.1091.
126Rollo,p.1323,citingaprovisionoftherepealedRevisedAdministrativeCode.
127SeeSections2&16,ChapterI,SubtitleC,TitleII,BookV,AdministrativeCodeof1987.The
supervisionexercisedbytheNEDAovertheTariffCommissionisadministrativeinnature.SeeSection
38(2),Chapter7,BookIV,AdministrativeCodeof1987.
128Section39,Chapter8,BookIV,AdministrativeCodeof1987.
129Rollo,p.80.
130SectionII(2),GATTAgreementonSafeguards.
131SectionII(3)(a),GATTAgreementonSafeguards.
132Rollo,p.1321.
133Supranote89.
135Supranote70.
139Supranote89.
141Rollo,p.682.
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Southern Cross Cement Vs Phil Cement Manufacturers

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Southern Cross Cement Vs Phil Cement Manufacturers

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4/2/2017 G.R.No.

Private respondent Philippine Cement Manufacturers Corporation6 ("Philcemcor") is an association of domestic

IntheAmericancaseofShawv.DeltaAirLines,Inc.,68 the United States Supreme Court, in interpreting a key

inCivilLibertiesUnionv.ExecutiveSecretary96on the resort to deliberations of the constitutional convention to

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