PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
G.R. No. 167919 February 14, 2007
PLARIDEL M. ABAYA, COMMODORE PLARIDEL C. GARCIA (retired)
and PMA ’59 FOUNDATION, INC., rep. by its President,
COMMODORE CARLOS L. AGUSTIN (retired), Petitioners,
vs.
HON. SECRETARY HERMOGENES E. EBDANE, JR., in his capacity
as Secretary of the DEPARTMENT OF PUBLIC WORKS and
HIGHWAYS, HON. SECRETARY EMILIA T. BONCODIN, in her
capacity as Secretary of the DEPARTMENT OF BUDGET and
MANAGEMENT, HON. SECRETARY CESAR V. PURISIMA, in his
capacity as Secretary of the DEPARTMENT OF FINANCE, HON.
TREASURER NORMA L. LASALA, in her capacity as Treasurer of
the Bureau of Treasury, and CHINA ROAD and BRIDGE
CORPORATION, Respondents.
Before the Court is the petition for certiorari and prohibition under Rule 65
of the Rules of Court seeking to set aside and nullify Resolution No.
PJHL-A-04-012 dated May 7, 2004 issued by the Bids and Awards
Committee (BAC) of the Department of Public Works and Highways
(DPWH) and approved by then DPWH Acting Secretary Florante
Soriquez. The assailed resolution recommended the award to private
respondent China Road & Bridge Corporation of the contract for the
implementation of civil works for Contract Package No. I (CP I), which
consists of the improvement/rehabilitation of the San Andres (Codon)-
Virac-Jct. Bago-Viga road, with the length of 79.818 kilometers, in the
island province of Catanduanes.
The CP I project is one of the four packages comprising the project for
the improvement/rehabilitation of the Catanduanes Circumferential Road,
covering a total length of about 204.515 kilometers, which is the main
highway in Catanduanes Province. The road section (Catanduanes
Circumferential Road) is part of the Arterial Road Links Development
Project (Phase IV) funded under Loan Agreement No. PH-P204 dated
December 28, 1999 between the Japan Bank for International
Cooperation (JBIC) and the Government of the Republic of the
Philippines.
Background
Based on the Exchange of Notes dated December 27, 1999,1 the
Government of Japan and the Government of the Philippines, through
their respective representatives, namely, Mr. Yoshihisa Ara, Ambassador
Extraordinary and Plenipotentiary of Japan to the Republic of the
Philippines, and then Secretary of Foreign Affairs Domingo L. Siazon,
have reached an understanding concerning Japanese loans to be
extended to the Philippines. These loans were aimed at promoting our
country’s economic stabilization and development efforts.
The Exchange of Notes consisted of two documents: (1) a Letter from the
Government of Japan, signed by Ambassador Ara, addressed to then
Secretary of Foreign Affairs Siazon, confirming the understanding
reached between the two governments concerning the loans to be
extended by the Government of Japan to the Philippines; and (2) a
document denominated as Records of Discussion where the salient
terms of the loans as set forth by the Government of Japan, through the
Japanese delegation, were reiterated and the said terms were accepted
by the Philippine delegation. Both Ambassador Ara and then Secretary
Siazon signed the Records of Discussion as representatives of the
Government of Japan and Philippine Government, respectively.
The Exchange of Notes provided that the loans to be extended by the
Government of Japan to the Philippines consisted of two loans: Loan I
and Loan II. The Exchange of Notes stated in part:
I
1. A loan in Japanese yen up to the amount of seventy-nine billion eight
hundred and sixty-one million yen (Y79,861,000,000) (hereinafter
referred to as "the Loan I") will be extended, in accordance with the
relevant laws and regulations of Japan, to the Government of the
Republic of the Philippines (hereinafter referred to as "the Borrower I") by
the Japan Bank for International Cooperation (hereinafter referred to as
"the Bank") to implement the projects enumerated in the List A attached
hereto (hereinafter referred to as "the List A") according to the allocation
for each project as specified in the List A.
2. (1) The Loan I will be made available by loan agreements to be
concluded between the Borrower I and the Bank. The terms and
conditions of the Loan I as well as the procedure for its utilization will be
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)

governed by said loan agreements which will contain, inter alia, the Maximum amount in million yen)
following principles:
1. Secondary Education Development and Improvement Project
... 7,210

(2) Each of the loan agreements mentioned in sub-paragraph (1) above 2. Rural Water Supply Project (Phase V) 951
will be concluded after the Bank is satisfied of the feasibility, including
environmental consideration, of the project to which such loan agreement 3. Bohol Irrigation Project (Phase II) 6,078
relates.
4. Agrarian Reform Infrastructure Support Project (Phase II)
3. (1) The Loan I will be made available to cover payments to be made by 16,990
the Philippine executing agencies to suppliers, contractors and/or
consultants of eligible source countries under such contracts as may be 5. Arterial Road Links Development Project (Phase IV) 15,384
entered into between them for purchases of products and/or services
required for the implementation of the projects enumerated in the List A,
6. Cordillera Road Improvement Project 5,852
provided that such purchases are made in such eligible source countries
for products produced in and/or services supplied from those countries.
7. Philippines-Japan Friendship Highway Mindanao Section
Rehabilitation Project (Phase II) 7,434
(2) The scope of eligible source countries mentioned in sub-paragraph
(1) above will be agreed upon between the authorities concerned of the
two Governments. 8. Rehabilitation and Maintenance of Bridges Along Arterial Roads
Project (Phase IV) 5,068
(3) A part of the Loan I may be used to cover eligible local currency
requirements for the implementation of the projects enumerated in the 9. Maritime Safety Improvement Project (Phase C) 4,714
List A.
10. Pinatubo Hazard Urgent Mitigation Project (Phase II) 9,013
4. With regard to the shipping and marine insurance of the products
purchased under the Loan I, the Government of the Republic of the 11. Pasig-Marikina River Channel Improvement Project (Phase I) 1,167
Philippines will refrain from imposing any restrictions that may hinder fair
and free competition among the shipping and marine insurance Total 79,8613
companies.
The Exchange of Notes further provided that:
x x x x2 1awphi1.net
III
Pertinently, List A, which specified the projects to be financed under the
Loan I, includes the Arterial Road Links Development Project (Phase IV), xxxx
to wit:
3. The Government of the Republic of the Philippines will ensure that the
LIST A products and/or services mentioned in sub-paragraph (1) of paragraph 3
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
of Part I and sub-paragraph (1) of paragraph 4 of Part II are procured in
accordance with the guidelines for procurement of the Bank, which set
forth, inter alia, the procedures of international tendering to be followed
except where such procedures are inapplicable or inappropriate.
x x x x4
The Records of Discussion, which formed part of the Exchange of Notes,
also stated in part, thus:
xxxx
1. With reference to sub-paragraph (3) of paragraph 3 of Part I of the
Exchange of Notes concerning the financing of eligible local currency
requirements for the implementation of the projects mentioned in the said
sub-paragraph, the representative of the Japanese delegation stated
that:
(1) such requirement of local currency as general administrative
expenses, interest during construction, taxes and duties,
expenses concerning office, remuneration to employees of the
executing agencies and housing, not directly related to the
implementation of the said projects, as well as purchase of land
properties, compensation and the like, however, will not be
considered as eligible for financing under the Loan I; and
(2) the procurement of products and/or services will be made in
accordance with the procedures of international competitive
tendering except where such procedures are inapplicable and
inappropriate.
xxx x5
Thus, in accordance with the agreement reached by the Government of
Japan and the Philippine Government, as expressed in the Exchange of
Notes between the representatives of the two governments, the
Philippines obtained from and was granted a loan by the JBIC. Loan
Agreement No. PH-P204 dated December 28, 1999, in particular, stated
as follows:
Loan Agreement No. PH-P204, dated December 28, 1999, between
JAPAN BANK FOR INTERNATIONAL COOPERATION and the
GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES.
In the light of the contents of the Exchange of Notes between the
Government of Japan and the Government of the Republic of the
Philippines dated December 27, 1999, concerning Japanese loans to be
extended with a view to promoting the economic stabilization and
development efforts of the Republic of the Philippines.
JAPAN BANK FOR INTERNATIONAL COOPERATION (hereinafter
referred to as "the BANK") and THE GOVERNMENT OF THE REPUBLIC
OF THE PHILIPPINES (hereinafter referred to as "the Borrower")
herewith conclude the following Loan Agreement (hereinafter referred to
as "the Loan Agreement", which includes all agreements supplemental
hereto).
x x x x6
Under the terms and conditions of Loan Agreement No. PH-P204, JBIC
agreed to lend the Philippine Government an amount not exceeding
FIFTEEN BILLION THREE HUNDRED EIGHTY-FOUR MILLION
Japanese Yen (Y15,384,000,000) as principal for the implementation of
the Arterial Road Links Development Project (Phase IV) on the terms and
conditions set forth in the Loan Agreement and in accordance with the
relevant laws and regulations of Japan.7 The said amount shall be used
for the purchase of eligible goods and services necessary for the
implementation of the above-mentioned project from suppliers,
contractors or consultants.8
Further, it was provided under the said loan agreement that other terms
and conditions generally applicable thereto shall be set forth in the
General Terms and Conditions, dated November 1987, issued by the
Overseas Economic Cooperation Fund (OECF) and for the purpose,
reference to "the OECF" and "Fund" therein (General Terms and
Conditions) shall be substituted by "the JBIC" and "Bank,"
respectively.9 Specifically, the guidelines for procurement of all goods
and services to be financed out of the proceeds of the said loan shall be
as stipulated in the Guidelines for Procurement under OECF Loans dated
December 1997 (herein referred to as JBIC Procurement Guidelines).10
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)

As mentioned earlier, the proceeds of Loan Agreement No. PH-P204 was Original Bid As As-Corrected Bid
to be used to finance the Arterial Road Links Development Project Name of Bidder Variance
Read (Pesos) Amount (Pesos)
(Phase IV), of which the Catanduanes Circumferential Road was a part.
This road section, in turn, was divided into four contract packages (CP): 1) China Road
And Bridge ₱ 993,183,904.98 ₱952,564,821.71 28.95%
CP I: San Andres (Codon)-Virac-Jct. Bato- Viga Road - 79.818 Corporation
kms
2) Cavite Ideal Int’l
₱1,099,926,598.11 ₱1,099,926,598.11 48.90%
CP II: Viga-Bagamanoc Road - 10.40 kms. Const. Devt. Corp.

3) Italian Thai
CP III: Bagamanoc-Pandan Road - 47.50 kms. Dev’t. Public ₱1,125,022,075.34 ₱1,125,392,475.36 52.35%
Company, Ltd.
CP IV: Pandan-Caramoran-Codon Road - 66.40 kms.11
The bid of private respondent China Road & Bridge Corporation was
Subsequently, the DPWH, as the government agency tasked to
corrected from the original ₱993,183,904.98 (with variance of 34.45%
implement the project, caused the publication of the "Invitation to
from the ABC) to ₱952,564,821.71 (with variance of 28.95% from the
Prequalify and to Bid" for the implementation of the CP I project in two
ABC) based on their letter clarification dated April 21, 2004.14
leading national newspapers, namely, the Manila Times and Manila
Standard on November 22 and 29, and December 5, 2002.
After further evaluation of the bids, particularly those of the lowest three
bidders, Mr. Hedifume Ezawa, Project Manager of the Catanduanes
A total of twenty-three (23) foreign and local contractors responded to the
Circumferential Road Improvement Project (CCRIP), in his Contractor’s
invitation by submitting their accomplished prequalification documents on
Bid Evaluation Report dated April 2004, recommended the award of the
January 23, 2003. In accordance with the established prequalification
contract to private respondent China Road & Bridge Corporation:
criteria, eight contractors were evaluated or considered eligible to bid as
concurred by the JBIC. One of them, however, withdrew; thus, only seven
contractors submitted their bid proposals. In accordance with the Guidelines for the Procurements under ODA
[Official Development Assistance] Loans, the Consultant hereby
recommends the award of the contract for the construction of CP I, San
The bid documents submitted by the prequalified contractors/bidders
Andres (Codon) – Virac – Jct. Bato – Viga Section under the Arterial
were examined to determine their compliance with the requirements as
Road Links Development Projects, Phase IV, JBIC Loan No. PH-P204 to
stipulated in Article 6 of the Instruction to Bidders.12 After the lapse of the
the Lowest Complying Bidder, China Road and Bridge Corporation, at its
deadline for the submission of bid proposals, the opening of the bids
total corrected bid amount of Nine Hundred Fifty-Two Million Five
commenced immediately. Prior to the opening of the respective bid
Hundred Sixty-Four Thousand Eight Hundred Twenty-One & 71/100
proposals, it was announced that the Approved Budget for the Contract
Pesos.15
(ABC) was in the amount of ₱738,710,563.67.
The BAC of the DPWH, with the approval of then Acting Secretary
The result of the bidding revealed the following three lowest bidders and
Soriquez, issued the assailed Resolution No. PJHL-A-04-012 dated May
their respective bids vis-à-vis the ABC:13
7, 2004 recommending the award in favor of private respondent China
Road & Bridge Corporation of the contract for the implementation of civil
works for CP I, San Andres (Codon) – Virac – Jct. Bato – Viga Road
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
(Catanduanes Circumferential Road Improvement Project) of the Arterial
Roads Links Development Project, Phase IV, located in Catanduanes
Province, under JBIC Loan Agreement No. PH-P204.16 On September
29, 2004, a Contract of Agreement was entered into by and between the
DPWH and private respondent China Road & Bridge Corporation for the
implementation of the CP I project.
The Parties
Petitioner Plaridel M. Abaya claims that he filed the instant petition as a
taxpayer, former lawmaker, and a Filipino citizen. Petitioner Plaridel C.
Garcia likewise claims that he filed the suit as a taxpayer, former military
officer, and a Filipino citizen. Petitioner PMA ’59 Foundation, Inc., on the
other hand, is a non-stock, non-profit corporation organized under the
existing Philippine laws. It claims that its members are all taxpayers and
alumni of the Philippine Military Academy. It is represented by its
President, Carlos L. Agustin.
Named as public respondents are the DPWH, as the government agency
tasked with the implementation of government infrastructure projects; the
Department of Budget and Management (DBM) as the government
agency that authorizes the release and disbursement of public funds for
the implementation of government infrastructure projects; and the
Department of Finance (DOF) as the government agency that acts as the
custodian and manager of all financial resources of the government. Also
named as individual public respondents are Hermogenes E. Ebdane, Jr.,
Emilia T. Boncodin and Cesar V. Purisima in their capacities as former
Secretaries of the DPWH, DBM and DOF, respectively. On the other
hand, public respondent Norma L. Lasala was impleaded in her capacity
as Treasurer of the Bureau of Treasury.
Private respondent China Road & Bridge Corporation is a duly organized
corporation engaged in the business of construction.
The Petitioners’ Case
The petitioners mainly seek to nullify DPWH Resolution No. PJHL-A-04-
012 dated May 7, 2004, which recommended the award to private
respondent China Road & Bridge Corporation of the contract for the
implementation of the civil works of CP I. They also seek to annul the
contract of agreement subsequently entered into by and between the
DPWH and private respondent China Road & Bridge Corporation
pursuant to the said resolution.
They pose the following issues for the Court’s resolution:
I. Whether or not Petitioners have standing to file the instant
Petition.
II. Whether or not Petitioners are entitled to the issuance of a Writ
of Certiorari reversing and setting aside DPWH Resolution No.
PJHL-A-04-012, recommending the award of the Contract
Agreement for the implementation of civil works for CPI, San
Andres (CODON)-VIRAC-JCT BATO-VIGA ROAD
(CATANDUANES CIRCUMFERENTIAL ROAD IMPROVEMENT
PROJECT) of the Arterial Road Links Development Project,
Phase IV, located in Catanduanes Province, under JBIC L/A No.
PH-P204, to China Road & Bridge Corporation.
III. Whether or not the Contract Agreement executed by and
between the Republic of the Philippines, through the Department
of Public Works and Highways, and the China Road & Bridge
Corporation, for the implementation of civil works for CPI, San
Andres (CODON)-VIRAC-JCT BATO-VIGA ROAD
(CATANDUANES CIRCUMFERENTIAL ROAD IMPROVEMENT
PROJECT) of the Arterial Road Links Development Project,
Phase IV, located in Catanduanes Province, under JBIC L/A No.
PH-P204, is void ab initio.
IV. Whether or not Petitioners are entitled to the issuance of a
Writ of Prohibition permanently prohibiting the implementation of
DPWH Resolution No. PJHL-A-04-012 and the Contract
Agreement executed by and between the Republic of the
Philippines (through the Department of Public Works and
Highways) and the China Road & Bridge Corporation, and the
disbursement of public funds by the [D]epartment of [B]udget and
[M]anagement for such purpose.
V. Whether or not Petitioners are entitled to a Preliminary
Injunction and/or a Temporary Restraining Order immediately
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
enjoining the implementation of DPWH Resolution No. PJHL-A-
04-012 and the Contract Agreement executed by and between
the Republic of the Philippines (through the Department of Public
Works and Highways) and the China Road & Bridge Corporation,
and the disbursement of public funds by the Department of
Budget and Management for such purpose, during the pendency
of this case.17
Preliminarily, the petitioners assert that they have standing or locus
standi to file the instant petition. They claim that as taxpayers and
concerned citizens, they have the right and duty to question the
expenditure of public funds on illegal acts. They point out that the
Philippine Government allocates a peso-counterpart for CP I, which
amount is appropriated by Congress in the General Appropriations Act;
hence, funds that are being utilized in the implementation of the
questioned project also partake of taxpayers’ money. The present action,
as a taxpayers’ suit, is thus allegedly proper.
They likewise characterize the instant petition as one of transcendental
importance that warrants the Court’s adoption of a liberal stance on the
issue of standing. It cited several cases where the Court brushed aside
procedural technicalities in order to resolve issues involving paramount
public interest and transcendental importance.18 Further, petitioner Abaya
asserts that he possesses the requisite standing as a former member of
the House of Representatives and one of the principal authors of
Republic Act No. 9184 (RA 9184)19 known as the Government
Procurement Reform Act, the law allegedly violated by the public
respondents.
On the substantive issues, the petitioners anchor the instant petition on
the contention that the award of the contract to private respondent China
Road & Bridge Corporation violates RA 9184, particularly Section 31
thereof which reads:
SEC. 31. Ceiling for Bid Prices. – The ABC shall be the upper limit or
ceiling for the Bid prices. Bid prices that exceed this ceiling shall be
disqualified outright from further participating in the bidding. There shall
be no lower limit to the amount of the award.
In relation thereto, the petitioners cite the definition of the ABC, thus:
SEC. 5. Definition of Terms. –
xxx
(a) Approved Budget for the Contract (ABC). – refers to the budget for
the contract duly approved by the Head of the Procuring Entity, as
provided for in the General Appropriations Act and/or continuing
appropriations, in the case of National Government Agencies; the
Corporate Budget for the contract approved by the governing Boards,
pursuant to E.O. No. 518, series of 1979, in the case of Government-
Owned and/or Controlled Corporations, Government Financial Institutions
and State Universities and Colleges; and the Budget for the contract
approved by the respective Sanggunian, in the case of Local
Government Units.
xxx
The petitioners theorize that the foregoing provisions show the
mandatory character of ceilings or upper limits of every bid. Under the
above-quoted provisions of RA 9184, all bids or awards should not
exceed the ceilings or upper limits; otherwise, the contract is deemed
void and inexistent.
Resolution No. PJHL-A-04-012 was allegedly issued with grave abuse of
discretion because it recommended the award of the contract to private
respondent China Road & Bridge Corporation whose bid was more than
₱200 million overpriced based on the ABC. As such, the award is
allegedly illegal and unconscionable.
In this connection, the petitioners opine that the contract subsequently
entered into by and between the DPWH and private respondent China
Road & Bridge Corporation is void ab initio for being prohibited by RA
9184. They stress that Section 31 thereof expressly provides that "bid
prices that exceed this ceiling shall be disqualified outright from
participating in the bidding." The upper limit or ceiling is called the ABC
and since the bid of private respondent China Road & Bridge Corporation
exceeded the ABC for the CP I project, it should have been allegedly
disqualified from the bidding process and should not, by law, have been
awarded the said contract. They invoke Article 1409 of the Civil Code:
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
ART. 1409. The following contracts are inexistent and void from the
beginning:
(1) Those whose cause, object or purpose is contrary to law,
morals, good customs, public order or public policy;
(2) Those which are absolutely simulated or fictitious;
(3) Those whose cause or object did not exist at the time of the
transaction;
(4) Those whose object is outside the commerce of men;
(5) Those which contemplate an impossible service;
(6) Those where the intention of the parties relative to the
principal object of the contract cannot be ascertained;
(7) Those expressly prohibited or declared void by law.
For violating the above provision, the contract between the DPWH and
private respondent China Road & Bridge Corporation is allegedly
inexistent and void ab initio and can produce no effects whatsoever.
It is the contention of the petitioners that RA 9184 is applicable to both
local- and foreign-funded procurement contracts. They cite the following
excerpt of the deliberations of the Bicameral Conference Committee on
the Disagreeing Provisions of Senate Bill No. 2248 and House Bill No.
4809:20
REP. ABAYA. Mr. Chairman, can we just propose additional
amendments? Can we go back to Section 4, Mr. Chairman?
THE CHAIRMAN (SEN. ANGARA). Section? Section ano, Del, 4?
Definition – definition of terms.
REP. ABAYA. Sa House bill, it is sa scope and application.
THE CHAIRMAN (SEN. ANGARA). Okay.
REP. ABAYA. It should read as follows: "This Act shall apply to the
procurement of goods, supplies and materials, infrastructure projects and
consulting services regardless of funding source whether local or foreign
by the government."
THE CHAIRMAN (SEN. ANGARA). Okay, accepted. We accept. The
Senate accepts it.21
xxx xxx xxx
THE CHAIRMAN (SEN ANGARA). Just take note of that ano. Medyo nga
problematic ‘yan eh. Now, just for the record Del, can you repeat again
the justification for including foreign funded contracts within the scope
para malinaw because the World Bank daw might raise some objection to
it.
REP. ABAYA. Well, Mr. Chairman, we should include foreign funded
projects kasi these are the big projects. To give an example, if you allow
bids above government estimate, let’s say take the case of 500 million
project, included in that 500 million is the 20 percent profit. If you allow
them to bid above government estimate, they will add another say 28
percent of (sic) 30 percent, 30 percent of 500 million is another 150
million. Ito, this is a rich source of graft money, aregluhan na lang, 150
million, five contractors will gather, "O eto 20 million, 20 million, 20
million." So, it is rigged. ‘Yun ang practice na nangyayari. If we eliminate
that, if we have a ceiling then, it will not be very tempting kasi walang
extra money na pwedeng ibigay sa ibang contractor. So this promote
(sic) collusion among bidders, of course, with the cooperation of
irresponsible officials of some agencies. So we should have a ceiling to
include foreign funded projects.22
The petitioners insist that Loan Agreement No. PH-P204 between the
JBIC and the Philippine Government is neither a treaty, an international
nor an executive agreement that would bar the application of RA 9184.
They point out that to be considered a treaty, an international or an
executive agreement, the parties must be two sovereigns or States
whereas in the case of Loan Agreement No. PH-P204, the parties are the
Philippine Government and the JBIC, a banking agency of Japan, which
has a separate juridical personality from the Japanese Government.
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
They further insist on the applicability of RA 9184 contending that while it
took effect on January 26, 200323 and Loan Agreement No. PH-P204
was executed prior thereto or on December 28, 1999, the actual
procurement or award of the contract to private respondent China Road
& Bridge Corporation was done after the effectivity of RA 9184. The said
law is allegedly specific as to its application, which is on the actual
procurement of infrastructure and other projects only, and not on the loan
agreements attached to such projects. Thus, the petition only prays for
the annulment of Resolution No. PJHL-A-04-012 as well as the contract
between the DPWH and private respondent China Road & Bridge
Corporation. The petitioners clarify that they do not pray for the
annulment of Loan Agreement No. PH-P204. Since the subject
procurement and award of the contract were done after the effectivity of
RA 9184, necessarily, the procurement rules established by that law
allegedly apply, and not Presidential Decree No. 1594 (PD 1594)24 and
Executive Order No. 40 (EO 40), series of 2001, 25 as contended by the
respondents. The latter laws, including their implementing rules, have
allegedly been repealed by RA 9184. Even RA 4860, as amended,
known as the Foreign Borrowings Act, the petitioners posit, may have
also been repealed or modified by RA 9184 insofar as its provisions are
inconsistent with the latter.
The petitioners also argue that the "Implementing Rules and Regulations
(IRR) of RA 9184, Otherwise Known as the Government Procurement
Reform Act, Part A" (IRR-A) cited by the respondents is not applicable as
these rules only govern domestically-funded procurement contracts. They
aver that the implementing rules to govern foreign-funded procurement,
as in the present case, have yet to be drafted and in fact, there are
concurrent resolutions drafted by both houses of Congress for the
Reconvening of the Joint Congressional Oversight Committee for the
formulation of the IRR for foreign-funded procurements under RA 9184.
The petitioners maintain that disbursement of public funds to implement a
patently void and illegal contract is itself illegal and must be enjoined.
They bring to the Court’s attention the fact that the works on the CP I
project have already commenced as early as October 2004. They thus
urge the Court to issue a writ of certiorari to set aside Resolution No.
PJHL-A-04-012 as well as to declare null and void the contract entered
into between the DPWH and private respondent China Road & Bridge
Corporation. They also pray for the issuance of a temporary restraining
order and, eventually, a writ of prohibition to permanently enjoin the
DPWH from implementing Resolution No. PJHL-A-04-012 and its
contract with private respondent China Road & Bridge Corporation as
well as the DBM from disbursing funds for the said purpose.
The Respondents’ Counter-Arguments
The public respondents, namely the DPWH, DBM and DOF, and their
respective named officials, through the Office of the Solicitor General,
urge the Court to dismiss the petition on grounds that the petitioners have
no locus standi and, in any case, Resolution No. PJHL-A-04-012 and the
contract between the DPWH and private respondent China Road &
Bridge Corporation are valid.
According to the public respondents, a taxpayer’s locus standi was
recognized in the following cases: (a) where a tax measure is assailed as
unconstitutional;26 (b) where there is a question of validity of election
laws;27 (c) where legislators questioned the validity of any official action
upon the claim that it infringes on their prerogatives as legislators;28 (d)
where there is a claim of illegal disbursement or wastage of public funds
through the enforcement of an invalid or unconstitutional law;29 (e) where
it involves the right of members of the Senate or House of
Representatives to question the validity of a presidential veto or condition
imposed on an item in an appropriation bill;30 or (f) where it involves an
invalid law, which when enforced will put the petitioner in imminent
danger of sustaining some direct injury as a result thereof, or that he has
been or is about to be denied some right or privilege to which he is
lawfully entitled or that he is about to be subjected to some burdens or
penalties by reason of the statute complained of.31 None of the above
considerations allegedly obtains in the present case.
It is also the view of the public respondents that the fact that petitioner
Abaya was a former lawmaker would not suffice to confer locus standi on
himself. Members of Congress may properly challenge the validity of an
official act of any department of the government only upon showing that
the assailed official act affects or impairs their rights and prerogatives as
legislators.
The public respondents further assail the standing of the petitioners to file
the instant suit claiming that they failed to allege any specific injury
suffered nor an interest that is direct and personal to them. If at all, the
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
interest or injuries claimed by the petitioners are allegedly merely of a
general interest common to all members of the public. Their interest is
allegedly too vague, highly speculative and uncertain to satisfy the
requirements of locus standi.
The public respondents find it noteworthy that the petitioners do not raise
issues of constitutionality but only of contract law, which the petitioners
not being privies to the agreement cannot raise. This is following the
principle that a stranger to a contract cannot sue either or both the
contracting parties to annul and set aside the same except when he is
prejudiced on his rights and can show detriment which would positively
result to him from the implementation of the contract in which he has no
intervention. There being no particularized interest or elemental
substantial injury necessary to confer locus standi, the public
respondents implore the Court to dismiss the petition.
On the merits, the public respondents maintain that the imposition of
ceilings or upper limits on bid prices in RA 9184 does not apply because
the CP I project and the entire Catanduanes Circumferential Road
Improvement Project, financed by Loan Agreement No. PH-P204
executed between the Philippine Government and the JBIC, is governed
by the latter’s Procurement Guidelines which precludes the imposition of
ceilings on bid prices. Section 5.06 of the JBIC Procurement Guidelines
reads:
Section 5.06. Evaluation and Comparison of Bids.
xxx
(e) Any procedure under which bids above or below a predetermined bid
value assessment are automatically disqualified is not permitted.
It was explained that other foreign banks such as the Asian Development
Bank (ADB) and the World Bank (WB) similarly prohibit the bracketing or
imposition of a ceiling on bid prices.
The public respondents stress that it was pursuant to Loan Agreement
No. PH-P204 that the assailed Resolution No. PJHL-A-04-012 and the
subsequent contract between the DPWH and private respondent China
Road & Bridge Corporation materialized. They likewise aver that Loan
Agreement No. PH-P204 is governed by RA 4860, as amended, or the
Foreign Borrowings Act. Section 4 thereof states:
SEC. 4. In the contracting of any loan, credit or indebtedness under this
Act, the President of the Philippines may, when necessary, agree to
waive or modify, the application of any law granting preferences or
imposing restrictions on international competitive bidding, including
among others [Act No. 4239, Commonwealth Act No. 138], the provisions
of [CA 541], insofar as such provisions do not pertain to constructions
primarily for national defense or security purposes, [RA 5183]; Provided,
however, That as far as practicable, utilization of the services of qualified
domestic firms in the prosecution of projects financed under this Act shall
be encouraged: Provided, further, That in case where international
competitive bidding shall be conducted preference of at least fifteen per
centum shall be granted in favor of articles, materials or supplies of the
growth, production or manufacture of the Philippines: Provided, finally,
That the method and procedure in comparison of bids shall be the
subject of agreement between the Philippine Government and the
lending institution.
DOJ Opinion No. 46, Series of 1987, is relied upon by the public
respondents as it opined that an agreement for the exclusion of foreign
assisted projects from the coverage of local bidding regulations does not
contravene existing legislations because the statutory basis for foreign
loan agreements is RA 4860, as amended, and under Section 4 thereof,
the President is empowered to waive the application of any law imposing
restrictions on the procurement of goods and services pursuant to such
loans.
Memorandum Circular Nos. 104 and 108, issued by the President, to
clarify RA 4860, as amended, and PD 1594, relative to the award of
foreign-assisted projects, are also invoked by the public respondents, to
wit:
Memorandum Circular No. 104:
In view of the provisions of Section 4 of Republic Act No. 4860, as
amended, otherwise known as the "Foreign Borrowings Act"
xxx
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
It is hereby clarified that foreign-assisted infrastructure projects may be
exempted from the application for the pertinent provisions of the
Implementing Rules and Regulations (IRR) of Presidential Decree (P.D.)
No. 1594 relative to the method and procedure in the comparison of bids,
which matter may be the subject of agreement between the infrastructure
agency concerned and the lending institution. It should be made clear
however that public bidding is still required and can only be waived
pursuant to existing laws.
Memorandum Circular No. 108:
In view of the provisions of Section 4 of Republic Act No. 4860, as
amended, otherwise known as the "Foreign Borrowings Act", it is hereby
clarified that, for projects supported in whole or in part by foreign
assistance awarded through international or local competitive bidding, the
government agency concerned may award the contract to the lowest
evaluated bidder at his bid price consistent with the provisions of the
applicable loan/grant agreement.
Specifically, when the loan/grant agreement so stipulates, the
government agency concerned may award the contract to the lowest
bidder even if his/its bid exceeds the approved agency estimate.
It is understood that the concerned government agency shall, as far as
practicable, adhere closely to the implementing rules and regulations of
Presidential Decree No. 1594 during loan/grant negotiation and the
implementation of the projects.32
The public respondents characterize foreign loan agreements, including
Loan Agreement No. PH-P204, as executive agreements and, as such,
should be observed pursuant to the fundamental principle in international
law of pacta sunt servanda.33 They cite Section 20 of Article VII of the
Constitution as giving the President the authority to contract foreign
loans:
SEC. 20. The President may contract or guarantee foreign loans on
behalf of the Republic of the Philippines with the prior concurrence of the
Monetary Board, and subject to such limitations as may be provided by
law. The Monetary Board shall, within thirty days from the end of every
quarter of the calendar year, submit to the Congress a complete report of
its decisions on applications for loans to be contracted or guaranteed by
the Government or Government-owned and Controlled Corporations
which would have the effect of increasing the foreign debt, and containing
other matters as may be provided by law.
The Constitution, the public respondents emphasize, recognizes the
enforceability of executive agreements in the same way that it recognizes
generally accepted principles of international law as forming part of the
law of the land.34 This recognition allegedly buttresses the binding effect
of executive agreements to which the Philippine Government is a
signatory. It is pointed out by the public respondents that executive
agreements are essentially contracts governing the rights and obligations
of the parties. A contract, being the law between the parties, must be
faithfully adhered to by them. Guided by the fundamental rule of pacta
sunt servanda, the Philippine Government bound itself to perform in good
faith its duties and obligations under Loan Agreement No. PH-P204.
The public respondents further argue against the applicability of RA 9184
stating that it was signed into law on January 10, 2003.35 On the other
hand, Loan Agreement No. PH-P204 was executed on December 28,
1999, where the laws then in force on government procurements were
PD 1594 and EO 40. The latter law (EO 40), in particular, excluded from
its application "any existing and future government commitments with
respect to the bidding and award of contracts financed partly or wholly
with funds from international financing institutions as well as from bilateral
and other similar foreign sources."
The applicability of EO 40, not RA 9184, is allegedly bolstered by the fact
that the "Invitation to Prequalify and to Bid" for the implementation of the
CP I project was published in two leading national newspapers, namely,
the Manila Times and Manila Standard on November 22, 29 and
December 5, 2002, or before the signing into law of RA 9184 on January
10, 2003. In this connection, the public respondents point to Section 77 of
IRR-A, which reads:
SEC. 77. Transitory Clause. –
In all procurement activities, if the advertisement or invitation for bids was
issued prior to the effectivity of the Act, the provisions of EO 40 and its
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
IRR, PD 1594 and its IRR, RA 7160 and its IRR, or other applicable laws
as the case may be, shall govern.
In cases where the advertisements or invitations for bids were issued
after the effectivity of the Act but before the effectivity of this IRR-A,
procuring entities may continue adopting the procurement procedures,
rules and regulations provided in EO 40 and its IRR, or other applicable
laws, as the case may be.
Section 4 of RA 9184 is also invoked by the public respondents as it
provides:
SEC. 4. Scope and Applications. – This Act shall apply to the
Procurement of Infrastructure Projects, Goods and Consulting Services,
regardless of source of funds, whether local or foreign, by all branches
and instrumentalities of government, its departments, offices and
agencies, including government-owned and/or –controlled corporations
and local government units, subject to the provisions of Commonwealth
Act No. 138. Any treaty or international or executive agreement affecting
the subject matter of this Act to which the Philippine government is a
signatory shall be observed.
It is also the position of the public respondents that even granting
arguendo that Loan Agreement No. PH-P204 were an ordinary loan
contract, still, RA 9184 is inapplicable under the non-impairment
clause36 of the Constitution. The said loan agreement expressly provided
that the procurement of goods and services for the project financed by
the same shall be governed by the Guidelines for Procurement under
OECF Loans dated December 1997. Further, Section 5.06 of the JBIC
Procurement Guidelines categorically provides that "[a]ny procedure
under which bids above or below a predetermined bid value assessment
are automatically disqualified is not permitted."
The public respondents explain that since the contract is the law between
the parties and Loan Agreement No. PH-P204 states that the JBIC
Procurement Guidelines shall govern the parties’ relationship and further
dictates that there be no ceiling price for the bidding, it naturally follows
that any subsequent law passed contrary to the letters of the said
contract would have no effect with respect to the parties’ rights and
obligations arising therefrom.
To insist on the application of RA 9184 on the bidding for the CP I project
would, notwithstanding the terms and conditions of Loan Agreement No.
PH-P204, allegedly violate the constitutional provision on non-impairment
of obligations and contracts, and destroy vested rights duly acquired
under the said loan agreement.
Lastly, the public respondents deny that there was illegal disbursement of
public funds by the DBM. They asseverate that all the releases made by
the DBM for the implementation of the entire Arterial Road Links Project –
Phase IV, which includes the Catanduanes Circumferential Road
Improvement Project, were covered by the necessary appropriations
made by law, specifically the General Appropriations Act (GAA). Further,
the requirements and procedures prescribed for the release of the said
funds were duly complied with.
For its part, private respondent China Road & Bridge Corporation
similarly assails the standing of the petitioners, either as taxpayers or, in
the case of petitioner Abaya, as a former lawmaker, to file the present
suit. In addition, it is also alleged that, by filing the petition directly to this
Court, the petitioners failed to observe the hierarchy of courts.
On the merits, private respondent China Road & Bridge Corporation
asserts that the applicable law to govern the bidding of the CP I project
was EO 40, not RA 9184, because the former was the law governing the
procurement of government projects at the time that it was bidded out.
EO 40 was issued by the Office of the President on October 8, 2001 and
Section 1 thereof states that:
SEC. 1. Scope and Application. This Executive Order shall apply to the
procurement of: (a) goods, supplies, materials and related services; (b)
civil works; and (c) consulting services, by all National Government
agencies, including State Universities and Colleges (SUCs),
Government-Owned or Controlled Corporations (GOCCs) and
Government Financial Institutions (GFIs), hereby referred to as the
‘Agencies.’ This Executive Order shall cover the procurement process
from the pre-procurement conference up to the award of contract.
xxx
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
The Invitation to Prequalify and to Bid was first published on November
22, 2002. On the other hand, RA 9184 was signed into law only on
January 10, 2003. Since the law in effect at the time the procurement
process was initiated was EO 40, private respondent China Road &
Bridge Corporation submits that it should be the said law which should
govern the entire procurement process relative to the CP I project.
EO 40 expressly recognizes as an exception from the application of the
provisions thereof on approved budget ceilings, those projects financed
by international financing institutions (IFIs) and foreign bilateral sources.
Section 1 thereof, quoted in part earlier, further states:
SEC. 1. Scope and Application. x x x
Nothing in this Order shall negate any existing and future government
commitments with respect to the bidding and award of contracts financed
partly or wholly with funds from international financing institutions as well
as from bilateral and other similar foreign sources.
Section 1.2 of the Implementing Rules and Regulations of EO 40 is
likewise invoked as it provides:
For procurement financed wholly or partly from Official Development
Assistance (ODA) funds from International Financing Institutions (IFIs),
as well as from bilateral and other similar foreign sources, the
corresponding loan/grant agreement governing said funds as negotiated
and agreed upon by and between the Government and the concerned IFI
shall be observed.
Private respondent China Road & Bridge Corporation thus postulates that
following EO 40, the procurement of goods and services for the CP I
project should be governed by the terms and conditions of Loan
Agreement No. PH-P204 entered into between the JBIC and the
Philippine Government. Pertinently, Section 5.06 of the JBIC
Procurement Guidelines prohibits the setting of ceilings on bid prices.
Private respondent China Road & Bridge Corporation claims that when it
submitted its bid for the CP I project, it relied in good faith on the
provisions of EO 40. It was allegedly on the basis of the said law that the
DPWH awarded the project to private respondent China Road & Bridge
Coporation even if its bid was higher than the ABC. Under the
circumstances, RA 9184 could not be applied retroactively for to do so
would allegedly impair the vested rights of private respondent China
Road & Bridge Corporation arising from its contract with the DPWH.
It is also contended by private respondent China Road & Bridge
Corporation that even assuming arguendo that RA 9184 could be applied
retroactively, it is still the terms of Loan Agreement No. PH-P204 which
should govern the procurement of goods and services for the CP I
project. It supports its theory by characterizing the said loan agreement,
executed pursuant to the Exchange of Notes between the Government of
Japan and the Philippine Government, as an executive agreement.
Private respondent China Road & Bridge Corporation, like the public
respondents, cites RA 4860 as the basis for the Exchange of Notes and
Loan Agreement No. PH-P204. As an international or executive
agreement, the Exchange of Notes and Loan Agreement No. PH-P204
allegedly created a legally binding obligation on the parties.
The following excerpt of the deliberations of the Bicameral Conference
Committee on the Disagreeing Provision of Senate Bill No. 2248 and
House Bill No. 4809 is cited by private respondent China Road & Bridge
Corporation to support its contention that it is the intent of the lawmakers
to exclude from the application of RA 9184 those foreign-funded projects:
xxx
REP. MARCOS. Yes, Mr. Chairman, to respond and to put into the
record, a justification for the inclusion of foreign contracts, may we just
state that foreign contracts have, of course, been brought into the ambit
of the law because of the Filipino counterpart for this foreign projects,
they are no longer strictly foreign in nature but fall under the laws of the
Philippine government.
THE CHAIRMAN (SEN. ANGARA). Okay. I think that’s pretty clear. I
think the possible concern is that some ODA are with strings attached
especially the Japanese. The Japanese are quite strict about that, that
they are (sic) even provide the architect and the design, etcetera, plus, of
course, the goods that will be supplied.
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
Now, I think we’ve already provided that this is open to all and we will
recognize our international agreements so that this bill will not also
restrict the flow of foreign funding, because some countries now make it
a condition that they supply both services and goods especially the
Japanese.
So I think we can put a sentence that we continue to honor our
international obligations, di ba Laura?
MR. ENCARNACION. Actually, subject to any treaty.
THE CHAIRMAN (SEN. ANGARA). ‘Yun pala eh. That should allay their
anxiety and concern. Okay, buti na lang for the record para malaman nila
na we are conscious sa ODA.37
Private respondent China Road & Bridge Corporation submits that based
on the provisions of the Exchange of Notes and Loan Agreement No. PH-
P204, it was rightfully and legally awarded the CP I project. It urges the
Court to dismiss the petition for lack of merit.
The Court’s Rulings
Petitioners, as taxpayers, possess locus standi to file the present suit
Briefly stated, locus standi is "a right of appearance in a court of justice
on a given question."38 More particularly, it is a party’s personal and
substantial interest in a case such that he has sustained or will sustain
direct injury as a result of the governmental act being challenged. It calls
for more than just a generalized grievance. The term "interest" means a
material interest, an interest in issue affected by the decree, as
distinguished from mere interest in the question involved, or a mere
incidental interest.39 Standing or locus standi is a peculiar concept in
constitutional law40 and the rationale for requiring a party who challenges
the constitutionality of a statute to allege such a personal stake in the
outcome of the controversy is "to assure that concrete adverseness
which sharpens the presentation of issues upon which the court so
largely depends for illumination of difficult constitutional questions."41
Locus standi, however, is merely a matter of procedure42 and it has been
recognized that in some cases, suits are not brought by parties who have
been personally injured by the operation of a law or any other
government act but by concerned citizens, taxpayers or voters who
actually sue in the public interest.43 Consequently, the Court, in a catena
of cases,44 has invariably adopted a liberal stance on locus standi,
including those cases involving taxpayers.
The prevailing doctrine in taxpayer’s suits is to allow taxpayers to
question contracts entered into by the national government or
government- owned or controlled corporations allegedly in contravention
of law.45 A taxpayer is allowed to sue where there is a claim that public
funds are illegally disbursed, or that public money is being deflected to
any improper purpose, or that there is a wastage of public funds through
the enforcement of an invalid or unconstitutional law.46 Significantly, a
taxpayer need not be a party to the contract to challenge its validity.47
In the present case, the petitioners are suing as taxpayers. They have
sufficiently demonstrated that, notwithstanding the fact that the CP I
project is primarily financed from loans obtained by the government from
the JBIC, nonetheless, taxpayers’ money would be or is being spent on
the project considering that the Philippine Government is required to
allocate a peso-counterpart therefor. The public respondents themselves
admit that appropriations for these foreign-assisted projects in the GAA
are composed of the loan proceeds and the peso-counterpart. The
counterpart funds, the Solicitor General explains, refer to the component
of the project cost to be financed from government-appropriated funds,
as part of the government’s commitment in the implementation of the
project.48 Hence, the petitioners correctly asserted their standing since a
part of the funds being utilized in the implementation of the CP I project
partakes of taxpayers’ money.
Further, the serious legal questions raised by the petitioners, e.g.,
whether RA 9184 applies to the CP I project, in particular, and to foreign-
funded government projects, in general, and the fact that public interest is
indubitably involved considering the public expenditure of millions of
pesos, warrant the Court to adopt in the present case its liberal policy on
locus standi.
In any case, for reasons which will be discussed shortly, the substantive
arguments raised by the petitioners fail to persuade the Court as it holds
that Resolution No. PJHL-A-04-012 is valid. As a corollary, the
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
subsequent contract entered into by and between the DPWH and private
respondent China Road & Bridge Corporation is likewise valid.
History of Philippine Procurement Laws
It is necessary, at this point, to give a brief history of Philippine laws
pertaining to procurement through public bidding. The United States
Philippine Commission introduced the American practice of public bidding
through Act No. 22, enacted on October 15, 1900, by requiring the Chief
Engineer, United States Army for the Division of the Philippine Islands,
acting as purchasing agent under the control of the then Military
Governor, to advertise and call for a competitive bidding for the purchase
of the necessary materials and lands to be used for the construction of
highways and bridges in the Philippine Islands.49 Act No. 74, enacted on
January 21, 1901 by the Philippine Commission, required the General
Superintendent of Public Instruction to purchase office supplies through
competitive public bidding.50 Act No. 82, approved on January 31, 1901,
and Act No. 83, approved on February 6, 1901, required the municipal
and provincial governments, respectively, to hold competitive public
biddings in the making of contracts for public works and the purchase of
office supplies.51
On June 21, 1901, the Philippine Commission, through Act No. 146,
created the Bureau of Supply and with its creation, public bidding
became a popular policy in the purchase of supplies, materials and
equipment for the use of the national government, its subdivisions and
instrumentalities.52 On February 3, 1936, then President Manuel L.
Quezon issued Executive Order No. 16 declaring as a matter of general
policy that government contracts for public service or for furnishing
supplies, materials and equipment to the government should be
subjected to public bidding.53 The requirement of public bidding was
likewise imposed for public works of construction or repair pursuant to the
Revised Administrative Code of 1917.
Then President Diosdado Macapagal, in Executive Order No. 40 dated
June 1, 1963, reiterated the directive that no government contract for
public service or for furnishing supplies, materials and equipment to the
government or any of its branches, agencies or instrumentalities, should
be entered into without public bidding except for very extraordinary
reasons to be determined by a Committee constituted thereunder. Then
President Ferdinand Marcos issued PD 1594 prescribing guidelines for
government infrastructure projects and Section 454 thereof stated that
they should generally be undertaken by contract after competitive public
bidding.
Then President Corazon Aquino issued Executive Order No. 301 (1987)
prescribing guidelines for government negotiated contracts. Pertinently,
Section 62 of the Administrative Code of 1987 reiterated the requirement
of competitive public bidding in government projects. In 1990, Congress
passed RA 6957,55 which authorized the financing, construction,
operation and maintenance of infrastructure by the private sector. RA
7160 was likewise enacted by Congress in 1991 and it contains
provisions governing the procurement of goods and locally-funded civil
works by the local government units.
Then President Fidel Ramos issued Executive Order No. 302 (1996),
providing guidelines for the procurement of goods and supplies by the
national government. Then President Joseph Ejercito Estrada issued
Executive Order No. 201 (2000), providing additional guidelines in the
procurement of goods and supplies by the national government.
Thereafter, he issued Executive Order No. 262 (2000) amending EO 302
(1996) and EO 201 (2000).
On October 8, 2001, President Gloria Macapagal-Arroyo issued EO 40,
the law mainly relied upon by the respondents, entitled Consolidating
Procurement Rules and Procedures for All National Government
Agencies, Government-Owned or Controlled Corporations and
Government Financial Institutions, and Requiring the Use of the
Government Procurement System. It accordingly repealed, amended or
modified all executive issuances, orders, rules and regulations or parts
thereof inconsistent therewith.56
On January 10, 2003, President Arroyo signed into law RA 9184. It took
effect on January 26, 2004, or fifteen days after its publication in two
newspapers of general circulation.57 It expressly repealed, among others,
EO 40, EO 262 (2000), EO 302(1996) and PD 1594, as amended:
SEC. 76. Repealing Clause. —This law repeals Executive Order No. 40,
series of 2001, entitled "Consolidating Procurement Rules and
Procedures for All National Government Agencies, Government Owned
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
or Controlled Corporations and/or Government Financial Institutions, and
Requiring the Use of the Government Electronic Procurement System";
Executive Order No. 262, series of 1996, entitled "Amending Executive
Order No. 302, series of 1996, entitled Providing Policies, Guidelines,
Rules and Regulations for the Procurement of Goods/Supplies by the
National Government" and Section 3 of Executive Order No. 201, series
of 2000, entitled "Providing Additional Policies and Guidelines in the
Procurement of Goods/Supplies by the National Government"; Executive
Order No. 302, series of 1996, entitled "Providing Policies, Guidelines,
Rules and Regulations for the Procurement of Goods/Supplies by the
National Government" and Presidential Decree No. 1594 dated June 11,
1978, entitled "Prescribing Policies, Guidelines, Rules and Regulations
for Government Infrastructure Contracts." This law amends Title Six,
Book Two of Republic Act No. 7160, otherwise known as the "Local
Government Code of 1991"; the relevant provisions of Executive Order
No. 164, series of 1987, entitled "Providing Additional Guidelines in the
Processing and Approval of Contracts of the National Government"; and
the relevant provisions of Republic Act No. 7898 dated February 23,
1995, entitled "An Act Providing for the Modernization of the Armed
Forces of the Philippines and for Other Purposes." Any other law,
presidential decree or issuance, executive order, letter of instruction,
administrative order, proclamation, charter, rule or regulation and/or parts
thereof contrary to or inconsistent with the provisions of this Act is hereby
repealed, modified or amended accordingly.
In addition to these laws, RA 4860, as amended, must be mentioned as
Section 4 thereof provides that "[i]n the contracting of any loan, credit or
indebtedness under this Act, the President of the Philippines may, when
necessary, agree to waive or modify the application of any law granting
preferences or imposing restrictions on international competitive bidding
x x x Provided, finally, That the method and procedure in the comparison
of bids shall be the subject of agreement between the Philippine
Government and the lending institution."
EO 40, not RA 9184, is applicable to the procurement
process undertaken for the CP I project. RA 9184
cannot be given retroactive application.
It is not disputed that with respect to the CP I project, the Invitation to
Prequalify and to Bid for its implementation was published in two leading
national newspapers, namely, the Manila Times and Manila Standard on
November 22, 29 and December 5, 2002. At the time, the law in effect
was EO 40. On the other hand, RA 9184 took effect two months later or
on January 26, 2003. Further, its full implementation was even delayed
as IRR-A was only approved by President Arroyo on September 18, 2003
and subsequently published on September 23, 2003 in the Manila Times
and Malaya newspapers.58
The provisions of EO 40 apply to the procurement process pertaining to
the CP I project as it is explicitly provided in Section 1 thereof that:
SEC. 1. Scope and Application. – This Executive Order shall apply to see
procurement of (a) goods, supplies, materials and related service; (b) civil
works; and (c) consulting services, by all National Government agencies,
including State Universities and Colleges (SUCs), Government-Owned or
–Controlled Corporations (GOCCs) and Government Financial
Institutions (GFIs), hereby referred to as "Agencies." This Executive
Order shall cover the procurement process from the pre-procurement
conference up to the award of the contract.
Nothing in this Order shall negate any existing and future government
commitments with respect to the bidding and award of contracts financed
partly or wholly with funds from international financing institutions as well
as from bilateral and similar foreign sources.
The procurement process basically involves the following steps: (1) pre-
procurement conference; (2) advertisement of the invitation to bid; (3)
pre-bid conference; (4) eligibility check of prospective bidders; (5)
submission and receipt of bids; (6) modification and withdrawal of bids;
(7) bid opening and examination; (8) bid evaluation; (9) post qualification;
(10) award of contract and notice to proceed.59 Clearly then, when the
Invitation to Prequalify and to Bid for the implementation of the CP I
project was published on November 22, 29 and December 5, 2002, the
procurement process thereof had already commenced and the
application of EO 40 to the procurement process for the CP I project had
already attached.
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
RA 9184 cannot be applied retroactively to govern the procurement
process relative to the CP I project because it is well settled that a law or
regulation has no retroactive application unless it expressly provides for
retroactivity.60Indeed, Article 4 of the Civil Code is clear on the matter:
"[l]aws shall have no retroactive effect, unless the contrary is provided."
In the absence of such categorical provision, RA 9184 will not be applied
retroactively to the CP I project whose procurement process commenced
even before the said law took effect.
That the legislators did not intend RA 9184 to have retroactive effect
could be gleaned from the IRR-A formulated by the Joint Congressional
Oversight Committee (composed of the Chairman of the Senate
Committee on Constitutional Amendments and Revision of Laws, and
two members thereof appointed by the Senate President and the
Chairman of the House Committee on Appropriations, and two members
thereof appointed by the Speaker of the House of Representatives) and
the Government Procurement Policy Board (GPPB). Section 77 of the
IRR-A states, thus:
SEC. 77. Transitory Clause
In all procurement activities, if the advertisement or invitation for bids was
issued prior to the effectivity of the Act, the provisions of E.O. 40 and its
IRR, P.D. 1594 and its IRR, R.A. 7160 and its IRR, or other applicable
laws, as the case may be, shall govern.
In cases where the advertisements or invitations for bids were issued
after the effectivity of the Act but before the effectivity of this IRR-A,
procuring entities may continue adopting the procurement procedures,
rules and regulations provided in E.O. 40 and its IRR, P.D. 1594 and its
IRR, R.A. 7160 and its IRR, or other applicable laws, as the case may be.
In other words, under IRR-A, if the advertisement of the invitation for bids
was issued prior to the effectivity of RA 9184, such as in the case of the
CP I project, the provisions of EO 40 and its IRR, and PD 1594 and its
IRR in the case of national government agencies, and RA 7160 and its
IRR in the case of local government units, shall govern.
Admittedly, IRR-A covers only fully domestically-funded procurement
activities from procurement planning up to contract implementation and
that it is expressly stated that IRR-B for foreign-funded procurement
activities shall be subject of a subsequent issuance.61 Nonetheless, there
is no reason why the policy behind Section 77 of IRR-A cannot be
applied to foreign-funded procurement projects like the CP I project.
Stated differently, the policy on the prospective or non-retroactive
application of RA 9184 with respect to domestically-funded procurement
projects cannot be any different with respect to foreign-funded
procurement projects like the CP I project. It would be incongruous, even
absurd, to provide for the prospective application of RA 9184 with respect
to domestically-funded procurement projects and, on the other hand, as
urged by the petitioners, apply RA 9184 retroactively with respect to
foreign- funded procurement projects. To be sure, the lawmakers could
not have intended such an absurdity.
Thus, in the light of Section 1 of EO 40, Section 77 of IRR-A, as well as
the fundamental rule embodied in Article 4 of the Civil Code on
prospectivity of laws, the Court holds that the procurement process for
the implementation of the CP I project is governed by EO 40 and its IRR,
not RA 9184.
Under EO 40, the award of the contract to private
respondent China Road & Bridge Corporation is valid
Section 25 of EO 40 provides that "[t]he approved budget of the contract
shall be the upper limit or ceiling of the bid price. Bid prices which exceed
this ceiling shall be disqualified outright from further participating in the
bidding. There shall be no lower limit to the amount of the award. x x x" It
should be observed that this text is almost similar to the wording of
Section 31 of RA 9184, relied upon by the petitioners in contending that
since the bid price of private respondent China Road & Bridge
Corporation exceeded the ABC, then it should not have been awarded
the contract for the CP I project.
Nonetheless, EO 40 expressly recognizes as an exception to its scope
and application those government commitments with respect to bidding
and award of contracts financed partly or wholly with funds from
international financing institutions as well as from bilateral and other
similar foreign sources. The pertinent portion of Section 1 of EO 40 is
quoted anew:
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
SEC. 1. Scope and Application. – x x x
Nothing in this Order shall negate any existing and future government
commitments with respect to the bidding and award of contracts financed
partly or wholly with funds from international financing institutions as well
as from bilateral and similar foreign sources.
In relation thereto, Section 4 of RA 4860, as amended, was correctly
cited by the respondents as likewise authorizing the President, in the
contracting of any loan, credit or indebtedness thereunder, "when
necessary, agree to waive or modify the application of any law granting
preferences or imposing restrictions on international competitive bidding
x x x." The said provision of law further provides that "the method and
procedure in the comparison of bids shall be the subject of agreement
between the Philippine Government and the lending institution."
Consequently, in accordance with these applicable laws, the
procurement of goods and services for the CP I project is governed by
the corresponding loan agreement entered into by the government and
the JBIC, i.e., Loan Agreement No. PH-P204. The said loan agreement
stipulated that the procurement of goods and services for the Arterial
Road Links Development Project (Phase IV), of which CP I is a
component, is to be governed by the JBIC Procurement Guidelines.
Section 5.06, Part II (International Competitive Bidding) thereof quoted
earlier reads:
Section 5.06. Evaluation and Comparison of Bids
xxx
(e) Any procedure under which bids above or below a predetermined bid
value assessment are automatically disqualified is not permitted.62
It is clear that the JBIC Procurement Guidelines proscribe the imposition
of ceilings on bid prices. On the other hand, it enjoins the award of the
contract to the bidder whose bid has been determined to be the lowest
evaluated bid. The pertinent provision, quoted earlier, is reiterated, thus:
Section 5.09. Award of Contract
The contract is to be awarded to the bidder whose bid has been
determined to be the lowest evaluated bid and who meets the
appropriate standards of capability and financial resources. A bidder shall
not be required as a condition of award to undertake responsibilities or
work not stipulated in the specifications or to modify the bid.63
Since these terms and conditions are made part of Loan Agreement No.
PH-P204, the government is obliged to observe and enforce the same in
the procurement of goods and services for the CP I project. As shown
earlier, private respondent China Road & Bridge Corporation’s bid was
the lowest evaluated bid, albeit 28.95% higher than the ABC. In
accordance with the JBIC Procurement Guidelines, therefore, it was
correctly awarded the contract for the CP I project.
Even if RA 9184 were to be applied retroactively, the terms of the
Exchange of Notes dated December 27, 1999 and Loan Agreement No.
PH-P204 would still govern the procurement for the CP I project
For clarity, Section 4 of RA 9184 is quoted anew, thus:
SEC. 4. Scope and Applications. – This Act shall apply to the
Procurement of Infrastructure Projects, Goods and Consulting Services,
regardless of source of funds, whether local or foreign, by all branches
and instrumentalities of government, its departments, offices and
agencies, including government-owned and/or –controlled corporations
and local government units, subject to the provisions of Commonwealth
Act No. 138. Any treaty or international or executive agreement affecting
the subject matter of this Act to which the Philippine government is a
signatory shall be observed.
The petitioners, in order to place the procurement process undertaken for
the CP I project within the ambit of RA 9184, vigorously assert that Loan
Agreement No. PH-P204 is neither a treaty, an international agreement
nor an executive agreement. They cite Executive Order No. 459 dated
November 25, 1997 where the three agreements are defined in this wise:
a) International agreement – shall refer to a contract or understanding,
regardless of nomenclature, entered into between the Philippines and
another government in written form and governed by international law,
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
whether embodied in a single instrument or in two or more related
instruments.
b) Treaties – international agreements entered into by the Philippines
which require legislative concurrence after executive ratification. This
term may include compacts like conventions, declarations, covenants
and acts.
c) Executive agreements – similar to treaties except that they do not
require legislative concurrence.64
The petitioners mainly argue that Loan Agreement No. PH-P204 does not
fall under any of the three categories because to be any of the three, an
agreement had to be one where the parties are the Philippines as a State
and another State. The JBIC, the petitioners maintain, is a Japanese
banking agency, which presumably has a separate juridical personality
from the Japanese Government.
The petitioners’ arguments fail to persuade. The Court holds that Loan
Agreement No. PH-P204 taken in conjunction with the Exchange of
Notes dated December 27, 1999 between the Japanese Government and
the Philippine Government is an executive agreement.
To recall, Loan Agreement No. PH-P204 was executed by and between
the JBIC and the Philippine Government pursuant to the Exchange of
Notes executed by and between Mr. Yoshihisa Ara, Ambassador
Extraordinary and Plenipotentiary of Japan to the Philippines, and then
Foreign Affairs Secretary Siazon, in behalf of their respective
governments. The Exchange of Notes expressed that the two
governments have reached an understanding concerning Japanese
loans to be extended to the Philippines and that these loans were aimed
at promoting our country’s economic stabilization and development
efforts.
Loan Agreement No. PH-P204 was subsequently executed and it
declared that it was so entered by the parties "[i]n the light of the contents
of the Exchange of Notes between the Government of Japan and the
Government of the Republic of the Philippines dated December 27, 1999,
concerning Japanese loans to be extended with a view to promoting the
economic stabilization and development efforts of the Republic of the
Philippines."65 Under the circumstances, the JBIC may well be
considered an adjunct of the Japanese Government. Further, Loan
Agreement No. PH-P204 is indubitably an integral part of the Exchange
of Notes. It forms part of the Exchange of Notes such that it cannot be
properly taken independent thereof.
In this connection, it is well to understand the definition of an "exchange
of notes" under international law. The term is defined in the United
Nations Treaty Collection in this wise:
An "exchange of notes" is a record of a routine agreement that has many
similarities with the private law contract. The agreement consists of the
exchange of two documents, each of the parties being in the possession
of the one signed by the representative of the other. Under the usual
procedure, the accepting State repeats the text of the offering State to
record its assent. The signatories of the letters may be government
Ministers, diplomats or departmental heads. The technique of exchange
of notes is frequently resorted to, either because of its speedy procedure,
or, sometimes, to avoid the process of legislative approval.66
It is stated that "treaties, agreements, conventions, charters, protocols,
declarations, memoranda of understanding, modus vivendi and exchange
of notes" all refer to "international instruments binding at international
law."67 It is further explained that-
Although these instruments differ from each other by title, they all have
common features and international law has applied basically the same
rules to all these instruments. These rules are the result of long practice
among the States, which have accepted them as binding norms in their
mutual relations. Therefore, they are regarded as international customary
law. Since there was a general desire to codify these customary rules,
two international conventions were negotiated. The 1969 Vienna
Convention on the Law of Treaties ("1969 Vienna Convention"), which
entered into force on 27 January 1980, contains rules for treaties
concluded between States. The 1986 Vienna Convention on the Law of
Treaties between States and International Organizations ("1986 Vienna
Convention"), which has still not entered into force, added rules for
treaties with international organizations as parties. Both the 1969 Vienna
Convention and the 1986 Vienna Convention do not distinguish between
the different designations of these instruments. Instead, their rules apply
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
to all of those instruments as long as they meet the common
requirements.68
Significantly, an exchange of notes is considered a form of an executive
agreement, which becomes binding through executive action without the
need of a vote by the Senate or Congress. The following disquisition by
Francis B. Sayre, former United States High Commissioner to the
Philippines, entitled "The Constitutionality of Trade Agreement Acts,"
quoted in Commissioner of Customs v. Eastern Sea Trading,69 is
apropos:
Agreements concluded by the President which fall short of treaties are
commonly referred to as executive agreements and are no less common
in our scheme of government than are the more formal instruments –
treaties and conventions. They sometimes take the form of exchange of
notes and at other times that of more formal documents denominated
"agreements" or "protocols". The point where ordinary correspondence
between this and other governments ends and agreements – whether
denominated executive agreements or exchange of notes or otherwise –
begin, may sometimes be difficult of ready ascertainment. It would be
useless to undertake to discuss here the large variety of executive
agreements as such, concluded from time to time. Hundreds of executive
agreements, other than those entered into under the trade-agreements
act, have been negotiated with foreign governments. x x x70
The Exchange of Notes dated December 27, 1999, stated, inter alia, that
the Government of Japan would extend loans to the Philippines with a
view to promoting its economic stabilization and development efforts;
Loan I in the amount of Y79,8651,000,000 would be extended by the
JBIC to the Philippine Government to implement the projects in the List A
(including the Arterial Road Links Development Project - Phase IV); and
that such loan (Loan I) would be used to cover payments to be made by
the Philippine executing agencies to suppliers, contractors and/or
consultants of eligible source countries under such contracts as may be
entered into between them for purchases of products and/or services
required for the implementation of the projects enumerated in the List
A.71 With respect to the procurement of the goods and services for the
projects, it bears reiterating that as stipulated:
3. The Government of the Republic of the Philippines will ensure that the
products and/or services mentioned in sub-paragraph (1) of paragraph 3
of Part I and sub-paragraph (1) of paragraph 4 of Part II are procured in
accordance with the guidelines for procurement of the Bank, which set
forth, inter alia, the procedures of international tendering to be followed
except where such procedures are inapplicable or inappropriate.72
The JBIC Procurements Guidelines, as quoted earlier, forbids any
procedure under which bids above or below a predetermined bid value
assessment are automatically disqualified. Succinctly put, it absolutely
prohibits the imposition of ceilings on bids.
Under the fundamental principle of international law of pacta sunt
servanda,73 which is, in fact, embodied in Section 4 of RA 9184 as it
provides that "[a]ny treaty or international or executive agreement
affecting the subject matter of this Act to which the Philippine government
is a signatory shall be observed," the DPWH, as the executing agency of
the projects financed by Loan Agreement No. PH-P204, rightfully
awarded the contract for the implementation of civil works for the CP I
project to private respondent China Road & Bridge Corporation.
WHEREFORE, premises considered, the petition is DISMISSED.
EN BANC
G.R. No. 151445 April 11, 2002
ARTHUR D. LIM and PAULINO R. ERSANDO, petitioners,
vs.
HONORABLE EXECUTIVE SECRETARY as alter ego of HER
EXCELLENCEY GLORIA MACAPAGAL-ARROYO, and HONORABLE
ANGELO REYES in his capacity as Secretary of National
Defense, respondents.
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
----------------------------------------
SANLAKAS and PARTIDO NG MANGGAGAWA, petitioners-
intervenors,
vs.
GLORIA MACAPAGA-ARROYO, ALBERTO ROMULO, ANGELO
REYES, respondents.
This case involves a petition for certiorari and prohibition as well as a
petition-in-intervention, praying that respondents be restrained from
proceeding with the so-called "Balikatan 02-1" and that after due notice
and hearing, that judgment be rendered issuing a permanent writ of
injunction and/or prohibition against the deployment of U.S. troops in
Basilan and Mindanao for being illegal and in violation of the Constitution.
The facts are as follows:
Beginning January of this year 2002, personnel from the armed forces of
the United States of America started arriving in Mindanao to take part, in
conjunction with the Philippine military, in "Balikatan 02-1." These so-
called "Balikatan" exercises are the largest combined training operations
involving Filipino and American troops. In theory, they are a simulation of
joint military maneuvers pursuant to the Mutual Defense Treaty,1 a
bilateral defense agreement entered into by the Philippines and the
United States in 1951.
Prior to the year 2002, the last "Balikatan" was held in 1995. This was
due to the paucity of any formal agreement relative to the treatment of
United States personnel visiting the Philippines. In the meantime, the
respective governments of the two countries agreed to hold joint
exercises on a reduced scale. The lack of consensus was eventually
cured when the two nations concluded the Visiting Forces Agreement (V
FA) in 1999.
The entry of American troops into Philippine soil is proximately rooted in
the international anti-terrorism campaign declared by President George
W. Bush in reaction to the tragic events that occurred on September 11,
2001. On that day, three (3) commercial aircrafts were hijacked, flown
and smashed into the twin towers of the World Trade Center in New York
City and the Pentagon building in Washington, D.C. by terrorists with
alleged links to the al-Qaeda ("the Base"), a Muslim extremist
organization headed by the infamous Osama bin Laden. Of no
comparable historical parallels, these acts caused billions of dollars worth
of destruction of property and incalculable loss of hundreds of lives.
On February 1, 2002, petitioners Arthur D. Lim and Paulino P. Ersando
filed this petition for certiorari and prohibition, attacking the
constitutionality of the joint exercise.2 They were joined subsequently by
SANLAKAS and PARTIDO NG MANGGAGAWA, both party-Iist
organizations, who filed a petition-in-intervention on February 11, 2002.
Lim and Ersando filed suit in their capacities as citizens, lawyers and
taxpayers. SANLAKAS and PARTIDO, on the other hand, aver that
certain members of their organization are residents of Zamboanga and
Sulu, and hence will be directly affected by the operations being
conducted in Mindanao. They likewise pray for a relaxation on the rules
relative to locus standi citing the unprecedented importance of the issue
involved.
On February 71 2002 the Senate conducted a hearing on the "Balikatan"
exercise wherein Vice-President Teofisto T. Guingona, Jr., who is
concurrently Secretary of Foreign. Affairs, presented the Draft Terms of
Reference (TOR).3Five days later, he approved the TOR, which we quote
hereunder:
I. POLICY LEVEL
1. The Exercise shall be consistent with the Philippine
Constitution and all its activities shall be in consonance with the
laws of the land and the provisions of the RP-US Visiting Forces
Agreement (VFA).
2. The conduct of this training Exercise is in accordance with
pertinent United Nations resolutions against global terrorism as
understood by the respective parties.
3. No permanent US basing and support facilities shall be
established. Temporary structures such as those for troop
billeting, classroom instruction and messing may be set up for
use by RP and US Forces during the Exercise.
4. The Exercise shall be implemented jointly by RP and US
Exercise Co-Directors under the authority of the Chief of Staff,
AFP. In no instance will US Forces operate independently during
field training exercises (FTX). AFP and US Unit Commanders will
retain command over their respective forces under the overall
authority of the Exercise Co-Directors. RP and US participants
shall comply with operational instructions of the AFP during the
FTX.
5. The exercise shall be conducted and completed within a period
of not more than six months, with the projected participation of
660 US personnel and 3,800 RP Forces. The Chief of Staff, AFP
shall direct the Exercise Co-Directors to wind up and terminate
the Exercise and other activities within the six month Exercise
period.
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
6. The Exercise is a mutual counter-terrorism advising, assisting
and training Exercise relative to Philippine efforts against the
ASG, and will be conducted on the Island of Basilan. Further
advising, assisting and training exercises shall be conducted in
Malagutay and the Zamboanga area. Related activities in Cebu
will be for support of the Exercise.
7. Only 160 US Forces organized in 12-man Special Forces
Teams shall be deployed with AFP field, commanders. The US
teams shall remain at the Battalion Headquarters and, when
approved, Company Tactical headquarters where they can
observe and assess the performance of the AFP Forces.
8. US exercise participants shall not engage in combat, without
prejudice to their right of self-defense.
9. These terms of Reference are for purposes of this Exercise
only and do not create additional legal obligations between the
US Government and the Republic of the Philippines.
II. EXERCISE LEVEL
1. TRAINING
a. The Exercise shall involve the conduct of mutual
military assisting, advising and training of RP and US
Forces with the primary objective of enhancing the
operational capabilities of both forces to combat terrorism.
b. At no time shall US Forces operate independently
within RP territory.
c. Flight plans of all aircraft involved in the exercise will
comply with the local air traffic regulations.
2. ADMINISTRATION & LOGISTICS
a. RP and US participants shall be given a country and
area briefing at the start of the Exercise. This briefing
shall acquaint US Forces on the culture and sensitivities
of the Filipinos and the provisions of the VF A. The
briefing shall also promote the full cooperation on the part
of the RP and US participants for the successful conduct
of the Exercise.
b. RP and US participating forces may share, in
accordance with their respective laws and regulations, in
the use of their resources, equipment and other assets.
They will use their respective logistics channels.
c. Medical evaluation shall be jointly planned and
executed utilizing RP and US assets and resources.
d. Legal liaison officers from each respective party shall
be appointed by the Exercise Directors.
3. PUBLIC AFFAIRS
a. Combined RP-US Information Bureaus shall be
established at the Exercise Directorate in Zamboanga
City and at GHQ, AFP in Camp Aguinaldo, Quezon City.
b. Local media relations will be the concern of the AFP
and all public affairs guidelines shall be jointly developed
by RP and US Forces.
c. Socio-Economic Assistance Projects shall be planned
and executed jointly by RP and US Forces in accordance
with their respective laws and regulations, and in
consultation with community and local government
officials.
Contemporaneously, Assistant Secretary for American Affairs Minerva
Jean A. Falcon and United States Charge d' Affaires Robert Fitts signed
the Agreed Minutes of the discussion between the Vice-President and
Assistant Secretary Kelly.4
Petitioners Lim and Ersando present the following arguments:
I
THE PHILIPPINES AND THE UNITED STATES SIGNED THE
MUTUAL DEFENSE TREATY (MDT) in 1951 TO PROVIDE
MUTUAL MILITARY ASSIST ANCE IN ACCORDANCE WITH
THE 'CONSTITUTIONAL PROCESSE-S' OF EACH COUNTRY
ONLY IN THE CASE OF AN ARMED ATTACK BY AN
EXTERNAL AGGRESSOR, MEANING A THIRD COUNTRY
AGAINST ONE OF THEM.
BY NO STRETCH OF THE IMAGINA TION CAN IT BE SAID
THAT THE ABU SAYYAF BANDITS IN BASILAN CONSTITUTE
AN EXTERNAL ARMED FORCE THAT HAS SUBJECT THE
PHILIPPINES TO AN ARMED EXTERNAL ATTACK TO
WARRANT U.S. MILITARY ASSISTANCE UNDER THE MDT OF
1951.
II
NEITHER DOES THE VFA OF 1999 AUTHORIZE AMERICAN
SOLDIERS TO ENGAGE IN COMBAT OPERATIONS IN
PHILIPPINE TERRITORY, NOT EVEN TO FIRE BACK "IF
FIRED UPON".
Substantially the same points are advanced by petitioners SANLAKAS
and PARTIDO.
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
In his Comment, the Solicitor General points to infirmities in the petitions
regarding, inter alia, Lim and Ersando's standing to file suit, the
prematurity of the action, as well as the impropriety of availing
of certiorari to ascertain a question of fact. Anent their locus standi, the
Solicitor General argues that first, they may not file suit in their capacities
as, taxpayers inasmuch as it has not been shown that "Balikatan 02-1 "
involves the exercise of Congress' taxing or spending
powers. Second, their being lawyers does not invest them with sufficient
personality to initiate the case, citing our ruling in Integrated Bar of the
Philippines v. Zamora.5 Third, Lim and Ersando have failed to
demonstrate the requisite showing of direct personal injury. We agree.
It is also contended that the petitioners are indulging in speculation. The
Solicitor General is of the view that since the Terms of Reference are
clear as to the extent and duration of "Balikatan 02-1," the issues raised
by petitioners are premature, as they are based only on a fear
of future violation of the Terms of Reference. Even petitioners' resort to a
special civil action for certiorari is assailed on the ground that the writ
may only issue on the basis of established facts.
Apart from these threshold issues, the Solicitor General claims that there
is actually no question of constitutionality involved. The true object of the
instant suit, it is said, is to obtain an interpretation of the V FA. The
Solicitor General asks that we accord due deference to the executive
determination that "Balikatan 02-1" is covered by the VFA, considering
the President's monopoly in the field of foreign relations and her role as
commander-in-chief of the Philippine armed forces.
Given the primordial importance of the issue involved, it will suffice to
reiterate our view on this point in a related case:
Notwithstanding, in view of the paramount importance
and the constitutional significance of the issues raised in
the petitions, this Court, in the exercise of its sound
discretion, brushes aside the procedural barrier and takes
cognizance of the petitions, as we have done in the early
Emergency Powers Cases, where we had occasion to
rule:
'x x x ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders
issued by President Quirino although they were involving
only an indirect and general interest shared in common
with the public. The Court dismissed the objection that
they were not proper parties and ruled
that 'transcendental importance to the public of these
cases demands that they be settled promptly and
definitely, brushing aside, if we must, technicalities of
procedure.' We have since then applied the exception in
many other cases. [citation omitted]
This principle was reiterated in the subsequent cases
of Gonzales vs. COMELEC, Daza vs. Singson, and Basco vs.
Phil, Amusement and Gaming Corporation, where we
emphatically held:
Considering however the importance to the public of the
case at bar, and in keeping with the Court's duty, under
the 1987 Constitution, to determine whether or not the
other branches of the government have kept themselves
within the limits of the Constitution and the laws that they
have not abused the discretion given to them, the Court
has brushed aside technicalities of procedure and has
taken cognizance of this petition. xxx'
Again, in the more recent case of Kilosbayan vs. Guingona, Jr.,
this Court ruled that in cases of transcendental importance, the
Court may relax the standing requirements and allow a suit
to prosper even where there is no direct injury to the party
claiming the right of judicial review.
Although courts generally avoid having to decide a constitutional
question based on the doctrine of separation of powers, which
enjoins upon the department of the government a becoming
respect for each other's act, this Court nevertheless resolves to
take cognizance of the instant petition.6
Hence, we treat with similar dispatch the general objection to the
supposed prematurity of the action. At any rate, petitioners' concerns on
the lack of any specific regulation on the latitude of activity US personnel
may undertake and the duration of their stay has been addressed in the
Terms of Reference.
The holding of "Balikatan 02-1" must be studied in the framework of the
treaty antecedents to which the Philippines bound itself. The first of these
is the Mutual Defense Treaty (MDT, for brevity). The MDT has been
described as the "core" of the defense relationship between the
Philippines and its traditional ally, the United States. Its aim is to enhance
the strategic and technological capabilities of our armed forces through
joint training with its American counterparts; the "Balikatan" is the largest
such training exercise directly supporting the MDT's objectives. It is this
treaty to which the V FA adverts and the obligations thereunder which it
seeks to reaffirm.
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
The lapse of the US-Philippine Bases Agreement in 1992 and the
decision not to renew it created a vacuum in US-Philippine defense
relations, that is, until it was replaced by the Visiting Forces Agreement. It
should be recalled that on October 10, 2000, by a vote of eleven to three,
this Court upheld the validity of the VFA.7 The V FA provides the
"regulatory mechanism" by which "United States military and civilian
personnel [may visit] temporarily in the Philippines in connection with
activities approved by the Philippine Government." It contains provisions
relative to entry and departure of American personnel, driving and vehicle
registration, criminal jurisdiction, claims, importation and exportation,
movement of vessels and aircraft, as well as the duration of the
agreement and its termination. It is the VFA which gives continued
relevance to the MDT despite the passage of years. Its primary goal is to
facilitate the promotion of optimal cooperation between American and
Philippine military forces in the event of an attack by a common foe.
The first question that should be addressed is whether "Balikatan 02-1" is
covered by the Visiting Forces Agreement. To resolve this, it is necessary
to refer to the V FA itself: Not much help can be had therefrom,
unfortunately, since the terminology employed is itself the source of the
problem. The VFA permits United States personnel to engage, on an
impermanent basis, in "activities," the exact meaning of which was left
undefined. The expression is ambiguous, permitting a wide scope of
undertakings subject only to the approval of the Philippine
government.8 The sole encumbrance placed on its definition is couched
in the negative, in that United States personnel must "abstain from any
activity inconsistent with the spirit of this agreement, and in particular,
from any political activity."9 All other activities, in other words, are fair
game.
We are not left completely unaided, however. The Vienna Convention on
the Law of Treaties, which contains provisos governing interpretations of
international agreements, state:
SECTION 3. INTERPRETATION OF TREATIES
Article 31
General rule of interpretation
1. A treaty shall be interpreted in good faith ill accordance with
the ordinary meaning to be given to the tenus of the treaty in their
context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty
shall comprise, in addition to the text, including its preamble and
annexes:
(a) any agreement relating to the treaty which was made
between all the parties in connexion with the conclusion
of the treaty;
(b) any instrument which was made by one or more
parties in connexion with the conclusion of the treaty and
accepted by the other parties as an instrument related to
the party .
3. There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties
regarding the interpretation of the treaty or the application
of its provisions;
(b) any subsequent practice in the application of the treaty
which establishes the agreement of the parties regarding
its interpretation;
(c) any relevant rules of international law applicable in the
relations between the parties.
4. A special meaning shall be given to a term if it is established
that the parties so intended.
Article 32
Supplementary means of interpretation
Recourse may be had to supplementary means of interpretation,
including the preparatory work of the treaty and the
circumstances of its conclusion, in order to confirm the meaning
resulting from the application of article 31, or to determine the
meaning when the interpretation according to article 31 :
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd
unreasonable.
It is clear from the foregoing that the cardinal rule of interpretation must
involve an examination of the text, which is presumed to verbalize the
parties' intentions. The Convention likewise dictates what may be used
as aids to deduce the meaning of terms, which it refers to as the context
of the treaty, as well as other elements may be taken into account
alongside the aforesaid context. As explained by a writer on the
Convention ,
[t]he Commission's proposals (which were adopted virtually
without change by the conference and are now reflected in
Articles 31 and 32 of the Convention) were clearly based on the
view that the text of a treaty must be presumed to be the
authentic expression of the intentions of the parties; the
Commission accordingly came down firmly in favour of the view
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
that 'the starting point of interpretation is the elucidation of the
meaning of the text, not an investigation ab initio into the
intentions of the parties'. This is not to say that
the travauxpreparatoires of a treaty , or the circumstances of its
conclusion, are relegated to a subordinate, and wholly ineffective,
role. As Professor Briggs points out, no rigid temporal prohibition
on resort to travaux preparatoires of a treaty was intended by the
use of the phrase 'supplementary means of interpretation' in what
is now Article 32 of the Vienna Convention. The distinction
between the general rule of interpretation and the supplementary
means of interpretation is intended rather to ensure that the
supplementary means do not constitute an alternative,
autonomous method of interpretation divorced from the general
rule.10
The Terms of Reference rightly fall within the context of the VFA.
After studied reflection, it appeared farfetched that the ambiguity
surrounding the meaning of the word .'activities" arose from accident. In
our view, it was deliberately made that way to give both parties a certain
leeway in negotiation. In this manner, visiting US forces may sojourn in
Philippine territory for purposes other than military. As conceived, the
joint exercises may include training on new techniques of patrol and
surveillance to protect the nation's marine resources, sea search-and-
rescue operations to assist vessels in distress, disaster relief operations,
civic action projects such as the building of school houses, medical and
humanitarian missions, and the like.
Under these auspices, the VFA gives legitimacy to the current Balikatan
exercises. It is only logical to assume that .'Balikatan 02-1," a "mutual
anti- terrorism advising, assisting and training exercise," falls under the
umbrella of sanctioned or allowable activities in the context of the
agreement. Both the history and intent of the Mutual Defense Treaty and
the V FA support the conclusion that combat-related activities -as
opposed to combat itself -such as the one subject of the instant petition,
are indeed authorized.
That is not the end of the matter, though. Granted that "Balikatan 02-1" is
permitted under the terms of the VFA, what may US forces legitimately
do in furtherance of their aim to provide advice, assistance and training in
the global effort against terrorism? Differently phrased, may American
troops actually engage in combat in Philippine territory? The Terms of
Reference are explicit enough. Paragraph 8 of section I stipulates that
US exercise participants may not engage in combat "except in self-
defense." We wryly note that this sentiment is admirable in the abstract
but difficult in implementation. The target of "Balikatan 02-1 I" the Abu
Sayyaf, cannot reasonably be expected to sit idly while the battle is
brought to their very doorstep. They cannot be expected to pick and
choose their targets for they will not have the luxury of doing so. We state
this point if only to signify our awareness that the parties straddle a fine
line, observing the honored legal maxim "Nemo potest facere per alium
quod non potest facere per directum."11 The indirect violation is actually
petitioners' worry, that in reality, "Balikatan 02-1 " is actually a war
principally conducted by the United States government, and that the
provision on self-defense serves only as camouflage to conceal the true
nature of the exercise. A clear pronouncement on this matter thereby
becomes crucial.
In our considered opinion, neither the MDT nor the V FA allow foreign
troops to engage in an offensive war on Philippine territory. We bear in
mind the salutary proscription stated in the Charter of the United Nations,
to wit:
Article 2
The Organization and its Members, in pursuit of the Purposes
stated in Article 1, shall act in accordance with the following
Principles.
xxx xxx xxx xxx
4. All Members shall refrain in their international relations from the
threat or use of force against the territorial integrity or political
independence of any state, or in any other manner inconsistent
with the Purposes of the United Nations.
xxx xxx xxx xxx
In the same manner, both the Mutual Defense Treaty and the Visiting
Forces Agreement, as in all other treaties and international agreements
to which the Philippines is a party, must be read in the context of the
1987 Constitution. In particular, the Mutual Defense Treaty was
concluded way before the present Charter, though it nevertheless
remains in effect as a valid source of international obligation. The present
Constitution contains key provisions useful in determining the extent to
which foreign military troops are allowed in Philippine territory. Thus, in
the Declaration of Principles and State Policies, it is provided that:
xxx xxx xxx xxx
SEC. 2. The Philippines renounces war as an instrument of
national policy, adopts the generally accepted principles of
international law as part of the law of the land and adheres to the
policy of peace, equality, justice, freedom, cooperation, and amity
with all nations.
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
xxx xxx xxx xxx
SEC. 7. The State shall pursue an independent foreign policy. In
its relations with other states the paramount consideration shall
be national sovereignty, territorial integrity, national interest, and
the right to self- determination.
SEC. 8. The Philippines, consistent with the national interest,
adopts and pursues a policy of freedom from nuclear weapons in
the country.
xxx xxx xxx xxx
The Constitution also regulates the foreign relations powers of the Chief
Executive when it provides that "[n]o treaty or international agreement
shall be valid and effective unless concurred in by at least two-thirds of all
the members of the Senate."12 Even more pointedly, the Transitory
Provisions state:
Sec. 25. After the expiration in 1991 of the Agreement between
the Republic of the Philippines and the United States of America
concerning Military Bases, foreign military bases, troops or
facilities shall not be allowed in the Philippines except under a
treaty duly concurred in by the Senate and, when the Congress
so requires, ratified by a majority of the votes cast by the people
in a national referendum held for that purpose, and recognized as
a treaty by the other contracting state.
The aforequoted provisions betray a marked antipathy towards foreign
military presence in the country, or of foreign influence in general. Hence,
foreign troops are allowed entry into the Philippines only by way of direct
exception. Conflict arises then between the fundamental law and our
obligations arising from international agreements.
A rather recent formulation of the relation of international law vis-a-
vis municipal law was expressed in Philip Morris, Inc. v.
Court of Appeals,13 to wit:
xxx Withal, the fact that international law has been made part of
the law of the land does not by any means imply the primacy of
international law over national law in the municipal sphere. Under
the doctrine of incorporation as applied in most countries, rules of
international law are given a standing equal, not superior, to
national legislation.
This is not exactly helpful in solving the problem at hand since in trying to
find a middle ground, it favors neither one law nor the other, which only
leaves the hapless seeker with an unsolved dilemma. Other more
traditional approaches may offer valuable insights.
From the perspective of public international law, a treaty is favored over
municipal law pursuant to the principle of pacta sunt servanda. Hence,
"[e]very treaty in force is binding upon the parties to it and must be
performed by them in good faith."14 Further, a party to a treaty is not
allowed to "invoke the provisions of its internal law as justification for its
failure to perform a treaty."15
Our Constitution espouses the opposing view. Witness our jurisdiction as
I stated in section 5 of Article VIII:
The Supreme Court shall have the following powers:
xxx xxx xxx xxx
(2) Review, revise, reverse, modify, or affirm on appeal
or certiorari, as the law or the Rules of Court may provide, final
judgments and order of lower courts in:
(A) All cases in which the constitutionality or validity of any treaty,
international or executive agreement, law, presidential decree,
proclamation, order, instruction, ordinance, or regulation is in
question.
xxx xxx xxx xxx
In Ichong v. Hernandez,16 we ruled that the provisions of a treaty are
always subject to qualification or amendment by a subsequent law, or
that it is subject to the police power of the State. In Gonzales v.
Hechanova,17
xxx As regards the question whether an international agreement
may be invalidated by our courts, suffice it to say that the
Constitution of the Philippines has clearly settled it in the
affirmative, by providing, in Section 2 of Article VIII thereof, that
the Supreme Court may not be deprived "of its jurisdiction to
review, revise, reverse, modify, or affirm on appeal, certiorari, or
writ of error as the law or the rules of court may provide, final
judgments and decrees of inferior courts in -( I) All cases in which
the constitutionality or validity of any treaty, law, ordinance, or
executive order or regulation is in question." In other words, our
Constitution authorizes the nullification of a treaty, not only when
it conflicts with the fundamental law, but, also, when it runs
counter to an act of Congress.
The foregoing premises leave us no doubt that US forces are prohibited /
from engaging in an offensive war on Philippine territory.
Yet a nagging question remains: are American troops actively engaged in
combat alongside Filipino soldiers under the guise of an alleged training
and assistance exercise? Contrary to what petitioners would have us do,
we cannot take judicial notice of the events transpiring down south,18 as
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
reported from the saturation coverage of the media. As a rule, we do not
take cognizance of newspaper or electronic reports per se, not because
of any issue as to their truth, accuracy, or impartiality, but for the simple
reason that facts must be established in accordance with the rules of
evidence. As a result, we cannot accept, in the absence of concrete
proof, petitioners' allegation that the Arroyo government is engaged in
"doublespeak" in trying to pass off as a mere training exercise an
offensive effort by foreign troops on native soil. The petitions invite us to
speculate on what is really happening in Mindanao, to issue I make
factual findings on matters well beyond our immediate perception, and
this we are understandably loath to do.
It is all too apparent that the determination thereof involves basically
a question of fact. On this point, we must concur with the Solicitor
General that the present subject matter is not a fit topic for a special civil
action for certiorari. We have held in too many instances that questions of
fact are not entertained in such a remedy. The sole object of the writ is to
correct errors of jurisdiction or grave abuse of discretion: The phrase
"grave abuse of discretion" has a precise meaning in law, denoting abuse
of discretion "too patent and gross as to amount to an evasion of a
positive duty, or a virtual refusal to perform the duty enjoined or act in
contemplation of law, or where the power is exercised in an arbitrary and
despotic manner by reason of passion and personal hostility."19
In this connection, it will not be amiss to add that the Supreme Court is
not a trier of facts.20
Under the expanded concept of judicial power under the Constitution,
courts are charged with the duty "to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the
government."21 From the facts obtaining, we find that the holding of
"Balikatan 02-1" joint military exercise has not intruded into that
penumbra of error that would otherwise call for correction on our part. In
other words, respondents in the case at bar have not committed grave
abuse of discretion amounting to lack or excess of jurisdiction.
WHEREFORE, the petition and the petition-in-intervention are
hereby DISMISSED without prejudice to the filing of a new petition
sufficient in form and substance in the proper Regional Trial Court.
SO ORDERED.
DECISION
BUENA, J.:
Confronting the Court for resolution in the instant consolidated
petitions for certiorari and prohibition are issues relating to, and borne by,
an agreement forged in the turn of the last century between the Republic
of the Philippines and the United States of America -the Visiting Forces
Agreement.
The antecedents unfold.
On March 14, 1947, the Philippines and the United States of America
forged a Military Bases Agreement which formalized, among others, the
use of installations in the Philippine territory by United States military
personnel. To further strengthen their defense and security relationship,
the Philippines and the United States entered into a Mutual Defense Treaty
on August 30, 1951. Under the treaty, the parties agreed to respond to any
external armed attack on their territory, armed forces, public vessels, and
aircraft.[1]
In view of the impending expiration of the RP-US Military Bases
Agreement in 1991, the Philippines and the United States negotiated for a
possible extension of the military bases agreement. On September 16,
1991, the Philippine Senate rejected the proposed RP-US Treaty of
Friendship, Cooperation and Security which, in effect, would have
extended the presence of US military bases in the Philippines.[2] With the
expiration of the RP-US Military Bases Agreement, the periodic military
exercises conducted between the two countries were held in abeyance.
Notwithstanding, the defense and security relationship between the
Philippines and the United States of America continued pursuant to the
Mutual Defense Treaty.
On July 18, 1997, the United States panel, headed by US Defense
Deputy Assistant Secretary for Asia Pacific Kurt Campbell, met with the
Philippine panel, headed by Foreign Affairs Undersecretary Rodolfo
Severino Jr., to exchange notes on the complementing strategic interests
of the United States and the Philippines in the Asia-Pacific region. Both
sides discussed, among other things, the possible elements of the Visiting
Forces Agreement (VFA for brevity). Negotiations by both panels on the
VFA led to a consolidated draft text, which in turn resulted to a final series
of conferences and negotiations[3] that culminated in Manila on January 12
and 13, 1998. Thereafter, then President Fidel V. Ramos approved the
VFA, which was respectively signed by public respondent Secretary
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
Siazon and Unites States Ambassador Thomas Hubbard on February 10,
1998.
On October 5, 1998, President Joseph E. Estrada, through
respondent Secretary of Foreign Affairs, ratified the VFA.[4]
On October 6, 1998, the President, acting through respondent
Executive Secretary Ronaldo Zamora, officially transmitted to the Senate
of the Philippines,[5] the Instrument of Ratification, the letter of the
President[6] and the VFA, for concurrence pursuant to Section 21, Article
VII of the 1987 Constitution. The Senate, in turn, referred the VFA to its
Committee on Foreign Relations, chaired by Senator Blas F. Ople, and its
Committee on National Defense and Security, chaired by Senator Rodolfo
G. Biazon, for their joint consideration and recommendation.Thereafter,
joint public hearings were held by the two Committees.[7]
On May 3, 1999, the Committees submitted Proposed Senate
Resolution No. 443[8] recommending the concurrence of the Senate to the
VFA and the creation of a Legislative Oversight Committee to oversee its
implementation. Debates then ensued.
On May 27, 1999, Proposed Senate Resolution No. 443 was
approved by the Senate, by a two-thirds (2/3) vote[9] of its members.
Senate Resolution No. 443 was then re-numbered as Senate Resolution
No. 18.[10]
On June 1, 1999, the VFA officially entered into force after an
Exchange of Notes between respondent Secretary Siazon and United
States Ambassador Hubbard.
The VFA, which consists of a Preamble and nine (9) Articles, provides
for the mechanism for regulating the circumstances and conditions under
which US Armed Forces and defense personnel may be present in the
Philippines, and is quoted in its full text, hereunder:
Article I
Definitions
As used in this Agreement, United States personnel means United States
military and civilian personnel temporarily in the Philippines in connection
with activities approved by the Philippine Government.
Within this definition:
1. The term military personnel refers to military members of the
United States Army, Navy, Marine Corps, Air Force, and
Coast Guard.
2. The term civilian personnel refers to individuals who are
neither nationals of, nor ordinary residents in the Philippines
and who are employed by the United States armed forces or
who are accompanying the United States armed forces, such
as employees of the American Red Cross and the United
Services Organization.
Article II
Respect for Law
It is the duty of the United States personnel to respect the laws of the
Republic of the Philippines and to abstain from any activity inconsistent
with the spirit of this agreement, and, in particular, from any political
activity in the Philippines. The Government of the United States shall take
all measures within its authority to ensure that this is done.
Article III
Entry and Departure
1. The Government of the Philippines shall facilitate the admission of
United States personnel and their departure from the Philippines in
connection with activities covered by this agreement.
2. United States military personnel shall be exempt from passport and visa
regulations upon entering and departing the Philippines.
3. The following documents only, which shall be presented on demand,
shall be required in respect of United States military personnel who
enter the Philippines:
(a) personal identity card issued by the appropriate United States
authority showing full name, date of birth, rank or grade and
service number (if any), branch of service and photograph;
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
(b) individual or collective document issued by the appropriate United
States authority, authorizing the travel or visit and identifying the
individual or group as United States military personnel; and
(c) the commanding officer of a military aircraft or vessel shall present
a declaration of health, and when required by the cognizant
representative of the Government of the Philippines, shall conduct
a quarantine inspection and will certify that the aircraft or vessel
is free from quarantinable diseases. Any quarantine inspection of
United States aircraft or United States vessels or cargoes thereon
shall be conducted by the United States commanding officer in
accordance with the international health regulations as
promulgated by the World Health Organization, and mutually
agreed procedures.
4. United States civilian personnel shall be exempt from visa requirements
but shall present, upon demand, valid passports upon entry and
departure of the Philippines.
5. If the Government of the Philippines has requested the removal of any
United States personnel from its territory, the United States authorities
shall be responsible for receiving the person concerned within its own
territory or otherwise disposing of said person outside of the
Philippines.
Article IV
Driving and Vehicle Registration
1. Philippine authorities shall accept as valid, without test or fee, a driving
permit or license issued by the appropriate United States authority to
United States personnel for the operation of military or official vehicles.
2. Vehicles owned by the Government of the United States need not be
registered, but shall have appropriate markings.
Article V
Criminal Jurisdiction
1. Subject to the provisions of this article:
(a) Philippine authorities shall have jurisdiction over United
States personnel with respect to offenses committed within
the Philippines and punishable under the law of the
Philippines.
(b) United States military authorities shall have the right to
exercise within the Philippines all criminal and disciplinary
jurisdiction conferred on them by the military law of the
United States over United States personnel in the
Philippines.
2. (a) Philippine authorities exercise exclusive jurisdiction over
United States personnel with respect to offenses,
including offenses relating to the security of the
Philippines, punishable under the laws of the
Philippines, but not under the laws of the United
States.
(b) United States authorities exercise exclusive
jurisdiction over United States personnel with respect
to offenses, including offenses relating to the security
of the United States, punishable under the laws of the
United States, but not under the laws of the
Philippines.
(c) For the purposes of this paragraph and paragraph 3 of
this article, an offense relating to security means:
(1) treason;
(2) sabotage, espionage or violation of any law relating to
national defense.
3. In cases where the right to exercise jurisdiction is concurrent,
the following rules shall apply:
(a) Philippine authorities shall have the primary right to
exercise jurisdiction over all offenses committed by United
States personnel, except in cases provided for in
paragraphs 1(b), 2 (b), and 3 (b) of this Article.
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
(b) United States military authorities shall have the primary
right to exercise jurisdiction over United States personnel
subject to the military law of the United States in relation to.
(1) offenses solely against the property or security of the
United States or offenses solely against the property or
person of United States personnel; and
(2) offenses arising out of any act or omission done in
performance of official duty.
(c) The authorities of either government may request the
authorities of the other government to waive their primary
right to exercise jurisdiction in a particular case.
(d) Recognizing the responsibility of the United States military
authorities to maintain good order and discipline among
their forces, Philippine authorities will, upon request by the
United States, waive their primary right to exercise
jurisdiction except in cases of particular importance to the
Philippines. If the Government of the Philippines
determines that the case is of particular importance, it shall
communicate such determination to the United States
authorities within twenty (20) days after the Philippine
authorities receive the United States request.
(e) When the United States military commander determines
that an offense charged by authorities of the Philippines
against United states personnel arises out of an act or
omission done in the performance of official duty, the
commander will issue a certificate setting forth such
determination. This certificate will be transmitted to the
appropriate authorities of the Philippines and will constitute
sufficient proof of performance of official duty for the
purposes of paragraph 3(b)(2) of this Article. In those cases
where the Government of the Philippines believes the
circumstances of the case require a review of the duty
certificate, United States military authorities and Philippine
authorities shall consult immediately. Philippine authorities
at the highest levels may also present any information
bearing on its validity. United States military authorities
shall take full account of the Philippine position. Where
appropriate, United States military authorities will take
disciplinary or other action against offenders in official duty
cases, and notify the Government of the Philippines of the
actions taken.
(f) If the government having the primary right does not exercise
jurisdiction, it shall notify the authorities of the other
government as soon as possible.
(g) The authorities of the Philippines and the United States
shall notify each other of the disposition of all cases in
which both the authorities of the Philippines and the United
States have the right to exercise jurisdiction.
4. Within the scope of their legal competence, the authorities of
the Philippines and United States shall assist each other in the
arrest of United States personnel in the Philippines and in
handling them over to authorities who are to exercise
jurisdiction in accordance with the provisions of this article.
5. United States military authorities shall promptly notify
Philippine authorities of the arrest or detention of United
States personnel who are subject of Philippine primary or
exclusive jurisdiction. Philippine authorities shall promptly
notify United States military authorities of the arrest or
detention of any United States personnel.
6. The custody of any United States personnel over whom the
Philippines is to exercise jurisdiction shall immediately reside
with United States military authorities, if they so request, from
the commission of the offense until completion of all judicial
proceedings. United States military authorities shall, upon
formal notification by the Philippine authorities and without
delay, make such personnel available to those authorities in
time for any investigative or judicial proceedings relating to the
offense with which the person has been charged in
extraordinary cases, the Philippine Government shall present
its position to the United States Government regarding
custody, which the United States Government shall take into
full account. In the event Philippine judicial proceedings are
not completed within one year, the United States shall be
relieved of any obligations under this paragraph. The one-year
period will not include the time necessary to appeal. Also, the
one-year period will not include any time during which
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
scheduled trial procedures are delayed because United
States authorities, after timely notification by Philippine
authorities to arrange for the presence of the accused, fail to
do so.
7. Within the scope of their legal authority, United States and
Philippine authorities shall assist each other in the carrying out
of all necessary investigation into offenses and shall
cooperate in providing for the attendance of witnesses and in
the collection and production of evidence, including seizure
and, in proper cases, the delivery of objects connected with
an offense.
8. When United States personnel have been tried in accordance
with the provisions of this Article and have been acquitted or
have been convicted and are serving, or have served their
sentence, or have had their sentence remitted or suspended,
or have been pardoned, they may not be tried again for the
same offense in the Philippines. Nothing in this paragraph,
however, shall prevent United States military authorities from
trying United States personnel for any violation of rules of
discipline arising from the act or omission which constituted
an offense for which they were tried by Philippine authorities.
9. When United States personnel are detained, taken into
custody, or prosecuted by Philippine authorities, they shall be
accorded all procedural safeguards established by the law of
the Philippines. At the minimum, United States personnel shall
be entitled:
(a) To a prompt and speedy trial;
(b) To be informed in advance of trial of the specific charge or
charges made against them and to have reasonable time
to prepare a defense;
(c) To be confronted with witnesses against them and to cross
examine such witnesses;
(d) To present evidence in their defense and to have
compulsory process for obtaining witnesses;
(e) To have free and assisted legal representation of their own
choice on the same basis as nationals of the Philippines;
(f) To have the service of a competent interpreter; and
(g) To communicate promptly with and to be visited regularly
by United States authorities, and to have such authorities
present at all judicial proceedings. These proceedings shall
be public unless the court, in accordance with Philippine
laws, excludes persons who have no role in the
proceedings.
10. The confinement or detention by Philippine authorities of
United States personnel shall be carried out in facilities agreed
on by appropriate Philippine and United States authorities.
United States Personnel serving sentences in the Philippines
shall have the right to visits and material assistance.
11. United States personnel shall be subject to trial only in
Philippine courts of ordinary jurisdiction, and shall not be
subject to the jurisdiction of Philippine military or religious
courts.
Article VI
Claims
1. Except for contractual arrangements, including United States
foreign military sales letters of offer and acceptance and
leases of military equipment, both governments waive any and
all claims against each other for damage, loss or destruction
to property of each others armed forces or for death or injury
to their military and civilian personnel arising from activities to
which this agreement applies.
2. For claims against the United States, other than contractual
claims and those to which paragraph 1 applies, the United
States Government, in accordance with United States law
regarding foreign claims, will pay just and reasonable
compensation in settlement of meritorious claims for damage,
loss, personal injury or death, caused by acts or omissions of
United States personnel, or otherwise incident to the non-
combat activities of the United States forces.
Article VII
Importation and Exportation
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
1. United States Government equipment, materials, supplies, and
other property imported into or acquired in the Philippines by
or on behalf of the United States armed forces in connection
with activities to which this agreement applies, shall be free of
all Philippine duties, taxes and other similar charges. Title to
such property shall remain with the United States, which may
remove such property from the Philippines at any time, free
from export duties, taxes, and other similar charges. The
exemptions provided in this paragraph shall also extend to any
duty, tax, or other similar charges which would otherwise be
assessed upon such property after importation into, or
acquisition within, the Philippines. Such property may be
removed from the Philippines, or disposed of therein, provided
that disposition of such property in the Philippines to persons
or entities not entitled to exemption from applicable taxes and
duties shall be subject to payment of such taxes, and duties
and prior approval of the Philippine Government.
2. Reasonable quantities of personal baggage, personal effects,
and other property for the personal use of United States
personnel may be imported into and used in the Philippines
free of all duties, taxes and other similar charges during the
period of their temporary stay in the Philippines. Transfers to
persons or entities in the Philippines not entitled to import
privileges may only be made upon prior approval of the
appropriate Philippine authorities including payment by the
recipient of applicable duties and taxes imposed in
accordance with the laws of the Philippines. The exportation
of such property and of property acquired in the Philippines by
United States personnel shall be free of all Philippine duties,
petitioners - as legislators, non-governmental organizations, citizens and
taxes, and other similar charges.
taxpayers - assail the constitutionality of the VFA and impute to herein
respondents grave abuse of discretion in ratifying the agreement.
Article VIII
Movement of Vessels and Aircraft
following:
1. Aircraft operated by or for the United States armed forces may
enter the Philippines upon approval of the Government of the
Philippines in accordance with procedures stipulated in
implementing arrangements.
2. Vessels operated by or for the United States armed forces may
enter the Philippines upon approval of the Government of the
Philippines. The movement of vessels shall be in accordance
with international custom and practice governing such
vessels, and such agreed implementing arrangements as
necessary.
3. Vehicles, vessels, and aircraft operated by or for the United
States armed forces shall not be subject to the payment of
landing or port fees, navigation or over flight charges, or tolls
or other use charges, including light and harbor dues, while in
the Philippines. Aircraft operated by or for the United States
armed forces shall observe local air traffic control regulations
while in the Philippines. Vessels owned or operated by the
United States solely on United States Government non-
commercial service shall not be subject to compulsory
pilotage at Philippine ports.
Article IX
Duration and Termination
This agreement shall enter into force on the date on which the parties have
notified each other in writing through the diplomatic channel that they have
completed their constitutional requirements for entry into force. This
agreement shall remain in force until the expiration of 180 days from the
date on which either party gives the other party notice in writing that it
desires to terminate the agreement.
Via these consolidated[11] petitions for certiorari and prohibition,
We have simplified the issues raised by the petitioners into the
I
Do petitioners have legal standing as concerned citizens, taxpayers, or
legislators to question the constitutionality of the VFA?
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
II
Is the VFA governed by the provisions of Section 21, Article VII or of
Section 25, Article XVIII of the Constitution?
III
Does the VFA constitute an abdication of Philippine sovereignty?
a. Are Philippine courts deprived of their jurisdiction to hear and
try offenses committed by US military personnel?
b. Is the Supreme Court deprived of its jurisdiction over offenses
punishable by reclusion perpetua or higher?
IV
Does the VFA violate:
a. the equal protection clause under Section 1, Article III of the
Constitution?
b. the Prohibition against nuclear weapons under Article II,
Section 8?
c. Section 28 (4), Article VI of the Constitution granting the
exemption from taxes and duties for the equipment, materials
supplies and other properties imported into or acquired in the
Philippines by, or on behalf, of the US Armed Forces?
LOCUS STANDI
At the outset, respondents challenge petitioners standing to sue, on
the ground that the latter have not shown any interest in the case, and that
petitioners failed to substantiate that they have sustained, or will sustain
direct injury as a result of the operation of the VFA.[12] Petitioners, on the
other hand, counter that the validity or invalidity of the VFA is a matter of
transcendental importance which justifies their standing.[13]
A party bringing a suit challenging the constitutionality of a law, act, or
statute must show not only that the law is invalid, but also that he has
sustained or in is in immediate, or imminent danger of sustaining some
direct injury as a result of its enforcement, and not merely that he suffers
thereby in some indefinite way. He must show that he has been, or is about
to be, denied some right or privilege to which he is lawfully entitled, or that
he is about to be subjected to some burdens or penalties by reason of the
statute complained of.[14]
In the case before us, petitioners failed to show, to the satisfaction of
this Court, that they have sustained, or are in danger of sustaining any
direct injury as a result of the enforcement of the VFA. As taxpayers,
petitioners have not established that the VFA involves the exercise by
Congress of its taxing or spending powers.[15] On this point, it bears
stressing that a taxpayers suit refers to a case where the act complained
of directly involves the illegal disbursement of public funds derived from
taxation.[16] Thus, in Bugnay Const. & Development Corp. vs.
Laron[17], we held:
x x x it is exigent that the taxpayer-plaintiff sufficiently show that he would be
benefited or injured by the judgment or entitled to the avails of the suit as a real
party in interest. Before he can invoke the power of judicial review, he must
specifically prove that he has sufficient interest in preventing the illegal
expenditure of money raised by taxation and that he will sustain a direct injury as
a result of the enforcement of the questioned statute or contract. It is not
sufficient that he has merely a general interest common to all members of the
public.
Clearly, inasmuch as no public funds raised by taxation are involved
in this case, and in the absence of any allegation by petitioners that public
funds are being misspent or illegally expended, petitioners, as taxpayers,
have no legal standing to assail the legality of the VFA.
Similarly, Representatives Wigberto Taada, Agapito Aquino and Joker
Arroyo, as petitioners-legislators, do not possess the requisite locus
standi to maintain the present suit. While this Court, in Phil. Constitution
Association vs. Hon. Salvador Enriquez,[18] sustained the legal standing
of a member of the Senate and the House of Representatives to question
the validity of a presidential veto or a condition imposed on an item in an
appropriation bull, we cannot, at this instance, similarly uphold petitioners
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
standing as members of Congress, in the absence of a clear showing of
any direct injury to their person or to the institution to which they belong.
Beyond this, the allegations of impairment of legislative power, such
as the delegation of the power of Congress to grant tax exemptions, are
more apparent than real. While it may be true that petitioners pointed to
provisions of the VFA which allegedly impair their legislative powers,
petitioners failed however to sufficiently show that they have in fact
suffered direct injury.
In the same vein, petitioner Integrated Bar of the Philippines (IBP) is
stripped of standing in these cases. As aptly observed by the Solicitor
General, the IBP lacks the legal capacity to bring this suit in the absence
of a board resolution from its Board of Governors authorizing its National
President to commence the present action.[19]
Notwithstanding, in view of the paramount importance and the
constitutional significance of the issues raised in the petitions, this Court,
in the exercise of its sound discretion, brushes aside the procedural barrier
and takes cognizance of the petitions, as we have done in the
early Emergency Powers Cases,[20] where we had occasion to rule:
x x x ordinary citizens and taxpayers were allowed to question the
constitutionality of several executive orders issued by President Quirino
although they were involving only an indirect and general interest shared in
common with the public. The Court dismissed the objection that they were not
proper parties and ruled that transcendental importance to the public of these
cases demands that they be settled promptly and definitely, brushing aside,
if we must, technicalities of procedure.We have since then applied the
exception in many other cases. (Association of Small Landowners in the
Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343). (Underscoring
Supplied)
This principle was reiterated in the subsequent cases of Gonzales vs.
COMELEC,[21] Daza vs. Singson,[22]and Basco vs. Phil. Amusement
and Gaming Corporation,[23] where we emphatically held:
Considering however the importance to the public of the case at bar, and in
keeping with the Courts duty, under the 1987 Constitution, to determine whether
or not the other branches of the government have kept themselves within the
limits of the Constitution and the laws and that they have not abused the
discretion given to them, the Court has brushed aside technicalities of procedure
and has taken cognizance of this petition. x x x
Again, in the more recent case of Kilosbayan vs. Guingona,
Jr.,[24] thisCourt ruled that in cases of transcendental importance, the
Court may relax the standing requirements and allow a suit to
prosper even where there is no direct injury to the party claiming the
right of judicial review.
Although courts generally avoid having to decide a constitutional
question based on the doctrine of separation of powers, which enjoins
upon the departments of the government a becoming respect for each
others acts,[25] this Court nevertheless resolves to take cognizance of the
instant petitions.
APPLICABLE CONSTITUTIONAL PROVISION
One focal point of inquiry in this controversy is the determination of
which provision of the Constitution applies, with regard to the exercise by
the senate of its constitutional power to concur with the VFA. Petitioners
argue that Section 25, Article XVIII is applicable considering that the VFA
has for its subject the presence of foreign military troops in the
Philippines. Respondents, on the contrary, maintain that Section 21,
Article VII should apply inasmuch as the VFA is not a basing arrangement
but an agreement which involves merely the temporary visits of United
States personnel engaged in joint military exercises.
The 1987 Philippine Constitution contains two provisions requiring the
concurrence of the Senate on treaties or international agreements. Section
21, Article VII, which herein respondents invoke, reads:
No treaty or international agreement shall be valid and effective unless concurred
in by at least two-thirds of all the Members of the Senate.
Section 25, Article XVIII, provides:
After the expiration in 1991 of the Agreement between the Republic of the
Philippines and the United States of America concerning Military Bases, foreign
military bases, troops, or facilities shall not be allowed in the Philippines except
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
under a treaty duly concurred in by the senate and, when the Congress so
requires, ratified by a majority of the votes cast by the people in a national
referendum held for that purpose, and recognized as a treaty by the other
contracting State.
Section 21, Article VII deals with treatise or international agreements
in general, in which case, the concurrence of at least two-thirds (2/3) of all
the Members of the Senate is required to make the subject treaty, or
international agreement, valid and binding on the part of the
Philippines. This provision lays down the general rule on treatise or
international agreements and applies to any form of treaty with a wide
variety of subject matter, such as, but not limited to, extradition or tax
treatise or those economic in nature. All treaties or international
agreements entered into by the Philippines, regardless of subject matter,
coverage, or particular designation or appellation, requires the
concurrence of the Senate to be valid and effective.
In contrast, Section 25, Article XVIII is a special provision that applies
to treaties which involve the presence of foreign military bases, troops or
facilities in the Philippines. Under this provision, the concurrence of the
Senate is only one of the requisites to render compliance with the
constitutional requirements and to consider the agreement binding on the
Philippines. Section 25, Article XVIII further requires that foreign military
bases, troops, or facilities may be allowed in the Philippines only by virtue
of a treaty duly concurred in by the Senate, ratified by a majority of the
votes cast in a national referendum held for that purpose if so required by
Congress, and recognized as such by the other contracting state.
It is our considered view that both constitutional provisions, far from
contradicting each other, actually share some common ground. These
constitutional provisions both embody phrases in the negative and thus,
are deemed prohibitory in mandate and character. In particular, Section 21
opens with the clause No treaty x x x, and Section 25 contains the phrase
shall not be allowed. Additionally, in both instances, the concurrence of the
Senate is indispensable to render the treaty or international agreement
valid and effective.
To our mind, the fact that the President referred the VFA to the Senate
under Section 21, Article VII, and that the Senate extended its concurrence
under the same provision, is immaterial. For in either case, whether under
Section 21, Article VII or Section 25, Article XVIII, the fundamental law is
crystalline that the concurrence of the Senate is mandatory to comply with
the strict constitutional requirements.
On the whole, the VFA is an agreement which defines the treatment
of United States troops and personnel visiting the Philippines. It provides
for the guidelines to govern such visits of military personnel, and further
defines the rights of the United States and the Philippine government in
the matter of criminal jurisdiction, movement of vessel and aircraft,
importation and exportation of equipment, materials and supplies.
Undoubtedly, Section 25, Article XVIII, which specifically deals with
treaties involving foreign military bases, troops, or facilities, should apply
in the instant case. To a certain extent and in a limited sense, however, the
provisions of section 21, Article VII will find applicability with regard to the
issue and for the sole purpose of determining the number of votes required
to obtain the valid concurrence of the Senate, as will be further discussed
hereunder.
It is a finely-imbedded principle in statutory construction that a special
provision or law prevails over a general one. Lex specialis derogat
generali. Thus, where there is in the same statute a particular enactment
and also a general one which, in its most comprehensive sense, would
include what is embraced in the former, the particular enactment must be
operative, and the general enactment must be taken to affect only such
cases within its general language which are not within the provision of the
particular enactment.[26]
In Leveriza vs. Intermediate Appellate Court,[27] we enunciated:
x x x that another basic principle of statutory construction mandates that general
legislation must give way to a special legislation on the same subject, and
generally be so interpreted as to embrace only cases in which the special
provisions are not applicable (Sto. Domingo vs. de los Angeles, 96 SCRA 139),
that a specific statute prevails over a general statute (De Jesus vs. People, 120
SCRA 760) and that where two statutes are of equal theoretical application to a
particular case, the one designed therefor specially should prevail (Wil
Wilhensen Inc. vs. Baluyot, 83 SCRA 38).
Moreover, it is specious to argue that Section 25, Article XVIII is
inapplicable to mere transient agreements for the reason that there is no
permanent placing of structure for the establishment of a military base. On
this score, the Constitution makes no distinction between transient and
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
permanent. Certainly, we find nothing in Section 25, Article XVIII that
requires foreign troops or facilities to be stationed or
placed permanently in the Philippines.
It is a rudiment in legal hermenuetics that when no distinction is made
by law, the Court should not distinguish- Ubi lex non distinguit nec nos
distinguire debemos.
In like manner, we do not subscribe to the argument that Section 25,
Article XVIII is not controlling since no foreign military bases, but merely
foreign troops and facilities, are involved in the VFA. Notably, a perusal of
said constitutional provision reveals that the proscription covers foreign
military bases, troops, or facilities. Stated differently, this prohibition is not
limited to the entry of troops and facilities without any foreign bases being
established. The clause does not refer to foreign military bases,
troops, or facilities collectively but treats them as separate and
independent subjects. The use of comma and the disjunctive
word or clearly signifies disassociation and independence of one thing
from the others included in the enumeration,[28] such that, the provision
contemplates three different situations - a military treaty the subject of
which could be either (a) foreign bases, (b) foreign troops, or (c) foreign
facilities - any of the three standing alone places it under the coverage of
Section 25, Article XVIII.
To this end, the intention of the framers of the Charter, as manifested
during the deliberations of the 1986 Constitutional Commission, is
consistent with this interpretation:
MR. MAAMBONG. I just want to address a question or two to
Commissioner Bernas.
This formulation speaks of three things: foreign military bases, troops
or facilities. My first question is: If the country does enter into
such kind of a treaty, must it cover the three-bases, troops or
facilities-or could the treaty entered into cover only one or
two?
FR. BERNAS. Definitely, it can cover only one. Whether it covers
only one or it covers three, the requirement will be the same.
MR. MAAMBONG. In other words, the Philippine government can
enter into a treaty covering not bases but merely troops?
FR. BERNAS. Yes.
MR. MAAMBONG. I cannot find any reason why the government can
enter into a treaty covering only troops.
FR. BERNAS. Why not? Probably if we stretch our imagination a little
bit more, we will find some. We just want to cover
everything.[29] (Underscoring Supplied)
Moreover, military bases established within the territory of another
state is no longer viable because of the alternatives offered by new means
and weapons of warfare such as nuclear weapons, guided missiles as well
as huge sea vessels that can stay afloat in the sea even for months and
years without returning to their home country.These military warships are
actually used as substitutes for a land-home base not only of military
aircraft but also of military personnel and facilities. Besides, vessels are
mobile as compared to a land-based military headquarters.
At this juncture, we shall then resolve the issue of whether or not the
requirements of Section 25 were complied with when the Senate gave its
concurrence to the VFA.
Section 25, Article XVIII disallows foreign military bases, troops, or
facilities in the country, unless the following conditions are sufficiently
met, viz: (a) it must be under a treaty; (b) the treaty must be duly
concurred in by the Senate and, when so required by congress, ratified
by a majority of the votes cast by the people in a national referendum; and
(c) recognized as a treaty by the other contracting state.
There is no dispute as to the presence of the first two requisites in the
case of the VFA. The concurrence handed by the Senate through
Resolution No. 18 is in accordance with the provisions of the Constitution,
whether under the general requirement in Section 21, Article VII, or the
specific mandate mentioned in Section 25, Article XVIII, the provision in
the latter article requiring ratification by a majority of the votes cast in a
national referendum being unnecessary since Congress has not required
it.
As to the matter of voting, Section 21, Article VII particularly requires
that a treaty or international agreement, to be valid and effective, must
be concurred in by at least two-thirds of all the members of the
Senate. On the other hand, Section 25, Article XVIII simply provides that
the treaty be duly concurred in by the Senate.
Applying the foregoing constitutional provisions, a two-thirds vote of
all the members of the Senate is clearly required so that the concurrence
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
contemplated by law may be validly obtained and deemed present. While
it is true that Section 25, Article XVIII requires, among other things, that the
treaty-the VFA, in the instant case-be duly concurred in by the Senate, it is
very true however that said provision must be related and viewed in light
of the clear mandate embodied in Section 21, Article VII, which in more
specific terms, requires that the concurrence of a treaty, or international
agreement, be made by a two -thirds vote of all the members of the
Senate. Indeed, Section 25, Article XVIII must not be treated in isolation to
section 21, Article, VII.
As noted, the concurrence requirement under Section 25, Article XVIII
must be construed in relation to the provisions of Section 21, Article VII. In
a more particular language, the concurrence of the Senate contemplated
under Section 25, Article XVIII means that at least two-thirds of all the
members of the Senate favorably vote to concur with the treaty-the VFA in
the instant case.
Under these circumstances, the charter provides that the Senate shall
be composed of twenty-four (24) Senators.[30] Without a tinge of doubt,
two-thirds (2/3) of this figure, or not less than sixteen (16) members,
favorably acting on the proposal is an unquestionable compliance with the
requisite number of votes mentioned in Section 21 of Article VII. The fact
that there were actually twenty-three (23) incumbent Senators at the time
the voting was made,[31] will not alter in any significant way the
circumstance that more than two-thirds of the members of the Senate
concurred with the proposed VFA, even if the two-thirds vote requirement
is based on this figure of actual members (23). In this regard, the
fundamental law is clear that two-thirds of the 24 Senators, or at least 16
favorable votes, suffice so as to render compliance with the strict
constitutional mandate of giving concurrence to the subject treaty.
Having resolved that the first two requisites prescribed in Section 25,
Article XVIII are present, we shall now pass upon and delve on the
requirement that the VFA should be recognized as a treaty by the United
States of America.
Petitioners content that the phrase recognized as a treaty, embodied
in section 25, Article XVIII, means that the VFA should have the advice and
consent of the United States Senate pursuant to its own constitutional
process, and that it should not be considered merely an executive
agreement by the United States.
In opposition, respondents argue that the letter of United States
Ambassador Hubbard stating that the VFA is binding on the United States
Government is conclusive, on the point that the VFA is recognized as a
treaty by the United States of America. According to respondents, the VFA,
to be binding, must only be accepted as a treaty by the United States.
This Court is of the firm view that the phrase recognized as a
treaty means that the other contracting party accepts or
acknowledges the agreement as a treaty.[32] To require the other
contracting state, the United States of America in this case, to submit the
VFA to the United States Senate for concurrence pursuant to its
Constitution,[33]is to accord strict meaning to the phrase.
Well-entrenched is the principle that the words used in the
Constitution are to be given their ordinary meaning except where technical
terms are employed, in which case the significance thus attached to them
prevails. Its language should be understood in the sense they have in
common use.[34]
Moreover, it is inconsequential whether the United States treats the
VFA only as an executive agreement because, under international law, an
executive agreement is as binding as a treaty.[35] To be sure, as long as
the VFA possesses the elements of an agreement under international law,
the said agreement is to be taken equally as a treaty.
A treaty, as defined by the Vienna Convention on the Law of Treaties,
is an international instrument concluded between States in written form
and governed by international law, whether embodied in a single
instrument or in two or more related instruments, and whatever its
particular designation.[36] There are many other terms used for a treaty or
international agreement, some of which are: act, protocol,
agreement, compromis d arbitrage, concordat, convention, declaration,
exchange of notes, pact, statute, charter and modus vivendi. All writers,
from Hugo Grotius onward, have pointed out that the names or titles of
international agreements included under the general term treaty have little
or no legal significance. Certain terms are useful, but they furnish little
more than mere description.[37]
Article 2(2) of the Vienna Convention provides that the provisions of
paragraph 1 regarding the use of terms in the present Convention are
without prejudice to the use of those terms, or to the meanings which may
be given to them in the internal law of the State.
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
Thus, in international law, there is no difference between treaties and
executive agreements in their binding effect upon states concerned, as
long as the negotiating functionaries have remained within their
powers.[38]International law continues to make no distinction between
treaties and executive agreements: they are equally binding obligations
upon nations.[39]
In our jurisdiction, we have recognized the binding effect of executive
agreements even without the concurrence of the Senate or
Congress. In Commissioner of Customs vs. Eastern Sea
Trading,[40] we had occasion to pronounce:
x x x the right of the Executive to enter into binding agreements without the
necessity of subsequent congressional approval has been confirmed by long
usage. From the earliest days of our history we have entered into executive
agreements covering such subjects as commercial and consular relations, most-
favored-nation rights, patent rights, trademark and copyright protection, postal
and navigation arrangements and the settlement of claims. The validity of these
has never been seriously questioned by our courts.
xxxxxxxxx
Furthermore, the United States Supreme Court has expressly recognized the
validity and constitutionality of executive agreements entered into without
Senate approval. (39 Columbia Law Review, pp. 753-754) (See, also, U.S. vs.
Curtis Wright Export Corporation, 299 U.S. 304, 81 L. ed. 255; U.S. vs.
Belmont, 301 U.S. 324, 81 L. ed. 1134; U.S. vs. Pink, 315 U.S. 203, 86 L. ed.
796; Ozanic vs. U.S. 188 F. 2d. 288; Yale Law Journal, Vol. 15 pp. 1905-
1906; California Law Review, Vol. 25, pp. 670-675; Hyde on International
Law [revised Edition], Vol. 2, pp. 1405, 1416-1418; willoughby on the U.S.
Constitution Law, Vol. I [2d ed.], pp. 537-540; Moore, International Law
Digest, Vol. V, pp. 210-218; Hackworth, International Law Digest, Vol. V,
pp. 390-407). (Italics Supplied) (Emphasis Ours)
The deliberations of the Constitutional Commission which drafted the
1987 Constitution is enlightening and highly-instructive:
MR. MAAMBONG. Of course it goes without saying that as far as
ratification of the other state is concerned, that is entirely their
concern under their own laws.
FR. BERNAS. Yes, but we will accept whatever they say. If they say
that we have done everything to make it a treaty, then as far as we
are concerned, we will accept it as a treaty.[41]
The records reveal that the United States Government, through
Ambassador Thomas C. Hubbard, has stated that the United States
government has fully committed to living up to the terms of the VFA.[42] For
as long as the united States of America accepts or acknowledges the VFA
as a treaty, and binds itself further to comply with its obligations under the
treaty, there is indeed marked compliance with the mandate of the
Constitution.
Worth stressing too, is that the ratification, by the President, of the
VFA and the concurrence of the Senate should be taken as a clear an
unequivocal expression of our nations consent to be bound by said treaty,
with the concomitant duty to uphold the obligations and responsibilities
embodied thereunder.
Ratification is generally held to be an executive act, undertaken by the
head of the state or of the government, as the case may be, through which
the formal acceptance of the treaty is proclaimed.[43] A State may provide
in its domestic legislation the process of ratification of a treaty. The consent
of the State to be bound by a treaty is expressed by ratification when: (a)
the treaty provides for such ratification, (b) it is otherwise established that
the negotiating States agreed that ratification should be required, (c) the
representative of the State has signed the treaty subject to ratification, or
(d) the intention of the State to sign the treaty subject to ratification appears
from the full powers of its representative, or was expressed during the
negotiation.[44]
In our jurisdiction, the power to ratify is vested in the President and
not, as commonly believed, in the legislature. The role of the Senate is
limited only to giving or withholding its consent, or concurrence, to the
ratification.[45]
With the ratification of the VFA, which is equivalent to final
acceptance, and with the exchange of notes between the Philippines and
the United States of America, it now becomes obligatory and incumbent
on our part, under the principles of international law, to be bound by the
terms of the agreement. Thus, no less than Section 2, Article II of the
Constitution,[46] declares that the Philippines adopts the generally
accepted principles of international law as part of the law of the land and
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)
adheres to the policy of peace, equality, justice, freedom, cooperation and
amity with all nations.
As a member of the family of nations, the Philippines agrees to be
bound by generally accepted rules for the conduct of its international
relations. While the international obligation devolves upon the state and
not upon any particular branch, institution, or individual member of its
government, the Philippines is nonetheless responsible for violations
committed by any branch or subdivision of its government or any official
thereof. As an integral part of the community of nations, we are responsible
to assure that our government, Constitution and laws will carry out our
international obligation.[47] Hence, we cannot readily plead the Constitution
as a convenient excuse for non-compliance with our obligations, duties and
responsibilities under international law.
Beyond this, Article 13 of the Declaration of Rights and Duties of
States adopted by the International Law Commission in 1949
provides: Every State has the duty to carry out in good faith its obligations
arising from treaties and other sources of international law, and it may not
invoke provisions in its constitution or its laws as an excuse for failure to
perform this duty.[48]
Equally important is Article 26 of the convention which provides that
Every treaty in force is binding upon the parties to it and must be performed
by them in good faith. This is known as the principle of pacta sunt
servandawhich preserves the sanctity of treaties and have been one of the
most fundamental principles of positive international law, supported by the
jurisprudence of international tribunals.[49]
NO GRAVE ABUSE OF DISCRETION
In the instant controversy, the President, in effect, is heavily faulted
for exercising a power and performing a task conferred upon him by the
Constitution-the power to enter into and ratify treaties. Through the
expediency of Rule 65 of the Rules of Court, petitioners in these
consolidated cases impute grave abuse of discretion on the part of the
chief Executive in ratifying the VFA, and referring the same to the Senate
pursuant to the provisions of Section 21, Article VII of the Constitution.
On this particular matter, grave abuse of discretion implies such
capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction, or, when the power is exercised in an arbitrary or despotic
manner by reason of passion or personal hostility, and it must be so patent
and gross as to amount to an evasion of positive duty enjoined or to act at
all in contemplation of law.[50]
By constitutional fiat and by the intrinsic nature of his office, the
President, as head of State, is the sole organ and authority in the external
affairs of the country. In many ways, the President is the chief architect of
the nations foreign policy; his dominance in the field of foreign relations is
(then) conceded.[51] Wielding vast powers an influence, his conduct in the
external affairs of the nation, as Jefferson describes, is executive
altogether."[52]
As regards the power to enter into treaties or international
agreements, the Constitution vests the same in the President, subject only
to the concurrence of at least two-thirds vote of all the members of the
Senate. In this light, the negotiation of the VFA and the subsequent
ratification of the agreement are exclusive acts which pertain solely to the
President, in the lawful exercise of his vast executive and diplomatic
powers granted him no less than by the fundamental law itself. Into the
field of negotiation the Senate cannot intrude, and Congress itself is
powerless to invade it.[53] Consequently, the acts or judgment calls of the
President involving the VFA-specifically the acts of ratification and entering
into a treaty and those necessary or incidental to the exercise of such
principal acts - squarely fall within the sphere of his constitutional powers
and thus, may not be validly struck down, much less calibrated by this
Court, in the absence of clear showing of grave abuse of power or
discretion.
It is the Courts considered view that the President, in ratifying the VFA
and in submitting the same to the Senate for concurrence, acted within the
confines and limits of the powers vested in him by the Constitution. It is of
no moment that the President, in the exercise of his wide latitude of
discretion and in the honest belief that the VFA falls within the ambit of
Section 21, Article VII of the Constitution, referred the VFA to the Senate
for concurrence under the aforementioned provision. Certainly, no abuse
of discretion, much less a grave, patent and whimsical abuse of judgment,
may be imputed to the President in his act of ratifying the VFA and referring
the same to the Senate for the purpose of complying with the concurrence
requirement embodied in the fundamental law. In doing so, the President
PUBLIC INTERNATIONAL LAW
THE LAW OF TREATIES (CASES)

merely performed a constitutional task and exercised a prerogative that that matters pertaining to the wisdom of a legislative act are beyond the
chiefly pertains to the functions of his office. Even if he erred in submitting ambit and province of the courts to inquire.
the VFA to the Senate for concurrence under the provisions of Section 21
of Article VII, instead of Section 25 of Article XVIII of the Constitution, still, In fine, absent any clear showing of grave abuse of discretion on the
the President may not be faulted or scarred, much less be adjudged guilty part of respondents, this Court- as the final arbiter of legal controversies
of committing an abuse of discretion in some patent, gross, and capricious and staunch sentinel of the rights of the people - is then without power to
manner. conduct an incursion and meddle with such affairs purely executive and
legislative in character and nature. For the Constitution no less, maps out
For while it is conceded that Article VIII, Section 1, of the Constitution the distinct boundaries and limits the metes and bounds within which each
has broadened the scope of judicial inquiry into areas normally left to the of the three political branches of government may exercise the powers
political departments to decide, such as those relating to national security, exclusively and essentially conferred to it by law.
it has not altogether done away with political questions such as those
which arise in the field of foreign relations.[54]The High Tribunals function, WHEREFORE, in light of the foregoing disquisitions, the instant
as sanctioned by Article VIII, Section 1, is merely (to) check whether or not petitions are hereby DISMISSED.
the governmental branch or agency has gone beyond the constitutional SO ORDERED.
limits of its jurisdiction, not that it erred or has a different view. In the
absence of a showing (of) grave abuse of discretion amounting to lack of
jurisdiction, there is no occasion for the Court to exercise its corrective
powerIt has no power to look into what it thinks is apparent error.[55]
As to the power to concur with treaties, the constitution lodges the
same with the Senate alone. Thus, once the Senate[56] performs that
power, or exercises its prerogative within the boundaries prescribed by the
Constitution, the concurrence cannot, in like manner, be viewed to
constitute an abuse of power, much less grave abuse thereof.Corollarily,
the Senate, in the exercise of its discretion and acting within the limits of
such power, may not be similarly faulted for having simply performed a
task conferred and sanctioned by no less than the fundamental law.
For the role of the Senate in relation to treaties is essentially legislative
in character;[57] the Senate, as an independent body possessed of its own
erudite mind, has the prerogative to either accept or reject the proposed
agreement, and whatever action it takes in the exercise of its wide latitude
of discretion, pertains to the wisdom rather than the legality of the act. In
this sense, the Senate partakes a principal, yet delicate, role in keeping
the principles of separation of powers and of checks and balances alive
and vigilantly ensures that these cherished rudiments remain true to their
form in a democratic government such as ours. The Constitution thus
animates, through this treaty-concurring power of the Senate, a healthy
system of checks and balances indispensable toward our nations pursuit
of political maturity and growth. True enough, rudimentary is the principle