140. Spouses Constantino vs Cuisia, G.R. No.

106064, 13 October 2005

On July 17, 1992, spouses Renato Constantino, Jr. and Lourdes Constantino and their minor
children, Renato Redentor, Anna Marika Lissa, Nina Elissa, and Anna Karmina, Filomeno Sta. Ana III, and
the Freedom from Debt Coalition, a non-stock, non-profit, non-government organization that advocates
a “pro-people and just Philippine debt policy” filed a petition for Prohibition and Mandamus against the
then Governor of the Bangko Sentral ng Pilipinas, the Secretary of Finance, the National Treasurer, and
the Philippine Debt Negotiation Chairman Emmanuel V. Pelaez.

The Financing Program was the culmination of efforts that began during the term of former
President Corazon Aquino to manage the country’s external debt problem through a negotiation-
oriented debt strategy involving cooperation and negotiation with foreign creditors. Pursuant to this
strategy, the Aquino government entered into three restructuring agreements with representatives of
foreign creditor governments during the period of 1986 to 1991. During the same period, three
similarly-oriented restructuring agreements were executed with commercial bank creditors. On 28
February 1992, the Philippine Debt Negotiating Team, chaired by respondent Pelaez, negotiated an
agreement with the country’s Bank Advisory Committee, representing all foreign commercial bank
creditors, on the Financing Program which respondents characterized as “a multi-option financing
package.”The Program was scheduled to be executed on 24 July 1992 by respondents in behalf of the
Republic. Nonetheless, petitioners alleged that even prior to the execution of the Program respondents
had already implemented its “buyback component” when on 15 May 1992, the Philippines bought back
P1.26 billion of external debts pursuant to the Program.

Petitioners object to the debt-relief contracts entered into pursuant to the Financing Program as
beyond the powers granted to the President under Section 20, Article VII of the Constitution. The
provision states that the President may contract or guarantee foreign loans in behalf of the Republic. It
is claimed that the buyback and securitization/bond conversion schemes are neither “loans” nor
“guarantees,” and hence beyond the power of the President to execute.

Petitioners characterize the Financing Program as a package offered to the country’s foreign
creditors consisting of two debt-relief options. The first option was a cash buyback of portions of the
Philippine foreign debt at a discount. The second option allowed creditors to convert existing Philippine
debt instruments into any of three kinds of bonds/securities: (1) new money bonds with a five-year
grace period and 17 years final maturity, the purchase of which would allow the creditors to convert
their eligible debt papers into bearer bonds with the same terms; (2) interest-reduction bonds with a
maturity of 25 years; and (3) principal-collateralized interest-reduction bonds with a maturity of 25
years.

On the other hand, according to respondents the Financing Program would cover about U.S.
$5.3 billion of foreign commercial debts and it was expected to deal comprehensively with the
commercial bank debt problem of the country and pave the way for the country’s access to capital
markets.14 They add that the Program carried three basic options from which foreign bank lenders
could choose, namely: to lend money, to exchange existing restructured Philippine debts with an
interest reduction bond; or to exchange the same Philippine debts with a principal collateralized interest
reduction bond.

Issue:

Whether or not the Financing Program was beyond the powers granted to the President
considering that the provision states that the President may contract or guarantee foreign loans in
behalf of the Republic. Petitioners claimed that the buyback and securitization/bond conversion
schemes are neither loans nor guarantees, and are beyond the power of the President to execute.

Held:

Sec. 20, Art. VII of the Constitution provides,”The President may contract or guarantee foreign
loans in behalf of the Republic of the Philippines with the prior concurrence of the Monetary Board and
subject to such limitations as may be provided under 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 language of the Constitution is simple and clear as it is broad. It allows the President to
contract and guarantee foreign loans. It makes no prohibition on the issuance of certain kinds of loans
or distinctions as to which kinds of debt instruments are more onerous than others. This Court may not
ascribe to the Constitution meanings and restrictions that would unduly burden the powers of the
President. The plain, clear and unambiguous language of the Constitution should be construed in a
sense that will allow the full exercise of the power provided therein. It would be the worst kind of
judicial legislation if the courts were to misconstrue and change the meaning of the organic act.
141. Bayan vs Exec. Sec., G.R.No. 138570, 10 October 2000

The United States panel discussed with the Philippine panel the possible elements of the Visiting
Forces Agreement (VFA). This resulted to a series of conferences and negotiations which culminated on
January 12 and 13, 1998. Thereafter, President Fidel Ramos approved the VFA, which was respectively
signed by Secretary Siazon and United States Ambassador Thomas Hubbard. President Joseph Estrada
ratified the VFA on October 5, 1998 and on May 27, 1999, the senate approved it by (2/3) votes.

Bagong Alyansang Makabayan argued that the “foreign military bases, troops, or facilities” may
be allowed in the Philippines unless the following conditions are sufficiently met, namely; 1) it must be a
treaty, 2) it must be 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 3) recognized as such by the other
contracting state. Petitioners, among others, assert that Sec. 25, Art XVIII of the 1987 constitution is
applicable and not Section 21, Article VII. Respondents argue that Section 21 Article VII is applicable so
that, what is requires for such treaty to be valid and effective is the concurrence in by at least two-thirds
of all the members of the senate.

Issue:

Whether or not the Visiting Forces Agreement (VFA) is governed by the constitutional provisions
of Section 21, Art VII which states that “No treaty or international agreement shall be valid and effective
unless concurred in by at least two-thirds of all the Members if the Senate” or of Section 25, Article XVIII
which states that “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” of the
1987 Constitution.

Held:

The Visiting Forces Agreement (VFA) is governed by the Section 21 of the Constitution .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.
142. Commissioner of Customs vs Eastern Sea Trading, G.R. No. L-14279, 31 October 1961

The Eastern Sea Trading (EST) was a shipping company which imports from Japan onion and
garlic into the Philippines. In 1956, the Commissioner of Customs ordered the seizure and forfeiture of
the import goods because EST was not able to comply with Central Bank Circulars 44 and 45. The said
circulars were pursuant to Executive Order 328. On the other hand, EO 328 was the implementing law of
the Trades and Financial Agreements, an executive agreement, entered into between the Philippines
and Japan. The said executive agreement states, among others, that all import transactions between
Japan and the Philippines should be invoiced in dollar. In this case, the said items imported by EST from
Japan were not invoiced in dollar.

EST questioned the validity of the said EO averring that the executive agreement that the EO
was implementing was never concurred upon by the Senate. The issue was elevated to the Court of Tax
Appeals and the latter ruled in favor of EST. The Commissioner appealed.

Issue:

Whether or not the Executive Agreement is subject to the concurrence by the Senate.

Held:

No, Executive Agreements are not like treaties which are subject to the concurrence of at least
2/3 of the members of the Senate. 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 exchanges 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 exchanges 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. . . . It would seem to be sufficient, in order to show that the trade
agreements under the act of 1934 are not anomalous in character, that they are not treaties, and that
they have abundant precedent in our history, to refer to certain classes of agreements heretofore
entered into by the Executive without the approval of the Senate.

They cover such subjects as the inspection of vessels, navigation dues, income tax on shipping
profits, the admission of civil aircraft, customs matters, and commercial relations generally,
international claims, postal matters, the registration of trade-marks and copyrights, etc. Some of them
were concluded not by specific congressional authorization but in conformity with policies declared in
acts of Congress with respect to the general subject matter, such as tariff acts; while still others,
particularly those with respect to the settlement of claims against foreign governments, were concluded
independently of any legislation.
143. Pimentel, Jr. vs Executive Secretary, G.R. No. 158088, 6 July 2005

The petitioners filed a petition for mandamus to compel the Office of the Executive Secretary
and the Department of Foreign Affairs to transmit the signed copy of the Rome Statute of the
International Criminal Court to the Senate of the Philippines for its concurrence pursuant to Sec. 21, Art
VII of the 1987 Constitution.

The Rome Statute established the Int'l Criminal Court which will have jurisdiction over the most
serious crimes as genocide, crimes against humanity, war crimes and crimes of aggression as defined by
the Statute. The Philippines through the Chargie du Affairs in UN. The provisions of the Statute however
require that it be subject to ratification, acceptance or approval of the signatory state.

Petitioners contend that ratification of a treaty, under both domestic and international law, is a
function of the Senate, hence it is the duty of the Executive Department to transmit the signed copy to
the senate to allow it to exercise its discretion.

Issue:

Whether or not the Exec. Secretary and the DFA have the ministerial duty to transmit to the
Senate the copy of the Rome Statute signed by a member of the Philippine mission to the U.N. even
without the signature of the President.

Held:

Supreme Court held no. The President as the head of state is the sole organ and authorized in
the external relations and he is also the country's sole representative with foreign nations, He is the
mouthpiece with respect to the country's foreign affairs.

In treaty-making, the President has the sole authority to negotiate with other states and enter
into treaties but this power is limited by the Constitution with the 2/3 required vote of all the members
of the Senate for the treaty to be valid under Sec. 21 Article VII.

The legislative branch part is essential to provide a check on the executive in the field of foreign
relations, to ensure the nation's pursuit of political maturity and growth.