ROMULO L. NERI, petitioner vs.
SENATE COMMITTEE HELD:
G.R. No. 180643, March 25, 2008
FACTS:
On April 21, 2007, the Department of Transportation
and Communication (DOTC) entered into a contract
with Zhong Xing Telecommunications Equipment (ZTE)
for the supply of equipment and services for the
National Broadband Network (NBN) Project in the
amount of U.S. $ 329,481,290 (approximately P16
Billion Pesos). The Project was to be financed by the
People’s Republic of China.
The Senate passed various resolutions relative to the
NBN deal. In the September 18, 2007 hearing Jose de
Venecia III testified that several high executive officials
and power brokers were using their influence to push
the approval of the NBN Project by the NEDA.
Neri, the head of NEDA, was then invited to testify
before the Senate Blue Ribbon. He appeared in one
hearing wherein he was interrogated for 11 hrs and
during which he admitted that Abalos of COMELEC tried
to bribe him with P200M in exchange for his approval of
the NBN project. He further narrated that he informed
President Arroyo about the bribery attempt and that
she instructed him not to accept the bribe.
However, when probed further on what they discussed
about the NBN Project, petitioner refused to answer,
invoking “executive privilege”. In particular, he refused
to answer the questions on:
(a) whether or not President Arroyo followed up the
NBN Project,
(b) whether or not she directed him to prioritize it, and
(c) whether or not she directed him to approve.
He later refused to attend the other hearings and
Ermita sent a letter to the senate averring that the
communications between GMA and Neri are privileged
and that the jurisprudence laid down in Senate vs
Ermita be applied. He was cited in contempt of
respondent committees and an order for his arrest and
detention until such time that he would appear and give
his testimony.
ISSUE:
Are the communications elicited by the subject three (3)
questions covered by executive privilege?
The communications are covered by executive privilege
The revocation of EO 464 (advised executive officials
and employees to follow and abide by the Constitution,
existing laws and jurisprudence, including, among
others, the case of Senate v. Ermita when they are
invited to legislative inquiries in aid of legislation.), does
not in any way diminish the concept of executive
privilege. This is because this concept has Constitutional
underpinnings.
The claim of executive privilege is highly recognized in
cases where the subject of inquiry relates to a power
textually committed by the Constitution to the
President, such as the area of military and foreign
relations. Under our Constitution, the President is the
repository of the commander-in-chief, appointing,
pardoning, and diplomatic powers. Consistent with the
doctrine of separation of powers, the information
relating to these powers may enjoy greater
confidentiality than others.
Several jurisprudence cited provide the elements of
presidential communications privilege:
1) The protected communication must relate to a
“quintessential and non-delegable presidential power.”
2) The communication must be authored or “solicited
and received” by a close advisor of the President or the
President himself. The judicial test is that an advisor
must be in “operational proximity” with the President.
3) The presidential communications privilege remains a
qualified privilege that may be overcome by a showing
of adequate need, such that the information sought
“likely contains important evidence” and by the
unavailability of the information elsewhere by an
appropriate investigating authority.
In the case at bar, Executive Secretary Ermita premised
his claim of executive privilege on the ground that the
communications elicited by the three (3) questions “fall
under conversation and correspondence between the
President and public officials” necessary in “her
executive and policy decision-making process” and, that
“the information sought to be disclosed might impair
our diplomatic as well as economic relations with the
People’s Republic of China.” Simply put, the bases are
presidential communications privilege and executive
privilege on matters relating to diplomacy or foreign
relations.
Using the above elements, we are convinced that,
indeed, the communications elicited by the three (3)
questions are covered by the presidential
communications privilege. First, the communications
relate to a “quintessential and non-delegable power” of
the President, i.e. the power to enter into an executive
agreement with other countries. This authority of the
President to enter into executive agreements without
the concurrence of the Legislature has traditionally
been recognized in Philippine jurisprudence. Second,
the communications are “received” by a close advisor of
the President. Under the “operational proximity” test,
petitioner can be considered a close advisor, being a
member of President Arroyo’s cabinet. And third, there
is no adequate showing of a compelling need that
would justify the limitation of the privilege and of the
unavailability of the information elsewhere by an
appropriate investigating authority.
Respondent Committees further contend that the grant
of petitioner’s claim of executive privilege violates the
constitutional provisions on the right of the people to
information on matters of public concern.50 We might
have agreed with such contention if petitioner did not
appear before them at all. But petitioner made himself
available to them during the September 26 hearing,
where he was questioned for eleven (11) hours. Not
only that, he expressly manifested his willingness to
answer more questions from the Senators, with the
exception only of those covered by his claim of
executive privilege.
The right to public information, like any other right, is
subject to limitation. Section 7 of Article III provides:
The right of the people to information on matters of
public concern shall be recognized. Access to official
records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to
government research data used as basis for policy
development, shall be afforded the citizen, subject to
such limitations as may be provided by law.
TOLENTINO VS. SECRETARY OF FINANCE, 235 SCRA
630
FACTS: The valued-added tax (VAT) is levied on the sale,
barter or exchange of goods and properties as well as
on the sale or exchange of services. It is equivalent to
10% of the gross selling price or gross value in money of
goods or properties sold, bartered or exchanged or of
the gross receipts from the sale or exchange of services.
Republic Act No. 7716 seeks to widen the tax base of
the existing VAT system and enhance its administration
by amending the National Internal Revenue Code.
The Chamber of Real Estate and Builders Association
(CREBA) contends that the imposition of VAT on sales
and leases by virtue of contracts entered into prior to
the effectivity of the law would violate the
constitutional provision of “non-impairment of
contracts.”
ISSUE: Whether R.A. No. 7716 is unconstitutional on
ground that it violates the contract clause under Art. III,
sec 10 of the Bill of Rights.
RULING: No. The Supreme Court the contention of
CREBA, that the imposition of the VAT on the sales and
leases of real estate by virtue of contracts entered into
prior to the effectivity of the law would violate the
constitutional provision of non-impairment of contracts,
is only slightly less abstract but nonetheless
hypothetical. It is enough to say that the parties to a
contract cannot, through the exercise of prophetic
discernment, fetter the exercise of the taxing power of
the State. For not only are existing laws read into
contracts in order to fix obligations as between parties,
but the reservation of essential attributes of sovereign
power is also read into contracts as a basic postulate of
the legal order. The policy of protecting contracts
against impairment presupposes the maintenance of a
government which retains adequate authority to secure
the peace and good order of society. In truth, the
Contract Clause has never been thought as a limitation
on the exercise of the State's power of taxation save
only where a tax exemption has been granted for a valid
consideration.
Such is not the case of PAL in G.R. No. 115852, and the
Court does not understand it to make this claim. Rather,
its position, as discussed above, is that the removal of
its tax exemption cannot be made by a general, but only
by a specific, law.

Further, the Supreme Court held the validity of Republic

Act No. 7716 in its formal and substantive aspects as
this has been raised in the various cases before it. To
sum up, the Court holds:

(1) That the procedural requirements of the

Constitution have been complied with by Congress in
the enactment of the statute;

(2) That judicial inquiry whether the formal

requirements for the enactment of statutes - beyond
those prescribed by the Constitution - have been
observed is precluded by the principle of separation of
powers;
(3) That the law does not abridge freedom of speech,
expression or the press, nor interfere with the free
exercise of religion, nor deny to any of the parties the
right to an education; and

(4) That, in view of the absence of a factual foundation

of record, claims that the law is regressive, oppressive
and confiscatory and that it violates vested rights
protected under the Contract Clause are prematurely
raised and do not justify the grant of prospective relief
by writ of prohibition.

WHEREFORE, the petitions are DISMISSED.